The Affari Edge Blog

You know the old saying, “Be careful what you wish for”? That saying is coming down hard on broadcast radio stations and the companies that own them in the form of Arbitron’s “portable people meter” (PPM). And I say, GOOD! This is what the money-grubbing robber-barons of the radio industry deserve! At this time I should point out after seven hard years of work at the Tampa Bay cluster of Clear Channel Radio, I was fired last September due to “budget cuts” so this post may be ripe with sarcasm. Less than two months after I was released because my paltry salary was dragging down the company’s line, Clear Channel agreed to go private with a $26.7 billion sale to Bain Capital Partners and Thomas H. Lee Partners.

In the never-ending search for more money, the radio industry (not just Clear Channel) demanded a new way of accounting for its listeners. For decades the industry had been using paper diaries from Arbitron to create ratings reports four times a year (two times a year in smaller markets). Several years ago I felt the diary method was extremely outdated, and that belief continues to this day simply because people are too busy with their lives to write down every station they listen to at all hours of the day. So several years ago Arbitron came up with the PPM, a beeper-like device that detects hidden tones in a station’s signal. The PPM basically is a live, as-is ratings report. Whether a person listens to one station for eight hours, or eight stations in one hour, the ratings can be accurately reported instead of hoping the diary holder can accurately recall which stations he/she listened to at the end of the day.

There’s no doubt about the real, underlying reason why stations wanted the PPM– MONEY! With accurate, real-time ratings stations would not only know the age and gender of the listener but the listener’s habits too. How many hours does a person listen to the radio? Exactly where are they listening at? Why does a person change the station or turn off the radio? By digging deeper in to ratings, stations could adjust their rate cards and charge more to advertisers because they would know precisely how long a listener is listening. But then an interesting thing happened… radio found out how long people were listening to the radio. And the news wasn’t all good.

In the first PPM report from Houston, Texas, the most shocking revelation was that fewer people listening to radio during the morning drive (6 a.m. to 10 a.m.) as opposed to ratings derived from diaries. The data also showed just as many people listened to nights (7 p.m. to midnight) as they did morning drive. Afternoon drive (3 p.m. to 7 p.m.) was the highest-rated drive time, while weekends were listened to more than indicated in paper diaries. If this data remains accurate, it will turn the radio world upside down in that it was commonly thought that the order of most listeners (from highest to lowest) was mornings, afternoons, evenings (weekends were typically “thrown out”, never really considered as viable data in determining rates).

In New York City, stations that ranked in the top 10 during diary days have slipped 10 to 15 spots in the rankings with the PPM. Some stations say a lack of representation in minority listeners is to blame for this. But as evidenced in an article from the New York Times, Arbitron senior vice president Tom Mocarsky cites radio listening among minorities has actually gone up 67% with use of the PPM over the diary. So what does this mean?

Well first of all, Arbitron needs to make sure they properly fill the quota for minority listeners. This is something I’m sure they will do since the future of the PPM requires extremely accurate data from all demographics. Second, it means the radio industry HAS to wake up sooner or later and realize people don’t listen to one station for a long time like they used to. With competition from the Internet, mp3 players, and CDs, radio has to give the average person a compelling reason to listen in the first place and to listen longer. Radio could also help itself out by not having so many similar formats. With so many crossover artists and tight playlists it’s hard to tell one station from another. Finally, you have to have live, local, and entertaining talent to get people to listen and to listen longer.

But these are bean counters we’re talking about, and they’ll ignore good programming while counting their beans and blaming the PPM results on some outside force. But by keeping their blinders on the bean counters are merely getting their just desserts.

* A follow-up to a previous entry of mine regarding casual dining outlets. Following Applebee’s new logo it appears other chains are also trying to pump up business in the sagging industry… with coupons! One analyst calls the move one of the worst things she’s seen in 14 years in the business. Check out the story from USA Today.

Network television has taken another step towards releasing its content online, for free, and I like the sound of it. Thanks to a story at Forbes.com, I have been alerted that “Hulu’s Here”. In case you weren’t aware, Hulu (which sounds like the name of Uhura’s and Mr. Sulu’s space-aged love child) is the new Internet video service of NBC Universal. The site will feature full episodes of TV shows mostly from NBC and FOX, with programming from sister networks such as F/X, The Sci-Fi Channel, and USA. According to the article, you won’t just be able to get most of the programming from those channels, you’ll also be able to get TV classics such as WKRP in Cincinnati (one of my all-time favorites) and the Mary Tyler Moore Show. Movies from several studios, such as Sideways and The Breakfast Club, will also be available.

