The most recent evidence, a report released this morning from ad network aggregator PubMatic, shows that the price of the online advertising inventory it tracks has increased 35% since the beginning of this year, when it had reached its low point. The study, which is based on the month-to-month tracking of ad price data compiled from more than 6,000 publishers that utilize networks and ad exchanges affiliated with PubMatic, indicates that online display ad prices still more than 10% lower than they were in June 2008, the baseline month tracked in the report, but they have growing steadily each month during 2009, and jumped up 15% in the last month alone

“Online ad pricing is turning the corner, possibly leaving the worst days behind us,” the report concludes, predicting that, “ad pricing may continue to rise throughout the remainder of 2009.”

Importantly, the PubMatic report also shows that advertising sold through “indirect channels” such as networks and exchanges has been growing at an even faster rate - up 47% since January - indicating that the rapid growth of the new sales channel is not, as many publishers fear, commoditizing the price of online display ads, but is finding a new market for their unsold advertising inventory.

A similar picture appears to be emerging in the marketplace for pre-roll video advertising inventory, according to a new quarterly update released by online video advertising network BrightRoll. The report, which is based on BrightRoll’s internal data for the second quarter of 2009, shows that the average cost of a pre-roll ad unit is up 3.1% vs. the first quarter of 2009.

But don’t pop the pre-roll champagne corks just yet, says BrightRoll Founder-CEO Tod Sacerdoti. He notes that second quarter prices for pre-roll video advertising still are down 10.4% from their year-ago levels in the second quarter of 2008, when everything was looking rosy for the online video advertising marketplace.

Of even greater concern, he says, is the fact that “early third quarter data suggests pricing will continue its downward trend.

“As we have stated previously, we believe this downward pattern is inevitable, but good for the category, as lower rates bring in larger budgets and more total dollars, and pricing is often stated as the most significant issue facing the video advertising business.”

That’s one way of looking at it. And to back up his point, Sacerdoti notes that overall advertising revenues for online video are up 217% between the first and second quarters of this year. He predicts it will rise 50% to 100% for the entire year based on increased volume, even thought prices may continue to fluctuate during a down economy.

The PubMatic and BrightRoll data, of course, are snapshots of a larger online and general media advertising marketplace that has experienced its worst recession since the dot-com bust of the 2000, and maybe since the Great Depression. More time and data will be needed before an official turnaround can be declared. But indications from an every-other-monthly tracking study on the ad spending plans for key media decision makers from marketers and advertising agencies suggest that their level of optimism has turned the corner and that most major media are on the optimistic side of the ledger sheet, and are continuing to improve, especially online and mobile media.

The most recent Advertiser Optimism Report from Advertiser Perceptions Inc. shows that well more than half of all ad executives plans to boost their ad spending for online display, online search and mobile media over the next six months.

Written by Joe Mandese, originally posted on www.mediapost.com

1. Under Partly Cloudy Economic Skies, NBA Playoffs Begin in Earnest

As the Cavaliers have dominated the Pistons—at least so far—discussion about the economy and the economic outlook for next season and beyond dominated the NBA Board of Governors meetings last week and are sure to provide a backdrop throughout the NBA Playoffs as well. NBA Commissioner David Stern projected an air of optimism as he noted that league revenues, although slowed this year, should be up 1% to 2% for the season, with projected league growth at 5% to 7% overall. “Our prospects, leaving aside the unknown of the economic and financial condition…are terrific, and we’re going to work together with our players to come up with a model that makes it more profitable,” Stern told the national media assembled at the meetings, adding later that the image of the league is “on a complete uptick…our players’ reputations are so much better than they were five or six years ago.” Stern and league officials indicated that all the economic data they’re collecting will be a key element of the package they’ll deliver to the NBAPA this summer as reference points for negotiations on a new collective bargaining agreement.

Seemingly compatible chatter at the Portsmouth Invitational NBA pre-draft tournament also indicated that to contain costs for the upcoming season, some teams might limit their roster to 13 players, and that the NBA is considering adopting the D-League’s “pick-your-opponent” playoff format. The plan would increase the importance of the regular season as well as create an exciting selection process.

