• by Tim Hanlon , April 5, 2004

MediaDailyNews today offers the second in an occasional series of guest columns penned by thought leaders from Publicis Groupe's Starcom MediaVest Group. Today's guest columnist, Tim Hanlon, is vice president/director of emerging contacts for Starcom MediaVest Group. Hanlon is responsible for all U.S. client activity and agency initiatives in the field of emerging media technologies, including Starcom's TV 2.0 practice. The practice assesses interactive TV platforms including video-on-demand, personal video recorders, interactive program guides, addressable advertising and digital broadcasting/datacasting. Hanlon also serves as chairman of the American Association of Advertising Agencies Advanced Television Committee.

As the annual ritual of the television upfront process approaches, it's becoming quite clear that the business behind the medium is on the verge of a nervous breakdown.

Television's transition to digital and the advent of advanced technologies like digital video recorders (DVRs) and video-on-demand (VOD), are transforming the medium into a consumer-controlled cornucopia of video-where choice, time, and even place of viewing are altered beyond current time-honed conventions. With hundreds of digital channels to choose from, plus the flexibility of easily time-shifted recordings, and a multitude of offerings from on-demand menus, consumers will soon have literally thousands of viewing options available at their fingertips. Video delivered via broadband Internet connections and soon, via high-speed wireless technology, will only exacerbate the phenomenon. Throw in the paradigm-busters of console gaming and home networking, and it's virtually impossible to distinguish what's what in video programming and viewing.

What's a "network" in this environment? Or a local TV station? Or syndication? How do you define audience flow in such a construct? Or a daypart? Or a rating?

Beats me.

And the consumer sitting at home with a powerful remote control in her hand probably won't know either. Or particularly care.

Programmers, media buyers, media sellers, and advertisers who don't understand what's happening here are ignorant, arrogant or worse: both. The business-as-usual approach to negotiating things like Males 18-49 and pod placement are an anachronism in a world where programming and ad messaging will increasingly free-flow across a multitude of video touchpoints, with the viewer increasingly dictating the whens and hows.

People, especially those of younger generations, aren't watching TV anymore-they're consuming video. And not in neat little definable packages like Early Fringe or first-run syndication either.

So why do we value, price, and buy it that way? The way we as an industry try to account for TV viewing behavior today may be to blame.

Clearly, the traditional diary-based survey methodology of Nielsen ratings does not accurately account for such "advanced television" behavior, and all indications suggest that the currency as we know it needs to change, and quickly. Whether Nielsen has a role in that change or not is debatable, but it is certain that more census-based and/or data-centric metrics that keep up with such advanced forms of video delivery will be needed to judge program popularity and advertising effectiveness.

Digital set-top boxes, embedded hard-drives, and other technology advances will allow the collection of numerous data points related to viewing behavior and ad messaging delivery. Linear tuning data, on-demand viewing and time-shifted viewing will all eventually be trackable via sophisticated measurement technologies within cable, satellite and broadband environments-aggregated and anonymous to protect individual and household (HH) privacy. The level of granularity will be down to ZIP and ZIP+4 levels-closer to and more aligned with data that most sophisticated marketers use in their decision-making. In turn, ad messaging will become more relevant and effective in the process.

Local people meters, portable people meters and the inclusion of DVR data into today's 5,000 home national samples are nice, small steps forward. But they are mere Band-Aids compared to the radical surgery the TV industry needs in the coming years. In 2007, when DVRs reach 30% of U.S. HHs and VOD is available in every digital cable home, are we still going to be counting on consumers to fill out paper diaries and push 1980s-era pushbuttons to accurately measure their fast-moving video consumption habits? And spend billions of marketer dollars based on it?

If we do, the ad-supported television business is doomed.

Marketers won't stand paying more and more for television of any sort when they know intuitively that actual audiences they are reaching are less and less. Not being able to more accurately measure these ever-fragmenting audiences only weakens TV's position.

Media sellers shouldn't be surprised to see dollars walk out of the medium altogether if the situation doesn't improve. Media that provides measurable data better supporting marketing ROI metrics will quickly gain favor over those which do not. If you don't believe me, point your Web browser over to American Express, BMW or the U.S. Army and enjoy their broadband video offerings while they add you to their measured audience ranks.

The irony here is that advertising has an important, if not vital role to play in television's evolution. Consumers can't bear the entire burden of programming production and distribution, and all that fancy set-top box and hard-drive technology has to be paid for somehow. Increased pay TV subscription fees can only go so high before consumers start balking. God forbid that highly targeted, relevant and measurable ad messaging could play a role and help defray and subsidize such costs. And more effectively achieve marketing goals in the process.

But it's never going to happen if the current system of audience measurement doesn't radically advance from its current state. While Nielsen and the TV industry cling to the status quo measurement and business conventions of the past forty-plus years, big-spending marketers are already questioning the very viability of the medium as a worthwhile expense.

If that doesn't get your attention, you're in the wrong business. See you on the couch.