Jan 18, 2010

It’s Not The Medium, It’s The Money

The other day I was talking with a friend who was once very involved with the ad business until he found more lucrative pastures and went his merry way. We were talking about how much the business had changed since the early 90s and he voiced a question I’ve heard asked a lot recently both inside and outside the ad industry: why are clients still spending millions of dollars making TV commercials.

Like most intelligent people, my friend understood why a company would need to have some sort of TV presence: millions of people watch TV, it’s an effective way to reach certain audiences, not everyone owns and uses a DVR, etc. and so forth.

What baffled him instead was why so many clients continued to spend such a large percentage of their budget producing said TV commercials. The multimillion dollar budgets, the month-long trips to exotic locations, the millions spent on special effects... that’s all still there. And while there’s admittedly less of it than there was in say 1987, it hasn’t disappeared as quickly as a pure business analysis would demand.

For to restate what has (for many of us) become obvious, TV has become just one of the many places a consumer may see a brand’s message, the reach is nowhere near as broad as it was in the days of three networks, achieving the degree of frequency and ubiquity possible in the pre-internet days is all put impossible and the number of people who do own and use DVRs to fast-forward through TV commercials is increasing daily.

Despite this, many companies continue to spend vast sums of money producing TV commercials, an action with numerous repercussions. The primary one being that the TV commercial becomes the centerpiece of their marketing campaign and time and money is not spent on other programs that might actually increase sales more effectively, e.g product design, customer service, R&D.

The blame here falls pretty heavily on the marketing departments of the companies in question. Ad agencies don’t help, but for the most part, they’re just enablers. (And who can blame them? The profits from a big budget TV shoot are still pretty sweet and as much as certain members of the creative community would like to pretend otherwise, in the absence of wealthy corporate patrons, ad agencies still need to turn a profit.)

Which is why there’s a whole lot of head-scratching these days about why the same company that will put up a hue and cry about spending $30,000 for a Facebook program will gladly (and rapidly) spend twice that amount to fly a TV commercial director and his entourage to Istanbul (first class) or reshoot 2 not-very-critical seconds of a 30 second TV commercial just to make sure the grass is the exact right shade of green. (I am not exaggerating here. The amount of money spent on shooting TV commercials is truly mind-boggling, even more so when you factor in the many millions that large packaged goods companies still spend on testing and re-testing these commercials before they go into full production.)

And while attention to detail is a glorious thing, there’s a point at which it veers towards insanity. The insanity in the marketing community seems to be a result of fear and stagnation more than anything else. Fear, because marketing jobs seem to be even more tenuous than advertising jobs (if such a thing were possible) and stagnation, because right now, there doesn’t seem to be a whole lot of reward for shaking things up.

I say “right now” because this too will change. Perhaps not fast enough for some companies, but for others, the ideal marketing person is going to be someone who’s spent time at companies who “get it,” someone who realizes that the millions that were once lavished on television production are better spent on things like experience design (there’s a reason Lee Clow called the Apple Store “the best ad Apple ever did”) or the sort of Zapposesque customer service that builds DWOM (digital word of mouth).

That’s the sort of person who’ll be running most large marketing departments ten years from now. They will be the “Marketing General Contractor” I described in a post I wrote last summer. And they will smile at the old-fashioned notion that shooting a TV commercial requires a year’s worth of testing and planning, lavish lunches at Nobu and the expenditure of 70% of their annual budget.

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