Interpublic, the de facto source for Madison Avenue's official industry growth estimates for more than half a century, is radically changing the way it calculates advertising, categorizes media spending, and even how it defines media. In a complete overhaul of its methodology being unveiled during a webinar this morning, Brian Wieser, director of global forecast for Interpublic's Magna unit, has shifted from an ad industry-centric, "bottoms-up" model for calculating U.S. and global ad spending to one that takes a top-down view analyzing the advertising revenue reported by the media industry. The new method also revises many of the underlying definitions of media, incorporating newer ones like online search for the first time, and realigning others into discrete categories based on "national," "local" and "direct" media. The changes are the most significant since Interpublic began tracking and forecasting the advertising industry's growth during its post-World War II boom years, and reflect underlying shifts in the advertising and media industries. The changes are likely to impact a wide range of stakeholders ranging from Madison Avenue to Wall Street to individual media companies, and even the U.S. government, which has incorporated Interpublic's data as part of its official estimates for U.S. industrial growth. But Magna's Wieser, who will also be releasing the new mathematical model he is using for public scrutiny and application, argues the shifts will make the ad industry's estimates more accurate and more representative of the real world of advertising commerce. "No advertising agency holding company actually touches every single piece of the media economy. There are small- and medium-size enterprises that account for a quarter of all advertising. That's a million small advertisers, and there is no single entity that could possibly know all of that," Wieser says of the methodological shift. Consequently, he says that relying on data aggregated from what advertisers and agencies spend on media - whether it is from their own internal sources, or from industry ad monitoring services that typically derive it based on "rate card" estimates for the cost and volume of ad spending - Wieser says the new approach calculates advertising volume based on the actual revenues reported by media companies, trade associations and other sources, that capture more of the totality of advertising spending. The approach makes sense, and will likely radically shift the official volume estimates for certain media as a result. Take online search as an example. Madison Avenue's big agency holding companies still account for a mere faction of total search advertising volume. The vast majority of search advertising buys comes from small- and medium-size advertisers, often mom-and-pop organizations that have been dubbed the "long tail." Relying on Madison Avenue's intelligence for calculating search advertising volume would likely be less accurate than utilizing empirical, publicly reported advertising revenue data from big search engine operators such as Google, Microsoft, and Yahoo. The same thing is true for other big media, and even though Madison Avenue may dominate more of the supply of advertising sales for media such as TV, radio, newspapers or magazines, Wieser says their publicly reported revenue data still is more accurate than relying on "rate card" estimates derived from agency and advertiser sources. While many media companies are not publicly traded, Wieser says there are other good sources, such as trade association compilations, that help fill in the gap in his new model. And where there are voids, he says, Interpublic will utilize other proprietary factors, judgment and common sense. Fundamentally, he says, it is easier and more accurate to track, model and forecast advertising volume based on the share of advertising going to specific media and media companies than it is to rely on what agencies, advertisers, and third-party syndicated monitoring firms, estimate. He concedes that some media are more opaque in the new methodology than others. Many big consumer magazine publishers, for example, are privately held, and don't report their advertising revenues or share publicly. Another big problem Wieser had to deal with, was the "double-counting" that has occurred when advertising expenditures traverse traditional silos of media. Take newspaper publishing as an example. A newspaper like the New York Times began as a local newspaper publisher, and its revenues rightly fit into the local newspaper spending category. But over the past decade, the Times has essentially evolved into a national newspaper, and has now been regrouped into that category along with other national papers such as USA Today and The Wall Street Journal. Meanwhile, Wieser says he has taken another form of newspaper advertising revenues - their online publishing sales - and stripped them out of their newspaper industry estimates and put them into online industry estimates instead. And not simply under one online banner, but into discrete buckets of "local online" and "national online" advertising, depending on their source. Wieser concedes the method is not perfect, and that it will likely evolve over time as new media emerge, and as older media adapt, and as the industry redefines the nature of both media and advertising. But he says utilizing an adaptive, open source model, is the most accurate and holistic way of forecasting the growth of an industry that will likely be in a state of constant flux. Importantly, Wieser says key stakeholders are welcome to access Interpublic's model, and to factor it for their own purposes and perspective. He says certain "power users" of the data, especially big Wall Street firms, venture capital companies, and media companies trying to launch new advertising-based enterprises, are likely to do so, because they have so much at stake in projecting future advertising trends, shares and volumes. To help the industry transition to the new methodology, Wieser has gone back and readjusted Interpublic's historical advertising estimates going back to 1980 based on the new model. And in another significant change, he has gone back and estimated the industry's quarterly growth estimates going back to 1990, and will begin reporting them quarterly beginning with Interpublic's next new forecast being released on Monday, July 13th. Wieser says the shift to quarterly forecasting and revisions is essentially, because the advertising and media industries have grown more dynamic since Interpublic's McCann-Erickson unit first began tracking the industry's volume back in the 1940s.
