July 31, 2014

Digital Graffiti

Tuesday's Ad Contrarian post called "The Consumer Is In Charge. Of What?" didn't exactly go viral, but it went kind of semi-bacterial.

Here at the Ketel One wing of The Ad Contrarian global headquarters, we pay very close attention to the social media commentary about our blog posts.

Okay, maybe not very close.

Okay, maybe not at all.

It's not that we don't respect the opinions of others, it's just that we don't really give a shit. (Try it. It's liberating.)

Nonetheless, we studied up on the commentary generated by the post in question. As the title suggests, the post concerned the digi-doofuses who think "the consumer is in charge." As I expected, it generated a lot of hot air about social media being the way consumers are banding together to control everything.

This is me giggling.

Social media whining is to marketing as graffiti is to politics. It is little more than the drumbeat of the powerless trying to get the attention of our corporate masters.

The people who post "McDonald's Sucks" on Twitter and think it affects anything other than some poor bastard locked in a "social media war room" (gag me) in a basement in Chicago are totally delusional.

Do you think the United Airlines guitar guy didn't teach the big boys a lesson? Do you think they don't know how to neutralized your social media bedwetting? Do you think the  corporate PR monkeys haven't figured out how to handle your digital graffiti yet? Do you think the $5 coupon they send you when you complain on Twitter is anything other than lip-service?

Social media complaining is the opiate of the asses.

Amigo, you are not in charge. Get used to it.

July 29, 2014

The Consumer Is In Charge. Of What?

"The Consumer Is In Charge" says Kaiser Permanente CIO

"Consumers and their demands are in charge of business" says Frito-Lay’s senior vice president and chief marketing officer.

“Today, the customer is in charge,” said SrVP for marketing at Wal-Mart Stores, 
One of the inescapable clich├ęs of modern marketing is that "the consumer is in charge."

It's virtually impossible to talk with anyone in the marketing industry for any period of time without hearing this trite lump of nothing.

There are three things horribly wrong with it:
1. It assumes that there was a time in the past in which the consumer wasn't in charge of making buying decisions. I'd love to know when that was.

2. It assumes the usual bullshit about the web having "changed everything." For a nice chuckle about this lovely bit of stupidity, I refer you to one of my favorite all-time classics of marketing doubletalk.

3. Most depressingly, it shows a remarkable and frightening lack of understanding about what's really going on in the world.
Today, we going to focus on item #3.

Among the most disturbing aspects of economics and society today is the alarming degree to which a handful of companies control what we see, hear, and buy. Never before in my lifetime has so much power been consolidated into the hands of so few entities. Never before have the choices for consumers been so concentrated.

Here's a look at the food industry in the U.S.

According to the Huffington Post "These 10 Companies Control Enormous Number Of Consumer Brands" (click to enlarge.)

Media is even worse. Here is an infographic from 2012 reproduced by Business Insider, that claimed that 6 companies control 90% of the media in the U.S. A few things have changed since 2012, but the trend is no better.

The financial industry is equally concentrated. Here's a chart from Mother Jones that shows how 37 banks became 4.

As for the mythical democratizing effect of the web, Google, Facebook and Yahoo dominate web traffic pretty effectively. Google alone is responsible for about 1/4 of all web traffic. And more than 50% of all web video is shared by YouTube and Netflix.

And please don't get me started about the hideous amount of information these creeps are collecting on us.

You have to do some truly monumental logic torturing to come up with a story in which all this consolidation and concentration of economic, marketing, and communication power leaves the consumer in charge. 

More than ever in my lifetime, the big guys are driving the bus. The bullshit about the consumer being in charge is just the blind utopian rubbish of clueless digital nitwits.

July 28, 2014

What Are Agency Services Worth?

I spent 40 years in the agency business. For about 35 of those years I was in agency "management." By that I mean I was a shareholder or partial owner of an agency.

One of the most confusing parts of managing an agency is figuring out what to charge clients.

When I started, it was pretty easy. Generally, we got the equivalent of a 15% commission on media spending. Sometimes, it was structured as a true commission. Sometimes it was structured as a fee based on an implied commission. Most times it was a combination of things that added up to somewhere in the neighborhood of 15% of the marketing budget.

That model died a long time ago.

It died for several reasons. First, clients felt that the assumption that agency services were worth 15% of their budget was too generous. This was both true and not true. In the case of very large media budgets, agencies probably earned too much. In the case of small to moderate media budgets, agencies earned too little.

The model has changed radically, and it is very hard to find a consensus on how to calculate the value of agency services. Each agreement seems to be negotiated ad hoc, with no standard to go by.

Agencies generally struggle to make a decent profit. Managing an advertising account is far more time intensive than it appears to outsiders. This is particularly true when a substantial component of the activity is web-based. Web stuff devours hours.