For the moment, however, teams are resigned to a traditional seeding structure, and aside from a pretty cool “chess” ad campaign on TNT featuring various NBA stars and a bunch of hobbled Celtics, the 2009 playoffs are startlingly similar to the 2008 edition.

Consider the Los Angeles Lakers, gunning for the title that eluded them last year yet dominant in almost every way. According to NBA data, the franchise’s season ticket renewal rate is close to 98%, despite their charging the highest prices in the league, with an average ticket price of $93.25. And this season, according to Nielsen, an average of 267,000 L.A. households watched each Lakers game, 67% more than the Dodgers on their local affiliate and nearly three times the average viewership for college football—including powerhouse USC.

More broadly on TV, the NBA is expanding its League Pass Broadband internationally for the first time during this postseason, offering live streaming of the NBA playoffs to 100-plus countries at $29.95-$39.95.

NBA.com is also unveiling a new site design to coincide with the start of the playoffs. One the page’s main features will be a video section dedicated to Charles Barkley, “The Barkley Zone,” and Chris Webber’s “C Webb’s Fab Five.”

Finally, teams hoping to have their players selected for NBA awards are sending gifts to voters. The Bulls sent out “Derrick Rose Colored Glasses” to draw attention to the point guard’s ROY-caliber season, while the Heat gave MV3 T-shirts in honor of Dwyane Wade.

2. NBA Marketing MVP Showdown: The King vs. the Black Mamba

According to no less an authority than the Harvard Business School, as reported by CBS’ 60 Minutes, Cleveland Cavaliers forward “King” LeBron James is now the third-biggest name in the sports world, trailing only Tiger Woods and David Beckham, with 2008 earnings on and off the court of $40 million.

Cleveland coach Mike Brown now has Coach of the Year honors wrapped up, but James and Laker standout Kobe Bryant continue to battle for the title of on-court MVP. Off the court, it’s clear James is ahead in the race for marketing dollars, but Bryant is closing fast.

Both came to the NBA straight out of high school. Just months after being selected “most likely to succeed” in his high school class, James signed a seven-year, $90 million endorsement deal with Nike—the biggest deal ever signed by a basketball player. Contracts with Coca-Cola, Vitamin Water, Upper Deck, and Bubblicious bubble gum have helped build a marketing portfolio that James intends to use to help him become the world’s first billion-dollar athlete; his endorsement income alone in 2007 totaled $25 million.

James also has appeared in commercials, on the covers of Vogue and GQ, and in a documentary about his high school career titled More Than a Game, due out this fall. Another key indicator for an NBA star: James’ shoe tally with Nike comprises six signature shoes and four additional styles.

James’ total endorsement contracts are $10 million more than those of Bryant, the NBA’s next-highest earner. Bryant’s 2007 endorsement income was estimated by Forbes at $16 million. Despite a 2003 sexual assault case for which charges were dropped but at the time frightened sports marketers away, he has since inked multimillion dollar endorsement deals with Nike and Coca-Cola and last month announced that he had teamed up with Spanish-born watchmaker Ivan Castro to sell a line of high-end Swiss watches for Nubeo under his nickname, Black Mamba. (The MVP version will set you back $285,000.) Bryant was also the cover athlete for NBA ‘07, appeared in two stunt viral videos on YouTube for Nike that got more than 4.5 million hits each, took the Guitar Hero World Tour commercial stage with Tony Hawk, Michael Phelps, and Alex Rodriguez, and is featured in a reality TV show in China, the Kobe Mentu show. Bryant’s shoe count with Nike is at four, and rising. His NBA Championship count, until June, is TBD.

3. 2009 NFL Draft: Tube State of the League

During this weekend’s NFL draft, the NFL Network will assume a more prominent role than in years past. It will report live from inside the San Francisco 49ers and St. Louis Rams draft headquarters on Saturday, Apr. 25, according to SportsBusiness Journal. This will broaden fans’ options beyond the seemingly endless ESPN coverage from New York’s Radio City Music Hall.

