Newspaper Advertising: Behind the Numbers
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Transcript of Newspaper Advertising: Behind the Numbers
Newspaper Advertising: Behind The Numbers
November 2, 2011
1 © 2011 Kantar Media www.KantarMediaNA.com
1. Media Monitoring Coverage
2. Newspaper Ad Metrics
3. Digital Advertising
4. Key Category Trends
Today’s Agenda
2 © 2011 Kantar Media www.KantarMediaNA.com
Media Monitoring Coverage
3 © 2011 Kantar Media www.KantarMediaNA.com
4
We Track a Diverse Range of Media
© 2011 Kantar Media www.KantarMediaNA.com
TV
Network (5)
Cable Nets (68)
Local Cable (2
DMAs)
Spot TV (1,003)
Spanish Net (8)
Syndication
Media Coverage
Radio
Network (5)
Local (32 DMAs)
National Spot
(205 DMAs)
Plus…
National & Local
Magazines (>300 pubs)
Outdoor (210 DMAs)
Internet Search (Google)
5 © 2011 Kantar Media www.KantarMediaNA.com
Newspaper Monitoring
6 © 2011 Kantar Media
Media Type
Local 142 pubs in 63 DMAs
Hispanic 52 pubs in 18 DMAs
National 3 national pubs
What’s Included
ROP display & inserts
All zones & sections
Excludes agate type classified advertising
NEWSPAPER PRINT EDITIONS
www.KantarMediaNA.com
NEWSPAPER PRINT EDITIONS
NEWSPAPER WEB SITES
Media Type
Internet Display >300 local paper sites
7
Newspaper Monitoring
What’s Included
Display ad units
Static images + rich media
Media Type
Local 142 pubs in 63 DMAs
Hispanic 52 pubs in 18 DMAs
National 3 national pubs
What’s Included
ROP display & inserts
All zones & sections
Excludes agate type classified advertising
© 2011 Kantar Media www.KantarMediaNA.com
8
We estimate ad expenditures based on rate card costs
www.KantarMediaNA.com © 2011 Kantar Media
• English language Local Newspapers
• “Newspapers” = Print editions
• “Digital” = Web sites
• “YTD” = January-August period
• All data from Kantar Media unless
otherwise noted
Today‘s Rules
9 © 2011 Kantar Media www.KantarMediaNA.com
Newspaper Ad Metrics
10 10 © 2011 Kantar Media www.KantarMediaNA.com
-4.1%
-12.3%
6.5%
1.8%
-11.7%
-20.2%
-4.6% -3.6%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
2008 2009 2010 Jan-Aug '11
All Media
Newspapers
11
Ad Spend Growth Rates Total U.S.
Source: Kantar Media
© 2011 Kantar Media www.KantarMediaNA.com
Media Projected 2011
Ad $ vs. 2006
Outdoor 110%
Television 104%
Magazines 84%
Radio 75%
Newspapers 62%
Some Media Still Trail Their Pre-Recession Peaks
Source: Kantar Media
12 © 2011 Kantar Media www.KantarMediaNA.com
13 © 2011 Kantar Media
Anatomy Of A Decline
1. Circulation losses
– Affects pricing power
2. Shrinking pool of advertisers
– Down 8% since 2007
3. Continuing advertisers buying less
space
– 19% decline in annual inches from 2007 to
2010 for common advertisers
www.KantarMediaNA.com
14
Erosion Is Continuing Into 2011
January - August
© 2011 Kantar Media
• Total # of advertisers: down 9.8%
• Total ad spending: down 3.6% – Down 6.0% for continuing advertisers
• # of inches down 5.9% − Down 7.0% for continuing advertisers
Source: Kantar Media
www.KantarMediaNA.com
How does newspaper performance
compare to local TV stations?
