Message From Michael -- February 23, 2006

Message From Michael                    (image placeholder)
                                                  February 23, 2006                                                                                          

• SWEEPS – TONIGHT’S THE NIGHT


• OLYMPICS – THE HALF AND HALF STORY AGAIN


• TV’S DAYS ARE NUMBERED


• ONLINE DAYS ARE NUMBERED TOO


• TRADITIONAL VS. NON-TRADITIONAL


• LET’S GO SURFING NOW


• NBC CONVICTS ITUNES


• COCKTAIL CHATTER – THE AMERICAN INVASION

• SWEEPS – TONIGHT’S THE NIGHT:  For what may be “the most competitive night in the history of American television.”  It may sound like hyperbole, but the quote by Dick Ebersol, head of NBC’s Sports and Olympics coverage, in the New York Times may not be as extreme as it may sound at first.  On NBC will be women’s figure skating which has always scored the highest ratings in Winter Olympics.  On Fox will be the special edition of American Idol, which has already beaten the Olympics.  On CBS will be Survivor.  And on ABC will be Dancing With The Stars.  The head of research for CBS, David Poltrack, doesn’t go quite so far as Ebersol, but he makes the point that there have been instances of three strong franchises going against each other (Friends, Survivor and the World Series) but never four against each other.  The article notes that the Salt Lake City Winter Olympics had no competition from any original top-10 programming and during the Nagano Olympics, the only competition was the top-10 rated Home Improvement.  Actually it may be even more competitive than the article notes because the writer doesn’t take into account another big event in television tonight.  As noted in another New York Times article, Spanish-language network Univision will be premiering Premio Lo Nuestro a la Musica Latina, a sort of “people’s choice” music awards show, which is typically the most watched program among Hispanic audiences (except for World Cup Soccer).  Keep in mind that the Spanish-language stations are often-times the number one station in large markets.  


• OLYMPICS – THE HALF AND HALF STORY AGAIN:  On a very much related note, you’ve no doubt heard or read that this year’s Olympics may be the lowest rated Olympics ever, but as we noted in a previous MfM, there is a half-empty and half-full theme still.  First the half empty part – NBC is at risk of not meeting its ratings guarantee to advertisers.  Last Wednesday’s night may ‘qualify’ as the lowest rated night in Winter Olympics history, according to Media Life Magazine.  The Sydney Summer games averaged 21.5 million viewers a night which was a record low then.  This winter’s games are averaging 21.1 million viewers a night.  The half full part – The Associated Press reports that NBC’s “video-rich” Olympics website is setting records, with 167 million pageviews – 22 million more than for the entire 2002 Winter Olympics.  It also set a one-day record with 29 million pageviews.  Plus the site, NBCOlympics.com, has delivered more than 4.2 million video streams.On a related note, Wall Street Journal writer Steve McKee reports that foreign coverage of the Olympics is substantially different from the American version with fewer intrusions by anchors, more focus on the athletes, fewer commercials and less “blathery” analysis.  As he puts it, “this is sports TV for people who get sports.”  And further proof that there are many things I don’t understand, The Olympic sport Curling has proven a ‘cult’ favorite, giving NBC its best Saturday night ratings since the start of the Iraq war three years ago.  And the Wall Street Journal, again, reports that Curling helped CNBC triple its average viewership from 5pm to 8pm.  The article quotes the Winnipeg Free Press’s full-time Curling reporter as saying, “it’s the most exciting 25 seconds in sports.”


• TV’S DAYS ARE NUMBERED:  At least in Europe, according to a global media agency, but the U.S. may not be far behind.  ZenithOptimedia reports that television’s share of ad expenditure has leveled off in Europe as the Internet has taken off.  The report Television in Western Europe To 2014 notes there has been a migration from general television channels to cheap specialist channels along with a siege from DVR’s, VOD and ‘consumer-controlled digital media technologies.’  The agency will issue a report on America this summer.  As reported in Media Daily News, ZenithOptimedia says Television’s long history as ‘the lead of the media pack’ is, in its words, “over for good.”  


