Archive for January, 2010

Signs point to modest ad growth

Friday, January 29th, 2010

Another media watcher sees signs of economic recovery and reason to adopt a more positive outlook for advertising in 2010.

Barclays Capital said Thursday that ad sales could climb 3.5 percent to $167.6 billion this year, which is better than the group’s previous expectation for a flat year, Bloomberg reports.

“While we expect modest aggregate growth for local media advertising in 2010, we also expect national advertising to outpace the growth of local advertising and take share from local overall,” the report says.

Network TV ads, with help from the Olympics and World Cup, may rise 7.8 percent and online ads could grow by 8.9 percent, the report says. Previous estimates were 4.5 percent and 5.7 percent, respectively. Local broadcast TV advertising could grow by 5 percent (3 percent was projected previously) and radio ads could see a 2.2 percent gain instead of a 4 percent decline.

Newspaper ad spending  should drop 5.8 percent, better than the 10 percent loss expected previously. Magazine ads should be down 3 percent instead of the 10 percent decline expected earlier.

Interpublic Group’s forecasting unit said last week it expected a 1.4 percent rise in ad spending overall with the help of the Olympics and elections.

Apple likely to spend millions on iPad ads

Thursday, January 28th, 2010

Amid all the hype for the iPad, Advertising Age gets down to how it may actually help people: “if Apple’s history of introducing the iPod and the iPhone is any guide, tens of millions of dollars in ad spending is fast approaching.”

In 2001, Apple spent $28.5 million advertising the iPod alone or together with iTunes, the magazine says. In 2007, the company spent $16.6 million on ads to introduce the iPhone.

In both campaigns, most money went to network TV followed by consumer magazines then cable TV, and “spot TV, business-to-business magazines and newspapers divided up the slivers.”

McClatchy claims profits, hints at more job cuts

Thursday, January 28th, 2010

The McClatchy Company on Wednesday claimed a profit in the final quarter of 2009 partly attributable to an improving advertising climate, but CEO Gary Pruitt indicated that the company would proceed with more layoffs.

“Given that total ad revenues are still negative and secular challenges remain, we will continue to focus on costs,”  Pruitt said in a statement, according to a New York Times report. Over the past couple of years, “costs” has meant personnel and has translated as job cuts at McClatchy newspapers.

McClatchy posted a 16.5 percent drop in revenue from a year earlier to $393.2 million, and said advertising revenue was down 20.5 percent, to $308.7 million. But, Pruitt said, advertising trends — particularly on the Web and including classifieds — were better in October, November and December.

“McClatchy spent 2009 shrinking itself to match dwindling ad revenue in the recession,” The Associated Press said. “It ended the year with about two-thirds of the payroll it had in the middle of 2008.”

The publisher also announced a deal to delay payments on its $1.95 billion of debt by selling bonds and assuming higher interest rates.

Bargain hunters shop newspapers, survey says

Monday, January 25th, 2010

Newspapers and magazines are still advertisers’ best bet for reaching serious shoppers, a survey released Friday says.

According to an Editor & Publisher report, “23 percent of adults surveyed said that newspaper and magazine advertisements are the place they will find the best bargains. By contrast, 18 percent said the best bargains are found online, 12 percent picked direct mail and catalogs, 11 percent chose television, while just 2 percent said they turned to radio for bargains. “

The Harris Poll for Adweek Media “also found that the older the respondent, the more likely they are to cite newspaper and magazine advertisements. … Among the 44 to 54 age demographic, 24 percent use print ads, while one-third (33 percent) of those 55 and older say newspapers and magazines are the places to find the best bargains.”

Consumers aged 18 to 34 are more likely to say online ads (22 percent) and television commercials (17 percent) are the best places to go.

Women are more likely than men to prefer newspaper and magazine advertisements, or direct mail and catalogs, while more men go online, the survey found.

Older readers moving to social media

Friday, January 22nd, 2010

Newspapers’ reliance on older readers may be yet another false assumption. A study by IBM’s Media and Entertainment group says older readers are moving to social media for news and information, just like younger adults and teens.

Readership of newspapers online fell by 10 percent in 2009, according to IBM’s white paper, with the greatest loss in the 18-24 age range, says Dorian Benkoil at Poynter’s E-Media Tidbits blog.  Use of digital media increased overall, led by older consumers, who accounted for the largest percentage increases in the use of social media.

“The implications are important for those in the news business, and illustrate that newspapers may have less time than they were counting on to figure out how to succeed online,” Benkoil writes.

Karen Feldman, global lead for the media and entertainment group and one of the survey’s lead authors, told Benkoil that “The only digital media category where I saw erosion year over year was online newspapers,” from roughly 64 percent in 2008 who said they had viewed a newspaper online, to 54 percent in 2009.

The study found that “the only group in which there was significant growth” in online newspaper readership “was people older than 55.”

But, if the rest of the study’s findings depict the evolution of consumers’ use of online resources, even the oldest readers are temporary customers on their way to social media.

Projection: 2010 looks strong for online ads

Friday, January 22nd, 2010

Online ad spending will have “a relatively strong year” while spending on traditional media will remain flat, says the Magna unit of the Interpublic Group.

The advertising and marketing services provider’s projections call for a 12.2 percent jump in direct online ad spending, 4 percent growth in national online ads and a 3.7 percent increase in local online ad spending, according to MinOnline.

U.S. advertising revenues will be flat this year, down just 0.1 percent from 2009, but when spending for the Olympics and elections are counted in,  the years sees a 1.4 percent rise in ad spending overall, the report says.

However, Magna’s projections were made before Thursday’s decision by the U.S. Supreme Court that removes restrictions on political ad spending by corporations (see below). The decision is described widely as opening the floodgates for spending.

SCOTUS clears way for corporate political ads

Thursday, January 21st, 2010

The Supreme Court’s decision to remove limits on corporate political spending potentially opens the “floodgates for additional political ad spending by corporations, unions and special interest groups,” Advertising Age said in a report shortly after Thursday’s 5-4 ruling.

“I think it takes an already bulked up [election season] and puts it on steroids,” said Evan Tracey, president of TNS Media Intelligence’s Competitive Media Analysis Group, which tracks campaign finance spending.

“A flood of corporate and union money for ads in federal campaigns is expected as early as this fall’s midterm campaigns,” The Washington Post said.

In the Ad Age report, Tracey “suggested the decision’s biggest impact could be on last-minute spending in major races.”

In a 57-page opinion for the majority, Justice Anthony Kennedy said, “The government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether,” according to the Wall Street Journal.

President Barack Obama condemned the ruling and said he intended to work with Congress to pass legislation that would effectively reverse the Court’s decision.

McClatchy accepts $6M to delay land deal

Thursday, January 21st, 2010

The McClatchy Co.  is pocketing $6 million this week by allowing a suitor to delay closing on a deal to buy land adjacent to the company’s Miami Herald, the Sacramento Business Journal said Wednesday.

Citisquare Group LLC previously paid a $10 million non-refundable deposit and, under the new agreement, if it fails to close the purchase by January 31, 2011, will have to pony up another $7 million.

Citisquare had until December 31, 2009, to close the transaction on 10 acres next to the newspaper plant.

The publisher will release a new look at the land’s value in its 4th quarter earnings report January 27, the Business Journal said.

Garden State media look forward to pot revenues

Thursday, January 21st, 2010

New Jersey’s legalization of medical marijuana should translate into new advertising revenue for traditional media outlets as well as ad agencies, Advertising Age says.

The first six dispensaries have to be nonprofits, which is expected to keep prices down, but then commercial concerns can get in on the trade. ” I can very well envision commercials, much like for Levitra or Claritin, on the airways,” said State Assemblyman Reed Gusciora (D-Princeton), who co-sponsored the bill to legalize medical marijuana.

“Lou Stancampiano, VP at The Jersey Journal, said there is potential for newspaper revenue from the category ‘if it moves into distribution of traditional promoters, like chain pharmacies, people who have a tendency to promote.'” Stancampiano added that hospitals are trdaitionally big newspaper advertisers, and specifically named Jersey City Medical Center as a potential medical marijuana distributor.

Said Jim Rothenberg, executive VP-creative director for D&R Advertising in Fort Lee, “What media they’ll get into, I’m not sure, but I am sure there will be some wonderful creative done.”

Toronto Star holds onto copy editing

Tuesday, January 19th, 2010

The Toronto Star has abandoned a plan to outsource its copy editing, instead going with a new page production desk that will employ about half as many copy editor positions as would have been cut, CBC News reports.

The paper announced the plan in November, then said union concessions could keep it from happening. On Monday, editor Michael Cooke announced a deal with the union and the implementation of a desk with “up to 35” staff members.

The original plan was to cut 70 full-time and eight part-time editorial jobs and another 39 full-time and four part-time pre-press jobs in a bid to save more than $4 million a year.

Copy editing jobs would have been outsourced to a firm called Pagemasters, which does contracted work for the Sydney Morning Herald, The Age in Melbourne and the New Zealand Herald.

The Star is still likely to cut the 43 pre-press jobs, according to the CBC.

“Some 166 employees have accepted voluntary buyouts at the newspaper and the offer has been extended for some [other] areas of the company,” the report says. “Torstar Corp. employs about 7,000 people, while the Star has about 1,300 workers across all its divisions, including its printing plant just north of Toronto.”