I’m glad you liked it better than some of my other posts:-)

- Greg

Yes, I do think we’re starting to split hairs. I think we both agree that things are changing and Digital Media is having a real impact, it’s more the pace of change that is at issue.

Have a good night.

- Greg

In so many ways, I think we are saying the same thing. In other ways, we are saying the opposite.

I will go back to my earlier analog about the woman who decides to leave her guy. She will go on to other things. She may decide on interests in software programming or photography, or dating other men. In addition, on occasions, she may agree to have lunch with the ex. Some may argue that the woman did not really leave the guy because they occasionally see one another. This perspective is wrong.

As this analogy applies to media, one can rightly say that consumers are leaving popular media and going on to other things. These things include social media. Some may argue that social media is like TV, and therefore not a shift in consumer behavior, nor TV consumption. Some may also point out that many still watch TV. Both positions are incorrect.

The first reason that the position is incorrect is because it confuses traditional media with social media. The two are fundamentally different. We can just start with some fundamental differences. The first is that social media is essentially user generated content. While this definition is not wholly true, it is in fact mostly true. Social media is a kind of letter writing exchange of old. It just more polished, sophisticated, and technically laden.

Second, social media’s production is not dependent upon nor support by investors or advertisers, respectively. People simply post content.

Last, the term social media is really an idiom. Social media is not really a medium in the classical sense of our understanding of, the media. It is not TV, radio, print, or outdoor. It is kinda an organic social interaction that uses the web as its watering hole.

I could go on, but I think we understand the fundamental differences.

What is important is that we do not equate the two diametrically opposed mediums.

The money that media buyers are dumping into social media is kind of R & D stuff. Ad strategist are just testing the waters; they want to see where this whole social medium is headed. They also do not want to be on the outs of something new. So the Hulu’s of the world become attractive, but in a kind of artificially induced manner (that does not comport with smart accounting practices). Examples of “questionable acquisitions” like MySpace and Twitter serve as examples of high risk moves by media companies to control the digital space. Smart money says these, “acquisitions” are simply ego driven power buys.

That said, you are certainly correct to point to the digital space from a trending perspective. Yes, there is a consumer migration there. That migration is, in part, reflective of consumers’ increased appetite for more diverse content. No argument there. I would, however, argue that the trends suggest consumers’ are just more diverse in the manner that they used their time.

Speaking of time, I have go to get some work done. EST is quickly running into the evening.

Thanks for the data, but I don’t think a few quarters at the height of the economic crisis constitutes a trend.

As for TV viewing, people seem to be using new appliances to augment their viewing activity, not replace it.

As for revenues, Digital Media only makes up for 10% of total spending.

None of this should be seen as a knock on Digital Media. Even 5% of viewing has a real impact and 10% of ad revenues is bigger than Radio or Outdoor. The poin ti s that while the impact of Digital Media is significant and real, it needs to be seen in the perspective of an enormous amount of activity.

- Greg

The numbers are in on ad spending.

WPP’s TNS on media (mainly TV & print) spending for 3rd and 4th quarters 2008, and first quarter 2009 show the following:

-2.0% – 3rd quarter 2008
-9.2% – 4th quarter 2008
-14.2% – 1st quarter 2009

A second leading advertiser estimates a -8.7% decline for all of 2009. These declines actually move in a direction that is opposite other economic trends, and well underperform when compare against GNP’s during similar timeframes.

While these numbers may seem little to most, they are like a tsunami within the industry. Since measured times, even during depressions, we have not seen these kinds of decline.

(I do understand that there is a difference between ad spending and audiences numbers, but for the sake of simplicity, lets just say that there are correlations between the two. I also understand that some declines are attributable to print.)

These declines are serious and can’t simply be glossed over.

So, say what you want about TV, the industry is literally, not buying it.

