THE BEGINNING OF THE END FOR NET NEUTRALITY:  By far the biggest tech news from the short holiday week was the FCC’s release of a draft regulation which would officially eliminate Net Neutrality.  As a reminder NN creates an even playing field for all websites and apps by requiring the ISPs (Internet Service Providers) to transmit data at a level speed.  But with NN gone the larger ISPs like Comcast, Verizon, AT&T, etc., can create a multi-tiered system whereby publishers can pay a premium to have their content delivered via a “high speed data lane” while the smaller guys will be stuck in the slow speed lane.  As noted in the attached Washington Post article, the ISPs are promising to be on their best behavior and not degrade the user experience just to squeeze publishers for extra fees.  And we all know the big Cable and Telcos would NEVER put profits ahead of customer service, right?  Anyways, the FCC’s draft is in a formal review period now with an expected final vote coming before EOY.

APPLE’S SMART SPEAKER STUMBLE:  In a jaw-dropping move last week Apple announced that it would not have its Homepod voice-enabled smart speakers in market for the holiday season.  This was supposed to be Apple’s important counterpunch to Amazon Echo and Google Home in the exploding connected device sector.  RAIN has a really thorough assessment of how Apple missed the deadline and what the ramifications are in the attached link.  Apple was trailing out of the gate, but an aggressive Homepod launch this year could have helped them catch up.  To miss the Holiday’17 smart speaker sales cycle, which is expected to triple from last year, is a major blow to the company who used to define tech innovation.  I guess they can keep milking the iPhone gravy train for another year or two (are we ready for the “11” yet?!?), while the rest of the techno-sphere takes over the new IoT world.  (And forgive me on the image below – I couldn’t resist having some fun at Apple’s expense.)

DELISTING DEATH SPIRAL FOR CUMULUS:  As if things couldn’t get worse for Cumulus, last week they were officially delisted from the NASDAQ stock exchange for having their stock price below $1 for 30 consecutive trading days.  Their stock is now available on the OTC market which is basically a catch all collection of penny stocks.  The delisting hurts because institutional investors often buy from an index of NASDAQ and/or NYSE stocks – so if you’re off those exchanges you’re not included in the big money buys.  Actually delisting is really just icing on the cake for Cumulus who has a much bigger financial mess in their near future.  Unless they can renegotiate credit terms with their lenders by this Friday (12/1) they’ll formally default on a missed interest payment which was due on 11/1.  If When they default bankruptcy liquidation will be next.

Have a great “back to work” Monday guys!

*** Editor’s Note:  The Daily Gabe staff of one will be taking some time off next week to celebrate Turkey Day.  We’ll resume the blogging on November 27th. ***

ENTERCOM/CBS RADIO DEAL TO CLOSE TODAY:  After a year in the making the day is finally here.  Later this morning Entercom will complete its acquisition of CBS Radio, creating the third largest radio broadcaster in the US.  The combined entity, still to be called Entercom, will generate $1.7B in revenue across 241 stations.  The deal is structured in a way that CBS will still keep an equity position in Entercom equal to the current value of its stations.  This is important because it means Entercom didn’t need to borrow money for the acquisition. This sets Entercom on a much healthier path than the debt-ladened iHeart and Cumulus.  Radio Ink has a solid summary of the transaction in the attached link, along with a look back at Entercom’s history.  As much of a radio skeptic as I am, this merger is probably good for the overall radio industry.

MASHABLE’S FIRE SALE:  Yesterday news broke that tech, gaming and healthcare publisher Ziff Davis has reached a deal to purchase Mashable for $50M, as reported in the attached WSJ article.  The sting in this news is that Mashable’s valuation was pegged at $250M just one year ago during its most recent round of funding.  But since then Mashable’s ad revenue has declined and its cash was beginning to dry up.  It sort of feels like a take-whatever-you-can-get-now move. This could also be a canary in the coal mine moment for all of the second tier publishers in digital media.  As user traffic and revenue gets concentrated at the top of the industry mid-to-small niche players are starting to get squeezed out.  My prediction is that Mashable may be the first of several smaller players to either sell out or die off.

