Are there fewer (but more relevant) ads in our future?

A new theory in the MarComm field is the notion that the future of advertising is one where people are confronted by less advertising – but the ads that are presented to them will be more relevant to their interests.

I’m pretty sure about the second part of that … but not so sure about the first bit.

Certainly, “fewer, more relevant ads” don’t appear to be what’s happening at the moment.

Think about the plethora of digital screens these days – not just smartphones and tablets and such, but also the ones on gasoline station pumps, in taxis, on airline seatbacks, in kiosks and on the sides of buildings – and it’s pretty clear that many more ads are being displayed to more people in more places than ever before.

Of course, many of these ads are selling products or services that are of little or no interest to most of us. Some people respond by blocking ads on their own personal devices, doing what they can to mitigate the onslaught.

As well, people seem to like the idea of commercial-free TV to the degree that quite a few are willing to pay for video-streaming services like Netflix and Amazon Prime Video that provide content to them without all of those pesky ads embedded within.

It’s also true that advertising and media platforms are becoming ever “smarter” and more data-driven, giving them the ability to replace mass-reach ads with ones that are customized to some degree so that different people see different ads. It isn’t a stretch from there to the notion that because these ads will yield better results for media platforms, total ad loads can be reduced while still increasing consumer engagement.

This idea is leading some people to predict that in the coming few years, consumers will experience significant change in how many ads they see and how relevant they’re likely to be.

In response to that, I have two counter-thoughts. The first is that with all of the buying choices that people have today — more than ever before — brand loyalty is being eroded.  And with less brand loyalty, advertisers need to stress “recency” – being the last message a consumer sees before purchasing a particular product or service.  This leads to the compulsion for advertisers to “be everywhere all the time” so that theirs is the last message the consumer sees before taking action.  It’s hardly in line with “fewer, more relevant” ads, unfortunately.

The other issue pertains to the basic economics of advertising. Fewer ads will happen only if their increased relevance is accompanied by a commensurate increase in their price.  I don’t see that happening anytime soon either, unfortunately.

Besides, heightened ad “relevance” isn’t really enough to overcome the issue of audience aversion and avoidance. On that score, fundamental attitudes have never changed:  The consumer’s relationship with advertising has always resided somewhere between “passive ennui” and “managed hostility.”

Today, of course, consumers can do more to “manage their hostility” to advertising than ever before, creating even more of a challenge on the ad revenue front.

What do you think? Are we indeed moving to an era of “fewer, more relevant” ads … or will we continue to deal with merely a more contemporary version of “all advertising, all the time?”  Please share your thoughts with other readers below.

The New York Times: Out of print in ten years?

It isn’t anything particularly special to hear people talking about the declining market for print newspapers, and how market dynamics and demographic trends have put the traditional newspaper publishing model at risk.

At the same time, most newspaper publications have found it quite challenging to “migrate” their print customers to paid-subscription digital platforms. The plethora of free news sites online makes it difficult to entice people to pay for digital access to the news – even if the quality of the “free” coverage is lower.

New York Times CEO Mark Thompson, appearing on CNBC’s Power Lunch program (February 12, 2018).

But it was quite something to hear a forecast made by Mark Thompson, The New York Times’ CEO.  Earlier this month, Thompson made remarks during CNBC’s Power Lunch broadcast that amounted to a prediction that the NYT’s print edition won’t be around in another ten years.

Thompson went on to explain that his company’s objective is to build the digital product even while print is going away:

“The key thing for us is that we’re pivoting. Our plan is to go on serving our loyal print subscribers as long as we can.  But meanwhile, to build up the digital business so that we can have a successful growing company and a successful news operation long after print is gone.”

It’s one thing for newspapers in various cities across the country to be facing the eventuality of throwing in the towel on their print product. It’s quite another for a newspaper as vaunted as The New York Times to be candidly predicting this result happening.

It would seem that the NYT, along with the Washington Post, The Wall Street Journal and possibly USA Today would be the four papers most able to preserve their print editions because of their business models (USA Today’s hotel distribution program) or simply because of their vaunted reputations as America’s only daily newspapers with anything approaching nationwide distribution.

I guess this is what makes the Thompson remarks so eyebrow-raising. If there isn’t a long-term future for The New York Times when it comes to print, what does that say about the rest of the newspaper industry?  “Hopeless” seems like the watchword.

