Adventures In Business Research & Media Culture With Don Mast

Wall Street Journal surpasses USA Today as No. 1

2009-10-14T15:58:00.001-07:00

Wall Street Journal surpasses USA Today as No. 1

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2009-10-05T14:46:00.001-07:00

Hello Friends, I am loving this book! I found this book while on a trip with my family. This is perfect for any father and son to read together... Have A Great Day! -- Don

Author: D. C. Beard

The Handy Book was the perfect survival manual, when it first came out in 1882 -- and remains a classic today in its 37th printing! It contains plans for 16 kinds of kites and hot-air balloons and fishing tackle. It tells you how to make and stock an aquarium, to construct a water telescope and how to camp out without a tent or in a hut made from pine boughs. How to build 10 kinds of boats, including a flatboat with a covered cabin. How to make bird calls and squirt guns with astonishing range!The ultimate pre-TV, anti-couch potato activity book, it answers the question,

"What's there to do?"

2009-10-01T16:01:00.001-07:00

Fantastic Article About Print Media

Four new strategies offer a path to future profits for today’s troubled newspaper and magazine companies.

Reinventing Print Media

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2009-08-31T16:18:00.000-07:00

As US newspaper publishers mull charging readers on the Web, aPennsylvania daily announced plans on Monday to put some content behind a pay wall.

The Pittsburgh Post-Gazette said "PG+" would be a "members-only website with interactive features and exclusive content" available to subscribers for 36 dollars a year or for 3.99 dollars a month.

It said "PG+" would not replace Post-Gazette.com, the newspaper's current website, but would feature "a new stream of exclusive blogs, videos, live chats and behind-the-scenes insights into the news of the day."

Post-Gazette.com will continue to provide its mix of content and would remain free, the newspaper said.

The Post-Gazette's move comes as newspapers across the United Statesgrapple with a steep plunge in print advertising revenue, steadily declining circulation and the migration of readers to free news online.

According to the Los Angeles Times, Rupert Murdoch's media giant News Corp. is holding talks with other leading newspaper publishers on forming a consortium that would charge for news online and on portable devices.

The newspaper said News Corp.'s chief digital officer, Jonathan Miller, is believed to have met with representatives of The New York Times Co.,Washington Post Co., Hearst Corp. and Tribune Co., publisher of the Los Angeles Times.

Media analysts have been engaged in a fierce debate over whether readers would be willing to pay for news online after becoming accustomed for so many years to getting it for free.

2009-08-22T13:02:00.000-07:00

CBS to run video ad in magazine this fall!
by Caroline McCarthy

NEW YORK--Broadcast network CBS will be advertising its fall TV season with a video-chip ad embedded in an issue of Entertainment Weekly.

The September 18 issue of the Time Inc.-owned magazine will feature the first video ad to appear in print, George Schweitzer, CBS marketing president, said Wednesday at a press conference at the company's headquarters here.

The ad will be launched in partnership with PepsiCo to promote Pepsi Max soda and the TV network's Monday prime-time lineup. Not everyone will be seeing it: the ad will appear in a magazine insert sent to subscribers in the New York and Los Angeles areas--an edition without the video chip will be sent to subscribers elsewhere and show up on newsstands.

The technology for the battery-powered ads was manufactured by a Los Angeles-based company called Americhip, and each ad can handle about 40 minutes of video.

Here are some more details about the Americhip technology: the screen, which is 2.7 millimeters thick, has a 320x240 resolution. The battery lasts for about 65 to 70 minutes, and can be recharged, believe it or not, with a mini USB cord--there's a jack on the back of it. The screen, which uses thin film transistor liquid crystal display (TFT LCD) technology, is enforced by protective polycarbonate. It's a product that has been in development at Americhip for about two years, spokesman Tim Clegg told CNET News via e-mail.

"It's leadership in innovation, which we really stress at CBS in every part of our company," Schweitzer said of the ads, which were developed with the collaboration of the Ignition Factory, a division of the Omnicom Group's OMD media agency.

PepsiCo has been experimenting with edgy, experimental ads for some time now, distributing millions of 3D glasses for its SoBe LifeWater Super Bowl ad earlier this year. It more recently launched a new Mountain Dew flavor by inviting prominent Twitter users to a party at a trendy Brooklyn venue.

Pepsi Max is the company's new diet soda geared toward men, advertised earlier this summer with bold print ads that declared, "Save the calories for bacon."

"The evolution of marketing television in the fall--it used to be as simple as this," Schweitzer said, holding up a vintage copy of TV Guide. "It was axiomatic in those days. If you took an ad in TV Guide, people watched your program. Not anymore."

Disclosure: CNET News is published by CBS Interactive, a unit of CBS.

This post was updated at 1:38 p.m. PT with more details about Americhip's technology.

Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos. E-mail Caroline.

2009-07-25T19:41:00.000-07:00

Media moguls rethink Web advertising in downturn
By Gina Keating and Alex Dobuzinskis
PASADENA, Calif (Reuters) - The recession-fueled advertising downturn underlines the urgency of using the Web to glean data and target consumers directly, rather than blasting them with a barrage of TV-style ads, media executives say.

At the Fortune Brainstorm: TECH conference in Pasadena this week, Walt Disney Co Chief Executive Robert Iger opened a discussion about new ways to market to consumers, when he described himself as, "pretty bullish about what technology is going to allow in terms of behavioral tracking."

Executives from AOL, a division of Time Warner Inc, News Corp and IAC/InterActiveCorp echoed similar hopes about the potential to reach consumers online.

As advertising dollars grow ever more scarce, companies have been forced to rethink how they reach consumers and have moved away from the traditional 30-second spot to the kinds of targeted, Internet-driven marketing campaigns that have been talked about for years.

Internet advertising in the United States -- a $23.4 billion market in 2008 -- was down 5 percent in the first quarter of this year and Iger and other executives say the sector may not return to the historic growth trajectory seen before the recession.

Jonathan Miller, head of News Corp's Digital Media Group, believes advertising is undergoing, "fundamental changes ... and you have to tease them out of the recession effects.

"Marketing is on an arc to become more efficient. My dollar should go further. And that says the advertising pool may not grow at the rate that it's traditionally grown at, even out of this recession."

HITTING THE TARGET
Targeting consumers via demographics, profiling, and their social networks, "you learn a lot about people and you can identify them," Miller added.

The thinking among these media executives is that advances in technology is enabling them to build more detailed profiles of consumers -- which can then either be sold as a commodity or employed in their own marketing campaigns.

AOL Chief Executive Tim Armstrong, former sales chief at Google Inc, also sees new marketing opportunities from consumer referrals and tracking.

"Where people actually go, what they do, how they do it," he said. "It's not just about data, it's about the insight. If you're Procter & Gamble, or Kellogg's, or Coke or whatever, forget all the data.

What is the insight you get out of it? How does that actually change your perception?"

But Ed Moran, director of product innovation for Deloitte, said tracking tastes and developing profiles is fine, as long as advertisers do not make the old media mistake of finding their optimum consumers, only to show them a commercial.

Moran said next-generation advertising will be driven by the tastes and habits of 14 to 24 year-old "millennials" whose lives center on social networks and Internet-enabled handsets.
"A more effective way of reaching these young folks ... is to use their social networks as influencers, rather than bombarding them with ads," Moran said.

To that end, Barry Diller, chief executive of Web giant IAC/InterActiveCorp, said Internet advertising must evolve from displays and become integrated into the content of websites.
Even actor and media producer Ashton Kutcher chimed in at the conference, saying the billboard-style display ad is already outdated.

