It’s almost exactly three years ago that we first wrote about PPMs (Portable People Meters are pager-like devices that track TV wherever the sample is exposed to a signal replacing the traditional diaries and People Meters).  At the time, it was mostly a radio issue we were griping about but we had TV related concerns too.  Now Montreal radio data is in use, and we’ve seen preliminary Toronto radio and TV data – and the same concerns still exist (http://www.willsandco.ca/?m=200812)

As we’ve always said, it’s not about the actual numbers but how the stations react to them.  The PPM introduction for Montreal radio, it’s not what you’d call a home run.  At least not in the way many of the stations reacted – protecting spots costs without acknowledging drops in audience levels isn’t cool  

Now TV is in the position of having to deal with new audience numbers and the preliminary info shows they’re up on average (by a lot) across conventional and specialty stations.  They can screw it up or they can use it to their benefit

What I believe the stations would do naturally is use the new higher numbers to increase their spot costs.  They have every rationale to do so.  Except that they’re generally hurting under current economic pressures and losing revenue to the web.  So cranking up rates by 20% or so isn’t going to help their business even if advertisers are getting what they pay for based on PPM measurement

Rather, the stations need to use this information to stop the bleeding:  show advertisers that TV’s not on its deathbed and show them even better value

What will they do?

Actors, writers, filmmakers, musicians – they all want a piece of their own action on the web.  Google is paying the websites they’re on 50 cents for every thousand impressions giving a new media meaning to “starving artist”

As of 3:49pm today, the internet is the #1 news source in the world amongst humans and felines.  New online reports indicate that 98% of all blogs don’t source their claims or opinions

Journalists and writers are becoming a dying breed.  Even though they initiate pretty much every piece of info, their employers are finding it tougher to pay them.  Why?  The stuff they write gets redistributed and becomes fodder across so many other (no cost) websites and blogs there is now too much fragmentation for them to get their share to cover their costs.  But the blogs will be awesome

If online advertising is the best, name me 5 banner ads you’ve seen in the past week (University of Phoenix doesn’t count)

They say television is going to die and all those annoying commercials will go to the grave with it.  The antiquated box is being replaced by online video channels where pre-roll video ad units are critical to their success.  Websites won’t be able to fill their pre-roll inventory without TV commercials

It has never made sense in my black and white brain: CBC runs a TV operation that competes in the commercial TV landscape, the radio operation runs like it’s competing with the commercial industry but they’re commercial-free, and they get a massive subsidy from the federal government every year (over half of their revenue)

Now the CBC can’t make ends meet (and it’s not going to get better), so keeping the status quo makes even less sense.  They need to drastically crank up revenue, or cut costs 

And there are big costs associated with being a competitive media player:  In 2008, CBC spent $11 million on advertising ($1.4 million of that supported radio).  This is a lot less than what CTV and Canwest spent, but significant portions of those spends were just money changing pockets across their own properties – in the CBC’s case it’s all out of pocket.  They spend a ton of money to get programming that people will watch (including Hockey Night in Canada, Jeopardy and Wheel of Fortune and all their own productions) and fill up 80 radio stations with content.  Not to mention sales staff, costs of audience measurement, the high-end envelopes they mail out invoices in…

They’re screwed though – at least on the TV side.  If they don’t incur some of these costs, no one will watch and the revenues will sink further.  So if they’re going to sell commercials, they need to do this – you have to spend it to make it

As a media geek, the obvious thing for me to say is that the CBC is missing out on a large amount of revenue by not allowing paid commercials on their radio stations (we’ve said it before too).  If they made this one change, they could probably cover their current revenue shortfall as well as the new costs to sell the ads

Done.  This would seem completely rational to most Canadians.  The commercial precedent is already set with TV and they get the added revenue without tapping taxpayers directly.  To the CBC Radio lovers who will complain: suck it up.  It’s not going to hurt Canadian culture all of a sudden.  You’ll still love it and you’re taxes won’t increase to pay for it – plus, 80%+ of the population who never listen to CBC Radio won’t even notice

But maybe TV should follow radio instead – kill the commercials and take a hit on the revenue

The CBC’s mandate is to “provide radio and television services incorporating a wide range of programming that informs, enlightens, and entertains…predominately and distinctively Canadian, reflect Canada and its regions, and contribute to the flow and exchange of cultural expression”

