New mixed signals emerged for the U.S. and world advertising economies as a number of influential industry sources downgraded their outlooks. Among the most troubling: Aegis Group, the parent of Carat, reduced its global ad estimates for 2006, due largely to a lower-than-expected stimulus from the World Cup in Europe. Domestically, Wall Street firm Merrill Lynch lowered its estimates for the 2006-07 network upfront ad marketplace (see related story in today's MediaDailyNews), while the New York Times Co. issued new guidance to shareholders warning of weaker than projected second quarter earnings due to a continuingly challenging ad marketplace. One bright spot continues to be digital media, which was cited by both Aegis Group and the New York Times Co. as remaining healthy. "Internet advertising continues its impressive growth and is boosting overall spend with a 25 percent year-on-year increase worldwide in 2006," predicts Aegis' revised outlook, which goes on to project that Internet ad spending would overtake ad spending in newspapers by 2008. Aegis noted that the Internet ad market has already surpassed newspapers in the U.K., and is poised to "outstrip" magazines this year. "For early adopters like Sweden and South Korea, internet will become the third biggest advertising medium this year, after TV and newspapers," the media agency holding company predicted. Another bright spot in Aegis' outlook is the U.S. marketplace. Despite downward revisions by certain media, Aegis maintained it 2006 U.S. ad growth rate at 5.0 percent, citing healthy TV ad expenditures, especially for Spanish-language TV and local political TV ad campaigns. "We revised our European forecast down a little," Aegis said, "This is primarily because of the U.K. where so far the boost provided by the World Cup is not as strong as anticipated, and Italy where the economy remains fragile." Aegis reduced its European ad growth estimate to 4.5 percent for 2006 from 4.8 percent previously. Asia Pacific estimates were also downgraded to a growth rate of 6.4 percent from an earlier forecast of +7.2 percent, despite a slight upward revision for China. As a result, Aegis reduced its 2006 global out growth estimate to +5.7 percent from its earlier estimate of +5.8 percent.
A well-regarded, if not definitive source on the network upfront advertising marketplace Monday revised its estimates for the broadcast networks' 2006-07 upfront sales downward. The correction by the influential equities research team at Wall Street's Merrill Lynch is the latest evidence that demand appears to be ebbing for network upfront ad inventory. In a report issued Monday by lead broadcast analyst Jessica Reif Cohen, the securities firm estimates upfront ad spending on the six broadcast networks will decline 1 percent from the 2005-06 upfront, the first decrease in upfront ad volume in years. To date, Merrill Lynch had maintained that the network upfront marketplace would be flat at worst. Cohen estimated the six broadcast networks would take in $8.98 billion, down from last year's $9.03 billion. Merrill had previously projected a flat upfront--with increases at Fox, ABC, and CBS offsetting a revenue loss caused by the combination of UPN and The WB and a drop at ratings-challenged NBC. But Merrill said it lowered its projections with advertisers leveraging an "advantage" to command more favorable pricing and an overall reduction in available dollars caused either by lower budgets or advertisers holding back money to use later. Merrill also cut its forecast for the Big 4 networks by 1.5 percent from previous projections. That comes despite Merrill now projecting that struggling NBC will be able to use lower pricing and its new "Sunday Night Football" package to bring in the same volume as a year ago--$1.84 billion. Merrill had previously predicted that NBC would lose $600 million after suffering a huge decline last year. Instead, the projected Big 4 revenue drop is a result of Merrill lowering its forecasts at Fox, ABC, and CBS: Merrill cut its forecast at Fox by $80 million, and at ABC and CBS by $30 million each. Despite those cuts, Merrill projects 6 percent revenue gains at Fox and ABC to $1.7 billion and $2.2 billion, respectively. CBS is now projected to bring in the same as last year ($2.6 billion), which would make it the market leader in terms of overall intake for the second year in a row. On the CPM front, Merrill wrote that Fox's deals would carry CPM gains of 2-3 percent, and ABC is "holding out" for 4 percent jumps. CBS is in the flat to negative 1 percent range and NBC is down 4-5 percent, Merrill said. Merrill said it is reducing its volume projections for Fox, since the network "is guaranteeing lower ratings than our original projections implied." The altered prediction comes despite the CPM jumps at Fox. (Despite speculation to the contrary, Fox maintains that all its deals are being done at a CPM increase.) With the broadcast market dragging, Merrill also lowered its forecast for the cable upfront from a 5 percent volume gain to a 3 percent increase ($7.31 billion). Merrill also said that while the while the upfront was expected to be slowed by the inclusion of digital and multi-platform elements in deals, "digital media has played a less significant" role than predicted. Instead, haggling over price has been the principal reason for the slowdown, it wrote.
