An intrepid reporter from Variety has an important story today on how equity firms–such as Michael Powell’s Providence Equity Partners–are buying up TV stations as if they were mere hog belly futures. One focus of such investment, notes Variety, are broadcast television stations in rural markets. It seems that these communities are not totally yet part of the rapidly emerging broadband new media economy. Broadcast special interest lobbying has given these stations lucrative placement on cable system. Hence, these local TV stations still reap decent ad dollars. Here’s a key excerpt from Cynthia Littletonâ€™s article:
“Small-market stations are one of the best-kept secrets in TV,” Yager says [Yager is CEO and pres. of Barrington Broadcasting].
Madison Avenue is abuzz with talk of how newspapers and phone books are bleeding classified advertising dollars to Web and digital platforms. But in small town U.S.A., the migration of classified dollars is from print to local TV, Yager says. As over-the-air network entities, broadcast TV stations are guaranteed a channel position on the local cable operator’s channel lineup — at a price that is rising as broadcasters become more militant about demanding high retransmission consent fees than in the past.
Some in the industry are skeptical that the newly minted broadcast station owners will do much if any investing from afar in their stations, or have the secret sauce to boost the margins of what is already a 15%-20% margin business.”
Variety explains that Cerberus Capital Management, which also owns Mervyn’s department stores and the Alamo and National rental car firms, just acquired seven small market stations from CBS. Congress, the FCC, the mainstream press and media reform advocates should investigate these private equity investment sales. Stations should not be owned by companies principally concerned with profit maximization. Congress should require major investment in news, local programming and community affairs as television stations get sold. New buyers should be required to pay-out for community service or be ineligible for acquiring licenses.
source: “Private Investors go Rural: Equity Investors Reel in Big Fish in Small Ponds.” Cynthia Littleton. Variety. April 27, 2007 [sub required].
Is it ironic, tragic, or absurd that Mr. “Deregulator” (meaning end all rules because the market knows best) Michael K. Powell is working for the firm which just scooped up 56 Clear Channel TV stations for $1.2 billion? The former FCC chairman aggressively pushed to end rules that placed limits on the ownership of multiple broadcast television outlets by a single company. Guess what Powell’s Providence Equity Partners got in the Clear Channel deal, according to Media Daily News: “The portfolio houses a series of duopolies and triopolies, including two stations in top-50 markets, such as Cincinnati, Salt Lake City and Jacksonville. Twenty-seven stations are affiliated with the Big 4 networks.”
No FCC official should be permitted to work in any media industry related commercial venture for at least ten years after their term. That air blown-in by the FCC’s golden revolving door stinks.
PS: We should have acknowledged that Mr. Powell—who eliminated broadband network neutrality rules while at the FCC—has also just joined the board of directors for Cisco. Cisco has also been opposed to network neutrality, since it makes the equipment designed to give phone and cable companies control over broadband content flow.
Omnicom Group is a global advertising/marketing powerhouse, controlling such well known “brands” as BBDO, DDB and TBWA. They represent PepsiCo, P&G, Apple, Fedex, McDonald’s, etc. etc. They know the business. Here’s what Omnicom’s president John D. Wren said yesterday about Google’s Doubleclick deal, in a story written by Reuters (my bold and italics):
“What it’s going to raise – and this will be a very good conversation in the marketplace – are privacy concerns. The technology that exists far exceeds the laws and thinking of the people that are going to be impacted by it,” he told investors on a conference call. Wren welcomed what he said would be a healthy debate that will ultimately clarify privacy laws when it comes to consumer information on the Internet.
“I’m encouraged by the deal, because I’m most encouraged by the discussion that the deal is going to cause the marketplace to have. Any definition will be positive for us.”
In other words, even the ad industry recognizes that the powerful and intrusive tools they have developed require safeguards, rules, policies, limits. For both privacy and the interactive ad market.
We think Google’s name for its Doubleclick take-over is revealing. They called it the “Whopper Acquisition Corp.” This deal is about empowering the most powerful advertisers to target us via Google’s ever-expanding precision and personal data-infused technologies. But our data—and civil society—isn’t a fast-food marketplace. Google’s glib approach may be cute by Silicon Valley standards. But much more here is at stake. Google needs to acknowledge this, and be forthcoming about the need for privacy protections and marketplace safeguards.
From merger agreement: “THIS AGREEMENT AND PLAN OF MERGER (this â€œAgreementâ€) is entered into as of April 13, 2007, by and among Google Inc., a Delaware corporation (the â€œBuyerâ€), Whopper Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Buyer (the â€œTransitory Subsidiaryâ€), and Click Holding Corp., a Delaware corporation (the â€œCompanyâ€).”
[source for Whopper lead is John Battelle’s weblog]
excerpt: “Without a doubt, DoubleClickâ€™s historical data is very valuable,â€ says Jupiter Research analyst Emily Riley. â€œEvery time youâ€™re online, every page visit, and every ad you see comes with the possibility that a cookie is placed on your machine. DoubleClick has all the data.â€
How much data? Ms. Rileyâ€™s back-of-the-envelope calculation puts it into the fifteen figures: with more than 100 million web users viewing a quarter million pages a year, it hits the 2.6 quadrillion markâ€”and thatâ€™s just U.S. users. If DoubleClickâ€™s ad network touched even half of those interactions, it amounts to the kind of database advertisers would drool over. â€œWhat it does is complete the picture for Google about whatâ€™s happening on publishersâ€™ web sites,â€ Ms. Riley says.
