DraftFCB | 2010 Agency of the Year

Television 2011

// November 22nd, 2010 // No Comments » // Uncategorized

It’s that time of year when the television networks have strutted their new seasons in front of all of us, promising bigger, brighter, better things for the year ahead and l uring us in with bright, shiny tidbits from upcoming shows. We in turn pretend that those snippets, carefully carved to give an upbeat impression of what’s in store, are indeed representative of the bounty Kiwi audiences will be served in 2011. If the reality is a little different, well, that’s showbiz. A little smoke, a few mirrors, hey presto!

But what can we actually expect by way of television in 2011?

First, let’s deal with the television event of the year: the Rugby World Cup. If 87% of New Zealanders tuned into the northern hemisphere coverage in 2007, the networks forecast of 3.7m viewers tuning into 2011 coverage is not unreasonable. If ever the consumer electronics industry was going to convince New Zealand to purge their households of CRT sets in exchange for modern flat screen technology, this is the moment. Coverage will be across all networks; Sky TV (all 48 matches), Maori TV (16 matches), TVNZ (7 matches) and TV3 (7 matches). The networks are in market now selling a Family of Four sponsorship; in February spot packs will be released to the market.

Elsewhere in 2011, stand by in late January for the relaunch of the rebadged, retargeted FOUR. The onscreen logo changes will happen quickly, the audience migration not so much. And (since even our younger demographics tend to resist change) expect a noisy backlash on the social networks as the newly-disenfranchised C4 fans vent their spleen. In our view, it will take most of 2011 for FOUR to attract its newly-desired audiences, especially given the channel’s current Number 12 position on the Sky remote.

For the other free-to-air networks it’ll largely be business as usual. TV3 will be discarding some of its age-inappropriate programming wardrobe as it starts dating older audiences (25-54 rather than the slightly scandalous 18-49); Television One will disassociate itself from Breakfast hooliganism and assume a more dignified posture (whilst trying to act a bit younger than its appearance would suggest); TV2 will continue its populist American-centric ways (but without the late, lamented LOST); and Prime will continue its dalliance with British and Australian content, mixing the eccentric, the eclectic and the entertaining.

In our view, none of those minor tweaks will have much impact on relative ratings of the networks; there are no game-changing shows on current US or UK channels, so we expect it to be largely business as usual in 2011 for the Free To Air networks.

Our two taxpayer-funded non-commercial channels (TVNZ6 and TVNZ7) are almost past their use-by date –their funding is due to run out at the end of 2011, and their initial purpose (to encourage viewers to go digital) was essentially neutered when the channels were made available via the Sky platform. Current thinking is that TVNZ6 will become a commercial youth channel, while TVNZ7 will remain a non-commercial news & current affairs channel, perhaps structured similarly to the Radio New Zealand model. We’re not sure that the youth channel notion is necessarily the smartest use of the facility (isn’t MediaWorks TV abandoning that space for greener and more commercially lucrative pastures?) but TVNZ7 represents the possibility of an independent news voice – although to achieve that lofty ambition could well require separation from the TVNZ newsroom.

As for MediaWorks TV’s two Freeview-only channels, TV3+1 and C42 – their contractual purpose has been served for minimal programming outlay. In our view they may well be sacrificed to serve the greater good at some future point (if our economy continues its glacial recovery).

We should also note the steady expansion online by our leading broadcasters. iSky will launch before the end of this year, bringing Replay Television to many of its Basic Tier channels (and streaming live sport and news in Multi-Room households as well). TVNZ On Demand has recently added a higher quality video streaming option to its portfolio; and MediaWorks TV continues to increase its online content.

We also see TiVo ramping up its CASPA download service with more programming (including 3D); and MySky HDi is slated to increase its web-sourced content in the near future as well. And our roundup of online television doesn’t even take account of content delivered through a steadily-increasing smorgasbord of hardware such as PS3, Xbox360, Apple TV, Sony Play TV, Google TV, etcetera etcetera.

The New Zealand television industry has enjoyed good audience numbers in 2009 and 2010, thanks to the lingering effects of the economic downturn. Some revenue growth has been in evidence this year (although those increases were over and above the truly dismal earnings in 2009). We expect television earnings to continue their slow recovery in the first half of 2011 in line with economic expectations.

The Mobile Internet grows in importance

// November 22nd, 2010 // No Comments » // Uncategorized

There’s no shortage of pundits willing to predict that connection to the internet via mobile phone is The Next Big Thing – but many of this year’s oracles are offering up sacrificial statistics that reinforce their prognostications.

