Archive for April, 2013

ONLINE EVOLUTION: 2013 MARKS THE YEAR OF BRAND ADVERTISING

For marketers, 2013 marks a shift in online advertising—to bigger budgets, sounder metrics and a continuing focus on brand advertising that we identified last year. According to the 2013 Online Advertising Performance Outlook, a report produced jointly by Vizu, a Nielsen company, and the CMO Council, advertisers are changing how they view the online medium. Long the bastion for direct response, marketers are now embracing online for branding purposes aimed at shifting consumer perception.

In 2013, advertisers project brand ad spending to grow more quickly than direct response. Sixty-three percent of marketers project that the dollars allocated to online brand advertising will grow in 2013, and one in five believes the increase will exceed 20 percent. These numbers are in line with what Vizu saw in marketers’ 2012 projections, demonstrating continued momentum on this front.

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Roughly half (51%) of marketers also expect spending on direct response to increase in 2013. One in four stated that increase will exceed 20 percent; however, 41 percent say their digital direct response advertising budget will stay the same as last year.

While brand marketers are projecting overall growth in brand ad spending in 2013, they are also predicting their spending in particular digital channels will grow faster than others. Nearly three-quarters (70%) of brand marketers plan to increase their use of social media in 2013, followed closely by mobile advertising (69%) and video advertising (64%).

These numbers are all up from 2012 projections, indicating a continued shift toward the channels where consumers are spending an ever-increasing amount of their time. And the brands aren’t alone in their thinking. Agencies are also projecting growth in mobile advertising (81%) and video advertising (73 percent), followed by social (57%).

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There’s no doubt that digital advertising is on the rise as more advertisers and agencies begin to understand and accept the opportunities the medium brings. How they use digital, however, will continue to evolve.

To download the 2013 Online Advertising Performance Outlook, please click here.

METHODOLOGY

For the report “2013 Online Advertising Performance Outlook,” Vizu, a Nielsen company, collaborated with the CMO Council, which fielded a survey of 287 senior brand leaders, 176 agency executives and 152 publishing representatives. The online survey was fielded during January and February 2013. Readers can download the “Online Advertising Performance 2012 Outlook” to track significant shifts in response. The 2012 study can be downloaded at http://brandlift.vizu.com/knowledge-resources/research/2012-industry-outlook/.

 

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GLOBAL AD SPEND GROWS 3.2% IN 2012

2012 closed out on a positive note for the ad industry: globally, ad spend increased 3.2 percent year-over-year to $557 billion, according to Nielsen’s quarterly Global AdView Pulse report. A strong third quarter, which saw growth of 4.3 percent, helped drive the annual uptick. Ad spend growth then receded to a more modest 2.5 percent in the fourth quarter.

All regions except Europe increased their ad spending in 2012. The Middle East/African market showed impressive growth of 14.6 percent for the year as the region’s economy stabilized. Egypt was part of that turnaround, registering a 20.4 percent increase in spending. Meanwhile, deep cuts to ad budgets continued in Europe, fueling a 5.3 percent decrease for the final quarter, yielding an annual decrease of 4.2 percent. Even economic powerhouse Germany reported a 1 percent dip in the fourth quarter, the second consecutive quarter the country reported a decline in advertising spend.

The Asian-Pacific market underperformed as well, as its annual increase in ad spend fell from 11.5 percent in 2011 to a mere 2.8 percent in 2012, propelled in part by China’s very slight gain of 1.9 percent for the year.

Ad spending in North America remained on an upward trajectory at the end of the year, climbing 3.1 percent in the fourth quarter. This helped the region report 4.6 percent growth for the full year.

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METHODOLOGY

Nielsen Global AdView Pulse measures ad spending for TV, newspapers, magazines, radio, outdoor, cinema and Internet display advertising. Ad spend is based mainly on published rate-cards. Some markets may exclude select media due to data availability.

The external data sources for the other countries included in the report are:

Argentina: IBOPE
Brazil: IBOPE
Croatia: Nielsen in association with Ipsos
Egypt: PARC (Pan Arab Research Centre)
France: Yacast
Greece: Media Services
Hong Kong: admanGo
Japan: Nihon Daily Tsushinsha
Kuwait: PARC (Pan Arab Research Centre)
Lebanon: PARC (Pan Arab Research Centre)
Mexico: IBOPE
Pan-Arab Media: PARC (Pan Arab Research Centre)
Portugal: Mediamonitor
Saudi Arabia: PARC (Pan Arab Research Centre)
Spain: Arce Media
Switzerland: Nielsen in association with Media Focus
UAE: PARC (Pan Arab Research Centre)

Digital TV, Movie Streaming Reaches a Tipping Point

Content providers experiment to attract more viewers

US digital TV and movie content audiences will grow faster than previously expected due to increased viewing on tablets and smartphones, a wave of internet-enabled TVs, and greater content availability, according to a new eMarketer report, “Digital TV and Movie Streaming: A Rising Tide of Devices, Content and Viewing.”

The number of US digital TV viewers will reach 145.3 million in 2017, up from 106.2 million in 2012, according to eMarketer. The February 2013 figures represent increases ranging from 5.3% to 9.3% more than the corresponding figures in its August 2012 forecast. Digital TV viewers will cross a critical tipping point in 2014, surpassing 50% of the US internet user population.

Belkin and Harris Interactive surveyed US internet users on their willingness to replace cable TV with digital media subscriptions and found that 12% strongly agreed with the statement: “I would consider replacing my cable/satellite subscription with a streaming media subscription (e.g., Netflix, Hulu Plus) in 2013.” Another 18% said they somewhat agreed, indicating that a total of 30% of respondents were inclined to at least consider cord-cutting.

As more people in the US watch digital media on a growing range of devices, streaming services are stepping up their competition for subscription and advertising dollars.

Netflix and Redbox are committed to monthly subscription plans, while Hulu offers both fee-based and ad-supported tiers. Amazon is using a membership plan tied to its Prime loyalty program as well as an a la carte tier, while Apple and Wal-Mart are concentrating on the latter model. Others, such as Sony’s Crackle, are using strictly ad-supported access, and premium pay TV content channels such as HBO, Showtime, ESPN and Viacom are extending access to existing subscribers via authentication models. The monetization strategies vary as much as the content, and so far it seems the market is accommodating all approaches.

Netflix reported US streaming revenues of $2.19 billion for 2012, with moderate growth from quarter to quarter. US DVD revenues totaled $1.14 billion and declined each quarter during this period, highlighting the company’s transition from a packaged-goods model to a streaming business. Paid streaming revenues worldwide also increased, reflecting Netflix’s expansion into Europe, Latin America and the Caribbean.

With hundreds of millions of ad dollars flowing to streaming services, marketers see new opportunities to connect with US customers on digital platforms. Hulu’s published revenue figures for 2012 indicate that the service is making more money from ads than from subscription fees, and network web sites, sports sites and other channels are also capturing ad revenues from the growing streaming audience in the US. Even content that resides behind pay walls can be monetized with ads. As the streaming market continues to grow, so will the potential for advertisers to tap into it.
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