so yesterday as I was meandering along the freeway in Melbourne I heard the most startling comment on the radio. a contributor to the city’s 3AW station was talking through the highlights of the evenings TV schedule – and suggested that because TV was ‘out of ratings season’ there wouldn’t be much to watch that evening … she gave a special shout-out to Nine who “bless them, were treating us to a new episode of Person of Interest”.
that broadcast TV networks take their foot off the pedal whilst out of season in order to hold new content back for the weeks when ratings is once again tracked is one thing – but for it to be such a consumer-facing matter of fact took me by more than a little surprise. this after all isn’t an industry conversation or debate, but a public radio station – openly discussing the fact that a TV network was “treating” the audience by actually offering them something new to watch.
this rather startling starting point underlines the extent of the firestorm now fully smoldering in the Australian TV market – the spark for which came courtesy of Netflix. on November 19th, after months of rumours and speculation, Netflix finally announced (with timing naughtily designed to crash Nine’s AGM) that it would launch in Australia in March 2015. the response from local Aussie players had been in development for some time. in short:
Foxtel, who arguably have most immediate disruption to face, have revisited their pricing strategy across the board and in particular halved the price tag of Presto (their SVOD or Streaming Video On Demand service) to $9.99. in addition they’ve partnered with Seven West Media who will contribute programming to the service from next year.
Nine and Fairfax’s joint forces have combined to create the $100m SVOD service StreamCo – with the consumer-facing platform brand Stan. Stan has subsequently announced deals with CBS, BBC Worldwide, MGM and SBS (who will bring their world movies to the party).
all of which leaves us with a three horse race between Netflix, Presto and Stan right?
wrong.
in fact it’s barely the beginning.
there’s Quickflix, Fetch TV, the individual channel catch-up services, Ten have yet to pick a dance partner, the ABC’s iView and of course YouTube – which in July accounted for over 1.5m content streams, reaching almost 11.5m people (source).
taken together there’s increasing volumes of views being delivered to the 50% of Aussies who watch online content. the numbers are already big … according to Nielsen in July there were 2.7bn streams (and that was down on June), and time spent streaming is increasing – up to around 8hrs per person per month generating 6.5bn minutes of streamed content.
and Netflix is still three months away.
the impacts of all this will be significant; in the immediate term there is undoubtedly going to be a firestorm for views and scale – brace for plenty of press releases in the first quarter of 2015 about content deals, views and reach. in the medium term this will play out in a battle for content – with many shows already locked away in local deals, there will be fierce competition between the platforms as distribution rights cycle into play.
the long-term implications will be two-fold. firstly, with increasingly fragmented and diverse platforms and viewing services, advertisers and their agencies will increasingly rely on programmatic solutions to build reach quickly. in addition many advertisers and ad agencies will finally be forced to break out of the ‘advert’ model – using instead platform-neutral content strategies that can adapt to content and context more quickly – generating more relevance for brands’ comms. think native content in video form.
the second long-term implication will be the long-overdue radical shift in viewer expectations. more choice, more freedom to choose what we watch and where, how and when we watch it. this future has been a long-time coming, and has been with some for much longer than others … as William Gibson so magnificently put it, the future is already here – its just not evenly distributed.
strap in people … because what’s coming is a radically more even distribution of the future – a future in which the idea of being “treated” to a new episode of Person Of Interest by a network, may by as incredulous as the very idea of tuning in to a broadcast network in the first place.
for both sides the equation is clear … for CBS, how much do I need to extract from TW (and other distribution points) to cover with margin the cost of content. for CBS, how much can I justify paying for content given the revenues I can generate via people paying for access to the channels on my network? what else is clear is that we can expect many more of these battles to come.
there are two constants … content and people. and its the changing and evolving relationships people have with content that’s causing disruption, instability, and war: War between the factions that create content and those that distribute it. the current siege of Time is only the current battle in the early years of a war that has a long way to go.
the origins go way back and the early battles have already been played out. battles like the UK’s independent production sector versus the country’s commercial channels, or the ongoing rumblings between music labels and Spotify. and at the start of last year Rupert Murdoch – via Twitter obvs – dramatically accused Google of being the ‘piracy leader’ of silicon valley.
the war will only get hotter from here on in. to understand why you need only follow the money. PWC’s annual Global Entertainment and Media Outlook 2013-2017 uses like-for-like, 5-year historical and forecast data across 13 industry segments in 50 countries to compare and contrast regional growth rates and consumer and advertising spend. this is the picture it paints for the coming years:
“Consumer demand for entertainment and media (E&M) experiences, fuelled largely by the adoption of broadband and connected devices, will continue to grow and we expect this growth to follow a similar trend to GDP development across the forecast period 2013-2017. However, given the shift towards digital media — typically lower priced than its physical counterpart — we anticipate spend to lag behind GDP growth.