Even though the service is free, there is a price to pay. Unlike content on YouTube, there will be the occasional commercial messages on Hulu. Once you start playing a selection, a banner ad will be featured at the top of the screen (unless you select the “full screen” viewing option). Brief commercial breaks will appear about every 22 minutes, and like most network-driven online content today a quick commercial at the beginning or end of the broadcast will appear. And apparently the “overlay ad”, those annoying ads that just glide across your computer screen with a cleverly-concealed “close” tab will show up from time to time.

Despite the commercial interruptions, I think most web viewers will ignore (or at least put up with) the commercials. Banner ads, while not as annoying as the old-fashioned pop-up ad, are everywhere on the internet any way. And network television (cable networks included) invade the screen with overlay promos for upcoming shows on a regular basis. I think they do it too often, but over the past few years I feel most people have gotten over the intrusion (except when it covers up a graphic pertaining to the show like a chyron… I hate that). What is conspicuously missing from the Hulu “about us” page is any mention of advertising which I feel is a bit misleading to the consumer who isn’t totally clued in.

I’m also a little miffed at the service in general simply because following a press conference announcing its launch, and the nice pub from Forbes, the site isn’t ready yet. After signing up for the beta test version, the only e-mail I’ve received from Hulu is that yes indeed I signed up for Hulu. But even with the delay I’m curious about a couple of things regarding how successful Hulu can be.

Louis Hau, who penned the article about the site, seems to wonder if Hulu will be as big as YouTube. To me, I don’t think it has to be. In fact, I know it won’t be. But that shouldn’t make anyone think Hulu will be a disaster in the making. Hulu will be the only legal place streaming shows from NBC and Fox, and the other networks I mentioned earlier. If a niche audience is willing to go out of its way to watch an episode of Monk or My Name is Earl, than the advertiser is being taken directly to the person it wants to reach during a regular network broadcast. YouTube may have 2.5 million views of Chris Crocker crying about Britney Spears (sadly, it does), but who’s watching that garbage? Even if ONE show on Hulu has one-percent of that audience (25,000 viewers if you weren’t a math major), that’s 25,000 potential clients exposed to whomever advertises on that stream. And Hulu is unique in that unlike YouTube it will NOT accept user-generated material. The reason is simple: the minds at Hulu don’t want crap on their website. And you have to admit that 98% of the original, user-generated video on YouTube is indeed crap.

Finally, what really intrigues me is how a site like Hulu will affect the DVD market. Nowadays it’s cool to have seasons one through ten of The Simpsons on DVD, taking up valuable space on your entertainment center but showing your friends you’re a fan and you have enough disposable income to buy all of those box sets. But what if one day you could stream all of those episodes, and still get the bonus goodies that sell most DVDs today? Keep in mind just ten years ago people used to show off CD collections with towers of discs in their living rooms. Then came Napster, which begat Kazaa, which begat Apple iTunes. Who shows off stacks of CDs in their jewel cases any more? For 99 cents a song you build your library on a chip in you mp3 player.

So I’m still waiting for my personal “invitation” from Hulu that says they’re ready for me. I’m ready for them and I’m curious how eager the rest of the world is ready for a similar service.

There are tons of stories floating through cyberspace about how television network news is dead. While the ratings for network television news have declined sharply over the past several years, the forum for the 30-minute nighttime newscast is hardly dead in America. However, the television networks know that in order to keep the younger end of the crucial 25-54 demographic interested in the network news, especially the tech-savvy 18-34-year-old crowd, a little reinventing of the wheel needs to be done.

Now I’m not saying the wheel is network news broadcasts themselves. Networks have tried over and over again during the past few years to bump up ratings by changing hosts such as CBS and NBC have done, or by switching to a two-host system which ABC tried briefly in 2006 before Bob Woodruff was seriously injured while reporting in Iraq. I’m talking about “the wheel” as network newscasts on line.

