Is the Advertising Industry on a Suicide Mission?

by francine Hardaway on April 7, 2016

Somehow I missed that moment at the Association of National Advertisers forum when former MediaCom CEO Jon Mandel startled the ad industry by calling out his industry colleagues as self-serving rogues:

“Media agencies aren’t living up to their fiduciary duties to clients and ‘cross the line of acceptable conduct in a partnership,’ Mr. Mandel said. ’They are not transparent about their actions. They recommend or implement media that is off strategy or off target if it works for their financial gain.’

Rebates,’kickbacks,’ and other incentives for agencies that are at least potentially adverse to client interests are happening virtually everywhere in the U.S. media landscape, including TV, he said. Mr. Mandel said the practice has migrated from cash incentives to free Inventory, which agencies may then deal back to clients in scatter buys or sell via ‘dark pools’ that are either traded programmatically or liquidated in barter transactions.”

No wonder the first panel at this year’s AdAge Digital Conference which I attended this week,  was titled  “Elephants in the Room.” It took a frank, sometimes scathing look at  big problems in the advertising industry, the biggest of which turns out not to be ad blocking, but conflict of interest on the part of agency trading desks.

“Have you ever wondered why fees to agencies have gone down and yet the declared profits to these agencies are up?” Mr. Mandel said. He said that advertising spending broadly has long stayed within a narrow band of 1% to 1.25% of gross domestic product globally. “So if agencies are growing at a higher-than-GDP basis, the money is coming from somewhere.”

The opacity of the media buying process has destroyed the trust relationship between agencies and their clients. Although global brands have learned to ask the right questions of their agencies, smaller advertisers may have to be protected from predatory treatment by their own agencies.

Moreover, agency trading desks drive media prices down, destroying the income of publishers without passing the saving on to their own clients. Once they have banked the inventory on their books, they can no longer be objective in what they tell their clients to buy; they’re guilty of conflict of interest. In this new market, in which agencies are both buyers and sellers, they seem to have lost sight of the fact that advertisers need healthy publishers, and driving ad rates to the floor helps neither side.

Not to mention the consumer, who, pummeled by cheap ads that are neither useful nor relevant, responds by downloading an ad blocker.

Compared to the enormity of the kickbacks and arbitrage scandals in the advertising industry,  other issues on the table, like visibility and ad fraud, seem inconsequential. But together they are ruining an industry that for centuries has supported our access to free content.



How to Start a Business at Any Age

by francine Hardaway on February 25, 2016

This post is the continuation of last week’s post, in which I decided if I was going to continue to coach entrepreneurs I would have to quit riding on the stories of my past businesses, the latest of which was started 18 years ago, the coaching business Stealthmode Partners, and start a business that embodies both classic and modern tools.

I decided to sell a physical product, which I had never done, and to learn the ins and outs of inventory, online sales, social sales, and Facebook marketing. Anyone with experience could have done this better than I, but I wanted to simulate the issues of the people I am coaching. I also decided to be very transparent, and to share my journey here and on Facebook.

Lesson One: you need some activation energy. Lesson Two: You need to give up your fear of failure. Lesson Three: You need to have a big dream. Mine is to spend the next five years making myself financially secure, after spending the last fifty years trying to do that for others. I also want to help others, which is the reason I’m sharing, and to help SySTEM Schools, the STEM School for high needs kids on whose board I proudly serve.

So here’s where it all started.

2/22 What do you know about social selling? Learn from me.…/inspiration-from-friends-starting-anot…

2/23 24 hours of selling on with only one sale means we have to tweak the product, right? Well, we can’t tweak the image right now within the platform guidelines, but we can offer different products, so here is the women’s v neck tee. I’ve taken advice from an anonymous source to add a women’s product, and from Ted Cook to change my messaging. The good thing about ViralStyle? No inventory. This is big.

So far no advertising, just social media. Ad campaign will startup soon:-)

2/23 Learning as I go, Probably should watch the videos on the ViralStyle site, right?I’ve had 722 visitors in 48 hours, and 50 clicks from my Facebook ads, and I’ve sold two shirts. They’re not exactly flying off the shelves. But I’m going to change the design soon. If you want one of the “classic” Version 1.0 designs, buy now:-)…

I am awash in learning. I’m so fortunate to be able to do this, and to pass it on. Last night one of the members of the Mesa Entrepreneurship Roundtable created a Rugby t-shirt during the program, and told me I had solved a big problem for him! This meets one of my goals.

