The focus of Ad Age's latest CMO Roundtable, in fact, was a topic central to the ANA's TV and Everything Video Forum: the ways in which marketers continue to get more savvy and demanding when it comes to TV, and to what extent they are trying new formats at a time of rapid and dramatic change in the media landscape.
Jennifer Rooney: Exactly three years ago, Bob, you posed on your blog the question "Who's killing television?" Singling out the culprits, you blamed clutter, cost measurement and creative. You also wrote that you had great hope that TV marketing has the opportunity to be reinvented as a communications vehicle of choice in three to five years. Three years later, are we witnessing that reinvention?
Bob Liodice: Some. In terms of measurement, we're making some progress. Commercial ratings -- we've moved up the ladder a little bit with some consensus around C3 as a measurement tool. Cost, again, is relative. It's a function of where we are vs. lots of alternative forms of media, and on a cost-per-thousand basis, the rate of growth in television cost has slowed down from when I first talked about that, when we were in the double-digit range. In terms of clutter, no, we haven't done a thing there. However, because there are new formats and new approaches such as branded entertainment, branded content and VOD, which are cutting through the clutter, there are alternative approaches, and the television industry is reinventing itself in that regard. So has the television industry really reinvented itself? Slower than I probably anticipated three years ago. They're trending in the right direction.
Ms. Rooney: Do you think we'll see bigger changes in the next three years?
Mr. Liodice: Yes; I don't think they have any choice.
Steve Sullivan: Particularly the networks remind me of the big three automakers in the '60s. They were all focused on the machine, the engine, the design, and consumers were ahead of them, and what they were interested in -- which the Japanese found out -- was, "How much stuff can I get in the back?" and "Is there a cup holder?" Detroit was still talking about power and muscle and design, and consumers said, "No, I want something different." The more entrepreneurial cable networks are realizing that it's not just about tonnage; it's about establishing relationships with a smaller audience and using multiple, different programs to bring them into a family of interest.
Ms. Rooney: So where does that leave marketers as far as what they're doing, what they need to be doing?
Mr. Sullivan: When we were first starting out in our jobs, we were all just kind of making an ad, and putting it out there, and hoping somebody did something with it.
'We're experimenting with some things, but TV is still a very powerful tool.'
-- Steve Sullivan, Liberty Mutual
Bob Stohrer: Cable is making some strides, but at the end of the day, the tension that exists in the boardroom to deliver on ROI is forcing a lot of dollars down lower in the purchase funnel, and whether that's digital, whether that's in-store, you're able to quantify for people, you'll tell them exactly what the performance is. There is a balance between immediacy and awareness that TV still delivers that a communication plan should be architected around. For us, as Virgin Mobile, we compete in a very, very big category, obviously, but we still need to create awareness. We are a differentiated product, we do go against the establishment, so that even though television is a battlefield for us, we still fundamentally believe in it. Selling that is one of the big challenges that we have, showing exactly what the dollars bought. That's where the real tension exists for us.
Jeff Bell: I'd like to talk about the one C that I don't know if you really covered, which was content, and what I see as this movement toward greater fragmentation and greater focus on individual and the one. Technology today, whether it's a cellular phone or it's an iPod, it's all becoming increasingly fragmented and about individuals consuming media individually. I think we're going to see that people are tiring of the fact that the family does not sit down together as a family and consume television. The content itself to me is fundamentally not drawing together community.
Jonah Bloom: That's an interesting point. Do you think that it is a lack of good content that's doing that, or the availability of lots of other choices?
Mr. Bell: Well, we believe that there is a watershed moment occurring in interactive entertainment, and it's fundamentally being led by physical play. So today, a "Rock Band" or a "Guitar Hero" is the Twister of the 21st century; it's a chance for people to come together and laugh and to enjoy content together.
'It's idea-driven for us, and the medium is the thing that follows from there.'
-- Bob Stohrer, Virgin Mobile
Mr. Liodice: But isn't it the next step for television to bring the interactive world and television together? I mean, we've been calling it "convergent" for a lack of a better term. And that's happening. It's happening right now, and it's going to happen in an expanded rate in the future.
Mr. Bell: I do think that instead of content being fragmented onto the 10-foot or the 2-foot or the 2-inch screens, we'll see it brought back together so that it's more of an integrated function than a separating function.
Mr. Stohrer: Your point is a really good one, and it may not just be limited to the family, but as I look at television right now and say, "OK, where do we want to land?" it's really in those shared experiences for which people are actually going to get together, whether that's a sports event, whether that's "American Idol," whether that's the Academy Awards. You're looking at appointment in television nowadays. The definition of appointment television has changed a lot, and I think what Jeff is suggesting I agree with, which is that those things that are shared experiences within a household, or among friends, are the things that now exist as appointment television.
