Opening Night at the Movies… at Home?

Who doesn’t like going to the local theater every once in a while to take in the latest and greatest movie blockbuster? It’s a pastime that’s been tried and true since motion pictures became entertainment in the early part of the 20th century – buy your tickets, get some popcorn, pick out your seat, and settle in for two hours of escapism and relaxation with the latest studio releases. Tried and true until now, that is.

In May of 2007, Comcast Corporation announced their plan to release blockbuster films via video-on-demand (VOD) at the same time movies are made available in theaters. Termed “simultaneous release” by the film industry, this initiative would allow people to view the latest films in the comfort of their own home for a yet to be determined “premium” price, technically eliminating the need to go to the theater. That premium price has been estimated to be anywhere from $30-60 per view.

The emergence of VOD and digital video recorder functionality means that viewers are more likely to watch TV/Movies outside of scheduled times, and to avoid commercials in increasing numbers. In fact, the number of heavy on-demand media consumers has doubled between 2005 and 2006. VOD marketing rose from $282 million in 2005 to $451 million in 2006, an increase of 60%, and it is expected to rise even further in 2007 and beyond.

31% of US residents have watched VOD, and of those who have not tried video-on-demand, 29% are “very” or “somewhat” interested in utilizing it in the future. Many cable operators are now trying to take advantage of this increased interest and offer VOD to their viewers.

Against It

The industry itself is clearly divided on the issue. Major theater chains like Regal Entertainment Group and National Amusements are vehemently against simultaneous release, and for good reason.

“We’re not interested in playing anything that makes its debut in the home and at the theater at the same time,” said Michael L. Campbell, Regal’s Chief Executive (LA Times, May 12, 2007).

Box office revenues have been limited for movie theaters ever since they became independent from the major studios in the 1950s, making theater owners extremely dependent on a high volume of customers in order to turn a profit. For some background, theater chains earn an average of only 10-20% of the box office for the first 2-3 weeks of a films release, while 80-90% goes to the studios. If a film has “legs” and can still draw a significant amount of people after the first 3 weeks, the box office split changes to around 60-40 in favor of the studio. This is why concessions cost so much at the movies – the chains don’t make a significant profit on the box office, so they sell Junior Mints at a 300% markup to try and make up for it. Bottom line- the theater chains need people to come to the movies and come often, video-on-demand poses a significant threat to their existence.

All For It

Along with the cable operators who are carrying the films, the studios themselves would definitely be a large beneficiary of this type of arrangement. Yes, less people might go to the theater to see the film, but there would probably be little to no revenue loss based on the premium costs for viewing the films on VOD. The studios themselves have been very quiet on this issue to date, but it’s clear that the possibility would not have progressed to this point if they were not truly interested.

According to Adage.com on May 14th, Comcast Chief Operating Officer Steve Burke feels that simultaneous release would also help to bring new films to those that have grown tired of the movie theater experience (cellphones ringing, talkers, lousy prints) and the overwhelmed (the millions of parents of young kids who can’t possibly get to the movies on a Friday night).

In the end, customers will still be viewing films with simultaneous release VOD – they will just have the option to view new films in a different, profitable way. And the studios definitely like the sound of increasing revenues.

Affect on Advertising

Should simultaneous release come to fruition, it will certainly have a significant effect on in-cinema advertising as a whole. That being said, there is good news and bad news that comes with simultaneous release.

Let’s start with the good news. First and foremost, it is safe to assume that there will be significant demand for simultaneous release VOD among cable TV viewers. Even at the price point of $30-60 for a single viewing, people will be tempted to get the latest Hollywood release right in their homes out of convenience. They might even invite their friends over to watch to help fray the costs, hence even more impressions.

It is also safe to assume that this will be a captive, audience for messaging. Consumers ordering VOD will be enthused about the newly released film they purchased and excited to watch it. Hence, as long as the pre-show advertising is a forced exposure and can’t be fast-forwarded, it will be that much more effective than regular television advertising. Not as effective as movie theater advertising, of which Arbitron’s 2007 study claims that two-thirds of adults 18 to 34 say they don’t mind cinema ads. But probably not that far off, either.

