Facts & Figures You Need to Successfully Budget for 2015

Transcription

1 Facts & Figures You Need to Successfully Budget for 2015 John Potter SVP, Professional Development Radio Advertising Bureau Mark Fratrik SVP and Chief Economist BIA/Kelsey The Local Media & Advertising Experts Facts & Figures You Need to Successfully Budget for 2015 Mark R. Fratrik, Ph.D. Senior VP, Chief Economist, BIA/Kelsey RAB August

2 Overview of Talk General View of Overall Economy General Assessment of the Radio Industry Revenue Outlook How is 2014 going to End Up? What is going to happen in next few years? Over-the-Air vs. Online Other activities by radio stations Advertiser Business Categories Where is radio strongest? What categories can radio go after to take away $$ from other media? Conclusions 3 National Economic Overview 4 2

3 Quarterly U.S. Real GDP Growth Rate Percentage Growth Source: U.S. Government, BIA/Kelsey estimates. 5 U.S. Monthly Employment Gains Thousands Source: U.S. Government. 6 3

4 Unemployment Rate Overall Rate U-6 Rate Percentage Source: U.S. Government. 7 Radio Industry Outlook 8 4

5 Radio Industry Overview 20% Over The Air Online 18.2% 15% 10% 13.0% 12.1% 11.1% 10.3% 5% 0% -5% 5.2% 0.3% 1.5% -0.5% 0.0% 1.1% 1.5% 1.2% 1.7% -10% -8.6% -15% -20% -18.7% Source: BIA/Kelsey s Media Access Pro Regional Growth Rates 2.3% 0.1% 0.0% 2.0% 1.2% Source: BIA/Kelsey s Media Access Pro. 10 5

6 Some Strong Growth Markets Rank Market 2014 % 35 Austin, T 8.0% 24 Charlotte-Gastonia-Rock Hill, NC-SC 7.0% 19 Denver-Boulder, CO 6.5% 26 Riverside-San Bernardino, CA 6.5% 68 Albuquerque, NM 6.5% 90 Colorado Springs, CO 6.5% 29 Salt Lake City-Ogden-Provo, UT 6.0% 74 El Paso, T 6.0% 263 Bismarck, ND 5.5% 117 Ft. Collins-Greeley, CO 5.0% Source: BIA/Kelsey s Media Access Pro Expected Regional Growth Rates 1.4% 0.9% 0.7% 1.1% 1.1% Source: BIA/Kelsey s Media Access Pro. 12 6

7 Radio s Position in the New Media Marketplace OOH 5.8% Print Yellow Pages 2.7% Radio Online 0.5% 2014 U.S. Local Media Revenues $138.0 Billion Online / Interactive 10.5% Magazine Online 1.4% 0.2% Cable 4.9% Internet YP 1.7% Magazine 1.4% Radio O-T-A 10.5% TV Online 0.6% Mobile 3.3% TV O-T-A 14.4% Newspapers Print 12.2% Newspapers Online 2.4% Direct Mail 27.6% Radio in a 4 th position in terms of share of local advertising Note: Numbers are rounded. Source: BIA/Kelsey U.S. Local Media Forecast ( ) 13 Continuing Shift Toward Digital Media Traditional Online/Digital $180 $160 $140 $120 $151.5 $140.7 $147.1 $133.2 $138.0 $27.9 $31.7 $36.2 $40.7 $46.6 $158.6 $ CAGRs: Total Media CAGR 3.6% US$ Billions $100 $80 $60 $40 $105.3 $106.3 $104.5 $106.4 $104.9 $105.9 Traditional Media CAGR 0.1% Online/Digital Media CAGR 13.6% $20 $ Note: Numbers are rounded. Source: BIA/Kelsey U.S. Local Media Forecast ( ) 14 7

