AOL Radio will now be powered by Slacker, including interactive features and custom artist stations. The arrangement finalizes AOL Radio’s earlier move to replace CBS Radio with Slacker as its main interactive audio partner. However, AOL Radio will still feature approximately 230 radio stations programmed by professional music curators, including DJs and music critics, along with new stations including ESPN Radio and ABC News. As part of its makeover, the new AOL Radio is getting a new interface, displaying album information for audio selections, plus the 20 most-played songs in the relevant genre. As with other Slacker-powered platforms, listeners can skip up to six songs per hour. AOL Radio is also reducing the amount of audio advertising heard during digital airplay by half, with more emphasis on less intrusive display advertising that appears alongside the AOL Radio player. Total audio advertising will be limited to about three minutes per hour. Beginning next month, AOL Radio is also introducing two subscription options offering more customized music programming, courtesy of its partnership with Slacker. The first, Radio Plus, will be totally advertising-free -- with a variety of interactive audio options, including unlimited song skipping, lyrics on demand, and offline playback mode (for listening on mobile devices outside mobile signal range). Radio Plus will cost $3.99 per month. The second, Premium Radio, will offer all the same features, along with on-demand listening and custom playlists for $9.99 per month. An updated version of the AOL Radio app should be available for download for iPad, iPhone, and iPod from the Apple App Store in the next week or so. AOL Radio plans to introduce an Android app in the near future.
The overall media economy is still weak -- as well as media mergers and acquisitions activity. New York-based investment banking firm Berkery Noyes says third-quarter activity dropped 23% to $10.4 billion from $13.5 billion in the third quarter of 2010 -- although there were more transactions: 348 versus 317. The largest deal was Bloomberg L.P.’s acquisition of BNA for $963 million. The first quarter of 2011 has proven the busiest to date: 399 deals with a transaction volume of $20.7 billion. The number of third-quarter deals has grown 14% versus the second quarter -- to 348 from 305. But the total dollar volume has declined $10.4 billion from $13.5 billion. Cash-flow multiples on media deals in the third quarter are now at 14.5 cash flow -- earnings before interest, taxes, depreciation and amortization (EBITDA). This has grown nearly 60% versus the second quarter's 9.2 number. It comes short of the 16.1 cash-flow multiple on deals in the fourth quarter of 2010. Revenue selling multiples remained steady in the third quarter, at 2.2 times revenues. The investment banker study says this is highest overall in the last seven quarters. The biggest mover of recent media activity continues to be advertising holding company Publicis Groupe SA, which made 17 deals since the start of 2011. The most recent acquisitions are Schwartz Communications, one of the largest independent PR agencies, and Brazil-based advertising agency DPZ. Berkery Noyes notes that Publicis has made three big deals in Brazil this year.
Publicis Groupe posted a 7.5% increase in third-quarter revenues to $1.95 billion, with organic revenue growth (which excludes acquisitions and divestitures) of 6.4%. By comparison, organic growth in the same period a year ago was 9.2%. For the first nine months of the year, revenues were $5.78 billion, up 6.7% from a year ago. Organic growth for the nine-month period was 6.9%, slightly higher than 6.6% achieved through the first nine months of 2010. The Paris-based agency holding company did not disclose profits for the third quarter or the first nine months. For the first time, the company said its Specialized Agencies and Marketing Services division -- including direct marketing, PR, health care and other units as well as all digital operations -- accounted for 50% of the company’s revenue, up 2 percentage points from the first nine months of 2010. Digital revenues accounted for just over 30% of total revenue for the first three quarters, up from 28.7% during the same period last year. Advertising made up 31% of the company’s revenues in the period, down from 33% a year ago, while the share of media-related revenues remained flat at 19%. Publicis Groupe CEO Maurice Levy stated that the company was “well on the way” to meeting the growth goals that the firm set for itself this year in both digital and emerging markets. He described those areas as the firm’s “two strategic pillars for growth.” At 30% of revenues, the digital goal has already been reached, Levy said. Through the first nine months, emerging markets account for 23.7%, close to the 25% objective, said Levy. “We will be intensifying our efforts at development and investment given the key interest of these sectors for our clients,” he said. Levy referred to the “economic slowdown” indicated by numerous downgraded forecasts in ad spending growth for 2011, and cautioned that “much of the decrease may occur in the fourth quarter.” That said, Levy indicated the company is standing by its target of “better than market growth for 2011 overall.” Unless the company has a terrible fourth quarter, that target should be easily met. The company is now forecasting just 3.6% ad-spend growth for the year, while its own revenue growth through the first three quarters is nearly double that. By region, the company has posted its strongest revenue growth in Latin America, which is up 8.5% through the first nine months of 2011. Europe posted a strong 8.2% increase, while growth in North America reached 6.3%. Publicis Groupe said it won $4.1 billion in net new business through September, including Burger King and Esurance in the U.S. The company cited 10 “main acquisitions” it has made through 2011 so far, including digital firm Rosetta and social network shop Big Fuel, both based in the U.S.
