Media Companies Can't Wait Any Longer

Radio Ink

by -- Mike Drexler

January 8, 2014

Media companies have always had the opportunity to play a bigger role in client marketing decisions. But many have not taken advantage of it; and still don't. Why? Because (a) they often don't ask the right questions, or (b) meet with the right people at the right time, or (c) are simply just focused on selling their inventory to meet a quota. Perhaps there are answers that will help to provide more consistent, long-term results. Let me explain.

First of all, if media companies want to be real partners with agencies and advertisers they must ask questions that will help to understand what the advertiser wants to achieve. What are the objectives of the campaign? What is the strategy being employed and what tactics are being used? These are basic questions that a media seller must ask in order to put forward the most relevant sales proposition. Next, who can provide all the necessary information, not just the buyer, but the strategic planner and the research insight executive as well as the creative staff? By the time implementation takes place the media have been established and the budgets are set. Too late to make any real difference. And finally, media vendors must think in terms of helping to solve particular issues or challenges facing the advertiser. A customized and innovative solution to solve a problem.

Too often, media sales executives concentrate on obtaining a greater share of the budget already allocated to the medium, instead of how they can obtain a greater share of the marketing budget. In other words, getting in early, seeing the right people up and down the line and even meeting with the creative people working on the campaign. Media companies have many assets to contribute to marketing a client's brand. They have devoted creative services, distribution platforms, editorial or programming content, promotion opportunities, events (i.e. experiential marketing), public relations involvement, conferences, research studies, data bases and more. How often do they bring theses assets to the agency or client, particularly as an integrated marketing concept along with their core traditional or digital product, which can attract both above and below the line investments? This process may also require a modification in infrastructure to produce some real collaboration and while this is happening, cost control and operating efficiency need to be addressed.

There are many new challenges facing everyone in the advertising and media business and we must all adapt to the rapidly changing media environment. As Sir Martin Sorrell recently put it," The most difficult thing in an organization is to get everyone inside the company to understand strategic and cultural change." He is right.

As experts in media consulting, Drexler/Fajen and Partners has worked with many advertisers, agencies and media companies over many years. With an inside view of the planning and buying process and it's transition to customized content, automated transactions, data analytics and measurement, we know how important it is for media companies to develop new selling approaches for both their traditional and digital properties. The bottom line of what clients are looking for hasn't really changed. It is the need to accomplish their goals with resources and methods necessary to do the job that has changed dramatically. Media companies should be an integral part of the development of a client's marketing plan long before sellers and buyers meet to review inventory and negotiate price. And, it needs to be done, now.

Global auto sales forecast rosy, with reservations, for 2014

Reuters

BY BERNIE WOODALL AND LAURENCE FROST

DETROIT Sun Jan 12, 2014 12:08pm EST

 
Automakers are upbeat about global auto sales this year despite fears of a slowdown in the United States, which generates big profits and where sales have surged 50 percent since the recession.

Europe is expected to begin bouncing back from its 20-year lows and China, the world's largest auto market, will likely continue to post double-digit gains, helped by an array of stimulus measures and robust demand in smaller inland cities. But slowing demand in the second-largest auto market, the United States, has some analysts worried incentives could rise and bit into profit margins.

"You could see some pressure on the quality of profits," Hans-Werner Kaas, senior partner at McKinsey's automotive practice, said of the U.S. market. He is worried automakers will lose the pricing discipline they have shown since the low-point of the recession in 2009, when General Motors Co (GM.N) and Chrysler Group (FIA.MI) filed for bankruptcyprotection.

Worldwide, auto sales in 2014 are seen rising 3.4 percent, according to research firm IHS, while LMC Automotive sees an increase of 5 percent. Talk of sales and the challenges ahead will be a topic of conversation among executives at the Detroit auto show this week.

In the U.S. market, analysts expect sales to land somewhere between 16 million and 16.5 million, near pre-recessionary levels, which would mean an increase of as much as 5.8 percent. In the decade before the recession began in 2008, the U.S. market averaged 16.7 million new-vehicle sales annually.

