A few bad apples continued to drag spot cable advertising sales down during the third quarter of 2003. At a time when many emerging media would be posting robust rates of growth, spot cable ad sales declined 5 percent during the third quarter and the first three quarters of 2003, compared with the same periods in 2002, according to a MediaDailyNews analysis of data from the Big 7 cable operators that report their local and national spot advertising sales activity. The weak industry performances comes despite strong results from a few major operators, especially Comcast, Insight, Mediacom and Cablevision. The main factor were steep declines by financially plagued Time Warner Cable and Charter Communications. Time Warner experienced a 24 percent decrease in the third quarter and a 30 percent cut through the first three quarters, though much of the dip was due to comparisons with an inflated 2002 ad sales base, which included an extraordinary amount of "inter-company" sales from other Time Warner divisions. While not exactly humming, the spot broadcast marketplace at least has been growing. Through the first half of 2003, local broadcast TV ad sales was up 0.2%, according to the Television Bureau of Advertising. Local broadcast results are expected to be even stronger when third quarter data is released in the next few weeks. The weak advertising marketplace being reported by the major cable operators comes in contrast to the red-hot market being touted by local cable ad interconnects. Cable spot sales reps like National Cable Communications have been tracking double-digit ad sales increases for interconnect sales. Q3, Year-To-Date Local Cable Ad Sales (In Millions) Q3 '03 Vs. '02 YTD '03 Vs. '02 Time Warner $115.0 -24% $335.0 -30% Cablevision $22.0 +10% $62.0 +3% Comcast $276.0 +7% $797.0 +8% Charter $64.0 -26% $188.0 -13% Cox $99.5 +3% $278.3 +1% Insight $14.6 +12% $42.3 +12% Mediacom $10.8 +11% $30.7 +11% Total $601.9 -5% $1,733.3 -5% Source: MediaPost compilation of data from company reports.
Did anyone say comeback? Newspaper publishers are. As a group, they demonstrated strong growth in most categories during the third quarter of 2003, according to a MediaDailyNews analysis of data from eight publicly traded newspaper companies. The group's advertising revenues rose 3 percent to $3.16 billion in the quarter ending Sept. 30. Companies included in the compilation are a representative sample of the nation's newspaper industry, owning not only the large national newspapers (USA Today, The Wall Street Journal and The New York Times) but also large, middle-market and smaller daily and weekly newspapers. The companies are Gannett, Journal Register, Knight Ridder, Lee Enterprises, McClatchy, New York Times Co., Pulitzer Inc. and Tribune Co. Most of the companies showed increases in advertising revenue during the quarter, with the exception of Knight Ridder (down 1 percent) and Pulitzer Inc. (flat). The largest gains were posted by McClatchy (up 7 percent) and Gannett (up 6 percent), with three percent increases reported by Lee Enterprises and Tribune. New York Times Co. and Journal Register were both up slightly. For most of the newspapers, retail was up slightly during the third quarter. Retail is key among local newspapers, which depends on the revenues to fill its run-of-press pages and preprints, and generate reader interest and involvement. The national category, which is important for many papers but not for all of them, was strong at Scripps and Tribune. The Wall Street Journal, a national newspaper that has had rough quarters since the economy took a dive in 2000, said recently that it might have seen a light at the end of the tunnel. At the same time, classified remains down overall despite two generally bright spots and one troubled component. Most of the newspapers say automotive and real estate advertising is hot, with double-digit increases in some regions. But employment advertising, which crashed with the economy three years ago, has yet to recover. While some say the newspapers might be near the bottom, others say it will take 2004 before jobs - and, therefore, help wanted advertising - comes back.
A few years ago, teen magazines were all the rage in the publishing world. The category's venerable titles (Seventeen, YM and Teen) remained advertisers' little darlings, while upstarts like Teen People and CosmoGirl debuted to acclaim from readers and marketers alike. Survey after survey found that the purchasing power of teen girls was growing exponentially, so it wasn't much of a surprise when companies that traditionally hadn't targeted teens started to shift dollars out of the 35-plus category and into the teen mags. But then the recession kicked in and the teen mags started to have trouble finding dates to the prom. Teen went the way of leg-warmers and Wham!, while Seventeen's sluggish performance led to a front-office purge in July that saw vice president/publisher Ellen Abramowitz and editor-in-chief Sabrina Weill replaced by, respectively, Redbook vice president/publisher Jayne Jamison and CosmoGirl editor-in-chief Atoosa Rubenstein. As for the other titles, only CosmoGirl thrived during the down years. It grew 20% in pages in 2002, and remains on pace for an 11% gain in 2003; Teen People and YM are more or less flat in terms of ad pages this year. In light of the category shakeup, the emergence of ELLEgirl as one of the year's success stories surprised many onlookers. Even now, one or two pundits snipe that the magazine's marketing model - it bills itself as "the international style guide for girls who dare to be different" - will have only a limited appeal. On the other hand, its quick growth has made somewhat of a seer out of Magazine Publishers of America president Nina Link. Speaking about the teen-mag category in May 2001, she said that it would likely trend toward niche publications: "Teens and news, teens and sports, teens and hobbies." ELLEgirl is proud to be niche. "We're not mass and we'll never be mass," says vice president and publisher Deborah Burns. "The more mass you are, the more you have to dilute the message to please the largest number of people. That may work in other magazine categories, but we believe that