TIME TO “ELIMINATE THE GOOD”:  Finally this week I’d like to leave you with some weekend inspiration.  This insight comes from a gentlemen named Mike Flint, who is Warren Buffett’s personal pilot.  As detailed in the attached Inc.com article, one of the most important moments in Mr. Flint’s career was the time Warren Buffett helped him with a goal setting exercise.  It started like something you may have tried in your career – write down your top 25 career goals and then circle your top five priorities.  After looking at this list Mr. Flint assumed the same thing we all would . . . focus on the top five and then work on 6-25 intermittently when you have the time.  But he assumed wrong.  Instead of passively working the secondary goals Warren Buffett said those needed to be his “Avoid-At-All-Costs” list.  The wisdom goes something like this.  You can only achieve greatness on your most important goals if you completely ignore things that are just good.  So by avoiding spending time/energy on the secondary goals which can make you good, you have no choice but to devote all of your focus on the few things which will make you great.  It’s the personal version of the “pick one thing and do it better than anyone else” business adage.  I think this is fantastic advice from the “Oracle of Omaha” that already has me doing some soul searching.  Could this advice work for you too?

Have a great Friday and Thanksgiving holiday.  See you on November 27^th!

DID THE LABEL GAME JUST CHANGE YESTERDAY?:  Fasten your seat belts for this one.  Yesterday Alphabet (Google’s parent co) and Steve Stoute (former president of Interscope Records) came out of nowhere with a startup music tech company called UnitedMasters.  The concept is effectively a next gen record label which will represent artists in the streaming/social media space.  The vision is to help artists monetize their music in this new digital landscape to the point that they won’t need traditional record labels any longer.  UnitedMasters is playing the ultimate disruptor in a famously dysfunctional industry which has been dominated by a handful Label gatekeepers for most of the past century.  The first sentence of the attached Tech Crunch link tells you everything you need to know . . . according to UnitedMasters, “Record labels are obsolete”.  If these guys succeed November 15^th, 2017 will go down as the official beginning of the end for the Label dynasties.

MORE EVIDENCE OF STREAMING’S POWER:  Yesterday Nielsen released its latest Music 360 research, as reported in the attached Billboard link.  Thanks to streaming and the proliferation of connected devices overall music consumption is way up – increasing to an average of 32.1 hours per week compared to 26.6 hours in 2016.  Streaming music (in both audio and video forms) continues to surge – you can really see it in the graphic below comparing listening consumption from 2015 vs. 2017.  While streaming is pulling some share from AM/FM and satellite, the most noticeable shift is coming from downloads, which decreased from 23% of music consumption in 2015 to 14% today.  Digging deeper into that streaming slice, 45% say they prefer free streaming (like Pandora and YouTube), while 29% pay for subscriptions. Not sure what that missing 26% does – maybe they like both?  This data provides the clearest picture yet that streaming is becoming the dominant way people are consuming music today and into the foreseeable future.

GROUP M STARTS SCRUBBING THE SSPs:  Unless you’re purchasing programmatic inventory directly from a publisher in a PMP arrangement, clients and agencies must use an SSP (supply side platform), which is an aggregator of the available inventory a purchasing DSP (demand side platform) pulls impressions from.  But these SSPs are often the source of the ad fraud and hidden fees the digital media industry continues to struggle with.  Now Group M is beginning to take the SSPs to task, as reported in the attached AdExchanger link.  Besides just cutting the list of certified SSPs it uses to only the ones with disclosed fee structures, Group M is experimenting with individual providers by turning them off one at a time to see how each impacts their overall programmatic buys.  By doing this they can isolate the impact each SSP has on things like overall scale, pricing, and viewability percentages.  This process gives the SSPs nowhere to hide – their platforms either need to deliver clean inventory at a fair price and with scale, or be dropped from Group M’s selection set.  I’m guessing we’ll see more SSP house cleaning from other agencies in the near future.

Have a great Thursday guys!

