Spots N Dots
The Daily News Of TV Sales
September 8, 2017
MARKETING SPENDING INCREASES SLOW
FASTEST GROWTH AREA: DIGITAL
Marketing budgets are growing, but not quite as much as reported earlier this year. The Chief Marketing Officers taking part in the latest CMO Survey report market budgets at their companies increased 6.7% during the past year. But that’s down from the average 7.3% reported when the last survey was conducted in February. And while CMOs are optimistic they’ll have more dollars to work with in the year to come, they don’t think their budgets will grow quite as much. They now project marketing budgets to increase 8.9% in the year to come, which is a less robust outlook than their prediction made earlier this year. Even so, optimism levels are levels not seen since late-2010 when companies were crawling out of the recession. Among the business sectors where CMOs are reporting budgets growing the most are banking-finance-insurance, CPGs, and telecommunications and media with each in double-digits.
“The most recent CMO survey reports companies will spend 13% more on digital marketing compared to an 8.9% increase in overall marketing spend in the next year,” said Christine Moorman, a Fuqua professor and director of the CMO Survey. Yet reflecting growing concerns about digital—ranging from bot traffic to questions about ROI—that growth rate is actually a point and a half less than what CMOs had predicted earlier this year. Those dollars aren’t flooding into traditional media though. CMOs said their traditional advertising spending will probably drop 2% during the next year.
At the same time marketers expect social media spending to grow 89% in the next five years. It currently makes up 9.8% of marketing budgets according to CMOs surveyed. They expect that number to climb to 13% within the next year and within five years they project social media spending will account for 18.5% of their marketing budgets. Even so, those predictions don’t always hold up. CMOs had earlier expected their social media spending in Aug. 2017 would be 19.5%—or twice what it turned out to be. One reason some companies are taking a slower-than-expected embrace is 16.3% of CMOs said they’ve so far been unable to show any impact from social media marketing on their company’s bottom line. And another 39% said although they have a gut feeling it’s working, there’s no quantitative data to actually back that up.
What about mobile ad spending? CMOs predict mobile spending will more than double during the next three years. Right now mobile gets an average 6% of their marketing budget and they think that’ll grow to 13% by 2020.
“Marketing leaders report only an average or below average contribution from mobile and social investments to company performance,” Moorman said. “One reason performance may be lagging is because companies are remain focused on digital marketing strategies not on building a digital marketing organization.” She said more companies are putting additional dollars behind the analytics to determine what marketing activities are working. While overall spending has changed little since 2012, spending on analytics is expected to increase from 5.5% of marketing budgets to 18.1% within three years.
The CMO Survey is the biannual survey conducted by the American Marketing Association, Deloitte and Duke University’s Fuqua School of Business. The latest edition, conducted from July 18 to Aug. 8, received responses from 349 CMOs. Read the full report HERE.
ADVERTISER NEWS
Toys ’R’ Us has hired a law firm to explore restructuring options that could possibly include a bankruptcy filing. The chain has about $5 billion in debt with about $400 million of that debt coming due next year……Gap Inc. will realign its store portfolio to emphasize its two best performing brands, Old Navy and Athleta, closing about 200 underperforming Gap and Banana Republic locations while opening about 270 stores of the winning banners……A month after Sears announced a partnership with Amazon to sell Kenmore products, Kohl’s announced a deal where Amazon will establish “Smart Home Experience” in-store shops in ten Kohl’s locations where customers can try out Amazon devices including Echo, Fire TV, and Fire tablets……Fred’s, left out in the cold when the Walgreens/Rite Aid deal was abandoned, lost $66 million for the first half of the year and a good part of that was legal costs associated with the failed deal. Same-store sales for the second quarter were down just 0.3%, an improvement over recent results, although it notes “ongoing headwinds” in consumables in the front ends of the stores……McDonald’s will sell bottled, ready-to-drink McCafe beverages at supermarkets and other retail locations beginning early next year. The three flavors will be offered in a partnership with the Coca-Cola Company……FAT Brands, owner of the Fatburger and Buffalo’s Café chains, is buying two steakhouse brands that have been in decline in recent years, Ponderosa and Bonanza, from Homestead Dining. Once large chains, the two brands being purchased now amount to only about 120 locations, mostly franchised……Alimenation Couche-Tard, which has been on an acquisition binge to expand its Circle K chain of c-stores, says it now plans to divest about 200 non-core stores that don’t meet profitability standards. Including the recently-acquired CST Brands stores, quarterly revenue was up 9.8% and earnings per share grew by 17.5%...... Also in the c-store business, Casey’s General Stores says total in-store sales were up 7.5% in the quarter that ended on 7/31, with same-store sales up 3.7%. Bu the chain also saw lower traffic counts and cited the difference between food-at-home and food away, as some supermarkets have referenced in their sales reports……T-Mobile announced a new plan that will offer free Netflix to subscribers. The unlimited data family plans will cost $40 per line for a family of four and customers will be able to activate Netflix either online or in-store……Another online company is starting a bricks-and-mortar effort as mattress maker Casper plans to open about 15 pop-up shops in some major markets starting next month. Casper already has a deal in place with Target for mattresses on the retailer’s website and accessories like pillows and sheets in Target stores.
