November 24, 2017

Don’t Tred On My Profits, Aereo

Broadcast TV networks and stations are really pissed at everyone’s favorite boss, Barry Diller, and Aereo, the TV-signal-grabbing startup Diller is backing.

The TV networks and stations are furious at Aereo because the company uses small, dime-sized antennas to pick up over-the-air TV signals and route them over the Internet to people who pay Aereo a monthly fee of $12 so they can watch broadcast TV on devices such as PCs, smartphones, iPads and other devices connected to a screen and the Internet. Currently the Aereo service is only available in New York City, but the company has raised money to expand to 22 cities in the near future.

Aereo doesn’t pay TV broadcasters for access to their signals and programming, which caused the broadcasters to sue Aereo. But the courts have sided with Aereo (so far), which pissed off the networks so much that News Corp. COO, Chase Carey, speaking for Fox TV, and Haim Saban, speaking for Univision, threatened to move their networks’ programming to cable.

Nice going, guys. That’s like the captain of the Titanic ordering the crew to blow gaping holes in the sides of the sinking ship to let more water in.

The TV networks and their owned stations are probably bluffing, as Jeff Bercovici writes in Forbes:

Skeptics say Fox and Univision must be bluffing, for a variety of reasons: the antenna-using share of their audiences is still significant (about 10% for Fox, maybe 20% for Univision); they’re hemmed in by affiliate agreements and sports rights deals that require them to broadcast; the government might step in as voters freaked out about the disappearance of free television.

While these things are all true, none of them are obstacles so much as speed bumps. “The reality is there’s a very real potential that broadcasters could convert to cable networks,” says BTIG analyst Rich Greenfield, who has been following the networks’ legal tussle with Aereo. “The challenge is over what timeframe.”

So, who are the TV networks and stations threatening? Why are they bluffing?

All you have to do to understand what’s going on is to look at a picture of Chase Carey, COO of News Corp (Fox Television Network and Fox Television Stations).

Chase Carey

Chase Carey

He looks like Colonel Blimp from the Victorian age, and that’s just about the era the TV networks and stations are living in – a privileged, completely out-of-touch, Downton-Abbey-like aristocracy.

In the 1950s through the 1990s, it was virtually impossible lose money with a television station. The TV networks covered a TV station’s overhead with affiliate compensation fees, so all the revenue from local news programming and syndicated programming was profit. Not rocket science.

And TV stations, like greedy Wall Streeters, weren’t satisfied with outsized profits; they wanted what all money grabbers want – more. Therefore, in the 1990s when cable surpassed terrestrial TV in total viewership and the Internet started stealing advertising dollars, how did TV stations in general react? Did they increase their commitment to serving the “public interest, convenience, and necessity,” for which they were given free licenses to use the public’s airwaves?

Of course not. TV stations stopped editorializing, stopped hiring community affairs directors, and reduced public affairs programming in an attempt to keep profit margins up. TV station owners thought they were entitled to their overblown profits as a birthright. They bought into the notion that the purpose of a business was to maximize shareholder value, a mantra that was developed by leading MBA programs, such as those at the Harvard Business School.

While TV station owners were comfortably asleep at the wheel (as fast asleep as owners of newspapers were) and maximizing revenue and profits, Internet entrepreneurs started businesses whose primary purpose was to delight customers, or to organize the world’s information, or to connect people socially – profits didn’t come first.

Can you imagine a TV station corporate owner such as Fox or Univision or CBS pronouncing that their primary purpose was to delight their communities or create shared value for the cities and towns they serve?

No. Corporately owned TV stations cared about maximizing profits, not about serving their communities or delighting their customers. So, should we feel sorry for Fox, ABC, CBS, or NBC that Aereo is grabbing their signals from the airwaves that the public owns? Aren’t the stations getting and ironic dose of their own profit-seeking medicine?

The TV station profit ship is sinking, and Barry Diller is helping. Even though he started the Fox TV network in 1986 and owned a string of TV stations in 1997 (Silver King Broadcasting), Diller was prescient and saw the Internet juggernaut coming in 1993. He is now head of IAC, a leading Internet company, and is worth about $1.8 billion.

But he probably feels $1.8 billion isn’t enough. My guess is that Diller is investing in Aereo not to stick it to cable, though some media pundits believe he is going after cable bundling because he wants a la carte pricing, but because something else is going on. My guess is that he hopes that the major TV station owners will see that Aereo could disintermediate them and will buy Aereo at an outrageous multiple in order to put off the inevitable for another ten years.

What could foil Diller’s plan, if selling to TV stations is his plan, is that the government will take away the valuable electronic spectrum space from TV stations and auction it off under pressure from lobbies more powerful than the National Association of Broadcasters (NAB), such as the telecommunication lobby (ATT and Verizon, et al), the Internet and wireless lobby (Google, Facebook, Microsoft, et al), and the video entertainment lobby (Netflix, Hulu, YouTube, Amazon et al).

The pressure to take away TV spectrum and auction it off to wireless carriers will come from the public, too, because people, especially young people, are abandoning local TV for watching video on their tablets and smartphones, and they don’t see local TV stations doing a lot to make their communities better.

By emphasizing profits over public service, TV stations have not endeared themselves to the people who live in the communities the stations are supposed to serve. Therefore, TV stations’ licenses to use the spectrum are vulnerable, and station owners are terrified. You’d think they might try to turn the situation around by increasing their public service and serving their communities better. However, does Chase Carey look like a guy who puts the common good first, who wants to serve his community, who wants to give Downton Abbey to the servants?

I think he looks like a man who’s saying, “Don’t tred on my profits, Aereo … even if I don’t deserve them.”

The Ten Most Hated Jobs – Why?

Of the blogs I read regularly, Steve Denning on Forbes.com consistently writes the most thoughtful ones about management. Recently he posted about the ten happiest and the ten most hated jobs in America. I think there are some lessons in the lists for managing media organizations and media salespeople.

