December 29th, 2008 | Comment
As a longtime admirer of A.G. Lafley, CEO of P&G, a man so powerful but inconspicuous that he is often not recognized even while dining out in Cincinnati, I was struck by this pronouncement from the Wall Street Journal on December 12:
“This is a big opportunity. We just walk in and say, ‘Tear up the contract.’”
The contract Lafley is referring to, of course, is the media contract with his advertising agency. Since P&G is the world’s biggest spender on advertising, this is cause to sit up and take notice. Is it entirely bad news, though? Not at all, if you’re in the business of promoting your products and services.
Just as the rest of the economy is realizing the value of innovative thinking in an environment of paring back (and often slashing) costs, media departments are now on the hook to make the most of an historic media buyer’s market. So why is media a perfect storm today?
* First, as media costs become more negotiable, every dollar stretches further. With the possible exception of the Wall Street Journal, just about every outlet, especially print-based, is looking to make it easy to advertise, even in formats they haven’t offered before. Actually, 2009 might be the best time to advertise in print since 2003.
* Exchange rates against the dollar are also looking more attractive, so US-based advertisers have an easier path to go global than at any time in the past few years.
* Large-scale advertisers, especially in financial services and automotive sectors, are canceling choice airport and outdoor contracts, so some of the most-trafficked (and contractually locked up) spaces in terminals and on roadways are finally available again.
* Sports sponsorships, especially for golf tournaments, are dropping in price. Just look at the breakup of GM and Tiger Woods.
* Online channels continue to proliferate, which means buyers have more outlets to place their dollars and more vendors to play off against one another as they search for the best impressions.
* Viral campaigns continue to get better, as witnessed just a few weeks ago by JC Penney’s wonderful Beware of the Doghouse. This video was a shining example of trusting the target audience to serve as a media channel and allowing the high-end production values to speak for themselves. Of course, if you don’t spend on media, you can devote that money to the quality of your video, to channels that have a non-viewer-negotiable preroll, even to contests that incent your target audience to create your next ad for you.
All this being said, you can have the best media plan in the world and still look up to see your company’s board bearing down on you with a giant pair of budget shears. How do you keep them from keeping you on the sidelines?
Here’s one plan of action, from our media strategists: Go to your board and say, If you don’t touch my budget for four months and I can show value and generate meaningful metrics, you can’t cut my budget for 2009.
And if you are forced to cut, do it intelligently: cut a market, the channel, or a country, rather than cutting across the board.
All this being said, today’s situation reminds me a little of the survey report I read in today’s Financial Times: upscale Americans certainly agree that stocks are an amazing bargain and a logical investment right now. The only problem is, they’re still sticking to the sidelines.
Just remember, though: you can strategize all you want from the sidelines, but you won’t get anywhere without some skin in the game.