On one hand, media owners were as keen as ever to cherry pick the positives and highlight the successes, while agencies have been more willing to give a candid view on what was a less than inspiring set of results.

MEC’s press director Rob Lynam tells the real facts; out of the top 100 actively purchased titles, 70 have lost circulation versus July to December 2009.

Andy Pearch, co-founder of MediaSense, says that while there were some good individual performances “the overall impression is of a category treading water, with fewer new entrants and a number of household names in freefall.”
The quality end of the market seems to have fared better, with Women’s Monthly and Home Interest titles putting in a good performance. However, Teen, Music and Men’s Lifestyle sectors have struggled, possibly as a result of readers favouring digital formats.

Pearch also notes the volatility within the Women’s Weekly market – “A lot of this is down to the increased prevalence of multipacks, which are distorting circulations and are becoming an irritant for media buyers,” he said. Northern & Shell was a prime example of this.

The freebie market saw more positive results, which is perhaps to be expected in a post-recession market. Shortlist and Sport continue to dominate the Men’s Lifestyle sector; while Stylist is well on the way to becoming a key player in the Women’s Weekly sector.

The PPA’s view is that the results give an “indication of an improving outlook for the UK consumer magazine sector,” and pointed to the 0.3% increase on the first half of 2009.
“This is an encouraging set of results that reaffirms the popularity of magazines among consumers. Through continued innovation, magazines’ have shown their ability to really engage readers and provide a powerful platform for advertisers,” Barry McIlheney, chief executive of the PPA, said.

This article was originally written by Liz Jaques from Mediatel on 13/8/2010.

To view the article on Mediatel click here.

Chief executive Adam Crozier revealed robust half-year figures yesterday but also admitted ITV’s shortcomings. He said broadcasting had changed rapidly in recent years and said: “ITV is not currently fit to compete in the changed environment.

“The business is overly dependent on TV spot advertising and ITV’s flagship channel is continuing to lose viewing share by platform.”

He outlined plans to maximise revenue through creating paid-for content, using product placements and advertiser-funded programmes – among other strategies – both in terrestrial and online formats.

But industry experts urged ITV not to lose focus on creating quality content to drive mass audiences and to make HD channels attractive.

Steve Hobbs, deputy managing director of Carat, says that on paper the strategy looked like a strong and much needed plan but, he said: “It risks an overemphasis on new revenue streams at the expense of a commercially successful core product at this crucial time in the economic recovery.”

Others challenged the paywall strategy, with one broadcaster source saying: “Sky subscribers will pay for what they see is high-quality or exclusive content. ITV doesn’t really fit that description. It’s a logical step in the long run, but by no means a game-changer and a pretty poor result after months of trying to come up with a pay idea.”

Chris Locke, UK trading director at Starcom Mediavest Group, said the HD initiative was “more of a dabble than a full blown strategy”, adding: “The sense of déjà-vu is overwhelming.”

Former agency executive Graham Brown, now of Media Sense, says a strong ITV can only be good for television and advertisers. But how to generate more impacts via ITV+1, more revenue via HD subs and global distribution, and better access via multiple platforms with a lower programming budget will be the challenge. “Maybe Crozier is betting on a more relaxed regulatory framework?”, he says.

Clients are circumspect about ITV’s plans. A Unilever spokesman said: “We welcome any opportunity for ITV to strengthen its business. A stronger business means greater investment in programming, which will ultimately benefit its viewers.”

This article was written by Branwell Johnson and appeared on Marketing Week.co.uk on 4/8/2010.

If you subscribe to Marketing Week.co.uk, you can view the article by clicking here

The House of Lords communications committee is to look at the regulatory changes to the ad business already under discussion or due to be implemented, from product placement to ITV’s self-proclaimed albatross, Contract Rights Renewal (CRR).

Part of the investigation will also look at “how much of the recent decline in television advertising was due to the impact of the economic recession and how much was the result of migration of advertising to the internet, and other causes”.

The news was unexpected because many in industry felt that no government body had the appetite, or the energy, to hold a thorough review of such a complicated sector right now. The UK is just emerging from recession and the after shocks of a change in government while the TV industry going through rapid change, both in terms of technology and structure.
Add to that the fact that the Competition Commission (CC), after a thorough and lengthy industry dialogue, has just ruled there will be no change to the CRR remedy imposed on ITV in 2003 and it’s no surprise many feel the dust needs to settle before more consultations and inquiries. The Conservative party did signal before the general election that it might look at CRR and the CC’s remit but it was not expected to be a priority – and there is no indication that this may have been the springboard for the review.

