Monday, April 21, 2014

Where agencies see long-term growth: study

The American Association of Advertising Agencies has recently released its 2014  (attached) effectiveness study, looking at the transformation of agencies from the eyes of both the clients and agency partners.

The study pulls out data for media versus creative agencies as well as over-performing agencies, that is those that self-reported a greater than 10% year-over-year growth over the past three years (the report refers to non over-performing agencies as “the rest”).

New agency revenue streams were seen as a top trend for agencies overall (at 28%) but came in dead last for brands, with only 3% of respondents saying it was something that would influence an agency’s future.

However, the secret to long-term growth may be in that new revenue stream, the study found: over-performing agencies were more likely to focus on these new revenue streams, with 35% naming it a top trend that will impact the agency’s future, compared to 24% of “the rest.”

Media agencies placed ROI (60%), big data (68%) and new revenue streams (38%) as most important to long-term growth, echoing these over-performing shops, in their top three trends shaping the face of agencies.

Clients have doubts about agencies’ data and analytic capabilities, with only 35% saying partners have the right data and analytic tools available to measure effectiveness. Media agencies are confident in their ability to lead the way when it comes to big data – with 68% believing their agency has “the tools available to measure effectiveness” and that “big data helps demonstrate the value of creative ideas” (compared to 45% and 46%, respectively at creative shops).

Media agencies are also more aligned with client demand when it comes to measurement, with 52% saying they look at sales or profit levels to determine campaign success (compared to 34% at creative shops). Creatives put the most focus on consumer engagement at 46%.

Brand strategy and brand positioning provided the greatest disparity between media agencies and creative shops, with creative placing more importance on branding than media shops, which placed the bulk of their interest on data insights.

The study polled 725 people (409 agencies, 247 brands) in a quantitative study, and conducted almost 200 qualitative interviews, with largely manager or higher-level employees across a wide swath of industries.

Wednesday, April 16, 2014

Female Teens Spending Less on everything - Media Consumption

According to the Piper Jaffray 27th semi-annual “Taking Stock With Teens” market research project, teen spending contracted just 1% from the Fall of 2013, compared to more substantial declines previously. Across both the upper and average income groups, teen male spending is up 4% from Fall 2013. This compares to continued mid-single digit declines among females.

Overall, the report notes that parent contribution to teen spending bounced back to the 65% of spend range, following a period of contraction. Teen unemployment remains elevated, but off of peak levels. Time priorities have shifted, showing that advanced placement courses are the norm. Year-round single sport/activities are more common, and school years are starting earlier and ending later (shortening the opportune summer employment period).

A quick snapshot of the survey results, including fashion, beauty and personal care, restaurants, digital media, gaming, and wireless communication includes the following:

  • Teen males indicated they were spending more, which has historically signaled inflection in broader spending
  • For the first time in the survey history, food exceeded clothing as a percentage of the teen spending. Electronics also gained in share, while furniture and fashion lost modest share.
  • Declines in the fashion category were most severe in accessories, down double-digits for a second cycle in a row
  • 17% of teens expressed interest in an Apple iWatch, up 12% from Fall 2013, an indication of consumer appetite
  • Instagram ranked as the most important social network, exceeding Twitter and Facebook for the first time in survey history
  • Cable subscriptions are becoming less essential for teens at home, while online streaming is more critical. Out of home, IMAX continues growing share among teens
  • Music/radio listenership has grown for Pandora and local radio, largely at the cost of MP3s and CDs

Influences remain consistent, with friends dominating both upper income and average income. followed by the Internet, says the report. The Internet first displaced television as the No. 2 influencer with teens in the Fall 2010 survey, and the report indicates that this uptrend will likely continue as social networking and online shopping drive teens online. Instagram and Twitter are the two most used social media sites, as teens are increasingly visual and sound bite communicators.

