| Tuesday, Oct 09, 2007 |
What's inside:
Today's Media News
1. Google Hits New High, Valued At More Than Time Warner, Disney, News Corp. Combined by Joe Mandese
2. Cars.com Shifts Super Bowl Buzz Into Gear by Wayne Friedman
3. Health Advocates To Use Roaming Place-Based Video by Erik Sass
4. Targeted Pitch: Reach The Planners, Reach Their Clients by David Goetzl
5. Better Homes and Gardens to Help Sell Homes by Erik Sass
6. Project Apollo Will Include Four Radio Bigs by Erik Sass
7. NBC Wins Sunday Night, With ABC Close Behind by Wayne Friedman
On Media
8. Local Media Slowly Learn To Harvest Digital Gold by Diane Mermigas
News Briefs
9. Hyundai/Kia Reviews Media, Incumbent Carat Invited To Pitch
10. Rutman, Hayes, Millard Named Reisenbach Distinguished Citizens
Today's News
1. Google Hits New High, Valued At More Than Time Warner, Disney, News Corp. Combined
by Joe Mandese
If there were any doubts that we were back into a new, digital media economy, they were laid to rest Monday when the price of Google's shares topped $600 for the first time, giving it a price to earnings multiple of 49.54, and a market capitalization greater than the three biggest traditional media companies - Time Warner, Walt Disney Co., and News Corp. - combined.
Based on Monday's closing price of $609.62 per share, Google has a market cap of $190.28 billion. Based on their closing prices, traditional media's Big 3 - Time Warner ($71.23 billion), Walt Disney Co. ($68.50 billion) and News Corp. ($49.00 billion) - equaled a combined $188.73 billion.
Looked at another way, Google's market value is now 3.6 times greater than all of Madison Avenue's publicly traded ad agency holding companies - WPP ($17.72 billion), Omnicom ($16.43 billion), Publicis ($8.57 billion), Interpublic ($4.89 billion), Aegis ($2.96 billion), Havas ($2.484 billion), and MDC Partners ($274 billion) - combined.
The relative valuations of the new and traditional media companies are more than just symbolic. They signal investor confidence that allow companies to leverage their share value in stock-based acquisitions that can help companies grow even bigger and more dominant over time. And if Google's high price/earnings multiple seems bubblish, it wasn't apparent to experts on Wall Street.
Analysts from investment giants like Piper Jaffray and Thompson Financial raised their expectations for Google last week, as the company moved closer to releasing its latest quarterly earnings on October 18. Due in part to improved revenue forecasts, analysts at Bear Stearns, for example, have pegged the search giant's stock to reach $625 per share by the end of 2007--setting a target price of $700 dollars.
Google's share price has grown along with its share of search, and push into areas like contextual advertising, and hosted email, calendaring and publishing applications. Shares initially sold at $85 when the company went public in August 2004--and had closed at about $460 by the end of last year.
The search giant's progress has even driven some industry analysts (namely Silicon Alley Insider's Henry Blodget) to forecast shares to hit $2,000 over the next few decades--but this quarter's all-important earnings release will most certainly determine the stock's performance for the near term.
2. Cars.com Shifts Super Bowl Buzz Into Gear
by Wayne Friedman
It's October, and that means buzz marketing for those prospective Super Bowl advertisers has begun.
Super Bowl newcomer Cars.com will buy its first spots on "Super Bowl XLII," which will run on Fox in 2008.
The price is in the $2.7 million-per-spot range, according to industry estimates--about the average price that many other advertisers have already paid for the big game. It has also been estimated that about 50% to 60% of those Super Bowl commercials have already been sold.
In conjunction with this deal, Cars.com, the auto retailing shopping site, will increase its spending by more than 50% next year. The company says it will launch a "national integrated media campaign" that will run throughout the year, and buy hundreds of newspapers, TV stations, and Web sites.
Helping its marketing plans will be the recent Cars.com deal with Yahoo Autos. The company says it provides Yahoo Autos with two million auto listings.
Cars.com isn't the first to spin its big Super Bowl purchase with some press--and not even the first this year. Some marketers are now taking to spinning purchases that may not even be made.
