A few weeks ago I received a long and detailed e-mail from someone whom I have known for over 30 years. He was an excellent sales executive who eventually morphed into a really good broadcaster. And, he is still active in the business. His e-mail at times was something of a rant but, despite the passion, it made a lot of sense. He finished with the following: “There is too much lazy marketing going on at agencies. They continue to do what they have always done. Yes, they are playing with social media but they have no clue about it. What they need to do is more Branding.”
I canvassed a host of other people who were in media sales and the frustration level was amazing. So this post will give you a view of agency media teams from a sales executive perspective. Everyone in my sample is successful and has been in the business a minimum of 15 years. They are from all over the country—good balance from each region. All are people whom I know and have always considered to be smart and fair. I interviewed or exchanged e-mails with 25 people and what follows is a representative sampling of their opinions.
First, let us hear from a man with whom I have done business for over 20 years. He is easily the most gentlemanly person with whom I have ever worked. His product is now a multi-platform offering that can work for many substantial advertisers. Here is how he weighs in on media teams in 2011: “My biggest complaint is the lack of sincere contact. Nearly everything is done through e-mail, voice mail and very easy for the 20 somethings to ignore or delete. Even an old geezer such as I knows that in this computer oriented world things are going to change and just keep getting faster and less personal. For companies with a complicated product offering like ours that requires some explanation, this presents a problem even if we can be of real benefit to their clients. Also, today there is a lack of simple courtesy….people often do not return phone calls or even e-mails. Lastly, the young people do not understand that if you agree to take a meeting you need to actually do it. My sales team makes the effort to make contact, travels to a distant city at our expense, and often gets stood up when they arrive. It is maddening.”
Another long time friend who sets the standard for high ethics said the following:
“I think one of the biggest problems with agencies is that they are not set up to effectively evaluate over-all marketing opportunities. In today’s world, the hugely different opportunities that are brought to agencies often scream for a unique evaluation for each one. So many different elements are brought together (TV, Internet, Print, Activation) but the agencies usually stick it all into a cookie cutter evaluation and potentially risk not recommending things that can deliver a ‘grass roots’ activation model that will really help the client as a whole. Instead they go to a traditional media buy with very little imagination included……there are far too few people out there who can really evaluate a multi-faceted package.”
A gregarious and deeply experienced exec shares this sentiment: “You have struck a nerve, my friend. There is no incoming and teachable entry level talent who are being taught how to interpret proposals and ask questions. There is a moat of experience between veteran media people who think out of the box and the one dimensional “my cost per point is X and that is all I care about" attitude of the new comers. "Training, you ask? What training"?
A vivacious and lively TV exec who sells coast to coast is more sympathetic—“First and foremost, EVERY MEDIA TEAM seems to be undermanned…too much to do…too few workers and this appears to be by design. This is a common theme from NYC to LA. I think everyone gets the “we have got to do more with less” concept but at some point (soon) clients will see clearly that the model is broken. And today the client is suffering because the agency is trying to keep costs at the lowest levels.” This is undeniably true. She raises another vital point—“Because they are undermanned, media departments do not encourage salespeople to come in and educate all on new innovations available to them. Interestingly, some of these new opportunities might dovetail with the client’s needs and by incorporating them into the plan/buy, the agency could look like a winner.”
Sales people who do not work for major properties simply cannot get appointments. One agency media chief says that he will only see people from Google, ESPN and Sports Illustrated. He loves their swag and the whole team sits in. That is great for those three outstanding properties but the agency does regional business at best and there are local people who could help him with his clients if he would give them a hearing.
Some sales people close to retirement are resigned to what is going on. A West Coast sales maven says “The golden years are gone. I cannot develop a relationship with the newcomers. Media is now a commodity in their eyes and something is lost forever when that attitude took hold”.
Another adds “The game is almost over. The technology will soon be in place where a lot more will be done electronically. I am a dinosaur, and know it but it has been one hell of a ride since 1970. No one under 40 that I call on can really sort out value. They have no intuitive feel for things. Others lack the math skills to unravel a multi-platform deal.”
Finally, a mid-west sales star says “when I started in the business 35 years ago, I was in awe of the agency media teams. Now, the superstars are not going into advertising. I do not see that turning around in an economy that is over 40% financially oriented.
What do I think? Well, lots of things are moving toward commodity status and media is one of them. It is sad but in the defense of the agency people that I still speak with and like and admire, many are really overworked. The client suffers as one of my panel members pointed out. But with agencies suffering strong financial pressure, there does not seem to be an easy way out.
Courtesy needs to make a comeback. If someone made an appointment with me, I kept it. There were nights that I had to stay a couple of hours late as a result, but no out of towner was ever greeted by a receptionist saying that Don was not available. Also, as I always say, you can learn a lot by listening. Sales reps are always on the move, talks to hundreds of people, and work for firms that have some cutting edge products developed at headquarters. Media teams need to make time for them. Our world is changing and buying solely on cost per points is gone with the wind. Yet, sadly, it still goes on.
Sales people need to be concise and respectful of the media team’s time. But if they cannot get in to see the agency team, something is very wrong.
Will things turn around? I believe that the glass is half full, but it is hard to believe that the pendulum will swing back any time soon.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, February 17, 2011
Friday, February 11, 2011
The Medium is STILL the message
A few weeks ago, like many of you, I attended a screening of the film, “The King’s Speech.” Marvelously produced and acted by a great ensemble cast, it shows how Prince Albert, the Duke of York overcame a terrible stammer and was able to function giving speeches and radio addresses as King George VI of the United Kingdom. As a media person, one scene stuck me hard that most in the audience did not fully appreciate. His difficult father, King George V told his son that he must learn to speak better and master radio addresses as that was now part of what it was to be king in 1936. Being a good man, fair and decent, was not enough. You had to master the new medium to be a successful monarch (for a great biography of George VI, consider The Reluctant King by Sarah Bradford, St. Martins Press, 1989).
A few months from now we will mark the 100th anniversary of the birth of Marshall McLuhan. He was a Canadian communications theorist who was famous for two turns of phrase—1) the global village and 2) The Medium is the Message.
As a student, I vividly remember struggling with McLuhan. He was deep and not easy to digest. It is fair to say that he has been misinterpreted by more people than anyone else in the communications field. What I see him as is clearly the greatest media futurist ever.
Consider this statement way back in 1961: “print culture would be brought to an end by electronic interdependence. Electronic media would replace visual culture. Human kind will move toward individualism and fragmentation and our collective identity with a tribal base. The new group could be called a global village.”
The following year he wrote: “the next medium, whatever it is…..it may be the extension of consciousness, will include television as its content, not as its environment, and will transform television into an art form. A computer as a research and communications instrument could enhance retrieval; mass brick & mortar library organizations could be made obsolete, retrieve the individual’s encyclopedic function and flip in to a private line to speedily tailored data of a salable kind”.
Wow! Move over Nostradomus! McLuhan forecasts many aspects of the digital world, Google and Facebook and he doesn’t use obtuse rhyming couplets to do it.
In 1964, his use of the term “The Medium is the Message” first surfaced. Here is my take on it. McLuhan felt that the media are extensions of our human senses, bodies and minds. Media, then, is the message in that the force of media embeds itself in the content, creating a “symbiotic relationship by which the medium influences how the message is perceived”. He also said that the"content should not be studied as much as the media that caused it.” McLuhan always hammered away at the point that we do not often realize the social implications of a medium until “our values, norms, and way of doing things have been altered by the technology.” An example he often used was that when you turned a TV on in a crowded room everyone would get silent. Now with cell phones, e-mail, texting and twitter we communicate but do not talk nearly as much as we once did.
“The Medium is the Message” hit me hard at an early age but I did not realize it until 10 years later. One night in October, 1960 my father and I were driving alone somewhere. He put on the radio and the first Kennedy-Nixon debate was underway. We rode in silence for a few miles and my dad said “sounds like Nixon is getting the better of him”. When we arrived home my oldest sibling greeted us with “wasn’t Jack great. He had lots of facts and figures. He won the debate easily.” I was just a kid and did not want to argue with my college bound brother who devoured TIME magazine cover to cover each week and was very well informed.
About 10 years later, I saw Howard K. Smith of ABC News being interviewed. He said he was the moderator that night and by positioning could hear the candidates but not really see them. It was as if he were listening to the debate on the radio. His scoring was that Nixon had won easily on points. But the TV audience and the press the next day heralded it as triumph for the young Senator from Massachusetts.
Kennedy was better looking than Nixon which helped in a visual medium. Nixon had been ill and was running a fever prior to the telecast. He did not have an expert makeup man and Kennedy did. The medium of TV was the message not the content of the debate to some degree.
A short time later, I saw Marshall McLuhan on with Dick Cavett. When asked to explain how “the medium is the message” he used the Kennedy-Nixon debate as an example. He challenged the audience to objectively listen to a tape of the show and decide who won. I recently did it and he was right. (Full disclosure—I didn’t like Dick Nixon. He took too long to unwind the Vietnam War; he tried to cover up Watergate and thus almost destroyed our two party system. On August 15, 1971,he instituted wage & price controls and severed all ties to the dollar and gold which will haunt us eventually. Also, he did the shameful and un-American thing of having a White House “enemies list” while in office. But if you LISTEN to the debate, Nixon won it!)
