Thursday, June 23, 2005


As Ad Spend Grows 'Tepid,' Agencies Grow Neutral, Less Dependent On Traditional Media
by Joe Mandese

DESCRIBING TRADITIONAL MEDIA AS BEING "under siege," a top Wall Street firm issued a report Wednesday suggesting that major ad agencies have finally reached the point of "neutrality" - meaning they are no longer depending on traditional media like television for their profits and cash flow. The big change, wrote Merrill Lynch analyst Lauren Rich Fine, has been the shift from media commissions to fee-based compensation by major marketers, as well as the rapid acceleration of new media and marketing services. "There is no question that marketing services businesses are growing more rapidly as large marketers are questioning the return on traditional advertising," said Fine, noting agencies now "participate equally in both sectors and [are] relatively indifferent to how a client chooses to spend."
Fine hinted there still is tremendous upside for Madison Avenue among digital media, especially the online search marketplace, as most agencies "are not fully participating in the migration to online search but they do have decent representation in other Internet based activities."

Last week, Carat CEO David Verklin revealed a major push by the media agency into search, citing recent acquisitions such as iProspect, and a fundamental shift in the media planning structure of the Aegis Group unit. Verklin said Carat soon plans to make search a component of every media plan developed by the agency for its clients.

Meanwhile, Merrill Lynch's Fine makes a compelling case for traditional media indeed being under siege, and portrays a frenzy on Madison Avenue as agencies strive to develop branded entertainment, sponsored video-on-demand and other new, non-linear media opportunities.

"Local television is feeling intense pressure from local cable as local interconnects is making that medium easier to buy. Newspapers are visibly losing share to other mediums as circulation volume continues to decline at an accelerated pace. The radio industry has self-inflicted wounds that appear to be healing, but now faces threats from satellite radio and the rapid penetration of iPods," she cautioned, nonetheless offering a "positive note," pointing at that local cable, cable networks and the Internet are also "on the rise."

"Internet-based advertising, branded and search represented an estimated 3.6% of U.S. advertising in 2004 or $9.6 billion and is forecasted to exceed 7% of the total by 2009."

Despite that contribution, Fine once again revised Merrill Lynch's ad outlook downward, describing the U.S. ad cycle as "relatively tepid."

Merrill Lynch now expects U.S. ad spending to rise only 4.5 percent in 2005, down from a previous forecast of 4.9 percent. The biggest corrections were due to print media, with magazine ad growth dropping to 4.0 percent from 5.0 percent, and newspaper spending declining to 3.3 percent from 4.0 percent. The picture also darkened slightly for broadcast TV, the only medium projected to decline in 2005. Instead of losing 1.4 percent, Merrill Lynch now expects broadcast TV ad spending to fall by 1.5 percent this year.

Editor, MediaPost

Tuesday, June 14, 2005

PR Vs. Advertising: This Time, It's Personal

PR Vs. Advertising: This Time, It's Personal
by Joe Mandese, Tuesday, Jun 14, 2005 7:30 AM EST
THE PUBLIC RELATIONS INDUSTRY, NOT advertising agencies, appears to be taking the lead on the burgeoning marketplace of so-called "personalized media." Ketchum, the giant public relations division of Omnicom, late Monday unveiled Ketchum Personalized Media, a new unit focused on "how, why and when" to integrate personalized media strategies into marketing communications plans. Ketchum is not the first PR firm to do so - Cooper Katz recently launched what it's calling a "Micro Persuasion" practice - but it is by far the largest so far.
Unlike traditional mass media communications, the micro media marketplace focuses on new forms of personalized, or consumer generated media such as blogs (Web logs), podcasts, RSS (really simple syndication) and new mobile marketing applications in which individuals transmit media content directly to a few or many end-users.

While most major ad agencies have begun tracking the rapidly growing field, none of yet formed a dedicated practice devoted to developing and exploiting what many believe could be the future of marketing communications.

"A lot of conflicting information and anxiety exist about how to incorporate these new online technologies into 'traditional' communications programs," said Paul Rand, a Ketchum Partner, Chicago Managing Director, and co-leader of the development team that oversees the new unit, which will draw on the firm's eKetchum Digital Media Group, as well as PR and technology offices worldwide. Ketchum executives said a global perspective is essential for understanding the personalized media marketplace, because technologies evolve differently in different markets. For example, the firm said the U.S. is "six to 18-months behind" Europe and Asia in terms of new mobile marketing techniques such as Short Message Service (SMS), text-based messaging that has proven to be an especially viral way of spreading word-of-mouth in overseas markets. Perhaps the best example of SMS used on a wide scale in the U.S. was the high-profile phone-in-vote campaigns utilized by Fox's "American Idol" series.

