Friday, December 22, 2006

Dawn of a New Era

(continued from The Twilight Zone, see 12/4/06 below)

No technology in our lifetime (including television) has had a greater impact on us than the internet. The internet, and its chief consumer application, the World Wide Web, changes the way we communicate, the way we socialize, the way we work, the way we play, the way we shop, the way we sell, and now, too, the way we advertise. As has been said, the internet changes everything.

In August, 1962, J.C.R. “Lick” Licklider of MIT wrote a series of memos discussing his “Galactic Network” concept. He envisioned a globally interconnected set of computers through which everyone could quickly access data and programs from any site.

In October of the same year, Licklider became head of the computer research program at the Advanced Research Projects Agency (ARPA), an agency of the U.S. Dept. of Defense responsible for the development of new technology for the military. (ARPA was later renamed DARPA, the D for Defense, then renamed back again to ARPA, then again, finally, we hope, to DARPA. It’s the government. Go figure.) Licklider convinced his successors, including MIT researcher Lawrence Roberts, of the importance of this networking concept.

Meanwhile, Leonard Kleinrock, also of MIT, published the first paper on packet switching theory in 1961. Kleinrock convinced Roberts of the theoretical feasibility of communications using packets rather than circuits, which was a major step along the path towards computer networking.

In 1966, Roberts went to DARPA to develop the computer network concept. He published his plan for the “ARPANET”, which ultimately evolved into the internet, in 1967. In October of 1969, the first host-to-host message was sent successfully, and by the end of the year four host computers were connected together into the initial ARPANET, and the budding internet was off the ground.

In 1972, the ARPANET was introduced to the public at the International Computer Communication Conference. It was also in 1972 that electronic mail – email – was introduced.

The Internet as we now know it embodies a key underlying technical idea, namely that of open architecture networking. In an open-architecture network, the individual networks may be separately designed and developed and each may have its own unique interface which it may offer to users and/or other providers, but the networks can communicate with each other.

The idea of open-architecture networking was first introduced by Bob Kahn shortly after arriving at DARPA in 1972. In the Spring of 1973, after beginning his initial “internetting” effort, Kahn asked Vint Cerf (then at Stanford) to work with him on a detailed design of the new open-architecture protocol. They teamed up to spell out the details of what eventually became called the Transmission Control Protocol/Internet Protocol (TCP/IP). A key concept of the Internet is that it is not designed for just one application, but as a general infrastructure on which new applications could run, as, for example, the World Wide Web. It is the general purpose nature of the service provided by TCP/ IP that makes this possible.

Widespread development of Local Area Networks (LANS), PCs and workstations beginning in the 1980s allowed the Internet to flourish. The growth has been astounding:

Date Number of Hosts*

Dec, 1969: 4

Dec, 1979: 188

July, 1989: 130,000

July, 1994: 3,212,000

July, 1999: 56,218,000

July, 2004: 285,139,107

July, 2006: 439,286,364

*Hosts = a computer system with a registered ip address

Source: Hobbes’ Internet Timeline, v8.2,

With the communication infrastructure of the internet in place, and the application of the World Wide Web and search technology such as Google putting the power of the internet into the hands of ordinary people, our world became different. The changes brought us into a new era in advertising, too.

Oh, what timing. Here it is, the end of 2006, and a new year is about to begin, too. As 2007 begins, we will quickly wrap up our historical review and begin to discuss this new era. We’ll examine how the old merges with the new. No longer reviewing history, we will collectively take our place to participate in the writing of it. It’s an exciting time to be in advertising, don’t you think?

Welcome to….the People era.

Have a safe and happy New Year everyone!

(to be continued….)

Sources and additional reading:

Barry M. Leiner, Vinton G. Cerf, et al, “A Brief History of the Intenet”, Internet Society,

Hobbes’ Internet Timeline, v8.2,

Walter Howe, “A Brief History of the Internet”,

Wikipedia, “History of the Internet”,

Monday, December 04, 2006

The Twilight Zone

(continued from Media Fragmentation – First Crack, see 11/27/06 below)

We’ve been discussing a period of time I call The Creative Era, from 1904 leading up to about 1994. (As we get closer to the present, it gets harder to say when one period ends and another begins; we lack the distance of time for a truer perspective.)

Within The Creative Era, we’ve also talked about a period I call The Air Raid, from 1922-1975. This is a period that saw the birth and growth of broadcast media. Television especially helped fuel The Creative Era as the new technology proved a cultural phenomenon that quickly captivated the population as a whole.

Indeed, the period after World War II was the “perfect storm” for marketers. There was pent-up consumer demand, and there were wonderful, new creative advertising possibilities provided by television, along with tv’s huge audience numbers (and fewer means for commercial avoidance). Imagine the ROI then!

The sun began to set on broadcasters, however, in a period of time I call The Twilight Zone, from 1975 – 1994. This was a period in which cable and satellite grew and encroached on the broadcasters’ domain. The end result is the media fragmentation that continues today. (Of course, a similar proliferation of media occurred in other media types too, especially magazines and outdoor.)

As early as 1948, several cable tv pioneers set up transmission systems to relay broadcast television signals to homes that could not receive off-air signals.

