NPR, formerly National Public Radio, is a national syndicator, which distributes programming to over 900 public radio stations across the U.S. It is a privately and publicly funded non-profit organization, which gets its money from a mix of contributions, grants and indirect government subsidies.
Basically, they distribute news and cultural programming to public radio stations. A huge misperception about NPR is that programming is consistent everywhere. If you spend all your time in a single market listening to a single NPR affiliate, you might have that idea. Actually, the common thread across the stations tends to be that they carry the two highest rated flagship programs “Morning Edition” and “All Things Considered.” After that, programming varies wildly. Some stations run wall-to-wall classical music outside of those two drive-time shows, while others are largely talk. On long road trips it can be amusing or annoying to go from budgets deficits to Beethoven as you shift from one station’s coverage area to another. Also, they distribute programming from other syndicators. My two favorite programs on the stations are “Marketplace” from American Public Media and “This American Life” from Public Radio International.
The audience is a blue chip one financially and extremely well educated. Agree with it or not, the stories do make you think. And, they cover issues that are hard to find anywhere else. A danger that they face in the future is that they are skewing increasingly older. Unless you are a graduate of an elite school, it is unlikely that you listen to NPR if you are under 35.
Those on the right often attack NPR for having a strong liberal bias. After close observation, I would say that is not entirely fair. Some years back, it struck me as being far more pronounced. Now, the interviewers are sometimes more friendly to those left of center, but they work hard to provide contrasting points of view on most issues. The weekly sessions summing up the week in politics with David Brooks of the New York Times (conservative) paired with E.J. Dionne of the Washington Post (liberal) are a good example of such efforts for authentic balance.
Interestingly, when I questioned people across the country about NPR, the knee jerk reaction from several was summed up by one panel member who said “NPR, forget it. They are way too liberal. It is like listening to MSNBC.” Later most admitted that it had been close to a decade since they listened to anything on NPR.
Advertising is sticky issue. They do accept 15-second spots just about everywhere. The problem to us as marketers is that you cannot extol the product or have a clear “call to action” in the spot. That limits creative minds. And, it is not called advertising. It is underwriting. ☺ Yet a long time radio hand that I have known forever says he has had success selling an NPR member to local advertisers. His pitch, and it is intriguing, is that his station can reach people who do not like and who generally avoid advertising. Raising name identification and association with a desirable broadcast property appear to cancel out the ability to have a rousing call to action that is possible on commercial radio.
The big controversy ahead will continue to be the partial funding of NPR by government both federal and state. As any thinking person knows we face a budget crisis. If we are to continue entitlements such as Social Security and Medicare/Medicaid going forward we are going to have to reform the systems and cut spending in many areas as the demographic tidal wave of 92 million baby boomers retiring will bankrupt these programs in their present form. So, some representatives raise the issue of cutting all expenditure to public broadcast through the Corporation for Public Broadcasting, which helps fund PBS on TV and NPR.
Some of the congressmen say it will someday be a financial imperative. Others are more blatant and say why fund something which touts a philosophy different than their own? When I polled people about this, the answers surprised me. A few well educated and politically astute people in their 20’s said in essence, “Don’t worry. If congress pulls the rug out, wealthy individuals and foundations will pass the hat and NPR will be saved.” I checked this out with others who agreed quickly with the young analysts. All felt PBS would have a harder time in the future as money gets tighter.
A West Coast lawyer told me “I think that the NPR on-air people are full of themselves. But I love their stories." I tend to agree. NPR has been and will be an integral part of my life. And no one has ever called me a liberal.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, March 4, 2012
Tuesday, February 21, 2012
WEB TV hits its stride
For the past several weeks, I had been working on a post regarding Web TV. On Friday, February 17th THE WALL STREET JOURNAL beat me to it with a very nice feature in their Friday Journal section entitled “Web TV’s New Lineup.” If you have not read it already, I highly recommend it.
In brief, they covered many of the new entries that have just begun or will soon debut on the web. Highlights include Netflix’ “Lillehammer” which I mentioned last week and a revival of “Arrested Development”, long a Fox cult favorite, also on Netflix. Madonna is producing a channel for You Tube that will have talent hunts and highlight videos dubbed “Dance On.” Amy Poehler, the pride of Boston College, is working on a You Tube channel funded by Google, called “Smart Girls at the Party”. It is said to build self-esteem for young women. Plans are for several A list stars to sign on to projects shortly.
The Journal piece focuses on production issues and signing bankable stars. My take is a bit different but consistent to what you have seen in previous posts over the last few years.
Simply put, many of these projects will likely crash and burn. So what! Since I have been in the business, some 72% of new network series never made it past their first season. Some will catch on, however, and a few could really have a significant impact on viewing trends and ultimately advertising.
We are all sick of hearing about fragmentation. But, this trend toward Web TV can only accelerate it. If I watch another episode of “Lillehammer” this weekend (and I will), it will take me away from some form of advertiser-supported television. There will likely be several hundred thousand like me and, once again, TV as we know it, will spring another small leak in delivery. If some of these shows catch on, they could do ratings comparable to a fair sized cable network. Should they be unusually well produced, they will get critical acclaim and buzz. This is very important with young people who are comfortable watching video online or even on their i-phones.
So, a few successes on Web TV will make the attractive upwardly mobile young demo even harder to reach than it is now.
A lady whom I admire and respect dismisses my thesis as nonsense. She is a very light TV viewer who is attracted to Web TV but says she would likely be doing something other than watching some form of video if she were not viewing a Web series. I see her point but feel that she is in a small minority. Few are as well educated, sophisticated, or lead a varied life as she does. For the overwhelming majority of us, every hour with Web TV will take us away from advertiser supported broadcast and cable.
As a viewer, give Web TV a chance. It is one more way to give you control watching good programming when and where you want it. Should you be a media planner, your job of hitting some key demos will just get tougher.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
In brief, they covered many of the new entries that have just begun or will soon debut on the web. Highlights include Netflix’ “Lillehammer” which I mentioned last week and a revival of “Arrested Development”, long a Fox cult favorite, also on Netflix. Madonna is producing a channel for You Tube that will have talent hunts and highlight videos dubbed “Dance On.” Amy Poehler, the pride of Boston College, is working on a You Tube channel funded by Google, called “Smart Girls at the Party”. It is said to build self-esteem for young women. Plans are for several A list stars to sign on to projects shortly.
The Journal piece focuses on production issues and signing bankable stars. My take is a bit different but consistent to what you have seen in previous posts over the last few years.
Simply put, many of these projects will likely crash and burn. So what! Since I have been in the business, some 72% of new network series never made it past their first season. Some will catch on, however, and a few could really have a significant impact on viewing trends and ultimately advertising.