Popular Science Receives First ABC Consolidated Media Report The Audit Bureau of Circulations has released its first Consolidated Media Report, a customizable report for U.S. and Canadian consumer magazines to present their total brand with a range of print, digital and mobile products. The first CMR to be released is for Bonnier’s Popular Science, covering the flagship magazine, interactive digital editions, email newsletters, Web sites and mobile apps. ABC’s CMR combines these print and digital distribution channels on one report. This includes total average circulation for Popular Science; Popular Science+ interactive iPad tablet edition circulation; Web site page views and unique visitors; Twitter and Facebook users; e-newsletter deliveries; and iPhone app page views. Mike Lavery, ABC’s president and managing director, called the CMR "the future for the magazine industry." On the media buying side, George Janson, managing partner and director of print at Group M, stated: “ABC’s CMR helps open our eyes to platforms we might not have thought about from a particular partner. At Group M, we’re excited about how magazines are evolving and extending their brands beyond the page." Better Homes and Gardens Reports Record Halloween Traffic With the annual eruption of candy, ghosts, and pumpkins just around the corner, Better Homes and Gardens reports that it is receiving a record level of Halloween-related traffic, engagement, search and activity across its Web site and digital destinations. High-trending areas include indoor Halloween decorations, pumpkin carving, plus other pumpkin decorating ideas, and Halloween recipes. Meredith Corp. sister pub Parents’s “Carve a Pumpkin” smartphone app has generated 558,000+ downloads, a record number for the digital extension. Gayle Butler, editor in chief of Better Homes and Gardens, noted that “BHG.com’s Holiday and Entertaining survey of over 25,000 women shows that almost 50% start their planning for Halloween a month or more in advance.” American Photo Relaunches Web SiteAmerican Photo announced the launch of AmericanPhotoMag.com, a new and completely redesigned site intended not just for photographers, but anyone seeking cultural literacy in photography. The Web site launch follows an editorial redesign last year and the appointment of top editor Scott Alexander this year. The new AmericanPhotoMag.com includes portfolio galleries showcasing the work of both emerging photographers and established names in fine art and photojournalism; features on how photography is portraying and shaping contemporary society; guides to Internet resources on photography; and highlights from new gallery and museum shows from around the world. TVGuide.com Debuts Social Spotlight TVGuide.com unveiled Social Spotlight, the latest addition to TVGuide.com’s portfolio of social TV offerings. Featured on the TVGuide.com home page, Social Spotlight provides visitors with a guide to conversations and forums about popular TV shows on Facebook, Twitter, and TVGuide.com itself. The new Social Spotlight feature launched with sponsorship by ION Television’s Flashpoint series. ION’s sponsorship marks the 50th social sponsored integration on TVGuide.com since the site launched social TV check-in in October 2010. MPA Plans New Social Media Conference The Magazine Publishers of America is committed to keeping its members up to date on the rapidly changing digital landscape, and in keeping with that mission, the organization is planning a new conference on social media. MPA Digital: Social Media, will feature a keynote address by Andy Mitchell from Facebook’s Platform Partnership team, along with a host of experts delivering practical advice on driving additional revenue and deepening audience engagement through social media. Panels include “Ka-Ching! How Social Media Drives More Advertising Revenue,” “The Seven Deadly Sins of Editorial Tweeting (Be a Winner—not a Sinner!),” and “Social Media Experts at Magazine Brands: Nerds or Your Next Boss?” The conference organizers also promise presentations of “provocative” case studies, best practices, and other useful tips to help publishers leverage social media efforts. The conference is scheduled for Dec. 7 at the Time & Life Building in New York City.
