Grim Forecast for Local Broadcast

Grim Forecast for Local Broadcast

SNL Kagan's latest deflating figures follow steep declines in 2008

March 31, 2009

-By Katy Bachman, Mediaweek

NEW YORK Another forecaster is predicting a grim outlook in 2009 for both radio and spot TV. According to SNL Kagan's updated Radio/TV Station Annual Outlook, radio revenue will drop 15 percent, only a tad better than spot TV which will decline 15.7 percent.

The forecast follows steep declines in 2008. Radio ended the year down 10 percent to $17.7 billion and spot TV was down 6.9 percent to $20.1 billion.

SNL Kagan is forecasting a turnaround in 2010, with modest growth for both media in 2013. In the five-year forecast, radio revenue will decline by a CAGR of 1.9 percent and TV revenue will drop 2 percent.

Due to the crisis in the auto industry, markets in Michigan will suffer the most, sending radio down 16.3 percent and TV down 17.7 percent this year. In contrast, Washington, D.C. will hold up better than other markets, with a five-year CAGR of -0.4 percent for radio and -0.2 percent for TV, followed by San Diego, with a CAGR of -0.4 percent for radio and -0.5 percent for TV.

Stations that harness new media and leverage their local relationships in the community should be able to survive the downturn. "Those radio and TV station owners who are able to reduce expenses while continuing to transition their business models to develop digital assets and non-traditional revenue streams will survive and reemerge as more efficient operators," said Robin Flynn, senior analyst at SNL Kagan. "If broadcasters have an advantage over Internet companies, it is their reach within local communities, and their financial success will depend on how they work to meet the needs of the local market."

The Surprising Economics of Digital Advertising

NEW YORK It is commonly held as a self-evident truth that digital advertising is cheaper to produce than traditional advertising. Stories abound of low-cost online executions that have taken on lives of their own on the Internet, reaching millions of consumers with zero media spending. Just ask the Subservient Chicken or go and elf yourself.

But a white paper being released today by the American Association of Advertising Agencies argues the opposite.

"A Marketer's Guide to Understanding the Economics of Digital Compared to Traditional Advertising and Media Services" was written by Joe Burton, evp and COO of McCann Worldgroup's San Francisco operation. (It's available at the 4A's Web site, aaaa.org.) Explaining the need for the report, Burton said, "The lack of understanding of the [digital] space is the single biggest friction point between agencies and clients."

For the report, Burton spoke to 25 experts from a wide range of marketing disciplines. He garnered input from C-level executives at WPP, Omnicom and IPG, and drew data and analysis from another 25 analysts, authors, creatives and production executives.

The fundamental argument presented is that digital advertising is inevitably more complex and therefore more expensive than advertising in traditional channels. However, the paper goes on to argue that the extra value delivered for marketers by digital advertising far outweighs the extra cost. Only if the shift to digital is inspired by the right reason -- a better, more rewarding service for clients -- will it result in agencies equipped to thrive in the future, according to the white paper.

Jeff Hicks, president and CEO of Crispin Porter + Bogusky, agreed with the trade-off cited in the report. "It is all the things clients and agencies love about digital that drives the cost up," he said.

Four main reasons are given for why digital advertising is more expensive.

The first is that digital work is more labor intensive because there are inevitably many more executions to be created in a wider range of media. Also, digital campaigns are more dynamic, subject to change even within the lifetime of a campaign, requiring more creative, media planning and buying resources.

Digital work also requires that more of the production work is done in-house, whereas in traditional advertising much of it is outsourced. This means digital work requires the establishment of in-house resources and expertise, including designers, planners and programmers. "If you outsource analytics, technology, Web development, programming, pretty soon you'll have outsourced the project," said Burton.

Thirdly, digital advertising necessitates a blurring of the lines among media, production and creative services. This results in extra costs for agencies as they have generally separated these functions. Reorganizing is expensive.

And digital work almost always means the creation of new job functions and organizational structures. Particularly significant is the need for developers and technologists, and the management associated with them, but there are others. The traditional traffic function, for example, is generally insufficient to manage the complexities of digital projects.

