The Networks are Dead. Long Live The Network.

June 21 2012 10:13 AM no comments

Digital Advertising - TV Networks and the Network

Do you watch TV? With the exception of live sports – I don’t anymore. I’m not into the ‘Idol’ live shows, so I’m rarely ‘tuning in’ to many TV shows these days.  I prefer to binge view. When I do view something – I usually have either my phone or tablet with me to enhance the experience with group check-ins via Get Glue, tweets, Wikipedia searches, or Facebook posts during the commercial breaks. Contrary to what some cable execs believe, it is now very easy to watch Internet content on your TV. Google says that over 50% of us use our smartphones while watching TV and that close to 90% of us consume media while having another connected device in hand.

But it was not always this way. The model used to be something like this:

You would settle in front of your TV to watch your favourite TV show. Naturally, you would also watch the commercials that appeared during the show. The money generated from selling that commercial space to an advertiser funded the production and broadcast of the show. The larger an audience a show could generate, the more they could charge for ads. There was some very basic, aggregate demographic knowledge of the people who watched the show. The more valuable the demographic, the more they could charge for ads. For the most part, advertisers would try to target their commercial’s placement based upon these variables – reach and demographics. Yes, there were things like in-show product placements as well but, by and large, this was the model. Shows were broadcast at a specific time – and the audience ‘watching’ (the reach) was usually calculated by the number of eyeballs who tuned into the initial air date of the program. Consumers paid for cable so they could gain access to the major broadcast networks (FOX, ABC, CBS, NBC) and view the shows they liked. In addition to paying for access to these networks, we (the viewers) also put up with an interruption-based advertising model where engaging content is chopped into smaller pieces and interspersed with commercial advertisements. Yes, some specialty cable channels are commercial free but, again, by and large, this was the model.

This model may have made some sense to the viewer and advertiser many years ago when there were essentially a handful of major networks and around 60 broadcast channels. It may have even made sense after the explosion of the specialty channels. It definitely made sense for most of the big-budget, primetime shows. But today – things are quite different, and the old content funding and distribution model is breaking down. ‘OTT‘ direct-to-consumer content models are becoming more popular and shows are beginning to look more like apps.

Today - Broadcast TV viewership is in decline. Internet use is continuing to increase and has long surpassed TV. There are not 500 channels, there are N channels on one Network. As an example – take a look at Youtube’s content stats. Just on Youtube alone, there is a phenomenal amount of content generated and consumed every day. 100 thousand hours of content is uploaded and 100 million hours of content are watched every day. As well, more people are buying tablets and smartphones than are buying desktop computers. Our usage patterns and preferred devices have changed very quickly. Mobile usage is increasing and will surpass desktop usage.  Digital now means mobile. And it is not just TV. The other traditional media source is feeling the effects. Newspaper readership is also in decline - and so too is the revenue base which supports it.

On the advertising side, the old mass broadcast model fails on a number of fronts:

  • It’s Imprecise. It only allows for aggregate ad targeting and efficacy is difficult to measure.
  • It’s Interruption-Based. As our favoured devices become more powerful, personal and connected – an ad which you can’t skip and didn’t explicitly ask for makes for a poor user experience.
  • It’s Misaligned with User’s Needs. The usage trend is to digital, mobile, on-demand, when they want it where they want it.
  • It’s lost its primary advantage – reach.

In advertising today, to effectively reach an audience you need to employ a more comprehensive approach. One that is not property specific, is data-based, and is much better suited to how people actually interact with and consume their content.  Analyst Mary Meeker recently highlighted the scope of the difference between where people spend their time, and where advertisers spend their money. In order to move forward, advertising spends must be aligned with reach, usage, and efficacy. Advertisers must also experiment with newer online marketing approaches like Real-Time Bidding. There is a huge opportunity here for those who are willing to move forward and apply what we already know about where consumers spend their time, the devices they prefer to use, and how best to present them with relevant advertising.

 

Not Meeting Your Digital Marketing Objectives? Read This Post Before Changing Your Strategy!

June 04 2012 12:07 PM no comments

Digital Marketing Strategy, Buy-in, SkillOk…we are not meeting our digital marketing objectives…our strategy is failing…now what?  Clearly you need a new strategy…umm…not so fast!

Earlier this year, I attended a session during AdWeek where David Court from McKinsey revealed the results of their study on “Why Do Marketing Strategies Fail”…and you might be surprised by the results.

Marketing strategies fail:

  • 47% of the time because the team lacks the skills to implement
  • 38% of the time because executives and employee buy-in
  • 15% of the time because of poor strategy

When I ask digital marketers this same question their first response is almost always “poor strategy” and when I follow up with the question “if you are not meeting your digital objectives what do you do then?”  The answer is almost always “change the strategy”.

While this study was about marketing in general and not digital marketing per se, I can tell you from experience that if they conducted the same study for strictly digital strategies, the outcome would be the same…in fact, I would expect poor strategy might even be less than 10%.

We can look to mobile and social media marketing as great examples of how buy-in and skills have limited the potential of these two mediums over the past couple of years.  I have heard some brilliant mobile and social media strategies that failed to meet ROI objectives.  Why? CEO’s and CMO’s did not understand these new phenomenon’s, hence did not buy-in…further these are emerging technologies where even the most experienced talent has less than a decade of experience…talent pool/skill sets have been quite thin, so success in these areas has been difficult.

The good news is that the landscape is changing and those brilliant strategies now have a chance to succeed.  In terms of buy-in, find me a CEO or CMO who isn’t engaged with their smartphones…they are bought in…and smartphone penetration is going to pass 50% this year in Canada.   For social media, the IBM’s Global CMO Study  revealed that 71% of CMO’s now consider the social media channel as a top marketing priority. Buy-in for these digital channels have arrived…but what about the skills?  Well, that is still a work in progress, but I can assure you that everyone in the digital marketing industry is focused on building this skill set, and with each passing day more marketers are learning how to execute, just as the digital industry did as the internet exploded.

So, don’t throw away that clever digital marketing strategy you believed in…no need to start over…just make sure you have the buy-in and the team to execute it, then  you have an 85% chance of success.