Media Curmudgeon

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September 30, 2004

Friday, October 1, 2004. The

Friday, October 1, 2004. The Debate
Dan Froomkin blogs on politics for the Washingtonpost.com and this week he asked bloggers to fact-check the debate on Thursday night. Froomkin got a big response in the blogshphere, the Media Curmudgeon among them.

GB indicated several times that 75% of Osama bin Laden's leaders have been captured. To know that, we had to know exactly how many leaders there were in Al Qaeda in the first place, which makes this is a silly number.

JK criticized GB for poor planning for what would happen after the war in Iraq, but GB's response (at least twice) was that the US was "doing the best we can." That's exactly what I used to tell my father when I showed him my report card that was all Cs and he frowned--it meant I had no credible excuses.

GB said at one point, "I never wanted to go to war." This is certainly contrary to reports from Richard Clark, Bob Woodward, and a multitude of books and articles.

GB twice referred to Afghanistan leaders as "moolas." Did he mean mullahs? You'd think he could pronounce this word. But he did pronounce Putin's first name properly; however, calling him "Vladamir" to seem to be on close personal terms with this dictator who has the press, especially television, under his control and his putting his opponents in jail (as Kerry pointed out) seemed inappropriately chummy. It would be like President Roosevelt calling Stalin "Joe."

GB said several times emphatically that bilateral talks with North Korea wouldn't work, that we had to have China in the talks. Kerry said you could do both. Senator Joe Biden said on a spin session after the debates that, in fact, China had asked the US to have bilateral talks with North Korean. So I don't know whether to call that a lie or ignorance, but that's sort of like a "heads North Korea wins, tails US loses" option.

GB did lay to rest some conjecture about a draft. He said toward the end of the debate that there would be no draft--a "volunteer-only" army. OK that's a promise that young people will hold him to if he gets re-elected. But it might be a read-my-lips promise like his father made about new taxes.

Posted by Charles Warner at 11:53 PM | Comments (0) | Print |

Thursday, September 30, 2004. Greed

Thursday, September 30, 2004. Greed Waiver.
In a previous blog I suggested that greed was defined as "wanting more than you need or deserve, but being 'greedy' seems to add disregard for others to the definition." If we accept that definition, and I do, then the waiver that News Corp. is seeking from the FCC to continue to own a newspaper and two television stations in New York City fits the definition of greed. Rupert Murdoch's News Corp. (Fox) does not need or deserve two television stations and a newspaper in America's largest city.

An item in September 27th's Wall Street Journal read, "In an effort to sidestep the issue surrounding media-ownership rules, News Corp. filed a petition at the Federal Communications Commission to keep WWOR, based in Seacaucus, N.J., and the paper. As a condition of the company's purchase of Chris-Craft Industries in 2001, the FCC told the company to divest either the paper or the station within two years. Federal rules bar ownership of a newspaper and TV station in the same market. News Corp. received a waiver to own the paper and WNYW in New York City. Changes in ownership rules passed by the FCC in June would have allowed News Corp. to keep the second station, but a federal appeals court in Philadelphia recently struck down many of those regulations. The case has been appealed."

So, News Corp. is thumbing its nose at the court of appeals and trying to convince a Republican dominated FCC (3 of 5 commisioners are Republicans), led by Michael Powell, to let it keep its stations. Is it any wonder that Fox News favors Republicans and the White House so heavily?

What can you do to stop this latest example of media ownership greed? Contact the FCC. Send an e-mail to michael.powell@fcc.gov, the Republican chairman, and michael.copps@fcc.gov and jonathan.adelstein@fcc.gov (the latter two are the Democratic commissioners) and implore them not to vote for the News Corp's. greedy petition.

Posted by Charles Warner at 11:44 AM | Comments (0) | Print |

September 26, 2004

September 26, 2004. What is

September 26, 2004. What is Greedy?
I think Bill Grimes makes a valid point in his response to my Perfect Storm blog about misusing the term "greed." However, the difference between our points of view depends on the definition of greed.

Michael James, in an article for ABC News.com in 2002, titled "Is Greed Ever Good?" writes, "Not even Webster's New World College Dictionary seems clear. In the 2000 edition, 'greed' seems simply to mean wanting more than you need or deserve, but being 'greedy' seems to add disregard for others to the definition."

Therefore, if you accept the definition that greed means wanting more than you need or deserve and a disregard for others, then I submit broadcasters are greedy, especially networks and group-owned television stations. Television has been getting more than it deserves for several years. For example, close to 80 percent of consumer goods companies' advertising has gone into network television when television only has 49 percent of people's total media time. Television management might have high regard for their stockholders, but I believe that management is showing disregard for its audience. In other words, by putting stockholders before audiences, they are driving away the audiences, which, in turn, will drive down stock prices, thus hurting investors. This is the reason Bill Grimes was right in suggesting that investors sell their media, especially broadcast, company stocks.

I think one could argue, as Bill Grimes does, that audiences are leaving because of a profileration of media choices, which is true. On the other hand, I believe television is accelerating the departure by overcommercialization and increasing product placement.

Television management, in my opinion, is not only greedy, but, probably worse, is arrogant. They have a Marie Antoinette let-the-eat-cake attitude about the audience and continue to add commercial content because these managers believe that the audience is addicted to their entertainment heroine. However, I believe they have broken the contract with viewers, who will eventually overcome their addiction because they will become sick of the overcommercialization.

Since the beginning of commercial radio, the contract was that the audience agreed to put up with commercials in return for receving free programming. This contract was a tacit agreement, so the amount of commercial content was never specified. Therfore, for decades in radio and then television, the audience put up with commercials to get the free programming.

In the nascent years of FM radio in the 60s, the stations had small audiences and, therefore, few commercials. These FM station owners soon discovered that when researchers asked the young audience of the stations what they liked most about their favorite FM station, that the answer was, "less commercials." Subsequently, FM became more and more popular and became known as as radio band with fewer commercials, so owners were stuck with keeping the commercial content relatively low (relative to the number of commercials on AM stations, particulary News?Talk stations).

In 1975 a young lawyer at Time Warner, Gerald Levin, came up with the idea of putting programming on a satellite, and HBO was born. Its tremendous success showed that people would pay money to get programming without commercials. You'd think the television networks would have gotten the message and would have gone slowly on adding commerical units, but they didn't.

With product placement, the television networks have broken down the walls between programming content and advertising, and, thus, are further trampling on the tacit agreement with viewers. The reason is greed and cowardice. Greed because they are getting more than they need and deserve and cowardice because they are neither brave enough to stick to the spirit of the implied contract nor innovative enough to come up with a good way of selling the value of having a wall between content and advertising.

The networks might well take a page out of the Time Warner playbook. Advertising Age in its September 20 issue, published its annual report of the top 300 magazines in revenue. The top three were Time Inc.'s People ($1,235,072), Sports Illustrated ($936,187), and Time (920,831). Six of the top 18 magazines were Time Warner's. Could this incredible performance have something to do with the fact that the Time Inc. division of Time Warner still religiously keeps the wall up between content (editorial) and advertising. And it is a religion with Time Inc., where the editors of the all of their magazines still report to Time Inc.'s editorial director, Norm Pearlstein, not the publishers, who are responsible for profit growth. Greed doesn't seem to be rearing its ugly head at Time Inc., and its magazine salespeople are finding a way to stay on top and increase revenue without overcommercialization.

The Time Inc. division of Time Warner is keeping its tacit print contract with readers, and advertisers seem to be rewarding the media giant for its efforts. Were that broadcasters would be innovative and honorable enough to do the same.

