mccormack media newsletter 10.5.15 edition

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!!A D V E R T I S I N G !Michael"Farmer" Some" arcane" facts" from" Michael" Farmer’s" advertising" missive," Madison( Avenue(

Manslaughter:( An( Inside( View( of( Fee8Cutting( Clients,( Profit8Owners( and( Declining(Agencies,"selected"by"BIA/Kelsey’s"Rick"Ducey:"

Where"did"the"15%"media"commission"rate"come"from?"

Most" historians" attribute" the" commission" system" to" N.W." Ayer" when" in" 1874" it"implemented"its"standard"commission"rate"of"15%."Page"31."

What"does"“WPP”"stand"for?"

WPP" was" a" startSup" back" in" 1985" when" Sir" Martin" Sorrell" (as" of" 2000)" and"stockbroker" Preston" Rabl" got" together" to" acquire" Wire" &" Plastic" Products," a"manufacturer" of" shopping" baskets" to" serve" as" a" shell" company" to" acquire" ad"agencies."Page"48."

What"is"a"“SMU”?"

Farmer,"a"former"Boston"Consulting"Group"and"Bain"strategy"consultant,"was"called"in"to"figure"out"why"a"major"agency"had"gone"from"highly"profitable"to"unprofitable"by" 1992." Without" statements" of" work" (SOW)," project" management" or" cost"accounting"as"standard"practices"at"the"time,"it"was"very"difficult"to"understand"the"cost"basis"and"therefore,"profit"margins"of"various"briefs"or"projects"the"agency"took"on." So" Farmer" invented" a" methodology" and" measurement" unit" called" the"ScopeMetric" Unit" or" SMU" to" create" a" standardized" and" comparable" measure" of"units"or"work"to"figure"out"where"the"costs"and"profits"are"(or"are"not)."Page"150."

A U T O M O T I V E !Sales/September" MotorIntelligence.com"reported"that"overall"automotive"sales"this"September"2015"

are"15.8%"ahead"of"September"2014"sales:"" Year" Cars" Lt."Trucks" Total" "" 9/14" 580,260" 665,745" 1,246,006" "" 9/15" 619,080" 823,351" 1,442,431" "" S" +6.7%" +23.7%" +15.8%" "

B R O A D C A S T !CBS/SVOD" CBS"announced"it"would"factor"in"subscription"video"on"demand"from"CBS"All"Access"

data" in" its" program" Nielsen" TV" ratings" (C3/C7)." The" service" is" available" in" 95+"markets" across" the" U.S.," via" Android" and" iOS" systems" as" well" as" desktops" and"laptops.""

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!!Week"of"October"5,"2015"

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B R O A D C A S T (cont’d)!Nexstar/Media"General"

TV"station"group"Nexstar"(100+"TV"stations"in"58"markets"covering"18%"of"U.S."TV"households)" is" attempting" to" purchase" Media" General" (71" stations)" in" a" $4.1"billion" deal." If" the" deal" is" consummated" then" it" could" derail" Media" General’s"planned"acquisition"of"Meredith"Corp."The"combination"would"give"the"new"entity"162"stations"in"99"markets,"reaching"39%"of"the"U.S."

D A T A !Rentrak/comScore" Media" data" entities" Rentrak" and" comScore" have" agreed" to" merge." The" deal" is"

projected"to"be"valued"at"threeSquarters"of"$1"billion."Rentrak,"a"leading"provider"of" viewing" data" from" 16+" million" set" top" box" houses" and" on" demand"programming,"and"comScore,"known"for"its"digital"acumen,"will"potentially"deliver"the" cross" platform" measurement" system" of" the" future" –" challenging" Nielsen"Media"Research’s"‘currency’"status"in"the"media"community."

D B S !Dish/Airwaves" Satcaster" Dish" agreed" to" have" its" two" affiliates" (Northstar" Wireless" and" SNR"

Wireless)" surrender" claims" to" $3.5" billion"worth" of" spectrum" licenses" after" they"failed" to" secure" small" business" discounts." However," the" companies" will" retain"about"$9.8"billion"of"the"licenses"they"won"in"an"auction"by"the"FCC."

D I G I T A L !Facebook/Target"Rating"Points"

Facebook" unveiled" a" new" way" to" purchase" and" plan" campaigns" for" advertisers"that"employs"both"video"on"the"social"network"and"TV"through"its"TRP,"the"target"rating"point"–"a"version"of"GRPs"for"video"ads"on"its"platform."Nielsen’s"Digital"Ad"Ratings" measurement" system" will" verify" Facebook’s" in" target" TRP" delivery" and"Nielsen’s" Total" Ad" Ratings" system"will" verify" the" TRP" delivery" for" Facebook" and"television"combined."

