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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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Great Advertising Is Both Local and Global

With increasing heterogeneity in every market and global exposure just one tweet away, all brands, even local ones, must begin to think globally or suffer the consequences. In 2008, Fiat used Richard Gere as a spokesman in an Italian ad campaign. Though the ad never aired in China, the use of Gere, a pro-Tibet activist, outraged Chinese consumers and caused Fiat to lose traction in the booming Chinese auto market. There are many examples of global advertising concepts getting lost in translation, but today the stakes are higher than ever; a poorly conceived ad in one market can damage the entire brand.

It’s hard to create relevant and timely global advertising themes, positioning, and stories that reinforce the brand, appeal to consumers around the world, and can be creatively delivered through all touch points. Global brand advertising can rarely reflect the idiosyncratic characteristics of every market, but the alternative — locally designed advertising — often sacrifices a consistent global message and misses out on economies of scale. One solution to this tension is to pursue what we call glocal advertising strategy — locally adapting a universally embraced core idea that will resonate in any market anywhere in the world.

This strategy rests on three pillars: 1) a global concept that addresses a universal human motivation; 2) a unified brand vision with creative delivery that respects local nuances and empowered consumers in each locale; 3) an organizational architecture, including culture, technological platform, and dedicated resources, that emphasizes and facilitates dynamic and effective collaboration between the developers of global strategy and local strategists and implementers. Below we examine two campaigns from companies that have effectively applied these interrelated principles.

By getting the glocal model right, Johnnie Walker reversed a continuing decline and more than doubled its global business in ten years. Successful global advertising concepts, as demonstrated by the EffectiveBrands consultancy’s Leading Global Brands project, start with a simple but powerful idea: they address a universal human motivation that crosses cultures. At the highest level are motivations like a desire to be healthy and safe, attain an education, provide well for one’s children, and achieve one’s aspirations. Next, they find a positioning that goes beyond describing product attributes to address the motivation. Johnnie Walker started with the understanding that men around the world, regardless of culture or country of origin, seek to advance in their lives. This universal human motivation unlocked both a global positioning — specifically, “inspiring men to progress” — and an advertising expression of this, “Keep Walking.”

From the outset this campaign was both global and local. For example, the initial print and poster elements of the campaign featured inspirational quotes from many cultures: “A journey of a thousand miles begins with a single step” from Lao Tsu was particularly powerful in Asian cultures; Hannibal’s “We will either find a way or make one” resonated in Western cultures. There were more than 100 quotations used, many uncovered in the local markets, such as the twelve quotes in Swahili, a language not written down. Over more than 13 years, the “Keep Walking” campaign has transformed the Johnnie Walker and Scotch whisky business globally. It has spawned more than 70 TV ads, hundreds of outdoor and print ads, and numerous other adaptations across the marketing mix.

Coca-Cola has similarly embraced the glocal model. The company’s “freedom within a framework” marketing philosophy epitomizes a successful glocal mindset and organizational culture and architecture. It requires that the designers of global advertising strategy carry a creative concept most of the way to execution while regional marketers tailor the work to make it locally relevant and aligned to the different category and brand situations in different places. Importantly, the framework respects and encourages local decision-making while at the same time supporting a unified brand identity. Moreover, the organizational architecture aims to tap into the best ideas and talent, no matter where in the world they come from; this fluid process lets more innovative ideas get recognized and become the basis for a global strategy. Content management systems then enable the organization to scale ideas quickly by making content available and accessible around the world.

Glocal strategy is not only for global brands — this three-pronged approach has increasing relevance for any advertising directed at diverse consumer segments. While this is particularly true in markets such as the US, with numerous ethnic and cultural segments, consumers worldwide are becoming increasingly identifiable as what The Tanning of America author Steve Stoute calls “Omniculturals”— people who define themselves more by their lifestyles and economic and educational attainment than by their race or ethnicity (read Stoute’s contribution to the Wharton’s Advertising 2020 project here).

Glocal approaches will transform the development and delivery of advertising as more brands discover their global potential. In a contribution to the 2020 project, Garinois-Melenikiotou, CMO of Estée Lauder, suggests that by 2020, “global brands and agencies will reorganize themselves — with speed, agility, and editorial spirit — to create stories that will travel across countries without being lost in translation.” Today more than ever, brands can and must reorganize for the global stage.

