| Monday, Nov 23, 2009 |
What's inside:
Today's Media News
1. Real-Life Auction For Brand Entertainment Properties by Wayne Friedman
2. Meredith: Retrans Deals Increase Revs, Breakout Health Magazine Wanted by David Goetzl
3. P&G Plans For Future: Multicultural Outreach, Evolve Marketing, Products by David Goetzl
4. Ad Alert: Affluent Viewership Up Among Big Four by David Goetzl
5. RAB: Radio Revs Hit Low Note, Slide 16% by Erik Sass
6. Network Shows Down In November Sweeps by Wayne Friedman
On Media
7. Huffington Post Increases Advertising, Revenue Streams by Diane Mermigas
News Briefs
8. 'Daily Show's' Oliver Gets Stand-Up Show
9. TV Guide Net Reups With Comcast
Today's News
1. Real-Life Auction For Brand Entertainment Properties
by Wayne Friedman
Given the expected intent of commoditizing inventory, electronic auctioning media systems have generally been shunned by media sellers. Yet the temptation to streamline the media-buying process continues.
Veteran branded entertainment agency, the Marina Del Rey, Calif.-based Brand in Entertainment, now says it wants to challenge this thinking, taking a bolder step by holding an old-fashioned, real-life auction for brand entertainment media properties at the esteemed art house Christie's in New York City on Jan. 20.
"Nothing replaces the energy and the dynamics of a live auction," says Tere Morris, chief operating officer of BiE. With a growing array of media properties companies, we need to find easy ways to keep track of all branded entertainment inventory, says Rolfe Auerbach, chief executive officer of BiE.
Brand in Entertainment, which has done branded-entertainment deals for film and TV productions with Embassy Suites, Jaguar, Panasonic, Gillette, Hanes and Orbitz, will invite media buyers to bid on exclusive packages on a variety of media platforms during the event.
At the end of November, media buyers and bidders can see an auction preview on the company's Web site. At the event itself, bidders can observe the action on electronic screens at 15 different demographic 'stations' -- for example, women 18-34, adults 18-49 or men 25-54.
Given the complexity and singularity of branded entertainment deals -- some with numerous extensions -- it seems like a daunting task for media buyers to buy into an on-the-spot auction process. Wide-ranging branded-entertainment deals usually take months to complete, deals that require heavy interaction with and tweaking with sellers for completion.
BiE's Morris expects much of BiE's auction efforts to come from "scatter" inventory that producers, studios and networks are looking to sell. "It's a new source of revenue," she says.
Morris adds that many deals could be isolated branded-entertainment opportunities, such as getting a lawn mower or candy product into an individual film, TV show on one a online Webisode. Some 50 projects that Brand in Entertainment controls will be on display, including "Henry's Crime," an upcoming film starring Keanu Reeves.
Many deals for major TV branded-entertainment opportunities can have an additional requirement of spending big media dollars on a network, in terms of traditional TV commercials. BiE says it won't be a problem working with other parties.
"We will be respecting a network's requirements in every conceivable way," says BiE's Auerbach.
Brand in Entertainment says the auction will include opportunities in network television, online/Webisodes, graphic novels, films and plays. The company says it is leveraging relationships with major advertising firms, major studios, record companies and independent production companies, to accomplish the auction.
2. Meredith: Retrans Deals Increase Revs, Breakout Health Magazine Wanted
by David Goetzl
Meredith CEO Stephen Lacy said recent deals with cable operators have its station group positioned for notable growth in retransmission consent dollars over the next several years. In the company's magazine segment, however, a gap remains in the health arena that could have it looking for an acquisition.
The retrans figure was at $8 million last year and set to jump to $20 million in 2010 -- then rise incrementally. Lacy recently said that retrans dollars nearly doubled in the July-September period for its 12 stations versus the same period a year ago.
With Meredith's sprawling female-targeted magazine portfolio, Lacy said the company could benefit from a linchpin along the lines of Prevention or Time Inc.'s Health.
"What we could use is an anchor brand in women's health and well-being," he said at a Citi investor event.
