A MEMO FROM THE MOUNTAIN

P&G and Unilever Agree. There’s Less TV in Their Futures.

By Erwin Ephron

Three seemingly unrelated events. A rumor that swirled around the ANA conference hotel. The last :30 in the Super Bowl had just sold for $3 million to a dot.com — roughly double the going rate. ABC’s head of sales, Marvin Goldsmith, said the rumor was "wrong on both counts. It wasn’t a dot.com and it wasn’t the last unit."

A mystifying announcement from Unilever. Henceforth media strategy will lead the advertising development process. Will lead? Since when does media lead anything?

Then, an inscrutable statement from P&G. Agency compensation will be based on brand performance and will be media neutral. Media neutral? Since when do P&G agencies dream in anything but living color?

These seemingly unrelated events chart television’s bumpy future. Like land in the Hamptons, it has become too dear for the natives. P&G and Unilever, the people who invented the slice-of-life commercial, see a time when they won’t be able to afford it anymore.

On this bleak canvas the two announcements make perfect sense. Media strategy must be set before creative work begins or all Lever brands will get TV commercials — regardless of the final media plan.

P&G’s performance-based compensation tells the agency, TV won’t make you rich and famous anymore. Indeed, thinking TV when the brand is going elsewhere will cost you, because TV concepts translated into other media make less effective advertising.

Lever and P&G are pushing different buttons and telling their agencies the same thing. Take other media more seriously, because we can’t continue to spend most of our budgets in television.

The networks will argue TV is a demand-priced medium. That current pricing-levels will drop in a cooling economy and bring packaged-goods dollars roaring back. Perhaps, but don’t bet on it. For decades, television has been the cheap bread of advertising, so abundant that other media were condiments. The real threat to TV is if packaged goods brands are forced to use other media, they will learn to use other media, and mix of media will become a more effective alternative to mostly TV.

This is not a discontinuity. The growing interest in media-mix is simply another stage in the transformation of advertising, which began five years ago with Recency planning. When Recency established reach as advertising’s primary media goal, prime time had already become too costly for most brands. Fragmentation and optimizers suggested a different path. Advertisers could buy reach, cheaper, through dispersion. Media-mix is a continuation of that dispersion strategy, expanded now media.

But the decline of television has been the whip for more rapid change. In the face of strong demand and shrinking inventories, the networks have raised prices and added commercials. Both make television less effective. Advertisers know this and want options. The movement of major dollars to other media is becoming evident and when media-mix optimizers arrive, the pace will speed up. Two are already in the works from SuperMidas and IMS and hidden in the SuperMidas specs is another wake-up call. The agency "A list" for media-mix are TV, Magazines and the Internet.

So these seemingly unrelated events chart the bumpy future of television. It once was the cheap bread of advertising. Now the big guys are saying they can no longer live by bread alone.

- November 15, 1999 -
Originally published in Advertising Age

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