You Call This Working?

• Print, Radio, Television, Out-of-Home, and Interactive have all been delivering less impressions for higher CPMs year after year after year for the past 12 years. (Historical tracking studies of CPM rates.)

• April, 2005 - Bob Garfield, Advertising Age Editor, wrote in a massive article that: “The marketing industry is currently whistling past the graveyard and largely ignoring signs of massive, fundamental changes in how the business of mass marketing will be conducted in the near future. The broadcast TV model is working less well each year and will eventually cave in on itself as it reaches ever-fewer viewers with a fare of low-quality programming and mind-numbing clutter. Marketers will increasingly abandon it.”

• The American Research Foundation presented the results of a survey on receptivity to marketing at the 2004 management conference of the American Association of Advertising Agencies on its findings that negative consumer perceptions of advertising had significantly increased, making the tasks of advertisers and agencies considerably harder.
  
  The 2005 survey reported that 56 percent of survey respondents said they avoided buying products that overwhelmed them with advertising, up slightly from the 54 percent who said so in the 2004 survey. And 69 percent said they were interested in ways to block, skip or opt out of being exposed to advertising, the same percentage as in the survey last year.
  
  J. Walker Smith, president at Yankelovich Partners, the market research company that conducted the survey stated that negative consumer attitudes toward advertising "remain the single biggest barrier to improving return on investment for marketing spending. "Until we get better at engaging consumers," he added, "they're going to continue to push back and resist what advertisers are trying to deliver to them."

• June 2005 issue of Harvard Business Review, reporting on the effectiveness of 500 various consumer and B2B marketing programs:
  

  • 84% resulted in less market share, not more
    

  • Most customer acquisition efforts did not break even
    

  • Fewer than 10% of new products succeeded
    

  • Most sales promotions were unprofitable
    

  • Advertising ROI was below 4%
    

  • Doubling advertising expenditures for established products increased sales just 1% - 2%
    

• 2004 GALLUP POLL RESULTS: Americans ranked public service professions highest in honesty and ethics. 1. Nurses; 2. Grade school teachers; 3. Druggists, pharmacists; 4. Military officers; 5. Medical doctors; 6. Policemen; 7. Clergy; 8. Judges; 9. Day care providers; 10. Bankers; 11. Auto mechanics; 12. Local officeholders; 13. Nursing home operators; 14. State officeholders; 15. TV Reporters; 16. Newspaper reporters; 17. Business executives; 18. Congressmen; 19. Lawyers; 20. Advertising practitioners; 21. Car salesmen

• According to Nielsen/NetRatings, network TV audience has eroded an average of 2% a year for a decade, although in the same period the U.S. population increased by 30 million. The cost of reaching 1,000 households in prime time has jumped from $7.64 in 1994 to $19.85 in 2004. U.S. household broadband penetration has gone from 8% in March 2000 to an estimated 56% in March of this year.

• A Nielsen Media Research analysis of the most popular terrestrial network shows' ratings over the past five years indicates that there has been a total 17.4 percent decrease in audience-viewing.

• A 2000 Veronis Suhler Stevenson Survey showed that Americans devoted an average of 866 hours to broadcast TV annually and 107 to the Internet, a ratio of 8:1. The projection for 2005 had the TV/Internet ratio at 785 hours to 200, or just under 4:1.

  Five percent of U.S. homes are equipped with TiVo or other digital video recorders, and not only does time-shifting of favorite programs render network schedules irrelevant, 70% of DVR users skip past TV commercials.

• Following the development of computer models for estimating frequency distributions, media planners have searched for a simple method of utilizing distributional information in media planning. The most popular is effective frequency planning (EFP). However, recent research has challenged the value of the EFP approach. Indeed, EFP presents an enormous paradox. On one hand, it is widely used by media planners. On the other hand, it appears to be severely flawed as a method. Hugh M. Cannon, Wayne State University; John D. Leckenby, University of Texas at Austin; Avery Abernethy, Auburn University. Journal of Advertising Research, November/December 2002

• BusinessWeek online, March 1, 2004 - For decades, Coke was the master of the 30-second TV spot: Advertising Age ranked Coke's classic "Hilltop" and "Mean Joe Greene" ads as two of the best ever. But thanks to media fragmentation and the growing use of devices like TiVo that let viewers skip ads altogether, megamarketers can now hit no better than 15% of the population with an ad in prime time -- far less than the 40% reached as recently as the mid-1980s. Coke signaled the shift early last year when President Steven J. Heyer rattled Madison Avenue with a speech warning that "the days of mass, homogeneous marketing are behind us."

  While management won't discuss how it allocates its marketing dollars, ad trackers TNS Media Intelligence/CMR estimates (TNN) that last year through October Coke spent just $188.7 million on TV advertising in the US, a sharp drop from $268.1 million in 2001.

• June 1, 2004 - A new report released by Deutsche Bank, which examined 23 major household, personal-care, food and beverage brands, found only 18% of the brands studied generated a positive return on investment (ROI) from TV advertising for periods of one year or less, and less than one-half, 45%, saw their ROI pay off in the long term.