Divorce, American style

Marketing is all about relationships.

And in this current economy, boyoboy, do we ever have a lotta marketing relationships on the rocks. While some strong and proven marketing marriages are as strong as ever, after a scan of the trades, sure feels to me like there were a slew of dysfunctional marriages out there in marketingland, with all too few therapeutic moments.

And now, with the economy in retrograde, as the astrologers say, we’re learning some very hard lessons indeed about marketing value and ROI…and the future of every advertising model under the sun.

To say print budgets have cavitated is putting the case mildly. They’re vanishing at warp speed; Condé Nast, home to Vanity Fair and the king of NY magazine houses, has shuttered or sliced circ throughout its lineup; Portfolio has halved its frequency. Even Vogue, mere months after its annual monster September issue hit the newsstands, has the feel of a mailbox brochure. It flops rather than thuds when you drop the sucker: that’s the sound of advertising revenues fleeing the jurisdiction.

Will Google, as scuttlebutt has it, buy The New York Times? The grand old lady of newspapers just closed a fat refinancing loan with a Mexican billionaire at 14% interest, ladies and gentlemen—and that, the street has it, is simply to cover interest payments on existing debt, the "deck chairs on the Titanic scenario;" flagship American newspapers, like The Rocky Mountain News and The Philadelphia Inquirer are toast.

And today, on the New York Times’ media blog, contribs pose the $64,000 question: do we still need network TV?

As somebody who worked for years in the trenches Canadian TV, I really think the jury’s out. CanWestGlobal looks like another cripple at the back of the flock, waiting to be picked off; south of the border, the executive suites are sweating bullets about the very future of network entertainment, with the exception of TNT’s push, new dramatic material rare as hen’s teeth. (HBO’s gone stale, you ask me. Damages and Mad Men are solid stuff but with little of the operatic highs and lows of The Wire or The Sopranos.)

As if the writers’ strike and the 2008 collapse of the US autumn pre-buy ad cycle wasn’t enough, advertising’s vanishing before the network brass’s eyes. People aren’t actually watching net less TV—they’re just shattering the broadcast timeslot model and moving away from the ads that feed the TV beast.

How, we’re asking around The Bakery, do you keep the ads following the video? And what strategies keep that video close to the cash register?

Let's back up.

Does anyone honestly believe that a greater ratio of ads per broadcast half hour is going to do anything but drive people farther away from primetime—especially via DVRs—except for sports and talent/reality shows? How how do you market in a black hole? At Fresh Baked, we’re convinced that advertising and marketing messaging without an engagement premium—we think it’s laughter and learning—is a non-starter.

Here’s what Ad Age has to say about the imperiled broadcast model’s equally vulnerable cousin, cable TV:

Both the networks and cable operators have a lot to lose if the subscription model breaks down, but the networks are particularly vulnerable. For the last two decades, cable has dined out on broadcast ad dollars, moving from 20% of their revenue from advertising to 50% today. But the salad days are over; TV advertising is flat, and operators such as Viacom have sustained themselves with subscriber revenue in the midst of flat or declining advertising…

[snip]

….one cable network executive said including those who watch online could increase a show's TV rating by as much as 10%. "In a flat-is-the-new-up universe, 10% is a big gain. Until you start to put it in those terms, you're not going to move dollars from TV to online," he said.

Absent that, US network TV has every appearance of a creative race to the bottom. And if you believe Jay Leno at 10pm is going to revive the creative state of the network nation, I got this bridge in Brooklyn—she needs a new owner. Crap TV will drive out the good, increasingly.

There’s no going back. HULU and its timeshifting online kin are the bridge technology, because without fresh hits, HULU is in danger too. And who’d gonna pay for the content that drives the system? Pirate film sites like [insert pirate site URL here] only amplify the argument that copyright—and thus the impetus to create new work for network TV—is doomed.

Back in the early 1950s, when the Hollywood studio system finally shattered with TV’s rise, cinema didn’t die. I don’t expect broadcast TV will die entirely either, even in the face of the web’s vast potential to dominate distribution without regard to time constraints.

But like so much about the American experience today, the days of the broadcast empire—just like the days of Louis B. Mayer and Samuel Goldwyn half a century ago—are numbered too.