While sales could rise as much as 5.8 percent in the United States this year, that would be down from 7.6 percent growth last year and about half the double-digit gains in the three prior years as the market rebounded from 2009's lows.

"We're out of the restructuring phase and out of the riding the normal recovery growth and I think sometime at the end of 2014, or somewhere in 2015 — the growth from the 10 plus million cars in the U.S. to somewhere between 16 and 17 will be gone," said Xavier Mosquet, senior partner and managing director at Boston Consulting Group.

As growth slows, there will be more pressure on all players in the U.S. market to lower prices and raise incentives to keep up sales, which could hit company profits.

Kaas said that if the growth plans of all manufacturers in the U.S. market came to pass, sales would top the forecasts of 16 million to 16.5 million, so some automakers will miss their targets. In an effort to make those marks, they will be under increased pressure to lure buyers with overly generous incentives.

Japanese automakers, who did not put much "cash on the hood" like their U.S. rivals before the recession, may hike incentives in order to compete, Kaas said. Thanks to the weaker yen, the Japanese companies have room to do that without suffering too much, but that could force others to respond.

 

 

Heres What's Going to Happen to Radio

Radio Ink

January 15, 2014

Mike Stiles

I put off writing this particular blog for a while.  I suppose I was waiting to be wrong, or looking for a development that would change my mind.  But gazing into radio’s future as things stand now, I’m pretty confident this is where we’re headed.  As always, there are choices: adapt and evolve to put yourself in the best position possible, or cling to old technologies & old business models, hoping the whole “Internet thing” goes away.

Some feel social has little to do with radio, or is just a promotional tool deserving a tiny sliver of attention.  Having spent a career in radio, and now being inside the premiere social marketing platform used by the globe’s most recognizable brands, I can tell you that everything you’ve known and all your radio conventional wisdom is going away.

Don’t glare at me.  In your gut you can already feel it.  You already know it.

Despite the grasping of any stat showing radio still has listeners and advertisers, the writing on the wall is…people want what they want, where they want it, when they want it.  Their patience for sitting through songs they don't like or 5-minute stopsets is coming to an end.  Advertisers want hyper-targeting and accountability.  Their patience for not knowing who heard their spot or what they did after they heard it is coming to an end.

Social addresses, or is well into the process of addressing, all of these wants and needs.  That’s why not only does social have something to do with radio, radio will one day be absorbed into social networks entirely.  I’ll give you a second to recoup.

In case you haven’t noticed, Facebook is setting itself up as the primary delivery vehicle for ALL content; audio, video, gaming and shopping.  The new Open Graph capabilities allow for the creation of apps by everyone from Pandora to Spotify to Netflixto iTunes to Zynga to Electronic Arts to JCPenney to Best Buy and beyond.  Anyone can integrate into Facebook and tap into the incredible sharing, engagement, discovery, and marketing powers it brings to bear. 

Content creators have access to Facebook’s audience of users, which if you haven’t heard, is a bit large.  The numerous ways they can engage that content (Like, share, comment, play, listen, watch, buy, want, etc.) not only grows the content’s audience, it builds relationships between brands and the fans who like them.

Marketers have access to these same engagement, sharing and discovery powers, with the added bonus of more comprehensive, accurate analytics, and more targeting by demo and location, than ever before.  And oh yeah, people can buy their products right there on Facebook via sCommerce.

Your near future: a user who used to listen to radio will head to work in their car, listening through a Facebook app to a high-quality stream of a station they’ve customized to their personal taste.  They can switch between custom stations via voice command.  If they want news, weather or traffic, they can call up instant, accurate reports.  What they’re listening to is being automatically shared.  A friend may initiate an audio chat session to talk about a song or news item.  A display ad on the car’s screen will offer a deal.  Saying “buy” will put the item in a cart for later purchase at a computer.  Or, since your car knows where you are and what time it is, the ad may offer a deal on a breakfast sandwich at this place right up the road.

