With its VP of Sales saying, “Traditional dealerization doesn’t work anymore,” Hyundai is taking steps to reward its best dealers with more territory, giving them the chance to move into more markets and “dot the regions with offsite storefronts, used-car lots, service centers, quick lube shops, even traveling roadshows,” according to Automotive News.
“We want to take our really good dealers and give them additional points,” Hyundai’s Dave Zuchowski said. “We want to try to have dealers take control larger market areas. We are trying to be creative.” He added “We think there are some really cool, nontraditional approaches, which are going to help (dealers’) return on investment.” As an example, Zuchowski said instead of having four dealers in one sales region, that region might be consolidated with one dealer “but maybe not with four different, full-blown facilities.”
Hyundai had been pursuing an effort to increase the number of exclusive stores, which currently account for 53% of the 750+. The new idea “is being driven specifically in high-cost markets like California, where we have some opportunities and where we have a lot of open points,” Zuckowski said. “It is very difficult to be a stand-alone Hyundai dealer in California. It has the most expensive real estate, media costs, employees’ cost, advertising, everything.”
Auto News says Hyundai may buy out highlighted stores to help dealers, it sees as more promising—in order to take control of expanded territory. It might also lease unused local store space. “You can get into a lot of empty Kmarts and empty buildings,” Zuchowski said. “We are looking at picking up short-term leases on buildings for the dealers. If it works we’ll lock up something more long term.”
Hyundai did not meet its sales goals for 2007, but Auto News says that setback has not stopped its executives from setting another aggressive target for this year. After several years of strong growth, the brand was flat in 2006 and up 2.5% last year, falling far short of its goals (467,000 units against an original target of 555,000, but still outpacing the overall market). It’s targeting 500,000 in sales this year. “Our rallying cry is 500,000 units, regardless of what the industry is doing,” Zuchowski said.
Like some of its competitors, Hyundai is changing its dealership bonus plan--last year almost a third of dealerships got no bonus from the company because the individual goals for their stores were set too high to have a real chance of being met. The new plan is a “stair-step” incentive that’s the same for all dealerships. The store that sells 4-29 units a month receives $250 per vehicle sold; 30-54 units bring the dealer an additional $500 each; and, 65+ units a month are worth $750 each to the dealership. Dealers that have exclusive stores and work with Hyundai’s captive finance arm receive an additional $100 a unit in floor-planning assistance.
Of course the big initiative for Hyundai this year is rebuilding dealer associations. Dealers will contribute $150 per vehicle ordered and the company will kick in $80 million nationally to the associations. And for tier 3 ads, the company will contribute $300 per vehicle ordered.
Tuesday, January 29, 2008
Monday, December 3, 2007
Younger Buyers Steering Away From Domestics
AS HARD AS DOMESTIC CAR and truck manufacturers have been trying to win younger buyers on the coasts with messages about vehicle quality, reliability and youth, they aren't swaying younger buyers just yet.
According to J.D. Power and Associates' "2007 Avoider Study," released Thursday, pro-domestic and pro-import vehicle buyers are divergent in age and region. The study found that the younger a buyer is, the more he or she is likely to avoid domestic cars and trucks. Conversely, buyers who purchase domestic vehicles are more likely than younger buyers to avoid a vehicle because it's an import.
Younger buyers also give more importance to gas mileage as a reason for purchasing, versus older buyers. Generally, domestic-vehicle buyers say styling and cost are the biggest reasons they avoid import vehicles.
The study, in its fifth year, is based on responses from over 35,000 vehicle owners who registered their cars and trucks in May this year. The study takes a contrarian look at consumer choices, focusing on the ones that got away: cars and trucks that consumers didn't consider and why.
The study found that the highest number of domestic-vehicle buyers (41%) who do not even consider import brands during the shopping process live in the North Central region of the United States, per J.D. Power.
Their opposites--younger import buyers--are concentrated in the coastal areas, per the consultancy, with the Northeast and the West Coast populated by the largest numbers of import vehicle buyers who eschew domestic vehicles entirely. The most common reasons: concerns about reliability, fuel economy, quality and depreciation.
Says Jon Osborn, director of media/marketing research at J.D. Power and Associates: "Import buyers seemed to have a list of substantiated reasons for not buying domestic, such as reputation and quality, depreciation and gas mileage."
Gas mileage, or in some cases perceived gas mileage, is the most frequently mentioned reason for purchasing a vehicle, while it remains the seventh most frequently cited reason for avoiding a particular vehicle model. In all regions, compact cars and SUVs were the most popular vehicles, followed by mid-sized vehicles.
