A few weeks ago a friend and Media Realism panel member sent me the following: “Don, what do you make of this? In the 08/09 season, television viewing in the US reached an all time high, up 4 minutes from the prior season and up 20% from 10 years ago according to Nielsen. The average household in 08/09 watched 8 hours and 21 minutes a day of television on average, which is an all time high as well. Why is television viewing at an all time high in a world with videogames, DVD’s, computers & internet, etc?”
I gave him a quick answer but promised this post to provide a more measured response. And, those of you who know me, brace yourselves. I will actually say something nice about Nielsen!
Many of us have been surprised over the years as TV viewing continues to go higher and higher. Part of it can be explained away by an aging population but with so many gadgets at our disposal and non-TV video options, the recent small move to a new plateau was surprising.
Here is my theory—Last Friday, the government excitedly announced that the official unemployment rate had dropped from 10.2 to 10.0%. Every believer in Obamanonics cited this as proof that the economy was on the mend and prosperity was around the corner as Herbert Hoover (sic) once said. Well, my take is a bit different. Yes, any decline in unemployment is welcome news and no one is cheering for a rebound next year more than I. But there are structural issues out there that indicate that things are still not great and the Nielsen annual data may be an indicator as well.
There are a handful of apocalyptic analysts out there who say unemployment is not 10% but closer to 20%. They exaggerate but make a good point. The real rate of unemployment is much higher than 10%. It does not include the following people:
1) Those whose unemployment compensation has run out.
2) The long term unemployed who are so discouraged they do not look for work anymore.
3) Recent graduates who cannot find jobs, live with Dad and Mom but are in no one’s statistics.
4) The young elderly who were downsized and began receiving Social Security on their 62nd birthdays.
5) Millions who work part time because they cannot find full time work.
6) The “underemployed” who make a fraction of what they once did but do a lesser job to make ends meet and have some form of healthcare.
What do all of these groups do? They watch a lot of TV. They cannot afford to do much else for entertainment. The Social Security Administration says that in the past year a record number of people applied for monthly checks. Why? They need the money and cannot find acceptable work. These early baby boomers include some who planned to retire that young, some who are burned out and wanted to leave but also a large group that knows few are going to hire a 62 year old in a meaningful job. So, they collect their checks and spend way too much time in front of the tube.
Here are a few more scary stats that make the case for record high TV viewing. Some 23% have negative equity in their homes (if they sold today, they would get less than their mortgage for it) and foreclosures continue to explode. The American consumer has never been further behind in virtually all yardsticks—mortgages, auto loans, credit card bills, and student loans. Finally, the saddest figures of them all—1 in 8 Adults are on food stamps and tragically, 1 in 4 U.S. children.
There is no shortage of things to do or ways to watch video other than TV. But directionally Nielsen is telling us something. People are stretched as never before in our lifetimes. They watch TV in record amounts because they have few options.
If we see TV viewing dip in late 2010 or maybe 2011 we have a very reliable indicator that the economy is truly on the mend.
Should you want to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, December 8, 2009
Monday, November 30, 2009
The Republican Bailout Package of Fall, 2010
After the November, 2008 elections the Republican Party was virtually given up for dead. The Democrats had not only captured the White House but added a few dozen seats to their House of Representatives majority and moved toward a filibuster proof 60 seats in the United States Senate. To those of us with long memories, it looked a lot like the mid-1960’s where the Republicans clout was at a low not seen since the 1930’s.
In recent weeks, things have changed and radically. The GOP won Governor’s races in Virginia and New Jersey and our new president’s honeymoon with both the press and the American public seems to be coming to an end. Some poll numbers are very telling:
According to a Washington Post/ABC News poll, 51% of Americans disapprove of his handling of the deficit. Gallup found that his job approval rating is 49%; it’s lowest yet. And, only 19% of voters believe that Mr. Obama’s health care reform will not add to the deficit as he is claiming. (That may be lower than those of us who believe in the Easter Bunny)
Incredibly, the party considered dead 12 months ago has, according to Gallup, a four point lead of 48-44% of those who identify as generic Republicans over Democrats. A year ago, the Democrats had a commanding 12 point lead with that statistic that most of us thought could only widen. Independent voters caused the generic shift and they now favor Republicans by 22 points.
What does this mean to the media world? Plenty! The Republicans, always great fundraisers, will break records for an off-presidential year in 2010. There are 40 House seats that are not in strong hands, particularly those won in 2008. Also, the Democrats have several Senate seats in jeopardy in states like Arkansas, Connecticut, Nevada, New York, Delaware, Colorado, and Illinois (we will give our fearless forecast on the races six weeks before the election).
Next fall TV stations and cable systems and some radio stations (who will see lots of action from the many hotly contested house seats) will benefit mightily. From Labor Day to Election Day on November 2nd things will look good for TV advertising in many, many areas.
My opinion is that the economic recovery (last quarter’s GDP growth of 3.5% has been “adjusted” to 2.8%) will emerge in the summer but be tepid at best. The political spending will be a very welcome and needed shot in the arm for local TV, Radio, and cable players.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
In recent weeks, things have changed and radically. The GOP won Governor’s races in Virginia and New Jersey and our new president’s honeymoon with both the press and the American public seems to be coming to an end. Some poll numbers are very telling:
According to a Washington Post/ABC News poll, 51% of Americans disapprove of his handling of the deficit. Gallup found that his job approval rating is 49%; it’s lowest yet. And, only 19% of voters believe that Mr. Obama’s health care reform will not add to the deficit as he is claiming. (That may be lower than those of us who believe in the Easter Bunny)
Incredibly, the party considered dead 12 months ago has, according to Gallup, a four point lead of 48-44% of those who identify as generic Republicans over Democrats. A year ago, the Democrats had a commanding 12 point lead with that statistic that most of us thought could only widen. Independent voters caused the generic shift and they now favor Republicans by 22 points.
What does this mean to the media world? Plenty! The Republicans, always great fundraisers, will break records for an off-presidential year in 2010. There are 40 House seats that are not in strong hands, particularly those won in 2008. Also, the Democrats have several Senate seats in jeopardy in states like Arkansas, Connecticut, Nevada, New York, Delaware, Colorado, and Illinois (we will give our fearless forecast on the races six weeks before the election).
