Core media outlook 13


Published on

Our view of the media landscape in Ireland for 2013.

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Core media outlook 13

  1. 1. OUTLOOK 13
  3. 3. 2013 is the year we expect to see a return to growth in the advertising economy in the Republic of Ireland. After five consecutive years of decline, we believe the market will now begin to reflect the stability and delicate growth that we are seeing elsewhere in the economy. Overall we forecast 0.7% growth to a total of €698m but this is being driven by the digital sector, which we expect to increase by almost 11% in the Republic. Excluding digital, the underlying position is less favorable, showing a decline of 2%. In Northern Ireland, we anticipate a rise in digital spending of circa 8% this year, but this will be the only sector to see any growth, and overall we are forecasting a fall in total spend of 2.1% to €159m, due to weak demand again this year. When we look at advertising spend on a per capita basis, the difference between the two markets becomes very clear. The level of advertising spend in ROI per capita is €156, compared with only €89 in NI. This is an indicator of the underlying weakness in the region, despite growing business and consumer confidence. Reflecting on the last five years, it occurs to us that one of the key factors contributing to the fall in spend across the island is the lack of evidence within marketing departments regarding how effective their investment was and the implications of cutting back. Every marketer should be able to answer the following question “what percentage of your total sales is exclusively attributable to your marketing activities?” The reality is very few have this knowledge. However, it is likely that most would know what their brand awareness is from their latest brand tracker, but how useful is that? How does that help you to prepare a marketing plan, present a budget proposal, or allocate your marketing resources effectively? ADVERTISING INVESTMENT PER CAPITA IN THE REPUBLIC OF IRELAND IS 75%2 INTRODUCTION GREATER THAN NORTHERN IRELAND
  4. 4. Surely, knowing precisely what marketing contributes to your business is essential and it We are not saying that you shouldn’t invest in brand tracking. It can be genuinely useful incan be established by investing in market mix modeling. However, analysis of this kind is helping a company monitor its brand equity over time and identify potential problems. Itstill demoted in favour of softer, blunter research into brand awareness and brand equity, can also provide useful intelligence on key competitors in terms of brand preference andwhich does little to quantify the impact of marketing on sales or enable marketers to where your brand sits on the consideration set. However, we believe it is given too muchoptimise the mix of their investments. emphasis and carried out too often. When is the last time you ever came out of a brand tracking presentation feeling inspired?Ask yourself, which would help you to convince your Finance Director more….a) beingable to show that 20% of your total sales revenue relies on marketing and that cutting the Investment in marketing analytics will give you immediate guidance on how to grow yourbudget will result in sales decline of 10%, or b) showing him/her your top-of-mind profit. When used in conjunction with all the data that is washing around our companies,awareness trend and what the consumer thinks of your brand? There’s only one answer, it will help to properly evaluate marketing performance, gain insight into purchasing habits,really, isn’t there? and make evidence-based marketing decisions.In our opinion, too much money and time is invested in brand tracking and too little in The use of this so-called ‘Big Data’ is helping organisations of all kinds anticipate the future.modeling and other forms of marketing analytics. Police departments internationally are increasingly using historic data to predict where and when crimes may happen and Barack Obama used it to win a second term by assigningIn Ireland less than €500,000 is spent per annum on market mix modeling. That is a dismal every voter in the country a pair of scores based on the probability that they would a) cast0.06% of the total media spend (North & South). In the UK it is 0.69%, eleven and a half a ballot and b) support Obama.times greater than the Irish figure! In the US the investment level is greater again and a So is this the Holy Grail? No, it’s just one part of it, so is brand tracking but overreliancerecent survey of marketing directors found companies expect to increase the analytics on it will slow you down. Remember, if you do what you’ve always done, you’ll get whatportion of their marketing budgets by 60% in the next three years. you’ve always gotten. Ok, now that we have that off our chest…the following pages provide a snapshot of the Total Advertising Spend (€m) key developments we expect to see this year across the main industry sectors. We hope you find the document useful. If you wish to discuss any of the issues, please feel free to 726.4 693.0 697.8 call me on +353 1 649 6458. In the meantime, best wishes for 2013. Alan Cox 168.2 162.0 158.7 UK INVESTMENT IN MARKET 2011 ROI 2012 NI 2013 MIX MODELLING IS 11.5 TIMES Source: Core Media Estimates GREATER THAN IRELAND 3
  5. 5. Something pivotal happened in 2012; or rather something pivotal didn’t happen. Our worst fears were not realised; it was certainly a mixed year, but it’s worth noting that “mixed” is an improvement on previous years. There is a sense of a fundamental shift in the air. 2013 is being heralded as the first year we can start to look forward again, as opposed to the years of backward glances and naval gazing. In the Republic of Ireland, away from the sound bites and politicking, Budget 2013 was one of pain, certainly, but also progress. It was our fifth ‘recessionary’ budget, but it’s worth noting that as defined in pure economic terms, neither the Republic nor Northern Ireland are in recession. Although growth is admittedly weak both sides of the border, sentiment surveys are showing some signs of recovery, albeit from a low base. Sentiment indices for 2012 have been the strongest in four years in ROI and are on the rise in NI. Figures for January this year in the Republic continued the recent upward trend and received a considerable ‘bounce’ after the predictable fall off in December. The budget also prioritised business, in terms of the Foreign Direct Investment and SME sectors, rather than domestic spending, which seems a prudent medium-term strategy. As a result, there will be no huge change in consumer spending in 2013, rather a more measured approach. However, high street retail sales in ROI have begun to turn a corner in the last few months of 2012, with December seeing a volume increase of 0.8%. More encouragingly, the value of these sales was up by 1.1%. Two of the key factors affecting sentiment in 2013 will be the Irish presidency of the EU, and the G8 summit in Northern Ireland; both of which are leading to considerable international focus. It was timely that our presidency corresponded with the final crunch talks on the promissory notes debacle, and perhaps it was of some help in securing the landmark agreement. While the Government’s success will have little impact on our individual pockets, the new deal should signal a significant increase in consumer confidence and faith in the future. As a central bank source said recently in the press, “It’s not that paradise starts tomorrow. It’s not heaven on earth all of a sudden. It’s a good first step” So, what are the key trends in addressing consumers in 2013? THE “IT’S NOT THAT PARADISE STARTS TOMORROW4 CONSUMER IT’S NOT HEAVEN ON EARTH ALL OF A SUDDEN IT’S A GOOD FIRST STEP”
