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Saturday, July 25, 2009

Local TV Copy Lengths--Is There a :05 in Your Future?

The thirty second television commercial or :30 is still the dominant player in U.S. advertising world. But, some recent events increasingly indicate that its reign may be a bit shaky.

One of the problems, not surprisingly in 2009, is the continued growth of time shifting devices which we will collectively refer to as TiVo. As TiVo grows, fewer and fewer people see commercials. So, television becomes less and less effective although it still remains a powerful selling medium.

Months ago, in this blog, I mentioned how what took 1100 rating points in a certain TV daypart mix seven years ago to move the sales needle for a client of mine required 1400 points for similar results two years ago. It is hard to get precise today with the very weak economy but I would bet that there is a fairly direct causal link between TiVo penetration in a Designated Market Area (DMA) and local TV effectiveness. A recent study indicates that TiVo penetration, now at 33% nationally, but higher in some markets, could hit over 50% in 36 months. If that happens, the TV model that has sustained so many of us for so long will start to fall apart. When the Wal-Mart shopper and people of similar demographics starts editing out commercials in a big time fashion, our game is in the late innings.

What does this have to do with :30’s? I would say quite a lot, actually. Video games are not my favorite thing. But, they have trained an entire generation or two of young Americans to focus and react with lightning speed. People seem to be able to absorb things a bit faster which lends itself to shorter copy lengths such as 10 or 15 second commercials. Couple that growing facility with the remote, which most of us can use quite well to graze across the cable or satellite landscape in a two minute commercial break. Finally, add a TiVo which allows you to zip through commercials in a program that you have taped. Speed is the thing these days. Increasingly, many many people are getting very hard to reach with a standard 30 second commercial especially if it is embedded in the middle of a two minute break.

When TiVo was beginning to make some headway about 7-8 years ago Honda developed five second spots that were said to be “Tivo proof”. The :05’s played at the end of breaks so when TiVo snapped back after you jumped the commercials you would usually see the entire :05. If you look closely and ask around a bit as I have, you will find that shorter length spots are beginning to find their way all over the broadcast landscape.

Polling stations around the country yielded some interesting things. In smaller markets (under DMA rank #50) broadcasters said that they do not get many requests but are formatted to handle :10’s, of course, and many will do :07’s. In larger markets, people have been running :05’s for several years. A few run :01’s, :02’s, or :03’s as well although most describe that as a branding or reminder message. For some like Coca-Cola a :03 or a :05 might make sense as everyone knows who and what they are.

Many see the :05’s as a way for cash strapped advertisers to slip into Primetime that they could not normally afford. But others say they are hearing rumblings about the “TiVo effect” from some local players who want their spot to be seen. One broadcaster in a surprisingly small market told me “First quarter, 2009 was a disaster. A couple of people asked to do :05’s and one guy wanted to do a :02. I grabbed some of our station promotional time and did whatever they wanted. I was still way below budget for the quarter but they helped me pick up some ground. And, the clients were happy and thought that the brief spots worked.”

I also heard from a production house chief who produces hundreds of spots per year for a stable roster of clients. Our paths crossed 30 years ago and we have become reacquainted as he reads Media Realism.:) The guy has deep experience and is irascible, imaginative, has great passion and a superb work ethic. He also has a boatload of common sense. His take is “you have to accept that TV is now a billboard and place your logo and image so that it repeats or stays constant when “Tivoed”. We use close to all :15’s these days which increases our Reach & Frequency without raising expenditures. Smart stations will start selling 2-3-4-5 second spots in their promo breaks. We use :05’s sometimes and they work! TV is not going away; it is simply getting quicker.”

Now, please understand that we are not saying that in two years a two minute break will consist of 24 five second spots. But, it appears that something is happening. This leaves some local cable players in a bad spot as they get two minutes an hour from New York on most channels and have little leeway for unorthodox or imaginative lengths. Conversely, two distinct Regional Sports Networks (RSN) have told me that they are experimenting with :05’s which is relatively easy for them as they control their own programming.

Also, if we do move to shorter copy more of the time, it seems to play into another theme that Media Realism has been talking about in recent months. Entrenched players have a big advantage over newcomers to a field as they have high name recognition. If brief spots have a higher likelihood of being seen they are using their money better than new players who have to explain who they are in a conventional :30 which will not always be seen in its entirety.

When a newspaper once falsely published that Mark Twain was dead, he responded by saying that “the news of my death is a bit premature.” Don’t write off the :30 completely yet, but it days appear to be numbered. If you buy spot TV, experiment with other copy lengths now!

