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Roundtable 2007 cohen

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    Roundtable 2007 cohen Roundtable 2007 cohen Presentation Transcript

    • A Perspective onNewspapers in the Digital Age Bob Cohen President & CEO Scarborough Research ASTECH/INMA Roundtable on Strategic Marketing Vail, Colorado August 27, 2007 1
    • Agend Strategic overview of media anda: marketing trends with implications for newspapers Marketing The Internet Media The Consumer Newspapers 2
    • Scarborough Research ● Comprehensive, syndicated annual survey of 81 local markets; national study (USA+) ● Annual sample of 220,000+ Adults (18+) ● Local market samples from 2,000-11,000 ● Continuous Measurement ● Measures demographics, shopping/retail behavior, product consumption, entertainment/leisure, media usage ● Ratings service to the newspaper industry ● Accredited by the Media Ratings Council ●Valid, reliable, effective 3
    • MARKETING 4
    • The Marketing Environment• Markets and brands are maturing, becoming more competitive – Globalization, rapid pace of product innovation• Increasing emphasis on ROI• The Internet highlights improved model of feedback, accountability and efficiency• Improved targeting of prospects• Increasing advertiser/price pressure on media due to oversupply – Media risks becoming ―inventory‖• Increasing Automation 5
    • Marketers Are Challenged By the New• Landscape environment is more Multi-channel/platform complex, as consumers have more choices• More emphasis on managing the overall ―marketing mix‖ – Brands working across delivery channels• Aggressively exploring new options – Product placement; branded entertainment – Word-of-mouth (rediscovered) – Viral marketing, blogs; social networks – Non-traditional OOH (Out-Of-Home) venues: airports, stadiums, in-store, malls, elevators, gas pumps – Wireless/mobile messaging – Online video – Consumer-Generated Media and CGLM• Structure and role of advertising agencies being re-invented 6
    • Marketing: Accountability Leads to• Focus on ROI Metrics on Seeking higher and more identifiable return media investment• Emphasis on ―engagement‖- with media, advertising creative and brands• Useful orienting concept• Re-examining consumers’ relationships with all media – Time, involvement, participation, commitment• Desire to improve on established metrics• Emphasis on creating more effective ―consumer experiences‖• Ultimate Objective: To link increased consumer engagement to sales 7
    • ―Engagement is turning on a prospect to a brand idea enhanced by the surrounding context.‖ -Advertising Research Foundation M14 Committee, March 21 8
    • • Renewed emphasis on what consumers bring to advertising • Relevant progress in field of neuroscience― …Consumers’ decision making and buying behavior are driven more by unconscious thoughts and feelings…include ever-changing memories, metaphors, images, sensations, and stories that all interact with one another in complex ways to shape decisions and behavior.‖ -Gerald Zaltman, How Customers Think: Essential Insights Into the Mind of the Market (Harvard Business School, 2003), pp.14-15 9
    • Forecast for Advertising Expenditures by Media in 2007: ($247 Billion) Radio, $20.1, Out Of Hom e, (8.1%) $7.1, (2.9%) New paper, s Internet, $10.6, $45.8, (18.5%) (4.3%) Magazines $13.6, ,Cable TV, $26.2, (5.5%) (10.6%) YellowPages, $14.7, (5.9%) Broadcas TV, t $47.6, (19.2%) Direct Mail, $61.6, (24.9%) Source: Universal McCann, 2007 10
    • Where is the Growth? Zenith Forecast: US % Change for Select Media0.35 0.3 29.0%0.25 0.20.15 0.1 4.9% 6.0% 3.0% 4.2%0.05 0 -1.0% -1.5% -2.0%-0.05 National Syndicat Local National Overall Magazin Cable TV Online Newspap ed TV TV TV er es Zenith Media, December 2006 11
