Message From Michael -- October 8, 2007

TRUST IS TO BE EARNED

THE SWEET SPOT

MOST EXPENSIVE ADS ON TV

MOST EXPENSIVE TV ON ADS

GOOD NEWS FOR NEWS

FOLLOW-UPS – JOOST AND LINKEDIN

COCKTAIL CHATTER – MALLS AND CUBA


We encourage people to pass on copies of Message from Michael. But if you would like to get your own copy, you can subscribe by sending an e-mail to Michael@MediaConsultant.tv with the word “subscribe-MM” in the subject line.

TRUST IS TO BE EARNED: And apparently the media hasn’t earned it, at least in developed countries. The Edelman public relations firm did a worldwide survey – what it called a Trust Barometer -- to find out what people thought of business, media, religion, government, and non-governmental organizations. The question was “how much do you trust each institution to do what’s right.” Interestingly, the media scored lower (37%) than any other institution in developed countries (defined as Canada, France, Germany, Ireland, Italy, Japan, Netherlands, South Korea, Spain, Sweden, United Kingdom and the United States). Yet the media scored the second highest level of trust (56%), just behind business (60%) in the developing countries (defined as Brazil, China, India, Poland, Mexico and Russia).

Just for the record, in developed countries the scores go like this: Non-governmental organizations, NGO’s, scored the highest (53%), followed by business (47%), government and religion (both at 38%) and media (37%). In developing countries, it goes like this: Business (60%), media (56%), NGO’s (53%), government and religion (both at 46%).

THE SWEET SPOT: The language is a little convoluted, but one of the many messages that I found particularly interesting from the report is this one: “the vertical axis – the top-down, one-way dissemination by an authoritative voice of precise, controlled messages – has been firmly intersected by a horizontal axis of a continuous, messy, powerful, peer-to-peer conversation.” Notice – not replaced, but augmented. According to company President and CEO Richard Edelman, it’s at the nexus of these “vertical and horizontal axes” that companies will find the ‘sweet spot’ of communications and trust.

The report also indicates, yet again, the power of Word of Mouth, which we have talked about before in MfM. In the European Union, North America and Latin America, “a person like me” is the most credible deliverer of information about a company. In Asia, “a person like me” is second only to physicians. And in many countries, a conversation with a friend or peer is as trusted a source of information about a company as an article in a newspaper or TV news coverage. However, newspapers, TV and radio remain more credible than new media sources like blogs or a company website. The report notes that it used to be that ‘a person like me’ was one of our neighbors or people in our social circle, but now the commonality is that they share our interests, regardless of geographic location.

Finally, and I shouldn’t say finally because there is so much in the report, the survey says the “new green” – that is, the new hot button issue – is how companies treat their employees. “Fair treatment of employees” is the most or second most important activity (behind the environment) for a socially responsible company to engage in.

MOST EXPENSIVE ADS ON TV: Last year, it was ABC’s Desperate Housewives that took the top spot. This year, according to Advertising Age, ABC’s Grey’s Anatomy at $419,000 per 30-second spot is the most expensive show on network TV. Followed by: NBC’s Sunday Night Football ($358K), Fox’s The Simpson’s ($315K), NBC’s Heroes ($296K), ABC’s Desperate Housewives ($270K), CBS’s CSI ($248K), CBS’s Two and Half Men ($231K), and tied for 9th place at $208,000 per spot was CBS’s Survivor: China and ABC’s Private Practice. Of course, reporter Brian Steinberg notes that all of them will be toppled by American Idol in the spring.

MOST EXPENSIVE TV ON ADS: I’ll admit it. Sometimes my headlines are a stretch. In this case, we’re talking about the top media companies. Two lists came out. Both reporting that Time Warner is the biggest media company in the world. The oddity is the ‘slight’ difference in numbers. Advertising Age puts TW’s gross revenues at just under $34 Billion. Fortune magazine puts it at just under $45 Billion. Both lists also put the Walt Disney Company at the top of their lists, but again there is a wide disparity in numbers, with Advertising Age putting Disney’s revenues in 2006 at $16.8 Billion while Fortune magazine puts Disney’s revenues at $34.2 Billion. The disparity (I think) is that Advertising Age lists only the net U.S. media revenues while Fortune is listing worldwide revenues. That doesn’t quite explain why Advertising Age puts Comcast in the number two spot with revenues of about $27.4 Billion, but Comcast doesn’t even make Fortune magazine’s list of top entertainment companies.

