The Big Short(form)
Looking back at big historical events, they often look painfully obvious when viewed through the lens of modern narrative. In 1913, as the web of geopolitical alliances and treaties grew in entanglement, everyone on earth must have been able to see that World War I was not only inevitable, but imminent, right? In 2007, pretty much everyone must have had some sense that subprime mortgages to finance 2nd and 3rd homes for the tenuously employed had to lead to a cascade of crippling defaults, right?
Of course, this isn’t how it works in the real world. This is partially because books like The Guns of August and The Big Short don’t come until after — the data may be there in real-time, hidden in the chaos of information, but the narrative does not come until later.
It was with this in mind that I read “As Viewers Drift Online, Advertisers Hold Fast to Broadcast TV” in the New York Times this week, and I couldn’t help but wonder whether or not the data of inevitability was beginning to surface once again. For over a decade, media analysts have been hypothesizing on when the $200+ billion dollars of brand advertising spend would transition from TV to the web. But it has not happened. And because it has not happened yet, it is easy to adopt the position that it will never happen. Or that it is still years away. Here are some of the best quotes and passages from the article:
“As a media analyst at Pivotal Research, Brian Wieser, put it, advertising on TV is “as archaic as water flowing through pipes. You could set up a drone to take water from a reservoir and use fascinating technology and cutting-edge approaches to deliver it, but there’s a good reason we use these systems,” he said.
Really? Maybe carrying water by drone just isn’t a good idea. Does this one example of technology standing the test of time mean that archaic technology is a permanent fit in all cases?
“In interviews, ad buyers and television executives pointed to a variety of reasons that advertisers remain attracted to ABC, NBC, Fox and CBS. Ratings aside, television still reaches more people and provides a reliable way for an ad to be seen on a full screen with sound. There is a limited amount of inventory, in contrast to the endless reach of the web, and marketers know rates will spike if they wait to buy airtime.”
A limited amount of inventory? I think I have a different cable package. I could easily take the opposite side and argue that there are effectively limitless TV networks, but only a handful of social platforms with true scale.
“The number of minutes we show commercials is way more than YouTube or Facebook on a video basis — many multiples more,” Mr. Marchese said.
When I read this, I can’t help but focus on the key word “show”. They can show commercials all day and night, but how many folks are actually watching them on TV? I cannot remember the last time I watched a commercial on TV during anything other than a sporting event. But I bet I was “shown” a lot as I fast forwarded through them to the program. There’s simply no way that I’m an effective impression.
“As attractive as that slicing and dicing can be, television appears to have an advantage in terms of the actual commercial time it can offer marketers.”
Huh? There are nearly 2 billion people on Facebook every day. And there are nearly 200 million people on Snapchat every day getting the closest thing to a “television” experience that exists on mobile –full screen, audio on, pure video.
“It will continue to move forward this way as long as it works”
But regardless of how difficult it may be to change entrenched behaviors, at some point — and I would argue that some point is one or two years, not five — the data will become too damning for brand marketers to ignore. Reading between the lines of the pro-TV expert quotes, a couple of points and observations stuck out for me:
1) The average age of the audience for scripted TV’s most popular show is 55. I realize this is just one show, but it’s indicative of the broader reality — broadcast TV’s audience is old and getting older every day. And sports is not necessarily different. MLB’s broadcast audience on FOX during last year’s World Series was even older, and it has been aging faster than time passes.
2) Among 18–49 year-olds, ratings in broadcast television fell by 11% this year. Holy moly! That’s more than 1 in 10 viewers that stopped watching TV. In one year. Check out this chart from a Recode article earlier today on this very topic for an even starker view of just how much of the TV audience has disappeared already:
3) Does an inflexible system that locks you in 6 months in advance really seem in line with the pace of change in today’s world? Per the article:
“Mass marketers aiming to drive people to, say, their stores or car dealerships rely on long-held TV plans to align with their product launches, and pulling out could be both expensive and risky.”
This doesn’t seem optimal to me. Cultural trends shift and build faster than ever these days. If anyone reading this has kids, just think of the rise of the Fidget Cubes and Spinners. As far as I know, they didn’t exist 4 weeks ago, and now every kid I see seems to have one. This would have been tough to predict 6 months ago, and even tougher to anticipate the right amount of supporting marketing.
So what should one do if, as the data seems to indicate, the big shift has started? In 1913 there wasn’t a whole lot that anyone could do. The die was cast, and no amount of human effort could have slowed the momentum of destruction. In 2007 (and before), there was plenty to do if you were morally square with betting on, and ultimately profiting from, an event that created misery and depression on a global scale.
But this event is different. As $100+ billion begins to ever so cautiously creep towards a new home, there are many positives that can be expected to emerge as a result.
· The Democratization of Video Advertising — With self-service video ad buying platforms available and improving every day for all of the major platforms, more companies than ever will become video advertisers in the coming years. So not only will major brand marketers move over, but they will be buying alongside millions of smaller businesses. Today Facebook has over 5 million advertisers, but less than half a million video advertisers. This is because creating quality video ads is hard and expensive. But a number of emerging platforms are making it easier to connect with talent efficiently, and in time, all advertisers will be video advertisers. The jobs created from these will number in the millions.
· The Emergence of Rapid Creative — At the same time, we are seeing a transition in the way marketers view video creative. Whereas brands used to create a single piece of amazing content and then run it for months (or years), now the idea of “Creative Fatigue” is gaining more and more traction. Ads are supposed to be refreshed frequently. This means even more demand.
· Video Storytelling is the New Coding — For the past 25 years, coding has been the sure path to employment. Parents pushed their kids into engineering programs with the assumption that if you could write code, you would never have a hard time finding a quality job. Similarly, if all communications are in the process of transitioning from static text and images to video, coupled with a remapping of the existing brand marketing ecosystem, couldn’t you argue that those who can tell compelling stories in video will face the same explosion of opportunity during the next twenty years?
Looking back 10 years from now, I suspect this will be another event that will be painfully obvious when viewed with the power of retrospective narrative. We will all slap our foreheads and say, “Of course all brand marketing dollars moved to Snapchat, Facebook, Google, and Amazon” (as they ramp up their video business). I don’t know what the books will be titled — probably something more creative than The Big Short(form). But I can tell you this. The folks that anticipate the shift and develop the skills to participate will be rewarded handsomely. A lot of jobs will be created in the process, and that’s an event that we can all get behind.