Cable TV ads didn’t crater in Q2 – Pali

It looks like cable networks advertising held up quite well, despite investors fears, says Pali Research’s Richard Greenfield.

“We are encouraged that all but two reported double-digit increases in advertising revenues; particularly in light of the weakening economic environment,” he writes on his blog, citing quarterly earnings reports. He expects growth to slow in the third quarter and a pick-up in the fourth.

His comments echo those of Gabelli & Co associate portfolio manager Larry Haverty, with whom we spoke right after Viacom reported a sharp fall-off in second quarter ad revenue at MTV Networks.

Here’s what Haverty told us:

I’ve seen it probably many more times than I care to. When you hit prior to the Olympics, advertisers get very conservative. They either are an Olympics sponsor or they run and hide. If you are looking at spending money in the months preceding and during Olympics, you probably are not going to do it.

What Viacom saw is indicative of that. It’s being punished way more than they should be. You’ll see other companies reporting slow down. I would expect the ad market to bounce back pretty nicely.

Google, Microsoft augur tougher times ahead

googlesign.jpgGoogle’s second quarter earnings disappointed Wall Street yesterday and sent its shares tumbling. The search giant blamed lower returns from managing its huge cash piles but analysts are also concerned the market leader in search advertising might augur a wider slowdown in online advertising.

Google itself said revenue growth from search ads was “positive” in every sector except for real estate, which was down by a small amount.

But the Street wasn’t convinced, perhaps because Microsoft also disappointed with its quarterly earnings citing “tough” economic conditions which impacted its software business and online ad sales.

The clock is ticking in Hollywood

hollywood.jpgTick, tock, tick, tock.

The countdown is underway in Hollywood, with just hours to go before the contract covering 120,000 members of the Screen Actors Guild expires. What happens next is anybody’s guess, though it would be some time before actors walked off the job.

Indeed, SAG president Alan Rosenberg said in a statement that it had “taken no steps to initiate a strike authorization vote” and that any speculation was “simply a distraction.”

The Hollywood Reporter writes that several options are left for the guild and the studios. “They could negotiate a contract extension, which could be by day, week or month, and keep talking; the studios could lock out the actors; or SAG could seek a strike-authorization vote from its membership, which will be at least a two-week process as the negotiating committee must vote on whether to bring a strike.”

Who’s paying for all that Coke on American Idol?

kevin-martin2.jpgIf it wasn’t sufficiently clear that Ford is paying for those Mustangs on TV, or who’s supplying all that Coca-Cola to the American Idol judges, the Federal Communications Commission may make everyone involved in this obfuscation ‘fess up.
According to the Wall Street Journal, the FCC is expected to launch a formal proceeding this week to consider rules for proper disclosure of what the industry calls product placement: the frequently annoying inclusion of brand names into scripts for TV shows, movies and, according to some, novels.
Some ideas under consideration include requiring TV shows to put up a notice similar to the ones used by political candidates in their campaign ads. The Journal says U.S. advertisers, who are already shelling out several billion dollars a year on these stealth ads, are opposed to the idea.
We can’t help but question whether such notices would effectively become a second plug for a product, at least in the minds of consumers. Or does the explicitness of it all reduce any potential “cool” factor of having your vacuum cleaner featured in a Saturday Night Live skit? 

Keep an eye on:

    Beatles representatives are in talks with both Activision and MTV Games to create a Beatles-themed video game in a move that could pave the way for a broader licensing of the Fab Four’s catalogue. (Financial Times) MySpace is STILL worth more than Facebook, according to a TechCrunch analysis. Oh, and even more executives have defected from Yahoo than even they originally thought. (TechCrunch)

Growl! Tiger’s absence no fun for networks, advertisers

tiger.jpgThere was much written in the sports pages (and in some cases the business pages) about Tiger Woods’ decision to miss the rest of the golf season and undergo reconstructive knee surgery.  

His absence is a big deal for sports fans – not to mention marketers and TV networks. After all, he is the biggest American sports machine since Michael Jordan.   

 ”Much like Michael Jordan did (Woods) has the power of drawing in the more casual viewer or participant to the sport,” Stifel Nicolaus analyst Thomas Shaw told Reuters. “He has the ability of driving some participation. It gets people excited to get out and dust off the clubs and play some.”

Sorting through the spending figures

calculator.jpgSurprise, surprise! Online advertising spending appears to have slipped quarter-to-quarter, the first time that’s happened in three years, according to a new report.

Before pulling your hair out, keep in mind that first quarter online advertising spending rose 18 percent from the year ago period – it’s just that it slipped from the fourth quarter,  according to the IAB. So while still robust, it seems that online advertising isn’t impervious to the economic troubles gripping the United States.

Another report, this one by PricewaterhouseCoopers, takes a longer view of advertising in new media. It finds that advertising tied to digital and mobile media will account for 24 percent of the growth in the media and is projected to grow at a compound annual rate of 19.5 percent to 2012.

Yachts, parties, lions – it must be Cannes

1cannes.jpgIt’s one of the big weeks for advertising (well, in terms of parties and sunshine), so we couldn’t pass up the opportunity to check in on Cannes. More than 12,000 advertising types have gathered in the South of France to toast the industry — and perhaps even collect an award.

This is an interesting year for Cannes, where a lot of the chatter at parties and meetings will likely be about either the recession or the rise of online advertising, Reuters notes.

The festival, in its 55th year, awards excellence with the so-called Lions trophies and hosts seminars and workshops. In a sign of how crucial the Internet has become to advertising, the Film Lions awards now includes films for Internet and mobiles.

Bud’s advertising: Drink it in while it lasts


What would a combined InBev/Anheuser-Busch do with advertising? It’s one of the questions already being tossed around in the wake of InBev’s $46 billion bid for the brewer of Bud and Bud Light.

One obvious problem for Anheuser-Busch, which spends about $475 million each year on advertising, is that their marketing focuses heavily on the idea of being an All-American beer and company.

That may not play so well when you’re owned by a company based in Belgium, we reported.

Casting a pall over advertising

TNS is out with its quarterly advertising data. Frankly, it doesn’t look that hot.

The figures show that total measured ad spending rose just 0.6 percent in the first quarter from the same period a year ago, with budgets weaker in telecommunications and automotive.

Here’s how Jon Swallen, SVP Research at TNS media intelligence, described the quarter in a release: “Enduring concerns about economic conditions and consumer spending behavior continued to cast a pall over the advertising market during the first quarter. After a hopeful start to the year, the pace of ad spending slowed perceptibly during March and early figures from the second quarter indicate little immediate or sustained improvement in the core ad economy.”

Anyone want some cash back?

dollars.jpgTake that Google!

Microsoft, in a bid to win share of the search market from Google and Yahoo, now plans to offer a new “cashback” service that provides a rebate when users buy something they found searching with Windows Live.

Chairman Bill Gates’ announcement of the rebate plan is the latest loud and clear sign of how much importance Microsoft is placing on advertising. (It apparently has been in talks with a company named, ummm, Yahoo, about just this).

“This is giving you a reason why you should use a particular search engine,” Gates said at the company’s Advance 08 advertising conference.