Articles of Interest

Saturday, October 22, 2005

WSJ.com - Philips Electronics Arranges '60 Minutes' of Ads

WSJ.com - Philips Electronics Arranges '60 Minutes' of Ads
Interesting idea, likely prompted by the Target/NewYorker execution. Originality, though, should not be higher priority than effectiveness. Question is what messaging will they run. If they run the same spot w/in each ad break they will have missed serious potential.

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Philips Electronics Arranges
'60 Minutes' of Ads
Dutch Firm Is Sole Sponsor
For One Week of CBS Show;
Longer Story Segments
By BRIAN STEINBERG
Staff Reporter of THE WALL STREET JOURNAL
October 19, 2005; Page B4
Television's "60 Minutes" is getting a few more minutes -- at least this Sunday.

This week's edition of the CBS current-affairs program will run longer news segments, and fewer ads, as a result of an unusual sponsorship deal with Philips Electronics. The Amsterdam-based consumer electronics company says it is paying about $2 million to be the sole national sponsor of the program. Aside from spots promoting CBS's coming shows, and local ads sold by CBS stations, only Philips ads will appear on the show.

"There is more content, and less clutter," says Jeff Fager, executive producer of "60 Minutes."

The deal is the latest example of an advertiser aligning itself with a specific media outlet to get consumer attention. Over the summer, Target bought up all the ad pages in one issue of Cond�Nast Publications' the New Yorker magazine. Ford Motor, for a number of years, sponsored commercial-free season debuts of "24" on News Corp.'s Fox.

Advertisers used to plaster the same commercial across many TV channels and the same print ad in major publications. But as audiences have fragmented among television, the Internet and other media, advertisers are getting more choosy. When they find a media property that attracts a desirable crowd, "there is more appetite to dominate" than in the past, says Charlie Rutman, chief executive of MPG North America, a Havas media-buying firm.

"I think traditional 30-second advertising is in serious danger," says Andrea Ragnetti, Philips's chief marketing officer. He says he's looking for other media properties that reach Philips's target customer -- middle-age, affluent and well-educated -- with an eye toward developing unique ad strategies with them.

Philips's sponsorship of "60 Minutes" this Sunday will be hard to ignore. After a 90-second ad for Philips at the start of the show, the first two stories will run slightly longer than usual and free of ads. The second half of the program will carry two ad breaks, with ads for Philips, network promotions and local-station ads. Ad time will total about 6� minutes, excluding network promotions, down from the usual 12 minutes. The story segments, which typically run between 11 and 12 minutes, will average around 14 minutes in length. Philips has no say over the program's editorial content, according to the parties involved.

CBS won't comment on the pricing of the deal but says it is getting at least as much revenue as it would have for a normal episode of the show. CBS said it has taken care of other advertisers who may have wanted to be on the show.

An on-screen graphic will tell viewers about the Philips sponsorship, giving them a chance to offer feedback about the broadcast through the CBS News Web site, says Victor Ruvolo, senior vice president and group client director for Carat USA, the Aegis Group media-buying firm that helped negotiate the deal.

Mr. Fager said he'd do this kind of deal "every week if I could." In reality, however, these sponsorships are complicated. Making a company a sole sponsor sometimes requires broadcast networks to ask the TV stations that carry its signal to give up some of the ad time they sell. In this case, local stations got to sell their usual allotment. Use of the technique "will be sporadic," says Bill Cella, chairman and chief executive of Interpublic Group's Magna Global Worldwide.

Philips's Mr. Ragnetti is hunting for more opportunities for unusual ad plays. One outlet that has caught his eye is Time Warner's Real Simple, a home-oriented lifestyle magazine, whose readership fits Philips's target. "We don't have any plans so far, but if there was a chance to do something specific together, I would be very happy," he says. Real Simple would "absolutely entertain the idea of a single-sponsor issue," provided the concept matches the mission of the magazine, says Robin Domeniconi, Real Simple's president and publisher.

Thursday, October 13, 2005

GOOGLE, COMCAST IN PRELIMINARY AOL BUY-IN TALKS

GOOGLE, COMCAST IN PRELIMINARY AOL BUY-IN TALKS
GOOGLE, COMCAST IN PRELIMINARY AOL BUY-IN TALKS
A Deal Could Ultimately Alter the Media Landscape
October 12, 2005
QwikFIND ID: AAR02K
By Claire Atkinson and Abbey Klaassen
NEW YORK (AdAge.com) -- Search giant Google has joined with cable colossus Comcast to make a play for a stake in Time Warner’s AOL portal business.

