Media Competition: Good for Wedding Vendors? Maybe, maybe not.
If you took Econ 101 in college, you understand the notion that competition usually benefits consumers through more choice and lower prices. So, it stands to reason that an influx of new shows, magazines, web sites and other media into a local market would be a great boon to the wedding vendors who purchase advertising. Right? Many wedding vendors seem to think so. Unfortunately, the answer's not that simple.
Media differs in a very significant way from the typical "guns and butter" type commodities used to illustrate competition benefitting consumers. Unlike typical goods and services vendors, media providers must simultaneously serve two sets of customers.
Advertisers tend to forget that they are not a media company's only customers -- nor even its primary customers. But, a show, magazine or web site's first task is to attract, serve and engage brides. Only by successfully serving these customers does it have a product -- i.e., an audience -- to sell to advertisers.
When the number of wedding media products increases, competition soars for the scarcest, most valuable resource in the market: the bride's time. Regardless of how many shows, magazines and sites are available to her, a bride only has so many hours of free time to use them.
For example, here in Sacramento, the number of bridal shows has increased from about five major shows per year to nearly three times that many. The number of brides who can attend these shows, however, has probably not changed at all -- let alone increased by three times! And, it's certainly not the case that a bride who might have attended one or two shows is going to invest the time to attend 12 or more instead. Nobody has that kind of extra time -- and most certainly not a busy bride.
Even though the highest quality shows will invest more to try to maintain their attendance, there is only so much that they can control. Ultimately, the math is simple: a huge increase in the number of shows means that average attendance of all shows will be lower.
A similar analysis applies to publications and web sites. With more information sources vying for a bride's fixed free time for reading them, that means that each one, on average, gets less attention. Even the highest quality publications are impacted, because the 15 minutes a bride spends looking at an inferior magazine before discarding it is 15 fewer minutes she has available for reading other wedding publications.
The bottom line? Unfortunately, torrid media competition means that wedding vendors will need to spend more on advertising to maintain their presence amid the increased clutter and confusion -- not less.
Ad agencies refer to the impact of increased media chasing the same audience as "diminishing share of voice." Each new wedding media product becomes another voice that's claiming a portion of the total attention a bride can give to wedding planning -- which is fixed. When the number of voices speaking to each bride increases, you will need to speak more loudly and more frequently -- i.e., advertise in more places -- just to maintain the amount of influence you currently have. If you're not present at the moment she's consuming that media -- and your competition is -- then you've lost share of voice to your competitor. In other words, keep your advertising the same when there are more information sources influencing the bride, and you've just lost ground.
Can anything stem the tide? Of course, one positive outcome of competition is that existing publications and shows will do their best to differentiate themselves from the competition. Differentiation is the best way media properties can hold onto their audiences in the face of more competition for the bride's wedding planning research time. Look for media companies that find ways to stand out versus other media -- and have proven they can execute.
What else should wedding vendors do? Aside from understanding that even the best media providers will be severely challenged to maintain their same results when faced with a doubling or tripling of competition, I recommend that wedding advertisers do the following:
(1) Decide with your head, not with your heart.
Small business owners share many things, not the least of which are hopes and dreams for their businesses that often materialize much more slowly than planned (if at all). Marketing expenses that grow unexpectedly don't usually fit with most wedding vendors' expectations for how their businesses will progress. Yet, it's crucial for any business to evolve with what is actually happening in the market -- not with what you hoped or assumed would happen. (This concept is artfully explained in the book Who Moved My Cheese? -- a great read for any small business owner.)
When you're tempted to believe that new publications and shows produced on the cheap will deliver the same results at lower cost, ask yourself if their logic holds up when you think it through. Most important, remember that if the results you're counting on from this year's ad budget don't materialize, your business will suffer for years to come.
Don't let newbies with big promises persuade you to indulge in "magical thinking." At the same time, recognize that you will need to budget for additional marketing expenditures as media proliferate in your area. The key will be to invest in as many quality, value-driven options as possible.
Which brings me to point two ...
(2) Evaluate new wedding media claims with very careful scrutiny.