Television rights and carriage issues and the just-released 2009-2010 NFL schedule dominate sports headlines and NFL executives to-do lists these last days leading up to the draft. Top of those lists has to be celebrating the recent agreement between Dish Network and NFL Network, which calls for Dish to continue carrying the NFL Net on their Classic Silver 200 programming package. The agreement resolves a year-old dispute that stemmed from the channel’s decision to simulcast the December 2007 Giants-Patriots season finale.

DirecTV also has renewed its deal with the NFL to serve as the exclusive satellite provider for out-of-market games. Signed through 2014, DirecTV will give the league $1 billion a year.

The agreements should provide some much-needed good news for the struggling NFL Network, as they abut FCC hearings last week on the Comcast-NFL Network programming dispute. No ruling is imminent, as a decision on that dispute could take several months, and Comcast can drop the NFL Network as early as May 1 unless the NFL makes some hasty concessions about carriage on Comcast’s sports tier.

As a small concession to cable subscribers, the NFL is offering Sunday Ticket’s Red Zone channel to cable providers with the hope of leveraging companies to provide NFL Network to subscribers. The league owned and operated channel is available in less than 40 million households.

Looking ahead to the fall schedule, the defending Super Bowl champion Pittsburgh Steelers, the Colts, Giants, and Bears form an exclusive NFL primetime broadcast club, with five appearances in prime time each. The Dallas Cowboys, courtesy of their new $1.1 billion stadium, do those teams one better, with an NFL-leading six nationally-televised games. The Cowboys will unveil their new stadium in Week Two, hosting the Giants on NBC. The Jets will have the honor of hosting the last regular-season game held at Giants Stadium when they welcome the Bengals on Jan. 3. The NFL reports that computers generated about 1.3 million possible league schedules for the season; 3,500 were considered by staff in conjunction with the league’s broadcast partners.

In not-so-good broadcast TV news, NBC is claiming it lost $45 million on its Super Bowl XLIII broadcast “despite monster ratings and a record $206 million in ad sales,” according to the New York Post. It’s true then—the NFL is going down the tube.

4. 2009 NFL Draft: The Players and the CBA

NFL players are prepared to make playoff compensation part of the upcoming CBA negotiations. A telling issue facing new NFLPA Executive Director DeMaurice Smith in the CBA talks will be playoff pay, as players get paid a “fraction of what [they] got paid during the season,” according to a Sports Illustrated report. Sports Illustrated revealed in its story that New England Patriots quarterback Tom Brady made $33,529 per postseason game he has played, almost 1/30 of what he makes per regular season game.

Says Kansas City Chiefs and former Patriots linebacker Mike Vrabel: “In the postseason, obviously, you’re playing for the championship, the will to win, the love of the game. But the reality is that the most valued part of our season is when we’re paid the least by far and when the injury risk is greatest. It’s a fine line we walk as players.”

5. Tom Hicks in Default?

Days ago, it was revealed that the MLB Texas Rangers and NHL Dallas Stars owner Tom Hicks’ sports holding company defaulted on a $10 million quarterly interest payment on Mar. 31. The default notice begins a process that could eventually put banks in charge of both teams, although it would not affect his co-ownership of EPL club Liverpool.

According to The Wall Street Journal, creditors to Hicks Sports Group (HSG) have “declared the company in default, a measure that could eventually dislodge” the teams from Hicks’ control, and further, that the default notice is “the strongest sign yet of the economic perils awaiting the country’s professional sports leagues.” It said a group of 40 financial institutions and other investors hold $525 million of HSG debt, led by New York sports-financing group Galatioto Sports Partners with close to $100 million.

An HSG spokesman said that the two teams are “unable to fund both their operating expenses and debt service;” Hicks had apparently been funding operating expenses out of pocket for some time and put a halt to the practice. A complete foreclosure could not happen for at least 180 days; Hicks is meanwhile attempting to sell minority stakes in both teams and recently confirmed that he will be taking $20 million off the Rangers’ payroll for 2010.

6. Premier League: Divisible by Two?

Hicks’ English Premier League club Liverpool may soon have other economic forces affecting it. According to the London Daily Mirror, Phil Garside, chairman of EPL club Bolton, has put together plans for an EPL second division that would make the vaunted British league look a lot more than the NFL, with its AFC and NFC partition. The new format calls for two 18-team divisions of the EPL, requiring “promotion and relegation of two clubs between the divisions.”