WPP Group CEO Martin Sorrell steered clear of suggestions that the worst is in the rearview mirror, offering a bearish outlook on the economy and ad market this week. One reason: the Obama administration's economic-recovery package may not have produced anticipated results so far. "I think there is a bit of a feeling that the fiscal stimulus [that] has been put into place -- as yet -- is not working," Sorrell said in an interview on CNBC. "Generally, I think the feeling on both sides of the Atlantic," he added, "[is] that things are not going quite as right as people thought they were when the stock market started to move a few months ago." Sorrell said he believes there is a growing sentiment -- which he expects to be echoed at the current G8 summit -- that "there is a need ... for a little bit more" in terms of a government-sponsored economic injection across the Atlantic. Sorrell is attending the Allen & Co. conference in Idaho with other top media executives. As for the ad market, he said there has been "no real recovery yet." Business in April and May has been worse than it was in the January-March period. Sorrell said figures for June have not come in, "but I doubt whether we'll see the pattern change." While some other media executives have suggested the bottom has either been hit or is in sight, Sorrell said: "The general feeling is a little more downbeat than it was a few months ago." He suggested 2010 could bring an "anemic mild recovery," while he tiptoed into a prediction that the second half of this year would top the first. WPP, he said, is girding for what may be an even longer-term downturn by seeking growth from expanding its digital operations, buttressing its businesses in emerging markets and building up its research segment. About one-quarter of the holding company's business comes from its digital operations, which Sorrell said he hopes will rise to one-third or more. Emerging markets account for a bit more than a quarter (27%) now. As for research and consumer insight, where WPP acquired TNS last year, he said: "We think clients are very focused, particularly in these difficult times, understanding what consumers ... are thinking about, what we are driven by or not driven by -- trying to understand that in better detail." WPP spends $850 million a year buying search ads on Google, Sorrell said-- adding that the business is less expensive than "old media," making it enticing to advertisers. But "we still don't know from a measurement point of view how much more effective [it] is or not."
Building on an earlier deal, electronics retailer Best Buy has struck a broader partnership with digital video recorder company TiVo. Part of the new agreement will have the two companies developing a new cable set-top box, sold in Best Buy stores, that allows the retailer to deliver its own advertising message to TiVo subscribers. Previously, both agreed to a distribution deal where the retailer would sell TiVo DVRs. As part of this new agreement, Best Buy has agreed to heavily market the sale of TiVo machines in its 1,100 stores in the U.S. Best Buy will also look to finance efforts to bring TiVo's highly touted software onto its own line of products, under its Insignia brand line of TV and electronics. According to reports, TiVo will also make Best Buy's Napster audio service available to TiVo subscribers. Last fall, Best Buy acquired the music subscription service Napster for $121 million. Chris Homeister, senior vice president of entertainment at Best Buy, said in a press release: "Best Buy and TiVo together will open up a variety of new ways for consumers to get the most out of their entertainment experience, have more digital content choices, and get on-demand access to Best Buy's trusted perspective in consumer electronics." Owners of broadband-connected TiVos can also view YouTube, download movies from Amazon.com and stream movies from Netflix.
