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September 4, 2009

Forget Murdoch in Edinburgh: Let’s have a real fight about TV’s “dinosaur bosses”

By Peter Kirwan MM blog

Obviously, it’s a pity that Robert Peston and James Murdoch didn’t come to blows at the Edinburgh TV festival last week.

It’s also a pity that the vast murmuration caused by Murdoch’s speech overhadowed another, equally important, theme at Edinburgh: the impending clash of civilisations between the broadcast establishment and web video.

In this debate, Ashley Highfield of Microsoft (and formerly of the BBC) delivered the provocation, with his suggestion that broadcasters have just two years to create ‘credible, truly digital, brands’before facing what he described as an ‘iTunes moment”. (The parallel is with the music industry, which failed to create a digital business, leaving the way open for Apple to do it instead.)

The organisers of the Media Guardian Edinburgh International Television Festival seemed to take a different view. They chose to kick off proceedings with a feel-good survey written up by Deloitte and researched by YouGov.

Quite clearly, the first line of the accompanying press release was designed to smite the digerati: ‘New report reveals television advertising still packs the greatest punch”. As for the findings, well, if Lord Grade has daydreams, they presumably go something like this:

  • 64% of respondents ranked TV advertising as the format ‘with most impact”
  • Three-quarters of 18-24 year-olds ranked TV ads top for impact
  • Only 12% chose search as one of their top three ad formats (again in terms of ‘impact”)
  • 44% researched a company, product or service online in response to a TV ad.

The accompanying quotes from Howard Davies, media partner at Deloitte, left little doubt that the survey had been an exercise designed to deliver good news:

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“Online advertising’s poor showing relative to television may surprise given that the former has often been portrayed as television’s nemesis.

“However, what television does best – display and brand building is what online struggles with. Online advertising is best at search, which previously newspapers, had excelled at, particularly for classified.”

At which point, it’s worth turning to marketing academic Mark Ritson’s demolition of the survey. In a blog post, Ritson — who currently teaches at the MIT Sloan Management School in Boston — modestly described Deloitte’s findings as ‘absolute and total crap”.

First, Ritson criticised the methodology:

‘It’s not that consumers lie when asked a question like this. Rather, they simply do not know the answer. Self-reporting data has been proven to be invalid for questions as basic as estimating a consumer’s household income.”

Next, he criticised the survey’s relevance:

‘For the past 15 years, no one has cared about comparing one media with another in this binary way. . . Comparing apples with oranges is an irrelevant endeavour in the age of the fruit salad.”

Finally, Ritson lambasted the idea of measuring ‘impact’without taking into account the cost of rival media and the ‘effective frequencies’required to yield an impact:

The last time I looked at a rate card, the price of a 30-second spot was wildly different from that of an outdoor ad. . . In the study, TV advertising was reported to have four times the impact of outdoor advertising. What if an out-door ad costs 20% that of a TV ad, and needs only two, rather than three, exposures to deliver its impact? It would work out to be a superior medium even with a lower reported ‘impact’ score.

The TV industry is in trouble, wrote Ritson, partly because it is ‘run by the kind of dinosaurs who think these kind of reports are good for business”.

Ouch. Perhaps MGEITVF should invite the good professor along to speak next year. He’d stand a better chance of inciting fisticuffs than the ever-so-polite James Murdoch.

Footnote: Mark Ritson (see comments) suggests that Tess Alps of Thinkbox has written a “completely toothless” response to his critique of Deloitte’s research. IMHO it’s anything but that.

We at Thinkbox prefer not to rely on claimed behaviour research, in fact, and instead use rigorous and impartial econometrics to prove that, pound for pound, TV advertising delivers more incremental profit than any other form of advertising, 4.5 times the investment according to PricewaterhouseCoopers.

Decide your yourself.

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