New Directions in Creativity Shift Focus in TV Ad Debate

Anthony Zuiker, creator and executive producer, CSI

Anthony Zuiker, creator and executive producer, CSI

October 24, 2011 – Even as proponents of advanced advertising strategies point to new signs of progress it appears the larger focus of programmers and advertisers is on how best to expand revenues by building audiences through multi-screen transmedia initiatives and greater socialization of content.

Ultimately, the benefits of interactive and targeted advertising will accrue to programming no matter what directions story-telling and community-building take, but innovative uses of technology, creativity and consumer behavior to pull audiences to content and thereby drive higher ad revenues is what has the TV business buzzing.

The new focus is on broadening content in mainstream TV programs to include online back stories about characters or incremental developments that enrich the main story, program-specific games or other types of extensions involving reality shows, sports or other kinds of programming. All of this is evident in plans taking shape at ABC under the creative guidance of Anthony Zuiker, the executive producer of the CSI series who recently signed on with ABC Studios to build new programming there.

Zuiker, describing what he will talk about at the forthcoming Media Innovations Summit in Santa Clara, Calif., says such extensions, tied to social networking and allowing viewers to participate in programming whenever they want on any device, need to be “baked into the DNA of a program from launch.” He will co-produce his first show for ABC, “Chameleon,” about a female undercover FBI agent, with the show’s writer, Andrea Berloff and studio-affiliated Brillstein Entertainment Partners.

Zuiker declines to go into specifics of what he has in mind, saying he will save that for his presentation at the summit, but he makes clear he’s part of a vanguard that seeks to revolutionize TV by turning programs into multi-platform franchises that can engage viewers much more deeply than has been the case with traditional series. This is especially true when it comes to drawing young people into TV programming, he notes.

“TV viewers will demand more than they get today watching a show once a week 24 times a year with 20 minutes of advertising,” Zuiker says.

While TV has more than held its own against the onslaught of online video with year-to-year gains in total viewing hours per household, fragmentation of audiences drawn to cable networks has reduced viewing of prime-time broadcast TV, especially within the key 18-49 age demographic segment targeted by many advertisers. The number of people in that group watching prime-time broadcast TV during the first two weeks of the new TV season was down by 4.1 percent from a year earlier, according to Nielsen, marking the second straight year of declining viewership.

Overall, this has not hurt revenues as yet, because CPMs (costs per mille) at $30-$40 for this age group in prime time, are up by that much or more over the two-year timeframe. But this trend along with Neilsen’s new finding that the heavier users of online video in the 18-24 group are watching less TV are statistical vindications of widespread concerns that TV programmers are going to have to do more to sustain audience strength over the long run.

Moreover, to the extent that more frequent engagement of viewers who like a particular show, including socialization of program watching, can add hours of viewing to specific programs, the increased amount of viewing time per consumer is viewed as an essential counter weight to fragmentation. In fact, many people argue the emphasis in interactivity should be on viewer engagement with content rather than interactive advertising.

“The focus on advertising for ITV is wrong,” says Sangita Verma, CEO and co-founder of Rainmaker Digital Entertainment, a new firm specializing in apps designed to drive consumer engagement with TV programming. “It could lead to being a one-dimensional use of interactivity that focuses on RFIs and long-form versions of ads rather than on what consumers are interested in.”

Verma, who created the TAG Networks interactive game channel, since sold to ActiveVideo, doesn’t discount the importance of interactivity in advertising. But she says it needs to be ushered in on the strength of viewer acclimation to interactivity as part of the content experience if it’s to gain real traction.

“iTunes had 300,000 to 400,000 non-advertising applications in the market before they started running ads,” she notes. “This resulted in the ads being more consumer-centric. In ITV things have to be more well rounded with a standard platform in play. Right now there’s no clear path to define how developers are going to get apps in front of the TV viewer.”

The cable industry, through Canoe Ventures, of course, is trying to do something about this, having just announced a new brand, ExpandTV, for its ITV platform, the widely deployed set-top based solution known technically as EBIF (Enhanced TV Binary Interchange Format). “We now have a program that the entire industry can rally around to promote the adoption of ITV,” says Vicki Lins, chief marketing officer at Canoe, which will manage licensing of the brand as a means of alerting consumers that an ad or program is supporting a trusted mode of interactivity.

The collaborative branding effort, involving various industry organizations, MSOs and programmers, is an important step toward accelerating “viewer awareness of and comfort with interactivity,” says Bob Liodice, president and CEO of the Association of National Advertisers. Now, says Peter Stern, executive vice president and chief strategy officer for Time Warner Cable, the industry needs to put more energy behind the idea of advanced advertising.

