Feature: Hitting the Wall

Have we reached the limits to time and space? When people spend 96 percent of their waking day with media, is there any room for growth? The answer: maybe. Joe Mandese reports.

A couple of years ago, when satellite TV company DirecTV broke into the broadband Internet marketplace, it ran a clever, eye-catching TV commercial. The ad, called "The End" and created by Deutsch LA, showed an average Joe sitting in front of his PC surfing the Web, when the screen suddenly prompts him with a startling message: "Congratulations, you've reached the end of the Internet. You have seen all there is to see. Please go back now." The ad was hilarious because it let everyone in on the ultimate inside joke: The media universe has no limits. It is constantly expanding.

The Internet is the clearest evidence of that. At last count, Google was searching more than 8 billion Web pages, meaning there are now more active Web pages than there are people on Earth. And unlike people, media content does not die. Thanks to the Internet, it just keeps piling up. There are now 40 billion Web pages archived by Internet Archive, a nonprofit group that has even created a Rocky & Bullwinkle-esque "Wayback Machine" that can take you back to earlier iterations of Web content, stored for posterity, and adding to the morass of media content.

We laugh at the end of the Directv commercial when the man plops down on a chair next to his wife, who says, "I thought you were surfing the Web." And he replies, "I was, I finished it." You can't finish it because more content is added all the time. In fact, I'd like you to pay careful attention to this particular sentence, because by the time you finish reading it, a new media outlet will have been created. According to estimates from the Pew Internet study, a Web log is created every 7.4 seconds. That's 12,000 new blogs per day, joining a universe that's estimated at more than 17 million.

And that's just one tiny subset of one medium -- the Internet -- which is a mere constellation in the known media universe. The reality is that media have been expanding far more rapidly than even the most sophisticated practitioners understand. As good as marketers and their marketing services agents have gotten at expanding their view of the media universe, they are still limited by how they see it. Ad agencies historically have looked at the media universe primarily as the media they can place advertising in: TV, radio, newspapers, magazines, outdoor, online, etc. While that part of the media universe has been expanding with new ad-supported media options - cinema and an array of place-based media in places never before imagined -- it is still only a portion of the media that are actually exposed to consumers. In fact, it is the portion that is eroding most rapidly in terms of the share of time people spend with media.

World Without End

According to investment bank Veronis Suhler Stevenson, which publishes an annual tracking study on media consumption patterns, about 57 percent of the time consumers now spend with media involves media that are primarily funded by advertising. That's down from more than 63 percent in 1999, and is projected to erode to less than 55 percent by 2009. At some point within the next decade, vss analysts expect that relationship to tip, with consumers spending more time with media that is not supported directly by advertising. In fact, another equally significant tipping point has already occurred in the relationship between consumers and media. Consumers now spend more money on media than Madison Avenue. Consumers spend more money buying books, magazines, subscription TV services, Internet access, videos, games, and theatrical films than the ad industry invests in all the ad-supported media that are tracked and measured by the industry.

It's more than a symbolic shift. It means people are taking control of their own media procurement, and they're willing to spend more of their discretionary dollars to get that control. The reason, says one close observer of consumer behavior, is that people simply have too little time and too many options to choose from. "It's not just media," explains J. Walker Smith, president of Yankelovich Partners. "We have too much of everything. We have more work, but we also have more leisure options. What people are doing is finding new ways of prioritizing their options."

One way we are prioritizing, says Smith, is by separating things into two categories: a "zero" category of things not worth our time, and another category that is. The problem for advertisers, says Smith, is that their ad messages fall increasingly into the first category. "It's not necessarily that people want to avoid ads. They just don't want to see the same ad twice, or over and over again. And they certainly don't want to see an ad that isn't relevant to them," Smith explains. In other words, he says, advertising is simply becoming less of a priority for most media consumers because they're getting burned out by advertising.

