Leno, O'Brien, and the Future of Media Measurement

With all of the news about Leno and O'Brien fighting for time slots on NBC's nightly post-prime time schedule, their ratings have shot up. But the fight for those slots is tough for NBC to justify since two talk show host did not equal more audience, and left the NBC affiliates and Fallon in the dust. While the ratings have risen temporarily, the overall trends has been a downward spiral. Some of the big beneficiaries have been the blog sites, driving traffic with rumor and speculation on the outcome.With Conan out the door carrying a big wad of cash, he may have lost traction but may have benefited from TV's inherent problems.

What this fight reminds us of is that television remains the dominant mass medium in the US, and TV ad spending is usually the biggest line item in consumer marketers' budgets for the reach it delivers. The recession caused marketers to take pause and rethink their spending. The result? TV lost traction. As the economy recovers, Forrester forecasts that TV spending will see a modest recovery in 2010, growing 1% to $69.5 billion. Longer-term, cable TV will recognize the benefits of advanced TV advertising technologies like addressability and interactivity first and will drive the five-year forecast to approach a 4% CAGR. See the detail behind this forecast in our new report, "US TV Ad Spending Forecast, 2009 To 2014" (Forrester client access only).

The longer term tale this battle foreshadows is the one where you can watch Leno, or O'Brien, or get the Top 10 lists from Letterman, on non-broadcast sites like Hulu, or redistributed through Boxee. Then the challenge to the marketers is to evaluate the distribution of their message, not in one inefficient reach vehicle, but for the same or less across a wide variety of end points.

 

But marketers can't extract value in multichannel marketing until they can measure it. TV spending is still the biggest above-the-line expense, even as Internet usage increases and mass media audiences fragment. Yet 65% of marketing leaders think Internet measurement is more useful than TV measurement. The ecosystem in measured media — media planning and buying agencies, media companies, and measurement vendors — as well as marketers themselves, has entrenched practices that don't deliver effective accountability. Change is in the air, as online video sparks the need for interactive measurement practices to start comparing the two media in a way that allows direct comparisons. We believe that the measurement of TV advertising will become more like that of interactive marketing, not the other way around, and as such branding efforts will be held to the stricter accountability that has driven direct marketing spending from the mail and digital eras. Our take on the changes in media measurement are contained in our other "made (mostly) for TV" report, "The Future of Measured Media" that we just published (Forrester client access only)

In an upcoming report and speech, we will be reporting on the changes in TV budgets in a joint study we did with the Association of National Advertisers, which I will present at the TV and Everything Video Conference on February 11 at the Marriot Marquis in New York. That will round out our take on the TV landscape circa 2010 and beyond.

What is your take on changing TV landscape? Are you changing your approach to TV advertising? If so, why? If not, why is TV still working for you? Let me know either here or via Twitter @minicooper.