Misspend Billions, Repeat

You’re not really going to do that again, are you? I remember having a conversation with a few colleagues last spring. We were amazed when, even in an economy that was already showing signs of slowdown, the broadcast networks once again cleaned up. $9 billion in the upfront. Plus another $8 billion to cable.

Think about this year’s upfront for a minute (it’s not that far away). Can you imagine another $9 billion changing hands in just a three-week period or so — in this economy?  How foolish/out of touch/tone deaf/technology-ignorant/lazy is that going to look this year, when banks are getting bailed out by the feds left and right and thousands are getting laid off each month?

Not to mention the sorry state of the TV broadcast business these days, when there hasn’t been a true hit in years, and shows that reach just 10 million viewers get people excited (fyi: there are roughly 300 million people in the U.S.). Sure, The Mentalist and NCIS are kicking butt. Those shows are perfect if you want to reach my dad like 40 times. Just so you know guys, advertise all you want; he’s not dumping his Bic disposables for Mach3 razors at this point.

Certainly contributing to the lousy ratings is the fact that DVRs are now in 30 percent of TV homes. By the way (humor me with a quick aside here), who swindled buyers into paying for anything other than live TV ratings? I’m not one to articulate the deep-dive differences between C3, Live plus 7 and whatever other wonky hybrid-industry metrics you’ve come up with. But what I can tell you is that, based on my research, people with DVRs watch zero-point-no-percent of commercials when playing back recorded shows. How did I come by this knowledge? Because I live in the real world. Because like you, I’ve listened to people all my life complain about commercials (end of digression).

Anyway, given all that negative momentum in TV, coupled with the abysmal economy, are you really going to be able to justify investing billions in a continually diminishing product? Plus, can anyone really feel comfortable planning anything long-term (which the upfront is all about) given the uncertainty of the market?

I’m not telling anyone to abandon TV. I love TV. TV ads can be really powerful. TV is in every house.

But you know what’s also in nearly every house? A computer. And consumers, as you’ve likely heard, use them a lot. More than 5 percent of their time, which is about the percentage of dollars the Web gets.

My suggestion is this. You big brand, TV-loving advertisers, you packaged goods guys who’ve been slow to embrace digital so far. Take 15 percent of your TV dollars (assuming you’ve already cut your budgets down to recession-appropriate size for 2009), and put them on the Web this year. And then go crazy. You can have a field day, and you can help reinvent a messaging medium.

 
If any of the industry’s famously alphabetic advertisers — say P&G or J&J — took 10 or 15 percent of their TV budgets online, it would be like spending Euros in America. (OK, more like the Euro of six months ago.) My point is, you can get a lot for an online buck these days.

I have some experience with this. I was on the digital media side of things back in the early part of this decade, during the last recession (which almost seems quaint now). I worked on Dell, a client who was suddenly selling tons of PCs online and was therefore spending millions on the Web during a down market. We were able to negotiate hard. We executed big splashy mega deals. And even if sites had delivered every single impression we’d paid for, if sales weren’t good enough we just asked for more inventory, and we got it. In a word, we were annoying.