Showing that the annual Consumer Electronics Show (CES) continues to embrace entertainment along with spiffy hardware, Spike has signed a partnership deal with show organizers, where it will offer hours of live coverage. Spike is pegged as the “official entertainment television partner.” NBCUniversal has served as “official broadcast partner” and had a major presence on the convention floor, with top talent broadcasting from there. The Spike coverage will be tabbed “CES All Access Live,” with 12-plus hours of programming made available on TV, along with online and on other platforms. Spike will begin coverage from its own studio January 10 in Las Vegas. It will highlight some of the new gadgets, game consoles and other technology with particular appeal to a male audience. The cabler says it will unveil new devices and video games exclusively, as well as offer some demonstrations and access to a VIP event at a Vegas nightclub. Jon Slusser, a senior vice president at Spike, stated: "Cultural events like CES will offer our viewers a first look at the things they'll be playing, watching and talking about in the next year.” The Spike coverage will also be available on GameTrailers.com, Facebook and huge video screens in Times Square. “All Access” seeks to link pop culture and aspects of technology. Spike will offer “All Access” live programming from two other events next year. In recent years, the CES show has welcomed entertainment executives, as there has been an acknowledgment that no matter how innovative hardware is, it needs content to shine.
Cable operators aren't the only ones eyeing slowing growth of video service businesses: Some of the upstart telco TV businesses have hit a bit of a lull. AT&T only added 176,00 U-verse subscribers in the third quarter. That is down from the 236,000 additions in the third quarter of 2010, and less than 202,000 in the second quarter of this year. U-Verse now has 3.6 million U.S. subscribers for its TV/video service. AT&T currently has access to more than 30 million U.S homes. But overall, U-Verse's revenue continues to rise -- a 55% gain to $1.7 billion in the third quarter versus the same time period of a year ago. U-verse has helped lift up the average consumer monthly price for its "triple-play" group of services -- phone, video, and Internet -- rising nearly 6% to $170 a month. AT&T wireless subscribers grew 2.1 million to reach 100.7 million. While the company added 504,000 U-verse High Speed Internet subscribers to reach a total of 4.6 million. Traditional phone service dropped 1.2 million recently to stand at 40.1 million by the end of September. Total wireless revenue -- including equipment revenue -- gained 2.8% to $15.6 billion. Overall, for the third quarter, AT&T revenue slipped 0.3% to $31.5 billion, with net income down almost 70% to $3.6 billion.
Maybe John Wanamaker’s notion about advertising’s lack of effectiveness still applies. The department store magnate famously asserted, about 100 years ago, that half the money he spent on advertising was wasted --he just didn’t know which half. A new survey out of the UK indicates that most firms still don't try to figure it out. The survey, from BskyB, found that while most marketers believe they need to know the proportion of sales attributable to individual marketing channels, most firms don't make efforts to track all the channels they use. That's despite all the headlines about companies being obsessed with return on investment from the marketing dollars they spend. The survey found that only 25% of those polled said they try to attribute sales to all of the marketing channels they deploy, even though 97% said they believe that doing so is important. Ninety percent said they track at least one channel. The survey, conducted for BskyB by research firm Dynamic Markets, polled managers at 100 major marketers in the UK across a range of sectors, including retail, financial services, utilities, telecommications, transportation and travel. Most of those surveyed -- 94% -- cited difficulties with the attribution process. And nearly 40% admitted that their companies didn’t know which of their marketing channels customers were exposed to. Not so surprisingly, 88% of those polled indicate that their firms have trouble determining which channel actually prompted a customer to make a purchase. And 50% admitted not knowing which channel was most influential in triggering a transaction. Many of the respondents said the media vendors shared at least part of the blame for the lack of clarity, with 46% saying that too many channels “make the task of tracking unreliable." "Due to the complexities of the customer journey today in a cross-channel, multi-brand environment, there is an ever-increasing struggle to determine not only which channel finally incentivized a customer to buy, but also how the customer travelled across them,” the report states. The survey found that all media present some attribution challenges, but some are tougher than others. Half of the respondents said they believe it is difficult to directly attribute sales to TV advertising. And close to half felt the same way about outdoor (49%), print ads (47%) and PR (47%). Slightly fewer of the respondents found digital channels to be as daunting on the ROI front, although 42% said that both social and email marketing are difficult to track. About one-third of the marketers in the survey thought online marketing generally presented significant attribution challenges. The most common obstacle, per the study, is a lack of effective tracking tools. Sixty-four percent cited a lack of technology available to track and measure channels, leaving marketers to essentially make educated guesses based on “less reliable qualitative methods,” the study stated.
