The outlook for the U.S. ad economy has grown "incrementally cautious," according to an informal survey of some big media buyers released this morning by the equity research team at Deutsche Bank. The survey of more than a dozen buyers representing over $5 billion in U.S. advertising budgets, mirrors the sentiment of some recent downgrades in the major agency holding companies' advertising outlooks, and is attributed mainly to the uncertainty surrounding the macro economy, as well as some micro factors such as media price inflation, and the trend toward so-called "ROI" media, such as search, and online display advertising. "Status quo. Everyone is looking for ROI and proven effectiveness," readers the verbatim response of one buyer in the Deutsche Bank report. "Recovering slowly. There is more confidence in advertising as an investment that produces a positive ROI," reads another. One buyer even described the current advertising climate as "schizophrenic," noting that initial expectations coming into 2011 haven't "held up," and that much of the optimism heading into 2012 is due to "artificially inflated" factors such as incremental spending due to the 2012 Summer Olympic Games in London and the U.S. elections. Overall, the Deutsche Bank survey reflects the trends shown in the big agency outlooks, with greater optimism for national media - especially TV and digital - and a more tepid view for local media, particularly radio and newspapers. National magazines are also under pressure as marketers and agencies put increased emphasis on media that can demonstrate an immediate ROI - or return on investment. Not surprisingly, digital media -- especially online search, display, video, mobile and social media - have stronger expectations among the media buyers surveyed. "If the ad market hits a soft patch, this trend will likely become more apparent as buyers will likely increase their investment in higher ROI media, at the expense of print and radio," the securities analysts wrote in their report, which projects that online media will continue to lead U.S. advertising growth for the foreseeable future. "We remain bullish on the fundamentals of Internet media, and continue to believe that ad dollars will follow consumers as they migrate to new platforms, resulting in another year of robust growth in 2011 once again," the analysts wrote, noting that much of digital media's gains will be coming from ad budget share gains from print media, and adding that a "strong e-commerce market continues to drive investment in online advertising." The consensus of the media buyers surveyed is that "online/digital" ad budgets will rise 7.0% in the U.S. in 2011, a more modest view than Deutsche Bank's own prediction of 18% growth for digital media spending this year, but still the healthiest of the major media, according to the buyers. TV (+5.1%) and outdoor (+2.5%) are the only other major media expected to reap gains, yielding an overall gain of 3.2% among the major U.S. media for 2011. That is in line with recent outlook revisions issued by Interpublic, WPP, Publicis and Aegis. While online and digital media remain the catalysts for overall growth, a recent survey of advertisers and media buyers released by Advertiser Perceptions Inc. indicates the relative optimism of digital media may be losing some steam too. While API's Spring 2011 Advertiser Optimism report the highest level of optimism - the difference between those indicating plans to increase or decrease advertising budgets - since the global economic crisis hit, the relative contribution of digital media appears to be ebbing, though it remains considerably higher than analogue media. The digital media average dropped 11 optimism points from API's Fall 2010 survey to a 48, and mobile fell five points to a 61. Between search and display, API found slightly greater erosion in the optimism for display ad spending, which eroded 13 points to a 46, while search declined 11 points to a 47. Even the vaunted social media category, as reflected by advertiser optimism to spend on Facebook, has declined on a relative basis, dropping 12 points to a 58 from last Fall to this Spring. On a positive note, elements of the online display marketplace - especially ad networks/exchanges (+6 points to 26), demand-side platforms (+4 points to 16), and portals (+6 points to 11) - are showing gains in optimism. Though agency trading desks, low to begin with, have dropped two points to an optimism index of only two points.
