Marketers’ hands not tied by ‘cord cutting’

An increase in “cord cutting” among TV viewers will not necessarily sever those consumers’ ties with advertising from their favorite brands, one marketing executive said, adding that the fragmentation of content should be a major opportunity to market to customers efficiently. Last month, HBO announced it would offer a content-streaming service like its HBO Go platform available to non-subscribers to its pay-TV channel. When CBS said the next day it would explore its own streaming service unbundled from a cable subscription, Wired magazine said the country was getting closer to achieving true “a la carte” TV and access to content. HBO’s parent company, Time Warner Cable, revealed in its third-quarter earnings report that pay-TV subscriptions fell by 184,000 households during the period. An unbundled HBO streaming platform would be a way to grow the channel’s subscriptions among the 10 million or so U.S. households that only pay for broadband Internet access with no TV subscription. It’s undoubtedly bad news for cable providers like Time Warner or Comcast, but it could be great news for brand marketers, according to one ad exec. The important takeaway for franchise brands and other major marketers is that commercially sponsored content won’t go away, it will just be distributed in new formats on more mobile types of devices like tablets and phones, rather than a 45-inch TV set, said Tim Nelson, president of Chicago-based advertising agency Tris3ct. “So many of these issues of the ‘threat of cord-cutting’ are presented from the perspective of the status quo losing control and incumbents losing position,” he said. “If you’re a brand or an agency built around 30-second spots, that move away from broadcast TV is a challenge. … There are going to be fewer anthemic, grandiose ads from 10 to 15 years ago. Brands will need to act like publishers able to offer more engaging things that are fresh, regardless of length or platform.” He projected that the United States is “probably a generation away” from the majority of consumers watching content like his children do, primarily on a smartphone or tablet, leaving the big-screen TV the device reserved for live sports or watching a blockbuster movie with lots of friends or family. “The bigger question,” Nelson said, “is that these eyes are going someplace else, so where do marketers need to go to meet them? People are watching bits and pieces of content at a time on phones or tablets, and it’s still an advertising-heavy medium. It’s migrating toward a small screen with tons of interstitial ads, greater opportunities for targeting and more contextual media buys. … I’m shocked at how fast it’s changing.” He also is excited by how fragmented digital advertising is getting, Nelson said, because content can take so many different forms to suit banner ads on websites, 5- or 15-second pre-roll video snippets, native content or branded entertainment. He suggested companies approach their digital marketing as managing a “library of digital assets” rather than only one campaign on one platform like YouTube, Facebook or Netflix. That’s not to say long-form advertising is dying. At the start of the National Basketball Association season, one of the most-shared YouTube videos floating around Facebook was Nike’s 2-minute spot “Together,” celebrating LeBron James’ return to the Cleveland Cavaliers. The long-form spot was tailor-made for YouTube, Nelson said, and the full version played once on the national broadcast of Cleveland’s first game, but all subsequent TV commercials were a 30-second version. He suggested planning different messages or executions of content for different lengths, rather than trying to cut an existing 30-second spot down to a 5-second pre-roll clip. Media spending would not even have to increase to accommodate a more fragmented, more digital media landscape, Nelson said, noting that greater contextual-marketing opportunities and more accurate targeting could be more efficient than buying spots on cable or broadcast TV. “Every marketer should think this is the greatest thing that ever happened,” Nelson said. “Media models are not keeping up with the rate of change in technology, which is accelerating even more. It probably takes something like cord cutting for most people to wake up and shift their media models.”