Sunday, February 28, 2010

Advanced Television: The Future Is... Coming

My client base, let alone my collection of personal interests, is, well, diverse. I work on the media/entertainment/publisher side, the agency side, and the marketer side. To keep up with all of this - and because I love them - I attend a lot of conferences, panels, programs, webinars, etc. And it is quite fascinating to note the differences - not so much in the content of the talks but the culture of the organizations and communities.

Three weeks ago, I attended six days of non-stop social media events. The attendees at each stop on this massive media crawl uniformly carried Apple laptops and at least one Smart Phone - typically iPhone or Droid. They all had blogs and Twitter accounts, and most - it seemed - had Foursquare and/or Gowalla personas.

Fast forward to an event on February 22nd sponsored by Multichannel News and Broadcasting & Cable. The topic, Advanced Television: The Future is Now. Well, when, after checking my coat, I circled back to find out whether I needed a wifi password and whether there was a Twitter hashtag, I realized I wasn't in Silicon Alley anymore. The answers: no wifi and what is a hash tag? Ok...

I took my seat and booted up my nifty MacBook Air. Around me... a few PC laptops. Gosh they looked heavy - even the portable ones. I checked into Foursquare. One other person within the Roosevelt Hotel was there. I suspect he was not at this event. Ok...

And finally, the attire of those around me - not jeans and sneakers - which I would not wear anyway - but... suits and ties. Well, after all, there were a lot of ad salespeople, business development folks and senior executives, so that's no surprise.

So, putting aside all these cultural observations, what did I learn in school today. Well, to start, as you would expect, different cable/satellite operators are at different phases in their adoption of advanced technology. The leaders - as far as panelists - Cablevision and DirecTV - though Time Warner Cable's sizzle reel was far and away the best, highlighting some very nice consumer offerings and interfaces including its highly touted "start over" function and an expansive VOD library. A point of commonality. Digital. 94% of Cablevision's subscription base has digital cable, and all of DirecTV's base (by definition of it's being satellite) is digital. A digital footprint allows you to do cool things.

So, what is Cablevision doing? A number of cool things. Some of it with Seth Haberman's company Visible World. You may have read about their foray into addressable television over a year ago. It sounds like that, or at least part of that, was for Cablevision itself. Not a bad idea - test it out on yourself. And, also, a good test subject because they knew so much about their subscription base and were able to segment them by product line, e.g., TV only, Triple Play, TV and broadband, etc. Well, it sounds like the testing went well because they are rolling it out to other clients. The key statistic, if I understood it correctly was that consumers who were served targeted ads were 32% (i.e., one-third) less likely to turn away from the ad. Well, that makes sense and is quite a nice stat. Of course, I'm all in favor of relevant advertising. Even magazines get that concept. But, I wander.

So, consumers like this stuff. In a recent Forrester/ANA study, 78% of advertisers said they want to target better. However... only 59% said they were willing to pay a premium for it. Sound familiar? Think behavioral advertising. One explanation came from Seth Haberman. First, he was curious to know who the 22% were who did not want to target better! Secondly, he pointed out that media buyers are trained to say, "I want to spend less." It's like a reflexive response. They have no control.

So, Cablevision's next foray is with Pillsbury (my client!) and Zenith (a wonderful agency to work with - particularly my key points of contact Neil and Colleen). They are creating a dedicated Pillsbury VOD (video-on-demand) channel in the Cablevision footprint. It will be paired with "Power 30s" (I believe Barry Frey said he had copyrighted that phrase), 30 second ads that are tagged to bring people to the VOD channel. But, now we're getting technical.

So (big fan of the word "so' today), what were some of the key takeaways:

(1) It's not their fault. Television is a large, capital intensive, fragmented (albeit a number of big cable & satellite provider fragmented) industry. To accomplish any advanced television initiative, you need a cable, satellite or telco operator; an advertiser and a technology partner at a minimum. There are a lot of different platforms and technologies and ideas and tests and legacy systems out there. It's not easy to move that ship.

Contrast this with Dennis Crowley's simple little iPhone app. An iPhone app can be created for as little as a few thousand dollars. Even a $100,000 app is nothing compared to the television industry. Even $1 billion in online video advertising is less than 1.5% of TV ad dollars.

(Forrester estimates $40 billion in broadcast and $30 billion in cable TV ad sales in 2010 - January 15, 2010. Mediabrands' Magna division estimated that online video advertising will reach $1 billion by 2011 - MediaPost, April 27, 2009)

(2) As a point of comparison - according to Seth Haberman - only 3% of video is consumed online. So, while these numbers are growing astronomically, and while new generations are simply not watching traditional television, it's still a HUGE market.


(3) "Sight, Sound and Motion." These are the watchwords of the television community. This is what differentiates them from all other media. The POWER of the sight, sound and motion they can deliver. The web, said Rich Forester, VP of Ad Sales for DirecTV, is our closer, but it's big video that gets them there.

(4) For some, Advanced TV is more "now" than for others, but all-in-all, it won't be here for 5 years. Advertisers - and media buyers - are simply overwhelmed. The biggest need, from what I heard, is for EDUCATION. There are too many new technologies, new technology companies and options.

Moreover, advertisers want to know what they will get for their investment in this new, premium, advanced type of advertising. But that's the problem with being part of the vanguard, we just don't know. Hence, many brands are waiting it out. There are tests, successful tests. But nothing scalable.

Ultimately, advertisers need something at a national level, and MSOs need to sell the rest of their inventory as well as these special programs. As DirecTV's Forester said, we're happy to create these targeted programs, but we have thousands of thirty-second spots that need to be supported. The inference is that you don't get to do an advanced campaign unless you do a large traditional media buy.

Is that a good place to stop? Does it cover the 3 hours of panels and schmoozing of the afternoon? Well, I think it hits on the highlights. Moreover, it's time for my regularly scheduled program.

Until next time, good night and good luck.

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Idiot box phrase is getting obsolete due to satellite tv arrival.

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It's night and day - what you can do with a satellite remote (or remote device) vs. a cable control.

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