Talk about interesting news from a an unexpected source. Bob Liodice, CEO of the Association of National Advertisers, has posted to his blog about how the TV advertising industry is eating itself. Here’s a taste:
Measurement: C’mon now. In this world of technology, why can’t marketers get their hands on affordable commercial ratings data? Not only are marketers getting slammed with overpriced CPMs, they may be overpaying even more because their buys are based on inflated program ratings rather than realistic commercial ratings.
Personally speaking, I can’t understand the processes that end up with an advert appearing on television. I don’t know how the cost gets justified, I don’t know how the results are measured, I don’t know how they get away with it, frankly. I always thought the story about Jeff Bezos’ TV advertising experiment was very revealing.
In fact, this is a general thing that we’ve done that has been very helpful to our business. About three years ago we stopped doing television advertising. We did a 15-month-long test of TV advertising in two markets – Portland, Oregon, and Minneapolis – to see how much it drove our sales. And it worked, but not as much as the kind of price elasticity we knew we could get from taking those ad dollars and giving them back to consumers. So we put all that money into lower product prices and free shipping. That has significantly accelerated the growth of our business.
At this point I should probably be pointing potential advertisers towards a medium where you only get what you pay for in terms of audience, and where results are measurable and meaningful….
(Via Micro Persuasion.)