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How Blue is the Ocean, How Red is the Sea?
Supply versus demand. You have probably heard these words a thousand times. You have probably experienced them as well. Remember the release of the iPad? These units flew out of the stores at the rate of about 700,000 the first weekend. Apple Computer is expert at creating new demand and then capturing it. However, at the iPad’s premiere their supply chain undoubtedly had trouble keeping up with the demand.
In the media and advertising world, the talk of supply versus demand typically turns toward the upfront marketplace where annual TV commercial time is purchased in a race to the finish. The limited supply of commercial inventory virtually insures that demand is healthy and that premium prices may be charged for a declining share of audience. But what happens at the tipping point where old demand begins to break down? It then becomes essential to create a new value curve by uncovering new demand.
To do this one has to overlook the red sea and set his sights on a blue ocean. The concept of a blue ocean strategy typically nets out to a four actions framework: 1) to eliminate – i.e., to determine which factors that the industry takes for granted that should be eliminated; 2) to reduce – that is, to assess which factors should be reduced well below the industry’s current standard; 3) to raise – i.e., identify which factors should be raised well above the industry existing standard; and 4) to create – that is, to outline which factors should be created that the industry has not offered up in the past.
Application of this framework to the media planning and buying marketplace might look something like this:
· 1.) Eliminate the network upfront, move beyond media centricity, eradicate GRP media post-buy evaluation and move away from push-oriented media planning.
· 2.) Reduce reliance on the following metrics: demographic reach and frequency, syndicated product usage data based on recall, costs-per-thousand and irrelevant data that do not contribute strategically to the media selection process.
· 3.) Raise the specter and increase the usage of the following metrics: product purchase reach and frequency, targeting with actual marketer customer purchase data, media cost-per-inquiry, media cost-per-acquisition, media cost-per-sale and actionable media relevance measures.
· 4.) Create a real-time (or near-real time) media marketplace, create plans that are human-centric, implement pull-based 360 Communications Planning and create and use only return-on-investment metrics for media post-buy evaluation.
Can you imagine how different the media business might look if the changes above were made? Gugelplex TV can. Zero-based communications planning would become the rule rather than the exception. As important as it is, television will no longer be a mandated medium used in planning. It will sit alongside others that are equally important in moving product. It may also have to become price competitive. All media vehicles, like it or not, will be evaluated on their ability to drive palatable return on brand sales. No more media properties hiding behind nebulous metrics that do not tell the entire story about how they drove sales. It is the business environment everyone pays lip service to yet fears since they do not know how they stack up. It’s the business environment that is coming and coming quickly.
II Given the current business environment we believe that it is no longer about beating the competition, it’s about making the competition irrelevant. Here’s to today’s brave new media world!
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