Monthly Archives: January 2013

Would you spend $4 million to be “Liked” for 30 seconds?

The big game is set.  Super Bowl XLVI will be on CBS next week featuring the San Francisco 49er’s vs. the Baltimore Ravens.  And Americans are going to love it.  But you already know all that.

The raw dollars spent in the United States for the big game by the public, by teams and by advertisers will be an astronomical sum when you start to add it up.  But is it really worth it for advertisers?

Some factoidsSuperbowl-ads.com indicates that Super Bowl TV ads are selling for up to $3.8 million on average for the 30-second spots, but CBS reportedly has already sold out rumors are any remaining spots can be had more than $4 million, for a single 30-second spot. That average is up by $300,000 from the $3.5 million published rate for the 2012 Super Bowl.  Advertisers that we will hear from are: Anheuser-Busch, AXE, Best Buy, Cars.com, Century 21, Coca-Cola, Doritos, Fiat, Ford/Lincoln, GoDaddy.com, Hyundai, Kia, Kraft’s MiO, Mars, Mercedes-Benz, Milk Processor Education Program, Paramount, PepsiCo, Skechers, SodaStream, Taco Bell, Tide — Proctor & Gamble, Toyota, Volkswagen and Wonderful Pistachios.  If we just take 35 ads, this comes to roughly $133 million spent by advertisers at the $3.8 million average.  Note to readers:  do any of those names spend money in print, online, or mobile Yellow Pages??

The Nielsen Company showed that the broadcast of the prior Super Bowl on NBC had an average audience of 111.3 million viewers and was said to be the most-watched television program of all time. The game was viewed in roughly 53.3 million households, with a 47.8 U.S. household rating.

It will probably not surprise you to know that American adults like watching Super Bowl commercials just as much as game itself.  According to a survey released by Chicago-based market research company Lab42, some 39% percent said the commercials were their favorite part of the game while only 28% said watching the football game was their primary interest. Stuffing ourselves with food, and the halftime show were No. 3 and No. 4, respectively.

“The commercials are great for all kinds of consumers to engage with the Super Bowl regardless of whether their team is playing or not,” said Lab42 CEO Gauri Sharma. “It’s very interesting that 64 percent of the respondents said half or more of their conversations with respect to the Super Bowl were about the commercials.” (Source)

So shouldn’t that be good news for those advertisers shelling out the average of $3.8 million for a 30-second spot?  You will see that there will be lots of talk about “engagement metrics”, re-tweets on Twitter, “Likes” on Facebook and clicks on everything else, but I have rarely seen any of that correlated to sales. While measuring digital audiences is easier because there’s a ton of data attached to it, the question rarely asked is, what is it that’s being measured, and why? The keyword missing is “ROI”. I even found this little gem from an Ad Age article five years ago:

“Ten years ago you looked at Nielsen numbers and then day-after recall,” said Kate Sirkin, exec VP-global research director, Starcom Mediavest Group. But now it’s about more than just eyeballs. “You can look at online buzz, online traffic, people talking about your brand and searching online.”

$4 million for some “buzz”??

Sure, Super Bowl ads are entertaining.  Who doesn’t remember the epic, breakthrough Apple “1984″ advertisement for the Macintosh that only ran once.  This year’s crop will feature things like a Kia ad for the Sorento SX Limited crossover SUV shows toddlers and baby animals rocketing to Earth from outer space.

So who is making money from Super Bowl ads?  The TV network running the game.  Sport Business Daily said that over the last 10 years, the Super Bowl has generated $1.72B of network TV ad sales from more than 125 marketers, according to data from research firm Kantar Media. From’02-11, A-B InBev, PepsiCo, GM, Disney and Coca-Cola were the top five advertisers and accounted for 37% of all Super Bowl advertising during that time frame. The average rate for a 30-second spot during the Super Bowl has increased by 40% during the past decade, reaching around $3.1M last year on Fox and closer to $3.5M this year on NBC. Listed below is a trend for the average cost of a 30-second spot during the Super Bowl, along with total ad spend for the game (compliments of Kantar Media).

