Nielsen's ratings change sends an ominous signal to cable, and only NBC appears to be listening

Implications: From DVRs to audio portability to the rise of the Internet, all signs have been pointing to downward trends in TV ad revenue.  And it will just get worse, with social media and the power of consumer beginning to take hold. TV, print, and radio to innovate to maintain some ground, and only NBC appears to be getting the message.

Analysis:

I couldn't agree more with a poster to this article who said, "it is about time that Nielsen Media Research adjusted to the new millenium to reflect the viewing habits of consumers."  Too many trends run counter to this old millennium view, including:

• the onset of DVR technology
• the portability of video onto mobile devices, and the growth of mobile as an entertainment media
• the growing ubiquity of video technology on the Internet
• the shift of eyeballs from traditional media, as television, magazines, and radio to the Internet
• social media, including the viral passage of marketing messages from consumer to consumer
• the growing power of the customer over traditional brand development

 

I was at the Shop.org Annual Summit conference this weekend, where David Weinberger, author of The Cluetrain Manifesto and the recent Everything is Miscellaneous, delivered one of the keynotes.  In his address, he spoke about the old marketing strategy, with old marketing defined as an outward push from a closed organization of messages onto the consumer.  Times have changed, and new marketing, with personalized, consumer-pulled messages from open companies beginning to take shape. 

 

In this new world, and we are at the very beginning of that world, consumers will fast forward through traditional commercials, and, not only will we not be able to stop them from doing that activity, we shouldn’t even try.  We’ll just anger them, and they’ll besmirch our brand throughout the consumer-controlled blog boards and social networks.

 

What should cable television do?  Accept and adapt to this new medium, carving partnerships as NBC has done with Amazon.com and via their recent announcement of free web content.  They should embrace, test, and provide platforms for new ad models, as long form advertisements or matching relevant ads with content by AdapTV.  They should seek innovative platforms, as interactive TV.

 

What should brand marketers and advertisers do?  Drastically change their mindset.  Remove tired, old CMOs from their company, and replace them with innovative marketers who understand the importance of engaging in a conversation with customers.  They need to understand how to leverage the community to spread words instead of traditional media.  They need to provide more options for the consumer and the opportunity to pull that content, instead of pushing it all. They need to shift dollars to the Internet, which is rising at a meteoric rate as all other major media sags, but still only rates 7% of the total advertising budget.  They need to know how to play in the mobile space, following Google’s likely lead in a new mobile advertising platform or OS.

 

There is no doubt that this change in marketing and advertising places more control in the hands of consumers and less in the hands of television, radio, or print.  For a savvy marketer in touch with his or her customer, there is a great opportunity to reduce marketing costs.  For  cable, ad revenues will continue their slide.