I buy into this.  The CBC was started to ensure we weren’t overrun with US media, so I think we need it now more than ever.  While I don’t think having ads on a TV or radio station hurts its ability to promote Canadian culture, following a commercial model has put them in a trap that takes them away from Canadian content or makes it unaffordable.  Jeopardy/Wheel of Fortune may have helped CBC’s audience numbers (and increased ad revenue as a result), but really, where do these shows fit into the mandate?  I’d even argue that as Canadian as hockey is, the NHL should not be the CBC’s #1 hockey focus and could be served better elsewhere (for the NHL and fans)

Go the PBS route and now you have a service for Canadians that fits the mandate.  It’s funded by the government because they can afford it – with 30% total revenue chopped out from elimination of ads and other associated costs reduced.  Focus ALL the money on producing TV and radio that fits the mandate and make the math work.  I bet even the Conservatives would pony up a few more bucks if the mandate was being fulfilled better

There may be a happy medium between these two ideas, but that’s the basic decision that has to be made.  There’s no rational or fiscal way for the current situation to make sense.  The CBC needs to do its job for Canadians and they won’t be very good at it if they stay in the same rut

I’m sure it would be another productive conversation with Bev

Do all social media types get their training at the University of Phoenix?  VC Guy should be embarrassed in the way he uses these examples.  I know it’s a ra-ra type of presentation, but is this the info he uses to invest millions of dollars? They all have some element of social media, but claiming that piece as the sole reason for success is just wrong.  In other cases, whether it’s social or not they’re just shaky marketing.  Regardless of what role social media plays in each one and how hot they make it look, eventually hype won’t be enough

Burger King’s killing Facebook friends – It focuses on the Facebook numbers but overlooks the effectiveness of the messaging

Everyone in advertising has been briefed with “I want Subservient Chicken” causing so many eyes to be rolled, injuries have been reported.  In this case, BK incented Facebook users to kill their friends – not for real of course.  And there’s the glitch in this one – it’s negative.  I’m sure killing your friends is great for brands trying to attract juvenile boys, but even the juvenile clients we have would give this a second thought.  If you want a case study for how to get people to do stupid things, use this one.  If you’re a marketer and you think this represents how regular consumers will interact with anything you ask them to do, go for it and you’ll get a new meaning of negative

Building the Jonas Brothers without radio – Mistakenly gives all the credit to the web and ignores everything else

I have 8 and 12 year-old daughters who love music so I can comment on this one.  To say that Disney built this band with online rather than radio is totally misleading.  Sure they have fan pages and all the typical web stuff, but there’s not much that I would classify as “social” – it’s all safe and easy stuff for young kids and tweens.  On downplaying radio, the Jonas Brothers might not get tons of mainstream play, but radio has definitely played a role in their success.  Disney Radio has 31 million weekly listeners in the US.  Strangely, the playlist is heavy on Disney artists and hits over 4 million 6-11 year olds each week.  Pretty sure this helped

Typical for Disney, the biggest contributor to their success is TV – their Family Channel is a critical piece in their star making machine.  Unlike anything else, TV is able to build a fan base by showing off the Brothers in endless ways: interviews, movie specials, videos, appearances (like in an episode of Hannah Montana), tour info, behind the scenes footage, and more.  The music is important, but this exposure goes beyond that to connect the audience with the Brothers to build hardcore fans who go to their concerts, buy their CDS – and maybe even join their online fan club

Kogi BBQ with 14,000 Twitter followers – It’s not about the number of followers, it’s about the tacos – are the tweets selling tacos?

I think it’s amazing Kogi BBQ has 14,000 twitter followers.  But it’s a shame this is where the case study ends.  I tried to contact Aliiiiiice (PR person at Kogi) to ask if they had any stories about lineups at a truck after tweeting a location but didn’t get a response (I still think Alice and what she’s doing is cool).  So I did some extensive research in the LA market to figure it out:  LA taco trucks often sit on the same spot until they get kicked off.  They’re also typically the same offering from truck to truck.  Kogi’s food is different and they constantly hit different hot spots making their surprise arrivals seem like an event

I’m going to give this case the benefit of the doubt.  I think the social media like twitter is doing it’s job in creating the right kind of buzz for the brand – plus, it’s somewhat tactical.  But does a location tweet (which is like a mini LTO) to 14,000 people convert to anything in a market the size of LA?  Probably doesn’t matter – it’s part of the brand.  If you’re a starving restaurant operator, you need to do more homework than this

