There has been more change on the media side of the advertising business in the last 36 months than there had been over the previous 36 years. So says David Verklin, CEO of Carat North America, and the effect that’s had on media measurement is one of the key topics he will speak on at the CMDC conference in Toronto on April 2.
‘This subject of looking at performance metrics, accountability, and return on investment of advertising spending is an area of incredible passion for me,’ he says.
‘Could it be that managing the media touch points is more important than the creative itself? Certainly clients are now of the belief that media and creative are of equal importance, but I’m even running into clients who feel that media should lead. That’s an incredible tectonic change in the past three years.’
Verklin began his career at Young & Rubicam, New York. In 1987, he helped create Hal Riney & Partners in San Francisco as its first media director, later becoming the agency’s managing director.
In April 1998, Verklin took on the position CEO at Carat’s North American headquarters in New York.
Strategy MEDIA got in touch with Verklin recently for his thoughts on the role of media in advertising, new measurement techniques and how technology is changing the way media is bought and sold.
If media services companies want to take on the lead role in advertising, should media buyers be accountable for the performance of entire campaigns?
One of the frustrations with the traditional viewpoint of media departments has been that when a client’s business is up, the media people will say, it’s a heck of a media plan. But when the client’s business is down, what do media people say? Lousy creative.
What I’ve always respected about creative people has been that if the client’s business is up, they’ll take credit for it. But if the business is down, they get blamed for it too.
Media people have to believe they make a difference and if a client’s business is underperforming, then media has to shoulder part of the responsibility and take a fresh look at how new media solutions can help move the client’s business forward.
If media takes the lead, should media companies vet or guide the creative messaging as well?
Carat is actually doing that in Europe. We have launched a practice in Europe called Communications Planning and it involves developing a communications strategy for clients – so we actually help clients look at the media channels and customer contact points first, develop a media channel, develop a media strategy, and then a communications strategy. From there we actually brief the creative folks at agencies. I’m not sure I would actually use the word ‘vet’ but I would support the idea of guiding the creative.
Media services companies definitely need to guide the development of creative messages. Communications planning will sweep the U.S. and Canada over the next five years, and we’re going to move to a place where communications planning and media planning lead the advertising development process. We’re already beginning to build a Communications Planning practice in the U.S. I think you’ll see Carat launch its U.S. Communications Planning practice in the third quarter of this year, and I wouldn’t be surprised to see it in Canada by early next year.
How much responsibility should media companies have for tracking sales results and other indicators that their plans are actually helping clients meet their goals?
At Carat, we have a philosophy that every media plan should have a set of metrics attached to it, and those metrics have to include more than just a post-buy.
Sometimes, with clients who aren’t willing to look at outside additional costs to measure sales or sales impact, we use a program called Carat Tracer which does low-end regression analysis and time-series correlation to track advertising intervention with sales.
With Tracer, the client gives us all of their sales data, and we obviously know the timing of the media data, so we’ll plot media delivery against sales to see if there’s a correlation. As media presence increased did sales increase? What was the sales effect as it related in time to media delivery? That’s a fairly unsophisticated tool, but Tracer is already on the desktops of Carat employees in Canada and the U.S.
What about the media sellers? Should they also be more accountable for helping clients reach their goals?
I think this is really a new area of exploration. If you meet with media sellers, they’re the first to say we work for the same client – you have a client and we have that same client, so we’re really on the same team. And I believe that.
But media sellers have to believe the same thing that Carat does, which is that if a business is thriving, we can take some of the credit for it, but if a business is underperforming, the media seller can’t say, gee the creative is lousy.
If this is the case, why do people meters still measure program audience rather than commercial audience?
It’s one of the biggest issues that Carat has with the measurement services in Canada and the U.S. In Europe we have minute-by-minute ratings.
We’re not interested in what the program audience is; I want to know what the commercial audience is. And the research services and the networks are against providing us with the data. They have the data. People meters produce the data on a minute-by-minute basis, but it’s just given to us on a quarter-hour basis.
We’ve got this very sophisticated optimization product that is designed to help clients buy TV using minute-by-minute data, and we’re feeding them quarter-hour data.
Our clients want to pay for the audience that watched the commercial, not by imputing that the same number of people watching the program watched the commercial – because we all know it’s not the truth.
Have North American broadcasters and measurement companies told you why they aren’t providing this information?
The media measurement companies have danced around the issue. They’ve talked about how concerned they are about releasing the minute-by-minute data tapes.
They’ve talked about the proprietary nature of that data, and the fact that there are weighting issues, and when you get to that degree of minutiae, will it be the right sample size. I think that if we convert to that data, when we look at minute-by-minute data, we’re going to see that commercial audiences are far lower than program audiences, and it will upset what has been a very orderly media market. This issue is now coming to a head because of consolidation on the media-buying side of the business.
You now have only 10 companies left in the media planning and buying business on earth – 10 gorillas. In the U.S., seven companies, of which Carat is one, control 70% of network television in the U.S. That’s a lot of power, and if that group gets organized and demands minute-by-minute data, it’s a force to be reckoned with.
If media companies are able to measure the sales/brand awareness impact of running a certain ad, should the media vehicle be valued on that basis, rather than by average audience or impressions?
This is why we’re so excited about the new on-demand television technologies that are beginning to be tested in North America. What we’re discussing has been the Holy Grail of media since people have been writing on the sides of caves.
Let me give you an example that covers this subject. Let’s talk about denture cream. Tonight on the evening news with Dan Rather there will a spot for Poli-Grip. If you were the brand manager of Poli-Grip, you’d want that ad seen by people who don’t have teeth. That’s your target.
My question is, what percentage of the people who watch the news tonight and see that ad don’t have teeth? Let’s presume for a minute that 10% of the viewers of that ad don’t have teeth but 90% do have teeth. That Poli-Grip brand manager, he just wants to target the toothless.
What we’re really discussing is the concept of effective CPM. In other words, if he pays $10 a thousand to reach all of the audience, his effective CPM is $100 a thousand to reach the 10% who have no teeth.
In the future, with on-demand television, we may be able to run an ad on the news that says if you’re interested in the latest innovation in dental adhesion, please click your remote control now and we’ll download into your TiVo machine a three-minute video on the latest news in dental adhesion.
Now what have you done? You’ve corralled an audience. You’ve now moved away from the mass media, and 100% of the people who watch that video will have no teeth.
I believe one role of media in the future will be to use mass media to corral people like cattle, to drive the herd from mass media to a more targeted media delivery system. Clients will pay for broad reach in an attempt to get people to opt into more targeted forms of communications.
With that you’ve got closed-loop communications, you’ve taken someone from mass media to a targeted media for one-to-one marketing, and you’ve created a virtuous circle. In my mind that’s where media is going.
David Verklin will be the keynote speaker at the CMDC conference ‘Media’s New Metrics’ at Toronto’s Metro Convention Centre on April 2. See www.cmdc.ca for details.
