Top Reasons Agencies Lose Pitches

 

• by Larissa Faw, February 26, 2016, 12:09 PM

On average, a small to mid-sized advertising agency receives 10-12 requests for proposals (RFPs) a year, according to marketing research consultant Cubeyou. The average amount of work that goes into each proposal is 150 hours, with each costing between $15,000 and $20,000. Creativity and strategic planning represent more than half of the total cost.

Most of these efforts fail to win new business. The average closing rate in the U.S. is 43%, though the best U.S. agencies close on average 85% of the pitches they participated in.

What separates the winners from the losers? There are several key factors why agencies most commonly don't hire an agency after the pitch, according to an analysis by Cubeyou. They analysis is based on interviews the firm conducted with 250 Agencies in the U.S. in the fourth quarter of 2015.
Agencies tend to be too focused on selling themselves rather than understanding and solving the client's problem. Also agencies often don’t appear to understand the target audience or bring the right insights.

Differentiation or lack of it is another factor. Also, agencies that lose a pitch frequently aren’t able to convince clients of their ability to deliver. And there’s the chemistry factor—sometimes an agency-client pairing just doesn’t “click.”

When mulling whether to participate in a pitch, agencies ought to consider several issues before engaging, per the Cubeyou rundown. If the client is entertaining more than five other agencies, it’s a sign that the client either doesn’t have much experience working with agencies, or doesn’t know what they want. Also, the longer the list of agencies participating, the less chance you have of winning the pitch, and the more time your team will need to put in to be competitive. The optimum number of agencies is three to four.

Clients get the best results from the pitch process when they give agencies the information they need to produce relevant ideas. If the client doesn’t have time to discuss the pitch beforehand, they clearly don’t consider it a priority, and agencies shouldn’t waste their time on it either. An unknown budget is also a symptom of lack of trust, or a total lack of awareness about the industry.

Another potential problem is an overly demanding or vague brief. The brief needs to be proportionate to the account fees.

The average client-agency relationship has shrunk from 7.2 to 2.8 years while the average CMO tenure has doubled from 2 to 4 years, but if the account has a history of short relationships, agencies may lose money even if they win the business, says Cubeyou. Consider the time and money you sink into your pitch process and how long it will take you to make that money back and turn a profit, they advise.

Lastly, agencies should show caution when clients treat creativity like a commodity. Reverse auctions - when sellers are asked to bid against each other - are likely to drive the price down, and if the client opts to go this route, it’s a sign that they are motivated more by price than the quality of your work, says Cubeyou. "You’ll also likely shoot yourself in the foot if you do win since you’ll have to undercut your competitors’ prices."

Radio Is The Number One Reach Medium

By Radio Ink -

February 25, 2016

 

 

 

 

That’s according to the latest Nielsen “State of The Media” report released Thursday. According to Nielsen, radio now reaches more Americans every week than any other platform, and that includes nearly every demo. Who says young adults are no longer listening to the radio? Nielsen says 93% of adult consumers over the age of 18 use radio on a weekly basis. Let’s take a closer look at the numbers.

In the 18-34 demo, Nielsen says radio reaches 92% of that population, compared to 73% for TV and 84% of smartphone users. In the 35-49 demo, radio moves up to 95%, with TV at 87% and smartphone users at 86%. And in the over-50 demo, TV edges out radio 92% to 91% with smartphone users at 60%. When combining all adults, radio stands tall at 93% with TV at 85% and smartphone users at 74%.



Nielsen’s Post-Holiday Ratings Report
Now that the Holiday season is several months behind us, Nielsen has had a chance to analyze listening trends of formats that are affected by the disruption of stations that flip to holiday music. Nielsen says traditionally, January marks the beginning of seasonal spikes for both the Sports and News/Talk formats, while the major music formats look to reset.

Nielsen says sports radio, lifted by higher-than-ever levels of interest in the NFL, matched last January’s 5.1% share among all listeners 6 and older. The annual rise in sports listening typically begins in the fall with the kick-off of college and professional football, the MLB postseason, and culminates in early February with the NFL playoffs.

But January’s headline is that News/Talk registered its highest marks for listener share in several years, no doubt driven by the ongoing drama of the presidential campaigns and primary season now in full swing. News/Talk jumped more than a full share-point from the holidays to January among all listeners (6+) (8.6% to 9.7%). And listener share among listeners 18-34 and 25-54, two key groups for marketers, increased by 14%. The listener share among persons 18-34 increased to 4.1% from 3.6%, while the share among listeners 25-54 jumped to 6.7% from 5.9%. In fact, January’s 4.1% share rating among Millennials is the format’s best showing since November 2012, the last U.S. presidential election.

When Nielsen took a look at music formats, Urban Contemporary scored its best January ever in PPM measurement. And after a record-breaking 2014, the format shows no signs of slowing down. With hip-hop gaining more mainstream popularity, Urban Contemporary continues to ride a wave of audience growth that stretches back several years. Consider that among listeners 25-54, the format has grown its share of audience by 45% since the beginning of 2013.