And although is wasn’t in this presentation, don’t give me Obama as the killer case study either.  Social media may have been used well by Obama’s election team (primarily for fundraising) but it was TV and PR that did the heavy lifting at persuading voters.  No matter who or what they were taking on, it was TV that they cranked up

The positive side here for social media (and the web) is that it did have a real role in these examples.  But let’s understand two things: 1) what is its real role within the mix of everything else and 2) how does it affect meaningful results like brand perception or sales

Earned media is nothing new.  It’s the same phrase and thinking used by PR people.  But there’s an important difference in the social media landscape which is the consumers who add their own layer of messaging to the mix.  (Get it?  That’s the social part.)  In the old days, journalists wrote the stories that were fed to them by PR pros.  Now, anyone with access to the web can add to the earned media a brand may receive.  Today, a blogger from Bowmanville, Ontario is on par with a veteran writer from the Globe and Mail (or am I?)

Although it sounds like a huge benefit, the way VC Guy in the article blankets earned media as less expensive is very misleading.  You get what you pay for with social media too

The only way to compare costs of media is on a cost per basis – like cost per thousand impressions which is a common gauge of cost efficiencies and is a basic currency in online advertising.  Every medium has different messaging capabilities which typically correlates to their cost efficiencies.  For example: a 30-second TV spot is less efficient than a 30-second radio spot because it adds a visual element to the message.  Same thing with online advertising – an over-the-page ad will cost more than a standard leaderboard because of its superior impact and messaging

Same holds for traditional earned media too – a full story is worth a lot more than your name buried in the ninth paragraph of an article

VC Guy probably knows better, and here’s what he wished he could have been quoted as saying:

·         To begin with, not all social media hits (basic exposure to messages) are the same: Is a dedicated Facebook page the same as a one line post buried in a chatroom that no one will ever see?

·         What counts as an engagement?  Is someone reading a chat trail months after a campaign as valuable as an active participant in that discussion.  Is a lurker as good as a fan?

·         Analytics for social media are all over the place still (although this is job #1 for a lot of people), so what are these efficiencies based on?  (We’ve had to calculate this for clients and it’s not easy – how do you obtain the number of readers on a tiny blog?)

·         Marketers will receive both good and bad earned media hits.  Read through any chatroom and you will rarely find that everyone is on the same page.  So does a marketer accept negative hits the same way they take positive ones?

There’s a ton of value in having consumers talk about your brand or interact with it online and offline.  Is it better than seeing a TV spot?  Not sure – what level of engagement and messaging are we comparing? 

Will it cost less to earn media exposure?  I doubt it.  And maybe it shouldn’t if you’re trying to achieve quality engagement with your potential customers.  On the other hand, if you expect to pull off a big campaign for no cost because it’s ‘viral’, what should you expect to get in return?  The reality is most advertisers are going to have to pay for their earned media in one way or another

Pitching social media on its relative costs at this stage of its maturity is a recipe for disaster for marketers, the pros who are doing it, and the medium itself.  Someone needs to pin down what we’re talking about before they say it’s cheaper than everything else.  Next thing you know, social media will be a commodity 

It’s easy for a VC dude to say everyone needs to do more social media.  He looks brilliant when everyone’s talking “social” and I look like a moron for trying to put him in check.  But like any communications decisions, marketers need to figure out what they need to accomplish before they let the tactics steer the ship

If they determine it’s right, they obviously they have to do it well – but it’s bigger than just being authentic.  It’s about being engaging for consumers – in other words, creating discussions or platforms that consumers wish to participate in.  It’s not good enough to put it out there.  It needs to be good enough for consumers to make an effort even if it’s as small as forwarding a link – and as small as that seems, it’s getting tougher to do

Right or wrong for what they need, marketers still tackle it with one of these three routes:

1)     Ask for “viral campaign”

2)     Go hardcore with their brand/product in a way that only they would be interested 

3)     Jump on the latest social portal – (“We have to get on ___”)

Doing anything for sake of doing it isn’t usually a good idea.  Coming up with something that has social appeal is going to be tough for probably 99% of marketers

Try it for yourself:

1) Name all the products or services that you have used or purchased in the past week that you would strike up a conversation with at least one friend about

2) Name a Facebook page or group, a Myspace page, or a Twitter user that you participate with that is from a marketer

Personally, the ones I’m interested in are high involvement products for me like guitars and bicycles.  I love talking about these things and do follow the brands I like online in one or more ways.  For the other 4 billion things I’ve used in the past week, I just don’t care that much

