TV broadcasters have announced a number of deals with place-based video networks in recent weeks, highlighting the growing importance of this burgeoning medium. As the traditional TV audience continues to fragment, taking advantage of disruptive technologies like TiVo, video-on-demand and the Internet, place-based video offers a new route to consumers--often in a cleverly selected "captive audience" situation. In the last two weeks, NBC Universal announced two big place-based video deals. The first provides specially branded NBC News content to Channel One, an in-school video network that delivers a 12-minute news broadcast--including two minutes of commercials--to 11,000 high schools nationwide, reaching a total of 7 million teenagers ages 13-18. The second deal brings NBCU content to Premier Retail Networks' "Supermarket Checkout TV," with a footprint covering more than 1,000 stores, including chains like Albertsons and Shop Rite. According to NBCU, the retail video network delivers about 45 million impressions a year. A third deal is in the works to display NBCU content, including ads, on PATH commuter trains running between New York and New Jersey. PATH's 230,000 daily riders include many well-heeled office workers traveling to and from financial and legal offices in New York. Video screens are scheduled for installation--two per car--throughout the PATH fleet by 2011. NBC already has deals to distribute content in taxis in New York City and Chicago in partnership with Clear Channel Taxi Media. Currently, NBC content is running in 475 New York City taxis, which constitute the experimental phase of the taxi video program. However, all New York City taxis are expected to have video systems installed by their next Taxi and Limousine Commission inspection on Oct. 1. If NBC is chosen as the content provider for this fully operational phase, it would have access to riders in almost 13,000 medallion or "yellow" cabs. With taxis making about 470,000 trips a day, and the average trip lasting 13 minutes, this represents a substantial audience opportunity. NBCU's Jay Ireland--until recently the head of NBC's O&O group--said the company wants "to transform the television experience into more of a local experience across a multitude of platforms that everyone can access every day." For its part, CBS has inaugurated a new "Outernet" strategy that distributes CBS-branded content through place-based video networks to promote its broadcast fare. Most recently, CBS announced a partnership with Healium, a video network serving waiting rooms in doctors' offices that is set to include 120,000 medical practices by the end of 2008, delivering 3 million viewers per month. Seeming to echo NBCU's Ireland, George Schweitzer, president of the CBS Marketing Group, lauded Healium and the Outernet strategy generally for "finding unique ways to reach a captive audience when they're out of their homes." The CBS "Outernet" program, launched in 2006, already includes a number of place-based video partners, most enjoying the distinction of "captive" audiences. Thus, CBS has partnered with SignStorey to bring video content to supermarkets around the country--putting it into competition with NBC and PRN. It's also pushing content through shopping malls, auto service centers and hair salons. Corporate partners receiving its original content include American Airlines, Royal Caribbean, Starwood Hotels, Indoor Direct, Mall of America, Simon Malls and Ripple TV. Finally, ABC and corporate sibling ESPN are making content available to Gas Station TV, which is expanding to include 6,000 screens in New York, Los Angeles and Chicago by the end of the year. With an average fill-up time of four and a half minutes--which require fairly close attention to the pump meter, adjacent to the video console--Gas Station TV and rival services like Pump Top TV offer broadcasters and advertisers another attractive audience proposition. Striking the same note as Ireland and Schweitzer, Matt Murphy, a digital video distribution executive, remarked: "Sports fans expect ESPN to deliver the best in sports content and programming to them, wherever and whenever they are."