Next fall TV stations and cable systems and some radio stations (who will see lots of action from the many hotly contested house seats) will benefit mightily. From Labor Day to Election Day on November 2nd things will look good for TV advertising in many, many areas.
My opinion is that the economic recovery (last quarter’s GDP growth of 3.5% has been “adjusted” to 2.8%) will emerge in the summer but be tepid at best. The political spending will be a very welcome and needed shot in the arm for local TV, Radio, and cable players.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, November 24, 2009
No TV; No Problem!
Earlier this year, we had a dispute with a well known television provider. My wife cancelled the service and after Digital D-Day, we realized that we had no TV of any kind. We did not move quickly although we looked in to satellite services and a new cable competitor. As the weeks rolled by, we found we did rather well without TV and still were avid users of video. Today, we discuss our several months of TV free life.
There were absolutely no withdrawal pains. My wife in our thirty years of marriage has been the lightest TV viewer that I know. For me, it should have been tricky as I have certain interests that lend themselves to light but pretty regular TV viewing. And, as a media analyst, I need to keep current on programming. But, we found alternatives within a few days.
Hulu.com bailed us out by providing all of the current primetime programs that either of us watched with some regularity. We also became spoiled watching with the low commercial load. The Hulu.com option was there when we wanted it.
I am news junkie particularly of the business and political vein. Watching CNBC daily via streaming video actually enhanced my enjoyment. I only watched those interviews that I chose to and generally saw only a 15 second spot before each segment. Book TV on C-Span has long been a favorite but, again, I did not waste any time. I could go on-line and pull up any interview that I wanted. The same held true with MSNBC, Fox News, and CNN. I heard Meet the Press on the radio a few times as well.
There were two things that I missed. Some live sports just cannot be replicated and I missed the US Open Golf Tournament and Wimbledon Tennis (I saw Tom Watson’s valiant run as a 59 year old in the British Open Golf Championship in a restaurant while trying to chat with the owner who spoke almost no English). And, a summer without any baseball was annoying although I normally only watch an inning or two. What else? Turner Classic Movies! The great Robert Osbourne gives insightful commentary prior to each film. I learn so much even as an old movie buff that I sometimes watch his preamble and then do not watch the film if I have seen it before.
Netflix filled some holes as did getting an entire season of British mysteries or a year of an HBO series borrowed for free from the library. Of course, I saw no advertising under that scenario.
Many college students that I have spoken to watch very little TV but, like me, they watch a good bit of video although their choices were significantly different than mine.
Also, I must add that when we traveled, we stayed a bit too long with The Weather Channel or Headline News after not having TV for so long.
To my friends and readers in broadcast and cable, I say categorically not to worry. Most people would not be willing or maybe able to do what we did for a few months. The exercise did show how much the world has changed. So much is available in our digital world these days and you get more flexibility and see far less advertising which may appeal to some. If more people go this route, it will likely spread rather slowly, but even if only a few hundred thousand do, it will be one more leak from the depleting reservoir of advertiser supported TV.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
There were absolutely no withdrawal pains. My wife in our thirty years of marriage has been the lightest TV viewer that I know. For me, it should have been tricky as I have certain interests that lend themselves to light but pretty regular TV viewing. And, as a media analyst, I need to keep current on programming. But, we found alternatives within a few days.
Hulu.com bailed us out by providing all of the current primetime programs that either of us watched with some regularity. We also became spoiled watching with the low commercial load. The Hulu.com option was there when we wanted it.
I am news junkie particularly of the business and political vein. Watching CNBC daily via streaming video actually enhanced my enjoyment. I only watched those interviews that I chose to and generally saw only a 15 second spot before each segment. Book TV on C-Span has long been a favorite but, again, I did not waste any time. I could go on-line and pull up any interview that I wanted. The same held true with MSNBC, Fox News, and CNN. I heard Meet the Press on the radio a few times as well.
There were two things that I missed. Some live sports just cannot be replicated and I missed the US Open Golf Tournament and Wimbledon Tennis (I saw Tom Watson’s valiant run as a 59 year old in the British Open Golf Championship in a restaurant while trying to chat with the owner who spoke almost no English). And, a summer without any baseball was annoying although I normally only watch an inning or two. What else? Turner Classic Movies! The great Robert Osbourne gives insightful commentary prior to each film. I learn so much even as an old movie buff that I sometimes watch his preamble and then do not watch the film if I have seen it before.
Netflix filled some holes as did getting an entire season of British mysteries or a year of an HBO series borrowed for free from the library. Of course, I saw no advertising under that scenario.
Many college students that I have spoken to watch very little TV but, like me, they watch a good bit of video although their choices were significantly different than mine.
Also, I must add that when we traveled, we stayed a bit too long with The Weather Channel or Headline News after not having TV for so long.
To my friends and readers in broadcast and cable, I say categorically not to worry. Most people would not be willing or maybe able to do what we did for a few months. The exercise did show how much the world has changed. So much is available in our digital world these days and you get more flexibility and see far less advertising which may appeal to some. If more people go this route, it will likely spread rather slowly, but even if only a few hundred thousand do, it will be one more leak from the depleting reservoir of advertiser supported TV.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, November 19, 2009
Who Will Join Rupert's Pay Wall?
There has been a lot of print and buzz lately about attempts to monetize on-line newspaper. This past week it really accelerated when Rupert Murdoch announced he will be putting pay walls on his newspaper sites.
Murdoch in an Australian interview was a bit coy about details. It could be a situation like The Wall Street Journal (owned by Murdoch’s News Corp.) where visitors may see the lead paragraph of a story gratis but then have to pay to see the entire piece. Ironically, when Murdoch first purchased the Journal a few years ago he suggested that WSJ.com be distributed for free. When he saw the revenue the subscriptions generated, he thought better of it. Now, he appears to want to expand some version of the Journal model across his entire newspaper empire.
