Wednesday, September 06, 2006

And now it begins...Cellphones taking over the world (or at least my little world!)

It was bound to happen, and now it did. Like a scene from a scary movie, now would be the moment of creepy music starts playing and the mass murderer quietly sneaks in unbeknown to the main character. Yes, you have it right. The cellphone has official become the ultimate vehicle for subscription based services. Radio will soon be streaming to your personal cellphone at any moment. Why is this significant? Well, for countless reasons.

First, I believe this will dovetail into other services like iPod music (oh wait, isn't that already available?), podcasting and what we fear most, more advertisements on cellphones. Secondly, I fear that those of us who do not want to bombarded with advertisements will end up paying more for services that those who do not mind the occasional footlocker advertisment coming up on the cellphone screen inbetween calls (could you really imagine how annoying that could be?!?)….Yes, your phone will do everything for you include bringing “mass marketing” to your very own handheld device. I'm just waiting on the phone to talk for me. That would be the day....

To read the article:
Clear Channel Bows Mobile Service
by Erik Sass, Wednesday, Sep 6, 2006 6:00 AM ET
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=47729&Nid=23067&p=376313

Thursday, August 10, 2006

Thanks, but no thanks: I would rather not have a McDonald's logo on my phone...

Just when you thought your spam box was "up to par" and that you were on the "no-call" list for telemarketers...you thought you were safe from unwanted advertising messages...so you thought. Yes, I am being dramatic, but can we please take a reality check here? Advertisers are yet again taking it too far. Soon my cellphone and your cellphone will have obnoxious ads on their little screens. I can understand having ticket sales subscriptions or something in which the user had to SUBSCRIBE to, but involuntary marketing images on the phone? I can already see it. There will be a newer model of phone or a paid for software to remove these ads from the phone- and yet again, the same pool of companies will benefit from the subscriber based services.

Additionally, if the phone companies start offering "kick backs" and discounts to "ad subscribers" (those willing to have ads on their phone get $10 off their bill a money), the ad companies will be missing a demographic that has the dollars to NOT have this service. Yes, the main people who will buy their products will not receive the message. Is it worth it to the advertiser? Remember the slogan "You are known by the company you keep"? Same things goes with advertising. If I have a high-end product that I want to reach Women 35-54 with a household income of at least $75,000, is "she" (the demo) going to opt for $10 off her bill in exchange for advertising messages "in her face" all the time? I think not. Additionally, is the high-end product going to want to be next to McDonald's or Burger King or even a Snicker's advertisment? No, because those products do not appeal to her and the high-end product will thus become the low-end product.

I could go on and on about this subject, but I will spare you. Enjoy reading the article below.

Ad campaigns for your tiny cellphone screen get bigger
Updated 8/9/2006 9:22 AM ET

By Paul Davidson, USA TODAY

With readers fleeing newspapers and TV viewers zapping past commercials, advertisers are turning to the one device consumers can't seem to escape: their cellphones.
Mobile phones and wireless devices have quietly become the newest, hottest frontier for big brands from Pepsi to Nike, especially those itching to reach the coveted 18- to 34-year-old set.
TV networks are prodding viewers to send text messages to vote for their favorite reality TV character. Wireless websites are lacing sports scores and news digests with banner ads for Lexus (TM), Burger King (BKC) and Sheraton (HOT). A few companies are even customizing 10-second video ads for short, TV-style episodes that are edging their way onto mobile phones.
While the industry is in its infancy, ad campaigns for the tiny screen have increased sharply this year after several years of spotty efforts, and they're likely to take off by early next year, says Tom Burgess, CEO of Third Screen Media, a mobile-ad network.

Driving the surge is the increased use of text messaging, the wireless Web and video in the past 18 months as wireless carriers rolled out bigger, more colorful screens and faster broadband networks. About 30% of the 217 million U.S. cellphone subscribers text message at least once a month, Yankee Group says. Such services are more ingrained in the younger set: At least 55% of 13- to 24-year-olds regularly send text messages. About 10% of cellphone users regularly browse the wireless Web, MMetrics says.

For advertisers, the young audience is just one selling point. Wireless gadgets are always-on, ever-present accessories. The fact that a phone is tethered to an individual means that ads can be targeted. And users can respond instantly to time-sensitive offers.

"The days of doing a TV spot and reaching everybody are dwindling," says Jon Raj, Visa's new-media ad chief. "The mobile phone is very personal, and it's always with you."

Yet it's the intimate, insistent nature of cellphones that has made wireless carriers cautious about embracing mobile marketing, out of fear of turning off subscribers. Pushing tiny buttons to navigate the wireless Web or send a message can be clunky. And because subscribers typically pay for their minutes of data usage, many people don't want to burn them on ads.

"We need to make sure whatever we do is not perceived as intrusive," says Verizon Wireless (VZ) digital media chief John Harrobin.

Today, wireless websites do sport banner ads. But users typically must type in the address to see them. Except for trials, carriers have barred ads on sites accessed from the cellphone's menu of news, sports and other headings, which is the route to the wireless Web most people take. The wireless Web is not the Internet, but rather a similar network, with different addresses and sites streamlined for the small screen.

Carriers, though, are warming to the notion that consumers will welcome useful ads, such as those aimed at subscribers-on-the-go searching for restaurants, gas stations or movies. Or, say, stock prices, sponsored by Fidelity. "It has to be contextually relevant and enhance the customer experience," says Sprint Nextel (S) Vice President Anita Newton.
Relevant ads, please

In fact, she notes, mobile ads could help subsidize data services, possibly shaving current monthly subscription fees of $5 to $20 and drawing more customers. About 42% of mobile customers are open to mobile advertising if it's relevant, if they asked for it or if they'll get coupons or free services, Yankee Group says.

