jackmyers.com
Free ContentFor Members Only
HOME MEDIAVILLAGE.com WOMEN ADVANCING HOOKED UP MEMBERSHIP INFO MEMBER COMPANIES MEDIA BUSINESS REPORT ECONOMIC FORECASTS RESEARCH
Home > JackMyersThinkTank > Advertising and Media Innovation: Optimedia, IDG, American Express Publishing

Advertising and Media Innovation: Optimedia, IDG, American Express Publishing

September 23, 2008

Published: September 23, 2008 at 11:44 AM GMT
Last Updated: September 23, 2008 at 11:44 AM GMT

Advertising represents less than 30 percent of the average marketer's total communications budget. The other 70% + is invested in consumer sales promotion, trade promotion and price incentives, event marketing, public relations, cause related marketing, direct marketing, consumer research and other performance-based marketing programs. Unlike advertising, most of these investments have a direct connection to return-on-investment metrics. Media companies and agencies are focusing significant resources on defining the R-O-I valuations of media spending, but traditional advertising models remain entrenched as the core foundation of the business. Several companies are looking toward greener pastures and evolving their businesses away from traditional advertising/media models while embracing alternate forms of marketing communications.

Antony Young, president of the Optimedia U.S. division of Publicis, points out "marketers have many places to put their budgets and there is not enough debate about how those budgets should be allocated." He told Jack Myers Media Business Report, "with what's happening with the economy, we see a lot of 'advertising in a recession' studies that say you need to keep spending. That will not cut the mustard with corporate marketing and brand executives." An ANA study last month reported 53 percent of marketers expected to cut back budgets in the next six months, on top of those who have already done so. "Agencies like Optimedia and media sellers need to be able to better understand what elements of communications are driving brand responsiveness in the short term – with a higher level of focus on outcomes rather than outputs." In the past 18 months, Optimedia has tripled the size of its Strategy Resources Group and more than 70 percent of the company's staff are strategy/planning/research executives

AT IDG, publisher of Macworld, Computerworld and PC World, only 40 percent of total revenues are generated by the traditional magazine business, compared to 80 percent just five years ago. Bob Carrigan, IDG president, advises "the tail is now wagging the dog. We used to use databases to drive subscriptions. Now we use magazines to drive databases. We actually make significantly more money per user from event and online related activity against a name than from a magazine subscription." This year, IDG will host more than 750 events globally including 250 in the U.S., including Macworld where Apple chairman Steve Jobs makes his famed annual appearance. IDG generates attendee revenues and sells high value sponsorships, "using databases to put the butts in seats," explains Carrigan. This model has translated into increased profits for IDG as the share of business from digital, database marketing and events has increased.

American Express Publishing's president Ed Kelly reports that 40 percent of profits are generated by non-magazine businesses, including books, events and membership/affinity clubs. This compares to an estimated magazine industry average of 10 percent of revenues generated from non-magazine business. However, unlike IDG, Kelly tells Jack Myers Media Business Report that the company's online investments are not yet profitable due to expensive infrastructure costs and intensive cost-per-thousand competition. Amex Publishing has, however, used online to support more than 600,000 members of affinity clubs, with members paying up to $80 annual fees. Only half of all club members are subscribers to Amex's publications, which include Travel + Leisure, Food & Wine and Departures.

Optimedia's Young has established a significant competitive advantage through the company's database of 60,000 consumer interviews conducted over the past three years. Young explains the research enables media and communications planners to evaluate consumers' marketing communications touch points in 44 business categories. "This offers a much higher level of confidence about where budgets should be allocated," he says. "Our strategy is about being clearly focused on driving results and not just about executing plans."

