Thursday, July 16, 2020

More macroeconomics. And some commercials.

If you want to wallow in the demise of the advertising industry, you can start your wallowfication by looking at the newspaper industry. The same economic forces that have just about killed journalism have taken apart our business as well.

Last week, "The New York Times," (one of the last surviving newspapers) ran a long article about a notable paper in a small once-industrial town outside of Philadelphia, Pottstown, Pennsylvania. Your can read the report here.

The demise of both these industries started, in my opinion, in the same way. The denizens of the industry started hating the industry itself. They no longer believed what they were doing was valuable, important, worth charging for. Along with that disillusionment came their "cashing out." They had had it. So they sold to a rapacious group of "venture capitalists," also known as "vulture capitalists."

Here's how that phenomenon works. You inherit a four-bedroom-house somewhere. You have no intention of ever living in the house. So you stop maintaining the house. Then you begin selling all the insides of the house. Not just the lighting and the furniture and the Magic Chef oven. You sell the floorboards, the wainscoting, the copper pipes, the marble countertops and the asphalt shingles.

Then you look at the skeleton of the house and see it appraised for $17 and conclude, "it was never worth anything anyway."

That's my synopsis, biased of course.

The Times reports thusly, "Meanwhile, the hedge funds and private equity firms that own many newspapers often siphon away profits rather than reinvest in local journalism. Frequently associated with this business model is the Alden Global Capital hedge fund, which controls The Mercury..."

"Vanity Fair" magazine had this to say about Alden Global Capital. "Things looked even bleaker in the Philly suburbs, where a handful of papers that made $18 million for Alden in 2017 at a 30% profit margin, according to industry analyst Ken Doctor, complained of rats, mildew, fallen ceilings, and filthy bathrooms. In her Washington Post column, media critic Margaret Sullivan called Alden 'one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism.'"

Next time you who work for (or worked for) the oligarchy holding companies that own 75% of our industry hear phrases like "salary freeze," "realigning to the changing landscape," or "job cuts," remember that last bit: "one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism." But substitute advertising for journalism.

Part of the ad industry's self-hatred of the ad industry is aligned to the industry's alchemical belief in social media--small, ugly tactics that most people find small, ugly and annoying. Further, at a time of mass-confusion and even chaos, when definition and order are more important than ever, most brands are sending out more and more nonsense aimed at stuntifying them, not defining them. 

Just as in an agency "availability is not a capability," in marketing "showing up is not providing value."

It's no mere coincidence that "platform thinking" from agencies, establishing, defining and clarifying a brand or a product, was usually the highest-paying job in the agency--usually the first jobs eliminated by "senior management." We don't want to pay people so we deem their jobs unimportant. That's vulture capitalism "Newspeak."

In short, just as journalism has stopped upholding journalism advertising agencies--advertising holding companies--have stopped upholding advertising. Worse, they denigrate it.

Sorry, this is dark and angry.

I've earned that attitude through too many years. 

BTW, these two spots crossed my laptop on Tuesday. The Audible spot shot by Mark Denton, Esq. The Currys spot, just sublime. These show what advertising can do. 

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