TV Upfront Tea Leaves: Hedging In More Directions Than Ever

A media critique by Wayne Friedman, Staff Writer Thursday, Feb. 25, 2016 The TV upfront process has begun, with talk of big dollar signs come June/July.  But is the economy ready? Financial markets aren’t exactly steady.  Some strongly believe a U.S. recession is around the corner -- amid other slowing economies around the globe. We all know the TV upfront is a futures marketplace for many. So analyzing  the TV ad market for late 2016 and for the first half of 2017 is what counts. Increasingly, we have scarcity considerations, factoring in any average commercial rating metric you like. TV networks have talked big upfront things to come in recent financial earning phone calls.   But this isn’t the 1990s. In those years a “strong” scatter market could typically yield double digit percentage gains. That most likely isn’t going to happen. Instead Brian Wieser of Pivotal Research Group believes TV markets will see high single-digit pricing increases (versus low single-digit gains a year ago), as well as an increase in overall volume for broadcast and cable networks -- something recent upfronts haven’t benefited from, especially for broadcast networks. CBS says prospects are good, especially looking at its recent special  events -- the Super Bowl and The Grammys -- “along with the strength we’re seeing in scatter, provide an excellent market indicator as we head into the upfront.” Specifics, please? In the past Les Moonves, chairman/CEO of CBS Corp., could provide more concrete upfront predictions, like alluding to “double digit increases.” No more. Things are trickier now. And, yes, blame more time-shifting and new TV-video options, including digital media and Netflix. In that light, NBC announced it is expanding its digital-content-centric programmatic platform to include linear TV for the upfront.  Data-driven deals, hinged to marketers’ own first-party data, will be top of mind. Even then, NBC notes this is for “select” advertisers and “select” DSPs (demand-side platforms). And, at the same time, NBC talks up “scale” here. Hmm... All to say, expect even more complex hedging for this upfront market -- now some three months away -- for both buyers and sellers.

Ad Dollars Boom on TV and Radio

Television will be up 5 percent this year, with auto and telecom big

By Diego Vasquez

 

February 26, 2016

   

Wisconsin is a swing state this presidential election year, meaning there will be a great deal of political spending statewide, including in its largest city, Milwaukee.
That influx of cash will add to an already healthy media market, where spending is up in many key categories.

“In non-election periods the market will be up slightly,” says Katelyn Fleming, broadcast negotiator at Kelly Scott Madison.

“Stations are forecasting spot dollars to be up 5 percent over last year.”
Finance, automotive, healthcare and telecom are driving the market and have all increased spending versus a year ago, while no major category in Milwaukee has significantly pulled back.
Stations in Milwaukee are forecasting considerable political activity throughout the year, although two months into 2016 it’s been fairly quiet on the political front, with no major disruptions in inventory.

That, of course, will change later this year during three separate periods.
Wisconsin’s presidential primary takes place on April 5, and the state will hold a partisan primary in August for seats in Congress and the Wisconsin legislature. That determines the candidates for the general election in November.

“Wisconsin is considered a purple state, meaning fairly heavy activity from both sides of the aisle,” Fleming says.

“TV and radio will be very tight three weeks prior to April 5 and Aug. 9, and four weeks prior to Nov. 8.”

Political spending will affect the news dayparts first and then trickle to other areas including primetime and early and late fringe.

Meanwhile, like TV, radio is pacing slightly ahead of last year, with spending up mid-single digits.
Categories driving radio in Milwaukee include telecom, auto, fast food and insurance. Morning and afternoon drive times are the tightest and most expensive, while there is more room for negotiation in midday and evenings.

Political also will impact radio in Milwaukee, where two of the market’s top stations are news/talk outlets.

Scripps-owned news/talk station WTMJ-AM was the No. 2 station in the market in January with a 6.6 average quarter-hour listener share, according to Nielsen Audio, while iHeartMedia news/talk station WISN-AM tied for No. 3 that month with a 6.4 AQH share.

The has one dominant station, iHeartMedia classic hits station WRIT-FM.
Until late last year WRIT was known as Oldies 95.7, but in September it rebranded to 95.7 BIG FM, although its format remained largely unchanged.

The move hasn’t affected ratings at all. In January WRIT posted an 8.7 AQH share, more than two full points ahead of its closest competitor.
 

Virtual TV, Virtual Ads? Perhaps A Virtual Media Dream -- Or Nightmare

A media critique by Wayne Friedman, Staff Writer Friday, Feb. 26, 2016 Virtual reality could be the next big thing -- for TV content producers, and maybe even advertisers. But how and when? And haven’t we seen this movie before? At the recent Mobile World Congress 2016 in Barcelona, two major media company executives talked up virtual reality: Chris Jaffe, vp of product innovation of Netflix and Martin Sorrell, chief executive officer of WPP Group. Netflix discussed its virtual experience efforts with Samsung, launching the Samsung Gear VR Netflix app and content for Samsung Oculus Gear. But for this initial Netflix effort, the content isn’t virtual reality -- just a standard flat video displayed in a 360-degree environment. It simulates a virtual living room to sit in and watch Netflix on a virtual screen. WPP’s Sorrell also talked this up at the same mobile conference: “The VR thing is really very interesting.” But remarks were couched from a lone experience he had: "Maybe I was just very influenced by what I saw at Sundance with Ridley Scott's film ‘The Martian.’” Sorrell believes VR “is sort of game-changing”for advertisers. What kind of executions? He thinks a full suite of media opportunities are on the table, ncluding travel, sports, live events, gaming and entertainment. “Fantastic,” he says. Sorrell can see WPP investing in VR because it’s about stuff WPP already invests in: technology, data and content. Still, you might wonder whether advertising and/or TV-film executives are too euphoric about VR. Does it remind you of any technological media revolutions in the recent past? Is VR a little more that this year’s 3D TV promise? VR proponents will say 3D was a TV technology thing, for many old technology. New virtual reality is about new tech -- now bulky-looking headsets, with the promise of sleeker consumer products down the line. Headsets aren’t my thing. I suggest waiting for holographic media. So, for example, when you enter a 7-Eleven, a scene from “Big Bang Theory” floats in front of your eyes — followed by a drifting image of an orange creme Slurpee. Now, that’s fantastic.

