Goldman Sachs Report on Media Economy; Myers Research Lists TV/Online Research Leaders

A recent report from Goldman Sachs provides a roadmap for media sellers planning Upfront strategies. Goldman analysts Mark Wienkes, Brian Karimzad, David Lofty and Grace Huan identified three overriding themes for 2009 based on an analysis of 4Q earnings transcripts from the top 100 U.S. advertisers and various media companies' management comments:

• Longstanding 'Trouble' categories (Autos/Financials/Retail/Media) are still making incremental spending cuts;
• Defensive sectors are enjoying the benefits of resulting media deflation, but many are redeploying the savings elsewhere; and
• Share taking companies that bucked 2008 trends and increased spend will largely maintain or increase 2009 spending.

The Goldman Sachs report points out that the top 100 U.S. advertisers represent about 70 percent of ad spend. Companies projected to increase spending include Pepsi, Yum Brands, McDonald's, L'Oreal, Sprint, General Mills, DirecTV. Many firms, such as Procter & Gamble, are expecting to reduce overall ad investments but maintain or even increase their market presence through media cost cutting. The Goldman report observes "many healthy, defensive companies are taking savings from the deflationary ad market and redeploying them elsewhere."

Marketers' are less willing this year to commit long-term to Upfront spending that carries them well into 2010. With little market visibility, advertisers are reluctant to invest. Compounding Upfront challenges are concerns of a public backlash against highly visible ad campaigns by companies that have accepted federal bailout and recovery funds.

Media Research Innovation is Not Meeting Industry Needs

With hundreds of millions of dollars invested annually by media companies in custom and syndicated research designed to offer marketers insights beyond the basic Nielsen and comScore currencies, advertiser and agency executives remain dissatisfied with the quantity and quality of data being provided by media sellers. Among 90 network television and online media sellers, only five are rated "very good" or "excellent" for providing relevant research insights by 50% or more of 423 advertiser and agency executives surveyed by Jack Myers Media Business Report. The five are USAToday.com, Univision, Nickelodeon, Rainbow Networks (AMC, We), and The Weather Channel.

Companies that are rated positively for delivering relevant research insights by 45% to 50% of respondents include MTV Networks Entertainment Group, Scripps Networks, Turner Entertainment, NBC Universal Cable, and Google Video. Magazines and other media were not included in the Myers survey.

Subscribers to the Jack Myers Media Business Report ($12,000 annual corporate subscription) can access the full survey results providing detailed media company performance for seven sales organization attributes at www.myersreport.com.

Jack Myers advises media companies, agencies and marketers on transformative business models and writes a weekly blog at www.jackmyersthinktank.com.