Broadcast network TV ratings erosion could worsen next year, according to one prominent senior media agency executive. Rino Scanzoni, chief investment officer of WPP’s GroupM, says broadcast TV networks could face steeper viewership declines next year -- especially because networks will not be able to replicate viewership gains made last year. Broadcast network declines could hit 6% or 7% -- levels more common in recent years -- which would be greater than the 4% to 5% viewership erosion levels that networks witnessed this past season. “Broadcast had a relatively good year in prime time,” says Scanzoni, with Winter Olympics and World Cup programming lifting viewership. “Erosion will probably go back to mid-single digit levels.” Other dayparts helped broadcast last season. Specific improvements came from early morning daypart (from higher NBC and ABC programs) and late-night TV programming (soaring ratings from NBC’s “The Tonight Show with Jimmy Fallon.) “You had more ratings in broadcast than was anticipated,” he says. “The year before, we were down 10%. It created a softer scatter market and that affected cable. Cable benefits when broadcast gets very pricey.” Subsequently, cable networks followed this up with lower upfront overall dollars -- a drop of 4% from the year before. “I thought cable would have been done a bit better -- but I think they’ll pick up the slack in scatter,” says Scanzoni. “Clients want flexibility.” GroupM, which controls a sizable chunk of U.S TV advertising dollars -- around 25% -- predicts that overall TV advertising will see a 3.5% gain for 2014 (with overall U.S. ad dollars climbing 3.4% to a estimated $161.1 billion). Broadcast networks will be flat and cable networks will climb 4%. But for cable, Scanzoni says, this will be down from the 7% to 8% regular annual advertising revenue gains. Last year’s weak TV scatter market should see a slight uptick next season. “You’ll see a better scatter market -- [last year was] flat to up a bit,” says Scanzoni. “Not that it will go crazy. But there are better options for it to be a bit healthier.” That said, national TV clients will be ever more cautious -- looking for greater flexibility. He adds: “It has been my experience that when clients hold onto money, it generally doesn’t come back into the market.” Scanzoni says that one major factor in broadcast TV’s overall performance for next season will be where CBS lands.Many are predicting that CBS will return to the top broadcast TV network among key 18-49 viewers -- boosted by the inclusion of potential high-rated NFL football games on Thursday night for a handful nights. Marketing executives estimate that CBS could pull in as much as $200 million in advertising dollars collectively for those games. Group M made big news during the upfront period in transitioning to C7 metric-attached deals (C7, the average commercial rating plus seven days of time-shifted viewing) across its roster of clients rather from C3 agreements. Scanzoni says these C7 include all Group M’s movie marketing clients. Explaining the decision to move from C7 from C3 -- the primary metric for national TV networks since 2007 -- he says: “The reality is that the ad on a show, being played back [on DVRs], is being viewed -- you can’t take that ad back on the DVR. The exposure is there. Then it comes down to economics. Why wouldn’t you do it?” Looking at the bigger picture for C7, he says: “Converting to any metric has no impact on advertising dollars -- in the long run it could decrease ad dollars. My budgets didn’t change. I’m not spending any more or less. If you can make an adjustment on what you are getting, why wouldn’t you do it? For networks, Scanzoni sees their C7 benefit coming long-term to stabilize their audience and CPMs. All that could influence a greater share of dollars for broadcast TV -- perhaps getting more back from cable or other media. "Watching TV" photo from Shutterstock.
