Digital Is Dead – Long Live TV and The Web!

Nigel Walley -  July 2009

I received a flyer in the post from the Institute of Direct Marketing (IDM) the other day, outlining the curriculum of their ‘Complete Digital Marketing Course’.  What was remarkable about this flyer and its grandiose claim, was just how incomplete the course was.  In a week when AudiTV launched an on-demand service on Virgin cable’s Showcase, and Honda’s webTV service moved to the front page of the BT Vision EPG, there was nothing about breakthrough digital TV marketing in it at all.  With Sky launching green button advertising on the satellite platforms, there was nothing about interactive television formats; and with both Sky and Virgin developing targeted broadcast and targeted on-demand mechanisms, there was nothing about converged marketing principles, bringing together internet techniques with broadcast content.  And it wasn’t just TV that was ignored.  At a time when DAB is firmly back on the radar screens thanks to Lord Carter, there was nothing about digital radio marketing, and in a week when I stood in Victoria station watching coverage of the Tehran rioters on the big newscreen, there was nothing about digital outdoor. The DMA was of course just a session on web marketing, with a bit of mobile thrown in for amusement. As you can see though, it wasn’t the pompousness of the word ‘complete’ that struck me.  It was the redundancy of the word ‘digital’ in a marketing context.
In Decipher, we have been saying for a long time that if you use the word ‘digital’ in a marketing context, it is because you are too stupid or too lazy to use a more accurate word.  Unfortunately, the trade press and the agency world are complicit in re-inforcing this ineptness. If you read the new media trade press, the word digital is used predominantly to refer to stuff that is simply web marketing.  On a good day, it refers to both web and mobile.  If you speak to any digital agency, you will find they are web marketing agencies who do a bit of mobile when required.  This is not intended to diminish their contribution. The world of web marketing has emerged as a complex, multi-faceted market with many, sophisticated formats, products, currencies, reporting systems and analysis techniques.  But it is still only web marketing. Most digital agencies don’t address all internet formats, let alone all digital formats.
There is an equally complex, multi-faceted market landscape growing up around Digital TV which is being ignored by the marketing community.  As Tess Alps said in NMA this week, ‘TV is part of the new media age as much as the internet’.  The truth is that if you take Google out of the equation most ‘digital’ marketing money is spent on TV.   The new media industry doesn’t seem to have spotted this.  In Marketing magazine last week, Fiona Ramsay talked about how red button had failed as a format, but I had just received an announcement saying that Sky was running their 40th red button campaign of the year, up on this time last year. The backdrop to this red button advertising is a continued growth in red button use around content. During Wimbledon this year, over half of all digital homes pressed red more than three times.  This is the same week that the BBC and ITV announced that they were creating TV widget for iPlayer and ITV.com that could be launched from broadcast on Yahoo Widget enabled TVs.  Sky also announced the Autumn launch of SkyPlayer for Xbox.  Now, who is meant to deal with the marketing implications of these new formats. The truth is that red button and other emerging TV formats don’t fit the nice ‘traditional vs digital’ structure the industry likes to work in.