To really understand this, pay attention to this paragraph, because by the time you finish reading it, the average American consumer is likely to have been exposed to at least one new marketing message. Marketing guru Jack Trout estimates Americans are exposed to 4,000 marketing messages a day, or a message every 21.6 seconds. Factoring in an average of 7.1 hours of sleep, Americans are exposed to a marketing message every 15.2 seconds. But some media agencies are beginning to broaden the definition of messaging beyond what has been classically included, and they now think the number may be as much as five times greater than what Trout has estimated: 20,000 marketing messages per day, or a message every three seconds someone is awake.

Agencies cite several factors for this jump. One is that the amount of time people spend with media is likely understated, because it depends largely on survey-based research. Another factor is that people increasingly are using media simultaneously, creating more opportunities for marketers to reach them. A third factor is that conventional media are more cluttered with marketing messages, both from the rise of conventional commercial inventory and the increase in product placement and branded content. But perhaps the most important change altering the supply of marketing messages comes from the way agencies look at media. Media are no longer merely conventional ad-supported outlets, but are viewed as any point of contact capable of delivering a marketing message.

That belief has given rise to a new field of media planning known as "contact planning" and its companion science of "communications planning," which attempts to understand how consumers are exposed to messages across a broad array of communications contacts. This expanded view has evolved for more than a decade, but it took on new meaning last year when the world's largest advertiser, Procter & Gamble, made it a mandate. Other marketers have adopted a communications planning perspective, but when P&G's chief marketing officer, Jim Stengel, gave a speech at an American Association of Advertising Agencies conference in 2004, it served as a wake-up call to Madison Avenue. That call was followed by a media account review that consolidated all of P&G's media planning into new communications planning accounts that were assigned to two agencies: Carat and Starcom MediaVest Group.

P&G's communications planning push was driven by a growing recognition that consumers are simultaneously being exposed to more media in more places than ever before. And consumers are prioritizing how they choose to spend time with media. The behavior may have been manifested by the emergence of new technologies such as broadband Internet access, digital video recorders, and personal communications devices, but Yankelovich's Smith says the behavior was always there and has simply been unleashed by technology and need.

Making Contact

To understand exactly how people are being exposed to the expanding universe of media options and how they prioritize their time, Madison Avenue has begun developing new tools, such as "media contact audits," that seek to measure what points of contact various consumers are exposed to, and how effective they are at bonding them to a marketing message.

Such audits can identify a virtually unlimited array of media contacts, says Kate Sirkin, executive vice president-global research director at Starcom MediaVest Group, one of the agencies that has embraced the process. In effect, she says, the media universe takes on different dimensions depending on the marketer, the marketing goal, and the target consumers. In this view, a product's packaging might be defined as a media contact, or the fountain dispenser of a soft-drink brand. Anything and everything that communicates the brand to a consumer becomes a medium, not just the traditional ad-supported options.

How to manage all those media contacts is another matter. Most agencies aren't equipped to develop and execute campaigns across so many potential choices, and tend to default to media they can manage directly. But the research is having a profound effect on the way marketers and agencies think about media, especially which media are most effective at delivering various marketing messages. In fact, some research suggests that advertising is not always the most effective form of media. Compose, a new media contact audit system developed by Kantar Media Research, a unit of WPP Group, shows that public relations is often more effective. Editorial coverage, buzz, or word of mouth frequently dominate Compose's audits, says Sarah Power, vice president, director of consumer strategies, at Carat, P&G's communications planning agency.

Taking Control

But even as Madison Avenue considers how to deal with an expanding universe of media options, other marketing services agents are looking to control it from their end. The public relations industry has always excelled at helping marketers get their messages into places advertising did not go, namely the editorial content of print and electronic news outlets. Now, they're adopting techniques that are more akin to Madison Avenue's: by creating programming that disguises corporate messages as programming or editorial content, and even buying time on media outlets to ensure they reach the proper consumers. The PR industry calls this new practice "public relations marketing," and it is to the PR field what branded entertainment is to Madison Avenue: a new way of embedding a marketing message into media content. For the consumer, it is one marketing message in a never-ending torrent.

