A chat with William Wolfram about Article 4 of our Manifesto: Consumer Products Brands Compete as Media Buying Companies.
Kat: So, the 4th article is “Consumer Product Brands Compete as Media Buying Companies”. To me, consumer product brands, well before you know, I understood this as like a “Tiffany’s brand” or a “Razor brand” or a “Handbag brand”, so what do you mean?
William: Well, it’s quite a you have to ask just with human beings, are people what they say they are or are they what they do? Do you judge a person by what they say their values are or do you judge them by their behaviour? The same thing applies for companies. Do you judge a company by what they say they are, or do you judge them by where they allocate resources?
So, if you study the income statements and the balance sheets of the major consumer product companies, it’s very evident these companies spend a considerable amount of resources in many cases they spend more money here than anywhere else in sales and marketing. So, if you are spending more money buying advertising and selling your product than you are actually the product itself, then you’re not really a razorblade company, you’re not a toothpaste company, you’re not a software company. You are a company that competes in the efficiency of media buying.
Who has the best message and who can buy the best media spots, whether its billboards or television advertising or online advertising, you’re competing on a very different segment than you know what you think you are. There’s a lot of stories about how McDonald’s is actually a real estate company and not a burger company because they own so much real estate.
There’s plenty of examples of where consumer electronic retailers are not really concerned with their electronic retailers as much as their extended warranty business is. Essentially, what we believe at Galton Voysey is that most consumer product brands are competing primarily on the efficiency of media buying.
Kat: How has that changed? Not media buying but media consumption
William: Well media buying ties in with media consumption, right? You know as consumers go from reading the newspaper and print to strolling their Facebook news feed and seeing articles.
As consumers go from watching broadcast television to watching Netflix as they go from listening to FM radio to listening to podcasts. In general, the consumption of media goes from analogue to digital, offline to online, the way that media buying works completely changes. So, these companies are media buying companies and the way the media is bought completely changes.
In fact, it changes so much it’s hard to even call it the same thing right. So, when that happens it opens up an enormous gap, an enormous opportunity for companies like us who specialize in digital media line to come in and say how do we buy media more effectively for the founders in the brands that we work with as opposed to the traditional brands out there.