After months of struggling to gain traction, the eBay-powered system for buying and selling TV time has some life. Oxygen, the one cable network to agree to use the trading system, has begun a trial effort with at least one advertiser. No deals have been cut, but the female-targeted network may be on the brink, according to its new executive vice president of ad sales Mary Jeanne Cavanagh. (On Monday, on the eve of the upfront, Oxygen announced that Cavanagh had been elevated to the position from senior vice president, national ad sales after five years with the network, now in some 73 million homes.) Oxygen's participation in the eBay Media Marketplace--first reported by The Wall Street Journal--is intriguing on several levels. First, it's doing so after the industry trade group it belongs to--the Cabletelevision Advertising Bureau--denounced the system and advised its membership to refrain from any involvement. Some networks felt it would reduce their inventory to a commodity. Second, as the only network participating, it could reap a windfall. Many large advertisers are eager to engage in the online buying, but so far there is just one network to buy from. Furthermore, some of the advertisers backing the system, such as Home Depot and H-P, appeared to be angered by the CAB's sudden move to repudiate the exchange--and have indicated that they reward networks that sign up. Cavanagh said she's heard talk that other networks are considering it, although none have come on board. "If some join, great," she said. "If not, it's more money for us." The Journal reported that participating advertisers have assembled a pool of up to $8 million for the trial, although that doesn't mean all will be spent. The CAB has been a good partner and "wonderful organization," she emphasized, adding that the decision to work with advertisers on a test of the eBay exchange was a unilateral decision on the network's part. It was done largely because Oxygen views itself as being on the cutting edge of technology. Also, it's a potential new business avenue. Cavanagh said the network is mostly sold out, so it's not an attempt to unload "remnant inventory." "We're a very technology-focused company ... it's new technology, and the way of doing things is changing," Cavanagh said. Calls to CAB were not immediately returned. Cavanagh assumes her new role at an important time for Oxygen, which has made strides since its initial stumbles after its 2000 launch. Distribution of some 73 million gives it a solid footprint, and it has been increasingly aggressive at launching original programming on-air that hones in on the 18-to-34 and 18-to-49 female target. The net is also building out its Web and mobile extensions with a social-networking umbrella. As for Cavanagh's arena, Oxygen saw ad revenues rocket some 48% in 2006 to $102.1 million--up from $69.1 million in 2005, according to TNS Media Intelligence. The former MTV Networks sales veteran said part of the reason is the result of Oxygen attracting new advertisers in categories such as banking and automotive, as well as some new business in the movie area. The network has gone "beyond chick flicks" into horror and other genres. As for one of the more hot-button issues in the coming upfront--will Oxygen make deals based on commercial ratings? Cavanagh said the network has made a decision, but she declined to reveal it. She did say that Oxygen researchers have placed a "use with caution" tag on the new ratings. But at the same time, the network is focused on meeting client needs. The CAB and cable networks have raised issues about the accuracy of the commercial ratings data, and expressed concern about using them for deal-making this summer. Yet, NBC Universal's cable networks employed them in a deal with GroupM that was announced last week.