McLuhan said that we focus on the obvious way too much. The obvious is the content but what about the subtle changes that occur due to the medium being used?
So George V told the future George VI to overcome his stammer and embrace the radio. In the 1930-1950’s that medium was the message in many cases. As we moved in to the TV age, it overshadowed content. How much have the media contributed this week to the overthrow of an Egyptian dictator? Perhaps more than the real content which is the valid complaints of an oppressed people. Now, we have a whole new array of digital entrants. The internet, You Tube, Facebook, Twitter and the next generation that may only be 24-36 months away. (Does anyone remember MySpace?)
In July of this year, had he been long lived, McLuhan would have turned 100. Well,the medium is STILL the message.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
A few months from now we will mark the 100th anniversary of the birth of Marshall McLuhan. He was a Canadian communications theorist who was famous for two turns of phrase—1) the global village and 2) The Medium is the Message.
As a student, I vividly remember struggling with McLuhan. He was deep and not easy to digest. It is fair to say that he has been misinterpreted by more people than anyone else in the communications field. What I see him as is clearly the greatest media futurist ever.
Consider this statement way back in 1961: “print culture would be brought to an end by electronic interdependence. Electronic media would replace visual culture. Human kind will move toward individualism and fragmentation and our collective identity with a tribal base. The new group could be called a global village.”
The following year he wrote: “the next medium, whatever it is…..it may be the extension of consciousness, will include television as its content, not as its environment, and will transform television into an art form. A computer as a research and communications instrument could enhance retrieval; mass brick & mortar library organizations could be made obsolete, retrieve the individual’s encyclopedic function and flip in to a private line to speedily tailored data of a salable kind”.
Wow! Move over Nostradomus! McLuhan forecasts many aspects of the digital world, Google and Facebook and he doesn’t use obtuse rhyming couplets to do it.
In 1964, his use of the term “The Medium is the Message” first surfaced. Here is my take on it. McLuhan felt that the media are extensions of our human senses, bodies and minds. Media, then, is the message in that the force of media embeds itself in the content, creating a “symbiotic relationship by which the medium influences how the message is perceived”. He also said that the"content should not be studied as much as the media that caused it.” McLuhan always hammered away at the point that we do not often realize the social implications of a medium until “our values, norms, and way of doing things have been altered by the technology.” An example he often used was that when you turned a TV on in a crowded room everyone would get silent. Now with cell phones, e-mail, texting and twitter we communicate but do not talk nearly as much as we once did.
“The Medium is the Message” hit me hard at an early age but I did not realize it until 10 years later. One night in October, 1960 my father and I were driving alone somewhere. He put on the radio and the first Kennedy-Nixon debate was underway. We rode in silence for a few miles and my dad said “sounds like Nixon is getting the better of him”. When we arrived home my oldest sibling greeted us with “wasn’t Jack great. He had lots of facts and figures. He won the debate easily.” I was just a kid and did not want to argue with my college bound brother who devoured TIME magazine cover to cover each week and was very well informed.
About 10 years later, I saw Howard K. Smith of ABC News being interviewed. He said he was the moderator that night and by positioning could hear the candidates but not really see them. It was as if he were listening to the debate on the radio. His scoring was that Nixon had won easily on points. But the TV audience and the press the next day heralded it as triumph for the young Senator from Massachusetts.
Kennedy was better looking than Nixon which helped in a visual medium. Nixon had been ill and was running a fever prior to the telecast. He did not have an expert makeup man and Kennedy did. The medium of TV was the message not the content of the debate to some degree.
A short time later, I saw Marshall McLuhan on with Dick Cavett. When asked to explain how “the medium is the message” he used the Kennedy-Nixon debate as an example. He challenged the audience to objectively listen to a tape of the show and decide who won. I recently did it and he was right. (Full disclosure—I didn’t like Dick Nixon. He took too long to unwind the Vietnam War; he tried to cover up Watergate and thus almost destroyed our two party system. On August 15, 1971,he instituted wage & price controls and severed all ties to the dollar and gold which will haunt us eventually. Also, he did the shameful and un-American thing of having a White House “enemies list” while in office. But if you LISTEN to the debate, Nixon won it!)
McLuhan said that we focus on the obvious way too much. The obvious is the content but what about the subtle changes that occur due to the medium being used?
So George V told the future George VI to overcome his stammer and embrace the radio. In the 1930-1950’s that medium was the message in many cases. As we moved in to the TV age, it overshadowed content. How much have the media contributed this week to the overthrow of an Egyptian dictator? Perhaps more than the real content which is the valid complaints of an oppressed people. Now, we have a whole new array of digital entrants. The internet, You Tube, Facebook, Twitter and the next generation that may only be 24-36 months away. (Does anyone remember MySpace?)
In July of this year, had he been long lived, McLuhan would have turned 100. Well,the medium is STILL the message.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Friday, February 4, 2011
Sports Talk Radio--An Appraisal
Whenever I mention sports talk as a radio format to people, I almost always get one of two reactions:
1) “I love it personally, it is a great way to reach guys, and it works” or
2) A soft chuckle followed by “you mean, long time listener, first time caller.”
The format, simply put, is devoted entirely to the discussion and sometimes broadcasting of sporting events. It is known for often boisterous on air talk by both the hosts and listeners who call in to the program. You may be surprised to know that this form of American Pop Culture is spreading globally. Besides the U.S., Sports Talk has popped up in Canada, Australia, New Zealand, the United Kingdom, and most recently, Nigeria!
Despite the dismissive nature some media planners have toward it, the medium has grown smartly in its roughly 20 year history. An old friend, who is a veritable walking encyclopedia on all aspects of radio, put it this way “Sports radio is one of the very few new formats that have caught on during the last 15 years. As a matter of fact, the only other new format I can think of that’s made it is Hip-Hop on FM. Sports radio saved, at least temporarily, a number of AM stations. And as AM’s share further erodes, the format has been moving to FM, including ……some very large markets.”
Another interesting thing about Sports Radio is how vibrant it is locally. Sports giant ESPN has their entries in both English and Spanish and have growing appeal. Fox Sports, Sporting News, and some syndicated and satellite programming is also active. But to many, the local stations with hometown announcers discussing the trials and tribulations of the local franchise are the place to be in many markets. A long time cable and radio sales rep put it nicely—“I think Sports Radio strength is a city by city thing. In a Boston, Philly, or Chicago Sports Radio is a good reach and frequency media vehicle. These are what I call passion towns (I would add Pittsburgh to the list). Local strength of Sports Talk allows for things like effective in-game advertising even inside a stadium and great merchandising with clients (tickets, food sampling).”
He admitted that he listened to ESPN rather the local guys most of the time. The reason? He is a transplant. Markets like Dallas and Atlanta are famous for this. As he put it “more fans show up for their home team than the Atlanta (or Dallas) teams. It is sad. Some towns are not passion towns.” I enjoyed going to hockey games several times a year in both Dallas and Atlanta during my years in both cities. By coincidence, I often saw Canadian teams visiting. Invariably, as they sang the two national anthems before the game, thousands of uber-polite Canadian transplants would rise and sing “Oh, Canada” with great gusto before, let us say, the Stars and Maple Leafs faced off.
In small markets, the stations have issues that they do not have in the major metros. One broadcaster told me that his initial audience was so small that he always had his wife and brother ready to call if the phones were quiet. “They would lob me a pre-arranged question that was open-ended and I could do a fifteen minute rant until someone else called in. Most of the time, it worked.” Another problem they had was that a few gadflies would call each show throughout the day. Some were a nuisance, some were fans, some were practically auditioning but it showed advertisers how truly small our audience was. In recent years with the advent of fantasy leagues getting a lot of play, some serious and well informed statistics freaks would call in. A broadcaster told me that he met a few of them and now has them on as special guests. In their Podunk towns, they have become minor celebrities.
The national and syndicated services are big players in the smaller and mid-sized markets. My radio guru friend put it succinctly as follows: “As far as ESPN, sports stations in major markets are pretty much live and local on weekends and ESPN (or Fox Sports Radio or Sporting News Radio) in evenings and weekends. Small market stations and very small AM’s in big markets tend to rely on the networks close to full-time, and that I think that will continue.”
When do you listen locally vs. nationally if you have a choice? A seasoned and smart TV broadcaster, who paid his dues in radio, explained it this way: “When my home team made the NFL playoffs, I wanted local coverage. After they were knocked out, I wanted national coverage up to the Super Bowl. So for stations in markets with strong pro/college teams, I think locally based stations will have their place in the market. It is a lot tougher for a local station in a market like West Palm Beach that has no pro/college teams and few people grew up there. Older markets with long sports histories are better for local.” This ties back to the “passion towns” discussed above.
