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TAKING THE RIDE INTO 2009 …
The economy and its effects on the advertising industry are of primary importance at this time. What better way to take a look at 2009 than to gather four industry executives in a roundtable discussion on the subject? The experience, insight and business sense of these four individuals is very apparent as they look at the year ahead.
Participants were ANN BREMER, InLine Media; DAVE GREVES, Leader, Faction Media; DAVID HENRY, Chairman/CEO, HenryGill Communications; and LORA LEDERMANN, Owner, Creative Director, Scream Advertising & PR. The roundtable took place before it was announced that the Rocky Mountain News was up for sale and Tribune was going into bankruptcy, so this news was not part of the discussion.
Read, enjoy and learn from the wisdom of these four experienced advertising executives.
A&M REVIEW – Your Thoughts on what’s ahead for 2009
DAVID H: The future’s looking a little interesting, to say the least. Colorado may fare a little better. Our economy seems to be a little more robust in general. This recession is more of a worldwide recession. I think it’s broader and deeper than most of us are seeing. It’s an extension of an already existing trend that was taking place in our industry that was moving away from traditional media, to the Web and online and social networks. So I think it’s a combination of events that could have created the perfect storm. Before the crash, GM had talked about moving a billion and a half dollars out of their marketing budget and advertising to their Web and to online. I think that movement will continue. Business, in general, could be down as much as 12 or 14 percent in 2009. I'm not sure everybody is using that as a margin to cut but I think there’s going to be people that are just out of business and not advertising, that’s going to have a huge impact.
That all being said, we’re very busy with new projects, with people who understand that these kinds of recessionary periods are times when you can get a pretty good deals on media and get a pretty good deal on vendor relationships. I think people who don’t have a deer-in-the-headlight strategy are going to see some opportunity. Those who have a plan and are courageous and have vision, I think they’re going to stand up first and be seen first. Those are the kinds of clients we all seek — the people who have vision and steadfastness in their belief in marketing and communications. It’s just changing mediums. The message is still the same. It’s about value and it’s about what is great about our business and our products and services better than the competition.
I think the biggest issue is the marketing director or marketing vice president who might have great visions but the Board of Directors is running scared and the Board is going to start from the top and come down and marketing usually takes a hit.
LORA: I think everybody has to get a little more creative. That’s both on the client side and the agency side. Not just in what you’re creating as the result but in the approach. I think that’s where we’ve seen the biggest change as online has gained in social media. I think we’re also seeing some things that we haven’t seen in a long time in the personal, one-to-one relationships that really disappeared for a while. In that sense, we see it as an exiting time. It’s a chance for people to do some things that they have not been doing when it comes to marketing and creative approaches to advertising, public relations, and things that people can look at and say, what can we do differently.
Another thing we’ve really noticed for 2009 is just becoming more targeted. There are just not the budgets to waste and really making sure whom you’re targeting and whom you’re going after is really the right audience. We advise that to our clients as well as when we go after work. All in all, for us, we’ve been very fortunate. But, I think in 2009, you continue to really have to seek out the right projects and the right fit for your agency, making sure that you’re serving as an advisor to your client and helping them figure out how you navigate through these times.
DAVE G. Some sage advice. It’s interesting that you bring up finding the right clients for your agency and finding the right people to do business with, both from a client side as well as an agency side. We definitely believe in that. The relationships that we try to form and will continue to form in 2009 play well into the situation we’re in. Certainly, the economy is not going to turn around until 2010, if then. We’re 13 to 16 months out before we see some bounce back on that. Accountability is number one in 2009. If it doesn’t work, kill it and move on. Try to find things that are working. Understand them from a deep analytical perspective and, simply move the dollars to where they are working. We have a little different scenario at Faction Media. We really do concentrate, specifically, on B to B. So we’re very much, hunting one-to-one relationships, heavily targeted, high dollar values associated with those targets. So we’re playing less of a numbers game, as much as we are trying to develop really impactful, deep, meaningful engagements.