Seriously…what are you going to throw against that? 

The above is what “radio” will mean.  It’s what it will be.  You’re about to jump off a ledge, and whether or not you have anything to land on will depend on how serious you’re being right now about your social strategy.

But I like leaving you with good news.  You are, at the core of your business, content creators.  And the demand for content is skyrocketing.  Without it, there can be no engagement for advertisers.  Screw commercials. You can give marketers branded content.  No, you don’t make the songs.  But you can creatively showcase them.  And you can go back to finding and fostering local entertainers (NOT jocks…I said entertainers), who know how to attract, build and hold audiences.  Their value as product endorsers is about to explode.  Got rid of them all?  Sucks to be you.

You have a known, local brand that, with the right content, can be leveraged into a meaningful Facebook destination.  But that is what you’ll be, a Facebook destination.  Can you be cool with that?  Build your app.  Integrate.  Create your Facebook station. Build a solid place to land. 

Mike Stiles is a writer/producer with the social marketing tech platform, Vitrue, and head of Sketchworks comedy theatre. Check out his monologue blog, The Stiles Files.

 

If Aereo Wins, Broadcast Sky Will Not Fall

TVWatch

by Wayne Friedman, Yesterday, 2:46 PM

Every broadcast executive must mull one question over the next few months:  What if Aereo wins?

One veteran and well-regarded media agency executive/futurist -- Tim Hanlon, founder/chief executive officer of The Vertere Group -- doesn’t believe the industry will turn upside down.

“I believe the sky will not fall if Aereo is successful,” Hanlon told TV Watch. “If I’m a broadcaster right now,  the good news is there are number of ways broadcasters can survive and thrive.”

 

The broadcasters' case against Aereo, the Internet-streaming service, will go to the Supreme Court in the next month or two, with a possible decision occurring in June. Aereo’s premise is that all customers can have "digital antennas" assigned in getting broadcast signals. Broadcasters believe Aereo is violating copyright laws.  

 

If Aereo prevails, many analysts believe that other pay TV providers -- from DirecTV to Time Warner Cable to Comcast  -- will consider similar services to give consumers lower-cost TV entertainment. And they won’t paying anything for local broadcast signals.

 

But what if those signals aren’t exactly what they used to be?

“There could be a bifurcated marketplace,” said Hanlon.  The key comes from broadcasters’ owning premium content that viewers and marketers  desire.

 

A “free” broadcast service could contain basic programming with few frills. But there could be another version of broadcast programming networks,  a la cable networks -- highly valued, so that pay TV providers might want to buy them via subscription fees. Both kinds of services would still benefit from being advertising-supported.

 

More frugal-minded entertainment consumers will seek simple packages that Hanlon calls “good enough TV.”

Recently, Aereo tried to shift its legal argument towards the so-called "network DVR" issue that cable TV provider Cablevision prevailed upon a few years ago.

 

“It’s about innovation in media around cloud storage,” said Hanlon. “If consumers are allowed to buy antennas, if they are allowed to buy DVRs, if they are allowed to buy Slingboxes, there is likely no reason why consumers can’t legally lease all of this -- especially if you can buy it.”

 

Hanlon said the fundamental issue goes to the core question of what a broadcast network is these days. And another question: Can broadcasters now have it both ways?  For example, can they complain about commercial skipping from the likes of Dish’s AutoHop, while they also seek subscription fees like ad-supported cable networks from pay TV providers?

 

Maybe in a new way they can. But will a favorable Aereo decision “blow up” the broadcast business, as many have predicted? Not really.

MediaDailyNews

TV - Not Dying. Diversifying.

by Mike Bloxham, Jan 9, 2014, 10:22 AM

The media and tech worlds have long been enamored of the shiny and the new — and the extravagance and wonder currently in full swing at CES is probably the best testament to that you’ll ever see. Conversely, there are some things that just won’t die.

