Putting Madison Avenue on the Couch

Or why changing the way media buyers think is so easy, a caveman could do it

madavebrain411 As far as brains go, Barry Fischer has a pretty good one, and he's been using it to try and understand the way other people think about media and then to get them to think differently about it. Unlike some people on Madison Avenue, the brains Fischer tries to influence are not those of consumers, but the ones who use media to influence how consumers think about media, advertising and brands. For more than a decade, Fischer has been trying to rewire the way Madison Avenue's brain works.

His story begins in the mid-1990s, when after years as one of Madison Avenue's brightest young media directors, he left the ad agency business to work for cable TV giant Turner Broadcasting, which for years had been struggling to convince advertisers and media buyers like Fischer that cable television was just as good at reaching and influencing consumers as big broadcast networks like ABC, CBS, NBC and Fox.

No one understood that process better than Fischer, who during his agency career, bought media for some of the world's biggest and most sophisticated marketers - companies like Procter & Gamble and Ford - and who, for years, had used his brain to get the cheapest cable TV prices possible.

At the time, Turner controlled about 25 cents of every ad dollar that agencies spent on cable TV networks, which was a fraction of the price and volume they spent on broadcast networks. And Fischer understood, better than anyone, what cable's problem was. It wasn't the underlying effectiveness of the medium. It was the way people thought about it. And he understood that if you could influence the way big advertisers and agencies thought, you might be able to get them to change the way those executives who controlled billions in U.S. TV advertising budgets behaved.

The problem is that the thought process wasn't completely rational. A big part of the way Madison Avenue spent its advertising budgets had to do with emotional factors that needed to be understood and overcome if Turner was ever going to move the needle in a significant way. In other words, Fischer couldn't change the way the ad industry thought and behaved, unless he also changed the way it felt about media. So he turned to someone who was expert in understanding how people feel and how those feelings influence their behaviors. He hired a psychiatrist to quite literally put Madison Avenue on the couch.

The result was an unusual psychological profile that analyzed an entire industry, including both the way it was organized and the organizational cultures within it based on a set of rational and emotional factors. Some of the rational factors had to do with things like how advertisers and agencies worked and how they profited from business decisions. Some of the emotional factors had to do with the relationships they had with the people who sold media to them and the strong attachment to the business model, in spite of some misconceptions about how the media they bought actually performed. Once Fischer understood those factors, it was easy to come up with a plan to change them. Executing it wasn't so easy, requiring time, patience and a significant financial commitment from his bosses at Turner to implement it.

The plan was based on an understanding of new data and computer processing tools that would enable Fischer to prove to TV advertisers and media buyers that their emotions were getting in the way of rational business decisions and that in the long run, it was actually costing them more money because their TV advertising campaigns were not being as effective as they could be. And what generates more emotional response than money? He was going right for their reward centers.

The insight came from new theories about how advertising campaigns build "reach" among TV viewers, and from new data that TV researcher Nielsen had just begun making available to advertisers, agencies and networks. The data - so-called "respondent-level" data - was expensive, as were the computer systems necessary to process them. The data, when processed correctly, would show that advertisers could potentially shift billions of dollars to cable from broadcast TV without losing any of that reach and in the process, save millions of dollars by buying cable-TV time that was priced more cheaply than broadcast-advertising time. In fact, the research would show that, by adding a greater mix of cable TV, advertisers could actually increase their reach of TV viewers while saving money. It was a completely rational approach to some irrational business practices based on emotional, cultural and organizational legacies and habits.

One of the organizational legacies was that many big ad agencies didn't have a financial incentive to spend millions of dollars on the new Nielsen data and the computer systems necessary to process them. And finances aside, many simply did not need the headache of doing that. Change is always frightening and fear leads to avoidance. The conflict was clear: Would the fear of change win out over the reward of financial gain?

Fischer decided to go around the fear and do it for them, convincing his bosses at Turner that if he spent the money to build a simple tool that advertisers and agencies could use to compare the performance of different mixes of broadcast and cable TV ad budgets, it would change their behavior - and a significantly greater amount of money would shift to cable TV.

In retrospect, building the expensive system, which Fischer dubbed "Media at the Millennium," to reinforce the notion of the need for change, was the easy part. What proved more difficult was convincing the hardwired brains and habits of veteran advertisers and media buyers to actually use it. It wasn't enough that Turner was giving it to them for free - Fischer still had to overcome the big emotional factors surrounding fear of change.

And it wasn't just the ingrained belief systems that many ad execs had about what worked, but something even more potentially sensitive. By building a system that provided irrefutable evidence that most national TV plans were irrationally biased toward broadcast TV, Fischer was effectively telling some of Madison Avenue's biggest media buyers that they weren't doing their job as well as they thought. And that exposed another powerful emotion no human being wants to experience in their profession: embarrassment.

Fischer needed a strategy to overcome that emotion. Fundamentally it was about being patient and presenting the information in what psychologists call a "graded exposure." Rather than throw the spider-phobic in a room with spiders, first start with a mental image of a spider, then a picture, then a fake spider ... in a graded or step-wise method designed to overcome the fear. Thus, instead of coming out and telling the world's biggest advertisers and agencies that they were making a big, costly mistake and had been doing so for years, he let them figure it out for themselves slowly over time.

Fischer personally gave about 1,000 Millennium presentations; Turner sales and marketing reps gave thousands more, each one of them utilizing a similar approach of self-discovery. Instead of telling advertisers, buyers and planners they were wrong, the Turner team gave them the tools to figure it out for themselves. And it was no coincidence that the tools usually included examples of an advertiser's current TV plans alongside versions that Turner knew would show better results if they simply put more of their budgets into cable.

