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11/27/2007

Opportunity Strikes

The writers' strike in Hollywood has generated a lot of interesting commentary, most of it (not surprisingly) applauding the chutzpah of the writers and chastising the fossilized studios for their shortsightedness. Two of the more interesting stories - this L.A. Times article and this blog post by Netscape founder Marc Andreessen - present compelling new visions for the future of entertainment, a future owned by the creators rather than the distributors. But I think there is a player in this drama that's being neglected and their role might ultimately be the most transformational... the advertisers.

As Andreessen correctly notes, traditional television is supported primarily by large national advertising campaigns from your favorite domestic beers, automakers and household cleaners. In an age when there were only three or four networks, big advertising campaigns seemed to make some sense. If you advertised on MASH, you had the attention of a third or more of the nation. But TV hasn't been like that for more than a quarter-century. The returns on network advertising have been diminishing rapidly while the prices for spots keeps going up.

I'm not an Ad guy, nor have I ever been, but it strikes me as incredible that this model has lasted as long as it has. I've watched Mad Men. I know Ad guys are fast-talkers, but that they've been able to continue this charade is kind of admirable. Corporations are paying twice as much to reach a fraction of the people they did 20 years ago. And it's costing them more than ever to produce the commercials. Throw in Tivo and DVR and many of the people who actually watch the show don't even watch the commercials. Who sees this as a responsible way to spend the shareholders' money?

What does this have to do with the writers' strike? Well, it finally gives corporations the opportunity to break from the nasty habit of network advertising. Most companies have dipped their foot into alternative ad models. Without a new season of Lost, they'll be encouraged to really dive into all the options out there. What will they find? A number of preferable alternatives which more directly engage their target consumers.

Advertisers will be free to explore a more social approach to marketing, taking advantage of the increasingly active user bases on social networking sites like Facebook and YouTube. Rather than passively running ads on television shows in the name of "awareness", they can more actively court consumers to participate in their brands and to become evangelists. With the internet there's hardly any need for awareness anymore. What corporations need is activity and consumers are more than willing to personally market a brand or product that is appealing to them. A successful approach to social marketing will require a great deal more management and represent a fair amount of risk compared to shotgun-style spots on ABC, but the reward should prove greater as well.

After the lost TV season of '08, a great number of advertisers might find they don't need to advertise much on network television anymore. And whatever the resolution to the writers' strike, if the advertisers don't come back, the network model will finally crumble and the new models which Andreessen  endorses will be well-positioned to flourish.

November 27, 2007 in Branding, Marketing communications, Technology | Permalink

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