Saturday, September 6, 2008

Online TV Grows in Popularity

Weill Cornell Medical College in QatarImage via Wikipedia Mike Saxon
SVP, Brand and Communications

Online TV Viewership Has Doubled in the Last Two Years. Mike Saxon joins us on this week's program to discuss this phenomenon.

How does online TV change the business model?
How will online TV and traditional broadcast TV intersect?
What Interactive capabilities come along with online TV, and how will that change the industry?

Mike has been with TNS since April 2007, and is responsible for the Media Optimization area within the Brand & Communications research business. In his role, Mike helps clients improve their ROI across their marketing efforts and enhance their web and mobile usability. He is also leading the digital advertising effectiveness initiative for Brand and Communications.
Before joining TNS, Mike ran the wireless sector research team for IAG Research, an advertising effectiveness measurement firm. In the role, Mike worked with the major US carriers to ensure that their TV and Mobile advertising executions were consistent with their corporate objectives. He also pioneered the development of new methodologies for tracking mobile advertising. Prior to IAG, Mike spent much of his career with the VNU organization. With Nielsen/Net Ratings, he led the development of media measurement products around the globe. Previously, he built and ran the ACNielsen Advanced Modeling team servicing the Nabisco unit of Kraft Foods.
Mike holds a BS in Labor Relations from Cornell University, and an MS in Business Administration from the University of Illinois.

The Interview:

JC: So how does Online TV change the business model?

Mike: You know this is the real interesting thing, right? In the old days, you had TV which was just on one screen and to measure it was pretty easy. You had your Neilson folks and you measured what they watched. And that worked real well for the business because if you knew who watched the TV show, you know who’s saw the advertising. And remember the business is the advertising.

JC: Yes

Mike: In the short term, we now have a big problem because the TV shows are being shown on mobiles, they’re being shown in your bedroom, they’re being shown at work. And you know what, the measurement systems haven’t caught up yet. So there’s a lot of talking going on in the media industry about well, how much should we be charging for the advertising. And it’s a big problem.

JC: Yeah

Mike: The longer term, and here is where we get into the interesting part is we’re gonna stop worry about how many people saw a TV show. We’re gonna worry about, stop worrying about how many people saw Lost. We’re gonna start thinking about how many people saw the Ford ad.That’s what we’re gonna start thinking about. Cause it’s real easy to track the advertising now.

JC: It really is, isn’t it?

Mike: And what’s amazing is, that that advertising will be targeted to you, to me differently.

JC: Yeah.

Mike: Based on where I live and where you live. And how much I make and how much you make. You and I could see very different advertising.

JC: Yeah, that’s true. So, how will TV and traditional broadcasting intersect?

Mike: Well, ultimately, they are going to be the same. This is the other neat thing. They’re both going to digital. And what that means in real life is that you and I as individuals can talk back. The TV comes in but we can talk back. What that means is, on one hand, the folks who are broadcasting the TV know if we are watching. And number 2, we can fast-forward and rewind, and we’ll be able to do that both on line and interactive. Ultimately they’re going to be the same thing. IF you think about it today, right, you probably have broadband at home. I’m just guessing.

JC: Yeah!

Mike: Is the company that provides your internet the same company that provides your TV?

JC: Certainly, yes.

Mike: Ok. So really, what’s the difference? You can view it on your computer, you can view it on your TV if it’s the same type. Though ultimately those two things are going to come together and you’ll just decide, do you want to watch on your big screen in your living room, your little screen in your office or your screen in your bedroom. And web broadcast will be sort of a meaningless distinction.

Morris: I have a question, Mike. This is Morris ????. I remember back in the early 90’s when Bell Atlantic and a couple of the other big names in the industry, when they were talking about voice and video and streaming over the same twisted pair. Is this the realization of that technology, pretty much?

Mike: Yeah! You know that was really before it’s time. Are you talking about the Orlando experiment?

Morris: Absolutely.