The point is not that social media can’t work for more advertisers, but that they’re going to have to be extremely clever to get people involved.  The category, I continually come back to is dish soap.  What can a brand in this category do that will engage consumers and convert to sales for them?  Come up with something that the average grocery shopper will participate in so that it changes their purchase consideration and I’ll declare you a hero

I’m not sure who the “bad people” are (perhaps the University of Phoenix), but if there’s a dollar in it for Facebook (among others), I’m pretty sure they’ll take it.  “Doing” social media is easy.  Doing something great is critical because ultimately, consumers will decide the success of a marketer’s social media tactics

I think there are six things that could be put in check in this story and I’ll address just the one in the final paragraph here and follow the others in the next few days (I will hold back on personal attacks on number crunching engineer MBA types in the VC business who are serving weird koolaid)

Social media advisory:  We get it.  We use it personally, for Wills & Co, and for our clients.  It’s an amazing thing to be in our business these days and “social media” certainly makes it interesting.  Although my comments may appear to hammer social media and its proponents and support old school media I’m just trying to provide a reality check as the speeding bus flies by because there are issues that are being shouted over by the web community

I will not argue that social media has grown like crazy, but it is nowhere near any of the traditional mass media.  The INTERNET is and has similar penetration to other mass media, but social media channels are just part of the internet fragments (as far as I know the use of websites hasn’t died yet).  Saying social media has “achieved network-TV-like scale” is wrong.  It’s wrong because it’s being discussed in the context of an advertising medium

An advertising medium in its basic level takes advantage of existing audiences to hit them with ads.  As a category, social media has scale but it’s extremely difficult to capitalize on even if you take a targeted approach because its reach is socially driven rather than destination driven

THIS is mass:  On Tuesday night, 2.3 million people watched American Idol in Canada.  Over 200,000 people watch the Daily Show EVERY night in Canada.  40,000 people watch the new BT show on CP24 out of Toronto after one week of airing.  These are huge numbers of people tuned into one spot at one time and many people would say these programs are targeted too

I think the social media proponent in this article would cite the 10 million facebook users (Can) and the 600,000 twitter users (based on 10% of 6 million US users although this is a guess because accurate twitter numbers are hard to get) demonstrate the size of social media.  But 0.021% share of total weekly visits on the web (US) doesn’t sound so big and that’s what twitter had in January

I would argue these absolute user numbers only reflect the size of these particular “social portals.”  I don’t cite 99% TV penetration (33 mil) or 85% reach of Global TV (25 mil) for a client because that’s not how an advertiser uses the medium.  And social media is no different – in fact, its fragmentation is way worse.  These social portals are made up of tons of micro networks which is where the social aspect truly lies – between friends, followers, fans, etc.  You could buy ads on facebook to get to all 10 million users, but you already know how that would work out.  Social media implies spreading the word through these networks but we’re not talking mass now – we’re talking small and targeted IF you can get in there

Social media is commonplace in the general population for sure, but don’t label it mass like the others.  And once you get to a point of true mass in social media I’m pretty sure you will have lost what was special about it

To BBM:  You might as well stop reading now and call me at the office (416-586-5420 x323) – we’re already bent over in anticipation of what the Montreal radio stations are going to do to us 

For readers not familiar with this topic, PPMs are little pager like devices that are worn by participants that pick up every radio signal they are exposed to.  These replace the traditional diaries which required participants to manually record what they listen to in a book (or what they thought they listened to).  The PPMs are a huge improvement because normal people can’t accurately record every station they’ve been exposed to let alone durations for each

Quebec radio stations are crazy about their measurement (I personally think this is because of the ego boost they get from seeing huge ratings) and Montreal pushed to be the first market for PPM measurement.  It’s been a couple of years of testing, etc and the first study will be released this week and will be used as the official measure of Montreal radio for Fall 2008 

For the past couple of weeks the hype has been taking over the media world but all we’ve seen so far is lots of guarantees and conversions – and no meaningful data.   But we’ve seen enough shaky stuff to believe that our previous warning that ‘you better watch what you wish for’ might not have been strong enough

Here were our Montreal PPM concerns that we published about three years ago and they still hold today: 

Sample is too small:  The PPM sample for Montreal is 800 people (50/50 – French/English) compared to the 5,000 with diaries (70/30 – French/English).  This has to represent women and men in all age segments as well as English and French.  I checked around again with some research people and the best practice for a quantitative research sample is 1,000.  We’re only asking an entire industry to rely on this data