We are all sick of hearing about fragmentation. But, this trend toward Web TV can only accelerate it. If I watch another episode of “Lillehammer” this weekend (and I will), it will take me away from some form of advertiser-supported television. There will likely be several hundred thousand like me and, once again, TV as we know it, will spring another small leak in delivery. If some of these shows catch on, they could do ratings comparable to a fair sized cable network. Should they be unusually well produced, they will get critical acclaim and buzz. This is very important with young people who are comfortable watching video online or even on their i-phones.
So, a few successes on Web TV will make the attractive upwardly mobile young demo even harder to reach than it is now.
A lady whom I admire and respect dismisses my thesis as nonsense. She is a very light TV viewer who is attracted to Web TV but says she would likely be doing something other than watching some form of video if she were not viewing a Web series. I see her point but feel that she is in a small minority. Few are as well educated, sophisticated, or lead a varied life as she does. For the overwhelming majority of us, every hour with Web TV will take us away from advertiser supported broadcast and cable.
As a viewer, give Web TV a chance. It is one more way to give you control watching good programming when and where you want it. Should you be a media planner, your job of hitting some key demos will just get tougher.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, February 14, 2012
Hemingway and Changing Media Trends
There is a marvelous passage in Nobel laureate Ernest Hemingway’s THE SUN ALSO RISES. A character, Mike Campbell, is asked how he became bankrupt. He answers, “two ways. Gradually and then suddenly”.
As usual, Hemingway says things with great conciseness. The quotation came to mind this week as I watched with amusement and interest three things happening in the advertising world. The three events appear totally independent but there is a common thread among them from my vantage point. They were:
1) P&G Chairman Bob McDonald hinted that the global personal care and household product giant might “moderate” their $10 billion ad budget as his brands get “free” impressions via Facebook and Google. The comment set off a firestorm in some quarters. The comments, often from ad agency principals, were that Facebook was not free. Unquestionably, working with Facebook can be labor intensive if you are to manage, track, and optimize it properly. But, in McDonald’s defense, such items as e-mail forwarding, blogs, Likes, and sharing are ways that things get a life of their own without an agency’s help. And, don’t forget You Tube. If you post a commercial on You Tube it may generate millions of impressions. Good ads tend to go viral and that is indeed free. These are not the easiest times to work in an advertising agency so we all can understand a bit of defensiveness. Over time, however, social media almost has to make ad spending more efficient than it has been historically.
2) Nielsen announced that young people, particularly those 25-34, are still watching video of all forms but less on conventional platforms such as advertiser supported TV and cable. We discussed this some time ago, as it appeared that a number of recent graduates of elite universities were simply using their laptops to cover their video needs. While only a few hundred thousand are going cold turkey on cable or satellite, the trend is growing. And those who do subscribe to cable or satellite are now viewing more Hulu, Netflix or other sources. Advertiser supported TV of all forms has to suffer as commercial avoidance is now gaining steam.
3) Speaking of Netflix, they just released their first made for Netflix series—"Lillehammer". I caught the first episode and loved it. It is about a New York mobster who enters the witness protection program and chooses to move to Lillehammer, Norway considering it safer than any United States hideout. All eight episodes were released the same day. It is great fun and rivals the quality of the very best HBO series.
How do these three events tie together? It is pretty simple—our business is changing and the old models are, to paraphrase Hemingway’s Mike Campbell character, “gradually going bankrupt.” Social media is here to stay and will evolve. And portions of it will provide free or far more efficient delivery than today. Young people are living a lifestyle that allows them to control when they watch video content but commercial avoidance can only soar and will not be limited to DVR playbacks or channel hopping. And, finally, every hour that we spend with a "Lillehammer" or fellow traveler, is an hour away from advertiser supported content.
The pace of change appears to be quickening a bit. The real challenge will be how to reach the affluent young adults a few years from now when millions more will be very hard to capture via conventional means.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
As usual, Hemingway says things with great conciseness. The quotation came to mind this week as I watched with amusement and interest three things happening in the advertising world. The three events appear totally independent but there is a common thread among them from my vantage point. They were:
1) P&G Chairman Bob McDonald hinted that the global personal care and household product giant might “moderate” their $10 billion ad budget as his brands get “free” impressions via Facebook and Google. The comment set off a firestorm in some quarters. The comments, often from ad agency principals, were that Facebook was not free. Unquestionably, working with Facebook can be labor intensive if you are to manage, track, and optimize it properly. But, in McDonald’s defense, such items as e-mail forwarding, blogs, Likes, and sharing are ways that things get a life of their own without an agency’s help. And, don’t forget You Tube. If you post a commercial on You Tube it may generate millions of impressions. Good ads tend to go viral and that is indeed free. These are not the easiest times to work in an advertising agency so we all can understand a bit of defensiveness. Over time, however, social media almost has to make ad spending more efficient than it has been historically.
2) Nielsen announced that young people, particularly those 25-34, are still watching video of all forms but less on conventional platforms such as advertiser supported TV and cable. We discussed this some time ago, as it appeared that a number of recent graduates of elite universities were simply using their laptops to cover their video needs. While only a few hundred thousand are going cold turkey on cable or satellite, the trend is growing. And those who do subscribe to cable or satellite are now viewing more Hulu, Netflix or other sources. Advertiser supported TV of all forms has to suffer as commercial avoidance is now gaining steam.
3) Speaking of Netflix, they just released their first made for Netflix series—"Lillehammer". I caught the first episode and loved it. It is about a New York mobster who enters the witness protection program and chooses to move to Lillehammer, Norway considering it safer than any United States hideout. All eight episodes were released the same day. It is great fun and rivals the quality of the very best HBO series.
How do these three events tie together? It is pretty simple—our business is changing and the old models are, to paraphrase Hemingway’s Mike Campbell character, “gradually going bankrupt.” Social media is here to stay and will evolve. And portions of it will provide free or far more efficient delivery than today. Young people are living a lifestyle that allows them to control when they watch video content but commercial avoidance can only soar and will not be limited to DVR playbacks or channel hopping. And, finally, every hour that we spend with a "Lillehammer" or fellow traveler, is an hour away from advertiser supported content.
The pace of change appears to be quickening a bit. The real challenge will be how to reach the affluent young adults a few years from now when millions more will be very hard to capture via conventional means.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, February 5, 2012
Musings on the Summer Olympics
Back in December, I was putting out feelers to members of my panel and a number of others regarding 2012. Depending on what markets they worked out of or what media they focused on, responses varied a bit. One thing, however, struck me. For the first time in 40 years, no one made more than a passing reference to the Summer Olympic Games that will be held in London this year from late July to early August. Hence this post. What has gone wrong with the Summer games to the point where they have become almost an afterthought to broadcast and cable salespeople, agency media executives, and some fairly high powered advertisers?
