“One of the most dramatic and consequential cultural and business developments of our time…”
That’s how columnist Michael Wolff, the former editor of the trade publication, Adweek, described the significance earlier this month of a Disney decision to formally permit ad-skipping technology.
By revenue, Disney is the largest media company in the world, owning more than a dozen cable networks and the ABC network, which owns the TV station in Durham, North Carolina where I live.
Disney is the first of the traditional television networks to make this move. For some time, television overall has been weaning off advertising and toward revenues from licensing fees, just as savvy marketers have been moving away from advertising as a means of reaching consumers.
A similar calculation was made by the new owners of Newsweek magazine when they decided to resurrect the print version based on a subscription model, something many other publications are doing with both digital and print versions.
The son of a former advertising agency executive at the dawn of the Mad Men era, Wolff is forgiven an anachronism when he proclaims that “brands must advertise.”
Of course, they don’t, not any longer.
He may be harkening back to the day of “bang the drum” marketing when advertising, which is just one element, was confused with marketing overall. There are now many more fruitful and authentic ways than advertising (which is a form of yelling) to reach consumers.
“Great works deserve a great spotlight” is a rationale for marketing that I first heard used by Chip Bell, author of The 9 1/2 Principles of Innovative Service.
But marketing for all but the laziest, zombie-like marketers, long ago ceased to be about reaching the most eyeballs but reaching the right eyeballs with genuine, credible and valuable content.
Advertising’s decline began in the mid-1980s. Within a decade it had been surpassed in effectiveness by other elements of marketing including earned media and content marketing.
Today, advertising is measured as having a negative return on investment.
Retail consumers rate it last in influence with a negative-to-positive ratio of 7-to-1. Studies also show that 60% of consumer and business-to-business purchasing decisions are made before ever making contact with a human being or seeing an ad.
Even ads place during the Super Bowl have a 5-to-1 turn off ratio compared to the 8.4% of viewers who buy the products or services advertised. The days of “yelling” are over.
Online advertising, too, is struggling to avoid what happened long ago to outdoor billboards. They continue in obsolescence to blight communities and roadsides by seeking favors from government even though research shows they are now rarely viewed and used by only one-fifth of one percent of consumers to inform actually buying something.
Experts estimate that nearly 2 trillion online display ads were paid for by advertisers in 2012 but not seen, not unlike the nation’s more than one million billboards have become invisible.
The problem with advertising is not just that ads are notoriously difficult to measure, but that inundated now by nearly 10,000 a day, Americans have just tuned out.
As one marketer recently said to describe advertising:
“Some brands are like that guy at the party who has had too much to drink and won’t shut up and never lets anyone get a word in edgewise and just goes on and on.”
Disney hasn’t spelled the end of advertising. The advertising industry’s greed and “more, more, more” mentality has, a lesson hopefully learned as mobile devices take everything hyper-local and makes relevance supreme.
Wolff also points to studies showing that viewing advertising is a learned and habituated activity. And the rate at which Americans are “unlearning” this habit is growing far more rapidly than even the most ambitious analysts have projected.
In an ironic way, the television audience is rapidly bifurcating.
First aired by MTV, which in 1991 was looking for something to supplant music videos, which had lost their hypnotic appeal, the now ubiquitous reality television shows appeal to 75% of Americans who are poor but to only 5% of those who are very well off.
More than half of Americans now record live video content so they can skip ads through a number of technologies, the fastest growing of which is streaming television services where for a very small monthly fee, viewers can watch what they want, when they want.
Ad-free streaming television subscriptions, including nearly 50 million now on Netflix alone, (click here for an article in The Atlantic on how Netflix reverse engineered Hollywood) are now running neck and neck with those subscribing to premium cable channels. One consumer behavior driving the shift is binge watching.
More than 7-in-10 streaming subscribers describe binge watching as watching 2-6 episodes of the same TV show in one sitting, something done by more than 6-in-10 who stream TV at least once a week.
Binge watching emerged about five years ago. A friend and I happened to try it by viewing all 121 episodes of Lost, an acclaimed ABC televisions series neither of us had watched during its initial 5 season run, over a period of a few months.
Netflix recently sent Dr. Grant McCracken, an MIT cultural anthropologist, into the homes of TV streamers to learn why they binge watch.
The source of the quote above about “that guy at the party,” he describes his interest as “where culture meets commerce and economics.”
It turns out, according to his analysis, that even in the age of micro-blogging 140 character tweets, human beings crave long narratives. Binge watching provides that.
I certainly agree that watching a season of a good series, even over the course of a week or two is enjoyable and far more preferable to watching advertising-laden versions.
Penn State neuroscientists Dr. Jordan Gaines Lewis notes on her blog that the term “empathy” was coined in 1909 by British psychologist Dr. Edward B. Titchener. “Cognitive empathy,” she notes, “examines how humans can adopt others’ psychological perspectives, including those of fictional characters.”
According to McCracken, who blogs at Cultureby.com, binge watchers are a new breed, consumers Netflix calls the “new normal.”
Free to choose content and the time when they will watch it means they become more engrossed in narratives, usually with at least one other person, rather than zoning out and mindlessly flipping from channel to channel.
Television is no longer linear, a lot less irritating and finally weaning itself from advertising. Indeed, “One of the most dramatic and consequential cultural and business developments of our time.”
Now about reclaiming those roadsides!
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