Monday, November 27, 2006

Media Fragmentation - First Crack

One of the great challenges facing media planners today is media fragmentation; the ongoing proliferation of more and more media vehicles which results in carving up the audiences for them into smaller and smaller numbers. We live in a fragmented media world. For young planners in their 20’s, it may be difficult to truly understand what that fragmentation means. The media environment was already fragmented when they came into the business.

But that wasn’t always the case. Network tv ratings were very high in the early days of television. (Recall that Red Buttons was forced off the air because he got *only* a 40 rating compared to the 60 rating received by I Love Lucy, the show that preceded his.)

Within a few years after the introduction and explosive growth of television to the viewing public, the networks established a dominant position in the production and distribution of tv programs. Initially, individual sponsors funded most of the tv programs which consisted of inexpensive live variety, talk, quiz shows, and sitcoms. But as the public became tired of this fare, the networks turned to Hollywood to spice up the programming. The movie moguls decided to work with television rather than fight it, and in 1955 the first Hollywood-produced filmed Westerns aired on national tv.

The switch to filmed programs and the adoption of one-hour dramatic formats completely altered the relationship between advertisers and the networks. Filmed action-adventure productions required an expertise that only the Hollywood moviemakers seemed to possess. The new 60-minute dramas were vastly more expensive than the comedy, variety and quiz formats advertisers had bankrolled previously, and, as a rule, their producers insisted on firm commitments for a full season's supply of episodes. Such an investment was too big for most single sponsors. Figures for NBC were fairly typical of the total network experience. So, for example, during the 1955-56 season, 40% of NBC's regular primetime entries consisted of programs developed independently by advertisers and their agencies in conjunction with producers, packagers and agents. The remainder were split almost evenly between shows the network itself produced (28%) and programs it purchased from outside suppliers (32%). By the 1961-62 season, these ratios had changed completely. At this point, NBC obtained 68% of its regular series fare by dealing directly with studios, packagers and agents. As before, the network generated a sizable amount of its own programming (25%), but sponsor-supplied shows now filled only 7% of its schedule - down from 40% only six years earlier.

The networks, in fact, ended up wielding so much control over program development and distribution, both in domestic and foreign markets, and in syndication, that the FCC stepped in to reduce the networks’ monopoly position. In 1970, the FCC issued what came to be known as the “Prime Time Access Rule” which reduced the hold the networks had over program suppliers by banning the networks from involvement in the production of primetime entertainment shows and the acquisition of subsidiary rights in any program produced by independent suppliers for national television exposure. The amount of time the networks could program in the evening (i.e. Primetime) was also reduced from 3.5 hours to 3 hours.

As a result, Syndicators filled the new half-hour Prime Access daypart with a host of first-run game shows while independent stations reaped rating bonanzas with reruns of recent off-network fare.

This was only the beginning of an assault on the dominance of the networks. A bigger challenge would come soon from cable and satellite tv.

(to be continued….)

Sources and additional reading:

Ed Papazian, Medium Rare: The Evolution, Workings and Impact of Commercial Television, Media Dynamics, 1989

Tuesday, November 07, 2006

Renaissance Man

(continued from Think Small, see 9/7/06 below)

Now, let’s see, where were we? Ah, yes….we were discussing the Creative era, and a few of the giants of that period. One of the truly great leaders was David Ogilvy.

I think of David Ogilvy as a modern Renaissance man. He was an adventurous, confident, self-starter with many talents, skills and interests who managed to bring together both the art and science of advertising like no one else.

David Ogilvy was born in the small town of West Horsley, England, on June 23, 1911 (sharing the same birthday as both his father and grandfather!) His father was a classics scholar and financial broker. The family suffered financially when England went to war with Germany, and they were forced to move to London where David grew up in the home of his grandmother. At the age of 20, Ogilvy dropped out of college and went to Paris where he apprenticed as a chef for a year. He decided against this as a career, however, and returned to England and sold cooking stoves door-to-door. He was very successful at it, and his employer asked him to write an instruction manual for the other salesmen. (Thirty years later, Fortune magazine reviewed it and called it one of the best sales manuals ever written.) His older brother, Francis, who was working at the ad agency of Mather & Crowther, showed the manual to agency management. The agency offered Ogilvy a position immediately as an account executive, where he stayed for three years.

Restless for adventure again, Ogilvy left England and came to America in 1938, and in 1939 began to work with the Gallup organization. After three years with Gallup, with World War II raging in Europe, he was invited to join British Intelligence. There he was put in charge of collecting economic data from agents in Latin America. “Our primary function was to ruin businessmen whom we knew to be working against the Allies, and to prevent Hitler from laying his hands on strategic materials,” he reported.

On his next adventure, Ogilvy spotted the Pennsylvania Amish land from the window of a train. Within weeks, he returned with his wife to learn more about the people and the land. Several years later, he purchased a home there and tried his hand at farming. After three years, and recognizing he could never earn a living as a farmer, Ogilvy gave it up and went to New York with a new idea. Why not start an advertising agency?

