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					       LAUNCH!
       Advertising and Promotion in Real Time

       Michael R. Solomon and Lisa Duke Cornell


       PART I. A PREQUEL

       Meet SS&K: A Real Agency with a Real Client
       “I believe today’s marketing model is broken. We’re applying antiquated thinking and work
systems to a new world of possibilities.”
        Jim Stengel, Global Marketing Officer, Procter & Gamble



       Why Launch?
        Yes, the model may indeed be broken – but there’s still time to fix it! And what’s more, we
can say the same about education. The textbook publishing industry is undergoing staggering change
and many traditional business models and practices are quickly losing relevance. Peer-to-peer
textbook trading networks, online used book sellers and a gray market whereby low-priced
international editions displace expensive U.S. texts are pushing publishers to reconsider outmoded
ways of delivering content. Likewise, the digital natives who comprise our university student bodies
are inspiring educators to conceptualize the transfer of knowledge in exciting new ways. How do we
best communicate the most current thinking in our disciplines to students who expect up-to-the-
minute information at a keystroke and view educational materials as community – indeed, world –
resources that can and should be freely shared and interactively constructed? To address this question,
Flat World Knowledge (FWK), an innovative, open source publishing company has created a new
kind of text – one premised on the idea that college course material can wield wider influence and be
of greatest public benefit as it becomes easily and inexpensively available to anyone with a desire to
learn.
        Launch! Advertising and Promotion in Real Time, is the first free, open source text for
advertising and marketing classes. A new alternative to introductory texts that can cost into three
figures and provide information that is extraneous or outdated, Launch! offers a basic text at no cost
to students. Instead, revenue is generated through individually priced supplemental materials such as
study guides, podcasts and streaming interviews (a la iTunes), user-generated content, advertising
data sales and corporate sponsorships.
         There’s something else that’s really unique and cool about Launch! Welcome to the first
advertising textbook actually written in partnership with a real life advertising agency. It’s fine to talk
about ad campaigns from the past, but we’d rather hear it from the horse’s mouth. We’re going to
teach you about the ad biz the way you’ll learn it if you choose to make it your career (and we hope
you do). None of that shiny happy “talking heads” stuff; we’re going to take the gloves off and show
you how a campaign works (and sometimes doesn’t) from the vantage point of the people who have
to do it every day. Prepare to launch!




       Meet our Agency Partner
       Get to know Shepardson, Stern and Kaminsky (SS+K) as it works on a campaign for
msnbc.com, a well-known brand in search of an identity. SS+K opened doors in 1993 and employs
over 100 people (CHECK) in its offices in New York, Boston and Los Angeles. With over $70
million dollars in billings (CHECK), SS+K enjoys a cross ownership agreement with Creative Artists
Agency [CAA], perhaps the most powerful talent and literary agency in the world, and a market
research and trend forecasting company, Intelligence Group.




       (Update with real website when available)
         For this text, we interview the agency partners, creative director, account people, the
copywriter/art director team, the public relations experts, the account planners/research specialists,
and the digital professionals who took the msnbc.com campaign from pitch to completion.
         Through their words and documents, you will follow, step-by-step, the thirteen-month process
of bringing SS+K’s vision of “A Fuller Spectrum of News” to light. SS+K granted FWK free access
to their creative work, internal processes, client and employees for the development of the inside story
on how the msnbc.com campaign was created. The result is a resource that offers new ways to teach
and talk about the real world of advertising with course content that is affordable, accessible, timely
and relevant. Welcome to advertising education on steroids.
Here’s how we got started:



            FOLLOW THE E-MAIL TRAIL


From: Lisa Duke [mailto:lduke@jou.ufl.edu]
Sent: Thursday, June 28, 2007 2:15 PM
To: Russell Stevens
Subject: Upcoming interview

Dear Russell,
Greetings! I thought you might like a little background on me before we meet for your
interview July 9/10. Before becoming an academic, I worked in advertising and still
find the business fascinating. You can find me at
http://www.jou.ufl.edu/faculty/facultydetail.asp?id=lduke. I look forward to talking
with you about your career and your contributions to the msnbc.com campaign.
Our interview will be videotaped and edited for use with a college advertising
textbook. James Guardino is the director/producer who will be in charge of the taping.
You may remember him from some work he did for SS+K that can be
found here: http://arguspictures.com/reel.html.
You don't need to prepare for our interview. Our talk will be informal and I won't
ask anything you need to look up or think too hard about. This should be an enjoyable
experience, not a challenging one. To maximize your ease and add interest for the
students, we would like to record the interview in your office.
Can't wait to return to NY and immerse myself in the SS+K culture. If I can answer
any questions before we meet, please let me know.

Best regards,

Lisa Duke Cornell, Ph.D.

Advertising Department

University of Florida
       Who They Are
        SS+K’s principals cut their teeth working on political campaigns and they are now
orchestrating Barack Obama’s quest to be president. SS+K specializes in non-profit work; one of
their best-known efforts is the Lance Armstrong “LIVESTRONG” campaign.
        They understand how to work with short lead times and mine for deep consumer insights that
animate their work. It’s a combination that has made them increasingly popular with a growing roster
of influential clients outside the political arena, including Delta Airlines, Polo Ralph Lauren – and our
client for this book, msnbc.com.
        Launch! unfolds chapter by chapter across a timeline for msnbc.com’s first branding
campaign. Before we get into that, let’s meet the cast of characters:

       Meet the SS+K Team assigned to the msnbc.com account:
       NEW YORK                           LOS ANGELES                                BOSTON

       Amit Nizan –                           Joe Kessler – Partner                  Russell Stevens – Partner

Adv*
       Sam Mazur – Creative                 Melinda Moore –
                                      Marketing
       Matt Ferrin – Creative                 Janetti Chon – PR

       Danielle Tracy – PR                  Ronit Mevorach –
                                      Marketing
       Katie O’Kane – PR

       Michelle Rowley – AIU

       John Richardson – AIU

       *Highlighted should link to interview pieces already included in the text

       [LINK TO CH 1 BIOS FILE]
       How They Work


       SS+K does not consider itself an advertising agency, but a strategic marketing
communications firm that solves problems through a variety of innovative techniques – not
necessarily advertising. Elaborate here a bit if possible



