The State of Media

Shared by: Stephanie Padgett

March 4, 2008

The State of Advertising

Plato’s Cave Tom Cruise’s Minority Report

The State of Media

> We’re on the Titanic– And you’re either rearranging the deck chairs– Or out in the cold waters on a lifeboat

The Consumer Conundrum

> Tivo’s The Office to avoid commercials

> “Elves” their family and forwards to friends

> Watches the Oscars in 45 minutes on their DVR

> Spends 45 minutes on their personal M&M

A paradoxical, insoluble, or difficult problem; a dilemma

> Refuses to watch any original programming but still watches the 2002 Tostito’s Bowl on TiVo

Facing Facts

> “We are very much in a revolutionary period in advertising—the signs of which are so clear that within three years most of us will wonder how we didn’t fully appreciate it right off the bat.”

• Christopher Schroeder, CEO The HealthCentral Network

> Consumer are in Control…Captive Audience is DEAD!

Customers want you to talk WITH them not At them!• Mary Beth Price, founder Empower MediaMarketing

Media Spending Trends

Source: Advertising Age analysis of Ad spending data from Universal McCann’s Robert J. Coen. Each vertical line represents one year.

Just 8 short years ago. . .

19%

23%

2%

4%

52%

Magazines Newspaper Outdoor Radio TV

$98 Billion in 2000

Media Choices> TV

– 5 Networks– 20 Cable Nets

> Radio– Spot– National

> Magazines– 200 PIB Titles

> Newspaper> Outdoor

– Billboards– Transit

Source:

To a Media Explosion. . .

$143 Billion in 2006

18%

16%

15%11%

11%

6%

5%

3%

3%

3% 2% 2% 2%1%1%1%

0%

NEWSPAPERS (LOCAL) NETWORK TV CONSUMER MAGAZINES

CABLE TV SPOT TV2 INTERNET3

LOCAL RADIO4 B-TO-B MAGAZINES SYNDICATION - NATIONAL

SPANISH LANGUAGE MEDIA5 OUTDOOR NATIONAL NEWSPAPERS

NATIONAL SPOT RADIO SUNDAY MAGAZINES FSI's6

NETWORK RADIO LOCAL MAGAZINES

Source:

Time Spent with Media

Source: Media Dynamics, Spring 2007

We’re Not in Balance

TV67%

Magazines25%

Newspapers4%

Radio2%

Outdoor1% Internet

1%

TV45%

Radio24%

Internet21%

Magazines6%

Newspaper4%

Weekly time spent by media

Women 25-54 Packaged Goods Spent by Media

The Market Is Adjusting

“2008 is shaping up as a year of contrasts,” said Jon Swallen, SVP Research of TNS Media Intelligence. “Aside from the continued double digit growth rate of Internet display advertising, spending gains will be

driven predominately by the powerful combination of Summer Olympics and record-setting levels of

political advertising. Offsetting this, a weakened economy will have a dampening effect on the

broader, core advertising market.”

“I never understood the frequency, uh-huhYou wore our expectations like an armored suit, uh-huh”

--Michael Stipe, REM

What’s The Frequency?

Broadcast Media Tools. . .Built to Last?

> Average Quarter Hour Ratings

– Nielsen, 1960’s

> Wearout Scores

– ARS, 1970’s

> Recall Factors

– Burke Research, 1980’s

> Recency Planning

– Jones and Ephron, 1990’s

The Future of Broadcast Media Tools

> LPM’s and PPM’s– Nielsen and Arbitron devices begun in the ‘80’s, just deployed – Under fire from MRC

> Project Apollo– Arbitron, Nielsen, advertiser backed single-source research– Terminated 2/25

> TNS Media Intelligence Set top user data– Currently used by Starcom Media Group– Lacks standardization

> Eye Tracking Systems– Being developed by several companies for several media – Measures form of engagement

Search Tools are Here

> Impressions served> Clicks> Conversions> Time Spent

Web Site Analytic Tools are Here

> Referring Source> Time Spent> Geography> Exit Points> Trends

What’s It Worth?

