MediaPost | Media Magazine

Weighing the Numbers Game

Tue, 16 Apr 2013 16:11:00 -0400

For media agencies, preparing for the upfronts used to be fairly straightforward: Watch the new shows, study the ratings for the old ones, review some demographics and place your bets. Win some, lose some, wash, rinse, repeat.

Flash forward to 2013, when buyers have the option of arming themselves with a mountain of data that makes Nielsen ratings look like the score of a ping-pong match. There’s C3, C7, set-top, single-source, social media, commercial ratings — the list goes on and on. And don’t forget the expansion of a three-network field into a veritable free-for-all of cable networks and digital platforms. So while there might be a ton more data, there’s also a whole lot more to measure, because who the heck knows what anyone is watching anymore?

“What has become abundantly clear in the past few years with all the different media devices available and vying for people’s attention is that what we really need to focus on is just attention,” says Brian Hughes, SVP and head of the audience analysis practice at MagnaGlobal. “People are bombarded with ads all day from all kinds of places, so we really want to focus on the times and the content in which we feel they’re most attentive.” For Hughes, doing so requires a carefully balanced mix of proprietary, social and vendor data.

It’s hard to say exactly when this modern era began. Perhaps in 2007, when the networks started basing their rates on the ratings of commercials rather than the shows they buffeted. But some would go back further, to 2002. Or more specifically, September 15, 2002, when a pay-cable show turned heads by siphoning off a serious chunk of America’s eyeballs.

That was the day HBO aired the first episode of The Sopranos’ blockbuster fourth season. The show pulled nearly 14 million viewers, then an all-time high for the show (and a remarkable feat given the mere 30 million U.S. homes that subscribed to HBO).

Billie Gold, VP and director of programming research at Carat, remembers scratching her head over the exodus of viewers. “We were all kind of wondering what happened,” she says. “It was one of the first times, besides when sports air on ESPN, that we saw some network shows take a hit during the hour that The Sopranos was on.”

“Now we see the same thing happening when AMC’s Walking Dead is on,” she adds.

Today, Gold says the rise of original programming on cable is the main factor shaping how she prepares for the upfront. With basic cable networks producing some of the most popular and critically acclaimed shows on television, determining which broadcast shows will pull an audience is harder than ever — particularly because the broadcast networks are pulling so few viewers overall. Instead of factoring in two or three other networks, buyers must now scan the entire television landscape in search of other attractions, even those as seemingly inconsequential as Pawn Stars or Hoarders. (As if to drive home the point, the debut of The Bible on the History Channel drew a shocking 13.1 million viewers in March, just days after A&E pulled nearly 9 million viewers with the third-season premiere of its reality series Duck Dynasty.)

“The basic process has remained the same,” says Gold. “But we have to spend more time and energy figuring out what shows are going to do because we keep seeing them reach all-time lows. We keep saying ‘Oh it’s in a good time period,’ or ‘it’s following this,’ but it used to be much easier to predict shows.”

The change in ratings currency has also had an irreversible impact on how buyers do their research. Long gone are the days of share estimates, when agencies would approximate what percentage of active televisions were tuned to a given show — a relic of the days when commercial prices were tied to their host programs.

“We don’t do them anymore because the shares and the HUTs [Households Using Television] were all wrong,” says Lyle Schwartz, a managing partner at GroupM. “Today, we actually estimate the audience, not the share. The old metrics don’t seem to work in the calculations these days.”

The reigning currency these days may be the C3 (see sidebar), but that doesn’t limit the buyers from consulting other sources. What used to be a one-company business — Nielsen told you who watched what; otherwise you relied on hunches and gut — is now a multi-vendor universe eagerly providing buyers with every form of data. It’s information that may not make its way directly into a negotiation, but it can help buyers decide whether or not a program’s worth buying.

Not that all buyers choose to use them. “Not at all,” says Gold, when asked about including set-top-box data in her research. “Basically set-top-box data is just looked at in terms of trending and not in terms of ratings,” she says. “We match it up with Polk data and it marries with Simmons data, so the planners might use it directionally. But it in no way affects how we use it in terms of doing projections at all.”

As for single-source data, much-ballyhooed measurements that tie TV exposure to product purchases at the household level, the technology isn’t yet reliable enough to be compelling, says Hughes.

“There really isn’t a definitive single-source product available yet,” he said.

Still, MagnaGlobal long ago sensed the need to complement the usual Nielsen data, and developed a proprietary measurement called the Magna Value Index that seeks to capture audience attention. Exactly how it does this Hughes won’t say. “Some of the indicators we might use are how long they’re tuned in before they tune away or do something else,” he says,” or at what rate are they recording and playing back the program.” To supplement that metric, Hughes relies on social media activity connected with a given show. “We feel that people’s interest in watching a show and commenting on it in real-time also belies a level of attentiveness.”

Not everyone buys that theory, however. Critics question whether somebody tweeting about a show is necessarily paying attention to the commercials. But Hughes claims that his company has cracked the social/TV code.

“We’ve done a lot of really in-depth research on social activity that happens simultaneously with TV viewing,” he says. “Like when we’re looking at a big live event like the Oscars, we’re really looking at down to the minute how much activity is happening. Is it happening during commercial breaks? Are people commenting on what’s just happened or on something that’s happening in real time?” By studying the difference, MagnaGlobal believes it can tell just how engaged viewers are with a program.

Even with all the whizz-bang ratings available today, some buyers still rely on old-school metrics that have little to do with television. Schwartz says GroupM buyers “look at online viewing information from things like Nielsen as well as ComScore” and SNL Kagan, which provides wireless metrics. “But we also take a look at financials like the profitability of companies,” he says. “We look at the GDP, we look at costs of production such as gasoline prices, interest rates, unemployment.” Like any marketplace, TV advertising is based on supply and demand, so Schwartz says it’s important to know whether the ad budgets of certain industries might rise or fall in the coming year.

Unlike the buyers of decades ago, media agencies today can hardly complain about not having enough data. Instead, the problem seems to be an overabundance of available metrics and insights, not all of which have yet proven their value. So like the advertisers who find themselves drowning in big data, unsure what to respond to and what to file away, media buyers today may find their biggest problem is simply separating the wheat from the chaff.

“We’re of the mind that’s not about the number of sources you have,” says Hughes. “It’s about having the right sources.”

Negotiating a New Frontier

Tue, 16 Apr 2013 16:10:22 -0400

We hear about them more and more these days — those cord-cutters who have set sail from the expensive docks of traditional television and are waving from the shores of online video, happy, free, untethered, pockets heavy with saved money. The consumers who do opt to forgo the traditional TV model present a problem for content creators — namely, how to make money — or at least take some from television’s 70 billion-dollar-a-year ad revenue compared to digital’s 2 billion.

So while the TV advertising buyers are coming together in April in big hotel conference rooms in New York for the annual upfronts, across town an emerging conference is coming together for a similar event focused on the online video space that its presenters hope will one day rival the upfronts: the NewFront.

Started in 2008 by digital agency Digitas and spearheaded by then-CEO Laura Lang, currently the outgoing CEO of Time, Inc., the NewFront sought to create a marketplace for the growing segment of digital content that hadn’t found a home with marketers and advertisers.

“It started when we realized there was a burgeoning market of digital content creators,” says Lang, “There was no way to put that group of people together with brands and marketers. We said, ‘Wait, there is not a natural marketplace for this growing segment.’ It was very clear that people were consuming digital material. We wanted to show people it’s a future marketplace for digital content creations. A creation of a marketplace [was the goal].”

The first year’s NewFront, known as the Digital Content NewFront, brought together prominent digital content creation companies like MySpaceTV, MTV and the now defunct 60 Frames. The panelists were heavy hitters in the media industry as well, with then-Disney chief Michael Eisner and 60 Frames CEO Brent Weinsten, among others. After that, the panelist names got even bigger, drawing in people from myriad professions including Al Gore, Demi Moore and Subway CMO Tony Pace who all had one goal: monetizing their online video properties... at some point.

“The goal at the time was to increase awareness of ever growing content creation to help marketers and advertisers understand the role digital content could play. For Digitas, it was a chance to show leadership,” says Lang.

When Digitas opened the NewFront to other agencies in 2012, the event became an industry force with content flowing in from competitors like AOL, Microsoft, Hulu, Vevo, Yahoo and Google/YouTube.

This year, Digitas will completely turn over the NewFront to the Interactive Advertising Bureau and host its own presentation during the event. “All six of the founding partners — Digitas plus the five founding publishers — recognized that the enthusiasm of agencies and marketers would grow if the NewFront was fully understood to be a marketplace run by sellers for buyers: all buyers,” says Randall Rothenberg, President & CEO of the IAB. “So IAB’s stewardship is simply an affirmation of neutrality in support of a vital and explosively growing marketplace.”

The Creators

Shira Lazar, cofounder and host of What’s Trending, a daily YouTube program, has been part of the NewFront since its inception: she hosted one of the first NewFronts and Digitas’ presentation again in 2011.

For online content creators like Lazar, the NewFronts are an opportunity to showcase their work and start a conversation with agencies about the online audience.

“An entire generation of people are getting content online,” says Damon Berger, CEO and cofounder of What’s Trending, “The subscription model, over the top — there is an entire generation who just watch online and it’s something advertisers are understanding more and more. At What’s Trending, forty percent of viewers access over mobile devices.”

With creators engaging their audiences, better and more finely tuned content can be produced based on consumer taste and preferences.

“The creators today have built communications and brands through two-way conversations with audiences,” says Lazar, “It changes how we produce content for this generation. It changes how we create and broadcast content. We can be more creative.”

This is good news for advertisers. Online content creators will even say it’s better than the TV ad model.

“Community allows advertisers to engage in a conversation that a one-way TV broadcast can’t handle,” says Berger, “Traditional TV is still linear and has no interaction even with Twitter and Facebook engagement.”

Are the buyers buying it?

Everyone wants to know just how much, if at all, the NewFront will affect its perceived counterpart.

“The upfronts are much more rooted in the negotiation aspects — driven by the scarcity of TV inventory and the competition for it,” says Jessica Sanfilippo, Group Media Director, 360i. “The rules are clearly defined and the opportunities in the form of spots are straightforward. With the NewFronts, we as buyers are still being sold conceptually by the digital publishers on the value — and, if you factor in all video channels including UGC, the inventory is fairly limitless. So the NewFront conversation shifted to more of the uniqueness of the integration opportunities, such as branded video entertainment. In that sense, the flexibility of execution opportunities afforded by the NewFronts translates into some strong branding opportunities.”

To that point, it may not be fair to compare the NewFront to the upfront in the future.

Lang agrees: “It’s not clear that the NewFront will mimic the upfronts. I do believe they will take money out of the markets.”

But the general consensus in the media community is that no money has been shifted from TV to online video ad budgets, though no one is certain.

“I’ve heard there are ranges from a half billion dollars moved from the upfronts to the NewFront,” says Lang.

“We have seen our clients adopt online video, not as a replacement to TV, but as a complement and supplement,” says Sanfilippo, “Clients understand the opportunity that online video offers in order to tell richer, more interactive stories with the consumer that go beyond the 30- or 60-second spot.”

With the IAB taking over the NewFront in 2013, the event is taking shape as something not quite entirely different from its Digitas days, but still evolving in scope and sophistication. “We look at IAB merely as the maitre d’ at the hottest restaurant in town — the burgeoning upfront marketplace for original digital video programming, distributed at mass scale, but infinitely segmentable and intimately targetable,” says Rothenberg. “Our goal is to help the producers of the most exciting digital content establish a robust market where agency buyers and brand marketers want to shop.”

