IMKTG REPORT November 26 2002

al berrios IMKTG REPORT 11.26.02: Exclusive Conference Analyses

THIS WEEK'S CONTENTS ARE:
[1] JUST SAY IT: Conference Frenzy
[2] BRANDSTRATEGY: Surviving as a Content Company
[3] CONSUMERFOCUS: An Analysis of Consumer Perception
[4] MEDIA: OOH Evolves?
[5] MANAGEMENT: Sell Planning: Support or Waste of Money?

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[1] JUST SAY IT: Conference Frenzy

>> Ken Auletta, Communications Columnist, The New Yorker, interviewing Richard Parsons, CEO, AOL Time Warner: "What do you tell an executive that comes to you about their worthless stock options?" Parsons: "Get over it."

Good morning execs,

Last week was a flurry of activity, from ad-tech (exhibit hall was satisfactory and looked bigger at smaller venue than prior years), American Advertising Federation's Achievement Awards (very good. Ain't got nothin' to do, hang out at the Waldorf and eavesdrop on some convos… very interesting), a lecture in banking by Harvard Club of NY (satisfactory, and if you ain't a member [a.k.a. Harvard alum], expect to get treated like phlegm on the street), a Consulting Summit Conference (researched it. Turner's Jamie Kellner believes there are too many consultants that don't provide value), Economic Seminar at U. of Michigan (read about it and wait until I complete my study on consumer spending… economists don't have a friggin' clue!), and Variety's Content + Commerce Seminar (excellent, where I realized that the only reason smaller companies don't ever get big clients is because once your company reaches a certain point in service providing, everyone hires you AND your competitors, but it's OK, since you're all friends anyway).

This week's REPORT is my analysis of everything that happened last week, so there won't be as many READ MORE links. Some of it is also a little abstract as I attempt to discuss new ideas to overcome strategic challenges. Hope you find it useful.

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[2] BRANDSTRATEGY: Surviving as a Content Company

It came from Richard Parson's own mouth: AOL is a content company. But what kind of growth strategy can the ultimate content company implement successfully? The three biggest challenges I see are 1) generating perceivable value for their content at every level of the "AOL system", 2) leveraging their entire system, pushing content securely (in Parson's own words) so that in the grand scheme, spending $200 million on a project is no biggie (a.k.a. costs are amortized better) and 3) making their ad sales structure work with advertisers to enhance their audience's experience with AOL brands, as opposed to selling for the sake of selling.

BOTTOM LINE: What's the "AOL system"? In my point of view, no other company is in the position to get ideas for content from a comic book division (DC), for a feature film (from WB/New Line), which they can push to their premium cable service or VOD (HBO/AOL), then regular cable (Turner), then network (theWB), then merchandise (like music from WMG or special edition mags from Time Inc.), and ultimately… Broadway?! That's right, the final frontier for content is now the stage, where a $10 million investment may yield 10 times more. So, how would this system be sold to public? What about a subscription bundling a package of these distribution channels with a limited amount of content? If anyone can change consumer media consumption habits, it's certainly AOLTW. But don't fret if you're not AOL's size. Companies like Amazon, Starbucks and Netflix have become wildly successful by altering the way consumers were used to doing something. So, before you consider spending several million bucks on yelling really loud, maybe you may want to reconsider spending it on changing how they see your category.

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[3] CONSUMERFOCUS: An Analysis of Consumer Perception

A brand is born. Consumers start noticing it. A few first become curious and want to engage in an experience with the brand. Perception is born. From these first few, analysis sums up the value of this brand. Value is perceived from the brand's a) quality, b) innovation, c) utility, d) satisfaction, e) convenience f) recommendations. These traits evolve into the brand's promise. If the experience with this brand fails to meet its brand promise, perception will be negative. And vice versa.

BOTTOM LINE: Thus, perception can potentially be altered by a) generating a successful experience from the very first engagement (which would require you investing seriously into making your product/service good, as opposed to crappy), b) altering analysis (which would require you to monitor and manipulate what others say about your product/service, including the media, investors, and ultimately, consumers), c) fulfillment of a consumer perception of value (which would require your product/service to not just be good, but useful, new, and easy to use), d) size of brand impressions (frequency + reach, but also, quite literally, the size of the impression, executed by effective marketing communications).

After hundreds of years in existence and over a century of standardized practices, someone somewhere said, "Well, what am I getting for my money?" As Nielsen, Arbitron, and the OAAA slowly inch towards standardized metrics, so that advertisers understand the real value of outdoor advertising, the owners of the medium are creating newer opportunities for advertisers, that are bigger and better looking and don't necessarily follow the billboard design manual. But will they influence, motivate, or cause reactions from consumers?

BOTTOM LINE: According to a global director of media for a very large apparel company with 90% consumer awareness, it's not always about measuring the results. Consumers will ultimately respond if the experience with the brand's communication is good. This company spends over a hundred million dollars annually to tell their brand's story through sporting events, documentaries, and a whole lot of outdoor advertising, so obviously, advertisers who care about measuring and accountability must be retarded or something, since this company has achieved almost $3 billion in revenue. So what gives with this whole accountability lunacy? If OOH can survive for this long without standardized evidence of what it can make consumers do, why all the pressure on the internet? Why all the pressure of new TV shows? Why all the pressure, period? Eventually, as outdoor advertisers discover new spaces where "potential consumers" aggregate due to no choice of their own (trains, bathrooms, schools), you will see the medium evolve to an excessive clutter, then ultimately to an unnoticeable element of everyday life, at which time, metrics will be available.

If media sellers truly had client interests in mind, why does ad clutter exist? With all the recent articles about how aggressive advertising has become (excessive product placements, spam all over the place, and more ads on TV than shows), clutter has become a very serious concern for marketers looking to reach consumers with increasingly splintered media habits, segments, and perceptions of our brands. But why has media allowed advertisers to reach a point of clutter? Why is a "cross-platform" sell another term for "buy the crap with the good"?

BOTTOM LINE: Sell planning is as much a valuable service as media planning. It strives to present all logical opportunities, based on the media company's understanding of their own audience, in a package that hopefully yields the most results. Sell planning is important not just to move inventory, but it makes media accountable for their product. Nevertheless, when was the last time you actually read that media was selected on the basis of objective analysis, as opposed to relationships, the need to "get rid of" inventory, or some sort of barter deal? If planning is based on relationships, not objectivity, how can a client truly realize value from their media investments? But even worse, when pressure is applied to produce results from top to bottom, what's ultimately the point of sell planning, if media caves in to client demand, regardless of their own invaluable insights into their audience? As I'm sure you will never hear from your agencies, leave the creative, media, and insights to the pros, while you just make sure the product gets into the customer's hands. After all, that's why you hired them in the first place, because you really aren't expected to manage it all by yourself.

Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

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