The U.S. and global ad economies are recovering faster than expected, leading two of Madison Avenue's biggest agency holding companies to significantly upgrade their outlooks for ad spending for the foreseeable future. Publicis' ZenithOptimedia Group now predicts the U.S. advertising economy will expand 2.2% during 2010, nearly twice the rate of growth that it had projected in its last quarterly tracking report, and Interpublic's Magna Global unit has upgraded its 2010 U.S. ad growth estimate to 4.1% from a previous estimate of 3.0% in April. Excluding the effects of incremental ad stimuli from the Olympics and the political ad spending, Magna said U.S. ad spending would rise 2.8% on a "normalized" basis over 2009. Magna's previous estimate for "normalized" U.S. ad growth in 2010 was 2.1%. Globally, Magna has upgraded its outlook for worldwide ad expansion to 5.6% from 5.0%, while ZenithOptimedia increased it to 4.8% from 3.5%. The two agencies utilize different methodologies and bases for calculating the advertising economy, but their outlooks are moving in the same direction as advertising expenditures continue to benefit from improvements in the macro economy, which is stimulating marketers to spend more on advertising in most major media. Noting that its most recent upgrade is the fourth consecutive upward revision in the past four quarters (and following six consecutively quarterly downward revisions during the global economic recession), ZenithOptimedia said TV and the Internet are performing best, and will increase their share of advertising budgets during 2010, while all other media will either decline or remain relatively flat. "Television did relatively well in the downturn (because consumers tend to spend more time at home watching it when they have less disposable income) and continues to do well as the world recovers," the agency said in a report released early this morning. "New technologies, such as hard-drive recorders and high-definition channels, are encouraging viewers to watch even more television. Television tends to be much more dominant in developing markets, so their rapid rise is increasing television's share of global expenditure. We expect television to attract 41.6% of total ad expenditure in 2012, up from 39.2% in 2009 and 38.0% in 2008." "The Internet continues its steady rise, increasing its global market share from 10.5% in 2008 to 12.8% in 2009," ZenithOptimedia continued. "By 2012 we expect it to account for 16.5% of total expenditure, just 2.5 percentage points below newspapers. Newspapers have been losing share every year since 1987, when they accounted for 40.6% of expenditure. By 2009 that share had fallen to 23.0%, and we expect it to fall further to 19.0% in 2012." ZenithOptimedia said paid search advertising continues to be the "main engine" for the Internet's ad spending growth, accounting for nearly half (49.2%) of all online ad spending in 2009, and the agency forecast it would actually become the majority (51.4%) by 2012. "Display's contribution to total Internet spend fell from 33.2% in 2008 to 32.6% in 2009. New formats - especially Internet video, mobile and social media - should help its share of internet spend return to 33.0% by 2012," the agency concluded.
NBC Universal posted some mixed to good financial numbers, one of its last results under the control of its parent General Electric. While revenue was flat at $4.1 billion in the third quarter, segment profit sank 15% to $625 million due to a year-ago gain when NBC booked an improved ownership stake in A&E Networks. NBC co-owns A&E with Hearst and Disney. Still, on a continuing operating basis, "our profit was up 32% versus last year (or 5% excluding the impact of charges taken by certain divisions in the third quarter last year)," per an email from outgoing NBC Universal President/CEO Jeff Zucker sent to employees on Friday. He added: "Given that the economy, although improving, is still far from robust, these are excellent results driven by superior execution throughout our operations." Better still for the company, there were soaring results from its local TV stations. Zucker noted: "Local Media was up an amazing 87%, as increased revenues from a resurging local ad market hit the bottom line. Film op[erating] profit was up 57%, driven by "Despicable Me," which performed well ahead of expectations." NBCU's cable networks' financials had "double-digit" growth; USA Network still dominated in ratings as the leader among all cable networks. CNBC witnessed a 5% improvement in profit versus the previous period. NBC also had good results from its theme parks. Zucker said they had the best quarter in its history, with operating profit up 59% -- thanks to a new Harry Potter attraction in Orlando and the new King Kong 360 in Hollywood. Zucker said the company is pushing to complete its transaction to shift majority ownership to Comcast Corp. by the end of the year. For the larger General Electric, profits dropped 18%, which pushed down the company's stock by 4% in mid-day trading.