Fielding Fowler of Saginaw, Mich., says he'd welcome coupons "for useful things" such as restaurants or gasoline. But he finds banner ads irritating when he's hunting for sports scores. "You're paying $8.99 (a month), and it's gone from ad-free to bombarding you," says Fowler, 35, a comedian.

Carriers will likely start accepting advertising within eight months, after they resolve battles with content providers over how to split revenue, says Jeff Janer, an executive at Third Screen Media.

U.S. mobile advertising revenue is projected to jump to $150 million this year from $45 million in 2005, Ovum says. That's still the equivalent of a rounding issue compared with this year's estimated $274 billion U.S. ad market. But mobile ad sales could total $2 billion, or nearly 1%, of U.S. ad sales by 2010 and up to 5% by 2015, Yankee Group predicts.

Among the ads gaining favor:
•Text messages. This kind of advertising lets marketers engage customers interactively, building loyalty. Consumers usually type in a five-digit "short code" to, say, enter a sweepstakes or download a ring tone or screensaver. In other cases, they get alerts about offerings they're interested in.

The strategy is a favorite of TV shows such as NBC's (GE)Deal or No Deal and CBS' (CBS)Big Brother to involve viewers. Customers typically pay a few cents to send such a message, but the networks often charge a premium, splitting the revenue with the carrier.

Last year, Big Brother viewers sent more than 500,000 text messages in two days to vote on which evicted houseguest should return. Viewers paid 49 cents a message, making the initiative marginally profitable, says CBS executive Cyriac Roeding. They also got free wallpaper, and about 30,000 opted to get text alerts on new shows. "It creates tremendous loyalty, and you're in touch with the audience even when they're not watching," Roeding says.

When A&E's Dog the Bounty Hunter invited viewers to dial a short code to receive text messages from the main character, 62% of participants said they would watch the show more.
Other brands are joining in. Dove soap prodded consumers to vote on whether women on a billboard were "wrinkled" or "wonderful."

Anheuser-Busch (BUD) prompted people to send cellphone photos of themselves for a contest promoting Bud Light. "You're trying to integrate into the lifestyle of this (young) generation," says A-B Vice President Tony Ponturo.

To tout the benefits of its Los Angeles credit card, American Express (AXP) last year let members and prospects sign up to receive invitations to limited-seating concerts and movie screenings.

Such missives can cost just 2 cents for the advertiser to send. But the Mobile Marketing Association urges advertisers to require consumers to opt in, then confirm that decision, before sending offers. "We need to be careful ... to protect consumers from spam," says MMA chief Laura Marriott.

•Wireless Web ads. Ads on the wireless Web rose sharply this year. Advertisers are spending $75,000 to $300,000 on typical wireless webcampaigns, vs. $25,000 to $50,000 in 2005, Janer says.

Typically, a mobile Web page has one ad at the top or bottom, so as not to clutter the tiny screens. "It's extremely impactful," says Maria Mandel, who heads digital innovation for ad agency Ogilvy & Mather.

Ads generally cost $35 to $50 per 1,000 views, vs. $10 for online ads, Janer says. And 3% to 5% of mobile Web users click on links to learn more or make a purchase, vs. a 0.2% click rate for Internet ads.

The uptick in advertising should keep afloat many mobile websites that have been saddled with huge costs and little revenue.

"We seriously considered shutting down the mobile Web business in 2003 and 2004," says Louis Gump, vice president of The Weather Channel.

Embassy Suites spent a few hundred thousand dollars on mobile banner ads early this year, encouraging customers to click to make a reservation. The campaign generated 55,000 clicks and $3.2 million in revenue, says John Lee, marketing chief for the hotel chain.

Mobile phones, he says, provide an ideal path to the hotel's target audience. Business travelers changing plans or considering a weekend getaway used to make mental notes until they could follow up. "Now, you can just click and do it."

Burger King ads on news and sports sites nudge users to restaurants with a crisp: "Hungry? Click to find a Burger King."

"It's an opportunity to reach consumers close to making a purchase decision," says Gillian Smith, the chain's senior director of media.

But not all advertisers are enthralled. 1-800-Flowers tested a special Mother's Day offer this year that fizzled. "I don't think people are comfortable searching the mobile Web just yet," says Tania Nemaric, company manager of brand communications. "You want to get in and get out. You're being charged for the time."

•Video ads. Anheuser-Busch, American Express and others have released their standard TV ads on cellphone video services. For the first time this year, short video ads were customized for cellphones. When Fox Entertainment (NWS) this summer released a spinoff of its Prison Break series to Sprint mobile phones, each two-minute episode was preceded by a 10-second ad for the youth-oriented Toyota Yaris.

On cellphones, consumers "are actively looking at something," says Kim McCullough, Toyota manager of marketing communications. "We're hoping that greater attentiveness will help our advertising."

•Ads for free stuff. Games on mobile phones typically cost about $5. This year, some games were offered free but included ads for products such as Zagat's dining guide or Progressive Insurance, says Michael Chang, CEO of Greystripe, a mobile ad network.
Traffix (TRFX), another marketing company, plans to offer free, ad-supported ring tones and movie clips.

The greatest potential lies in searches for local retailers, says Yankee Group analyst Linda Barrabee. Yahoo, Google and Go2 provide local mobile searches today, but they have limited or no advertising. In the future, a search will yield sponsored listings first.

Advertisers would pay about 40 cents if a customer clicks on a search listing and up to $7 if the customer calls the retailer, says Dan Olschwang of search provider JumpTap. Eventually, carriers could use technology to pinpoint a customer's location and offer a relevant coupon to a nearby shop, if the subscriber opts in.

