Based on conversations with its biggest customers - the major broadcast networks - it does not appear that Nielsen will make its self-appointed deadline of Monday to begin implementing a plan to change how it "weights" its national TV ratings, including mathematical adjustments that would reduce the representation of homes with computers connected to the Internet, and would boost the representation of younger households. During a briefing with Nielsen on Wednesday, the major networks, especially CBS, said they were opposed to implementing the changes until a thorough review of the impact of the changes on TV ratings could be made, and until the industry ratings watchdog, the Media Rating Council, could sign off on the process. In meetings and communications with various clients to date, Nielsen executives have implied that the MRC had been fully briefed, and had already endorsed the move, but it became evident during Wednesday's briefing that is not the case, and some clients said they believe Nielsen is forcing the issue and trying to ramrod a process for business reasons other than managing the quality of its national TV ratings - principally, the introduction of its so-called "Extended Screen" service, which will measure viewing of TV programming done via computers connected to the Internet. Nielsen executives have told clients they need the new weighting controls in place at the start of the 2010-11 TV season in September, in order prepare for its Extended Screen service, which is expected to be released no later than February 2011. CBS executives expressed the greatest concern over Nielsen's rush, and the fact that the MRC had not yet vetted the plan. The broadcast network reaction was different from those of some cable networks, especially Turner Broadcasting System and ESPN, who have been pushing to accelerate the changes, and some clients believe the divisions have to do with potential competitive advantages or disadvantages they weighting changes could have on ratings for various networks, which could manifest in gains or losses in advertising revenues. Nielsen executives have maintained that the sample weighting adjustments would have only a miniscule impact on actual ratings, and primarily around periods when Nielsen's sample households install new consumer electronics, usually around the Christmas holidays. While changes in computer/Internet access is one concern, some Nielsen clients believe CBS' reaction is likely based on Nielsen's plan to begin giving more weight to households headed by people under the age of 25, a demographic the network skews low on. Meanwhile, a Nielsen spokesperson took issue with MediaDailyNews' report earlier in the week that Nielsen disclosed to clients that it did not have the ability to measure TV viewing done via Apple computers connected to the Internet. The spokesperson said the revelation was not new, and had been previously disclosed to clients, and that Nielsen has a solution that will enable it to begin tracking TV viewing via Apple computers beginning this fall.
Like the industries it measures - media and marketing - Nielsen Co. is evolving and morphing into something else, according to ways in which it describes itself to investors and federal regulators. In financial filings with the Securities & Exchange Commission, Nielsen now describes its business segments as "Watch," "Buy" and "Expositions." In past filings, Nielsen described its segments as "Consumer Services," "Media" and "Business Media." The changes no doubt reflect some recent divestitures, including the sale of its business publications earlier this year, but also a subtle repositioning of how the world's largest consumer researcher views the consumer marketplace. Nielsen's describes its Watch segment as "what consumers watch," and includes such services at TV ratings, Internet and mobile audience measurement, as well as various analytic products related to them. Interestingly, the verb watch doesn't necessarily cover some of the forms of consumer media behavior it now measures, including radio audience measurement, and digital media activities that do not involve watching things. Buy is described as "what consumers buy," and includes market research and analytics services. Expositions includes various trade shows, events and conferences. The reclassifications make sense, especially given Nielsen's divestiture of its business publications, including the sale of trade magazines such as Adweek, Billboard and The Hollywood Reporter to e5 Global Media at the end of 2009. In its most recent filing with the SEC, Nielsen did not disclose the sales price of the publications, but it said it recorded a net loss of $3 million associated with the divestiture. Nielsen has scheduled a conference call to brief investors and securities analysts this morning on its second quarter and first half 2010 results, and in an earnings released issued earlier this morning reported second quarter revenues of $1.270 billion (an increase of 7% from a year earlier), and first half revenues of $2.466 billion (an increase of 8% from a year earlier). Nielsen, which is controlled by a group of private equity firms and is preparing for an initial public offering, said its operating income grew 10% during the first half to $314 million.