The global E&M market will grow at a CAGR of 5.6% over the next five years, generating revenues in 2017 of US$2.2tn, up from US$1.6tn in 2012. Within this overall figure, all three sub-categories — advertising, consumer spend on content, and access — will continue to grow, but at varying rates.”
two really – really – important points. one, because of the shift to digital media, spend on E&M will lag behind GDP growth – the pot is shrinking in relative terms. two, whilst spending is anticipated to increase, the future isn’t evenly distributed:
“Consumer spend shifts from content to access: The rapid growth in spend on access means that there will be a shift in the share of overall global E&M spend from consumer spend on content (from 47% of the market in 2012 to 41% of the market in 2017) to consumer spend on access (from 24% of the market in 2012 to 30% of the market in 2017).”
shift is spending, in real terms, away from content and into access to that content (spend on advertising is holding stable). we’re getting used to paying not for content, but instead for access to that content. whether its Spotify versus iTunes, or HBO’s Emmy and now Cannes credibility, it’s the distributor-networks that are currently strategically placed to gain the most.
but the thing is that the really big changes haven’t even started yet … there’s still a ton of inertia in TV advertising investment – big brands still, I think overly, rely on TV networks to get 30″ messages in front of people. reach is important, but its a necessity not a strategy for communications planning. brands have played for a long time now in being content creators, but they’re only just learning the power of being their own distributors …
new deals, new bargains, new negotiations … emerging between people and how they get access to content. if the old currency was attention through broadcast interruption, then the new currency is data through increasingly direct connections with people. the war was heating up without most major brands shifting even the smallest fraction of resource from broadcast advertising to creating and distributing content directly to people. the dual consequence – more competition for time spent with content and further reduced ad revenues – will see more than the three-day siege of a cable company.
there will be winners and losers, but perhaps the most notable victors in the coming war will be brands. marketing teams that successfully establish and then maintain direct relationships with existing and potential customers by creating and – crucially – distributing compelling and entertainment content.
cry havoc people … the dogs have slipped.
featured image via AP, and the following for no other reason than because I can 😉
another week another PHDcast and this week is the hoo hah edition (you’ll see) …
we talk all about binge viewing on TV, from Lost to Game of Thrones; how are programme makers creating (and distributing) content so that we’re encouraged (tricked?) to watch incessantly? how are viewing habits changing and what are the opportunities for brands to monetise the behaviour?
we also talk about how brands welcomed baby Prince George to the world. from Oreos and Starbucks to P&G and the Sun (or Son) … how did brands capitalise on the cultural hoo hah (I know) that was the birth of the third in line to the throne?
all that plus Nestle use electroencepholographs to prove that taking a break is good for you (I know), and new research from MI9 …
here’s Nic channeling Demi Moore, specifically in Ghost … obvs. have a good weekend everyone …
so a very good friend of mine would spend his time as a child working out which TV shows should go before and after which other shows. he essentially played scheduling. he was therefore somewhat destined to grow up to be a media planner (he is now the head of planning at a creative agency, but my point stands).
media planners get to play the most awesome game of scheduling in the world … we get to play with who see’s what, where, when, and in which context they see it – and that’s just for starters.
at first it was planned interruption, but now – depending on your situation and or point of view – we plan content / engagement / context / connections … the point is that we have to decide with no small amount of consideration how we plan media and content … and weirdly that is something that TV schedulers are only getting their heads around.
this thought was prompted by a piece by Mark Lawson writing in The Guardian about two recent revelations by Shane Allen, BBC controller of comedy commissioning, to the UK’s Broadcasting Press Guild. one, that Ben Elton’s heavily-panned series The Wright Stuff will not be recommissioned and, much more interestingly, that Peter Kay’s new series will premiere on the BBC’s iPlayer – a platform originally conceived as a catch-up service.
why the online platform play? in the article Lawson observes that “Kay admits he was nervous, fearful of heavy backlash had the BBC unveiled his new show with extended hype” … this is Peter Kay we’re taking about, the creator of the sublime Phoenix Nights, running scared. of social media.
the problem is that social media, especially Twitter, gives such immediate and public feedback that opinions can move and upscale with such speed that public-opinion has moved against a show before the first episode has even aired. but shows sometimes need breathing space to develop (I give you Blackadder as exhibit A) but now there’s just no time.