Up until now a network’s website, which was heavily promoted throughout the newscast, featured repackaged news segments. Basically the website served as a dumping ground for features you may have missed or would like to see again. But that begs the question, if you didn’t see the feature the first time around are you really inclined to go searching a website for it? It’s the old “tree in the forest” adage at play here. If you’re not watching the network news in the first place, are you going to go out of your way to find a network news feature on the network’s website? Probably not, and I highly doubt anyone has been so moved by a network news feature recently they e-mailed all of their friends and said, “You’ve got to see this piece on Medicare from NBC!”

ABC News is trying to change that, and I love their approach detailed in this article from the New York Times. ABC’s internet webcast, titled simply “World News”, features regular ABC World News anchor Charles Gibson as host (most of the time). What’s unique about this though is Gibson merely isn’t cuing up eight or nine feature already shown on the ABC World News report that night. Instead, this 15-minute webcast features stories shot by the ABC News staff specifically for the webcast. What’s really interesting to me is how these stories are presented.

Jason Samuels, the senior producer of the webcast, takes a fresh approach to presenting the news to a generation of people whose lives don’t fit the network television schedule like generations past.

“I don’t have to count the seconds,” he said. “I just try to put in a good show that’s around 15 minutes. Do one long stand-up, do much longer sound bites, play an interview,” he said, summing up his advice to the staff. “Produce a story in any way you think is engaging — there are no rules.”

That right there sums up EXACTLY what network news programs have to do with their online content. Break all of the rules– the same rules that have been dragging down network news ratings for more than 20 years now. Reporters aren’t tied to 90-second or 2-minute packages, and unlike most newscasts stories aren’t bogged down with network promos masquerading as news stories or celebrity gossip. And staples of newscasts from the past, or newsmagazine shows prior to Chris Hansen busting one pervert after another, in-depth interviews are featured.

My favorite part of this webcast is the lack of commercials. There’s only one commercial, 15 seconds long, at the start of the webcast. After that, it’s laid out for convenience. The webcast on October 11, 2007, was a mere 16:27 long, and starts with updated headlines. The remaining 14 minutes starts with Gibson giving “signposts” to upcoming stories. Those same signposts are featured underneath the video player screen. Not only are there no commercial interruptions, you know exactly what you will get in that newscast, something someone my age (soon to be 30) appreciates greatly. Instead of dressing up reporters, sets, or story ideas with 53-year-old adults trying to look hip, ABC manages to deliver the news straight and without the bells and whistles others in the past have tried.

The big question is, will the coveted 18-34-year-old crowd actually tune in on a regular basis? To date, ABC averages 4.5 million downloads of the World News webcast per month. That averages to only about 150,000 a day, or roughly the amount of households watching a major market local newscast on any given night. ABC has a great product here, but the trick is to tell those 18-34-year-olds who don’t watch the network news on a regular basis to actually sign on and listen to a guy they probably remember as the host of Good Morning America 15 years ago.

During the past several years, the usage of digital video recorders (DVR) such as TiVo and those provided by cable and satellite providers has increased to a national average of 17% of households in America. With that number expected to jump into the upper 20s by the end of 2008, the “Big Four” networks (ABC, NBC, CBS, and FOX) and advertisers are jumping up and down worrying about whether or not viewers who watch a show are actually watching the ads. This week, and thanks to superb coverage of this issue by the New York Times, it has been revealed the networks and Nielsen Media Research have agreed to a unique way of accounting for audiences with live and recorded viewing. The system is called “live plus three”, a ratings report generated by Nielsen that will account for total viewers who watch a program live or via DVR within 72 hours of its original broadcast. While the new approach is intriguing, will it truly measure the total audience for a show? And will it appease both networks and advertisers who have been dragged kicking and screaming into the changing world of media?

The need for an accurate ratings system is imperative. As of just a few months ago, Nielsen’s prime source of information was the old-fashioned method of sending paper diaries to viewers in the hopes the viewer actually remembers what he or she was watching that day in case they didn’t write it down while watching TV. If you’ve ever taken part in one of those surveys, and I must admit I have before, it’s not as easy as it sounds. With the technology available today, Nielsen is FINALLY moving into the 21st century by collecting data through digital means, and through info collected by DVRs themselves. Accurate ratings are crucial to both the networks and advertisers. For networks, accounting for the “lost” viewers who record and later watch a program helps them raise ad rates since they have a clearer picture over who is watching their programs. For advertisers, an accurate number helps determine if a particular ad campaign on a particular network is paying off those big bucks spent on the spots. But I’m not so sure the “live plus three” is the best solution for this issue, although it is a start.

