26 JULY 2005
MEDIACOM
Marketing Digest
P O W E R . T O . T H E . P E O P L E
Is Democracy Being Served?
The Election date has been announced and the race is on. Stand by for a steady stream of subjective, reflective and
defective invective over the next few weeks as we count down to September 17. And yet - will you actually see or hear as
much electioneering as you should? Yes, the News and Current Affairs shows will be supersaturated. There'll be Election
Specials, Debates, Chats, Commentaries, Monologues and Diatribes. And there'll be TV and Radio advertising, courtesty of
public funding allocated via elaborate protocols and arcane formulae by the Electoral Commission. But the dollars
actually given over to our various political parties to make their case for truth, justice and the Kiwi way simply
haven't kept pace with media inflation and audience fragmentation.
Yes, this year the total allocation has increased - up from $2.081 million to $3.2 million, the first increase since
1990. Labour's been given $1.1 million, just enough for it to qualify as fifth biggest TV & Radio spender (based on the month of September 2004). On the same basis, National's $900,000 allocation would see it
occupy the lucky 13th spot. Unfortunately for our smaller parties, the $200,000 allocated to ACT, the Greens, NZ First
and United Future means that more than two hundred other advertisers are spending more than they are on radio and
television in the course of the four week lead-up. Looks like Head & Shoulders Anti-Dandruff Shampoo needs to be included in post-election coalition talks. As for the Maori Party, its
$125,000 is enough to help the organisation narrowly outperform the Kelloggs Nutri-Grain Bar and clock in at Number 345.
If we cast our gaze back ten years, we note that the average cost to reach 1% of voters on television in September 1995
was $496. In September 2005 that ratecard cost has risen to $953, a 92% increase. In comparison, Electoral Commission
funding has only risen 55% - and that chunk of change has to cover all the MMP-powered parties as well.
The last thing we want to encourage is more political pontificating. And, budget surpluses notwithstanding, we'd hate to
see our hard-earned tax dollars funding even more egos. But television and radio have evolved, segmented and fragmented
in ways that our electoral administrators never envisaged. By 2008 Personal Video Recorders, free-to-air digital
channels and TV via Internet will distort the picture even more.
We reckon it's time to change the rules. Yes, let's keep funding allocations but let's also allow political parties to
buy their own airtime, up to a mandated limit (that reflects agreed industry performance standards). Let's make
fundraising for this purpose transparent, lest some overseas government buys our elections and installs its own puppets.
If we don't shake things up, pretty soon the silent majority will turn into the deaf majority, unreached and untouched
by the political musings of those who would be king (or queen). Yeah, many reluctant voters would love to live in a cone
of silence but the imperfect-but-it's-all-we've-got mirage called democracy requires the people to participate, at least
a little bit every three years.
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Shock! Horror! News!
In the headlines: TVNZ surprised the industry last week by announcing that pricing for their flagship News programme
will decrease by between 10 and 15% on specific nights for August and September, effective last Thursday.
The announcement was accompanied by this explanation: "TVNZ runs a demand driven ratecard. Our initial third quarter
pricing for News was based on extreme levels of demand experienced in previous quarters for the property. The pricing
strategy was aimed at levelling out demand and creating some inventory for the short market. Although demand remains
strong year-on-year, the pricing strategy has created more additional inventory than anticipated. Therefore, in keeping
with our demand driven pricing philosophy, we are reducing the rate on specific nights where more inventory is
available."
All airtime currently held in the timeslot will take on the new rate with the pennies thus released required to be
respent over the period.
We hate to say "we told you so" but ...
Nothing But Net
From 2006 top European football matches will have to be shown on the internet at the same time as they are televised
live, and by the same broadcaster, the body governing the Champions League has specified. The condition, imposed by
UEFA, applies to the rights to televise Champions League games for the three seasons between 2006 and 2009.
The development is also significant for handing online sports rights to broadcasters, rather than the leading clubs,
which make money by selling highlights packages via their own websites, but have never been given live rights by UEFA.
The deal is significant, not so much because of the fact that it's happened but because of when it comes into effect.
Programme makers, content providers and broadcasters around the world have been contemplating the transition to
internet-based TV distribution for some considerable time, but here's an organisation that's gone ahead and issued a
compulsory edict, starting next year.
UEFA may be first, but it's not alone. The BBC, who ran a trial of internet-delivered programming last year, is now
proceeding with plans to offer its content online, free to British web users. After at first suggesting that
international surfers would be out of luck, the Beeb is now reportedly considering offering its content worldwide, for a
fee.