PHD talked about this in Fluid, one of the books what we wrote. a local example is what happened with the Shire (I knew you were wondering about the pic) … in the crucible of Twitter it was judged and hung out to dry before it had even begun.
now I’m not defending The Shire, but as Lawson observes:
“The question of how best to launch – or, as executives like to say, “get away” – a TV show has become a huge debate now that there are so many ways of watching. It’s the reason drama executives lurch nervously between stripping (running a series on consecutive nights, such as next week’s Run on Channel 4) and playing episodes once a week, such as ITV’s Broadchurch.” (source)
the point is that, all of a sudden, TV schedulers face the same problems, challenges and opportunities that media planners have enjoyed for decades: choosing platform, designing context, sowing seeds or landing large, on-demand or broadcast big, all together or spaced out, OTS calculations, reach builds … the art of programme scheduling is about to be transformed.
welcome to our world TV execs, you’re in for a treat.
FOX8's Snag a Simpson initiative … creating viewer engagement or bribe to increase viewer minutage?
so I returned home last night to find one of Pelican's number playing the above game on FOX8. the channel invites you to try and 'Snag a Simpson' … this involves you pressing select to play, and when you see a Simpsons character on the screen you snag them by pressing Red on your FOXTEL remote.
I know for a fact that you can do this because I watched said person do it.
only you need to 'Snag' 10 Simpsons in 15 minutes for your reward. the guide explains that it's free and you can play as many times as you want. I bet you can.
the generous interpretation is that FOX8 is genuinely looking to create viewer engagement and reward consistent viewing. the less generous interpretation is that the channel is blatantly attempting to bribe you from switching channels during the ads breaks (or shows for that matter) and at the same time increase their minutage amongst the measurement panel.
I fear that it may be the latter.
but I also fear that its another worrying sign that the implicit contract between channels and viewers (and advertisers) is broken. the contract states that you get the programmes for free (or for less if you're on subscription) and all you have to do is watch the ads…
only people don't buy that any more. in fact the contract seems a great deal less attractive than it once did… why? (1) a lot of people pay for their TV now, so they're not getting their content for free (2) the amount of choice available makes switching all too attractive (3) we're increasingly trained to consume micro-content – small packages of TV or otherwise that can be consumed in a couple or minutes (or seconds if you're browsing your Tweetdeck) – this makes catching even only a scene on an another channel preferable to sticking to an ad break (and even if you miss the rest of the show you caught the first half so what the hell) and (4) the ads in most ad breaks are pretty crap … I've taken time to watch a few ad breaks of late and I really really have been stunned by the general drivel that advertisers and agencies seem to think passes for an ad…
we made the contract together and I guess that we'll break it together; everyone involved will have been complicit in it's cancellation:
the viewers got impatient and became happy to flick around ubiquitous content.
the advertisers only cared that a small but big enough fraction of people who saw an ad responded, ignoring the fact that the vast vast majority of people who saw it were either ambivalent (neutral brand equity effect) or disliked it (negative brand equity effect) or hated it (super-negative brand equity effect and potentially damaging WOM.
channels continued to print money and fight for petty share wins, ignoring the fact that overall viewing was in decline and that viewers were distracted, multitasking and ambivalent to the efforts of the advertisers from whom they were taking money.
and what of agencies? perhaps agencies will become the most culpable of all. we failed to ask the networks the questions we should be asking, going along with their playground share battles, whilst all the time taking micro-payments in the form of a commission from every ad that we placed. agencies sat like market stall traders at the base of a dam that was about to burst; not investing in an ark but instead telling their customers that everything was fine … that the dam would hold … that the flood would never come.
we may come to see a great deal more endeavours to encourage viewers to 'Snag a Simpson", or a Robinson, or heaven forbid a Grimshaw. it's cheating. we can do better. whether or not we choose to accept our fate of SImpson-Snagging is up to us.
Zaac pointed me in the direction of the above this morning. it's the trailer for MTV America's remake of the UK's beloved Skins. as someone who watched and loved the show it makes for strange viewing. on one hand the new cast and setting looks strikingly different. but after a while the similarities between the above and the original UK version become not just clear but blindingly obvious.
the car going into the water. the quick edit phone conversation. taking to one's own genitals. even the back garden (yard now) trampoline. all conspire to indicate that this is a clean remake of the show. something which, if true, presents not only a missed opportunity but a huge failing of producing.
a missed opportunity, in that the best adaptations of shows for US audiences haven't been remakes but remixes. same show, different culture. think about how The Office transferred from Slough to Scranton, or how the boys from Manchester evolved into a very different Queer as Folk Baltimore. great remakes, or should I say remixes, protect and nurture the truth of a show whilst mixing in a new culture and society's perspectives and nuances.
