Microsoft puts Razorfish up for sale

Microsoft has appointed Morgan Stanley to find a potential buyer for Razorfish, its digital agency.
Publicis, the French marketing company that says it is planning more acquisitions in online advertising, is thought to be a possible bidder.
Microsoft acquired the agency, formerly called Avenue A Razorfish, as part of its $6bn takeover of aQuantive in 2007.
One analyst valued Razorfish at $600m-$700m, based on sales of about $400m last year and profit margins for similar businesses of 12-13 per cent.
The analyst said: “Much more than that would be overpaying”, adding that even in digital marketing, valuations had fallen since last year, when Advertising Age trade magazine reported a valuation of $800m
In August, two years after the aQuantive deal, more favourable tax implications will provide an opportunity for Microsoft to sell an asset some view as a conflict of interest with Microsoft Advertising, which sells technology to rival agencies. Maurice Lévy, Publicis chief executive, said funds from a refinancing this month could be used for acquisitions, particularly in digital and emerging markets, which are performing better than traditional advertising in the US and Europe.
“There are some opportunities” for acquisitions, he said.
“Obviously if we can take advantage of the current situation to be ready to take these things, it’s good.”

The ad industry’s critical challenge

http://postcards.blogs.fortune.cnn.com/2009/06/22/the-ad-industrys-critical-challenge/

Marcel Fenez, managing partner of PricewaterhouseCoopers’ global entertainment and media practice, laid out the dismal details. He called the current recession in ad spending “not cyclical but structural.”

Which means that the advertising business has permanently changed. And it’s going to be rough sailing for a long while. Global ad spending will decline 12.1% this year, Fenez estimated. Next year will be another bad year — down 2.7% — before an upturn begins in 2011.

That’s the worldwide view, and the U.S. picture looks even worse. Fernez forecast a 14.8% drop in spending this year and 3.3% next year. Hardest hit: TV, newspapers and consumer magazines. Stealing share as the total pie shrinks: Video-game companies and the Internet.

Digital Agency Sapient Buys Nitro in $50 Million Deal

http://adage.com/agencynews/article?article_id=137361

In a rare instance of a digital agency purchasing a traditional ad network, Sapient has struck a $50 million cash and stock deal to purchase Nitro Group. The merged company will be redubbed SapientNitro.

Nitro founder and CEO Chris Clarke will be CEO of the joint agency, while Sapient's Gaston Legorburu will serve as executive director-worldwide creative officer at Sapient Interactive and SapientNitro. Both he and Mr. Clark report into Alan Herrick, CEO of Sapient, a Nasdaq-listed company that also has offerings in the IT and professional services space.

At a time when so many in adland are still struggling to play catch-up when it comes to providing clients with best-in-class digital services, it might seem odd that an interactive network would buy a traditional advertising firm. But Mr. Legorburu -- who said he's been working on inking a deal with an above-the-line agency for nearly two years -- told Ad Age the merger will help Sapient in its quest to give advertising holding companies a run for their money.

The major holding companies, which include giants such as WPP and Omnicom Group, collectively control nearly 85% of global marketers' advertising spending, Mr. Legorburu said, but "they don't get it." Together, independents Sapient and Nitro Group can do multichannel marketing and commerce on a global scale, he said.

Omnicom to Merge Ketchum, Pleon to Create Global Network

http://adage.com/agencynews/article?article_id=137326
In one of the largest mergers in the PR industry, Omnicom Group is combining the operations of U.S.-based Ketchum and its European sibling Pleon to create a global network intended to rival some of the industry's biggest global players, with more than 2,000 employees operating out of 103 offices in 66 countries.

Globally the new agency will operate as Ketchum but be called Ketchum Pleon in the U.K. and continental Europe. Current Ketchum CEO and senior partner Ray Kotcher will head up the agency globally, while Timo Sieg, former chairman and CEO of Pleon, will be the agency's European CEO and join Ketchum's worldwide executive board. The move makes Ketchum a nearly $400 million shop, bumping it into the neighborhood of some of the world's largest agencies, including Interpublic Group of Cos.' Weber Shandwick, Omnicom's Fleishamn-Hillard, independent shop Edelman and WPP's Burson-Marsteller.