The bad news is the hit that in-cinema advertising will take as an effective medium for engaging the consumer. Although the in-cinema audience will likely remain captive, there will simply be less of an audience to talk to. Costs for on-screen advertising will certainly be reduced, but so will the relevance of the medium.

Cable companies are taking advantage of VOD by offering advertisers a shorter lead-time for ad changes, which can ultimately provide direct feedback from consumers. One successful example is Cablevision. Cablevision signed automobile makers in the beginning, but now has signed close to two dozen national advertisers, including Sony Bravia and US Navy. Even though online videos are very popular, they’re meant to be viewed by one or two people. For a family, watching a video at the time they want without running to the video store is a great incentive for them to choose video-on-demand.

Where does the Industry Go from Here?

It appears that Comcast might have been a bit ambitious announcing its plan for simultaneous release so early on in the game. The major theater chains have dug in their heels against it, and the movie studios do not appear ready to fight the battle just yet.

If one were to venture a guess as to the outcome, I would say that eventually some sort of deal gets worked out to cut the theater chains in on the revenue generated from VOD. In reality, this is the only way that the new model becomes palatable for everyone.

With implications for consumers, advertisers, and obviously to the entire movie industry, this will be a great story to follow over the next few years – with no clear-cut resolution.


Jed Michaelson, Account Supervisor Brand Strategy
&
Ted Kim, Media Investment Strategist
Cheil Communications New Jersey

Good-bye, Luke Sullivan. Hello, Cecil B. DeMille.

Do you remember the first time you sent an email? The first time your did a research on Google? The first time you ordered from Amazon?

Who can even imagine life before? Well, there's a new paradigm shift (to use that Web 1.0 cliche). It's YouTube. Internet video. Life will never be the same.

After all, why make the effort to read something when you can have it spoon-fed to you?

Doubt it? Well, how many hours this past week did you read a book as compared to watching TV?

Enough said.

Over the last year I have been watching YouTube daily. I guess it qualifies me to be as much of an expert as anyone. Hey, who would have guessed Google would be the company to rival MicroSoft?

Over those lost hours, I have seen patterns emerge in videos. Certain themes seem to return again and again.

I think this is important. To take advantage of YouTube, you have to know its audience. Frankly, it's no different than being a network programmer.

Here are some of the themes I've spotted in no particular order.

1. Sex: Amazingly enough, it still seems to be a strong motivator of the human race.
2. Mishaps: Some are funny. Some are bloody horrible. Watching your fellow man writhe in pain never goes out of style.
3. Comedy routines: The sketches are frequently funnier and questionably more profane than regular TV.
4. Vlogs: The video version of the blog. The most successful are generally from women.
5. Sport clips.
6. Tech clips: Shots of computer games or short deminstrations of electronic products.
7. Music videos.

Maybe this list isn't all that earth-shattering. But I think it's part of the big picture. (Forgive the pun.)

This isn't TV made small. It's different content from TV altogether.

The content is racier. More amateur. More intimate. It leans to the bizarre. The outrageous.

YouTube viewers don't want to see things they can already see on TV. After all, it's already on TV. The sole exception might be sport clips.

And there's the catch. Bizarre, outrageous, anti-establishment content is not what advertisers generally gravitate toward.

Some advertisers have had some initial success. Dove did a great job showing the manipulation of women in modern media (anti-establishment). Blendtec has breated David Letterman-like demonstrations for itselectric mixers (outrageous). Samsung has had great success with its UpStage contest (bizarre, or at least quirky). These ads are neither serious nor sentimental, the two favored sentiments throughout the advertising industry.

Others have failed. The most notable is BudTV. Millions were spent creating content that no one cared for. Bor-r-r-ing. Anheuser-Busch failed to realize that they are not competing against Miller beer, they are more competing against Jimmy Kimmel.


That's right, advertisers will be competing against the entertainment industry-not against other advertisers.

Think about it: Tivo. Shrinking TV viewership. Collapse in newspaper and magazine readership.

Good-bye, Luke Sullivan. Hello, Cecil B. DeMille.

It's that old paradigm shift again. Just like the last time you...