Ogilvy was 38 years old. He had no credentials, no clients, and only $6,000 in the bank. Yet, with the help of his brother Francis, he convinced his former employer, the London agency Mather & Crowther, to invest in the new firm. He also received an investment from S.H. Benson Ltd. Ogilvy hired Anderson Hewitt from J. Walter Thompson to serve as the President of the firm. He himself took the title of Senior Vice President of Research and handled all the creative work for the new firm. Hewitt, Ogilvy, Benson & Mather (Crowther had retired) launched in 1948 with no clients and a staff of two. From these humble beginnings, David Ogilvy built one of the most successful advertising agencies in the world.

Ogilvy attributed at least part of his success to his skill as a direct marketer. “For all their research, most advertisers never know for sure whether their advertisements sell. Too many other factors cloud the equation. But direct response advertisers, who solicit orders by mail or telephone, know to a dollar how much each advertisement sells. So watch the kind of advertising they do….I am convinced that if all advertisers were to follow the example of their direct response brethren, they would get more sales per dollar” he said. Ogilvy elaborates further on this in a speech he once gave to the advertising community in Paris:

There is a yawning chasm between you generalists and we directs. We directs belong to a different world. Your gods are not our gods.

You generalists pride yourselves on being creative, whatever that awful word means. You cultivate the mystique of creativity. Some of you are pretentious poseurs. You are the glamour boys and girls of the advertising community. You regard advertising as an art form and expect your clients to finance expressions of your genius. We directs do not regard advertising as an art form. Our clients don’t give a damn whether we win awards at Cannes. They pay us to sell their products. Nothing else.

You must be the most seductive salesmen in the world if you can persuade hard headed clients to pay for your kind of advertising. When sales go up, you claim credit for it. When sales go down, you blame the product. We in direct response know exactly to the penny how many products we sell with each of our advertisements. Your favourite music is the applause of your fellow art directors and copywriters. Our favourite music is the ring of the cash register.

You generalists use short copy. We use long copy. Experience has taught us that short copy doesn’t sell. In our headlines, we promise the consumer a benefit. You generalists don’t think it is creative.

You have never had to live with the discipline of knowing the results of your advertising. We pack our advertisements and letters with information about the product. We have found out we have to if we want to sell anything.

Ogilvy retired happily to a castle in the south of France where he passed his time gardening, bicycling, and keeping correspondence with his offices around the world. He died at the age of 88 on July 21, 1999.

I think, if Ogilvy were alive today, he would be pleased about the renewed attention to ROI that advertisers have these days. He was, if nothing else, a man who was focused on results. Yet Ogilvy would have some words of caution worth heeding.

He would have a more humble perspective of advertising than many seem to have today. He would not view the role of advertising as creating “buzz”. He would view advertising more as a component or ingredient of a product.

I doubt if more than one campaign in a hundred contains a big idea. I am supposed to be one of the more fertile inventors of big ideas, but in my long career as a copywriter I have not had more than 20, if that.

I have come to regard advertising as part of the product, to be treated as a production cost, not a selling cost.

A problem which confronts agencies is that so many products are no different from their competitors….When faced with selling “parity” products, all you can hope to do is explain their virtues more persuasively than your competitors, and to differentiate them by the style of your advertising. This is the “added value” which advertising contributes.

And he would offer some timeless advice about what makes great advertising…

Advertising which promises no benefit to the consumer does not sell, yet the majority of campaigns contain no promises whatever.

When I advertised Rolls-Royce, I gave the facts – no hot air, no adjectives. Later, my partner Hank Bernhard used equally factual advertising for Mercedes. In every case sales went up dramatically – on peppercorn budgets.

I have written factual advertising for a bank, for gasoline, for a stockbroker, margarine, foreign travel, and many other products. It always sell better than empty advertising.

The majority of campaigns fail to give consumers enough information.

And how to measure it….

My most valuable source of information is the factor analyses I commission at regular intervals from Mapes & Ross. They measure changes in brand preference. People who register a change in brand preference after seeing a commercial subsequently buy the product three times more than people who don’t.

Research organizations also measure the recall of commercials, and this method finds favor with many advertisers. But some kinds of television commercials which get high recall scores get low scores on changing brand preference, and there appears to be no correlation between recall and purchasing.

As we continue to explore the past as prelude to the future, and to better understand the rapid changes occurring in the present, it pays to remember an old saying: the more things change, the more they stay the same.

Sources and additional reading:

Danny Nathan, “David Ogilvy”, The Center for Interactive Advertising

David Ogilvy, Ogilvy on Advertising, Vintage Books, Div. of Random House, New York, 1985

David Ogilvy – Biography, Ogilvy & Mather, 2000.