Is television advertising dead? Um, know.

1. is tv “advertising” dead?
May 2009

2. Is TV “advertising” dead?
Or has it just morphed?
My favorite 2009 Super Bowl commercial was for the online video website Hulu: “Hulu,
an evil plot to destroy the world.” This commercial, starring Alec Baldwin, was a
wonderful 30-second mini-film that not only delivered a large audience to the
Hulu website, but also acted as a harbinger of the future of TV and Internet video.
According to Hulu, website traffic surged by 55% during February, 2009 as a result
of the ad. The success was enough to drive Hulu up to 7.8 million unique visitors for
the month and make the site the second-fastest growing property in ComScore’s
monthly analysis.
To dial this up a bit more, the commercial has been viewed over 696,000 additional
times on YouTube since the spot aired.
So, let’s analyze this information:
• People continue to watch TV.
• Television advertising motivates.
• TV commercials have an afterlife on the Internet.
1. People continue to watch TV.
The perception that television viewership is history is incorrect. Viewership may be
morphing, but it does not appear to be in decline.
Here is a quote from the February 7, 2009 edition of the New York Times on a recent
Nielsen report:
“Consider that the average American household consists of 2.7 persons and contains
2.9 television sets, in front of which we sit for record-setting spells, according to Nielsen
figures. In the quarter ended September 30, the typical American watched 142 hours of
television monthly, up about five hours from the same quarter the previous year.”
Where we are seeing change is in the rate of use of television by different age groups.
Not surprisingly, younger age groups watch less television than their parents and
grandparents.
According to Nielsen’s May, 2008 report:
• Adults 18-24 watched 103 hours of television
• Adults 25-34 watched 119 hours
• Adults 35-44 watched 124 hours
• Adults 45-54 watched 145 hours
• Adults 55-64 watched 160 hours
If you are approaching 65+, settle into that Barcalounger. The 65+ crowd watches a
whopping 178 hours of television per month.

3. 2. Television advertising works.
Citrus employs virtually all analog and digital media to help our clients reach their
B-to-C and B-to-B audiences. However, no single medium generates awareness
like television. While online advertising is efficient and its effect can be tracked to
conversion, it does not deliver high-volume awareness as quickly as television.
Additional benefits of TV advertising include:
• It tells your brand story via sight and sound
• “Players” use TV
• It’s intrusive and grabs attention
• It creates a personality for your brand
• TV comercials get talked about
Even with this good news, advertisers have concerns. One fear is generated by the
constant drumbeat that targeted interactive advertising is more effective than the
ambush nature of TV commercials. Another is that people “hate” TV advertising. Well,
they might hate it (any more than pop-up ads?), but they still respond to smart
messaging, as evidenced on the Hulu comercial.
Advertisers are also concerned that Digital Video Recorders (DVRs) and their dreaded
fast-forward buttons are killing the benefits of day-part viewing. This killer may be
coming, but according to research, it hasn’t arrived yet.
While 25% of American homes have DVRs, slightly less than 5% of viewers are
time-shifting (watching shows when they want vs. when the networks want). No, this
low number does not make sense given the obvious benefits of DVRs. However, this
is what Nielsen reports.
Despite today’s relatively low time-shift numbers, the trend indicates that time-shifting
will increase. Time-shifted television grew 50% from 3 hours 44 minutes to 5 hours 50
minutes per month from May 2007 to May 2008. This will be compounded as DVR
penetration reach grows to over 50% of households by the end of 2010, according
to the Carmel Group.
1979 Coca-Cola - Superbowl ad 2009 Hulu - Superbowl ad

