As Facebook Pushes Political Ad Transparency, Will Linear TV Seek More?

• by Wayne Friedman , Staff Writer, Yesterday

Facebook will now require buyers of political ads to make all ads available for public review, much like traditional linear TV -- which is required by federal regulations.

But should things be even more transparent -- even for TV?

There are some protections for consumers when it comes to political TV advertising. During the political message, candidates need to reveal who is taking credit for specific TV advertising -- and for any super PAC advertising.

That said, many organizations have vague political and aspirational names on their TV messaging. TV broadcasters are supposed to have full public files on these accounts. But specific information can be lacking.

And while many of these TV ads are specifically regulated, they don’t reveal much — the name of the organization, who is responsible for buying the spot and principals of that organization. But not much else -- especially when it comes to the actual money behind a super PAC.  

Can a foreign-backed political message infiltrate TV advertising airwaves? It sounds possible.

TV networks have long had a standards-and-practices staff for TV commercials. But much is done through human analysis of those spots — something digital media has long avoided in its algorithmic-focused and increasingly self-service advertising business.  

Until now.

Mark Zuckerberg, chairman/CEO of Facebook, says social-media political advertising on the site will dramatically change. That decision came in response to the realization that thousands of Russian-backed social-media ads, via fake accounts, were disseminated on the social network.

Facebook’s efforts mean that users will be able to click on an ad targeted to them and see what other kinds of messages the political advertiser is using to target them -- as well as key information, like disclosing the funding behind the political ads.

In the future of addressable TV advertising, this would be an area traditional, linear TV viewers would also want -- and not just with political advertising, but all types of advertising.

With the 2010 Supreme Court decision in the "Citizens United" case, the regulatory doors opened wide for a big influx of political advertising on TV stations -- and the growth of super PAC advertising.

Going forward -- with the collateral damage around Facebook and fake Russian social-media advertising and fake accounts still rising -- will these changes have a spillover effect on TV?

Kagan: Radio Revenue Will Decline This Year

Radio Ink

September 19, 2017

According to SNL Kagan’s latest annual outlook, radio revenue will decline 0.3% in 2017 to $17.65 billion, down from $17.7 billion in 2016. Kagan says increases in digital and off-air sales will help offset declines in national and local advertising. And even with the return of political in 2018, the firm is only projecting an increase of 1.3% for radio, to $17.89 billion. Here’s how Kagan breaks down the numbers for 2017 and beyond…

Kagan says national revenue is expected to decline 3.0% in 2017, due to political comps from 2016. Local revenue will decline 2.0% in 2017 based on a somewhat strong second quarter and auto dealers looking to move inventory. Kagan also says local will benefit from improving ad rates, with lower average-unit-rate political spots being displaced by higher-priced core advertising. Digital will grow by 7.0% in 2017 to $1.18 billion from $1.10 billion in 2016, growing to $1.25 billion in 2018. Off-air revenue will increase by 8.5% in 2017 to $2.41 billion and 6.0% in 2018 to $2.55 billion.

By comparison, BIA Kelsey is projecting 2017 over-the-air revenue for radio at $14.2 billion in 2017 (+0.1%) and $14.3 billion in 2018 (+0.9%), and digital revenue of $1.3 billion (+9.7%) in 2017 and $1.43 billion in 2018 (+10.3%).

Kagan says programmatic, digital, and live events will help the industry grow over the next five years. “Radio’s lower ad cost, local audience, and relatively high return on investment compared to other media will also continue to generate business for station owners.”

Between 2017 and 2022, Kagan is forecasting radio station local and national spot ad revenues (including digital) in rated radio markets to increase at a compound annual rate of 0.9%, with non-rated markets declining at a negative CAGR of 0.9%. “Total radio revenue, including national and local spot, digital, off-air, and network revenue, is expected to grow at a five-year CAGR of 1.1% from an estimated $17.65 billion in 2017, reaching $18.60 billion by the end of 2022.”

Philip Jay LeNoble, Ph.D. of Executive Decision Systems Inc. Littleton, Colorado implores station managers and owners to include local-direct revenue training, development and execution in order to save and grow net margins. The report below is mostly transactional revenues

Random Thoughts On The New TV Season

Commentary

• by Steve Sternberg , Featured Columnist, Yesterday

Promotional Malpractice: As I was watching the Emmy Awards, which aired on CBS, I noticed a promo for multiple FX series. I started wondering why there were no promos for ABC, NBC, FOX, or CW.  

