Lairig Marketing

DVR Versus Online Video – “Roll” Out The Barrel (Of Ads)

The DVR is underrated. It can do just about everything except make wine. It even allows the user to SKIP (THROUGH) TV COMMERCIALS!

Yet.

Yet, DVR penetration of U.S. homes is starting to level off, and we predict won’t cross the 50% threshold without some major disruption (technology, pricing, etc.). In addition…although oddly there is no reputable, recent data…we do know ad-skipping by DVR users is nowhere close to 100%.

Some media pundits are now throwing the future of DVRs into the “cord cutting” mix. After all, they posit, if you don’t need your cable company, you don’t need a box and – presto – no DVR.

Whether they are cord cutters are not, there is no question that the demand for online consumption of video programming (in addition to videos of dogs on skateboards) is currently insatiable. But a funny thing happened on the way to the online viewing forum.

Advertising.

Just like on TV, the advertising solution for online video is - * drumroll * - online video. Often the same commercials you see on TV, simply shipped over to an online ad trafficker.

Except.

Unlike the DVR experience, you cannot skip online video ads. Lairig Marketing has touched on the topic of faux “completion rates” before. Whether pre-roll, mid-roll, or post-roll, all eyes (!!!) are on the data that show whether or not the user bailed out during the advertisement.

We already know the insanity of clicking on a link on The Weather Channel – e.g., LIGHTNING STRIKE BLOWS OFF MAN’S HEAD ! – and having to “watch” a 30-second TV ad before the 17-second video plays. Anyone who willingly complies with this sort of scenario on a continuous basis is an imbecile.

But as more and more long-form programming comes online (more Hulu, TV Everywhere, etc.), including on iPads and smartphones, how will viewers weigh the trade-off? Will they “watch” full 30-second spots every five to seven minutes…THAT THEY CANNOT SKIP ?

Will advertisers then push too far, and load in 60-second spots? Or perhaps interrupt programs more frequently? Imagine watching a hockey game online some future day, where an ad rolls every time there is a stoppage of play. Imagine watching The Big Bang Theory with ads playing after every change of scene.

It might all be enough to make viewers skip back to the DVR.

You Are Not Alone – But John Hancock Is

While they still exist (* sarcasm *), let’s talk about four typical ways a company can use a 30-second TV spot:

1. Let the customer know that you understand his challenge/pain
2. Talk about what your company does
3. Focus on the benefits the customer gets from using your “stuff”
4. Portray how great life is for the customer once those first-order benefits are realized

Good commercials get at least two done. Great ones do three. The best do #4 in dramatic fashion (think “1984”).

Some companies, for reasons unknown, spend the full 30 seconds covering only the first item. Example: new work from John Hancock, themed “You Are Not Alone.”

A strong positive here is that JH’s new CMO has halted the much-parodied campaign of 55-year-old bald men INSTANT MESSAGING each other with their most deeply held thoughts about retirement.

In all other ways, though, the “YANO” work delivers the same thing it did before: a message that the broad economy, and thus your personal economy, is f&cked up. This time, instead of private, digital conversations, we see multiple people in each spot speaking the same lines over each other. Hill Holliday did a beautiful job with casting, scripting, staging, etc.

But…does any U.S. citizen believe they “are alone” in thinking about these things? The comments sections on Yahoo Finance and Reuters would seem to indicate, resoundingly, “no.”

Worse, the issues introduced in each spot aren’t resolved. Are you better off putting your money under the mattress? Should you wait to invest in the stock market until (whenever)? Is the sky falling? Don’t know.

Ahhhh, then the payoff in the last two seconds: “Talk to your financial advisor.” Which John Hancock doesn’t have. It does have the products that an advisor could sell you, though.

Got it?

No?

You are not alone.

As we have said in prior posts about financial services marketing and positioning, the way to skin this cat is to deliver on the third item listed above. People need a clear understanding of the first-order benefits of a financial plan. Bad on John Hancock for not providing any practical website assets associated with this campaign – no landing page, no Twitter, no home page call-out, etc.

For now, this campaign is simply the sound of one hand clapping.

Who is going to sign up for that?

