The TV Issue

For Top CMOs, TV Remains Surest Bet for Advertising

Yes, They're Still Bullish on Medium, but Marketers From Subway to Target Explain Why They're Viewing It More Broadly

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Best Buy shifted millions of dollars into TV starting last year and went big in the Super Bowl for the first time. Century 21 already has committed to next year's game. Beam Global Wine & Spirits recently made a bold return to TV following a few years' hiatus.

Keith Weed
"Globally, TV viewing is actually up, although there's been an explosion in other forms of media engagement."
Marc Pritchard
"TV will continue to be an essential part of our marketing mix to reach people with our brands."
Wendy Clark
"Advertisers are not interested in single-medium conversations anymore."

While media splinter exponentially and digital explodes, CMOs of some of the world's-biggest marketing companies remain committed to, and continue to invest in, that advertising stalwart -- TV.

"It's hard to argue that from a media perspective, on a brand-awareness scale, that there's a more efficient play to do than TV," said Beam Chief Marketing Officer Kevin George, whose company a few years ago pulled most of its U.S. TV advertising as it pursued a word-of-mouth strategy to push its brands, including its flagship Jim Beam bourbon. But starting in 2009, the marketer went back on air in a big way, with ads running 365 days a year.

According to the latest research from eMarketer, out last month, advertisers are spending more than ever on the broadcast networks and cable, around $60.5 billion on commercial time this year, making TV the richest media segment, with 39.1% of all ad spending, up from 38.6% in 2010.

So what's going on in the minds of senior marketing leaders? How and why are they using TV now -- and where do they see it going? Hint: They're still bullish on the medium, but viewing it more broadly.

"Globally, TV viewing is actually up, although there's been an explosion in other forms of media engagement," said Unilever Chief Marketing and Communications Officer Keith Weed.

With 2 billion consumers globally, Unilever is still a mass business, and to engage the masses, TV remains the company's primary medium. But as Ad Age spoke to marketers from every sector for their thoughts on the channel, it became clear the way the definition has expanded. Consider Mr. Weed's next words: "TV is alive and well. And the moving picture certainly is. People are not sitting in front of computer screens reading pages and pages of text. They're watching moving pictures."

Indeed, these days marketing leaders share a view of TV as a part -- a big part -- of a larger whole. "TV will continue to be an essential part of our marketing mix to reach people with our brands," said Marc Pritchard, global brand-building officer of Procter & Gamble Co., the biggest TV spender in the U.S. and globally. "People today don't just receive information from one source, so our brands develop ideas that are effective across a range of media types."

To capitalize on an increase in TV viewership, "as well as engage with guests who choose to view programming via other channels -- computers or mobile devices -- we've created cross-channel campaigns," said Target Exec VP-CMO Michael Francis. "For example, our 'Life's a Moving Target ' campaign has several applications, including online banners, TV rebroadcast and mobile ads, as well as traditional TV spots."

Wendy Clark, senior VP-integrated marketing communications and capabilities at Coca-Cola, said she's no longer having TV-only conversations. Instead, they are more likely to include a discussion of film that can be leveraged on TV, internet and mobile. "Using sight, sound and motion is still one of the best ways to tell a story, and that's why TV endures," Ms. Clark said. "TV is a viable medium and an important part of our mix, and it will continue to be," she said. "But advertisers are not interested in single-medium conversations anymore."

Mr. George said that Beam similarly is not simply running TV spots -- it's trying to get the most out of them by incorporating them into its digital strategy. In fact, one of Beam's biggest TV plays has its roots online. Starting last year, it began partnering with ESPN on a web series called "The Next Round -- Served Up by Jim Beam." Portions of the program are then aired on ESPN's "SportsCenter." At retail, Beam uses ESPN logos in store displays. And on May 17, ESPN2 will air a full-length, half-hour episode twice. "They're taking digital properties and moving them to TV, which is a big win," Mr. George said.

The proliferation of time-shifted and online-TV viewing has prompted time-sensitive movie-studio marketers to rethink the programs they buy, but it has yet to significantly affect their media mix. Despite anecdotal evidence that Twitter and Facebook can help launch a movie with a strong word-of-mouth campaign, TV is still king for Tim Palen, president-marketing at Lionsgate films.

A midsize studio player with hit films such as the "Saw" franchise and Tyler Perry's "Madea" movies, Lionsgate has increasingly relied on live events and sports to anchor its marketing strategy and even affect the scheduling of its movies. "Traditionally for us, TV has always been the cornerstone of our marketing plan. It was 10 years ago and it still is today. There are a lot of new tangential elements that have been added to the playbook that weren't around 10 years ago like online. But it's just as strong as it ever was, if a little different." For most marketers, of course, the goal is to be everywhere consumers are -- and that necessarily includes TV. Even as it doubled its digital spending last year, Unilever increased spending on TV, Mr. Weed said. "I'm interested in fishing where the fish are," he said, so Unilever will keep spending on TV even as it tries new media such as iAd advertising on the iPad. Combining TV and digital often delivers the best results, he said, pointing to the 2010 launch of Dove Men+Care in the U.S. with a Super Bowl ad followed by heavy digital spending on sports and other sites the following Monday.

Clearly, Best Buy believes in TV. The brand ran its first Super Bowl in 2010 and has publicly discussed shifting more money into the medium. "TV takes consumer head space unlike any other medium," said Drew Panayiotou, senior-VP U.S. marketing. "There are still programs that drive an amazing level of engagement, whether it's the Academy Awards or the Super Bowl.