Meredith is riding the online health information boom with the acquisition of Healia.com, a consumer health search engine. The buy is part of the company's aggressive online build-out, coming on the heels of earlier purchases of three online marketing service firms: O'Grady Meyers, Genex and New Media Strategies. Meredith group President Jack Griffin remarked that "the demand for health information is booming and of particular interest to women." The acquisition of a health "vertical search" reference site complements the personal health coverage in Meredith's biggest brands, he says. "Providing access to trusted health information is a core component of our leading brands--including Better Homes and Gardens, Parents, American Baby, Ladies' Home Journal, More and Fitness." Meredith plans to integrate Healia's search technology into its various magazine Web sites in the near future. The online expansion also fits nicely with an increase in healthcare-related ad dollars in consumer magazines. Pharmaceutical direct-to-consumer advertising in particular has become a mainstay for consumer magazines; Meredith is one of the main beneficiaries. In the face of increasing criticism from DTC opponents of alleged distortions or simplifications in pharmaceutical ads, magazines offer sufficient inventory space for disclaimers, warnings and explanations--in some cases up to four page-faces in length. During 2006, overall pharmaceutical ad spending surged 14%, and according to TNS MI's most recent data, it jumped another 6.7% during the first quarter of this year. Magazines were the second-fastest-growing ad medium behind the Internet during the first quarter of this year, according to estimates by TNS MI, Nielsen Monitor-Plus and the Magazine Publishers of America. Jon Swallen, senior vice president-research at TNS MI, suggested that increased pharma spending is a key reason. During the first quarter of 2007, total DTC spending rose 6.7% to $1.2 billion among the media tracked by TNS MI, but spending in consumer magazines soared 25.5% to $376.2 million. However, the same survey found that DTC spending on the Internet rose only 4% during the first quarter--despite the fact that an estimated 8 million Americans visit health-related sites each day, according to Meredith. Vertical search may be one of the most effective ways to deliver relevant ads to consumers. Healia, for example, allows consumers to personalize searches with filters that narrow results by gender, ace, racial/ethnic group and a variety of "interest" areas, including prevention, causes and risks, symptoms, diagnostic tests and treatment.
Kellogg's move to stricter self-regulation in children's advertising could signal a death knell for the most child-targeted brands, according to Michael Jacobson, head of the Center for Science in the Public Interest. CSPI had threatened Kellogg with a lawsuit in Massachusetts, thereby pushing the cereal company toward self-regulation. "It's conceivable that will be the end of those products, as they're pretty dependent on advertising to 'educate' each new generation of kids," Jacobson says, suggesting the extinction of certain unhealthy food brands isn't a loss. "For other products, they may reformulate." Kellogg is only the first victory in CSPI's ongoing war. The organization is prepared to bring lawsuits against other major food advertisers, including Kellogg's 10 colleagues in the Children's Food and Beverage Advertising Initiative, if they don't present satisfactory self-regulatory policies at the upcoming FTC meeting July 18. "There certainly is that possibility," Jacobson warns. He's taking a wait-and-see approach to determine how companies handle specific nutrient criteria, as well as their usage of cartoon characters, product placement, toys "and other things of that nature." Broadly speaking, Jacobson was optimistic. "We hope other companies are going to be adopting guidelines that are at least as healthy as Kellogg." The head of the powerful Washington D.C.-based advocacy and lobbying group praised the Kellogg's move, noting: "It's very significant, as it's the first time a company has agreed to limits concerning the nutritional qualities of the foods it advertises to kids, and the manner in which it advertises to kids." According to the terms of the Kellogg's agreement, its under-12 advertising will be limited to foods that have no more than 200 calories per serving, as well as no trans fat and no more than 2 grams of saturated fat. Affected brands include Kellogg mainstays, like Rice Krispies (too much sodium) Froot Loops (too much sugar) and Pop Tarts (sugar again). In addition to limiting TV advertising, Kellogg will revamp its Web presence dramatically, including "limiting depictions of foods that don't meet our nutrient criteria in interactive activities, like games, downloads and wallpaper," the company said in an official statement. It added that "wherever possible, implementation of Kellogg commitments will begin immediately." The new, stricter self-regulation goes beyond the voluntary standards adopted by the members of the Children's Food and Beverage Advertising Initiative at the behest of Children's Advertising Review Unit in November 2006. In an earlier interview Jacobson dismissed the voluntary standards as "pathetically weak," adding that "self-regulation simply doesn't work to protect kids from junk food marketing." However, Jeff Chester, founder and executive director of the Center for Digital Democracy, was skeptical about some of the online measures proposed by Kellogg, including "automatic screen-time limits" intended to limit interaction with online messaging. He says it's unacceptable for them "to say that the marketing message is safe for kids just because it clocks off after 15 minutes or something like that. In the age of mobisodes, 30 seconds is plenty of time to get your message across." Chester also noted the need to protect teens as well as pre-teens, saying CDD will push the FTC to adopt rules to that effect. Calling the demographic lines "fuzzy," he adds that what's marketed to 16-year-olds, "companies know also attract 8-, 9- and 10-year-olds." CSPI threatened to bring a lawsuit against Kellogg in January 2006 under a Massachusetts law against junk-food advertising. The two sides have spent the last 15 months in negotiations in an effort to avoid this outcome. Kellogg's recent announcement is the effective settlement of the dispute.
