Friday I had lunch with a friend who does marketing for a pharmaceutical company. He described to me the process by which he manages major ads.
“Ads are very expensive,” says he. “First you have to develop the concept, which can be $10,000 or more. Then the production costs for the real ad are $100,000 or more. Finally, the actual costs to air the commercials easily can run $500,000.”
How does he manage these costs and risks?
“We have different stages of testing. First, we take the concepts, usually just sketches of frames in the commercial (although with cheaper technology migrating to computer-generated imagery), and show them to real targeted customers to get their reactions. This is called the ‘pre-test’. We even show them several such concepts at once. When something passes the pre-test, we go to production. The produced ad then is tested again on real potential customers. This is the ‘test’. Once it passes, we commit to the air time and air the commercial.”
So a new project that has high costs and risks is managed by doing it in smaller, bite-sized stages, and testing each stage for its validity and value before committing to the next higher level of spend and risk.
While we in the technology world have been enjoying the benefits of agile development (at least, those of us who have successfully adopted it) for the last several years, it turns out advertising executives, those on the company side who are responsible for big and risky ad spends, have been managing their risks in exactly that way for a very long time.
It turns out, advertising is agile. Who knew?
Is your process this agile? Do you manage your project risks by adjusting regularly throughout the process? Ask us to get your risks under control and your project returns through the roof.