ANN: At Inline most of our clients are retail-based so we have very consumer-based marketing and advertising campaigns. The biggest thing that, both us as agency and clients in general, is just trying to be as proactive as possible. If something isn’t working, we need to identify it immediately, and figure out a different way to do it that will work. Online has become a bigger part of all of our clients’ plans for next year. Not only is it, in many ways, more efficient but also it’s just better targeted for clients and the consumers that we’re trying to reach. We need to focus, not just on the media mix but, also the creative mix and, how we’re attracting and how we’re advertising to our target audience and better defining that audience both with the mix and the creative.
Our forecasting fluctuates a lot on client category. We have education clients that are up and spending because that category is becoming more and more important. Most of our retail clients are going to be flat, at best. So we see a potential for clients to gain market share because, not only are you losing competitors, you’re losing competitors spending money as well. There’s a huge, huge advantage for clients that we can get to continue placing dollars in both traditional and non-traditional.
A&M REVIEW: Do clients seem to be cutting budgets or are the treading water and waiting?
ANN: We are moving more towards laying in annuals for everybody that we possibly can. The feeling in that regard is we may have a flat budget, year-to-year. We’re going to be able to buy more, automatically. We know that. We’re going in with flatter, better costs for clients on traditional media so all of our advertisers that can, we’re getting them to lay in the money immediately.
DAVID H: This year and the coming year and a half, there will be some room for efficiencies. There are huge bargains out there, and there are opportunities to negotiate like never before. Clients are going to hold their spending, as I mentioned before. The Board of Directors, on down, are taking a hard line on all expenses. And, I think marketing’s always one of those categories that is under huge scrutiny. For those who think of it as an investment and a return on investment, it’s a great time.
LORA: I say holding is better than folding. If you look at where they’re spending their money, it’s all over the map. Depending on the verticals and what industries are playing strong, right now. But, I do think there’s some industries, such as real estate, that have to look at their budget and say, how can we cut expenses. But, what can we continue to market on. We look at it with our clients, individually, and say, you need to think smart about how to use this money without overdoing it. There are some good deals, out there. At the same time, what can you be smarter about, what’s going to be the most effective use — what’s going to give you more of the sales than anything is brand awareness. We, definitely, as an agency, look at where they are in their brand cycle but, also, look at where they are financially. So it is dependent on the different industries and where they’re at in their brand cycle. We’ve still seen some projects pop up, social media, definitely, is a huge player right now. But, in just some areas that you don’t really expect, there are, necessarily, a lot of budgets to be spent. It’s definitely gotten interesting.
DAVE G: Most of our conversations around social have been social media as a retention tool, not as much as an acquisition tool. It's all of those things that bring people closer to the brand. It’s acquiring new customers. There are circumstances that do happen. When it comes to some of the things we’re moving clients towards now is trying to leverage dollars. Your question was are budgets shrinking. To some degree, I don't know that they’re shrinking as much as they’re shifting. We tend to ride the line between IT and marketing, which is an interesting mix. We may not be doing so many outwardly facing things, but we’re also building internal systems that are going to pay off, long-term, for client retention. Self-service type tools. One of the strong recommendations we’re making is to get them to extend the dollars that they can affect into the marketplace. For an example, let’s plan programs, internally, with our budgets and execute in co-op. Let’s execute throughout the channel, in many cases, rein in irresponsible behavior with our customers and distributors and not allow them to sponsor golf outings with their co-op dollars but give them tools to extend their brand in a way that’s consistent, meaningful and derives sales, rather than brand awareness. Certainly, in an environment like this, few organizations are going to have the constitution to carry out a brand campaign. Senior management is going to look at it and say, that’s great, where’s the sales.
DAVID H: I do think you’re right. There are very few exclusive brand campaigns. But, the brand is becoming very, very important in differentiating themselves from their competition. Every campaign is being measured by cost of customer acquisition, whether it’s drive leads, drive Web hits, whether it’s drive traffic on the retail level, surely. Every campaign, every medium, every message is being measured. And, I think the Web and the online metrics are absolutely wonderful opportunities for that measurement on an ongoing basis. But, you can, certainly, do that with television, you can do that with radio, you can do that with almost anything. Viral campaigns and direct mail are becoming more and more popular and becoming more and more efficient and effective. Those technologies didn’t exist 5 or 6 years ago. I think the brand is more important than ever.