He also weighed in on a business reason why national services will not destroy local origination of Sports Talk. “As far as cost goes, there are many people trying to break into the sports business so finding decent producers and broadcasters is neither a challenge nor a budget buster. The new digital media is impacting play by play for radio, but good story tellers will still survive.”
Of course, the big question is does Sports Talk work as a medium? The answer is a qualified yes. One problem that I have seen is that those who love it sometimes put a bit too much of the budget in it for emotional reasons. They listen to it, want to be part of it, attend all local events with announcers, and love the promotional possibilities. In many markets the audience was not all that large although Arbitron’s move from a diary base to PPM measurement has helped many Sports Talk stations substantially. But the reach potential of a single station in a fair sized market is not very large in 2011. Sports Talk should be an integral part of a campaign for many advertisers, but media planners and advertisers should not get too wrapped up in their own hype with it.
The radio guru weighs in on the financial side with these insights: “One great thing about Sports Radio is that it often out bills what is should based on its ratings. The reason is that Sports Radio’s audience is “pure”, meaning sports stations are perfect for categories such as beer, cars and other male oriented products. The ratings don’t matter as much although some sports stations have done well in demos like Men 35-64. The other reason sports stations can make a lot of money is that the format is conducive to sponsorships, such as the hourly scoreboard, and promotions such as spring training. Lots of off-air elements such as signage and on-line can be included.”
Many people echoed this sentiment. A former radio star now in cable said “Although Sports Radio has some challenges, there are people being successful in it by understanding how to tap in to the targeted reach, audience loyalty and work promotional integrations.”
A buying service owner also adds “still another reason for Sports Radio’s is success is that a lot of clients (Men 35-64 who own businesses) listen to Sports Radio themselves and want their business to be on it.” Not the best reason to use a medium but his point is very well made.
Another adds “One of the biggest advantages of sports talk is the endorsement opportunities, contests, and associations for advertisers…….From an efficiency standpoint, these kinds of programs are usually not that great, but they create a lot of emotion for the advertiser and can be sold for a premium. I think that Sports Radio has a brighter future than music based radio.” Emotion and loyalty are still big with us humans. Sports radio can deliver the goods.
What about content? Some of the local independents get a bit raunchy at times and sometimes veer into politics or social commentary on slow news days although ESPN has made slow new sports days increasingly rare over the last 30 years. A Sports Sales maven who is a great friend voiced an intriguing theory that I have never heard before—“Local Sports Radio guys usually tell me that bad things happening with the local team can help ratings more than good things. It seems to be more about therapy than anything else. It is also a way to connect more with the fans emotionally than regular radio.” We could debate that one for a long time but it does make you think.
From a content standpoint, I want to quote another friend who captures the spirit of Sports Radio and the hold it has on many men’s live better than any that I have ever seen or heard. “To me, the best sports radio is local but unfortunately, local sports radio isn’t always the best. Listen-ability varies greatly from not just one station to the next, but even from one local host to the next as our sports interests are now as varied as the options on the FM radio. For those times when I’m forced elsewhere I have an ever increasing array of national offerings (thank you XM) which themselves inevitably wear me down with their own banal bantering, self importance, regional leanings and other proclivities which soon drive me back to my local options as the cycle completes. Lather. Rinse. Repeat. As I grow older, I find my sports radio needs to have an increasing dose of news, pop culture, politics and whatever else is going on. This somehow helps me justify my fixation over the left tackle who whiffed on his pancake block, thereby obliterating my quarterback.”
He continues—“20 years ago we yearned for any discussion of sports, but today we get it how we want it or we tune away. An unintended side affect perhaps from that fateful day in 1979 when ESPN “happened” and our sporting options multiplied exponentially. Sports Radio extends the game and season to where our favorites play all year long. The World Series used to be followed by four months of waiting. Now when the last pitch is thrown we move directly to the Winter Meetings, the start of free agency, off-season trades, Hall of Fame announcements and before you know…pitchers and catchers report anew. Whether these events are as big as sports radio makes them seem doesn’t matter to us so much as the fact that we demand they be all explored in exhaustible detail. Details over which I parse endlessly, yelling at the indefensible comments being uttered and the stupidity of the know-nothing that put them out there. And, I always tune in again tomorrow”.
Being older than almost all of you, here is my vision of where it fits into our lives. Just over 50 years ago, I was growing up in a quaint and lovely seaside village in then rural Rhode Island. Just before Christmas 1960, my older brother Bob and I walked to a village barbershop for haircuts so we would look spiffy for any holiday pictures. The place was packed. The two barbers were great guys but they gave everybody the same too short haircut at 90 cents a head! Everybody was talking. The great Ted Williams had just retired and there was a debate going on about whether he was a better ballplayer than Joe DiMaggio. This was New England, 60 miles south of Boston, so Ted won by a 14 to 1 vote. Then someone mentioned the young rookie who would take Ted’s place in left field at Fenway Park in April, 1961. His name was Carl Yastrzemski and none of the Swamp Yankees in the shop could come close to pronouncing his name. One fellow said he thought Carl might be greater than Ted. An older man leaped out of the barber chair and shouted “Enoch, you are a chowder-head. No one will ever be better than Ted.” The whole place erupted with laughter and the talk continued. After my haircut, Bob got his. But when he was done, I did not want to leave the shop. It was too much fun. People from 10-80 years old were there, everyone commented, and the needling was something to experience.
When I listen to local Radio Sports, I get that same feeling that I had 50 years ago. The barbershop had a sense of community that few of us have in our busy lives in 2011. Well, for a few minutes in the car, Radio Sports gives it back to me.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
1) “I love it personally, it is a great way to reach guys, and it works” or
2) A soft chuckle followed by “you mean, long time listener, first time caller.”
The format, simply put, is devoted entirely to the discussion and sometimes broadcasting of sporting events. It is known for often boisterous on air talk by both the hosts and listeners who call in to the program. You may be surprised to know that this form of American Pop Culture is spreading globally. Besides the U.S., Sports Talk has popped up in Canada, Australia, New Zealand, the United Kingdom, and most recently, Nigeria!
Despite the dismissive nature some media planners have toward it, the medium has grown smartly in its roughly 20 year history. An old friend, who is a veritable walking encyclopedia on all aspects of radio, put it this way “Sports radio is one of the very few new formats that have caught on during the last 15 years. As a matter of fact, the only other new format I can think of that’s made it is Hip-Hop on FM. Sports radio saved, at least temporarily, a number of AM stations. And as AM’s share further erodes, the format has been moving to FM, including ……some very large markets.”
Another interesting thing about Sports Radio is how vibrant it is locally. Sports giant ESPN has their entries in both English and Spanish and have growing appeal. Fox Sports, Sporting News, and some syndicated and satellite programming is also active. But to many, the local stations with hometown announcers discussing the trials and tribulations of the local franchise are the place to be in many markets. A long time cable and radio sales rep put it nicely—“I think Sports Radio strength is a city by city thing. In a Boston, Philly, or Chicago Sports Radio is a good reach and frequency media vehicle. These are what I call passion towns (I would add Pittsburgh to the list). Local strength of Sports Talk allows for things like effective in-game advertising even inside a stadium and great merchandising with clients (tickets, food sampling).”
He admitted that he listened to ESPN rather the local guys most of the time. The reason? He is a transplant. Markets like Dallas and Atlanta are famous for this. As he put it “more fans show up for their home team than the Atlanta (or Dallas) teams. It is sad. Some towns are not passion towns.” I enjoyed going to hockey games several times a year in both Dallas and Atlanta during my years in both cities. By coincidence, I often saw Canadian teams visiting. Invariably, as they sang the two national anthems before the game, thousands of uber-polite Canadian transplants would rise and sing “Oh, Canada” with great gusto before, let us say, the Stars and Maple Leafs faced off.
In small markets, the stations have issues that they do not have in the major metros. One broadcaster told me that his initial audience was so small that he always had his wife and brother ready to call if the phones were quiet. “They would lob me a pre-arranged question that was open-ended and I could do a fifteen minute rant until someone else called in. Most of the time, it worked.” Another problem they had was that a few gadflies would call each show throughout the day. Some were a nuisance, some were fans, some were practically auditioning but it showed advertisers how truly small our audience was. In recent years with the advent of fantasy leagues getting a lot of play, some serious and well informed statistics freaks would call in. A broadcaster told me that he met a few of them and now has them on as special guests. In their Podunk towns, they have become minor celebrities.
The national and syndicated services are big players in the smaller and mid-sized markets. My radio guru friend put it succinctly as follows: “As far as ESPN, sports stations in major markets are pretty much live and local on weekends and ESPN (or Fox Sports Radio or Sporting News Radio) in evenings and weekends. Small market stations and very small AM’s in big markets tend to rely on the networks close to full-time, and that I think that will continue.”
