al berrios & co. CONSUMER STRATEGIES REPORT 05.13.03: The Future of Media Planning and Media Marketing

[1] UPDATES: Exec Summary, New Sections, AIDS Walk
[2] MEDIA: The Future of Media Planning and Media Marketing
[2.1] TRADE EVENT: The Gone From Home Network Premiere
[2.2] TRADE EVENT: Upfront Television Advertising Summit
[3] TRADE EVENT: Bernard M Baruch Distinguished Alum Tribute Dinner

"for if one considers everything well, one will find something appears to be virtue, which if pursued would be one's ruin, and something else appears to be vice, which if pursued results in one's security and well-being." - Niccolo Machiavelli, "The Prince"

Good morning execs,

What an overloaded week. Recently, I attended two very important meetings on media, the Upfront Television Advertising Summit by TelevisionWeek and Advertising Age Magazines and The Gone From Home Network Premiere by Clear Channel Advantage, where I had the opportunity to speak to media executives and hear important presentations on the state of reaching consumers. Today's REPORT focuses on my assessment of what's going on, why, where it's all going, and what you should do about it.

Starting next week, the sections in this REPORT will be renamed, and we will be sending you fewer, more relevant, sections via email, in continuing efforts to make this publication more valuable to you. Last week, we streamlined our practice areas, and this change further refines the delivery of our insight. As always, all feedback is welcome.

Next Sunday, May 18th, I will be participating in the GMHC AIDS WALK. If you or your company don't have any immediate affiliations that you'd be obligated to walk for, you're more than welcome to join me to walk with my firm in the name of AIDS research, prevention, and curing. With all the hullabaloo about SARS, we've forgotten our own very important battles here. I'm not asking for donations, just your presence.

Enjoy your report!


The Future of Media Planning and Media Marketing

Skip to section...
> A Realignment of Media Budgets?
> The Real Problem
> National vs. Niche
> Playlist Planning
> A Case For The Internet
> Rebranding Content For Value

Have you heard of Clear Channel's bold move to sell itself as a "Gone From Home Network?" They claim that too much (90%) of the media budget is given to a medium (television) that consumers spend less than 20% of their time with. Of course, 80% of consumers spend their time away from this medium, so naturally, since Clear Channel has all of the media assets necessary to reach these consumers away from home, media buyers should rethink some fundamentals to reach consumers through them.

According to media economist Jack Myers, Clear Channel did something like this before, but messed it up. Their attempts now are irrelevant to media buyers because Clear Channel still can't match the national reach that broadcast television can. I agree, but Clear Channel doesn't have to reach 106.7 million households to be an effective alternative to broadcast TV. Media buyers aren't going to see Clear Channel as their only source, but one strong leg of a non-TV-based national campaign (which when complemented with national and local newspapers and magazines, can theoretically replace television for reach at a fraction of the cost).

Based on Census data, (which I myself use frequently), Clear Channel points out that consumers have increased the amount of trips they take per year by 63% in the last 20 years, making their media assets a logical choice. And based on futurist Watts Wacker's assessment of society, because mobility has become an ingrained lifestyle for consumers, (in the same way consumers have a professional life, a personal life, and a social life), reaching them away from home makes sense. And let's not forget, Clear Channel is so big, they're constantly being scrutinized by regulators, limiting the ways in which they can exploit their media assets.

A Realignment of Media Budgets?

Media executives have been discussing revolutions in broadcast for over two decades, (first cable, then VCR, then internet, then digitization, now TiVo) with very little headway in terms of how media is sold. And in all the hubbub over television vs. everything else, no one seems to care about how consumers want to be reached. al berrios & co. looks at how consumers consume media, and as a voice for consumers, we endorse the Clear Channel way of thinking, that reaching consumers away from home will ultimately move more product than trying to reach them predominantly via one medium. In research conducted by al berrios & co., we discovered that an astounding 61.03% of youths 16-24 go partying, clubbing, or dancing on the weekends (starting Friday, and skewing more towards partying as they get older) vs. 4.41% that prefer to "stay home/relax". Suffice it to say that a realignment of budgets are in order.

