Happy Families

The advertising downturn is taking its toll on the industry but John Harlow, partner in Naked Communications, suggests that marketing partnerships could be the light at the end of the tunnel for many advertisers.

The industry is going through an uncomfortable period. Faced with economic uncertainty, job losses, declining revenues and budgets, it’s no wonder that there are a lot of long faces out there.

Particularly susceptible to any downturn are those businesses whose revenues are pegged purely to advertising spend, such as many media buying agencies, media owners, new media enterprises and advertising agencies.

Hindsight being a wonderful thing, many of these businesses could have worked much, much harder to re-structure their business models, in order not to be solely reliant on an advertising only revenue stream. Web sites that have been slow in testing paid for content, agencies that have bolted on consultative services without re-engineering their structures, media owners that have failed to re-group and offer added value services…all very easy oversights when the market was booming and commentators talked of a brave new world of permanent economic growth.

But from within the doom and gloom, hope can spring eternal. Advertisers may have less money to spend, but they still have the same marketing requirements, in that they must continue to engage audiences, raise awareness, and sell product. And with this has come a realisation that a problem shared is a problem halved. The new marketing currency is now the talk of ‘partnerships’.

Advertisers have recognised that their products, no matter how diverse or wonderful, cannot continue to try to grab the full attention of time poor over-loaded consumers. Instead, brands form part of a reportoir, a club of brands that their particular consumers engage with. So, what better step when marketing budgets are declining, than to team up with complimentary other brands in the market, to effectively swap assets and create a greater whole.

So a website with a million young dance fanatic users could team up with a soft drink eager to grow penetration amongst this audience. The website drives impressions via on-pack promotion, and creates an SMS revenue stream for dance information on behalf of the drinks brand. The drink on the other hand gains, access, credibility and branding with the websites club partners on club event nights. No money changes hands.

The point here is that when the market is changing, marketing services must adapt. Media owners can form marketing partnerships with non media brands to drive saliency and subscriptions. Agencies can create intricate marketing solutions, often between the clubs of brands which exist within one agency’s walls. The objective is to increase share of mind and therefore share of consumer spend, without increasing budgets.

If advertisers want ‘smarter’ marketing, the onus is on all of us to adapt to it. Businesses cannot continue to allow their existing structures to negate involvement in different forms of solution creation. We can’t continue to rely purely on advertising based commission. Instead, we need to concentrate on fees for time, success fees, or even share of wealth creation in creating new forms of marketing expression.

How do we get paid for playing match maker? Well, the inevitable result of decreasing advertising budgets (a function normally of cost cutting) is that client marketing teams are being pared back to streamlined sizes, and that the disproportionate gap between wanting to do something and having the resources to carry it out is increasing. No longer do clients have the luxury of project managers to take on board extra work.

So agencies can benefit from outsourced project work, and act as honest third party ‘brokers’ in creating marketing partnerships. The demand for partnership creation has increased in direct proportion to the advertising downturn, and it is here that we can create lateral new revenue streams.

But the act of creating ‘happy families’ requires a belief that the world of communications is bigger than the world of advertising. And not all advertising based models are ready to admit that.

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