When do you listen locally vs. nationally if you have a choice? A seasoned and smart TV broadcaster, who paid his dues in radio, explained it this way: “When my home team made the NFL playoffs, I wanted local coverage. After they were knocked out, I wanted national coverage up to the Super Bowl. So for stations in markets with strong pro/college teams, I think locally based stations will have their place in the market. It is a lot tougher for a local station in a market like West Palm Beach that has no pro/college teams and few people grew up there. Older markets with long sports histories are better for local.” This ties back to the “passion towns” discussed above.
He also weighed in on a business reason why national services will not destroy local origination of Sports Talk. “As far as cost goes, there are many people trying to break into the sports business so finding decent producers and broadcasters is neither a challenge nor a budget buster. The new digital media is impacting play by play for radio, but good story tellers will still survive.”
Of course, the big question is does Sports Talk work as a medium? The answer is a qualified yes. One problem that I have seen is that those who love it sometimes put a bit too much of the budget in it for emotional reasons. They listen to it, want to be part of it, attend all local events with announcers, and love the promotional possibilities. In many markets the audience was not all that large although Arbitron’s move from a diary base to PPM measurement has helped many Sports Talk stations substantially. But the reach potential of a single station in a fair sized market is not very large in 2011. Sports Talk should be an integral part of a campaign for many advertisers, but media planners and advertisers should not get too wrapped up in their own hype with it.
The radio guru weighs in on the financial side with these insights: “One great thing about Sports Radio is that it often out bills what is should based on its ratings. The reason is that Sports Radio’s audience is “pure”, meaning sports stations are perfect for categories such as beer, cars and other male oriented products. The ratings don’t matter as much although some sports stations have done well in demos like Men 35-64. The other reason sports stations can make a lot of money is that the format is conducive to sponsorships, such as the hourly scoreboard, and promotions such as spring training. Lots of off-air elements such as signage and on-line can be included.”
Many people echoed this sentiment. A former radio star now in cable said “Although Sports Radio has some challenges, there are people being successful in it by understanding how to tap in to the targeted reach, audience loyalty and work promotional integrations.”
A buying service owner also adds “still another reason for Sports Radio’s is success is that a lot of clients (Men 35-64 who own businesses) listen to Sports Radio themselves and want their business to be on it.” Not the best reason to use a medium but his point is very well made.
Another adds “One of the biggest advantages of sports talk is the endorsement opportunities, contests, and associations for advertisers…….From an efficiency standpoint, these kinds of programs are usually not that great, but they create a lot of emotion for the advertiser and can be sold for a premium. I think that Sports Radio has a brighter future than music based radio.” Emotion and loyalty are still big with us humans. Sports radio can deliver the goods.
What about content? Some of the local independents get a bit raunchy at times and sometimes veer into politics or social commentary on slow news days although ESPN has made slow new sports days increasingly rare over the last 30 years. A Sports Sales maven who is a great friend voiced an intriguing theory that I have never heard before—“Local Sports Radio guys usually tell me that bad things happening with the local team can help ratings more than good things. It seems to be more about therapy than anything else. It is also a way to connect more with the fans emotionally than regular radio.” We could debate that one for a long time but it does make you think.
From a content standpoint, I want to quote another friend who captures the spirit of Sports Radio and the hold it has on many men’s live better than any that I have ever seen or heard. “To me, the best sports radio is local but unfortunately, local sports radio isn’t always the best. Listen-ability varies greatly from not just one station to the next, but even from one local host to the next as our sports interests are now as varied as the options on the FM radio. For those times when I’m forced elsewhere I have an ever increasing array of national offerings (thank you XM) which themselves inevitably wear me down with their own banal bantering, self importance, regional leanings and other proclivities which soon drive me back to my local options as the cycle completes. Lather. Rinse. Repeat. As I grow older, I find my sports radio needs to have an increasing dose of news, pop culture, politics and whatever else is going on. This somehow helps me justify my fixation over the left tackle who whiffed on his pancake block, thereby obliterating my quarterback.”
He continues—“20 years ago we yearned for any discussion of sports, but today we get it how we want it or we tune away. An unintended side affect perhaps from that fateful day in 1979 when ESPN “happened” and our sporting options multiplied exponentially. Sports Radio extends the game and season to where our favorites play all year long. The World Series used to be followed by four months of waiting. Now when the last pitch is thrown we move directly to the Winter Meetings, the start of free agency, off-season trades, Hall of Fame announcements and before you know…pitchers and catchers report anew. Whether these events are as big as sports radio makes them seem doesn’t matter to us so much as the fact that we demand they be all explored in exhaustible detail. Details over which I parse endlessly, yelling at the indefensible comments being uttered and the stupidity of the know-nothing that put them out there. And, I always tune in again tomorrow”.
Being older than almost all of you, here is my vision of where it fits into our lives. Just over 50 years ago, I was growing up in a quaint and lovely seaside village in then rural Rhode Island. Just before Christmas 1960, my older brother Bob and I walked to a village barbershop for haircuts so we would look spiffy for any holiday pictures. The place was packed. The two barbers were great guys but they gave everybody the same too short haircut at 90 cents a head! Everybody was talking. The great Ted Williams had just retired and there was a debate going on about whether he was a better ballplayer than Joe DiMaggio. This was New England, 60 miles south of Boston, so Ted won by a 14 to 1 vote. Then someone mentioned the young rookie who would take Ted’s place in left field at Fenway Park in April, 1961. His name was Carl Yastrzemski and none of the Swamp Yankees in the shop could come close to pronouncing his name. One fellow said he thought Carl might be greater than Ted. An older man leaped out of the barber chair and shouted “Enoch, you are a chowder-head. No one will ever be better than Ted.” The whole place erupted with laughter and the talk continued. After my haircut, Bob got his. But when he was done, I did not want to leave the shop. It was too much fun. People from 10-80 years old were there, everyone commented, and the needling was something to experience.
When I listen to local Radio Sports, I get that same feeling that I had 50 years ago. The barbershop had a sense of community that few of us have in our busy lives in 2011. Well, for a few minutes in the car, Radio Sports gives it back to me.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, January 30, 2011
Wal*Mart is WalSmart
Last year, I wrote a post entitled “The Wal-Mart Conundrum”. It attempted to provide a balanced view of the world’s largest retailer (see Media Realism, May 26, 2010). The post generated a great deal of mail both pro and con. I promised to continue to monitor the retail powerhouse and that is what I will be reporting on in this entry.
A few years ago, William Marquard, a very solid business consultant, wrote a book entitled “Wal-Smart, What it Really Takes to Profit in a Wal*Mart World” (McGraw-Hill, 2007). It is an excellent book and I highly recommend it. He does cover some of the issues that Wal*Mart faces today and he does not duck the criticisms they often receive. What he does is paint the clearest picture that I have seen as to why they have been successful. He goes on to add that we now live in a Wal*Mart world and the secret to success for many companies is not to take Wal*Mart head on but rather to use their techniques to survive.
Boiling it down, he says it all comes down to what he calls “The Productivity Loop.” He describes it as follows: “The loop is an endless cycle—reduce costs, invest savings in lower prices, use lower prices to boost sales and generate higher profits to invest in reducing costs further”. When the loop is finished, Wal*Mart starts it all over again and he gives many good examples of the loop in action.
Wal*Mart staffers are relentless and continue to cut costs for shipping, communication, warehousing, handling, distribution, stocking, merchandising, labor schedules, and serving their customers. Their cutting edge work in RFID (Radio Frequency Identification) has slashed out of stocks and replacement costs.
Also, their corporate mantra is first to work out what NOT to do. Then they decide what to do and they try to solve problems one store at a time.
A big driver in their business is Everyday Low Pricing often called EDLP. Research has shown that it is the prime reason that people shop super-centers for groceries. EDLP allows them to run fewer ads (boo!), spend less on labor to change prices on shelves, less time on stock outs, and a great deal less time entering prices on company computers. This is especially important when you have 100,000 different products in a super-center.
Despite this, some consumers find EDLP boring so Wal*Mart still offers “rollbacks”. This helps blunt the “Hi-Lo Retailing” tactics that K-Mart, Albertson’s, Target (to a degree) and J.C. Penney use. These are simply gimmicks to generate store traffic such as big promotions, great sales, and lots of printed coupons.
By constantly going back to the productivity loop, Wal*Mart has changed the rules of the global economy. They have combined a new level of convenience, discount pricing, and above all, efficiency.
As we finally come out of this Great Recession (although terrific challenges lie ahead), we can learn a great deal from the Wal*Mart approach. Management at many firms still look to save almost exclusively by cutting people when times are tough and then are late to hire as things improve. I have never worked anywhere where waste was not dramatic in expenses, supplies, travel, or personal perks for senior staffers. Put the hammer down on expenses and you get the benefits normally associated with a nice spike in business. And, you can control it which is something that you cannot do with your customers!
