Monday, September 15, 2014

Mobile, The New Out of Home Medium


These days mobile advertising is hot. The growth rate of mobile is a bit hard to track but it appears to be clobbering all other media types year to year. In spite of that, some advertisers and some small to mid-sized agencies are afraid to take the plunge. Others say that they tried it a few years ago, it did not work, so they have written it off as a consideration for 2015 media plans.

To me, part of the reason that people failed is that they did not know how to use mobile. Yet, they will need to and very soon. Facebook has reported that the average person uses their phone 100+ times per day (when I watch my students before and after class, it has to be higher for an under 30 demographic). This is where they are spending their time even when they are allegedly watching TV. No one leaves their home without their phone. They may forget ID or even a wallet but phones are now as ubiquitous as car keys. Missing people who are heavy mobile users is increasingly creating a big hole in any advertiser’s reach potential.

So mobile is now very clearly, to me, an out of home medium. We need to recognize it as such. Advertisers large and small are using it very successfully. For example, I was in a small local restaurant a few months ago and they had a five digit text code on tent cards on each table. You could review the service and the owner would get instant feed-back. If you participated, you were given a 20% coupon for a future meal. This was a great way for a  small player to get inexpensive research and promote at the same time. Others are adding mobile activation to menus or even small ads in suburban newspapers.

A friend in Texas sent me an e-mail recently that was fascinating. “I took my two sons to a Rangers game at the Ballpark at Arlington. The game plan was that it was going to be an expensive afternoon. I was prepared to buy a Rangers jersey for each of the boys favorite player. Well, we went up twice to get the jerseys and the line was long and the boys told me that they were missing the game. Then, as an ad guy, it hit me. They had my e-mail and phone number as I had bought the tickets on line. Why did they not have an app where they could reach me in the stadium and I could order the jerseys between innings without leaving our seats?” I found my friend’s comments interesting.

The next day I was reading Michael Dru Kelley’s new book, ALL THUMBS, Mobile Marketing That Works (Palgrave Macmillan, 2014).  He had a remarkably similar story about taking his son and friends to a concert and discussed how a two way exchange with concert goers would be great for the sponsor.

It would seem that mobile could be a great sales or marketing tool at many live venues. Been to a ball game lately? How many people are busy with their phones during a game? It is stunning to watch.

How about putting simple codes on old fashioned billboards? Or, with geo-targeting getting feedback on a great or poor retail experience. Those who participate get a  nice % off coupon and the few disgruntled customers get quick feedback which may turn a customer around a great deal.

For years, media planners have boasted that they craft strategies that reach people on the go. If mobile is not a real part of that mix, they have to be regarded as primitives today.

If you would like to reach Don Cole directly, you may reach him at doncolemedia@gmail.com

Thursday, September 4, 2014

Spot TV And The 2014 Elections


The past few months have not been kind to most forms of television advertising. Even the fabled “upfront” market in network TV was weaker this time around with some clients switching to more digital options with video online ads and others simply holding back money to allocate at the last moment.

The local TV market has been interesting. There are some parts of the country that are doing just fine. The energy boom in the plains states and stretching down to Texas has insulated them from the soft marketplace and a few pockets in the Southeast have done nicely as well. Many markets (Nielsen DMA’s) are down double digits from last year and station managers and sales executives scoff when they hear signs that the economy is recovering slowly but surely.

Well, some markets are about to get a much needed shot in the arm. Between now and election day on November 4th, some $2 billion dollars is about to be injected into local marketplaces for Senate and House of Representatives races alone. The problem with that is that the money will not be spread out evenly.

Only 35-40 of the House seats are really strongly competitive races so the impact of heavy spending will not be felt nationally. The U.S. Senate, which could conceivably return to the Republicans, are the races where the big bucks are being spent. Right now, the Democrats have a precarious hold on five seats that could go either way in two months. They are in Alaska, Colorado, Arkansas, Louisiana, and North Carolina. Should the GOP run the table on those five races, they would almost certainly take back the U.S. Senate. Even Mitch McConnell, minority leader from Kentucky, faces a stiff reelection bid in the Bluegrass State.

