Commentary
If Being Clueless Was A Crime, Online Buyers Should Be Arrested
- by Ari Rosenberg , Op-Ed Contributor, October 14, 2010
Have you seen the Facebook movie or read the book it was based on?
Both cover the launch of the social network from the dorms of Harvard to a party at Facebook's Palo Alto offices celebrating the social network's one-millionth member. Remarkably, all of this transpired between October of 2003 and September of 2005.
In both versions, intellectual property theft is asserted, along with deplorable business behavior, but it is difficult to identify if any law was broken. However, if you look hard enough and read between the lines, you can indict media buyers for being completely clueless.
In the movie, the crime scene is an office that looks oddly like the offices where I used to buy media in the early '90s: Young & Rubicam's New York offices on 285 Madison Avenue. The scene depicts a media sales call that occurred sometime in the summer of 2004. Facebook founder Eduardo Saverin had brought Mark Zuckerberg to the meeting much in the way any sales rep might bring his CEO to help close a deal. As Eduardo is presenting the dramatic increase in site membership (I believe he quoted 154,000) to an unresponsive buyer, the scene comically shifts attention to the sophomoric noise made by the famed student CEO out of pure frustration at another dismissive reaction to investing advertising dollars in Facebook.
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While the audience in the theater laughed at the immaturity of Zuckerberg, my gut wrenched just a little. As a former media buyer, it was embarrassing to see how clueless buyers can be at recognizing opportunities sitting right in front of them.
Can you imagine the media buy that could have been negotiated with Facebook if just one buyer was paying attention in 2004, and recognized the site's exceptional "membership" growth rate (very different than unique visitor growth), along with the absurd number of visits per month the site was generating while lighting up college campuses?
At that time, the social network was operating on a budget of $18,000. What do you think they would have agreed to do for an advertiser who waved a million dollars at them? A fixed placement on every current and newly created Facebook page? Category exclusivity? God knows what else -- along with the option to renew this annual deal at these terms regardless of future growth. I am sure a handful of $10,000 "test campaigns" were run back then, but recommending a million-dollar investment in Facebook at that time never had a chance of happening -- and that's the real crime.
The habitual issue is that media buyers are trained to say no. They are so risk-averse and more concerned with covering their ass, rather than uncovering opportunities at a stage early enough to stick their necks out on a significant marketing investment that could yield astronomical returns. Instead, media buyers sell their media plans based on an effective CPM (and subsequent calculations) they promise to deliver. The main reason that they funnel millions of dollars into ad networks is to cover these promises. The CPM for a million-dollar buy in Facebook in 2004 would have blown up the spreadsheets buyers had their heads under when this opportunity passed them by.
Nine months after Eduardo Saverin sailed through the New York City media-buying market trying to sell advertising to keep the young company afloat, Facebook gave away 30% of its equity to a venture capital firm in return for $500,000 -- and the rest is history.
This story makes me wonder: What's stopping media departments from thinking like venture capitalists? Media buyers clearly have the expertise to identify media opportunities in early stages that merit unique attention, don't they? Maybe they wouldn't negotiate an equity position on behalf of their clients in these media companies, but they can secure very favorable long-term ad programs if they thought more like VCs and less like, well, media buyers.
When you spend all of your time looking for reasons to say no, you lose sight of what yes looks like.
Fantastic!!!!! Such a great point and dovetails nicely with the item yesterday related to Velociter, MediaBrands new venture/incubator. More and more there will be an onus on all of us to put our money where our mouths are in launching new products, considering new media etc........and when we succeed, the expected returns could provide thrills unlike anything our industry has ever seen in the past.
I hope a large amount of media buyers see this. It seems many try to stay "safe" but in turn never do anything exceptional for their clients.
Ari - Once again you've nailed it. I started out in the agency business way back at the old Wm Esty Co and was taught very quickly that the first words out of my mouth were to start with No. Our media planning team was one of the first to see pitches from People Magazine and a couple years later, MTV. The genius media director I reported to at the time told us on both occasions, not to spend a nickel on either one because they would be, in her words, "Dead on arrival."
Of course neither she or the agency is alive today to see that "YES" would've been a sure bet!
So true Randel -- my old boss used to say "no one ever got fired for putting Time magazine on the plan" -- aka don't take risks -- I am sure the online buyers will look at "us" and say "well we bought media at a different time" -- and that things are different now....nope, they are the exact same which is the problem I tried to raise here -- CLIENTS should fire any agency that met with Facebook in 2004 and "passed"
Thanks for your feedback....
That reminds me of how buyer after buyer refused to buy a particular ad spot on our site which got 4x the CTR of all the other spots on our site. They wouldn't buy it because it was "Below the fold." Yes, because it was elegantly positioned within the content of a page that 65% of users fully read through. I actually considered going into the buying business after witnessing this so many times.
