Brett King

Posts Tagged ‘Media’

Digital versus Traditional Advertising? Wrong Question

In Media, Retail Banking, Strategy on May 5, 2010 at 05:15

There is a debate that has been raging in Advertising quarters for almost a decade now – which is better Digital Media or Traditional Advertising. The fact that this question is being asked at all shows that most advertisers and institutions don’t get consumer behavior in the interconnected world. Considering that agencies are in advertising, you’d think they would get it right? Considering the declining ROI in traditional marketing approaches, you’d think marketing staffers would get it too right?

Over the last couple of years the debate on Advertising spend has centered on where the money is going. In March 2008 General Motors shocked the traditional advertising world when they announced they were shifting US$1.5Bn of ad spend to the digital space and while some shift towards digital has been hailed as ‘game changing’ most advertising spend is still heavily biased towards traditional media. Susan Wojcicki, Google’s vice president of public policy and communications, was quoted in Digital Media Buzz as arguing that Ad spending has not caught up with consumer behavior.

“U.S. users spend 12 hours per week online, which represents about 32 percent of their media time. However, online advertising makes up only 13.6 percent of advertising spend in the U.S.”
Susan Wojcicki, VP – Public Policy and Communications, Google

This is accurate, but what is holding back the shift? Long entrenched marketing behaviors, lack of digital skills in-house, lack of agency drive away from traditional media buy, or lack of understanding of changing consumer behavior…

It’s probably a combination of all of these. The fact that most financial institutions, for example, have minimal social media or mobile advertising spend today shows either a complete lack of understanding of consumer behavior, a lag in internal adaptation of ‘digital’ or organizational inertia that is just too hard to shift?

I think all of the above contribute, but the real problem lies in the ‘campaign’ mentality. Brand marketing is very well suited to traditional media, because it is about creating a ubiquitous recognition of your brand, logo, image or message. To fit broadcast mediums for product ROI advertisers created the campaign – really mini product or service branding initiatives designed to create recall at a time when customers are compiling their ‘evoked’ set of purchase alternatives. But while the campaign worked in the 70-90s utilizing broadcast, this is no longer the case in the digital world.

The question over Digital or Traditional is the wrong question. The question should be, how do we better engage customers today so that they are compelled to buy?

Campaigns on traditional media are struggling in the one area that digital is increasingly effective – measuring ROI. Measurability is a strong advantage in the new world because the ability to understand why, when and where customers need a product or service should be considered the Holy Grail. But traditional broadcast methods such as TVC, Radio, Newspaper, Direct Mail, and static outdoor, only work efficiently when it is a static message directed at a wide audience that doesn’t need to change.

It was for this reason that Pepsi started its shift to Direct Response Marketing this year as they moved their entire SuperBowl TVC budget to online and social media. At the Sears Annual General Meeting Edward Lampert explained that even a major retailer is having to conceptualize a shift away from broadcast methods to much more targeted conversations with customers, something that static media can’t deliver.

“It’s not just us broadcasting to customers any more, he said. “It has to be interactive, and it has to be relevant.”
Edward Lampert, Chairman of Sears

Retail organizations, whether banks, financial institutions, or retailers like Sears need to understand that Brand advertising can survive and thrive with traditional media, but campaigns are effectively dead in the IP-conversation space. Companies need to re-gear their marketing teams toward conversations, not just telling their customers a message and hoping for brand recall at purchase time.

In the next 5-7 years TVCs will largely disappear because consumers aren’t watching them, why? Because we’ll either be downloading or TiVo’ing and Ads won’t be a part of the experience. Newspaper will shift to digital format so that ads in that space will go from static to just like web banner Ads. Radio will survive, but perhaps be delivered differently based on subscription feed models. Billboards just like Newspaper will move to digital format also. The question over Digital versus Traditional is kind of redundant. The way media is morphing everything is going digital, even traditional.