AOL has unveiled a new privacy policy specifying that the company's properties -- including the recently acquired Gravity -- don't honor the do-not-track requests that users send through their browsers. “Previously, Gravity provided users with the ability to use the browser 'Do Not Track' signal to opt out of certain personalization,” Gravity says on its site. “AOL has consolidated and simplified many of the preferences and opt-outs we offer, and as a result, 'Do Not Track' browser signals will no longer be recognized." AOL purchased the personalization company Gravity in January for around $83 million. The company's new privacy policy will take effect on Sept. 15. Gravity says that users can eschew personalization by visiting an opt-out page, including the ones operated by the Digital Advertising Alliance and Network Advertising Initiative. But privacy advocates say that opting out through links on those sites poses challenges, because those links are tied to cookies -- which are seen as unstable, given that consumers who are especially privacy conscious often delete their cookies. AOL's other brands, including publishers like TechCrunch and Huffington Post, also will ignore the browser-based signals. But that decision isn't inconsistent with the current view of do-not-track, as outlined by the World Wide Web Consortium. The do-not-track commands aren't aimed at preventing publishers from collecting data about their own visitors, says the Center for Democracy and Technology's Justin Brookman, who chairs the W3C's effort to forge a consensus about how to respond to the signals. In fact, publishers are allowed to gather information from users who have activated do-not-track, according to the W3C's most recent formulation of the concept. All of the major browser companies now offer do-not-track headers, which tell publishers and ad networks that users don't want to be tracked. But the header doesn't actually prevent tracking. Instead, ad networks and publishers are free to ignore the signals. Earlier this year, the Web companies, computer scientists and privacy advocates in the W3C's tracking protection working group tentatively decided that a “do not track” request will communicate that users don't want data about themselves collected by ad networks and other third parties. But the organization also says that ad networks should be able to collect some type of information -- such as data used for ad-frequency capping -- even when people activate do-not-track. The group is still debating exactly what type of data can still be collected in that situation. AOL suggests in its newest policy that it might change course after the industry reaches a consensus about do-not-track. “If and when a standard for responding is established, we may revisit its policy on responding to these signals,” the company says. For now, very few Web companies appear to honor do-not-track signals -- and even some of the companies that previously respected the signals have retreated. In May, Yahoo said it would no longer honor the do-not-track requests that users send through their browsers."Privacy Keyboard" photo from Shutterstock.
Less than a year after stepping down as Microsoft’s CEO, Steve Ballmer officially resigned as the company’s chairman on Tuesday. He will remain the software giant’s single largest shareholder. Ballmer, who recently acquired the Los Angeles Clippers for $2 billion, sees the pro basketball team, along with “civic contribution, teaching and study,” taking up much of his time. “Given … the multitude of new commitments I am taking on now, I think it would be impractical for me to continue to serve on the board,” Ballmer said in a letter to his successor Satya Nadella, which was released publicly on Tuesday. Ballmer left many challenges for Nadella, who has been with Microsoft since 1992. Last month, the software giant said earnings for the quarter ended June 30 -- the first since Nadella took over for Ballmer -- fell short of analyst expectations. Earnings of 55 cents a share fell short of Wall Street’s hopes of 60 cents a share, although revenue of $23.4 billion -- up 17% year-over-year -- beat estimates. The earnings fail was largely attributed to costs associated with Microsoft’s Nokia acquisition. An optimistic Nadella cited Microsoft’s commercial cloud business -- revenue from which doubled year-over-year to a $4.4 billion annual run rate -- as evidence that the company was moving in the right direction. Last quarter, devices and consumer revenue also grew 42% to $10 billion. Of particular note, Bing search advertising revenue grew 40%, while the unit’s domestic share of share of search grew to 19.2%. However, “display [advertising] revenue remains soft,” Amy Hood, Microsoft’s EVP and CFO, told analysts on the company’s earnings call, last month. This summer, Microsoft was also compelled to reduce its workforce by as many as 18,000 employees -- or about 14%. Nadella -- who telegraphed the move in a proceeding email -- said most of the cuts would be felt within the Nokia phone business. “Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers,” Nadella explained in a letter to employees. The reductions are expected to result in a pretax charge of $1.1 billion to $1.6 billion, according to the company. Also, as part of the restructuring, Microsoft said it would be dismantling its Xbox Entertainment Studios division, which has about 200 employees producing original programming. Nadella said that closing Xbox Entertainment Studios was necessary to focus more fully on gaming, which he called the unit’s “core business.” (It has been reported more recently, however, that Microsoft might have found a buyer for Xbox Entertainment Studios.) Since stepping in for Ballmer earlier this year, Nadella has stressed the importance of accountability and strategic agility in countering Microsoft’s highly corporate culture. He reiterated those themes, last month, explaining in his letter: “We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.” “This includes flattening organizations and increasing the span of control of people managers,” Nadella explained. “In addition, our business processes and support models will be more lean and efficient with greater trust between teams."
