The Future of TV -- Keynote at FICCI India

The Future of TV — Keynote at FICCI India

samuel scott india

This the prepared text of the keynote address that I gave today at the FICCI FRAMES conference in Mumbai, India.

TV is Not Dying — It’s Lies, Damn Lies, and Bad Media Statistics

Hello, everyone. A belated Happy Hoolie. This is actually my second time in India. Ten years ago, I was an MBA student who traveled to Bangalore to visit high-tech companies with my class and learn about the Indian market. Today, it is a pleasure to return a country that, frankly, is full of the nicest and warmest people I have ever met. And I think the holiday of Hoolie is representative of that.

Please correct me if I am wrong, but the holiday is about the victory of good over evil and the return of spring, correct? Well, that ties into my talk. Today, I hope to defeat the evil lies that have been spreading about TV and help to foster a spring-like rebirth of faith in the medium.

Slide 2

But first, it is important to define the terms we use. When we say, “television,” what exactly do we mean? Is it any long-form entertainment programming over video? Is it the specific, physical box that sits in our living rooms? Is it both?

As a former journalist, I believe in using precise definitions whenever I speak or write about the marketing and media industries. Here, I will argue that “television” refers both to both cases — and that both of those cases are not in any immediate, critical danger.

Slide 3

To put it bluntly, we have seen nothing but absolute hysteria for fifteen years. And that is what I’ll be addressing first.

Slide 4

It’s the first rule in propaganda: if you want people to believe a lie, then just repeat it over and over again. First, marketers were subjected to constant reports that commercial TV will soon “die” Because of TiVo and commercial skipping.

Slide 5

Before moving to cord-cutting millennials

Slide 6

who prefer Netflix and then citing the

Slide 7

alleged swing today of advertising dollars from offline to online, which I will show later is not exactly true.

Slide 8

Last year, we saw reports that the alleged last bastion of traditional TV — sports — is going to surrender because, in one example, Amazon started to stream American football.

Call me crazy, but ad-supported television still seems to be around. The death of TV continues not to happen. Something does not add up.

Slide 9

Please excuse the hard-boiled exterior that I still have as a journalist who later went into marketing. For people who are always selling something and also supposed to be cynics, too many marketers are surprisingly susceptible to believing bad data and people with conflicts of interest. In other words, many of us are too susceptible to lies from those who are selling something.

Please excuse my eye-rolling when the CEOs of competing mediums and tactics write columns insisting that TV and advertising are dead. Please excuse my facepalming when the company that owns YouTube says that YouTube is preferred over TV. I mean, really, what do you expect them to say?

Writing an opinion column without supporting evidence is simply not credible. If a company that sells widgets argues that not-widgets are bad, I am always skeptical.

One of the biggest falsehoods in the marketing echo chamber is that television is “dead” – and that lie is usually spread by companies with something to gain or by people who do not bother to research what the good data actually says. People who keep repeating the propaganda that others have spread over and over again without even realizing it.

Now, I write and speak about the marketing industry from the mindset of a neutral journalist. I have no interest in whether TV is alive or dead. So, let’s forget the half-baked opinions and biased analyses on the state of television and see what the true, impartial statistics from neutral sources in India, the US, the UK, and Asia truly report.

Slide 10

According to comScore’s latest comprehensive report on the use of various TV platforms in the United States:

Live TV consists of 84% of total TV viewing time.

Slide 11

Only 15% of households are “streaming only.” Most who use streaming services do so as a supplement to traditional TV and not as a replacement.

Slide 12

For every hour that is viewed on streaming services, people watch more than five hours of live television.

Slide 13

Live TV still dominates, even among the heaviest users of streaming television

Slide 14

Here is the Nielsen data specifically from its most recent Total Audience Report in the United States. The light purple on the left is live TV. The light blue in the center is live AM/FM radio.

On average, people spend the majority of media time each day watching live television and listening to AM/FM radio.

Slide 15

Here is some Thinkbox 2016 UK data that is compiled from the Broadcasters’ Audience Research Board (BARB), comScore, the IPA’s Touchpoints study, Ofcom’s Digital Day study, and Rentrak box office data.

40% of video viewed each day, the part in red, is live TV. 57% of video is live TV, playback TV, or broadcaster VOD.

Slide 16

79% of video advertising is viewed on live TV.

Slide 17

Thinkbox also found that TV viewing has remained level despite the rise of social media, mobile and streaming over the past decade. There has been a decline of only four minutes of television watching per day since 2006. Yes, there has been a small drop — but the sky is not falling on us.