Young exclusively shared with Jack Myers Media Business Report that seven of the top 10 most influential touch-points in terms of purchase and brand performance for marketers are promotional or in-store activities such as in-store sampling, coupons on packaging, in-store promotions, free standing coupon inserts and free gifts. "We see shopper marketing increasing in importance and the need to recognize these as media alongside television and print advertising," Young advises. Among paid advertising media, television was the strongest in terms of influence on purchase followed by specialist magazine ads, Internet search, consumer magazine ads, newspapers, TV sponsorship and then radio ads. Internet display ads performed poorly in terms of sales influence. Consumer opinion sites & blogs rated slightly more effective than newspaper advertising

Seven of the top 20 touch-points were independent sources of information, endorsement or recommendation e.g. family/friends recommendation, doctor recommendations, comparison websites, print articles - demonstrating the declining reliance on brands and paid advertising. "As an industry, we are needing to be more clever in recognizing this movement and reflecting this in our strategies."

Young suggests the economy will challenge agencies and marketers in two areas. First, he says, "is a much greater urgency to prove return-on-investment. That will require CMOs to reestablish their own credentials within their own organizations. They will be held more to account to define marketing's outcome." The second area Young outlines is a "focus on the question of efficiencies. Optimedia has focused on putting strategy at the heart of the agency. Of course we execute media buys and plans as the core of our business but more and more there is a call to be more strategic about how we approach communications. Often silos prevent that discussion. When we talk about efficiencies it's about cutting across silos and having more of a strategic discussion. Clients aren't asking Optimedia to buy a media plan more efficiently," he advises. "They are asking about the total marketing mix."

Carrigan uses IDG's massive databases on behalf of its clients for lead generation and aggressive online promotion. "Names are like gold," he exclaims. "We collect names, earn their permission, and introduce them to white papers, web casts, and other content that we blend with our editorial information. It's a gigantic business." He acknowledges "print will be a viable business for many years, but it is not what it used to be. We can continue in our legacy business but we need to innovate and grow new businesses that leverage our past experience." Carrigan compares IDG's evolving business models to Apple's development of the iPod and iPhone and Microsoft's expansion into the gaming space. "We can build different businesses that leverage the best of our company and take us in new directions."

Carrigan and Kelly will join Meredith Publishing president Jack Griffin on the opening panel of next month's American Magazine Conference http://www.magazine.org/EVENTS/conferences/american_magazine_conference/index.aspx, which I will be moderating.

About Jack Myers: For more than two decades, Jack Myers has been the media industry's leading analyst, researcher and advisor on relationships among marketers, agencies and media sellers, providing business development services and custom insights on relationship best practices to more than 200 marketers, agencies, media companies and industry service providers. Jack can be reached at jm@jackmyers.com

add this social bookmark link

12 Comments
tory burch - July 7, 2011
American classic leather goods brand coach outlet, one like the simple, durable and unique style to win consumers. And has the reputation of the coach store the good old bag, was actually the original inspiration came from a softball glove, brand founder Miles Caha watch baseball in a game scene was surprised to find a softball glove The more you use the more smooth , more soft features, so he tried to go back after the special treatment of leather, so softer, cheap coach with easy bleaching, wear characteristics, and coach wallets simply use a damp cloth, leather can retain perfect as new, coach claire bag so durable and convenient design, immediately by the majority of consumers coach hobo bags!
tory burch - July 7, 2011
American classic leather goods brand coach outlet, one like the simple, durable and unique style to win consumers. And has the reputation of the coach store the good old bag, was actually the original inspiration came from a softball glove, brand founder Miles Caha watch baseball in a game scene was surprised to find a softball glove The more you use the more smooth , more soft features, so he tried to go back after the special treatment of leather, so softer, cheap coach with easy bleaching, wear characteristics, and coach wallets simply use a damp cloth, leather can retain perfect as new, coach claire bag so durable and convenient design, immediately by the majority of consumers coach hobo bags!
tory burch - July 7, 2011
puma shoes sports shoes, sportswear and lifestyle and other German manufacturers. puma store, founded in 1924 by brothers Rudolf and Adolf Dassler. They became famous in the 1936 Olympics in Munich. Adolf persuade the United States sprinter Jesse Owens to wear his designs athletic peak. Owens won four gold medals and Dasslers "shoes to become one of the world famous athletes and many top athletes preferred puma online shoe from the football player Pele and Maradona's sprinter Usain Bolt and the most Formula One drivers. Puma ferrari employs about 9500 yuan or so staff, generate annual income of 300 million yuan and its products are sold nearly one hundred countries and it's website said: "mens puma shoes has become the most appropriate and sustainable long-term sports lifestyle company mission Puma Ferrari III

