One thing will be certain about the media outlook for 2010 and beyond: good advertising, not technology, will keep viewers watching long enough to select the “RFI” button to request more information about a product rather than their fast-forward option. Art will be at least as important as science as we work to refocus, revitalize and rebuild our way out of the worst period for advertising-supported media in history.
A recent column by Backchannel Media founder Michael Kokernak has had me thinking about the “back to the future” elements that advanced advertising will have in common with the “scientific advertising” outlined by advertising pioneer Claude C. Hopkins back in 1923.
Kokernak found similarities between the capabilities of advanced advertising and the science that Hopkins applied to print ads to improve their effectiveness.
As Kokernak explains it, the process involved tracing sales results back to the exact advertisement using codes. Companies were able to improve their ad copy after every placement by tweaking the message until the sales it generated were growing. The idea was to eliminate waste in the advertiser’s budget. Direct mailers take the same approach when they send out different pieces for the same campaign and code them to see which gets the best response.
To Kokernak, the advanced advertising that will be enabled by interactive television fulfills Hopkins’ vision for “keying” video ads to measure their effectiveness. Advertisers and their copy writers will have the technical capability to measure how well an ad gets viewers to pause programming and “click” their interest in that product.
Examples of ads that allow this type of measurement include the “RFI” ads where viewers use their remotes to request more information about a product or the ads or on-screen buttons that allow viewers to “telescope” to an infomercial that may be available via video on demand.
“In the interactive world, every avail can be linked to ‘click’ results and advertisers should be able to remove much of the guesswork out of their television budgets,” Kokernak offers. He adds that this year is considered by many to be the turning point for interactivity and for television advertising. Until now, television advertising had always been driven by demographics and size of audience. However, according to Kokernak, audience size does not have much to do with the actual product sales generated by each avail, noting “advertising’s goal is not to drive awareness of the product, but rather to drive sales.”
We have certainly been engaged in enough discussion about the importance of improving audience measurement and engagement, and replicating the online’s ability to deliver these metrics, not to ignore the value of a more scientific approach. However, I cannot believe that the future of advertising will be represented solely by the ads and informational programming that is judged to have triggered the most product sales.
It may be a generational thing. In my early experiences with cable networks, one of our milestones was when the ad avails weren’t completely filled with DR spots and we began attracting Fortune 500 advertisers. It could also be nostalgia for those “feel good” ads about teaching the world to sing and those great ad campaigns that told stories over the course of several spots. Do you remember the Taster’s Choice campaign with the couple who were interested in coffee, and maybe each other? Or, perhaps it’s the result of all those marketing classes I took in graduate school where I learned you have to create awareness and value before you can drive sales. Who was it who said, “Nothing kills a bad product faster than good advertising”?
So, maybe it’s not an either/or decision between audience size and ad effectiveness. There are products designed for mass markets that will continue to find value in reaching a mass audience in order to drive sales.
That was the one of the takeaway messages from MFM’s annual conference session on targeted advertising earlier this year. Greg Kahn, senior vice president of strategic insights for Optimedia, joined his fellow panelists in concluding that the industry will need to find the right balance between not having any target and overdoing hyper-targeting. Running dog food commercials only in homes that currently have dogs risks losing the chance to influence the buying behavior of someone who is about to become a dog owner, he said.
Kahn also used the example of Denny’s 2009 Super Bowl ad, which drew two million Americans to its free breakfast offer, as a great testimonial to broadcast’s ability to re-awaken a brand.
With nearly 80 percent of Super Bowl 2010’s ad inventory already committed, there seems to still be plenty of validity to the notion that there will be a bright future for media that can both reach a mass audience and use advanced interactive video technology for measuring an ad’s effectiveness in delivering the desired result.
These topics were also raised earlier this week, when MFM brought the media and advertising communities together for our “Media Outlook 2010” seminar.
The seminar’s presenters included Magna Global’s chief forecaster Brian Weiser, who is known — and respected — for not sugarcoating the ad spending outlook and having very compelling data to support his perspective. I’ll be sure to pass his latest insights along in my next column.
