Squirrel! Advertising Agencies Chase Utopian Theories

There’s nobody easier to sell to than other salesmen. Unless, of course, you’re promising a consumer revolution to advertising agencies. Then, stand back and let the stampede commence!

I was reminded of this recently by the promotion for a communication conference. It opens as follows:

THE GREAT DISRUPTION – The consumer strikes back. 

For decades new technologies and media consolidation overwhelmed viewers and readers with new platform options, countless channels, confusing dials, settings and features no one asked to get. Now, the ’disrupted’ consumer is the one disrupting old media and ad institutions. The agency is scrambling to remain relevant in a world where consumers ignore ads and work their social networks to make decisions. They are fleeing the desktop for mobile media faster than content and marketers can keep up. Their love of time-shifting and multi-screen multi-tasking has attracted a mob of tech, media and digital companies all skirmishing for their attention as all platforms seem to converge in the living room. Technologies are no longer the great disruptors; the consumer is.

Recent email promoting the Online Media Marketing Association conference

Sound familiar? It should. It reflects group think found in many corners of the advertising biz and featured in a recent Fast Company article. Sadly, this group think is rampant among people who are paid enough that they should know better.

It seems to me, though, that ideas like this get their power in the advertising industry because agencies dislike the idea that they are selling things. All this “power to the consumer” and “consumer revolution” group think seems to be popular because it is anti-salesmanship.

It doesn’t matter that the ONLY reason that their jobs (advertising roles) exist is to help companies sell things to their consumers. It doesn’t matter whether we are in brand advertising, social media, online content creation, retail, display, outdoor or hard core direct response – everything we do is about selling goods to people.

Perhaps this reality is too hard to accept when you have an elite training at an art or portfolio school. Not liking the reality, it’s much nicer for a 20-something (or 40-something) to get excited about some nearly utopian mythology implying companies who become social butterflies will see their goods whisked off the shelf. (These theories usually help agencies make themselves rich while accomplishing little for their clients.)

My tendency is to respond with a tough message: Deal with it or get out. Truth is, you shouldn’t be in advertising unless you are dedicated to selling goods (today or in the future).

That doesn’t mean we’re sharks – it means we know our value to our clients. What advertising does is important and valuable – to people, to consumers, and to the economy. Our work creates jobs at companies (desperately needed jobs) in manufacturing, engineering, accounting, and more. Our work helps connect consumers with products they love. Well executed, our work builds a strong foundation for companies to thrive.

Of particular interest, the claims in the OMMA statement flat out aren’t true. So, for anyone who wants, I’ve posted a line-by-line deconstruction of the comments.

Why write all this? Advertising is important work to the country and our economy. It deserves better than this AdBuster-driven self-loathing.

Copyright 2011 – Doug Garnett

Do Superbowl Ratings Identify Flaws in Online TV Theory?

Overnight ratings for the Superbowl are in – and they’re outstanding. (Click Here.)

Of course, this suggests that when internet TV enthusiasts tell us about huge groups of people “cutting the cable” they’re really trying to cash in their venture investments. Because there are apparently enough cables still connected that the 2011 Superbowl had more viewers than any TV show in history (111 million of them) AND appears to have had a 71% share – watched by over 2/3rds of all televisions turned on at the time.

Let’s use this as a starting point to think a bit more about what Connected TV theorists are claiming right now – namely that we can throw out existing TV with its cable pipeline. (NOTE: A comment from Peter reminded me that this Superbowl was available without cable on Fox network affiliate broadcast feeds. Correction appreciated. And I don’t think this fundamentally changes much. Those feeds are a by product (today) of the strong cable distribution in the US. Change that cable distribution and the economic support for sports broadcasting changes.)

Mass Market or Fragmentation?

As I noted in a recent post, the internet is a tremendous tool to reach tiny shards of audiences. Because online, people scatter to the ends of the web.

But the Superbowl showcases TV’s ability to reach the masses quickly. In fact, TV drives mass communication – the web doesn’t. The web’s inherent strength is fragmented communication.

Note that for all the claims that Facebook and Twitter drove awareness of the recent Egyptian demonstrators, it took 24 hour coverage on the TV networks as well as newspaper front pages to generate broad awareness. (Note that TV coverage of Egyptian demonstrations has given CNN it’s highest ratings in years.)