    • THE INTERNET 12
    • Our mission: To connect peopleto their passions, their communities and the world’s knowledge. 13
    • Our mission: To organize the world’sinformation and make it universally accessible and useful. 14
    • The Internet is Revolutionizing Media• Still at a Marketing of development and very early stage (Web 2.0)• Profound influence within a relatively short period of time• Impacting how consumers are informed, entertained, shop and socialize• Creating a ―flat‖ world (global competitive playing field is being leveled) 15
    • Broadband Connectivity Continues to Grow70 62 6060 49 51 5450 44 38 3940 29 29 3030 2320100 18 - 34 35 - 54 55 + 2003 2004 2005 2006 Based on total adults who have accessed the Internet during the past 30 days Source: Scarborough Research, Scarborough USA+ Broadband is defined as having a cable modem or DSL Release 2 2006 connection in the household 16
    • Broadband Incidence Varies Across Local Markets in the U.S. Of Boston adults, 55% live in60 a HHLD with a broadband Chicago Austin connection Phoenix 44% 50% NY50 47% Oklahoma City 40%40 Fresno 26%302010 0 Source: Scarborough Research, Scarborough USA+ Release 2 2006; Markets ranked by broadband penetration. 17
    • Internet Users Go Online for Many Reasons E-mail 90 Weather 49 News 44 Pay bills 39Download music/listen to audio 31 Travel reservations 26 Financial info 25 Sports scores 24 Games 22 Download/watch video 21 Medical info 21 Auction site 20 Job search 19 Household/Personal Real estate listings 17 Tasks Blogs (read/contribute) 16 News/Information Automobile info 16 Entertainment Download/watch movies 7 Consumer Shopping Casino-type games 7 Fantasy sports 6 Download video games 5 Download podcasts 3 Based on consumers who accessed the Internet during the past 30 days Source: Scarborough Research, Scarborough New York Release 1 2007 (March 2006 – February 2007) 18
    • Consumers are Gradually Spending More $$ Online Median Amount Spent on Internet Purchases Past 12 Months$600 $446 $454 $465$500 $410 $384$400$300$200$100 $0 2002 2003 2004 2005 2006 Based on total adults who accessed the Internet during the Source: Scarborough Research, Scarborough USA+ Release 2 20 past 30 days 19
    • Consumers are Gradually Spending More Time Online 10 Median Time Spent Online (Weekly) 8 5.91Hours 5.07 5.54 6 4 2 0 2004 2005 2006 Based on total adults who accessed the Internet during the Source: Scarborough Research, Scarborough USA+ Release 2 20 past 30 days 20
    • Consumers Are Buying 80 Online Across Many 70 70 64 Categories 60 50 Items Purchased Online 40 Within the Past Year 29 28 27 30 25 25 22 21 17 20 9 9 6 8 7 8 6 7 7 7 5 6 10 4 5 4 5 2 2 0 es ms ets s s ts ies ts le s ets rel ics ase on ok me hic ke ke pli pa ite on ick or ick rch Bo ati ga tic tic ss Ve up ap ctr erv tt ty tt pu ce ts or ne ie au en ele en o res ac ov og ys Pe irli et be ev ev ern er or To M sl A el um ing d ral rav ort ing an Int ltu ns ort Sp rt oth lthny Cu Co Sp the eaA Cl O H 2003 2006 Based on total adults who accessed the Internet during the past 30 days Source: Scarborough Research, Scarborough USA+ Release 2 2006 21
    • The Increasing Impact of „Search‟• The Internet makes marketing more efficient• Search provides business with an efficient and less expensive way to find leads• An increasing percentage of search is ―local‖• We are increasingly searching to find that which we do not know• Search will dominate on-line ad John Battelle, The Search: How Google and Its Rivals Rewrote spending (Jupiter, 2006) the Rules of Business and Transformed our Culture (Portfolio, 2005) 22
