The Marketleap Report
Volume III, Issue #10, December 12, 2003

The Year of the Black Sheep
Marketleap's Look Back at 2003
By Keith Boswell

When the numbers began pouring in from Nielsen for the fall TV season on the major American networks, you could feel the gasps for air from the lungs of choking, old-world marketers. They were experiencing that most dreaded moment...the drowning feeling of having spent money advertising to ghosts that would never appear. Make goods from the networks won't correct where this luxury cruise liner is headed.

One thought has to ring clearly in television advertisers' minds - technology has finally caught up with them and empowered the consumer more than the advertiser. The billions spent trying to capture the various American demographics through television has proven elusive and extremely expensive.

The major networks were quick to show their darker side and dismiss the beloved source of their long-time success, Nielsen's TV ratings system. Nielsen's rating system allows the TV networks to easily formulate more expensive ad prices based on perceived viewing patterns from Nielsen's sample group. The same networks that sold their advertising based on Nielsen numbers, now openly called them incorrect. Luckily, Nielsen bravely held firm and showed that their data and sampling method was correct.

One group in particular is showing stunning declines in watching TV- the American male aged 18 - 34, down almost 10% from last year. The data shows they aren't watching Monday Night Football or Friends. None of the shows that were their supposed favorites from last year are holding their attention. Has he gone missing in the wild, or simply dropped from the face of Earth? Not really.

He could be playing a World War II game on Xbox Live or online with Madden 2004 on his Playstation 2. Xbox Live has over 500,000 members that on some days have logged more than 250,000 hours of online game time in a single 24 hour period.

He might be playing a Massively Multiplayer Online Role Playing Game (MMORPG, seriously I'm not making this up) like Star Wars Galaxies on his PC with friends from all over the world. Some top-selling video games are making more money than big-budget, major motion pictures. Grand Theft Auto III and Vice City each made over $400 million. Kids aren't spending $800 + million on mature rated video games.

He might have a TiVo or other digital video recorder and be skipping out on the network model altogether. He simply fast forwards through commercials and sets his own television schedule based on how it fits into his life, not the Thursday night lineup. Or he might just be online - shopping for new clothes, planning a trip, reading a foreign news article, looking for people to date, researching his family history, or updating his blog about collecting action figures. He may be using some of the newer social network applications that are growing in popularity like friendster.com (www.friendster.com), meetup.com (www.meetup.com) and socialnet.com (www.socialnet.com).

Television is losing its relevancy as the single source of information communication because there are better things to do than just unplug and stare. The television model will begin changing dramatically because there are more cost-effective ways to drive traffic and action to a business without a 30 second TV ad.

Advertisers have been led astray too long by media buyers, the networks, and creative agencies into believing that television was the ultimate outlet. Agencies show polling, focus group, and trend data to display a brands impact based on their television marketing spend.

But these numbers often do not provide a direct relationship between the cost of the advertising and the revenue or market gain from their expense. It's a pseudo science left to creative play rooms with twenty-something's who "get" your demographic and write copy with the best of them. Executives and business people aren't supposed to "get" it because the creative's they pay do.

When someone sees a 30 second spot, it speaks to them on an emotional level. Because consumers are becoming more Internet savvy, they are choosing information and detail over emotion and are actively educating themselves to be a smarter consumer. It's not just comparing prices and searching for the cheapest deal. The message to advertisers based on today's trends should be clear, turn your dollars elsewhere.

Search engine marketing, email marketing, online tools and exceptional customer service systems are expanding the ways that a business can serve its customers, grow its market share, and realize the benefits from their technology investments. These new systems allow for tracking and ROI comparison at the point of delivery for marketers. The unheard of holy grail. Enabling technologies are changing business and our life faster than ever.

Look at the U.S. presidential campaign of Democrat Howard Dean. His election team believed that the Internet would be the focal point for rallying their supporters. They quickly discovered that their supporters would share with others (social network applications), and they were willing to make donations directly through the website. Howard Dean's campaign has been the most successful fund-raising effort by a Democrat ever, thanks in large part to the use of Internet technologies.

When we started the Marketleap Report in 2001, the market was completing an extremely turbulent shake out. Internet technologies had swept up the global imagination from 1996 through 1999, quickly to flame out as people realized they had no idea what exactly they were trying to accomplish by moving online.

But there was a core set of believers, including ourselves, that saw what the future held for business and continued to dutifully work to make it so. Our inaugural issue still captures our own belief in technology and what it can do for companies that understand how to use it.

It's exciting to see the technology curve catching up with businesses and consumers everywhere. This year's Black Friday, the day after Thanksgiving and always the busiest day of shopping in America , saw record numbers of sales at websites worldwide. People aren't using the Internet and other computer related technologies like they watch a television, and it's time that all marketers understand that.

In 2004, the growth in online marketing will continue as never before as more advertisers discover the benefits and advantages of online marketing platforms. Consumers seem to be very agreeable to it - they like using search engines, and they like receiving email from companies they want to hear from.

The take away lesson of 2003 for all marketers is consumers like being in control and their capability to take control is just warming up. Technologies have enabled them to construct their world in unique and individual ways. The Internet ties it all together and the businesses that use them wisely are experiencing record growth. All marketers should adapt and insert themselves into the consumer's world at the right time, rather than flinging creative swings into the ghostly apparition of marketing past.

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