Nielsen reports 2008 US Advertising Spend Figures: Broadcast TV, Internet, Overall Down; Cable TV Up

Nielsen reports figures for US advertising market in 2008, almost all measures show downward trend from 2007 figures

  • total US ad spend down 2.6% – from $140.5 billion to $136.8 billion
  • Broadcast network tv down 3.5%
  • Spot TV top 100 down 0.3%
  • Internet down 6.4%
  • Cable TV up 7.8%
  • Hispanic cable tv up 9.6%

TV is still the dominant advertising medium, with 60% of total ad spend.

Top ten advertisers total spend was down 15% to $15.5 billion.  Biggest falls registered by car manufacturers (as a sector, down by 15.5%), pharmaceuticals (down 18.4%) and motion pictures (down 11.4%).

Among media and communications companies in the top 10, Time Warner down almost 24%, Verizon Communications down 1.3%, AT&T down 7.2%.

The only product categories registering rises in total ad spend in 2008 were “Quick serve restaurants” and “Direct response products”.

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New Report on Online Video in Asia

Mike Walsh, trendspotter, digital futurist and researcher, has just posted on his blog a summary and videos relating to a research project he’s just completed for CASBAA, the Cable and Satellite Broadcasting Association of Asia, on online video in Asia.  It makes fascinating reading (and watching). The emphasis is on the power of audiences; the second video ends with the statement that “Audiences not media moguls will reinvent the experience of television”.

The videos are worth watching, so I’ve embedded them here for ease of access.  Below the videos is Mike’s summary of the highlights of his findings.

My take-aways from this were:

  • much lower % of UGC viewed and created in China, Korea and Japan than in US, Australia, UK
  • free is the norm, but “dealing with free will be the biggest challenge”. Online video sites and content producers getting around this in various ways. Tudou which claims to be the largest video sharing site in China, is ad supported “we introduced our video advertising system in 2007, where we show full screen pre-roll ads while the actual video loads as well as full screen wallpaper ads around the video during playback”, but they are negotiating licences with content producers.
  • average time spent on an online video site is c.1 hour, (according to one of Tudou founders) compared with c.7-12 mins for YouTube.
  • most people (in China) find out about online videos through Instant Messaging from friends (email is much less widely used than in the west)
  • a recent Chinese movie, Red Cliff, was released through all the online video download sites in China on a unique format that forces users to watch ads before the movie. That is, it was ad-supported

Part One

Part Two

Here are a few of the insights from the report:

1. The Internet has become a primary entertainment destination.
For young Asian consumers, the Internet is entertainment – particularly in China. A survey by the China Youth Daily and Sina in January 2008 indicated that more than 80% of young Chinese placed the Web as their primary source of entertainment compared to TV, at 66%.

2. Social discovery drives the popularity of content rather than traditional programming or marketing campaigns.
When it comes to the discovery of content – blogs, referrals through instant messaging clients, BBS boards, and top ten lists on video sharing sites have the most influence. In China, according to the CNNIC 63.7%, of video content is discovered through social connections, 94.1% of this sharing taking pace instant message tools such as QQ and MSN.

3. Long form professional content is the most popular format
Although the West is just now getting a taste of long form video on the web, in Asia it has been the most popular format for a while. 86.3% of the online video watched by Chinese netizens is either studio created films or TV shows. In Korea, 47% of users had illegally downloaded at least 55 movies a year, or more than one a week.

4. Audiences actively participate in content experiences
In Japan, the most popular video sharing site is Nico Nico Douga (Smiley Smiley Video) attracts almost a billion page views a month. The most distinctive feature of the site is an on-screen commenting function, where user messages scroll as commentaries across the video while playing like a form of visual karaoke.

5. Consumption is communal
Asian teenagers enjoy being online together. China has about 113,000 licensed Cyber Cafes, with many more operating illegally while in Korea, despite strong home broadband connections, most youth prefer to socialise in one of the 26,000 PC Baangs.

6. User anonymity is important
One of the major differences between Western and Eastern online users is the importance of privacy and anonymity. Most Japanese online users prefer to use imaginary names and cartoon avatars rather than photos to represent themselves while in China, much of the attraction of bulletin board systems is the ability to post comments without revealing your actual identity. YouTube in Japan after attempting to encourage greater amounts of user generated content is now focused on the more culturally acceptable practice of uploading cute pet videos.

7. Local brands dominate the online video landscape
For both cultural and technical reasons, local video sharing sites in Asia have generally been more successful than foreign players such as YouTube. In Japan, Nico Nico Douga is very popular, in Korea the dominant site is PandoraTV while in China, the top two sites are Youku and Todou.

13% Decline in TV Advertising Revenue in 2008 Contributes to CBS Loss of US$11.8 billion

Broadcasting and Cable‘s Claire Atkinson reports today on CBS Corp’s announcement of $11.8 billion loss for 2008, and 52% fall in net income.

Not all of the loss is due to downturn in TV advertising revenue, although all ad-supported areas of the Corp’s business are down: outdoor by 75% and radio by 56% in the fourth quarter of 2008. According to B&C, two thirds of CBS’s revenue is derived from advertising.

