Chrysler: Coming soon to a TV near you
As the New York Times puts it this morning: “Even after receiving $15.4 billion in federal loans, General Motors is once again on the brink of financial collapse.” The reason is that the automaker burned through $10.2 billion in the firs quarter, while revenue dropped by almost half to $22.4 billion.
Does that mean GM is heading for bankruptcy? Possibly. Does that mean more bad news for the advertising industry, which has been hard hit by the pullback in spending from automakers? Not necessarily.
Take, for instance, the case of Chrysler. Adweek reports that the company, after filing for bankruptcy protection, is launching a new ad campaign that will debut on May 11 during prime-time television.
The initiative crafted by Omnicom Group’s BBDO in Detroit is designed to remind consumers that the automaker is still open for business, while highlighting the range of current and future vehicles in Chrysler’s portfolio and touting its rebirth as a global car company per its alliance with Fiat of Italy.
“When we asked consumers what they wanted to know about Chrysler, they told us to tell them about our products, tell them why they should buy our vehicles and give them a reason why they should be confident in the future of this company,” said Steven Landry, the company’s evp, North American sales, marketing, motor parts and service. “We believe this campaign delivers on all of those objectives. In addition, this campaign gives us the opportunity to reinforce that it’s business as usual and demonstrate a bright future ahead for Chrysler.”
As for GM, this is what Interpublic Chief Executive Michael Roth had to say about that situation during a conference call. (General Motors is a top client for IPG).
We can’t comment on what happens when you go through bankruptcy. There is a lot of flexibility in bankruptcy in terms of who gets paid, when they get paid, and what amount… Again I don’t mean to speculate, but once all this clears through and General Motors gets through whatever the process is going to be, there is going to be a demand to market automobiles. and we are well positioned to continue our partnership with General Motors. And going forward, we would expect to continue that relationship.
Keep an eye on:
Advertising slump shows no signs of relenting
The news media may be preoccupied with Swine Flu and the Banking Crisis and the Auto Industry meltdown, but look beyond those hot topics and you will see a familiar story — you know, the advertising-business-is-getting-slammed story.
Advertising group WPP today said it would not meet its 2009 forecasts after quarterly sales fell 5.8 percent, as companies slashed marketing budgets. This comes after rival Omnicom on Monday reported that its first-quarter revenue fell 14 percent.
Interpublic needed a heap of cost-cutting moves — including job cuts — to help it post a loss that was smaller that Wall Street expected. Revenue fell nearly 11 percent — maybe that’s a case of it-could-have-been-worse for a company that counts General Motors as one of its single largest clients.
Perhaps a recent run-up in the shares of media stocks portends better days for advertisers, right?
Not really. Experts warn that advertising spending is not yet showing any indication of bouncing back. Omnicom’s CEO John Wren says even those who are “at all optimistic” are looking toward the back end of this year and the beginning of 2010 for any kind of recovery.
And certainly the Swine Flu, the Banking Crisis and the Auto industry’s woes aren’t likely to help.
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Good news for Madison Ave: WPP will only be slightly down
Slightly down is the new up.
At least judging from the reception that advertising giant WPP received today after it predicted like-for-like revenue would drop 2 percent this year.
Shares were up about 5 percent after the report from WPP, the last of the big three advertising holdings to post quarterly results. For all the worry about the advertising recession — and no doubt advertising is bad right now — WPP, Omnicom and Interpublic also showed some bright spots in their numbers.
WPP, in fact, said the in the ”long-term” the outlook for the advertising and marketing services business “appears favorable.” “Long-term” isn’t a particularly well-defined timeframe, but nonetheless those are pretty upbeat comments coming from an industry that has seen auto, retail and financial services spending drop like a stone.
“The fact they’re saying revenues in 2009 will be down 2% is relatively reassuring given the current climate,” RBS analyst Justin Diddams told the Wall Street Journal.
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Looks like Yahoo’s not buying Tumblr
Gawker/Valleywag created a bit of stir on the blogosphere Monday with its report that Yahoo was in talks to buy blogging startup Tumblr for “low to mid-eight figures,” or as much as $50 million.
