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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

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