Hurt by local advertiser pull backs in radio and outdoor and a challenged national TV ad market, CBS Corp. said operating income at the television segment was down 40% in the fourth quarter, at $272.2 million down from $450.5 million in the year previous and for the full year down 14% to $1.5 billion in 2008. CBS had broadcast the Super Bowl in the year previous. TV segment revenue was down 8% for the fourth quarter at $2.2 billion and down one percent for the full year at $8.99 billion.

There may be further bad news ahead for the TV network, despite good ratings for TV shows

Ironically, CBS ratings success may be something of a burden. CBS doesn’t have make-goods and its high ratings give its sales team many more ratings points to sell than its competitors. In some instances scarcity of ad inventory creates higher pricing. Analysts have noted that the network may have difficulty selling all those additional eyeballs in a down ad market. Also, CBS traditionally holds back more inventory for the year round scatter market, rather than selling it upfront, banking on its strong programming slate to bring in usually higher scatter pricing.

But one bright light on the horizon is… ONLINE VIDEO and INTERACTIVE SERVICES!

[CBS Corp CEO Leslie] Moonves praised TV.com [CBS’s online video portal] and said it had added thousands of videos and was delivering five times the number of a streams as last year. “TV.com is clearly going to be a very, very big play in what is clearly a fast growing market.” The CBS Interactive unit saw a jump in revenue for the fourth quarter to $186 million reflecting the acquisition of CNET along with higher mobile revenue and higher ad sales.

Although TV.com/CBS are currently in dispute with NBC and News Corp owned Hulu.com, with the latter removing programming from the former.

Hulu, which launched in beta in October 2007 and publicly in March 2008, has been a runaway success for its backers, even garnering some high profile Super Bowl promotion. But TV.com, relaunched by CBS in January, is also growing and offering up some increased competition for viewers that wish to stream their favorite shows online. According to a Mediapost story today, TV.com recorded a 1,261% increase in streams for January and a 263% increase in unique viewers in January, according to Nielsen VideoCensus data.

Do you feel “gamed” by online advertising?

…..its getting harder and harder, now that the Internet is becoming almost a living, breathing thing that watches what we do, to know whether its genuine recommendation that’s coming through from someone, or whether it’s a testimonial from an agency hidden as a blogger recommendation.”

Laurel Papworth, social network strategist.

This transcript from the ABC’s Future Tense program examines the so called power of peer recommendation as a recent advertising strategy. It also raises interesting questions about who is more savvy in the online space? the advertiser? or the consumer, as they wise up to the targeting of their profiles and online habits? One wonders what forms of consumer resistance will evolve.

Oh and there’s also the emergence of embedded adds through social media sites. I guess this is like replacing the recommendation of the traditional TV presenter with the recommendation of the Youtube (or whatever) favoured personality.

see

Advertising spend in UK – new stats

Advertising: Internet Advertising Bureau/PWC/World Advertising Research Centre stats show internet ad spend up significantly in UK as overall ad market shrinks slightly. Search advertising is still majority (981 million pounds out of 1.68 billion total internet ad spend for Jan-June 08).

Story by Mark Sweney in The Guardian 7 October HERE

Internet advertising spend is “propping up” traditional media, according to a report, surging 21% year on year to £1.68bn in the first six months of 2008.

The resilience of internet ad spend in the downturn turned what would have been a 4.6% year-on-year decline in UK advertising spend in the first half to a slide of just 0.7%, according to the study by the Interactive Advertising Bureau and PricewaterhouseCoopers.

In this study, internet ad share of total market is 18.7% compared to TV advertising at 21.7%.

Compare with USA – see this CHART of stats for June 08 which shows TV (combined local, cable and network) taking around 60% of market, while internet at under 7%.

And compare with China where KPMG report predicts 40% growth of internet ads next year, to $5.2bn out of total ad market of $37.85bn, see Mark Sweney’s story in the Guardian 22 October 2008 HERE.

The same KPMG report sees opportunities in television content for international coproductions with Chinese producers

KPMG also forecasts that China’s huge TV market – 1.19 billion TV viewers over the age of four and one-third of the global cable TV market, which accounts for more than 60% of the country’s media spend – also presents opportunities for western companies.

“Content generation represents a big opportunity. Chinese TV producers are increasingly likely to need to look outside China to secure appropriate content and programme formats for different channels,” Honson said.

In late September Mark Sweney wrote about the downturn in ad spend in UK and predictions of a ‘horror show’ for media companies in 2009.

This puts into perspective Sir Michael Grade’s comments about ITV giving up its public service broadcasting remit, as reported by Andy last week.

Noting the announcement this week of the review of the public broadcasters here in Australia, could it be that the relative size and importance of the ABC and SBS may grow significantly if, as some predict, there will be a decline in the commercial television advertising market which might (given James Packer’s to get out of Channel 9 this week) hasten the demise of the commercial FTA/network system?

Margaret Simons’ overview of the issues around the PSB review is HERE at a new website Inside Story, the brainchild of Peter Browne (Australian Policy Online and Creative Economy) and the Institute of Social Research at Swinburne University. Perhaps here at Inside Story is one answer to what will happen to quality journalism.