SUPER   BOWL 30-SECOND AD COST, TOTAL AD SPEND

YEAR

NET

COST PER :30 SPOT

TOTAL AD SPEND

’11

Fox

$3.1M

$227.9M

’10

CBS

$3.0M

$205.2M

’09

NBC

$3.0M

$213.0M

’08

Fox

$2.7M

$186.3M

’07

CBS

$2.4M

$151.5M

’06

ABC

$2.5M

$162.5M

’05

Fox

$2.4M

$158.4M

’04

CBS

$2.3M

$149.6M

’03

ABC

$2.2M

$130.1M

’02

Fox

$2.2M

$134.2M

Beyond CBS, the other big winners will be (per 24/7 Wall Street.com)

The Superdome:  As of Tuesday 1/22, the lowest priced ticket on the Ticketmaster website was $2,387, and the highest priced ticket was $13,120. Stubhub listed tickets starting at $2,119 per ticket. Regular football game seating at the Superdome accommodates about 69,700. Even just at the base price, and averaging the lowest ticket prices seen, this comes to $2,253 for an average entry-level ticket. If all 69,700 seats averaged this, the tally comes to just over $157 million.  However, remember that The Superdome has undergone $336 million in renovations since Katrina, followed closely by $300 million in improvements to Louis Armstrong International Airport.

Chicken wing sellers:  According to the National Chicken Council, Americans will eat some 1.23 billion chicken wings over Super Bowl weekend. This is projected to be down about 1% from a year ago, but the drop is due to prices impacting production rather than demand. Wholesale wings are currently at about $2.11 a pound (in the Northeast), up 26 cents or 14% from a year earlier.

Pizza companies:  the Super Bowl is by far the busiest day of the year for pizza sales.  Figures from 2012 showed an expected 4 million pizzas being sold by restaurants alone. That is not counting the frozen pizzas from grocery stores nor the diehards who make their own pizzas from scratch. Statistic Brain said that Pizza Hut sold 2 million pizzas during the Super Bowl in 2012. Domino’s delivery drivers are expected to log about 4 million miles on Super Bowl Sunday.

Beer/wine/booze in generalSaveonbrew.com had an infographic for the 2013 Super Bowl showing the following: 50 million cases of beer will be consumed, resulting in more than 2 billion gallons of water being needed latter to flush away the beer consumed.  The other downside is that roughly 7 million people will be calling in sick after the Super Bowl because they are hung-over.

The city of New Orleans:  The New Orleans Metropolitan Convention and Visitors Bureau were quoted as saying that the Super Bowl will generate $300 million to $400 million in direct spending. The New Orleans Tourism Marketing Corporation said that the Super Bowl is expected to have a $432 million economic impact on the city.

 

Not broken out in these cool stats are of course, Yellow Page advertisers, as many of them will benefit from those looking for those wings, pizza’s, liquor stores, etc. etc. etc.  The good news for them is that they aren’t spending $4 million to be “liked” and their print, online, and mobile Yellow Pages advertising programs will continue to be work for them 24/7/365 long after the 49er’s have crushed those pesky Ravens….

 

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News U Can Use – January

These news items are brought to you by Kuk & Baldwin:

THE COOLNESS FACTOR.     It used to be that high school photos would be taken by a photographer who would set up in the gym one day and snap away as class members filed in one by one.   Typically, the price for a complete “package” would top out at $60 or $70.   But that’s no longer cool.   More and more moms are now making private appointments with the local hip photographer to have model-like photos of their teenagers, and they’re willing to pay the price – for example, in Austin, Texas, $699 for the basic pose and $1199 for the complete package.   The key, according to one parent, is about making the portrait show some individuality, with professional light and shadow, etc. (USA Today, 11/12/12).

GOT MOLD?     Nationwide, mold-Inspection laws are in a state of flux – e.g., Arkansas and Virginia both passed mold-inspection laws and then repealed them; and only Florida and Texas have licensing laws for mold inspectors.   But household mold poses a health threat everywhere, and mortgage lenders frequently require a mold inspection.   That’s why CIE certification (certified indoor environmentalist) is a key credential for many contractors.   The author of the source article achieved CIE certification, enabling him to command $300 to $600 per inspection – and he noted his “yellow-page ads were very effective, accounting for about 75% of my sales for the first two years” (Journal of Light Construction, 11/12).

LAWYER STATS.     In 2011, over 44,000 US law students graduated from ABA-accredited law schools, and nine months later only about half had found jobs in the legal field.   Indeed, in 2010 the US Bureau of Labor Statistics had forecast some 74,000 new lawyer jobs from 2010 to 2020 – but only three years into that decade, some 133,000 new lawyers have hit the job market, and by 2020 there will be 300,000 additional grads.   As we’ve said before in this publication, a great many of these new lawyers will be forced to hang out their own shingle, some out of home offices – and if you can identify them, you need to let them know how important it is for them to be well represented in the YP (Wall St. Journal, 11/9/12).

