future of tv advertising (full)

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Resonance Blog - www.resonanceblog.com - Jane Young - [email protected] - Sept 09

Resonance BlogAdvanced communications for growth

8.9 billion. That’s the number of videos US internet users watched last month.

Last month! 99% of those were on YouTube. The average number of videos

watched per person on YouTube was 74.

8.9 billion. It’s a mind blowing figure.

Now let’s think about this for a moment. The vast majority of content on YouTube

is what we call ‘user generated’. All of it is user posted. It’s clear that what we’re

Marketing Week Conference - The Future of TV Advertising

Jane Young

September 2009

I’ll kick of

by showing you a truly remarkable number.

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witnessing here is the democratisation of video online. Most of the videos may

well be daft, highly personal and amateurish, but it’s undeniable that this content

is resonating with the marketplace in a staggering way.

The important thing here is the sheer scale. Technology has a habit of turning

economics on its head. It used to be that value lay in rarity. The less people had

something, the more it was worth. The more people had it, the less it was worth.

Technology, on the other hand, flips this. There isn’t much value in being the only

person with a phone; but the more people have them, the more they’re worth. The

first guy to buy a fax machine must’ve been a total plonker :)

Fascinatingly, this is what’s happening to content. If everyone can upload or

produce content, the aggregate value becomes enormous.

Even if 99% of the content on YouTube is complete crap, that still leaves around

1.2 million videos containing great stuf . If any of us are even contemplating

comparing that level of prolificacy with conventional broadcast numbers, you can

forget it.

Here’s another shocking number that’ll demonstrate why.









To reach the volume of YouTube, the big three US networks would need to work

together on creating original content and airing it for.... 4,500 years!

4,500 years! And don’t forget that those hundreds of thousands of hours of

content were shot, produced and uploaded free. It’s an unbelievable number.

From the time the printing press was invented it took almost 50 years for the

number of books in circulation in Europe to go from next to nothing to 15 million.

We’re only about 3 years into the world of YouTube and online video.

Imagine where we’ll be in 50?

The reality is there’s a massive shift towards participation. Social media isn’t justTwitter and Facebook. It’s ‘an umbrella term that defines the various activities that

integrate technology, social interaction and the construction of words, pictures,

videos and audio’ [wikipedia].

The hugely significant point to note here is that the vast majority of social media

users are producing content.

What’s more, media consumption is internationalising along language lines,thanks to global social platforms.










And it’s emerging internet markets that are leading the way in usage, closing the

gap with developed countries. Asian markets create more content than any other

region. China has more bloggers than the US and Western Europe combined.










A massive opportunity resides in the fact that well over 80% of active internet

users globally watch video clips online; and around 40% have uploaded a clip to a

video sharing website.

Now, the growth of social networks is, as we all know deep down, at the expense

of other activities and media. This swap is most pronounced among teenagers.

Teenage girls now spend 21% net less time watching TV, because they’re busy on

Facebook, MSN and so on. They also spend 31% less time doing their homework :)

Traditional media suf ers disproportionately - TV, books, magazines, newspapers

and DVDs are all sacrificed.

This obviously has huge implications for broadcasters and publishers going

forward, given that teenagers are unlikely to revert to traditional media, as theirbehaviour patterns are established and founded in the digital world. So it isn’t

surprising that traditional media will find itself increasingly squeezed by its digital

‘competitors’ and alternatives.

The other obvious concern we’re all talking about lately is the astoundingly high

level of ad avoidance.








When watching recorded commercial television, just under half fast forward past

the adverts ‘all of the time’. A further 1 in 3 skip the adverts ‘most of the time’.

Only 6% rarely or never fast-forward past the ads. This behaviour is fairly

consistent across all demographics and is certainly not only early-adopter

behaviour. Added to this, 2 out of 3 people in the UK agree with the statement ‘I

actively try to avoid as many television ads as possible’, showing that ad

avoidance in the digital age is a real issue.

But we already knew that. We’ve been turning up late at the cinema to avoid the

ads and flicking past them in newspapers for ages.

Who’ll admit to turning the volume down when spotify ads start?

Has anyone clicked on a banner lately? Or... ever?

Some think advertising embedded in content by means of overlays and top-tail

sponsorship is the answer to avoidance, given that it’s less vulnerable to such

trends. Perhaps the same crowd that think unskippable pre-rolls, mid-rolls, post-

rolls, ham and cheese rolls are the answer online. I’m not so sure, but we’ll come

back to that.

