Advertising in a Down Market

With Wall Street downgrading media company stocks in anticipation of advertising budgets being slashed in 2012, I say, “Bring it on.” Madison Avenue is in for more than a haircut. CMOs should prepare themselves for a scalping unless they look beyond cost-per-impression and focus on the key measurement in a bear market: accountability.

When markets grow, boards listen to the CMO. When markets go south, the CFO has the big mouth. The jobless turn-around by corporate America over the past three years has been achieved by massive increases in worker productivity, and corporate balance sheets are solid because companies learned how to be more efficient. We’ve learned how to function smarter and leaner in business, but where is the efficiency in our expensive reliance on meaningless impressions for the bulk of advertising dollars spent?

This year has seen substantial increases in network television upfronts even though the most sought-after consumer demographics are watching fewer television commercials. Performance-based advertising (search, value-exchange engagements, CPA, DR) still only account for less than 4% of the $130 billion spent in 2010 on brand advertising in the United States. GRPs and impressions do not equate to accountability – they are proxies for comparison between television channels, not a measurement of gains in sales, brand lift, market share or profits.

Marketers have the ability to reach audiences the size of the Super Bowl everyday online, yet impressions, or the measure of the opportunity to click on an ad, still prevail. Banner blindness is an accepted truth in online advertising. Even on the off chance that you do happen to notice a banner ad, it’s probably because it’s distracting and annoying enough to momentarily divert your attention. We go online for a reason, and ads that intrude on our primary pursuit, whether you’re reading an article, playing a game, or checking your social news feed, are hardly going to compel us to stop what we’re doing and pay attention.

Companies burn money on banners due to their addiction to an outdated advertising model that simply cannot deliver accountability or efficiency. In 2008, a lack of viable or better options may have been an excuse for wasting dollars on banner ads, but it’s time to wise up and invest in zero-waste advertising.

Businesses need to spend ad dollars on solutions that can deliver a consumer's active attention and eliminate paying for wasted impressions. How do you buy zero-waste advertising? You only pay when a real person has willingly initiated a brand experience. You measure and exchange value on a 1:1 ratio, assuring that the brand, the consumer, and the publisher are accounted for in the advertising experience. You demand a measured return based on real engagement with real people. You engage the exact audience you want to reach based on the criteria your brand needs to succeed.

While overall spending is expected to decrease by 3 to 6% in 2012, digital spending is expected to rise by 14%. Take a cue from leading brands that are finding new ways to power cost-effective digital campaigns in social environments. The measurable success that brands such as Bing, Best Buy, and Intuit have experienced with value-exchange advertising across social media has allowed them to expand their marketing budgets and pioneer new ways to interact with consumers. Social media’s greatest appeal is its ability to turn customers into evangelists and generate millions of dollars in earned media.

Wall Street’s roller coaster ride is shaking up boardrooms and C-level thinking. Corporate social media evangelists need to seize the moment, rise out of the digital-budget ghetto and prove that the era of zero waste marketing has arrived. In advertising, maintaining the status quo and playing it safe can be the most dangerous thing to do.