Chaos Scenario and The Long Tail
AdAge’s Bob Garfield paints a pretty bleak picture of the future of big media, traditional advertising, and marketing in general. His article, Chaos Scenario, is aptly subtitled “A Look at the Marketing Industry’s Coming Disaster”. The main challenge running through the piece – which covers well-trodden ground highlighting the decline of network television, the rise of TiVo, and the unsustainability of unaccountable advertising structures – is fragmentation and the reluctance of “Old World Order” media executives to embrace it. Garfield believes that the old model has not colloapsed but acknowledges that it is definitely eroding. The main beneficiary: the “New World Order” of the web, blogs, vlogs, podcasts, internet-based video advertising, internet-enabled cable offerings, and others technologies that move even more of the media’s control to the user.
“They’re not home runs by any means but they’re definite solid singles and doubles.“ No dingers? So what? The whole point of new media is small ball. Quit playing for the three-run homer and amass the singles and doubles. Because, says Starcom’s Mr. Tobaccowala, “the key thing is economics of scale is going to disappear. That’s really what the issue is. Our business has been built on the economics of scale. And instead we’re going to go into the economics of re-aggregation. Which is how do you get 10, 20, 30, 40 thousand people instead of taking in 250 million and making them into 12 and 30 million dollar segments. How do you re-aggregate one at a time into the tens of thousands?”
Fragmentation, the bane of network TV and mass marketers everywhere, will become the Holy Grail, the opportunity to reach — and have a conversation with — small clusters of consumers who are consuming not what is force-fed them, but exactly what they want. Producers and broadcasters capitalized with billions of dollars will be on approximately equal footing with podcasters and video bloggers capitalized with $399.99 12-months same-as-cash from Best Buy.
This is of course the scenario that Chris Anderson claims is a wonderful opportunity called The Long Tail (to be released in book form in early 2006). The Long Tail is about the shift from hits to niches. It’s the replacement of mass (eg. the watercooler effect) with very specific “tribal” interest. “What we’ve got in the Amazons, Netflixes, and iTunes of the world is another phenomena entirely: lots of choice turning into near-infinite choice. It is not just three hits going to 30 hits, but 300 hits going to 300,000 niches.” From a NYT Magazine cover story on Neilsen and the new people meter:
…The average American household now sees 8 hours 1 minute of TV every day and has access to more than a hundred channels and several different sets — often tuned to different channels in different rooms. Industry types call this phenomenon audience fragmentation. The days of a family gathering together on the couch are dying out for good. We’re in pieces. Or as Steve Morris, the Arbitron C.E.O., put it more gently, “People are dividing.” Every age group, every cultural group and every demographic group, Morris added, is in the process of getting media packaged expressly for its members. In the next few years, this “personalization” will become only more and more pronounced….
…Whatever this transition means for TV viewers, it has different implications for advertisers. In recent months, in fact, a host of executives from big corporations, most notably Jim Stengel of Procter & Gamble, have begun publicly demanding that measurement companies like Nielsen and Arbitron provide better information about audiences. These advertisers don’t mind talking to smaller groups of Americans. In fact, companies like fragments. The more specific an audience, the more confident they can be of reaching out to and persuading its constituents….