Among these are the seemingly immortal predictions of the demise, doom, death, decay and all-round destruction of TV.

Whether this particular breed of media punditry and its unwillingness to die more closely resembles a zombie or a vampire is debatable, but it demonstrates some of the same characteristics of those denizens of the undead and seems just about as popular in some quarters.

The extent to which some from the digital space, who see media consumption and its future as a purely zero sum game in which there can be only one victor, echo the refrain “TV is dead” is both alarming and depressing.

The extent to which a disappointing number of journalists and other writers re-work the now-tired story on slow news days — often based on only one press release about one piece of research —is equally annoying.  Of course, articles about the demise of TV are shared and tweeted at alarming rates and often with great glee across social media. The result: it all seems like an even bigger story.

And yet, here we are and TV remains alive and well with more original content being produced than ever before and more revenue streams feeding the beast.  Even ad revenue is generally holding up in rough economic times.

Sure, things are changing — but those who blithely throw out the offhand and super-nonchalant comment that “TV is a medium that will be gone in 20 years” are at best guilty of lazy thinking or possibly plain delusional.

The important thing to remember is that TV — just like everything else — exists in a kind of ecosystem that includes not only the obvious cast of characters, like the broadcast and cable networks and their various offerings, but also the OTT players, many online businesses, consumer electronics manufacturers, advertising agencies, brands, retailers, production companies and the businesses that support them, etc.

There’s a very real interdependence that ensures all these parties and others survive and thrive in relation to each other.  Netflix and Amazon Prime need TV content to make available on their services; its unlikely they’d survive with movies alone. Amazon also sells TV product direct to consumers. The movie industry needs the TV industry to be healthy to provide a revenue friendly distribution channel for it’s output.  And increasingly, we are seeing more TV content supporting various time-shifted viewing businesses – whether paid VOD or online services – without which their offerings may be somewhat lacking.

Similarly, advertisers and their agencies still rely on TV to reach large, definable audiences to convey a sight, sound and video based message – at the same time.  Even though the Web delivers large numbers, we have yet to see any sustainable evidence to support the notion that the web can deliver audiences in the way TV does (but then we shouldn’t expect it to).

All of these parties rely to a frequently greater though sometimes lesser extent though on the biggest player in the ecosystem: TV.

Survival of many players in the video ecosystem would be untenable if TV really did “die.” It would be the biological equivalent of the earth’s sun turning off the lights with the inevitable results.  Just think what would happen to California.

Naturally, the changes in technology and media, added to changes in how we live, will lead to changes for the TV business.  Already, the term is increasingly referred to in the broader context of video. and I can’t think of a single ”TV company” that isn’t operating beyond those conventional definitions.

To assume that these huge, well-resourced companies staffed by smart people are simply going to go away is naïve in the extreme.  A more plausible reality is that they will continue to evolve and drive things like time-shifted viewing — to name but one declared threat to the current TV model — evolving it as a profit center as they go.  Maybe they’ll buy Netflix. (I know at least one cable company seriously considered that at one point.)

These days, just about everything is increasingly about video (even the print business is getting in on the act) and that’s only going to increase – and “TV companies” are going to be a major part of that. I have no illusions about the TV and video business and the challenges it faces — no more than I do about the digital and mobile sides of the media industry. 

Nor do I make things like New Year resolutions (I know it’s late).  But I do profoundly hope that going forward the debates about the future of the TV and video business can be based more firmly in reality than much of what we saw toward the end of 2013.

 Let’s just focus on doing a better job of understanding and making the most of video as a consumer proposition across any screen that can deliver it.  Call it TV, call it video, call it content.  Consumers call it “my program” or “my show.” That’s what matters.