If All TV Arrived Via Internet, Would There Be a Performance Issue?

These Superbowl numbers also make me wonder if scattering on the web isn’t critical to good web performance. We know the web breaks down under high use. For example, yesterday I attempted to look up some information from Fergie’s online bio’s during the halftime performance. What % of the TV audience was I competing with? .05%? But EVERY site had crawled to a stop.

Would there be a performance issue trying to broadcast the Superbowl ONLY over the web? I’m not a tech guru enough to know. But, here’s the problem: When 50 million US households want the same HDTV programming at the same time, the cable pipe seems to be a much more convenient distribution mechanism than the internet.

There are clever staging, cacheing, and other network load management things that can be done for a predictable event to attempt to maintain performance for something predictable like a Superbowl. Maybe they’re enough. But what about when an unexpected event like 9/11 happens (god forbid it happens again)? Would we be able to get good coverage? News sites already slow down when a gas main explodes in New York.

Sports Are Critical to Americans

Sports are a good place to consider this issue because technologies can be made to live by offering new sports options (DirecTV). Or they will die without it (we’ve forgotten the names of all those interactive TV efforts that were meaningless).

American’s won’t put up with a Superbowl where the action looks and feels like a satellite report from Afghanistan. Sure hope someone’s got this figured out before VC money pays to mount the effort to destroy cable TV.

Copyright 2011 – Doug Garnett

Does HD Help TV Advertising? Not really.

Wayne Friedman noted in a recent article in MediaPost that advertisers have been slow to embrace HD for their TV ads. And that got me thinking.

I love HD programming – gorgeous, beautiful, watchable. And, good for many sports because they tend to operate horizontally.

But there’s nothing about HD that makes messages more powerful for advertising. I’m sure that aficionado’s would argue with me – claim that pixel densities deliver more information, etc, etc.

What I’ve found first hand is that’s meaningless. There’s some value in layering more things on-screen — as a DRTV practitioner we can use more type more to emphasize points so details are clear. But our results weren’t suffering before and the measurable impact of these advantages is negligible – probably so small it’s not detectable.

So HD doesn’t help us make messages clearer. There is, of course, an “anti-positive”. If a high tech company (for example) chose NOT to create their ads in HD, it would speak negative volumes about them. But that’s not the same as being able to use HD to enhance messages.

The 16:9 Aspect Ratio Isn’t Great for All Products. We work with tools (hammers, wrenches, drills, …). Some are long horizontally. But many require vertical action and to be displayed vertically. When we’re dealing vertically, the 4:3 window was preferable. So the impact of HD is it forces us to dress and treat a huge chunk of screen that’s immaterial to the communication.

Probably 1/2 of products work best vertically and 1/2 work best horizontally. Almost 100% look best when you mix up a combination of framings. But, some products can do okay forced into a 16:9 window. Net out, 25% to 35% of all products are hurt by HD.

These considerations are important because HD has made advertising production much more difficult.

About 60% of the TV’s where any ad is seen are still SD. So, we have to produce for a dual format – it must look great in SD and in HD. (Easy to say, complexity to do.) Merely editing in HD slows things down. Systems had become pretty much “render wait” free. But, now HD adds back into edit days a series of 20 to 40 minute blocks of time waiting for HD renders.

Once the ad’s done, we have to deal with trafficking tapes. HD dubs and distribution are massively expensive compared with SD (about 4X to 6X the cost). And, there’s not an HD standard. Each station/network has different requirements & different equipment – especially in local markets where equipment chaos and standards are a massive headache.

So why HD? HD is absolutely gorgeous when it works – which pleases the aesthete in us all. All the best camera’s today are HD (so we never shoot anything else). Advertisers SHOULD be doing more HD. And, we don’t really have a choice – consumers are buying new TV’s, we need to make use of them.

But back to Wayne’s point, it’s understandable that advertisers are slow to adopt the format. Our reality is that HD adds chaos without adding a corresponding benefit.

Copyright 2011 – Doug Garnett

Is Coupon Clipping Social Media’s Primary Value to Advertisers?