    • Established MediaBeing Impacted by theInternet platforms for content• New delivery• Adding new types of content• Evolving into other realms: visual, oral, written• Creating new dynamic relationships• Emphasis on multi-platform• Personalization opportunities• Introduces new challenges and opportunities for branding• More multi-tasking• Impacting audience size and composition 23
    • MEDIA 24
    • Media is in UnprecedentedFlux – A Period of Unsettling and Accelerated Pace•of Change innovation and experimentation Increasing – New content, channels and media experiences – New business models, partnerships• Media organizations vary in their abilities to evolve and compete – Legacy, culture, structure, resources and marketplace assessment• Financial models changing• Consolidation 25
    • Historically, Media Development in the United Statesopenness and transparency• Greater has Evidenced… in the public sphere• Higher levels of commercialization• Greater decentralization• Increasingly rapid extension and pervasive penetration of communication networks• Greater receptivity to new products and technologies –Paul Starr, The Creation of the Media: Political Origins of Modern Communications, (Basic Books,2004) 26
    • Newspaper Print Audiences Steadily Declining, Especially Among Younger Consumers100 Read Any Daily Newspaper (Yesterday)80 71.5 72.9 71.269.7 67.4 67.9 65.4 65.4 67.6 62.3 60.2 61.460 58.7 60.0 53.2 56.0 50.5 46.4 53.7 46.4 42.3 41.5 43.840 36.0 34.520 1996 1999 2002 2005 2006 18-34 35-44 45-54 55-64 65+ Source: Scarborough Research 1996-2006, Top 50 M 27
    • Average Daily Readership is Declining at a Faster Rate than Cume Readership80 77.6 74.9 74 7070 - 9.2 68.4 (11.9%)60 58.9 56.2 54.8 50.5 - 10.050 48.9 (17.0%)40 1996 1999 2002 2005 2006 Daily Cu e m Daily Average Source: Scarborough Research 1996-2006, Top 50 M 28
    • All Established Media Are Experiencing Challenges of Shifting Audience Dynamics Radio Time Spent Listening Annual Rating of Top-Rated TV Sh11:00 40.0 35.0 6:00 1:00 21:15 30.0 18:4520:00 20.0 16.415:0010:00 10.0 5:00 0:00 0.0 Winter 99 Winter 2007 1984-1985 2003-2004 Pers 12+ ons Average ProgramRating Source: Arbitron, Inc Winter 99-Winter 2007 Source: Nielsen Media Research 29
    • The Historical Barriers to Human Communication are Rapidly DiminishingGeographical Time Money Social Class/Culture 30
    • HD RADIO SATELLITE RADIO HIGH DEFINITION TV And more “new” media delivery iPODS PDA‟s options continue to enter the marketplace…VIDEO GAMES APPLE iPHONE DIGITAL OUT-OF-HOME TiVo/DVR/ CELL/MOBILE ADVERTISING “SLING BOXES” PHONES 31
    • Younger Adults are Early Adopters of New Services 100 Wireless Features Currently Use 72 74 80 58 60 40 25 24 22 20 17 15 13 20 12 10 8 9 7 8 6 10 7 8 7 6 4 5 2 3 3 2 1 1 0 ps es s y ing g ing r ail et me be wa gin ern m on cli sag ak ci ga sr ssa E- gt 2 eo Int et es ub eo me rin - vid tm tur lk sS vid Ta pic d re m tan loa les ctu rea d To ra/ Ins loa wn ire Pi me St sh wn W Do PuCa Do 18-34 35-54 55+ Based on total Source: Scarborough Research, Scarborough USA+ Release 2 2006 adults 32
    • THE CONSUMER 33
    • ―Keeping the consumer at the center of the decision-making process is key to identifying solutions to the challenges all of us face in a world that is increasingly more fragmented due to the multiple ways media are consumed.‖ Marketing Officer, ―P&G‖ -Jim Stengel, Global ANA Marketing Musings, September 13, 2005 34
