13 May 2011

The Changing Role of TV

50 years ago this week, FCC Chairman Newton Minow called TV a “vast wasteland”.

Today, we can argue if TV is a wasteland but there’s no question it’s a vast – and shifting – territory.

The Death of TV has been Greatly Exaggerated

It’s been fashionable in recent years to say that TV, and in particular the 30-second commercial, is dead. Yet people watch a lot of it, which means advertisers still pay for it and producers keep filling it up with content. Supposedly Digital was putting an end to this cycle but so far the billions of hours of video content available online look more like a wasteland than the five hundred channels of TV available to many households. (Attention, digerati, please keep reading before you flame me in the comments section.)

TV Renaissance

In fact the demand for TV content is stronger than ever because TV isn’t just an appliance in your living room anymore. You can watch TV content on any number of devices, and TV advertising in the form of things like pre-roll video and DOOH displays. Jerry Seinfeld, who just launched a new website, observed: "Why would I talk to a TV executive at this point, and ask them what they think? If I have this idea for a TV show, I can just put it up on the Internet." On top of all this, let’s not forget that traditional TV sets offer not only hundreds of channels but the ability to watch programs anytime via the use of DVRs.

Expansion of TV complicates planning, measurement

Regular readers know about the Gigantic Venn Diagram, which is the collection of all available marketing channels across Advertising, Retail and Digital. TV is almost a Gigantic Venn Diagram unto itself, which means it’s impossible to have a TV media plan considering only TV. The confounding thing is that viewership is also a Gigantic Venn Diagram because people are using more than one media at a given time. During the Super Bowl all my Twitter feeds were moving fast with commentary about the game and its commercials. (Mrs. Ad Majorem watches Dancing With The Stars on two screens at once.)

Supply and Demand

Part of the “TV is dead” narrative has been resentment over continually rising prices for TV advertising. In the U.S., two years of recession are now followed by double-digit price increases. We expect the same in Asia and Latin America. “How can this be,” people ask, “when viewership is down and marketers have so many other options?” Three reasons. One, viewership isn’t down – in fact it’s expanding. Two, TV still offers a familiar ratings system – advertisers understand what they’re buying. Three, many of the biggest marketers still depend heavily on high awareness and TV is actually the most cost-efficient way to reach large audiences.

TV is not King

TV is not king; more like a ceremonial monarch with a big bank account, a lot of influence, and an unclear future. While TV is strong culturally and economically, digital media continue to rise in relevance. Let’s not lose sight of the fact that digital ad rates are also up in double-digits. Social Media will force the development of interactive TV. Mobile threatens TV in another important way, taking away part of TV’s broadcast spectrum.

What should you do?

Keep experimenting. Stay abreast of the changes. Continue to take a true channel-neutral approach and use TV in a way that will achieve your own business goals. As we said in a previous post, “How TV fits into IMC”, TV should never be the default position, but neither should it be eschewed. Don’t let labels hold you back. If you shift TV dollars to pre-roll, you can plausibly say you’re “going digital” and that you’re looking at TV expansively.

1 comment: