Race On: Will the media outpace U.S. GDP growth as Veronis forecast?
The world is a wonderful place if you’re in the U.S. media business, according to the mid-term update from Veronis Suhler Stevenson.
The private equity firm forecasts the U.S communications industry–which includes everything from Hollywood and cable to education publishing and Yellow Pages–will grow faster than the U.S. economy in 2012. The total communications industry is project to grow by 5.6 percent compared with 4.4 percent GDP growth for the United States.
In particular the top performing segments will include what VSS calls Pure-Play Consumer Internet & Mobile Services, up 18.1 percent, Public Relations & Word-0f-Mouth Marketing, up 14.6 percent and Broadcast TV, up 9.3 percent. Subscription TV is expected to grow by 7.7 percent while branded entertainment is forecast to grow 7.5 percent.
Unsurprisingly, those that will underperform the economy and be down frm last year include consumer magazine publishing, down 2.2 percent; newspapers, down 3.8 percent; and local consumer directories, down 5.6 percent.
But the U.S. economy is far from easy street with uncertainty around the November elections and unemployment still stubbornly high as the improvements are slow and unsteady. This could prove VSS right in one way: the media business, which books a lot of its revenue up to two quarters upfront, will likely outpace the U.S. economy even if there’s a sudden downturn (most of the media business sector companies have betas averaging between 1.3 to 2.0 according to this NYU data sheet). On the other hand some analysts are concerned 2012′s growth outlook is unlikely to match 2011′s and then some stalwart engines of cash growth like cable TV might not do as well as usual.
from Paul Smalera:
The recession killed journalism – and saved it
Over the last few years, thanks to the global economic crisis – encapsulating everything from the 2008 housing crash to today’s ongoing euro zone sovereign-debt debacle – much ink has been spilled about the reshaping of the world’s economy, especially about the domestic job market.
Actually, scratch part of that last sentence, because less ink has been spilled, at least according to the results of a recent report by LinkedIn. The media business has been in overdrive, especially during this 2012 election season, but it’s now pushing pixels, not paper.
According to the data studied by LinkedIn, the professional social network, the newspaper industry experienced a 28.4 percent shrink rate between 2007 and 2011. The death of newspapers is not exactly a new phenomenon, so I’ll spare you yet another detailed recap of the print and economic climate that led to this broadsheet apocalypse.
But contrast newspapers’ huge drop with the gain experienced in the second-fastest-growing industry, according to the same LinkedIn data: online publishing. New-media companies posted a staggering 24.3 percent gain, coming in only behind the “Internet” overall. Look at the chart below and compare the green online publishing dot with the red newspaper dot.
In other words, reports of the media’s death are premature, at best. But more important, it’s unfair for any old-media advocate to say that the revenue model for media (or any industry moving toward digital) is broken. Yes, the companies and publications that power media look quite different than they used to, but these news organizations are still reporting the news.
And that truism is at the crux of why newspapers are in a bad spot. They have been trapped in a terrible mindset that they are in the business of selling newspapers. The leap from paper to digital may be vast, but to newspaper publishers, it seemed like vaulting to a different business entirely, one they were loathe to get into. No matter what kind of lip service newspapers paid to the digital transformation, the most prominent paywall model out there, that of the New York Times, still protects print subscriptions with a tiered digital pricing strategy – one so annoying that it motivated its former digital design director to complain publicly about the entire signup process.
Come on now, who are we kidding here? The people that sit on the media boards today are the same people sitting on the oil and pharmaceutical boards. They are the same people who organize political fund raisers.
Instead of investigative reporting we get pathetic drivel such as this entire article. ‘Journalism’ died because journalism died. The author of this article does nothing but hammer the point home.
Why can’t Facebook and Twitter say the A-word?
What’s the most uncool word in social media?
Just look at the pains the top social networking companies take to avoid uttering the dreaded term.
Twitter started the trend when it rolled out its advertising products in 2010, which it dubbed “promoted Tweets.” Chief Executive Dick Costolo (who was COO at the time) insisted that the marketing pitches coming to Twitter were not ads at all – they were simply standard Twitter messages that companies could pay to promote.
Now Facebook, which derived 85 percent of its revenue from advertising last year, has developed a similar aversion to the A word.
At a splashy marketing event in New York on Wednesday, the company introduced a new ad format that will allow big brand marketers to push information directly into users’ newsfeeds and onto other prominent on-screen real-estate. The word “advertising” was conspicuously absent from the somewhat vague name of the new ad format: “Premium on Facebook.”
Facebook executive Mike Hoefflinger (pictured, right) even delivered a whole on-stage spiel about why Facebook’s new ads were in fact not ads, but “stories.”
Social networking sites such as Twitter and Facebook, that refuse to claim advertisement where it exists, aren’t fooling anyone. Advertising by any other name, is still advertising. The fear of backlash for advertisements on these sites is what leads them to use terms such as “promoted tweets” or “stories.” These sites are supported by advertisements, which is what allows users to access them for free. These sites should practice transparency with their business and advertising instead of beating around the bush.
Nearly every Super Bowl commercial, in one post
We are compiling all the Super Bowl commercials here so you don’t have to. Once we’ve got most of them, we’ll ask you to vote which one you think was the best. In the meantime, post what you think about the ones we have here in the comments below.
Aliens star in an ad for the Chevrolet Volt electric car
Matthew Broderick returns to his Ferris Buehler roots in this Honda commercial
Jerry Seinfeld shows up in a number of Acura ads.
Regis Philbin appears in a commercial where a Coke salesman wins free Pepsi.
Kraft will debut a new breakfast food called “belVita”
A car shopper’s conscience unleashes his inner-Disco for Cars.com
Where is the Southwest commercial that ran in So Cal?
Viacom chief Dauman plays down Nickelodeon ratings dip, sees more ads
Viacom Chief Executive Phillipe Dauman tried to play down the Nickelodeon surprise double-digit ratings drop in September as a Nielsen glitch which is being worked on and would not impact the upcoming quarter.
Dauman, speaking at a UBS Media and Technology investment conference, expressed his frustration at the issue but said there was little that could be done about it at this stage. He said “Nielsen is the only game in town”.
He described the timing as unfortunate coming in the crucial September quarter ahead of the holiday season.
Dauman said the current quarter was looking a lot better
“The dynamics are good as we look to the next quarter we expect to see strong ad growth. We’re feeling very good about the transition from this difficult situation that we had.”
As Nike sticks by a tarnished Penn St., others flee
The last 10 days have obviously tarnished the Penn State brand, and left advertisers, sponsors, and others closely associated with the university and its football program with some tough questions. Boiled down, it amounts to this: How far should you go to distance yourself from the crisis?
Fallout has already been heavy, so much so that Penn State has hired Ketchum to help the university navigate through the mess. Yet this may be one of those cases — and there are many — when the big PR firm is brought in too late.
“Penn St. has been incredibly tarnished, it’s a huge hit to that brand,” says Paul Pierson, a partner at branding and design firm Carbone Smolan Agency. “Some of the most damaging things to the brand have already done, like the outpouring of support from the Penn State students for Paterno after the firing,” he adds. “That made it look as though the school cared more about football than ethics.”
Now the university is apparently considering removing its stadium’s statue of Paterno, who was head coach of the Nittany Lions football team from 1966-2011. (A columnist for CBSSports.com, @greggdoyelcbs, Tweeted that Penn St. professors have told students that the statue will come down over Thanksgiving). Paterno’s name has already been removed from the Big Ten’s championship trophy. And all traces of former Penn State assistant football coach Jerry Sandusky — the subject of the child abuse accusations — are hurriedly being erased. (The picture at left shows artist Michael Pilato painted over the portion of his mural that showed Sandusky).
Keep in mind Paterno and the football team were once the university’s best marketing tool. Just ask Nike, which has continued to stand by the university and its former coach. It has long been Penn State’s footwear and uniform supplier.
How closely is Nike sticking with the school and its former coach? To the amazement of many, Nike hasn’t indicated any plans to change the name of its Joe Paterno Child Development Center, a daycare facility on its Beaverton, Oregon campus. In a statement, Nike said, “Our relationship with Penn State remains unchanged. We are deeply disturbed by the claims brought forth in the indictments. We will continue to monitor the situation closely. We have no current plans to change the name of our child care center.”
Forbes writer Clare O’Connor ran all this past Prevent Child Abuse America’s CEO James Hmurovich, who said the following: “What allegedly happened at Penn State should outrage our nation, and to find that a national brand will not distance itself from Penn State and Joe Paterno in this situation is equally disturbing.”
Boycott Nike! Shut Down Penn State! The reason Nike won’t shut Penn State out is beyond belief. Still supporting this sickness is despicable.
Perrier wants to tell you where to go out tonight
By James Ledbetter The views expressed are his own.
Last year on a drizzly Seattle morning I visited the corporate headquarters of Starbucks to talk about social media. At the time, Starbucks had about 2 million of what were then called “fans” on its Facebook page. That audience was both large and engaged enough, a company representative said, that Starbucks had recently been approached by another firm that wanted to advertise specifically on the Starbucks Facebook page. Starbucks declined the offer, but only after serious consideration. “We had to decide if we really wanted to be on that side of the publishing business,” the representative told me.
