NBC Continues to Struggle Despite Leadership Change

In the late-1990s, advertisers couldn’t do better than securing a spot on NBC’s Thursday comedy night.

But times have changed. NBC has been in decline for several years and this fall’s ratings show that the trend is continuing. During the first four weeks of the fall season, viewership from the key demographic of 18 to 49 years is down 16% from last year. As the most valued advertising group, this could spell bad news for NBC in their quest to court new advertising.  NBC has consistently come in fourth behind ABC, Fox and CBS for several years.

What’s to blame? While NBC was owned by GE, executives cut costs in order to keep up with smaller audience segments. Now that ownership has changed to Comcast, executives are committed to turning the network around over the next three to five years. Comcast was mainly interested in the cable channels in NBCU’s stable, but will need to deal with NBC’s problem of hemorrhaging money and audience numbers. In order to do so, they have brought on Bob Greenblatt, the former creative chief at Showtime. He has retooled the staff, brought in new heads of scripted programming and is already focusing on the 2012 spring and fall seasons.

Greenblatt and his team have big challenges to overcome. Two of their biggest shows, “Law and Order SVU” and “The Biggest Loser,” have experienced major viewership drops – mainly due to each losing a star. The “Law and Order” spinoff had a 20% decline and “The Biggest Loser” lost 23% of their viewers compared to last year. Prime time is losing out on hundreds of millions of dollars per year, but Comcast has committed to NBC as a turnaround opportunity.

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Selling a Brand May Make a Difference in Magazine Ad Spending

Although industry experts say that magazine closures are far from being over, there is some silver lining for many titles that have discovered the power of selling their brand.

The Publishers Information Bureau recently released its second quarter ad sales data and it points to a slow recovery, but a recovery nonetheless. Those that are surviving closure and maintaining stable ad figures have tapped into selling their brand.

When a magazine like Rolling Stone is able to rally their readers around the brand, ad buyers are investing more into that brand. Publishers are putting an emphasis on the brand as whole by having sales teams sell cross-platform advertising rather than having different ads for different mediums. For example, a media buyer will invest in ad space in the print copy of the Rolling Stone as well as their online portals, like their website, iPad and mobile phone editions.

Broad categories like entertainment, news, technology, opinion leader and business magazines are seeing the most comeback, with some niche lifestyle publications in there as well. Rolling Stone experienced a 71% increase in ad spending in the first quarter of 2011. Also on the increase were Hispanic magazines, which saw an 18% ad spend increase in the same period of time.

When a publication is able to develop a strong brand across several different platforms, it becomes a surer bet for advertisers. Although there are likely to be additional closures in the coming years, the publishers who can tap into brand presence will be able to maintain their positions in the area of media buying.

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TV Still Pulls in Majority of Advertising Dollars

Although most Americans are watching less television and spending more time on the Internet, through their computers or mobile devices, marketers are sticking with tried and true channels and advertising on television.

Over the next year, advertisers are expected to spend 3.3% more than the previous year. Television advertising itself is accounting for 34% of the total U.S. ad market, according to data from Interpublic Group of Co.’s Magnaglobal. In addition to the projections for 2011, the same study showed that TV’s share of advertising is expected to increase to 38% by 2016 for a total of $81.3 billion spent.

Major marketers are increasing spending both in TV and online as they try to negotiate how the two mediums can work together to bring more revenue. Online ad spending is expected to reach $30.1 billion in 2011, placing it as the second largest ad-supported medium. According to Magnaglobal, it is expected to reach $7.4 billion by 2016 (which will be 22% of the ad market).

What has evolved is a “two-tiered” advertising environment in which television and online advertising are at the center and other media on the periphery. The Internet has taken a large share from print advertising, which is continuing to decline. The same hit in media buying hasn’t been seen on television yet despite the growth of online viewership. Industry experts theorize that the wide spread appeal of television and the storytelling potential of television spots are keeping TV in the running.

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Netflix Surpasses Traditional Video Subscriptions As It Reaches 20 Million Subscribers

Netflix Inc. has posted a 52% profit jump and a 34% revenue increase in the fourth quarter of 2010, which plants the 13-year-old media company in a top spot for media subscription services.

