Jason Heller, the founder and managing director of Horizon Media's interactive unit, is leaving the agency, to join The Laredo Group, a consulting company specializing in online advertising buying and selling, search marketing and optimization. Heller, who became Horizon's chief digital officer in 2005 when he and his partners sold Mass Transit Interactive to Horizon Media, leaves Horizon amid a senior management reorganization that is transforming the world's largest independent media services agency. Carl Kotheimer, Horizon's executive vice president-marketing services, general manager and long Horizon President-CEO Bill Koenigsberg's No. 2, has also stepped down from a day-to-day role and is known by insiders to be transitioning out of the agency. The changes come as Horizon has repopulated its senior management team with a team of executives steeped in brand strategy, communications planning and channel planning experience that are putting a new imprint on Horizon, once known primarily for its spot buying capabilities. That transformation has been orchestrated by Horizon founder Bill Koenigsberg who is seeking to make the agency competitive with the best and brightest of Madison Avenue's media and brand strategy teams. It's been quite a transformation for Horizon, whose roots began as the barter media division of broadcast and publishing company Media General Inc., which Koenigsberg bought out in 1989 and re-launched as Horizon Media with the goal of building a big independent media buyer amid a consolidation and unbundling of media buying services at Madison Avenue's traditional agencies. Koenigsberg has fulfilled that vision. Horizon now claims billings of more than $1.4 billion, is being invited to pitch some of the biggest blue chip media accounts, has hired 75 new employees so far this year, and in June leased an additional 25,000 square feet at its headquarters on Third Avenue in New York. Heller says his decision to leave two years after forming Horizon Interactive was due partly to the management changes at Horizon, but also because he wanted to try something different and wanted to spend more time on his underwater photography business. Heller, an avid scuba diver, is regarded as one of the photo industry's leading underwater cameraman, and is also known for his environmental initiatives to preserve underwater sea habitats. He will also continue to be a regular contributor to MediaPost's publications and events. At the Laredo Group, Heller will serve as executive vice president, a new post, and will head the firm's newly opened New York office.
Meredith Corporation, the publisher of well-known women's lifestyle titles, including Better Homes and Gardens and Ladies' Home Journal, reported a 2% increase in ad revenue and a 8% increase in earnings per share during the second quarter of 2007, compared to the same period last year. In the first half of 2007, publishing group revenues rose 6%, compared to the same period of 2006. Meredith's fiscal year ended with publishing revenues topping $1.3 billion--up from $1.2 billion, an 8.3% increase. For the full year, publishing ad revenues rose from $619 million to $639 million, a 3.2% increase. Coming on the same day as negative earnings reports from The New York Times Company and Tribune Company, Meredith's quarterly results underscore the divergent fates of consumer magazines and newspapers, their print cousins. Meredith pointed to its consumer magazine business as a main driver of growth, offsetting weakness in book publishing. Strong performers included More, Family Circle and Ladies' Home Journal, with this flagship publication enjoying overall ad revenue growth of 10% in the first half of 2007, compared to the same period last year. While specific figures for Internet revenue were not available for the second quarter, for the full year, Meredith's online revenue grew a remarkable 50%, driven in part by a 15% increase in page views. Another key growth area was Meredith's integrated-marketing operations, which have been bolstered by a number of acquisitions over the last year. Among the new additions are Genex, an interactive-marketing services firm, New Media Strategies, an interactive word-of-mouth marketing company, and Healia, a consumer-health search engine. These acquisitions complement Meredith's already substantial database marketing operations. Meredith's customer database boasts 85 million individuals, classified into 33 marketing niches and further subdivided by demographic and "life stage" data. Although still a small piece of Meredith's overall financial picture, its Internet station-related revenues more than doubled in fiscal 2007. On the broadcast front, Meredith Corp. is starting to feel the pinch against previous financial comparisons that included record sales of political advertising in 2007. In its fiscal fourth quarter 2007, ending June 30, Meredith's broadcasting operating profit was $28 million on revenues of $84 million--all declines versus the previous period, due to nearly $3 million less in political advertising revenues during the period. This was somewhat expected by analysts, considering last year's record political revenues. For the entire fiscal 2007 year, the broadcasting group witnessed its operating profit grow 20% to $107 million, with an 11% rise in revenues. Meredith pulled in a record $33 million in political advertising revenue in fiscal 2007. The company noted improvement on many of its station's early-morning new shows--particularly with adult 25-54 viewers. In particular, ratings and share grew significantly at seven stations--Atlanta, Phoenix, Portland, Hartford, Greenville, Las Vegas and Nashville. Las Vegas' station's ratings are up nearly 70% in the morning. For the company as a whole, its fiscal fourth-quarter net income rose $51.5 million from $48.6 million. For the entire year, Meredith witness revenues 3% higher to $1.6 billion, including 6% growth in advertising revenues.