  6. 6. 01 RESEARCH 02 BE HONEST, NOT PERFECT 03 MEDIUM TERM PLANNINGResearching and understanding the consumer has This was an opportunity area we identified Changing consumer behaviour takes time. Wealways been important. However, many brands twelve months ago and it is still rich and fertile often over-emphasise the importance of oneare guilty of neglecting the fact that consumers territory, perhaps more so. Brands have a real year, and under-emphasise the importance ofalso conduct research. A recent study by Google opportunity to learn from the emerging three and five year cycles. Consumer decisionshas highlighted that almost every purchase is technology sector and start ups, who constantly are rarely sudden; they take time to form andresearched by consumers. Google have dubbed act on customer feedback to improve products. develop. Advertising is most effective when itthis the “Zero Moment of Truth”. Consumers are The benefit of this approach is that brands begin is consistent and long-term, continuouslylooking for proof points before purchasing, as an honest dialogue with consumers. driving consideration; facts supported by IPAopposed to the classical view of marketing in and Thinkbox show that consistent presencewhich trial was the proof point. The brand can get real time, beneficial feedback can be up to twice as effective as bursts. and take actions which will lead to real success. “Going dark” for periods of time leads to a drop IMPLICATION In addition, the consumer gets their opinion heard, gets to genuinely improve the product in consumer intent, and money needs to beThe research period often lasts longer than a reinvested in recapturing that lost awareness.standard campaign or burst of advertising, and has reason to become an advocate.leading to a clear role for search advertising and Mistakes will happen and consumers respect that; it’s how you respond that matters. IMPLICATIONbehavioural targeting. Using these tools to Brands prepared to take a longer view stand toensure that your brand appears during the make considerable gains. There are efficienciesresearch period will give the brand vital stand IMPLICATION in terms of awareness planning, and ad stockout during a key stage. It is the digital equivalent Be open. Be honest. Tell consumers what went development, not to mention real businessof making sure the shelves are stocked and the wrong. Use the dialogue allowed by social benefits from setting three year objectives.doors are open for business. media to apologise, to discuss with and to help Prioritising messaging and products over a consumers out of the situation. longer period will also provide a significant advantage versus competitor brands and Being contrite about mistakes, and canvassing translate sustained awareness into sales. opinions on products and advertising can be “Always on” approaches should be explored. extremely beneficial. It helps personify the CONSUMER CONFIDENCE brand, and moves the relationship away from This doesn’t have to mean larger budgets; it can often be achieved by re-phasing; moving to RECOVERING IN ROI AND NI the commodity territory into something deeper. lighter and longer campaigns. ROI NI SEARCH ADVERTISING IS THE DIGITAL Dec 09 Dec 10 Dec 11 Dec 12 EQUIVALENT OF MAKING SURE THE Source: KBC/ESRI (ROI) & Danske Bank (NI) Different index bases For illustration only SHELVES ARE STOCKED, AND THE DOORS ARE OPEN FOR BUSINESS 5
  7. 7. Smart TVs, tablets, video-on-demand, catch-up, SKY Go, 3-D, Ultra HD, Netflix and Apple TV are just a few of the technological advances that have revolutionised how we watch ‘television’ content. 2013 will be the year that we understand how this is affecting consumers. However, before predicting the future it is important to comment on the present. Television viewing in Ireland is higher than ever before. The average adult watched 3 hours and 35 minutes of TV in 2012, an increase of 19% on 2000. Even young adults under 34, who are generally early adopters of technology, are watching 4% more TV than 2000. In Northern Ireland, viewing is up 29% in the last five years for adults. The faster rate of growth in NI is due to infrastructure upgrades, which increased the number of homes with multi-channel television. So, why is television performing this well despite the challenges of a digital world? The main reason has been the growth of Digital Video Recorders (DVRs) which are now in 53% of all homes in the Republic and 44% in the North; the easy access they provide to content means there is always something to watch. In fact, homes with DVRs watch 16% more TV content. Although TV viewing is on the up, viewing to commercial breaks is not. One consequence of the TV revolution has been the ability to “ad-skip”. In the US where the DVR market is mature, 55% of commercials are skipped when time-shifted. This compares to only 30% in less mature markets such as the UK & Ireland. It is important to note that the above figures are for time-shifted viewing only. Despite all the hype surrounding DVRs the vast majority of our viewing is still watched “live”. In Ireland only 8.4% of viewing is time-shifted; therefore, only 3% of all TV commercials seen in a day are skipped. Not in my household, you may reply, but remember you are not a typical viewer. It is naive to suggest that things will always be this way; skipping will inevitably increase and become a major issue in years to come as consumers become more used to time-shifting. However, this is taking longer than expected and in 2013 commercial impacts are only likely to decline by 1% due to this technology. Other factors relating to falling programming budgets may result in an additional 2% fall in commercial impacts. In terms of spend, TV will see a return to growth this year of 1% in the Republic, but we expect a 2% decline in Northern Ireland due to lower demand in the region.6 TELEVISION ONLY 3% OF ALL TV COMMERCIALS ARE FAST FORWARDED
