The Last Gasp of [Old School] Marketing

by Joe Mandese, Jun 6, 2012, 5:49 PM

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When it comes to enormous change in media and marketing, there’s never been a shortage of prophets or doomsayers, but the apocalypse never quite arrived. While editor-at-large Bob Garfield admits that Jurassic marketing models have survived longer than he expected, audiences are still shrinking and prices still rising. That means the tipping point is closer than it appears, he believes. The good news? In the very near future, the relationship between marketer and consumer will be a whole lot cozier.

Garfield, a speaker at the Brand Marketers Summit, fills Joe Mandese in on the new rules of radical transparency.

The theme of this issue is “radical change” in the media and marketing business, a subject that has been dear to your heart. What’s your current thinking on that?

I don’t care to comment.

Great, we’ll just publish that as a big pull quote, with your picture on it.

Well, I think we are in the middle of a radical reset of all of the forces that we have long taken for granted. We, of course, have seen the ongoing collapse of entire categories of media — newspapers, magazines, music, book publishing, and increasingly, Hollywood, and the television networks, as well as local broadcasting. As dramatic as those changes have seemed, and as disruptive as they have been, I think I underestimated the amount of time before broadcasters would start going into the red, and consolidation would take place.

Well, if you look at the newspaper industry as the canary in the coal mine — that has already happened. Why have broadcasters been able to hold on for so long? 

Several reasons. One is inertia. An object in motion stays in motion. You know, there’s a lot invested in the status quo, and nobody wants to let it go. The second reason is that advertisers are willing to pay more for something they can measure — even if the measurements are dubious — than for new distribution channels that are difficult to get a handle on. Third, the promised targeting in digital marketing has substantially not been achieved because of fears of regulatory and legislative backlash.

The reason more money hasn’t moved from broadcast to digital is that last gasp mentality. As their mass audience shrinks and shrinks, ironically and paradoxically, it has made what remains of their mass audience even more valuable. So, advertisers continue to pay a premium for something that is diminishing compared to the “good old days,” but it’s still much greater than you can achieve efficiently online or even on cable. It’s like paying $9 a gallon at the last gas station before Death Valley. You know you’re getting gouged, but … what are your options?

So what does that mean for marketers and their agencies? How are they changing and evolving because of this tipping point that we’re reaching?

Well, if you listen to people like — and, now, you’re going to have to fill in the blank here — I don’t know the guy’s name — the CMO of Subway [Tony Pace], he is just delighted with the status quo, because a lot of his peers are running away from TV and socking a lot more money into online and other channels. He is marching out and buying more and more inventory all the time with glee, because he still thinks that is the most efficient way of doing business. This is a big, big, big customer. His story is that he’s delighted to see the other customers run away because that gives him more buying power.  That may be working for Subway now, but I think it’s a very shortsighted view. I hope they are prepared to change radically when the tipping point does occur — when the audiences are so small in broadcast and the price is so high, and the ad avoidance so substantial, that you cease to be able to manipulate the numbers to create the illusion of return-on-investment.

You’re a member of the media industry itself — a journalist who covers advertising. Aside from being an oxymoron, what kind of unique vantage point does that give you in terms of the way other people in the industry look at it?

Nobody can argue that I’m self-interested in my various apocalyptic proclamations. On the contrary. I don’t think there’s anyone more vulnerable than a print media person. Of course, I’m now at MediaPost, right? So, things have changed a bit. But for most of the time that I’ve been writing about this, I was a print reporter covering an industry from within an industry that itself was in great jeopardy. Believe me, I felt it every which way. I was extremely invested, and I continue to be extremely invested, in the status quo. But that’s no reason to be a denialist. My personal economic model has had to change dramatically, and it wasn’t my choice. I have a bunch of friends who are just so “see no evil, hear no evil, speak no evil,” and they’re completely vulnerable. They are totally at the mercy of their companies’ ability to lose money for yet another year before finally closing up shop. It’s terrible. So, I may be an alarmist, but I’m not a self-interested one.

How much of that do you think is a glass half-empty perspective coming from established media versus looking at the upside? If you look at what Google did, it created a whole new cottage industry for Madison Avenue — search optimization and paid search. The same thing is happening now with social. We don’t necessarily understand how it’s all going to manifest, but it’s creating new opportunities, too.

Yeah, but what’s weird to me is how, instead of taking the opportunities as they are presented in social, so many people seem to be trying to force the square peg of social into the round hole of traditional media — you know, trying to use social as a means to drive transactions, for example. I see it all the time, and it’s like, “No, social is not a sales strategy.” Yet, for whatever reason, both clients and a substantial percentage of the social agencies just don’t seem to grasp it or internalize it. 

