• by David Ward , February 7, 2003

In tough economy, agencies are reevaluating all aspects of the campaign. by David Ward

Former Clinton aide James Carville used to say, "ItÕs the economy, stupid" Ñ a mantra he wielded to keep a political campaign focused. But now it has become an important phrase in pitching, planning, and executing advertising campaigns. "[The economy has] primarily made advertisers more cautious," says Guy Forestier-Walker, vice president of the MPG subsidiary of Havas. "It has caused not only a reduction in advertising budgets, but also a reallocation to things they envision as safe options Ñ like television."

But far more than just driving down overall budgets, the current flat performance of Wall Street and depressed consumer confidence numbers are changing the way individual advertising campaigns and media buying are judged. Gone are the days when there was any sort of grace period for ad agencies and their clients to feel around and determine an audience and then spend time slowly positioning a brand in order to lay groundwork for sales farther down the road.

"Marketers are being asked to demonstrate results in a much more tangible way than theyÕve had to in the past," says William Band, director of marketing solutions with Braun Consulting. "They now have to build a business case for their marketing process and identify much more specific metrics that theyÕre then going to be held accountable for. Goals like improving awareness and propensity to buy are giving way to how many people are we driving to the website or how many real leads are we generating."

This new accountability forces media planners to take a fresh look at everything. They are finding entirely new ways to define audiences and identifying new pockets of potential consumers. ItÕs also leading to new ways to determine the right media mix, with the emphasis moving away from finding the right balance between say, TV, print, and outdoor to looking for the sweet spot that melds new areas such as grassroots marketing, online, and sponsorships.

Audience Targeting
A key component in this process is moving beyond terms of income, age, and geographic location and buying the media that match those numbers. "WeÕre getting away from saying itÕs a C-level executive, so [when buying radio] itÕs news, itÕs rock, and maybe itÕs a little sports sponsorship," says Geoffrey Klapisch, senior vice president and director of media services at Hill/Holliday. "ItÕs moving toward what we call mind-set mapping Ñ where we try to identify a customer and then build their media clock."

"Even within a defined media like radio, we know that people want to be informed in the morning and entertained in the afternoon," Klapisch continues. "That tells me that the messages have to be tweaked between a.m. drive time and p.m. drive time. It also means that different station formats have to be chosen, because the people who listen to a news station in the morning probably wonÕt want the same information in the evening. Instead it might be traffic or weather, mixed with easy rock."

Invariably this new way of looking at consumers means that the audience is being defined and marketed to in smaller and smaller segments.

"ThereÕs definitely a trend toward more micro-marketing kinds of activities," says Band. "What we see happening is that instead of having a handful of broad-based campaigns, [agencies are] targeting smaller groups and then, based on the customer analysis, they close the loop in terms of measurement much more quickly and then re-target based on what theyÕve learned a lot faster. Clients who used to have six or seven major campaigns now have 106 campaigns, because theyÕre trying more things and theyÕre able to get more real-time feedback."

One of the interesting side effects of targeting advertising based on narrow micro-markets or tribes is not just whoÕs being included, but rather which groups of potential consumers for a clientÕs products are being ignored. This is especially relevant with so many brands that have become obsessed with the youth market to the exclusion of anyone over 35. As an example, Forestier-Walker says that even if someone is a 50-year-old MTV viewer, that person is probably more interested in the movies, music, games, and conceivably even food snacks that are advertised on that network than a 20-year-old non-MTV viewer.

This doesnÕt necessarily mean that all broad-brush campaigns aimed at expansive demographic categories are being abandoned, says Forestier-Walker. "But it needs to be used with an understanding about who the consumers really are. The kind of crude demographics that have been traditionally used by this industry, such as women 15 to 54, work well in theory but in practice never really define the consumer for any kind of product. Media buyers need to be evaluating success or failure based on a very specific definition of a target audience."