The report then argues that digital advertising delivers much more value because it can be targeted, tracked, measured and adjusted on the fly. The paper claims that these enhanced returns for marketers far outweigh the extra cost for digital advertising.

The paper finishes by offering some practical advice to agencies, such as the need to educate marketing partners about the different economics that apply to digital advertising and a warning to avoid the "shiny new toy" syndrome.

Reiterating the report's central theme, Tom Finneran, the 4A's evp of agency management services, said, "As clients move money into digital with all its marketing benefits, the level of agency service they require rises dramatically."

A new study from the 4A's turns some general beliefs about online advertising on its head

How to Make Your Online Video Go Viral

Here's the Magic Formula to Get Your Push Embraced, and Avoid Being Stalled at the Gate

by Matt Cutler

Consuming internet video is a full-contact sport -- the initial viewing experience is just a gateway to the commenting, rating, sharing and even remixing or mashing up the original video content. And what brand doesn't want to tap into this new class of consumer behavior, making their ads "go viral" (cough) and picking up millions of "free" (cough, cough) impressions?

Starting off strong

And, increasingly, success is seeded in the campaign's earliest days. We've discovered viral video ad campaigns tend to hit the ground running -- they average 35% of their total viewership during their first week. This initial growth phase is likely to set the campaign's overall trajectory, so many brands now front-load their marketing and promotion efforts.

The campaigns profiled here then entered a two-week-transition phase, during which their viewership grew by 20% each week. Note that these growth rates are roughly the same between the embraced campaigns and the stalled campaigns, making the performance during launch all the more important.

Finally, after the growth and transition phases have passed, viral-video ad campaigns tend to settle in to a steady-state phase, growing at 10% or less per week thereafter. It's worth nothing that some campaigns, such as "Durex: Get It On," have a more linear view-growth trajectory, steadily gaining new views each week.

Here's how your video can hit the ground running

Seed smartly. Not all video-sharing sites are created equal in terms of the audiences they appeal to. So put it where you're most likely to find the right demographic. Is it young males you think will spread your video? Then try Break.com.

Think deep, not wide. Successful campaigns don't distribute their clips to 50 networks at once. Just because you upload it to a site doesn't mean everyone will see it; instead select 3 to 5, buy media to support it, reach out to targeted press and users and aim to climb that "most watched" list at a handful of sites.

Don't spell it all out. From a creative standpoint, you want to leave room for interpretation. Look at Microsoft's Jerry Seinfeld- and Bill Gates-starring "I'm a PC" campaign or Cadbury's "Gorilla" ad. Successful online videos keep people guessing -- "Is it real?" "Did that really happen?" That helps propagate the content.

Why TV dollars won't become digital pennies

March 12, 2009

If you want to have a "show me the money" conversation in Hollywood, mention two words: online video. The discussion will quickly turn to dogs on skateboards and other content that advertisers avoid.

However, the story for professionally produced content is different. ABC's "Lost," for example, was seen by more than 1.4 million unique viewers in December, according to Nielsen. Transforming this growing traffic into a market rivaling traditional television may require decades. In the interim, the industry is working on more targeted programming and advertising.

First the good news. The audience for online professional video is younger, wealthier and better educated than the broader TV audience. Advertisers crave these 18-49 year olds, lifting CPMs (cost-per-thousand impressions) for premium online video over $25, which is higher than television.

Advertisers also like the ad recall rates of 21 percent for streaming video, more than double the recall for TV, according to the GfK Group. Moreover, digital consumption is additive for a loyal fan base. More than 70 percent of online viewers claim to be fans who were unable to view the original show.

This high quality audience is also growing quickly. While still only a tiny fraction of the $60 billion U.S. television advertising market, research firm eMarketer estimates that spending for U.S. online video advertising will double from $587 million last year to $1.25 billion next year.

By 2013, as much as 70 percent of that revenue will likely come from professional content (The Diffusion Group). That means more advertising will be available to support professional video content online, and a larger, more affluent demographic will be watching.

