There's no fighting the future

In the '80s the mantra was "I want my MTV." Now it's just "I want my TV."

We can't get enough.

The average American watch five and a half hours of live television per day. Toss in DVRs, web videos, streaming on smartphones and tablets and that number climbs near double digits.

So it's not surprising that ABC is enabling viewers in New York and Philadelphia who subscribe to a cable service to view network programming on their mobile devices with their new Watch ABC app.

As live viewership in the home continues to dip thanks to DVRs and services like Netflix, networks have become less valuable to advertisers. Adding more viewers who can't skip commercials whether their in their living rooms, offices, or anywhere else helps support their ad revenue. Plus offering the service only to cable subscribers helps build subscription revenue.

It's not the answer to the networks' ongoing issues, but it's a move in the right direction.

It isn't the real thing

If you're counting on online buzz to drive sales, you might as well bet on the Cubs to win the World Series this year.

Yesterday at an Advertising Research Federation conference in New York, Coca Cola – a company that measures just about everything it does – had this to say about the connection between online "buzz" and business results...

We didn't see any significant relationship between our buzz and our short-term sales.

Count me as one of the least surprised people in the world.

Coca Cola has 99.9999999% awareness. I know where to find it. I know how much it costs. I know how refreshing it is. But somehow the expectation by the advocates of buzz is that I might see a post about Coke on a friend's Facebook page and Twitter feed and suddenly decide to go buy one?

I think not.

After this news and yesterday's post, I hope this signals a return to sanity in marketing where we'll focus more on using the tools for selling rather than just making noise.

Why network viewership continues to fall

While the networks try to blame poor viewership on everything from DVRs to the weather, they're turning a blind eye to the real cause of the problem: increased competition from cable, Netflix and other non-traditional viewing sources.

Much like the American automotive industry that has seen its share fall from over 90% in the 1950s to under 50% now, the television networks are suffering from of a proliferation of competition and a product that's not demonstrably better.

Now that a whole generation has grown up with cable in the house, they don't see a difference between channels 2, 4 or 7 and channel 247. It doesn't matter where you are on the dial, just that you have something worth watching. And that's where the real problem comes in.

Quality programming is not something networks and producers define. Quality lives in the eyes of the the viewers. So while NBC may think it has a quality show in "Parenthood" with a good cast, proven writers and a lot of money tied up in production, it will never achieve the ratings success of a "Hill Street Blues." In addition to competing with ABC, NBC and Fox offerings, a few percentage points of NBC's viewership now goes to shows like Storage Wars, Chopped, Big Break, on the hundreds of other channels that come into our homes.

Add to that the fact that we have gone from having one television in every home to nearly one in every room and the problem gets worse as viewership within a household becomes more fragmented.

NBC, CBS, ABC and Fox will never be able to reach the ratings heights they once knew just because of math. The universe of viewers isn't expanding. The number of channels are.

There aren't any excuses that can cover up that fact.

Seinfeld's back

Not the show. The comedian.

And not on NBC, but the web.

I guess if you're a millionaire celebrity who doesn't need the money, you can indulge yourself and create a second show about nothing...

 

It's not must-see TV for everyone, but I like it.

It features interesting cars and the kind of conversations only friends can have. It's nicely shot and edited. And it's not interrupted by advertising. Because it is an ad.

It's an original series designed to attract viewers to a website called Crackle.com. Crackle is Sony Pictures Entertainment website that lets you watch movies and tv shows for free – if you don't mind watching ads.

Around since 2007 but not available in the U.S. until last year, Crackle is to Sony what Hulu was to NBC. It's a place to put their existing content and serve it up to people who want to watch old movies and TV shows but don't want to pay Netflix.

In addition to up to 10 commercial breaks per film, you also have to be willing to put up with a very limited selection. Currently there are only 307 forgettable movies and 81 TV series, much of it anime. Yes, they have 34 of the original Three Stooges shorts, but until there's more there I probably won't be spending a lot of time on Crackle watching shows (and commercials).

I'll catch Seinfeld's new show on its website here: Comedians in Cars getting Coffee.

Unfortunately Crackle is just another bad product with a great ad campaign.

Addendum: You can read a nice interview with Jerry Seinfeld about the series on Huffington Post.

Doing well by doing good

You have to hand it to the folks at Disney. They are smart.

