Mediacom Marketing Digest

26 JULY 2005

MEDIACOM

Marketing Digest

P O W E R . T O . T H E . P E O P L E

Is Democracy Being Served?

The Election date has been announced and the race is on. Stand by for a steady stream of subjective, reflective and defective invective over the next few weeks as we count down to September 17. And yet - will you actually see or hear as much electioneering as you should? Yes, the News and Current Affairs shows will be supersaturated. There'll be Election Specials, Debates, Chats, Commentaries, Monologues and Diatribes. And there'll be TV and Radio advertising, courtesty of public funding allocated via elaborate protocols and arcane formulae by the Electoral Commission. But the dollars actually given over to our various political parties to make their case for truth, justice and the Kiwi way simply haven't kept pace with media inflation and audience fragmentation.

Yes, this year the total allocation has increased - up from $2.081 million to $3.2 million, the first increase since 1990. Labour's been given $1.1 million, just enough for it to qualify as fifth biggest TV & Radio spender (based on the month of September 2004). On the same basis, National's $900,000 allocation would see it occupy the lucky 13th spot. Unfortunately for our smaller parties, the $200,000 allocated to ACT, the Greens, NZ First and United Future means that more than two hundred other advertisers are spending more than they are on radio and television in the course of the four week lead-up. Looks like Head & Shoulders Anti-Dandruff Shampoo needs to be included in post-election coalition talks. As for the Maori Party, its $125,000 is enough to help the organisation narrowly outperform the Kelloggs Nutri-Grain Bar and clock in at Number 345.

If we cast our gaze back ten years, we note that the average cost to reach 1% of voters on television in September 1995 was $496. In September 2005 that ratecard cost has risen to $953, a 92% increase. In comparison, Electoral Commission funding has only risen 55% - and that chunk of change has to cover all the MMP-powered parties as well.

The last thing we want to encourage is more political pontificating. And, budget surpluses notwithstanding, we'd hate to see our hard-earned tax dollars funding even more egos. But television and radio have evolved, segmented and fragmented in ways that our electoral administrators never envisaged. By 2008 Personal Video Recorders, free-to-air digital channels and TV via Internet will distort the picture even more.

We reckon it's time to change the rules. Yes, let's keep funding allocations but let's also allow political parties to buy their own airtime, up to a mandated limit (that reflects agreed industry performance standards). Let's make fundraising for this purpose transparent, lest some overseas government buys our elections and installs its own puppets.

If we don't shake things up, pretty soon the silent majority will turn into the deaf majority, unreached and untouched by the political musings of those who would be king (or queen). Yeah, many reluctant voters would love to live in a cone of silence but the imperfect-but-it's-all-we've-got mirage called democracy requires the people to participate, at least a little bit every three years.

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Shock! Horror! News!

In the headlines: TVNZ surprised the industry last week by announcing that pricing for their flagship News programme will decrease by between 10 and 15% on specific nights for August and September, effective last Thursday.

The announcement was accompanied by this explanation: "TVNZ runs a demand driven ratecard. Our initial third quarter pricing for News was based on extreme levels of demand experienced in previous quarters for the property. The pricing strategy was aimed at levelling out demand and creating some inventory for the short market. Although demand remains strong year-on-year, the pricing strategy has created more additional inventory than anticipated. Therefore, in keeping with our demand driven pricing philosophy, we are reducing the rate on specific nights where more inventory is available."

All airtime currently held in the timeslot will take on the new rate with the pennies thus released required to be respent over the period.

We hate to say "we told you so" but ...

Nothing But Net

From 2006 top European football matches will have to be shown on the internet at the same time as they are televised live, and by the same broadcaster, the body governing the Champions League has specified. The condition, imposed by UEFA, applies to the rights to televise Champions League games for the three seasons between 2006 and 2009.

The development is also significant for handing online sports rights to broadcasters, rather than the leading clubs, which make money by selling highlights packages via their own websites, but have never been given live rights by UEFA.

The deal is significant, not so much because of the fact that it's happened but because of when it comes into effect. Programme makers, content providers and broadcasters around the world have been contemplating the transition to internet-based TV distribution for some considerable time, but here's an organisation that's gone ahead and issued a compulsory edict, starting next year.