In fact, Yankelovich's Smith says Madison Avenue is doing the opposite of what consumers want. Instead of trying to understand their time constraints, their need to prioritize their media options, and, perhaps most important, their desire to avoid unwanted, irrelevant, and incessant advertising messages, advertisers are finding new ways to disseminate even more. The rise of branded entertainment and product placement are great examples. While it is unclear exactly how many branded entertainment messages have been added to the media mix, PQ Media projects the value of product placements will reach $4.2 billion this year. That equates to less than 2 percent of total U.S. ad spending, but it's another example of the increasing load of advertising messages.

The burgeoning place-based media marketplace is another example of how the media universe is expanding, especially into new places, places where consumers previously might have sought a respite from advertising and media content. Place-based media networks can now be found everywhere from Wal-Mart stores to elevators of high-rise buildings. In perhaps the most extreme example of advertising's intrusion into personal space, viral marketing agency Alloy Media + Marketing ambushed men using urinals in bars and clubs in 15 major markets with ads for the new Sci Fi Channel series "Tripping the Rift." When they urinated, the men triggered a motion-detector device that displayed a 3-D likeness of one of the show's characters and played a 30-second audio message.

Given such intrusions, it's no surprise that people would choose to tune advertising out, says Yankelovich's Smith. The challenge for advertisers, however, is figuring out appropriate, relevant, and engaging points of contact to reach consumers. To understand that, the Advertising Research Foundation recently launched a new initiative to research the concept of "engagement," which it is touting as the new metric for measuring the return on investment of media buys. Instead of measuring whether people were exposed to an advertising message, the arf and a committee of leading advertisers and agencies are hoping to define a means of measuring whether people were paying attention.

"It's kind of irrelevant to me if people are being exposed to 20,000 marketing messages a day," says Jeff Marshall, senior vice president and managing director of Starcom IP, the digital media unit of Starcom MediaVest Group. "What matters to me is how we can break through that and create a message that is relevant enough for consumers to spend the limited amount of time they have with it." To do that, says Marshall, may require new resources for ad agencies and a new economic structure for marketing. "The key is figuring out how to minimize the portion of the audience that is not paying attention to ads because the ads are not relevant to them." Those new economics could dramatically change what the advertising world pays to deliver ads to consumers. "The cpms will go up, but we will be reaching a more engaged consumer," says Marshall.

Starcom MediaVest Group is already embracing such economics. At least two of the deals it negotiated with tv networks during the upfront buying season for the 2005-2006 television season were based on some form of delivering engaged viewers. The deals, which were struck with Court TV and The Weather Channel, remain works in progress. But based on their success, the agency and the networks expect to continue developing new engagement-based deals.

A One-Channel Universe

Buying is one thing. Planning media buys in an oversaturated media universe is quite another. The complexity of managing the number of media options available to the average consumer may be beyond the scope of any agency -- at least with any kind of scientific rigor. To understand this, consider what happened nearly a decade ago, when big agencies began using television optimizers, high-powered computer systems that help media planners figure out the most optimal schedule of TV shows to buy for clients.

In the 1980s, when there were only the Big Three broadcast networks, consultant Erwin Ephron estimates a media planner had nearly 1,250 TV scheduling options to consider. By the mid-1990s, with more than 100 national broadcast and cable networks, Ephron estimated the number of combinations that could go into a tv advertising schedule was 1.25 quadrillion. Nearly a decade later, both the national TV marketplace and the total media universe have grown even more complex. Exactly how complex may not be measurable -- at least not in conventional terms.