Rupert Murdoch is cleaning house in an attempt to control the widening phone-hacking scandal at News Corp.'s British newspaper division, News International. Friday brought the resignations (probably with Murdoch's prodding) of Les Hinton, CEO of Dow Jones and publisher of The Wall Street Journal, who ran the U.K. newspapers during the period some of the phone-hacking occurred, and Rebekah Brooks, the embattled current chief of News International. Hinton, a close associate of Murdoch's, had been brought in to oversee Dow Jones shortly after News Corp. completed the high-profile acquisition in 2007. He appears to be the first casualty of the phone-hacking scandal on this side of the Atlantic, following multiple resignations, arrests, and the closing of the 168-year-old News of the World in the U.K. In his resignation letter to Murdoch, Hinton wrote: "That I was ignorant of what apparently happened is irrelevant and in the circumstances, I feel it is proper for me to resign from News Corp, and apologize to those hurt by the actions of the News of the World." While Hinton denied any knowledge of wrongdoing during his tenure at News International, his sudden resignation -- coming a day after the FBI opened a criminal probe into News Corp. -- suggests the scandal may develop an American dimension as well. On Thursday a source with the FBI told reporters the Bureau was investigating allegations that NOTW hacked into the voice mails of victims of the 9/11 terrorist attacks and their family members. The FBI's New York field office launched the criminal probe in response to letters from members of Congress and after consulting with the U.S. Attorney's Office in New York. On Wednesday, a letter from U.S. Representative Peter T. King (R-NY) to FBI Director Robert S. Mueller was circulated to the press, reading in part: "If these allegations are proven true, the conduct would merit felony charges for attempting to violate various federal statutes related to corruption of public officials and prohibitions against wiretapping. Any person found guilty of this purported conduct should receive the harshest sanctions available under law." Also on Wednesday, Sen. Jay Rockefeller, D-W.V., called for a new investigation into the practices of the shuttered tabloid -- and possibly other News Corp. properties -- here in the United States. In an official statement, Rockefeller explained: "I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans. If they did, the consequences will be severe."
Internet video ads keep growing. Some 5.3 billion video ads were viewed in June -- 15% more than in May which had 4.6 billion, per comScore Video Metrix. Video online commercials reached 49.2% of the U.S. population in June, up from 45.4% in May. Total ad minutes climbed to 2.3 billion from 2.01 billion. Video ads per viewer rose to 38.8 from 33.7 a month before. Looking at the video ad networks, Tremor Media Video Network was first with 753 million ads (and in second place overall to Hulu, which had 1 billion). Other video ad networks: BrightRoll Video Network had 629 million. Specific Media was at 422 million, Undertone was at 322 million, and SpotXchange video ad network was at 282 million. Ad exchange Adap.tv bested all other exchanges at 678 million, according comScore. In terms of reach for the total U.S. population, Tremor Media was 44.3%, BrightRoll Video Network, 38.5% and Break Media, 37.6%. Video ads surveyed include streaming-video advertising only and other types of video monetization such as overlays, branded players, matching banner ads, home page ads, etc. The digital research company says time spent watching video ads totaled more than 2.2 billion minutes during the month, with Tremor Media Video Network delivering the longest duration of video ads -- 429 million minutes. Video ads reached 49% of the total U.S. population an average of 35.6 times during the month. Hulu had the highest frequency of video ads to its viewers with an average of 38.8 over the course of the month.
IBM has announced a new suite of cloud-based real-time analytics for digital marketers. With 64% of consumers making a first purchase because of a digital experience, IBM says it is important to understand online behavior -- and help marketers refine and alter their marketing plans. This move will be a part of IBM's Smarter Commerce efforts -- which resulted from the recent acquisition of analytic providers Coremetrics and Unica. They will build on IBM's existing digital analytics with more than 2,000 business brands. For example, this new analytic software will allow businesses to evaluate Facebook or Twitter activity. It offers customers tailored promotions delivered to their mobile devices on the fly -- as well as letting businesses fine-tune digital-marketing programs. "We're seeing increasing client demand for a single source of truth in understanding customer online behavior and buying trends as businesses strive to identify and seize new revenue streams," stated Yuchun Lee, vice president and general manager, IBM Enterprise Marketing Management. The new software will enable marketers to perform advanced segmentation and automate marketing execution based on multichannel data, including offline data sources, and deliver real-time product recommendations for all online channels, including social, mobile, email and display ads. In addition, it provides testing capabilities to help search engine marketers compare pairs of search terms to determine the most cost-effective terms and associated ads. It also incorporates best practice key performance indicators and corresponding industry-specific benchmarks. IBM says the new tech supports deep analysis into how customers interact with a brand over time and determines when each marketing program is the most effective.