Indoor Direct will add content from Major League Baseball to its place-based network, which is available in quick-service restaurants. The company, which several months ago received a significant infusion of venture funding, has a deal with MLB Network for the programmer to deliver behind-the-scenes footage, player interviews and other short-form content to theBITE Network. BITE is rolling out to digital screens in some 320 Hardee's establishments under a recent deal, joining a growing number of locations in multiple other chains with the monitors, including Wendy's and Arby's. Content is a 60-minute lifestyle show that plays in a loop with topics ranging across entertainment, news and sports -- a new version is produced each week. MLBN short-form pieces will find a place under the sports umbrella, where NFL Network is also a content provider. As part of the deal, MLBN will also be able to weave in promotions for its own programming. Indoor Direct, which received up to $22.5 million from several venture-capital firms earlier this year, pays for the installation of the screens and sells the bulk of the ad inventory. It does give the restaurant some time to plug its offerings and a cut of the ad revenue. Besides the NFL coverage, MLBN clips will be joining bite-sized content from other providers, ranging from TNT to MTV.
The financial pressure on big newspapers is threatening to undermine their editorial integrity, with the business side, desperate to shore up collapsing revenues, exerting unwarranted control over newsroom operations. Newspapers are for-profit businesses, and there has probably always been some dubious influence by business execs on editorial; for example, telling journalists to be less critical of important advertisers. However the open nature of the recent transgressions (and attempted transgressions) suggests it is happening more frequently, and with fewer reservations, as newspapers' financial distress worsens. In the most recent and perhaps most egregious example, The Washington Post offered lobbyists and other interested parties the chance to "sponsor" informal, private dinners with politicians, hosted by editor Marcus Brauchli. The "sponsorship" fees for these influence-peddling events would range from $25,000 to $250,000. (Calling them "salons" did nothing to cover up the fact that The Washington Post was selling access to politicians, who were presumably prepared to play along in return for a cut of the cash or favorable coverage). Beyond the mere sight of a journalistic icon prostituting itself, one of the most disturbing things about the ill-conceived pay-to-play idea was the brazen disregard for the newspaper's reputation. To keep the venal scheme "on the down low," one might expect invitations to be offered hush-hush to specific individuals, whose discretion could be trusted. Instead, The Washington Post's marketing staff actually produced a brochure promoting the events, inviting all comers with cash in hand. Furthermore, the lame excuse offered by publisher Katherine Weymouth after the plan was exposed -- "The flier was not approved by me or newsroom editors, and it did not accurately reflect what we had in mind" -- does nothing to restore confidence in the editorial integrity of the newspaper. It merely begs the questions: Where did the marketing staff get such a crazy, questionable idea? How can it arrange personal meetings for editors and journalists without their knowledge and consent? What exactly did Weymouth have in mind? Ultimately her non-apology -- like the euphemizing term "salons" -- comes across as disingenuous, dodging the $250,000 question: Was The Washington Post prepared to help lobbyists gain simultaneous access to politicians and journalists in return for money? It appears so. Editorial integrity is obviously of special importance when it comes to politics -- which not coincidentally, becomes one of the first targets for subjects who receive unfavorable coverage. For example, in Southern California, the San Diego Union-Tribune came under pressure from one of its new co-owners, the public safety association representing Los Angeles police officers, which wanted to muzzle op-ed contributors critical of the