BEVERLY HILLS, CALIF. -- ABC wanted like to kick-start the next season of "Lost" with some nice Internet marketing buzz--but not with TV critics. Stephen McPherson, president of ABC Entertainment, wanted to withhold some "Lost" news from the Television Critics Association summer meeting here. The aim was to release the news on Thursday during Comic-Con, the big comic book show that is taking place in San Diego. "Some announcements are made here; sometimes announcements are made [other places]," explained McPherson. The critics were not amused. "I don't think my editor is going to be very happy when she reads in my blog later today that Steve McPherson promised that news on one of the biggest shows on the network would be going to a fan convention the next day," said Aaron Barnhart, TV critic of The Kansas City Star. After more critical comments from TV critics, and a quick mid-press conference call to "Lost" producers, McPherson relented. He gave critics the news--that Harold Perrineau, who played Michael Dawson, was coming back to the cast of "Lost." Why did ABC want to manage the news this way? "There is a lot of buzz that comes out of Comic-Con--especially with its core audience," Mike Benson, executive vice president of marketing at ABC Entertainment, told MediaDailyNews. "It's a fan base that immediately hears something and gets on the Internet, and it spreads like wildfire. We saw [Comic-Con] with a different purpose than with TCA." This seems to play into what ABC and other networks believe about TV and the Internet--especially in how CBS responded when bringing back drama "Jericho." Simply: the Internet buzz creates certain levels of marketing awareness that networks can't get anywhere else. For the ABC show "Friday Night Bingo," McPherson said the network witnessed some of these Internet effects. Despite lower ratings for the reality show, millions of viewers could be found downloading bingo cards from the network site. So the show was renewed for another cycle. Regarding ABC's slate of low-rated summer-reality shows, McPherson isn't sure why its shows, such as "Shaq's Big Challenge," aren't working. "We have been disappointed in the summer," he said. "Maybe the subject matter was a bit too serious." For next summer, McPherson says he might take a lesson from the cable networks--and launch some scripted dramas and comedies. "There is real opportunity there. We just have to see about the cost model." McPherson also said the network is working on a "Dancing with the Stars" spinoff called "Dance Acts," in which group judges with specific teams of dancers compete. The new show would run when the original "Dancing" is not on air.
Chairman-CEO Maurice Levy struck a defensive note upon announcing Publicis' first half results this morning, asserting that the Paris-based agency holding company's tepid organic growth rate does not properly reflect its dynamic digital transformation; strong, but as yet unaccounted for new business gains; and tough comparisons with strong first half 2006 results. "The figures for the first half of 2007 are a study in contrasts: growth that hardly corresponds to Publicis Groupe's potential alongside excellent performance with respect to margins and cash-flow," Levy stated, adding, "As anticipated by the Groupe, performance in the second quarter was hindered by slower economic growth in the United States and the fear of a significant depreciation of the dollar. The result was modest growth to which we are not accustomed and that does not reflect the Groupe's capabilities. Publicis' total first half revenues rose 6% during the first half, but organic growth after factoring out things like its acquisition of Digitas, was up only 1.6%. Because organic growth is a key metric used by Wall Street to measure the underlying vitality of ad agency holding companies, Levy went out of his way to dispel its significant for Publicis' first half results, noting that "a combination of factors interfered with" Publicis' results. He said higher than normal growth during the first half of 2006 created a tough base for comparing first half 2007 results, though he did indicate there were some genuine problems in Publicis' healthcare and events divisions due to troubles among pharmaceutical account that led to the "cancellation of substantial campaigns." On the bright side, Levy said none of the problems were of a "structural nature" and that following its acquisition of Digitas and other digital assets, Publicis is well positioned for strong growth in the near future. Additionally he noted that Publicis had new business wins of $3.5 billion during the half, which will result in revenue gains later. Levy reaffirmed Publicis' focus on the digital sector, including the integration of Digitas and the launch of new digital media platforms including Blogbang and Honeyshed, a branded entertainment venture with Droga5 that has been described as "MTV meets QVC" on the Internet.
