Last Mass Medium Standing Could Be TV

With the decline of newspapers and radio, Rishad Tobaccowala believes TV may be the only mass medium left in a few years.

That opinion should give TV broadcasters some comfort. Tobaccowala keeps a close eye on new media as the chief innovation officer at Publicis Groupe Media, one of the world's leading advertising conglomerates. Through Starcom MediaVest Group and Zenith Optimedia media buying networks, it accounts for some $45 billion in spending annually around the world.

Tobaccowala is also CEO of Denuo, a branch of Publicis that he helped launch more than two years ago that focuses on cutting-edge forms of advertising.

To help it peer into the future, Denuo has also taken on an advisory role at more than three dozen nascent companies, and receives investment options for that service. Among the companies are Brightcove (enabling video on Web sites), Sling Media (essentially turning computers and smart phones into clones of your living room TV) and Daylife (a customizable online news service).

Armed with the insights afforded by those firms, Denuo's team of experts works with clients like Dupont, Purina, Hewlett-Packard and Conde Nast, giving them new research, strategies and tools to engage their target consumer groups more effectively.

In this interview with TVNewsCheck Contributing Editor Janet Stilson, Tobaccowala not only makes his mass-media prediction, but also says that he believes TV stations can have a vibrant future if they capitalize on some strategic opportunities. However, he does envision new rivals on the local video front.

Tobaccowala also discussed how Denuo will maintain its importance in a day and age when at least two of its clients, General Motors and Procter & Gamble, are in cutback mode.

An edited transcript:

Where do broadcast stations stand, in the minds of advertisers, when you consider the massive migration of video content to other media? Are stations still of value to them?

Sure, absolutely. The world is basically consuming more and more video rather than less and less video. And a broadcast station has to recognize that it is less of a broadcast station and more in the business of delivering of video.

For an advertiser, what the broadcast part of this does is deliver large audiences at scale. Let's say you want to reach 25 percent of the market. There is no better way of doing it besides using traditional media, which in the local market tends to basically mean spot television or newspapers. The difference is, people are still watching lots of television, but they are watching or using less and less newspapers.

How do TV stations become of more value to advertisers?

They need to figure out how to leverage their Internet and other media presence, because what may begin to happen is people will say, "Yes I'd like to see what happened on my local news, but I'd like to see what happened on my local news long after the local news is broadcast. And I'd like to see more depth of information," which you can't do in a 30-minute broadcast.

The networks and the stations have to recognize that they're in the video information and entertainment-delivery business. A broadcast station limits what they can actually do.

So you don't think that mass media is dying on the vine?

No, not at all. In fact, my sense of this whole idea of mass media's death is massively premature. The people who are talking about dying will die before the media dies.

Traditional mass media is not a growth business, and so to continue to resonate and be relevant, broadcast stations need to basically embrace digital media, including the Web. You'll actually continue to have a healthy, viable broadcast business, but you have to accept it's not growing, and it's becoming less and less relevant to particular target audiences.

You once predicted that, at some point, it's going to be more expensive to buy advertising on Google than on network television. Do you still feel that's the case?

It has actually become far more expensive to buy advertising on Google than on network television. Google has a product called AdWords, which marketers use to bid on a particular key word [that consumers might type in during an Internet search]. On average, across all categories, it tends to be about 50 cents.

So 50 cents every time someone clicks on a certain advertisement triggered by a search.

Right. Let's say on television you get a $20 cost-per-thousand rate. Fifty cents a click is equal to $500 cost per thousand. You can see how much more expensive it is, but the difference is there's some sort of action.

Do you think the TV CPM rates will decline?

I don't necessarily think that the cost of television is going to decline because, in a few years, it's going to be the only mass medium available.