Mike: Yeah. You know that was really before it’s time. I mean video on demand if you think about it, has now been around for a few years and that’s what they were trying. This is really taking a step beyond that and saying, rather than saying, I have a screen in my office where I have my computer and I have a screen in my living room where I have my TV and I interface with my computer in one way and I interface with my TV in another way, it’s all going to be the same.

Morris: So really, if, well, let’s just use me for an example, as a business owner, I can now have the ability to target my market more effectively because they are just using one monitor, it’s all coming in through the same pipeline, and then I can actually let me know, you know I’m not worried about what show their watching, because I really don’t care, I just want to make sure they’re gonna watch my ad

Mike: Exactly. You’re exactly right. What’s happening now is if I know you are a small business owner. I know for example that there are gonna be certain types of ads that I’m gonna want to show you. And I’m gonna wanna make sure that they get delivered. So I’m gonna A. Know that your TV is on. Because I’m gonna be able to know that because it’s digital.

Morris: Sure

Mike: Right and I’m gonna know that it got delivered to a running TV. And I don’t really care if you saw it in the office or you saw it at home but I’ll know which TV was on.

Morris: I’ll know which TV was on. And I can even, am I mistaken in saying that, the technology is already there that I can know that if there were five monitors in the residence, how many monitors were on.

Mike: Exactly

Morris: Cause that can take place now when you look at the cable company when how they deliver the new, the other version from the local telephone company.

Mike: Exactly, so here’s where that’s right. So you will know exactly which screens are on. Now if you want to go one step further, the obvious question is, but you don’t know if Mark was listening. His TV may have been on. Here’s a really neat way to get beyond that. What there’s two things that can happen. One that’s happening right now. Is there are panels of people for measurement, who walk around with a special cell phone and every 6 seconds it picks up what noise they’re listening to and uploads that and we can get a sense of any advertising that they’ve listened to whether it be out of home or in the house or radio in the car, what have you. That technology could also be applied to set top boxes. Is anyone actually in the room to listen? Do we hear voices? Ok.

Morris: Well, I’m just sitting here. I’m the conspiracy guy here.

JC: He’s becoming terrified.

Mike: And I’m feeding into that aren’t I?

Morris; Right. Cause I’m wondering now with television going digital. We’re looking at television, is the television going to be looking at us? Because now your talking about telephones in a pocket that tells people what the noise is around them. Well , will you all be sitting in your office looking at us through our television screens?

Mike: We may not be looking at you….

Morris: But you’ll be listening…

Mike: I’m just a measurement guy. We may not be looking at you but they may be listening. Absolutely.

Morris: Yeah. Through the television.

Mike: If you think about it, if you just simply want to know, what did the person listen to my ad? Were they there? Now, that’s an easy way to do it. Now, let me tell you something. I used to work for Neilson. He is big brother if there ever was one. I can tell you straight up, very honestly, Neilson or any of the other broadcasters have absolutely no interest in your personal life. I am having worked for big brother, I am not a conspiracy theorist. Cause I know how the data actually works….

JC: The capability, yeah….

Mike: And there’s really, it’s safer there than it is with your neighbor. Just as a….

Morris: Well then television will come…. Well then the next step is to move telephones through televisions….visual telephones….with the digital age, right?

Mike: Absolutely, and that’s already here. Most, I don’t know about your area but where we do research now we ask folks who’s your telephone provider. And right now in major urban areas, for starters you get upwards of 30% of young people, actually don’t have a land line phone. And then when you ask the remainder who provides their phone service, I don’t remember the number but a very large percentage gets their phone not from the phone company but from the cable company. Or over Vios. Fiber Optic.

JC: Yeah. Cause even like last year, Sprint did a promo with us where they asked us to use their Spring phones. So we were actually watching Sprint TV too via the telephones. But I just want to also go back to the discussion Jerome and Mike were having in reference to listening. And what Mike was talking about and listening to what users are doing was are they actually listening and watching TV or are the users watching TV, that’s a concept that’s sort of tracking, whether or not they’re watching the commercials, have they seen the commercials, not that the companies are listening to a conversation that’s in a house.

