Big Media Companies To See Key Revs Rise Alongside Ad Gains

The message below should be a good reminder that long-term, local-direct revenues are the primary growth area for years to come. General and Sales Managers need to enhance their sales teams with sales training which focuses on new local business. Philip Jay LeNoble, Ph.D.

MediaDailyNews

by Wayne Friedman, 

Friday October 18, 2013Major TV-centric media companies will see continued lower share exposure to national TV advertising revenues in future years -- all as retransmission, affiliate fees and other revenues steadily climb.

A recent report from MoffettNathanson, an independent equity research firm covering media stocks, says that by 2015 Viacom, CBS, Discovery Communications, Time Warner, Walt Disney, and 21st Century Fox will derive around 30% of their overall revenue from national TV advertising efforts.

Viacom is estimated to have 31.1% of its overall revenue coming from national TV advertising; CBS, 29.0%; Discovery, 28.3%; Time Warner, 18.3%; Disney, 14.6%; and Fox, 14.4%.

For newer and smaller publicly traded companies -- Scripps Networks Interactive and AMC Networks -- the national TV ad levels are higher. Scripps will get 60.9% of its overall revenue from national TV advertising and AMC will pull in 41.1%.

Other revenue sources are growing. MoffettNathanson says retrans fees' compound annual growth rate will be around 10% between 2010 and 2015 -- three times that of advertising gains during the same period, growing at 2.2%. It is estimated that these carriage fees will be 30% of aggregate revenues by 2015, up from 20% this year.

National TV advertising as a percentage of overall companywide advertising will also drift down.

In two years, CBS will be at the low end for most major media companies -- getting 57% of all advertising from national TV, with 55% of that total coming from broadcast, and 2% from cable. (This estimate leaves out outdoor advertising revenues.)

Discovery Communications will get 55% of its all its advertising from cable TV while Fox will have 61% (35% from broadcast, 26% from cable); and Disney, 81% (50% from broadcast; 31% from cable).

Others will be at higher national TV advertising levels, with all of it coming from cable TV advertising: Time Warner (without publishing advertising) estimated to be 84% of all advertising; Viacom, 91%; Scripps, 92%; and AMC, 100%.

National TV’s share of the total U.S. advertising market in 2012 was at 28% with national cable TV advertising’s share at 17%. These share levels have been fairly constant since 2009, says the company.

Other equity researchers have noted that CBS will continue to reap benefits from carriage/retrans revenues in the coming years --- pulling in just over $2 billion for its own stations and from a share of its CBS affiliates by 2020.

MoffettNathanson says that in the next few years, national TV advertising spending will grow in line with gross domestic product growth -- with national cable TV advertising climbing faster than broadcast TV all from expected weakness in broadcast ratings. It also estimates by the end of 2013, U.S. advertising spending will “likely be close to about 1% of GDP”.

How To Keep Your Top Sales Performers

HowToKeepYourTopSalesPerformers

TVNewsCheck 

Companies readily acknowledge that it is their sales teams that bring in the revenues and generally have the best relationships with the clients responsible for these revenues. So, why are companies so willing to set up situations both in management and compensation that can demotivate the very people on whom company prosperity depends?

By Mary Collins

September 20, 2013 5:43 AM EDT

“You can’t cut your way to prosperity.”  This is a phrase I’ve heard in many a budget meeting and long before President Obama began using it in conjunction with the Sequester. In the short term, cuts can bolster the bottom line.
Over the long term however, delaying or eliminating investments in your business can cut your competitive advantage. This is as true for media businesses as it is for those in other industries.

Another old saw that is probably more true in media than in other businesses is “Every night our most important assets walk out the door.”  And, companies readily acknowledge that it is their sales teams that bring in the revenues and generally have the best relationships with the clients responsible for these revenues.

So, why are companies so willing to set up situations both in management and compensation that can demotivate the very people on whom company prosperity depends?

I’ve been thinking about this a lot lately because like you, I oversee a sales team and because it’s the time of year when I’m looking at budgets and the beginning of our new fiscal year. That, combined with the memory of how difficult it was to hire a new sales executive last year, made two articles in the July-August issue of our member magazine, The Financial Manager (TFM), catch my eye.