I went back to a few dozen people and probed. Was it the lack of competition with Soviet Russia, the presence of professionals in virtually every sport, TV fragmentation, the pulse of modern life or anything else they could dream up?
First, I quote a friend from my Boston College days. He does not work in broadcast or advertising but is in communications. His comments on sports, which he follows avidly, are always astute:
The Summer Olympic games have certainly lost their allure. Some factors:
1) The fall of the Soviet Union and the Eastern bloc.
Competition with them was a morality play: the good and free vs. the slave states, which were also excellent in athletics, because, we were assured, they cheated.
2) The drug scandals. People immediately question exceptional performances, even though the Olympics now probably have the most stringent anti-drug testing and standards of any sporting event.
3) Parity of competition-Track & Field is the symbol and centerpiece of the Olympics. Scientists say that the greatest reason for the lowering of world records is that many more people now compete and have access to modern training methods and equipment. Many, that is, very, very many of these people are from distant continents. Interest in individual competion necessitates the familiarity of the spectator with the main competitors. The PGA Tour suffers when Tiger is not a factor. People want to see Tiger vs. Phil; recently they have been getting some major wins by some fine young players who then fade back into the pack in later tournaments. (Remember how the press would criticize Tom Kite for making millions but not winning tournaments?) It is the same for Olympic Track & Field. Well-known American and British Empire runners would go into the Olympics with great public anticipation. Now, a casual glance at the list of men's record holders of non-hurdling races shows only one American, retired Michael Johnson. Most are from Africa. I couldn't name them, could you?
4) There are many more sports on TV now, with many more outlets, starting with ESPN and other cable outlets. Local news is more likely to lead with the score of a mid-season Red Sox game than with Olympic results.
Next, here are some comments from someone who has sold broadcast and cable for years, remains a knowledgeable fan, and always has his feet on the ground. To him, a big problem is what he dubs the “Dream Team effect.”
Dream Team effect:
When the NBA players participated for the first time in 1992 with the original “Dream Team,” it was fun to see these guys playing for our country but is did not seem so much like the Olympics as it was a basketball exhibition. Knowing that the U.S. and other countries are sending “professionals” in different sports seemed to lessen the perceived genuine competition of Faster, Higher, and Stronger – for those who were not getting paid. Baseball and Tennis players competing is somewhat strange to me as well.
24/7 today:
Now with full coverage on multimedia outlets, plenty on cable, of events, athletes and all different sports it reminds of the NBC Baseball Game of the Week impact. I truly enjoyed watching the sole Saturday telecast as appointment viewing and now the proliferation and availability makes it great to enjoy any game, any time but somehow it does not seem as special. There may be too much for even an ardent sports fan like me to catch all the action.
One of the smartest people that I know who has sold sports from time to time over the years weighed in this way:
To your “not being brought up” point…I’m hearing it lumped more with political, as the most common reason why some are staying away. First that it will be on the front end of political spends, but also…Political spending has become like the Super Bowl in that advertisers fear they can’t be on television. The only TV rates neophytes might hear is how much a :30 cost in the Super Bowl. So too…we spend so much time talking about Obama’s Billion that it scares some away from spending in September/October. Reality is the Late News doesn’t cost what it used too, and zoned cable options are available even more efficiently.
Some people have told you that it is “not worth the trouble”…this one I get. It’s a huge logistical nightmare on the front end, which only intensifies when they arrive. Live sports of any sort is always tricky, so compounding that tenfold only makes for more stress. Add in middle-of-the-night events, time zone peculiarities, language barriers, whether issues…it’s a wonder we can harness it well enough to sell. Have to package/sell the Olympic ideal, because the individual sporting aspects are too fluid to define. In the end…the Olympics are not about the competition, but much more so the personal narratives of those involved.
Others told you that the summer games are “losing their glow” which is an interesting take. On some level I agree, but it’s easy to say that in January. Come August I’ll be wrapped in it like many people, and it’s also one of a handful of programs you can watch with the family.
There is merit though to a lost glow …I blame first, the overall proliferation of sports available. In the 70’s we’d tune by Wide World of Sports for our only chance to watch Russian Vasily Alekseyev lift amazing weights over his head, and a year later remember the portly strongman in the next Olympiad. Were he around today, he might be a UFC fighter which means I could have watched all 37 of his matches on TV, while also being able to follow his eating, training and dating habits via the internet. Somewhere along the way he’d get a Nike deal and a Subway commercial. And eventually we’d learn through his reality show, that he and Vasily Jr. work as a Swamp Loggers during the day. We all have our saturation points.
A few people in their 20’s stunned me by saying that they will start watching the summer games when American football becomes an Olympic sport. One fellow said he was concerned that Olympic coverage could interrupt pre-season NFL and another said he will stick to MLB if his beloved home town team is in a pennant race.
Golf will appear in 2016 in Brazil and last week Jack Nicklaus, Annika Sorenstam, Gary Player, and Greg Norman among other luminaries all presented designs for an Olympic course that will break ground this fall near Rio de Janeiro. The addition of golf may add some new viewers for 2016.
What is my take? Viewing will be pretty good on a cumulative basis. In the heart of summer reruns, we will likely break the record of the Beijing games of over 200 million viewers during the two week run. NBC paid a lot for the rights so the profit picture is problematic. Times, however, have clearly changed.
When someone mentions the summer Olympics to me I think of one man—Al Oerter. He won the gold medal in the discus in 1956, 1960, 1964, and 1968. Al was a true amateur. He worked as an early professional in computers and arranged his training and meets around the Olympics. In 1964, he fell on a rainy day in the rink in Tokyo and was injured badly breaking some ribs. The US doctors urged him to drop out. He refused and won with his first toss. In 1968, as a college student, I was returning to my dorm late one morning when a guy poked his head out of the TV lounge and announced “Oerter is tossing.” Some 20 of us piled into the room to watch. One fool said “what is the big deal? He barely made the team this year.” After we all give him a dirty look, Big Al unleashed a mighty toss that put him in the lead. I had to leave and was stunned to hear on the radio a few hours later that he had his fourth consecutive gold medal and set his fourth consecutive Olympic record. Over the next nearly 40 years whenever I saw him interviewed he was modest, upbeat, and always positive. To me, he was the greatest competitor that I have ever seen. No one epitomized the Olympic spirit as much as Al Oerter did.
Will I watch some? Of course. But, like many things, the landscape has changed and, in this case, I am not sure for the better.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
I went back to a few dozen people and probed. Was it the lack of competition with Soviet Russia, the presence of professionals in virtually every sport, TV fragmentation, the pulse of modern life or anything else they could dream up?