Here are a few verbatim comments that I received from broadcasters across the country:

-- “Business stinks right now. We do not even have a Senate seat up this year so our political billing will be modest. Station ownership is putting real pressure on me. There is little that I can do until confidence returns.”

-- “I am way down for the year but I do have a juicy battleground Senate race. That will bail me out for the fourth quarter. Years ago, we considered political advertising a royal pain. Now, I admit I pray for it every other year.”

-- “Okay, so I will finish the year fine due to a hot Senate race with record-breaking  spending and a reasonably tight Governor’s race. What do I do in the first quarter, 2015?”

-- “My station group told me to get political money. We are a one party state. I do not remember the last competitive race that we have had. The sure winners only spend token amounts and they are doing more on the internet this year.  Only a miracle will save me for this year.”


Looking ahead two years, campaign strategists with, by then, ever more improved targeting techniques will probably continue to cut back on TV usage. And fundamentally, more advertisers are pulling back on TV in general shifting to online options, which are often video, but not conventional or even local cable TV.

Things are changing. The biannual political bailout for local TV stations seems set for an irreversible decline.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Friday, August 29, 2014

Beyond TV Commercial Avoidance


For the last few years, every several months I have posted something about the topic of TV commercial avoidance. Essentially, the argument goes like this: TV is not working as effectively as an advertising medium as it did a decade ago.  Reasons appear to be that nearly half of viewers have a time shifting device and tend to skip commercials during replays, a huge group (varies by demographic) is using another device while viewing (laptop, smartphone, or tablet) and misses many or most commercials, and  video options such as Netflix and Hulu or Hulu+ eliminate many TV spots. I still get push back from some creatives at agencies and a few broadcasters who say that if one creates a better commercial people will flock to it. To me, this is a child’s dream in the world of 2014. May I suggest that you leave it to the children?

I think that over the last few years that I have said enough about commercial avoidance. It is here to stay and will only increase given usage patterns and the addiction to mobile devices especially among the young. So, the realists out there at advertisers, agencies and broadcasters need to accept it but not give up on their medium. The new goal of the ad industry should be to get people to PAUSE on TV spots. Yes, the avoidance or ad skipping will always be there. You have to accept that. Focus on using technology to make TV work better for you. Right now, most TV advertisers simply send viewers to a brand website or Facebook page. Many, if not most, are generic and do not really relate to the specific commercial or campaign they just witnessed.

With mobile being the growth medium of the next decade (more on that in upcoming posts), advertisers need to use their TV spots to engage with it. The key is what many have dubbed “mobile activation.” Instead of sending a TV viewer to a sterile brand website, put some creative calls to action in your mobile efforts linked to responses from your TV work. Also, some now have a text at the bottom of the TV screen that offer coupons or special offers that you can activate with your phone. You will find over time that mobile activation can target consumers much better in terms of likelihood to buy and also find those who respond quickly.  Others are putting their long form You Tube videos on mobile which people can see when they respond to the TV spot.

The technology will keep getting stronger and the opportunities are boundless. Clearly, TV is weaker than it has been in past years. So, stop fretting over commercial avoidance or denying it and use TV and mobile as complimentary vehicles.

Much more to come on mobile.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com



Monday, August 18, 2014

Inconsistent Consumer Behavior


In economics, you often see statements such as “assume the consumer acts rationally.” This is the underpinning of many articles and predictive models. If you observe behavior of consumers you will find that they do not often appear rational. Often people seem to be of two minds and say one thing and do another. A growing area of economic study is Behavioral Economics which accepts that people do not always act rationally with consumer decisions. The field is perhaps best described as where psychology and economics meet.

