Getting viewers’ attention remains a challenge for the company, which spends billions every year on advertising.
“With ad-skipping rampant, the company has lost faith in the effectiveness of traditional ads in comedies and dramas, save for the Super Bowl, ‘American Idol’ and other programming that consumers watch live and talk about the next day around the Coke machine,” according to MediaPost.
Coca-Cola isn’t abandoning the boob tube entirely. It is planning a major Olympics push this summer, but the company believes that a traditional 30-second spot can no longer stand alone. The company is a huge advertiser, spending $11 billion globally over the past two years, so its views about TV should give investors some pause.
For Coca-Cola, as with most major brands, advertising is all about targeting demographic groups — and the younger, the better. Advertisers believe, perhaps wrongly, that older consumers are more set in their ways and less apt to switch brands. Unfortunately for media companies, such as ABC parent Walt Disney (DIS -1.45%), CBS (CBS -0.83%) or Comcast Corp. (CMCSA -0.83%), the audience for broadcast television tends to skew older. Viewers also are watching less cable TV, whose audiences are often younger, which is bad news for Viacom’s (VIA.B)Nickelodeon, Time Warner‘s (TWX -1.28%) TBS and TNT, and News Corp (NWS -2.64%), whose cable holdings include FX.
Rich Greenfield of BTIG has argued that 2012 will be the first year in history that traditional TV consumption will decline. That is forcing networks to get creative to find ways to squeeze more money out of advertisers. For instance, it’s no coincidence that the judges on “American Idol” drink out of glasses emblazoned with a Coke logo and that the stars of “Pawn Stars” chow down on Subway sandwiches. Though 30-second commercials can be annoying, at least people are able to tell the difference between content and commercial.