The Outlook for Advertising AdWatch 2004

Transcription

1 The Outlook for Advertising AdWatch 2004

2 TNS Media Intelligence/CMR Advertising and Marketing Intelligence Across Brand, Media, Industry and Market Leading provider of strategic advertising and marketing information Monitoring: $140 billion in ad expenditures 190 million ad occurrences 2 million brands 20 media

3 The Advertising Outlook Five Year Ad Trends Key Indicators for 2004 Spending Outlook for 2004 and Beyond

4 The Past Five Years

5 The Advertising Landscape Annual Multi-Media Expenditure Trends Continued recovery since 2001 Percent change % 5 4.9% 6.2% % Based on 14 media

6 The Advertising Landscape Strongest Media Growth From 1999 to 2003 Spanish Language Network TV Internet Cable TV Outdoor +86.7% % +26.7%

7 The Advertising Landscape Annual Multi-Media Expenditure Trends Healthy start to 2004 Percent change % 4.9% 6.2% 9.6% % Q1 / 2004 Based on 14 media

8 Key Indicators for Spending Advertising Categories New Brands The Upfront

9 The Advertising Landscape Top 10 Categories Q $5.9 Retail UP 7% $2.0 $1.8 Non Domestic Auto UP 10% Domestic Auto UP 7% $1.1 $1.1 $1.1 $973 $958 $955 $917 Transportation and Tourism UP 17% Banking and Investment Services UP 23% Telecommunications Services UP 10% Pharmaceuticals UP 29% Motion Pictures UP 3% Media and Marketing Services UP 17% Restaurants UP 1% Dollars in billions

10 The Advertising Landscape Top Growth Categories Q Pharmaceuticals +29% to $973 Million Banking and Investment Services +23% to $1.1 Billion Media and Marketing Services +17% to $955 Million Non Domestic Auto +10% to $2.0 Billion Transportation and Tourism +17% to $1.1 Billion Telecommunications Services +10% to $1.1 Billion

11 New Brands Strong First Quarter 2004 Number of major new brands up 16% from Q1/2003 Dollars in millions Key Categories for New Brands in 2004: In order of dollars spent Motion Pictures Domestic Auto $ $ $ $945 Audio Video Equipment Pharmaceuticals Health Aids Q Q Q Q New brands spending a minimum of $2.5 million in National media

12 The Upfront Business as Usual Will the Upfront Be Half Empty, or Full-of-it Upfront Still Thrives as Party, PR Event The Upfront is Not Broken Advertisers, Agencies: Cable Nets Likely to Benefit from Upfront Share Upfront Loses Traction with Autos

13 The Upfront Business as Usual Upfront Estimates 2000 vs vs vs vs vs National TV* Upfront Sales 12% -12% 16% 14% 6-8% Ad Spending Q4 Percent Change 2000 vs vs vs vs National TV* Media 2% -7% 11% 8% * Includes Network, Cable and Syndication

14 The Gavel and Baton Politics Olympics

15 The Political Marketplace Continued Growth $1.5 billion in spending for 2004 $1.5 Billion $840 Million $625 Million $211 Million $124 Million $218 Million $300 Million dollar amount is estimated

16 The Political Marketplace Elections $1.3 billion in spending Presidential Congressional Gubernatorial State and Local State Ballot Initiatives $600 Million $275 Million $75 Million $200 Million $150 Million All dollar amounts are estimated

17 The Political Marketplace Issue Advocacy / Political $200 million in total spending Medicare Prescription Drug Coverage Tribal Gaming Telecommunications Tort Reform $70 Million $40 Million $25 Million $20 Million The leading topics for issue advocacy All dollar amounts are estimated

18 The Olympics

19 The Olympics Rights Fees Continue to Increase U.S. Summer Olympic Television Rights Fees Dollars in millions 32% $85 166% $226 33% $300 34% 14% $401 $456 55% $705 12% $793 13% $894 $1, Moscow Los Angeles Seoul Barcelona Atlanta Sydney Athens Beijing TBD Source: International Olympic Committee

20 The Olympics Impact on Overall Television Ad Spending The 2000 Sydney Olympics added $750 million in spending With Olympics TV Ad Spend ($B) Without Olympics 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

