By Bob Liodice, President and CEO, ANA
Posted: Oct 17, 2012 12:00am ET
In late summer 2012, the ANA’s Board of Directors unanimously voted to make Ad-ID the industry standard for all advertising asset coding by January 2014. Enough with all the industry excuses for not employing Ad-ID. There are no more valid reasons, no more lame excuses, and no rationale for deferring the broad scale adoption of Ad-ID. None.
So what’s all the fuss about? Let’s start at the beginning and talk about the grungy side of advertising: the “marketing supply chain,” which represents all the backroom business processes that move the creative from advertiser to agency to vendor to media. Most marketers like to look the other way when it comes to managing this because it’s not “sexy.” But the reality is that the process is suboptimal and it costs the industry plenty. The supply chain is unproductive and messy because much of it is mired in old, analog-based processes. The lost productivity in time, rework, and errors costs the industry $1 billion to $3 billion annually; that translates to $10 billion to $30 billion over a decade. I don’t know about you, but I see no reason to waste $30 billion over 10 years when the solution sits right in front of us: Ad-ID.
The supply chain needs a common coding system — one that serves functions similar to what the UPC code does with products and services. Each advertising asset should have a unique code assigned to it so that the asset finds its way through the supply chain like greased lightning. Unfortunately, the industry has not completely embraced this philosophy. Today, only 41 percent of television commercials, 12 percent of radio executions, and practically no digital ads at all leverage Ad-ID. All other marketers use homegrown coding systems that lead to confusion and waste, at an enormous cost to all players in the chain.
While lost productivity is one issue, the other major casualty of poor industry asset coding is suboptimum syndicated measurement. Without a common standardized coding base, syndicated measurement companies scramble to pull their data together — often incorrectly. This costs marketers dearly in terms of weak accountability and lost revenue due to bad decision making.
Ad-ID carries all the metadata necessary for the digital asset to fly through the supply chain “error free.” That means no rework, optimum productivity, and great measurement potential. So what’s not to like about it? The industry call to action is to have one universal advertising asset coding system by January 2014: Ad-ID.
By Lisa Wang,VP & Regional Head of Exchange Traded Funds Marketing, State Street Global Advisors
Posted: Oct 16, 2012 12:00am ET
Two recurring themes from the presentations at the ANA conference, whether they came from P&G, J&J, McDonald's, Luta, BP, Ford, etc. stick out in my mind. The first is understanding and embracing how technology can transform your business model and brand on a scale never before achieved; think how McDonald's efficient assembly line process revolutionized all industries across the globe. The second is leveraging your brand platform to do more just than sell products, but to personify the offering through acts that help underserved communities, as was the case for Luta's Fight for Peace program; a boxing-based project that takes youth off streets that are terrorized by drug wars.
Even more, today's technology allows people to communicate crisis, assemble a support group, or provide potable water to remote regions, and companies are pitching in. Although these high-profile humanitarian efforts might help companies sell widgets and build brands better and faster than hungry looking models, they are also the RIGHT things to do. And for us as consumers and marketers, it's very easy to support these efforts through linking inspiring Dove campaigns on Twitter and "liking" a relief effort post to donate a dollar through Facebook (and you know you like the warm tingle you feel as you push that send button). But what do we do about the dark side of humanity where the ticking bomb of technology is used to do WRONG? Things like advancing a nuclear arms race, releasing computer viruses on national defense systems and posting hate videos on YouTube? As much as we want to impact positive change, these situations are ones we tend to turn a blind eye to and leave in the hands of our national leaders. Because hey, that's above our pay grade, outside of our perception of our sphere of influence and frankly we've got enough problems to worry about! New York Times journalist David E. Sanger injects a dose of the current-events surrounding these realities, tells us why we should care and challenges us to consider what we can do about them.
By Bill Duggan, Group EVP, ANA
Posted: Oct 15, 2012 12:00am ET
I am just back from the ANA Masters of Marketing Conference and learned so much! The following provides a key take-away for me from each of the speakers.