The first is written by Chuck Kirkham, VP of sales for media rep firm Canadian Primedia Sales & Marketing, looks at ways to develop effective compensation plans for sales professionals. In the second, Barbara Kurka, principal of BFK Coaching and a former HR exec for Katz Media, suggests strategies for retaining top sales talent in what has become an increasing competitive market. Spoiler alert: it’s not just about the money.
Re-Examining Sales Incentives 
According to Kirkham, who has worked in media sales and management for about 30 years, sales incentive programs too often focus on the stick rather than the carrot.
To illustrate his point, he describes the sales incentive programs he has encountered over the years, which range from a straight commission to a combination of salary and bonus. “One company that put a cap on the amount of commission a sales person could make is out of business. Other companies offered heavy bonus programs, and they are still in business but have been close to bankruptcy a few times. And a third group of companies that employed a certain three-step process to increase sales are actually growing.”

Kirkham’s three-step process comprises:

• Defining the percentage of the product’s price the company can afford as the cost of sale.
• Defining which elements are to be covered by this cost of sale — such as salary, commission, benefits, travel, entertainment and a car.
• Focusing on commission, “the sole dynamic cost” compared to the other two elements, which represent fixed costs.

In his experience, some companies implementing sales incentive programs that incorporate these three elements have added other dynamic costs into the compensation equation. Two common adjustments have involved accelerating commission rates or offering bonuses that are paid when specific sales objectives are achieved. He warns these variations can actually decrease sales for the company, because they create two disincentives to sales executives.

“First, if sales executives feel the bonus (or accelerated rate) is not attainable within a specified period of time, they will stop selling and wait for the next attainable bonus period before they start up their efforts again.”

The second disincentive applies when the bonus is attainable. Kirkham notes that in this instance, sales executives are being incented to do just enough to reach their bonus and then stop selling until the next incentive period. “Companies with these bonus programs are encouraging their sales executives to stop selling at some point during the period.”

Another detriment to these types of incentives, according to Kirkham, is they encourage sales executives to control the sales flow in a way that maximizes their financial results rather the company’s. When companies move to counter this by interjecting controls to indicate when it appears their sales executives are manipulating the flow of orders, they create “a vicious circle promoting a lack of trust between both sides.”

Instead, he recommends using a straight-line commission program to erase the stop-and-start pattern by removing the reason for their sales executives to “take a breather.”
He also recommends against companies reducing an executive’s commission rate for the next year because of a concern that he or she is making too much money. In his experience, this practice can turn an incentive into a stick rather than keeping it as a carrot. “If the company has a successful sales executive why hinder their success? A high performer lowers the company’s overall cost of sale — that one sales executive’s fixed costs have not changed while the company’s sales have surpassed budget.” You can’t cut your way to prosperity.

TV Exposure Drives More New Customers To Brands Vs. Digital

MediaDailyNews

by Wayne Friedman,  2013, 

Not all media is created equal when delivery new and old consumers to brands.

In looking at one significant piece of research from a cross platform campaign, TiVo Research and Analytics (TRA) says TV drives more new customers to make sales, while digital media gets more business from existing customers.

When it comes to media exposure via TV, nearly 70% of purchasing household gains came from new customers that were new to the brand and category. Digital media activity gets more sales activity from existing brand customers than new customers.

The cross-media study was done last fall with Comcast Spotlight’s Comcast Media 360, a cross-platform advertising unit that surveyed 735,000 homes for a Starcom MediaVest Group consumer products marketer with consumers exposed to a cross-media television and digital advertising campaign.

Household advertising impressions were matched to TRA purchase data, with purchasing habits tracked for up to 20 weeks after the campaign ended.

The study also says digital media complements TV media; a targeted cross-media campaign produced a 10% sales lift. Nearly two-thirds of those who were exposed by the digital ads had little or no exposure to the TV campaign.

The survey also says higher TV ad frequency drives sales lift -- seven to 10 exposures of a TV commercial were the most effective. TRA says brand advertising from the campaign continue to create a sales lift after the campaign ended. After 20 weeks, sales from the exposed homes surpassed sales from the unexposed homes.

Tracey Scheppach, executive vice president of innovations at Starcom MediaVest Group, stated: “The study shows that cross-platform campaigns and measurement can be implemented at scale, and allow us unprecedented understanding of how multiple screens are working together.”

$70 Billion TV Ad Market Eases Into Digital Direction

Ad Age

Baby Steps Start After Years of Resisting Change

By: 

Alex Kantrowitz

 Published: October 14, 2013

Earlier this year, DirecTV took a step into the future of TV advertising. Rather than let marketers target only shows and geographic markets, it allowed them to zero in on specific audiences -- down to the individual home.