Ten Happiest Jobs

  1. Clergy: The least worldly are reported to be the happiest of all.
  2. Firefighters: Eighty percent of firefighters are “very satisfied” with their jobs, which involve helping people.
  3. Physical therapists: Social interaction and helping people apparently make this job one of the happiest.
  4. Authors: For most authors, the pay is ridiculously low or non-existent, but the autonomy of writing down the contents of your own mind apparently leads to happiness.
  5. Special education teachers: If you don’t care about money, a job as special education teacher might be a happy profession. The annual salary averages just under $50,000.
  6. Teachers:Teachers in general report being happy with their jobs, despite the current issues with education funding and classroom conditions. The profession continues to attract young idealists, although fifty percent of new teachers are gone within five years.
  7. Artists: Sculptors and painters report high job satisfaction, despite the great difficulty in making a living from it.
  8. Psychologists: Psychologists may or may not be able to solve other people’s problems, but it seems that they have managed to solve their own.
  9. Financial services sales agents:Sixty-five percent of financial services sales agents are reported to be happy with their jobs. That could be because some of them are clearing more than $90,000 dollars a year on average for a 40-hour work week in a comfortable office environment.
  10. Operating engineers: Playing with giant toys like bulldozers, front-end loaders, backhoes, scrapers, motor graders, shovels, derricks, large pumps, and air compressors can be fun. With more jobs for operating engineers than qualified applicants, operating engineers report being happy.

No big surprises here. People who help other people, find intrinsic motivation in their work, and have autonomy seem to be happy. There is much more focus on the meaning of their work and of their lives rather than on money.

The Ten Most Hated Jobs

  1. Director of Information Technology: Information technology directors hold almost as much sway over the fate of some companies as a chief executive, but they reported the highest level of dissatisfaction with their jobs. Why? “Nepotism, cronyism, disrespect for workers.”
  2. Director of Sales and Marketing: A director of sales and marketing plans reported the second-highest level of job dissatisfaction, “a lack of direction from upper management and an absence of room for growth.”
  3. Product Manager: Product managers complained of restricted career growth, and boring clerical work even at this level.
  4. Senior Web Developer: Senior web developers reported a high degree of unhappiness in their jobs, because employers are unable to communicate coherently, and lack an understanding of the technology.
  5. Technical Specialist: A technical specialist reported that for all their expertise, they were treated with a palpable disrespect. Their input was not taken seriously by senior management.
  6. Electronics Technician: Electronics technicians complain of having too little control, work schedule, lack of accomplishment, no real opportunity for growth, no motivation to work hard, no say in how things are done, and mutual hostility among peers.
  7. Law Clerk: Clerkships are among the most highly sought-after positions in the legal profession and the job beefs up a resume. Yet law clerks still report high levels of dissatisfaction. The hours are long and grueling, and the clerk is subject to the whims of sometimes mercurial personalities.
  8. Technical Support Analyst: Technical support analysts help people with their computer issues. This typically amounts to calmly communicating technical advice to panicked individuals, often over the phone, and then going on site only to find the client simply hadn’t turned the printer on. They may be required to travel at a moment’s notice, sometimes on holidays or weekends.
  9. CNC Machinist: CNC machinists operate computer numerical control machines. For the uninitiated, this is a machine that operates a lathe or a mill. Now that the CNC operator has had most of the physical hazards of manufacturing replaced by a machine, there’s not a lot to do but push buttons and maintenance. Since it’s a specialized skill, the job offers no room for advancement.
  10. Marketing Manager: Marketing managers often cited a lack of direction as the primary reason for job dissatisfaction.

Some surprises here. If people don’t feel like they are helping others, don’t have room for growth, or have a job focused on extrinsic rewards (money and profits), it appears that they hate their jobs.

But why do sales and marketing directors and product managers say there is no room for growth, when the odds are the CEOs of a majority of companies come out of these jobs. There must be something else going on. I think that in many of the hated jobs there is focus on money and profits and not on meaning, not on helping others.

So what can media companies and media sales management do to make the people who work in their organizations happier (assuming they care about their people being happy)?

One adjustment media managers can make is to emphasize meaning instead of money, emphasize helping and serving others instead of maximizing revenue, increasing shareholder value, or garnering ratings. If salespeople were told their number-one goal is to delight their customers by getting results for them (results as their customers define them) and their number-two goal is to educate customers and give them insights on how they can grow and be more successful, then salespeople more than likely would be happier; they might say to themselves, “I helped someone today.”

And instead of compensating media salespeople wholly or partially on commission, why not pay them based on delighting customers by giving them superb service as measured by customer satisfaction surveys?

Emphasizing the purpose and meaning of media sales jobs, providing an intrinsically motivating work environment, and encouraging salespeople to delight customers might well make salespeople happier than paying them more money, and, by the way, it might well increase profits by increasing revenues and reducing expenses. It might be worth a try, especially in attracting younger people who are often looking for work that gives them a sense of meaning.

Innovative Move by Marissa Mayer

The blogsphere, newspapers, and magazines have been full of opinions about Yahoo CEO Marissa Mayer’s decision last month to have everyone who telecommutes at Yahoo come into the office. Most of the opinions I read were complimentary of Mayer’s decision for a variety of reasons.

Michael Schrage wrote on the HBR Blog Network that “Marissa Mayer Is No Fool” and Greg Satell’s headline in a Forbes blog was “One More Reason to Applaud Marissa Mayer.” Max Nison wrote in the typically curmudgeonly Business Insider that “Marissa Mayer Got It Right – You Can’t Fix a Broken Culture When People Aren’t In the Office,” and in the more august Atlantic, Ann-Marie Slaughter (a professor at Princeton) opines that “Marissa Mayer’s Job Is to Be CEO—Not to Make Life Easier for Working Moms.”

Admittedly, it might well be confirmation bias that I read items that were positive about Mayer’s decision, but there are two reasons (among many) that I thought were particularly important about her decision to bring telecommuters in out of the cold, so to speak.

One reason, mentioned in several blog posts and articles, was that Mayer’s decision was not based on the notion that “this is the way it’s always been done” or gut feel, which is typical thinking in most legacy media companies, but was based on hard data.

Apparently, Mayer looked at data that indicated telecommuters were not logging into the Yahoo VPN and recognized that a large number of the WFH (Work From Home) people were not fully engaged or not productive.

Another reason I believe Mayer’s decision was right is not one that was indicated (certainly not stressed) in the blog posts and articles I read, and that reason is Yahoo’s desperate need for innovation. And, as pointed out in many books, articles, and research studies, innovation occurs when people mix with other people.

