Monday, April 14, 2008

Declining Broadcast TV Audiences Mean a Move to Alternative Advertising

By Chris Haak


Although network and cable television viewership steadily declines as more and more alternatives are pulling consumers' eyeballs from their TV sets and to things such as the Internet or even mobile devices, the 30-second commercial is still far from becoming completely obsolete. However, in a world where television advertising is no longer the only option, many car companies are reconsidering the way they apportion their advertising energy and dollars. Some are cutting back their TV advertising budgets dramatically, while others are focusing on more specific TV promotions instead of the older shotgun approach that had been favored in the past.

Audi paid a lot of money to produce and broadcast its "old luxury" commerical spoof of The Godfather to advertise its R8 sports car, but the company's objective was not necessarily to sell more R8s, but to get Audi "into the conversation in a much bigger way." To that end, Audi saw its website traffic increase nearly fourfold in February, and saw floor traffic at US Audi dealerships increase by 20% in February 2008 compared to February 2007. However, other than the big splash that a 60-second Super Bowl commercial brings, event-related marketing allows advertisers to tailor their message to a specific demographic within those shows' audiences.

GM has been shifting more advertising dollars from "normal" programming into event programming, such as the NCAA basketball tournament. Betsy Lazar, GM's executive director of advertising and media operations, said that event programming tends to be watched live more often, so is more "TiVo-proof." In other words, when you're watching an event live on television, you can't skip the commercials, and advertisers are clamoring for ways to keep potential customers' eyes on the screen during commercials.

Significant portions of advertising budgets are being shifted to online media. While television commercials still maintain their position of dominance for the time being in most campaigns, marketers are taking a much more integrated approach to other components than they have in the past. For example, the website will maintain the same look and feel of the print and television advertisements, and print and television campaigns usually want the viewer to visit a website for more information or exclusive web-only features. Advertisers love online marketing for the powerful tracking capabilities inherent in the medium; while television (particularly "normal" scheduled shows such as sitcoms) takes a more blanket, shotgun approach, online campaigns can be tailored even to individuals. Suppose the TV advertisements for the Pontiac G8 feature the car only in black but a certain customer isn't interested in black cars; moving to the G8 section of the Pontiac website allows the user to see the car in white, grey, red, or any other color. Furthermore, after gleaning the visitor's postal code, the website can calculate any special offers quickly and without any cost to the company. In contrast, regional special offer promotions on TV are usually given in a different voice at the end of the commercial or are expensive to individually create.

We haven't even spoken about product placement yet, and its growing prominence in today's media marketing environment. When viewers are able to skip commercials with minimal effort, increasingly frustrated advertisers are forced to subtly (or not-so-subtly) place their products into the actual content that viewers are watching. Product placement could be as subtle as the brand of soft drink being consumed by an actor, to the near-infomercial that the recent Knight Rider made-for-TV movie became for Ford. In case you missed Knight Rider, KITT itself is a Ford Shelby Mustang GT500KR, and literally every passenger car during the movie was a Ford product. If that wasn't enough of the blue oval, every commercial break featured a commercial for a Ford product in the first commercial of each break, usually that tied in to Knight Rider. So, one could say that not only did Ford place its products into the Knight Rider movie, but the Knight Rider movie also placed its content into the Ford commercials. I'm not usually one who notices every commercial that I watch (especially since I move through them at warp speed when watching programming on my DVR), but the Ford product placement certainly caught my attention. However, although I'm not in the market for a new car at the moment, it also did not compel me to rush to my local dealer to drive the latest Ford models (though I did visit their website several times in a futile attempt to win a GT500KR - that cross-platform thing again).

One of the latest frontiers for advertisers are mobile platforms. Yes, they want to put ads on your cell phone. Also, the Ford SYNC system, which I experienced for a week in a 2008 MKZ, has the capability to place location-specific advertisements on the vehicle's navigation screen. Looking for a pizza place? "There's one a block away, but HOW ABOUT THIS ONE FOUR BLOCKS AWAY THAT PAID US FOR THIS PROMOTION??" Now, SYNC does not currently do this, but given the pervasiveness of advertising in 2008, do you really think this untapped revenue stream will remain untapped for long?

The advertising environment - indeed, even the television environment - may be dramatically different in a few years as advertisers move from traditional TV advertising into other media. Network and cable broadcasters may be forced to compensate for lower revenue by cutting back on production expenses (and therefore programming quality). Meanwhile, advertisers are probably salivating at the prospect of putting their messages instantly into your pocket or purse (on your cell phone) or two feet away from you (on your navigation screen), and there's not much that we as consumers can do about it.

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