Coca-Cola CMO Marcos de Quinto’s recently defended TV as providing the biggest bang for the cola giant’s marketing buck. Credit: Coca-Cola
Broad reach was the cornerstone of advertising media for decades. But its position has come under steady attack. Media’s biggest traditional reach vehicle, TV, has seen that very quality ebb as viewers drift away. Growing alternatives use finely targeted messages against smaller online communities, model personas and individuals.
TV networks, cable networks and agencies have been on the losing side of this battle for years. Agencies in particular made a big bet on reach in the mid-1990s by ripping media planning and buying out of creative agencies and founding the media company giants we know today (OMD, Zenith Optimedia, GroupM, etc.). The core idea driving this big move was that eyeballs could be commodified. As far as reach was concerned, an eyeball was an eyeball; and a cheap eyeball was better than an expensive eyeball. Consolidation of huge budgets meant that big media agencies set the negotiating field, and the network and cable players played the game according to the new eyeball-commodification rules.
Â Marco de Quinto Credit: Courtesy Coca-Cola Company
The internet, of course, turned this world upside down. As media-planning options went from eight or nine media choices to hundreds, creative agencies were left in the lurch. The connection between media planning and creative, which had always been tenuous, was now almost nonexistent. Aligning creative ideas to emerging media opportunities became the definition of great creativity, yet the media people and the creative people were usually not even in the same building. At the same time, when networks and cable stations were most under attack for their lack of targeted impact, media buyers were focused on lowering the cost per eyeball.
This course of events has helped lead inevitably to broad-reach vehicles like TV continuing to decline in the face of highly targeted media options. Consumer behavior was the driver, but commoditized eyeballs hastened the economics of the decline.
But the worm appears to finally be turning.
Recent headlines from two of the most important mass media clients, P&G and Coca-Cola, should be turning heads. A few weeks ago, Advertising Age reported that Coca-Cola’s Chief Marketing Officer Marcos de Quinto defended TV as providing the biggest bang for Coca-Cola’s marketing buck. Coca-Cola’s data showed its TV investment “returning $2.13 for every dollar spent on TV, compared with $1.26 for digital.” That’s a big win for a broad-reach medium that has had very few lately.
In mid-November, P&G weighed in on broad reach in the wake of its divestiture of over 100 brands. Ad Age reported that P&G would be increasing spending “to benefit the biggest social-media platforms and ‘broadly-appealing’ TV shows.” P&G Chief Brand Officer Marc Pritchard said the focus would be on “reach and continuity.” Most importantly, the article noted: “On the TV side in particular, the move seems to reflect what some brand managers privately have said for years in the face of optimizer-driven buys that focus on thinly watched cable showsâ€”that they saw better results from broader-reach primetime shows.”
P&G and Coca-Cola promise to be in the vanguard (as they often are) of new priorities in media-planning objectives. We are entering a period where the focus will be on “engaged reach.” The pendulum will swing back to broad-reach vehicles (in traditional and digital media) over optimized reach or cheap frequency, but only so far. A program or website’s ability to gather a broad audience will become shorthand for engagement worth buying. Programs or websites with more narrow reach and high engagement will still be valuable, but will carry a discounted pro-rata CPM.
The key ramification of the new world of engaged reach will be the precipitous decline of narrow low-engagement programs. Consumers have been eagerly waiting for the other shoe to drop on cable companies for years, so consumers could choose and pay for only the channels and programs they want, and not 50 other channels they never use. Engaged reach, led by P&G and Coca-Cola (and the rest of the industry in their wake) will make sure the advertising dollars and the viewing demands of the majority of consumers are going in the same direction. It will mean that consumers will finally start getting what they want, not just from streaming options like Netflix, but from cable operators and TV networks for a change. The walls of these models have been battered, but the primacy of engaged reach will bring them crashing down sooner rather than later.
MarketingCharts.com’s most recent analysis (Oct. 2016) of Nielsen data showed that between 2011 and 2016, viewing of TV by 18-to-24-year-olds had fallen by more than nine hours a week. They stated succinctly that “In the space of five years, almost 40% of this group’s traditional viewing time has migrated to other activities or streaming.”
In the end, P&G, Coca-Cola and those who will surely follow have given broad-reach TV programs a huge shot in the arm, but they have also sounded the death knell for the majority of lower-rated shows on TV. The era of engaged reach will make traditional TV get to its future faster. And it is about time.
Brian Sheehan is professor of advertising at the Newhouse School at Syracuse University. He spent 25 years with Saatchi & Saatchi and nine years as chairman-CEO of Team One in Los Angeles.
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