At the recent D2C Convention, I presented a Masters Series session entitled, Trend Spotting: Benchmarking the Present and Predicting the Future of Marketing. My intention was a simple one: to synthesize the latest statistics, forecasts, and best practices in marketing from over 100 different sources to save my audience time and to provide insight that will help you today and in the future. Over the next six weeks on consecutive Tuesdays, I will be blogging about each of a half-dozen marketing channels and topics. Those broad categories are:
- Social Media
- Mass Retail
- Attribution: How Do We Define Success?
Given the presentation was limited to an hour, I have had to limit my focus, but hopefully the learnings gleaned will prove helpful to the reader.
Today’s Marketing Landscape
As marketers are well aware, today’s omnichannel marketing landscape is incredibly complex. To be clear, omnichannel—as outlined by Tech Target—is defined as, “A multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks-and-mortar store.” This multifaceted approach is being driven by consumer behavior where the power has now shifted from marketer to consumer, and whereby the latter decides the time and place with which to engage with a brand. Our challenge is to meet them when and where they choose to do so. To further complicate matters, marketing is in a continuous state of flux with new opportunities and technologies constantly emerging.
All of this is to say that both consumers and marketers have an overwhelming amount of choices with which to choose from to accomplish their aims. Consumers want to make an informed purchase decision, and marketers need to find the optimum media mix that enables them to reach those consumers and meet their financial goals.
Offline: Here Lies Mass Opportunity
Offline, which includes both broadcast television and radio, may not be as new and sexy as digital marketing, but it still plays a vital role in the marketing mix. According to the Nielsen Total Audience Report, Q1 2016, the number of domestic adult users of AM/FM Radio is a gargantuan audience of 240 million. Not far behind is Live+DVR Time-shifted TV, which attains a monthly audience of 226 million. You might be surprised to learn that both of those total audience numbers eclipse App/Web on a smartphone, which registers 191 million monthly, and Internet on a PC, which weighs in with an audience of 162 million. The breadth and scope of the radio and TV audiences explain in part why so many e-commerce businesses are now using the mediums to build awareness for their offerings—radio and TV remain the largest platforms for reaching the broadest number of people.
Having said that, there are indeed generational shifts that are occurring with regards to media consumption habits, according to the same Nielsen report. In the chart below, for example, you can see how the percentage of time spent with various media types varies by age group. While TV dominates all categories, it is especially acute among older audiences such as the 50+ demographic, which spends some 59 percent of their time with TV. Interestingly, across all age groups, 17 percent of media consumption time is spent with radio. Meanwhile, Millennials and Gen Xers spend significantly more time on their smartphones than the youngest and oldest of the represented groups.
While it may be true that radio and TV rule in terms of total audience size, change is afoot. Overall TV viewership is declining slightly, but still leads with average daily viewing at four hours, 31 minutes. The slight decline is a result of younger viewers changing media consumption habits, as TV viewership has actually increased slightly among boomers and older viewers. So why is there a prevailing belief in some camps that TV and radio audiences are declining precipitously? Well, there are indeed looming threats. Among them: about half of U.S. households have a video on demand service such as Netflix or HULU, and Nielsen estimates that the former has caused 50 percent of the drop in TV viewing over the course of 2015. This should be worrisome to TV advertisers because content such as Netflix allows viewers to ignore our advertising and marketing messages altogether.
Meanwhile, domestic cord cutting—that is the practice of ditching cable or satellite for a la carte services—is expected to rise to nearly 22 out of 100 U.S. TV households by the end of the year, according to Convergence Consulting. What’s behind this trend? Yahoo Finance reports that the average cable bill has reached a record $99. That means the average cost of pay-TV has risen by 39 percent since 2010, and that’s for a whole lot of excess programming not a lot of people watch. With a smart TV integrated with technology like Apple TV, viewers are doing the math on how much a la carte programming they can buy with that kind of money. This no doubt explains why you are now seeing commercials from the likes of the Dish Network offering “lean” programming packages.
Where else are eyeballs roaming? It is probably no surprise to discover that smartphone viewing is up 60 percent from 62 to 99 minutes a day on a year-to-year comparison basis, according to Nielsen—while other parties report even higher average usage. All you have to do is look around you and you’ll see evidence of this as people stare at screens while they almost get run over by cars. I recently saw a couple on a date completely ignoring each other while they stared at their phones, a scene being played out everywhere. The other way this so-called second screen behavior is having a huge impact is that nearly nine out of 10 smartphone users now say they use the devices while watching TV and about half do so daily, according to Nielsen. Again, simply look around your living room. How many of you observe yourself or a member of your family engaged in this behavior while the TV is on? The good news is that among the behaviors that second screen users are engaged in while watching television is shopping. Nielsen reports that 25 percent of smartphone users enhance their TV experience by shopping with their smartphone, while 44 percent of tablet users do the same.
So what conclusions can we draw? While radio and TV remain the most mass of mass media, choice threatens the interruptive ad model. DRTV no longer necessarily produces an instant sale. Instead it acts as a vehicle for producing awareness, helps facilitate curiosity and consideration, and primes the sales funnel. Marketers should look for ways to bridge advertising models with emerging consumer behavior, such as some of the attempts by Coke Zero and Shazam to bridge the gap between screens by inviting viewers to Shazam the commercial spot on their smartphone and receive a coupon for a free soda. Such tactics are but one way to create relevancy amid an offline advertising landscape that is clearly shifting and changing.
Next week in part 2 of this blog series, I’ll explore online advertising trends.