ANA Marketing Musings

NUDG: What Really Happened

I appreciate the perspective MediaPost’s Real Media Riffs had to share today about yesterday’s meeting of the Network Upfront Discussion Group (NUDG). Having been one of the principal organizers of NUDG, I am keenly interested in the diverse opinions about the Upfront process.

I was surprised by MediaPost’s characterization that the talks "failed". Did the marketplace truly expect that this meeting was going to bring wholesale changes to the Upfront process? If so, then your expectations were, quite frankly, unreasonable.

The purpose of the meeting was to talk and share ideas about the alternative approaches to the "closing bell" and alternative timing of the Upfront negotiations -- no more / no less. Put into a historical context, this is a major step forward. The industry, in recent years, has not collaborated to discuss anything. So to bring the industry together to have a rational discussion was a significant -- and a historical step. And we did take a stab at evaluating alternatives. The facilitated environment permitted everyone who had something to say -- to say their peace. I believe that took place. I, for one, learned a few things along the way that represented legitimate, logical arguments as to why certain alternatives would be impractical or impossible to implement. I know others in the room felt similarly.

Say what you will about the price setting process but the reality is, is that the Upfront is a free and open market. If you don't like the price, don't buy. There are other media alternatives available to marketers. Isn't this what we heard at the Madison and Vine conference earlier this year -- that marketers can and will reallocate dollars away from television if the price or delivery don't meet expectations? In the NUDG meeting, pricing discussions were off the table for obvious antitrust considerations. But the point that was made is that certain marketers possess the savvy, the tools and the discipline to leverage the Upfront process to their best possible advantage -- or walk away and decide on alternative paths as they see fit.

In conclusion, the NUDG meeting was a productive exchange. I hope it sets a precedent for how the industry can come together and have an efficient dialogue about our mutual issues and opportunities.

Bob

A Renewal in Client-Agency Relations

Today, we held our Agency Relations Forum - a gathering of ANA members to discuss and debate the state of the client-agency relationship. By all accounts, that relationship is faring pretty well. Our friends at Fed Ex identified how they'e been able to leverage their superb 15 year partnership with BBDO. Kraft indicated that adherence to key principles and focus on continuous improvement have served them well. Even ANA's proprietary research flagged more buoyancy than I would have imagined.

It seems that advertisers and agencies - despite a long spate of high profile historical issues - are learning how to work with each other. This "renewal" is seemingly providing marketers with the external "consultant" it needs to flourish in this increasingly complex communications environment.

With all of this being said, there is still a lot of industry grumbling - whether it's about procurement departments, agency consultants or transparency concerns. Nevertheless, it was "refreshing" to hear that real progress is being made with marketers most valued ally - the agency.  

Let's hope this marks the long-awaited turnaround in this historically most treasured relationship. Time will tell, but having just returned from the 4A's Management Conference in South Beach last week, it seems that everyone is feeling better about the state of affairs.

Great (Not Just Good) Times Are Ahead for Marketers

The advertising and marketing communities are at a most interesting juncture as we catapult into the second half of 2004.By all measures, the economy is booming. Pure GDP growth is averaging 4-5%, inflation is relatively tame, productivity is healthy, job growth is finally kicking in and corporate profits are surging. We should all feel great, right?
 
Strangely, however, there appears to be a current of caution and hesitancy. Perhaps it's the pessimism emanating from the Iraq war, or the increasingly negative tone of the presidential campaign or simple wariness from the advertising recession. But by now, I would have expected far more buoyancy and optimism.
 
No matter. Call me the eternal optimist but I do believe great (not good) times are ahead. There is clearly a head of steam that's building - and I think that is superb news for all advertisers and marketers. What impresses me is what I'll call, for the moment, "marketing investment discipline". Yes, budgets are expanding and there is clearly more money devoted to brand building and improving customer touch points. But these investments are being done in a far more controlled and "scientific" way as marketers seek to optimize business performance.
 
Perhaps it's a reaction to the excesses of the past but accountability is truly beginning to resonate - and as Martha might say, "this is a good thing". Marketing investments are far more targeted and focused than ever before - and that will only increase over time. As media tools become more "addressable", marketers will be channeling their budgets against those vehicles that reach specific target audiences  - like pet lovers, or parents with babies, or male beer drinkers.
 
The "de-massing" of media has taken place. Marketers are beginning to look at untargeted spending as wasteful and unproductive. And marketers are increasing their focus at using media that will permit greater measurement of business performance. That's why the Internet is becoming the media of increasing choice. That's why addressable television and "enhanced TV are gaining favor. That's why the radio industry is pursuing accountability with a vengeance. That's why the ANA and AAAA are pushing Ad ID to track all media assets. That's why procurement departments are evaluating agency budgets. Yes, there is quite a bit going on that's going to benefit all marketers in the near and long term.
 
You know John Wanamaker; we may yet figure out which half of our advertising spending is wasted. And we may have that figured out real soon.

ANA/AAAA Take On The Upfront

This morning, April 8th, the ANA and AAAA announced the formation of the Network Upfront Discussion Group (NUDG). The purpose of NUDG is to take a pragmatic, realistic look at the Upfront process and determine if it can become more efficient and productive. The ANA and AAAA have invited executives from the media, agencies, association, legal and advertiser communities to participate in this discussion. Our first meeting is scheduled for Thursday, April 29 in New York City.

Why are we doing this? The answer is clear -- there is a substantial level of dissatisfaction with the process. This was affirmed by a survey of 165 member companies of the ANA - released at the ANA's Television Advertising Forum on March 10. Accordingly, we felt it necessary to take a "lean-forward" stance to see if there was anything we could do to alleviate areas of dissatisfaction. That's it - plain and simple.

My guess is that there is going to be a lot of nervousness and emotion about this discussion group. There shouldn't be. The Upfront has been around for decades and will likely exist for more to come. But that longevity doesn't mean that the process can't be improved. We all know it can - so why not try. If we bury our heads in the sand to preserve the status quo, then we will ignore what the marketplace is suggesting and we will never realize the progress that the marketplace is demanding.

So, why not take the time and have a thorough vetting of some things that plague the current Upfront process. Let everyone put their thoughts on the table and simply see if there are some reasonable, rational changes that should be made. If we can do that, we will have accomplished quite a bit. We will have also established a working platform that will hopefully allow all players in the marketing spectrum to have productive conversations about the future of our industry - something the ANA would be pleased to facilitate, as appropriate.

Let's not over think this. Let's not let speculation run wild. Let's keep our expectations in check. You know what. Let's just get everybody together to talk and see what happens.

NAB Responsible Programming Taskforce

The National Association of Broadcasters said today it would form a task force to study responsible programming and the possibility of implementing a code of conduct, according to this MediaWeek story.

The article reports that the announcement came one day after some 350 broadcasters gathered in Washington and heard speakers, including Federal Communications Commission Chairman Michael Powell, urge for an industrywide code of conduct. The last such code was abandoned in 1982 after the Reagan administration raised antitrust concerns.

I think that establishing a code of conduct for the networks is a superb idea. It provides a general standard and framework that each network can use to benchmark its program content. However, there still is a big hole for the television medium -- what to do about cable channel content? By its very nature, some cable content will cross the line for what can be considered decent. Net, households with kids and cable will continue to be exposed to content that is not necessarily suitable for younger audiences. The burden, therefore, will reside with parents who will need to keep up the battle to restrict or block certain channels. Hopefully, we can figure out how to get the V-Chip into play so that parents can lean on technology to help them out when they are not there with their kids.

It should be interesting to watch this unfold.