Certainly New Zealand is way down the list when it comes to understanding, let alone implementing, online strategies with traditional media. However this is going to change – and quickly.

The UFB rollout and savvy business operators like the masters of the Pacific Fibre initiative to build a new cable into NZ (Sam Morgan, Rod Drury and Stephen Tindall) will give consumers access to speeds previously never seen on these shores, meaning that launching interactive campaigns within the confines of traditional media become a key ingredient to the future success of a brand.

As viewing habits change, so too does one-way advertising. Add to this our almost blithely naive attitude to sharing our every offline moment with our online ones, and marketers here will be watching with interest those countries where the impact of the ‘second screen’ while watching television is gaining some serious traction.

The advent of the second screen

While Samsung, ASUS, Blackberry (name your brand!) try to play catch-up to Apple, the iPad is only into its second iteration and already according to data from Yahoo/Nielsen, 86 percent of web users in the US access the internet via a mobile device such as the iPad or iPhone while watching TV. Armed with this information, content providers and advertisers are looking to complement the viewing experience with the online platform in order to create stickier audiences and increase ROI.

But how is it being done?

Tag a TV ad, get a free Pepsi

iPhone app IntoNow has partnered with Pepsi in a promotion that rewards users with a free drink if they manage to ‘tag’ the drink maker’s TV commercial.

IntoNow works much the same way as Shazam or Soundhound, however, instead of recognising songs or music it recognises television shows.

According to IntoNow founder and CEO Adam Cahan: “This is the first time where consumers can close the funnel between a brand experience on a TV commercial right down to a real-world drink you can consume.”

IntoNow has 600,000 users and generates between 25,000 to 35,000 tags per day. Not bad going. Earlier in the year Yahoo bought a similar concept from IntoNow for $20 million – that’s some nice action, if you can get it.

Shazamed!

Shazam doesn’t want to identify what you’re watching but it does want to help you unlock prizes. Mega brands like Honda, Starbucks and Paramount Pictures have partnered with Shazam where radio and TV ads can be “Shazamed” to unlock free music, buy tickets or purchase an entire soundtrack.

Shazam is on about 45 million phones and tablets – that’s a ton of phones to point at tellies and radios and earlier in the year it raised $32 million to push into the TV market.

Web-ready TVs

Sky TV recently launched Soho and now the ridiculous Igloo channel is on the horizon, but how much longer will Kiwis be tied into paying exorbitant prices for premium content?

Coming back to the fact that we have incredibly slow internet speeds, US-based content streaming provider Netflix said in November 2011 that it hadno plans to enter the NZ market due to low internet data caps and problems obtaining content.

On the back of data out of the US, 65 percent of TVs sold in 2012 will be connected to the web, so perhaps the UFB initiative will arrive just in time for some of us to adopt this trend.

Freeing the consumer to enjoy the content of their choice will open the doors to hyper-targeted advertising pitched at the level of the audience rather than at the level of the show. Personally, I can’t wait to not have to endure the Harvey Norman guy yelling at me every second ad break.

Don’t believe online TV will take off? YouTube does and is investing $100 million in premium content. Still not convinced? Considering YouTube has made its money on the back of thousands of ridiculous cat videos and Charlie biting his brother’s finger, imagine the cash it can make showing premium content. Cue cash registers ringing as advertisers fight dirty to have their logos on screen.

Social TV

Twitter hasn’t exactly taken off in New Zealand, however it is used extensively during shows overseas to generate chatter or what producers used to call the “watercooler effect”. The X Factor became the first reality show to allow voting via Twitter and the stats backed up the decision to test the waters.

Perhaps it’s not revolutionary stuff but online sentiment (“Shortland Street was epic tonight! or “Shortland Street is going all Ramsay Street – yuck!”) is social currency for success or failure and gives instant feedback for networks.

So while TV advertising is best for telling people about a new brand or reaffirming a brand’s presence, online is about sharing and socialising. Although IntoNow, Shazam, Twitter and YouTube are not game changers, they do answer the question about why a consumer decides to engage with a brand in a social environment – to win prizes or get something for free. And in doing so it just so happens they have found a way to successfully merge both the offline and online worlds.

• This story originally appeared on idealog.co.nz.

Those viewing out-of-home were more likely to be male, younger and Aucklanders. No word on whether the 19 percent of the nation that weren’t watching were stuck in trains or whether, as is often the case overseas, there was a huge surge in water usage and power during half-time toilet and tea breaks.

The first game of the RWC was the biggest TV event in New Zealand’s history, taking over from the Tua vs Lewis fight and Charles and Diana’s wedding.

“This illustrates the power of television in making such a wonderful event accessible right across the country,” says Claire Harris, managing director of Nielsen TAM, New Zealand.

Of those that watched the game at home, TV ONE led the ratings compared to Sky Sport, with a 53.6 percent share of total cumulative viewing audience of 1.9 million across ONE, Sky, Maori TV and the Rugby Channel. TVNZ Ondemand added 25,000 streams.

MediaWorks publicity manager Rachel Lorimer, who has also worked in a similar role at TVNZ, says she has never seen a press release based entirely around another network’s show, especially one that could be so commercially damaging.

“And if you’re going to do that, you better make sure you’re right,” she says.

The TVNZ release claimed the average audience for 60 Minutes had fallen to 130,060, when in fact it grew its audience in April to 256,500 people aged 5+, an increase of eight percent on the average 5+ audience for March, which was 237,600.

TVNZ news and current affairs PR manager Andi Brotherston says she’s put her hand up and said sorry for the mistake and admits it’s not good for the network’s credibility. She puts the reason for the stuff up down to the total number of viewers being divided by eight shows, rather than four (60 Minutes is repeated on the weekend).