Branding
One the benefits of a move toward defining consumers more by behavior than by hard and fast demographic categories is that itÕs helping to unearth new pockets of promising consumers. Jennifer Kohl, executive director of media integration at Young & Rubicam (Y&R), cites one such group, called "Zoomers" Ñ empty-nest baby boomers with lots of disposable income and a determination not to follow in their parentsÕ footsteps and go quietly into their golden years.

This understanding enables media buyers to have more input in moving from brand exposure to brand interaction. "Consumers are bombarded with the same types of messaging," says Kohl. "So clients are beginning to realize that the consumer needs to have more of a brand experience, with consumers almost pulling the information out of the brand rather than the brand pushing information to the consumer."

One of Y&RÕs programs for the Sony Vaio line of laptop computers, for example, combined traditional brand awareness advertising with a joint program with Delta Airlines that enabled consumers to actually handle the product in that airlineÕs Crown Rooms.

"It was an extension of the advertising campaign, and the message of that campaign was ÔGet Close,Õ" Kohl says. "But the key insight was that we wanted to own the mobile professional, and that target market really needs to integrate with the brand outside of the retail environment. Ultimately we wanted to drive them to retail, but we know how hard it is to get them into a Circuit City, so instead we brought the product to places that are relevant to them."

Rich Gagnon, executive vice president and media director at Foote, Cone & Belding (FCB), says, "This whole area of experiential branding is the sweet spot. The goal now is to find the right communication bundle that can reach and influence a purchase decision Ñ from branding, to exciting a customer into a retail environment, to actually closing the sale through point-of-purchase. That whole experience has to be part of the thought process as opposed to only looking at weight levels on TV or numbers in print."

OnlineÕs Resurgence
This new look at the business is reviving the entire old-media-vs.-new-media debate among advertising agencies and media buyers. It is also leading to a resurgence of online marketing. "IÕm not sure what the impetus is for its momentum, but online is coming back," notes Jeff Steinhour, director of account service and a partner with Crispin, Porter + Bogusky (CPB) in Miami.

Steinhour says even traditional brands that got burned the first time around are now taking baby steps back into Internet-based campaigns. "A lot of the kinks have been worked out," he adds. "For one thing, banners and pop-ups and other types of intrusive ads that were never really highly regarded in the first place arenÕt being peddled by agencies the way they were three or four years ago."

The obvious lure of online advertising is not only its flexibility, but also its ability to facilitate one-to-one direct response. "You can do interactive marketing and you can measure the results, and you can do database marketing, which would be a form of micro-marketing," says Harvey Goldhersz, CEO of Beyond Interactive. "The key is that people are being more disciplined in their approach and are using whatever hard data they can gather, even for unproven or less-proven types of media, before making their choices."

Only a handful of companies are opting for an online-only marketing approach. Instead, most are looking to closely integrate their offline and online campaigns and leveraging the Internet as kind of early-warning system. "Companies are using online to give them a little bit of a canary in a coal mine as to whether the campaign is working or not," says Band.

Product Placement
The other new trend that seems to gaining traction among media buyers is product placement. At the recent Consumer Electronics Show in Las Vegas, a host of manufacturers announced plans to follow TiVo and Replay into the personal video recorder (PVR) market, with most of them using the allure of skipping through commercials as one of their main selling points.

Jason Kanefsky, vice president/managing director for MPGÕs OnSet Marketing division, says he expects the impact of PVRs to become a much larger concern for TV advertisers in the coming 12 months. But he quickly adds, "The bigger problem to me is the commercial break itself, which tends to be an opportunity for people to do anything other than watch TV ads."

"If you go back 40 years, advertisers owned the program, and I think youÕre going to start seeing more of that on a greater level in 2003 and 2004," Kanefsky continues. "The only thing better than the A position, the first commercial out of the program, is to be actually in the program."

Of course, product placement is not a perfect solution. Merely seeing a product somewhere in the background of a TV program may drive consumer awareness and give the brand some cachet, but it does nothing to differentiate the product from competitors, let alone constitute any sort of call to action.