Readers: Nielsen better watch its back

They say comScore can develop into a real challenger with new ratings

By Bill Cromwell

February 23, 2016

   

Monopolies generally aren’t good for anyone but the one who holds the monopoly.
Without competition, a company will never be pushed to get better, and it won’t have to answer to its clients, who have no recourse when the company doesn’t give them what they want.
That’s why media buyers and planners have long hoped for a competitor to step up against Nielsen. For a while, they thought Arbitron could put up a fight, but Nielsen eventually bought the other major ratings company.

Now, with the recent merger of comScore and Rentrak, media people are optimistic that finally that competitor has come.

That’s according to a Media Life survey inviting readers to weigh in on comScore’s recently announced plans for crossplatform media measurement.

The question to readers: Do you think comScore can become a legitimate competitor to Nielsen?
The vast majority, 83 percent, answered yes, and they appear excited about that chance. Here’s a sampling of answers we received from readers on comScore’s prospects:
“Over time, yes. Nielsen has had this way too long, and not until competition will they make any real changes themselves.”

“Any company (in this case a company that is a virtual monopoly) that is slow to react to changing environments can be put down. See ‘blacksmiths.’”
“I feel like there’s so much value behind the Nielsen brand and it’s been used as the industry standard for so long. However, change is good! I hope comScore can compete and provide us media buyers with amazing, reliable information!”

“Client relationships, response time and delivery is key.”
“ComScore has a better grasp on the digital realm. I think they will be able to report on a more fair plain.”

“They seem to have the backing to pull it off.”
“Nielsen has had no competition for decades. ComScore evidently has the money and the will to become one.”

“Rentrak to some extent has been competing with Nielsen for some time. Now, as part of comScore, I don’t see it weakening their standing.”

“They are always proactive. Nielsen is typically reactive.”
“I do think they can, but it will take a lot longer than April.”

***
April is when comScore plans to roll out the new crossplatform ratings. Readers have some reservations about them.
Asked for their take on the ratings, the largest share, 42 percent, said they like the idea but didn’t know enough details to form a full opinion.
Twenty-six percent said they’re optimistic and believe the ratings will be a great addition to what Nielsen already offers.

Another 19 percent said they’re cautiously optimistic, and the remainder are pessimistic.
ComScore is sure to attract some new clients with the rollout of the new ratings. Twenty-two percent of respondents said they do not currently subscribe to comScore but are now planning to do so, while another 39 percent said they are already clients.

The rest are not clients and have no plans to change that.
Finally, Media Life asked how the new ratings, which will come out monthly, might help media people in their jobs. Responses ran the gamut, with some saying they’ll be hugely helpful to some saying not helpful at all.

Here’s another sampling of responses:
“Understanding our ratings as an overarching strategy instead of just a traditional media strategy.”
“Not as much as you’d think. Unless the client is spending money on programming in all platforms, additional data will be useless and only justify media outlets raising rates based on audiences that may not be exposed to your clients’ ad.”
“It may provide additional negotiation power. However, monthly is not overly useful.”
“More accurate accounting of the different demos we have.”
“Total audience measurement is something the industry needs. Nielsen has moved too slow.”
“Total audience measurement across all delivery systems will enable us to give more accurate data and competitively position and price our programming.”

How NBC Could Own the Coveted 18-49 Demographic for a Third Year in a Row

Robert Greenblatt on the network's hat trick By Jason Lynch

• February 22, 2016, 7:21 PM EST

(L. to r.) Blindspot, Dolly Parton's Coat of Many Colors, and Shades of Blue fueled NBC's unexpectedly strong season. Paul Sarkis/NBC; Quantrell Colbert/NBC; Peter Kramer/NBC

NBC won the last two seasons in the adults 18-49 demo, but during last May's upfronts, CBS all but guaranteed it would snatch the demo crown away this season. Instead, NBC held a commanding lead through February, with Sunday Night Football and The Voice bolstered by freshman hits Blindspot and Chicago Med, and a trio of popular December holiday specials: The Wiz Live!, Dolly Parton's Coat of Many Colors and Adele Live in New York City. Thanks to the Super Bowl, CBS has pulled ahead, just barely—averaging 2.5 to NBC's 2.4—leaving NBC in a strong position to three-peat with three months to retake the lead. NBC Entertainment chairman Robert Greenblatt looked back on the successful season run that not even he saw coming.

Adweek: Even with Sunday Night Football and The Voice again, did you expect to lead in 18-49 by as much as 0.4 in the fall?

 Robert Greenblatt: I did not. That isn't a guaranteed win for us; we really have to have other things work as well. Usually, you're happy if you win by a tenth of a rating point. But it was a real substantial lead, and that had to do with The Wiz, Coat of Many Colors, Chicago Med and Blindspot working, and a lot of really smart scheduling decisions. Little things that would never be a big topic of discussion for anyone. We always know January and February are tough because The Voice is off, but we're working really hard.

How did you pull off that December run of hit specials?
A couple of years ago we started trying to figure out how do we do more holiday specials, because the iconic ones like A Charlie Brown Christmas are not gettable; they're in license for so long. It dovetails with drama series: If you start the third week in September, you can get nine episodes in the fall before you have to take a break because of production schedules. That means by December, a lot of your dramas are in repeats. We started thinking, can we supplement the schedule with some one-offs that are big events? The big idea three years ago was a musical, which we didn't know if it would ever work or not, much less be a perennial. We got in more and more of these, and they tend to work, so we built them into our overall budget.