Osborn says Hummer H3 is the most-avoided model in its segment due to fuel economy. But he says EPA fuel economy estimates for the vehicle are around the same as for Jeep Commander and Chrysler Aspen, which don't have the same stigma, and enjoy lower avoidance rates.
Also, the study found that buyers are basing their decisions not to buy a vehicle on consumer-generated content online, particularly consumer reviews, followed by expert reviews and manufacturer site information.
Among all new-vehicle buyers, the top reasons for buying or avoiding a vehicle were reliability and fuel economy, at 34% each. Then comes exterior styling, performance, and quality of workmanship. The most frequently mentioned parameter in the Northeast and West was reliability, while fuel economy was the most mentioned in the North Central region of the U.S.
According to J.D. Power and Associates' "2007 Avoider Study," released Thursday, pro-domestic and pro-import vehicle buyers are divergent in age and region. The study found that the younger a buyer is, the more he or she is likely to avoid domestic cars and trucks. Conversely, buyers who purchase domestic vehicles are more likely than younger buyers to avoid a vehicle because it's an import.
Younger buyers also give more importance to gas mileage as a reason for purchasing, versus older buyers. Generally, domestic-vehicle buyers say styling and cost are the biggest reasons they avoid import vehicles.
The study, in its fifth year, is based on responses from over 35,000 vehicle owners who registered their cars and trucks in May this year. The study takes a contrarian look at consumer choices, focusing on the ones that got away: cars and trucks that consumers didn't consider and why.
The study found that the highest number of domestic-vehicle buyers (41%) who do not even consider import brands during the shopping process live in the North Central region of the United States, per J.D. Power.
Their opposites--younger import buyers--are concentrated in the coastal areas, per the consultancy, with the Northeast and the West Coast populated by the largest numbers of import vehicle buyers who eschew domestic vehicles entirely. The most common reasons: concerns about reliability, fuel economy, quality and depreciation.
Says Jon Osborn, director of media/marketing research at J.D. Power and Associates: "Import buyers seemed to have a list of substantiated reasons for not buying domestic, such as reputation and quality, depreciation and gas mileage."
Gas mileage, or in some cases perceived gas mileage, is the most frequently mentioned reason for purchasing a vehicle, while it remains the seventh most frequently cited reason for avoiding a particular vehicle model. In all regions, compact cars and SUVs were the most popular vehicles, followed by mid-sized vehicles.
Osborn says Hummer H3 is the most-avoided model in its segment due to fuel economy. But he says EPA fuel economy estimates for the vehicle are around the same as for Jeep Commander and Chrysler Aspen, which don't have the same stigma, and enjoy lower avoidance rates.
Also, the study found that buyers are basing their decisions not to buy a vehicle on consumer-generated content online, particularly consumer reviews, followed by expert reviews and manufacturer site information.
Among all new-vehicle buyers, the top reasons for buying or avoiding a vehicle were reliability and fuel economy, at 34% each. Then comes exterior styling, performance, and quality of workmanship. The most frequently mentioned parameter in the Northeast and West was reliability, while fuel economy was the most mentioned in the North Central region of the U.S.
Monday, August 6, 2007
US Ad Spending 2007 Outlook
Ad Spending now is projected to grow only 3.1% in 2007, according to revised estimates released Tuesday by industry forecaster Bob Coen. That's a significant downward revision from the 4.8% the Universal McCann director of forecasting originally projected in December, and means the ad industry will once again fail to keep pace with overall U.S. economic growth. The downgrade is the latest in a series of downward revisions issued by other leading industry forecasters and suggests that some fundamental shifts are taking place in the industry's economics, as advertisers continue to shift money out of traditional media and into new and emerging media platforms, especially online. The fastest growing of the major media tracked by Coen - and the only one projected to rise at double-digit rates - is the Internet, which he predicts will rise 15% to $10.715 billion in 2007. That's about three times the 5.9% rate of growth of the overall national media marketplace, and it doesn't even factor in some of the fastest growing areas of online advertising, including search, social networks and online video.
Those and other emerging platforms - such as mobile marketing, video games, advanced television, and digital out-of-home networks - will actually grow at double the official online rate, rising 31.7% in 2007, according to a companion forecast presented Tuesday by Brian Wieser, senior vice president-director of industry analysis at Universal's sister agency Magna Global.
The side-by-side forecast presentations were a symbolic counterpoint, with Coen representing the old world of the advertising economy and Wieser the new one, which some believe may be responsible for sucking some of the wind out of traditional advertising spending.