Ms. Rooney: So from an advertiser point of view, what does that do for you?
Mr. Stohrer: Well, if you still approach television as an awareness- and an immediacy-building communication vehicle, I know if I'm going for those shared experiences, I'm getting that bang right away.
Ms. Rooney: What kinds of new platforms or formats, such as video on demand, interactive TV, targeting, using technology such as Visible World or web-TV vehicles like ABC.com, have you experimented with?
Mr. Stohrer: It's idea-driven for us, and the medium, while it's always an important consideration, is the thing that follows from there. We're looking at everything from microsites to messaging to our base. I want to say mobile-to-mobile is very impactful, but it's something that we deliver vs. participating in. But I think the interesting thing about microsites and other community-oriented things that you can build nowadays is that the measurement of traffic, the ability to re-target those customers, the ability to connect it very, very quickly to what it is that you're offering in terms of a product set, and to measure that has really changed in terms of how we think about going online at this point. We just ran a campaign in which we were able to connect television to online and re-target customers who visited the site. We know exactly how many people went over. So you can do a lot strategically online with microsites and other things that ultimately drive back to your site. Now we know that 50% of our customers go to our website before they even go to a retail store. So for us, in the absence of carrier stores, it's a really important portal to retail. So that's why we exist a lot online.
Mr. Bloom: One of the questions that I'd love to hear you all answer, though, is the question of scale. Playing devil's advocate in favor of TV, digital media might be more detailed, but it can be incredibly expensive and complicated. TV's still quick and easy, and it still gives me scale. You talked about event TV or appointment TV. Is that anywhere close to being replaced for any of you?
Mr. Sullivan: I can't see it. TV is where the big numbers are, as you said. I mean, that's where the scale is, that's where America still goes for its entertainment. It's foolish to think that things are going to take off virally, or they're going to hang together, without some overarching medium that holds everything together, and I think that's what television does. It's not to say any campaign has to exist with television, but if you want to build a brand, you want to build brand credibility, and you want to make an announcement that has some immediacy and some reach, you still have to use television.
Our business, insurance, doesn't have a tangible product, so what television does for us is allow us to establish an emotional connection with a consumer, sight, sound, emotion, and nothing else does that -- yet. We're experimenting with some things, but TV is still a very powerful tool.
Ms. Rooney: You launched your recent "Responsibility" campaign with a 60-second spot, and then from there you had as part of the plan, I would imagine, the user-generated-content component of it online.
Mr. Sullivan: We continue to use TV on a fairly wide scale, but what we've just done is launched a three-pronged approach, and the program is called ResponsibilityProject.com. Given the whole message of our campaign about personal responsibility, we got thousands of e-mails and letters from people. So we started this thing called the Responsibility Project, and we just launched it last month. And it's a website on which we are putting every two weeks a new, short feature film. Now, does it sell car insurance? No, not directly. But what we do say is: We hope you enjoy the content on this site, and if you want to know more about us, click up here, and we'll tell you more about us.
Mr. Bell: We try a little bit of everything. One of the things that Microsoft likes to do across all aspects is maybe put a lot of chips on the roulette table and make sure that we've got things covered. I think technology will help television, I really do. I don't know if it will be in five years or in 10. What I do know is that we get reports from Universal McCann, and they say television works. Now, again, they're the ones who are proposing that we buy large amounts of television. But, you know, I think that the data is pretty good.
'We put a lot of chips on the roulette table and make sure that we've got things covered.'
-- Jeff Bell, Microsoft
Mr. Sullivan: The third part of our Responsibility Project is, to your point, made-for-TV movies. We're just finalizing a network partnership to produce some very high-quality movies for TV, for the goal of appointment viewing by the entire family. So people have different interests on the websites; some of them like some of the short films, some of them like others, some of them don't like any of them.
Mr. Bell: We're very excited about doing something such as you have, but for a client. Microsoft Digital Advertising Solutions with MSN has a new program called "In the Motherhood," and quite frankly it's become somewhat of a phenomenon. It's sponsored by Sprint and by Suave, but it's very low-key. Partly because of the writers' strike, they got super-high-quality talent to make a situation comedy that is about being a mother, and the scenarios, though, are driven after the original impetus by the input from people visiting the site, all of the mothers. Then they make the great stories into the situation comedy, with professional actors and actresses. That's very interesting for me, but it only lives on the web. I mean, that is a 10-inch experience right now. But there's no reason why it couldn't be a 10-foot experience in the living room, and it would be higher-resolution, more engaging for everyone.
