June 22, 2007Backtoupfront |
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The papers and trades are all aflutter this week with reports that the upfront is back; network television is back; the 30-second spot is back, based on assertions/projections that this year's 30-second spot lovefest should bring in anywhere from $9-$9.3bn.
Last year's number around $8.75bn would make the increase in the region of 2.5-5%.
CPM increases are projected to come in around as high as 7-9% for ABC with even struggling NBC coming in around 3-5%.
Huh?
Let me get this right. Audience numbers continue to decline. Channels continue to proliferate. Adoption of DVR's continue to rise. Consumer generated content continues to increase. Blogs, Podcasts and Virtual Worlds continue to grow.
And we've decided to go back to the tried and tested?
Let's ask departing CMO of 30-second spot obsessed Gatorade, Cindy Alston, what she thinks of this logic-flow, shall we?
So what does this mean? Are we out the woods or is this nothing more than a cruel joke; an illusion; the mirage of an oasis in an endless and brutal parched desert?
If the reports are in fact confirmed, we're talking about a 5% increase of about $350 million dollars, which would put network TV's booty (much like my booty i.e. fatblogging exploits) back in a holding pattern, establishing over the past 3-5 years.
Personally, I believe that money could and should be smarter allocated elsewhere, as I joked yesterday with a reporter....how about investing some of this money in the blogosphere? Hell, if you were GM you could buy the entire blogosphere, let alone sponsor it.
But back to the subject at hand. Has the storm cleared or is this a temporary reprieve...kind of like the eye of the storm? For starters, there are always going to be seasonal/economic in play.
People still watch television. And although cable has continued to flex its muscles with improved programming quality, people still use the rule of 5 fingers when it comes to viewership i.e. 2 (CBS), 4 (NBC), 5 (Fox), 7 (ABC) and that other one. But are they watching commercials? We know the answer to that question, don't we? I can't tell you the number of senior marketers who skip EVERY SINGLE COMMERCIAL WITH THEIR TIVO'S, and yet somehow believe their consumers are less sophisticated or intelligent to do the same.
Another factor is going to be the shift to commercial ratings and the fact marketers would be paying for time-shifted viewership and it's probably here, that you'll get the best idea of the delusional drunkedness that proves well and truly that we're living in the Twilight Zone.
Here are some clips from the LA Times article:
Industry executives said they anticipated that the audience for commercials would be about 5% lower than the ratings for the program the advertisements appear in.
The networks, however, are offsetting any decline in advertising dollars that result from lower ratings, because for the first time they will be paid for viewers who digitally record a program and watch it later.
Last year advertisers refused to pay for those viewers. But that audience could no longer be ignored, as about 17% of homes with televisions in the U.S. are now equipped with digital recorders. Advertisers will now pay for viewers who watched a show within three days after it was recorded.
Allowing that audience to be counted is likely to bring in additional hundreds of millions of dollars to the networks. The most popular programs tend to have the highest rates of recording and playbacks, so networks with the top shows will benefit the most.
"We're finding that a little more than a third of the people who delayed their viewing ended up watching the commercials," Schwartz said. "And we need to give value to the people who are watching the commercials."
I feel like Shaggy or Scooby right now. I just found the missing diamonds and pulled the sheet from the ghost to reveal a sad, pitiful old man looking for attention.
To recap, we're saying that all is good in TVland, because we believe 95% of TV-watching consumers who watch content will also watch commercials, coupled with 33% of DVR owners who just can't tear themselves away from the screen with feminine-hygiene bursts onto the scene.
Riiiiiiiiiiiiiiiiiiiiiight.
Not to beat a dead horse, but I'm curious if that 33% include fast-forwarding stats in the "watching" data, and while we're at it....I wonder if the 95% (assuming this number is correct) specifies the difference between "was watching and paying attention" versus "making a sandwich, taking a dump, checking e-mail" etc.
Come on people. Wake up and smell the roses before you go the same way as every other CMO seems to be going nowadays. Grow some figurative balls or at the very minimum, use your brains or trust that gnawing feeling deep down in your gut. Surely you realize you're in the eye of the perfect storm and the worst is yet to come, don't you?
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Comments
There's one dot you need to connect in order to get all those people who won't listen to you to actually sit up and take notice:
Why do you assume that people are more likely to want to hear advertising messages online?
The numbers you're quoting might also prove that people just want to avoid ads, period. And that has nothing to do with the viability of 30 second TV commericals. It's just that the DVR, like the pop-up blocker, allows them to better utilize the ever-shrinking amount of free time they have.
Posted by: Tangerine Toad
I think you have just managed to miss the point of Joesph's post entirely. It's not about advertising anymore. Advertising is dead - the advertising that bombards you with crap you don't need and brands you don't care about. Any online advertising that does this is also dead.