It was a delicate and slow process, but Fischer learned a lot about human nature, and the power of emotions, while doing it. In the end, the fear of change and the internalized habits of an industry gave way to the lure of better media strategies and the efficiencies that go with them. During the several years that Fischer's team at Turner took Millennium on the road, more than $1 billion in TV advertising budgets shifted from broadcast to cable TV. And while there were other factors going on concurrently, like better shows and more viewers going to cable networks, at least some significant part of it had to do with overcoming emotional perceptions.

Fast-forward to another new medium after the millennium and similar emotional, cultural and organizational issues seem to be plaguing online media, including social and mobile media, which despite some compelling evidence about how consumers are using it, continues to lag in Madison Avenue's budgets, if not its mindset. No one has illustrated this story better than Mary Meeker, the ex-Wall Street analyst and current venture capitalist at Silicon Valley's Kleiner Perkins Caulfield & Byers, a firm that has gotten Internet start-ups from Amazon to Google off the ground.

Meeker makes a compelling case for Madison Avenue's emotional disconnect with a frame she likes to highlight while making presentations about the growth of online media at industry conferences. In it, Meeker presents a slide showing the percentage of time consumers spend with major media - including the Internet - versus the share of advertising budgets Madison Avenue spends on those media. Currently, she estimates that consumers spend about 28 percent of their time with media on the Internet, but advertisers devote only 13 percent of their budgets there, resulting in a disparity of more than two-to-one. While there are a number of rational reasons for that disconnect, including the fact that the time people spend online isn't always using ad-supported parts of the Internet like, say, email, tweeting, etc. Meeker believes that if the Internet's full advertising potential was reached, more than $25 billion worth of advertising budgets would shift online. It's unclear whether anyone or any organization has tried to rewire the way people think about the relative value of online media the way Turner's Fischer did about cable TV, but for all the effort of big players like Google, Microsoft, Yahoo and other major online players to convince Madison Avenue, it's worth noting that the growth of television ad spending, especially cable TV, currently is the fastest of any major medium and continues to outpace the growth of spending on the Internet, according to most major organizations that track ad spending.

As we saw with Fisher's dilemma, at least some part of that inertia has to do with organizational and cultural factors that are more emotional than rational. That was what a head of marketing at a major movie studio discovered four years ago, when she tried to change Hollywood's conventional marketing strategy, which historically relied mainly on highly concentrated TV advertising campaigns. So she conducted a test to see if the studio could "open" a movie without using any TV advertising, relying almost exclusively on social media's powerful word-of-mouth effect. The test was a success, but despite that, the executive, who has since left the studio, says her bosses told her, "That was nice," but reverted back to what their guts told them was tried-and-true: big TV advertising budgets.

Four years later, big Hollywood studios have finally become enamored with the potential of social media and are working more aggressively with it. "Things do change," she says, adding that the dynamic shift in consumer use of social media was a big factor in that. "In social media, four years is like four minutes."

"It's hard to change human nature," says Dave Knox, the former head of digital strategy at the world's largest advertiser, Procter & Gamble. Knox, who has since left P&G to launch the Brandery, a not-for-profit organization that incubates digital media and marketing start-ups, is also CMO of digital agency Rockfish Interactive; he says working inside a giant global marketing organization has taught him some valuable lessons about the important role human emotions play even in seemingly rational business decisions.

"It seems like the biggest factor influencing us is the fight-or-flight syndrome," says Knox, referring to a theory psychologists and neuroscientists have that, as advanced as modern human brains are, we still react to things based on the hardwired cues that were developed when we were trying to survive as early hominids, in which you either put up a battle and fought some threat to your survival or you ran away to avoid it.

It is no surprise that the big emotional driver in that fight-or-flight syndrome is fear. Knox says that still is what fundamentally motivates people to do things - or not to do them - in modern business organizations and entire industries. Fear of the unknown, he says, keeps marketing and media professionals from trying new things. Ironically, it is the fear of not doing them and potentially losing your job or career, which ultimately motivates people to try something new and that is changing the way people do business. It is balancing the emotions between holding your ground and putting up a fight or running in a new direction, he says, which determines whether people adapt to something new - whether that is an early hominid battling a big cat on the African savanna or a fat cat worrying about his or her retirement on Madison Avenue. Emotions really have not changed or evolved much from our caveman days. "People are people," he says.

3 comments about "Putting Madison Avenue on the Couch".
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  1. Lee Aldridge from Young & Rubicam Brands, April 13, 2011 at 7 p.m.

    Mr. Mandese does an excellent job of tying these three forward thinkers together in their mutual challenge: faster adopting of trackable data and belief therein, regardless of the time frame that they each operated in. Sadly, while the fear factor of that buy-in was rattling about, enter stage-left the arguably roughest recession of our lifetimes. As consumers walked, bought, and voted with new found power, it ironically "helped" both agencies and clients to come to love the new social tools needed to run in place with the consumers. Keeping pace now would be good, if not outright necessary for relevance.

  2. John Grono from GAP Research, May 9, 2011 at 9:39 a.m.

    A really interesting article Joe for a number of reasons - for example, we have used respondent level data analysis for TV viewing here in Australia since 1991, and it sure thows off any cloaks of secrecy !

    But I would like your thoughts on the veracity of the underlying assumption that "share of time spent" with a medium should be a direct correlation with "share of ad dollars spent", which underpins the argument.

    I have searched high and low for empirical evidence that should be the case, and can't find any. In the lack of any such evidence, wouldn't such a claim become a mere shibboleth?


  3. Paula Lynn from Who Else Unlimited, May 9, 2011 at 1:20 p.m.

    Shake rattle and roll. "We are begging to be controlled," declared Cassandra.

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