Aegis Group's Carat unit this morning released new forecasts for global ad spending in 2009 and 2010, the first from the agency since the economy began to unravel. Carat's new prediction calls for U.S. ad spending to decline 9.8% in 2009, and rise 0.1% in 2010. Worldwide ad spending is projected to decline 5.8% in 2009, and rise 0.7% in 2010, the agency said. In fact, Carat's 2009 global outlook projects declines for every major advertising market with the exception of China, which is projected to grow 4.6% this year, and 7.2% in 2010. "These forecasts represent widespread adoption of a much more cautious approach to spending in the face of widespread economic uncertainty. Of course, these predictions themselves are just that: our best guess at this point in time, in a market we know to be uncertain," Aegis Media CEO Jerry Buhlmann stated, adding, "Worldwide, we estimate that 2009's advertising spend will contract -5.8%. China aside, no major market will see growth this year. But we are seeing some signs for optimism in some countries in 2010. We believe that the U.K., parts of Europe and Asia will start to stabilize." Buhlmann said the new outlook reflects a shift among marketers toward "proven and accountable communications," and said that trend was one of the strong reasons for the "relative resilience we are seeing in TV and online." Ad Spending Growth By Region 20082009GLOBAL1.0 (4.9)-5.8 (4.8) USA -1.8 (2.1) -9.8 (3.1) Canada 2.0 (6.1) -2.5 (7.2) WESTERN EUROPE-2.9 (2.2)-6.6 (2.3) UK -5.5 (2.5) -7.1 (2.2) Germany 0.0 (0.3) -2.2 (0.5) France -2.6 (1.7) -5.0 (2.4) Italy -1.9 (2.8) -6.5 (2.4) Spain -12.7 (-2.3) -16.5 (-0.8) Nordics -0.2 (4.3) -5.6 (3.1) Central/Eastern Europe 12.2 (16.8)-8.2 (15.2) Russia 16.6 (22.8) -8.6 (19.5) ASIA PACIFIC5.0 (8.2)-0.8 (5.7) Japan -4.2 (1.5) -5.5 (0.5) China 18.9 (18.2) 4.6 (10.9) Australia 4.2 (4.2) -1.9 (3.6) Figures in brackets show our previous forecasts from Aug 2008
HOLLYWOOD, Calif. -- The not-so-big secret about how online is changing TV is that traditional TV viewing will still be a big part of the future. During an OMMA panel called "How Online Is Reshaping The TV Advertising Marketplace (and Vice Versa)," Manish Bhatia, president of advanced digital services for the Nielsen Company, says just looking at the increase in TV usage in the last year tells a big story. Bhatia notes that the average TV viewer increased usage five minutes over a year ago. The contrast to online usage is glaring, he says. Just the TV usage increase alone beats how consumers consume video on the Internet. "The average person spends two minutes watching a video online," notes Bhatia. "If I were to fast-forward, we will probably be spending more -- not less -- time with TV." In particular, he notes, the future means using TV more as an interactive medium. The Internet is pushing older TV platforms to transform. Canoe Ventures CEO David Verklin says changes are coming for the marketers in the next six months. Canoe is a venture of the six top cable operators representing 96% of U.S. cable TV homes. In six months, marketers will get "zone addressability" -- thanks to some 60 million set-top cable TV boxes in consumers' homes. For example, says Verklin, American Express could get to advertise their Green card nationally, while its upscale Gold card will target a "zone" -- households with income over $100,000. Verklin says the holy grail of TV marketers will happen later -- perhaps in 36 months -- when true household addressability arrives. After years of criticism, the cable industry has been slow to address marketers' true needs, Verklin insisted. "The cable industry gets it. We have 18-year-olds. We know what the Internet is. We are not Luddites." The technology is there -- but will new business follow? Scott Ferris, general manager of Microsoft's Advertiser and Publisher Solutions Group, said the future is about how legacy business relationships will change between marketers, media agencies and the traditional TV networks, as well as those who buy and sell TV programming. "It's the greatest coefficient drag in the industry," he notes. "It's not the technology. It's: What is the business model?" Tracey Scheppach, senior vice president of video innovation director of Starcom USA, wishes that any new model -- especially addressability -- would happen sooner. That said, Starcom has some 10 clients right now that are investing in addressable advertising. Scheppach says there are still internal disputes at her media agency when it comes to buying a program versus buying an audience. Differences of opinion also come in regard to the value of the TV consumer. "I ask myself: Am I a more valuable target watching 'American Idol' or late-night cable at three in the morning? We are wrestling with those issues."