As a long time media buyer, i have 2 comments here. 1) I agree with this POV, but it seems really bitter and the tone more fitting for someone who'd overlooked taking their child out of a hot car and 2) what's missing to keep this from being a natural way for a media buyer to think? Creativity. Moving outside of Comscore reach rankers and client directed short lists involves getting creative. Working upside down for 10 minutes sometimes does the trick for me (and gives me a healthy glow), but even more usable is 1) Comscore INDEX rankers, 2) Google search results for the product category, 3) user forums for products I"m trying to advertise, 4) talking to young people, 5) crowdsourcing ideas, 6) drinking wine 7) Virtual world focus groups 8) reviewing my Creative Whack Pack, 9) per using Twitter subjects for the product - seeing what ideas are trending.....oh and about 100 things more that keep me sooo extensively focused on this wild world of digital media advertising!!!!!!
Good for you Ann!!! Love your response and for being the first media buyer to enter a comment -- I did not mean to come off as bitter -- but oh boy was this a big whiff you know....thanks for the good humor and great advice.
Thanks for inspiring me! So much so i am digging out of my files....a cartoon i used to keep at my desk when I first started media buying. Its of a medieval war, soldiers doggedly fighting with swords...they could not be bothered to turn and speak to the merchant taking cover behind a shed, who wished to introduce them to a new idea.....a machine gun.
During my years, I have been on both sides of aisle. A few things as you asked and answered have not changed. Also, to note, for the same reason to leave the agency side is that sales jobs are much more lucrative. Many agencies did and probably still do count on perks from the media to enhance buyers paychecks. What is the average age of a buyer today?
Great column Ari, dead on. To be fair to the buyers out there, unlike VC's, they don't get rewarded for smart, long-term investments. In this day and age, with the average tenure of a CMO b/w 18-24 months, they are reduced to quarterly spreadsheeting. Short-term, quarterly profits are to blame, not the creativity, or lack thereof, of the media buyers. That being said, I agree wholeheartedly with the lack of vision on both sides of the table.
I agree that media buyers should be more open-minded in general, but Facebook dug their own hole with media buyers in 2003-2004. They thought audience & growth was all that mattered, and didn't think thru the tactical "hows" of generating ad revenue. The learning from Facebook is that any start-up whose revenue model depends on ad sales must have a strong sales leader on board early. That will lower the risk factor in buyers' minds and allow both buyers and sellers to make progress.
Arlo, you are absolutely right -- thanks for putting that on the table.
And Jonathan, I get that a guy in a hoodie coming in to sell some ads isn't what buyers are used to seeing, and yeah, FB likely had no clue on how to structure their ad sales at the time -- but there should have been ONE buyer out there in 2004 who saw the membership growth freakshow the site was performing and figured out how to lasso that for their client.
It's not the Media Buyer's call. It's the client's. Today it's ALL MEDIA. A new product may have a short life, but if it has an audience today, it's a valid media buy today. This is simple stuff
Walter, I disagree. Clients pay their media agencies to be their expert and identify unique opportunities and furnish rationale as to why an investment is worth the risk -- then if the client says no at least the agency did their job. In the case I highlighted in this column -- media buyers failed to do their job and it has nothing to do with them personally and everything to do with the media buying practice of always looking for where NO lives.
I Disagree with Arlo. Many of today's buyers are "creative" enough to find ways to get rewarded for smart investments and for uncovering great deals for their clients. We can point all we want to quarterly profits making busy work, but creativity is key. Creativity means thinking differently not just how to research, plan and buy, but how to price it differently so we all win for our efforts to go the extra mile. LIke just today, I ran across this ad in AdWeek for Cardalytics, and immediately thought of my Finance client and what might this firm have the would align well with their products....I guess you will have to contact me to find out the creative thinking part! ;)
Ann, I don't doubt there is creativity occurring in the marketplace, and I'm sure your agency has made many smart investments, and created real value for your clients. What I think Ari is saying, and I see it all the time, is a lack of risk taking, as well as a lack of strategic, long term investment being made in our space. Chasing the quarterly earnings call doesn't only make busy work, it creates myopic short-term thinking that stifles true innovation. There are a lot of singles and doubles being hit, but not much long ball.
That being said, I will certainly be reaching out, and look forward to your creative thoughts!
Do the recommendations by media buyers still have to go through and approved by the account executives before it gets any further?
I found this discussion very interesting as I come at it from a different perspective. I'm an editor, or as I like to say, a content provider, but at the same time, I am a part owner in my website, automotivetraveler.com.
We all like to think that we're going to be the next wave, in my case, coming up with a platform that effectively bridges the print-digital divide. I'm a magazine junkie. To me, few things are better than sitting down and enjoying a well-produced, glossy magazine. But the Internet has changed the game, in many ways, not always for the better.
I'm striving to produce what I like to call a more magazine-like reading experience on a digital device. I firmly believe that the iPad and the coming wave less expensive tablets and e-readers are going to change the way magazine content is delivered to readers.
Above, someone mentioned that it's essential that "any start-up whose revenue model depends on ad sales must have a strong sales leader on board early." I agree and that individual or team has to be evangelical about both the platform (in my case a viewer that is both iPad- and browser-friendly) and the content (an automotive adventure travel magazine that spans two viable genres, automotive and travel).
My problem, as we've built up automotivetraveler.com is attracting that rare sales professional who sees our potential, can make suggestions and give input on strengthening the content package, then going out and selling it.
Maybe someone on the sales side will see our potential and will want to be the catalyst in getting us to the next level and beyond.
Richard Truesdell
Partner and Editorial Director, automotivetraveler.com