"People who have grown up on the Internet have trained themselves not to see it," he added.
(Reporting by Gina Keating and Alex Dobuzinskis; editing by Edwin Chan and Andre Grenon))

© Thomson Reuters 2009 All rights reserved

2009-04-22T15:36:00.000-07:00

Convincing Consumers to Spend Again
by William J. Holstein

4/07/09
In a brutal sales environment, retailers and manufacturers, led by the auto industry, are finding that smarter marketing — not better products — may be the best way to a customer’s heart.

Joel Ewanick’s job as vice president of marketing for Hyundai Motor America put him on the front line last year in the effort to determine, in a bleak economic climate, what motivated people to buy cars and what frightened them away. As early as the summer of 2008, he began noticing in focus groups that more and more consumers were putting off vehicle purchases because they were worried about losing their jobs. “We had a consumer insight,” Ewanick recalls. “People were pulling back because of their long-term financial outlooks.”

Around the same time, Ewanick recalled getting unsolicited flyers in the mail from mortgage companies offering consumers relief from their monthly payments if they were to die or lose their jobs. He began to wonder if car companies could do the same thing.

He got the chance to test this possibility in the fall of 2008, as economic difficulties quickly deepened and credit dried up. It became clear “that this was no longer a garden variety recession,” Ewanick says. The industry’s sales plunged from what experts consider a healthy level of about 17 million units a year to a pace of about 9.2 million a year. Hyundai’s sales fell 41 percent in the fourth quarter. Traditional marketing clearly wasn’t enough.

Ewanick found a company called Walkaway USA, a subsidiary of EFG Companies in Irving, Tex., that specializes in helping auto dealers improve their sales. Walkaway was testing the concept of allowing financially troubled buyers in Canada to escape their purchase agreements. It was precisely the kind of innovation that Ewanick was looking for.

Ewanick signed Walkaway to manage a program in the U.S., calledHyundai Assurance, promising buyers that if they lost their jobs within a year, they could return their vehicles with no negative impact on their credit ratings. Walkaway would administer the program, which entails documenting that a customer has really lost his or her job. The program was launched in January 2009 via television commercials that feature an announcer soothing viewers: “These are tough times. We’re all going to get through it together.”

It seems to have worked. Hyundai’s sales in North America were up 4.9 percent in the first two months of 2009, when the overall market declined 39.4 percent from the comparable period in 2008.

Marketers today in all industries are forced to come up with similarly innovative ways to entice consumers to part with their money. Clothing retailers are offering two for the price of one sales, electronics stores are making extended warranties free, and airlines are offering deep fare discounts. But the auto industry has had to be particularly creative. Buying a big-ticket item like a car is a major commitment, and in difficult economic times consumers are more likely to avoid or delay such a purchase unless they can be convinced that they are getting a deal too good to turn down.

To make this case, in March, Ford Motor Company launched a two-month incentive program, the Ford Advantage Plan, that covers auto loan payments for up to a year if a customer loses his or her job. On the same day, the General Motors Corporation announced its Total Confidence plan, which picks up the tab on auto loans for laid-off customers for up to nine months. This program also provides up to US$5,000 to customers buying new GM vehicles to close out existing car loans if the value of the trade-in automobile has fallen below the loan payoff.

And last January, the Chrysler Corporation rolled out a program calledEmployee Pricing Plus, which expands on a marketing gimmick used before that offers customers the same price available to employees. In this twist, buyers also get cash rebates ranging from $3,500 to $6,000 and zero percent financing. Chrysler was also the first U.S. automaker to offer car buyers fuel cards that guaranteed fixed gasoline prices of no more than $2.99, with its Let’s Refuel America program.

That program was particularly popular when gasoline prices hovered near $4 a gallon. But now that prices have plunged, Pricelock Inc., the company administering the program, is adapting the offer to market it to companies that, for example, own fleets of commercial vehicles, says Robert Fell, Pricelock’s founder and chief executive officer. “In times of high gas prices, consumers are really interested in this product because they want peace of mind,” he explains. “But with lower prices, businesses are most interested because it’s a very effective cost insurance program.” Fell’s company, 20 percent of which is owned by the Goldman Sachs Group Inc., relies on Goldman to use derivatives to lock in gasoline prices.

Auto manufacturers also are being smarter about how they spend their hundreds of millions of marketing and advertising dollars, says Stephen Berkov, senior marketing analyst at the popular automotive Web sitewww.edmunds.com, based in Santa Monica, Calif. “When budgets are extremely constrained and the economy is in such dire straits, they are not going to market to people who are not in the market,” says Berkov, who is former head of marketing for Audi of America Inc.

One part of that effort is an attempt to use television advertising to drive potential buyers to Web sites, on the assumption that people who seek out information on the Internet have higher education levels and are more intent on actually purchasing a car, as opposed to merely browsing. Honda Motor Company, for example, is expected to launch an advertising effort in April to drive viewers to www.edmunds.com, which attracts 12.5 million users per month. The ads will urge customers to look at the “true cost to own,” an Edmunds-trademarked specialty, in considering whether to buy a Honda. The true cost of ownership, as the phrase suggests, adds up all the costs of operating and maintaining a vehicle over its lifetime, and the Edmunds site helps shoppers compare different models.

Companies are also spending more to engage with customers once they reach their Web sites. GM has increased the percentage of its advertising budget going to online outlets to 18 percent of its total, says Berkov, whereas a luxury and performance brand such as Porsche has hit the 50 percent threshold.

Overall, even luxury marques such as Mercedes-Benz USA Inc. and the BMW Group are stressing the value of their cars and financing packages. Some BMW dealerships in the New York metropolitan area are offering to pay the first three months of their customers’ leases. Berkov says it’s smart for the German luxury makers to offer such deals, at the risk of tarnishing their upscale images, because wealthy buyers now also need to validate their decision. “The luxury buyer needs to be able to justify to his friends why he pulled the trigger” and purchased or leased an expensive vehicle, Berkov explains.

Of all the new marketing efforts, the Hyundai Assurance program has attracted the most attention. In fact, the trend is already expanding beyond autos — Jet Blue Airways Corporation and home builders Toll Brothers Inc. and Lennar Corporation are offering similar programs. Hyundai does not require that a customer have a certain credit rating to enroll. If the buyer has a job and finances the purchase of a new Hyundai, whether through a bank or credit union or Hyundai itself, he or she qualifies. (Buyers who pay cash do not.) Until April 30, 2009, the company is also offering Assurance Plus, which covers the first three installment payments.

How long will automakers — and marketers in all industries — have to keep offering special marketing programs and incentives? “We hope we don’t need this forever,” Ewanick says of Hyundai Assurance. “I look forward to the day I can take it off.” Yet industry-wide annual car sales would have to reach the 12 million or 13 million unit-a-year level before marketers could even begin to ease back. From today’s perch, that seems a long way off; marketers are going to have to get used to seeking out solutions that are ever more inventive.

Author Profile:

William J. Holstein is the author of Why GM Matters: Inside the Race to Transform an American Icon (Walker, 2009). For more on his work, see www.williamjholstein.com.

2009-04-06T09:18:00.000-07:00

Study: Cutting Spending Hurts Brands Long Term
Following Boom/Bust Cycle Flirts With Danger
By Jack Neff Published: April 06, 2009

BATAVIA, Ohio (http://www.adage.com/) -- Household and personal care might once have seemed recession-resistant, but last year U.S.-based personal-care marketers actually cut ad spending faster than the general market. That could be potentially damaging for their brands, according to one study that shows that marketers that cut spending during a downturn lost share to private labels -- share they didn't regain.