If online teaches you anything, it's that people don't mind being advertised to at all! As long as it is relevant, interesting and engaging (the key one being relevant). Who is the most successful advertising agency over the past 10 years? Google.
Posted by: Paul
Great round-up. If we believe that there is no extra money, then the consequences of an increase in US TV spending has to mean a decrease in the amount available for the rest of the mix. We're going to have to be even smarter to make the most of it.
Posted by: Rachel
No Paul, it's you who've missed the point of mine.
People DO mind being marketed to. In any way, shape or form. When they're pressed for time and want to do their own thing, they mind considerably.
And that line about "people don't mind being advertised to at all! As long as it is relevant, interesting and engaging" is a clichéd mindless crock you should be embarassed to repeat.
The internet is a multi-faceted medium. Sometimes it's a research tool. And yes, Google works because it pops up keywords when I'm looking for a particular product anyway. It's a smarter version of the yellow pages that's not particularly "engaging" - it just saves me time when looking for an 8 inch widget.
But the internet is also a source of entertainment and social interaction. And when people are engaged in either of those activities, the last person they want to hear from is a marketer. No matter how charming and relevant that marketer may be.
Posted by: tangerine Toad
well said Toad. I think there are LOTS of superfluous adjectives going around in these blogs sites. You'd think my core existence and meaning would jump sky high just by tuning in to the Internet.
I always wondered how people were placing SO much importance into banners and their effectiveness. Not that I think what I do is what everyone should do, or is doing, but I never clicked on them, never seen anyone click on them, and instead I sat there just ignoring all the Internet Marketers wax poetic about it. Sure enough, when all the drivel died down the new talk was that banners were not all they were cracked up to be. Sure, there was some return and interest, but it wasn't the super nova it was made out to be. And so will Second Life, and so will Blogs, and so will PodCasts, and Twitter, etc ...
There are certain fundamentals in life and in being human; all these tools change none of those. They definitely (can) add to them. They definitely make (certain) things better, and we should be happy for them. They have their place. But simply ignore all the hype. Hype is what Marketers do best :-)
DM.
Posted by: DM
Hmm... Toad, Paul, I think you're both right (and wrong).
"People don't mind being advertised to as long as it's relevant,interesting and engaging." This is absolutely true. Because people love good content, period. Whether it be in a commercial, show, video clip, whatever. This is not something that's up for debate. Hell, it's the reason good commercials and "viral" advertising gets passed around, re-posted, and re-watched thousands if not millions of times. Good content, people will like it.
And, yes, people DO mind being advertised to. Especially if it's not on our terms. It's exactly why, in fact, people skip ads by the bucketful with the ever popular DVR. And it's why we groan whenever we see badly placed product in our favorite shows.
BUT, people do actively search out brands and flock to them Internet to engage and embrace them. They still share their commercials, pass around their viral, and stick their ads up on dorm room walls. And, how many times have you heard actually overheard people passionately saying things like "OH! I LOVE that ad! but the last one wasn't so good." Sure. Lots of times. So they ARE seeing the advertising. They're just seeing it on their terms. When and where they want to. We don't control it anymore, which is what pisses off the suits.
And JJ, you're just generally annoyed and correct, the 30 spot is still dying (or mutating) and ad execs who've made it their life's work to promote and sell them aren't ready to retire yet. So they report nonsense like the "30 second spot is back!" every now and then. It's like the last bunch of guys who kept insisting the horse was still the best way to get around...right before they got hit buy a car while riding their horse.
Posted by: talking monkey
Well, Toad, you are making no sense. The above poster has made some good points and you should read it.
SOME ads are relevant, SOME are engaging, SOME are interesting - I'm not saying one ad has to be all that, just that you have a far higher chance of getting either one of those on the Web than you do on TV.
And as the above poster points out my "clichéd mindless crock" comment is actually true. Thanks for the thoughtful way you apporached that.
I think the biggest mistake you make is thinking that people are avoiding advertising because of the shrinking amount of free time we have. Like at some point in the past we filled up our day WATCHING advertising because it was so relevant?!?!? Sorry, not going to fly. People have been avoiding ads for years that were meaningless to them, now (with things like po-up blockers and DVRs) it's just easier to do that. Hence Joseph's amazement at the continued 'up-front' fiasco.
Posted by: Paul
Here Paul, let me bullet point this for you, I think you might find it easier:
*Your comment was a cliché because it's about as obvious as stating that the sky is blue. People like watching advertising they like? Ya think? Howard Gossage, the most famous adman of a previous generation (whose work I recommend you read) said it far more clearly and succinctly way back in 1950something: "People don't read advertising, they read what they are interested in."