Advances in digital video technologies are putting ads in front of consumers in places many marketers would not have previously imagined - everywhere from gas station pumps to the elevators of high-rise office buildings. Now they're going to begin popping up where people go to dine and drink. In a new digital advertising network being rolled out nationwide, out-of-home media company Zoom Media & Marketing is installing Internet-connected, digital video screens in fine restaurants and bars in major media markets with a goal of creating the first media network of its kind. The rollout is the first of several targeted, vertical, place-based video networks planned by Zoom and is the latest in what is proving to be the greatest land grab in U.S. advertising history, as developers seek to turn every conceivable venue into an opportunity for an advertising exposure. Zoom's rollout comes as the burgeoning digital out-of-hone market has formed a new trade association - the Out-of-Home Video Advertising Bureau - to set standards for advertising formats and help define audience metrics for what is fast becoming the most explosive medium since the early Internet. "We've been watching the digital space for a few years and we think the time is right for this," says Dennis Roche, president-COO of Zoom, citing improvements in technology and better economics associated with installing deploying high-definition video screens and digital ad insertion technologies in public places. How consumers and advertisers will react to the new medium remains to be seen, but Zoom already is installing the new screens - 36" x 22" LCD panel displays that are networked by a broadband Internet connection to a central advertising server - in restaurants and bars in New York, Los Angeles and Chicago, and if the initial rollout is successful, it plans to be in two dozen establishments this month and about 50 by November. They include places like Jack Demsey's and P. Diddy's Justin's in New York, the Lava Lounge and The Spot in Chicago, and Sonny McClean's and the Westwood Brewing Company in Los Angeles. The boards, which are capable of digitally inserting static ad messages, rich media or full-motion video such as movie trailers or conventional TV commercials, represent a new frontier for advertisers. And it won't just be digital video ads showing up in the new locations. Zoom also specializes in so-called "experiential media" - a catchphrase covering everything from "street teams" to venue-based sampling opportunities - and Roche says restaurant and bar network advertisers are likely to combine a mix of media in the new locations. Zoom initially is charging a flat monthly fee of $500 per month per digital screen, and the buy includes one 30-second ad per five-minute programming loop, repeated throughout the day.
Clear Channel Communications, which owns Clear Channel Radio and Clear Channel Outdoor, enjoyed a 19% increase in earnings during the second quarter of 2007 compared to the same period in 2006, the company announced Friday. Overall, the company recorded revenues of $1.8 billion in the second quarter, up 5% from $1.7 billion in the second quarter of 2006. The positive earnings news comes as the media giant heads into a painfully negotiated private equity buyout. The company's radio business--which constitutes the majority of its revenue--remained essentially flat compared to this period last year, increasing just 1% to $918 million. These results are on par with the radio industry at large, which has seen revenues stagnate over the last several years. According to the Radio Ad Bureau, April saw a 2% increase in total revenues, while May is down 1%. (June figures and quarterly totals are not yet available.) Clear Channel's restructuring plans include the sale of 448 radio stations in smaller markets. According to the company, this sale is nearly complete, with agreements to sell 389 stations in 77 markets for a total $875.1 million. On the outdoor front, that division is booming, posting 12% growth in revenue to $836.7 million. Here, the company outpaced broader industry growth. Overall, outdoor revenue grew 8% in the first quarter--the most recent data available from the Outdoor Advertising Association of America. Clear Channel expects outdoor revenues to grow 10.6% in the third quarter and 7.2% for the year. It's not clear what effect, if any, the positive earnings will have on the pending acquisition of Clear Channel by two private-equity firms, Thomas H Lee Partners and Bain Capital Ventures. The firms have agreed to pay $39.20 a share for the company--a 6% premium over the current price of $36.98--while allowing current stockholders to retain 30% of their shares. This $19.45 billion deal was the result of repeated negotiations after several rebuffs from institutional shareholders, who felt that earlier offers were too low. Some shareholders argued they could undertake actions to produce higher stock value on their own, including the spinoff of the company's profitable outdoor business. The deal, however, was approved by the Clear Channel board of directors in May. It is set for a shareholder vote that has yet to be scheduled.
Publicis Groupe's Leo Burnett and its below-the-line unit Arc have secured a targeted assignment from leading cable operator Comcast. While details are unclear--Burnett and Comcast officials declined to elaborate--the business win was driven by Arc, which focuses on an array of services from direct marketing to promotions to retail channel. Goodby, Silverstein will continue to handle the more traditional ad duties for the Philadelphia-based MSO, the Comcast representative said. The West Coast agency has used an "It's Comcastic" tagline and plugged the company's triple-play offering of TV, phone and Internet service sold in a bundle. The new-business win was announced by Publicis Chairman-CEO Maurice Levy last week on a conference call, where he pegged it as an example of the holding company's efforts to reverse a 2007 first-half that brought slow organic growth. Levy said the win was propelled by Burnett and Arc working in tandem, suggesting a new holistic communications model "more in line with consumer trends and advertiser needs." Levy also said that Burnett "has recovered its dynamism by significantly modifying its structure: The integration of Arc provides an innovative response to advertisers' needs." He cited the Comcast business, along with Buick and GMC at Burnett, as examples of recent new-business successes helped by the new template--which have helped offset losses of the U.S. Army and Cadillac accounts at the Chicago agency last year. The Publicis chief spoke on a conference call to announce results from the first half of 2007 that saw organic growth up only 1.6% within revenues of $2.2 billion.
