Media and Money

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Coca-cola. First Interactive TV ad in Scandinavia

Coca-cola. First Interactive TV ad in Scandinavia

In order to squeeze more money from a slumping ad market, Cablevision Systems Corp. aims to use interactive commercials by showing interactive advertising to about three million digital-television customers next month, becoming the first U.S. cable operator to do so.

Customers will use remote controls to click on banners at the bottom of their screens during commercials and get coupons or free samples of products by mail- so don’t worry- the feature won’t interrupt programs.

The six largest cable companies, including Cablevision, created Canoe Ventures last year to introduce similar ads nationally. The effort was hampered by the technological limitations of older set-top boxes and privacy concerns, leading Canoe to suspend trials of its first product in June.

Comcast Corp., the largest U.S. cable provider, and Time Warner Cable Inc., its smaller rival, are gradually testing and debuting targeted advertising. In April, Time Warner Cable started “promotions on-demand.” The offering allows Time Warner viewers to click on an ad and go to an on-demand channel dedicated to the product.

Cablevision got a jump on the rest of the industry in March, when it said it had begun testing of a new targeting technology. It can route ads to specific households based on demographic data, such as income, gender and ethnicity. Cablevision will be the first cable company to unveil interactive banner ads to its entire service area.

Berkshire Hathaway Inc.’s Benjamin Moore paint company is one of the first advertisers to sign on according to reports. When viewers see Benjamin Moore’s ad, they can push the select button on their remote control and get a free two-ounce color sample. The ads will appear on at least 25 cable networks.

By the end of this year, Cablevision plans to expand the effort, letting customers click on an ad to see movie like trailers for a product. By next year, customers will also have the ability to buy products via their television sets. Cablevision declined to comment what premium advertisers will have to pay for the interactive features.

The Nielsen Company reported that U.S. advertising for the first half of 2009 fell 15.4% compared to the first half of 2008. Preliminary figures show that U.S. ad expenditures declined over $10.3 billion to a total spend of $56.9 billion in the first two quarters.

Cable Television ad spending was the only medium to show growth through the first six months of the year (+1.5%). The increase is especially significant since Nielsen reported Cable TV ad spending was down 2.7% through the first quarter this year. Spanish Language Cable TV also saw ad spending tick up 0.6%.
The rest of Nielsen’s measured media showed year-to-year declines, ranging from Internet (-1.0%) to Local Sunday Supplements (-45.7%). African-American television (a subset of Network, Cable, Syndicated, and Local), continues to grow, increasing 14.3% through the first six months of 2009.

“While some of the larger categories have cut back spending, we see others that continue to raise the ante on their media investments,” said Annie Touliatos, VP for Nielsen’s advertising information services. “What’s interesting is that we’re not just seeing a rise in spending for recession-friendly products like fast food restaurants. We’re seeing a lot more promotion of technological innovations like smartphones, computer software, and consumer-driven web sites. These advertisers see potential for their products despite our stressed economy and are leveraging advertising to drive their success.”

Read the full 2009 Ad Spending Release from Nielsen

Harris Poll…One of the main purposes of advertising is to help consumers decide what products and services they should buy or use. With so many different types of advertising being used today the question becomes what types are considered most helpful, that is they help people decide what products or services to actually purchase and which ones are most likely to be ignored or disregarded? These are some of the results of a new AdweekMedia/The Harris Poll of 2,521 adults surveyed online by Harris Interactive between June 4 and 8, 2009.

What Ads Are Most Helpful?
Over one-third of Americans (37%) say that television ads are most helpful in making their purchase decision while 17% say newspaper ads are most helpful and 14% say the same about Internet search engine ads. Radio ads (3%) and Internet banner ads (1%) are not considered helpful by many people. Over one-quarter of Americans (28%), however, say that none of these types of advertisements are helpful to them in the purchase decision making process. Half of people aged 18-34 (50%) say television ads are most helpful while three in ten (31%) of those aged 55 and older say they find newspaper ads to be most helpful. There is also a slight regional difference. Two in five Southerners (40%) say they find television ads most helpful, while only one-third (33%) of Midwesterners feel the same.

What Ads do People Ignore?
Almost half of Americans (46%) say they tend to ignore Internet banner ads. Much further down the list are Internet search engine ads (17% of people ignore), television ads (13%), radio ads (9%), and newspaper ads (6%). One in ten Americans (9%) say they do not ignore any of these types of ads. There are age and regional differences. Half of those aged 35-44 (50%) and 51% of Midwesterners say they ignore Internet banner ads compared to 43% of 18-34 year olds as well as Easterners and Southerners. One in five Americans 18-34 years old (20%) say they ignore Internet search engine ads while 20% of those aged 55 and older say they ignore television ads.