Interpublic posted strong organic growth in the second quarter in the U.S., enough to give CEO Michael Roth confidence that green shots will prompt advertisers to continue to invest, at least for now. Organic growth climbed nearly 14%, compared to 3% for the previous quarter. Roth cited event marketing and the Mediabrands unit among the growth contributors. "Clearly [it] shows that the signs of an economic recovery are giving clients greater opportunities to engage in marketing spend," he said on an earnings call. In the April-June period, as U.S. organic revenue was up 13.6%, total domestic revenue increased at about the same rate to $961 million. Overall, global profit soared to $105.3 million versus $20.9 million in the same period a year ago. Roth said client CEOs are concerned about a double-dip recession, but IPG's current numbers don't indicate one is taking hold. "And when you look at our clients' cash positions overall, they certainly will have the money to spend in marketing dollars," he said, perhaps to gain share in the event of another downturn. In midday trading, IPG shares were up nearly 10% to the $9 range.
Better-than-expected organic growth pushed Paris-based advertising company Publicis Groupe SA to strong second-quarter results. The company witnessed a 7.1% improvement in organic revenue growth (from existing businesses and without currency fluctuations) in the second quarter -- more than double the gain from its first-quarter financial report. Strong results have allowed the company to estimate its now-expected organic revenue growth to be 3.5% for 2010, up from a previous 3.0% number. CEO Maurice Levy said there should be other improvements as well. Previously, Publicis estimated 15% margins for the company. Now it appears that number could climb. He added that almost all of Publicis' 30 biggest clients have increased their budgets. The ad agency group's clients include Procter & Gamble and French carmaker Renault. Publicis added that digital agency group Razorfish is still undergoing integration into the company as whole, which is causing it to underperform in terms of profit margins relative to other company divisions. Publicis bought Razorfish from Microsoft in August 2009 for $530 million. In addition, during the first six months of the year, the advertising agency giant said it won new business amounting to $2.1 billion in billings. Second-quarter revenue climbed 21% to $1.79 billion, due to gains for virtually all territories -- except for the Middle East and Africa. Net profit rose 27.5% to $277 million. Levy stated: "Without lapsing into the euphoria that these half-year results for our Groupe might warrant, I remain firmly convinced that Publicis Groupe will succeed in outperforming the market in terms of both growth and margin."
The CW's radical move this past upfront in June -- selling a one-for-one package of an Internet commercial and a TV spot to advertisers -- has been a big success. This is according to Dawn Ostroff, president of entertainment for the network, speaking at the Television Critics Association meeting in Los Angeles on Thursday. The move pushed CW to add additional commercials to its Internet airings, more than other networks, resulting in a similar load to traditional TV shows. The aim was to add back all those young CW viewers, who, more than other network viewers -- typically older audiences -- watch more TV shows online. What will viewers think? That is yet to be determined. But from a business point of view, it is a big hit. Ostroff says the strategy is being "wholly embraced" by the ad community. All this means more money. "We're no longer looking at digital pennies," said Ostroff. "We've achieved digital dollars ... I think this may become the blueprint for the rest of the industry. We've all been trying to figure it out, but this may be the answer." Ostroff didn't reveal how much money CW gained from this move or what effect it had on the Internet price-per-thousand viewer prices (CPMs), which can typically be 25% to 50% higher than on traditional TV. Higher Internet CPMs are the result of many factors. One is that there are fewer commercials in TV shows seen on the Internet versus those viewed on traditional TV outlets.
Big advertising results from its World Cup coverage helped push Univision Communication to a second-quarter profit. Net profit was at $35.3 million versus a $27.7 million loss in the second-quarter 2009. Overall revenue gained 23% to $639.8 million from the second quarter of 2009. The big Spanish-language media company grabbed around $73.6 million in incremental revenue during the second quarter and $74.8 million over the first half for its wall-to-wall television soccer coverage in June. "We have made significant strides both compared to last year and the previous quarter," said Joe Uva, president/CEO of Univision. "In the second quarter, the 2010 FIFA World Cup was without a doubt a tremendous highlight for us. And it was our most successful World Cup to date... We reached all-time record numbers in viewership and visits to our interactive properties." In fact, Univision's television business has had strong results in the summer. So far -- June 14 to July 25 -- Univision has been the No. 1 network in broadcast prime among young adults 18-34 (1,083,000). Univision was also strong among older viewers, taking third place to date for adults 18-49 (1,844,000), bettering CBS, NBC and CW. Univision's Internet business grew 37% in combined visits to its platforms. Page impressions grew 15% and ad impressions climbed 6%. Revenue grew to $19.8 million from $10 million in the second quarter last year. On Tuesday, Univision Communications agreed to pay $1 million to settle allegations against "payola" or pay-for-play charges that the company's radio stations and its employees accepted secret cash payments to give more airplay to artists with a former Univision recording label. Radio revenue declined to $89.9 million from $95.1 million in the comparative second-quarter period of 2009.
