August 25, 2010

Leveraging Anxiety, Part 2

In Leveraging Anxiety, Part 1, we asserted that...
Part of what keeps us...employed is keeping our clients in a constant state of anxiety about the future....The more we can convince (them) that everything is changing... and they need us to interpret the changes -- the longer we stay in business. Consequently, every few years we come up with a new "thing that will change everything"
Today, we're going to take a look at some of the "things that were going to change everything" and see how they're doing.

My first experience with this phenomenon came with the advent of videotape (yes, I'm that old!) Videotape was going to change everything. Commercials were going to cost 50 dollars to produce and they would be shot in the morning and aired in the afternoon.

Then came cable TV. When it was first introduced there was a flood of hysteria in the ad world about how cable would "change everything." Clients were going around looking for agencies that "really understood" cable. What was there to really understand? The signal came through a wire, not the air. Big shit.

Then the VCR was going to change everything. People were no longer going to watch live TV. They would tape their favorite shows and play them back at their convenience (sound familiar?) And worst of all, they would fast forward through the commercials (sound familiar?) Naturally, hysteria ensued.

Then the computer was going to change everything. Creative people would be able to produce TV spots right on their desktops. And then agencies would disappear because clients could create spots right on their desktops, too.

Then the web was going to change everything. Brick and mortar stores were dead. We were all going to buy our cat food and our batteries on line. The web was going to create "disintermediation" which meant we would buy all our goods on line, directly from the manufacturer. There would no longer be a need for distributors or retailers.

Then there was TiVo - - which, of course, was going to change everything. TV advertising was finished. Nobody was going to watch tv in real time. We would time-shift all our viewing and skip all the commercials.

Then YouTube was going to change everything. We would watch all our video online. We could watch whatever we wanted whenever we wanted, without the annoyance of advertising.

Between TiVo and YouTube, television was declared officially and unalterably dead. Last week, I Googled “TV is Dead.” How many results do you think there were? 369 million.

Now just to give you a little update on some of the recent things that were supposed to change everything, here are some facts. You remember facts right – those were the things we used to use to make business decisions. Now we make business decisions on “buzz.”
  • eCommerce: Online retailing accounted for about 5.4% of retail activity in the first half of 2010. 95% is still done the old fashioned way. Last time I looked my supermarket was still in business. If ecommerce grows at a 10% compounded rate for the next 5 years, it will still account for only 8% of retail sales.
  • DVRs:  TiVo and all other kinds of time-shifting devices now account for about 6% of total tv viewing. That’s it, 6%. People who use DVRs skip ads about 50% of the time. So the total number of ads skipped is about 3%. Meanwhile, since the introduction of TiVo, average individual TV viewing has increased by 21%. So the positive effect on advertising of more TV viewing is 7X the negative effect of ad skipping. Try finding that fact somewhere.
  • Online Video: As for consumers watching their video online, 99% of all video is currently being watched on a television. 1% is being watched online. So YouTube, Hulu, Vimeo, all the porn your kids watch and all the idiotic viral videos combined account for 1% of video viewing.
  • Mobile Video: If you’re all excited about mobile viewing, don’t read this. Mobile viewing currently accounts for 2/10ths of 1% of all video viewing. In other words, it essentially doesn’t exist.
So, if the facts keep telling us over and over again that these amazing new technologies create small to modest changes in consumer behavior, why are we so credulously attached to the belief that the next flavor-of-the-year is going to "change everything?"

For the answer, tune in tomorrow for the final exciting chapter of "Leveraging Anxiety, Part 3."

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