Anecdotes/David Ogilvy on Getting New Business

At Ogilvy & Mather, David Ogilvy himself would sometimes come into the agency cafeteria and sit down with anyone he chose and open a spirited conversation with the surprised employee.

One day I was privileged to have this charming fellow join me over my tuna sandwich.

It was I think in 1971 when I had been with the agency for five years, having risen from media planner to assistant media director and tripled my salary in the process.

The agency had grown during that period from about $60 million in billings in I think only one office in 1966 to nearly $500 million in 1971 with an expanding global base of business.
It was a great career ‘ride’ so I was delighted to have a chance to meet the great man one on one.

He asked me about myself, what I did, etc. Then he asked me whether I had any questions about the agency itself?

I told him that I was amazed and delighted by the rapidity of the agency’s new business growth and asked him what his ‘secret’ formula was?

He told me something that has always proven useful to me. He said that when he did everything he could think of to market the agency--- public relations, white papers, advertising*, building relations with top media owners and managers, original research**--- to name just a few things that I recall, he got ‘lucky’ with new business but he couldn’t pinpoint one tactic that drove the process. On the other hand, he said that when he didn’t do everything more or less constantly and consistently, the new business flow seemed to dry up.

And that’s how it worked out for me when I sought to create and build DeWitt Media, Inc., in the 1980’s and 1990’s. I kept a post-it list of everything I could possibly do to attract positive attention to the agency stuck to my pc monitor and tried to at least work on every item every day. What was on the list? Newsletters, PR, mailings, even cold calls worked. During that latter period when agency search consultants entered the business, it became critical to build awareness and relationships with these folks. What are the elements of an effective new business program today?

Everything you can think of. And try to move each peanut along every day. That’s how to get lucky with new business!

*D.O. wrote a series of amazing ads for the agency that ran in Ad Age and that listed his famous ‘rules’ for advertising, targeted to specific business categories in which he wanted clients; e.g., ten rules for food advertising, six rules for travel marketers, etc.

**Ogilvy had been a researcher for the Gallup organization early in his career and he believed that bringing prospective clients new information about their businesses was a critical way to get meetings and assignments.

Network TV “CashBacks”Pull the Rug Out From Under Advertisers & Doom the Upfront

A new age of media discontinuity may be dawning as the television networks, in giving cash to advertisers in lieu of promised audience or ratings, have pulled the rug out from under the foundation of trust that underlies the selling and buying of TV ad time. In giving cash instead of advertising to buyers of ad time, the networks are taking back time sold at one price in the past and reselling it to higher paying advertisers today. It’s “bait and switch” without the switch; the marketer who needs the ad time to sell goods is left with a bag or cash and no ad support.

Pre-emptions of previously purchased ad positions have long been a bane and ethical conundrum for local spot television ad sellers. Neither the media buyer nor the advertiser has ever been able to count on local stations to honor their media sales contracts. The ‘custom of the country’ for local TV stations in the U.S. has simply been to sell each spot to the last highest priced offer, reselling the same spot over and over until the last, highest paying offer is executed in the form of a telecast.

In this process, each of the early buyers of the same ad unit for ever increasing amounts, is “pre-empted” by the seller and offered a replacement spot or makegood, often in an inferior time period. As a result, one of the most expensive components of spot buying is the scheduling and rescheduling of makegoods. However, even in this swamp of reneged promises and towers of paperwork, one has usually been able to count on some sort of ad schedule airing approximately during the desired time periods.

However, the new network cash-back formula makes it impossible to count on the seller to ever deliver the promised goods. Any time ad rates increase over time, a network can now pre-empt an early ad buyer for a higher-paying latecomer. This situation makes much of the discussion about the Writers’ strike’s possible effects on the Upfront moot. In the “Cash Back Age” there really is no basis for an upfront, which is after all supposed to be at core a guarantee of audience at some future date. Let the buyer beware. A new, more risky media age is dawning.

I predict that the next few months will represent the most tumultuous period ever in the history of television. It is time for our industry---media sellers, ad buyers and advertisers---to sit down and to address the need for a new and reliable basis for doing business in the future, nothing less than a new foundation for television advertising commerce.

Media Agency Profitability May Drive Media Selection

Media Buying Today

What Leads Media Agencies to Recommend the Various Major Media?

Although we are primarily a consulting company, we undertook to place about $50 million for an advertiser over the past 18 months or so (mid-2006 through 2007). We planned, negotiated and scheduled time and space in virtually all media: national and local television and radio, magazines, newspapers, out-of-home and the internet. We bought every imaginable unit and just about every time schedule possible, from broadcasts upfront, calendar upfront, scatter, opportunistic and “the night before” and “day of”.

Since I had not been directly involved in media buying for quite a few years, having functioned as an executive, manager and company salesperson, I thought it would be interesting to comment on my experiences and perception of the various media from a front row seat. My perspective is that of the manager of a media buying operation, particularly viewing media from the point of view of whether we can make media buys that are effective and efficient for our clients and profitable for us.

Ease of Buying characterizes national media

There’s nothing like broadcast network television for spending a lot of advertising money fast. The networks are set up to accommodate media buyers in every possible way; in fact, my experience was that they do virtually all of the work involving in buying network time. For example, they’ll provide historical ratings tracks, project ratings forward to telecast dates and then guarantee their projections. What’s left for the buyers to do? Very little as far as I could tell. Plus the network sales people are friendly, responsive and exude positive energy. It’s a pleasure to meet with them and work with them. I found we could manage effective and efficient network buying very profitably.

National magazines come in a close second in efficiency for the ad buyer. The extra challenge represented by magazines arises in planning print schedules, selecting specific publications from the huge array of print vehicles available. Added the to complexity of the selection process and dealing with a large number of sales people, with quite a bit of duplication from the big publishers, is the importance of securing the best ad position in each magazine. Unlike television, which still offers something akin to an “involuntary” ad exposure at least to non-DVR users (the preponderance of all viewers today and in the near future), individual magazine ads are often ‘seen’ by a minority of the readers of a magazine. This is because magazine audience is measured by someone’s ‘exposure’ to the magazine issue, not to specific ads or even an average readership score for all ads in a book. The bottom line: when buying ‘expensive’ magazines such as People and Parade, it is still pretty easy to handle print buying profitably for the media agency.

Local media may be unprofitable for media agencies

Local television and radio, OOH and newspapers are a disaster in terms of media agency profitability and operational efficiency. The spot sales system is fundamentally dishonest because the same ad time is sold over and over in a series of serial ‘pre-emptions’ that drop earlier buyers for buyers offering to pay more as the telecast date nears. Out-of-Home is site-specific and requires a great deal of time to find locations and verify postings. Achieving significant reach with newspapers requires the use of large numbers of individual publications, each with its own approach to pricing, positioning, contracting and scheduling of ads.

The Internet offers media agencies a special income opportunity because advertisers seem to be willing to pay internet-focused agencies on a completely different basis from media agencies. Moving advertisers into more and more internet-based advertising is therefore a highly profitable strategy for ad media holding companies.

Media agency profitability may drive media selection

The bottom line of my 18 months back in the media buying saddle: the networks and magazines should do just fine over the next few years because they make it very easy for media buyers to recommend them. The Internet should continue to outpace other media’s growth. And expensive to place local media need to find another way to get on media buyers’ screens; until then, their revenue will continue to be rerouted to easier to place media.