Smaller, Nonpremium Brands at Risk? According to TNS Media Intelligence data analyzed by Sanford C. Bernstein last month, eight U.S.-based household and personal-care marketers covered by the company cut measured media spending an average of 8.8%, compared with a 5% cut among advertisers overall. The fourth quarter, in particular, was the culprit, according to separate research by Goldman Sachs based on TNS data, which found that U.S.-based household, personal-care and beauty marketers slashed spending 14% on average in the quarter, reversing a 3% year-on-year increase in the third quarter.

The reasons behind this surprising turn of events vary, but the implications are potentially dire. Research presented by University of North Carolina marketing professor Jan-Benedict E.M. Steenkamp in a Bernstein conference call last month indicates that companies that maintained or hiked ad spending generally, and TV spending in particular, lost limited share to private labels in recessions between 1985 and 2005.

MARKETING IN A RECESSION Ad Age explores what marketers, media and agencies are doing to survive and even thrive in the downturn.Companies and brands that went with the flow of the boom-bust cycle by cutting ad spending -- as data suggest household and personal-care players did last year -- tended to lose more share to private labels both immediately and longer term.

Companies whose ad spending didn't vary according to economic cycles -- based on an analysis of Ad Age data on global ad spending -- also tended to increase their stock prices an average of 1.3 percentage points annually ahead of others from 1986 to 2006, said Mr. Steenkamp, who analyzed global results of 26 marketers across multiple industries.

'Takes courage'"Companies and categories that are able to turn a recession into an advantage are [those] going against economic trends," Mr. Steenkamp said. "Ultimately, it takes courage. But it pays off in share and in terms of the stock market."

About half the share lost to private labels in past recessions has never been recovered, he said.
A variety of factors likely played into last year's spending retreat by package-goods marketers, and some contend the U.S. measured-media numbers don't tell the whole story.

The pullback by U.S.-based marketers in the fourth quarter was likely prompted in part by the sudden strengthening of the dollar, which drained earnings from overseas almost overnight and spurred cuts in one of the only budgets that can be cut quickly: marketing. By contrast L'Oréal, a French company for which a stronger dollar boosted U.S. earnings in the fourth quarter, hiked media spending in the quarter.

TNS data showed only a 3.6% spending decline for personal-care marketers overall last year, according to an Information Resources Inc. presentation in March, vs. the 8.8% decline for the U.S.-based group covered by Bernstein. That suggests spending by foreign multinationals lifted results pulled down by U.S. companies.

The Goldman report showed some signs of strategic spending hikes in the fourth quarter. Procter & Gamble Co. -- and, to a lesser extent, Kimberly-Clark Corp. -- upped measured spending in paper categories facing the most erosion from private labels. And P&G hiked spending on laundry detergent, particularly on Gain, a midtier value brand that can benefit from trade-down but also is more vulnerable to private labels.

2009-01-07T15:37:00.000-08:00

2009: The Year of One-to-One Marketing
By KIM T. GORDON
Posted: 2009-01-06 17:33:01

As we kick off 2009, one thing is crystal clear: We're entering an entirely new era for marketers. Let's call this the year for building relationships. Right now, prospects want to make every purchase a safe one. That means they'll rely on companies or brands they know and trust. Closing sales will require a stronger emphasis on tactics that let you relate to customers one to one. And it's never been more important to craft a set of effective letters that you can customize for individual prospects.

Writing a great letter takes a bit of time and know-how. Whether you use it to follow up a lead, close a hot prospect or introduce your products and services, a well-crafted letter will be one of your most powerful marketing tools in the new year.These six rules will help you write letters that motivate your best prospects:

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Rule 1. Set a Measurable GoalEvery good letter must be written to make something happen. Focus on that goal before you begin, and decide what your letter must contain to produce the desired result. Make reading your letter worthwhile for your prospect, and it will reward you by advancing the sales process. If you're sending letters just to provide prospects with more information, you're wasting your postage and opportunity to move prospects to the next level.

Rule 2. Have a Strong HookYour letter has to immediately grab the reader's interest or it'll be discarded as junk mail. Depending on the type of business you're in and what you're marketing, your hook can be a special offer or a lead communicating a unique benefit. When your letter follows a phone call, highlight the benefits your prospect desires in the first paragraph.

Rule 3. Convey a Unique MessageHave you ever received letters from competing companies with virtually identical offers? Chances are you tossed them because you couldn't tell one company from the other. Take a look at one of your old letters. If it could have been sent by any of your closest competitors, rethink your approach. The message, pricing and offers contained in your letter must be unique to your business and tie into your branding.

Rule 4. Keep the Reader in MindImagine you were face to face with your prospect, reading your letter aloud. Would you be comfortable, or would the tone be all wrong? Your letter is a one-to-one communication with a real person. Don't come on too strong or overpromise. Use simple, direct language, not flowery prose or impressive vocabulary. And because you won't really be face to face with your prospect, the look of your letter alone must convey your professionalism, so double-check for errors.

Rule 5. Write About "You the Customer"Great letters are directed outward. That means they stress what "you the customer" will get and not what "we the company" provide. Highlight benefits front and center, and use the body of your letter to describe the features. Then summarize the key benefit once again, and close with a call to action that gives the prospect a reason to move to the next step in your sales process.

Rule 6. Make Responding EasyNo matter what type of marketing letter you're writing, close by providing a clear and actionable next step. In some cases, the responsibility for that action--such as sending a written proposal or contract--will rest with you. When a special offer has been made, your letter should make it quick and easy for the prospect to take advantage of it via phone, e-mail and postal mail. The fewer hurdles your prospect must jump, the more likely you are to close the sale.

Kim T. Gordon is the "Marketing" coach at Entrepreneur.com and a multifaceted marketing expert, speaker, author and media spokesperson. Over the past 26 years, she's helped millions of small-business owners increase their success through her company, National Marketing Federation Inc. Her latest book, Maximum Marketing, Minimum Dollars, is now available.
2009-01-06 17:23:04

2009-01-01T10:36:00.001-08:00

Happy New Year! I Welcome 2009!

Looking Forward To A Great New Year!

Working Harder For You!

2008-10-28T12:02:00.000-07:00

Most Major Papers Continue Circ Decline

By Jennifer Saba Published:

October 27, 2008 7:55 AM ET

NEW YORK For those holding out for some improvement in print circulation, this morning brings disappointment. The Audit Bureau of Circulations released the latest figures for the six- month period ending September 2008 and the report shows major drops in circulation at the big metros.

According to ABC for the 507 newspapers reporting in this period, daily circulation slipped 4.6% to 38,165,848 copies. For the 571 papers, Sunday dropped 4.8% to 43,631,646 copies.

For comparison purposes, in September 2007 reporting period, daily circ fell 2.6% and Sunday was down 4.6%.

Across the country, publishers have put in place plans to cater to core readers and subscribers. It's too expensive to bulk up circulation in unprofitable areas such as third-party, newspapers in education, and bonus day copies.

Not in the core market defined by the newspaper? You are out of luck, at least for the print edition. All daily averages below are for Monday through Friday. The percent change compares this September period to the same period last year.

Daily circ at The New York Times fell 3.5% to 1,000,665 copies.

The Wall Street Journal (as we reported last week) was virtually flat, up about 1,800 copies on a daily basis to 2,011,999. USA Today was also up a fraction of a percent to 2,293,310 copies.

But The Washington Post's daily circulation declined 1.9% to 622,714. Sunday was down 3.1% to 866,057. At the Los Angeles Times circ decreased a little more 5% daily and on Sunday to 739,147 and 1,055,076, respectively. Daily circulation at the Chicago Tribune was down 7.7% to 516,032. Sunday declined 5.7% to 864,845 copies.

The San Francisco Chronicle lost 7% of its daily circulation to 339,430 copies while Sunday was down a hair more, 7.4% to 398,116. The San Jose Mercury News was down slightly, 1.9% to 224,199 and Sunday was down much more, 4.3% to 241,518.

