- Singing in front of a live audience
- Plotting a new course in your career or industry
- Jumping out of an airplane without a parachute
- Challenging a friend, client, partner
The five above statements can all be considered risky. The degree of risk for each is dependent on a few independent, yet interrelated factors.
- What is your skill for the given task?
- What data are you able to review to make an informed decision?
- Do you have people you trust around you?
- Are you aware of the potential consequences of success and failure?
- Does it honor your core values?
Every person who reads this list can rank these five events from least risky to most risky. And they will each be ranked according to how they answer the questions above.
This is my rank order of riskiness for the above questions. From least risky to most risky.
- Plotting a new course in my career or industry. I am confident in the team around me and our vision for the future. I have a strong core belief in leading the way to a better future. So I do not feel any risk here, only upside potential.
- Challenging a friend, client or partner. When I believe that their current approach is not creating the outcomes they desire and I am confident that I have low-risk solutions that can help them achieve greater success. But I know I need to approach the situation with caution because I do not want to undermine a long-term relationship that I have worked hard to maintain. I consider this low risk, high reward.
- Jumping out of an airplane without a parachute. I have examined all of the available data and realized that the plane is parked on the runway with a large, soft cushion where I will jump. And the jump is no greater than five feet. I consider this low risk, low reward, low value.
- Heli-Skiing. I am not an expert skier and I fear that I could get hurt and put others’ safety at risk. Moderate risk, minimal reward.
- Singing in front of a live audience. I cannot sing on key. I am easily embarrassed when I fail in front of a large group of people. I believe I would be setting myself up to feel ashamed. High risk, no reward.
Your list may be different from mine, but one thing holds true for everyone — risk assessment is a balance between opportunity loss and opportunity gain.
While jumping out of a plane that is on the ground, I am assured that I will not get hurt (no opportunity loss), from the information I have. However, I also believe there is no opportunity gained from jumping. So while it is potentially the lowest risk in absolute terms, because it offers no upside I have ranked in number 3 on my list.
Conversely, I have ranked “plotting a new course in my career or industry” as the least risky, because I have a passion to lead change and bring others along for their ultimate success. It is a core value of mine that I love to tackle hard issues and strive to make the ad industry a better place for agencies, marketers, media companies, and consumers. So I will give the greatest effort where I believe there is the greatest upside.
While I am not prone to quote Mark Zuckerberg, I do like this statement he made. “The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
It is time for our agencies and marketers to take calculated risks. Media companies have taken calculated risks in the past few years by more broadly distributing their content to “frenemies”, creating AVOD and AVOD platforms, and selling fluidity deals. The buy-side must make bold recalculations too. The buy-side cannot keep doing the same things over and over again and expect different results – that is the definition of insanity. So here is my challenge to my agency friends and leaders, and to the marketers, I know and hold in high esteem, and to those, I do not know.
Ask yourself the following eight questions. And if you are answering them the same way you did last year at this time – you must rethink your approach and be willing to take on greater risk to accelerate your business growth and to maintain a strong ad-supported ecosystem.
- Are you planning on reducing your spend on linear TV in either 2022 or 2023? Linear viewing has eroded dramatically, has gotten older and is clustered with too many non-programming minutes thus creating an untenable viewing experience.
- What strategies have you put in place to mitigate the high demo CPM inflation rates you paid last year? The industry remains in a supply constrained and the sell-side will again attempt to get significantly higher CPMs.
- Do you have a plan for controlling content management vs unknowingly purchasing the same content when bought directly from a media company, an OEM, an eMVPD? Duplication and overlap is a waste of money and can frustrate the viewer.
- Are you using the new capabilities of digital video to play with multiple metrics from impression and reach for top of the funnel metrics, to engagement and interactions for mid funnel conversions? There are now multiple ways to measure success.
- Are you using your strategic targets to buy video in linear and CTV? Activating on strategic targets makes your media work harder.
- Do you understand the right balance for your brand between direct IO buys, programmatic guarantee buys and biddable programmatic? Each buying modality serves a different role.
- Have you begun to test new solutions for a cookieless future? The cookieless future is here today on iOS devices, 30% of the marketplace.
- And perhaps most importantly, do you have the right technology to bring all of the above new realities together for your brand’s success? The combination of data and technology can solve for the fragmentation and complexities in the marketplace. You must start with the planning phase and continue your strategies through to execution.
The answers to these questions are not easy. And they cannot be resolved in a day, a week, or even a month. But they can all be resolved before the next upfront if you begin to tackle them now.
So how do you begin to tackle these questions? My first advice is for agencies. I think you need to do these three things:
- Develop a narrative for your clients that demonstrates that acting the same as you acted last year, having the same strategies, and not identifying the 3 or 4 areas you want to take new approaches to will continue to yield 20%+ inflation and more importantly continue to distance your brand from your most important consumers. (Over the years I have had to develop this type of new narrative for clients – and I have always found that new language helps sell new ideas. When I wanted to convince Procter & Gamble to move into digital video and test addressibe TV in 1992 – to take a leadership role – we changed our team name and vision from the TV AOR to the Sight, Sound & Motion AOR. This gave us the mandate to follow the consumer across all screens. And we did this in 1992!)
- Re-imagine strategies for this coming year. Pick a few new strategies that can change your conversation with media partners. Have them see you as open and innovative, challenging yet understanding. You can’t change the outcomes if you come to the table with the same strategies
- Make sure you have the right partnerships in place to deliver your new goals. Rethink your partnership strategy: Do you have the right data partners, technology partners, measurement partners, supply partners. To operate in new ways, you need the right support and infrastructure to maximize chances for success and minimize risk.
And marketers, I think you need to act differently too: Here are my three challenges for you:
- Stop using YoY CPM change as your barometer for success. This only stifles opportunity and reduces innovation. In a supply constraint marketplace the name of the game is not efficiency, it is effectiveness.
- Be open to new ways of maximizing your media effectiveness. This may include paying for things that have traditionally been considered “non-working media” (data fees, tech fees, etc.) But the reality is, these new sources of “brain power” can turn your 100 “dumb” GRPs into 98 “smart” GRPs and therefore your true cost of success is lower than before; you just have to recalibrate your measuring stick.
- Be an active partner in creating a new game plan. Every week in the fall, football coaches create new game plans, layed on top of a core of fundamental knowledge about what drives their team’s success. You need to help game plan scenarios and understand the trade-offs. With knowledge comes power. And with power, you have the courage to act differently and take new risks that you believe will yield new rewards.
As we all approach a new year we need to embrace the change that is impacting the video landscape. The complexities and the opportunities are real. The industry must be willing to take some qualified risks to reap the rewards of acting differently. As Robert Frost so eloquently said, “Two roads diverged in a yellow wood and I – I took the one less traveled by, and that has made all the difference.” Let’s go out into the media universe and make a difference. A calculated, yet dramatic new approach to the new world order.