- Marketing is a lot like politics. The voting booth is the store. Consumer insight and creativity are at the core of winning the brand election every day. (P&G)
- Marketers are responsible for connecting with people in ways that are instructive rather than disruptive. (J&J)
- Have standards. Know if you are fulfilling those standards. Take steps to close any gaps. (McDonald’s)
- Make the world a better place and focus on the positive. (MasterCard)
- Give voice to consumers; move from control to curation. (Sharpie)
- With every opportunity comes responsibility. (Luta)
- Innovate where others have gone on auto-pilot on normal go-to-market industry conventions, versus innovating on shiny new things. (Ford)
- Brands and business can be great agents for change. (Unilever)
- There is more value in building a deep connection with one consumer versus connecting in a superficial way with one-hundred. (popchips)
- Stay true to your brand’s core values. (Allstate)
- Marketing innovation is a must-have to drive brand relevance. Have patience and fail forward. (Coca-Cola)
- Believe in your culture. If you live by your culture, you can get through anything. (BP)
- Consider the full palette of marketing options as direct mail still works. (USPS)
- Marketers have to test, invest, and innovate. Take a percentage of your budget to try new things. (Cleveland Clinic)
- Brands with purpose need open organizations as that maximizes positive exposure. (Effective Brands)
- Innovate at the core and drop pet projects. (Discover)
- How you treat your agency gives a marketer the work it gets. (Owens-Illinois)
By Bill Duggan, Group EVP, ANA
Posted: Oct 5, 2012 12:00am ET
ANA has just completed and released research to help understand how marketers are using newer media platforms to reach multicultural customers (e.g., mobile, social media, webinars, blogs, search, and more). The results include some interesting findings related to how marketers are budgeting for this.
The great majority of marketers project they will spend more (60%) or the same (24%) on newer media for multicultural efforts in 2012 compared to last year. The average increase in spend on newer media for multicultural marketing in 2012 is 9%. Meanwhile, the great majority of marketers project they will spend more (56%) or the same (31%) on all multicultural media compared to last year. The average increase in spend on all multicultural media in 2012 is also 9%.
Respondents to the survey were asked how newer media platforms for multicultural customers are currently being funded at their company. More than half surveyed (56%) said the funds are shifted from the general market media/marketing communications budget. An additional 22% have shifted funds within their multicultural media/marketing communications budget. Only 28% have an incremental budget. This indicates that marketing budgets continue to be under pressure, and while there may be some incremental budget available for multicultural newer media marketing, for the most part, existing funds are simply being reallocated.
Finally, in 2012 the average percentage of the multicultural media budget allocated to newer media platforms was 7.7%. That percentage is likely too low, as the consumers’ consumption of newer media in reality represents a much bigger percentage of their overall media consumption. At the same time, investment in multicultural marketing overall is also likely too low for many marketers.
At the upcoming Multicultural Marketing & Diversity Conference, a panel will share the results and offer insights on the survey.
By Bill Duggan, Group EVP, ANA
Posted: Sep 26, 2012 12:00am ET
ANA recently announced the finalists for the 2012 Multicultural Excellence Awards, which celebrate the year's preeminent multicultural advertising campaigns. This year, there are some interesting observations regarding the finalist agencies.
- mcgarrybowen, a “general market” agency, is a finalist in the Hispanic category for work done on Kraft Real Mayonnaise.
- LatinWorks is a finalist in the General Market category for its work on General Motors/Silverado.
- McCann Erickson, also a “general market” agency, is a finalist in the Significant Results category for its work on L'Oreal.
- And Leo Burnett is a finalist in the Digital Media category for work on Allstate.
More multicultural agencies are doing work for the general market, and more general market agencies are doing work for multicultural markets.
LatinWorks is an interesting case study. Their website describes them initially as“a full-service advertising agency.” They have been named Hispanic Agency of the Year by Adweek and Multicultural Agency of the Year by Advertising Age. Alejandro Ruelas, LatinWorks' managing partner and chief marketing officer, was quoted earlier in the year in Ad Age saying, "The agencies that will survive in our space are the ones that behave like general-market agencies." LatinWorks then backed up that statement when the Texas Lottery awarded its entire account to the agency, which had previously only handed the Hispanic portion.
Meanwhile, general market agencies like mcgarrybowen, McCann, and Leo Burnett appear to be increasingly involved with communications targeted to multicultural segments.
In ANA’s soon to be released survey on multicultural marketing and newer media we asked respondents to identify the external resources used for multicultural initiatives.
- 52% of marketers surveyed said they utilize an external multicultural agency
- 40% utilize a general agency for their multicultural initiatives
These results are most interesting as there appears to be the opportunity for more marketers to engage multicultural agencies, as only half of survey respondents are currently doing so. At the same time, general market agencies appear to be increasingly involved with communications targeted to multicultural segments, as some clients are now “marketing to a multicultural nation” rather than doing “multicultural marketing.”
