Monthly Archives: August 2009

MediaPost Publications Giving Up Control To Prepare For Search In A Social World 08/14/2009

From Online Media Daily – By Laurie Sullivan

Give up control to achieve success in social media campaigns, because in the end, brands really have no choice. That’s the message that Charlene Li, founder of Altimeter Group and coauthor of “Groundswell,” sent attendees during the Search Engine Strategies keynote Thursday in San Jose, Calif.

Marketers have heard it all before. Don’t try to control the conversation in Facebook, Twitter and other social sites. But Li believes preparing for the future of search also means accepting that social networks will become like air. People who tap social graphs will take them wherever they go. And marketers need to realize this.

Preparing for the future puts the focus on people to develop relationships by giving them tools to provide input on products and services. It also requires having the means to analyze the data, and building out long-tail keyword campaigns by knowing existing and potential customers.

Li says marketers need to rethink the way they view search. People must remain at the center of the search strategy, not keywords. Putting people in the middle of the strategy requires not only building relationships, but also considering their intent.

Preparing to tap into the “chain of intent” in searches will require analytics. It will influence keyword bids for campaigns and help marketers see the importance of content through the eyes of consumers. It will entail integrating offsite behavior data gathered from social networks with existing customer data from a company’s Web site. Knowing the way to reach consumers will require having good data to analyze on the fly and providing that information back into the system.

Since sharing content has become one of the most important aspects of the Internet in recent years, it allows marketers to tap into social graphs to get a closer glimpse of consumer behavior. Li says marketers will augment CPC bids with social data, taking into consideration influence, friends, and the number of influential friends someone has.

Targeting inside search engines have begun to advance. Social CRM will play a bigger role. “Go out into the community, such as Facebooks and blogs, and come back with engagement data and use A/B testing to see what messages resonate in the social sites,” Li says. “It’s no longer about managing keywords. It’s also about understanding how people use all the tools that impact search and have it reflect back into your strategy.”

Li says to focus on the people, not the keywords. Once they come to your site through search engines, such as Google and Microsoft Bing, know how they will interact with you.

Advertisements

The Triumvirate: TV, Online Video And Social Media

Old formulas need to be revised, books re-written, strategies re-thought and facts re-tested. In fact I was reading a marketing book that was 2 years old and its content does not apply any more.

I read an interview with Eisner, former head of Disney, and his message is clear: the CEO’s of Fortune 500 corporations do not have a clear answer nor can figure out a business model around the internet when it relates to content, programming and marketing. It is all up for grabs. What will be the next break away technology or company?

In the interim, I see some glimpses of strategies that are working or providing results to those who dare to experiment and innovate. Bellow is an essay by Cory Treffiletti:

There are two primary schools of thought in online marketing (at least if you ask me, there are). Which do you subscribe to?

The first school of thought is “The Basics,” used by the folks who do search, affiliates and general display. They do it efficiently and it works well at achieving core business objectives, but there’s not a lot of risk and there’s not a lot of reward beyond the forecasted expectations. The second is what I lovingly refer to as “The Triumvirate,” and it refers to the domination of three primary vehicles that work exceptionally well when they are coordinated properly: TV, online video and social.

When properly planned, these three vehicles are powerful. TV is, and will be for the foreseeable future, the primary medium with which to generate consumer awareness, but online video and social media are becoming the primary outlet for consumer interaction and the strongest support vehicles that TV will ever have. According to a recent report from Nielsen (A2/M2 Three Screen Report, 1st Quarter 2009), there are 284 million people watching TV at home in the U.S., and 131 million people watching video online. The difference is that TV growth was only about 1.9% year over year, while online video growth was closer to 53% year over year. This becomes very interesting when you also realize that people are starting to watch more long-form video content online, moving away from the “snacking” that was the previously dominant form of online video interaction. If you couple this with the growth of social media usage from 2008-2009, you end up with a very interesting strategy for launching and seeding messaging to an audience that is highly engaged with a dynamic form of media that achieves the sight, sound and motion of video with the social and viral components of online.

For the Triumvirate to work strategically, you need to think of your messaging platform as a tripod, with TV, online video and social media as the legs. In the old days you could use TV alone to build your brand and convey your message, but TV is now just as cluttered an environment as the rest of the landscape, due to fragmentation of stations and audience. TV cannot sustain an ad campaign solo anymore, and the tripod cannot stand with only one or two of the legs in place; you need all three.