What marketers and advertisers need to work on is the conversation, not broadcast. It takes a lot more competency internally, and initially the cost of delivering conversation marketing is alot more expensive than traditional broadcast production. However, the ROI in direct response, permission or conversation marketing blows anything in the traditional media measurability space away. We have the technology now to target messages at customers at the right time, across the right channel, but we’re not using it because we can’t fit campaigns into this model. It’s tough – but reengineering our approach to customer engagement is the only way through this discussion.

Bank marketing staffers better go back to school, and fast…

TV, Advertising, and Newspapers are dead – deal with it… (Huff Post)

In Retail Banking on March 14, 2010 at 07:14

See my original post on Huffington…

You know what – change is a funny thing. For me, I can’t wait untill I can watch all my movies and TV shows on demand instantly whenever I want without having to worry about which channel it’s on, or which device I’m going to use to watch it – just click and watch. I can’t wait till I can read my latest thriller I bought on my iPad while sitting at 35,000 feet depending (I’ll still read the hard cover at the coffee shop though!). I can’t wait till I can walk on to my next flight without needing a physical boarding pass, and I can’t wait till I do my first payment by swiping my phone instead of my credit card (in fact I already have really). For me technology adoption is not only a way of life, but it’s just plain cool.

2010-03-13-images-cellphonesasboardingpass.jpg

I want to use my cell phone as a boarding pass

It is apparent, however, that some others amongst us, don’t really like all these new fangled internet thingys and are a little challenged by change. I was in one of my regular bank strategy sessions the other week when I challenged the concept of free-to-air TV. In BANK 2.0 I predict that free-to-air TV can not really survive beyond about 5-7 years, because with TVC Ad revenue plummeting, beyond the state financing TV stations there is simply no viable business model that can sustain free-to-air. Why I raised this issue was, with only 18% of TVCs even having partial ROI these days, that marketing teams had to start thinking about moving away from traditional broadcast advertising as quickly as possible to point-of-impact. It was at this point I was challenged by a member of the audience who shouted out “you’ll never get me paying for sports on TV!”. In fact, and this might seem just a little bizarre to those of you who live in other countries, recently a lobby group has come up with a campaign to ensure just that in Australia – it’s a website and massive TV/Print Ad campaign running in Australia at the moment called www.keepsportfree.com.au. I’m sorry – that’s just … ridiculous – think new mediums people!!

No matter how hard you lobby, no matter how hard we want things to stay the same, there is an inevitability about the way technology adoption changes consumer behavior, and hence the way it changes business, consumption and transactions. The most coveted skill in business today should be the ability to accurately read these trends and help your organization adapt accordingly.

I know I’ve discussed it before, but the launch of electronic stock trading by Charles Schwab is a great example. Looking back even Merrill Lynch probably realize that this was a positive game changer. The reality is it really had to go this way eventually, regardless of who took the helm. The fact that we can use advisory sites, online research, and analytics tools to give us real-time information even better than what most (not all) brokers could gives us, says what it’s all about – where does the value lie? Not in a human interaction – but in the ability to execute the trade itself. Branches of banks face the same conundrum today.

For media content like TV shows, music, news it is likewise inevitable. Why should I wait until 8/9 central to watch that favorite series that I love, why can’t I just schedule it for download as it’s released online and then just watch next time I have a spare 40 minutes? Why would I physically walk into a music store to buy a CD – after all how can I get the tracks onto my iPod that way? Carry a newspaper on the train to read? Come on… These are all outmoded interactions; interactions that have no place in my life in the 21st Century.

You see these changes are inevitable. When Napster launched the recording industry went after the start-up and other similar businesses with the focus of a velociraptor, and for a time they thought they had succeeded. In 2008, however, 95% of songs were downloaded illegally, why? Mainly, because the recording industry failed to provide legal means to access this content online – they were too slow to adapt. When iTunes did provide a legal channel for the same – they made gazillions. In addition, artists actually can make more money in the digital age, while record companies provide minimal value in the value chain of the new world.

This is why I am choosing to embrace change. I don’t want to keep my free-to-air TV, my physical newspaper and my gas guzzling SUV – I am ready for change, and I recognize it is inevitable. If I am prepared for change, then I’ll undoubtedly capture those customers that are likewise ready for change, and they are the majority today. I can adapt or see my value chipped away until my business is worthless.