Posted by Charles Warner at 4:02 PM | Comments (0) | Print |

Sunday, September 26, 2004. Bill

Sunday, September 26, 2004. Bill Grimes Responds.

Posted by Charles Warner at 2:10 PM | Comments (0) | Print |

September 24, 2004

Friday, September 25 , 2004.

Friday, September 25 , 2004. Magazine Team Ball
Brian Steinberg had a good article in today's Wall Street Journal titled "Magazines to Try Playing Team Ball." It's a good article because not only does Steinberg report about a joint effort that the magazine industry is making to have salespeople sell magazines against other media and stop selling negatively against each other's titles, but he also includes quotes from an industry skeptic who says salespeople will still sell negatively and bash other magazines. I tend to agree with the skeptic.

First, it's about time the magazine business made an attempt to sell its significant benefits. Study after study show that magazines add significant reach to television schedules and that magazine advertising has greater impact in generating purchase intent than other media, according to a new Dynamic Logic study. The study was reported on by Joe Mandese in MediaPost today. The Magazine Publishers Association for years has had voluminous research on magazines' effectiveness. But magazine salespeople didn't use the MPA research and continued to sell by trashing the competition--it's been an internecine battle for years. (I looked up internecine in the dictionary and it read "mutually destructive"--exactly.) Scott Donnaton, the knowledgeable, smart editor of Advertising Age, wrote a column a couple of years ago urging the magazines to stop selling so negatively against each other and start seeling against TV, which was (and is) vulnerable. It looks like the magazine trade has finally wised up.

In Media Selling I write in Chapter 8 - Skills: Influence and Creating Value that the five steps a salesperson should take in creating value are: 1) Reinforce your expertise as a problem solver, 2) reinforce the vlaue of advertising (as opposed to promotion), 3) reinforce the value of your medium, 4) reinforce the value of your product (radio station, television station, magazine, Web site, e.g.) 5) Position (frame) the benefits and advantages of your product. I also write that one of the two don'ts for creating value for your product is "Don't knock the competition" and give seven reasons for not doing so and three things to talk about when asked about competitors. The three things are: 1) Compliment competitors, 2) talk about your strengths, and 3) expose generic weaknesses.

All logical, rational, and practical. But the question is, will magazine salespeople sell to create value? Here is what Steinberg writes in his WSJ article: "One magazine veteran is skeptical. With media buyers, 'you have a certain amount of time to make your point, get it sold, and get out,' says Ron Galotti, who worked for Talk GQ and Vogue, among others, before leaving the industry. 'A good media person would say just that: 'Start telling me about Vogue or GQ or whatever, or get out of my office.'" In other words, when magazine salespeople get in front of a buyer, whose time is limited, they will cave into the demands of the buyer to sell negatively against another magazine.

Why? For three reasons: First, magazine media buyers typically use a strategy of pitting one magazine against another in order to drive down rates. Buyers want salespeople to live in fear of losing an order if they don't discount their rates, which in turn forces salespeople to talk about how awful a competitive book is get the nod for their book. The negative selling by both magazines' salespeople drives down rates. Second, magazines have always been a highly competitive business which has traditionally sold negatively. It's an imbedded culture that cannot be changed overnight because it's almost impossible to break a habit, especially a bad habit. Third, I seriously doubt that the magazine companies, such as Hearst, Hachette Filipacci, and, Conde Nast, that are involved in this effort to sell the magazine category instead of "just pushing the titles for which they are working" (Steinberg, WSJ) have changed their compensation systems to reward their salespeople for selling the medium.

I'm sure presidents of magazine divisions, publishers, and ad directors are pushing the concept of selling the medium hard to their salespeople, extolling them to "sell magazines first, then your own title." But until they magazine companies wise up and change their pay packages, nothing is going to change, because typical compensation plans are based on commissions on how many pages are sold and/or bonuses based on meeting a budget/goal/target which are invariably based on increases over the previous year.

Until magazine management tells salespeople, "I don't care what buyers say--they're trying to bully you to lower rates--you must pitch the medium first and do it in writing. And I want to see every presentation you make so that I can verify that you're pitching the medium first." Also, "We're paying you a modest salary and a substantial bonus based on how big the total increase in magazine advertising is for the year. If total magazine revenue isn't up over 3% from last year, you won't get a nickle, if it's up 5 or 6%, you'll do well." Tell salespeople that and watch total magazine revenue jump, because the old adage of "you get the sales performance you pay for" is just as true today as it was 50 years ago.

Posted by Charles Warner at 4:12 PM | Comments (0) | Print |

Friday, September 24, 2004.

Friday, September 24, 2004. The Perfect Storm.
I have a sense that we are in the confluence of two trends in television and radio that is creating a disaster on the airwaves. The two intersecting trend lines are: 1) A sharply inclining line that represents media corporate greed and 2) a gently declining line that represents ever lower levels of viewing and listening.

The greed line is fueled by ever increasing pressure on publicly held corporate media for profit growth during a time when network and local terrestial (non-cable and non-satellite) TV and commercial radio audiences are declining. Because prices broadcasters can charge for commercials are directly proportionate to audience levels, broadcasters are finding it harder each year to raise rates, and all advertising expenditure prognosticators are predicting the lowest growth rates in 2005 for television and radio in decades.

(Insert advertising banner here.)

Jack Myers in The Jack Myers Report of 9/22/04 forecast only a 2.0% increase in broadcast network spending, minus 1.0% in local and national spot TV, and a 1.0% increase in radio. He forecast a minus 1.0% for newspapers, a 4.0% increase for magazines, and a whopping 23.0% increase for online advertising expenditures. I know you can quarrell with Jack's forecasts, but over the years I've found him to be as good as Robert Coen, the McCann-Erikson International ad spending guru. Coen tends to be on the aggressive side and Jack on the conservative side, so it evens out; but the point is that television isn't going to continue to have double-digit gains as it tradtionally had in the 70s, 80s, and 90s (radio's gains were typically in the 7-8% range) when braodcasters could automatically count on double-digit rate increases because audiences were increasing and TV viewing time was steadily increasing until it reached an incredible seven plus hours a day.

(Insert advertising banner here.)

But those days are over, the constant buzz and headlines during Ad Week in New York this week were "New Teachnoligies Will Disrupt Mass Media, Mass Marketing, Says Forecast 2005" and " Cable, Web Boost Ad Budget Shares, Broadcast, Print Erode." Everyone in the business, except television and radio management, who are in a state of complete denial, knows audience trends are down, and where the eyeballs and ears go, advertising dollars follow.

So what does television management do when audiences drop? It adds commercials and commercial content to make up lost revenue from the audience declines in order to meet aggressive bottom-line targets. Not only more commercials (all the TV networks have added commercial time in the past two years) but now, a new tsunami of commercialism is rising rapidly--product placement. P&G just made a big product plaement deal with ABC, and when P&G does anything in advertising, other package goods advertisers follow like lemmings. Board up your windows, viewers, the storm is coming.

(Insert advertising banner here.)

Barely noticeable at first, product placements, drop-ins, segment sponorships, and other intrusions are slowly creeping into every type of programming and before you know it half the program is commerical content. When Oprah gave away 276 Pontiacs on her show last week, she devoted about half the show pitching the cars--cars GM were overstocked on because no one was buying them. Great deal for GM--get rid of unsalable inventory and write it off as advertising. When Don Francisco hosts Univision's "Sabado Gigante" (which often gets a 50 rating in Spanish-speaking homes) , he typically gets the audience to sing a sponsor's song. Soon Oprah will ge cheering her audience on to sing along with a GM song--how about Dina Shore's "See the USA in Your Chevrolet."

(Insert advertising banner here.)