 
After all, this is a show about television that gets decent ratings, which is watched by people who are very interested in television, and which is airing right before the new TV season starts.  In other words, the prime target for any network.

Of course, it’s because of the bizarre policy of accepting ads from your real competitors (ad-supported cable networks, premium cable, streaming services), but not from other broadcast networks that, in today’s media world, should be seen as allies.  Broadcast hits like “Empire” and “This is Us” benefit all broadcast networks. It reminds both viewers and ad industry folk that, except for the occasional phenomenon like “Walking Dead,” no venue is capable of attaining the average ratings or reach of a broadcast network.

In what other business does a company refuse to advertise its product to the largest group of customers available?  These aren’t just random consumers the broadcast networks are choosing not to pursue.  These are their prime prospects, whom they know are already watching similar programming, who are at that moment at their most receptive toward receiving a message about other similar TV programs.

There’s simply no question that, were the broadcast networks to promote one another’s new shows, more of them would succeed.  If that’s not promotional malpractice, I don’t know what is.

Netflix Doesn’t Need Disney, but Could be a Real Network Ally:  Disney’s decision to shift its movies including “Star Wars” and Marvel properties to its own upcoming OTT service should not have much impact on Netflix.  While nice to have, Netflix’s success and subscriber base are driven by original content, not theatrical movies that people have already seen (and Netflix’s new deal with Shonda Rhimes is potentially much more significant).  Very few people, if any, will either subscribe or leave because of any deal for acquired programming.

There are so many shows on television these days that people often don’t even become aware of a new show until the first (and sometimes subsequent) season is well underway.  For example, after its first season ended, my wife and I had heard that NBC’s “The Good Place” was worth watching.  We recently saw it was available on Netflix, so we binged the entire first season over two nights.  Now we plan to watch the second season on NBC.

The networks should be promoting the idea of catching up with new shows from the previous season on Netflix or Hulu, and then watching the new season on the network.

Streaming Services Should Experiment With Network Deals:  Wouldn’t it be interesting if Netflix made a deal with a broadcast or cable network to air the first season of “House of Cards,” “Orange is the New Black,” or “Daredevil” during the summer?  Or Hulu airing the first season of “A Handmaid’s Tale” on HBO?  It would serve as great promotion (and additional revenue) for the streaming service and provide the network with original summer programming.  Or, once CBS All Access has three seasons of “The Good Fight” or its new “Star Trek” series, air the first season on CBS (or Showtime) over the summer.  As the broadcast networks are struggling to figure out how to best get into the OTT game and monetize the platform, this could be something worth considering.

The Best New Season TV Series:  ABC’s “The Good Doctor” and “The Mayor,” along with CBS’ “Young Sheldon,” are the standouts.  I haven’t seen the full pilot for FOX’s “The Gifted,” but the clips I’ve seen are promising.  The pilots for ABC’s mid-season series, “For the People” and “The Crossing” also looked good.

TV Stations' Ad Revenues Forecast To Sink 6.5% In 2017

Below is largely transactional business, that which majority of stations depend. The probability is that  we will see a continuum  of declines as we move into the new year. Managers and owners should stress local-direct training, development and execution in order to best protect net margins. Philip Jay LeNoble, Ph.D.

• by Wayne Friedman , Yesterday

U.S. TV stations’ total advertising revenues are estimated to record a 6.5% decline to $21.38 billion in 2017.

According to SNL Kagan, a unit of S&P Global Market Intelligence, this is somewhat expected, due to unfavorable comparisons to the year before, which saw higher political and Olympic TV advertising.

Results are expected to show recovery next year -- rising 9.6% to $23.4 billion. Midterm political advertising and Olympic advertising sales are expected to contribute to the spike.

Through 2022, Kagan projects that TV stations will grow advertising revenues 3% on a compounded annual rate to $24.8 billion -- which includes linear TV advertising, both national and local, as well as digital TV advertising revenue.

