Integrated Media Sales

What Si Newhouse Taught Me.

It highlights my age and number of years in the media business to say that I overlapped with a few of the great names in media – names that understandably don’t mean that much to today’s 30-year-old media executive who’s orientation is all about the present and future. But the fact that I’ve worked for titles led by Helen Gurley Brown (Cosmopolitan), Jann Wenner (Us, Rolling Stone) and Louis Rossetto (Wired) is something I wear with a great deal of pride.

Which leads me to Sunday’s passing of S.I. “Si” Newhouse, Jr., the legendary chairman of Condé Nast. Newhouse was controversial, iconoclastic, painfully awkward and sometimes ruthless. But few can argue that he called the tune on the golden age of the magazine business in the 80s and 90s. And even though Si could never have picked me out of a lineup during my five years at CNP, he nonetheless left a mark on me. So here’s a short appreciation in three parts.

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Part One: He paid a ridiculous amount of attention to the details.  Despite being one of his day’s wealthiest Americans and overseeing titles like Vanity Fair, The New Yorker and Vogue, Si famously arrived at work before dawn and read every page and noted every ad in every single one of Condé Nast’s titles. On a yellow legal pad he’d scrawl notes to publishers with a 49-cent Flair pen and staple them to ads he appreciated seeing – or to those he thought should be running in your pages. Even I got one.

Part Two: He played the long game. Some found fault with Si’s willingness to absorb years of losses on magazines he thought were important. But more often than not his bets on editors and concepts paid off, creating a halo of quality and a baseline of creative assets and brands that commanded premium prices, became must-buys for key advertisers and became the centers of gravity for the worlds they covered. As a sales guy at the launch of Allure, I saw first-hand how he didn’t hesitate to push off the magazine launch by months, then call for a major redesign after just a few issues… setting up Editor Linda Wells for more than two decades of success.

Part Three: He understood the difference between price and value.  Si was notoriously quiet and reclusive. The only time I got to hear him speak in a small group setting was when someone asked him why Condé Nast never, ever negotiated on price. (Something that has changed in the intervening decades, but that was legendary in its time.)  His answer was short and meaningful and something I repeat constantly to this day. “My father used to tell me that you can talk about price or you can talk about value,” he explained. “But you can’t talk about both at the same time. We just don’t let our people talk about price. So they have to talk about value.”

Si Newhouse’s legacy is undeniably complicated. And he was very much “of his time.” But some of what drove him is still timeless.

Hack to the Future.

Hack to the FutureLast week in this space I published a post called “The Full Service Publisher,” in which I speculated that media companies were stepping into the full-service void created by decades of ad agency fragmentation and bureaucratic shuffling.   While I still see this as a hard trend, I was forwarded Mike Drexler’s excellent post from Media Village which might come under the heading “…not so fast!”

Drexler describes McDonald’s recent insistence that Omnicom create the equivalent of a full service agency to handle its business going forward.   It’s tempting to speculate – as Drexler does – that this “may be a snapshot of the future as more clients reexamine their business requirements in a complex and fast changing digital environment.”  Or not.

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I’m not saying it’s impossible, just that it’s highly unlikely.  Here, in my humble opinion, is why:

  1. Like the best-selling book says, show me the incentives and I’ll show you the behavior.  The holding companies are incented to keep media buying and planning separate from other services because it’s probably the most profitable stand-alone business they have. Unless the climate continues to sour and margins get way smaller, leadership won’t act against their own financial interest.  People just don’t.
  2. The Lost Generation. Even if agency leadership was highly motivated to put the pieces back together, agency services have been siloed for so long that there’s just about no one left who remembers how integration is supposed to work.  See how many people in marketing today remember Jay Chiat, Bill Bernbach or Jerry Della Femina.  The code is lost, I fear.
  3. The Talent Vacuum. Every few months we focus on a new crop of hyper-talented agency leaders and anoint them as the saviors of the practice.  And every few months, 8 of every 10 leave; they move to the client side, they join media companies, and increasingly they throw in with platforms and social powers.  Re-animating the golden age of full-service agencies is a big job that calls for the best business thinkers on the planet.  Do agencies have the cachet – or cash – to attract and retain that talent?

Welcome to the dawn of the full service marketing age, which agencies may just sleep through.

Media with Benefits.

I didn’t make up the phrase “Media with Benefits:”  I heard it used by a media agency leader yesterday in a closed-door meeting I was hosting.  (Since it was said in that context, I’ll let the originator stay anonymous or self-identify at their own discretion).  It’s too rich a slogan not to seize and interpret here in The Drift. We can parse this phrase two different ways:  both in terms of its intent and also through a  broader existential interpretation that questions what a media seller really does for a living these days.