As I've mentioned before , the Yankees radio broadcasts are almost unlistenable now because of all the commerical drop-ins and mentions and special segment sponsorships. I don't mind commercials between innings and during a pitiching change, but stop "fifteenth out" and "official water of the broadcast booth," and "you can learn a lot on the Internet with high-speed Road Runner." Stop it! I'll bet if someone put a clock on all the talking during a Yankee game that close to 50% of it would be commercials, drop-ins, mentios, etc. I guess Steinbrenner needs all the money so he can pay Jose Contreras (a disastrous head case) $13 million a year. The over-commericalization of the Yankee boradcast drove me to watch the games on TV where they don't junk up the play-by-play with commercial mentions...yet.

I believe the increasing commercialization of radio and TV (even though Clear Channel radio did cut its stations' commercial loads) will eventually drive people away from those media. It's already happening. An article in the August 9, TelevisionWeek by Joe Mandese reported on a study conducted by Veronis Suhler that showed a slow but steady switch in viewing from ad-supported media to consumer-supported media such as calabe, satellite TV, home video, recorded music, video games, and, of course, HBO. In 1998, according to the study ad-spported media had 63.6% of the viewing, in 2003 only 56.4% and in projections for 2008, only 54.1%. So who will those 54.1% of the population be in 2008? It will be people who can't afford cable and other customer-supported media and who advertisers don't want to advertise to. Therefore, programming will get stupider, raunchier, cheaper (more stupid reality shows). All that will be left will be Donald Trump firing his grandmother (by 2008 "The Apprentice" will be stripped in prime time and the Donald will have fired everyone in the country dumb enough to go on the show, except his grandmother).

(Insert advertising banner here.)

As there is less and less money to spend on programming, the programmng will get worse, especially the news, which is expensive. People don't need news on over-the-air TV any more, they get it from cable and the Internet and that consumer supported gem, NPR. NPR has $200 million of Joan Kroc's money and will just get better and better. It's audience is growing steadily and "Morning Edition" and "All Things Considered" are the top-rated radio programs in many markets, especially among people with brains and money (somehow the two always seem to be connected).

So the perfect storm, when high greed meets audience lows, will push people with brains and money out of commerical television and radio and into consumer-supported media and the Internet. In this shift, will PBS survive? No. Cable is better now, so as soon as all the antiques in the country have been appraised (in two years) and no one responds to the public television stations' begathons because people have all given their do-good broadcast money to NPR, PBS will be shut down, to the government's joy.

By the way, weren't all those inserted advertising banners annoying in a medium that is supposed to be commercial free? Which brings up another question; how are you supposed to make money on a blog? Blogging is an addiction, and who ever heard of an alcoholic or a crack head making a living on being addicted?

Therefore, when you read this blog, remember, you're getting what you pay for it (and what I get paid for).

Posted by Charles Warner at 1:08 AM | Comments (0) | Print |

September 22, 2004

Wednesday, September 21, 2004. Neil

Wednesday, September 21, 2004. Neil Derrough Weighs In On Rathergate.
Neil Derrough is the former V.P., General Manager, of WBBM-TV, WCBS-TV, and KNSD-TV. He is also the former president of the CBS Television Stations Divisions in the 1970s, and in all of his jobs he placed special emphasis on having a credible, journalistically sound news product, so he knows what he's talking about.

The CBS News story based on forged documents seems to have touched a nerve. Dozens of questions could be asked about the standards used to prepare this story. Let's hope the panel selected by CBS will aggressively get behind how this story could ever get on the air. Let's also hope that after the facts are known the appropriate steps are quickly taken by CBS.

The part of the incident that most bothers me is how CBS management has dealt with the situation after the story was broadcast. It took 12 days for CBS News to acknowledge that something had gone wrong. CBS News stood behind this story during this period with overwhelming evidence that the documents were forged. Even after his on air apology Dan Rather told the Chicago Tribune that he didn't think the documents were forgeries. I find all of this astounding.

What's missing here is any real sense of skillful management or oversight. It seems that CBS News management was unwilling to step up and deal with this issue in a timely fashion. A case can be made that they still have left things undone. Where is senior CBS or Viacom management?

Not to sound like an old guy, but I can well remember that during the CBS "Tiffany" days Bill Paley or Dr. Frank Stanton never seemed that far removed. Who plays that role at CBS today? Obviously, no one.

If CBS is going to continue to try and be a major news source the viewer needs to believe that someone is in charge providing a responsible oversight. Someone needs to monitor out-of-control ego. This ego is holding a news organization hostage while the hard-earned CBS News reputation is being trashed from all sides. The situation is crying out for someone to take charge.

This is an extremely significant broadcast journalism challenge. We have watched newspapers deal with recent missteps. CBS is going to be closely watched as they handle this situation. There is a lot at stake. Let's hope they display keener management astuteness than they have so far.

Posted by Charles Warner at 10:33 PM | Comments (0) | Print |

Wednesday, September 21, 2004. Memo

Wednesday, September 21, 2004. Memo to Sumner Redstone
To: Sumner Redstone
From: The Media Curmudgeon

Here is what I recommend you do about the Rathergate mess:
1. Act on the suggestion of Roy Peter Clark of the Poynter Institue and broadcast on CBS public hearings of the investigatinve panel CBS appointed, led by Dick Throburgh and Lou Boccard. It's bound to get higher ratings than the "CBS Evening News," which is mired in a very bad third place among network newscasts,
2. Wait until the Thornburgh/Boccardi panel files its report on Rathergate, then you'll have an excuse to fire Rather. Don't let him resign, fire him and eat the last couple of years of his $7 million-a-year contract (it'll only cost you the equivalent of six Super Bowl commercials). By firing him, you give the message to journalists, bloggers, and conservatives (who have made Fox News number one in the cable news ratings ) that the CBS brand still has credibility and that consequences await anyone who makes a mistake.
3. Next, eliminate the "CBS Evening News" broadcast and give the time back to the CBS affiliates. Karamzin would have done this if you had kept him around, and you should do it now. The ratings are so low (partly because Rather is so old, boring, and dumb and partly because of lousy lead-ins from affiliates and, especially, your owned and operated stations). By stopping the bleeding on the "CBS Evening News" you can save money by shuttering CBS News and laying off the few foreign correspondents and bureaus you have left and the hundreds of people in CBS News in a news-gathering and producing role. You'll make more money because your 20 owned and operating stations can program the half hour hole left by cancelling the "CBS Evening News" with either more local news (which is highly profitable) or with syndiated shows like "Wheel of Fortune" etc., which would open up a big market for CBS-owned and King World (which you own) syndicated programs, so youmake more money three or four ways and save money.
4. Cancel "Up to the Minute" (overnight news), "The Early Show," "The Saturday Early Show," "Sunday Morning," and "Face the Nation" and move responsibility for programming overnight and mornings to the Entertainment division. Les Moonves has proven that he knows how to produce winning entertainment. He'll probably put in game shows or more reality shows because they are cheap to produce like news programs are and the new programs will attract much more desirable and saleable demos than the poorly rated news programs they replace. Let's face it, you couldn't do worse in the ratings than you're doing now in those time periods.
5. Keep "48 Hours" and the two "60 Minutes" (Wednesday and Sunday), but spin off the production of these programs into a separate, wholely owned subsidiary that will sell these programs to the CBS network. Make Andrew Heyward president of this new company. He's a smart, honest guy who came out of news production and knows his stuff. Call the new subsidiary Sixty-Minutes and instruct it to compete in the marketplace--the syndication marketplace, too. Sixty Minutes could be run lean and mean and sell programs to the highest bidder: ABC, NBC, CBS, Fox News, CNN, and MSNBC (Lord knows they need something).
6. Tell Tom Freston to start a new cable channel and call it something like 60 Minutes Cable Network or CBS News Classics. 60 Minutes is one of the most valuable brands you have, especially now that the CBS News brand is tarnished. You can repurpose and show all of the CBS News archives: All of the Edward R. Murrow documentaries such as "Harvest of Shame," the McCarthy hearings, old "60 Minutes" programs, classic CBS news programs such as Cronkite's emotional announcement of Kennedy's death and his long segment on the Vietnam war that many veteran pundits think was the turning point in the public's perception of the war. The cable channel could have comedy nights and show Rather disguised in Afganistan or looking like a deer in the headlights in Baghdad.