Asked what the real growth rate would be for the overall advertising economy if the emerging platforms were factored into the total equation, Coen said it could add as much as a half a percentage point to the industry's growth. "Instead of that figure being 3.1% it might be 3.5% or 3.6%," he said.
But the changes taking place in advertising spending aren't simply a shift from old media to new, said Magna's Wieser, but an even more fundamental redeployment.
"What's actually happening, I would argue, is advertisers are shifting their money out of media that we define as ad-supported media into marketing," said Wieser, adding, "And it's very difficult to measure that."
Some of that spending is going into so-called "below-the-line" marketing services like direct response and promotion that aren't classified as advertising budgets, while others are going into new media platforms that have yet to be classified.
Coen, who has been a fierce champion of the classic definition of advertising, acknowledged Tuesday that it might be time to redefine its meaning to encompass new media and new methods of marketing communications.
In fact, Wieser noted that many of the fastest growing of the emerging platforms still haven't figured out how to "monetize" their reach in terms of advertising revenues. For example, he estimated that for all their growth, online social networks would take in only about $685 million in advertising revenues this year. While that's up a whopping 148% from the $276 million advertisers spent on social networks in 2006, it's still only a fraction of their relative growth in terms of share of total Internet page views. Wieser estimated that the page views of social networks would rise nearly 99% this year vs. only 2.6% for total Internet page views.
He also predicted that social media ad spending would top $1 billion next year, rising 48.9% over 2007.
Similarly, online video is growing rapidly, but still is a relatively small share of total ad spending. With an estimated $365.5 million in ad sales during 2007, online video will grow 55.5% over 2006, but will still account for less than 1% of the total TV advertising marketplace. Wieser projected that online video advertising would 53.2% to $560 million in 2008.
While still small in the context of the total advertising marketplace, these emerging media nonetheless will continue to outpace the overall advertising economy by a wide margin. According to his first estimates for 2008, Coen expects U.S. ad spending to rise only 5.0% to $305 billion in 2008.
Revised 2007 Outlook For U.S. Ad Spending
Those and other emerging platforms - such as mobile marketing, video games, advanced television, and digital out-of-home networks - will actually grow at double the official online rate, rising 31.7% in 2007, according to a companion forecast presented Tuesday by Brian Wieser, senior vice president-director of industry analysis at Universal's sister agency Magna Global.
The side-by-side forecast presentations were a symbolic counterpoint, with Coen representing the old world of the advertising economy and Wieser the new one, which some believe may be responsible for sucking some of the wind out of traditional advertising spending.
Asked what the real growth rate would be for the overall advertising economy if the emerging platforms were factored into the total equation, Coen said it could add as much as a half a percentage point to the industry's growth. "Instead of that figure being 3.1% it might be 3.5% or 3.6%," he said.
But the changes taking place in advertising spending aren't simply a shift from old media to new, said Magna's Wieser, but an even more fundamental redeployment.
"What's actually happening, I would argue, is advertisers are shifting their money out of media that we define as ad-supported media into marketing," said Wieser, adding, "And it's very difficult to measure that."
Some of that spending is going into so-called "below-the-line" marketing services like direct response and promotion that aren't classified as advertising budgets, while others are going into new media platforms that have yet to be classified.
Coen, who has been a fierce champion of the classic definition of advertising, acknowledged Tuesday that it might be time to redefine its meaning to encompass new media and new methods of marketing communications.
In fact, Wieser noted that many of the fastest growing of the emerging platforms still haven't figured out how to "monetize" their reach in terms of advertising revenues. For example, he estimated that for all their growth, online social networks would take in only about $685 million in advertising revenues this year. While that's up a whopping 148% from the $276 million advertisers spent on social networks in 2006, it's still only a fraction of their relative growth in terms of share of total Internet page views. Wieser estimated that the page views of social networks would rise nearly 99% this year vs. only 2.6% for total Internet page views.
He also predicted that social media ad spending would top $1 billion next year, rising 48.9% over 2007.
Similarly, online video is growing rapidly, but still is a relatively small share of total ad spending. With an estimated $365.5 million in ad sales during 2007, online video will grow 55.5% over 2006, but will still account for less than 1% of the total TV advertising marketplace. Wieser projected that online video advertising would 53.2% to $560 million in 2008.
While still small in the context of the total advertising marketplace, these emerging media nonetheless will continue to outpace the overall advertising economy by a wide margin. According to his first estimates for 2008, Coen expects U.S. ad spending to rise only 5.0% to $305 billion in 2008.