YOUTUBE MAKING NICE WITH ARTISTS:  The entire global recording industry has its sights set on YouTube for the perceived underpayment of royalties Google (YouTube’s owner) gives to performers, song writers and record labels.  At the heart of the disagreement is a loophole called the Safe Harbor Provision, which allows Google to pay a revenue share on all ads run within specific artists’ channels, instead of paying a flat fee per song the way the streamers do.  The RIAA estimates that Google saves over $1B in royalty payments annually thanks to Safe Harbor, and they’re not happy about it.  With that as the backdrop now comes the attempt by YouTube to cozy up with artists by inserting concert ticket promos while their videos play.  As reported in the attached Musically link, YouTube is partnering with Ticketmaster to service the back end ticket purchases when listeners click to buy.  Knowing Google there’s undoubtedly a profit angle to this – guessing they’ve cut a rev share deal with Ticketmaster on any purchases they refer.  In the meantime YouTube gets to look like the good guys for once with the artists by promoting concerts for free.  Smart move.

MICROSOFT TAKES OFF THE GLOVES:  From 2000-2015 Microsoft was viewed as the evil empire of tech because of its hardware and software dominance on the enterprise side of computing.  Then the competition caught up and even started to pass them in some sectors of tech.  By 2015 there was a bit of a reset with the retirement of co-founder Steve Ballmer and the ascension of Satya Nadella as Microsoft’s new CEO.  This transition timed well with the rise of cloud computing, and the fascinating story of how Microsoft handled the pivot ensued.  First it was all about collaboration.  Mr. Nadella pursued an “it takes a village” strategy by publicly pushing the tech players to work together to develop the data cloud.  But then some of the other guys like Salesforce, Oracle, and Amazon started to out cloud Microsoft.  So now elbows are being thrown again.  Microsoft is going after existing Salesforce SaaS customers, Google is promoting it’s G-Suite as the next gen Microsoft Office, and Apple is still na-na’ing everyone else because it has cooler toys.  This leads us full circle to where the Silicon Valley started back in the early 80s, with a rugby scrum of competitors who are all certain they know better than the next guy are happy to tell us all about it.

MORE PROGRESS, MORE PROBLEMS FOR PROGRAMMATIC:  As programmatic ad buying begins to mainstream in digital media the industry continues to struggle with the dual challenges of making the transactions both transparent and efficient.  Today’s last article in the attached Digiday link tackles these issues.  Publishers continue to struggle with the best way to transact programmatically.  Ad networks and open exchanges are so yesterday.  Between the rock bottom CPMs, double digital impression fraud, and a lack of billing transparency anyone who still relies on networks for buying is stuck in 2012.  As an alternative PMPs are solid, but they’re hard to scale.  Unless you’re a top 20 publisher with enough inventory to set up a private deal with a large client there’s no way to make this efficient.  And header bidding, which was supposed to be the great savior to get the most out of real-time bidding for publishers’ inventory, is as fuzzy on the back end reporting as the networks.  All of this is creating frustration for an industry that needs to change, must change, through the process of automation.  Here’s to hoping it won’t be as painful going forward.

Have a great Wednesday guys!

PURCHASE DATA 101:  Things are heating up in the Purchased-Based Data game.  So it’s important to know the current landscape and understand where things are headed.  What makes this so challenging is all the unique ways purchase data can be used, and all the different players in the space.  For instance linking a consumer who was exposed to an ad and then purchased the advertised product is a key attribution metric, and the cornerstone of measurement services from NCS (Nielsen) and ODC (Oracle).  Then there are eCommerce giants like Amazon and Walmart who have their owned wall-gardens of on-platform purchase data, which they use to model out behaviors and serve retargeted ads.  And don’t forget the major CCs like Visa, Mastercard, and Amex who are aggregating their cardholders purchase data, which they sell to the DMPs who create purchase-based audience segs.  To help sort through this space AdExchanger has published an extensive Purchase Data Playbook which is available in the attached link.  It’s an important read if you need to get smart (or stay smart) on the purchase sector.