"The way our technology works, I can literally take a 30-second TV commercial, I can insert it into a commercial pod and I can target that commercial to the household level," said DirecTV Exec VP Paul Guyardo. "We don't serve up the impression until we know the TV is on and the viewer is watching," he said. "The show doesn't matter. It's the audience."

Taylor Callery

After years of resisting change, the industry is beginning to sell commercials with an emphasis on precise audience targeting, similar to how ads are sold online. The practice, still in early days, can't yet reach every household and has been primarily adopted by TV-service providers. But the tech has finally arrived, and it's poised to play a big role as the industry gets used to it.

Pushed into it
Until recently, the nearly $70 billion TV-ad industry had excelled at warding off tech-fueled disruption. The benefit of unparalleled reach kept dollars flowing into the category. Add in woefully old-school technology and TV seemed nearly impervious to change.

But then things really started to shift. TV audiences have been fragmenting since the advent of cable, but that process is now in overdrive thanks to hundreds of channels, video-on-demand options and devices. At the same time, spending on digital started growing at a pace faster than TV. Now, the TV industry, or at least parts of it, is turning to advanced targeting to help retain its dominance.

"Over the years, billions of dollars have flowed out of television and into the online space because it is more measurable," said Mr. Guyardo. "We believe that this addressable form of advertising is going to bring money back to television."

Data-driven
Advanced TV targeting, while small, is starting to build momentum. In addition to DirecTV, which claims addressable TV sales now account for 10% of its ad business, providers such as Cablevision and Dish Network offer similar capabilities. "It's very small and growing rapidly," said Tad Smith, president of local media at Cablevision.

And then there's Simulmedia, a TV ad network that does show-level targeting based on audience data. The company reaches 116 million homes, up from 15 million two years ago. "We now out-reach any of the three biggest networks, broadcast and cable, on any given day or week," said CEO Dave Morgan.

Bringing advertisers back in the fold
Targeting technology can boost TV's appeal, especially among smaller advertisers with limited budgets. Auto-parts manufacturer K&N, for example, recently returned to TV advertising after a years-long hiatus. Through Simulmedia, K&N placed spots not only on shows similar to "Top Gear" and Nascar broadcasts, which would seem intuitive for its target audience -- males 25 and older who perform their own auto service. But based on Simulmedia's data, it ran commercials during syndicated episodes of "Buffy the Vampire Slayer" and a 4 a.m. airing of "The Rachel Maddow Show."

"This permits us to target television audiences much more succinctly than we had been able to before," said David L. Smith, CEO of Mediasmith, the agency that worked with K&N on the ad buy. "It's a quantum leap vs. the older ways."

No going back
A world where TV ads are bought and sold through ad exchanges and demand-side platforms seems far away. Many large advertisers will continue to prefer buying in big chunks to reach mass audiences. But what's happening today might be laying a foundation for a future with more options.

Todd Gordon, an exec VP at Magna Global, a media arm of Interpublic Group of Cos., said his agency is already buying a small amount of TV in "an exchange-like platform."

The goal, he said, is to expand the pool of available inventory to include more premium ad space. As part of that ambition, Magna Global created a consortium of industry players this August to further programmatic ad buying.

With recent buy-in from big networks such as ESPN, which joined the consortium last month, automation has the chance to play a much bigger part in the TV industry.

"It's an ambitious goal," said ESPN Exec VP Eric Johnson, of the consortium's desire to move the industry toward more automation. Mr. Johnson added that, in his view, technology doesn't allow large national networks to sell their inventory efficiently.

Seth Haberman, the CEO of Visible World, a tech company that works with Cablevision and others to develop these capabilities, said advertisers are already dedicating percentages of their budgets to buys with advanced targeting. He says it's not a question of "if" but "how much" and "how fast."

"There's no going back," he said.

5 Things You’re Doing That Your Boss Hates

By Catherine Conlan

Monster Contributing Writer

You may think you get along with your boss, but there are several things you might be doing that could make your boss hate you. Make sure you’re not sabotaging your own career by doing any of these things.

1. Asking too many questions.
It’s important to be clear on the instructions your boss gives you on a task or project, of course, but clarifying every little detail shows you lack initiative or confidence to do the job. “People who run into their boss’ office for every little thing create a distraction and annoyance,” says says Todd Cherches, CEO of Big Blue Gumball. This is especially true if it’s something they should know, or could have gone to a colleague to ask.

