The Media Professional

A farmer was interviewed on television several years ago. He was decrying the fact that he was losing money on every bushel of wheat he produced.

The interviewer showed us the numbers. So much for seed and fertilizer. So much for labor. So much for equipment. So much for debt service on the land.

Add the costs together. Subtract the price he received for his wheat and the man was losing money by farming. (Seems he wanted the government to give him bigger subsidies.) It was a sad story.

Except that the money he was losing each year was almost exactly what he was paying the bank in debt service on his land.

Without that note, he would have at very least, broken even in a down market.

So, it’s interesting to see that the newspapers and media companies that are suffering worst right now, are the ones that are the most heavily leveraged.

In an informally published list of profitability by newspaper property, a media chain showed a profit from every single paper but one.

But that one paper was losing so much that the rest of the company was being dragged down. All of the profitable properties (one small paper was sending 45 cents of every dollar of revenue to the bottom line) were expected to downsize and economize to make up the losses of the one unprofitable major metro paper.

What would happen if the owners were to bite the bullet and sell off the unprofitable unit, no matter how ‘prestigious’ it is?

Then bring in the managers of the smaller papers to replace the executives who thought that newspapers could borrow their way to profitability.

Beats begging the government for a subsidy!

J.David Knepper

Tags: Advertising, Major Media by admin
No Comments »

The logical extension of cost-cutting is total elimination of the enormous cost of the paper, ink, personnel and distribution involved in publishing on paper. Whoever first suggested replacing the paper medium was probably praised by his board of directors for being willing to make the tough decisions, for being forward-looking, for being innovative, for seeing the future of the industry.

So, capital and hope are invested in online ventures. Audio, video, interactive features are used online, which attract younger people, who will pay to visit and will create buzz, which will attract advertisers, who will pay more money, which will save the company, the reasoning goes. Improved websites promise all this without the costs of publishing on paper.

Finally, presses go off edition and ‘papers’ go strictly online.

But people are not attracted to the newspaper website by its audio; radio does audio better. People are not attracted to the newspaper website by its video; television does video better. People are not attracted to the newspaper website by its interactivity; Fox News, CNN and less impressive networks have much better interactivity.

No planet ever welcomed a shuttle just because it was a shuttle. It welcomed the shuttle because it was part of the Starship Enterprise. Without the mother ship, the shuttle wouldn’t be there.

What’s true for shuttle craft is true of newspaper websites. If the newspaper is gone, the newspaper website is just another choice among thousands of online choices featuring better audio, better video, better everything. Maintaining popular local features may delay the inevitable failure of the website for a short while, but without the professional journalism and the credibility of daily publication in a mass medium, the project is doomed.

The sad truth is that a local online newspaper without a local paper newspaper is no newspaper at all. And like a shuttle without a mother ship, it is not leaving the ground.

Tags: Advertising, Major Media, New Media by admin
No Comments »

Newbies left DINFOS as productive team members within a few short weeks from a standing start. I saw Infantrymen and Marines become working Journalists, Airmen and Seamen become functional Broadcasters in the concentrated courses offered. Many graduates of four-year schools would be expected to work as interns before real employment offers could be made. DINFOS graduates were expected to be productive immediately upon graduation.

DINFOS on an applicant’s resumé impresses those of us who attended the school.

We Reservists spent a fair amount of time pitching reporters on the merits of covering what our Citizen Soldiers were doing. We then spent more time trying to get those reporters to cover the events without showing their anti-military biases. Public Relations or Public Affairs? Who cares? We were trying to put forth a positive message about our client, the Army.

The Public Information Office provided very good training for media people, for public relations people, for advertising people, for news people. I’m glad I had the opportunity to serve in the 372nd Public Information Detachment, USAR.

I learned much and use what I learned every day.

J.David Knepper

Tags: Major Media, New Media by admin
No Comments »

Making political hay from the difficulties caused by Vioxx and other drugs, Congresswomen Rosa L. DeLauro of Connecticut, chairwoman of the Drug Administration Appropriations Subcommittee, and Jo Ann Emerson of Missouri introduced the Responsibility in Drug and Device Advertising Act of 2008 (H.R. 6151), to the House of Representatives in May, 2008.