Revised 2007 Outlook For U.S. Ad Spending
National Media
- Four TV Networks: $17.175 billion (+3.0%)
- Spot TV: $11.150 billion (-1.0%)
- Cable TV Networks: $20.190 billion (+4.50%)
- Syndication TV: $3.165 billion (-2.0%)
- Total TV: $51.490 billion (+2.3%)
- Radio: $4.550 billion (+2.5%)
- Magazines: $13.595 billion (+4.0%)
- Newspapers: $7.015 billion (-1.0%)
- Total Major Consumer Media: $77.650 billion (+2.2%)
- Direct Mail: $61.575 billion (+5.0%)
- Yellow Pages: $2.205 billion (+2.0%)
- Internet: $10.640 billion (+17.0%)
- Other National Media: $38.010 billion (+4.0%)
- Total National: $190.080 billion (+4.2%)
Local Media
- Newspapers: $38.880 billion (-1.5%)
- Television: $15.335 billion (+3.0%)
- Radio: $15.505 billion (+2.0%)
- Yellow Pages: $12.430 billion (+2.0%)
- Other Local Media: $18.080 billion (+3.7%)
- Total Local: $100.200 billion (+1.1%)
Total (All Media): $290.300 billion (+3.1%)
Source: Universal McCann
Court TV Morphs Into TruTV
NEW YORK (AdAge.com) -- The verdict is in, and Court TV's new name as of Jan. 1, 2008, will be ... TruTV. As Court TV General Manager Marc Juris announced at the Turner entertainment upfront presentation in March, the network's rebranding has been in the pipeline for several months.
Fourth-quarter rollout. Turner Entertainment President Steve Koonin said an official rebranding campaign for the network will begin to roll out in fourth quarter, likely around Oct. 1, with a heavy push kicking in around the holidays.
Renaming the established network was a tricky process that ultimately led Mr. Koonin and his team to examine the five letters in the word "court." After spelling the last three letters backwards ("T-R-U"), he was led to the possibility of "Tru TV," which was tested against its more traditional Webster's spelling with viewers and came out on top.
"It's a wink and nod to the past," Mr. Koonin said. "You always have to let the viewer pick."
Content shift. Since being acquired by Time Warner in May 2006, Court TV has undergone a major shift in both programming and infrastructure, losing CEO-Chairman Henry Schleiff to the same position at Hallmark Channel, ad-sales chief Charlie Collier leaving to become GM at Rainbow Media's AMC and research exec Debbie Reichig now reporting to Beth Comstock at NBC Universal.
On the content side, the network has also taken a gradual step away from its breaking news coverage and cops-and-courts fare to more reality-based shows such as "Forensic Files" and John Waters' "Til Death Do Us Part." Forthcoming shows include "Ski Patrol," a reality series about high-stakes life on the slopes; "Black Gold," an oil-rig series from the producers of Discovery's "Deadliest Catch"; and a new daily talk show from ex-"View" host Star Jones premiering Aug. 20.
'Real engagers'. In the age of YouTube and "you" being Time magazine's Person of the Year, Mr. Koonin considers his audience to be "real engagers," and will seek out programming that "speaks to the people." He said user-generated content could also start appearing on network and online.
Early reaction in the buying community sparked curiosity, if not instant approval, of the new moniker. One buyer said, "I'm checking my calendar now to make sure it's not really April 1."
Higher visibility. "I guess it's better than False TV," said Brad Adgate, senior VP-director of research at Horizon. "They have the wherewithal at getting the word out. Quality shows have been running on Court TV for years, [and the Turner acquisition] has helped boost their ratings to higher visibility in the TV landscape."
Shari Anne Brill, Carat's VP-programming, added, "They seem to have a very clear vision of what the new brand will be and who their audience to the network will also be. I look forward to seeing the vision come to life when the channel launches."
Cable networks rebranding themselves under new names or ownership is hardly new. When Viacom acquired TNN (The Nashville Network) in 2000, it rechristened the channel as The National Network for three years before switching to Spike TV in 2003, complete with a new target of males 18 to 34. More recently, Comcast changed the name of its Outdoor Living Network to Versus, with a focus on hockey and nontraditional sports coverage to serve as an alternative to ESPN.
Fourth-quarter rollout. Turner Entertainment President Steve Koonin said an official rebranding campaign for the network will begin to roll out in fourth quarter, likely around Oct. 1, with a heavy push kicking in around the holidays.
Renaming the established network was a tricky process that ultimately led Mr. Koonin and his team to examine the five letters in the word "court." After spelling the last three letters backwards ("T-R-U"), he was led to the possibility of "Tru TV," which was tested against its more traditional Webster's spelling with viewers and came out on top.