I cannot say that I blame him. Despite rampant cost cutting, most major metropolitan newspapers are losing lots of money. They cannot cut much more staff and be viable. Early this year we talked about how investigative journalism in many small and mid-sized markets will soon disappear as publishers cannot afford to have reporters spending weeks hunting down a story. And, forget about the next Woodward and Bernstein to come along. There will be no one who can afford to subsidize such exhaustive digging into a story like Watergate. So corrupt mayors and city councils in many markets can soon rest easy and do terrible damage. It will be much harder to catch them going forward. Some say a loss of newspapers will be a serious threat to democracy. Others say that cable news will pick up the slack. Maybe nationally cable and network news can serve as a cop on the beat, but locally the sleazebags will have a lot more room to maneuver.
Setting aside that serious issue, what about the economics? In a beautifully written cover story in Time Magazine earlier this year, Walter Isaccson argued that on-line pay walls were vital to keep newspapers solvent. He argued that historically newspapers made revenue from newsstand, subscriptions, and advertising. However, on-line advertising is not enough to keep the papers solvent as hard copy sales shrink. Some form of “micro-payment” system could be put in place that could help newspapers survive as more people moved on-line. An example was 5 cents for an article, 10 cents for a specific day’s paper, and several dollars a month for an on line subscription. He also said that most people would not have a problem paying.
The execution of micro-payments is probably tricky. How do you handle thousands and thousands of 5 cent transactions? But the broader issue is the tough one for me. Everything that I have seen indicates that most people would have a hard time paying. They have received something for free for nine or ten years and now they are asked to pay. Most seem to just go somewhere else for their news.
Some publishers have tried some unique approaches. In my home state of Rhode Island, The Newport Daily News with a tiny circulation of 12,000 had a novel offering. If you subscribed to their paper in standard format (Monday-Friday afternoon editions plus Saturday morning) you paid $145 a year. Print plus on-line was $245 and on-line alone was $345. While daring, this to me is completely counter-intuitive. You are driving people to the format, print, that is dying! I wish my fellow Rhode Islanders well and applaud their bold experiment but I am profoundly skeptical of its success. They have guts but do they have the vision?
A friend and weekly reader of Media Realism tells me that pay walls can work only if some major players do it all at once. He gave me the example of how ESPN.com had a pay wall for certain content. Immediately, he went to Sport Illustrated (SI.com), loved what he saw for free, and does not feel a need to go back to ESPN.
His point is well taken. The Wall Street Journal put up the pay wall first and it was a stiff fee ($200+) that people did not have a problem paying. A lot of their subscriptions are corporate so people were not paying a few hundred dollars personally. And, let’s face it. The Journal is unique. Most truly serious U.S. businessmen feel that they must read the Wall Street Journal to keep up to date on the financial happenings in this country and the status of major corporations. When it comes to politics and world affairs The New York Times and The Washington Post have similar aficionados. But most papers, magazines, and websites are not imperative reads.
A personal example makes the point well, I believe. In recent months, people have written or called me and suggested that I charge a subscription for Media Realism. With a straight face I told my wife who immediately broke into uncontrollable laughter. We sat down and figured that excluding relatives and a few very close friends I might have 25 paid subscribers. This for a blog that delivers 1200 readers in a slow week and as much as 3300 when the topic appeals to a lot of people and they pass it on aggressively. I am not putting myself down and certainly not you, dear readers. The blog is great fun to write and I really enjoy the hundreds of comments that I receive from you. But, I am keenly aware that you have other places to go for media/advertising news and commentary in today’s world. And, unlike many newspaper publishers I am still quite solvent, thank you, and can publish indefinitely from my basement or sun porch.
If publishers erect pay walls all it will do is reinforce bloggers such as I and even encourage more Twitter which is really micro-blogging. Yet, the American Press Institute states that 75% of publishers believe that they can successfully charge for content. Many say by late summer of 2010, they will have pulled the trigger.
To me, sadly, it may be too little too late. Newspapers over the last decade never really acknowledged on-line as part of their product line. On-line ad sales were not good and they did not package it well with their traditional newspaper offerings.
Now the rush is to provide various monetization models. I wish the industry success but a lot more papers will have to go down before the pendulum swings back, if ever. One possible scenario would be a total industry wash out where hundreds of newspapers go down in the next few years and exist only as weak on-line vehicles. The blogosphere which can no longer lift free articles from newspapers will get so bad and opinion rather than fact based that people will throw up their hands in disgust and pay for content. But, I am still not sure. Local news may fade and cable network news will dominate. It seems a shame but the tidal wave of change is impossible to hold back.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Murdoch in an Australian interview was a bit coy about details. It could be a situation like The Wall Street Journal (owned by Murdoch’s News Corp.) where visitors may see the lead paragraph of a story gratis but then have to pay to see the entire piece. Ironically, when Murdoch first purchased the Journal a few years ago he suggested that WSJ.com be distributed for free. When he saw the revenue the subscriptions generated, he thought better of it. Now, he appears to want to expand some version of the Journal model across his entire newspaper empire.
I cannot say that I blame him. Despite rampant cost cutting, most major metropolitan newspapers are losing lots of money. They cannot cut much more staff and be viable. Early this year we talked about how investigative journalism in many small and mid-sized markets will soon disappear as publishers cannot afford to have reporters spending weeks hunting down a story. And, forget about the next Woodward and Bernstein to come along. There will be no one who can afford to subsidize such exhaustive digging into a story like Watergate. So corrupt mayors and city councils in many markets can soon rest easy and do terrible damage. It will be much harder to catch them going forward. Some say a loss of newspapers will be a serious threat to democracy. Others say that cable news will pick up the slack. Maybe nationally cable and network news can serve as a cop on the beat, but locally the sleazebags will have a lot more room to maneuver.
Setting aside that serious issue, what about the economics? In a beautifully written cover story in Time Magazine earlier this year, Walter Isaccson argued that on-line pay walls were vital to keep newspapers solvent. He argued that historically newspapers made revenue from newsstand, subscriptions, and advertising. However, on-line advertising is not enough to keep the papers solvent as hard copy sales shrink. Some form of “micro-payment” system could be put in place that could help newspapers survive as more people moved on-line. An example was 5 cents for an article, 10 cents for a specific day’s paper, and several dollars a month for an on line subscription. He also said that most people would not have a problem paying.