Jelli’s programmatic platform for broadcast radio advertising is growing, with the addition this week of seven new stations across the country, including major properties owned by Emmis Communications and Beasley Broadcast Group. In the latter case, these are the first Beasley stations to sign up for Jelli’s programmatic ad service.The new stations signing up for Jelli’s RadioSpot platform include Emmis’ WBLS-FM in New York City and six Beasley stations: WJBR-FM in Philadelphia, WQAM-AM in Miami, KKLZ-FM, KOAS-FM, KVGS-FM, and KCYE-FM in Las Vegas. That brings the total number of radio stations across the U.S. using Jelli to over 400, reaching an aggregate audience of around 60 million people per week.The announcement marks Jelli’s entry into the Miami and Las Vegas markets. In addition to Emmis and Beasley, the company already has deals with broadcasters, agencies, and online media buying platforms, including Townsquare Media, Entercom, Marketron, and OMD Worldwide.Jelli launched RadioSpot in January of this year, and in March, the company announced the launch of SpotPlan, a Web-based programmatic buying platform for buying radio ads, which combines Nielsen data and proprietary algorithms to enable media buyers to run ads automatically nationwide. Buyers can browse available inventory from stations and networks by location, audience and ratings to produce plans that optimize station lineup, daypart, impressions, GRPs and audience targets. SpotPlan is compatible with third-party buying and selling software from broadcasters, networks and advertisers.Jelli’s programmatic platform for buying and serving broadcast radio ads is a second career for the company, which began as a user-controlled social radio platform. Launched in 2009, this experimental service allowed listeners to control broadcast radio airplay via online voting, before finally going dark in June of this year, as the company focused its efforts on the programmatic platform.
A major complaint by marketers -- and viewers -- in this new digital/media world: Too much repetition when it comes to seeing the same ad over and over. TV advertising system manager/provider BlackArrow has added an update to its Advance Advertising System with an “audience-based frequency capping” component, allowing clients to set limits on the number of times an ad is seen by a household on any device by the day, week, month, or throughout an entire ad campaign. With too many ad exposures, marketers run the risk of lower overall effectiveness of its message. In particular, the new component can help control TV viewer exposures, says BlackArrow. Online advertising sites use cookies to keep track of frequency counts. But there are no cookies for TVs and traditional set-top boxes. “The future of TV is bringing high-quality TV content to viewers when and where they want to watch it,” stated Jacob Naim, vice president, product management at BlackArrow. “To monetize this content, the industry needs tools that can deliver targeted, frequency-controlled, dynamic ads to both TVs and IP-based devices.” BlackArrow has developed what amounts to a “server-side cookie.” Says Naim: “Ad servers can then check this frequency count when a TV, set-top box or device requests an ad and ensure the frequency capping rules are respected.” BlackArrow’s advanced advertising software system, used by on-demand and linear programmers delivered to TV and devices over traditional or IP (internet protocol) infrastructures, reaches nearly 32 million homes.
Condé Nast is selling Fairchild Fashion Media -- which publishes Women’s Wear Daily and Footwear News, among other fashion trade publications -- to Penske Media Corporation, publisher of Variety, according to Variety, which reported the news Tuesday afternoon. Terms of the deal were not disclosed, but the purchase price was rumored to be around $100 million, according to a separate report in The Wall Street Journal, citing an unnamed source familiar with the deal. The transaction is expected to be complete in September of this year. The acquisition gives Penske control of a number of Fairchild properties, including the above-named fashion trade publications, M, Beauty Inc., and the Fairchild Summits events business. Two consumer brands also owned by Fairchild, Style.com and NowManifest, are not part of the deal and will remain with Condé Nast. Fairchild Fashion Media president and CEO Gina Sanders is also staying on with Condé’s parent company Advance Publications, where she will assume a new role still to be designated. The rumored sale price of $100 million compares with the $650 million Advance paid for it in 1999, reflecting the steep decline in value of print magazines in both the consumer and business-to-business categories. Penske, which acquired Variety from Reed Elsevier in 2012, has been beefing up its core trade publications with new offerings and partnerships. In February, Variety joined forces with Univision Communications to create a new Spanish-language entertainment news brand, “Variety Latino – Powered by Univision.” Before that, Variety and Univision were already collaborating on a new short-form entertainment video feature for Univision’s “Primer Impacto” (First Impact) called “Variety en Primer Impacto.” In 2013, Penske boss Jay Penske was rumored to be interested in acquiring Newsweek, the troubled newsweekly which later was bought by the International Business Times.