Related Stories:
MICROSOFT IN DISCUSSIONS TO BUY STAKE IN AOL
'New York Post' Report Cites Two Sources
THE STRATEGY DRIVING MSN'S AOL BUY-IN QUEST
Combination Would Top Google's Traffic Numbers and Potentially Deprive it of 11% of Revenue
An executive familiar with discussions confirmed that Google brought Comcast into talks this past week to acquire a portion of AOL. This executive said that no deal is imminent and negotiations were characterized as “preliminary.” The news was first reported by the Wall Street Journal.
Global partnership
Neither Comcast Corp. nor Time Warner would comment. A Google spokesman said the company didn’t comment on market rumors but added, “Google and AOL have a healthy global partnership and AOL remains a valued partner.”
If the deal goes ahead, the AOL portal business could be transformed and relaunched to take advantage of its powerful partners. For advertisers the move would alter the media landscape, pushing further ahead a vision of consumer-controlled media future that would allow marketers greater ability to target customers. Online advertising is currently experiencing a renaissance of popularity among major ad spenders.
Yahoo and Microsoft
Google, Comcast and AOL are looking to bolster their profiles on both the content and distribution fronts. A deal would also leave Yahoo and Microsoft out in the cold, though Microsoft is understood to be continuing separate talks with AOL. Microsoft representatives did not return calls for comment.
Comcast has been aggressively pursuing video content for its cable delivered video-on-demand platform, while AOL made inroads with broadband video consumers as evidenced by traffic to its Live 8 concert earlier this year. Google, meanwhile, has been expanding its own video product in conjunction with broadcast network UPN, which provided the online giant with an episode of its top show, “Everybody Hates Chris.” Google has also been collecting video blogs from the public.
On the distribution front, Comcast is a major provider of high speed Internet access, with 7.7 million customers at the end of the second quarter. The company’s high-speed Internet product is currently ad free, something that a union with AOL and Google might alter. AOL has been buoyed of late by an increase in ad revenue and while overall revenues were down for the second quarter to $2.1 billion, online ad revenue was up by 45%.
Icahn letter
The news of a possible deal comes hot on the heels of complaints from Time Warner activist shareholder Carl Icahn. Earlier this week, Mr. Icahn sent Time Warner shareholders a letter packed with scathing criticism of the company’s board of directors. His shots specifically called out the 2000 AOL merger, in which he wrote the company “had an early belief in broadband evidenced by the billions spent on Time Warner Cable, yet failed to effectively address the migration of AOL dial-up subscribers to broadband access providers (punctuating the question of why they merged with an approximately $150 billion narrowband business).”
AOL has been bleeding subscribers from its narrowband service while trying to push the newly minted free AOL.com. Since AOL.com’s content is rich in broadband-enabled video, it has also been marketing a broadband-connection service through Roadrunner. AOL had 20.8 million U.S. members at the end of the second quarter, a decline of 917,000 from the previous quarter. If an AOL deal with Comcast included access to the cable giant’s 7.7 million broadband customers, AOL could be in a much better spot to sell its broadband service.
79 million monthly visitors
Google brings a premiere search capability to the possible union while AOL still maintains a sizeable subscription base. Google attracted 79 million visitors in September, according to Nielsen/NetRatings and is No. 4 among the top five brands on the Internet, behind Yahoo, Microsoft and MSN. AOL is No. 5. If Google and AOL were to merge, the resulting entity would become the No. 1 Web site, with an active reach of 72%.
Such a deal would make sense for Google, which lacks a content play in its quest to grow as a major media company. Google’s 2005 U.S. paid search revenue will reach nearly $3.2 billion in 2005, according to online market research firm eMarketer. Google will own nearly 25% of the online advertising spending in 2005 as well. With rich content from Time Warner, AOL would offer Google a way to enter the content/portal market now dominated by Yahoo and to a lesser extent, AOL. Last month, when reports surfaced that AOL and Microsoft’s MSN were considering a partnership, many industry watchers speculated that would include MSN powering AOL’s search engine and AOL dumping Google. Estimates suggest AOL represents 11% of Google’s revenue.
MSN-AOL talks continue
According to wire reports, MSN is also continuing talks with AOL. That led one media analyst, who wished to remain anonymous, to wonder why this deal would make sense for Comcast given that Microsoft is a shareholder in the cable operator. This analyst said: “Microsoft is a major investor in Comcast. The idea of them doing any joint transaction would be offensive to Microsoft. Strange things happen. But this doesn’t make sense.” An AOL/MSN merger would likewise be the largest entity on the Internet, with a reach of 79%.