DRTV MEDIA BUYER

Although Twitter’s profitability, or lack thereof, is not known, one thing is for sure – Twitter is courting television producers and audiences. Chief Executive Officer Dick Costolo announced in a press conference that partnering with shows like “The X Factor” may have financial benefits down the road.

Twitter’s biggest television claim to fame yet is its involvement with “The X Factor.” Although Twitter does not pay to be mentioned or featured on television shows, it has invested an undisclosed amount to create an online voting system for Fox’s new talent show. For the first time, “The X Factor’s” viewers will be able to send votes via direct messages (known as “DMs” on twitter). In addition, producer and judge Simon Cowell reportedly reads tweets about the show and makes changes based on the feedback. Although he once dismissed Twitter as a passing fad, he sees the value of having feedback from the social web.

As “The X Factor” embraces Twitter, other television shows and producers are likely to follow suit. Television shows are looking for ways to get users more involved in live viewings and Twitter is giving them a way to do just that.

Twitter’s internal entertainment team. Chloe Sladden is key in their strategy of creating social media experiences for television shows. The former VP at CurrentTV was hired by Twitter to be a bridge between television and the social network. She oversees a team of seven in Twitter’s content and programming unit, and plans to hire four more soon. One team member is dedicated to working with music labels and one works specifically with news organizations. As a team, they work to inform producers, politicians and celebrities on the best practices for creating content for Twitter.

While TV shows and celebrities use Twitter in order to gain free publicity, Twitter executives hope that even more users will flock to Twitter to take part in the conversation. This will lead to more opportunities for advertisers to be seen through sponsored ads and more potential income for Twitter.

For many American families, owning a television is a no-brainer.

However, for the first time in 20 years, television ownership has dropped slightly. Nielsen, which uses television ownership as a way to gauge viewer numbers, reported that 96.7% of U.S. families own a television – down from 98.9% in the previous year.

Experts point to two very specific reasons for the decline in television usage: The first is cost. New digital television sets and antennas have higher prices than their analog counterparts. This puts them outside of reach of many low-income families and when television switched to digital broadcast in 2009 they had no choice but to go without. The rocky economy has put more and more families in the low-income range – producing lower television owner numbers.  There was a similar dip in television ownership in 1992 following a similar period of recession. The dip was corrected in the mid-90s when the economy bounced back.

The second reason is also due to new technology – namely the Internet. Tech-savvy young viewers are opting out of buying a television and relying on their computers and streaming television shows instead. They can access nearly all of the shows they want to instantly through Netflix, Hulu, Amazon’s Video on Demand and other sources.

As a result of the second reason, Nielsen may redefine the term “television household” to include those who watch online. The Nielsen estimates incorporate 2010 census data but the first indications of lower television ownership were seen as early as 2008 surveys.

In a time when the entertainment industry is struggling to tap new markets and find new veins of revenue, Sony holds on for the ride through the crazy world of web TV.

Crackle.com, Sony’s media portal established in the early 2000’s, is seen as one of the elder statesman in the game.

The competition in the virtual marketplace has been fierce with many business models appearing and disappearing without notice. Monetizing the viewership of these virtual media portals is no easy task. Many well-respected entertainment conglomerates have retreated from the Internet choosing to focus on tried-and-true monetary models such as features and traditional long-form series.

A channel like Hulu, for instance, depends solely on advertising revenue while portals such as MegaVideo depend on the subscription model. Sony is distinguishing itself among its weakened rivals by learning from the lessons of the past.
Keeping content fresh, flowing and full of big named stars has been the cornerstone of Sony’s stamina on the web. While other companies are looking for a traditional model to monetize the Internet, Sony is looking at the forest for the trees. Sony plans on porting Crackle.com as the lone media content portal for the Playstation 3, making it a prime outlet for third-party media companies to cozy up to the tech giant.

Sony made many of these mistakes early and has done a good job at learning from them and expanding their business model to suit. Understanding the psychology of the web is allowing Sony to maintain a foothold in the ever-changing world that is business on the Internet.

Peter Koeppel is Founder and President of Koeppel Direct, a leader in DRTV direct response television, online, print and radio media buying, marketing and campaign management. With a Wharton MBA and over 25 years of marketing and advertising experience, Peter has helped Fortune 500 companies, small businesses and entrepreneurs develop direct marketing campaigns to increase profits.