The execution of micro-payments is probably tricky. How do you handle thousands and thousands of 5 cent transactions? But the broader issue is the tough one for me. Everything that I have seen indicates that most people would have a hard time paying. They have received something for free for nine or ten years and now they are asked to pay. Most seem to just go somewhere else for their news.
Some publishers have tried some unique approaches. In my home state of Rhode Island, The Newport Daily News with a tiny circulation of 12,000 had a novel offering. If you subscribed to their paper in standard format (Monday-Friday afternoon editions plus Saturday morning) you paid $145 a year. Print plus on-line was $245 and on-line alone was $345. While daring, this to me is completely counter-intuitive. You are driving people to the format, print, that is dying! I wish my fellow Rhode Islanders well and applaud their bold experiment but I am profoundly skeptical of its success. They have guts but do they have the vision?
A friend and weekly reader of Media Realism tells me that pay walls can work only if some major players do it all at once. He gave me the example of how ESPN.com had a pay wall for certain content. Immediately, he went to Sport Illustrated (SI.com), loved what he saw for free, and does not feel a need to go back to ESPN.
His point is well taken. The Wall Street Journal put up the pay wall first and it was a stiff fee ($200+) that people did not have a problem paying. A lot of their subscriptions are corporate so people were not paying a few hundred dollars personally. And, let’s face it. The Journal is unique. Most truly serious U.S. businessmen feel that they must read the Wall Street Journal to keep up to date on the financial happenings in this country and the status of major corporations. When it comes to politics and world affairs The New York Times and The Washington Post have similar aficionados. But most papers, magazines, and websites are not imperative reads.
A personal example makes the point well, I believe. In recent months, people have written or called me and suggested that I charge a subscription for Media Realism. With a straight face I told my wife who immediately broke into uncontrollable laughter. We sat down and figured that excluding relatives and a few very close friends I might have 25 paid subscribers. This for a blog that delivers 1200 readers in a slow week and as much as 3300 when the topic appeals to a lot of people and they pass it on aggressively. I am not putting myself down and certainly not you, dear readers. The blog is great fun to write and I really enjoy the hundreds of comments that I receive from you. But, I am keenly aware that you have other places to go for media/advertising news and commentary in today’s world. And, unlike many newspaper publishers I am still quite solvent, thank you, and can publish indefinitely from my basement or sun porch.
If publishers erect pay walls all it will do is reinforce bloggers such as I and even encourage more Twitter which is really micro-blogging. Yet, the American Press Institute states that 75% of publishers believe that they can successfully charge for content. Many say by late summer of 2010, they will have pulled the trigger.
To me, sadly, it may be too little too late. Newspapers over the last decade never really acknowledged on-line as part of their product line. On-line ad sales were not good and they did not package it well with their traditional newspaper offerings.
Now the rush is to provide various monetization models. I wish the industry success but a lot more papers will have to go down before the pendulum swings back, if ever. One possible scenario would be a total industry wash out where hundreds of newspapers go down in the next few years and exist only as weak on-line vehicles. The blogosphere which can no longer lift free articles from newspapers will get so bad and opinion rather than fact based that people will throw up their hands in disgust and pay for content. But, I am still not sure. Local news may fade and cable network news will dominate. It seems a shame but the tidal wave of change is impossible to hold back.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Friday, October 30, 2009
Trade-Off, Required Reading for Marketers
Last month an excellent new book was released. It should be read by everyone involved with branding, advertising, and consumer behavior. The book is entitled Trade-Off , Why Some Things Catch on and Others Don’t. It is written by Kevin Maney who often writes for Wired, The Atlantic, and Conde Nast Portfolio. The book’s publisher is Broadway.
What struck me about Trade-Off was the elegant simplicity of the premise. Maney states that with virtually all purchases there is a constant tension between Fidelity and Convenience.
Fidelity basically sums up the quality of a consumer experience. You go to a rock concert knowing that the sound will not be as good as you get on a CD at home. But you go to see the band, see the lighting, the special effects, be part of the crowd, and perhaps most importantly to be able to tell people that you were there. All that rolled up together spells fidelity.
Convenience is pretty obvious. It is how hard or easy it is to get what you want. Sometimes you go to a concert to get the entire fidelity treatment mentioned above. But, often you chose a low fidelity but high convenience experience like listening to your favorite group on a digital music player that is stuffed in your pocket. Sound quality may be a bit problematic.
With most purchases we make “a fidelity swap.” And, this swap is to Maney largely the key to business success or failure. Is the business set up for fidelity or convenience?
Other factors that play into the “swap” are:
1) The Tech Effect—you had to expect this in late 2009! Improvements in technology can improve both fidelity and convenience. Boundaries between the two are real but they are always changing.
2) The Fidelity Belly—if you are not extremely high fidelity or convenient you fall into the fidelity belly which he calls the “no man’s land of consumer experience. The tech effect is always redefining the borders of the belly so you brand may get swallowed up or become passé with the consumer if you are not careful.
3) The Fidelity Mirage—this one is dynamite. Businesses often say that they can do it but achieving both high fidelity and convenience seems to be impossible. If you try to do both you waste lots of time and even more resources and almost always fail. Starbucks expanded to the point where they often had locations on either side of a street corner. They were commonplace (and their baristas did not seem as well trained to me!) and when the economy started to tank, did you really need a $4.00 cup of coffee and an experience that no longer felt special? Familiarity truly did breed contempt and they have closed many stores and are now retrenching.
Coach built too many outlet stores and opened 94 conventional units between 2004 and 2008. Maney states that a big part of fidelity is maintaining aura and identity, and that is especially true with fashion and accessories. Convenience dissipates the aura and allure. Coach has lowered prices, closed locations and appears to be clawing back but they must never again become the McDonald’s of luxury.