A number of top media agencies have begun tracking and analyzing the personalized media marketplace, and are initiating programs to capitalize on it, but the PR industry appears to be developing it as a dedicated marketing services practice.

Editor, MediaPost

Sunday, June 12, 2005

BoSacks Speaks Out: Can Google Rival the Newspapermen?

BoSacks Speaks Out: Can Google Rival the Newspapermen?

I feel compelled to tell you that I use Google News almost everyday. It is an extraordinary tool for news gathering. Not only the gathering of news, but more importantly, the capacity to get completely differing points of view on the same subject or news event. To me that is an aspect that is rarely mentioned and of extreme importance. For example in today's top headlines there is a story titled "G8 Urged To Ensure Debt Write-Off Reaches Poor." It is a political story coming from Reuters. That story, if it was the only one I read, would contain only one perspective. But with the Google News formula there are 1,211 other links from news sites all around the world reporting on the same story with completely different perspectives. That, my friends, is a true reservoir of diversity. You can't read them all, but reading one or two stories on important events is very important to your understanding of complex issues.

This is power publishing to the extreme. This is powerful broad based information delivery system on a global basis, that anyone, anywhere can tap into, and it doesn't even require a broadband connection. The world of publishing, or "Information Distribution", is changing every day. It is still in it's infancy, but look what we can do already. Think about what we might be able to do in five years? How about 10? Do your plans contain a global perspective? If not, why not?

Today I am sitting in a very rural section in upstate NY. Yet from here, or wherever my laptop is, I reach over 10,000 people worldwide everyday. My good friend Samir Husni says, "Think global, act local." Although I love to disagree with him, he is right on the mark with that statement. The Internet is empowering any publisher no matter how small and local it might be to have a global presence and perspective.

We are all seeing amazing changes in the publishing process. There are radical changes happening now and will continue for the foreseeable future. I often wonder if our current management teams can and will keep up with the advent of newer and even more magical technologies of information distribution.


The new electronic interdependence recreates the world in the image of a global village. - Marshall McLuhan (1911 - 1980)

Here is a list of the first ten articles on the G8 story listed chronologically starting with the most recently posted.

G8 urged to ensure debt write-off reaches poor

Reuters - 1 hour ago

By Manoah Esipisu. JOHANNESBURG (Reuters)

Last-minute cracks in debt relief plan

Sydney Morning Herald, Australia - 1 hour ago

Transparency is key to debt deal - UK's Brown

AlertNet, UK - 1 hour ago

G-8 plan for relief praised by debtors

International Herald Tribune, France - 1 hour ago

Richest nations approve debt relief for poorest

San Francisco Chronicle, CA - 3 hours ago

Rich Countries Waive the Debts of Poor Countries

Zaman Online, Turkey - 4 hours ago

G8 agrees $40bn Africa debt relief deal

Financial Times, UK - 4 hours ago

G8 writes off US$ 40 bn debt for African nations, India - 5 hours ago

Wealthiest nations agree to forgive $40 billion debt

San Jose Mercury News, CA - 5 hours ago

G8 leaders agree to help poor African nations

Independent Online, South Africa - 7 hours ago

............From the General Publication News Files...............

Can Google News robot rival the newspapermen?
By George Brock
A potential nightmare faces the 'dead-tree-and-ink' business

WE ARE accustomed to the idea that media history has been made by editors and publishers. That was in the past. Now the people who may next change the way news is interpreted and delivered work in a two-storey building in the Indian city of Bangalore.
They are not exactly editors or publishers: they are mostly young Indians with PhDs in computer science. The interns who work in Bangalore for the search-engine company Google are trying to teach computers to figure out what is quality journalism. If they succeed, their impact on written journalism will be profound.

When Google’s webmasters first launched Google News in 2001, its inventors endured a lot of lofty ridicule from newspaper editors and writers pointing out that no “robot” was ever going to be a better news editor than a human. And Google’s system wasn’t perfect: it reported with a straight face that Canada had arrested George W. Bush on war crimes charges.