from Slough to Scranton – same Office, very different culture
from Manchester to Baltimore – same, err, well totally different actually…
that "the remix is the very nature of digital", is of course now so widely held to be true that it's almost too obvious to quote it. but Gibson's elegant maxim is too often ignored. by TV makers and brands alike. just as in the case of TV shows that fail to capitalise on the opportunities that a remix affords, how many global ads do we see land on the screens of shores a far cry from their (often European or American) origins? or worse, dubbed out of their native tongue, so that we are sold to by smiling fresh-faced lip-synced avatars…
the pressure to create ads that can be deployed across a multitude of regions leads to centrally developed, but often locally less-relevant communications. distinctiveness in communications is key – it mitigates misattribution and builds brand cues that extend the return of a media investment out of the short term and into the longer term. simply deploying a global property locally is no guarantee of success.
this presents a problem for TV producers and brands alike … a problem that, for the latter, will only be exacerbated by a shift away from broadcast interruption as the de-facto method for audience reach, towards a two-way content and community-led platform that seeks to engage an audience.
MTV's gamble with Skins – to create what looks like a remake rather than a genuine remix – should give pause for thought for marketers. to what extent are we acting in a brand's best interests by picking up and redeploying content into a country – and culture – for which it wasn't designed? how many opportunities are missed, and investment wasted, by failing to reflect the nuances of a culture with whom you seeking to engage?
“the broadcast model isn’t broken… yet. how prepared are agencies for when it breaks?” was the question I wanted to put to the Q&A panel at last week’s iMedia Agency Summit in Sydney. whilst I didn’t get the chance to ask the panel, I did get the opportunity to ask it to Rohan Lund of Yahoo!7, but more of that later.
yes, this week saw the AdTech Summit series hit Sydney, part of which was the iMedia festival which I attended along with around one hundred of my Sydney media counterparts. all in all it was a day of more questions than answers, but that was to be expected I, well, expect. that said, some genuine morsels emerged, which (after a bit of an absence from the blogosphere) I thought I’d share… here then, is what happened at iMedia, at AdTech, at Sydney…
Unilever brands that have utilised the social media space
first up, delivering the keynote welcome, was Unilever’s Babs Rangaiah (@babs26) who described how he and others are pioneering in the Social Media space at the company. its necessary stuff in his opinion, pointing out that only 18% of TV campaigns generate positive ROI, and that 24 of the top 25 biggest newspapers are undergoing circulation decline.
his three observations were that Unilever is (1) living the [social media] space, (2) re-framing their thinking re Social media and Applications [ie NOT pre-rolls – thats the broadcast solution applied to the online paradigm], he cited BBH’s Axe Wake Up Service app from Japan (above), and (3) rewriting its media manifesto along these lines, as would be written by customers:
be part of the world – Rangaiah pointed out the gap between time spent online and advertising spend online
penetrate our culture – the move from interruption to engagement; is what we create useful, entertaining or interesting? he cited the example of the Dove for Men campaign, which after scooping up a SuperBowl spot proceeded to land its American Football-playing star a seat on Oprah’s couch
give us a voice and a role – Best Job In The World anyone?
be authentic – anyone unclear on this one just Google Dell Hell…
listen to us
create more value – “you want us to pay? … [then] we want you to pay attention”
don’t be so corporate
keep it simple – good one this, if you can’t explain an idea to a non-marketing friend or partner in ten seconds then its probably to complex to ever get traction
telling friends – WoM is the most powerful form on advertising [Alleluia Babs, Alleluia]
do good
he ended on a topic that would be the subject of some debate for the rest of the day… how the rapid evolution on metrics in the online space has created its own rewards but also problems. from clicks and impressions to unique users to engagement or stickiness and now ROI … measuring success has never been so possible nor so complex.
next up was the lovely Megan Brownlow, Entertainment and Media Editor for PWC’s Outlook, which complies stats on ‘where the money is’ in the entertainment and media spaces… this is facts given meaning not opinions back up with stats, so worth paying attention to, especially a key observation re consumer spending vs advertiser spending…
PWC’s five year view looks a lot like this
PWC revenue predictions as presented at iMedia Summit last week in Sydney
put simply, people are predicted to spend proportionately more on entertainment and media (content) than advertisers will spend on media. good news if your media business model is predicated on creating and distributing stuff that people will want and pay for. bad news if your media business model is taking commission on advertising spend. a problem further compounded by the well documented explosion in inventory, which any economist will tell you will lead to lower yields for media publishers and agencies.