ASCENTIAL BLINKS IN CANNES LIONS STANDOFF:  After last year’s “biggest and best ever” Cannes Lions Awards Festival several agency holding companies began saying they would trim down their presence in 2018, and Publicis went so far as to the say they would skip Cannes altogether in 2018.  Why this reaction?  Because Cannes has been getting too big and too expensive for its own good.  Over the years Ascential, the owner of Cannes Lions, started adding more and more award categories.  More categories meant more client nominees, which forced agencies to pay for more clients to attend.  But 2017 appears to have been the tipping point, as described in the attached AdWeek link.  In a reactive move Ascential has agreed to trim down the overall number of nominations and put restrictions on how many times a piece of creative can be nominated.  These moves, combined with a reduction in attendee admission costs and discounting for hotel, meals, etc., are designed to make Cannes Lions more reasonable to participate in.  The changes are apparently enough for Publicis, who’s saying they will recommit to Cannes 2019 (yes, they’re still taking 2018 off).  Overall it’s a step towards cost savings sanity for the entire industry.  Now can somebody work on lowering those rose’ corkage fees for me?!?

COULD LBOs BE KILLING RETAIL FASTER THAN AMAZON?:  Yes, we all know the Retail Apocalypse is upon us.  With more purchases migrating online the term Brick & Mortar is fast becoming a dirty word.  But what if the financial problems in the Retail sector are really being caused by structural debt and not just competition?  In the attached link Bloomberg puts forth the theory that decades of LBOs (Leveraged Buyouts) of retailers have created debt-laden parent companies who can’t pay their bills.  These buyouts occurred over the past 10-20 years when sales projections for traditional retailers looked like a steady up-to-the-right line which would go on forever.  But then as Ecommerce started to take a bite out of their businesses, heavily leveraged retailers had no margin for error to survive the transition.  This explains why seemingly healthy retailers like Toys “R” Us is in Chapter 11, and Sports Authority went out of business altogether.  And the worst part of this story is Bloomberg’s prediction that the bad times for Retail are just getting started.  As you can see in the image below Retail loan delinquencies are on the rise, which is a foreshadowing of more store closures to come.  Fair warning that this article is really deep – there are graphs in here you’ve never seen before.  But if you want a MBA-level dissection of Retail’s debt problem, this one’s for you.

Have a great Tuesday guys!

TOP DIGITAL STATS:  To start things off here’s a roundup of AdWeek’s Top Digital Stats from the past week.  Coming in at #1 was Snapchat’s horrendous Q3 Earnings Call, in which they missed the Street’s rev forecast by $237M . . . that’ll leave a mark on your stock price!  Other points of note include AppNexus’s use of AI to send programmatic buying into hyperdrive (#3), brands making preparations for the EU’s GDPR conversion next May (#5), and Pandora’s introduction of audience seg targeting on its 10M strong connected home listener base (#6). It’s a solid list to get neurons firing this morning.

TRITON WEBCAST METRICS:  Last Wednesday Triton finally released its Webcast Digital Metrics Ratings for August.  I had to patiently wait for RAIN to run its usual analysis until this morning, which is featured in the attached link.  The streaming market saw a solid rebound from the summer doldrums with a +4% increase of AAS (average active sessions) compared to July.  And YoY the streamers saw an impressive +15% increase.  The growth was constituent across all major players, as noted in the graphic below.  One thing to keep in mind as you digest these numbers – Triton’s AAS #s still don’t differentiate between addressable ad-supported streaming and non-addressable ad-free subscription streaming.  Hopefully Triton will eventually segregate these two rankers so marketers can get a true sense of the audience scale they can actually market to.

