September 8, 2008
The Problem with Advertising
Posted by Kevin | Print This Article
Associations have always sought supplemental revenue, sometimes in significant amounts, from advertising and sponsorship. And there’s nothing wrong with that. By providing access to their markets, be it through magazine advertising or online advertising or event sponsorship, associations are able to add to their ability to provide services to their industry in a cost-effective way.
But what if advertising ceases to be a supplemental revenue stream and becomes the primary revenue stream?
Some folks have suggested that, as the online world evolves and associations begin to reevaluate their business models, advertising may be an attractive model. Create a community and sell advertising around it. It’s Facebook’s model; it’s Google’s model; why can’t it be an association’s model?
Setting aside the obvious fact that many associations simply don’t generate that kind of traffic, the biggest problem I see with this suggestion is that it is naive about its true implications.
When an association turns to advertising as its primary business model, the advertisers become its customer — not the market it exists to serve. Don’t believe me? Spend some quality time with the publishers of trade publications in your industry. You’ll hear them freely use the word “customer.” They are not referencing the same people as you when you use the term.
It’s not a bad thing; it’s the way human nature and business works. Your customers are the people who pay you. And as a result, they’re the ones you listen to, and they’re the ones you try and keep happy. If advertisers are your customers, then your “members” become merely a means to an end, no matter what your governance structure says or what your best intentions are.
I would argue that our members should not be a means to an end. They are the end. Our job is to promote them, make their lives better, make their industry/profession more successful.
I would also argue that associations are in very exciting times right now. There are tremendous opportunities surrounding us. We have access to a number of new tools and resources that make it easier for us to help our markets grow.
But as we try new things, and experiment with new business models, we must never lose sight of who our customers really are. In the end, I believe that the money the association generates should come primarily from those we seek to serve, not from those who seek their business.
Kevin,
In my time working at associations and now selling assets (advertising, sponsorship and exhibits) for associations as a consultant I have witnessed first hand exactly what you are talking about. Many associations believe that their audience could deliver the type of people that companies would pay to reach. Many times this is actually true. I do not think that associations will succeed long term if they develop products, services and pubications simply to sell advertising and not necessarily to serve their members. Since I originally come from a membership background I think that sales revenue is incremental to membership revenue and should be used to improve or supplement what associations provide their members.