The following commentary was originally published in Jack Myers' 1993 book AdBashing: Surviving the Attacks on Advertising.
It's called value. Marketers have lost their sense of advertising and media value. The drive toward increased media commoditization, which has reduced the cost basis of most major media in the past few years, is more than a cost-reduction strategy by advertisers. Rather, it represents a dramatic restructuring of their priorities. As advertising has accounted for a smaller share of their total [marketing communications] spending, marketers have systematically focused on those media that offer the greatest cost efficiencies, with little reluctance to walk away from those media and/or companies that are least efficient.
Marketers have demonstrated a willingness to eliminate any media company or medium from their marketing plans, or even to walk away from advertising altogether if necessary.
Those media companies that believe a renewed economy will send their rate cards shooting up are in for a shock. The most successful media companies will be those that identify and develop new and innovative opportunities to increase their value to advertisers at lower costs. Advertisers want quality; they will support media that invest in building stronger relationships with their audiences. But advertisers have also made it very clear that they consider media costs to be too high. Media cannot expect to fund enhanced capabilities and services through increased costs. Advertisers want to have their cake and eat it too. They require enhanced services at reduced costs.
Advertisers, for their own survival, will inevitably cease their funding of those media vehicles that are no longer measurably productive for them. Marketers will no longer support those media that are not effective and efficient. While fiber optics, digital compression, satellite distribution and other technologies suggest continued fragmentation of television media, advertisers are no longer willing to fund these advances. Marketers currently have available to them relatively effective and efficient vehicles for promotional and direct marketing activities. While interactive technologies may enhance these capabilities in television, they are accompanied by a high price tag. Television programmers may envision the appeal of a 500 channel universe, but the willingness of consumers and advertisers to fund these channels is doubtful.
Magazines, newspapers and cable television are primarily dependent upon a dual revenue stream: advertisers and subscribers. If mass media disappear, replaced instead by myriad low rated, small circulation vehicles, advertising revenues will most certainly decline. Messages can be distributed to small groups via direct marketing and promotional efforts more efficiently and effectively than print or television media. The success and growth of small circulation television vehicles and magazines are driven by the broad awareness-building capabilities of their mass circulation counterparts.
Unless overall media value is increased, advertisers will continue to [shift share of their total marketing communications budgets] away from advertising as they have every year since 1975. if advertisers are not willing to pay increased costs, then media companies must find new ways to reduce their overhead while increasing quality and services. The future belongs to those companies and individuals that seek and find new and innovative ways to reduce their costs while increasing their quality and their profits. Just as major marketers are developing every-day-low-cost strategies in a basic restructuring of their business philosophies, so must the media industry respond to advertisers' needs for assurances of media efficiency.
Jack Myers advises media companies, agencies and marketers on transformative business models and writes a weekly blog at www.jackmyersthinktank.com.
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This post originally appeared at JackMyers.com.