Proclaiming that the U.S. and world economies are "getting back to pre-recession levels," Madison Avenue's de facto scorekeeper Tuesday revised his outlook for 2004 ad spending marginally upward and offered his first predictions for 2005. Bob Coen, senior vice president-director of forecasting at Universal McCann said U.S. ad spending now is expected to climb 7.3 percent in 2004, 0.4 percentage points higher than his initial projection in December 2003. He improved his worldwide ad growth estimate to +6.0 percent, an improvement from December's 5.8 percent estimate, and a further affirmation that the U.S. will outpace worldwide ad growth. The upgrade also means that worldwide ad spending for the first time will pass the half trillion-dollar mark in 2004. Coen also took his first stab at 2005, predicting U.S. ad spending would grow 6.5 percent and worldwide spending would rise 5.9 percent, which are considered healthy rates of growth following a so-called quadrennial year impacted by incremental Olympic and election year spending. Coen said the advertising markets for most major media appear to be in a sustained expansion, and have essentially recovered from the rollback that occurred following the crash of 2001, that followed the implosion of Internet ad spending and the unparalleled traditional media ad growth of so-called "dot-com" brands. In fact, Coen's biggest revision between December and June was for Internet ad spending, which he now predicts will expand 20.0 percent to $6.78 billion, double the 10.0 percent growth rate he predicted for the medium in December. While Coen's Internet numbers are much lower than some other leading forecasters, the revision is nonetheless impressive for a self-described "skeptic" of Internet advertising claims. Nonetheless, Coen said online media have emerged as an integral part of the media plans for most major marketers, noting, "Now they're getting into 2 to 3 percent of budgets." An important driver in ad spending for all media, he said, was the reemergence of dot-com brands, which rose to a height of $5.6 billion in traditional media spending during 2000, only to crash to less than half that amount in 2001. But Coen said "the shakeout is over. They're coming back." At $2.65 billion in 2004, Coen estimated dot-com brand spending in traditional media would expand 20.0 percent this year, marking the first double-digit growth for the category since the Internet crash. Dot-coms are not a traditionally classified ad industry category, but represent brands contained in other categories, include retailing, telecommunications and others. Nonetheless, if they were grouped as a separate category, Coen said they would now rank among the so-called "primary" ad categories that drive much of the industry's growth. "They're about the size of fast-foods," he said. "It's not going to be Rx drugs, or food, but it's a pretty good size category out of nowhere." More importantly, unlike the undisciplined run-up by dot-com marketers during the Internet expansion, Coen said the categories expansion is sustainable. "Dot.com" Brand Spending In Traditional Media Ad Spending Vs. Prior Year 1998 $0.654 billion +77% 1999 $3.086 billion +372% 2000 $5.597 billion +81% 2001 $2.662 billion -52% 2002 $2.150 billion -19% 2003 $2.210 billion +3% 2004 $2.650 billion +20%Source: Universal McCann. In theory that, and the rebound of other key categories hit hardest by the economic recession, including travel and financial services, should benefit all media as they rebound, but Coen portrayed a relatively uneven expansion for various media in the marketplace, especially the major TV networks, which had been seen as leading the consumer media out of the recession, but which have now been revised downward, according to Coen. In their place, he has considerably upgraded the outlooks for cable and syndicated TV, local TV and direct mail. The biggest downgrades went to network broadcast TV, national newspapers and Yellow Pages. Original, Revised 2004 Ad Growth Original* Revised** Change Big 4 TV Networks +12.0% +10.0% -2.0 points National Spot TV +9.0% +9.0% NC Network Cable TV +12.0% +14.0% +2.0 points Syndicated TV +9.0% +13.0% +3.0 points National Radio +7.0% +7.0% NC Magazines +5.0% +5.0% NC National Newspapers +7.5% +6.5% -1.0 points Direct Mail +5.0% +6.5% +1.5 points National Yellow Pages +3.5% +1.0% -2.5 points Internet +10.0% +20.0% +10.0 points Other National Media +7.0% +7.2% +0.2 points National Media Total +7.4% +8.3% +0.9 points Local Newspapers +6.0% +4.5% -1.5 points Local TV +7.0% +8.0% +1.0 points Local Radio +6.5% +6.0% -0.5 points Local Yellow Pages +3.5% +2.0% -1.5 points Other Local Media +7.2% +8.2% +1.0 points Local Media Total +6.0% +5.5% -0.5 pointsAll U.S. Media +6.9% +7.3% +0.4 pointsOverseas Media +4.5% +4.8% +0.3 pointsWorldwide Media +5.8% +6.0% +0.2 pointsSource: Universal McCann. *December 2003. **June 2004. NC = no change.