Philip Wilson
Sr. Copywriter
Cheil Communications New Jersey

Search Engine Marketing

One of the most powerful marketing weapons in a company’s online arsenal is Search Engine Marketing, also known as SEM. A specialized subset of direct marketing, where SEM marketers promote websites and products by increasing their visibility in search results on search engines like Google, Yahoo, or Ask.com. These search results can be organic or paid.


Organic Search

With organic search, each search engine uses its own proprietary algorithms for returning the most relevant results to a user’s request. The more relevant the result, the higher the ranking on the page. Results of eyetracking studies show that most users immediately scan the top left portion of search results pages or the position of the top organic result.

Most companies use in-house experts or third party experts to constantly tinker with their site’s metadata in order to optimize results rankings. ROI calculations for these activities are measured by the cost of such activities against the increases in traffic post-optimization.


Paid Search

Paid search is one of the fastest growing areas of advertising today. Overall, industry monitors say ad spending will be the weakest since 2001 -- growing just 1.7% to $152.3 billion, a marked drop from its previous forecast of 2.6% growth. (TNS Media Intelligence 6/12/07). Network television is expected to grow only 1.3% and newspaper expected to decrease by 2.9%.

By comparison, while slowing from the meteoric rise of 2003 and 2004, paid search is expected to still grow by 16.4% this year.

With Paid search, return on investment measurement starts with the initial organic search metric of traffic generation. However, unlike organic search, with paid search we can also track leads and conversions directly resulting from our efforts, with a discrete quantifiable cost. Companies purchase keywords, knowing that each consumer sent to the website will cost a specific amount. A retail company can then follow that single user through to sale, providing a hard ROI metric. Generally, paid search listing pass the user directly to a sell opportunity with ROI being the efficiency of online search spend to actual sales.

"To become aware of the
possibility of the search
is to be onto something"
-Walker Percy

In the case of numerous companies today, they direct traffic from paid search links to their company portals and then redirects to channel partners.

Due to the circuitous route to sale, our ROI measurement must include traffic generation efficiency, amount of pages consumed and time spent on the site by users, as well as how many leads are passed to our channel partners. To get to a hard number, a monetary value must be assigned to each of these “soft” metrics.

While the DM function of search is generally the most relevant to a sales-oriented company, recently there has been a rise in the discussion of the branding abilities of SEM. Every result, organic or paid, can be viewed as an ‘advertisement’ for the company or product. The reason to use SEM for branding is that, if done correctly, it can be much more efficient than display advertising. By using pre/post search campaign Dynamic Logic studies we can understand any supplemental branding component our search campaigns provide our marketing efforts.


Search and Measuring the ROI of Offline Campaigns

An interesting aspect of search is that it can also be used to benchmark success of offline campaigns. These ‘success metrics’ can be seen in the traffic resulting from organic search, paid search and even social media.

Successful offline campaigns should cause an increase in the number of searches for brands and/or products featured in these campaigns. With geo-targeted advertising (eg. Spot TV, radio or billboards), we can study traffic sources to see if there is a rise in searches from those specific geographic areas.

Offline campaign success will also be evidenced in our paid search results. The number of impressions our paid search terms receive will rise as we gain top of mind status with consumers. Our clicks should rise proportionately and we can measure increases in pages viewed and time spent to provide a pre/post campaign metric.

Search engine marketing can be an extremely efficient traffic driver & sales tool for any brand - used effectively; SEM can provide the most accountable ROI marketing program.


David Glitzer
Director Interactive Services
Cheil Communications New Jersey

Teen Marketing in the U.S.

More than any other time in history, today’s teens are considered a highly desirable target for marketers. Yet this sought-after segment is one of the hardest groups to reach. So why do so many companies bother going after them? The reason is in the numbers:

There are 33.5 million teens in the US today. If they were a country, they would be the 38th most populated country in the world – bumping Canada to 39th.

Last year US teens spent a whopping $179 Billion. Add to that amount the great deal of influence they have over what their parents purchase. For example, the average adult with a teen in the home spent $1,752 on consumer electronic products in the last year, more than $500 over the national average .