Here are a few examples that I have observed of inconsistent behavior:

1) Way back in 1971, I was finishing college and spent a summer handing out state motor vehicle inspections among other tasks at a service station. We were the largest venue in the county for inspections so some days were busy as I filled out the forms and handled billing. A woman dropped off her car one morning and said, “Do whatever is necessary to pass the inspection. Call me if anything else is wrong.” The mechanic went through the state checklist and the car was in fairly good shape. A turn signal was out plus it needed a PCV valve. When the lady came to pick up the car after work, I showed her the invoice and she exploded. “What is this PCV valve for $4.95? I did not ask for that.” I explained that it was a pollution control device and was required by state law. She slammed her purse on the desk but paid the freight and left in a huff. As she pulled away, I laughed out loud when I saw her bumper sticker which read, “We support a pollution solution.”  Fast forward 40 years. I am finishing a lecture about Public Relations fumbles and I use the BP Oil spill in the Gulf of Mexico as a case study for poor handling of a problem during early days of the crisis. A young fellow raised his hand and gave a long speech about how evil oil companies were. I smiled and said that someone must have liked them as several hundred million people around the world enjoyed using their products. He shook his head and said, “Everyone hates everything about them. They are thieves.”  That seemed like an opportune time to wrap up the class. It was evening and several of the youngsters, including the oil expert, walked with me to the parking garage. When I reached my car, the angry man said, “Prof, what is a man like you driving a tin can like that thing.” I told him that I actually owned two Priuses  and, that after several years, I was still getting 47-50 miles per gallon on each. He shook his head and headed up one floor above to get his car while I continued to chat with a few of his classmates. Two minutes later, my young friend came by in a 4 wheel drive pickup truck. He lowered the window and shouted out, “I get 12 miles to the gallon,” laughed, and drove off into the night.
 
    For years, I have seen people preach against climate change, pollution, or oil company excess yet live their lives quite differently.

2) Often people tell me that they hate the big box retailers and wish the days of the small local businesses would come back. Some say that they avoid Wal-Mart and Target. I asked one such person whether a certain book might be available at a local bookseller. “Are you crazy, Don? Get it on Amazon. It will be cheaper, you can beat the sales tax, and will be at your door in a few days.” What these people do not seem to understand is that every time they use Amazon, they undermine small local businesses who cannot buy in bulk and compete with Amazon. Additionally, Amazon even hurts Wal-Mart and Target.
 3) “I hate Wal-Mart”--if you travel even occasionally in progressive circles, it is the height of fashion to trash Wal-Mart, the world’s largest retailer. They are all that is evil  in American business in the minds of many people. They do not pay entry level people well, resist unions, and have problematic health care coverage for their associates. How did they get so big? It is pretty simple--they gave people what they wanted at a very attractive price. If people truly do not like Wal-Mart, the way to hurt them is to simply stop shopping there. It amuses me that some towns brag about how they have kept Wal-Mart out of their communities. Wait for the weekend, however, and the roads are clogged to the town a few miles away that has a Wal-Mart. Today, Wal-Mart is struggling as the truly downscale find it expensive and some have moved on to the Dollar Stores. Others are doing more shopping on Amazon and fellow on-line travelers and this is hurting Wal-Mart at the upper end of their demographic appeal. People may want Wal-Mart employees to be paid more and have better insurance but, at the same time, they also want the very low prices that it currently offers. Many do not understand that they cannot have both.

These are just three examples of the inconsistency or hypocrisy of many American consumers. If you are a marketer, be careful. Consumers do not always act rationally so  watch what they do instead of what they might say.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Friday, August 8, 2014

Revolution Now!


Several decades ago I was an earnest young undergraduate student majoring in Economics. My favorite courses were History of Economic Thought and Economic History. One branch of economics that fascinated me was Austrian Economics. No, it was not the study of the small middle European country but the school of thought did originate in Vienna. Essentially, the Austrian school favored a pure free market approach with as little governmental intervention as possible. Their 20th century leaders were Ludwig von Mises and nobel laureate F.A. Hayek, both educated in Vienna. In America, a more strident disciple emerged named Murray Rothbard who called himself an Anarcho-Capitalist.

What intrigued me was that they saw economic theory as largely QUALITATIVE. They dismissed mathematical models on the basis that human beings and the general market were too complicated. With several billion people out there, all with different hopes and dreams, likes and dislikes, how can a model of an economy work and allocate resources properly? Also, planned economies such as socialist oriented command economies were doomed to failure. Mises called economics the study of human action and thus modeling was just not viable given behavioral issues.