Over the next five years, Kagan says, declines are expected to continue during off-Olympics and off-political years -- with a 5.3% decline in 2019 and a 6.3% pullback in 2021.

Going forward, TV stations’ linear TV advertising share is expected to continue to shrink as part of their total revenues. National and local spot ad revenues -- including political advertising -- will fall to a 59% share in 2022. It had been 94% of total TV station revenue in 2007, and 62% in 2017.

At the same time, revenues from retransmission fees paid to TV stations from pay TV providers are expected to rise. Retrans revenues are predicted to rise from just over a 1% share of industry revenue in 2007 to 30% in 2017 and 33% by 2022.

By the end of 2022, total TV station industry revenue is expected to reach $37.19 billion -- $19.08 billion in national and local core spot; $2.72 billion in political advertising; $2.99 billion in digital/online; and $12.40 billion in retransmission fees.

Advertisers To Upfronts: More Info On Content, Cross-Platform Data

Wednesday, September 20, 2017

• by Wayne Friedman 

Advertisers want more from upfront/newfronts TV and media presentations.
Top two content demands include “better ways for advertising effectiveness” and “cross-platform measurement.” Each earned a 36% number, according to a survey by Advertiser Perceptions, looking at this past spring’s presentations.

Other major topics that advertisers want to hear more about -- especially from digital platforms -- are viewability (31%); fraud, brand safety (30%); and audience reach, composition and engagement (29%).

This past upfront period saw declines in attendance at the Newfronts -- due to the pullback by some digital media companies -- as well as a few traditional TV network companies that abandoned glitzy upfront events. They opted for smaller meetings with media agencies and their ad clients.

Among digitally focused advertisers, the topic of cross-platform measurement topped the list (37%); “strategic partnerships” were the most cited by TV-focused advertisers (52%).

On average, advertisers attended 12 events in person or via simulcast, according to the survey.
Advertiser Perceptions interviewed 373 advertisers -- 54% media agencies, 46% advertisers -- during May and June 2017, representing 16 industry categories, with 33 of the top 200 advertisers and 49% holding positions at VP level or above.

Why Amazon Is The New Google For Buying

Commentary

• by Scott Gillum , Op-Ed Contributor, September 14, 2017

They’re called the “duopoly” of online advertising. Facebook and Google account for 75% of the U.S. digital ad spend — and almost all of its growth, according to the Interactive Advertising Bureau.
Facebook reported 45% growth in the last quarter and Google’s parent company Alphabet posted earnings of $26 billion, 87% coming from advertising revenue.

But are these behemoths about to be blindsided by a fierce competitor with a better ROI?
A consumer research study for a beverage manufacturer uncovered an interesting trend, one that might tip the scale for advertisers. Consumers who had an Amazon Prime account started their search for a purchase at Amazon 100% of the time. If they knew what they wanted to buy, they went directly to Amazon to search for different brands with the best price and delivery options.

With 85 million Amazon Prime members as of June 2017, it’s not going to take long for consumer brands to discover that if you want to invest ad dollars in finding buyers with high purchase intent and conversion rates, Amazon is going to be hard to ignore.

Although its ad business is small in comparison to Google and Facebook, with only 1% of global ads, it actually is one of Amazon’s fastest growing areas, now on track to generate close to $2 billion this year.

Amazon also offers organizations a broad spectrum of advertising products, ranging from its ad platform offering mobile and desktop display and banner ads, to dynamic and coupon ads. Customer campaign pages allow advertisers to create immersive cross-platform landing pages that can display more than one product.

With the digital ad market predicted to grow at 16% this year to $83 billion according to eMarketer, the Facebook-Google duopoly will get its fair share, and almost all of the attention, especially considering the growth of Facebook’s Snapchat ad revenue, up 158% in the past year. And that may be just how Amazon likes it. It has a history of sneaking up on competitors. Just ask Microsoft and IBM about Amazon Web Services (AWS).

Andy Jassy, the AWS CEO, said that in some ways the growth of his business was a classic case of disruption dynamics. “The competition simply didn’t believe there was enough of a market to worry about it. The dominant players don’t have any reason to worry about someone attacking the bottom of the market.” AWS now owns a third of the cloud infrastructure services market, more than three times that of its next closest competitors.