TV provides reach and impact. Online video provides additional reach, additional impact and a component of interactivity. Social media provides reach, frequency, and the implicit approval of other consumers who support and follow a brand, as well as another opportunity for syndicating a message beyond a Web site and into mobile platforms.

I would argue that in today’s environment brand marketers could effectively generate an audience using ONLY these tools and foregoing search, display and other formats altogether — if they have the nerve and the buy-in internally to give it a try.

The Triumvirate is the core of a strategy that can be effective, provided you have understanding of the audience and their motivations, and have developed creative that resonates with them. Unlike search and even display, creative MUST be on target here. In search and display, you have more flexibility to change messaging at the drop of a hat, so you have more forgiveness regarding the creative. Online video can be changed out, but once something is launched in the social media world, it can become viral — so it must be well-thought-out and on-target from the beginning. Once it’s out there, it’s no longer yours to control, so you need to get it right the first time! Of course, I would always recommend that you look at The Basics and The Triumvirate together as differing stages of the strategy, with one providing a baseline and the other providing opportunity for growth and expansion. When you’re planning a digital effort, you want to know what will work, and create a line item for what may provide extra “oomph” for your campaign. If you develop a plan that utilizes both of these in unison, you can get a stronger return for your marketing spend.


The Triumvirate: TV, Online Video And Social Media

Old formulas need to be revised, books re-written, strategies re-thought and facts re-tested. In fact I was reading a marketing book that was 2 years old and its content does not apply any more.

I read an interview with Eisner, former head of Disney, and his message is clear: the CEO’s to Fortune 500 corporations do not have a clear answer nor can figure out a business model around the internet when it relates to content, programming and marketing. It is all up for grabs. What will be the next break away technology or company.

In the interim, I see some glimpses of strategies that are working or providing results to those who to dare to experiment and innovate. Bellow is an essay by Cory Treffiletti:

There are two primary schools of thought in online marketing (at least if you ask me, there are). Which do you subscribe to?

The first school of thought is “The Basics,” used by the folks who do search, affiliates and general display. They do it efficiently and it works well at achieving core business objectives, but there’s not a lot of risk and there’s not a lot of reward beyond the forecasted expectations. The second is what I lovingly refer to as “The Triumvirate,” and it refers to the domination of three primary vehicles that work exceptionally well when they are coordinated properly: TV, online video and social.

When properly planned, these three vehicles are powerful. TV is, and will be for the foreseeable future, the primary medium with which to generate consumer awareness, but online video and social media are becoming the primary outlet for consumer interaction and the strongest support vehicles that TV will ever have. According to a recent report from Nielsen (A2/M2 Three Screen Report, 1st Quarter 2009), there are 284 million people watching TV at home in the U.S., and 131 million people watching video online. The difference is that TV growth was only about 1.9% year over year, while online video growth was closer to 53% year over year. This becomes very interesting when you also realize that people are starting to watch more long-form video content online, moving away from the “snacking” that was the previously dominant form of online video interaction. If you couple this with the growth of social media usage from 2008-2009, you end up with a very interesting strategy for launching and seeding messaging to an audience that is highly engaged with a dynamic form of media that achieves the sight, sound and motion of video with the social and viral components of online.

For the Triumvirate to work strategically, you need to think of your messaging platform as a tripod, with TV, online video and social media as the legs. In the old days you could use TV alone to build your brand and convey your message, but TV is now just as cluttered an environment as the rest of the landscape, due to fragmentation of stations and audience. TV cannot sustain an ad campaign solo anymore, and the tripod cannot stand with only one or two of the legs in place; you need all three.

TV provides reach and impact. Online video provides additional reach, additional impact and a component of interactivity. Social media provides reach, frequency, and the implicit approval of other consumers who support and follow a brand, as well as another opportunity for syndicating a message beyond a Web site and into mobile platforms.

I would argue that in today’s environment brand marketers could effectively generate an audience using ONLY these tools and foregoing search, display and other formats altogether — if they have the nerve and the buy-in internally to give it a try.