The promised rebound in newspaper publishing has not quite materialized, judging by the recent round of quarterly results from major publishers. The latest addition to the lackluster list is McClatchy Co., which reported another revenue decline in the second quarter -- albeit less severe than in previous quarters, again reflecting the broader trend. Total revenues at McClatchy fell 6.4% from $365.3 million in the second quarter of 2009 to $342 million in the second quarter of 2010, due mostly to continued declines in advertising revenues, which slumped 8.2% from $283.7 million to $260.5 million over the same period. Retail fell 10.7% to $133.5 million, national slipped 2% to $23.6 million, and classifieds slid 8.8% to $73.1 million. Circulation revenues also fell 2.4% to $67.7 million. McClatchy Chairman and CEO Gary Pruitt found the positive side of the continuing declines, stating: "Advertising revenue trends continued to improve as we anticipated. Advertising revenues declined year-over-year by 8.2% compared to declines of 11.2% in the first quarter of 2010 and 20.5% in the fourth quarter of 2009. "We were also encouraged by the improving trends within the quarter: advertising revenues were down 10.2% in April, down 7.3% in May and down 6.4% in June." He added that "employment advertising, more than half of which is now online, was up 1.5% in May and 0.8% in June." The McClatchy results follow a string of fairly weak earnings reports from other big newspaper publishers. Earlier this week, A.H. Belo, which publishes The Dallas Morning News, said total revenues sank 4.7% to $121.6 million in the second quarter. At the New York Times Co., total ad revenues decreased 0.2% to $314.9 million. Gannett Co. reported that total revenues at its publishing division fell 6% to $1 billion in the second quarter of 2010, attributing this loss to a 5.7% drop in advertising revenues, to $692.2 million.
Graphic Time Cover Stirs Debate The cover of the latest issue of Time is designed to shock and appall -- and it succeeds. The photograph is a portrait of an 18-year-old Afghan woman, Aisha, whose nose and ears were cut off by the Taliban for fleeing her abusive in-laws. The caption reads: "What Happens If We Leave Afghanistan." The mistreatment of women in Afghanistan, and the Middle East in general, has been a rallying cry and point of contention in political arguments about U.S. foreign policy in that part of the world. President Bush presented women's rights as one of the causes served by the American invasion of Afghanistan in October 2001. Yet skeptics point out that women are also mistreated in countries allied with the U.S., like Saudi Arabia. Moderate Islamists have hastened to distinguish their own conservative views on women from the medieval attitudes of the Taliban and Al Qaeda, while defending traditional practices that demand total coverage of the female body. The timing of the Time cover is interesting, coming as President Obama struggles to defend his decision to increase the American troop commitment in Afghanistan. Critics are citing classified documents that seem to suggest the U.S. may be losing the war. Republican National Committee chairman Michael Steele said as much earlier this month, when he called the U.S. presence in Afghanistan a "war of Obama's choosing" and noted that no invader has ever successfully subdued the country. While observing the niceties of objective journalism, the story on Aisha -- with its powerful cover image and blunt headline -- seems intended to help rally support for continued (and expanded) U.S. involvement in Afghanistan. Time's Western middle-class audience can only disapprove of the Taliban's brutal misogyny. But it's worth noting that the story (as told by Time) is a bit more complicated than it might appear. First of all, Aisha was mutilated by the Taliban last year, well into the U.S. occupation of Afghanistan. And this highlights the real issue: The U.S.-NATO mission's failure (so far) to eliminate the Taliban as a military and political force in Afghanistan. In this sense, the story accompanying the cover image -- while disturbing -- doesn't tell us anything new about the situation in Afghanistan. It's also worth noting that such mistreatment of women may well continue, regardless of U.S. involvement in Afghanistan -- especially if the weak central government tries to cut a deal with the Taliban. The Washington Post reported that Afghanistan's U.S.