" "Snapchat/Selfie"Advertising"

Ephemeral"messaging"app"Snapchat"unveiled"a"new"advertising"unit" that"will" let"brands" insert"marketing"messages" into"users’"selfies"–"referred"to"as"“sponsored"lenses.”"

" "Twitter/Characters" Rumors" are" circulating" that" microblogging" service" Twitter" will" introduce" a" new"

product" that" enables" users" who" share" tweets" to" wax" poetically" beyond" the"current"140Scharacter"maximum."

" "Twitter/Buy"Button" Twitter"announced" that" its" “Buy”"button"would"be"available" to"any"merchant" in"

the" U.S." that" uses" one" of" three" major" eScommerce" platforms" –" Demandware,"Bigcommerce," and" Shopify" –" to" run" its" online" shopping" operations." Clients" of"those"platforms"can"use"the"software"to"post"a" link"on"Twitter" to"a"product"and"the"link"will"show"up"with"a"buy"button."

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G O V E R N M E N T !Religion" The" following" chart" delineates" the" religions" of" U.S." legislators," according" to" the"

Congressional"Quarterly,"as"reported"by"USA(Today:""" Religion" Senate" House"of"Representatives" "" Members" 100" 435" "" Roman"Catholic" 26" 140" "" Presbyterian" 14" 22" "" Jewish" 9" S" "" Methodist" 8" 24" "" Baptist" 8" 55" "" Mormon" 7" S" "" Christian"1" 6" 32" "" Lutheran" S" 20" "" Episcopalian" S" 34" "" Other" 22" 108" "

G L O B A L !Total"Media"Spend" eMarketer’s"projected"media"ad"spend"worldwide"(2014S2016):""

Year" Ad"Spend"(Billions)" "" 2014" $538.83" "" 2015"(est.)" $569.65" "" 2016"(est.)" $606.90" "

M O B I L E !Apple/iPhones" Apple"sold"13"million"iPhone"6s"and"6s"Plus"smartphones"over"the"first"weekend,"

setting"records"and"beating"expectations"by"about"a"million"units."According"to"a"teardown"analysis"by" IHS"Technology," it" costs"Apple"an"estimated"$236" to"make"and"assemble"its"new"iPhone"6s"Plus,"roughly"one"third"the"$749"retail"price"of"the"smartphone."

P E R S O N A L I T I E S !German"Unification" October" 3," 2015" commemorates" the"Day"of"Unity" for" the"German"people" –" the"

25th"anniversary"of"the"unification"of"East"and"West"Germany."" "Ralph"Lauren" American"fashion"designer"Ralph"Lauren"announced"that"he" is"giving"up"the"title"

of" CEO" of" his" upscale" fashion" company" bearing" his" name" but" will" stay" on" to"support"the"company’s"creative"team."

" "Trees" Yale" University" Research" published" a" study" reporting" that" the" total" number" of"

trees"on"Earth" is"3.04" trillion,"bringing" the"ratio"of" trees"per"person"to"422"to"1."According" to" the" report," the" number" of" trees" has" fallen" by" 46%" since" the"beginning"of"human"civilization."

" "Phil"Woods" Alto"saxophonist"Phil"Woods"has"passed"away."He"was"83"years"old."

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P U B L I S H I N G !eSBooks" According" to" the" Association" of" American" Publishers," which" collects" data" from"

1,200"publishers,"eSbook"sales"fell"10%"in"the"first"5"months"of"the"year."Last"year,"digital"books"accounted"for"around"20%"of"the"market,"roughly"the"same"as"a"few"years"ago."The"portion"of"people"who"read"books"primarily"on"eSreaders"fell"32%"in"the"First"Quarter"2015"from"50%"in"2012,"a"Nielsen"survey"shows."

" "Google/First"Click"Free"

Google" announced" it" will" change" the" policy" on" its" First" Click" Free" program" by"reducing"the"number"of"freebie"articles"serving"on"publisher"sites"from"5"to"3"per"day"based"on" their" feedback."The"program"enables"publishers" to"provide"content"behind"a"paywall" to"web"site"visitors"who"see" that"content" for" free"based"on"the"number"of"times"a"user"clicks"from"Google"to"the"publisher’s"site."Google"worked"with"subscription"based"news"services"to"create"a"lead"generation"tool"to"the"first"article"on"Google"News,"but"subsequent"clicks"from"Google"News"to"the"publisher’s"site" prompts" the" users" to" logSin" or" subscribe." The" compromise" allows" Google" to"index," aggregate," and" publish" a" link" to" the" publisher’s" content" while" prompting"users"to"view"articles"and"encouraging"them"to"subscribe."

