TV.  Still going strong.

 
At least for now.

A recent Advertising Age article, "How the Ad World's Dealing With the Decline of the :30" featured observations on the future of TV advertising from marketing heavy hitters. Ad Age must have written the title before actually conducting the interviews, because most of the folks quoted didn't seem to think that :30s were declining. Changing, certainly. But not on the slippery slope just  yet.

David Lubars, Chairman of BBDO North America, summed it up best: "It's not about whether TV is coming or going, it's about where are the best places to put ideas to reach consumers. The [30-second spot] is still a viable form, it's just not the only viable form."

So what's changing? And what's not?

·      TV viewing time isn't going down. Nielsen reports daily household TV viewing time was 8 hours 14 minutes during the 2006 – 2007 television season. Exactly the same as the previous season. And 32 minutes more than five years earlier.

·      Digital video recorders aren't having as much impact as anticipated. Only 20.5% of TV households have DVRs, and delayed viewing amounts to just 1% to 8% of a show's total audience depending on audience demographics. (Older audiences are less likely, and younger audiences more likely, to record shows to view later.)

·      Everyone skips the commercials when they TiVo shows. Media Daily News reports that virtually everyone who watches recorded shows skips the commercials. In many cases 99% of the audience fast forwards through the commercial pods.

·      Digital playback isn't making skipped commercials ineffective. People who fast forward through commercial pods while watching pre-recorded shows remember the commercials at about the same rate as "live" viewers. Turns out that fast forwarding through commercials requires concentration. The TiVo audience is actually paying close attention to the spots so they know when to switch back to playback speed.

·      Time-sensitive TV is selling at a premium. Everyone wants to see the Super Bowl in real time. Which means they have to see the commercials. That's why virtually all the available commercial time was sold out four months before the game. Any show that's TiVo-proof is going to sell well.

·      The broadcast networks no longer dominate prime-time viewership. Twenty years ago the nets reached more than 40% of U.S. households during prime time and cable programming reached less than 5%. Now it's 35% cable and 28% network.

·      The internet hasn't replaced TV. Time reports that only 71% of U.S. households have an internet connection, and the daily average time spend online at home is 1 hour 7 minutes per person in online households. That's a tiny fraction of the time spent watching TV.

·      Search didn't supplant TV as the first source of information about products and services. In fact, two-thirds of searches begin with a stimulus from traditional media. Although the exact breakdowns are not available, TV is anecdotally reported to be the primary initiating source for search.

·      TV still works. A recent study by Apollo Research showed that TV reduces price sensitivity. Just one or two exposures produce some effect, four or more exposures reduce price sensitivity farther. And the effect continued up to eight exposures, after which behavior changes (i.e. changes in purchase patterns) taper off.

·      Broadcast TV news is going down the tubes. Although the internet hasn't replaced broadcast TV as an entertainment medium, it is displacing the nets and their local affiliates as a news source. The Washington Post reports a 25% drop in late news viewership for late night news and a 37% drop in 6 P.M. news from May 2006 to May 2007. An older Pew study (2004) showed that network news reached just 38% of households, down from 60% ten years earlier. Local TV news reached 59%, down from 77%. The only bright spot was cable news at 38%, since cable news wasn't a blip on the radar in 1994.

·      The astronomical escalation in TV production costs is slowing down. Perhaps even reversing. The average national spot cost $495,000 last year. And the blockbusters are well into the seven-figure range. For some time now producers have left L.A. for Vancouver to reduce shoot costs. Now they're going to New Zealand and Argentina, according to Anonymous Content's Steve Golin. The trend makes us feel like pioneers. Years ago a BrainPosse principal shot spots at Mexico's Churubusco studio complex for about half the going rate in L.A.

It's not just the venue for producing national spots that's changing. The 35mm spot is fast becoming an anachronism, as Hi-Def takes over more and more production – especially with the new higher-quality lenses available for the medium. Edit systems are less expensive and more agile. Sound production has become simpler and less costly. Talented people aren't cheap, but their tools increasingly are.  

·      Unscripted TV is still strong, but may have peaked. Unscripted shows changed the TV landscape, but they are evolving away from a house (or island) full of conflicting personalities to more production-oriented formats, such as that of "Dancing With The Stars." And scripted drama formats are strong. Only one semi-scripted show made it into the top five two weeks ago: "Dancing." "Grey's Anatomy," "House," "CSI" and "NCSI" were the other most-viewed prime-time shows.

·      Participation TV is hot. The first episode of "American Idol" got 50,000 text messages as viewers voted for their favorite contestants. Nielsen media reports that text-message votes to shows like "Project Runway" and "Dancing With The Stars" – plus game show audience-participation text messages on shows like "Deal or No Deal" – generated $56 million in revenue for cell phone companies in the first half of 2007. The volume is projected to grow to $170 million in 2008.

·      The Screen Writers Guild strike may change everything. Last time the writers backed away from their keyboards, broadcast nets lost share to cable, and those viewers never came back. (As a side note, the writers lost out big time on that one. Both BrainPosse principals have moonlighted scripts for Discovery Channel shows, and can regretfully attest that they don't pay nearly as much as the $31,000 Guild members get for a 24-minute script for a broadcast half-hour.) This time there's a chance that audiences – particularly younger audiences – may migrate to web-based programming and never come back.

·      User-generated content is here.  Actually UGC was on TV long before Revver, You Tube and Jumpcut got big on the web. "America's Funniest Videos" has been around since 1989, and talent contests were a staple of the early days of TV, starting with "Ted Mack's Original Amateur Hour" on the Dumont network in 1948. (Of course "Amateur Hour" and "Arthur Godfrey's Talent Scouts" weren't purely user generated. The producers supplied the studio, technology and format. The "users" simply provided the acts.) Now UGC is part of the news. The CNN Headline News show "News to Me" features user-generated clips. And UGC commercials have even aired on the Super Bowl. In fact, a user-generated Doritos spot took "most liked" honors.

·      Multi-platform is now standard equipment. Every show has its site. Broadcast news puts more details on line. (Local broadcast news sites are five of the top ten local news sites, pretty much beating newspapers' attempts to migrate to the web.) Just about every prime time drama has episodes, back stories and games on line. And now "Quarterlife" has reversed the migration, going from web-based to broadcast.

·      Minute-by-minute ratings will change commercials. As we reported in a previous posting, The Nielsen Nova: Why TV commercials are about to get a lot better, minute-by-minute ratings will let advertisers see which spots lose audience. And that will help tweak the losing spots to improve results. 

·      TV isn't a mass-reach vehicle any more. The top-rated weekly show only reaches 10% of the American population. The days when a roadblock buy on three networks would reach just about everyone in the country are long gone. TV is now a selective audience delivery vehicle. But that's a good thing, as mass marketing disappears and is replaced by narrower and narrower targeting.

A lot is evolving in TV today. And the change is coming quicker than ever. Advertisers and agencies have to be nimble and opportunistic to stay ahead of – or even abreast of – the curve.

Got some changes you think should be added to our list? Click here and we'll include them as comments on this posting.

Want to find out more about trends that are changing marketing communications? Click here or call BrainPosse at (865) 330-0033.

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