tory burch - July 7, 2011
puma shoes sports shoes, sportswear and lifestyle and other German manufacturers. puma store, founded in 1924 by brothers Rudolf and Adolf Dassler. They became famous in the 1936 Olympics in Munich. Adolf persuade the United States sprinter Jesse Owens to wear his designs athletic peak. Owens won four gold medals and Dasslers "shoes to become one of the world famous athletes and many top athletes preferred puma online shoe from the football player Pele and Maradona's sprinter Usain Bolt and the most Formula One drivers. Puma ferrari employs about 9500 yuan or so staff, generate annual income of 300 million yuan and its products are sold nearly one hundred countries and it's website said: "mens puma shoes has become the most appropriate and sustainable long-term sports lifestyle company mission Puma Ferrari III

coach outlet online store - July 19, 2011

Therefore he coach factory outlet online ordered built many beautiful gardens, here, his hand in hand with the taj stroll, sing whispers, love, in this Coach Small Bags he confided fascination of woman's eyes, he found another more Coach Purse beautiful world. These he left two people footprint garden, was named SHALIMAR Coach large wallets SHALIMAR is Sanskrit, original intention is love the temple. Emperor and his Coach medium wallets wives and their kingdom, has over the years away but romantic love story Coach Accessories but became earth praise beauty legends. Perfume

P90x Workout - July 20, 2011

The article is very good, I like it very much. I will keep your new article.P90x Workout
P90x Workout - July 20, 2011

The article is very good, I like it very much. I will keep your new article.P90x Workout
yankees Jersey - July 24, 2011
Welcome to MLBEdge.com - The Ultimate MLB Jersey Shop featuring an endless assortment of MLB Jerseys ! We have a huge selection of Authentic,Premier and Replica MLB Jerseys for Men,Women,Youth and Kids. Find your favorite MLB Jerseys and Get Free Shipping and 60 Days Returns Only At MLBEdge.com !
Spandan 2011 - August 22, 2011
But it is hardly to find out the difference from the original one,cause it has the same look and quality. Spandan 2011
Post a Comment










Commentary Archives

July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014

See all Archived Material

MediaVillage.com

What Might Replace the Set-Top Box?
As Cisco punts legacy SA boxes to Technicolor, I thought I'd look around my home at the existing set-top boxes and the like. We've got a whole-home DirecTV set up so that's two boxes and two remotes (though a DirecTV app can replace the remotes). At the set in the living room are two more boxes with remotes: Apple TV and Amazon's Fire make it four so far. In my office is a Comcast box; that's five. And a router makes six. We've also got three TVs, a couple of laptops, a couple of iPads and a couple of iPhones … not to mention an iPod somewhere. And, oh yeah, an Amazon Echo ("Alexa, did I miss anything?" "You missed Chromecast.")

TCA Stand-Outs Large (Hallmark, Nat Geo) and Small (WGN, Up, El Rey)
One of the most interesting things about covering the cable days of the twice-yearly Television Critics Association tours is observing which networks or network groups most successfully grab the attention of the hundreds of reporters and critics attending their press conferences and which ones don't make much of an impression at all. The results can be very surprising.

The CFO/CMO Union
Will the CFO and CMO ever form a more perfect union? I recently saw a study produced by Ernst & Young and reported in the Wall Street Journal that claims collaboration between CFOs and CMOs is increasing. The survey also acknowledges that there is still a long way to go to establish a real partnership between their responsibilities, particularly as it pertains to "common practices and cultural differences." In my opinion a perfect union is unlikely but a better working relationship is not only necessary but critical to the success of a business. Let's explore.

Multi-Sensory Experiences for Brands
This week on Mindshare's Culture Vulture Live, Mark Potts explores multi-sensory opportunities for brands.