Well, they were certainly write about socialism as capitalism won the battle by the 1990’s. In my career, I often thought of the Austrians when it came to media and marketing issues. People did scads of research yet most new products failed (and still do). Network programmers go through many levels of review and shoot pilot films yet approximately 70% of shows do not get renewed for a second season even though consumer testing is often extensive prior to the premiere. Each year, and 2014 was no exception, marketers and their agencies placed huge billion dollar bets in the upfront TV marketplace even though virtually all will admit that it is a (slowly) dying medium.

If you watch things carefully as many of you do, it is obvious that much of this failure is going to be lessened and soon due to our emerging era of Big Data. In the last week, several people wrote to me about the speed of change and what it meant. Two standouts were:

1) A senior media executive wrote “I had just been part of an “Addressable to the home” advertising experiment.  A client’s mailing list was matched with an MSO subscriber list resulting in a matched target group. The viewing data from that list was aggregated from actual STB data.  New ratings were created based on the value of those networks viewed and schedules were placed”.
2) A long time agency media maven said “Google and Apple along with Facebook are most likely the largest data gathering companies in the world. And, they are doing so to better target future revenue...with the greatest share from advertising. Google just recently purchased NEST, a programmable thermostat company. They are doing this so they can gather more info about your habits inside the home, as well as when you are reaching out to your home via your mobile device. This data ultimately will help them to sell more advertising”

There is no question that pin-point messaging is upon us. This has to improve marketing performance as clients as desperate for authentic accountability from their agencies and the media. There is definitely an element of “big brother” here and there will be some short term security risks with hackers breaking in to sensitive databases that can literally tell marketers where a prospect is.

Long term, however, there will be no more comments such as the time honored, “I know that half of my advertising is waste--I just do not know which half.”

All of this spells trouble for what is left of mass media. And, attentiveness, even in high priced and high profile sports, is declining. A young media supervisor wrote to me recently saying that no one appeared to watch a single commercial during a party he attended where his alma mater while trying for a bowl bid. “Everyone was on their smartphone looking up better statistics than ESPN could provide. I even noticed this at baseball games this summer where it seemed thousands were on their Smartphones in the stadium. We are wedded to our devices even at live events.”

As usual, change will not happen overnight. The rate of change, however, has clearly sped up. The old guard of 50-65 year olds who think that the status quo will stay in place for several more years are living in a dream world. Big data is coming, faster than we thought even a year ago, and it appears that nothing can derail it.

Finally, if we can forecast Consumer Behavior with Big Data, maybe economic forecasting will get a lot sharper and my beloved Austrian economics will be proven wrong about 21st century modeling.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Sunday, August 3, 2014

Are Apple and Google Media Companies?


Last week, I had a very lively e-mail exchange with a very seasoned broadcast executive. At one point, he asked me what organizations would be the leading media companies 10 years from now. My answer will not surprise you. I said that forecasting was always risky but “the two tech giants, Apple and Google, seem to be the prohibitive favorites.” His response floored me. “Don, those are not media companies. Google is an aggregator and a utility and Apple is a high tech device maker.” Trying to be understanding, I gently asked, “Did you mean which companies would be on top among the legacy media companies such as Disney, Comcast or Fox?” “No, I mean overall,” he responded.

Back and forth we went. My argument was that I can understand how you could look at Google as a utility just as some see cable TV as one. Yet, when over 90% of your revenue comes from advertising as it does with Google, it has to be considered as a media company.

To dismiss Apple as a “high tech device maker” was also questionable to me. Yes, they continue to score with their high end i-phone and their refreshed i-pad plus Apple TV is looming out there and appears ready to pounce.  The i-watch may debut in October and i-TV is also likely in 2015. The old boy (14 years younger than I!), was buying none of it. He did, however, permit me to quote him in this post.