First, I quote a friend from my Boston College days. He does not work in broadcast or advertising but is in communications. His comments on sports, which he follows avidly, are always astute:
The Summer Olympic games have certainly lost their allure. Some factors:
1) The fall of the Soviet Union and the Eastern bloc.
Competition with them was a morality play: the good and free vs. the slave states, which were also excellent in athletics, because, we were assured, they cheated.
2) The drug scandals. People immediately question exceptional performances, even though the Olympics now probably have the most stringent anti-drug testing and standards of any sporting event.
3) Parity of competition-Track & Field is the symbol and centerpiece of the Olympics. Scientists say that the greatest reason for the lowering of world records is that many more people now compete and have access to modern training methods and equipment. Many, that is, very, very many of these people are from distant continents. Interest in individual competion necessitates the familiarity of the spectator with the main competitors. The PGA Tour suffers when Tiger is not a factor. People want to see Tiger vs. Phil; recently they have been getting some major wins by some fine young players who then fade back into the pack in later tournaments. (Remember how the press would criticize Tom Kite for making millions but not winning tournaments?) It is the same for Olympic Track & Field. Well-known American and British Empire runners would go into the Olympics with great public anticipation. Now, a casual glance at the list of men's record holders of non-hurdling races shows only one American, retired Michael Johnson. Most are from Africa. I couldn't name them, could you?
4) There are many more sports on TV now, with many more outlets, starting with ESPN and other cable outlets. Local news is more likely to lead with the score of a mid-season Red Sox game than with Olympic results.
Next, here are some comments from someone who has sold broadcast and cable for years, remains a knowledgeable fan, and always has his feet on the ground. To him, a big problem is what he dubs the “Dream Team effect.”
Dream Team effect:
When the NBA players participated for the first time in 1992 with the original “Dream Team,” it was fun to see these guys playing for our country but is did not seem so much like the Olympics as it was a basketball exhibition. Knowing that the U.S. and other countries are sending “professionals” in different sports seemed to lessen the perceived genuine competition of Faster, Higher, and Stronger – for those who were not getting paid. Baseball and Tennis players competing is somewhat strange to me as well.
24/7 today:
Now with full coverage on multimedia outlets, plenty on cable, of events, athletes and all different sports it reminds of the NBC Baseball Game of the Week impact. I truly enjoyed watching the sole Saturday telecast as appointment viewing and now the proliferation and availability makes it great to enjoy any game, any time but somehow it does not seem as special. There may be too much for even an ardent sports fan like me to catch all the action.
One of the smartest people that I know who has sold sports from time to time over the years weighed in this way:
To your “not being brought up” point…I’m hearing it lumped more with political, as the most common reason why some are staying away. First that it will be on the front end of political spends, but also…Political spending has become like the Super Bowl in that advertisers fear they can’t be on television. The only TV rates neophytes might hear is how much a :30 cost in the Super Bowl. So too…we spend so much time talking about Obama’s Billion that it scares some away from spending in September/October. Reality is the Late News doesn’t cost what it used too, and zoned cable options are available even more efficiently.
Some people have told you that it is “not worth the trouble”…this one I get. It’s a huge logistical nightmare on the front end, which only intensifies when they arrive. Live sports of any sort is always tricky, so compounding that tenfold only makes for more stress. Add in middle-of-the-night events, time zone peculiarities, language barriers, whether issues…it’s a wonder we can harness it well enough to sell. Have to package/sell the Olympic ideal, because the individual sporting aspects are too fluid to define. In the end…the Olympics are not about the competition, but much more so the personal narratives of those involved.
Others told you that the summer games are “losing their glow” which is an interesting take. On some level I agree, but it’s easy to say that in January. Come August I’ll be wrapped in it like many people, and it’s also one of a handful of programs you can watch with the family.
There is merit though to a lost glow …I blame first, the overall proliferation of sports available. In the 70’s we’d tune by Wide World of Sports for our only chance to watch Russian Vasily Alekseyev lift amazing weights over his head, and a year later remember the portly strongman in the next Olympiad. Were he around today, he might be a UFC fighter which means I could have watched all 37 of his matches on TV, while also being able to follow his eating, training and dating habits via the internet. Somewhere along the way he’d get a Nike deal and a Subway commercial. And eventually we’d learn through his reality show, that he and Vasily Jr. work as a Swamp Loggers during the day. We all have our saturation points.
A few people in their 20’s stunned me by saying that they will start watching the summer games when American football becomes an Olympic sport. One fellow said he was concerned that Olympic coverage could interrupt pre-season NFL and another said he will stick to MLB if his beloved home town team is in a pennant race.
Golf will appear in 2016 in Brazil and last week Jack Nicklaus, Annika Sorenstam, Gary Player, and Greg Norman among other luminaries all presented designs for an Olympic course that will break ground this fall near Rio de Janeiro. The addition of golf may add some new viewers for 2016.
What is my take? Viewing will be pretty good on a cumulative basis. In the heart of summer reruns, we will likely break the record of the Beijing games of over 200 million viewers during the two week run. NBC paid a lot for the rights so the profit picture is problematic. Times, however, have clearly changed.
When someone mentions the summer Olympics to me I think of one man—Al Oerter. He won the gold medal in the discus in 1956, 1960, 1964, and 1968. Al was a true amateur. He worked as an early professional in computers and arranged his training and meets around the Olympics. In 1964, he fell on a rainy day in the rink in Tokyo and was injured badly breaking some ribs. The US doctors urged him to drop out. He refused and won with his first toss. In 1968, as a college student, I was returning to my dorm late one morning when a guy poked his head out of the TV lounge and announced “Oerter is tossing.” Some 20 of us piled into the room to watch. One fool said “what is the big deal? He barely made the team this year.” After we all give him a dirty look, Big Al unleashed a mighty toss that put him in the lead. I had to leave and was stunned to hear on the radio a few hours later that he had his fourth consecutive gold medal and set his fourth consecutive Olympic record. Over the next nearly 40 years whenever I saw him interviewed he was modest, upbeat, and always positive. To me, he was the greatest competitor that I have ever seen. No one epitomized the Olympic spirit as much as Al Oerter did.
Will I watch some? Of course. But, like many things, the landscape has changed and, in this case, I am not sure for the better.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, January 24, 2012
A Return to Media Normalcy?
Way back in 1920, the U.S. economy was in shambles. Unemployment was over 10% and inflation in some parts of the country was running at 20%. That year, the Republicans nominated Warren G. Harding, an Ohio Senator for president. Easily the handsomest man ever to run for the White House prior to Ronald Reagan and Mitt Romney, Harding had been a strong supporter of giving women the right to vote. That August, when women received the franchise, was only 10 weeks prior to the election. He and his running mate, Massachusetts’s governor Calvin Coolidge campaigned on the theme of a “A Return to Normalcy.” The idea was to correct things at home and stop being the savior of the world. Their predecessor, Woodrow Wilson, had tried to be just that when he entered World War I saying that he “was keeping the world safe for democracy. The return to normalcy was putting America back to pre-World War I conditions.
