Happy Birthday television! Just over seven decades ago, Bulova watches screened the first ever advert, a 10-second slot during a baseball game. But according to Jeff Macke from ‘Yahoo Finance’ the septuagenarian medium is a coffin dodger. In fact, he boldly states that “television as we knew it died this week at 73. Or at least the advertising model did”.
So what is Macke’s justification for such a seemingly outlandish claim? In his piece he cites a PepsiCo conference call where CEO Indra Nooyi said her company’s ad budget would remain at 5.9 per cent of revenues but would be ‘reallocated’. He goes on to say that on the back of that statement he clarified with an unidentified PepsiCo spokesperson that means ‘reallocated to consumer facing activities’. Macke’s interpretation of those dual statements is that they are moving ads off television and into other formats. Well, in the spirit of fairness, that appears to be a bit of a leap from what was actually said and the footnote at the end of the piece is rather telling as it makes it clear that this is only his viewpoint.
Anyway, the controversy clearly doesn’t end there as Macke goes on to talk about how Nielsen data is something out of the ‘Middle Ages’…
“Companies like Viacom are trying to make ad revenues ‘Non-Nielsen dependent’ but that’s akin to a little kid trying to reframe a lousy report card as meaningless. Sorry, kid, but ratings are how we keep score and the Viacoms of this world are getting smoked” says Macke.
Well, I can’t deny that the ability to track audiences’ online behaviour is certainly more accurate but that clearly doesn’t diminish the power of television, it just means we need the same standard of research to monitor the placement of ads. And, as the delivery method for broadcast TV is increasingly becoming IP delivered, maybe that is where salvation lies?
Macke does at least have some slightly kinder words to say about how the networks in the US are trying to adapt and evolve. He quotes Jeff Bewkes, CEO at Time Warner who accepts “we’re in the midst of a secular shift to on-demand consumption” and he lauds Comcast who straddle both the broadcast and online worlds through ownership of NBC plus the pipes that bring broadband into US homes. But he makes it abundantly clear that the ones who refuse to reinvent themselves will suffer the ultimate fate… “history won’t be kind to networks trying to fight this shift. You want to own the players in front of this trend. Those are going to be the winners of 2015. The rest will end up competing for space with ‘I Love Lucy’ and infomercials at 3 am. Just a bunch of old timers waiting to die”. Harsh. But, most likely, true.
And whilst all this debate rages, coincidentally there was another communications-based birthday being quietly celebrated this week. It was on Valentines Day 2005 that three ex-PayPal employees (Chad Hurley, Steve Chen, and Jawed Karim) founded YouTube, the online video site now owned by Google. Happy 10th birthday, YouTube.
What an intriguing and stark coincidence huh? On the one hand, the industry is contemplating how long it might be before the old timer of TV is pushing up the proverbial daisies, whilst on the other hand they are extolling the virtues of a medium that is not even a teenager.
You can’t deny that the numbers for the pre-pubescent platform are pretty impressive. Around 63 per cent of all online adults use YouTube. That’s over a billion users. Over 300 hours of video are uploaded, every minute. Or put another way, that’s over 12 days of content uploaded every minute. More than a million advertisers are using the platform. Mobile accounts for half the usage and ad revenues on mobile are up 100 per cent YOY.
You simply can’t fail to be impressed by those stats. And when you factor in all the other video sharing sites providing access to on demand content, it makes a compelling adjunct to Macke’s point of view. As he concludes “Boomers and GenerationX won’t have to quit ad blocks cold turkey but they will note that a growing percentage of what they see will be ads for retirement villages and Cialis. The kids, which in this case means anyone under 34, are moving online and the money is going with them”.