One of the key concepts I learned as a geology major at Williams College comes in very handy when analyzing the changes in the TV advertising business over the past few years. Plate tectonics describes giant slabs of the earth's crust that contain the continents and are propelled by the upwelling of molten layers deep in the earth's core. As plate boundaries grind against each other or are pulled apart by these forces, the mega-structures of the earth are formed: mountain ranges, undersea trenches and ocean basins. The San Andreas Fault is probably the best known example of a plate boundary. For decades, or even centuries, there is no apparent movement but once the massive forces can no longer be contained, the plates can move a dramatic distance within seconds, such as the 1989 Loma Prieta quake which exhibited a 7 foot shift in the position of two plates.
What the heck does this have to do with TV advertising? Just as this plate movement builds up tremendous pressures, so have the forces of technology, advertiser demands for better targeting, and the drift of dollars away from TV to digital put pressure on the TV networks. But just as the plates initially resist moving, there has been little movement in TV advertising: The upfronts last year recovered from the down years of 2014 to 2016, there has been little progress in addressable TV, and Nielsen still reigns as the currency of the market. We've seen the TV business resist these technology-driven pressures for at least a decade, so the question is whether the business will gradually change over the next five to 10 years, or will a San Andreas style quake transform the industry in a matter of months?
The explosion of TV channels, on-demand content and OTT services continues to erode audiences. On the whole, Forrester’s Technographic data shows that consumers in EU5 countries (UK, FR, DE, IT, SP) watch on average as much TV in 2016 as they did in 2014. But the split is shifting in favor of online TV, in particular among millennials which will become increasingly difficult to reach through conventional linear TV media plans.
The fragmentation of TV content across sources shrinks audience sizes, and makes TV planning inefficient. Programmatic TV could be the answer to cross-screen, audience based planning, but the road is long and paved with obstacles. Programmatic buying is penetrating pockets of broadcaster inventory, but the level of implementation varies across countries, across broadcaster and across inventory type. The big question, of course, is whether programmatic ever makes it to linear TV advertising and becomes a viable tool to plan TV campaigns.
What is often missing from this discussion is the journey TV broadcasters have embarked on to collect and activate audience insights across their properties, and the wealth of data that is already available to test or experiment with audience-based buying within their inventory.
In the “European Marketers Get Ready For Data-Driven TV Planning" report, I break down how various TV / video inventory types will transition to different forms of programmatic over time, and explain why marketers will not have to wait for programmatic to infuse data intelligence into their TV media plans. Read the report to find out commonly missed opportunities in terms of audience optimization in TV planning.
Since the introduction of the DVR more than a decade ago, consumers have learned they don't have to conform their lives to broadcast programmers' schedules in order to watch their favorite TV shows.
Along come online sources like HuluPlus, or the network's own websites promise even more convenience: Get any episode of any show with no need to remember to record it. But adoption is hampered by the awkward viewing experience of the cramped screens of laptops, tablets, and smartphones.
Welcome to TV viewing in the Age of the Customer. Consumers want their favorite shows when they want them, on their preferred device, with little or no effort on their part.
Linear TV, DVRs and today's online viewing experience all fail on at least one of these dimensions. Viewers increasingly cobble together a mix of sources and devices to create this level of convenience, and each of these players vies to capture more of viewers' time by improving its offering.
In my new report, "How Online Video Will Challenge DVRs' Role," I delve into how these two sources of video entertainment vie to meet consumers' increasing expectations. DVRs have the advantage of incumbency, while online viewing offers greater flexibility.
I just wrapped up my report on the future of television: “Digital Disruption Rattles the TV Ad Market.” And, while I was interviewing and exchanging views with advertisers and senior TV industry executives, a clear and surprising find emerged…
I wasn’t surprised to hear visions of dynamically targeted ads to deliver the right message to the right household. Neither was I surprised by the dream of synching messaging on the living room screen to the screen in people’s hands. Nor was I surprised that many in the industry still want to shoehorn these new ad opportunities into the old Nielsen rating model of the TV ad market.
What surprised me was the general optimistic outlook that these new developments will bring even more dollars to the TV ad market.
For decades, talk of the impact of cable television, VCRs, DVRs, online advertising, etc. has usually predicted the end of TV’s reign as marketing’s most powerful medium. New technologies would sap advertising effectiveness and splinter the audience. New advertising opportunities would be more engaging and measureable than the soft branding of TV.