*To Gossage's point, it doesn't matter what media your message runs in so long as it's interesting. People don't exclusively spend time in one media or the other (hence the number of web sites devoted to TV shows) - marketing messages shouldn't either.
*DVRs enable people to watch MORE television. Without the technology, they simply watched less TV. People surprisingly like watching television. Fast-forwarding through commercials allows them to watch more of it in the limited time they have.
*Joe Jaffe runs a company whose purpose is to sell marketers on the idea that running television commercials is a grave error. So it's not surprising that an article that disputes this proposition gets a strong response out of him.
Posted by: Tangerine Toad
Toad - 100% incorrect. I don't run a company the convinces marketers how to run less TV; I run a company that helps them understand how the world is changing and how to stay connected with their consumers/customers by embracing that change.
Part of this process involves the experimentation with "a bold mix of alternatives to traditional advertising".
I can understand how you got confused.
PS my other purpose is to help creatives like yourself keep going to (and winning at) Cannes just like this year's big winner proved.
Posted by: jJ
Paul, I think you are right. Toad, I think you are right. JJ - I think you are right, with the exception of "...And although cable has continued to flex its muscles with improved programming quality...". Have you watched History, Court TV, Fox News, or the countless of lifestyle (sameness) channels? Me thinks you are slightly distracted by your overpriced HBO subscription.
It is hard to find something of interest on my 150+ Comcast Cable Network. Which is why I have not bought a DVR. And have not extended TV into the bed room, which has also greatly improved conversations and the like :-)
Anything that IS watcheable, I watch on the internet or rent. An exception is made for John Stewart, but that is not appointment TV either as you can see it on the net, as well as the next day in rerun. The other REAL exception is made for football. And I do not mean the boring American kind where the players wear so much padding you would think you're watching an episode of the Transformers, and there are play interruptions so more ads can be shown... I mean of course the honoroble game of s... errm... socc... sorry, I can not get that "s" word to come out... so, football (something the Yanks are getting increasingly good at by the way!).
By the way it is Sunday afternoon, and I am hoping you are by now a dad x 3. Excuse me while I go looking for my balls, so I can start the week with cajones.
Posted by: ad stock
JJ: Semantics will get you no traction with me.
If I hire the guy who wrote a book called "Life After the 30 Second Spot" I'm thinking he's going to tell me to cut back on my TV spending and look for a bold mix of alternatives (as opposed to a timid mix of alternatives?)
As for Cannes, I had nothing to do with that most excellent spot. But if you'll buy me a ticket to Nice, I'll gladly go and congratulate the winners for you ;)
Posted by: Tangerine Toad
Toad, thanks for the bullet points - makes it a lot easier, I agree. I have a hard time following paragraphs.
*So if you agree that my comment is obviously true and so true that it is not worth really repeating, why did you argue in your very first post that you think people "want to avoid ads, period". Why would they avoid something they could potentially find interesting and likable? If people are avoiding TV ads like the plague, what does that say about the usefulness of the medium? To Joseph's original point in his post.
*I think Gossage makes a good point, that you sort of use in the wrong way (and yes, I do know who he is). In which medium is it easier to make things (ads or not) that people are interested in? 30secs of TV, or on the Web? Gossage's quote supports the whole argument of moving away from 30sec TV spots imo.
*"DVRs enable people to watch MORE television. Without the technology, they simply watched less TV." Ummm, in your original post you said that you thought DVRs allowed people to utilize more of their free time?? DVRs, in part, are an enabling technology for an already in-grained habit - ad skipping. The advantages of which you can argue all you like, but they are different for everyone.
*I think Joseph's reply to your last point is a bit PC considering his book (and yes, I have read it). The 30sec spot as we know it is dead, Toad, it is going the way of the Dodo. It was a useful device 30 years ago when it was novel, and perhaps interesting and even engaging. Advertising, on the other hand, is alive and well.
Paul
Posted by: Paul
Boy, oh boy.
I'm managing to agree and disagree with just about everything here. Figures.
OK, I agree with JJ's frustration regarding the inane dedication to traditional methods of marketing. I see it all the time. Decision makers making decisions based upon what they personally feel comfortable with or what they're used to. It's not about then number$ or percentage increases (well it is somewhat), it's a about a strategic vision that doesn't want to adapt.
Now about advertising being dead. No, it's not. Neither is the 30-second spot. No, advertising is very much alive...as long as it's relevant, interesting, engaging AND, in a nod to Toad, convenient. So, Toad...Paul's comment isn't a mindless cliched crock.