Brownlow described the ‘structural change’ of this versus other recessions. the recovery will be shallower than any previous one, “a crawl rather than a jump out”, but not for everyone. between 2003 and 2009 search revenues have increased from 31% of ad revenues to 50.4% – 90% of which, no one needs reminding, goes to one company.
the big growth is in consumer pay models, where growth is predicted to be 5.5% CAGR (’09-’13). hence media owners and publishers seeking hybrid business models (another hot topic of the day) to monetise content. Brownlow noted research suggesting that, for example, in newspapers people will pay, but only for verticals – a proportion (Finance 97%, Sport 77%) of the hard copy price as long as that same content is not available for free elsewhere. in this context Murdoch’s rallying cry to the newspaper industry to declare war on Google makes immaculate sense. her final observation was that even if hybrid pay models work, lost revenues won’t be replaced. the annihilation of the old model of newspaper publishing is still an inevitability.
Brownlow’s final observation however was a cold shower for any Australians readying themselves for seats of honour in the digital revolution after-show party. compared to the rest of the world, the country is significantly lagging in online adoption, with revenues in the online space in the region of 25%, compared with 31% globally and up to 50% in countries such as south east Asia. “traditional media ‘owns’ the market in Australia for a long time yet to come”. the reasons, infrastructure (and therefore effectively ISP cost) and attitude… the former understandable given the countries geography, the latter frustrating to say the least in a country with such an entrepreneurial culture (my observation not Brownlow’s).
three ‘game-changers’ to end with: (1) the NBM or National Broadcast Network, a government initiative to hardwire the nation by 2017, but which Goldman Sachs predicts will be only 50% complete by then, (2) mobile, yes 2010 IS mobile’s year and (3) interactive games, with a 7.5% growth forecast, 2.2bn market and two structural changes to boost the sector in the form of mobile and online gaming. play on.
next up the enigmatic Ed Smith of NDM who started with a topic that was to become one of the themes of the day… that of volume versus value in the online space. he made two observations – one, that (average) click rates were down from 32% to 16%; and two, that 8% of people accounted for 80% of clicks. so just how valuable is a click? how many brands and businesses are so overly obsessed with generating clicks that they’re “going out of business as cost effectively as possible”? …he questioned what the point of [100%] paid-for search was when you’re not investing in product or marketing initiatives that ‘build the brand’?
this was a phrase that kept on cropping up, bit of a fat phrase (and not in a good street way)… ultimately by ‘build the brand’ I suspect the speakers were referring to brand associations. and raising the (valid) question of how long the broadcast interruption model can create and sustain brand associations (ie what ‘brands’ effectively are) if we’re all collectively ignoring / avoiding more, clicking less, and paying for content direct.
Smith went on to give the publishers’ perspective wrt post-broadcast print… describing some of the emerging platforms he played with at a recent tech conference. I was going to ask him “how he was intending to meet the challenge of defending margins when the cost of producing content is no longer matched by advertising revenues?” … but we know the answer to this, it’s the much talked about hybrid model… of combining (lower) ad revenues with direct payment from people for the content. the ‘iPad $ a day’ model. Smith’s retort to those who question the sustainability of the hybrid model: “People who say ‘people won’t pay for content’ don’t know what’s possible”. to that point, he showed us this:
he observed that the NYT’s iPad application launched with three advertisers each paying US$200k for the privilege and challenged the audience with the question “are your digital media choices making your brand bigger or smaller?”
the end of the morning saw Fairfax Digital’s CEO Jack Matthews take up some of the themes opened by Smith… “consumer demand for media, in all it’s forms, has never been greater”, “a new era of online advertising”, “direct response get’s too big a share of the media mix”, “the future of media companies and agencies is to add value” … there’s a clear direction of travel from publishers here; away from trading debates based on the value of a click, towards trading debates predicated on the value of the audience the publisher is providing…
Matthews outlined three change catalysts in the space: (1) three screens (2) building brands on desktops and (3) agency / campaign integration
he made a delightful observation on the three screen model: “if the desktop user is a browser, then a mobile user is a hunter”. I have a lot of time for that, it really focuses how you think about adding value to people in the mobile space. he reiterated the belief that “people are willing to pay for content on mobile devices”, and pointed out the projected rise of video advertising on the desktop – 48% CAGR in ad revenues to 2014. he also made it quite clear to the audience that Fairfax Digital is in the business of and focusing on “building engaged audiences more than reach”.
he ended with a call for integration, observing that “we have no aligned metric for measuring ‘brand building’ [that phrase again] online”, and that there’s not enough integration within agencies on aligning on and offline media. he acknowledged that his organisation had to be more prepared to work with other organisations too… an acknowledgment that he described as a “fundamental shift” in Fairfax’s position.
after post-lunch sessions by Michael Hendricks, Head of Decision Management, CitibankAsia Pacific (“we’re about acquiring the right customers, not the most”, “our most valuable customers use all of our channels most of the time”) and Corporate Anthropologist (who knew?) Michael Henderson, it was back to the media agenda with Rohan Lund of Yahoo!7…
58% of Yahoo!7’s audience media ‘mesh’ at least several times a week: 95% on email, 63% on social networks, 54% to get more info on a show and 40% to follow-up on an ad they’ve seen… time spent online watching video is now 13%, and very much social.