The company "generates a lot of advertising" from marketers in the health sector, but has no title as dominant as Better Homes and Gardens or Parents in their respective shelter and parenthood categories. Meredith is focusing on paying down debt "to give ourselves some head room" to buy assets, he said. "I don't know if it's 12 or 18 months downstream, [but] there will be some very good properties that will become available."
Even as TV retrans money grows, providing another revenue stream, 90% of Meredith's revenues comes from ad sales. Meredith -- with 12 stations including Atlanta and Phoenix -- has inked new retrans deals with the seven major cable operators in the markets it serves.
While Lacy touted the agreements, if other station groups are able to wring needle-moving increases in the space to establish a precedent over the next several years, Meredith may be on the sidelines and left out of the lucre.
Lacy said that over the last year, advertisers felt comfortable waiting until the "11th hour" to book ad time, taking the approach "that the longer you waited, the better the deal was." But now with some political-issue advertising and auto dollars increasing, earlier deals are being inked.
Last year, in the month of December, the company "experienced just dramatic cancellations." As a result, Lacy is hesitant to offer visibility for performance in the current quarter.
3. P&G Plans For Future: Multicultural Outreach, Evolve Marketing, Products
by David Goetzl
Procter & Gamble became the second leading marketer to emphasize that fashioning its business to adapt to a changing society will be critical going forward.
"Very much on our radar screen is what will happen between now and 2050 in terms of the demographics of the U.S. population, where minorities move to a majority," CFO Jon Moeller said. "We need to ensure we have products and messages and connections with Hispanic consumers, with African-American consumers."
Coca-Cola said Wednesday that reaching "multicultural" Americans will be a "core focus" between now and 2020.
P&G's Moeller said the company is also mindful of the aging U.S. population and needs to evolve its go-to-market strategy and product portfolio accordingly, although he declined to cite further details.
Speaking at a Morgan Stanley event, Moeller also reiterated the company's commitment to increase marketing outlays in the current fiscal year, saying that "media impressions" will be up 10% -- largely because it has a run of new products and extensions to plug. Categories there include laundry, baby and feminine care.
Moeller said the company will pursue successful marketing as chief in growing sales versus cutting prices -- which it has done recently -- or special promotions. He favors "performance-based value messaging across our entire brand portfolio" and support of "our strong innovation programs."
TNS Media Research figures show P&G cut ad spending by 20% in the U.S. in the January to June period this year (to $1.2 billion). Verizon passed it as the country's largest advertiser during that period.
Moeller said P&G is not actively seeking acquisitions for growth, and its unwillingness to engage in hostile bidding hinders it. An acquisition target, he said, must fit five criteria: strength in consumer understanding, branding, innovation, go-to-market approach and scale. P&G recently divested its Folgers and pharmaceutical businesses because they failed to live up to those core capabilities the company touts.
On Folgers, he said: "It took us a long time, but we finally came to the realization that a coffee bean is a coffee bean is a coffee bean. Our expertise and formulated chemistry was not going to allow us to differentially innovate in that business."
Also, retail channels were shifting toward Starbucks and away from the mass retailers, where P&G has a powerful position.
As for the pharma business, which included the heavily promoted Actonel, Moeller said the restrictions on direct-to-consumer, prescription-drug advertising did not allow its marketing prowess to shine. "With all of the disclaimers that are required [in that category], it's very difficult to build meaningful connections with consumers," he said. On the current landscape of consumer spending, Moeller said pocket books continue to have a tight lid in the U.S.
"We see relative restraint in spending in some of the more developed parts of the world -- primarily driven by unemployment. Either the unemployed or underemployed -- that figure continues to increase both in the U.S. and in Europe."
He did add that there has been some uptick with "markets ... growing modestly, but nowhere near the level they have historically."
4. Ad Alert: Affluent Viewership Up Among Big Four
by David Goetzl
Overall ratings may not be thriving, but more wealthy people are watching the major networks this season. So far, 11% more upscale viewers are tuning in to the Big Four, a figure propelled by a huge jump at Fox.