" "Next"Issue"Media/"Next"Issue"

Next" Issue" Media" –" which" launched" in" 2012," is" jointly" owned" by" some" of" the"world’s"biggest"publishers,"and"has"an"all"you"can"eat"magazine"subscriptions"–" is"deSemphasizing" the" concept" of" magazines" and" pushing" the" idea" that" your"subscription"gets"you"access"to"the"world’s"best"articles,"personally"curated"for"you"based"on"your"interests."The"company"has"changed"its"name"to"Next"Issue."

R E T A I L !Amazon/Apple"TV/Chromecast"

Amazon" informed" its" marketplace" sellers" that" it" will" stop" selling" Apple" TV" and"Google"Chromecast."No"new"listings"for"the"products"will"be"allowed"and"posting"of"existing"inventory"will"be"removed"October"29."

" "Amazon/Flex" Amazon"launched"a"new"gig"economy"service"called"Flex," in"which"people"sign"up"

for" shifts" through" an" app" that" prompts" them" to" fetch" packages" from" mini"warehouses" and" take" them" to" customers’" homes" in" as" little" as" an" hour." Amazon"pays"the"drivers"$20"per"hour."

" "Target/Price"Matching"

Retailer" Target" announced" that" its" website" will" start" matching" prices" from" 29"websites" of" rivals" like" Amazon" and"WalSMart" as" well" as" some" brick" and" mortar"rivals"such"as"CVS"Health"and"Costco"Wholesale.""

S P O R T S !Olympics/Japan" The(New(York(Times"reported"that"baseball,"softball"surfing,"karate,"sports"climbing,"

and" skateboarding" are" under" consideration" for" inclusion" in" the" 2020" Tokyo"Olympics.""

Note:"Under"the"Olympic"Agenda"2020"program"adopted"by"the"I.O.C."in"December,"host" cities" are" now" allowed" to" propose" one" or" more" additional" sports" for" their"Games"to"be"added"to"the"28"sports"already"on"the"program."

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T R A V E L !Amtrak/Baggage"Fees"

Amtrak"announced"that"passengers"who"exceed"the" limit"of" two"carry"on"bags"and"two"personal"items"will"have"to"pay"$20"for"each"extra"bag."Travelers"will"also"have"to"pay"the"fee"if"a"bag"is"overweight."

V I D E O !CBS/Amazon" CBS"and"Amazon"expanded" their" licensing"deal" to"make"Amazon’s"Prime"Video" the"

exclusive"subscription"streaming"home"for"3"new"CBS"summer"series"through"2018."These" series"will" be" available" to" Amazon" Primers" just" 4" days" after" they" air" on" the"broadcast"network."

" "Clippit" The"Clippit"mobile"app"allows"fans"of"TV"programming"to"clip"and"share"content"from"

their"favorite"shows."TV"networks"on"board"include"The"CW,"Disney,"Telemundo,"and"Syfy."

" "Facebook/NBA" NBA"Digital"plans"to"be"the"first"of"the"major"leagues"to"simulcast"a"TV"show"on"cable"

and"on"Facebook."The"show"is"NBA(Real(Training(Camp,"featuring"LeBron"James"and"the"Cleveland"Cavaliers,"which"will"appear"Thursday"at"11am."

" "Google/"Chromecast"

Google"introduced"two"new"Chromecasts:"one"is"an"over"the"top"device"for"viewing"streaming"video"programming"on"a"traditional"TV"set,"and"the"other"is"for"speakers."Both"cost"$35."

" "NBCUniversal/"YouTube""

NBCUniversal"reached"a"deal"with"Google"to"sell"ads"for"the"first"time"alongside"the"media" company’s" video" on" YouTube." NBCUniversal" will" handle" the" sale" of" the"inventory"itself."

" "Taylor"Swift/"Periscope"

Musician" Taylor" Swift" has" written" to" Twitter" asking" the" entity" to" take" down" live"streams" of" her" concerts." Most" of" the" streams" are" posted" by" Twitter" owned"Periscope."

" "TiVo/Bolt" TiVo’s" new" digital" video" recorder," Bolt," offers" users" the" ability" to" skip" an" entire"

commercial"break"with"one"press"of"the"button"called"SkipMode."The"device"starts"at"$300"and" includes"one"year"of" free" service." The" skipping" feature"will"work"with"20"over"the"air"broadcasters"and"cablers"during"primetime"hours."