It will be interesting indeed if, a decade from now, we find no print newspapers being published in this country save for hyper-local news publications – the ones which rely on print subscribers seeing their friends and family in the paper for weddings, funerals, community activities, school sports and other such parochial (or vanity) purposes.

Interesting … but a little depressing, too.

YouTube: It’s bigger than the world’s biggest TV network.

Just a few years ago, who would have been willing to predict that YouTube’s user base would outstrip China Central Television, the world’s largest TV network?

Yet, that’s exactly what’s happened: As of today, around 2 billion unique users watch a YouTube video at least once every 90 days, whereas CCT has around 1.2 billion viewers.

Consider that in 2013, YouTube’s user base was hovering around 1 billion. So that’s quite a jump in fewer than five years.

Here’s another interesting YouTube factoid: Nearly 400 hours of video content is being uploaded to YouTube each and every minute.

For anyone who’s tallying, this amounts to 65 years of video uploaded to the channel per day. No wonder YouTube has become the single most popular “go-to” place for video content.

But there’s more:  Taken as a whole, YouTube viewers across the world are watching more than 1 billion hours of video daily. That’s happening not just because of the wealth of video content available; it’s also because of YouTube’s highly effective algorithms to personalize video offerings.

One of the big reasons YouTube’s viewership has expanded so quickly goes back to the year 2012, which is when the channel started building those algorithms that tap user data and offer personalized video lineups. The whole purpose was to give viewers more reasons to watch more YouTube content.

And the tactic is succeeding beautifully.

Another factor is Google and its enormous reach as a search engine. Being that YouTube and Google are part of the same commercial enterprise, it’s only natural that Google would include YouTube video links at the top of its search engine results pages, where viewers are inclined to notice them and to click through to view them.

Moreover, Google pre-installs the YouTube app on its Android software, which runs nearly 90% of all smartphones worldwide.

The average run time for a YouTube video is around three minutes, with some 5 billion videos being watched on YouTube in the typical day.

Considering all of these stats, it’s very easy to understand how Internet viewing of video content is well on the way to eclipsing overall television viewing before much longer. As of 2015, TV viewing still outpaced interview viewing by about margin of about 56% to 44%.  But when you consider that TV viewing is stagnant (or actually declining a bit), while interview viewing continues to gallop ahead, the two lines will likely cross in the next year or two.

What about you? Like me, have you found that your video viewing habits have changed in the direction of YouTube and away from other platforms?

Al-Jazeera axes the “Comments” section on its English-language website.

What took them so long?

This past week, al-Jazeera.com, the English-language website run by the Qatar-based international media company, announced that it is disabling the comments section on its site.

In a written statement, the company complained that what was originally designed to “serve as a forum for thoughtful and intelligent debate that would allow our global audience to engage with one another” had devolved into a free-for-all, with the comments sections “hijacked by users hiding behind pseudonyms spewing vitriol, bigotry, racism and sectarianism.”

“The possibility of having any form of debate was virtually nonexistent,” the al-Jazeera statement added – as if any further explanation for their action was needed.

I have a comment of my own in response to al-Jazeera: “Welcome to reality.”

Al-Jazeera is hardly an innocuous website in cyberspace. It reports on some of the most explosive developments affecting the most volatile regions of the world.  Considering the sparring parties in these never-ending conflicts, complaining about “sectarianism” is almost laughable.

Is there a more “sectarian” group of people on the face of the earth than those who are exorcised about the inhabitants of the Middle East – or of Muslims, Christians and Jews in general? I don’t know of any.

As for the comments section being a repository of derision and hate, how is anyone surprised? What other result could one expect – especially since there was little or no attempt by al-Jazeera personnel to moderate the comments section?

The fact is, unmoderated comments sections that also allow for poster anonymity are a blanket invitation for “the inmates running the asylum.” Comments that are left in these “anything’s allowed” forums chase the well-intentioned participants away – and fast.

On the other hand, I’ve found plenty of well-moderated forums and comments sections that are as valuable as the underlying articles themselves.

That doesn’t happen all by itself, of course. Good moderation takes effective policies – requiring commentators to identify themselves for a start.  It also requires an ever-watchful eye.

Evidently, al-Jazeera and others like them found the not-insignificant effort required to perform this degree of moderation to be unworthy of their time or financial resources. And as a result, their forums became worthless.

And now they’re history.

The Connected Home

It doesn’t take a genius to realize that the typical American home contains more than a few digital devices. But it might surprise some to learn just how many devices there actually are.

According to a recent survey of nearly 700 American adults who have children under the age of 15 living at home, the average household contains 7.3 “screens.”

The survey, which was conducted by technology research company ReportLinker in April 2017, found that TVs remain the #1 item … but the number of digital devices in the typical home is also significant.

Here’s what the ReportLinker findings show:

  • TV: ~93% of homes have at least one
  • Smartphone: ~79%
  • Laptop computer: ~78%
  • Tablet computer: ~68%
  • Desktop computer: ~63%
  • Tablet computer for children age 10 or younger: ~52%
  • Video game console: ~52%
  • e-Reader: ~16%

An interesting facet of the report focuses on how extensively children are interfacing with these devices. Perhaps surprisingly, TV remains the single most popular device used by kids under the age of 15 at home, compared to other devices that may seem to be more attuned to the younger generation’s predilections:

  • TV: ~62% used by children in their homes
  • Tablets: ~47%
  • Smartphones: ~39%
  • Video game consoles: ~38%

The ReportLinker survey also studied attitudes adults have about technology and whether it poses risks for their children. Parents who allow their children to use digital devices in their bedrooms report higher daily usage by their children compared to families who do not do so – around three hours of usage per day versus two.

On balance, parents have positive feelings about the impact technology is having on their children, with ~40% of the respondents believing that technology promotes school readiness and cognitive development, along with a higher level of technical savvy.

On the other hand, around 50% of the respondents feel that technology is hurting the “essence” of childhood, and causing kids to spend less time playing, spending time outdoors, or reading.

A smaller but still-significant ~30% feel that their children are more isolated, because they have fewer social interactions than they would have had without digital devices in their lives.

And lastly, seven in ten parents have activated some form of parental supervision software on the digital devices in their homes – a clear indication that, despite the benefits of the technology that nearly everyone can recognize, there’s a nagging sense that downsides of that technology are always lurking just around the corner …

For more findings from the ReportLinker survey, follow this link.

Local TV news viewership continues to decline … even as stations ramp up their news coverage.

How’s this for an ironic twist: The Pew Research Center is reporting that the local TV newscasts if ABC, CBS, FOX and NBC affiliates across the United States are continuing to show viewership declines, even as stations are increasing the amount of the local news content they broadcast.

According to Pew, which analyzed Nielsen results for its report, “late” news (10 or 11 pm) suffered an 11% decline to 20.3 million viewers across the United States during 2016.

Early evening news (5 or 6 pm time slots) lost ~9% in viewership, dropping to 22.8 million viewers.

Morning news? It didn’t fare any better, falling a similar ~9% to just 10.8 million viewers.

But despite these continuing declines, there’s scant evidence that local station executives see local news as a losing proposition.

Instead, they appear to be doubling down on it, figuring that local news is one of the few remaining points of differentiation against online news sites that usually don’t provide very much in the way of in-depth local coverage.

Underscoring this, according to a survey conducted by the Radio-Television-Digital News Association and Hofstra University, local TV stations averaged 5.7 hours of news programming per weekday during 2016, which is up slightly from 5.5 hours in 2015.

Stats aside, one has to wonder how much longer local news can continue to be a differentiating factor for local TV stations? Those very same stations are creating their own competition by operating robust websites of their own.  And of course, many people have become quite adept at punching their own zip codes into weather apps to obtain “micro-local” weather information.

Sports? There are thousands of websites and apps available that provide fingertip results and stats down to the most minute level of detail.

Furthermore, as the older population “ages out,” the notion of sitting down at a prescribed hour every day to watch the news on television is likely to go the way of newspapers.  Which is to say, an inexorable slide into irrelevance.

It just isn’t how the world operates any longer … even if one is 60 or 70 years old.

More statistics from the Pew Research Center report can be accessed here.

ESPN: What the heck just happened … and who’s to blame?

Last week, ESPN announced the layoffs of some 100 staffers, most of them on-air talent. This comes after layoffs of ~300 other personnel in 2015, but since those were behind-the-scenes employees, the news didn’t seem as momentous.

