Author and keynote speaker Seth Godin talks about emerging opportunities for ad agencies, the difference between advertising and marketing, and building a product that people want to talk about.
Transcript: Seth Godin on opportunities for ad agencies
I think interactive marketers have a huge opportunity and most of them are going to miss it, and the opportunity is to push back into the organization and change what the organization does and how it does it to take advantage of this medium as opposed to figuring out clever new tactics to use the medium to help the existing organization. So as the internet is settling down, building a platform that is reliable. We're now seeing huge pressure from the biggest advertisers to force it to be a little bit like TV, with a lot of channels, or to be a little bit like a conference, but with a lot of people in it. I don t think that's going to work, and I think that as we see the internet unfold, the people who are winning are the ones that are playing by the rules that are there as opposed to trying to bend the rules to their advantage.
So what's the future of digital ad spending as the economy cools off or the perceptions cool off, what's going to happen in the next year or several years? I was on a panel with a guy from one of the three biggest tech companies in California, and he explained that they were using their ad budget to manage Wall Street's expectations. If they were going to make more money than people expected, they would boost their ad spending, so that their profits would be lower, so that next quarter, when they needed their profits to be higher, they could dramatically cut ad spending and they'd watch their profits go up. I think that's a fascinating way to think about the hundreds of millions of dollars that we're spending. The fact is, until recently, marketers spent money on ads, without knowing if they worked, and until recently the ad budget was a percentage of revenue, and what's happening now thanks to Google Ads and other measurable forms of media, is you spend money on ads because it works, and as a result, when the economy cools off, the money a company will spend on ads that work is going to go up because they need the revenue. It's the discretionary ads, the ads that make you feel good, shooting models in bikinis in Miami beach in the middle of the winter, those are the ones that are going to get hammered and deservedly so, because they don't really do anything.
If you want to ask about how marketers use marketing as opposed to how marketers use advertising, it's a great question. My new book, which comes out at Christmas, is called "Meatball Sundae," and its about the mismatch between meatballs average stuff for average people that you advertise like crazy – and the sundae – the topping, the whipped cream, the cherry, the new marketing stuff. Put them together, you got something that s not worth eating. The challenge isn t that there is something wrong with the toppings, the challenge is that it doesn t work on meatballs, it works on something new. If there is one theme of my last ten books, it is stop worrying about the tactics of the ad, and start realizing that marketing does not equal advertising and realizing the most successful marketers of the last decade, every one of them, did not succeed because of advertising.
The explosion of social graph, the explosion of using large computers and infinite storage to keep track of the relationships between people, the debate about whether that is an open system, as Google and others are trying to make it, or a closed system, as Facebook is trying to make it. The sometimes ham-handed efforts of marketers to exploit this, the how you plug the holes for spam, the everyone is an expert kind of model that we ve got at Squidoo.com that's growing really fast, juxtaposed against the everyone is an idiot model of, if you read deep enough into any comment stream, quickly it devolves into name-calling and references to Adolf Hitler. These are all mixed, and they re not going to stay that way. It s going to settle down, and things are going to happen, and platforms are going to be built. Squidoo grew 33% in the last 4 weeks. There is a reason these things are happening, and they are happening because people want a voice, they want to be noticed, they want to be treated with respect, they don't want to be lonely, they want to play. And when I add all those things up, I see a whole new infrastructure coming in, and then I say wait a minute, guess what, tomorrow, 10 million people from China are going to join, and 40 million people from India, and suddenly everyone is not going to be talking English, and suddenly, all their mores and rules are going to change again and you can sit back and say "You know what I do for a living? I make adwords that work a little bit better and increase the clickrate by a percent," which is fine, someone needs to. Or you can sit back and say You know what, that's where the next innovation is. Someone who makes money for a living for their client is going to figure out how all these pieces fit together and at the same time that they deliver anticipated, personal and relevant messages to the people who want to get them in the right way to actually make commerce that works for both sides.