THE DOJ VS. AT&T:  Last week a pretty shocking development occurred in the media landscape with the DOJ’s announcement that they intended to block AT&T from acquiring Time Warner unless it divested Turner Networks (think CNN) or Direct TV.  To understand what’s going on here we need to take a step back.  One of AT&T’s primary competitors, Verizon, has spent the last two years acquiring AOL and Yahoo to create a single digital entity called Oath.  Verizon’s strategy is to vertically integrate by combining data from their existing cellular customer base with its new digital ad business.  As a counterpunch AT&T is trying to buy Time Warner to run an Addressable TV version of this play, by combining its cellular data with satellite and cable TV viewers.  The DOJ has already green-lighted the Verizon acquisitions, so AT&T expected easy regulatory approval.  That’s why last week’s announcement of the block was so surprising.  Many in the industry are speculating that the DOJ’s move is a way for the Trump Administration to isolate CNN, which it’s dubbed “Fake News”, by forcing AT&T to drop it from the roll up.  The DOJ denies this allegation, but it’s pretty hard to justify the stance on its own merits.  AT&T has responded by saying it would fight to keep both Tuner and Direct TV in the deal, and expects to take this decision to the courts.  Variety has a solid summary article in the attached link.  Keep an eye on this one.

Have a great Monday guys!

TWICE THE TWITTER?:  So they’re officially doing it.  According to the Verge Twitter is pulling the trigger on the long-rumored switch to 280 characters, which is double the current 140.  This move is consistent with a strategy to increase user engagement on the site.  The rationale is that longer tweets will be more conversational in nature, and lead to increased time on the platform.  But there could be a downside.  Part of the beauty of Twitter is the bite-sized posts which read like quick hits.  Will 280 characters still retain the essence of brevity which we’ve all become used to?  It’s interesting that most test users of the new 280 character standard didn’t max out the new space.  Is that because they’re used to the current 140 and will eventually normalize to 280?  And when more users start bumping up against the new 280 ceiling will Twitter raise the limit again?  And most importantly, will this lead to even longer tweets by President Trump?  Eeek!

CUMULUS SAYS THE “B” WORD:  As they 30-day countdown clock winds down on Cumulus’s default of interest payments it missed, the B word (as in bankruptcy) is starting to be used.  The possibility was articulated by Cumulus CFO John Abbot during Thursday’s Q3 earnings call.  Since a negotiated bankruptcy would wipe out over 90% of the debt value for creditors, Cumulus is trying to use the bankruptcy threat as a way to get its lenders to the bargaining table to restructure its loans at more favorable terms.  But according to the attached RadioInk article, there doesn’t appear to be any movement towards a negotiation.  In the meantime Cumulus’s December 1^st default deadline is getting closer.

THANKING OUR VETERANS:  If you’re a long-time reader of the Daily Gabe you know I take a special appreciation in Veterans Day and the commitment made by those who have served and are currently serving.  Our veterans put themselves in harm’s way and sacrifice time with their families so that we can enjoy lives with ours.  In return we must give them our respect and appreciation.  So tomorrow (on the actual Veterans Day Holiday), please call every vet you know and say thank you.  Even if it’s a parent or grandparent who served decades ago, your acknowledgment of their sacrifice will be appreciated.  And if you want to know what sacrifice looks watch this Veterans Homecoming compilation video.  The reaction from the spouses, children and even the dogs will tell you just how much these families have sacrificed for us and our country.  Thank you, veterans!

Have a great Friday (and weekend) guys!

CONNECTED HOME MEETS TARGETING:  Of all the audio streamers Pandora has benefited the most of the surge in Connected Home listening over the past 24 months.  Over 10M of Pandora’s MAUs listen on at least one connected device in their home, and they’re listening for an astounding three hours per day on average.  With this kind of scale comes the ability to overlay data segmentation across the Connected Home platform.  As described in the attached AdWeek link, brands can now buy any of Pandora’s 2,000+ proprietary audience segments for audio ads running on Connected Home devices.  Since many of these devices don’t have a screen and are voice-activated, audio is the perfect native ad unit to capture listeners’ attention.  Bottom line . . . there’s more in-home listening than ever before, and brands now have more ways to use audience data to reach these listeners.  Seems like a positive step forward all around!