Their own press release, dated May 22, 2008, explains what they want the act to do:

1.Establish a three year moratorium on direct-to-consumer ads for new medicines with a possible waiver if the product is proven to to be of affirmative value to public health;
2.Provide authority to require corrective materials to be distributed if drug companies violate the advertising moratorium;
3.Include strong civil penalties that apply to all violations of the ad provisions or other requirements of the Act;
4.Require the advertising to prominently display information about the potential drug and device side effects;
5.Call for a public education campaign on the risks of certain drugs.

This ill-conceived plan deprives pharmaceutical companies of the chance for a reasonable return on their research and development investments.

Such moratoria, while cynically claimed to protect the public, shorten the period of time that innovative medical products can be marketed before manufacturers lose patent protection.

They allow competitors three years to create products to compete with the innovators.

They keep the innovator from establishing market dominance with a product even if the innovation itself creates the category.

How will American manufacturers be able to continue to lead the world in innovation and development if politicians are allowed to interfere in the marketplace?

Let’s suggest a moratorium on all advertising by incumbent politicians until they prove themselves not to be dangerous to the body politic.

J.David Knepper Audio Version

Tags: Advertising, Agency, Broadcast, Major Media, New Media by admin
No Comments »

The principles of advertising have never changed.

New media explode onto the scene with amazing regularity. New schemes promise new ways of manipulating the behavior of groups. New ideas demand their places in media budgets.

But there are certain constants that must be considered. Groups are made up of individuals. Individuals are not defined by the groups they populate. Individuals act as individuals for individual reasons. They need to be convinced, not manipulated.

Proper advertising convinces individuals reached through a mass medium. The message should outlast the medium.

Why? Because…

…the principles of advertising have never changed.

J.David Knepper

Audio version

Tags: Advertising, Agency, Broadcast, Major Media, New Media by admin
No Comments »

Media offerings currently available to advertisers include:

movie and television show placements,

mobile signs, text messages,

calls to your cell phone at all hours,

outdoor with changing electronic displays,

changing electronic displays on taxis that change messages for different parts of town by GPS,

local magazines of all sorts,

email solicitations,

bathroom advertising,

bar room hustling to create buzz,

gas pump advertising,

buses, blimps, balloons!

Are these media legitimate?

Yes. If advertising is simply putting product names in front of eyeballs, all of these work to one degree or another.

Effective? Maybe. Tell me your message and I’ll tell you whether your advertising will be effective at selling your product or service.

If your message is bland, you can tell it to everyone in the world and no-one will pay any attention.

If your message is compelling, you won’t have trouble finding customers with it.

Don’t believe me?

Buy an ad in the smallest publication you know. Put your ad under a headline legitimately promising “Free Beer” and see what happens. You’ll need a cop to control the traffic. People respond to ads that interest them. And they call to tell their friends about such ads.

You need to develop the proper message to share. Then and only then should you talk about what medium to use to convey it to the public.

It’s not that the medium isn’t important.

It’s just that the message is vastly more important.

J.David Knepper

Audio version

Tags: Advertising, Agency, Major Media by admin
No Comments »

Is there anything in media sales for which to aspire anymore?

In olden times, a person joined the sales staff of a company and looked forward to a long and fruitful association. Older sales professionals, also known as those who had made the cut time after time, were generally paid more than folks entering the workforce. Young people working with seasoned veterans would learn about the business and see the rewards of working hard and remaining loyal to the company.

That was then. This is now.

Today it’s fashionable for management to design compensation schemes that ‘level the playing field’ or ‘are performance driven’. The problem is that the level playing field is on the lowest level and the performance measured is usually short term.

Hence, a youngster entering the workplace often earns more money than seasoned professionals. Worse than that, the compensation plans actually punish experience and productivity.

For example, goal trending is currently a popular compensation feature. However, it punishes success with higher goals both in the near future and again at the anniversary of the success.

Longevity, client building and strategic planning are clearly not rewarded under many modern sales compensation plans.