The Triumvirate is the core of a strategy that can be effective, provided you have understanding of the audience and their motivations, and have developed creative that resonates with them. Unlike search and even display, creative MUST be on target here. In search and display, you have more flexibility to change messaging at the drop of a hat, so you have more forgiveness regarding the creative. Online video can be changed out, but once something is launched in the social media world, it can become viral — so it must be well-thought-out and on-target from the beginning. Once it’s out there, it’s no longer yours to control, so you need to get it right the first time! Of course, I would always recommend that you look at The Basics and The Triumvirate together as differing stages of the strategy, with one providing a baseline and the other providing opportunity for growth and expansion. When you’re planning a digital effort, you want to know what will work, and create a line item for what may provide extra “oomph” for your campaign. If you develop a plan that utilizes both of these in unison, you can get a stronger return for your marketing spend.


Boomers Watching Less TV

You see it everywhere and in all age groups. Add to this the losses on print and radio and the future is digital. The questions is can we monetize a service that has been mostly free?

From Change Wave

By Paul Carton and Andy Golub

A couple of decades back it was the Baby Boomers driving new waves of consumer demand, but are they still at the forefront of today’s media and technology transformation?

Surprisingly so, according to the latest ChangeWave survey of 1,660 members of the Baby Boom generation. The benchmark survey of business professionals between the ages of 45 and 63, completed in early May, focused on TV viewing habits vs. home Internet usage.

The results point to a powerful shift occurring among Boomers away from traditional TV towards new types of online services and entertainment.  Importantly, this transformation is affecting lifelong habits.

In the first major finding, Boomers now spend more free time online (12.9 hrs per week on average) than they do watching traditional TV (11.8 hrs per week on average).

What’s more, by a five-to-one margin Boomers are watching less traditional television than they did a year ago. Among this group, 62% say it’s because they’re not as interested in what’s on TV these days, and another 26% say they’re spending more time surfing the web.

Social Networking Not Just for Teens Anymore

One place that Boomer professionals are spending more time online is with social networking sites – where 51% say they currently maintain one or more profiles.

Nearly three-in-five (57%) of these Boomers report they use the networking site LinkedIn, while another 55% have a Facebook profile – the site normally thought to be most popular among teenagers.

But Boomer interest in social networking has its limitations – 77% of users say they would not be willing to pay a subscriber fee for social networking. Of all the services, LinkedIn is the most likely to attract paid subscribers – but only 7% say they’d be willing to pay a fee if it was no longer free.

A Closer Look at Traditional TV vs. Alternative Programming

Among traditional TV viewers, an astonishing one-in-five (20%) say they’re likely to downgrade or cancel their current TV service package in the next 6 months. The likelihood of canceling is highest among Cable (22%) and Satellite subscribers (22%), and lowest among fiber-optic TV subscribers (7%).

We also asked Boomer respondents to tell us which one paid subscription they’d be most willing to give up, and again its TV Service (44%) that appears most vulnerable – scoring significantly worse than any other subscription service.

Adding fuel to the fire, Video-over-the-Internet now clearly represents a significant threat to traditional TV viewing. Better than two-thirds of Boomers (69%) say they’ve watched video content on their computer over the past 90 days. Even more ominously, 48% of respondents say they’d be willing to pay a monthly fee for a Video-over-the-Internet subscription if it provided the same programming currently available on their TV service.

Top TV Websites. YouTube.com (79%) is the leading online website Boomers use to watch video, followed by TV Network Websites (39%), Hulu.com (16%) and iTunes (11%).

As a follow-up, we also asked respondents how willing they are to view advertisements when watching Video-over-the-Internet. And while Boomers clearly want to see fewer ads than they do with conventional broadcasting, more than two-thirds (68%) do say they are willing to view at least some ads online.

Winners and Losers

The shift among Boomers towards Video-over-the-Internet is a long-term trend that bodes poorly for traditional TV service providers, as they face a triple whammy of challenges:

• 20% of Boomers are likely to downgrade (or cancel) their current TV service in the next 6 months – mostly among Cable and Satellite users

• 44% say TV service is the paid subscription they are most willing to give up

• 48% said they’d be willing to pay a monthly fee for a Video-over-the-Internet subscription if it provided the same programming currently available on their TV service

At the same time, there appears to be a huge market opportunity for companies that can successfully package a paid subscription model for Internet TV.


