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August 25, 2016

Publishing News

Note to Readers: The newsletter will not publish tomorrow, 8.25, due to preparation for its name change, effective on Monday, 8.29, to MBR Publishing & Retail News. Please look for our new name on Monday, and please add our new email to your "safe contacts":

SI Teams With Fox Sports for Ad Deal
WSJ reports that Sports Illustrated and Fox Sports have signed a multi-year advertising and editorial agreement designed to help them better compete with ESPN in the digital space. SI and Fox will share “significant” content, according to Rich Battista, president of Time Inc. Brands, and the companies' ad sales teams will be able to sell advertising across their platforms.
WSJ (paid sub req.)

Condé Nast Rumored to Consider Cost Cutting, Publisher Changes
WWD: "With September fashion issuesclosed, nerves are jangled that a significant cut could be in the offing at Condé Nast that would furtherconsolidate the media giant’s corporate structure, notably its publishing side. Condé, like many legacy publishers, is steering the business from its print-centric roots to a digital future. This entails cutting out the hefty salaries left over from Condé’s golden years to make room for more digitally savvy--and bottom-line friendly--employees. Insiders told WWD that management is toying with the idea of either grouping publishers by category or reducing its roster of 13 or so publishers down to about six. There have been similar changes at rival publishers such as Hearst andTime Inc., which--like Condé--continue to deal with a new media landscape and an advertising pullback from retailers and luxury brands that hit magazines particularly hard this year. Sources targeted October as a time when the cut could come, while others mused that it may come sooner, around Labor Day. Putting a timetable on changes at Condé Nast seems tenuous, as decisions can sometimes take shape at the last minute. This was the case last year when the company finally pulled the plug on Details, after the industry speculated for years about its demise. Although there is much speculation on how Condé may reduce costs, there isn’t much argument that it will happen. In the case of grouping publishers, one source suggested the company could divide teams into categories such as fashion, beauty, food, travel, home and men’s. That approach is more aligned with Time Inc.’s recent restructuring where publishers sell by category and not title. Corporate odds-makers cite one possible 'luxury group' as W, Architectural Digest and Traveler...."

Time Inc. First Major Publisher to Use Header Bidding Wrapper in Programmatic
Time Inc. announced that it has selected programmatic marketplace Index Exchange as its primary header bidding wrapper partner. With the selection, Time Inc. becomes the first major publisher to use a header bidding wrapper. MediaPost: "Time Inc. ad inventory will now be available to advertisers looking to get in front of prime audiences and user data across display, mobile and video content. Time Inc. will have the potential to increase ad revenues by instantly evaluating multiple sources of demand from every programmatic marketplace simultaneously. Header bidding enables the company to allow all advertisers equal opportunity to access the highest value impressions and users. It also lets them transparently bid on these users, based on the value they represent to the advertiser." Ad Age explains that the wrappers are "similar to older, less-sophisticated header bidding tags, which let publishers put ad impressions up for simultaneous bids by multiple groups of buyers instead of working their way through those groups sequentially and taking the first decent offer." Article adds that the wrappers help publishers add and manage potential buyers without slowing down load times, a negative side effect that basic header bidding has encountered. Adding exchange partners to multiple websites is also a massive and costly time sink. But wrappers aim to fix that, as adding different partners across multiple websites is far easier to do than previous methods; once implemented, they are easier to manage." The wrapper trend is best for large publishers and media companies, according to Index Exchange. It also enables publishers to work with more than just Google, which has dominated programmatic through its DoubleClick for Publishers. ""I think header bidding wrappers will signal to Google that media companies don't want to subscribe to having just one master," said one exec.

Opinion: Social Networks Are Not Altruistic
Folio:'s Tony Silber argues that it makes no sense for magazine media to give their expensively produced content to Facebook and other social platforms in the hope of generating click-throughs and reach that may help drive advertising. He argues that the media companies and their associations should begin to pursue options for "appropriate compensation" for their content, perhaps based on traditional media syndication models, such as AP's and television syndication.

Facebook's Latest Ad Expansion Strategy Targets Large Publisher Sites
The Information: "Facebook’s mobile ad network is looking to sell more ads on a broader number of websites, diversifying beyond the game and utility apps that dominate its client base. Some of its new targets for mobile ad sales are large publishers such as USA Today and Hearst, which have started selling ads through Facebook Audience Network after plugging into the social network’s fast-loading article-hosting platform, Instant Articles. For the next part of that strategy, Audience Network is testing a new type of technology called “header bidding,” which many of those publishers like because they believe it will boost competition for their ad space. Until recently, publishers selling ads through computerized marketplaces decided which ad exchanges to use based on what the exchanges paid for ad space previously. That meant publishers didn't always get the best price. Header bidding changes that by allowing exchanges to compete directly against each other for space...'

Bloomberg's Tech Problems With Ad Blocking Persist
'Ad Age: " Starting at the end of May, Bloomberg began deploying a pop-up message to ad-blocking users. 'We noticed that you're using an ad blocker, which may adversely affect the performance and content on,' it said. 'For the best experience, please whitelist the site.' But there was a problem: Some readers reported getting the message even though they weren't using ad-blockers. In early June, a Bloomberg spokeswoman attributed the problem to "events across the web' and said the company was working on a solution. But that solution doesn't seem to have come, because users are still frequently complaining about the same issue...[But] Bloomberg is happy with how the experiment is going, reporting a 20% drop in the percentage of users who employ an ad blocker when accessing Twitter users have also reported false positives on Wired's website. Wired has taken an even tougher stance on ad-blocking than Bloomberg, giving readers the choice of either whitelisting or paying for an ad-free version of the site..."
Ad Age 