Fourteen of the 20 EPL squads will have to vote in favor of the proposal to move it forward; England’s Football Association (FA) also would have to weigh in. The Mirror says the EPL’s top four clubs—Manchester United, Chelsea, Arsenal, and Liverpool—are likely to vote against the plan, as it would affect their revenue distribution. Scottish clubs Celtic and Rangers would reportedly be asked to join Premier League 2.

Meanwhile, several international banks are set to take over EPL club West Ham United after the Icelandic bank that provided much of the club’s financing was declared effectively insolvent. Until the team is sold, any spending or player acquisitions will have to come from revenue generated by sales.

7. Wealthiest Augusta National Members

One of the world’s most exclusive golf clubs was on the international stage last week, as Augusta National played host to the Masters. At any given time, Augusta National has a list of approximately 300 members, a who’s who of the business world. A 2004 USA Today list is the most recent documentation of who the members are. Based on 2008 figures, here are the five wealthiest:

5. Charles Johnson (Franklin Resources) $4.9 billion
4. Stephen Bechtel Jr. (Bechtel) $5.5 billion
3. Riley Bechtel (Bechtel) $5.5 million
2. Warren Buffet (Berkshire Hathaway) $50 billion
1. Bill Gates (Microsoft) $57 billion

8. Oscar de la Hoya Retires, Will Boxing get KOed?

Will the legacy and stellar business platform laid down by Oscar de la Hoya during his 17-year pro boxing career sustain the sport in another golden age or will it go down like a dumbstruck rookie in the ring after de la Hoya announced his retirement last week? Thanks to de la Hoya, the near future, at least, is looking golden.

Since turning pro in 1992, de la Hoya has pretty much carried his sport. At 36, he has had 45 pro fights, won 10 titles in six weight classes, and been featured on a record 19 Pay-Per-View fights and record 32 HBO fight telecasts. The biggest revenue generator in boxing history, he has cornered just under $700 million in PPV revenue and 14.1 million buys, which does not include his other 26 professional bouts, or all the other monies “the PPV fights generated from ticket sales, sponsorships, foreign television rights, and other revenue streams,” as ESPN puts it. He hit his prime as the Latin market was becoming more of a focus for the sports industry and opened the sport to female fans.

Now, de la Hoya will presumably turn his attention full time to his Golden Boy Promotions, of which he is president. A maturing company, Golden Boy boasts in its stable many promising young fighters and has next on its card the May 2 Manny Pacquiao-Ricky Hatton fight at the MGM Grand in Las Vegas. Together with HBO and Top Rank, Golden Boy has put together a massive multitiered, multimillion dollar marketing plan for the event. The goal of the plan is to sell one million PPV buys, much of it via digital technology platforms.

9. Corey Surrency and Eligibility

According to a little-known and unenforced NCAA rule, if an athlete participates in organized sports after his 21st birthday but before enrolling in college, he loses a year of eligibility for every year he participates in the given sport. Just like that, Corey Surrency’s career as a Florida State WR is gone, faster than you can say Chief Osceola.

If you haven’t heard by now, the NCAA denied Surrency’s appeal for an extra year of eligibility. With his scholarship taken away, so are Surrency’s dreams of being the first person in his family to graduate from college.

The NCAA has a longstanding tradition of sticking it to players. Remember Jeremy Bloom? The Colorado Buffaloes WR/PR was ruled permanently ineligible because he had a part-time job as, oh, an Olympic skier. How about former NBAer Keith Van Horn? And did you know that the Utah Utes were placed on probation for, among other things, head coach Rick Majerus buying his star forward a meal after telling the kid his father had died?

Florida State is appealing the original decision, and a verdict is expected within the next three to five weeks. But if the NCAA upholds the ruling, it’ll be taking more than just a season of college football away from Surrency. They’ll be taking away any chance he has for a legitimate future. It is no secret that teams illegally recruit and that players illegally receive gifts, so go after them, not the Olympian, or the grieving, or the kid who just wants to graduate from college.