Dunkin' Donuts (AED) tried a less-sophisticated version of that last year, sending a coupon for a 99-cent latte at several stores to interested Boston cellphone users. The campaign increased store traffic 21%.

Ad revenue a sticking point
Rollout of such ads has been delayed partly because two big search engines, Yahoo (YHOO) and Google (GOOG), are unwilling to share more ad revenue with carriers, which would link to them from their home pages. Some carriers are making deals with search upstarts, such as JumpTap, which are offering a more generous split and letting carriers affix their brands to the services.
"It's the battle for the customer," says Kevin Beebe, group vice president for No. 5 carrier Alltel, which is close to a deal with JumpTap.

Yahoo Senior Vice President Steve Boom says the search engine can generate more revenue because of its brand and expertise. "The (revenue split) misses the point," he says.
A similar standoff has stalled the full-scale rollout of banner ads on the wireless Web. Carriers want 40% to 50% of ad sales when users reach sites from their menus; content providers are offering less.

Wireless carriers believe they enjoy greater leverage than phone and cable giants have in online marketing. The ability to easily click to sites from wireless home pages is vital, says Sprint's John Styers, a marketing director. Also, he says, carriers have data about subscribers' surfing habits that could let them serve more relevant ads — but only with the consumer's OK.
"We really have to tread lightly," Sprint's Newton says. "The last thing we want is to have consumers be annoyed by advertising and cancel their subscription."
Posted 8/8/2006 10:16 PM ET

Soap Opera for Email?

Yes, I know what you are thinking. A new low in cheesy entertainment for the masses? That's what I thought when I opened my "Daily Candy" to discover an "email mystery book" recommendation. I started to sift through the recommendation and realized I did not have time to open an email daily book excerpt and keep up with the story...but other people do. Read below to see the newest trend in what I call "Soap Opera Emails". We might want to keep our eyes on this one...it could actually be successful!

Link: http://emailmystery.com/dof/index.php


Synopsis of The Daughters of Freya: Journalist Samantha Dempsey never imagined her life would turn out like this. Her 19 year-old son has fallen in love with an older woman. Her mother is a basket case, still haunted by the death of Samantha’s brother in a car accident years ago. Her once-promising career as a journalist has ground to a halt. And the cracks in her marriage are wide and getting wider.In the midst of all this turmoil, Samantha gets an email from a desperate friend whose 21 year-old daughter has joined The Daughters of Freya, a California cult that believes sex is the solution to the world’s problems. He wants Samantha to write a story that will expose the cult as a fraud. Samantha pitches the story to Jane Sperry, the editor of a San Francisco magazine and an old college friend. Sperry sends Samantha to Marin County to write a piece on the cult but she soon finds out that there is more to the cult than meets the eye. She discovers that the cult’s ‘spiritual guide’ has a secret and insidious agenda, and wealthy and powerful partners who will stop at nothing to prevent her from revealing the truth. As Samantha risks her life in an attempt to penetrate the inner workings of the cult, she must deal with a personal life that is threatening to fall apart and a past she thought she had left far behind.The Daughters of Freya is not a book; it's a 'real-time' email mystery delivered straight to your inboxThe story is told through emails exchanged between Samantha and the other characters. But instead of reading these emails in a book, they’ll be delivered straight to your inbox, just as if the characters have copied you on the emails they are sending to each other. You'll receive a few emails at random times every day over the three weeks that it takes for the mystery to unfold. You won’t be able to turn the page to find out what happens next ... you’ll have to wait for the next email to arrive.Opening your email will never be the same again!

Internet and Travel Industry

How do you purchase your airline tickets? How about that cruise you are taking next Spring? Are you really going to call the travel agent and book directly with her/him? The internet has changed the travel industry (as we all know), but where will internet travel revenues in 5 years?

Here are some stats that will make travel professional hate the internet...

  • Recently studies projects that the US online travel market will spend a record $122 billion by 2009.

  • Flight delays grow by the hour, ticket prices have soared (mostly due to increased fuel costs), and security issues remain at the forefront of the travel industry--and yet online travel consumers in the U.S. are poised to spend some $122 billion by 2009, according to a recent report from eMarketer.

  • The report, "Online Travel Worldwide: A Mosaic of Separate Markets," identifies the U.S. as the global leader in online travel expenditures. U.S. leisure and corporate travel consumers will spend $122.4 billion by 2009, up from $64.9 billion last year, while European travelers spent $35.5 billion online in 2005. And, the Asia-Pacific region, now one-quarter the size of the U.S. market, reaped $15.9 billion in 2005, but is poised for growth in upcoming years.

  • The report's demographic studies of travelers in the U.S., Europe, and the Asia-Pacific region show the emergence of an older generation of travelers: baby boomers (ages 45 to 60), who are healthy, adventurous and affluent, as well as Internet-savvy. "Online travel distributors and marketers who pay attention to these customers and design travel offers matching their interests and needs will reap rewards," said Jeffrey Grau, eMarketer's senior analyst and author of the report, in a statement.

  • Online leisure/unmanaged business travel sales in the U.S. will total $77.7 billion in 2006, according to eMarketer estimates. If online corporate travel sales of $36.5 billion, estimated by PhoCusWright, are factored in, then total U.S. online travel sales will equal $114.2 billion in 2006. PhoCusWright also estimates that total U.S. travel sales (online and offline) will be $235.2 billion this year. This means that in 2006 online sales will account for about 49 percent of total travel sales.

Source: http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=46637&Nid=22402&p=376313

Wednesday, August 09, 2006

"Where are all the sales people going?"