Bernanke: Recession’s end ‘probably’ this year

In rare TV interview Fed boss says lack of ‘political will’ hurting recovery

WASHINGTON - America's recession "probably" will end this year if the government succeeds in bolstering the banking system, Federal Reserve Chairman Ben Bernanke said Sunday in a rare television interview.

In carefully hedged remarks in a taped interview with CBS' "60 Minutes," Bernanke seemed to express a bit more optimism that this could be done.

Still, Bernanke stressed — as he did to Congress last month — that the prospects for the recession ending this year and a recovery taking root next year hinge on a difficult task: getting banks to lend more freely again and getting the financial markets to work more normally.

"We've seen some progress in the financial markets, absolutely," Bernanke said. "But until we get that stabilized and working normally, we're not going to see recovery.

"But we do have a plan. We're working on it. And, I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year."

Even if the recession, which began in December 2007, ends this year, the unemployment rate will keep climbing past the current quarter-century high of 8.1 percent, Bernanke said.

A growing number of economists think the jobless rate will hit 10 percent by the end of this year.

Asked about the biggest potential dangers now, Bernanke suggested a lack of "political will" to solve the financial crisis.

He said, though, that the United States has averted the risk of plunging into a depression.

"I think we've gotten past that," he said.

Mayor Nutter confronts alleged tax deadbeat

By Jeff Shields

Inquirer Staff Writer

Was that just another sidewalk altercation yesterday afternoon on South Broad Street, or was it Mayor Nutter trading verbal barbs with an alleged tax deadbeat?

Robert Gamburg, one of three lawyers at 121 S. Broad St. who owe the city a total of $348,000 in business privilege taxes, didn't like that Nutter chose to shame him with a news conference outside his building.

Nutter called the conference for 2 p.m. yesterday to show the measures he would take to embarrass delinquent taxpayers.

Nutter held a similar news conference in November, when he told those who owed more than $50,000 that he would be coming after them. Nutter said the city has collected $2.5 million in delinquent taxes in that effort.

Robert Gamburg owes $130,925; his father, Jerome, owes $84,566; and Joseph Santaguida owes $132,515, according to the city. Robert Gamburg and Santaguida were most recently in the news as attorneys for Dwight Dixon, the man shot in the hand in April with a gun belonging to NFL wide receiver Marvin Harrison.

Jerome Gamburg and Santaguida did not return calls for comment. Robert Gamburg declined comment beyond what he said to Nutter.

After Nutter denounced the three in front of the building, sheriff's deputies proceeded to deliver notices, while television cameras rolled, notifying the lawyers that their belongings were to be sold at auction on April 2 if they fail to pay their bills.

"The city will be forced to collect our money by any means necessary," Nutter said.

Robert Gamburg confronted Nutter after the news conference, as Nutter chatted with reporters. He asked whether the mayor was aware that he was in the process of arranging to pay his taxes.

"I'd also like to know if we are the only three people in the entire city that owe back taxes," Gamburg said, and wanted to know why Nutter chose his building to hold the news conference.

"I'm not going to argue with you on the sidewalk - you owe the city money, pay your taxes," Nutter said.

When Gamburg questioned why Nutter was getting "upset," Nutter raised the bar.

"Oh, you've never seen me upset," Nutter said. "So I'm not upset. Just pay your taxes and everything will be fine."

Nutter declared the conversation over, the men shook hands, and Nutter went back to City Hall and Gamburg went back into his building.

Face Your Book

This article from the Weekly Standard has a very interesting POV on Facebook. Have a read I think you will find some intersting perspectives. Click for link here

Jam Band Phish Makes Big Impact This Weekend

After much anticipation, Phish made it's second comeback this weekend in Hampton, Virgina. Thousands of fans made the trip. A local economy thrived. See www.phish.com for concert stories and updates.

Portals, Social Networks Lose Share in Razorfish Ad-Spending Study

Digital Shop Says Clients Shifted Dollars to Search, Ad Networks in 2008. The Ad spending is slowly leaving social networking and moving to leisure, media related sites.

NEW YORK (AdAge.com) -- When it comes to where online ad dollars are going, Razorfish's annual digital-outlook report is always an interesting glimpse into one agency's decisions. And as Razorfish is the second-largest agency by digital revenue, according to Ad Age DataCenter data, it's worth paying attention.

So where did the money go? In 2008 the portal category, which includes sites such as Yahoo and MSN, nabbed a smaller share of Razorfish's dollars, 16% vs. 19% in 2007. The reason, Razorfish said, was that while the scale portals deliver still matters, the choices for obtaining targeted scale outside of portals have grown. Think about targeting women at NBC Universal or Meredith sites or buying men at scale from a property such as ESPN.

Spending on community sites, which include social networks such as Facebook and MySpace, actually went down to 16%, from 19% the year before.

Why, despite so much buzz around these sites, did spending decline?

"We're looking at social not so much as social media but as social-influence marketing," said Terri Walter, VP-global emerging media. The question becomes how a brand can have a presence within social environments -- and that doesn't always include paid media. Also, social networks were new in 2007, and many clients were jumping in, Ms. Walter said, with more dollars going toward media; today they're stepping back and looking for new ways to use the networks.

Spending on entertainment sites was way up in 2008, to 23% of share from 18%, for two reasons: First, Razorfish finds that people in leisure environments are more open to advertising and the ads appear to convert better, and second, there were many new premium video sites where advertisers could spend their dollars. Said Ms. Baehr: "Hulu didn't really exist for us in 2007."

Top 10 i-Phone Apps

It's More Than a Toy; It's a Business Tool

Posted by Tom Martin on 03.03.09 @ 05:01 PM

Tom Martin

As I work through the data analysis of my Mardi Gras Twitter experiment, I thought I'd have some fun with this week's post and share my top 10 iPhone apps that every Adman (and Adwoman) should have to be more successful in today's high-intensity, gotta-have-it-yesterday ad world.

A special thanks to Mike Rainey, our Chief Creative Officer for helping me to compile this list.

10. iBeer. For those days when no one remembers to make the Free Beer Friday beer run. Yes, sadly it does happen.

9. Shazam. For when you find the perfect background music for the campaign that is due tomorrow while sitting at the wine bar eating breakfast.

8. Twittelator Pro. If you're on Twitter, you know why. This one lets you basically do it all from your iPhone. In fact, it powered my entire Mardi Gras Twitter experiment. Troubles here and there, but overall, good stuff.

7. Facebook. Because it is much easier to hide an iPhone screen when you're boss comes in your office.

6. Files. A great app that lets you create a file tree on your iPhone. I use it to carry all my important files with me so that no matter where I am, I can reference any client files. Supports all major formats and syncs via WiFi. Very cool little app that I'd highly recommend.

5. WhereTraveler. A great app for any traveler. Find out security wait times at all airports, search for info on your destination like restaurants, shopping and entertainment. And for when things go wrong, phone numbers for every airline and rental car agency. Just tap a screen to call.

4. Google Reader. I follow over 100 blogs so being able to read them as I ride the elevator or when I'm in that really boring meeting you're running is invaluable.

3. OmniFocus. For all you David Allen GTD folks, this is a great stand-alone iPhone app (which is how I use it) or you can use it with the desktop client too. But beware, I've heard the sync is a little hit and miss when you use the desktop app in conjunction with the iPhone app. The "nearby" feature is the absolute bomb when you find yourself with a few spare minutes.

2. XpenseTrkr. Like this one needs an explanation. It even lets you take a picture of the receipt, something I'm thinking our accounting folks will relish me using more in the future.

1. And the number one most important iPhone app for today's crazed Adman/Adwoman is ... drum roll please ... Lightsaber Unleashed. Because sometimes there is just no better way to settle a difference of opinion with cranky art directors.

Very Cool API by Skittles

For tech savy people check out this API. Skittles piggy backs all of your favorite Web 2.0 Websites.