"It's a wink and nod to the past," Mr. Koonin said. "You always have to let the viewer pick."
Content shift. Since being acquired by Time Warner in May 2006, Court TV has undergone a major shift in both programming and infrastructure, losing CEO-Chairman Henry Schleiff to the same position at Hallmark Channel, ad-sales chief Charlie Collier leaving to become GM at Rainbow Media's AMC and research exec Debbie Reichig now reporting to Beth Comstock at NBC Universal.
On the content side, the network has also taken a gradual step away from its breaking news coverage and cops-and-courts fare to more reality-based shows such as "Forensic Files" and John Waters' "Til Death Do Us Part." Forthcoming shows include "Ski Patrol," a reality series about high-stakes life on the slopes; "Black Gold," an oil-rig series from the producers of Discovery's "Deadliest Catch"; and a new daily talk show from ex-"View" host Star Jones premiering Aug. 20.
'Real engagers'. In the age of YouTube and "you" being Time magazine's Person of the Year, Mr. Koonin considers his audience to be "real engagers," and will seek out programming that "speaks to the people." He said user-generated content could also start appearing on network and online.
Early reaction in the buying community sparked curiosity, if not instant approval, of the new moniker. One buyer said, "I'm checking my calendar now to make sure it's not really April 1."
Higher visibility. "I guess it's better than False TV," said Brad Adgate, senior VP-director of research at Horizon. "They have the wherewithal at getting the word out. Quality shows have been running on Court TV for years, [and the Turner acquisition] has helped boost their ratings to higher visibility in the TV landscape."
Shari Anne Brill, Carat's VP-programming, added, "They seem to have a very clear vision of what the new brand will be and who their audience to the network will also be. I look forward to seeing the vision come to life when the channel launches."
Cable networks rebranding themselves under new names or ownership is hardly new. When Viacom acquired TNN (The Nashville Network) in 2000, it rechristened the channel as The National Network for three years before switching to Spike TV in 2003, complete with a new target of males 18 to 34. More recently, Comcast changed the name of its Outdoor Living Network to Versus, with a focus on hockey and nontraditional sports coverage to serve as an alternative to ESPN.
Thursday, June 28, 2007
Papers' Reader Tally to Change
I found this article on-line (irony at it's finest) from the Sacramento Bee reporting how newspapers are creating new ways to exagerate their circulation and get credit for the early adapters that abandoned fish wrap for the Internet years ago. In light of the Dallas Morning News fiasco from a year ago, I find this hilarious! Enjoy, ~ Curt
Sacramentan Kasey Cotulla is a loyal reader of The Bee. But when the newspaper tallies up its paying customers, Cotulla is among the missing.
The Curtis Park resident dropped his subscription about two years ago and only reads the paper online, for free. "I feel like I get the highlights," said Cotulla, 42, a small-business owner.
For decades, newspaper audience -- the basis for setting advertising rates -- has been measured by paid circulation. Now, caught up in a multimedia world that is siphoning off circulation and advertising dollars, newspaper publishers are trying to make people like Cotulla count.
The industry-supported Audit Bureau of Circulations, a nonprofit organization that verifies newspaper circulation, is about to roll out a system for counting papers' total audience. The system will go beyond paid circulation and include measurements of "pass-along" print readership -- reflecting the copies that are shared among friends or members or a household -- and the paper's local Web site traffic.
Newspaper executives admit the new system won't solve everything but say it will blunt the notion that newspapers are doomed -- and help them reverse their slide in ad revenue. They note that it has the endorsement of the ad community, which is a partner in ABC.
"It's important for people to realize that more people want what we produce today than wanted it yesterday," said Gary Pruitt, chairman and chief executive of The McClatchy Co. of Sacramento, parent of The Bee. "Our total audience is growing. That's not an easy thing to do in today's modern media mix. ... We regard that as an important sign that our future is secure."
The new system arrives at a crucial time for newspaper chains, including McClatchy, which one year ago today completed its $4 billion takeover of Knight Ridder Inc.
When McClatchy announced the purchase, in March 2006, the industry was in a troubling but still relatively mild slump, largely caused by structural changes in the business: the migration of some readers and advertising to the Internet and other media.
After the deal wrapped up, things started getting worse and have yet to improve. The ongoing structural problems have been exacerbated by cyclical factors, notably the end of the housing boom. That's cut heavily into real estate ads, particularly at McClatchy's California and Florida papers.
Profits are down, as expenses from the takeover have offset the near-tripling of the company. On a pro forma basis -- meaning as if McClatchy were as big a year ago as it is now -- year-to-date ad sales are off 7.1 percent through May. McClatchy's stock price closed Tuesday at $24.25, down almost 38 percent since the takeover was completed.