Yes, you remember that song "Where have all the cowboys gone?"...well that soon might be the tune to sales people at local and network stations. The television market is developing an eBay like bidding system to sell advertising space. Wow! This will be a HUGE benefit to the advertisers (and almost eliminate the "ad buyer" from the equation), but will profit margins for media drop? Will the advertiser get more “bang for the buck”?

You better hold on tight because this industry is changing so fast that we might need superglue to hold on!

Article listed below.


Analyst: Ad Exchange Faces Opposition, Would Trim Network Margins
by David Goetzl, Wednesday, Aug 9, 2006 9:25 AM ET
A PROPOSED ONLINE TRADING SYSTEM for buying and selling TV ad time could lower and eventually eat into network profits. That's according to a top Wall Street analyst, who believes media stock investors don't have much to worry about--for now.


Merrill Lynch's Jessica Reif Cohen writes that the eBay-enabled system is unlikely to make much headway, since both networks and a slew of major advertisers oppose it. Cohen did, however, issue a warning. The system could eventually serve as a platform for some small cable networks to one-up the competition--possibly forcing other networks to sign on, and wreaking some havoc in the TV ad industry.

Executives at both broadcast and cable networks have expressed fervent opposition to the e-Media Exchange on the grounds that it would commoditize their product. Nine advertisers, including Wal-Mart, Microsoft and Toyota, reportedly are prepared to pool together $50 million to test the system next January. But Cohen believes that its prospects are dimmed by the fact that "not a single one of the 10 largest television advertisers is participating in the process."
"We are generally skeptical that the auction platform will take hold in the near term, as neither the large networks nor the largest advertisers appear willing to cede control of the selling/buying process," Cohen adds.


"The response has been greater than we imagined, and it's pretty early to tell what the success is going to be," says Ray Warren, president of Carat USA and a member of e-Media's planning group. "To assume that there's any way to project right now and have a point of view on the ultimate success seems a little premature."

The nine advertisers advancing the system argue that it would rip away the curtain on the secretive buying and selling process and provide "greater transparency." And that increased openness could allow "smaller advertisers to gain access to preferential pricing," writes Cohen--a negative for the networks and top-10 advertisers. Large advertisers "are unlikely to find pricing transparency to be attractive," since they hold pricing advantages. Their edge: they spend more and have been doing business with the networks for years.

Cohen notes that the Discovery Networks has agreed to participate in discussions with the industry task force--effectively comprised of the nine advertisers, the ANA, the AAAAs and some media agency executives. "This is not altogether surprising to us, as Discovery has been struggling, owns and runs 14 cable networks (thus large amounts of unsold inventory) and is therefore more likely to be susceptible to this sort of pitch, in our view."
A Discovery spokesperson did not provide comment.


Cohen observes that a small cable network in the Discovery fleet, another lower-tier cable outlet or a struggling broadcast network, could embrace the system "to gain share," forcing the rest of the industry to use it. "We do not believe this is likely over the near to medium term, but is a long-term risk for the industry."

"When you think about marketplaces that move, they start out pretty slow and they gain momentum," says Warren. "This thing just pulled out of the station."

Tuesday, August 08, 2006

The Fall of the Local Paper

The article below highlights how retailers (specifically Macy's) are shifting advertising dollars into national campaigns using TV and Radio. The local/regional media outlets will suffer as a result. If this becomes a national trend for retailers- it could potentially be an opportunity for new media ventures (podcasts, online advertising) to take a "piece of the pie" in terms of media dollars allocated. Furthermore, since Macy's is starting this trend of eliminating all local dollars spent, they could very well be the first of many to contribute to the "fall" of local newspapers. (Less dollars in advertising equals less staff equates to poor coverage and declining readers/retention). To take the thought a step further: where does WOM (word of mouth) marketing fit in the monster puzzle piece? Who is going to facilitate WOM marketing efforts? Some retail for thought!

Newspapers Brace for Macy's Advertising Shifts
Federated Could Move Some $425 Million Out of Local Print, Broadcast
By
Mya Frazier Published: August 07, 2006

COLUMBUS, Ohio (AdAge.com) -- Local newspapers, beware: Sept. 9 is just around the corner. That day will mark the start of a drain of as much as $425 million in spending by the medium's largest advertiser, Federated Department Stores, and the end of the symbiotic relationship between homegrown department-store brands and the newspapers they've advertised in for more than a century.

All eyes are on Anne MacDonald, the newly appointed CMO at Federated. $1.2 billion media plan Federated's bevy of historic and beloved department-store brands will be officially reborn as Macy's, backed by the company's first national branding campaign from WPP Group's JWT and Publicis Groupe's Starcom, both Chicago. The company's $1.2 billion media plan is widely anticipated to favor national TV and magazines rather than its traditional mainstays of spot TV and newspapers. All eyes are on Anne MacDonald, the newly appointed CMO at Cincinnati-based Federated and a former Citibank marketer. Ms. MacDonald is orchestrating what analysts expect to be a significant shift in media mix by the retail category's largest spender. She declined to comment. The most dire prediction calls for as much as $425 million of the retailer's ROP newspaper advertising to disappear by 2008. More conservative estimates, such as the Deutsche Bank research report "Federated Impact May Be Greater Than Papers Expect," by Paul Ginocchio, forecast a still-stinging $200 million blow for the already ailing medium. Federated's annual newspaper spending currently totals $830 million. Driven by customers' eyeballs Federated spokesman Jim Sluzewski declined to discuss specifics of the campaign but said national magazine buys will be part of the media mix for the first time. "Newspapers will continue to be a very important medium," he said. "The fall launch is one point in time, and what happens longer term is something we are still going to be working on. Our media selection will be driven by where our customers' eyeballs are going." And based on Federated's own spending patterns, that indicates less newsprint and more TV, radio and magazine ads, although the shift has been incremental so far. "Trust me, we aren't jumping off the building yet," said Joycelyn Marek, VP-marketing at Hearst Corp.'s Houston Chronicle, a market that will see 15 Foley's stores switch to the Macy's banner next month, for a total of 17 in the Houston area. 'Close to the vest' Ms. Marek said the paper has actually seen an increase in buys from Macy's, although she would not disclose figures. "Macy's is holding the new campaign very close to the vest," she added. Abby Clark, VP-sales at The Columbus Dispatch, an independent newspaper that earns 17% of its ROP revenue from department-store brands, including seven local Macy's stores, said she's yet to see a reduction in Macy's ads. But it's hard to know what the third and fourth quarters hold. "They don't give us buys by the quarter but by the month, and with updates every week, that can change drastically," Ms. Clark said. "I think it will be pretty big, but not so much that we'll have to lay off people. It's just more of the thing newspapers are seeing: large accounts having consolidated and bought each other up." But Ms. Clark said despite Macy's national brand ambitions, newspapers remain relevant. "It's going to be risky. People go to newspapers and look for sales and shopping, and if they don't, they may not think to go to Macy's as often." Ms. Clark said Macy's experimented two years ago by pulling back on coupon offers in ROP ads. "They backed off quickly from that because it hurt them," she said. First wave of pain The first wave of pain will be more deeply felt by local TV and radio stations, according to Brian Kelly, exec VP at Initiative Media, which handled Macy's media buying for its southeast region for eight years before Starcom won the account. "The Macy's money is new money for the [national TV] networks," Mr. Kelly said. "Suddenly they are going to be huge network players. Macy's is being aggregated into this juggernaut of a national brand." Even though Mr. Kelly expects the money Macy's spends on newspapers to shift only incrementally, it's an inevitable shift nonetheless, especially as the chain tries to make loyal customers of younger readers who rarely read newspapers anymore. John Kimball of the Newspaper Association of America said he expects a "powerful impact on newspapers" but said newspapers could mitigate it by convincing Macy's that "the department-store business is very local and that it's going to be imperative to make a strong local statement about the new brand."
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TV could become a thing of past?

If television is on the decline- then what will make up for the "eyeball" difference? This is where the dialogue with media professionals starts. Yes, the radio/television world cannot grasp a clear-cut picture as to what the next step for the industry is. While many stations are utilizing their online resources (aka overpricing the hell out of "on-line" placement ads), I believe that the stations do not want the companies to know the prices are in fact overshot and the ROI is really next to nothing. Read below for insights from AdAge into the newfound industry predictions/trends in TV selling power...


McKinsey Study Predicts Continuing Decline in TV Selling Power
Cites 50% Drop in Viewers, 40% Hike in Prime-Time Ad Spend Over Last Decade
By
Abbey Klaassen Published: August 06, 2006 NEW YORK (AdAge.com) -- A study is about to give Madison Avenue a fresh pummeling: McKinsey & Co. is telling a host of major marketers that by 2010, traditional TV advertising will be one-third as effective as it was in 1990.


The McKinsey & Co.'s new media proliferation study data was prepared for, and delivered to, its Fortune 500 clients.


That shocking statistic, delivered to the company's Fortune 100 clients in a report on media proliferation, assumes a 15% decrease in buying power driving by cost-per-thousand rate increases; a 23% decline in ads viewed due to switching off; a 9% loss of attention to ads due to increased multitasking and a 37% decrease in message impact due to saturation. "You've also got pronounced changes in consumer behavior while they're consuming media," said Tom French, director at McKinsey. "And ad spending is decreasingly reflecting consumer behavior." According to the report, real ad spending on prime-time broadcast TV has increased over last decade by about 40% even as viewers have dropped almost 50%. Paying more for less translates into a much higher cost-per-viewer-reached -- a trend also true in radio and print. Teens turn from TVThank a combination of older technologies such as cable, PC computers, cellphones, CD players, VCRs, game consoles and the internet, along with more recent ones -- PDAs, broadband Internet, digital cable, home wireless networks, MP3 players, DVRs and VOD-- for those changes. And teens foretell an even more radical shift in future media consumption, the report points out: They spend less than half as much time watching TV as typical adults do. Teens also spend 600% more time online, surfing the web. According to Forrester Research's most recent North American Consumer Technology Adoption Study, people ages 18 to 26 spend more time online than watching TV and are adopting new technology faster than any other generation. Because of that, they tend to be more receptive to blog, podcast and mobile-web ads. That leads one to wonder whether consumer marketing mixes should change to reflect consumer behavior. Catch-22The answer is not quite -- yet, at least. The Catch-22 is a "chaos scenario" that smart marketers have read about in these pages: a dearth of online-ad supply and the web's generally fragmented nature will keep TV in booming business for the next several years. "Should everybody shift 30% of their dollars to the web?" asked Amy Guggenheim Shenkan, senior practice knowledge specialist in McKinsey's San Francisco office. "No. There wouldn't be room today if everybody wanted to shift online. Last year [online media] was $12.5 billion, by end of 2007 digital advertising will be $18 to $25 billion. ... So we're seeing a lot of growth, but if you want to match up share of attention and share of dollars it couldn't happen for that reason." The TV ad industry is a $68 billion one. So what's a marketer to do? Mr. French said it's no longer good enough for an advertiser to take standard reach metrics at face value. He advises them to consider evaluating media on an "adjusted reach" basis. Not adjusting reach numbers"What we don't find people doing is adjusting those reach numbers for people who are actually tuned in," Mr. French said. "Not just watching but actually paying attention." He also suggests there's a great role for chief marketing officers to play within their organizations, where they have influence over all customer-interaction channels -- call centers, sales forces, retail partners -- and can use those to supplement a decreasingly effective media channel. Consider the enterprise telecom company (not named by McKinsey). Some 44% of the purchasing decision was influenced by interaction with sales, building/installation and service/maintenance teams. "We see many, many leading organizations across industries realizing they need to systematically improve their commercial effectiveness," Mr. French said. "And the logical candidate for driving that is the CMO." Evolve marketing modelEmerging as some of the best examples are industries in which marketing has long been relegated to a back-seat role but is now becoming a major force in the front office -- major broad-based industrial conglomerates, financial services and telecom. In contrast, the companies people used to benchmark what marketing excellence is -- major package-goods players, for example -- are realizing they've got to dramatically evolve their marketing model. "CMOs have to step up to a larger role and question a host of historical assumptions of how marketing works," Mr. French said. "They have to continue to build rich, robust and proprietary customer insights, but they have to do it from a bunch more sources."

