Broadcasting’s disruption on display in Raleigh

NBCWRALThe affiliate switch in the Raleigh market is BIG news and yet another harbinger of things to come for broadcasting. It doesn’t matter who initiated what in this remarkable event. WRAL-TV claims they did, because NBC is the best positioned broadcast network for the future. However, many observers, such as Al Tompkins at Poynter, are blaming the tough fiscal stance CBS is taking in affiliate renewal negotiations.

The switch was prompted by a disagreement between WRAL and CBS about how much revenue paid to WRAL from from cable companies should go to the network.

It would be easy to dismiss this as just another financial consideration on the bumpy road broadcasters are trudging, but that doesn’t go deep enough. The truth is that the broadcasting business model itself is hopelessly borked, and these kinds of events are simply guideposts along the way to its inevitable collapse. Nobody wants to talk about it, least of all owners, because there’s real money in maintenance of the status quo or at least the appearance thereof.

Local television is falling off the same cliff that destroyed newspapers, but it hasn’t shown up on the bottom line yet, because ever-increasing retransmission consent fees have shielded it from reality. There is no way it can continue for long. Consumers will simply refuse to pay for it when there are cheaper alternatives available. Mass marketing continues to take blow after blow from more cost-effective digital marketing, which is actually direct marketing disguised as mass marketing. Again, nobody wants to admit this, so we all just move forward basing our value on false assumptions of an archaic model. It helps no one except the executives charged with maintaining the hunky dory appearance.

How is anyone surprised that CBS wants top compensation for its top-rated programs? One day, CBS will be a kind of cable network, because it can gain the kinds of program compensation it deserves instead of splitting that money with local affiliates. TV program distribution doesn’t require broadcast affiliates anymore. Netflix and Amazon both won Golden Globes this year. This is all being forced by consumers who are now free to protest the gluttony of 5-minute commercial breaks in “their” programs. Are we really so foolish as to think the era of audience captivity is still moving forward? So much has been written about how the people formerly known as the advertisers are now functioning as media companies themselves that it’s hard for me to believe there’s a single person left who believes the ad-supported content model remains viable as a growth strategy.

The ONLY thing local broadcasters have left is news, and it’s never been more important to be number one. These locally-produced programs historically have generated half of the typical station’s revenue. But half the revenue will never equate to 100% of the expenses, so even the viability of quality local TV news is problematic. There will be cutbacks galore, and some stations just won’t make it. 15 years ago, I suggested stations might want to spin off their news departments into wholly-owned subsidiaries and let them find their own economic justifications. At the time, this would’ve also given local news efforts an opportunity to actually compete with web companies instead of relying on the brands of the TV stations for complete sustenance. Competing as a TV station online has never made sense, and yet that’s as far as most have gotten or will ever get.

In conclusion, the event Friday in Raleigh is stunning no matter how you look at it. To me, however, it’s just further evidence of a predictable future that doesn’t look so bright for my many friends and colleagues still toiling in the trenches.

And to paraphrase George Carlin, “These are the kinds of thoughts that kept me out of the corporate board rooms.”

The media disruption that matters

Please indulge me a wee gloat. I’ve been telling you for years that the real people to watch in the disruption of media are the advertisers, or as Jay Rosen would put it, “The people formerly known as the advertisers.” The business of media, after all, isn’t content; it’s advertising, and this is what will eventually destroy media companies insisting that mass marketing has a viable future.

AdAge published an article featuring a speech yesterday by Pepsico’s President of global beverage group Brad Jakeman to the Association of National Advertising’s annual “Masters of Marketing” conference in Orlando, Fla. I wish I could’ve been present, for AdAge described the presentation as “fiery” and “truth telling.” Here’s a pissed-off guy who spends a fortune to sell his products, and we need to pay attention. Here are a view excerpts from the article:

Ad agency models are breaking. Pre-roll ads are useless. Measurement models are outdated. The ad industry lacks diversity. And the phrase digital marketing should be dumped…

“Can we stop using the term advertising, which is based on this model of polluting [content],” he said.

“My particular peeve is pre-roll. I hate it,” he added. “What is even worse is that I know the people who are making it know that I’m going to hate it. Why do I know that? Because they tell me how long I am going to have to endure it — 30 seconds, 20 seconds, 15 seconds. You only have to watch this crap for another 10 seconds and then you are going to get to the content that you really wanted to see. That is a model of polluting content that is not sustainable…”

“The agency model that I grew up with largely has not changed today,” he said, noting that he has been in the ad industry for 25 years. “Yet agency CEOs are sitting there watching retainers disappear … they are looking at clients being way more promiscuous with their agencies than they ever have…”

He said he has been to many marketing conferences and has seen some really creative things, which he said was “awesome.” But he “hasn’t seen our industry really push for incredibly disruptive things,” he added. “We are still talking about the 30-second TV spot. Seriously?”

If you’re truly interested in this stuff (or if your future depends on it), I strongly recommend studying every word he says, for the utter collapse of Madison Avenue is at hand. Companies like Pepsico are now media companies, thanks to technology, and their money is increasingly being spent in house, as Borrell has been tracking for years.