Harding and Coolidge won in a landslide. The handsome Senator garnered a huge majority of both the male and female vote. Immediately on being inaugurated, he cut taxes, played ball with business interests, and inflation fell sharply and unemployment dropped to 3.5% (most economists define full employment as 4.0%). A few years later Harding died in office with a scandal overhanging him. His Secretary of the Interior had awarded oil leases to friends in exchange for $400,000, an enormous sum in 1923. But the economy rolled on and the “Roaring 20’s” were quite a decade.
Today, many media executives, especially on the sales side, tell me that they just want things to return to normal. Who can blame them for the desire of a “2012 return to normalcy”? From my vantage point, it is simply not going to happen.
Several people tell me that the next couple of years will be won or lost depending on auto sales. There is stunningly good news here. Last week, the automobile research company R.L. Polk released data indicating that the average age of the U.S. car/light truck fleet is 10.8 years. This is the highest level in history. True, cars are made to last longer today than in the past but during 2008-2010 many kept their older cars as they were afraid to take out a loan on a new one. This past year, 2011, saw a 10% uptick in car sales. Given the slightly improving economy plus the age of the fleet requiring significant replacement, 2012 should be another solid year of advancement in car sales in the U.S.
But hanging the year solely on the automobile statistic is way too simplistic. As I look at both the economy and the media market, I don’t really know what normal is anymore. For the last two decades, American consumers went on a buying binge and the national savings rate went to zero. When bad times hit, the savings rate jumped to about 6% by spring 2009. Now, it appears that short-term enthusiasms have grabbed the national psyche once again and people are spending. Or, is it simply because the unemployment rate is high and millions of others are under-employed that people are tapping into savings to maintain a middle class lifestyle? Somehow we need to find a balance between buy now versus save and buy later with cash.
In the media world, something seems to be brewing and I have few allies when I talk or write about it. We are in the 5th year of weak media billing. It varies by medium and by market, of course. But, most media executives would love to see a return to the business they wrote and particularly, the ease of getting it, that they had in 2007. Some have literally referred to that period as the “good old days.”
Here is why I do not see a return to 2007. Is the economy improving? It appears to be moving steadily upward but at a very slow pace. If we grow 2% in 2012, we are on a track that will double the size of our economy in 36 years. Singapore is doubling every six and China every 8 years at current growth rates.
But more importantly, the media landscape has changed significantly since 2008 when people first saw advertisers begin to pull in their horns. Let us say that things are back on track by late 2013 or early 2014. That would be great and we all have to hope for it with so many Americans suffering and millions of others nervous about their prospects.
Let us assume that things are back to “normal” in the 1st quarter of 2014. Will any advertiser worth his salt execute the kind of plan that they would have in 2008? Of course not! Social media was but a gleam in the eye of cutting edge media planners then. Commercial avoidance via DVR’s existed but was half of what it was is now, and Hulu.com, instant Netflix and other alternatives to live commercial TV were just getting started.
Yes, my friends, the U.S. economy will get better. When, is not certain. It is certain, however, that the media mix, for that happy day, will be demonstrably different than what it was in the sunny days of 2007.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Harding and Coolidge won in a landslide. The handsome Senator garnered a huge majority of both the male and female vote. Immediately on being inaugurated, he cut taxes, played ball with business interests, and inflation fell sharply and unemployment dropped to 3.5% (most economists define full employment as 4.0%). A few years later Harding died in office with a scandal overhanging him. His Secretary of the Interior had awarded oil leases to friends in exchange for $400,000, an enormous sum in 1923. But the economy rolled on and the “Roaring 20’s” were quite a decade.
Today, many media executives, especially on the sales side, tell me that they just want things to return to normal. Who can blame them for the desire of a “2012 return to normalcy”? From my vantage point, it is simply not going to happen.
Several people tell me that the next couple of years will be won or lost depending on auto sales. There is stunningly good news here. Last week, the automobile research company R.L. Polk released data indicating that the average age of the U.S. car/light truck fleet is 10.8 years. This is the highest level in history. True, cars are made to last longer today than in the past but during 2008-2010 many kept their older cars as they were afraid to take out a loan on a new one. This past year, 2011, saw a 10% uptick in car sales. Given the slightly improving economy plus the age of the fleet requiring significant replacement, 2012 should be another solid year of advancement in car sales in the U.S.
But hanging the year solely on the automobile statistic is way too simplistic. As I look at both the economy and the media market, I don’t really know what normal is anymore. For the last two decades, American consumers went on a buying binge and the national savings rate went to zero. When bad times hit, the savings rate jumped to about 6% by spring 2009. Now, it appears that short-term enthusiasms have grabbed the national psyche once again and people are spending. Or, is it simply because the unemployment rate is high and millions of others are under-employed that people are tapping into savings to maintain a middle class lifestyle? Somehow we need to find a balance between buy now versus save and buy later with cash.
In the media world, something seems to be brewing and I have few allies when I talk or write about it. We are in the 5th year of weak media billing. It varies by medium and by market, of course. But, most media executives would love to see a return to the business they wrote and particularly, the ease of getting it, that they had in 2007. Some have literally referred to that period as the “good old days.”
Here is why I do not see a return to 2007. Is the economy improving? It appears to be moving steadily upward but at a very slow pace. If we grow 2% in 2012, we are on a track that will double the size of our economy in 36 years. Singapore is doubling every six and China every 8 years at current growth rates.
But more importantly, the media landscape has changed significantly since 2008 when people first saw advertisers begin to pull in their horns. Let us say that things are back on track by late 2013 or early 2014. That would be great and we all have to hope for it with so many Americans suffering and millions of others nervous about their prospects.
Let us assume that things are back to “normal” in the 1st quarter of 2014. Will any advertiser worth his salt execute the kind of plan that they would have in 2008? Of course not! Social media was but a gleam in the eye of cutting edge media planners then. Commercial avoidance via DVR’s existed but was half of what it was is now, and Hulu.com, instant Netflix and other alternatives to live commercial TV were just getting started.
Yes, my friends, the U.S. economy will get better. When, is not certain. It is certain, however, that the media mix, for that happy day, will be demonstrably different than what it was in the sunny days of 2007.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, January 16, 2012
We First, A Review
There is a new book out about social media that appears to be getting some buzz. Three readers on two continents have written to me in the last 10 days asking my opinion. The book is WE FIRST by Simon Mainwaring (Palgrave Macmillan, 2011).