Find out how to be at the top of your sales performance by clicking on www.kukbaldwin.com.

Recent media/advertising news of note:

What the “fiscal cliff” deal really means for small-business owners
After weeks of speculation and on/off discussions, Congress finally got a deal done.  Now most small-business owners are expecting to see their taxes to rise. “The fiscal cliff deal will make me spend more time working in the business rather than on the business,” commented Bill Westrom, who owns a financial-consulting firm with just five employees. (Source).  The topic is covered in YP Talk in part one of our two-part series about what 2013 holds for SMB’s (Link).

Super Bowl ad slots almost sold out

But then again times can’t really be that bad can they? USA Today is reporting that CBS, which will air this year’s Super Bowl game has just two 30-second Super Bowl ad slots left to sell (and they are probably taken by now) at their record rates of at least $3.8 million for a 30-second slot. Viewers should look for new advertisers, more social media tie-ins, and longer ads at this upcoming 2013 Super Bowl.  <Source>

Internet Advertising Revenues Hit Historic High in Q3 2012

Even in a weak economy, advertisers are pointing more of their advertising dollars towards the Internet.   According to the latest IAB Internet Advertising Revenue Report figures released by IAB and PwC US, Internet advertising revenues in the U.S. reached $9.26 billion for the third quarter of 2012, making it the largest quarter on record with an 18% increase year-over-year, in comparison to Q3 2011’s $7.8 billion. In addition, they mark a 6% increase over the Q2 2012 figures of $8.72 billion. <Source>

Billboards doing well in Time Square in New York

Never mind that the One Times Square building which hosts the annual New Year’s Eve ball drop has almost no tenants,  it still earns more than $23 million a year in ad revenue. How?  Companies like Dunkin’ Donuts, Anheuser-Busch InBev, Sony and News Corp. are among the brands that spend millions each year digital billboard advertising to reach people milling around in Times Square.  Even during non-New Year’s days, it’s a very busy place with lots of potential eyeballs.  With digital boards, some of big dollar success comes from being able to change and turnaround new messages faster and with lots of moving graphics. (Source)

Mobile-ad spending continues to grow
There has been no shortage of reports of significant increases in mobile-ads.  According to an eMarketer analysis, the U.S. leads the way with search and display spending up 220% in 2012. Globally, mobile-ad spending reached $8.41 billion, compared with slightly more than $4 billion in 2011. (Source)

ZenithOptimedia has also estimated that traditional media ad spending will be flat in 2013, mobile is still likely to see strong growth.  Factors working in mobile’s favor are its low cost and high levels of consumer engagement, both of which are appealing to advertisers with tight budgets.  (Source)

The increasing expenditures in mobile are also being channeled towards social media mobile sites.  For example, some brands are now putting 20% of their Facebook ad spending into mobile campaigns, up from 14% in October, according to a Kenshoo study.. (Source)

A Tablet Christmas Day
What did you get for Christmas?  Chances are it was a new tablet.  On Christmas Day there were 17.4 million tablet device activations, more than doubling the number of devices from a year before, according to mobile ad/analytics firm Flurry. Tablets also saw more activations than smartphones this year, the firm reports. In other measures, non-Apple tablets gained in popularity on the iPad, and while Christmas Day saw a record number of application downloads.  How many yellow page apps do you think were downloaded?? (Source)

Still haven’t picked out your tablet?  Looking for something to bridge the gap between laptop and smartphone? Here is a review of ten top-rated tablets. (Source)

Twitter Growing in Scope and Usage
Twitter has become the hot social media these days and there has been no shortage of news.  First, if you are little behind about this new media, you can start with a list of “Golden Tweets” that generated the greatest number of “retweets” in 2012. At the top of the heap was President Barack Obama’s “Four more years” tweet, celebrating his victory in the U.S. election. Other much-shared tweets included Justin Bieber’s tribute to a deceased fan; the U.K. Olympic team celebrating its successes; and a Japanese voice actor announcing his engagement to a fellow star. (Source)

