Are you ready for Digital TV?

More than 13 million households with television sets that can only receive analog broadcasts are currently unprepared for the transition to all digital broadcasting that is scheduled for February 18, 2009, according to the Nielsen Company. Another 6 million households have at least one television set that would no longer work after that date.
“The change to all-digital broadcasting is the most significant change in the history of television, because unlike other advances such as color, older television sets will no longer be able to receive television signals without a converter, “explained Eric Rossi, Senior Mgr, Product Leadership of Nielsen’s digital transition preparedness team.
Nielsen found that adults over 55 are better prepared than younger households; and Whites and Asians are more ready than Blacks. More Hispanic households still rely on analog, over-the-air broadcast television than non-Hispanics.

· 10.1% of all households would have no access to television signals if the transition occurred today.
· 16.8% of all households have at least one analog television set that would not work after the switch.
· New York is the most ready local television market and Portland is the least prepared.

These estimates are based on the same national and local television rating samples that are used to generate Nielsen television rating.

As of November 1st, 2007, 13.7% of TV households in the U.S. were equipped with an HD television and HD tuner capable of receiving signals in HD (HD Capable), while 11.3% are equipped with an HD television and HD tuner and receive at least one HD network or station (HD Receivable).
Los Angeles has the highest penetration of HD Capable homes (20.4%) and New York has the highest penetration of HD Receivable homes (17.5%). Nielsen also reports that among U.S. Hispanic or Latino households, 10.4% are HD Capable and 8.2% are HD Receivable. Among African-American households, 8.1% are HD Capable and 6.9% are HD Receivable.

TV HHs /HD Capable
FYI- Dallas-Ft-Worth 2,435,600 /425,420
Atlanta 2,310,490 /345,680
Detroit 1,925,460 /238,830

Other Relevant TV Facts:
· There were an average of 111.4 million TV homes in the U.S for the 2006 -07 season
· The average U.S. TV home has 2.5 people and 2.8 television sets
· 28% of U.S. TV homes have Digital Cable
· 64% of homes have wired cable hook-ups and 23% have satellite or specialized antenna systems to receive television signals
· 82% of U.S. homes have more than one television sets at home
· 84% of U.S. homes have a DVD player

Housley's Footnote: All full-power analog TV stations must, by law, stop analog broadcasts as of Feb. 17, 2009. Now he asterisks: That date still holds unless a bill currently in Congress is passed, in which case stations on the border with Mexico would not have to stop analog broadcasts until 2014 so that their Mexican viewers would not be denied their signal. Stations near the Canadian border might not be switching to digital on Feb. 18th either. Rather, than send workers to the top of towers in the middle of winter in Maine or Montana, the FCC will give some stations the flexibility to shut off analog early, or decease their coverage areas. Then there are the low-power and translator stations, thousands of them, that won't be switching over to digital on Feb, 18th at all. Many low-powers won't be making the switch until 2012 or so. Anyway, the converter coupon program as going well, but the DTV clock countinues to tick.

The Impact of DVR Playback

From time to time, I am asked how I think DVRs are affecting outdoor television and especially how time-shifting has affected commercials as a whole. I didn't want to give just my opinion so I did some research-

Playback from Digital Video Recorders (DVRs) is increasing the amount of time people spend watching television, according to new data from The Nielsen Company. In comparing total television usage (Live viewing plus DVR playback) for persons 18-49 in November 2007, to total television usage in November 2005 (before Nielsen measured DVR homes and penetration was very low), Nielsen found that viewing had increased slightly throughout the day and was three percent higher at 9:00 pm and five percent higher between 11:00 pm and midnight. This has implications for prime time viewing levels in the future because as the number of DVR households in the U.S. population grows, DVR primetime viewing will likely rise as well.

We all know that consumers/viewers are watching more television because of DVR playback, and in reality, they are creating their own personal television schedules based around their favorite programs and interests.

Providing new insights into time-shifted audiences, Nielsen identified three distinct groups of DVR users based on how much they time-shift:

• Heavy Shifters are primarily middle income women, ages 18-49, who record and later watch nearly 26 hours of televison - or about half of their TV viewing - a week. Males, 18-34, are least likely to fall into this group.
• Medium Shifters watch somewhat more televison than the average person; about a third of their viewing is time-shifted.
• Light Shifters, who represent nearly 70% of all persons in DVR households, watch less televison than the average viewer. With incomes that exceed $100,000 and the most prone to own a high-definition TV set, they spend only about 10% of their television time with time-shifted programming, watching shows they would otherwise have missed.