In Sacramento, we have new publications promising to distribute 50-100% more copies than existing magazines -- with absolutely no factual information to back them up! (These claims seem all the more absurd when you consider that their entrance to the market will make it harder for all to maintain current distribution numbers-- let alone double them.) Instead of accepting these numbers, question them.
Similarly, question show providers that promise they'll deliver as many brides as existing shows while charging less for booth space. How will they be able to match the advertising that current shows are doing if they're charging you much less -- let alone do the additional advertising that increased market competition will necessitate?
Companies making these kinds of claims are either lying outright, or they're simply badly managed. Either way, you lose when you invest your money with them. It doesn't matter, by the way, whether they're experienced in providing media in another context -- the wedding market differs in many ways. If a media company in another market arrogantly assumes they will be able to do everything siginficantly better or more cheaply than the existing players, they've probably got some big lessons coming -- lessons that you shouldn't have to finance.
Which brings me to point three ...
(3) Support the media companies whose products already deliver value to you.
In any media market, rapid influxes of new competitors to the market often lead to mass exits that are just as hasty a few years later -- with plenty of wreckage in their wake. The primary victims are usually advertisers who counted on these reckless, price-bombing new entrants. When the companies' inability to make a profit charging below-market advertising/exhibit fees finally catches up with them, they often leave advertisers in the lurch -- sometimes not even producing the media that was promised.
Just as important, though, is the impact on existing, healthier players. When forced by "kamikaze" competitors to invest more and drop their own prices, established players find their own profits eroding. (Consider the impact of price bombing on the airline industry over the last twenty years or so -- bankruptcies galore! While consumers have sometimes benefitted from lower prices, service has suffered dramatically, safety has become a concern, and many once-healthy companies have been forced to merge or go under.)
When profits deteriorate for established media providers -- companies the market depends upon for reliable, effective promotion -- the better managed companies may choose to exit the market. It simply won't make sense for them to continue to invest in a market in which profits have been squeezed by irrational, short-sighted price competition and questionable competitive tactics. They'll move on ... taking a valuable resource that you need to promote your business with them. Consider the long term when deciding where to put your marketing dollars -- and place your bets on the partners most likely to be around to help your business grow over the next five, ten or 15 years.
Media differs in a very significant way from the typical "guns and butter" type commodities used to illustrate competition benefitting consumers. Unlike typical goods and services vendors, media providers must simultaneously serve two sets of customers.
Advertisers tend to forget that they are not a media company's only customers -- nor even its primary customers. But, a show, magazine or web site's first task is to attract, serve and engage brides. Only by successfully serving these customers does it have a product -- i.e., an audience -- to sell to advertisers.
When the number of wedding media products increases, competition soars for the scarcest, most valuable resource in the market: the bride's time. Regardless of how many shows, magazines and sites are available to her, a bride only has so many hours of free time to use them.
For example, here in Sacramento, the number of bridal shows has increased from about five major shows per year to nearly three times that many. The number of brides who can attend these shows, however, has probably not changed at all -- let alone increased by three times! And, it's certainly not the case that a bride who might have attended one or two shows is going to invest the time to attend 12 or more instead. Nobody has that kind of extra time -- and most certainly not a busy bride.
Even though the highest quality shows will invest more to try to maintain their attendance, there is only so much that they can control. Ultimately, the math is simple: a huge increase in the number of shows means that average attendance of all shows will be lower.
A similar analysis applies to publications and web sites. With more information sources vying for a bride's fixed free time for reading them, that means that each one, on average, gets less attention. Even the highest quality publications are impacted, because the 15 minutes a bride spends looking at an inferior magazine before discarding it is 15 fewer minutes she has available for reading other wedding publications.
The bottom line? Unfortunately, torrid media competition means that wedding vendors will need to spend more on advertising to maintain their presence amid the increased clutter and confusion -- not less.
