Small Media Agencies Far from a Dying Breed (UPDATED)

Last week's news about KSL Media going bankrupt sent one trade publication jumping to conclusions.  AdAge.com blared:  "KSL Bankruptcy Calls Into Question Marketer Appetite for Indie Media Shops".  The gist of the story was that KSL had to go out of business because it was losing clients to big, holding-company media agencies.  Indeed, Bacardi left KSL for Mindshare this year.  Could one client loss really kill a small media agency?

If only it were just $8,000

It's actually a much more dramatic story:  Former KSL controller Geoffrey Charness is accused of embezzling tens of millions of dollars.  (We hasten to add he's innocent until proven guilty.)

It’s no crime, however, to be an "indie media shop".  Independent media agencies serve clients that the big agencies overlook, and do it well.

There's no question that scale counts when negotiating low CPMs on a big budget.  But scale isn't everything in media.  

“Media” and “Creative” aren’t mutually exclusive

Media has become more creative in recent years, driven by the development of hundreds of new ways for brands and consumers to connect with one another.  In other words, media isn't just about scale, it's about innovation.  

Large media agencies have no more of a monopoly on innovation than do large creative agencies.  It's interesting to note that TurboTax recently awarded its creative account to Wieden + Kennedy -- and then, two months later, also gave them the media planning and buying assignment.

We'll find out how the KSL-embezzlement-bankruptcy storyline plays out over the next few weeks.  It won't be pretty for the employees who faithfully executed their duties every day, coming up with ideas to build their clients' businesses.

But it’s safe to say that we'll still have "indie media shops" far into the future, continuing to build clients' businesses in ways we can't even imagine.

UPDATED 11 October 2013:

The plot thickens.  Today MediaPost is reporting that KSL Media loaned millions of dollars to senior execs, even in its waning days.

Advertising Jumps the Shark, Gets Back on Track

Does content deliver advertising or does advertising deliver content?

Joe Mandese at MediaPost has the answer for you, in a piece headlined “Advertising Jumps The Shark: Becomes Conduit For Content”.  

But first let’s get through that headline.

Jumping the Shark

Numerous readers pointed out in the comments section that the headline misused the term “jump the shark”.  Any student of pop culture knows the story:  On the 1970s sitcom Happy Days, Fonzie water skis over a shark, a moment now seen as the point where the show lost its original purpose – a fond look back at the 1950s – and got just plain silly.

Let’s first admit that the advertising industry has jumped the shark many more times than Fonzie, before or since.  We’ve jumped the shark via pointless line extensions, bad strategies, failed campaigns and poor planning.  Mea culpa.

Conduit for Content

In this case, the alleged shark jump is the launch of a new digital advertising platform that pulls existing Internet content into online ads.  It seems like a simple concept – link ads and content – but there’s a bit more involved.

The platform’s purveyor, Kontera, claims to be able to identify the most relevant content and serve it in web display, social and mobile ads.  That’s a bit more complicated than a shark jump – and more revolutionary.

3 Reasons Why it Matters

Mandese’s right, this is an important development the entire advertising industry should watch.

1.  It makes advertising useful, informative and/or entertaining.  These are the three things audiences seek in any medium.  For some reason we’ve been relearning that lesson the hard way in the digital advertising world.  In this case, Kontera claims to be supplying content that’s already popular, and hence should make ads more relevant.

 
2.     It adds sanity to online advertising.  Most web display advertising is the opposite of shooting fish in a barrel – more a minnow in the ocean.  You run ads that get clicked at infinitesimally low rates, paying only for those very small results.  Matching truly relevant content to truly relevant ads could significantly shift the equation of supply and demand.
 
3.     It challenges the distribution model.  Whether on TV, online or in-store, content normally is a means of distributing advertising.  That is, a :30-spot interrupts the program you were watching.  Kontera allows advertisers to buy ad space and use it to distribute all kinds of content.  Extrapolating that beyond web display ads, you can see how it would change journalism, entertainment and information in general.

Fond Look Back at the 1950s

If you read further down in the comments section of Mandese’s article, you’ll see an arcane conversation between him and me about whether it was also true in the 1950s that “advertising (was) a means for distributing content,” much like Kontera.  My point is that Radio and TV shows of the period, like soap operas and Texaco Star Theater, were also examples of brands delivering content.  (Mandese disagreed.)