You want to join me?

“What Jay Leno, Conan O’Brien and the banks have in common”

In Groundswell, Media, Retail Banking, Social Networking, Strategy, Technology Innovation on January 17, 2010 at 01:19

It has become clear over the space of the last week that NBC, Jay Leno and Conan O’Brien really did not anticipate what has transpired with viewers over the last few months. Jay’s show at the 10:00pm time slot on NBC was an experiment to see if Jay’s popular show could survive in the Prime Time slot, but it was also about NBC looking to cut costs as Jay’s show was inevitably less expensive that a series that could be slotted into that time.

Some have commented that the failure of Jay’s show is that late night shows are becoming formula and that since Jay Leno and David Letterman reinvented the format in the 80’s that nothing much has changed. Others argue that the late night format is just better suited to ‘late night’ and that the prime time experiment has failed. But the truth is that this is a symptom of a far larger problem facing NBC and the networks.

In the last 5 or 6 years, traditional media has been progressively facing the challenges of a changing landscape. In 2003 and 2004 the emergence of TiVo produced the so-called “TiVo effect” where consumers first had the opportunity to skip advertisements through the use of technology. In recent times surveys have showed that the majority of viewers would pay for ad-free TV over having to watch Ads.

The emergence of YouTube and sites like Hulu has produced a change in viewing behavior too, where users select content on demand and tend to surf through content fairly rapidly a few minutes at a time, compared with sitting watching a longer show. Then we have the whole download element where users are using Bittorent and other tools to download movie and TV shows – some estimates put the percentage of web traffic related to Bittorrent downloads sometimes exceed 50% of total web traffic.

Consumer behavior in respect to media has been undergoing a dramatic change. Traditional media companies like NBC, and content providers like Jay Leno and Conan O’Brien are not really sure about how to make the transition to what will come – we can’t say for sure what will come in the future, except that it will be different. Newspapers are facing even more acute pressure.

In 2008 the Internet surpassed all media except television as the primary source for national and international news (Source: EIAA Mediascape); this has taken its toll. In March 2009, the Seattle Post-Intelligencier or the “PI” as it was known, a 146-year old newspaper, closed down, citing rising costs, falling revenues and declining circulation. Since just January 2008, at last count, 53 regional newspapers in Britain have folded. Of the top 25 newspapers in the U.S. in 1990 (the year newspaper employment peaked), 20 of those newspapers have seen declines (on average reporting circulation down by more than 30per cent), and two have been closed down or declared bankrupt. New York Times reported a 30 per cent fall in advertising revenue, resulting in a $35.6 million loss for the 2009 third quarter alone. Newspaper mogul Rupert Murdoch and his contemporaries are grappling with this very change right now.

This is purely indicative of the changing behavior of consumers in respect to sourcing content, news, and entertainment. While movie cinemas continue to post record revenues, traditional media such as TV, Radio and Newspapers are under significant pressures from these changes in consumer behavior. While networks and advertisers are hoping beyond hope that ‘things will return to normal’ the fact is that these traditional media sources are in terminal decline – especially free-to-air TV and newspapers.

One of the reasons bank’s have fallen into trouble with consumers is that they too, like traditional media, have not anticipated the massive changes in consumer behavior. Banks continue to believe in the branch as the primary channel and traditional methods of engaging customers such as direct mail, telemarketing and direct sales. While they see disruptive change coming, they don’t really know what to do to tackle those changes, so they choose to ignore it and hope that traditional methods see them through.

Unfortunately, the disruption to media and to banking is yet to play out fully. In the end we’ll likely be left without newspapers, free-to-air TV (cable and subscription services may service), and radio. Traditional marketing mechanisms for the bank will be reduced purely to occasional branding campaigns, whereas broader marketing efforts will be focused much more on target consumers at the point-of-impact.

Needless to say, before this decade is over, Jay Leno, Conan O’Brien and the big banks will probably have a lot more to worry about than dwindling numbers – they need to find a method of more effectively adapting to the way consumers wish to receive their content, rather than attempting to re-arrange the message on existing media.