Amazingly, even Wal-Mart tried to do both. Remember when they went in to New York City a few years back? That was a complete departure from their heritage. Wal-Mart grew by being the one stop shopping place for people in rural areas. They never entered major cities until they had surrounded them by working far outside and then gingerly stepping in to suburbs. Their empire was built on letting rural people go to one store instead of a dozen.In New York, shops abound and they are close to one another. After they closed New York, they amazingly shot themselves in the foot again by stocking higher priced and more fashionable clothes than ever before. I remember seeing TNS Media Intelligence reports stating that they were advertising in Vogue! At lunch that same day, I stopped at a newsstand and cracked up when I saw their ad was actually there. They were trying for both fidelity and convenience. Wal-Mart wanted aura it seemed and had abandoned its roots. The campaign flopped and they killed the better clothing and came back with “Save money. Live better.” As the economy sank, they rose as everyday low pricing reigned supreme again.
4) Super fidelity or Super convenience—Maney does not hedge; this is the province of winners. Most products that are hits fall at either end of the spectrum thus avoiding the dreaded fidelity belly. Apple put the i-phone at the top of the fidelity axis and they conquered despite a high price and limited geographic availability. Wal-Mart is back on top in retailing by returning to being the high convenience winner making shopping for basics cheaper than anywhere else. So Wal-Mart has poor fidelity and the i-phone is not very convenient to buy. But would you want to own either franchise? Of course!
Another example is from our industry. NFL Football with spectacular production values is the highest fidelity program in sports television. ESPN (sans MNF and college basketball) provides convenience in sports. There is always something in sports to watch on their networks.
This is only the tip of the iceberg but what struck me is that Maney has put his finger on something very important. I cannot tell you how many times I have seen companies harm or destroy their franchise because they fell for Maney’s Fidelity Mirage. You cannot be all things to all people. Yet, people believe they can. This approach is an excellent filter to use to help with positioning, expansion and pricing issues.
Get your boss to read Trade-Off, your creative heads as well, and especially the account planners!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
What struck me about Trade-Off was the elegant simplicity of the premise. Maney states that with virtually all purchases there is a constant tension between Fidelity and Convenience.
Fidelity basically sums up the quality of a consumer experience. You go to a rock concert knowing that the sound will not be as good as you get on a CD at home. But you go to see the band, see the lighting, the special effects, be part of the crowd, and perhaps most importantly to be able to tell people that you were there. All that rolled up together spells fidelity.
Convenience is pretty obvious. It is how hard or easy it is to get what you want. Sometimes you go to a concert to get the entire fidelity treatment mentioned above. But, often you chose a low fidelity but high convenience experience like listening to your favorite group on a digital music player that is stuffed in your pocket. Sound quality may be a bit problematic.
With most purchases we make “a fidelity swap.” And, this swap is to Maney largely the key to business success or failure. Is the business set up for fidelity or convenience?
Other factors that play into the “swap” are:
1) The Tech Effect—you had to expect this in late 2009! Improvements in technology can improve both fidelity and convenience. Boundaries between the two are real but they are always changing.
2) The Fidelity Belly—if you are not extremely high fidelity or convenient you fall into the fidelity belly which he calls the “no man’s land of consumer experience. The tech effect is always redefining the borders of the belly so you brand may get swallowed up or become passé with the consumer if you are not careful.
3) The Fidelity Mirage—this one is dynamite. Businesses often say that they can do it but achieving both high fidelity and convenience seems to be impossible. If you try to do both you waste lots of time and even more resources and almost always fail. Starbucks expanded to the point where they often had locations on either side of a street corner. They were commonplace (and their baristas did not seem as well trained to me!) and when the economy started to tank, did you really need a $4.00 cup of coffee and an experience that no longer felt special? Familiarity truly did breed contempt and they have closed many stores and are now retrenching.
Coach built too many outlet stores and opened 94 conventional units between 2004 and 2008. Maney states that a big part of fidelity is maintaining aura and identity, and that is especially true with fashion and accessories. Convenience dissipates the aura and allure. Coach has lowered prices, closed locations and appears to be clawing back but they must never again become the McDonald’s of luxury.
Amazingly, even Wal-Mart tried to do both. Remember when they went in to New York City a few years back? That was a complete departure from their heritage. Wal-Mart grew by being the one stop shopping place for people in rural areas. They never entered major cities until they had surrounded them by working far outside and then gingerly stepping in to suburbs. Their empire was built on letting rural people go to one store instead of a dozen.In New York, shops abound and they are close to one another. After they closed New York, they amazingly shot themselves in the foot again by stocking higher priced and more fashionable clothes than ever before. I remember seeing TNS Media Intelligence reports stating that they were advertising in Vogue! At lunch that same day, I stopped at a newsstand and cracked up when I saw their ad was actually there. They were trying for both fidelity and convenience. Wal-Mart wanted aura it seemed and had abandoned its roots. The campaign flopped and they killed the better clothing and came back with “Save money. Live better.” As the economy sank, they rose as everyday low pricing reigned supreme again.
4) Super fidelity or Super convenience—Maney does not hedge; this is the province of winners. Most products that are hits fall at either end of the spectrum thus avoiding the dreaded fidelity belly. Apple put the i-phone at the top of the fidelity axis and they conquered despite a high price and limited geographic availability. Wal-Mart is back on top in retailing by returning to being the high convenience winner making shopping for basics cheaper than anywhere else. So Wal-Mart has poor fidelity and the i-phone is not very convenient to buy. But would you want to own either franchise? Of course!
Another example is from our industry. NFL Football with spectacular production values is the highest fidelity program in sports television. ESPN (sans MNF and college basketball) provides convenience in sports. There is always something in sports to watch on their networks.
This is only the tip of the iceberg but what struck me is that Maney has put his finger on something very important. I cannot tell you how many times I have seen companies harm or destroy their franchise because they fell for Maney’s Fidelity Mirage. You cannot be all things to all people. Yet, people believe they can. This approach is an excellent filter to use to help with positioning, expansion and pricing issues.
Get your boss to read Trade-Off, your creative heads as well, and especially the account planners!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, October 26, 2009
Hug Your Traffic Person!