On the East Coast, daily circulation at The Boston Globe plummeted 10.1% to 323,983 copies. Sunday circ was down 8.4% to 503,659. The Baltimore Sun’s daily circ declined 5.9% to 218,923 while Sunday fell 3.8% to 350,640.

Daily circulation at The Philadelphia Inquirer slipped 11.0% to 300,674 copies. Sunday plunged 13.7% to 556,426. At the Daily News in Philly, daily circ slipped 13.2% to 97,694.

Daily circ at The Arizona Republic declined 5.5% to 361,333 while Sunday 3.6% to 463,036. Its sister paper the Indianapolis Star lost 3.3% of its daily circ (244,796 copies) and 4.6% of Sunday to 321,760.

In Florida circulation fell steeply at the Miami Herald - its daily circ was down 11.8% to 210,884. Sunday was down 9% to 279,484. The Orlando Sentinel lost 3.3% of its daily circ to 206,363 and about the same on Sunday (-3.2%) to 307,976 copies.

Daily circ at the Denver Post dropped 6.5% to 210,585 and at the Rocky Mountain News it was down 6.6% to 210,281. The combined Sunday circulation for the JOA papers declined 9.1% to 545,442.

In Detroit, the Free Press lost 6.8% of its daily circ to 298,243 copies. The Detroit News’ daily circ plunged 10.0% to 178,280 copies.

Go here for the list of the top 25 daily newspapers in the country and the top 25 Sunday newspapers.

*CHECK OUT OUR TWO NEW BLOGS TODAY for political campaign news and views and business analysis:The E&P Pub Fitz&Jen

NEW YORK Here are the top 25 daily papers ranked for the six-month period ending September 2008 based on a Monday-through-Friday average, according to the new FAS-FAX from the Audit Bureau of Circulations released today. The percent change compares this period to the same period a year ago.

USA TODAY -- 2,293,310 -- 0.01%

THE WALL STREET JOURNAL -- 2,011,999 -- 0.01%

NEW YORK TIMES -- 1,000,665 -- (-3.58%)

LOS ANGELES TIMES -- 739,147 -- (-5.20%)

DAILY NEWS, NEW YORK -- 632,595 -- (-7.16%)

NEW YORK POST -- 625,421 -- (-6.25%)

THE WASHINGTON POST -- 622,714 -- (-1.94%)

CHICAGO TRIBUNE -- 516,032 -- (-7.75%)

HOUSTON CHRONICLE -- 448,271 -- (-11.66%)

NEWSDAY -- 377,517 -- (-2.58%)

THE ARIZONA REPUBLIC -- 361,333 -- (-5.51%)

SAN FRANCISCO CHRONICLE -- 339,430 -- (-7.07%)

THE DALLAS MORNING NEWS -- 338,933 -- (-9.28%)

BOSTON GLOBE -- 323,983 -- (-10.18%)

STAR TRIBUNE, MINNEAPOLIS -- 322,360 -- (-4.26%)

STAR-LEDGER, NEWARK, N.J. -- 316,280 -- (-10.40%)

CHICAGO SUN-TIMES -- 313,176 -- (-3.94%)

PLAIN DEALER, CLEVELAND -- 305,529 -- (-8.58%)

THE PHILADELPHIA INQUIRER -- 300,674 -- (-11.06%)

DETROIT FREE PRESS -- 298,243 -- (-6.84%)

THE OREGONIAN -- 283,321 -- (-8.45%)

THE ATLANTA JOURNAL-CONSTITUTION -- 274,999 -- (-13.62%)

SAN DIEGO UNION-TRIBUNE -- 269,819 -- (-3.00%)

ST. PETERSBURG (FLA.) TIMES -- 268,935 -- (-6.88%)

THE SACRAMENTO BEE -- 253,249 -- (-4.22%)

Go here for more numbers and E&P’s coverage of the FAS-FAX and here for the top 25 Sunday papers.

2008-10-16T15:32:00.000-07:00

Google Profit Tops Estimates on Ad Sales; Shares Rise

By Crayton Harrison

Oct. 16 (Bloomberg) -- Google Inc., owner of the most popular Internet search engine, said third-quarter profit climbed 26 percent as more customers used Web search ads to spur sales in a slowing economy, sending the shares higher.

Net income rose to $1.35 billion, or $4.24 a share, from $1.07 billion, or $3.38, a year earlier, the company said today in a statement. Leaving out costs such as stock-based compensation, profit was $4.92 a share, beating the $4.75 average estimate of analysts in a Bloomberg survey.

Advertisers are shifting budgets away from TV and print media toward ads that run alongside search listings, targeting online shoppers. The Internet will account for 8.7 percent of the $284 billion in U.S. ad spending this year, up from 7.2 percent in 2007, according to Barclays Capital.

This was exactly the kind of shot in the arm that investors need,'' said Jeff Lindsay, an analyst with Sanford C. Bernstein & Co. in New York. ``People lost a lot of faith in the Internet, but this is exactly what the doctor ordered.''

Excluding revenue passed on to partner sites, sales expanded to $4.04 billion, compared with the $4.05 billion average estimate. Total revenue climbed 31 percent to $5.54 billion.

Google, based in Mountain View, California, rose $21.39, or 6.1 percent, to $374.41 in extended trading after closing at $353.02 on the Nasdaq Stock Market. The shares have dropped 49 percent this year.

Being `Realistic'

We are realistic about the poor state of the global economy, but it's Google, so we'll manage accordingly,'' Chief Financial Officer Patrick Pichette said today in an interview. ``We had a good third quarter, with strong traffic and revenue growth.''

In the U.S., Google fielded 63 percent of online searches in August, double the market share of Yahoo! Inc. and Microsoft Corp. combined. That dominance has helped Google command higher prices for ads, according to Yahoo, which is awaiting government approval of an agreement to let Google sell some ads on its sites.

The economic situation is so fluid that we're all sort of in uncharted territory,'' Chief Executive Officer Eric Schmidt said on a conference call. ``We've always been in this for the long term, and we believe that's even more important today than ever.''

Resilient Business

The slumping U.S. economy had been expected to drag down results, said Clay Moran, an analyst at Stanford Group Co. in Boca Raton, Florida. ``What we're seeing is that Google is a resilient business that's going to fare relatively well in this recession, but it's not immune from the overall macroeconomic environment,'' he said.

Google, which doesn't forecast results, is seeing a slowdown in spending from some types of customers, such as U.S. auto and home financing companies, Pichette said.

Google recorded $280 million in costs for stock-based pay, up from $273 million the previous quarter. Those costs will reach $1.1 billion in 2008, leaving out stock awards granted after Oct. 1, Google said.

Sales outside the U.S. made up 51 percent of Google's revenue, up from 48 percent a year earlier. If foreign exchange rates for currency had remained constant over that period, Google's third-quarter sales this year would have been $168 million lower, the company said.
Slower Growth?

The credit crisis may cost the Internet ad market $6.7 billion in lost sales through 2010, according to Collins Stewart Plc. Big and small businesses, from General Motors Corp. to Simplexity LLC, are reducing ad spending plans, while some financial companies, such as Wachovia Corp., have disappeared.

The reductions will push down growth in U.S. Internet ad outlays to less than 20 percent next year for the first time since 2002, said Sandeep Aggarwal, a Collins Stewart analyst in San Francisco.

Google, which gets almost all its revenue from search ads, is testing ways to advertise with images and video. The company struck a deal this month to offer full-length shows from CBS Corp., splitting revenue from the ads.

