Posts Tagged ‘media’

October 14th, 2009

Online advertising spend passes TV, all other channels in decline

online-passes-tv1So, another milestone for online;  internet advertising spend has passed TV in its share of the advertising cake.  The IAB reports that online advertising now has a 23.5 % share of the ad market compared to TV’s  21.9%.  

The TV trade marketing body Thinkbox doesn’t like it, claiming that it’s not fair to lump all internet marketing spend into one pot.  But the reality is that the Internet’s share is likely to be even higher than that reported here.

Despite the fact that they condemn TV to second place, the likelihood is that the TV figures are more accurate than the Internet figures  - which are almost certain to be an underestimate. This is because the TV market is supplied by a much smaller number of larger individual players (mostly public companies), making accurate reporting and measurement more feasible. Online spend is established through a analysis of a sample of 135 online advertising companies, but internet transactions are facilitated by a long tail of hundreds of small companies which makes accurate measurement more difficult.  Clearly there is further online advertising expenditure beyond the 135 companies surveyed.

Interestingly, online is the only medium that is growing; all other channels are in decline with press classified down by nearly 40%, directories down by 25%, outdoor down 22%, press display down 20% and TV down 16%.

The 40% decline in classified makes me feel quite proud.  Sometime around 2000, whilst Communciation Planning Director at Initiative, I was asked to address the Newspaper Society’s annual conference and discuss the likely effects of the internet on the newspaper business. The Newspaper Society represents regional press titles, who rely on classified advertising as a key source of revenue. Much to the very real consternation and irritation of the audience I informed the gathered delegates that if they didn’t adapt to the internet, they were staring extinction in the face.  I think they consoled themselves by thinking either a) I was an idiot or b) I was joking.

Labels: , , ,
  • Facebook
  • del.icio.us
  • Digg
  • Technorati
May 6th, 2009

Goodbye to Michael Grade (for now)

michael-grade3Right now I should be working on a click path analysis for a client, but I thought I must drop a line about Michael Grade’s impending departure from ITV - an altogether more tempting way of passing a few minutes.  Grade is a scion of one of the UK’s leading media dynasties - a dynasty that includes Lew Grade and Bernie Delfont, and that dynasty’s contribution to entertainment has been massive, through both theatre and television (The Saint, The Persuaders and The Prisoner to name but three cult classics).  But the achievements of the family elders should not be allowed to detract from the achievements of Michael Grade himself.

Michael Grade is the man who bought us the Big Breakfast, Chris Evans, Jonathan Ross, Peter Kay, Big Brother, Time Team, EastEnders, Clive Anderson, Dennis Potter’s Lipstick On Your Collar, Friends, some really cutting edge episodes of Cutting Edge plus many other land mark events in UK television such as Football Italia and the financial backing of Four Weddings.  But as well as providing support for new editorial ventures, he was also commercially successful.  He found the perfect balance between editorial and commercial imperatives and guided the Channel into its most commercially successful years.  TV thrives on a virtuous circle of great programmes delivering strong audiences which attract good commercial revenue.  Grade placed Channel Four firmly on that upward circle.

The fact that Michael Grade cannot now crack ITVs problems is not a reflection on his ability, but an indicator of the scale of ITV’s problems.  TV is in stormy water. Just as the talkies took over from the silents and the small screen took over from the big screen, and just as video almost squashed cinema and as cinema underwent a resurgence, so television is now having to ride the heavy seas of change.  In these circumstances it needs a strong and visionary navigator at the helm.  Unfortunately, talk of Grade’s replacement inevitably includes the old “merry -go-round” of senior TV executives, but for me none of these will do. To survive, ITV must look forward not backwards to the glory days, it must find a new definition of what it stands for and it must find a new way of monetising content across multiple platforms.  These issues require experience from beyond the cosy world of television. To survive, ITV must go outside TV and into the wider communications market for its next leader.

Perhaps Grade is drawing on his family’s theatrical heritage and following that old dictum of the boards; leave the stage with them wanting more.  One possible error is that he may have left that bit slightly too late.

Labels: , , , ,
  • Facebook
  • del.icio.us
  • Digg
  • Technorati
January 5th, 2009

Sarkozy’s TV advertising ban and the BBC funding debate

French President Nicolas Sarkozy’s recent move to ban commercial advertising from state TV channels during peak time adds some colour to the debate about funding the BBC in the UK, albeit in reverse order. When recently asked whether the BBC should be allowed to carry advertising my answer was ‘no’, not because I share Sarkozy’s views on the beauty of ad free state broadcasting, but because such a move would be financially disastrous for the existing commercial broadcasters in the UK. Here’s why:

Firstly, adding the BBC to the commercial airtime market would be catastrophic for existing broadcasters, forcing many into financial ruin. According to Ofcom, the UK TV market was worth around £3.16bn in 2007. Broadly speaking, TV companies aim to take a share of advertising revenue that roughly matches their share viewing. The BBC took a viewing share of around 28.5% share of viewing in December (BARB). So if the BBC were to take a similar share of the UK’s annual TV spend then it would take around £900m in advertising revenue. But the market wouldn’t necessarily grow to accommodate this, in fact all the evidence suggests that the TV market is in terminal decline with Ofcom warning the market could actually dry up by 2020. So the BBC’s £900m would have to come from the existing (and declining) £3.16bn currently being taken by the UK’s commercial broadcasters. Unfortunately, the UK’s traditional terrestrial broadcasters are not in a position to be generous to the tune of £900m. They are enduring tough times. In the last financial year (2007) ITV reported profits of £188m (down 35% on 2006) and Channel Four lost £8.8m (down from £14m in 2006). So you can see that taking £900m revenue from existing UK commercial broadcasters would completely wipe out all existing profits and leave them staring at bankruptcy.