Outdoor ad spending posted another month of strong year-over-year growth in April, with total revenue 12.7 percent higher than 2005, according to estimates released Monday by the Outdoor Advertising Association of America (OAAA). The OAAA only recently began releasing monthly data, compiled by Miller, Kaplan, Arase & Co., to tout industry growth. As in a previous report for March posting 11.4 percent growth, some of the upswing is cyclical, according to Freitas--who earlier said that "summer tends to be the real boom period." Even so, outdoor is posting remarkable long-term gains too: "Every month it's gone up and up and up, and I think you'll tend to see that trend continue... the rate of growth is accelerating faster than we predicted." Forecasting again, Freitas said: "I wouldn't be surprised if by third quarter we're seeing a 10 percent cumulative growth for the year... second quarter we're hoping for around 11 percent total growth over 2005." In part that's because of increasing interest from national advertisers, Freitas said, who are now willing to consider outdoor "not as a support medium but as a primary vehicle." The surge in outdoor is related to structural issues that dominate discussion in the ad world today, including ad clutter, increasing consumer mobility, and the desirability of the workday day-part, all of which outdoor claims to address. "It's a way of reaching people who are very active, very mobile, and hard to reach with the traditional media," Freitas asserted. "Advertisers are realizing out-of-home does intersect with people through the whole day." Among new national advertisers, "an interesting case study currently on the street is 1-800-Flowers," Freitas said. "They were really doing nothing with out-of-home or other traditional media until three years ago--all their spending was on the Internet. But since then they've moved 70 percent from the Internet pretty much exclusively to the outdoor medium." The growing ability of consumers to respond to effective messaging from public spaces using mobile devices may be another reason driving Outdoor's success: "I think there's more and more interest in the medium to engage people during key activities... With mobile devices you can close the loop much faster."
Cable network AMC has broken the ice with one of the country's biggest advertisers. In a deal that includes the presenting sponsorship of upcoming mini-series "Broken Trail," Ford will advertise on AMC for the first time. In addition to airing its new "bold moves" campaign during "Broken Trail," Ford's sponsorship includes integration into multi-platform promotions leading up to the two-night, four-hour production. The Ford brand will be attached to 30- and 60-second on-air spots, other tune-in promos, print ads, and a presence on AMCtv.com. In this age of DVRs and ad-skipping, cable networks are increasingly crafting presenting sponsor opportunities for advertisers that offer exposure in pre-show promotions, allowing a marketer to link with programming beyond simply hitching their wagon to in-show spots. TNT has been particularly aggressive on that front recently, signing marketers to deals that include placement in extensive pre-show promotions for the premieres of new drama "Saved" and a Stephen King-themed limited series. (Unlike "Broken Trail," the TNT sponsorships include presenting the two premieres without commercials.) "Broken Trail," which will air June 25 and 26, is a Western-style mini-series starring Robert Duvall. AMC, which carries the tagline "TV for Movie People" and has increasingly tried to add original programming to its line-up, is billing it as its "first-ever original movie." Ford's deal with the network includes advertising in other programs after the mini-series completes its run.