Google, Facebook Continue to Lead in Digital Display Earnings

Twitter revenues set to surpass AOL in 2014, Microsoft in 2015

US digital display ad spending will continue its double-digit growth trajectory this year, eMarketer predicts, with advertisers expected to shell out $17.70 billion on various display ad formats served to desktop and laptop computers as well as mobile phones, tablets and other devices.

The leader of the pack is Google, with $2.26 billion in net US digital display ad revenues in 2012 and $3.11 billion expected in 2013. Facebook, which lost the top spot last year, will rake in $2.75 billion in 2013, eMarketer estimates, up from $2.18 billion last year.

Based on analysis of multiple sources, eMarketer does not see significant top-line shifts among major players since the previous forecast, though display revenue mixes are shifting toward video and mobile formats, and programmatic buying. eMarketer has revised its estimates for the top display ad-selling companies only slightly, largely based on Q4 earnings reports.

The 18.1% growth expected this year for US display advertising is down somewhat from more robust rates of increase in 2011 and 2012, but eMarketer continues to be bullish on the prospects for digital display advertising—especially at social media properties like Facebook and Twitter, as well as at Google, which has dramatically increased its overall share of the display market in recent years.

Increased display ad spending will also help Yahoo!’s revenues, the bulk of which come from search, though the company will underperform compared with the overall display ad market throughout the forecast period.

Yahoo! will earn an estimated $1.37 billion in net US display ad revenues this year, up 1% from 2012, according to eMarketer. But total US display advertising spending grew 21.5% to $14.98 billion in 2012, and is projected to grow a further 18.1% to $17.7 billion in 2013, eMarketer estimates.

eMarketer expects Yahoo!’s share of net US display ad revenues to decline again this year to 7.7%, down from 9% in 2012 and 11% in 2011. In 2008, Yahoo! accounted for 18.4% of all US display ad revenues. By comparison, Google and Facebook will see their shares of display ad revenue grow to 17.6% and 15.5%, respectively, this year.

A major reason for Google’s increase in display revenues is YouTube. Google’s video property has reach far beyond that of any other online video platform, and serves more ads per viewer. Even though the site needs more professional, brand-friendly content to realize its full advertising potential, its size and scope are already so massive as to bring in significant dollars. And potential improvements in advertiser-friendliness leave room for Google to grow to become an even more important player in the display ad market.

Facebook, meanwhile, has benefited from the shift to mobile as well as fast uptake of native ad formats such as ads in the newsfeed. eMarketer has raised expectations for Facebook’s overall share of the market based on these factors as well as the potential strength of Facebook Exchange (FBX).

On the other end of the spectrum, AOL and Microsoft continue to grow more slowly than the display market as a whole and will keep losing share. Within the next two years, eMarketer expects Twitter to outpace both companies in its share of net US display ad revenues.
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Digital’s Share of Local Ad Spend Poised for Gains

Digital media to grow, traditional media to shrink

Digital has a special role to play in local advertising, especially as mobile has come into the picture and offered better opportunities for targeting consumers.

As such, according to BIA/Kelsey’s March 2013 forecast of US local media ad spending, the role of digital in the local ad market will continue to expand. BIA/Kelsey expects total local spending to reach $132.7 billion this year, essentially flat relative to 2012, when it was $132.5 billion. The composition of that spending will shift, however, as traditional spending declines from $109.4 billion to $107 billion in 2013 and digital spending increases from $23 billion to $25.7 billion.

BIA/Kelsey predicts local ad spending to resume growing in coming years, reaching $145.2 billion in 2016, for a compound annual growth rate (CAGR) between 2012 and 2016 of 2.3%. Most of this growth is projected to come through additional ad spending on digital media. Local digital ad spending’s CAGR is predicted to be 12.6% in the same time period, while traditional media is set to decline slightly, with a CAGR of -0.3%.

Accordingly, digital’s share of local ad spending will increase throughout the decade. By 2016, more than one in every four local ad dollars will be spent on digital media. By 2017, local digital ad spending will reach $41.1 billion, accounting for 27.6% of the $148.8 billion US local ad market.

