Feature

Old media, new edge

By using new technology, can traditional media compete with the internet and deliver a compelling proposition for advertisers? Campaign rates their chances.

In delivering the keynote speech to this year's MipTV gathering in Cannes back at the start of April, the WPP chief executive, Sir Martin Sorrell, struck what is now a terribly familiar balance in assessing the TV industry's future prospects.

No, of course, old-fashioned media owners weren't going to die out overnight, he said; but, yes, the recession was likely to accelerate a process of historical inevitability where old media were concerned.

And, of course, the underlying assumption in many quarters of the industry is that, in the long run, traditional media have pretty much had it - they're rapidly becoming smokestack industries littering a latter-day information rust belt.

It has been child's play for a handful of relatively fresh-faced companies to acquire the high moral ground where technology and media is concerned. Just after MipTV, for instance, a report from Microsoft, entitled Europe Logs On, stated that by next year we'd soon be consuming more internet media content (in terms of hours per week) than TV programming.

It took a while for anyone in the television industry to rouse themselves to point out that, in fact, this study reached meaningless conclusions based on a flawed analysis of shaky data.

On the other hand, there's no getting away from the fact that traditional media owners have been losing alarming amounts of revenue to the internet (notably search, notably Google). Television advertising revenues in the UK were down by around 20 per cent year on year across the first quarter of 2009 - and the outlook for the rest of the year is anyone's guess. It's clear, though, that television is continuing to lose share.

But the truth is, we still watch an awful lot of television. It's a quality experience for viewers and a quality environment for advertisers. And we still consume an awful lot of all sorts of old media - across the board. Outdoor still stakes its claim to be a genuinely broadcast medium - and cinema attendances are booming.

What's more, it's often forgotten that, actually, these self-same chronically-out-of-touch media dinosaurs were and are at the forefront where new technologies are concerned. Video-on-demand, for instance, wasn't invented yesterday by YouTube. It was pioneered in the late 80s by Time Warner in the US and in the UK by the cable television concerns that merged, eventually, to form Virgin Media.

Traditional media have always been unsurpassable at delivering high- quality content to mass audiences - and when you bolt clever bits of technology on to this, you might just have an exceedingly compelling proposition indeed.

Campaign examines the claims of four examples of ways in which technology is being developed to enhance mainstream media.

It's no surprise to find that two of them - HDTV and 3D in both television and cinema - are being pushed forward in an effort to drive picture quality (and the general viewing experience) to astonishing new levels.

Because this, of course, is the internet's Achilles' heel - for the foreseeable future, the web is where you will go if you want a lo-fi viewing experience. The infrastructure and switching technologies used by the internet just won't have the bandwidth capacity to deliver much in the way of HD or 3D.

A note on the scoring: In all cases, 5/10 represents the status quo. A new technology has to score more than 15 out of 30 to be seen as a genuinely exciting opportunity for advertisers.

HDTV (and 3D too)

BSkyB launched its high-definition decoder box in May 2006 and by the end of the fourth quarter 2008, it had 779,000 HD customers. The run-up to Christmas was good in terms of the sales of HD-ready sets. There are now more than seven million HDTV-ready homes in the UK.

Take-up has been relatively slow on the Virgin Media cable platform - but more than 500,000 homes have the V+ box, which will deliver HD should you wish to upgrade. HD is being introduced on Freeview this year.

Most major sports covered by Sky are produced entirely in HD now and it has nine HD movie channels. Over on Sky One, all major US acquisitions come in HD format.

3D is a lot further off, although Sky made much of a live trial it conducted at the start of April, when it used 3D camera rigs to cover a Keane gig in one of the studios at Abbey Road.

But mass-market 3D TV is a long way off. Talk at the CES consumer electronics trade fair in Las Vegas in January was that sets won't be available in numbers in the UK until the end of 2010.

HD advertising is described by Sky Media as being at an embryonic stage. Only Sony and Ford have run HD ads in the UK - and Sky had to make special arrangements for them.

Creative opportunities: 6/10

3D TV might, in time, be seen as a huge creative opportunity (see our separate box on 3D cinema) but, from an advertising point of view, HDTV is proving a much smaller earthquake. The figures tell it all. Two advertisers have been bothered so far. Simon Bevan, the head of broadcast at Vizeum, doubts whether, for the television medium, HD can be regarded as a creative "game changer".

Audience boost: 4/10

There's some evidence to suggest that some viewers tend to watch more television when they switch to HD, at least in the earliest stages. But, almost by definition, the early adopters will be those who tend to watch a lot of television in the first place. And the worry is that they might tend to seek out the best HD content - films and sport, for instance - where they are likely to see less advertising.

Impact on advertising effectiveness: 5/10

Fans of high definition argue that as the pictures are crisper and clearer, so the audience engagement is livelier. Not significantly so, the sceptics respond- the step change here is a bit like the one involved in switching from analogue to digital satellite a decade ago.

Grand total: 15 out of 30

TARGETED ADVERTISING

On the face of it, targeted advertising seems a rather modest proposal. But actually, this could spark a fundamental change in the way that advertisers think about the TV medium - and it could have far-reaching implications for the way that it is traded too.

That said, the industry is rather disappointed that it's not going to get what it believes it was promised a couple of years ago. Back then, when this opportunity was first mooted by Sky Media, it was hoped that Smart TV, as the system has been dubbed, would be able to offer different commercials, as required, to each and every Sky subscriber.