15 © 2011 Kantar Media www.KantarMediaNA.com
Newspapers TV Stations
ALL ADVERTISERS
Total # of Advertisers -9.8% -1.3%
Ad Spending -3.6% -2.2%
Ad Volume (Inches/Seconds) -5.9% +1.4%
CONTINUING ADVERTISERS
Ad Spending -6.0% -2.8%
Ad Volume (Inches/Seconds) -7.0% +0.7%
16
2011 vs. 2010 January - August
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
Digital Advertising
17 © 2011 Kantar Media www.KantarMediaNA.com
Newspaper industry reporting shows online ad growth has
resumed and its share of total ad revenue is expanding
18
Online Ad Revenue
0%
2%
4%
6%
8%
10%
12%
14%
16%
2006 2007 2008 2009 2010 H1 11
Online % Share
18.8%
-1.8%
-11.8%
10.9% 9.3%
-20%
-10%
0%
10%
20%
30%
2007 2008 2009 2010 H1 11
Online Growth Rates
© 2011 Kantar Media
Source: Newspaper Association of America
www.KantarMediaNA.com
Source: Newspaper Association of America
-20%
-10%
0%
10%
20%
30%
40%
2007 2008 2009 2010 H1 2011
Online Ad $ Growth Rates
Newsp Sites
All Display
Online ad growth rates for newspapers are consistently 10-15 percentage points below the industry average
Sources: Newspaper Association of America; Internet Advertising Bureau
19 © 2011 Kantar Media www.KantarMediaNA.com
• National sample of 20 newspapers and their web sites
– Q2 2011 vs. Q2 2010
• Side-by-side comparison to identify digital-only brands
• Findings
– 3/4ths of online ad $ growth coming from digital-only brands
– Online spend by digital-only brands growing 2x faster than joint brands
20 © 2011 Kantar Media
Digital-Only Brands Lead Online Ad Growth
Growth in web site ad revenues is being driven by digital-only
brands that do not buy space in the print edition
www.KantarMediaNA.com
Category % Change
Amusements/Events +4.4%
Auto Dealers +4.5%
Media +8.8%
Medical Services +21.1%
Real Estate +13.4%
21
Leading Categories
Digital Spend - YTD 2011
© 2011 Kantar Media
Expanding
Source: Kantar Media
www.KantarMediaNA.com
22
Leading Categories Digital Spend - YTD 2011
Category % Change
Travel & Tourism -9.2%
Auto, Factory -29.9%
Financial Services -14.7%
Education -14.2%
Telecom -23.3%
© 2011 Kantar Media
Expanding Contracting
Category % Change
Amusements/Events +4.4%
Auto Dealers +4.5%
Media +8.8%
Medical Services +21.1%
Real Estate +13.4%
Source: Kantar Media
www.KantarMediaNA.com
Source: Kantar Media
Web Site Ad Clutter
• A concern for advertisers
• We count the number of display ads on
each page
• Ad clutter on newspaper sites is:
– Trending upward
– 15-20% above the norm
– Higher than local TV & radio sites
23 © 2011 Kantar Media www.KantarMediaNA.com
Site Category 2008 2009 2010 Jan-Aug
2011
All Web Sites 2.35 2.28 2.54 2.58
Newspapers 2.68 2.65 2.99 3.15
Radio Stations 2.88 2.56 2.87 3.03
TV Stations 2.63 2.45 2.67 2.76
24
Web Site Ad Clutter
Display Ads Per Page
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
• We track 32 ad networks
• % of site ad impressions sourced
from networks vs. publisher direct
– Remnant versus premium inventory
– Supply versus demand
• Ad impressions on newspaper sites
are skewed towards networks
25
Ad Networks
Newspaper’s Web Sites
© 2011 Kantar Media
Ad Netwk
Share
Publisher
Direct Share
All Sites 24% 76%
Newspapers 33% 67%
www.KantarMediaNA.com
Ad Category Trends
26 © 2011 Kantar Media www.KantarMediaNA.com
Key Product Categories
• Automotive
• Retail – Department Stores
• Retail - Home Furnishings &
Improvements
• Hospitals & Medical Clinics
27 © 2011 Kantar Media www.KantarMediaNA.com
The Auto Rebound
28 © 2011 Kantar Media www.KantarMediaNA.com
Automotive ad spending has rebounded…
29 © 2011 Kantar Media www.KantarMediaNA.com
$10
$12
$14
$16
$18
$20
$22
'01 '02 '03 '04 '05 '06 '07 '08 '09 10 11(e)
Bil
lio
ns
AUTOMOTIVE AD SPENDING: ALL MEDIA
……To 2001 Levels
30 © 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
Newspapers have lost the most ground
31 © 2011 Kantar Media www.KantarMediaNA.com