The BIA/Kelsey data indicates that local advertisers are transitioning to digital slightly more slowly than advertisers overall. In December 2012, eMarketer estimated that 24.6% of total US media ad spending will go toward digital by the end of this year—BIA/Kelsey estimated that digital will account for 19.4% of the local ad market at that time. This gap is expected to narrow over the course of the decade: By 2017, eMarketer projected that digital spending will account for 29.1% of US total media spending, while BIA/Kelsey expects the local market will be 27.6% digital by then.
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Traditional Media Ad Spend Dips Lower as More Dollars Shift to Digital

B2C products expected to see highest growth in ad spend

The shift from traditional media ad spending to digital continues unabated. That’s according to a Duke University Fuqua School of Business survey of US marketers commissioned by the American Marketing Association (AMA) and conducted in February 2013.

As recently as August 2011, marketers expected traditional ad spending to increase incrementally over the following year. But by February 2012 they began to project that traditional ad budgets would shrink, and in February 2013 the expected size of that decline over the next 12 months reached 2.7%.

Meanwhile, digital marketing investment will expand at the expense of traditional spend. The increase in digital ad spending was projected to be most dramatic in the business-to-consumer (B2C) product category, which was expected to se a 14.6% bump over the 12 months following February 2013. B2C and business-to-business (B2B) services were forecast to see similar increases in digital ad spending.

B2C services were estimated to experience the greatest drop in traditional media ad spending, falling 5.4% over the next year.

The data showed a general decline in the proportion of company revenues going to marketing spending. The B2C products category was expected to command the greatest amount of marketing spending (9.4%) as a share of company revenues in February 2013, followed by B2C services (9.2%), B2B products (8.8%) and then B2B services (7.7%). Marketer attention seems to have shifted away from B2C services, for which spending as a percentage of revenues dropped almost 7 percentage points since August 2012.

eMarketer foresees continued growth in digital ad spending in the US, with budgets totaling $42.5 billion in 2013 and increasing to $60.4 billion in 2017. While growth in digital ad spending will decline over that period, digital will continue to account for an ever-larger portion of total media ad spending, according to eMarketer projections.
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ADS ON THE MOVE HOW MESSAGING HAS GONE MOBILE

Mobile usage has become ubiquitous around the globe, and the growth in coverage is opening up media for consumers and content providers alike. Mobile devices are now constant companions in our everyday lives, and they’re becoming an integral way for brands and advertisers to reach consumers as they go about their mobile lives. Nielsen’s recent Mobile Consumer: A Global Snapshot report looks at the growth in mobile advertising, and how the reach and receptiveness to ads on smartphones is as diverse as the consumers in each market who use them.

 

 

In most markets, smartphone owners say they receive mobile ads an average of at least once a day. Indian smartphone owners say they see far fewer ads, as about 70 percent say they see mobile ads once a week or less. Smartphone owners in South Korea see mobile ads most often, as 78 percent say they receive mobile ads daily, and 95 percent say they see ads at least once a week.

 

So how receptive are consumers to mobile ads? It varies by market. In general, smartphone owners in developed markets are least likely to engage with mobile ads, and smartphone owners in in high-growth markets are more likely to interact. For example, 53 percent of Chinese smartphone owners surveyed say they sometimes click the ads they viewed. In contrast, Indian smartphone owners are the most receptive to location-based advertising—even though they were the least likely to receive mobile ads.

 

About half of the respondents in Brazil, China and the U.S. said they were OK with mobile ads if they allow them to access content for free.

 

 

For more information about how consumers around the globe are using mobile, download The Mobile Consumer: A Global Snapshot.

 

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Which Content Marketing Tactics Get the Best ROI?

Articles receive top marks for return on investment

In an environment in which consumers’ attention is increasingly fragmented, the idea of using content to capture interest and engagement is catching on among marketers.

Compelling content can help marketers tell a story, but it can also be cumbersome—and expensive—to create. So which content strategies are generating attractive return on investment (ROI) for marketers? The most cost-effective content types are articles, video and white papers, according to a January 2013 study of marketing decision-makers worldwide conducted byCopyPress, a software company specializing in content marketing tools.

In particular, marketers were most widely satisfied by the ROI from featured articles, with 62.2% saying they provided some of the best content ROI.

Video was also a content strategy cited by 51.9% of marketers for having among the best ROI. But the study highlighted some of the challenges marketers have faced working with it. Video was the content type the highest percentage of marketers (49.8%) described as “difficult to create.” (Other media types that challenged marketers included interactive media, infographics and motion graphics.) And despite the fact that many marketers are having success with video content, half believed that video was “overpriced.”

Publishing articles and white papers may seem like a less complex and less labor-intensive content solution, but these media bring challenges of their own. One question many marketers are asking is what role should authorship play in marketing content creation. Should articles come from specific individuals, or should the focus be on the brand as a whole?