Most people are used to advertising. Or at least that it has to exist. That's why broadcast TV is free or a paper costs 25 or 50 or 75 cents. They may not like it (and a small percentage gets TIVO or installs a pop-up blocker), but they accept it. If it's pertinent to their lives, they pay attention.
In fact, I'd invite you to read two recent posts by Toad. Mostly very insightful.
In one of them, http://tangerinetoad.blogspot.com/2007/06/your-brand-is-not-my-friend-web-20.html, he points out "Yet to listen to all the self-appointed Web 2.0 gurus, this is the wave of the future, it’s a matter of years before every single American- nay every single denizen of the planet- has a MySpace site and that hanging out on MySpace will replace watching television and anyone who disagrees with them is a fucking Luddite.
Okay.
Only there’s one thing they keep forgetting: The whole world is not made up of people EXACTLY LIKE THEM."
But then later he says (and I'm assuming anyone who calls themselves "Toad" is a he) "Which brings me to my final point: most people aren’t living in a city they weren’t brought up in, thousands of miles from their closest friends. They’re living with spouses and children who actually get offended if they spend a few hours online, which is a solitary activity, rather than joining the rest of the family watching “American Idol.” Which mindless though it may be, is still a group activity."
He apparently believes that, well, eveyone is like HIM.
It's a big friggin' world. Media habits are changing, but nothing is going away. And there are now large secions of our population that are more Web 2.0 oriented that are being missed by decision makers that are afraid of change and there are large sections of our population that are perfectly fine checking their email once a week and sitting down in front of their TV each and every night.
Posted by: Jonathan Trenn
Never said everyone was like me Jonathan.
But there are far more people living in family groups with children and relatives around than there are young urban professionals living solitary lives.
That was the sole point.
Yes there clearly are portions of the population who thrive on social media sites. Teenagers love them and to ignore them is folly.
But you just have to put all this in perspective. It's not as universal as many of you would like it to be.
You do make some excellent points otherwise about people being used to advertising and accepting it. But that's about it. Given how bad most advertising is, people have learned to try and avoid it. I mean given the choice of watching a TV show with commercials and one without commericals, I think most people would opt for watching the one without commercials.
Posted by: Tangerine Toad
Great debate chaps.
heres the thing.
speaking as a non-geek (no particular Web 2.0 axe to grind) and on the fringes of advertising (interactive tv extended 'ads'- check my website if your interested) - in simple terms, what we are seeing through the influence of these alternative channels is a shift towards open-ness, honesty and integrity being a fundamental requirement in communications (both ways). Sometimes people (or consumers in ad speak) want to participate, sometimes consume. Whats been the eternal problem with advertising is its foundation on lies, essentially. Thats why people avoid it. Moving away from that can only be good in my book.
And another thing, lets have some bloody actors back on tv. Sorry if this is not clever clogs but i'm for keeping it simple.
Posted by: eaon pritchard
I work on a big US beer account. TV is their main medium.
From my POV, there are a lot of "truths" in this discussion. Networks are the Life Magazine of this era. The biggest overall numbers. But so wide in their targeting, they are becoming less and less relevant. Cable gives us the more accurate rifle, a more effective weapon.
That being said, our work on the Super Bowl - the biggest "shotgun" of them all, produced 30 million hits online in one week. Eyeballs chasing our brand, instead of the other way around. A very pleasant bonus.
But overall, we've entered a new TV era. The viewer used to be the captive audience. Now it is we who are captive. Viewers allow us into their lives only if we deserve to be there.
And that's great. That gives us more leverage with clients everywhere to demand the chance to do more talk value, more entertaining work. No matter how "unique" clients think their brand position may be, what's gonna make them stand out is the quality of the content. Entertain and engage first, then sell - but only softly. Those are the new rules.
That is the new, exhilarating price of entry.
Instead of our clients demanding we "make the logo bigger,"
we now have license to tell them to "make the jokes funnier."
Someone earlier had said that, yeah, you can measure TV's being on during the commercials, but are they really watching?
Or are they hitting the can, grabbing a sandwich?
Research in a Business Week article broke down the types of advertising that is "actively ignored." Political, cars, cosmetics, retail, beer, etc...
The average commercial was "actively ignored" by around 50% of viewers. Most fell within a range of 70% ignored to 40% ignored.
Beer commercials were actively ignored by only 6% of viewers.
When there's an expectation of being entertained, viewers pay attention.
And I agree with someone's point about online, people don't want to be advertised to either. So that's no great salvation either.
Anyway, my two dozen cents.
And P.S. I don't do beer advertising with jiggly models in swimsuits or any other kind of cheesecake crap. So, please hold those comments.
Posted by: kg boughton