$0
$4
$8
$12
$16
$20
$24
'01 '02 '03 '04 '05 '06 '07 '08 '09 10 11(e)
Bil
lio
ns
All Media
Newspaper
Total Automotive Ad Spending
32 © 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
Auto Segment 2004 2011 (est)
Factory $100 $84
Dealer Associations $100 $53
Local Dealers $100 $60
GRAND TOTAL $100 $72
33
Relative Rate Of Ad
Local Dealers - Newspapers
$52
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
2004 2010 H1 2011
Local Dealers 69% 77% 84%
Dealer Assn Groups 19% 9% 8%
Factory 12% 14% 8%
TOTAL AUTO 100% 100% 100%
34
Auto Spending in Local Newspapers is Concentrated Around Local Dealers
Distribution of Automotive Ad Spend
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
0% 10% 20% 30% 40% 50% 60%
Other
Radio
TV
Newspaper
H1 2011
2010
35
Auto Dealers – Media Channel Allocation Top 25 DMA’s
Newspaper share has grown in 2011
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
14.6%
21.8%
1.0%
19.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
All Media Newspaper Spot TV Other
H1 2011 vs H1 2010
36
Auto Dealers
Top 25 DMAs
© 2011 Kantar Media
Source: Kantar Media
Newspaper share gains tie back to above-average spending growth rates
www.KantarMediaNA.com
37
Dealer Affiliates Top 25 DMAs
© 2011 Kantar Media
+38.4% +20.6% -36.7% +41.0% +28.8% +3.9%
Newspaper Ad Spend: H1 2011 vs. H1 2011
Source: Kantar Media
www.KantarMediaNA.com
Among local dealers and associations,
search spending is twice as large as
display spending
38
Digital Auto Budgets
Display vs. Search
© 2011 Kantar Media www.KantarMediaNA.com
How Important Is Local Cable TV?
• Boston and San Francisco
– Cable system and primary paper covering
same geography
• Q1 2011
• Base: Local auto dealers
– Dealer association groups and factory
excluded
Dual advertisers account for 10% of the
newspaper’s total dealer spending Source: Kantar Media
39 © 2011 Kantar Media www.KantarMediaNA.com
Retail: Department Stores
40 40 © 2011 Kantar Media www.KantarMediaNA.com
41
Background
Department Stores
© 2011 Kantar Media
• A decade of declining sales
– Down 10% in past 4 years
• Consolidation into 7 major brands
– 85% of category total ad spend
• Budgets shift towards national media
– At the expense of newspapers
www.KantarMediaNA.com
Total Ad $ Newspaper Ad $
+18.0% -4.6%
+10.3% -23.0%
-5.6% -13.1%
-14.9% -23.3%
-24.5% -10.6%
-49.9% -19.7%
Jan-Aug 2011 vs. Jan-Aug 2010
42 © 2011 Kantar Media
Major Brands Have Cut Newspaper Budgets
Source: Kantar Media
www.KantarMediaNA.com
• Newspaper share of budget
varies widely
• National chains forego ROP
in favor of inserts
– Except Macy’s
Newspaper
% of Ad $
Inserts % of
Newspaper
Macy’s 44% 16%
Kohl’s 31% 98%
JC Penney 19% 96%
Sears 23% 95%
Target 16% 85%
Wal-Mart 5% 75%
12 Months Ending Aug 2011
43 © 2011 Kantar Media
Source: Kantar Media
Newspaper Advertising
Department Stores
www.KantarMediaNA.com
FSI spending declines are
due to fewer insertions
44 © 2011 Kantar Media www.KantarMediaNA.com
Retail: Home Furnishings & Improvements
45 45 © 2011 Kantar Media www.KantarMediaNA.com
46 © 2011 Kantar Media
Background Home Furnishings & Improvements
• Category definition
• U.S. retail sales up 6% from 2009
– But still 15% below 2006 peak
– Less spending on discretionary big
ticket projects
• Housing market correlation
• 24% fewer advertisers vs. 2007
www.KantarMediaNA.com
47%
21%
13%
19%
Share of Local Ad Spending: 2011 YTD
Furniture Home Centers Bedding All Other
47
Primary Segments
Local Media Ad Spending
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
47%
21%
13%
19%
Segment Share: 2011 YTD
Furniture Home Centers
Bedding All Other
Total Local $ Newspaper
Furniture +2.2% -7.3%
Home Ctr -13.1% -15.3%
Bedding +16.0% +22.8%
Other -0.5% -1.6%
Jan-Aug 2011 vs. Jan-Aug 2010
48 © 2011 Kantar Media
Primary Segments Local Media Ad Spending
Source: Kantar Media
$8.2