Monday, August 07, 2006

Ebay and Selling TV Airtime

How is the media industry changing since the internet...or at least trying to change. If many of you don't understand how television is sold, let me give you the basics in a nutshell.

TV ad time is one of those things that remains WAY overpriced. It's like going to the store to get a cell phone. You know the package you are buying is a rip-off- but somehow it makes sense to your credit card and you have to subscribe to it. Thoughts like “well, I guess everyone can afford $100 a month plus a $50 activation fee?” pop into your head. You have to buy the cell phone service; there is no other way around it. All the companies are about the same price: overpriced.

Likewise, when a company goes to buy television advertisement airtime, it's the same way. The buyer (company) knows they are getting ripped off. They will try their best to negotiate with the seller (the TV station), but in the end, the TV station wins because the company can either pay to have the advertisement or they can not pay and as a result, not reach that audience. It's a vicious cycle.

I am making the company out to be the victim in this situation for one reason: Nielsen. The sellers (the TV stations) are not selling the correct dollar $ worth of the TV station's value. With many different media outlets being utilized by viewers/listeners/users, how can we say that TV is the choice outlet? I would say that the web would be the choice outlet now, but then again, it depends on who you are trying to reach.

In conclusion, read the article below about the TV airtime almost becoming available in eBay. It will help you understand why the industry is SO confused with this strange new marketing tool called the internet.

TV Execs Bash eBay Ad Auction Plan
by David Goetzl and Wayne Friedman, Monday, Aug 7, 2006 6:00 AM ET


SEVERAL CABLE NETWORK EXECUTIVES ARE finding fault with a fledgling plan to sell ad time on television via an online auction. They say the proposed e-commerce-based system won't be able to deliver the multifaceted marketing packages that advertisers demand.

With the rise of DVRs and demand for engagement, marketers are seeking campaigns that go well beyond traditional spots to include product placement, mobile extensions, sponsorships, and branded vignettes. According to cable executives, it's impossible to sell the holistic package the advertisers are pushing on the eBay-enabled auction.

"It's counterintuitive to what they're asking for," charges Chris Raleigh, senior vice president of ad sales at GSN. His network has been pitching marketers on multiscreen interactive campaigns involving TV, the Net, and mobile devices.

"We tailor our offerings to our clients' needs and take advantage of opportunities that you can't purchase through an online option," says Bill Abbott, senior vice president of ad sales for Hallmark Channel. He says it's not a commodity "in which you can package everything together and put a price tag on it"--calling it a very "simplistic approach to the business."

Abbott, who "absolutely" refuses to participate in an e-Media Exchange, notes that product integration and sponsorships require negotiations and mutual strategic planning. Such efforts go far beyond placing bids in an attempt to one-up a competitor.

Another sales executive at a lower-tier cable network, who declined attribution, says: "They just don't buy spots and dots, so why would I participate in a spots-and-dots auction? Nobody buys me that way."

Concerns from sales executives at mid- and lower-tier cable channels could be considered a bad sign for the task force behind the initiative, since smaller cable networks (and some syndicators) are believed to be more likely to get involved on the sell side. Top executives at ABC and NBC have stated they have no intention of participating. If no sellers sign up, the initiative could be DOA.

But Mike Donahue--executive vice president at the AAAAs, an organization supporting the auction's development--said that it may allow buyers and sellers to spend more time hashing out multifaceted communications plans. "This is not going to eliminate the buyer-seller value chain," he says. "If anything, it will enhance it." Donahue believes it takes some of the drudgery away, allowing "more time to be spent on going beyond spots and dots."

A call to a task force spokesperson was not immediately returned. The group plans to launch a test of the program early next year. A pool of $50 million is to be made available for networks to bid via reverse auctions.

One leading cable sales executive, Joe Abruzzese, president of ad sales at Discovery Networks, has agreed to participate in discussions with the task force, The Wall Street Journal reported, and a Discovery representative confirmed.

Although all cable sales executives contacted expressed skepticism, not all are ruling it out. GSN's Raleigh says he would be interested in learning more details about the plan. "But for the majority of what we do, we take pride in and have success with marketing around interactivity," he says. "You can't do that as a commodity."

"My initial reaction was negative; it smacks of commoditization," says a veteran syndication sales executive. "But now, I can see it from the buyers' perspective. Media agencies have fewer people to work with. I want more details about how it works. It might free up resources."
The task force says the system will allow both buyers and sellers to benefit from improved "operating efficiencies." The AAAAs' Donahue says the task force does not intend for the system to facilitate buying and selling of top-tier inventory, such as prime-time hits. But it would like to ease the process of transacting lower-demand avails in dayparts, such as the afternoon or overnight. "There is not a market mechanism to allow marginal and niche inventory to be bought and sold efficiently," he adds.


"We believe there is value [in our inventory] and it isn't a commodity," counters an executive who oversees multiple channels. "As much as it would be good for the ad community to commoditize it, we try not to do that."

Both GSN's Raleigh and a second executive who declined to be named say their networks do a healthy business with direct-response advertisers during daytime blocks, so the system would have to yield higher rates.

The Journal reported that the task force plans to approach other sell-side executives in the next few weeks.

My Space, Millions of Users (Article Post)

On MySpace, Millions of Users
Make 'Friends' With Ads
By ELIZABETH HOLMES
August 7, 2006; Page B1

Micheal Poirier, a 32-year-old from Toronto, is friends with Ricky Bobby.
Not Will Ferrell, the actor who portrays Ricky Bobby in the new film "Talladega Nights." Mr. Poirier is friends with the movie character, Ricky Bobby, who has his own profile on MySpace.com, News Corp.'s social networking site.

The site, www.myspace.com/rickybobby, looks just like the other 98 million profiles -- listing things like his occupation ("Winner") and his heroes ("My Daddy, sweet baby Jesus, and that guy on TV in all those Karate movies"). Ricky Bobby has 47,000 "friends," MySpace lingo for users linked to the page. The 1,500 comments range from admiration ("You kicked butt in the race the other day. Loved when you signed my baby's head") to exultation ("Ricky Bobby is the Man!!").

Creating real-looking profiles for fictional characters is the latest step in marketers' quest to reach the highly sought-after MySpace contingent. John Tucker, the womanizing teenager of "John Tucker Must Die," and each of his four girlfriends have MySpace pages. (You can check John's basketball schedule or read about Carrie's plans for college.) So do seven of the characters from "Accepted," a film about college students debuting this week. (Bartleby Gaines, the fictional star, lists "Fake I.D.'s" and "Monica" as his interests.) Even the creepily-quiet mascot king from the Burger King commercials has a site. ("If you'd like to be the King's friend, he's totally down with that," his page introduction says.)

Although anybody can create a MySpace profile for free, and fake ones abound, these pages are the result of paid advertising deals with News Corp. The arrangement allows marketers to add extras like longer videos -- including trailers for movies -- and more pictures than a free page has.

But the real appeal to advertisers is the opportunity to create personal relationships with millions of actual young people. "What we really struck upon is the power of friendship," says Michael Barrett, chief revenue officer for News Corp.'s Fox Interactive Media and overseer of these deals. And this is a big circle of friends. MySpace had nearly 45.7 million unique visitors in June alone, with users spending an average of nearly two hours on the site at a time, according to Nielsen//NetRatings.

Mr. Poirier, for example, found Ricky Bobby's site by typing "Ricky Bobby" into Google. Among the top three results was a link to the MySpace page, prompting Mr. Poirier, a fan of Mr. Ferrell's, to take a peek. Not only did he add Ricky Bobby to his friend list, he changed his own profile picture to be that of Mr. Ferrell as Ricky Bobby. Mr. Poirier had an ulterior motive: he hoped a picture of Ricky Bobby would spark interest in his disc jockeying business.
"It's almost like a signal to your brain, 'Hey let's check that guy out,' " says Mr. Poirier.
MySpace even helps marketers reach out to users of the site with what it calls "activation" of the page. When a character profile is launched, MySpace promotes the advertisement with electronic banners on its homepage and incentives for users to add the character as a "friend." For "Talladega Nights," people who befriended Ricky Bobby received a free Ricky Bobby button -- still another form of marketing.

But will allowing advertisers to waltz freely with other MySpace users diminish the popularity of the site?

"It's very coy. They're being sneaky," says Jesse Kozel, a 25-year-old from Florida, listed John Tucker as his friend without realizing the studio paid for the site. Mr. Kozel says he knew the site wasn't run by the actor, but assumed it was one of the many hundreds of amateur sites created in honor of movie characters.

It's not always easy to tell the difference. Anybody can create a site devoted to anything -- and they do. A profile for Willy Wonka matches the feel of other fictional characters, listing his hometown ("the Land of Make Believe"), his occupation ("amazing chocolatier inventor extraordinaire") and his nearly 61,000 "friends." But the Willy Wonka site is created by a fan, not the movie studio.

MySpace allows such unauthorized sites and studios generally love the free promotion. Almost anything goes on profile pages, but MySpace does remove explicit material. Contrary to popular belief, says Mr. Barrett with a laugh, "We do have standards and practices."
Another thing MySpace frowns on is marketers creating pages for commercial products without striking an advertising deal. Some slip through, but MySpace does try to eliminate "repeat offenders," says Mr. Barrett.

MySpace is trying to limit the paid profiles to products that will appeal to the site's users, Mr. Barrett says. Although the site is set to reach 100 million profiles this week, the rapid growth of MySpace is slowing. Eighty percent of the users say they are over age 18 and baby boomers are discovering the site. "You start to have a lot of moms on board," says Mr. Barrett.
MySpace has turned down profiles of movie characters deemed inappropriate, and many products have MySpace pages that users can link to without the personal profile dimension. Users can be "friends" with entire movies, for example, and with Toyota Motor Corp.'s new car, the Yaris, with no fictional characters involved.

"If there were friends from Crest, friends from General Motors, I think they'd be a little upset," says Mr. Barrett. "We do it in a way that it is genuine."

But it can be difficult for fictional characters to be genuine with thousands of friends hoping to interact with them. Posted on John Tucker's page alone are hundreds of requests from fans for him to leave comments on their personal sites. No noticeable responses have been posted. "This is his fan base," says Mr. Kozel of Jesse Metcalfe, the actor who portrays John Tucker. "If he's not [keeping up with it] and the company's not making him, the people leaving these messages would be pretty upset."

Indeed, so much of MySpace's appeal is the interaction among users, that if marketers let commercial sites lie dormant, the appeal will be lost, according to Rachel Honig, co-founder of the digital-marketing firm Digital Power & Light. "Whoever reaches out to that character is probably going to feel a little bit... betrayed is probably a strong word, but that affinity is not going to be there," she says.

Some fictional characters do answer back, when it serves their interests. "Jill Johnson," the lead character from the 2006 remake of the 1979 movie "When a Stranger Calls," wrote on a fan's page: "I'm so glad that I have MySpace friends to keep me company." Her post was timed carefully to the release of the DVD.

Even when the potential is realized, Ms. Honig thinks marketing via MySpace is a fad that will fade quickly. Mr. Barrett says he sees the trend of highly targeted, Web-based marketing growing, not stopping.

"This is more than just a cute little stunt," he says.

Some fans are drawing the line. Renzo Serrada, a 21-year-old college student from Freemont, Calif., has Ricky Bobby listed as his "friend," but turned down the Burger King king.
"That's a little bit too far when they start adding fast-food mascots," says Mr. Serrada.

Write to Elizabeth Holmes at elizabeth.holmes@wsj.com


Are you a blogger? Do you blog religiously? One of the newest trends is blogs and this none-the-less is a testament to that ritual. Yes, I have "conformed" and followed the trend of professional bloggers. So, one of the things on my mind today is the subject of gender blogging sites such as "BlogHer". As a media professional, I appreciate any media vehicle that which can bring a group of 35-54 females together and get their opinions/reach out to them (what a great thing for me use!). But, on the other hand, does it really make a difference if they are women? For instance, if there were an all white male site that promoting banter among that specific gender, would the women be even just slightly upset? Don't get me wrong, I appreciate BlogHer and even cruse the site for information regarding specific demographics. Some food for thought on a Monday morning…. Here is the link to BlogHer....take a look for yourself. http://blogher.org/

Friday, August 04, 2006

Pew Study: How Many are Blogging -- and Why

Blogs have become one of the key mediums for word of mouth. The Pew Internet & American Life Project released new data recently that offers a snapshot of the blogosophere as of April 2006. Among the key findings:
* 8% of consumers (12 million US adults) keep a blog, up from 7% last year.
* 39% of consumers (57 million US adults) read blogs, up from 27% last year.
When asked why they blog, the number one reason given (77%) was "to express themselves creatively". Other reasons included: 76% to "document personal experiences", 59% to "stay in touch with friends and family".
Learn more:http://www.pewinternet.org/PPF/r/186/report_display.asp

New article about people's vacations with nasty habits: Blackberry. This one hits a little to close to home for me- ouch!


BlackBerry on the Beach: You Call This a Vacation?
June 9, 2006
By Deborah Rothberg

By choice or perceived necessity, a staggering 27 percent of the workforce will pack their laptops, cell phones and PDAs along with their flip-flops, beach hats and sunscreen this summer, according CareerBuilder.com's annual vacation survey released June 7.
While down from 33 percent in 2005, the number is a far cry from the days when getaways put the daily grind "out of sight and out of mind."

"Cell phones, pagers and other electronic devices can create an e-leash of sorts. Planning ahead, managing expectations and setting boundaries with your co-workers are key to making sure you get the break you need," said Rosemary Haefner, vice president of human resources at CareerBuilder.com in a statement.

It's men who are the biggest workaholics, with 33 percent expecting to work on projects or check in with the office when they're scheduled for lounging, compared to 25 percent of women.

Still, the numbers are daunting across the board. Of the 84 percent of workers that plan to take a vacation this year, most say they don't think they're taking enough time to recharge, with 32 percent taking a vacation for less than a work week (five days), and 10 percent limiting their vacations to weekend getaways.

Despite this, the workforce is aching to unwind, with 77 percent of workers saying they feel burned out on the job.

They're not taking their working vacations lying down, however, with a slew of workers electing to outright lie about accessibility at their vacation destinations in hopes to catch a break.
Eleven percent of workers blamed bad wireless connections and other technology issues to avoid work while away, and of these, more men (13 percent) than women (10 percent) perjured themselves.

"Work can be demanding, but taking it all with you just brings the stress to a new location," said Haefner.

Haefner offers the overworked masses advice about getting the most relaxation out of their retreats, including giving the office your vacation contact information so they can contact you in an emergency and not vice versa.

Second, she suggests that workers schedule their vacations around, not during, big projects so they can feel less distracted while away.

Third, Haefner recommends that people make every effort to reduce their irreplaceability by training coworkers to help complete their tasks while away, and reciprocating when it's the co-worker's turn to get away.

Fourth, employees should always leave the contact information of the next-in-charge on their outgoing voicemail messages to avoid inbox overload when they return.

Finally, Haefner implores workers to set limits on work's intrusion into break time, checking in once or twice a week only, setting these boundaries with your place of employment before you disembark.

Check out eWEEK.com's IT Management Center for the latest news, reviews and analysis on IT management from CIOInsight.com. Copyright (c) 2006 Ziff Davis Media Inc. All Rights Reserved.

http://www.eweek.com/print_article2/0,1217,a=180516,00.asp