Over the last month or so, something unusual happened. I frequently get suggestions from readers regarding topics for future posts. But, this time three people who I cannot imagine know each other and who live in different parts of the U.S., all suggested that I write about traffic managers at TV and radio stations, and cable interconnects. The more that I thought about it, the more I thought a story was there. And, when I put the topic out to some of my panel members, the response was amazing. Several had, unbeknownst to me, started out in traffic and had some strong opinions.
The core issue from all three who requested a post was that the traffic function is vital for all forms of TV and radio. It is a thankless job, low paid, and the only time anyone gets any recognition is when something does not air properly and the finger pointing goes right to the hapless traffic person or team.
My panel members had a lot to say and here are comments from three of them:
“….I agree wholeheartedly on the value of a good traffic person. Especially here in cableville, they are more important than ever and their roles increasingly complex. When I did it (20 years ago), the goal was simply to accommodate the spots sold. When we were tight, there was stress; but other times the job was a breeze.”
“Today, the stress is compounded tenfold by the sheer volume of inventory being juggled. Computers do aid the process but no traffic system is intuitive enough to deal with all the asterisks we place on each buy. This guy is an annual. That one paid a premium. Another buys volume. A fourth is a make good spot from last week. This one we owe rating points.”
“And this could be happening on 50+ networks, across 5/10/25 cable zones. It is the real world incarnation of the plate-spinner from the old Ed Sullivan show.”
Everyone commented that salespeople think that their job has concluded when the order is written. Another cable exec expounded on that by saying “I think that cable still has somewhat of a do whatever you can to get the business mentality. This often times leaves the traffic department to deal with all kinds of added value issues and special requests. I think that the other factor that comes into play is that cable is still not always easy for agencies to purchase. When they do, there are often times many hoops to jump through to make the billing work. This usually becomes a traffic nightmare.”
A local broadcaster writes “traffic is a dumping ground. We totally rely on them and rarely say thank you. If I send candy or flowers to the traffic people after a particularly stressful stint, my colleagues laugh and say why bother? My manager never includes them in group luncheons or gives them tickets to concerts or ballgames which some of them would dearly love. I do what I can personally but the message from on high is that they are expendable. It is so sad.”
Over the years, I visited hundreds of TV stations. Only about 10% would take me down to the basement to meet the traffic folks. They were all pleasant and lit up like Christmas trees if you expressed any appreciation. One manager told a lady that I knew a lot about baseball cards. She told me that she had been trying for years to get a card for her father’s hero, a journeyman who was not Hall of Fame material. When I got back home, I went to a card shop and for the princely sum of 35 cents, picked up three Topps cards of the player in question and mailed them to the Midwestern traffic lady. You would think that I had sent her bars of gold bullion. Our service from then on was extraordinary. I did not do anything of note but show her a mild kindness.
When creative was late, I would sent flowers to the traffic person who had to stay late due to our lack of professionalism. And, sometimes that generousity had enormous consequences. Back in the 1980’s, my agency was a serious player in the arcane world of regional network television. We often aired different copy in different regions and sometimes cut in a different commercial in several markets over the national spot. It required a lot of detail and perfect execution at the network end. At the end of a negotiation in New York, I asked if I could go downstairs and meet the cut-in crew. The salesman looked at me as if I were insane but the sales director smiled and nodded and personally escorted me to the technical area and introduced me to the team. I simply thanked them for their help and the youngest, Lou, asked what accounts that I handled.
When I told him that one of them was Klondike ice cream bars, his eyes lit up and he told me that he loved them. Reaching in to my briefcase, I gave each member a coupon good for a free six serving package of Klondikes. Sounds hokey, but remember all they received from clients was complaints.
A week later prior to a fall holiday weekend, I was trying to finish up some work at 6:25 pm so I would not have to come in over the weekend. The phone rang. It was young Lou from the cut-in crew. “Don, we must be the last two people working in broadcast in America”. I laughed and had to agree. Lou went on, “copy did not arrive for our Northeast advertiser in Monday Night Football. If you can give me an isskey code (commercial number), I will put Klondike in as no charge unit.”
Clearly, I had the number and we received a commercial in 25% of the U.S. with a street value in those days of $52,500 and all because I gave the crew the smallest bit of attention. Needless to say, they got all the free ice cream bars that they could eat after that!
Traffic people deserve our consideration and respect. As we move toward more :05’s and :03’s and more cable channels, there job will get even trickier. Catch them doing something right and salespeople, please give them the direction and follow-up which they must have to do their jobs right.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The core issue from all three who requested a post was that the traffic function is vital for all forms of TV and radio. It is a thankless job, low paid, and the only time anyone gets any recognition is when something does not air properly and the finger pointing goes right to the hapless traffic person or team.
My panel members had a lot to say and here are comments from three of them:
“….I agree wholeheartedly on the value of a good traffic person. Especially here in cableville, they are more important than ever and their roles increasingly complex. When I did it (20 years ago), the goal was simply to accommodate the spots sold. When we were tight, there was stress; but other times the job was a breeze.”
“Today, the stress is compounded tenfold by the sheer volume of inventory being juggled. Computers do aid the process but no traffic system is intuitive enough to deal with all the asterisks we place on each buy. This guy is an annual. That one paid a premium. Another buys volume. A fourth is a make good spot from last week. This one we owe rating points.”
“And this could be happening on 50+ networks, across 5/10/25 cable zones. It is the real world incarnation of the plate-spinner from the old Ed Sullivan show.”
Everyone commented that salespeople think that their job has concluded when the order is written. Another cable exec expounded on that by saying “I think that cable still has somewhat of a do whatever you can to get the business mentality. This often times leaves the traffic department to deal with all kinds of added value issues and special requests. I think that the other factor that comes into play is that cable is still not always easy for agencies to purchase. When they do, there are often times many hoops to jump through to make the billing work. This usually becomes a traffic nightmare.”