Social Network Utilization by Teens (% of Respondents)
% of Respondents/Most Important
Fall, 2012
Spring, 2013
Fall, 2013
Spring, 2014
Source: Piper Jaffray, April 2014

More complete information about individual categories is also included:

The teen food category represents restaurants and dining out. The study uncovered a modest increase in spending devoted to events (including concerts, festivals, etc.). Within the fashion category, clothing increased modestly at the expense of footwear and accessories. In addition, there has been a continuation of a lifestyle/participation-based trend in athletic fashion. These data points are evidence of a trend toward experiences versus items worn, and a notable shift in perceived status spending.

Key findings from the survey in fashion, beauty and personal care, restaurants, digital media, gaming, and wireless communication include the following:

  • Within the fashion category, says the report, the declines were most severe in the accessories classification, down double-digits across genders and income classes for a second cycle in a row. Spending on apparel stabilized at flat for upper income teens and down 2% for average income teens. Spending on accessories declined 22% among upper income and 26% among average income teens on a year over year basis
  • Shopping frequency has declined from a peak rate of 38 trips/year to 29 trips/year (one every 1.75 weeks). Fall 2013 appears to have marked the low point at 28 trips. Mall traffic in the teen space has declined 30% cumulatively in the last 10 years. Teens are browsing more often via their mobile devices, shopping with purpose (conversion rates are up), buying when they have a real or perceived need, and visiting the mall less for entertainment value
  • Teens prefer off-price venues to traditional department stores for their fashion needs, and are increasingly shopping online and on their phones. When asked about preferences between shopping in store and online, about three-quarters of the females polled prefer stores over sites, but the males are closer to a fifty-fifty split. Moreover, when asked about preferences between pure play e-commerce sites and sites associated with stores when shopping for clothing, only 14% of females and 24% of males prefer the pure play e-commerce sites
  • Across both upper income and average income sub-sets, the top five preferred clothing brands were consistent to the prior year and prior season, but rank and share shifted slightly. In the upper income group (teens that tend to be trend leaders), Action Sports Brands ceded share as Forever 21 gained share. Within Action Sports Brands, teens listed 29 unique lifestyle brands, evidence of extended boundaries around the core lifestyle aesthetic into areas of streetwear, urban and culturally inspired trends

The report concludes by noting that survey results point to four distinct fashion themes: stability in demand for Action Sports Brand; moderation in Fast Fashion preference among teen girls; cresting of the refined classic cycle, and evolving demand for fashion athletic brands. In addition to these trends, an increasingly active teen is catering to growing demand for performance athletic brands.

Study Reveals Roles Between Personalities, Listeners - Profiling Audience by host

Clear Channel has revealed the results of a new national study of the role of radio and the unique connection between radio personalities and listeners in a digital and social media-oriented world. The study's findings showed that radio is a far more powerful social force than ever before, particularly because of the conversations fueled by air personalities and the connection listeners feel to air local and national talent like Ryan Seacrest, Sean Hannity, Delilah and Bobby Bones.

Key findings included:

  • When comparing radio personalities to other media personalities, 6 out of 10 listeners said that radio hosts are "like a friend," whose opinions they trust.
  • With even more ways for consumers and air personalities to interact, 4 out of 10 listeners feel personalities make more of an effort to foster a personal connection, making the radio experience inherently more social, particularly when compared to TV or streaming playlist services.
  • Listeners equate an air personality endorsement to a friend's recommendation, more so than they do sponsored Facebook posts, sponsored tweets or television commercials.
  • More than half of the study participants agreed that they trust brands, products and services their favorite on air personality recommend, a finding that is encouraging smart marketers to undertake unique radio-based campaigns.

These findings were borne out by specific examples, including:

T-Mobile recently partnered with CCM+E in an innovative campaign that included a full-day takeover of Clear Channel's radio stations in 18 markets, all facilitated by local on air personalities. After the campaign, recall had increased by over 100 percent and purchase intent grew by 33 percent.

Nationally syndicated host Delilah, the most listened-to woman on radio in the U.S., voiced a campaign for Chase's Blueprint service that increased awareness by 26 percent. In addition, a third of all listeners said they were likely/somewhat likely to get a card after the campaign, nearly doubling the intent number.

