Yahoo's first-quarter profit and sales trailed analysts' estimates after Panama failed to generate the revenue gain some investors expected. Net income fell 11% to $142 million, or 10 cents a share, from $159.9 million, or 11 cents, a year earlier. Sales rose 9% to $1.18 billion, excluding revenue passed on to partner sites. During a conference call with investors, Yahoo CEO Terry Semel and CFO Sue Decker were cautiously optimistic -- and with good reason. Semel said all U.S. advertisers have been successfully migrated to Panama as of March 30. As of yesterday, the platform had been introduced to a small number of advertisers in Japan, with plans to release it to a broad base by the end of the week. Decker said second-quarter financials should reflect Panama's results and be more in line with projections of a 20% sales increase for the full year. While results have been mixed depending on advertiser, the net review is that the Feb. 5 release of Panama is resulting in higher levels of click-through rates. "Investors have confused the initial success that Yahoo has had with Panama with the overall company performance," said analyst Jordan Rohan of RBC Capital Markets. "The company clearly is still in transition." But some of the most promising news is coming from mobile and social networking features, Decker said. The biggest coup may have been cementing a relationship with Viacom. As the exclusive provider of sponsored search and contextual ads for the media conglomerate, Yahoo has access to Viacom's most popular brands and in turn, their relevant audiences. Said Decker, "Viacom's need to protect [its] valuable content" led Viacom to choose Yahoo as its "industry partner of choice." Yahoo's "sharpened focus on the audience" extends to social networking as well. In an interactive partnership with MTV, Yahoo will sponsor the first ever presentation of user-generated content at the MTV Movie Awards, with content delivered from its social sites like Flickr and Answers. Without specifically naming Google, pointed references were made to the just-announced DoubleClick deal, with both Semel and Decker emphasizing Yahoo's desire to be open, transparent and a partner to all. Revenues from Yahoo's top 200 advertisers increased by 20% for the period, Decker said. Meanwhile, in an effort to drum up consumer visits, Yahoo plans a major consumer-marketing push in the second quarter with ads promoting the search benefits of Panama, Yahoo mobile services, and the popular Answers feature. Shares of Yahoo fell $2.55, or 7.9%, to $29.54 in extended trading after the report. They had climbed 48 cents to $32.09 at the New York close.
Positioning itself as a champion of scale, interactive engagement and high quality content, AOL on Tuesday debuted five original programs for the Web that build on its experience with "Gold Rush," -- the interactive/TV series it partnered on with uber-producer Mark Burnett last year. Media buyers saw promise in some of them. The online division of Time Warner hopes the five new franchises will lure viewers and advertisers with new participatory and interactive features and plenty of promotion. The new programming lineup includes partnerships with Burnett, Dreamworks Animation, "Big Brother" producer Endemol, Madison Road Entertainment, Stone & Co. and Telepictures, with which AOL works on gossip site TMZ.com. The new programming slate includes a games series based on the animated movie "Shrek" called "Ye Olde Shrek the Third Royal Tournament," "Gold Rush," a cross-platform tie-in with "The Ellen DeGeneres Show" that will invite viewers to share their personal stories, "Million Dollar Bill," a series where contestants play daily online games to discover serial numbers of U.S. dollar bills in active circulation, and "iLand," an online competition a la Second Life in which finalists move to a remote island and compete to build a civilization. AOL unveiled its programming slate at a "First Look" event for advertisers, media buyers and planners and the press on Tuesday as the online industry roils in the wake of Google's $3.1 billion purchase of DoubleClick. AOL, MSN and Yahoo are mulling strategies on how to compete against the aggressive play by Google, which in snapping up DoubleClick has signaled its intention to go well beyond search advertising to dominate display and brand advertising, traditional strongholds for AOL, MSN and Yahoo. Google owns nearly 5% of AOL, the result of a partnership formed in 2005, and AOL's search service is supported by Google's technology. It's not yet known how these factors will play out in any potential future partnerships and alliances. The First Look event also marked a coming-out party of sorts for Randy Falco, AOL Chairman and CEO who said: "This game is all about scale, and AOL is one of only four companies that has it. We want to be a one-stop shop for advertisers in providing all of the tools, services, and creative support they need to reach their consumers online." Mike Kelly, president, AOL Media Networks, said, "AOL has really been in the vanguard of creating highly interactive, highly engaging programming online. We learned with Gold Rush that the more interactive the programming, the more you involve the consumer, the more successful the whole thing will be." Kelly said Gold Rush taught AOL how to scale online programming. "Last year, when the [TV] networks went to market, they brought digital extensions but customers told us that they lacked scale. We want to increase the scalability around the programming." AOL claims 114 million unique users, while Advertising.com claims 153 million. "What we're doing is saying to customers 'We can give you high engagement and get you enormous reach and scale. It's working,' " Kelly said. Kelly said AOL will offer video components and video advertising opportunities with all five series: "Not just pre-roll, but integration into the programming." AOL also is working with Warner Brothers to integrate TMZ.com elements into a newly