Megan West(erby)

BRYCE DOT VC: Capturing More Value Than You Create

brycedotvc:

IImagine them using the ad dollars they spent blasting the coach section of the plane to do something that created value for me as a potential customer. What could they have done with those dollars?

How about paying for or subsiding a portion of the cost of our wifi. How about giving every child in coach a Matchbox sized version of the Lincoln model car that was in the advertisement. How about buying every seat in coach a movie of their choice and playing the commercials at the beginning and end of the show. I imagine anger wouldn’t be the word I’d be using to describe my feelings towards the companies right now.

I could write a whole book about this (oh wait! I am!) but the short answer is:

a) Most ad creatives still only know how to make TV spots. YouTube, for all its awesomeness, didn’t help here. Ditto Hulu. It let many of them think that if they waited long enough, they could just keep making TV ads. Maybe they’d even be longer!

b) Media agencies still control 90% of the money in advertising, and they still look to buy space. They buy it for the formats the creative agency is already going to make, and they like them to be as standardized as possible. Delta obliges them.

c) The smart people in advertising who would tell a client to make something like your describing work for digital agencies and smart traditional creative agencies. Combined, if they’re lucky, they control about 10% of a brand’s ad budget. To do what you’re describing, the brand would have to be convinced to re-allocate money from its media budget to production. Remember, the media agencies control 10x more money than these guys. They are not going to like more money moving from media to production.

d) In fighting back, the media agency will point out that the smart guy suggesting this approach is actually just being self-serving because, oh, coincidence, they will probably be doing the production.

e) Unless the brand’s gonna pay for all the expense of those trays, etc., Delta’s not gonna do it.

f) If Delta wanted to do it on their own, they’d have to issue an RFP to a creative agency, then re-allocate the funds from their media agency, who will bring out an army of data about why this is a bad idea (even though you’re right, it’s not).

g) And, of course, even if Delta was smart enough to see everything as it is and still want to do it, they’d probably make less money than just running the ads on the screens, so some marketing guy would have to stick his neck out. Unless he complimented this with an ad campaign pointing out how they were different, because otherwise no one’s really gonna notice you did it. Or at least not enough people to make the whole investment worthwhile. PR and Social would help here too. but proving it was a worthwhile and wise move is almost impossible still - the metrics suck. So all your boss sees is “why are we making less money than just running ads on those screens?”

In short, the ad industry is totally too broken to serve its clients in the way the people want.