This past summer, GoDaddy.com--the notorious Internet domain-selling site that has made a career of getting its TV commercials rejected by broadcast networks because of their racy content--may sit out this year's event.
Bob Parsons, GoDaddy.com's chief executive, said in his blog:
"The big complicating factor is that there are many other good alternatives. For example: Earlier this year GoDaddy.com signed on to be the Presenting Sponsor for the 2007 Indianapolis 500 Indy Car Race. And the results were good."
He adds: "And then there's always the risk that our ads on the Big Game might stumble. For our ads to work they need to be "super" edgy--or they don't work. There's always the possibility that we might not be able to get an appropriately edgy ad approved."
Parsons estimates with all the commercial revisions that go into GoDaddy's Super Bowl spots--and possibly buying two or three Super Bowl TV placements for that commercial--he expects the overall price tag to be around $10 million.
This year Fox will gave marketers the benefit of placing ads on sister Web site MySpace, encouraging viewers to go to the popular social networking site during the game to view on-air promotions.
3. Health Advocates To Use Roaming Place-Based Video
by Erik Sass
Say it three times fast: roaming out-of-home place-based peer-to-peer digital video. That's the new strategy being adopted by the Association of Black Cardiologists to reach the African-American community with information about risk factors and prevention strategies for heart disease. While there's no advertising, the medium itself may be of interest to marketers, as it combines digital video with word-of-mouth and peer-to-peer strategies.
To spread the news, the ABC is giving laptop computers to 200 community health volunteers who will visit popular meeting places, including barbershops and churches, where they will also take blood pressure readings and give one-on-one advice. The slickly produced video segments focus on the ABC's "Seven Steps to Good Health," including advice about diet, exercise, and smoking cessation tailored for the African-American community. The mortality rate from heart disease is 23% higher among African-Americans than the population at large.
The strategy has a couple of advantages: the video messages don't require installed video equipment; they are reinforced and elaborated through personal contact; and they benefit from the positive associations of the specific locations.
The new strategy for public health advocacy comes as marketers are beginning to reach minority audiences through some of the same venues. In late September, Alloy Media + Marketing's urban and multicultural division, Alloy Access, announced the launch of an out-of-home ad network targeting African-American and Hispanic consumers via barbershops and salons. The barbershop and salon agreement with the Black Owned Beauty Supply Association opens up potential relationships with all 1,700 of its members. At launch, the network includes 400 venues in New York, Atlanta, Chicago, Baltimore and Washington, D.C. Alloy plans to double this number by the end of 2008.
4. Targeted Pitch: Reach The Planners, Reach Their Clients
by David Goetzl
When John Rood makes the rounds at big-time agencies with his sales counterparts, the ABC Family marketing executive is keenly interested in the psychographics of the junior planning staff.
The reason is simple: Rood is always looking for ways to craft creative trade campaigns to reach planners in their 20s, who fit ABC Family's target. He hopes he'll convince them to persuade their buying counterparts to increase budgets or give the network a shot for the first time.
"In a hyper-competitive media market, we definitely have to keep ourselves front and center with these decision-makers," said Rood, senior vice president of brand marketing.
His latest attempt kicks off next week, Oct. 17-21, as the network will send a double-decker sightseeing bus around New York promoting its annual programming stunt "13 Nights of Halloween," as well as a new original film. Its itinerary includes stops at major agencies.
The promotion, of course, has the dual target of agency executives and potential viewers. (A secondary message is the Disney-owned network's shift on Time Warner Cable in Manhattan from channel 14 to 38.)
"We're combining the consumer appeal and trade appeal of this event," Rood said.
The bus will be wrapped with promotional messages, and will feature dressed-up "werewolves" riding on top. The goal is to drive interest in the original movie "Nature of the Beast," which launches the Sunday night the five-day tour ends. The plot involves a couple planning a wedding, when it's revealed that one partner is a werewolf. The other, however, is still headed to the altar.
