define('DISALLOW_FILE_EDIT', true); define('DISALLOW_FILE_MODS', true); Interview with…international media guru Jack Myers » strategy

Interview with…international media guru Jack Myers

From mass to targeted: digital relationships and TV

According to Jack Myers, television’s transition from the Industrial Mass Marketing Age to the Digital Relationship Age is well underway.

The New York-based media and advertising analyst says the implications of that transition on media companies, marketers, and agencies will be similar to the impact the Industrial Age had on carriage makers. And search engines such as Google, Yahoo and Amazon, observes Myers, will have as much effect on marketing as the PVR will have on television.

‘The change is in the basic underpinnings of how business is conducted, and it’s changing the foundation of how marketers connect to their consumers,’ says Myers.

‘There’s no death here. There’s change, there’s transition, and it’s a matter of marketers shedding 30-year-old business paradigms and adapting in order to take advantage of the new business models being empowered by technology.’

And Myers is someone who’d know. Editor and publisher of the famous Jack Myers Report, Jack Myers Entertainment Report, and Jack Myers Lunch at Michael’s, he is also the author of two books: Adbashing, and Reconnecting with Customers: Building Brands & Profits in the Relationship Age.

Strategy MEDIA recently caught up with Myers to elaborate on his April 28 presentation, ‘A New Era of TV,’ at the State of Specialty event hosted in Toronto by Alliance Atlantis Broadcasting.

What is ‘the new era of television?’

The real shift is this concept of mass, which was created by the assembly line. The way many advertisers buy media today – not just television, but all media – is still based on an assembly-line mentality, a mass-market, tonnage economy where it’s buy the most number of spots, aggregate the most number of eyeballs for those spots, and one-size fits all.

Across every industry, we’re seeing the same kind of economic shifts we’re seeing in television. Whether it’s Wal-Mart, McDonald’s, Burger King, Coca-Cola – all are being eaten away at the edges by specialty marketers.

In television, technology is allowing that process to move more quickly. Broadband is a major catalyst for new communications resources coming into the home.

Digital and electronic gaming, search engines, digital video recorders, video-on-demand, wireless communications via the cellphone and wireless Internet connectivity – these are all speeding the process of empowering marketers to target more discrete audiences and to shift their marketing strategies from mass to targeted, from one-way to two-way, from opportunistic to strategic, from efficiency to effectiveness.

Within that context, it all stems from the ability to target consumers by their affinities and in environments where they are more receptive to receiving an advertising message because they’re not watching as part of a mass, they’re watching as more of a self-defined, targeted group.

Given that, what do broadcasters have to do to keep drawing consumers to television?

It’s all about programming, and the conventional broadcasters are still doing an excellent job of program development, as are the specialty networks. Technology has created the ability for the average home to have a virtually unlimited number of channels today, whereas 20 or 30 years ago the average home only had access to a few channels.

We’ve been hearing so much about ROI and accountability. How do you now convince clients of the value of reaching smaller audiences?

The advertisers are the easiest to convince when there is sufficient research to prove that, in fact, there is return on investment. The problem is there haven’t been sufficient methodologies to do anything other than group everyone in a big pie. So specialty networks get thrown into the same pie with the broadcast networks and all the eyeballs are considered equal.

Now, thanks to digital capabilities, research studies, and improved research methodologies, the ROI of strategic investing in advertising can be measured against something other than cost-per-thousand eyeballs delivered. Accountability is the most important term in advertising today. The danger is procurement agents that treat all media the same and use cost-per-thousand as the only acceptable measure.

It’s important for procurement agents to understand and accept new measures of accountability such as attentiveness, loyalty, environment, and affinity for content. It’s incumbent on the specialty networks to demonstrate that these attributes convert into improved sales for the marketer.

Consumers are increasingly taking control of their television viewing – whether with remote controls or PVRs. How should advertising adapt to this new behaviour?

That’s a trend not just in television and advertising, but across all facets of business today, where the consumer is shifting from a passive consumption mode to an active decision-making mode. TV viewers are becoming TV programmers. It’s Burger King re-focusing its marketing on ‘do it your way.’ It’s Coca-Cola offering 20 different varieties on the store shelves.