The U.S. Government Accountability Office says there must be more oversight for kids' programming, especially for cable and satellite broadcasters. While there have been over 7,000 self-reported violations of the Children's Television Act, mostly pertaining to advertising issues -- and resulting in $3 million in fines -- no cable or satellite providers have reported any violations, according to a recent report by the federal agency. Apart from this, the GAO says only seven cable and satellite kids' programming/advertising incidents have been found by the Federal Communications Commission's oversight efforts -- even though cable and satellite companies air significantly more kids' programming than broadcasters. The original Children's Television Act -- initiated in 1990 -- focused on TV stations. But cable systems were also required to keep some advertising records -- just like TV stations -- so that regulators such as the FCC could monitor their behavior. But TV stations are not immune to criticism from the report. Advertising issues pertaining to all kids' programming have been "uneven," according to the GAO. Per the Children's TV Act, no more than 10.5 minutes of commercial time per hour are allowed on weekends, and 12 minutes per hour during the week. The GAO recommends more voluntary guidelines for assessing the educational value of children's programming, as well as starting up other messaging efforts to inform parents about core children's programming. The GAO says parents believe requirements governing such programming should be more stringent than current rules; they also see broadcast station involvement as a potential conflict of interest. The report says the FCC has reached agreement with media stakeholders to resolve issues related to the Children's Television Act and the development of the voluntary television rating system. In 2006, the FCC added in restrictions for advertising on kid-targeted Internet Web sites.
Burger King Corp. has a new U.S. media agency of record: Publicis Groupe's Starcom. The fast-food chain has confirmed that it made the appointment this week, without a formal review. Burger King spends about $300 million on ads in the U.S., per sources. The client's previous media agency of record was WPP's Mindshare. The client issued a statement indicating that the two parties made a "mutual" decision to part ways. But other sources said Mindshare resigned the account back in June over a number of issues, leaving BKC little choice but to reach out to another shop quickly to handle its massive account. Starcom has a leg up in the review; it was already on the roster through its multicultural unit Tapestry, which has handled the client's multicultural assignment since 2008. The Mindshare-BKC relationship started to "head south quickly" this year in the wake of the 2010 $3.2 billion acquisition of the quick service restaurant chain by venture capital firm 3G Capital, per sources. Plus, BKC has been rejiggering its agency lineup over the past several months in the wake of the ownership change, which was followed by several high-level changes in its corporate and marketing management ranks, including the departure of global COO Natalia Franco. The chain is widely perceived as struggling -- last year earnings dipped 7% on a 1% revenue slide. In March, it launched a formal review for a new creative agency. The incumbent, Crispin Porter + Bogusky, resigned the account in lieu of defending it, per usual practice. Last Month BKC tapped Mcgarrybowen to replace Crispin. In addition to creative, CP+B also handled media-planning duties. Mindshare, which had handled buying chores up to that point, took on the planning duties after the CP+B departure. That's when things really started to go downhill between the agency and the client. "They just couldn't see eye to eye on future media marketing strategy," said one source. "The agency felt the new owners just didn't get what kind of marketing effort it would take to get the company on track." The company rejected a number of strategic planning initiatives that Mindshare offered, and negotiations on planning fees "hit a brick wall," said a source. In a statement, the burger chain said: "BKC and Mindshare, the company's media agency of record, have mutually decided to end their business relationship. BKC appreciates the partnership with Mindshare over the past seven years."
Comedy Central will pump "South Park's" 15th season using a mass attraction at Comic-Con later this month. It includes a confessional booth that offers visitors a chance to appear on the network; this fall, there will be a line of "Cheesy Poofs" available at Wal-Mart. A "Voice of the Fan" confessional booth will be part of an "ultimate fan experience" set-up at the annual San Diego gathering, where fans will be interviewed about their favorite moments and asked to offer renditions of the "Cheesy Poof" song or show theme, with some selections possibly to be shown on the network, SouthParkStudios.com or a commemorative DVD. The Comic-Con attraction will also have a museum featuring memorabilia such as original storyboards from early seasons of the animated hit and a chance to race Big Wheels. "South Park's" 15th go-round has been branded "The Year of the Fan." In the fall, a line of "Cheesy Poofs," the snack eaten by show characters, will be made by Frito-Lay and available at Wal-Mart. For a show that caused considerable controversy with its boundary-stretching content when it launched in August 1997, a promotion that includes PepsiCo and Wal-Mart is notable. Also this fall, a "South Park" documentary will air on Comedy Central with a portion offering a behind-the-scenes look at the making of an episode. The 15th season launched in April. The show is syndicated and airs in more than 30 languages.