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

Monday, July 6, 2009

Six Month Check-Up

It is a pleasure to report that Media Realism has just celebrated an anniversary—we are six months old. Here is a brief status report on where we are:

1) 99% of the responses to the blog have come directly to me at doncolemedia@gmail.com That is entirely understandable as many people do not want their management or underlings in some cases to see what they are writing. All correspondence is handled in strict confidence.
2) A day does not go by where I do not receive an e-mail from someone asking if they may pass the link on. Hey, this is a blog! Please pass it on to as many people as possible. The link is mediarealism@blogspot.com
3) I have received a few thousand e-mails since I began the blog and I read every one. Sometimes time does not permit me to provide a lengthy response but I do appreciate every comment.
4) Some have asked that I quote more people directly but very few people are comfortable going on the record in today’s climate.
5) Several have asked to join my panel. I often toss a possible topic and ask for thoughts a few weeks prior to publication to my select group of agency and media professionals. The panel is going to be expanded and if you would like to be a member, send me an e-mail. I will continue to strive for geographic and media balance among the panel’s membership. No panel member is ever identified publicly so each person can speak with complete candor.
6) Many people would like me to do more interviews. I would as well but again it is difficult to get executives to speak on the record for a forum such as this. Weeks ago, I tried to do a post on the future of small and mid-size agencies and principals of such companies would not go on the record. We are working hard to find some topics that might work. If you are brave enough to speak for the record, please let me know.
7) From time to time, I receive requests for a post on a particular topic and I have followed through a few times with a story. But remember, I call them as I see them.
8) People are quoting Media Realism in articles and sometimes media plans. This is very flattering except that in some cases reported to me they take entire passages from a post without citing where it is from. Joe Biden got away with plagiarism and became Vice President of the U.S. You might not be so lucky.
9) The posts generating the most response to date have been the following:
a. “Nothing Can Replace TV and It Almost Has” (2/17/09)
b. “The Lament of the Salespeople” (3/30/09)
c. “Local Cable’s Glowing Twilight” (4/7/09
d. “Jennifer Aniston is 40! ( a study of demographics on 4/23)
e. “The Trouble With Nielsen” (5/20/09)

If you are fairly new to Media Realism, you may want to go back and check out some of these earlier posts. Finally, to me the defining post for the blog was published on 1/16/09 and is entitled “The Elephant in All Our Offices”. It addresses the issue that people simply are not seeing commercials nearly as much as they used to and that the media do not work as effectively as in the past. Here it is:

THE ELEPHANT IN ALL OUR OFFICES
Each morning as we stumble in with our coffee and turn on our computers, there is an elephant in our offices. And, it gets bigger every month. We get wrapped up in our day and often ignore it completely despite its size. The elephant, of course, is DVR penetration and usage.

First, let's step back several years. At the turn of our new century, I was asked to speak at an industry gathering and it was requested that I finish the presentation by making a few predictions about the future of media. So while the Internet was on everyone's mind, I did cover that arena. But, I finished with a forecast about Digital Video Recorders (DVR) which were then generally referred to as TiVo and occasionally as time shifting devices.
My forecast was pretty straightforward. I said that "when DVR penetration hits 40%, television will cease to be the powerful advertising force that is has been the last 50 years." Even though the crowd was largely made up of broadcast and cable people, no one was really upset. At the time, DVR penetration was hovering around 4% and TiVo, the company, was struggling financially. During Q& A and in conversation with participants after the meeting, the discussion centered on whether DVR penetration would ever get that high or would it take 15 years or so. There were few concerns among the crowd and we parted very amicably.

Fast forward back to January, 2009. Nielsen now pegs DVR penetration at 28.9% nationally. This may be slightly below some of the futuristic forecasts made but a seven fold increase in eight years is impressive. And, as always, Nielsen tends to lag a bit in monitoring penetration levels.

The real story is not that nationally we may have already crossed over the 30% threshold. It is what is happening in key local markets. Nielsen currently pegs Dallas-Ft.Worth at 37.2%, Los Angeles at 38.2% and Orlando at 38.8%. Any or all of these could be over 40% in the real world.

Was there anything sacrosanct about my 40% tipping point that I forecast so long ago? Not really. It just seemed to be common sense. When you are effectively having the potential to lose 40% of an audience, particularly in key prime-time shows, yet still pay a premium for them, something has to give. Also, the early adapters to a new technology tend to be marginally more affluent than the rest of the population and certainly are open to new ideas. So, they are often your best advertising prospects.

