Digital Revolution in Communication and its Impact on Print Media Status and Prospects Wolfgang Schuldlos, Zenithmedia Munich, October, 18th 2011
Wolfgang Schuldlos Managing Director Zenithmedia Munich Studied Statistics in Munich Since 1991 in the job, first in a publishing house and later on in different ad agencies. Working at Zenithmedia since 1999. 2
Agenda Status 2011 Short Term Prognosis The Future of Print Media 3
Status 2011 4
Changed use of new media 5
Changed habits of media consumption Explosion of user generated content caused a paradigm shift: Users became more comfortable in sharing information in the internet They are less likely to rely on provided information by mass media and are more likely to trust the opinions of other consumers Advertisement industry is forced by media consumers to shift interest and budge to new interactive media 6
Ad spends - Current situation Share of Global Ad Spend 2011 0.5% 6.8% 7.1% 15.8% 20.2% 9.4% Newspapers Magazines TV Radio 40.2% Cinema Outdoor Internet Source: ZenithOptimedia, Sept. 2011 7
Structure of New Media New Media is devided into five important areas: Internet (Display) Search Social Media (Facebook, Twitter etc.) Mobile (Cell Phones, Smartphones, Smartbooks etc.) itv (Interactive TV via digital receiver or internet) 8
What do CMOs expect to do? 9
Global advertising major media* Year-on-year % change, current prices 2010 2011 2012 2013 North America 2.7 2.5 3.7 3.7 Of which USA 2.3 2.2 3.5 3.5 Western Europe 5.9 2.3 3.1 3.2 Asia Pacific 9.7 5.5 7.2 7.2 Central & Eastern Europe 7.2 8.9 11.1 11.2 Latin America 15.7 4.9 8.1 9.3 Middle East & North Africa 7.7-14.2 2.0 2.3 Rest of World 13.7 7.5 10.2 10.5 Global Major Media: US$ Million 449,944 466,293 491,124 518,190 % Change 6.5 3.6 5.3 5.5 Stable increase of ad spends in Europe until 2013 * TV, Print, Radio, Cinema, Outdoor, Internet Source: ZenithOptimedia, Sept. 2011 10
Short Term Prognosis 11
Global market share by medium 2007 vs. 2011 Cinema 0,5% Outdoor 6,5% Internet 8,6% 2007 2011 Newspapers 27,1% Outdoor 6,8% Internet 15,8% Newspapers 20,2% Radio Cinema 8,0% 0,5% Magazines Radio 9,4% 7,1% Magazines 12,0% Television 37,3% Television 40,2% Source: ZenithOptimedia, Sept. 2011 12
Global market share by medium 2009-2013 Dramatic loss of ad spend market share for Print Media with constant decrease rates! 13 Source: ZenithOptimedia, Sept. 2011
2011 2012 2010 2008 2009 Internet s share of global adspend % 20,0 18,0 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 1995 1996 1997 1998 0,0 1999 2000 2001 2002 2003 2004 2005 2006 2007 14 2013Year Source: ZenithOptimedia, Sept. 2011
Internet Advertising by Type US$, million 120,000 100,000 80,000 60,000 40,000 Paid Search Classified Display 20,000 0 Year 2009 2010 2011 2012 2013 Source: ZenithOptimedia, Sept. 2011 15
New Media trends Ad spends in Display and Search are growing constantly Display advertisement consists of ads on normal websites, in social media and video integrated ads Meanwhile 8.7% (2011) or 6 billion US-$ of global online ad spends are in social media, like facebook, youtube or twitter In 2011 the amount of money spent on facebook will be roundabout 4 billion US-$ 16
Variety of Social Media offers Source: InternetWorldStats, June 2011 17
World s biggest Social Networks Source: Socialnomics, August 2011 18
Facebook Facebook subscribers worldwide by regions, June 2011: WORLD TOTAL: 710,728,720 (10.3% Facebook penetration) - Asia: 152,957,480 (3.9%) - Africa: 30,665,460 (3.0%) - Europe: 208,907,040 (25.6%) - Latin America: 115,288,940 (20.7%) - North America: 167,999,540 (48.4%) - Middle East: 16,125,180 (7.5%) - The Caribbean: 5,903,520 (14.3%) - Oceania / Australia: 12,881,560 (36.4%) 19 Source: InternetWorldStats, June 2011
Facebook 20
Facebook in Europe Source: InternetWorldStats, June 2011 21
Facebook in Europe Source: InternetWorldStats, June 2011 22
Facebook in Europe A quarter of the European population is subscriber of Facebook! 23 Source: InternetWorldStats, June 2011
Ad Spends in Mobile Media 24
Consequences New Media ad spends keep on growing extremely Companies try to use social media advertisement in an increasing way Companies are shifting money from media purchase to labor intensive tasks like the management of digital content 25