From the post:
We hear the talks are serious, led by Tapan Bhat, a fast-rising executive in charge of Yahoo’s homepage and other key properties — but as with any acquisition talks, they could fall apart.
We figured Yahoo’s new CEO Carol Bartz was too busy figuring out where Yahoo should seek growth and how to stem the leaky ship to pursue an acquisition. Sure enough, Silicon Alley Insider knocked down the Valleywag story by getting Tumblr founder David Karp on the record:
We called David and he said the rumor is categorically false. “We’re just hearing about this now,” he said.
Speaking of acquisitions, it seems like no one’s doing too well with the stuff they’ve bought. Just a couple of days ago, News Corp wrote down the value of its $5.6 billion 2007 acquisition of Dow Jones. And yesterday, Cablevision said it would write down its acquisition of Newsday by $375 million to $450 million. As you may remember, Cablevision bought the Long Island paper just last year for $650 million.
- The recession has taken a heavy toll on sales of celebrity gossip magazines, but magazine circulation in general has held up well, according to the Audit Bureau of Circulations. (NYTimes)
- Google has developed a free Web service called PowerMeter for consumers to track energy use in their house or business. (NYTimes)
- DirecTV Group added more subscribers than expected during the fourth quarter but rising marketing costs and other expenses dragged down its quarterly profit. (Reuters)
- Omnicom Group shows more resilience to budget cutbacks than Wall Street had expected, but profit still falls 14 percent. (Reuters)
See you at the job bank
We were talking the other day about job cuts — more specifically about who would be next to feel the axe blade. We’d seen big cuts at Viacom, Omnicom, Warner Brothers and Time Inc, and, you know, it obviously didn’t take a genius to figure more were coming.
The next day: A memo from AOL Chief Executive Randy Falco announces that the Internet unit of Time Warner will cut 700 jobs, or about 10 percent of its workforce; Reader’s Digest says it will cut 8 percent of its staff.
And now we come to Walt Disney Co, which is cutting about 5 percent of its workforce through a combination of 200 layoffs and a job freeze on another 200 positions.
“After months of making hard decisions across our businesses to help us adjust to a weakening economy, we’re now faced with the harsh reality of having to eliminate jobs in some areas,” Anne Sweeney, co-chair of Disney-Media Networks and president of Disney-ABC Television, said in a memo sent to workers and obtained by Reuters.
So now it’s worth asking yet again: Who is next?
Could it be News Corp? Portfolio reports that The Wall Street Journal’s newsroom “is due to undergo another round of personnel cuts late next week. It’s unclear exactly how many employees will be affected, but two sources put the number of people being targeted at 50.”
Fight on the blogs! Fight on the blogs!
There’s the story, and there’s always the side-story. The snarky, juicy, lip-smacking stuff.
Case in point is last night’s news that Jerry Yang is stepping down as chief executive of Yahoo — which itself is an interesting tale. But we’d like to draw your attention to RealDanLyons.com, where you’ll find a wonderfully catty distraction.
In his blog, Dan Lyons rips into Kara Swisher, the AllThingsD honcho and prominent tech writer, who apparently took issue with him for not crediting her with getting the scoop on Yang’s departure.
“Kara, honey, I love you dearly, but girl-child, having a company send you a press release ten minutes before they put it on the wire isn’t a scoop. That’s called taking dictation,” he writes. ”One thing you have to admire about Kara is that in a blogosphere that all too often resembles an echo chamber, she’s managed to cut out the middleman; she just echoes herself. And while others engage in logrolling, Kara keeps it real and rolls her own log. Kara, listen. You’re not the story. Bokay? You’re the reporter. This isn’t about you. It really isn’t. Now stop it or I will fly out there and sit you down for a talk. You’re getting Mossberg Syndrome, honey, and that’s not a good thing.”
Is Swisher going to take that? No way, no chance.
“How would a snarktastic wonder like you know what a reporter was?” she responds in the comment section. ”I was teasing you, you twit, as you well know (I would dearly love to mangle emails you sent to me recently about your work, but I am too much of a gentleman!). When you come here, we’ll have a “talk” all right–my people like to call it a “sit-down” though. Love and kisses, Kara.”
