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A Left-Brain Approach to Marketing Planning

According to Forrester Research, marketers are losing faith in the power of TV, and as a result, they are pumping less advertising spending into the channel. In a joint survey with the Association of National Advertisers, Forrester found that more than three-fourths of national advertisers think that traditional television commercials have become less effective in the past two years.

Merrill Lynch analysts predict that upfront spending increased only 3 percent this year, compared with an estimated 8 percent increase last year. What's behind the TV advertising decline? Apparently, a combination of small shifts are creating significant downward pressure on the TV ad spend.

Changing TV ratings measurements -- DVRs are changing how 13 million American households watch television today, and they will reach another 52 million American households within the next five years. DVR users report skipping 92 percent of the ads in recorded programming. In this year's upfront (ad selling market), TV advertisers avoided having to pay networks for CPMs in recorded programs. But this may change in November when Nielsen begins delivering average commercial ratings for programs.

What it means for advertisers: Nielsen's new measurements will reduce the guesswork (and the risk) of upfront 2007, as well as making it easier to target ads by average commercial ratings among different demographic groups.

Changing media consumption patterns -- Consumers no longer focus their attention only on their TV while they sit on the couch -- they're also online, talking on the phone, or reading a newspaper. And multitasking behavior is on the rise, threatening to fragment consumer attention even more and making TV ads increasingly less effective. Consumers are also tending to spend more time on the Internet than watching TV. This is especially true of young consumers, which means that this trend will likely continue. Gen Yers (ages 18-26) spend 12.2 hours online per week and 10.6 hours watching TV, compared with Older Boomers (ages 51-61), who spend 6.6 hours online and 13.7 hours watching TV.

What it means for advertisers: Marketers will shift spending from TV to online ads and marketing technology platforms such as marketing automation and contact optimization. Standalone TV ads -- without a connection to the Internet or a word-of-mouth campaign -- will be proven less effective.

New alternatives for advertisers -- Advertisers in the know -- like the three-fourths of respondents who have taken notice of TV ads' decreasing effectiveness -- are turning to alternative and emerging ways of reaching consumers using the Internet and other connected channels like mobile. Word-of-mouth, blogging, and advergaming campaigns allow the customer to interact with the brand and can create trust and loyalty. Ads that invite consumers to participate create more lasting impressions than the passing 30-second spot.

What it means for advertisers: More marketers will tap new online channels that open lines of communication with their consumers -- as General Motors has done with its FastLane blog and Procter & Gamble has accomplished with its Vocalpoint social networking site. Forrester concludes that a left-brain approach to marketing planning can help you determine a marketing mix that will best suit your target audience by incorporating emerging interactive channels.

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