Ad agencies seem unable to resist the idea that there’s a “killer media” out there to fulfill their every dream. And that creates a tremendously dysfunctional business – which dashes off for a night of new media partying only to end up hungover and broke when reality hits in the morning.

Right now, morning light has begun to appear for social media. Social attracted huge hype and some big corporate ad dollars with the crowd theory. This theory suggests that with so many consumers using social media it MUST be a worthwhile place to advertise.

That’s jumping a bit far, a bit fast and the crowd theory is rife with problems. Consider: If the crowd wants to talk with each other, why would they want to engage in any commercial conversation with you? Most consumer’s don’t want to be your friend.

Show Them the Money. Now we learn that consumers primarily engage with companies to get a good deal (research reported in this article from the Media Research Institute confirms other behavioral data). Note:

– Nearly 1/2 of women are primarily looking for deals through social media.
– Nearly 1/3 of men are primarily looking for deals through social media.

Uh, oh. Just as marketer’s were beginning to look forward to long soulful conversations with their consumers we find out they really only want deep discounts from us. Sigh.

The Web: Discounter’s Paradise. This isn’t bad or good. But coupon clipping with Facebook is far from the virulent & virally driven social media engagement conversations that the digerati tell us will drive the entire future of marketing (note that they can’t explain how these conversations are supposed to osmose into profit).

Social isn’t alone with coupon clipping. I just came from a Google presentation. Guess what common theme kept coming up? Using online coupons and discounts through Google, YouTube and its other properties.

All this suggests the web’s biggest advertising strength (I’m not talking about storefronts) may be the modern equivalent of Green Stamps. (History Check: In the 50’s, 60’s, & 70’s women like my mom collected Green Stamps that were awarded based on purchase behavior. Pasted into coupon books, the stamps could be redeemed for “free gifts”. There’s nothing really new under the sun – just digital ways to do it.)

New Media Hype Has Little Connection with Reality. I’ve written elsewhere about how the DVR, instead of killing TV advertising, now appears to have made it more effective. But the gap between ad biz/digerati hype and reality is a common theme in new media.

In the early 2000’s, article after article extolled the virtues of video advertising at the gas pump. We were told that Coke, Pepsi and a wealth of other traditional advertisers would thrive by capturing that lonely moment while the consumer pumps gas.

Fast forward to 2008. I live in Oregon where, by law, we can’t pump our own gas. So I experienced this advertising first-hand on a trip to LA. What did I find? Not a big brand in sight. Instead, the pump featured a brassy, loud, and continuous run of cheesy ads dominated by Phoenix University and low-ball direct response advertisers.

It Gets Worse for Social. All this helps place in context an article this morning about the current #3 Facebook advertiser. This article claims that the third largest Facebook advertiser is a scam designed to change your default search engine to Bing so that this third party gets a payment every time you search. You can read details at the above link.

Is this Facebook’s equivalent of the noisy and invasive advertising that now dominates banners online or my Los Angeles gas pump?

Let’s All Embrace the Light of Day. New media can bring important value. But it’s not found in these wild, unthinking dashes. Cooler heads must prevail and search for both the strengths and the weaknesses of each new media. Only when this happens will we finally learn how to leverage a balance of traditional and new media advertising to increase market power for our clients.

Copyright 2011 – Doug Garnett

DVR’s Do Not Hurt Ad Effectiveness – And May Help It

Media Post reports yet one more study (link here) that shows that time shifting doesn’t hurt TV ad effectiveness. So after a decade of the ad business seeming to “wish” for the end of TV advertising, it clearly hasn’t happened. Even more interesting, the Advertising Research Foundation discovered a year ago that ad effectiveness may even have increased after the introduction of the DVR.

My own experience at home confirms this. When there’s an ad that matters to someone in my family, we can now rewind to make sure we know what it says (movie release date, specifics about a product, details about the upcoming news, etc…).

And it’s beneficial to advertisers to know that they can reach, for example, Daily Show demographic that can’t watch at the typical broadcast time. That just adds to the target audience.

And so, TV remains, for the forseeable future, the fastest and strongest way to introduce new products to a large market.

For more on this topic, read this article (link here) I wrote for Response magazine summarizing the ARF research’s TV findings.