Another interesting point is that 70% of people would rather put up with ads andreceive content for free. This seems like good news. Brands, advertisers and

publishers hear ‘We want ads!’, ‘Give us more ads!’. BUT... are viewers engaging

with them? Are they resonating? Are they relevant, or interruptive?

So long as advertising is impression-based as opposed to impact-based, we’ll

continue to sacrifice user experience. We’ll continue to celebrate 95% failure rate.

Or 5% click-through rate, if you want to put it that way.

We’ve been suf ering from a tendency to spot a space - a piece of ‘real estate’ -

and squeeze as many ads in as possible.










This becomes painfully evident in mobile. We take all our broadcast TV thinking,

make it smaller and squeeze it onto a tiny screen. And that’s on the most

personal device of all time! Not a good idea to abuse trust and compromise

experience to that extent. We’re repeating the mistakes we made with email.










The change is that YOU used to schedule people’s experiences. Now people

schedule their own experiences.

We’ve all gone on about how ‘the consumer is in control’ for years. Well, now it’s a

reality. People schedule their own experiences. The organisations who don’t

realise they need to relinquish control are fundamentally screwed. We (the people)

control now. We schedule now. We converse now. We influence now. Suddenly

media is free, but attention is not. This is flipped from the traditional TV world.

Free media is so powerful now, expect to see loads of ads on the likes of YouTube

that would never be deemed ef ective enough to spend big money on, but that

generate huge views online.

Advertisers must understand that this is out of their control. Once launched, what

happens, happens. One commercial I know of went berserk and ended up withmillions of views. The client called the producer, freaking out about how he

wanted to turn it of , change it, decide how it got used, who talked about it. You

can’t. Once it spreads, it belongs to the community, not you.

This is not a threat. This is a hugely advantageous breakthrough.

I’ve heard a lot of advertising people comment recently that creativity is at an all

time low. ‘Professional’, industry creativity that is.








There’s a very clear reason why this could be true.

The sheer cost of producing a TV show or a fancy advert (or a book or a record for

that matter) - the risk involved if it fails - drives production companies,

broadcasters and agencies to the realms of safety. One thing works, so we do it

again and again. A lot of TV programs and ads we see are the same old, same old,

over and over. How else do you account for Extreme Celebrity Detox? Or shampoo

advertising?

Whether you agree or not that we’re suf ering from a creative slump in the

industry, the truth is, paradoxically, creativity is generally at an all-time high.

What I mean is that we’re witnessing the largest increase in expressive capability

in human history. We may be suf ering from marketing attention deficit disorder,

but we’re in the midst of a communications revolution.

Every intelligent person (and quite a few unintelligent ones) will have a media

platform where they share what they care about with the world. Everyone. 34% of

bloggers already talk about products and services, so imagine the implications for

brands.












Does this boom mean there’s no longer a place for professional production? Of

course not. It means you have a wider, more diverse, more cost ef ective creative

resource and distribution mechanism than ever before.

If this really is a revolution, like the printing press, it doesn’t take us from point A

to point B. It takes us from point A to chaos. The printing press precipitated 200

years of chaos.

This is the Virginia Satir Change Model. You may have seen it before. There are

four basic steps:

1. Status quo - from which point change is inevitable and necessary. It’s just amatter of recognising that the status quo needs to change and then we can

influence it.

2. Introducing the foreign element - something outside the status quo, putting

pressure on the status quo.

3. Chaos - the result of the status quo being interrupted by the foreign element,

causing disorientation. When things are no longer the same as that which we’re

comfortable with, chaos emerges.









4. The new status quo - which requires new learning; new behaviours and new

skills. Gradually, we integrate those skills into our lives as the norm.

We’re witnessing a massive change in equilibrium. The most important

components of advanced economies are now in the hands of the population at

large: human creativity, wisdom and experience.

There have only really been four revolutionary breakthroughs in communications

up until now.

1. The invention of the printing press and Guttenburg’s movable type in the

1400s.

2. Then, about 200 years ago, two way real time voiced based communicationswere born, first the telegraph then the telephone.

3. Then came recorded media other than print - photos, sound, movies.

4. Finally the harnessing of the electromagnetic spectrum to send sound and

pictures through the air - radio and TV.

