The erratic print media ad recovery continues to post mixed signals with the latest victim being the business press. Following languishing trends for consumer magazines and newspapers, American Business Media Monday revealed that business-to-business ad pages and ad spending slumped again in August. Pages were down 6.3% against August 2002, while spending dropped 3.5%. Following a small page and spending surge in June - the industry's first appreciable uptick since the beginning of the b-to-b ad decline in November 2000 - pages (9.7%) and spending (7.9%) slid again in July. For the year to date, pages are down 4.1% and spending is off 0.2%. While the B-to-B ad downturn was anticipated, American Business Media president and chief executive officer Gordon Hughes nonetheless sought to put some positive spin on the balance of 2003, noting , "What we're hearing from our members is that the early fourth-quarter results are not as strong as expected." The group is now estimating 1-3% spending growth for the year. Business-to-Business Ad Pages, Dollar Trends August '03 1st 8 Months '03 Ad Pages -6.4% -4.1% Ad Dollars -3.6% -0.2% Source: Business Information Network, American Business Media, CMR. Of the 12 ad categories monitored by ABM, only services/direct response/classified and drugs/toiletries showed page gains in August (both were up 2.4% against the year-ago period). While manufacturing/electrical equipment (23.2%) and computers (22.4%) suffered the biggest percentage drops, even the venerable automotive category was down (3.0%). In terms of spending, four of 12 categories improved in August: automotive (36.7%), services/direct response/classified (7.5%), drugs/toiletries (6.1%) and retail (2.3%). Double losers (pages/spending) included software, manufacturing/electrical equipment, materials/components, finance/business/advertising, travel and telecom.
Like the growth of product integration deals, there doesn't appear to be any shortage of companies trying to measure the value of the hot new media strategy. Intermedia Advertising Group (IAG), the New York-based firm best known for measuring the popularity of TV ads through a panel of online TV viewers, Monday unveiled plans to enter the burgeoning field of product placement. The yet-to-be-launched service, IAG In-Program Performance, will assess both the recall and viewer attitudes toward product placements and sponsorships IAG currently measures network primetime along with MTV, USA Network and TNT. By the middle of 2004, the company plans to extend measurement to the top 10 rated national cable networks. IAG began surveying at the start of the TV season last month. The system looks at, among other things, the type of product and whether it's mentioned, shown or both; whether the product is shown in the background or foreground; its duration of time on screen; whether it's embedded; how many program segments the product appears in. It also takes into account whether the central character or a bit player uses the product and, perhaps most interestingly, whether viewers see the product placement as positive or negative to the brand in the context of the show. The survey question asks whether, on a scale of one to five, the viewer is favorably inclined toward the product's presence within the program. "That question sums up the debate that's been going on for two years over how to measure product placement," said Alan Gould, co-chief executive officer at IAG. "You obviously need a way to measure recall. That's the first step, just like with traditional advertising. The second step is, does it fit, does it work, is it natural, because you can have a placement that may break through and people will recognize it and recall it. But they may be so put off by the fact that it doesn't really fit within the content, which is the main reason why they're watching." IAG has more than 40 syndicated clients for its ad performance studies. Gould said IAG's clients had been asking for a way to measure product placement outside the context of CPM. IAG will be collecting the information every day, which will help build a base of knowledge. "They want to understand recall, they want to understand fit," Gould said. "They all have ways to work with the data to get ROI themselves. Everybody places different values on certain types of advertising and what it does for them. What they've asked us to provide them is hard recall and fit measures. In essence, we've been asked to create transparency." Gould said the IAG's survey doesn't claim more than that. IAG's effort is one of several in the industry to quantify product placement. Another company, iTVX of New Rochelle, N.Y., has about a two-year headstart. Founder Frank Zazza, who has more than two decades worth of product placement experience, has been turning heads with his company's approach to measurement. He's done countless demonstrations to agencies, advertisers and industry groups, most recently at a Kagan conference on product placement a month ago in New York City. Zazza said that iTVX has been chipping away at what he calls the "subjectivity" issue, creating an actual valuation based on dollar value. There are now 45 parameters and it's more than just audience recall, he said. "What we have done is find out all the parameters that are necessary for evaluating product placement," Zazza said. He also points to the need for further research, not only from advertisers and agencies but also from academics who can help get at the answers as well. Zazza's company has held discussions with professors from the University of Texas and the Wharton School of Business at the University of Pennsylvania. Isabella C.M. Cunningham, chair of the department of advertising at the University of Texas at Austin, said that the measurement of product placement is still in its infancy although product placement itself has been done for decades. "There's nothing new about product placement," she said. "The only new thing is that people have started to worry about measuring it and finding the relative value." Students and professors at the University of Texas are also doing a lot of research on the topic of product placement. Cunningham said there hasn't been a lot of research into attitudes toward the placed products, and that's one area that the University of Texas is working hard. One question: If a product has a negative attitude in the mind of the public, does placing it in a program that has high likeability change the viewers' attitudes toward the product? Cunningham said research needs to be done into the product placement's role in the media mix, whether it works better if the advertiser places commercials at the same time or on different channels, and what the best role for print media is joined with product placements. Steve Sternberg, director of research at MAGNA Global, said that while an incentive system like IAG's Reward TV may have some value in limited situations, an objective approach would be better. Agencies would want a representative sample. "Product placement should not be the centerpiece of any strategy, but rather must still be seen as added value, until there is adequate research to place a 'value' on various levels of product placement," Sternberg said. Sternberg said there is right now no basis to place a fractional value of a 30-second commercial on product placement. "With commercials, you're paying for a message, not just an appearance," he said. "Whatever value is finally determined will vary significantly based on the level of product integration into the show."
Pulitzer Inc. posted a flat third quarter in advertising revenues, although a spate of retail ads last year made for tough comparisons. The newspaper publishing company's advertising revenues were $81.8 million in the third quarters of both 2003 and 2002. Many of the major categories were down slightly. Retail advertising fell to $28.4 million from $29 million a year ago, mostly because 2002's results had been boosted by $1.2 million in retail grand-opening ads at Pulitzer's St. Louis newspapers. But slight declines were posted in national (down to $6.4 million from $6.5 million a year ago) and classified (down to $32.4 million from $33.04 million in the third quarter of 2002). Excluding the grand-opening revenues, Pulitzer would have had a 1.4 percent increase in advertising revenues. In St. Louis, total ad revenue was down 1.4 percent in the quarter, including a 0.7 percent decrease in retail because of the grand opening revenues. "We had a tough hill to climb in St. Louis," said Robert C. Woodworth, president and chief executive officer of Pulitzer. But he said that excluding the one-time revenues from last year's third quarter, retail would have been 3 percent in the third quarter of 2003. National ad revenues rose 3.9 percent. Classified was down 3.8 percent, helped by an 11 percent drop in help wanted and a 4 percent drop in automotive. Real estate was up 3.4 percent in St. Louis. In Tucson, where the company owns 50 percent of the Arizona Daily Star, comparable ad revenues were down 2.1 percent. Yet there, national advertising was down double-digits and classified, including help wanted, was up 8.8 percent. Mark G. Contreras, a senior vice president who runs the Tucson operation for Pulitzer, said about half of the decline in retail was because pharmaceutical companies didn't run ads this fall. Pulitzer didn't provide projected revenues for the fourth quarter and full year, although it said that it stuck to its predictions on earnings per share. But Woodworth said that continued poor advertising in help wanted, automotive and retail was making achieving it would be "more challenging than originally anticipated."