Traditional Media Ad Growth Slows in Q2; Magazines' 2016 Growth Projected at 2%
MediaPost: While total traditional U.S. advertising has kept pace with rising digital media advertising for the last few quarters, it had a tougher period recently. Q2 2016 advertising spending rose 2.5%, vs. the 4.3% gains in Q4 2015 and Q1 2016 periods, according to MoffettNathanson Research. It noted: “This was the first sequential decline for traditional advertising in over a year.” Total ad spend, fueled heavily by soaring digital media, was up 11.5% in Q2, after a 10.8% gain in Q1. “We think trends in the second half of 2016 will be more indicative of the long-term health of TV versus online advertising spending," say the researchers. For full-year 2016, overall U.S. advertising is expected to climb 8.1% to $191.2B. The researchers project that consumer magazines will see 2% growth in ad spending, to reach $12.5B, for the year. Internet/digital ad spending will climb 21% to $72B. TV spending is now projected to rise 6.6% to $80.3B. The researchers expect TV spending to sink 3.7% in 2017, but rise 2.6% in 2018, when the Winter Olympics and midterm political advertising kick in.

Guardian Acknowledges Paying Agencies Rebates
MediaPost: "In its earning results for its most recent fiscal year, ended April 3, Guardian Media Group’s financial statements include a paragraph detailing “advertising rebates,” including “free advertising space, cash payments, or both.” GMG also discloses: “The rebate provision is calculated using the forecast spend over over the contract period and the rebate entitlement set out in the trading agreement. Calculating the required provision therefore requires an estimate of future period spend in determining what tier of spend the agencies may reach over the agreement.” The disclosure is important because it could involve advertising and media agencies in the U.S., where the practice of media rebates is more controversial than in the U.K. There, it’s a generally accepted part of the business. Earlier this year, two big U.S. industry organizations, the Association of National Advertisers representing clients, and the 4As representing agencies, had a public spat over an ANA report alleging the practice was widespread (but not acknowledged) in the U.S.--an accusation agencies adamantly deny. The Guardian isn’t the first U.K. newspaper to publicly admit that it pays rebates to ad and media agencies..."

'Super Agent' Has Talked Acquisition With Billboard, Hollywood Reporter Parent
NY Post reports that Hollywood super agent Ari Emanuel’s WME/IMG has talked to former Guggenheim Partners honcho Todd Boehly about a possible acquisition of his media holdings, which include TV production company Dick Clark Productions and trade publications The Hollywood Reporter and Billboard. "It’s unclear if the talks are ongoing or whether they will lead to a deal for any or all of the assets, which one source suggested were worth more than $500M," writes the Post. "Reps for Boehly’s Eldridge Industries declined to comment. WME said: 'We’re not talking to them.' Boehly exited Guggenheim about a year ago with some of the assets he acquired while with the firm. Elridge has been working with Moelis & Co. and Goldman Sachs to explore a sale of its holdings. A prospective Chinese buyer is also kicking the tires, other sources said."


Retail News

Food Stamp Cuts, Competition Hurt Dollar Stores
Reuters: "Discount retailers Dollar Tree Inc and Dollar General Corp reported quarterly sales below estimates, hurt by a drop in food prices, growing competition and the impact on their low-income customer base from a reduction of food stamp coverage by several U.S. states. Some states changed in April the criteria for the Supplemental Nutrition Assistance Program (SNAP)...making thousands of households ineligible for benefits. "Retail food deflation and a reduction in both SNAP participation rates and benefit levels, coupled with unseasonably mild spring weather, proved to be stronger-than-expected headwinds to our business," Dollar General CEO Todd Vasos said. Though Dollar Tree said the impact from changes to food stamps was small, the company's acquisition of larger rival Family Dollar last year has increased its exposure to the program meant for lower-income people. Dollar Tree, which traditionally caters to middle-income consumers, attributed the "challenging retail environment" to consumers being pressured by higher rent and healthcare costs. Family Dollar president Gary Philbin said the division's customers were still under pressure [noting that food-stamp penetration runs higher at Family Dollar than at Dollar Tree]."

Jobless Claims Fall Again
Reuters: " New orders for U.S. manufactured capital goods rose for a second straight month in July as demand for machinery and a range of other products picked up, offering a tentative sign that a business spending downturn was starting to ease. The economic outlook also was boosted by another report on Thursday showing an unexpected drop in the number of Americans filing for unemployment benefits last week, indicating sustained labor market strength. Together, the data support the view that the Federal Reserve will raise interest rates in December..."

Safeway, Albertsons Delivering Groceries in Denver
Denver Post: "Safeway is launching grocery delivery in the Denver metro area, joining King Soopers, Walmart and third-party providers like Instacart in offering the increasingly popular service. Starting Wednesday, customers of both Safeway and Albertsons (both chains are owned by the same parent) can log, fill up their virtual grocery carts and have their order delivered to their homes within a one-, two- or four-hour window. The delivery area currently includes most of metro Denver...'The plan is to expand to other parts of Colorado, but this is our first go of it here,” a Safeway spokeswoman said. 'We’ve had the service in other markets like California, Washington and Oregon, and it’s been tremendously successful.'"

Loblaw to Acquire Healthcare Tech Company
SN: "Loblaw Cos. has agreed to acquire QHR Corp., a Canadian Healthcare Technology Company, for $170 million. QHR is expected to operate as a distinct business within the Shoppers Drug Mart division of Loblaw, and remain headquartered in Kelowna, British Columbia. It is a natural complement for Loblaw, a source of pharmacy and health and wellness solutions for patients and providers, according to the companies..."


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