Unilever Buys Dollar Shave Club: The End Of The Mass Marketing Era?

When I read the news of Unilever buying Dollar Shave Club I couldn't help but think of an advisory session I did for a big CPG firm with colleagues Melissa Parrish and Brigitte Majewski a few months ago. One big topic of conversation was how to build a brand today in a media and marketing world that is so fragmented. We had used Dollar Shave Club as an example of how the rules have changed in the post-digital era.

And then I came across this post on the Stratechery blog that analyzes DSC and its disruptive strategy extraordinarily well.

I can't help but read from this the end of the mass marketing era whose rules P&G is rightly famous for codifying and rigorously training its brand managers in. My conclusions from this example include:

The end of product innovation. Really interesting story about how Gillette's 5-blade razor bombed. Basically, products reach a point of development that no further improvement is needed. Or at least the added cost of the innovative product didn't bring commensurate increase in performance to justify it. The model of continuous product innovation hit the wall -- certainly a product strategy driven out of a lab and corporate goal to merely increase price and profits hits the wall. DCS listened to customers and innovated not the product, but the pricing and distribution model to solve a different problem than delivering a "better" shave.

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Introducing Unified Marketing Impact Analytics

“Hey…you got chocolate in my peanut butter!”

This line from a 1980’s Reese’s Peanut Butter Cups campaign is a classic in advertising…and aptly describes what is happening in marketing measurement today. (For a blast from the past click here to view this oldie!)

Two proven techniques that work great separately – attribution and marketing mix modeling – work even better when merged into a unified measurement approach.

I suspected the convergence of different marketing analytics approaches was inevitable so earlier this year, my colleague Tina Moffett and I began sharing our ideas on where marketing measurement was headed.   We agreed each approach provides only a partial answer to the marketing ROI puzzle and they shared enough methodological similarity that merging them was plausible.

We’ve just completed research that shows that our intuition is correct and in our new report "Embrace Unified Marketing Impact Analytics to Deliver Value Across Interactions" we dubbed this converged approach as Unified Marketing Impact Analytics (UMIA), defining it as:

blend of statistical techniques that assigns business value to each element of the marketing mix at both a strategic and tactical level. 

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Video Consumption Behavior -- Corroborating Evidence

Sorry for that rather legalistic/nerdy headline. As I mentioned in my last post, Forrester's data on Making Sense of New Video Consumption Behaviors stimulated a discussion of methodologies, and particularly the challenges with our self-reported survey methodology. I agree, this approach has some flaws, as does any research methodology. That's why we're trained here to look for multiple data points and then to interpret them to give as accurate a view as we can of what's happening in the market.

So I just came across an article that I had read while I was writing that report which provides additional evidence. In it, NBC Universal's AlanWurtzel describes the digital viewing numbers they are beginning to provide, using behavior data from Nielsen, Rentrak, Omniture, and Hulu. These numbers point in the same direction, and perhaps point to even larger changes than Forrester's data indicate.

The article cites numbers for two shows, on a live-plus-seven-day basis. For The Blacklist, digital viewing accounts for 17% of the total viewership, while digital views are 37% of Parks & Recreation's total.

These data sets and NBC's methodology have their own gaps and weaknesses, no doubt. But I believe that is a matter of degree, not direction. These numbers -- and Forrester's -- don't have the degree of precision needed for the currency of the TV market, but they clearly indicate that a significant change is happening in consumer viewing behavior that advertisers need to factor into their planning. 

More On New Video Consumption Behaviors

The press coverage of my report "Making Sense of New Video Consumption Behaviors" -- and especially the number they highlighted that 46% of the "core" TV audience watches linear TV in a typical month -- raised a lot of questions (and skepticism!) on the Research Wonks list serve. I figure if they had those questions, others might, too, so here is the response I posted there:

"The media always looks for the headline-grabbing, shocking, number and the 46% watch linear certainly qualifies. I used this number in passing to set up the report so before I address the methodology questions, let me share the core conclusion of the report: consumer video consumption behaviors are different enough across generations that planners need to break out of past planning routines and account for these different behaviors. Toward the end of the report I say:

A goal of 100 gross rating points (GRPs) against an 18-to-49 audience is merely an average across this entire audience; if the placements are skewed to linear TV, it will likely deliver too many ads to the 35-to-49 segment and not deliver enough to the 18-to-34 group.

The 46% number doesn't comment on the number of hours, and the data we capture is very broad here, but even it shows that linear is still the larger number of hours.

In the report I say that linear is the “main dish” that must be complemented with “side dishes” like streamed sources and addressable plus “desserts” like professional short-form video to present a balanced video ad diet. (Yes, I really tortured that metaphor!)

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Is Your TV Advertising Plan Like Tuna Noodle Casserole?

Even when I was a kid, tuna noodle casserole was a bit outdated, a relic of the 1950s, when recipes on the side of a soup can were considered cuisine. But if your TV plan is heavily reliant on linear TV, it's a lot like that casserole: not appealing to younger viewers whose tastes are more diverse.