Among 18-to-49 viewers in $100,000-plus homes, rating points are a combined 14.7 compared to a 13.2 last year, according to one measure. That comes as overall ratings for the Big Four are flat at an estimated 12.5, marking a silver lining for networks.
Figures are derived from "live plus seven day" program ratings and do not include specials programming.
The upscale increase comes mostly via Fox, which is up 56% this season to a 3.9 versus a 2.5 last year, with help from new show "Glee."
On the backs of comedies such as "The Office" and football, beleaguered NBC has an upscale spin to take to advertisers -- with ratings up 12.5% from a 3.2 to a 3.6. ABC and CBS are down 5% and 3% -- to a 3.8 and 3.4, respectively.
But each network has a higher concentration of affluent viewers, coveted by advertisers seeking their disposable income.
ABC has posted a 115 index among 18-to-49 viewers in $100,000-plus homes. That means its concentration is 15% higher than what would be found in the general population. For ABC, that's up from a 113 a year ago, and keeps it at the top in the index area.
NBC, which for years dominated the competition in upscale viewers, has a 113 index this year -- up from 112 last fall. Series such as "30 Rock" and "Community" are helping drive up the figure, along with the "The Office."
CBS is also up slightly, to a 102 from a 101. "60 Minutes" is a strong performer. Top shows "CSI:" and "CSI: NY" have indexes below 100, hurting the network-wide figure.
Fox has soared, with its index going from an 88 -- 12% below an average concentration -- to a 106. In addition to "Glee's" high percentage of upscale viewers, the three hours a week of "So You Think You Can Dance" -- which was not on last fall's schedule -- is a contributor.
Although an index only refers to a percentage and not actual viewers, some view it as the most insightful benchmark for upscale performance, partly because an advertiser can receive more affluent viewers per rating point purchased.
There may be a simple reason for the increases. A large percentage of upscale viewers may have DVRs that allow them to watch more TV. Cable news competition is losing appeal, which may be another reason.
Still, the demo may be eager ad-skippers, and "commercial ratings" -- the market currency -- may be down.
Among individual shows this season, ABC's "Grey's Anatomy" has the highest ratings in the upscale demo, while "Glee" has the highest index at 146.
Highest-Rated Upscale Series
"Grey's Anatomy" (9.5), ABC
"House" (7.8), Fox
"The Office" (7.6), NBC
"Sunday Night Football" (7.5), NBC
"Big Bang Theory" (7.2), CBS
"Desperate Housewives" (6.7), ABC
"Private Practice" (6.2), ABC
"Glee" (6.0), Fox
Two and a Half Men" (5.9), CBS
"30 Rock" (5.4), NBC
Upscale Series with Highest Indexes
"Glee" (146), Fox
"30 Rock" (142), NBC
"The Office" (139), NBC
"Community" (131), NBC
"60 Minutes" (129), CBS
"Grey's Anatomy" (129), ABC
"Brothers & Sisters" (127), ABC
"Private Practice" (126), ABC
"How I Met Your Mother" (124), CBS
"Parks & Recreation" (122), NBC
5. RAB: Radio Revs Hit Low Note, Slide 16%
by Erik Sass
Down is the new up -- at least according to the Radio Advertising Bureau, which found "positive turnaround signs" in a 16% decline in total radio ad revenues in the third quarter of 2009. That's compared to the same period last year, from roughly $4.95 billion to $4.15 billion.
This is a smaller percentage drop than the first and second quarters, when revenues fell 24% and 22%, respectively. But it's worth remembering that comparisons are also getting easier: The third quarter decline compounded a 9% drop in the third quarter of 2008. This was the 10th straight quarter to see a year-over-year decline in total radio ad revenues.
The one area to see real growth was digital, which grew 14% to $126 million; for the year-to-date through September, total digital revenues have increased 12% to $347 million.
While these results are stronger than other traditional media with an online presence -- newspapers' online revenues continued to decline in the third quarter -- digital remains a small fraction of radio's bottom line in percentage terms. Een as total revenues tumble, digital contributed just 3% in the third quarter, as well as for the year-to-date.