I recommend you make these changes immediately.

Posted by Charles Warner at 6:29 PM | Comments (0) | Print |

September 21, 2004

Tuesday, September 21, 2004. AOL

Tuesday, September 21, 2004. AOL Is Changing
Summer is over and New York is back in full swing. Jerry Della Femina is back from the Hamptons and his press agent immediately got his name in the Wall Street Journal. It's Advertising Week in town, which means that everyone in the ad biz has their flacks working full time to get some ink.

In the past I have criticized AOL for a number of different things such as stupid commercials, sponsoring the Super Bowl half-time show, crooked and boorish heads of HR and Interactive Marketing, and, most recently for being invisible in the press. Well, they must have a new flack, or at least one that's back from the Hamptons, because AOL has been all over the business and trade press, including The Jack Myers Report.

It could be a new or better flack, or it could be that AOL has finally gotten its act together and started doing some things that are worthy of ink. For example, this week AOL announced it's partnering with Timer Warner's Entertainment Weekly (about time) to provide its broadband subscribers (they like to call them "members") with a weekly four-minute streaming video (they call it a "show") feature in which EW senion editor Kristen Baldwin disscusses five things upcoming on TV that are worth watching as well as awards and a new feature called "crush of the week." For those who like entertainment and can't get enough of it on Fox News or local TV news, this is a cool feature. AOL streamed the first episode of "Jack and Bobby," so it is trying to provide some original, up-to-the-minute content for its 23 million subscribers.

In another annoucement, AOL said it was introducing secure ID tags, it's calling it AOL PassCodes, that subscribers could buy for around $9.95. The Pass Code will add an extra level of security to member's accounts when they pay bills or for any member who is afraid of "phishing," or hackers stealing people's passwords and credit card numbers. Good idea and a nice service, especially for the cyber paranoids.

AOL has also announced that is launching a new online shopping site called inStore on both AOL and AOL.com. InStore is a comparison shopping site which will feature price drop alerts, among many other features. This is big step up for AOL. AOL also announced is is revamping the AOL.com site (again, it's about time) and that it will be offering fantasy sports leagues free, or for $59.95 a season if people want to organize their own leagues. That's new and cool, too.

AOL has upgraded advertising opportunities and features on its wildly popular AIM instant messaging service, so it's now much better for users and advertisers than any competing product (I use AIM and like it, especially the enhanced buddy icons). Furthermore, "AOL Targets Madison Avenue, First Ad Trade Effort In Years," according to an article in Media Daily News by Tobi Elkin.

So, AOL finally has something to shout about and is shouting about it. Even Jonathan Miller, CEO of AOL, who I have criticized before for not paying attention to terrible advertising and for making bad hiring decisions is making some intelligent waves and sounding a lot smarter. In a speech a week ago at the iMedia Brand Summit in Deer Valley, Utah, Miller made some remarks that laid out in a straigtforward manner AOL's progress after getting over some growing pains--no wild promises or hype, but a report on many of AOL's legitimate improvements.

By the way, at that conference one of the world's most knowledgeable marketers, Don Schultz of Northwestern (he invented the term and wrote a great book about integrated marketing communications) told attendees to the iMedia conference to throw out out notions and completely rethink how media advertising works. He said most, if not all, media advertising models are broken and that, "We have no proof about how media advertising works, with the exception of online. We hypothesize that television works; we hypothesize that magazines work...but we don't know." These quotes are from iMedia Connections Web site and a story on September 14 by Marsha Geller.

That was also the general theme of some major speeches at Advertising Week. According to a report in the Hollywood Reporter online, "...industry veterans say the ad business is on the cusp of the kind of sweeping changes not seen since the dawn of network television more than 50 years ago. Local and national broadcast TV outlets have taken the lion's share of domestic advertising expenditures since the late 1950s. But today, a growing number of marketers are finding that TV is no longer the only--or even the best--route to consumers. Advertising dollars that routinely would have gone to broadcast TV in years past is now going to cable and interactive television, the Internet and even nontradional approaches like event marketing and public relations." Of course, the Hollywood Reporter is wrong, newspapers have been the number-one advertising medium for years, only to be beaten out last yar by direct mail, but the Reporter's point is well taken.

This type of thinking about television by advertisers and their agencies is what is fueling increased predictions for Interactive revenue, up from 10 to 33% next year according to a variety of experts, with most of the increases coming in at around 20%. AOL seems now poised to get back in the hunt for a major part of this increase. My hat's off to AOL for getting back on track and, more importantly, getting back on the innovation track, which made it the early leader of Internet use and access. AOL lost its lead in innovation when it took its eye off the ball when the merger with Time Warner was announced and afterward. It seems to be back on the innovation track now and is justifiably promoting it.

I'm a member of AOL and last year I was frustrated up to my ears. I changed my primary e-mail account to warnerch@missiouri.edu and used Outlook. AOL wouldn't work with Outlook and when I called AOL to complain, I got a nasty, arrogant answer. So I cancelled my account and now use a screen name on my wife's account. But now, in the last month, I have been able to use Outlook when I'm signed on to AOL and it works seamlessly. That's one of the main reasons I know that AOL has turned the corner--they are thinking about their members again.

Posted by Charles Warner at 10:42 PM | Comments (0) | Print |

September 20, 2004

Monday, September 20, 2004. More

Monday, September 20, 2004. More On Rathergate.
A student in one of my online classes asked my opinion about the Rathergate scandal and whether or not I thought it would harm CBS's reputation.

Did the Jason Blair scandal hurt The New York Times's reputation? Did the Jack Kelly scandal hurt USA TODAY's reputation? CNN, NBC, and other news organizations have had similar incidences of breaking stories that weren't true, but it didn't hurt their reputation over time. Fox News's Bill O'Reilly and Sean Hannity say stuff that isn't true all the time, and viewers don'tseem to care.

I guess it depends on from what perspective you are looking at CBS's reputation. If you are looking at it from the perscpective of conservatives and other CBS and Rather haters, it merely reinforces their position and puts wood on their fire of hate. If you are looking at it from the perspective of Andrew Heyward and CBS News, it's cataclismic because they care so much about their credibility. But that might just be hubris.

News is like a Major League Baseball game that's played 365 days a year. Pros know that you can't win every game, that you'll make mistakes, but you can't let that get you down; you've got to go out the next day, put the mistakes behind you, and play again. The Yankees are a professional organization. They got beat 22-0 and came back the next day and won. The Red Sox beat them in a heartbreaking game last Friday night 3-2 (and the Sox beat the greatest closer of all time, Mariano Rivera), but the Yankees came back the next two days and won huge, 14-4 and 11-1.

Good, professional news organizations are the same way; they know that every day is a new one and every news program is a new opportunity. I don't think Rathergate will hurt CBS reputation in the long run. CBS News will get over Rathergate in a month.