Street teams will ride along doling out items with tune-in messages. The campaign is a joint effort with the Mr. Youth marketing shop. The ninth-annual "13 Nights of Halloween" programming runs Oct. 19-31. Outside the trade realm, it will receive promotion in print, on radio and in-theater in the New York DMA.
Now in 91 million homes, ABC Family has increasingly been launching original programs. Its target demo is 14- to-28-year-olds, making junior planners at agencies part of its upper reach. In addition to the Halloween holiday programming, the network annually runs "25 Days of Christmas."
5. Better Homes and Gardens to Help Sell Homes
by Erik Sass
Better Homes and Gardens is lending its name to one of the nation's largest real estate brokers--Realogy Corporation, which manages residential real estate brands including Century 21, Coldwell Banker, and ERA, publisher Meredith Corporation announced Monday. These well-known brands will be joined by a new franchise, Better Homes and Gardens Real Estate, beginning July 2008.
In return for putting the magazine's stamp on real estate transactions, including "for sale" signs, promotional brochures, and a Web site, Meredith hopes to see lucrative returns in the form of guaranteed ad spending by Realogy in various Meredith titles, as well as royalties from actual real estate transactions. The deal is scheduled to last 50 years, after which it may be renewed.
Per the terms of the deal, Realogy will also gain access to certain database services. Meredith maintains a consumer database with about 85 million names with a host of demographic and lifestyle information. Better Homes and Gardens in particular has a circulation of 7.6 million and a readership of almost 40 million.
Meredith said the deal will also help create new advertising opportunities for new and existing clients. Plausible candidates include manufacturers of homewares and home-improvement products.
In May, the company debuted a new market research product, HomeSight--which identifies and quantifies products used by consumers in home renovations, including where they usually buy them. HomeSight was launched in partnership with CNW Marketing/Research, a consumer research organization based in Portland, Oregon. CNW's database of 5 million households covers a spectrum of geographic locations, financial attributes, "lifestages" and various related demographic attributes. Meredith said it will present the data to major homeware manufacturers and makers of other products used in home renovations, focusing on specific areas like bathroom or kitchen projects.
Last week Meredith announced its acquisition of Dallas-based Directive Corporation, a firm that specializes in database strategy, analytics and customer-asset management.
6. Project Apollo Will Include Four Radio Bigs
by Erik Sass
The next set of data from Project Apollo will include estimated audience figures for ads broadcast by Dial Global, Jones Media America, Premiere Radio Networks, and Westwood One, radio ratings firm Arbitron announced Monday. The data is made available to the seven advertisers on Project Apollo's steering committee: Kraft, Pepsi, Pfizer, Procter & Gamble, SC Johnson, Unilever and Wal-Mart.
The four radio companies represent a broad swath of radio airplay in the United States. Premiere Radio Networks, a subsidiary of Clear Channel, syndicates 90 radio programs to 4,600 affiliate stations. Westwood One, managed by CBS Radio, syndicates 150 programs to 5,000 stations around the country. Jones Media America syndicates 120 programs and services, and Dial Global is the country's largest independent network, representing 60 independent producers and syndicators.
The participating radio companies must encode their advertising for measurement by Arbitron's Portable People Meter as part of the Apollo Project. The Apollo Project is a joint venture between Arbitron and the Nielsen Company that seeks to achieve holistic measurement of all media exposure, including TV, radio, magazines, newspapers and Internet, then correlate it with actual purchasing patterns. It relies on a panel of over 11,000 individuals in 5,000 households in the Houston area. Arbitron's PPM handles measurement of exposure to various electronic media including radio and TV. Purchase tracking is performed by AC Nielsen Homescan.
7. NBC Wins Sunday Night, With ABC Close Behind
by Wayne Friedman
Viewers' TV life was wild for the top-notch NBC NFL game between the Chicago Bears and Green Bay Packers. But for the CW's new show "Life Is Wild," life was too tame.
A thrilling come-from-behind victory by the Bears had NBC tackling the competition with strong Nielsen preliminary live-plus-same-day DVR playback numbers--a 7.7 rating/19 share among adult 18-49 viewers for the game. NBC posted a strong 6.0/16, easily winning Sunday night.