2014: The Year Mobile Kills More People, While We Sell More Ads

by Ari Rosenberg, Thursday, Jan. 9, 2014

Our industry trades have been filled with predictions for the new year.  One that caught my eye was from Google’s Eric Schmidt, who announced that in 2014 mobile “has won.” Here is a prediction about mobile that will be more accurate than Schmidt’s, one that industry pundits will never share: In 2014, more people will die because of their mobile devices. According to various research studies reporting on prior years, one can sadly guess that roughly 30,000 people will lose their lives in a car crash in the United States in 2014.  2.4 million will be left seriously injured and/or disabled. A number harder to report is how many people not involved directly in these accidents will never be the same after them.  A number easier to identify: Roughly 25% of all car accidents in 2014 will be caused by drivers distracted by their mobile device. How ironic we call them “smartphones,” when there is nothing dumber-looking than seeing drivers talking on the phone as if they were sitting at their desk and not behind the wheel of a 4,000-pound vehicle traveling 65 miles per hour.   Dumb then melts into moronic when you see someone looking up and down frantically between the road and their phone, reading and responding to text messages while driving. I implore all of you reading to join me in a New Year’s resolution to turn our phones off before we get into our cars.  Nope, not even “hands-free.”  That’s not helping to eliminate the problem, as your eyes still dart away from the road to make and receive calls, and your mind wanders even further from the job at hand.  I am talking about literally turning off your mobile devices as you enter your car, and turning them back on only when you get out. While many of you reading are nodding “not a chance,” how many of you nodding “yes” will fail to keep this resolution?  A majority.  New Year’s resolutions are generally broken and we are all addicted to our mobile devices (as Jeff Einstein has been saying for a long time now). Any doubts?  Think about how many people turn their phones off in a movie theater, relative to how often they turn their phones off anywhere else (dinners, meetings, ballparks, soccer games, bedrooms, the car, etc.).  The only time we universally agree to turn off the small screen in our hand is when we can look at a gigantic screen instead.  And next time you're in a theater, look at the growing number of people who can no longer manage even to do that. Mobile isn’t a just sector in the telecommunications business anymore. Figuratively, it's in the tobacco business, getting fat feeding off addictive behavior.  Not buying the similarities?  Those AT&T and Sprint ads telling us "don't text and drive” seem awfully similar to the ads cigarette companies have run telling us “don't smoke.” Should the mobile advertising industry be condemned because it benefits monetarily from addictive consumer behavior? Is the industry responsible for contributing to the loss of lives?  No, but this is new ground we’re covering -- no other prior media platform has ever been this statistically tied to the loss of human lives.  Can we honestly go about our business of selling mobile ads and not own that we are helping fund this problem? Tougher state laws against texting and driving have limited powers, since the highest percentage of accidents due to “mobile device distraction” come from making and receiving calls.  A solution with any chance of making an impact can only come from those contributing to the problem. 1.  Cell phone carriers: Forget about changing the addictive behavior of the driver -- and instead, shift the focus onto the recipient.  Whether it’s a call or text, have a verbal or written message automatically included beforehand that announces, “This call (or text) has come from a moving vehicle.” Now the recipient has to think about the ramifications of carrying on back and forth.   No one in his or her right mind would hand a tequila shot to someone driving. With this feature, the recipient can now decide to end the communication before it starts (or at least shorten it dramatically). If Sprint offered this feature today, every parent in the country would sign up his or her teenage driver for Sprint’s cell service tomorrow. 2.  Cell phone makers: If Apple supported this “feature,” every parent in-market for his teen-age child’s first smartphone would buy an iPhone. 3. Mobile publishers: #leadtheway #savelives.  Facebook and Twitter, stop tweets and news feed updates from appearing when it is technologically assumed someone in a moving car is reading them.  Include a “disable feature,” like having someone type in a Captcha to prove he is not the one driving. If these behemoths lead, other publishers would follow. 4. Mobile advertisers: Stop supporting mobile with ad dollars until this problem is fervently addressed. Pepsi, Subway, McDonald’s and hundreds of other brands won’t be negatively affected by not advertising on mobile devices -- and telling consumers why will earn unimaginable goodwill and positive PR. 5.  Mobile consumers: Spread the word and give this New Year’s resolution a chance to prevail.  What are we really losing by turning our phones off while we are e route to wherever it is we are going? Mobile can win so much more if the industry took a time-out and made sure winning no longer created unfathomable losses. PS We used to enjoy being with friends and family when we dine or eat out..but recently while patronizing a few restaurants over the holidays I viewed friends and family texting and almost never talking with whom they went. Table after table no one was communicating with their family or friends. Texting seems to have become the rude norm. Which begs the question: Will interpersonal communications vanish in the next five years and will the future leaders of American industries not know how to write an essay or talk to a friend or a family member via telephone or walk over to an employee and have a meaningful conversation with them?  Philip Jay LeNoble, Ph.D.