In the 20th century, media that was good at creating groups wasn’t good at

creating conversations and vice versa. If you wanted to have a conversation, you

had it with one person. If you wanted to address a group, you took the same

message and gave it to everybody - via broadcast or print.










What’s revolutionary about the internet is its many to many pattern. It supports

groups and conversations. What’s more, it has become a vehicle for all other

media. Phone conversations, movies, music, radio, have all migrated over. This

means all media are next door to one-another. People can not only see and hearstuf , they can gather round and talk about it. Audiences can be producers as well

as consumers. We all have the same equipment.

What we’re getting from all this connectivity will be one machine. All our devices

are just little windows. Every screen is just a portal into the One Machine. Some

people call this the Cloud. Yes, we’re still downloading stuf and running software

on our devices, but this will change. It’s already changing. Our devices won’t need

storage and will always be connected. Think of the Cloud as one global computer.

Every spreadsheet, every document, every video will be on the web. More devices

will become part of the web all the time, adding to it. Humans are extensions of

the Cloud. Look at Flickr - where millions of pictures are uploaded and tagged by

individuals, continually adding and linking.

Everything will have connectivity embedded in it. I mean everything. Household

objects, humans. There will be a convergence of the atomic and the digital. The

spectrum of media we see right now becomes one media platform. Copies will










have no value. Media will be liquid. TV, film, newspaper, phone, book, music,

radio, blog - they’ll share more and more in common.

But sharing data is a much bigger step than sharing a page. Total personalisation

requires total transparency.

I’ll quote Kevin Kelly on this:

The study of the great revolutions of the past shows that they occur when

fundamental challenges are faced, which may be a consequence of local or global

processes, to which institutional structures and psychological outlook of the

population has rendered them unable to adapt themselves in the time available.

This is the chaos we’re experiencing now.

About 40 years ago, Toer said, ‘It will be a long time before the last

bureaucratic hierarchy is obliterated. For bureaucracies are well suited to tasks

that require masses of moderately educated men to perform routine operations.’

Bureaucracy makes sense where no radical change is taking place, bit it stands to

reason that a startling increase in change in the environment around us calls for a

shorter life span of organisational forms.




Actually, the role for advertisers and brands has never had so much potential.

Branded applications, content and services all of er massive potential. The

technology exists.








I’m actually working on a new piece of technology geared up to enable this mass

collaboration - that enables brands, agencies and broadcasters to open their

doors to the people. Our aim is to help small companies to act like big ones; and

big ones to act like small ones. Take agencies for example. A small agency using

collaborative tools can tap a talent pool of hundreds, thousands, even millions of

people. Likewise a large agency, who couldn’t normally dream of getting their five

best minds from all over the world in a room together, can virtually get together

and trash things out.

So, fast forward to a world where every pound spent needs to prove a return.

It isn’t going to be about interrupting, or squeezing as many ad spots into a space

as you can. It’s about the opportunity to build tools and platforms and of er

resources to the people of the world.

Think back to the 9.8 billion videos served; and the 4,500 years it would take the

networks to come up with the volume of content on YouTube. Now, consider

scribes.












Scribes didn’t seem slow at writing when that was the only means of producing

written documents or books. It’s only when the printing press came in that the old

method seemed painfully slow. Being a scribe was no longer a valid career when

everyone could do it. The same is happening with newspapers, with some stating

that they own the last printing press they’ll ever buy.










The great news for broadcasters, brands and agencies is that we now have the

capability to ride this wave of change. Some might be thinking it’s a lethal

tsunami come to wipe us all out, but I think quite the opposite. I think it’s the

biggest, best waves of our lives. Lucrative, rewarding and harmonious.

Think of social networks as extra distributors for your content... as discovery tools

to help you target exactly the right people and to help them find you. Think of

social networks as retail environments. Focus on making the process of discovery

to purchase conversion as easy, intuitive and as ‘social network friendly’ as

possible.

Social production is the critical shift cause by the internet. Embrace it. Help others

embrace it. Build platforms for self expression and collaboration. And remember,

people will always pay for what they value.