TV Guide, once the small-screen listings and information monolith with stratospheric circulation, continues to bleed money. Even as ad revenues increased significantly in the recently completed second quarter, its parent company said losses are expected to continue for the next three years. CFO Bedi Singh said on a conference call, however, that Gemstar-TV Guide (which is for sale) does project the red ink will be increasingly less severe over that period. Losses in fiscal 2007 could be as high as $28 million, but that would be lower than projections as high as $35 million. The losses come despite a 16% increase in ad revenues and 25% jump in pages sold in the just-completed quarter, versus the same period a year ago. Separately, on the plus side, the company's re-branded TV Guide Network, which is increasingly focused on original programming, saw revenue nudge up by 3%. The goal, Singh said, is to shift the channel away from its traditional core competency of information about where/when programs are on to "an entertainment destination." Distribution is up 5% from a year ago to 82 million homes. CEO Rich Battista, who joined Singh on the call to discuss second-quarter results, said sales of packages for the network's coming coverage of the Emmy awards--including its well-known "Red Carpet" presentation--are up 33% versus last year. Prices are also up, he said, and six new advertisers are on board, including Pfizer, Unilever and MasterFoods. The parent company has been plugging its cross-platform marketing opportunities covering the magazine, network and Web sites to media buyers. It plans to elevate the TV Guide brand to the public via what it labels a "major national consumer marketing campaign" this fall. Overall for the second quarter, Gemstar-TV Guide reported revenues of $155.6 million--up 17% versus the same period a year ago--with net income up 42%. Much of that growth was fueled by licensing technology for interactive program guides.
TV and newspaper company Belo Corp. saw TV revenues rise, which made up for still-weak newspaper numbers. But in the end, it didn't move the needle higher, as its second-quarter profit was off 15% to $36.4 million. The Dallas-based media company said the comparison was affected by a one-time $7.5 million gain in the year-ago quarter. Net operating revenues slipped 3% to $391 million. The TV group witnessed a 2.5% increase for the three months ending June 30, to $198 million. Political advertising was cut by more than half to $2.2 million, from $5.1 million against the same time period a year ago. Many station groups experiencing similar losses are expected to gain later, in the higher-then-lower, two-year cycle of political advertising. Overall, TV ad spot revenue eked out a 1.1% increase, with local business advertising sales climbing 3.9% and national spot growing 1%. Better results came from Belo's Web-related TV activities, up 48% to $7 million. For the newspaper group, which represents almost exactly half of Belo's business--the other being TV--it was a different story. Revenues slowed by 8.5% to $192 million. The company blamed soft newspaper advertising conditions and the downturn in the Southern California housing market. Belo did see better results from its Web-related newspaper activities--up 19% to $13.6 million.
It isn't enough for Fox to win the regular TV season--now it continues to clean up in the lower ad revenue-generating summer period. Fox's weekly win streak is now 26 in a row among 18-49 viewers--the most for any network in more than 10 years. Plus, it has won 10 straight Thursday nights since the summer season started. Fox's twin reality shows--newcomer "Don't Forget the Lyrics" and third-year show "So You Think You Can Dance"--continue to do yeoman's work. "Lyrics" is getting a solid Nielsen preliminary 3.0 rating among 18-49 viewers, while "Dance" is grabbing its typically good-quality 3.3 rating. That gave Fox a 3.2 rating/11 share for the night. CBS was the only other of the big five networks to offer a new show for the night. "Big Brother" took in a 2.7. The network's "CSI" continues to garner good rerun ratings--coming in with a 2.5. All that gave CBS a second-place spot--an average 2.4 rating/8 share for the night. NBC and ABC continue to struggle in the rerun arena. NBC was a distant third at a 1.4/5, with "My Name is Earl," two episodes of "The Office, "Scrubs" and "ER." ABC did worse with "Ugly Betty," "Grey's Anatomy" and "Men In Trees"--delivering a 1.0/3. Then came CW with repeats of "Smallville" and "Supernatural" for a 0.7/2.
