Martin Sorrell - red face/egg on face

WPP today warned of a profits shortfall in 2009 after the marketing giant admitted that it had missed its budgets in the first quarter of 2009 as like-for-like sales tumbled by 5.8 per cent.

This is abit embarrassing for Sir Martin who prides himself on being sage and wise and is the self appointed spokesperson for the entire global advertising and marketing industry.

This must leave a serious question mark over his credibility.

Conde Nast closes another title

Portfolio Conde Nast's 2 year old business title is to close.

No great surprises I suppose given the state of the advertising sales market but its telling because CN is a sensible and deep pocketed publisher.

No green shoots of recovery in consumer magazines then.

Indie - crunch time

Our spies tell us that INM will successfully do a deal with its bond holders and the Indie will live on. For now.

Bond holders aside the Group is saddled with heavy debt which requires serious interest payments. Interest on the bank debt is 90+ million euros a year!

And all this at a time when revenues are under huge strain and maintaining profits is not at all easy.

Scary times
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Thought for the day

"When a thing ceases to be a subject of controversy, it ceases to be a subject of interest."

William Hazlitt

Britain's Got Talent - but ITV misses out on the YouTube revenue

ITV's woes are well documented, both here and across media-land, with Michael Grade now fighting for his survival according to reports of recent investor meetings.

ITV's recent good news, Susan Boyle's outstanding challenge for global fame, has shown that when reality TV does discover a real talent, digital media can take content to a truly global audience within days. The clip of Boyle's appearance on the show has now had over 100 million hits on YouTube.

100 million hits is a huge amount of eyeballs, worth an estimated £1million+ in ad revenue, only ITV has failed to come to an agreement with Google, owner of YouTube, to allow for advertising to appear next to the clip. So no-one has made a penny out of the clip at all, not Google, not ITV, not Simon Cowell.

While negotiating (or holding out) for the right deal for the long term may well stand ITV in a better position with YouTube going forwards, it does smack of closing the stable door when the horse has not only bolted, but has gone on to win the 3.20 at Kempton Park. ITV's much trumpeted digital strategy for the past 3 years has been all about increasing views of ITV digital content. You'd have thought that at some point one of the phalanx of digital employees would have got a deal done with Google/YT already?

Obviously not. Which sums up what's been going wrong with ITV over the last few years. They were late into digital, they acquired badly, and relied on their single national market dominance to bully their way into a Global market. Only it doesn't work like that. Google don't need ITV. ITV desperately needs the revenue. If people prefer to go to YouTube to watch ITV content rather than go to ITV.com, then ITV have a serious structural problem in their digital business.

Will 100 million people watch on YouTube as Susan Boyle progresses through the rest of Britain's Got Talent? Probably. Will Google blink first? Probably not. I know which side of the negotiating table I'd rather be sat on.

More to follow on ITV I suspect over the next few weeks.

Its monday - I need a laugh

Dont watch this if youve woken up on monday morning and are all business like. If however youve woken up and are in need of a laugh then for goodness sake watch this as it VERY funny.

Technology and how to deal with it!

check this out. Eddie Izzard speaks for us all in this short but funny clip

YouTube requires rich parent

Interesting economic picture at the global video sharing phenomenon YouTube which supplies 40 per cent of all videos watched online worldwide for free.

Running costs are between 500m to 1bn dollars a year against annual revenues of 240m dollars!

Fortunate that its owner Google is so very rich (and getting richer).

They have an estimated cash pile of 16bn dollars so they can afford to be a generous parent.
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Test

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Daily Mail - testing subscriptions

LONDON - The Daily Mail has become the latest newspaper to launch a subscription service to increase reader numbers.

The mid-market newspaper's offering will mirror subscription services launched by rival newspaper groups, including The Daily Telegraph, Daily Express, The Times and Independent.

Unlike the Express, the Daily Mail will not promote its subscription service in the daily newspaper due to concern about cannibalising paid-for sales. The service, which will launch in test form within a month, will run across the Daily Mail and Mail on Sunday.

Managing director Guy Zitter said one reason for the delay in bringing the service to market was the difficulty in identifying non-Daily Mail readers.

The newspaper is initially marketing the subscription offer to 10,000 potential new readers.

(our thanks to Media Week for this)

Content sharing - will it work?

News Corp (NYSE: NWS) is setting up a new unit designed to share content from all of News Corp.‘s global sources.

The News Corp. editorial portal will be headed by John Moody, who has been EVP for News Editorial at Fox News. Moody will report directly to Murdoch.