  8. 8. 01 SECOND SCREENS 02 ADDRESSABLE ADS 03 VIDEO-ON-DEMANDThe combination of internet access and TV Soon, with the advent of “return path data” from Overall, online video viewership is still veryviewing presents interesting opportunities for set-top boxes, broadcasters will be able to play small compared to traditional television. If weadvertisers. 58% of Irish viewers are online out seperate commercials to individual include all video-on-demand (VOD) touchpointswhile watching TV with the consequence that households. Advertisers will be able to target available to Irish advertisers (players, networksviewers can be active consumers at the same campaigns to exactly the people they want to and YouTube), the market is only delivering 2.7%time. In 2013, we will see this figure increase reach. In effect, two households on the same of commercial impacts. One trend that willas penetration of tablets rise; owners of these street will see different commercials depending grow the size of the VOD market is the increasedevices are 20% more likely to watch TV and on their location, affluence, children’s ages, life in homes without a TV set. The recent digitalsurf at the same time than owners of other stage, and financial outlook. SKY will begin switchover in ROI has already caused thecomputers. Furthermore, 63% of Facebook testing this technology in Northern Ireland in Q3 number of TV homes to fall from 96% to 93% ofusers say they “often or sometimes” use the 2013 and in the Republic in Q2 2014. households. It is reasonable to assume that asite when watching television. significant percentage of these homes are now IMPLICATION watching television purely online. IMPLICATION While this may be seen as the Holy Grail, thereIn 2013 we will see broadcasters offer more cross- are some data protection issues; unlike the UK IMPLICATIONmedia opportunities that harness this media (incl. NI) where customers have to opt-out of Despite being a small element of the market,meshing. Indeed, future content will be produced giving their personal information when signing up the audience watching TV online is significantwith this in mind. Different genres of programming to TV services, consumers in the Republic of and growing. It is also young, a segment thatexperience quite different reactions in social Ireland have to opt-in. This could significantly TV stations are finding harder to, as can be seen from the Homeland & X- reduce the number of addressable homes in the However, research into its contribution is thin.Factor examples shown in the chart below. This Republic, although Sky is searching for a way to Google and Channel 4 have both conductedwill influence scheduling of TV commercials to circumvent this problem. There will also be issues studies in the UK, but nothing in Ireland. Weobtain the highest levels of engagement. Across regarding the way airtime is sold, which will lead are keen to make our own assessment, and inEurope 33% of ‘second-screen’ viewing is directly to higher priced inventory, but 2013 Core Media will produce its own researchrelated to the content being watched on the ultimately more efficient into how VOD affects TV campaigns on thistelevision; this highlights the importance of a campaigns. island.consistent online and TV strategy. TWEETING PATTERNS VARY BY PROGRAMME TV SPEND (€M) 213.0 202.0 200.3 VIDEO ON DEMAND ACCOUNTS 97.4 91.6 89.7 XFACTOR HOMELAND 2011 ROI 2012 NI Source: Core Media Estimates 2013 Source: Second Sync FOR ONLY 2.7% OF TOTAL COMMERCIAL AUDIENCE 7
  9. 9. As stated in last year’s outlook, the “news” part of newspapers is doing fine. It’s the “paper” part that’s the issue. In the intervening time, most of the industry have accepted this. Last summer, the Newspaper Marketing Agency, the body that seeks to raise awareness of the value of newspapers in the UK, was rebranded as Newsworks. This new name, removing the word "newspaper" from the title, is indicative of the changed landscape of the industry. Similarly, its members are now referred to as “newsbrands”. This change is symbolic of the new reality in the national press industry, which now needs to operate across a range of different platforms – desktop computers, laptops, tablets and smartphones - as well as print. While this might appear cosmetic, there is no doubting the importance of branding. A product’s brand is a statement of intent. Not only does it inform its users what to expect and what it stands for, it also helps the company stay focused and inspired. 2012 was a tough year and another lean year is predicted. An industry-wide reframing and renaming of the newspaper business will show how the sector is embracing the changing way news is being consumed. Removing words like “paper”, “print” and the related iconography from the industry’s awards ceremonies, representative bodies etc. will bring more integration and will encourage agencies to incorporate the full scope of what each publisher has to offer. NEWS INTEREST IN NEWS IS SOLID8 MEDIA READERS ARE MERELY CHOOSING DIFFERENT METHODS OF CONSUMPTION
  10. 10. 01 BIGGER DATA 02 PAY TO PLAY 03 A MATTER OF TRUSTWhile there is no doubt that the Joint National The perennial question “why would I pay for content A recent study by the Annenberg Centre in the USReadership Survey (JNRS) is a very robust piece of that I can get for free?” still needs a decisive industry- found most internet users have limited trust in theresearch, the content has been growing less relevant. wide answer. This is a challenge all publishers must information they find online. Only 40% of users saidAlternative sources such as Target Group Index (TGI) face, as digital editions become a larger part of their that most or all of the information on the Internetare being used to make ‘macro’ planning decisions, business. According to the Audit Bureau of is reliable – a decline from 55% in 2000.given the greater breadth of information available Circulations in the US, digital newspaperthrough lifestyle statements and brand consumption. subscriptions saw a surge of 63% in 2012. It now Internet users rated newspapers highly for theThat said, the JNRS data is still the currency by which accounts for 14% of the total circulation mix. A‘micro’ planning decisions are made, due to the larger quality of news content, the breadth of coverage standardised global payment model needs to be insample size of the survey. There is a clear need for and the trustworthiness of the reporting. place before the end of 2013 if Irish news media areresearch that combines the robustness of the JNRS to capitalise on a digital “cover price”. Furthermore, 63% of online users said theywith the flexibility and usability of TGI. Another issue would miss the print edition of their newspaperhas been the lack of research that combined the printand digital audiences for news media. IMPLICATION if it was no longer available, an increase of seven percentage points since 2007. Are Ireland’s readers ready to subscribe to premium content? We think the answer is a resounding “yes”. IMPLICATION The proliferation of tablets, consoles and smartphones IMPLICATIONThe industry understands the need for change and has normalised low-cost digital subscriptions.has taken positive steps forward. Firstly, it has The lack of trust that consumers have in contenttackled the digital issue; respondents are now being Some newspaper titles are having success through they find online represents the greatestasked about their consumption of the print, digital and the introduction