As well as getting the average number of viewers wrong, Lorimer says the earthquake inflated the show’s February ratings, “so the figure of 422,100 quoted by TVNZ is an outlier and cannot be compared meaningfully with other months’ ratings”.

“Only one episode of 60 Minutes screened in February, and this episode was broadcast on 23 February, the day after the Christchurch quake,” she says. “Not surprisingly, ratings were unusually high.”

Given TVNZ sends out ratings releases so often, you would think alarm bells would’ve gone off over such a massive audience decline. Brotherston says the reports came from the research department, but they are automated and while Brotherston did think it was a surprisingly big fall, she says she didn’t query it because she knew 60 Minutes was in so much trouble, with MediaWorks currently reworking the whole show, long-time 60 Minutes staffer Amanda Miller joining TVNZ after the Wellington branch was shut down and the move to a new time and a new night to try and compete directly with Sunday, which averaged close to 600,000 viewers last month (add that to MasterChef’s numbers and Brotherston says it’s killing MediaWorks on Sunday nights at the moment, although Lorimer says the Comedy Gala on Sunday night “won its timeslot in the 25-54 and beat MasterChef in the key demo”.)

MediaWorks sees things differently, of course, and says moving 60 Minutes to the premium slot on Sunday night is recognition of the confidence it has in the show and the ability of its staff to break stories.

Adding to the broadcaster’s recent release war, the monthly stats for April show 1,602,100 of New Zealanders in TV3’s target 25-54 demographic watched Firstline, 3 News, Campbell Live, Nightline, The Nation or 60 Minutes for their news, compared with 1,578,900 watching Business, Breakfast, ONE News, Close Up, Tonight. Q&A or Sunday on TV ONE.

A key contributor to TV3’s audience reach is Firstline, which ended the month with an average 11.7 percent share in the 25-54 demographic. In contrast, Breakfast lost share for the second consecutive month, ending April down 12 percent compared to March.

ThinkTV, which has been in the pipeline for a few months, was created with the help of ad agency Religion and will represent free-to-air television in New Zealand, has emerged from the cocoon of the New Zealand Television Broadcasters Council, which chief executive Rick Friesen says was set up with two major objectives: 1) to be a lobby organisation for the industry and 2) to manage the Qantas Film and Television awards.

“That was really the extent of it. But the broadcasters felt it needed to have a broader focus; it needed to start marketing the medium to marketers and agencies,” he says.

ThinkTV (which is also helping to draw attention to the best ads on telly by sponsoring the TVC of the Week section on StopPress), will continue to undertake these two major tasks, but Friesen says the new focus will be on increasing awareness of the benefits TV can offer. Friesen was only employed part-time in his role with the NZTBC but, with more funding now available from the broadcasters, he is now joined by industry experts Rob Hoar, Nicky Dunn and Di Winks in a new Auckland office. ThinkTV will also be able to commission a range of original research for the industry as a whole, not just individual broadcasters.

With the dominance of TV as a marketing channel, some might feel as though TV didn’t have much need to market itself. But Friesen believes there has been a need, it’s just that the industry hasn’t done anything about it. And, in this time of media fragmentation—and changing media consumption—where so many other media choices are now available, he says this more cohesive industry approach is long overdue.

Optimisim abounds as the new industry body is launched, and the positive vibes look set to continue after revenue figures for 2010 from returns prepared by TVNZ, MediaWorks TV and SKY Network Television (including Prime) showed a 6.6 percent increase in revenue compared to the year before, with an additional $37.5 million going into the coffers.

Total revenue was $606.7 million, compared to $569.2 million the year before. Still, it’s got a long way to go to get back to 2007 levels, when total TV revenue reached $654.4 million for the year.

“After feeling the effects of the economic downturn and tightened marketing budgets, television has bounced back with an impressive performance in 2010. The June quarter posted the best performance with 11.27 percent growth,” says Friesen.

Total revenue for the December quarter was $171 million, which was a 4.2 percent increase on the same period last year. And while Friesen says that’s a drop from the 11.3 percent year-on-year growth recorded in the third quarter, he believes it’s part of a long term upward trend.

After the last quarterly results, telcos, retail and energy were the major spenders on TV. But, aside from saying that automotive advertising was on the up, he didn’t have any specific trends to report for the fourth quarter data.

“It is encouraging to see the feelings of optimism flagged in 2010 have been echoed in this improved performance. We are looking forward to a good year ahead for television in New Zealand especially with the Rugby World Cup in September and October,” he says.

“It was a fantastic year for us: PUTS were up, time spent viewing was up, and our audiences were maintained—and grown in some areas”, he says. TVNZ’s news and current affairs offering is still working very well, he says and, while the “incredibly strong growth in the third quarter” looks to be continuing after Christmas, he predicts this year will be one of recovery.

The biggest news for TVNZ in 2011 is the addition of a new youth-focused, advertising-funded, social media savvy channel called U. As the government’s public broadcasting funding for the digital channels is set to run out in the 2011-2012 financial year, it was decided that the TVNZ6 frequency would be commercialised (TVNZ7 will bring “the best of both public digital channels”, although seemingly without the Ad Show on the books).

The channel (check out a reel here) will be broadcast from midday to midnight and eight hours in the schedule will be first run content and Maher says the departure of MTV from the local market and the demographic shift from C4 to FOUR left a gap in the market. He believes there are enough advertisers still wanting to talk to a younger audience.

Every night from 8.30pm to 10.30pm themed programming will cater to a different audience taste. And on Sunday nights, viewers will get to be the programmers by entering a competition via the channel’s Facebook page and website. The winner will effectively “own” the slot and choose what viewers watch.

TVNZ’s head of digital media and channels Eric Kearley says U is “the first true technology-driven integration of online social media with television in New Zealand”, something Maher says aims to tap into this younger market’s rampant desire for their ‘ten minutes of fame’.

