The National Association of Broadcasters annual conference opens today in Las Vegas, where the state of broadcasting will be hailed as “just fine,” thank you very much. Attendees won’t find speakers talking about the decline of one-to-many communications, the way technology is eating its lunch, or the way consumers are increasingly fleeing the bombardment of ads in their lives. They’ll be far too busy praising technological innovations that help their business models, when the fact is that those innovations are actually eating away at the industry’s foundation.
It’s fitting that the hit AMC series Mad Men is coming to an end in 2015, for this is a year when the age of mass marketing — the Madison Avenue lifeblood of the show — continues its punishing decline. The beauty of Edward Bernays’ early 20th Century manipulative mischief requires a mass into which can be dropped unwanted, clever, and deceptive messages, so this shift in the concept of marketing is culturally significant. From his book Propaganda, a copy of which was found in the library of Joseph Goebbels, Reich Minister of Propaganda in Nazi Germany, along with another of Bernays’ books, Crystalizing Public Opinion, comes this:
“Those who manipulate the organized habits and opinions of the masses constitute an invisible government which is the true ruling power of our country.”
Thank you, Mr. Bernays, for at least being honest. In the early half of the Twentieth Century, the influence of Edward Bernays, a nephew of Sigmund Freud, was staggering, but he wasn’t the only one who found the ability to manipulate.
Sixties rock superstar Jimi Hendrix said in Life Magazine’s October 3, 1969 edition: “I can explain everything better through music. You hypnotize people to where they go right back to their natural state which is pure positive—like in childhood when you got natural highs. And when you get people at their weakest point, you can preach into the subconscious what we want to say.”
Robert Pittman, the founder of MTV, also understood the ability of lyrics and music to influence culture. A list he created of what teenagers want was fed back to kids through MTV:
- A Frenetic Pace
- Lots of Disjointed Thoughts
- In-depth Info About Music
An important point to remember in all of this is that Bernays didn’t really hit his stride until the 1920s. That’s less than a hundred years ago, and yet we tend to think of this manipulation as the way it’s always been (think: snake oil salesmen). That makes it harder to grasp the idea that it’s on the wane, but people are growing in their understanding of the sophistication of all of this, and they can see through much of it like a window. This is significant, for the very nature of mass marketing is manipulation, and who wants to be manipulated?
So if advertising as we know it is drifting to a place of diminishing effectiveness, what does everyone do, from publishers to businesses that wish to sell? It begins with a subtle shift in our thinking when it comes to the role of advertising in our culture. What advertising actually accomplishes is the enabling of commerce, and that is a necessary function that doesn’t change, no matter how the methods may.
We’re not in the content business, for we don’t “sell” content. What we do sell is our reach in helping business and industry sell their wares, so we’re actually in the business of informing consumers about ways they can spend their money. This is a noble and high calling, and it is much broader than selling space next to or interrupting content in order that those with money can manipulate their markets. This was profitable for a season, but consumers now have useful ways to escape all that. Yet instead of exploring innovative solutions to the problem of businesses selling their products and services, traditional media giants would rather continue to defend the mass.
MediaLife recently published an overview of the new CBS metric “Campaign Performance Audit,” or CPA. It merges data from a number of different third parties into a single set of information that CBS provides to clients. Here is a remarkable statement from David Poltrak, head of CBS research.
If television advertising works and you use TV dollars to fund digital, then whatever value you’re getting out of digital you have to also subtract the value you lost when you cut your TV budget. Whereas if you fund digital from incremental investment funds or less productive parts of the marketing budget, TV would stay intact. Because there does seem to be a synergy and interaction effect between TV and digital–it would even be enhanced.
The lengths to which people will bend and twist reality to defend their turf is truly mind boggling. CBS wants nothing to do with reshaping its revenue model. Instead, they turn to a new metric to help them sell their perceived products. This only adds to the belief that the definition of selling is “manipulating people into buying.” It’s a desperate attempt at continued relevancy, because the people formerly known as the advertisers, just like consumers, are becoming increasingly aware of being manipulated as well.
Both SC Johnson Global (SC Johnson Reviews Its Global Media Buying but Will It Consolidate? Change on the horizon for roster shops) and L’Oreal USA (L’Oreal USA Puts Its $1 Billion Media Assignment Into Review) have put their $1 billion media budgets up for review. I think we’re going to see much more of this ahead. It may seem like a simple efficiency play, but what happened in Texas during last year’s governor’s race reveals the ad world is changing rapidly.
In a TVNewsCheck report on the election, Republican strategist Dave Carney, who recruited and managed winner Greg Abbot’s “big data” team, sounded a warning to broadcasters everywhere that things are different now. Carney told TVNewsCheck that 18% of the $30 million they spent overall went to digital, because “its effectiveness was proven.”