Did you also know that over three-quarters of world leaders now use Twitter?  That is an increase of 78% from 2011, according to a Digital Policy Council report. President Barack Obama remains the social network’s top political leader, with 24.6 million followers, followed by Venezuela’s Hugo Chávez, who has 3.8 million followers.  Of course, it’s not really Barack banging away on the keys, but I think you get the concept – Twittering isn’t just for the common folks looking for their 15 milliseconds of fame. (Source)

However, sometimes those tweets can get in you trouble.  Take Dallas Mavericks owner Mark Cuban.  He was recently fined $50,000 by the NBA after posting a tweet criticizing the league’s referees. Cuban’s tweet, posted after the Mavs were defeated by the New Orleans Hornets, said he has “failed miserably” at getting the league to fix referee-related issues (Source)

Digital revenues still not there for traditional publishers yet
While all of this twittering, mobile advertising, and social media growth is going on, “traditional publishers” (talking creative media here, not yellow pages) still aren’t offsetting losses from declining print and broadcast advertising with digital advertising.  Web ads are accounting for just a small percent of radio and newspaper groups’ total revenues. Publishers still believe  digital has plenty of promise, “but as 2012 draws to an end, it’s clear that this promise is still more theoretical than real,” writes Erik Sass. (Source)

 

 

 

 

 

 

 

 

2013 Predictions for Small and Midsize Businesses

Instead of a list of my predictions for 2013, most of which will be quickly forgotten, let’s instead look at the business environment facing small and midsize businesses, the lifeblood of print, online, and mobile Yellow Pages in this New Year.

Because there are many components needed to properly analyzing this issue, we are going to do this is a two-part review. In this part one, we will look at some of the macroeconomic drivers impacting the economy and by definition, the advertising decisions of SMB’s.  In part two, we will project some of the likely changes that SMB’s will make in the face of this economic forecast.

Several articles were used in this assessment:  recent reports/articles from the ADP Research Institute (Top Concerns of Business Leaders in the Post 2008 Economy), the WSJ/Vistage Small Business CEO Survey, and other news articles, which we will source as used.

Part one- The Big Picture

So what promise does 2013 hold for SMB’s?  The headlines from many of the sources we looked at have not been overly optimistic.

  • Small businesses: “It’s likely to be a year of painful decision-making for small-business owners…”      <WSJ/Vistage>
  • Midsize businesses: “..the near meltdown of the US economy in 2008, followed by years of high unemployment and ongoing global unease, continues to affect businesses of all sizes today.  Any notion of a sustainable “recovery” is mixed at best.…” <ADP>
  • Overall economy:  “The Federal Reserve predicts the economy to grow at a rate somewhere between 2.1 and 3 percent in 2013. That’s better than the GDP growth rate we experienced in the first half of 2012, but not what we need to turn the economy around….”  <Fox Business Network>

However, once you dig beneath the headlines you can find some optimism amongst SMB’s as we start 2013. For example, the ADP report notes that 52% of business owners and executives perceive the economy has improved within the last four years.   An additional indication of midsize business owner optimism was shown in hiring, were 43% indicated they would be increasing headcount in the next year.

Let’s keep dig down a little deeper to see what these business owners are saying, starting first with small-business owners.

Small Businesses:

The WSJ/Vistage study covered the heads of 926 small firms in a range of industries, all of them with less than $20 million in annual revenue.  The three major challenges facing small business owners today are:

  1. increased taxation,
  2. the challenge the new healthcare law will bring,
  3. and financing.

On taxes, despite all of the discussion about the fiscal cliff and its recent resolution, the reality is many of small business owners claim business profits under their personal income taxes and will be greatly affected by higher tax rates in 2013. In the compromise passed by Congress, for those earning over $400,000 year the tax rate will rise from 39.6% from 35% on personal income.  What that means is that while corporations like Walmart will be paying 35% rates, small business owners could be taxed at the higher 39.6% rate.

In a 2011 study, the Treasury Department found that raising taxes on incomes over half a million will impact roughly 750,000 small businesses organized as “S” corps, partnerships, and other small entities. “S” corporations are businesses in which shareholders report profits and losses on the individual owners income tax returns, so while the owner may not actually be taking home that half a million, the income line will reflect the company results and project them into the higher bracket.  Given that many S corps have by definition multiple owners, it would be fair to take that 750,000 small business number and multiple it by a factor of at least 3 to 4 to come up with the exact number of people affected by these changes.