It is an interesting book that gives a passionate litany of examples of how social media is changing and will impact both the world of advertising and politics. His vigorous endorsement of social media sometimes borders on the breathless. At one point he writes, “Use social media to build communities, projects and create positive impact.” The title says that we must redefine goals both personal and corporate from “I first” to “We first”.
He later talks of a global brand initiative that will “associate corporate brands and competitors that willingly work together to advance corporate social responsibility and charitable donations”. This can cross corporate lines, Non-profits, and countries. Some examples that he envisions are Coke and Pepsi, Greenpeace and the World Wildlife Fund, and the United States with China. This seems to be a bit of a stretch especially the Coke and Pepsi collaboration.
Mainwaring also states that consumers will pay more if they see a brand selling based on an eye toward common prosperity. Social media, then, in his view, can actually transform capitalism. As an environmentalist he makes a nice case that we are consuming the earth’s resources faster than they can be regenerated.
His politics and idealism get in the way of things to me. Also, he strikes me as someone, who is an experienced marketer, but is getting detached from the real world. It was as if I were reading a liberal Mitt Romney.
Do people really pay more for a socially responsible brand? Mr. Wainwaring should do what I do. Twice a year, I monitor Wal-Mart prices vs. drug stores, grocery stores, and other mass merchants. I must stick out like a sore thumb with my heavily starched shirt and gold cufflinks as I move through the big box store with a clipboard (last time I heard two clerks whisper, “who is that old guy?” The other responded “look busy. He is probably from headquarters"). What I see on those trips are struggling people who buy the cheapest products and pounce on specials. They are fighting to survive and are not dwelling on corporate or brand social responsibility.
Or how about the 64 million who visit a McDonald’s every day? Would they pay more if they thought McDonald’s was working for social justice? I have visited a Ronald McDonald house during my days on the business and the charitable work they do there is both touching and important but I doubt if many customers dwell on it in the drive-thru lane.
Mr. Wainwaring seems to be talking to customers of Patagonia and Whole Foods. He mentions Patagonia in the text very positively and there is no question that much of their customer base loves the fact that they make sustainable products. But, visit a store, as I often have, and the customer base is upper-middle class and unusually well educated. They do not represent American as a whole.
When he sticks to how social media can make your brand look better and communicate more effectively and less expensively, the book sings. In the next breath, he says that he is not anti-capitalist but sometimes, his speech betrays him.
This is a good read but you may, as I, wrestle some of his proposals to the ground.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
It is an interesting book that gives a passionate litany of examples of how social media is changing and will impact both the world of advertising and politics. His vigorous endorsement of social media sometimes borders on the breathless. At one point he writes, “Use social media to build communities, projects and create positive impact.” The title says that we must redefine goals both personal and corporate from “I first” to “We first”.
He later talks of a global brand initiative that will “associate corporate brands and competitors that willingly work together to advance corporate social responsibility and charitable donations”. This can cross corporate lines, Non-profits, and countries. Some examples that he envisions are Coke and Pepsi, Greenpeace and the World Wildlife Fund, and the United States with China. This seems to be a bit of a stretch especially the Coke and Pepsi collaboration.
Mainwaring also states that consumers will pay more if they see a brand selling based on an eye toward common prosperity. Social media, then, in his view, can actually transform capitalism. As an environmentalist he makes a nice case that we are consuming the earth’s resources faster than they can be regenerated.
His politics and idealism get in the way of things to me. Also, he strikes me as someone, who is an experienced marketer, but is getting detached from the real world. It was as if I were reading a liberal Mitt Romney.
Do people really pay more for a socially responsible brand? Mr. Wainwaring should do what I do. Twice a year, I monitor Wal-Mart prices vs. drug stores, grocery stores, and other mass merchants. I must stick out like a sore thumb with my heavily starched shirt and gold cufflinks as I move through the big box store with a clipboard (last time I heard two clerks whisper, “who is that old guy?” The other responded “look busy. He is probably from headquarters"). What I see on those trips are struggling people who buy the cheapest products and pounce on specials. They are fighting to survive and are not dwelling on corporate or brand social responsibility.
Or how about the 64 million who visit a McDonald’s every day? Would they pay more if they thought McDonald’s was working for social justice? I have visited a Ronald McDonald house during my days on the business and the charitable work they do there is both touching and important but I doubt if many customers dwell on it in the drive-thru lane.
Mr. Wainwaring seems to be talking to customers of Patagonia and Whole Foods. He mentions Patagonia in the text very positively and there is no question that much of their customer base loves the fact that they make sustainable products. But, visit a store, as I often have, and the customer base is upper-middle class and unusually well educated. They do not represent American as a whole.
When he sticks to how social media can make your brand look better and communicate more effectively and less expensively, the book sings. In the next breath, he says that he is not anti-capitalist but sometimes, his speech betrays him.
This is a good read but you may, as I, wrestle some of his proposals to the ground.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, January 4, 2012
2012 Media Forecast
As we begin 2012, a number of people have requested a forecast post on the U.S. media scene. I canvassed dozens of people and went to a large number of new sources beyond my normal panel to make sure the thinking was fresh and geographically balanced.
Overview
If you have read the trade press in recent weeks, some very similar forecasts have emerged. Globally, advertising will be up in the 4.7% range and would have been over 5% had worries over European debt and currency threatened a severe recession there. In the U.S. things will move up fairly well with billing growth in the 3-4% range but pre-recession levels of spending (from 2007) will not be matched across the board until maybe 2015-2016. I have no real issues with any of those prognostications. My point in this post is that if you dig a bit deeper things are significantly different market to market and medium to medium.
In no specific order, here goes:
Network TV—the king will remain king as large brands seeking awareness will continue to flock to it and bid up prices despite declining ratings and continued growth in commercial avoidance. The upfront marketplace will continue for another year for sure. Depending on the economy, a 5-6% gain seems likely.
Network Cable—growth will be nice here but more in line with network TV than the double-digit gains of recent years. As the medium has grown, it is coming off a larger base each year so jumps in billing and pricing will be smaller but still good in a flat-lined economy.
Spot TV—this one will require a lot of attention from media planners this year. Virtually every forecast out there says expect a 4% billing gain for 2012 with a 2.5% uptick if you take out the impact of political advertising. Next year will bring new meaning to the old statistical saw that “you can drown in a river with an average depth of six inches.”
Some markets have come back nicely from the 2008-2009 recession (economists claim that we pulled out of recession in 2009. Tell that to some of the broadcasters whom I interviewed!) . Other markets are really struggling and expect another poor year. One Midwestern TV G.M. told me, “We expect no political billing of note. This is not a battleground state for the presidency and we have no Senate race. I try to explain to headquarters that we have absolutely no pricing power. Good clients come in and want pricing from years ago and we have to give it to them. If not they will go to someone who will meet their demands or load up on radio and local cable. Will we ever return to normal?”