The idea of using the buttons on a remote to click for more information “is easy for consumers and advertisers,” Stern says. “You can click to get an email, a phone call or something in the mail. We’re worried if we can pull this off, but we should be focused on making it happen and on dynamic advertising for video on demand.”

The opportunity for cable is huge in the advanced advertising domain, agrees Jessica Reif Cohen, first vice president and managing director at Merrill Lynch. “Cable has the [support] infrastructure and should be paid for it,” she says.

However, she adds, “The goal of adding $14 billion [in ad revenues in a two-year timeframe following Canoe’s launch] was too aggressive.” Indeed, she notes, cable’s national inventory would be far more valuable if the industry can get to the level of technology coordination required to ensure smooth operations across the complex EBIF domain. Here, she notes, it’s critical to make a choice as to whether the coordinating vehicle will be Canoe or Comcast through its Comcast Media Center.

But, to whatever degree programmers avail themselves of the interactive opportunities created by the cable industry, it’s likely that the dominant theme in efforts to drive ad revenues will revolve around strategies that aim to enhance consumer engagement with programming. “Transmedia is the new buzz word of the entertainment industry,” says Bob Knorpp, president of the Cool Beans Group, a marketing and advertising consulting firm. “It has become a line item for them.”

The term encompasses virtually anything that might be done to enhance the content of a linear TV program, including soap opera-like back stories of characters in the main program story line, extra elements to the main story that can be viewed online and on mobile devices, games, support for social communities and much else. To many, the real interactivity that matters is the social interaction that occurs among people who are drawn into the extended programming experience.

“ITV is a total red herring,” asserts Gabe Zichermann, CEO of Gamification Co., a developer of marketing strategies that use games to develop and promote brands. “True interactivity will be around people interacting with each other, not with the program itself.”

To the extent transmedia provides a broader narrative across multiple devices in support of this interaction, the value of brands and any games that are built around those brands is enhanced, Zichermann adds. “Transmedia seems to be extending properties to other platforms, including print as well as mobile and online,” he notes. “It’s about choosing your own adventure. The consumer is interested in story development.”

Indeed, notes Kirk McDonald, former president for digital at Time Inc. and now president of
PubMatic, a digital media advertising firm, “each Facebook user is now a brand, and each brand surrounds itself with content. They reinforce their self images and reflect their values through the content they associate with.”

While automating advertising placement and measurements is essential, McDonald adds, the starting point is to build brands through the viral force of socialization. “We have to figure out how to build brands,” he says. “We have to allocate dollars to make the brand the topic of conversation at the virtual water cooler and to drive more interaction around the brand in real time.”

This requires a marriage of art and science to drive engagement, he continues. “You automate control of your advertising inventory, your audience data.” The feedback helps in the creative enterprise of making content more engaging.

“Great story telling is the basis of what becomes social,” adds Valeria Maltoni, principal in Conversation Agent, LLC, which helps brands develop viral marketing campaigns. “Content [as a vehicle for driving greater engagement and higher ad revenues] is a huge missed opportunity.”

By “unbundling” great content into constituent pieces programmers can “curate the content to invite people to participate” and then track how people engage, Maltoni explains. “You see what people are looking at and conversing about, and that is where advertising comes in.”

In this new environment thoughts of driving ad revenues for programs in the online environment as an independent digital enterprise are giving way to a return to a TV-centric strategy that views digital as an adjunct. “Online video as a sub-$2-billion revenue marketplace is not all that interesting,” says Terence Kawaja, founder and CEO of LUMAS Partners, a firm devoted to consulting on media transactions.

But, Kawaja adds, it’s not easy to bring online advertising into the campaign mix with linear TV. “The reality is the whole reason people are investing their time now on the [online] video side is to capture money on the linear side,” he says. “Obviously it’s a work in progress. The ability to launch a campaign is easy and relatively cheap in traditional media but hard online. Online has to consolidate.”

Rishad Tobaccowala, chief strategy and innovation officer at Vivaki, a marketing catalyst arm of the Publicis Groupe, agrees. “You have to recognize the economics of most marketers are not built for the Internet,” Tobaccowala says. “There are too many steps and too many players in the process. There’s not going to be the great digital age that everyone speaks about. Just the increase in TV advertising for 2011 and 2012 will be two thirds the size of the entire online display marketplace.”

He adds: “the divide between analog and digital is a stupid divide. The way we look at it is as a whole. TV is the critical aspect and you put assets around it versus a model that starts with the Internet and waits 15 years for something to happen.”

But online is crucial as the support ecosystem for the socialization, game playing and back-story augmentation that represents the new template in TV program development. As Anthony Zuiker says, “We’re going to have to build a new white-label algorithm for creating TV programs into every project, regardless of whether or not a program is canceled. It’s the starting point, not the eventual end point of a successful show.”