Wal*Mart has its flaws to be sure. But, if we all acted Wal*Smart, our productivity would soar.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
A few years ago, William Marquard, a very solid business consultant, wrote a book entitled “Wal-Smart, What it Really Takes to Profit in a Wal*Mart World” (McGraw-Hill, 2007). It is an excellent book and I highly recommend it. He does cover some of the issues that Wal*Mart faces today and he does not duck the criticisms they often receive. What he does is paint the clearest picture that I have seen as to why they have been successful. He goes on to add that we now live in a Wal*Mart world and the secret to success for many companies is not to take Wal*Mart head on but rather to use their techniques to survive.
Boiling it down, he says it all comes down to what he calls “The Productivity Loop.” He describes it as follows: “The loop is an endless cycle—reduce costs, invest savings in lower prices, use lower prices to boost sales and generate higher profits to invest in reducing costs further”. When the loop is finished, Wal*Mart starts it all over again and he gives many good examples of the loop in action.
Wal*Mart staffers are relentless and continue to cut costs for shipping, communication, warehousing, handling, distribution, stocking, merchandising, labor schedules, and serving their customers. Their cutting edge work in RFID (Radio Frequency Identification) has slashed out of stocks and replacement costs.
Also, their corporate mantra is first to work out what NOT to do. Then they decide what to do and they try to solve problems one store at a time.
A big driver in their business is Everyday Low Pricing often called EDLP. Research has shown that it is the prime reason that people shop super-centers for groceries. EDLP allows them to run fewer ads (boo!), spend less on labor to change prices on shelves, less time on stock outs, and a great deal less time entering prices on company computers. This is especially important when you have 100,000 different products in a super-center.
Despite this, some consumers find EDLP boring so Wal*Mart still offers “rollbacks”. This helps blunt the “Hi-Lo Retailing” tactics that K-Mart, Albertson’s, Target (to a degree) and J.C. Penney use. These are simply gimmicks to generate store traffic such as big promotions, great sales, and lots of printed coupons.
By constantly going back to the productivity loop, Wal*Mart has changed the rules of the global economy. They have combined a new level of convenience, discount pricing, and above all, efficiency.
As we finally come out of this Great Recession (although terrific challenges lie ahead), we can learn a great deal from the Wal*Mart approach. Management at many firms still look to save almost exclusively by cutting people when times are tough and then are late to hire as things improve. I have never worked anywhere where waste was not dramatic in expenses, supplies, travel, or personal perks for senior staffers. Put the hammer down on expenses and you get the benefits normally associated with a nice spike in business. And, you can control it which is something that you cannot do with your customers!
Wal*Mart has its flaws to be sure. But, if we all acted Wal*Smart, our productivity would soar.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Friday, January 21, 2011
Groupon, Google, and The Future
In early December, I was surprised that on-line and media giant Google had made a $6 billion bid for Groupon. The daily deal site, Groupon, struck a lot of us as an excellent coupon site but not something that was or could be transformational such as Google itself, Netflix, You Tube, or Facebook.
A few days after the big bid, Groupon turned it down. The chatter was widely scattered—1) they should have taken the money and run, 2) they will soon be making $1 billion per year so why sell out for six times earnings?, 3)Google was crazy to offer way too much for it, to 4) this is nothing but an on-line version of Valpak and is not worth much.
In recent days, Goldman Sachs has announced that they would like to handle an Initial Public Offering (IPO) for Groupon.
Facts are fragmentary as Groupon is private but let us look at this as dispassionately as possible.
The companies like Google and Facebook really changed things in our lives. They are revolutionary. Their technologies are unique and not easy to replicate although many will try. Also, they grew almost on their own after the initial set up. Interestingly, it is the users who now do the heavy lifting for Google and Facebook. For example, a few thousand of you will read this blog this week. Google gave us the framework and you and I do the rest.
Don’t get me wrong. Groupon is every inch a real company. Their localized daily deals are tapping into the more than $130 billion per year in LOCAL advertising which has been a bit of an Achilles heel for Google to crack among others. Groupon, however, is very labor intensive. Today, Facebook has a half billion users and just under two thousand employees at last count. Now that is incredible scale! Groupon, with over 40 million subscribers has some three thousand employees. And, if they want to keep growing, they will have to add many more. To me, what separates them from other coupon options is that they have professional copywriters putting together their offers. They will need far more if they want to maintain high quality and add many more markets with DAILY offers. So, as they grow, they will have to add a lot more people, get bureaucratic and margins could stay flat.
Competitive threats abound. Living Social is an on-line alternative to Groupon that is getting some traction and more are starting or waiting in the wings. Because Groupon is not unique, they have no “moat around the franchise” as Warren Buffett likes to describe his favorite businesses.
To me, Groupon is also different. Thousands of on-line businesses were started a dozen years ago, and most failed quickly and miserably. Others like Google, EBay, Facebook have been huge successes. Groupon is somewhere in the middle. They use the new technology to deliver a homely and old service but they do it very, very well. They can be solidly profitable for sure but they do not strike me as being the next Google, Amazon, or Facebook.
One thing nags at me. Is this a mini-bubble all over again? In late 1999 and early 2000, dozens of internet companies had IPO’s and were pursued recklessly by many retail investors. The high water mark came in the 2000 Super Bowl where several new companies without any sales (!) advertised on the top rated broadcast at over $2 million for 30 seconds. Many were out of business within the year. With Goldman Sachs helping Facebook with a private placement and now Groupon possibly doing their own IPO, things may be getting a bit frothy again. Maybe we have a social media bubble developing.
Groupon is a solid operation but will face serious competition in the future. They are not the silver bullet that Google wants or needs to put a new spike in their growth beyond search. And, they will not be a transformational company that changes our lives in a big way.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
A few days after the big bid, Groupon turned it down. The chatter was widely scattered—1) they should have taken the money and run, 2) they will soon be making $1 billion per year so why sell out for six times earnings?, 3)Google was crazy to offer way too much for it, to 4) this is nothing but an on-line version of Valpak and is not worth much.
In recent days, Goldman Sachs has announced that they would like to handle an Initial Public Offering (IPO) for Groupon.
Facts are fragmentary as Groupon is private but let us look at this as dispassionately as possible.
The companies like Google and Facebook really changed things in our lives. They are revolutionary. Their technologies are unique and not easy to replicate although many will try. Also, they grew almost on their own after the initial set up. Interestingly, it is the users who now do the heavy lifting for Google and Facebook. For example, a few thousand of you will read this blog this week. Google gave us the framework and you and I do the rest.
Don’t get me wrong. Groupon is every inch a real company. Their localized daily deals are tapping into the more than $130 billion per year in LOCAL advertising which has been a bit of an Achilles heel for Google to crack among others. Groupon, however, is very labor intensive. Today, Facebook has a half billion users and just under two thousand employees at last count. Now that is incredible scale! Groupon, with over 40 million subscribers has some three thousand employees. And, if they want to keep growing, they will have to add many more. To me, what separates them from other coupon options is that they have professional copywriters putting together their offers. They will need far more if they want to maintain high quality and add many more markets with DAILY offers. So, as they grow, they will have to add a lot more people, get bureaucratic and margins could stay flat.
Competitive threats abound. Living Social is an on-line alternative to Groupon that is getting some traction and more are starting or waiting in the wings. Because Groupon is not unique, they have no “moat around the franchise” as Warren Buffett likes to describe his favorite businesses.
To me, Groupon is also different. Thousands of on-line businesses were started a dozen years ago, and most failed quickly and miserably. Others like Google, EBay, Facebook have been huge successes. Groupon is somewhere in the middle. They use the new technology to deliver a homely and old service but they do it very, very well. They can be solidly profitable for sure but they do not strike me as being the next Google, Amazon, or Facebook.
One thing nags at me. Is this a mini-bubble all over again? In late 1999 and early 2000, dozens of internet companies had IPO’s and were pursued recklessly by many retail investors. The high water mark came in the 2000 Super Bowl where several new companies without any sales (!) advertised on the top rated broadcast at over $2 million for 30 seconds. Many were out of business within the year. With Goldman Sachs helping Facebook with a private placement and now Groupon possibly doing their own IPO, things may be getting a bit frothy again. Maybe we have a social media bubble developing.
Groupon is a solid operation but will face serious competition in the future. They are not the silver bullet that Google wants or needs to put a new spike in their growth beyond search. And, they will not be a transformational company that changes our lives in a big way.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, January 12, 2011
TV--An Adult Conversation
These days we hear a lot from Washington about the need for adult conversations. Sometimes, the topic is Social Security, Medicaid/Medicare, the budget deficit, or the ongoing wars in Iraq and Afghanistan. To date, with few exceptions, I have yet to see much in the way of what I would categorize as an “adult conversation.”
Today, Media Realism is going to attempt to have such a discussion on the current state and future of television as an advertising medium in this country. The issue is multi-faceted and complex. Lots of people discuss one part of it but few try to look at it as a whole. Hence this post.