Looking to the future, the RAB noted that local online advertising is a strong potential growth area for radio, citing a report from Piper Jaffray which stated: "Small businesses will begin to catch up with consumers online, bringing significant growth to the local online sector and moving local dollars from offline to the Web."
However, this prediction carries at least as much peril as potential for radio broadcasters. Their ability to cash in on local online advertising depends entirely on their investment in online platforms over the last several years -- when the recession forced many stations to cut back on long-term capital improvements.
If radio stations owners don't take the lead, for example, by offering local advertisers integrated campaigns that also leverage broadcast assets, they risk losing both broadcast and online revenues to a variety of local competitors, including newspaper and TV station Web sites.
6. Network Shows Down In November Sweeps
by Wayne Friedman
Remember how big the November sweeps use to be? For viewers, the memory is getting more distant.
On the last Thursday of the still-big November TV period, virtually every network show took it on the chin. Similar ratings trend also took place earlier in the week.
Big shows, such as ABC's "Grey's Anatomy," CBS' "CSI," NBC's "The Office" and Fox' "Fringe" all sank lower versus their respective results of a week before. Some of this could be due to a NFL Network Thursday night game between the Miami Dolphins-Carolina Panthers. That network's Thursday games have been pulling in around 4 million viewers on average.
Looking at just the young at heart on this Thursday, CW's nice surprise this season, "Vampire Diaries," fell across all the demographics that matter to them. It had a Nielsen 1.6/5 among 18-49 viewers versus a 1.9/5 the week before. Its companion show "Supernatural" also moved lower, a 1.2/3 from a 1.3/3.
The only bit of comfort went to CBS' "The Mentalist," which improved some to a 3.7/11 among adult 18-49 viewers versus a 3.6/10.
Bigger declines were seen with ABC's "Grey's Anatomy," which landed with a 5.1/13, down 9%. Its 10 p.m. companion show, "Private Practice" went south big time, dropping 21% to a 3.1/9.
NBC's "The Office" saw a season low 3.7/10, down 12%. Fox's "Fringe" sank 9% to a 2.0/5. ABC's once high flying "FlashForward" is now at a more humbling 2.4/7, off 8% from a week ago.
All this gave CBS a shrug-of-the-shoulders victory for the night among those key 18-49ers: a 3.7/10. Usual Thursday winner ABC was right behind with a 3.5/10.
NBC and Fox were in a distant third-place tie at a 2.3/6 a piece. CW was a bit better than Univision, a 1.5/4 among 18-49ers and a 1.7/5 for 18-34 viewers. Univision earned a 1.4/4 for 18-49 and a 1.6/5 for 18-34.
On Media
7. Huffington Post Increases Advertising, Revenue Streams
by Diane Mermigas
Arianna Huffington says she will not charge consumers for content, and that her meteoric Huffington Post will rely on interactive advertising and other applications to pay the bills.
"We have a plans for mobile, but no plans to charge for it. Our business model is advertising and marketing, as well as a nonprofit approach to investigative journalism," Huffington told MediaPost in a recent interview. "This is a time for reinventing journalism and advertising."
Over the next year, The HP will roll out new formats that allow advertisers and users to interact and exchange information. Company executives say they are meeting with advertisers to discuss new approaches, such as paying to enter real-time online discussions around sports and entertainment events, political elections, and major issues.
For instance, a pharmaceutical company could pay a premium to contribute relevant facts -- not sales pitches -- to real-time online reporting and discussion of health-care reform. Another example: separate Twitter feeds could be created around the competing Super Bowl teams, and a branded advertiser could be given tools to participate in the discussion.
The HP intends to expand its work with Twitter and other social networks using new tools to monetize content and community. (It launched Social News with Facebook Connect in August.) It will continue rolling out regional verticals, such as Chicago, New York, Denver and Los Angeles, where it is beating The New York Times and The Wall Street Journal to the punch for parochial readers.
The "Advertising 3.0" efforts to scale and monetize online conversations are spearheaded by newly appointed President and Chief Revenue Officer Greg Coleman, a former ad executive at Yahoo and Time Warner's AOL, and new CEO Eric Hippeau, an HP board member and investor who was formerly with Softbank.