Hugh Panero, the controversial CEO of XM Satellite Radio, will leave the company in August. The news, delivered in anticipation of its second-quarter earnings announcement on Thursday, moves up Panero's departure date by at least a few months. The executive's exit may be a step toward drawing up a clean management slate for XM, as it is scrutinized by regulators prior to a proposed merger with Sirius Satellite Radio. Nate Davis, now XM's president and COO, will serve as its interim CEO until Mel Karmazin, the CEO of Sirius, takes over the helm of both companies. Under the terms of the proposed merger, XM chairman Gary Parsons will become the chairman of the combined entity. However, the merger is far from a sure thing, and XM did not present an alternative plan for appointing new management if regulators from the FCC and FTC don't allow the merger to proceed. While widely hailed as a pioneer of satellite radio, Panero also ran afoul of XM investors and the Securities and Exchange Commission for certain allegedly illegal stock transactions in 2005. A group of XM investors filed suit against Panero and four other XM executives in May 2006 over the sale of $79 million of stock the year before. Panero and the other executives are accused of issuing false forecasts of overall subscriptions and the average cost of new subscriber acquisition to inflate stock prices in the six-month period before they sold their stock.
Two of the nation's largest newspaper publishers reported substantial drops in ad revenue for the second quarter on Wednesday, reflecting the broader downward trend in the industry. Beyond the immediate implications, both The New York Times Company and Tribune have other reasons to be concerned about the weak results. NYTCO has come under growing shareholder pressure to change its ownership structure, while Tribune is heading into a major buyout by real estate billionaire Sam Zell. NYTCO's newspaper ad revenues were down 5.7%, as earnings fell from 37 cents a share to 34--an 8% decline, compared to the second quarter of 2006. Once again, the biggest drops came in classified advertising--which tumbled 13.4%, mostly due to continuing declines in real estate and automobile classifieds. Retail advertising fell 9.9%. The company's New England News Group, which includes The Boston Globe, showed no improvement over previous quarters, posting a 7.6% decline in ad revenue. Tribune Co. experienced even bigger declines, with overall ad revenue dropping 11% and classified revenue in particular down 18%--including double-digit declines in real estate, auto and job recruitment. Retail revenue was down 5%, and national ad revenues fell 11%. These, in turn, drove a 34% decline in earnings per share--from 28 cents to 18 cents. As is customary, both companies pointed to strong growth in their interactive revenues as a relative bright spot--with NYTCO enjoying 23.4% growth in online revenues in the second quarter, to almost $81 million, and Tribune up 17%, to $66 million. Tribune's strong results are due largely to its online real estate and automobile classifieds. NYTCO's online growth held steady with last year's 25% growth rate in the second quarter, but Tribune's figures constitute a slowdown from last year's robust growth. In the second quarter of 2006, Tribune's interactive revenues grew 27% to $57 million. Thus, revenue growth has slowed in terms of both percentage and absolute dollar amounts, from $15.4 million in 2006 to $9 million in 2007. The weak results from Tribune raised fears that it may miss performance targets that will make or break a proposed buyout offer from Chicago real-estate mogul Sam Zell. The financing for the deal is predicated on Tribune meeting certain minimum operating requirements. However, Tribune CEO Dennis FitzSimons reassured investors that the deal would go through, a forecast that received some support from Deutsche Bank media analyst Paul Ginocchio. Meantime, NYTCO faces shareholder pressure to revise its ownership structure to give shareholders equal voting rights with the Ochs-Sulzberger family.