The epicenter of America’s boomtowns is now amazingly Williston, North Dakota. Hiring is so robust that fast food outlets are now paying $15 for counter help. As long as the oil and gas boom continues there, things will be fine. But, most Americans are not willing to spend a winter in Williston. And, if you have a mortgage that is underwater (like 24% of mortgage holders), you cannot leave even if you wish. Conversely, Cleveland and Youngstown, Ohio are bulldozing foreclosed or abandoned homes to provide green space in their cities and prop up sagging property values.
With both parties possibly having a billion dollar war chest for advertising next year one would think the networks would get the brunt of it. Not so. Both sides will run on both network TV and national cable but much of the money will be spent in 10-12 battleground states. Topping the list will be Florida and Ohio (natch), along with Pennsylvania, Iowa, Wisconsin, Nevada, Colorado, and Virginia. This list will change a bit as we move through fall 2012.
With the GOP a few seats away from recapturing the Senate, look for huge spending in local races in the following states—Massachusetts, Montana, Nevada, New Mexico, Wisconsin, Missouri, and Virginia.
Candidly, next October will be a bad time to turn on the TV set in either Ohio or Wisconsin. Being battlegrounds for both the presidential race plus hot and well-funded Senate contests, it might be a good time to stick to PBS, C-Span, or HBO.
Auto and truck sales were up a solid 10% from 2010 to 2011 and that clearly helped some spot markets and will likely do it again in 2012. Please remember that when unemployment is over 10% and housing still tanking, some markets will not sell many cars nor see much local vehicle advertising.
The whole political situation raises a core question that a few people were willing to discuss with me. The parent company wants dollars. As a rule, they do not care where they come from client wise. Twenty-five years ago, stations hated political advertising. They had to charge a low fixed rate, could not pre-empt the politicians and they had to offer good inventory to all candidates. Now, they look forward to it. Across many markets, it has become the mother’s milk of local TV advertising. Without political money, many stations would be down in billing for 2012 and some fairly significantly. This is not a good long-term trend for the medium.
Local Cable—with the ability to sell zones or portions of a cable interconnect, this medium with some hustling has been able to bring many small local retailers on to TV over the last few years. Also, they can handle congressional districts or state senate races with far less waste than over the air TV. Growth here will vary depending on the strength of the local economy and the heat of political races. They should do better than local TV stations in most cases.
Radio—most see gains of approximately 2% but, again, it will vary by market. In mid-sized and smaller markets, I am told that collection problems are still a big issue as more and more small retailers are struggling or closing their doors in economically challenged metros. This has always been a problem with local radio but seems to not be improving much even as the economy is inching up.
Certain formats lend themselves well to political advertising. Sports formats continue to do well even in some areas where the economy is not particularly strong. A big development in the last year has been that local radio has been developing digital products for advertisers. They are even elbowing their way in on the daily deal business in certain larger markets.
Outdoor—a 4-5% gain seems likely. Digital boards remain popular and they will benefit from political spending as well. Keep in mind that outdoor remains the last mass medium.
Newspaper—the downward spiral will continue. An optimistic outlook would say that they would be down 9% after strong double digit declines of recent years. Most papers have not been able to convert many readers to their digital product and the under 40’s continue to avoid it. When I travel, it stuns me how weak the products are and how much wire service copy that they all use. Sad, but this is the reality of the 2012 world.
Magazines—they get thinner and thinner except for a few trendy titles and some beauty books. Some well known titles will die this year. It is a shame but most do not fit in to today’s lifestyle all that well. Pricing is often wide open—negotiations should be fun again this year.
On-Line—double digit year over year gains will be found here. And, there is room for growth! They may get 15% of billing next year but we spend 36% of our media time online. As print falters, more players of all sizes will shift money here.
Daily Deals—this business usually means Groupon or Living Social to most people. Actually, there are hundreds of entrants in the category and broadcasters, especially smart radio operators, are getting in to the act via their websites. Groupon timed their Initial Public Offering (IPO) perfectly. To me, their business model seems way too labor intensive and retailers complain that people who use Groupon coupons do not “stick” and return again and again. This could be an area with a shakeout as many daily deal players, especially the under-capitalized, fall to the wayside.
Social Media—this one had the entire buzz last year but may generate more in 2012. Facebook will have 1 billion users this year and should become a public company by year-end. What will they do with all that capital? Acquisitions would make sense but I think that they will use new technology to really heat up social commerce. So will others in the space. There is talk of an Apple TV set that will blend on-line with more conventional TV properties with opportunities for sales.
Major companies have piled in to social media and they are getting a decent handle on it and integrating it with varying degrees of success in to their marketing communications programs. But, small retailers seem to hate it or are afraid of it. Why? They do not devote enough time to it nor do they have the staff on hand to maximize its usefulness. There is still a bit of hocus-pocus here but the big players are getting more accountable and the big spenders are getting more imaginative and are hedging their bets more shrewdly with it.
The Wild Card—Oil Prices. As an economy grows, demand for petroleum-based products, particularly gasoline, goes up. So, as we write, oil is approximately $100 a barrel. The economy can handle that easily and even more if the economy improves modestly throughout 2012. If we get to $130+ a barrel, that would translate to about $4 per gallon at the gasoline pump. At that point, the economy begins to tank. If people are spending $80 twice a week to fill their gas-guzzlers, they have to cut back on other purchases, as they still have to drive to and from work. “Demand destruction” will kick in and people will find a way to drive less and consolidate errands when they do. Gasoline prices will then come back to earth. A geo-political event such as military action by or against Iran could send prices sky high for a brief period and hurt the economy and devastate advertising. Over time, keep in mind that oil prices will likely rise, as overseas demand will continue to grow.
That is how we see 2012. It will likely be a year of incremental growth for many media types but much will be determined by specifically where you live.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Overview
If you have read the trade press in recent weeks, some very similar forecasts have emerged. Globally, advertising will be up in the 4.7% range and would have been over 5% had worries over European debt and currency threatened a severe recession there. In the U.S. things will move up fairly well with billing growth in the 3-4% range but pre-recession levels of spending (from 2007) will not be matched across the board until maybe 2015-2016. I have no real issues with any of those prognostications. My point in this post is that if you dig a bit deeper things are significantly different market to market and medium to medium.
In no specific order, here goes:
Network TV—the king will remain king as large brands seeking awareness will continue to flock to it and bid up prices despite declining ratings and continued growth in commercial avoidance. The upfront marketplace will continue for another year for sure. Depending on the economy, a 5-6% gain seems likely.
