By Mike Walter, VP Strategic ServicesMonday, Oct 01, 2012 4:00 PM EST

In Case You Missed It September

Pandora Reports 2Q13 Financial Results

Yahoo! Finance, 8-29-12

•    2Q13 total revenue of $101.3 million grew 51% year-over-year
•    2Q13 total mobile revenue of $59.2 million grew 86% year-over-year
•    2Q13 total listener hours of 3.30 billion grew 80% year-over-year
•    Active users reach 54.9 million growing 48% year-over-year

Total Revenue: For the second quarter of fiscal 2013, total revenue was $101.3 million, a 51% year-over-year increase.  Advertising revenue was $89.4 million, a 53% year-over-year increase.  Subscription and other revenue was $11.9 million, a 36% year-over-year increase.


Google TV Ads Shuttered

MediaPost by David Goetzl, 8-31-12

After five years, Google is shuttering its auction-based TV ad sales system and “doubling down” on the growing online video space. The decision comes after the company earlier this year said Google TV Ads had expanded such that it could sell inventory reaching 42 million homes.

Throughout its tenure, Google pitched TV Ads as an easy-to-use platform for advertisers that had never used TV before and touted multiple success stories. The company plugged the opportunity to pay only for delivery, based on Google’s AdWords system and the chance to receive granular performance metrics, used in part for set-top-box data.

US Newspaper Ad Revenues Fall 6.4% Y-O-Y in Q2

Marketing Charts, 9-7-12

US newspaper advertising expenditures continue to decline, according to the latest figures from the Newspaper Association of America (NAA). In Q2, total expenditures stood at $5.61 billion, down 6.4% from roughly $6 billion a year earlier. Online revenues grew by 2.9%, to $826.7 million, representing 15% share of overall revenues. Print revenues dropped by 7.85% year-over-year to $4.8 billion. The overall 6.4% drop year-over-year in Q2 follows a 6.9% drop in Q1, but this year’s Q2 drop is the smallest year-over-year fall for any quarter since Q2 2010 (-5.55%).

Print ad expenditure decline was most pronounced in national ad sales, which dropped 9.73% year-over-year to $889 million. Classifieds revenue fell 8.39% year-over-year to $1.14 billion, though that was a smaller drop than the 9.85% year-over-year decline from Q1. Retail spending, which represents the majority of expenditures, saw a comparatively smaller decline of 7%, down to $2.75 billion.

Within the retail category, the apparel and accessories and computers/electronics verticals, which represent 6.9% and 11.6% share of retail spending, respectively, were the only to buck the downward trend, with ad dollars rising in each. Coupon marketing organizations increased their national ad spend from $208.9 million in Q2 2011 to $228.2 million in Q2 2012, accounting for 25.7% share of national ad sales in Q2 2012.

Apple Plans Digital Radio Service

MediaPost by Erik Sass, 9-7-12

Apple is planning to launch a digital radio service to compete with Pandora, including customized listening and on-demand options, according to The Wall Street Journal, citing three unnamed sources familiar with the project.

The tech giant, which has formed relationships with most major music publishers in support of its iTunes business, is still negotiating terms for digital music rights for its planned radio service, the same sources tell the WSJ.

As with other digital music services, the central issue will probably be royalties, which have been a point of contention between Pandora and publishers. It still constitutes a major drain on its profitability, as royalty costs more than outweigh advertising revenues.

While Pandora eventually broke off negotiations with publishers, opting to pay royalties on a default basis determined by Federal statute, Apple is negotiating directly with publishers, according to the WSJ. The move could make royalties more expensive, but would also give Apple more options in terms of how listeners can interact with music.

Apple would probably seek to offset costs with digital (and possibly display) advertising, and could also offer a subscription model.

Even if the business model remains unclear, Apple may feel compelled to establish a presence simply to round out the Apple-branded app offerings for devices, including the iPhone, iPad and iPod. Among other things, a digital radio service could serve as a discovery mechanism that helps drive consumers to purchase songs outright via iTunes. 
One thing is clear: The marketplace for digital audio is growing fast. Pandora has signed up about 150 million registered users, at least 33 million people have used Spotify, and Clear Channel’s iHeartRadio has about 45 million listeners per month. Considering that much of this listening happens via Apple devices, a pre-installed radio app that offers a wider range of listening options might make headway against these established players.


US Ad Spend Inches Up 0.9% Y-O-Y in Q2

Marketing Charts, 9-11-12

US advertising spending increased 0.9% year-over-year in Q2 to reach $34.4 billion, slowing from Q1’s 2.9% year-over-year increase, according to September 2012 figures from Kantar Media. For the first half of the year, expenditures increased by 1.9% to $67.1 billion. (Online spending estimates only include display advertising). Spending among the 10 largest advertisers in Q2 stood at $3.58 billion, representing a 5.5% decrease compared to the previous year. Procter & Gamble maintained its top-ranked position, though its spending dropped by 13.2%. Among other top 10 advertisers, General Motor’s expenditures fell by 30.1% year-over-year, while Unilever and Toyota Motor Corp both increased spending significantly, by 48.6% and 22.7%, respectively.