The Xbox One Tuesday will introduce Reddit and MTV apps to the system, as well as increase functions and tools for Google's YouTube Twitch app -- complete with voice search and navigation. ReddX, the Reddit app, snaps to the side of the TV screen. Comments and posts flow down the left rail with video clips and photos on the right. Microsoft has designed for the user interface specifically for the screen on the Xbox One entertainment console. Down the left rail, insight into what's new is revealed, and posts containing albums are sorted. Users can click on a comment to read the post, reply, and up- or down-vote, similar to the feature on Reddit. Viewers can play embedded YouTube videos in the app, as well as pause and rewind animated GIFs. Microsoft also brings to Xbox One new features for Twitch, a Google YouTube-owned company. These include auto zoom and audio capture from headsets as well as "watch with friends," which allows users to see the same broadcast that up to six friends watch while on Xbox One. Twitch will add a feature that enables Microsoft's technology, Kinect, to follow and zoom in on the viewer's face while broadcasting. Microsoft also will bring MTV to the Xbox One in the U.S., featuring sneak peeks, bonus clips, and recent full episodes from select MTV series with a TV subscription. The app supports the latest in pop culture news, fashion, and glance behind-the-scenes of blockbuster movies.
WPP’s Mindshare North America has struck a non-exclusive deal with content marketing platform Percolate, the companies have confirmed. The Percolate deal adds another weapon to Mindshare’s real-time marketing arsenal, which is based on the agency’s proprietary The Loop platform that kicked off earlier this year. The agency will use the Percolate platform to enhance client efforts to plan, create and promote real-time marketing content and campaigns. Percolate says it helps brands create content that is “on message” and that is more likely to get traction across social media channels. The company’s clients include Ford, General Electric, and Unilever. Founded in 2011, Percolate has not had a problem attracting funding from investors. Earlier this year WPP, through its digital investment arm, acquired a minority stake in the content marketer. That was followed by the completion of a $24 million financing round headed by Sequoia Partners. “Our clients want to employ real-time ready, culturally-inspired marketing to connect with their audience with the right message, right place, right time,” said Colin Kinsella, Mindshare North America CEO. “This partnership offers our brands the ability to do just that.” Added Percolate Co-founder James Gross: “This partnership is a clear indication of how technology can help augment the entire agency process in a really awesome way. “
Clypd, a supply-side platform (SSP) for programmatic TV, on Tuesday announced it has added Deal ID technology to its platform. “Deal ID” is a hybrid way of trading media that involves both direct, pre-negotiated deals and programmatic targeting. "TV advertising is the longest-standing and most powerful vehicle for delivering marketing messages. The human touch that has defined the media sale should not be marginalized,” stated Jason Burke, VP of product at clypd. “Deal ID allows for that strategic relationship between buyer and seller to remain strong while introducing operational efficiencies and data-driven enhancements for both parties. Programmatic TV advertising must consider the premium nature and the relative scarcity of the media and allow for the human element that has defined TV sales to remain part of the workflow." A recent AOL study says about 8% of brands and agencies are using programmatic to buy TV, with another 12% saying they will increase spend in this category over the next six months.
Publicis Worldwide North America is building a new team to lead business growth and its newest member is Julie Levin who has been appointed Chief Marketing Officer, the shop confirmed Tuesday. In the new role, Levin will partner with business development and communications teams in the agency’s offices in a bid to improve both organic and new business growth. Starting September 8, she will be based in the Publicis North America flagship office in New York. “Growth fuels our collective aspirations," says Andrew Bruce, CEO, Publicis Worldwide, North America. "Julie, with her rich experience leading brands and businesses, coupled with her impressive new business track record, is a growth agent. Her collaborative nature, high-energy and stubborn determination will find a welcome home here at Publicis." Levin was previously at the Martin Agency, where she led and won pitches for Stoli and Sparkle Georgia Pacific, among others. Earlier Levin was Head of Business Development at BBH/NY. While there she helped to land the Sony Playstation global account. Before that, she was Managing Partner/Director of Business Development, mcgarrybowen/NY, winning Verizon Wireless, multiple Kraft Food brands, and the Pfizer Chantix and Viagra business. Levin’s experience also includes high-level account management positions, running Revlon at Deutsch/NY and the global Gillette Venus account at BBDO/NY. This opportunity came as a result of mutual interest. Publicis was seeking the right person to lead this new area of focus and although Levin wasn't looking for a new job, she was drawn to the position's expanded role and scope. The North American CMO position is new although it partially fills the gap left by Chris Shumaker, who was CMO for Publicis USA, but became CMO at Foote, Cone & Belding (FCB) last September.