How It Was Originally Intended: From a media director’s point of view, it means “Yes, we’ll buy banners and pre-roll videos and push-downs and sponsorships from you, but we need you to add value.  Give us insights, integration, creative support, special research.  We can’t be seen as just buying placements anymore, and you can no longer afford to simply be a source for those placements.”  If this post stopped here, it would have been a good and valuable read.  This is the minimum that a media sales professional should be doing in the market today.  Your job is to create value;   you’ll just be getting compensated in media dollars.

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The Larger Concept: The deeper, existential translation of “Media With Benefits” challenges the very nature of how the seller and the media sales organization see their place in the world.   The system for precisely distributing outbound advertising messages across the infinite supply of online “inventory” is fully in place, and that market is commoditized now and forever.  If you’re selling “holes in pages” today, the best you can hope for is increasing “yield” while reducing friction and cost. (Newsflash:  Google and Facebook have a pretty good head start on you.)

Hope is not lost, however.  The answer for today’s media seller is to raise your aim, not lower it.  Focus on (1) accomplishing marketing tasks, (2) creating compact, distributable marketing environments, and (3) doing it all by co-opting the same ad pipeline that’s about to commoditize and marginalize you.  In short, start pushing better stuff through the pipes.  Bring the marketer fresh creative concepts, research opportunities, information services, CRM options — you name it –and plan ways to distribute and fulfill them through the ridiculously intricate ecosystem of plumbing, networks and platforms we’ve built.

Marketers don’t need more media in which to advertise.  Start leveraging our infrastructure to deliver true marketing benefits and you’ll find yourself happily back in the game.   Want to talk about some examples?  Give me a call.

The Reverse Auction.

I’ve been on a tear this past two weeks, engaging in some really provocative and thoughtful workshop discussions with a number of clients.  A big topic of conversation has been the state of the RFP (request for proposal) process in the digital world.  There’s a tremendous amount of grumbling and dismay, but also a sense of resigned inertia:  “I hate it but can’t figure out how to get away from it.”

For media companies — publishers, site owners — the first step to creating an organizational strategy to deal with RFPs is to look at them in the plain light of day and see them for what they are.  The RFP as administered by countless digital buyers is a Reverse Auction.

My premise here is that the “smart, sexy money” is spent early in the marketing cycle.  This is where strategic ideas and big deals are born.  Once that money is gone — much of it being spent at premium prices — the Reverse Auction begins.  The agency buying team is charged with executing a plan that meets very specific financial and results criteria.  The “have nots” — those sites and providers who have not had a bit at the apple yet — are given a ridiculously short window (where there will be little-to-no buyer interaction) to provide their very best prices and value adds.  This part of the process is designed to generate a sense of fear among the sellers, and thereby extract the best possible prices.  They are in effect “bidding down” the average cpm of the plan.  Hence, “Reverse Auction.”

A cynical spin on my part?  Perhaps a bit.  If you’re not going to go this far, at least grant me this:  The “P” in RFP actually stands for “Price.”  So start dealing with them on the basis of that reality, and stop bankrupting your sales and creative talent by going into full creative mode every time an RFP hits the in-box.  Once you evaluate how many of those 48-hour “big idea” requests actually ever come to fruition, you realize what a fools game they really are.

The Next Garfield

I’ve long followed the work of Bob Garfield —  from his acerbic Advertising Age reviews to his weekly hosting of NPR’s “On the Media” through the publication of “The Chaos Scenario.”  The announcement about his leaving the Ad Age gig didn’t particularly surprise me.  Bob’s got a particular vision for the future of the media and communications industries and having him trash or praise a 30 second spot every week started to seem weirdly anachronistic.  It also seemed like a colossal waste of talent and brainpower.

If you’ve never listened to “On the Media”, make a point of doing so.  Bob and his co-host Brooke Gladstone do a superb job of plumbing the emerging media landscape, and it gives you a glimpse of what this guy can do.  If we ever needed Garfield the industry thinker and truth teller, it’s now.  So Bob, now that you’ve decided to hang out your shingle and go rogue, here are a couple of topics for you to bat around:

The Chaos Game Plan. OK, so we’re buying the whole Chaos Scenario but now what?  What do the interim business models and organizations look like in the space?  Who will profit from the tumult and what are some dos and don’ts for survival?

Ad Agency:  Game Over? Is it time to stick a fork in the whole agency business as we know it?  You’ve consistently trashed the award-mongers and the cult of self congratulation that dominates the Mad Men set.  But give us a timetable: how much longer before we see the agency model completely implode?

The Future of Talent. That our overall industry has become incestuous and self-referential is beyond question.  From your perspective, Bob, what professions and callings should we be calling on to help design the media and communications future?

Don’t get me wrong: I love snarky commentary as much as the next guy, and I hope that Garfield will never lose that quality.  But what an opportunity to make a significant intellectual difference in the future of the business you’ve so long critiqued.