Maher says it’s too early to say whether it’s going well or not. But he says the launch on Wednesday went very well, with around 150-200 people in attendance.

“The feedback from the market has been extremely positive, both around the need for a local youth channel and around the fact that we’re trying to build a bridge between the TV business and use of the internet,” he says.

When you look at its iPad, iPhone, PS3 and catch-up offerings, TVNZ certainly seems to be well ahead of the competition. And Maher, who has come out of international markets, says the Ondemand service is as good as he’s seen anywhere in the world. The numbers back that up, with double digit revenue growth right through the year, stream views up 25 percent year on year with a high of 1.8 million streams in one month and awareness of the Ondemand service in the high 90s.

“Ondemand is commercially viable … We all know that video played through the internet globally and locally is growing. And New Zealanders are definitely using it more.”

Ondemand offers benefits to the viewers, of course, but Maher says Ad Selector, which gives viewers the ability to choose the ad they view, also offers brands some great opportunities in the digital space.

TVWorks has also been innovating through content changes in an effort to snatch away viewers from ONE and TV2. But Maher admits he was slightly surprised that MediaWorks decided to create two mainstream focused channels.

“It takes a lot of content to fill two mainstream channels. And if you look at the ratings, PUTS are up, but I wouldn’t say that TV3 had a great year in ratings terms.”

TV2, however, is sitting pretty and celebrated a bit of a milestone late last year after achieving 100 consecutive weeks of the highest ratings among 18-39 year olds, with 19 of the top 20 programmes among 18-39 year olds on TV2.

Whether the new channel offerings from the networks will manage to squeeze any new blood out of the New Zealand advertising stone or just create more mouths to feed from the same pot remains to be seen. But putting the TVWorks demographic changes to one side, Maher says the whole market is getting tougher.

“Sky and Prime are a strong competitor now, whereas they probably weren’t five years ago. In the past 15-20 years it has become an absolute force in terms of viewing and access to premium content,” he says.

And, in a very competitive—and seemingly ever-changing market—he says the best way for TVNZ to compete is through innovation.

• Analogue TV is either dead or on death’s door overseas. How long has it got to live here?
• How to catch the elusive black swan.
• Are you overlooking the oldies?
• The paywall prognostications come thick and fast. So how is Rupert faring?
• What people really think of advertising?
• The social media horse is starting to bolt. And there’s still time for marketers to try and mount this difficult beast.
• Tips and tricks for post-recession category management.

Digital dominance, analogue obsolescence

Forgive us if we shed a tear for times gone by. Last month, for the first time since John Logie Baird had a bit of a brainwave, there were NO sales of analogue TV sets in the UK, according to the latest figures from Digital UK (the organisation responsible for helping viewers switch).

We shouldn’t feel too bad. In place of “any colour you like, as long it’s black and white” models (and their multicoloured successors), now our British brethren can purchase digitally enhanced versions that are sleeker, smarter, brighter and breezier—and come in a dazzling array of options and acronyms. And, actually, most of those choices are available to us, too.

But there’s a price: not just planned but programmed obsolescence. Where once we might have clung to our Philips K9 Colour sets for a decade or more, now we can expect to swap out our tellies every year or two just to keep up. That 46 inch might have been okay for the FIFA World Cup, but you’d better get serious for the Rugby World Cup. Anything less than 150 inches, 3D, and you’re just not a true Kiwi.

So the UK’s running out of analogue (they’re in a phased closedown mode, switching off region by region) and the US has already gone completely digital. How are we doing in Aotearoa? A quick check with Freeview tells us that (at last quarterly count) 23 percent of us have Freeview-capable sets or set-top boxes in our home; and around 48 percent of households are now 100 percent digitally served by Sky.

We can’t quite add the two figures together and conclude that 71 percent of the country is now digital-ready, because many of those Sky homes have gone Freeview as well. Our own estimates suggest that the real number is closer to 60 percent.

In other words, by our calculations 40 percent of Kiwi homes are still resolutely analogue. The Ministry of Culture and Heritage is apparently indulging in some more robust digital tracking analysis, quantifying the real numbers of luddites and bleeding-edgers out there, which we may find out in a month or so. Till then, we’ll stand by our calculator.

By the time the Government announces the analogue switch-off date (the announcement, not the switchoff, is expected in 2012), we’re picking that total digital penetration will be around the 75 percent mark. It’ll probably take another three or four years to get above 90 percent and minimise collateral casualties of the analogue kind when the final vacuum tube is unplugged.

Television’s on a bit of a roll at the moment, with TV spend figures in recovery mode (up 7.7 percent YOY for the second quarter, according to the Television Broadcasters’ Council) and overall viewing figures (per TVNZ) “at the highest levels for week 28 ever for All People 25-54″.

And we’ve recently spotted a couple of new channels hitting the airwaves — Asian channel TV33 on Freeview and Christian broadcaster DayStar on Sky. Clearly their backers still believe the old televisor has a future.

Guess we haven’t all switched our affections to YouTube, then.

Catching the Black Swans

The UK’s Office of National Statistics is reporting that 30 percent fewer British holidaymakers headed to New Zealand last year. That’s part of an overall drop in foreign travel by UK residents that saw 10.4 million fewer trips abroad in 2009.

Our own Ministry of Tourism (observing that major economic reforms in the UK and Europe are now inevitable and economic growth rates are likely to remain low over the next 6-12 months at least) forecasts a further five percent drop in UK visitors in 2010, an eight percent increase next year (thanks in large part to the Rugby World Cup) and then a return to 2009 levels in 2012 and 2013.

Overall, however, in its just-released “Forecasts 2010-2016″ document, the Ministry is predicting a 3.7 percent increase in NZ inbound tourism for 2010 and a 6.8 percent increase in 2011. According to that report, the long-term outlook has improved markedly in recent months due to the following factors.

