Ad Market Recovery Won’t Lift All Media

Published: December 03, 2009

NEW YORK (AdAge.com) — Most people in the media business are excited to put 2009 behind them, but a stabilizing or even recovering ad market won’t help everyone equally, according to a new forecast by Fitch Ratings.

First national broadcast TV, and then cable networks and large-market broadcast TV are likely to participate in any recovery, but some media will fall short of even their depressed 2009 levels, Fitch said.

“Fitch expects print mediums, namely newspapers, yellow pages and consumer magazines, to be down again off very easy comparable periods due to permanent shifts in advertiser sentiment and excess ad inventory that will plague the industry for years to come,” it wrote in the forecast.

The New York Times Regional Media Group seemed to be anticipating continued difficulties when it announced Wednesday that this year’s 2.5% pay cuts will remain in place next year. Ad revenue declines are expected to slow but continue, Chief Operating Officer Michael Golden in a memo to staff. Many magazine publishers, on the other hand, have said they expect to improve on their 2009 showings next year even if ad pages across the industry don’t reclaim their old heights.

Radio ad revenue next year will likely come in flat compared with 2009 or down slightly, Fitch said, while outdoor advertising should begin a “slow recovery” later in the year.

The forecast also predicted:

  • Media companies with print products will erect and then dismantle online pay walls next year. With exceptions like The Wall Street Journal, The New York Times, small local papers with limited competition and business-to-business magazines, Fitch said, most publishers face too much competition to get consumers to pay on the web.

Some publishers have already decided not to focus on pay walls, despite a crescendo of attention to the idea this year, but many others remain committed to trying some form of pay scheme.

  • Audience fragmentation will continue but the pace of “legitimate” new media entrants will slow. “Fitch believes the field of legitimate online platforms is possibly set in video and music,” the forecast said. New cable network arrivals should slow as well.
  • Consumers aren’t likely to cancel cable subscriptions to watch shows entirely online. “While viewers want 100% on-demand optionality,” the forecast said, “Fitch continues to believe they also want a backbone of live TV channel lineups.”

The four major broadcast networks, including the NBC network that GE is selling to Comcast, will remain in 2010. But at least one could explore becoming a cable network as early as 2011, according to Fitch, which called NBC and ABC the most logical candidates.

Customer Acquisition & Retention

Customer Acquisition and Retention Top Priorities
SEPTEMBER 21, 2009
Social media big winner in marketing mix
Marketers’ top priorities for 2010 will be customer acquisition and retention, followed by thought leadership, according to a survey by virtual events provider Unisfair.
Six in 10 marketers polled said acquiring new customers would be critical in 2010, while 48% would focus on retaining current customers—a particularly important effort in the recession.

Unisfair suggested that virtual communities to engage both current and future customers would help accomplish both these major goals. Some 48% of marketers seem to agree—that’s the number of respondents who said virtual events were among the top three activities they planned to increase next year. The most common response was social media, selected by three-quarters of marketers polled, followed by search (51%) and e-mail (49%).

Unisfair also quizzed marketers on which social networks provided the most value. Professional network LinkedIn was on top, at 26%. Slightly fewer respondents thought Facebook had the greatest value-add, at 23%, while 17% named Twitter.

LinkedIn only has a tiny market share of all social network visits—0.25% in the first week of September 2009 according to Experian Hitwise. But Unisfair’s results are less surprising in light of its attractive user demographics. Members are significantly more likely than users of other networks to be affluent, well-educated and employed full-time, based on data from Anderson Analytics. LinkedIn users also report making more purchases online in almost every product category.

Traditional Media Still Tops for News

Traditional Takes Top Spot for News
OCTOBER 6, 2009
TV and newspapers hold on despite declines
Television remains Americans’ primary source of news, according to September 2009 studies by ARAnet and the Pew Research Center for the People and the Press.
Although fewer ARAnet respondents selected TV as their biggest news source compared with the prior year, it remained well ahead of daily newspapers, radio and the Internet. Almost 15% of respondents’ time spent on news was online, up from 12.7% in 2008.

When asked to rate the credibility of media sources, US adults ranked them in nearly the same order as their preferences, with TV coming out on top, followed by newspapers and radio tied for second place. Online was third, rated 5.7 on a 10-point scale, with 10 being “extremely credible”; only the positions of magazines and free shopper newspapers were reversed.
“A trend to watch is the increased use of online sources for news and information among the college educated, Hispanics and people making more than $100,000 per year, compared to the general population,” according to ARAnet’s study. “And, of course, the younger the respondent, the more likely they are to rely on online sources.”
Pew likewise found an overall preference for television news. While respondents favored newspapers and radio over the Internet for local news, however, they rated online higher for learning about national and international events.

Unsurprisingly, young adults generally favored the Web more than older boomers and seniors, though adults ages 30 to 49 were most likely to prefer the Internet for local news. Newspapers and television generally increased in popularity with the age of the respondents.

TV Still tops in News graph 1

Time Spent with the Internet

While there are myriad reasons why people’s time spent with internet media stayed flat over the past year — chief among them is faster broadband speeds and more experience with the web allows people to be more efficient consumers — the trend has implications for media companies and marketers.

time spent graph a

Originally the internet was a great “unknown.” We saw marked increases in the time spent online as people began to try out this new medium and become acquainted with it. The amount of time people were dedicating to the internet grew significantly because it took people time to sit down and figure out how to use it and where they should be going. These were the days of “hard-core surfing”; people just floating through the internet, not really sure what they were looking for, but just spending time looking around.

Now people’s use is more defined. People who have been online awhile understand how to use the internet sufficiently and can maximize the time they have to spend on it. They generally know which sites they are going to when they log in. For new people starting out, the proliferation of website advertising (i.e., websites listed in commercials, affiliated with brands, etc.) helps direct people to where they want to go. Similarly, Google and other search engines have become staples of internet use so instead of surfing around to find what you’re looking for you can simply go to Google, type in your search terms, and all the hard work is done. The icing on top of all this is faster connection speeds. With broadband there is no waiting for pages to load and connections to happen.

(Source:  Advertising Age July 2009)