At Unilever, Digital's Not Just for Mature Markets

http://adage.com/digital/article?article_id=137281

The consumer-goods giant is close to concluding a review to name its first and one of the marketing industry's first truly global digital-agency rosters to help carry out a global digital strategy developed with input from such digerati as Federated Media Chairman John Battelle and BlogHer co-founder Jory Des Jardins.

The digital roster, believed likely to include Sapient and an entry from WPP incorporating several agencies into a single unit, will have five to 10 agencies in all, from which Unilever's global brands will choose, Mr. Rangaiah said.

Crispin, Porter + Bogusky Ventures Into Europe

http://online.wsj.com/article/SB124467690175504147.html?mod=dist_smartbrief

Crispin, Porter + Bogusky, one of the more-successful U.S. advertising agencies, said it is expanding abroad, launching CP+B Europe by acquiring Daddy, a digital-ad firm in Gothenburg, Sweden.
Daddy, which has 50 employees, works on behalf of marketers including H.J. Heinz and the Scandinavian airline SAS. Terms of the purchase weren't disclosed.
That geographic footprint has helped during economic slowdowns. Ad giants and their corporate owners have enjoyed a bit of a buffer during this recession, too, from their exposure to marketers in China and India, where the business is still growing.
While Europe's ad market is also suffering a major pullback, it is expected to perform slightly better than North America's this year. Ad spending in North America is expected to slide 8.3% in 2009, compared with a 6.7% decline in Western Europe, according to ZenithOptimedia, the media-buying firm owned by Publicis Groupe.

http://adage.com/agencynews/article?article_id=137228

Nielsen: Q1 Ad Spend Takes Dive

http://www.mediaweek.com/mw/content_display/news/media-agencies-research/e3i6c932f87e11ed33abf63b6748c54b23a
The entire advertising and media universe knew the first quarter was brutal; now the Nielsen Co. has crunched the numbers to prove it. Overall U.S. advertising expenditures fell 12 percent to $27.9 billion in Q1, compared to the first three months of 2008, according to Nielsen. Not surprisingly, three of the worst ad performers came from the beleaguered newspaper business. Local Sunday supplements lead all decliners with a drop of 37.7 percent ($12.1 million), followed by business-to-business magazines (-29.9 percent, to $633.2 million), national newspapers (-27.7 percent, to $286.5 million) and national Sunday supplements (-25.9 percent, to $211.7 million).

Local Mobile Advertising Gains Traction

Local mobile advertising will be the next hot trend, with local mobile search leading the way, according to BIA's The Kelsey Group.
Local mobile ad revenue will grow to $3.1 billion in 2013, up from $160 million last year, while mobile search will reach $2.3 billion, according to the firm's forecasts. Local searches made up 27.8 percent of all searches in 2008, but are expected to hit 35.1 percent in 2013, according to the report, "Going Mobile: The Mobile Local Media Opportunity."
"As mobile data consumption rises, we expect local marketing to be a big winner. There is a strong correlation between local search and the mobile use case, which will cause a good portion of the ongoing mobile application boom to focus on local," Michael Boland, the The Kelsey Group's program director for mobile local media (MLM), said in a statement.
The report says that about 15 percent of all Apple (NASDAQ: AAPL) iPhone applications are local.
http://www.internetnews.com/bus-news/article.php/3824006/Local+Mobile+Advertising+Gains+Traction.htm

Donnelley increases offer for Quebecor

In a letter to Quebecor, Donnelley increased its cash and stock offer to about $1.8 billion, up from the original offer of $1.35 billion, which was tendered May 12.

http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090609/FREE/906099977/1078/newsletter011

Revenue at Craigslist Is Said to Top $100 Million

http://www.nytimes.com/2009/06/10/technology/internet/10craig.html?ref=business
The Internet classified ads company, which promotes its “relatively noncommercial nature” and “service mission” on its site, is projected to bring in more than $100 million in revenue this year, according to a new study from Classified Intelligence Report, a publication of AIM Group, a media and Web consultant firm in Orlando, Fla.