Do they help for midseason, too?
If you're going to launch new shows in January, you don't want to be asleep at the wheel in December, because you don't have any audience to promote to. We would never have launched Shades of Blue or Superstore in the doldrums of January with The Voice being off if we hadn't had that promotional base. To have 13 million viewers in The Wiz and 15 million viewers in Dolly Parton to speak to, it's really effective.

You're making more films based on Dolly and her music. Will they also air in December?
Not necessarily, but maybe. It depends on the movie. There's some Dolly movies that are holiday- and family-themed, and there are some that are more adult and sophisticated, which may not be right for the holiday.

The Wiz Live! was a hit, but you won't be bringing back Best Time Ever with Neil Patrick Harris. Did the mixed reception to your live shows this fall change your thinking about live programming?
Not really. The live thing shouldn't be the tail that wags the dog. If that's the best way to do it, then it should be live. Best Time Ever did relatively well, but we just decided that the format wasn't the best format as it developed. I love Neil and he was such a trouper. We could have done that show not live, and probably put together a better show that was cleaner and crisper, but he really wanted to do the high-wire act of live. And we thought, OK, that's how they do it in the U.K.

What did you think of Grease: Live on Fox? Could we finally see a live audience in your next musical, Hairspray, given how Grease was able to pull that off?
I thought Grease was fantastic, and the live audience was great in a lot of ways, but it's not just as simple as having a live audience or not. We've done shows in the past where it would have been ludicrous to have extras in scenes laughing and applauding, like in Nazi-occupied Austria, Neverland or even in Oz. Should we have had munchkins or flying monkeys in the background going crazy after musical numbers? And if the audience isn't visibly worked into the scenes, then they're sitting in a big room somewhere and you just hear disembodied laughing and applause, which is when viewers at home would think we just added a fake laugh track. If we can work an audience easily into a show, as I think we can in a lot of places in Hairspray, we will.

How did you settle on Hairspray for the next musical?
It's hard to find titles that are really broad and popular in the musical world, that are available. I'd love to do Wicked, which is a show that this company owns, but it's a huge asset, it's still in its infancy and it's going to be a movie, so that's not available. When you look at the ones that you can get your hands on, many of them are old-fashioned, and they're shows that I might know really well and like personally, but I don't know that the rest of the world does.

How much did The Wiz's success influence your pick?
The Wiz didn't really impact it. The Wiz emboldened us to do another one. If we'd gone south [in the ratings], we would be questioning it because they are enormously expensive. Everyone thinks every media company just rolls around in their cash, but that [musical] is so expensive to do, and it generates a lot of advertising revenue, but it doesn't generate a lot of profit. So we can't just do these for the fun of them. What The Wiz did tell us is, let's speak to the diverse audience, in as potent a way as we can. Peter Pan was very white. Sound of Music was very white. And I think Hairspray is one of the few shows where thematically, it's about inclusion and literally integrating that music show with black people. It's a very uplifting, positive message, and there aren't a lot of shows where that's inherent. So that rose to the top immediately. Now, the challenge to cast it is a big one, because The Wiz did set that bar. I think these musicals do significantly better if you have big names. Not in every role, because it was so fun to discover [newcomer-turned-Wiz-star] Shanice Williams, but you've got to have some real marquee value, and that's what we're going to look for now.

CBS has the advantage with the Super Bowl, but how do you like your chances of holding on to the 18-49 crown this season?
I hate predicting, but I will say that a couple months ago, we all assumed that we would fall to second place in the demo. But if we get some more luck—if these new shows stick and we're really smart in terms of scheduling—we could pull it off. But we're not in any way thinking it's a certainty.

If Netflix Is No. 1 U.S. TV Network -- And It Doesn't Sell Ads -- Should You Care?

A media critique by Wayne Friedman, Staff Writer Monday, Feb. 22, 2016   Folks everywhere from NBCUniversal to Nielsen and comScore are wondering: What are the viewing numbers for Netflix? Still, execs at traditional TV networks may be just rolling their eyes and thinking, “Netflix doesn’t sell TV advertising, and that means they don’t compete with us. So who cares?” But there are those 43 million Netflix subscribers who are watching lots of TV -- viewers who aren’t watching other things. Many analysts have pointed to a direct association between Netflix viewing and erosion for some traditional TV networks. Howard Shimmel, chief research officer of Turner Broadcasting, recently offered some eye-opening numbers. ”Based on our methodology," he said, "Netflix was the number-one rated TV network total day, U.S.-based.” Are you interested now? If TV viewing is turning to more advertising-free subscription VOD services, TV executives want to know. "Netflix reports its gross streaming hours," Shimmel said at the Media Insights & Engagement Conference, according to advertising publisher/consultant, Warc. "We've built a methodology at Turner to [assess] the Netflix numbers. We estimate how much is U.S. versus international, how many people per stream are watching, and how much is on the big TV, versus on some other device. "Is it a perfect measurement? No. Do I feel better, as a researcher, giving my management some line of sight that's based on some data and instincts and what I believe to be a pretty solid rationale? I think the answer is, 'Yes.'" And that’s the key. Forward-thinking TV executives increasingly need to think about the fast-changing media-TV ecosystem. At some point, they assume, there will be more fractionalization of media. But unlike others before it, Netflix doesn’t want any third party to measure its viewership. It is not important to its business, the company says, where it has its own first-party, heavily detailed digital data not encumbered by old TV viewing formulas. For competitors, it’s a different story. This isn’t 1992, when advertising-supported cable networks were still of little consequence to the broadcast networks, and premium cable networks like HBO and Showtime were niche viewing players. The big shifts have come, at least in part, from a company that doesn’t sell -- nor want -- traditional TV advertising.