created TMZ TV show. It recently worked with HBO on the comedy "This Just In." Kelly declined to comment on the rumor mill surrounding the Google acquisition. Ad sales for AOL in the fourth-quarter increased 49% to nearly $2 billion. Kelly said AOL and its Advertising.com division combined reach 90% of Web users. Media buyers and planners who attended AOL's First Look appeared impressed, on first glance, at the slate of new programs. "Gold Rush II and Million Dollar Bill seem really promising," said Rob Salomone, assistant media director, MediaVest, who works on P&G's Gillette brands including Fusion and Venus. His client sat out the first season of Gold Rush. "I think when you have content geared to continuous usage and access over and over, and it keeps people coming back for more, it's going to be successful," said Lydia Loizides, VP-Paradigm, of the AOL offerings. She said the programming appeals, in particular, to women ages 25 to 54, who enjoy the escape of going online to engage with serialized content. "These guys have come such a long way in the last three years. It wasn't easy to work with them but it's better now," said Christine Benson, media director, Modem Media, whose clients include HP and Visa. Of the new shows, Benson said, "They have broad-based content that's going to get engagement with the audience." Gold Rush producer Burnett appeared on stage to preview the second season of the treasure hunt-oriented show, along with several high-gloss women clad in gold. He pumped up the second season letting attendees know that it would take place in Hollywood and would include topical celebrity news and trivia. "Gold Rush is back with a vengeance," he said. Booted "Dancing with the Stars" contestant Leeza Gibbons appeared onstage to tease "Million Dollar Bill," a Web show debuting in the first quarter of 2008.
In a response to "advertiser demand for greater control over how they manage their bids and costs," Google has released a 'preferred cost bidding' feature for its AdWords program. This new, global option allows advertisers to specify the average price they would like to pay per click (preferred CPC) or per thousand impressions (preferred CPM), as opposed to a maximum bid. According to the AdWords Help Center, the preferred cost bidding system works best for advertisers who "are aware of how much each click or impression is worth to their business," and "want their AdWords advertising costs to be more consistent," among other factors. The feature also serves as a time-saver, freeing advertisers from having to constantly adjust their maximum bids. It may be best for site owners that can contend with a possible shift in conversion rates, however, as the preferred cost bidding system removes some control over ad positioning. So if an advertiser targets a $5 preferred CPC, the AdWords system may place an ad "in a range of positions" as it works to get that preferred cost, according to Google. The option will be available to all advertisers by the end of the week, but in the blogosphere, discussions about the merits and flaws of this new feature, as well as how much control it really affords advertisers have begun. On Clicks2Customers, one view was "to stay with the existing bidding model, until more research is done on this new option and the implications of it on advertisers." While on SearchEngineWatch, a blogger said "only time and testing will tell for many advertisers." While advertisers with SEM experience may prefer to micromanage their ads, 'preferred cost bidding' seems to be a viable option for those who have don't have the time or budget to actively manage an AdWords campaign.
Ad network 24/7 Real Media wasted no time in capitalizing on the opportunity presented by Google's announcement that it acquired rival DoubleClick. "Google to acquire DoubleClick. Good for them. Good for you? Call us. 24/7 Real Media." That's the creative in banners for the new online trade campaign concocted over the weekend and launched on Monday. Visitors click through to a detailed lead generation form enabling 24/7 Real Media's salespeople to follow up. The campaign is intended to draw publishers and search marketers who are DoubleClick customers, said Sherri Valenti, vice president of marketing for 24/7 Real Media, whose stock value enjoyed a nice bump in trading this week. "We're getting a lot of in-bound calls in response," said Valenti, declining to give specific details. "It's the large publishers and search marketers who are most impacted by this." So what's the 24/7 Real Media message? "I mean, if you're a publisher, you're running all your sensitive campaign information through DART and it's now owned by one of your biggest competitors who you're fighting against for ad dollars," said Valenti. The timing was also opportunistic because 24/7 Real Media just updated its Web site and this offered the ideal traffic generating opportunity, Valenti said. According to Valenti, 24/7 Real Media serves more than 2,000 different publishers with Weather.com and CBS MarketWatch among its largest clients. The company also has search marketing services. "With this sort of conflict of interest coming to light," Valenti said, "it opens the door to people who didn't want to make a switch who [might possibly think] maybe they should." No signs yet of any such direct marketing by aQuantive or ValueClick, two other online advertising networks that stand to benefit from DoubleClick defectors. Calls to both companies went unreturned yesterday. While it's not everyday a client changes ad-serving vendors, it's definitely not an everyday affair. Still, one senior media buyer who wished to remain unnamed said while the option of replacing DoubleClick's services with a rival is feasible, the main obstacle is whether rivals have the server power to scale their operations. Google and DoubleClick executives, meanwhile, defend the sanctity of their operation. The $3.1 billion deal will not close until the end of the year and faces FTC scrutiny.