             SS&K SPOTLIGHT
         Here’s how one of the agency’s founding partners describes the SS&K difference:
         Joe Kessler VO:         My name is Joe Kessler, Joseph Kessler, and I’m a partner at SS+K in
charge of our Los Angeles office….
         Dr. Duke:        …What do you think has put you there, because everybody is doing research.
Everybody thinks outside the box, everybody – and, you know, everybody theoretically integrates.
Everybody says they do these –
         Joe Kessler: Well, the difference is, and this may sound pedantic in a way, I mean, the
difference is that there are a lot of people who say they are doing it, but over time, clients and the
media and the annals of the people who follow the industry begin to know who’s really doing it and
who’s not, for whom it’s a sheen and which agencies are sort of born into it, and we were sort of born
into it and that has everything to do with our political roots. So, our political roots gave way to this
idea that even if you are responsible for a particular function, that doesn’t mean that you are solely
responsible for that function, and that a winning campaign in a political environment was usually the
one that had the best confluence of all these different disciplines where you have the best brand, the
best PR, great advertising, you know, you did the ____, the guerilla stuff really well, the ____ teams,
you know, your mobilization efforts are the best. All those things came together and nobody was
singularly responsible for any one thing.
                 So, that gives us a degree of credibility in terms of how we say it …I mean, I went to
“integrated pitches” when I was a IPG representing the agency that I was working for, when I was
meeting senior people from other agencies at IPG that I was literally meeting in the lobby on the way
up to the meeting. Now, didn’t we do a good job of faking it? Probably did, but at a certain point the
clients find out. At a certain point the clients know and I think that reputationaly that sort of catches
up with you after a while and, you know, there’s some hype around these things now, but at a certain
level, the reality, particularly when clients have dollars on the table, they’re trying to separate reality
from fantasy. I think we’re real and I think people know that. We’re the real deal. We started this
way 13 years ago and we’ve already made the mistakes that other people are just starting to make now
in terms of this idea of being non-traditional and integrative.
         Not everyone – there are obviously a lot of other firms doing it well, too, but everyone is not
doing it well, even though everybody is talking about doing it well and they can’t say it with the same
kind of credibility that we can say it with.
         Dr. Duke:        What are some of the mistakes that the other agencies are going to have to
make before they get _______?
         Joe Kessler: One is that integration does not mean one-stop shop. In other words, the
biggest misnomer, and I’ve learned this frankly since I’ve been at SS+K, since I was part of the
significant initiative at IPG to “integrate,” was that integration – and so at IPG, at least – and I’ll
speak to three years ago at IPG when IPG was all hot on integration and being non-traditional,
integrated non-traditional meant – integrated meant we’re going to have an ad agency, a PR agency, a
direct mail agency, and event company and we’re going to take this portfolio of companies and we’re
going to have them all work on one project. They may all have a different process to how they get
there, and by the way, we did all have different process. There may be different levels of people, the
financial workings might be different, all those, and the contract are probably different, the
contractual terms with which you work with clients are different. All those things are different, but
we’re going to put them ____ and out of the box, non-traditional meant we’ll also have a digital
person in the room. Okay, so that’s what that meant, okay, and I think to a certain extent it’s still like
that. ..
                 I think – the mistakes that they’re going to make is when they win, and by the way, if
you’re investigating this issue, I would definitely take a look at the relationship that was sold to and
then executed for IPG for Bank of America, and it was done exactly this way, and it was heralded at
the time. The trade press, oh my God, IPG first integrated – I don’t know if it was the first one, but it
was one of the first big integrated, you know, where a company, in this case this bank, bought a
holding company, right, and under the guise of this sort of integrated approach across all these
different disciplines. And what happened was what you would expect to happen. Contradictions and
conflicts around contract terms, around creative process, around how you approach things
strategically, around language. Language is a big issue, you know, PR people and direct mail people
and advertising creatives and online, they all speak different languages, and if you don’t figure out
ways to get people to speak the same language, you don’t create a culture where the language of the
culture is about that culture and not about your discipline. It will also be that way, so language was a
big issue.
                 We would sit in meetings and I would talk to my compatriot who –I was a Weber
Shandwick and this person was a Jack Morton, and they do sort of events and promotions, and even
though we thought we had an agreement on something, we actually didn’t have an agreement on it
because I thought I knew what he was saying, but I didn’t really know what he was saying, or he
didn’t know what I was saying, because he didn’t really understand my world the way he could. So,
language is a big issue.
                 So, what happened, in the execution of all that, once you pitch it, you sell it, you get a
client, you win it, when the mistakes start to occur is in the execution of it starting with the very basic
relationship issues of who leads, who follows, how so, process, contracts, pricing, all of that stuff.
And then when it comes down to the real nut of it, which is execution of the program, then it elevates
like by ten times because what a strategic concept or a creative concept means to one person is going
to mean something completely different to somebody else.
                 So, we have like this reflex action. When we have an assignment – I just went through
a thing this morning with – an hour with a client where we are reformatting a team for this client. I
tried to explain to this client why were doing the team that we’re doing. We have a reflex that we’re
putting on this. We have a reflex action that says when we see an assignment in front of us, we know
exactly what 12 people or six people or eight people to put in a room. We just know like right out of
the gate. It’s these people from AIU, it’s this person from – this creative team, these people from PR.
Some of that is business driven. Some of it is like somebody has capacity of whatever, but most of it
is like we know who the six or eight best people are for that assignment immediately, even though
they may be from five different disciplines. And that’s a significant advantage and I think that’s
where a lot these “integrated,” you know, non-traditional, out-of-the-box entities are making
mistakes. They can sell it well, but they can’t deliver it well.




       X pre-launch




       The MSNBC.com Campaign: 13 Months to Launch
      ADD SOME BACKGROUND RE GENESIS OF MSNBC.COM, ITS MARKET
POSITION/COMPETITORS ETC. –SET UP THE CHALLENGES OF THE CAMPAIGN….

