• by Tim McHale , April 30, 2003

The second in a 3-part interview with Stuart Elliott, Advertising Columnist at The New York Times, one of the most respected authorities on both online and offline advertising. His coverage of Madison Avenue and the advertising industry as a whole is sought after by major marketers and advertisers the world over. Stuart and I met for breakfast on April 3 (before the end of the war), and because he is normally the interviewer, not the interviewee, this was a rare opportunity to turn the tables on "the pundit's pundit" and ask Stuart for his views on what's happening in the media business. Here's what we talked about.

McHale: Right. Well, here's the thing, I see research as an area where the vested interests are going to do whatever they can to stop innovation.

Elliott: I don't think that...I mean it's like, what, like the oil companies are sitting on a secret formula to convert water into gasoline?

McHale: No, but I think if you look at the methodology of how ratings or pages viewed in a magazine are calculated and then compare it to interactive media, you'll see that there's just huge differentials.

Elliott: Yes, but that's always been true. They still don't know how to figure out who watches TV out of the home and we're talking 60 years of network television? 55 years? They still haven't figured that out! With magazine methodology nobody knows. They have those logo cards, and 5% of people are saying they're still reading Life magazine every week or Colliers, and those magazines don't exist anymore! All media is struggling with that, why shouldn't interactive be? In fact, I think it made it worse for interactive, because interactive made people think everything's going to be measurable and everything's going to be scientific, and from day one we're going to be able to determine if it works or not. And it's just as fraught with ambiguity as the research results for every other medium. That actually hurt interactive - the idea that "oh well this one is going to be the magic bullet, where we're going to know what our ROI is from the first day." But all media is hard to measure. I mean, the average consumer doesn't care. They read a magazine, they did or didn't hear the TV commercial, they got up from the room, they forgot to fill out the diary... I mean, people are still being asked to fill out those cockamamie diaries, and the day before the diary is due, they sit there and they fill it in and they try to remember what station they watched 13 days ago, and you know how accurate that is?

McHale: I just see enormous waste in television advertising. Twenty years ago we didn't have anything other than the traditional media tools, and they were working, but now we have more information. I think interactive media is far more measurable, with higher levels of confidence because it's the computer measuring the data and the response...

Elliott: There's still no magic bullet there either. You tell me, which method is better right now? Nobody can say. They're still arguing about it amongst themselves. That drives people away too. That's true of every medium, none of them are. And that's always a good excuse: "Oh well, you can't convince me your numbers are accurate, so I'm not going to buy your media."

McHale: But companies like DoubleClick or Atlas can measure how many households and how many computers are there in the medium, and there's no issue of probability. It's basically, "this is what the number of average ads we are serving." If you look at television, which is the medium I'm most frustrated with, and the research community - you have 5,000 households measuring over one hundred million households, and I think...

Elliott: Right, but as long as the sample is accurate, then that's supposed to be the right way to do things. Supposedly, surveying one hundred million people is not going to make the survey more accurate than surveying the statistically accurate valid sample, right?

McHale: Except that if you were spending $40 million and $35 million of that in television, and you looked at the numbers and you looked at the reach and frequency, which is now of course a very hot topic online, then you might, based on the statistical "improbability" of reaching the people you really would like to, move a couple of points out of it. That's all I'm saying.

Elliott: And I'm sure that's going to happen! Again, the money goes towards efficiency. Yes, there are reasons that some people want to do some things, like they want to run a commercial on the Super Bowl because they want to go to the SuperBowl and get tickets, but you can't do that for long before the Board of Directors fires you or your competitor starts eating your lunch, or any of 12 other things. Either your product sells or it doesn't, and if you have the right medium and the right product and the right this and the right that, then people will buy it. If it's not the right product, you can have the world's greatest media plan... You know the old saying that the best advertising drives people to buy the worst products. There have been numerous examples of the cookies and various other stories about beer, as in, "Oh my God, the media plan got everyone to try to product, but once they tried it, they hated it and never bought it again." So the media plan was genius but that didn't help the company. The longterm trend is toward effectiveness because it has to be; because money is tighter and more precious every day and there's more competition every day and the stakes are higher everyday. And Wall Street has become more of an obsession to everyone of Madison Avenue so in the long run all this sort of buddy/buddy backslapping, "take the course of least resistance" and "I wanna go to the SuperBowl" type of media planning choices are going to go the way of the Doe-Doe birds. Because there's going to be less and less room for that kind of inefficiency in the way things are done.

McHale: Do you think that interactive media will do that by itself, by creating an upfront just like the television business, then?

Elliott: I think the upfront is unique to television. And every year they talk about abolishing it, but they do it anyway. There are reasons for that; there's a lot of inertia involved. If it didn't work, all these giant companies wouldn't be doing it every year, but efforts by other media to try to glom on to the TV upfront just haven't worked. And I think TV is that way because it's not a calendar year, it's seasonal, it's from fall to summer, and so they have to sell their time in the spring. It's because it's nature of the medium. I mean, if TV had a January to December calendar, then there wouldn't be an upfront, or if there was, it would be in the Fall when everyone else has theirs and it would be a lot easier to jump in and say, "oh yeah, how about the matchbook upfront? How about the cocktail napkin upfront?"

