Nightly business report
the advertising industry has blossomed
into a global powerhouse with spending
worldwide now exceeding $430 billion a
Long gone are the days when a single
television show and its commercial
messages could attract more than 70
percent of the audience, as an episode of
"I Love Lucy" once did.
The business model has been built around
the 30-second TV commercial.
Ten years ago it was 80 percent of our
media investment. Today that is less than
50 percent. It is not that television will
continue to decrease, but we're starting to
use media in different ways:
But most agree a successful 21st century
marketing strategy requires adding the
new media into the mix.
Internet marketing can be complex for all
involved, but it can also be very profitable.
Just look at the market caps of Google,
Youtube and Myspace.
Web advertising jumped 33 percent in the third
quarter, hitting a record $4.2 billion.
Eight years after it first went online, Internet
search giant Google has a market cap of $130
Banner ads continue to be attractive on contentoriented sites because they can be tailored to
the audience and because their effectiveness
can be measured, if advertisers take the time to
learn the new technologies.
Advertisers are also using new technologies to
spread the word in ways which are more wordof-mouth than paid advertising. They go online
themselves in blogs and discussion groups on
popular sites like myspace, the social networking
site which was purchased by Newscorp for $580
million. And they plant video of products, movie
clips, and TV shows on sites like You Tube, the
fast growing video blog site just purchased by
Google for more than $1.5 billion.
Many cell phones report their location, and
these will allow for location-dependent ads
to be sent to customers, asking, for
example, for information on nearby
restaurants, banking machines or gas
Although the new technologies are
generating a lot of buzz, they draw only 6
percent of total advertising dollars and
traditional media is fighting hard to
maintain its market share
ABC-TV puts its prime time network shows on the
electronic shelves of Apple's iTunes store. It
charges a fee for each download. CBS puts local
news from its TV stations on the Yahoo! web site.
Yahoo! will sell advertisements and share the
revenue. And CNN, after trying a paid subscriptionbased system for downloading news video,
removes the fee but begins each story with a
commercial. After first ignoring and then fighting
many of the new technologies, the big media
companies have now come to accept that
consumers want to be in control. The companies
are scrambling to find new ways to deliver their
messages and to sell a total marketing package
involving multiple delivery platforms.
Both the media giants and the advertising
agencies now realize that consumers don't
automatically skip marketing messages; they
skip boring ones.
American Express is a case in point. Always a
multi-platform marketer, television now
demands less than half its ad budget. Much is
spent on direct mail and in providing unique
services to American Express customers. Where
TV is used, the messages are designed to stand
out from the clutter with first class production
effects and compelling story lines.
Some of the oldest forms of advertising have
entered the digital age. These outdoor billboards
can change their messages quickly and some
can respond to requests for information from
people on the street using their cell phones. Big
media and advertisers are also placing their
messages wherever an audience might be
found. Sony Music, Nissan, Adidas, Toyota and
Starwood Hotels are just some of the companies
experimenting by running marketing campaigns
in an online game called "Second Life," where
players create a virtual world.
$70 billion a year is still spent on television
advertising and to help cope with video
recording devices which let consumers
skip commercials, the industry is looking
to measure commercial viewership
separately from program viewership.
Selling by yelling is over. In this period of
time, with the opportunities to see things
any time you want, the content just has to
be really, really riveting.