Today, they're announcing a new initiative along with the First Lady that among other things, limits junk food advertising on their networks that target children and reduces the amount of sodium in meals in their theme parks by 25%.

You'd think that cutting off your content platform to some products from advertisers like Frito Lay, General Mills, Coke and others would be bad for business.

But you'd be wrong.

Along with the shift in ad policy, Disney is introducing an endorsement program where a branded food item that meets Disney's standards (not the FDAs) will receive a "Mickey Check" – a sticker on the package signifying its goodness.

I'm guessing the check isn't going on every product in the store that meets their standards. In fact, I'm pretty sure it will only be available to those companies pay Disney a lot of money for ad deals or other marketing programs. 

I'm also certain a there will be a royalty involved. So for every carton of juice sold that sports a Mickey Check, Disney will make a few pennies. Given the amount of "healthy" processed food sold across the U.S., those pennies will add up quickly, covering the cost of the few advertisers who are cut out by this program.

Proving once again, that doing good can be very, very good business.

Dishing without commercials

Last week Dish Network added Auto Hop to it's Hopper DVR. With one click, viewers can automatically skip commercials on prime time shows they've recorded from ABC, NBC, CBS and Fox.

Those who hate commercials (most of America) think this is a good thing. Those who understand that nothing in life is free (about 10 people) wonder who's going to pay for commercial-free entertainment.

We all know the old model for TV unsustainable. Yes, advertisers are expected to spend upwards of $70 billion this year on commercial time across all broadcast and cable platforms. Yet for the most part ads are seen as an annoyance by viewers and with today's technology they're very easy to avoid.

Programming that doesn't have to be watched in real time, which is just about everything except live sports, can be found on Netflix, Hulu Plus and other distribution platforms without commercials days or at worst weeks after their initial air dates. Current DVR technology allows anyone to zoom through spots in seconds. Does anyone doubt that it won't be long until auto skipping is common on all DVRs and all channels?

Neither the networks nor production companies are looking forward to this future. Advertising has been a consistent and very profitable source of revenue for both.

Advertisers, though they grumble about the cost, love all the attention their products get when they interrupt your favorite show and won't be happy to see this model disappear either.

So what's the alternative? Pay-per-view programming where you get nicked a couple of bucks an episode or $20 a season for shows like Mad Men, Two and a Half Men or 60 Minutes? While that might have incredible social benefits by lowering the amount of TV watched in most households, it wouldn't make anyone happy.

The networks lose revenue, production companies lose funding, advertisers lose their biggest platform to make people aware of their products, and viewers have to think about whether what they're watching is actually worth their time and money.

Ultimately, what may happen is that the networks themselves may become obsolete. They served a purpose providing a way to bring shows and advertisers together. Their programming and development staffs nurtured shows like Cheers and Seinfeld that needed time to find their voice and grow and audience. But in today's world of infinite choice and non-stop channel surfing, people create their own "networks" choosing which shows to watch and when to watch them.

Given the incredible data gathering capabilities of cable and mobile devices, fewer and more relevant ads could be inserted at fewer points in the programs. This should in theory cut down on waste and make each ad unit more valuable.

Blowing up a 64 year old industry and starting over is never easy, but in the case of network television and advertising industries it's going to happen. The only question is who's going to do it? Those who control the system now or an outside player who isn't encumbered by billions of dollars of infrastructure and decades of organizational inertia.

My guess is the latter.

It's time to reinvent television

I wasn't surprised to see the following quotation in an article on changing television viewing habits in the New York Times.

“We watched (The Walking Dead) live,” he said. “It was not nearly as good. The commercials broke the tension. We had watched the other episodes (on Netflix) with blankets over our heads. I hate to say this to the AMC executives and everybody else in the business, but I will never watch ‘Walking Dead’ live again.”

What did surprise me is that it was from Jeff Gaspin, who until last year was the Chairman of NBC/Universal Television Entertainment.

Fewer and fewer people are watching shows at their original scheduled broadcast times. DVRs, Netflix, On Demand and other streaming services are making it easier to see your favorite shows when it's convenient for you. This also means you can watch them without watching the advertising that pays the shows' production cost.

Unless you're PBS, HBO or TCM, you count on advertising to pay for everything from executive salaries to overhead to production costs. Under the current economic model without advertising, there's no programming, and without programming, there's no TV.

This has real human consequences. After all, who's going to pay Ryan Seacrest's $15 million annual salary if Coca Cola, Ford and AT&T stop sponsoring American Idol because no one's watching the ads?

