SQAD Quarterly Report Q1 2012

Transcription

1 SQAD Quarterly Report Q1 12

2 Dear Advertising Industry: In this time of media transformation, measurement has become a relentless cycle of evolving methodologies and advancing systems. SQAD has proudly been a partner to the industry through decades of change with radio, television and online advertising. Our suite of products and analytic tools have evolved to remain the independent source of cost metrics for the buying and selling of media. Today is no different. As we embark on cross-platform discussions and embrace the age of video, SQAD is focused on taking an active part in helping develop industry driven measurement tools and solutions. The SQAD Quarterly Report is our first step in expanding conversations around key industry issues and to further validate how current benchmarks can advance understanding of ways to make better media decisions. Each quarter we will share a diverse set of viewpoints that spotlight trends and observations in the advertising industry. Leveraging our independent source of media data and metrics, our first report highlights Web, Broadcast and Spot advertising indices and benchmarks including: WebCosts Leading Index: First index based on independent data that benchmarks leading online media sites and networks in their categories NetCosts Trends & Observations: Independent analysis of the disparity between broadcast and cable CPMs Spot TV and Spot Radio Markets: Evaluating political markets with a review of key states of the 12 GOP Primaries in January and February. Product Spotlight: SQAD is pleased to acknowledge that Spot TV has been submitted for accreditation with the Media Rating Council (MRC) and currently remains in-process. Upon submission, SQAD worked with an independent CPA firm engaged by MRC to undergo a detailed evaluation of compliance with MRC Standards as well as a review of SQAD Spot TV s overall processes and methodologies. The audit remains in process as SQAD cooperates with the MRC to address the CPA s Examination Report of SQAD s Spot TV Service. The pursuit of accreditation of Spot TV reflects SQAD s commitment to uphold a best of standards approach. It is important that the advertising industry has a valid and objective benchmark on which to base planning, buying and selling of media. SQAD remains confident in our efforts with the MRC and is proud of our long-standing heritage with the media industry. As cross-platform discussions begin to take center stage, SQAD remains committed to leveraging our deep understanding of the market and promoting an open discussion on the future of our industry. Our hope is that the SQAD Quarterly Report will be a useful snapshot and a continued reminder that it is important for us to continue to share insights and invest in industry based advertising metrics. Please don t hesitate to reach out with questions, feedback or insights. We look forward to working together and playing a part in transforming the advertising industry. Regards, Neil Klar President/CEO of SQAD

3 The WebCosts Leading Index The WebCosts Leading Index benchmarks CPMs of the sites that consistently rank in the top five for their category by participation and allocated dollars. As SQAD benchmarks each category quarter-to-quarter, sites identified as leaders for 11 may or may not qualify for the Index on a consistent basis. WebCosts Leading Index Avg. CPM 92 Edmunds.com, CNET, Conde Nast, Monster, ESPN, Disney.com, Wall Street Journal Online, AARP, Martha Stewart, Amazon, Weather.com, Yahoo!, American Greetings.com, Wild Tangent, Expedia 9 Category Site Category Site Automotive Edmunds.com Home & Fashion Martha Stewart.com Computers & Consumer Electronics CNET Multi-category Commerce Amazon Corporate Information Conde Nast News & Information Weather.com Education & Careers Monster Search Engines/Portals & Communities Yahoo! Entertainment ESPN Special Occasions American Greetings.com Family & Lifestyles Disney.com Telecom / Internet Services Wild Tangent Finance/Insurance/Investment Government & Non-Profit Wall Street Journal Online AARP SQAD WebCosts Copyright(c) 9-12 SQAD Inc. - All Rights Reserved. Travel Expedia Comparing the WebCosts Leading sites for 11 against 1 there were eight that showed a decline in Average CPM and four that remained steady in its respected category and three that showed positive gains.