smaller is better." At the same time, of course, she stresses that ELLEgirl is the largest teen fashion/beauty magazine in the world. Since its debut in August 2001, ELLEgirl has slowly grown its frequency (quarterly in 2002, bimonthly in 2003, eight times per year in 2004) while at the same time creeping its rate base upward (it rises to 500,000 effective February 2004). Burns, who ascended to her post late last month when Jeanne Schwenk announced she'd be leaving the magazine at the end of the year (she's getting married and moving to Chicago), claims that this growth plan sits quite well with advertisers. "We reach the influencers, which is a compelling story for them," Burns explains. "[Influencers] don't just influence their peers and each other, but also their cool youth-seeking parents in a way that no other generation before has done." It's an enormous market: according to Teenage Research Unlimited, teens spent $170 billion in 2002, and that figure doesn't account for Little Janey pressing dad to splurge on the sedan rather than the coupe. Obviously, ELLEgirl's most important ad category is fashion and beauty, with companies like L'Oréal leading the way. Despite favorable ad page and revenue trends (the mag is up, respectively, 103% and 150% over 2002 levels, though 2003's two extra issues skew the year-to-year comparison), Burns is determined to drive ELLEgirl's non-endemic advertising upward, with consumer electronics as a logical primary target. She promises that such expansion will be handled carefully, taking a subtle swipe at the competition in the process: "The [companies] we pursue are going to be the ones teens respond to and buy. Some of the advertising we see in Teen Vogue may not be as relevant for this market. The reader of that magazine would seem to be different than the reader of ELLEgirl just by virtue of the advertising in the magazine." As for her readers, Burns is quite impressed by their level of marketing and cultural sophistication. "They've been marketed to since they were born," she notes. As a result, Burns says, ELLEgirl shoots higher than many of its peers, attempting to avoid the my-mother's-a-drunk-and-I-had-to-raise-my-brother-and-sister drivel that used to plague the genre. "We try to respect the reader and inspire rather than dictate," she explains. "If you're going to be mass, you have to prey on their insecurities - 'am I pretty enough?,' 'do I need a boyfriend?' We like to think we're above that."
As online publishers use new technology to provide more, better and faster audience metrics, the pressure has begun to build on traditional, offline media to do the same. While the combination of falling ratings and circulation is putting the greatest pressure on broadcast and print, other offline media are quickly adopting technology to prove that we keep our audience delivery promises to advertisers. For example, Arbitron just released a preliminary version of its outdoor measurement system covering nearly 7,200 pieces of outdoor inventory in the Atlanta market. The test, which used a hybrid of personal diaries and global positioning satellite (GPS) technology, measures the exposure of individual respondents to a variety of out-of-home media, including posters, bulletins, and even street furniture. Last year, VNU's Nielsen Outdoor said it would test a metered audience measurement system for outdoor advertising using GPS to track motorist and pedestrian exposure to outdoor advertising. Members of a randomly chosen, demographically balanced sample will carry small, battery-operated meters that will automatically track their movements at 20-second intervals, making the system almost completely passive. This information will then be matched to a map of geo-coded outdoor sites, to determine the respondents' "opportunity to see" an ad. Asphalt Media which puts mobile media ads on fleets of trailers that each day travel dedicated routes in every major DMA in the nation creating millions of impressions among the nation's 125 million auto commuters and millions of shoppers, is using GPS technology to track its trucks on moment by moment basis to help support Asphalt's Post Performance Report, a range of studies to prove that mobile media keeps its impression guarantee. Advertisers will be able to use web access to see exactly where their ads are at any moment and understand the demographics of the communities surrounding the trailer. Start-up IQStat collects information about radio listening and uses GPS technology to track when the car drives past outdoor advertising. Data collected include: whether the radio is on or off; if someone is listening to a tape or CD; radio volume level; where the vehicle is located; the station to which the radio is tuned; the demographics of the listener; and whether the vehicle is running or not. By continuing to rely on audiences projected from questionnaires, or diaries or small-sample-based metered homes, broadcast is giving media companies which are faster to adapt new audience measurement technology a huge opening to take advantage of continuing audience fragmentation and broadcast's own falling viewer numbers. When media using the newest technology can deliver nearly real time audience data, who will want to wait 18 months for a magazine publisher's ABC statement to be confirmed as accurate? Or believe sweeps number represent anything other than desperate network attempts to hide the fact that viewers are leaving the networks in droves for cable or other media? Outdoor is also pressing the technology initiative on the creative side. For example Asphalt is exploring technology that will allow advertisers to automatically alter the ad text as the trucks moves up the highway (such as telling surrounding drivers the next exit to a fast food joint or to tie into a current event like quickly promoting the videos of an actors who's won an Oscar.) A promise made to advertisers ought to be a promise kept. That includes not only execution but also audience guarantees. Michael Donovan is founding partner of Donovan and Green, a 25 year-old branding and marketing communications company specializing in developing and executing brand strategy, as well as creating experiences around brands.