Amazon says it is advertising when it compensates New York-based websites for posting links that refer customers to Amazon.com. New York says it’s soliciting business. The distinction means all the difference in the world for sales taxes, for Amazon, and possibly even print media, television and radio.

Amazon.com sued New York State earlier this month, challenging a newly enacted law that has serious implications for online advertisements. In April, the New York legislature passed a law designed to increase sales tax revenue from Internet sales. The law is known as the “Amazon tax” because of the way it broadens the sales tax law to apply to Amazon’s Associates Program, thereby achieving the necessary legal nexus for New York to force Amazon (and other Internet retailers) to collect and remit taxes on all sales to N.Y. residents.

A little bit of history helps put this law into context. The Supreme Court has held that a state can only impose sales or use tax-collection obligations on an out-of-state retailer if the retailer has a “substantial nexus” with the state (the Quill decision). Nexus occurs from a sufficient physical presence, which can be an office or warehouse, but physical presence can also derive from soliciting a state’s consumers via sales representatives located in the state. However, it can’t be just any sales rep, according to another Supreme Court case—in-state representatives must be “significantly associated with the taxpayer’s ability to establish and maintain a market in the state,” according to Tyler Pipe v. Wash. Dept. of Rev.

Amazon doesn’t have an office, warehouse or other physical presence in New York, but it has thousands of New York-based members of its Advertising Associates program. Per the Quill decision, advertising alone is insufficient to establish a substantial nexus. So New York has changed the definition of what it means to be a sales representative to capture these in-state associates that Amazon says merely hosts its ads. Under the new law, New York has changed the presumption of what it means to be “soliciting business” in the state. (more…)

Bookmark It

Hide Sites

That is to say, after a 50 plus-year reign of supremacy, has broadcast media begun to slide down a slippery slope to be consigned to history with the telegraph and Morse code? More and more evidence seems to be mounting that broadcast is facing troubled times. First, the market was segmented when cable came of age. The “Big three” were suddenly faced with actual competition and they lost significant numbers of eyeballs. This didn’t do a lot for programming initially, the song “500 Channels and Nothing on” sort of summed up the early cable landscape (with the possible exception of MTV, in the early days). But eventually, the industry found its footing and went the way of the magazine industry with channels dedicated to niche markets—think the History Channel for old men, the Food Network for people who like to eat, the Travel Channel for people who want to see the world without leaving their house, and Animal Planet for people who can sit through six hours of Ron Reagan commentating the riveting action of a dog show.

And while radio has always been a bit of a wild-west environment, the world reacted to the homogenization of content with satellite radio and our friends (soon to be friend) XM and Sirius (maybe Xirius, quick run out and register that URL). Once again we have channels that are designed to appeal to a much narrower demographic based on the inescapable logic that there may not be enough of an audience to make a radio station devoted entirely to the delta blues genre in any one metropolitan area, but if you take all of the people from all of the metropolitan areas in the country and add in the smattering of people in between those places, suddenly you have a potential audience that rivals the legions of Britney Spears fans that used to exist. And Clear Channel had to go running to a judge to make sure its leveraged buyout isn’t plagued by nit picky questions from a lot of bean counting bankers.

So, we see the broadcast universe moving to a model of medium-casting, with content appealing on different channels to smaller groups of people. But where do we go from here? (more…)

Bookmark It

Hide Sites

We know what works in radio advertising. It comes from the thousands of tests we’ve conducted over many years that have filled in the vast universe of possible actions one can take in building a radio advertising campaign, with reliable guideposts pointing toward success and away from failure.

But there’s a subtle paradox involved in that “knowing” of what works—a paradox that we’re required to understand fully before we can actually provide people with the benefit of our knowing.

The moment you believe you fully know everything, you essentially know nothing.

Think about it this way—if you know everything, you stop questioning. You stop looking, asking questions, seeking answers. And when you stop looking, you stop growing and learning—you stop getting better. Worse, though, you become rote, acting out of habitual patterns and approaches. You get mindlessly repetitive. You become boring—and if you’ve been exposed to advertisements lately, you’ll see how common this is. How all ads start sounding the same and they all air in the same places.

So “knowing” successfully requires the combination of two mindsets. One mindset is that of the wise old sage. It’s a mindset that acts with a confidence that comes from the combination of deep experience and lots of hard data about what works and what doesn’t.

The other mindset is the “child’s mind” approach. The approach that encourages us to look at a situation, a campaign, with fresh eyes as though we’re seeing this campaign and radio advertising for the very first time. Think of the way children are curious, uninhibited, not afraid to fail or ask a direct question, unencumbered by knowledge and unconditioned by experience.

Do you agree to the mindset paradox? Can this be applied across all media channels?

Jeff Small is CEO and Brett Astor is vice president of Strategic Media Inc.

Bookmark It

Hide Sites

If there were a top-10 list of “do’s and don’ts” when working with a radio advertising agency, this one would be on the list:

Don’t rush your radio agency’s creative process.

Few advertising agencies will ever tell you this. Why? Because we want to please the customer. Sometimes, as hard as we try not to fall into the trap, we will try to please you even when it isn’t in your best interest to do so.

We were recently reminded of this phenomenon. A client was in a hurry to be on the air as soon as possible. (Not unusual.) He asked how soon we could have him some radio commercials for review. We took into consideration our current line-up of creative projects and the time we thought would be necessary to produce great work and we gave him a date. It wasn’t fast enough for him, and we then received the hard-charging business-guy press for “more, better, faster”.

We folded. Caved. “Okay, we’ll do that for you.” And we quickly realized it was a mistake. When it comes to writing radio commercials, the process cannot be rushed. It is not a matter of sitting down and writing a half a page of words. It can be that, but then the chances of success are severely diminished. Why? Because that’s just not the way insights occur. And if you write radio commercials without some set of insights about your customer’s underlying thoughts, emotions and perceived needs, you’ll get one thing with 100-percent certainty: a radio ad that sounds like a lot of other radio ads. And that’s usually a radio ad that won’t do as well as hoped. (more…)

Bookmark It

Hide Sites