4. 3. Television commercials have an afterlife.
The Hulu commercial blew past its Super Bowl debut to continue its reign on the
Internet. There are over 100,000 Google results for that particular spot. Add these
numbers to the audience of the original television commercial, and you have a fairly
dramatic winner. From the old days of CBS, NBC and ABC, distribution has become
exponential.
We produce television commercials, long-format commercials and corporate videos.
In all cases, we are excited by the seemingly limitless distribution options.
Consider just some of the options available today for efficient distribution of a
TV commercial.
• Your television set
• Video sharing sites like YouTube
• High-traffic news sites
• Commercial-supported streaming video sites like Hulu
• Corporate websites
• In Banner ads
• Video pre- and post-roll “commercials” on websites like CNN
• Social media sites such as Facebook and MySpace
• Blogs and Podcasts
• iTunes
• Good, old-fashioned DVDs
• Cinema advertising
• Flash drives
• Mobile phones
• Peer-to-peer distribution via email
• Tradeshows and Events

5. The largest growth will clearly come from video on the computer monitor
and mobile phones.
Internet video viewership is no longer a novelty. Nielsen reports that 119 million
Americans watched 26 hours and 26 minutes of video, or 7.5 billion streams, on
the Internet in May 2008. I initially missed Jon Stewart’s roasting of Mad Money’s
Jim Cramer. However, I watched the show a couple of days later on both YouTube
and the Comedy Central website.
It’s not just TV shows that are being watched online. Burger King’s “Whopper
Freakout” commercial has been viewed over 360,000 times on YouTube.
Not surprisingly, teens and Gen Y are more likely to watch videos online than older
age groups. According to the PEW Internet and American Life Project, 57% of teens,
72% of Gen Y (18-32), 57% of Gen X (33-44) and 49% of younger boomers (45-54)
watch videos online.
If you are a marketer targeting younger age groups, this is significant and will
dramatically affect your media selection. However, we strongly believe that older age
groups will increase their online video usage rapidly as online video becomes ever more
prevalent. (It’s hard to miss, right?) In fact, the 55+ group is the fastest growing social
media demographic.
Video is moving to the mobile phone. Yes, slowly. But surely.
Americans watched on average 2 hours and 19 minutes of video on their mobile phones
in 2008. These numbers will grow as a result of the increase in video-capable phones
(now 36% of all phones), powerful smart phone brands like the iPhone and the
Blackberry Storm, and faster 3G networks. Mobile carriers are also helping with free trial
video services and lower pricing.
If you are wondering what the future of mobile video looks like, look to Japan.
A recent survey of Japanese mobile phone users by the research firm Net Asia
indicated that 57.6% of mobile phone users watched videos on their mobile phones
in 2008 (up an impressive 13 points from the last survey in April 2007). Mobile video
is omnipresent in Japan.

6. Where do we go from here?
First, the obvious: Not all TV commercials are created equal.
Some are downright embarrassing as they deliver neither a clear, motivating message nor
the benefits of entertainment that comes from a great concept, smart copywriting and
professional production. The success of the Hulu spot is directly related to the power of
its creativity and excellent execution. The takeaway is that in order to benefit from the
inherent power of TV and extended distribution, the commercial itself better be darn
interesting in the first place. Unless you want to go viral for the wrong reasons (because
your advertising is so lame it is worth sharing), make sure the creative is powerful.
A second point is that not all distribution is created equal. Some distribution will happen
organically, a là “Wow, I want to pass on that new Nike spot via email.” However, some
viral opportunities will require that you first consider your audience (demographics and
viewing mind-set) and then the technical attributes of the new distribution channel.
Whether it’s the original 30-second format or a new edit, just slapping your commercial
into an interstitial unit at the beginning of a CNN video might not cut it. Simply
broadcasting it on a 2-inch mobile phone screen won’t work, either.
Rumors of television’s demise are greatly exaggerated. The truth is, TV advertising still
works. It may even work harder than ever before. But, yes folks, you will need to work
even harder, as well, to extract and leverage the TV commercial’s new-found power and
incremental reach.
Put “Partner with a business that knows how to create attention-getting, ROI-generating
TV and videos” at the top of your to-do list. Followed by my phone number. Then call
me. We can discuss how you can leverage our TV expertise to meet your objectives, this
white paper, how great “30 Rock” is. Anything really.
Peter Levitan: 541-550-4220 or plevitan@citrusbnd.com
To read more great Citrus white papers, visit citrusbegin.com/whitepapers
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