4 NetCosts Trends & Observations The Broadcast Networks CPM Advantage Is Growing Despite Their Continuing Rating Decline The disparity between broadcast and cable CPMs continued in fourth quarter 11 despite broadcasts continued decline in revenue share. In fourth quarter 11, the broadcast networks share of total day spending fell 2.6% to 4.7% while cable networks share increased by 2.2% to.1% overall. On a total day basis, the average cable network achieved an A1849 CPM equal to 37% of what the broadcast networks averaged, continuing a gap that has held steady since fourth quarter 9. Two causes of this continuing disparity are that broadcast ratings are falling at a faster rate than advertisers have been able to move dollars to other alternatives; and second, to increase their spending in cable, advertisers have are buying a deeper mix of cable networks to keep efficiencies low and to avoid running too many units on any one low rated cable network. 4th Quarter Total Day Market Share 7-11 Total Day A1849 Ratings Total Day A1849 CPMs

5 Spot TV and Spot Radio: Evaluating Political Markets Spot TV Statewide CPMs Q1 / January Spot TV Political Advertising FL IO NH SC Key States Watched in the GOP Primary Election Jan-8 Jan-12 Presidential elections raise the bar with national attention on which candidate will measure up for enough votes. Every four years, political advertising takes center stage for an extended period of time through both primaries and the general election. Advertising is part of the overall war chest of efforts every candidate must budget. Super Pacs unleash unweilding power to support their candidate by making media buys independent of campaign rules. Spot Radio CPMs Statewide National CPM Average Q1 / January Spot Radio Political Advertising FL IO NH SC Key States Watched in the GOP Primary Election Q1 / January National Spot Advertising Jan-8 Jan-12 Jan-8 Jan-12 SQAD benchmarked CPM averages in key states in January and February for the 12 GOP Primaries in comparison with both the 8 Primaries and National averages. How do political media buys compare to averages in select national markets? When examining CPM averages several observations can be made: On average key states consistently have higher Spot CPMs than the National average. Spot TV had higher CPMs in 7 out of 8 key states in 12 verses 8 Spot Radio had highest CPMs in NH, CO and MI for both 8 and 12 Spot TV Spot Radio

6 Spot TV Statewide CPMS Spot Radio Statewide CPMS National CPM Averages Q1 / February Spot TV Political Advertising AZ * CO * MI NV Key States Watched in GOP Primary Election Q1 / February Spot Radio Political Advertising AZ * CO * MI NV Key States Watched in GOP Primary Election Q1 / February National Spot Advertising Spot TV Spot Radio Feb-8 Jan-8 Feb-12 Jan-8 Feb-12 Feb-8 Feb-8 Feb-12 Spot media purchased to support political campaigns injects advertising dollars in regional networks. When reviewing state to state CPM averages there are clear priorities to consider including: Competition in higher ranked Spot TV states such as FL, NH and AZ Competition in higher ranked Spot Radio states such as CO, NH and MI Advantages in lower ranked Spot TV states such as IO and SC Advantages in lower ranked Spot Radio states including SC, AZ and NV Political advertisers evaluate audience and regional influences when establishing where and when to spend media dollars. SQAD utilizes analytic tools that help report on SPOT and local markets. They include: DataVue: A fully flexible application that uses standard Windows conventions to easily design reports for full-service agency and advertiser subscribers to all Spot products. Wrap: A Windows Rating Analysis Programs product line that features tools for analysis of Nielsen s primary local market rating sources: Overnight and Sweeps. * AZ and CO Primaries were held in different months in 8 verses 12.

7 About SQAD SQAD is recognized as the industry standard media cost forecasting source for national TV (NetCosts network TV, cable and syndication), Spot TV, Hispanic Spot TV Plus, Spot Radio and the Internet (WebCosts ). SQAD provides reliable media data to advertising agencies, buying services, advertisers, television and radio stations, cable operators, program syndicators and Internet publishers. SQAD enjoys strong partnerships with market leaders in both data and analytics. Established in the 197s, SQAD serves 1, clients and is privately held. For more information visit