• by August 10, 2004

POWER TO THE 'PEOPLE' (SOME PEOPLE, ANYWAY) -- Okay, we get it. People come first. That's the theme of MediaCom's new marketing pitch: "People First, Better Results." But it seems some people come in more first than others. In the case of MediaCom's new organizational structure, Jon Mandel comes in just above former peer Dene Callas. The two had been co-CEOs of MediaCom's U.S. operations, but Mandel last week was bumped to chairman. He also remains chief global buying officer of MediaCom Worldwide. Which is a good thing, considering the United States hasn't been the greatest revenue contributor in recent quarters. According to parent Grey Worldwide's second quarter earnings report, North American revenues grew 8.4 percent during the quarter, but lagged the agency's worldwide growth rate of 13.8 percent. But the people who come most first, according to MediaCom Worldwide CEO Alexander Schmidt-Vogel aren't the shop's managers, but the consumers they are charged to reach. "Our feedback from clients and the industry showed that 'people' are the most important factor in a media agency's service," he said last week when announcing the agency's new positioning and organizational structure.

That insight may seem obvious to some, but it doesn't explain why many on Madison Avenue still seem focused on themselves, or their own businesses, rather than the "people" they are targeting with their clients' ads -- consumers. That would seem to be the case based on the latest estimates from the recently released 2004 edition of Veronis Suhler Stevenson's annual Communications Industry Forecast & Report. An analysis of the investment banker's stats that appear in today's MediaDailyNews reveals that the ad industry is putting a disproportionate share of its media budgets in the media that are used least by "people" - print outlets like newspapers and magazines - and is grossly under-valuing one of the most heavily used media: radio. Sure, the Riff's heard all the rationalization before: consumers have a "special" relationship with print outlets, that newspapers in particular are a personal and immediate medium, that electronic media are too ubiquitous to have any really impact. But that doesn't explain the gross disparities between how Madison Avenue buys media and how "people" actually use media.

There's another illuminating stat in the VSS report that sheds a bright light on the "people"/media connection. It's the section of the report that calculates how much money "people" spend each year to access each medium. The reason the section is so significant, is because some "people" in our society believe that the amount "people" are willing to spend on something somehow relates to how much they value that thing. It's a theory that many media planners have embraced as a metric for evaluating the quality of magazine audience circulation. Though the jury is still out on the value of the "average price paid" portion of the Audit Bureau of Circulations reports, many planner "people" still believe that the price subscribers pay to get a magazine has something to do with how much they value a magazine.

If we apply that notion to media overall, some interesting patterns emerge from the VSS data. At a per capita average of $248 in 2004, "people" clearly place their highest media value on the medium of TV. The next most valued medium, home video - at $172 per year - is really just an extension of TV (or maybe it's cinema). The third biggest consumer media price tag goes to the Internet at $107 per person. Of course, "people" do shell out considerable sums for print media - $53 per year for newspapers; $46 per year for magazines - and they pay hardly anything for radio, unless you include subscription satellite radio services (which VSS does in its report). The theory doesn't completely explain the value "people" place on a medium, but it's at least worth considering as part of the mix. By the way, here's precisely how that mix looks in 2004, according to VSS' estimates:

Shares of "People" Spending on Media (2004, Per Capita)

TV                 28.5% 
Home Video         19.8% 
Internet           13.8% 
Books              10.4% 
Music               6.1% 
Newspapers          6.1% 
Magazines
5.3% 
Movies              5.3% 
Videogames          4.0% 
Interactive TV      0.6% 
Satellite Radio     0.2% 

Total Dollars    $825.29 

Source: Veronis Suhler Stevenson's 2004 Communications Industry Forecast & Report