It’s a striking reminder that in the Twitter-and-tablet age, not only can anyone become a publisher, but for big consumer-facing companies, the real question is: how much of a publisher do you want to be? The question carries an added weight when you consider how many traditional publishers these days are trying to exit that business.
Non-publishers becoming publishers is not new. For twenty years, the Italian clothing retailer Benetton has put out a magazine called Colors. Richard Branson had a buzzy launch for his “Project” magazine/app last year. One of the more ambitious and technologically sophisticated efforts of recent years has been American Express’s Open Forum which — in addition to aggregating (usually small-business-related) content published elsewhere — has commissioned videos from traditional media outlets and then distributed them through a Web ad platform. (I made a few such videos at a previous job.) The advantages are obvious: unlike an ad placed in a magazine or on TV, the company gets to control how much or little integration with the content it wants to have, or even control the content altogether.
Yet even with such precedents, it’s rare to see something as sweeping as the Web site Société Perrier, which describes itself as “a global source for everything interesting in art, music, fashion, travel, nightlife and cocktail culture.” If you want to know who’s playing this weekend in Dubai, or how to get into a “secret bar” in Moscow, you can find out from this site, which is 100% produced by the company that’s sold fizzy water for more than a century (and in 1992 became part of Nestlé). At least half a dozen staff editors run the site from New York, L.A. and London, and dozens of others contribute on a freelance basis.
To hear the company tell it, Société Perrier is an urgently needed solution to an image problem. Perrier has to “recover its iconic status,” Jorge Torres, marketing group manager for premium brands at Nestle Waters, told me. “It’s a little bit old, and a little bit dusty.” The answer to that problem is usually the same — engage the younger consumer — but if everyone knew how to quench that thirst, Perrier wouldn’t be in this position today. Within the United States, the challenge is even larger, because our tastes are increasingly domestic. While the U.S. continues to be the world’s biggest market by volume for bottled water — and Nestlé the biggest player in it — U.S. sales of imported water are down 44% from their peak in 2004, according to the Beverage Marketing Corporation.
Perrier, then, needed to find a way to be both global — where Perrier is still growing — and local. Torres says the site actually grew out of a realization that Perrier was contributing to a number of interesting cultural events and institutions all across the world, and there was no central place to promote them all. Using the marketing budget from the bigger markets to create a platform that could highlight what was happening in places like Sao Paolo or Toronto with fewer resources just made sense. Michael Blatter, whose Mirrorball agency helped strategize the site, says: “Société Perrier has global presence with local activation.” The target, Torres says, is the “social hedonist,” whom Perrier wants to reach at every decision point, including what-should-I-do-tonight?
what a scam the main business is!? transporting water from perrier, france to 1000s of miles away for drinking, not because there is no drinking water there, but to make a profit despite of being vastly resource wasteful.
Confused about media and ad technologies? There’s a Lab for that.
Between the bazillion ad technology companies all claiming to revolutionize online advertising and an explosion of devices and services that promise to deliver movies straight from the Internet to the TV, it’s a full time job keeping tabs on what can do what.
That’s why Interpublic Group’s Mediabrands launched Media Lab last Thursday, a 5,000 square foot space dedicated to learning and figuring out which end is up with various technologies available to marketers.
IPG vets technology before it can even make it to the front door of the Lab — meaning just because it’s out there doesn’t mean it makes the cut for testing. More than 500 companies are in its database and the Lab keeps in radio contact with venture capital firms and emerging media and tech related companies both large and small to stay on top of trends.
During a recent tour of the Lab in mid-town Manhattan — it targets high level chief marketing officers who usually make the rounds in a four hour stint — this reporter was greeted by a television screen that switched its programming based on gender facial recognition.
There was the room with a nice comfy sofa in front of several flat screen TVs that had just about every kind of over-the-top service, including Google TV and its one very confusing remote. There was a mock retail store that showed off technology that helped clerks stock popular items (and those less popular). And a mock store-front window that showed off the latest collections inside and allowed people to order clothes right off the window — even if the shop was closed for the day.
The Lab isn’t just there to show off. It’s also expected to pull its weight within IPG and help make money for the colossal ad holding company, Matt Seiler, global CEO of Mediabrands, explained. For instance, the Lab is very much a VAR (tech parlance for “value added retailer’) selling the technology to marketers as a third party vendor. It also makes money by consulting with brands.
Are kids wringing out SpongeBob?
