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The Search For Mind Parts

Feb 9, 2004  •  Post A Comment

A few graphic images put into sharp focus the massive changes that have swept the television business in the past decade. A pie chart from 1994 showed that American Express spent 80 percent of its ad dollars on TV and 20 percent in print. The next chart showed 1998, when Amex spent 50 percent of its budget on TV, with the rest split among print, radio, online and a few promotional events.
By last year Amex was spending only 35 percent on TV. The dollar amounts were bigger, but TV’s slice of the ad pie was clearly shrinking. “The road to success is no longer straight and narrow,” said John Hayes, chief marketing officer for American Express, who was keynote speaker at last week’s “Madison+Vine” conference, produced by TelevisionWeek’s sister publication Advertising Age in Beverly Hills.
For the second year in a row the conference was packed with ad buyers and sellers, brand managers and marketers, TV executives and journalists, all trying to make sense out of the changing broadcast landscape.
As Mr. Hayes’ graphics showed, it used to be relatively simple for a company to get out a message. Today that job is complicated, not only because there are far more channels and forms of media but because the underpinnings of TV itself are shaky.
In the era of remotes with fast-forward buttons, there is no certainty that commercials will even be seen. As digital video recorder technology such as TiVo makes it possible for each individual to be his or her own programmer, there is no longer any certainty that shows will be seen in a pattern where they can be easily measured. As the younger generation splits its leisure time among the computer, video games, cellphones, MP3 players and other distractions, TV in some cases becomes just background noise.
This has all been discussed before, but now the changes have arrived and they are moving even faster than expected. “New technologies are handing over more control to the audience than the networks would like,” declared Mr. Hayes, suggesting that the personal video recorder may be Madison Avenue’s Napster.
In other words, just as the pioneering online music delivery service Napster shook the recorded music business to its roots, technology is in the process of turning the longstanding economic model of TV on its head. At a time when the need to market effectively is greater than ever because of a fragmented media environment, advertisers are less sure than ever how to spend their money. “The ultimate irony,” added Mr. Hayes, “is when you have resources and nowhere to spend it.”
For Amex and many other advertisers the answer has been to stay closer to the consumer and to create campaigns that mix product messages and content, what Mr. Hayes called “360-degree integration.” That means being more creative about how and where they market and using a much broader range of media and marketing tools. “I don’t care about dayparts,” Mr. Hayes said. “I care about mind parts.”
In other words, it is not about how you get to the consumer, it is about mixing media to deliver messages. We have entered the era of the custom-built message, he said, where every element of every marketing campaign is specific to the message, the audience and available distribution outlets.
For instance, one of Amex’s most successful campaigns in recent years was the launch of the Blue credit card, primarily using a media event instead of paid ads, Mr. Hayes said. In 1999 Amex sponsored a Sheryl Crow concert in New York’s Central Park that was broadcast on TV, on radio and over the Internet. It was followed by a chart-topping live album, with each CD not only branded but also carrying a promotion for the Blue card.
It delivered huge exposure, especially in the crucial New York market, and helped successfully launch the product. And the entire campaign cost Amex less than the price of one 30-second spot on last week’s Super Bowl. “It’s no longer about catching up to change,” Mr. Hayes said. “It’s about making change happen.”
Since then, for Amex, that has meant everything from product placement to sponsoring films to long-form ads for the Internet, such as the upcoming campaign that will star comic Jerry Seinfeld and his animated pal Superman in five-minute featurettes.
And there was Amex’s involvement in the NBC reality show “The Restaurant.” Rumors circulated for months that Amex wasn’t thrilled with the way its card was used in the show, but Mr. Hayes insisted it was a success. Amex just had to get over the idea that it could control every aspect of how its product was portrayed. “We as an industry found we were too self-critical,” he said.
In the first of a trio of panel discussion that followed the keynote, ad exec Robert Riesenberg, now president and CEO of Omnicom Group’s branded entertainment unit, confirmed that there had been a lot of discussions about how that brand was used in “The Restaurant.” He said it was a lesson both in product placement’s potential and in its limits.
Another panelist, producer Mark Burnett, the man behind reality hits “The Survivor” and “The Apprentice,” admitted “The Restaurant,” which he produced, was “kind of a nightmare,” even though it succeed in attracting an audience.
However, he said, such problems go with the territory: “If you’re not willing to fall on your face, you’re doing nothing.”
A time of change also creates opportunity, and Mr. Burnett revealed ways that he is taking advantage of that. He has begun to go directly to major brand sponsors even before he goes to the network. “I felt if I could come in with advertising attached, I would have a much bigger stick, and it worked,” Mr. Burnett said.
Another panelist, Kevin Reilly, president, prime-time development, for NBC Entertainment, said NBC is open to new financial models because good ideas these days come from clients and the creative community as well as the networks.
Of course, new business models come with new problems, such as how to measure success. Panelist Michael Browner, executive director, media and marketing operations, for General Motors, said the company no longer uses only CPMs (cost per thousand viewers reached by an ad) as its measure. “Today,” he said, “you have to invest in what works.”
Ultimately, the measure is still how many cars were sold or how many credit cards were issued. However, the message throughout the conference was clearly that there are new ways to achieve the old objectives.
“We’re at the infancy of a new business,” said Steve Berman, a senior executive at Universal Music, during a panel on the music business. “I think it’s time to bring everybody on board.”
The panelists predicted the end of the upfront market, new forms of product placement, more targeted advertising, advertisers seeking a share of revenue from shows and networks looking for ways to share in the profits from products advertised on their air.
By revolution, evolution or convulsion, the future is arriving, and those who do not change won’t survive. There has never been more opportunity to be creative nor a greater risk of failure. The stakes are high, but so is the payoff for those who successfully navigate the churning, changing waters of that seemingly endless stream of programming we call television.