TV Advertising: The Next 10 Years

Transcription

1 TV Advertising: The Next 10 Years An Agency Perspective Steve King, Chief Executive - Worldwide, ZenithOptimedia

2 TV Advertising: The Next 10 Years Global advertising forecasts Media trends Television trends Responding to changing times

3 Stable world economy Gross Domestic Product: year-on-year % change WORLD N.America L.America Europe Asia Pacific Germany Source: ZenithOptimedia, April 2005

4 Adspend growing Adspend: year-on-year % change WORLD N.America L.America Europe Asia Pacific Germany Source: ZenithOptimedia, April 2005

5 Ad expenditure growth by region (% change, 2008 v 2005) North America Europe Asia Pacific Asia ex. Japan Latin America World Source: ZenithOptimedia

6 Higher growth in TV adspend TV adspend: year-on-year % change WORLD N.America L.America Europe Asia Pacific Germany Source: ZenithOptimedia, April 2005

7 TV gaining share Global adspend by media type % 38.4% TV $bn % +76% +40% 38.1% 30.5% +16% 29.8% Newspapers % 13.3% 8.3% 6.1% +70% +78% +47% 13.5% 8.8% 5.4% 3.7% +17% 13.4% +14% 8.5% +21% 5.5% +44% 4.5% Source: ZenithOptimedia, April 2005 Magazines Radio Outdoor Internet

8 Media adspend declining share of marketing Spend 2004 v 2001 % change (US, Japan, Germany, UK, France) Media Advertising 3.5 Sales Promotion 6.8 Brand PR/ Sponsorship 4.6 Direct Mail Interactive Marketing Source: Marketing Expenditure Trends Report, London Business School

9 Media advertising and sales promotions (USA) Marketing budget allocation % Media Advertising % % % Consumer Promotions 19% 26% 27% Trade Promotions 39% 40% 49% Source: John Philip Jones

10 Towards customer experience marketing Real brand marketing is not about fabricated slogans, it s a total approach. We are now looking at communicating through the line and at other ways the brand interfaces with the driver. That s why we now believe we are no longer selling cars - we are selling customer experiences. President, Mazda Motors, Europe

11 Towards integrated marketing communications Direct Mail Cellular Pager Website PDA Outbound Telemarketing Sales Force Fax Customer Delivery Fulfillment Retail Point of Sale Face-to-Face Behaviours Touchpoints Contacts Radio Customers Interactions Phone Ordering Television ATM Magazines Event / Sponsorships Outdoor Placement/ Product Sampling Newsprint

12 TV Advertising: The Next 10 Years Global advertising forecasts Media trends Television trends Responding to changing times

13 Media trends (i) - overview Consumer appetite for media is rising (time and money) Advertising supported media are losing share to consumer supported media TV remains dominant Growth media include internet, direct mail, , mobile, retail, PR Growing use of multiple traditional and nontraditional media

14 Media trends (ii) media consumption % share of the average person s media time 3 Mobile Phone +/- % by Internet Home PC Cinema Music Magazines Books Radio Television -2 Newspapers % share of time Source: ZenithOptimedia

15 Media trends (iii) media reach Personal Communication Mobile internet PC Internet Low reach High reach Cinema Digital TV Source: ZenithOptimedia Mass Communication Radio Posters Print Analogue TV

16 TV Advertising: The Next 10 Years Global advertising forecasts Media trends Television trends Responding to changing times

17 TV - The Next 10 Years Potential for a new golden era: more viewing, more enjoyment, more attention Rising penetration of multi-channel TV Digital TV replacing analogue TV Growing popularity of interactive TV Rapid growth in DVR penetration (replacing VCR)

18 Digital TV penetration in Europe Digital Households as % of All Households % Germany** France Italy Spain Sweden Ireland Norway UK* Sources: *Sky, **AGF/GfK Fernsehforschung, Jupiter Research

19 TV distribution platforms in Europe % of All TV Housholds % USA Germany UK France Spain Italy terrestrial digital terrestrial analogue Satellite Cable Source: Booz Allen Hamilton 2005

20 Growth of free digital terrestrial TV Homes % penetration UK Germany Spain Italy France Source: ZenithOptimedia, Television in Western Europe to 2012,

21 Growth of pay digital TV Homes % penetration France UK Spain Italy Germany Source: ZenithOptimedia, Television in Western Europe to 2012,

22 The value of time Time management has become the most important driver of social change and innovation. Nearly all technological and social innovations over the last 50 years can be attributed to a desire to maximise use of time. They can do this in two ways: either by increasing the satisfaction gained from any given unit of time or by reducing the amount of time to achieve the same amount of satisfaction. The Future Foundation, April 2004

23 Digital Video Recorders A vital TV innovation 50% penetration in US/UK by US: 8m homes currently - UK: 770,000 DVR homes watching 16% more TV Significant change to viewing behaviour - 40% of viewing to recorded programming. 73% of ads fast forwarded - More attentive, enjoyable, selective viewing - Despite fewer ads viewed, no fall in ad recall (source: Sky) Challenges and opportunities for advertisers

24 The Changing Face of Advertising on TV Classical Ads Gaming Interactive Ads Branded Content Special Ads Source: ZenithOptimedia

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26 The value of attention People are more likely to watch if they choose the programme, and are interested in it and enjoy it People recall more ads in programmes they are attentive to GRPs are not a good surrogate for attention or recall

27 What people do during ad breaks Activities during ad breaks Leave room 31% Pay full attention to ads 5% Switch channels 10% Do other things like chat or read 54% Source: ZenithOptimedia, TV Persistence Study, UK

28 What people remember from ad breaks Break advertising recall (15 minutes after the programme) Spontaneous 1% Prompted 18% No recall 81% Source: ZenithOptimedia, TV Persistence Study, UK Source: Zenith Media TV Persistence Study (March/April 1999)

29 Viewing persistence effect on ad recall Ad recall index vs average AMOUNT OF THE PROGRAMME VIEWED Almost none A little Half / Most All +63% Source: ZenithOptimedia, TV Persistence Study, UK

30 Integrating marketing communications Direct Media Generating response Creating awareness Mass media TV Enhancing experience Interactive Media

31 TV sales the next 10 years 1. Helping clients to build awareness, generate response, enhance experience 2. Proving ROI from TV advertising value versus alternatives 3. Programming that is viewed live 4. Improving the trading currency passive measurement 5. Beyond the GRP attention, engagement, response

32 The next 10 years Global advertising forecasts Media trends Television trends Responding to changing times

33 Responding to changing times The Future Structure of the Media Services Sector Media unbundling almost complete - scale in media even more important 5 or 6 multiple brand media services groups accounting for 60% - 70% of world adspend Human endeavour - servicing and ideas will be key discriminators Developing communications planners at the heart of our integrated media communications service

34 Summary Advertising expenditure continues to grow as % of GDP and TV spend is growing share of adspend Media advertising losing share of marketing spend The potential of a golden era for television more choice, enjoyment, attention, and involvement New forms of advertising on TV Media agencies are moving to become communications advisors