At a time when industry forecasters are beginning to upgrade their expectations for consumer media spending, B-to-B ad spending continues to languish, although its rate of erosion appears to have leveled off. In April--the most recent month for which data is available--ad pages fell a smidgen, dropping 0.2 percent in the U.S. business press, according to estimates released Tuesday by American Business Media. That's the most stable month yet in a year that has seen B-to-B ad pages drop 2.0 percent, and which follows three consecutive years of significant ad page erosion. B-to-B ad pages fell 3.2 percent in 2003, 15.0 percent in 2002, and 19.7 percent in 2001. Ad revenues rose 2.7 percent in April, and are up 0.2 percent through the first four months of 2004, according to the estimates compiled by the Business Information Network for ABM. "April numbers turned out to be just as we forecast," said Gordon Hughes, president and CEO of American Business Media. "We're projecting that most of the growth for 2004 will take place in the second half of the year." Six of the 11 ad categories tracked by BIN posted an increase in April ad pages. Automotive was up 6.0%; Telecommunications up 5.8%; Drugs & Toiletries up 1.8%; Services, Direct Response & Classified up 1.2%; Retail up 0.7%; and Finance, Business & Advertising up 0.3%. The remaining categories were down: Software by 11.0%; Manufacturing by 5.5%; Computers by 4.4%; Travel by 1.8%; and Home & Building by 1.7%. B-to-B Ad Pages, Revenue Ad Pages Ad Dollars January -4.6% +2.4% February -0.9% +0.2% March -5.5% -2.6% April -0.2% +2.7% Year-to-Date -2.0% +0.6% Source: American Business Media from the Business Information Network database. As of January 2004 estimates are derived from IMS/The Auditor.
Procter & Gamble is giving the ad industry a forum for recognizing media excellence. The award for "best flowchart" can only be so far away. Yesterday in Cannes, France, the packaged-goods behemoth announced its sponsorship of the newly created Gunn Report for Media. The Gunn Report, started by Donald Gunn in 1999, is an annual collection of worldwide creative advertising awards. The initial Gunn Report for Media, to be published in October of this year, will be a similar showcase for industry awards honoring media planning and buying. Details on which media awards will be included and how often the Gunn Report for Media will be issued were unavailable. According to a press release issued by P&G: "The goal of this publication is to put a global spotlight on media innovation and success, and ultimately, inspire a higher quality media around the world." "Everyday, consumers are bombarded by marketers who are vying for their attention," said Bernhard Glock, P&G's manager of global media, at a press conference yesterday. "As an industry, we need to better understand how to reach our consumers when and where they are most receptive. In order to do this, we have to elevate the importance and quality of our media efforts globally." The sponsorship by P&G would appear to be in line with an ongoing push by the company to shake up the way its advertising agencies approach media planning. Back in February, P&G Global Marketing Officer Jim Stengel gave a speech at an American Association of Advertising Agencies conference entitled "The Future of Marketing," during which he encouraged marketers to move beyond focusing solely on 30-second TV spots. Then, in April, P&G also commissioned a complete "communications review," seeking to "redesign its media planning agencies into communication planning agencies." "By sponsoring the Gunn Report for Media, P&G recognizes that media is as vital to our success as the outstanding creative product we demand from our agencies," Glock said. "We value innovation in media, as well as breakthrough thinking and creativity from our marketing partners."
Fresh off a soon-to-be-implemented innovation in addressable advertising, The Weather Channel saw a double-digit increase in its upfront volume for the coming year. The Weather Channel has two upfronts--one based on the broadcast year like other cable networks and then a mini-upfront for calendar year deals. When it's all said and done, The Weather Channel's broadcast-year upfront revenues will increase about 20 percent. "It's not done yet, but so far I'm really pleased," said Paul Iaffaldano, executive vice president and general manager of TWC Media Solutions. Iaffaldano was recently named to replace Lyn Andrews, but he has worked for The Weather Channel in other positions--most recently senior vice president of network sales and advertising product development. This year, The Weather Channel will have between 4 percent and 5 percent CPM increases. That follows research showing that 30-second spots on The Weather Channel are seen and remembered 50 percent more than other cable news channels; ad sponsorships are seen even more, and weather-triggered ads perform even better than that. "We're performing a tad more strongly than many of the other networks. I think part of it was the message of our ratings points being more impactful than other TV ratings points," Iaffaldano said. "I think that message resonated with planners and buyers." About 60 percent of The Weather Channel's upfront inventory was to be sold in the upfront, with 10 percent for calendar year deals and the rest for scatter. Of particular interest is The Weather Channel's new initiative, which will offer truly addressable advertising on a national scale. This was unveiled during the channel's upfront ad sales presentation two months ago in April. It would allow The Weather Channel to take the same technology that it uses to give local conditions and forecasts, and give advertisers the ability to target by time zone, geography, and even the weather. For instance, a car manufacturer could simultaneously run a 30-second spot for a sport utility vehicle in Denver, a gas-electric hybrid in Los Angeles, and a luxury car in New York. This copy splitting will begin Oct. 1. While he declined to provide specifics, Iaffaldano said that by the time the copy-splitting takes effect, there will be about a half dozen deals completed--including an automotive advertiser, a packaged goods company, a pharmaceutical company, and a large retailer. This year's upfront comes at what has been a great time for the channel, in ratings and advertising. Ratings are up 24 percent in adults 25-54 in one big daypart and up 39 percent in another; total day is up 11 percent. Ad revenues have also been strong, with a 37 percent year-over-year increase for the linear channel and weather.com.