of a pay-walled digital & paper model. argument for news brands to embrace theonline iterations of a title. Top-line results will be The New York Times has grown its total paid digital challenge. It also makes a clear businessreleased in the next survey, with full data available in circulation by over 40% to 1.6 million. This is split case for charging users for this trust.the autumn. Initial results are very encouraging, roughly 50/50 between the digital and paper versions,showing what every smart planner suspected; but from Monday - Friday there are around 25% more Trust is the most valuable asset that any newsconsumption of news is solid; readers are merely digital subscribers than paper. On Sunday, however, brand could hope to attain. It takes many yearschoosing different methods of consumption. it is reversed with 47% more papers sold than online to nurture and Irish publishers have it in spades.Secondly, the NNI is joining representatives from subscriptions. It is important that they push forward with plansRadio, TV, Outdoor and IAPI to explore the to monetise this competitive advantage whilst With international precedent andintroduction of a cross-media research initiative, local appetite, our titles should they still have it. In a world of confusion andwhich would provide a holistic and robust view of commit to a standardised pay fragmentation, trust is the most valuableconsumers’ media behaviours. GLOBAL DEVICE SHIPMENTS structure, which will place commodity of all. 300,000 real value on the premium nature of the product. NEWSPAPER/ 250,000 TABLETS MAGAZINE SPEND (€M) 200,000 215.5 150,000 184.0 SMARTPHONES 170.0 100,000 27.8 26.5 24.9 50,000 PCS TRUST IS THE TRUMP CARD THAT 2011 ROI 2012 NI Source: Core Media Estimates 2013 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Source: Gartner, IDC, Strategy NEWS BRANDS HAVE TO PLAY IN Analytics company releases THE DIGITAL FUTURE 9
  11. 11. In 2012 investment in online media increased by 14% on an all-Ireland basis, taking 22% share of total media investment in the Republic, but only 10% in Northern Ireland. The key drivers of growth have been ‘richer’ ad formats (e.g. home page takeovers), video-on-demand and mobile. This growth is set to continue and by 2015 we expect online will be the largest media sector in the Irish market, commanding 28% share of spend. The advent of programmatic media buying will gain momentum this year as more Real-Time Buying (RTB) solutions become available. This will open up new options for direct response advertisers to derive stronger return on investment, as these platforms allow for greater targeting and use of campaign data. Search is still dominated by Google, which accounts for 95% of revenue. Bing has failed to make an impact so far, which is unfortunate because the market needs an injection of competition. Mobile spend is growing and is likely to reach €4m in ROI this year. The NI market is at an earlier stage of development and investment is likely to remain under €500k in 2013. However, this is just the beginning; by 2016 mobile spend will treble to almost €15m across the island. 2013 will see further growth in the tablet space with increased choice and possibilities. By the end of this year there could be 1.25 million devices in NI & ROI combined. The growth in social media penetration is leveling off, with over 3 million people on the island using at least one of the social networks. However, usage continues to rise as smartphones open up the ‘always-on’ culture. Facebook, YouTube and Twitter continue to be pervasive, but we see discreet audiences building across other networks such as Tumblr, Pinterest and Instagram. For the B2B market Linkedin is still the only game in town, with over 800,000 monthly users across the island. We shouldn’t write off Google+, because the company is determined to position it as the glue that brings together its interfaces across search, mobile and software. As social content becomes more search-friendly expect to see Google+ being used as part of more effective SEO strategies in 2013.10 ONLINE BY 2015 ONLINE WILL BE THE LARGEST MEDIUM IN IRELAND WITH 28% MARKET SHARE
  12. 12. 01 MOBILE EVERYTHING 02 LISTEN & LEARN 03 DATAConsumers have adapted to smartphones in huge The Social Graph is the network of content that All companies are producing massive amountsnumbers; penetration has passed the 50% mark in search engines such as Google trawls to provide of data as a by-product of their interactions withROI and is approaching 40% in NI. Up to 3 million consumers with opinion and feedback on everything consumers. However, most companies are notdevices will be in use across the island before the end from world politics to the best marinade sauce. These harnessing this opportunity for commercialof the year. However, an estimated 95% of Irish searches are not only being done via the traditional gain. Companies like Amazon, Google andwebsites are not built for mobile; they are too fat and search engines; ‘social search’ is also becoming an Facebook only make business decisions basedcumbersome. Expecting a consumer to squeeze and important feature of the market. on highly sophisticated data-led insights, andpinch a content heavy site will just lead to losing Many brand owners are not recognising the power that data is the driver of their business success.them. With mobile Internet usage forecasted toovertake desktop usage, every business needs to and influence of the Social Graph as a means to A recent survey by Experian found that 72% ofrethink how they are presented online; a mobile-first understand consumers - what they are saying about companies have started to implement a ‘singlestrategy is what’s needed. your brand, your competitors, what they like, what customer view’, but… only 2% can currently they dislike, what they want. Effective social listening integrate all of the data they capture. It is IMPLICATION provides insight on tap and, in the right hands, will power a business like never before. mission critical that all companies have a dataAny brand that relies on its website to deliver business strategy to refine their business planning and grow revenue.results needs to have a strong mobile presence. Sitesand content management systems need to work IMPLICATIONacross all Internet platforms, creating a seamless Every consumer segment is now online, so brands need effective social listening programmes to garner IMPLICATIONexperience for the consumer. Techniques such as Organising data within a business can be insight from the Social Graph. This is not about‘responsive design’ will become more prevalent, as complicated as there tends to be multiple, collating the comments on a Facebook page but athey allow for the development of one master site that unconnected sources that need to be brought formal structure for aggregating social content andwill intuitively work across all devices. together. When effectively aggregated, this opinion to generate insight.Consumer behaviour on mobile is different to the data can facilitate better strategic decisions as It is