10. Best Professional Sports Cities to Be a Fan

Forbes recently released its list of the most miserable professional sports cities in America, and as interesting as the list was, it was quite the downer. Here is my list of the five best professional sports cities in which to be a fan. The criteria for this list include recent performance, championships since 1990 (sorry Yankees fans, you don’t deserve credit for World Series teams led by Babe Ruth or Yogi Berra), and off-the-field factors that make fans smile.

5. Miami. Miami may not have the best fans, but it sure is a good place to be one. Since 1990, the city has two new franchises (Marlins and Panthers), built three facilities (including the recently approved Marlins stadium), and won two World Series and an NBA Championship.

4. Detroit. If you don’t judge the city by the auto industry or the Lions, Detroit is a great place to be a fan. The Red Wings are the New York Yankees of the NHL, winning four Stanley Cups in the last 11 years, and the Pistons have had separate title runs in the last two decades. Comerica Park played host to the 2005 MLB All-Star Game, while Ford Field, one of the NFL’s gems, was home to this year’s Final Four.

3. Chicago. Michael Jordan is singlehandedly responsible for six of the city’s seven crowns (eight if you count the Chicago Fire’s 1998 MLS Cup). The White Sox’ 2005 World Series title was its first in 88 years, and although the Bears lost Super Bowl XLI, the recent acquisition of Jay Cutler gives fans a reason to hope. The Blackhawks are on the upswing, and the longer the Cubs lose, the more people love them.

2. Boston. Since 2000 no city has held more championship parades than Boston. The Patriots are three-time Super Bowl champs, the Celtics have returned with their 2008 NBA title, and the Red Sox snapped the pesky “Curse of the Bambino” that haunted the franchise from 1914 until 2004. The Bruins haven’t won a Cup since 1972, but could this be their year?

1. New York. Titles aside (its seven since 1990 ties the city with Chicago for the most), New York has all of the intangibles you would want from a sports town. New Meadowlands included, New York is home to three of the four most expensive stadiums in the country. The Big Apple has it all, from the NBA and NFL drafts to All-Star games. One thing in particular that gives New York the edge in this poll is options. Yankees-Mets? Giants-Jets? Rangers-Isles? You decide.

Written by Rick Horrow and Karla Swatek, originally posted on www.businessweek.com

You have probably observed that trust is eroding in both traditional and new media forms of marketing. People simply don’t believe what companies say about themselves anymore. Meanwhile, people do believe what others say about those same companies and their products. Those others include the people in the media, experts and celebrities, friends and family. The beauty and the essence of buzz marketing, when done correctly, is that it puts people you know at the center of the equation. Latest research shows that around 70% of Americans rely on the advice of others when selecting a new product or service.

Buzz marketing is a new and different animal in the PR arena. It will continue to evolve because PR people are beginning to recognize the value of buzz.

In order for the media and other people to get a buzz going about companies products and services, PR teams need to give them information they need to spread the word and provide it in a format that is easy to digests and easy to understand.

To get the buzz going, good PR will focus its attention on the “opinion leaders” or “hubs” in the world of its market. There are four kinds of hubs and the common denominator among them is that people listen to them. There are:

Regular Hubs

Regular hubs are individuals who serve as sources of information and influence in a certain market. The people they connect with trust them and listen to what they say. Unlike big-time experts and celebrities, regular hubs are easiest to reach.

Expert Hubs

Expert hubs are individuals who go beyond making recommendations. They are experts and specialists on a particular topic, and people listen to them because of their expertise and credentials.

Social Hubs

Social hubs are individuals who are charismatic, socially engaging and trusted by their peers.

Mega Hubs

The media, celebrities, politicians and other really big names make up the mega hubs. These people stand out because they are connected to millions of people.

Tracking the buzz when it happens is important and one can do that easily on the Internet. One way to track what people are saying about companies and individuals is to set a Google Alert or Yahoo Alert. Yahoo also offers a free service called the Buzz Index (buzz.yahoo.com) , which proposes to measure public engagement with brands. Yahoo Buzz tabulates buzz by counting the number of people searching for a topic on a given day, dividing by the number of users visiting Yahoo that day and multiplying by a constant factors. This gives users a good idea of interest in their brands, competitors’ brands, the effectiveness of buzz marketing campaign, etc.

