Monday, October 01, 2007

Media remix

There could be two reasons advertising expenditures for the major media declined in the first half of this year for the first time since the tech bubble burst in 2001. Or, maybe three.

One cause could be that advertisers, fearing a weak economy, are cutting back on expenditures to sustain their bottom lines. The other is that advertisers are funneling more dollars into non-traditional media. And the third possibility – the one I favor – is both of the above.

Ad outlays slipped by 0.3% to $72.6 billion in the first six months of 2007 from the same period a year ago, according to TNS Media Intelligence, a company that tries to sleuth out where marketers, who don’t necessarily want people knowing what they're doing, spend their dough.

The sales drop was not spread equally among the media. As you will see from the graph below, the period was kind to such media as the Internet (+17.7%), business magazines (+6.7%), outdoor (+3.9%) and cable TV (+2.8%). The shortfalls were suffered by consumer magazines (–7.2%), newspapers (–5.8%), broadcast TV (–4.1%) and radio (–2.7%).

Advancing the theory that the over-all decline in ad sales is the result of uncertain economic conditions, Steven Fredericks, the chief executive of TNS said: “While the protracted downturn in automotive spending has been a prime contributor, the overall results reflect weakness across a wide range of industries and advertisers. Given the uncertainties about near-term economic growth and consumer spending, we expect core ad spending will continue to face challenges during the second half of the year.”

I think Steven’s probably right. But I also think fewer ad dollars are flowing to the several media his compnay happens to monitor. Maybe lots fewer, to wit:

Even though TNS reported that the nation’s top brewers cut their traditional spending by 24%, or $131 million, during the first six months of 2007, “brewers insist they haven't cut [total marketing] spending at all,” reports Jeremy Mullman of Advertising Age, adding that “in many cases [they] have increased it.”

Far from vanishing, “beer bucks are flowing into less-traditional sponsorship and promotional activities that services such as TNS don't pick up on,’’ says Jeremy. “Moreover, as a result of the influx of smaller brands into the big brewers' portfolios, more of their ad budgets are being channeled into local media, which the brewers say TNS doesn't measure, either.”

Instead of buying commercials and print ads, reports Jeremy, brewers nowadays are paying for product placement in entertainment programming (not measured by TNS-type services) and sponsoring promotional events like a bar “Olympics” in Chicago.

If you work at a mainstream media company and happen to believe, like me, that brewers aren’t the only ones forsaking the MSM for non-traditional ways to connect with customers, then you ought to start thinking about how you can help marketers engage creatively with consumers in your market.

Maybe it’s in print or on the air. But maybe it’s in a saloon.


Anonymous Anonymous said...

Hi. Very nice post. I would like to add that there seems to be very little industry leadership around a compelling advertising strategy for the newspaper industry as a whole. The NAA and Editor & Publisher seem to be the few resources that focus on serving the industry, but even they tend to focus more on editorial, circulation and print machinery than strategically improving advertising. Dinosaurs on roller skates.

1:27 PM  

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