Copyright 2010 – Doug Garnett

People Ignore New Media – Much More Than They Ignore Traditional Media

Media Daily News recently published an article by Wayne Friedman covering key statistics about viewing of advertisements.

It shows a striking truth: 63% of people say they ignore all internet ads while only 14% say they ignore all TV ads. And even more interesting: young consumers (18 to 34) ignore banner ads much more than they ignore TV ads.

The statistics in the article are from a specific study (I’ll let Wayne’s article give you the details). These numbers are confirmed by those reported through observational research: Web ads are ignored at very high rates.

Truth is, it makes sense. Think about it – do you pay ANY attention to ads on the web, mobile, Twitter, or Facebook? (The only reason I do is as an advertising guy to see who’s losing their money by paying for that space.)

New media advocates are shameless in the things they claim for the web – even going so far as suggesting all anyone needs is the web. And they yell so often and so loudly that they often drown out sanity and reason at even the most sober of companies.

And if anyone suggests they’re wrong, they always fall back on the idea of change – that the young & hip ignore everything but the web so if you want a future you’d better do everything they say. But the statistics don’t support them. And practice doesn’t either.

Truth is that for all the unusual capabilities of new media, it isn’t strong enough to build and maintain mass markets. Two reasons…

1. New media are all specialized meaning they work best reaching smaller and smaller fragments of markets.
2. New media are very poor for reaching out to people who don’t know why they’d care about your message. Once they know about what you have to say, you might begin to have some web success even though they remain highly fragmented.

In other words, if you have a new product, it’s generally dead via web unless you can use the web to get…um…well…traditional media like the TV news guys to report on it.

If you want more proof, read my post about how online companies are increasingly turning to offline advertising – because they can’t get enough success otherwise.

Then look at your own balance between online and offline advertising. It’s likely that a return to using offline advertising in a smart way will improve your company’s economics.

Copyright 2010 – Doug Garnett

“Free Internet TV” Will Hurt Consumers

Claims of “FREE!” drive purchases of cheesy TV products from Shamwow’s to those (supposedly) Amish heaters. But somehow, it escapes notice of the tech press that equally cheesy claims of “free” run deep amid marketing of the internet.

Free music, free newspaper articles, free magazines, and now supposedly free television. Everybody offers free. And it’s no surprise that consumers go for it.

In fact, this idea of making millions by giving things away was found in many of the irrational “business plans” that dotcom’s claimed would make their investors rich. It didn’t work then, but maybe things have changed.

How is “free” going for Wikipedia”? Wikipedia is the poster child for internet “free”. Except they are deep in the midst of a campaign attempting to raise $16M in donations just to keep their doors open. It’s a campaign that pitches quite hard. Makes me think that even for a donated content online Encyclopedia, “free” isn’t quite as powerful a business plan as we thought.

How is “free” working out for newspaper and magazine content? Bob Garfield wrote an AdAge blog entry recently about the incredible dark side of “free” print on the web.

He notes that print on the web is driven by sites that “aggregate” (bring together) content. Where do aggregators get good content? From newspapers or magazines. Except aggregator sites deliver content to you for free.

In a fit of business insanity, internet copyright anarchists imply that revenue from the hated banner ads on the site of the aggregator somehow trickles back to pay for the hard work it took to create that content. (Hard work is required to make well written, well researched, well fact checked, and well published content.)

Well, the revenue doesn’t trickle back. Garfield notes how “free” access has undercut the economic model that created good content in the US. But he also notes that even those aggregator sites are struggling to keep in business. Guess this model is so flawed that you can’t make money even when giving away content you didn’t make.

How would “free” go for TV content? Don’t expect too much. And note that it’s a double “free” idea that is being used to entice consumers to internet TV – payment free and advertising free. (Secondarily, there’s the idea that they can watch anything they want, anywhere they want, and on any device they want. But while consumers will pay for DVR’s, there’s no evidence of willingness to pay for it online.)

Double “free” is publicized with massive money from manufacturers of internet TV sets, creators of internet TV sites, the venture capitalists behind them, and the tech research agencies paid by the venture capitalists – all drooling at the idea of tapping TV’s big old vein of pure financial gold.

And, frustration with out-of-control cable TV costs means there’s very high consumer interest in cost savings. But do consumers really want what double free TV would mean? I don’t think so.