Social Media trends 2012 Social media as a customer service tool More companies using social media sites for competitions Social media will more prominently affect search engine results More companies will include user reviews and ratings on their websites Social media and the relevance of the right information for the right people Greater impact for social media in B2B sector The functions of social media will change dramatically! 26 Source: Simon Jones, Digital Visitor
Fascination New Media for marketers The fascination of new media for marketers in companies is based on three reasons: Targeting: Online and mobile media offer marketers access to more sophisticated, content-driven and location-driven targeting Marketplace: Well defined places for marketers to access aggregated advertising inventory. Places to buy and sell ads. Measurement: Exact and up-to-date measurement of ad impact by ad server reports New media is offering attractive new possibilities for marketers! 27
The Future of Print Media 28
Fundamental break? The ongoing increase of new media consumption and the ad spend shift to new media is clearly observable Is the process of digital victory at its end or are the changes going on? Are there examples of comparable developments in the past? 29
Example: Private Television in Germany 50.0% Liberalisation of TV market 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 30 TV Newspapers Magazines Online 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Radio Outdoor Trade Magazines Source: ZAW
Relevant Tendencies After a 12-year-lasting increase of ad spends TV reached maximum level of market share Since 1985 magazines are loosing constantly market share The appearance of Online Media as relevant advertising media causes market share losses of newspapers The structural decline of printed media in ad market isn t stopped yet! It is rather likely that the growth of online reinforces the negative tendencies! 31
Digital World changes media consumption Ad spends in online or mobile media are growing constantly Broadcast TV is going to be replaced by IP TV Especially social media has an enormously increasing amount of subscribers or users Ad spends in social media are growing too Social media changes step by step its functions for users Companies are forced to change and reinforce their marketing equipment and engagement. They must create magnetic information or messages, which attract the right people. 32
Influence on Print Media Ad spends in Print Media keep on falling constantly User numbers of Print Media keep on falling constantly The bottom of this development is not reached yet Prints ad credibility sinks, whereas people trust more in the experience of other people with products or brands User numbers of magazines or newspapers are meanwhile tiny compared to big social networks (on European or global basis) In news as well as in entertainment print media is too slow, too one dimensional and too less interacting to win the war versus digital media Tablet PC or ereaders seem to be the only hope for publishing houses to maintain the relevance of qualitative editorial content 33
Question Once a famous person representing a big publishing house asked: Can you reach the mass without mass media? The answer is: No. But the question is: What s today a mass media? A publishing house with 20 million European readers or Facebook with 210 million European subscribers? 34
Conclusion The next 10 years print media will not disappear totally yet. But the importance of print media and the ad spends in print media will decrease further on. The diversification of services and the change of media platforms will change publishing houses the next years too. The media platform paper keeps losing market share, but the sociological stamp caused by magazines and newspapers is big and prevents print media from disappearance. World changes, but some habits stay: I need my morning newspaper at breakfast! 35
Prophecies are very difficult, especially concerning the future. Mao Tse-Tung 36
Thank You! 37