With teen spending and influence projected to stay strong, marketers are desperately trying to target this elusive population. There are several factors that have made reaching the teen target difficult:

1. Growing cynicism to traditional marketing methods. Teens want to be entertained, not marketed to.
2. Ability to filter messages aimed at them via electronic devices such as DVRs, PCs and mp3 players.
3. Tremendous rise in online activity from watching user-created content to social networking to shopping online.
4. Going mobile - having a cell phone is essential for most teens.

Finding Teens

Before marketers can reach today’s teens, they have to find them first. Not surprisingly, more and more teens can be found online. It’s difficult to overstate how the Internet has revolutionized what it means to be a teen. From music downloads to blog postings to social networking sites, the Internet is now as much as a destination as is TV. The Internet continues to build influence in every area, taking over the top spot as “Most Informative” and approaching TV as the medium teens “can’t live without.”

Online Teen Facts
92% of teens go online during an average week
86% of teens have access to a home computer
66% of teens have high speed Internet connections

The question becomes,” where are teens online and what are they doing”? The top 5 sites for teens are:

• My Space
• Yahoo
• Google
• Facebook
• YouTube

The top 10 things teens do online:

1. Send emails (69%)
2. Listen to music clips (58%)
3. IM (56%)
4. Visit personal homepages or profiles (53%)
5. Research for school (50%)
6. Play games (45%)
7. Surf for interests and hobbies (45%)
8. Look for stuff to buy (45%)
9. Get daily information (horoscope, weather) (36%)
10. Read an ad (36%)

The key to understanding teens’ online activity is not to think of any of their activities as standalone. Rather, these are all part of teens self-expression and are intricately connected, with YouTube links embedded on blogs alongside “check this out” viral endorsements. Many marketers are turning to “influencer” teens to help spread the word about a product using viral endorsements. Others have turned to providing entertaining content to teens that is “sponsored by” the company. The Internet will continue to become stronger with teens as broadband enables teens to upload and stream their content of choice in their Web 2.0 world. Coupling broadband growth with the introduction of online content over wireless networks means that true interconnectivity has really only just begun.

" Last year US teens spent
a whopping $179 billion"

The rapid wireless adoption among teens has made marketers turn more toward the third screen as an attractive and easy way to reach them. There has been a rapid expansion of basic “extended” mobile activities like taking pictures and downloading ring tones. Now teens have reached a point where they are ready to jump into more robust activities like music and video.

Wireless Teen Facts

• 66% of teens own a cell phone
• 88% use it to tell time
• 72% send text messages
• 60% take photos, 27% send photos
• 23% shoot videos
• 9% bought something

With more teens wanting to use their cell phones for more vigorous online activities such as search, purchasing and mobile social networking, expect to see a rise in smartphone purchases among teens. However, marketers should be aware that teens are even less tolerant of wireless spam than their parents.


Innovative moves by brands trying to reach teens:

Sprite, the third most consumed regular soft drink among teens is making a push into the world of mobile social networking. Its new initiative, called Sprite Yard, will be a full-fledged branded mobile social networking site featuring all the usual elements like profiles, photo sharing and messaging – along with mobisodes & animated shorts. However, Sprite Yard stands out in the teen market because it will be a mobile social networking site. Users will be connecting using their cell phones rather than their computers.
A brand’s bold move into the world of the teen mobile social networking.

Dunkin' Donuts, the number two coffee chain with teens and college students is launching a new website called MyIcedCoffee that allows users to plan road trips and map out its stores along the way. In addition to offering trip planning capabilities, the site features a sweepstakes and user-generated content.


Today’s teens are more connected than previous generations which means they have more messages flying at them from all directions. Marketers have to be smart about how to reach teens today. Whether its’ content wrapping on the CW network, creating a product profile on Facebook or planning a road trip via Dunkin’ Donuts - marketers are continuously searching for new ways to engage teens and to make that brand connection.


Rules for Marketing to Teens:

1. Teens expect to be entertained by advertising, they love to laugh: be engaging!
2. Teens won’t work overtime to get the message (they’re really busy and efficient about messages they consume): get to the point!
3. Teens love the spotlight and they want to feel the message is being sent directly to them, but that doesn’t necessarily mean using teen speak (which most adults really can’t do credibly): be relevant!