In March, Nielsen USA gazed into its crystal ball and announced its expectation that mobile phones will hit the sweet spot by the end of 2011. At that point, Nielsen’s projections indicate that more than half the cellphones in use in the USA will be smartphones. Nielsen’s numbers were based on a combination of current penetration (21%), smartphone growth rates and consumer intentions.

A month later, Mary Meeker, head of global technology research at Morgan Stanley, presented her firm’s numbers which suggested that within five years there will be more mobile internet users than desktop internet users.

What’s stopping users making more use of mobile phones to connect to the online world? Three primary factors, according to a January 2010 UK Brandheld study:

1.     Perceived costs of mobile internet use (considered too expensive in comparison to landline-based connectivity)

2.     Complexity of the technology – every model has different systems and processes for web access; and even applications developed for popular devices (eg the iPhone or Android) operate inconsistently

3.     Underwhelming user experience – relatively few websites are optimised for mobile (and even those that are cannot cater to more than a few of the different smartphones currently in use)

All of these are roadblocks, but not insurmountable barriers, provided there are compelling reasons to go online whilst on the move. There’s unlikely to be a single killer application which provides that motivation – just a steadily increasing range of capabilities and services that take advantage of the mobile platform.

It’s easy to dismiss these predictions as a long way away for New Zealand mobile users. And yet our smartphone penetration at the end of 2009, 20% according to Nielsen’s Panorama research, was only slightly below the US number.

So far, Kiwi mobile web usage seems rather limited. Despite the power of the devices in our pockets or purses, our mobile web browsing averages less than six minutes a day, according to the new Nielsen Mobile Market Intelligence service, and just 23,456 of us are accessing the web via mobile on a daily basis.

Factor mobile internet into your future planning. It won’t happen overnight, but it will happen.

New Zealand by the numbers

// November 22nd, 2010 // No Comments » // Uncategorized

$2400: nightly room rate at the Novotel Hotel in Christchurch during the Rugby World Cup

40,000: cumulative total of students since The University of Auckland Business School Short Courses began in 1996

9,000: year on year increase in 15+ daily national readership for the NZ Herald, according to the Nielsen National Readership Survey for the year till September 2010

34,940: excess of births over deaths in the year ended September 2010, according to Statistics New Zealand

15,645: number of new photographs depicting Auckland scenes and events from 1935 to 1944 recently added to Auckland Libraries’ Heritage Images Online database

80,000: estimated number of Playstation 3 owners in New Zealand, according to NZGamer

82%: percentage of web visitors who will click on a video if they see one, according to Kiwi online video production startup 90 Seconds

5,000: number of new state and private rental houses needed in Auckland each year for the next fifteen years to accommodate population growth

1500kbps: new, higher speed option for TVNZ Ondemand video streaming

2.0%: rise in household spending for the March 2010 year, the lowest percentage increase since the year ended March 1993 (up 1.8 percent), according to Statistics New Zealand

The Greying of Facebook

// November 22nd, 2010 // No Comments » // Uncategorized

If we needed any proof that Facebook is growing up, we need look no further than the news that UK broadcaster ITV has just launched a new social gaming app called Corrie Nation. And yes, it’s based on the oldest British TV soap (celebrating its fiftieth anniversary soon), the evergreen Coronation Street.

The new game will parallel the TV show, maintaining relevance to current storylines and revisiting what the producers are calling “unforgettable Corrie moments”. In its first few days the application had already attracted 16,172 active users, reflecting the popularity of the Rovers Return and its patrons.

When the soap suds start flowing on Facebook, and blue rinse is clearly evident in the social sphere, does that mean it’s time for movers and shakers to move on to another sensation du jour?

No, not at all. Because Facebook is a community of a trillion tribes, all largely invisible to the casual browser (unless you actively search for a particular topic), cohabitation with a diverse range of completely dissimilar interest groups is a given – and a significant benefit for marketers aiming at specific niches (especially those who opt to advertise on Facebook).

Using our Coronation Street groupies as an example: if you wish to target those who identify strongly with the Street (perhaps because you’ve successfully marketed to viewers of the show on television), you can specify “Coronation Street” as one of the keywords within your targeting parameters, along with area, age and gender. Facebook’s software will target your ads only to those whose profile includes that keyword.

So worry not that Facebook might be getting old and tired. Instead, celebrate – may a billion niches bloom!