Steven Johnson, in his brilliant book, Where Good Ideas Come From, writes about the vital importance of “the adjacent possible” and liquid networks for innovation to occur, and gives the example of MIT’s famous Building 20:

…the temporary structure build during World War II somehow managed to last fifty-five years, in part because it had an extraordinary track record for cultivating both breakthrough ideas and organizations like Noam Chomsky’s linguistics department, Bose Acoustics, and the Digital Equipment Corporation.

Breakthrough ideas usually don’t come from people working alone at home. Innovation comes from people bumping into each other, from water-cooler discussions, from open-space areas between cubicles, and from buildings like Pixar’s that in his book Steve Jobs Walter Isaacson writes Jobs designed with typical obsessiveness so that people couldn’t avoid random encounters – sort of like Google’s offices, where Marissa Mayer famously worked before she became CEO of Yahoo.

Google and Steve Jobs’s Apple are companies where sustaining and disruptive innovations come by the truckloads. Yahoo has been stuck in the past and hasn’t innovated much, so Mayer had to change the company’s culture and kick-start its innovation engine. She had to kick people out of the isolation in their homes and bring them back to company offices where they could collaborate and innovate.

I have not been in Yahoo’s offices, but I have been in the New York offices of Google and Facebook. The walls in the halls of most of Google’s NY offices are floor-to-wall whiteboards full of ideas and formulas (no pictures allowed), and Facebook’s NY offices are open spaces with rows of tables with people sitting side by side working on their computers.

Google’s and Facebook’s offices are nothing like those of Viacom, CBS, Hearst, or Time-Warner, whose fancy offices more often reflect the overblown sense of self-importance of their executives rather than reflecting the importance of openness and collaboration for innovation.

As legacy media executives struggle to deal with the disruptive innovation of the Internet, and as they lose their distribution advantage to the Web, they should take a page from Marissa Mayer’s playbook, get out of their plush offices, and make a move for innovation.

Stuck In Their Ways

In the February 17 issue of the New York Times Magazine Robert Draper wrote an article titled “Can the Republicans Be Saved From Obsolescence?” The graphics are awesome; check them out.

Draper reported on a Republican-conducted focus group session in which a researcher asked what younger swing voters associated with the word “Republican.” When the facilitator wrote the word “Republican” on a whiteboard,

… the outburst was immediate and vehement: “Corporate greed.” “Old.” “Middle-aged white men.” “Rich.” “Religious.” “Conservative.” “Hypocritical.” “Military retirees.” “Narrow-minded.” “Rigid.” “Not progressive.” “Polarizing.” “Stuck in their ways.” “Farmers.”

Except for “Military retirees,” “Farmers,” and, perhaps, “Religious,” the focus group could have been talking about legacy media top management, especially the comment about “Stuck in their ways.”

And there is no better example of being “stuck in their ways” than the legacy media way of compensating salespeople, primarily on commission.

As Daniel Pink suggests in his best-selling new book, To Sell Is Human and in his Harvard Business Review article “A Radical Prescription For Sales,” “the reps of the future won’t work on commission.”

What if paying salespeople commissions is rooted more in tradition than logic? What if it’s a practice so cemented into orthodoxy that it’s no longer an actual decision? That’s what a handful of companies have begun discovering. To the surprise of many, these firms are showing that commissions can sometimes do more harm than good—and that getting rid of them can open a path to higher profits.

We know that most legacy media CEOs care about only two things: One, compensating themselves an undeserved, gargantuan amount of money, and, two, higher profits every year.

Don’t these CEOs read? Can they read? That’s a legitimate question, because either they don’t read (or can’t) or they do read about but don’t pay attention to the latest trends in compensation and often make their salespeople perform worse than they otherwise would by paying them the wrong kind of commissions. For example, using yield management programs to determine optimal rates and then paying salespeople commissions based on getting the computer-generated higher rates.

The assumptions management makes are: One, that all salespeople are motivated solely by money, and, two, that salespeople have control over the rates advertisers will pay.

Clearly legacy media managers are motivated by money, so they assume everyone else is. Plus, their bonuses are based on higher profits every year, so they assume all of their salespeople are interested in helping them receive a higher bonus. Wrong, arrogant, and stupid.

But stupid is as stupid does; even Forrest Gump knew that. And that’s what paying salespeople primarily on commission does – makes them stupid. Makes them hunters. And what do hunters do? They kill and eat their prey.

Commissions, especially commissions based on higher rates or higher shares, force salespeople to treat their customers as prey.

But do you think the new media companies such as Google or Facebook, or companies such as Amazon or Apple consider their customers prey? Of course not. Their primary business strategy is to delight their customers, not kill them. Their salespeople are educators who, to use Daniel Pink’s term, upserve their customers, not upsell them.

Yes, legacy media top managers are stuck in their ways, particularly when it comes to compensating salespeople, and they can’t be unstuck from obsolescence any more than the Republicans can.

Google Wins, Legacy Media Loses

For the second year in a row, Google is the best company to work for in America according to the 2013 FORTUNE list of the “100 Best Companies to Work For.”

Also, Google “earned higher marks from marketers and ad agencies than any other media company last year, according to the latest annual Advertiser Perceptions research, offering traditional media a discouraging note as they wade into 2013,” as reported in Ad Age. Way to go, Google!

What legacy media companies are on the 2013 FORTUNE list of the “100 Best Companies to Work For?” None – and none in any of the previous five years. Disney, News Corp., Viacom, Time Warner, CBS, Comcast NBC Universal did not make the list, and, in fact, only one of these huge media conglomerates have ever made the FORTUNE list of the “100 Best Companies to Work For ” — Disney over ten years ago, as I remember.

The only media company to make the FORTUNE list in the last five years has been Dreamworks Animation, which is number 12 on the 2013 list and was number 14 on the 2012 list. Way to go Dreamworks and Jeffrey Katzenberg! (By the way, Katzenberg was not on the Forbes list of the 100 top-paid CEOs in the country.)

But media giant Comcast did distinguish itself in 2012 by winning the Consumerist Worst Company In America (“Golden Poo”) award. Way to go, Comcast!

If you look at another list – Forbes’ top paid CEOs in the United States – you’ll see that there are more top-paid CEOs who run legacy media companies than top-paid CEOs in any other industry, including banks and financial services companies.