However, the smiles of the men and women in the dead-tree-and-ink newspaper business are fading. Google News has six million users a month. In the search-engine wars, this isn’t huge — Yahoo! News, edited by real people, has bigger reach — but the implications are more intriguing. Google News is produced entirely by computer algorithms that sift 4,500 internet news sites every quarter of an hour and produce news bulletins ranking the stories by how many times they are found. Like most of Google, the front page is bare bones: clusters of links through to the original stories wherever they appear. You can customise a news feed on a particular topic of your choice; there are 22 regional editions in nine languages.

Once upon a time, fast, accurate news was in short supply. In a wired world with a glut of news, Google wants to be the global positioning system for people who need to navigate the information jungle.

For many people, and not just journalists, this is the stuff of nightmares. For an entertaining summary of the case for the prosecution, watch a short “mockumentary” in which Google’s news robots take over the world’s news business. Without discrimination, the vast news engine spews out data largely trivial and untrue.

Google News’s young Indian founder, Krishna Bharat, is not heading for that dystopia. As the snags are being ironed out of Google News’s basic model, he has already set his interns in Bangalore to work on subtler filters to sift news.

Are the sentences and paragraphs copied from somewhere else and can that story be discarded? Does the length of the story count? How many people does the news operation employ? How many foreign correspondents does it have? Above all, Bharat is striving to establish how to teach a computer to recognise originality, a genuine scoop, clarity, concision, eloquence, political impact.

“I see us as an integral part of the news community,” Bharat told the World Editors Forum in Seoul last week. “Our relationship with newspapers is symbiotic. We send traffic directly to the content provider . . . and we amplify the amount of news being read.”

Google’s experts see information being published on a range from history books at one end to fast-breaking news on the web at the other. A reader chooses how to trade off timeliness against mature reflection. That means that newspapers have to be clear about where they sit and what their readers expect of them in the balance between speed and depth. Newspapers confused about this are those most liable to die.

Perhaps the most powerful evidence of the advance that automated news “aggregators” have made is that their workings and effect are now on the political agenda. American journalism weblogs debate whether the Google formulas demonstrate an unintentional bias between Republicans or Democrats. There was a vigorous disagreement at the conference between Bharat and US and Japanese speakers over Google’s reluctance to reveal exactly what sources it uses and how it adds or subtracts from the list.

But those arguments only go to show that Google News is a force for change, like it or not.

George Brock is the president of the World Editors Forum

For more information:

For further media coverage:

Who's Checking the Numbers?

Who's Checking the Numbers?
by Dave Morgan, Tuesday, Jun 7, 2005 6:00 AM EST
BUSINESS WEEK BLOGSPOTTING'S STEVE BAKER made a great point last week that blogs are bringing math into journalism:

He opines that the open publishing platform is giving media voices to non-traditional journalists, like technologists and mathematicians who have very strong math skills and are bringing with them some much-needed quantitative discipline to the profession.

As someone who works in online advertising, an industry that lives and dies by numbers, Steve's point really hit home with me.

The online advertising world is awash with numbers, and we need more people covering that world who can make sense of them.

An enormous advantage presented by the growth of digital computing is their acute measurability. You can generate, analyze, and report numbers on almost anything related to digital media and marketing these days. Unfortunately, while this wealth of numerical data in the right hands can be powerful and liberating, it can also be overwhelming and quite misleading when misused.

It is virtually impossible to consume industry information and communication these days without encountering numbers, whether it is a news article in one of the trades, or a corporate press release, or a presentation at an industry conference. Numbers are everywhere, and usually, by their sheer specificity, they tend to carry a lot of weight. But should they?

All too often, numbers are released, reported, and accepted as gospel because no one in the audience is either knowledgeable or comfortable enough to ask the right questions. During the Internet Bubble years, everyone was making pronouncements about the size of the online ad marketplace. Every forecast got bigger, and no one questioned them because everyone wanted to believe. As I recall, one of the first attempts to call the numbers into question occurred in 1998 and was led by BURST! Media's Jarvis Coffin.

Uncomfortable with seemingly inflated numbers coming out of the portals, ad tracking services, and trade organizations, BURST! sponsored original research that analyzed that actual financial discloses of advertisers and found that their online ad spend was being inflated by more than 50 percent. While many in the industry dismissed his research as wrong and "contrarian" at that time, two years later, once the billion-plus dollars in "roundtrips" and fraudulent bookings at places like AOL and and dozens of others came to light, it became clear that he was right, and that the industry had been living with bad numbers. In the end, we lost a lot of credibility that it has taken the better part of 5 years to rebuild.