A Peek Behind The Paywall

// November 22nd, 2010 // No Comments » // Uncategorized

Earlier this year, when Rupert Murdoch’s News Corporation decided to lock the content of their leading UK papers The Times and The Sunday Times behind a paywall, available only to fee-paying subscribers, there was widespread interest around the world. The papers were available for one pound for a day’s access or two pounds for a week (with some introductory offers out there as well).

Would the experiment work? How many would pay to read what they’d previously been able to access for free? Would the revenue gains offset the loss of publicity for the papers when their points of view on the issues of the day were no longer available online?

Other publishers wanted to understand the outcome, because it directly impacted on their own online business models. And advertisers wanted to know details as well — would it be worthwhile placing advertisements alongside the editorial content behind the paywall? Would the numbers make sense.

Now the first results have been revealed. According to News Corporation, there were 105,000 customer sales of the online editions since July (when the paywall went into effect). That figure includes all paid-for sales and are cumulative – those who paid a pound to access the site on one day and then did so again would be counted twice.

News Corp also said that 100,000 subscribers to the print editions (who get access to the websites for free) had also activated their accounts.

Has the exercise been worthwhile? From a purely monetary perspective we’d have to say no – the revenue earned is unlikely to have offset the costs involved in setting up the paywall, not to mention the online advertising revenue lost as a result.

From a strategic point of view, however, we’d have to say that the jury’s still out – if News Corp can convince enough other publishers that the paywall plan has potential, then the game could be changed. We could see a movement towards paid access for traditional media content – although the implications of that change would be far-reaching.

Now Pictures Are Worth A Thousand Keywords

// November 22nd, 2010 // No Comments » // Uncategorized

Google is rolling out yet another enhancement to its search results – one that threatens to disrupt current search paradigms just as much as (or even more than) Google Instant already has.

The new service is called Google Quick View, and it’s now rolling out in the UK (after having been tested in the US).

As the name might suggest, as you hover your mouse over a particular search result, Google Quick View will serve up a miniaturised preview of the website page to which the search entry relates. Suddenly, the desirability of your website will depend not just on the words used to describe it (the basic building block of search engine optimisation) but also on how the site actually looks. Pictures, not words, may become a whole lot more important than they currently are in search strategies.

You may not think this is an issue for your organisation – no doubt you’ve devoted a huge amount of time and effort to developing an attractive home page for your website. Unfortunately, Google doesn’t just link to home pages – in fact, deeplinking (taking searchers directly to a relevant page deep within your site) is a far more typical Google response to a search query. Are all your pages masterpieces of design and clarity of thought, ready to capture the casual viewer in the fraction of a second that her mouse hovers over your listing? Ours neither.

From a consumer perspective, this new capability enables far more websites to be considered and selected/rejected more quickly, leading to increased satisfaction with the searching process (and more comfort with the eventual selection).

From a marketer’s perspective, the result could similarly be beneficial – more happy prospects landing on your website, having first had the opportunity to reassure themselves that they’re coming to the right place. The new Quick View offering, however, does increase the pressure on webmasters and designers to ensure that every page is a winning page – and that can be a challenge for the uninitiated.

Ah well – if it was easy, everyone would do it.

Social Proof

// November 9th, 2010 // No Comments » // Uncategorized

Consumers are turning for buying advice to their friends, associates and even total strangers connected through social media — and making decisions based on what’s being said, for good or bad. 1.92 million Kiwis now look to their fellow Internet users for opinions and information about products, services or brands, according to the New Zealand Social Media Report (Nielsen, July 2010). Study after study has shown that consumers trust their friends (and their friends’ friends) more than anyone else when it comes to making a purchase decision.

Do we really buy stuff (or reject it) just because that’s what our friends have done? Are we really so concerned about what our peers think, or is that just a teenage obsession that dwindles with maturity? Turns out that other peoples’ opinions can shape our own, no matter our age.

Robert Cialdini, Regents’ Professor of Psychology and Marketing, Arizona State University, has spent 30 years studying the ways people are influenced. And one of the six key principles of persuasion, found in Professor Cialdini’s best-selling book on the topic, ‘Influence: Science and Practice’, is called Social Proof. According to that principle, when people are uncertain about a course of action, they tend to look to those around them to guide their decisions and actions. They especially want to know what everyone else is doing – their peers and indeed other consumers. For example, as shown by a 2009 Duke University study, when a restaurant identifies its most popular item on the menu (as chosen by patrons), that item immediately becomes 13 percent more popular. The same principle is evident locally, on Trade Me: items on which anyone has placed a bid are much more likely to attract views and other bids than items with plenty of watchers but no bids. And, of course, Trade Me’s Feedback system provides dramatic social proof of our customer service performance, good, bad or ugly. And Social Proof is part of what makes Amazon so successful – consumers are invited to rate and comment upon any item, sharing their positive or negative opinions with everyone.