Just consider the medium of network television. While the number of programming networks available to the average viewer may have some theoretical limits, the number of channels may not. Nielsen lists hundreds of broadcast, cable, pay TV, regional sports, and pay-per-view networks in its national TV ratings database. However, the number of programming options for individual viewers who use digital video recorders or have access to video-on-demand is theoretically limitless. DVR owners can program their own schedules, effectively creating personal networks, while VOD is a portal into an unlimited array of program choices.

"We've evolved into a one-channel universe," says Shelly Palmer, president and founder of Palmer Advanced Media, a consulting firm that advises media companies and advertisers on new-media strategies. By one-channel universe, Palmer is referring to the channel "3" or "4" that most conventional TV sets need to be tuned to in order to interact with a digital set-top device. In theory, he says, an unlimited number of channels can be funneled through that single channel. Even if TV is consumed via another platform, say Internet bypass, or IPTV, Palmer says the reality is that the programming is still effectively coming through a single channel or the browser page of a computer.

Palmer's one-channel universe theory contrasts to the apocryphal 500-channel universe, which is frequently credited to cable impresario John Malone. The 500-channel figure is actually a vestige from the '80s based on the number of channels a cable operator might ultimately be able to distribute via digital compression technologies. The modern-day digital-media landscape may make such channel notions irrelevant, but it raises big questions for both consumers and advertisers of media.

For consumers, a virtually unlimited media universe raises the question of how much media people can consume. For advertisers, it raises that question, as well as another one: How do you plan media buys in a world where people consume media on-demand and without regard to any concept of scheduling. It's a big challenge for Madison Avenue, which has based the science of media planning on the linear notion of reach and frequency: How much of a target audience a media schedule is likely to reach, and how many times people will get to see it.

As Yankelovich's Smith points out, the effective reach could become zero unless the advertising is relevant to a consumer, while the frequency could be one, unless the ad has residual value for the consumer to watch repeatedly. In a way, that may ultimately prove to be a good thing for advertisers and agencies, who theoretically only want to reach relevant consumers and don't want to reach them with wasted messages. The problem is how to plan a media schedule that will achieve that in a world of unlimited possibilities.

Probing the Outer Limits

The reality is that the media universe likely has limits, but they're not technological. They are human limits. In theory, human beings can only spend so much time using media. Secondarily, they can only spend so much money paying for media. When those two limits will occur is not entirely clear, but Jim Rutherfurd is working hard to find out. Rutherfurd, executive vice president and point man for media-industry tracking studies at Veronis Suhler Stevenson, has been working on an analysis that has yet to make it into any of the bank's annual tomes. It's still what he describes as a "back-of-the-envelope" project to figure out how much people can spend on media before they exhaust their capacity to spend more. The equation is an important one for Madison Avenue, because the more money people spend on media, the more likely they are to avoid media with advertising in it.

Currently, Rutherfurd estimates that the average American shells out about $70 per month buying media. That's per person, not per household, and factors in each individual's share of household media costs such as cable TV and Internet access. "By 2009, we project that media will break $1,000 per person per year, or about $85 per month. Now that might seem like a fairly high percentage of discretionary spending, but even at that number, there would seem to be considerable room for growth," he says.

One reason for that growth is that people keep discovering new uses of media. "It's no longer just news, sports, and entertainment," says Rutherfurd, "People use media to stay connected. They use it to advance their educations." So-called e-health applications are likely to further expand the uses of media, he says.

But unlike money, the amount of time people can spend with media appears to be reaching its limits. vss estimates the average person currently spends 9.54 hours per day with media, more time than he or she spends sleeping, working, or doing any other activity. Even so, VSS projects we will continue to spend more time with media. By 2009, VSS projects the average person will spend 9.74 hours each day with media.

But even these numbers may be conservative. The vss analysis is based on standard industry measures of sample-based research like Nielsen TV ratings and Arbitron radio ratings, which some believe understate the actual amount of time people spend with media. Using a more rigorous method of direct observation, researchers at Ball State University's Center for Media Design are poised to release a new study that puts media use at about 69.5 percent of the time we are awake.