On the heels of Google's deal to acquire online ad serving giant DoubleClick, a group of investors including of two of the largest traditional media companies - NBC Universal and Time Warner - are backing a new, "breakthrough" ad serving technology. Time Warner Ventures and GE's NBC Universal and GE Media, Communications and Entertainment units were part of a $19 million round of early stage funding for Adify, which has developed what it calls a "Build Your Own Network" approach to ad serving, which is aimed at traditional media companies as well as endemic online marketers. Adify, founded in 2005 by a group of online ad pioneers from Flycast Communications, one of the original online ad networks, sets up online ad networks by automating management, tracking, reporting, billing, and payment systems. Networks are built around categories ranging from sports to tax season and card games to pet ownership. By combining a large number of sites into one network, publishers can offer their advertising partners highly targeted communities of readers and a greater volume of ad inventory. The investment was among the first to come out of a new $250 million fund unveiled Tuesday by GE's media financing and NBC Universal Units, which is aimed at developing media and technology companies that have a high growth potential. The fund will focus on companies developing technologies, platforms, or business models with a strong strategic fit with NBC Universal in a wide range of areas, including advertising services, wireless, digital content and communities, and international platforms. The GE fund contributed $3 million toward the Adify investment round.
Helping to offset a 1.8% decline in ad revenue at the print Wall Street Journal, Dow Jones Online saw revenue rise a robust 30% year-over-year, Dow Jones reported during its earnings call Tuesday. Online circulation revenue, meanwhile, rose 13%. Unique visitors to WSJ.com were up 6.7% from 6.8 million to 7.3 million year-over-year, according to internal Omniture metrics, while page-views rose 3.3% from 110 million to 113 million. Despite the abundance of free news and analysis online, it appears some consumers are still willing to pay for premium content as Dow reported paid subscription rates for WSJ.com up 20% year-over-year from 776,000 during the first quarter of last year to 931,000 this year. The rise was due in part to a $99 one-year online-print subscription promotion, according to Dow Jones, which is now including those bundled subscribers who have registered for online. Minus the change, paid subscribers increased a still healthy 9% to 830,000. Additionally, paid subscriptions to Barron's Online increased 49.2% to 88,000 from 59,000 year-over-year. Unique visitors to the Dow-owned MarketWatch.com increased 12.6% to 7.6 million from 6.8 million, while page views increased 14.7% to 242 million from 211 million. Overall, revenue for Dow Jones increased 17.9% year-over-year to $507.2 million. "This is the latest indicator that our transformation plan -- aimed at diversifying our heavy reliance on traditional print revenue -- is working," said Rich Zannino, chief executive officer of Dow Jones. "The acquisition and integration of Factiva, strong growth at our online and Indexes businesses and continued aggressive cost management enabled us to achieve this earnings growth in spite of a 1.8% decline in ad revenue at the U.S. Journal and profit decline at our Local Media Group." However, the publisher reported a sharp drop in first-quarter earnings year-over-year, including a large accounting gain. Dow earned $22.6 million, or 27 cents per share, versus $61.5 million, or 74 cents per share, a year earlier. The year-ago period, however, included a net gain of 60 cents per share from an accounting gain relating to litigation over its former Telerate data delivery service. Excluding these items, earnings rose 71.4 percent to $20.5 million, or 24 cents per share, from $11.4 million, or 14 cents per share, last year. Added Zannino: "We continue to expect to grow full year 2007 EPS before special items by 25% to 40%."