Expenditures for the 10 largest categories grew by a modest 1.3% in Q1, to $21.5 billion. Retail was the top spending category with $3.84 billion in expenditures, up 0.9% from Q2 2011. Automotive was the next-largest, with expenditures of $3.37 billion, up 7.7% from a year earlier. Direct response registered the largest increase among the top 10 categories, of 6.5%.

Further data from the Kantar Media report indicates that print media spending continues to fall, with newspapers and magazines experiencing year-over-year declines of 3.1% and 2.7% in Q2, respectively. (September figures from the Newspaper Association of America pegged US newspaper ad spending’s drop in Q2 at a more precipitous 6.4%.)

Contrary to print media’s overall spending drop in Q2, radio ad revenues grew by 1.9% year-over-year, led by a 20% rise in network radio investments. This growth offset a 3% decline in national spot radio spending. Local radio expenditures were relatively flat (0.6%).

For H1, radio ad revenues increased 1.4%, with network radio spend growing 21.4%, national spot radio expenditures dropping 3.2%, and local radio spend marginally down, by 0.5%.


Nielsen shows how people use TV differently

Yahoo! News by David Bauder, 9-11-12

The number of U.S. homes that don't get traditional television service continues to increase, but that doesn't mean they don't have TVs. The Nielsen company said in a report issued on Tuesday that three-quarters of the estimated 5 million homes that don't get TV signals over the airways or through cable, satellite or telecommunications companies have televisions anyway.

Many of these homes are satisfied to use their TVs for games or get programming through DVDs or services like Netflix or Apple TV, said Dounia Turrill, senior vice president for client insights at Nielsen.

Because of the changes, Nielsen is considering redefining what it considers a television household to include people who get service through Netflix or similar services instead of the traditional TV signals, Turrill said.

During the first three months of 2012, the average consumer spent about 2 percent less time watching traditional TV than the previous year, Nielsen said. They more than made up for that by spending more time watching material recorded on DVRs or on the Internet through TVs, computers and mobile devices.

The typical consumer spends 14 minutes a day using gaming consoles, although it's more for owners of Wii, XBox and PlayStation 3, Nielsen said. Many of these devices are also popular sites for accessing video, Turrill said.


US Digital Ad Spending to Top $37 Billion in 2012 as Market Consolidates

eMarketer, 9-20-12

eMarketer estimates that marketers will spend $37.31 billion on digital advertising in 2012. Digital ad spending will rise 16.6% this year, and will experience double-digit growth through 2014.

Based on the Interactive Advertising Bureau/PricewaterhouseCoopers data for the first two quarters of 2012, and because the digital ad spending market is approaching maturity faster than expected, eMarketer has lowered the projected rate of increase for US digital ad spending slightly from its earlier forecast of 17.7% in 2012. However, eMarketer’s outlook remains optimistic—despite slower percentage gains, big dollar growth will continue.

Search continues to be the leading digital ad spending format, although its share will begin to drop this year as the shares of rich media, sponsorships and video increase.

Display ad spending, which includes banner ads, video, rich media and sponsorships, will rise from 40.2% of total digital ad spending in 2012 to 45.6% of the total in 2016. Search’s share of total digital ad spending will decrease from 47.1% in 2012 to 44.2% in 2016. Combined, spending on paid search and display advertising will account for more than 87% of all US digital ad spending this year

This year, display ad spending growth will outpace that of paid search ad spending, driven by digital video advertising and sponsorships. At a 46.5% growth rate, digital video ad spending will continue to post the strongest gains—though it is starting from a much smaller base. Online and mobile video viewing is becoming increasingly popular. According to eMarketer forecasts, more than half of the US population will view video content through desktop or mobile devices in 2012.


Ongoing migration to digital radio platforms documented in new study

Inside Radio, 9-25-12

Offering the most dramatic snapshot yet of how quickly radio consumption is moving to internet-delivered platforms, nearly half of respondents (46%) to a new Alan Burns/Triton Digital poll say they listen daily to AM/FM radio on a computer. That’s significantly higher than the 29% of Americans who said they listened to online radio in the last week in Arbitron & Edison’s survey conducted in January and February of this year. The difference in methodologies — Burns/Triton used an online opt-in survey, Arbitron/Edson conducted a national telephone survey — may be as much of a factor as the ongoing shift to online listening. Burns/Triton also report nearly one in four smartphone owners (23%) say they listen to broadcast radio daily on their smartphone. The poll finds radio’s smartphone audience is using both station-specific apps and ones offered by aggregators. The percentage of smartphone owners that have downloaded a specific radio station app (22%) is about the same as those who have downloaded the iHeartRadio app (21%). Aggregator TuneIn’s app is further down the list, downloaded by 8% of the sample. The study finds nearly one in four (39%) listen weekly to music on their smartphones while one in four do so daily with 17% listening for an hour or more daily. Meanwhile, consumers with in-car internet access are not using radio significantly less — perhaps 7% less, the study suggests. Among the two in ten (19%) that report having internet access in the car, the vast majority (70%) say they listen most to AM/FM radio in the car. The study also calls into question industry theories that Pandora listening takes more time away from recorded music collections than radio. Of those who listen weekly to the pureplay, 28% say they are listening less to CDs, MP3s and records — the same percentage that say they’re listening to less radio. But the majority (52%) says they aren’t listening less to other music sources or they just don’t know. “Radio AQH may be nibbled at by other media but consumers don’t sense themselves using it less.