Fast Follow-up Week – Shocking TV

One of the popular memes we’ve been ridiculing for a couple years here at Lairig Marketing is the “death of TV” – all the blather about no one watches TV anymore, everyone is cord cutting Pay TV, digital will drop spend on TV advertising to zero, blah yadda blah.

Looks like the social media intelligentsia got our message. Similar to how they have slowly embraced other fundamentals of marketing – social CRM, social commerce, social influencer marketing, yadda blah yadda – they are now giving the world - * drumroll * - social TV.

And, once again, it is simply “digitizing” what people have been doing since Edison.

It is common wisdom that 1 of every 2 people in a group watching TV will talk throughout a program. Instead of laughing at a sitcom joke, the person must speak: “Wow, that dude is funny.”

Instead of gasping during a suspenseful moment in a drama, the person must speak: “Whoa, that dude didn’t see THAT coming!” On and on, for as long as you can tolerate it.

The beauty of social TV is that it allows that person to type these thoughts on a keyboard and annoy people OUTSIDE the living room – Facebook friends, Twitter followers, et al. Of course, if he also speaks while typing, everyone is screwed.

As always, one hand giveth, one taketh away. Dozens of companies – GetGlue, Miso, IntoNow – are looking to monetize this activity, to insert programmers and marketers (surprise!) into the conversation. It’s the Facebook model: twaddle infused with crappy ads.

The irony is that “gurus” aren’t emphasizing the “social” as much as the “TV.” This is the future of TV, they tell us. If programmers and station owners don’t get on board, they are toast. The viewers shall rule the airwaves.

The airwaves that we were being told two years ago were going the way of the dodo. Guess not.

A bigger irony: just to prove how powerful a medium TV is, one of the new players in the social TV space across the pond in the UK, Zeebox, is using TELEVISION ADVERTISING to promote its SMARTPHONE APP.

Too bad for Zeebox that the target audience is going to miss its commercial.

ADT – Secure With Its Split Personality

Segmentation and targeting, as we have probably said here too many times before, are vastly underplayed marketing components. As hard as it is to find good examples of the basics, it’s nearly miraculous to find a company that takes targeting up a notch. Or two.

We think we found one. In a boring industry, in the supposedly dead medium of TV.

ADT is the top dog in the strangely underpenetrated home (and business) security industry. For years it has run familiar TV ads, with shadowy figures lurking among the bushes, window glass breaking, the patented burglar’s gloved hand reaching for the doorknob, and the wailing of sirens.

The current TV campaign for ADT takes a different, um, take. You can view them on ADT’s YouTube channel here. Out with the shock and awe. In with flock and awwwwwww.

And, to get back to the essence of this post, not one but TWO very different consumer segments targeted – in ONE 30-second TV spot (which we are told is also dead, but we digress…).

Open with a husband and wife, sitting with their young daughter – i.e., the flock – outside their home (symbolic).
“When we were looking at home security companies, it was all about reputation – who could we trust?”

Cut to a young couple, inside their home, in a room with various strategically placed consumer electronics (including a basic fan – again, symbolic).
“For us, it was all about technology – we want the latest, most cutting-edge stuff.”

Here we are, just eight seconds in, and the dual targets – which represent probably 80% of the prospects for home security – have been set up perfectly.

A quick skim of ADT’s main features and benefits that address both couples' needs, and then back to each family, who tip their hat to the other segment.

First family – “So it turns out they’re big on technology too.”
Second family – “All I know is we really trust ADT.”
There is your awwwwwww.

AND STILL 5 SECONDS TO GO!! Enough time to drop in a local offer.

ADT needed to take this step for two reasons:

• The cable companies are coming after this space in a hurry


• ADT will soon split off from Tyco and be its own little company

When it does the latter, expect to see it added to the Lairig Marketing Index.

Hopefully, this “tech” company will securely reward our trust.

The Not So Super Super Bowl Stock Portfolio

Back in 2008, we debunked research that concluded Super Bowl advertising was an assured booster to stock prices. Coincidentally or not, the guy who headed the research, Professor Chuck Tomkovick, has seemingly abandoned that focus and switched gears to test the effect of “sexy” Super Bowl ads.