Another perspective is a TV viewer's perspective. I don't think Rathergate will hurt CBS News programming ratings, certainly not "60 Mintues" or "60 Minutes II." In fact, the the perverse way that TV works, it might even boost "60 Minutes II's" ratings in the short haul.

Will it hurt CBS News from the perspective of professional journalists? They will all put on hair shirts and complian, but who cares? I think from the perspective of CBS top management, they might be delighted (as I mentioned in my previous blog) because they now have an excuse to cut the payroll a lot and get rid of an aging ball and chain.

But in the final analysis, what is the media all about, serving the public or making media owners, executives, and stockholders richer? It's, of course, about money--the media helping advertisers take your money from you. So from the media's perspective, the Rathergate perspective that is most important is the perspective of advertisers.

Cybercast News Serice (CNS) ran a story on Spetember 16, by Robert Bluey titled "Advertisers Stick With CBS Despite Document Flap." Spokespeople from major advertisers such as UPS Pepsi, Cingular, GlaxoSmith Klien, Toyota said their companies would continue to advertise on CBS. Bluey also contacted sales executives from local TV stations in several states, including North Carolia and Arkansas, and they, too, saw no impact on advertising.

If advertisers don't care, then why should CBS? Afterall, it's advertisers and advertising that counts, right?

Posted by Charles Warner at 5:16 PM | Comments (0) | Print |

September 18, 2004

Saturday, September 18, 2004. Bullies.I'll

Saturday, September 18, 2004. Bullies.
I'll begin this blog on bullies by saying that I think I can blast and, yes, bully Dan Rather in the previous blog about being old because I'm only four months younger than he is, so I know full well what it's like to be that old and to lose your marbles.

The September 13 issue of The New Yorker had a brillinatly insightful article about Al Gore by David Remnick, one of the country's best politcal reporters, titled "The Wilderness Campaign." I urge you to read it, not only because Remnick is a terrific writer, but because it paints a laser- sharp and clear word portrait of Al Gore, who comes across a lot smarter than I imagined. I thought Gore was smart, but never dreamed he was as bright as he came across in the Remnick profile. (I knew he was smart because he went to St. Albans in Washington, D.C., where I went to school, although I didn't graduate as high in his class as he did; although, Gore didn't graduate Cum Laude, but his classmate Reed Hunt did.).

A passage in the article that particularly impressed me was Gore's take on George Bush's personality and intelligence. I'll risk being sued by The New Yorker and repeat a portion of that article because I think it's worth the risk. Here it is:

"'I wasn't surprised by Bush's economic policies, but I was surprised by the foreign policy, and think he was , too,' Gore told me. 'The real distinction of this Presidency is that, at its core, he a very weak man. He projects himself as incredibly strong, but behind closed doors he is incapable of saying no to his biggest financial supporters and his coalition in the Oval Office. He's been shockingly malleable to Cheny and Rumsfeld and Wolfowitz and the whole New American Century bunch. He was rolled in the immediate aftermath of 9/11. He was too weak to resist it.
'I'm not of the school that questions his intellignece,' Gore went on. 'There are different kinds of intelligence, and it's arrogant for a person with one kind of intelligence to question someone with another kind. He certainly is a master of some things, and he has a following. He seeks strength in simplicity. But, in today's world that's often a problem. I don't think that he's weak intellectually. I think that he is incurious. It's astonishing to me that he'd spend an hour with his incoming sectretary of the Treasury and not ask him a single question. But I think his weakness is a moral weakness. I think he's a bully, and, like all bullies, he's a coward when confronted with a force that he's fearful of. His reaction to the extravagant and unbelievably selfish wish list of the wealthy interest groups that put him the White House is obsequious. The degree of obsequiousness that is involved in saying 'yes, yes, yes, yes, yes' to whatever these people want, no matter the damage and harm done to the nation as a whole--that can come only from genuine moral cowardice. I don't see any other explanation for it, because it's not a question of principle. The only common denominator is each of the groups has a lot of money that they're willing to put in service to his politcal fortunes and their ferocious and unyielding pursuit of public policies that benefit them at the expense of the nation.'"

Wow! Can you imagine Dubya using "extravagent" and "obsequious" in the same sentence, let alone being able to pronounce either of them. Gore's words provide a penetrating insight into who Bush really is. He is a spoiled bully who was afraid of Saddam, so he has killed 1,000 Americans, many in the National Guard in which he served in order to avoid going to Vietnam. He bullied his way into the guard because, like all bullies, he was a coward. This cowardice prevails, as Gore explains, in Bush's inability to say no to "starve-the-beast" neo-con idealists, the religious right, and greedy supporters in business.

What makes bullies bullies? I think it comes from a basic, deep insecurity which casuses them to seek power over others to make them feel secure. Bullies crave power over people who they know are weaker; it's only the brave that challenge a stronger opponent. After bullies get out of high-school and can't beat up on smaller people, but still crave power, what do they do? They seek careers that give them power--politics and the media.

We see so many examples of politicians as bullies: Gingrich, Chaney, Rumsfeld, Ashcroft, and Bush, none of whom fought in a war, as pointed out by David Halberstam in an article in the latest Vanity Fair (he writes that Cheney was deferred five times and Ashcorf seven times). Halberstam points out that those who have been in wars like Kerry, Army generals, and even Colin Powell, were against the war. The tragedy of Powell is that he compromised his beliefs out of loyalty to Bush. And we see even more bullies in the media: Limbaugh, O'Reilly, Hannity, Imus, Michael Kay, Ailes, Trump, Murdoch, Karmazin, Redstone, and Eisner. Newspaper reporters and columnists, television personalites, and radio talk-show hosts, especially in sports, bully people around and hide behind freedom-of-the-press armour while they bully those who can't fight back. I think it was A.J. Liebling who said, "never pick a fight with anyone who buys ink by the ton." If it wasn't A.J., whoever said it was right. Whoever the media picks on doesn't have a chance (papers even hide retractions if they are wrong in mice type on an inside page, so no one ever knows they were wrong. Television and radio usually don't even try unless it's to avoid a lawsuit, and then they wisper retractions).

Power corrupts, and absolute power corrupts absolutely. Same with money. Power and money are the two most corrosive and corrupting influences there are. Put the two together and you have the corrupting appeal of media. If you can make it to the top of the media, you can be unbelievably powerful and unconscionably rich. The Wall Street Journal reported on September 16 that Ruoert Murdoch, chairman and major owner of News Corp., was paid $17 in total compensation in fiscal 2004. "His main lieutenant, Chief Operating Officer Peter Chernin...earned $17.2 million." Wasn't that nice of Rupert to give Chernin $200,000 more than he gave himself. Can you believe those to guys are worth $34.2 million a year? What have they done to serve the public? They have unabashedly supported Geroge Bush on Fox News and in the New York Post (and I assume in all News Corps. other properties). They have also unabashedly supported Bush-supported FCC regulations that would make News Corp. (the Fox Telelvision stations) even richer.

So keep in mind the next time you see Bush and Cheney and their cronies on TV Gore's insight that they are bullies and cowards--and the same for O'Reilly, Hannity, and, yes, even Randy Rhodes on Air America Radio ( there are lot of liberal bullies, too).

And do you think Michael Eisner is a brave man to announce that he is retiring in two years? I think he figured out that in two years, at the rate he's being paid, that he'd hit $1 billion and could afford to retire. Also, two years will give him time to politic and maneuver to see that his main lieutenant, Robert Iger, will succeed him. Why does he want Iger? Because everyone in the media business knows Iger is a suit--a nice guy who dresses well but whose elevator doesn't go up to the top floor. I suspect that Eisner wants Iger who Eisner believes will eventually fail, thus making Eisner look good in comparison. But, that's Hollywood and the media. Power is corrupting, which means bullies are corrupt--just ask Cheney about Haliburton.