Peter started Koeppel Direct in 1995 and has built it into one of the leading infomercial direct response media buying firms in the U.S.

Before the recession, there was a sort of unwritten agreement between high fashion, department stores, and elite outlets not to use the Internet (considered, apparently, “low brow”) to reach out to wealthy customers.

When the recession hit and sales plummeted, however, all bets were off.

Department stores began slashing prices on high-priced inventory to get it off the shelves and luxury designers and outlets began to feel the crunch as fewer and fewer buyers were to be had. Now exclusive brands and high fashion designers and sellers are embracing the Web as a way to not only promote themselves, but to sell directly to consumers in Web-based showrooms.

Marc Jacobs, the flamboyant fashion designer with a $5 billion brand, has gone whole hog online. A year ago, admits his brand’s president and vice chairman, they were ready to stop delivering product to retailers who were deeply discounting them in order to make sales. Now, Jacobs has one of the most well-trafficked fashion websites on the Web with marketing and content to match its namesake’s offbeat style.

Other luxury brands, including Jimmy Choo, Hugo Boss, St. John, Kiehl’s and others, are beginning to embrace the World Wide Web as a new frontier as well. They’re all finding that they can often sell at nearly full price directly through the Web and may be finding buyers that they never would have seen in their retail outlets.

The added control over pricing and profits has also appealed to many brands, who’ve long established themselves as exclusive by offering not only one-of-a-kind designs, but also by pricing them to match their uniqueness.

The flashy, content-empty, picturesque sites that displayed information about the designer and little else are going out the door into Web history and being replaced with beautiful, but more functional online presence portals.

Few holdouts remain as fashion and elite brands embrace the Web as their markets falter.

In its attempt to merge television with the Web, Google has teamed with Sony to create Google TV.

With a hi-def TV or Blu-ray player from Sony, viewers will be able to watch regular television and movies or go online to surf services like Google’s YouTube for television content.

At its annual developer conference in June, Google cited the unfriendly menu systems of most cable and satellite television providers, explaining that Google TV will be able to give viewers the content they want when they want it.

Sony will have the player built into its high-definition televisions and Blu-ray players and gadget giant Logitech will also offer separate set-top players. Both will use Google’s Android operating system as their backdrop and devices are expected to hit stores this fall.

So far, the devices will be available only from Sony and Logitech and only at Best Buy stores. Google is working hard to convince other retailers, such as Walmart, to come on board as well. Given the price point and high cost of some components, such as the Intel Atom chips that power them, however, convincing discount retailers to carry Google TV may be a challenge.

Watch for the Sony Internet TV and Blu-ray players in Best Buy stores this fall.

Hillcrest Labs, a small company in Maryland, has potentially eliminated many of the downsides of hooking the Internet up to one’s TV – giving major networks another huge headache on top of the concerns they already have about online streaming video competing with their own offerings.

The company’s offering is a browser called Kylo that works particularly well on TV screens, with larger icons and an on-screen keyboard so that users needn’t have their laptop handy to manipulate what’s happening on the screen. It also comes with a remote control called a Loop that serves as a kind of combination mouse and remote. It can be waved in the air to move the cursor on the screen, and it has buttons that allow the cursor to click on icons and use the online keyboard to search.

These features are great for users who have struggled with the TV-computer hookup combination, but for the networks, it simply offers one less reason why users would want to pay money to watch shows on TV – or even look at the expensive advertisements and myriad of interesting infomercials.

Hulu.com recently banned Kylo users from their website, citing agreements with partners and investors that essentially agree that online video is designed to be kept online. As Kylo is especially designed for use with TV screens, Hulu.com raised a red flag.

Users are getting more innovative with their technology, however, and it seems it’s only a matter of time before the remaining disadvantages of watching TV online, such as smaller screen size, are eliminated for good.

We’ve seen that the social media crowd is fickle.

One year the hottest thing around is LiveJournal, next it’s MySpace, next it’s Friendster.

Considering the fact that most of you reading just now scoffed to think that anyone uses any of those platforms anymore, it’s not surprising that there were predictions that Facebook would lose momentum after a year or so as social media fans found other outlets.