"Air personalities are a key element in defining what makes radio different -- and more personal -- than any other medium in consumers' minds," said Clear Channel Chairman/CEO Bob Pittman. "These personalities are viewed as stars and tastemakers -- but also have a familiarity and personal touch that invites listeners not only to tune in, but to call, tweet and email as if they are listeners' personal friends. It's a powerful relationship, one that has deep implications for smart marketers who recognize that when Ryan Seacrest, Elvis Duran, Delilah, Bobby Bones, and hundreds of other personalities offer an endorsement -- whether of a song, a brand or a product -- listeners take it to heart, and take action. No other medium has this power."

The study also found that 6 out of 10 American listeners have a favorite personality who they look forward to hearing in the morning. 7 out of 10 participants said they consider these personalities to be regular people like themselves, who are "relatable" and "authentic," and many have remained loyal, listening to the same personality for years.

The vast majority of Americans have interacted with radio personalities during their lifetimes -- 8 out of 10 have called into a station, met a DJ in their community, or interacted in some other manner. And the growing social media landscape provides even more opportunities for listeners to connect with their favorite radio personalities -- according to the research, about 6 out of 10 of listeners have also engaged with radio through social media platforms.

"This research illustrates the exceptional connection consumers have always had with radio and its personalities," said CCME Executive VP/Insights, Research and Analytics Dr. Radha Subramanyam. "Air personalities have a unique, two-way relationship with listeners, one that engenders comfort, trust and admiration." Dr. Radha Subramanyam Other key findings of the research include:

  • 47 percent of listeners active on personality/radio station social media feeds said they feel more connected to their favorite personalities because they can interact through social media.
  • Consumers with strong parasocial relationships are more likely (by a margin of 20 percentage point or more) to recall, seek more information about, purchase and recommend brands, products and services endorsed by radio's air personalities.
  • Personality endorsements are more likely to incite participants to take action, according to more than half of participants, when compared with nine other messaging/advertising approaches, including: website ads, sponsored posts on Facebook, mobile display ads, sponsored texts or tweets, or emailed product/service pitches, among others.

More than 6 out of 10 listeners are specifically likely to talk about things air personalities have said, often through their social media networks, furthering extending the reach and impact of personality endorsements. Dr. Radha Subramanyam The research results were reported by Dr. Subramanyam, and were based on a study CCME conducted in conjunction with the University of Southern California, which surveyed 2,700 respondents. The report also includes insights from an additional online survey of over a thousand respondents, as well as from live focus groups, ethnographies, listening logs, digital assignments and conversations with air personalities from across the country.

Wednesday, April 9, 2014

Zenith adjusts ad spend forecast up

ZenithOptimedia has adjusted its ad spend forecast upwards, predicting that the global market will grow by 5.5% in 2014, reaching $537 billion by the end of the year. That forecast is up 0.2% from the last report in December. Ad spend in North America is expected to grow by 4.8% this year, bolstered by the Winter Olympics and mid-term elections.

Ad spend in Canada is expected to grow by 3.5% in 2014 versus 2013, with larger gains expected in 2015 and 2016.

The internet is the fastest growing medium measured on the global market, and is expected to increase by an average of 16% each year between 2014 and 2016. Display is the fastest growing sub-category, with 21% annual growth, due in part thanks to the rise of social media advertising, which is growing at 29% a year. Online video is expected to grow at 23% per year for the next three years.

Mobile advertising is growing six times faster than desktop, and is forecast to grow at a pace of 50% annually from 2014 to 2016. In contrast, advertising on desktop is forecast to grow at 8% per year in that time period.

Despite the internet’s speed of growth, TV remains the dominant ad platform, accounting for 40% of all ad spend in 2013, almost twice of what internet advertising takes up (21%). TV ad spend is expected to grow 5.2% in 2014, benefiting from things like the Winter Olympics, World Cup and mid-term US elections.

Canada is number nine in the top 10 ad spenders globally, with $11.57 billion for 2013. The US is #1, with $167.29 billion.

In Canada, the internet took up the biggest piece of the advertising pie in 2013, with 30.8%, followed by TV with 30.4%.