ANN: I think, another thing that we’re going to be doing more in 2009 than we’ve ever done before is really determining goals of what we want every form of media to do. And setting up so that we have an ROI metrics on everything. I think that’s going to help in terms of being proactive to really identify things that are lagging behind in other areas. To be able to continually shift our media mix and be able to focus on what’s working and what’s not working and what is driving traffic, driving sales, bringing new customers and things like that.
DAVE G: But, it’s about meaningful brand engagement, not GRP’s and TRP’s.
ANN: Right. All of our campaigns are multi-media mix. So at the end of the day, I could have an awesome reach in frequency television campaigns. But, if it’s not making the phone ring, if it’s not driving sales like our online campaign is or our print ads — whatever the case may be — immediately, we’re going to be focusing more on identifying that sooner. And, being more willing to stand up and say, hey, look, we know this has worked in the past. It’s not working any more.
DAVID H: One of the most effective things we can do is look at all their efforts and put it to a dollar ROI on every effort — the old adage, I've done it that way for so many years and that’s why we’re going to do it, again — I think almost all of those conversations are over with. I think everything has to have a rationalization, both to engage the brand as well as get the return. That’s the biggest hope we can bring, as an outsider, to come in and help them evaluate and really look at those metrics because the metrics have changed. That’s why you bring in a third party instead of doing it in-house.
A&M REVIEW: What do you recommend to your clients going into next year?
DAVID H: We are big, big believers in research. And, now more than ever, understanding whom your best customers are. It’s not about GRP’s, it’s about understanding who your best customer is. We’re recommending that clients really look at the old 80/20 rule. You’re getting 80 percent of your business from 20 percent of your customers and, we need to know everything we possibly can about that 20 percent. Model that, profile that and target that because, those consumers, those customers are going to spend more money with you, more often, and stay longer. Those are the kinds of customers — especially in B to B. Specifically, knowing who those best customers are is huge in helping us design programs and communication plans to go target that.
ANN: We’re, certainly, not buying that adult 25-54 demographic. One client we have — they’re in 10 different markets — and, every market we’re focusing a different demographic based on their sales data from their stores. So we know — this market, maybe, it’s a younger market. We know it’s more male. This market may be older and more female. It's very different. We’re not doing national plans; we’re doing local market plans for clients.
LORA: It’s a lot easier to dig deeper with current customers, particularly in the B-to-B market. But, I think in some of the other markets, in the B to C, some of the things we’ve looked at are, much more guerrilla. Unique, arresting ideas that people can take note of. Whether it’s humor — especially given this time — and the level of stress that consumers are facing — but, in a way to try to reach them, in a way they may not have seen before. And, in the B to B when you dig deeper and looking at that loyalty of that customer, who may not have been given the attention, lately, but really continue to hold them. Even calls from the CEO’s. Simple things that people have forgotten about that personal service in the world. It’s an opportunity to bring some of those things back, given the economy.
DAVE G. Flexibility, I suppose, is one of their early recommendations, the fluidity of the campaign, strategic planning. Perspective is not something that’s done the first 30, 60 days of the year and left to chance. Let it fly. It’s consistently going through and measuring that. To your point, Ann, as far as Geo targeting, we do a lot of Geo targeting, whether it be search campaigns that mirror distribution throughout the United States, Canada, Mexico, etcetera, down to individualized landing pages and content based on geographic regions. We recently ran a campaign where we pulled a Web form off and popped up an 800 number in the California market and response totally dropped off. They wanted to respond to us via Web, not phone. But, in Des Moines they want to pick up the phone.
LORA: I think another recommendation that was brought up earlier, was just co-branding. I think it’s a great time for brands, especially if their budgets are tight, to find that other brand that matches up to the same target audience that you’re going after and leverage some of each other’s skills and be able to reach that audience but, probably, with half the budget. So there’s a lot of opportunity in 2009 to look at that, again, and see there are ways we could co-brand, who would that be. We’re all going after that same target audience, and leverage those opportunities.