Newspapers are in for another weak quarter, if the Gannett and Lee revenue reports for May are reliable indicators. In the continuing downdraft, Gannett saw advertising revenue at its newspapers fall 8%, compared to the same month last year. Lee's declined 2.3%. Last week's New York Times Company's results mirrored their rivals' downward trajectory. All three companies attributed the drop to continuing weakness in classified, national and retail ad categories. In print classifieds, Gannett was down 12.9%, Lee fell 5.8% and NYTCO was down 12.9%. National advertising revenue fell 5.4% at Gannett--including a 7.8% slump at USA Today--7.4% at Lee and 5.6% at NYTCO. Finally, retail revenue fell 5.7% at Gannett, 4% at Lee and 14.9% at NYTCO. Gannett also reported a 6.4% slump in local advertising, a major category for its chain of local newspapers. One bright spot: Online advertising at all three companies is up, but Internet revenues are still not enough to offset print losses. In May, Lee's revenues rose 60.2%, and NYTCO was up 21.4%. Separate online revenue figures were not available for Gannett, but the company claimed 22.1 million unique visitors in May, representing a 14% share of the total online audience. However, the discouraging May print results follow weak April numbers from all three companies, suggesting that the second quarter will see more year-over-year declines when the final tallies come in. Gannett's total April ad revenues were down 4.9% from the same period last year, Lee reported a 3.4% drop and NYTCO's total ad revenues fell 3.6%. Indeed, Lee also released its quarterly results, which came in below Wall Street expectations, in part because of continuing weakness in June revenues.
In a move that gives advertisers an opportunity for greater viewer engagement, MTV Networks has inked a deal that allows them to alter creative so it carries greater relevance to a particular program. The concept, known as dynamic ad insertion, is something programmers and advertisers have been clamoring for. The deal is with ad technology company Visible World, which will facilitate the logistics and provide the backbone. The dynamic insertion will be available across a slew of MTVN networks, from VH1 to CMT to Nickelodeon. The "on-the-fly" swaps will also be deployed on MTVN's mass of Web properties--a medium that has some history with this type of switching. "Our goal is to fundamentally change the way our viewers experience advertising by giving them an innovative experience. Our partnership with Visible World gives us the leading edge," said Judy McGrath, Chairman-CEO of MTV Networks. The program will allow advertisers to offer ads with tweaks to reflect new information, such as just-published praise or box-office results for a movie. It could go as deep as calling for viewers to text votes about a preference for a story line, and the advertiser putting it on-air.
The upfront advertising market may be heating up, but the summer broadcast season continues to cool. On Sunday night, only one network--NBC--managed to eke out an average rating of 2 or higher in the key viewer group, adults 18-49. The net posted a preliminary 2.2 rating/7 share among 18-49 viewers. But much of that had nothing to do with NBC's prime-time Sunday night schedule. Rather, it benefited from a U.S. Open golf tournament overrun that started in the afternoon. The golf event gave NBC a 2.6 rating during the 7 p.m. hour--the highest-rated programming of the evening. CBS was second at 1.7/6, with its best coming from a 2.1 rating repeat of "Without a Trace." Fox saw a 1.4/5, with a "Family Guy" repeat at 9 p.m. getting a 1.6 rating. That was the good news. The remaining three broadcast networks weren't even above a 1 rating for the night. Particularly glaring was ABC's shrinkage. Now that the NBA finals ended quickly, ABC was left with a flagging reality show and a couple of drama reruns. ABC's reality series "Fast Cars and Superstars: The Young Guns Celebrity Race" could only muster a 0.7, the lowest rating for an original series on the big four networks this summer. ABC's "Desperate Housewives" and "Brothers & Sisters" reruns were also under the 1 rating mark. If that wasn't enough, ABC finished behind Univision between 9 p.m. and 11 p.m. among 18-49 viewers. Overall, ABC was fourth at 0.9/3, Univision fifth at 0.9/2, and CW sixth at 0.5/2.