So What?
While advertisers scramble to create their ad campaigns, one thing they need to remember is that, even if viewership may be down and even with the increased use of digital video recorders so people can fast forward through commercials, television ads are the most helpful to consumers. Also, while an Internet strategy is essential for a comprehensive ad campaign, Internet banner ads are not considered helpful by few and are ignored the most. People are more likely to ignore ads on their computers but are more likely to pay attention to those on their television.

For more than a year, the U.S. consumer hit by the recession has changed the way he or she shops: a focus on value for money has led to some dramatic shifts in behavior that some say will last far beyond the current economic environment. With 80 percent of Americans saying they were stressed due to the economy, savvy retailers and consumer goods manufacturers have shifted their marketing to appeal to consumers watching their money more closely. But have those ads been successful? Nielsen IAG examined 67 such ads from 11 national advertisers and found that the same creative attributes that make for good advertising also make for good value messaging.

In short, value-message and recession-themed ads did not break through TV ad clutter at higher than ordinary rates. In fact, ad recall of the 67 ads evaluated was at rates lower than historical averages for the 11 advertisers. Packaged goods manufacturers saw no decline, while retailers registered minor declines. Financial service, insurance, auto and telecom advertisers posted significant declines.

Read more by Alka Gupta, Senior Vice President, Consumer Goods Research, Nielsen IAG
Are Value-Themed Ads Making an Impact? | Nielsen Wire

Good news for newspapers. According to a forecast from Borrell Associates, though newspapers will be down this year, expect a 2.4% rebound in newspaper advertising in 2010, and continued single-digit increases over the next several years. By 2014, newspaper ad revenues will be up about 8.7% over 2009 levels. While national newspaper advertising will do just fine, we foresee the greatest growth in local print – going from $8.9 billion this year to $10.1 billion, a 13.4% increase.

By Andy Fixmer, Bloomberg

The biggest U.S. television networks are posting declines of 15 percent or more in advertising commitments for the prime-time season starting next month, based on results at CBS and NBC.

So-called upfront sales at General Electric Co.’s NBC will fall 15 percent to 20 percent, a person with knowledge of the matter said yesterday. Sales were $1.9 billion last year, a person familiar said then. CBS Corp. will collect about $2.1 billion, down from an estimated $2.5 billion, according to Michael Morris, an analyst at UBS AG.

“We’ve been the strongest player in these very protracted negotiations,” CBS Chief Executive Officer Leslie Moonves said on a conference call yesterday. “We’re very pleased with how things have progressed.”

Networks are holding more inventory, betting advertisers will pay a higher price as the economy improves. New York-based CBS, the most-watched network among all viewers, is almost done and will pre-sell about 65 percent of its available ad time, compared with 75 percent to 80 percent last year, Moonves said. NBC will is selling 70 percent of its inventory, down from 80 percent, according to the person.

Anthony DiClemente, a New York-based analyst at Barclays Capital, estimated in April that networks’ advance ad sales may drop 15 percent to about $7.4 billion.

Advertisers are paying CBS slightly less per viewer in this year’s upfront sales than they did last year, Moonves said. A larger audience at CBS, the only network to expand prime-time viewership last season, is countering the lower price to keep revenue about even on the ads it has sold, he said.

Veronis Suhler Stevenson (VSS) announces the publication of its newest Communications Industry Forecast (CIF) covering the years 2003-2013. VSS predicts that total communications spending will decline 1% in 2009 to $882.6 billion, but grow 3.6% per year over the next five years to over $1 trillion making communications the third fastest-growing sector of the U.S. economy over that period. Segments driven by end user spending and targeted marketing services are gaining even as traditional advertising is shrinking.

2008 and 2009 witnessed a major shift in the spending patterns in the communications industry as advertising became the smallest of the four major sectors in 2008 — a first for advertising since VSS began tracking the industry in 1986. While this period culminated a decade-long trend away from traditional advertising vehicles and towards institutional and consumer end-user spending and marketing services, it also highlighted the emergence of institutional and consumer communications as the dominant sectors in U.S. communications spending. VSS forecasts that the institutional sectors and various alternative media segments will drive overall communications spending for the next five years. More specifically, institutional end-user spending will remain the largest and fastest-growing communications sector, rising by 5.6% annually as a result of strong gains in business information services, particularly in the marketing and financial services sub-segments, and the for-profit higher education sub-segment of educational and training media and services. Alternative marketing segments – including branded entertainment and word-of-mouth marketing – will grow at 12.6% annually from 2008-2013 and will contribute to overall marketing services spending growth of 3.4% annually in the period 2008-2013.
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