The value of broadcast TV companies, as well as integrated media companies that include broadcast assets, have lagged the broader stock market gains in the last two years -- which confuses media analyst M.C. Alcamo & Co. Cash-flow selling multiples -- earnings before interest, taxes, depreciation, and amortization -- have dropped during the last two years, according to the media investment banker. Investors remain cautious about broadcast -- despite rising profitability, improved credit profiles, an excellent outlook for 2012 and audience trends all pointed in the right direction," stated Michael Alcamo, president of M.C. Alcamo. Alcamo says this sluggishness is a mystery because usually media companies outperform other companies in a rising stock market. For those pure-play broadcast companies -- those with TV and radio stations assets -- the average cash flow multiple at the end of January 2012 was 7.3, down some 32% from the 10.7 number two years ago. For those integrated media companies -- those with TV, radio and nonbroadcast media assets, such as print, outdoor, for example -- the situation was worse, averaging a 6.0 multiple, down 25% from 8.0 in January 2010. Alcamo feels investors may be putting a lower value on those companies because many have poor-performing print and newspaper assets. Looking at stock prices, the S&P 500 index, by the end of January 2012, was trading at 80% of its 52-week range. By way of comparison, the pure-play companies were trading at 64% of their 52-week range; the integrated media companies were at 61%. The six pure-play broadcasters include: Belo Corp., Fisher Communications, Sinclair Broadcast Group, Grey Television, LIN Television, and Nexstar Communications. The five integrated media companies are Meredith Corp, Journal Communications, Gannett Company, E.W. Scripps, and Media General.
The Super Bowl brings all types of viewers to its annual Sunday party -- but increasingly, this big TV event is more wealthy, female, and diverse. Last year's game pulled in 30% of viewers with a household income of $100,000 or more -- that's double the number almost a decade before in the 2002 game, per Nielsen Company. Nielsen also says more Hispanic-Americans and African-Americans are watching the game -- up two percentage points each to 9% and 11%, respectively. in 2011. There are also more women viewers -- although men still make up the majority. Women moved up 3 percentage points to 46%, with men at 54%. Last year, 51 million viewers to the Super Bowl were female. By comparison, the Oscars last year averaged 37.9 million total viewers. Compared to many other TV shows, the Super Bowl has gained in total audience since 2002 -- when the game recorded 87 million viewers -- and 90.7 million in 2006. Last year's game grew in audience to a record 111.5 million -- the highest single TV event in U.S. history. This came after the record results for the 2007 Super Bowl, which featured the New York Giants' thrilling victory over the New England Patriots. The two teams are playing again in this Sunday's game. A quarter of the Super Bowl's audience is comprised of 35- to-49-year-olds -- the biggest age group. This is down from a 28% share five years ago. Twenty-three percent are 18 to 34, while 22% are 50 to 60 years of age, 16% are ages 2 to 11, and 15% are age 65 and older. The Super Bowl audience is getting slightly older, but its median age is still in the low 40s. Last year's game posted a 42.5 median age.
WPP's Millward Brown is adding facial recognition technology to its commercial testing service to better assess the emotional impact of ads, the company has confirmed. The ad tester has entered a partnership with Affectiva, which has developed a facial recognition analysis technology called Affdex. Through the partnership, Affdex will be integrated into Millward’s Link ad-copy evaluation system. The companies said they’ve begun testing the integrated system in multiple international markets. Because it measures moment-by-moment, nonverbal communication, it also works across cultures and geographical boundaries, the firms said. “Describing feeling in detail is never easy,” stated Graham Page, executive vice president of Millward’s neuroscience practice. “By adding facial expression analysis to Link, brand owners can get at the emotional response that people might not be able to articulate in surveys.” The companies have been working together since last year when Millward parent Kantar made an investment in Affectiva as part of a nearly $6 million round of financing led by Kantar and investor group Myrian Capital. The funding was used, in part, to accelerate the development of the Affdex system. "Marketers recognize that emotion drives brand loyalty and purchase decisions,” stated Dave Berman, CEO of Affectiva. “Affdex addresses an enormously challenging problem, understanding how people really feel in order to create products or experiences that are engaging and drive the right response." Affectiva was founded in 2009 by members of the MIT Media Lab, including co-founders Rosalind Picard, chairman and chief scientist at the firm, and Rana el Kaliouby, chief technology officer. Other investors in the company include the National Science Foundation and the Peder Sager Wallenberg Charitable Trust. Millward Brown has been one of the leading companies in the ad-testing space for over 30 years. After years of experimentation, it formally launched a neuroscience practice in 2010 to offer clients more advanced testing techniques, including facial recognition systems and methods to measure other physical and emotional responses to ads, such as heightened brain wave activity or body temperature in response to ads.
The radio business had another rough quarter at the end of 2011, judging by some early results from radio groups. Beasley Broadcasting said its total revenues declined 6.8% to $25.2 million in the fourth quarter of 2011. Operating income decreased 10.5% to $6.9 million, and net income was basically flat, with a 1.7% increase to $3.39 million. Beasley Broadcasting CEO George Beasley stated: “Our fourth quarter revenue decline reflects a combination of weak overall national spending in our markets and several unique national advertising issues that we have addressed or which were essentially one time in nature." He noted that approximately "one-third of the overall revenue decline relates to a reduction in political spending in a non-election year.” For the full year, Beasley’s total revenues were basically flat, edging down from $97.97 million to $97.7 million. Operating income increased 4.3% to $23.9 million, while net income for the year grew 26% to $10.1 million. While other big radio groups have yet to report their fourth-quarter results, earlier industry-wide results suggest that radio enjoyed modest growth in 2011 overall. According to the Radio Advertising Bureau, total ad revenues increased 3% in the first quarter, to $3.8 billion, then 2% in the second quarter, to $4.6 billion, and 2% in the third quarter, to $4.5 billion.
In a new report, watchdog group Public Citizen blasts school districts willing to sell advertising on school-related real estate from lockers to cafeteria trays, arguing that the lasting impact on children far outweighs any financial resources a school district may raise. Public Citizen reports that five out of the country’s 25 largest school districts offer some sort of student-facing ad programs and at least five others are considering them. The interest group suggests that no school district is able to raise more than a fraction of 1% percent of an operating budget from the ad programs. The interest group also criticizes an emerging rep firm-type system, where “middlemen” try to assemble packages so marketers can buy a presence in multiple school districts at once, but take a cut of up to 50% of the ad dollars. Public Citizen acknowledges it is difficult to verify exactly whether a school district allows advertising and how the “middlemen” work. The largest district that does offer ad opportunities is Houston, the country’s seventh-largest district. Dade County, Fla., the country’s fourth-largest, is negotiating with an ad firm to launch the process, Public Citizen says. (When the district sought help from a type of rep firm, it received proposals from 17 entities.) The suburban Washington district in Prince Georges County, Md. recently began placing Google AdSense ads on school Web sites, Public Citizen said, a;though some are for products that are education-related, such as tutoring services. According to the report, The Orange County, Fla. district says on its Web site there are advertising opportunities on school menus and chances to sponsor school plays, but a district representative told Public Citizen there are no “trapped environment” ads such as in classrooms or in buses. Noting that advertising for unhealthy food and drinks can lead to health issues, Public Citizen wrote that “widespread commercialism within schools also affects students’ capacity to learn and their personal development.” Public Citizen wrote that school districts with a significant minority population might be most at risk for a negative advertising effect on students, since they may be the most “cash-strapped” and likely to look to advertising as an alternate revenue stream. Some of the school ad programs Public Citizen cites are in athletic venues, which may generate less controversy than in other places and have been around for years.
While creative flexibility in presenting content is often cited as one of the main advantages of digital publishing platforms, digital magazine readers may not be so entranced by endless variety, judging by new data from GfK MRI’s iPanel, a special survey group composed of tablet and e-reader owners. GfK MRI also found substantial interest in e-commerce via digital magazines. Overall, 72% of tablet owners who read digital magazines on their devices in the last 30 days said they would prefer all digital magazines to be formatted in the same way, according to the iPanel results. 70% of tablet owners who read digital magazines on their devices said they would like to be able to buy items simply by clicking on ads in the digital magazines. Almost as many -- 67% -- said they would like to see ads in digital magazines that are personalized to address their interests. The GfK MRI iPanel survey uncovered a fair amount of ambiguity when it came to general sentiment towards digital magazines. On one hand, there’s a definite preference for digital magazines over print among tablet and e-reader owners, with 67% saying they’d rather read the electronic version over the paper version. Somewhat paradoxically, however, 65% said they consider reading paper magazines to be a “more satisfying” experience -- perhaps reflecting a perception that digital magazines are somehow still a “work in progress.” There were some other negative findings as well: 48% of tablet magazine readers say electronic magazines take too long to download, while 46% said they consider video (touted as a main feature of digital mags) to be “just a gimmick.” Furthermore, 43% said it is too difficult to find the magazines they want to read on their devices.
MetLife will join the line-up of first-time Super Bowl advertisers with a 30-second spot featuring the Peanuts characters, which have been central to its marketing for decades. The company has a relationship with one of the game’s teams with its name on the New York Giants home field. In addition to Snoopy, a screen shot on WashingtonPost.com indicates a slew of “classic cartoon characters” will also be featured. MetLife said it is using the big game to debut a new campaign with the tagline “MetLife: I Can Do This.” It was unclear whether that would mean the retirement of the decades-old “Get Met, It Pays” catch phrase. At the core of the campaign, from agency Crispin Porter + Bogusky, is messaging that people need insurance, but the process of securing it is difficult. CEO Steven Kandarian stated that it “highlights the steps we’ve taken to make the insurance-buying process simpler, faster, more affordable, and easier to understand.” Multiple spots will advance the campaign later in February, while a slew of social media efforts are being undertaken to support the Super Bowl appearance. MetLife’s sports involvement has also included its branded blimp.