Secondly, the BBC’s potential advertising income falls way too short of its current licence fee income to be a viable alternative. The £900m the BBC might hypothetically generate from its 28.5% share of the TV advertising market is only around one third of the £3.2bn it currently receives in licence fee income. In fact, as we have seen, the total UK TV market is worth around £3.16bn, almost exactly the amount the BBC gets to run itself annually. Even if the BBC ad sales machine were so successful that it were able to generate a level income equating to double its 28.5% viewing share, that would still not be enough to finance the Corporation.

There has been a counter argument to these views stating that allowing the BBC to carry advertising would make advertising cheaper overall therefore encourage more advertisers to use TV and expand the overall size of the TV advertising revenue “cake”. But this is a fallacy for three reasons. First, advertising could not become cheaper because the broadcasters could not survive if their yield (£ income per viewer) and margins fell further; they wouldn’t exist so any cost reduction / market expansion arguments are rendered purely hypothetical. Secondly, there are cost entry barriers to TV advertising. TV commercials are expensive to make the availability of cheap airtime may not bring TV advertising into the reach of smaller advertisers. And thirdly, any ad budgets looking for a new home are likely to find a more than satisfactory reception on the Internet where short term tactical pay back is much higher than on TV.

Labels: , , , , , , , ,
  • Facebook
  • del.icio.us
  • Digg
  • Technorati
December 3rd, 2008

Can marketing use social media networks for advertising?

,So the mighty P&G has spoken about social media. When these companies speak the marketing community has to listen. These guys think long and hard about the issues to cut straight through the hype. I know because I did it for Unilever. I worked directly with Unilever digital teams to help them understand the real value of digital media to their business. So, what was the basic message emanating from P&G? Well it’s that social media is not “media” and there’s no point in advertising around “someone breaking up with their girlfriend”.

I disagree slightly with the first part of this criticism. Social media is a form of media because it is space which carries content and delivers an audience that can be traded for money. From an advertising perspective these are the core characteristics of a “medium”. The big question comes when we try to explore what type of medium social media actually is.

In reality social media is not social media, it’s personal media. Social media is really comprised of groups of individuals sharing their personal communications. These social media communications are online versions of personal phone calls, text messages or letters. And whilst in some cases individuals may be prepared to publish these communications, it doesn’t follow that advertising placed in them will be effective. Such advertising is the equivalent of a radio ad in a phone call.

Advertising media planning is no longer about reach (and sites like Facebook certainly deliver reach). Twenty-first century media planning is about going deeper than reach, it’s about delivering mindsets, engagement and involvement. And it’s a fact that whilst an individual is deeply involved in a personal communication, like dumping their girlfriend, they are unlikely to engage with advertising in or around that communication. This notion was encapsulated by David Ogilvy who once observed that you’re more likely to get the best direct response from an ad placed in the afternoon movie repeat than in the latest episode of Dallas (The big hit drama of the day). In other words, advertising can’t win when competing with high value content.

A few months ago on I wrote “Advertising on social networks is a Web 1.0 technique in a Web 2.0 world. It may be the case that carrying ads is not a sustainable route for these networks or for advertisers.” I think this remains the case. It’s a problem for the likes of Facebook though, because if they cannot monetize their inventory their value will fall. So how might sites like Facebook monetize their inventory? I think their answer is to monetize the relationships they have with their users. But this isn’t an ad model. It’s something more akin to Seth Godin’s permission marketing and value exchange. Facebook has a brand franchise. It needs to provide added value to its users by teaming up with partners and offering deals to its users. Social media should be an enabler which allows companies and individuals to exchange value.

Labels: , , , , ,
  • Facebook
  • del.icio.us
  • Digg
  • Technorati
May 4th, 2007

MySpace Media Choice


Just been down to my local cash machine where two interesting things happened. Firstly I took out cash directly after (Dr, Sir) Jonathan Miller, neurologist, theatre and opera director, television presenter, humorist and sculptor (Wik.) and secondly, I had this beautifully succinct myspace ad. literally thrust under my nose as I started keying in my request for cash.

Clients often ask how they can use Web 2.0 sites like myspace and youtube etc. Strictly from an advertiser’s perspective I view these sites as an online version of a call centre fulfillment pack. The key point is that you have to be directed there as a route to finding out more information about a topic - just as Dan Bowskill has done. If you go to Dan’s space there’s real value; music for downloading, pics and information.

When considering these types of web 2.0 options, advertisers and their agencies have to ask themselves a Seth Godin style permission/value contract question: Will the prospects I’m directing there feel they’re getting a fair reward for taking the trouble to visit my site? Dan’s site is great “value”. To be meaningful to consumers, advertisers must to be in the same “value” game.

PS - Isn’t brilliant media planning just so simple?
PPS - I wonder what Jonathan Miller made of it?
PPPS - Is this “brand” or “response” advertising? Moreover, does that matter, at all?

Labels: , ,
  • Facebook
  • del.icio.us
  • Digg
  • Technorati