A decade ago I was the marketing director at a community bank. Back then, promotional advertising was pretty straightforward. In a small town, your choices are limited: you’ve got local television, a few radio stations, one daily newspaper, and maybe a weekly tabloid.
We almost exclusively used the local daily newspaper. We’d run quarter-page ads on Wednesday, Friday and Sunday for two or three consecutive weeks. It worked so well that customers would often clip out the actual ads and bring them into a branch. In fact, it wasn’t uncommon for us to cancel print campaigns early because we’d already met our sales goals.
Could you do this today? No way. Even if you could find a local paper that survived, its dwindling circulation would render it ineffective as a primary advertising medium.
The bigger problem
It’s not my intent to bemoan the decline of the newspaper industry. That’s old news. What troubles me is the widespread evaporation of affordable and effective advertising media for small businesses.
Television is still pricey and can be a nightmare to buy and measure. 30 years ago there were a dozen channels; now there are thousands. Radio is still popular, but it’s fragmented and expensive to build frequency when you’re running a targeted product campaign.
What about digital media?
With a combined U.S. market share of about 57%, Google and Facebook are the world’s biggest online ad companies. And despite recent reports that their share is dropping, digital advertising is still a duopoly. If you want to advertise online, you’ll need Facebook and Google.
Unfortunately, buying digital advertising is fundamentally a bidding war; the best ad placement goes to the guy with the deepest pockets. And since demand is growing and screens aren’t getting any bigger, the prices are only going up. So again, this will deny small businesses access to an affordable advertising channel.
Starting up startups
A few days ago I read an insightful article by Jessica Lessin. She’s a former reporter for The Wall Street Journal and the editor of The Information, a digital media company that closely follows the technology industry.
In a piece titled “The End of Growth” she notes that the biggest challenge for startup companies may be the ability to promote themselves efficiently in a rapidly changing (and increasingly expensive) media landscape.
Today, the price of Google and Facebook ads is rising for many businesses — so much so that no startup CEO dependent on marketing (Stitch Fix, Blue Apron) can escape a conversation with an investor or reporter without talking about it …
… The upshot is the most valuable startups of the next 10 years will be the ones that figure out how to build lists of potential customers in new, novel and legal ways. The larger companies will be able to pay gatekeepers like Facebook and Google for growth. But for smaller companies, the days of relying on organic traffic, paid advertising or even email are going away. That is a major change from a decade ago and, more than the macroeconomy, might deflate this tech cycle.
Apparently this problem is bigger than I thought. If Ms. Lessin is correct, even companies with access to military-grade funding may struggle to survive unless they come up with some novel marketing techniques.
So what’s a small business to do? I wish I new. I’m a small business, so I struggle with this problem myself. Advertising isn’t supposed to be this difficult. It’s origins are simple. It’s what you did when you couldn’t go see somebody — You bought a small ad in the local newspaper, and it worked.
I miss print
I miss big heavy newspapers and magazines filled with smelly ink and glossy ads. I grew up with Look, Life, Time, Popular Mechanics, and Mad Magazine. Hell, this website was patterned after magazine layouts of the 40s and 50s. So I’m praying that we’ll have a renaissance in print media, but I’m not holding my breath.
It’s interesting that today’s online celebrities and “influencers” consider the ultimate validation to be having their picture on the cover of a print magazine. Go figure.