Lund challenged the session – in a context of content, content content – to question what our business models were? access isn’t enough. “we [Yahoo!7] make it easier for users to access content that matters to them most”, adding that “our businesses are data businesses … our core business is targeting”.
he outlined Yahoo!7’s recently launched catch up service, thru which every primetime show is available. he described how the ambition is to get the browser closer to a TV environment, and talked thru the challenges of making TV shows available for different IPTV-ready TV models. interestingly, for non-partner TVs they’ve introduced open-source development. and he was quite clear that he saw no reason why online video CPMs will never be lower than for TV; in effect a premium for targeting.
back to the question I asked at the start of the post, I put to Lund that “the broadcast model isn’t broken… yet. how prepared are agencies
for when it breaks?” … he believed that agencies are becoming more integrated, and understanding better the balance between on and offline. but acknowledged the elephant in the room; that “no one ever got fired for buying TV”, and that people are still “hiding behind TV as a safe solution”…
good to have it out and said, and credit to Lund for doing so… but I think its less about TV being seen as the safe solution, and more the reach and delivery of the broadcast model that’s seen as the safe solution. the absurdness of this just gets truer every day. if the iMedia summit made one thing clear its that the figures are now starting to track the theory. viewing fragmenting, click rates decreasing, ad avoidance up… and the solution? a continued clinging to the sinking ship that is broadcast interruption. it’s like the Titanic’s going down and the industry is scrabbling to get on board…
this was followed by (for me) one the highlights of the day as Sean Finnegan, President and Chief Digital Officer at Starcom MediaVest Group took us thru his vision for his media agency’s digital offering.
his logic is crystal: clients are struggling to deliver accountability in rapidly changing markets where its harder to connect with consumers. agencies therefore need restructure and resource to provide a range of new offerings: RealTime consumer insight, actionable insights, and content – all created by what Finnegan describes as ‘liquid talent’. how…
business intelligence and hub formations
data exchanges (in the US buying of non-identify-able consumer data is now mainstream)
standardised findings with consumers and the industry (common and consistent measurement)
instant content delivery, real time text and video (eg EA’s Tiger Woods video)
strategic alliances, frenemies have never been more important…
he observed that “efficient pricing is no longer a value add”, and that “marketers and agencies that focus only on price are leaving value on the table”. we’ve gone “from a linear to a networked comms infrastructure [which] creates a transfer of power to the consumer”. he noted that we “need to start understanding the passions and behaviours of individuals [across media platforms]”, and observed that this would have inherent problems for publishers.
he also outlined his thoughts on the media agency offering… “because of our proximity to consumers we have to be more adept at design and messaging”, but also gave a stark warning to media isolationists: “you need to be confident enough to partner with competitors that are better than you to deliver the best solutions for your clients … the more we give away, the more we grow”.
his view on the future of the Starcom’s digital offering is clear: a move away from media people as aggregators towards media people as analysis of data, interpreting, modeling and projecting for clients and brands. his people will be more account managerial and who are less in the business of “killing bad news” and more in the business of “selling the best ideas”.
so what to make of it all?
great day and some interesting comment and debate, but you can’t help but leave with the impression that there’s far more questions than answers. but perhaps that’s well and good, it’s an easy cliche to say that there’s never been a more interesting time to work in media… but its true never the less. for more than three years this blog has set itself the task of negotiating the future of media and communications; a task is no less interesting, gripping and exciting than it was when in November 2006 I wrote my first post on TV (versus) online:
“the internet is television. but it’s television on viewers’ rather than broadcaster’s terms. the issue isn’t the demise of TV, but the decline of the broadcast model and of the broadcaster as commissioning editor and content aggregator.”
its vaguely how terrifying how little has changed. the debate, the argument and the negotiation continues, and we’re all the better for forums like iMedia in which to talk, and for that matter drink, it out…
NBC's SuperBowl broadcast cash cow; could the last marketer out please turn off the lights (pic sourced)
news this week that Chrysler has caused quite a stir by 'snapping up' one of the last remaining ad spots in the Superbowl. 'Chrysler' you say, 'the Chrysler that got bailed out by the American taxpayer to the tune of $13.5 BILLION last year?' … yes, the same.
I am, in a word, stunned. stunned that an advertiser that had just been bailed out by the American taxpayer could decide that blowing something in the region of $100,000 per second on a 60" TV ad is in any way shape or form the right thing to do. when oh when are people going to get that broadcast advertising is neither efficient nor effective at selling things. McKinsey, if you remember, did a really cracking bit of research that went a long way to proving that consideration isn't a funnel and doesn't work like that.