Network Cable—growth will be nice here but more in line with network TV than the double-digit gains of recent years. As the medium has grown, it is coming off a larger base each year so jumps in billing and pricing will be smaller but still good in a flat-lined economy.
Spot TV—this one will require a lot of attention from media planners this year. Virtually every forecast out there says expect a 4% billing gain for 2012 with a 2.5% uptick if you take out the impact of political advertising. Next year will bring new meaning to the old statistical saw that “you can drown in a river with an average depth of six inches.”
Some markets have come back nicely from the 2008-2009 recession (economists claim that we pulled out of recession in 2009. Tell that to some of the broadcasters whom I interviewed!) . Other markets are really struggling and expect another poor year. One Midwestern TV G.M. told me, “We expect no political billing of note. This is not a battleground state for the presidency and we have no Senate race. I try to explain to headquarters that we have absolutely no pricing power. Good clients come in and want pricing from years ago and we have to give it to them. If not they will go to someone who will meet their demands or load up on radio and local cable. Will we ever return to normal?”
The epicenter of America’s boomtowns is now amazingly Williston, North Dakota. Hiring is so robust that fast food outlets are now paying $15 for counter help. As long as the oil and gas boom continues there, things will be fine. But, most Americans are not willing to spend a winter in Williston. And, if you have a mortgage that is underwater (like 24% of mortgage holders), you cannot leave even if you wish. Conversely, Cleveland and Youngstown, Ohio are bulldozing foreclosed or abandoned homes to provide green space in their cities and prop up sagging property values.
With both parties possibly having a billion dollar war chest for advertising next year one would think the networks would get the brunt of it. Not so. Both sides will run on both network TV and national cable but much of the money will be spent in 10-12 battleground states. Topping the list will be Florida and Ohio (natch), along with Pennsylvania, Iowa, Wisconsin, Nevada, Colorado, and Virginia. This list will change a bit as we move through fall 2012.
With the GOP a few seats away from recapturing the Senate, look for huge spending in local races in the following states—Massachusetts, Montana, Nevada, New Mexico, Wisconsin, Missouri, and Virginia.
Candidly, next October will be a bad time to turn on the TV set in either Ohio or Wisconsin. Being battlegrounds for both the presidential race plus hot and well-funded Senate contests, it might be a good time to stick to PBS, C-Span, or HBO.
Auto and truck sales were up a solid 10% from 2010 to 2011 and that clearly helped some spot markets and will likely do it again in 2012. Please remember that when unemployment is over 10% and housing still tanking, some markets will not sell many cars nor see much local vehicle advertising.
The whole political situation raises a core question that a few people were willing to discuss with me. The parent company wants dollars. As a rule, they do not care where they come from client wise. Twenty-five years ago, stations hated political advertising. They had to charge a low fixed rate, could not pre-empt the politicians and they had to offer good inventory to all candidates. Now, they look forward to it. Across many markets, it has become the mother’s milk of local TV advertising. Without political money, many stations would be down in billing for 2012 and some fairly significantly. This is not a good long-term trend for the medium.
Local Cable—with the ability to sell zones or portions of a cable interconnect, this medium with some hustling has been able to bring many small local retailers on to TV over the last few years. Also, they can handle congressional districts or state senate races with far less waste than over the air TV. Growth here will vary depending on the strength of the local economy and the heat of political races. They should do better than local TV stations in most cases.
Radio—most see gains of approximately 2% but, again, it will vary by market. In mid-sized and smaller markets, I am told that collection problems are still a big issue as more and more small retailers are struggling or closing their doors in economically challenged metros. This has always been a problem with local radio but seems to not be improving much even as the economy is inching up.
Certain formats lend themselves well to political advertising. Sports formats continue to do well even in some areas where the economy is not particularly strong. A big development in the last year has been that local radio has been developing digital products for advertisers. They are even elbowing their way in on the daily deal business in certain larger markets.
Outdoor—a 4-5% gain seems likely. Digital boards remain popular and they will benefit from political spending as well. Keep in mind that outdoor remains the last mass medium.
Newspaper—the downward spiral will continue. An optimistic outlook would say that they would be down 9% after strong double digit declines of recent years. Most papers have not been able to convert many readers to their digital product and the under 40’s continue to avoid it. When I travel, it stuns me how weak the products are and how much wire service copy that they all use. Sad, but this is the reality of the 2012 world.
Magazines—they get thinner and thinner except for a few trendy titles and some beauty books. Some well known titles will die this year. It is a shame but most do not fit in to today’s lifestyle all that well. Pricing is often wide open—negotiations should be fun again this year.
On-Line—double digit year over year gains will be found here. And, there is room for growth! They may get 15% of billing next year but we spend 36% of our media time online. As print falters, more players of all sizes will shift money here.
Daily Deals—this business usually means Groupon or Living Social to most people. Actually, there are hundreds of entrants in the category and broadcasters, especially smart radio operators, are getting in to the act via their websites. Groupon timed their Initial Public Offering (IPO) perfectly. To me, their business model seems way too labor intensive and retailers complain that people who use Groupon coupons do not “stick” and return again and again. This could be an area with a shakeout as many daily deal players, especially the under-capitalized, fall to the wayside.
Social Media—this one had the entire buzz last year but may generate more in 2012. Facebook will have 1 billion users this year and should become a public company by year-end. What will they do with all that capital? Acquisitions would make sense but I think that they will use new technology to really heat up social commerce. So will others in the space. There is talk of an Apple TV set that will blend on-line with more conventional TV properties with opportunities for sales.
Major companies have piled in to social media and they are getting a decent handle on it and integrating it with varying degrees of success in to their marketing communications programs. But, small retailers seem to hate it or are afraid of it. Why? They do not devote enough time to it nor do they have the staff on hand to maximize its usefulness. There is still a bit of hocus-pocus here but the big players are getting more accountable and the big spenders are getting more imaginative and are hedging their bets more shrewdly with it.
The Wild Card—Oil Prices. As an economy grows, demand for petroleum-based products, particularly gasoline, goes up. So, as we write, oil is approximately $100 a barrel. The economy can handle that easily and even more if the economy improves modestly throughout 2012. If we get to $130+ a barrel, that would translate to about $4 per gallon at the gasoline pump. At that point, the economy begins to tank. If people are spending $80 twice a week to fill their gas-guzzlers, they have to cut back on other purchases, as they still have to drive to and from work. “Demand destruction” will kick in and people will find a way to drive less and consolidate errands when they do. Gasoline prices will then come back to earth. A geo-political event such as military action by or against Iran could send prices sky high for a brief period and hurt the economy and devastate advertising. Over time, keep in mind that oil prices will likely rise, as overseas demand will continue to grow.
That is how we see 2012. It will likely be a year of incremental growth for many media types but much will be determined by specifically where you live.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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