I’ll also provide a recap from an investor’s outlook panel that included Jason S. Helfstein, executive director, media and Internet equity research at Oppenheimer & Co., and Chris Nicholls, senior managing director, for the communications and media practice at FTI Consulting.
Jason and Chris have been studying the trends driving online and traditional advertising and shared the investor’s perspective on the media industry’s ability to monetize its new media opportunities.
The seminar’s “CFO — Financial Perspectives” panel comprised Rino Scanzoni, chief investment officer for GroupM North America; Harry Hawks, EVP and CFO, Hearst Television Inc.; Kevin Lavan. CFO, ParadyszMatera; and Thomas H. Peck, CFO, Daily News — U.S. News & World Report.
The CFO panelists talked about the recession as an opportunity and provided concrete examples of the niches that can allow ad sales departments to excel. They also talked about approaches that connect with clients to help them achieve their advertising objectives.
Perhaps the best look at ways to capitalize on the ad community’s desire to incorporate reach and impact in future campaigns came from a presentation by Gene Cameron, vice president, auto marketing/media solutions at J.D. Power & Associates. Cameron, who participated in the 2009 Automotive Internet Roundtable, shared his insights on how major advertisers are looking at the role of online and cross-platform advertising in their 2010 media buying strategies.
Auto makers are clearly spending more time, and money, on the Internet. As TVNewsCheck reported last Friday, a new study from Borrell Associates found that online’s share of ad expenditures is growing. While auto spending is down for all media this year, the decline in online (5.2 percent) is far less than it is for broadcast TV (22.8 percent) or newspapers (28.5 percent).
Borrell expects the auto industry’s investment in online advertising to grow 11.4 percent to $4.3 billion next year while its broadcast TV spending will only inch up 1.9 percent to $5.3 billion. The Borrell study also says that major changes are occurring in how auto marketers are using the Web, citing 2010 as the year for breakout growth in streaming audio and video.
However, the effectiveness of these online initiatives will largely depend upon the industry’s spending on broadcast television and other mass audience media.
One of J.D. Power’s strongest recommendations to auto makers is to get on the auto buyer’s consideration list before shopping starts. A key element in that strategy is to drive Web traffic. This is where television can really shine because, according to the company’s recent analysis, only 22 percent of that traffic is coming from paid searches today. The headline from Cameron’s presentation is that companies like Ford are looking for more than a good ad schedule to do this. They want creative partnerships with media companies that will allow them engage potential buyers before they decide on make and model.
As I mentioned in an earlier column, the J.D. Power analysis also found that targeting by age is not the most effective way to get to the audience that automakers and dealers want to reach. For example, the U.S. Census reported that that there are 243 million U.S. citizens 15 and older and nearly 87 million adults in the 35-54 year-old category. With new vehicle buyers representing only 4 percent of the total population, buying a demographic is highly inefficient.
Observations such as these reinforce for me the value of television stations and networks going forward. In my view, Backchannel Media’s work with stations illustrates opportunities for interactive technology to enhance rather than replace the television brands that have forged such strong relationships with their viewers.
After all, despite the opportunity to focus on the print media’s ability to deliver scientific advertising in 1923, broadcast radio hits its stride during the same decade, largely fueled by advertising support. Television went on to push the envelope even further.
With the biggest draw for a fair number of Super Bowl viewers being the ads, I think one thing will be certain about the media outlook for 2010, and beyond: good advertising, not technology, will keep viewers watching long enough to select the “RFI” button rather than their fast-forward option.
In my opinion, art will be at least as important as science as we work to refocus, revitalize and rebuild our way out of the worst period for advertising-supported media in history. So, here’s to the continued focus on art and giving our advertisers solutions tailored to meet their needs even as we further science’s role in advertising.
Mary Collins is the president and CEO of the Media Financial Management Association, a professional society addressing the diverse needs of the industry’s financial and business professionals. Her column appears here every other Friday.