1. is tv advertising dead?May 2009

2. is tv advertising dead?Or has it just morphed?My favorite 2009 Super Bowl commercial was for the online video website Hulu: Hulu,an evil plot to destroy the world. This commercial, starring Alec Baldwin, was awonderful 30-second mini-film that not only delivered a large audience to theHulu website, but also acted as a harbinger of the future of TV and Internet video.According to Hulu, website traffic surged by 55% during February, 2009 as a resultof the ad. The success was enough to drive Hulu up to 7.8 million unique visitors forthe month and make the site the second-fastest growing property in ComScoresmonthly analysis.To dial this up a bit more, the commercial has been viewed over 696,000 additionaltimes on YouTube since the spot aired.So, lets analyze this information: People continue to watch TV. Television advertising motivates. TV commercials have an afterlife on the Internet.1. People continue to watch TV.The perception that television viewership is history is incorrect. Viewership may bemorphing, but it does not appear to be in decline.Here is a quote from the February 7, 2009 edition of the New York Times on a recentNielsen report:Consider that the average American household consists of 2.7 persons and contains2.9 television sets, in front of which we sit for record-setting spells, according to Nielsenfigures. In the quarter ended September 30, the typical American watched 142 hours oftelevision monthly, up about five hours from the same quarter the previous year.Where we are seeing change is in the rate of use of television by different age groups.Not surprisingly, younger age groups watch less television than their parents andgrandparents.According to Nielsens May, 2008 report: Adults 18-24 watched 103 hours of television Adults 25-34 watched 119 hours Adults 35-44 watched 124 hours Adults 45-54 watched 145 hours Adults 55-64 watched 160 hoursIf you are approaching 65+, settle into that Barcalounger. The 65+ crowd watches awhopping 178 hours of television per month. 3. 2. Television advertising works.Citrus employs virtually all analog and digital media to help our clients reach theirB-to-C and B-to-B audiences. However, no single medium generates awarenesslike television. While online advertising is efficient and its effect can be tracked toconversion, it does not deliver high-volume awareness as quickly as television.Additional benefits of TV advertising include: It tells your brand story via sight and sound Players use TV Its intrusive and grabs attention It creates a personality for your brand TV comercials get talked aboutEven with this good news, advertisers have concerns. One fear is generated by theconstant drumbeat that targeted interactive advertising is more effective than theambush nature of TV commercials. Another is that people hate TV advertising. Well,they might hate it (any more than pop-up ads?), but they still respond to smartmessaging, as evidenced on the Hulu comercial.Advertisers are also concerned that Digital Video Recorders (DVRs) and their dreadedfast-forward buttons are killing the benefits of day-part viewing. This killer may becoming, but according to research, it hasnt arrived yet.While 25% of American homes have DVRs, slightly less than 5% of viewers aretime-shifting (watching shows when they want vs. when the networks want). No, thislow number does not make sense given the obvious benefits of DVRs. However, thisis what Nielsen reports.Despite todays relatively low time-shift numbers, the trend indicates that time-shiftingwill increase. Time-shifted television grew 50% from 3 hours 44 minutes to 5 hours 50minutes per month from May 2007 to May 2008. This will be compounded as DVRpenetration reach grows to over 50% of households by the end of 2010, accordingto the Carmel Group.1979 Coca-Cola - Superbowl ad2009 Hulu - Superbowl ad 4. 3. Television commercials have an afterlife.The Hulu commercial blew past its Super Bowl debut to continue its reign on theInternet. There are over 100,000 Google results for that particular spot. Add thesenumbers to the audience of the original television commercial, and you have a fairlydramatic winner. From the old days of CBS, NBC and ABC, distribution has becomeexponential.We produce television commercials, long-format commercials and corporate videos.In all cases, we are excited by the seemingly limitless distribution options.Consider just some of the options available today for efficient distribution of aTV commercial. Your television set Video sharing sites like YouTube High-traffic news sites Commercial-supported streaming video sites like Hulu Corporate websites In Banner ads Video pre- and post-roll commercials on websites like CNN Social media sites such as Facebook and MySpace Blogs and Podcasts iTunes Good, old-fashioned DVDs Cinema advertising Flash drives Mobile phones Peer-to-peer distribution via email Tradeshows and Events 5. The largest growth will clearly come from video on the computer monitorand mobile phones.Internet video viewership is no longer a novelty. Nielsen reports that 119 millionAmericans watched 26 hours and 26 minutes of video, or 7.5 billion streams, onthe Internet in May 2008. I initially missed Jon Stewarts roasting of Mad MoneysJim Cramer. However, I watched the show a couple of days later on both YouTubeand the Comedy Central website.Its not just TV shows that are being watched online. Burger Kings WhopperFreakout commercial has been viewed over 360,000 times on YouTube.Not surprisingly, teens and Gen Y are more likely to watch videos online than olderage groups. According to the PEW Internet and American Life Project, 57% of teens,72% of Gen Y (18-32), 57% of Gen X (33-44) and 49% of younger boomers (45-54)watch videos online.If you are a marketer targeting younger age groups, this is significant and willdramatically affect your media selection. However, we strongly believe that older agegroups will increase their online video usage rapidly as online video becomes ever moreprevalent. (Its hard to miss, right?) In fact, the 55+ group is the fastest growing socialmedia demographic.Video is moving to the mobile phone. Yes, slowly. But surely.Americans watched on average 2 hours and 19 minutes of video on their mobile phonesin 2008. These numbers will grow as a result of the increase in video-capable phones(now 36% of all phones), powerful smart phone brands like the iPhone and theBlackberry Storm, and faster 3G networks. Mobile carriers are also helping with free trialvideo services and lower pricing.If you are wondering what the future of mobile video looks like, look to Japan.A recent survey of Japanese mobile phone users by the research firm Net Asiaindicated that 57.6% of mobile phone users watched videos on their mobile phonesin 2008 (up an impressive 13 points from the last survey in April 2007). Mobile videois omnipresent in Japan. 6. Where do we go from here?First, the obvious: Not all TV commercials are created equal.Some are downright embarrassing as they deliver neither a clear, motivating message northe benefits of entertainment that comes from a great concept, smart copywriting andprofessional production. The success of the Hulu spot is directly related to the power ofits creativity and excellent execution. The takeaway is that in order to benefit from theinherent power of TV and extended distribution, the commercial itself better be darninteresting in the first place. Unless you want to go viral for the wrong reasons (becauseyour advertising is so lame it is worth sharing), make sure the creative is powerful.A second point is that not all distribution is created equal. Some distribution will happenorganically, a l Wow, I want to pass on that new Nike spot via email. However, someviral opportunities will require that you first consider your audience (demographics andviewing mind-set) and then the technical attributes of the new distribution channel.Whether its the original 30-second format or a new edit, just slapping your commercialinto an interstitial unit at the beginning of a CNN video might not cut it. Simplybroadcasting it on a 2-inch mobile phone screen wont work, either.Rumors of televisions demise are greatly exaggerated. The truth is, TV advertising stillworks. It may even work harder than ever before. But, yes folks, you will need to workeven harder, as well, to extract and leverage the TV commercials new-found power andincremental reach.Put Partner with a business that knows how to create attention-getting, ROI-generatingTV and videos at the top of your to-do list. Followed by my phone number. Then callme. We can discuss how you can leverage our TV expertise to meet your objectives, thiswhite paper, how great 30 Rock is. Anything really.Peter Levitan: 541-550-4220 or plevitan@citrusbnd.comTo read more great Citrus white papers, visit citrusbegin.com/whitepaperscitrusbegin.com