I know, this won't be happening overnight. At last week's Upfront Summit, the broadcast panelists seemed pretty much nonchalant about any serious threats to their national reach. And this sentiment was just towards cable and syndication platforms, also television-based. This sentiment has been reinforced as excess supply of ad units and complexity entered the selection of cable and misunderstanding entered syndication. Last week, I posed solutions to upfronters - for them to re-jigger schedules and limit supply of ad time to capture audiences at different times of the day and still maintain profitability. This is because there's so much research that indicates consumers just aren't watching television when you want them to be anymore and as PVRs continue to infiltrate U.S. homes, it will no longer matter when you schedule programs. And as consumers reduce their time in front of the television set, change their schedules to not coincide with prime-time, and prefer their content to be delivered with more relevancy, national broadcasters cannot continue to remain nonchalant.

The Real Problem

TV still works, though, so media buyers, who are increasingly being held accountable for their performance, and still get compensated partly by percentage of total budget, aren't really that enthusiastic about unproven alternatives to television. And clients aren't in the business of media innovation; they're in the business of selling product. On more than one occasion, I've had clients tell me personally that they don't even believe in branding or awareness, they just care about response and transactions. In order for TV to stop being seen as a base for the rest of a national media plan, clients must see the results (including cost efficiencies) of a non-TV-based national campaign, instead of just metrics to justify why it makes sense, while media planners must convince marketers to compensate them for their work, and completely doing away with percentages of budget.

National vs. Niche

The media complexity issue is perceived as the major reason for selecting a national (read - shotgun approach) platform over niche vehicles. Although more cost effective, choosing niche is like having to read the equivalent of an entire set of encyclopedias every day to make a choice on optimal media mix market by market - and the grunts stuck with this chore are less experienced entry-level planners. And if all media is equal (read - a commodity), offering the same consumers, then the determining factor for an advertiser interested in reaching consumers on a tight deadline and tighter cost controls (for in-depth research of alternatives), is a relationship between them and the media company (as we analyzed in our comparison of a perfect market with creative last week). These relationships aren't had by the folks doing the research, but by the senior executives too busy to do their own analysis of the media environment, who usually stick to what worked in the past. So if niche works best today because media (and consumer attention) is so fragmented, how can clients reach consumers effectively without increasing the cost of researching niche?

Playlist Planning

As Mr. Wacker eloquently observed at Clear Channel's upfront, this is truly a defining age for society - one in which we judge our neighbors by what media they consume (as opposed to the stuff they have [i.e. did you see that show? did you read that article? vs. where do you live?, what kind of car do you have?). This presents the case for a world where playlists (media neutral software consumers control) will neatly organize the media we consume and of course, at what time (a la Microsoft Media Player). No longer would it be possible to reach consumers without getting on their playlists, which consumers authorize to locate content and programming that they specify, for anytime time they want to enjoy it. As David Verklin, CEO of Carat North America (a pretty big media buying agency) incessantly proclaims, media is increasingly becoming blurred to the consumer, where they no longer rigidly distinguish between broadcast, internet, or print. So the key in reaching them will be in skewing the reach + frequency formula towards frequency.

But as this day is still some time off, the transitional solution is guides and search appliances. If you've got digital or satellite television, then you've also got the ability to scroll through lists of programming to find programming you want to see. If you use the internet, same thing. TV Guide exists because audiences appreciate anything that can help them reduce their selection time and maximize their satisfaction. As Google has proved, the information isn't as important as the ability to find it. And as we quickly surpass that 1000 unique channel mark, marketers will have to optimize their media plans by including these guides and search appliances. Just look at how TiVo is reaching out to marketers. Playlist planning is already here, and it garners more response than traditional media planning.