• ONLINE DAYS ARE NUMBERED TOO:  But the other way.  Online Retail Sales have grown 30% in January of this year, reaching $7.33 Billion compared to $5.22 Billion in January of 2005.  Website InternetRetailer quotes comScore Network for the online retail sales.  By comparison, ShopperTrak says national retail sales in the last week of January grew 6.6% compared to the same week a year ago.  Part of the reason may be an article in the Chicago Sun Times which quotes research firm ForeSee Results which says online retailers scored higher than their brick and mortar customers in terms of customer satisfaction.  Online Ad Impressions also grew in January. Online marketers served up 138 Billion display ads in January, which was a 12% increase over December of 2005.


• TRADITIONAL VS. NON-TRADITIONAL:  Meanwhile, BlackFriars Communications says its survey of business executives indicates a 9% drop in traditional advertising this year.  Last year, businesses allocated 31% of their advertising budget to traditional media, but this year they are looking at 22%.  It’s not all going online either.  Much of the re-allocated dollars will go to non-traditional approaches like buzz marketing, viral marketing and word of mouth.  However, the company notes that its survey indicates a general increase of 13% in 2006 which may offset some of the losses for traditional media.  On a related note, ClickZ reports that digital media advertising is expected to hit $23.5 Billion by 2010, accounting for 10% of overall ad spending.  Quoting analyst firm Parks Associates, the article says digital advertising reached $9.4 Billion 2005 and that was 5% of overall ad spending.  Digital advertising is defined as display, search, rich media, DVR, in-games and mobile.


• LET’S GO SURFING NOW:  Nearly a third of Americans go online… just to have fun.  Pew Internet and the American Life says “recreational” surfing ranks just behind e-mail and searching as an online activity AND that it is getting even with ‘getting news online’ as an activity.  The survey showed 30% went online just for fun, compared to 21% a year ago.  That may explain a USA Today report that three quarters of businesses monitor workers on-line surfing.  Quoting the American Marketing Association, the article says 65% use blocking software, a 21% increase since 2001.  Yet at the same time, the article notes that while the companies monitor Internet use, they also accept a certain amount of personal surfing.  And advertisers are taking advantage of those wandering workers.  Progresso soup has created a series of ads and a website specifically targeting those working day surfers.  Homesweetcube.com has a two-minute soap opera built around office life.


• NBC CONVICTS ITUNES:   The network is offering a free download of its new show, Conviction, two weeks before it even airs.  The podcast version is available at iTunes.  Website podguide.tv (which bills itself as the guide to the best video content for your iPod), says the podcast has already received a “suspicious” ten positive reviews.  On a semi-related note, there is a new advertising site called podbridge.com which brokers advertising for podcasts.  The website quotes research firm The Diffusion Group as saying that podcast downloads will exceed 11 million in 2006 and will approach 60 million by 2010.        


• COCKTAIL CHATTER -- THE AMERICAN INVASION:   So, you’ve already heard about the debate involving the Arab company buying port services and facilities in America.  But here are a couple you probably haven’t heard about.  The Lenovo Group is a Chinese-based computer maker, the third largest in the world.  Name still doesn’t ring a bell?  Try IBM.  The Chinese firm bought IBM’s personal computer business (think ThinkPad) last year for $1.75 Billion.  You’re not the only one who doesn’t recognize the name.  That’s why Lenovo has joined the sponsorship ranks at the Olympics.  You may have seen some of its displays in the coverage or even some of its ads on NBC.  Okay, how about Henkel KGaA?  Kind of just rolls off the tongue, doesn’t it?  Try this instead – DIAL (as in soap), Clorox, Right Guard and Soft and Dri.  The German firm bought Dial Corp last year for $2.9 Billion and just recently bought the two deodorant brands from Proctor and Gamble for $420 Million.  For perspective, it’s kind of hard to think of $420 Million as ‘chump change.’  But when P&G bought Gilette last year, it paid $57 Billion.    


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