Even with those limitations, Kanefsky says, "the really big guys will do it because itÕs not that big of a risk for them. If youÕre spending $100 million, itÕs not much for them to take $600,000 or $700,000 out of their media budget for product placement. The other guys that can do it are the little guys because they can take their small amount of money and spend it all in one shot on something thatÕs really unique and creative."

Advertising executives and media buyers are quick to give their clients credit for the courage to try new strategies and explore new media even in the current economic climate. But these advertisers now want measurable results, and fast, and the mantra that now extends throughout the advertising world is direct marketingÐlike accountability.

"Even clients that do general advertising are looking for those types of direct market solutions to show their bosses that things are working the right way," says Sheri Rothblatt, senior vice president and co-media director at Wunderman. "So weÕre asked to step into the creative process in a lot of ways, either by saying you should put a URL or 800 number here or this is the type of unit that will work well there."

Accountability
This new requirement for almost super-accountability is one of the silver linings from the dot-com implosion. It was triggered, at least in part, by a complete lack of awareness that marketing investments had to be justified by a ROI (Return on Investment). "Because of that thereÕs now a heightened interest with almost every company we work with to establish a direct correlation between program and sales," says FCBÕs Gagnon.

To accomplish this, advertisers and their agencies are using any benchmark they can get their hands on to measure success. These range from broad tools such as IAG and Arbitron to custom market research that uses automated technologies to integrate the companyÕs own information on their consumers into a third-party database.

"One of the effects of the current cautious mood is that many advertisers are now willing to invest money in analysis, which allows them to get a grip on what their return on investment actually is," says Forestier-Walker. "To do it right you need a certain amount of expertise in high-level statistical analysis, which doesnÕt traditionally reside in an agency. But more and more agencies, including ours, are taking that on, and hopefully that trend will continue after the economy picks up as well."

ItÕs rare that a client will pull the plug on a campaign in the name of accountability if it doesnÕt deliver the desired results in the first few days or weeks. But the result of this new accountability is that campaigns are being reevaluated, and creatives and media buys changed on the fly, far more often than they have in the past. "Clients are adjusting more frequently than they did a few years ago and asking us to aggregate more back-end data than they did a few years ago," says Beyond InteractiveÕs Goldhersz.

Eva Boker, SVP of marketing at LowerMyBills.com, says her company stopped using outside agencies for its media buying and creative. She wanted to get away from cookie-cutter advertising and have that real-time flexibility in its exclusively online campaigns. "We do tons and tons of tweaking, and test and test and test again," she explains. "Everything from the color of the ads, to where on the page, to where theyÕre placed, to what sites they are on all gets compared back to the type of direct response we get."

Approval Process
Even though campaigns are now undergoing almost continuous revisions as they run their course, ironically, the one area where agencies have few complaints is the speed with which their clients approve the original media plans presented to them. "In terms of clientsÕ selecting new agencies, weÕre certainly seeing over the last 12 to 24 months a much longer courting period," says CPBÕs Steinhour.

"But we havenÕt seen a slowdown in the approval process. Brands arenÕt switching agencies as often as they did, and once on board itÕs still first to market, best ideas win, and beating their competitors with smart thinking. I donÕt think that will change."

Indeed, many marketing departments seem to be reacting to tighter budgets by expediting the approval process, as if fearing that if they donÕt commit those dollars now, they may be gone tomorrow. "WeÕre dealing with tighter time frames in terms of approving a media plan and when they want to be in market," says Klapisch of Hill/Holiday.

WundemanÕs Rothblatt suggests that part of the reason for the seeming haste is that many clients are focused on the here and now, with the future being defined as the end of the current quarter and not a few years down the line. In fact, in the current state of the campaign, an agency or media planner facing lengthy delays in getting their plans approved may want to look inward. They need to evaluate not only whether they truly understand their clientÕs goals, but whether their media plan provides the most efficient use of that clientÕs marketing budget from the get-go.