Due to the dire economic conditions, 2009 will be an adventure that will test of the ability of media companies to innovate and listen closely to the needs of consumers. And there may be pleasant surprises. Broadcasters may reap unexpected issue advertising revenue as advocates try to influence events in Washington through grassroot campaigning.
In the current issue of The Financial Manager, the bimonthly magazine of the Media Financial Management Association, I observed that these times have me thinking about Alice‘s Adventures in Wonderland. The book is nearly 150 years old, but it still has the power to capture our imagination.
Right now, I think we all feel a bit like we’ve fallen down a rabbit hole while chasing a waistcoat-wearing rabbit that is muttering about being late. Some things are much smaller than they should be — think projected revenues and market caps — and others loom much larger than we ever expected.
Ten years ago, could you have imagined yourself watching your favorite team on a tiny phone screen while waiting for your appointment or your plane? I know I couldn’t. I couldn’t even if I had learned (as advised by the Red Queen in Through the Looking Glass) to believe there are “as many as six impossible things before breakfast.”
Once I started with this analogy, I couldn’t stop. I can picture some of us painting our white roses red, because we’d planted the wrong ones. Others of us are facing an angry Queen of Hearts who’s shouting “Off with his head.” We are all in the middle of a Mad Hatter’s tea party.
Times of great change
You don’t need me to tell you that the industry and our world are in the midst of unprecedented change. On the one hand is exponential technological change.
Media no longer controls its own message.
The Web and mobile technology changed that. For instance, if I see something that interests me, I can forward a link to a friend, post it, share it through an ever-increasing number of social networking sites, link it to my blog or take advantage of any number of other tools to put myself between the message and the recipient.
On the other hand, there is an economy in turmoil. Our economy relies on consumers spending. If they keep their wallets closed, the whole system shudders to a halt. We know, of course, that change means opportunity. However, it’s hard to think about opportunity when you seem to be fighting for your very survival. So, what can we do to get things moving again, to improve our revenues and our corporate values?
First, we need to keep trying new things. I read an interview with a Nobel Prize winner the other day, in which he said that the key to his success was working harder than others. Wasn’t it Thomas Edison who said, “Genius is 1 percent inspiration, 99 percent perspiration”?
Second, we need to listen, really listen, to consumers to find out what they need. Edison also said that nothing he did came by accident. He saw a need and kept trying until he met it. I just read another variant on this in a recent issue of The Bridge newsletter, in which author Evie Haskell recommends taking a K.I.S.S. approach to success, while noting that the “S” for “simple” doesn’t guarantee it’s going to be easy. Instead, it means that what we do has to be compelling for the consumer.
Reasons for hope
When I’m looking for insights on how to make our advertising opportunities more compelling, one of the people I listen to is Evan Tracey, president of TNS Media Intelligence/Campaign Media Analysis Group. In the current issue of The Financial Manager, he shares some of the lessons from the 2008 political advertising season that can help us to make our advertising platforms more competitive in 2009 and the 2010 political campaigns.
Most notably, Tracey believes that special interest advertising will be an opportunity in the months and years ahead. He bases this on the likelihood that “inside the Beltway” lobbying will be less effective under the Obama administration. With so many big-ticket items on the first-term agenda, issue ads will be a vital tool in the arsenal of those looking to make their voices heard in these legislative fights.
Tracey also believes that there’s plenty of reasons for optimism about the role of local TV in upcoming election campaigns. Overall advertising was way up in the 2008 National elections — $2.5 to 2.7 billion compared to $1.5 billion in 1984 — and most of that money went to local broadcast TV, which received over $2 billion in spending for both the 2008 elections and issue-advocacy advertising.
While Web advertising will continue to increase in its importance, Tracey found that the most effective online campaigns paired old and new media. Candidates and interest groups used TV and radio to promote online efforts. Some of the most successful of these efforts were executed by the Obama campaign, AARP’s “Divided We Fail” campaign and T. Boone Pickens’s “Pickens Plan” program. “It’s hard to imagine that any of these three efforts would have been successful without the substantial promotion on TV and radio outlets,” he observes.
The 2008 campaigns also served as further evidence that this isn’t our father’s media tea party. A generational shift of voters is taking place as more of the Millennial generation turns 18. The Obama campaign reached targeted voters through ad buys on cable channels that skewed to their demographics.
Another lesson from the Obama campaign strategy was to use a variety of ads in order to prevent viewer fatigue. Similarly, the Geico advertising arsenal that uses cavemen, celebrities and a gecko, all ending with a “save you money” message, the Obama campaign aired over 120 different ads in less than 130 days. While the Obama ads featured a variety of messages, themes, looks and even languages, they all ended with a consistent and clear message: Change.
“For all the talk about the use of new media — viral videos, micro-targeting and the like — it was the blunt instrument and shear tonnage of TV that gave the Obama campaign the platform and megaphone needed to overpower the brands of both Sen. Hillary Clinton and Sen. John McCain,” Tracey observed.
Good judgment over fear
Hopefully, these findings encourage us not to lose our heads as we grapple with the impact of tough economic times on advertising revenue. While we can be tempted to believe that “desperate times call for desperate measures,” we also need to remain levelheaded. The long-term consequences of desperate actions can outweigh the near-term value of sacrificing certain principles in order to close an ad buy. I believe this applies to the importance of keeping an eye on our credit policies.
Since 1991, MFM and its BCCA subsidiary have recommended that joint and several liability is vital to ensure that both the advertiser and the agency that purchases ad time or space on the advertiser’s behalf are liable for payment.
As Robin Szabo, president of Szabo & Associates and an MFM board member, often says: “Of all liability positions used by media, the joint and several liability position still provides the best protection if either party fails to pay.”
Szabo also reminds us that the effectiveness of any policy position depends on the quality of its implementation. If media companies allow their fears about concluding a deal to remove their requirements for joint and several liability at a time when we need to be the most concerned about payments, it’s going to be much harder to restore that language in the times ahead. Likewise, if the company allows payments to slide well beyond the due date, it will be hard to enforce those due dates in the future.
Liability and credit policies will be among the topics that Szabo and John Sloan, director of credit services, Turner Broadcasting System, will be discussing during an MFM/BCCA Distance Learning Seminar entitled, “Managing Credit in a Difficult Economy.” More information about the teleconference seminar, which is scheduled for 4-5:15 p.m. ET, on Tuesday, Feb. 24, may be found on MFM’s Web site.
Finding the opportunities for growth in this difficult economy and the other elements that are making this year seem like a Mad Hatter Tea Party will be the primary focus for the 2009 Annual Conference for MFM, BCCA and INFE, the Interactive and Newsmedia Financial Executives Association.
The conference will be held in Atlanta on May 12-14 and will feature presentations from leading economists and industry analysts as well as numerous success stories that attendees can take back home and put to work in their own organizations.
When we selected “Responding to Change” as the theme for this year’s conference, we could not have imagined how prophetic it was. We aren’t creating change, we need to respond to it. In times like these, MFM really shows its value. Our board, our committees and our members share information and best practices on a daily basis because, unlike Alice, we won’t awaken on the side of a river and find that this whole thing was simply a dream.
Mary Collins is the president and CEO of the Media Financial Management Association (formerly the Broadcast Cable Financial Management Association), a professional society for addressing the diverse needs of the industry’s financial and business professionals. Her column appears here every other Friday.