Morris: No, I didn’t say that. But the capability is there.

Mike: Well I don’t – but that’s no ones goal because….

Morris: They don’t care.

Mike: Yeah, that’s know one’s goal. The goal is simply to make the advertising. It’s really at the end of the day, it’s about relevance. The reason they do this and the reason they’re trying to target and listen is because they want to serve you ads that you’re gonna pay attention to . The end of the day it’s actually better for you.

Morris: I have a question Mike. When you take a look at how you have the monitor and the provider, whoever their provider is has the ability to just send out….. is it going to work the same as the digital alarm companies do where they just send out the pulse and the pulse just picks up audible noise or are they really going to have something where you have to give them permission to do it. How do you see that playing out?

Mike: Oh, I would imagine this would be permission only.

Morris: Okay.

Mike: I don’t think you’re ever going to get to a case where they’re, you know that’s a really good point, where they’re listening to what you’re doing without your knowledge. I mean that’s …. No one would be contemplating that.

Morris: Because that’s when I was listening to you and Jerome have the initial conversation. I know a lot of people would probably, just from listening, to it, it would sound as if, okay someone is monitoring what I’m doing. And, you know, that could be disturbing and I could see someone getting a little upset about that.

Mike: Oh, that would be terribly disturbing and no, no, nobody’s contemplating serendipitously listening without your knowledge. And thank you for clarifying that. Certainly not anything that any of the media companies are contemplating.

JC: If you’re just tuning in, you’re listening to the Technically Speaking Radio program on 1540am WNWR Your New World Radio Station. We have the pleasure of speaking with Mike Saxon who is the Senior Vice President for Brand and Communications for TNS. And Mike is responsible for Media Optimization area within Brand and Communications Research business. In his role, Mike helps clients improve the return on investment across their marketing efforts and enhance their web and mobile usability. Now Mike, you talked about Online TV growing in popularity, what interactive capabilities will come along with on line TV and how will that change the industry?

Mike: Well I think that’s another really exciting development is what’s gonna happen ultimately is all the things we have on our TV - rewind, fast forward, play, pause – and TIVO capabilities, the recording capabilities, the ability to store, are all going to be constant across your broadcast TV and what your doing in your office. And what that means, really is, again this shift from appointment TV to content on demand. So you as a consumer are going to be able to decide when and where you want to watch and how much you want to watch at a given time. And the industry then moves from worrying about show dates to simply release dates. It’s an idea of releasing content in to the world frankly , and letting it find it’s outlets. So what’s exciting then for the population is that it’s far more control over what your watching and when. And it’s a great great development for the population and for the industry. It means that you again move from paying attention to who’s watching this TV show between eight and nine and who’s watching it over the next week or two weeks on what platform. To understand who saw your show.

Jerome: You’re talking about advertising, Mike. This is Jerome again. I just see target audience for TV commercials. But I’m like….I’m like that little guy that you probably won’t be targeting Lear jets too but I want to see a Lear jet commercial. You know what I mean? Would I have to watch a golf show to see that? You know I’m sitting there, and maybe not in that realm of people who can afford that then you won’t be targeting me with that thing….or high end cars….or that type of thing if I’m not …

Mike: You know that’s an interesting question. Targeting advertising is a double edged sword. What I mean by that is, there’s always going to be room for mass market advertising. There’s an old adage, Big Brands didn’t get that way by targeted advertising.

Jerome: Right

Mike: Right. Oreos didn’t get to be Oreos by targeting only, you know, kids. But it targeted everybody. But there’s always gonna be mass market advertising. What we’re really talking about it, a good example would be a car advertising, Lear jet advertising is one…that would probably be more targeted. But that’s in general good for everybody because there is whole slots of the population that aren’t interested in certain ads and why show them? You’re just wasting everyone’s time.

Jerome: Well I mean it. I’m just putting out there ….it just goes to the imagination of what could be…. It just expands a child’s imagination….you know what I mean? A lower income child that they could look for. You know what I mean?