Let’s see how agencies continue to evolve in this space. And stayed tuned for the winners of the ANA Multicultural Excellence Awards, which will be announced at the ANA Multicultural Marketing & Diversity Conference October 28-30 in Miami.
By Bill Duggan, Group EVP, ANA
Posted: Sep 21, 2012 12:00am ET
Viacom recently announced plans to increase the number of commercials run on some of its cable networks to offset loss of revenue due to a decline in ratings. Really??
This is a short-term strategy and is clearly not sustainable over the longer haul or in the best interests of advertisers. With even more commercial minutes, consumers are likely to tune out, and off, even more. Why would a viewer put up with as many as 16 minutes of commercials on Nick at Nite when DVDs, VOD, YouTube and other options are available with no or limited interruptions?
More commercials is NOT the solution to a decline in ratings as that will ultimately lead to an even greater acceleration to declining ratings and ad rates. And then what’s the solution to that … even more commercials?
By Bill Duggan, Group EVP, ANA
Posted: Sep 11, 2012 12:00am ET
ANA has just completed research to help understand how marketers are using newer media platforms to reach multicultural customers. This research is important since multicultural customers have been the earliest adopters of digital technology and the growth rate for multicultural audiences has outpaced the general market. The results of the research should be of significant interest to the marketing community and full details will be shared at the ANA Multicultural Marketing & Diversity Conference in late October. But in the meantime, we thought we’d tease you with just a sliver of the rich learning.
Websites are the “king” of newer media platforms to connect with multicultural customers – specifically, company and branded product websites. Of the 18 newer media platforms analyzed in our research, websites rank as the top platform used to reach multicultural customers. Further, websites were cited as the newer media platform for targeting multicultural customers that will get the most spending in 2012. And to top things off, websites were ranked as the most effective newer media platform for reaching multicultural customers. That’s a great story for websites!
And marketers are employing in-language websites to reach their U.S.-based multicultural customers. 63% indicate use of an in-language website to reach their U.S.-based multicultural customers. 59% of marketers have a Spanish-language website and 22% have an Asian-language website to reach their U.S.-based multicultural customers.
Yes, there is buzz and news on mobile, social media, search, and more. And we’ll be sharing that in upcoming weeks. But websites are front and center for marketers to reach multicultural customers.
By Bill Duggan, Group EVP, ANA
Posted: Sep 6, 2012 12:00am ET
The Calm Act goes into effect December 13, 2012. The Commercial Advertisement Loudness Mitigation Act responds to years of consumer complaints that the volume on some commercial advertising was much louder than that of programming and requires broadcasters to ensure that the sound level of commercials is the same as programming.
MediaPost recently reported some interesting news on the Calm Act related to station promos. The FCC has made it clear that station promos should be treated the same as ads – in other words, the station promos cannot be louder. The National Cable & Telecommunications Association, a cable industry trade group, is arguing otherwise. MediaPost goes on to say,
“It makes sense for the FCC to treat the two as the same when considering CALM implementation. What a coup it would be for networks if promos were exempt, bringing louder promos than the programs and ads. Talk about standing out. The ad industry should make sure promos are treated the same as ads to avoid the prospect of distracting from their messages.”
ANA applauds the FCC perspective. With the Calm Act, commercials cannot be louder than programming. And it makes perfect sense that station promos be treated the same as commercials and also not be louder than programming.
By Bill Duggan, Group EVP, ANA
Posted: Aug 27, 2012 12:00am ET
Tip jars are now common at coffee shops, delis, and some quick serve restaurants. And those tip jars have recently taught me something about emotional connections.
One shop I frequent has a cash register that automatically dispenses change to customers and the tip jar is adjacent to that dispenser. I never deposit change in that tip jar. In another shop, a server provides the change to the customer—one human hand to the other. I sometimes tip there.
Said another way, I never tip when the machine provides change but sometimes tip when a person provides change—usually when that person looks me in the eye, smiles, and says thank you. So I tip when there is a human, emotional connection.
Brands can learn from tip jars too as there is usually more power in creating an emotional connection in marketing/advertising versus communicating a rational/functional benefit. Two recent examples from the trade press provide examples.
Advertising Age recently profiled Zumba CMO Jeffrey Perlman who cited the “a-ha” moment in Zumba’s growth as, “I realized we were selling the wrong thing. We were selling fitness when we should be selling emotion. I wanted to turn Zumba into a brand where people felt that kind of free and electrifying joy.”