Microsoft, seeking to close the gap with Google, bid as much as $47.5 billion for Yahoo this year. Sunnyvale, California-based Yahoo rejected Microsoft's offer in May, opting instead to strike the advertising partnership with Google.

To contact the reporter on this story: Crayton Harrison in Dallas at tharrison5@bloomberg.net Last Updated: October 16, 2008 17:03 EDT

2008-08-24T15:14:00.001-07:00

2008-08-11T15:04:00.000-07:00

Magazine 1st-half newsstand sales drop 6.3 percent

Monday August 11, 12:01 pm ET
By Jeremy Herron, AP Business Writer

Magazine circulation flattens, but newsstand sales slump 6.3 percent in 1st half

NEW YORK (AP) -- Newsstand sales of U.S. magazines fell 6.3 percent in the first half of 2008, an industry group said Monday, as rising gas and food costs led consumers to cut back on nonessential spending.

Most top titles, including best-selling Cosmopolitan and O, The Oprah Magazine, had sharp declines. Of the top 10 newsstand sellers, only People, the entertainment news magazine, and In Style posted gains.

"This is nothing more than really just the impact of the economy," said John Harrington, an industry analyst with Harrington Associates. "People are shopping very cautiously and less frequently, avoiding impulse buys, which are what magazine purchases are."

Publishers redouble efforts to sign up subscribers during economic slowdowns because they know newsstand sales will ebb, which they need to offset because advertising rates are based on minimum circulation targets.

Newsstand sales are far more lucrative than subscriptions, though, meaning circulation revenue is dropping at most titles.

"It is easy to manipulate subscription numbers because publishers can sell them at a loss just to meet their rate base," Harrington said. "The growth may not be high-quality subscribers that will renew."

Overall magazine circulation, which includes subscription and newsstand sales, was flat at 349.9 million copies in the period, as paid subscriptions edged higher to 290.2 million copies, the Audit Bureau of Circulations reported in its biannual tally.

Single-copy magazine sales in the six months ended June 30 fell to 44.1 million copies from 47.1 million a year ago. The survey included 467 titles that reported results in both periods.

Like newspapers, magazines have been struggling with declining advertising revenue as readers increasingly go online for news and entertainment. In the second quarter, magazines had 8.2 percent fewer ad pages, the Publishers Information Bureau reported.

Hearst Corp.'s Cosmopolitan magazine, the top-seller on the country's newsstands, had a 6 percent decline to 1.75 million copies -- nearly 114,000 fewer magazines. Top 10 sellers US Weekly, Woman's World and O, The Oprah Magazine each posted a double-digit decline in newsstand sales.

People, published by Time Inc., boosted newsstand sales by 5.2 percent and remained the No. 2 best-selling magazine at kiosks around the country. In Style was also able to increase newsstand sales.

"People has been steady over the years and there's probably more quality to the magazine in terms of what they do" compared with the crowded field of celebrity gossip titles, Harrington said.

In Touch Weekly, down 28.7 percent at the newsstand, and Life & Style Weekly, down 30.2 percent, both added 50 percent to their cover prices in the period.

Everyday With Rachel Ray, the cooking magazine featuring the popular Food Network host, had 6 percent higher newsstand sales and a 36 percent increase in total circulation.

Rolling Stone, the venerable music magazine, said Monday that it will abandon its iconic size for a smaller, more rack-friendly format starting in fall.

Publisher Jann Wenner said the change is not to conserve costs, but partly to offer advertisers and sellers a more uniform size. Wenner Media said the new size will allow for more editorial pages and higher quality paper that will result in sharper photos.

The magazine had 6.6 percent lower newsstand sales of 115,644 issues in the latest period.

2008-06-29T18:11:00.000-07:00

TV viewers' average age hits 50
Study: Median age outside the 18-49 demo
By MICHAEL SCHNEIDER

Find The Story Here: http://www.variety.com/article/VR1117988273.html?categoryid=14&cs=1

The broadcast networks have grown older than ever -- if they were a person, they wouldn't even be a part of TV's target demo anymore.

According to a study released by Magna Global's Steve Sternberg, the five broadcast nets' average live median age (in other words, not including delayed DVR viewing) was 50 last season. That's the oldest ever since Sternberg started analyzing median age more than a decade ago -- and the first time the nets' median age was outside of the vaunted 18-49 demo.

Fueling the graying of the networks: the rapid aging of ABC, NBC and Fox. The three nets continue to grow older, while CBS -- the oldest-skewing network -- has remained fairly steady.
"The median ages of the broadcast networks keep rising, as traditional television is no longer necessarily the first screen for the younger set," Sternberg wrote.

For the just-completed 2007-08 TV season, CBS was oldest in live viewing with a median age of 54. ABC clocked in at 50, followed by NBC (49), Fox (44), CW (34) and Univision (34).
When live-plus-7 DVR viewing is factored in, the nets (except CW and Univision) drop by a year -- which still reps the oldest median age ever for the nets.

Sternberg notes that Fox and CW maintain median ages that are closer to the actual age of the population. The median age for U.S. households is 38.

Among ad-supported cable nets, the news nets (along with older-skewing Hallmark Channel, Golf Channel and GSN's daytime sked) sport the most gray, with Fox News Channel's daytime and primetime skeds the absolute oldest, clocking in with a median age above 65. Youngest nets are the daytime skeds for Noggin and Nickelodeon, with a median age under 10.

At ABC, youngest series was "Supernanny" (with a median age of 41), while oldest was "Women's Murder Club" (57). At CBS, youngest was "How I Met Your Mother," "Kid Nation" and the Tuesday edition of "Big Brother," tied at 45; oldest was "60 Minutes" (60). NBC's youngest show was "Scrubs" (34), and oldest was "Monk" (58).

At Fox, the youngest shows were "American Dad" and "Family Guy" (29), while the oldest was "Canterbury's Law" (55). At CW, "One Tree Hill" was youngest (26), while "Life Is Wild" was oldest (45).

Among latenight gabbers, "Tonight Show With Jay Leno" is oldest, with a median age of 54, followed by "Late Show With David Letterman" at 53. Interestingly, "Nightline" -- which should conceivably be older than those talkers, is younger, at 52. ABC's "Jimmy Kimmel Live," meanwhile, passed the 18-49 threshold for the first time, clocking in with a median of 50. "Late Night With Conan O'Brien" is getting closer at 46.

2008-06-23T18:55:00.000-07:00

Papers Facing Worst Year for Ad Revenue

Monday June 23, 11:35 pm ET By RICHARD PÉREZ-PEÑA

NY TIMES

For newspapers, the news has swiftly gone from bad to worse. This year is taking shape as their worst on record, with a double-digit drop in advertising revenue, raising serious questions about the survival of some papers and the solvency of their parent companies.

Ad revenue, the primary source of newspaper income, began sliding two years ago, and as hiring freezes turned to buyouts and then to layoffs, the decline has only accelerated.

On top of long-term changes in the industry, the weak economy is also hurting ad sales, especially in Florida and California, where the severe contraction of the housing markets has cut deeply into real estate ads. Executives at the Hearst Corporation say that one of their biggest papers, The San Francisco Chronicle, is losing $1 million a week.

Over all, ad revenue fell almost 8 percent last year. This year, it is running about 12 percent below that dismal performance, and company reports issued last week suggested a 14 percent to 15 percent decline in May.

“Never in my most bearish dreams six months ago did I think we’d be talking about negative 15 percent numbers against weak comps,” said Peter S. Appert, an analyst at Goldman Sachs. “I think the probability is very high that there will be a number of examples of individual newspapers and newspaper companies that fall into a loss position. And I think it’s inevitable that there will be closures in this industry, and maybe bankruptcies.”

Analysts and newspaper executives find themselves revising their forecasts downward every few months, unable to gain a stable footing on a sinking floor. Papers have cut costs by shedding thousands of workers, eliminating some distribution routes and printing fewer, smaller pages, but profit margins continue to shrink.

Since the fall, when Media General, the owner of a major newspaper chain in the South, set its 2008 budget, “We have pulled our thinking down twice with respect to revenue,” said Marshall N. Morton, the chief executive.

Over the next few years, he predicted, “There’s got to be some assimilation,” with some major American newspapers going out of business or merging. At the corporate level, he said, “I would guess that rather than bankruptcies, you’d see combinations.”

Analysts have issued warnings about several companies’ abilities to meet their debt obligations, though the companies insist that they are at no risk of default.

Most of those companies are privately held, like the Tribune Company, owner of The Chicago Tribune, The Los Angeles Times and many other papers; MediaNews Group, whose papers include The Denver Post and The San Jose Mercury News; and Philadelphia Media Holdings, which publishes The Inquirer and The Daily News in that city.

Some analysts also see a lesser risk in a major publicly traded chain, the McClatchy Company, owner of The Miami Herald, The Kansas City Star, The Sacramento Bee and others, which said last week that its ad revenue was down 15.4 percent through the first five months of the year.
The company announced plans to eliminate about 1,400 jobs, leaving it with 21 percent fewer employees than it had a year and a half ago. Some other newspaper chains had already made comparable cuts.

“It’s going a lot worse than anybody predicted, and if we have double-digit ad declines for two years, some newspapers will be in real financial jeopardy,” said Edward Atorino, an analyst at the Benchmark Company. Even with less severe losses, “You’re going to see structural changes: papers could drop a day or two per week, they could outsource printing.”

He said that he expected the decline in ad sales to slow, with 2008 producing a 10 percent drop for the year, but he cautioned that, like other analysts, he had not been pessimistic enough so far.

The primary long-term threat to newspapers is the Internet’s siphoning away of ad revenue, a trend that has been under way for more than a decade, but one that has picked up speed in the last year. Advertisers have vastly more choices online than on paper, so newspaper Web sites win only a fraction of the advertising that goes digital, and it pays much less than advertising in print.

At the same time, the Internet has drawn millions of new readers to papers, and the major ones reach far more readers than ever before.

“As long as we’ve got content, we’ve got something nobody else has,” said Mr. Morton, of Media General. The industry’s challenge, he said, is to keep expanding that audience, “proving to the advertiser that we, in fact, are the right link so that he can have his conversation with the customer through us.”

Online ad revenue for newspapers grew 20 percent to 30 percent annually for most of this decade. Most analysts think the industry will return to that growth rate when the economy picks up again, but for now, it is closer to 15 percent. The Internet still accounts for less than 10 percent of newspaper ad revenue.

Declining sales of printed papers and rising newsprint prices have also hurt the business.
The industry will not bottom out for another three or four years, analysts predict. The question, Mr. Appert of Goldman Sachs said, “is how far things will fall before then.”

2008-06-09T17:43:00.000-07:00

I am so proud... My son has hit two homeruns with his major league little league team. The first was about 205 ft and the second was 211 ft. Great Job Elliot!

2008-04-15T14:21:00.000-07:00

REPORT: NO PAGE TURNER
BIG MAGAZINE TITLES SEE AD PAGES DWINDLE DOWN IN Q1
By KEITH J. KELLY

http://www.nypost.com/
April 15, 2008 --
Magazines that cover news, business and luxury goods were sent reeling in the first quarter of the year, while food magazines offered a few rays of light for the publishing industry, according to just released figures.

Ad pages for BusinessWeek, which just went through its third round of cuts in three years, tumbled 19.4 percent in the quarter to 429.5 ad pages while rival Forbes dipped 13.2 percent to 504.8 ad pages, according to the latest figures reported to the Publishers Information Bureau.

MORE COVERAGE
MEDIA INK: O's Success at Hearst
Fortune looked like the best of the lot, with only a 1 percent drop in the quarter to 429.4.
The newsweeklies are also taking it hard. Newsweek, which recently unveiled plans to downsize 111 people, saw ad pages drop 13.9 percent to 339.

Ad pages for Time, which also continues to prune staffers, skidded 17.8 percent to 371.
U.S News & World Report dropped even further, with its ad pages tumbling 37.5 percent to 229.46 pages.

Most industry observers tend to discount the ad-revenue figures that were just released because it uses a formula based on a one-time ad-page rate that does not account for the steep discounts that all major advertisers receive from publishers.

That is why the ad-page tally is seen as a more accurate barometer of a magazine's performance year to year.

Overall, in the quarter, the PIB said that rate card reported advertising for the period was $5.2 billion, a 1.2 percent decline from the $5.3 billion in the year ago quarter.

The ad-page tally showed a steep 6.4 percent decline.

Ellen Oppenheim, executive vice president and chief marketing officer of The Magazine Publishers of America said, "food & food products," were the bright spots.

Every Day with Rachel Ray saw ad pages soar 38.1 percent to 135.6 ad pages.
Everyday Food from the Martha Stewart empire saw ad pages up 11 percent to 120.76. Martha Stewart Living, the company's flagship tile, was up 2.6 percent in ad pages.

2008-03-28T14:55:00.000-07:00

NAA Reveals Biggest Ad Revenue Plunge in More Than 50 Years By Jennifer Saba Published: March 28, 2008 12:55 PM ET NEW YORK

The newspaper industry has experienced the worst drop in advertising revenue in more than 50 years. According to new data released by the Newspaper Association of America, total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006

-- the most severe percent decline since the association started measuring advertising expenditures in 1950. The drop-off points to an economic slowdown on top of the secular challenges faced by the industry. The second worst decline in advertising revenue occurred in 2001 when it fell 9.0%.

Total advertising revenue in 2007 -- including online revenue -- decreased 7.9% to $45.3 billion compared to the prior year.

There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion. As newspaper Web sites generate more advertising revenue, the growth rate naturally slows.

The NAA reported that online revenue now represents 7.5% of total newspaper ad revenue in 2007 compared to 5.7% in 2006. That growth could not stave off the losses in the print however. National print advertising revenue dropped 6.7% to $7 billion last year. Retail slipped 5% to $21 billion. Classified plunged 16.5% to $14.1 billion.

"Even with the near-term challenges posed to print media by a more fragmented information environment and the economic headwinds facing all advertising media, newspapers publishers are continuing to drive strong revenue growth from their increasingly robust Web platforms," John Sturm, president and CEO of the NAA, said in a statement.

* E&P Editor Greg Mitchell's new book is "So Wrong for So Long: How the Press, the Pundits -- and the President -- Failed on Iraq" (Union Square Press). It includes a foreword by famed war reporter Joe Galloway and a preface by Bruce Springsteen and has been hailed by vets leader Paul Rieckhoff.

Jennifer Saba (jsaba@editorandpublisher.com) is E&P's associate editor.

2008-02-25T17:59:00.000-08:00

Study to Track All-Day Media Usage

What better way to track people's video consumption than to have someone follow them around all day?

Steve McClellan, AdweekFEBRUARY 25, 2008 -

What better way to track people's video consumption than to have someone follow them around all day -- literally from the time they wake up until they retire at night -- making detailed notes about when and how they watch, listen, surf, read, play video games, download, text and talk on the phone?

That's exactly how a new $3.5 million study--funded by the Nielsen Co.--will track the media usage habits of a panel of some 450 consumers in separate phases throughout this year beginning next month.