Generally, an agency's profit margin is the difference between what it really should be providing to clients and what it can get away with providing.

The reason for this is twofold. First, agencies have gotten too process oriented. Process takes time and resources. In other words, it's expensive. And process doesn't do much for the client. It's mostly about keeping the agency systems and people on track.

The second reason is client incompetence. Agencies are often forced to deal with low level functionaries who give the agency bad direction, incorrect information, or are guilty of inept decision-making. This leads to endless meetings and limitless rounds of strategic, creative, and media wheel-spinning.

When the real decision makers finally get a look at the result, the agency often looks like it has spent mountains of time and money foolishly.

One of the biggest problems agencies have when it comes to calculating a fair compensation model is projecting how many complicators are going to interpose themselves between them and the real decision makers.

One of the biggest problems clients have in comprehending why agency costs are so high is understanding how much agency time they waste needlessly.

In the long run, the only unique asset an agency has to sell is creativity. Clients can get everything else elsewhere, usually for less. If your creative contribution is not highly valued by your client, you have no compensation leverage.

In other words, agencies should strive to do good creative work if for no other reason than it is good for the bottom line.

July 24, 2014

Why Your Social Media Strategy Sucks

You've probably noticed that about 93% of all TV commercials are lousy.

And so are about the same percent of movies, TV shows, books, songs, and paintings.

If you think all this crappy stuff is around because people aren't trying very hard, you're wrong. The reason is actually quite simple: Producing good stuff is really, really hard. And there are very few people who can do it.

Nobody sets out to create a crappy TV spot or a crappy book or a crappy song. They just turn out that way.

Creative talent is a very rare and very precious commodity. Not everyone has it. As a matter of fact, hardly anyone has it.

That's why really good creative people -- whether singers, writers, actors, or even ad bozos -- often make a lot of money.

Fortunately, most of us don't think of ourselves as singers, writers, painters and actors. So the quantity of really shitty "art" is self-limiting. This is not the case, however, in social media.

Everyone thinks he's a capable social media creator. Believe it or not, there are actually more English language blogs in the world than there are English language native speakers.

If you're wondering why your blog, or your Facebook page, or your Twitter feed, or your "compelling" content, or your "viral" video is laying around like a dead lox, it's not hard to figure. In order to be interesting, social media requires creativity -- just like movies, TV shows, music, and writing.

Without creativity, nobody gives a shit. The world is full of dull opinions, almost-funny banter, and dreary monographs.

Your social media strategy doesn't suck because Facebook, Twitter, YouTube and blogs can't reach people. It sucks because you're stuffing it with crap that no one is interested in.

Creativity is the ability to be interesting, funny, or different. It's easy to be interesting, funny or different at lunch. It's a thousand times more difficult to do it on a page.

Very few people are capable of this. If you want to have one of the rare social media endeavors that actually makes a difference, you better find yourself someone to execute it who is highly creative.

And, take my word for it, it ain't that social media guy with the Powerpoint.

July 23, 2014

Twitter Giving Up On Social Media Marketing?

Here at The Ketel One Executive Center of The Ad Contrarian Global Headquarters, we've been saying for some time that:
a) The delusion of social media marketing is rapidly evaporating
b) Social media sites are morphing into channels for carrying traditional paid advertising as fast as they possibly can
There are three reasons for this
1) Consumers have shown approximately zero interest in having "conversations about brands"
2) Consumers have shown approximately zero interest in having "conversations about brands"
3) Did I mention that consumers have shown approximately zero interest in having "conversations about brands?"
If you need proof of this, click on over to your Facebook page and see if you can find a conversation about a brand. What you'll find is a festival of paid advertising.

While the dim bulbs in the marketing industry spent 5 years exhorting us to "join the conversation" actual human beings were thinking "what fucking conversation?"

So the lovely fantasy of consumers carrying our marketing water for us by going online to extol the virtues of our mittens, mayonnaise, and motor oil has gone all sour.

Facebook saw the light and stopped pretending to be a vehicle for social media marketing. They became a born-again old-school paid advertising channel. As one Facebook executive put it to Time magazine...
“…if businesses want to make sure that people see their content the best strategy is, and always has been, paid advertising.”
If I may take the liberty of translating the above sentence, here's what the Facebook guy was trying to say:
"We can't make a nickel off this social media bullshit, but we can have a nice juicy steak dinner selling some good ol' fashioned paid ads."
Of course Facebook's rival, Twitter, is drooling.

Having seen what Facebook's stock price did once Facebook stopped living in new-age never-never-land and started seriously selling real ads, Twitter wants a slice.

But first they have to figure out how to convince people -- especially marketers and investors -- that they are not what they said they were.

