Gary Vaynerchuk, CEO of VaynerMedia, is on a roll. He acquired women’s lifestyle site PureWow earlier this month, and launched The Gallery, an umbrella unit to house PureWow and other media properties. It sounds like a media empire in the making.
So why is the digital agency founder and serial entrepreneur so interested in media properties? Well, why not? Plus, the tagline of his personal brand is: “I day trade attention & build businesses.” Consumer attention is -- or should be -- the currency of media, he says. We've heard that before. It stands to reason that VaynerMedia is looking to pick up more media businesses and maybe some brand marketers with the help of private equity, Vaynerchuk hinted.
At AdExchanger’s Industry Preview on Wednesday, Vaynerchuk shared his provocative views with an audience of digital industry professionals who he clearly wanted to shake up: “I believe this entire space is broken not in a bad way, but from the way I see the world.” And what is that? He believes that brand marketers, agencies, and tech suppliers, see everything based on a short-term vision. “Everyone talks about return on ad spend, click-throughs… everything is math and metrics but meanwhile, the business is in the tank,” he said. “There’s a disconnect,” he says -- and he blames short-term thinking, and the industry’s obsession with “math” and metrics.
“Common sense needs to enter ad tech,” he said, rating the common-sense element at “zero.” He also blamed much of the existing dysfunction on programmatic and “behavior that is so predicated in the moment or in the machine.” And he boldly stated to the audience: “You don’t believe in what you’re selling.” He said everyone in the room is concerned about short-term returns, and brand managers worry about making the numbers quarter by quarter, instead of taking a longer view.
All of this is taking place within the context of extreme channel conflict, where marketers are increasingly going direct consumer.
Vaynerchuk made another bold observation: “The most underpriced product in the world right now is Facebook advertising. You should put your money there. Google search is great, but you should understand that Facebook can do both sales and marketing,” he said, adding that "we need to reverse engineer the consumer’s actual attention."
"At a macro level, I want more debate about ‘math’ [data] being just one part of the equation," Vaynerchuk said. "We should ask, ‘was the product actually consumed?’"
He went to say that nothing is more important than time — outside of health and money. “Click-through rates and math suck… brands steal your time. We trade on math and metrics and that pisses off consumers,” he said. Instead, the industry should care about "whether stuff is selling or not."
The bottom line? Companies should ask itself whether their products or services work so that someone’s life depends on it.
The problem — internally at agencies, brand marketers, and ad tech companies — is that people are rated and evaluated based on the “math and metrics.” Vaynerchuk noted that among the biggest brands in the world, for example, 95% to 97% of consumer packaged goods lost market share last year.
“We’re trading on metrics that are not practical," he said, adding that last-touch attribution has challenges to overcome. "We’ve become so transactional. Math is used as a proxy for what’s happening, but it doesn’t tell the whole story. CPMs may look great but the business is down, so the math is not actually matching the reality of what’s actually happening.”
Vaynerchuk maintains that there is a better way, and argues that brands should do more A/B testing over a longer period of time. For example, CPG brands should start doing more “calculated bakeoffs” between TV ads, digital banners, and social media, and allow each form of media to get same amount of money at different times of the year over a two-year period.