So, we felt this might be a good time to retest his bold statements in 2008 that “[The Super Bowl] is a tradable event” and “Wall Street rewards firms that run Super Bowl ads.”

The process to do this analysis is excruciating. These are also the steps an investor would take to actually set up this portfolio. It would be easier to sit for a bar exam. Blindfolded.

• Determine which spots ran nationally
• Find out the parent company
• Determine if parent is a public company
• Find out if international parents trade U.S. ADRs
• Obtain the proper stock symbols
• Adjust for company earnings announcements
• Track the S&P 500 index as the baseline

We ended up with 20 companies. It would have been nearly impossible to find the date each announced its intention to advertise in the big game (which could immediately impact share price), so we used the closing price on Friday February 3 as the starting point.

Next, we took the close on Monday after the game, to determine what if any immediate lift the ads had on stock price. Then we checked the close on Thursday February 9, to measure residual impacts – especially important in 2012, given the social media fanfare. (We used Thursday’s close since the entire market tanked on Friday).

After one day? An even-dollar-weighted Super Bowl portfolio increased 0.6%, against a flat S&P. Fourteen of the twenty stocks rose in price, while six fell.

After four days? The Super Bowl portfolio increased 1.5%. Just four of the stocks were still lower at this point. The S&P baseline was up 0.5% for the period, so Tomkovick was right. Almost the same gain his team calculated in 2008 (except they used a two-week period).

[Quick note about earnings announcements. Three companies released results during our measurement period, so we excluded them from the four-day calculation. This did not change the result significantly due to offsetting impacts – one of the companies had a very bad quarter.]

But hold on. Let’s introduce some Lairig Marketing reality. Unless you have your own seat on the New York Stock Exchange, you must pay a broker to get you in, then out. Using an average $10 commission per trade, there is an additional $400 bogey before you make money.

Let’s say you had $20,000 to play with. You bought $1000 of each of our 20 companies. Factor in those commissions. After day 1, you are down $275. After day 4, you are still lagging by $115.

It could have been worse. One of the portfolio stocks – Skechers – caught an upgrade Monday morning, February 6. This lifted Skechers stock so high that it ended up being 50% of the portfolio’s total gain after one day, 30% after four days. Without this stroke of luck, your day-1 loss expands to minus $330, and your $115 day-4 loss grows to minus $150.

As in 2008, we conclude two things:

Trading a “Super Bowl Portfolio” isn’t super.

The stock market is, still, a casino.

Sling Shot Baby Was A Sure Shot, Baby

Yeah, we know, it’s not the proper spelling of slingshot. But who cares? We’re more interested in taking another bow for our prediction that the Doritos “Sling Shot Baby” Super Bowl spot would take #1 on the USA Today Ad Meter. Without seeing any of the other spots.

This was the proverbial marketing “slam dunk.” (Note to next year's Doritos contestants – start concepting around the Doritos “Slam Dunk” baby.)

You are the leading tortilla chip by far. You have been around forever. Everyone knows who you are. You command a premium, with per-ounce price rising faster than that of gold bullion. You could run campaigns that focus, like most companies do, on

• The heritage and quality of the product
• The breadth of flavors, sizes, etc.
• A direct attack on competitors
• The many, many ways you can enjoy the product
• The emotional benefits the product delivers

But, quite frankly, there is no need. The stuff sells itself. You knew this as far back as 2007, when you asked “consumers” to submit their own Super Bowl spots.

The basic brief is the same – people love Doritos so much they will do anything for them. Or with them. Or to them. Etc. Etc. The submissions flood in, and the excitement mounts.

Most of the other Super Bowl advertisers are not in your fortunate position. They need to craft a compelling story to get people to consider them. The result sometimes is that viewers don’t really get, or care, what those advertisers are hinting at. For example, viewers might think Clint Eastwood is running for President.

“Sling Shot Baby” had winner written all over it. Oddball characters, a baby, baby as hero, and a crazy-ass, nearly believable stunt. Forget how off target it was – babies don’t eat Doritos and neither does anyone over the age of 50 (read: Grandma). It perfectly hit the sweet spot for an audience of 111 million, just one step above the lowest-common denominator, which GoDaddy owns lock, stock and barrel.