• A shorter, shallower global economic downturn than previously anticipated and the expectation of a more stable economic climate in 2011 and beyond
• A range of new long-haul services operated by foreign carriers which will open up new markets and increase competition on key inbound routes.
• The emerging long-haul low cost carrier model (e.g. Jetstar, AirAsia X) which is likely to deliver major benefits for remote locations like New Zealand.

The report notes that amongst the challenges that have faced the New Zealand tourism industry in recent years, “New Zealand’s share of voice has been diminished by competing destinations and an absence of promotional pedestals such as the Americas Cup and Lord of the Rings”. In comparison, the projected improvement in tourism numbers is largely predicated on structural and economic changes rather than what we might call Black Swan factors (Nassim Nicholas Taleb’s label for high-impact, hard-to-predict and rare events). Which makes for more accountable forecasting, even if the results aren’t as headline-grabbing.

By definition, Black Swan events are rare and difficult to predict—and thus no basis for a solid business case, whether for a brand or a country. However, one of the measures by which Black Swan effects can at least be considered goes by the name of Scenario Planning. Call it the “What If?” strategy: asking a series of “What If?” questions to examine the different possibilities if various likely or unlikely events came to pass. The practical implications of a wide range of outcomes are explored, and appropriate responses considered, at least on a conceptual level. And that can be well worth the effort, as much for a marketer as for a government official.

Are You Overlooking The Oldies?

Much of today’s marketing is aimed at the younger end of the population. Popular trading demographics include 20-39s, 20-44s 18-39s or 18-49s. If your target audience is really skewing older, you’ll daringly opt for those aged 25-54. Talk about covering all the bases.

However, as Nielsen USA has just reminded us, older folk not only have feelings, they have disposable dollars as well. In particular, the Baby Boomers (currently aged 46-64) “are an affluent group who adopt technology with enthusiasm (think about the number of parents or grandparents who regularly send e-mails or upload photos to Facebook and other sites). They have also shown a willingness to try new brands and products”. In the US they spend 38.5 percent of FMCG dollars—yet less than five percent of advertising is targeted their way.

Nielsen points out these facts about Boomers:

• Dominate 1,023 out of 1,083 consumer packaged goods categories
• Watch the most video: 9:34 hours per day
• Comprise 1/3 of all TV viewers, online users, social media users and Twitter users
• Time shift TV more than 18-24s (2:32 vs. 1:32)
• Are significantly more likely to own a DVD player
• More likely to have broadband Internet access at home

The Nielsen analysis concludes: “At a time when most analysts are predicting much slower growth in consumer spending, manufacturers and marketers need to look at every opportunity to grow market share. Boomers can represent tremendous potential to those who know how to reach them.” As a Baby Boomer myself, I think it’s great to be ignored by marketers; we get to make our own choices and not have endless sales fluff thrust upon us. Putting on my marketing hat, however, I grudgingly admit there’s a lot of money left on the table if you’re not attempting to extract it from the older generation.

Realistically, however, we don’t imagine the industry at large will let the facts get in the way of a good youth-skewed marketing strategy.

Will Pay, Won’t Pay?

Rupert Murdoch’s grand experiment in the UK, switching The Times and The Sunday Times to paid content, is now underway, with user registration compulsory on both sites from June and paywalls erected from the 2 July. How are they doing? A whole Paywall Prediction industry has sprung up, as commentators, bloggers and the popular press try to calculate a) at what point the papers would lose readers, at registration or when the site switched to paid; b) just how many online readers the papers have lost; c) whether the new revenues offset the loss in exposure; and (d) if they should be happy or sad about the presumed outcome.

First, a little bit of perspective: the Sunday Times’s editor, John Witherow, predicted in May that “perhaps more than 90 percent” of pre-registration readers were likely to be lost once the registration-only service was implemented. Any losses less than that would presumably be hailed as a victory. Secondly, we haven’t yet seen any official figures from News Limited, which means, of course, that the pundits are free to speculate (and indeed they do).

Australia’s B&T Magazine does its sums and notes:

In the five-week pre-paywall period of registering, traffic dropped 58% between 22 May and 26 June, with The Times’ share of UK traffic falling from 4.37% to 1.83% [based on Experian Hitwise figures].

The UK’s Guardian newspaper adds its own spin, doing a series of “If..Then” back of the envelope calculations which have the effect of turning a 58% traffic drop into this:

“The Times has lost almost 90 percent of its online readership compared to February since making registration mandatory.”

Based on their number-crunching (we’ve mercifully spared you the details), the Guardian then concludes “if the estimated 15,000 daily online users who agreed to pay opt for the £2 a week deal, the paywall will generate £120,000 a month – £1.4m a year.”

Worth doing? The Guardian holds its nose, point out that the two papers are losing around £240,000 a day (so by implication these online revenues are a drop in the bucket). All of which may be true. But we’d be pretty happy with turning zero subscription revenues into a million pound or so a year. Accordingly, our paywall goes up tomorrow.

You Like Us, You Really Like Us

As part of the report “How We Shop in 2010″, 954 UK residents (18 and older) recently told Econsultancy what they thought of advertising. The results gladden our hearts in some ways, leave us heartbroken in others.

The respondents told the researchers that they appreciate advertising when …

• 57% “It gives me a discount”
• 46% “I learn something new”
• 37% “It’s a valuable exchange of my time for free stuff”
• 35% “It’s fun and entertaining”
• 24% “I get it myself on demand”
• 5% “Someone sends it to me”

We’re sad that consumers are so easily bought (will they stay that way?”). But we’re happy that new, fun and entertaining still count.