Traditional video services Showtime and Starz have 18.5 million and 17.4 million subscribers respectively, and Netflix came in at 20 million in 2010, with over three million being added just during the holiday season.

Netflix expected to grow as it increased its video on demand streaming service, starting at just $7.99 per month, but only predicted a 3.6 million increase in new subscribers. The total for 2010 turned out to be 7.7 million.

The boom in Internet video overall contributed to Netflix’s growth, CEO Reed Hasting was careful to point out. The overall acceptance of video on demand as a desirable media form influenced Netflix’s growth. Still, their impressive growth spells good news for on demand content which, in turn, may influence more entertainment companies to offer licenses to Netflix and other services.

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Advertisers Get Creative to Reach Out to DVR Users

Digital Video Recorders (DVRs) can be found in nearly 40 percent of American homes, and their ability to let viewers fast-forward through commercials has had advertisers worried. However, according to a recent Nielsen report, advertisers have several options for attracting DVR audiences.

Many major advertisers have started using contextual advertising to showcase products and companies within the context of the show. For example, a Toyota Corolla zooms to the rescue of characters on AMC’s The Walking Dead. The ad is part of the show so even DVR users see it.

The report also noted that advertisers may not have much to worry about when it comes to their traditional ads being skipped. The largest segment of DVR owners – 18 to 49 year olds – is actually less likely to skip through the commercials. The ratings for the commercials for prime-time shows rise by 44 percent when the playback within three days is counted. This indicates that the DVR users are actually watching more TV and commercials than they would otherwise.

About the Author: Peter Koeppel is Founder and President of Koeppel Direct, a leader in drtv media buying, marketing, campaign management and creative strategies.

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At Yahoo, Using Searches To Steer News Coverage

“Algorithm as editor” is the phrase coined to describe Yahoo’s unique new way of delivering news content to its readers. It’s a reversal of the previous “top down” method of news delivery in which editors looked at the stories of the day and decided what was important for the masses. Now, the masses (through their searches of the day) are determining what news is delivered.

This “news democratization” has been taken a step further by Yahoo, who’s introduced a news blog that relies on search queries to guide its reporting and writing on national affairs, politics, and media.

Of course, search-generated content has been growing by leaps and bounds online. Yahoo recently purchased online news company Associated Content, which was based on this model of journalism based on current buzz.

To make it work, Yahoo has taken its search analytics, which track phrases and topics that are gaining popularity across its network, and is now using that to drive what stories its news coverage teams (editors and writers) will cover. For now, this is happening on the Yahoo blog Upshot, whose staff of two editors and six bloggers is covering news in near-real-time based on the trends.

This more direct approach to appealing to its audience’s wishes, in terms of what types of news they’re interested in, may pay off for the search-engine gone news outlet. As a bonus aside, this type of content delivery also focuses advertising in such a way that it becomes a powerful draw to ad buyers.

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Google Wins Omnicom As Ally

Google has partnered with advertising company Omnicom Media for online display advertising. This will bolster Google’s entrance into the display ad space.

As the search giant expands its marketing and advertising revenue, it needs to make strategic alliances with established marketing firms with clientele who are already spending money in the space. Under this deal, Omnicom will be spending hundreds of millions in display ad purchases for its clients over the next few years. In return, Google is working with Omnicom on an application “trading desk” that allows Omnicom to more easily purchase display advertising on Google’s ad exchange.
Omnicom has already been using the ad exchange to bid on advertising spots throughout Google’s network, using its own technology. This new setup will allow easier access for Omnicom as well as better analytics to see how ads are performing.
Display advertising, while still controversial as a somewhat untested and unproven advertising market, will be worth over $5 billion this year. 2009 saw about $5 billion with steady growth over the previous three years and industry insiders expect that growth to continue.
Ad exchange systems, such as what Google promotes, allow marketers to choose more niche-based and focused sites to advertise with. These systems create genre-based website networks that the advertiser can then bid to use for their marketing. Advertising can be purchased for specific websites or pages or for suites of websites with similar themes and visitors. Site owners sign up with the ad exchange in hopes of getting more revenue from advertising with less effort spent looking for ad buyers.
Critics of deals such as this latest Google-Omnicom agreement, say that these types of deals raise conflicts of interest questions for the industry and especially for clients and potential clients of the firms in question. If, for instance, Microsoft were to be a client of Omnicom and see this deal with search rival Google (Microsoft owns the Bing search engine), might they question their investment?
Omnicom counters this by saying that the deal renders lower-cost advertising for its clients and does not require them to put specific clients onto Google’s networks. The deal allows Omnicom to focus on its expertise and leave technology to someone who knows it best.