OMD, the media-buying leviathan that represents McDonald's and Pepsi, has signed a top MindShare executive to head strategy. Ernie Simon becomes U.S. Chief Strategy Officer in April, a new position. During his 11 years at MindShare, Simon rose to president, chief strategist, overseeing strategic operations of MindShare North America. Alan Cohen, U.S. CEO, said while trying to meet "the needs of a difficult economy and complicated media landscape, it has become apparent that this new role is ... essential." OMD said Simon will focus on developing innovative ways to help clients "launch and relaunch brands," while helping the agency "define reinvented media." Simon, who joined MindShare in 1998, began his career in media planning at Young & Rubicam, while also working later at Grey, Avrett Free & Ginsberg and Campbell Media Alliance (a TN Media unit). OMD also represents Visa, Nissan and Intel.
Arbitron, the dominant radio measurement firm in the United States, said Tuesday that it will cut about 10% of its staff in the next couple of weeks, or about 110 employees. The announcement comes a few weeks after Nielsen revealed plans to launch a competing radio measurement service and amid continuing criticism of its Portable People Meter service, a passive electronic measurement device for radio. Michael Skarzynski, the president and CEO of Arbitron, explained: "The company is realigning and restructuring in order to focus on our strategic priorities: strengthening our radio measurement service and developing new multimedia services." As part of this process, "the company is reevaluating the skill sets that we need, given the rapidly changing and competitive media measurement marketplace. We also believe the cost reductions provided by this restructuring will contribute to the company's long-term success." Among Arbitron's ongoing strategic initiatives are "increasing cell-phone-only samples and enhancing qualitative data" for PPM data. Nielsen's planned radio measurement service also relies on mobile phones, which some radio executives believe offer greater penetration of key market demos, including young adults and minorities. Over the last year, Arbitron has come under criticism from big radio broadcasters for alleged flaws in its sampling methodology for certain demographic groups, including African-Americans and Hispanics ages 18-34. This resulted in two civil-rights lawsuits brought by the attorneys general of New York and New Jersey, which were settled earlier this year. Arbitron is also being sued by one of its institutional investors for allegedly deceiving shareholders about the likelihood of delays in the PPM rollout. The class-action lawsuit, brought by the Plumbers and Pipefitters Local Union #630 Pension Annuity Trust Fund, seeks damages for Arbitron investors who bought stock during that period. In October, New York State Attorney General Andrew Cuomo expanded his investigation of Arbitron to include possible securities fraud in connection with the same stock sale.
MPG, the Havas media agency that has been on a recent winning streak, has picked up two additional pieces of business estimated at $100 million, sources said. The wins -- a consolidation of all planning duties for Boehringer Ingelheim, and planning and buying for Evian -- come soon after MPG won the Virgin Mobile and CBS Films accounts. An MPG executive declined comment. The agency had some Boehringer planning duties, but now handles the full spectrum for the pharma company's brands, marketed via direct-to-consumer advertising. Those include Flomax, Mirapex and Spiriva -- with the account estimated at $90 million. RJ Palmer continues to handle buying; the pharma business is considered to be partly recession-resistant. Mineral water brand Evian is part of the Danone Groupe. MPG had already handled the company's U.S.-based yogurt business. The Evian account is estimated to be in the $10 million range. The CBS Films account, won in February, was estimated at $100 million, with most of the spending coming in 2010. The Virgin Mobile business was estimated to be in the $15 million range. The Carnival Cruise Lines, Jones Apparel and Swarovski accounts are also recent MPG wins.
Hallmark Channel is big on branding, which is why it has just announced an upcoming slate of 35 original movies for the 2009-2010 season -- the most ambitious lineup in the network's history. "Our programming shouts our brand," says Henry Schleiff, president and CEO, Crown Media, the channel's parent. He says the network's forte is "offering predictability in an unpredictable world." To prove it, Hallmark will maintain its ongoing schedule -- debuting original movies on Saturday night at 9 p.m. and replaying them the following Friday. Consistency is considered key to sustaining Hallmark's loyal audience -- those who are receptive to its "greatest family movies of all time" pitch. Current in-production movies include "Mrs. Miracle," "A Soldier's Love Story" and "Uncorked," with "Dexter" star Julie Benz. To date, Hallmark's original movie ratings have averaged a 2.4 HH rating with 3.8 million total viewers. The key adult 25-54 and women 25-54 demos are up, at 26% and 30%, respectively. That's good news for advertisers. Recent Nielsen Fusion Metrics found that Hallmark's cross-platform sponsorship opportunities reach 65% of all U.S. homes, which account for $280 billion in annual spending in the consumer packaged-goods category. Hallmark also retains its position as the No. 2 net among prime-time households for C3 audience retention. To extend its film goals, Hallmark Movie Channel has formed a new partnership with NYU. Under the branded banner "Film Positive," short student films -- vetted by a panel of judges -- will began airing in October. They will run in various time slots and will be between three and 20 minutes in length. All must target the entire family and include an inspirational theme that highlights the network's goal -- to celebrate the human spirit through movies. Hallmark Channel is a basic cable network with 86 million subscribers.