8 A THIRD of ALL Local Media advertising will be Digital Media advertising by Local Ad Market with More Players than Just Traditional Media in 2018 Magazine 1.0% Internet YP 1.8% Radio Online 0.6% 2018 U.S. Local Media Revenues $158.6 Billion Online/Interactive 13.1% Magazine Online 0.3% Cable 4.9% OOH 5.9% Print Yellow Pages 1.1% 1.5% Radio O-T-A 9.9% Mobile 9.9% TV Online 0.7% Newspapers Print 8.5% TV O-T-A 14.0% Newspapers Online 2.5% Direct Mail 24.2% Radio exceeds print newspapers in terms of local advertising share Source: BIA/Kelsey s Media Ad View Plus Forecast 16 8

9 What s Going on in Local Markets? Media Ad View Plus Offers granular and vertical view of $138 billion local media industry Provides a local and a nationwide comparative forecast Allows for evaluation of opportunities across multiple dimensions: Local Ad Markets Media and Ad Categories Business Categories 17 Businesses Shifting Ad Spending to Online Business categories and their percent of all spending in online media by 2018 Auto 21.1% $3.6 B Real Estate 40.4% $1.4B Quick Service Restaurants 18.4% $730.2M Source: BIA/Kelsey s Media Ad View Plus Forecast 18 9

10 Retail Advertising Radio OTA 10.3% Radio Online 0.5% U.S - $25.9 Billion TV OTA 9.0% TV Online 0.4% Cable 3.0% PYP 0.5% Out of Home 2.7% Online 7.4% Direct Mail 43.3% Newspaper Online 3.2% Newspaper Print 16.3% Mobile 1.4% Mags Online 0.1% IYP 0.4% Mags Print 0.8% 0.7% Source: BIA/Kelsey s Media Ad View Plus Forecast 19 Furniture Stores - Nationwide Television Online 1.4% Television OTA 37.4% Cable TV 7.7% Direct Mail 5.8% 0.7% Internet YP 0.7% Magazines Print 1.0% Magazines Online 0.2% Mobile 1.5% Newspaper Print 16.3% Radio Online 0.5% Radio OTA 11.7% Print YP 0.8% OOH 0.8% Online 10.2% Newspaper Online 3.2% Source: BIA/Kelsey s Media Ad View Plus Forecast 20 10

11 National Furniture Consumers Spending Time With Media The Media Audit 21 Health Care Advertising: +$500 Million by % 2018 Local Radio Stations Source: BIA/Kelsey s Media Ad View Plus Forecast 22 11

12 Automotive Dealers Advertising Television OTA 37.4% Television Online 1.4% Cable TV 7.7% Direct Mail Internet YP 5.8% 0.7% 0.7% Magazines Print 1.0% Magazines Online 0.2% Mobile 1.5% Newspaper Print 16.3% Radio Online 0.5% Radio OTA 11.7% OOH 0.8% Print YP 0.8% Online 10.2% Newspaper Online 3.2% Source: BIA/Kelsey s Media Ad View Plus Forecast 23 Online Advertising Automobile Dealers: $2.2B $3.4B Classified/Verticals comprise over half of totals Source: BIA/Kelsey s Media Ad View Plus Forecast 24 12

13 Technology Advertising U.S. : $11.9 billion Radio Online 0.6% Radio OTA 12.5% Print YP 0.9% TV OTA 16.9% OOH 4.1% TV Online 0.7% Online 18.5% Cable TV 5.9% Direct Mail 16.5% News. Online 2.2% News. Print 10.9% Mag. Online 0.5% 1.8% Internet YP 0.5% Mobile 4.6% Mag. Print 2.9% Source: BIA/Kelsey s Media Ad View Plus Forecast 25 Restaurants Advertising U.S. $13.0 Billion Radio Online 0.6% TV OTA 16.0% TV Online 0.6% Cable TV 8.9% Radio OTA 13.0% Direct Mail 27.9% Print YP 0.9% OOH 5.6% Online 9.7% News. Online 1.6% News. Print 8.1% Mobile 2.2% Mag. Print 1.5% Mobile 0.1% 2.3% Internet YP 0.8% Source: BIA/Kelsey s Media Ad View Plus Forecast 26 13

