Monday, February 2, 2009
What Motivates Your Business Model?
By Kendall Allen The murmur of revamping business models has returned to media circles. It is telling to note when the focus is on evolution, survival, pioneering new territory -- or some combination of these motives. In our current environment, I would expect a lot of talk about shifting models. Yet the urgency varies by situation and quest. As we re-model, are we guided by vision or salvation? Are we actively driving to a real future -- or feverishly re-acting ourselves down the highway to perpetuate a dated model or entrepreneurial dream?
The most productive evolutionary thinking on models by people in our business includes equations that should matter to us all. The challenge and opportunity is getting out of freeze-frame and addressing practicalities.
Ad Space vs. Value Proposition
Our take on value has implications for publishers, media technologists, agencies and marketers. Within our models for doing good business, we should all care about value over inventory and transactions.
Media Companies. With integration as the imperative, stronger media companies today are focused on delivering value in more strategically knit, targeted packages. As recently discussed, it takes more than an evangelist at the top to break down silos and rid the habit of selling turf and eyeballs, at desirable CPMs -- and move to value models.
The intellectual agility to plan and package across media channels, and build a program with real consumer resonance, contextual relevance, brand value and conversion potential, is a big deal on almost countless levels. When it comes to programming, the institutional guts to move away from lame value-add models in exchange for purposeful integration of meaningful components, goes a long way toward longevity and your team's relationship with brands and their agencies. It's the longer view.
"Agencies." While striving to advance their mindshare with the client, many companies formerly known as agencies have explored a sliding blend of branding and performance approaches. This is being done to elevate the business conversation and access additional buying centers, so the agency begins to look more like a marketing partner. But depending on where you already fall on the continuum, this above/below line slide may represent a frightening transformation and more investment than you can fathom.
Adding media planning and buying to your mix in the right way; getting serious about analytics and consumer insights; delivering experiential marketing and its specialized production requirements -- where to draw lines on this re-model? How must talent collaborate internally, and with clients, to get the most out of today's integrated marketing environment? In any event, if you self-identify and style your model as a straight ad agency that doesn't need to get marketing, or you don't think that advertising has a very real place in a killer marketing model -- please smell some salts or something.
Marketers. You are already using integrated consumer marketing models and unleashing the right mix of methodologies. Even so, how do you shed the institutionalized bad habit of blindly deploying against isolated pieces of your strategy? Or almost worse, retaining one or even a cabal of agencies to do the same for you?
Capable agencies will map the big picture, integrating a plan and programs to service quantifiable marketing approaches. And the disciplined ones will refuse or wean from sequential, insular, scrappy project work in the spirit of the longer view. Similarly, a marketer's updated playbook does not allow fire-walled media and marketing. Nor does it advise retaining agencies to plan and buy media blind to strategy -- or to sling banners, email and widgets in isolation. Sporadic is as sporadic does.
Perils of Stasis and Retreat
Media companies and publishers that don't dig into the concept of integration and progress on their models will continue to leave opportunity on the table and waste everyone's time. Organizations will spin and bleed.
With their eyes on an easy short-term fee base, potentially great agencies will short-cut their potential and focus on rote transactional media-planning and banner-slinging at the expense of real marketing engagement and corporate depth with their clients.
On the client side, hindered by legacy, some important brands will fragment and err on the transactional. This transactional bent will play out with both the marketing or media professionals they entrust -- and the consumers they ineptly attempt to engage and endear.
These regression issues are not complicated: investment trepidation; fear of the unknown; inherited practices and relationships; fear of the punch that just might land; or general lack of exposure to the stakes. The thought of diverting your eyes from your daily battles to figure out the long-term can seem risky.
A Look Back at the Re-no
I still find helpful to consider this story. My first foray out of print publishing, back in the mid-'90s, was to help build Thrive Online. This AOL/Time Inc. joint venture was a dual platform content and community play in healthy lifestyle. We established environment and community infrastructure on both the AOL proprietary site and on Pathfinder -- and housed it with content, chat and auditorium programming. We sold no advertising or sponsorships. By leveraging assets of both parent companies and through various distribution deals, we drove traffic. We reserved keywords as part of our arrangement with the AOL parent. Before limits were established and while we still earned against consumer hour spent - we enjoyed traffic flow, sometimes in reams. Among others, we had the keyword "sex." You figure it out. We did very well out of the gate.
Soon, we, and numerous other JV sites or AOL Greenhouse brands, would restructure our agreements. New customer pricing models were introduced. We were told to sell advertising. So, we did. A guy we will call Craig came on board and guided our monetization of the sites, sold the first banner ads and developed killer custom publishing programs,. It was painful to navigate this shift with our editorial team, but it certainly was a valuable experience to change model so dramatically -- because we had to.
At our best, we advance our models out of vision and not just stark survival. But, on some level, I would say a little heat is good for the imagination. A little just do it never hurt anyone, really.
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Kendall Allen is senior vice president of Digital Marketing Services at MKTG, headquartered in New York City. Previously she was managing director of Incognito Digital, LLC, an independent digital media agency and creative studio. She also held top posts at iCrossing and Fathom Online.
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