NETWORK NEWS
Jane the Virgin star Gina Rodriguez is developing a new hour-long dramedy for The CW network called Illegal about the family of an undocumented teenager. Rodriguez is also developing a new project for CBS called Have Mercy, a medical drama based on the German format Dr. Illegal. Rodriguez will executive produce both projects with her I Can & I Will production company under an overall deal with CBS Television Studios……L.A. Confidential, James Ellroy’s noir classic novel, is being developed as a TV series by CBS. The project comes from Arnon Milchan, who produced the acclaimed 1997 movie and writer-producer Jordan Harper (Gotham). Lionsgate Television and CBS Television Studios are also involved. L.A. Confidential will follow three homicide detectives, a female reporter, and a Hollywood actress as they cross paths as the detectives pursue a sadistic serial killer in 1950’s Los Angeles. The movie was nominated for nine Oscars and took home the statue for Best Picture, Best Supporting Actress (Kim Basinger), and Best Adapted Screen Play (Curtis Hanson) ……The Fox network plans to bring its latest revival of The X-Files to the New York Comic-Con next month. The series will join the second season of The Exorcist, Seth McFarland’s The Orville and Family Guy, and The Gifted. The panels will also include stars of the programs including David Duchovny and Gillian Anderson of The X-Files, Amy Acker and Stephen Moyer of The Gifted, Seth McFarland and Adrianne Palicki of The Orville. The Fox panels will be presented on Friday, October 6th and Sunday, October 8th……The 22nd season of the ABC reality hit series The Bachelor will feature the return of Arie Luyendyk Jr. to take a second shot at love. Arie is the son of famed Formula One racer, Arie Luyendyk Sr., a two-time Indianapolis 500 winner. Arie Jr. followed his father into Formula One racing and competed in the Indianapolis 500. He’s since shifted gears and is now a successful real estate broker in Scottsdale, Arizona. The Bachelor returns to ABC in January of 2018……The eighth season of The Talk on CBS is set to debut on Monday, September 11th at 2 PM (ET). The season will start out with some of the primetime leading men from the CBS schedule as special guest co-hosts. The list includes Shemar Moore, Chris O’Donnell, Eric Christian Olsen and Wilmer Valderrama. Guests for the premiere week include Jackie Chan, Stephen Colbert, Mark Harmon, Maria Bello, Mindy Kaling and Dr. Phil McGraw……. Actress Allison King (Baby Driver) will guest star in the new season of the CBS drama Code Black. King will play a suburban mom on vacation in Los Angeles who must come to grips with the harsh reality concerning her new husband after her family is in an accident.
A GENERAL MOTORS ‘POWER PLAY’?
General Motors is instituting a new disclosure form that has angered its dealers by threatening major penalties, even possible termination of their franchises, if the dealers don’t use a new form for customers who buy non-GM service contracts. Automotive News reports under GM’s franchise agreement, dealers need to disclose when a service contract, part or accessory isn’t a GM product, but now the manufacturer is demanding dealers need to use a standardized form to make that disclosure. GM says the move is intended to make clear the limits of its responsibility, but Auto News says opponents see it as an attempt to promote GM products at the expense of other alternatives. And, it says, given the size of the accessories, parts and service markets, the stakes are huge.
In an initial letter from GM, dealers were told failure to comply with the new requirements could result in a $500 “surcharge” per incident, “rendering the dealer ineligible for consideration for additional GM dealership opportunities,” suspension from various current and future sales programs (including some incentives programs), and termination of the Dealer Sales Agreement. In another letter issued two weeks later, the VP of sales, service, and marketing said “there must be a consequence for a dealer who ignores or refuses to make these very important disclosures” but added “this process is not intended to be punitive.”
NRF BACKS OFF ON SALES FORECAST
The National Retail Federation has revised its 2017 retail sales forecast downward to a range of 3.2-3.8% growth, citing revisions to government data reports and weaker-than expected Q1 spending. NRF had previously projected growth of 3.7-4.2% this year. “NRF anticipates stronger sales heading into the fall and holiday seasons,” said the trade group’s chief economist, Jack Kleinhenz.
THIS AND THAT
BJ’s Wholesale Club is launching two websites offering products from its store brands, Berkley Jensen and Wellsley Farms. Retail Leader says it’s the first time any warehouse club developed such a website for its house brands, and club members will be able to make purchases and pick them up at the club in as little as two hours. With 215 locations (and 132 gas stations) in 16 states, BJ’s expects to offer additional enhancements to its digital business shortly……Sinclair Broadcast Group has closed on its previously announced purchase of Bonten Media Group and Cunningham Broadcasting Corporation has also completed its related purchase of the membership interest of Esteem Broadcasting for an aggregate purchase price of $240.0 million. Sinclair added 14 television stations in eight markets and Cunningham assumed the joint sales agreements under which Sinclair will provide services to four additional stations……Daimler Mobility Services is investing in the U.S. car-sharing company Turo Inc., as part of a financing round. Turo has four million customers and more than 170,000 vehicles.
ECONOMIC NEWS
First-time claims for unemployment surged last week, but analysts say it was entirely related to Hurricane Harvey. Total claims amounted to 298,000, but Texas alone accounted for almost 64,000 as many businesses were closed due to flooding. With Hurricane Irma expected to hit Florida and the East Coast, the enlarged numbers will likely continue for a few more weeks—before the hurricanes hit claims had been under 300,000 for 131 straight weeks, the longest streak since the early 1970s.
AVAILS
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Account Executive: Are you an experienced broadcast television sales professional who excels at new business and digital development, is fully competent at transactional business and understands the need to balance everything? Would you like to work for a legacy CBS affiliate in Green Bay, the best NFL market in the country? We’ll provide the products, the tools and a great pay plan. You provide the skills, the drive and more than just a 9a-5p work ethic. Please submit your resume and references to: . EOE.