The CopyPress study found that approximately two-thirds of respondents considered authorship to play an important role in their content marketing strategy, while one-third did not. Authorship generally refers to whether articles are bylined, and whether those bylines are from high-profile individuals.

CopyPress also found further evidence of a shift in attention toward content marketing. When asked to name their “leading focus” in 2012, 18.9% of marketers cited content marketing, ranking it behind both email and social media, and tied with SEO. For the coming year, the number of marketers listing content marketing as their top priority nearly doubled, to 34.8%, making it the top focus for the highest percentage of respondents in 2013.


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HOW THE MOBILE CONSUMER CONNECTS AROUND THE GLOBE

Mobile phones have reached a critical mass around the world, serving as constant companions for consumers regardless of demographics or geography. But how we engage with mobile devices and content varies depending on who and where you are. We took a closer look at these differences in a new report, The Mobile Consumer: A Global Snapshot, and found that while mobile usage is becoming increasingly ubiquitous around the world, usage differs significantly by market and demographic groups.

The report examines mobile consumer behavior, device preference and usage in Australia, Brazil, China, India, Italy, Russia, South Korea, Turkey, the U.K. and the U.S.

Device preference is evolving, as smartphone penetration continues to grow in most markets, especially in developed markets with widespread 3G/4G access. In the U.S. and South Korea, for example, smartphone owners now make up the majority of mobile consumers. And in many markets this increased penetration is being led by a new generation of young adults eager to embrace smartphone technology. Comparatively, in growing economies like India and Turkey, a growing group of mobile phone users prefer feature phones over other device options (80% and 61%, respectively).

Mobile usage also differs by device type and market. Smartphone owners tend to gravitate toward games and social networks, though the level of activity varies depending on the market. For example, smartphone owners in the U.S. were most likely to watch video and use maps/navigation apps, while Chinese users were more likely to access news and weather updates via their mobile apps. More than half of smartphone users in South Korea regularly use their devices for mobile banking, compared with 22 percent in Italy.

Understanding the differences among mobile consumers around the world is critical for brands looking to deploy mobile strategies in multiple markets. For more global consumer-focused insights on mobile behavior, download the full The Mobile Consumer: A Global Snapshot report here.

 

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DIGITAL INFLUENCE: HOW THE INTERNET AFFECTS NEW PRODUCT PURCHASE DECISIONS

Trying to decide on a new product to buy? Help is just a few clicks away.

 

According to a Nielsen global survey, the Internet is an important influence on consumers interested in buying new products in categories like electronics (81%), appliances (77%), books (70%) and music (69%). The trend is catching on in consumption categories too—such as food and beverages (62%), personal hygiene (62%), personal health/over-the-counter medicines (61%) and hair care (60%)—with respondents in Asia-Pacific, Latin America and Middle East/Africa most engaged in online decision-making. More than half of all global respondents consider the Internet important when it comes to purchasing new clothing (69%) and cars (68%).

 

 

U.S. respondents say the Internet is very/somewhat important when making a new product purchase decision for electronics (73%), appliances (63%), cars/auto (62%) and music (59%). Sixty-one percent turn to the Internet to help them make a new product purchase decision when it comes to books, and 51 percent consult the Internet when considering new food and beverages.

 

The findings are from the Nielsen Global Survey of New Product Purchase Sentiment, which surveyed more than 29,000 respondents with Internet access from 58 countries about new product awareness.

 

Social media is also an integral decision-making tool for consumers hunting for new products.

 

“Consumers are increasingly finding the Internet and mobile vehicles just as compelling as other more traditional advertising,” said Rob Wengel, senior vice president at Nielsen Innovation Analytics. “Social media can also be an effective soundboard to hear about potential issues or to identify future innovation opportunities. As reliance on social media continues to broaden for CPG products, it is especially impactful when used in combination with TV to enhance recall, facilitate one-on-one consumer engagement and dialogue, and listen to what consumers are saying.”

 

In the U.S., almost sixty percent (59%) of respondents said that they were much more or somewhat more likely to purchase a new product after learning about it through active Internet research, an Internet forum (30%), a brand or manufacturer’s website (45%), or through an article on a frequently visited website (39%). Respondents also said they were much more or somewhat likely to purchase a new product after learning about it through social media (30%), a Web ad (29%) or a video posted on a video-sharing website (27%).

 

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