Posted by Charles Warner at 11:38 PM | Comments (0) | Print |

Saturday, September 18, 2004. What

Saturday, September 18, 2004. What I Believe About Dan Rather.
Here is what I believe to be true about Rathergate:
1. I believe that the documents that he presented on "60 Minutes II" were recreations of real documents, but they were not the real documents. So they are like a good television docudrama or great fiction--they are not factual or real, but they tell the underlying truth.
2. I believe that Dan Rather and his producer, Mary Mapes, were duped, not because of any partisan agenda but because they were desperate for another scoop. In other words, they were dumb, not partisan. Dumb is probably not the correct word, poor judgment is better.
3. I believe that CBS News president Andrew Hayward is a brilliant, honorable journalist who was caught between a rock and a hard place. He had no choice but to back up his embattled anchorman--hanging the over-the-hill anchorman out to dry would have been ruthlessly unconscionable--but Heyward also had to attempt to protect CBS New's credibility and "redouble its efforts" to determine whether the documents are authentic (as quoted in a New York Times article on Thursday, September 16). In the Times story Heyward was also quoted as saying, "Because there continue to be questions swirling around the documents, it's important to keep looking into those as best we can. I'm very confident in the report, but I want to get to bottom of these continuing questions."
I've met Heyward and admire him, and I can see him making those statements speaking confidently and solemly, but you know he had to be dying inside. It was "60 Minutes II" that broke on television the Abu Grahib torture scandal, of which CBS was rightfully proud (and proud to have waited two weeks to make sure the story was completely accurate). His beloved CBS News division is now under a cloud that is being billowed out of control up by press coverage. It seems that everyone is piling on, like the LA police went nuts kicking and beating Rodney King when he was down. CBS News and Rather have been favorite targets of the religious right wing , neo-cons, Republicans, and rival television news organizations, especially the neo-con mouthpiece, Fox News, so, of course they are piling on. The print media, naturally, can't wait to trash network television news (there is no need to trash local television news because it's an accepted fact by audiences and everyone else that local TV news is no longer news, merely poorly produced entertainment).
4. I believe that Andrew Heyward will survive Rathergate but that Dan Rather won't, both of which are good outcomes. CBS needs Heyward a lot more than they need Dan Rather. CBS couldn't just fire Rather, even though you know CBS top executives would love to. But now they can nicely suggest to old bronze pants (Walter Cronkite, who Rather succeeded, was known as old iron pants) that he retire. After all, Cronkite retired in 1981 at the age of 65 because it was strict CBS policy back then that every employee had to retire at 65, which pissed off Cronkite. That's when Bill Paley was chairman of CBS, and he even made Frank Stanton, the greatest and most brilliant media executive ever, retire at 65, which pissed off Stanton. Of course, Paley didn't retire until he was in his 80s and senile. Owners just can't let go--look at Redstone and Murdock. Paley ultimately ruined CBS, once known as the "Tiffany network" by selling it to the bottom-feeder, skinflint, and non-broadcaster Larry Tisch.
Rather is 72, and it's time he went back to Texas and try to get his dogs to hunt. If CBS can get Rather to retire because he's old and slow, then they might be able to get Mike Wallace and the other cliff dwellers in the "60 Minutes" old-age-home-group to retire. Or maybe CBS could start a cable channel using Rather, Wallace, Safer, Andy Rooney, Bradley, et. al. to do news and features on a Old Farts cable news network that features reruns of "60 Minutes"--it would be perfect counterprogramming to Fox News, which as captured the younger demos.
5. I believe that it's really funny that Rather's birthday is October 31, Halloween ( he'll be 73 this Halloween). He's wearing a young man's costume and dark hair. In addition, he's been masquerading as a serious journalist for years. He's no Cronkite, who had solid gounding in newspaper and wire-service journalism. Rather is a baby of the television era, his prior experience before coming to CBS in 1961 was in local television news. Back then TV news was not as silly as it is now, but it was pretty bad and cute was more important than brains, as it still is today (except at CBS News, where old seems to be the main criterion). I think Rather thinks of himself as an anchorman, the same type of anchorman Will Farrell protrayed in the movie of the same name.
6. I believe that Rathergate has demonstrated the awesome power of blogs, the newest and rapidly becoming one of the most powerful voices in journalism. Rathergate is a tipping point for blogs, which are redefining the meaning of "the press" and "journalist." A. J. Liebling's most famous quote, "freedom of the press is limited to those who own one" was a brillinantly insighful quip when it cost tons of money to own a newspaper, magazine, or radio or television station. But today all you need to publish a blog on the Web is a computer and access to the Internet. The blogging platform that I use, Blogger.com, is free, so you don't need any money to blog or know how to write or be a journalist or even be smart, as evidenced by this blog. And blogs are fast. By mid-day Thursday, September 16, the day after "60 Minutes II," which airs on Wednesday evenings, bloggers had picked apart the supposed National Guard memos that indicated Bush had been a bad boy and disobeyed orders.
7. I believe ten years from now that what will be remembered most about Rathergate will not be that Rather or CBS showed phony documents or Bush's poor National Guard Vietnam-dodging record (everybody accepts that he got special privileges and says, "So what? What do you expect from a spolied rich, heavy drinking Yalie."). I believe what people will remember was that blogs uncovered the hoax and that it was the point at which blogs became a legitmate member of the fourth estate and took on an important watch-dog function. If you want to check out a cool blog/Web site that's performing a liberal watchdog function, go to Mediawhoresonline.com. This site claims: "Media Whores Online takes an unbiased, in-depth look at the vast myriad of whores who call themselves 'journalists.' MWO casts a garish spotlight on the relentless screaming heads of television, the babbling paranoids of squawk radio, and the crayon scribblings of lazy print media 'journalists.' I don't think Media Whores Online will keep the screaming heads, babbling paranoids, or lazy print media journalists honest, truthful, or unbiased, but it was good to see a list of "good" and "bad" journalists (and lots of bloggers were included) so I could see which ones to read--the ones that I knew would agree with my point of view. Well, what do you think, that I'm going to listen to Rush Limbaugh or watch Bill O'Reilly? Of course not, I'm going to do what everyone else does, read stuff that reinforces my current opinions and prejudices. At least now I know where to go to get the biased stuff I want.

Posted by Charles Warner at 9:04 PM | Comments (0) | Print |

September 15, 2004

Wednesday, September 15, 2004. Letter

Wednesday, September 15, 2004. Letter to ASME
I added my name as a signatory to the following is a letter to Marlene Kahan, executive director of the American Society of Magazine Editors (ASME), asking ASME to bolster its editorial guidelines, to counter the new demands from advertisers.

Dear Ms. Kahan:

Magazine editors in the U.S. are under increasing pressure to weave advertising into their editorial content. In the past, advertisers have sought to influence stories, often with success. Now they are going further, and seeking to turn ads into articles.

These efforts are a fundamental threat to press freedom and to the integrity of American journalism. If magazines become mere tout sheets for products and the interests of those who sell them, then every story will be suspect, and the reading public may have nowhere to turn for information that is truly independent of reigning commercial interests.

If there was ever a need for resolute action by your organization, this is it. You should strengthen the Society’s editorial guidelines, to draw a clear line against aggressive advertiser intrusion into story content. This would both provide confidence to readers, and would prevent advertisers from playing one magazine against another. It would also give editors a convincing reason to turn down advertisers’ requests.

In recent months, publications such as the Wall Street Journal, Advertising Age, PR Week and the Christian Science Monitor have reported on how advertisers are leaning on editors to blend advertising with editorial content. This is part of broader efforts by advertisers to increase the impact of their advertising spending. Other media--especially television, movies and video games--have acceded to advertisers demands for more product placements.