Mr. Liodice: One of the fundamental questions here that we've been trying to answer is: Does TV work? And the answer is: Of course it does. It's just not the only game in town anymore. And because we have so many more tools and so many different ways to approach it, we can be more creative. The whole landscape has changed, which is going to make television more effective, and every other medium more effective. Marketers have to be savvy enough [to understand] what to do with all of this stuff.
Mr. Bloom: I guess you could argue the biggest technological shift is addressability. Because that's the moment of convergence, right? That's the moment at which it really does interesting things in terms of your talking about the cultural importance of having everyone sit down in the same room. But if, as a marketer, I don't actually need you to watch the same thing at the same time and I can address it, do you need appointment TV anymore? The business model at that point completely shifts.
Mr. Bell: We're really interested in this concept of multiple decision makers in the household and having addressable information so that it is separate and unequal depending on how you are targeting and then communicating to different members of a household.
'The television industry is trending in the right direction.'
-- Bob Liodice, ANA
Mr. Bloom: But you were actually just saying something else which was interesting, which was that you actually wanted some kind of common experience, which I think is really interesting from the point of view of if you imagine a world in which you can get one-to-one addressability, which is sort of like the internet on TV, essentially, you actually as a marketer are still saying you don't totally want it.
Mr. Bell: Well, I'm more of an "and"; I'm on the strategy of "and."
Mr. Bloom: So that really speaks to the fact that there will be a future for a broadcast medium in that you actually want a common experience.
Mr. Bell: Well, for instance, if I were managing Nike or Adidas, I know that the parents need to know what is considered to be cool by younger people, right? But it can't be threatening or in some ways harmful in their minds. There has to be some element of understanding that, yeah, that's what's hip and cool today. They have to engage that in some way, and there has to be an acknowledgement between the family members that that, in fact, is the case.
But I just want to go to the user-generated content for just one second. The one thing that I will say that is interesting about YouTube is that from a younger generation's perspective, they simply consume things very differently. I mean, my boys are 18, 15 and 11, and they hear by word-of-mouth about things that they should spend 30% of their time on, but that's what they do. They go and they search for a piece of content, then they yell in the house for someone else to come and view it. I will tell you that that 10-inch experience on a flat-panel PC screen -- you can't imagine them wanting to tolerate that from 11 to 21 to 31 to 41 going forward. But the notion of either hearing about, or being told about in some way, shape or form, content by other influentials, they're going to want to be able to find it, get it and bring it in right now.
Mr. Bloom: But I find it fascinating that you hear that from everyone today -- this whole notion that somehow production values protect these media. I'm not sure.
Mr. Stohrer: I've had the opportunity to work with Spike Lee. Spike Lee is a storyteller, and he'll take a shot, and he'll say, "I want to tell a story, and whether that story looks grainy, whether that story looks polished, whether that story looks cinematic doesn't matter."
Mr. Bell: That's interesting. What I was going to say is that I think that different genres, though, have different rules of engagement. My 11- and 15-year-old boys, they're watching "America's Funniest Home Videos" one at a time. Or it's the music videos; they just get them on YouTube or on other sites. But those are things that they're demanding and they can consume in very, very short segments, right?
Mr. Stohrer: Think about what you just said. You've got a certain set of experiences that appeal to the -- we'll call it 12- to 21-year-olds. How does that shift over the course of time? We're talking about life-cycle management, where the viewing habits are obviously going to change. So what may appeal to the younger segments, where they may not even be interested, really, in television but really are going to go to other types of screens, as they get older, their patterns are going to shift. In totality, when you think about it, has the marketplace for television really changed that much?
Mr. Bell: I don't know if it has changed in terms of things that are desired. For instance, I just talked about "America's Funniest Home Videos"; "Candid Camera" would have been another one back in the day. So now there is another version of that. For us, an evergreen category for television are game shows. And we're already beginning to engage in allowing people not just to observe others playing those kinds of games but to then play against the entire community. I mean, we have 10 million people on Xbox Live today. What we tend to talk about is the placement of a lot of content in the cloud, and instead of convergence into a single device, it's more that every device has access to your digital rights, to your community, to your personality, to your addressability and that it knows you, and being able to access that -- that is what software does. I mean, that's what we're interested in trying to help facilitate.
Mr. Sullivan: The fascinating thing to me about all this stuff is that 10, 15 years ago, the three of us would have been limited to essentially the same stuff even though our products are wildly different. And now look at all the things that the three of us have been talking about in terms of variables that we can dial up, dial down, play with, you know, toss out because it doesn't work. I mean, it's remarkable to me, that change.