The ‘How We Shop in 2010′ Report also found that:

• Over a third of consumers (36%) say that receiving an email prompts them to make an online purchase.
• Nearly two-thirds of consumers (61%) use search engines to help them in their product research decisions leading up to purchase.
• Three-quarters (75%) of those aged 18-26 use recommendations on social sites to help them research products prior to purchase
• Two thirds (61%) of consumers expect to receive delivery notification via email.
• The lowest priority for consumers when considering purchasing a product is the price.
• Electronics and computing (23%) is the category most likely to be researched online by consumers

If you’d like to purchase a copy of the UK report (or its US counterpart), both are available from here.

Are You There Yet?

The numbers are in (via the just-released Nielsen 2010 NZ Social Media Report). This Social Media thingy is catching on. 82 percent of New Zealand internet users may not have been to paradise but they’ve been to Facebook. So what? More than 99% of Kiwis watch television on a regular basis. What’s all the fuss about? It’s the conversation, stupid. Marketers in every business sector are waking up to the fact that consumers are turning for guidance to a whole new range of experts: each other.

Study after study has shown that consumers trust their friends (and their friends’ friends) more than anyone else when it comes to making a purchase decision. According to Nielsen’s new Social Media Report, 1.92 million Kiwis now look to their fellow Internet users for opinions and information about products, services or brands. Alas, you may have a comprehensive training programme in place for your staff, agents, branches and resellers, but now there’s a whole new constituency to inform, entertain, educate or with whom you now need to interact.

There’s a whole lot of talking going on, much of it happening in the social networks, and some of it may well be about you, your brands or your products. In a perfect world, those who are doing the talking would know all about your products and would give wise, totally informed advice to their correspondents.

Unfortunately, that’s seldom the case: many of us feel free to venture an opinion on a subject even if we don’t really know the facts. Which is why marketers need to venture forth into the social media space, preceded if necessary by someone carrying a red lantern and a white flag, warning onlookers of impending newbie behaviour.

Consumers will interact socially with brands and their owners if the opportunity arises. 44 percent of Kiwi Twitter users say they have ‘followed’ companies or brands via the site, according to the Nielsen report. New Zealand companies are also jumping on the Twitter bandwagon, with 30 percent of marketers saying that their company has established a presence on Twitter.

The more nimble members of the business community have already hammered up their shingles on Facebook and Twitter. Now it’s the turn of the Early Majority. A moment of candour here: for many, it won’t be easy. Traditionally-trained marketers are now finding themselves actively having to consider communications tools that (or at least so it seems) have the lifespan of a mayfly yet have instantly become insanely popular with consumers all over the world.

Most marketers have a comfortable familiarity with brochures, print, TV and radio ads and direct mail. They’ve learned to use (or at least live with) websites, email, search engines and the occasional online banner advertisement. But social networks scare them silly. The vast majority of today’s business executives are not “digital natives”. They grew up (and, by and large, went through the bulk of their professional training) before the internet changed everything.

For many, social networks are the place where anarchy reigns (in the form of uncontrolled consumer activity and comment). Some worry that the Facebooks and Twitters of this frightening new world will be marketing graveyards – the place where brands are most at threat. And there is a risk of that happening – at least for those brands and organisations that don’t play fair with the consumer.

For most organisations, however, social networks are really just another communications tool – if marketers can overcome their most basic and heartfelt concerns. And the best way to deal with those fears? Knowledge. Read a book, Google your heart out, take a course, attend a seminar.

Social sizzlers

On that social media note, here’s a plug for our latest creation 100 Sizzling Social Media Case Studies, a carefully-selected collection of social media campaigns from NZ and around the world, explored and analysed (and full of ideas worth stealing). From just some of these social media case studies you’ll learn:

• How this Kiwi organisation has attracted nearly half a million Facebook fans in less than twelve months
• How one major manufacturer actually invites its fans to come to the factory and help build what they’ve just purchased (and charges them an additional fee of more than US$5000 for the privilege)
• How a retail organisation has cleverly used Facebook photo tagging to create a very viral campaign
• How one business has combined offline and online channels to generate even better results than either medium alone
• How speaking your customers’ language and engaging in conversations — with zero hard selling — has delivered results four times more effective than traditional advertising
• How leveraging coupons in social media delivered outstanding profits for one global operator
• How using social media communities to capture and catalogue “lightbulb moments” has given this multinational organisation great ideas generated and endorsed by raving fans
• How social media can help retail establishments engage with regular customers and can, perhaps more importantly, help them target people who visit sometimes but not yet regularly
• How using location-based applications can be a very effective method of raising money for charity
• How even those business categories that might expect to struggle in the social media space can engage with their constituents and provide an enhanced brand experience over and above existing relationships
• How a private online community of 200 teachers and 100 mums helped redevelop a 60-year-old resource to better serve the needs of today’s kids
• How one operator whose target is business users used social media effectively to engage with stories relevant to its audience’s careers
• How a social media campaign achieved 38% awareness of the product amongst Gen Y without spending a dollar on traditional advertising
• How a single tweet sold out a 32-city national tour in 2 hours
• How a brand new beer was created through crowdsourcing (and achieved 250% more in sales than original projections)
• How a social media strategy helped a fledgling startup achieve four live-or-die goals: build awareness, drive acquisition, loyalty, and advance product innovation. Oh, and win a few awards along the way.
• How an authentic and relevant online voice for a beloved 130 year old company helped build relationships with online communities of passionate consumers
• How companies are turning Social Media into sales by leveraging Brand Advocates (and how one company is getting a 59% conversion rate to action by energising its Advocates)

And those tantalising tasters represent just a small portion of the 100 Sizzling Social Media Case Studies within this book. And yes, it is a book, for you to add to your bookshelf. We’re only publishing 100 copies of this special edition, and there are only 84 copies remaining.