DAVID H. One of our recommendations, not just for 2009, is creating customers for life. And, to Lora’s point, if you’re looking at the churn, that’s a very effective way to increase revenues without having to spend a lot of marketing dollars, going to get new customers. Because, new customers are a heck of a lot more expensive than keeping your current customers happy. If you’re creating customers for life, then you are living and breathing those loyalty programs, giving them a feedback mechanism to tell you what’s going wrong before they depart. The fact is, we as a company, and our clients and companies, in general, we all have to think more about family and community because that’s what the new mediums are all about, is creating communities. And, if we think about customers for life, all of a sudden, it’s not a number and it’s not a metric, it’s a human being, it’s a communication, it’s a one-on-one conversation. The more you can get into the heads of your best customers, the better off you’re going to be attracting more of them and keeping the ones you have.
A&M REVIEW: Getting information back from your customers — what’s the best method of doing that that you’ve found?
DAVID H: If you give the customer the opportunity to give feedback, even in an email program, you will get unbelievable response. Even with our magazine product for Frontier Airlines — we solicit our passengers on a regular basis and, they will tell you things that you never would believe, that are on their mind. With today’s modern communication, computer age, it’s insane not to allow zoomerangs and some of the easiest forms of communication. If you have their email addresses, you have a built-in inexpensive, vest pocket research strategy.
LORA: We’ve been using a lot of online zoomerangs, surveymonkey. Surveymonkey.com and zoomerang are the two — there are a lot of options, out there. But, I think, definitely, electronic is the cheapest, easiest way. But, there are advantages to get in the emotional side. One of the things we try to do, as an agency, but also recommend to our clients is, to get in their heads. Become one like them. Who is your target audience? Go to the football, high school game and sit in the bleachers if you’re doing text messaging as a client. You’ve got to get to know whom you’re talking to. That’s one thing that you can’t do electronically — you can’t do it in a true focus group. It has to be something where you get involved and think like them, become one of your target audiences. That’s what is important now. You need the quantitative and qualitative. But, that part of the emotion and what makes them buy and what makes them think — until you can become like them and feel what they go through on a daily basis, it’s hard to make those recommendations. So, whether on the client side or on the agency side, that’s really critical to do. Start to get to know whom you’re talking to.
DAVE G. I agree with all of you. But, representing the digital perspective of things, I would throw in a couple of things. To run search engine marketing programs is, probably, one of the greatest research tools that is available to marketers. We talked about our customers, our products, services, in one way because that’s the way, either our business units are aligned, or that’s just the way we’ve come to know it. What search does is, it teaches how our customers talk about it and you track that, going back to segmentation and behavioral analysis. What drives the behavior that you’re desirous of? We gather a lot of data that way. From a feedback perspective, I think there are some really simple tools out there. Google Alerts is a great way to listen in both, from news alerts as well as listing alerts. You pick up a lot of discussion boards. It’s a way to get competitive intelligence and it’s free. That’s fantastic. It’s an easy thing to do. We monitor a lot of our email submission forms on sites we’ve run from clients to look at the quality of what’s coming through. We judge a lot of feedback in that world based on the quality of the questions coming in. A lot of them technical in nature.
The other thing that I would mention is that there’s an awful lot of social media monitoring tools that are available. Ones that allow you to score keyboards against phrases that are across all blogs, etcetera. It takes aggregates of euphoria and puts it in digestible, reportable, meaningful representation of what’s going on out there. So it’s another way of listening in and gathering feedback. It’s a fantastic place. Listen and understand where you fit in that dialogue. It’s part of feedback that your customers are about.
DAVID H: That brings up the whole blogging and broadcasting and Facebook, Twitter. All of the places where consumers and buyers and users of products are getting feedback, voluntarily by just asking. If you participate in the social networks, you’re going to get that research. The social is a phenomenon that has exploded and, anybody who is in, even, B to B, these are areas that you have to pay attention to because that’s where our consumers are going. We, as marketing and branding specialists, if we don’t follow the trail, we’re not doing the job for our clients.