Basically, I see the following as key issues interwoven into the discussion:
1) Commercial avoidance
2) Free TV vs. Paid TV
3) Copy Lengths
4) The Future of TV in a digital world
1) Commercial Avoidance—this is the big one that does not get nearly as much attention as it truly merits. In December, we “crossed the Rubicon” where it now appears that 40% of American households have a DVR (time shifting device). This is a bombshell issue that I referred to as “The Elephant is All Our Offices” (see Media Realism, January 6, 2009). If people are taping shows, the odds are overwhelming that they are zipping through commercial breaks when they re-play them. Some studies indicate that the majority of DVR owners dutifully watch the whole two minute commercial break during playback. C’mon, get real.
Nielsen now provides primetime numbers based on live telecast plus three days and live telecast plus seven days. And, many top rated shows are heavily taped and re-played later. For a few decades, top rated shows have always been premium priced relative to lower rated fare on a cost per rating point basis. Now, with 40% of homes owning a DVR, I would be careful not to chase programming that is taped heavily. The premium that you pay may be much higher than you realize. Also, as the average rating of all programs have declined, is it worth it to pay a 200% premium for a show on a cost per eyeball basis? When programs delivered a 20-30 rating, absolutely. Today, however, the top rated shows do not deliver the unduplicated reach that they once did. On top of that, maybe 70% or more of the audience is deleting your commercials when they play it back.
I have monitored this closely for years. It is not just the DVR that has increased commercial avoidance. While remotes have been around since the late 1950’s, people became grazers across the landscape during commercial breaks when they had 100 plus cable channels or satellite options. Now, people hit a dozen channels or more during a break. During football and basketball season, millions watch two or three games at once as they surf for action during breaks. What I have noticed and can quantify is a direct correlation between DVR penetration and TV performance. Ten years ago, a four week TV buy for an established brand with 1100 rating points behind it could deliver a fairly predictable bump in sales. With each passing year, using the same daypart mix, you needed more weight to trigger sales to move up. Now, in many categories, that 1100 point buy of 2000 needs 1500 points in the brave new world of the 2010- 2011 season. Yes, there are other factors such as competition and a weak economy but target persons simply not seeing your commercials is a large part of it. And, it will only get worse with each passing year as DVR penetration rises and TV options grow.
2) Free TV vs. Paid TV—the press still harps on those people who “ditch the dish” or “cut the cable cord.” They brag about how they get by with rabbit ears or an antenna. Others often have no TV but rather rely on some combination of Netflix, Hulu, You Tube, a Roku Box, Apple, Amazon, or Crackle. After spending a lot of time researching this, most of these people tend to be young, very well educated types who lead hyper active lives. They are technically quite sophisticated and have no problem searching for 2-3 minutes to find something to watch. In an earlier post, I have mentioned that cable had an ace in the whole with sports. If you love sports, you need cable to get your weekly fix. Well, a few young readers angrily notified me that with P2P streams, they get all the sports that they want for free (do you know what P2P is? Better check it out).
My best estimate is that the number of domiciles giving up cable or satellite totally is about 70,000 households per month. If the trend grows to let’s say 200,000 per month, watch for some swift action by cable and satellite providers.
All of this raises an issue that I still have trouble understanding. Every day I continue to be amazed at how much is available online. Weeks can go by when all my series viewing is done via Netflix or Hulu.com. With Hulu, I may see 40% of the commercial load that I would see if I watched a program live. When will the networks and cable players, who are the content kings, start to block their programming to certain on line entities? I noticed with great interest that the major networks are not allowing Google TV to carry much of their programming. Clearly, Google could buy anyone out with their free cash flow. So, they fear Google. Yet, a danger does exist with these smaller players that continue to chip away at the advertiser supported audience. Every person who watches something on Netflix or something smaller and more exotic, hurts commercial TV and cable. As we look back years from now, part of TV’s decline may be death by a thousand small cuts.
By 2013, SNL Kagan projects that 46.3% of U.S. households will have at least one TV with a broadband connection and some 7% will depend on the web instead of some form of pay TV. That is only two years away!
3) Copy lengths—TV spots are getting shorter. Today, some 34% of the commercial load is 15 second commercials. With DVR activity plus the inevitable itchy trigger figure on the remote, fewer commercials are getting seen. I know of three professionals, whom I do not think know each other, who are running lots of five second commercials. The issue is simple for one—“if I run more spots, period, I have a better chance of being seen. And, if people are channel hopping, they may see my entire message.” Another pro says that, to him, TV spots are video billboards so five second announcements work really well. They all use TV successfully but they seem to be adapting more imaginatively than most to the developing trend of commercial avoidance. Interestingly, one is about 30, the second 50, and the third around 70 years old. Being smart spans all generations! Also, this trend would tend to really favor established brands and retailers where TV advertising can be used as a reminder. A new player needs longer copy to establish who they are to consumers.
4) TV Potential—20 years ago, everyone was buzzing about the potential of interactive TV. You would watch a political debate and phone in your preference or buy a product on-line immediately. More of this is coming and it will make TV far more dynamic medium that it is now. For example, sports fans will be able to connect with fellow zealots in real time across the country. This could be a great tie-in with mobile advertising and far more interesting than Twitter. Cable has lots of new products in the pipeline and Google TV should be able to provide some remarkably granular data on audience attentiveness that will be invaluable to advertisers going forward.
Does TV still work as ad medium? Of course it does! Not as well as it once did given fragmentation and new technology but it is still, for the moment, king. The average household now has access to 130 channels. No one watches them all but most Americans like TV and they REALLY like their current viewing habits. With an aging population, many will never “cut the cord” or “ditch the dish.” They are content with the status quo.
TV is still very much viable. Dismiss as nonsense those who say that they are going 100% digital in a year or two. Unless they have a boutique product, sales will tank and they will be jobless. At the same time, realize what is going on with television advertising and more importantly, the speed of it all. We are not in “revolution now” mode. The evolution, however, is steady and relentless and each of us needs to shift gears each year as the new reality unfolds.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Today, Media Realism is going to attempt to have such a discussion on the current state and future of television as an advertising medium in this country. The issue is multi-faceted and complex. Lots of people discuss one part of it but few try to look at it as a whole. Hence this post.
Basically, I see the following as key issues interwoven into the discussion:
1) Commercial avoidance
2) Free TV vs. Paid TV
3) Copy Lengths
4) The Future of TV in a digital world
1) Commercial Avoidance—this is the big one that does not get nearly as much attention as it truly merits. In December, we “crossed the Rubicon” where it now appears that 40% of American households have a DVR (time shifting device). This is a bombshell issue that I referred to as “The Elephant is All Our Offices” (see Media Realism, January 6, 2009). If people are taping shows, the odds are overwhelming that they are zipping through commercial breaks when they re-play them. Some studies indicate that the majority of DVR owners dutifully watch the whole two minute commercial break during playback. C’mon, get real.
Nielsen now provides primetime numbers based on live telecast plus three days and live telecast plus seven days. And, many top rated shows are heavily taped and re-played later. For a few decades, top rated shows have always been premium priced relative to lower rated fare on a cost per rating point basis. Now, with 40% of homes owning a DVR, I would be careful not to chase programming that is taped heavily. The premium that you pay may be much higher than you realize. Also, as the average rating of all programs have declined, is it worth it to pay a 200% premium for a show on a cost per eyeball basis? When programs delivered a 20-30 rating, absolutely. Today, however, the top rated shows do not deliver the unduplicated reach that they once did. On top of that, maybe 70% or more of the audience is deleting your commercials when they play it back.
I have monitored this closely for years. It is not just the DVR that has increased commercial avoidance. While remotes have been around since the late 1950’s, people became grazers across the landscape during commercial breaks when they had 100 plus cable channels or satellite options. Now, people hit a dozen channels or more during a break. During football and basketball season, millions watch two or three games at once as they surf for action during breaks. What I have noticed and can quantify is a direct correlation between DVR penetration and TV performance. Ten years ago, a four week TV buy for an established brand with 1100 rating points behind it could deliver a fairly predictable bump in sales. With each passing year, using the same daypart mix, you needed more weight to trigger sales to move up. Now, in many categories, that 1100 point buy of 2000 needs 1500 points in the brave new world of the 2010- 2011 season. Yes, there are other factors such as competition and a weak economy but target persons simply not seeing your commercials is a large part of it. And, it will only get worse with each passing year as DVR penetration rises and TV options grow.
2) Free TV vs. Paid TV—the press still harps on those people who “ditch the dish” or “cut the cable cord.” They brag about how they get by with rabbit ears or an antenna. Others often have no TV but rather rely on some combination of Netflix, Hulu, You Tube, a Roku Box, Apple, Amazon, or Crackle. After spending a lot of time researching this, most of these people tend to be young, very well educated types who lead hyper active lives. They are technically quite sophisticated and have no problem searching for 2-3 minutes to find something to watch. In an earlier post, I have mentioned that cable had an ace in the whole with sports. If you love sports, you need cable to get your weekly fix. Well, a few young readers angrily notified me that with P2P streams, they get all the sports that they want for free (do you know what P2P is? Better check it out).
My best estimate is that the number of domiciles giving up cable or satellite totally is about 70,000 households per month. If the trend grows to let’s say 200,000 per month, watch for some swift action by cable and satellite providers.