What a way to start the morning.
Well,don’t fight!
SHE is the reporter,and reporter comes out of the latin Re Portum;namely BEARER,of the NEWS(0r scoop).
Re Portum is a shortening of Rethimnae excelcior;Portum;and the last two letters -UM stands for Urbi(URBAN)Maxim(MAXIM)..in full,the reporter is just the bearer and not the initiator of the reported.
Of that follows the full meaning in Re;PORTUM=Rethimnae Excelcior;Prophessus Omnibus Rethimnae Thesis Urbi maxim;meaning -”As of the thesis as invented in the City state of Rethimnon(Crete) according to the Urban Maxim.”-
and it was up to the Urban Maxim to CREDIT the said Tale;not up to the BEARER of the same Tale;but the BEARER was ALWAYS by habit CREDITED with having brought forward the Tale itself, as a matter of FACT!
It IS a technical question, who was actually first to do the NOTICE;but a shrewed habit by females is to intrigue themeselves into the knowing!..thereby such faiblesse for intelligence organizations for USING women dearly in the trade of the Reporting business…
wshrp
Take my savings — but not my mediocre TV shows
No doubt about it, the financial crisis has been tough on the media business. Just ask Sumner Redstone, the folks over at the Associated Press, or anyone on Madison Avenue.
Then there are some of the poorly rated television shows to consider… The Hollywood Reporter writes that thanks to the economic downturn, the broadcast networks could play it safe and order full-seasons of some low-rated programs rather than replace them with new series.
There are a number of reasons for this, one of which is that it costs money to order and market a new series.
But, the article points out, the “most obvious reasons for the pickups are that many series this fall are doing poorly, and these shows are performing among the best of the worst. Networks are loath to exit the fall without at least one series to tout as a success. Plus, the writers strike, as Rash noted, has delayed quality mid-season replacements. And with ratings declining overall because of increasing DVR penetration and audience erosion to cable networks and the Internet, the bar for success keeps being lowered.”
So even if your retirement savings isn’t what it used to be, at least you’ll be able to enjoy “Knight Rider” for a while longer.
Keep an eye on:
More Boo-Hoo in Yahoo shares
Who was it that wrote about the “The Road Not Taken”? Robert Frost?
That’s somewhat ironic, because you have to figure Yahoo shareholders are feeling pretty frosty toward Yahoo’s management now that its stock price is wallowing around $13 , near five-year lows, amid a weakening display advertising outlook.
The road not taken? Microsoft’s offer of $33 a share for Yahoo. That deal died in the summer, before the global banking crisis had reared its ugly head. What was once a $47 billion deal would be worth significantly less today.
Yahoo’s premium display business is getting roughed up by a slow-down by advertisers such as financial companies and automakers, and caution among online advertising customers.
But don’t assume that since Microsoft didnt marry Yahoo, that the software maker doesnt find the online search giant, you know, attractive. American Technology Research analyst Rob Sanderson says Microsoft may make a new offer “as Yahoo shares decline and Microsoft struggles in its online services business.”
Keep an eye on:
Advertising budgets: What’s the deal there?
Quarter after quarter, analysts and the financial press keep pressing advertising executives about the economy and spending. For good reason, too, since corporations often take scissors to advertising budgets during downturns.
Thing is, the chief executives of the big ad holding companies so far have given very much the same answer during conference calls and interviews: everyone is worried, nobody is cutting spending.
Interpublic CEO Michael Roth is no exception. Here’s what he said on Wednesday about the economy/spending issue during his company’s earnings call:
“Of course, it goes without saying clients remain cautious due to broader economic concerns. To date we are not seeing signs of a pullback. But we continue to monitor the situation closely so as to be able to response quickly should the need arise.”
Here’s Publicis Groupe’s Maurice Levy:
“Not one single client has changed its plans. We continue to work with our clients according to plans.”
And Omnicom’s John Wren:
Its sure going to be an AMERICAN made car and thats the bottom line cause STONE COLD said so.