Paid Media Grows, Free Media Slows

This article by Eric Saas in DailyMediaNews covers a forecast for the communications industry from Veronis Suhler Stevenson. The forcast paints a bleak picture for traditional media with declines across 20 major communications industry sectors, all concentrated in the traditional media, including newspapers, magazines, broadcast TV, radio, traditional out-of-home and Yellow Pages.

The bright spot is digital and alternative marketing and advertising, which together will total almost $139.5 billion in 2013. Email marketing will grow by double-digits throughout the forecast period, contributing to an overall annual growth rate of 5.6% for direct marketing from 2008-2013.

Alternative segments, like branded entertainment and word-of-mouth, will enjoy a post-recession boom, with an annual growth rate of 12.6% from 2008-2013; VSS said branded entertainment in particular grew 12% to just under $25 billion in 2008, and will return to a cumulative annual growth rate of 9.3% from 2008-2013, putting total revenues for branded entertainment at about $38.9 billion in 2013.

Alternative advertising will grow at 12.3% over the same period, powered by online and digital out-of-home revenue.


Access to Entertainment Capital Conference

MEDIA ADVISORY

CALIFORNIA HISPANIC CHAMBERS OF COMMERCE (CHCC) ANNUAL CONVENTION TO INCLUDE AN ENTERTAINMENT FINANCING TRACK FEATURING ENTERTAINMENT EXPERTS AND EXECUTIVES

WHAT: The 30th Annual California Hispanic Chambers of Commerce Annual Convention will feature an Entertainment Financing and pitch track organized by the Access to Entertainment Capital (AEC) Committee that will bring together top entertainment business executives, Senators and influential leaders in the United States to discuss the past, present and future of the Latino entertainment business.

The importance of the Hispanic market to the entertainment industry is highlighted by recent statistics. According to Reuters, Hispanics accounted for 46 percent of ticket-buyers of “Fast & Furious” on opening weekend and gave the picture the top spot at the box office. In the United States and Canada, the picture earned $72.5 million during its first three days, smashing “Monsters vs. Aliens'” week-old record for the best opening of the year.

About 1,000 people, most of them Latino business men and women, will converge for three days on the US Grant Hotel in San Diego to attend more than 50 presentations, exhibits and business seminars, as well as to take advantage of contracting opportunities and meet with major financial institutions. One track of presentations will be dedicated exclusively to entertainment financing and will include a pitch by producers to funding professionals.

WHEN: Friday, August 21, 2009, from 10:30 a.m. through 3 p.m.

As the AEC official event, Senator Ron S. Calderon will open the entertainment track at 10:30 a.m. and share what the Governor’s office is doing to keep entertainment jobs in California. A second session starts at 11:00 a.m. and puts together leading entertainment investors who will share how they select projects.

At 2 p.m. after lunch, we will hold a pitch session, during which selected producers will pitch their projects to our panel of investors.

WHERE: US Grant Hotel
800-237-5029
326 Broadway
San Diego, CA 92101

Media check-in next is to the general registration in the front lobby.

WHO: Speakers include:

Senator Ron S. Calderon, Co-Chair of the Art and Entertainment Committee for the State of California;   Alexis Garcia an agent in the independent packaging group with the William Morris Agency, where he identifies and works with international financiers, producers, and filmmakers; Christopher Petzel, media entrepreneur and CEO of Northwind Capital, an investment banking advisory and private equity boutique with a focus on the entertainment and media industries; Jeffrey Andrick, Founder/Owner, XL.Ent Media Group, an investor who has financed a large number of Motion Pictures of varying sizes and genres, including major studio releases and independent projects. Other speakers TBA.

In addition to the above speakers, other business, community and political leaders will be available for media interviews.

CONTACT: Ivan Cevallos

ivan@ethosagency.com

www.ethosagency.com


Access to Entertainment Capital Conference & Pitch

MEDIA ADVISORY

CALIFORNIA HISPANIC CHAMBERS OF COMMERCE (CHCC) ANNUAL CONVENTION TO INCLUDE AN ENTERTAINMENT FINANCING TRACK FEATURING ENTERTAINMENT EXPERTS AND EXECUTIVES

WHAT: The 30th Annual California Hispanic Chambers of Commerce Annual Convention will feature an Entertainment Financing and pitch track organized by the Access to Entertainment Capital (AEC) Committee that will bring together top entertainment business executives, Senators and influential leaders in the United States to discuss the past, present and future of the Latino entertainment business.