But the fact is, the opposite happened: TV is stronger and more important than ever. Even as prime time TV audiences have shrunk, fragmenting across hundreds of channels on the cable spectrum, the rest of the media landscape has fragmented and faded even faster.
But perhaps I should amend my statement that TV is more important than ever: something like “video entertainment content originally created to be broadcast on television networks is stronger and more important than ever.” As these programs find new audiences, on new devices, at new times in viewers’ lives, it creates opportunities for video advertising to draw more dollars and more advertisers to it.
Every few years we marketers think we have digital figured out. First it was websites, then it was about eBusiness strategy, then came social, and more recently, we're all about mobile. These are all good things, to be sure, but conquering any one of these – or all of them together – still misses the larger point: Digital disruption is bigger than any of them on their own, and it is nowhere near finished turning the marketing and advertising world upside down.
Consider the Super Bowl. Every year the big game captures more eyeballs and, along with them, more ad dollars. Some point to continued TV spend as evidence that people are in denial about the role of digital, as Adobe did with its clever spoof on Super Bowl ads this year. But note that some of the most prominent ads in Super Bowl 2013 encouraged an expressly digital component – from Budweiser's name-the-pony campaign to Oreo's crowd-pleasing Cream or Cookie campaign, tagged with "Choose your side on Instagram @OREO." The most elaborate of these was the Coke Chase, a Twitter-based real-time voting campaign that earned @cocacola nearly a thousand more Twitter followers on game day, according to Twittercounter.com.
These are worthy – and relatively cheap – forays into making TV ads more, rather than less, relevant in a digitally disruptive era. But these all miss the broader point about the power of digital. Digital won't just disrupt the way brands communicate with consumers, it will afford those brands the chance to build a direct digital relationship with those consumers. If they don't blow it, standing idle while someone else grabs that relationship first.
I'm pleased to announce that Forrester's five year forecast is now complete and live on Forrester's site. It feels like this has been a long time in coming from my side too! Please see the full report for detailed explanations of the trends affecting overall marketing budgets and the growth of the channel in the forecast.
You may remember we previewed our forecast at Forrester's Marketing Forum at the end of April. If you cross reference this post to the one we posted as follow up to the forum, you will notice that the "% of all advertising spend" has changed. The absolute forecast is still the same, we just changed this calculation to make sure it was done in the same way as in years past. See below for the most recent release:
This research will certainly help marketers plan their channel strategies.
Nick Johnson the VP of Multimedia Sales for NBC Universal shared some great data and lessons learned from NBC's "ownership" of the Beijing Olympics.
He called the Olympics a cultural phenomenon -- and for more reasons than their presence in China and all of the political hullaballoo that brought about. From a media perspective, the games brought about significant behavior change among American consumers:
76% stayed up late to watch events 48% changed their routine in order to watch events when they were on 36% delayed doing things in order to watch events
On top of the high volume of television watchers: 56 million unique users came to NBC's site to watch events, get content, see replays NBC saw 12.3 million video downloads, AND it saw 16.4 million unique mobile users
Johnson's conclusions from the research NBC conducted following the Olympics:
1) Television can still be king. The Olympics were hugely successful at driving a mass audience for NBC
AdAge just announced Gino Bona, a sales exec out of Portsmouth, NH as the winner of the NFL's "create your own Super Bowl commercial" contest. And the NFL is not the only sponsor of viewer-created commercials. Chevy and Frito-Lay sponsored similar contests for their own Super Bowl spots.
Then last week the news broke about the entrepreneurial "J.P" who was seeking corporate sponsors to pay him to propose to his girlfriend during a Super Bowl commercial. The notion of using consumers to create ads isn't new and clearly consumers are actively creating their own media. But these last few stories got me to thinking: What happens now that not only are consumers creating media, but consumer actually are media? Reality TV is huge. And I would bet most of us have some fairly close connection with someone who has been on a reality TV show (my ex-boyfriend was fraternity brothers with the guy who "won" ABC's second season of "The Bachelorette.").
Last week Charlene Li and I talked with Josh Walker-- a Forrester alum and all around smart guy -- about his new company CityVoter. Here’s what CityVoter does and why it matters to media outlets, local businesses and national advertisers: