Nailed

It has become an article of faith in the advertising and marketing world that traditional mass-market advertising is on the way out.

From the New York Times, December 28, 2004:

Jim Nail, principal analyst at Forrester Research, said, “You’re seeing the end of the era of mass marketing.”

Well, it’s a few years later, and it seems to me I saw some Bud spots on the Super Bowl. Also, I seem to recall seeing some iPod billboards recently. And aren’t those Toyota spots I see every time I turn on the TV? As I sit here today, mass marketing is doing a helluva lot better than “principal analysts.”

And yet every week I can still pick up a newspaper or magazine and read an article about how the Internet or TiVo is changing the world as we know it and the poster child of mass marketing, the 30-second TV spot, is dead and buried.

In fact, while data on this topic is hard to find and sometimes contradictory, here’s what it is telling us:

• According to Nielsen Media Research, among all households age 18-49, 2.6% of viewing time is DVR playback
• According to the New York Times, 60% of the time DVR viewers skip commercials

Do the math:

Incidence of viewing DVR = 2.6%
Incidence of skipping ads while viewing DVR = .60
Total ads skipped: 2.6% x .60 = 1.56%

So all this TiVo fuss is about 1.56% of commercials being skipped. More commercials are missed by people getting up to change their Depends.

What this data doesn’t tell us is how many DVR owners are watching more TV because they are now able to watch shows they would normally have missed. If the answer is that they’re watching more tv (and how could it possibly be otherwise?) the 1.56% gets even smaller.

On the other side we hear about how the internet is killing tv viewing. Once again, the data tell quite a different story. Since the year 2000, household tv viewing is actually up 9%. People are watching more tv, not less. In fact, the positive effect of more tv viewing is six times the negative effect of TiVo-ing. Try finding that fact somewhere.

With due respect to Mr. Nail, the end of the era of mass marketing is probably going to have to be postponed a few weeks. Let’s go out on a limb here and make a prediction: as long as there are masses, and as long as there is marketing, there will be mass marketing.

However, while Mr. Nail hasn’t exactly nailed it (couldn’t help myself ), he has inadvertently stumbled on something important. Marketers are turning more and more from mass-market advertising techniques to what they call “nontraditional” or “experiential” forms of marketing. This can include everything from very sophisticated websites to posters in urinals. The idea is that these forms are more “engaging” than traditional advertising.

Nontraditional marketing is not a new idea. Anyone who knows anything about advertising knows that experiencing a product has far more impact than experiencing an ad. Smallish independent agencies have been able to differentiate themselves over the years from their much larger counterparts by doing a fair amount of nontraditional marketing. What is new, however, is the unquestioned faith new converts have in it. While they will measure their cost-per-point and ROI in traditional media to the nearest penny, they will create zillion dollar web strategies just so long as some agency web genius tells them it’s cool.. As usual, the thing that is all the rage is being oversold and under-measured.

The conventional wisdom is that media proliferation and fragmentation have been the most important factors in the supposed ebbing effectiveness of advertising. Once we were able to easily reach almost everyone by buying a few TV shows, but today that is no longer possible. Consequently, the argument goes, mass media are not as effective as they once were.

On the surface this seems logical. However, one could just as easily make the counter-argument: it is certainly true that the media have become fragmented. But with increased fragmentation, any medium that can deliver a large audience—even if it is not as large as it once was—should be more valuable than ever.

Not only does this argument have logic to it, it has the added benefit of being true. In spite of the fact that audiences for individual TV shows have dropped significantly, media prices have not. In fact, on a cost-per-viewer basis, TV prices have continued to rise.

In the city where I live, household TV costs per point increased by 68% between 2000 and 2007. If we accept that the marketplace is the final arbiter of economic value, we must concede that mass media time is actually more valuable than it has ever been.

If you don’t have any 15-year-olds around, I suggest you hook up with some for a day and watch their habits. They are obsessed with media, consuming two or three at a time. Sure, the deck is being reshuffled with more media options and people moving from medium to medium. But not only are we not “at the end of the era of mass marketing,” we are in an explosion of media that, in the fullness of time, is going to make those media that can economically reach mass markets more valuable than ever.

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Okay, Sherlock, How'd You Do?

Yesterday I posted a problem to demonstrate the difficulty of understanding some purchasing behaviors.

Here was the problem:

I get The New York Times delivered to my home in the San Francisco Bay Area every morning. Yet when I'm on the road, I don't buy The Times on Mondays or Tuesdays. I do buy it, however, on Wednesdays through Sundays.

Pretend you're a marketing strategist, and see if you can come up with a logical explanation for this purchasing behavior.

Before the answer, an observation.

While most of our purchasing behavior is done for obvious reasons, we each have little quirks that are very difficult for a strategist to intuit or even discover.

For example, there are restaurants I go to not because I like the food, but because I like the bread or the bar. There are also restaurants I avoid whose food I like, but whose bathrooms stink. Likewise, there are a number of categories I participate in in which my behavior is due mainly to personal quirks. I am sure we each have some of these.

The point is, it is easy to fool ourselves into thinking that data has all the answers. There are always personal behaviors that are not easily explained by anything other than knowing the person.

Now to The New York Times mystery.

The answer is this. I get most of my news on line, not from the newspaper. I get the newspaper for basically three reasons: the sports section, the business section, and the crossword puzzle.

The Times has a terrible sports section so I don't read it for that. The business section is very good, but not compelling. The primary reason I get The Times is the crossword puzzle.

The Times crossword puzzle gets tougher as the week goes on. Monday and Tuesday are not challenging for me; Wednesday starts to be a challenge; Thursday is usually pretty difficult and contains a trick to it; Friday and Saturday are killers; Sunday is about as hard as Thursday, but it's big so it's fun.

So the explanation is, I don't buy The Times on Monday or Tuesday because the crossword is too easy. It's highly unlikely that this behavior is representative of anyone but me. Nonetheless, I think it demonstrates that synthesizing a correct explanation for a purchasing behavior - when not obvious - can be a tricky business.

Kudos, and a free beer, to Adam and DuBoisterous, who nailed it, and also to Vinny Warren and Charlotte, who made me laugh.

Sky Still Not Falling

From The Hollywood Reporter, Dec. 27, 2007: "A study by Palisades Media Group (owned by Nielsen) suggests that despite the growth of digital video recording devices, DVRs are not drastically affecting the viewing of commercials, even time-sensitive or seasonal messages."

Now there's some big news. We've only been reporting this for months. See "Nailed", "The Sky Is Not Falling" and "Sky Not Falling, Update."

The Hollywood Reporter is apparently too dumb to do the math, but in the above-mentioned posts TAC gives you the best calculations on how many commercials are actually being skipped, based on the latest data I can find.

That's why, for the finest in cranky opinions, discerning readers keep their computers tuned to The Ad Contrarian.

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Quickies

- The consumer is becoming more resistant to marketing, right? Tell that to Apple and Toyota. Here’s what the consumer is becoming more resistant to: generic, undifferentiated products supported by smug, benefit-free advertising.

- If I have to read one more quote from one more brain-dead agency boob with the word “engagement” in it, someone’s going to die. The engagement crowd is trying to convince us that the effectiveness of advertising is highly correlated to the level of interest a consumer has in the program. Baloney. Ads have to stand on their own. Good ads are good anywhere. Bad ads stink everywhere.

- ”...the spread of digital video recorders is making TV a less effective medium.” ADWEEK, March 3, 2006. Only one thing wrong with this well-known fact. It’s not true.

- Facts: Among viewers 18-49 Nielsen reported in November 2006 that 2.6% of total tv viewing is playback on a DVR. Those who playback skip commercials about 60% of the time (New York Times). So a whopping 1.56 percent of commercials are being skipped because of TiVo-ing. There are more spots missed by people leaving to change their Depends. (See Nailed)

- From ADWEEK 7 months later: “Some advertisers actually gain significantly from DVR usage.... thanks to the DVR (The Office) added 12 percent more commercial viewers.”

- The internet and new media are also killing tv, right? Wrong. American families now watch 9% more tv than they did in 2000.

- Put these facts together and here’s what you get: Since 2000, the positive effect of more tv viewing is 6 times the negative effect of TiVo-ing. Try finding that fact somewhere.

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Death Of Mass Marketing Postponed

In observance of "Worldwide No Blogging Week" The Ad Contrarian is -- you guessed it -- not blogging this week. Instead we'll be posting oldies. Here's one.

December 28, 2004 NEW YORK (New York Times) -- Jim Nail, principal analyst at Forrester Research, said, “You’re seeing the end of the era of mass marketing.”

October 30, 2007 NEW YORK (AdAge.com) -- ...ad time for the Super Bowl is nearly sold out... A person familiar with the situation said Fox has sold more than 90% of its ad time for the game..."it's just weird to even consider that if you want to be in there, you've got to act in November," said Jeff Gagne, VP-account director at Havas's MPG....Given the demand, the network could seek more than full price for the remaining ad roosts.

Researchers enjoy a unique position in the marketing world. Because they blind us with numbers, they are taken very seriously. The fact that their analyses of these numbers are so often wrong is the dirty little secret no one mentions. Rarely are they held accountable for the idiotic nonsense they spout (e.g., the "end of...mass marketing.")

Collecting data is easy. You don't need to be smart to do it. Analyzing data -- understanding what it means and what should be done -- is hard. That's the part you need to be smart for. And that's the part that most researchers are awful at.

Remember, a researcher is nothing more than another guy with an opinion. Like you and me.

For more on this, see "Baloney Sandwich" and "Nailed"

The Sky Is Not Falling

The popular press and the ad trades would have you believe that tv viewing is in steep decline, and that this steep decline is exacerbated by heavy DVR usage (TiVo, etc.) disrupting the traditional effectiveness of tv advertising.

The facts tell a different story.

If you read Nailed you saw how TAC used Nielsen data from November, 2006 to report that about 1.6% of total tv commercials are skipped because of TiVo-ing. Now there is new data from Leichtman Research Group confirming these numbers.

Leichtman reports in its research that about 20% of households have DVR’s and that they time-shift about 16% of the time. This means that 3.2% of total viewing is time-shifted (16 percent of 20 percent.) Several sources, including The New York Times, tell us that when time-shifting, viewers skip commercials about 50-60% of the time.

This means that about 1.6 to 1.9 percent of commercials are being missed because of time-shifting -- right in line with the numbers TAC developed from Nielsen’s figures.

Marketers also keep misinterpreting what is happening with viewing patterns. Because individual shows are getting lower ratings, they think that tv viewing is down. In fact, household tv viewing has increased 7% in the past 5 years. What’s happening is that there is a growing pie and the networks are getting smaller slices.

When it comes to viewing tv commercials, in the past 5 years the positive effect of more tv viewing is 3 to 4 times the negative effect of TiVo-ing.

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The 5 Dumbest Ideas About Online Advertising

The phenomenal rise of the internet as a medium of communication, information, and entertainment has given rise to some equally phenomenal conceptual flops about advertising.

Back in the day, online advertising was going to "change everything." It has changed nothing. Advertisers are still mostly doing on the web exactly what they did in traditional advertising -- bugging the shit out of us with the crumbiest, most annoying ads possible in all the places we are most likely to be bugged and annoyed. Oh yeah, and millions of pages of self-serving "content" that no one pays any attention to.

Here at The Ad Contrarian Global Worldwide Headquarters, over the past six years, we've been chronicling the fantasies and delusions about web advertising that pass for "thinking" in marketingland.

Today we take inventory of these dumb ideas. We have selected our 5 favorites and we present them to you in one neat little bundle, in no particular order, but numbered to keep you on track.

Here are The 5 Dumbest Ideas About Online Advertising 

1. Interactivity

The hypothesis behind this daydream was that the same consumer who was frantically clicking a TV remote to escape from advertising was going to merrily click a mouse to interact with it. Marketers and agencies bought into this baloney big time. It didn't take long for it to become clear that no one wanted to interact with ads. The poor bastards trying to sell this stuff quickly changed the nomenclature from "interactive" advertising to "display" advertising. Fortunately for them, most of the flat tires who pass for "marketing experts" were too confused to realize what happened. The good news for the ad industry is that no matter how ineffectual banner advertising is, it just keeps growing and spinning off money. The rate of interaction with banner ads is below one click in a thousand. This is not interactivity. This is absence of interactivity.

2. The death of television 

From Let's Just Declare TV Dead And Move On, TechCrunch, November 2006...

"..the writing is on the wall...at the end of the day, people want to consume content without the friction of having to sit down in front of a television at an appointed time....There is a fundamental shift in consumer behavior going on..."  

In the 7 years since TechCrunch and the rest of the pundit digerati declared TV dead, viewing has been at its highest level ever in history. Other than that, they nailed it.

