June 19th, 2001
Ads Are Here, There, Everywhere
By Michael McCarthy
Advertising award shows, reflecting the industry’s worship of 30- and 60-second TV commercials, may be celebrating the past rather than the future.
That’s on the minds of many ad executives as more than 9,000 gather this week for the industry’s Olympics: the 48th International Advertising Festival, known as Cannes Lions.
The TV commercial has been Madison Avenue’s main weapon for decades and still gets the lion’s share of attention. But what remote control channel surfing started, digital video recorders (DVRs) such as TiVo may finish, by letting consumers watch a show seamlessly without seeing ads.
Marketers see it happening and are already well down the road in exploring subtler—and harder to avoid—ways to reach the consumer.
Advertisers such as Target are embedding ad messages into, rather than around, TV shows such as Survivor. Ford took that one better to create its own show—No Boundaries—for its SUVs. BMW went Hollywood with a series of short films now showing on the Web at bmwfilms.com. Proposals are being considered to electronically insert “virtual” products into shows.
“The 30-second commercial as we currently know it is an endangered species,” warns David Verklin, CEO of Carat North America. “There will be 30-second spots. But they won’t cost $ 700,000, they won’t be shot on film, and they won’t be sacrosanct when they’re finished. They will be tweakable and evolvable.”
Product placement and sponsored shows are not new ideas. Advertiser-produced shows such as the Texaco Star Theater and product plugs within entertainment—and even news—programs were common in TV’s early days. But not all of that is remembered fondly.
Many ad critics are not pleased with this back-to-the-future trend. “What’s next? An entire sitcom set at McDonald’s?” demands Ralph Nader, founder of watchdog group Commercial Alert. Nader says advertisers are creating “primetime infomercials” with no line between entertainment and ads. “What these people on Madison Avenue don’t understand is, consumers will reach a saturation point. They’ll reach a point where they just tip over and go, ‘Yuck.’ “
But the “these people” Nader is talking about say they have no choice.
Bob Kuperman, CEO of DDB Worldwide’s New York office, says DVRs and the Web are “giving consumers a power they’ve never had before. And that’s very scary for the ad business.”
TiVo has only 200,000 subscribers so far. But ad agencies fear DVRs will become as common as VCRs. Based on the willingness of TiVo subscribers to “zap” commercials, the ad folks should worry.
“Anywhere from 50% to 80% of subscribers skip over most of the ads,” TiVo’s Rebecca Baer reports.
“I don’t know if the 30-second commercial is going away, but it will be one part instead of the main part,” says Kuperman.
This would be a good time for new ideas in the ad business. Zenith Media’s forecast of global media spending growth for 2001 was lowered this month to about 3% for $ 358 billion—zero growth after inflation. Robert Coen, director of forecasting for Universal McCann, says the U.S. media market, the world’s biggest, this year will have its weakest growth since 1991, with media spending up only 2.5% to $ 250 billion. As recently as December, Coen had seen 5.8% U.S. growth.
During the first quarter, U.S. spending dropped 5%, to $ 22.6 billion, as dot-coms imploded and big advertisers held back, according to Competitive Media Reporting (CMR). General Motors, the USA’s largest advertiser, slashed first-quarter ad spending 23.7% to $516 million, while Philip Morris cut back 28% to $ 347 million, says CMR.
A long reach
Awards shows such as Cannes are important to the stimulation of new ideas. The ad forms and content they honor set trends and are a catalyst for creativity—and the flattery of imitation.
Winning and losing here can make or break agencies and reputations. Winning work sets the tone for TV and print ads consumers will see in the next year.
As advertisers and agencies grope for the future, these shows must adapt, too, to reward what is truly most creative and most effective in reaching consumers.
“We have to redefine the entire area of communications and not look at it against traditional definitions like the 30-second TV commercial,” says Carla Hendra, president of OgilvyOne North America, who will serve as Cyber Jury president. A problem for her is separated judging for online and TV ads. “How are we going to talk about things like interactive TV, (which combines both)?”
Film juror Michael Lee, of Messner Vetere Berger McNamee Schmetterer/Euro RSCG, agrees shows must change as agencies experiment with different ad forms. “The Cyber (online) award is only 3 years old. Now, it’s as important as TV and print,” he says.
Cannes Lions organizers have no intention of being left behind. The festival likely will launch an award for direct marketing in the near future, says Roger Hatchuel, chairman.
Direct marketing, still the ugly stepchild of marketing, is growing fast. Direct mail, public relations, database marketing and sales promotion may not be as glamorous as making TV ads. But advertisers now spend an estimated 56% of their budgets on what the industry calls “below-the-line” activities, says Amy Blankenship of the Direct Marketing Association. Not unimportant now, direct marketing is highly profitable for agencies.
“Cannes Lions has been honoring above-the-line work (TV, print and online). It might be time to honor below-the-line, which is a major agency interest,” says Hatchuel. “As the business changes, we will change, too.”
Make it unavoidable
Advertisers are already changing the business with experiments to reach a broader audience and create “zap-proof” formats:
* Drive-in movies: BMW has struck gold with five Web films collectively called The Hire. The automaker tapped A-List talent: Madonna and her husband, director Guy Ritchie, and directors Ang Lee of Crouching Tiger, Hidden Dragon and John Frankenheimer of The Manchurian Candidate. More than 3 million people have watched the first three of the 5-to-7-minute mini-movies, the idea of ad agency Fallon Worldwide, Minneapolis.
“Right now, (the films are) as cost-effective as traditional advertising, Depending on how many people see them, it could be much more cost-effective,” says Jim McDowell, vice president of marketing for BMW of North America. Though The Hire is cutting edge, BMW also used traditional TV ads to drive traffic to the Web films. With no category for them at Cannes, BMW will enter the series in entertainment film festivals.
* What I really want to do is direct: Rather than buying ads on TV shows, some marketers look at creating the shows. Ford and ad agency J. Walter Thompson go into show business this fall with the program No Boundaries on the WB network. It won’t have traditional ads but will prominently feature Ford SUVs. “Consumers in Generations X and Y expects so much more,” says Julie Roehm, Ford car marketing communications manager. “You have to do something different to reach them. And that means anything other than a 30-second spot.”
Ford also co-produced three Web movies with Atom Films that starred Ford’s Focus vehicle. The cost: $ 80,000. “That’s less than our average TV spot,” Roehm says. But creating a TV show “takes deep pockets,” warns Burtch Drake, head of the American Association of Advertising Agencies.
* Show the product: You can’t zap a product placed within a show. That’s why advertisers such as Target, Reebok, Pepsi, GM and Anheuser-Busch would pay $ 12 million a season to sponsor CBS’ reality show Survivor. Their products are seen and woven into storylines by producer Mark Burnett. A trunk of goods from Target went to winners of a tribal competition, for example.
Warren Weideman of Park Avenue Productions, Los Angeles, says, “Product placement is a way to combat the threat of consumers not watching commercials. You tell me people watch TV commercials, and I’ll call you a liar. The only people who watch commercials are in the ad business.”
* Hoop-hop videos: Nike tried—but failed—to get MTV to air a 2 1/2-minute version of its “Freestyle” ad as amusic video on MTV. “We called it a video; they called it an ad,” says Nike’s Scott Reames. “It would have pushed the boundaries. So we understood.”
* Guerrilla marketing: Street-level marketing is the rage. Agency dRush, New York, is slapping stickers stating, “This is an ad for Jack Spade” on everything from fire hydrants to building materials to pitch the men’s fashion company. It’s also leaving “Esc” keys from PC keyboards on trains and buses to urge consumers to “escape.” Says dRush president Peter Drakoulias: “Advertising is not dead. The definition is just getting bigger.”
* Watch-and-buy TV: Advertisers want to create T-commerce, where TV viewers buy products while watching interactive shows. Consumers could, for example, click and buy the sweater Jennifer Aniston is wearing as they watch Friends. Revenue from interactive TV sales will total $ 4.3 billion by 2005, Jupiter Media Metrix predicts.
TV still stands tall
Such a Brave New World of advertising sounds cool. But Bob Isherwood, Cannes jury president for both Film and Press & Poster, doesn’t buy it. “TV is still the most effective advertising medium we have, by far.”
Print judge Alex Bogusky of Crispin Porter & Bogusky, Miami, recalls “experts” were predicting just recently that online ads would replace traditional ads. “Product placement is ultimately more annoying. If all the programming becomes commercials, that’s more annoying than 30-second commercials,” he says. Besides,
“Somebody has to pay for content. It’s great to get NYPD Blue for free. But if I have to pay $ 3.95 per episode, I might not be a happy consumer.”
International flavor of competition reflected in look at past winners
Started in 1954, the Cannes Lions advertising competition was inspired by the Cannes Film Festival. The two shows take place only weeks apart on the French Riviera.
The competition expanded beyond the TV or Film category to include Press & Poster print and outdoor ads in 1992, online Cyber marketing in 1998 and Media planning in 1999.
The Grand Prix is awarded to the best entry in each category. Players also compete for gold, silver and bronze Lion trophies.
August Busch IV of Anheuser-Busch and Gerald Levin of AOL Time Warner are being named 2001 Advertiser of the Year and Media Person of the Year respectively this week.