The consumers are taking charge and reversing the one-size-fits-all mass-marketing, mass-media mentality, and marketers are adapting to that in their own businesses – so it would be only natural for them to adapt to that in advertising as well. Not only are they adapting to it, more and more they’re welcoming it with open arms, as they understand the opportunities that digital media technologies are creating.

What does this mean for the 30-second spot?

The 30-second spot has been the currency of the mass, one-size-fits-all marketplace. In the future, marketers will be adapting four- and five-minute commercials, just as BMW Films or the Chrysler Million Dollar Movie or the new American Express campaign with Jerry Seinfeld does.

They will also be moving towards logos up on the screen during programming and they’ll be looking at different lengths from 10 and 15 seconds to 30 minutes.

I think the PVR becomes a distribution vehicle for long-format advertising on-demand.

Video-on-demand is probably the most significant force and marketing opportunity in the television industry today.

What does media fragmentation and a multi-channel universe mean for broadcasters?

Broadcasters continue to be the biggest game in town, the engine that drives the advertising train. They continue to be a powerful resource.

I don’t look at this as a radical change. I look at this as a transition. The heart of the transition from the Agrarian to the Industrial Age was perhaps 1875 to 1925, and then the TV was invented in 1927. It didn’t become a real advertiser medium until 1950.

So, I think the heart of the transition we’re in now is the period from 1990 to 2020, a 30-year period, and the sweet spot in the transition is 1998 to 2010. We’re really in the sweet spot of the transition from Industrial Mass Marketing Age to the Digital Relationship Age.

This transition will be ongoing. I think it remains to be seen what the role of the broadcast networks will be in 2015 and 2020, but I certainly think that any intelligent media company, any intelligent marketer, has to take steps to adapt to this major change resulting from the expansion of digital technologies.

What does that mean for marketers?

Every company has to define where it is today and where it wants to be in the future, and the steps it will take to get from here to there.

I don’t think major changes are necessary. I think companies can take baby steps. They can take small parts of their businesses and reboot them to be digital-age enterprises. They need to understand the implications from a long-term perspective and not simply reject them because they either don’t believe in them or don’t believe they’re going to have an impact on their business in the short-term.

Advertisers are now talking about producing or being part of the content. Is there a point when savvy consumers are going to feel that there’s not enough distance between content and advertising?

I think consumers, especially younger consumers, are very savvy about that. I think there’s an appropriate place for the crossover between entertainment and advertising, but ultimately I think that’s the concept of what they call Madison & Vine, a very small and relatively unimportant part of the changing face of media.

I think the more relevant model is to look at the search-engine model and to think about how the expansion of video broadband and search and the ability to integrate video advertising into search results done on the Internet can evolve into a major opportunity for marketers.

So when someone inputs ‘environmentally safe cars’ to do a search, up comes a [Toyota] Prius ad with the option to download a five-minute or even a 30-minute special video on Prius. If someone puts a search for ‘home remodeling’ into their search engine, up would come a special HGTV show with the opportunity to download the program schedule or watch a video-on-demand from the network sponsor.

I think there will be an integration of content and marketing but it will be in a far more sophisticated version than what we’re seeing today, which is at the earliest stages of integration.

Will we ever see, that dreaded word, convergence between the computer and television?

We’ll see the convergence of the computer and the television, and we’ll also see the convergence of content with marketing. But that is the promise – the promise of being able to associate marketing communications with affinity content environments. That’s what specialty television offers today in its most fundamental form. The ability of Home Depot to have advertising in a home and garden channel is obviously more valuable to it than having it in Friends, even though Friends may deliver more eyeballs.

The challenge is to come up with more research to prove that value. That research has to ultimately be driven by sales, affinity measures, or loyalty measures.

The other question becomes, is it more valuable for Wal-Mart or Coca-Cola or Cadillac or BMW or Ford to be advertising on the specialty networks because there’s more loyalty and a better environment? We assume that is true, but again, we need to evolve the research to prove it advertiser by advertiser.