        In March of 2006, a decade-old msnbc.com announces it will soon launch its first branding
campaign. Established in 1996 as a joint venture between MSN and NBC, msnbc.com finds itself in
an increasingly crowded field of news providers and hopes to add new users to its 25 million unique
visitors a month. Msnbc.com’s new VP-marketing, Catherine Captain, says, “I am particularly
concerned about distinguishing ourselves in a market where every new site is starting to look a lot
alike.”
        Captain chooses SS+K to reintroduce msnbc.com to the world. Her goal is to maximize the
impact of her modest $7 million marketing budget. Instead of choosing an interactive agency, which
she says would “predetermine her plan,” Captain prefers the “discipline agnostic” approach of SS+K.
        The idea of integrated marketing communications has been around for a long time. But the
independently held SS+K has embraced the concept in a way that only people from a disparate
number of camps could: there are no well-populated traditional territories in the agency. Instead, it is
home for multidisciplinary cast of communication experts as well as a panoply of “formers”-- former
actors, scientists, journalists – galvanized by a combined passion for strategic innovation and, as
Captain observes, challenging the status quo. There is no allegiance to method or medium;
advertising doesn’t get preferential treatment over public relations or other buzz boosters.
        IMC, SS+K-Style Lisa: We haven’t defined IMC yet….
        (Link to Joe Kessler, discussing IMC at sS+K. NOTE: THIS IS AUDIO-ONLY MATERIAL)
        .
PART II. FOUNDATIONS OF THE AD BIZ


Chapter 1 Advertising and Promotion Essentials




               Here’s your Chapter Roadmap:

1. Evolution of Advertising in the U.S. ............................................................................... 1
1.1. Background and History ............................................................................................... 4
1.2. Types of Advertising/Promotion .................................................................................. 5
2. Industry Structure .......................................................................................................... 10
2.1. Types of Agencies ...................................................................................................... 10
2.2. How Agencies are Compensated ................................................................................ 11
2.3. Types of Clients .......................................................................................................... 13
2.4. The Advertising Value Chain ..................................................................................... 14
2.5. Careers in Advertising ................................................................................................ 14
Launch! Chapter 1 dr1          November 2007



       “Advertising is in trouble only if you think of the narrow box advertising has traditionally
been in, which is getting on TV or in print.”
        Linda Kaplan Thaler, Founder, Kaplan-Thaler Group, fastest growing US ad agency.

         This is not a book about advertising.
         This is a book about touching consumers where they live – and work and play.
         Hammers and screwdrivers have done the trick for years, but marketing communications
professionals have just been handed a whole new box of power tools. The marketing “to do” list
is long and so is the list of instructions.
         Agencies and their clients have been sorting through the box for the past decade, trying to
fit the most effective tools to the job, while all the while, the world of technology keeps adding to
an increasingly daunting pile. It’s hard for some experienced advertising professionals to let go of
what they “know.” “There’s still a little fear out there about shifting away from the traditional
marketing tactics,” says Doug Scott, executive director for branded content and entertainment for
the North American operations of Ogilvy & Mather Worldwide, part of the WPP Group. 1
         Fifteen years ago, advertising agencies were defined by the essential tools they used:
television commercials, radio spots, billboards, prints ads. But today, traditional advertising
approaches, even in the hands of our most skilled and lauded practitioners, are no longer good
enough.

     (insert ad age article) LISA: I WOULD AVOID THIS AS A RULE – WE’D HAVE TO
PAY A FORTUNE IN PERMISSIONS. ALWAYS BETTER TO SUMMARIZE RELEVANT
POINTS FROM THE ARTICLE MS

       Summarize what happened to Wieden….. Wieden and Kennedy didn’t lose the entire
Nike account; only $15 million of the $1.4 billion account was ultimately reassigned.2 Still, the
Nike account, which has been W+K’s for longer than most of you have been alive (24 years), “is
extraordinarily gifted in keeping us awake," according to Dan Wieden.
       Staying awake is the only way to stay alive.
       But, generally speaking, advertising agencies have been sleeping with their eyes open.
According to an online survey of 184 marketers recently cited in the Wall Street Journal “Less
than 24% of those polled considered their companies "digitally savvy," citing several issues,
including "lack of experience in new media" and "dearth of digital talent…"3


       What is happening to advertising?

       Transformation. A melding of forms and disciplines. Evolution of species.

       Despite conventional definitions and expectations, we are learning advertising isn’t just
about ads. Messages that sell may not originate with marketers or agencies, but rather with
YOU. Marketing messages may not be paid for by advertisers. They are multi-national and multi-
dimensional, providing any combination of information, identity and entertainment.

                                                                                            1
Launch! Chapter 1 dr1         November 2007


       They don’t stay in place. Today, most any place is ad space. (Dunkin’ Donuts didn’t just
want to get their ad in your brain; they wanted your forehead as a human billboard.)

        By emphasizing the visual and experiential, postmodern marketing messages are difficult
to analyze critically. By incorporating authentic experience and online collaboration, new
marketing is impossible to predict and control.

        There is a fundamental change in the advertising vehicles themselves, and media and
technology converge. Traditional radio is losing share to digital options, online “television”
viewing is increasing popular, and marketers continue to divert print dollars to online budgets.
4
  Once thought to be a specialty type of advertising, now interactive/online approaches are viewed
as a fundamental for engaging consumers. Yet in an article on how advertisers are seeking less
intrusive, more measurable ways to deliver online messages, The Wall Street Journal reports,
“…Many sites and advertisers remain in the throes of experimentation, with mixed or
disappointing results to date. Some say the industry hasn't yet figured out how to make video ads
as interactive and effective as they can be.5

         Clients are similarly challenged. Last year, when it seemed the entire world was
enthralled with the power of blogging. No longer constrained by what advertisers want you to
know or believe about a product, now you can ask your neighbor or a Norwegian sitting in his
living room about that new bottled water you’ve been thinking about trying -- all it takes are a
few well-chosen key words. It didn’t take long for marketers to ask how blogs could be used by
companies interested in using this form of online word-of-mouth for their own purposes.
However, as recently 2006 a poll showed just how far Fortune 1000 executives have to go to
catch up with the consumers with whom they hope to engage in dialogue. Only 30% claimed to
understand the meaning of the term “internet blog,” while 12% reported their companies had
resorted to legal action to stop a blog that someone else had posted about their company!6 The
executives know there is a new tool out there. Most don’t understand or use it themselves. But
their first instinct is that it must be reigned in and controlled.




