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A five-part series on traditional media in a new marketing
environment.
A tidal wave of change is about to inundate the media world.
Virtually all old media are being redefined, reevaluated and, in
some cases, relegated to irrelevancy. The net and the numbers are
changing everything about the way marketers use media.
Part 1: TV's picture isn't as bright as it used to be.
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As televisions continue to get larger, does their impact keep
shrinking? |
Broadcast TV.
Upfront is the week in May when broadcast TV networks pitch their
next season's programming to advertisers, agencies and media
services. Almost 75% of prime time commercial avails used to be sold
in negotiations squeezed between elaborate dog-and-pony shows and
Epicurean feasts. This year the hoopla and sybaritic goings-on were
a lot less extravagant than they used to be. Because selling TV time
isn't quite the party it once was.
Back in the 1960s, when upfront began, the then three broadcast
networks were the only effective way to reach the entire U.S.
market. Advertisers' choices were buy network TV or be invisible.
Not true anymore. There are plenty of other ways to reach segments
of the now-splintered mass audience. And some of those splinters can
no longer be reached by TV.
Last year's upfront was tepid. This year, Unilever joined Johnson &
Johnson and Coca-Cola as non-participants. And a lot of the
advertisers and agency/media behemoths who were there held back a
bit to see just what happened when the new Nielsen commercial ratings
came out (see The Neilsen
Nova in our archive).
There will still be an upfront next year, because political spots
will soak up every available broadcast television commercial minute
from Memorial Day until a few minutes before the polls close on Oahu
at 6:00 P.M. Hawaii time on November 4th. But 2008's
upfront may be the last one.
Why the change? Broadcast TV just isn't the be-all and end-all that
it used to be. Audiences of the Big Four broadcast networks are down
10%. Money is moving to alternate screens. And advertisers are
demanding more than eyeballs. Now they want interactive engagement.
MediaVest's Eric Bader says "I'm being offered a digital environment
that is an extension of the TV environment. Frankly, I have a lot of
clients looking for deeper relationships."
The big news at upfront was CW's "cwickie" five-second spots. Nice,
but not exactly an earth-shattering innovation. Broadcast still lags
behind cable networks in the much more important innovation area of
convergence of programming and interactive web content, but they're
trying to catch up.
But feeble program/web convergence is just part of the broadcast
networks' problem. Their wishful-thinking approach to data is
another.
Live Plus Seven? Live Plus Three? The broadcast networks' answer to
declining ratings is try to include time-shifted viewers in their
totals. Live plus seven means they want to charge for viewers
watching a show when it originally airs and those watching within
the following seven days. Live plus three, on-air viewers and those
watching within three days.
It is absolutely stunning that broadcast nets think advertisers,
agencies and media services are that stupid.
The new Nielsen numbers were pretty clear: time-shifting viewers are
skipping or fast-forwarding through commercials on their TiVos and
other DVRs. As Mediahub's Steve Calder said, "The irony of the DVR
situation is that often the most popular shows get DVR-ed, so you
pay a premium to get on the best shows, and you're mostly getting
skipped by the most desirable demographics."
Live Plus Right Now is the only meaningful number for two reasons.
1.
It's the only number which gives any assurance that the
commercials will actually run. (Not necessarily that they'll be
watched. Just that they'll run in the show instead of being skipped
or fast-forwarded.)
2. A
commercial may not be very useful three or seven days after it's
scheduled to run. If the spot is for a new movie, the only time it
counts is the Thursday night before the Friday opening, because the
first weekend is everything in movie marketing. Someone watching the
following Tuesday afternoon does the distributor no good at all.
Same with any time-sensitive product category. And last we checked,
most consumer categories have at least some variation in sales by
time of day or day of the week.
Of course "Who, if anyone, is watching?" is an even more important
question than when they are (or are not) watching. The new Nielsen
commercial ratings will finally show the effect of the length of
commercial pods and of an individual spot's position within a pod.
Because spots in the fifth or sixth (or tenth in some cases)
position in a pod may not be reaching many eyeballs. And so they
won't be worth much to advertisers.
The audience delivery advertisers will focus
on in the future won't be "How many people watched the show?" but
"How many people watched my spot?" (Again, background is available
in The Nielsen Nova).
Cable TV.
The average American cable or satellite
household watches 15.8 channels. Ever. But almost all of those
85,000,000+ cable or satellite households (and the 1,000,000 who
inexplicably subscribe to both) have to take – and pay for – more
than fifty channels to get the sixteen they want.
That's not likely to last. FCC Chairman Kevin Martin has asked
Congress to force cable systems to unbundle their content. Martin
and his minions are likely to get their way for three reasons:
1. The
Republicans don't like the fact that Jon Stewart sneaks "The Daily
Show" into people's homes through the cable. And they're peeved at
cable programming which offends their fundamentalist constituency.
2. The
Democrats don't like the fact that Bill O'Reilly weasels "The
O'Reilly Factor" into America's living rooms via cable. And they
don't much care for the possibility that major multinational media
conglomerates profit from cable. (Thought they probably don't mind
if their loyal Hollywood cadre makes a few bucks.)
3. Both
political parties realize that forcing cable operators to unbundle
content is a lot easier than securing world peace. And it's probably
about as popular with many American voters.
What will the almost inevitable unbundling mean for advertisers?
Some fringe channels will almost certainly disappear. The Spelling
Bee Channel and the Sinus Health Channel may not get enough
subscribers to pay for programming. The loss of fringe channels
won't matter much to advertisers other than those offering
highly-targeted products – spelling flash cards or sinus irrigators,
for example – and direct marketers who sell Ginsu knives or
Thighmasters on a percentage-of-sales basis on remaindered time.
The channels that are left – the ones that subscribers are willing
to pay for in an unbundled universe -- will be more valuable. Just
as paid newspaper or magazine circulation is reckoned to be many
times more valuable than "controlled" (that is, free) circulation,
just so viewers willing to pay for a specific channel are much more
likely to be actively engaged by its programming.
So the few channels people are willing to pay for (and actually
watch) will get more involved viewers. And unlike TiVo'd broadcast
shows, cable networks' video-on-demand programming can imbed
skip-proof commercials.
Change
is coming to television, and it's going to be significant media
realignment since the beginning of the television age in the early
1950s. Some networks will surf this tidal wave of change to new
heights. Others will be swamped.
Next
week:
Radio isn't generating a lot of buzz, but the signals are strong.
comment
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Reader comments:
You have to wonder, though...until computers and Internet access is
made more affordable and more accessible to all geo-socio-economic
levels of our society, TV is still going to be a dominant
communications/ information/ entertainment resource for most
Americans. Nobody seems to know when these affordability and
accessibility issues will be resolved.
--Knoxville, TN
You sure
got the part about "Selling TV time isn't the party it once was"
right. Upfront negotiations are now projected to stretch into
July as the networks and media buyers wrestle over which Nielsen
ratings really count.
--Santa Monica, CA
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