Nielsen also reports that time-shifting is not evenly distributed by forms of programs. As would be expected, most viewers prefer to watch news, sports and movies live. On the other hand, general dramas, such as House, Grey's Anatomy and Heros, are most often recorded and viewed later, for one-third of all time-shifted content. Among other types of programming that is heavily time-shifted are talk shows like Oprah, soap operas like The Young and Restless and reality televison shows such as Survivor, The Biggest Loser and Dancing With the Stars.

So, how does all this relate to outdoor televison? Frankly, outdoor advertisers are getting a great deal for their ad buys on average. Outdoor televison is reality TV at it's best and consumers are DVRing the shows right and left as well as watching them live. Having a good airtime is nice but not totally essential. From an advertiser's angle, you want to be involved with programs that are more engaging. Typically what happens in a show that is more highly engaged - where people spend more time focused on it - the attention to the ads is higher. Generally, the attention to the ads depends on the strength of the creative, but a good commercial in a highly engaged show will perform better than a good commecial in a show that is not highly engaged. So you want both. I also believe you can purchase block time from the networks and request to run these commercials next to the programs of choice but those companies that are promoted and a part of a popular program over time will come out the big winners.

Broadcast and cable networks are paid based on their programs' ratings(this is unusual for outdoor television), and are pushing forward with their annual upfronts(time buys), with some kicking off as early as this week. Some of the networks are even pushing for "live plus seven", this shows the strength of DVR statistics. Last year, despite having to cut deals based on a new currency, which included three days of DVR statistics (The C3 metric was adopted last year), as well as live viewing, networks were able to squeeze out increases in upfront sales, closing the market with $9.19 billion committed from advertisers. This was up 5% from the year before.

Ad Agencies and the Outdoors

One of the trends I've noticed in recent years is that companies in the outdoor industry feel they need to hire large advertising agencies in order to promote their products. It's almost as if some of these companies feel the more they spend on "marketing expertise" the better decision they have made. The funny thing, is that nationally larger companies are hiring smaller and smaller agencies everyday to create their ad campaigns. Why is this? For one, the internet has leveled the playing field. It's now easier than ever for an agency, based wherever, to create work and share ideas with the push of a button. Also, as audiences have become harder to reach, larger firms have started using smaller agencies that are often more in touch with the potential customer. I remember one time while sitting in a wall tent in Montana on an elk hunt, I asked the president of a large outdoor company who it was that oversaw his marketing and advertising plans. He informed me that there was a new young lady at the advertising agency he'd been using that would be handling his account. I asked him, "Is she a hunter or has she grown up around hunting?" He told me that she was not a hunter. My next question was, "Then how can she decide how to market to hunters and what avenues of advertising will be the best for your company based on the products you produce?" He paused for a moment and then asked himself the same question. Now don't get me wrong, I don't believe that you have to know everything about a product to market it well, but as far as the hunting industry is concerned, where dollars are very limited and competition is as fierce as ever, I would want to make sure that I was reaching my target audience, with the right message, through the right avenues.
"When choosing an advertising agency, companies want to see a return on their investment", said Bart Cleveland, who writes for Advertising Age. "The larger agencies work like larger corporations," he said. "The more levels and layers you have, the more time it takes, the more money it takes." Cleveland says clients with large marketing budgets are finding that smaller agencies sometimes offer the experience and capabilities of larger agencies without the overhead costs. "And companies want a personal relationship with the people creating their ad campaigns, he said". "At the larger agencies, the people who pitch the account to potential clients are rarely the ones who work on it", Cleveland says.
At Powerhouse Promotions, we believe in a personal relationship with our clients. I used to think that being a small production house was a negative, but not any longer. I see us doing a better job for our clients than what they had experienced before because we know the outdoor marketplace inside and out. We are real hunters with creative ideas. Everyone at Powerhouse has a college degree in different fields and experience in different areas. Almost everything we do is outdoor related but that is what we are known for and what we are good at, and our clients realize this.