The new post calls for Moody to work with news chiefs across all News Corporation properties to find ways to pool reporting resources and cut costs. Before coming to Fox, Moody spent 14 years at Time magazine and last held the post as the newsweekly’s NY bureau chief.

In principle this type of resource and excellence sharing is very smart (even more so in recessionary times)but in practice will it work?

On the surface it looks like Moody has one helluva job infront of him to persuade News Corps. editorial/content titans to use each others content. My own personal experience of these types of very sensible schemes is that everyone says yes of course we will be share but in reality they dont. Happy to have you use my content but dont expect me to use yours.

But things are very different today.

For a start the technology enables sharing and the multi platforms nature of media actually encourages it.

Also Moody has the distinct advantage of being able to offer strong and reputable brands whose content would enhance and strenthen partner content offerings.

Oh and lets not forget that Moody reports directly to Murdoch - thats a really big stick!

I think this is sensible but more importantly I think it will work to the advantage of all participating content parties and I see no reason why the consumer experience shouldnt be enhanced to boot.

On a cautionary note lets hope this isnt really all about cost cutting and will unfortunately do nothing but advance further reduction in quality content production

Lets see.

Microsoft & Google back on?

Is the Microsoft Yahoo deal back on?

Having failed to buy Yahoo for $21.3bn in 2008 it seems that Microsoft are still keen to do something.

Why?

Well its all about search revenues of course.

Google have the market completely stitched up with 64% of the 'data share market' and an alliance between these two would represent some form of credible alternative for advertisers.

Microsoft/Yahoo believe that they would generate revenues above their combined market share because they would provide the only alternative to Google.

The bottom line is both urgently need to do something as individually they are nowhere in search and moreover someone has to stop (or least slow) the Google runaway train.

Get to it guys!

Skype to be sold back to founders?

You following this story thats gaining some traction that the Skype founders Niklas Zennstrom and Janus Friis have the backing to buy back the business they founded from ebay to whom they sold it for $2.6 billion US back in 2005.

Private equity players KKR, Warburg Pincus, Elevation Partners and Providence have reportedly teamed up with the boys and are prepared to chip in $1billion towards the purchase.

Question isnt whether ebay will sell as its clear they want to and they will but rather what price will they sell for. Somewhere between $1bn and $2.5bn I suppose.

Personally, I love Skype because its a great service and from a business perspective its properly disruptive but I just cant see it making proper money ever.

The boys must know something I dont!!

Newspapers versus Google

The inevitable clash between the newspaper industry and Google is coming to a head and its fascinating to watch.

Round 1: Robert Thompson Murdoch's chief newspaper general labelled Google a 'parasites' or 'tech tapeworm in the intestine of the internet'

Round 2: Murdoch himself questioned whether Google was abiding by copyright law

Round 3: Google's CEO Eric Schmidt countered rather more politely praising newspapers and recognising their role but saying that they needed to innovate to survive. He warned that the turmoil in the newspaper industry was a direct result of newspapers failing to keep up with the pace of change - and ignoring their readers' wishes (ouch!).

We are front row at this heavy weight fight and we intend to stay gued to our seats as the titans of 'old' and 'new' media trade meaty blows in what some see as deciding the future of the newspapers.

We will keep you posted

Even the digital boys are worried about newspapers

Its worth reading my friend Lopo's comments on the state of the newspaper industry on his blog

Lopo is totally devoted to digital (he is founder of very successful health, beauty and happiness site wahanda) but like so many others he is concerned by the demise newsapers.

Give it a read

Twitter - big but not that big!

Twitter is the new golden child of the media world. 

Everybody it seems has gone twitter mad - celebrities and actors are living their lives in the open on twitter and so are millions of us. 

Rumours abound that Google will acquire it at some astronomical valuation.

Well yes but hold on one second.......

Its worth taking a moment to remember that twitters' worldwide user base is 1.2m and thats about the same of the Sunday Times weekly circulation (and that doesn't include online hits)

Isnt it about time that newspapers got together to promote their reach and impact? Maybe its time to get a new pr company! 

Newspapers have to get on the front foot and FIGHT or risk being buried by all the hype that surrounds these fast growing social media companies

Online ad revenues poised to overtake newspapers

We've been tracking the decline of newspaper advertising revenues and the rise of digital ads on this blog since we started. We have mused here many times on when exactly digital ad revenues will overtake newspapers. Have a look at this graph and draw your own conclusions on the US market