Slide 18

When Amazon broadcasted its first American football game, the total average audience was 15 million people. 97% watched on live TV. Only 2% watched on Amazon.

Last year, ShareThis chief executive Kurt Abrahamson wrote a column in Adweek claiming that “Social Media is the New Television.” Now, can you really read that with a straight face?

Slide 19

TV is not “dying.” Anyone who says differently is selling something.

The marketing industry has its own ‘fake news’ problem. Too many marketers – especially in digital marketing – accept what is said in our industry’s echo chamber without thinking critically or asking for evidence. That’s where I come in.

Why do so many marketers think that television is dying despite all of the easily accessible information that says otherwise? It comes down to the false consensus effect that is created by the biases of the most popular information sources specifically in digital marketing as well as the mistaken assumption among many marketers that customers are just like marketers.

Imagine that you work for eight hours every day on, say, social media for your company. Everything you read is about social media. Every conference you attend discusses social media. You would have tunnel vision and subconsciously think that social media is the only medium that matters. (Substitute any digital marketing activity of choice or even online channels as a whole.)

TV and other traditional channels would be the furthest things from your mind – and you will start to assume that everyone else thinks and acts the same way.

Well, I have some bad news: you are not normal. Too many digital marketers live in a self-reinforcing bubble and work in an echo chamber that consists of a small percentage of the marketing world.

Slide 20

Marketers are not normal people. We love social media, but most people do not. 93% of marketers are on LinkedIn. Among everyone else, it’s 14%. 81% of marketers use Twitter. Everyone else, 22%. 43% of marketers read Buzzfeed — and I have no idea why — but only 13% of everyone else does.

Slide 21

Marketers and media people are on social media all the time, so we assume that everyone else is too. We fear, perhaps, that social media is becoming a great medium for entertainment. But 49% in Germany use the Internet but not social media. 40% in Greece use neither.

Marketers believe such idiotic statements as “people want to have relationships with brands on social media” but here’s one piece of advice: Go into a supermarket and ask a random stranger if he wants to have a relationship with any of the items in his shopping cart, He’ll probably punch you in the face for pervert. Second, go through your own social media feeds and see how many times you interact with people compared to brands.

Slide 22

In the words of this study by Engagement Labs, compared to television: “there is little to no relationship between the conversations happening on social media versus those that happen in real life.” In general, people talk to each other about what they see on television. When was the last time that anyone in the normal world — people who do not work in marketing or media — said to a friend, “Hey, did you see that tweet?” Remember, shares do not count. I am talking about conversations in the real world — which are much more powerful.

Slide 23

Another reason for the bias against television is the assumption that some current trend will always continue in a straight line. But past media performance does not guarantee future results. It would not be a marketing presentation without discussing millennials, so let’s talk about them.

Everyone still discusses millennials as if they are young college students, but the oldest of them are now in their early and mid-thirties. We have assumed that just because millennials supposedly watched less TV while they were younger that they must still watch less TV now. But that’s not the case. People change media consumption habits as their lives change.

Slide 24

Here’s an example from the world of radio. According to Nielsen, teenagers used to listen to less radio than prior generations did. So, I’m sure many marketers just threw up their arms and said, “Radio is dead!” But here’s what Nielsen found: They listened to more radio as they grew up and got jobs! They started to listen to radio while commuting in their cars and in working in their offices. Radio became more alive.

Slide 25

Here’s something similar that ThinkBox found. Millennials are watching more TV as they get older and have children.

I’ve got a theory. Based on what I have seen in the online marketing industry, I will make an informed guess that the average digital marketer is under the age of 35, does not have children, works and probably lives in a city, has a university or graduate degree, goes out with friends multiple nights every week, has an easy commute and does not own a car, spends hours on Twitter, brags about not having a television, and binges Orange is the New Black on Netflix.

But many of the people who purchase our products are in their forties and fifties and have several children. They never went to university. They spend an hour each way commuting to and from suburbia to a menial, low-tech job at which they are overworked and underpaid. They come home to a dinner of leftovers because the spouse wanted to save money and pay some overdue bills. They have disagreeable teenagers who just want to go out and do who-knows-what with who-knows-who. They have tweeted maybe once or twice at most.

And you know what? They are tired. After they return from work and eat the reheated casserole from yesterday, they just want to relax, sit on the couch, and drink some beer, wine, or some beverage of choice. They don’t want to search for something to watch. They want to turn off their brains, click a remote control, and be entertained by that large box in the living room until they fall asleep. Same as it ever was. And as millennials are getting older, they are doing the same.

