We Need More Expensive Advertising

Ad industry legend Rishad Tobaccowala, Chief Growth Officer at Publicis Groupe, has a prescription for fixing the world of advertising and marketing that you might not expect from a top executive at one of the world’s largest buyers of media.

His idea?  More expensive advertising.

I heard Rishad, one of our industry’s smartest and most thought-provoking seers and strategist, give his take on the current and future state of advertising at the CDX Forum in New York Thursday morning. He believes that much of what has happened to advertising over the past 10 years is direct marketing gone wrong, and one of the keys to a better future is more expensive advertising.

“It is better to reach the right person in the right context once, even if [it’s] expensive, than to reach that person 25 times in cheap, wrong places,” he explained.

Rishad is right.

I have been a fan, friend and fellow traveler through this industry for more than two decades, and I have never agreed with him more. We need an advertising world where people receive fewer, more relevant ads; where advertisers reach the right person in the right place at the right time to help grow their businesses; and, where media owners’ content, environments and platforms delight users, serve advertisers and generate profits.



The proliferation of advertising impression opportunities has caused us to build technology and systems that weaponize advertising, bombarding people over and over again with the same messages, many of them irrelevant or inflammatory, with little or no regard to the context of the contact. As media and advertising become omnipresent, everyone is increasingly treated only as consumers at every touchpoint -- and rarely if ever like citizens.

Is Rishad’s idea an unachievable nirvana? I don’t think so -- certainly not if we don’t let the pursuit of perfect get in the way of better.

First, we have to elevate the importance of effectiveness in advertising. Today, way too much emphasis is placed on improving the cost efficiency of ad buys, rather than improving results, ROI and customer experience.

Second, we need to tap the brakes hard on retargeting. Shoe ads that follow people around the web for days and weeks on end, just because they once searched, viewed or bought a product at a merchant site, are no longer humorous. Consumers object to such efforts. Retargeting systems deliver those ads because their algorithms focus exclusively on the 0.01% of people who click through and buy on those banners or tiles and ignore the impact of those ads on the 99.99% of folks who don’t.

Third, we need to rebuild trust, both trust in advertising among its recipients and trust between advertisers, their agencies and their media, tech and data suppliers. There is a lack of trust in all quarters, much of it justified.

There is no simple solve here. At the least, we need to be more respectful of ad recipients, and give them more notice and opportunities to consent to how they and their data will be treated. We need more transparency among companies working together across buying, selling and enabling ads.

Finally, we need to innovate and perfect new advertising models, that can truly reach the right person in the right context, even when they could be more expensive. In the end, this is a much better investment for all of us.

What do you think? Do we need more expensive advertising?

12 comments about "We Need More Expensive Advertising".
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  1. Vicky Geary from Mediaworks, July 18, 2019 at 4:44 p.m.

    I agree with all 3 of the main points (effectiveness, retargeting and trust).  Now as far as more expensive - that is where I am on the fence.  I will gladly pay a higher rate if I am absolutely sure that this is reaching my desired audience.  The problem is that I have seen enough sketchy data and poor results to not have confidence in that.  Rebuild my trust first before charging me more.  Then I will advocate to my clients that the higher costs/CPMs is worth it.  

  2. George Simpson from George H. Simpson Communications, July 18, 2019 at 5:05 p.m.

    Until this is fixed, be aware that Dave Morgan of Simulmedia is the author. Not me. Thx. 

  3. Ed Papazian from Media Dynamics Inc, July 18, 2019 at 5:27 p.m.

    George, it all depends on the specific situation and the trade-offs. For example, let's say that the "right" place to reach a consumer generates a superior degree of attentiveness, message recall, and intent- to- buy lift. For the sake of this discussion, let's say that these are 65%, 35% and 15%, respectively for an exposure in the "right" venue. In contrast, the likely result for a placement in a "poor" venue  might be well below the norm, say 40% for attentiveness, 15% for message recall and 5% for intent- to- buy lift. If the CPM difference betwen the two options was two-to-one, with the "right" venue being the higher, then we would be comparing the value of, one intent-to-buy lift at plus 15% with two at 5% each. Clearly the first---the higher priced ----option is better.

    Would this still apply if there was a 25-to -one CPM differential? Not at all. I would take the "cheaper", " bad" venue buy if I could get a 5% intent-to-buy lift 25 times compared to getting it only once at 15%.

    In the real world, differences of the magnitude of 25-to-1 in CPMs within the same medium just about never happen. The classic example is cable vs broadcast TV where the latter usually gets about 75-100% more per viewer---or roughly double the CPM. Also, it is rare indeed for the identical commercial to vary in communications performance by more than 25% depending on which channel or program it appears in. This is because once a message gets the attention of the audience it functions more or less on its own merits. A great environment is not going to cause a viewer to believe a claim made in an ad if it doesn't ring true.

    I'm a firm believer in placing each ad on the "right" platform-- or "place"--- at the" right" time and trying to reach the "right" consumer. Nobody can be against that. However, the trade-offs can't simply be dismissed. Often, the cheaper option can deliver more cummulative value ---even if its per-exposure performance is lower. Also, a combination ot the two---like using the premium---or high CPM "right" platforms at the outset of a new campaign, then following up, later, with cheaply attained reminder ad impressions---is a better way to go.

  4. Craig Mcdaniel from Sweepstakes Today LLC, July 18, 2019 at 11:21 p.m.

    I agree more with Ed.  There are more factors involved.  Some ads would appeal more to Gen Y while others appeal better to the Baby Boomers. You need a starting spot for the right ad with the right group.

    There is one trend I have seen lately is security the email address then to email within 2 or 3 days. While the ad should be still fresh in the mind of the consumer, hit them again with the email. This is cost effective.  This is why many advertisers are using sweepstakes more this year than the past 2 years. You get a large numbers of entries from the sweep then fine the more serious customers from them.

  5. Ed Papazian from Media Dynamics Inc, July 19, 2019 at 9:15 a.m.

    My apologies for calling you George, Dave.

  6. Dave Morgan from Simulmedia replied, July 19, 2019 at 9:20 a.m.

    Ed, no worries. The mistake was by MediaPost ... they originally mis-labelled the column with George's byline.
    I totally agree with you about the issues around trade-offs. Finding the right balance won't be easy. I just hope that we get start moving in the right direction because too much of the momentum in the market today is to keep giong in the wrong direction.

  7. Jim Meskauskas from Media Darwin, Inc., July 19, 2019 at 1:09 p.m.

    Agree to all points here.  I often say that efficient advertising should mean cheap.  Efficiency is where costs interest with effectiveness.  I don’t determine the efficiency of my car based solely on the cost of the gas I put into it, after all.  The challenge is that effectiveness isn’t always clear as quickly as advertisers are looking for it.  And the variables aren’t always fixed.  That kind of uncertainty is not readily embraced, uncertainty means risk, and so advertisers and their agencies glom into the only risk they feel they can control, and that’s cost.  Short sighted, bad for the industry, and desperately common.

  8. Jim Meskauskas from Media Darwin, Inc. replied, July 19, 2019 at 1:20 p.m.

    I meant efficient “shouldn’t” mean “cheap.”  And “cost INTERSECTS with effectiveness,” not “interest.”

  9. Stewart Pearson from Consilient Group, July 19, 2019 at 6:39 p.m.

    Rishid, Dave, I respect your views, but while it is impossible to object to your points about relevance and effectiveness, THE WORLD HAS CHANGED. Advertising is no longer about 'paying' for reach and attention. Everyone in the industry should read Tim Wu's "The Attention Merchants" and the recent study that advertisers are the least trusted of all professionals.  Is that the judgement we accept on our profession? I disagree with your characterisation of advertising as an expense. Advertising is a resource and investment with the goals to 'earn' trust and participation with consumers, and deliver results to enterprises. Stewart 

  10. Craig Mcdaniel from Sweepstakes Today LLC, July 19, 2019 at 10:42 p.m.

    What is interesting about the comments, the problem is not so much the ads themself, but how the ads are distributed. The conversation assumes there is no problem with programmatic. But could this be incorrect? When I started over 15 years ago, programmatic wasn't available. We had ad rotation and ad networks. Yes there were human involvement in placing a ad on a website was how it was done. This method was 100 percent secure and any company could target their ads. Now, what has happened is if Fortune XYZ ads shows, this ad location might first show 4 or more substandard ads or jjunk ads before and after. The reason is The ad distribution will sell everything that can be sold. Then for the publisher, ads can be blocked with or without their consent. The whole point here is there is only one type of distribution of ads, programmatic other than private agreements. I support going back to the ad network system and place quality ads on quality websites.

  11. Dave Morgan from Simulmedia replied, July 20, 2019 at 9:58 a.m.

    Craig, you hit on a very important point. When the digital ad eco-system was largely direct to publisher, it operated very differertly than today's programmatic world. Now, outside of a few top publications, there is very little control by the publisher over the final ad delivery, and the power has shifted to the bidder, who might not care how many site users are abused with too many of the same irrelevant ads.

  12. STEVE CLIMONS from Crosssover Creative, July 20, 2019 at 5:29 p.m.
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