As the old country song says, “You never heard my words before, but can you hear me now?”

One size fits all (or not)

With the dawn of the network age, institutions that used to flourish in the analog communications era (every year since before the network) continue to respond as if nothing has changed. Nowhere is this truer than with broadcasting, where its audience has become atomized in and by the network. But it’s more than that. People now have weapons to actually assist their escape from actual audience seats, which makes ignoring reality even more dangerous. And rather than invest in the very real opportunities of the network – especially at the local level – broadcasting continually works to redefine the disruption as just another obstacle to overcome in routinely trudging the road to its money tree.

Adweek was given a preview this week of Nielsen’s new multiplatform measuring tool, total audience measurement. This is Nielsen’s attempt to take that atomization and shove it back in the bottle from which it came. Here are key takeaways from the Adweek article:

…total audience measurement is real and, given the industry’s growing cries this fall (in the face of more live TV viewership declines) for a tool that will finally allow them to fully measure and monetize viewers, it’s spectacular…

The result is total audience measurement, Nielsen’s single-sourced platform to account for all viewing across linear TV, DVR, VOD, connected TV devices (Roku, Apple TV and Xbox), mobile, PC and tablets…

(Nielsen evp Megan Clarken) “What we’re acutely aware of is our measurement underpins $70 billion worth of advertising,” she added.

Make no mistake, this is entirely about advertising and the potential collapse of the top-down, stage-to-audience hegemony that runs everything. Why else use the word “audience?” With that word, Nielsen is saying, “Hey, everybody, nothing has changed. You needed us to figure out how to crunch these numbers to tell the story of how relevant you’ve stayed through this whole disruption mess. Thank God, right?” With $70 billion at stake, the back pats are deserved.

Or not.

“Audience” is defined as “the assembled spectators or listeners at a public event, such as a play, movie, concert, or meeting.” Mass media requires a mass (an audience) in order to get paid by advertisers who want to reach those audience members in order to advance commerce. Audiences are captive. They sit in seats and pay attention.

Or not.

Everyday people – those who Jay Rosen brilliantly tagged 10 years ago as “The people formerly known as the audience” – are using technology in their war against manipulation by forces that could do whatever they wished in the mass marketing era. Television advertising still works and probably always will, but it’s nowhere near what it used to be. According to the Adweek article, “live” television viewing makes up only 45% of a program’s total “audience.” Those technologies that Nielsen is putting together include those that run without commercials or can be skipped. Moreover, even if people don’t change the channel during commercial breaks, they are on to secondary screens, and their attention is diverted. Not all views are equal in the eyes of increasingly educated advertisers.

$70 billion is a lot to lose, and to a certain extent, defensive strategies like this are to be expected. What’s hard to fathom, however, is that in a competitive environment like the network, it’s fiscal suicide to only play defense. Meanwhile, money continues to flow to those in Silicon Valley (and beyond) that are doing the innovating in playing by the network’s rules.

They should. After all, they invented it.

The Handwriting on the Wall is Now Shouting

A few headlines and items in the news point to the continuing decline of legacy media, now especially television, and yet nobody is reading the tea leaves properly in terms of what to do. This will only hasten the inevitable end.

First up, Ad Age asks Where Did Everybody Go? TV Premiere Week Ratings Sag As Young Viewers Vamoose. This doesn’t really require comment except to say I told you so. Yeah, I’m going to be pissy here.

Next, the New York Times reports Fall TV Season Opens Onto a Shifting Ad Landscape.

The current television landscape is a challenging one for advertisers. Ratings are down but the amount of programming is sharply up, along with the number of streaming options available, many of which allow viewers to skip commercials altogether.

Now, as advertisers consider the best ways to spend their money, the excitement that once greeted the beginning of the fall television season has given way to anxiety. Industry analysts and advertising executives said the upfront market — the annual ad sales period that begins in May with lavish presentations by the networks — was unambiguously weak this year.

Then a remarkable (for its lack of focus and leadership) Wall St. Journal interview with the head of the IAB, Randall Rothenberg, on ad blocking, viewability, and click fraud, none of which he deems a really serious problem for digital advertising.

And, finally, the first of a two-part series by industry watchdog promotional group, TVNewsCheck on digital, Digital Turning ‘Broadcast’ Sales Upside Down.

The digital advertising revolution sweeping through the media world has reached local TV, upending the lives of broadcast salespeople, requiring them to do more and learn more, while sometimes earning less.

In markets of every size, stations and station groups are creating and offering a host of new digital products to prospective and long-time clients to keep pace with the invasion of digital and other media on their turf.

The broadcasters are re-emphasizing training, creating new digital-only positions, hiring digital specialists and even establishing whole new units to sell digital products and consulting services that often have little or nothing to do with selling traditional TV time.

Sorry, one more: TVNewsCheck also reports: FCC’s Lake: Time For Exclusivity Rules To Go.

The comments on some of these articles suggest that at least some people within the industry understand what’s going on. The problem is the industry itself can’t and won’t talk about the elephant in the room – culture is advancing horizontally every day in what is now clearly a revolution against the established way of doing things. Unless we accept this, we will continue to flop around like fish on the dock gasping for oxygen when none is there. Death will come sooner than most think, and I will not be happy when it occurs, because it all could have been prevented.