All of this raises an issue that I still have trouble understanding. Every day I continue to be amazed at how much is available online. Weeks can go by when all my series viewing is done via Netflix or Hulu.com. With Hulu, I may see 40% of the commercial load that I would see if I watched a program live. When will the networks and cable players, who are the content kings, start to block their programming to certain on line entities? I noticed with great interest that the major networks are not allowing Google TV to carry much of their programming. Clearly, Google could buy anyone out with their free cash flow. So, they fear Google. Yet, a danger does exist with these smaller players that continue to chip away at the advertiser supported audience. Every person who watches something on Netflix or something smaller and more exotic, hurts commercial TV and cable. As we look back years from now, part of TV’s decline may be death by a thousand small cuts.
By 2013, SNL Kagan projects that 46.3% of U.S. households will have at least one TV with a broadband connection and some 7% will depend on the web instead of some form of pay TV. That is only two years away!
3) Copy lengths—TV spots are getting shorter. Today, some 34% of the commercial load is 15 second commercials. With DVR activity plus the inevitable itchy trigger figure on the remote, fewer commercials are getting seen. I know of three professionals, whom I do not think know each other, who are running lots of five second commercials. The issue is simple for one—“if I run more spots, period, I have a better chance of being seen. And, if people are channel hopping, they may see my entire message.” Another pro says that, to him, TV spots are video billboards so five second announcements work really well. They all use TV successfully but they seem to be adapting more imaginatively than most to the developing trend of commercial avoidance. Interestingly, one is about 30, the second 50, and the third around 70 years old. Being smart spans all generations! Also, this trend would tend to really favor established brands and retailers where TV advertising can be used as a reminder. A new player needs longer copy to establish who they are to consumers.
4) TV Potential—20 years ago, everyone was buzzing about the potential of interactive TV. You would watch a political debate and phone in your preference or buy a product on-line immediately. More of this is coming and it will make TV far more dynamic medium that it is now. For example, sports fans will be able to connect with fellow zealots in real time across the country. This could be a great tie-in with mobile advertising and far more interesting than Twitter. Cable has lots of new products in the pipeline and Google TV should be able to provide some remarkably granular data on audience attentiveness that will be invaluable to advertisers going forward.
Does TV still work as ad medium? Of course it does! Not as well as it once did given fragmentation and new technology but it is still, for the moment, king. The average household now has access to 130 channels. No one watches them all but most Americans like TV and they REALLY like their current viewing habits. With an aging population, many will never “cut the cord” or “ditch the dish.” They are content with the status quo.
TV is still very much viable. Dismiss as nonsense those who say that they are going 100% digital in a year or two. Unless they have a boutique product, sales will tank and they will be jobless. At the same time, realize what is going on with television advertising and more importantly, the speed of it all. We are not in “revolution now” mode. The evolution, however, is steady and relentless and each of us needs to shift gears each year as the new reality unfolds.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, January 2, 2011
2011 Media Forecasts
Happy 2011! This promises to be an interesting, even watershed year in several media types so I decided to publish an annual forecast. Here goes:
The Economy
American consumers appear to be making a sincere effort to clean up their personal balance sheets. Christmas sales were surprisingly good but interestingly credit card balances did not soar. Few people seemed to be spending what they did not have. So it appears that our tepid and very fragile economic recovery will continue. Autos and finance seem to be recovering some which will help advertising. Housing remains quite sick and six major markets hit new lows Vis a Vis the 2006 high water mark for home values. Foreclosures continue to rise and may continue throughout the year.
What can go wrong? Inflation! Insanely, the U.S. government Consumer Price Index no longer includes food and fuel as components. With oil at $91 as we write $100+ plus per barrel is definitely in sight for 2011. If gas at the pump jumps to $4 per gallon, the economy could tank quickly. Grain and beef prices are rising as well. So, if food and fuel rise, other parts of the economy will suffer. We won’t stop going to work if gasoline is $4 per gallon and Americans surely will not stop eating. Every dollar that goes to those two items will be diverted from much retail activity and, sadly, much of the gasoline money will go overseas. So, while it looks positive, the 2011 economy may not grow as much as we hope.
Network TV
Each year, some pundit or two says that “this will be the last year of the obsolete network TV upfront marketplace.” And, each year, the upfront sets a new record (the upfront is when major advertisers buy up to 80-85% of the available network TV inventory in spring for the season that begins in September). Last year, I believe it was about $8.3 billion. Well, 2011 will be no exception. Expect a 5-6% increase even though the audiences are getting smaller, commercial avoidance is growing, and new alternatives abound. Why? The big players need it as a security blanket. They honestly do not know where to deploy the funds. Importantly, for all the attacks that it gets, network TV still raises awareness and pulls through sales better than anything else for many advertisers.
Cable TV
Should do even better than network TV! The choices are huge and a clever media team can put together a package of cable channels that can deliver excellent reach and minimize target waste. The promotional aspects of cable remain strong as well.
Spot TV
This local medium should have their best showing in several years even with virtually no political advertising. Auto and financials will lead the way in many markets. In 2008, many people postponed buying a new car due to job loss or fear of job loss. Now, the old clunker just has to be replaced. Local TV stations will benefit mightily here. Do not be surprised if billing is up 6% nationally.
The up trend will not be consistent, however. Some states and many municipalities are broke. Politicians are out of smoke and mirrors in some areas. They will have to fire government workers. California will be the place to watch. Once again, the inimitable Jerry Brown is governor of our most populous state. He was governor way back in 1975-83. Despite his quirky reputation in the press, he was an authentic fiscal hawk. When he left office California had a $5 billion surplus. Today, he inherits a mess. At 72, Brown knows this is his last hurrah. I think that he will do the right thing. To right the ship, he is going to have to cut the size of government in California significantly and, to do that, he will have to lay off thousands of state employees and have some kind of serious pension reform (translation=lowering benefits). The Sacramento TV market could suffer while a San Diego may not be affected much under this scenario. Watch the states, carefully. New York, Illinois, Rhode Island, and Arizona face similar challenges but I bet that Brown will be the most candid and act the fastest.
Local Cable
This medium has even better prospects than spot TV. Selling by zone, new networks, plus nice promotional support add up to a fine year as long as gasoline prices does not upset the applecart and hurt local retailer spending.
Spot Radio
This aging medium will have a decent year (+4%). Some markets will do better than others due to the local economy and aggressiveness of the sales teams. I must say that I admire the many local stations that have brought in many new advertisers to radio over the last two and a half years. They knew they had to scramble and many did.
Outdoor
The last mass medium should have a banner year. We would not be surprised if advertisers bid up the price 7-8% here nationally. Many traditional players who cut back some on TV may move to outdoor this year rather than on line options.
Magazines
This will be another year of challenge for many titles. Ad revenue will likely not increase for many so they will have to raise subscription prices some or go to non traditional sources of income with new applications. Some will succeed; many will not.
Newspaper
The last two years have been horrible for this industry. Double digit billing declines and sharp circulation losses were in evidence for many papers. Incredibly, in 1999, ad revenues for the industry were over $46 billion. Now they are roughly half that if 2011 projections hold.
All eyes are on the New York Times. Sometime early this year, they will launch their “metered pay wall” where they will charge on line readers for their product. That is not where my attention will be. The Times is an iconic institution and many readers (some in my own household!) will cheerfully pay something for it. What I will be hovering over are the dozens of other papers across the country that are also going to be experimenting with pay walls in 2011. Can pay walls work in Dayton or Missoula? To me, that will be the test. Also, can micro-payments be worked out from those who want to only read a columnist or two? Monetization of online readership may take many forms.
Others say the future of newspapers lie with the Kindle, IPad or other devices. Time will tell. This year we will learn a great deal. Also, can they ever get young adults back? Few that I survey have any interest in newspapers.
Mobile
This area should have the most explosive growth but it is starting from a very low base. Mobile advertising is much bigger in Europe and Asia than it is here in the U.S. Applications are growing and are increasingly sophisticated. There will be lots of testing here but percents of budgets will likely remain under 2% for most advertisers. This is a great long term play. Agencies need to learn all they can about mobile now.
Internet
Continued solid double digit growth here is a slam dunk. Google will keep expanding and search dollars should grow nicely.
Social Media
This area has all the sizzle and some of it is deserved. Facebook had a stunning 151 million unique visitors in October. And, nearly one in four page views took place on Facebook.com. This was nearly 4 times what You Tube delivered over the same period. So, Facebook is primed for another explosive year of growth.
This may be only a straw in the wind but I see a possible shakeout coming across social media that could hit this year. My reasons are pretty straightforward:
1) A lot of people are there only because they think it is the thing to do. Mid-sized agencies are often on Facebook because they want to appear sophisticated to their clients and the clients, not wanting to appear out of it, invariably go along.
2) In many cases, the wrong people are doing it. All too many set up a Facebook account for a client and then ignore it. This is deadly. Set it and forget it cannot work in social media. Experienced hands need to monitor activity, answer complaints, and keep the material fresh. It stuns me how many obsolete coupons are still up on sites. Or weeks go by with no commentary on consumer actions.