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Walgreens to Serve Alcohol Again

In hopes of regaining lost market share and bolstering slumping sales, the popular drug store chain Walgreens is reversing its 15-year-old alcohol sales ban and will begin to carry alcohol in stores located in states that allow it.

Until the mid-90s, Walgreens was one of the nation’s largest liquor retailers with most stores having full liquor selections available. Alcoholic beverages comprised about 10% of its total sales revenues. Costs began to rise as staff and maintenance began to cut into profits on the liquor sales and Walgreens finally stopped carrying alcohol altogether.

Beer and wine sales have been re-introduced into about 3,100 of the drug store chain’s 7.500 stores nationally and will become available in about 5,000 stores nationally by year’s end.

Walgreens, which prides itself on its community-oriented image, sees this move as a response to sluggish sales and losing market share while rivals such as CVS and Rite Aid both offer beer and wine on their store shelves. Walgreens plans to go a step further and offer local fare at some stores, such as stocking locally-produced Washington State wines in their regional stores in the northwest.

Due to crime concerns, however, the drug chain will not be stocking anything more than beer and wine for now.

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TV on Your Cellphone Coming Soon to the U.S. and Europe

In Asia and much of the rest of the world, television has been available in streaming format to cell phones for some time.

In Europe and the U.S., however, it’s been a long time coming as networks claim it will overload their systems and as competing network standards have made it difficult to employ. Limited offerings from carriers such as Verizon and AT&T have had dubious popularity amongst users, but new technology and movements in the market are changing that.

Test trials are already underway in some areas of North America as providers work out the final details of the service offerings. In South Korea, says Samsung’s Hankil Yoon, “Our experience shows that people like watching TV on mobile phones, even on smaller screens. And they like watching it for free. It is only a matter of time before it goes global.”

Samsung already includes mobile-TV chips in its smart phones for the Asian markets is making a handset for Sprint in the United States. The free-to-air mobile TV availability in South Korea has been out for over five years and now about 56% of the country’s population watches it regularly from mobile devices. An additional 80 million people in China, Southeast Asia, India, Africa, and Latin America all watch mobile TV as well.

Earlier this year, Sprint and nine broadcasters in the Washington-Baltimore area began a four-month trial of mobile TV for various Samsung, LG, and Dell devices including netbooks, mobile phones and portable DVD players.

If that trial is successful, the devices may begin to go national by the end of the year.

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Are Cable Rebrands a Smart Idea?

What makes some rebrands so successful, and others fall flat?

Consider the following:

  • When NBCU’s USA Network rebranded itself, it turned into a $1.7 billion a year powerhouse.
  • ABC Family’s rebrand made for the network’s most-watched year.
  • Oxygen’s rebrand boosted its numbers 52% and 48% respectively in their top two target demographics.
  • AMC brought in above-average ad revenue immediately after its rebrand.
  • TruTV’s rebrand put it in cable’s Top 10.

One of the clearest paths to getting a rebrand right is continuing to appeal to marketers: If marketers are unclear on which target market the network is most likely to appeal to, they’re not going to have a lot of confidence that their ads will reach the right viewers.

Thankfully, rebrands are usually extremely friendly for niche marketing, since a successful rebrand will be as specific as possible in the kinds of viewers the network is hoping to draw.

Network rebrands often include dropping shows that don’t fit with the new image and aggressively pursuing new talent that exemplifies the brand. That said, one of the most powerful things any network can do is stick with a winning pattern. Instead of jumping on a popular new demographic, networks should only rebrand when it will actually strengthen their underlying base, instead of alienating it.

After all, a strong brand means a consistent target market, and that means confident ad buyers.

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