In Stuart Elliott’s article, the idea of “live plus seven” was apparently floated out to the networks and advertisers only to get shot down. This is curious to me because BOTH parties could use the “live plus seven” method to their advantages, and the capability of providing those numbers is available from Nielsen. I bring this up as an issue because some of us have hours and hours of prerecorded TV shows we haven’t watched yet, and they happen to be more than three days old. I actually have three or four episodes of House I have yet to watch, but I know when I get a free afternoon I will finally catch up on one of my favorite shows. I also haven’t watched last week’s edition of The Office yet, but I know I will watch it tonight before the season finale’. Both NBC and its advertisers have “lost” me, and since I love the show (and have since day one… I’m one of the few who can say that) they may want to count me in their final numbers.

Right there is the dilemma both parties are fighting. The networks would like to have the seven day report because those of us who take our sweet time watching a recorded show can be counted. That would mean bigger numbers, higher ad rates, and ultimately more revenue for the networks. Outside of revenue, a true accounting of viewers may also do the networks a great service since so many people think the Big Four are losing their relevance in today’s media-savvy society.

The advertisers, however, want instant gratification… and you can hardly blame them. Corporations spend billions and billions of dollars in national advertising in the hopes of generating and maintaining a consumer base. Even if viewers aren’t watching the commercials live or when the program is prerecorded on a DVR, the numbers generated will justify a corporation or ad agency to spend more or cut back on a particular show or network. With so much money at stake, and even a few corporations’ public image as well, the instant turnaround when it comes to results is a given. Viewers either really love a commercial, or they really hate it. Why spend more in seven days to air a spot that isn’t received well, and why hold back when consumers want more?

The division of interests has caused some tension between the parties. As it is stated in the aforementioned article, CBS president of sales Jo Ann Ross said, “This is still a gentleman’s business. You do business on gentleman’s agreements.” The article goes on to suggest CBS would really like the advertisers to try the seven-day method, and to let them “write the business” where recorded viewing is factored in to ad rates. I applaud CBS (and it appears other networks are leaning this way) for trying to get the best of both worlds with the seven-day plan. But in these days where the bottom line is everything with the Wall Street giants (the networks and advertisers) money talks and common sense walks. The advertisers want to make key financial decisions not just for a season or month of programming, but for individual episodes as well. The networks need every dollar that walks through the door, so the “gentleman’s agreement” gets done. That means both sides are still left a little short in my opinion.

For advertisers, I can’t see why a seven-day or even a 30-day plan can’t be effective. Sure, there are some products or services (such as movie releases, national car sales, etc.) that are time-sensitive. But even if a viewer sees a commercial for an “expired” product or service, didn’t the viewer still see the spot? It’s almost the “if a tree falls in the woods…” scenario. If I see an ad for a Ford F-150 that originally ran in April, wasn’t I exposed to the product? I may not be able to get that truck for the exact same monthly payment or interest rate advertised, but that won’t stop me from thinking it’s a pretty nice truck. The same goes for movies. I may be watching an ad for Spiderman 3 three weeks after the movie was first released, but does that mean I won’t go out and see it now? Does it also mean I won’t order it on Netflix or buy it when it comes out on DVD? NO! This short-sightedness is one reason why advertising in mainstream media is so fluky.

Another problem with the advertising world is why is advertising so crucial on the “Big Four”? Yes the message typically gets out to more people than the cable networks, but getting a message to your intended audience seems to make more sense to me (and also justifies your media spending a bit more). That F-150 ad would look better on CMT, GAC, or ESPN instead of in the middle of a “Heroes” episode. The Spiderman trailer might be more successful when used on the Sci-Fi channel, Cartoon Network, or Nickelodeon instead of lost in a sea of ads during “Ugly Betty”. Creative ads playing on You Tube or downloaded via iTunes would also hit that target consumer better than the “mass media”. It’s just another sign that some advertisers clearly haven’t figured out how to reach the consumers they want through new media.