Back in September, right before the quarter ended, Viacom trimmed its advertising revenue outlook to high single digit growth from double digit growth. One of only a few media conglomerates to take that step–News Corp, Time Warner, and CBS were much more upbeat–the move prompted some concern among media watchers that advertisers were beginning to slash their budgets on macro-economic concerns.
But that wasn’t the case. It turns out the problem was Viacom specific. As the Sumner Redstone-controlled company disclosed during its fiscal fourth quarter results Thursday, domestic advertising revenue growth slowed in part because of a mid-September ratings plunge kids network Nickelodeon. Total domestic ad revenue across Viacom’s cable networks, which also includes MTV, VH1, and Comedy Central, for FQ4 was up 7 percent versus the third quarter’s climb of 12 percent.
What’s more is that Viacom CEO Philippe Dauman threw audience measurement company Nielsen Co under the bus on Thursday’s earnings call, saying the ratings drop at Nickelodeon was “inexplicable.” He said Nielsen’s data did not match Viacom’s own set top box data for viewers. The company is currently in discussions with Nielsen– the dominant company that tracks TV ratings that determine ad rates — and the watchdog organization Media Ratings Council to resolve the situation.
Here’s Dauman on the call: “Let’s just say that we wouldn’t have had to have any conversatoin with either of them based on the set-top box data they are examining. That is the reason everybody believes there is an anomaly.”
Nielsen responded with this statement: “It is the longstanding policy of Nielsen not to comment on specific client business issues. As Viacom stated on their earnings call this morning, we have worked closely with Nickelodeon and the Media Ratings Council to conduct an exhaustive assessment of the methodoligical and market factors reflected in national TV ratings. To date, the review process confirms that our measurement methodology, operations and related reporting processes are working as expected.”
Battling with media companies over ratings data is unfamiliar territory for Nielsen. Broadly speaking, the company has been criticized by some media conglomerates that claim its methodology for tracking consumers’ viewing habits is outdated. For instance, last November former NBC chief executive Jeff Zucker said Nielsen’s sample size was a problem, explaining that CNBC’s ratings fell after only three people were taken out of a 300-person Nielsen sample.
But, as it related to Nickelodeon, the problem may have nothing to do with Nielsen at all. Maybe it’s that children have turned against TVs. Hard as that is to imagine, that’s the takeaway from a note issued by Barclays Capital analyst Anthony DiClemente Thursday looking at a ratings rundown titled: “What are the kids watching these days?”
Washington Post: the latest example of print ad plunge
Just when you think things can’t possibly get any worse for newspapers, it somehow manages to get even bleaker. Today’s example is provided by the Washington Post Co and its flagship paper (and the online site Slate). The company reported third quarter earnings including results from its newspaper division today.
Print advertising revenue fell 20 percent to $57.6 million — quite a stunning plunge even as newspapers across the U.S. manage to post quarter after quarter of print ad revenue declines. Even more disturbing is that online revenue, which includes washingtonpost.com and Slate, plunged 14 percent to $23.3 million. Display online ad revenue dropped 17 percent.
The Washington Post is one of those curious oddities in the industry that manages to be extremely local — it’s market penetration of the D.C. area has always been one of the highest in the U.S. — and also draws the interest of a large national audience. So while it may compete with the “nationals” i.e. New York Times, the Wall Street Journal and USA Today, on the news front, it is very dependent on local advertising. The NYT, USAT and WSJ get a hefty portion of their advertising revenue through national advertisers.
The local advertising category hasn’t been holding up as well as national advertising. It’s taking it on the chin as the housing market struggles, unemployment remains high and retail outlets are going out of business or simply taking their advertising elsewhere.
That’s not to say that national advertising revenue isn’t hurting as well. It’s more of a mixed bag. At the New York Times, for example, the division that mainly includes its flagship paper reported advertising revenue fell 6 percent to $156.1 million in Q3.
Gannett, which publishes USAT, used to give some information on how that paper was doing by reporting paid ad pages, but the company ceased — to use the parlance of research analysts — to provide more color on the USAT front. Instead, Gannett reports that national advertising, including USAT, fell 17 percent. USAT represents a big chunk of Gannett’s national advertising.
The Wall Street Journal manages somehow to defy these trends. Ad revenue rose 13 percent in the third quarter– that includes print and online – according to a memo from Dow Jones’ top executive Todd Larsen to employees.
Hmmmm. Guess WaPo/Slate subscribers and readers are getting tired of paying for and reading biased reporting and outright lies, and the advertisers don’t want to waste their money in venues where readers and subscribers are fleeing in droves.