iHEART IN THE SPIN ZONE:  Yesterday iHeart held it’s Q3 Earnings Call.  Their biggest headline was 18 straight quarters of revenue growth on a barely positive .03% growth in Q3’17 vs. Q3’16.  Keep in mind this growth now includes trade which they treat as ad revenue, so the more trade they do the more “growth” they achieve.  I decided to go a little deeper into iHeart’s earnings results to get a better picture of the financial health of the company.  According to the attached RBR link iHeart’s total debt inched up to $20.6B, thanks to a net loss in Q3 of $248M.  Think about that for a minute.  At current pace iHeart is losing almost a billion dollars a year, which is causing the company to sink further and further into debt.  Perhaps the most striking financial number to consider is cash on hand.  On Jan 1 iHeart had $845M in cash, but now that amount has shrunk to $286M.  At the current burn rate iHeart will run out of cash sometime in the middle of Q1.  And since it’s unlikely that they’ll be able to borrow more money (would you like to be the last creditor to get paid in a $20B line?), bankruptcy could be realistic in Q1.  Suddenly that trade-fueled .3% growth doesn’t seem too exciting, right?

DOING PROGRAMMATIC THE WRONG WAY:  Earlier this year Snapchat announced it was launching a self-service API portal for clients to buy programmatic ads on the platform.  This seemed like a logical way to scale thousands of new advertisers at once and help Snap compete against the big boys like Facebook and Google.  But it turns out there was an unintended consequence to this move – the commoditization of Snap’s inventory into low cost, non-targeted ROS impressions.  According to the attached Digiday link, Snap’s lack of audience data (which is needed to create audience segs) means most impressions bought programmatically are selling the $3-8 cpm range.  By comparison two years ago Snap was famous for only selling high-end “takeover” style ads for $750K+.  So in an effort to bring more clients to the party Snap has inadvertently gutted the specialness of its platform, and transformed from a premium environment to one that’s barely better than an ad network.  And programmatic was the knife used to perform this unnecessary surgery.  Goes to show you that programmatic unto itself isn’t necessarily a good thing.  It needs to be combined with data to create valuable audience segs which command a premium price to help drive the overall business forward.

Have a great Thursday guys!

GOOGLE GETTING INTO SHAZAM’S KITCHEN:  You knew it was just a matter of time before voice-rec AI technology became widespread enough that Shazam’s secret sauce would be up for grabs.  And not surprisingly, Google is the first copycat to roll out its new song-recognition software on Pixel smartphones and Android devices.  As described in the attached RAIN link, your Google powered device can now respond with artist and title information when you ask “What song is this?”  And if you want to play the song or watch the video (surprise!) you’ll be redirected to Google Play Music or YouTube, so Google keeps the entire content experience in house.  While I don’t see this as a game-changer for Google it’s a significant problem for Shazam who no longer holds song recognition technology as it’s unique selling proposition.  Expect Apple, Amazon and others to follow with similar capabilities sooner than later.

FACEBOOK MAKES IT AN EVEN DOZEN MEASUREMENT ERRORS:  You probably remember the self-reported errors Facebook began to disclose last Fall around measurement metrics and billing miscalculations.  Well guess what . . . it’s still happening.  As early as yesterday FB announced the discovery of two new errors, according to the attached Marketingland article.  The latest two errors involve video ad units which are only supposed to render while in view.  These ads automatically play once loaded, as long as they’re in view on the screen.  The benefit of this ad unit is obvious, because advertisers are guaranteed to have their impressions viewed.  But FB’s system didn’t stop the ads from playing once a user had scrolled down the page, which effectively backgrounded the unit.  However clients were still billed for the videos even though they weren’t seen.  FB isn’t disclosing the total number of videos that rendered in error, but they’ve announced credits to advertisers who paid for $5,000+ of the flawed units.  As I’ve said before, I’ll give FB credit for raising its hand and admitting an error once they know about it.  But you get the feeling the flaws in their tech stack are like cockroaches – you see a few here or there, but you know many more are waiting just out of sight.