In "Absolute Powerpoint," Ian Parker's wonderful essay on the power of Microsoft's Powerpoint software to edit our thoughts, he cites a New Jersey man in an online discussion: "Last week," said the man, "I caught myself planning out (in my head) the slides I would need to explain to my wife why we couldn't afford a vacation this year." I can readily trace the evolution of my own prose as a writer from the days when I used to compose on a heavy old 1939 Royal Office Standard typewriter in the 1970s to an IBM Selectric in the late 70s, to a Wang System 25 dedicated word processor in the early 80s, and finally to MS Word by the mid-80s Back in the 70s, I wrote long-format stuff--fiction, mostly. I first encountered IBM Selectrics as an office temp in Manhattan during the late 70s. I often stayed late in the office to work on my own manuscripts, and found myself absorbed with my new-found power to correct my own mistakes without the need to retype an entire manuscript page. Little did I know... By the early 1980s, I had learned how to work on a Wang System 25 dedicated word processor. Not long after, I started writing exclusively on the word processor. I wound up in a therapist's office with a severe dose of writer's block; I just couldn't get past the first four pages of a new novel, and couldn't figure out why. The answer, of course, had little to do with my writing. But now, twenty years and $200,000 of intensive psychotherapy later, I suspect something else was also afoot: My fledgling addiction to technology had discovered a new and alluring voice in the editing power of the word processor. I simply couldn't resist the urge to start editing my thoughts before they were all the way out of my head. My prose changed commensurately: I went from long-format fiction to short-format sales and marketing copy almost overnight. I all but lost my ability to write anything longer than 1000 words. I had the sudden power to edit my thoughts the very moment they hit the screen. So I did. Such is the imperative of technology in general: New technologies bestow upon us new powers, each of which is exercised immediately, regardless of any other considerations. Such was the case with the atom bomb; Hiroshima and Nagasaki were--for all intents and purposes--done deals the moment the atom bomb was conceived, years before the actual weapons were deployed. The wave of arbitraged mergers and acquisitions that punctuated the mid-to-late 1980s had less to do with the imperatives of business per se, and everything to do with the imperatives of a recently matured business technology: the electronic spreadsheet. Investment bankers suddenly had the power to massage one set of corporate numbers twelve different ways for twelve different prospective buyers in twelve hours. So they did. The same imperative was at work in the mid-1990s with the introduction of the Internet. Few stopped to ponder the long-term effects of the World Wide Web on our lives, or how it would change the ways we communicate. It granted us all the irresistible power to render our individual Great American Dreams online, however ill-conceived as businesses. So we did. Now, I've spent a good part of my adulthood trying to explain to my father--an old-school baseball journalist--what the hell I've done all these years as a digital marketer. Most of my explanations fall on deaf ears and make his eyes glaze over. And rightfully so. But he understood immediately the other night on the phone when I explained to him the proposed topic of today's column. "I want to write about how technology changes what we say by changing how we say it," I told him. I could hear the light bulb go on in his head for the first time. Powerpoint of course is journalistic in form. It accommodates little more than the headline and the expository who, what, when, where, and why. My dad, bless his heart, understands these things. He cites the box score as the great American contribution to journalism technology. The question is not whether a Powerpoint presentation--the corporate equivalent to the baseball box score--is an efficient way to deliver salient points. The question centers on what our default reliance on it does to our ability to communicate little but critical things like nuance and personality. Or truth. Great baseball writers, like the game itself, have appropriately little regard for time and dimension, but appropriate reverence for their byproducts: nuance and personality--the only functional way to impose color on a black-and-white medium. Nuance and personality in turn provide the medium for whatever truth isn't revealed, for whatever truth emerges instead. What do we lose in the translation from life to Powerpoint? Imagine picking up the sports page and seeing nothing but box scores, nothing but truth revealed. No nuance, no personality, no wit, no humor, no charm. This is what has happened across much of corporate America--only without the statistical accountability. We look and we see little more than box scores, displayed overhead with dissolves and wipes and occasional audio cues to wake us up. Everything is driven by the same basic journalistic construct adopted and compounded by the proliferation of MS Powerpoint. But why would we sacrifice nuance and personality for facts when the facts themselves--unlike the box score stats--are suspect to abandonment or modification the very moment market winds shift direction? In the end, all we are left with is the box score without the stats, without the accountability. We call it ROI. We no longer have the option or the patience to write our lives in long form. We change our mission statements the way we change socks (most of us, anyway)--because we can, because we have the power to do so, and the power to do so confers all the authority we think we need. But each new technology we bring into our lives and businesses leaves a little less room, a little less time for nuance and personality, a little less time for emerging truth. Better get ready: St. Peter will be waiting for us with an overhead projector. Please note: A new Einstein's Corner discussion group has been opened on Yahoo at http://health.groups.yahoo.com/group/einsteinscorner/. The Einstein's Corner discussion group is dedicated to exploring the adverse effects of our addictions to technology and media on the quality of our lives, both at work and at home. Please feel free to drop by and join the discussion. Many thanks once again, my friends. Best to you and yours....