So, it’s a combination of taking the opportunities that present themselves, and a failure to understand precisely what those opportunities are. Everybody wants transactions, and everybody wants to have a sustainable ongoing business with a low cost of acquisitions, and a high percentage of customer retention and loyalty and advocacy, and all that comes with it. But you don’t get that by using your Facebook page to try to make sales. Yet you see that just everywhere. It’s kind of phenomenal.

Isn’t that because they’re trying to retrofit old business models into a new medium that they haven’t figured out how to use yet?

I think that’s true. I think there is no greater example of that than this cult of the viral video.

You consult a little bit on the agency side these days. What is it like, when clients come in and ask for a “viral video” or a “viral campaign” and expect it to happen like magic? Is that really the mind-set that is out there right now?

I’m not in those meetings, but I think, for all the complaints of agencies that talk of clients coming in and requesting a viral video, there is no shortage of agencies claiming that they’re in the viral video production business. That’s just manifestly undoable. Virality is a phenomenon, and it happens very seldom. Planning for it is a fool’s errand. Promising it to a client is fraud. If that is your goal, everything you do along the way to achieve it and fail is going to be counterproductive for your business.

The other thing about it is that many agencies think the solution is, “Well, no, we’re not going to be doing that many 30-second spots on full broadcast anymore, but look at all the production we can do online.” There’s this endless desire for more and more videos, for more and more channels, whether it’s YouTube or Facebook, or what have you. But I’m not sure that the way to do social is to constantly create new videos that are just essentially TV commercials online. There is just virtually no evidence that people respond to TV advertising in a social space. On the contrary, they consider it boring to have to view, and rude of the person asking them to view it.

It’s kind of like going to somebody’s home for dinner, and you find out that at dessert they start pulling out easels and drawing circles for an Amway presentation. It’s just bad manners. The evidence is mounting that there’s an inverse relationship between branded-ness and pass-along. So, as such, if you’re producing video online and it looks like a commercial — and that is what most of the agencies are doing — you’re producing the wrong things.

So, social is a cause célèbre for our industry. We are all enamored and preoccupied with it. But, over the 30 years that you’ve been a journalist covering this industry, there’s been “the next big thing” shaking everything up or freaking everybody out. It might’ve been search before this, and it’ll probably be mobile after it. And there’ll be something after that. But it seems like these things are just accelerating and catching people by surprise. What do you think is “the next big thing?”

Ah, I think “the next big thing” is the convergence of technology, the collapse of real mass media, of real reach, and a change in society’s view toward corporations that will fundamentally change brand and customer relationships. Not because anybody voted for it, but because of this perfect storm of Internet transparency and loss of reach. We are in this new era of relationships that will define success or failure for, basically, all brands and all institutions. So, it’s not a question of talking about social, or traditional, or mobile, or app-based or Web-based, but just a fundamental shift in the way people relate to the people who provide goods and services. That’s where I stack all my chips. It’s on the idea that the future of marketing is the future of sustainable relationships.

As much as our relationships with brands have changed elsewhere online, the change will be even more evident in mobile, because, in addition to vying for our attention, and in addition to not wanting marketers to interrupt us in our social life, we will less want them to interfere in our busy running-around-all-day lives. And, even less, will we want them interfering in our battery life. To the extent that our finite battery life is chewed up by people sending you offers that you don’t want to see, and tweets that are self-serving, and so on, there is a tremendous, tremendous possibility for backlash. I’m willing to put up with some over-promotional stuff on my desktop. If this stuff starts taking my precious battery life, I might start a boycott or a wholesale insurrection.

What’s the one piece of advice you could give brands and agencies right now to prepare for this?

I would say, in everything you do, think about valuing trust over time. Anything that you do that will make you less trustworthy in the long term is something that you should not undertake at all. That can range from [being] a big phony in your social platforms, to lying, to being too intrusive, to selling where you’re really in a social situation. And if you do get caught in some sort of scandal or controversy, don’t try to lie about it. You’ve got to go to radical transparency because that has been imposed on you by the digital revolution. And wishing that you could operate behind the fortress of opacity is dead. That is gone forever.

In other words, people should do the exact opposite of what Madison Avenue has been doing for the last 100 years?

Yes, that’s basically it. Yeah, in the present, and certainly in the future, the relationships between brands and their various audiences will directly parallel the relationships that individuals have between one another. And you can no longer dictate the terms in a relationship if there is nobody who is listening.

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