A decade after Madison Avenue began unbundling the worlds of media and creative advertising services, the two disciplines are becoming reintegrated - but this time it is media that is leading the cart, as media services agencies become more vocal about their role in driving the creative process, and offering creative services that compete with traditional "full-service" agencies. While many of media operations of Madison Avenue's top media agencies have been doing so quietly for years, Publicis' Starcom MediaVest Group shook things up Wednesday by taking a very public stand about offering a standalone creative services unit (MediaDailyNews Dec. 19), and the move has encouraged others to speak out about their own progression into creative services. On Wednesday, Media Storm, a spunky media services boutique based in Norwalk, Conn., which services a lot of media and entertainment industry accounts, also announced the spin off of a creative services shop: MAUDE. Tim Williams founder and managing partner of the six-year-old media independent, said the shift into creative services has been driven by demand from clients, which include a roster such as Food Network, Court TV, The Weather Channel, FX Networks, SPEED, NFL Network, Fox Broadcasting, Fox VOD, Shopzilla, WE tv, DIY Network and Fine Living TV. "Many of our clients asking us for creative input and thinking, which we have gladly obliged," he stated, adding that the time was right to "make creative another core competency" of Media Storm's operations, and that spinning off MAUDE was the way to do it. Top industry leaders agree, especially David Verklin, the CEO of Carat Americas and Carat Asia-Pacific, who has tacitly said media agencies like Carat have organically been moving into the role of creative services agencies for years. And though the agency didn't make a lot of noise about it earlier this year when it merged Carat and interactive agency Carat Fusion into one entity, Carat technically became the first major media agency to begin offering creative services, because Carat Fusion has always provided them part and parcel of servicing interactive media assignments. "Carat is now a full-service agency, in the simplistic sense of the word," Verklin said. He noted that most big media shops - even those held by Madison Avenue's large agency holding companies - have tacitly begun providing creative services via interactive, branded entertainment and other units, but until the Starcom MediaVest announcement, have been loath to state it as an explicit function for fear of antagonizing other relationships in their organizations. Verklin said that was the most important thing about SMG's announcement on Wednesday. "What I find most interesting is the freedom and power that [SMG] has to get into and overcome the internal kind of turf wars that would stop this from happening in other media agencies," he said. "They have enough mojo within their own company that the can say they're creating a 21st century digital creative unit... It's a remarkable story." Verklin said Carat has no such issues within Aegis Group, because unlike Publicis, WPP, Omnicom, Interpublic or Havas, Aegis does not operate any traditional creative services shops, and evolved its role in creative services through its media enterprises - first with interactive shops that comprise its Isobar network, and also via Posterscope, its global outdoor media services network, which also provides creative services. "That was easy for me to do, because I didn't have any creative agencies to deal with. There was no channel conflict," he said. But other big media shops affiliated with big creative brand agencies inside agency holding companies are beginning to acknowledge as much. Alan Cohen: "Since 2005, our view of making media the new marketing has won us numerous clients that think of us as their 'ad agency,' not their media agency," acknowledged Alan Cohen, who launched Initiative's Innovations unit and is now managing director of the agency's West Coast offices. "At Initiative, often we write the strategy documents that inform our clients on how to brief all their agencies, and in many cases we end up producing and executing the creative because we have the resources and partnerships to do it." Even so, Initiative has never come out and explicitly said it was spinning off a creative services unit within its organization the way SMG did on Wednesday, though such distinctions are likely to fade ad media and creative services begin to blur as a result of the growth in digital media. Interestingly, SMG's announcement downplayed the role of "online" and emphasized the role of "digital," even as it subordinated "media" vs. "creative." In the 599-word released it issued Wednesday, SMG used the word "digital" 11 times, but only used the word "online" once. Similarly, the release used the word "creative" 11 times, but used the word "media" only four times. Such stats may seem trivial, but the language that agencies use to describe their services speaks volumes about the way they think of themselves internally, and how they pitch themselves to clients and the trade at large. The second big aspect about SMG's announcement, and the implicit underlying trend within the industry, Carat's Verklin said, is the recognition that digital creative services is now deemed a viable, standalone service - and one that is an important component of media agencies. "It's a sign of the maturation of the business," he said, adding however, that it raises some big questions. Noting that digital creative generally generates smaller revenues than traditional media creative, because digital production is so much cheaper than analog production, Verklin said a key question remains, "How do you get paid for this work?" While she did not explicitly answer that question on Wednesday, SMG Americas CEO Laura Desmond implied the agency was having no issues on that front and the fact that it is rolling its Pixel unit out from an incubator to a stand-alone service indicated that it has sufficient cash-flow and profitability to stand on its own.
