Do blogs influence journalists ?

The short answer is yes, but there is little reason to worry. According to a survey by Brodeur (a unit of Omnicom), blogs are usually not considered as “source” (thanks God), but they are useful in helping journalists better understand the context of a story, find an angle or even story idea. 70% check blogs on a regular basis. US reporters are active bloggers : 28% of them have their own (vs. about 0.8% at Le Monde… Oops).
> see article in Marketingcharts.

The Future of Print is in India

Rupert Murdoch is planning the launch of an Indian edition of The Wall Street Journal.He’s not alone to look at this gigantic market where print press enjoys a double digit growth. “Last year, all of India’s papers added 12 million new readers, says Raju Narisetti, the editor of the business paper Mint points. That is equivalent to five Wall Street Journals. There are 360 million Indians who can read and write and don’t read a paper”.
> see this great features story in The Independent on Sunday (soon to be available in India))

Search — Targets and Predators

Microsoft is definitely not happy with its 7% market share on search business, versus 21% for Yahoo and 66% for Google. Hence its $1.2 offer for the Norway’s Fast Search and Transfer. No doubt this industry is on the move. According to analysts, Yahoo’s core value is falling. One of them, quoted by New York Times “Bits” said that the value of the company’s cash and stock holdings exceeds its actual business. This Mozart of Excel is putting a value of €14bn for Yahoo, only 7% of Google’s €200bn !
> story in NYTimes Bits
> about the Fast acquisition, story in The Red Herring

TV — Sarkozy’s dream of the French BBC

During his Guinness Book press conference last Wednesday – 600 journalists attending -, Nicolas Sarkozy outlined his new dream of a French BBC, by proposingto remove advertising on public television, and replacing this money by a new tax (cheer-up!)on private TV and radio, and also on internet providers and mobile phone carriers. Problem is figures don’t compute. Offsetting €835m of advertising losses will require much more than new taxes. Furthermore, the new taxes will inevitably pass buy ISP and telco onto the user.In other words, the French viewer will pay twice for its public TV : one through the basicTV tax each household ispaying (currently €116 per year) which account for 60% of FranceTelevision’s revenue and through its subscriptions to its mobile and internet service. Great idea, indeed. And as far has having a French BBC, it will require a complete reset in the mind of French politician ; they’ll have to give up their compulsive obsession to control public broadcasting. Plus it will cost a bundle : BBC receives each year €6.3bn, versus a total budget of €1.2bn for France Television.
> in the Financial Times a detailed story on the subject, explaining why the figures don’t add-up.
> and another story in the FT on governance issue at the Beeb

The Tectonic of Advertising

Every year we see the same ritual : forecast, charts, predictions about the growth of the advertising market. For those who like charts and figures, go directly to the table below.
For right-sided brains, let’s have a look at the underlying forces in play. They are quite interesting to watch, and they will have a direct impact on the bottom line…

The possibility of a recession in the United States.
They are not through with the repercussions of the subprime crisis yet. It will still reverberate in many components of the credit system : adjustable mortgages securities which will, well, adjust, obviously upward, putting another squeeze on the consumers ; the looming crisis of the revolving credit card that outstanding is growing an a panicking rate ; the auto loans inventory that might see its default rates going up sharply. Each of theses pieces pilling up on the other. This will create an immense evaporation of wealth, cascading to consumption, trust in the economy… and could affect all media — worldwide.
Not surprisingly, newspaper industry will take the first hit. For two reasons :
1. display ad carried by papers, are always the first to be cut when budget restrictions occur. Always. For a brand, it’s easy to do, without immediate effect on the sales ;
2. papers will suffer not only from the competition with others media, but from the antique way they sell ads : a kind of “mano-a-la-mano” negotiation, at the era of the yield management and pay-per-performance that has emerged with the internet. But for most of the publishing companies, this is the worst time to invest in the massive modernization of their advertising practices.Don’t worry folks, Google will take care of that by foraging right into to your business. Serious. Look at the news, there is not a month without the announcement of a deal between Google and a publishing outlet.
Data will be key. In a era of parsimonious spending, being able to target consumers will prove essential. Data acquisition capabilities and treatment to a grand scale will be in the hand of few. And in this business, size matters. Once again, search engines and related businesses are well positioned. They have the cash, the technology, and the corporate drive. In that respect, the European Union’s position about the acquisition of Double-Click by Google will be a landmark case.
Google might drop it if it doesn’t get EU clearance – and Microsoft could pick up the pieces, decisively reorienting its guns toward advertising. Otherwise, Google will fly further away from the pack.
One of the unintended consequences of this is the upcoming squeeze of the media buying agencies – the kind of middle-man the advertising food-chain has produced with little reason (the value-added of taking a cut for buying TV spots or ad space in papers for a food or car brand is highly questionable). They, of course, will keep their chunk of the big media spending (display ad, mostly), but a growing share of investment will be captured by the search-ads industry able to target precisely the user for medium-size brands and products.
New territories will emerge, like the social networks. Soon enough, they will hold most of the news absorbed by the young generation. Then, ad will flow in. Once again the usual intermediaries who have ruled the market for decades will suffer.
WPP’s tears.
In a conversation with the New Yorker media editor Ken Auletta, Mark Read, WPP’s director of strategy is complaining about the aggressiveness of Google : “[It] makes our people nervous. They tend to talk to our clients directly. Traditional media has been much more respectful of the client-agency relationship”, read : respectful of the regularity of our income. Such a naïveté is really touching.

Global Ad Spending Growth in %, by Region

                         2006   2007f      2008f
World                     6.5     6.0      6.8
USA                       4.9     2.8      3.7
Lat America              18.8    15.3     16.3
Western Europe            4.8     4.8      4.3
Emerging Europe          22.5    20.2     17.8
Asia Pac (all)            6.0     7.0     10.0
North Asia               12.3    13.0     18.7
ASEAN                     7.9     9.0      9.4
MidEast/Africa           14.8    14.0     13.1

Source : GroupM “This year, next year” report, 2007

> see the story in The New Yorker
on how Google might eat the lunch of the advertising industry, with unconvincing denials by Larry and Sergey (G founders).
> in the Financial Times, on how the subprime is impacting newspapers ; figures shows a complete crash on classified for companies like Tribune Co, Gannett, McClatchy.
> and at McGraw-Hill, the big US magazine publisher, a massive 600 jobs cut (10% of the staff) is linked directly to the effects of the subprime crisis.
Story in Folio Magazine