role played by public employees' unions in the budget process. (After a drawn-out auction with little interest from buyers, the San Diego Union-Tribune was finally purchased in March for an undisclosed sum by Platinum Equity, which included a $30 million investment from the pension fund for the LAPD, under the management of the Los Angeles Police Protective League.) The editorial page of the Union-Tribune, a traditionally conservative paper, has been especially strident in denouncing public employee unions. In response, the Protective League has used its new partial ownership to put pressure on editorial bosses to either stop publishing critical op-ed pieces, or simply fire the offending columnists. Sergeant Paul M. Weber, the Police Protective League president, complained in a public letter posted on the League's Web site that the San Diego Union-Tribune "has one of the most virulently anti-public safety employee editorial sections of any newspaper in California, if not the country." Further, in a letter delivered to Tom Gores, the president and CEO of Platinum Equity, Weber wrote: "Since the very public employees they continually criticize are now their owners, we strongly believe that those who currently run the editorial pages should be replaced." For the time being, Platinum Equity appears to be resisting the pressure. Similarly, in December 2008, it was revealed that former Illinois Governor Rod Blagojevich, now on trial for corruption, tried to force the Tribune Co. to fire columnists who were critical of his plutocratic administration. To pressure Tribune boss Sam Zell into agreement, Blagojevich threatened to hold up the proposed sale of Wrigley Field (part of the Chicago Cubs property) to the Illinois State Finance Authority, an idea first suggested by Zell in the summer of 2008. Although Blagojevich believed that Zell would comply with his demands, the columnists were never fired. A few months later, the back-channel negotiations were brought to light after Blagojevich's arrest, when federal investigators released incriminating transcripts of wiretaps on Blagojevich's phones. The failure to sell Wrigley Field was a factor in forcing Tribune to file for Chapter 11 bankruptcy protection. Leaving politics aside, the Chicago Tribune and the Los Angeles Times, also owned by Tribune, have recently been troubled by initiatives from the business side that the editorial side contends undermines the integrity of the publications. Two months ago, 55 reporters and editors at the Chicago Tribune signed an email to editor Gerould Kern and managing editor Jane Hirt accusing the paper's marketing department of surveying subscribers about unfinished stories to gauge their reaction -- laying the groundwork for deciding which articles will be published based on market sentiment. The marketing surveys were nixed, but editorial staffers never found out whether articles were changed or canceled because of responses to these surveys. This came not long after newsroom staff at the Los Angeles Times lashed out at management for allowing an ad resembling an article on the front cover of the newspaper. The ad, for NBC's new LA police drama "Southland," was run over the objections of editor Russ Stanton and a dozen other senior editors. In an interview with TheWrap, LAT Executive Editor John Arthur called the front-page ad "horrible," "unfortunate" and "a mistake." The conflict between editorial and business operations at the LAT has been long simmering. Last summer, the original Los Angeles Times Magazine was closed and replaced by a new publication, with a new editorial staff, entirely under the control of the Los Angeles Times Media Group. In short, control of the magazine came from the business -- not editorial -- side. For ethical reasons, Stanton requested that the Media Group not call itself the Los Angeles Times Magazine, since it is not under the control of the newspaper's editorial staff. The new publication was given a slightly different name: L.A. Los Angeles Times Magazine. Recently, however, John T. O'Loughlin, the executive vice president and CMO for target media at the LAT Media Group, referred to the magazine as a "flagship publication" of the newspaper.