The problem is that marketers and investors love the idea of social media but hate the reality of it. They want to see real money from real ad sales. Not hot air about "conversations."

And so Twitter is now on a mission to convince the world that they are not really a social network.

According to The Wall Street Journal last week...
"Executives hope to shift the perception of Twitter from a social network to a broadcast platform"
A broadcast platform? But hold it. Isn't broadcast dead?

The only question now is how long it will take the cement-heads in agencies and marketing departments -- who are still gorging on empty calories at the social media buffet -- to figure out what the hell is going on.

July 21, 2014

Technology And Consumer Behavior

Last week I gave a talk at a national real estate conference. What do I know about real estate? As I told the conference, the only real estate transaction I ever made a nickel on was when my house burned down. 

Putting the talk together, however, gave me an opportunity to clarify some thoughts I've had about the relationship between technology and consumer behavior. Here's an edited excerpt from the talk:

Technology has changed our lives. It has changed the way we live, the way we do business… it has brought us new and useful tools for our companies, and it has simplified a lot of our daunting tasks.

But there is an untold story of the digital age. It is the remarkable degree to which consumer behavior has remained stable in light of a revolution in technology, communication, and media.

Technology has had an enormous impact on our industries and our companies. And we naturally assume that it has had a similar impact on consumer behavior. I'm not so sure. Just because technology has changed what we do so much, doesn't mean it has changed what they do so much.

Marketers are resolutely attached to the belief that new technology invariably leads to large-scale disruptions in consumer behavior. My purpose this morning is to present you with a different point of view. 

In addition to my advertising career, I also spent a few years as a science teacher, and one year as a special assistant to the Executive Director of the California Academy of Sciences.

Being around science practitioners gave me a healthy repect for the difference between a fact and an opinion. So for this talk we are going to dispense with the immoderate opinions and assertions of many in my industry, and talk about facts.

Here are 7 marketing and media facts you may find interesting:
1. E-commerce in the US accounted for only 6% percent of total retail sales in the 1st quarter of this year. 94% of retail activity is still done in a store.

2. Contrary to the confident predictions of all our media experts, over the past few years TV viewing has reached its highest point in history.

3. The average American spends over 7 times as much time watching TV as she does on line.

4. Only 8% of video viewing is playback from a video recorder. 92% of TV viewing is done live.

5. Since 2011, when mobile devices like tablets and smart phone took off, the media device that has suffered the worst decline is not TV or radio, it is the personal computer. In fact, between 2011 and 2013 time spent online with personal computers dropped at 7 times the rate of TV.

6. Notwithstanding all the hype about mobile commerce, in 2013 commerce on a smart phone accounted for less than ¼ of 1% of total retail activity.

7. Despite all the hyperventilating about the web replacing television, 97% of all video viewing is still done on a TV. Only 3% is done online.
So what are we to make of these facts?

The conclusion I have drawn — one that I have come to often in my career — is that marketers almost always overestimate consumers' appetite for new things, and underestimate the power of traditional consumer behavior. 
And now for the sales pitch. If you're having a sales meeting, conference, or other business event, and you need some speakers that won't bore the shit out of your attendees with the same old bullshit, Type A can help. Here are some "reviews" from last week's talk:
If you want info about having Type A at your event, contact us here. Thanks.

July 16, 2014

The Dumbest People On Earth?

Just when you think the online advertising industry can't get any more absurd, they prove once again how groundbreakingly awesome they are.

The current buffoonery is over "viewability."

You see, twenty years into online advertising, advertisers are finally getting their heads out of their behinds and realizing that about half the ads they have been paying for are not viewable.

We're not talking here about the 99.9% of online ads that are ignored because they are so fucking ugly and stupid. We're talking about 50% of all ads that are supposed to appear on a page but don't.

Even if someone was dumb enough to want to look at these things they can't because they ain't there.

Of course, the online publishing industry is shocked... shocked I tell you!
You wanted your ads to be VIEWABLE? Oh, why didn't you say so? We thought you just wanted to pay us for...well, for being like so hip and cutting edge and totally techno and having like metrics and data and shit.
So now the morons who have been buying this crap for 20 years are playing hardball with the publishers. They are insisting that their ads be viewable. Next these bedwetters will be going to restaurants insisting that their meals be edible. Whiners.

But here's the best part.

The Media Ratings Council (whoever the hell they are) has an official standard for "viewability." If half the pixels of an ad are viewable for one continuous second, the ad is deemed to be "Officially Viewable."

I love the "one continuous second" thing. Because, you know, if half the pixels are viewable for, like, two halves of a second, that shit just ain't gonna work. But one continuous second, well, that's advertising gold!

Here's what an agency research genius has to say about this:
"...calling for more than one second in-view would be difficult to execute, potentially pushing the pendulum too far..."
Oh no, we wouldn't want to push that pendulum past one second. Someone might actually notice the fucking thing.