Thanks to a rock-solid process and countless hours spent brainstorming with clients, a creative strategy emerges and is then handed-off to designers and developers who are then expected to perform miracles. Construction begins but deadlines start to slip as content undergoes countless rounds of review by committee after committee until the final product is rolled out to the public with great fanfare. Using traditional PR-tactics, journalists are phoned, committee-written press releases start flying into email inboxes, and television ads start flooding the airwaves. This PR-blitz puts enormous smiles on the clients’ faces by displaying one’s marketing savvy, and strategy-driven application of the “Big Idea”. The same “Big Idea” that everyone had lost focus of and which only has relevancy while the PR-campaign is in full-swing. Following the conclusion of the campaign and the public’s realization that there is no intrinsic merit to the “Big Idea”, interest is soon lost and the Flash-intros and useless eye-candy ignored in favor of more compelling content.

Yet, despite the pervasiveness of the Internet and it’s ever-increasing dominance in our modern lives, there are still numerous individuals — who are often powerful decision makers — clinging firmly to the “build it and they will come” philosophy of the early Web. As is shown by the popularity of blogs and the communities centered around them and their authors, Web site development and other online initiatives need not be tied so tightly to a campaign or a product launch. Web sites should stand on their own and provide information — real information, not PR spin. Users are looking for content that is useful, informative, and compelling, and sites that are simply pitching the latest FDA-approved drug — or which are hastily thrown up in response to a corporate crisis situation — will not provide the traffic needed to survive, let alone get any messaging out to the public. Without relevance, any and every site is doomed to die. Without honesty and relevance, a Web site becomes a target and once the Google bombing campaign, denial of service attacks, and blogosphere decide to strike, there often is little hope that “traditional” PR or marketing tactics can ever hope of changing the public’s perceptions. Assuming that an official statement on an officially-sanctioned Web site has any more weight or authority with users than the other results appearing at the top of a Google or Yahoo! search, shows naivete on both the part of the client and their counselors.

Marketers and PR professionals need to aim for transparency and honesty in their information and strategies and successful PR campaigns are no longer based upon the tired, old press release and other official statements. In terms of ROI, the time to taken writing, revising, and approving a single press release which then must be marketed to journalists (who may have absolutely no interest in what you are discussing) is nowhere near as valuable as leveraging solid relationships with blogs and their authors, who possess an established “trust-factor” with their audience, and are key to influencing opinions. Scientifically unproven or brazenly untrue claims and hype will quickly be outed by users across the Internet, adversely affecting the reputation of you and your clients. Flooding the Web with press releases or trying to generate buzz with a risky viral marketing ploy may garner some short term buzz and interest but their effectiveness is fleeting and oftentimes ignored.

Reliance on artificial tactics such as dishonest search engine optimization techniques, astroturf campaigns, the seeding of misinformation, and the deliberate exploitation of blogs and bloggers only serve to reinforce the overwhelming distrust and negative opinions of PR-practioners which, in turn, leads to suspicion of our clients. Instead we should focus our attentions on getting to know who our audiences are and provide them with current, compelling, and topical information that exhibits our faith in them as influencers and brand advocates. Using statistics and research, specific audiences can be reached via targeted messaging yet no amount of demographic data can ever hope to promise what is gained through strong personal relationships. Communities are based on the interactions between, and open communications amongst, humans.

When developing an online PR strategy, it is no longer possible to ignore the cultures and communities that have evolved as the medium has matured. We must forgo the ill-gotten gains and short term glories of dishonest manipulation and focus our attentions on the long-term rewards inherent in a reputation of ethical responsibility and accountability built on community respect. Flooding users inboxes with thousands of email newsletters, pitching to bloggers while ignoring their individuality, and attempting to actively deceive the public should not be the methods built-in to an online strategy. Reputation management and relationship development are the keys to effective communications — and effective communications is essential to avoid further alienation from the community.

Author: Anthony Parcero

Stroll through the C-suite at many companies, and it’s an easy bet which executive is a dead man (or woman) walking: the chief marketing officer. CMOs last 26 months on average these days, says recruiter Spencer Stuart, vs. 44 months for CEOs. In the past few weeks, CMOs at Chico’s, Home Depot, MySpace, and Rite Aid all have left their posts after short tenures.

