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Mobile TV Is Next Arena for Advertising

Mar 1, 2009  •  Post A Comment

As TV becomes truly ubiquitous and we have “TV 360” with us 24/7, it’s time we begin to think about developing mobile TV to generate client sales results.
The television industry might finally be ready to divert the billions of dollars that are still being spent on direct-mail and directory-based media to a new TV 360 marketing model. And mobile video could very well be the Holy Grail for the television industry.
I’m sure many marketers will look at live local mobile video as a way to extend the brand, but to me the most obvious opportunity is in direct-response sales generation.
Let’s examine the world of direct mail, phone directories and Google keyword searches to see if the television industry could compete in the direct-response arena.
Direct-mail marketers tell us their response on a print mailing has declined to less than 0.1%. I’m not a genius, but when 99.9% of people do not respond to your costly direct-mail piece, it might be time to re-budget to another medium.
With numbers that weak, there has got to be a better option. The CPM of a piece of direct mail sent to a home with a stamp on it is upwards of $450—staggeringly expensive by any measure. Do you know of any local TV program with a CPM anywhere near that high?
Do we really need a postcard to tell us all about a company when all we have to do is go online and type in the name of the business? I think not.
That brings us to the telephone book.
Borrell Associates reports that within four years, approximately 39% of yellow pages advertising revenue will have migrated to other media that have a way to reach interested consumers faster and more cost-effectively to result in quick sales.
Much of the continued phone directory ad spending is simply out of habit. A business owner who advertised in the Yellow Pages last year will repeat this year unless he gets a better pitch from another medium. Little consideration is given to the statistic that less than 5% of new business is generated by the $12 billion spent annually on phone directory ads.
Note to marketers: The folks who answer the phone at your client’s office and ask the consumer how he found the company are collecting bad data. The consumer often says he looked up the phone number in the phone book. Finding the phone number for a business is the last step a consumer can take in the shopping process. If the majority of consumers are finding the business’ phone number in the white pages, there is no need for a display ad.
Bottom line: The yellow pages falsely gets credit for customer generation since the consumer would have found that business regardless.
I believe “TV 360” will replace this process.
The effectiveness of Google AdWords seems to be fading, according to many clients I consult. Initially the effect was dramatic, but as more directory Web sites came online, the competition for the consumer’s attention cluttered their Web shopping experience.
Last week a client told me that her Google AdWords cost per click had reached $1.50, which translates to a $1,500 CPM. That is almost three times higher than direct mail’s. Does a consumer clicking a keyword necessarily create a sale? Not according to our six-month study of this client’s sales, in which thousands of clicks produced few results. In this specific case, most of these consumers didn’t even ask for a price quote.
Nonetheless, it seems business owners are fascinated with Google AdWords. What did the television industry do wrong to allow Web-based directories to gain such a foothold?
The answer is passivity. The TV industry stood by and watched the Google guys call on their clients and create keyword budgets, then finally tap into media budgets.
Television still holds a trump card, however.
The emergence of TV as a move-with-you medium brings with it breathtaking applications.
Imagine seeing a commercial for Lexus while watching live local news on your iPhone. By tapping a special icon on your screen, you could be instantly connected to a live Lexus salesperson who could set up an appointment for a demo ride.
Or a commercial for a Broadway play could feature a link that enables you to buy tickets on the spot. Marketers know the secret value in real-time marketing to a consumer: They spend more when you can complete the transaction quickly—before they cool to the idea of buying and begin to rationalize the purchase.
Could TV 360 replace direct mail, yellow pages and Google AdWords? Perhaps.
But after 25 years of tracking advertisers’ sales numbers, I’m certain that TV ads will continue to bring buyers. You can count on it.
Adam Armbruster is a senior partner with Red Bank, N.J.-based retail and broadcasting consulting firm Eckstein, Summers, Armbruster & Co. He can be reached at adam@esacompany.com or 941-928-7192.

18 Comments

  1. The notion that our media inclusive of TV goes mobile is not necessarily new. Television has been portable for some time now.
    Up until the recent FCC ruling that viewers now need an electrical hardware box to receive a TV signal, television has been portable and is not new. (By the way – This FCC ruling was very bad policy)
    I believe about what your speaking, is the notion of interactive commercials paired up with the portability feature.
    Again, the new notion here is the ability to spontaneous interact with broadcast information, but it’s still a commercial wrapped around content.
    If I could poll only one question to a full auditorium of people, I would ask, “Given the opportunity as a television viewer, if you had the ability to block all commercials, would you and why or why not?”
    There’s a reason TIVO, DVRs, PVRs, et al made such a strong debut. The public’s use forced television to start seriously thinking about becoming a pull rather than a push medium. Still, it’s 2009 and most of the industry is just getting out of the starting gate but I say, “behold the turtle who doesn’t make progress unless he sticks his neck out!”
    Among several major challenges the television industry needs to adjust, a couple of the most significant tweaks are to redefine their audiences, understand social equity, and figure out how to use dialog with consumers.

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