Why are we publishing so few? Because we want the purchasers to be able to examine the Case Studies and take advantage of some of the ideas they contain, without worrying that everyone else in town is going to use the same ideas. That’s also why we’re having the book printed, rather than offering it in PDF format—we want to restrict its circulation, for the benefit of those who’ve supported us by buying the book.

The book will be published on August 15 and if you pre-order the book (do it here) before 31 July, the price is just $97 +GST (that increases to $127 after 1 August). If you order and pay before 5pm 26 July, shipping’s free.

We’re resting our Social Media Marketing eCourse for the moment (Series Three is currently in progress, but if you do want to join in, latecomers are welcome—you proceed at your own pace anyway. See the website for the details). However, we have also had a number of requests for live presentations that demystify social media and make it accessible for traditional marketers, so we’ve developed a couple of offerings that are available for those who prefer to learn from in-person training. If you assemble a group of colleagues or clients, I can come and make a personal presentation. Think of it as non-virtual social media, if you like.

If you’re interested, please contact Michael Carney on michael@netmarketingservices.co.nz for course details, availability and pricing.

Post-Recession Category Management

We thought we’d share a small part of the 2010 Grocery Manufacturers Association (GMA)/PricewaterhouseCoopers (PwC) Food, Beverage and Consumer Products financial performance report [email michael@netmarketingservices.co.nz for a copy], this particular section dealing with category management:

Cautious consumers currently spend an average of 30 minutes per visit in grocery stores, hunting for value and focused on products that provide both convenience and quality. They scan each aisle of SKUs for a few seconds, largely ignoring the thousands of advertising signs blanketing the store. How can retailers capture the most value from those fleeting seconds?

Reducing the clutter is a popular tool for optimizing value from shelf space. For example, a struggling regional grocery chain optimized the assortment for its pourables (salad dressings) category, which had lagged behind market growth for years. In a mere three months, sales for that category rose from a double-digit decline to positive growth.

Quick wins are not unusual. A non-grocery retailer reduced its SKU count in writing instruments by 15% and saw category sales rise 7% and profit 3%.11 A drug store chain streamlined its assortment after four years of declining sales in its general merchandise category and saw category sales rise by almost 15%.

The cuts are often deep. Walmart, for example, has embarked on a rationalization program that will see 15% of SKUs removed from the shelves in the U.S. For retailers, making room for private-label products is one impetus toward SKU optimization, yet both manufacturers and retailers recognize the benefits of reducing complexity.

‘For years,’ says Coca-Cola North America’s Duane Still, ‘we have been laboring under the assumption that consumers demand more choices. Across the industry, there has been a proliferation of SKUs that retailers have to carry and we have to manufacture and inventory and source ingredients for.’

Partnering with manufacturers to drive category growth presents advantages to retailers of any size. For manufacturers, relationships with retailers are top of mind as they work to protect their margins, gather point-of-sale data, and push digital offers (e.g., e-coupons) to consumers in the store. The hypothesis is that as retailers and manufacturers work to optimize their SKUs, they are eliminating the non-profitable items which would lead to an increase in earnings.

Retailers expect their manufacturer partners to provide a category perspective rather than a brand perspective—and that includes a deep knowledge of the consumer and engagement in driving category growth. ‘Even during the recession, we didn’t cut back on advertising and promotion,’ explains McCormick’s Gordon Stetz. ‘Retailers expect you to invest in tools, innovation, technology, merchandising—all those elements that drive growth. If you aren’t, you will be pressured to up your game.’

Driving growth and protecting margins may lead manufacturers to trim SKUs long before retailers do. ‘Over the last couple of years,’ says General Mills’ Don Mulligan, ‘we’ve reduced close to 25% of our SKUs in the U.S. And our net result is actually better because the 80/20 rule absolutely applies to SKUs. Focus on the top 20% of your SKUs that are really turning and creating profit.’

Furthermore, remember that, due to the law of diminishing return of margin, the bottom 20% of SKUs drive less than 1% of sales.

Cutting SKUs provides room to innovate, but the criteria for selecting new products have changed. ‘We’ve been forced to think differently about price and attractiveness to consumers,’ says Mulligan.

‘Incremental products, like a new flavour of cake mix, may not achieve the margins we want. Consumers value the convenience and quality of a product like Betty Crocker Warm Delights [singleserving, microwaveable desserts]. These SKUs will help us achieve greater sales with higher margins.’

A collaboration to drive category growth requires manufacturers to offer objective advice when it’s the retailer’s turn to drop SKUs. After all, says Mulligan, ‘Every manufacturer has slower-turning SKUs and you need to be ready to identify your own slow turners for elimination if you want your advice on which products to add to have credibility with the customer.’

Any advice from the manufacturer also needs to include realistic positioning against private labels. Steve Neil of Diamond Foods explains: ‘With nuts, we are not going to price at parity with private labels, which are targeted to consumers who are all about value.”

‘We are interested in another segment: professionals who cook in a meaningful way only occasionally,’ continues Neil. ‘That consumer says, “I am going with a brand I know and trust. My mom bought Diamond. I know it’s been around a long time and that’s what I’m going for.” We manage the category so there are probably not as many private-label SKUs on the aisle, but they are certainly there.’

Trust between trading partners results in an optimal assortment. Manufacturers can provide consumer and shopper data while retailers provide data from loyalty cards, point-of-sale registers, and other sources. Together, they can analyze the combined data streams in light of the retailers’ strategy and consumer trends. The manufacturer’s data might help prove that an SKU has sufficient value to be kept, or it might highlight an SKU whose day has passed.