TV is from Mars and Video is from Venus
In a spring 2015 trend report Business Insider stated that video ad revenue will double in just two years and reach nearly $5 billion in 2016, up from $2.8 billion in 2013. Consumers' engagement online, over multiple devices, increases daily. As the landscape for what exactly constitutes "TV" or "video" changes rapidly, advertisers are racing to keep up.

The Macro Forces Behind Slow GDP Growth
Ever since the end of the Great Recession a few years ago, there has been much written about the lack of both economic growth and inflation. Much of this coverage mentions that the post-recession recovery is much slower than the recovery of past recessions of the late 20th century.

Early AT&T/DirecTV Merger Questions
Now that the consummation of AT&T's merger with DirecTV is done, how will this $40 billion-plus deal impact consumers from both parties and the TV world at large? Chances are you haven't heard much over that question up to now, in part because of how this deal was completed last week -- Federal Communications Commission approval mid-Friday afternoon, and AT&T putting out a press release, and only a release, of the consummation less than two hours later. That's way late for much analysis on the part of the business news channels or journalism in general.

Trevor Noah Hits TCA; Nat Geo Honors Cecil
In performance on stage Tuesday night and again in a press conference Wednesday morning, members of the Television Critics Association got to know the man they will likely honor in the years ahead with multiple TCA Awards in the category of Outstanding News Program – controversial comedian Trevor Noah (pictured at top), who will take over Comedy Central's "The Daily Show" on September 28. Noah, a smart and engaging guy who joined "The Daily Show" last year as a contributor, quickly and efficiently charmed the group, setting the stage for years of admiration and handily putting behind him lingering memories about a series of sexist and anti-Semitic jokes he tweeted a couple of years ago.

Is TV Currency Dead? Predictions from AOL Open Series
There is a lot of talk these days about the changing TV landscape, from the advancement of programmatic to the demise of dayparts, the Upfront and even our current currency. All of this made for a lively discussion at the recent AOL Open Series on Programmatic TV. The event featured a panel of media executives from across the spectrum including Dermot McCormack, President AOL Video and Studios; Jaime Power, Senior Partner at MODI Media; Dana Hayes Jr, Group Vice President of Global Partner Development for Acxiom, and Dan Aversano, Senior Vice President, Client & Consumer Insights at Turner Broadcasting. The panel was moderated by Dan Ackerman, Senior Vice President, Programmatic TV at Adap.tv.

Is the ESPN Bubble About to Burst?
It’s episode 24 of Media Unplugged with branding authority Tom Asacker and media strategist Mark Ramsey.

At Summer TCA 2015, Netflix is Everything
Is Netflix everything? It certainly seemed that way yesterday at the Beverly Hilton Hotel during the historic opening day of the 2015 Summer Television Critics Tour. In a quantum leap of participation, and perhaps as a reflection of its current position in the home entertainment marketplace, Netflix impressively filled an entire day with panels for current and upcoming programs, along with a session with Chief Content Officer Ted Sarandos (pictured at top). And just like that, the scrappy streamer joined the ranks of CBS, NBC, ABC, Fox and FX – the only programmers who consistently present full days of panels during TCA tours, at least those in the summer.

Stuart Elliott: A 'Gawkward' Media Moment
It probably won't be long before the gatekeepers at the world's dictionaries are asked to approve a new word: "Gawkward," meaning an embarrassing or discomforting situation drenched in schadenfreude, as when a website known for anything-goes posts that upset and provoke others gets a turn in the barrel.

The Generation Gap(s) in Digital Media
One of the less appealing characteristics of the more strident members of the digital community is their habit of suggesting that the world of media planning, buying and selling was ill-informed, ill served by its measurements and entirely unaccountable until they came along.

Media Execs' Priorities for New Media Marketplace
The rapid proliferation of new digital, mobile and social (DMS) channels has completely changed the way that companies are connecting with their consumers. DMS channels are increasingly becoming a top priority for advertisers when developing strategies and campaigns to target and engage their consumers. The opportunities and challenges that this shifting landscape presents have been well documented.

Rob Norman @ VidCon: What Makes Selfies Stick?
VidCon is no longer cool. I know this because I was there and history tells me that the moment I show up, that's it for the whole “cool” thing.

Click Here for Membership Information