From TV Broadcaster to Multi-Channel-Caster

There’s a perfect storm brewing in television land. Changing media consumption patterns mean people watch less TV.  Advertisers shift money away from the screen to other media.  And to make things really interesting, both Googlewood and the cable companies are gearing up to disintermediate the broadcasters.  Time to pack up?  I don't think so.

TV stations who pro-actively embrace the new media consumption patterns can still outrun the new kids on the block in Tinseltown.  Below I’ve outlined three ways in which broadcasters can leverage their currently dominant position in the living room to secure tomorrow’s business.  Conceptually they’re not that difficult, yet they do require a (very) different mindset.

Think Customer Centric rather than Media Centric Content.  The majority of TV shows today still get produced, well ... as TV shows.  Only when they hit the screen and become successful the web, mobile and other machinery starts working.  This often leads to some innovative work like CSI's interactive game yet even these are still a side show to the main event taking place on TV.

As consumers spend more time online than in front of the tube, broadcasters must push producers to come up with cross-media concepts that compete for a share of total media-time, rather than just win the TV ratings.  Connecting to the more high-impact media will allow stations to demonstrate ROI on advertising and thus reclaim the budgets that are drifting away.

Negotiate multi-channel exclusives and put your weight behind them.  Even though no one really knows how it will look, TV viewing in the future will be IP-based and new entrants like iTunes, Google Video, Yahoo and AOL are playing this card all out.   

To compete tomorrow, TV stations need to become the consumers 360° media reference for their favourite content (be it online, in print, IRL or on their mobile phone).  In this they can – still - use their bargaining power with major content suppliers to make “multi-channel exclusive” deals, which cut short online competitors before they can truly emerge (if Jobs can convince Hollywood to give him Desperate Housewives, TV stations should be able to do so to).

Think outside of the branded entertainment box.  While I love the idea that in 24 “the good guys use Apple”, I wonder how that generates cash for the stations that air the show.  Broadcasters need to reclaim the branded entertainment arena by remembering the roots of commercial television.  Think back to the days of the soap when shows were produced together with advertisers, yet done in a way that people really want to watch.

Thanks to the infinite channel environment of today, it is even conceivable to leverage existing know-how in programming and production into new business opportunities by helping brands to become media in their own right.  Audi in the UK already has its own TV station, courtesy of Sky Digital, so why shouldn’t Hasbro have it’s own Children channel or Amazon it's own Book TV.  

In the digital media landscape, the game is far from over for TV stations, yet to win it may help to get onto the pitch in a more aggressive way.

As usual, if I've missed (part of) the point, or we are at risk of being in violent agreement, don't hesitate to comment ...

Why Online Media Just Aren't Taking Off

Here’s an interesting number for you.  Most European consumers spend 20% of their media time on online media.  British internet users even spend more time online than watching TV.  And still the average share of budget of these same media remains below 5 per cent.  Is this just inertia, or is something more structural going on ?

To try and identify the reasons for this mismatch, I would like to start a start a dialogue by putting down three theses for discussion.  To stimulate the conversation, I’ve deliberately made them pretty black and white.                            

Reason 1: Marketers and agencies are incentivised to stick to convention
Keynes once said that “it is better for a reputation to fail conventionally, than to succeed unconventionally.”  The modern day media equivalent would probably read that “no one ever got fired for booking a national TV campaign”. 

New media still require somewhat of a little leap of faith.  And faced with quarterly targets, for many account execs it’s simply safer to start their presentation with a thirty second commercial, and for many marketers, it’s simply safer to accept it.

To quote a senior marketer I met last Christmas: “Alain, you’re absolutely right, yet this new media stuff is too measurable.  If I go heavy and the numbers turn out bad, I’ll get all sorts of questions and am probably looking at a budget cut next year …”

Reason 2: Media buyers are incentivised to avoid digital media
What would you do if you were a media buyer presented with the following dilemma?  You have a million to spend and you can either do this by making “one phonecall” to the national TV station, or work three days in putting together a complex roster of 20 digital media.  In either case, you only make your 4-6% commission on that million.

If you add to this the constant threat of commissions being squeezed, the answer to this question is a duh-ism of the first degree.  With insufficient funds available to do real media strategy (and post-audits), agencies and advertisers have talked themselves into a gridlock which has replaced “the best plan” with the “the best plan under the budgetary circumstances”

Reason 3: Media agencies are incentivized not to work with the creative guys
Love or hate it, today's ad-market is largely a commodity business.  Remove the gloss and it comes down to buying seconds or millimeters at a price and filling it with creative to match your brand.  The rest of the conversation is – de facto – about price.  The efficiency drive associated with this has separated the creative guys from those doing the buying and while everyone has the occasional whine, it’s a process which more or less works.

But online, this approach has its limits.  Sure, for banners & keywords this separation still makes sense (to a degree), yet really exciting online campaigns are all about blending creative media use, with creative concept into a relevant mix.  For media agencies, it however also means using more expensive (human) media strategists than the computerized media optimization systems and risking that valuable budgets suddenly get shifted away from media-buying into creative work.  Because let’s face it, if in stead of producing a banner you suddenly go for a fully interactive 3D environment, there is simply less buying money to go around.

What do you think?
Before jumping to any conclusions on this by myself, what do you think?  Is this an accurate assessment or am I missing the point?  Or am I missing part of the picture (and if so, which part)?

Much Ado About Digital Signage?

Frost & Sullivan just published a report indicating that the North American market for digital signage advertising has grown from $73.6 million in 2003 to $102.5 million in 2004, which is touted as a whopping 40% increase in only one year.

While this actually means the market size has gone from being a rounding error in the US advertising budgets to being "a little bit smaller rounding error", what was interesting to me is the report's conclusion that advertising agencies are struggling with the new medium as they don't know how to do 10 second commercials with minimal audio and can't handle the new metrics & technical specs which come with the medium.

Media buyers are also struggling with the lack of standards for measurements, audits and buying in this emerging market.

This would make it much more appropriate for sales promotion agencies who are not that bothered about brand building.

This makes me wonder whether digital signage (and other digital media for that matter) remain so small because they are new media with unproven track records, or because of the inertia of traditionally above/below agencies who can't cope with the new realities of campaign development and media buying.

via: broadcastengineering.com