Advertisers To Spend $35 Million In Podcasts

SMI: Internet Radio Sees Huge Advertising Increase

By Radio Ink -

 

February 23, 2016

According to Standard Media Index’s latest data, U.S. advertising increased 4% in January compared to January 2015. Digital remains the shinny new toy for advertisers with spending for January up 3 points for a total of 27% of all spending. Internet Radio increased a whopping 39% over 2015. SMI saw investment in video sites increase 39% and social media sites were up 56%. Traditional radio ad volumes were lower in January and declined by 16% compared to January 2015. Television’s total market share is currently 59%, having dropped by 2 percentage points from 61% in January 2015. Broadcast TV grew by 9% and cable TV ad spend slipped by 3%.

 

That’s according to a piece in The Wall Street Journal and that’s compared to $18 Billion being spent on radio and $67 Billion in TV. While $35 Million will represent a 2% increase over last year, the article points out there are still a lot of hurdles to purchasing advertising in this new form of audio listening.

Advertisers To Spend $35 Million In Podcasts The Journal says advertising revenue growth has been limited by a range of problems. “It is difficult to measure how many people actually tune into a podcast, let alone listen to hosts promoting its sponsors. Ads in podcasts are relatively expensive, so it is tough for brands beyond direct-response advertisers to determine whether the investment pays off. And the process of buying and selling ads in podcasts is still complex and clunky.”

Performance Bridge CEO Stephen Smyk tells The Journal. “I certainly believe that it’s such a difficult and convoluted process to buy, manage and verify that [it] certainly has kept a lot of advertisers on the sideline.” Performance Bridge buys podcast ads on behalf of direct-response advertisers like glasses company Warby Parker and Harry’s razors.

And like all other forms of media, measurement is the key to grow the revenue. NPR’s Director of Audio Insights Steve Mulder tells The Journal, “It’s the Wild West in many ways for podcast measurement. If we want to unlock the full potential of podcasts, we have to ensure we have rock solid measurement that everyone agrees on and everyone can trust.”

The Journal cites some stats that point out how a small group of publishers is dominating the Podcasting landscape, at least for now. “About 700 unique programs from the top 10 podcast publishers, including NPR, This American Life/Serial and WNYC, amassed 110 million downloads in the U.S. in December, according to podcast advertising firm Podtrac. Those top 10 podcast publishers account for about 40% of all monthly podcast listeners in the U.S.”

 

Radio Reaches Key Voters In Super Tuesday States

• by Philip Rosenstein,   

Radio will have a strong impact on undecided primary voters as we move into the heart of primary season, per a Nielsen Audio study commissioned by the Katz Radio Group.

“The Local Vote 2016” study analyzed media consumption trends in the Super Tuesday states of Colorado, Texas and Virginia. (Colorado and Virginia are considered key swing states in this year's presidential election.)

 

Approximately one-third of all registered voters in those three states can still be swayed by political messaging, notes the study. These voters comprise the so-called “Opportunity Vote.”

Radio has the deepest reach in this electoral group. In Virginia, Colorado and Texas, radio reaches 93.2% of the Opportunity Vote, more than any other medium.

Texas and Virginia are states that hold strong delegate counts, making them essential for candidates to rack up enough delegates in the race to the conventions.

Broadcast TV and cable TV each impact 89.9% and 89.8% of those persuadable voters, respectively. Desktop reaches 87.8% of the Opportunity Vote and mobile 64.4%.

About one-third of the Opportunity Vote tune into radio significantly more often than they watch TV, listening to roughly two hours of radio daily compared to less than one hour of TV.

Despite strong media focus on TV ads, radio ad spend this cycle is expected to exceed $800 million.

 

 

LPTV Stations May Soon Go Off The Air

Misael Virgen / San Diego Union-TribuneMichelle Diaz Agha and her husband, Maxwell C. Agha, own KSDY-TV Channel 50, a small station in San Diego that could be one of many knocked off the air involuntarily by the federal government.
  TVNewsCheck

by Jim Puzzanghera

Los Angeles Times, February 17, 2016 6:36 AM EST

But KSDY-TV Channel 50 and many other small, low-power TV stations, which often broadcast foreign-language and religious programming, soon could be silenced — knocked off the air involuntarily by the federal government with no compensation to their owners or alternatives for their often low-income viewers.

The stations are the potential collateral damage of an ambitious attempt, set to begin next month, to transform the public airwaves for the mobile needs of the 21st century.

The Federal Communications Commission plans to use a complex auction to shift a huge swath of public airwaves from carrying TV signals to delivering wireless services to smartphones and other data-hungry mobile devices.

Because of that effort, the Aghas could face the prospect of spending millions of dollars more to keep their station on the air by moving to another channel — if one is even available after broadcasters are squeezed into a smaller chunk of the radio-wave spectrum.

If there is no free channel available, KSDY would go dark.

"They awarded these licenses and asked people to invest and now they say they can just take this and auction it and keep the money," said Maxwell Agha, chief executive of International Communications Network Inc., which owns the station. "It's a totally unfair process."

The two-part auction, which begins March 29, aims to attract some of the nation's 1,782 full-power broadcasters and 405 specially licensed Class-A low-power stations to give up their rights to those airwaves in exchange for a cut of the proceeds paid by wireless providers for licenses to use them.

