Monday, July 02, 2007

Photo: a reward from patience by DanielJames Cool, thanks!

"It is with life as with a play - it matters not how long the action is spun out, but how good the acting is." Seneca

"Knowledge comes by taking things apart: analysis. But wisdom comes by putting things together." John A. Morrison

"A principle of policy once established, be it sound or unsound, is almost sure, through evolution, to exert an influence far beyond that created at the time of its original inception." Alfred P. Sloan Jr.

The weather here at home has been nothing short of spectacular these last few days. Back in the office today.

Robert Scoble is now writing a column for Fast Company, check out his first here. Meanwhile father and son contrast and compare Nokia's N95 and the new iPhone here.

Everything is Miscellaneous the new David Weinberger book is a wonderful read. David does an outstanding job of story telling and in the process makes his case about the new principles of digital disorder that are changing, well, everything. Highly recommended. Amazon info here. David's book blog here. Bravos David!

The rest of the story: The King won the hour, Fox took prime. Thanks to Steve Donohue of Multichannel News we have comparative data. In the 9pm hour - The King and the heiress 3.1 mil, H&C 1.6 mil, Scarborough 502K. Prime - Fox 1.858 mil, CNN 1.851 mil, MSNBC 279K. Word around LES this weekend was Rosie will get her own prime shot on MSNBC.

Thank you very much for all the emails especially those on the Google Audio AdSense initiative. Broadcast sales channels remain among the least efficient. Further, one could make the case those traditional broadcast sales channels are less than effective in new business development. The mindset on the part of broadcasters seems to be "it's our audience, our inventory, we will sell it on our own (with the assist of our national rep), thank you." The disconnect has three parts...

  • Getting better v Getting different. Broadcasters are focused on working harder, some would say smarter, the goal being to get better at local sales. The areas where progress is being made...1) more aggressive silo switch pitching thanks to advances in competitive tracking and 2) NTR. Broadcast is still, primarily, focused on other broadcast. As a practical matter, broadcast is getting better and better at calling on - generally - the same clients. Real new business development (defined as those new to the medium or new to electronic) continues to represent a small percentage of the rev stream. The result is suppression of share growth. Getting better is not yet producing meaningful growth.
  • Averse to the risk of new. The coverage of last week's Interep meet suggested Farid would rather fight than switch, that doing business with an ad exchange would indicate his sellers had not done their jobs. It is not either or but rather and. My thought is (provided proper rules of engagement) the business and clients ad exchanges are most likely to bring to stations would, in fact, be new. These are the clients broadcast has failed to pitch. Absent a plan to change the way broadcast is calling on non-broadcast spenders to continue being averse to the risk of new sales channels seems less than wise. The argument that ad exchanges will advance the commoditization of station avails and work to diminish market values and AURs presumptively involves station folks going off the rez. Broadcast needs to own up to the facts - given the present business structure - some inventory will never be sold, some clients will never be called on. Coopetition is one solution. Another is Doc Searles' Project VRM. Ad exchanges could serve an important role in real new business development.
  • The new sales channel value proposition. Broadcast needs to take a flyer on new sales channels. The value of what Google is potentially bringing to the table is somehow not being communicated effectively or not being understood. Perhaps it's being lost in translation. Broadcast needs to move beyond the notion of remaindering and remnant. If the Four Seasons can sell their inventory online without putting their good name and business at risk so can broadcast. The solutions needed here should be more buyer-centric, less seller-obsessed. To borrow a phrase from my favorite modern day military strategist "Less Clausewitz, more Sun Tzu." My thanks to Thomas P.M. Barnett.
One symptom of how really soft this year has become - affiliates not only running paids in daylight hours but running paids in prime. The arithmetic would suggest taking an hour of inventory off the shelf to run a paid = more profit. Perhaps, but it deserves attention. At what cost do you value your audience? Seems the most important question is not how much are you charging but how much are you keeping and at what unintended cost (e.g., loss of audience).

Even more important - your cost to create avails likely remains constant. That is one of the flaws in most AUR calculations. The average against inventory sold is one pov. The ratio of inventory sold v cost of inventory creation is another. The next time you calc an AUR take into account the unsold avails. Let's use a radio example. 12 units per hour x 24 hours = 288 avails. Given a 75% load, 216 are sold, 72 remain unsold. Include the value of the 72 @ 0. Another pov - divide the day's take by the total number of avails to arrive at a real-world evaluation of performance. Change the denominator.

Congrats & cheers: Jason Kilar named CEO of the new News Corp - NBC online video jv. Erica Farber my former RKO colleague and now fellow Rockwell Award honoree, well deserved! Sorry my schedule did not allow me to be at The Conclave this year, it's always a good meet. Mister Ed Lambert on his appointment as OM of the Bend Radio Group. A wonderful move for Mr Ed and a very smart hire by BRG. We do miss Oregon, what a beautiful part of the world. Google on acquisition of GrandCentral, Wesley Chan delivers the details here. Wieden & Kennedy on winning the Nokia creative assignment - very cool.