important that social insight is treated as well as identifying immediate opportunities tomore familiar desktop behaviours. It is imperative seriously as other forms of research used for tailor, personalise and track the outcome ofthat site owners gain an understanding of this new marketing planning. It will deliverrealm by implementing effective tracking and marketing messages faster than previously results when structuredusability studies. In a few years desktop Internet may effectively. But, remember possible. Imagine being able to feed data frombe a secondary market as consumers move to other ONLINE SPEND BY TYPE a brand cannot be so this morning’s retail sales into this afternoon’sdevices such as the smartphone, tablet & smart TV. democratic that it search & display campaigns; it would shorten actually listens to sales cycles, reduce wastage and increase everyone. Part of profitability. ONLINE SPEND (€M) CLASSIFIED the reason a brand 21% actually exists is 167.0 because it offers a 150.7 SEARCH 130.0 45% specific point of view. DISPLAY 2011 15.3 16.2 2012 17.5 2013 34% ONLY 5% OF IRISH WEBSITES ROI NI Source: Core Media Estimates Source: IAB/Core Media ARE MOBILE READY 11
  13. 13. We expect radio to fare better than most media in the Republic of Ireland with 1.5% growth in spend this year, due to its ability to attract revenue from local advertisers, who will become more active in 2013. The Northern Ireland market will be less fortunate with spend levels likely to fall back by 2%. Despite the small growth in spend in ROI, many stations will continue to struggle financially; we estimate that less than 50% of stations are profitable in the current climate. Thankfully, the BAI has relaxed its 20% rule in relation to news and current affairs content on music-driven/niche stations. Broadcasters such as Phantom and Nova have received approval to reduce their current affairs output to 12% and 10% respectively, whereas Beat’s requirement has fallen to 15%. These changes will reduce the overhead burden and improve the flow of programming across the day on these stations. Radio broadcasters in the Republic feel they have been put at a disadvantage since television commercial codes were relaxed in 2011 with the introduction of product placement. They will continue to lobby the Broadcasting Authority to permit commercial references to be integrated within programming, as is the case in Northern Ireland. We expect the BAI to take these concerns on board and make the appropriate changes. The development of digital broadcasting has stalled in the Republic. Digital, in one guise or another, will inevitably take over from analogue in the future, but it will be interesting to see if it’s DAB or internet radio that wins in the long run. The emergence of internet ‘pure-play’ streaming services is an exciting development that poses a serious threat to the domestic radio sector in the medium term. Traditional radio will endure because people want the two-way relationship, but according to research we carried out in January, 18% of regular listeners listen to radio for music, and for no other reason. This is a substantial minority who are likely to convert to the online option gradually over the next few years.12 RADIO 18% OF REGULAR RADIO LISTENERS LISTEN TO RADIO FOR MUSIC, AND FOR NO OTHER REASON
  14. 14. 01 INTERNET RADIO 02 MOBILE 03 SONIC BRANDINGIn the future, the industry’s focus will shift from the The vast majority of listenership to radio takes Memory and sound are inextricably linked. We allrepetitive nature of formatted radio to a concentration place where we live; 65% of weekday prime- remember music from commercials we experiencedon the user experience and real choice that internet time listening in the Republic is done at home, in our childhood and memories come back when weradio offers. We are not referring to simulcasting of FM 13% at work, 20% in the car and just under 2% hear them. Today, these devices (such as McDonaldstransmissions online, but the exciting development of on our mobiles. With smartphone penetration Ba da ba ba ba or the Intel Inside sonic device) are‘pure-play’, where the listener designs their own music growing all the time, the incidence of mobile as important as visual brand, and can pause or skip the music. This form of listening will grow, but it’s the car where the biggest revolution will take place. In the words of production company, MassiveMusicradio has taken off in the United States, where themarket leader, Pandora, already has 66 million active The ‘connected car’ will combine the benefits of “With music we can have enhanced memory recall.users and 8% share of all radio listening. a smartphone with the latest in-car audio Tying the proper music and sound design to a brand systems. Ford has achieved this marriage of can create a sense of familiarity, comfort and a directPandora is not accessible in Ireland, but similar technologies to bring the internet to the car in memory."services are available; the most recent addition, the United States. It’s called SYNC AppLink andSpotify, has a database of over 18 million songs, provides motorists with a way to listen to online Many sonic triggers are created for TV and thenproviding users with vast choice across all genres. radio using voice commands. It also provides adapted for radio, with consequent benefits in termsUsers can select a free service (with advertising) or access to innovative apps like Kaliki that read of frequency and campaign longevity. However, onlypremium commercial-free options ranging from magazine articles to you! The system hasn’t a minority of campaigns make use of this effective€4.99 to €9.99 per month. Since its launch in ROI in reached our shores yet, but these exciting technique.November Spotify has secured 65,000 active users technologies will breathe new life into the in-carand hopes to reach 140,000 by the end of this year. experience over the next three years. IMPLICATION Sonic branding not only provides stronger recallPenetration in NI currently stands at 25,000. IMPLICATION among your core target market, it also delivers the IMPLICATION The big question is whether internet radio will win out over the Digital Audio Broadcasting (DAB) added benefit of connecting with tomorrow’s consumers. This can create a warm and long lastingAlthough pure-play accounts for only a fraction of platform, which has been heavily backed in the UKlistening in Ireland today, we expect it to grow to 20% connection with the brand as consumers mature over in recent years. 33% of all new cars in the UK haveby 2020. Interest in the sector will be piqued when DAB installed, but the technology is time.Apple launches its own ‘radio’ service in the first half already outdated and has been However, selecting the right musical device is notof 2013. While these webcasters offer commercial- overtaken by the internet in easy. It should be carefully chosen and tested tofree options, circa 80% still choose the standard terms of quality and THE PRIMARY REASON FOR choice. With car predict its potential to stimulate a positive responseservice and can therefore be reached through for the brand.advertising. Enhanced targeting can be secured LISTENING TO RADIO manufacturers inbased on demographics, location and music LIVELY other countriesgenre. DEBATE 11.3% moving toward internet LOCAL RADIO SPEND (€M) NEWS devices, DAB 14.1% is beginning to 103.0 97.0 98.5 look quite PRESENTER 11.6% redundant. MUSIC 18.2% 13.0 13.3 13.0 NEWS, SPORT 2011 ROI 2012 NI 2013 Source: Core Media Estimates Source: Core Media/Ignite & TRAVEL 38.7% DIGITAL AUDIO BRODCASTING (DAB) IS Research BEGINNING TO LOOK QUITE REDUNDANT 13