The reason this matters is that it highlights the failure of the traditional side of media to deal with the emerging TV formats and systems.  Whilst these are predominantly TV formats, they are too hard for the traditional agencies to deal with, but too integrated with broadcast for web or DM agencies to do anything meaningful with. So the industry ignores them.  The red button stuff is just a symptom of this, but it is the part of the story that has never been written about red button.  Red button is essentially a TV medium that was given to the internet and DM agencies to deal with because the main agencies didn’t get it.  But the internet and DM industries couldn’t make the necessary content because the TV budget had always been spent by the main agencies and the other agencies weren’t able to plan for its use in the context of a TV campaign.  We heard this story over and over again over the last few years.  A newly emerging example of this inability to deal with emerging TV formats is online video advertising.  We are now hearing that  ‘traditional’ agencies don’t understand it but  ‘Digital’ agencies don’t have the capability of making the right content or planning it in the context of a TV deal.  We hear this two or three times a week at the moment and it all sounds very familiar.  ‘Digital’ agencies unable to deal with a digital format. The truth is that online video is predominantly a brand format that needs to be planned and created as part of a TV campaign and neither ‘traditional’ of ‘digital’ agencies are set up to do it.
The trouble is that they think they are.   John Owen of Dare said in last week’s Campaign that ‘digital is a state of mind, not a description of channels’.  Well it is a pretty blinkered state of mind.  Nobody with the word ‘digital’ in their job title ever seems to have an opinion on the cost of advertising on Sky Channels, ITV3 or MTV, even though they are digital-only channels, let alone knowing anything about TV interactivity, TV on demand or IPTV marketing formats.  The truth is that, at a time when we need broad minded integration of agencies,  the so called ‘digital’ industry has become as parochial and small minded as traditional media. No less a figure than Mike Nutley of New Media Age commented on this last year.
As if that wasn’t bad enough, marketing people have even started using the word ‘digital’ as a noun, as in ‘we are going to use ‘digital’. The minute that the word ‘digital’ shifts from adjective to noun, you know that it has had its day. It is a useless word for our market and deserves derision.  But then, we have been here before.
Back in the mid 80s, before all of this new media nonsense, I was working as an architect for a very trendy company in Soho designing bars and restaurants.  In those days we didn’t call them architectural practices, with the fusty connotation that brought.  We worked for ‘design’ practices.  These ‘designers’ were made up of architects, furniture designers, graphic designers and other assorted visionaries who we were slowly repackaging the world, in a festival of Philippe Starck inspired ‘design’ enthusiasm.  However, towards the end of the 80s, something very odd happened to the word ‘design’.  It started to be stuck in front of anything vaguely unusual, or contrived. It gradually even transmogrified into ‘designer’ which slowly became a term of derision, like ‘estate agent’. The word ‘design’ became redundant and architects started calling themselves architects again.
Even before the arrival of the DMA’s ridiculous flyer, I had been thinking about a similar demise of the word ‘digital’. This was mainly because of Stephen Carter. For the last few weeks he has been addressing an assorted rag bag of unrelated issues, under the title of Digital Britain.  This phrase has the same amount of credibility as Cool Britannia.  You initially think it sounds good, and then its overwhelming vacuousness creeps up on you.  You knew that BritPop was over as a phenomenon when Tony Blair and Alistair Campbell tried to harness it under the Cool Britannia initiative.  It’s the kind of embarrassing thing that your Dad dreams up when he is trying to get hip with the kids. I am hoping that Digital Britain has finally done the same for the word digital in popular parlance.  Somehow we need to address the problems it causes in creating damaging demarcations in the marketing industry.
This may happen in the same way as with the word ‘designer, where the realization of how vacuous the word was crept into mainstream consciousness.  In this morning’s Times, Libby Purves wrote: ‘the word ‘digital’ joins a long list of adjectives too exciting for their own good’. When even someone as ‘analogue’ as Libby Purves spots the ridiculousness of a technological word, then you know that it has had its day.  I work in media.

Filed under: Future Advertising , BT Vision, Future TV, futureadvertising, IPTV, Nigel Walley, On-Demand, TV, Virgin

Whose Shares Wins? ITV vs Google

See Decipher discuss the Susan Boyle case on Channel 4 news here

Much was made in the press about ITV not earning any revenue from all the people watching the clip of Susan Boyle on Britain’s Got Talent on YouTube.  This has been described by various commentators as a missed revenue opportunity, and a commercial failure for ITV.  This completely misses the point.  Over 50 million people tuned into watch the Susan Boyle clip on YouTube.  It was the best two minute ad for a TV programme that has ever been distributed and ITV didn’t pay a penny for the privilege.  You have to ask how many posters a TV company would have to buy to get an equivalent, media impact.  The only statistic of interest should have been the uplift in audience, from the episode before to the episode after the YouTube explosion of Miss Boyles version of Les Miserables. There was a 2 million uplift.

There has been a bizarre implication in all the media coverage over the last two weeks, that because of this example, YouTube is somehow a 21st century business and that ITV is an old fashioned business that doesn’t get it.  ITV maybe sitting in the middle of firestorm of reduced ad spend, but at least advertisers are spending with it.  They are barely spending with YouTube, which costs Google the best part of a billion dollars a year to run, but makes it only 200 million dollars in return.  It is one of the last of the dot.com absurdities – a great functionality in search of a business model. 

The press commentators declared that ITV’s shareholders were funding content that YouTube were exploiting to build a business and that they should be up in arms about it.  But this perspective was not based on a sensible analysis of commercial outcomes.  If you look at the issue from a revenue gained point of view, the only shareholders who should be up in arms are Google’s.  Their expensive acquisition, YouTube,  distributed an amazing two minute advert for Britain’s Got Talent from ITV for free on their platform.  For Google or YouTube to get the equivalent value out of ITV you would have to pay them millions pounds.

YouTube is the best thing that has happened to the TV industry in the last 20 years.  The idea that people are tuning into the UGC site, rather than watching TV is preposterous.  There is just no evidence that it is happening.  Consumers get the idea of relative value between them. YouTube is a clip sampling destination, not a TV destination. 

More importantly brands understand the relative value. T-Mobile the brand behind another recent YouTube hit  – the Liverpool Street Station dance scene -  quite clearly understand the comparative value exchange at work here.  When they wanted to launch their follow on campaign to the dance scene, they chose not to launch on YouTube, but paid serious money to good old ITV to put their ad into the centre break of…….you guessed it…Britain’s Got Talent. You can bet that the perceived price and value of the spots they used had increased dramatically because of YouTube’s free support and the extra 2 million pairs of eyeballs it delivered.   If I were a TV exec I would be gagging to get promo footage of my shows onto YouTube.

