Ad spend continues modest increase thanks to automotive and financial services. Online video most popular on tablet vs. smartphone or social networks
The financial markets have never been a reliable indicator of true economic growth (or lack thereof). They’re a better indicator of investor psychology than they are of underlying corporate earnings or consumer spending intentions and right now uncertainty is trumping confidence. If nothing else, we’re officially in a global economy so when a Euro Zone country gets overextended or when China overheats or plays games with its currency, we all suffer. Hey, our little banking crisis in 2008 wreaked as much havoc overseas as it did at home. Payback’s a bitch.
The markets usually tank in October anyway—check your history books for that month in 2008, 1987, 1929 etc. True, most indices are close to 20 percent off their recent highs in April—a technical bear market signal, but they’re about a percentage point or two off where they were a year ago. We don’t remember things being too rosy last October either.
Right now things are very uncertain, but it doesn’t mean they’re horrible. Housing prices remain depressed, but their holding steady. The jobless rate is way too high for an alleged recover, but slightly improving. U.S. vehicle sales rose almost 10 percent in September to their highest level in five months. More impressive, the Big 3 Detroit automakers significantly outgained Toyota and Honda. Even in our auto-dependent nation, folks aren’t going to shell out tens of thousands for a new vehicle unless they’re pretty sure they can finance the purchase. Perhaps more telling, bank stocks are taking a beating right now but financial services companies are still leading the charge on the ad spending front.
Ad spending up modestly
For the first half of 2011, Nielsen research found that U.S. advertisers overall spent 5 percent more in the first half of 2011 than they did in the first half of 2010 and the categories showing the greatest increase were financially-oriented, said Randall Beard, the global head of advertising solutions for Nielsen. Auto insurance increased 25 percent from first half of 2011, bank services increased 24 percent and financial investment services increased 19 percent. “People are very interested in saving money, getting the best possible deals and making sure their financial situation is as strong as it can be,” Beard told the New York Times in a recent article about his organization’s findings.
Kantar Media’s latest research found that ad spending in major media in the United States in the second quarter rose 2.8 percent from the same period a year ago. The percentage gain was the sixth quarterly increase in a row since the end of 2009, according to Kantar Media data, but it is the smallest of the six. For the first six months of the year, Kantar estimates ad spending was up 3.2 percent from the first half of last year.
The numbers for the second quarter “are painting a mixed picture,” Jon Swallen, senior vice president for research at the Kantar Media North America unit of Kantar Media, said in a statement. On one hand, “a majority of media types actually improved their performance” from the first quarter to the second quarter, Mr. Swallen said. On the other hand, spending growth among the 100 biggest advertisers “stalled” in the second quarter, he added, “and the ad market became more dependent on the comparatively smaller budgets of midsized advertisers as the main source of growth.”
Tracked by media type: Internet advertising was up 10.4 percent and magazines were up 2.9 percent; television, up 1.8 percent; and radio, up 1.4 percent.
Marketers respecting consumers
We popped in last week at the Online Media & Marketing Association conference in New York and were impressed by the attendance levels, the quality of the questions during Q&A sessions and the overall positive buzz and energy despite the gloomy economy. As MediaPost editor Joe Mandese noted, “Marketers are growing up. We came out of an era in which marketers didn’t respect consumers, they just force fed them their messages. Now they have to engage them, earn their trust, before trying to sell them. Is this the dawn of UX (user experience) media planning?”
This week, the 8th annual Advertising Week confab convenes in New York and most of the media pooh bahs expect advertising spending to grow modestly in 2012 and 2013. Tim Jones, CEO of ZenithOptimedia www.zenithoptimedia.com thinks the quadrennial effect of 2012 presidential elections and London Olympic games will give media sellers a lift and Russ Sapienza, senior partner at PricewaterhouseCoopers said most major advertisers still want to sell products in a slow-growth economy. They don’t want to “take [media] money off the table” even when they may put the brakes on major capital investments like factories and infrastructure.
Online display shifting from direct response to branding tool
A number of panelist indicated that the “wow” factor of new ad technology is wearing off and now we’re back to focusing on content—what you actually put inside all those cool ad spaces and time slots. While many media buyers still cling to clicks, impressions and conversions to measure performance. But the more important metrics often point to return on ad spend, online searches for brand names, product recall, and sales.
New research from the online agency Collective indicates that that online display advertising continues to shift from a direct-response form of advertising to branding media.
"The Digital Advertising 2011: A Portrait of Conflict" study released by Collective finds that 57 percent of agencies believe the majority of their display objectives are to build the brand, yet only 11 percent cite ad creative as critical to the campaign's success. Still, three in five (60%) agencies cite brand recall and intent to purchase as the most important measures of online success. However, clicks and conversions remain the key criteria agencies say they use to evaluate media, according to the Collective study.
Want folks to see your Videos? Research says viewers embrace tablets, more than smartphones and social media
A new PwC study finds that consumers increasingly embrace alternative screens to watch TV shows and movies. Nearly three in five surveyed consumers (58%) said they spend more time now viewing movies and TV shows online than they did a year ago. "This was further validated in qualitative discussions, where consumers confirmed that they spend more time using their Internet-connected devices, especially iPads," stated the PwC report. The study emphasized that people considered tablets a "wholly different mobile viewing experience" compared to smartphones, given screen size. Less than one-quarter (23%) had an interest in watching premium video on smartphones. PwC said the lack of enthusiasm for mobile video is consistent with research it has done over the last 18 months.
The research also noted growing interest from a year ago in cloud-based media storage offerings. The idea of a digital locker for music, shows, movies or other content especially appealed to more mature audiences, people in their late-30s to mid-40s, given their understanding of storage technology. Younger people were also intrigued, but had concerns about pricing.
The PwC study found social media was the channel people were least willing to pay extra for to obtain premium content, in part because there's typically no charge for using most social networks. Two-thirds of survey participants said they wouldn't pay anything to watch movies and TV via social properties. But because distribution through social media is still nascent, the consulting firm suggested there is still an opportunity for Hollywood studios and TV networks to leverage Facebook and other social sites.
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