The newspaper industry appeared to hit bottom earlier this year, but that hasn't been followed by a recovery, judging by the latest round of quarterly results. Instead newspaper ad revenues at big publishers like Gannett are basically flat -- dragging along the bottom or still declining slightly. Gannett's total revenues were even at $1.31 billion, thanks to the company's broadcast business, in which total revenues jumped 22.3% from $151.5 million in the third quarter of 2009 to $185.3 million in the third quarter of this year. TV revenues increased from $145.2 million to $179.6 million, reflecting election-year political advertising and a rebound in automotive ad spending. However, publishing revenues slipped 4.8% from $1 billion to $969.4 million, due mostly to a 5.1% decrease in ad revenues, from $681.5 million to $646.7 million. The decline in ad revenues included a 5.9% drop in retail and a 3.4% drop in classifieds, and was mitigated somewhat by a 2.4% increase in national advertising, driven by USA Today. Within classifieds, total automotive increased 6.9%, while employment slipped 1.6% and real estate tumbled 10%. Operating cash flow increased from $256 million in the third quarter of 2009 to $283.6 million this year. Chairman and CEO Craig Dubow also noted that (unlike some other major publishers) Gannett still enjoys access to substantial amounts of credit, including "$500 million of bond financing and the extension of our revolving credit facilities," both completed during the third quarter. Some of the most encouraging results came from the company's digital division, which includes CareerBuilder, PointRoll, ShopLocal, Planet Discover, Schedule Star and Ripple6. Total revenues jumped 10.3% from $143 million to $157.7 million. Digital revenues now account for 12% of the company's total revenues.
Bid4Spots, which operates online reverse auctions for remaindered radio and cable advertising inventory, is overhauling its platform as it prepares to expand to new markets. The upgrade will make it easier for both buyers and sellers to participate in the weekly auctions and help determine which ad strategies are most effective. One of the key upgrades moves all of the online marketplaces from .net to .php; this uniform language should allow Bid4Spots to get auctions for new markets up and running more quickly, according to Bid4Spots Chief Strategy Officer Tim Anderson. It will also allow big advertisers to execute ad buys targeting multiple Zip codes more easily. Plus, the upgrade streamlines integration of metrics from Arbitron and Nielsen into the auctions, depending on the marketplace being served, and provides a new platform for electronic verification with built-in analytics detailing demographic targets and other data. Anderson said Bid4Spots can track "what weeks advertisers were in, how much they spent, in which markets, with what frequency and what kind of demographic criteria." The information is used to offer each client insights based on the performance of their previous campaigns. The new system allows Bid4Spots to switch out metrics and create new auction marketplaces for other types of media, if desired. Currently, Bid4Spots says over 3,000 radio stations have signed up for its weekly reverse auctions, in which multiple stations bid the price of their remaindered inventory down for a single ad buyer, who sets the geographic and demographic criteria for the ad buy. That represents 21% of the approximately 14,000 radio stations in the U.S. Bid4Spots does not disclose which stations the ads run on, to protect station rate cards, but it provides confirmation that the ad buys meet their target criteria.
Fox News Channel has signed on two major advertising deals for its big midterm election night coverage: carmaker Infiniti USA and Norfolk Southern Railroad. Media executives say the Infiniti deal will be a major sponsorship for both TV and online. Infiniti will also be the single sponsor for the day after the election program "Special Report with Bret Baier," as well as the exclusive auto advertiser on election night on Fox News. Norfolk Southern Railroad will get traditional TV messages -- a media buy of commercials and TV billboards. Norfolk was also a major sponsor for Election Night 2008. Fox News executives confirm the deals. On the Internet, Infiniti will get home page messaging on foxNews.com on election day and the day after. The online media package includes display and video ads, which also extend to mobile. Infiniti has been sponsoring a viewer poll both on air and online since August in the Fox Report. GE Capital also bought an online election package that includes display and video ads. For election night 2009, Fox News was the easy leader among cable news networks -- averaging 4,043,000 total viewers and 1,130,000 adult 25-54 viewers, key among many advertisers. Fox News grew almost 90% over its 2009 prime-time viewership averages for the night. For the big presidential election 2008, Fox News was at 9,044,000 total viewers, and 3,925,000 adult 25-54 viewers.