The CMO job is a lot more complicated and arduous than it was just a few years ago. And that, say recruiters and CMOs, helps explain the high turnover. At a time when marketers are faced with a bewildering array of New Media options and consumers are better informed than ever, Wall Street-obsessed CEOs are increasingly impatient for a payoff. “CMOs are expected to deliver instant results,” says Mark Jarvis, Dell’s CMO since October. “It makes for a deadly cocktail of high expectations, resistance, and complexity.”

CMOs have always struggled to justify their existence. “You might be surprised how few people have strong opinions about what the chief financial officer or chief information officer is doing,” says John Costello, CEO of hearing-aid maker Zounds, who has been CMO at Home Depot, Sears, and Yahoo. “But CMOs have almost everyone second-guessing [them] and looking over their shoulder.”

FUZZY ASSIGNMENT

Chief executives understand that the CMO’s role needs to change to suit new circumstances, but few have figured out how to do so. “Probably 70% of the companies I work with don’t know what they’re looking for when they recruit a CMO,” says Patrick A. Delhougne, who headhunts marketers for executive recruiter Korn/Ferry International. Jeff Jones, who was the chief marketer at Gap for two years before leaving to run ad agency McKinney, says he discussed 22 CMO positions over five months. Not one, he says, spelled out coherently what he would be accountable for.

It’s not hard to see why companies are grappling with this. As recently as five years ago, the CMO’s role was much simpler. Chief marketers devised a brand message, hired an advertising agency to create clever ads, managed promotions, and then waited for their bonus or pink slip. “You would run a major ad campaign and trust it,” says Jim Speros, a veteran marketing executive who is currently CMO at Marsh & McClennan. But that won’t fly in a world where blogs, social networks, and cell phones are fast changing not just where ads go but how people shop.

It doesn’t help that chief executives and chief marketers often have very different imperatives. Building or even maintaining a brand is a long-term process that requires patience and incremental change. But CEOs operate at a time when investors fixate on quarterly or monthly results as never before.

Anne MacDonald, who became CMO at Macy’s (M) in February, 2006, wanted to move the brand upmarket. Doing so would take time and meant the retailer had to quit its habit of using discounts and promotions to hit monthly sales targets. It seemed like a great idea–till sales started slipping. Without those regular jolts to the top line, analysts began downgrading the stock. After 15 months, MacDonald left Macy’s. (She and the company declined to comment on her departure.)

Corporate bean counters, who have long deemed marketing a squishy discipline, increasingly are demanding data to prove that a CMO’s strategy is valid. One of the first things Cammie Dunaway did upon taking the CMO job at Yahoo! in 2003 was to hire a consultant to track return-on-investment for her marketing department. But Dunaway, who left to take the top sales and marketing job at Nintendo last October, says: “Your peers are always suspicious you have ordered up your own proof of accountability.” Her next move was to enlist Yahoo’s own CFO to handle the analysis. “When you have the CFO’s staff making marketing’s case, instead of trying to make your case to the CFO,” she says, “the credibility spreads fast.”

Few chief marketers understand the importance of being accountable more than James Farley. When he left Toyota Motor (TM) recently and joined Ford (F) as global CMO, Farley knew he’d probably fail if his job had no hard connection to monthly sales–every automaker’s report card. He also understood that Ford’s regional operating chiefs might fight global marketing strategies from a CMO with no skin in the game. So Farley asked CEO Alan Mulally to give him responsibility for sales in the company’s most difficult market, the U.S. That way, he’d be in same pressure cooker as his peers. Now, when Farley tries to globalize the Ford brand strategy, he’ll have more credibility. “Being accountable for sales in the U.S.,” says Mulally, “will make the team tighter.”

Even as the bean counters scrutinize their every move, CMOs are under enormous pressure to navigate a strange new world. Consider three typical workdays for Ted Ward, marketing chief at Geico insurance. Over 72 hours, he reviewed how many people had visited Geico’s Web site the previous week, how many were clicking on ads and then buying insurance, and how much he was spending on Web marketing. He met with his ad agency to fine-tune three separate campaigns. He strategized about the evolution of Geico’s Caveman Web site, the most effective ways to use social networking sites such as Facebook, and how deeply to venture into Web TV. It’s hard to choose marketing options, says Ward, “when the sands keep shifting.”