INSTEAD: Check with your co-workers to see if they can fill in details you might have missed. Pay attention when the boss asks you to do something, and try to find ways to solve problems without having to double-check every step of the process.

2. Answering the wrong question.
“You’re not expected to be a mind-reader, but you are expected to think,” Cherches says. Failing to answer the QBQ -- the Question Behind the Question that your boss is asking -- can irritate a boss looking for information. If your boss asks you questions such as what you have on your to-do list for the day, she may be looking for information about how you are prioritizing your work, how organized you are, or even whether you know what you should be doing.

INSTEAD: When your boss asks questions -- especially if they seem out of the blue -- see if you can answer the question behind the question. Answer the question literally, but read between the lines and try to provide the information she really wants and needs.

3. Creating chaos.
How do you approach difficulty? If a project goes downhill, are you frantically looking for reasons why and finding who’s responsible, or are you exploring solutions? Do you take failure personally? What an employee considers leadership in a crisis might actually look completely different -- “creating unnecessary panic, crying wolf, overreacting emotionally, contributing to rather than reducing chaos,” according to Cherches -- to a boss.

INSTEAD: Take your cue from the office culture, particularly the example your boss provides, when the going gets tough. If others are calm even in the face of difficulty, there is no reason for you to send panicky emails looking for answers. If your boss believes in your team, you can, too.

4. Showing up with problems without solutions.
“This is probably the classic,” says Cherches. If you talk to your boss about a problem or challenge you’re facing and are looking for answers, your boss will likely get fed up pretty quickly.

“Your job is not to create more work for your boss, it’s to create less and to help your boss be successful,” Cherches says. “You are not expected to have all the answers, and you may not be empowered to make the final decision and/or take action. But when you go to your boss, you should come prepared with two or three viable options, the relative pros and cons of each, and your top recommendation.”

INSTEAD: Come up with an action plan you can offer your boss when you have an issue. Even if your boss doesn’t adopt it, it shows that don’t expect someone else to solve your problems.

5. Making your boss look stupid.
Nobody likes to look stupid in front of their peers. You may think you’re avoiding this by not pointing out the flaws in your boss’ bizarre plans during meetings, but there are many other ways you might be undermining your boss’ authority. “This happens when you withhold information, making your boss seem out of the loop and uninformed,” Cherches says. Running late on projects or turning in poor work makes your boss look bad to his boss, as well.

INSTEAD: Keep your boss up-to-date on your progress with projects you’re working on, including details you might not think are important. Bosses generally don’t like surprises; check in regularly so your boss knows what to expect when project milestones approach.

How To Retain Your Top Performers

ONLINE SPIN

Monday, Oct. 7, 2013  By Matt Straz The market for salespeople, account managers and engineers is so fierce today that recruiters, startups and established companies are all trying to attract the best talent. How will you retain your top performers in the face of such competition?The key is to build a culture and process that naturally repels your competitors. Here are 10 steps for building a company that can retain its top employees: 1. Have a compelling mission. The best employees today want more than a job: They want something they can believe in. Attract and retain the best people with a mission they can rally around. 2. Identify your top performers: Any company with more than a few dozen employees needs a system for identifying and managing its top performers. Modern performance management systems can help you track your best and brightest. 3. Solicit ongoing feedback. Annual reviews are fine, but hanging onto your talent requires frequent feedback. Regular engagement with employees, including online feedback and in-person coaching, is essential. 4. Head off compensation issues. Don’t wait for compensation to be an issue for your top performers. Get ahead of such issues with salary increases, option grants and other forms of compensation. 5. Set ambitious goals. Retaining top people isn’t just about giving them everything they want. Great employees need to be constantly challenged, or they will get bored and leave. 6. Hire well. Great employees want to work alongside other great employees. Keep you hiring standards high, no matter how much pressure there is to grow. 7. Lead by example. No manager or CEO ever inspired people by sitting behind a desk all day. Get out among your employees and customers and lead by example. 8. Go the extra mile. A personal touch is essential to building true loyalty. Going out of your way to champion people who are doing a great job and helping them when they have an occasional personal issue shows that you have a human side. 9.Communicate. The more open you are with your top performers, the more they will want to help. Sharing revenue goals or fundraising milestones can give everyone a shared sense of purpose. 10. Loosen up. Relaxing dress codes and letting people be themselves is key to attracting and retaining today’s most innovative employees.