In a move aimed at boosting revenues on MySpace and other online properties, Fox Interactive Media announced Thursday that it had acquired ad technology firm Strategic Data Corp., which specializes in improving online ad performance. Terms of the deal were not disclosed. Fox Interactive plans to use SDC's ad technology to wring more dollars from the huge volume of traffic it generates across its network spanning MySpace, IGN, Direct2Drive and AskMen.com. Fox Interactive properties drew 62 million unique visitors and nearly 30 billion page views in January, according to Nielsen//NetRatings. Specifically, Fox will use SDC's ad optimization software to serve targeted, cost-per-action display ads, which make up a significant portion of the inventory on Fox Interactive sites. Although Fox wouldn't say how much of a revenue bump it expects to get from incorporating SDC's technology, "the intention is that this will offer a significant uplift for us in our ability to monetize traffic," said Fox Interactive spokesperson Ann Burkart. She added that better targeted ads will be more effective, and will allow the company to command higher prices for display ads. Improving monetization of MySpace's huge audience in particular has been a key goal for News Corp. since acquiring the social networking site in 2005. In News Corp.'s second-quarter conference call earlier this month, President and COO Peter Chernin said he expected MySpace to surpass $500 million in revenues during the company's current fiscal year. But it wants to do better. Fox Interactive is already taking steps to mine the wealth of personal information found on profile pages on MySpace and other sites to better target ads. "With SDC, we'll be able to plug all that rich data into their ad optimization technology and be able to fine-tune our ad delivery on a much more targeted basis," explained Burkart. She said Fox is already working with brand marketers to figure out what kinds of user data are most valuable to them. Bringing that capability in-house could also mean bigger margins for Fox and be a blow to the third-party ad networks that Fox has relied on to date. "Fox has historically outsourced direct response performance advertising to third-party networks," said Dave Morgan, chairman and founder of behavioral targeting company Tacoda. "Buying SDC means Fox is now buying the capability to start doing quite a bit of that themselves." Morgan called the acquisition a "smart move"--one that might allow Fox Interactive to keep more of its ad dollars as well as cultivate more direct relations with marketers. Google last year gained the right to sell remnant advertising on MySpace and other Fox sites through its $900 million advertising deal with Fox Interactive. Burkart said that Fox planned to maintain relationships with the 17 different third-party ad-serving companies it currently relies on, including Advertising.com and online ad exchange Right Media. She acknowledged that the company may rely less on third-party ad networks over time as it becomes more efficient at selling ads itself. She also said that SDC would continue to serve its existing clients based on online ad networks and Web publishers including EuroClick and Specific Media. SDC was founded in 2000 by Lee Cooper, a professor of marketing at UCLA's Anderson School of Management, and Giovanni Giuffrida, a doctoral candidate in computer science at the university. The SDC deal marks the first major acquisition by Fox Interactive under Peter Levinsohn, who replaced his cousin Ross Levinsohn in that post in December. Peter Levinsohn was previously president of digital media for the Fox Entertainment Group.
Yahoo is expected to receive between a 15% and 45% increase in 2007 revenue as a result of Panama, according to a research note released Thursday by financial services firm UBS. Panama is the long-delayed upgrade to Yahoo's paid search infrastructure, which went live in early February. The report's most optimistic estimate--which assumed an acceleration in search volume growth and an increase in Yahoo's click-through rates to 12.4% from 11.4%--predicted a 45% year-over-year increase in the company's search revenue, from $960 million in 2006 to $1.392 billion in 2007. The neutral scenario, which assumes no increase in click-through rates and a steady rate of search growth, predicts a 20% increase in search revenue. The least optimistic scenario, which posits no effect on click-through rate from Panama and a decrease in search growth, predicts a 15% growth in search revenue. The revenue lifts are unlikely to begin to emerge until the second quarter of 2007 because of the delayed launch, the report states. David Berkowitz, director of emerging media at search engine marketing firm 360i, said that keyword advertisers are beginning to see increases in click-through rates, which will likely increase their spending on Yahoo--even if it continues to lag behind Google in market share. "Early indications show that since the Panama upgrade, click-through rates have risen," Berkowitz said. "Even if Yahoo's market share stays the same, the improved performance will trigger more spending there."