Search consultants who handle media reviews indicated Tuesday that while agencies have made strides to integrate their traditional and digital capabilities, clients remain behind and may not be able to take advantage of their progress. Ken Robinson, a principal at Ark Advisors, said clients' in-house operations remain siloed -- perhaps leaving them to fully "manage relationships" that can yield integrated marketing opportunities. "Definitely, the clients aren't integrated," said Stephen Boehler, the founder of the Mercer Island Group. "It's further along on the agency side." Advertisers receive ideas about holistic campaigns using multiple platforms from their agencies -- but they may approve them slowly, since multiple divisions may need to be involved in decision-making. "We really believe that the advertiser has to take the lead," said Jane Twyon, president, Worldwide Media Directors. The consultants spoke through the prism of what clients are searching for in agencies, notably during the economic downturn. They appeared before a gathering of the Collaborative Alliance, a quarterly forum about interactive televisual propositions (including TV, broadband, wireless and out-of-home) run by executives at agency MPG. As for whether clients are eager to experiment with burgeoning opportunities in the interactive and addressable advertising space, Boehler said that sheer budget size can play a role. "It varies a lot by the scale of the client and the environment they're working in," he said. He noted that larger clients can apportion dollars to the emerging arenas, while others don't have the resources. "Mid-sized clients can't afford to be at the leading edge, as it were," he added. Twyon said "it is a lot of the Wild West," and indicated that clients may want to determine what has been effective before moving aggressively. Still, Robinson said although many clients can't afford campaigns in the addressable/interactive arenas now, they are "looking to be educated and led" by their agencies if opportunities arise that fit their economic and other profiles. Twyon agreed, saying that clients "look to their agencies to help them decide what opportunities to get involved in," but at a low cost and at a reasonable compensation level. Also, consultants said clients are seeking more evidence from agencies that their campaigns and work are producing ROI. "Clients are holding their agencies to a higher standard of accountability," Robinson said, adding that clients are under pressure within their companies from the CEO on down to demonstrate that marketing investments are moving product. Twyon said that during the search process, clients are interested in what kinds of research capabilities agencies have. To be sure, agencies have extensive data to show marketing effectiveness. But she said that some clients fear it can be too esoteric. With financial strictures bearing down on them, they are seeking to determine how an agency can "use all this wonderful data" to "build my business" -- and do so within their compensation structure. "The great challenge is finding a way to link those metrics with the core business issues that clients have," Boehler said.
First circulated in jest, then half in jest, the notion of a newspaper bailout is now dead serious with a proposal from U.S. Sen. Benjamin Cardin (D-Maryland), that newspapers receive tax exemption as nonprofit businesses if they elect 501(c)(3) status, like public radio and TV. Choosing to operate under the designation "low profit limited liability companies" would exempt them from taxes and open them to investment from nonprofit organizations. This would prohibit them from endorsing political candidates. It also would represent a fundamental change in their management and mission. After years as lucrative media cash cows producing profit margins of 20% to 30%, the switch to nonprofit status would alleviate corporate pressure, but would also raise issues surrounding advertising. How important would advertising revenue be for the bottom line? As nonprofit media, would they come under pressure from legislators to reject advertising from, say, liquor companies? Would the public accept corporate advertising in a tax-exempt business? Whatever the answers to these questions, Cardin was emphatic about the need to save the dying medium. "The business model for newspapers -- based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy." Remaking newspapers as nonprofits would almost certainly require big corporations to bow out, unless they have a philanthropic bent. Conversely, some nonprofit organizers have proposed a charitable role for Hearst in a new nonprofit publishing arrangement for the imperiled San Francisco Chronicle. Not coincidentally, two of Maryland's biggest newspapers -- the Baltimore Sun and Baltimore Examiner -- are on the rocks financially; the latter has been threatened with closure. "The measure is targeted to preserve local newspapers serving communities and not large newspaper conglomerates," said Cardin's statement. He added: "This may not be the optimal choice for some major newspapers or corporate media chains, but it should be an option for many newspapers that are struggling to stay afloat."
Although ABC's "Dancing with the Stars" was the network star on Monday night, it couldn't take advantage of some lesser competition on Monday. "Stars" pulled a Nielsen preliminary 5.0 rating/13 share among 18-49 viewers, grabbing over 20 million viewers on average between 8 p.m. and 10 p.m. The week before, "Stars" pulled in a 5.4/14, and nearly 21 million viewers. "Stars" may have missed an opportunity -- Fox's "House" was in repeats (a 2.7/7), and a new CBS' "How I Met Your Mother" took a 2.9/8 versus the 3.7/11 that "The Big Bang Theory" earned in the time period a week ago. The only bit of improvement at 8 p.m. came from a new episode of NBC's "Chuck," which grabbed a 2.1/6 -- up 10% from its most recent original outing. ABC's new drama "Castle" slipped some at 10 p.m. to a 2.7/7 from a 3.1/8 the week before. Overall, ABC won Monday night with a 4.2/11 -- but it was a bit less than the week before, when it came in with a 4.6/12. That said, other networks went south as well. Fox went to a 3.0/8 from a 4.3/11 the week before, primarily because of the "House" rerun. CBS also moved down to a 3.4/9 from a 4.0/11 for the night -- mostly from a "How I Met Your Mother" rerun at 8:30 p.m. and a "Two and a Half Men" repeat at 9 p.m. But CBS' "CSI: Miami" at 10 p.m. moved up some -- a 4.0/11 versus a 3.8/10 the week before, winning the time period again. NBC has some decisions to make about "Heroes" for next season. The show is now at a 2.9/7 for an original episode. This is down from a 3.2/8 from an original episode two weeks before. NBC was at a 2.4/6 for the night, good for fourth place behind Fox. NBC was up from a 1.3/3 the week before, when it was in all repeats. CW offered up originals for "Gossip Girl" and "One Tree Hill," which earned a 1.0/3 and 1.1/3, respectively, among 18-49 viewers and a 1.4/4 and 1.5/4 among its more core 18-34 viewers. Both shows were down a bit from recent original episodes. CW earned a 1.1/3 among 18-49 viewers and 1.4/4 among 18-34 viewers for Monday. Univision was just ahead of them at a 1.8/5 for each demo.
Economic annihilation has done wonders for my outlook. For one thing, nobody gives me grief anymore when I drink at lunch. For another, the former Mrs. Feuer, a financial vice president at an accounting firm, is now as broke as I am, which means I have my balls back. And thirdly, I'm learning to love the decaying state of our nation because it's turning all of us into analog lovers again. That's right, take your engagement and shove it. We opt not to opt. We're uninterested in interaction. Back off, ad boy. We want to go back to the couch and the blissful vegetative state we were all in before you started that mishegas about us being in control and pestering "users" to generate ads and all that new-paradigm horseshit. And at the exact moment that we desperately need to simplify our lives--or a line of credit, which would be nice--our wonderful technology is letting us down. We have aggregators aggregating other aggregators. We have turf wars among the social-media sites, pulling and tugging at our time every minute of every day and suffocating cyberspace with inanities. The marketing elite twitters while the country burns. No wonder my friends are souring on Friending. My son hasn't looked at his MySpace page for months. Even the chattering media class has begun to turn on the emerging-media sideshow. I read a story yesterday that declared Twitter can't ever be monetized. (Not like that was blindingly obvious from the get-go, or anything.) Just as satisfying, and long overdue, the digerati can no longer get away with their "traditional media is finished" shtick without being counter-punched. At OMMA Global Hollywood this week, speakers took aim at online bloviator Jason Calacanis and his "we're wonderful, you're toast" routine, so characteristic of the digitards' petty taunting of the old guard. Before the banking bloodsuckers and mortgage vampires ate the heart of the country formerly known as America, clients and big agencies wouldn't have pushed back against Calacanis. They would have hired him for a bazillion dollars as a consultant. Now the signs are everywhere that the good stuff is back. The best-performing scripted network shows are genre series--straight-on storytelling, with none of that bitter David Chase aftertaste. We're grooving to the familiar, comfortable rhythms of "NCIS" and "The Mentalist." Like in the first Great Depression, we are flocking to the movies. For the first three months of this year, the box office is up 12% over last year. What are we watching? Genre films like "Paul Blart: Mall Cop" and "Taken." Some traditional media is even cool again--suddenly we're seeing studies showing how effective TV advertising still is. Buyers and sellers are getting back to basics, like delivering less than they promise, complaining about ratings and posturing in the press over whether the upfront will be up or down. If this continues, the sky's the limit for the Old World discards. TV will come back. Plans will include actual planning. Creative might even be good again, as opposed to a series of escalating gimmicks. Eventually, somebody in an important position in the media agency business might even be quoted making sense. Now that would be revolutionary.