Agencies have reacted somewhat childishly to the impact of DVR's on the marketplace. Some say proudly that if one makes a better commercial people will stop in the fast forward process and watch it. Hmmm. Do you really think time challenged people, particularly working moms, are going to go back? They are incredibly time deprived and, to me, the real heroes of our society. Saving 15 minutes by using a time shifting device gives them back perhaps their most precious perishable commodity—time.

Others say that they are loading up with more sports because everyone watches them live and the interest level is intense. I admit that rabid fans often call or text each other during a game so watching it live is imperative for them. But more casual fans tell a different story. Anecdotally, several men have told me that they now tape football games each weekend and spend more time with their children. One said "it is amazing how fast you can go through a football game if you only want to see the action." Another gentlemen, in the southeast, told me rather sheepishly that he now spends Sundays, shall we say, renewing his marriage vows with his wife. His wife is thrilled that he no longer spends a dozen hours on the couch on fall weekends swilling beer. He still gets to watch his football so both are happy. As more granular data comes out from set top box samples, I think you will find that the real world premium for sports advertising may be higher than any of us dreamed.

Finally, Nielsen has come to the aid of advertisers and their agencies with their live +3 and live +7 rating calculations. Give me a break! Certainly, some people tape shows and play them back in their entirety. But that number has never been high and has to decline a bit each day.

To those readers who cover a local market beat as I have for many years take a look at sales performance. I am willing to bet that even prior to the recession it took more rating points to move the sales needle in a market such Dallas-Ft.Worth or Los Angeles than it did a few years earlier. DVR's plus some help from trigger happy viewers with a remote in their hands have forced local advertisers to spend 1400 rating points in a flight to replicate the sales performance that they used to get with 1050. It will only get worse as DVR penetration grows.

Today, I do not have any specific solutions but will cover some ideas in upcoming posts. What I can tell you is that people need to stop the mindless and endless arguments about daypart mix issues and start planning a long term strategic withdrawal from broadcast. It may only be 15% of the current TV budget allocated somewhere else for 2009 but the train has left the station.

Act now and protect your brand!

Thank you again for your interest and support. I enjoy staying in touch with hundreds of you and have made some new friends with the blog as well.

Don
doncolemedia@gmail.com

Wednesday, July 1, 2009

"I've Got Relationships"

Over the years, I have interviewed hundreds of people for a variety of positions ranging from entry level to senior executives. About 20 years ago, a term started to creep into all too many interviews.

The term is “I’ve got relationships.” Recently, I was screening candidates for someone and I asked how the candidate would deal with the emergence of new media. While I was asking the question, she was shaking her head vigorously and answered “I’ve got relationships”. I controlled my temper and asked what relationships had to do with deciding on the proportion of conventional media to alternative media. She started to answer but then dismissed me saying that she had the best relationships in the marketplace and that is what mattered in media. Needless to say, I dismissed her. :)

Whenever I hired anyone who used relationships as their strongest selling point, I always paid for it. After a year or so, my team would discover that the person with the great “relationships” was taking station junkets meant for clients without telling me. And, others let their contacts handle all make-goods and billing problems without any give and take from our side. For a while, then, to me, relationships became being in the media’s pocket.

Are relationships important? Absolutely! I would argue that over the next few years good relationships will take on even more significance. As conventional media is less effective, a great camaraderie with the media will help both buyer and seller as they both enter uncharted waters of new platforms and media mix opportunities (I will discuss this from another angle when we discuss TV copy lengths in an upcoming post).

If someone keeps harping on the relationship angle in an interview, may I suggest the following: Call people beyond the references you are given. If someone is a “taker” meaning trips, tickets, junkets, or frequent expensive dinners it will come out. Also, if they favor one station in a market over others with better rates or service that will smoke out as well.

Simple technical questions or philosophy of negotiation should never be swept under the rug with the “I’ve got relationships” cop out. No matter how good your relationships are it does not help you much if you should have used radio instead of TV where your friends reside. Or, if your clients needs call for 50% digital and you stick with a plan from a previous decade.

Also, people need a sense of the future as we go through the coming upheaval. If you only talk to the same old contacts and cut the same old deals, you are going to be left behind. For years, I have always struggled to define what I looked for in a person to be a great media pro. If I had to define the quality that I am looking for it would be “restless imagination.” If may sound a bit flowery but it sums up what you need these days. You have to be thinking about how to cope with changes. If you win the night in prime, you still may only have a 2.5-3.0 rating. Okay, you won the night or you bought the biggest spot of the night, but what were the other 97% of the people in your market doing at that time? Try and find someone who can do the basic blocking and tackling well but who also tries, even struggles, to look ahead.

As the great Bill Bernbach once said, “When you are through changing, you’re through.”

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