American Media is launching a new magazine devoted to ultimate fighting in partnership with the Ultimate Fighting Championship. The new title, UFC, will be unveiled at the UFC 100 event July 11 in Las Vegas. It will also be distributed nationally on newsstands and other UFC-related events, with promotion via television, email and news posts on UFC.com, which attracts about 6 million unique visitors per month. Despite the sour economy, the new title has had some success in attracting advertisers, according to AMI, which says the first issue boasts a total of just over 53 ad pages versus an expected 37. AMI attributes this to the precise targeting of the young male demo. By the same token, this targeting has drawn interest from a broad range of advertisers, from automotive and gaming to grooming and apparel. Inaugural advertisers that will appear in the first issue of UFC include Bodybuilding.Com, Bud Light, Dickies, Ford Mustang, General Cigars, GO Rhino, Hard Rock Hotel, Harley Davidson, HBO, JVC, Spike TV, Topp's, and a wide array of nutrition supplement manufacturers. The cover of the first issue features UFC founder Dana White. Working Mother Teams with Kraft Working Mother is introducing an innovative new campaign for Kraft targeting the nearly 20% of working mothers who are too busy to eat lunch. The campaign for Oscar Mayer's Deli Creations uses both print and online components, including a survey, contest and a co-branded event hosted by Working Mother Media President Carol Evans. Evans said the campaign reaches working mothers "at work, at home, online, in-book and with a program that underscores their hunger for information and tips that help their daily lives." The online component included an online poll, which was promoted by a full-page "advertorial" in the magazine. Travel + Leisure Opens Retail Stores in Airports Travel + Leisure, a publication of the American Express Publishing Corp., is partnering with the Hudson Group to launch new, Travel + Leisure-branded stores at JFK airport in New York, as well as airports in Vancouver and Halifax. These flagship stores will be followed by smaller "stores-within-stores" at airports in Orlando and San Francisco. The Travel + Leisure stores will carry luggage and travel accessories, local maps, travel guides, as well as the current issues of Travel + Leisure and Food & Wine, an Amex sister publication, along with books produced under those brands. Meredith Appoints Harty President of Consumer Magazines Meredith Corp. has appointed Tom Harty president of consumer magazines. In this position, Harty will retain his responsibilities as chief revenue officer and executive vice president of the Meredith publishing group. Among his contributions was the creation of Meredith 360, which helps advertisers create integrated campaigns across different media.
A day after the Michael Jackson TV memorial, the battle of the summer's top reality show resumes with NBC's "America's Got Talent" taking top honors. "Talent" took in a Nielsen preliminary 3.3 rating/10 share among 18-49 viewers. This topped the second hour of Fox's "So You Think You Can Dance?" which earned a 3.0/9. But Fox's consistency gave the network the Wednesday night win -- with its 8 p.m. hour of "Dance" reaching a solid 2.8/10 among 18-49ers and an even-better 2.9/11 among young 18-34 viewers. Fox averaged a 2.9/9 for the night among key 18-49 viewers and a 3.0/11 for 18-34 audiences -- both tops among all broadcast networks. ABC's well-performing reality competition show "Wipeout" went toe-to-toe with "Dance" at 8 p.m., earning the same 2.8/10 among 18-49 viewers. But its "I Survived A Japanese Game Show" could only muster a modest effort, getting to a 1.5/5 during the 9 p.m. hour. Two original episodes in the 10 p.m. hour from the networks resulted in ABC's "Primetime: Crime" winning the time period, possibly getting some draft from the still-vibrant Michael Jackson effect. At a 2.0/6 among 18-49 viewers, the show jumped 42% versus a week ago. NBC's scripted "The Philanthropist" offered up a simple 1.4/4 rating, coming in at third place after CBS' "CSI: NY" repeat, which took a 1.5/5. ABC and NBC ended the evening in a tie for second place, at 2.1/7. Univision and CBS were tied for third, at 1.3/4. With a two-hour "America's Next Top Model" repeat, CW earned a 0.4/1 for both its 18-49 and 18-34 viewers.
In a bid to make news content published online more accountable, more relevant and eminently more readable and valuable, London-based publishing advocacy group Media Standards Trust has teamed up with the Associated Press to promote a new news "microformat" encapsulating standardized information about every news story published online in their meta data files. The move follows Google's decision last May to begin supporting microformats in the snippets of news search results. The new proposed microformat would include critical information about news stories, including: * What the story is about * Where it was written * Who wrote it * Where it was published * The news principles it adheres to (if any) * Any usage rights associated with it The organizations said the news microformat is non-proprietary, open source and is being offered as a standard for anyone publishing news content online. It is already being piloted by human rights advocacy group openDemocracy.net, and is being tested on all of the AP's text-based news content. The AP's stories are available in the new format via the AP Developer API, which also is in beta testing, and AP's Web Feeds platform, an Internet-based distribution platform for AP.