Last week the company said it expects the slide to continue through the second half of 2007.
Although newspapers still earn fatter profit margins than most U.S. corporations, this industrywide downturn has intensified the debate over the sector's future. Tribune Co. was forced by rebellious shareholders to sell itself. Dow Jones & Co., publisher of the Wall Street Journal, is being pursued by Rupert Murdoch's News Corp.
Layoffs and buyouts have become routine. McClatchy has avoided across-the-board layoffs but has conducted selective employee buyouts and made other cost-cutting moves.
In addition, McClatchy sold its largest paper, the well-respected but struggling Star Tribune of Minneapolis, at a hefty loss to a private equity firm that has begun downsizing the staff. Pruitt said the Minneapolis staff cuts sadden him but confirm the wisdom of selling the paper.
"We're trying to make the best decisions in the long-term interest of the company," he said. "Occasionally, these decisions will not be popular, but it doesn't mean they're wrong."
Pruitt said McClatchy is stronger than it was a year ago. During the eight months between the acquisition of Knight Ridder and the sale of the Star Tribune, McClatchy's cash flow -- a measure of profitability -- declined just 0.3 percent on a pro forma basis. If McClatchy hadn't done the Knight Ridder and Minneapolis deals, cash flow would have dropped 16.3 percent.
Despite growth online, non-Internet products still account for more than 90 percent of McClatchy's revenue. Meanwhile, the company's weekday circulation fell 3.2 percent in the six months ending March 31, according to the latest ABC figures. Sunday circulation was off 2.6 percent. Both figures were roughly in line with industry averages.
McClatchy officials say that about half the decline in circulation was due to a decision to scale back some promotions, including "third-party" circulation programs. Third-party programs are bulk sales to customers like hotels, which then distribute the papers free.
No wonder, experts say, that newspapers are pushing the new ABC initiative. The organization has given its preliminary approval and is expected to make it official in July. Newspapers could begin reporting total audience figures late this fall, when the numbers for the six months ending Sept. 30 are published.
"It's an important and very valid measure of a newspaper's reach," said Peter Zollman, an advertising consultant whose clients include McClatchy. But he added: "There is no cure-all for the newspaper industry."
Newspaper executives believe the new numbers will provide ample evidence of a healthy industry. McClatchy officials cite The Bee as an example.
Frank Whittaker, McClatchy vice president for operations and an ABC board member, said The Bee's weekday circulation fell 3.4 percent to 283,561 between 2000 and 2006. But total audience -- from paid circulation, pass-along readership and online traffic -- grew 15.3 percent to 1,054,900.
"We can only help ourselves by providing this data," Whittaker said. Although the ABC plan is voluntary, "we think it is the right move for the newspaper industry, and therefore the right move for McClatchy," he said.
The ad industry, through its part ownership of ABC, has signed on to the concept of estimating total audience. "We've used it in other media for years," said Dave Walker, an ABC board member.
But some big advertisers, like Macy's Inc., aren't sure what to make of it.
The retailer doesn't do a lot of advertising on newspapers' Web sites. Nor does it place a lot of value on the "pass-along" readership of the print paper, said Mike Monroe, vice president for media at Macy's regional office in San Francisco.
While Macy's believes total audience figures "could be useful numbers," it remains focused on paid print circulation, Monroe said. That's because its research shows that many of its shoppers buy the paper partly to see the Macy's ads, he said.
"I want the guy that wants the newspaper," Monroe said.
Some advertisers may be leery of the methods used to calculate total audience. There are various systems used to measure Web page views, and "when I look at that information, I take it with a grain of salt," Monroe said.
Similarly, newspapers have been offering estimates of pass-along readership for years, but the research has met with mixed reactions from advertisers.
Sacramentan Kasey Cotulla is a loyal reader of The Bee. But when the newspaper tallies up its paying customers, Cotulla is among the missing.
The Curtis Park resident dropped his subscription about two years ago and only reads the paper online, for free. "I feel like I get the highlights," said Cotulla, 42, a small-business owner.
For decades, newspaper audience -- the basis for setting advertising rates -- has been measured by paid circulation. Now, caught up in a multimedia world that is siphoning off circulation and advertising dollars, newspaper publishers are trying to make people like Cotulla count.
The industry-supported Audit Bureau of Circulations, a nonprofit organization that verifies newspaper circulation, is about to roll out a system for counting papers' total audience. The system will go beyond paid circulation and include measurements of "pass-along" print readership -- reflecting the copies that are shared among friends or members or a household -- and the paper's local Web site traffic.