A local broadcaster writes “traffic is a dumping ground. We totally rely on them and rarely say thank you. If I send candy or flowers to the traffic people after a particularly stressful stint, my colleagues laugh and say why bother? My manager never includes them in group luncheons or gives them tickets to concerts or ballgames which some of them would dearly love. I do what I can personally but the message from on high is that they are expendable. It is so sad.”
Over the years, I visited hundreds of TV stations. Only about 10% would take me down to the basement to meet the traffic folks. They were all pleasant and lit up like Christmas trees if you expressed any appreciation. One manager told a lady that I knew a lot about baseball cards. She told me that she had been trying for years to get a card for her father’s hero, a journeyman who was not Hall of Fame material. When I got back home, I went to a card shop and for the princely sum of 35 cents, picked up three Topps cards of the player in question and mailed them to the Midwestern traffic lady. You would think that I had sent her bars of gold bullion. Our service from then on was extraordinary. I did not do anything of note but show her a mild kindness.
When creative was late, I would sent flowers to the traffic person who had to stay late due to our lack of professionalism. And, sometimes that generousity had enormous consequences. Back in the 1980’s, my agency was a serious player in the arcane world of regional network television. We often aired different copy in different regions and sometimes cut in a different commercial in several markets over the national spot. It required a lot of detail and perfect execution at the network end. At the end of a negotiation in New York, I asked if I could go downstairs and meet the cut-in crew. The salesman looked at me as if I were insane but the sales director smiled and nodded and personally escorted me to the technical area and introduced me to the team. I simply thanked them for their help and the youngest, Lou, asked what accounts that I handled.
When I told him that one of them was Klondike ice cream bars, his eyes lit up and he told me that he loved them. Reaching in to my briefcase, I gave each member a coupon good for a free six serving package of Klondikes. Sounds hokey, but remember all they received from clients was complaints.
A week later prior to a fall holiday weekend, I was trying to finish up some work at 6:25 pm so I would not have to come in over the weekend. The phone rang. It was young Lou from the cut-in crew. “Don, we must be the last two people working in broadcast in America”. I laughed and had to agree. Lou went on, “copy did not arrive for our Northeast advertiser in Monday Night Football. If you can give me an isskey code (commercial number), I will put Klondike in as no charge unit.”
Clearly, I had the number and we received a commercial in 25% of the U.S. with a street value in those days of $52,500 and all because I gave the crew the smallest bit of attention. Needless to say, they got all the free ice cream bars that they could eat after that!
Traffic people deserve our consideration and respect. As we move toward more :05’s and :03’s and more cable channels, there job will get even trickier. Catch them doing something right and salespeople, please give them the direction and follow-up which they must have to do their jobs right.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, October 13, 2009
Is It Really Account Planning?
In recent years, more and more advertising agencies of all sizes claimed to be account planning centered. It would be fantastic if they really were. Sadly, many still grind out some very mediocre advertising despite their claim to be totally driven by account planning.
Just what is account planning? The textbook definition goes something like this: The process of conducting research that is relevant to the client’s product or service and can be used in the development of creative strategy as well as all other aspects of an Integrated Marketing Communications campaign. The account planner’s role is to serve as the eyes and ears of the consumer and represent the consumer in every agency department.
Sounds great, doesn’t it? A few do it really, really well but for most the staffers dubbed account planners are really just window dressing for the clients.
When the account planning boom-let got started a number of years ago, I and dozens of other veterans at many shops immediately became suspicious. It always seemed that an account person or maybe a market researcher would attend a seminar for three days and come back full of enthusiasm about what they learned. Then, within 30 days his or her business card would change and the account person would instantly morph into an account planner. It impressed prospects at new business meetings but never really took hold back at the office. The creatives still did a lot of what they wanted and media people at many agencies were not let in to the process until very late.
In my career, I have only had relationships with two people who were extraordinary account planners and I never formally worked in the same company with either. One was a burnt out creative who sadly was really a hack by the time account planning came into vogue. He managed to reinvent himself as an account planner. Garrulous, enthusiastic, he devoured the trade press and all that was going on in marketing and consumer behavior. While his days as a creative executive had passed him by, he wrote the best creative briefs that I have ever seen. When the creative team got their marching orders from him, they were well armed for the assignment. I was pulled in for media counsel as an outsider and was always stunned at how current he was with evolving new media, especially online, and began to look forward to his endless questions. His enthusiasm was contagious and what little I contributed to the entire process was enhanced by his zeal and constant encouragement to keep reaching for more.
The other was a Brit who learned it in London where account planning was formalized. She was a renaissance woman; she did not know a little about everything, she knew a lot about everything. An omnivorous reader, she started every phone call with “what have you been reading lately.” Within 3-4 days, I would get an e-mail with a critique of the book in question. We did not always agree but she lived and breathed the game 24/7 and always was bursting with ideas. Unfortunately, I never worked with her but she had me on her “panel” or kitchen cabinet and I loved it when caller ID told me that she was reaching out once more.
Recently, I got in touch with a former colleague who is still at it after several decades. He runs a highly successful business far outside of New York and, looking at his reel, it is obvious that authentic account planning is taking place even on accounts with very modest budgets. Interestingly, he made the trek to London a long time ago and did NOT spend a long weekend there and then call himself a planner. He studied it closely, saw the flaws, and saw through the British pomposity that hid what was truly going on.
To quote him we find that “account planners are qualitative researchers, quantitative researchers, media sensitive, and sales message understanding. They weigh in on media weights, schedule timing, word selection and parsing, color themes, the entire process. A good account planner is a student of the game, a diplomat, and his/her greatest strength is pure curiosity and the endless use of the word WHY.”
His breaking of the code was that account planning often came down to dramatically improving internal communications. I could not agree more. It always stunned me when a CEO would talk about how valuable an account planner was to a prospective client. If they meant that account planning can help all clients because the agency is run better, okay. To me, they were really more valuable internally to keep the creatives in line and on track and get media involved early in the project. They pushed both disciplines to explore new options in recent years and they never forgot what the consumer had said to them. To hell with how fun a spot a young writer wanted to do would be or how it would look on her reel. They fought to do what was right.