Currently the typical hour on NBC, CBS, ABC or Fox runs 15 to 18 minutes of commercials. On cable that increases to 20 to 22 minutes. A 30 second network primetime ad will sell for anywhere from $50,000 to $225,000 depending on the show's popularity. So that means the networks generate on average about $55 million dollars per day.

Not a small sum.

As viewers skip more and more ads, advertisers become understandably less willing to pay for them, and the networks will have look elsewhere for their $55 million.

It's not going to come from product placement. There's not enough revenue there.

It's not going to come through increased cable fees. People are too used to getting their information, entertainment and escapism for free.

I'm not saying that television is dead. I'm just saying it's going to take a new deal, a new model between networks, advertisers, producers and performers to create a system that is sustainable.

If I'm a major advertiser or a network executive, I'm trying to reinvent the system now. Not five years from now when the pressure is really on.

Ten lessons from this year's Super Bowl ads

We all love the Super Bowl. We love the bigness of it, the spectacle and the drama. Not just of the game, but also the ads. They're fun to watch, criticize and occasionally praise. But the fact of the matter is, most businesses can't afford to advertise in the Super Bowl.

So what marketing lessons can 99.99% of American business learn from the successes and failures of .01% of the marketers who can afford a $3,000,000 spot? Here are ten.

1. Your brand promise must drive your idea. That's why Chevy's Silverado 2012 spot worked for me and Audi's Vampire apocalypse didn't.
2. Big production values are not a substitute for a great story. Pepsi's King's Court is a perfect example of this.
3. It's not enough to be different. You have to be relevant. TaxACT.com failed on this test. As far as I know, peeing in a pool has nothing to do with preparing taxes.
4. If you're going to have a call to action, make sure you're ready to handle the action. Acura's website crashed because it couldn't handle the traffic after Jerry and Jay were done battling over the NSX. And the UI on Toyota/Shazam contest entry was impossibly slow.
5. Sex doesn't necessarily sell in 2012. Teleflora, H&M, and GoDaddy are proof of this.
6. And while we're on the subject, doing the same thing over and over again expecting different results is the definition of insanity, GoDaddy.
7. Just because I like your spot, doesn't mean I'm going to like you on Facebook. Give me a reason to visit. Just about everyone.
8. Make sure your message is appropriate to the media. Both GE and Cadillac had nice spots, but neither was right for the stage that is the Super Bowl.
9. In our over saturated, 24/7 multi screen media environment, subtlety is not your friend. Just what is Bud Light Platinum and why should I drink it?
10. When all else fails, remember these three words: babies and dogs.

If you haven't seen the spots I referenced or would like to see them again, you can on USA Today's Admeter home page.

Flying blind online

I know that several University of Wisconsin alumni have done very well for themselves. But honestly a college newspaper's website seems like an odd place to advertise corporate air travel.

Now, I may be wrong about the readership of the Badger-Herald online, but I know that I'm not going to be spending this kind of money on a plane trip any time soon. So however they're doing their tracking, something is seriously wrong.

If they're really interested in reaching people who can drop $3,400 an hour on air travel, I'd recommend my friend Christopher Parr's new site, Pursuitist.

Must Not See TV

An article in yesterday's New York Times featured advertisers who are sponsoring web-specific entertainment developed by the same studios that create shows for the leading network and cable outlets. Likening it to the early days of radio and television where companies provided direct funding for name sponsorship, the premise is that these shows delivered through a branded portal will somehow increase consumer engagement with the brand. While in theory, this may be true, the practice as demonstrated by the few samples referenced in the article leads me to believe this model may not be ready for prime time.

I may be in the minority in this opinion, but a lot of the programming on network and cable TV isn't very good. (Can someone please tell me how Two and a half men is still on the air?) And pushing more bad content out to a public, no matter how captive, isn't going to help advertisers. Just how does a badly written, poorly acted, three-and-a-half-minute sitcom about an insurance agent who can understand what a dog is saying help American Family Insurance "engage with our consumers in a broader way, on a deeper level?"

Quality matters in every consumer interaction, whether it's your product, your customer service, or your communications. Rather than create their own mediocre entertainment (I'm being generous here), why not find something interesting and original like Chad Vader and sponsor it?

Frankly, if anything this made me feel worse about AmFam. They took three minutes of my life that I'll never get back.