That’s why CMOs spend much of their time educating themselves. Marc Lefar, who was chief marketing officer at Cingular (now AT&T (T)) until leaving for personal reasons in April, knew he needed to get his head around a geeky marketing tool called search engine optimization (SEO). Now more important than Nielsen ratings, SEO is used to make sure a company’s site shows up as high as possible on search results. Getting this right can mean the difference between capturing a potential cell phone customer or losing him to a rival.

So Lefar sat down with wonks from ad agency Digitas for an intensive course on the mysteries of SEO. “The average 45-year-old chief marketing officer cannot possibly figure out what’s cool and what’s going to drive the business,” Lefar says. “You’ve really got to have an investment in your own education [to] keep yourself exposed to things out of your comfort zone.”

Lefar might have added that CMOs also must expose their colleagues to newfangled marketing techniques, and then get them to pitch in. Speros recently overhauled his company’s Web site, adding studies and research papers that showcased Marsh & McClennan’s varied expertise and, he hoped, would attract new customers.

To make the new site credible, Speros needed to get all the company’s divisions, from human resources consultant Mercer to security and risk shop Kroll, to help design them. Then he had to make sure that every employee who interacts with customers at panel discusions was adequately versed in the site’s contents. Speros had three months to get the job done and needed to coordinate teams around the globe. This new emphasis on intracompany diplomacy, he says, helps explain the 75-hour weeks and the 300 e-mails and 70 voice mails he receives each day. “It’s substantially more difficult [than in the past],” Speros says. “There’s a whole sell-in that you have to do across different departments. And that takes time.” Which is precisely what many CMOs don’t have.

Let the CMO Die
“Perhaps we should just call for the end of the CMO position,” Advertising Age editorialized on Oct. 29. “Put the job out of its misery. It isn’t really working anyway, is it? Let’s just divvy up the responsibilities among the chief sales officer, the chief information officer, the chief operations officer, and the chief financial officer. The CMO was having too much trouble trying to figure out how to get them to understand marketing anyway. And CEOs were having too much trouble defining the CMO role and making heads or tails of what the value was. At the very least, let’s change the title to chief maybe officer–as in, maybe he’ll stick around; maybe he won’t. Maybe her new initiatives will be well-received and move the needle; maybe they won’t.”

Same Old, Same Old
In a recent survey of marketing professionals, McKinsey found that while most respondents were experimenting with New Media, TV remained the most widely used vehicle. “Many continue with the tried-and-true approaches because the alternatives lack the scale to achieve brand priorities, and because the absence of a widely accepted measure of digital media makes it challenging to measure spending effectiveness. That’s why more than one-third of all respondents devote less than 10% of their marketing budgets to non-traditional media.”

Written by David Kiley and Burt Helm, originally posted on: www.businessweek.com

Dotcoms are no longer making news with free new offerings. Instead, headlines these days are all about lay-offs and new pay-for services. Does this mean that the free online lunch is over — again? Indeed, says The Economist, eight years after the dotcom crash, Web firms hoping to sell advertising against free content and services, find themselves in a familiar situation.

It all started when Google went public in 2004, inflating a new “Web 2.0″ bubble. Google’s ability to place small, targeted text ads next to search results made it an Internet juggernaut, and sparked new hope that there was indeed money to be made from online advertising. “The only reason it had not worked the first time around, it was generally agreed, was a shortage of broadband connections.” And so the pursuit of eyeballs began again, with a new crop of Internet superstars like MySpace, YouTube, Facebook and now, Twitter. Each provide free services that attract large audiences, but none of them have yet generated substantial revenue. But that’s OK, the thinking has gone, the same model worked for Google, after all.

Not so. As it turns out, The Economist says, the number of companies that can be sustained by Web advertising is much smaller than previously thought, and Silicon Valley may in fact be entering another “nuclear winter,” as Web companies start laying people off, scaling back, and shutting down. Read the whole story…