Meredith Corp.'s Siempre Mujer is teaming up with CNN en Español in a new multimedia initiative geared to Hispanic women in the U.S., on the theme "Querer es poder" -- roughly translated as "where there's a will there's a way." The inspirational campaign, intended to encourage Latinas to pursue their dreams, is scheduled to kick off this fall. Drawing on the combined print, broadcast and digital assets of the two media partners, "Querer es poder" will highlight stories of Hispanic women overcoming obstacles as they struggle to achieve their ambitions. Siempre Mujer will carry in-depth profiles, while CNN en Español's daily program "Notimujer" will feature weekly segments with host Mercedes Soler and Siempre Mujer editor-in-chief Maria Cristina Marrero. Soler and Marrero will touch on a host of lifestyle topics, including health, wellness, beauty, fashion, finance, business, travel and relationships. CNN en Español will also conduct Skype interviews with the profile subjects and answer viewer questions. The two entities will also co-host a branded "Querer es poder" channel on SiempreMujer.com, where they will recruit new profile subjects, along with a social media presence on Facebook and Twitter. Touting the wide reach of the media partners, Enedina Vega, publisher for Meredith Hispanic Ventures, stated: "This collaboration will enable Siempre Mujer, which reaches over 3 million homes, and CNN en Español, distributed in 5 million homes in the U.S. and 26 million in Latin America, to provide marketers with an unprecedented opportunity to reach Latinas across multiple platforms." According to the American Community Survey, there are now more than 45.4 million Hispanics living in the U.S., representing 14.6% of the total population of 308 million. That's twice the number living in the U.S. two decades ago. If current trends continue, the number of U.S. Hispanics will triple to roughly 130 million by 2050, when they will make up one-third of the total population. Over the last half-decade, Hispanic buying power has also steadily increased, from an estimated $800 billion in 2006 to $850 billion in 2007, $950 billion in 2008, and $1 trillion in 2009. It is on course to reach $1.3 trillion by 2013 and $1.5 trillion by 2015, according to projections from the Selig Center for Economic Growth at the University of Georgia.
As if the stakes for launching a cable network weren't high enough, they've just been raised higher for Oprah Winfrey. Plagued by a series of missteps and mediocre ratings, OWN has struggled to find a CEO who could launch a new network while defining the next generation of the Oprah brand. With the announcement that Winfrey will "dedicate my full creative energy and focus as the full-time CEO of OWN," in addition to her current role as chairwoman, it appears OWN realized there was only one person with the vision and intuitive understanding of the brand to guide it forward. As the next chapter in Oprah's brand story, OWN has had a bit of a rocky start. Haphazard programming and uninspired hosts leaves OWN largely undifferentiated from the ubiquitous non-scripted, confessional, celebrity-driven reality TV. But what's puzzling about OWN's programming is that while fans can recognize what is "O"-worthy content and what is not, it appears that Oprah's employees can't seem to see what the audience sees. The result: they've created a network that doesn't feel all that much like Oprah. Oprah has built one of the most powerful and beloved brands on the planet by surrounding herself with a strong team of talented brand stewards and innovators. However, to create an iconic network brand like ESPN, MTV or HBO, the entire OWN organization must be empowered in their understanding of the Oprah brand. They must be able to recognize programming and TV personalities that align with her promise and, of equal importance, guard against those that detract from her brand, values and voice. Oprah shattered the glass wall that had historically divided audience and host by building a relationship with her fans rooted in friendship and learning. Oprah often says, "At my core, I'm a teacher, masquerading as a talk show host." Now is the time for her to bring those intrinsic qualities to her own organization -- beyond her core team -- and teach them what her brand stands for and where it is going. If she is unable to do this and her brand is not widely understood within the organization, it will lead to disorienting and disappointing experiences for the audience. For years, Oprah and her team have recognized how precious her brand is and rarely made a misstep in the management of her image. However, all evidence indicates that they have only scratched the surface of answering the fundamental questions -- the what, how and why of the Oprah brand in the context of the OWN network. If they can authentically answer those questions, they'll have a script that not only keeps OWN true to the Oprah legacy, but also sets the stage for the "next-generation" of the Oprah brand with a future of continued unmatched relevance to her audiences. One of our favorite Oprah quotes is, "The thing about me that I really admire about myself is I know where my lane is, and I know how to stay in my lane." That discipline and understanding of herself has helped her to stay true to her aesthetic and in touch with her brand for 25 years. However, as she transitions from a blockbuster show to a network and to a paid content cable model, the Oprah brand must evolve beyond the past and the present. The understanding of the brand cannot live solely with a few key players. Fans and viewers won't wait forever for Oprah and the OWN team to get it right. Instead, Oprah must forge a new future, shake things up and bring the world a worthy sequel to her phenomenally successful first-quarter century.