New Video Devices Aplenty, But Who's On Offense?
So while economic forecasters spend the summer debating the pros and cons of stimulus versus austerity, it's clear that the macroeconomic picture in the U.S. is not looking good. Are we on offense? Or defense? WWGD?
As we stare at a sluggish 2% to 3% growth rate for 2010, our beloved marketing and advertising sector also has few bright spots. On the plus side, the upfront did well for the cable nets and programmers (many claim to have exceeded their expectations). Meanwhile the networks continue to struggle with decreased ratings and the concurrent integration and over-layering of digital offerings, acquisitions, digital business models and too much digital inventory. Net-net, it's not likely to be a banner year for big media. Concurrently, even Google is sending signals that, at a macro level, its growth will slow both internally and externally. Which means the digital publishing and online video business downstream are likely to creep right along in tow.
Will social media really fix all this and put us back on offense? Get real.
Over on the consumer side of the equation, America continues its love/hate relationship with Apple and Steve Jobs. Yet, one would think the prospect of new video ad models and consumer experiences around iPads, iAds, androids and e-readers would be lighting up innovation and ad spend in both new video ad units and branded content platforms on new devices. Yet, from where this creative sits, innovation seems to be the last thing on most marketer's minds.
Let's examine who's on defense. Here's the starting lineup:
1) Skittish national advertisers ran with the cable upfront for fear of getting creamed in scatter as they did in 2009/10. (Congrats to the cable nets!). On the digital side, they all talked the talk at Cannes, but the walk is likely to remain to be all about ROI on their whopping 5% to 8% of spend. Good for the DR agencies. Bad for the idea-driven shops... and frankly, online video, where brand spots primarily reside. 2) Privacy-stricken government regulators remain convinced that we are on a clandestine mission to behaviorally target our way onto people's devices and into their personal lives, grabbing all the private data we can along the way to eventually deliver addressable video creative at the household level. Perhaps we can actually do this on the media side, but creatively we're nowhere close even if we wanted to. The plumbers are ready. The poets are not.
3) Overzealous corporate procurement officers continue to squeeze agency margins from the bottom up, many getting performance bonuses on how much they can save marketers on their "agency partner" expenditures. So much for the value of ideas.
4) Big agency brands are struggling to remain relevant while believing that shuffling their executive decks and racing to integrate digital from outside their walls into cross-channel offerings within their venerable Madison Ave. nameplates will be enough to stay alive. (I'm actually rooting for these guys because if they go, so too will the price of big brand-building platforms and ideas. Most creative boutiques are great at doing culturally relevant work that grabs headlines, but notoriously poor at pricing and running sustainable businesses.)
5) Skittish cable operators whose "triple plays" are being eroded by the scaling of IPTV, IP-enabled TV sets, video program guides -- and beware the Apple in the room, AppleTV, complete with the iTunes platform. Could this mean home networking at last brought to you by anything but a cable TV box? The cable nets might be flush with cash from this year's upfront, but what of their beloved subscriber fees once cable operators start getting hurt?
In short, it's mid-season, and there are a lot of players on defense.
Now let's look at who's on offense.
1) Apple continues to stun the media distribution world with its closed iTunes platform. We whine, we moan, yet, we buy -- in the millions. iTunes is now effectively the largest music distributor in the U.S. Apple iphones have somewhere between a 3-5% share of the cellular phone market, but are earning the lion's share of the margins in the handset category. Not to mention iPads, iAds, AppleTV and whatever other stealth new video-enabled products Jobs has being planted in a random SF pub in the months ahead. Maybe the next new thing will show up in Mountainview?
2) Print publishers, despite their loss of ad pages, are in a fight for their very survival and new revenue streams. The debate over paid versus free content continues, but as e-readers and iPads continue to scale, both newspaper and magazine publishers are moving quickly to put their traditional content on digital steroids - including online video. Will a business model follow? Enhanced print ads and video ad insertion should be a no-brainer here. Necessity is the mother of Invention.
3) Google. With Google's AdMobs acquisition, watch for expansion from Android to eReader video and text ad insertion at the local level -- after all, with it's cloud computing infrastructure, database and gmail platform there's nothing holding Google back from introducing more ad innovations but macroeconomic stagnancy - and that's a few levels up.
4) Media service agencies. Long the cash cows of the agency holding companies, media service agencies are busy racing to build out their own demand-side technology platforms to replace those intermediating their business from the outside.
5) The database companies. As more data becomes monetizable, the data gatherers once searching for a business model have become the new stars of Madison Avenue. In an audience-based media mix modeling and buying mentality, the lifeblood of the DSP's will be the quality of their data. Enter Quantcast, Nielsen, comScore, and every other data miner investing in a myriad ways to deliver agencies, media and marketers the data that will help them automate reach and relevance. Revenge of the data nerds continues full-force here.
Perhaps, in these chaotic times, the best offense is a good defense. But whether you're on offense or defense, the question is, are these really opposing teams?
For the most part, no. Interdependencies abound. The question is, will the marketing line item itself follow the defense, or more importantly, who among marketers will be brave enough to go on offense?
From where this creative sits, healthy balance sheets have always beat big ideas, which is why, Mr.Steinbrenner, we in the American Advertising League just might be in for a very long ride before the offense gets back on the field.