Drew Panayiotou
"What was presented to me was a video plan, not a TV plan. I was thrilled to hear those words."
Michael Francis
"Our 'Life's a Moving Target ' campaign has several applications, including online banners … and traditional TVspots."
Mark Addicks
"You need to visually show the benefit, because you're probably not going to have the time to explain it."

Still, for all his belief in TV, Mr. Panayiotou wants the retailer to be media-agnostic. "We wanted to move media where it made sense, based on the marketing objectives we had," he said. "We gave a pretty big warning to our agencies that we wanted media-agnostic thinking and big marketing ideas."

That led to a centrally managed account at Publicis. The team on the business includes people from Publicis shops ranging from Razorfish to Starcom. "What was presented to me was a video plan, not a TV plan. I was thrilled to hear those words," Mr. Panayiotou said. "We don't want to get locked into a slate of thinking about TV in just one box. Our ability to do video programming rather than TV programming is a big step."

As TV's place in the media mix has evolved, so, too, has the definition of effective messages. With 15-second spots on the rise, ads require more clarity, marketing executives said. Brands need "to be more iconic, more visually arresting," said Mark Addicks, CMO of General Mills, which spent more than $800 million on the air in 2010, about 90% of its total measured media spending, according to Kantar Media. "You need to visually show the benefit because you're probably not going to have the time to explain it," he said.

Subway Advertising Fund Trust CMO Tony Pace describes the sandwich chain's TV strategy as a mix of high-profile plays alongside efficient buys. "We believe in a multilayered approach and are always looking to add layers. You need to be growing and you need to be smart, not just about today but tomorrow."

Subway's ads have appeared during high-profile shows like "American Idol" and during much-watched sporting events such as the NCAA's Final Four games. "You have to have tremendous reach when you're a marketer our size in order to drive business. What we do different is that we tend to create messages that have some longevity," he said. One of those messages is the fast feeder's three-years-running "$5 Footlong" campaign, which Mr. Pace said has been "tremendously successful."

So what does the future of TV look like to CMOs?

For Subway, Mr. Pace said the company is "definitely going to evolve our traditional media strategy," but cautioned that the company needs to read market conditions. "No matter how good the forecasts are, the market is always so different. We're in a good position because of the longevity of our marketing programs. At the end of the day, it's not just how much media weight you have, it's how compelling your message is."

TV has an edge today in terms of measurement and market research into delivering what Unilever calls ROMI, return on marketing investment, Mr. Weed said, but he doesn't expect that to be the case forever.

"I'm more comfortable in making predictions around TV insights than I am on digital," he said. But he added that digital also makes it easier to try an ad or a buy, measure effectiveness quickly and make adjustments. "So I don't think it will be long before we have digital down to a science with the same level of confidence as TV," he said.

Increasingly, Mr. Weed said he doesn't look at the divide so much between TV and digital as between consumers being in "lean-back" mode, passively taking in content and advertising, and "lean-forward" mode, actively seeking out and interacting with content. Unilever brands such as Axe have had success with the latter, using interactive ads and video-on-demand using the conventional TV in the living room too, he said.

Interactive TV, which is now in 18 million households, is particularly compelling to Coca-Cola's Ms. Clark. Unaided brand awareness of interactive TV spots vs. noninteractive TV spots is 130% higher, she said. But there are pitfalls. Ms. Clark says the onus is on marketers to create an "elegant solution that makes sense to the story being told. It can't be clumsy."

From a global perspective, Ms. Clark said TV is included in the media plans of all of Coca-Cola's top 22 markets. That said, in some it's beginning to play a lesser role, as attention shifts to media that didn't exist 10 years ago.

Around the world, Ms. Clark said Coca-Cola is on the lookout for "non DVR-able" programming. One example she gave of compelling programming was a Brazilian reality program. The "Big Brother"-style program took Coke away from the cast for a couple of weeks and then brought it back, complete with a big celebration. All told, the storyline led to 19 minutes of programming content that revolved around Coke. The brand snapped that up for the equivalent cost of a 90-second spot.

Mr. Pritchard said that because people now have "more choices than ever for information and entertainment, the TV industry must adapt to these changes by providing engaging, relevant and appropriate environments for content for brands. As an advertiser, we want options that let us not only share brand messages, but engage with people in a more dynamic and interactive way."

TV, he said, "brings people together, and it will remain in our marketing mix." He said P&G -- even with its last soap opera off the air -- will continue to invest in TV content, such as through its production of Family Movie Night productions in tandem with Walmart.

Best Buy is experimenting with addressable TV, targeting specific slices of consumers. Mr. Panayiotou said the program allows Best Buy to target customers who have just bought a puppy, for example. "We want to do that because we know that people who buy dogs tend to take an inordinate amount of pictures in the first 90 days," he said. "We'd love to provide them the opportunity to buy a camera."

Mr. Francis said Target , for its part, is carefully monitoring media evolution as it considers future media strategies. Take time shifting, for instance. "We know time shifting is up 18% in the last year," he said. "Brand- and media-integration tactics enable Target to break through the increasing effect of time shifting on TV advertising. For example, we recently partnered with Bravo to host an episode of 'Top Chef' in one of our stores. To complement the in-program branding, we produced custom ad spots starring 'Top Chef' host Padma Lakshmi. The combination of both tactics allowed us to engage our guests during the show and use the ads in off-air channels such as YouTube and online rebroadcasting."

And, he said, "we believe addressability is the next generation of advertising and marketing, and we are working on ways to engage with guests in exciting and unexpected ways. Target uses a variety of techniques to engage our guests, including digital-marketing tactics that enable us to customize content for guests."

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