August 23rd, 2007
Propping Up Declining Traditional Media Businesses
Two reports out today illustrate how the traditional media industry is working hard to prop up their declining business. First, as evidence of the decline, IBM released a study that says that the Internet is about to overtake TV as the principal medium in most households (via MediaPost):
TIME SPENT ON THE INTERNET is set to surpass time spent watching TV in the average American household, according to the results of an IBM survey released Wednesday.
Overall, 19% of respondents said they spend six or more hours a day on the Internet, versus 9% for TV. More telling, 60% reported that they spend one to four hours using the Internet, versus 66% who spend the time watching TV.
Of course, the time spent on the Internet includes growing consumption of online video, according to the global survey of about 2,000 respondents (including 885 Americans) conducted in April-June of this year. Globally, 67% of consumers say they watch video on the Internet, or would like to do so.
TV is dead. Long live TV.
As for the propping up part, Kantar Media Research and Pointlogic released a report based on what is arguably one of the most suspect types of consumer research — asking consumers how ads effect them, a category of questions most people couldn’t answer honestly if they tried (via MediaPost again):
NEW AND EMERGING DIGITAL MEDIA platforms may be the rage on Madison Avenue and in the news media, but some highly regarded consumer research suggests they still have a long way to go before they replace traditional media as effective advertising alternatives with most consumers. The conclusion, which comes from the 2007 release of Compose, a collaboration of WPP Group’s Kantar Media Research unit and Netherlands-based Pointlogic, is one of an array of new research studies being used by big media shops to evaluate the efficacy of using a wide range of communications platforms to reach consumers. Of the 33 channels - ranging from traditional outlets like TV, radio and print to new media and marketing channels like sampling, promotions and direct marketing - the study found that the vast majority of consumers still find mainstream media to have the greatest influence.
The “conclusion,” of course — we have to prop up the declining business:
“The conclusion is that the traditional media should still be the cornerstone for brand advertising and that the new media still have a long way to go before they can replace the traditional media.”
The unspoken subtext — Madison Avenue still hasn’t figured out the how to make buying new media as profitable as as buying traditional media, so they are going to continue to push traditional media on their clients, come hell or high water.
But sooner or later big corporate advertisers are going to wake up and wonder why they are only allocating single or low double digit percentages of their ad budgets to a medium that commands more than half of most people’s media time.
And then Madison Avenue is REALLY going to have to tap dance.
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The MediaPost story is an example of research by the clueless of the clueless for the clueless. Marketers and those who serve them should seek to understand how all media work together — and for their specific product or service. As you note, asking people questions guaranteed to generate the desired response does not help increase the understanding of what is taking place.
TV ads are so much sexier than web ads. The sale of advertising isn’t just about numbers - it’s about perception and emotion.
If you’re marketing a car, and have millions to spend on advertising, it just looks better that you ran ads during “House” and “Burn Notice”, two shows that your boss and colleagues might be watching.
Compare that with spreading your campaign money over dozens of websites, and thousands of paid search terms. Not cool, not sexy.
[…] by Bob Morris on August 23rd, 2007 Imagine what’ll it’ll be like in a few years. TV may be going the way of the audio […]
I agree with Hashim and Rex. If the goal of the advertiser is to put out a clean, crisp ad, TV is definitely the way to still go. To the best of my knowledge (and I welcome to be proven otherwise) this could not be duplicated on the net, where the viewer experience is dependent on the speed of their connection. Nothing like seeing a 300 pixel by 300 pixel 2 minute movie promoting a sporty BMW stutter and stop as the video buffers.
All media is not created equal and they all have various strengths. I’m more apt to sit through commercials during my fav show than blinking ads on an article I want to quickly read, digest and move on from.
@Hashim
Oh, right, I forgot. The purpose of advertising is for the people who buy and create ads to advance their careers by showing that they are sufficiently risk averse and lacking in savvy to thrive in a large corporation. It’s certainly not to sell more products or to actually reach people who might buy them. Definitely not to increase shareholder value for public companies who spend millions on advertising.
Scott,
my comment is sloppy. Let me clarify.
Good reason to overspend on TV: if you’re doing it for branding, no other media shows off your brand like a full screen, 30 second commercial appearing in the middle of an entertaining show with millions of loyal viewers.
Bad but somewhat valid reason to overspend on TV: a TV ad makes your bosses feel better about the money they spent, which makes you look like a star.
If a web publisher wants to capture some of that TV ad spend, they need to quit with the number pushing, take a marketing guy out to lunch, and explain how cool a campaign with their site will be.
[…] Propping Up Declining Traditional Media Businesses You do read Scott Karp, don’t you? (tags: media tv socialmedia) […]
Late night TV in Holland is filled with just about nothing but ads about sex sites, web pages. (Sorry for the sleazy example, but this is the way it is.) Traditional TV is WHERE the bulk of the audience is and TV is used to lure them to this quickly becoming commonplace medium, a computer with internet access.
(Was it not the pron industry that “solved” the Beta vs. VHS video recorder battle?)
Then again, there are many 20-somethings out there with no TV (other than for DVD’s- meaning no cable or the likes) and no traditional phone relying just on their computer, cell phone and high-speed internet access.
Times are changing, but not yet fully transformed, would be my vote.
With that, I do agree with Scott that traditional media needs to certainly invest more in new media, for it has emerged (not just emerging).