Instead, short-sighted management (SSM) will look for schemes that will boost revenue, usually with no consideration of the strategic ramifications.

Many of the ‘new concepts’ in newspaper and television advertising are nothing more than elaborate rate concessions. SSM is seduced by consultants who promise great increases in revenue if only SSM will,

1.Give the consultants control of their sales force for a period of time;
2.Follow the consultants’ instructions to the letter;
3.Give the consultants extensive client contact information;
4.Agree to take responsibility if the plan fails to produce as promised, and, finally,
5.Give the consultants dramatically lower rates than are otherwise available.

The plans often seem to work. Contracts are signed. Revenue projections are made.

Project completed, the consultants high five the SSM and leave for home with pockets stuffed with money. SSM report to their superiors that they have managed yet another successful revenue generating program.

What is overlooked is that for the time that the sales people were working the consultants’ plan, they were not serving their clients and some of those clients became clients of competitors.

Sales people, told to follow the consultants’ instructions to the letter, were often forced to work counter intuitively and against their clients’ interests.

The extraordinarily low rates sold under such plans become the basis for all future negotiations with clients who hear about them.

And it is very hard indeed to show clients such plans without their buying them with money they would have spent anyway.

These unmeasured costs can be huge.

In short, when management chooses to implement a special program offered by outside consultants, the program should be analyzed very carefully to prevent its being misused.

Look at your last project. Can you honestly measure how much revenue was switched from other products and plans? Can you say that you got more business from a consultants’ plan than you would have generated by simply lowering your rates? Can you prove that your clients were truly well-served by the plan? Or that salespeople didn’t learn bad practices from their time on the project?

There are costs to making decisions in business.

The costs that aren’t readily apparent can be the highest costs of all.

For a view of this matter from an executive’s perspective see the article Consultants Hidden Costs.

J.David Knepper
Audio version

Tags: Advertising, Amendment Five, Broadcast, Major Media, New Media by admin
No Comments »

Small business owners need to determine how they want their their advertising handled; like a casual Lotto ticket purchase or a crucial business investment.

Consider this. So many times, small businessmen and women decide to ‘try’ advertising in the newspaper. They want to see if it works. They want to put a little bit into the effort to see if they get enough bang for the buck. They don’t have money to waste like big companies.

Here is the truth backed up by hundreds of years of experience by a mature industry.

If done properly, advertising in the newspaper will bring a business the customers it needs. If done properly, advertising in the newspaper will show a large return on investment. If done properly, advertising in the newspaper will make all other advertising efforts more successful.

Much advertising by small business follows a pattern of buying an ad in the paper and trying to determine whether there are enough customers coming through the door to pay for it. If there is an immediate response to the ad, everything is fine. The effort continues until the first downturn in sales.

At that point, the advertiser becomes vulnerable to the first media person to step through the door with an offer of something else.

That medium is tried. Again, if it is perceived as immediately successful, it replaces the former effort. And again, the effort is continued until the next downturn in sales when it is replaced by yet another, according to its sales rep, sure fire advertising medium.

This cycle is repeated endlessly in many small businesses. But when the business finally closes, the owner returns to the newspaper to advertise his going out of business sale.

His approach is much like buying a Lotto ticket. He gets immediate feedback as to whether the investment produced a return. As long as he’s winning, everything is fine with buying Lotto tickets.

But if he loses money at Lotto for a while, what do he do? He switches. He tries scratch-offs or on-line betting or visits the casinos. He tries different things to find out what works.

Here’s a secret. The big companies didn’t get that way by wasting advertising dollars on every exciting new concept that is presented to them. They stick with mainline media for one reason only. They sell product. They know that the message is more important than the medium that delivers it.

Pick an established medium. Craft an excellent message or pay someone to craft an excellent message. Run it as much as you can afford to run it.

That way, you’re treating your advertising like an investment and can expect a return on your investment that will last for years.

J.David Knepper
Audio version

Tags: Advertising, Agency, Amendment Five, Broadcast, Major Media, New Media by admin
No Comments »