So, what’s the logical conclusion? Is it that the higher the compensation of a media company CEO the worse the company is to work for? Is Les Moonves, the top paid media company CEO, worth $41.5 million? Is David Zaslav of Discovery Communications worth $40.7 million, Bob Iger $40 million, Philip Dauman $30 million (down from $43 million the year before and $84 million the year before that), Rupert Murdoch $25 million, Jeff Bewkes $20 million, Brian Roberts $19 million, or Glenn Britt (Time Warner Cable) $16.5 million?

Well, maybe the legacy media execs are worth it if the top earner on the Forbes list of top paid CEOs, John Hammergren, of McKesson is worth $131 million, or if number-two earner, Ralph Lauren, is worth $67 million (about half of Ralph’s income came from yours truly, or at least it seems that way to my wife).

And Bob Iger may come close to earning his compensation because ABC and ESPN are owned by Disney, and even though Disney isn’t on the list of the best companies to work for, ABC was the highest-rated overall media company in 2011, according to the Advertiser Perceptions study reported in Ad Age.

Ad Age reports:

Within cable, marketers and agencies chose ESPN for best brand strength, the NFL network for sales knowledge, The Weather Channel for customer service and AMC for advertiser satisfaction.
Among print brands, the best ranked were ESPN The Magazine for brand strength, Cooking Light for sales knowledge, Martha Stewart Living for customer service and Food Network Magazine for advertiser satisfaction.

So Iger’s ABC and ESPN do better with advertisers than the higher paid Moonves’s CBS and Zaslav’s Discovery Communications. Thus, the conclusion has to be that Moonves and Zaslav are the most overpaid – the worst deal for stockholders – of any of the major legacy media companies.

And we also might well conclude that these overpaid media executives aren’t a good deal for employees, either, since none of these media companies are on the list of the best companies to work for.

And what about innovation, the engine for growth and future success? Which companies are most innovative, Google or the legacy media companies? Obviously, Google.

It seems as though the legacy media companies are wasting money on outrageously overblown compensation to CEOs instead of investing in innovation. Bad decision.

What kind of deal are the employees of Google getting? Google is the top-rated company to work for and the top rated company with advertisers, and its CEO, Larry Page’s, salary is a buck a year. That’s right, $1. Pretty good deal for stockholders and employees.

What do these compensation levels signal to employees and to the public about media executives? Doesn’t Larry Page come off as being a good deal for stockholders and employees and Les Moonves come off as being a terrible deal for stockholders and employees? What company would you rather work for, Google or CBS or another legacy media company?

Is it any wonder that Google is winning on all fronts – employee satisfaction, advertiser perception, revenue, innovation, and profits, and the legacy media are losing?

Remaining in the Railroad Business

In the 1980s and 90s I did a lot of sales consulting for radio and TV stations and cable companies. One service I provided was a Sales Audit. I would ask sales management a long list of questions, interview the sales force, and ask the salespeople to complete a confidential survey.

On the survey one of the questions I’d ask was, “In rank order, what do like best about working for your station?” The two answers that invariably ranked either number one or number two were, “Getting results for clients” and “Fellow co-workers.” Typically number three on the list of what the salespeople liked best was, “Management.”

Interestingly, when I asked. “In rank order, what do like least about working for your station?”, the number-one answer was typically “Management.” When I asked salespeople what they disliked most about sales management, the answer usually was, “They beat us up about closing and about making the station’s budget.”

In rare cases (about 10 percent of the time), one of the top three answers about what salespeople liked best was, “Money” or “Commissions,” which was surprising to most managers (they thought it would be number one), but the answer was consistent with the research on what motivates people. The top-selling Harvard Business Review article is by Fredrick Herzberg titled “One More Time: How Do You Motivate Employees?” The 1968 article is about money not being a prime motivator of people – including salespeople – typically ranking number five or six.

A more recent affirmation of the money-isn’t–the-best motivator truism is Daniel Pink’s 2009 best-seller, Drive: The Surprising Truth About What Motivates Us, in which the author concludes, after exhaustive research on the topic, that what motivates people is autonomy, mastery, and purpose. In fact, Pink stresses, money can demotivate us – a point he makes effectively in his TED talk, and in his excellent, white-board animated talk to the Royal Society.

Pink’s latest book (2012) is To Sell Is Human: The Surprising Truth About Moving Others,. One of the main points he makes is that the best way to move others is to make them look good – to serve them. Pink writes about a “more transcendent definition of service – improving other’s lives and, in turn, improving the world. At its best, moving people can achieve something greater and more enduring than merely an exchange of resources.”

Pink’s concept that selling (moving) people requires that you serve them, that you improve their lives, echoes the answers I got on my survey of broadcast and cable salespeople – that one of the top things that motivated them was “getting results for clients.”

The notion that salespeople are motivated by the purpose of helping their clients is forcefully reinforced by a new book by Lisa Earle McLeod, Selling With Noble Purpose: How to Drive Revenue and Do Work That Makes You Proud.

McLeod builds on Daniel Pink’s well-supported claim that what motivates people is autonomy, mastery, and purpose, and what moves people is making them look good (serving them). She writes that in a sales force she was working with that “top performers weren’t driven solely by money. They were driven by purpose.” In company after company McLeod worked with, the top salespeople wanted to help their customers, wanted to help make their customers’ lives and their businesses get better and healthier.

McLeod discovered that internal conversations with salespeople became external conversations with clients. If sales management talked about closing, gaining share, and maximizing revenue, and, worse, offered incentive systems that reward these short-term internal objectives, that salespeople talked to clients that way (explicitly or implicitly) and acted accordingly. They left the client’s needs, interests, and objectives completely out of the picture.

The worst sales practices McLeod outlines in Selling With Noble Purpose read as though she were describing the sales practices in radio, newspapers, magazines, television, and cable: Internal discussions about closing, gaining share, maximizing revenue (price gouging), and negotiating to win – and then paying salespeople entirely or in part based on commissions, which maximizes selfish, predatory behavior.

I’m not sure the old media will ever learn before it’s too late. It’s obviously too late for most newspapers to learn (they thought they were in the newspaper business), and unless the other legacy media learn to sell with a noble purpose (help clients get results and make their lives easier), they’ll go the way of the Pennsylvania Railroad, which thought it was in the railroad business.