I'm not suggesting that advertising (ie one-to-many 'adverts') isn't good at doing things. it really is. it's very good at (1) communicating new news, (2) getting people talking about your brand and (3) it's very good at validating purchase decisions. but none of these are relevant for Chrysler; who in this move have only succeeded in getting people talking for all the wrong reasons…
Ad Age quote one commenter as saying that the move is a "slap in the face to every American taxpayer … This is Chrysler's way of saying 'Thanks for saving us, but now screw you, America. We're gonna use the money to pay for some Super Bowl ads".
a spokesperson for Chrysler- quoted in the same article – comments that "The Super Bowl is one of the most-watched TV programs of the year, not only for the football game but for the creative advertising … It provides an efficient platform to make a statement, set the new brand-positioning and reach the maximum number of viewers in comparison to traditional advertising … It would be more costly to achieve the same number of viewers in traditional media placement and ensure the high viewership attention span that the Super Bowl delivers."
I'm sorry but the 1980's called and they want their marketing model back.
its a statement from a company marching backwards: "efficient platform to make a statement", "set a new brand positioning", "in comparison to traditional advertising", "high viewership attention span" … I really am at a loss for words.
Advertising Age's headline was that "you're damned if you do and you're damned if you don't" – their reporting suggesting "Don't advertise, you don't move product. Advertise, you get hammered for wasting money" … I'm sorry but in this case Chrysler are just damned. damned because they have. they have wasted money, they have taken a lazy way out, and they have ignored the new paradigm of marking and communications that has evolved around them over the last decade.
Pepsi decided that they wouldn't be damned if they didn't. the company that spent $142m on SuperBowl advertising between 1999-2009 (source) have decided that they'd rather invest the money on something a little more meaningful than lining the pockets of Madison Avenue's Bad Men. Pepsi are marketing by investing in the people and projects that people think are worthy of investment. Pepsi get that ad money isn't there to 'sell' stuff. it's there to get people talking about your brand, because what you're doing is worthy and meaningful and acting as though you give a damn about the people that you want to buy your products. and full credit to them.
in the slow painful death of the broadcast sales model, it's the existence of events like the SuperBowl that will allow its last standing defendants to cry "it works … we can shout at people and claim 'our brand believes in freedom, or choice, or in the human spirit, or technology or whatever we think will most differentiates us from a competitive set that we create in order to validate our investments and people will believe us and they will buy and it will be awesome".
but if the reaction to Chrysler's move tells us anything its that the long held contract between advertisers and people who buy stuff may be starting to show more than a few cracks. people are realising that thereare other ways to be marketed at than to be shouted at by a company who can spend $100,000 a second on an advert. sure the model and it's contract will hold, probably for a good while to come, and Chrysler seem happy to throw their dollars at it. but I'd rather be one of the first ones to get out and taste the fresh air than be the last one to turn out the lights. what you do, I guess is your call.
the established institutions of 'old' media were always going to take the hardest hits as the combined effects of a global advertising slowdown and a digitising media economy came to bear. such seems to have been the case. according to Warc's latest Consensus Forecast, 2009 TV revenues in the States will fall 10.9% yoy versus total global ad spend yoy decline of 10.5%. more substantial 2009 decreases in TV are anticipated in the UK, France, Germany and Japan.
looking forward to 2010, TV could very well be the area of media that not only emerges most strongly from the recession, but charges out guns blazing leading the brigade of other media behind it. the same Warc report suggests that marketers in two-thirds of the sample are intending to devote more revenues into TV next year, with Brazil, China and India up by more than 11%, the US by 1.8%, and France by 1.3%.
in fact whilst advertising revenues have declined throughout the recession, there seems to have been limited disruption on the quality of networks' output. new offerings, such as the US's FlashForward or Australia's Celebrity Masterchef have emerged and more than held their own. and whilst it could be argued that reality TV has more than shaped current TV output globally, it hasn't stopped the likes of Glee and Modern Family making their mark.