>$21 Billion– 40% Search– 32% Display– 17% Classified– 8% Lead Generation and Referral– 2% E-mail

> Estimated to DOUBLE by 2011!

Source: Emarketer and IAB, 2006

How and Why is This Happening?

Key US TV and Internet Metrics (2006 & 2011 millions)  2006 2011TV viewers 283.5 298.5Broadband Internet users 133.4 200.2Online video viewers 114.3 183.0TV households 111.6 119.4Broadband households 54.6 89.9VOD enabled households 29.7 58.4DVR households 18.6 45.1Source: eMarketer, October 2007

Google as Frienemy

> Google Print

> Google Radio

> Google TV > “It’s interesting. They can tell you how many people saw each and every ad you run; the accountability is my favorite part.– Geoff Robinson, SVP, Palisades MediaGroup

> “But it’s such a new way of doing business. We haven’t had any of our clients bite on it yet.”

We’re All Afraid. . .

Jim Stengel, P&G

“Most advertising agencies are “evolving too slowly.  They are holding on to the past and trying to rationalize it.  They need to get more integrated.  They need to collapse structures.  The need to go digital.  Those that are making those changes are sought after…they are turning away business.  Those that haven’t adjusted are struggling.”

“TV is the last place to go for integration.”--Michael Welch, Empower MediaMarketing

New Media Planning Principals

> “If you really look at media planning, the industry still keeps throwing wide nets, driven by the standard reach and frequency metrics. We need to take a larger view and strategically plan to cast a series of nets to connect with people in more places and in more relevant ways.”

• Leslie North, VP and media director, T3

> “It is in the ability to get the right messages in front of the right people at the right time—making marketing messaging as useful a form of ‘content’ as any that people seek, without interrupting or forcing them to do anything they don’t want to do.”

• Christopher Schroeder, CEO, The HealthCentral Network

Media Fundamentals—that still apply

> People still love their favorite programs> Adding a media adds reach> Big ideas start with strong strategies> Creative and media must work together> A great idea not executed properly won’t make a difference> Media must be managed and monitored> Cable isn’t going away!

Media Buzz Words

> Engagement> Integration> Communications Channel Planning> Media Neutral planning> Context Planning> “Strategy Departments”> ROI

On The Radar

> Digital Conversion– Recommending to avoid TV campaigns during this period– Watching where these homes go

> DVR Penetration hits 25%– Will radically alter media planning

87% of DVR owners skip at least

some television commercials, and

75% skip all or most of them

--Jack Myers Reports

Ideas In Practice

> Cincinnati Bell Technology Segment on WCPO

> Red Robin Food Network Campaign

> Back to School Backpack Drive

> Biltmore Video on Demand

> Stanley Steemer Search Campaign

Words of Advice from Empower Employees

> “Until TV is motivated by the same thing that we are—which is driving the client business—they will never be more important to us than they are today.”

• Mitch Dunn, VP

> “Get out of traditional buyer/seller mode and bring good ideas to advertisers. Work outside your comfort zone.”

• Jim Price, Sr VP

> “Work on engagement—how to keep and develop the relationship with the viewer on- and off-line.”

> “Do what you’re good at—local news and producing content. Local TV needs to return to its roots.”

> Loren Lambert, media supervisor

Final Thoughts

> It all comes down to two people:

> Least power and ability to make decisions> Least trained in new technology> Least motivated > Most frightened> Most likely to derail any ideas you develop

Buyer Seller

Final Thoughts

> Involve the seller’s from the start> Train them on the program> Develop a compensation package that works> Reward the risk takers> Development measurement tools that focus on client goals

not station gains> Find the others in the lifeboat

– Don’t rely on your best buyers to support your new programs

> Success begets success– Trials that yield good case histories carry weight

Contact Information:

Stephanie.Padgett@empowermm.com

513.257.1644

Thank You for Your Time