WPP’s Mindshare has revamped its internship program to focus more on where it believes the industry is headed rather than where it’s been. The shop has restructured its program, now called Data Bytes that focuses on data, insights and real-time marketing. It’s a complete departure from past practice where interns were hired for various departments throughout the agency. Now, all of the interns hired at the agency are placed in the agency’s Marketing Sciences discipline. As part of the 8-week curriculum, the interns hold weekly sessions with staff from The Loop, the agency’s real-time marketing offering that was introduced earlier this year. Throughout the program the interns work with their respective mentors to create and develop individual projects, with their experience culminating in a presentation to the office leadership team. The projects covered topics like evaluating the role of viewability in digital measurement, finding new ways to communicate insights, and examining store sales data to better understand the effects of weather targeted digital campaigns. The program focuses on what a rep said was “grooming the next generation of ‘Math Men,” with most of the interns coming from backgrounds in computer science, economics, industrial engineering and mathematics. The revamped effort comes amid a heightened sense of urgency and debate over how Adland can better recruit the best and brightest to become its next generation of leaders. The debate intensified last week when the heads of the 4A’s (Nancy Hill) and Association of National Advertisers (Bob Liodice) traded shots in the Wall Street Journal about why the industry isn’t drawing enough top university graduates to its ranks. Hill laid most of the blame on tight-fisted marketer policies that don’t provide adequate agency fees enabling Adland to pay competitive entry level salaries. Liodice fired back that marketers shouldn’t be blamed because agencies haven’t adequately updated their business models to compete in today’s marketplace. Other agencies are also taking steps to better equip young talent for careers in the industry. Earlier this month University of Akron’s Taylor Institute of Direct Marketing partnered with the V12 Group in a program that enables students to execute marketing campaigns for local clients via the agency’s direct interactive marketing platform “Launchpad.” Also this month, Horizon Media and MyersBizNet kicked off the industry’s most extensive networking program for more than 300 New York City-based interns who had the chance to mingle with leaders across an array of advertising, media and marketing firms. Last month, DigitasLBi Boston conducted an “Eternship” program -- a marketing “boot camp” where 25 local high school students were immersed at the agency to learn about various capabilities, and create their own ad campaigns for a sample client challenge. In turn, the agency said it gained insight and inspiration from youth culture. When he assumed the chairmanship of the 4As back in May, Horizon Founder and CEO Bill Koenigsberg said development of young talent must be a top priority. “With so much change, the opportunity for the 4As and my fellow board members to help shape the future of marketing has never been bigger,” Koenigsberg said. “It’s also time to empower our industry’s young talent with a platform to facilitate change not only within our industry but for the greater good.”
The Internet is now ahead of TV, and it shows no signs of stopping its growth. For the first time, the number of broadband customers exceeded the number of cable subscribers, according to end-of-June data from the Leichtman Research Group analyzing numbers from the nation’s nine largest cable companies. As of the second quarter of 2014, the numbers of broadband subscribers clocked in at 49,915,000 customers, compared to 49,910,000 cable TV customers. Fine, fine. So we’re talking about a difference of 5,000 customers. Still. These numbers underscore the direction that media consumption is headed in — and it’s a digital one. While this milestone might suggest the decline of TV at first blush, what it actually underscores is the omni-platform nature of consumption. Consumers are still watching plenty of TV; but now, many are watching it through digital means, via over-the-top services, game consoles or online video. As an example, in the second quarter, digital viewing jumped by 28% over last year, said video ad management platform Freewheel. Also, the use of mobile phones for video viewing grew 93%, while the use of over-the-top devices for video rose 236% over last year. Leichtman Research Group also found that the country’s 17 largest cable and telephone providers added nearly 385,000 new broadband customers in the second quarter. In the past decade, cable providers have added more than 30 million broadband customers.