Today I read William Powers’ essay “In Praise of Paper” printed in the Washington Post (I guess it was “printed” on paper, I read it online). Mr Powers explains how printed newspapers are not dead, in fact they are still fine and will always be. He states, “Quality still sells. There has always been a market for thoughtful reporting and writing, and there always will be.”
He sums up the Internet as reports on “Britney’s dog.”
Oh well. We shall see. Maybe not everyone on the Internet is typing words (won’t justify it as writing) about celebrities and their escapades (I think the Washington Post Style section covers those stories as well).
Thanks, I knew newspapers were in trouble. But I hadn’t noticed or thought through the impact on TV when the traditional “advertisers pay, we watch for free” paradigm is knocked over by the declining efficacy of TV ads in reaching consumers.
Jim, I’m not sure what “free” means in this context. I pay quite a lot for my television programming. Supposedly the content is “free” and I’m paying for infrastructure (satellites in my case, others pay for wires).
But, if that is true, why do cable and satellite providers have to pay for the content?
It seems content producers have two revenue streams: advertising and subscription. Last I checked, ESPN runs commericals but still charges DirecTV, which charges me, to carry the feed.
I’m fine with one or the other, but both seems a bit excessive.
As a researcher, writer and grad student, I spend hours every day online. I do the majority of my shopping there too, but I often learn about the products initially through television, magazines or snail mail ads. I think the mix is still quite important. If it’s a big purchase - say, the dishwasher I bought last year - I will hear about the brand on TV, get online to compare prices and quality, then go to the store to buy. However, other than food shopping, I’d say I spend 75% of my shopping money online - computers, software, books, clothing, gifts, flowers, home decor, etc. So a good strong presence there is crucial, but I still pay attention to the traditional media advertising.
One piece of the puzzle that this article doesn’t touch on - and I’m not sure if the study does - is using the television and computer in tandem. I usually have my laptop open when I’m watching television, and I often will look up information on products, programs, actors, issues, etc. while watching television. A campaign that has a broadcast component and a strong Internet presence has the best chance of getting my attention. And I’d say traditional media advertising still costs a lot more to produce than Internet advertising.
[…] Propping Up Declining Traditional Media Businesses. Scott Karp ties together a couple of reports — one of them showing the ‘net overtaking TV in the home — as he continues to analyze the media biz. […]
Personally, I watch TV using a DVR and almost always skip the commercials. I also filter out many ads on web sites. I guess I’m a freeloader… but a web based advertising campaign is more likely to reach me. One side effect I’ve noticed is that I’ve completely lost track of what movies are coming out. They usually advertise on TV but I skip the ads. So I find out when a blog or news story is written about them. Actually, billboards and radio ads are the best way to reach me.
I expect that the fact that TV ads look better to clients and bosses does drive ad agencies to over produce them. Businesses (and government) often try to measure what is easy to measure rather than measure what is really important but hard to measure. They then make decisions on whatever they are measuring while apparently forgetting that it’s not really what’s important.
EI
Much Like Captain Smith…
?There is no elegant way out for Katie”, writes Myrna Blyth, quoting the last line in Ed Klein?s unauthorized biography, Katie: The Real Story: What is interesting is the analysis of the reason for Katie?s morning TV success. According to……
More and more people are watching TV via TiVO or DirectTV which allows fast forwarding over ads. They now can choose when to watch what making TV-watching on their schedule. My husband and I have two such setups, each recording different programs, but rarely watch anything but sports and never ads. Most frequently I surf the web while listening either to podcasts (Rush, Hugh Hewitt etc;) radio over Web (Bill Bennett) or TV. We both find network TV moronic and infantile and get vastly more entertainment by reading classic (avoiding current raunchiness) fiction. Of our five children and families we find much the same . . . too bad TV has become the province of ignorant children giggling at filthiness. Quite sad but not surprising given the worthlessness of our educational system, which eschews independent thinking.
The advertising industry is no stranger to both poorly acquired data AND poor decisions made on the basis of wrongly applied data. The industry repeatedly decries (and online ad forums bemoan) the use of focus group studies to determine advertising effectiveness –the ultimate example of the “observation effect” at work. Agencies large and small still fail to resist when clients demand focus group testing.
When the study is quoted as stating that “Consumers recognize TV as the No. 1 medium for building awareness,” it comes of as ludicrous. Go ask someone on the street corner about the best medium for building brand awareness and see what kind of look you get. What questions were asked to determine this?
Stating further that consumers ranked TV first when “asked which media helped them decide whether ‘they can trust a brand’,” stretches credulity to the breaking point. Everyone I know goes to the internet before making the ultimate vote of trust: a significant purchase.
As for hours spent watching TV versus hours spent online, the comparison doesn’t strike me as apples to apples. We might as well compare hours spent in a library to hours spent in a mall with a bookstore.
You clearly read the New York Times. How did you miss this?
http://www.ratdiary.com/2007/08/22/beauty-and-the-beast/
[…] Karp over at Publishing 2.0 highlights this dirty little secret, that some think might be true, but won’t be caught […]
I recently had a first-hand opportunity to observe this. I work at two companies, the first an online magazine (India Together) and the second a GIS company (Mapunity). Recently, Mapunity built a live traffic information system for Bangalore (www.btis.in) that was widely reported in all kinds of media - print, online, television, even radio. I myself wrote an article for my publication too. We found a lot of interest in our company among all sorts of people (traffic concerns everyone), but by far the most significant business traction we received was from those who read about our work online, and from those who tried our product using mobile internet.
Made me feel better about the online publication too, even as the GIS company was hogging some limelight!