Large firms reluctant to try new forms of advertising, says Mediaedge: cia president

The head of a Canadian media buying agency says advertisers will continue to count on the traditional TV commercial for the majority of their advertising needs. Calling them conservative, Mediaedge: cia Canada president Bruce Grondin stated there is a reluctance by big firms to try new ad forms, such as Inte-rnet advertising or sponsorship of podcasts. "The choices are overwhelming, but the hardest part is selling them to a client because they don’t react to change very well," he told Canadian Communications Reports in an interview following his appearance on the "Advertising: New Platforms, New Metrics, New Challenges" session at the Canadian Association of Broadcasters (CAB) conference on November 8. "What’s going to happen is that will gradually erode, so rather than getting 100% of a company’s budget, will get 95% and maybe the next year 92%, and then 90%. But I never see huge advertisers ever getting out of TV." He estimated that it will be three years before new technologies such as podcasting are used to any degree by companies to reach consumers. Companies are hesitating, he said, because these new methods aren’t proven, and they don’t want to risk damaging their established brands. As well, Grondin noted that it is difficult at the moment to measure how well a non-traditional ad form performs. "We’re being inundated every day by new media, but our clients (advertisers) are very conservative…They say they don’t want to go too far in case fails," he pointed out. Fellow panelist Terry O’Reilly, a writer/director at Pirate Radio and Television, a firm that creates commercials, concurred that new ad avenues are a "tough sell" because companies want to "know the return on a podcast" or "the business model on the Internet." He told CCR, "There is definitely trepidation there on the part of advertisers." During the CAB session, he recounted pitching podcasting to a client that was spending $5 million underwriting a rock’n’roll concert tour. "The idea was to have a podcast after every show by talking to fans going in and coming out , and providing great information about the band that would draw people to their web site," O’Reilly recounted. "But at the end , the client asked, ‘What’s a podcast?’ and that was only back in June." Grondin recommended that companies spending more than $10 million a year on advertising hire a media specialist internally to advise the organization on new advertising possibilities. "In the U.S., there are a lot more people on the client side (advertisers) that have media specialists within the organization," he said, adding that these internal people help drive companies to new forms of advertising. There was one shift in advertising spending that was acknowledged by all the panelists – a move to analog specialty TV channels, sometimes at the expense of conventional TV. Analog specialty TV allows an advertiser to target niche audiences, Grondin stated, "and advertisers with small budgets may go 100% specialty TV if they have a tightly defined audience." But he said the slew of digital TV channels available on Canadian airwaves has been a failure from an advertising standpoint. No advertisers are buying time on the diginets; rather the broadcasters are throwing the space in at no extra cost to companies that purchase ads on their conventional or analog specialty TV channels, he noted. The audience numbers for the diginets are so small that it’s impossible to know who exactly is tuning in – something advertisers need to know, he pointed out. "You’ve got programs that 100 people across Canada are watching. You have to ask what value is an advertiser going to get from that kind of penetration?" he stated. CHUM Ltd. executive VP of sales and marketing David Kirkwood, however, was more optimistic about advertising on the diginets and on new technologies, such as TV on cell phones and podcasts. Corus Radio also sees advertising possibilities in the new technologies and has formed a spin-off company to wow advertisers (see sidebar on page 5). "There will be casualties , but are a place for advertisers who want to be a big fish in a small pond, or who want to experiment," Kirkwood said. During the session, he referred to CHUM’s Category 2 digital TV channel PunchMuch as "a new kind of TV, or maybe the frontier that will attract a new kind of advertiser." He added that advertising on the diginets, podcasts or some other new vehicle at least for the time being will be incremental to a company’s TV ad budget. "I think advertisers are interested in exciting ideas. When we launched specialty TV back in 1984, I was told by people that I shouldn’t be taking this out to the agencies because without the numbers, they’re not going to buy it," he told CCR. "I was told I had to go directly to our clients if I was going to get any kind of action. What I found was that the agencies wanted to be part of it…maybe because I was dealing with MuchMusic and advertisers realized that we’re on the edge with young viewers."

Large firms reluctant to try new forms of advertising, says Mediaedge: cia president

News | 11/18/2005 5:00 am EST

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