Amusing, but perhaps trivial online ad campaigns like Burger King's "Subservient Chicken" are a flash in the frying pan, according to "Ad Agency of the Future" panelists at ARF's Re:think conference on Tuesday. In their place will increasingly be campaigns that offer value and branded services, said Clark Kokich, worldwide president of aQuantive's Avenue A|Razorfish. "Entertainment will always play a role, but user relevance, utility and value are what attract consumers to brands in a lasting way," Kokich said. No one is saying the "Chicken" was not a success. The viral campaign, created by Crispin, Porter + Bogusky generated roughly 500 million hits. But rather than a cheap laugh, brands hoping to leave a lasting impact on consumers have to start thinking of their brands as product offerings, explained Nick Law, R/GA's chief creative officer, North America. "They're far more interested in telling jokes than engaging people in a meaningful way," said Law of certain brands. What sort of services or products can a brand offer? "Content can be a product," said Torrence Boone, president of Digitas, Boston. "We're thinking less about messaging today and more about content. "I think the market is moving towards consumer advocacy, but the key is giving consumers a broad range of options through digital so they can get exactly what they want from a brand," Boone added. Offering an example of his own doing, R/GA's Law pointed to the Nike Plus campaign, which he spearheaded last year. To build a closer relationship with the runners, Nike Plus gives them the ability to record workouts on their Apple iPod Nano using a chip in their Nike running shoes. Users can then instantly upload and view their workouts on an illustrated graph online. "That is not an advertising idea, it's a technology idea," Law said of Nike Plus. "We are delivering a product, an application." Going even further, Steven Marrs, vice chairman and global head of digital and branded content at Nitro, said agencies need to become part of the product development process for clients. "Coming up with product innovations," Marrs said. "That's what we're setting out to do." Another issue raised during the panel was the "weirdness" level of brand campaigns, and its effectiveness as a marketing tool. "Weirdness gets in the way of clarity," said Law. "Sometimes you just need to tell people in a simple and elegant way what something is."
Television sitcom actress Leah Rimini, a cast member of "King of Queens," will star in a series of Web-based videos via a partnership with Suave, Sprint and MindShare Entertainment. The Web series supporting Sprint TV, Unilever's Suave brand and MSN, called "In the Motherhood," will run on MSN.com starting this week through June and will be supported by a partnership with "The Ellen DeGeneres Show." The program, the result of a joint initiative between Suave and Sprint Nextel and created by MindShare Entertainment, entails consumers who are moms, who have the opportunity to submit their own ideas for scripts and also do some of the writing for the show, which profiles the lives of three mom girlfriends. Although the characters and story lines are being developed by Hollywood scribes, the material will come from consumers, who will be encouraged via integrated advertising to describe their experiences in narrative form, not as a script, at inthemotherhood.com. An "online mom" community will vote for the best entries, which the pros will polish and put in the Webisodes. Suave and Sprint are promoting via integration with "DeGeneres," which will publicize the series for 10 weeks, and print promos in People magazine. "DeGeneres" will run segments within the show showing clips of the five Webisodes and detailing how the videos were made. The first will air on May 11 and subsequent Webisodes will air on May 22 and 29 and June 5 and 12. The Web site will offer games, blogging and peer-to-peer conversation. They also can be viewed at suave.com as well as on Sprint TV, available on Sprint Power Vision phones. Anita Newton, VP marketing at Sprint, says that while Sprint will promote the series only on Sprint TV, the effort is meant to pitch the Sprint brand and the portfolio of cell phones and services as solutions for busy moms. Among those services are the Sprint Music Store, which offers wireless music downloads to Sprint Power Vision phones for 99 cents per download; Sprint Navigation, a GPS turn-by-turn direction guidance system; Sprint Family Locator, and the Sprint TV and Sprint Picture mail. Both Suave and Sprint have mom-directed marketing programs. Suave has an exclusive partnership with the Hot Moms Club, an online community. The brand, per a release, has developed a study of 3,000 mothers nationwide. Newton suggests Sprint might be working with Unilever on other projects directed to women.