UEFA may be first, but it's not alone. The BBC, who ran a trial of internet-delivered programming last year, is now proceeding with plans to offer its content online, free to British web users. After at first suggesting that international surfers would be out of luck, the Beeb is now reportedly considering offering its content worldwide, for a fee.

From one perspective, these moves are hugely disruptive to existing broadcast models based on geography. A TV programme is produced in one country, usually funded by the commissioning network in that country. Then the programme is sold to broadcasters in other countries, for screening at their leisure. If a programme is available worldwide via the internet, won't regional revenues dissolve away?

Potentially, yes. Or the internet could simply be an additional distribution channel, generating extra revenues without disrupting the traditional supply chain. Despite dire predictions Hollywood has managed to survive and prosper as the old "only in cinemas" model has evolved to encompass cinema, home video, pay-per-view, subscription television and finally free-to-air. Content remains king but the amount you pay to watch it diminishes as it passes through the chain from supplier to supplier.

Slicing and dicing, long the mainstay of home shopping networks, is now applying itself to the rest of television. Evolve or diet.

Dead Parrots Live

British comedy legends Monty Python are set to reunite for a six-part series to be screened in the US in 2006. All five surviving comedians -- John Cleese, Eric Idle, Terry Gilliam, Michael Palin and Terry Jones -- will regroup for 'Monty Python's Personal Best' for PBS. Each of the madcap troupe will pen their own special episode and the final instalment will be a collaboration from all five.

The show will be part compilation of original Pythonesque material along with some new clips. The Pythons have each chosen their favourite bits from old Python films and the television series and linked them together in their own crazy way.

The resurgence of Pythonism in the US can be directly attributed to the success of Eric Idle's Broadway musical, 'Spamalot', based on the movie 'Monty Python and the Holy Grail', which won three Tony Awards last month.

Can the magic be recaptured? It's a tough ask.

A Pinch of Cerebos and Three Tablespoons of McCormicks

Once upon a time there was an old convention which held that advertising and editorial were separate, not unlike church and state, and that the two should not contaminate each other. That convention, severely bent from time to time, now lies battered and beaten in a corner. Shopping magazines, where all editorial content included brand mentions and directions on where to buy the featured products, led the fight and have now subverted other categories.

Latest champion of the "editorial must include advertising" school: a new US food magazine, Relish, which will let marketers buy brand mentions in recipes prepared by the editorial staff and buy product placement among staff-recommended kitchen and home gadgets. The magazine, planned to launch in February 2006, is intended as an insert in newspapers across America, which should drag the newspaper industry into the controversy as well.

As marketers, we're certainly not averse to the notion of advertising inclusion in editorial. But we also have to be acutely aware of the fact that we advertise in magazines and newspapers because the editorial content bestows context and credibility upon our advertising. If consumers lose faith in editorial because "it's always trying to flog stuff off", we lose the ability to communicate effectively to those consumers.

We recommend caution. Not all conventions should be abandoned just because we can.

Simulbrowsing

New research by the UK's Radio Advertising Bureau, jointly funded by the Internet Advertising Bureau, has found that at any given time 20% of internet users are also listening to radio. The study, curiously, also found that 39% of respondents claimed that radio advertising has prompted them to search for something on the internet. A quarter of the survey regularly uses the internet to listen to radio stations.

The research comes as UK radio advertising is experiencing a downturn after several years of gaining share of overall adspend. It is now neck and neck with online in market share according to most surveys.

We might normally be a tad cynical about such research, given its origins amongst organisations with a vested interest in these sorts of results. However the notion does make logical sense, given the propensity - we might almost say necessity - to multitask in today's urgent environment.

The net/radio simultaneous exposure is greater amongst the under 44s, which isn't particularly surprising, is most evident at home and peaks in the early evening (5-8pm).

The report concludes with five key recommendations to help advertisers take advantage of the synergies between the media:

1. Aim for a simultaneous presence in both radio and online (duh, really?)

2. Invest in paid–for listings on search engines to follow up radio advertising.

3. Consider advertising on radio at times when the highest proportion of listeners are online.

4. Develop greater creative synergy between radio commercials and online advertising/content.

5. Put measures in place to gain understanding about the additional effect of radio on online response.

We have an electronic edition of the "Using Radio With Online" report for those seeking more enlightenment - email us at newsletter@mediacom.co.nz for your very own copy.

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