Andrea Gretsky
Account Planning Director
Cheil Communications New Jersey

Innovative Branding Concepts for Events

Events have become widely embraced and accepted as a powerful marketing tool. With traditional advertising budgets decreasing in favor of alternative methods to better target and involve the consumer meaningfully, events have risen to a prominent place in the marketing mix. Jack Morton’s recent research found that consumers cited event marketing, word of mouth and the internet as the top media mediums to learn how the brand relates to them and explain “what the product/brand stands for:” (March, 2007). It’s not surprising given events offer a unique opportunity to interact face-to-face with the target audience and capture their attention for an extended period of time, potentially creating a (favorable) lasting memory.

With the many elements that make up events, there are myriad of opportunities to express the brand’s personality, message and logo. This article reviews branding techniques and innovations found in the event industry.

Obvious event branding at events typically involve:

Step and Repeat

Otherwise known as the press board, this is the photo opportunity area where the brand’s repeated logo or slogan is prominently displayed. It's all about branding and keeping it simple; controlling the backdrop for still cameras and B-roll footage.


Projection Screens

Oftentimes flanking a stage and always at the center of attention, large screens showcase a company’s logo, brand messaging and even bullet point lectures and Powerpoints.

Signage

Enlarged graphics decorate walls, hallways and red carpet entrances aiming to become part of the décor but oftentimes simply blaring the company’s logo in case you forgot who invited you or why you were there.

While these traditional branding elements are fine and sometimes mandatory, there are many more unique ways to seamlessly introduce the brand to the events’ guests.

The Tony Awards, repeated their top hat logo and created branded decor throughout the environment showcasing it as clever: chandeliers, table centerpieces, containers for take-home baubles and hanging light fixtures above the bar.




Target used their simple logo as a design element in their space through projected lighting treatments in their space.

A movie premier placed famous quotes from the movie onto the venue’s walls. Vanity Fair carved their logo into a tall topiary wall.


A magazine Company showcased their major titles by fashioning a live décor model in a custom outfit.

Caterer uniforms are often branded and their bodies are sometimes tattoo-ed.


It seems just about anything (or anyone) can be branded these days. There seem to be few limits on creative branding executions. Of course creativity must be balanced with style and a keen understanding of the brand in order to best judge how a brand should be translated into an environment and experience. But that’s for another article…

Live marketing experiences were also shown to be a valuable way to increase marketing ROI:

• 75% of consumers say that participating in a live marketing experience would make them more receptive to the product/brand's advertising

• 75% of consumers said they would be extremely or very likely to tell others after participating in a live marketing event , extending impact through word-of-mouth

• 8 out of 10 consumers who had actually participated in experiential marketing in the past said that they had told others about their experience

The research supports the value that experiential marketing brings to many companies. Spending on experiential marketing has grown to an estimated $166 billion in 2004, a 9% increase over 2003, according to an influential industry trade publication.


Stella Oh
Brand Amp Supervisor
Cheil Communications New Jersey

What's Hot, What's Not - Trends to Watch for TV and Magazine

As we embark on TV and Magazine planning for the fall/early 2008, it is important to note trends in these mediums to ensure optimal client investment. So what are the “Hot” and “Not-So-Hot” trends? Experts from Media Life and Ad Age give us a peek of what’s to come.

According to Media Life’s “Upfront Report” on fall 2007 TV trends, there will be a decline of serialized dramas due to bad ratings. Among the affected shows are: Fox’s Vanished, ABC’s The Nine, and CBS’s Jericho. Additionally, even long-running hits such as ABC’s Lost and Fox’s 24 are declining. Overall, these hit shows are slipping due to the viewer’s lack of commitment. In essence, viewers are looking for shows with story lines that are wrapped-up within the hour, rather than viewing shows that require a higher level of commitment.

On the other hand, NBC’s Heroes is the only serialized drama that’s a hit show. It successfully caught on quickly with viewers, which allowed it to gain traction. Heroes established a connection with viewers, as it allowed them to relate to the characters in the show through escapism, mythology and overall empathy for the characters.