A Case For The Internet

Consequently, because playlist software will inevitably require consumers to utilize computers more, and the optimal format for playlists is digital (thanks FCC, for forcing all broadcasters to digitize), I present a solution for television broadcasters to effectively compete with a gone from home network - the internet. As a medium most preferably accessed indoors in front of large screens, it has the potential to make consumers more involved and stay tuned in longer by increasing the utility of both. TV folks have known for years that viewers log on while they watch, however, the full possibilities of this media-juggle haven't been exploited because it is believed that pumping content via the internet doesn't make sense until broadband becomes more widespread and fears of piracy subside. But as we've discussed before, broadband begets digital technology, and digital technology begets easily manipulated content, which consumers love. And when all consumers can manipulate content, piracy, in the form it is in today, will not be as big a problem because there's limited value in a consumer owning content.

If live entertainment, radio, and OOH media can be effectively combined to increase the value of a marketing message, so can television and the internet be combined to supplement your message to consumers.

Rebranding Content For Value

But in order for a TV/Internet strategy to add value, networks require additional consumer branding. Increases in distribution are no longer the key to increases in ratings and share. In a world of 1000 channels, where consumers evaluate their viewing choices scrolling through on-screen and online guides, they'll increasingly stick to familiar brands, brands that offer them pre-packaged programming "value meals" that they can count on to save them time during their selection process. But how does a media company effectively use their limited promotional budgets amidst a growing clutter of media choices to turn themselves into a media brand? Media is a commodity, but it's only a vehicle for content, which also makes content a commodity. Therefore, media companies have to do a better job of presenting their content as valuable to consumers by:
a) segmenting your audience and

producing content that is:
b) of high quality (well written, directed, or produced)
c) innovative (fresh formats),
d) utile (delivers relevant content to the viewer),
e) satisfactory (that will result in repeat consumption),
f) convenient (at a time they prefer, not you)
g) limited (so that syndication and repurposing doesn't erode interest, because although syndicators love to claim that syndication audiences differ from first-run audiences, the fact remains that continuous playing throughout many years erodes audience demand while simultaneously introducing excess supply of ad units into a saturated market)
h) recommendable (whether they're recommending or have been recommended your content because it has all of the prior traits)

In other words, rebrand your network with clear value to the consumer. (i.e. TBS = drama, TNT = action)

As is the case with any market, when too many competitors enter, few ultimately remain. (No we're not there yet.) This is why I believe that media fragmentation won't continue indefinitely. Afterall, there are only so many eyeballs to go around, as well as time in a day to consume all the media we want to consume. And don't forget, consumers lead how we reach them, whether or not we want them to.

> Creative is a Commodity: Nepotism and the Perfect Market
> Broadband: Fast Access + Interactivity are the Gospel in 2003
> Why I Gave Away 200 Japanime Video Tapes
> An Analysis of Consumer Perception
> An Analysis of How Content Became a Commodity
> A Letter To the Upfront-ers: Strategic Recommendations for Upfront Participants


The Gone From Home Network Premiere by Clear Channel Advantage

Hosted by Clear Channel's new cross-platform division at their beautiful Ford Theatre in New York's Time Square, it was packed. Media buyers, TV folks, and even new business folks from event marketing agencies were there. Although they made you stand for over an hour, it was a wonderful networking opportunity, with an unlimited supply of free food and drink. This was Clear Channel's first hosting mistake, as salmon and champagne just aren't the way to start off the week Monday morning. However, they get A's for presentation.

After what seemed an eternity, they opened the doors to the theatre and what ensued wasn't herding, but rather the effect you get when you puncture a whole in a vacuum - people were just sucked right into the very large, very comfortable, and very freezing auditorium. At the end, people walked out with blue lips. Turning on the A/C at full blast made no sense on a cloudy 60-degree day. This was the second hosting mistake.

Anyway, we were treated with appearances by Rick Dees, Rush Limbaugh, Ryan Seacrest, Carson Daly, and a live performance by Jewel (all very entertaining). Intermixed with that was a thought-provoking lecture by renowned futurist (yes, he actually predicts the future) Watts Wacker, and of course, a presentation by Clear Channel Advantage's Don Howe.