Other recent research supports the argument. According to CompUSA and an iPerceptions study,

“63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews.”

It’s not that consumers won’t make up their own minds – they certainly will, on topics and about products with which they’re familiar. But if they’re venturing into unknown territory – buying a gift for that special someone, investing in a new technology or planning a trip to terra incognita – then it’s both smart and prudent to seek advice from those who have gone before. Pre-internet, that might have required a trip to the library, a visit to a travel agent or a series of phone calls searching for information. Nowadays, we’re only a couple of degrees of separation and a click or two away from a rich storehouse of specialist knowledge – our friends, their friends and their friends’ friends.

So how as marketers can we make Social Proof work in our best interests? By providing the sharing tools and enabling our customers to rate and review our stuff – and then talk amongst themselves. Yes, it means we’re making ourselves vulnerable, and if we’re failing at any aspect of our operation, those flaws will be magnified. But that’s today’s reality anyway. We need to get over it. So how well are Kiwi etailers getting into the swing of things with online reviews? Not very well, according to the latest stats. If we review the Top Ten NZ Online Retailing Sites (as identified by ComScore, 3 months average at Sep 2010, ranked by visitor numbers), here’s how they stack up:

In comparison, the Top Ten US retailers (Internet Retailer, ‘Top 500 guide’ 2010, ranked by annual web sales) really get it:

Clearly local retailers still have a little way to go to achieve “Best In Breed” when it comes to Social Proof.

The Meme of Middle Earth

// November 9th, 2010 // No Comments » // Uncategorized

When actors’ unions decided to take a stand over “The Hobbit”, they weren’t just clashing with a corporation — they were going up against a meme. Resistance was always going to be futile. The term “meme” was coined by Richard Dawkins in 1976 to describe “an idea, behaviour, style or usage that spreads from person to person within a culture.” Think of a meme as a belief that goes seriously viral. Once deeply entrenched in the psyche, memes are notoriously difficult to change.

The meme in this case? That New Zealand is Middle Earth.

No, we don’t mean that New Zealanders see themselves as J R R Tolkien’s delightful creations, the hobbits (although many of us do live the bucolic lifestyle beloved of those diminutive creatures); nor, other than every three years at election time, are we usually engaged in life-threatening battles between good and evil. And yet, thanks to the stunning efforts of Sir Peter Jackson and his colleagues during the marathon filming of the “Lord of the Rings” trilogy, New Zealand has become heroically interwoven into the saga of Middle Earth.

First there are the tourism implications. Our breathtaking landscapes (few of which have been witnessed in the flesh by most Kiwis) are now part of the legend; and destinations such as Matamata, never previously considered a mecca for international visitors, have been transformed into firm favourites for those interested in matters Hobbitual. Still, Middle Earth is more than just a tourist lure. It’s become a matter of national pride. We all feel invested in the success of the LOTR phenomenon. As Billy Crystal observed when hosting the 76th Academy Awards (dominated by LOTR’s final segment, “Return of the King”): “It’s now official. There is no one left to thank in New Zealand.”

Scrape away the veneer of worldliness and you’ll find a self-conscious nation which still sees itself as a minnow in a global pond; Lord of the Rings represents one of those rare moments where we can say “See — we may come from the back of beyond but even so we’re worldbeaters.” Sir Peter Jackson, scaling his own summits whilst clutching our national flag, is a New Zealand hero to compare with Sir Edmund Hillary.

The underlying theme of the Lord of the Rings, where a small, little-known fellowship can triumph over the forces of evil despite overwhelming odds, perfectly captures the Kiwi ethos. No wonder we identify so strongly with the saga. Given that context, the efforts of the actors’ unions, regardless of the merits of their objectives, inevitably saw them positioned as a desperate Gollum, hissing “My precious” whilst attempting to wrestle the ring from the RingBearer. That they were led by the old enemy from across the ditch only reinforced the metaphor.

We recoiled, we booed, then finally we cheered when the evildoer was consigned to the fiery depths.

Not every strongly-held belief qualifies as a meme; but for those that do, it’s an effective defence against contrary thinking. Any marketers seeking to highlight the “New Zealandness” of their brand really need to do their homework when it comes to understanding Kiwi culture and attitudes – to communicate successfully you’ll need to embrace our entrenched opinions rather than battle against them.