McHale: Well, there are seasonal patterns to much of life, but you're right, we haven't seen anything in interactive...

Elliott: Look, the print people have been talking about joining in on the TV upfront in some way for decades. It just doesn't work, its peculiar to television. Besides, I don't think people could go out to those lunches more than a couple of months a year without dying of heart attacks.

McHale: Let's talk about Madison Avenue versus Hollywood. Our good friend Steven Marrs has opened up a company [Brand Entertainment Studios] to bring Hollywood and Madison Avenue together. One of the things I heard him talk about recently was the challenge to take Madison Avenue, which is more of an annual planning season mindset in terms of how brands plan their calendar schedule, versus Hollywood, which is more deal driven - where the project is live for six weeks and if you haven't done it in six weeks, it's probably not going to happen.

Elliott: It's only going back to the way network radio and then network television were run: the ad agencies owned the programs, they produced the creative program, they brought it to the network with the sponsors already attached, and the networks either put them on, took them or didn't take them. They were not owned by the networks, so all of this talk is only an effort to return to a model that was abandoned, maybe wrongly, 40 years ago. So of course it works, it worked very well, it spawned two gigantic media that are still with us, to this day 60 or 70 years later. Clearly, one difference obviously is that the movie business is now a lot more driven by these gigantic summer films or Christmas blockbusters, and then again it's more like a project basis where, like Dr. Pepper has to find out when Spiderman is coming out and, "Spiderman was a big hit, should we sign up for Spiderman II?" So yes, there are certain differences now than there were in the past. Did you ever watch the movie The Hucksters? Most of the movie takes place on a train when they're going from New York, the ad agency to Hollywood, to go find some talent for the sponsor's radio show. That's still as valid now as it was then - if you can find somebody to pay the freight and foot the bill for an entire TV show.

McHale: If you were a brand manager bringing out a whole new brand, and you had $30-50 million, would you begin your search for a marketing solution on Madison Avenue or Hollywood?

Elliott: I don't know if that's the right way to divide it...

McHale: Do you think they're one and the same?

Elliott: Well, they're not one and the same, but, you go to the one with the best ideas, supposedly that's where you're supposed to go. In the old days, Madison Avenue subsumed everything. Madison Avenue meant everything - entertainment, advertising, promotion, it meant strategic counseling, it meant publicity and everything else. And then, for one reason or another, whether rightly or wrongly, pieces of that started getting chopped off and handed off to other folks. So obviously, the goal of the ad agencies is to try to get back to those glory days when Madison Avenue meant all that it was, so the fact that you're asking the question says a lot that they have a lot of work to do to get back to those halcyon days, when the giant companies went to them for everything.

McHale: The way I see it, Hollywood is a great tool to communicate a branding related message without the baggage of dealing with TiVo, or psychologically, the cognitive disonance, if you will, of people saying, "I don't want to be sold to, I'm walking out of the room or I'm turning the radio station..."

Elliott: Right, but there's just as much of that in the movie business. Or, this whole new thing now that's attacking movie theatre advertising. There was some movie that was released last weekend, some lousy movie, and the last paragraph of the review is 'you won't believe all the product placement for such and such a product that you see in this movie.' If it's to the point where the movie is so bad that you're noticing the product placement, then you know not only was it a waste of money, it was probably counterproductive to your brand; it probably hurt your brand, much less help the brand. Of course, it's always 'buyer beware.' I don't think there's a magic bullet for anything. I mean, certainly product placement makes sense as part of a mix, but I don't think just having Spiderman shooting his web toward a can of Dr. Pepper is a marketing plan. If you leverage it, you have pictures and/or the logo on the can, and then you have sweepstakes, and you have TV commercials and you have a website and rich media and secret messages that you send people on their cell phone, and their email address, then it's a program. Just going to Hollywood is not the answer, anymore than putting up a website is the answer or buying a TV commercial at the Super Bowl is the answer. Sometimes it is, one out of 100 times maybe, but all the moving parts, make them all move and make them move in the same direction, and then make them all move in the right direction, it's obviously more complicated than ever.

McHale: Do you see a lot of those companies getting all those moving parts to work correctly?

Elliott: Yeah, there's always a list every year of 10 or 12 products that break through, and sell. You have to look at the environment now, and the fact that the shelves are more crowded than ever, that people are busier now than ever, and there are still products that win every year. Scores of products that break through, but a lot of them now are line extensions, because people decide it's cheaper to do that than to introduce a new brand. A lot of times you'll see something that's a big winner and it's Crest Whitening with this and that and the other, where, maybe 20 or 30 years ago that would have carried another name on it. I think, sometimes people don't think of it that way, that it's another version of Crest, but in and of itself, it's a multimillion-dollar product.

McHale: But, in the era of line extension, that's where interactive media - which has the better research, better targeting, the better understanding of who their niche is - is actually a huge opportunity...

Elliott: And again, for certain people that is true, but for lots of others, maybe - maybe not.

Look for Part III of this interview in Tomorrow's MediaDailyNews.

If you missed Part I, you can read it here.