12.16.2010

Oh Crap. It's another column wherein I'm thinking about the future.


I've been in the advertising business and the photography business for a long, long time.  I'm also married to a graphic designer who spent most of her career in advertising agencies.  I'm no stranger to what's been happening in that industry.  It no longer resembles the terrain you see in Mad Men.  

Just as the photography industry has weathered the onslaught of mindless, royalty free stock, legions of people with cameras willing to work for free,  and crumbling markets for traditional print content, the ad industry has had their share of bombs dropped.  When I ran an ad agency we'd place media for clients in exchange for a 15% mark up.  Place a million dollar campaign and you're take would be, roughly, $150,000.  Sure, we had to research and negotiate for the best deals but it still covered a lot of creative costs.  Over the years clients have whittled away at the 15%.  Now many agencies just do the research and the buy for hourly fees.  A couple hundred bucks an hour doesn't come close to the 15%.

At the same time ad agencies made a profit on printing and creative suppliers.  The mark up on outside suppliers was between 15 and 20% of production costs.  So, if you hired a photographer and he did a campaign and billed you $60,000 your mark up on his bill was $9,000+  If you really beat the photographer up and convinced him to do the job at $6,000 you pocketed a less healthy $900 but your time commitment remains the same while your risk that the image won't be exactly what you wanted grows.

Instead of pushing back on clients and educating them about what it costs to do things right  ad agencies and the art departments in magazines seem to be rolling into the fetal position on prices and lying on the floor whimpering.  What's a photographer to do?  Well, one thing would be to accept the reality that ad agencies aren't the Mecca of creative suppliers that they used to be.  You might be a lot further ahead if you went directly to the all the clients you're interested in working with and allow the work to trickle backwards.  There's no law that says you can't market to both sides at once.  

And, in the case of big businesses, you might encounter these things:  Less fear.  A well run business doesn't need to cut corners to impress anybody.  When you take fear out of the equation both sides can have a frank discussion about value being added and opportunities to excel.   You'll find.....bigger budgets.  Again, there are fewer people in the middle and, if you are lucky enough to work "direct" you eliminate the decay of communication.  You'll also be a better value proposition for the client.  

You'll also find that direct corporate clients pay their bills quicker than most ad shops.  You just have to understand their accounting systems and leverage it.  Did you know that America's number three computer company is happy to pay their photographers, upon delivery, via PayPal? Squabble all you want about an extra couple of percentage points you'll give up but I'd much rather take the hit and have money in the bank now.  Before inflation kicks in.  Hey, opportunity = cash flow.

So, why was I thinking about all this stuff in the first place?

Well.  My friend, Paul Johnson, came into town from New Orleans.  Paul is always on top of the latest technology and the coolest trends. He's done incredible cookbooks and travel guides and he's been everywhere.  We actually bumped in to each other in Rome a few years back.  Totally unexpected.

Anyways, he comes into town and we meet at Sweetish Hill Bakery to catch up.  He plops an iPad on the table and basically, over the next hour, tells me that everything has changed.  From writing books (which we both do with alarming frequency) to advertising to marketing to technology.  I get it in a big way.  He gets all the smaller ways as well.

We talk about advertising.  He points to multiple niches and click thru accountability---something traditional media only dreamed of.  He talked about interactivity and accessiblity.  And then he talked about something we both have been concerned about, vetting editorial content.  I can pretty much write anything I want here on the blog, and you have the choice of believing me or not.  But if I write for a publisher they have people who fact check and spell check (manually---with human eyes and brains) and they add value with editing and design and typesetting.  Then they add additional value with a distribution chain.  

We talked about an intersection of the two hemispheres.  Paul sees the web rapidly monetizing itself thru what I would call "on demand" programming.  The NYT is about to move to a paid model.  The Wall Street Journal has always been a paid model.  To bring it to a "local" level, both Lloyd Chambers and Sean Reid only make their content available as paid material.  You have to pay to read.  And people do.  Paul postulates that the web will change.  There will be two tiers.  There will be vetted material that is vastly different than the rantings of some guy in his basement in North Dakota and people will be willing to pay for the vetting.  Just like they pay for apps or movie content.  

I think more and more stuff will be programming.  Like short instructional videos and actual entertainment programming.  Time to learn those video chops.

Paul has a way of shaking me up and making me think.  I processed his version of the new web and the new media and I believe two things, really.  One is that the pads will be the medium going forward.  As prices fall for the iPad and it's type they will take over web surfing and communications duties from the laptops and desktops.  Secondly, I believe that the future of what we do lies in becoming the online publisher, not the online writer.  We need to coalesce the same kinds of professionals: editors, designers and production people, to replicate the process of vetted publications if we are to brand and own our part of the content space.  The wild west days of the web will give way to the new, smoother, better, more cogent content on the web.  People are moving from narrative to experiential.  From a recitation of history to a sideline seat at the present.

People don't have time to be their own aggregators and will need trusted vendors to do that.  The only way to do it is to monetize the content, not the adjacent advertising space.  

What does this mean for me?  Time to get off my butt and get a new iPad.  Time to explore publishing options.  Time to partner up with designer and a writer and some photographers and make content that people are willing to pay for.  Own the "tools" of production instead of laboring on the factory floor of the content industry.    Or...take another nap and see if this all blows over.  Any answer is right.

But in the end everything will change again and again until it all settles.  Grab onto one of the straps and hold on, the ride's not over yet......