Message From Michael -- August 27, 2007

THE VICE VERSA ISSUE

IBM VS DELOITTE ON TV

CELEBRITY BLAMES VS. CELEBRITY WATCH

WORD OF MOUTH VS OTHER ADVERTISING

THE POWER OF CONSUMER GENERATED CONTENT

TRENDS TO WATCH

COCKTAIL CHATTER - WORLDWIDE



THE VICE VERSA ISSUE: I labeled this week’s MfM that because of the number of what sometimes appears to be conflicting and sometimes contradictory reports, studies and analyses that so often come out in the weekly media reports that I get.

IBM VS DELOITTE ON TV: The Internet rivals TV as a primary media source. Television still remains a core media activity. The first statement comes from the IBM Institute for Business Values. The second statement comes from Deloitte and Touche’s State of the Media Democracy report. The IBM report which covers the U.S., U.K., Japan, Germany and Australia, says two thirds of those surveyed (66%) reported viewing one to four hours of TV per day. That was only slightly more than the 60% who reported the same levels of personal Internet usage. The report says TV is “taking a back seat” to the cell phone and the personal computer among consumers age 18 to 34, and just as land line phones have replaced mobile phones in that group, cable and satellite TV risk a similar fate at the hands of the Internet. The Deloitte survey which focused on the U.S. says that even though consumers are doing more things from online searching and game playing to cell phone use, they are still watching television. In simple terms, they say, ‘it is always on.’ And even when they do go online, Deloitte says nearly half (46%) go to a TV website. The folks at Deloitte predict an increase in ‘participatory television.’

DVR’S: Both reports found some interesting anomalies in the use of DVR’s (Digital Video Recorders). The IBM report found that out of the quarter (24%) of U.S. respondents with a DVR, a third (33%) actually reported watching more television with a DVR. In the U.K., consumers used Video On Demand twice as much as they used their DVR’s. The Deloitte report found that it was the Generation X’ers and Baby Boomers using the DVR’s, rather than the Millenials. And the prime use was not so much commercial skipping (that came in third) but “season ticket” functions – being able to record an entire season of a show.

Footnote: A study by media investment company GroupM which is the parent company to many leading media agencies seems to take a middle road. It says in the short run, the Internet is expected to play a bigger role in driving advertising growth, especially from a global perspective, but also in the U.S. However, TV still remains the biggest influence in the advertising marketplace. TV is expected to account for nearly half (47%) of the GROWTH (key word) in advertising spending worldwide and more than a third (36%) of the U.S. ad spending growth. The Internet is expected to account for less than a third (30%) of the growth in worldwide ad spending and half (50%) of the U.S. growth.

CELEBRITY BLAME VS CELEBRITY WATCH: Okay, I love this one. An overwhelming majority of the American public (87%) told the researchers at the Pew Research Center for the People and the Press say there is too much celebrity scandal coverage. Not only that, more than half (54%) say news organizations are the most to blame while only a third (32%) say the public is to blame. Anyway, that announcement came out just after the celebrity watch website TMZ.com announced its TV site is gaining in popularity after the “meteoric rise” of its website. Plus video-based celebrity interview site, appropriately named No Good TV, announced it is making the leap to television “in a big way” with a possible late night franchise.

Footnote: And in the middle of all this, Maybe – and it’s a big Maybe – there is a message about the American public’s taste in the fact that trash (sorry, that is commentary) news/ reality program Anchorwoman made its debut and its finale show all in one night on Fox. Yes, the ratings put it in last place, but one has to wonder about the huge amount of negative publicity surrounding the program.