Factors to Consider When Sorting Through SKUs

Consider keeping an unprofitable or slow-moving SKU if:

• Selecting the SKU generates a larger basket (customers tend to buy accompaniments for the SKU).
• The SKU is important to the store’s core customers.
• The SKU is important to enough customers during certain stages of their lives. Baby laundry detergent, for example, may be a slow-moving item because the majority of customers do not have small babies. However, keeping this segment of the detergent category represented on the shelves is important for grocery stores that serve families.
• The SKU differentiates the store from its competitors or is offered exclusively at that store.

Even consider adding an SKU if:

• You need it to differentiate yourself in the marketplace or simply to compete with similar stores.
• Your target consumer segments want it.
• It will improve your sales, profits, turns, or competitive edge
• Nobody likes to lose shelf space, but sometimes triage is the only practical solution.

Like the division between sales and editorial (or subs and journalists), there have always been separate fiefdoms inside large media organisations. That’s certainly been the case within TVNZ and, by all accounts, there is still a noticeable separation between the print and online departments at the NZ Herald. But TVNZ’s head of news and current affairs (NCA) Anthony Flannery hopes to change all that with a new proposal that aims to group TVNZ’s NCA department into four areas – newsgathering, daily programmes, current affairs and operations.

Newsgathering will get the daily stories, daily programmes will decide how they would be shaped for the programmes and platforms they will feature on and operations will take care the logistics. As for the maths, 31 roles will have to be disestablished under the new scheme, but 14 new roles will be created, which means that out of the 258 strong NCA team, about 15 people, including two current affairs reporters and some producers, editors, camera operators and support staff, could lose their jobs.

Flannery says the current TVNZ model is based on the hero bulletin of yore, the 6pm news. And while it’s obviously still important, rampant digitisation means people can now get their news anywhere, whenever they want it. That’s what consumers of news are demanding, so, in response to this evolution, he says a group of news and current affairs managers spent one year looking at how different broadcasters in Britain, Europe and North America had responded. They had all changed their processes and practices over the last ten years to create multi-media operations, and TVNZ, while lagging behind slightly on this front, is now officially following suit.

Part of the strategy is to create a group of journalists, producers and camera operators that are more comfortable creating content that will, as the slogan goes, be able to inspire New Zealanders on every screen. As such, 150 staff will soon undertake a training programme for six months to learn editing skills. Some TVNZ staffers already edit their stories, particularly when overseas on assignment, and it’s common practice for reporters working for major news networks.

Flannery calls the new structure, which will cost $1.5 million to implement but save around $3 million a year, “programme and platform agnostic” and says it is based on the philosophy of ‘make once, publish many’.

“Instead of a number of different programmes all chasing after the same story and duplicating resources, a reporter and a producer will see a story through the whole day across a number of programmes and platforms.”

So is this a logical response to the challenges of a digitised world? Or is it media homogenisation in the face of shrinking journalistic resources that merely limits the variety of content on offer? TVNZ already ‘repurposes’ stories from its broadcast arms and puts it on tvnz.co.nz; Close-Up will always take a different approach to the 6pm news; and there are already plenty of stories that flow on from one news bulletin to the next. There are, of course, some obvious changes with this new approach, but in some ways it seems slightly reminiscent of  the way Fairfax spun the closure of The Independent, saying it would enhance the business journalism offering in print and online.

Like the demise of The Independent, it also raises some interesting questions about journalism because story ideas and follow-ups will be driven from and gathered back to a central hub. When Fairfax moved a big chunk of its subbing resources to a central hub it reduced costs, but anecdotal evidence from the writers, mostly in the regions, who had their copy sent there said this centralised approach also reduced accuracy.

With information now expected almost instantly online, media speed is increasingly of the essence. And as The Independent’s Jenni McManus said on NZI Business after the closure of paper was announced, competing in this space often means being first and wrong is considered better than being late and right. As news and current affairs slowly moves away from filling pre-determined timeslots (and, if this new structure is any indication, away from filling space on dedicated shows that have specific producers and editors) and with reporting teams under increased pressure to write, voice and file from the field and provide stories for online, mobile and hourly news bulletins, it will be interesting to see if the quality of journalism seen on these many screens will decrease.

Of course, TVNZ has been talking up its move to multi-screen media for a while now. Some believe the national broadcaster is rearranging the deckchairs. But in this revealing interview that featured in the latest issue of Idealog, TVNZ’s new head of digital Eric Kearley he says the future is exciting and for him it’s all about adapting to change and co-operating with what were once competitors in order to prosper.

Interestingly, while big changes are afoot with TVNZ’s NCA structure, the numbers for its good old FTA TV shows are looking fairly healthy: Breakfast had its biggest increase in average audience since 1999, with ratings 20 percent higher for the first six months of this year compared to the same time last year and it also had its highest ever audience a few hours after the All Whites drew 1-1 with Slovakia.

Between January and June this year Breakfast averaged 174,000 viewers per morning compared to 122,000 viewers during the same time period in 2009 (after three fairly embarrassing journalistic mishaps as a result of the Jono Project’s media tomfoolery, maybe everyone’s watching just to see if they get punked again?). Men made up 60 percent of that growth and while the cessation of Sunrise certainly bolstered its numbers, Sunrise only had around 20,000 viewers per day, so the extra 52,000 viewers in total can’t be attributed entirely to that.

In June, the 6pm news averaged 700,000 viewers per night, Close Up notched up an extra 88,000 viewers per night than in May, Fair Go and Sunday attracted over half a million viewers per episode and, with over 200,000 viewers per night Tonight lured 40,000 more viewers on average than Nightline.

And in comparison, 3 News averaged 419,180 viewers per night and Campbell Live averaged 260,810, so there certainly hasn’t been too much trumpet blowing from the Mediaworks camp of late.

In his debut performance this morning, Heeringa discussed tidal power and road trains as part of TV3′s ASB Business show, which screens weekdays at 6.30am.

When asked about his appearance this morning, Heeringa apologised for the invasion of Poland.