No one else had a chance (although, if Budweiser had placed a baby in its "Weego" spot….)

It will be more of the same next Super Bowl. And perhaps for the three Super Bowls after that. But, at some point, you will lose share, badly, and you will need to think about that bulleted list above.

You’ll take back the reins from “consumers” and produce your own Super Bowl spot. And it won’t come close to the top of the USA Today Ad Meter list.

Which will be a good thing. Because it will mean that you are on your way to winning something a little more important.

Netflix Revised Subscriber Guidance: Netflinch

News so important it interrupts our normally scheduled Friday Fast Four. So important that we’ve upped our word count by 100.

First, we shall break our arm patting our back. Our prediction for this year’s July back in December 2010:

“The financial press is awash in headlines like ‘Netflix: The Best Short Ever?’…”

On July 13th (!!!) Netflix hit its all-time high, just short of $300. Since then it has slid, tripped and finally tumbled to $170. For those that shorted Netflix on the right day, you just made a return of 43%. You can thank us later.

Now to a bit of analysis about Netflix that you will not read anywhere else.

The blogo-rhea is flooded with knee-jerk “examination” of yesterday’s terse but honest guidance from Netflix management. Even Wall Street followed suit (!!!), cutting the share price by nearly 20%. All of this driven by a 2.7% reduction in forecasted subscriber count (and not an “actual” loss as some dopes are reporting).

Because almost all of Netflix’s reduced guidance is from DVD-only subs, here is the typical reaction by bloggers, many who should know better: “Netflix raised its prices too much.”

Oh dear.

Here is what you should really think about. Someone in the corporate strategy department at Netflix fuxed up the forecast. Here are two inputs he or she messed up, and you can also take these as learnings based on the revised guidance.

1) The 800,000 subscriber overestimate in DVD-only means this (and sorry for the caps, but we don’t want skimmers to miss it):

NOT AS MANY HOUSEHOLDS ARE PREPARED TO GO OVER-THE-TOP AS EVERY PUNDIT WITH SIX “CONNECTED” DEVICES BELIEVES.

There are simply too many households without the wherewithal – money, equipment, or knowledge – to watch “TV” on a laptop and/or hook a laptop to the crappy old TV set they own.

Now, as a set-up to the Netflix forecasting mistake/learning #2. Where did those 800,000 go? Notice the Netflix streaming number was also reduced, by 200,000. WHERE DID THE 800,000 GO?

2) The drop in Netflix’s streaming-subscriber guidance means this:

NETFLIX IS MAINLY A SUPPLEMENT TO PAY TV. NOT A REPLACEMENT.

The 800,000 will simply rely on their CURRENT cable or satellite provider for video entertainment. The new, much higher price from Netflix adds 20% or more to the monthly household “TV” outlay.

These households just don’t have the funds for it. Now, and for a long time (see long-term unemployed; and U.S. poverty rate).

Only loyal Lairig Marketing readers will see this Netflix analysis of course. The same ones who could have told their neighbors to get out of NFLX stock in late June or early July.

Meantime, let’s make another prediction: Deep in the basement at Netflix headquarters, a corporate strategist is about to get “streamed.”

Employees Are NOT Your Best Brand Asset

Google “people are our biggest/best strength” and “our best assets go out the front door every night” and you will get a googol of hits.

The concept might hold water in Human Relations, but in Marketing it is crap.

Every week another campaign launches somewhere, letting us know why we should care about some company’s product or service because “our people care.” We have told you why this concept doesn’t work, in a (un)heralded Marketing Profs guest post that slammed Nationwide, which spent mega-millions in early 2009 capturing “real” employees’ “real” customer stories. Real boring.

As we predicted, Nationwide shut the campaign down within weeks.

Here comes another easy target, with a slightly different twist. The Aunt Jemima brand management team has been so overwhelmed by response to a social media campaign – FEATURING THE COMPANY’S EMPLOYEES – it has decided to turn it into a TV spot.

Earlier this year, the AJ folks created a video series titled "Live from the Line,” featuring – can you guess? – REAL EMPLOYEES of its Tennessee plant. In concert with the video, launched on Facebook, was a coupon. It sold like, er, hotcakes. And the Aunt Jemima brand team has mistaken that for “brand engagement.”

