• by Daniel Ambrose , November 15, 2012

Newton’s third law of physics says that very action has an equal and opposite reaction.  It’s a principle that can very often be applied in the world of business.  Often the equal and opposite effect is hard to see or understand immediately, but observers should be alert:  It’s definitely there, as when you push down on a waterbed, you can be sure the water will rise somewhere else.

One example of how Newton’s law impacts the marketing business is how low-display pricing has driven online publishers to focus on custom marketing solutions, “complete solutions” that combine webinar sponsorships, microsites, promotions, social media marketing etc., and simple “native advertising.”

Our industry has been subject to relentless commoditization of marketing and media.  Particularly in the consumer advertising sector, advertising agency holding companies have tried to industrialize the process of developing the advertising messages and the planning of and buying of media.  By creating separate business units that can stamp out creative, and do fill-in-the-blanks media planning and buying, they aim to create higher productivity.  Alas, they may be creating lower quality, too. 

Perhaps every media buying service secretly knows this, and that is why, at the same time they issue RFPs for the lowest pricing in inventory, every RFP seems to include a demand for a “unique, custom, marketing opportunity.” 

In short, advertisers know that pounding away with frequency, even with cleverly targeted frequency of advertising at times close to the purchase and in places with the greatest exclusivity, is no substitute for effective creative messages that fit the mindset of the prospect.

At the OMMA Premium Display Conference last week, one of my panelists on the “In Search of the Digital Don Draper” session said the most level of interaction they – the creative agency – have with the media buyers is an email with a spreadsheet.  How that achieves the greatest value for the dollar is hard to figure.   I guess the procurement departments at big consumer brand companies are certain this approach achieves the greatest amount of clicks per penny.  The workers in these advertising factories are just as frustrated with the productivity calculations they work under as we in media are. 

Studies of advertising effectiveness -- including studies of the performance of “rising star” ad units conducted by the IAB, reported by Peter Minnium at the OMMA Premium Display conference -- clearly show far more variability of results based on creative rather than on unit sizes or media choices including targeting or frequency. 

The advertising business is moving fast moving down a path of rote media selections and commodity buying.  eMarketer recently predicted that by 2015 real-time buying of digital display advertising through exchanges will grow to 25% of all such spending.

It is ironic that actual assembly-line manufacturing companies, like car companies, have moved from the rote one-person-one-action assembly lines to teams of workers who are cross-trained and work together to achieve greater quality and productivity.  Toyota is the poster child for this, with a system its competitors had to imitate to keep up. Why is the advertising and media business going in the other direction?

But, as Newton says, there must be an equal and opposite reaction somewhere.  Yes, we are seeing that reaction as media companies become marketing services partners with their customers; providing more complete, coordinated, multimedia solutions for advertisers who genuinely want well-integrated  solutions designed to achieve brand building and sales objectives, not just clicks or branded game play.

Media companies are where the new digital Don Drapers will be found, as companies like ESPN and Turner develop complete multimedia solutions for advertisers, and Meredith acquires digital agencies and creative assets.  Meredith, it should be remembered, announced a guaranteed results program that ties its compensation to sales results for large clients willing to work with the company.

All online publishers, not just the “legacy” companies, need to focus on how to become more important to their core customers.  If you are not investing in the resources to offer unique solutions of great value to your customers, the equal and opposite reaction to your low investment will be low return and low loyalty from your customers.