The auction could produce as much as $40 billion in new licensing fees from AT&T Inc., Verizon Communications Inc. and other wireless providers. Proceeds of even half that could lead to a jackpot of hundreds of millions of dollars to some TV station owners who decide to give up their airwaves.

But the auction could be a disaster for many of the smallest players in the broadcast world and their viewers: the 1,822 standard low-power TV stations.

"It's catastrophic," said Ravi Kapur, who owns a Chicago low-power station and founded a network that airs South Asian programming on low-power stations in Los Angeles and Houston. "These stations will go off the air and there will be a whole lot of calls to the FCC and members of Congress and it will be too late."

The FCC created low-power TV licenses in 1982 "to provide opportunities for locally oriented television service." The stations are limited in their signal power, allowing them to broadcast on unused patches of the airwaves as long as they don't cause interference with full-power stations.

Because they are easier to obtain and less costly to run, low-power TV stations have a much more diverse ownership.

About 15% of the stations were owned by women, 10% by Latinos and 1.3% by blacks, as of 2013, the most recent FCC data available. That compares with 6.3% of full-power stations owned by women, 3% by Latinos and 0.6% by blacks.

It's catastrophic. These stations will go off the air and there will be a whole lot of calls to the FCC and members of Congress and it will be too late.

The FCC is obliterating the most successful program they've ever implemented to diversify media ownership," said Kapur, who runs Diya TV, which is billed as "America's first 24/7 South Asian broadcast television network."

The auction rules highlight that low-power stations are second-class citizens in the broadcast world.

Unlike full-power station owners, low-power broadcasters won't get any of the auction proceeds. Low-power TV station owners also are ineligible for the $1.75 billion in federal money set aside to help broadcasters who want to stay on the air pay for the new equipment needed to move to another channel.

In addition, the auction could cause thousands of other viewers to lose not just low-power signals but all over-the-air TV.

Residents of rural areas, valleys and other locations that are difficult for broadcasts to reach are at risk because hundreds of signal-boosting transmitters, often owned by local governments, also could be pushed off the condensed broadcast airwaves.

"There are places where that's going to be devastating," said Michael Couzens, a communications attorney who does work for San Bernardino County.

The county has five special taxing districts that own and operate TV towers with translator stations that extend Los Angeles broadcast signals. "Many of the places we serve do not have cable because they're too sparsely populated to lay the cable to," Couzens said.

FCC Chairman Tom Wheeler has called low-power TV "an important voice in the community," and the agency has taken steps to help stations, including translators, stay on the air.

Those measures include permitting stations to share channels, using special software to squeeze as many channels into the remaining spectrum as possible and allowing stations to stay on auctioned airwaves until the buyer is within 120 days of using them.

See the most-read stories this hour >>But physics, math and federal law still pose major obstacles.

There's a finite amount of public spectrum, so condensing it means channels for fewer stations, particularly in urban areas such as Southern California. Adding to the complications are the FCC's plans to set aside some additional broadcast spectrum for use by Wi-Fi-enabled devices.

Low-power broadcasters are not allowed to cause interference with full-power TV signals, further limiting their options.

The auction will cost the low-power TV industry about $1 billion in additional spending and lost investment, said Mike Gravino, director of the LPTV Spectrum Rights Coalition, which advocates for the industry.

Some low-power broadcasters have gone to court to challenge the auction rules. And the potential problems of low-power TV have raised concerns in Congress.

"The owners of these stations do provide a service," said Rep. Joe Barton (R-Texas), who asked the Government Accountability Office to study the auction's effect on them. "They are licensed. They have invested their own money."

Barton said Congress might need to pass legislation to help low-power stations if the auction produces major problems.

At KSDY in San Diego, the Aghas are worried about the sliver of the airwaves they use to air programs such as "It's Your San Diego" and "The Go Navy Show" on Channel 50, as well as Latino and religious shows on three digital sub-channels.

"The government wants to take it and raise a lot of money and we're not going to get a dime of it," Maxwell Agha said.

He and his wife are particularly frustrated because their station already has spent millions of dollars to move its channel, which is further complicated because it has to avoid interference with U.S. and Mexican broadcasters.

KSDY started out on Channel 61, but the FCC forced all broadcasters to move below Channel 52 as part of the transition to digital TV that began in the late 1990s. The Aghas said they conducted expensive engineering studies and were awaiting approval to move to Channel 38, but the Mexican government grabbed that channel.

They applied to become a Class-A station, which would have given them a greater chance of finding a new channel and federal compensation to make the move. But the FCC denied the application in 2014.

"We are a minority-owned business and community-based," said Michelle Diaz Agha, chief operating officer of International Communications Network. "All we want at the end of the day is to be the voice that we've been working for and investing in."

Local Super Bowl advertising at a glance

Medialife

Automotive was the No. 1 category in the top 100 television markets

 

By Bill Cromwell

February 12, 2016

        

By now the Super Bowl’s national ads have been dissected to death.

So how about a glance at the local ads that ran during the game?
Priced substantially lower than the $5 million pricetag attached to CBS’s national broadcast, local Super Bowl advertising is nonetheless a high-demand commodity.

Each affiliate got about 5 minutes of time, according to Kantar Media, which analyzed data from the top 100 markets.

It found similarities in the top ad categories between the national and local advertisers, with automotive a big one. Seventy-eight markets had an auto ad, with Ford the most common buyer, followed by Toyota and Chevrolet.

Interestingly, Ford and Chevrolet did not air ads in the game nationally.
Sixty-one markets had restaurant ads, from 29 different brands. Jack in the Box had the biggest presence, with 17 ads, followed by Arby’s and Carl’s Jr. at 10.