21 The Olympics Outlook for Spending Incremental contribution of $850 million in television spending on the Athens games

22 The Advertising Outlook 1 st Half and Full Year 2004

23 The Advertising Outlook for 2004 Quarterly Growth Trends 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 9.6% 9.3% 10.9% 7.7% 1 st Half % 2 nd Half %

24 The Advertising Outlook for 2004 Full Year 9.3% Increase - $140.3 Billion in Overall Ad Spending

25 The Advertising Outlook for 2004 Full Year Growth Estimates by Media B2B Magazines -.1% 15.8% Internet 14.3% Spot TV 11.5% Radio (Network, Spot, Local) 9.9% Cable Network TV 9.8% 9.8% Syndication 8.4% Outdoor 7.0% Spanish Language TV 6.4% 6.4% Network TV Magazines (Consumer, Sunday) Newspapers (National, Local)

26 The Advertising Outlook Beyond 2004 An Industry in Transition

27 An Industry in Transition Moving from Analog to Digital Analog Digital Passive Push Less Bandwidth Media Silos Targeted Marketing Interactive Pull More Bandwidth Media Convergence One-to-One Marketing

28 An Industry in Transition Moving from Analog to Digital Increased Media Fragmentation Increased Competition for Attention Emerging Consumer Expectations

29 The Effects of Fragmentation for Advertisers A View of the Consumer and of Media Choices Consumer Markets More brand choices Less brand differentiation Substitutability Eroding USP

30 Increased Media Fragmentation More Options in the Marketplace Digital Cable Online Traditional Media Wireless Out of Home

31 The Effects of Fragmentation for Advertisers A View of the Consumer and of Media Choices Consumer Markets Media Markets More brand choices Less brand differentiation Substitutability Eroding USP More media vehicles Expanded competitive sets Smaller audiences Higher CPPs Eroding USP

32 An Industry in Transition Moving from Analog to Digital Effects of Fragmentation Increased Competition for Consumer Attention

33 Increased Competition for Consumer Attention Human attention is evolving as a scarce economic resource

34 Increased Competition for Consumer Attention Consumer Usage of Media: The hours, per week that a consumer spends with media increased from 56 to 63 Measured Media Radio Broadcast TV Cable & Satellite TV Internet 1 4 Newspapers 4 3 Consumer Magazines 3 2 Total Source: Veronis Suhler Stevenson Communications Industry Forecast July 2003

35 Increased Competition for Consumer Attention Multi-Tasking Measured Media More than 70% of consumers use media simultaneously Television While watching: Radio While listening: Newspapers While reading: Online While connected: 74% Read the newspaper 66% Go online 57% Go online 47% Read the newspaper 18% Watch TV 52% Watch TV 50% Listen to the radio 62% Watch TV 52% Listen to the radio 20% Read the newspaper Source: October 2003 BIGresearch SIMM survey

36 Increased Competition for Consumer Attention Pervasiveness of Multi-Tasking

37 Competition for Consumer Attention The Economic Paradigm has Changed OLD PARADIGM IS Dollar Centric New PARADIGM IS Attention Centric Total Media Dollars Total Attention Budget Total Marketing Dollars Total Media Attention Share of Voice Share of Mind

38 An Industry in Transition Moving from Analog to Digital Effects of Fragmentation Increased Competition for Attention Emerging Consumer Expectations

39 Emerging Consumer Expectations Today s Consumer is Empowered Content Appealing Engaging Informative

40 Emerging Consumer Expectations Today s Consumer is Empowered Choice Availability Accessibility

41 Emerging Consumer Expectations Today s Consumer is Empowered Customization Sense of ownership Relevancy

42 Emerging Consumer Expectations Today s Consumer is Empowered Convenience Portability When and where I want

43 Emerging Consumer Expectations Today s Consumer is Empowered Customization Choice Convenience

44 An Industry in Transition For Consumers, Advertisers and Media Fragmentation Attention Expectations Consumers Choice Filtering the White Noise Multitasking and Selection 4Cs Advertisers and Agencies Small Audiences Diminished Returns Apertures of Opportunity Engage the Consumer Accountability Quantify ROI Media Competition Struggle for relevancy Leverage brand equity Evolve

45 The Advertising Outlook Beyond 2004 An Industry in Transition

46 The Outlook for Advertising Steven Fredericks President & CEO