04 May 2015

Chances Are You're Watching TV While Reading This Post

"Ninety percent of consumers are multitasking while watching TV.  On average, Millennials and Xers are doing three additional activities while watching TV, typically surfing the web, emailing, texting, or social networking."  -- Deloitte Digital Democracy Survey, fielded November 2014.

Source:  Deloitte Digital Democracy Survey
(Click to enlarge)

29 April 2015

Happy Twitterversary

Eight years ago today I tweeted for the first time.

To celebrate, Twitter lost 24% of its market value yesterday.

Twitter hatches

Although I didn't remember exactly what I tweeted that first time back in 2007, nor the exact date, I very clearly remembered the circumstances.  Twitter had suddenly taken SXSW by storm the month before.  I was on a business trip to Europe, reading an article about it in The Economist and decided to give it a try.

Signing up back then was very different:  You SMS'd to 40404 and by exchanging text messages you established a username and got started.  Coincidentally, just the other day I discovered a site that will find your first tweet.  I entered @SteveS1 and suddenly it all came back to me:

(Yes, I misspelled "coffee".  So sue me.)

Twitter lays an egg of its own

Yesterday afternoon Twitter's stock price was a fairly typical $51.19, but then their (somewhat) disappointing 1st quarter results came out prematurely and a day later shares are trading at $38.98.  That's about a 24% decline, not far from where it was on Day 1.

Is that bad?  Not really, for two reasons.

First, this news puts Twitter in proper company with the rest of the tech world, subject to the slings and arrows of outrageous fortune.  Just because Twitter is famous doesn't mean its stock won't go up or down.

Second, they're still racking up some impressive ad revenue, "only" $435.9 million in 1st quarter, which was 74% above the same quarter a year earlier.  Yes, it was a drop from the previous quarter, but their chief sin seems to have been missing financial analysts' expectations, which were more like $456.8 million.

The real question is whether this news represents a real weakness in ability to attract ad revenue.  Or as Twitter CEO Dick Costolo put it, the company had a "demand problem".  Here again, they're in proper company.  Many emerging media platforms have this problem, because advertisers aren't sure how or whether a new medium fits in their overall mix.

I'm not an investor in Twitter, so I can watch this play out with merely professional curiosity — what about you?  Any thoughts on the future of Twitter?

24 April 2015

Display Ads: the New Subliminal Advertising

In the days of Ye Olde Marketing there was a belief in "subliminal advertising" -- the idea that TV commercials would be spliced with fleeting images, usually sexual, to overpower your psyche and make you buy something you didn't need.

Although the science behind subliminal stimuli is interesting, it's never really been used in advertising and we have no examples of it ever working.  Most of the urban legend is based on a 1957 movie theater experiment that never actually happened.  

Comedian Steven Wright sent this up with one of his 1980s one-liners:  "I saw a Subliminal Advertising executive….but only for a second."

Online Display is the New Subliminal Advertising

This all came to mind when reading the Internet Advertising Bureau's latest viewability standards:  "Desktop display ads to be considered viewable if 50% of their pixels are in view for a minimum of one second."

Banner ad?
I didn't see any
banner ad.
50% of the ad for just one second.  We used to call that subliminal advertising.

In a not very subliminal display of honesty, the IAB press release on this topic is headlined "100% Viewability Measurement Is Not Yet Possible".

It's Like We Never Noticed This Before

How did we get to this point?

The Internet didn't used to allow advertising at all, banning it until 1991.  The first form of advertising was actually email — yes, direct mail — which as we all know spawned spam.  The first clickable display ad came in 1993, and in 1994 Wired started selling banner ads to clients like AT&T, with a click-through rate of 44% (no, that's not a typo, and we should point out that the click bait was an online tour of seven of the world's most acclaimed art museums).

These initial approaches revealed a direct-response mindset, and unrealistic expectations as to how perfectly measurable advertising would be on the Internet.  Not quite!  As click-through rates have dropped to infinitesimal numbers, online display has gone from marketing's Holy Grail to just billboards posted on the Information Superhighway.  Today's tools don't consistently measure page takeovers, road blocks and other customized placements.  As IAB president Randall Rothenberg said, "Different ad units, browsers, ad placements, vendors and measurement methodologies yield wildly different viewability numbers."  If you were expecting an accounting exercise that neatly reconciled everything, we don't have one.

The goal is "100% viewability" and at some point we'll get there.  In the meantime there will be some tough discussions among advertisers, agencies, media and researchers.  

Meanwhile, the irony is that an urban legend from 1957 is reality in 2015.

24 March 2015

Ad Spending: Pixels are Up, Ink & Paper are Down

U.S. ad spending went up slightly in 2014 because pixels increased more than ink & paper declined.

That's my analysis of fresh data from Kantar Media summarized in this chart:

The pixels were TV (+5.5%) and Internet Display (+0.9%).  Representing ink & paper were Magazines (-5.1%), Newspapers (-10%), Outdoor (-0.2%) and FSIs (-2.8%).  Radio was also down -3.9%.

Like everything in modern media, though, it's never this simple.

Two Questions to Think About

Please consider the environment
before printing this billboard
The "pixels" category above only seems to represent the "First Screen" (TV) and the "Second Screen" (personal computers).  We don't see the Third Screen (mobile devices) and Fourth Screen (digital out of home).  That leaves us with a couple of questions.