but despite strong content and a return of ad revenues in 2010, viewing will surely switch online right? well no necessarily so. this week also saw a report from the UK's Enders Analysis arguing that the scale of the VOD market has been overplayed, and that by 2020 the overall national UK average of VoD viewing will be 5%;
"and at these levels, and after taking into account the lower tolerance of interruptive advertising in on-demand programming, non-linear VOD services are unlikely to have a significant impact on commercial spot advertising revenues during the next 10 years … the traditional linear broadcast TV model continues to work well in terms of reliability, simplicity, ease of choice and ability to deliver popular programming with mass appeal"
but all this is without taking into account the phase shift that could and should happen with TV in the year ahead. 2010 could be the year that TV genuinely goes social… as the Guardian observed in a cracking data-fueled article on Jedward's storming of the Twittersphere;
"Every Saturday and Sunday night, Twitter is exploding with real-time boos, back-pats and reactions to the show's performances. It's a re-imagining of the old-media watercooler ("Did you see The X Factor last night?") in live, online space ("Omg jedward are through!") – and it could point the way to the future of TV…"
as Gary Hayes, a former development producer for the BBC who now lives in Sydney and blogs rather awesomely here, points out:
"we now know when our attention is required, especially those inciting moments when emotion or serendipity may be possible. So with these two things happening there are a growing number of services trying to glue the two – either bringing the TV to the back-channel or layering the back-channel ‘over’ the TV" (source)
hayes has aggregated a whole host of services, either existing or in development, that are bring TV to the social space and vice-versa. here are three of my favourites (all sourced from Hayes' original post):
EpiX has high-profile backing from the likes of Viacom, Paramount, Metro-Goldwyn-Mayer Studios and Lionsgate. it's a platform for viewing content online, but specifically you can invite your mates to private screening rooms and interact with them… ITV if you're listening, X-Factor was made for this…
another favourite (and another example of the increasing warmth between and cooperation by the Gates and Murdoch organisations) in the shape of X-Box and Sky who have teamed up to make the latter's content available on the former's entertainment console. but the basics of the streaming aside, the really interesting bits are when the TV screen pans back and your in a room with your and your mates' avatars. representations that you can support, deride, encourage, laugh at or ask questions of. real social interactivity in real time with real people…
there's a full video of a presentation that Xbox product manager Jerry Johnson gave to paidContent:UK here – jump to 5 mins 40 secs to get the social bit:
finally, on the mobile front there's tvChatter, a iPhone application that allows you to connect TV content to the Twitterstream relating to that show in real time. you can follow Tweets from everyone or just from people you follow. and if you're not sure what to watch, you can see which shows are generating the most interest and check them out:
this is exciting stuff. and I'm not pretending for a second that its anything new: we've been talking about, SMSing and debating TV for years. but never have we been so connected to so many people we know in real time to do so. never have the conversations about the TV we love been so prevalent and so accessible. I hope then that 2010 isn't just the year that TV sees a resurgence in revenues, but also the year that TV finally gets social… we will never look at our screens in the same way again.
yesterday Mediatel held their annual Media Playground and Mediation popped along for the afternoon seminar discussing Digital Broadcast. it's a broad topic area, covering emerging technologies, content, changing consumer behaviours and rapidly evolving business models. one thing is clear – we have a lot more questions than we have answers.
it was apparent that we're entering an age of complexity in how content is created, deployed and consumed. no one solution will predominate. Bruce Daisley – Agency Leader at YouTube – observed that it's less about the platform, and referred to a 'long tail' of competitors. that content rules, was echoed by the panel…
Rhys McLachlan – head of implementational TV at MediaCom – noted that this is, ultimately, what consumers will resolutely follow. this was echoed by Jon Mitchell of Spotify who suggested that Hulu – recently down 3% – is plateauing. they have (as opposed to Spotify) a limited amount of content, to thrive in a digital content economy you need ubiquity of supply.
and where eyeballs go commercial impacts follow right? not necessarily. McLachlan, in one of several soap-box moments, commented that "clients are increasingly risk adverse" and that "it's hard to invest in channels that are unproven. there's an absence of valid metrics out there … we are retreating to rather than flighting to quality. people who want a share of my broadcast budget aren't making a strong enough case for their platforms"
McLachlan went on to comment that "we're complicit in perpetuating a trading model that was created in the 1950s … we need to move on from this legacy model, a model that's been broken for some time".
it occurred to me that it's not the only model that's broken. what so often get's lost in the maelstrom of how to aggregate and commercialise impacts in the new world of digital broadcast are the opportunities to engage audiences beyond the spot. the spot is important and will not vanish into history anytime soon, indeed Daisley noted that YouTube's best performing ad (Gorilla of course) out-viewed their best performing piece of longer-form content (Wallace and Gromit if you're interested) by a ratio of forty toone "YouTube", he said, "is empirical evidence that great ads work".
but the spot ad no longer sits alone in the communications toolbox, and to approach commercialising long-form on-demand content by interrupting with ads really does defy belief. interruption in a on-demand world is at best a contradiction in terms and at worst a failure to grasp the brilliant opportunities that on-demand offers the brands (and for that matter agencies) willing to embrace it…
because if anything is true as we negotiate the future of media and communications it is this; that brands and brand communications have – like everything else – to be in demand.
MEDIATION 