Build cooperation into the infrastructure, like Wikipedia or Flickr. The first

iteration of Wikipedia, Nupedia, tried to control production. They tried to monitor

quality, to manually approve, check and shape. It didn’t work. They needed

volume. As soon as they set it free, Wikipedia rose to become one of the most

visited websites in the world, revolutionising our ability to find information, to

learn. As it grew, and their exposure and risk of giving false information grew,they simply built functions into the system that enabled it to remain free and












As well as this shift from the role of doer to that of enabler; and the shift from

building destinations to building platforms, I predict that user opt-in will become

standard. This shift will happen because consumers increasingly demand the right

to invite advertisers into their conversations. Added to this, advertisers will see

the positive ef ect of permission and will actively look for environments where this

is the norm.










Marketers used to make average products for average people - that’s mass

marketing. It was a by-product of the industrial revolution, when mass production

was born, before we had the technology to tailor to individual wants and needs

(remember Henry Ford - you can have any colour so long as it’s black).

Now, we can’t just cater to average people. Instead, we need to find a group that

really desperately cares about what you have to say (early adopters / innovators),

who’ll then tell their friends on the rest of the curve.

Don’t spent so much time, money and energy on the mainstream, as they’re really

good at ignoring you. Sell to people who are listening. Don’t be boring. Safe is

risky. The safe thing to do is be at the fringes. As Seth Godin says, be a purple

cow. Be remarkable.












Get people talking, then join the conversation. Have all your staf join the

conversation.








It’s no use just saying stuf , then not listening. Your customers expect you to

listen. It’s easy as pie to see who’s talking about you on Twitter, listen to what

they’re saying and join in.








The blogosphere is now so large that it’s an accurate barometer of consumer

opinion. All brands should be using it as a means to measure consumer opinion,

track response to marketing initiatives and as a f orum for research.

We have all the technology we need to connect with everyone who’s a potential

fanatic, in the army of fanatics you need to build around your brand, product or

service.

I predict agencies, broadcasters, consumers, mobile operators, aggregators,

online TV platforms, search engines will all work together much more closely.

There’s still a tendency to think of everything separately, in silos. Or even as

competitors. We still think of TV, online video, social networking, mobile etcseparately.










Trust is needed to win the participation of employees and suppliers in

collaborative improvement ef orts.

The companies that successfully master open collaboration will command an

enormous and lasting edge over rivals that do not.

IBM plunged into the open source world, redesigning its mindset and workflows.

The traditional development process, which was costly and time-consuming,

involved laboring in secret on a prototype before getting feedback from a

customer and then returning to the lab to labor some more. You had to earn the

right to speak to engineers above you. Every product had its own little closet.

Today, in contrast, IBM fosters forums, wikis, and other networks that give

developers an early connection to a range of constituents. The company is

involved with hundreds of open source projects that include customers,

competitors, and other interested designers from outside the firm. Each project is

aimed at bringing the brainpower of a huge open source community together to

help vendors share the development expense for what is, in essence, commodity

software. This more trusting environment has brought a remarkable degree of

transparency to IBM.










After Lego’s patents expired in 1988, they fought of copycat products, as well as

the onslaught of electronic games, by allowing consumers to download software

from Lego’s Web site in order to design their own toys. Lego stages competitions

for the best designs.

Today, Lego aficionados around the world use the Web site to custom design 3-D

toys using virtual elements manufactured by the company, to purchase those toys

online, and to chat with other Lego fans and share design ideas.












P&G, once known as an obsessively secretive organization, has thrown open its

laboratory doors and invited outside collaborators to help develop new

technologies and products, and at the same time is sharing some of its own

intellectual property freely.

At P&G, open collaboration is reflected in everything from the budget-setting

process to quarterly management reviews to the way product development is

done.

Their CEO realised that their ‘invent it ourselves’ model wasn’t capable of

sustaining high levels of top-line growth. The picture was clear:

- More and more innovations were coming from small and medium sized

companies.

- Individuals were actively trying to license or sell their intellectual property.

- Universities and research labs were becoming more interested in forming

industry partnerships to infuse their research budgets.

- Talent markets had become globally accessible through the Internet.- R&D productivity was flat while innovation costs were climbing.










So they moved away from their invention model and made an intentional shift

toward an open innovation business model.

Check out their Connect + Develop site. It’s about tapping into suppliers,

scientists, entrepreneurs, and even competitors, from anywhere in the world, to

solve problems and answer questions.

Open collaboration has given the idea of continuous improvement a new

respectability as a process that often leads to innovation, which P&G’s Lafley

describes as “the conversion of a new idea into revenues and profits.”

So I’m going to come back to Kevin Kelly once more:

As Winston Churchill once said - I never worry about action, but only about

inaction’.





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