My old colleague says that account planning is much more than a title; it is a culture that has to come from the very top. “Every ad has a strategy that consumers can understand. Management has to make it easy for all to sit around and get rejected or congratulated as a team.” Some small shops have done account planning almost by default because communication is generally far better than in larger agencies. Mid-sized shops can go either way but can implement it if the CEO empowers the planner(s) and gets involved personally as well.
How do you spot a psuedo-planner? Here is one test that I use and it has been foolproof so far. When someone tells me that they are an account planner, I ask who they think is the best consumer behavior guru among Martin Lindstrom, Paco Underhill, or Rob Walker? Amazingly, some planners at large shops say that they have never heard of any of them. The odds are good they took the three day course. Also, get suspicious if they just want to talk about Malcolm Gladwell. Everyone reads Gladwell and he is really in another genre. If they start to argue about which of the three guys mentioned above (my gurus for 2009-2010) is strongest, you at least have someone who reads widely and is trying to stay current.
If you run an agency, where can you turn for account planners? Here is an offbeat idea. Go to a large shop and try to raid a bright young media researcher. Today, the good ones have one foot in conventional media and one foot in new media. Usually, they are translating all the new terms for everyone and the boss doesn’t want the Google reps to meet them for fear of losing them. If they are personable, have a reasonably good feel for creative and are not too meek, you may have the makings of a really good account planner.
The process of account planning is happily here to stay. Just make sure that you get the real thing when you hire an agency.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Just what is account planning? The textbook definition goes something like this: The process of conducting research that is relevant to the client’s product or service and can be used in the development of creative strategy as well as all other aspects of an Integrated Marketing Communications campaign. The account planner’s role is to serve as the eyes and ears of the consumer and represent the consumer in every agency department.
Sounds great, doesn’t it? A few do it really, really well but for most the staffers dubbed account planners are really just window dressing for the clients.
When the account planning boom-let got started a number of years ago, I and dozens of other veterans at many shops immediately became suspicious. It always seemed that an account person or maybe a market researcher would attend a seminar for three days and come back full of enthusiasm about what they learned. Then, within 30 days his or her business card would change and the account person would instantly morph into an account planner. It impressed prospects at new business meetings but never really took hold back at the office. The creatives still did a lot of what they wanted and media people at many agencies were not let in to the process until very late.
In my career, I have only had relationships with two people who were extraordinary account planners and I never formally worked in the same company with either. One was a burnt out creative who sadly was really a hack by the time account planning came into vogue. He managed to reinvent himself as an account planner. Garrulous, enthusiastic, he devoured the trade press and all that was going on in marketing and consumer behavior. While his days as a creative executive had passed him by, he wrote the best creative briefs that I have ever seen. When the creative team got their marching orders from him, they were well armed for the assignment. I was pulled in for media counsel as an outsider and was always stunned at how current he was with evolving new media, especially online, and began to look forward to his endless questions. His enthusiasm was contagious and what little I contributed to the entire process was enhanced by his zeal and constant encouragement to keep reaching for more.
The other was a Brit who learned it in London where account planning was formalized. She was a renaissance woman; she did not know a little about everything, she knew a lot about everything. An omnivorous reader, she started every phone call with “what have you been reading lately.” Within 3-4 days, I would get an e-mail with a critique of the book in question. We did not always agree but she lived and breathed the game 24/7 and always was bursting with ideas. Unfortunately, I never worked with her but she had me on her “panel” or kitchen cabinet and I loved it when caller ID told me that she was reaching out once more.
Recently, I got in touch with a former colleague who is still at it after several decades. He runs a highly successful business far outside of New York and, looking at his reel, it is obvious that authentic account planning is taking place even on accounts with very modest budgets. Interestingly, he made the trek to London a long time ago and did NOT spend a long weekend there and then call himself a planner. He studied it closely, saw the flaws, and saw through the British pomposity that hid what was truly going on.
To quote him we find that “account planners are qualitative researchers, quantitative researchers, media sensitive, and sales message understanding. They weigh in on media weights, schedule timing, word selection and parsing, color themes, the entire process. A good account planner is a student of the game, a diplomat, and his/her greatest strength is pure curiosity and the endless use of the word WHY.”
His breaking of the code was that account planning often came down to dramatically improving internal communications. I could not agree more. It always stunned me when a CEO would talk about how valuable an account planner was to a prospective client. If they meant that account planning can help all clients because the agency is run better, okay. To me, they were really more valuable internally to keep the creatives in line and on track and get media involved early in the project. They pushed both disciplines to explore new options in recent years and they never forgot what the consumer had said to them. To hell with how fun a spot a young writer wanted to do would be or how it would look on her reel. They fought to do what was right.
My old colleague says that account planning is much more than a title; it is a culture that has to come from the very top. “Every ad has a strategy that consumers can understand. Management has to make it easy for all to sit around and get rejected or congratulated as a team.” Some small shops have done account planning almost by default because communication is generally far better than in larger agencies. Mid-sized shops can go either way but can implement it if the CEO empowers the planner(s) and gets involved personally as well.
How do you spot a psuedo-planner? Here is one test that I use and it has been foolproof so far. When someone tells me that they are an account planner, I ask who they think is the best consumer behavior guru among Martin Lindstrom, Paco Underhill, or Rob Walker? Amazingly, some planners at large shops say that they have never heard of any of them. The odds are good they took the three day course. Also, get suspicious if they just want to talk about Malcolm Gladwell. Everyone reads Gladwell and he is really in another genre. If they start to argue about which of the three guys mentioned above (my gurus for 2009-2010) is strongest, you at least have someone who reads widely and is trying to stay current.
If you run an agency, where can you turn for account planners? Here is an offbeat idea. Go to a large shop and try to raid a bright young media researcher. Today, the good ones have one foot in conventional media and one foot in new media. Usually, they are translating all the new terms for everyone and the boss doesn’t want the Google reps to meet them for fear of losing them. If they are personable, have a reasonably good feel for creative and are not too meek, you may have the makings of a really good account planner.
The process of account planning is happily here to stay. Just make sure that you get the real thing when you hire an agency.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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