If you’re in the legacy media (or use legacy media sales practices) and are interested in learning how to sell in this new age of myriad media choices and motivating an idealistic young generation of salespeople, read 1) The Challenger Sale: Taking Control of the Customer Conversation, 2) Drive: The Surprising Truth About What Motivates Us, 3) To Sell Is Human: The Surprising Truth About Moving Others, and 4) Selling With Noble Purpose: How to Drive Revenue and Do Work That Makes You Proud.

Read them, change accordingly, or remain in the railroad business.

The Media Must Become Unbalanced Again

When the First Amendment to the Constitution was written in 1789 prohibiting “the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing of the freedom of the press, interfering with the right to peaceably assemble, or prohibiting the petitioning for a governmental redress of grievances,” the press, primarily newspapers and pamphlets, was highly partisan, polarized, and unbalanced.

And it stayed that way until the 1830s when the penny press in New York figured out that it was commercially more viable to be non-partisan and balanced – that way they could sell twice as many papers to both sides of the political spectrum. Reducing newspaper’s price to a penny also started a circulation war because selling more papers not only meant more circulation revenue but also more advertising revenue.

Pulitzer and Hearst fought the New York penny press wars with sensational headlines as news morphed from being partisan information for the elite to being non-partisan entertainment for the masses. News content decisions for the penny press transitioned from being primarily a public service to being primarily a money machine. Sound familiar?

The same thing happened to radio and then, of course, to television. When William S. Paley at CBS started radio news and then TV news, it was loss-leader programming meant to enhance the network’s reputation and image. It wasn’t until the late 1980s when Larry Tisch bought CBS and G.E. bought RCA and, thus, NBC that the notion that television news should be a profit center was introduced by non-broadcast, corporate profit maximizers. And maximizing profits meant being balanced – actually the motivation was not a positive one of being balanced and non-partisan, it was a negative motivation of not pissing off anyone, especially advertisers. Vanilla was the favorite flavor.

But when cable TV started eating into broadcast TV viewing, and entertainment and news programming became more fragmented, just like in the days of the penny press, balance didn’t sell as well as sensationalism. News once again became opinionated entertainment: Limbaugh, O’Reilly, Hannity, Matthews, O’Donnell, et al.

Media critics, including this one, have decried the polarization of news into far right and far left camps populated by vicious, angry entertainers who make a sick joke of Fox News’s Big-Brother slogans, “fair and balanced” and “we report, you decide,” and MSNBC’s “lean forward.” These slogans have the same validity as 1984’s “war is peace,” “freedom is slavery,” and “ignorance is strength.”

Up until the December 14th killings at Newtown, I decried the unbalanced, right-left polarized media. But no longer. After NRA top lobbyist, Wayne LaPierre disgustedly ranted in a December 21st press conference:

“The only thing that stops a bad guy with a gun is a good guy with a gun,” LaPierre said.

He blamed video games, movies and music videos for exposing children to a violent culture day in and day out.

“In a race to the bottom, many conglomerates compete with one another to shock, violate, and offend every standard of civilized society, by bringing an even more toxic mix of reckless behavior and criminal cruelty right into our homes,” LaPierre said.

OK, the NRA is blaming the media for the shootings in Newtown, so it’s time for the media to get unbalanced and fight back, not because the media has to get revenge on the NRA and other wingnuts who blame the media, but because it’s the right thing to do, it’s a public service to ban the manufacture and sale of assault weapons and hand guns.

I’m mad as hell, and I’m not going to take it any more. There is no balanced side to the debate about eliminating assault weapons and hand guns. Ask Bob Schieffer of CBS News, David Gregory of NBC News, or Piers Morgan of CNN. Ask the parents of the 20 children who were slaughtered at Sandy Hook Elementary School.

The media, the news media must get more unbalanced on this issue and promote and market like only the media can. They must fight the NRA and the gun lobby and push to pass meaningful legislation to try to stop people slaughtering other people using guns made for mass destruction.

Author Thomas Ricks Is a New-Age Salesperson

Thomas Ricks, Pulitzer-Prize winning journalist and author of the NY Times best-selling book about the war in Iraq, Fiasco, and the current hot seller, The Generals: American Military Command from World War II to Today had an interview with Fox News cut off after 90 seconds because he dared tell the interviewer Jon Scott the truth: Fox News functions “as a wing of the Republican Party.”

In the same week Ricks said to a Washington Post reporter, “MSNBC invited me, but I said, ‘You’re just like Fox, but not as good at it.’ They wrote back and said, ‘Thank you for your candor,’” and of course there was no interview on MSNBC.

Ricks’s The Generals’ main hero is Gen. George Marshall, one of whose distinguishing characteristics was that he “told the truth to power.” Ricks writes that Marshall’s blunt comments to Gen. Pershing in World War I helped his career because Pershing appreciated the truth even if it was contrary to what he wanted to hear.

Same with Franklin Roosevelt. Marshall’s respectful, confidential (non-public) dissent convinced Roosevelt to change his support for a large pre-WW II build-up of air power and to build up ground forces instead, which proved to be the right decision when the war came. The notion of telling truth to power is one of the main lessons of The Generals.

And it’s pretty much the same lesson we learn from the transformational book on selling, The Challenger Sale, which breaks into smithereens previous models of selling with reference to massive Corporate Executive Board (CEB) research on today’s successful sales forces.

The research indicates that there are five types of salespeople: The Hard Worker, the Lone Wolf, the Challenger, the Reactive Problem Solver, and the Relationship Builder.

The best performers? Contrary to previous received wisdom, the best performers are not Relationship Builders, who lower prices and tell clients whatever they want to hear, but are the Challengers who tell clients the truth, who teach clients how to buy, and who take control of the conversation. In other words, the best salespeople tell the truth to power, like Thomas Ricks did to Fox News and MSBNC.

I’m guessing that the crusty, curmudgeonly journalist Thomas Ricks or the straight-laced, publicity-shy general George Marshall would not be thrilled to be called great salespeople, but they are in fact, role models for and representative of the best new-age salespeople who don’t make their living by buying drinks, lunches, and tickets for their clients and by telling them what they want to hear. The best new-age media salespeople, tell clients the truth, respectfully and confidentially (like Ricks and Marshall did), and help them get results.

Great media salespeople don’t put their careers, the money or commission they might make from a deal, or their companies first, they put their clients’ interests first. They tell the truth to power.