Jan-Aug '10 Jan-Aug '11
Newsp Ad $
www.KantarMediaNA.com
Source: Kantar Media
Source: Kantar Media
Local media budgets for big box
home stores have been challenged
49 © 2011 Kantar Media www.KantarMediaNA.com
10%
7%
12%
71%
% Share: Jan-Aug 2011
Home Depot Lowes
Menards All Other
2010 vs
2007
2011 YTD
-46.1% -31.8%
-43.7% -64.7%
+10.6% +3.8%
% Change In Local Ad Spend
50 © 2011 Kantar Media
Source: Kantar Media
Home Centers & Hardware Stores Local Media Ad Spending
www.KantarMediaNA.com
Source: Kantar Media
$234 $197 $199
$88
$58 $15
$79
$43
$10
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
2007 2009 2011 e
New
sp
ap
er
Ad
$ (
MM
)
Lowes
THD
Remainder
51 © 2011 Kantar Media
Source: Kantar Media
Home Depot & Lowes Newspaper Budgets in Free Fall
Remaining Advertisers Have Stabilized
www.KantarMediaNA.com
52 © 2011 Kantar Media
Furniture Stores Local Media: Jan-Aug 2011
• Media spend flattening after 2010 gains
• Spot TV growth outpacing newspaper
growth in majority of markets
− Newspapers losing share
• 7% fewer newspaper advertisers
– Lapsed advertisers have maintained spending
levels in other local media
– New advertisers have smaller ad budgets
compared to lapsed group
www.KantarMediaNA.com
53
Newspaper Spending Increases 2011 YTD
+10-20%
Indianapolis
+20-30%
Greenville
Phoenix
Pittsburgh
San Diego
Seattle
Wash DC
> +30%
Baltimore
Cincinnati
Hartford
Sacramento
St Louis
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
54
Newspaper Spending Declines 2011 YTD
(10-20%)
Chicago
L.A.
Nashville
New York
San Antonio
W Palm
(20-30%)
Detroit
Miami
Norfolk
(30-40)%
Denver
Kansas City
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
Hospitals & Medical Clinics
55 55 © 2011 Kantar Media www.KantarMediaNA.com
Background
• An aging and less healthy population
• A growing appetite for health information
• A crowded and competitive market for
medical service providers
– Establishing a brand identity with consumers
• Geographic “service areas” are expanding
– Implications for the media advertising mix
56 © 2011 Kantar Media www.KantarMediaNA.com
• Double digit growth rates
− Newspapers outperforming
• Growth currently strongest in NE
markets
Ad $ Growth vs. Prior Year
2009 2010 YTD ‘11
Total -10.8% 11.9% 18.8%
Newsp -14.9% 13.6% 22.8%
14.3%
19.5%
14.9%
25.9%
West
Central
Southeast
Northeast
0% 10% 20% 30%
Growth Rate: 2011 YTD
57 © 2011 Kantar Media
Source: Kantar Media
Hospitals & Clinics
Local Media Ad Spending
www.KantarMediaNA.com
Source: Kantar Media
• Budget increases from recurring advertisers
• $ from new advertisers exceed $ from lapsed advertisers
Local Newspaper Advertising (40 Selected Markets)
2 Yr Advertisers Jan-Aug ‘10 Jan-Aug ‘11 % Change
# of Advtsrs 2,552 2,552 ---
Spend (MM) $126.7 $143.3 +14.0%
1 Yr Advertisers
# of Advtsrs 3,438 3,244 -3.2%
Spend ($MM) $39.4 $59.3 +50.9%
58 © 2011 Kantar Media
Source: Kantar Media
Hospitals & Clinics
Newspaper Spending Growth
www.KantarMediaNA.com
Newsp 51%
TV 19%
Radio 14%
OOH 13%
Web 3%
Newsp 30%
TV 29%
Radio 22%
OOH 17%
Web 3%
Established Advertisers (27 Selected Markets)
New Advertisers (27 Selected Markets)
59
Local Media Mix – YTD 2011
Established vs. New Advertisers
© 2011 Kantar Media
Source: Kantar Media
www.KantarMediaNA.com
Source: Kantar Media
Recap
60 60 © 2011 Kantar Media www.KantarMediaNA.com
61
What Do These Ads Have in Common?
© 2011 Kantar Media www.KantarMediaNA.com
• Key metrics for print edition advertising remain weak
• Digital ad spending growth coming from digital-only brands
• Newspaper web sites and ad networks
• Key categories
– Spending surge from local auto dealers is benefitting newspapers
– A weak environment for key retail advertising segments
– The growth opportunity from healthcare providers
Recap
62 © 2011 Kantar Media www.KantarMediaNA.com
Thank You!
www.KantarMediaNA.com 63 © 2011 Kantar Media