WORD OF MOUTH VS OTHER ADVERTISING: This could be part of the vice versa debate, but from everything I’ve been reading in the last month, there is no debate. Word of Mouth is the most powerful form of advertising. Along with its second cousin – peer reviews, followed by its third cousin – user generated content (which website Marketingprofs.com calls ‘word of mouth on steroids’) and its fourth cousin – Interactive Television. A report released this month by Bridge Ratings and the University of Massachusetts says consumers give family and friends a rating of 8.6 on a scale of trust from 1 to 10 while advertising rates on a 2.2. And as reported earlier, researcher firm eMarketer found that 80% of consumers trust word of mouth more than any other resource. Another study by Ketchum and the University of Southern California Annenberg Strategic Public Relations Center says more than half (55.6%) of what it calls ‘adult influencers’ turn to family and friends for information while a third (34.6%) get advice from co-workers and one in five turn to either blogs (20.7%) or social networking sites (18.6%) for information. A survey by word of mouth marketer Bazaarvoice and market researcher Vizu found that three quarters (75%) of shoppers say it is ‘extremely’ or ‘very important’ to see customer reviews before making a purchase decision. The Deloitte report, cited above, also said that word of mouth drove visits to the Internet with 82% saying they visited a site based on a personal recommendation – only slightly behind the 84% who visited a website through search engines.

And you will recall previous MfM reports that Word of Mouth is also the first source of information for many people when it comes to news as well. Last week’s MfM cited a study by Frank N. Magid and Associates that word of mouth was the #1 way people outside the home found out about the Virginia Tech story. That just confirms earlier studies cited by the Word of Mouth Marketing Association. A study released by Technorati showed that, based on the number of links to them, 22 blogs (which are a form of word of mouth) ranked in the top 100 news and information sites, which is nearly double the number from the previous year.

Footnote: In television we consultants talk about marketing that focuses on testimonials as one of the most effective forms of promotion, and when you consider it, such testimonials are a form of word of mouth or peer review.

Consumer Generated Media: Going back to the IBM vs. Deloitte article above, one particular point stands out. Despite some different interpretations about TV and the Internet, the two reports agree emphatically that user generated content has become a powerful force in media. The Deloitte report says that more than half (51%) of all Internet uses consume UGC and that goes for all generations. The head of the firm’s product innovation office says he was impressed by the “real popularity” and “widespread demand” of such content. The IBM report which included the U.K., Germany, Japan and Australia as well as the U.S. found consumers are increasingly contributing content. The percentages are small for people contributing to user-generated content sites (7% to 9%) but they more than double (20% to 36%) when consumers are asked about contributing to social networking sites. I should also remind readers of a previous MfM which cited a Pew Internet and American Life Project study that found three out of five (62%) of online video viewers prefer professional content while (one out of five) 19% prefer consumer-generated content.

Two Examples: User involvement in the process is best illustrated by two start-ups in the Music industry. Sellaband celebrated its first anniversary with a SellaBration in Amsterdam, after raising more than $1 Million by inviting fans of bands to invest in their favorite group. Now, another group SlicethePie has started the same concept in the U.S., turning music fans into music investors.

TRENDS: A study by Parks Associates found that a third (34%) of adult web users played online games at least once a week, compared to less than a third (29%) who watched short video clips and only one in five (19%) who hung out at social networks once a week. But, the group says video watching is growing at a rate of 123% compared to online gaming’s 79%. A third (34%) of consumers say they are much more concerned about environmental issues today than a year ago, but only a fifth (22%) believe they can make a difference. And in keeping with the vice versa theme, while concerned about the environment, research firm Yankelovich says ‘going green’ in their everyday life is not a ‘high priority.’

COCKTAIL CHATTER: The world’s #1 cell phone maker, Nokia, reports that India has become its 2nd largest market, jumping ahead of the U.S. but behind China -- something the company had predicted but which happened three years ahead of the predicted time. One country, Afghanistan, supplies 92% of the entire world’s opium, according to an article in the Sunday edition of the New York Times. The Japanese government has cancelled a grant that funded a sign language news program after it found out that the newscasters did a striptease while reading news items, the news agency Reuters reports. And a final note, lonelygirl15, the Internet phenomenon that turned out to be a hoax but a hoax that ended up garnering all the publicity it wanted, has died.