Look to the future a bit, my friends. To me, both of these tech behemoths are natural platforms for a post-broadcast world. For the moment, Google organizes and manages content but does not produce much. That could change. They bought YouTube way back in October, 2006 and have yet to fully exploit its global potential. They could use it as a platform for a global TV network and advertising powerhouse if they wished. If they lost a few hundred million on the venture, they would barely notice.

Apple has a great eco-system for the future. A friend, who is a creative chief, told me his goal for 2015-16 is to work on more apps than ads. Rumors abound that Apple TV may soon be running all their apps on it. If mobile is the future of advertising as I believe it well may be, then Apple has the wind at its back.

Also, what about acquisitions? Both of these giants have untold billions of dollars in cash. Apple has used some to buy back shares and pay a dividend. Google is playing it closer to the vest although both companies have billions overseas that they cannot repatriate without strong tax consequences. Even then, either could snap up very large legacy media companies with existing cash. Why don’t they? They probably do not see the value in them as the media and advertising worlds continue to evolve.

So, what do you think? Who will emerge as the leaders a decade from now? Are these giants media companies or not?

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Thursday, July 24, 2014

Technology Will Triumph!


Every day it seems I receive “gloom and doom” direct mail pieces or e-mails from a wide variety of 21st century Cassandras. Oil will hit $200 a barrel by Christmas, the stock market will drop by 70%, World War III is imminent, the dollar will cease to be the world’s reserve currency (by next month), pollution will overtake us shortly, and mass starvation is right around the corner are some of the messages that I have received in recent months.

I generally toss the direct mail missiles into the shredder and delete the e-mails. Why do I keep getting them? It appears that someone with a profile somewhat similar to mine is responding.

Let’s face it. We live in a troubled world. Geo-political tensions abound, ignorance and injustice are widespread, leadership across the globe is suspect and many economies are fragile and debt grows and too much money appears to be printed. It is easy to see how the gloom and doom crowd draws response. Yet, to me, they forget one big thing--Technology.

No, technology will not help us find world peace but it will ease many problems in the years ahead. Just look at a few industries and see what is going on:

1) Energy--until 18 months ago, it looked as if we may be running out of oil across the world or at least oil that could be tapped consistently and safely. That is changing fast. The domestic oil boom is helping our balance of payments and creating good jobs. Technology is making a dirty business safer and less impactful on climate change. The Canadian oil sands were often attacked for their water usage. Now, new technologies allow the companies to recycle almost all of the water. Even coal may look better. A few companies are experimenting with CO2 capture systems in coal fired electricity generation, sending the CO2 to natural gas fracking sites where the CO2 will be propelled into reservoir rock and gas can be tapped. Lots will happen in natural gas and solar and wind power will not stand still either. A windmill today generates, on average, 100 times the power of one produced in 1980. People used to say that geology would trump demographics in energy production and long term shortages would occur. Today, many are stating that technology will trump geology and cleaner and abundant energy is on the way to us.
2) Medicine--when I look back on my life it is stunning to consider the advances that have occurred the last few decades. All of know people who are alive due to procedures and gains in medical technology that did not exist until recently.
3) Agriculture--this is going to be a boom area. It has to! With a billion more people coming on board our little planet in the next 15 years, we will need to feed them. Better fertilizers, use of water, and farmer training should translate to better crop yields.
4) Water--approximately half of the people on earth are currently hospitalized due to drinking bad water. Non-chemical purification techniques along with mineralization technologies with provide water that is clean and tastes great, too. The amazing health benefits will more than pay for an upgrading of infrastructure needs around the world.                                    
5) Media--our field will continue to evolve. The big area will be in what we now call mobile and specifically in applications. Our lives are made easier every day by mobile apps that help us shop, not get lost, send messages, research almost anything, and always stay in touch if we wish. Today, many advertisers boast of pin-point targeting. Well, they ain’t seen nothing yet. Imagine marketing 10 years from now when you can slash wasted audience from current levels and customize messaging far better than you can dream in 2014. The game will change but advertising and communication efficiency will soar.

So, do not get discouraged. Read the gloom and doomers; sometimes they say things that come true and the good ones make you think. Remember, always, however, that the human spirit will always be there and technology will move relentlessly toward a better life.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com