Kantar noted that in smaller markets, hospitals and medical clinics had more ads.
Of course, the game took place just days before the New Hampshire primary and weeks before the one in South Carolina, and that was reflected in the advertising. Thirteen ads in South Carolina were for presidential candidates.

Analyst To National TV Ad Market: You're Not Dead, Yet

 

• by Joe Mandese @mp_joemandese, February 12, 2016, 8:09 AM 

In a sign that the national TV advertising marketplace may have more legs than its cynics believe, a top Wall Street analyst issued a report this morning “defying the notion” of a “permanent secular decline” for TV’s share of national ad spending. In fact, the analyst --  Pivotal Research Group’s Brian Wieser -- estimates that the national TV ad marketplace rose as much as 7% in the fourth quarter and as much as 2% for calendar 2015, despite being compared to an Olympic and election year in 2014.

 

After adjusting for the so-called "quadrennial" effect, Wieser estimates the "normalized" growth for that national TV industry in 2015 could be as much as 3% -- which, while modest, is far from the "doom and gloom" projected by most investors and analysts over the past couple of years who predicted the expansion of media options and the erosion of TV ratings would also erode the TV advertising marketplace.

 

“These results reinforce our view that changes in viewing and ratings have only a limited effect on ad spending,” Wieser writes in the report, entitled “A Funny Thing Happened On The Way To The TV Advertising Funeral.”

 

“Demand is mostly independent of supply,” he continues, adding “although networks with relatively more supply are better-positioned to capture demand. We believe this is because for advertisers, ad budget decisions focus on least-bad alternatives. For those seeking broad reach, sight-sound-and-motion and brand awareness, traditional TV still utterly dominates all alternatives despite the growth of digital media owners and increasing consumption of video on internet-connected devices. This advantage will hold for many years. Digital media owners such as Facebook can offer reach and frequency, but in lieu of spending on content which brands will want to align their products with, mere reach and frequency won’t do. Of course, brands may alter their strategies and goals and shift TV money to Facebook, but that is another matter and one which takes longer time frames to play out.”

 

Despite the relatively strong end of 2015, Wieser predicts that 2016 will not be an “easy” year for the national TV ad marketplace.

 

“We do think that national TV should have a good upfront, with low single digit volume growth and high single digit pricing,” he says. “But investors shouldn’t expect that national TV can do much better than the total market for advertising will do, which should see +2 to +3% growth once again (ex-political and incremental Olympic advertising). There are shifts of spending from TV to digital on the margins.”-

After 5.6% Q4 growth, Nielsen Likes the Look of 2016.

INSIDERADIO

February 15, 2016

With CEO Mitch Barns calling 2015 “a banner year” with the rollout of Nielsen Total Audience Measurement and other tech developments, Nielsen reported revenue growth of 5.6% on a constant currency basis, compared to the fourth quarter of 2014.

Word came during the company’s results call on Thursday. On a reported basis, Nielsen’s revenue dipped 0.6% in the fourth quarter to $1.624 million, due to the impact of foreign exchange rates.

The company’s audio measurement business decreased 6.9% on a constant currency basis due to the impact of delivery timing during the quarter. “The timing of some deliveries were realized in the third quarter which did not repeat in the fourth quarter,” chief financial officer Jamere Jackson explained Thursday morning, meaning that ratings payments came due for a higher-than-normal number of its clients during Q3. “Our deliveries do not always sync up with the quarterly calendar, causing our audio business to appear lumpy,” Jackson said. That unevenness is evident in how much Nielsen Audio billed in the third quarter ($141 million) compared to the fourth quarter ($122 million). However for the full year 2015, the company’s audio business grew 1.2% on a constant currency basis.

“In 2015, the highly profitable audio business delivered low-single-digit revenue growth, outstanding margins and strong free cash flow,” Jamere said.

Nielsen’s Watch segment, which includes its radio and TV measurement business, grew 5.2% during the quarter on a constant currency basis to $745 million. Video and text audience measurement revenue was up 7.6%. Marketing effectiveness, the division that produces ROI studies for media buyers and sellers through Nielsen Catalina Solutions, grew a whopping 31.3%.

Nielsen reported full-year 2015 revenues of $6.172 billion, down 1.8% due to the impact of foreign exchange rates, but up 5.0% on a constant currency basis, compared to 2014.

“[2015] was a banner year for our company with the rollout of Nielsen Total Audience Measurement, new client wins across both our Watch and Buy segments and the launch of the Nielsen enterprise marketing platform driven by our acquisition of eXelate,” Barns said. “We look forward in 2016 with confidence.”

CBS Radio Eyes 2016 Political Ad Profits.

After changing its radio management team last year, CBS is eyeing 2016 as a year of expanded profit margins and revenue growth for the division, aided by what it sees as a record year for political advertising. “You will see radio build sequentially,” COO Joe Ianello told investors yesterday during the company’s fourth-quarter earnings call.

Political dollars will be a primary driver of that growth, he said. And while radio won’t see the enormous election cash infusion that the company’s local television stations are likely to generate, “there will certainly be a benefit” for the radio division, Ianello said.

During a call dominated by talk about the media giant’s top-rated network TV business and new initiatives such as the All Access video-on-demand streaming service, Ianello reminded investors of what radio brings to the table as a “low capital intensive business” that generates “significant cash flow.” He also revealed that CBS adjusted the book value of its radio business, taking a non-cash impairment charge of $297 million in the quarter, net of tax. “This is an accounting move that doesn’t limit our belief in the business as a high margin vehicle that throws off a lot of cash for our shareholders,” president, CEO and newly named chairman Les Moonves explained.