Amazon seems to follow Al Pacino’s “never let them see you coming” advice from “The Devil’s Advocate.” But one ad executive — Sir Martin Sorrell, WPP’s CEO — has noticed. In a recent interview with Bloomberg said, Sorrell said, “The company that would worry me if I was a client — or I think worries our clients, more than Google and Facebook — is Amazon.”
Smart ad dollars follow consumer behavior — and, as we just learned, those consumers are headed to Amazon.

The Numbers Don’t Lie

Radio Ink

By

Bob McCurdy

September 17, 2017

(By Bob McCurdy) We have long known that radio does a terrific job of getting listeners to act on the commercial messaging they have heard on-air. Nielsen has empirically quantified these listener actions, concluding that, on average, radio delivers a $10 return for every $1 invested. That’s a pretty good ROAS.

At the recent Radio Show, a study was unveiled that again reinforces and quantifies radio’s ability to get listeners to take action.

It has long been said that “offline” sets the table for “online,” and we saw another example of just how true that statement is when Jim Spaeth and Alice Sylvester of Sequent & Partners and Philippe Generali, CEO of Media Monitors, presented their findings.

The study was conducted June-July of this year and involved the top 31 PPM markets and analyzed 250,437 commercial instances from the jewelry, wireless communications, automotive, e-commerce, insurance, and auto aftermarket category verticals.

Google trend data, along with Media Monitors data, served to quantify actual minute-by-minute search volume for specific keywords across these markets. Every advertiser analyzed generated incremental search due to radio advertising. This fact in and of itself was not surprising, but some of the search lift generated by radio was quite extraordinary:
Jewelry: +370%
Insurance Company #2: +73%
Retailer #2: +65%
Retailer #1: +31%%
Insurance Company #1: +26%
Wireless Communications Company: +18%
E-commerce Company: +9%
Automotive OEM: +7%

Not surprisingly, the study also found that creative plays a big role in generating search, with ads in the top two performing quintiles out-performing the +29% average by more than 2x and 7x respectively.

And as would be expected, “price promotions” and “sales events” drove considerable incremental search but so did localization/calling out specific locations. The importance of localization also came to light in studies conducted by Katz/Ipsos in 2012 and 2015. Consumers clearly respond more favorably to messaging from advertisers who have made the effort to localize commercials, not airing one creative execution across multiple markets.

Another key fact of note was that the authors were able to tease out incremental radio and TV search impact for one advertiser in the study, an insurance company, determining that radio easily out-performed TV (+73% for radio vs +16% for TV), concluding that buck-for-buck radio drove +228% more incremental search than TV.

There have been other studies that support radio’s search impact over the years.

Earlier this year Westwood One published the results of a study conducted for a major motorcycle manufacturer demonstrating that those exposed to the advertiser’s commercial expressed a +33% increase in the likelihood of visiting the manufacturer’s website.

In 2013, Arbitron conducted a study titled “Project Rushmore” on behalf of the OAAA (Outdoor Advertising Association of America) and found that, dollar-for-dollar, radio stimulated 3x more search activity than TV and almost 2x that of newspapers/magazines.

Katz/Ipsos also found the same phenomenon in the research conducted for Macy’s, GEICO, Kohl’s, Toyota, Allstate, Staples, Burger King, Cracker Barrel, and others. After exposure to a radio commercial, respondents were asked if they agreed with the statement, “The radio ad made me want to search for more information about the product,” with 51%, on average, responding positively.
In 2011, Google/Ipsos conducted a study titled “The Mobile Movement Study,” finding that radio was the equal of TV in generating search (cost was not factored in) and greater than newspapers/magazines.

Finally, guess who said this way back in 2006: “Radio promotes online conversion such as search and online purchases.” Google CEO Eric Schmidt.

Do radio listeners not only hear but act upon radio commercials? Evidently so, as you can’t “search” for what you have not heard.

We met with a number of cutting-edge companies at the NAB that are in the process of providing the radio industry with unprecedented performance data that will enable us to go toe-to-toe with any of the digital companies, audio or otherwise.

It is an extremely exciting time to be in radio and the best is yet to come.
Bob McCurdy is The Vice President of Sales for The Beasley Media Group and can be reached at bob.mccurdy@bbgi.com