Jeff Bezos has a lot to teach us.
It has now been three years since online retail visionary, Jeff Bezos, bought the Washington Post.
On NPR this morning I heard about how the tech entrepreneur has changed the newspaper. There are lots of things Bezos has done, but the major change will come as no surprise. Bezos completely redesigned the way the company operates. Bezos transformed the Post from a newspaper company to a technology company.
To do this, he commissioned in-house software to run all aspects of the business, from the newsroom, to production, to ad sales. Being an ad guy myself, it was these changes that I found most interesting.
Thanks to Bezos’ understanding of the online environment, not only does software run the Post’s ad department more efficiently, but big data also makes their advertising more efficient.
Thanks to Bezos’ changes, the Post’s ad revenues are up to almost $100 million. This is significantly more than they earned before the changes. And in a day and age when all we hear about is how newspaper profits are falling, this is startling news.
Ironically, most people find that the online Post now includes fewer ads than the former print version. In the past, newspaper consumers complained about the number of ads that were blocking their enjoyment of the paper. But the Post has found a solution to this problem as well. What happens now is that the ads readers see are specifically targeted to specific audiences. These targets are based on those audience’s propensity to look at specific parts of the Post’s site and purchase the specific items advertised.
But advertisers are okay with the lower volume of ads being served. That’s because today’s savvy advertisers realize that circulation and frequency are not what’s most important. Instead, they care about being in front of the right people.
That’s worth saying again. Today’s savvy advertiser realizes that what’s important is being in front of the right people. In other words, positioning is now more important than frequency. Advertisers understand that they will get a greater sales return, and greater ROI, if they talk to the people who have the highest propensity to purchase their products. And technology now allows advertisers to specifically target their perfect audiences with greater and greater accuracy.
The old days of “Let’s run it up the flagpole and see who salutes” or “Why don’t we toss it against the wall and sees if it sticks” are over. Ironically, this idea is not new.
Maybe you remember the apocryphal tale from the 1950s:
It’s about a son who thought it was time for him to take over his father’s business. Unfortunately, his dad was not ready to relinquish control. And so the son asked to run marketing and advertising for the company. The father did not agree with this either. But instead of giving up, the son got strategic. He asked his dad to simply give him a small budget to see if he could make their advertising work. The father agreed.
The first thing the son did was buy ads for the company in the newspaper his father read in the morning. Then he bought posters surrounding the subway station he knew his father walked through on his way to the office. Next, he bought the placards inside the subway that his father rode to work. And, as you’ve already figured out, he also purchased the posters outside the subway station near his dad’s office. Finally he bought ads on the one radio station he knew his father listened to at work.
You know what happened.
After a few days of this onslaught, the father told his son how great his ad plan was because he saw it everywhere. Based on his son’s ad successful ad schedule, he named his son the company’s marketing director, and eventually made him CEO of the company.
The moral of the story? Positioning that reaches the right person at the right time is what matters. Understanding your audience, understanding who they are, what they want, and where they spend their time, is the key to spreading your message. The business owner’s son proved it 70 years ago. Jeff Bezos proved it today.