In any case, the lists do provide some interesting fodder. For example, Time Warner as the top media company in the world ‘only’ has one-tenth the revenues of the world’s largest company – Wal-Mart which had more than $351 Billion in revenue in 2006. Staggering, isn’t it? In fact, even based on the larger revenue figures, Time Warner only makes it to the 48th spot on the Fortune 500 list. However, even so, the revenue of Time Warner at the top spot in the Advertising Age list is 100 times the revenue of the media company occupying the final 100th spot on the media company list – Schurz Communications at $300 Million. The editors at Advertising Age also note that the cost of entry to the top 100 media list has grown significantly over the last two decades. In 1986, a ‘mere’ $100 Million would have gained a company entry into the top 100 list; in 1999, that figure rose to $200 Million; and now in this latest report, it’s $300 Million.

GOOD NEWS FOR NEWS: It was only one line in the Associated Press report, and it was buried at the end, but it’s too interesting not to report. According to a poll by the AP and survey research firm Ipsos (which has the somewhat insulting slogan – Nobody’s Unpredictable), more than a quarter (28%) of the American public would like to see more news on television. This is up significantly from two years ago when it was 17%. This is the same poll that found nearly two-thirds of the American public (62%) believe television is getting worse and that nearly three-quarters (71%) believe there are too many reality shows on TV.

FOLLOW-UPS: TV-on-computer/ video-streaming site Joost has gone public. Regular readers of MfM will remember that we were part of the Beta testing of the site which up to now had been by invite only. But now it’s all aboard. Al-Jazeera says it is close to inking a deal with a major distributor in America. The British Broadcasting Company has launched the Americanized version of its World Now television newscast at 7:00 p.m. EST. After a week of watching, what I noticed most was not just that the report had a much broader worldwide perspective, but the commercials which included a spot about Qatar as the financial center of the world, Turkish Airways as connecting the world, and tourist attractions in India. As long as I am making some personal observations, LinkedIn, a social networking site for the business community, which we’ve mentioned in previous MfM’s appears to be taking off. In the last month, I have had more requests to link up from former students, and others, than I can remember receiving in the last year.

COCKTAIL CHATTER: In what must signal the end of an era, the International Council of Shopping Centers reports that only one enclosed shopping mall (the one-time haven of teenagers everywhere) was built in 2006 and none are planned for this year. According to an article in The New York Times by Stanford journalism professor and technology writer G. Paschal Zachary, Internet behemoth Google uses at least 450,000 computers in its search operations.

There is a website, cubaheadlines.com, which, as you would expect, has news and editorials about Cuba. All fine and dandy. But the part I love is that the banner at the top of the page is a map of Cuba (to be expected) a picture of Havana harbor (to be expected) and emblazoned across all this, the true symbol of Cuba – what looks to me like a 1953 Packard, in mint condition of course.

And finally, website Entrepreneur.com named ten businesses facing possible (and that’s the debatable word) extinction in the next ten years: Record stores (no explanation needed), camera film manufacturing (again, no explanation needed), crop dusters (commercial airlines are taking over); gay bars (because of greater acceptance in society); newspapers (at least the printing press plant part, but not the Internet part); pay phones whose numbers have dropped by half over the last decade (not just because of cell phones, but because cities are eliminating them because they’re gathering points for drug dealers); used bookstores (you can find what you want on the Internet); piggy banks (as we go to a paperless society); coin operated arcades which have dropped from 10,000 to 3,000 in the last decade because of video games at home and online; and -- wishful thinking -- telemarketers whose sales have been stagnant because of the national Do Not Call list, but who still managed to bring in $393 Billion last year.

SUBSCRIPTIONS: If you wish to stop receiving this newsletter, e-mail Michael@MediaConsultant.tv with the word “unsubscribe-MM” in the subject line. Also, back issues of MfM are available at the website, media-consultant.blogspot.com. You can reach me directly at my website MediaConsultant.tv.