3. Permission marketing 

The concept here was that the "interruption model" of advertising was no longer viable and was being made obsolete by the web. The mantra was that "the consumer is in charge" and in order to be successful you had to charm "the consumer" into giving you "permission" to market to her. This has proven to be thoroughly wrong. In fact, the aforementioned banner advertising -- the poster child of the interruption model -- is growing at alarming rates and is in danger of taking over the entire Internet unless Brad Pitt gets in there and stops it.

4. The conversation 

This "big idea" posited that consumers want to have online conversations with marketers, and online engagement with brands. It turns out that even consumers aren't that stupid. This nonsense completely misinterpreted the relationship between consumers and the vast majority of the stuff they buy. It assumed every brand was Nike or Apple. The facts tell the story very clearly: the engagement rate for posts of the top 200 brands on Facebook is under 1/2 of 1%. Conversations? More like monologues.

5. Convergence 

If you believed the experts and pundits, TV and the web should have converged a long time ago. There have been a thousand different set-top boxes and gizmos that were supposed to effectuate this convergence. We were supposed to be watching all our favorite TV shows on YouTube and Hulu without the annoying interference of advertising. Convergence is nowhere near a reality. According to the latest data I can find from Nielsen, TV constitutes 98% of video viewing. Less than 2% of video is viewed on line, despite all the porn you're watching.

Now that you've read this and are feeling particularly smug because you figured this stuff out yourself a long time ago while your boss was deluded by the fantasies of web magic, let me give you a little advice. Do not take this and show it to her and say "see, I told you." You will only succeed in getting your ass fired for being a "Luddite dinosaur." Because no matter how dumb these ideas are, I guarantee you, your digital maniac of a boss is dumber.

Sky Not Falling, Update

In 2003, Forrester Research (see Nailed) estimated that DVR's would be in about 26% of homes by now.

In fact, Nielsen reported earlier this year that DVR's were in 17% of homes. About 1/3 fewer than Forrester had predicted.

Always remember that without change nobody needs research. Consequently, it is baked into the DNA of research companies to emphasize (and, unfortunately, sometimes exaggerate) what is changing, and downplay what is stable.

Exaggerating change works for research companies in two ways:

1. It gets them press. Nobody ever got famous predicting that things would stay pretty much the same.

2. It gets them customers. There's no bigger sucker than a gullible marketer convinced he's missing a wave.

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So Wrong For So Long

For almost 2 years now, we here at Ad Contrarian global headquarters have been ranting about the imbeciles in the press and in the marketing industry who have convinced themselves, and most of the ad industry, that television is dead.

I am very happy to gloatingly report to you today that television viewing is at its all-time highest point ever. EVER.

Regardless of all the bullshit you read, there have never been as many people watching more television for longer periods of time than there are now. NEVER.

According to Nielsen, the average American "now watches more than 151 hours of TV a month. That's about five hours a day and an all-time high, up 3.6% from the 145 or so hours Americans reportedly watched in the same period last year."

Kudos to the brilliant Susan Bandura, who wrote a guest post for this blog back in November of 2008 and totally nailed it:

...what’s really going to happen to TV viewing in the near future?

Let’s see … everybody has a TV … people are staying at home more … consumption of entertainment usually goes up when the economy is down… and now it's dark by the time we get home from work...

All of these factors say “more TV watching” as far as I’m concerned.

Susan was quoted by the LA Times yesterday in this story about the surprising (to those who have drunk the "tv is dead" Kool-Aid) strength of tv viewing.

Here are some more contrarian ideas about the "death of television" and the "death of advertising" you can expect to be reading about here soon:

• Despite all the bullshit you read by digital maniacs, there will soon be a study that shows that tv is still the dominant medium for reaching every demographic group, including young people.

• Despite all the "advertising is dead" nonsense, a study will soon be released showing that even with clutter, fragmentation, TiVo, digital media, etc, tv advertising is as effective as it has ever been (see Update below.)

• Despite all the golly-gee web bullshit, you will soon read that a higher proportion of on-line searches are driven by television than by on-line display (banner) ads.

TV ain't dead. Advertising ain't dead. The only thing that's dead is the credibility of the trade press and the trendoid, self-promoting pundits who've been so wrong for so long.

Update:
Before the electrons were even dry on this post, Adweek published an article entitled "Study: TV Ads More Effective Than Ever."