The importance of the Hispanic market to the entertainment industry is highlighted by recent statistics. According to Reuters, Hispanics accounted for 46 percent of ticket-buyers of “Fast & Furious” on opening weekend and gave the picture the top spot at the box office. In the United States and Canada, the picture earned $72.5 million during its first three days, smashing “Monsters vs. Aliens’” week-old record for the best opening of the year.

About 1,000 people, most of them Latino business men and women, will converge for three days on the US Grant Hotel in San Diego to attend more than 50 presentations, exhibits and business seminars, as well as to take advantage of contracting opportunities and meet with major financial institutions. One track of presentations will be dedicated exclusively to entertainment financing and will include a pitch by producers to funding professionals.

WHEN: Friday, August 21, 2009, from 10:30 a.m. through 3 p.m.

As the AEC official event, Senator Ron S. Calderon will open the entertainment track at 10:30 a.m. and share what the Governor’s office is doing to keep entertainment jobs in California. A second session starts at 11:00 a.m. and puts together leading entertainment investors who will share how they select projects.

At 2 p.m. after lunch, we will hold a pitch session, during which selected producers will pitch their projects to our panel of investors.

WHERE: US Grant Hotel
800-237-5029
326 Broadway
San Diego, CA 92101

Media check-in next is to the general registration in the front lobby.

WHO: Speakers include:

Senator Ron S. Calderon, Co-Chair of the Art and Entertainment Committee for the State of California; Alexis Garcia an agent in the independent packaging group with the William Morris Agency, where he identifies and works with international financiers, producers, and filmmakers; Christopher Petzel, media entrepreneur and CEO of Northwind Capital, an investment banking advisory and private equity boutique with a focus on the entertainment and media industries; Jeffrey Andrick, Founder/Owner, XL.Ent Media Group, an investor who has financed a large number of Motion Pictures of varying sizes and genres, including major studio releases and independent projects. Other speakers TBA.

In addition to the above speakers, other business, community and political leaders will be available for media interviews.

CONTACT: Ivan Cevallos

ivan@ethosagency.com


Paid Media Grows, Free Media Slows

This article by Eric Saas in DailyMediaNews covers a forecast for the communications industry from Veronis Suhler Stevenson. The forcast paints a bleak picture for traditional media with declines across 20 major communications industry sectors, all concentrated in the traditional media, including newspapers, magazines, broadcast TV, radio, traditional out-of-home and Yellow Pages.

The bright spot is digital and alternative marketing and advertising, which together will total almost $139.5 billion in 2013. Email marketing will grow by double-digits throughout the forecast period, contributing to an overall annual growth rate of 5.6% for direct marketing from 2008-2013.

Alternative segments, like branded entertainment and word-of-mouth, will enjoy a post-recession boom, with an annual growth rate of 12.6% from 2008-2013; VSS said branded entertainment in particular grew 12% to just under $25 billion in 2008, and will return to a cumulative annual growth rate of 9.3% from 2008-2013, putting total revenues for branded entertainment at about $38.9 billion in 2013.

Alternative advertising will grow at 12.3% over the same period, powered by online and digital out-of-home revenue.


Delivered Email Metric May Not Be Accurate

I saw this  research article today(Center for Media Research) and found it relevant in this time and age when measuring results is extremely critical.  Close to one fifth of your emails do do reach its destination. Some go to the SPAM folder and what is worst,  others are never delivered to a in box, they are filtered by your ISP. Who is your provider?

According to a new study from Return Path, monitoring 500,000 campaigns from its Mailbox Monitor service from January to June 2009, the average inbox placement rate for permissioned, commercial email in the US and Canada was 79.3%. Of the nearly 21% of email that is not delivered to the inbox just 3.3% is sent to a “junk” or “bulk” email folder and 17.4% is not delivered at all. Consumer Email (January through June, 2009)

Consumer Email (January through June, 2009)

Result                   % of Mail Sent

Delivered              79.3%

Missing                 17.4%

Junk/Bulk             3.3%

Source: Return Path, July 2009

The US is actually doing slightly better than Canada, with inbox placement rates averaging 82%. Canadian ISPs have the higher thresholds for delivery with just 75% of their email, on average, being delivered to the inbox.