THIS Is The Year Of Mobile Advertising!

OnlineSpin

Thursday, Jan. 9, 2014 
 By Joe Marchese

How many years have been “the year” mobile advertising finally catches up to the massive growth in consumer time spent on mobile? As you marinate on that question, take a second also to reflect on how often you’ve read the headline that “this is the year” digital advertising dollars finally catch up with the amount of time consumers are spending with digital media. It’s become a cliché at this point.

(Spoiler alert: digital advertising still hasn’t caught up with the amount of time people spend there.)
“Who cares!?! Have you seen how fast mobile usage is growing!??!?!!”
Sigh…

I’m not saying that mobile won’t continue to grow. As many industry trades and pundits have pointed out, mobile continues to be a factor for driving growth in advertising, and is estimated to make up 8.4% of ad spend by 2015.

That said, before we see yet another chart that shows the time spent on mobile vs. the advertising spend on mobile, can we please take a breath and admit that maybe the problem isn’t that advertisers don’t want to be on mobile (they do), or that it wouldn’t be great for advertisers to be on mobile (it would). Maybe, just maybe, the problem is that consumers hate mobile advertising. Pause, and let that sink in for a sec.

The new reality of the smartphone-powered consumer prompts the need for a reality check. If we want to get serious about getting mobile advertising working, we should be willing to take a hard look at the three biggest places mobile advertising fails:

Situational context: Yes, people might not like advertising on any platform, whether TV, radio, tablets or PC. But mobile presents a different problem. With true mobile (excluding tablets), many times people are in situations not conducive to interruptive advertising. Think going for a run, the two minutes before someone shows up for a meeting, looking for directions on the way to a meeting, etc. Most of the situations have time constraints, so the bar for someone to consume any message other than the one they are looking for is very, very high. Which leads to the second problem….

Pricing: Decent message delivery in mobile requires the whole screen, which is a very interruptive experience on a device as intimate as your phone. For people to be willing to tolerate that, the value they get from a publisher had better be extremely high. Even at the highest CPMs today, publishers can only extract pennies from advertisers, so why not just have people pay? It’s not worth it to cause a dollar's worth of negative experience for pennies in value. I can almost hear folks crying, “That’s why the ads have to be so good they don’t bother people!!” Well, that leads to the next point…

Canvas and creative: Making great mobile applications is hard. Not only do you have a very limited canvas for interaction, but you have to design for iOS, Android, Microsoft and account for multiple screen sizes while doing so. Success in mobile marketing -- think Nike+ -- necessitates significant investment in product design and iteration. The reality is that companies are not investing in mobile advertisements in the same way because their lifespan isn’t as long, and because there is very low expectation that people will look at them in the first place (see points one and two above).

Performance marketing will work in mobile, as will branded products a la Nike (though only to an degree, as there are a lot of apps competing for attention, and only a few see regular usage). Yes, there are exciting mobile advertising breakthroughs such as programmatic buying, mobile video, and improved targeting that have caught the attention of our industry, but none of these factors have yet to move the needle. Mobile advertising as we know it today will not work. But, great news: I can save this headline for next year!