    • The ConsumerConsumer Trends…… Resulting In……• World of greater instability, • Need for community, uncertainty and stress connections• Globalization, a shrinking and and security inter-dependent planet (―the new• Hunger for leadership and normal‖) ―moral compass‖• Economic anxiety, greater $ inequality • Ongoing emphasis on• Political polarization personal choice & control• Increasing ethnic diversity • Need for ―filters‖ and• Generational dynamics downtime• Technology as ―fact of life‖ • Counterpoints of fantasy,• Environmental focus experimentation and status 35
    • But Concerns About Intrusiveness of Marketing Remain High According to The 2005 Marketing Receptivity Survey by Yankelovich Partners • 54% of consumers try to resist being exposed or even paying attention to marketing and advertising • 69% are interested in products that block/skip/opt out of marketing and advertising • 56% avoid buying products that overwhelm them with marketing and advertisingMarketers and Media Need to Respond to Demand forRelevancy and Cut Through Clutter w/o Alienating Consumers “INTEGRITY IN MARKETING IS NOT OPTIONAL” 36
    • US Dept. of Commerce Reported eCommerce (by Quarter) $ billions$35$30$25$20$15$10 $5 $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2002 2003 2004 2005 2006 Source: US Department of Commerce 37
    • NEWSPAPERS 38
    • Newspapers Continue to Appeal to Upscale Consumers 60% 65% 70% 75% 80% 68% 73%Read Pas 5 t 76%Week Days 74% 76% 68% 75%Read Pas 4 t 77% Sundays 76% 79% Adults18+ Luxury Vehicle* European Trip* * HHI $75K+ College Grad+*Model type of any domestic/foreign vehicle owned or leased(HHLD) Source: Scarborough Research 2006, Scarborough USA + R2**Places visited outside continental U.S. past 3 years 2006 39
    • Integrated Newspaper Audience• Newspapers are Successfully Extending their Audience Online –Online exclusive audience is meaningful and often growing, young and affluent –Potential for net increase in newspaper reach overall –Significant increase in online revenue• Key success factors –Integration into the overall business strategy –Unique and specialized content –Relentless cross promotion –Leveraging strong established local 40
    • Website Involvement Extends Newspaper Reach% DMA* REACH: (27.1%) (53.2%) (65.7%) (48.8%) (57.7%) 100% 7.0 6.0 3.8 12.3 11.1 14.9 14.1 21.7 22.0 25.2 % of Total Audience 79.1 82.1 66.0 66.9 67.8 0% NY Times Atlanta Washington Chicago Denver Journal- Pos t Tribune Pos ocky t/R Constitution Mountain New s Print Exclusive Print & Web Dual Webs Exclus ite ive *Designated Market Area (DMA): Nielsen Media Research Source: Scarborough Research, Local Market Studies, R1 defined geographical area based on television signal strength 41
    • Growing Website Audience is Helping to Offset the Decline in80 Print Readership Total Audience 68.4 65.770 -2.7% Dual Web Excl 54.3 53.260 17.2 47.4 48.8 Print Excl -1.1% 16.550 3.1 +1.4% 10.1 11.7 4.6 5.6 7.340 5.3 1.9 3 5.9 28.1 27.130 -1.0% 48.1 44.6 6.2 6 39.8 38.620 38.9 35.6 2.3 3.3 19.5 17.8 -3.5%10 -1.2% -3.3%0 -1.7% AJC Wash Post Chic Trib NY Times 2005 2007 2005 2007 2005 2007 2005 2007 Source: Scarborough Research, Local Market Studies, R2 2005 42
    • …Continued80 64.0% 62.7% 60.1% 57.7% 59.3% 57.1% 63.5% 59.9% -2.4% -1.3% -2.2% -3.6% 1.4 2.6 3.6 1.4 3.7 6.4 6.4 2.2 5.2 5.4 10.4 11.7 8.2 10.0 12.2 12.6 % of Total Audience 52.3 56.2 47.4 49.7 48.3 45.6 42.4 39.1 -4.9% -6.5% -5.9% -6.5% 2005 2007 2005 2007 2005 2007 2005 2007 Denver Post/ Arizona Kansas City San Diego-20 Republic Star Union-Tribune Rocky Mountain News Print Exclusive Print & Web Dual Webs Exclus ite ive Source: Scarborough Research, Local Market Studies, R2 2005 *Designated Market Area (DMA): Nielsen Media Research defined geographical area based on television 43