A&M REVIEW: Speaking of time, doing this and monitoring the Internet and social networking takes time. In your agency or your business, do you have somebody assigned to do that? How do you cover getting this done?
DAVID H: That’s really the great part of our new world. We’re not stuck with 7 to 10 percent media commissions, any more. These are time-value propositions. The idea that fee-based relationship with clients — it’s a great opportunity for agencies, today, because we’re moving away from a commodity into a service-provider relationship. Those are great opportunities for agencies. Yeah, it’s a labor-intensive business.
ANN: I think we’re definitely challenged with providing value to clients, more so than ever. Online is a huge area of opportunity for every agency and for every marketing company. We have one person that’s, pretty much, going in the online direction in terms of learning as much as he can about that area.
A&M REVIEW: You feel that it’s a billable position in the agency, then?
DAVID H: If you’ve got a client that values it, yes.
LORA: It’s one of those things that has to be right for the right brand. You have to pick the right media for the right brand. It’s an opportunity to be active in that space. If it’s doing it just for research, we are aware of what the competition is doing against one of the brands, for us, we take that on as a value-add to our clients. We look at it similar to how we look at other pieces of what we’re doing in our business and say, is that adding value, is that something we can sell as billable hours. There’s a lot of opportunity in having that knowledge.
DAVE G. Frankly, it’s a competitive edge from the agency perspective. Even if you’re not being compensated for it, you’re developing an edge because you’re aware of things well before your clients are. It is getting into the minds’ of the consumer. The mediums change but consumers are still consumers. They all migrate to different places and different times and it’s our business to understand where that’ migration’s going.
A&M REVIEW: Are trade shows still viable for your clients?
DAVID H: Absolutely. It’s a collection of buyers all interested in that industry and, those are huge opportunities. It’s the old fish bowl. Get as many of those business cards and email addresses as you can because, that’s your marketing list for the next three months.
LORA: It’s face-to-face. That’s one thing with electronic that we can’t completely get away from, face-to-face. That personal relationship that’s created when you meet someone is completely different than getting an email from them. I still see tradeshows as a great opportunity for selling to occur and that buyer and seller meets in that closely-knit environment.
DAVID H: I would say that the trade show booth business is, probably, booming, right now, because that is a direct sales opportunity.
DAVE G: We have a couple of clients that are directly tied to real estate markets, as it relates to building materials. We’ve seen some traction there. Universally, it’s not a client thing; it’s an industry thing.
LORA: Similar to anything that you’re doing in marketing, see where trade shows are effective. With budgets and expenses, there definitely are questions. Did it give us the leads we needed? Like anything, is it working? So I think people have to be smart about that. For certain industries, trade shows, probably, won’t work, this year. But, for a lot of industries, there might be huge growth opportunities.
A&M REVIEW: Is traditional media dead?
ANN: I don't think so.
DAVID H: No, absolutely not.
LORA: I don't think it is, either. You look at the Obama campaign and, obviously, he was smart in using all that’s available. I think that’s the thing. It has to be the right blend, the right mix.
DAVE G: To emerging platforms. One of the things that we’re looking at — it’s pretty early on — is mobile search. There are some pretty large predictions around mobile search. Google released the Android phone through T-Mobile, just recently, to mixed reviews. The iPhone application, for those of you that have iPhones, Google now has a search component so you can talk into the search engine and it’s going to give you some results based on what you’re asking for and, bases your location right off the GPS on the phone. From our perspective, we like to see things mature before we make those recommendations. It always comes back down to relevant content, regardless of the media.
ANN: You don’t want to drive people to your website if your website is not up to par. I think that’s a huge thing, too. Especially if you want to be doing online sales. You need to make sure that you’re ready to be in that online arena and that your business is right. Every client wants to be online but sometimes it’s more of an education as to what that really means.
A&M REVIEW: In conclusion. Next year. We’ve discussed it. Where do you go from here?