Is there a correlation between Google's use of the Dutch auction stock bidding process when taking the company through an initial public offering (IPO) and the AdWords auction model? Google originally launched AdWords with a CPM model and later transitioned it to cost per click (CPC), from seller to buyer-driven. Rather than sellers telling buyers what to view, Google let consumers ask by raising their hand through searches. Transparency and eliminating the fat are two parallels between the Dutch auction and AdWords model -- but the industry has seen similar themes overall throughout Wall Street, said David Hirsch, managing partner of Metamorphic Ventures, a New York City-based venture capital firm that invests in start-up and early-stage technology businesses such as Google-owned Songza, Yahoo-owned Stamped, IndieGoGo, and many others. Hirsch said there are many similarities between the way Google's cofounders Sergey Brin and Larry Page financed the company and the way its advertising model works. Search, the original programmatic advertising model, continues to spawn offshoots. "We have seen the advent of programmatic advertising," Hirsch said. "It's a different version of reducing the friction." There's no shortage of tales to tell on how Google's cofounders took the company through an IPO 10 years ago. Quartz details U.S. and international tax rates, Business Insider lists the six weirdest things like Google's head of engineering telling all employees he would take a baseball bat and smash the windshields of any new BMWs or Porsches in the parking lot he saw within the few days following the IPO, and ABC News tells us that Page and Brin set up a bidding process known as a Dutch auction to give a larger pool of investors an opportunity to determine the IPO price and buy the stock before it began trading on Nasdaq. Perhaps the idea behind the stock bidding process somehow, in the cofounder's minds, had an influence on Google's AdWords paid search engine marketing model. It's a model near and dear to the hearts of Page and Brin. There were no shortages of bids last year. Data from AdGooroo, a Kantar Media company, suggests that retailers spent more than $2.8 billion on paid search desktop ads on Google AdWords and Yahoo-Bing Network in 2013, not including mobile search advertising or Product Listing Ads. AdGooroo's report provides rankings on desktops by impression share of the top 50 advertisers in 15 retail categories like Apparel & fashion or home improvements on U.S. Google AdWords for calendar year 2013, along with 2012 rank and year-over-year change in rank for each advertiser. 6pm.com remains one example of a company in the category of Apparel & Fashion keeping its lead in 2013, compared with the prior year. Zappo's site ranks No. 1 in U.S. AdWords impressions ranking last year and in the prior year. Bloomingdales.com rose to No. 2 from No. 5, respectively. The biggest leap was dressfirst.com -- landing at 47, up from 1458. (Yes, that's accurate. I double-checked.) BestBuy.com held steady at No. 1, followed by Apple.com at No. 2 in U.S. AdWords impression ranking. Microsoftstore.com moved up to No. 3 in 2013 from No. 4 in 2012, but the biggest mover in the consumer electronics categorywas besatsbydre.com, with a 93-position jump to 22 from 115, respectively. There were other big movers too: Partstore.com moved to 23 from 58, gopro.com jumped to position No. 34 from No.128, and clicknshop.com leaped to No. 48 from No. 537. Marketers can download the report here.
Many of the leading online retailers are reaping the rewards of mobile commerce. The top 366 U.S. retailers will hit mobile commerce sales of $59 billion this year, an increase of 74% from $34 billion a year ago, according to a new index. The world's 500 largest mobile commerce businesses combined will increase their mobile sales by 80% to more than $84 billion this year, according to the Internet Retailer index, which ranks the 500 leading Web merchants globally and analyzes their mobile commerce activity. The index comprises an analysis of 53 data elements, such as mobile traffic, site speed on smartphones, mobile conversion rate and a breakdown of sales between smartphones and tablets. The index lists 134 overseas retailers in the top 500 with a forecast of them reaching $25 billion in mobile commerce sales this year. This would be an increase of 96% from a year ago. Of the 500 leading retailers in mobile commerce globally, most are in the U.S. and U.K. Here are the leading countries with the number of merchants in the top 500: