In the late ’70s, I attended a luncheon of more than 1,000 advertising and marketing execs here in Detroit. The keynote speaker was Ted Turner, who had a new concept called the Superstation. It was one of those standing-room-only crowds of broadcasters and advertisers, ready to hear from one of media’s most dynamic entrepreneurs.
What the audience didn’t know was that Ted had been peddling advertising to the automotive bigwigs, and was more than a little frustrated when they refused to recognize the coming growth of cable television. So, he started off his speech with one of the most memorable lines I’ve ever heard:
"I’ve never been in a room with so many stupid a**holes as I am today."
Once everyone gathered their collective breaths, Turner went on to explain how the Detroit car makers just don’t get it. He opined that they are so stuck in the past that they couldn’t see the future, no matter how obvious it was. And he went on to say that he already had contracts from Datsun (Nissan) and Toyota, and because of their foresight and belief, he’d make sure they always received favorable rates.
It’s 30 years later, and not a whole lot has changed. We spend a lot of time talking with advertisers, and there’s no question that agencies and their clients are under a significant amount of stress trying to figure out where to invest their ad budgets. We know of many companies that are plowing significant dollars into digital platforms, without any concrete idea of its effectiveness. But that’s understandable — many companies understand that they’re in uncharted territory with digital, and are wise to invest some money into trying to figure out what actually works.
And then we came upon a study from BIGResearch that boggles the mind. It compares the share of automotive ad dollars being spent in each medium compared to its overall effectiveness. The results are stunning. Not surprisingly, radio isn’t getting its fair share, but we’ve spent enough time in the JacoBlog complaining about this. But look at television — there is absolutely no relationship between dollars invested and consumer impact. Is it because ad agencies want to win Clios? Is it about the big commissions from producing those big TV campaigns?
Or is it simply a disconnect from reality? At a time of great uncertainty, are automobile advertisers sticking to the tried-and-true, no matter what the cost? Is it the 1970s all over again?
Living here in the Motor City, we understand as well as anyone the challenges the domestic auto industry is facing. But that doesn’t explain why their brand managers aren’t pushing their agencies into media that work, and bring their allocated budgets more in line with reality.
Of course, it wouldn’t hurt radio to come up with creative, integrated programs that would recapture their attention, and remind them there’s more to our business than remotes and mentions. But that’s for another blog.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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Fred, good post. In my experience, ad spend and ad effectiveness are imperfectly correlated. Car guys are certain that visuals sell the iron. Walk into a showroom and pick up some of that expensive full-color collateral, better yet the DVD. Agencies give the customer what the customer wants. As you are perhaps aware the herd instinct in the car trade is a major factor. Car guy see, car guy do. When we began putting commercials on local cable systems (local insertion) in the last century car stores were our single biggest category. Get one on and the rest followed. As any publisher at a daily will tell you automotive remains a strong category because no one dares to pull out, the same can be seen in the online auto vertical. Finally, never underestimate the agency/client level fun factor of shooting a TV campaign. Hiring on a bold-faced name director and taking a crew to shoot in Hawaii is a bunch more fun compared to writing/producing radio at some audio house. Then there’s the question of billings, just follow the money.
Fred if the cars guys don’t get it about radio by now, they never will. Radio lost the car war a long time ago. It’s time to give up. The internet will erode radio’s remaining share.
If Steve Jobs was summated to the boardroom of Clear Channel it might go like this.
Steve plunks himself into a chair and slowly starts to spin in circles. Saying as he turns, tell me, tell me what’s wrong with this place. And before anyone could reply, he’d abruptly burst out: “It’s the products. The products SUCK! There’s no sex in them anymore.'”
Fred, try telling your clients the truth before its too late. Research only creates more spin and keeps the industry stuck in denial. Radio is going in circles.