CW's new family drama set in Africa, "Life Is Wild," had less nail-biting results, and could only rise to a 0.4/1 in adults 18-49. It couldn't even keep pace with an "America's Next Top Model" rerun, at a 0.5/1.
Competing with NBC, ABC had its usual strong results. Its "Desperate Housewives" came in with a predictable 6.6/16, which was 12% off its season debut of a week ago. Other strong ABC performers--"Extreme Makeover: Home Edition" (a 4.1/10) and "Brothers & Sisters" (a 4.5/12) at 10 p.m.--helped the network to a solid second place for the evening, at 4.4/12.
Fox was a distant third. Its comedies, as usual, scored its best numbers--"Family Guy" earned a 4.0/9 in the meat of its Sunday lineup, 9 p.m. to 10 p.m., with "The Simpsons" reaching a 3.6/10 at 8 p.m. CBS was right after Fox, getting its best from "Cold Case" (a 2.9/7) and "Shark" (a 2.5/6). This brought CBS in with a 2.6/7 for the night. CW's "Wild" debut aside, the network's two new magazine shows didn't provide much punch for the night either: "CW Now" took a 0.4/1 and "Online Nation," a 0.3/1. It finished off the night with a 0.4/1.
On Media
8. Local Media Slowly Learn To Harvest Digital Gold
by Diane Mermigas
Local television stations are sitting on prime digital real estate at a time when consumers cherry-pick content, marketing and information according to their personal tastes and locale. Yet, broadcasters are struggling to shift their grassroots gold to the Internet.
Their future depends on it.
"It is local broadcast TV's game to lose," observes veteran Bear Stearns analyst Victor Miller, who has tracked the television and radio business for more than a decade. This is a critical turning point for TV station owners, who are scrambling to replace existing advertising revenues being siphoned by their own affiliated networks, local newspapers, Internet service providers and other new-media platforms. As it turns out, transferring their unmatched local connections and expertise to the Web to generate new consumer and advertiser interest is a challenge.
Some newspapers are aggressively adapting by adding video to their text-centric Web sites as they fight to preserve and capitalize on the same local leverage. Newspapers generally have outperformed local television stations at generating online ad revenues, which are the fifth and fastest-growing of all ad platforms. Nearly $30 billion in overall online ad spending this year will surpass billboards, cable, radio and Yellow Pages.
Broadcasters must better position themselves strategically to secure their share of online ad dollars and consumers from such unlikely competitors as Craigslist to Google. Online will represent 10% of local television advertising dollars by 2010--or twice what it is today, according to Gordon Borrell, CEO of Borrell Associates, a media research and consulting firm. In 2007, online sales are expected to be as much as 10.7% of gross revenues at the Washington Post Co.'s newspapers, 6% of gross revenues from combined newspaper and television efforts at Gannett, and only 2.4% of gross revenues at Hearst-Argyle television, Borrell reports. Of the $7.5 billion in overall annual domestic local online ad spending, newspapers grab 36%--while TV stations only garner 7.7%, Borrell reports. Clearly, local television is losing online ad dollars to pure-play Internet players such as Google and Yahoo, which collectively siphon 33.2% of total U.S. local online advertising.
Other TV station owners need to aggressively put their core competencies to work if they want to see any of the online video revenues that will comprise 35% of total local online revenues by 2010. But those initiatives must be made now.
Too often, local television and newspapers have been their own worst enemy--impeded by an attitude that digital technologies are a disruption rather than a new business opportunity. That doesn't happen simply by extending television content and advertising to the Web. Innovative new forms of both are required to sustain their existing businesses and create new net growth.
The estimated $1 billion in annual classified advertising that newspapers are losing to online platforms is a dramatic example of what not to do, in terms of taking industry stature for granted or trying to transfer a service from a static to an interactive platform without changing it accordingly.
Next year's elections will be a similarly pointed test for broadcasters.
Should some television executives pioneer an inventive way to engage consumers in political grandstanding online, they might begin generating some meaningful revenues to offset steady losses in more traditional venues. Even now, only one-quarter of the local media companies with Web sites recently surveyed by Borrell generated more than $1 million in gross annual revenues online, and only 6.6% had Web sites generating more than $10 million.