                                                                                         2
Launch! Chapter 1 dr1         November 2007



     Like many marketers now, they are battling twin fears:
Being late to the game. And lacking the proper skills
required to play. The danger is in choosing non-traditional
routes uncritically because they have the cachet of being on
the “bleeding edge.” According to Marc Schiller, chief
executive of digital-marketing shop Electric Artists, "There
is always this pressure of saying we weren't early enough on
MySpace. We weren't early enough on Facebook....Suddenly
there is this herd mentality and people are doing it because
they feel like if they are not there, they are missing out"7.
       In a business like advertising, that prides itself on cultural currency, there is always a
temptation to choose interactive solutions solely because you can. Sometimes, however, the best
                                         vivid yellow
answer to a marketing problem is as low-tech and simple as the
LIVESTRONG bands on your friends’ wrists. By the way,
                       tm

if you wear one of those you can thank our good friends at
SS&K! (VERIFY THEY DID THIS)
        [We probably need a better mechanism to introduce our unique timeline/chronological
TOC structure and explain how this will organize the book, either here or in the Prequel???
Maybe a section like How an Ad is Born where we present a generic version of our timeline and
lay out all the steps we’re going to be covering with specifics from msnbc…I think it’s important
to impose the book structure/timeline aspect early and often.




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Launch! Chapter 1 dr1         November 2007




       The Evolution of U.S. Advertising
       Although we’re excited about the wild and woolly new world of promotional media,
however, we have to walk before we can run. So let’s take a step back and first learn a bit about
where advertising came from, and how it’s traditionally still done today.

       1.1. Some Quick Background and History
              * Advertising in the US began before we were even a nation. Colonial
Americans saw ads on posters and in newspapers -- the first newspaper ad was for real estate and
appeared in 1704.
              * The true rise of advertising, however, coincided with the Industrial
Revolution, for three reasons.
                 -                First, technologies enabled mass production of consumer
goods, which meant that companies could grow to a larger size and could make many more
products. Companies now needed to find ways to sell all the products they could make.
                  -                 Second, the same technologies that made mass production
possible made mass media possible. The invention of the rotary press in 1859 and the invention
of making paper from wood pulp in 1866 enabled mass production of newspapers, which in turn
provided the medium to distribute ads to more people.
                  -                 Third, the railroads linked the nation and provided a way
to get newspapers and mass-produced products into towns across America. The first national
brands -- Quaker Oats, Ivory, and Kodak -- took off at this time, with the birth of mass media.
                  * Early examples of mass media include the New York Times, which published
its first issue in 1851, (it was then called the New-York Daily Times). The New York Tribune
doubled its advertising between October 1849 and October 1850. The magazines Harper's
Bazaar and Vanity Fair debuted in 1867 and 1868, respectively. By 1870, 5,091 newspapers
were in circulation.
                * National brands like Quaker Oats -- the first mass-marketed breakfast food --
were introduced in 1878. Ivory soap followed in 1879, and in 1888 Eastman began advertising
the first hand-held Kodak cameras. Capitalism also fueled advertising. Capitalism created a
growing middle class who could afford to buy an array of consumer products.
               * The growing competition in consumer goods and the rising prevalence of ads
sparked the rise of the advertising profession. As competing consumer goods firms grew and
more products were available on the market, the need for distinguishing one's products from the
competition drew the need for professional advertising agents, and advertising grew from an
emerging to a legitimate profession. In 1890, J. Walter Thompson Company (the oldest
continuously-operating advertising agency in the US) had billings totaling over one million
dollars.


                                                                                         4
Launch! Chapter 1 dr1          November 2007


       1.2. Types of Advertising/Promotion
             *     Media channels: Today, the realm of advertising has expanded vastly
beyond newspapers.

        In Target's never-ending quest to be hipper than the competition, the retailer plans to
showcase its designer apparel in a spooky sort of fashion show: Clothes and accessories will
dance and prance on the runway sans models -- and sans apparel. Instead of real models or
clothing, the retailer will stage the fashion show using holograms -- two-d moving images that
give the illusion of having three dimensions. The holograms will be projected at Grand Central
Terminal in New York City on Nov. 6 and 7, repeated every 10 minutes. To widen the audience,
Target plans to post a video on YouTube, Facebook and Target's own Web site.8

       Take a look at all the media channels for advertising:
                   -                  Print advertising, which includes
              - newspapers (which can be national, state or local)
              - magazines (which, like newspapers, can be geographical or they can be subject-
based, such as Dog Fancy, which reaches dog lovers across the nation.
               - Direct mail is advertising sent directly to people's homes through brochures,
letters and catalogs.
              - Specialty print media such as booklets, folders, and CD/DVD inserts.
           - Broadcast
             - TV is the most well known broadcast medium, and it can be subdivided according
to major networks, independent stations, cable, broadband and satellite.
            - Radio, which was the first broadcast medium, (bringing free advertising to
American homes from the 1920s onward), can be local or network
                   -                  Outdoor
              - Also known as "out-of-home" advertising, outdoor advertising includes
billboards on roadsides, posters on transit (buses, subways, rail, airports trucks and taxis) and at
gas pumps and on park benches.
                   -                  Point-of-purchase
              - Point-of-purchase (POP) displays refer to displays next to cash registers -- the
point at which people are ready to make their purchases. The coupons and sweepstakes entries
you get on the back of your receipt at the grocery store is another example of POP advertising.
                   -                  Internet
              - Pop-ups, pop-unders, banners, and text ads associated with web pages provide
targeted online advertising on the web.