14 Radio SMB Advertisers 27 Total Local Media Advertising: SMB vs. Non-SMB Advertisers $180 $160 $140 $ % $86.0 SMB Local Ad Spend 33.6% 34.2% $89.0 $90.6 Non-SMB Local Ad Spend 34.8% 35.4% $94.5 $ % $101.4 Billions $100 $80 $60 $40 $47.2 $49.0 $50.1 $52.6 $54.4 $57.2 $20 $ Source: BIA/Kelsey U.S. Local Media Forecast ( )

15 Our Local Commerce Monitor (LCM) Surveys SMB media usage, ROI assessments of marketing channels, and the use of mobile, social and loyalty programs. The longest running survey of SMB marketing and advertising to our knowledge, since Results based on 600 responses have a confidence interval of +/- 4.0% at the 95% confidence level. The confidence interval is larger for those questions that were asked of just a subset of the full sample. Two cuts of data: Core Sample (All); Plus Sample (>$25K ad spend). 29 Number of Media Used Declined Average Number of Different Media Used for Advertising & Promotion Biggest Losers (in SMB usage): Directories Cable TV Newspapers Outdoor Source: BIA/Kelsey s Local Commerce Monitor (LCM) Waves (Q3/2013) and prior waves, if relevant. Methodology: Online panels

16 Distribution of Spending by Radio Advertisers Small & Medium-Sized Businesses Mktg. 5.1% Direct Mail 5.2% TV 4.9% Cable 3.4% Other 10.2% 26 additional categories of advertising and marketing spent by radio advertisers Online 25.4% Radio 12.5% Newspapers 5.5% PYP 6.2% Deals & Coupons 6.5% Sponsorships/ Giveaways 7.1% Mobile 8.0% Source: BIA/Kelsey s Local Commerce Monitor (LCM) Wave 17, Q3/2013 (and prior waves, if relevant). Methodology: Online panels. 31 Digital Media Used For Advertising & Promotion By Radio Advertisers Facebook Page 71.2% Mktg. 52.0% Video Website 44.8% Video You Tube Google Twitter Facebook Ad IYP LinkedIn Online Coupons 36.8% 36.0% 36.0% 34.4% 32.0% 29.6% 26.4% 0% 20% 40% 60% 80% Source: BIA/Kelsey s Local Commerce Monitor (LCM) Wave 17, Q3/2013 (and prior waves, if relevant). Methodology: Online panels

17 Cross-Platform Selling Digital Agency 33 Your Customers Needs Are Changing 34 17

18 Hello, I m from [your company], and I m here to help your business. And so are 38 of your closest friends. Solution to Help You Grow Your Business! Search/SEM/SEO Display marketing Social marketing Video marketing Electronic Presence/Reputation Management SMS Text/Mobile Apps Contests/Games Loyalty Coupons Website hosting/responsive design Etc., etc., etc. We Provide It! 35 Examples of Media Companies Successfully Cross-Selling 36 18

19 Conclusions 37 Radio stations find themselves in an incredibly competitive and changing marketplace 38 19

20 In the local advertising marketplace, radio stations are holding their own 39 YET listeners and advertisers have more cross-platform opportunities to consider 40 20

21 Radio broadcasters must use their strengths to pivot and take advantage of opportunities: Local Image Local Info and Programming Local Sales Force: Boots on Ground 41 BIA/Kelsey Helps Clients Succeed Every Step of the Way UNDERSTAND marketplace dynamics IDENTIFY & MANAGE the competition BASE DECISIONS on reliable, actionable market data & insights ALIGN PRODUCTS & RESOURCES to drive operations MAKE INVESTMENTS in growth opportunities 42 21

22 The Local Media & Advertising Experts Questions & Comments: Mark R. Fratrik, Ph.D. Sr. Vice President, Chief Economist (703) This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under federal law. BIA/Kelsey disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information. Thank You! MARK FRATRIK JOHN POTTER RAB MEMBER RESPONSE