With a new poll showing her falling substantially behind, Linda McMahon could increase her robust spending even more as she battles to represent Connecticut in the U.S. Senate. In the New York market, McMahon has already bought what looks to be the year's most expensive spot for a political candidate. The former WWE executive paid $50,000 to air a 30-second spot in the Sept. 12 season opener for the New York Giants on the local Fox station WNYW. Still, there are two weeks before Election Day, and that amount could be eclipsed. One possibility: if the New York Yankees make the World Series, candidates might pay huge amounts to buy time on WNYW. The NFL's Giants are popular in southern Connecticut, likely convincing McMahon to pay the $50,000. Another well-funded candidate -- New York Attorney General Andrew Cuomo, who is running for governor -- also has confidence that the NFL provides a strong platform. Yesterday, he used Jets and Giants games as part of a pricey roadblock of sorts. Cuomo booked two 30-second spots in the afternoon Jets game on the CBS station WCBS for $35,000 each. He also scheduled a unit in "60 Minutes" following the game for another $45,000. Then, he planned a $36,000 ad during the 1 p.m. Giants game on the Fox station, and one later in the National League Championship Series for $30,000. Opposite baseball, he was to run two spots in "Sunday Night Football" on NBC-owned WNBC and pay $22,000 a pop, according to records kept at the stations. Of course, with Fox's WNYW unavailable in Cablevision homes Sunday, Cuomo's planned spots in the Giants and baseball games lost value, and he could receive a slew of bonus spots, if not cash back. In New York, the ABC, CBS, Fox and NBC stations are all owned and operated by their respective networks. The CW affiliate, WPIX, is owned by Tribune. New York is the country's largest market, but certain spots can cost more in other big markets where races are tighter or candidates are better funded. Stations get a few minutes an hour in highly rated network programming to sell themselves. Ad pricing for candidates can provide guidance in determining costs, but conclusions can be limited. For the most part, stations can charge candidates only the "lowest unit rate" (LUR) -- the cheapest price for a particular placement. A commercial advertiser might pay double or much more for the same class of time. The LUR amounts can bounce up and down frequently in line with demand. The LURs are available within 45 days of a primary, and 60 days of a general election. Some candidate spots booked ahead of time can be preempted by stations. On the flip side, candidates can opt to cancel. Other New York stations may bring in more political dollars this fall, but ABC-owned WABC looks to command the highest price for a scripted show. New York Senator Kristen Gillibrand has booked a $45,000 spot in "Grey's Anatomy" for Oct. 28. A tad cheaper, she also plans to sing her praises for $40,000 on Oct. 26 during WNYW's broadcast of "Glee." A "Glee" spot last week cost her $30,000, while another is scheduled for Tuesday at the same price. Gillibrand also has reserved a $30,000 ad on "Desperate Housewives" later this month on WABC. And she had a deal to pay $28,000 for the show last night. Also on WABC, Cuomo and Gillibrand have booked $30,000 units later this month on the "Dancing with the Stars" results show. Cuomo has run ads for $25,000 on "Grey's Anatomy." On Fox's WNYW, the heavy-spending Gillibrand is in the middle of a three-week run of $25,000 spots on three straight episodes of Fox's "House." WNBC's "Law & Order: Los Angeles" has also drawn that amount, but future bookings are for 20% less. The late local news has always been loaded with political ads. The LUR on top-rated WNBC's 11 p.m. newscast this month is listed at $4,500. The station, however, has also been getting $7,800 via a "candidate discount rate." When paying a CDR rate, spots are guaranteed to run and cannot be preempted. A CDR cost is lower than what the majority of general advertisers pay. At WABC, the second-place newscast has been getting $4,300-$6,000. WCBS -- which trails by a large margin -- has been charging $3,200-$5,400, the latter a CDR rate. A second Fox-owned channel, WWOR, also has an 11 p.m. broadcast. The Fox and CW stations run full-hour newscasts at 10 p.m. WNYW has been making deals at $3,500-$4,200. At WPIX, candidates pay $1,700 for placement in the first 30 minutes and $1,450 in the second half hour. Back in prime time, Cuomo has an $18,000 spot scheduled for tonight on "Lie to Me" on the Fox station. WNYW has also been charging as much as $18,000 for "Hell's Kitchen" and $13,500 for "Fringe." At WABC, a "Brothers & Sisters" spot is booked at $21,000, while one on "Extreme Makeover: Home Edition" is priced at $15,000. Cuomo had a deal to be in new drama "Detroit 1-8-7" last Tuesday for $10,000. On WCBS, Gillibrand planned to pay $22,500 for a spot on "Criminal Minds" last week. And she was scheduled to air in "The Amazing Race" last night for $20,000. Tonight, she and Linda McMahon have booked units