I certainly read a lot about how Millennials are leading the growth of streamed TV viewing, and I've seen the occasional stat to back it up. It certainly makes sense. But I decided to dig into Forrester's Consumer Technographics® data to flesh out the picture in this report which was just published: Making Sense of New Video Consumption Behavior.

No surprise; the numbers support the generally accepted wisdom of Millennials being the ones most eagerly adopting new ways to view favorite shows: 34% of Millennials (i.e., 18-to-34-year-olds) report watching 4 hours or more of TV online weekly versus only 12% of Gen Xers (ages 35 to 48) and Younger Boomers (ages 49 to 58). Not that Millennials have totally abandoned linear: 55% still watch 4+ hours weekly compared with 73% of the older segments. But clearly, their video diet is more diverse.

The report also confirms that clips and short form content are more popular on mobile devices than full-lengths shows. 

So now we've confirmed what people have suspected all along . . .

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The Bundle Begins To Crumble

The past week has been big for the TV business, and the once indivisible bundle of networks that come in pay-TV subscriptions has begun to unravel:

  • ESPN and the NBA hinted that they would launch a streaming service that viewers could subscribe to without a cable, satellite, or telco pay-TV subscription. 
  • HBO wasn't so subtle -- They flat out announced they will launch a standalone HBO Go subscription in 2015.
  • CBS announced a new All Access product, offering current season series not available on other streaming services, plus a library of past episodes and shows.
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New Streaming Service From ESPN And The NBA Rumored: No Cable Subscription Required

This morning, the NBA and ESPN are announcing terms of the renewal of their licensing contract. The numbers are huge, but that's not what caught my eye.

Early reports say that ESPN will launch a streaming service for live games — and viewers won't need a cable or satellite subscription to view them.

This is the first crack in the structure of the television business that has been in place for decades, in which the programmers and MVPDs (multichannel video programming distributors, aka cable, satellite, and telco companies) have a strong co-dependence and why today viewers must authenticate their cable/satellite/telco subscription in order to stream programming from the TV-everywhere app or network app.

Will other networks and programmers follow suit? Will more consumers cut the cord if they can now get their live sports content online?

Stay tuned for more details . . .

Update 11:45 eastern time. 

I just watched the video of the press conference. Adam Silver, commissioner of the NBA, and John Skipper, president of ESPN, both mentioned the new OTT service, but there are scant details and a promise for more later. Mr. Skipper down played the potential impact on pay TV, stating that "the preponderance of the deal is to invest in new products that go on pay TV . . . "and saying ". . . there is no contradiction in continuing to enhance and buttress the current system while building new businesses and new ways to reach fans. We think they are complementary."

Turner President David Levy emphasized that they retained TV-everywhere rights as well as NBA's digital properties, including NBATV, NBA.com, and League Pass, a service that streams games not broadcast.  

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How Software Ate The Advertising Industry

With the Wall Street Journal declaring Ad Week "Programmatic Advertising Week" and Advertising Age's September 29 issue titled "Advertising Age of Automation," it's clear that adtech is all the rage.

This might be a good time for you, gentle reader, to revisit my report from this past February, How Software Is Eating Video Ads And, Soon, TV. (I adapted this title with a tip of the hat to Marc Andreessen!)

Highlights, Day 1, ANA Media Leadership Conference

This year, the Association of National Advertisers is focusing on some really big issues facing the media business. ANA President Bob Liodice's keynote framed them:

  • Measurement: Better measurement can help marketers make better decisions, and it is time for the industry to convene a central body to guide the measurement discussion.
  • Piracy, fraud, and viewability: These issues have led to the erosion of the value of digital media. Marketers, agencies, and publishers must take notice and address these problems.
  • Media transparency: ANA members have told the organization of their concerns about agency trading desks, rebates from media companies to agencies, and programmatic buying. The question is: are agencies and media companies hiding information from marketers, or is this just representative of the new media environment we are living in?
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Who Is The Fairfax Cone Of 21st-Century Marketing?

Or the David Ogilvy . . . or the Bill Bernbach . . . or the Rosser Reeves . . . or even the Lester Wunderman? All of these Mad Men played outsized roles in laying down the rules of advertising and marketing that have dominated the craft for the past half century.

I've been wondering more and more about who among today's marketing leaders will join this pantheon as I see marketing diverging from the tenets I was schooled in during my early ad agency career.

Apparently, Interpublic has decided that Howard Draft isn't among them, since they have removed his name from the door, reverting from Draftfcb to FCB -- or even the original Foote, Cone, Belding name. Their rationale was to simplify the name, but then they go on to say they will still append the geography (FCB Chicago), the specialty (FCB Health), the name of acquired agencies (FCB Inferno), or even "a highly respected creative leader" (FCB Garfinkel). Yeah, that's a lot simpler. And I guess a leader who takes the agency in a new direction and shakes up an entire industry doesn't make the cut. Sorry, Howard.

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