We need to be better prepared this time to have our numbers scrutinized by experts. For example, I, like others, was quite happy to see TNS Media Intelligence recently release their list of Top Internet Advertisers for the month of April together with the estimated monthly spend for each advertiser. Having data like this available in the market is a true benefit to all.

Once I looked at the actual numbers, however, I was not so sure that they were doing anyone a real service. The number one reported advertiser, "Tickle by Emode," was estimated to have spent $23,770,000 on online advertising in the month of April. Number two was Vonage at $21,829,000 for the month. Number three was South Beach Diet at $18,607,000. Number four was at $14,124,000. was number six at $12,508,000 and was number seven at $10,137,000. Basically, this report says that these companies had online ad spend in the month of April at a $100,000,000 to $250,000,000 annualized rate each.

I don't believe it. Does anybody else?

I don't believe that any of these companies spent anything close to those numbers in actual dollars in the month of April. I think that all TNS did was take some gross ad delivery numbers and multiply them by some estimated generic rate card numbers (which, as anyone in the industry knows, does not exist) and published the product of those numbers. They totally missed the fact that a large portion, and probably the majority, of all online ads are sold on a cost-per-click or cost-per-action basis. Their disclaimer (presented with the numbers) that "Media expenditures do not always take into account special considerations including publisher discounts, barter agreements, co-sponsorship, affiliate relationships, etc." misses all of that.

It is not my intention to single out TNS here. My concern is that numbers like these need to have their methodology called into question. They carry a lot of legitimacy because of their sponsor and their specificity. We need people that know the questions to ask and who can analyze and interpret the results. I hope that Steve is right. I hope that more mathematicians are coming our way.

Dave Morgan is CEO of Tacoda Systems.

Saturday, June 11, 2005

Demand for magazine ads down 0.7% in April 2005

Demand for magazine ads down 0.7% in April 2005 by ZDNet's ZDNet -- So far the demand for magazine ad pages in 2005 grew 0.8% with April 2005 declining by 0.7%. Publisher Information Bureau posted the following numbers for magazine ad demand in 2005:April: -0.7% March: +1.2% February: +4.2% January: -0.4% YTD: +0.8%

Friday, June 03, 2005

Consumers devour new magazines about food

Consumers devour new magazines about food
By Ellen Sweets
The Denver Post
June 1, 2005

Whether you're a dieter, gourmet, diabetic, chile pepper lover, carnivore, vegetarian, experienced cook or neophyte, there is a food magazine looking for you.
Where food aficionados once looked either to Bon Appetit or Gourmet to divine what hip thing was happening on America's tables, both have come up against niche competition over the years, from Saveur and Southern Living to Wine Spectator and Cooking Light.
Chris Allen, Cooking Light publisher, says his is now the largest food magazine in the country, with 1.7 million copies sold monthly -- compared with Bon Appetit's 1.3 million and Gourmet's 950,000.
"Eating healthier is no longer a trend," he says. "It is mainstream."
Samir Husni, known as "Mr. Magazine," is considered by many to be the world's leading authority on magazines. Husni, a journalism professor at the University of Mississippi, also heads Magazine Consulting and Research, a firm specializing in launching new magazines, repositioning established ones and packaging publications for better sales and presentations.
"Last year, there were 1,006 new magazines, and 105 of them related to food, from cooking for two to summer grilling, winter grilling, low carbs, cooking easy, cooking light and cooking for the diabetic. Food magazines are consistently about 10 percent of the magazine market," he says.
Val Weaver, editor in chief of Vegetarian Times, says her publication has come a long way since the brown rice, tofu, nuts and berries diet of the '70s hippie movement.
"Then along came 'Moosewood' and 'Diet for a Small Planet,' and the vegetarian movement hit its stride," she says. "But (vegetarianism) really went mainstream, especially once people realized that vegetarian food didn't have to taste bad."
But are people really cooking from these narrowly segmented, niche publications? Husni says there's no way to know that.
"Unless you use them regularly, and most people don't, food magazines are mainly something to whet your appetite without gaining weight," he says.
"We think people want to cook when it is fun or recreational, that's why Whole Foods (Markets) was so brilliant. Cooking needs to be fun because we're going crazy with everything else."