Now advertisers are trying to gain similar concessions from magazines, too. “The only way we’re going to be more successful is to get even more creative and try to find ways to address this church-and-state,��? meaning the high wall between advertising and editorial, Matthew Spahn, director of media planning at Sears, Roebuck, told Advertising Age.

Many editors are feeling the pressure. “More advertisers ask us to blur the lines between advertising and editorial,��? Nina Lawrence, publisher of Bride and Modern Bride, told Advertising Age. “It’s accelerated in the last year.��?

Brand names appear more frequently in magazine articles these days, which raises questions about the extent of product placement. For example, the Christian Science Monitor recently reported on an article in Ski magazine, which mentions the Land Rover truck brand eight times, and features seven pictures of the truck--in an article on travel in Colorado. The article praises the Rover for its “versatility,��?“well-crafted lines,��? and a “rugged but cosmopolitan look,��? as well as its “ride [which] was smooth even in bad conditions.��?

Some editors appear to be weakening in the face of advertisers’ demands. For example, Kim Olson, director of brand public relations for General Mills, told PR Week, “It depends on the magazine and the publisher, but I see much more openness to (product placement) now than there ever has been before. Where it used to be church and state, there is much more of a willingness to come together and at least discuss it – not always a willingness to do, but a willingness to discuss.��?

The American Society of Magazine Editors should safeguard the integrity of magazines, by incorporating the following provisions into its editorial guidelines.

Product placement. If an author, editor or publication receives money, goods or other consideration from an advertiser mentioned in an article, that fact should be prominently disclosed, including the amount or fair market value of the goods or payment.

Advertorials and special sections. The words “advertising��? or “advertisement��? or “promotion��? should be at least 1.5 times the size and weight of the publication’s normal editorial body type face, rather than just “at least equal in size.��?

No special treatment for advertisers. ASME should incorporate a provision from the Society of Professional Journalists’ code of ethics to “Deny favored treatment to advertisers and special interests and resist their pressure to influence news coverage.��?

Enforcement. Current ASME enforcement mechanisms are inadequate to meet the new increased advertiser pressure. Any magazine that violates ASME editorial guidelines should be ineligible for National Magazine Awards for at least five years. Editors who violate the editorial guidelines three times should be permanently expelled from the ASME. All warning or sanction letters from ASME should be made public and placed on the ASME website.

Sincerely,

Robin Andersen, Associate Professor, Department of Communication and Media Studies, Fordham University; author, Consumer Culture and TVProgramming
Susan Douglas, Professor and Chair, Department of Communications Studies, University of Michigan
Nicholas Johnson, Visiting Professor, University of Iowa College of Law; former Commissioner, Federal Communications Commission
Robert McChesney, Research Professor, University of Illinois at Urbana-Champaign; author, Rich Media, Poor Democracy
Mark Crispin Miller, Professor of Media Ecology, New York University; author, Boxed In: The Culture of TV
Gary Ruskin, Executive Director, Commercial Alert

Posted by Charles Warner at 10:44 AM | Comments (0) | Print |

September 12, 2004

Sunday, September 12. Aron Levinson

Sunday, September 12. Aron Levinson Responds.
Aron Levinson is a National Account Manager at IAC, which operates leading and diversified businesses in sectors being transformed by the internet, online and offline. IAC consists of IAC Travel, which includes Expedia, Hotels.com, Hotwire, Interval International, and TV Travel Shop; HSN; Ticketmaster, which oversees ReserveAmerica; Match.com; LendingTree; Precision Response Corporation; IAC Local and Media Services, which includes Citysearch, Evite, Entertainment Publications and TripAdvisor.

Aron responds: "Interactive is alive and well. The 'traditional' advertisers are moving more and more of their advertising budgets to online.

And to hammer home your point about the growth of online, I received an offline RFP for a travel bureau that started out saying 'as offline media is still part of our buy, we understand that online is a more valuable tool for direct response and we will spend the majority of our budget in online media.'

McDonald's, Walmart, Best Buy, to name a few are in the online space and buying advertising in big chunks; not like 1999-2000 when advertisers like Toyota would spend .25% of their ad budget online just to say they were in the game.

That 3.4% will grow and being an Interactive Sales Rep, man, I can't wait. I started out with Interactive 4 years ago, then the bubble burst, went to traditional media and now I'm back with a more mature Interactive world. The online space is smarter with targeting capabilities, the agencies are smarter, and the big-boy advertisers see the value of online advertising."

Thanks, Aron.

Posted by Charles Warner at 12:53 PM | Comments (0) | Print |

September 6, 2004

Monday, September 6, 2004. The

Monday, September 6, 2004. The Web Feels Like a Wallflower
You'd think $9.1 billion was a lot of money, but online advertising executives were vocal recently that it wasn't enough. Online ad execs feel the online medium should get a higher share of total advertising dollars than the 3.4% it received in 2003, according to eMarketer's Ad spending report and as reported in the August 16 issue of Advertising Age (p. 8).

The 3.4% of total U.S. ad spending is probably a good number. Robert Coen, Universal McCann's longtime and highly touted forecaster, puts Internet speding at 2.57% of the total ad spend (Advertising Age, June 28) and TNS Media Intelligence/CMR put it at 4.74% of the total (Media Post's Media Daily News, August 24). Coen has consistently been low for Internet spending over the last few years and CMR data is based on gross numbers that includes barter, to its figures have been consistently high. I have found that eMarketer's numbers over the last several years have been pretty good.

So, if 3.4% is about right for the share of Internet advertising, why are online ad execs complaining that $9.1 billion isn't enough? Because it isn't enough. Advertising Age's August 16 story by Kris Oser had headlines that said it all, "Net players say marketers still give short Web short shrift. Argue 3.4% of spend does not match online use."

In the article, Oser writes, "The online spend they grouse, should at least approach the 14% of media time consumers devote tot he Web." And later in the story, "Joanne Bradford, MSN's chief media reveune officer, said, 'If we were to take our share --14%--and apply a little bit of a discount form print and TV, we should be getting 7% to 12% of marketer's budgets.'" It should be noted that the 3.4% share includes only online display ads and search.

The other online ad exec to be quoted in Oser's story was Wenda Harris Millard, chief sales officer of Yahoo, who was quoted as saying Interactive's share would increase because, "Marketers follow eyeballs." True, and Coen has predicted a 2o% rise in Interactive's share of total ad spend for the full year of 2004.

I found several things interesting about Oser's Ad Age story. First, that the writer picked up on the the biggest story that Interactive has to tell, which is that it is a wallflower that deserves to be invited to dance its full share of dances. Interactive does deserve more than twice the share of ad spend that it is currently receiving--a minimum of 7%, as Bradford notes. Second, I didn't care for the tone of the story. Oser indicates that online execs "grouse." It's as though he's hinting that they should be satisfied with 3.4%. Third, I like the titles of the two Interactive execs (chief revenue officer and chief sales officer) because it's way to elevate them above the old fashioned media title of general sales manager and even above a "president of sales." I especially like MSN's title for Bradford because it changes the focus of the ultimate goal of the job from managing a sales department to where it should be, generating revenue. Smart, but than again, no one has ever said Microsoft is stupid.

Finally, it's clear that MSN and, to some degree, Yahoo have good PR departments and are getting the message out that Interactive deserves a bigger share of marketer's ad dollars. But the Interactive company that has the biggest potential, AOL, wasn't at the dance, wasn't quoted. AOL still has the most subscribers of any ISP, but has given up its early lead in ad revenue to Yahoo and is letting MSN take the lead in being an industry spokesperson for the Interactive industry. Shame on AOL.