And as the NewFront evolves, “there will be a new wave of new stars and celebrities from the digital world in the coming years,” says Lazar.

But not so fast. While buyers may pack into every seat at the presentations and eat all the shrimp at the after parties, don’t expect money to flow as freely as it does at the upfronts.

“There is urgency behind the upfronts, whereas the NewFronts involve more time for clients to source on budgeting as they shape their investment opportunities,” says Sanfilippo.

Still, Lang is optimistic: “The real deals are always done behind closed doors and that will always be the case. It will happen at the NewFront.”

Fast Forward: Worn And Threadbare

Tue, 16 Apr 2013 16:09:00 -0400

I collect T-shirts the way other people collect art or wine, but unlike them, I don’t preserve them for the future. I live in them to remember an important experience they are associated with. I wear them until they are worn out and all that’s left is the memory of what they represented. So it tickles me when I see my 17-year-old daughter sporting my 30-plus-year-old “No Nukes” T-shirt, or when I saw my son wearing the threadbare one shown in the image above.

That shirt is special to me for many reasons, but most importantly, because it was handed to me personally by late NBC programming chief Brandon Tartikoff in the spring of 1984, just after he briefed the affiliated station troops on the peacock network’s new prime-time schedule. The shirt has an NBC logo with the words “No Prisoners” on top of it, and it conveyed the spirit Tartikoff had when I interviewed him on his plans to turn the network around after another devastating prime-time season — and one in which some pundits had written NBC, and Tartikoff, off altogether.

Maybe it was just showmanship, or salesmanship, but I believed Tartikoff believed what he was saying to me when he outlined how the new schedule, with rookie series The Cosby Show as its centerpiece, would put NBC back on top. History proved him right, and the experience, more than any other, defined for me what the upfront is really about: making bets. Big bets, but calculated bets. And all the things I’ve been highly critical of over the years — the upfront’s smoke-and-mirrors spectacle, its antiquated market inefficiency, and especially the media spin surrounding it — are the things I love about it. It’s all about the show, and if you pick the right ones, you’re back on top.

We’ve dedicated this issue of MEDIA to examining the upfront — both the economics of its market structure, as well as the unique role it plays in the culture of our industry, and our society at large. It’s the closest thing Madison Avenue and Broadcast Row have to Hollywood’s dream factory, where the spin and sizzle are as much a part of the product as the product itself. But as the old Madison Avenue adage goes, nothing can kill a bad product faster than good advertising, so goes the prime-time upfront. But for every Manimal or Super Train there is also a Cosby. You just never know until the viewers actually weigh in.

The part I like the least about the upfront, is the clubby, incestuous nature of how business gets done. And if you wonder why I’m so cynical about it, it is embodied by another adage I heard just after I started covering the upfront, and it’s one that’s still used today: “No buyer ever got fired for paying too much in the upfront, but some have lost their jobs for missing the upfront.” The “missing” is a reference to the timing of the market, and the fact that buyers who don’t move fast can get left holding the bag, missing out on commercial time in the best shows and/or paying too much for them. It’s the kind of logic that is a nostalgic throwback to an old world of doing business in this age of programmatic buying and agency trading desks, but that kind of thinking is still pervasive among media buyers, and advertisers too.

I miss the days when a programmer like Tartikoff could make a few bets and transform a schedule, a network and prime-time television culture. I don’t miss the old-school way agencies buy the upfront — because, like my faded T-shirt, it lingers on.

Staying Power

Tue, 16 Apr 2013 16:08:00 -0400

Long-term, TV's big broadcast networks need much to maintain their continued viewer and advertising dominance: More hits, perhaps a slowing down of TV viewer erosion, and building new digital platforms that attract meaningful advertising revenues. In the short term, TV executives have more specific hurdles.

Let's Go Numb

Tue, 16 Apr 2013 16:06:00 -0400

The reality landscape is turning inward, a world within a world. TV reality producer Mark Burnett told "Esquire" he hates the term "reality television" and prefers "non-fiction programming." These shows -- even the best of them -- aren't reality. In the AAA ball of cable television, they are awkwardly choreographed worlds of manufactured tension, interspersed with soundtracks and cityscapes.

The View From the Stage

Tue, 16 Apr 2013 16:01:07 -0400

Mitch Oscar, a long-time agency executive, remembers Robin Williams taking the upfront stage to interest advertisers in a new series called Mork & Mindy.In full dress and playing his role as an alien, the comedian’s act included a prayer to the Nielsen gods.

“We all cracked up hysterically,” Oscar said.

Not all actors (or talent) sent out by networks to entice the buying community are able to bring the house down like a pre-movie star Williams. In fact, over the years, their appearances are arguably one of the main culprits why upfront presentations have lasted so many hours.

A standard has a network playing a clip of a coming new drama or comedy and then members of the cast coming out. A lead star basically says hello and thanks for your support. The rest just stand there.

Though there is always polite applause, after the routine happens for, say, the fifth time at a single presentation, some in the crowd might get a little antsy — assuming the actors aren’t well-known. In other words, not the Friends cast saying hello or a Kevin Bacon heralding a new TV role.

Advertisers may have gotten excited a few years back when the talent on NBC’s NFL coverage didn’t just appear, but tossed footballs into the crowd. There were only a few, though. Did advertisers wonder with all the money being spent, shouldn’t everyone get one in a goody bag?

In recent years, as reality
TV has boomed, “regular
folks” have been called on to entice advertisers — notably,
during presentations by cable networks. Discovery Communications, which doesn’t use scripted programming, makes particular use of them annually at its showcase at New York’s Time Warner Center.

Last year marked the first time Shorty Rossi, the star of Animal Planet’s Pit Boss, appeared before advertisers in the presentation (he had attended and mingled with them at post-event gatherings before). Like other actors and reality stars, he said he didn’t know what an upfront was before a briefing prior to his first one.

Now, he gets it, though. The attendees control billions of ad dollars that can impact a career.

“You can have the best show in the world and if you don’t convince the [advertisers] that it’s going to last for a while or the ratings are [going to be] great, you aren’t going anywhere,” Shorty said. “You can have the worst show in the world and have huge ratings and the advertisers are going to see that … they’re the ones that pay the bills, they’re the ones that pay my salary even though it comes from the network.”

Shorty didn’t just come out and wave last year. A clip introducing new show “Finding Bigfoot” ran and it seemed likely one of the stars would follow on stage. But, playing off the Bigfoot concept, Shorty emerged from a cloud of fog as the lights came up asking, “What did you expect, something bigger?”

He was holding pit bull Hercules. Dogs frequently make appearances in Super Bowl ads, so why wouldn’t they appeal to advertisers?

In that vein, Animal Planet tried it again last year with Tanked stars Brett Raymer and Wayde King. Like other network talent, they were scheduled to play a role in the next Puppy Bowl and came out with puppies and waved their paws.

Raymer said he and King do fine in front of crowds, but there were some nerves before going on. “Being a big part of the whole presentation was really exciting and just a fun thing, but when you don’t know what’s going to go on, there’s … a little bit of nervousness,” he said.

Fellow Discovery Communications star, Buddy Valastro — the Cake Boss who appears in an eponymous show on TLC — said he wants to appeal to two audiences: advertisers and his bosses. “I do feel a little bit more pressure on me because not only do you have [advertisers], but then you have all the people from Discovery and they’re great people … but you are still a little nervous because you still want to perform,” he said.

He’s been on stage multiple times — Discovery has presentations in New York, Chicago and Los Angeles — and said he once forgot his lines and “definitely got a little stage fright,” but improvised to the point he didn’t think anyone in the crowd noticed.

Speaking of “regular people” — or ones that used to be — Discovery authored one of the more emotional upfront moments in 2009 when Chesley Sullenberger, the pilot who landed the US Airways plane safely in the Hudson River, came out. TLC was announcing it would air a documentary about him, and the crowd gave him a sustained standing ovation.

Besides actors, network executives from sales to programming also appear on the upfront stage each year, and it’s important they be prepared for anything. Memorably, one year Mike Tyson appeared to introduce an Animal Planet show he’d be starring in, rooted in his love of pigeons. As he got going excitedly, he spoke about how he used to skip school while collecting them.

Animal Planet chief Marjorie Kaplan might have been a bit surprised, but she didn’t miss a beat after Tyson, seamlessly telling the advertisers, “We don’t support truancy, but this is going to be quite a show.”

Perhaps the best example of an executive acting extemporaneously with aplomb came in May 2011 at the Turner Broadcasting event. It was the upfront when the lights went out on Broadway (actually a few blocks away at the Hammerstein Ballroom). About 15 minutes into the show, an executive pointed the audience to a clip of a new comedy.

The screen was blank. And, it stayed that way for what must have seemed forever for the Turner bosses.

Upfront presentations are rehearsed, so when Steve Koonin, in charge of the networks presenting, realized some sort of power outage wasn’t in the script, he ran up on stage and offered a hilarious intro: “My name’s Steve Koonin, formerly of Turner Broadcasting.”

He proceeded to tell a series of jokes that killed time and just killed. At one point he said to advertisers, “Our pricing is not changing because of this.”

Upfront event schedules have moved over the years. In 2010, seemingly looking to take advantage of the popularity of Jersey Shore, MTV held an event in February not long after the show wrapped its first season. The cast didn’t take the stage, but was very popular when mingling with advertisers at an after-party.

Turner and ESPN have joined the broadcast upfront week, looking to persuade advertisers their value is on par with the Big Four.

In 2008, NBC sought to shake up the overall concept of a presentation, looking to emphasize NBC prime time along with other NBCUniversal assets. Instead of its typical Radio City grand show, it held an NBCU Experience — replete with the “Kitt” car, as a Knight Rider redux was on tap — in a tent at Rockefeller Center. There was also a party where Conan O’Brien did a bit, as he was readying to take over The Tonight Show.

The comedian riffed on NBC’s decision to try something new (or perhaps cheaper): “When I first started with this company 15 years ago … the NBC upfronts were held at prestigious Avery Fisher Hall. Remember those days. Then, they moved to historic Radio City, a beautiful majestic palace. Now, we’re all standing in a soggy tent outside the NBC store. I hope you’ll join us again at next year’s upfronts at the falafel stand on 49th Street.”

NBC traditionally had the prime lead-off position during upfront week on Monday afternoon when anticipation was high and advertisers weren’t tired of, well, largely unknown actors coming out and saying hi. In 2009, NBC held an evening comedy event after ABC’s Tuesday event and ceded its Monday spot.

Many would say that turned out to be major mistake. Fox pounced and has taken over the Monday spot. NBC has since returned with a Monday morning event, but no longer has the day to itself.

Needless to say, O’Brien is no longer in the spotlight at NBC, having been canned at the network. Turner, where he now hosts a late-night show on TBS, has called on him quite a bit, though, for laughs at presentations. (O’Brien had finished a bit just before the electricity problem in 2011.)

Perhaps, though, the most anticipated comedic performance of upfront week comes courtesy of Jimmy Kimmel, who annually pokes fun at the TV business at the ABC event, including his own network.

“He’s a highlight,” said Don Seaman, formerly of MPG and now at TVB. “Every single time I think he kills it.”

In 2011, Kimmel told advertisers: “I can’t promise you any of these shows will be good. I can’t promise you any of them will be successful. But what I can promise you is that they will be expensive to advertise in.”

And … “Remember those shows that we were so excited about last fall? We cancelled all of them. And yet here you are again. I think you might have a gambling problem.”

Does ABC censor him? Basically, no, Kimmel told Kim Masters last year in an interview on her public radio show in Los Angeles.

“They forgot to look at my script the first year,” he wagged (or maybe not). “Nobody was paying attention to me and I wound up making fun of them and kind of everything and it went well.”

He added: “Luckily, I was able to kind of set a precedent, and now I think people expect it from me. And, by next year they should be pretty well sick of me.”

Not a chance, says Seaman. “He owns that crowd … maybe it’s just because he’s mocking us, which we seem to appreciate. That works really well.”

(One long-time agency executive said Kimmel’s funny, but it’s not in good taste to mock the hand that feeds you, so to speak.)

Speaking of ABC, Seaman said that the network played the full pilot of Modern Family as it was getting ready for launch at Lincoln Center and advertisers were very impressed. “The whole room just went: that’s a hit,” he said. “That was obvious. Perfect.”

The cast may have come out afterwards, but it sounds like the deal with advertisers was already sealed before Kimmel could poke fun at it.

Show Starter

Tue, 16 Apr 2013 15:59:42 -0400

When it comes to announcing their annual fall schedules,do the big broadcast networks really need to continue producing massive presentations and throwing gigantic parties during what has long been known as upfront week? Or have digital media and social networking eliminated the need for such old-school largesse?

On the one hand, if the primary purpose of an upfront week presentation is to inform advertisers and the press of a network’s plans for the upcoming television season, it would seem that such events have in recent years become largely unnecessary. Interested parties now have all of that information at hand at least a day before the events, and sometimes earlier. Those individuals include television viewers and fans that used to be the last to know about the networks’ fall offerings but are now as well informed as anyone working in or around television, especially when it comes to announcements about forthcoming programs and schedules. That’s because the networks release that information to the press before the events, and it is instantly transmitted to the public at large. Additionally, reporters at certain media and entertainment Web sites begin posting this information days or weeks in advance, as deals for new and returning shows are closed on the studio level and arrangements are made for talent from those projects to travel to New York for upfront week.

Some networks augment this early information discharge by posting clips from new shows on their Web sites in advance of their presentations. These are often the very same clips that are shown to advertisers on giant high-definition screens at Radio City Music Hall, Carnegie Hall or another outsize New York City venue. As a result, many of the attendees at these events already know most of what they are about to hear and have already seen much of what they are going to be shown.

This is a dramatic shift from the upfront week experience of old —old being defined as pre-digital. As recently as the ’90s, most people walked into upfront events with only a general idea of what would be announced. Newspapers and daily trade publications would publish best-guess schedules based on information from the previous day, but they were rarely accurate. The atmosphere inside those venues was electric, especially if the presentation was well-produced and the clips from new shows caught on with the audience. In fact, the only way a presentation could truly fail was if it ran too long.

Today, the networks make a concerted effort to keep their presentations fast-moving, and most of them run between one and two hours in length. But in the old days, before the audience was digitally empowered and ready to tweet snarky comments about an overly long production, these events could drag on for hours. Occasionally, a network would make the mistake of including an entire pilot of what it considered to be its most promising new comedy or drama, extending its presentation by up to 45 minutes and rarely generating good will in the process. Just ask anyone who was forced to sit through the pilot for the long-forgotten newsroom drama WIOU at CBS’ presentation back in 1990.

Of course, even the longest broadcast upfront presentations were somewhat easier to take than they are today, because they weren’t crushed together in the space of four days along with those of so many cable and Spanish-language networks, and they didn’t come at the end of three months of cable upfront presentations and parties. Indeed, back when there were only three upfront presentations, for CBS, NBC and ABC, and even when Fox was added to the mix, they weren’t necessarily even scheduled in the same week. There was plenty of breathing room between them. Today, those four overloaded days have for many become a punishing marathon, more an endurance test than an informational and educational opportunity.

An informed audience is not necessarily an enthusiastic one, and that’s where the value of a strong upfront presentation still comes into play. Given the competition for advertising dollars and press attention, not to mention viewers, it still makes sense for networks to do everything they can to propel their properties to the forefront and leave advertisers and journalists wanting more. It’s one thing to read about CBS’ new schedule on your smartphone and watch a few clips on your tablet. It’s quite another to be seated in Carnegie Hall, long the home of CBS’ annual presentation, surrounded by advertising, network and studio executives and the talent from the network’s current and future shows, watching those clips on a breathtaking high-definition screen and taking in what is always an extraordinary showing by the network.

All of this celebration and exposure can work against a new show if its clips indicate that it isn’t one of the network’s best. Sometimes that is immediately clear to everyone but the network’s own executives. (To cite just one of countless examples, how did NBC not see the looming disaster that was Animal Practice, the freshman comedy last fall that starred a monkey, when everyone at its upfront presentation couldn’t help but see how utterly inane it appeared to be?) But risk has always been a big part of the network game, at least where program development is concerned. Better to look at the positive aspects of the traditional upfront experience, especially as they are typified by some of the more successful presentations.

Looking back over almost a quarter century of upfront week events, which has included large-scale successes and unforgettable failures by each network along the way, two memories stand out: The presentations by The WB at the Sheraton Hotel in midtown Manhattan, and NBC’s decision a few years back to forego a formal upfront presentation of any kind in favor of intimate agency meetings. The WB is long gone, having merged with UPN in 2006 to form The CW, but happy memories of its upfront presentations remain. The WB didn’t so much present its programming as immerse its audience in an environment in which everything that the network had done and had planned to do was made to seem even more stimulating than it actually may have been. The WB had its problems along the way, but it was second to none at generating interest in its shows and stars among advertisers and members of the press.

As for NBC, its attempt in 2008 at removing itself completely from the traditional upfront week structure, choosing instead to have small meetings with advertisers and the press beginning in early April of that year, was widely panned. It was simply too dramatic a change for the industry to get behind.

And so it is that the networks now find themselves caught between the expectations of the old and the realities of the new. It’s no longer enough for a presentation to serve as a glorified announcement. Instead, the presentation —and, arguably, the party that follows —must serve to generate interest within the business and provide insight and context into brand, strategy and programming alike. That’s the only way to separate the upfront experience for advertisers and the press from what is now an outpouring of new, context-free information directly to the viewing public.

Bande A Part

Tue, 16 Apr 2013 15:54:28 -0400

The last upfront presentation I attended was a Nickelodeon breakfast-palooza three or four years ago. I went with my wife, who had a valid professional reason to be there. Mine was of a more earthly nature: I was in the neighborhood and had a hard-core hankerin’ for hotel-buffet-caliber eggs. Also, the featured entertainer was one of the network’s litany of triple-threat starlets (acting/singing/reputation management). When iCarly — or Zoey 101 or True Jackson, VP, or whoever it was — comes a-knocking, you answer that door, friend. You answer that door.

So you can imagine my excitement as I backed the football-girthed omelet onto my plate. Media! Food! Song! It was like a Renaissance Fair, but with fewer Drench-a-Wench booths and more impenetrable market research. Surely I would be delighted into allotting the totality of my nonexistent ad budget towards a brand-redefining presence during the breaks of The Naked Brothers Band.

And then cataclysmically disastrous tragedy struck: an exec approached the mic, cleared his throat substitute-teacher-style and announced that the featured entertainer had called in sick, or at least slightly hoarse. You could almost hear all the media buyers in attendance start yanking their ads from Team Umizoomi. It seemed possible — nay, probable — that Nickelodeon would lose its low-digit slot on every major cable provider’s basic tier before brunchtime rolled around. Natasha Bedingfield gamely filled in as entertainment, singing her “Pocketful of Sunshine” as if the room hadn’t just been smacked by a comparable weather-event metaphor, but the damage was done.

Or not. Mostly the upfront-saturated media drones shrugged and bantered pleasantly with one another. Some checked their BlackBerrys. The second the Nick presentation ended, they rose from their seats absently and plodded en masse to the next network confab, one of three can’t-miss klatches scheduled for that very day. They didn’t seem bored or disgusted or sad. They were just going through the motions, not unlike the average factory grunt.

Unsurprisingly, then, my lasting takeaway from the morning was this: There is precisely no reason for upfront events of this sort to exist.

Maybe there was 15 years ago, when there were only a handful of the darn things and media buyers had to joust for coveted Nash Bridges ad inventory. But today, when every broadcast or cable network move that matters is leaked and/or telegraphed weeks in advance of the upfronts? When there are close to 100 such shindigs on the slate, once you factor out-of-home, radio and other entities into the mix? And when there are about as many cable networks as there are days of the year?

Who has the time? Who has the will? The average buyer’s resources would be better spent reading the online TV trades, making a few extra one-on-one visits and flipping a coin (“heads, I advertise on Utilisima. Tails, it’s Chiller”).

None of this is to pick on Nickelodeon, which was far more of a gracious host than the occasion demanded, nor to dump on the attendees, who were largely there because their job description said they had to be. No, it’s to call for a major-league reassessment of the upfronts. To that end, here are a few suggestions, proffered by some of the industry’s most-bored veteran upfront attendees, to remake upfront season into something remotely useful for media folk, not to mention interloping idiots (raising hand).

Start with the question, “Why bother?”: Unless you’ve got an answer other than, “Because we always have” or “Because if we don’t, someone else will and then I might have to explain it to my boss and I think she’s got a nephew who is eyeing my job,” it’s time to cut the cord. If you can answer that question in another way — say, with “We’ve got a metric ton of branding initiatives, new programming relationships and a possible breakthrough on a cure for baldness to announce, and we’d try everyone’s patience if we reveal it piecemeal” — bully for you. Then…

Make sure that you’ve got real news: The whole “yoo hoo! over here!” act gets grating when 65 other media entities are echoing it. Yes, it’s never unwise to let your core clients know you still exist, and yes, it’s probably not the worst idea to alert both buyers and sellers that bartering season has arrived. But if you’re not sure whether a certain set of announcements can sustain attendees’ interest through an upfront gala scheduled to occupy an afternoon-long chunk of temporal real estate, run it by your critical-minded journalist pals. Not me, though — I call for 32-point front-page headlines every time VH-1 comes to terms with another saucy Basketball Wife. They’re so saucy! Still with me? Terrific! Next, you should…

Take whatever packet of research you’ve prepared for the occasion and trim it down by 85 percent: In context, numbers are fun. Educational, even. But when you throw 300 different statistimical nuggetrons at an audience during a three-minute PowerPoint blitzkrieg, those numbers will cease to have any meaning. It’s better to tease the audience with two or three surprising findings (“we own Aleutian males 18-34”) and suggest that there’s more where that came from. I believe this is known as either foreshadowing or bluffing. Same difference. Anyway, once you and your industrial-grade paper shredders clear that hurdle…

Find an event planner that’s either on the cutting edge of whatever event planners are event-planning nowadays — or a complete mental patient: Would-be sippers at the advertising trough have attempted to charm buyers with better food. They’ve tried hipper venues. They’ve tried Aerosmith, probably. None of it has worked; the events mostly remain indistinguishable from one another. And while recasting upfront events as strictly social gatherings makes some sense — everybody enjoys seeing their professional peers from time to time — the notion would lose luster if 80 such events are similarly reformatted. I don’t have the slightest inkling of a clue of an idea how to solve this problem. But as a one-time upfront regular and lapsed chicken finger aficionado, I can say this: Be different, or be gone.

The Turnaround

Tue, 16 Apr 2013 15:53:00 -0400

In the spring of 1984, Edsel Ford II, the Ford Motor Co. scion who was then head of marketing for the Detroit auto giant, assembled the top media buyers of his major ad agencies - Y&R, JWT and Wells Rich Greene - to come up with a strategy to help turn around one of the worst sales periods ever in its history.

Confessions of an Upfront Reporter

Tue, 16 Apr 2013 15:44:00 -0400

The first time I realized something was wrong with the upfront was as a rookie reporter covering the 1983-84 marketplace. Only a few weeks into the job, I started getting calls from Wall Street analysts asking me how the market was going. I remember thinking, "Aren't I supposed to be asking you?" A few years later, the pattern started to make sense.

OMD's Spotify Hackathon

Fri, 28 Dec 2012 18:33:00 -0500

Every digital media platform worthy of the name unleashes the creativity of its audience by opening up the platform to app developers, encouraging them to come up with new apps that make the platform more accessible, more convenient, or simply more fun. It's a win-win for both sides, as the platform taps the insight and enthusiasm of users to improve its service, and the users get to customize their favorite media.

All Together Now

Fri, 28 Dec 2012 18:30:00 -0500

A sandwich can be a powerful lure to those in the ad business. When the sandwich comes with fresh research and new insight - even better. That's what more than 300 executives in the agency, marketing, TV, research and technology business get four times a year from the Collaborative Alliance, a think tank founded by MPG executive Mitch Oscar. The Collaborative Alliance lives under the auspices of MPG's innovation umbrella and has had one of its most productive years.

Stirring It Up

Fri, 28 Dec 2012 18:27:00 -0500

If a good friend or respected colleague were to ask me to recommend a good place for their son or daughter to start a career in the advertising business, I would probably recommend any of the organizations being recognized in this issue. But if one of my own children were to ask me, I would tell them to try and get a job at The Media Kitchen. The reason is that it has one of the best cultures for understanding the future of advertising and media, and is organized in as likely a way as I can imagine to achieve it, or at the very least, in a way that will enable the people who work there to participate in it.

MediaOcean Makes a Splash

Fri, 28 Dec 2012 18:26:34 -0500

Billing, trafficking and processing ad orders are the plumbing of the ad business.They rarely get anyone excited and you assume they will work fine, but, boy, if they don't flow properly, life isn't good. That's why the deal that formed MediaOcean in 2012 - when Donovan Data Systems and MediaBank merged - is one of the most significant landmarks in the ad business in 2012. The two competitive suppliers of media-buying processing systems became one in March 2012, and in the months that followed, the new company started rolling out its integrated platform to marketers. MediaOcean is nearly ubiquitous at U.S. agencies and processes more than $130 billion in media billing.

Ford Goes Further: Client of the Year - Ford

Fri, 28 Dec 2012 18:16:00 -0500

How reengineered marketing — including location-based ads, mobile and smarter social — are bringing this battered brand back from the brink.

If Americans have always loved an underdog, then Ford has been on top for decades.Even before its current renaissance, or the automotive near-apocalypse that sparked it back in 2008, the brand was an epic loser, often referred to as Fix Or Repair Daily.

“We’d been going out of business for 10 years before I got here in 2007,” Jim Farley, Ford’s group vice president of global marketing, quipped while addressing an American National Advertisers meeting last fall. However, the company’s 2008 decision not to accept government bailout funds shifted consumer perception of Ford from crappy to scrappy. “When we told people we didn’t need help, we became even more of an underdog, and people started rooting for us.”

What’s won consumers over, though — and the reason MEDIA has selected Ford as Client of the Year — is that in 2012, many of the change-or-die initiatives set into place in the grim post-2008 era are paying off, showing just how committed Ford is to a bumper-to-bumper reinvention.

Consumers see it, too. Ford shot up to 39th place in the Brand Keys Loyalty Ranking this year, up from 86th last year, says Robert Passikoff, founder and CEO of Brand Keys. The rapid rise is because “Ford has the ability to meet the ever-increasing level of expectations that consumers have for brands. With so many comparable cars, consumers are now making decisions based on emotions and what they see as innovations, and Ford has done very well in communicating those.”

Rebuilding the Marketing Engine

The critical change, Farley told the group, was a willingness to rethink just about every aspect of marketing. “We were spending 10 percent of our entire budget just to produce spots. So we made a commitment to eliminate waste, and cut our production budget in half. Whatever we saved, we put into consumer-facing media,” he says. “And we got input from all around the globe. Maybe mobile best practices come from India, or social from China. Everyone listens to each other, and it’s been so rewarding.”

A closer look at how consumers buy cars led to a closer look at launches, normally a secretive affair, and turning it into its own version of crowdsourcing. Inspired by the way videogame and movie marketers would prelaunch products with journalists and bloggers, it did the same. “We used social so people could opt in, and we can show the product a year ahead of time. Now we have time to react. We know what colors they like. And this slow burn lets you build momentum.”

Using that approach for the Fiesta, “we had 60 percent nameplate awareness before we ran one traditional ad, and we had spent nothing — that showed me the power of social media. We now have scaled that for all our launches, spending 20 percent of the budget on the prelaunch phase.”

Another incredible act of rule-breaking, of course, was its controversial “Go Further” spot this year — 60 seconds of advertising that never once revealed Ford’s name, or even its logo. Instead, it asked viewers to check out GoFurther.com, all part of the effort to prove to consumers the brand is willing to take that spirit of reinvention to just about any level.

The Sedan Strikes Back

But perhaps its biggest play is the Fusion, an attempt to “take the American garage back from Camry.” Midsize sedans, which account for roughly a quarter of auto sales, have typically been kind of a snooze for car lovers. So Ford created fun campaigns, including its Random Acts of Fusion, giving one person 100 Fusions, which then needed to be given away. The story unfolded online, with Ryan Seacrest, as well as Joel McHale and Kate Micucci in documentary-style videos.

And it has found smarter approaches to consumer segments, like lasering a Fusion out of a block of concrete during the recitation of the late Tupac Shakur’s “The Rose that Grew from Concrete,” aimed at African-Americans. Or Red Bull-sized cup holders in Ford Fiestas. Or the Mustang Customizer on Xbox.

And, of course, there’s the much-buzzed about retooling of the Lincoln brand, starting with its new MKZ.

Each initiative, though, addresses the issue of shopping for cars, including talking about cars with others. “The key thing for us is location-based advertising. So, for us, mobile is going to be very transactional, and we have to have a creative design that works on all devices.”

Social media is a component of each effort, “which means you’ve got to listen. And listening is the one thing that has allowed us to transform our brand.”

And beyond its marketing achievements, Ford is also making news by making money, something that’s been scarce in Detroit: In its most recent quarterly results, Ford’s operating margin in North America was 12 percent, the highest since the company began breaking out regional margins in 2000, reports the Detroit News. GM’s was 7.8 percent, down 2.2 percentage points from the same period a year before. And Chrysler, which does not break out margins by region, reports an overall 4.6 percent operating margin.

Full Service, Full Throttle: Full Service Agency of the Year - Hill Holliday

Fri, 28 Dec 2012 18:11:00 -0500

Some 200 miles north of Madison Avenue, full-service agency Hill Holliday sticks out as a Brahmin among other prominent agencies in the land of bean and cod. Founded in Boston in 1968, the Interpublic Group company now has offices in all the major U.S. advertising hubs - New York, Miami, San Francisco - and even one in Greenville, S.C.

A Big Gun for Smaller Brands: Independent Media Services of the Year - TargetCast

Fri, 28 Dec 2012 18:07:00 -0500

New York-based TargetCast is MEDIA Magazine's somewhat ironic selection for 2012 Independent Media Agency of the Year. While no longer technically independent, the agency has remained so in spirit and direction. Over the past year it continued to foster industry influencing innovations including building new go-to-market tools and platforms and creating a brand-extending subsidiary that broadened the shop's reach.

The Ultimate Ad Organizer: Media Supplier of the Year - Ad-ID

Fri, 28 Dec 2012 18:02:00 -0500

To understand why the world needs Ad-ID, consider the legend of Donut_15. (All names are withheld to protect the embarrassed.) In 2010, a major broadcast network received an e-mail from a media agency containing a commercial labeled Donut_15 that was supposed to run on the network's digital platforms. It was a new version of an ad that had already run on the TV network itself. Unfortunately, the digital version was no good, so the network went in search of a better copy. But they couldn't find any Donut_15 in their library, and the digital agency connected to the account had never heard of it, either. Going by the name, the network started searching and asking for any 15-second spots about donuts (Dunkin Donuts? Entenmanns?), but to no avail.

Change Agent: Media Agency Holding Company of the Year - WPP

Fri, 28 Dec 2012 17:59:00 -0500

In recent years, these awards have recognized a shift that has been taking place in the way innovation occurs inside Madison Avenue's major media organizations, moving from decentralized media services operating units, to their bigger, more centralized and better resourced holding companies. The logic seems to be that holding companies are in a better position to leverage both internal budgets, and the relationships with outside suppliers and other industry stakeholders to develop tools, resources, business models and practices that would benefit their operating units and the clients they service.

The Power of Partnerships: Executive of the Year - Miles Nadal

Fri, 28 Dec 2012 17:51:00 -0500

Miles Nadal built MDC into $3 billion holding company by acquiring one partnership after another. In 2012, he tipped the scale, making him MEDIA’s 2012 executive of the year.

Miles Nadal isn’t exactly Madison Avenue’s ultimate outsider, but he’s close. The Toronto-born financier grew up in a two-bedroom apartment, didn’t finish college, and financed his first business with a $500 advance on a Visa card. That was 1980. Today, MDC Partners is the eighth largest agency holding company in the world, with $3 billion in billings.

Always controversial, the 54-year-old Nadal’s entrepreurial strategy has been to use debt to finance partnerships, or partial acquisitions, rather than the conventional approach of purchasing them outright. MEDIA named him Executive of the Year because that strategy has drawn so much attention, following a buying spree that included TargetCast (MEDIA’s Independent Agency of the Year, see p. 26) and RJ Palmer. As the company moves into its digest-and-reduce-debt mode, MEDIA’s Steve McClellan and Joe Mandese met with Nadal in his New York office, taking in his sweeping views of both Central Park and the media landscape.

This was a year of big acquisitions—TargetCast and RJ Palmer. What makes you want to buy a company?

We have always prided ourselves on our ability to identify opportunity. About three years ago, when Horizon Media started to really grow, as was our business, The Media Kitchen, I thought, good, there’s obviously some niche not being serviced by big multinationals. So, we started talking to TargetCast. We were talking to Bill Koenigsberg at Horizon. Some things started to come together.

All of a sudden, there was an opportunity to shape this. So, between TargetCast and RJ Palmer, and then Doner, we had the real makings of a media business. We saw we could build a partnership-like culture, and make Maxxcom an entrepreneurial firm that looked at all aspects of media. It was the same way we did it with advertising, with public relations, and with direct response. Media was a great opportunity.

We’ve always been contrarians. And it helps that we don’t have any legacy issues. It’s given us an advantage to be able to build something in the media business differently today than you would have 10 years ago. There are a lot of interesting firms that are terrific and are growing very rapidly. They’re not the biggest firms, but if they can help us differentiate our offerings, broaden our capability and expertise in industry or geography, or technologically, we’re very receptive.

Other holding companies are investing a ton of money into new technology, to maximize clients’ sales. What makes you special?

Everybody says, “I’m investing in technology, I’m investing in technology, I’m investing in technology.” So, I ask a very simple question, “What tangible results do your clients have to show for all the investments you’ve made?” You should have greater return on market investment. You should have better solutions that are more targeted. There should be less waste. I don’t see it yet.

I think, by the way, partnering in new technology is, most of the time, more cost-effective, and has better results than trying to create it yourself. The most critical thing for us to get right is the people who know how to identify the trends, where the world is going. There’s a famous expression about — there’s this guy named Wayne Gretsky, he used to play hockey. I don’t know if you know about this…

We know about him.

Gretsky always knew where the puck was going. And I don’t think there’s a lot of that at this point in time. If you’re investing in all this technology, then you should be able to deliver better performance, better results, a higher return on marketing investment, or less money. There’s got to be some combination of those things.

So, do I need to have $50 billion worth of billings to compete in the spaces we’re in? No, not at all. I’m not trying to get the global Chrysler media business. There are four or five firms I know that beat themselves into the ground to try and get that business. We’re going after areas that we think are not well served. That business will grow. And, over time, we’ll get more and more share of market, which has really been our philosophy. Our organic growth is double or triple the rest of the industry. Our media business is growing faster than the rest of our business, and it’s more profitable.

Does this model really hold up in terms of scale?

My fundamental belief is that we have sufficient scale to compete on any piece of business in our size, and to be able to deliver at least as cost-effective results in buying as anybody else. In the digital space or in the online auction space, we are as good, if not better, than they are, because it is run by entrepreneurial people who are always looking for that edge, who are trying to find that niche.

Service has become a big thing, as well. Clients want to be educated more. Clients, more and more, want more high touch, more involvement, to understand the changes that are happening.

Let’s go back to this three-year-ago epiphany. Why did you think the time was right to move into media?

MDC needed to be mature and to get to a scale where we had a credible offering that people would believe in. We then needed to have enough scale that we could afford to invest and acquire and build on a platform. And you need the world to say, “As long as you’re big enough that you can help us, we’re receptive to doing more business with you. And, like I said, I just looked. I mean we’ve watched Steve Farella at TargetCast for a long time, and we’ve always looked with great admiration and regard for him. We’ve always been very close to Bill Koenigsberg at Horizon. And there are others. You know, there’s room for everybody.

All we’re trying to do is just get an incrementally larger share of the market. But it’s a little deceiving. The market is a $200 to $250 billion dollar market in America, and we have 2 percent of that. So, if we could get two and a quarter percent, that’s a lot of money.

So media levels the playing field for you?

Yes, we were at a competitive disadvantage. I think that’s a very good point. We would not pitch an integrated offering, and that put us at a disadvantage.

How would that work now? Martin Sorrell put together a team to do an integrated offering across wire and plastic products. Is that what you’re going to get to?

We do it now. We target. Our cross selling (I hate that word), or our integrated partnership model is the most effective in the industry. Because people actually want to work together. They don’t work for us, MDC. Even if it’s an MDC pitch, it’s really a collaboration, a partnership.

So will you be more like a VivaKi in that sense, where you bill the best-in-class resources that everybody could share?

I don’t know what other people are doing. We’re trying to find areas where our investment is in differentiating our overall offering, but we have duplication. We should put the resource together so that we are best in class, instead of having four fragmented pieces that are each doing the same thing. We’re identifying those as we speak.

We can afford to be patient, because the firms individually are very successful, so every one of these modifications are going to make them more efficient. More importantly, I think it will enhance the durable competitive edge we have by having the best in class in an area, and probably higher in recruiting even better talent.

What about friction in the business, when taking business from one partner and moving it to another creates tension?

We make good on the differential. If you say to people, “You need a chief growth officer,” and they say, “I can’t afford it,” I say “I’ll hire the person for you. I’ll subsidize that.” It’s the right thing to do. We’re always making decisions, because we look at the long-term, and they manage to the short-term. All the time we say, “This is the right thing for the company and for your business.” But, you know, people say, “Look, I gotta make my numbers. I can’t just do that.” I say, “Fine. You go ahead and do that. I’ll pay for the first year.” And we do that all over the place. That’s a very different model than anybody else in the other organizations, because they say, “Well, you’ve got to find the money.”

The reality is that you want people to look long-term.

We’re trying to do what would be in the collective best interest of the organization.

In our organization, people work collaboratively. Target Cast and RJ Palmer? They are happy. The economics are beneficial for everyone because you don’t want to have winners and losers. That’s not a good culture. If there’s a conflict, one refers to the other. Our partners want to see the overall partnership win, but they also want to see the individual partners win.

You’ve always been in the media services business through your agencies.

Yes.

How much of your portfolio is in media? And how much do you think it will be, going forward? Will you be spending more of your investment capital in media?

Absolutely, more. Let me think about this for a second. It’s probably between 12 and 15 percent of our revenue. It’s probably $150 to $200 million dollars in overall media. It will be 25 percent.

So, how big do you want to get in three years? Or is that the wrong question?

Financial results are a byproduct of excellence. So, if the industry grows 5 percent, we’ll grow 10 percent or 15 percent. We’ll always grow double or triple the industry, if we can keep finding great people and great companies, and help our clients grow. It’s not scientific.

When people set arbitrary financial targets, they inevitably do something big and dumb. Always. That’s how Time-Warner and AOL got together. “Oh, we want to be big!” That wasn’t good value creation. You’ve got to think of how we can continue to differentiate ourselves.

We’re never going to be the biggest firm in the world. We don’t want to be. We want to be known as a firm that does great work as a culture, where the most successful entrepreneurial people work and they love what they do. And these people, we really care about our businesses. They really are our partners. They really are focused on driving results for us.

Horizon Media would make a great combination with you guys.

I’ve been talking with Bill for the longest period of time. I think he’s a spectacular entrepreneur. He’s an extraordinary businessman. And he’s one of the most likeable guys in the world. But who knows? Bill is a very successful and independent-minded media executive.

There will be competition, if he decides to sell.

Yes. And I don’t know what other holding companies will do. I don’t know what works at WPP, because I don’t know what their strategy is. I don’t know what works for Maurice [Levy, CEO. Publicis Groupe], or for IPG. I know what works for us. You’ve got to be true to what works for you. I think where companies run into difficulty is if they amend their strategy because they say, well, that guy is going to get it, or this one is going to get it. I’d sooner do nothing than do something outside the boundaries.

The one good thing about doing this for 32 or 33 years, we’re pretty firm about what we do, and why we’re going to do it, and why we won’t. Now, we’re acquiring people and we’re growing our business organically. We are aggressively winning new business all over the place. We’re having the best year in the company’s history of new business wins. What you realize is that it’s a long game.

The New Negotiator: Agency of the Year - Carat

Fri, 28 Dec 2012 17:42:00 -0500

For years, advertisers and agencies have complained that TV networks have been delivering fewer eyeballs and charging more for the privilege of placing ads in their programs. They have also complained that networks have forced them to buy unwanted and lower rated shows along with the programs they have actually wanted to place ads in.

Fast Forward: Choosing Our Winners

Fri, 28 Dec 2012 17:39:00 -0500

The good news is that my strategy for getting the best media services organizations to be more open about what sets them apart is working. The bad news is that it's working. That may not necessarily be bad news for the readers of MEDIA magazine, but it is for its editors, because it's making selecting agencies of the year harder. I don't have any hard metrics to back that up, but I can tell, that after more than 30 years of covering this business, I have never seen more innovation - and perhaps equally importantly, more innovative ways of talking about it - than I've seen coming from media services organizations these past 12 months.

Redefining Drive Time

Fri, 28 Sep 2012 18:03:00 -0400

Cars have long been an important locus of media consumption in the U.S. In fact, automobile transportation and mass media developed in tandem — commuting behavior birthed drive-time radio, and interstate highways fueled the growth of the billboard industry. The ways in which mass media
reach people while in cars is iconographic and integral to the automotive experience.

After Chevrolet installed the first car radio in the early 1920s, it took over a decade for the device to become standard in new vehicles. Similarly, today’s in-car environment has remained relatively insulated from the recent disruptions of digital media.

But with mobile devices now fixtures of daily life, people have new expectations of how to consume media while on the move. In response, automakers have developed media platforms that turn cars into connected devices, running applications and communicating with the cloud under the control of vocal and tactile interfaces that minimize driver distraction. Many such platforms — like Toyota’s Entune and Ford’s SYNC — rely upon the smartphone to connect to wireless networks.

The advent of these platforms constitutes a broadening of personal media: interactive channels connecting people to content they choose, their experience participatory and differentiated, defined by specific interests and context. What excites automakers, software developers, and navigation services alike is the value that can be created by transforming how people consume content and make decisions while on the road. This particular brand of “digital disruption” will leave people more empowered as travelers and content consumers, but will also make it more complex for marketers to communicate with them and will impact both content and advertising businesses.

Streaming audio services already offer listeners a far more differentiated experience than traditional radio. Broadcast audio won’t disappear from the car of tomorrow, but it will compete for audience share. Pluralism will be the order of the day: from conventional programming to a host of curated
approaches; and from advertising- and sponsor-supported models to different types of direct and indirect funding by users. Digital audio will allow marketers to assemble audiences based upon personal attributes or other information people have volunteered rather than proxies like listening preferences.

Passengers, less constrained than drivers in their ability to consume media, will continue to use their own devices to read, watch video, browse the Web and communicate with others – just as in non-car environments. More intriguing is the possibility that cars might someday mediate their perception of the outside world. Design studies from Toyota and GM, for instance, have proposed transforming rear-seat windows into interactive displays that layer games and other content over the passing landscape in the same way that navigational prompts are sometimes displayed on car windshields – ideas which resonate with others that aim to augment reality.

A leitmotif found in the convergence of social, local, and mobile is that personal media changes the way people learn about the world around them, allowing them to retrieve and interact with information pertinent to their present interests, needs and context. As media platforms in cars evolve to better serve this purpose, people will be further empowered to make decisions based upon information they seek out, making the car an even more potent tool of personal agency.

Audio and sign-based broadcast advertising is certain to remain an important means of reaching people on the road, but such messages will both compete with and complement new channels. Savvy marketers will need to align their use of broadcast and personal media to exploit not only the strengths of each,
but their interaction. Employing broadcast media to facilitate access to appropriate content through digital platforms will become an important dimension of marketing to people on the road.

The future will not see the automobile’s longstanding importance to media consumption wane, but this importance will hinge on personal media that empower people to seek information and that challenge marketers to adapt accordingly. Should automation of personal vehicles render drivers into passengers, or should ideas like car-sharing alter precepts of vehicle ownership and behavior, we might anticipate even more radical changes to how people consume media while on the road.

Jeremy O’Brien is the managing director of Kinetic Futures, a global communications think tank.

Embracing Infinite Media

Fri, 28 Sep 2012 18:01:00 -0400

My contention is that brands have a major opportunity to become the driving force of positive change in the world, and to add value and purpose to people's lives. The opportunity is most profound for the brands and organizations with truly global influence. For those companies that get it right, the mistrust of the "No Logo" generation will be replaced by a genuine embrace from a population seeking a different relationship with brands -- one based on trust and mutual benefit.

Can One TV Brand Reach 10 Billion Devices?

Fri, 28 Sep 2012 18:00:00 -0400

Roughly a year after joining Discovery Communications, JB Perrette wants to talk about the future -- - not just next season, or even five years from now. He's ready to dish about how this company is growing beyond its cable-programming roots to become a "next-generation knowledge company."

Romancing the Second Screen

Fri, 28 Sep 2012 17:59:00 -0400

Programmers race to add content and promote sharing across multiple smart devices

Earlier this year, TBS took a big jump into the next frontier with a tablet app for Conan O’Brien’s late-night show. It’s already received a pretty good landing in the form of an Emmy nomination.

Conan’s initiative, and similar ones by other networks, are a harbinger of where much of TV viewing is headed among the younger set. “Second-screen experiences” are starting to boom as the reach of iPads and other tablets widens.

The Team Coco app syncs “live” with the broadcast show, but also has a content recognition function allowing a tablet to recognize what’s on TV and then turning on simultaneous viewing opportunities.

Those fall into two categories — extra content iterations and opportunities for social media connections. Maybe most important, the two can be linked to capitalize on the social TV movement. For example, when a funny sketch or monologue ends on-air, a viewer can post it on a Facebook page or tweet it.
From a tbs perspective, that’s valuable consumer-driven marketing. The dual-screen apps also offer revenue potential via advertising. AT&T was the launch sponsor for the Team Coco app.

TV viewing has long been considered a chance to relax on the couch, but with so many people now unable to watch without a device in hand, a tablet app dovetails with consumer behavior.

“The tablet has made it incredibly easy for people to have a lean-back experience with their hands leaning forward,” a says Chet Fenster, managing partner and director of content creation at MEC Entertainment, who helped craft the Conan app with Turner.

Networks are racing to connect with viewers during the second-screen movement. During the recent London Olympics, NBC had a “Primetime Companion” opportunity with trivia, polls and athlete bios and social TV venues.

Technology providers are also racing to provide the backbone for the initiatives. Shazam, which allows the tagging of content and commercials, worked with NBC during the Games. Yahoo’s IntoNow app launched a 3.0 version. And Nielsen has worked with ABC on synchronized opportunities. “We haven’t even scratched the surface of what two-screen viewing can offer,” says Fenster.

If tablets are set to provide one part of that syncing, what about the other part? The large, living-room screen that hardly anyone thinks will lose primacy in the home (even as apps from the likes of Cablevision and Time Warner Cable allow live-viewing of all channels on iPads in the home, which means in the hot tub if a viewer can keep the devices dry).

The long-distance run might lead to Super Hi-Vision, a technology being developed by Japan’s NHK. A picture 16 times crisper than HDTV and a pristine sound system together can provide a transcendent experience. It will be years before the “ultra high definition” is available in living rooms, but viewers were given a taste of it during the Olympics in the U.K. through BBC-held screenings in theaters.

“The way I describe it to people — it’s exactly like looking through a glass window at reality … It’s really in some ways the end of what the human eye can understand, so it’s the end of the resolution story,” stated Tim Plyming, who is leading the BBC efforts, on one of the broadcaster’s radio shows.

He added that its 22.2 surround sound gives “the audience the experience of really being at a venue and what that means for sport and cultural events in the years to come is amazing really.” Before Super Hi-Vision, manufacturers are set to release what they call 4K sets, which offer UHD (Ultra High Definition) — four times the picture quality of HD. It will be a while, however, before Super Bowl parties are dominated by these screens. An 84-inch flat screen from LG will cost about $22,000.

In the meantime, questions persist about the fate of 3-D TV, which seemed so primed for widespread adoption. But uptake has not been as robust as many predicted. Perhaps the future came too early, though manufacturers are pushing ahead. “It didn’t immediately take off the way that anybody would have thought,” says Brian Siegel, Sony Electronics’ vice president of television.

Nevertheless, Sony and other manufacturers remain committed and could gain more support with the rollout of 3-D sets that don’t require glasses. Bulky glasses may have deterred some viewers during the first generation. For now, manufacturers appear to have retrenched and begun considering how to make a major 3-D splash with more consumer-friendly options.

“I am not willing to say that they can’t find a way that’s not convenient and useful,” says Pat McDonough, a Nielsen senior vice president.

Some have suggested a lack of content could have been a hindrance. ESPN, however, has a 24/7 3-D network with all kinds of big-time sports events, while Discovery also has one in partnership with IMAX and Sony. That venture just announced a slew of original programming, including a show about surfing in some of nature’s most challenging waves.

Directv, however, recently said it would no longer program a 3-D network 24/7. Still, NBC offered over 200 hours of the Olympics in 3-D, the first time the Games were offered in the format.

For now, TV manufacturers seem to be focusing on smart TVs, which allow for Internet connectivity and other opportunities, from viewing Netflix on a big screen to surfing the Web to using Skype.

TV-Internet convergence had been long-promised; the new breed of sets and consumer attachment to the Web seems to have fulfilled, at least in part, that promise. In April, the Leichtman Research Group found that nearly 40 percent of U.S. homes have at least one set connected to the Internet via a smart-TV-type functionality; a video game system; a Blu-ray player; an Apple TV or a Roku box. That was up from 30 percent last year and 24 percent the year before.

Still, video game systems such as an Xbox seem to be driving much of the Internet-TV connectivity. 28 percent of homes have at least one set connected via a gaming console.

Nonetheless, the potential of smart TVs would seem to be endless, with the opportunity to develop apps just as ios devices provided. “The era that we are in with smart TVs in 2012 is where the Internet was in 1996,” says Sony executive Siegel.

That generates food for thought about the transformative path that could be followed until about 2030. Netflix and YouTube have helped drive consumer use of smart-TV functionality.

A Harris Interactive poll found Netflix (which has shifted its focus to TV series) is the leading “must-have” app among smart-TV owners (47 percent say so). YouTube, which is moving toward longer-form content, came in second at 44 percent.

Showing how much a smart TV can become a social-media device, Facebook came in third at 35 percent. Still, there are doubts about how many people will actually want to post on Facebook pages and tweet while watching.

“[That] other behavior may follow,” says Nielsen’s McDonough. “But the compelling reason for the connected TV is the entertainment content.”
Related is the launch of Skype on XFINITY (for $10 a month) in Comcast homes in May, allowing people to engage in video chats or send instant messages on their screens. The connections can take place in a picture-in-picture box as a show continues.

Skype’s head of business development, Bob Rosin, wrote on a company blog that friends and family members can “watch the same game or reality show together and share your reactions to the same moments in real-time.”

All precincts of the TV hardware and software communities are working hard to improve search functionality to identify content. This identification will become increasingly important as options stretch from Netflix and YouTube’s new channels, to live TV, to video-on-demand.

That’s one aim of the Google TV platform, which is integrated into smart TVs sold in the U.S. now by LG, Vizio and Sony. The system scans the mass of viewing opportunities — in the hundreds of thousands with Internet video — and is able to provide consumer-facing actionable intelligence.

The efforts dovetail with Google’s cornerstone search business, but the company wants to offer an industry-leading, well-targeted recommendation engine that offers suggestions about potentially appealing content based on consumer behavior.

“Search and discovery are absolutely necessary for this new world we’re going into — it’s not just a luxury,” says Mario Queiroz, vice president of product management at Google TV.

Google TV also looks to simplify the process of bringing the Web to the TV. Its Chrome browser is available for simple traditional searching, but so is Google Play, other apps, and a YouTube experience optimized for TV.

There are multiple theories as to what the remote control will look like and how it will work. Vizio has an IR Blaster that works on a tablet and will serve as an all-encompassing remote. No matter the manufacturer, tablets and other second screens will be major players.

Sony’s Siegel says “with second, third and even fourth screens in the living room, it will become increasingly important to consumers to be able to control their TV — and other devices — from any device that is most convenient.

“Will there be a time when there is not the traditional remote as we think of it today? Probably. But, in the meantime, we’re going to need it for data input as the entertainment experience becomes even more interactive and social,” Siegel adds.

Navigation won’t necessarily include only buttons, but options with voice and gesture control.

Looking further, Google TV’s Queiroz suggests “shape recognition” could gain a toehold within a five-year period. The tv could have a camera and recognize who is in front of the screen, and make relevant viewing suggestions.

“The future of television is about recommendations being relevant for the person or the combination of people who are in the room at that point in time,” Queiroz says.

Nevertheless, it remains unclear how new Apple TV hardware, presumably coming out in 2013, could alter the landscape. Potential link-ups with other Apple devices, the use of the Siri voice control system and other permutations could usher in more innovation.

Siegel believes voice control can help realize the dream of the connected home, in which multiple devices are closely linked. He can envision saying “call Mom” and having the phone dial her on the TV screen.

At the same time, it may one day be possible to watch a sports event on an iPad in the kitchen, walk into the living room and see the same event continue on the big screen. “It becomes easier and more seamless,” he says. “It’s like a motion detector with your lights.”

DVRs continue to find their way into more TV homes, but there’s the potential that their usage levels could actually decline. With the TV-everywhere movement, more consumption is likely to take place anywhere and anytime via tablets and other mobile devices.

“I really think that the other digital technologies have leapfrogged the DVR,” says MEC’s Fenster.

Even at home, as most top shows become available via video-on-demand, people might abandon their DVRs.

All of this suggests that a boom in on-demand viewing could be a plus for advertisers. Ads viewed online can’t be skipped, while the fast-forward functionality can be disabled for VOD streams as networks have done.

Interactive ads, where viewers can opt to have a coupon or sample of an advertised product sent to their homes, have started to gain some traction. But they still require a few clicks of the remote control. Microsoft has come up with a way to use the type of voice and gesture control that would serve as a remote control in that arena.

All without pressing a button, so-called NUAds (Natural User Interface Ads) from Microsoft offer remarkable opportunities — from tweeting about an ad to having information about a product sent via email to the address of a relevant merchant popping up on screen. Toyota, Unilever and Samsung Mobile are early advertisers.

The groundbreaking technology is only available on Microsoft’s Xbox Live so far, as the company looks to turn it into a full-fledged entertainment device and move beyond the gaming routes. It will be interesting to see whether Microsoft licenses the technology to another entity in the TV ecosystem such as cable/satellite or telco TV providers.

For Tracey Scheppach, an executive vice president at VivaKi, the key to the advertising vault lies with addressable advertising. So voice- and gesture-controlled ads have potential, but that won’t fully be realized until an airline can deliver a spot about a loyalty bonus to a frequent flyer. “The most important thing for technology to be able to do right now is to send the right ad to the right home,” she says.

Household-level addressability is possible in about 15 million homes via satellite providers and there are some options in local markets, but Scheppach would argue loads of ads still have little impact because they reach the wrong targets.

On the measurement front, there are opportunities to operate in a similar more granular realm. For years, Nielsen and other viewership data was based on tracking the age and gender of viewers. Now, there’s increased interest in measuring how many ads reach potential auto buyers, or males who use certain grooming products.

Companies such as Rentrak and TRA are building businesses in this “single source” field, which will continue to evolve since targeting can always be improved. “It’s a sea change that has been coming over time,” says Bruce Goerlich, the chief research officer at Rentrak.

And measurement will need to be able to track consumption of particular content or advertising on TV and other platforms, including iPads. Nielsen and other companies are working assiduously on this.

“We’re migrating to a place where we’re focused on video no matter where it is and the device is,” says Nielsen senior vice president Brian Fuhrer. “Follow the video” could be the mantra of TV’s future. And nobody knows where the chase will lead.

Creating a Customer-Focused Culture

Fri, 28 Sep 2012 17:58:00 -0400

Two Forrester researchers explain the power of putting customers at the center of your world

Over our past 14 years of research on customer experience, we’ve asked hundreds of executives at some of the world’s top companies about their organizational barriers and how best to overcome them. They assert that culture has the single biggest potential to drive customer-experience transformations.

Companies need to socialize the importance of customer-centricity through storytelling, rituals, and training.

Some Best Buy stores give [job] applicants a New York Times crossword puzzle, an Internet connection, and an hour to see how far they can get. The goal is to test applicants’ curiosity and facility to learn, key traits in helping customers.

On a typical day, you might see 24-year-old Carlos Gonzalez sporting large white-rimmed sunglasses, a plaid scarf, a lip ring, and a Mohawk. His appearance is important to him, but it doesn’t matter to the U.S. Cellular customers who Carlos talks to every day on the phone. As a customer relations associate in the company’s retention department, it’s his job to retain customers who want to cancel their mobile service.

“It started out pretty normal,” says Carlos, referring to the day in October 2011 when he got a call from Florence, a woman in her forties. She had called to cancel her service, just as thousands of customers had over his past four years on the job. But this call was different. A few minutes into the conversation, Florence explained that she was undergoing chemotherapy treatments and that her medical bills were piling up. She just couldn’t afford her mobile phone anymore.

“She was crying, and she told me that she had never smoked a cigarette in her life and that this had come out of nowhere,” recalls Carlos. “She was brave enough to tell me that she was losing her hair.” Carlos, who lost his grandfather to cancer a few years earlier, could relate to her pain. “It bent my heart.”

Carlos told Florence that he could help her out with U.S. Cellular’s bill relief program, which gives customers in need a 30 percent bill reduction for six months. “She really did need the phone for calling her doctors and setting up appointments,” he says. Florence was incredibly thankful for the assistance. Upon learning that she could keep her mobile phone, the tears flowed faster. Carlos started tearing up, too.

Then he did something that we’re willing to bet no other customer service rep has ever done. Carlos offered to shave his head. “I didn’t want her to feel alone,” he explains. “I told her that I’d do it in her honor and send her before and after pictures. She said that she was grateful and that it would mean a lot.”

It would have been easy for Carlos to renege on his promise after he hung up the phone. After all, he’d spoken to Florence for 15 minutes, tops. But he shaved off his Mohawk the very next morning. “I took the photo and sent it to Florence. It felt so good. It felt like something I needed to do for her.”

Carlos’s story is almost unbelievable. How, in the span of 15 minutes, could he possibly have created a connection with a customer — a complete stranger — so powerful that he would shave off his impressive mane for her? Certainly, you can point to Carlos’s personal character and kindheartedness. But he’s quick to shift the focus to u.s. Cellular: “The culture here is very customer-focused. I’ve gotten a lot of encouragement over the years to do good for our customers.”

“U.S. Cellular is truly unlike any other client I’ve worked with,” says Jeff Lewandowski, a partner at Andrew Reise, a customer-experience transformation firm that’s been working with the mobile carrier since 2004. “I’ve been through a lot of places where people put up signs that talk about taking care of customers. But the signs are just words on plastic. They don’t really reflect how the companies operate. Carlos’s story is a demonstration that these guys live it and breathe it every single day.”

You Need to Build a Customer-Centric Corporate Culture

We’re not suggesting that head-shaving become the norm at your company. We’re talking culture here, not cult. And Carlos’s date with his razor is obviously an extreme example of customer empathy. But it’s indicative of a set of values that U.S. Cellular has tightly woven into its standard operating procedures. Because those values have been institutionalized and continually reinforced, Carlos’s supervisors trust that he’ll do the right thing for customers — and, clearly, he does. Not because he’s told to, but because he really wouldn’t consider doing anything else. You can’t clone Carlos. But you can help your own employees to think and act in customer-centric ways by actively working to shift your corporate culture.

How important is this? Over our past 14 years of research on customer experience, we’ve asked hundreds of executives at some of the world’s top companies about their organizational barriers and how to overcome them. Year after year, they’ve dismissed the idea that organizational structure and reporting relationships can solve customer-experience problems. Instead, they assert that culture has the single biggest potential to drive customer-experience transformations. “Culture is one of those squishy topics that people have a hard time getting their heads around in a business context,” says Paul Hagen, Forrester’s expert on customer-centric cultures. To make this discipline more concrete, think of creating a system of shared values and behaviors. Customer-centric values are the building blocks for reprogramming your corporate DNA. And behaviors are how you turn all of the practices from the other five disciplines — strategy, customer understanding, design, measurement, and governance — into habits that your company just can’t kick.

So how exactly do you instill new corporate values and change employee behavior? First you need to overhaul your hiring practices so that you get customer-obsessed people (like Carlos) in the door.

Second, you need to socialize the importance of customer-centricity through storytelling, rituals, and training. Third, you’ve got to reinforce new values and behaviors through informal and formal rewards. Tie it all together with a steady cadence of communication that never lets employees forget why they’re doing all of this in the first place.

Hire for Customer Passion and Cultural Fit

As companies get serious about customer experience, some have started by either redeploying frontline employees that aren’t committed to customers, or easing them out the door. But many firms still aren’t prepared to take that kind of action. No matter your approach, screening candidates for customer-centric values as part of the hiring and selection process is one of the most effective ways to shift the overall makeup of your workforce. Why? Because finding people whose values and personalities match your target culture is often easier than changing the underlying beliefs of current employees.

In addition to probing for customer-centricity, you also need to screen potential candidates for the specific skills they’ll need to deliver on the organization’s customer-experience strategy. For example, some Best Buy stores give applicants a New York Times crossword puzzle, an Internet connection, and an hour to see how far they can get. The goal is to test applicants’ curiosity and facility to learn, key traits in helping customers who have a broad range of ever-changing questions. And trendy W Hotels Worldwide encourages employees to recruit staff from hip local bars and restaurants and to look for people who naturally exhibit actions in line with the hotel’s Whatever/Whenever service obsession, which promises to provide guests with “whatever you want, whenever you want it.”

Socialize the Key Behaviors Required to Deliver a Great Experience

While the hiring process focuses on finding people with the right personality traits and values, socialization establishes new habits. Office Depot’s North America president Kevin Peters says, “You can’t just wave a magic wand and change behaviors.” That’s true. But over time, you can embed new standards for employee behavior through a combination of storytelling, rituals, and training.

Storytelling

Scientific research shows that human brains are wired to tell stories. Stories have been the primary vehicle for transmitting culture and community values for thousands of years. They are a key building block in reshaping your corporate culture, too. Storytelling highlights real instances of customer-centric behavior and gives employees tangible examples of thinking from the customer’s perspective. Zappos, the online retailer that’s become famous for its customer-centric culture and service, has a “Wow Library” of praiseworthy recorded calls that its customer service reps can tap into at any time for inspiration on how to better open a conversation or explain a company policy. And Sage North America, a developer of accounting and human resources software for small- and mid-sized businesses, invites customers to company meetings to share their experiences dealing with Sage.

Because storytelling gives the highlighted employees public kudos, it also encourages top performers to keep doing what they’re doing. As Carlos told us the details of his head-shaving incident, it quickly became clear that he never expected to get any recognition for his actions. In fact, it wasn’t until coworkers started inquiring about his missing locks that Carlos confessed. But after that, it didn’t take long for his story to spread across U.S. Cellular. His supervisor shared it with the call center’s director, who posted it on the company’s intranet site. “At first I didn’t know. Then someone said, ‘Hey, you’re on the Web site!’ They showed me the pictures and it was exciting. It was a good feeling.”

Rituals

Rituals are activities that you integrate into employees’ regular routines to guarantee great performance. For example, the Ritz-Carlton Hotel Company has a daily 15-minute lineup used globally across all of its properties. This ritual includes a storytelling session, during which its employees, who are referred to as “Ladies and Gentlemen,” share the great things they did for guests the day before. And Disney encourages its employees to take five minutes from their normal daily duties to do something special for guests. When an employee at one property heard that a guest wasn’t feeling well, she brought chicken soup up to her room.

Rituals aren’t just for frontline employees, and they don’t have to happen every day. At online discount fashion retailer Gilt Groupe, customer-centric rituals extend to the behind-the-scenes teams responsible for developing Gilt’s Web site and mobile and tablet apps. Michael Bryzek, Gilt’s co-founder and chief technology officer, explains, “We celebrate technology that improves the customer experience, and we kill technologies that are no longer relevant.” And when he says “kill,” he means it. The company holds funerals for dead software applications.

Gilt’s original content management system (CMS) — a complex program that helped the company cope with the onslaught of traffic it gets every day from 12 to 1 p.m. EST — was the first to go.

When the engineering team rewrote a new cms that made the site much faster for customers and deleted the old one from its code base, they celebrated. Gilt employees wrote poems and eulogies, erected tombstones, and deejayed a festive party in honor of the first CMS’s demise.

When asked how the funerals help to build a customer-centric culture, Michael replies, “When things are useful for customers we invest in them, and when they’re not, we invest to get them out of here.” This sends a strong signal to Gilt’s employees that they’re expected to take ownership for projects and technologies that deliver a great experience. “It also strips away the ego,” he says. “Just because you’ve created one great thing doesn’t mean that you’ll be better at creating the next. We want every single employee to express their creativity and feel empowered to create something that’s great for customers.”

Training

Training programs are an effective way to communicate your customer experience strategy and share customer insights. Training also helps employees develop the specific skills they need to participate in human-centered design projects, interpret customer-experience metrics, or simply do their regular jobs in a more customer-centric way. Many companies think about training primarily as an activity for new employees — and certainly, onboarding is a fantastic time to introduce employees to your customer-centric culture. But it’s never too late to teach current employees new tricks.

Training programs often start at a grassroots level. However, to make a material impact on your corporate culture, you ultimately need to formalize your training initiatives. For decades, American Express had held formal customer-service training sessions that focused primarily on industry- and company-specific technical skills and policies. But several years ago, a strategic shift ushered in by Jim Bush, executive vice president of world service, dramatically changed the nature of Amex’s training programs. Jim explains: “We started asking ourselves, do we want to be a transaction-based company where customers call in, we handle calls with scripted responses, and wish them well? Or do we want to be a relationship-based company that drives engagement with customers?” The company’s leaders chose the latter, and the resulting training programs helped its Customer Care Professionals (what Amex now calls its phone agents) forge deeper emotional connections — not only with customers, but with the company as well.

In the first phase of the training program, senior leaders talk about the company’s history, milestones, transitions, market opportunities, and public perceptions. Rick Bottner, vice president of global telephone servicing, explains, “We create an initial feeling for our employees that this is a high-quality company. We discuss our values: how we work, how we treat each other, and how we live in our communities. We make the connection that it’s more than ‘you come to work.’ It’s about living a role in your life and how this company can enrich that as well.”

The second phase focuses on customer relationships, and starts with heart-warming stories of how Amex reps have helped its card members over the years. Care Professionals then learn skills such as actively listening to what the caller is saying and assessing the caller’s mood, not just relying on the demographic information that’s in the caller’s customer profile. They also learn how to help customers understand the value of their relationship with American Express by explaining relevant card benefits. Since implementing this new training program as part of its broader service reinvention, Amex has watched metrics like average card spend and willingness to recommend increase significantly.

Reward Employees to Reinforce Customer-Centric Behaviors

Unfortunately, many companies make huge investments in hiring and training only to inadvertently encourage employees to focus on the wrong things. How? They create operational targets for frontline employees instead of basing their incentives on the quality of the service they provide. And they reward behind-the-scenes employees for plowing through lists of internal tasks and projects while providing zero recognition for work that improves the customer experience.

To keep employees focused on what’s important, you need to back up your hiring and socialization practices with the right types of incentives. These include informal rewards that recognize personal achievement and formal rewards that compensate employees based on customer-centric metrics.

Informal Rewards

Informal rewards programs — like certificates, prizes, and perks — celebrate customer-centric behavior and don’t typically take a lot of time or money to plan or execute. For example, the Starbucks Green Apron awards program encourages employees “to create a positive environment by aspiring to be welcoming, genuine, knowledgeable, considerate, and involved.” There’s no nomination process for these awards — employees simply present them to each other at formal and informal plant, department, store, district, and regional meetings.

Circles, a concierge service for corporate employees, has an array of programs that reinforce the importance of going the extra mile for customers. For example, its Top Dog Award recognizes employees who help out with extreme requests. Recent winners include an agent who sent a caller night-vision goggles to help locate her lost cat, and another who helped a family find a place to stay after their home was destroyed by a natural disaster. In addition to awards, Circles agents can accumulate points based on customer satisfaction surveys and redeem them for prizes, including additional time off.

Informal rewards can also come in the simplest of forms: titles that convey to employees their true importance to the organization. In addition to Ritz-Carlton’s “Ladies and Gentlemen” and American Express’s “Customer Care Professionals,” firms with this approach include Starbucks, which calls its employees partners, and Disney, which refers to its employees as cast members. American Express also provides each agent with personalized business cards. Why do these things matter? They focus employees on their primary role — creating amazing customer experiences — and provide daily reinforcement of their value to the company.

Formal Rewards

Formal rewards programs structure raises, bonuses, and promotions around customer-focused metrics. Because they put hard cash in employees’ pockets and can significantly boost their career paths, these initiatives take more rigor to implement.

At Enterprise Rent-A-Car, no one with below-average scores on the Enterprise Service Quality index can move up to senior management. On the flip side, Zappos realized that many of its call-center agents were happiest in frontline jobs that provide direct customer contact. To ensure that these agents also have continued career-development opportunities, Zappos created optional three-month to six-month rotations in areas such as online chat, email, and Twitter that let high performers learn new skills and earn a bump in pay.

On the financial front, companies ranging from Philips Electronics to Maersk Line, one of the world’s largest container shipping companies, tie employee bonuses to Net Promoter Score targets. And insurance company Allstate ties its 401(k) match to a customer loyalty index for 80 percent of company staff, including all of its customer-facing employees.

While formal incentives can be incredibly powerful, you need to deploy them carefully. The processes, policies and technologies that make it possible for employees to deliver a great experience should be in place before you tie compensation to customer-focused metrics. Dangling the carrot of additional pay and promotions prematurely just isn’t fair and can lead to employee frustration.

Formal rewards are meant to reinforce customer-centric behavior, not be an end in themselves. Companies that jump straight to instituting formal rewards risk having employees focus on doing the bare minimum to get their payouts instead of working to develop customer-centric behaviors. Rick Bottner from American Express put it this way: “Incentives should be the cherry on top for providing superior service.”

Solidify Your Customer Experience Efforts with a Customer-Centric Culture

No matter how solid your strategy is or how carefully you design your customer experience, it’s simply impossible to plan for every single customer interaction at every last touch point. At some point, you need to put your trust in your company’s most valuable resource, its employees, to do the right thing for customers. Similarly, sharing customer insights, measuring the results of your work, and introducing governance programs will only get you so far if your company’s workforce — from your top execs down to entry-level staff members — isn’t ready to embrace new ways of working.

That’s why building a customer-centric culture is critical to your success.

An excerpt from Outside In: The Power of Putting Customers at the Center of Your Business. Published by Amazon Publishing/New Harvest, August, 2012.

Baby Boomers Past, Present and Powerful

Fri, 28 Sep 2012 17:58:00 -0400

Can the digital world get in front of the silver tsunami?

Baby Boomers have always influenced media. Born between 1946 and 1964, they grew up with the television industry. As they innovated, the world gained email, and satellite TV, and the Internet, and … a whole new way for Boomers to consume content.

Of course, it’s hard to think of 78 million Americans as a “niche.” Baby Boomers control roughly $230 billion in consumer packaged-goods sales, possess nearly 70 percent of the nation’s wealth and have $2.3 billion in disposable income. If that’s a niche, then it’s a powerful one. Yet this niche is often ignored — and even scoffed at — by marketers who are focused on younger, more fully digital demographics.

That’s a big mistake. But to understand where the silver tsunami will carry media in the future, we need to look at what’s being consumed now. This group still loves its old-school content:

>> The average age of a primetime TV viewer is 51. Adults over 65 watch an average of 7 hours a day;
>> Older listeners make up one-third of radio news/talk audiences — the largest cohort of listeners;
>> News magazine readers are older than the typical American, with a median age of 49;
>> Newspaper readers are most likely to be over 65 years old.

And while they’ve certainly been much slower to the digital party, they’re here, and in vast numbers: in June 2012, Pew found that more than one-half of 65+ers (roughly 21.3 million people) are using the Internet— a record number. Of that group, about 12 percent are using online social networks; 20 percent of 50- to 65-year-old Boomers are on Facebook and its ilk; 91 percent of people over 50 use email.
Surveys show that in terms of influence on purchase or opinion, Baby Boomers and seniors are most swayed by TV and newspapers.

Getting Past the Age Thing

This is not a monolithic group. They are 78 million individuals with distinct consumption patterns related to life stages. A Boomer can be a first-time dad or a repeat grandparent. And there are dramatic differences in media consumption based on income and education.

There are strong correlations between the higher incomes and higher education of Boomers and their media use: for example, daily news readership is positively correlated to education; news magazine readers are not only older but wealthier than adults overall. Boomers are the most educated generation in U.S. history. And they’ve got money.

What do we think is the future of Baby Boomer media consumption? Tablets. Tablet users skew upper income. Boomers currently make up 27 percent of the tablet audience, according to comScore. Seniors account for nearly 7 percent of tablet owners, up significantly in the past two years. And when it comes to mobile devices, 65+ers are 28 percent more likely to choose a tablet over a smartphone.

We predict Baby Boomers will sway influence from TV and magazines to the tablet. We see:

>> More long-form content. Whether it’s editorial or paid marketing content, Baby Boomers and seniors have the time and desire to dig deep;
>> Willingness to pay for subscriptions. This is a generation that still values and therefore pays for news. The pride they take in their own accomplishments transfers to the work of others, so they subscribe at higher rates than younger age groups;
>> Tune in next week on a tablet near you! Older eyes and bodies can lead to device fatigue. Combine a familiar concept — the news reporting/fiction “serials” of Boomer youth — with the advantages of digital and you’ve got a winner. This trend also speaks to the way older adults create emotional connections with media and media personalities (my mom skips events if they conflict with her standing date with Rachel Maddow);
>> Convenience and portability. Affluent boomers are always on the move, and tablets jibe well with the lifestyle they enjoy. On-demand, mobile, and personalized videos, books and news — a very VIP feeling that resonates especially well with this cohort.

What does this mean for media planners? You can’t depend on a Baby Boomer stumbling over ad banners on a news site. They’ll use an app or have a digital magazine delivered and will skip from one article/video to another without ever leaving the tablet environment. Advertising will need to be:
>> More relevant (though the “Me” generation stereotype is bunk, it is, well, all about Me);
>> More contextual (as we age, our decision-making becomes more context driven);
>> More innovative;
>> More beautiful (as we age, our brain functions shift to the right/visual side);
>> More emotive (the right side of the brain also is sensual and emotional);
>> More action-oriented (Boomers have never and will never simply observe, and your brand doesn’t want them to).

All effective media plans are based on knowing the customer. In this case, know your Baby Boomer. Which of the 78 million are you trying to reach and motivate? Understanding your target will help you determine which media channels they are currently using, and which will grow in importance. That will determine your path to Baby Boomer success.

Welcome to the Fiberhood

Fri, 28 Sep 2012 17:56:00 -0400

By choosing the Silicon Prairie as base camp for its Google Fiber rollout, the company makes a statement about its pioneering status. And yes, everything is up to date in Kansas City.

O pioneers!

As Kansas Citians in both Missouri and Kansas race to pre-register their neighborhoods for the first Google Fiber connections, on neighborhood has thus far been overlooked. It’s the neighborhood Google calls home.

In July, Google opened “Fiber Space,” a sleek showroom and event space in two small brick buildings on Westport Road in Kansas City. The space, at the intersection of State Line Road, perches on the edge of Missouri. But what’s most intriguing is that the building sits on the outskirts of an historical neighborhood known as Westport.

Starting in the 1850s, this was the port to the West, civilization’s last stop, the town where pioneers and travelers outfitted their covered wagons and stocked up on the supplies they hoped would carry them through the wilderness of the Oregon, California, and Santa Fe trails. Today, Westport is a Kansas City neighborhood known for its century-old houses, funky mom and pop businesses, tattoo parlors, James Beard award-nominated chefs, a vegan bakery and cafe, and now, Fiber Space, situated exactly half a mile from a covered wagon that bears the Westport sign.

Westport was founded in 1857, just a few years before the take-off of the original high-speed connection: the Pony Express. At first an independent town, Westport became part of Kansas City about 40 years later. Today, one of Westport’s most popular bars and restaurants, McCoy’s, carries the name of John Calvin McCoy, the founder of Westport and one of the co-founders of Kansas City. Directly west of McCoy’s is a bar called Kelly’s Westport Inn, one of the two oldest buildings in Kansas City, and an outfitter for those about to brave the trails. Plaques on buildings and sidewalks testify to the neighborhood’s history.

While the pioneering history of the neighborhood wasn’t the main attraction for Google, it’s a fitting metaphor. The unabashedly heart-stirring marketing campaign for Fiber promises innovations in education (the kcmo district last year lost its superintendent and its accreditation, again, but in August kicked off the 2012 school year with a burst of optimism and new leadership), health care, and public safety. Although residents of neighborhoods, now dubbed “fiberhoods,” in KCMO and KCK are competing to win the first hookups, the overall message of the campaign speaks to the collective good. The slogan on posters, buses and in television ads reads “Let’s do this for __________,” The blank is filled in with everything from “Wyandotte High School” to “our patients” to “Kansas City.”

And by choosing a spot on State Line Road, the street that delineates the two Kansas Cities, Fiber Space also bridges Kansas and Missouri.

“Unless we put this right in the middle of the street, we couldn’t be more representative,” says Rachel Hack, a lifelong Kansas City resident and the community manager for Google Fiber.

Hack scouted the spot for Google herself. She learned of the vacancy after her gym closed its Westport branch, leaving behind a pair of strangely angular buildings and a leaky roof. The place sat empty until Google quietly rented and renovated it. The neighbors didn’t even know it was coming until the night before the grand opening, in July.

So what’s in the house that Fiber built? A model of the toy-car world featured in Google’s commercials, for starters. Huge couches and luminous flat screens. And there is ample evidence of community buy-in from local businesses and organizations. On opening weekend, the University of Kansas Medical Center, which is just a four-block walk from State Line and Westport, launched a series of “long-distance” nutritional information sessions at Fiber Space. Visitors can pick up a drink or a bite at the snack bar, courtesy of local restaurants. Recent visitors took part in a digital cooking class offered by Cupini’s, an Italian restaurant also located on Westport Road.

Snacks, cooking classes, and free health advice? The pioneers would have approved.

The New Face Race

Fri, 28 Sep 2012 17:56:00 -0400

Lost in the Olympic hubbub this summer was some interesting news from a small creative advertising and media agency in Nashville called Redpepper, which is testing an innovative new marketing platform in Nashville combining social media, digital out-of-home, brick-and-mortar retail venues, and facial recognition.