Face the Music

In 1963, Bob Dylan wrote one of the greatest protest songs in history: “The Times They Are A-Changin.’ ” While its original intent was markedly different, the message for the 21st-century ad industry couldn’t be more relevant.

We are facing a communications revolution where the nice, clean pecking order and guidelines for conducting business are rapidly fading. Yet too many of today’s industry leaders still want to stand in the doorway and block access to the hall, hoping we will return to the way it was. Well, we won’t, and we can’t.

While many clients, agencies or media outlets talk about the new world order, few are actually doing anything to change it.

As media specialists, we should fundamentally restructure the way we position our product and our company. We must move away from a commodity-based or silo approach, where evaluations tend to hinge on getting the client the lowest cost. Cheaper might mean lower costs-per-thousand, lower out-of-pocket or lower commissions. In any form, the emphasis has been on cost reduction. It shouldn’t be.

Instead, we must develop a mind-set that demonstrates we have something of value to bring to the marketing equation. Our ideas, concepts, innovations and creativity are worth more than a media commission or fee.

We must start embracing the concept of “intellectual property,” which is unique and has intrinsic value. Our passion, points of view and ideation can make a difference in a company’s success, and we should be compensated based on that contribution.

In the past, the prevailing method of business has been to produce a limited number of ads and schedule them in various venues to reach different people. Basically, this approach is general, or above-the-line, advertising. Concurrently, there might also be an effort requiring different ads to appear in various venues to reach a range of prospects (or the same prospect in a new way). Historically, this has been the ownership space of direct marketing, promotion or event marketing.

However, a new order system mandates that different ads be placed in different venues for the individual. Now the strategists will have to invest in new tools in order to understand and create the new marketing equation. The emphasis will be on ideation—not execution.

The new order necessitates an evolved decision-making process that integrates both short-term awareness and long-term response initiatives. In effect, it creates an “intellectual property” data bank that has a value. It results in a quantifiable consumer response that should be worth a premium, compared to the traditional and limited reach and frequency or awareness targets used to historically plan media.

The effect will be dramatic.

First, the client’s budgeting procedures will have to change because, in the new world, budgets cannot be parceled into neat little media silos. They will have to be considered as part of a fully integrated plan.

Second, traditional creative-to-advertising ratios will blur. The established idea of 90 percent media space and 10 percent creative/production ratio will give way to something akin to 25 percent/75 percent with production defined more broadly and deeply. The creative ideas will be worth a premium.

Third, agencies will be paid for the time and effort required to explore all integration options, much like a cardiac specialist gets a fee when examining a new heart patient.

If you had to have open-heart surgery tomorrow, would you freely choose the local HMO and be assigned a doctor who has limited experience but is cheap? Or would you seek out the world-class surgeon who has flawlessly performed 5,000 similar heart operations but who charges a premium for the intellectual value and experience he brings to saving your life?

As media specialists, we must begin to think of ourselves as—and prove ourselves to be—the equivalent of that world-class surgeon. We must enhance our value and the clients’ perception of our value so they’ll be willing to pay us for our intellectual property, not just media space. It’s the only way to survive in the 21st century.

To paraphrase Bob Dylan: “If your company is worth savin’, then you better start swimmin’ because these times are surely a-changin.’ “

Lou Schultz is chairman and CEO of Initiative Media Worldwide in Los Angeles.