And shame on the Interactive Advertising Bureau (IAB). Where is it? Gary Fries of the Radio Advertising Bureau (RAB) is quoted a lot when the media press mentions radio, even if it is to explain radio's eroding share of ad dollars. IAB president and CEO Greg Stuart and chariman Steve Wadsworth better get on the stick, become more visible, and get some ink. Thank goodness two of their board members, Joanne Bradford and Wenda Harris Millard, are out touting the medium and doing their jobs, once again leaving the guys behind. AOL is not active on the board of the IAB, is not involved in the industry, is not visible, and is not selling the medium. Is it any wonder its share of Interactive ad dollars is declining? AOL isn't a wallflower at the Interactive ad dance, it's a no-show.

Posted by Charles Warner at 10:26 AM | Comments (0) | Print |

September 5, 2004

September 5, 2004. Disruptive TechnologiesIn

September 5, 2004. Disruptive Technologies
In his 1997 book, The Innovator’s Dilemma, Harvard Business School professor Clayton Christiansen introduced the concept of disruptive technologies—technologies that at first go almost unnoticed but then eventually replace established technologies and disrupt traditional businesses and business models. The Internet was the big kahuna of disruptive technologies and it has spurred another disruptive technology—Skype.

Skype is the brainchild of two smart Scandinavians, Janus Friis and Niklas Zennstron, who pissed off the entire music industry to the delight of music fans by creating Kazaa, the most popular file-sharing software ever. The two whiz kids are sequestered somewhere in Estonia and have just launched a software program they call Skype that “will allow users to place telephone calls over the Internet virtually free of charge and threaten to upend the telecommunications industry,��? according to an August 9 article in FORTUNE (p. 94).

Digital photography is a disruptive technology that is displacing film, TiVo is a disruptive technology that is changing the way people watch television and, therefore, the way networks program, and iPods are cutting into radio listening. Will Internet phone calls put AT&T under?

I don’t think Internet phone calls (techhies call it VOIP—voice over Internet protocol) will do away with land lines for a decade or so, but cell phones might. Most people can’t figure out how to use their computer for anything more complicated than e-mail and surfing the net to find the perfect mate (real or photographed), so I’m not sure they can figure out phone-call software. But, then I wasn’t sure radio would be hurt by Napster or Kazaa, so what do I know.

The initial enthusiasm about the Internet as a disruptive technology that would replace everything but sex (books, libraries, classrooms, telephones, radios, televisions, catalogues, retail stores, banks, stock brokers, casinos, and girlie magazines) was widely exaggerated, but not before several charlatans/visionaries like Steve Case ran off with billions of dollars from early believers. Case claimed he wanted to create in AOL a global communication medium more valuable than the telephone or television. It turned out it was more valuable to him and major stockholders who got out early than it was to society as a whole. So I’m wary of claims that any new technology will displace old technology. I don’t see Skype upending the telecommunications industry. But if you disagree with me, call me on my computer.

Another disruptive element the Internet has spawned is the bolg. Who thought when the visionaries were predicting we’d shop, communicate, read books, and listen to music on the Internet that we’d be able to publish, to write our own columns, say whatever we thought or felt and post them for anyone read? I think in the long run blogs will have a greater impact on society than Internet phone calls. Blogs have already changed the way money is raised in political campaigns, the way people get news, opinions, and insight, and the way people communicate or mis-communicate—lies are more prevalent than the truth in blogs, and that won’t change. Therefore, blogs make us more careful, more discerning readers, which is a good thing.

I can supplement reading the New York Times and the Wall Street Journal by reading The Rude Pundit, Washington Monthly, The Nation, The Monthly Review, Swami Uptown, ABC News’s The Note, Eric Alterman, Andrew Sullivan, Tom Paine.com, and The Head Butler (not really a blog, but an erudite Web site written by the brilliant Jesse Kornbluth that you have to sign up for). So forget about calling me on my computer, sending me jokes or digital pictures, or watching your TiVo, read some good blogs that will give you something to think about and expand and even blow your mind—good ones are better than Maui Wowie.

Posted by Charles Warner at 10:31 PM | Comments (0) | Print |

September 5, 2004. Fold MSNBC. Joe

September 5, 2004. Fold MSNBC.

Joe Flint wrote in an article in The Wall Street Journal on August 27, "Looking to end recurring speculation that their partnership is on the rocks, executives from General Electric Co.'s NBC Universal and Microsoft Corp. said the two companies remain committed to MSNBC, the cable news channel they launched in 1996."

You can be pretty sure that the relationship is on the rocks when both companies think it's time to make an announcement that their joint venture is doing well . The rumors about Microsoft's dissatisfaction and the possible split in the partnership have been rife for some time and have heated up recently.

And with good reason. Despite the upbeat press releases about the MSNBC cable channel's "progress," in reality the third-place cable news channel is a clunker in the ratings. For a while I thought MSNBC might be a gritty alternative to the Fox Entertainment channel (Fox sure isn't news) and dull, ancient CNN. (When is CNN going to realize it isn't going to get viewers by featuring old, old people who like death warmed on on the air--Larry King, Bob Dole, Judy Woodruff, etc.?) But MSNBC continues to be an embarrassment to both NBC and Microsoft.

What is MSNBC's problem? It doesn't have a promotable difference. In today's media world, you gotta have a gimmick. Fox's gimmick was young, attractive anchors, glitzy graphics, and controversial talk-show entertainers in prime time. Fox clearly had a conservative bias, which they brilliantly hid with the Orwellian lie, "We report, you decide," which they use with a wink. Brilliant, promotable, and devestating. It not only positions Fox, but positions CNN and MSNBC was biased (read "liberal") news. How can CNN and MSNBC position themselves against Fox? By being dull, old, or balanced? Of course not. Fox was the first mover and thus has the advantage as being perceived to be balanced, especially to the younger, male, conservative audience it is aiming for.

MSNBC is so bad (meaning unpromotable--it doesn't have a hook) that ABC is considering doing a cable news channel. Why not, it could repupose the news it gathers for the ABC television and radio networks, and it couldn't do it any worse than CNN or MSNBC--ABC could learn from their mistakes.

When I was in the radio business in the 1970s (before there were only three or four big radio comglomerates and, thus, the business was more competitive), we knew that once a station fell near the bottom in the ratings that you couldn't improve it slowly to increase ratings, you had to blow up the format and start all over again, preferably with new call letters if possible. In other words, something brand new had a better chance of success than fixing a product that had a poor perception and image.

So NBC Universal should swallow its pride, fold its obviously losing hand, and shut down MSNBC. Microsoft would be delighted to save the $30 million it annual gives NBC and to write off its initial $500 million investment--that's chump change to Microsoft, but, again, it's a matter of pride. Microsoft hates to be associated with losers, especailly losers that cost it money.

That leaves the MSNBC Internet news site, which is run out or Redmond, mostly by Microsoft. Microsof should buy out NBC for the MSNBC Web site and continue to run it, purchasing its news from NBC, which still has a good news reputation because of Brokaw and its news organization. MSNBC was one of the first news sites and is still near the top in unique users monthly. It now has cool video clips and generally is better than CNN in my view. It also has some cool blogs, like Eric Alterman's, which I like.

As more an more people get their news from the Web, there is good potential audience growth for news on the Web, and with the Internet leading the growth numbers for advertising, there is good potential advertising revenue growth for MSNBC.

It's not time for NBC Universal to hold a losing hand; fold it.

Posted by Charles Warner at 2:27 PM | Comments (0) | Print |