So give that cardboard box of frozen starch, salt and carbohydrates a big hug next time you are in the grocery store – it was produced by people “with passion”…"who care.”

And, if you don’t have a coupon for it, I imagine you will put it back down in the freezer case.

On ice. Which is where this marketing concept of “our employees [fill in the blank]” should go.

America’s Most Wanted Cancelled – Another Blow To Valuable Content

Real AMW fans could see it coming from a mile away. Putting the show on hiatus in late April for a three-week June return, with a June 18th “season finale,” was the next-to-last nail in the coffin. The last nail was driven in by Fox Entertainment President Kevin Reilly, announcing Monday during the annual upfront that Fox was officially cancelling America’s Most Wanted (and Fox can stick the promise of a quarterly two-hour AMW special up its arse).

Loyal readers (and always-worried family members) know I am a big fan of the show. In the past, Lairig Marketing has featured posts about AMW’s new website and its 1000th episode. And there are more fans than meet the ratings eye, judging by the volume and tenor of comments to today’s news articles and blogs about the show’s cancellation.

Like it or not, “fans” are the currency in our world of mass media. If viewers don’t show up or otherwise declare themselves engaged, then not enough advertising is sold to cover costs.

In the 1000th episode post, I wrote “Equally amazing is the fact that every week Nielsen’s TV ratings come in showing the previous Saturday night’s broadcast of AMW at between 5 and 6 million viewers. A straight line for 23 (now 24) years.” I should have been more precise. In reality, it is clear why more fans didn't tune in, and Fox programming and production executives have no one but themselves to blame.

Let’s count the ways Fox supported America’s Most Wanted. Ready?

F&ck all, that’s how many.

• No cross-promotion of AMW on other Fox shows (i.e., house ads)
• No cross-promotion of other Fox celebrities on AMW
• No promotion on non-Fox networks or any other media type (outdoor, etc.)
• No investment in a mature AMW public relations department
• No cross-promotion with amw.com, a top-ten media website

In a cruel paradox, Fox essentially treated America’s Most Wanted like a public service. Housing the show in the new History of Crime & Punishment Museum in DC. Maintaining John Walsh as the fulcrum of the show for its entire 24-year run. Sending TV cameras to every capture, no matter the time or location. Bringing the show back after a public sh&tstorm around its six-week 1996 cancellation. And airing the show on not-so-prime-time Saturday night.

Is it really any surprise, then, to hear that the show “was economically getting to the place where it was not realistically viable” as exec Reilly said Monday?

Making a “return on content” is certainly Fox’s privilege. To be unable to do so with AMW after all these years, though, to not even try, seems odd. Fox will, at least temporarily, realize a negative return on its own brand when federal and local crime prevention agencies weigh in over the next few days. I bet we even hear from the White House.

To little avail. Times are different than they were in 1996. In a few weeks, we will lose one more valuable thing to watch.

Tune in Saturday night, June 18th, at 9 PM to witness the end of America’s Most Needed Content.

Too bad, Kevin Reilly. You could have made a difference.

Ain’t Life – And Death – Sweet?

If you had a great marketing blog post planned for today, let’s just say you were scooped. Although I’m sure before the week is out we will have at least one post saying something like “5 Ways Osama bin Laden Could Have Used Social Media to Survive.”

But for today, we forget marketing. We reflect on the second-biggest news story of the past ten years.

Over many, many years, time and again, the American people have been shown pictures on TV of citizens of other countries massing in the streets by the thousands. To celebrate or to protest. But never did it come close to happening on U.S. streets.

Until tonight. The sight of thousands of U.S. citizens racing to the White House, or to Ground Zero, to wave flags and applaud and cheer and chant “USA, USA!” 2 A.M. And they are still out there. On a school night, no less. It is beyond belief.

Will this mark a shift in our society, the way Americans think and act and relate, with each other and the world at large? Will we care more, learn more, share more?

Or will it all blow over, like it did five days after 9/11, the day we “came together” as a country?

In the past several years, we seem to have been at war with ourselves, politically, economically, intellectually, socially. Thirty-five or so brave men have now done what they can to bring us back together.

Justice for all. Let us heed their call.