Ball State University--a pioneer in this type of shadow-the-consumer research--and Sequent Partners on behalf of the Committee for Research Excellence (CRE) are conducting the study. CRE, comprised of agency, media company and client executives, was formed in 2005 to develop studies that provide insights into consumer viewing habits and to help Nielsen sharpen the methodologies it uses to measure audiences across a growing array of media.

Results of the study will be released in stages beginning later this year. "We think this will be a landmark study with groundbreaking results," said Shari Anne Brill, svp, director of programming at Carat and chairwoman of CRE's media consumption and engagement committee. "It will give us a blueprint of consumers' access to media content across all screens, platforms and locations throughout their waking day.

"In addition to funding the study, Nielsen Media Research (like Adweek, a unit of the Nielsen Co.) will help recruit the consumer panels, which will be comprised of former participants in Nielsen's national TV ratings panel.

A panel of 350 consumers across five markets--Philadelphia, Seattle, Dallas, Atlanta and Chicago--will be monitored for a full day in the spring and fall of this year by trackers who will record (via electronic handheld note-taking devices) the use of 17 different media as the people use them alone and in multiple combinations. A separate panel of 100 users will also be tracked in the spring and fall. Before the second phase, that panel will have the option to purchase Slingboxes, DVRs and other state-of-the-art media units at discounted rates. The idea is to use the second panel as a predictor of how new media devices will affect future viewing patterns.

Ball State and Sequent won the contract to conduct the survey after a review that included two other undisclosed finalists. The researchers conducted a pre-test last year to prove to the CRE that a panel would cooperate and provide usable data that could be projected nationally, said Mike Bloxham, director of insight and research at Ball State's Center for Media Design. "The findings will provide an important platform for analysis and debate as the committee pursues its mission to inform future best practices in cross-platform video measurement," he said.

Links referenced within this article

Find this article at: http://www.mediaweek.com/mw/news/media_agencies/article_display.jsp?vnu_content_id=1003714901

2008-02-14T19:19:00.000-08:00

Advertising During a Recession

By Jake Swearingen

Article from: http://blogs.bnet.com

January 31st, 2008 @ 3:33 pm

What should marketers in a flat lining economy do? It’s clear that consumers are going to be watching their wallets a bit closer, and advertisers will have to try harder to pry pocketbooks back open in order to justify their budgets.

On Monday, the Times ran a story on how marketers are quickly moving to capitalize on consumer worry. Wal-Mart went back to focusing on Every Day Low Prices with the slogan, “Save money. Live better,” and became one of the few retailers to post growth in the holiday season. Nissan has taken to hyping the Altima’s miles per gallon over style or performance. But Avi Dan at Ad Age points out in his tips to CMOs that focusing on price for a campaign can have short-term benefits and long-term drawbacks. “Reliance on price incentives as a marketing tool is dangerous — it devalues the brand, and it’s hard to wean consumers off it.”

CEO Drew Reisser of marketing consulting group Renegade offers sound advice to MediaPost on what marketers can do during a recession:

Focus on advertising with clear and proven return on investment, such as Internet and promotional advertising.
Be prepared to cut budget bloaters like trade shows, which have a harder time proving ROI.
Focus on a brand’s core base, instead of going after more expensive new customers
If a brand has made its bones on humor, don’t be quick to change that. “Acknowledging bad times might feel right, particularly if a recession is protracted, but consumers may not want to be reminded of that fact. And a little entertainment can go a long way, Neisser says. ‘If humor was right for your brand in good times, it’s even more right for your brand in bad,’ he says.”

Online advertising could be one bright spot, with a bevy of news sources declaring that Google, and by extension Internet advertising, seems to resilient to economic downturns. The Times UK expects online advertising growth to perhaps slow down, but not even begin to touch the depths of the 2000 crash, while Wired News declares Google may be recession proof, comparing their AdWords program to direct mail:

“We looked at all the past recessions from 1950 on and we found that direct mail — Google’s most direct predecessor — actually grew during six recessions,” Cowen and Company’s Friedland says. “Given the current environment, there’s no reason to think Google will outperform. But there’s no reason to think it will underperform.”

Thinking that Internet advertising will be the industry’s savior is a bit rosy, however. While Internet ad spending is growing incredibly rapidly, it’s forecasted to slow to 30 percent in 2008, and it still makes up less than 10 percent of total ad spending.

(Image of the killer deal at Gray’s Papaya from flickr user aturkus, CC 2.0)

2007-11-21T18:01:00.000-08:00

Keeping Marketing’s Promises
by James H. Gilmore and B. Joseph Pine II

11/13/07
Ads that trumpet, “We’re unique!” are meaningless if the stores say, “No, we’re not.”

Reprinted by permission of Harvard Business School Press. Excerpted from Authenticity: What Consumers Really Want, by James H. Gilmore and B. Joseph Pine II. Copyright © 2007 James H. Gilmore and B. Joseph Pine II; All Rights Reserved. http://www.strategy-business.com

Why did the American Advertising Federation launch the campaign “Advertising. The way great brands get to be great brands.” in 2001? Because advertising no longer works as well as it once did. Companies in consumer and business markets now pay more and more to reach fewer and fewer households and executive decision makers.

Advertisements appear everywhere — we see ads online, on movie screens, on sports uniforms, on the sides of vehicles, on mobile phones, ads nauseam. London-based agency Cunning at one point even paid people, primarily college students, to wear its clients’ temporary-tattoo ads and logos on their foreheads. In an initiative dubbed “Fake Tourist,” Sony Ericsson employed actors, called “leaners,” to promote its picture-taking cell phones by frequenting tourist traps (e.g., the Empire State Building in New York, the Space Needle in Seattle) and asking tourists to take their pictures. The company also hired models to demonstrate video caller ID and interactive games at nightclubs. For its clients, DVC Experiential Marketing paid “commuters” to read new magazines aboard rush-hour trains; it also paid doormen to display “packages” from catalog merchants in their lobbies, as if tenants had not picked them up yet. Rob Walker, the Consumed columnist for the New York Times Magazine, noted that agencies “have concluded that the most powerful forum for consumer seduction is not TV ads or billboards but rather the conversations we have in our everyday lives.”

The authors of Buzz: Harness the Power of Influence and Create Demand distinguish between spontaneously generated buzz and buzz marketing, which “is the scripted use of action to generate buzz. It is deliberate. One of the factors that sets buzz marketing apart from other forms of marketing is the illusion, the invisibility of the marketer. Authenticity is the key driver!” A key driver, yes, but one that so often pushes consumers away; such activity creates the perception of phoniness because it is not what it says it is.

Consider clothing retailer Gap Inc. Its advertisements over the past decade, featuring line dancers and celebrities, have had several effects. First, they put off many current customers who saw images portraying Gap as different from how these individuals saw themselves. Gap no longer conformed to (and thereby confirmed) their own self-images. With each successive ad, the Wall Street Journal observed, such consumers grew “tired of [the] trendiness.” Second, in-store displays merely paid lip service to the advertisements — actual interactions with sales personnel fell far short of the energy and enthusiasm displayed in the ads. Third, Old Navy stores — also owned by Gap Inc. — carried essentially the same merchandise at a lower price, and without the overtrendiness. As a former Gap executive told the New York Times, “Being cool went to [Gap management’s] heads, and they lost their focus. They began putting Old Navys in malls right next to Gaps and undermining their own sales.” Finally, all Gap stores — thousands of them — look exactly alike. The process by which Gap grew revenues — adding more outlets while increasing advertising — became the process of killing the brand, as the perception of sameness permeated the marketplace. Gap’s advertising says “Unique,” but the in-store experience falls far short of what it says it is.

That is the fundamental problem with advertising: It’s a phoniness-generating machine. Think of the appeal of any hamburger in any advertisement versus the reality encountered in the actual establishment. Or think of any airline, hotel, or even hospital; if you could only check into the ads, you’d have a great experience. When you check into the actual place, however, it so often falls short of what the ads represented. When it comes to the Is What It Says It Is standard of authenticity, the easiest way to be perceived as phony is to advertise things you are not. This practice, endemic to the industry, may have worked when advertising could promote the availability of a new offering (even if not as new nor as improved as the ads said), when it could promulgate a cost advantage (even when it was short-lived or came with a catch), or when it could detail a distinction in quality (even though no one might be able to tell the difference). Today, however, wide availability, low costs, and high quality are merely “jacks to open” when what consumers want above all is authenticity.

What companies need, therefore, is a new approach to demand creation that actually enables — make that forces — a company to be what it says it is. To borrow the phrase architect Jon Jerde made famous, that discipline is placemaking. Places are what provide the primary means for companies to demonstrate exactly what they are for both current and potential customers. Companies that embrace placemaking understand a fundamental dictum for contending with authenticity: The experience is the marketing. In other words, the best way to generate demand for any offering — whether a commodity, good, service, other experience, or even a transformation — is for potential (and current) customers to experience that offering in a place so engaging that they can’t help but pay attention, and then pay up as a result by buying that offering. Stop saying what your offerings are through advertising, and start creating places — permanent or temporary, physical or virtual, fee-based or free — where people can experience what those offerings, as well as your enterprise, actually are.

Author Profiles:

James H. Gilmore (jimgilmore@aol.com) and B. Joseph Pine II (bjp2@aol.com) are cofounders of Strategic Horizons LLP.

2007-11-05T19:28:00.000-08:00

Poll finds nearly 80 percent of

U.S.

adults go online

NEW YORK (Reuters) http://www.reuters.com/news/technology/internet - Do you find yourself going online more and more? You're not alone.

Four out of five U.S. adults go online now, according to a new Harris Poll.

The survey, which polled 2,062 adults in July and October, found that 79 percent of adults -- about 178 million -- go online, spending an average 11 hours a week on the Internet.

"We're up to almost 80 of adults who now are online, or are somehow gaining access to the Internet. That's a pretty impressive figure," said Regina Corso, director of the Harris Poll.

The results reflect a steady rise since 2000, when 57 percent of adults polled said they went online. In 2006, the number was 77 percent.

When Harris Interactive, a market research firm, first began tracking online use among adults in 1995, the group found that only nine percent of the population -- or 17.5 million -- said they went online.

The poll also found that adults are spending more time online at home and at work, up two percent each at 72 percent and 37 percent respectively, from 2006. More dramatically, 31 percent of those surveyed said they went online elsewhere, up from 22 percent in 2006.

"They are finding however possible to get online...A third of the people who are online, that's how they're getting there - some alternate way," said Corso.

Demographically, the poll showed the online population aligning more with the general population.

For example, the poll showed that 25 percent of adults who went online were between 18 and 29 years old -- the same age group makes up 22 percent of the U.S. adult population.

Hispanics make up 13 percent of the adult population, and also made up 13 percent of the online population surveyed.

The poll also found that while online access is still dominated by younger adults, nine percent of those that go online are 65 years old and older, compared to the 16 percent of adults who are 65 and over.

"We're getting closer. Every year it's getting more and more like the general population picture," said Corso.

"Baby boomers are online. As they become more and more part of that population, we're going to see larger swings there."

As the online population gets closer to 100 percent, Corso said the next step was to see how people are getting online.

"It's not just a laptop or a desktop anymore. How many of these people are using some kind of hand held device for all of their online activity?"

(Reporting by Solarina Ho)

2007-09-20T09:18:00.000-07:00

NBC to Offer a Free Video Download Service (TV meets the Internet!)

By BILL CARTER

NBC Universal, acknowledging that viewers are increasingly moving away from traditional television viewing, announced plans today for a service that will make popular NBC programs available to download free to personal computers and other devices.

The programs, including “Heroes” and “The Tonight Show With Jay Leno,” will be offered for a week immediately after their initial broadcasts. Commercials will be embedded in the programs and viewers will not be able to skip through them.

The move comes less than three weeks after NBC Universal announced it was severing ties with Apple Inc. after a dispute over how Apple was selling NBC programs on its popular iTunes service.

NBC first contracted with Amazon to offer its programs for sale to downloading devices like MP3 players. Now it is establishing its own downloading service, which NBC executives say they expect to become a viable competitor to iTunes.

“With the creation of this new service, we are acknowledging that now, more than ever, viewers want to be in control of how, when and where they consume their favorite entertainment,” said Vivi Zigler, the executive vice president of NBC Digital Entertainment. “Not only does this feature give them more control, but it also gives them a higher quality video experience.”

The NBC service, called NBC Direct, will begin a testing period in October with plans to be operational in November. The service will allow customers to download full episodes of NBC shows for seven days on Windows-based PCs. The file will expire after the seven days.

But NBC intends to transform the service into a model similar to iTunes by the middle of 2008 — that is, consumers will pay NBC directly to download episodes of the shows. “We did this to eliminate the middleman,” said Jeff Gaspin, the president of NBC’s digital division.

2007-08-10T17:48:00.000-07:00

Internet Advertising Will Soon Top Newspapers, Study Finds

Overall, communications spending increased 6.8% in 2006 to a record $885.2 billion, outpacing GDP growth for the fourth time in five years, the report says.

By Thomas Claburn
InformationWeek
August 8, 2007 04:00 PM

Consumers are spending less time with media and businesses are spending more, according to a report released by private equity firm Veronis Suhler Stevenson (VSS). If current trends continue, Internet advertising will eclipse newspapers as the largest advertising medium by 2011.

Overall, communications spending increased 6.8% in 2006 to a record $885.2 billion, outpacing GDP growth for the fourth time in five years, the report says. VSS projects that the communications industry will grow 6.4% this year and will continue to do so at a compound annual growth rate of 6.7% through 2011. This would make communications the third fastest growing sector of the U.S. economy.

But when communications-related spending finally tops $1 trillion in 2008, it will be alternative media and institutional sectors driving growth. VSS divides the communications industry into four major end-user groups -- advertising, marketing, consumer, and institutional -- that spend money in 19 separate media segments.

"We are in the midst of a major shift in the media landscape that is being fueled by changes in technology, end-user behaviors, and the response by brand marketers and communications companies," said James Rutherfurd, EVP and Managing Director at VSS, in a statement. "We expect these shifts to continue over the next five years, as time and place shifting accelerate while consumers and businesses utilize more digital media alternatives, strengthening the new media pull model at the expense of the traditional media push model."

The good news, at least for those concerned about the health of the communications industry, is that spending is rising. The bad news is that less and less of that money is likely to go to traditional media providers as consumer attention shifts online.

Consumers are spending less time (-6.3% from 2001 through 2006) with ad-supported media and more time with consumer-supported platforms like cable TV and videogames (+19.8% from 2001 through 2006). And for the first time since 1997, consumers spent less time (-0.5%) with media overall in 2006 than the year before.

Media usage by institutional users, meanwhile, grew at a compound annual growth rate of 3.3% from 2001 through 2006, reflecting the increased use of online platforms to boost performance and workflow.

VSS attributes the drop in consumer media usage to the fact that online news and entertainment typically are engaging consumers for shorter periods of time than traditional media like broadcast or cable TV. "For example, consumers typically watch broadcast or cable television at least 30 minutes per session while they spend as little as five to seven minutes viewing consumer-generated video clips online," VSS explained.

The fastest-growing media segments in the next five years will be Internet and mobile services, branded entertainment, out-of-home media, outsourced custom publishing, and public relations, according to VSS.