It’s all about quality data

As I go about speaking with groups and broadcasting clients, the topic always eventually turns to advertising money and the struggle broadcast sales people have with turning the online corner. This is a complex matter, but the principal problem is that they are two entirely different animals. Broadcasting’s golden egg-laying goose is mass marketing; the internet is one-to-one. Push tactics rule mass marketing, because the audience is passive. Pull tactics work online, because the audience is involved and very much in control.

To the extent that media companies try to turn the web into a top-down distribution system, they run smack dab into this dichotomy, and therein lies the rub. Moreover, ad agencies like things the way they are, so there’s little energy at the local level for change. This is why the most successful online ad deals for local broadcasters are “convergence packages,” where the advertiser gets on-air ads in addition to online. These are actually broadcast sales contracts, regardless of how they’re written. And until account execs can come up with a more convincing story, advertisers (and especially agencies) will continue to demand reach/frequency evidence that their ads are exposed to a mass.

And online advertising, especially at the local level, will continue to flounder compared to over-the-air advertising.

This came up yesterday at a panel in New York hosted by the Advertising Research Foundation. The subject was the eventual melding of online and TV. According to MediaPost’s Online Media Daily, Joanne Bradford, corporate vice president of global sales and trade marketing and chief media revenue officer for Microsoft, said that TV isn’t likely to dominate the smaller, fledgling internet advertising market.

“The industry is not at a place where you can just turn over what we do to television,” she said, stressing that online ad sales are driven by data. “It’s a very different sell–it’s bought in a different way; the back-end reporting structure is different.”

Still, Bradford noted that online agencies’ capacity to place premium inventory still lags far behind demand–meaning that a huge pot of ad dollars are being lost every year. “Until we’re at the place that we have operational scale and ease of use as an industry, we’re always going to be behind,” Bradford warned, concluding: “[TV’s] not as efficient as we are, but we don’t have the scale that they do.”

This is a big problem for local television, because our broadcast signal provides the scale, so why worry about anything else? Well, first of all, that scale is slipping, but more importantly, if we don’t attack the online issue with vigor, we’ll turn the business over to outsiders who are better armed than we are.

If a local television station is to truly reach its online ad potential, I think a couple of things are going to have to happen. One, the station must restructure its organizational chart to place its internet business efforts on the same line as its broadcast signal. This, I firmly believe, is the only way to “lift” the web above its second-class status inside the building. If people inside the station think the web is an adjunct or extension of the station, it can only result in frustration and missed opportunities.

Two, the onus is on the media company — not the advertising community — to educate advertisers about the differences between mass marketing and data-driven marketing. Right now, agencies are only looking for two things in the data that’s available: how many and how often — the twin gods of mass marketing. But page views and unique visitors are fool’s gold, because — as Ms. Bradford notes above — we just don’t have the scale to make the jump from on-air to online. We’ll never reach our potential with these, because smart agency people will look at them and simply shrug their shoulders.

Local ad agencies have a lot to lose with mass marketing on the wane, so they’re naturally going to be resistant to change. By falling into the page views and unique visitors trap, we’re playing their game instead of making a convincing case for our own. Local ad agencies stand in the way of progress, and account execs with a good story to tell are going to have to find a way to speak past them to the advertisers themselves. This is a significant challenge, but overcoming such is what sales is all about anyway.

It’s silly to think that businesses with products to sell don’t want to reach MORE customers or potential customers, so nobody is suggesting that the goals of reach and frequency are irrelevant to the new paradigm. The issue is in the quality of the reach and frequency, something the internet can deliver with far greater precision and at less cost than the scattergun approach of mass marketing. Local media companies that invest in data will find that this is the magic bullet they’ve been seeking in not only the setting of rates but also in helping them sell their story to advertisers.

But the measurement that I think is going to change everything is engagement — the involvement of users with commercial information. When we create ways to tie the cost of ads to this, everybody will win. True engagement may only come through pull tactics, and that’s why it’s so important for local media companies to get into the unbundled media business of which I’ve written extensively.

UPDATE BONUS: Steve Hall over at Adrants defines “engagement” while the ad industry struggles for an official definition.

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