Double “free” TV over internet will kill content. The existing economic model supports an incredibly well developed, sophisticated, sometimes dysfunctional, but essentially effective eco-system – an eco-system that creates good TV, offers the single advertising medium which delivers the best economic impact and delivers most of what consumers want.

The net results for consumers would be the death of programming. Google claims they’ll stitch together YouTube content to make programming (of course, selling their own advertising time within that content). Don’t expect much. The existing ecosystem turns out everything from niche to mass hits – 30-Rock, The Daily Show, Survivor, Amazing Race, NFL Football, Antiques Roadshow, and CSI Miami on a big screen (I just can’t include “Darth Vader, Night Clerk” in that list). But it costs millions to deliver those shows – often over $1M per episode.

There’s some good news for TV. As Mark Cuban has pointed out, TV is different from print and music. Networks ARE aggregators. That means TV networks have been fighting this type of battle all along. They also seem to have learned from print and are being quite stubborn about protecting their right to get money in return for all the money they invest. Consider

– Hulu (funded by networks) started “free”, but is beginning to use subscriptions.
– The networks fight regularly with cable operators to maintain a viable economic model – even if that means people don’t get to see the World Series. We have to assume they’ll use all means to fight against a double free idea that hurts their business.
– An example of this seems to be that while networks work with Apple, they don’t work with GoogleTV. Maybe they know Apple wants to create viable media business models. But it seems the only reason to create GoogleTV is to try to steal advertising revenue that currently goes to the networks – revenue that pays to for programming.
– Now Hulu (funded by networks) has made it so that you can’t watch their programs on GoogleTV’s.
– Network testing seems to indicate that consumers are willing to watch online TV with traditional advertising breaks. In other words, the double free idea doesn’t even seem necessary for internet TV to work.

Internet TV should have a tremendous future and it will be stronger if the industry stops the promise of double “free”. Internet TV’s future comes with the truly exciting opportunity: integrating programming with interactive features that make the programming more valuable.

But sadly, companies aren’t talking about delivering more value. They’re getting wrapped up in dead ends – like removing advertising when there doesn’t appear to be monetized market power created by doing so.

So next time you hear someone talk about how great it is to get free programming on the internet, know that they’re really talking about a future of really bad programming. You may not like programming today (it’s fun to complain). But just imagine what it would be like in that free future.

Copyright 2010 – Doug Garnett

Wishing it was true? Internet TV advocates trumpet flawed research.

There’s a survey circulating right now by a group named “Say Media”. I won’t link to it because it’s irresponsible to circulate mis-leading research.

Scoop is that Internet TV advocates are shouting that the survey shows that around 1/3 of the adult population in the US has turned off cable in order to get their TV online. (To be fair, the Say Media report doesn’t say this.)

Are some advocates so desperate that they’ll believe anything? This research is seriously flawed. To begin, it relies on…wait for it…online surveys. Yikes. Doesn’t anyone pay attention to methodology anymore?

So, an online survey finds a larger portion of 1100 people are more active…um…online by using more online TV. THEN, those results are projected to the entire US population (and we’re given the usual drivel about +/- to make it sound like solid research).

To understand how flawed this is, let’s look at a similar hypothetical. If you stand outside the stadium at a Lacrosse game and interview sports preferences among those leaving the stadium, you will find that most of your interviews prefer Lacrosse to American Football (especially if your wording encourages that answer which is common in this flavor of research).

And if you can find enough people to interview, then you can get some statistician to give you +/- error percentages so that you can claim that you found that the majority of Americans prefer Lacrosse to Football.

And, you would be entirely, wholly wrong. But that’s essentially what it looks like they did in this survey.

In addition, the “researchers” observed their online habits. (Huh – take people who claim that they went off TV but you only watched them online?)

And, they did eight (8) in-depth interviews too. Eight? They probably found those eight among their friends.

What else might be wrong here? For decades people have lied about their TV habits – minimizing the amount of time they watched. Because it’s an issue where social pressure suggests they’re “bad” if they watch too much TV. In order to accurately guage TV habits, research has to be extraordinarily sophisticated. The best work invades people’s homes.

Just for fun, let’s try to figure out what they really found out with the research.

