TV Missionary

The future doesn't matter?

The Chief Investment Officer from a major holding company agency recently gave his forecast for the depth and severity of the current advertising recession.  He added his opinion regarding trends in media and how they are likely to impact the industry. On its own there's nothing wrong with that.  He's qualified to do so and I'm interested in his point-of-view on these topics.  

What bothered me as I read his comments is that for today's marketers there won't be a future if they don't survive Q1 2009.  General Motors and Chrysler may not survive February!  What I'm looking for is insight into what the top minds in the advertising industry are doing differently right now to make an impact on their clients business.  I understand that branding goes way beyond short-term metrics but I believe the industry has let its clients down.  Too safe for too long and now (hopefully not) too late.

The future doesn't matter.... for now. 

Strategy first

Most of the media professionals I know confuse tactics with strategy.  I read today about Canoe Ventures, the cable MSO consortium formed to unify tech platforms and deliver true interactivity, addressability, etc.

The well written and informative column was slightly flawed and it shows why its taking so long for our industry to get it.  

Creative versioning is one obstacle to TV segmentation/addressability. It's a tactical tool to meet a strategic objective to better target. Segmenting the TV marketplace is also a tactic. A media solution who's means are to achieve the same end. Tactics shouldn't be prerequisites for tactics. That kind of thinking is indicative of an industry who's taking way too long to get things done. Where are the real strategists? Write a good one (whoever you are: client, agency) and your tactics will become easier to execute.

Stop the presses

Sometimes there's a perfect storm.  Technology meets competition meets severe recession. It saddens me to watch the demise of the newspaper industry. They survived the invention of broadcast media. Somehow sight, sound and motion weren't enough to completely replace the media consumption experience of newspapers.  Yet the internet has its foot on the throat of even the most venerable print institutions.

Why?  Speed. Get right down to it and there didn't seem to be much difference between a morning/evening print edition and the frequency with which we could consume broadcast news.  All-news radio even shortened it to 22 minutes.  "You give us 22 minutes, we give you the world". 

Moore's law was just too much.  In 15 years the digital onslaught has become overwhelming. From the world's most respected journalists to the millions of users who self-generate, the news is instantaneous. It doesn't even have to be accurate.  Speed kills.

Don't shoot the messenger

A man in Missouri shot his TV frustrated by digital conversion.  When consumer advocates say that the DTV transition poses a public safety problem this is not what they were afraid of.  I don't want anyone (who hasn't installed a converter) to lose access to news and information but it's unlikely there will be significantly less of them on June 12 then there were on Feb. 17.

There's always turbulence on the front edge of change and even the most frustrated consumers will be pulled into the future by June 12. Nielsen on the other hand is currently gathering TV ratings data from 25,000 metered households and 1.6 million diaries.  That's right. 25,000 digitally, 1.6 million by hand.  

In other words, the least prepared, slowest-to-change members of the population will have digital TV or nothing.  And Nielsen, the industry standard bearer and currency arbiter, is still using pad and pencil.

Is an impression an impression?

Now comes the hard part.

Next month the 4As (American Association of Advertising Agencies) will meet to discuss converting the spot TV currency from CPP (cost per point) to CPM (cost per thousand).  This is a dramatic (overdue) change in that it will allow package integration with other media including internet, mobile, newspaper and even network television which are all priced based on CPM.  

Here's where it gets tricky: Everyone knows a targeted impression is worth more than a non-targeted, broad reach impression and we've just added a new facet to the definition of targeted.

Web publishers and digital media buyers have figured it out.  A general market ad network garners a lower CPM than a category vertical. I have less faith in the television industry.  Why? Data. On the digital side they get it, on the linear side they don't.  There's another problem.  The real value of targeted television goes way beyond the spot TV market to sub-DMA and eventually to the household. The value of the targeted geography is only as good as the data, and the data can not be syndicated. Its different for every marketer.  Don't think Nielsen is too happy about this either.  They could have helped make this conversion 10 years ago but there is no incentive for them to eliminate the need for syndicated data as television currency. 

Paddling Upstream

Today Mediaweek published an article Comcast: Canoe to keep paddling in '09.  

http://www.mediaweek.com/mw/content_display/news/cable-tv/e3i120e70a153d46e4bd9845bef98c6d0d5#3

For the most part it's a report based on comments from Comcast's quarterly earnings call.  I have no qualms with the content of the article but it misses the point.  In fairness to the writer the facts are the facts: Canoe's goal is to unify the platforms from multiple cable MSOs to achieve scaled addressability and interactivity. I think there is a story behind the story from two important perspectives.

1. Half of what the article says Canoe is going to do can be done today:  "If all goes according to plan, Canoe will allow advertisers to target neighborhoods or demographic zones by income and other census-level data, with the ultimate goal of targeting ads to individual households."  HH addressability is the holy grail but cable system targeting has been done for years.  What isn't being done are the data analytics to support such a labor intensive media execution.  (Not the media's fault by the way.)

2. Targeting by income or census-level data is misguided.  It begins and ends with behavioral/purchase data. Adults 18-49 is meaningless.  Even HH Income $100k+ is irrelevant.  $100,000 income in Marin county, CA is different than $100,000 income in Des Moines.  It's a waste of time.  Today only geography and behavior matter. Internet ad anyone? 

The television/media/advertising agency industries must let go of the past and let go now.

Segmentation: DMAs don't matter anymore

Segmentation, as a television targeting strategy, is not complicated.  A national advertiser can reach the largest number of viewers for the lowest CPM (cost per thousand impressions) on broadcast and cable networks.  One advertising message is distributed within a program to all television households that receive that network.

National advertisers may also utilize "spot" television.  A spot television strategy takes advantage of Nielsen Media Research's DMA (Designated Market Area) measurement.  DMAs typically coincide with metropolitan areas or, more accurately, to the geography that could be covered by a television station's antennae signal.  There are 210 DMAs in the United States.  The currency for spot television is CPP (cost per rating point).  If CPP and CPM were equivelized it is less efficient (more expensive per viewer) to buy spot television than network television. If 50% of a luxury car brand's sales are in 8 DMAs it would then become effective to use spot television in those DMAs.  

While DMAs are still the standard Nielsen geographical universe measurement for spot television they are completely irrelevant for geographical television segmentation because less than 20% of all households receive their television signal via rabbit ears.  The rest have wired cable, satellite or telephonic fiber optics.  Cable systems can segment DMAs by "head end" (usually ranging from 2-3 head ends in a DMA to 60-70) or provide "interconnects" which group all head ends in a DMA together in order to model the antiquated TV-station DMA geography and best compete for spot television advertising dollars. 

In a world where there are over 2400 cable head ends, where data analytics can measure the targeting leverage of sub-DMA segmentation, and media vendors can execute segmented media schedules DMAs lose their relevance.  If only an industry-standard marketplace existed.

Television: A Medium

Someone once called television a "medium" because it is neither rare nor well done.

The comment clearly refers to television programming but the quality of programming doesn't concern me. The remote control remedies that. 

Television's power as a medium was originally derived by its unique sight/sound/motion and scale.  Today broadcast networks reach over 100 million households.  Most cable nets...over 70 million.

Television segmentation and addressability are the technological promise for TVs future.  When will marketers achieve scaled household addressability?  It doesn't matter.  Data analytics, geographical-, and behavioral targeting tools available today are game changers that can be leveraged today but aren't.  Let's discuss why.