Frontiers

  • by December 20, 2002

Cross-MediaInternet Claims Bragging Rights by Steve Smith, popeyesmith@comcast.net In its never-ending bid to become part of the media buying mix, the online sector is pushing those cross-media comparative studies faster than portals spew “sponsored” search results. TV tends to suffer most in this research. The July “DoubleClick Cross Media Reach Study” finds Yahoo! Search, Hotmail, or even Google and eBay have a larger audience than the top-rated “Friends” among the 18-to-49-year-old demo. Demonstrating apparently that you can add apples and oranges, the study gleans from Web, TV and magazine metrics Gross Ratings Points for the top 25 properties in each platform and then slices and dices the comparison across different demo cuts. The upshot is that top websites outperform TV by a wide margin among most audiences, while magazines continue to dominate on a GRP scale.

Far and away our favorite emerging platform for adding to the media mix is the ATM. Bank of America in California users recently enjoyed — well, they were exposed to — spots for Connie Chung’s new CNN show before putting their bank card into the cash machine. Talk about desperately trying to remember your PIN number quickly. BOA is selling 5-7-second spots and even uses CPMs for its metric. The ironic punch line is that AOL/TW, extending promotions perhaps to the only platform left that it can’t bundle for itself, is the first customer.

No word on whether ATM placements also get the new Ad-ID, the digital marking system that is being endorsed by the AAAA and ANA. This new coding system will centralize tags for ads placed across all media at www.ad-id.org. One would think that the onliners would celebrate this as a great step forward for cross-media plays generally and for their medium in particular, since the repository for all of this metadata is on the Web itself. But guess what? There was barely a mention in the Web press about it.

Is Bob Pittman’s resignation from AOL Time Warner the symbolic straw that breaks synergy’s back? After all, he was charged with bringing that disparate flock of properties together into a more sellable whole. Not surprisingly, his departure, plus continued misfortunes at AOL/TW and Vivendi, sparked another round of industry hand-wringing about the overhyped, generally unrealized promise of cross-platforming. A smart but discouraging piece by New York Times ad columnist Stuart Elliot showed that many advertisers are wary of media companies’ bundling into these deals their otherwise dormant inventory and packaging them with overblown pricing and extravagant promises. Those who are coming back for renewals, such as P&G with Viacom, have learned to take the lead in determining where and how their brands should be placed. Complaints and doubts notwithstanding, there still seems to be an air of inevitability to media conglomeration and synergy. Elliot vaguely cites “widespread industry estimates” that within the next five years 20% to 25% of big media’s ad take will come from multi-platform deals. Really? Quick, somebody call Pittman.

OnlineNowhere To Go But Up by Masha Geller, masha@mediapost.com It was supposed to be the year of the Internet rebound. After the dot-com crash, the recession and all sorts of other travesties, the web had nowhere to go but up, it seemed. But according to Nielsen’s new Monitor-Plus report released last month, that’s not happening.

The report shows an 8.4% drop so far this year for Internet advertising, compared with the first half of 2001. Considering that 2001 was really bad to begin with, this is not good news. The numbers are surprising especially since Yahoo! and several national new sites reported an upturn for the Internet ad business during Q2. But the Nielsen numbers say several advertisers have dropped from the top 10 compared to last year. Among them: eBay, Providian Financial, VeriSign and Ameritrade.

The Nielsen numbers are actually fairly optimistic, compared with the Internet Advertising Bureau’s predictions. According to the IAB, Internet advertising revenue in the U.S. totaled $1.55 billion for the first quarter of 2002, declining 6.5% from the 2001 fourth quarter, and down a whopping 18% from the first quarter of 2001.

Granted, the IAB’s revenue figure was estimated by surveying and compiling data from a group of leading Internet ad sellers, which have consistently accounted for the lion's share of 2001 revenues, but even as an estimate, the data doesn’t paint a pretty picture.

That said, fourteen top quality online content sites reported that their Q2 ad sales were up by a whopping 34.2% compared to the same quarter last year. The Online Publishers association says that year-to-date ad revenue grew an average of 33.5% compared to the same period last year for these publishers and total revenue among this group increased an average of 36.1% in the second quarter of this year compared to the same quarter last year, with year-to-date revenue growing an average of 33.7 %.

Streaming MediaCopyrights Revisited by Ken Liebeskind, kenl@mediapost.com Small webcasters, devastated by Copyright Arbitration Royalty Panel fees instated by the Librarian of Congress in June, breathed a sigh of relief in late July when three U.S. representatives introduced legislation that would exempt them from paying the current royalty rates. “We're very encouraged; the act does what small businesses need,” says Kevin Shively, director of media for Beethoven.com, a small webcaster that would benefit from the legislation. “It gives us a little breathing room. Now we can go back and get a result with more fair conditions.”