Newspaper executives admit the new system won't solve everything but say it will blunt the notion that newspapers are doomed -- and help them reverse their slide in ad revenue. They note that it has the endorsement of the ad community, which is a partner in ABC.
"It's important for people to realize that more people want what we produce today than wanted it yesterday," said Gary Pruitt, chairman and chief executive of The McClatchy Co. of Sacramento, parent of The Bee. "Our total audience is growing. That's not an easy thing to do in today's modern media mix. ... We regard that as an important sign that our future is secure."
The new system arrives at a crucial time for newspaper chains, including McClatchy, which one year ago today completed its $4 billion takeover of Knight Ridder Inc.
When McClatchy announced the purchase, in March 2006, the industry was in a troubling but still relatively mild slump, largely caused by structural changes in the business: the migration of some readers and advertising to the Internet and other media.
After the deal wrapped up, things started getting worse and have yet to improve. The ongoing structural problems have been exacerbated by cyclical factors, notably the end of the housing boom. That's cut heavily into real estate ads, particularly at McClatchy's California and Florida papers.
Profits are down, as expenses from the takeover have offset the near-tripling of the company. On a pro forma basis -- meaning as if McClatchy were as big a year ago as it is now -- year-to-date ad sales are off 7.1 percent through May. McClatchy's stock price closed Tuesday at $24.25, down almost 38 percent since the takeover was completed.
Last week the company said it expects the slide to continue through the second half of 2007.
Although newspapers still earn fatter profit margins than most U.S. corporations, this industrywide downturn has intensified the debate over the sector's future. Tribune Co. was forced by rebellious shareholders to sell itself. Dow Jones & Co., publisher of the Wall Street Journal, is being pursued by Rupert Murdoch's News Corp.
Layoffs and buyouts have become routine. McClatchy has avoided across-the-board layoffs but has conducted selective employee buyouts and made other cost-cutting moves.
In addition, McClatchy sold its largest paper, the well-respected but struggling Star Tribune of Minneapolis, at a hefty loss to a private equity firm that has begun downsizing the staff. Pruitt said the Minneapolis staff cuts sadden him but confirm the wisdom of selling the paper.
"We're trying to make the best decisions in the long-term interest of the company," he said. "Occasionally, these decisions will not be popular, but it doesn't mean they're wrong."
Pruitt said McClatchy is stronger than it was a year ago. During the eight months between the acquisition of Knight Ridder and the sale of the Star Tribune, McClatchy's cash flow -- a measure of profitability -- declined just 0.3 percent on a pro forma basis. If McClatchy hadn't done the Knight Ridder and Minneapolis deals, cash flow would have dropped 16.3 percent.
Despite growth online, non-Internet products still account for more than 90 percent of McClatchy's revenue. Meanwhile, the company's weekday circulation fell 3.2 percent in the six months ending March 31, according to the latest ABC figures. Sunday circulation was off 2.6 percent. Both figures were roughly in line with industry averages.
McClatchy officials say that about half the decline in circulation was due to a decision to scale back some promotions, including "third-party" circulation programs. Third-party programs are bulk sales to customers like hotels, which then distribute the papers free.
No wonder, experts say, that newspapers are pushing the new ABC initiative. The organization has given its preliminary approval and is expected to make it official in July. Newspapers could begin reporting total audience figures late this fall, when the numbers for the six months ending Sept. 30 are published.
"It's an important and very valid measure of a newspaper's reach," said Peter Zollman, an advertising consultant whose clients include McClatchy. But he added: "There is no cure-all for the newspaper industry."
Newspaper executives believe the new numbers will provide ample evidence of a healthy industry. McClatchy officials cite The Bee as an example.
Frank Whittaker, McClatchy vice president for operations and an ABC board member, said The Bee's weekday circulation fell 3.4 percent to 283,561 between 2000 and 2006. But total audience -- from paid circulation, pass-along readership and online traffic -- grew 15.3 percent to 1,054,900.
"We can only help ourselves by providing this data," Whittaker said. Although the ABC plan is voluntary, "we think it is the right move for the newspaper industry, and therefore the right move for McClatchy," he said.
The ad industry, through its part ownership of ABC, has signed on to the concept of estimating total audience. "We've used it in other media for years," said Dave Walker, an ABC board member.
But some big advertisers, like Macy's Inc., aren't sure what to make of it.
The retailer doesn't do a lot of advertising on newspapers' Web sites. Nor does it place a lot of value on the "pass-along" readership of the print paper, said Mike Monroe, vice president for media at Macy's regional office in San Francisco.