With advertising sales growing at about 100% annually, HP is expected to be modestly profitable on about $15 million in revenues in 2009, industry sources estimate. "We are making money. Our advertising is working," Huffington says. "But there needs to be a great deal of experimentation with new revenue models."
HP retains most of the $37 million in invested capital available from Oak Investment Partners, Softbank Capital Partners and Greycroft Partners. Huffington says she is more focused on growing the company organically than through acquisition. Since launching four years ago, The HP has mushroomed into a new media asset worth more than $100 million, and as much as $200 million, industry sources estimate.
According to comScore and Nielsen, the HP is blowing past The Washington Post, WSJ.com and LA Times.com in unique visitors, which is up 50% from a year ago, and is nipping at the heels of USA Today's Web site. It will continue to launch new verticals, such as the technology and book sections.
But it's not only about how aggressively and innovatively HP can monetize its growing user base: 27 million internally clocked monthly unique users. The HP has a decided advantage over its traditional print brethren because of its digital-only mindset. It has none of the legacy infrastructure and union labor costs, which cannot be easily eliminated. It has a tiny payroll; most stories are written gratis. Plus, HP angers traditional publishers by making money aggregating stories from other legitimate news sources, including The New York Times and USA Today, even with careful attention to intellectual property rights.
By contrast, News Corp.'s global newspaper operation is expected to generate $400 million in operating income on $5.6 billion in advertising and subscription revenues in fiscal 2009. That will continue to decline to nearly $300 million in operating income on $5.5 billion in revenues in fiscal 2010, according to Bernstein Research. The newspaper group's online revenue gains fall far short of its plummeting traditional ad sales, against a backdrop of high printing plant, paper and other fixed costs.
The HP's virtual operation and low overhead -- anchored by only about 80 salaried administration, advertising, tech and editorial staff -- allows Huffington to "dramatically transform the print model online."
Huffington pointedly argues that she simply is giving digital consumers what they want: their own voice and real-time engagement on relevant topics of their choosing. "We're not going to succeed by putting our content behind pay walls," she said. "People will not pay for news and opinion because it is widely available."
While Huffington is fond of saying that the future will be a hybrid of the best of both traditional and new news media business models, they clearly are separated by harsh financial and philosophical differences. They were on display during her recent debate with German newspaper magnate, Axel Springer CEO Mathias Dopfner.
Little wonder The HP endures sharp criticism for providing information and insight by more than 800 unpaid bloggers. An estimated 3,500 users have passwords, providing as many as 2 million weekly comments, providing a level of reader interaction unlike any other print or digital news outlet. A rich irony is that HP epitomizes some of the recommendations made by the American Press Institute's Newspaper Economic Action Plan for digital survival.
"From day one, I have seen it as a hybrid model that reflects the best of online, traditional print and new technology. This is not an either-or proposition," Huffington told MediaPost. Five years from now, the HP will coexist with -- not replace -- The New York Times, The Wall Street Journal and The Washington Post, she said.
"But what won't work is acting like the last 15 years never happened; that we are still operating in the old content economy as opposed to the new link economy, and that the industry will survive by "protecting" content behind walled gardens," she said. "We have seen the future, and it is here."
News Briefs
8. 'Daily Show's' Oliver Gets Stand-Up Show
John Oliver, a "Daily Show" regular since 2006, is getting his own Comedy Central series, says The Hollywood Reporter. Oliver will host a new stand-up comedy series, featuring some of his favorite comedians, starting in January. Six episodes have been ordered for the hour-long "John Oliver's New York Stand-Up Show." Oliver also appeared in three episodes of NBC's sitcom "Community."
9. TV Guide Net Reups With Comcast
TV Guide Network has renewed its carriage agreement with Comcast with a new multiyear deal, reports B&C. The MSO has 25 million subscribers. The network is set to debut HBO's "Curb Your Enthusiasm" next year, as well as introduce original programming.
Monday, Nov 23, 2009
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