                                                                                             5
Launch! Chapter 1 dr1         November 2007


          In their pursuit of advertising dollars, Internet companies are winning
          some important converts: the consumer packaged-goods companies that sell
          everything from cookies and cola to skin cream and soap.
          After years of cautiously experimenting with Web marketing, powerhouse
          advertisers like General Mills Inc. and Kraft Foods Inc. are cranking up
          online spending and increasing the range of brands they promote on the
          Web. General Mills, maker of Cheerios and Betty Crocker baking mixes,
          expects to nearly double online-ad spending in the current fiscal year.
          Kraft, home of Jell-O and Kool-Aid, plans to double its number of
          online-ad campaigns in 2006 and to increase the number of brands it
          advertises on the Internet by at least half.
          The shift underlines the Internet's threat to traditional media such as
          television and print magazines. It suggests that the boom in Internet
          advertising that has already fueled rapid revenue growth in recent years
          at Google Inc., Yahoo Inc. and other companies could continue as still
          other groups of more traditional advertisers step up online spending.
          The packaged-goods companies say their customers are spending more time
          online and using the Web in new ways, such as watching TV shows and other
          video. "Our job is to invest in where consumers are engaging with media,"
          says John Galloway, vice president of sports, media and interactive
          marketing at PepsiCo Inc.'s Pepsi-Cola North America unit. At his
          division, online spending is expected to rise to between 5% and 10% of the
          overall ad budget in 2006, from 1% five years ago.


          Providers of consumer packaged goods accounted for more than 11% of the
          $145 billion in U.S. ad spending in 2005, according to research firm TNS
          Media Intelligence. But they spent just 1.6% of their ad dollars online
          last year, on average, compared with an overall average of 5.8% of total
          ad spending for U.S. advertisers, says TNS. These advertisers have been
          the most challenging targets for Internet companies, says Wenda Harris
          Millard, chief sales officer at Yahoo. That company has overcome some of
          their resistance by wielding new tools to show that Web ads can increase
          consumer spending.
                                                                                       6
Launch! Chapter 1 dr1         November 2007


           U.S. consumers go to the Web for about 15% of the time they spend with all
           media, according to another research firm, Knowledge Networks Inc. in
           Menlo Park, Calif. Some Internet executives believe Web spending will echo
           the patterns set in earlier years with broadcast and cable TV, which both
           saw sharp growth in advertising once they reached a critical level of
           consumer adoption.9




                  -                 Sales Promotions
              - Premiums are logo-emblazoned cups, calendars, pens and logo clothing; these are
handed out at tradeshows, festivals, or by sales people.


     THIS SECTION NEEDS EXAMPLES OF AS MANY TYPES OF ADVTG FROM
SS&K AS WE CAN GET! (e.g., print ads, premiums (Armstrong bracelets:, etc.)
              *   Hype v. Buzz: Consumer-Generated Media and WOM
                   -                 These days, many advertisers strive to get consumers to help
get the word out about a product or service. The reason is simple: people trust the
recommendations of others more than they trust paid advertising. Almost 90% of people say they
trust recommendations from consumers compared to less than 50% who trust radio ads and less
than 10% who say they trust online banner ads.10
              -   Word-Of-Mouth (WOM)
               - Word-Of-Mouth (WOM) originally referred simply to verbal, informal
communication between two people. It has now become a potent marketing tool, as WOM
marketing seeks to get people talking about a product or brand and generate excitement and buzz
about it. There's even a trade association, WOMMA, the word of mouth marketing association,
dedicated to "pioneering the art and science of amplifying genuine consumer enthusiasm." 11
WOMMA provides an “incomplete list” of eleven different types of WOM marketing – this
includes everything from X to Y. 12 Companies are increasingly turning to WOM as a
legitimate -- and planned -- source of advertising, not just as a serendipitous event.
               - The founder and CEO of Chipotle restaurants, for example, says that traditional
"…advertising is not believable." Instead, he relies on WOM -- people telling friends, or even
strangers, about Chipotle's food. One way he fuels that WOM is by carefully-timed giveaways.
When a Chipotle restaurant opens in a new location, the company often gives away free burritos -
- and gets lots of media coverage and new-found spokespeople in return. The strategy works --
Chipotle has had double-digit increases in same-store sales for nine straight years and is tops
among quick-serve Mexican chains. 13


                                                                                        7
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                   -                 Consumer-Generated Media
               - Unlike paid media of traditional advertising, consumer-generated media is
created by consumers. The most common examples are blogs, forums and message boards.
According to the Pew Internet & American Life Project,40% of the content on the Internet is
consumer-generated. Consumer-generated media isn't just text -- it includes videos, photos,
images and podcasts. Consumer-generated media is important because consumers consider it to
be more trustworthy than other forms of advertising. Let’s take a look at the most important
varieties of consumer-generated media:
                                                    -Consumer-Generated Advertising
                  Consumers often want to be involved in the storytelling, whether they are paid
or not. Chevrolet invited anyone to make a commercial about its Chevy Tahoe and put it on the
Tahoe website. Chevy provided video clips and music; users did the rest, adding their own
words, videos, etc. Over 30,000 people participated. Some ads touted traditional benefits.
Others lambasted the SUV for adding to global warming. Chevy, however, took it all in stride
and didn't censor any of the negative ads. The point, they said, was simply to get consumers
engaged with the brand.
                                                    -Viral Marketing
              - Viral marketing means actively encouraging individuals to pass on a marketing
message to others. Like viruses, such strategies hope to get a high pass-along rate from person to
person. Viral marketing often provides an incentive (e.g., reduced rates for people on your
"friends and family" list) that induces people to spread the word. If one person tells 20 friends
and they each tell 20 friends, a viral campaign can build growth exponentially.



       Follow Up:      : Check out the “Subservient Chicken” at
www.subservientchicken.com Who is behind this outrageous stunt? How is it an example of
viral marketing?


                   -                 "Guerrilla" or "Street" Marketing
               - Generating WOM and buzz often means getting the word out through interactions
on the street. Guerrilla marketing tactics go to great lengths to find new ways to capture
consumer attention. Dunkin Donuts paid college students to use their foreheads as advertising
space for the brand. WOM campaigns are often considered "Guerrilla" or "street" marketing
because they are typically done on a smaller scale, local level and with a small budget. Chipotle,
with its heavy emphasis on WOM and buzz, spends only 1% of revenues on advertising,
compared to rivals like McDonald's and Taco Bell that spend 4% or more -- a fourfold
difference.