Reading the trade press over the past six months, similar story lines frequently appear. A few themes that make everybody’s top 10 list are digital, addressable, cross screen video, viewer engagement, improved measurement, content creation, micro-targeting and ROI. Pick one of the above, and significant progress has been made resolving the puzzles associated with these themes. Agencies have changed their organization structures and internal processes to accommodate the ever-evolving world of media. As a local TV and radio expert, I’m intrigued by the enormous change embraced by my colleagues in other environments. Pick a medium, and there has been seismic change. Tablets have forever changed the print medium. Digital signage has changed the out-of home industry. Radio has been revolutionized by platforms like Pandora and Spotify. Network and cable TV are now simply referred to as “video." And Addressable TV is the new frontier.So what is new and different in the spot TV industry? To stay relevant with advertisers, it is important that spot TV keeps pace with the changes in other media. Are we about to go through yet another year where the only headlines about spot TV are the size of political budgets? Or like other media, are we ready to take a leap forward and address some of the common themes of improved measurement, micro-targeting and viewer engagement? I believe that we already have the ability to be part of the larger conversation. How? By taking an honest look at the viewership data available from set-top-box data. An opportunity of particular interest is the set-top-box data provided by Rentrak. Currently, viewer data is available for all 211 DMAs, allowing stations to compete with other highly targeted and granularly measured media. Let’s cut right to the chase: What is it about opportunities like Rentrak that get the attention of advertisers, agency planners, and media buyers? Easy. The same things that are being talked about by the planners, buyers and sellers of the other media. Here are a few:Improved Measurement Rentrak uses a database collected from over 17 million homes. As a point of reference, Rentrak’s data comes from almost 200,000 homes in a market the size of Chicago and from over 40,000 homes in a market the size of Columbus, Ohio. Meanwhile, Nielsen’s audience data comes from about 820 homes in Chicago and about 515 homes in Columbus. Intuitively, the larger base translates to more reliable and more stable data. And Rentrak is a database, not a small sample that is then projected to represent the whole. The large database results in audience ratings that are more reliable and more stable. Micro-Targeting The granularity of Rentrak data allows us to identify viewing patterns within a subgeography, rather than only by DMA. DMA ratings are fine if a client’s product is distributed and available everywhere within a DMA. But for a retailer with limited store locations or a smaller trading area, it is important to understand what people watch in that specific geography. This data can lead media buyers to make different purchase decisions. Rather than buying the “boomer” station that dominates across the entire DMA, buyers can make more efficient, targeted media buys.Viewer EngagementRentrak provides users with second-by-second viewing detail, enhancing the ability to understand viewer involvement and patterns in local markets. While the spot television industry continues to debate which Nielsen program rating is most representative of commercial viewing, the Rentrak data already provides us with insight on a topic that buyers and sellers have been debating for years.A Smarter CurrencyHere is what I like most about Rentrak, and what is truly a quantum leap forward. Rentrak can combine their viewership data with any third-party data source, creating a custom currency. The age-old media metric is a currency based on demographic CPM, or in spot, a demo CPP. But smart, sophisticated marketers don’t really think in demo CPPs. They think in terms of their customers and their competitions’ customers. Rentrak allows us to use our clients’ customer database or any third-party database and completely rethink the ROI of buying spot television. For a car manufacturer, why target and buy adults 25-54 when we can now target and buy on “brand loyal current owners who have not purchased a new vehicle in over three years”? Call it better targeting, addressability or improved ROI… it’s just plain smart. So what’s the downside? The traditionalists in the spot television industry continue to look for flaws in the Rentrak or any method of advanced data rather than embracing the bright spots. They cite that Rentrak is in cable homes, not broadcast -- potentially creating misrepresentation of DMA viewing. However, the Rentrak database is 200 times larger than Nielsen’s sample in some markets. And haven’t we worried for years about the inherent bounce and wobble in Nielsen numbers anyway? Another common criticism is that the Rentrak demo ratings are still in development. However, to my currency point above, demos are going to fall by the wayside. At this point, I’ll take progress over perfection. At Starcom, we have been working with Rentrak data since early 2010. Although the data is not universally used by the station community at this point, we continue to gain insights and are making more informed buying decisions for our clients. It is exciting to be part of the dynamic changes impacting the media industry -- particularly the changes in the spot TV business. Let’s make this a new season for progress.
While Tibetan monks increasingly light themselves on fire to protest Chinese rule, I wandered down to New York's Zuccotti Park to see what the protesters who are not even thinking about self-immolation are so pissed about (other than a vague notion that big banks and Wall Street screw-ups have contributed to the shitty economy -- and, well, something needs to be done!). It was kind of like Woodstock. Without the mud. Without the bands. Without the lake. Without the traffic. Considerably less acid, but about the same number of peace signs. Lots more electronics. About the same number of guys just there to get high and laid (not necessarily in that order). And nearly 24/7 media coverage. One of the challenges of understanding the collective malaise is finding a consensus about what the problems are -- and, more scarcely, how to fix them. Nevertheless, I did capture a few of the complaints as I cut into the free food line. "I just can't sleep thinking about the arbitrage at work in the whole ad exchange, DSP, SSP ecosystem," said someone dressed like Janis Joplin. "I can't help but feel that clients are not getting the best price with so many intermediaries taking a piece of the action, however small. Then there is channel conflict, price erosion, and advertiser quality to fret over." "Not to mention impression quality, which is supposed to be an algorithmic prediction of how likely the user is to take the action desired by that buyer on that impression, relative to all other impressions, but doesn’t always produce the forecasted action," chimed in a homeless guy who says he dropped out of high school 25 years ago. "This is a great country, but I swear to God, I don't understand who would sell or buy impressions that are mostly on long-tail sites, below the fold, or deep in the frequency curve. Have we really fallen this far?" added a recent college grad who can't find work in her chosen field: fashion. “I have just one question,” said a war veteran sporting that cred-establishing far-beyond-the-horizon look in his eyes. "If I were to give you an impression and all its associated characteristics, could you tell me the predicted user action rate (and hence the impression quality), as well as the correct buyer value, market value, and relative value? I think we all know the answer to that one, man." Overhearing that, a nice kid from Brooklyn chimed in: "Can you really believe a study that found a 24% lift in intent to recommend a product after consumers had been exposed to online display advertising about it? And this supposedly was still true, even when consumers didn't click on the ad? They must think we were born yesterday!!" "Really, how stupid do the 1 percenters think we are, trying to tell us that smart algorithms can control contextual relevance at the page level, including attributes such as channel, content, and sentiment?" added that girl who doesn't even know who Janis Joplin was, but dresses like her. "Are we just supposed to stand here while people say, 'When the logistics of the campaign are automated, marketing professionals can spend more time on the strategy and creative ideas that lead to rich brand experiences,' without even challenging it or asking for some sort of proof?" I must say it was invigorating to see the youth of America focused on the critical issues that will shape our world in the coming decade or so. Before I left, I dropped $5 in the contribution jar and wished the occupiers the very best of luck. High-fives all around.