The Game Show Network has tapped David Goldhill as its new CEO--replacing Rich Cronin, who oversaw the re-branding of the network as GSN and took it to profitability during his tenure. Goldhill, who earlier this decade oversaw the USA and SciFi networks, takes over Aug. 1. GSN, half-owned by Sony and Liberty Media, is in 64 million homes and has looked to bolster both its original programming and interactive gaming efforts in recent years. Currently, Goldhill is a senior advisor to a New York investment firm with media interests; from 2002-04, he served as President-COO of Universal Television Group (now part of NBC Universal) with oversight of its USA and SciFi channels, production studio and syndication operations. Goldhill said that at GSN he will look "to extend and enhance our brand across the various platforms through which our audience watches and plays casual and skill games." The selection of an executive with a financial background--Goldhill is a former investment banker--raises the question whether Sony and Liberty might be looking to sell the network or maneuver so one party acquires the other's 50% interest. A year ago, Liberty sold its half-interest in Court TV to co-owner Time Warner. Liberty has also been looking to become more of an operating company while reducing its focus on investing. But Goldhill said in a statement that "the Sony and Liberty relationships are crucial to GSN's next stage of growth." Goldhill is chairman of the board of a Canadian online gaming operation that is majority-owned by Liberty. He is also on Expedia's board.
NBC Universal's executive shuffle continues, with Jeff Gaspin now taking a bigger role as president and COO of Universal Television Group. With Gaspin's new responsibilities, he will have oversight for Telemundo and the network's 16 owned-and-operated stations, as well as NBC Universal's first-run and off-network syndication business. Gaspin will continue to be in charge of the television group's distribution, including wireless, digital and cable properties--which include USA Network, Sci Fi Channel, Bravo, Chiller, Sleuth and Universal HD. Since February, he has been president of NBC Universal Cable and Digital Content. In fact, Gaspin has a long history with NBC--going back to the late 1980s, working at NBC's stations division as well as at NBC News. Gaspin left NBC in the late '90s and returned in 2001 as executive vice of alternative series, long-form, specials and program strategy for NBC. Gaspin developed "Dateline NBC" and oversaw the expansion of the "Today" franchise to seven days. He was also director of financial planning for NBC News. Gaspin was instrumental in bringing reality hits "The Apprentice," "Biggest Loser" and "Deal or No Deal" to the screen.
AT&T plans to begin rolling out its telcoTV service in the Southeast before the end of the year, and also expects to be adding 10,000 subscribers a week by then. That level would rapidly increase the distribution of the company's competing service to cable and satellite operators, which has hit some bumps in its launch. The company said this week that AT&T U-verse is in 51,000 homes--up considerably from the 13,000 three months ago, but behind fellow telcoTV provider Verizon and way below the leading cable and satellite providers. The adoption rate of the service is also slow, with only about 1% of its 4 million potential customers signing up. Still, AT&T CFO Rick Lindner said the results are "encouraging" and marketing efforts are being increased. So far, the service is in 23 markets, concentrated on the West Coast, Texas and the Midwest; the potential for Southeast expansion comes after the acquisition of BellSouth. By the end of the year, some 8 million homes will be able to subscribe to the service, Lindner said. From a revenue perspective, Lindner said on a conference call that more than 80% of subscribers are signing up for the higher-end packages with more channels and features, such as HD, and 65% are opting for the accompanying broadband service. "Our confidence in the technology and the service quality is being confirmed by customer feedback, and we have a very positive outlook for AT&T U-verse video," he said while discussing second-quarter results.
Seeking to move beyond banners and other traditional real estate, a popular TV info site is offering networks sponsorship opportunities within the scheduling grids it publishes. Zap2it's "Show Sponsorship" option allows marketers to highlight a specific listing for a program and run an accompanying ad next to the schedule. Zap2it, part of the Tribune Company, refers to it as "a high-impact tune-in message." The ad that would accompany a highlighted "grid cell" can include video, as well as more in-depth info on the show. The Web site competes with an array of online TV sites, from TVGuide.com to a seemingly endless line of blogs. "The Show Sponsorship was specifically developed to meet the needs of network advertisers for whom setting their programming apart in a sea of choices and driving sampling is a constant challenge," the company said. Zap2it says it reaches an average of 2.7 million unique visitors a month.