On multiple occasions, Internet auction giant eBay has considered jumping on the branded entertainment train. But so far, it hasn't left the station. Several years ago, the company was tied to a syndicated show from Sony Pictures Television that never materialized. Then this spring, word came that it was working on a show for ABC--to be called "Buy It Now"--where families could put their "hidden treasures" up for bid and finance their dreams. But eBay pulled the plug on that one, too. The advantage to either of those ventures, of course, would be a chance for the Web site to present itself as a force of good. Otherwise, its portrayal in the media can be dicey--with high-profile stories about deals gone bad. The latest came earlier this month when psychic Uri Geller threatened to sue eBay after his winning bid for one of Elvis Presley's homes was circumvented by the sellers, who allegedly hawked it to someone else. Interestingly, an eBay representative told the BBC that Geller's bid didn't constitute a legally binding contract--a somewhat surprising admission by eBay, since it sounds a different tune otherwise. To be sure, eBay case law may still be unfolding. The gray area took center stage in the June 6 episode of the Bravo reality show "Kathy Griffin: My Life on the D-List." The show--now in its second season - promises an inside peek at what life is like for a minor celeb, which is demonstrated through Griffin's adventures. In the episode, Griffin--a stand-up comedian who won fame on the sitcom "Suddenly Susan"--decides to give a fan the chance to spend a weekend at her home with her and husband. And she decides to auction off the prize on eBay, the implication being that Kidman, Zellweger, or another top-tier celeb would never open their homes to the mass populace and all its stalkers and other undesirables. (The eBay presence on the show was evaluated and ranked via research firm iTVX as one of the five most effective product placements last week.) The bidding begins, and Griffin is surprised and flattered that people appear to be offering up significant amounts. The dollar figures escalate so strikingly that at one point Griffin asks: "Is this real, though?" Nonetheless, she presses on, making appearances on Jimmy Kimmel's and Tyra Banks' shows to promote the auction (which is for charity). Banks, who undoubtedly would never offer up a couple of nights at her place at any price, is bemused. "You're like auctioning like yourself off on eBay?" she asks. As the hour-long episode rolls along and chronicles the Griffin auction, it provides significant exposure for eBay, some of it positive. For one, the site is facilitating a charity auction, providing the kind of PR lift eBay hoped to get from the proposed ABC show. It also shows just why eBay can be so enticing, with Griffin checking in several times a day to find out how hot the bidding is--a fever so many eBay sellers have undoubtedly experienced, especially the ones that can't believe someone would pay for the unused stuff that forms a ring inside their garage. "Griffin" appears to be selling quite well as the bidding climbs over $10,000 and past $20,000. All the while, the show provides the uninitiated with some insight into the eBay wheeling and dealing process and offers multiple screen shots of the Web site. Finally, the bidding ends at $28,000, and Griffin is pleasantly surprised. But her premonition that people may just be throwing out bids without any intention of paying comes true. The winning bidder reneges, as do dozens of others who placed bids. Griffin is confused. Even though eBay is exceedingly popular, Griffin, like many Americans, is unfamiliar with its ins and outs. You can just bid on something and then decide not to pay for it, she wonders. And this is where eBay--which was not involved in the production of the show and didn't approve or pay for the integration--looks bad. "I guess you can just go bid on eBay and bid whatever you want and then just not have the cash," Griffin says. "I think they should all go to jail." To be sure, Griffin is partly being tongue-in-cheek. But she highlights an issue that eBay undoubtedly wants to avoid: The buyer- and seller-beware aspect of what it does. Perhaps eBay should help produce a show that clears up any uncertainty about the risks involved?
Show ProductQ-Ratio The Apprentice Pontiac 11.514 2006 MTV Movie Awards Pontiac 3.426 Kathy Griffin: My Life on the D-List ebay 3.385 Pepper Dennis Bulgari 3.365 Deal or No Deal DHL 1.941 Click here to view these placements. Data and analysis provided by iTVX.