September 2008 The Evolving Media Economy
2 Once Upon a Time, Marketing = Media + Creative Traditional media was primary (sole?) venue for communications objectives
3 But Fragmentation Fractured That Proposition
4 Music Was The Canary In The Coal Mine Source: Magna, RIAA Digitization changed production, distribution and consumption
5 And DVRs Were To Be The Last Nail In The Coffin
6 With A Digital Revolution Blooming In The Aftermath
7 But Traditional Media Never Died “Television is the worst form of advertising, except all the others that have been tried”
8 But Traditional Media Never Died New advertisers rely on it for mass branding effects Source: Magna analysis of TNS-CMR data
9 But Traditional Media Never Died Large brand-based advertisers: focus on reach… Source: Initiative Analysis of Nielsen Data
10 Source: Magna, US Census, Veronis Suhler, OPA But Traditional Media Never Died …And frequency
11 Source: Magna, WARC, InternetWorldStats. Weekly reach figures for France and UK, daily for other countries. Reach definition for magazines = issue reach in France, Italy and Spain. Internet reach typically = % of population online monthly per Nielsen NetRatings, ITU and other sources as of June (except for US = March 31, 2007) But Traditional Media Never Died This is true in established markets…
12 But Traditional Media Never Died …And emerging ones Source: Magna, WARC, InternetWorldStats. Weekly figures for Brazil and Russia. Russia, China and India magazines are issue reach figures. Indian TV and radio = daily, newspapers = issue. Chinese TV = weekly and radio = daily. Internet typically = % of population online monthly per Nielsen NetRatings, ITU and other sources as of June
13 But Traditional Media Never Died It also holds for young audiences… Source: Magna analysis of Nielsen Media Research data
14 But Traditional Media Never Died …In the US and around the world Source: WARC
15 Consequences of Reach and Frequency Paradigm 20 YEARS AGO Models that were well-designed…
16 Consequences of Reach and Frequency Paradigm 20 YEARS AGO …For an era of homogenous media platform access…
17 Consequences of Reach and Frequency Paradigm TODAY …May not be as well-suited for a world of Web 2.0%…
18 Consequences of Reach and Frequency Paradigm TODAY …Which will reach some audiences and miss others
19 Drivers of Online Spend = Endemics, New Businesses Largest advertisers drive TV, smaller advertisers drive online Source: Magna analysis of TNS-CMR data
20 Source: Magna, US Census, Veronis Suhler Drivers of Online Spend = Endemics, New Businesses Reflecting effectiveness for SMEs…
21 Drivers of Online Spend = Endemics, New Businesses …Who benefit from a Democratization of Advertising Source: Magna analylsis of IRS data
22 Beyond search, emerging media = small business today Emerging Media: Systemic Growth Requirements Source: Magna, IAB
23 Emerging Media: Systemic Growth Requirements Impacting “gut” decisions = ?
24 Emerging Media: Systemic Growth Requirements Establishing better infrastructure
25 Emerging Media: Systemic Growth Requirements Re-aligning organizational structure Operating Division Retail Distribution Product Development Branding CEO Other Corporate Functions COO PR / Corporate Communications Operating Division Product Development Branding Operating Division Product Development Branding CMO / Central Marketing CreativeOtherMedia Marketing, PR, Retail, Sales Source: Magna Direct / Online Sales
26 Emerging Media: Systemic Growth Requirements Focusing on people, not pages (or ratings)
27 Emerging Media: Systemic Growth Requirements Assessing value, not cost Top 10 DMAs $>$ National Network
28 Emerging Media: Systemic Growth Requirements Transforming data into actionable insights = + ?
Contact: Brian Wieser, CFA Tel:
30 Discussion Roger Keating SVP, Digital Media Hearst-Argyle Television Steve McGowan SVP, Insights and Client Research Initiatives The Nielsen Company
31 Issue #1 Consumers in Control Vs. Controlled Consumers? Source: Magna
32 Issue #2 Fragmentation: Friend or Foe? Source: Magna analysis of Nielsen data
33 Issue #3 Who Crosses Platforms? Source: Magna