There are several factors coming together that make life particularly difficult for the sports network. One big problem is the commitment ESPN has made to pay top-dollar for the right to air professional sports events, particularly NFL and NBA games.

These financial commitments are set in stone and are made well into the future, which means that ESPN is committed to high long-term fixed costs (broadcast rights) in exchange for what’s turning out to be declining variable revenues (viewer subscription fees and advertising).

This isn’t a very good financial model at all.

Which brings us to the second big factor: declining subscribers.

Since 2011, the network has lost ~15 million subscribers. So far in 2017, the network has experienced an average loss of ~10,000 people per day.

The financial impact of these losses is significant. All of those lost subscribers amounts to more than $1.3 billion per year in money that’s no longer going on ESPN’s books.

Sports journalist Clay Travis predicts that if the current trajectory of subscriber losses continues, ESPN will begin losing money in 2021. (And that’s assuming the subscriber base losses don’t accelerate, an assumption that might be a little too rosy.)

The fundamental question is why so many people are no longer subscribing to ESPN. The predictable answer is because services like Hulu, Netflix and Amazon, with their on-demand services, are squeezing cable/satellite TV and its subscription business model.

One way Disney (ESPN’s parent company) has attempted to maximize viewer subscription revenues over the years has been by bundling the network with other, less lucrative Disney media properties like the History Channel, Vice, Disney Junior and the Lifetime Movie Network. In the Disney constellation of channels, ESPN has been the acknowledged “driver” of subscription revenues all along, with die-hard sports fans being willing to subsidize the other Disney channels – often never watched by these subscribers – as the price of access.

But something else is happening now:  ESPN itself has begun to lose viewers as well.

According to television industry publication Broadcasting & Cable, ESPN’s viewership rating has declined ~7% so far this year.  ESPN2’s rating is down even further – an eye-popping ~34%.

Percentages like those aren’t driven by “sidebar” incidental factors. Instead, they cut to the core of the programming and the content that’s being offered.

If there’s one programming factor that’s tracked nearly on point with ESPN’s viewership declines, it’s been the explosion in “sports-talk” programming versus actual “sports game” programming at the network. As Townhall opinion journalist Sean Davis has written:

“If you talk to sports fans and to people who have watched ESPN religiously for most of their lives, they’ll tell you that the problem is the lack of sports and a surplus of shows featuring people screaming at each other. The near-universal sentiment … is that the content provider sidelined actual sports in favor of carnival barkers.”

Davis points out the flaw in ESPN’s shift in colorful terms:

“ESPN went from the worldwide leader in sports to yet another expensive network of dumb people yelling dumb things at other dumb people, all the while forgetting that the most popular entertainment of people yelling about sports stuff for several hours a day – sports talk radio – is free.”

There’s an additional factor in the mix that’s a likely culprit in ESPN’s tribulations – the mixing of sports and politics. That programming decision has turned out to be a great big lightning rod for the network – with more downside than upside consequences.

The question is, why did ESPN even go in that direction?

Most likely, ESPN execs saw the tough numbers on higher costs, subscriber losses and lower ratings, and decided that it needed a larger content pie to attract more consumers.

The reasoning goes, if some people like sports and others like politics, why not combine the two to attract a larger audience, thereby changing the trajectory of the figures?

But that reasoning flies in the face of how people consume political news. In the era of Obama and now Trump, political diehards gravitate to outlets that reinforce their own worldviews:  conservatives want news from conservatives; liberals want news from liberals.

MSNBC and the Fox News Channel have figured this out big-time.

But if you’re starting with a cross-partisan mass media audience for sports, as the original ESPN audience most certainly was, trying to combine that with politics means running the risk of losing one-half of your audience.

That’s what’s been happening with ESPN. Intertwining sports with coverage about bathrooms in North Carolina, transgender sports stars, gun control laws and proper national anthem etiquette only gets your numbers going in one direction (down).

The question for ESPN is how it plans to recalibrate and refocus its programming to truly defend its position as the worldwide leader in sports broadcasting. However it decides to position itself in terms of the delivery of its content – television, online, subscription, pay-per-view or other methods – it should refocus on covering live sports events.

Not sports talk … not debate … not politics or sociology, but the sports themselves.

At one time, not so long ago, sports were a safe refuge from politics and the news. ESPN would do itself – and its viewers – a favor if it sought to recapture that spirit.