-backed leader, Hamid Karzai, is attempting to negotiate a power-sharing deal with Taliban warlords who control about 30% of the country. The Street Shares Content with Newsweek The Street.com, an online news powerhouse covering the world of finance, is set to begin sharing content with Newsweek across both companies' digital platforms, as well as Newsweek's print edition. The content-sharing partnership will give the newsweekly's Web site access to breaking news as reported by TheStreet.com and sister site MainStreet.com, including annotation and links back to the original stories on those sites, and vice versa (with Newsweek content appearing on TheStreet.com and MainStreet.com). Fader Debuts Mobile App Music magazine Fader has released a mobile app for the iPhone and Android, giving readers access to exclusive features and editorial content from the print magazine and its Web site. The app offers slide shows of images from the magazine, a music player with podcasts and mixes created by the magazine's editorial staff, video content from Fader TV, schedule information for events hosted by the magazine, and an archive of back issues. The app, available at http://road.ie/the-fader, also incorporates social media with a fan wall which allows app users to interact with one another. Esquire Launches Home Collection If you let a magazine pick your clothes, why not your home décor? That seems to be the thinking behind the new Esquire Home collection -- a line of furniture, accessories, lighting and rugs for the home and home office created with the Hearst publication's imprimatur and scheduled to debut in New York City stores this fall. So far, Esquire has not disclosed which retailers will stock the line (which consists of about 90 items at launch) for its New York launch. But the line is supposed to eventually go national, suggesting that the magazine will have to partner with a high-end national chain like Macy's or Nordstrom's. New York Names Jennifer Miller to Photo Director Jennifer Miller has been named photography director for New York. She comes to the new role from her previous post as photography director for Hearst's Cosmopolitan. Before Cosmo, she served as photography director of various magazines including Jane, George and Tar. She is filling the post vacated by Jody Quon, who left New York to serve as creative director at W. WSJ Hires Needleman for New GlossyThe Wall Street Journal is bringing in top talent to head its new glossy style magazine, in the person of Deborah Needleman, who formerly served as editor of Conde Nast's defunct but critically acclaimed Domino, a hip shelter title targeting younger women which she also helped launch in 2005. WSJ has been planning the new style magazine as part of a series of new products intended to compete with The New York Times for luxury advertising and Manhattan retail dollars. Needleman will also oversee WSJ's new weekly lifestyle section (created with the same goal in mind) scheduled to debut this fall.
Deal seekers searching for money-saving offers through mobile coupon platform Shooger will soon have BlackBerry as an option to clip and save. The company made it easier to search for deals on the iPhone, handsets running Android, and the company's Web site, but has plans to tie in searches on PC, too. The clip-file-and-save coupon app geared toward local and national specials relies on Google Maps and other technology to pinpoint location and deliver the goods. Mobile and location, the first step in targeting mobile services to consumers, will link to a series of triggers that advertisers can expect to tap, including links to mobile social graphs and profiles. Consumers can set perimeters, adding a city, ZIP code or street address and change the radius to find retail offers from 1 to 100 miles. The search results -- based on location by category, merchant or keyword -- sort offers. Consumers can share deals with friends on Facebook and Twitter. Matt Myers, chief marketing officer, Shooger, says there are more than 100 million monthly Google search queries for deal and coupon-related terms. Shooger offers about 100,000 local and national deals from 50,000 merchants searchable by categories, such as Restaurants & Bars, Home Improvement, Travel, Automotive, Dentists & Doctors and Sports & Recreation. "We're working toward the ability for consumers to create an account and save online searches, linking them to the phone application," Myers says. "The offers found on the consumer's PC will show up on the phone. Location is the first step, but we will link that to other information in the future." Google has also begun to take advantage of coupons. Google Tags, for example, allows small and medium-size businesses to pay a $25 flat monthly fee to promote services on Google Places. There companies can place coupons and photos of other business-related information, making it easy for mobile consumers to find local stores. Searches on Google for Printable Coupons increased 67% compared with the prior year, according to Coupons.com, which earlier this month reported surpassing more than 1 million downloads of its iPhone and Android coupon applications. Representing 20.8% of the U.S. population, 46.4 million American consumers now use online coupons -- up from 40.2 million in 2008, according to Coupons.com. The company estimates that of the 46.4 million online coupon users, 12.9 million do not read any part of the Sunday newspaper -- up 18% compared with 10.9 million in 2008. The demand for mobile data has skyrocketed more than 110% on a compound annualized growth, but the revenue generated remains between 15% and 20%, which provides a huge gap for carriers, according to Bill Diotte, chief executive officer at BroadHop, which sits between the application and carrier to support the flow of information and monetize the assets of the carrier.