Two wonderful, enlightening pieces today, courtesy of our sibling publication, Advertising Age.
The first is by Ellen Oppenheim, who is the founder of Oppenheim Media Consulting and one of the smartest people we know. For most of the past decade she was the Chief Marketing Office and Executive Vice President of the Magazine Publishers of America.
In this essay, Ellen talks about the difficulties in getting cross-platform media deals done, and what changes need to be made to get them done in a much more easy fashion.
Following Ellen’s piece, we have an interview of Hulu CEO Jason Kilar by Ad Age’s Nat Ives. Jason talks about the importance of connecting with consumers in this must-read interview.
The Tearing Down of Silos
By Ellen Oppenheim
For Advertising Age
If debates between ad buyers and sellers about the issues with cross-platform media deals were aired as a reality show, it might be called "The Blame Game." Each side faults the other for the persistent difficulty in closing cross-platform deals while talking at length about the strides it’s made to improve the situation.
Silos have been eroding, and deals have been getting done, of course, but progress is not happening fast enough to avoid ongoing complaints. Moreover, the tensions are about to be exacerbated by a rising set of platforms to master: social media and a whole range of smarter mobile devices including iPads and other tablets.
How did silos become so entrenched? The law of unintended consequences played a big role.
For most of advertising history, creative and media duties were housed under one agency roof. Most media planners — as media strategists were called before media-only agencies came up with a host of new labels — bought all media except for TV and radio. Creative teams developed ads across media formats.
Silos did exist. General advertising and direct campaigns, for example, were typically not coordinated. But "silo effects" were limited because responsibility for creative and media success, regardless of media type, usually resided with one team at the client and one team at its agency.
The growing complexity of media options changed the game. Clients split creative and media responsibilities to enhance media buying clout. And media buyers became experts on the medium they bought but happily left the other media to other people.
The same proliferation of media that helped spur silos, however, also drove marketers to seek programs that communicated across media — the better, they hoped, to reach scattering consumers. So "The Blame Game" began. Media sellers complained that agencies broke cross-platform deals into component parts, losing sight of the programs’ overall value, so sellers increasingly bypassed the agencies to work with clients directly.
But media agencies said sellers and even their own clients were unprepared for more complex cross-platform sales.
Recent economic pressures exacerbated the problems. Training programs that taught different media were reduced or eliminated. Budget cuts also drove many agency researchers to work at outside vendors, costing the affected agencies the benefit of their original cross-media research and the conversations that it stimulated, according to Randy Cohen, president and COO of Advertiser Perceptions, the research company.
It’s impossible to return to the simpler structures that used to exist. But there are several ways in which players are trying to improve today’s difficult situation.
Embeds, partnerships, and new positions: Even without the "all in one place" approach, new cross-platform arrangements are emerging for buyers and sellers alike. Digital experts are being embedded within analog media buying and selling teams. Creative agencies are hiring media specialists or forging new partnerships with their clients’ media agencies. Hearst Magazines named an advertising director for "tablet media" to serve as a liaison between the ad community and the mobile and tablet versions of Hearst’s brands.
Education: Clients, agencies and media companies are requiring their staffs to become fluent in digital media. After initial declines, internal training programs, the use of outside experts to advance learning and attendance at digital conferences have begun to rise again.
Communication: Clients are fostering more discussions across the different groups with whom they work, insisting, for example, that agency executives from a variety of disciplines attend meetings when reports are given on what’s working in an advertising program and what’s not.
Compensation: Incentives for advancing cross-platform practices are being implemented. Compensation programs that reward improved behavior and/or results are key to motivating real change, said Harry Hawkes, VP in the consumer and media practice at the consulting firm Booz & Company.
The efforts are paying off. Clients have responded well to MediaVest’s Cross-Athlete program, for example, which requires buyers of specific media to become equally fluent across different media platforms, because it emphasizes a deep understanding of consumer behavior rather than focusing on a single medium, according to Donna Speciale, president for investment and activation at MediaVest.
But still more can be done to break down silos.
Education needs to be applied consistently across disciplines — even when that means the digerati have to be educated about analog media. The rise of digital advertising options has forced executives on the analog side to learn more about digital media, but the reverse happens far less frequently. Digital executives sometimes hide behind technology as an excuse to avoid learning about other media, according to William Havlena, VP for research analytics at the research company Dynamic Logic. "They need to learn basic advertising principles and recognize that these principles don’t change across media, even though executional tactics should vary," he said.
Common metrics across media would be a huge aid in tearing down silos, said Phil Cowdell, the head of Mindshare North America. Media buyers today are restricted to tools that help them within the media they purchase, Mr. Cowdell said. But tools that measure results such as action, engagement and lead generation instead of media-specific results like ratings and click-through would help broaden perspectives too, he added.
And structures need to continue to evolve to address the impact and increased complexity arising from more media options and new revenue streams.
Unhappiness over silos’ persistence is motivating change. Advertising and media executives are beginning to move beyond "The Blame Game" and are adopting new practices and investing in new solutions. It’s all about the speed and success of those changes now. Going back to the reality TV reference, those who make strides at a faster pace will become the "Survivors." Those who don’t may find themselves among "The Biggest Losers."
ABOUT THE AUTHOR
Ellen Oppenheim is the founder of Oppenheim Media Consulting, which helps advertising and media organizations profit from the growing body of information available on consumers’ rapidly changing media habits. Ms. Oppenheim has held executive positions at advertising agencies and media companies. She was exec VP and CMO at the Magazine Publishers of America from 2001 until this summer.
Now, here’s our second piece:
Hulu CEO to Big Media: Serve Consumers or Lose Them
By Nate Ives
Big media companies have to show enough spine to charge for certain content, but they can’t obsess over protecting the business models that originally paid for their gleaming corporate offices, Hulu CEO Jason Kilar told an audience of publishers during the American
Magazine Conference in Chicago on Monday, Oct. 4, 2010.
Asked about the famous lament by NBC Universal chief Jeff Zucker — who teamed up with News Corp. to start Hulu in the first place — that he didn’t want to trade analog dollars for digital pennies, Mr. Kilar said he’d already told Mr. Zucker where he was wrong. "You can’t be in the business of protecting," he said.
That’s particularly true because media consumption is basically an optional activity, he said. It’s habitual and important for most of us, he argued, but no one’s going to actually die if they don’t see the latest episode of "30 Rock." And within media, as the magazine publishers in the room were well aware, mushrooming options mean you’ve got to serve consumers or lose them. It’s no sure thing that a young person’s going to watch "The Amazing Race" instead of visiting Facebook. "Content is discretionary, so you better focus on convenience," he told the audience.
All that said, Hulu has been anticipating the introduction of a pay service for years, according to Mr. Kilar, who was interviewed by Bloomberg Businessweek editor Josh Tyrangiel. "You can’t have a one-size fits all approach," Mr. Kilar said.
Now that Hulu Plus, which offers extras such as "season passes" to shows and enables viewing on mobile devices, is in a private beta, you can expect it to eventually materialize on all kinds of platforms, Mr. Kilar predicted. "You’re going to see us pretty much anywhere there’s an internet connected device," he said.
He also predicted a new "golden age of media," fueled by increasing demand for content from distributors such as Hulu, Netflix and, presumably, the tablet computers in which magazine publishers are investing so much time, money and hope. "The thing you want most is intense competition on the distribution side of things," Mr. Kilar said.
That’s happening in the video space as entrepreneurs try to answer consumers’ unmet needs. "I think you’re going to see the same thing for print," he said.#