– First, they only interviewed people online. It looks like only 70% of US adults are online.
– Second, of that 70%, only about half will participate in online surveys. And, that half is likely to be the most online savvy.

In other words, their survey applies to the most online savvy 35% of US adults. Of that 35%, 13% were disconnected and 20% were connected, but reducing their viewing. Except, it’s reasonable to guess that half exaggerated their disconnectedness.

SO, they found a small group (6%) of adults that are disconnected. Yawn. Oops. I mean “write a big press release. Because we just found out that what we’ve known about TV for 50 years is still true. Not everybody watches.”

Until we can learn more, put a massive RED WARNING FLAG on this research. Significantly more reliable research has shown that there is no degradation in TV viewing habits – only an increase in viewing now that people can view it on their mobile devices.

So we have to wonder about the motivations of the groups that cobbled together this marketing masquerading as research. Is it possible that it’s VC funded to make certain that investments in GoogleTV pay out? Possible. But we don’t know.

Copyright 2010 – Doug Garnett

Should Apple Share its Software?

It’s interesting to see discussion that criticizes Apple for not releasing their software. Now I’m in no way a ShareWare/FreeWare expert. But some of the fallacies surrounding FreeWare seem pretty obvious.

One: There’s an implication that “Microsoft succeeded because it shared its code.” Really? It did? I don’t think so. If I remember right, Microsoft is paid for every unit that is sold with it’s proprietary operating system. What makes. Microsoft different from Apple is that it is primarily a software company where Apple is a systems company. So you would expect Microsoft to seek to put its software everywhere.

Two: “Offering your software to other people is the road to business success – profitability.” Let’s ask Sun Microsystems about how much profit they got from Java. Although Java penetrated the market thoroughly, it didn’t generate a big enough bottom line advantage for Sun to save the company.

Three: “What about Unix?” I love Unix and used to use it quite a lot. But you can’t compare Apple’s IOS with Unix. No one needed to profit from Unix because it came out of a government and university funded effort. Why don’t we check with Apple’s CFO to see if they’ve become government funded?

Four: “What about Android?” Now we arrive at the newest test of the theory that a public company’s best interest is maintained by publishing FreeWare (or ShareWare). Truth is, we can’t say how it’s going to turn out – Android is too new. But don’t confuse a plethora of Android handsets with success. Google’s ultimate win must include generating higher ad revenue because it published Android.

Scientists help each other to tremendous new discoveries by sharing what they know and learn. That’s important. (And, scientists also fight like tigers to protect things they believe will help them get ahead.)

So, maybe tech’s fascination with sharing got its start with scientific collegiality. More often I think it’s based on some ill considered utopian ideals.

Personally, I hope Apple doesn’t share. Love them or hate them, when you buy something with Apple software, you know exactly how it will work: the way Apple intended. And that’s what builds a strong brand and strong profits.

Copyright 2010 – Doug Garnett

Google Says its Internal Development is Struggling

I’ve been interested by the industry hoopla surrounding Google’s vaunted approach to development. Maybe “interest” is the wrong word. Because whenever the innovator books worship a company’s policies, I get suspicious.

The Wizard's at Google search for revenue by buying companies.

It appears these suspicions may be well founded. Bloomberg reports that Google is acquiring companies to drive growth because internal developments aren’t delivering. Interesting. In fact, 2nd quarter results for Google show a 22% increase in internal development spending – probably hoping more money will solve the problem. Something ain’t quite right in Silicon Valley Heaven.

I’ve suspected development problems at Google for years. A lot of outsiders worship Google’s current development ethos. But that process isn’t the one that led to their highly successful initial development. And their current process works on some flavor of the theory that anarchy creates profit. (Reviewing several millennia of history doesn’t uncover historical precedent for this idea.)

To cap off this mix, Google never communicates the few developments that somehow rise through the anarchy to deliver significant potential value (as I noted in this article).

So, let’s please stop suggesting that Google’s discovered some unusual development magic – it’s clear they haven’t.

Only the internal team at Google can estimate the effectiveness of this new increase in spending. But, it appears it will only payout if their executive team can rein in a corporate culture that appears ready to party straight into the ditch.

Copyright 2010 – Doug Garnett