Ad agencies refer to the impact of increased media chasing the same audience as "diminishing share of voice." Each new wedding media product becomes another voice that's claiming a portion of the total attention a bride can give to wedding planning -- which is fixed. When the number of voices speaking to each bride increases, you will need to speak more loudly and more frequently -- i.e., advertise in more places -- just to maintain the amount of influence you currently have. If you're not present at the moment she's consuming that media -- and your competition is -- then you've lost share of voice to your competitor. In other words, keep your advertising the same when there are more information sources influencing the bride, and you've just lost ground.
Can anything stem the tide? Of course, one positive outcome of competition is that existing publications and shows will do their best to differentiate themselves from the competition. Differentiation is the best way media properties can hold onto their audiences in the face of more competition for the bride's wedding planning research time. Look for media companies that find ways to stand out versus other media -- and have proven they can execute.
What else should wedding vendors do? Aside from understanding that even the best media providers will be severely challenged to maintain their same results when faced with a doubling or tripling of competition, I recommend that wedding advertisers do the following:
(1) Decide with your head, not with your heart.
Small business owners share many things, not the least of which are hopes and dreams for their businesses that often materialize much more slowly than planned (if at all). Marketing expenses that grow unexpectedly don't usually fit with most wedding vendors' expectations for how their businesses will progress. Yet, it's crucial for any business to evolve with what is actually happening in the market -- not with what you hoped or assumed would happen. (This concept is artfully explained in the book Who Moved My Cheese? -- a great read for any small business owner.)
When you're tempted to believe that new publications and shows produced on the cheap will deliver the same results at lower cost, ask yourself if their logic holds up when you think it through. Most important, remember that if the results you're counting on from this year's ad budget don't materialize, your business will suffer for years to come.
Don't let newbies with big promises persuade you to indulge in "magical thinking." At the same time, recognize that you will need to budget for additional marketing expenditures as media proliferate in your area. The key will be to invest in as many quality, value-driven options as possible.
Which brings me to point two ...
(2) Evaluate new wedding media claims with very careful scrutiny.
In Sacramento, we have new publications promising to distribute 50-100% more copies than existing magazines -- with absolutely no factual information to back them up! (These claims seem all the more absurd when you consider that their entrance to the market will make it harder for all to maintain current distribution numbers-- let alone double them.) Instead of accepting these numbers, question them.
Similarly, question show providers that promise they'll deliver as many brides as existing shows while charging less for booth space. How will they be able to match the advertising that current shows are doing if they're charging you much less -- let alone do the additional advertising that increased market competition will necessitate?
Companies making these kinds of claims are either lying outright, or they're simply badly managed. Either way, you lose when you invest your money with them. It doesn't matter, by the way, whether they're experienced in providing media in another context -- the wedding market differs in many ways. If a media company in another market arrogantly assumes they will be able to do everything siginficantly better or more cheaply than the existing players, they've probably got some big lessons coming -- lessons that you shouldn't have to finance.
Which brings me to point three ...
(3) Support the media companies whose products already deliver value to you.
In any media market, rapid influxes of new competitors to the market often lead to mass exits that are just as hasty a few years later -- with plenty of wreckage in their wake. The primary victims are usually advertisers who counted on these reckless, price-bombing new entrants. When the companies' inability to make a profit charging below-market advertising/exhibit fees finally catches up with them, they often leave advertisers in the lurch -- sometimes not even producing the media that was promised.
Just as important, though, is the impact on existing, healthier players. When forced by "kamikaze" competitors to invest more and drop their own prices, established players find their own profits eroding. (Consider the impact of price bombing on the airline industry over the last twenty years or so -- bankruptcies galore! While consumers have sometimes benefitted from lower prices, service has suffered dramatically, safety has become a concern, and many once-healthy companies have been forced to merge or go under.)
When profits deteriorate for established media providers -- companies the market depends upon for reliable, effective promotion -- the better managed companies may choose to exit the market. It simply won't make sense for them to continue to invest in a market in which profits have been squeezed by irrational, short-sighted price competition and questionable competitive tactics. They'll move on ... taking a valuable resource that you need to promote your business with them. Consider the long term when deciding where to put your marketing dollars -- and place your bets on the partners most likely to be around to help your business grow over the next five, ten or 15 years.
posted by Laurie at 11:43 AM
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