From: “Crunching the Cookie.” Sean Wolfe. Red Herring. April 19, 2007
From Google’s FAQ on the deal (excerpt):
“Q. How will this acquisition benefit DoubleClick advertisers?
A. The acquisition will give advertisers more targeting and buying options and will provide maximum reach for their target audience, helping them achieve the best returns for their campaigns. Online advertising gives advertisers the ability to precisely target the right ad to the right user at the right time. Working with DoubleClick, we will make online text and display advertising more targeted and relevant for the user and therefore more valuable to the advertiser.”
[and then the following, my italics]:
Q. Why doesn’t Google accept third party tags?
A. We donâ€™t do anything to compromise the user experience on Google properties or across our AdSense network. In order to ensure the quality of this experience we did not accept third party tags because we could not guarantee the quality of the ad or that it would comply with our format policies. Working with DoubleClick, we will increase the relevance of ads online so that we maintain a positive user experience while provided targeted ad opportunities for advertisers and increased monetization for publishers.”
FAQ available via here (see 4/13/07 post).
Doubleclick is claiming it doesn’t really know anything about us, and that its data is controlled by its clients.
Let’s get to the truth. Doubleclick should immediately make public the entire range of data, including behavioral and profiling information, that it now holds on its own (versus what it claims is owned by clients). This should include what it collects from DART and every other product available in the U.S. and abroad. Doubleclick should also fully disclose its complete data-related plans for its new Media Exchange. Let’s find out what information about all of us is available to Doubleclick from its servers. Doubleclick should turn over this information to the FTC, the European Commission and an independent panel of academic computer experts who have no affiliation with the online ad industry. Ask the panel and the FTC/EC to conduct an intensive review of its data holdings and capabilities from a personal privacy perspective. Arrange for these experts to conduct inspections at the Doubleclick Technology Group’s facilities in “New York, Colorado, Chicago, San Francisco and Europe.” Make all of the findings public as soon as possible.
This is something Google should insist on, as part of its own public interest due diligence.
excerpt from “Boomerang for Advertisers and Agenciesâ€–“You are in a continual search for that desirable, yet elusive audience: the interested consumer. Boomerang, DoubleClickâ€™s one-to-one targeting solution, empowers you to identify and re-target across your media buy customized segments of prospects and customers based on actions theyâ€™ve taken on your site and other marketing messages theyâ€™ve received. The result is a dramatic increase in customer acquisition, conversion, and retention metrics.
“Leverage the Power of Behavioral Targeting
Behavioral targeting is the most effective form of targeting available. It allows you to re-target to the most desirable audience of all: browsers who have already shown an interest in your product or service. With Boomerang, you can now engage that audience in a dialogue, providing timely and relevant messages triggered by their online actions. Boomerang delivers true behavior-driven advertising, so you can reach pre-qualified prospects and customers quickly and easily…
Use Boomerang to Get Better Results
Smart marketers have used Boomerang to:
â€¢ Re-target customers who have already browsed their site to bring them back
â€¢ Re-target site visitors that have â€œdropped offâ€ of the purchase process with a related message to drive them back to the site
â€¢ Upsell and cross-sell customers that have already purchased core products
â€¢ Reach customers who have not visited or purchased recently to reactivate them
â€¢ Show specific advertising messages based on expressed interests, such as delivering an ad for a new car model to a browser that downloaded a brochure on last yearâ€™s model
â€¢ Test different offers and price points to determine the most effective for converting browsers into buyers”
product overview available via here:[pdf to download]
From a Doubleclick job announcement for “senior statistician” (excerpt): “DoubleClick is an application service provider, handling a staggering 12 billion transactions per day, and managing up to 160,000 hits per second on its global network. Our suite of products is driven by the DoubleClick Technology Group (DTG), comprised of over 300 IT professionals, located in New York, Colorado, Chicago, San Francisco and Europe.”
and an excerpt from: “Schmidt Defends DoubleClick Buy, Net Neutrality.” WebProNews
Schmidt said DoubleClick’s ad technology was what made the company attractive. “Advertising is really about relevance,” he [Google’s Eric Schmidt] said. It’s really about efficiency; it’s really about measurability. There’s not been a lot of technology applied to advertising over the past 10 or 20 years except for a few companies, DoubleClick being one of them.”
excerpts from product overview of Doubleclick’s Dart Motif:
“audience interaction metrics: Motif’s exclusive Audience Interaction Metrics Package lets you gather data on more than 100 unique interactions in every creative unit including multiple exit links, counters, timers and video metrics. You’ll automatically get metrics on how long each ad was displayed or how the viewer interacted with the ad. Plus, you can customize additional events to track based on your creative concept….
* Ad Interaction Time: Tracks the average amount of time a user interacts with your ad, so you know what works best.
* Interactive Impressions: Shows how many Motif ad impressions generated user interaction for better understanding of audience response.
* Ad Display Time: Tracks the average amount of time each Motif ad is displayed to help measure brand exposure and optimize site placements.
track more than 100 metrics
* Exit Links: Let you track multiple click-throughs within a single rich media ad. Essential for when you’re promoting more than one offer in an ad. Motif makes tracking multiple exit links easy and eliminates click commands.
* Event Counters: See exactly what your audience is interacting with by tracking customizable events like rollovers, mouse-overs and drags.
* Timer Events: See how much time a user spent viewing or interacting with specific elements in your ad, like an interactive game or video.
* Motif Streaming Video Metrics: Motif provides the same in-depth reports for your video ads as it does for other rich media features. You can track audience video plays, completions, pauses, stops, restarts, mutes, average view time, and custom video interaction metrics.”