Obama Was Wrong About Romney’s Salesmanship

In a speech in the last week of the campaign, President Obama said about Mitt Romney: “He’s a very talented salesman, and in this campaign he’s tried as hard as he can to repackage the same old ideas and pretend they’re new.”

Obama used the Mark Anthony strategy and damned Romney with faint praise, but Mitt proved that even the faint praise was exaggerated. He was a terrible salesperson; he could only sell himself to people who looked like him and were about his age. And worse, he proved he was a sore loser and refused to take responsibility for running a lousy campaign and having a terrible sales pitch.

In a post-election conference call with supporters and donors, according to the NY Times, Romney said:

…his team still felt “troubled” by his loss to President Obama … [and] attributed defeat in part to what he called big policy “gifts” that the president had bestowed on loyal Democratic constituencies, including young voters, African-Americans and Hispanics.

…Mr. Romney said Wednesday afternoon that the president had followed the “old playbook” of using targeted initiatives to woo specific interest groups — “especially the African-American community, the Hispanic community and young people.”

In other words, Romney was whining, “It wasn’t my fault!” Oh, yeah? How about breaking one of the most basic rules of selling, “Don’t knock the competition.”

How dumb was it to start the campaign knocking a personally popular president? Making robot-like speeches claiming that Obama “just wasn’t up to the job” of course alienated people who didn’t look like Mitt Romney but did like the president and his policies. It reminds me of the way magazine reps used to sell magazines by starting their pitches to buyers with, “Don’t buy my competitor, their circulation is down,” and not being sensitive enough to know that the buyer was buying the magazine the salesperson was knocking, thus insulting the buyer’s judgment.

When I used consult for radio and TV stations and networks, I would often conduct a Sales Audit, which I would begin by meeting with a sales staff, asking them a series of questions, and then listening carefully to the answers. When I would ask something like, “How are sales going?” (or something sort of vague related to revenue), and I got excuses such as “Well, ratings are down,” or “The station doesn’t promote enough,” or the ever-present “Our competitors all lower their rates, what can we do;” I knew they were losers because, like Romney, they didn’t take responsibility, they wouldn’t be personally accountable for results.

And I would remember Jim Freeman, the general sales manager of a radio station in Los Angeles, and the best at his job I ever saw. In one unforgettable sales meeting, Jim, with enormous pride, showed the sales staff a chart that looked like a big X. The line that started at the top left and went down to the bottom right represented the station’s ratings. The line that started on the bottom left and went up to the top right represented the station’s billing (revenue).

Jim said, “Look, we’ve had 21 down rating books, and every month we’ve had revenue growth. We’ve just had another down book. Another character builder. Another opportunity to show management how good we are!” And he meant it, and the billing went up.

Jim and his sales staff took responsibility for getting results. Each sales manager and salesperson was personally accountable for creating value for their station and increasing revenue. They didn’t knock the competition. How could they; the competitors had higher ratings, were more popular. All the sales staff could do was sell the benefits of their programming, their target audience, and their ability to service accounts. They were winners.

Being a good salesperson doesn’t mean lying to get an order, doesn’t mean knocking the competition, or doesn’t mean blaming the competition for being unfair; it means taking responsibility and being accountable for results regardless of the competition.

Does Real-Time Bidding Threaten Salespeople?

eMarketer estimated this week that buying display ads through real-time bidding (RTB) platforms will account for 13 percent of online display spending in 2012, rising to 25 percent in 2015.

Does the increased use of RTB mean that more and more salespeople will be disintermediated by ad exchanges and trading desks and put out of work?

No.

Silicon Alley Insider’s November 15th Chart of the Day showed that “Google Rakes In More Ad Dollars Than U.S. Print Media” – yes, more than all magazines and newspapers combined. But over the last several years Google has added scads of salespeople as it has grown, even though the final sale of keywords is handled by AdWords, Google’s online RTB platform.

What has happened, though, as the result of automated ad-buying platforms and exchanges is that the role of digital salespeople has changed dramatically. Their role has morphed from “closer” to “educator.” Traditional advertisers and agencies are often lost when they try to buy new mediums such as search and social media. They don’t need closing; they need educating. They need help in buying these dramatically different and radically new mediums.

Advertisers also need insights into how search, social media, and mobile advertising can save them money, increase their advertising ROI, and help them sell a lot more stuff, as brilliantly described in the bellwether book, The Challenger Sale. Exchanges and RTB platforms can’t educate clients, can’t give insights, and can’t build trusting relationships. You can’t get a hug from a computer … yet.

In David Mamet’s play and movie, “Glengarry Glen Ross,” the chilling speech by Blake (brilliantly played by Alex Baldwin in the movie) in which he nastily exhorts the real estate salespeople (all men) to “ABC — Always Be Closing” is a classic view of the old-fashioned perception of salespeople in a bygone era before Google, Facebook, and Twitter. Salesmen were closers then. Salespeople are educators today, or they’d better be unless they want to be replaced by RTB platforms.

RTB platforms drive prices down; they’re only concerned about price, not value. Good sales educators drive value up by gaining client trust and giving insights and strategies on how to invest in digital advertising and marketing.

So, as digital advertising investment for the world’s largest media companies (38 percent) approaches television ad investment (42 percent), according to Silicon Alley Insider’s October 2nd Chart of the Day, it won’t but a few more years until online becomes the world’s number-one ad medium. And this top rank will not be because of RTB platforms, which will do an increased percentage of the grunt work of buying, but will be because of flesh-and-blood salespeople building trust and educating clients how to invest in digital advertising and, by the way, how to use the RTB platforms.

What The President Thinks of Salesmen

Let me begin with a disclaimer. I voted for Barack Obama in 2008 and supported him for re-election this year. I like his character, I like what he’s done in foreign policy, and I like what he did in bailing out General Motors and Chrysler. But I don’t like his attitude toward “salesmen.”

In a speech in the last week of the campaign, here’s what Obama said about Romney:

He’s a very talented salesman, and in this campaign he’s tried as hard as he can to repackage the same old ideas and pretend they’re new. In fact, he’s offering them up as change, says he’s the candidate of change. Now, let me just say this: We know what change looks like, and what he’s selling ain’t it.