That is a 23 percent jump over the revenue the firm estimated for 2008 and a huge increase since 2004, when the site was projected to bring in just $9 million. “This is a down-market for just about everyone else but Craigslist,” said Jim Townsend, editorial director of AIM Group. The firm counted the number of paid ads on the site for a month and extrapolated an annual figure. It said its projections were conservative.

About 24 percent of Craigslist is owned by eBay. The two companies sued each other last year over corporate governance issues. The dispute is coming to trial later this month.

Proforma Merges with Barry Roberts

Proforma Executive Business Services, a provider of promotional products, printing and marketing services, has merged with promotional products distributor Barry Roberts Inc.
http://promomagazine.com/incentives/news/proforma-roberts-merges-0603/

Lorton Data acquires Aldata

http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090603/FREE/906039985/1078/newsletter011
Data quality services provider Lorton Data has acquired direct marketing information and list acquisition company Aldata.

Lorton Data, a full-service licensee of the U.S. Postal Service, analyzes and enhances data to improve direct marketing efficiencies. By acquiring Aldata, with which it has worked for 20 years, Lorton will be able to offer its clients more than 65,000 lists in over 220 consumer and business classifications available through Aldata, as well as list segmentation for testing and profiling.

Privately held Lorton did not release financial terms of the deal.

Straight North acquires Whoast

Straight North, an integrated marketing communications agency, announced the completion of its acquisition of Whoast, a search engine marketing and Web development company based in Chicago.
Whoast’s technology and staff will be integrated into Straight North’s operations. Financial terms of the deal were not disclosed.

http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090604/FREE/906049991/1078/newsletter011

Archway acquires Resolve's supply chain management division

Marketing operations management company Archway has agreed to acquire the supply chain management division of Toronto-based Resolve, a competitor in outsourced sales chain operations and fulfillment.

The asset sale is scheduled to close on June 30, 2009 and will provide net proceeds to Resolve of approximately $22 million, which will be used to pay down existing company debt. The transaction will see Archway acquiring all of Resolve's SCM operation assets including client contracts, eight American locations and five Canadian locations, as well as the approximately 800 employees currently servicing the business for Resolve. The transaction does not include Resolve's Saint John, NB, supply chain facility, which is focused on Coupon and Rebate processing, and will continue as an important component of Resolve's operation.

http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090529/FREE/905299991/1078/newsletter011

http://finance.yahoo.com/news/Resolve-Announces-Sale-of-ccn-15356143.html?.v=4

21 Watertight Laws for Intelligent Advertising Decisions

In June 2009, a landmark issue of the Journal of Advertising Research will showcase 21 papers on what is currently known about advertising. Guest Edited by Dr. Wind and Dr. Byron Sharp, Director Ehrenburg-Bass Institute, this valuable collection of knowledge will help marketers navigate the tremendous changes in the advertising environment and enable them to better predict the future through a deeper understanding of what has been seriously proven about advertising. The findings cover fundamental areas of marketing activity such as ROI measurement, 360 degree media planning, and the value of TV and creative execution – and also new actionable insights on what to do in recessionary times and the impact of DVRs.

Some marketing myth-busting found in ARF's batch of studies:
Each 1% increase in advertising produces a roughly 0.1 point change in sales or market share. As a result, an optimal ad budget is about 10% of gross profits. That rule doesn't necessarily hold for all marketers (it would, if followed strictly, have Procter & Gamble cut its global ad spending by half or more). More effective advertising, or ads for new products, produce as much as 250% greater lift than average and justify correspondingly larger outlays.

Store redesigns and other factors that make it easier and faster to shop actually increase purchases, contrary to the old strategy that making things hard to find boosts sales by making people spend more time in the store.

Though most campaigns cluster ads in a short period of time, consumers retain information better if it's spaced out over longer intervals.

Obvious branding works in ads. The more often a brand appears in a TV ad, the more likely consumers are to remember what brand it was for.

But obvious brand placements in TV shows are more likely to backfire. They're better remembered, but more likely to be remembered negatively. Even brand placements consumers don't consciously remember, however, can have a favorable impact on brand awareness and attitude.

http://adage.com/article?article_id=136993
http://www.thearf.org/assets/feature-data-21-mythology-0