Tuning Out TV
Advertisers are using a variety of methods to grab consumers' attention
The nation's top advertisers and network television executives will invade New York City once again this week for what has become the TV industry's most celebrated exercise in failing up: the annual "upfront" market. That's when the Big Six--ABC, CBS, NBC, Fox, UPN, and WB--unveil their new fall schedules to advertisers, who then pony up billions of dollars to prebuy commercial time that costs more and delivers less. Even though network audiences continue to dwindle, the upfront is expected to surpass last year's record haul of $9.5 billion. While the take probably won't represent a double-digit increase like last year's 15 percent jump, it will give the networks all the excuse they need to boast that nothing succeeds like a 30-second TV spot.
Yet behind all the spin about the new shows--most of which will be canceled before you can say My Big Fat Obnoxious Fiance --the networks are painfully aware that it is they who are buying time. Under assault from cable, DVD s, and the Internet, CBS, NBC, and the others can't come close to delivering the crowds they once did. And even when hit shows like The Apprentice and CSI do attract millions of viewers, commercial-zapping digital video recorders like T iV o are waiting in the wings to crash the advertising party. "Advertisers aren't willing anymore to simply put all their money into 30-second spots and cross their fingers," says Kathy Delaney, executive creative director of the ad agency Deutsch, which handles Revlon and Mitsubishi. "Those days are gone."
The new reality of TV is that many of the country's biggest advertisers, including Coca-Cola, General Motors, and Procter & Gamble, are finding alternative ways to put their goods and their messages in front of consumers, and they're doing it with some of the money that used to pay for prime-time television commercials. Revlon is running minimovies in theaters, American Express airs short films on its Web site, and General Motors' Hummer H2 gets almost as much face time as the crime specialists on CSI: Miami . In a March survey of the Association of National Advertisers, more than 40 percent of those asked said they planned to move part of their next-year ad budgets to other outlets, such as the Internet, outdoor advertising, product placement, cable, and special events.
Coca-Cola, the onetime king of the commercial, for instance, cut back its spending on TV ads from $269 million in 2001 to $189 million last year, according to TNS Media Intelligence/CMR, which tracks ad spending. In addition to online advertising, outdoor ads, and sponsorship of events such as the NCAA basketball tournament, some of that money is being used for the company's new Red Lounges. Located in two shopping malls so far, the lounges are essentially Coke-immersion zones where teenagers can play video games, surf the Web, sprawl on the red sofas, and--what else?--drink Coke. Aside from vending machine sales, which are easily quantifiable, it's hard to measure what these hangouts will do for Coke's bottom line. Not that Coca-Cola is concerned. "We want to be part of our customers' lives every day," says Katie Bayne, Coca-Cola's head of integrated marketing. "We want to connect with them where their passions are."
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