It doesn’t really matter.  The only thing it proves is that for the past fifty years we’ve been force-feeding audiences our advertising when they wanted to see their content.  Up to now web display ads have followed that same model.

If, as an industry, we succeed in reversing that, and make advertising a means for distributing content, we won’t be jumping the shark.  We’ll be back on track.

What is Klout Perks?

I feel so dirty.

A couple of weeks ago, Klout contacted me via Twitter, asking if I would accept a package from TNT promoting their new series, Franklin & Bash.

Sure, why not? It was a leather folio with a legal pad inside (pictured above), plus a DVD of the show. What was I going to do, blog about it?

Oh. Wait…

What is Klout Perks?

Klout is a social media analytics company that has popularized the Klout Score, a measure of overall online influence. They recently launched a new version which you can see here. My own Klout Score currently stands at 55, and I’m influential about retail, social media, advertising, and six other topics.

Klout Perks is a program where marketers can send swag to influential social media users, hoping they’ll tell the rest of their network about a product, service, or – in this case – TV show.

No, really, this blog post is about Klout Perks, not Franklin & Bash. Honest!

Do Klout Perks work?

It’s a little early to declare whether Klout Perks are an effective marketing tool because the program started a year ago, and just recently was featured on Klout's blog. One early result is that a lot of bloggers are writing about their experience. Will it take hold?

Here’s what Klout needs to do to ensure the success of Perks:

Think like a direct marketer. The first batch of clients is pretty diverse, including an automaker, a QSR, and of course Franklin & Bash. (Darn! There I go again.) Each client will have a different experience based on what they’re promoting and possibly the way they’re promoting it. The quality of the swag will matter in how much buzz they generate. Klout is a sophisticated analytics company, but some old-school direct mail techniques may help them diagnose what works and what doesn’t, such as comparing Offer A and Offer B, testing and tweaking their messages, etc.

Make it easy for influencers to influence. Blogger Mack Collier points out that his Klout Perks package contained no digital content to promote the TV show they sent him. All we got were souvenirs. He and I both had to take pictures of what we got in order to write our blog posts. Other than that, all I can do is direct you to the website for Franklin & Bash. (Grrr…)

Worry about acceptability as much as ethics. Klout provides an Influencer Code of Ethics and Disclosure. That’s helpful, but influencers are influential because they’re on solid social ground, not solid legal ground. Would I be embarrassed to shamelessly promote Franklin & Bash on TNT? Would you be embarrassed to receive a tweet from me about it?

I’ll be honest: I didn’t even watch the DVD they sent me, because Franklin & Bash doesn’t look like my kind of TV show. Nevertheless I appreciated the opportunity to participate in another attempt to mix marketing with word-of-mouth.





Hat tip: Thanks to Josh Brusin of Chicago Foodies for taking today's photo.

"Net Neutrality"

Following Wednesday's post about the role of government at the intersection of Marketing and the Internet comes the latest news about "net neutrality".

Net Neutrality

The actual term is "network neutrality", a concept where all Internet access would be treated equally. All access to all content would be available at the same speed. There's a complete article on Wikipedia describing it fully. In any case, it sounds like an appealing concept, doesn't it?

Not so fast...

The U.S. Federal Communications Commission tried to enforce net neutrality last year, but the courts ruled that the Internet falls outside their jurisdiction. The FCC regulates broadcast communications only, not even cable television, while the Internet counts as an "information service".

You get what you pay for

The opposite of net neutrality is a tiered system, where Internet users would pay their service providers a premium to access certain content faster. This would depend on an arrangement among Internet service providers such as Verizon, content providers and users willing to pay more.

The latest news

Since the FCC is powerless (for now) to enforce net neutrality, those who own the networks are starting to arrange tiered systems. This week the New York Times reported that Google and Verizon are close to such a deal; today Google and Verizon denied it, saying they were continuing to talk to the government. The FCC says that the talks are on hold for the moment.

What's my position on net neutrality?

No one can say how this will play out. The starry-eyed idealist in me wants to believe in net neutrality because it sounds fair and equal. Yet the Internet is not a government program, it's a commercial enterprise. Said differently, it's publishing.