  15. 15. 2013 will be another difficult year for out-of-home media. We are forecasting a further decline in revenue of 2% in the Republic and 5% in Northern Ireland. Significant price reductions are being achieved due to the decline in demand, and while agencies will continue to put pressure on improvement, we expect media owners to seek yield protection in 2013. However, the focus will not just be on price; we will keep applying pressure in relation to the quality of plant and no low grade panels will be tolerated. This will result in the industry continuing to cull less desirable sites. Billboard inventory decreased by over 6% in 2012 and we expect a further 4% decrease this year in tandem with an improvement in the presentation and quality of large format panels. 2012 saw the release of the new Dublin Travel Survey, which drives the coverage & frequency model for outdoor campaigns. The survey’s new methodology has led to a re-calibration of coverage norms for the medium, enabling planners to deliver desired coverage levels while purchasing fewer sites. It will be interesting to see the results from the planned Cork Travel Survey when released later this year. In addition to delivering improved value and accountability, the OOH sector will have to continue to innovate in order to reverse revenue declines. Alcohol advertising currently accounts for circa 15% of outdoor revenues, but the imposition of restrictions by the Government may see this fall further in 2013, potentially leading to an outright ban during 2014. The medium has faced challenges like this in the past; the answer is to reinvent and invest in order to make the medium more attractive, flexible and effective. OUT OF14 HOME THE NUMBER OF DIGITAL SCREENS IN ROI WILL GROW TO 1,400 IN 2013
  16. 16. 01 POINT OF SALE 02 VIRUTAL RETAILING 03 DIGITAL FORMATSPoint-of-Sale advertising continues to grow and by In 2012 Eason launched Ireland’s first virtual book The number of digital screens in ROI is expectedthe end of 2013 we expect it to account for 18% of shop at Connolly Station in Dublin. Here commuters to grow from 930 in 2012 to 1,400 this year. Thethe total OOH market in Ireland (North & South). can buy bestsellers by scanning the QR code on the NI market is less developed with only 27 displays. book with their smart phone. In China a leading e- Advertising messages on these screens can beHistorically, many FMCGs used larger formats to commerce company ‘Yihaodian’ is launching over daypart or day-of-week specific. This technologydeliver brand campaigns. However, with an 1,000 virtual supermarkets where shoppers can also offers other opportunities; for example, inincreasing emphasis on following the consumer ‘path browse around an augmented reality version of a New York, the public transport company is testingto purchase’, POS formats have grown in importance. store, purchase products and receive delivery straight digital advertisements on bus-sides where the to their door. message can change depending on the bus IMPLICATION location or weather conditions.The increased focus on POS has led to an increase in Innovation in China is seen as a good predictor ofinnovation. ‘Retail Adtowers’ were recently launched future retail trends; PWC believes China may leapfrog In terms of interactivity, Near Fieldin forecourts, supermarkets and off-licenses. In the retail landscapes seen in the West, going straight Communications (NFC) is now gainingaddition, Clear Channel has developed a number of to a model with fewer stores that are used as momentum. NFC has a number of valuableretail packs, which contain 6 sheet sites in close showrooms and collection points for online shoppers. features; it enables the consumer to downloadproximity to leading retailers. content by holding their mobile device close toOver the longer term, marketers must remember to IMPLICATION a poster, and allows the consumer to make a OOH offers companies the opportunity to reach target contact-free credit card payment.bring balance to their communications plans; core audiences in ‘the right place’. This does not justbrand metrics will suffer if there is an over-relianceon short-term price promotion communication. POS relate to a location but also to their mindset - IMPLICATION communicating with potential customers when and With the increased mobility of consumers andformats should continue to be used for what they do where they are most likely to be receptive. omnipresence of smartphones, digital OOH willbest, which is to communicate in-store offers and continue to transform traditional outdoor in‘new news’ about a brand, but this needs to be Already consumers have shifted €4 billion away from areas with high footfall such as shoppingbalanced with brand building further back on the path regular high street outlets to online centres and public transport hubs. This formatto purchase. channels in Ireland. Virtual retailing needs to be planned differently from regular and mobile commerce will outdoor panels in order to deliver on the full continue to drive this forward. benefit of their interactivity and flexibility. ROI DIGITAL PANEL GROWTH Various out-of-home formats Although the higher costs of these panels will evolve not just to reflect the potential added benefits, too often deliver communication the final creative executions do not exploit the OOH SPEND (€M) 1400 but also to facilitate e- potential offered by these screens. 57.7 930 c o m m e r c e 54.0 53.0 811 opportunities. 13.0 12.5 11.9 2011 2012 2013 OUTDOOR MUST REINVENT AND INVEST 2011 ROI 2012 NI Source: Core Media Estimates 2013 Source: Poster Management Ltd. IN ORDER TO MAKE IT MORE ATTRACTIVE, FLEXIBLE AND EFFECTIVE 15