Obama, or rather his speechwriters, instead of calling Romney a liar, called him a “salesman,” which really pisses me off for two reasons: 1) He’s using an outmoded, pejorative image of a “salesman” as a liar and a persuader who tries to sell something defective. It’s a 1950s image of a used-car salesman with a wide, insincere smile, in a gaudy checkered sport coat, and with a loud, loosened, Windsor-knotted tie trying desperately to sell a lemon of a car to a clueless customer. 2) He’s using an old-fashioned gender-specific word for salespeople that inherently presumes everyone in sales is a man (and a liar).

Obama’s speechwriters (and we can assume, Barack, too) haven’t read The Challenger Sale, the bellwether book based on extensive research by the Corporate Executive Board that, if its principles are followed, advances the craft of selling to a new level of professionalism.

The Challenger Sale indicates that the most successful salespeople, not “salesmen,” are those who give insights to customers on how to make the customers’ businesses more successful and who teach customers how to buy and use the products or services they are selling. The most successful salespeople are educators, are evangelists, are experts in their products, and help their customers get what the customers want – more sales and profits. Successful salespeople are not liars.

In the media, the two best performing sales organizations, according to surveys of sales staffs, including those of Jack Myers, are Google and ESPN. Google salespeople don’t sell search to clients, they educate clients on how to use search. They are educators.

ESPN salespeople don’t sell spots or banners or pages to clients, they educate clients on creative executions and relevant sponsorships. They are evangelists.

And all of Google or ESPN’s salespeople are not salesmen. In fact, the last time I checked, ESPN’s top salesperson is a woman.

So, come on, let’s get real here and stop demeaning a noble craft and remember the old adage that “nothing happens until someone sells something,” and that something isn’t sold by lying or persuading, but by educating customers; and that something isn’t sold just by men.

“The Newsroom” Is a Sirloin Steak Dress

I blogged last week about HBO’s “The Newsroom” and how the show debuted at an opportune time soon after the Gallup Poll showed American’s confidence in TV News at a all-time low. There is now no place for the credibility of TV journalism to go but up, and if it does rise in future polls, you can bet in the prediction market that “The Newsroom” creator and writer Aaron Sorkin’s price will go up.

Sorkin’s credibility may go up among those in the political center and left of center, but the credibility of TV News is not likely to budge for several reasons:

  1. The primary viewers of TV News (65+) are dying off, and just about the only advertisers in a non-election year that want to reach these aging viewers are pharmaceutical marketers.
  2. In spite of the massive infusion of money during this election year, the broadcast and cable news providers and especially local TV stations will almost certainly not invest in improving their news product, but will take the money to boost their bottom lines during these recession years and in the face of stockholder demands.
  3. In their desperation to turn around the overall news ratings decline trend (a virtually impossible task), news providers will become more partisan on the right and left to attract a diminishing core of extremists at both ends of the political spectrum.
  4. This drift to extreme positions will turn off younger viewers, whom Jack Myers labels as Internet Pioneers in his excellent book Hooked Up, furthering the decline of news ratings as more and more Internet Pioneers and those under 55 abandon TV News for instant updates on Google News, CNN online, Twitter, and Facebook.

Therefore, I think Aaron Sorkin is trying to keep afloat a journalism Titanic. His ego and idealism will carry him through at least two seasons of “The Newsroom” (HBO has renewed for a second season), but it will not survive based on its high-minded journalistic idealism, which Charles Pierce in an online Esquire blog, indicated was a world that never was, a world that exists only in “what Sorkin imagines it once was.”

“The Newsroom’s” ultimate success will be determined by essentially the same speculations that make “Jersey Shore” a hit. Who will wind up sleeping with whom?

Lady Gaga wrapped a cute body in a sirloin steak dress to get attention. Aaron Sorkin is wrapping non-ratings-driven journalistic integrity in a dress of sexual tensions to get attention, and he’s getting it. But “The Newsroom” will not change TV journalism. Like Lady Gaga’s sirloin steak dress, integrity-driven TV journalsim will be cooked.

Confidence In TV News Hits All-Time Low As “Newsroom” Debuts

On July 10, the Gallup organization announced the results of its latest poll on America’s confidence in various institutions with the headline “Americans’ Confidence in Television News Drops to New Low:”

Americans’ confidence in television news is at a new low by one percentage point, with 21% of adults expressing a great deal or quite a lot of confidence in it. This marks a decline from 27% last year and from 46% when Gallup started tracking confidence in television news in 1993.

The findings are from Gallup’s annual update on confidence in U.S. institutions, conducted June 7-10 this year. As such, the findings preceded the erroneous initial reports by cable-news networks CNN and Fox News regarding the U.S. Supreme Court’s June 28 decision about the constitutionality of the U.S. healthcare law.

Producer/writer Aaron Sorkin could not have chosen better time for the debut of his HBO program “Newsroom” starring Jeff Daniels as the self-absorbed but journalistically righteous anchor Will McAvoy and Emily Mortimer as pro-integrity and anti-ratings executive producer MacKenzie McHale.

Sorkin obviously knew of Americans’ disgust with TV news as he was developing “Newsroom” and clearly is attempting to show the conflict between the type of ratings-driven pandering done by Fox News, MSNBC (now NBC News), CNN, and especially local TV stations to journalistically sound reporting done only by NPR Radio in the broadcast and cable realm.

“Newsroom” is entertaining in focusing on the problem, but Sorkin hasn’t yet, as of episode four, indicated who’s to blame for the ratings-and-profit-driven news pandering, although in episode three there is a hint that the CEO of McAvoy’s ACN (played briefly but chillingly by Jane Fonda) might be to blame. We’ll see.

Also, the Gallup poll indicated:

Among 16 U.S. institutions tested, television news ranks 11th, following newspapers in 10th place. The 25% of adults who express a great deal or quite a lot of confidence in newspapers is down slightly from 28% last year. Confidence in newspapers is now half of what it was at its peak of 51% in 1979.

So, the credibility of two once admired legacy mediums, television news and newspapers, are at all time lows. Who’s to blame? Is it bloviating, self-absorbed talent like Rush Limbaugh, Bill O’Reilly, or Keith Olbermann in television, or the inaccurate, self-absorbed reporters in newspapers like Jason Blair, Judith Miller (ex NY Times, now Fox News, of course), or Alessandra Stanley (NY Times TV critic and reporter)?

