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September 13, 2007

Tivo Disrupts TV Again With a Serious Advertising Shake-up

Anyone who's interested in gaining insights into what REALLY works in advertising absolutely MUST read this recent article in Business Week.

What happens when you apply more rigorous tracking to advertising to find out what really works? You find out that all the st[fl]uff those Madison Avenue agencies have been spewing is, shall we say, "without much substance".

That's one of the outcomes of Tivo's new service TiVo Stop||Watch. "It examines the commercial-viewing habits of some 20,000 TiVo-equipped households, including which ad campaigns are fast-forwarded by the lowest percentage of viewers."

And what have they found???

"What has marketers scratching their heads is that so many of the winning campaigns are direct ads."

And what are the typical Madison Avenue agencies saying now?

"Ask execs at some top-flight creative agencies (who are responsible for some big-budget, glitzy Super Bowl ads), and they'll launch into the type of spin used by oil companies when they say more study is needed on global warming. (One exec asked me: "Do we know that this accounts for when people fast-forward but then rewind to watch the ad?")"

And what are the implications?

"IF THERE'S ONE LESSON from TiVo Stop||Watch, it's that relevancy outweighs creativity in TV commercials--by a lot. The ads on the "least-fast-forwarded" list aren't funny, they aren't touching, and they aren't clever. And they don't have big budgets. The top three overall in June (the latest month for which data are available) were CORT Furniture, Dominican Republic Tourism, and Hooters Restaurant. Several throw 800-numbers at you at the end."

Here's the interesting part. The more rigor your apply to advertising, the more you find that the people who know direct response are the ones who really know what works.

You realize that all the fancy dog-and-pony pitches that are done with such smooth overconfidence serve to convince those risk-averse Fortune 1000 Marketing people to go with the easily defendable agency selection. The one that will create an ad the Chief Marketing Officer can proudly show to the CEO. And the one that cost the most.

But the data shows what really works: an inexpensive, uncreative ad that's often pretty cheesy. One you won't necessarily be "proud" of. One that your customers might not say they like, even if it impacts their behavior so they actually buy your product. Which begs the question: what's really driving the business ship? Is it the desire to maximize shareholder value, or is it pride, the desire to save face?

If you had that high-paying marketing executive job, what would you do?

Exactly.

And that's what the Madison Avenue firms know all too well.

And that's why this new service by Tivo is so fascinating. Because now those marketing execs - if their bosses are paying attention - will have to justify their decisions to go with the agency that makes ads that not only cost more, but also - as we now know - don't work so well.

And the Tivo data will be there to show that to be true.

What everyone will realize is that what the Madison Ave agencies are really good at is their own knowledge of their own customers' hopes and fears, how they impact the agency selection decision-making process.

It pays to be good at making slick dog and pony shows if that's the business you're in. If you're in the business of helping your clients grow their business with advertising that delivers profitable new customers... well, then you better be good at that. One doesn't mean the other is true.

Posted by Jeff Small & Brett Astor at 04:34 PM | Permalink