Posted on 06/16/2008 5:45:47 AM PDT by abb
Broadcast networks are starting to experiment in giving makegood inventory in digital streaming episodes in lieu of traditional TV commercial time.
This past season, a handful of advertisers took makegood inventory from ABC on its ABC.com video player during episodes of specific shows. Mike Shaw, president of advertising sales for ABC, would not name those marketers, but noted that in many cases digital inventory was more valuable than on the traditional network.
For instance, Shaw said advertisers got the benefit of higher price, cost-per-thousand viewers (CPM) digital episodes--prices that can be anywhere from one-quarter to one-third higher on network's respective digital players.
In addition, Shaw says advertisers are getting a better rotation of top-rated shows online, such as "Desperate Housewives," "Grey's Anatomy" and "Lost."
"The biggest single selling point is the mix," he says. "You get such a high concentration of your total impression in the top five or six shows. It's a mix of inventory I'd never sell you on the linear network."
Moreover, he says that advertisers typically get just their exclusive commercial message played in an individual stream of an episode, and the message can be interactive.
One media executive said NBC experimented in giving Internet makegoods instead of traditional TV makegoods in the past. But the network isn't currently doing this practice for advertisers.
More than a few media executives were astonished that some marketers would agree to this. "What have we come to?" asks one disgruntled executive. "How can this beat full-screen television? We don't even know if they can measure the Internet properly, let alone giving us a demographic breakdown."
So far, the bulk of the broadcast networks' massive makegood problems this season--specifically ABC, NBC, CW, and CBS--have been handled in the traditional ways, according to most media agency executives and media sellers. All executives say that comes from "managing" their inventory supplies, which essentially means selling somewhat less scatter and using unsold inventory for advertiser makegoods.
Because of the scale of viewer erosion this season, some industry analysts anticipate that makegood inventory from last season will flow in the fourth quarter of this year, the new season. And that complicates networks' scatter sales activities. Others expect the networks to take care of advertisers this summer by giving makegood commercial inventory.
Still others believe some networks may have added inventory in select big-rated shows this season to take care of the gross rating points that were promised--but not delivered--to advertisers.
A CBS spokeswoman would not comment. An NBC spokeswoman said: "Those conversations have been with our advertisers."
"Network evening newscasts will go dark after the '08 elections and their news divisions disbanded."
http://www.nytimes.com/2008/06/16/business/media/16adcol.html?ref=business
Remote Clicks That Do More Than Just Change Channels
By STUART ELLIOTT
AN ambitious effort to take interactive television into American homes is expanding after a test of the system began at a single station last month.
The system, operated by a company in Boston, Backchannel Media, was introduced in May in Boston at WCVB, an affiliate of ABC that is owned by Hearst-Argyle Television. Now, another Hearst-Argyle station, WMUR in Manchester, N.H., which is also an ABC affiliate, is signing on, along with WJAR in Providence, R.I., an NBC affiliate that is owned by Media General.
The test offers viewers programs — and ads — they can respond to by using remote controls to click on icons they see on their screens. Each click sends a signal to the viewer’s personal portal — basically, a site where everything the person has expressed interest in is aggregated. Then, the viewer can look up more information there the next time he or she goes online.
For example, someone who clicks on an icon embedded in a spot for a local car dealer can send to a personal portal a link to the dealer’s Web site or to the Web site of the car brand. Backchannel Media — which hosts the portals on its server — refers to these response opportunities as “clickable moments.”
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http://www.latimes.com/business/la-fi-dvd16-2008jun16,0,5293240.story
From the Los Angeles Times
ENTERTAINMENT
Hollywood studios are editing their home-video strategy
Some are testing offering online and cable rentals on the same day as DVD releases to boost sales.
By Dawn C. Chmielewski
Los Angeles Times Staff Writer
June 16, 2008
As one of their most lucrative sources of revenue stagnates, several Hollywood studios are considering something that would have been unthinkable even two years ago: renting films to cable subscribers and Internet users on the same day they’re released on DVD.
The studios have resisted such a move, fearing that offering a cheap movie rental with the click of a mouse or remote control on the same day as its DVD release would undercut DVD sales. Even worse, such an action could invite retaliation from powerful retailers such as Wal-Mart Stores Inc., the single largest seller of DVDs in the country.
Warner Bros. was the first to change its strategy, saying tests with two cable operators proved fears of “cannibalization” unfounded. Now, Twentieth Century Fox says it will consider releasing certain films simultaneously on DVD and for rental via cable and online.
Walt Disney Co. and Universal Studios, meanwhile, are tinkering with release dates, shortening the period between a film’s release on DVD and its availability for rental on cable or the Internet. Disney last year shortened the gap to 15 days from 45 days for selected titles such as “National Treasure 2: Book of Secrets.” Universal cut the lag to 29 days from 45 days.
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http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=84682
Shift From Traditional To Online Media Contributing To Ad Economy Slowdown
by Joe Mandese, Monday, Jun 16, 2008 7:00 AM ET
The downturn in the U.S. advertising economy may be far more protracted than any since Madison Avenue began tracking its growth—and the chief factor, ironically, may be one of the fastest-growing sources of media spending: Online.
At least that’s what advertising economist Jon Swallen is predicting from a slew of data indicating that the downturn is only partly due to cyclical economic issues such as sagging consumer spending. A bigger and much more fundamental change that will slow advertising growth into the foreseeable future, he says, is the accelerated shift of advertising budgets from expensive and highly inefficient traditional media such as TV, newspapers and magazines into much more cost-effective digital, and largely unmeasured, “below-the-line” media options.
“Some of what we are seeing continues to reflect that shift from traditional to digital media,” said Swallen, who as senior vice president-research at TNS Media Intelligence has been closely monitoring which factors have been contributing to the slow growth on Madison Avenue. Last week, Swallen released an analysis of first-quarter 2008 ad spending across the major media, which showed a relatively tepid growth of just 0.6%.
While that is an improvement from 2007, it’s not enough to suggest that demand for media is rebounding. Most troubling of all, 2008 is a so-called “quadrennial” year: a once-every-four-year phenomenon in which two big advertising events—the U.S. presidential election and the Summer Olympic Games—have historically been a boon to the advertising economy.
While those cyclical events may yet provide some stimulus later in the year, they are being offset by general economics—especially the downturn in consumer confidence and consumer spending amid spiraling food and energy costs, the residual effects of the credit crisis and ebbing real estate values.
While those cyclical patterns will eventually play out, Swallen is predicting that the more fundamental shift toward a digital media economy will continue to dampen advertising growth for some time to come, shaving at least a couple of percentage points off historical U.S. advertising expansion.
“I think we are starting to realize that our expectation for what constitutes normal growth in advertising has been diminished from earlier in this decade,” Swallen said. “We used to think of 3% to 4% growth as our birthright. Now 3% may be the high end of what we can expect.”
In fact, Swallen recently completed an analysis looking at what he terms the “core advertising economy”—the amount of underlying growth that occurs after factoring out special events such as the Olympics and elections. The outlook for that is even more lackluster.
“It looks like we’re in a period now where zero to 3% growth is the normal parameter, rather than the historical 3% to 5% growth,” he said.
Other advertising economists are expected to weigh in with their predictions soon, including Interpublic analysts Bob Coen and Brian Wieser. Coen, who has served as the ad industry’s chief source for advertising spending estimates for decades, has historically tracked the industry’s growth relative to the growth of the U.S. gross domestic product. Advertising generally has matched or exceeded the growth in U.S. GDP in all but the worst of economic times. But TNS MI’s Swallen says that historical patterns, including the so-called rebound effect the ad industry has had coming out of economic recessions, may no longer apply.
“There are some things that are different about this slowdown,” he said, adding: “The advertising economy is a subset of the general economy. What’s different about this economic cycle is that it is consumer-led. The last big turndown that we had in 2001, post-9/11 and the dot-com bust wasn’t so much of a consumer-led slowdown. There were other economic factors. This one feels different. What we’re in right now is a period in which consumers are stressed and strained by rising food prices, rising fuel prices, a crunch on credit, and a feeling that things will get worse before they get better. Without a rise in consumer spending, that [disincentivizes] marketers from ramping up consumer ad spending.”
Meanwhile, Swallen said marketers have begun adjusting how and where they spend those constrained marketing dollars, with more going toward more efficient digital media—especially things like online search—and to unmeasured forms of media that are dampening the inflation of historically high-priced traditional media. In fact, the major TV networks are crowing that they managed to preserve the volume of advertising commitments in the recently completed 2008-09 prime-time upfront advertising marketplace. But they only managed to do so by packaging more inventory—including some high-demand online video advertising—into the mix they sold to advertisers to get to those levels.
The picture for other forms of traditional media, especially print, is even more dire. Swallen predicts the epic shift away from newspaper advertising spending won’t bottom out anytime soon. And even consumer magazines, which have seemed relatively immune to the ill effects of the advertising economy, are facing an uncertain future as marketers push for greater “flexibility.” That’s anathema to consumer magazines, many of which are published monthly and require advertisers and agencies to commit far in advance of their publishing cycles.
“That’s one of the things that have contributed to a slowdown in first-quarter magazine spending,” Swallen observes, citing a minuscule 0.2% rise in consumer magazine ad spending during the quarter. “It’s that hesitancy of advertisers to wait as long as they can to commit their funds that is hurting magazine publishers.”
And even consumer magazines, which have seemed relatively immune to the ill effects of the advertising economy, are facing an uncertain future as marketers push for greater "flexibility."
Have you noticed the flurry of stories about cable companies wanting to charge for extra bandwidth? The reason for that strategy now becomes evident. They see the increased internet usage coming down the pike and they want to get the toll gates in place before it happens.
Maybe I'm mistaken on this, but I wonder how much of the CM's that needed make goods were due to the writer's strike?
Probably a lot. You’ll see much more make-goods this year, I think. Internet advertising is - from what I can tell - much more ‘efficient’ than broadcast advertising.
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