MediaPost reports on new Nielsen research from their TV Brand Effect service on factors that contribute to successful television commercials. Nielsen found that ads building an emotional connection are effective “by triggering the brain to identify an experience as important enough to remember.” Spots can’t just dole out information, but need to establish a narrative.
Brands can learn from tip jars, Zumba, and Nielsen – emotional connections are typically better than rational ones.
By Bill Duggan, Group EVP, ANA
Posted: Aug 21, 2012 12:00am ET
“Media Rebates/Incentives Require Full Transparency” is a recently released white paper from ANA and Reed Smith. The industry practice of media companies providing rebates/incentives to agencies for referring or influencing client spending towards that media company, and then the agencies not reimbursing those funds to the client, has long been acknowledged as a common practice outside the United States. However, our recent work confirms that this practice also exists in the U.S.
The white paper has sparked conversation among the advertising community. Some leading industry consultants have weighed-in on our LinkedIn group and highlights of those comments follow.
Stephen Broderick, partner at Firm Decisions: The U.S. market is unique in that advertisers “have had sufficient warning” that media rebates “might be an issue” at some point in the future. U.S. advertisers really need to ensure there is transparency in how these rebates are being accounted for, as well as ensuring that they financially benefit from them. My extensive experience in this area tells me that most U.S. advertisers are NOT sufficiently covered contractually. Many advertisers often think they have it all covered, but contracts with omitted clauses or incomplete definitions or what may seem to be relatively unimportant “wording” or “phrasing” can often allow the agency to justify the retention of rebates or commissions that have been earned as a consequence of client billings.
Allan Linderman, president at The Linderman Media Group: Clearly, the two main issues are (1) potential lack of objectivity in media decisions and (2) hidden agency income. Since the foundation of most agency/client relationships is the agency's ability to bring value to the client by developing strategic plans and executing efficient buys, any potential compromise to this fundamental element is problematic and a clear conflict of interest. Accepting revenue from a vendor based upon recommendations for client spend borders on the unethical.
Morten Pedersen, chairman at glue2020: Surprisingly, few clients are covered contractually, enabling them to rightfully reclaim rebates. It hurts to see that so many client-agency contracts are outdated, based on agency templates (excluding key clauses, obviously), and simply not protecting the client well enough. As a result, it is a mistake to make advertisers believe that agencies owe them anything (this has been tried in various court rooms already), let alone think that agencies “need” to give full disclosure to clients if this is not specific in the contract. Also, it is wrong to assume that rebates exist because of decreasing agency fees/FTE$. Even I remember some good times in the 80’s and 90’s where fees were not an issue (and the rebate system were very much working nicely alongside). Also, rebates are primarily managed independently of client-specific commercial arrangements (incl. fees), so it is a mistake to assume that they are directly linked (again, the specific client-agency contract may go deeper and set out specific T&Cs).
Michael Lay, chief executive officer at Advertising Audit International: For effectively assessing the media rebate issue, we recommend that the marketer start with an in-depth assessment of its agency agreement terms for ensuring contract clarity. We believe it commences with the agreement terms between the marketer and agency, especially the contract language governing Discounts/Rebates, Compensation and Right to Audit. Most “best-in-class” contracts include a Discounts/Rebates section in which all discounts and rebates are refunded to the marketer. For example: “All third party discounts, whether taken by Agency or not, will be credited in writing to the account of Marketer, within thirty days of the discount being offered, provided that Marketer pays Agency for such charges in a manner that allows, or would allow Agency, acting diligently, to receive the discount.”
Elliot DeBear, senior vice president at Active International: An agency, in the case of media procurement, is an agent dealing on behalf of one principal with another. Any rebate and/or cost reduction realized based on a client's spend should benefit the client. If the rebate, in and of itself, is cause to shift spending it must be done with full disclosure to the client. Period!
Steve Fajen, partner at Drexler/Fajen & Partners LLC: When agencies were first birthed in the late 1800s they placed newspaper space. There were few (if any) rate cards then, so agencies made up a high rate, gave the newspapers less and then pocketed the difference. A blind commission, long since thought to be disreputable. When media buying services were first birthed in 1969 they assured clients they could buy time for little or no commission. They gave the client a high rate, paid the stations less and pocketed the difference. A blind commission, again thought to be a worst practice. By these standards pocketing rebates today is just another worst practice. When the major holding companies birthed the modern media agency in the 1980s the industry applauded the abandonment of these blind payments. No one should stand for putting the blinders on again.
Thanks Stephen, Allan, Morten, Michael, Elliot, Steve for sharing your thoughts and expertise!