As for the broadcasters, I would think the accounting of a show beyond seven days would be helpful in determining the real success of a show (and of course the ad rates). If a network discovers an extra one million viewers watched an episode of a show 8-14 days after it originally aired, could that save a show from getting canceled? Could it help a network show advertisers fans of shows are loyal to programming for weeks and weeks and not just 30 minutes a week? Could it also help networks devise programming and advertising methods that help viewers become more interactive with the show? If I’m told I could win a million dollars by answering a trivia question about a show online, but only after I watch the show live in its original airing, you can bet I’ll find some way to shift my schedule around for that carrot on a stick.

For now, both sides will wade through the waters of this new agreement to see how it works. It is a start, but I think the data available now can be used for better purposes on both sides. But since the advertisers need to make shrewd decisions now, and the networks need every penny they can squeeze out of them, I won’t hold my breath for things to change.

SOME OTHER NOTES ON ADVERTISING:

* It’s a bit of a spoiler, but NBC’s three-minute preview of tonight’s “The Office” on YouTube is simply genius. I was going to watch the show already, but now I’m so amped up for it I will probably watch it live! Note to networks: this is the use of new media as the “carrot on the stick” I was referring to before.

* The Orbit chewing gum commercials have grown old with me, mostly because they’re just plain silly (or in some cases not). But this commercial had me howling when I first saw it last night:

* On the not-so-funny end, in 2003 NHL player Dany Heatley was speeding in his car in a residential neighborhood in Atlanta. He lost control of his car, causing a wreck that killed his Atlanta Thrashers’ teammate Dan Snyder. Snyder’s parents are traveling across the U.S. and Canada to spread the word about their son. While they have forgiven Heatley, they haven’t forgotten what has happened. The use of Heatley in the Versus network’s bumpers for the NHL playoffs, where Heatley (now playing for the Ottawa Senators) proudly proclaims the playoffs are “do or die” time, just doesn’t feel right to me.

* Finally, success finds the most unexpected people at the most unexpected time. Just ask the guy who plays the role of the Geico caveman.

So, I have finally worked up enough energy and courage to click my way through my previous Second Life dilemma. Over the past few days I spent some time catching up with the basics. I’ve learned that in order to go to new places, you have to teleport - no wonder I couldn’t figure it out on my own. Once I learned this, I began to explore all of the different venues within the Second Life realm. It is packed full of clubs, discos, shopping centers and housing developments (all of which produce real American dollars). Clubs and discos sell various items that can be purchased, shopping centers are filled with brand name clothing and accessories, and real estate is even sold - all for REAL money!

I was very excited when I found my first piece of advertising within Second Life. I was at some sort of club when I saw a huge plasma HDTV on a wall. I clicked on it and it actually began to play video like a real TV would. It also had a pop-up window that gave me the option of buying the TV - it was a name brand, but I don’t recall what it was exactly. Of all of the places that I expected to find my first advertiser, this was definitely not that way I thought I would find them.

As I traveled around more and more I found many shops and specialty stores. You can buy all sorts of clothing and accessories. Company logos and promotional material is flooding the Second Life world. What is amazing to me is the amount of users who are actually purchasing these items. In fact, in the last 24 hours over 1.6 million US dollars have been spent in the Second Life world. While the concept of Second Life may not be for everyone, with numbers like this, it is definitely not something that can be ignored.

So, does this form of advertising really work? I can’t see how it doesn’t. First of all, these companies are driving sales without actually selling anything. No materials are being used, yet they are making money selling…pictures and computer graphics. Also, if someone is likely to buy and use your branded product in a virtual world, I would expect that same person - more often than not - would do the same in the real world. Another great advantage to this medium is the fact that retailers can track trends. Clothing companies and other retailers and track what items are becoming more and less popular and compare these virtual trends with those in the real marketplace. Depending on how similar they are, the virtual marketplace can be a great way for these companies to influence trends and manage strategies. It seems that at this point the possibilities are endless. It is up to the programmers to keep the buzz flowing, and to the users to continue growing.

Okay. Here is a video from the Canadian Broadcasting Company. It looks like 1980’s technology and video quality.

Thanks to B.L. Ochman on the What’s Next Blog.

So, Day 1 in my "Second Life" was quite, confusing and disheartening. I got home from work and downloaded the program to see what the new rage was all about. As it was downloading, I watched this short YouTube video to mentally prepare for the world that I was about to enter. This video is very interesting - and highlights some of the things that I plan to observe during this experiment.