Amazingly, this quote appears in an article entitled "The Viewability Debate: Being Seen Is Good, but One Second Isn't Enough" -- written by the same person who is afraid to push the pendulum past one second. Someone is very confused.

Well, whatever the agency and research dimwits have to say, the bottom line is this -- you have to give the online advertising sales industry credit. It takes an astounding degree of artistry and talent to grow at double digit rates when you're selling something that is:
Either the people selling this stuff are the smartest people on earth, or the people buying it are the dumbest.

July 07, 2014

The 7th Anniversary Edition

Stretching 10 Days Worth Of Content Into 7 Years
This week marks the 7th anniversary of this blog. I never thought it would last this long. As a matter of fact, after about 10 days I had said just about everything I wanted to say.

But it is a testament to the never-ending silliness of the ad industry that after 7 years I still haven't run out of things to make fun of.

Remarkably, the blog is more popular than ever, and I'm enjoying writing it more than ever.

Since this is an anniversary, and since I'm going to take a little time off (more about that below) I am going to take the liberty of rambling a little today.

One Regret
I do have one regret about this blog. There are times when I embarrass people. I don't like doing that.

When I'm taking shots at articles I've read or things I've seen or heard, I try never to mention the names of the people responsible (except the the high and mighty.)  However, because I provide links, there is no secret whom I'm talking about.

I feel lousy when people lambaste my articles and I'm sure the people I rail against feel similarly. Unfortunately when you're writing commentary there is no power without specificity, and so I need to be specific in what I write.

I'm sure I've hurt some feelings and I want the people who have been the target of my sometimes immoderate pronouncements to know there is nothing personal in any of it.

Common Sense Confronts Greed And Ego
About a year ago, when I retired from the agency business, I wrote...
It's supposed to be a bittersweet occasion. But it's not. It's easy. The art  of advertising is still interesting, but the agency business has lost its appeal.
My commitment to sloth and revelry retirement from the agency business was challenged recently when a very attractive offer came my way.

The ceo of a wonderful agency asked me to be chairman of their NY office. I wouldn't  have to move from San Francisco and I would get some ownership in the company.

I was flattered. Then I was flummoxed.

The agency in question has been very successful and I love New York (note to self: that might make a good campaign idea!) and it would allow me the opportunity to spend more time there.

And then reality reared its ugly head. I escaped from the agency business with my life. I just couldn't see myself turning myself back in.

It's obvious from all the writing and speaking I do about advertising that the subject still interests me. But the agency business doesn't.

It's become too difficult and too unnecessarily complicated for a simple mind like mine.

I was having dinner with a friend a few weeks ago and he is in a similar position. He had a successful career in the sports world and is now doing consulting. Because of his expertise he gets a lot of gigs doing "expert commentary" on TV and in newspapers.

We agreed that one of the wonderful things about our current situation is that for the first time in our careers we can say exactly what we believe and not have to sugar coat it or give a damn about pissing anyone off.

It's fun.

Taking A Break
I've developed one of those annoying repetitive stress things in my wrist and apparently the only way to get rid of it is to stay away from the keyboard for a while. So I'll be off the grid and traveling for a couple of weeks.

While I'm gone, please don't let the silliness die.

July 02, 2014

The Obnoxious Belief In The Irrepressible Spirit

I'm getting real tired of reading opinion pieces and watching videos of rich, famous people telling us to do what we love. 

I'm sick of their smug assumption that their one-in-a-million success was the result of their irrepressible spirit. And that if we all just had the character and determination to follow our passions like they did, we'd be fabulous, too.

Most success is contingent. Either you're born into the lucky sperm club, or you get a break somewhere or, as in my case, one chance encounter changes your life.

But this bullshit that there is a place for all of us in the pantheon of success if we just believe in ourselves and don't compromise and pursue our passion gives me a real pain in the ass.

It's easy to say that in hindsight, when you're sitting on millions, and everybody knows your name.

It's a little different when you're a checker at Walmart and you have kids to support. Yeah, just quit that stupid job and pursue your singing career. You want to be a football player? Sure, no problem. Just believe in yourself.

You know what I'd like. I'd like to hear from all the talented, hard-working people who followed their passions and failed. I want to hear from the directors who are changing tires. And the writers who are cutting hair. Let's find out how they feel.

For every self-satisfied loudmouth selling this bullshit there are a thousand people just as capable and just as dedicated who failed.

As far as I'm concerned, all this amounts to is self-satisfied big shots patting themselves on the back and lecturing us on our lack of initiative.

You want to devote your life to doing what you love? Me too. Unfortunately I haven't found anybody willing to pay me to drink beer and do crosswords.