Greg, remember a few years ago, when data showed significant declines in TV viewers who were men between 18 and 35 years? Well, those numbers may have been a bit off, but the trends were in place. Really, these things lead to serious talks CPM’s, the amount of monies were going into time slots, and moderated increases in the overall ad industry. And, that was during the good ol’ days.

Sure, there are many things that the industry can do to remake itself. I believe it, media, has to become more relevant than entertaining. It also has to begin to comport itself to the lifestyles of teenagers and disaffected viewers. Last, media has just got to get to a place where it is ok with knowing the good days are gone. Those legacy players’ egos can say what that want to say, but at the end of the party, they will have to admit that celebrations are indeed a thing of the past.

Related, things like Hulu, will likely experience a plateau that would otherwise be out of line with its own long term projections. I think some of the attraction for things like Hulu is due in part to it being new kind of digital viewing experience. But at the end of the day, Hulu-esque business models are still premised on the increasingly challenged idea that people enjoy watching TV. Knowing how consumers act, one should expect them to enjoy the newest of Hulu for a while, and thereafter move-on to something newer. That newer could be non-TV content.

I just think we, as a society, are just moving on from a phenomena that literally gripped consumers’ attention from the time of our parent’s generation, to that of the earlier part of our now teenagers’ lives. The whole iPod phenomena changed everything. People bought big screens, but increasingly downloaded content onto their small format portable media players. And that content increasingly became something of a non-commercial species.

These mass media just do not resonate in value much anymore. We should, even if the numbers were in the other direction, just accept this reality.

Don’t argue with me, I’m just the messenger’s assistant.

Good points. Thanks.

I just came across another interesting statistic. Although nearly 30% of households in the US have DVR’s, less than 5% of viewing is actually time shifted. It seems that consumers do prefer programming and use new technology to augment, not replace, their regular viewing.

- Greg

I have to agree with Greg, while new media is doing well and traditional media is re-evaluating itself that doesn’t mean that traditional media is dying. Magazines aren’t dead because they create a true relationship with the reader. I will use Essence Magazine as an example. How many publications you know can have over 400,000 people travel to New Orleans for their Essence Festival IN A RECESSION. That’s a captive audience of people that have demonstrated that they have disposable income and are engaged with the Essence brand. I have yet to see a digital platform create that type of response.

Thanks for the article. It’s interesting to see another view from Stuart’s counterpart “across the pond.” For everybody else, the article can be found here:

http://adage.com/mediaworks/article?article_id=139869

Interestingly, one of the big problems with online video is lack of measurement. The data has not kept pace with the audience and advertisers know a lot more about their TV audiences than they do about their online audiences. This, in part, probably accounts for some of the ad rate problems.

Another point is the sub text of the article. The author is clearly more comfortable with offline media and wants to define online media in offline terms. For instance, he is uncomfortable with viewers switching out of “prime time.” It will take a while for advertisers to understand how to buy all the new media coming online.

Change is happening too fast. Marketers a loathe to spend top dollar on media they don’t fully understand. As they work more with the new media (the author mentioned that his agency has moved some budgets there) their confidence will increase and ad rates will go up.

Again, thanks for the article.

- Greg

I just sent you an article on Hulu and media strategies. Optimedia’s CEO wrote it.

There are a lot of things going on. From a bottom-line perspective, I would be worried. These CPM’s are across media, and they way they will be valued in the digital space, is enough to cause one to loose lots of sleep at night. Rethinking is in order, and that rethinking, minimally, begins at CPM re-valuations. These re-values go to content on handhelds, computer screens, billboards, etc. I think you know what those underlying assumptions are, and would likely say they need to be re-evaluated. Of course, Hulu, would argue that their CPM’s need to be significantly increased. I would disagree for the moment. (But, God willing, when I go from the sidelines and re-enter the fray, my argument will be the exact opposite )

I think it is fair to say, irrespective of our different perspectives on the overall viewers numbers, that something different has to take place in order to bring some stability to the ad industry.