The Ad Age staff compiled a list of challenges and pitfalls awaiting the advertising industry as it turns the corner into 2010 and the start of a new decade. Editors gave the issue of agency compensation and the role of client procurement officers prominence as the first entry on the list. Quoting Mediabrands CFO, Tara Comonte, from her remarks at the American Advertising Federation's Hall of Achievement Awards, Ad Age summarized the issue: "Procurement wants to pay less than enough. And it will be self-destruction."
It is an issue that deserves to be at the top of the list. The issue of agency compensation must be addressed if the industry is going to be able to afford to keep pace with the rapid advances in new media in a way that provides maximum benefit to marketers.
In that regard, further down the Ad Age list was what to look for in Digital Marketing. "In short," says Ad Age,
"marketing on the web has not been about creating demand so much as reacting to it by delivering the right ad to the right person when they indicate they want it. This has been a boon for Google (and has given birth to 400 ad networks), and represents the best thinking of largely West Coast technologists. But it is increasingly disastrous to content industries that are watching offline revenue erode and finding no equivalent revenue stream online."
It remains a mystery (sort of) why the media value of the Internet can be so obvious and so invisible at the same time. Ad Age reports that delivering the right ad to people when they indicate they want it has been a "boon for Google." Yes, but this is not the invention of West Coast technologists, nor the impetus of 400 ad networks. Google's success is tied to rules cavemen (whose primitive work got us on the right track with media as much as with the uses of fire and raw materials, we might say) understood: the right message in the right place reaches people predisposed to what you are trying to sell them. Ug.
Most ad networks evolved differently. Most pay very little regard to placement if they are paying regard to anything more than price. Those that invoke any targeting do so almost exclusively on the basis of person, not place; and not time, either, though some would argue that "in-market" means "right time" as much as "right person." That may be the best thinking of West Coast technologists. Hunters and gatherers, however, think differently. They fish where the fish are.
Google has successfully leveraged all of the Internet's power beginning with place, which has been the thing most responsible for the boon. One person has learned that lesson well enough: Tim Armstrong. Hence the new and improved, comes-in-a-resealable-package, add-water-and-stir, instant content formula of Aol. Will it work? Not like Google. It's an instant after the fact, which is an instant too late. But, the heart is in the right place: content. Place. Audience predisposition here (an operative word) and now (another operative word). They are both on sale, online (you're probably already buying them, thanks to Google) and available - as Ad Age says - in "millions of tight niches."
The millions of niches part, of course, has been the distraction. New media is a vast place and the buying industry has been ill-equipped to navigate it. The digital market, therefore, has a very clear stake in the future of ad agency compensation (see above). If the industry wants the Internet to emerge as a boon for itself and not just Google it must figure out how to reward planners and buyers for the work that goes into harvesting the power that Google has harvested - deliberately and transparently, not passively or non-transparently through third-parties, or by trying to find escape routes around the media nexus of person, place and time.
Maybe it's not so simple that even a caveman could do it today. But it's still pretty simple.