In a surprising twist, Borrell reports that some of the smaller market broadcasters are among the top performers, although the estimated $89 million in ad dollars generated from television station Web sites this year represents only 25% of the money spent by local advertisers on online video ads. In what appears to dramatically underscore the base cost differences between traditional and online media platforms, 68% of the 570 local broadcasters surveyed by Borrell said their nascent Web sites were already profitable.
If their financial fortunes this year are any indication, local TV stations cannot afford to give up any revenue ground.
Analysts cite a secular shift toward more national campaigns and growing fragmentation of consumers and advertisers across alternative media platforms, as the Internet increasingly rivals television as the most efficient and effective way to reach a wide audience. Even with about two-thirds of their advertising revenues coming from national sources, TV station owners are feeling the pinch as the credit crunch squeezes local real estate, financial, home construction and other related businesses' ad spending, which is expected to worsen in coming quarters. Overall, TV station revenues are down nearly 10% from a year ago.
Television stations in general will barely hang on to their collective $26 billion in ad spending by 2011, according to a new forecast from Veronis Suhler Stevenson.
This is not just another lull before a quadrennial election and Olympics year. "Today's industry is at a pivotal point," Miller says.
For now, companies with both newspaper and television properties may be growing the fastest online as they more fully rationalize their resources from two core operations for video on demand, classified and display advertising. Although Gannett and Belo reported that their overall online advertising revenues were up 14% and 18%, respectively, their TV Web revenues each grew 40% in the second quarter--partly because they are incorporating more video elements.
Some of that strength also could be attributed to both companies' news dominance, although many TV stations have been unable to monetize or maintain the local news leverage they once enjoyed. News and other local content has unique consumer appeal, and can assume an intriguing interactive dimension online and command premium pricing with advertisers--all as a potent counter to the fading support stations are getting from their affiliated broadcast networks.
However, Miller and Borrell caution broadcasters to avoid the "trap of upselling current advertisers" by sensitizing their sales force to price and peddle interactive branding differently. Another Borrell report earlier this year forecast that video advertising and paid search will dominate the local Web by 2012. In order to secure its share of the wealth, local TV broadcasters must view and sell their Web sites as more than a crossover platform medium where they can simply extend existing traditional advertisers and content.
In five years, local online video advertising will top $5 billion, or more than one-third of all local online advertising. "Where will that money go?" Borrell asks. "Not to the purveyors of traditional 'word from our sponsor' commercials, but to those who can offer long-form video information that their Web site visitors actually chose to see."
News Briefs
9. Hyundai/Kia Reviews Media, Incumbent Carat Invited To Pitch
World Marketing Group, the media management group for Korea's Hyundai Motor America and Kia Motors America, late Monday announced plans to conduct a review for its media agency of record. Incumbent media agency of record Carat was invited to pitch and was named a finalist in the review. No other finalists were disclosed, but WMG said the review would not impact its creative agency roster, including Goodby Silverstein & Partners and davidandgoliath. Management consultant RothAssociates has been named to handle the review.
10. Rutman, Hayes, Millard Named Reisenbach Distinguished Citizens
MPG North American President-CEO Charlie Rutman, American Express Chief Marketing Officer John Hayes, and Martha Stewart Living/Omnimedia President-Media Wenda Harris Millard have been named 2007 recipients of the Reisenbach Distinguished Citizenship Awards, which will be presented Dec. 3 during the 16th Gala Tribute for a Better and Safer New York. The event, the awards, and a foundation, were created in memory of John A. Reisenbach, the All American Television executive who was murdered on a Manhattan street in 1990. Previous Distinguished Citizenship recipients include Discovery Communications' Joe Abruzzese, NielsenConnect's Jon Mandel, DraftFCB's Bill Cella, MTV Networks' Judy McGrath, GroupM's Irwin Gotlieb, producer Dick Wolf, TV executive Dennis Swanson and, former Time Warner chief Gerald Levin.
Tuesday, Oct 09, 2007
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