At the Thinkbox Televisionaries event in November 2008, Sky Media's managing director, Nick Milligan, said the system could be up and running by 2011 - but in its first iteration it will be used only to offer targeting on a regional basis. As a precursor to this, Sky has this month launched its "green button" advertising, which allows for greater amounts of ad content to be served to viewers than "red button" technology.

Smart TV basically maintains a comprehensive library of current ads on your Sky+ box - and these can be scheduled into breaks as required. Theoretically, Sky can use data gathered from its SkyView audience research panel to serve commercials perfectly tailored to a viewer's demographic profile or behavioural patterns - but, for the foreseeable future, Sky will continue to be sensitive to any accusations that this would constitute an invasion of privacy.

Other digital platforms, for instance, Virgin Media's cable network, particularly within video-on-demand services, are looking at similar offerings.

Creative opportunities: 7/10

When you are able to target smaller groups, you are able to produce different executions tailored to their circumstances, their attitudes or their previous relationship with a brand. There are production cost implications, but taking a granular approach will not be compulsory. For some agencies and their clients, however, this will feel like the opening up of a much broader canvas.

Audience boost: 5/10

Little or no impact. People don't watch more TV just because they feel the ad breaks might be more entertaining or flattering.

Impact on advertising effectiveness: 9/10

This is the really exciting bit. As Jean-Paul Edwards, the executive director of futures at Manning Gottlieb OMD, puts it: "The opportunity to segment audiences into smaller niches with specific messages can make TV a far more efficient media vehicle. The devil is in the detail but the opportunities are potentially huge."

Grand total: 21 out 30

OUTDOOR AND BLUETOOTH

For years, when outdoor agonised about how it was going to join the digital revolution, it focused almost entirely on content delivery techniques - digital screens, mainly, and thin film "digital ink" technologies. And then it began to realise there was another way.

Why not use Bluetooth's short-range wireless protocols to allow poster sites (or, even better, more elaborate, specially built experiential marketing structures) to communicate with passers- by. You could then open up a dialogue that could be developed and enriched long after the original contact had been made.

Unfortunately, though, the outdoor-Bluetooth combination (it's the oldest of the "new" techniques we've decided to look at here) has already begun to fall out of favour.

Chris Marjoram, the managing director of the outdoor specialist IPM (which has run several Bluetooth-enabled campaigns), comments: "Our response rates have been good. In one campaign at Victoria station, we had 19,000 downloads, which was very encouraging. But the industry has been focusing on other ways of using technology (touch screens, for instance) to invite engagement."

Which is fine, some observers say - but these easier forms of engagement lack the digital "stickiness" that many had hoped Bluetooth would deliver. Interestingly, the media owners currently keenest to pursue the opportunity are the cinema chains, which offer Bluetooth downloads via their foyer six-sheet sites.

Creative opportunities: 3/10

Even the advertisers who've dabbled with the Bluetooth-outdoor combination have been coming to the conclusion that it's too cumbersome, too expensive and just too much all-round hassle. Especially as, once you've committed yourself to the expense of the infrastructure required, this starts to restrict the sort of branding message you can convey on the sites you've chosen. And often, it's not enough to sex-up a few six-sheets - you have to build experiential marketing "zones" on public concourses such as railway stations.

Audience boost: 6/10

On the other hand, once you've committed to that investment, you're going to attract attention. You won't persuade everyone to enable their Bluetooth and take the download on offer, but many will take the bait - and there will be many more who'll stop and think about it. That in itself is a valuable addition to your audience.

Impact on advertising effectiveness: 8/10

And those who do choose to download could turn out to be very valuable customers indeed. You have to assume that, in the very act of switching on their Bluetooth, they've already exhibited a commitment to the brand - once they've declared themselves, there's every hope that an advertiser can lead them into even deeper levels of engagement.

Grand total: 17 out of 30

3D CINEMA

There was a good deal of hullaballoo surrounding 3D cinema over the Easter holidays. In the US, Monsters vs Aliens was shown on around 5,000 regular screens and 2,100 3D ones - yet the 3D screenings were responsible for 56 per cent of takings. Figures in the UK, where penetration is less advanced, were said to be similarly encouraging.

Sceptics point out that the medium has had two previous attempts at breaking 3D and both have failed - aside from associating the technology once and for all with trashy B-movies.

Critics say 3D is primarily a gimmick - and directors end up doing stuff that will deliver stunning 3D effects, to the detriment of good storytelling. That's dangerous, given the fact that the success of cinema, historically, has been built on its power as a storytelling medium.

Ad agencies point out that almost all the modern 3D films have been family orientated productions - and the family audience is not of interest to the sorts of advertisers that have traditionally used cinema.

Creative opportunities: 9/10

As Simon Willis, the head of Group M cinema, puts it: "Every director in the industry will want to have at least one 3D commercial on their CV - and that's going to be a big factor (over the medium term). Many advertisers will get behind this too."

Audience boost: 6/10

There's already a huge amount of debate about this in the industry. There are those who doubt whether the cinema chains are totally serious about the long-term investment needed to make 3D the industry's default standard - and there have been petty squabbles over the past couple of years between the chains and the big film studios about who's going to pay for what - right down to the cost of the 3D specs.

The big cinema chains beg to differ. Odeon, for instance, points out that by July, 70 per cent of its cinemas will have at least one 3D screen and that it is on target to meet a long-term goal of having 30 per cent of its screens enabled - though it won't divulge any accurate notion of a target date for this.

Impact on advertising effectiveness: 6/10

The industry will regard this as a hugely unfair score. However, the truth is that cinema is already the most impactful medium there is. True, 3D will enhance that status - but not by life-changing amounts.

Grand total: 21 out of 30

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