“We were getting gigantic efficiencies on TV,” Carney said. “We were able to buy 700 [Nielsen] points and get the equivalent of 1,500 to the target audience.
“We moved millions between cable and broadcast over the course of the campaign and had more available for online…”
“If you’re not a registered voter, I don’t care that you watch Monday Night Football. If you’re a voter, are persuadable and might vote for us, I want to talk to you every time you turn on any device — TV, radio, iPad.”
The article also quoted Brent Seaborne, a partner in Deep Roots Analytics, the agency Abbott’s campaign used. All of broadcasting needs to understand thoroughly what he says here about the future.
“TV will be the dominant media for a long time yet,” Seaborne said, “But it will take up a shrunken share of campaign budgets, [dropping] from 60%-80% to 40%-50%. The trick is making that smaller share perform as well as what you spent a few years back.”
This is what targeting is able to accomplish, whether the primary data comes from Rentrak or a pureplay digital player. It is THE revolution underway in advertising that threatens everybody’s status quo.
None of this is hidden from the eyes of executives in the board rooms of media or advertising, unless they’re simply not looking. Take a peek at the headlines over the last couple of weeks, a small sample of which are shown here:
- Mediapost: Major Media Cos. Forecast Lower Ad Revs
Big TV/film-media companies will continue to lower their revenue exposure to advertising in the coming years.
Affiliate fees are on the increase, however, so the slip in ad revenue isn’t even noticeable to the bottom line. This is more a reflection of what’s taking place in advertising than with media companies, but it doesn’t bode well for a healthy tomorrow for anybody caught in the chaotic vortex of change.
- Here’s a recent Adweek article Study: Young People Watch More Than 22 Hours of Online Video a Week 6 out of 10 prefer digital content to TV. There’s no need to say anything beyond the headline.
- Another MediaLife article: Latest forecast for the upfront: Not good. Analysts predict another decline in volume for broadcast TV.
- And another: Slow start to 2015 for big advertisers. Automotive ad spending tumbles 21 percent in February.
- Here’s another one from Mediapost: Ad Market Saturates, Costs Begin Deflating: Even Prime-Time Not Immune
- Digiday offers another consideration: Ad blocking is every publisher’s problem now. According to Digiday:
The global ad-blocking user base has ballooned to 144 million monthly active users, according to a recent report from Adobe and PageFair, which measures ad-blocking rates. That number more than doubled in 2013 alone. Along with that expansion in the user base, the types of sites hit hard are also metastasizing. While ad-blocking rates are highest among video game (30-50 percent) and technology (25 percent) sites, the rates among publishers in business news (15-20 percent), entertainment (15 percent) and sports news (10-15 percent) are also on the rise, according to PageFair.
Then there’s this from MediaPost: OTT Enters 6% Of U.S. Homes.
Growing over-the-top TV services could hit 100 million global subscribers this year.
New research from Ovum says that OTT services will get into 6% of all those homes capable of getting subscription video-on-demand services — including the already launched efforts from HBO Now, CBS All Access and Dish Network’s Sling TV.
By 2019, Ovum expects the OTT market to grow to 177 million global subscribers — around a 10% penetration rate of those who can get subscription video-on-demand services.
The Ovum report offers a fairly optimistic view of local broadcasters’ participation in OTT in the future, although it notes that Amazon doesn’t believe that true OTT players want the obligations that go with such participation. This will be something to watch closely downstream, for I remember the days when broadband itself only had a 10% market share.
- Here’s another Digiday headline on the new demand word from advertisers, digital or otherwise: Viewability. Why viewability and programmatic often don’t mix. Meanwhile, the TV industry is racing full speed ahead to programmatic. “Viewability” is a serious, serious matter for advertising, and again, we’re simply not going to be able to force our old models into the new world.
This is the point in an essay where the writer is expected to provide solutions to all of the above, but I have only general themes of what to do. Broadcasters, however, want a very specific “1-potato, 2-potato, 3-potato, 4” map so that they can manage change for themselves, but only if they can see the end from the beginning. I’ve spent the last 15 years of my life trying to produce that map, only to discover that the map IS the problem, for “manage change” is oxymoronic, at best. “Chaos” is another word for change, and how exactly does one manage that? You can’t; that’s a job for leaders, those who can point the way and keep the helm pointed in the right direction regardless of the weather conditions.
The signs of where we’re headed are all around us. It takes courage to put these trends together and arrive at a place of downstream profitability. One thing’s for sure: it won’t come by continually playing defense, because the changes are more cultural than they are technological. Therefore, the question to ask is “how can my company enable commerce in a networked world?” Good luck.