KFC is turning the demise of the family dinner hour into a marketing opportunity with a campaign to Bring Back Dinner. The fast-food purveyor unveiled the Web site www.bringbackdinner.com yesterday in support of the program. Central to the site are Mom points of view on dinner, grocery shopping and getting kids to the table. The Colonel's Email Club offers up to $180 in coupons in exchange for basic household demographic data. In something of a stretch, KFC has issued the "Good Grade Challenge," suggesting that adding meals at KFC to the menu will turn your kid into an A-student, or one who strives to be. (Research from the National Center on Addiction and Substance Abuse does support that children who eat dinner with their families five or more times a week are more likely to have higher grades in school--regardless of gender, family structure, or family socioeconomic level. The idea is that eating together promotes conversation.) "We're so confident that good things will happen if you come together at the dinner table, we created the KFC Good Grade Challenge," the Web site states. "Just add another KFC family dinner to your weekly calendar, one night a week for ten weeks, and we believe you'll see your child's grades improve. A few needy students will also win cash awards to help support their education." Parents are invited to register by March 23 to participate in the promotion, which runs through June 1. If the child's grades do improve, KFC says it will pick up the cost of the child's KFC dinners over the 10 weeks, for up to $50. (The promotion is limited to 1,100 offers.) The companion Bring Back Dinner essay contest will give a chance to win $2,500. KFC will market the site with tags on TV ads, on packaging, in print and in-store POP, on radio and through online ads.
Lufthansa signed on as travel sponsor in the WashingtonPost.com's Sponsored Blogroll program, making it the first advertiser to sponsor an entire vertical category. Blogroll is a network of B- and C-list blogs linked from the WashingtonPost.com home page. It launched in August and started carrying advertising in December. Lufthansa's ads will run across all 100 travel blogs on WaPo's network, including This Non-American Life, LasVegasLogue.com, ParisLogue.com, MoreThanPoints.com, and BaliBlog.com. The placements are standard display ads. The Sponsored Blogroll program is part of a continuing push into the blogosphere on the part of WashingtonPost.com. In September, the site began linking readers to Technorati to search for blog posts about its stories. Later that month it signed the prominent opinion journalist Andrew Sullivan as a guest blogger. Last month, the site sealed a partnership with politics blog RealClearPolitics.com to provide a daily feed of opinion, commentary, polls and analysis from around the Web. Ads on the Sponsored Blogroll network are powered by ad serving technology firm Adify's "Build Your Own Network" platform.
A new iTunes podcast will turn New Yorker cartoons into short ad-supported animations. Created by startup RingTales, which has the exclusive license to animate and distribute New Yorker cartoons, the clips will each be 15 to 30 seconds long, and will be available via www.ringtales.com/podcast. Subscribers to the free podcast will get three new animations a week. The company plans to syndicate the New Yorker animations widely across the Internet and mobile devices. Founded by Jim Cox and Michael Fry, who collaborated on the DreamWorks animated feature "Over the Hedge," Ringtales is also testing different ad formats to run with the New Yorker clips. "We're developing a high-impact video post-roll," said Fry, in a prepared statement Thursday. "In our experience, viewers are happy because they get immediate access to the content. Advertisers are happy because the content has a great payoff." RingTales is working with mobile advertising company Ad Infuse to help develop advertising for the New Yorker cartoon podcast.
Despite all the hype over ad-supported video models, pay-to-play is poised to dominate the digital video market over the long term. That forecast comes in a new report from Adams Media Research, which finds that annual consumer spending on Internet downloads of movies and TV shows will top $4 billion in 2011--up from just $111 million last year--while ad spending on Internet video streams to PCs and TVs will approach a mere $1.7 billion, from $409 million last year. The research group's analysis points to a period of experimentation from now through 2009, during which the ad-supported model will dominate. But as significant numbers of homes connect their TVs to the Internet, consumer spending on downloaded movies and TV shows should expand rapidly and exceed ad spending substantially by 2011, Adams Media finds. "The Internet is going to revolutionize the distribution of video," Adams Media Research President Tom Adams said in the report. The growth of pay-to-play will be fueled by the introduction of devices such as Apple TV, a $299 set-top-box that converts videos downloaded online into signals that can be played on high-definition TVs. It is expected to ship later this month. The market research firm forecasts that sales of video downloads will total $472 million in 2007, $1.2 billion in 2008, $2 billion in 2009, $3.1 billion in 2010, then hit $4.1 billion in 2011.