One was John Walson, who pioneered a CATV system in Mahoney City, Pa., in June, 1948. Walson worked for Pennsylvania Power & Light (PP&L) and ran an appliance store. Residents of Mahoney City could not receive the Philadelphia stations off-air, and Walson had to drive prospective buyers to the top of a nearby mountain to demonstrate his tv sets. Tired of the trek and, by one newspaper account, embarrassed about taking women, on occasion, to the top of the mountain at night, Walson decided to bring the signal down from the mountain into town. He erected a pole and strung twin lead wire to his warehouse at the foot of the mountain. From there a line was strung on PP&L poles to his appliance store where he demonstrated the virtues of television. Along the way he "wired" eight homes for television. In 1950, PP&L gave Walson written permission to use its polls to string cable in town.

As cable operators set out to bring television to U.S. homes that by and large could not receive over-the-air signals, the mom-and-pop operations gradually gave way to corporations. The largest was Teleprompter, which became synonymous with cable in the 1960's. It was founded by Irving Kahn in 1951, who also developed the device for which the company was named.

In the 1970s, satellite technology opened the door to further expansion opportunities for cable. The period I call The Twilight Zone began on September 30, 1975. On that night, with its telecast of the Ali-Frazier fight via satellite, Time Inc.'s three year old HBO instantly transformed itself from a regional to national network and, by its example, launched cable from a retransmitter of broadcast signals into a provider of alternative programming services. The HBO-satellite mixture touched off a cable programming explosion. Any programmer could become a national network overnight. To reach the same cable systems as HBO, cable programmers had only to lease time on the same satellite, RCA Americom's Satcom I.

After reading about HBO's satellite plans, 38-year-old independent broadcaster and America's Cup defender Ted Turner decided he wanted to put his tv station WTCG Atlanta (now WTBS) on a satellite and turn it into a superstation - that is, a broadcast signal available to every cable system in the country. He would not receive direct revenues from cable systems that picked it up, but he would sell the national audience to advertisers.

Beginning in the late 70s and continuing to the present, cable networks proliferated. In 1978, Viacom began nationwide satellite distribution of Showtime, and WGN-TV Chicago followed Turner's model as a superstation, followed soon after by WOR-TV. Since then, network launches continued unabated and even accelerated in the 90s:

1979: CSPAN, ESPN, Galavision, Nickelodeon, USA, and WGN superstation


1981: MTV

1982: CNN Headline News, Weather Channel

1983: CMT – Country Music Television, Spike TV (formerly TNN)

1984: A&E, AMC, Hallmark, Lifetime

1985: CNN International, Discovery, Nick-at-Nite, VH-1

1986: RSN

1987: Travel Channel

1988: TNT

1989: CNBC

1990: E!, INSP-Inspiration Network

1991: Comedy Central, Court TV, TLC (formerly The Learning Channel)

1992: Cartoon Network, Sci-Fi Channel

1993: ESPN2, Food Network

1994: Bloomberg TV, DIY: Do It Yourself Network, Fox Sports (relaunched 2005), Fuse, FX, GSN (formerly Game Show Network, relaunched 2004), HGTV, The Outdoor Channel

1995: GAC: Great American Country, History Channel, Golf Channel, Versus (formerly OLN)

1996: Animal Planet, BETJ, Discovery Home, Discovery Kids, Discovery Science, Discovery Times, ESPNEWS, Fox News Channel, Fox Sports en Espanol, Military Channel, MSNBC, The Science Channel, TV Land

1997: Casa Club TV, CNN en Espanol, ESPN Classic

1998: BBC America, Discovery Health Channel, History International, Lifetime Movie Channel, MTV2, Style Network, The Biography Channel, Toon Disney

1999: Black Family Channel, Noggin, Turner South, TV Guide Channel (formerly Prevue), Weatherscan

2000: The Oxygen Network

2001: Adult Swim, Colours TV, Lifetime Real Women, mun2, National Geographic Channel, SOAP Net, WE: Women’s Entertainment

2002: Discovery HD Theater, Fine Living, G4, Speed,

2003: Go!TV, The Tennis Channel

2004: Fit TV (The Health Network), Si TV, TV One, Universal HD

2005: AZN (formerly The International Channel), Fox Reality, Hallmark Movie Channel, Horse TV Channel, Logo, PBS KIDS Sprout, The Africa Channel

2006: Sleuth

Today, the share of cable tv viewing exceeds the share of broadcast viewing. Average network Primetime ratings now are about the level of Daytime ratings of the 1970s. More importantly, we don’t watch tv today the way we used to. Half of viewers today turn on their televisions without a specific destination in mind. Almost a quarter of viewers simply flip channels, while only 9% “just knew what was on”, according to a study by the Cable Ad Bureau and Knowledge Networks.

At the same time, viewers have more tools to help them avoid commercials. Perhaps the greatest of these is the remote control, which has been around for decades. Then came VCRs. Now we have Tivo and other DVRs, and video on-demand. The problem of consumers “zipping” through commercials or “zapping” them out is not new, it’s just more pervasive now.

Additionally, the clutter of non-program time has increased. And tv cpms have grown faster than the rate of inflation for many years. To stretch their dollars ever further, advertisers have gone from :60s to :30s to :15s to product placements. Levels of “effective reach” have gone from 3+ to 1+ to not-even-measured in some cases.

Is it any wonder advertisers throw up their hands in frustration? Television, although still very important – still the most dominant media for national advertisers by any reasonable measure – has lost a lot of power. TV advertising used to be a sure thing. It’s not anymore.

Along with the waning power of television has come the end of The Creative Era, and a new era has begun.

(to be continued….)

Sources and additional reading:

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

Cable Advertising Bureau and SRI/Knowledge Networks, “How People Use Television”, 5/2004,

Cable Advertising Bureau, “Cable Networks Launch Dates”,