Display Ad Business On the Rise

Advertising companies that use display ads have seen an increase in sales over the last six months. Kantar Media estimates display advertising grew 14.6% in 2011’s first quarter. Researchers attribute the rise of display advertising primarily to the growth of college sports tournaments and the high demand of advertising from the automotive industry. I believe that such advertising is a saving grace for struggling industries like the automotive and traveling businesses. I also feel that display advertising could be the future for the music industry to promote new releases.

It is time for a new model to market artists. For example, if a record label purchases a display ad and the consumer clicks on the ad it will direct them directly to that specific artists music content. This will eliminate a lot of searching and unnecessary typing to find information on your favorite artists. Another concept that could be leveraged through display advertising is breaking news display ads. What I mean by breaking news is a news company could purchase a display ad that flashes all of the current news their target market subscribes to. Say for example if the target market enjoys up to date news in the music industry, that particular music news company could provide news to the consumer through display ads. This not only gives the consumer what they want but also at the same time markets the company through display advertising.

I feel that the days of advertising in magazines and T.V. commercials are becoming obsolete. In order for companies to take full advantage of advertising they locate where the target market is going. We currently live in a world where the majority of consumers spend a large amount of time on the Internet and marketers are finding out that the easiest way to reach the target market is through a computer. I think in the next ten years print ads will no longer exists.

http://huguesrey.wordpress.com/2011/06/13/display-ad-spending-jumped-14-6-in-the-first-quarter-report/

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Digital Marketing In the Music Biz

Over the last decade the music industry has taken on a different approach when it comes to marketing music. With the emergence of social media most major music labels are marketing their artists through familiar social media sites such as Twitter. We live in a day and age where the consumer wants the product quick and easy. Social media outlets have allowed record company’s to take full advantage of this concept. I can remember growing up and the only way you could find out if a new artist was coming out was by word of mouth or inside of a popular music magazine or T.V commercials. Now you rarely see a commercial for new artists and music magazines are going under because magazines are coming out online.

Digital marketing in the music business is a hustle. Fans want what’s authentic, relevant, and personal. I feel artist don’t need the label to market their music anymore. With everything being on the Internet all the artist has to do now is find a social media community that accepts him or her in and take advantage of the opportunity. It is much easier to make your way into the industry than before in the “golden era of music”. Before artist had to have talent first and image second. Now the artist can have little or no talent come up with a gimmick and a good marketing plan and be able to sale units.

The days of street promotion and driving from state to state, store-to-store selling records are gone. Technology and Social Media have rewritten the business model for the music industry. This new model is something that has hurt the industry in the short term but I think now that the consumer and the labels are learning how to adapt to this new way of distributing music in the long run the music industry will see the benefits of the digital era.

http://hbr.org/product/nettwerk-digital-marketing-in-the-music-industry/an/510055-PDF-ENG

The World's Most Marketable Athletes

I decided to do come up with my own list of who are the world’s top three marketable athletes. Marketable does not necessarily mean best because it is difficult to compare who is the best athlete when there are so many competing in different sports. I feel the most talented athlete in the world could have a hard time selling ice to an Eskimo. The list that I am going to come up with is based on my opinion of who can generate the most marketing dollars for a company if they signed a endorsement deal with the company today. I think the first thing a company should look at before signing a major athlete to an endorsement deal is the long term potential the client can offer.

Over the last two years the name Usain Bolt caught many peoples attention. Mostly because he is the fastest man in the world and at the same time his last name Bolt is catchy. I feel that companies can use him to sell products based on those two factors. The next athlete I feel could generate marketing dollars for a company is LeBron James. LeBron James is arguably the best basketball player in the world so with that title attached to any product is a plus. James has endorsement contracts with Nike, Sprite, Glaceau, Bubblicious, Upper Deck, McDonalds, and Audemar Piguet just to name a few. The only down side to having LeBron attached to your product is the decision he made to leave the Cleveland Cavaliers and sign to the Miami Heat. Many people didn’t like the way LeBron left the organization and might not buy your product based solely on his decision to leave. But overall signing LeBron James is a win-win for any company. The final athlete on my list is David Beckham. I feel that Beckham has the charisma necessary to sell products and at the same time he is one of the most talented soccer players in the world. By signing David Beckham to your company you are gaining exposure to your product because soccer is the most watched sport in the world. Therefore, I like to call Beckham a global sponsors cause soccer is watched globally.  My honorable mention athlete is Tiger Woods. Even though Tiger had his sex scandal I still feel he has the potential to help sell products. Tiger Woods has a million dollar smile and for the past dozen years he has dominated the sport of golf. He has the ability to relate to a company that has been through tough times and is on a come back. 

Tiger Woods and Mark Steinberg Both Leave IMG

On June 6, 2011 Tiger Woods broke the news via Twitter that he’d be severing ties with his agency IMG, to follow his current agent Mark Steinberg who left IMG to try out other options. It seems that IMG really wasn’t broken up about the departure of Woods. There have been whispers in the golf world that IMG was happy to get Tiger Woods of its roster because of all the drama he has brought to the agency since the sex scandal. The agency has moved away from representation and more in the direction of more profitable entities like broadcasting rights and building sports leagues in other countries like India and China.

I feel the decision that Tiger made to leave the agency with his agent was a smart choice. It is time for Tiger to move on to new things in his life. The only wrong move Tiger can make right now in his career is to continue to do the same. He has been with IMG his whole career and right now he has hit a couple of speed bumps and needs to get over them. I think both Tiger and Mark can form a partnership and build their own super agency.