Significantly, both studies are looking at the gross amount of time that consumers spend with media. If the simultaneous use of media, or multitasking, is factored into the equation, BSU's so-called Middletown Study estimates we spend the equivalent of 94 percent of our waking day with media.

As a result, multitasking has become an important variable in understanding the limits of the media universe, especially as it relates to things like advertising and engagement.

Magic Number Seven

Yankelovich's Smith says multitasking is a new skill we are adopting to deal with the overload of lifestyle choices. New media technologies are merely enabling us to do more of it. But even multitasking would seem to have its limits. Evidence of that comes not from the media industry, but from the field of cognitive science, which says human beings can only process so many options, including media options, at any particular time. It's a concept that dates back to 1956, when Princeton University psychology professor George A. Miller wrote the paper, "The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information." In essence, Miller said that confronted by a virtually unlimited array of choices, human beings can still only process around seven, plus or minus two. Interestingly, that number appears to have held up pretty well throughout the expansion of media options, though some new research suggests that even that principle may be beginning to show its limits.

One of the best examples of this rule is the TV-viewing research released annually by Nielsen, which shows that even as the number of tv channels available to the average household expands, the number of channels that are actually viewed remains limited. In 2004, Nielsen estimated the average TV household could receive 92.6 channels, but only "viewed" up to 15 of them. In the most channel-rich households -- those receiving an average of 157.3 channels in 2004 -- only 19.4 channels were actually viewed.

These findings have always been a source of comfort for advertisers, agencies, and the major media companies, because the assumption is that most of the media channels consumed by people are the major ones. And while that is generally true, the share of viewing to the majors continues to fragment, while much smaller players begin to account for some of the viewing in the rest of the spectrum. Step out of the tv universe for a moment and consider how this might play out on the Internet, where most of the traffic goes to big portals, search engines, and major content destinations.

And that's just TV and the Internet. The reality is the supply of all media is expanding -- even a medium that would seem as static as print. Both magazines and newspapers have expanded online and are rapidly adopting digital editions. They are also experimenting with wireless technologies for distributing print media content to mobile users. And in a surprising development, publishers are exploring how they can use an emerging technology, radio-frequency identification tags (RFID), to embed wafer-thin chips into paper or print chips directly on paper that can interact with nearby electronic devices. The reality is that all media are going digital, and that expands the number of distribution and format options. As part of a massive longitudinal study on media penetration, media agency Carat has projected that by 2007, 50 percent of all media will be digital. That's all media, not just electronic media.

But an even more fascinating statistic used by Carat suggests that consumer time spent with media may not be as limited as some people think. The data shows that younger generations are evolving into greater media multitaskers than preceding generations. "Twenty-five to 34-year-olds use around 1.2 types of media simultaneously, while 18- to 24-year-olds use 3.7 to 4.2 [media] at the same time," says Cory Treffiletti, senior vice president and managing director of Carat Interactive, San Francisco. "Younger generations are much more effective at multitasking and processing different forms of video at the same time than their slightly older counterparts. This supports the idea that clutter is getting worse and the audience is becoming more adept at processing and blocking out what they do not need."

Yankelovich's Smith refers to this as adaptation, but some people believe there is something more fundamental going on - that people may actually be evolving because of the media they use, and that that is making them more efficient users of media. In his current best-seller, "Everything Bad Is Good for You: How Today's Popular Culture Is Actually Making Us Smarter," author Steven Johnson makes the case that the proliferation of media - especially the kind of short-attention-span media TV and video games are often accused of being - is forcing people to think harder than supposedly serious media like books or periodicals. He correlates this with the fact that IQ scores increased with each passing generation.

While experts ultimately believe there has to be a finite amount of time and money people can spend on media, it seems that for the moment at least, no imminent limits are in sight. And in an ironic way, media itself may be breeding a new capacity to consume media. Now congratulations, you've reached the end of this article. You have read all there is to read. Please go back now. M

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