The report also found that reaching business addresses, which are protected by systems like Postini, Symantec and MessageLabs, is even more difficult than top consumer email providers. On average, only 72.4% of commercial email is delivered to the inbox through these enterprise systems. These systems are more likely to deliver messages to a junk folder as compared to consumer ISPs that are more likely to block email altogether.

Rates of inbox placement vary quite a bit across Internet Service Providers. Not surprising, says the report, because inbox placement is based on a unique recipe of sender reputation and other factors. Understanding deliverability at this granular level is important for marketers who want to optimize their email marketing efforts.

Non-delivery Rates by ISP (US, 1st 6 Months, 2009)

ISP                         % Mail Not Delivered
Cox                         8%
USA.net                   11%
Road Runner            12%
BellSouth                 14%
Netzero                   14%
Yahoo!                    15%
AOL                        16%
Comcast                  17%
MSN                        20%
Hotmail                   20%
Gmail                      23%

Source: Return Path, July 2009

Marketers are generally given reports that show a “delivered” metric that tends to be about 95% to 98%, says the report. But in most cases this metric is actually the bounce rate, the number of messages sent through the pipe and subtracting the number that return a hard bounce. Top-tier marketers very clean lists, in conjunction with the system, cleans out hard bounces, usually before the next send. In addition, since Email generates a lot of revenue, deliverability failures can be masked by the revenue generated by every campaign.

Research done by the Return Path Professional Services team in the last 18 months shows high percentages of top brands missing basic best practices like welcome messages, efficient opt-out procedures and appropriate permission levels.

The report concludes with some considerations for improvement in deliverability:

·      The prevalent opinion is that whatever gets sent and doesn’t bounce must be reaching the inbox. Gaining access to relevant deliverability data is crucial for marketers to be able to make accurate decisions about their program’s effectiveness

·      Consumer research consistently shows that people do not check their bulk or junk folders for marketing messages. And even if they do, much of the non-delivered mail isn’t there, it’s completely missing

·      Assuming that a program that generates revenue or gets good response must be delivered to all the inboxes that matter is a mistake

·      Most of the major drivers of poor deliverability rates are the direct result of marketing practices, not technical ones. These include complaints when email is unexpected or undervalued by the recipient, and spam traps, which are most often found on lists that are old or have been built with poorly sourced data.


Internet Ad Spending Increase Stands Alone in 2009 Forecast

According to a new release and ad spending forecast by ZenithOptimedia, current ad expenditure forecasts predict a steeper decline in North America and Western Europe, with all regions joining in the general decline. The report forecasts global ad expenditure to shrink by 6.9% over the course of 2009.

Entering Q2, 2009 says the report, there is limited long-term visibility in the market as most advertisers wait until the last moment to confirm their spending commitments. Many are treating advertising as a discretionary expense, and one they find convenient to cut. Unprecedented economic problems and events affecting the predicted 6.9% decline in global ad expenditure in 2009 include:

  • Lack of quadrennial events (Olympics, elections) creates tough year-on-year comparisons for markets like the US
  • Poor corporate confidence means very limited visibility in the market
  • Consumers are putting off big purchases and shifting consumption from premium to value products, opening opportunities for advertisers with value to offer
  • Consumers are spending more time at home, consuming more media, particularly television and the internet
  • Search is driving internet growth as consumers use it to find bargains
Advertising Expenditure By Region (newspapers, magazines, television, radio, cinema, outdoor, internet; US$ million, current prices)
2007 Y/Y Chg % 2008 Y/Y Chg % 2009 Y/Y Chg % 2010 Y/Y Chg % 2011 Y/Y Chg %
North America

$188,300

2.7%

181,269

-3.7

166,299

-8.3

163,811

-1.5

165,768

1.2

USA only

2.5

-4.1

-8.7

-1.7

1.1

Western Europe

120,177

6.0

118,894

-1.1

110,875

-6.7

112,090

1.1

115,835

3.3

Asia Pacific

99,583

6.8

102,584

3.0

99,071

-3.4

101,704

2.7

108,480

6.7

Central & Eastern Europe

31,634

22.4

35,071

10.9

30,190

-13.9

31,559

4.5

34,547

9.5

Latin America

26,422

16.3

29,676

12.3

29,070

-2.0

31,128

7.1

32,969

5.9

Africa/M. East/ROW

15,931

22.6

19,241

20.8

17,750

-7.7

19,664

10.8

23,069

17.3

World

482,047

6.7

486,734

1.0

453,254

-6.9

459,956

1.5

480,668

4.5

Source: ZenithOptimedia, April 2009

Ad expenditure correlates strongly with corporate profits, acknowledges the stuey, and the ad market is unlikely to start its recovery until profits start to pick up again. The current barriers to recovery include lack of trust in the credit markets, and low confidence in prospects for short-term growth. In addition:

  • Consumers are spending less, saving more, and spending more time at home. Consumers are putting off the purchase of big ticket items and shifting their consumption habits from premium products to budget brands
  • In the retail sector premium stores are bringing in value lines and advertising their presence
  • In the finance category, corporate advertising has fallen off quite sharply, but consumers’ increased appetite for saving and risk aversion means that savings accounts and certain types of insurance are still growing
  • Spending by CPG advertisers has generally held up well; There has been a clear shift from premium to value products as companies respond to consumer demand
  • The automotive industry is suffering from long-term problems that the downturn has exposed and exacerbated, but not caused. Regulations, high labor costs and other structural problems left auto manufacturers with very thin margins. In France and Germany, however, government incentives have led to increased sales in the short term, and increased automotive advertising. Smaller, generally foreign, brands have managed to gain market share by promoting their value proposition
  • Businesses have cut back their travel expenses, causing a large drop in premium traffic for airlines. But leisure travel is still popular to countries where exchange rates now look very favorable to consumers spending in euros or US dollars. Airline advertising to consumers is still active in markets with strong exchange rates

Globally, some of the ZenithOptimedia ad expenditure projections include:

  • Ad expenditure to shrink by 8.3% in North America in 2009
  • All the major markets in Western Europe are expected to grow in 2010 with the exception of Italy, expected to shrink another 0.8%
  • Asia Pacific is expected to drop by 3.4% in 2009, though expecting growth in ad expenditure in China, India, and Indonesia, counterbalanced by sharp falls in Taiwan, Singapore and South Korea and a 5.0% fall in Japan, which still contributes 38% of the region’s ad expenditure
  • Central and Eastern Europe is expected to suffer the sharpest drop-off in 2009, of 13.9%. Large drops seen in markets like Russia, Turkey and Ukraine are felt to be one time corrections by international advertisers as they reassess the long-term growth potential of these markets, and expect to see a return to growth in 2010.
  • Most markets in Latin America are still growing, but the region is dragged down by Brazil and Colombia.

In considering global advertising expenditure by medium, the report concludes that, as consumers are saving money by spending more time at home, media consumption is increasing, particularly of television and the internet.

US Advertising Expenditure By Medium (US$ million, current prices)
2007 ($x000) 2008 2009 2010 2011
Newspapers

$128,553

121,636

107,005

102,651

102,866

Magazines

57,789

55,136

49,046

47,549

48,155

Television

178,169

183,277

173,158

179,146

186,573

Radio

38,198

37,361

33,621

33,204

34,041

Cinema

2,287

2,421

2,336

2,472

2,675

Outdoor

30,546

31,395

29,276

29,914

31,792

Internet

41,352

49,994

54,298

60,438

69,695

Total

476,894

481,219

448,740

455,373

475,797

Source: ZenithOptimedia, April 2009

The internet is the only medium expected to actually attract higher ad expenditure in 2009, thanks to its accountability and innovation in ad formats, says the report.

Most of this growth will come from search advertising, concludes the study, as consumers considering a purchase are using search more as they seek out the very best deals. In the US, the report predicts search advertising to grow 9.0% in 2009, while classified grows just 1.8% and traditional display shrinks 1.8%. Internet video and rich media is forecast to grow 29.8%, internet radio 29.7% and podcasts11.9%, but these represent only 12% of US internet expenditure between them.

The study expects television ad expenditure to fall 5.5% in 2009, but this represents an increase in market share from 38.1% to 38.6%, followed by a record 39.3% share in 2010. Advertisers that cut budgets across the board will often cut television last, since they know it best and are convinced of its effectiveness, concludes the report.

Please visit ZenithOptimedia here for more details about the forecast.


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