And how are small businesses expected to react to these tax increases?  About 29% of the small business leaders plan to hire fewer workers.  32% expect that they will have lower investment spending with fewer purchases on things such as vehicles, property, and equipment.   Strategies that other larger businesses might use such as moving their business to the Cayman Islands or other tax havens are not feasible as the legal fees would be too steep.  In addition, some of these businesses might want to think about a change in structure, but would face other tax challenges under a different corporate structure according to accountants.

Regarding the healthcare challenge, small-business owners with more than 50 employees now have just 12 months to prepare for new rules that will be implemented in 2014, or potentially pay a penalty. Most experts believe that businesses that employ just under 50 workers will think long and hard about adding new staff.  For those who must comply with the law, national and state “health exchanges” will be established. Through them, small business owners will figure out their rates insurance plans and pricing.

A tremendous amount of uncertainty still remains on the application of this healthcare law.   For example, for a small business owner which has just under 50 employees, are independent contractors counted in the employee count or not? Owners are also waiting for guidance on the types of plans and need offer to meet the lost minimum requirements.  Only 14% of the business owners said they had a clear understanding of the health-care law, according to The Wall Street Journal /Vistage Small Business CEO survey in December.  With all the confusion, most business owners have discussed freezing hiring and or expansion plans until the requirements are clear.

One of the brighter spots for small business is that it appears that banks are loosening requirements for commercial and industrial loans. According to the monthly Biz2Credit Small Business Lending Index, big banks (defined as having $10 billion+ in assets) are approving a little more than 10% of small business loan requests. That’s much better than the worst days of the 2008-09 recession, but still far below better times.  Reports show smaller banks are granting about half of the requests for capital that they receive and are increasing the number of SBA-backed loans they make.  Credit unions are doing better, approving slightly more than that.

The still leaves plenty of business owners on the sidelines waiting for capital to be able to make a move. With much-needed capital, businesses could expand their business operations and hence, would be expected to consider increasing their advertising expenditures to ramp up sales.

While advertising is not specifically addressed in any of these articles, one has to believe that the budget for advertising for small businesses will have limited potential for upward adjustment, and more likely will be maintained at current levels at best.

Midsize businesses:

While the concerns and needs of midsize businesses are not dramatically different from smaller businesses, here are the top three concerns of midsize business owners identified in the ADP study:

  1. rising cost of healthcare coverage/benefits,
  2. slow economic growth,
  3. and the volume/level of government regulations that they face.

Of note is that smaller midsized organizations (those with 5 -50 employees) are more than twice as likely to expect improvement over the next 12 months than these larger midsized counterparts (those with 151 to 999 employees), 17% versus 8%. While midsize businesses reported much less improvement within their industries over the past four years (37%) than in the economy as a whole (52%), they are much more optimistic about the outlook for the industry over the next 12 months, with nearly 47% expecting improvement.

A more positive note for the Yellow Pages industry is that when these companies were asked about their own businesses, a similar number (48%) expect their budgets or revenues to increase over the next 12 months.

Despite their concerns regarding the near future of the US economy, another positive note was more than 43% anticipate increasing the number of employees within the coming year. Across all different levels of midsize companies the average number of new hires was about 18.

Within their specific industries, 54% of respondents indicated that there has been an increase in the level of competition within their industry in the last 12 months, especially in the larger midsized companies (those with 151 to 999 employees) according to 61% of respondents.

Conclusions – Part 1:

While there are still a great number of uncertainties ahead for both small and midsize businesses as we begin 2013, what is clear is that these SMB companies will need to actively look for ways to increase their sales, despite such uncertain times. The hope for the industry is that they understand that a comprehensive advertising program in both print, online, and mobile Yellow Pages can be part of those solutions in the coming year.

Look for part two of this article in the next version of YP Talk.

YP Talk — 2012 in review

Happy New Year everyone!!!! 

The WordPress.com stats helpers have been kind of enough to prepare a 2012 annual report for this site.   One of the most interesting stats for this site that we are very proud of — readers in 2012 came from 149 different countries which has to make YP Talk one of the most widely read sources for the Yellow Page industry, worldwide….

Here’s an excerpt from the annual report:

4,329 films were submitted to the 2012 Cannes Film Festival. This blog had over 35,000 unique views in 2012. If each view were a film, this blog would power 8 Film Festivals

Click here to see the complete report.

Thank you to all of you for reading and commenting on the articles we have posted over the past year.  We look forward to keeping you informed in 2013.