  17. 17. Much like the latest Twilight instalment, 2012 could be described as a solid sequel to 2011, not breaking any records but performing respectably. In a year where many media struggled for consumers and revenue, cinema fared better than most. Overall admissions were down 4% on the island, with box office receipts down by 3%. Less disposable income and emigration were blamed by industry insiders. An examination of the figures shows that geographic areas experiencing higher emigration have suffered more as cinema’s core audience of 18-34 fled these shores. It is estimated that this age segment shrank by 40,000 in the last year. In sharp contrast to the audience declines, advertising investment actually increased by 1% in ROI, due mainly to significant year-round activity by P&G. Northern Ireland spend was up by almost 16% because of a major lift in cinema investment across the UK due to the success of Skyfall. However, this growth will be reversed in both regions in 2013. Once again the Irish box office charts looked like a Halloween party with superheroes, vampires, hobbits, a sabre toothed tiger and even a teddy bear dominating. Battling it out for top spot were Christian Bale as Batman and Daniel Craig back as 007; suit and tie won out over cape and cowl as James Bond in Skyfall proved a big a hit with Irish cinema goers, narrowly edging The Dark Knight into second place. The march towards digital continued in 2012. 70% of all screens in the Republic and 90% in Northern Ireland are now digitally enabled. It is expected that all cinemas will be fully converted to digital by the end of the first quarter. This is a major step forward considering that only 47% of screens were digital this time last year in ROI and 25% in NI.16 CINEMA ALL CINEMAS WILL BE FULLY CONVERTED TO DIGITAL BY THE END OF Q1
  18. 18. 01 RISE OF HOME CINEMA 02 ENHANCED VIEWING 03 BUYING DIGITALThere is a range of entertainment options available, As cinema suffers from the growth in video-on- By the end of quarter one this year, all screenswhich directly compete with cinema. Netflix, UPC on- demand it is employing technology to hit back. The on the island of Ireland will be digital. This is ademand, SKY Go and Apple TV all allow consumers to industry is betting on ‘enhanced viewing’ as the way watershed moment and offers excitingview high definition movies from the comfort of their to sell the cinema experience. IMAX is the best opportunities for advertisers. One of thearmchair, for less than the price of a cinema ticket. example of this where patrons are treated to a more barriers to entry has been the production costs spectacular and immersive viewing experience involved. Producing a cinema version of a TVIt is difficult to quantify how much on-demand viewing through the latest digital projection and surround commercial was expensive and timeis taking place, but a conservative estimate puts the sound technology. There are now two IMAX sites in ROI and the company is is also considering re- consuming. This will now be a thing of the past,market at 650,000 homes in ROI and NI combined.Netflix (with 87,000 unique users in ROI and 43,000 in opening its screen in Belfast. dramatically reducing the entry cost forNI) has said that its service has taken off faster in advertisers. Furthermore, it will offer greaterIreland than in the UK. Odeon has also introduced two ‘isense’ screens and flexibility when it comes to targeting specific Omniplex is launching its first ‘Omnimax’ screen in films, regions and copy changes.Cinema’s biggest advantage is that it’s the only place Drogheda; both are similar products to IMAX. It seemsto see the very latest movies. However, this advantage that a technology arms race is underway between providers of in-home and out-of-home viewing to win IMPLICATIONis diminishing; Skyfall finished its cinema run in the Carlton Screen is expecting to launch its planssecond week of December and will be available on the battle for consumers’ entertainment time. for selling 100% digital in March and is keepingiTunes, just 12 weeks later. While cinemas are stronglyopposed to any shortening of this gap, this trend looks IMPLICATION tight-lipped about details until then. However, at a minimum the usual barriers to cinema suchset to continue as ‘on-demand’ providers strengthen With on-demand clearly here to stay, cinema has to keep giving people reasons to consume their product as cost, time and flexibility should be reduced.their ties with the big film companies. Agencies will of course be keen to see what out of the home. extra can be done. In a world where the next IMPLICATION IMAX is not new to Ireland - this is its second coming. step for TV is to serve specific creative toCompetition amongst the different suppliers of on- However, rather than short films produced to specific audiences, 100% digital should allowdemand should see the quality of movies improve and showcase IMAX, each distributor tailors its biggest exciting developments in targeting thosethe price drop. These factors combined with faster releases for the enhanced viewing watching the silver screen.broadband should see a big increase in on-demand experience. IMAX and itsviewing in 2013. This will have an impact on cinema imitators are becomingadmissions and we expect a further decline of 2% in CINEMA ADMISSIONS known as the ultimateadmissions again in 2013, as a consequence of this. way to see a movie. ROI NI However, with only five sites on the CINEMA SPEND (€M) island, it will take some time before 7.2 7.3 7.3 it makes any discernible difference to 16.4m 15.7m 15.3m 5.9m 5.6m 5.5m overall admissions 1.7 2.0 1.7 2011 2012 2013 2011 2012 2013 2011 ROI 2012 NI 2013 Source: Carton Screen Advertising/Core Media ADMISSIONS FELL BY 4% IN 2012 AND Source: Core Media Estimates WILL DROP BY 2% THIS YEAR 17
  19. 19. Last year was a showcase year for Sponsorship with the Olympics and Euro 2012 grabbing the headlines. P&G’s sponsorship of the Olympics clearly demonstrated the ability of a well-executed platform to deliver a return at the checkout; its Olympic campaign covered 34 brands and four million stores worldwide and is estimated to have yielded $500m in incremental sales for the company. The key to successful sponsorship is identifying properties that consumers are passionate about and showcasing this involvement through the activation of the sponsorship, by providing rich experiences and valuable content. Sponsorship in all its forms (product placement, event, venue and broadcast) is evolving in this direction and the P&G campaign exemplifies this. Consumer involvement in sponsored events is a major factor in their success. Research by Professor Tony Meenaghan has shown that increased fan involvement in a sponsored activity evokes a positive emotional response towards the sponsor, but this attribute has not been universally embraced in sponsorship activation; this needs to change. Naming rights have become popular in recent years; this form of sponsorship can catapult a brand to the top of a consideration table for many consumers. Some major deals have been struck including The O2, The Aviva Stadium and Bord Gáis Energy Theatre, all of which are playing a significant role in customer retention and loyalty programmes for these companies. However, sponsorship has not been immune to the decline in marketing investment over the past few years; in 2012 spend fell by 8% to €130m in Ireland (North & South) and we only expect a marginal increase in 2013. Looking further ahead, spending in this sector will grow substantially as viewers become increasingly able to avoid exposure to TV commercials through the use of Digital Video Recorders (DVRs). In response we will increasingly use sponsorship and product placement to compensate for the lost commercial impressions.18 SPONSORSHIP P&G’S OLYMPIC CAMPAIGN YIELDED $500M IN INCREMENTAL SALES FOR THE COMPANY.