                                                                                          8
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       Follow Up:         Want to participate in a WOM campaign? Go to www.bzzagent.com
and sign up to be a “Bzz Agent”


                   -                 Media Buzz
                - Creating a newsworthy event can cause local or national broadcasters or
journalists to talk about you and your products. The result is free airtime and lots of WOM. A
60-second news piece on the evening news about your wacky promotion is worth far more (and
may cost far less) than buying 60 seconds of TV ad time.
                   -                 Critical Success Factor: Riding the thin line between buzz
and hype
               - The key, however, is to generate buzz, not hype. Buzz is WOM that's seen as
authentic because it is generated by consumers and feels true. Consumers see hype as planted,
artificial, manipulative, and disingenuous.



                  DIG DEEPER: How believable are advertisements that big companies sponsor?
Is buzz truly more effective than a glitzy ad with a highly-paid celebrity who tells you to use a
company’s product or service? Find some cool print ads and show them to your friends. Ask
them to talk about how effective they think the ads are and why they do or don’t make it more
likely that they’ll actually buy the advertised brand.


               *   Ad-Supported Content
                    -                 Through ad-skipping of TV ads, ad-blocking of web ads,
and declining readership of print media motivate ad agencies to look for new ways to get their
clients' brands noticed. This means moving away from traditional advertising and the model of
adding pre-packaged ads to pre-created content. Ad-supported content (content that is
explicitly created or modified to feature products or services) has grown exponentially in the past
5 years.
                   -                 Product Placement
               - Product placement builds an advertiser's product or logo directly into the plot
and scenes of a TV show or movies. For example, an episode of "Desperate Housewives" had a
scene in which one character agrees to promote Buick LaCrosse in a shopping mall. A 20-
second spot on "Desperate Housewives" costs about as much as a 30-second commercial --
$400,000. If you've seen a company's logo in a feature movie, you can bet that the company paid
at least $10,000-$90,000 for the privilege of even a brief screen appearance.
                   -                 Branded Entertainment



                                                                                          9
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               - Branded entertainment offers even greater control: an advertising agency works
on behalf of its client to develop a comedy or drama for TV or cable. The network may jointly
develop the show in return for a share of the profits.
                   -                  Advergaming
             - Advergaming is branded entertainment applied to gaming: creating a video game
written completely for the purpose of incorporating the advertiser's product into the game.
                Burger Kinghired Blitz Games to create three advergames featuring its mascot, the
King. As Blitz Games CEO Philip Oliver recalls, Burger King "made it very clear that the most
important thing to them was to engage the target audience with high-quality fun. We were to
avoid creating cheap, generic Flash games with logos plastered everywhere, which is what many
advergames had been in the past." Burger King's internal marketing people created plans for
three games, each of a different playing style. One, "Pocketbike Racer," took advantage of the
popularity of racing games and featured the King racing on a bike. The games sold for $3.99
each -- substantially less than the typical $59.95 -- when purchased with a value meal at a Burger
King. Within 4 weeks, over 2 million of the games were sold, with another 1.2 million sold in the
following months -- enough to be the top-selling games of the 2005 holiday season. The
advergame industry is expected to generate $312.2 million by 2009, up from $83.6 million in
2004, according to Boston research firm Yankee Group.
                   -                  Event Sponsorship
              - With event sponsorship, an advertiser funds an event in exchange for having its
logo or signage displayed at the event or getting naming rights to the event. Indeed, event
sponsorship has a host of sponsorship levels, from sponsoring a single car/truck/motorcycle/etc
to naming a whole stadium. Sponsors benefit not only from the visual images of their logos but
also from having their names mentioned again and again by event hosts.
               *   Is Traditional Advertising Dead?
                    -                  Traditional advertising is not dead, yet. It's true that fewer
people may be watching TV, especially the major networks, but TV is still the medium that
reaches the greatest number of people at the same time. That's why advertisers continue to pay
top dollar to make and air TV commercials. But the industry is shifting from a sell-and-tell
mindset that prevails in traditional broadcast and print media. The new mindset engages people
in a conversation. Broadcast media builds awareness of a brand but, as SS+K's Rob Shepardson
says, awareness is only "the first step of the process." Advertising and promotion must now
build the relationship, too.


       2. Industry Structure
       2.1. Types of Agencies
               *   Full-Service Agencies
                   -                  Full-Service Agencies provide clients with all the services
they need for the entire advertising function. This includes planning, creating, producing and
                                                                                            10
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placing the ads, as well as research before the campaign and evaluation after it to assess the
campaign's effectiveness. Full-service agencies have expanded in recent years through
consolidation -- being bought by larger agencies who want to provide a global one-stop-shop for
their global clients. In the process, the types of services that agencies provide has expanded to
include PR, design and event planning.
               *   Limited Service Agencies
                   -                Some agencies focus on one aspect of the creative process,
such as creative production work or media buying.
               *   In-House Agencies:
                    -                Some companies prefer to retain control over advertising
and set up in-house agencies with the corporation. The in-house agency is typically run by an
advertising director, who chooses which services to buy and which to perform internally. For
example, the in-house agency could retain creative services in-house, creating advertisements
itself and then purchasing media-buying services from the outside. The inside agency may buy
services from a limited service agency or buy services a la carte from a full service agency.
                    -              Why form an in-house agency? The two main reasons are to
save the company money and to give the company greater control over the entire process. In
addition, internal employees may have a deeper understanding of the company and its customers
than would an outside agency. Insiders can also coordinate the promotion better with the firm's
overall marketing program and other functions, such as ensuring that enough products are made
and delivered in advance of a promotion.




                                           [Maybe something here re SSK’s structure and what
they choose to do versus outsource?]




