April 13, 2010

Why We All Need Mass Media


By Spyro Kourtis, President of Hacker Group

Do you ever feel like there's a new business model coming out every day of the week?

I just heard Radiohead is basically letting buyers name their price for the digital version of their new album -- at least for awhile. After a $2 transaction fee, you can take the music and run. It's a great way to continue to build a fan base. And it must feel pretty good to be able to thumb your nose at the record labels.

In fact, according to one blogger, album sales mostly line the pockets of the record labels. Where the musicians themselves make money is through concerts. So I guess this isn't really a new business model. It's called a loss leader. And it'll probably work, since Radiohead no longer needs the marketing support record labels provide their artists.


Ever since the Internet era began, someone has been trying to figure out how to monetize content -- content that's easy to steal. Radiohead decided not to worry about it.

TV and radio built the free-content-paid-for-by-advertisers model that many people are hoping will work for the Internet. It looks good so far. But I remember when people thought email marketing would kill direct "snail mail" not so many years ago. So I’m not banking everything on it quite yet.

Bill Gates has already predicted the death of the yellow pages. Not a stretch, really. About 80% of Americans have online access now. Local search is just more convenient -- in fact, most of the local search data used online comes from yellow page publishers.


It's not news that newspapers are losing readers to the Internet every day.

Mass broadcast media have been fragmenting since cable TV really got going.

It turns out that this fragmentation is potentially disastrous -- and not just for mass marketers.

Of course, buying TV media that would reach 50 million TV households for several million dollars, like you could back in the day, sounds like nirvana now. Today, if you want to "buy Thursday night," it would be a complicated, incredibly expensive nightmare. Fifty-seven channels (and nothing on) sounds like a laughably small number. At this point, your only options are to buy the Super Bowl and the Oscars. Good luck on that early fall product launch.


That's a problem if you're Coke or McDonald's. Your "target" is just about everyone under age 102. It takes a lot of resources to put together an intelligent plan. What's more, you have to wonder if your message gets lost among all the more relevant appeals. If you're advertising Coke during a cable show about tennis, does your spot need to be about tennis? Do you need a different spot on Animal Planet? It's not just a media-buying question anymore. Fragmented media will cost you more in a lot of different ways.

Your problems aren't solved if you have a tighter target. If you sell organic dog food, you can focus on the media outlets that serve your audience -- but you might be missing an awful lot of dog owners (and potential dog owners). Plus, your cost per impression will be sky-high, partly because all the mass marketers with big budgets will be in your space, too.


What to do?

Our jobs as marketers are going to get harder, not easier. It's not about a big creative idea anymore. It's about big ideas in every area of the clients' business, too -- product, media, offer, everything. You have to jump in and try something. Don't wait and see what happens. Start working on something in an area that isn't in the middle of your comfort zone. That's the way to put your stamp on the evolution of new media.


Spyro Kourtis, president of Hacker Group, oversees his agency's strategic planning and relationships with a number of Fortune 500 clients including AAA, Expedia, Hilton Hotels, IBM, Intel, Microsoft, MSN, Oracle, VISA, Washington Mutual, WebEx and World Vision. He is publisher of High Performance Direct. He can be reached at skourtis@hackergroup.com.

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