Media Bytes
April 16, 2009
Backtalk: In Crisis Comes Opportunity
By David Sklaver
Falling media prices mean big opportunities for mid-sized brands, especially specialty retailers, on a scale never seen before. Provided they approach the marketplace with a few caveats in mind, the majority of these retailers can now do things in major media that were prohibitive before.
Prices are falling faster, and lower, than at any time in media history. Some areas of TV are putting wee-hours advertisers in better slots because they have cash at hand. Some areas of magazines are doing deals at well under 50% of rate card. And even local search—the bid-driven sanctimony of Internet advertising—is experiencing a softness and resulting price breaks.
That’s an unprecedented opportunity for the majority of retailers who have not been able to get priority treatment in major media—particularly TV, which is only getting more important in the hard-sell recessionary environment as a way to move millions of people into stores fast. Typically, mid-sized chains have had to scrap for the spoils in the so-called scatter marketplace for local TV spots and national openings that weren’t committed to Fortune 500 companies like Wal-Mart and Home Depot.
To seize the opportunity, smaller advertisers have to turn the rules around; the classic rules of marketing and media were written by, and for, the largest brands. These smaller advertisers would be well advised to:
Zero in on your best customers. Mid-sized chains can’t afford to settle for demographic targeting, which is, at best, an approximation of their customer base. Merging your own customer data and overlaying media databases let you find your best customers in the media they connect with on a daily basis, dramatically increasing your chances of driving traffic and eliminating waste.
Prioritize flexibility over upfront commitments. It’s not how much aggregate money you bring to the marketplace that will determine your treatment, it’s how you wield cash in hand when opportunities open up and bigger brands don’t have the money to block you out. Nimble beats fixed in this economy for many reasons—not the least of which is maintaining adequate presence in the growing arena of new media options.
Capitalize on “reverse clout.” There is a great advantage in being a smaller, first-time advertiser. You won’t comprise a large percentage of any medium’s revenues. A network, station, magazine, or Web site can’t afford to risk being pressured into replicating a special deal for the giant retailers for fear of renegotiating everything and putting tens of millions of dollars at risk.
Apply reverse clout to agencies. Mid-sized retailers often buy handcuffs with the biggest agencies, following the classic logic of spending power. Particularly now, the larger the stable of clients an agency has, the less likely a major medium will offer special pricing, programming, or positioning to one of its clients. The threat of a new, lower ceiling on pricing for 15% to 20% of revenues is too great.
Add a direct response to your media mix. You’ll provide the push that activates selling, and you’ll get better rates. Direct response time is generally sold for a significantly lower price than “brand” time because it is “pre-emptible.” Therefore, a hybrid buying strategy of direct response and fixed position media can provide impact, purchase incentive, and significant cost savings.
So if you are reeling from this economy, there are silver linings:
- You are not alone.
- If you’ve been excluded from major media due to prohibitive costs, take a fresh look.
- There are agencies that know how to leverage a newcomer’s entry into major media.
Bottom-line: This economy creates an unprecedented opportunity in size. Mid-sized, that is. With the right approach, mid-sized retailers can gain significant ground.
David Sklaver, is president of KSL Media, one of the largest independent media agencies in the US, with clients including Guitar Center, Anna’s Linens, Telebrands, Grey Goose Vodka, and Mercury Insurance