It's Not TV, It's MHO

As far as industries go, the TV advertising business is one of the most powerful examples of the notion that culture really does eat strategy. I guess it’s because TV is such a powerful force within our pop culture. People simply care about it more than the average business, and so naturally seek to preserve its status quo, even when presented by new strategic visions. Over the decades I’ve covered the business, I’ve watched how the power of TV’s culture ultimately forced even the most potentially game-changing developments to conform to it.

Cable TV, for sure. So much so that we eventually arrived to the point where a seminal cable TV brand -- HBO -- actually sought to differentiate itself from the medium it helped redefine with the delicious tagline: “It’s not TV, it’s HBO.” Love it, but the truth is HBO is, and will always be as much a part of TV culture as any other part of TV. Same thing with Netflix, or Amazon, Vessel, or whatever platform-leaping TV distribution model comes next.

That’s because, culturally speaking, it’s all what we think of as television, regardless of how you receive it, view it or pay to access it.

But the point of this column is how the culture of television dominates the culture of advertising, and why TV has remained at the top of the ad industry’s food chain for so long. And why, I believe, that could finally begin to erode. The reason is that Madison Avenue is undergoing a culture shift of its own, and the result will be that TV’s culture may not matter as much as it once did.

To understand how the old culture worked, I’d like to share something an old boss of mine, Jack Myers once told me when I was editing The Myers Report. Jack described Madison Avenue’s media food chain as a series of boxes stacked on top of each other. Network TV, he said, was in the top box, and the top-tier cable networks were in the box below that. Second-tier cable networks were in the box below that, and so on.  According to Jack, the goal of any media property was to crawl from their box to the box on top of them, and it was the job of the media in the box on top of them to do whatever they could to block them from getting in.

The battle between cable and broadcast network TV was a great example of that. For every advance made by an ESPN, an MTV or a CNN, broadcasters would seek to stave them off through research, positioning or just plain old spin (remember CBS’ Dave Poltrack’s “Cable Fable”?).

Over time the margins between the boxes begins to erode. I’m sure if Jack were to update the scenario today, his top box would have a mix of broadcast and cable networks in it. It probably would not have any online or over-the-top video sources in it, but then Netflix currently does not carry advertising.

There are a lot of reasons why this food chain logic has persisted on Madison Avenue, but I believe culture has been the No. 1 factor. People in our business simply think TV, in general, and certain TV properties, in particular, are more valuable than other media in terms of delivering the kinds of audiences advertisers want to reach.

That’s the old world or Madison Avenue media culture. The new one, I believe, will emerge from another culture emerging from within it: digital in general, and programmatic audience-buying, in particular. In programmatic, there is still an underlying value to a media property -- but an equally if not more important value is the audience it is delivering. And that is a very different way for Madison Avenue to think about the value of media.

I can’t say for sure when the balance will shift, and I don’t think it will be unilateral. I think there are times when the dominant weight will be the value of the medium and not its audience, but increasingly, I think it will be the latter, and the job will be up to individual media properties to justify the value they bring to that equation.

In fact, the industry may already have its successor to Dave Poltrack’s “Cable Fable.” Let’s call it Ari Bluman’s “Programmatic Dogmatic,” because the GroupM exec has been among the most vocal champions for staving programmatic off.  I believe that argument will be short-lived and the market forces behind programmatic audience-buying will prove overwhelming, forcing Madison Avenue’s culture to shift. And there’s evidence that’s already beginning to happen, and it’s already beginning to affect the culture of the TV advertising business.

Earlier this week, Interpublic’s Mediabrands’ Magna Global unit updated its outlook for the advertising economy and said it was reducing its long-term outlook for TV’s role in Madison Avenue’s food chain, mainly due to the uptake of programmatic audience-buying by some major brands and categories.

“The advent of programmatic buying in digital media and the stabilization of cost for premium video inventory is now making digital media more attractive to categories of advertisers that were until now very loyal to traditional television,” the report said, citing such TV mainstays as consumer packaged goods, automotive and movie marketers as primary examples.

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