The only cause for complaint among ITV shareholders must be that Google let YouTube provide ITV with a global promotional base for BGT, but ITV don’t own the global rights to exploit the programme asset. But that is a different moan.

See Decipher discussing the media coverage on Channel 4 News here.

Filed under: Commercial Models, Future Content , Future Programming, Future TV, ITV, Nigel Walley, On-Demand, YouTube

Overhead Projectors, Broadcast Channels and Other Redundant Technologies

Nigel Walley – Feb 2009

 

I used an overhead projector for a presentation at a conference the other day.  It was great.  You get to write on a sheet of acetate, like your teachers used to, and it shines up on the wall.  Joking aside, there was something immediate and human about presenting ideas with an overhead that is completely lost with Powerpoint.  I know that I sound like a music nut comparing vinyl to the CD, but in the rush to move into the digital age, we can sometimes throw the baby out with the bath water.   Before we got rid of overheads, someone should have stopped and questioned whether there was anything great about them that needed preserving.  In fact I think they may make a comeback

 

On that not, let’s pursue the point about music formats.  It is likely that we will have a similar situation with LPs.  There will be many people who will end up owning a vinyl collection, and an iTunes collection of music, but will forgo their CDs all together.  CDs may go the way of the VHS tape and the VideoDisc.  I find it difficult to imagine someone saying what I just said about overheads, about CDs.   I did hear a very persuasive defence of the audio cassette the other day, particularly its role in the creation of compilations, as a gesture of love amongst teenagers, but I think the days of the audio cassette are gone.  Vinyl will be the great survivor because there is something about LPs that is great and human, and that people don’t want to let go of.

 

CDs will become what the Americans call a ‘buggy whip’ product.  Apparently at the turn of the 19^th century in America, making hand held whips, for drivers of horse drawn buggies was big business.  Then, all of a sudden, it wasn’t. ‘Buggy Whip’ has come to be used to mean a product or industry that just disappears as a market is redefined rather than revised.  

 

The distribution format debate has now begun to rage in the TV world around broadcast channels.  It only used to be the most fundamentalist wing of our new media brethren who would speak about the death of broadcasting channels. Now everyone is at it.  I have heard the most sensible people talking about not needing broadcast channels, and how they are now 100% on-demand. Now there is a very sensible technical argument against the death of broadcast.  If you want 11 million people to watch Coronation Street at 7.30 every night, then sticking it up in the air, rather than through an expensive network, makes the best economic sense. However, two counter arguments are appearing. The first is a neat technical rebuff.  Once we get fibre everywhere, like the cable industry, there will be sufficient capacity to not worry and that we should just make it available on-demand from 7.30.  The second argument says that making everyone watch Corrie at 7.30 at night is an old fashioned construct.

 

Now this is where the human in me starts to revolt again.  Millions of people around the country build the social routines of their household – dinner, bathtimes -  around channel schedules. Do they do this because there is no alternative and with on-demand then broadcasts are the next buggy whip.  I am not yet convinced, and the argument fails around live football.  However, I can remember when Prince Charles used to talk about organic food and saving the planet and everyone thought he was a nutter?

Filed under: Distribution & Devices, IPTV , Broadcast, CDs, channels, Future TV, multichannel, Nigel Walley, PVR, TV

The BBC Is A Pay TV Operation

Nigel Walley – February 2009

I opened my bank statement the other day to see how much I paid Sky.  What I found interesting wasn’t the Sky number, but the line underneath. By some quirk, the direct debit that I pay to TV licencing was listed underneath. I pay just over £11 a month to the BBC for TV and radio.  Now, as a middle class middle Englander, I understand how much value I squeeze out of the BBC for that money.  I probably use way over the average amount of BBC output, and don’t begrudge it.  What I find odd is that the industry still lumps the BBC together with ITV, C4 and Five in our discussions about free to air television.

The BBC is quite clearly not a free to air broadcaster.  I pay a subscription every month to access the content and it is quite clearly a Pay-TV operator in terms of the way it is financed.  The only differences between the BBC and the other Pay-TV operators are that it is a compulsory subscription and that they have a variety of public service obligations in return. 

While this may seem like semantics, the question of whether they are a Pay-TV operator or not becomes quite pertinent when you consider a different question:  ‘does free-to-air have a future?’  This normally would have been an absurd question to ask but if you look at the revenues this year so far for ITV, C4 and Five it is clear that it may no longer be quite so stupid.  The cash crisis affecting the PSBs operating in the FTA sector (apologies  – couldn’t resist the acronym clash) mean that we may be seeing the beginnings of a vicious circle where programming budgets on the non-BBC channels decline to the point where their content is demonstratably of inferior to the BBCs, so they lose share to the BBC, they then earn less from advertising and therefore have less to spend on programming. Whether a circle is vicious or virtuous often depends on the direction from which you are looking.

Filed under: Future Content , BBC, FreeToAir, Nigel Walley, PayTV, Sky