Marketing in the traditional sense is done. Put a fork in it. It truly is the fish out of water, for the rules of marketing all apply to a mass, and that is quickly going the way of downtown shopping. And here’s the important thing: the people formerly known as the audience are REJOICING! This is what media and advertising people simply won’t accept, because it means the end of their money trees. Instead, they’re pleading with Washington for relief. Mr. Rothenberg’s comments to the Wall St. Journal are oozing with denial, including his assurance that the “sky hasn’t fallen.”

There is a real issue. I’m not worried because the marketing and media value chain has shown remarkable resilience. There is a natural human need to have businesses proposition you with goods and services and vice versa. You need to have that communication. I’m really not worried about whether advertising will be able to find its way through digital channels. I am concerned — very, very concerned — that costs of ads will go up and up and up from this unethical obstruction.

“There is a natural human need to have businesses proposition you with goods and services?” This is delusional, and that’s being kind. As Dave Winer wrote last week, “Advertising is unwanted.” It’s especially unwanted when it’s friggin’ everywhere as if it has some special right to be! One-third of prime time is commercials! One. Third. Why do these people think that viewers are ignoring or skipping them? Why do these people think the same users are blocking them online? Mr. Rothenberg (and others) would be well advised to read what Dave his written here and what The Cluetrain Manifesto published 15 years ago.

Times are changing, folks, but that’s a dead horse I’ve been beating for far too long.

Headlines like the above are like fingernails on a chalkboard to me. The industry rejected me and my message, and you’d think I’d find a little joy in watching my prophecies come true. I don’t.

I’m very angry, and I’m very sad.

Online video discontent – a rant

Eleven years after Microsoft established the standard for pre-roll video advertising at 7-12 seconds, the online video “industry” is still stuck on the idea that broadcast standards should prevail. This is a sickness, my friends, and it’s killing opportunities for legacy media companies who cannot or will not accept that the Web is a different animal entirely. I am so angry about this that I could spit, so I apologize ahead of time for the rant.

My dander is up over a piece on Digiday (great website, BTW) offering quotes from its publishing conference in Miami this week. The issue is pre-roll advertising, and the article is The biggest hurdles publishers face in monetizing digital video:

What’s your biggest challenge in monetizing video? In short, too many agencies are still trying to recycle their 30-second TV ads for the desktop and mobile. There are viewability requirements to be satisfied. What works for the advertiser often results in a bad user experience.

Why, oh why is this still an issue for us?

Let’s review. Legacy media did NOT invent the Web. Microsoft, a tech company, was ahead of the game back in 2004 when MSN created its “Video 2” ad product and ventured forward in the field of online video. They may not have invented the pre-roll, but they studied it, pioneered it, and found in 2004 that 7-12 seconds was optimal length. Here’s the money quote from an article published in MediaDailyNews back then:

Hadley (Eric Hadley, director of marketing and advertising for MSN) said that ads on MSN Video 2 will appear “somewhat like TV ads,” except that only one 7–12-second video ad will appear for each piece of content. Hadley added that while consumers don’t necessarily need a broadband connection to view MSN video, the video capabilities are limited for narrowband users.

The day after I published my story on this, MediaDailyNews – at Microsoft’s request – altered the text of the article and changed that 7-12 seconds to 15-30 seconds. Why? Because that’s what Madison Avenue would go along with, and they controlled the money that would be spent via MSN Video 2. They wanted nothing to do with 7-12 seconds. I know this, because I investigated and spoke with Mr. Hadley and others, including those at MediaPost.

The point is that Madison Avenue is still calling the shots, while online legacy video companies are sinking fast, because people – as Microsoft knew 11 years ago – won’t sit still for anything beyond 7-12 seconds. Rather than accept reality, we chose to stick our fingers in the eyes of consumers, and now we’re upset because they’ve respond with ad blockers.

Here’s the thing. Corporations don’t have to change. They can do what they damned well please, including acting like fools in the face of compelling evidence of such behavior’s danger. If they do, however, they give up the right to whine – especially to the government – about matters that originate from this unwillingness to change, and that includes anything associated with the money tree they’re trying to protect.

I’ve begged people to open their eyes about this since even before 2004, but the industry would rather die than change, and that’s the truth!

End of rant.

@ESPN doesn’t care, so why should I?

Screen Shot 2015-09-16 at 2.32.41 PMMany times I have informed ESPN.com of a Facebook fraud. I’ve done this over the past three months, and yet the practice continues, so I’m giving up. But not without first informing all of you. Ads like the one on the right appear every day on Facebook. All reference ESPN, and all point to bogus ESPN pages, like the one below.

The text is all about a product, PowerTestro, the apparent sponsor of the ads. The copy of the ad to the right contains the link, if you want to see for yourselves. It’s some muscle performance enhancer that, for whatever reason, gets away with false advertising, copyright violations, and whatever they wish in the name of selling their product.

ESPN and Facebook “seem” to welcome feedback, but they really don’t. At least not from peons like me.

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