From one perspective, these moves are hugely disruptive to existing broadcast models based on geography. A TV programme
is produced in one country, usually funded by the commissioning network in that country. Then the programme is sold to
broadcasters in other countries, for screening at their leisure. If a programme is available worldwide via the internet,
won't regional revenues dissolve away?
Potentially, yes. Or the internet could simply be an additional distribution channel, generating extra revenues without
disrupting the traditional supply chain. Despite dire predictions Hollywood has managed to survive and prosper as the
old "only in cinemas" model has evolved to encompass cinema, home video, pay-per-view, subscription television and
finally free-to-air. Content remains king but the amount you pay to watch it diminishes as it passes through the chain
from supplier to supplier.
Slicing and dicing, long the mainstay of home shopping networks, is now applying itself to the rest of television.
Evolve or diet.
Dead Parrots Live
British comedy legends Monty Python are set to reunite for a six-part series to be screened in the US in 2006. All five
surviving comedians -- John Cleese, Eric Idle, Terry Gilliam, Michael Palin and Terry Jones -- will regroup for 'Monty
Python's Personal Best' for PBS. Each of the madcap troupe will pen their own special episode and the final instalment
will be a collaboration from all five.
The show will be part compilation of original Pythonesque material along with some new clips. The Pythons have each
chosen their favourite bits from old Python films and the television series and linked them together in their own crazy
way.
The resurgence of Pythonism in the US can be directly attributed to the success of Eric Idle's Broadway musical,
'Spamalot', based on the movie 'Monty Python and the Holy Grail', which won three Tony Awards last month.
Can the magic be recaptured? It's a tough ask.
A Pinch of Cerebos and Three Tablespoons of McCormicks
Once upon a time there was an old convention which held that advertising and editorial were separate, not unlike church
and state, and that the two should not contaminate each other. That convention, severely bent from time to time, now
lies battered and beaten in a corner. Shopping magazines, where all editorial content included brand mentions and
directions on where to buy the featured products, led the fight and have now subverted other categories.
Latest champion of the "editorial must include advertising" school: a new US food magazine, Relish, which will let
marketers buy brand mentions in recipes prepared by the editorial staff and buy product placement among
staff-recommended kitchen and home gadgets. The magazine, planned to launch in February 2006, is intended as an insert
in newspapers across America, which should drag the newspaper industry into the controversy as well.
As marketers, we're certainly not averse to the notion of advertising inclusion in editorial. But we also have to be
acutely aware of the fact that we advertise in magazines and newspapers because the editorial content bestows context
and credibility upon our advertising. If consumers lose faith in editorial because "it's always trying to flog stuff
off", we lose the ability to communicate effectively to those consumers.
We recommend caution. Not all conventions should be abandoned just because we can.
Simulbrowsing
New research by the UK's Radio Advertising Bureau, jointly funded by the Internet Advertising Bureau, has found that at
any given time 20% of internet users are also listening to radio. The study, curiously, also found that 39% of
respondents claimed that radio advertising has prompted them to search for something on the internet. A quarter of the
survey regularly uses the internet to listen to radio stations.
The research comes as UK radio advertising is experiencing a downturn after several years of gaining share of overall
adspend. It is now neck and neck with online in market share according to most surveys.
We might normally be a tad cynical about such research, given its origins amongst organisations with a vested interest
in these sorts of results. However the notion does make logical sense, given the propensity - we might almost say
necessity - to multitask in today's urgent environment.
The net/radio simultaneous exposure is greater amongst the under 44s, which isn't particularly surprising, is most
evident at home and peaks in the early evening (5-8pm).
The report concludes with five key recommendations to help advertisers take advantage of the synergies between the
media:
1. Aim for a simultaneous presence in both radio and online (duh, really?)
2. Invest in paid–for listings on search engines to follow up radio advertising.
3. Consider advertising on radio at times when the highest proportion of listeners are online.
4. Develop greater creative synergy between radio commercials and online advertising/content.
5. Put measures in place to gain understanding about the additional effect of radio on online response.
We have an electronic edition of the "Using Radio With Online" report for those seeking more enlightenment - email us at
newsletter@mediacom.co.nz for your very own copy.
ABOUT MEDIACOM
MEDIACOM, with offices in 80 countries, is one of the world's largest and most respected independent media planning and
buying organisations.
We create media solutions that build business for a wide range of local, regional and worldwide clients.
With $13 billion in global billings, a commitment to strategic insight, total communications planning, tactical media
brilliance and tough but creative media negotiating, MEDIACOM provides unsurpassed value in today's chaotic media
marketplace.
ENDS