You will have a hard time finding anyone in the online publisher world who has been a bigger supporter of both DoubleClick and Google over the past decade than me. At washingtonpost.com under my watch, we were one of Google's first publisher partners well before they had figured out a business model. I continue to rely on them happily today in my new venture, www.healthcentral.com, and personally use Google 100 times a day. I've been a loyal and thrilled DoubleClick customer for just as long, having switched out of other services twice, and being one of their most evangelical reference customers. But as a long-time industry participant, analyst, and pundit, I do have a few questions when you put 'em together, and here are my top seven: 1. Has this combination effectively declared war on ad agencies? One very smart friend of mine in the agency world feigns indifference. "Anything that brings efficiency at the tool level is a good thing. It's an operating system, and the world doesn't need countless operating systems." Maybe. But unlike any other enterprise software company, Google/DoubleClick now is an "operating system" which has billions of dollars worth of direct, and competing, relationships with marketers. Put it another way, over time, other than "creative" advice what would agencies offer that Google/Doubleclick would not? 2. Might the anti-trust issues stick? Despite the glaring irony of Microsoft suing anyone over anti-trust, they might have a point. Eric Schmidt suggests that there are many alternatives for folks, but as a publisher I'd like to know who he has in mind. At the end of the day, most publishers simply want to assume ad serving works -- is the accounting right, do the ads serve accurately 99.99999% of the time -- thus the cost to switching is extremely high. I suppose like a few of the portals and CNet we could build our own, but I doubt the regulators consider that "competition". 3. As Google has launched its display version of AdSense, how will DoubleClick publishers cope with sales channel conflicts? At one level, a combined Google/DoubleClick offering could offer unique inventory load balancing capability -- whenever a publisher runs all that it sells directly, it can fill inventory with Google ads. But what does that mean when NYTimes.com and Google have the same relationships? 4. If sales channel conflicts are not resolved, is interactive display advertising pricing now destined to drop? By its total mass and targeting capabilities, Google is able to deliver effective CPMs to publishers through AdSense which are impressive, and they are well below general CPMS. Why would this not continue, and increase pricing pressure? 5. What fire walls, if any, will there be between DoubleClick publisher audience data and Google's? Google will have incredible insight into the ad sales/inventory of every publisher that uses their combined tools. Is this a good idea? Will publishers balk or rebel? 6. Are small ad network/rep firms dead? Given the ease, efficiency, quality of brands and relative pricing of Google for small publishers, what is the future of Burst, Tacoda and the mom and pop shops? 7. Are larger ad networks commoditized and also subject to pricing pressure?To watch the stock market today, these companies have been rewarded. But that may be the halo effect of a big price for DoubleClick. If you were AOL -- which uses Doubleclick for its ad-serving and sank a fortune into advertising.com -- are you sleeping better or worse tonight than a week ago? Let me tell you, any time one can consolidate a growing industry with less than 2% of one's market cap one should do it every time. And while Yahoo and MSN are hardly out of the running, they are going to eat more dust than they expected from the "shock and awe" of this deal if, for no other reason, they couldn't get their hands on a significant strategic asset for themselves. Forgive me for falling back on my Washington experience here, but if we've learned anything about "shock and awe" in recent years, it is this -- its extraordinary short-term dominance can be dwarfed by longer-term unintended consequences. The answers to my seven questions will shape our industry for the next decade.
I'm just a whiff (or a riff, depending on your proclivities) from New Orleans' famed French Quarter, ready to do my part to spread the gospel of WOMMA. Tuesday morning launched the Word of Mouth Marketing Association's WOMBAT conference, which promises to help this fast-growing group of converts "master the art of word of mouth, viral, buzz and blog marketing." Now I've schmoozed my way through more than a few conferences in my time. But WOMMA feels different. While there are the occasional acknowledged rockstars, no one so far has actually acted like a rockstar. Everyone is mixing, matching and helpfully dispensing the proverbial nuggets of wisdom in a truly democratic and uber-practical fashion. I've marched out of every seminar with information I can use right now, today, to make my business better and my clients' business better. That may be why the big guys are showing up in record numbers -- including reps from A&E to Coca-Cola North America to Energizer and GE, Intuit and Jet Blue, Nintendo, Nestle, Rustoleum, Warner Music, Dow Chemical and Yahoo. Like many of her fellow marketers, Energizer's Beverly Berkenfeld is at WOMMA as something of an advance scout. The company knows they need to be involved; what Beverly takes back from two days of buzz boot camp will help them navigate the increasingly treacherous ethical waters already tainted by the occasional WOM gone bad. (On the subject of negative WOM, tune back in later this week for the customer-savvy mea culpa delivered by JetBlue's Director of Marketing.) What's clear once you're here, aside from the deluge of Po-Boys and deep fried everything, is that "Word of Mouth isn't just a marketing technique - it's a fundamental way of doing business," said Ed Keller, President, WOMMA Board of Directors in his welcome speech. I agree wholeheartedly. That's why I'm now off to a seminar called: How To Do Word of Mouth: 40 Ideas You Can Act On Tomorrow. I promise I'll share.