Comedy Central may have Jon Stewart and Stephen Colbert, but only Yahoo will be able to boast a singing anchor. The Internet giant confirmed Thursday that it plans to introduce a news personality in the next two months described as "Woody Guthrie meets Hunter S. Thompson" by a Yahoo spokesman. While Yahoo isn't disclosing details on the prospective "Odd News Underground" initiative, the spokesman said it would feature a journalist who is also a musician. "This project will create an entirely new kind of news beat, so stay tuned," said Scott Moore, head of news and information at Yahoo, in a statement issued by the company. "All I can say for now is that this reporter will leave you tapping your feet." Since the singing anchor will focus on lighter news, don't expect hummable tunes about Iraq or the war on terror. The Yahoo spokesman stressed that the new venture doesn't mean Yahoo News is turning into The Onion. The site will still be home to a full range of serious news from the likes of Reuters and AP.
A man's body was found in his home in Southampton, New York more than a year after his death, with the television still on and his features preserved by dry conditions in the house. Vincenzo Ricardo was discovered in a chair in front of the television set, as though he were watching it, media reports said. The event set off a frenzy of claims and counterclaims by various media organizations. "This basically challenges the perception out there that people are abandoning television or going to the Internet or doing other things that take away from television viewing activity," said David Poltrack, executive vice president for research and planning at CBS. "The pervasiveness of the medium is not being eroded." The National Association of Broadcasters, a lobby for more than 8,300 free, local radio and television stations and the broadcast networks, issued a release that read in part: "Media buyers and planners might want to note that police confirmed Ricardo's set was tuned to a broadcast network, not a cable station or a satellite provider. Nor was he playing a video game. In an entire year, he watched free TV and only free TV. If anyone wants an example of the stickiness of free TV programming, they need only look to Southampton." The Television Bureau of Advertising, a not-for-profit trade association that promotes the benefits of local broadcast television to the advertising community, said via a spokesman: "Not only was Mr. Ricardo an avid consumer of TV programming, he clearly stayed in his local DMA, so was the perfect target for marketers determined to impact retail sales at the local level." The American Society of Magazine Editors, the professional organization for editors of consumer magazines and business publications, noted on its Web site that "Mr. Ricardo's mailbox was jammed with magazines, giving solid proof that Americans indeed have a 'wantedness' relationship with their periodicals. Like so many readers, he saved his back issues (not just National Geographic or Playboy). Who is to say that a curious neighbor didn't stop by the overflowing box and glance though an issue or two? There you have a great example of pass-along readership. And it didn't involve a doctor's waiting room--where the last person who picked up that magazine probably had something highly contagious and incurable." The American Advertising Federation, which protects and promotes the well-being of advertising, issued a statement that called Ricardo "an ideal audience for ad messages. This was a guy who didn't use TiVo to skip over commercials or use his remote to avoid them. He didn't even leave the room for trips to the kitchen or the bathroom. It just shows that at the end of the day (so to speak) consumers enjoy watching TV commercials." A spokesperson for the NCTA, the principal trade association for the U.S. cable industry, said that since Ricardo's cable service had been suspended for nonpayment, saying he liked free TV was "a misconstruction of the facts." And that: "Perhaps there is a direct link between Mr. Ricardo's death and what he might have been watching." The Syndicated Network Television Association, which represents television program syndicators whose programs air nationwide, issued a statement calling the spokesperson for the NCTA "a moron, who ought to be taken out and caned with a stick of bamboo." The LCD TV Association, a global, nonprofit trade association formed to help the entire LCD supply chain and retail channel through to the end consumer, said in an interview with a 12-year-old blogger in Sweden that "watching a digital LCD rather than 'an outdated' analog set would have made Mr. Ricardo's final days a bit more enjoyable." The Electronic Retailing Association, the trade association for companies who use the power of direct response to sell goods and services to the public on television, online, and on radio, posted this statement on its Web site: "Although Mr. Ricardo hadn't directly responded to any form of media in the past 12 months, he is probably in a better place now," and reassured advertisers, "But we can still reach him." The story you have just read is an attempt to blend fact and fiction in a manner that provokes thought, and on a good day, merriment. It would be ill-advised to take any of it literally. Take it, rather, with the same humor with which it is intended. Cut and paste or link to it at your own peril.