New York, NY (March 22, 2006) - A new survey, released today by the Association of National Advertisers (ANA) and Forrester Research, Inc. (Nasdaq: FORR), found that 78% of advertisers feel that traditional television advertising has become less effective in the past two years. The survey also found that marketers are exploring emerging technologies to help bolster their television advertising spend. The joint survey asked 133 national advertisers about their attitudes towards TV advertising and what impact new technologies, such as digital video recorders (DVRs) and video-on-demand, will have on their TV advertising budgets. Those surveyed represent more than $20 billion worth of advertising, including marketers from Charles Schwab, Colgate, Dunkin' Donuts, Johnson & Johnson, Mattel, Pfizer, and Verizon. "As DVRs look to climb above 30 million households in the next three years, advertisers are finding themselves forced to reconsider their media mix," said Josh Bernoff, Vice President, Forrester Research, who presented the findings today at the ANA Television Advertising Forum in New York. "Television networks continue to publish research that traditional TV advertising is potent as ever, but national advertisers aren't buying it and are seeking alternatives to enhance their budgets and move them beyond the customary 30-second spot." Key highlights of the ANA/Forrester survey include: - Almost 70% of advertisers think that DVRs and video-on-demand will reduce or destroy the effectiveness of traditional 30-second commercials. - When DVRs spread to 30 million homes, close to 60% of advertisers say that they will spend less on conventional TV advertising; of those, 24% will cut their TV budgets by at least 25%. - While 55% say that their top executives are closely watching changes in TV advertising, most advertisers have not experimented with advertising on DVRs (49%) or video-on-demand (44%). - Eighty percent of advertisers will spend more of their advertising budget on Web advertising and 68% of advertisers will look to search engine marketing. - Advertisers are also looking at alternatives to traditional TV advertising and will spend more of their advertising budgets on: branded entertainment within TV programs (61%); TV program sponsorships (55%); interactive advertising during TV programs (48%); online video ads (45%); and product placement (44%). - Ninety-seven percent of advertisers agree that the TV industry will need new audience metrics - other than reach and frequency - to report commercial ratings, not just program ratings to effectively measure TV advertising. "The television industry as we have known it may be challenged on a number of fronts, but continues to attract a significant media investment by ANA marketers," said Bob Liodice, President and CEO of the ANA. "As new and traditional media alternatives compete more aggressively for a share of the media pie, and marketers look to improve consumer targeting, reduce costs and enhance accountability, television is aggressively responding. With technology-based advances in addressability, enhanced television options, Internet convergence (IPTV) and branded entertainment opportunities, television is likely to continue as the dominant part of the marketing mix." A full report on the survey findings will be available in the near future through Forrester Research (www.forrester.com). This is the third ANA/Forrester Research survey of advertisers on this topic. Previous surveys were fielded in 2002 and 2004

n study after study, consumers have stressed that, regardless of the channel, they’d rather not see ads. 

   - A 2004 study by Forrester found that when people watch pre-recorded television shows, they skip an average of 92 percent of the commercials

   - Most Internet users block pop-up ads, screen for adware, and safeguard against spam.

Confronting an ad-averse audience, how have major advertisers and ad agencies responded?  With more unwelcome, and in some cases underhanded, tactics – pandering ads, manipulative word-of-mouth campaigns, contracts that require a publisher to pull their ads if the publication prints a negative editorial about them... 

As marketers, we’re all in the same boat: how do you get heard above the din? Where do you go, what do you do, when the volume’s already at 10? Well, if you have the clout – and believe “He who succeeds shouts the loudest” – you:  

   - Run something shocking at a moment of maximum exposure

   - Try to control (i.e., threaten) the presumably impartial media

   - Claim it’s in all the service of branding

One naturally wonders: “This is how you gain trust?” These advertisers and agencies – what we’ll call legacy marketers – are resorting to tactics that not only ooze desperation but are ethically suspect.

Let’s give legacy marketers their due. They’re struggling to survive as media budgets get butchered. John Wanamaker’s oft-quoted adage about 50 percent of advertising being wasted pales in comparison to what they’re facing.

A recent study found that most of these advertisers don’t measure the impact of their television media budget; instead, they relegate it to a black box called “branding.” CEOs and CFOs aren’t fooled – to them, it’s a rationalization for inadequate measurement (branding as a “get out of jail free” card).

To add to the irony, these marketers aren’t fooling – let alone engaging – the public.

You can spend millions on monologues that swamp your target market, only to be muted by a single consumer voice on the Net. Many marketers fail to realize that they aren’t moving closer to dialoguing with consumers or learning how to thrive in a world where consumers are savvy and empowered, where information can be shared in seconds.

Just visit Amazon.com. Who do you think the consumer’s going to believe? The carefully selected expert on the dust jacket or opinions posted by peers?  Google away – third-party, consumer, and consumer group reviews are a breeze to find.

When brand messages are Tivo’ed, pop-up ads and irrelevant email marketing is tuned out, how do you justify your legacy budget? How does a marketer become more relevant?

Well, first, you don’t make a spectacle of yourself. The kid throwing a tantrum in the grocery store knows this is a way to garner attention. The problem is, it isn’t positive attention. The more shrill advertisers and agencies become, the more they employ aggressive/intrusive/obnoxious techniques, the more they distance consumers.

Under a constant onslaught of advertising, consumers have adapted, evolved. In order to process information, they’ve learned to be more vigilant, more adept in tuning out predatory messages. In short, consumers see a shark fin and steer clear. They have unprecedented access to information and are less likely to swallow what they hear from marketers. 

But marketers can take heart. Consumers and business-to-business targets have shown they will listen – and be receptive – to a truly relevant message delivered at the right place and time.

It's a simple, but true statement, that it's time to really get to know who you're talking to. Stop messaging that screams “Notice me”; choose messaging that means something to your targets. Start connecting with them.

Allocating media budgets based more on old habits and silos than information is part of the problem.

As the internet becomes an increasingly popular media choice and televisions soon get IP addresses, the potential and expectations for marketing relevancy will only increase. . 

There are marketing innovators to look to as models who don’t treat consumers like a cage of white mice.

Google's approach to advertising is an excellent  example. Google methodically creates systems based on relevance. Google knows that, in an age where consumers and business buyers have information so readily at hand, compelling marketing is pertinent marketing. Through being relevant to users searches, page editorial content or personal email content.

Few media outlets and brands have the trust to scan a user’s email for keywords and phrases and deliver back related advertising, but Google does. It speaks louder than words that consumers allow Google to look at their personal emails in order to get more relevant advertising. It is a testimony to that the fact that targets will listen if marketers will only take the time to be relevant.

Few marketers have made strides towards relevancy as assertively as Amazon.com and, to date, it has paid off dearly.

Marketing relevancy takes a lot more effort, but the rewards are in the results. 

                                                           NIRAJ KUMAR

                                                   PGDM 3RD. SEM