PPM costs are apparently double diary costs:  This would explain why the sample size is a fraction of the old one

Diaries are being used to validate PPM data:  We saw this in some previous testing and thought it was completely bogus.  The test results showed that PPMs would not reflect a drastic change in overall numbers.  So either that makes no sense or you have to question why make the flip to PPMs to begin with

Now we’ve got some new concerns to add to the pile:

We’re getting diary-to-PPM conversion tables, new Montreal cost per points and spot costs jammed down our throats and no one has provided any useable numbers for buyers to look at.  Everything is being presented on averages for the Montreal market, but there’s no way PPMs reflect the same things for every station, every daypart, or every demographic

What we’re being told is that a 100 GRP buy bought on diaries two weeks ago is only delivering 66 GRPs with PPM measurement (based on adults 25-54).  No big deal!?  That’s only a 34% discrepancy  

The radio sales people are downplaying the conversion with a slick analogy:  “it’s like converting miles per hour to kilometers per hour.”  But the real difference is that we’re talking about how much it costs to fill your gas tank because the conversion rate isn’t about audience measurement – it’s about rates 

Here’s what the conversion means in real life:  When you bought a Montreal radio spot previously that delivered one GRP, it would cost about $85.  Now that spot only delivers 0.66 of a GRP meaning you would only pay $56.  That’s hard on the bottom line if you’re a radio station, so not surprisingly the Bureau of Quebec Commercial Radio (BCRQ) have unanimously decided to raise the cost per point to $128 

Voila, you have just held the cost per spot at the same old level – even though there are 34% fewer people hearing the spot, even though that puts the cost per point in line with Toronto which is double the size, and even though Montreal stations traditionally hold the highest cost per spot in Canada 

We don’t even have the ability to gauge the new numbers on full coverage audiences because PPMs are only used in central Montreal and do not measure extended market area.  This will inevitably increase radio’s cost-per-thousand and put it in the league of national specialty TV 

Watch what you wish for 

We’re just waiting for the Quebec stations to issue a new set of conversion tables that applies the Montreal data to every other market in anticipation of more PPMs.  Then they can bring the Quebec expertise to the rest of Canada and we’ll have a $200 cost per point in Toronto 

Maybe someone should do a table that shows how past buys that were underdelivering by 40% will require compensation 

Someone wished for PPMs.  They could have tested and introduced it slowly, but if they want to make it the official currency out of the gate maybe they should be accountable for what they’re selling too – that shouldn’t be the advertisers’ problem

I can’t believe we haven’t had a Quebec related WTF? post prior to this but I’m sure this one will start a streak.  Think about this:  would you push your child to smoke cigarettes so they don’t get into anything harder?  They might in Quebec 

If you asked me if an advertiser can use English outdoor creative in Quebec, my answer would be “non” 

But I was surprised to be wrong for the first time:  Quebec doesn’t allow English signage because it deteriorates French language and culture.  Outdoor ads must be in French only or in both languages.  No English-only signs in Quebec – EXCEPT if you’re an English-only radio station 

If they made the English station advertise with French billboards, they would actually be driving French listeners to English stations (which must also be on the verge unlawful in Quebec as broadcasters of an unaccepted tongue)

It would be like deciding you don’t want to wear underwear anymore so you just go totally naked (socks optional)

But they DO allow 100% English radio stations(!?) which are beamed into every French household

French billboards promoting these stations would be judged as what?  Trickery?

It’s similar thinking behind allowing bad guys to have guns because they will only kill each other – triiiiiicky

So now you’re saying, “Yes, Jeff.  That does sound like the same logic behind driving a hybrid SUV.  But aren’t you being just a bit silly about this?  Obviously, no French person would fall into this trap.”

But that’s exactly what these English radio station marketing people should be doing (as if giving $1 million to a listener wasn’t a trap).  Over one week, the six English stations in Montreal talk to 800,000 adults (based on the reach of an ad buy).  49% of those consider themselves French – enjoying some English tunes and compromising French culture.  After two weeks, the number of French listeners is even higher than English.  We’ll see how big this number is with PPMs in a month

So where’s the real WTF? element in this whole deal?

Maybe English stations should use the French signage law in their favour and go after the much bigger French population

Or maybe Quebec should kill three birds with one stone and eliminate the English language

  Let’s start at the beginning.  99% of Canadian households have at least one TV.  I’d bet that’s even stronger than households with toilets (it’s not measured in PMB so I can’t say for sure)