DAVID H: It’s a lot of what we’ve already talked about. For us, it is back to our basics and that is, creating customers for life is something that is a full-circle relationship with a client, it’s prospects, it’s customers. And, even the feedback called ex-customers. You’ve got to be smart; you’ve got to think out of the way you’ve done business for the last 10 years. You’ve got to be religious about your consumer and your brand, and the alignment of what your brand is and what your products and services are delivering. Give the consumer the feedback mechanisms to give you the important data that’s essential for you to stop the churn, retain the best customers and attract customers of like kind. It is a two-way communication. Years ago, we talked about interactivity. Well, today, it’s all about interactivity. Whether you want it or whether you don’t. You’ve just got to trim those things that aren’t working and spend more of the things that are working. What’s going to make my company outstanding and, what’s going to drive people to seek me out instead of me yelling at the top of my lungs trying to convince someone that I have something of interest.
LORA: The biggest thing in 2009 is really focus, focus, focus. If everybody focuses on their target audience, and really focuses their strategy, and focuses their creative, I think you can stay strong. There are a lot of distractions. A lot of people can get tied into the economy and other messages. If everybody stays strong and stays focused, they have a chance to win and be here when there may be other brands not here.
DAVE G: Short and concise. Disciplined, measured, optimized and effective, is our mantra. Leverage every dollar available to you, whether it’s your corporate budgets, whether it’s through co-op dollars, or it’s partnerships, relationships and do it in a way that’s smart. Again, measured.
ANN: The most important thing is for clients and for ourselves, a challenge that we have to attempt is to remain optimistic and convince our advertisers that you should continue to spend money because it is going to turn around. You want to retain your sales or better than them. There’s a big opportunity for clients who can provide, either a value proposition or some sort of reason for a consumer to either continue to be a customer or change — you really have an opportunity to gain market share. If you can remain optimistic and if you can continue to keep that advertising expenditure going, you’re there. Then, in 2010, when times turn around and things do get better, you can only go up.
DAVE G: I would say, from a messaging point of view, it’s time to move away from price and talk about value.
LORA: Price points only mean so much, now. I think it’s really driving home the value.
ANN BREMER is the newest member of the InLine Media team after 6+ years of experience in St. Louis and the Twin Cities. Having previously only worked at full-service agencies, Ann has direct mail, public relations, client promotions and event planning experience in addition to her media planning and buying expertise. Ann’s media philosophy is one that emphasizes a win-win situation while remaining honest, genuine, and light-hearted. She understands that she and her business are successful because her clients are successful, and spends every client's media dollars as if they were her own.
DAVE GREVES is an award-winning, widely-recognized expert in interactive marketing, with almost 20 years of experience in the field. He and the agency he co-founded, Faction Media, have created Internet-based advertising and marketing campaigns for clients as diverse as Johns Manville, Bosch Communication Systems, Avaya and Time Warner Telecom. His innovative work in reaching markets over the Web has won numerous awards and garnered invitations to participate in multiple industry committees to share his expertise.
As Chairman/CEO, DAVID HENRY’S role for over 30 years has been both day-to-day management and strategic client services. He understands the impact on sales from combining multi-media tactics with strategic planning. In 2004, Henry led the integration of three independent marketing services into one strategic offering under Mphasis Integrated. They include HenryGill Communications, Proxy Partners and publishing the Wild Blue Yonder magazine, found on Frontier Airlines. Henry’s industry leadership has extended to his roles as a member of the American Advertising Agency Association (AAAA), Western Board of Governors, Chairman of the AAAA Rocky Mountain Council, the Board of Directors of the Denver Advertising Federation and Board of Directors of MAGNET, a worldwide network of independently owned advertising and marketing agencies.
LORA LETERMANN started Colorado-based Scream Agency in 1996 and spends her time developing strategic and creative brand marketing, advertising, grassroots marketing and PR solutions for several clients. As a full-service studio, Scream's specialty is working with companies to develop instrumental grass roots advertising and PR tactics that truly affect the bottom line. A believer in acts of kindness, Ledermann created a non-profit event called the Scream Scram 5K Halloween Run/Walk to benefit the National Multiple Sclerosis Society. She was selected by the Denver Business Journal as a Colorado "40 under 40" up-and-coming business leader and recognized as a finalist for "Outstanding Women in Business."
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