Also through posting on Facebook I’ve been introduced to the founder of ViralStyle. I know that somehow this is going to work out well for me…it has already.

2/24 Day 2.5 of my new business, inspiration from Friends.
We now have 3 sales.
I’ve received much feedback, and I am floating on a sea of gratitude for all of it. I’ve deployed much of it.
I added a new shirt style for women, and some new colors for both men and women.
I’ve found out I can’t shift to a new design without starting another campaign, so I’ll wait until this one ends on the 29th.
I decided to give 10% of my profits to SySTEM Schools, the charter school for high needs kids that I’m on the board of.
I have pretty much broken even on my Facebook advertising, if you don’t consider the 10% I’m giving away.

If you’re an early adopter, you will definitely want V1.3, today’s version, of these shirts:-)

2/25 This morning while I walked my dogs, a friend of mine asked for a long sleeve t-shirt. So I added one. With three sales and over 1000 visits, I’m at a conversion rate others would be satisfied with (according to what experienced sellers tell me). However, that’s not my metric. Being old school, my metric is profits. So far I have spent $20 boosting a post, and $35 on Facebook ads. So I am running in the red. My profit as of now is $34.17, but if I don’t sell 50 shirts by Monday, the cost of the shirts begins to eat into my profit.

Dear Reader, this is how ordinary people start a business. It’s microentrepreneurship. Very little barrier to entry, and thus very competitive. But if I can just find that elusive product/market fit…(that’s what they all say.)

It is also how, if they don’t watch carefully, they can go out of business. I am testing a Minimum Viable Product: one message, one design. I’m now up to four different shirts. I have great analytics. and when this campaign ends on Feb. 29, I will put up a new design, same message. The week after, I will put up a different message. And the week after that, still a different message.

If I don’t break even by then, I will come to a conclusion about the t-shirt business and shut it down.

Fall Down 7 Times Get Up Eight


Inspiration From a Friend

February 22, 2016

Screenshot of the actual ViralStyle page I’m starting out on an adventure, and I want you to come with me. If this works, it might help you. If not, we will have learned something, and you will have spent no money. I’ll have risked some, but not much. I might even make some money. I […]

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Looking for Purpose? Become a Foster Parent

February 1, 2016

More than twenty years ago my husband, the late Gerold Allen Kaplan, and I became foster parents. We had never planned to do that. He was a radiologist and I was an entrepreneur. Our own children were grown. We were hella busy. But I had been mentoring a girl in 8th grade at an inner […]

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When You Go to Work at a Startup, Read its Financials

December 29, 2015

It’s not only unicorns that could be in trouble next year. Any startup whose runway is shorter than its path to profitability will likely die. The never-acknowledged truth that working at a startup, even a well-funded one, in Silicon Valley is risky will be outed. I’m always amazed at how little the entrepreneurs we’ve been […]

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WordPress’s New Calypso App for Mac

November 29, 2015

Being me, I downloaded WordPress’s new Calypso app (available for now only in Mac desktop version) after I heard Matt Mullenweg talk about it on The Gillmor Gang. My original idea was to start a new blog, because I redirected the old Stealthmode blog, which has been on for a decade, to Medium recently, […]

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Ask Your Mother: for Lena Dunham

September 30, 2015

I graduated from Cornell in 1962, before Roe v. Wade. I got a posh but poorly paying job at the Macmillan Company on downtown Fifth Avenue. It was my first full time job, and I was a novice at everything from work ethic to women’s place in society. In theory, I was a copywriter, writing […]

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Too Many Cooks in the Adtech Kitchen

September 25, 2015

 I’ve been a marketer for longer than I care to divulge. I’ve been active on behalf of one of my clients, ZEDO, in the IAB and the Online Trust Association for years. What I see is that although the media industry has many organizations that come together to discuss challenges, and many working groups (the […]

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Chris Stiffler’s Vision Lives

September 14, 2015

My friends Vera Kozyr and Igor Mikhnenko of NotAnotherOne stopped in Half Moon Bay to see me on their way to Shenzhen, where they’re going to select a manufacturer for their latest product, the Atmotube. Their last wearable product, GERO, which I helped them launch at CES, was the technology behind a device to monitor […]

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Former GoDaddyites Next Adventure: Sourcely

September 7, 2015

The proliferation of smart phones and the one-to-two-year upgrade cycle means there will be an awful lot of discarded phones, and many broken ones. Small businesses have sprung up everywhere to repair cracked screens, water damage, and other defects. The supply chain for the growing “recommerce” industry has, until recently, been business to consumer, as […]

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