                 DIG DEEPER: Johnson & Johnson has joined a growing list of marketers who
        are dissatisfied with the way advertising firms are structured, and it is calling for more
collaboration between the people who do the consumer research and the people who actually
create the ads.
        J&J's comment comes a month after Procter & Gamble, the U.S.'s
        largest advertiser by spending, offered a similar critique.
        Typically, the communications planning and creative functions
        are run by separate companies, which marketers say often gets in
        the way of sharing consumer insights and finding the best way to
        reach the public. P&G went a step further in its quest for more collaboration. Last
        month, it shifted all its ad and marketing duties for its Oral B
                                                                                          11
Launch! Chapter 1 dr1         November 2007


       brand to a newly created team at Publicis Groupe, which will
       work solely on the brand. The French ad-holding company is putting together a team of
experts culled from different Publicis-owned
       ad and marketing companies to work on the business
       under one leader. P&G spends roughly $6.8 billion annually on
       global advertising.
       P&G is trying to get around the fights over ad budgets and egos
       that lead agencies to favor certain types of media. For example,
       an ad firm may be tempted to suggest a marketer use TV ads to
       get its messages out to the masses because that would allow the
       ad firm to create the ads. If, however, the firm recommends that
       the best approach is actually public relations, then the work would
       likely be given to a sister shop or to a PR firm outside the holding
       company.
       "We find many of our brands are working with lots of agencies
       who all have their own creative people, their own planners, their
       own account people, and it gets to be unmanageable," says Jim
       Stengel, P&G's global marketing officer.
       If its Oral B test is successful, P&G may do the same with its
       other brands. In the past, smaller advertisers have tended to
       follow P&G's lead.
       The effort to bring the planning and creative sides of the process
       closer together is somewhat of a reversal of a big shift in the late
       1990s, when the holding companies spun off media-buying and
       planning into a separate company. The goal was to gain leverage
       on ad rates with TV networks.14




       2.2. How Agencies are Compensated
               * Historically, agencies received a commission from the media for advertising
placed by the agency. The commission would cover the agency’s copywriting and account
service charges. Today, this compensation model makes less as less sense because many
advertising services no longer include a traditional media buy. The straight 15 percent
commission remains, but now, some agencies charge less than 15 percent, or have sliding
scales based on how much the client spends (the more money spent, the lower the percentage
fee). Some agencies offer flat-fee arrangements which are agreed upon by clients and the
agency, while others charge on an hourly basis. Other innovative models include licensing fees
or royalties for ideas. Some are even using performance fees, in which the agency's fee
depends on the success of the campaign. "Success" is defined at the start, and it could be tied to
the campaign (such as the ability to recall the ad) or to actual product sales. Agencies using
performance-based models can earn much more -- or much less -- than the standard 15%
                                                                                        12
Launch! Chapter 1 dr1         November 2007


commission. The rationale, however, is that the compensation would be tied to the value of the
ideas.

       2.3. Types of Clients
               *   Advertisers can be grouped into three main categories:
                   -                 Manufacturers and service providers (like Boeing and
Bank of America)
                   -                Trade resellers (namely retailers like Best Buy or
Starbucks, as well as wholesalers and distributors)
                  -                 Government and social organizations (such as local, state
or federal governments and their specialized offices like tourism boards; and social organizations
from national ones like the United Way to local hiking clubs.)


            SS&K SPOTLIGHT
       SS&K’s client portfolio reflects these categories….some detail re their client roster,
broken down by categories?




       *       How Agencies Link to Clients
                  -                 Account managers (with titles like account executive,
account supervisor or account manager) work with clients to identify the benefits a brand offers,
to whom (the target audience) and the best competitive position. They then develop the complete
promotion plan. At SS&K, XXXXX is the account manager for the msnbc.com account.
DITTO FOR EACH OF THE LISTED JOB FUNCTIONS….
                 -                  On the market research side, account planners from the
agency work with clients to obtain or conduct research that will help clients understand their
markets and audiences.
                    -               Creative services staff (such as an art director or
copywriter) work with clients to develop the concepts and messages that will catch consumers'
interest and attention.
                    -                   Media buyers and media planners evaluate the multitude
of options available for ad placement -- now greatly expanded by the Internet. They decide how
best to allocate the client's budget to use the best media to most effectively reach the target
audience.

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Launch! Chapter 1 dr1         November 2007


       2.4. The Advertising Value Chain
               * A variety of ancillary companies support ad agencies by providing
specialized services. For example:
                   -                 Art studios and design firms create a company's logo,
stationary, business cards, and packaging design for products
                                     SS&K contracts with XXXX co. to do this, etc. for each
listing…..
                  -                  Film/video companies produce film and video for TV and
the web, including infomercials
                   -                 Web designers create internet media for advertising
                   -                 Printers produce printed material for a variety of media
channels
                  -                 Sales promotion agencies handle price discounts, sampling,
rebates, premiums, trade shows, in-store merchandising and point-of-purchase displays
                 -                   Research companies assess channel viewership, ad
response, consumer attitudes, and trends

       2.5. Careers in Advertising
               * If you're interested in advertising, you can work at an ad agency, at an
advertiser (manufacturer, trade reseller or service firm) or in the media.
               *   Jobs in ad agencies (including in-house agencies) typically fall into four main
categories:
                   -                 Account Services
              - Account managers act as the client's representative at the agency, getting the best
work from the agency for the client while still generating a profit for the agency. Account
managers must be good at working with people and acting as leaders or strategists to
communicate the client's needs to the agency team. The best account managers learn as much as
they can about the client's business. The career ladder of position titles in account services is:
assistant account executive, account executive, senior account executive, accounts
supervisor/accounts manager.




                Link to interview with SS&K person holding this position, perhaps talking about
the optimal training/coursework for this job etc.
                   -                 Creative Services


                                                                                         14
Launch! Chapter 1 dr1         November 2007


                - The creative department generates the ideas, images and words of the advertising
message. Art directors (assistant art director, junior art directors, art directors, senior art
directors) develop the artistic strategy of the client campaign, often presenting several concepts
for the client to choose among. Copywriters (junior copywriter, copywriter, senior copywriter,
copy chief) are responsible for developing the words of the campaign. Production staff (layout
workers, graphic artists, production managers) select photos, choose the print size and type, and
oversee the actual printing, filming or audio recording of the campaign.



                Link to interview with SS&K person holding this position, perhaps talking about
the optimal training/coursework for this job etc.


                   -                 Media Services
               - Media planners gather information about people's viewing or reading habits and
combine it with information about specific media vehicles (such as a specific magazine's target
audience, circulation size and advertising space costs) in order to find the best placement for the
advertising. They use their judgment to balance reaching the greatest number of people in the
target group versus keeping the client's costs to a minimum. Media buyers purchase the
advertising space and negotiate prices. They must be good with numbers but also skilled
negotiators -- they'll be working with budgets and responsible for spending their client's money
wisely.



                Link to interview with SS&K person holding this position, perhaps talking about
the optimal training/coursework for this job etc.