    • Newspapers areExpanding the Footprintof the Media Brand • Similar to all established media • Development of a portfolio of print, online & video products to better reach the marketplace • Aggregate audience for a total portfolio may actually be growing 44
    • “Part of our opportunity is having multiple platforms to reach the audience in our market…One at a time, they can be niche target opportunities; together they can form the new definition of mass.”Online- Hyde Post, Vice President, Internet, The Atlanta Journal- ClassifiedConstitution Advertising Print Classified Sections Local Specialty Community Publication Newspaper DAILY NEWSPAPER Newspaper Spanish Language Website Publication 45
    • Free vs. Paid Newspapers: Context• Non-traditional publishers (e.g. Metro International) • Strategy — Compete with traditional newspapers to capture current readers and non-readers• Traditional paid newspapers publishing free dailies: • Strategy — Capture non-readers, extend their audience and attempt to upsell to the paid product 46
    • Free Newspaper Readers• Demographics • More likely to be male • Younger • Generally have lower incomes (but not low) • More ethnically diverse • Similar education levels• Distribution points are a critical determinant of the audience composition 47
    • Free Dailies Increase Reach Among Adults 18- 34 Paid Newspapers With Free Dailies Non-Traditional Free Publications Averag Is u Readers ip h 19.3 14.9 e se 11.4 13.0 7.4 4.4 6.7 0 n s k ia rk ne ye ew uic sto lph Yo bu de Bo N Q de Re w Tri ing N/ Ne ila o go etr orn Ph DM / ne ica o M ibu etr o sM Ch etr M Tr lla M ChDa Source: Scarborough Research, Local Market Studies, R1 48
    • Free vs. Paid: 2006-2007: Comparing Reader Groups in New Yo (Average Daily Readership)REACH: 60.1% 57.9% 61.2% 59.0% 67.8% 66.1%100% 2.7 3.0 8.0 7.9 10.4 9.7 5.7 5.9 14.5 14.9 17.0 14.0 % of Total Audience 91.6 91.2 77.4 77.2 72.5 76.3 0% rs rs n n A A tta tta ute ute DM DM ha ha mm mm an an 06 07 Co Co /M /M 20 20 ay ay ay ay bw bw bw bw Su Su Su Su 06 07 06 07 20 20 20 20 Paid Exclusive Dual Free Exclusive Source: Scarborough Research, New York Studies, R1 20 49
    • The Relationship Between Free vs. Paid• High levels of duplicated reading• Free readers more likely to buy more than one paper• Free newspapers’ exclusive readers are a relatively small group. No evidence (so far) that readers will ―trade up‖ to the paid paper.• Free papers do not appear to cannibalize paid papers, suggesting a complementary relationship.• Each local market will have its distinct issues and characteristics 50
    • Conclusion: Overall Implications For•Newspapers Understand print’s role in an evolving multi-media context• Promote Total ―Integrated‖ Readership; sell across platforms• Experiment, innovate, partner in different business models, assume greater risks• Seek new ways of engaging readers, document these relationships to advertisers• Position newspaper as part of a multi- media buy 51
    • …Overall Implications• Leverage brand equity, community orientation, editorial authority• Emphasize information with practical role, providing order and stability in people’s lives• Value of good journalism may be less self-evident to some consumers – requires explanation and emphasis• Environmental concerns likely to escalate 52
    • …Overall Implications• Leverage Consumer Generated Local Media –Likely to become a more important local/community factor, introducing new standards of journalism –Even to ―hyper-local‖ level –More two-way interactive relationships• Tap into local networks to drive visitation to print/online papers 53
    • THANK YOUbcohen@scarborough.com (646) 654-8411 54