" "YouTube/"Shopping"Ads"

YouTube" is"promoting" its"new"eScommerce" feature"called"Shopping"Ads,"which"will"allow" consumers" to" shop" products" referenced" in" a" video." Similarly" to" its" TrueView"shopping" experience," in" which" product" cards" along" the" side" of" the" screen" could"appear" as" the" video" ad" plays," the" new" feature" will" make" the" videos" themselves"shoppable.""

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COMSCORE’S!TOP!25!U.S.!DIGITAL!MEDIA!PROPERTIES!(AUGUST!2015)!""

RANK" PROPERTY" UNIQUE"VISITORS"

1" Google"sites" 245,397,000"

2" Facebook" 217,806,000"

3" Yahoo"sites" 208,032,000"

4" Amazon"sites" 188,297,000"

5" Microsoft"sites" 181,229,000"

6" AOL" 170,736,000"

7" Apple" 140,078,000"

8" Mode"Media" 139,504,000"

9" Comcast"NBCUniversal" 138,793,000"

10" CBS"Interactive" 137,110,000"

11" Twitter" 124,088,000"

12" Wikimedia" 122,300,000"

13" Turner"Digital" 115,049,000"

14" LinkedIn" 114,096,000"

15" Time"Inc."Network" 106,971,000"

16" Weather" 101,912,000"

17" eBay" 98,201,000"

18" Gannett"sites" 97,561,000"

19" Hearst" 92,435,000"

20" Yelp" 89,150,000"

21" WalSMart" 88,674,000"

22" PayPal" 86,291,000"

23" BuzzFeed.com" 85,021,000"

24" Condé"Nast" 84,239,000"

25" SheKnows" 83,127,000""

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THE$WALL$STREET$JOURNAL’S!MAJOR!LEAGUE!BASEBALL’S!BEST!"The"only"players"in"baseball"history"with"at"least"three"MVP"awards:""

PLAYER" MVP"AWARDS" SEASONS" TEAMS"

Barry"Bonds" 7" 1990,"1992,"1993,"2001,"2002,"2003,"2004" Pirates,"Giants"Yogi"Berra" 3" 1951,"1954,"1955" Yankees"Joe"DiMaggio" 3" 1939,1941,"1947" Yankees"Mickey"Mantle" 3" 1956,"1957,"1962" Yankees"Roy"Campanella" 3" 1951,"1953,"1955" Dodgers"Albert"Pujols" 3" 2005,"2008,"2009" Cardinals"Alex"Rodriguez" 3" 2003,"2005,"2007" Rangers,"Yankees"Jimmie"Foxx" 3" 1932,1933,1938" Athletics"Mike"Schmidt" 3" 1980,"1981,"1986" Phillies"Stan"Musial" 3" 1943,"1946,"1948" Cardinals"

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RENTRAK’S!ONDEMAND!ESSENTIALS!NETWORK!RANKING!REPORT!(AUGUST!2015)!"

RANK" NETWORK" UNIQUE"VIEWS" GROSS"VIEWS" TIME"SPENT"1" Music"Choice" 2,802,551" 50,125,716" 4:16"2" Cartoon"" 3,429,340" 48,257,123" 14:01"3" Disney" 3,206,029" 28,113,592" 27:26"4" ABC" 5,204,171" 24,903,032" 37:45"5" CBS" 4,243,327" 17,983,347" 39:38"6" USA" 3,109,989" 17,024,329" 35:37"7" Disney"Junior" 2,001,839" 16,964,390" 26:07"8" Nickelodeon" 2,657,603" 16,095,420" 22:39"9" Disney"XD" 1,953,563" 15,892,440" 19:21"

10" Nick"Jr." 1,845,331" 14,279,089" 23:53"11" TNT" 3,223,236" 14,243,955" 44:58"12" MTV" 2,797,449" 14,243,198" 36:02"13" Lifetime" 3,169,679" 13,294,683" 41:56"14" NBC" 3,083,968" 11,309,095" 40:21"15" Sprout" 1,326,071" 11,149,224" 20:06"16" Fox" 2,978,585" 11,056,460" 34:54"17" FX"Movies" 2,793,193" 10,287,247" 65:30"18" VH1" 2,006,675" 9,419,218" 35:57"19" Adult"Swim" 1,471,293" 9,152,006" 19:56"20" ABC"Family" 2,619,960" 8,886,772" 43:32"21" AMC" 2,692,223" 8,729,872" 40:51"22" FX" 3,062,260" 8,676,013" 48:16"23" Bravo" 1,835,858" 7,713,042" 38:14"24" Comedy"Central" 1,772,939" 7,369,967" 22:45"25" TruTV" 986,488" 6,906,704" 19:13"

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