Slide 26

People have always assumed that the alleged move to streaming is a function of age and that it’s the new, cool thing to do. But according to a report in the US by Mintel, the move to streaming is a function of income and not age. Across demographic segments, those who use Netflix and other options do so largely because it is cheaper than cable TV. Most who can afford pay TV have it. The move to OTT is not a demographic issue but an economic one.

Slide 27

Now, let’s look at here at India. From what I researched before coming here, I saw that India’s economic growth makes it a TV powerhouse. Indians — and please correct me if I’m wrong — are moving away from large families living together and towards smaller so-called nuclear families living in homes and flats. If there is one TV per household, then that means the number of televisions is increasing. Sixteen years ago, one-third of Indian households had TVs. Today, close to two-thirds of households own TV sets. From 2015 to 2017, there was a 19% increase to 183 million TV households in India. That means that more people are watching TV in India than all of Europe combined.

Slide 28

So, we can see that the move towards non-traditional TV is not as widespread as we think and that the reasons for those who change are different than what we think.

But one fact still stands. TV is still the best advertising medium. Just because a medium is popular does not mean that it is a good advertising medium. Just because a medium is less popular does not mean that it is a bad advertising medium. The two issues are completely different questions.

Slide 29

As Jakob Nielsen wrote about online ads in 1997, TV is warm and the internet is cold. The internet is dry and informative but television is magical and entertaining. The Internet is a bunch of individual people doing individual things. TV is a bunch of people communally viewing the same thing at the exact same time — while knowing that millions of other people are doing the same thing at the same time.
Guess which one is better at planting seeds, building brands, and making money over mass audiences?

Slide 30

A Thinkbox report found the answer in that TV is a medium that taps into the emotional part of our brains much more easily than online channels. And human beings typically make decisions with the emotional part of our brains and then justify the choices later with the rational part in our frontal lobes. Guess where TV fits in.

Slide 31

The purple on the right is how much each medium is considered most trustworthy by consumers in advertising. The black on the left is how much each medium is least trustworthy. As you can see, TV is most trusted and the Internet as a whole is the least trusted.

Slide 32

In terms of brand recall, TV is the leader over online digital video platforms and news websites.

Slide 33

No why is TV so effective in brand advertising whereas digital is not? It comes down to the principles of signaling versus targeting. TV is very good at signaling. Digital is very good at targeting.

Dave Trott, one of the brightest creative minds in the UK, once put it this way: “Currently, in digital, targeting is considered everything. Targeting relies on identifying the consumer and hitting them as often as possible. But this ignores the context the ads run in. And consequently it smacks of cheapness, and of desperation. It certainly doesn’t send out the best signal about the brand, the way having it seen in the best context would.”

Slide 34

And as we will see, the best context is television.

Slide 35

TV remains the single best way to build a strong brand for the long-term. At a trade event last month in the UK, mobile operator GiffGaff’s head of advertising, Abi Pearl, said that TV advertising and sponsorship were what built their brand.

She said: “Back then we thought we didn’t need TV and that we could just make content that would go viral and make us famous. That didn’t happen at all. We were wrong.”

Here’s a theory. Advertising works not only because we see messages individually but also because we see messages that we know that everyone else is also seeing. Take Nike. They do advertising to make their shoes seem like those for sports stars. If I see an ad for Nike shoes online, I do not care because I do not know if anyone else had seen it. But If I see an ad for Nike shoes on TV, then I know that millions of other people have seen it as well. That makes it all the more important to me. Not only will I think that wearing Nike will make me look like a star — I know that everyone else will also think that I will look like a star. And this is why everyone will be more likely to by Nike shoes.

And simply put, TV is the best medium to make this whole process happen.

Slide 36

Take a look at this moment from sports history here in India that I am sure everyone will remember.

[play video]

Slide 37

Image that historic TV program. How many millions or even billions of people were united in watching that media — and the advertising — at the exact same time? TV is an emotional, communal touchpoint for society. Digital is a dry medium that separates people.

Think about this one question: We have had the Internet for more than twenty years. How many non-web native brands have been built online — things like soft drinks, mustard, dishwashing soap, and beer? Think about that and get back to me.

The data shows why. Karen Nelson-Field, a professor at the University of Adelaide and the founder of Media Intelligence Company, gave this presentation at a recent ReThinkTV event in Australia.

More people actively view an advertisement on television compared to the same ad on YouTube or Facebook. Facebook is the king of passive viewing. Many people on YouTube are not viewing at all because they listen only to the audio while doing something else.

Slide 38

Advertisements on television take up the entire screen on television but not on YouTube or Facebook. Ads on YouTube or Facebook take up 30% or 10% of the screen respectively.