Mark Steinberg handled Tiger Woods career and image with expert quality during the sex scandal, and I think that is why Woods is staying with Steinberg. Even though the scandal hurt Tigers image and endorsements, Steinberg did what he could do to save what was left of Tigers image and that’s what a good agent is suppose to do. I think it will be interesting to see if Steinberg will join another agency or open up his own to compete against the major agency’s in the business. Either way it goes Tiger Woods will always be a cash cow when it comes to sponsorship and endorsement income. So wherever the team ends up both sides win.

ESPN and FOX Join Forces

The sports television rivalry between ESPN and FOX network came to an end when both of the networks decided to join forces and go against Comcast for the bid on the PAC-10 college football broadcast rights. Comcast thought they had a lock on the rights with a $225 million bid until ESPN and FOX joined forces to outbid Comcast with a $250 million dollar bid that couldn’t be matched. I feel that this is important because it shows America that big companies are able to put aside egos and greed to get something bigger accomplished. According to the PAC-10 commissioner Larry Scott, "I think it became clear that they weren't going to be able to prevail separately, so they came up with the idea of going it together," Scott said. "Normally, if you're a content owner, you'd be opposed to reducing the field of competitive bidders. But knowing the strength of this opportunity, we embraced it. We thought it could be the best of all worlds."

ESPN and Fox used an excellent strategy to land this deal. By the two networks joining forces they will be able to alternate showing PAC-10 games, and share the revenue equally. This deal is also good for the PAC-10 conference since the conference only made $60 million in media rights this past season. With the new deal the conference is looking to more than double their profits from last season. According to the NY Times, “it is the richest conference deal. The Pac-10, which is expected to announce the agreements Wednesday, is following the media model of the Big Ten Conference, which in 2007 created its own network and negotiated a 10-year, $1 billion deal with ESPN.” I feel that in the future we will see more networks joining forces to land large broadcasting rights.

http://www.sportsbusinessdaily.com/Journal/Issues/2011/05/09/Media/Pac-10.aspx

http://sports.espn.go.com/ncf/news/story?id=6471380

http://www.nytimes.com/2011/05/04/sports/04sandomir.html

2004-2005 NHL LOCKOUT

The 2004-2005 NHL lockout was a lockout that resulted in the cancellation of what would have been the NHL’s 88^th season.  It was the first time since 1919 that the Stanley Cup was not awarded in a season. This was the first lockout that canceled an entire season due to labor disputes in major professional sports American history. This lockout is similar to what the NFL is going through now. In the 2002-03 NHL season the NHL owners lost $273 million dollars due to player salaries. NHL owners spent about 76 percent of their gross revenues on players’ salaries.

I feel when a league goes through situations like lockouts it affects the way the fans look at the game. Me being a NFL and NBA fan if either league decided to go into a lockout it is going to sway my judgment on spending $90 for a ticket.  Many experts say that the NHL lockout hurt the sports popularity in the United States.  According to Couch, “I don’t think the sport has ever recovered from that, ” said Boland. “While the sport has made the revenue back, I would argue it’s a regional sport."

The only point that these owners have is that the players are making larger salaries than they should be making. I feel that a slight rollback on the player’s salaries is needed, but only a slight rollback, nothing over 20 percent. Another solution to these labors disputes could be having the minimum salary for rookies to be lowered. If an owner is spending millions on a rookie contract this doesn’t allow him to have the flexibility to compensate the veterans of the team.

I feel the NHL handled the lockout in a good manner, and by doing this it helped their league in the long run. The league was able to make some rule changes and present the league as if it was a new sport. The rule changes made the sport faster and higher in scoring, and fans rushed to the arenas to support their favorite sport. Another positive that came out of the lockout is that the NHL was able to sign a lucrative broadcast agreement with a major television network. Overall, I think other leagues can learn from the NHL and try and turn their crises into a good situation.

http://www.csmonitor.com/Business/2011/0311/Five-worst-labor-disputes-in-sports/2004-2005-NHL-lockout-Sept.-16-2004-July-19-2005

http://www.cbc.ca/sports/indepth/cba/

Golf Ball Patent Dispute Acushnet Golf vs. Callaway

            In this blog I will be discussing the patent dispute between Acushnet Company and Callaway golf. Callaway golf filed a lawsuit asserting that Acushnet’s Titleist Pro V1 golf balls infringed on four Callaway patents. This lawsuit has been going on for more than five years and finally the U.S District Court provided its final decision in favor of Acushnet Company. But originally the courts decided in Callaway’s favor in December of 2007. The Pro V1 golf ball is the most recognized golf ball in the golf industry and I feel that it will always be some kind of dispute over a company taking another company’s patent on a golf design because there is only so much you can do with golf equipment. So even if it is not the exact same design the human eye cannot tell the difference between the two.

            The Pro V1 golf ball has generated over $1 billion in sales and I could see why there would be a dispute over the patent. I believe this is a rare situation where both companies were developing the same product at the same time. Once both companies figured out one another were creating the next big thing in golf technology they both rushed to get a patent done and Acushnet beat Callaway to the punch. According to Golfdigest.com, “Acushnet said it received its first patent covering this technology on March 3, 1999 while the oldest of the four Callaway patents at issue was not filed until December 12, 1999 and issued on March 15, 2001.” Since the court has made its final decision on this dispute I feel that Callaway will now file some sort of civil dispute and a monetary settlement will be made between the two companies.

Anderson, Charis (2011) http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20110422/NEWS/110429973/-1/NEWS10

Johnson, Michael Stachura, Mike (2007) http://www.golfdigest.com/golf-tours-news/2007-12/20071214callawaylawsuit

Golf.com (2011). http://blogs.golf.com/equipment/2011/04/acushnet-says-pro-v1-patent-dispute-with-callaway-closed.html