Even though the bloviators and reporters (I don’t know of an equivalent adjective similar to “bloviator” for newspaper journalists) mentioned above are consistently inaccurate and lack basic journalistic truth telling, they are just doing what management allows them to get away with. Therefore, who’s to blame – management. Top management.
So we shouldn’t blame Rush Limbaugh, Bill O’Reilly, Keith Olbermann, Jason Blair, Judith Miller, or Alessandra Stanley, the blame must be placed on the greedy Rupert Murdoch, Jeff Bewkes, Arthur Sulzberger, and other corporate executives whose decisions about news and journalism are based primarily on their grossly bloated bonuses, not on public service, public trust, or on credibility.

What these short-term-oriented, greedy CEOs don’t realize is that advertising and subscription revenue will eventually parallel the downward slope of credibility. They need to take a page out Steve Jobs’s management book and focus on products that delight consumers and not on profits. Profits will come, like they did at Apple if the products are superb – and credible with consumers.

Media Sales Executives: Hurry, Buy This Book

When I became VP of Sales Strategy and Development at AOL’s Interactive Marketing division in 1998, I was asked to become active in a membership that the division had in the Sales Executive Council (SEC), part of the Corporate Executive Board.

I remember attending my first meeting of the SEC with top-ranked marketing and sales executives of GE, DuPont, Time Inc., and several large banks, and I was blown away with what the SEC had to offer based on extensive research it conducted in sales organizations of major global corporations.

One of the reasons I appreciated the SEC research is because I had come to AOL from having an endowed chair at the University of Missouri School of Journalism, which I had been hired, in part, because I had an MS in Journalism and was a.b.d. for my Ph.D, which also meant that I had taken several advanced research courses and had some understanding of what good research and methodology looked like.

The SEC provided such insightful information that I used much of what I learned in subsequent sales training at AOL, other organizations I have done training for, and in the fourth edition of my textbook, Media Selling: Television, Print, Internet, Radio..

Well, the SEC and the Corporate Executive Board have done it again. Matthew Dixon and Brent Adamson have written a sales management blockbuster titled The Challenger Sale: Taking Control of the Customer Conversation, and it’s an absolute must read for media sales and marketing executives, especially for those in digital (internet and mobile).

The reason I’m not recommending The Challenger Sale to media salespeople is because, even though they might benefit from it enormously, they will be extremely frustrated and discouraged because there are so few media companies that will be willing to embrace the changes necessary to implement such a successful approach that The Challenger Sale recommends.

Alas, because most media companies sell to advertising agencies, who could care less about solutions to advertiser problems, the approach recommended in The Challenger Sale must be adopted and customized, which most media companies are unwilling to take the time to do. But the major points made that sales reps must “Teach for Differentiation, Tailor [the solution] for Resonance, and Take Control of the Sale” all work in media selling.

The only media companies I know of that come close to the Challenger Sale are Apple (not a pure media company), Google, and ESPN (Disney), but they are not run by bean-counting financial types or narcissistic, greedy cliff-dwellers who think old-style relationship selling is good enough.

If you’re a sales executive who works for the latter type of media company, buy the book, have it shipped to your home, don’t tell anyone you’re reading it, and surreptitiously put into practice all that you can of the Challenger Sale with your flexible, growth-oriented sales reps.

Good luck.

Nielsen’s Digital Video GRPs: Who Gains?

Last fall Nielsen announced it would provide gross rating points (GRPs) for online ads to mixed reviews.  Most of the criticism focused on  the problem of comparing a 30-second TV commercial to a static online banner ad.  Not an apples-to-apples comparison.  It didn’t seem like Nielsen had really found the Holy Grail of media comparability, at least for media buying and planning purposes.

Then a couple of weeks ago, Nielsen announced a partnership with TubeMogul to provide GRPs for online video ads.  Were digital video GRPs now the Holy Grail?  Were there any winners or losers?

Because the Nielson/TubeMogul announcement comes about a month before the TV upfront market breaks, we can assume that the timing of the announcement was not random, but a strategic maneuver to influence the upfront and attempt to give media planners and buyers a defensible reason to move budgets from TV, continuing to suffer from declining audiences, to online video, which is growing like Jack’s beanstalk, and is now measurable in GRPs.

Who gains the most by the introduction of digital video GRPs?  Obviously, the biggest winner is Nielsen, which now has more data to sell.  The second biggest winner (and purchasers of the data) will be internet sites and apps that serve video, which can now try to get GRP-obsessed media planners at the large media agencies to switch money from TV to online.

The losers will be TV and print.  Poor print; digital video GRPs are just another nail in print’s coffin, as though it needed any more nails.  Radio won’t suffer much, because its terrestrial revenue seems to be rising – slowly, but on an upswing – and radio’s biggest upside is in digital, which is on the verge of substantial growth.

And, if media agencies and planners put too much emphasis on GRPs, another group of losers will marketers, because a GRP (or a CPM) never went into a store or online and bought anything.  What marketers care most about is selling the most stuff for the least amount of money – ROI.  Return on investment is the Holy Grail for marketers, and you can’t get reliable and valid ROI metrics from multiple-source and panel data such as Nielsen supplies.  Solid ROI metrics can only come from single-source data.

There is one media agency that is trying to take advantage of marketers’ focus on ROI.   This week ZenithOptimedia Group announced that it:<blockquote>… is refreshing its marketplace branding with the new addition of a “Live ROI” tagline to underscore the shop’s real-time ROI accounting capabilities. The Publicis Groupe-owned media agency network is also sprucing up its logo and redesigning the logos of its specialty units to present a uniform corporate look.

The agency network, comprised of media shops Zenith and Optimedia along with several specialty operations, has been positioned as “The ROI Agency” for the last decade. That overarching descriptor will remain in place.</blockquote>

Is the notion of “Live ROI,” “refreshing” its branding that has been in place for 10 years, and “sprucing up its logo” a new approach for ZenithOptimedia or is it merely a PR push for an old idea that has been dusted off to take advantage of the questions that marketers are bound to ask about what benefit digital video GRPs will have for them?

So, it will be interesting to watch the upcoming TV and internet upfront markets to see if money <i>is</i> shifted from TV to the internet, and where ZenithOptimedia places the majority of its media investments, in GRP-measured TV or in more ROI-accountable online and mobile  — not that they would necessarily tell anyone, but it will be fun to guess in order to speculate if the ZenithOptimedia rebranding is a stunt or a strategy.

And it will be fascinating to watch and see who gains and who loses with the introduction of video GRPs.