Exploding TV: McKinsey as doomsayer
Ad Age reports that McKinsey is singing a requiem for TV advertising:
McKinsey & Co. is telling a host of major marketers that by 2010, traditional TV advertising will be one-third as effective as it was in 1990.That shocking statistic, delivered to the company’s Fortune 100 clients in a report on media proliferation, assumes a 15% decrease in buying power driving by cost-per-thousand rate increases; a 23% decline in ads viewed due to switching off; a 9% loss of attention to ads due to increased multitasking and a 37% decrease in message impact due to saturation. . . .
According to the report, real ad spending on prime-time broadcast TV has increased over last decade by about 40% even as viewers have dropped almost 50%. Paying more for less translates into a much higher cost-per-viewer-reached — a trend also true in radio and print.
And how stupid are the advertisers who kept paying for those increases? Well, Ad Age points out that Bob Garfield’s chaos scenario is at work: The new media aren’t ready for dollars shifting from old media. Shame on us. Ad Age continues:
Thank a combination of older technologies such as cable, PC computers, cellphones, CD players, VCRs, game consoles and the internet, along with more recent ones — PDAs, broadband Internet, digital cable, home wireless networks, MP3 players, DVRs and VOD– for those changes. And teens foretell an even more radical shift in future media consumption, the report points out: They spend less than half as much time watching TV as typical adults do. Teens also spend 600% more time online, surfing the web.According to Forrester Research’s most recent North American Consumer Technology Adoption Study, people ages 18 to 26 spend more time online than watching TV and are adopting new technology faster than any other generation. Because of that, they tend to be more receptive to blog, podcast and mobile-web ads.
If we can give the advertisers what they want — measurement, verification, data — their money will come to us.
Tags: Ad, Exploding_TV
August 7th, 2006 at 6:49 am
The problem is accurate statistics. So long as bots and spiders are spoofed to look like visitors demographics are going to be skewed.
One thing that might help would be the establishment of personal IP numbers. Everybody would get one. Each number would be unique, with the level of personal information revealed set by the user. The basic information would be, “Yes, this is a human being.” or, “No, this is not a human being.”
A person’s IP number would go with the person from ISP to ISP, Internet service to Internet service. Spoofing or faking IP numbers would bear a substantial penalty.
The problem is implementing this scheme. If adopted it would likely take a while.
The alternative is for the ad agency to go with gut instinct. If it looks like a good place to advertise your client’s goods, then see if they’ll take advertising.
August 7th, 2006 at 8:27 am
Alan
Good points, but in reality the metrics of advertising are not ironclad now. Most of the efforts are swags with lipstick on them. When the herd changes direction and the followers in the advertising industry decide to go online then the sea change will occur.
Also, the senior partners of the advertising and Fortune 100 are not of the internet generation, so when online is pitched to them, they have a hard time seeing the potential. It is easy to throw a few dollar at online marketing, but to make it a focus of the campaign takes a new breed of business managers and advertisers.
August 7th, 2006 at 10:56 am
I loved seeing Jeff’s MSNBC spot featured as his head shot next to a post about the death of mass media. Very funny stuff!
August 7th, 2006 at 11:17 am
What a surprise! Another analyst predicting the death of mass media! Are there any hard stats whatsoever to back up the McKinsey claims of attention loss, saturation and DVR zipping? I thought not.
Good luck trying to get the online community to agree on a uniform standard for measurement, affidavit of performance and reliable data on ROI. Right now, there’s no business incentive to do so - the money’s coming their way without any of that, so why spend the money?
Agencies and their clients are sheep - if enough trade press articles trumpet the new media as the place to be, they will be there, regardless of lack of standards by which to measure success.
August 7th, 2006 at 11:57 am
Jeff, I agree with your points here, but unfortunately not the route you took to get there. The fact that McKinsey makes prognostications, or blesses some received wisdom, doesn’t mean a darn thing, and often indicates nothing more than that the smart people at McKinsey have identified an opportunity for themselves to make piles of dough by positioning themselves as authorities. After all, the company most full of McKinsey alum, and most enamored of McKinsey thinking and strategies was… Enron.
Malcolm Gladwell made this case in one of his best New Yorker pieces, “The Talent Myth”:
http://malcolmgladwell.com/2002/2002_07_22_a_talent.htm
August 7th, 2006 at 12:54 pm
New media “not ready,” eh? Then what the heck are we doing f-in around with, imagine this, original content in a broadband environment… silly us.
McKinsey continues to fleece corporate America with their repackaged mumbo jumbo that, heck, any teen could’ve told ‘em two years ago. All they gotta do is… blog.
August 7th, 2006 at 2:16 pm
regardless of lack of standards by which to measure success
I’ll bet my money on Wall Street’s assessment of success.
Paw, perhaps looking at Google vs the NYT’s stock price and revenues over the past three years is the best affirmation that the paradigm has shifted.
CBS’s news audience at this point is probably pretty much in nursing homes. I haven’t seen Time or Newsweek for years outside of a dentist office. Scandals and insipid or blatantly agenda driven news reporting is turning off readers and viewers. FOX is the only stellar revenue and audience performer. The hacks in the larger lefty pc MSM would rather fall on their swords, stick with their drivel, and lose revenues than remake their product into something with more depth and balance.
August 7th, 2006 at 3:50 pm
As far as ad agencies are concerned, venues like the web, cell phone messaging or whatever are the bailiwick of planners and the Media Department. Creative folks will happily produce work in any format for any medium, and already are.
Paw: “Agencies and their clients are sheep - if enough trade press articles trumpet the new media as the place to be, they will be there, regardless of lack of standards by which to measure success.”
Clients like to see hard data before they commit to, or even continue, any media spending. It’s not just “Cool, let’s do it.”
August 7th, 2006 at 4:34 pm
The link in your article does not seem to connect to the right story….
August 7th, 2006 at 5:50 pm
Measurement? Verification? Data? Accurate statistics?
By this, do you mean that the ability to track and report on campaigns online is not as good compared to TV? Am I missing something?
What we have here is a lack of quality inventory online and too much fear/lack of understanding/laziness by the media buyers who are spending the cash.
As I mentioned in
TV’s power takes another beating, the only thing saving TV is the fact that there isn’t enough targeted inventory available online. Folks like FeedBurner, Adify, FM Publishing, 9Rules, and other emerging (mostly sell-side) networks out there in the blogosphere must be very happy.
August 7th, 2006 at 6:53 pm
Here is the ad agency point of view. I interviewed Robert Birge - newly appointed Chief Marketing Officer for IMG and previous managing director of TBWA \ Chiat \ Day New York the other day. See the first two questions for his point of view on the impact of viral media and blogs on traditional media spends….among many other things. http://montysbox.typepad.com/excuse_me_while_i_digress/2006/07/5_questions_wit.html
August 7th, 2006 at 10:28 pm
I think here in Brazil we can observe this trend becoming real too.
August 7th, 2006 at 11:58 pm
TV is quickly going to the net sooner than later .. this McKinsey report should server as ad exec’s QED….
August 16th, 2006 at 6:18 am
hi jeff, the link to the mckinsey piece you´re referring to is broken..?
August 21st, 2006 at 12:41 am
[...] It’s only a matter of time until advertising models are developed to monetize this future of non-programmed content and That’s when the great media exodus from TV to Web will occur. [...]