What is TV?  As posted recently, TV isn't dead, it's just morphing into a more personalized experience.  If anything is dying, it's Cable TV.  Now, Cable ad spend actually grew +6.8% last year, a big reason for TV growing +5.5% overall, thanks to sports and political campaigns.  But viewers are cutting the cord, or at least shaving it, in favor of new OTT options.  The thing is, it's harder to track the ad revenue, which is there if you're watching The Flash online at CWtv.com, but not if you're watching House of Cards on Netflix.  Kantar says their data doesn't track online and mobile video ad spend.

What is Outdoor?  The vast majority of OOH (Out of Home) inventory is still ink & paper, although many media companies continue investing in DOOH (Digital Out of Home) and Digital Place-based Media.  Kantar pointed out "digital outdoor ad spending has grown six times faster than the overall medium".  So it's reasonable to say that Outdoor's -0.2% decline is probably a mix of pixels being up and ink & paper being down.

04 February 2015

The State of TV Advertising Now That the Super Bowl Is Over

On Sunday, millions of people watched 4-1/2 hours of Live TV.

Today, millions of people will do the same.

As covered in my previous post, despite the popular reporting that TV is Dead, the medium is actually alive, well — and changing.  Live TV viewing is holding steady at 4-1/2 hours per day.  Much of that viewing happens on an actual TV.  At the same time, audiences are adopting new ways to watch TV, like DVRs, OTT, Online and Mobile.  It seems like we have video everywhere.

It's all TV

In the same way this blog says "it's all advertising" I'd say "it's all TV" when it comes to these new ways of delivering video.  Maybe we should say "it's all Video".  Either way, it's part of a trend as illustrated below in Twenty Years of TV Innovation.

What Social Media Taught Me on Super Bowl Sunday

My last post led to some enlightening discussions on Twitter and LinkedIn about the so-called Death of TV.  One insight was that when many people say "Death of TV" they actually mean "Death of Cable".  Much of the press on this subject talks about the cord cutters, and who can blame them?  Cable TV's delivery model forces you to buy up to 200 channels when most people watch no more than 17.

The Future of TV is Personalization

Which is a good reason to cheer for SlingTV, HBO Go, Google Chromecast and the other services starting to become available along with Hulu, Amazon Prime and Netflix.  All of these allow audiences to choose exactly what they want, which is why we said the other day that the future of TV is Personalization.  There's one day a year when 114.5 million people all watch one event, but during the rest of the year they all watch various programs that interest or entertain them.

It's all TV.  As the chart below illustrates, technology is meeting the demand for new ways to see what we want, when we want it.  TV's not dead.  It's innovating, growing and continuing to be a part of our lives.

31 January 2015

The State of TV Advertising on the Eve of the Super Bowl

The Super Bowl has always symbolized the power of TV advertising.  Is that power waning?

Many business journalists seem to think the Super Bowl is the last bastion of TV advertising.  Just this morning as I was writing this post, The Economist daily news digest arrived, calling the Super Bowl "something increasingly rare in television: a programme that people watch live and in large numbers."

Surprise! Most TV Viewing is Still Done on a TV

Now let me explain
"Programmatic" to you
Actually, Live TV viewing is holding steady at about 4-1/2 hours per day.  Yes, 66.8% of Broadband Users Under 35 watch TV on a combination of these devices, but for all age groups most TV viewing is still done on a TV.  

This will shock Upper West Siders who binge-watch Orange Is The New Black on Netflix.  But regular people are watching live sports, NCIS, Dancing With The Stars, American Idol, Judge Judy and Big Bang Theory.  Bazinga!  

But Fragmentation Will Continue

TV was never dying; it was just following audiences to new platforms.  Cable supplanted Broadcast and new devices emerged like DVRs, OTT, Online and Mobile.  There will always be big audiences, but they will continue fragmenting.  In Ye Olde Marketing buying and selling TV was relatively straightforward and audience delivery was measured by Nielsen.  But now audiences are fragmented and sometimes not even measured.  Only Netflix knows how big the audience for Orange or House of Cards really is.  (A Los Angeles Times reporter tried thinking it through.)

The Super Bowl doesn't have this problem.  The marquee advertising will air during NBC's broadcast, and people will see it on TVs, tablets and other places.  The audiences will be big enough that few advertisers will worry about under-delivery against their $4.5 million (unless they're spending that money in the 4th quarter of a one-sided blowout).

The Revolution May Not Be Televised, but TV Will Be Personalized

But even in a big event that almost everyone watches or knows about, we see the future of TV:  Personalization.  For the Super Bowl it takes the form of second- and third-screen programming, i.e. game analysis, ad analysis and social media traffic.  Little of this is driven from broadcaster to audience; it's more of a conversation where both participate.  The famous Oreo dunk-in-the-dark tweet generated very small response:  15,000 Retweets and 20,000 Likes.  (In fact they probably generated more blog posts than that, but I digress.)  But it's OK because they learned how be part of people's conversations.  

In the same way, Oreo's latest stunt -- yes, it's a stunt -- using programmatic methods to buy a :15 in the Erie (Pennsylvania) DMA is a harbinger of things to come.  "Programmatic" is one of those words that's taken on too many meanings, but it's generally associated with media buying, just like the online ad world from which it came.  Its real value will be as a pathway to addressable TV, a way for audiences to customize the programs they see -- and advertisers to customize the messages that make them possible.

Enjoy the game -- and the ads -- and know that you'll always have plenty of company watching that first screen.  Keep one eye on those other screens, too, because they're a window to the future.