Television: The box battles on

TV MARKETING   BROADCASTING   

When crafting an ad campaign, at some point the focus turns to choosing what media it will employ. For most marketers this is a typically easy and routine selection. Television is undoubtedly one of the first, if not the first, mediums chosen. And it's not hard to see why. TV's mass appeal and wide reach, its popularity with consumers and its relative easiness to buy make it a no-brainer. And there are few things in the world of marketing as powerful as a beautifully shot, perfectly scripted and well-cast TVC.

This has been the way of the marketer's life ever since television became a mass phenomenon. Singapore is no different - gross advertising spend for terrestrial TV increased 8% from $683 million 2007 to $734 million in 2008, according to Nielsen.

But ever so slowly over the past decade, and gathering more pace in the last few years, has the tide been shifting. New forces, mediums and trends have emerged to question TV's stranglehold over the modern-day marketing plan. TV, while easy to buy, has never exactly been cheap. Neither has it ever been exact or precise in terms of measuring effectiveness.

Maggie Choi, managing director of OMD Asia Pacific, believes the biggest challenge facing TV broadcasters is "the technology-enabled battle for share of the mind of consumers nowadays".

"The industry is no longer just fighting for consumers' share of time, but it is also competing to get and prove their ability to engage and interact with consumers," she says.

Choi explains that this is not measured by the traditional audience ratings which TV broadcasters are accustomed to but by a new currency based on actual results of consumer engagement. Put simply, TV broadcasters have to learn new ways of connecting with consumers rather than just generating viewership.

She says that TV stations are looking at digital transmission technologies to allow more active audience engagement, expanding their role in communication from selling TV spots and audience ratings to offering fully integrated multi-platform exposure opportunities which aside from TV, include such things as the internet, event sponsorship and branded content.

"Television is still important and it commands significant influence over consumers," Choi says.

"But, the way in which consumers seek information has changed so the communications needs of marketers have also changed. Therefore, the way in which TV operates has to change as well through constant innovation to take up new challenges, including format of advertising, targeting ad audience segmentation, program content, distribution and even flexibility to accommodate different requirements."

Locally, MediaCorp has recognized this trend and restructured its departments to offer advertisers better and more engaging cross-platform marketing opportunities across its TV, print and online properties. Similarly on the regional front, the likes of ESPN Star Sports (ESS) continue to leverage its strong digital media offering as well as its TV and events businesses.

Charles Less, ESS' senior vice president of advertising and digital media sales, agrees with Maggie Choi's sentiments and highlights the audience fragmentation alongside increasing media divergence as major challenges that the TV industry faces. Consumers are now splicing their time among a myriad of media choices, channels and platforms. Less says that over the last decade, consumers migrated to more specialised, niche content via multichannel offerings. Now with the growing availability of on demand, self programming and search features, Less now sees users move beyond niche to individualized viewing.

"This splintering of the audience is great for advertisers because they can target the demos they are going after and decrease their wastage," he says.

"It is hard on the broadcaster because it makes the cost to an advertiser of obtaining their desired demo cheaper, which drives down overall revenue.

"The question is if the niche medium can survive the lower revenue model. Also, it is really going to hurt the free-to-air model because the only demo most advertisers really go after is the mass medium and most new mediums, be they cable or broadband, are going to distract from the effectiveness of FTA."

Whether this trend will hurt free-to-air players more than their cable TV counterparts is open to conjecture. But what isn't up for debate is that sides of the market are going to find it harder to both secure great content and funding for that content.

"Creating compelling, engaging and relevant programming to build eyeballs will become a challenge," Less says.

"If programs aren't delivering to an audience, then advertisers are not going to foot the bill. If content can be downloaded off the internet an hour after it is broadcast on a cable channel for free, then the consumer isn't going to pay for it either."

It's certainly an issue considering the rise in broadcast and production rights for many genres, particularly sports, but also for TV dramas and other content forms. The rise of user-pays video content on mobile and some pay TV forms offers some solace but not a complete answer. But there are bigger issues in play.

Essentially, the entire practice of marketing and advertising on TV is being forced to evolve - saving itself from being knocked out of the competition by new challengers. The growth of online video, IPTV, video blogging and the expected explosion of mobile TV in the next few years, all present big obstacles for both local and regional television to face. They also present huge new opportunities for savvy marketers.

It seems every day goes by a new web TV platform or initiative emerges. The establishment and success of Singapore Press Holdings' RazorTV shows that popular television content is not just limited to the box. Singaporeans are broadening their tastes and enjoying these platforms. Last month the local arrival of a new online reality TV show - Supermodelme.tv, which has an attractive technology for marketers to use as it offers views instant information on the brands worn on the program - demonstrates that the idea of traditional television content is rapidly changing.

Branded content is part of this evolution. More brands are delving into this area and its not hard to see why. As every marketer and their personal assistant knows, content is king. Why simply run an ad between the breaks of a TV show when you can actually get involved in creating the content of that show, allowing for greater engagement and connection with the viewers?

Playboy's entrant into the Singapore magazine market, VIP, has embarked on its own branded content project through a partnership with Mindshare and the TV channel AXN. Footage from VIP events and partiers, competitions and other promotional tie-ins have featured on AXN's men's program The Duke in a manner that is beneficial to both brands. Other well-known regional examples include ESPN's Nokia Football Crazy and Bausch & Lomb which is branded content partner for the Chinese version of Ugly Betty.