While Macy's believes total audience figures "could be useful numbers," it remains focused on paid print circulation, Monroe said. That's because its research shows that many of its shoppers buy the paper partly to see the Macy's ads, he said.
"I want the guy that wants the newspaper," Monroe said.
Some advertisers may be leery of the methods used to calculate total audience. There are various systems used to measure Web page views, and "when I look at that information, I take it with a grain of salt," Monroe said.
Similarly, newspapers have been offering estimates of pass-along readership for years, but the research has met with mixed reactions from advertisers.
Wednesday, June 20, 2007
'Closer' Has Cable's Best Premiere Ever
There have been a number of high-profile series debuts on broadcast this summer, such as CBS’s “Pirate Master,” Fox’s “On the Lot” and ABC’s “Ex-Wives Club.” But it’s been the returning programs, like NBC’s “America’s Got Talent” and Fox’s “So You Think You Can Dance,” that draw the big audiences.
It's proving the same on cable. On Monday, the third-season premiere of TNT’s “The Closer” shattered basic cable records, clocking the best showing for any original series in cable history. The 9 p.m. program averaged 8.8 million total viewers, improving on last year’s then-record 8.29 million by 6 percent. It also set a record among households with 6.3 million, up 6 percent over last year’s 6.04 million.
“Closer” now stands as this year’s most-watched show on basic cable among total viewers, households and adults 25-54, where it averaged 3.79 million, up 6 percent over last year.
The show stars Kyra Sedgwick as a detective who specializes in wheedling confessions out of criminals but whose personal demons often undermine her confidence.
"Closer" has been a hit since debuting two years ago and was last year’s top-rated cable show among total viewers and 25-54s.
It's proving the same on cable. On Monday, the third-season premiere of TNT’s “The Closer” shattered basic cable records, clocking the best showing for any original series in cable history. The 9 p.m. program averaged 8.8 million total viewers, improving on last year’s then-record 8.29 million by 6 percent. It also set a record among households with 6.3 million, up 6 percent over last year’s 6.04 million.
“Closer” now stands as this year’s most-watched show on basic cable among total viewers, households and adults 25-54, where it averaged 3.79 million, up 6 percent over last year.
The show stars Kyra Sedgwick as a detective who specializes in wheedling confessions out of criminals but whose personal demons often undermine her confidence.
"Closer" has been a hit since debuting two years ago and was last year’s top-rated cable show among total viewers and 25-54s.
Monday, June 4, 2007
Untapped Market: The Poor
I found this on the AMA's site. Very interesting. ~ Curt
While the world's 4 billion poor people are a market that has been largely overlooked for many years, that might not be the case for much longer now that some of the world's largest corporations are beginning to tap into the market, according to a recent article in The New York Times.
Companies such as Unilever sell individual packets of soap in rural villages and urban open-air markets in South Africa and Brazil. And in the telecommunications sector, the biggest growth area is among the poor. C.K. Prahalad, author of the book, “The Fortune at the Bottom of the Pyramid,” recently said at a presentation he was giving, “We have to get away from thinking of the poor as a problem … people have not had a full understanding of the size of the opportunity.” Prahalad, a business consultant and professor at the University of Michigan, says that the purchasing power of poor people might seem small in dollars, but carries more clout in emerging market economies, where goods cost less.
The world’s 4 billion poor are estimated to have $5 trillion of annual purchasing power parity, according to the article. Experts say, though, to tap into the market, innovation is important. Firms have to develop new, affordable products and invent new ways of selling them.
While the world's 4 billion poor people are a market that has been largely overlooked for many years, that might not be the case for much longer now that some of the world's largest corporations are beginning to tap into the market, according to a recent article in The New York Times.
Companies such as Unilever sell individual packets of soap in rural villages and urban open-air markets in South Africa and Brazil. And in the telecommunications sector, the biggest growth area is among the poor. C.K. Prahalad, author of the book, “The Fortune at the Bottom of the Pyramid,” recently said at a presentation he was giving, “We have to get away from thinking of the poor as a problem … people have not had a full understanding of the size of the opportunity.” Prahalad, a business consultant and professor at the University of Michigan, says that the purchasing power of poor people might seem small in dollars, but carries more clout in emerging market economies, where goods cost less.
The world’s 4 billion poor are estimated to have $5 trillion of annual purchasing power parity, according to the article. Experts say, though, to tap into the market, innovation is important. Firms have to develop new, affordable products and invent new ways of selling them.
Subscribe to:
Posts (Atom)