Wednesday, January 22, 2014

Dear traditional TV broadcasters: don't be Blackberry!

If you go by the numbers, TV is Coca-Cola. It is a massive “brand” with universal awareness, recognition, even love. But at the same time, it is stuck and refuses to grow market share while it is being attacked by newcomers in the category that we could never have imagined when Coke launched. Depending on whose numbers you believe, TV as well as Coke has been delivering flat or marginal market share numbers, and in some target groups delivering even the dreaded “negative growth”.

At the same time, I think we can all agree that TV content, along with a lot of other “video” content, is experiencing a bit of a renaissance that perhaps began when HBO started commissioning original drama content. How we love The Walking Dead, Modern Family, Downton Abbey, House of Cards, even late night thanks in large part to Jimmy Fallon and his finger-on-the-cultural-pulse collaborations and skits.

And as a commercial medium, TV seems to be doing quite well thank you very much. Despite best efforts by the likes of Joseph Jaffe and myself, TV is still very often the scaffolding that holds up the whole campaign (or IS the whole campaign). Many brand marketers are still developing their activities from a campaign centric starting point rather than a consumer centric starting point. The Super Bowl is yet again sold out.


Much of the marketing eco-system is rigged in TV’s favor, which helps. If your capability as an able marketer is determined in part by TV pre-test Milward Brown One Number Scores, you are going to want TV copy. If, as an ad agency, part of your bonus depends on delivering “cut through copy” (as measured by, you guessed it, Milward Brown’s One Number Score) you are always going to recommend producing TV copy. If, as a Media Agency, part of your bonus depends on delivering below market or below inflation TV CPM’s, you are going to put TV on your media plan proposals.

I recently spent time with a group of senior commercial TV sales executives from around Europe. It was the second time that I chaired one of their three days of workshopping. Obviously they were there to find ways to break the stale-mate, and understand how to position themselves against the new competitors who are after “their” TV dollars. It is no secret that Google/YouTube as well as Facebook have presentations out proclaiming they are like TV, but then better.

This has many of the TV executives very worried.

Their seat at the marketing budget setting table has mostly become one of commodity, where digital’s seat at the table is right next to the emperor, basking in the attention and closeness to power. TV plans have become your dull uncle the accountant, always talking about price.

Never mind that YouTube viewing in the UK for instance only commands 5 hours of the roughly 107 hours spent on all forms of TV by the average Briton. Never mind that TV still commands somewhere between 40% and 80% of a marketer’s media budget. Never mind that all of us in the industry happily tweet away about TV content (Nielsen now measures this).

Top 10 TV Programs on Twitter, Week of Jan. 13-19, 2014

If we would apply a Mary Meeker Metric of share of time spent by marketing execs on TV vs. digital vs. share of dollars spent on TV vs. digital I bet TV would be under-represented.

There are of course huge challenges for TV. The lack of a new currency to measure and trade across all screens (TVRP – Total Video Rating Points anyone?). The lack of agreement on how to define and measure live and delayed viewing. The murky morass – or knights in shining armor – that are DSP’s, online video, programmatic, etc.

And then there is automation. Matt Seiler from IPG’s MediaBrands stated last year that he is pushing his company to automate 50% percent of all media buys (not just digital!) through electronic buying systems. And according to an article in AdWeek, MediaBrands is on track. Don’t think other media agency CEO’s are waiting this one out. WPP just merged Xaxis and 24/7 because together they are capable of delivering WPP’s answer to Matt’s bold challenge.

If Wall Street is any indication, this could diminish the number of people needed to buy and sell media very quickly. In 2004, just over 25% of all Wall Street trades were automated, by 2012 this number had risen to about 65%.

No wonder the commercial TV sales execs are losing sleep. On top of everything else, now their job security as media sellers is under threat from algorithms (as is the job of the media agency buyers).

So you would think there would be a unified call to action. A cohesive, industry-wide re-think of the medium that has served us all so well, and actually, kind of still does. But that is not what is happening by any stretch of the imagination. Why are many of TV’s executives so defensive and so threatened by any evolutionary model of TV?

Why is there such a mess at Hulu, which is just kind of there instead of being the industry leader? Why declare Aero and/or FilmOn as the death of TV? Why not buy them? Legitimize them. The music industry did with Spotify. Granted, the music industry was in the toilet when they agreed to give a start-up led by a 20-year-old their whole catalogue, but still. That’s not you, TV – you’re in a much better place! Why are you leaving it to the Media Agencies (your buyers), Nielsen and Google to figure out your future trading currency? And what’s the deal with the petty battles with cable providers, creating artificial channel black-outs for your consumers?

Nobody is questioning the creative power of good TV content. Great content works on every screen. And therefore, great content has the ability to be monetized. Over and over. And great TV advertising works, too. You are traditionally good at that! However, great TV and its advertising revenues gets killed when it has to live in a restricted, silo-ed, non-smart, conservative and unimaginative business environment.

At the end of our full day of discussions and debate, I told my audience of TV execs that the solution to their TV woes is actually quite simple: build on your strengths and address your weaknesses - biggest share of audience, biggest share of ad dollars, 50 years of TV research into effectiveness, etc. This should not happen in an arrogant way, but TV should act like an industry leader, not a school kid being bullied by "digital".

So let’s agree on two things: good TV is good. But good TV gone bad is not good, and won't survive. Come on TV, don't be Blackberry!

Oh, and watch Kevin’s Spacey’s speech at the August 2013 James MacTaggart Memorial Lecture at the Edinburgh Television Festival.

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