Ford Motor has inked a multi-year product-integration and promotional deal with Robert L. Johnson, founder of BET, and Harvey and Bob Weinstein, founders of Miramax. The effort gives Ford exclusive automotive product integration in Our Stories Films, a joint venture between Johnson and the Weinstein brothers. Ford will use the venture to promote Ford, Lincoln and Mercury, and its Jaguar and Land Rover brands to African-American and urban consumers via product placement and cross-promotions with the studio's film releases. The first Our Stories Films project to feature a Ford vehicle is "Who's Your Caddy?" starring rapper Big Boi, which premiered Saturday and features Ford-brand Land Rover's Range Rover. The association between Ford and Our Stories was brokered by Ford's urban-market agency, UniWorld, Detroit. But the agency did broker the appearance of Range Rover in "Who's Your Caddy?" which pre-dates the new alliance. Ford says that the deal goes beyond one-off product placement, in which a studio needs a vehicle for a scene and acquires one through a Hollywood vehicle-placement agency. In this, the integration of Ford vehicles into story lines early on means Ford reviews scripts well before production to decide which vehicles match a story and then negotiates Ford vehicles into movie story lines. UniWorld Group will collaborate with Ford and Our Stories Films to place the vehicles and develop the Ford marketing strategy around each featured film. The arrangement between Ford and Our Stories Films also includes the kind of sponsorships, advertising that uses film assets, consumer and dealer promotional opportunities, merchandising and other media options that are typical of such deals. The strategy is not new to Ford or to other automakers--Volkswagen's multi-year relationship with Universal is one example. Several have moved toward multi-year relations with studios in an effort--often risky--to ride the coat-tails of a film's (hoped-for) success by assuring their cars will be more than just set props. Ford, which has had several of its Aston Martin, Jaguar and other vehicles in recent films, has pursued that strategy since it founded its Global Brand Entertainment Group in 2005. The group became a Tinseltown entity that year when Henry Ford's great-great-grandson and independent movie producer, Al Uzielli, opened a product-placement office for Ford in Beverly Hills. Uzielli now serves as senior advisor to the group. Others in the L.A. office are Bob Witter, Ford Global Brand Entertainment Manager; Brian Daly, senior partner at J. Walter Thompson, Ford's agency of record; and Ross Mackenzie, also of JWT. Myles Romero, former director of Ford Global Brand Entertainment, who oversaw Ford's brand-integration efforts from Dearborn, Mich., left the company last week to become vice president of strategic marketing and entertainment alliances at Borders Group. Among other deals, the group inked a multi-year deal between Ford and Revolution Studios that got a Lincoln Navigator a central role "Are We There Yet," and "Are We Done Yet," starring Ice Cube, and in "Johnson Family Vacation," starring Cedric the Entertainer. The Aston Martin DB 9, Land Rover Range Rover, and a Jaguar S TYPE, were in the NBC show "Studio 60." Ford's Fusion car was in "Evan Almighty," starring Steve Carell, and "Man of the Year," starring Robin Williams. Ford's Edge, as well as Expedition SUV and Shelby Mustang, will have major roles in the forthcoming Will Smith vehicle, "I Am Legend." Wes Brown, automotive marketing analyst at Iceology, Los Angeles, says that product integration, at least of the old-school kind, is problematic because it is difficult to track and gives marketers little control. "To have some product placement in a movie, and expect immediate gain is obviously not realistic, beyond boosting awareness," he says. "It is useful in helping image management in some regard, whether maintaining or supporting the brand or vehicle's image." He says the long-term deals that automakers ink with studios reduce at least some of the variables associated with putting one's product in someone else's creative hands. "With long-term deals, arguably, I should be able to have some control over how the product and brands are presented and used," he says. "Product placement is fine and dandy, but if it's not integrated right it comes off as worse than an ad. Long-term deals allow more seamless integration with regard to product placement. That will enhance consumers' feelings regarding that brand, because they will recognize it, but won't think of it as a sales job."