                   -                 Market Research
               - Market researchers learn all they can about the target customer -- their wants,
desires, fears and goals. They use focus groups, one-on-one interviews, test reactions to
campaigns and purchase secondary information (such as the total market size in a given
location). Job titles include public opinion researcher, research supervisor, project director,
associate research director, research director and executive research director.



                Link to interview with SS&K person holding this position, perhaps talking about
the optimal training/coursework for this job etc.


                                                                                          15
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               *   Media Jobs
                  -                  Advertising jobs in the media include the advertising
director, who heads the advertising sales department and oversees advertising rate policies,
promotion and the sales staff, including sales planners and sales reps.




        *           Link to interview with SS&K person holding this position, perhaps talking
about the optimal training/coursework for this job etc.
       C orporate Advertising
                     -                Within a company, the jobs of the advertising department
typically parallel those in ad agencies, but there is also an additional category: brand manager.
Brand managers are responsible for all the advertising and marketing for their product or brand.
This includes the marketing strategy, business planning and market research associated with the
brand. The brand manager works closely with account services and creative staff to develop and
implement campaigns best suited for that brand. Brand managers oversee the selection and work
of any outside ad agencies used by the corporation.




                Link to interview with SS&K person holding this position, perhaps talking about
the optimal training/coursework for this job etc.




              SS&K SPOTLIGHT
        SS&K needs to have a formal management structure, and this is what it looks like.
However, the agency doesn’t tend to pay much attention to formalities, so these little boxes
aren’t as solid as they look….




                                                                                        16
Launch! Chapter 1 dr1                            November 2007




               INTRODUCING THE SS+K ORG CHART
               [HOW WE’RE ORGANIZED, NOT HOW WE WORK]                                                                                                1

                             Management                                         Managing Partner
                              Committee                                              Rob


                                                                                                                       HR
                                                                                         COO                           Accounting [Jenn]
          Exec Mgt / Operations
                                                                                         TBD                           IT [Fabian]
                                                                                                                       Office Mgt [Gaspar]
                                                                                        Joanne
                                                                                                                       Staffing [Russell]




                                                                                                             Asymmetric Integration
          Department Groups                                                                                         Mark


              Biz Dev                            AIU                 Creative                       Mktg/Adv                    PR/PA             SS+K West
          Lenny/Mark/Marty                     Rebecca              Marty/Josh                     Russell/Louise            Mary/Jonathan           Joe
         • CAA Marketing [Lenny]          • Intelligence Group   • Creative                      • BEAM                                       • Seattle
         • SS+K Branding [Marty]          • PS&B                 • Design                        • Media Kitchen                              • Los Angeles
         • SS+K Publicity [Mark]                                 • Creative Services             • Driver
         • New Biz [Noelle]                                        Studio, Production, Proj
         • Int. Culture/Comms [Catherine]                          Mgt, Broadcast




                                                                                                                                             17
Launch! Chapter 1 dr1                      November 2007




            THIS IS HOW WE WORK                                                               2


                                                     Mktg/Adv
                                                    Russell/Louise




                                                 Creative
                 SS+K West                      Marty/Josh
                                                                     Asymmetric Integration
                    Joe
                                                                            Mark


                                                    AIU
                                                  Rebecca

                             Biz Dev
                        Lenny/Mark/Marty                                PR/PA
                                                                     Mary/Jonathan




                TIE IT ALL TOGETHER

       TAKE-AWAYS FROM THIS CHAPTER (Summary and strategic insights)

      Advertising has been around since cavemen drew pictures on walls, but today it’s taking
many new forms. XXXXXXXXXXXX




                       STAY TUNED:
       In Chapter 2 we focus on consumers and the communications process. Get ready to see
how Amit and the rest of the SS&K crew gear up to understand the characteristics of msnbc’s
viewers and how they need to talk to these people ……




                                                                                                  18
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1
  (“Nike Reaches Deeper Into New Media to Find Young Buyers,” By Stuart Elliott, October 31, 2006, The New York
Times,
http://www.nytimes.com/2006/10/31/business/media/31adco.html?_r=1&oref=slogin&fta=y&pagewanted=p
rint).
2
 ( http://www.usatoday.com/sports/2007-06-11-wieden-kennedy_N.htm; downloaded 10/25/2007); Noreen
O’Leary, “When Great Ads aren’t Enough,” Adweek (March 10, 2007), adweek.com, downloaded ____.

3
 (“Password to Marketers' Meeting: Digital Survey Finds Spending Is Weak Despite Change In
Consumer Behavior” by Suzanne Vranica, The Wall Street Journal, October 11, 2007; Page B6).
4
 (http://www.marketingcharts.com/radio/traditional-radios-digital-competition-increases-in-q4-
2125/)
5
 “Are Skins, Bugs or Tickers The Holy Grail of Web Advertising?” by Kevin J. Delaney and Emily Steel, The Wall
Street Journal, August 13, 2007; Page B1
6
 “Fortune 1000 Senior Executives Opinions Regarding Blogs and their Company,” www.marketing.com, May 2006,
downloaded _______________.
7
 Marketers Explore New Virtual Worlds. Some Create Own As Second Life Site Loses Some Luster by Emily Steel,
The Wall Street Journal, October 23, 2007; Page B9

8
     Target Campaign Goes 'Model-Less'
Holographic Runway
In Busy Station Builds
On Cheap-Chic Theme
By ANN ZIMMERMAN
October 29, 2007; Page B4



9
     Once-Wary Industry Giants
       Embrace Internet Advertising
       KEVIN J. DELANEY
       April 17, 2006; Page A1


10
     Forrester Research, Inc. and Intelliseek, http://www.nielsenbuzzmetrics.com/cgm, downloaded
           ____________?

11
     http://www.womma.org/
12
     http://www.womma.org/wom101/02/.
                                                                                                        19
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13
     [Michael Arndt, "Burrito Buzz—And So Few Ads," Business Week, March 12, 2007.]

14
  J&J Joins Critics of Agency Structure
Consumer Researchers
And Creative Teams
Shouldn't Be Separate
By SUZANNE VRANICA
The Wall Street Journal May 11, 2007; Page B4




                                                                                  20

				
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