Not so. Facebook has actually been increasing in popularity and its users show no sign of intending to go elsewhere. Many attribute this staying power to the fact that Facebook has actually encouraged its potential rivals to use its own platform to talk to new customers.

Third-party software developers work with Facebook instead of creating rival sites, which means that the latest, hottest thing can live and die on Facebook without actually risking the larger platform losing its popularity. There’s always something new and hot to get interested in.

It’s possible Facebook shot itself in the foot with the introduction of Facebook Connect, though. This development lets outside sites become “partners,” which means visitors can log in with their Facebook username and interact with their Facebook friends when they’re no longer on the Facebook site.

It’s one thing when rivals work on Facebook, but it could be extremely risky to chance Facebook showing up on rival platforms. With so many other ways to interact with their favorite Facebook features, will users decide they no longer need to show up on the official Facebook site?

Blockbuster has been losing revenue to other movie providers like Netflix and Redbox for the last few years, and it’s about to have to take on an even bigger rival: Wal-Mart.

Wal-Mart already had a huge amount of Blockbuster’s retail sales when they began to offer low-price DVDs, but now they’re entering into the digital download market, and this may be the final nail in Blockbuster’s coffin.

The company is already reporting extremely low net loss for the year at $183 million, in part because of poor holiday rentals and sales. As consumers increasingly turn to downloads – the numbers have doubled in the last year alone – Blockbuster may simply not be able to provide consumers with the ease and quickness they need in a rental provider.

The company tried to solve the problem by partnering with NCR, which rents movie kiosks at locations like supermarkets so that buyers can rent their DVDs when they’re already out running other errands. Blockbuster has been closing stores and relying on the kiosks more heavily, but being able to pick up a movie at the same time as that gallon of milk may not be convenient enough.

Increasingly, viewers want to get their movies without leaving the house – and Wal-Mart has already beaten Blockbuster to the punch by getting in on the downloading market first.

This upfront season, we’re seeing CNN plant the seeds of a new strategy that may or may not bear fruit.

Greg D’Alba, EVP and COO of CNN ad sales, is putting forward a new stripped-down video pitch that shows off the true power of CNN’s 24/7 news-gathering approach – while also telling them he can guarantee away-from-home deliveries.

No one has ever attempted the away-from-home guarantee before, mostly because it’s incredibly difficult to prove and therefore very hard to convince ad buyers to pay for. The idea is that networks will tailor their news to the viewership in restaurants and bars, hotels and other third-party viewing channels, including away-from-home residences.

Part of the strategy is to begin appealing to younger viewers, who traditionally don’t often watch TV to get their news, though CNN says that studies prove that they’re the TV channel the younger generation prefers when they do tune in.

This strategy also draws the focus away from prime time, preferring to guarantee viewership on a 24-hour schedule. Previously, viewing outside of prime time netted only 10% of CNN’s total revenue – with their new strategy; it looks like CNN is hoping to shift that number upwards.

That is, if media buyers take the bait.

Marketing across the board has been seeing budget cutbacks, but digital media has seemed like a bright spot in an otherwise bleak advertising environment.

Social media, search, video, and mobile were the most popular and cost-effective new advertising techniques that appears to actually be gathering strength in spite of the recession.

Unfortunately, that mindset may me a little hyped-up. eMarketer just cut its growth forecast for the medium to 4.5%, down from their previous optimistic number of 9%. Online advertising may not even increase from 2009 to 2010, seeing as 2009 failed to meet the predictions of continual growth.

It’s not all bad; 2010 will see more effort put into extended digital media campaigns. While many companies in 2009 were still catching up to the digital revolution and needing serious persuasion from their ad buyers to invest money into digital media, there’s a lot of evidence that shows 2010 won’t have those same setbacks. Companies are planning more extended campaigns with more research and planning put in, which may actually turn around the problems with digital media we saw in 2009.

Video advertising is another bright spot, especially with the rise of websites like YouTube and Hulu, where there are long-form advertising options in a medium that companies are well used to utilizing – video commercials. Mobile is another advertising medium that may see an uptick in 2010, with more companies looking into advertising on smartphones using apps tailored to their target demographic. Finally, display advertising is expected to increase slightly, from $4.6 billion to $4.8 billion.

Digital media may not be the sanctuary it’s been touted as, but it isn’t worth turning your back on it. It’s still one of the best ROIs in the business.