Overall, it was a wonderful experience, that if you blinked, you may have missed the message.


Upfront Television Advertising Summit by TelevisionWeek and Advertising Age

I recently covered the business of meeting planning, but I continue to be amazed at the size of some of the venues in New York City. This event was hosted at the Grand Hyatt in Grand Central and in another room I've never been in. This room was also huge, seating about 300 to 400 ad agencies, planners, and TV folks. The food served during breakfast and break were some of the best I've had, (egg and cheese fajitas with pretty damn good coffee, then pretzels and black + white cookies - mmmmmmm). And the networking opportunity was again, top notch.

The discussion was extremely interesting, not because they mentioned stuff you already knew, but because you got to see some very interesting personalities battling it out with their opinions. It was about 10 times better than the AMA panel I attended the week before. Speakers included 18 of the top executives in syndication (including Jon Mandel of MediaCom, and Dick Robertson of WB Domestic Television Distribution), cable (including Steve Grubbs of PHD and Linda Yaccarino of Turner Entertainment Sales), broadcast (Peggy Green of Zenith Media and Dennis McCauley of Univision Networks), and media (David Verklin of Carat and Lori Wellinghoff of Clear Channel Advantage).

Although I hear that different executives basically say the same things every year, I'd attend next year, just for the valuable networking opportunities, and to see how people in these positions think.


Bernard M. Baruch Distinguished Alum Tribute Dinner

All I can say is that the Plaza in New York serves worse steak than the Waldorf. In fact, it may even be the worst steak I ever tasted. But I don't think it was a fluke, my veggies were awful, too. Bernard M. Baruch was a Wall Street millionaire and political power broker in the early 1900s. He endowed his alma mater, City College, and gave it his name. Today, many of Wall Street's most prominent executives are alum of the college, as proven by the drawing power of this event to honor our time's most influential Wall Streeters and power brokers, Sanford Weill, CEO of Citigroup, Michael Roth, CEO/Chairman, Mony Group, and Ernst & Young for their support of the college. Folks, let me tell you, it doesn't get more "big dawg" than this. Call me a rookie, but it's hard not be impressed when you meet some of these guys (I was giggling like a little grammar school kid when I had the opportunity to speak with Weill's personal body guard).

Anyway, the Plaza wouldn't have been my first choice for a venue. Although it was very beautiful, inside and out, and the shopping can't be beat in the area, it was a dinner, and the awful food was a real turn-off. The only thing I ate completely was the dessert, some warm chocolate fudge cake inside a crispy shell - very tasty. Also, it was so packed, at least 5 extra tables had to be set up, cramping the whole room of about 300.

Being in a crowd like this is highly educational though. There are just some things you can't learn in school or talking to your peers:
a) no one cares about qualifications, just who you know - as you may already know, I'm seeking a corporate directorship. What better place to find one than this event? Unfortunately, I could be a Nobel Prize winner and yet, if I don't know the right people, I won't ever get a seat. I've covered nepotism before, but know-how is actually a pre-requisite with this crowd, so a relationship isn't the only thing that's necessary.
b) you're nobody until you make money for somebody else - as obvious as this may sound, the only people who know this are the people in that audience. With the gray and wrinkles to prove their age, they've made enough money for enough people that they've become famous in the right circles. Too many times, as service providers, we approach clients with things to bill them for, rather than opportunities to make money. At the same time, we're approached by prospective employees that don't understand the concept of delivering value, and simply want to work for someone that'll give them a paycheck.
c) everyone discriminates, regardless of what they say - if you've met me, you know I look young, however, that doesn't mean I'm not qualified. My tablemates thought I was a Baruch student when they met me. After informing them that I wasn't, I couldn't help thinking that this must be the perception I give off every time I make a pitch. Oh well, it's just another obstacle I'm going to have to crush.



Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.


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