  20. 20. 01 PRODUCT PLACEMENT 02 RETURN ON INVESTMENT 03 MULTI-SCREEN WORLDProduct placement has witnessed strong growth in Marketing performance has never been more Today’s consumer is a rabid media multitasker,recent years as changing media habits and fewer important. As sponsorship evolves beyond but with the right insight, this behaviour createsrestrictions lead us to find new ways to reach the awareness objectives, the real challenge is an opportunity for us to deliver more audienceincreasingly distracted consumer. demonstrating its ability to drive commercial results. engagement.Since the BAI permitted the introduction of product Traditionally, sponsorship was evaluated on changes Honda’s sponsorship of documentaries onplacement in 2011, there has been strong interest in the in awareness or moving consumer attitude scores, but these metrics are soft in a world increasingly Channel 4 is a good example of a brand that hasarea. Big deals including Spar/Fair City and Emirates focussed on harder measures like share growth and embraced the multi-screen world with aAirlines/Masterchef demonstrate what’s possible to date. volume sales. For many years ‘equivalent media sponsorship. The stings were designed to driveGlobally, product placement grew by 12% to €8.3 billion value’ was also used to measure the worth of a viewers to an online hub where a series of mini-in 2012, with the majority of that spent in film and TV. sponsorship but this too is irrelevant as it bears no documentaries were housed starring real-lifeSkyfall was 2012’s best example of the power of this relationship to the objectives of the project. We must customers who use their Honda products inform of marketing. forecast the real commercial value of sponsorships extraordinary ways. Facebook and Twitter and prove it afterwards. activity was also used to entice users to visitProduct placement, however, continues to be a divisivearea. The fusion of commercial and entertainment IMPLICATION the hub.content comes with some questions, particularly in Be very clear when defining your objectives before Multi-screen opportunities are just as relevantrelation to trust. investing and if your primary goal is not to drive sales, in a non broadcast environment. With an ask yourself why. Sometimes, the goal will be about IMPLICATION driving awareness, but only as a means to sell more explosion of smart mobile devices, every touchpoint now has the ability to deliver addedMarketers must be careful not to irritate viewers; it can product and this is the piece that can’t be forgottenlead to the brand being talked about for the wrong and often is. value content. Moreover, this is the growingreasons. The more natural the placement fits with the expectation of consumers.environment, the more consumers will accept it; being It is important to resist the tendency to justify thetoo overt risks a damaging loss of credibility. As a US investment based on KPI movements in brand tracking surveys. It is possible to accurately IMPLICATIONbroadcaster once said “Our philosophy is if the brand Consider the layers that you can provide to unpick the return on investment ofdoesnt make the show better, the brand doesnt make consumers as part of your sponsorship a sponsorship from the effectsthe show. People must not notice the integration, but they of the rest of the marketing platform. Can you use exclusive content assetsmust remember it. Thats the test." It’s a subtle art. GLOBAL PRODUCT to provide deeper engagement? Can you PLACEMENT SPEND mix by using econometric modeling. It is the only provide exclusive promotional codes to unlock true way of discounts or deals in-store? Can you deliver establishing whether more information about your brand in a SPONSORSHIP SPEND (€M) €8.3Bn your sponsorship compelling way in the right environment? All of €6.71Bn €7.41Bn endeavours are these questions should be considered to unlock 130.7 €6.25Bn making you money 117.3 118.0 the opportunities of a multi screen world. or not. 2009 2010 2011 2012 11.1 13.1 13.3 2011 ROI 2012 NI Source: Core Media Estimates 2013 Source: PQ Media Global GLOBALLY, PRODUCT PLACEMENT GREW BY 12% TO €8.3 BILLION IN 2012 19
  21. 21. In an age where return on investment plays the key role in marketing decision making, knowing with certainty that you are reaching your intended audience has never been more important. As a result, the direct marketing industry is faring well with all sectors showing positive growth. Direct marketing now accounts for a third of marketing budgets (up from 28% in 2010), despite the lack of a post-code system in the Republic of Ireland. Successive governments have made commitments to introduce national postcodes, but this has met with delay after delay, leaving Ireland as the only country in Western Europe without one. In our view the introduction of this system will take place in the next 12 months and its arrival will further stimulate the market through the availability of a wider range of targeted services. Knowing exactly who’s receiving your communications will help reduce wastage for brands and further improve on the relevance of communications for consumers, leading to a more effective communications channel for all. In the meantime, there are still a number of strong products available to tailor communications to a targeted audience, and the importance of these products will continue to grow. In fact, the ability to target a specific audience remains a primary strength of direct mail versus other communication channels, including email. Businesses that collect additional information about their customers can develop very personal campaigns through the use of variable data printing. In recent years the direct marketing sector has seen a shift into digital forms of communication at the expense of mail, primarily to reduce costs. However, the high volumes of untargeted e- mail and spam have created some antipathy towards e-mail. This has resulted in a reassessment of the strength of direct mail and a growth in understanding of how to match the medium with the message. Consumers talk of the need for in-depth, important information to be sent by post, rather than e-mail. As one USPS customer puts it “E-mail may be the base of your communications with me, but I’m getting too much junk. If it’s really important, send it to me by post.” In 2013, the consumer will increasingly expect direct mail that is relevant to them, specific to them, and focused on giving them added value. DIRECT20 MARKETING DIRECT MARKETING NOW ACCOUNTS FOR A THIRD OF MARKETING BUDGETS