CBS posted its highest-ever quarter in revenue, up 6% to a record-setting $3.9 billion, which the company attributed to higher content licensing and distribution revenues and a 1% increase in advertising revenues. “We had a terrific fourth quarter, and CBS is now in position to build strong momentum throughout 2016,” Moonves said.

Local broadcasting revenues declined 8.4% to $719 million during Q4, with CBS Television Stations down 11%, and CBS Radio off 5%. Lower political advertising was a factor for both divisions.

For the full year, total CBS revenues grew 1% to $13.89 billion, driven by a 15% increase in affiliate and subscription fees, reflecting higher rates, as well as increased revenues from pay-per-view boxing events. Advertising revenues decreased 3% for the full year.

 

 

 

Why TV Executives Are Bullish On the Ad Market

The Wall Street Journal

Quarterly results are heartening; ‘scatter’ ad pricing is mixed blessing

The cast of "Grease Live!" Photo: Kevin Estrada/Fox     Feb. 11, 2016 4:48 p.m. ET

    By Steven Perlberg

                      

Amid the many challenges swirling in the TV industry -- ratings in the doldrums, cord-cutting, skinny bundles, pressure on affiliate fees -- the advertising market continues to be something of a bright spot.

Big media companies continued to report pretty decent ad revenue growth in the most recent quarter. Time Warner Inc. TWX -0.10 % on Wednesday said its advertising revenues in the period increased 5%. Domestic ad revenue at 21st Century Fox FOX -0.16 % ’s cable networks division grew 3%. At Comcast, CMCSA 1.32 % NBC broadcast revenue was up 7%. NBCUniversal cable networks’ ad revenue dropped 9.3%, but excluding political revenue it increased 2.8%.

Bernstein estimates that Disney DIS 0.93 % ’s advertising revenue rose 14%. The company said advertising revenue at ESPN was up almost 25%, thanks to college football bowl games and a strong sports advertising marketplace. Viacom VIA 0.74 % ’s ad revenue was down 4%, but that was better than Wall Street analysts generally expected from the struggling media company.

Those aren’t necessarily stellar figures, but media executives during recent earnings calls still took time to laud the health of the “scatter,” or year-round market for advertising, as they have done in recent quarters. Executives also suggested the advertising market would continue its momentum into the summer “upfront” marketplace, where networks and marketers negotiate ad time ahead of the fall season, unlike last year’s tepid results.

At times during the various calls, it seemed as though executives were reading from the same script.
“We are seeing pricing in the scatter market over the last upfront in the neighborhood of 20%. So that bodes very well for the upcoming upfront,” said Viacom Chief Executive Philippe Dauman.
“With scatter pricing pacing up double-digits versus the upfront... every indication points to a very strong upfront this year,” said Howard Averill, chief financial officer of Time Warner.

“I think the scatter market is as strong as it’s been any time in recent memory and when we went through the upfront, we were wondering -- everybody was wondering -- is more money going to digital and is that depressing the upfront or are advertisers just waiting?” said NBCUniversal CEO Steve Burke. “Now appears given that scatter has been strong now so consistently, that a lot of advertisers were waiting and placing their money later.”

Understanding the underlying strength in the scatter market isn’t so simple. As a result of pervasive ratings declines, networks have for months owed advertisers “make goods,” or free ad time to compensate for the shortfall. As a result, there has been less advertising inventory to go around, and that lack of supply has driven scatter prices up.

“There’s definitely a lot of scatter activity in the marketplace,” Dave Campanelli, director of national TV at ad buyer Horizon Media. “The pricing that’s coming out of it is somewhat artificially high.”
Pricing is one thing -- and volume (the overall quantity of sales) is another.

Ad buyers say scarcity is the chief driver of higher pricing in scatter, and they are dubious that those economics will compel marketers to spend more during the next round of upfront negotiations. Marketers these days want to hang on to budgets for longer, even if that means having to pay a larger premium in the scatter market than they had hoped for, buyers say.

There may be another factor at work. Some marketers who moved money out of television in favor of digital spending are having doubts about the efficacy of their advertising on those new channels, ad buyers say. A handful of issues plague the online advertising space, such as bot traffic and “viewability,” or the extent to which ads that are served on webpages are actually seen by the human eye.

“There’s no doubt about it. This whole viewability issue has obviously taken root,” said Rino Scanzoni, chief investment officer of GroupM, the largest ad-buying firm in the world. “Clearly when you factor in fraud… that takes a lot of real impressions out of the equation in digital.”
Mr. Scanzoni said there “probably has been a movement back” from digital and into television by marketers, but that it’s not enough to have caused the rise in scatter pricing, which he attributed mostly to scarcity. Marketers may also decide to be more careful with their spending during the upfront due to questions about the stability of the global economy and the turbulent stock market, he said.

Mr. Campanelli said that traditional TV companies can reap revenue from digital spending, too, on their various sites and apps on over-the-top devices.

“The shift in consumption to digital or video-on-demand doesn’t mean that people are not watching ABC content and now they are only watching YouTube. They are still watching that content on other platforms,” he said. “Digital spending doesn’t mean spending away from traditional media companies all the time.”

Advertisers will spend about $72.7 billion on television this year, compared with $67 billion digitally, according to an eMarketer estimate.

This spring, networks will hope to dazzle marketers with their slates of new shows during the upfront presentations in the hopes that they will open their wallets come summer. The open question will be whether marketers will pony up like media executives are anticipating.