Wednesday, April 9, 2008

Newspapers as transformers

The age of convergence is forcing newspapers to transform themselves into TV and radio stations. One great example is of Star Tribune that just announced that it is installing a “stand-up” studio and editing suites, and plans to launch newspaper TV station.

“We are starting with information shows around content that we already own to a large degree: sports, local entertainment, lifestyle and news/public affairs (politics),” says Editor Nancy Barnes in a memo to staff.

“We plan to add a daily newscast, available on demand, and may expand into weather.”

The age of convergence is putting everything on its head. I love it.

Tuesday, April 8, 2008

Borrell Associates predict 45% growth in online revenue for TV

I just finished reading Borrell Associates study conducted for Local TV websites. Borrell, a trusted source for the industry, said that local TV stations will grow by 45% to $1.1 billion in online advertising.

Borrell said local TV operators generated $772 million in internet sales 2007, for a growth rate of 72 percent over 2006. Borrell is forecasting total local ad growth of $13.01 billion by 2012, with $9.89 billion this year, compared to $7.63 billion in 2007 - a 29.6 percent increase.

The worst is yet to come for CBS

I just declined an offer from CBS because of its stability. Now, judging from the announcement below, it was a right decision.

CBS has cut dozen of employees from its owned and operated stations, like: WBZ, WBBM, and KPIX. In light of talks with CNN, the cuts are just the beginning. CBS will likely cut at least third of its reporting staff.

TVNewser is reporting layoffs and restructuring at CBS News: “Insiders say the cuts amount to ‘just over 1%’ of the CBS News staff. CBS Corp. reported a 14.6% decline in fourth-quarter earnings. The share price is down 19% so far this year.”

Associated Press and Reuters Beware

Today, TIM ARANGO of New York Times reported that CBS, the home of Edward R. Murrow and Walter Cronkite has been considering partnering with Time Warner on a deal to outsource some of its news-gathering operations to CNN.

This announcement shows that CNN is making a strategic move toward B2B relationships. Less than a year ago, The CNN ended a 27-year relationship with Reuters, to cut costs and invest in its own news gathering operations.

"This is all about us, not Reuters. This is about content ownership," CNN spokesman Nigel Pritchard said. "Everything is changing and content ownership is king."

For CNN, a deal with a broadcast network would mean a new revenue stream without having to add much in costs. For CBS, an arrangement with a cable channel would allow it to cut costs while maintaining the CBS News brand.

If a deal is reached between CNN and CBS it would mark a strategic shift for both companies, and a change in media landscape.

For CNN that deal will be the beginning of repositioning its CNN NewsSource to serve the network.

With the current announcement, it seems like CNN is on its way to compete with wire services, like AP and Reuters for the network business.

Saturday, April 5, 2008

“Willy why do you rob banks? That is where the money is.”

ComScore Session
Online is the new primetime:

Multimedia planning is where the big providers are going.

There are powerful new tools for online media planning and analysis

· Growth rate of online advertising is 25% in comparison to traditional media that is growing at 2%. Brand building vs. direct response issue.

Stats on Internet:

Massive, growing media

185 million in US

- Search is slowing down, 99% of population search over 20 searches

- 75% of online population stream a video on average 70 times per rmonth

- UGS, YouTube is catching up in MySpace

- Internet reaches across day parts. TV has an advantage over primetime numbers. Online have daytime audiences.

- Internet is the third most used medium, and it is becoming second only to TV.
Although, younger demographics use Internet slightly less than they do TV

- Ads online have been growing with broadband

- Newspaper industry had experienced slow growth in classifieds

- Online is only 7% of total ad spending

- Broadcast TV 45,749 (000), Internet is 21,000,000

- Online advertising is probably going to get a boost in the tightening economy.

- 1/3 of online advertising is branding, the rest is direct response

- Search, classified is direct response

- Is there enough inventory online to meet the demand for online advertising

- Impressions per person are much higher for online

- If we can get the proof that online advertising does what it is supposed to do, then CPM would impove.

- Moving dollars online, online is moving to be more important than 30 sec spot.

- GM is shifting half of its budget to online

- Big advertisers are paying lots of attention to online

- Cookie deletion problem, to what degree cookies are deleted that rely on cookies.

- 30% of online users delete Cookies per month.

- The people who are deleting their cookies (4 times a month)

- That blows the UV counts out of the water

- The overstatement is true for ad serving cookies

- Ex. Tried in Australia to count the total people online, without counting for cookies the number came up with number of online users higher by 50% than the population.

- Decline in ad click-through rates, non reach media .2%

- Tacoda and ComScore did a study on display ads, 1/3 were clicking on display ads.

- 6% of Internet population clicks on ads ( lower income demographics.)

- Click throughs does not measure sales impact

- Number of ads seen by advertiser, by site. ( ComScore Ad Metrix)

- 16%, ROI, ¾ are latent (off-line)

- Half of the Internet visited food websites by search

- Price was a lot less important in brand switching for searchers

- 16% in brand recall if it in top organic search

- Kellogg ( has problems with organic search)

- Impact of online ads for in-store sales

Dying is Easy, Digital is Hard

For the past week, I attended the three-day ARF Research Conference, which focuses on digital media.

The first session focused on finding the clear direction in a time of digital confusion. Alan Wurtzel, President of Research & Media Development, NBC Universal. Alan started with the tape that highlighted the importance of research to NBC. Alan started off with predictions from the past years, which included one from Josh Bernoff 1989 that predicted the end of network TV.

The next topic of discussion was how in the current times the pace of innovation changed.

“It took PC 17 years to overtake America; It took DVR 5 years,” said Wurtzel of NBC

“Dying is easy, the digital is hard,” Alan says. He followed by saying that the confusion can only be resolved with research, and measuring digital. NBC has been making substantial investments, focusing on three primary issues:

What is the future of the industry?

The old models do not work any more. Some predict that traditional media is ending. Alan said that as opposed to many who believe the end of traditional media, he believed media is entering the golden age.

An example, TV time has grown to 8.25h in comparison to last year.

How do new media technologies affect traditional media and consumer behaviors?

Impact of DVR: DVR turned out to be the friend of traditional media. DVR added almost 1/3 to the ratings of the program. Before the advent of the DVR, NBC would have lost the DVR users who would choose to watch their number one choice.

Fast forwarding commercials: Death of the 30-second spot, to test that NBC conducted a study. They found out that 42% ads were recalled when the users fast-forwarded through the DVR tape. As the speed of fast forward increases, the mind still absorbs advertising. Through the research, NBC shared several actionable rules.

Cannibalization: NBC’s research says that they are not worried about cannibalization. Some use Internet as the DVR, others use Internet to watch shows for second or third time, and the last groups samples shows.

How do we advertise and market at 360-degree cross-platform media?

Alan shared a case study for “Fantastic Four,” campaign. They used Heroes to advertise the FOX film, “Fantastic Four.”

· Eleven percent of people who saw Heroes promotion went to see the movie in the opening day. In August, NBC is launching a research lab, which will cost them over 1B dollars to measure how Olympics are consumed across the media. The Olympics will enable NBC to measure reach, frequency, and return of investments.


In summary, the takeaways are:

· Job security for researches

· Dying is easy, digital is hard

o Technology and consumers are a constantly moving target, with some of them being” lots of smoke.”

o Half of what we are thinking in digital will be wrong

- If we cannot measure it, we can’t sell it

- There is no “low hanging research fruit in research.

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