EVERYBODY’S BECOMING A BANKER:  Finally today, let’s go on a Fin-Tech journey together.  First it was Paypal and Venmo encroaching on traditional banks with mobile cash transfer and payment systems.  Then the banks countered with their own mobile pay solutions such as bank-specific platforms like ChasePay and industry-wide platforms like Zelle.  Now Apple is trying to nose into the cash transfer game with the launch of Apple Pay Cash.  As explained in the attached TechCrunch link, users of Apple’s iMessenger app will now be able to send money back and forth instantly.  The transaction requires users to have an ApplePay account set up – so if you send cash it will be billed to your ApplePay account, and if you receive cash it will show as a credit.  This is just another example of a large tech company who already controls the communication infrastructure working its way into new service categories.  The traditional banks should be nervous about this one.

Have a great Wednesday guys!

AMAZON’S MULTIPLIER EFFECT:  Here’s a stat to get your morning started.  In 2017 Amazon will transact 43% of all Ecommerce sales in the US, compared to 37% in 2016.  So Amazon’s slice of the pie is growing, while the Ecommerce pie itself continues to grow.  With this growth comes an interesting multiplier effect, which allows Amazon to vertically integrate its business and compete outside its traditional swim lane.  As noted in the attached Inc.com article, Amazon is beginning to lay the ground work for its own distribution system – because why pay Fedex or UPS to ship your goods and make a profit when you can just in-house it?  To give you an idea of how big of an opportunity this is, consider that Amazon makes up 10% of UPS’s shipping volume today.  You’d hate to be the UPS rep who loses that renewal deal.  Or what about Amazon’s new Business Prime B2B platform which allows manufacturers to sell directly to consumers while cutting out the middle man.  If you’re Sysco you might suddenly have a new competitor on your hands.  These are just a few examples of the transformation which may come from Amazon’s dominance of an entire distribution system.  Remember when these guys were just selling books online?!?

OF POLITICS AND PIZZA:  We all know the power successful sports sponsorships can have to create a brand’s identity and drive sales.  But can a sports affiliation also drag you down?  That appears to be happening, or is at least the excuse given, for Papa John’s sales decline.  PJ’s sales were down in Q3 and the stock dropped 13%.  According to the attached AdAge link, founder John Schnatter is assigning blame for the decline squarely on the NFL’s national anthem controversy.  He pulled no punches on their earnings call by saying, “The NFL has hurt us by not resolving the current debacle to the players’ and owners’ satisfaction.”  Unless you’ve lived under a rock for the past decade you’ve seen Mr. Schnatter starring in NFL-themed ads with football legend Peyton Manning.  Together the pair helped drive up PJ’s sales thanks to the high profile of the league.  Now it appears there might be a downside to this type of association.  Because if something goes poorly for the player, team or even the league a sponsoring brand could be exposed.  It’s also worth noting that Schnatter was a donor to the Trump campaign, so there could be a little bit of personal politics involved in his assessment of the situation.  Either way PJ’s sales are down, the NFL isn’t happy, and Peyton Manning now has some free time to make more Nationwide ads.

RISE OF THE PARENNIALS:  When I say the word Millennial the image that comes to mind is usually of a goatee-donning barista named Ethan at your nearest high end coffee shop.  Of course that’s a stereotype.  The reality is Millennials are a diverse group who’s rapidly aging up into adulthood.  Consider the fact that there are 16M Millennial moms in the US right now.  This group, referred as Parennials, has a unique set of priorities and family dynamics which are unlike their parents or grandparents.  The idea of Dad going to work and Mom watching the kids is out, and co-parenting is in.  Since Millennials aren’t on as stable an economic footing as previous generations they’re more likely to have a parent directly involved in their household operations – either by watching the kids during the day or even helping to pay the rent/mortgage.  Parennials are less likely to own a home and are less likely to have a religious affiliation, but are way more likely to use Social media for peer interaction.  The NY Times has a solid profile of this group in the attached link.  It’s important for marketers to get to know the specific tastes and trends of Parennials.  We’ve known how big the baby sector has been for decades, and now it’s the Parannials turn to be the ones making the purchase decisions.

Have a great Tuesday guys!