If net neutrality had been applied to newspapers and magazines, then every consumer would have paid the same price for each magazine they received, no matter how premium the content or how many pages it required.

You may perceive that I haven't decided what I think about this. Please use the comments section to sway me to one side or the other.

The "marketing kill switch"

You just arrived at this page from somewhere else on the Internet, perhaps by link, RSS feed or a tweet. Thanks to a combination of 1s and 0s, a microprocessor, some network switching technology and electricity, everything worked. We take this for granted.

No Internet?

When you can’t get a connection, it’s usually a problem with your server or your Internet service provider. But what about a mass outage where no one can get online? This situation was memorably captured in an episode of South Park, but some recent news items report very real threats.

“We’re from the government, and we’re here to help”

The U.S. Congress is considering the Protecting Cyberspace as a National Asset Act (S. 3480), which has been reported as an “Internet kill switch”. The truth is a little more complicated, but undeniably the law would allow for circumstances where the executive branch of the U.S. Government could shut down the Internet. You can read the law for yourself and this letter from civil liberties groups opposing it.

Force majeure

NASA reported earlier this summer that an expected increase in solar activity will threaten our telecommunications infrastructure. “Our technological society has developed an unprecedented sensitivity to solar storms,” said NASA scientist Richard Fisher. The good news is that they’re watching the Sun carefully. If you’re reading this today it means we suffered no consequence from a “solar tsunami” that hit Earth last night.

Downtime

By act of Congress or act of God, a major shutdown would be catastrophic and few people would care if we couldn't sell our clients’ products. Fortunately, everyday life is much less dramatic. Technical downtime happens here and there every day, affecting about 0.1% of operating time in most commercial applications. Someone fixes it and we get back to business pretty quickly.

Marketing kill switch

The bigger concern is protecting commercial speech. There has been a lot of press lately about how corporations invade privacy via Internet data collection, and we should take those concerns seriously. At the same time, let's be aware of government abuse. Just as a local government used Google Earth to spy on residents' backyards, there are other efforts to restrict how we advertise and sell products online. These amount to a "marketing kill switch" that would a cause a scene in your office like the one in South Park.

Tell me your thoughts, readers, in the comments section below.

They're remaking our old Super Bowl commercial

A few weeks ago we told you the behind-the-scenes story of how a legal problem almost killed the Michael Jordan-Larry Bird "Showdown" TV commercial.

Today comes a report from NYSportsJournalism.com that McDonald's is remaking the spot, this time with LeBron James and Dwight Howard.

17 years later, the spot is likely to have a new ending with an appearance by Bird.

Carla Michelotti is still general counsel at ad agency Leo Burnett, which is also handling the remake, so I doubt they'll fail to get the right building use clearances this time.

If this report is true, I'm looking forward to seeing the new version.

Three lawyers walk into a blog about advertising...

It seems lawyers and the law kept popping up in my world this week. Yes, lawyers. Those people who water down our claims and tone down our prose.

Carla Michelotti and the CAF. Carla (pictured here) is the general counsel at Leo Burnett and an effective, tireless advocate for commercial speech. She's a key player in the AAAA, ABA, IAA and other industry groups. She is also one of the most ethical people in business today. For all this and more, the Chicago Advertising Federation yesterday gave her the Silver Medal Award for outstanding contribution to the industry. The event was a fitting tribute with speeches by industry leaders past and present. On a personal note, Carla also saved my Super Bowl spot from a legal technicality. Thank you, Carla, for saving our spot and giving many other people the means of saving theirs.

Trademarks and IMC. Regular readers know that we've been working on a multi-agency IMC project. As part of the process we make sure our selling language is accurate and ownable. One of the lawyers we work with observed that messages in one channel may have a slightly different legal interpretation in another so we should be careful to compare notes with our partners in other disciplines.

Argentina's new law governing media. As a former Argentine resident, I follow all news about my former home, especially when it concerns our industry. The current government passed a law restricting media ownership and airing of foreign-made advertising. Two Argentine journalists explained on AdAge.com this week how these aren't just legislative developments; they force advertisers to rethink media strategy.

The rule of law is important and in the United States we often take it for granted. Lawyers remind us what we have and how to use it.