The integration earlier this year of Carat's traditional and interactive media operations into one consolidated media services organization appears to be paying off as the year draws to a close - at least on the interactive front. Carat Wednesday was named the search marketing agency of record for Virgin America, the U.S. spin off of Europe's high-end airline, which was launched in August. The account includes a variety of paid search marketing and search engine optimization services, and will be managed by Carat's San Francisco office. Billings were not disclosed, but the assignment is an important win for Carat, which has been a finalist in a series of high-profile account pitches recently, but hasn't come up with a big win in a while. The Carat team, which recently was named global media agency of the year for the second year in a row by Europe's influential Campaign magazine, is sweating out the final decision in a heated pitch to retain its role as media agency for Hyundai/Kia's U.S. media shop. An announcement on that decision, which is down to incumbent Carat and contenders Initiative and Havas Media, is expected any day now. On Wednesday, Carat parent Aegis Group reported a relatively strong update on its outlook on its financial results for 2007. While final results will be released March, 19, 2008, Aegis said indications through the first 11 months of the year are that organic revenues are up 9.6% through the first half, and continue to be "very strong and significantly ahead of the market" both for its media operations and its marketing and media research operations. The company said "organic revenue" growth for its media operations has been "strong across all regions in the year-to-date, reflecting our leadership in digital and a good record of new business wins over the past two years, including General Motors in Europe and Twentieth Century Fox internationally. "Net new business momentum has remained good, with second half major wins including Mattel internationally, The Coca-Cola Company's consolidation in the UK, Kellogg's in the Nordics and Outback Steakhouse in the US." The update did not reflect Carat's win of the Virgin U.S. search marketing account, but the win is an important vote of confidence in Carat's new integrated model. "Carat brings a sophisticated knowledge of search marketing and, most importantly, has an in depth understanding of how search integrates with a broader on and offline marketing communications program," Porter Gale, vice president-marketing at Virgin America, noted in announcing the assignment.
On the verge of closing its $8.2 billion buyout deal, Tribune Co. announced that its chairman/CEO Dennis FitzSimons will leave the company at the end of this year. FitzSimons' departure had been expected since real-estate magnate Sam Zell agreed, with other partners in April, to take Tribune private. FitzSimons will leave Tribune with more than $32 million in severance and stock holdings, based on an analysis of corporate disclosure statements filed by the company. FitzSimons--a 25-year veteran of the company--sent an email to Tribune company employees saying it was the right time for a transition. Tribune owns nine daily newspapers, 23 television stations and the Chicago Cubs baseball team, which it has agreed to sell under terms set by Zell. Early in the day, there was some initial nervousness among investors that the Zell deal might hit a financial snag. But after FitzSimons' announcement was made, investors assumed the deal was on the right track and pushed up Tribune shares--closing at $33.07, 0.72% higher on the day.
The effects of Tuesday's vote by the Federal Communications Commission to loosen restrictions on cross-ownership of media will not be felt for at least a year or two, according to Ken Doctor, a newspaper analyst with Outsell Inc., a consultancy serving the information industry. But once the kinks are worked out, the decision could be a boon to newspaper owners. And there are plenty of kinks to work out. The FCC decision still faces broad bipartisan opposition in both houses of Congress, led in the Senate by Republican Trent Lott and Democrat Byron Dorgan. Congress has vowed to take up the FCC decision in the New Year, and could effectively reverse it, depending on the extent of real opposition among lawmakers--still an unknown quantity. If the rule changes survive congressional mauling, there will also be a number of lengthy court cases, with jurisdiction tracing back to the 3rd U.S. Circuit Court of Appeals in Philadelphia, which issued a stay in September 2003 blocking the FCC's previous, more ambitious attempt to deregulate ownership. Such legal realities will probably deter media owners from making any big moves until the court cases are settled, Doctor said, delaying the effects even further. However, if the rule changes do happen, they may be a lifeline for struggling newspaper publishers. It may not benefit readers, however, Doctor warns. By making it easier for newspapers to merge their operations with TV stations, the rule changes will "allow them to produce both story content, video content and audio content, out of a single enterprise with a single management, single newsrooms and a single sales staff," he says. If they can pull that off, Doctor says newspapers can reduce overhead and produce a substantial cost savings. Publishers could further benefit from combining their Internet presence with broadcasters. In the best-case scenario, this will in turn "give a boost to papers like The Washington Post, which has a long tradition of public service and real commitment to producing good journalism." Doctor added that a number of big newspaper publishers could also benefit from capital infusions if purchased by another media company. But Doctor questioned whether this generation of media leaders "has the vision and the drive to pull off such a transition." The alternative would not benefit the consumer. He predicts the industry would endure if "outsiders with no real interest in journalism come in, buy up, and roll up newspaper publishers with TV broadcasters, with no concern except maximizing profits."
Finally finding a major long-term Internet partner, Viacom has struck a massive five-year program content, distribution and advertising deal with Microsoft Corp. worth $500 million. Highlighting the multi-prong alliance will be Microsoft's licensing of Viacom programs--coming from MTV, Comedy Central, BET and Paramount Pictures--for use on Microsoft platforms: Web site MSN and game platform Xbox 360. Viacom programs are already distributed to Xbox 360 users. The new deal adds content from BET Networks. On the Internet ad front, Microsoft's Atlas ad-server division--similar to Google's DoubleClick--will become the exclusive server of ads for Viacom's U.S. Web sites. Microsoft can also sell leftover display advertising inventory on those Viacom sites. Both companies will share in that revenue. For Viacom's traditional TV ad platforms, Microsoft will buy advertising on Viacom broadcast and online networks over a five-year period, which includes promotions and sponsorships for MTV Networks and BET Networks award shows and sites. In the gaming arena, Viacom will look to produce games, with Microsoft becoming a preferred publishing partner across Microsoft's game platforms. Finally, for 2008, Microsoft and Viacom will work on a co-branded event and promotion Web site with exclusive content from at least four MTV Networks and BET Networks events, such as the MTV Video Music Awards and BET Awards. Both companies will share advertising revenue, and Microsoft will offer up online promotion for each event. Philippe Dauman, president and CEO of Viacom, said in a statement: "This is a novel and comprehensive partnership that demonstrates the scale of our digital operation and the value of our branded content across all distribution platforms." He added that Microsoft's expertise in the ad-serving business would bring "enhanced value to our digital operations." Kevin Johnson, president of Microsoft's Platforms and Services Division, said in a statement: "Viacom's portfolio of original content and strong consumer brand connections are a terrific complement to Microsoft's Web, gaming and digital advertising assets." Google has become Microsoft's growing competitor--especially Internet ad-serving, with its DoubleClick division. Viacom has also had a run-in with Google and its popular YouTube video site. The company is angered by what it says is YouTube's illegal use of its content. Since then, Viacom and YouTube have had on-and-off-again licensing discussions.
Initiative USA has hired veteran Zenith Media executive Kris Magel, as its senior vice president and director of national broadcast. Magel will eventually fill the position formerly held by Tim Spengler, as the agency's top national broadcast executive. Spengler is now chief activation officer of Initiative, to whom Magel will report. Magel will start in 2008 and assume the duties of Scott Haugenes, currently senior vice president and group director of national broadcast. He will leave Initiative in early 2008 to join the video-on-demand network RipeTV. Magel will work with Ray Dundas, senior vice president and group director of national broadcast. "Kris is passionate and knowledgeable about today and has a vision about tomorrow," says Tim Spengler. Spengler says Magel will also work closely with the agency's growing digital extensions division, which places media from multiplatform deals made with traditional TV networks. Magel comes from Zenith Media, where he was senior vice president of national broadcast account director. He worked with Maybelline NY/Garnier and Nestle brands. Before Zenith, Magel was senior vice president and director of national broadcast for Optimedia, doing work for clients including T-Mobile, Whirlpool, BMW and T-Rowe Price. Initiative clients include AOL, Bayer, Big Lots, CBS, Computer Associates, Coors, Gateway, Hardee's, Hitachi, The Home Depot, Kao Brands, Lionsgate Films, LucasArts, Nikon, Quiznos, Showtime and SC Johnson.
A new report from Borrell Associates, a consulting and analysis firm that studies the newspaper business, shows local newspapers losing local ad revenue to online-only competitors on the Web, despite attempts to build their audience and offer more sophisticated advertising programs. According to Borrell, online-only Web players attracted 43.7% of the total $2.7 billion spent on local online ads in 2007. This growth is coming at the expense of local newspaper Web sites, which got just 33.4% of the ad spend--down significantly in percentage terms from 2004, when they grabbed 44.1%. To assure themselves of a steady stream of local online revenue, many local paper Web sites have partnered with online companies that operate newspaper networks, including Yahoo's newspaper consortium. But these deals cut both ways: Sharing local content with big online companies may prove dangerous in the long run, as news aggregators serve readers the content as a final destination, rather than sending them onto the Web sites of individual papers. Some alternatives do exist that don't require newspapers to share content online. For example, a company called Centro has partnered with about 4,000 local publishers to create something like a national online network for display ads. Centro's system allows advertisers to purchase display ads on any scale, from a single site to regional or demographic buys, to a run-of-network campaign. Shawn Riegsecker, Centro's founder and CEO, says the company handles about 50% of all display ad placement on local newspaper Web sites.
ION has signed P&G to help promote the launch of newly acquired series "The Drew Carey Show." The network will run a "Bring in the Drew Year with a Smile" promotion in conjunction with the Crest White Strips brand, starting Jan. 1. Viewers will be able to vote for a favorite smile among the "Carey Show" cast on the ION Web site, and the winner will receive a trip for four to a place of their choice in the U.S. The effort is being billed as a "make you smile" venture. ION will plug the promotion via on-air spots--particularly during a New Year's Eve, four-hour marathon to mark the show's debut on the network. The series then becomes part of the regular lineup, airing Monday through Thursday with back-to-back prime-time episodes in the 9 p.m. hour. The "Carey Show" ran from 1995 through 2004 on ABC. It has also had a strong run in syndication and on TBS.
At one point in a recent episode of VH1's new reality-competition gambit, "America's Most Smartest Model," a top Jaguar executive tells a contestant who just finished making a sales pitch for the new XKR convertible: "Basically, you figured it out--what the consumer is like, who's going to buy that car, what our audience is like." The contestant's sales pitch covered horsepower and supercharged V8s and other truly jaw-dropping features, while trying to add a more emotional flavor too--and it may indeed have had considerable resonance with the target market for the high-end Jag. But Jaguar's decision to opt for a brand integration in the new "Smartest Model" series seems curious at best--largely because the bulk of the viewers on VH1 just don't seem to be what Jaguar's "audience is like." How many watching a reality series on the younger-skewing network--where the goal is to discover the dreamboat with the best combination of beauty and brains--are ready to pony up $90,000-plus for a sleek convertible? Wouldn't a Mustang that comes at about a third of the price be more realistic? (Ford owns Jag, so maybe some cross-unit communication could have helped, assuming it didn't take place.) Perhaps, Jaguar felt the "Most Smartest Model" co-host Ben Stein would attract some older, wealthier, more educated consumers. To be sure, some tactics used in the marketing of luxury vehicles center on an aspirational ethic. In other words, inculcate younger consumers early about how great, say, a Mercedes is--even if they can't afford it now--and hope it becomes top-of-mind and top-of-heart for a purchase down the line. But the esteemed Jaguar weaved into a VH1 series with intentionally improper grammar in the title seems slightly more like a vanity play than well-crafted strategy. After all, the two Jaguar executives who appeared on Dec. 2 got plenty of air time, and there were plenty of impressive shots of their roadsters. The pair made their first appearance to inform the contestants what their challenge would be in order to avoid elimination: Compete to make the most sterling sales pitch for the top-of-the-line XKR convertible (one of the top product placements of the week, according to measurement firm iTVX.) Later, they served on the judging panel. While having company executives introduce the task in person smacked of "The Apprentice," it did have a smoother feel than what happens when Donald Trump stands with, say, the CEO of El Pollo Loco or CMO of Toyota. The Jag executives were on their own and Trump didn't have to awkwardly ask them for their names on camera (Wouldn't it be better if Trump just asked before air and introduced the execs himself, rather than say: "And you are?"). Moving forward, the contestants then made their pitches for the Jag XKR. The models weren't showing their runway stuff ("beauty"), but "brains" in memorizing the XKR attributes and then presenting them--along with offering some personal testimonials to an audience, spokesmodel-style. They did so with the sleek black convertible beside them, and the model contestants certainly gave the Jag some impressive plugs. One said: "Yesterday, I got to ride in a new Jaguar XKR ... and my heart kept fluttering." Another: "The XKR hit the markets December of last year, or should I say intimidated the markets in December of last year?" Nonetheless, from an execution standpoint in the episode, there were two questionable plays. The first came as Stein announced a reward for a two-person team that just won an early challenge. As doors to a garage opened broadly, in drove a new silver XKR. And some viewers were surely impressed: A minor challenge yielding a $100,000 roadster? Forget an SUV on "Deal or No Deal." But then Stein essentially offered a letdown deal: "We're not giving you a brand-new Jaguar, but the two of you will get to drive it back to (where they live) tonight." So, essentially the reward is what an average Joe can do by visiting a showroom? Stein's verbal legerdemain was off; he should have used more of a positive spin. Second, before the sales pitches, a Jaguar executive brought the competitors into a drab meeting room to give them fodder for their selling. Then, she reeled off essentially an equally drab PowerPoint presentation--there were mentions about horsepower and the V8, but also the XKR's "adaptive restraint technology system" and "dynamic stability control." Not exactly what a guilty-pleasure-seeking VH1 prime-time audience would seem to be looking for. Her recitation lasted 19 seconds on screen, but seemed like 1900. Bottom line: For a marketer that has set the bar high with its memorable effort featuring Sting in what felt more like a music video than an ad, Jag's integration in the VH1 series just didn't seem "most smartest."
ProductShowQ-Ratio Jaguar America's Most Smartest Model 16.0395 Sprint Survivor: China 2.6333 Ziploc The Biggest Loser 1.5046 Jeep Liberty Samantha Who? 1.3147 CVS Extreme Makeover: Home Edition 0.5805 Click here to view these placements. Data and analysis provided by iTVX.