3) Facebook is almost in a bubble. It reminds me of the dot.com craze in the stock market in late 1999 and early 2000. Expectations are so juiced up that it almost has to end badly for some people. I have heard more than one alleged professional say “forget TV and database management. Facebook will bail you out.” We are heading for a train wreck which is sad as social media has a brilliant future for brands and also in B to B action. Lots of people are going to get burned here. Make sure that you are in experienced hands and that you work the social media of all types very aggressively. If you are not going to be hands on, don’t do it!
4) Some candid friends at agencies have told me that they cannot prove that social media is working at all for their clients. Others say that they have no idea how much it contributes to sales. The whole concept of creating a relationship rather than direct selling is confusing to mature marketers. Some may pull the plug unless a direct link between their social media activity and sales can be determined.
Ad Agencies
For the first time in several years, agencies should have a decent year if the economy holds together reasonably well. The big international holding companies should have a nice year as global billing should be up at least 6%. And, if autos and finance rebound domestically the mid-sized players and small fry should see some daylight as well. Raising fees will still be dicey and if you work at an agency, don’t expect much of a raise (again). One bright spot is that some larger companies are unbundling projects and new media to smaller specialty firms rather than getting the slow service and high costs of their major agencies. If you TRULY have a specialty here, you may do well.
On balance, 2011 will be a pretty good year if the economy keeps creeping along.
I wish all of you a prosperous 2011.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The Economy
American consumers appear to be making a sincere effort to clean up their personal balance sheets. Christmas sales were surprisingly good but interestingly credit card balances did not soar. Few people seemed to be spending what they did not have. So it appears that our tepid and very fragile economic recovery will continue. Autos and finance seem to be recovering some which will help advertising. Housing remains quite sick and six major markets hit new lows Vis a Vis the 2006 high water mark for home values. Foreclosures continue to rise and may continue throughout the year.
What can go wrong? Inflation! Insanely, the U.S. government Consumer Price Index no longer includes food and fuel as components. With oil at $91 as we write $100+ plus per barrel is definitely in sight for 2011. If gas at the pump jumps to $4 per gallon, the economy could tank quickly. Grain and beef prices are rising as well. So, if food and fuel rise, other parts of the economy will suffer. We won’t stop going to work if gasoline is $4 per gallon and Americans surely will not stop eating. Every dollar that goes to those two items will be diverted from much retail activity and, sadly, much of the gasoline money will go overseas. So, while it looks positive, the 2011 economy may not grow as much as we hope.
Network TV
Each year, some pundit or two says that “this will be the last year of the obsolete network TV upfront marketplace.” And, each year, the upfront sets a new record (the upfront is when major advertisers buy up to 80-85% of the available network TV inventory in spring for the season that begins in September). Last year, I believe it was about $8.3 billion. Well, 2011 will be no exception. Expect a 5-6% increase even though the audiences are getting smaller, commercial avoidance is growing, and new alternatives abound. Why? The big players need it as a security blanket. They honestly do not know where to deploy the funds. Importantly, for all the attacks that it gets, network TV still raises awareness and pulls through sales better than anything else for many advertisers.
Cable TV
Should do even better than network TV! The choices are huge and a clever media team can put together a package of cable channels that can deliver excellent reach and minimize target waste. The promotional aspects of cable remain strong as well.
Spot TV
This local medium should have their best showing in several years even with virtually no political advertising. Auto and financials will lead the way in many markets. In 2008, many people postponed buying a new car due to job loss or fear of job loss. Now, the old clunker just has to be replaced. Local TV stations will benefit mightily here. Do not be surprised if billing is up 6% nationally.
The up trend will not be consistent, however. Some states and many municipalities are broke. Politicians are out of smoke and mirrors in some areas. They will have to fire government workers. California will be the place to watch. Once again, the inimitable Jerry Brown is governor of our most populous state. He was governor way back in 1975-83. Despite his quirky reputation in the press, he was an authentic fiscal hawk. When he left office California had a $5 billion surplus. Today, he inherits a mess. At 72, Brown knows this is his last hurrah. I think that he will do the right thing. To right the ship, he is going to have to cut the size of government in California significantly and, to do that, he will have to lay off thousands of state employees and have some kind of serious pension reform (translation=lowering benefits). The Sacramento TV market could suffer while a San Diego may not be affected much under this scenario. Watch the states, carefully. New York, Illinois, Rhode Island, and Arizona face similar challenges but I bet that Brown will be the most candid and act the fastest.
Local Cable
This medium has even better prospects than spot TV. Selling by zone, new networks, plus nice promotional support add up to a fine year as long as gasoline prices does not upset the applecart and hurt local retailer spending.
Spot Radio
This aging medium will have a decent year (+4%). Some markets will do better than others due to the local economy and aggressiveness of the sales teams. I must say that I admire the many local stations that have brought in many new advertisers to radio over the last two and a half years. They knew they had to scramble and many did.
Outdoor
The last mass medium should have a banner year. We would not be surprised if advertisers bid up the price 7-8% here nationally. Many traditional players who cut back some on TV may move to outdoor this year rather than on line options.
Magazines
This will be another year of challenge for many titles. Ad revenue will likely not increase for many so they will have to raise subscription prices some or go to non traditional sources of income with new applications. Some will succeed; many will not.
Newspaper
The last two years have been horrible for this industry. Double digit billing declines and sharp circulation losses were in evidence for many papers. Incredibly, in 1999, ad revenues for the industry were over $46 billion. Now they are roughly half that if 2011 projections hold.
All eyes are on the New York Times. Sometime early this year, they will launch their “metered pay wall” where they will charge on line readers for their product. That is not where my attention will be. The Times is an iconic institution and many readers (some in my own household!) will cheerfully pay something for it. What I will be hovering over are the dozens of other papers across the country that are also going to be experimenting with pay walls in 2011. Can pay walls work in Dayton or Missoula? To me, that will be the test. Also, can micro-payments be worked out from those who want to only read a columnist or two? Monetization of online readership may take many forms.
Others say the future of newspapers lie with the Kindle, IPad or other devices. Time will tell. This year we will learn a great deal. Also, can they ever get young adults back? Few that I survey have any interest in newspapers.
Mobile
This area should have the most explosive growth but it is starting from a very low base. Mobile advertising is much bigger in Europe and Asia than it is here in the U.S. Applications are growing and are increasingly sophisticated. There will be lots of testing here but percents of budgets will likely remain under 2% for most advertisers. This is a great long term play. Agencies need to learn all they can about mobile now.
Internet
Continued solid double digit growth here is a slam dunk. Google will keep expanding and search dollars should grow nicely.
Social Media
This area has all the sizzle and some of it is deserved. Facebook had a stunning 151 million unique visitors in October. And, nearly one in four page views took place on Facebook.com. This was nearly 4 times what You Tube delivered over the same period. So, Facebook is primed for another explosive year of growth.
This may be only a straw in the wind but I see a possible shakeout coming across social media that could hit this year. My reasons are pretty straightforward:
1) A lot of people are there only because they think it is the thing to do. Mid-sized agencies are often on Facebook because they want to appear sophisticated to their clients and the clients, not wanting to appear out of it, invariably go along.
2) In many cases, the wrong people are doing it. All too many set up a Facebook account for a client and then ignore it. This is deadly. Set it and forget it cannot work in social media. Experienced hands need to monitor activity, answer complaints, and keep the material fresh. It stuns me how many obsolete coupons are still up on sites. Or weeks go by with no commentary on consumer actions.
3) Facebook is almost in a bubble. It reminds me of the dot.com craze in the stock market in late 1999 and early 2000. Expectations are so juiced up that it almost has to end badly for some people. I have heard more than one alleged professional say “forget TV and database management. Facebook will bail you out.” We are heading for a train wreck which is sad as social media has a brilliant future for brands and also in B to B action. Lots of people are going to get burned here. Make sure that you are in experienced hands and that you work the social media of all types very aggressively. If you are not going to be hands on, don’t do it!
4) Some candid friends at agencies have told me that they cannot prove that social media is working at all for their clients. Others say that they have no idea how much it contributes to sales. The whole concept of creating a relationship rather than direct selling is confusing to mature marketers. Some may pull the plug unless a direct link between their social media activity and sales can be determined.
Ad Agencies
For the first time in several years, agencies should have a decent year if the economy holds together reasonably well. The big international holding companies should have a nice year as global billing should be up at least 6%. And, if autos and finance rebound domestically the mid-sized players and small fry should see some daylight as well. Raising fees will still be dicey and if you work at an agency, don’t expect much of a raise (again). One bright spot is that some larger companies are unbundling projects and new media to smaller specialty firms rather than getting the slow service and high costs of their major agencies. If you TRULY have a specialty here, you may do well.
On balance, 2011 will be a pretty good year if the economy keeps creeping along.
I wish all of you a prosperous 2011.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Subscribe to:
Posts (Atom)