Another TV trend suggests a rise in shows like NBC’s The Office or job related shows, and less attention to family oriented shows similar to Everybody Loves Raymond. Viewers are gravitating toward work-based storytelling rather than family-based shows because the workplace is considered a whole other family. For most, the traditional family isn’t relatable. Furthermore, another dynamic exists at work where all kinds of drama and tension exist. Hence, allowing viewers to relate more to this type of programming.

Networks this fall are also aiming to support shows centered on women; specifically the women of NBC’s Lipstick Jungle. The introduction of this new drama will be used as a means to attract educated, successful women.

Experts also analyzed an interesting TV trend involving teens. MTV’s TRL (Total Request Live) was once a teen obsession, but is now struggling much like MTV. TRL is down 67% from 8 years ago due to MTV relying on older, fading shows, i.e. The Real World.

Furthermore, TRL has been hurt by Youtube.com, since teens can call-up favorite videos rather than waiting a full hour to see them. In an effort to save money, MTV has also been airing TRL episodes two days a week instead of airing them live; thus losing the show’s essence of capturing the day’s top music video choices. Additionally, this “move to tape” has caused speculation that TRL would be cut entirely.

With regards to Magazine trends, the latest report from the Publisher’s Information Bureau (PIB) notes that “Teen” magazines have been on the decline. This has been due to the demise of Elle Girl and Teen People.

Most titles in the “Parenting” category are down, and unfortunately, the print edition of Child magazine recently folded. Cookie and Family Fun are the only “Parenting” magazines that are showing gains.

Media Life notes that “Teen” and “Parenting” magazine categories are on the decline due to the migration of readers and advertisers that are moving toward the Internet.

According to Ad Age, the “Celebrity Weekly” category is also showing signs of decline, which can be attributed to the rise of TMZ.com, a celebrity gossip website. Additionally, the category has become overcrowded; not to mention changes in reader attention toward the overexposure of the same few stars: i.e., Anna Nicole Smith, Brad-Jen-Angelina, etc. Moreover, postal hikes and price wars may also be contributing to the decline in circulation growth. An example of this is Star Magazine, which has cut circulation by 10% to 1.35 million, down from 1.5 million.

Media Life also outlines magazine categories that are showing gains. Among them are: “Women’s Service/Beauty”, “Fashion” and “Shelter” titles. Such gains indicate vitality and a strong position in the marketplace.

Additionally, certain publication groups are responding to these trends by creating innovative ways to incorporate print brands online. For instance, Fox and Hearst are partnering to make a series for broadband and eventually network TV, based on popular magazine titles. An example is the Cosmo Girl project; a serialized Soap with fans contributing to the narrative by submitting suggestions for what should happen next in the story.

TV and Magazine trends are ever-changing; filled with peaks and valleys. Hence, as part of our daily job performance, it is imperative that we stay abreast of these changes in order to make the most viable and optimal client recommendations to maximize return on investment.


Laura Greenfield, Senior Media Planner
Cheil Communications New Jersey

Campaign Spotlight: P3 Reseller Launch

The goal of this campaign was to increase sales via Samsung’s newly designed, benefit-driven Power Partner Program (P3 Program).

Clear objectives were outlined at the start of this initiative:

1. Reposition & clearly communicate the benefits of the new P3 program
2. Increase activity within existing P3 members-community
3. Attract additional resellers to the program to increase sales of Samsung IT products

Utilizing Print Advertising, Collateral and Direct Response efforts helped this campaign to reinforce the benefits derived from being part of Samsung’s P3 Program.

Samsung is one of the few organizations to offer dedicated sales support for their Reseller partners. There are now 3 levels of service associated with this program. Even if you achieve the first level of qualified sales, Samsung will assign a dedicated inside sales person. This is a proven unique and key differentiating factor for Samsung in the highly competitive peripheral Reseller market.

Campaign Results

• 20% revenue growth for Q1 2007 vs. Q1 2006
• 234 new P3 members in Q1 2007
• Average of 1,025 P3 users per month, surpassing the total average active users of 880 per month
• 25,435 opened P3 email communications in Q1 2007- with continually increasing totals per month
• Approximately 80 resellers moving from Bronze to Silver, 12 Silver moving to Gold, and 4 Gold moving to Platinum in Q3 2007

Chris Georgieff
Account Director
Cheil Communications Irvine