Reports detailing the death of TV have been greatly exaggerated, as have rumors of the demise of the upfront. But the medium and the way it's purchased are changing rapidly. While some shows and high-profile events continue to draw audiences, marketers are thinking more broadly about video as a medium that 's not limited exclusively to TV. And Barry Judge, chief marketing officer at Best Buy, for one, boldly predicts that set-top boxes won't exist in another five years and all TVs will be IP -enabled in some way.
This, among other provocative points, was raised in a wide-ranging conversation at the Association of National Advertisers' recent annual meeting in Phoenix, where Advertising Age Editor Abbey Klaassen talked with major marketers about how they're using TV today and the impact of new technologies. Among the insights offered by John Felice, general manager of Ford Lincoln marketing; Tony Pace, CMO of the Subway Franchisee Advertising Fund Trust; Scott Remy, chief communications officer of Nestle; and Mr. Judge, in this edited transcript: that amid the NBA lockout, hockey and college basketball could benefit, of course, but marketers will also have their eyes on digital sports properties.
Consider this: Twice as many advertisers have increased their TV advertising budget in the past year compared to those who decreased it, 47% to 23%. Does this surprise you?
John Felice: It surprises me, not that traditional media and TV is diminishing in its importance. It's still the majority of our media budget. But I look at what's happened with all the new media and the way to connect with consumers in new ways. We've had a big shift. In the last five years, we've gone from about 15% to 33% in social, digital, new media.
Scott Remy: It's almost like you can think of it like a stock. When people say that "x is dead," there's usually an opportunity there. We're bullish on television. It just can't be the way it was probably when we all grew up, where you just did an upfront media buy, and that was it, and released the hounds and you're done.
What do you see as the benefits and the drawbacks of the upfront?
Mr. Remy: We're there. I have to grit my teeth every year about the flexibility. Not all businesses can ever all be doing great at the same time. Right? So if there's a change in the business situation, we'll try and just take what we bought and move it around the best we can. But the flexibility thing is a frustration and it just sticks in my craw every year. And then we go ahead and dive in.
What kind of metrics would you like that you're not getting at this point?
Tony Pace: To me, engagement is the secret ingredient of buying media these days. I wish the data there were better, because you know, if a consumer is counted as being in your audience but doesn't really engage with the message, it's just not as powerful.
Barry Judge: Because we're a retailer, [we have to take consumers] all the way to a sale. So we continue to struggle with justifying my television spend, where I have less problems justifying digital and email and anything else. In our case, we're trying to get manufacturing money to participate in whatever it is we're trying to do. When we can show them all the way to sale, it's not hard to get them involved. But when we show them television, we don't have strong enough metrics.
Do you think TV has gotten more interesting because of or despite technology's advances?
Mr. Pace: Well, I don't think television has completely capitalized on the stories that exist in a lot of their programming. This may be a little bit of a stretch, but I kind of equate it to some of the conversations I have with guys at the NFL. They just talk about Sunday and Sunday night and Monday night, and I'm like, you guys are missing the boat, because Friday afternoon and Thursday, when people are setting their Fantasy Football things, is also a good time for you. You need to think beyond when you're garnering the biggest audience, because there are other connections with your fans, our consumers that we can take advantage of that are mutually beneficial.
What's the future of TV and what will the TV set look like?
Mr. Judge: I don't see set-top boxes existing outside of five years. And all TVs will be IP -enabled in some way. That's going to do a lot to upset the cable and satellite businesses.
Television is a mechanism for delivering video. We should be thinking about PC, mobile and television and your own website as ways to deliver [video]. That's the way we buy our upfront. It's the video story we want to tell. And we think about it across the three or four screens that exist today. You think about the story, the consumer you're trying to reach, the story you're trying to tell and in what place will the video best deliver that , and it's not necessarily just television.
Mr. Remy: I completely am aligned with that . In fact, every year when we plan, we plan now on screens. So it's video assets, wherever they may be found. We have an equalizer on rating points. And so truly, TV is just one place for distribution of those screens.
So, let's say the NBA lockout lasts until Christmas and sucks a bunch of ratings points out of the marketplace. Do you replace those with other TV ratings points, or can you replace them with other media?
Mr. Pace: There are lots of good digital sports properties out there. You don't necessarily get the scope of the audience, so you've got to perhaps buy more broadly than you normally would. So, that 's one of the things that we're looking at.
Mr. Judge: I've been boning up on my hockey, lately. I think hockey will benefit, actually. But there are lots of other places. We'll have to do some juggling after January, because we thought it would be solved by then, but I'm not sure it will be.
What's your favorite TV show?
Mr. Remy: I'm a sports guy. If I go a little bit deeper, I like "NCIS."
Mr. Judge: I have to admit I like "Breaking Bad."
Mr. Pace: "Person of Interest" but I also like "Boardwalk Empire."
Mr. Felice: Sports, and I enjoy "Boardwalk Empire" and "Modern Family."