Sony Electronics and Clinique have both experimenting with branded content in China through SPTI's teen drama Sufei's Diary. The program, which has generated more than 15.3 million online interactions since the series debuted in the country in December, is show on TV screens in airports, public buses and subway stations in Beijing and Shanghai, and online at sites like Youku.com and Cernet.com. Throughout the show the advertiser's products have been integrated into Sufei's Diary's storyline, such as Sufei using a pink Sony Vaio computer and visiting a Clinique counter. Sony has been encouraging viewers to interact with the show through weekly online polls to help guide Sufei in some of the difficult decisions she has to make. The polls then go on to affect the following episode's storyline.

Mary Chan, SPTI's vice president of production, believes the show's multi-platform digital experiment has proven to be an effective way to target the tech-savvy youth market. "We believe the show is not only entertaining, but the level of interaction offered by the show towards our advertising partners' brands is something which cannot be replicated by traditional television programs," she says.

Coca-Cola is one company that historically has been a big user of TV advertising in the past and continues that practice today. It is also a growing user of branded content and Rommel P. Fuentebella, integrated marketing communications and activation manager for Coca-Cola Singapore, says the soft drinks giant does not have a monogamous marketing relationship with television.

"We look at what media would best enable us to bring across our brand messages and connect with our target audience, and based on experience it is more a mix rather than a single medium," he says.

"Coca-Cola does not look at TV advertising as just pure placement of spots. We look at how we can create branded content in the right programs with the highest affinity with our target audience, hence the effective cost of advertising is something that allows us to get more for bang for our buck."

Despite Coke being a heavy TV advertiser, Fuentebella says the brand always uses a media neutral mindset.

"[We] first understand what is the brands' business and communication objectives and from there plan the right/optimal media mix that will deliver against these objectives," he says.

Another heavy TV user is Asia Pacific Breweries (APB) which handles alcohol brands such as Tiger, Heineken, Anchor, Baron's Strong Brew and ABC Extra Stout. Martyn Ferguson, assistant general manager for marketing at APB Singapore, is a big fan of television but agrees that the market is shifting.

"We still love TV, but we also recognise that there are more and more mediums available out there in the market that can also serve our messaging purposes," he says. "The cost of buying TV media is always relatively high and a rule of thumb is to buy into TV advertising only if you have sufficient budget to get an effective media result in terms of effectiveness and reach."

There has been some conjecture in the industry recently about the price of TV advertising dropping in a bid to attract a bigger share of marketing budgets. Germaine Ng Ferguson, head of advertising sales at StarHub, believes that TV advertising rates in general have not changed much, however a prolonged recession will see more value added by media owners to cushion the impact. Some agree that TV advertising is becoming more cost-efficient because with more choices these days, advertisers can find the right mix to reach their target audience more effectively. Even if that it is the case, broadcasters still need to convince advertisers that they have a substantial audience base as their foundational asset.

"They also need to provide advertisers and viewers diversified programming content and services to engage a target audience in a longer course of time," Sonia Jackson, senior vice president of marketing at Fox International Channels Asia, says.

"With a perfect media platform set, pay-TV players now need to offer advertisers access to a one-stop professional creative service to formulate original and refreshing campaigns that target specific consumers."

In terms of mass reach, television is still arguably a marketer's best friend. But reach is no longer the be all and end all. Other metrics and standards have become just as crucial. With fellow traditional or, ‘old', media such as newspapers also battling to maintain its market share, the television industry has some challenges to face. But we shouldn't be writing its epitaph just yet. Television will survive but the very concept and transmission model of it is evolving as the box becomes wired up as a digital entertainment centerpiece.

As Ricky Ow, senior vice president & general manager of SPE Networks Asia, points out people thought radio would die off when TV was born.

After the birth of the internet, people were worried TV would suffer a similar fate.

"Well, all these mediums are still very much in the game, and have in fact fueled each other's growth," Ow says.

"TV advertising will still remain a cornerstone in many media plans, simply because the TV set itself will not become obsolete. The TV set is, and will remain, a centerpiece of a household. But instead of just merely serving its primary function of being a goggle box providing TV entertainment, it is increasingly being built to provide multi-media solutions."

What is the future of TV advertising?

By John Wright, director of MediaLab Asia Pacific, Mediaedge:cia

Soon, at least 80% of all communications in most markets will be digital. Initially we should be thinking less about channels and more about content, for it is content that drives consumer engagement; be that a live football match, a reality TV show, movie trailer, a discussion forum or news story.

Such content can now be distributed through many different channels - TV included. As has always been the case, brands can create this content themselves, have a direct association with it, or advertise their products and messages around it.

So what can ‘TV' do?

1. Media owners, agencies and advertisers should stop thinking about TV as a separate channel. Consumers have, and many under 30 never did.

2. Media owners must strike partnerships with content providers and other distribution channels to allow multi-point access to and interaction with content. This offers associated brands the opportunity to hold the attention of consumers across multiple channels, rather than lose them if there is no means to interact.

Advertisers and agencies must also take responsibility. Advertisers should not be asking for a "TV campaign". Instead they should ask: ‘How can I engage with the right type of people to help me achieve my brand objectives?' Part of the answer may well be a TV campaign.