The Internet Radio Fairness Act would exempt small businesses with less than $6 million in gross revenue from paying the current CARP fees, which at 0.07 cents per performance are impossible for many small businesses to afford. The legislation would also change the way future CARP fees are structured, eliminating the “willing-buyer/willing-seller” standard in favor of the traditional standard enacted by the 1976 Copyright Act. The CARP fees were based on a “willing-buyer/willing-seller” deal between Yahoo! and the Recording Industry Association of America that opponents claim wasn't an accurate business model on which to base royalties. It was also a way for large companies like Yahoo! to “force small businesses out of the picture,” Shively says.

The fact that the legislation has support from both major parties may help it gain passage, according to Sara O'Connell, a spokeswoman for Rep. Jay Inslee, D-Washington, author of the legislation. She says the legislation was referred to the Judiciary Committee, which must decide whether to hold hearings on it before any congressional vote is taken. Congress was in recess in August, so nothing will happen at least until September. But the House has the power to postpone the collection of CARP fees without enacting the legislation, she says.

John Simson, executive director of SoundExchange, the organization that represents the recording industry and supports the fees, spoke out against the proposed legislation, saying it would “create an industry-wide exemption for webcasters that would let them deliver all the music they want without paying anything to creators.” But Shively criticized his remarks, saying the legislation “doesn't mean we won't pay royalties. It just means there will be a different determination of the rates.” And that is specifically what the proposed legislation says: “These small businesses will still be responsible for paying royalties for this period, but the royalty rates will be calculated under a new standard.” What the legislation really does is transform the way CARP sets the fees. Of course, it would also relieve small businesses from paying the fees temporarily, which means the issue remains unresolved, four years after the Digital Millennium Copyright Act that established the fees, was passed by Congress.

iTVDigital Deadline Looms by Lee Hall, lee@deadlinemedia.net We think Billy Tauzin really means it this time. The Louisiana Republican and chairman of the House Commerce Committee says he won't wait a minute past September 30 for some kind of understanding between broadcasters and the technology industry about how — and more importantly, when — they intend to deliver on digital television. Without digital conversion, there is little hope for the fully interactive services consumers are said to want.

Let's look back for a moment. In 1997, to speed the conversion to digital TV and ultimately to High Definition TV, the FCC gave local broadcasters a second television channel. It was to be a temporary solution to give broadcasters a chance to create a digital service. The FCC allowed for an eight-year transition. By 2006, TV households nationwide would be able to receive an over-the-air digital signal from somewhere. Assuming everything went well, the government would reclaim the loaned spectrum and sell it.

But things have not gone well. In 1999, allegedly knowledgeable prognosticators foresaw that millions of digital-capable TV sets would be in place within a few years. Strategy Analytics projected cumulative digital TV sales of 15 million by 2004. PriceWaterhouseCoopers was even more sanguine, predicting sales of 90 million by 2009. The reality, according to the ever-optimistic Consumer Electronics Association, is that fewer than 3 million digital sets have been sold so far.

You would be hard-pressed to find anyone who believes that the 2006 deadline can be met. Indeed, nearly three quarters of the 1,200 U.S. television stations failed to meet this year's May 1 goal to have their digital channels up and running. Which gets us back to the Tauzin mandate. In order to avoid congressional action, he warned, broadcasters and manufacturers must get a plan together by the end of September.

Despite his posturing, Tauzin does not likely possess a magic wand that he can wave and make all the issues go away. The price of digital sets remains high compared to that of analog models. Consumers still are not convinced the difference is worth it, and broadcasters have not decided how to make money from digital services. The slumping economy has complicated everything.

Perhaps the most difficult obstacle is the continued haggling among the numerous players over technical standards that would make digital television appealing to consumers while still preventing piracy, i.e., the unauthorized resale of digital programming. There has been some progress on a so-called “broadcast flag,” a code embedded within a digital signal that would inhibit recording, but the parties involved have not yet worked out all the details.

Tauzin and his congressional colleagues, meanwhile, want the FCC to reclaim the broadcast spectrum it lent to the broadcast industry. They believe it could be auctioned to other interests for up to $70 billion. It is clear, however, that no amount of verbal berating or threats of legislative directives will speed up this protracted process. Good luck, Mr. Tauzin. You'll need it.

Next story loading loading..