in "Hawaii Five-O" for $18,000. Multiple candidates have run in "The Good Wife" on WCBS for $18,000. Later this month, Gillibrand has time set aside in "CSI: NY" for $20,000. On WNBC, Gillibrand has booked a spot in the Oct. 26 "Parenthood" for $22,000. Her spot on "Law & Order: SVU" on Oct. 6 cost $18,000. That was the same amount Cuomo had booked for placement in last Monday's episode of "The Event." Not surprisingly, the NFL costs much less in New York when the Giants and Jets are not involved. Remarkably, the NBC, CBS and Fox stations have all charged candidates $14,000 per 30 seconds for games -- at least once. On NBC, however, the rate has increased to $22,000. In college football, Cuomo has booked a spot on the Oct. 30 prime-time game on WABC for $5,500; an afternoon game that day is to cost $4,000 a spot. On WNBC, Notre Dame games have been running candidates $2,500. In daytime, WABC is getting $3,500 for a spot on "The Oprah Winfrey Show," while WNBC is offering candidates as little as $800 for "The Ellen DeGeneres Show." In an ominous sign for the Hallmark Channel, which is now airing "The Martha Stewart Show," spots in August in the program were going for as little as $200 (albeit in repeats). In late night, McMahon has booked a spot on WNBC's "The Tonight Show" during each episode in October for $1,600 each. Cuomo has booked two spots on "Saturday Night Live" on Oct. 30 for $4,000 each. If a candidate is paying the "lowest unit rate," how much less is that than what a general advertiser would pay? It's impossible to determine even a rule of thumb. But one way to gain insight is to consider what interest groups pay to sway public opinion. The issue advocates do not receive the "lowest unit rate," and pay closer to what a general advertiser would. In one example at WNBC, records show a vast difference. For "Meet the Press" on Oct. 10, Connecticut gubernatorial candidate Tom Foley was given an LUR of $10,000. But Americans Against Food Taxes had a rate of $16,500, while the American Federation of Teachers was to pay $32,750. Another example: "Oprah" spots on WABC are costing candidates $3,500 now. But last March, the American Beverage Association booked time for a spot at $10,000 -- although others it had on "Oprah" were $5,000. Some other listed prices for 30-second spots in the New York market this year, in order of program, amount, candidate (or interest group) and date, are: WABC *"The View"; $3,500; Cuomo; Oct. 18 *"Nightline"; $2,200; Cuomo; Nov. 1 *Barbara Walters' Oscar Special; $22,000; American Beverage Association; March 7, 2010 WCBS *"The Mentalist"; $16,000; Cuomo; Oct. 14 *"The Defenders"; $12,000; Cuomo; Oct. 6 *"Late Show with David Letterman"; $1,600; Gillibrand; Oct. 12 WNYW *NFL pre-game on Fox; $2,000; McMahon; Oct. 10 *"Bones"; $12,500; Sen. Charles Schumer; Oct. 14 *Baseball All-Star game; $20,000; McMahon; July 13, 2010 WNBC *"The Apprentice"; $15,000; McMahon; Oct. 7 *"The Biggest Loser"; $12,000; Gillibrand; Oct. 12 *"The Nate Berkus Show"; $750; Cuomo; Oct. 14 WPIX *"Family Guy" (syndication); $800; Cuomo; Oct. 10 *Mets vs. Nationals; $8,000; Cuomo; Oct. 2 *"Maury"; $1,000, Cuomo; Oct. 7
NBC's special live Thursday night "30 Rock" surged ratings up 43% versus the week before -- but the comedy still didn't win its time period. NBC's "30 Rock" rose to a Nielsen preliminary 3.0 rating/9 share among the 18-49 crowd. But the show couldn't beat "$#*! My Dad Says" on CBS, which posted a 3.1/9 in the 8:30 p.m. time period. The new CBS show is still getting a major shot in the arm from "Big Bang Theory," which registered a 4.1 rating/13 share at 8 p.m,, up from a 4.0 rating the week before. But "Dad" had some movement of its own -- climbing 11% from the previous week's results. The special NBC event did boost its Thursday night fortunes overall -- up 14% from a week ago to a 2.4/7 from a 2.1 rating. Its 8 p.m. "Community" grew 22% to a 2.2/7. Overall, CBS improved its Thursday performance week-to-week; while ABC, its nearest competitor, remained at the same levels. CBS climbed to a Thursday average 3.3/10 from a 3.1 average rating. ABC stayed the same with a 2.9/8 from the previous week. CBS got stronger results from its 9 p.m. and 10 p.m. shows -- "CSI: Crime Scene Investigation" grew 15% to a 3.1/8 and "The Mentalist" went 10% higher to a 3.3/9. ABC still had the best-rated show "Grey's Anatomy", which stayed the same at a 4.5/12 at 9 p.m. The network's "Private Practice" was its star performer of the night: up 7% to a 3.1/9. Fox stayed the same week-to-week, at a 2.3/7. "Bones" came in with an identical 2.6/8, and "Fringe" was the same as a week ago at 2.0/5. The CW has already moved into repeats with "Vampire Diaries" and "Nikita," thus giving back about half its ratings results from the week before, at a 0.7/2 versus a 1.4/4 among 18-49 viewers. Its key 18-34 audience results went in the same direction, earning a 0.7/2 this particular Thursday. In the race for the 18-34 audience, ABC led with a 2.7/8; NBC was next at a 2.6/8; followed by CBS and Fox at a 2.0/6; then Univision at 1.9/6.