But before you shriek in despair at the thought of having missed the exciting first installment, fear not. With the power that is ‘On Demand Television’, you can check out this morning’s appearance here. And feel free replay to your hearts content. New segments will appear on the last Thursday of every month. Wishing you happy and insightful viewing.

* Vincent Heeringa on Thursday’s ASB Business vs Rhys Darby on similar Thursday business breakfast shows

• The whys and wherefores of Catch Up TV in New Zealand? How does it stack up?
• The year that was in TV land: it was the best of times, it was the worst of times.
• Facebook hits 400 mill. Happy sixth birthday.
• Statistics New Zealand’s suite of online tools small businesses quick and easy access to information.
• Marketing Rebooted: e-courses focusing on all things 2.0 to get you up with the play

Must See TV?

The new television season is upon us and, apparently, there’s never been a better time to camp out in front of the telly and prepare to be dazzled, stunned, blown away or simply have your life transformed. The reality may be a little more prosaic. But what’s especially new, different and paradigm-shifting about this new season is the sheer volume of shows that are available for viewing on Catch Up Television on local broadcaster websites.

Most TVNZ local and imported shows are available on Replay TV, along with a substantial number of TVWorks offerings. Aotearoa is finally doing its own catch up with the rest of the world. A couple of global statistics to illustrate the point:

As long ago as March 2009, French studies were indicating that 52 percent of the internet-users questioned said they were watching free TV programmes on the Internet after their broadcast. The Dutch Public Broadcaster said that catch-up TV service Uitzending Gemist grew 25 percent in 2009 compared to the year before.

Why do people watch catch up TV? A Nielsen Company analysis in January 2009 identified the following reasons why consumers watch Replay TV:

• 54% I forgot to watch a specific episode when it aired on TV
• 47% I am catching up on the current season of programming because I missed a large number of episodes
• 33% I am catching up on a past season of a programme before the next season airs
• 32% I forgot to record a specific episode with my DVR or TiVo when it aired on TV
• 18% Another member of my household watches another programme at the same time as the show I want to watch
• 12% I watch TV programming online when I am at work
• 12% I watch TV programming online when I travel

This explosion of viewing options is good news for Kiwi viewers, but increasing headaches for television buyers trying to capture the eyeballs of programme-watchers. And let’s not even talk about the plight of our colleagues at Nielsen, trying to collate the disparate outputs of analogue television, Freeview, TiVo, Sky, MySky, MySky HDi, Telstra Cable (and now the internet) into a composite statistic that somehow catches the reality of what’s happening out there.

Plans are afoot to expand and enlarge the television research resources, but it won’t happen overnight. For now, let’s just be grateful for one positive side-effect of the recession: increased viewing figures.

New Zealand Television and The Year That Was

It was the best of times, it was the worst of times. That well-trodden phrase pretty much sums up the year that was 2009, at least for New Zealand television broadcasters.
Audience levels were up, up, up. Advertising revenue was, well, let’s not even go there. The NZ Television Broadcasters Council finally had some good news to share last week: The average viewer watched three hours 17 minutes of TV every day in 2009, an increase of nine minutes per day or 4.8 percent over 2008. Not only that, but more people were watching in total: on a daily basis, 2.94 million people watched television last year, up almost 63,000 or 2.2 percent over 2008.
We do need to put these numbers in a little bit of context: television viewing levels do rise in recessionary times, as typically do movie attendances. We may not be able to afford that fancy new car or indulge in that Manolo Blahnik footwear obsession, but by golly we can still manage some small indulgences.

Facebook Hits 400 Million

On Friday, Facebook celebrated its sixth birthday. Founder and chief executive Mark Zuckerberg also announced the social network had just attracted its 400 millionth member. Guess it’s going to be around for a while then.

In New Zealand, Facebook now has 1,220,920 members – and it’s friending its way into Kiwis’ lives fast.

Both locally and internationally, marketers are extremely keen to learn more about social networks – it’s become abundantly clear that today’s consumers expect major brands and companies to be present and active on the key social networks. If they’re not around, consumers are first surprised, then angry and eventually vitriolic. Tough reality, but that’s the 2010s for you.

New Stats Tool For Small Business

Statistics New Zealand recently released Business Toolbox, a suite of online tools that provides quick and easy access to information for businesses.

Business Toolbox contains two online tools: Market Mapper, which can be used to find target markets and potential customers, and Industry Profiler, which provides details on industry performance over time, staff turnover and survival of similar-sized businesses.

Business Toolbox is available on the Statistics NZ website – www.stats.govt.nz/businesstoolbox

We love the information available through Statistics New Zealand – we just wish it was a little easier to find on the website. Hopefully the Business Toolbox offering will help with that.

Reboot Camp

If you’re one of those marketers keen to learn about the new breed of tools collectively called 2.0, you’ll be interested in our upcoming series of e-courses on what we’re calling MARKETING REBOOTED – the things that marketers need to know to flourish in a digital world.

The MARKETING REBOOTED e-course starts on 1 March. We’re keeping the numbers low for this first programme, so if you’re interested, please drop us an email at editor@marketingweek.co.nz.

That’s it for this edition of MARKETING WEEK. It would be remiss of us not to point out that Ye Editor is now available for consultation and contract assignments (including presentations and keynote speeches) in relation to consumer research, trend analysis, eMarketing, eCommerce, writing and media. Contact: editor@MarketingWeek.co.nz.

You’ll can also read these stories on the Marketing Week blog. Just click on the headlines and be amazed by the power of the internet.

• A new TV channel debuts and its, ahem, stablemate graciously moves over.
• Who’d pay $5160 for a used appliance? Trade Me’s top ten auctions for 2009.
• The battle for control of the living room continues to rage.

Take a couple each way and see the business. MediaMonitor 7-Dec-09