Slide 39

These two factors — attention and coverage — make TV a much better advertising medium than YouTube or Facebook.

Slide 40

Much of marketing has been governed by the 60:40 rule — that 60% of your spend should aim to build the brand for the long term and 40% of should aim to get sales in the short term. Well, as I will show here, that 60% is best spent on traditional mediums such as television.

Slide 41

For multi-year campaigns, TV far outshines all other mediums.

Slide 42

It is also the most efficient in terms of the cost versus reach.

Slide 43

Now, this information is what has always scared people in the television and traditional media worlds. Yes, if you count all of the ad spend that was spent on the Internet and compare that to television, then the Internet did finally surpass TV for the first time last year.

I will argue here that that is an unfair statement made by people who do not understand the difference between brand advertising and direct response marketing. Much, if not most, advertising online is direct response, meaning that it is likely that most brand advertising is still on TV and other traditional outlets.

Slide 44

Digital is very good at direct response campaigns that identify, target, and track consumers online. Most so-called marketing innovations in the adtech, martech, and AI worlds simply seem to be new ways to do direct response. And why is that? Digital is not a good medium for building brands.

Slide 45

This is a metaphor that I use. Within the promotion mix, there have always been two main categories of advertising: brand advertising and direct response marketing.

Direct response is picking the fruit — those people are are down in the funnel and ready to buy. Brand advertising is watering the three so that more fruit will grow in the future. If you focus too much on direct response, you will sell a lot today but go bankrupt tomorrow. If you focus too much on brand advertising, you will go broke today but maybe sell a lot in the future. Again, you need that 60/40 divide for maximum results over the short term and long term.

Today, TV is generally still the best medium for brand advertising to grow the fruit.

Slide 46

Now, as I said, I have no skin in this game. I’m not an advocate. But since I’m presenting at a TV conference, I wanted to offer some final advice. If I worked in TV, this is what I would do.

Slide 47

First, go on the offense. There are so many people who work in digital marketing — and those who are in university who want to go in online marketing — who know nothing about the benefits of TV. They don’t know that it’s a medium that allows you to be a lot more creative because, let’s be honest, a lot of digital marketing is boring and entirely forgettable.

Don’t let those who are biased towards digital mediums and tactics frame the debate.

Slide 48

As Ad Contrarian Bob Hoffman has noted, we need to counter the falsehood that TV is dying by pointing out that it’s having babies.

Slide 49

The number of ways to watch television increases with every generation.

Slide 50

TV is larger than ever before. There is a lot more TV being produced today than there was in the days of every country having only a few networks.

As I’ve pointed out, total TV viewing time is unchanged. But that time is fragmented among numerous channels and programs. A media buy for any given program will reach fewer people, yes, but it will also cost less. That means that your TV ad budget can be more flexible and dynamic and spread across numerous channels and programs.

Slide 51

But overall, live TV and related mediums will still be important because the nature of the medium itself is best for advertising and it still dominates video viewing for one simple reason.

Slide 52

People will always want mass-produced entertainment. That will never change. What will change is the pipe over which it is delivered and transmitted. But that can be managed.

Slide 53

If the TV industry collectively does any major PR campaign within the marketing community, I would recommend that it address these main points. (I would go into detail, but this slide could be its own presentation.)

Within the online advertising world, there is a crisis around viewability issues, bots, and outright fraud that does not exist in TV. Unlike the digital ad world, TV and radio’s numbers as well as print circulations are reported and then audited by independent third parties. Unlike the online ad world, TV, print, and radio average numbers represent actual human beings. TV does not use any tracking or online surveillance marketing, which is causing many people to block Internet advertising.

This is what you should be telling anyone who advocates turning away from TV and towards digital ads.

Slide 54

When I give presentations as a keynote marketing speaker and write The Promotion Fix column here at The Drum, I often talk about the integration of ‘traditional’ and ‘online’ marketing.

But remember, there is no such thing as “traditional marketing” and there is no such thing as “digital marketing.” There is only marketing. We are all doing marketing – and we are all simply doing it over various online and digital mediums in the process.

We can do tactics such as brand advertising, public relations and direct marketing over traditional or online channels. We should not be ‘digital-first’ or ‘offline-first’. We should be channel neutral and use the best media mix as the customer-facing research determines.

In terms of brand advertising, I am very happy to report today that TV is still clearly the best way to go. TV is most certainly not dead, and I hope you will remember that for the rest of this conference and beyond. Again, a belated Happy Hoolie — and thank you.

Thanks for reading! Follow me on Twitter. See my marketing speaker page or marketing workshop page to have me visit your conference or company!

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