Mike: I absolutely see what your saying. I think you’re right. Smart marketers will keep that in mind. I think you’re absolutely right.

JC: Yeah, cause this is one of the few times I have to agree with Jerome because they’re a lot of things I watch that are different than what people on my block or even in the city might want to watch. I really like dirty stuff like Squawk Box, I like to watch that. And there are things I have to watch because of what I do for work. Or you know, they may not have anything to do with my individual personality. So it’s going be difficult for I think the robots to manage and market to me as an individual as I would buy for myself and what I might buy for a client.

Jerome: Because they’ll start forming….certain types of people….because you JC are a nerd…

JC: Thank you, Jerome.

Morris: This is Morris. Maybe you can just clarify my thinking and correct me if I’m wrong but if I’m the person who’s doing the advertising, JC, I’m really working at not just the demography of where you’re living at, I’m really looking at the show that you’re watching and at the same time, lets say you’re in the Philadelphia market but your looking at a time share. I’m still gonna have my advertising tied to the type of person who would watch that type of show.

Jerome: That’s what you can’t do, Morris. Cause as I was growing up you probably want to advertise Hip Hop to me but I was looking at Inside Edition.

JC: What you’re saying is something that they do now. They do what we call geo targeting or geotags … for geography. And that means the Philadelphia market. That’s or the Pennsylvania market.

Morris: But I’m saying once you have this technology, if I’m looking at… who can I target market insurance to….and I look at what type of person would buy this product. Well age 50 to 80. What type of shows have they traditionally watched? Well, they watch Bill Nye, the Science Guy. So I want to put my commercial associated with Bill Nye the Science Guy. It doesn’t matter what time you watch it or where you watch it but t when your watching Bill Nye, the Science Guy you’re going to see my commercial.

JC: But only for consumers in your market of Pennsylvania.

Mike: The point is while that’s one way to market using goes…. It’s really kind of course. Cause there are a lot of people 50 – 80 who are not necessarily interested in insurance, maybe they got it earlier.

Morris: That’s true.

Mike: What you’d really be more interested in finding out…you know what you’d really like to do is advertise to people who have spent the last couple weeks searching on line for insurance.

Morris: That’s another way you can do it. But as I’m saying the technology is good for not just targeting traditionally, you can mold it because now the person who’s watching the monitor doesn’t have to be just tied into watching Bill Nye the Science Guy at a particular time. They can watch it whenever they want. And I don’t care when they watch it or where they watch it as long as they’re watching it. And on the marketing end, I want the person who’s doing the research to tell me what type of person is going to watch this show.

Mike: You’re 100% right. That’s exactly right. So, this is your basically, the analogy you’re drawing there, if I may, tell me if I’m wrong here, taking the internet advertising model which is say if I want people who are interested in finance whether that advertising on which is expensive, let me advertise somewhere else which is less expensive to people who have visited And on TV it would work the same way. I know this person watched Bill Nye the Science Guy at some point. Maybe I don’t want to advertise on that show but I can advertise to those people who watched the show at a different time.

Morris: That’s right. I’m more interested in the type of person who watched that show and I need to know more information about them. Their age, what else do they watch, what else do they purchase… So what I’m saying is when you combine the two medias, I make lots of loot. If I’m really willing to get good at it.

Mike: Right and I do think it’s worth pointing out here that this is really less scary than it sounds. AT the end of the day what you’re doing is that you’re ultimately helping people, you know, if they have a need…if you have a product that you think has value…your simply making sure that you’re reaching those people.

JC: Exactly. Qualified buyers. So Mike, we really appreciate you joining us here on the Technically Speaking Radio Program.

Mike: It is absolutely been my pleasure.

JC: Have a fabulous, tech filled week.

Mike: You too.

JC: Bye bye. You are listening to the Technically Speaking Radio Program on 1540 am WNWR Your New World Radio Station. We’ll be right back after this break.

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