In a new book, the Carat North America CEO tells us to follow the money, but it may take some time to determine the exchange rates.
For the record, I've been a fan of David Verklin ever since an ad:tech New York show a few years back. At an event dominated by the converted, he had the stones to squash the bubbling self adulation evident at our industry conferences, and tell us what we really needed to hear. To paraphrase:
"Let me tell you why most ad agencies, especially the large media shops, don’t recommend shifting dollars to the Internet to match consumption and time spent. We make less money planning and buying online than other media. End of story.”
Cue gasps and murmurs. An icy bucket of water was just thrown on our insular back-slap fest. We believers in the purity of our cause stood slack-jawed and defiant.
“What the…isn’t logic on our side? Hey, I can’t quite make out that odd shape in the corner. Oh, it’s the elephant in the room.”
In his new book, "Watch This. Listen Up. Click Here: Inside the $300 Billion Business Behind the Media you Constantly Consume," co-authored with Bernice Kanner, Mr. Verklin continues delivering insightful doses of reality that everyone in the advertising/media business should commit to memory. He does a masterful job in detailing the seismic re-configuring of each major media outlet.
However, as he leads us to the edge of "what's next," he leaves us a little hungry for understanding the financial ramifications on how media exposure will be bought and sold in the future.
Comprehensive
For those of us lucky enough to have seen David Verklin speak, the central theme of the book will be familiar. Technology has already started a thorough upheaval of the marketing landscape in which targeted messages will be delivered when and where valued prospects are most receptive and most likely to take action (action covering a broad spectrum of post-exposure pursuits), eliminating the "PolyGrip" wasted eyeballs dilemma.
In particular, he defends the worth of cross-channel, collaborative execution coupled with real-time data mining to glean the true measure of brand involvement.
In support of these positions, Mr. Verklin, along with his co-author, the late Bernice Kanner, provide an exhaustive history of the subtle dance between content and commerce across TV, Print, Out-of-Home, Radio, Newspaper and Digital media.
As an old media planner, I enjoyed the exposure of counting and methodology inaccuracies among the syndicated audience reporting providers. There are also impressive treatments on video games, video on demand (VOD) and mobile platforms, as well as the obligatory discourse on direct mail, tele-marketing, event and sponsorship programs.
This book should be required reading for any collegiate marketing course. Not just because it leverages statistics judiciously, but also because of its focus on the practical rather than the theoretical.
Interestingly, some of the more compelling material delves into what have largely been non-paid message environments, e.g., Blogging and Social Networks. Mr. Verklin correctly lampoons the bumbling giants in corporate marketing who attempted (and still attempt) less-than transparent "objective" postings. And he genuinely embraces the open-source culture of user-generated content, juxtaposing community brand evangelism against the show-pony mentality of traditional mass advertising.
Cautious
And this is precisely why I expected a little more granularity, speculation… even a recommendation, on how media should be purchased in five years from a man who buys billion of dollars of ad exposure annually.
We can all agree to the continued fragmentation of audiences, media and methods, with increasingly refined segmentation, but will pricing structures keep pace? Can't the collective wisdom of our industry produce options other than the polar opposites of CPM and CPC?
We may indeed be headed toward fishing in several well-stocked barrels negotiated at a Cost Per Hundred something. But, will there be enough sophistication, for example, to put a dollar amount on latent, long-tail behavior? Should the video widget that you got off one of your Facebook friends be priced at a cost per download or cost per use/post/share? I would like to have read about a Carat client that had asked the agency to explore new alternative media buying/selling parameters, and/or threshold tolerances for moving in that direction.
Also, I would welcome Mr. Verklin's learned opinion on whether media outlets would own up to a level of accountability that's reflected in a "cost per engagement" formula that advertisers demand? I see significant challenges in this area.
A case in point: this past April, I attended a pre-upfront half day presentation by one of the major TV networks. Apart from the in-house research exec claiming DVR owners actually do watch ads, it was a productive afternoon… right up until the dialogue turned to pricing. The debate, which got a little testy, can be encapsulated in the following exchange, (again, I'm paraphrasing):
Client Buyer: "I've seen some interesting ideas today, including some clever extensions from TV programming to their respective websites. But at the end of the day, I have to fill databases that I most cost-effectively gather through my company's websites. Why shouldn't I expect you (the network) to price downstream activity outside of the vehicles you host into the opportunity? Or are you glued to the same CPM equation we've bought for years?"
Network Seller: "We're willing to have frank conversations on this topic, but I don't think you'll see us change pricing strategy anytime soon."
Yep, still trying to retro-fit new behavior into old economics. Keep that breakthrough on hold for a little longer.
Convincing
I applaud David Verklin for so openly tilting at the windmills under which he operates. And he presents an airtight case for the inevitable uprooting of media and marketing conventions to those who don't live and breathe digital media everyday.
Perhaps he's saving the issue of "How will all this new stuff be paid for?" as a follow up. The money's got to go somewhere. Maybe we can persuade Mr. Verklin to address that in his next book.
Larry Everling is the president of Grady Rose Consulting. Read full bio.