January 25, 2023
Commentary
The Fallacy Of Scale
- by Chris Hiland , Op-Ed Contributor, January 31, 2017
Preach it, brother! Candor! From the head of The Big Black Box, an amazing and utterly invigorating confession because it means the answer to this puzzle is a jump ball!
Gotlieb believes media agencies should unite to encourage Netflix to accept paid ads. What a unique idea! I wonder what all the people who pay for ad-free video content would think? Or whether they'd pay less to watch some ads? Or the video is free if they watch ads? I think we've tried this before.
Finally, Gotlieb served up his perspective that the U.S. market is being held back (to the detriment of the consumer) because content producers and TV companies won’t collaborate better. Pity the consumer suffering this fate. Can’t you see the hard-to-reach 18–24-year-old male suffering through another episode of NCIS? Oh, the humanity!
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To have a revered and august lion of this industry speak up with such bold candor should be a wake-up call to all advertisers.
Apparently, scale — of which GroupM has much— doesn’t buy you confidence or control the way it used to. If Gotlieb doesn’t have the answers, it’s time for all of us to abandon the old thinking.
What’s troubling is that his self-confessed greatest fear isn’t the fake news sites happily collecting advertisers’ money, the persistent bots visiting those sites to create traffic or the fact that Nielsen can’t decide if ESPN’s base is eroding or not.
His worry is that he can’t decode a declining linear TV channel.
Here’s a modest proposal: If, in fact, GroupM’s scale has hit a ceiling, it is now officially incumbent upon the rest of the media agency world to manage our clients through complexity and fragmentation, with creativity and a respect for scarcity. Scale doesn’t deliver agility, and the lower TV rates that big shops promise are chasing a dwindling supply of linear TV audience.
Supply, meet demand. It’s time for the small and mid-sized agencies to rise up against the false promise of scale.
Scale promised efficiency and valuable data to inform investment decisions. What it seems to have delivered, though, is declining transparency and badly limited agility. This combination should not be acceptable to advertisers.
Efficiency is important, but it must not come at the expense of agency accountability or the ability to move money where it delivers the greatest effect.
We won’t hope our way to a better TV universe through addressable ads, and our chances of convincing Netflix to replicate a version of the decades-old broadcast TV model are nil. We’ll survive this turmoil and thrive in a new environment by embracing the new with agility rather than clinging to the old.
The iceberg is melting. Who's your better ally — a frightened giant who wants to remodel the cathedral or a scrappy boat builder?
Chris, anytime that digital media can offer the kind of reach that branding advertisers need, with suitable content to sponsor and ads that actually get to the users' screens and play all the way through the commercials, you can bet that advertisers will abandon, poor, pathethic, doomed "linear TV"----providing that the digital vendor's CPMs are reasonable and there is some compelling evidence that digital video ads work like their outmoded "linear TV" counterparts. Unfortunately, until digital gets its house in order---and there is lots of work to be done----bashing the old way of doing things isn't going to gain traction. Why? because there is no viable alternative and, consequently, "linear TV' ---which is dominated by cable in terms of volumetrics, not the much maligned broadcast networks----isn't going to lose anything like the amount of audience reach or tonnage that some are hoping for. I think that you havec taken Gotlieb's comments out of context, But that's OK, as yours is an "opinion piece", just as my comments are also opinions.