Maybe communication doesn't pay

02 Sep 2003|Steve Diller

I had the privilege to be the keynote speaker at the ASTECH Conference in Vail, CO last week. ASTECH is a yearly get-together of no-nonsense newspaper executives concerned about the nuts and bolts of profitability. They’re very smart people, being asked to do the impossible.

As in much of post-bubble American business, these execs are being told to obtain measurable results from any particular action they take. So, for instance, if a new advertising campaign is undertaken, the agency has to be able to show what the impact was on the paper’s sales. “Put out X ads, obtain Y dollars more than you put in” is the idea.

No one can seriously argue with the goals here- to waste less money and to obtain a return on investment. On the other hand, there’s a fundamental challenge when one attempts to measure the value of something removed from its context.

When an ad is placed, its impact can’t be understood purely in terms of “dollars in, dollars out,” because the ad doesn’t operate in isolation. It’s like asking what part of a car’s speed is determined by its gas tank. Clearly, the tank contributes in a manner that’s determined in part by its quality. But which part of the car’s speed is produced by the tank alone?

Because agencies can’t easily demonstrate ROI in isolation, increasing numbers of newspaper companies are dropping advertising in favor of direct marketing. There’s a certain irony here, since papers are simultaneously dependent for their existence on advertising, but that’s another story.

Will branding be next? Design? Ultimately, the core question revolves around whether companies in fact reap rewards from communicating meaningful characteristics about their products to consumers, if they can’t be precisely measured. It would be a far greater irony if the news media became the first industry to conclude that communicating doesn’t pay.

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