Unsurprisingly, media agencies and clients are less in favour of another regulatory review of CRR, as they believe ITV is in a strong position in regard to audiences and ad revenues. The broadcaster’s results are expected on Tuesday (3 August) and are expected to bolster this perception.

Chris Locke, trading director at Starcom, says: “The CC has just been through this at length and found no reason to remove CRR in the foreseeable future, as the view was ITV would leverage their undoubted power to the detriment of advertisers and the other TV channels.
“TV is in rude health in a tough market elsewhere. Ofcom and the CC look at this regularly, consulting with all interested parties, and, to date, nothing they have seen warrants any changes to CRR.
Frankly we don’t need another body looking into this – it is more than covered regularly elsewhere.”

Client body ISBA is a little more circumspect and Bob Wootton, director of media and advertising, says: “It’s the prerogative of the committee to hold their inquiry and, naturally, we will be responding. It is our hope that Isba is called to give evidence so that we can reaffirm our longstanding and well-known position on CRR. The more interesting point in this process will come after the committee’s deliberations and its recommendations are known.”

However, some argue for a more visionary shake up of the whole traditional TV trading system that, on the one hand sees powerful broadcasters flexing their muscles during the seasonal trading sessions, while on the other hand agency buyers look to volume deals.
There is no suggestion that the committee’s review could lead to any overhaul of the trading system but Julia Jordan, UKTV joint acting CEO and executive director, business & Operations, says: “Our concern has been the recent fragmented focus by Ofcom; issues such as CRR and Airtime Sales Regulations cannot be considered in a vacuum.

“TV is a rapidly evolving medium and a complex trading market, however regulation has been grounded in historical, highly-commoditised trading models without considering how the market must necessarily evolve to support the new medium of television – defined as quality long-form AV content – delivered across multiple platforms.”

She suggest that the wider investigation must explore a “future-facing model” that appropriately supports the broadcast industry but with the ultimate benefit clearly going to consumers and advertisers alike.
There are other elements to the committee review beyond CRR that may ultimately lead to benefits to advertisers. Product placement will be a focus. The previous government introduced legislation to allow product placement but with a long list of restrictions and prohibitions. Could some of these be eased so that, for instance, a beer brand could appear in the Rover’s Return in Coronation Street?

Graham Brown, a former Aegis executive and now partner at consultant and media value company Media Sense International, says that while the reasons for the review’s timing are unclear, on balance, it is likely to lead to a better environment for clients.
“The political back-drop of this inquiry is unclear however, if it’s intention is to set place more regulation e.g. around product placement, and create higher costs for advertisers through the straightforward ’reduction or removal of the CRR, then it will be counter-productive for both marketers and the broader economy.

“If on the other-hand and as seems more likely given the economic imperatives, the outcome results in a more robust, dynamic and less regulated television marketplace (including the BBC!), with opportunity for growth at the forefront, then it is a positive initiative and should be welcomed.

The deadline for written evidence is 24 September so those with an interest in challenging the long-established status quo and building a healthy TV industry fit for marketing purposes in the next decade should start putting pen to paper.

This article was written by Branwell Johnson and appeared on Marketing Week.co.uk on 30/7/2010.

If you subscribe to Marketing Week.co.uk, you can view the article by clicking here

But audience numbers may not be the singularly important measure that they once seemed to be on the web; they certainly won’t be for The Times in its new experiment. And The Times’ effort is only a beginning.

But it’s still revealing, and perhaps saddening, for some of the paper’s journalists, that The Times is seeing its prominence on the web fade. In the weeks before the pay wall went up, it enjoyed online market share of 4.29% in the print news and media category, according to Experian Hitwise. By the week ending July 10, online share had dropped to 1.43% — 33% of where it had been five weeks previously. By the week ending July 17, share had dropped even further, to 1.37%.

The pay wall effect seems evident from other angles as well. The Times Online attracted nearly 2.8 million visitors in May but only 2.2 million in June, a 21% decline, according to ComScore data. The average time visitors spent on the site fell 24% from May to June, meanwhile, and the number of pages visitors viewed sank 32%, according to ComScore. U.K. newspaper sites as a whole saw unique visitors slip 2%, time spent edge up 1.4% and pages viewed dip 1%.

The Times refused to comment on numbers, but those close to the matter suggest that about 150,000 users registered for access to the Times and Sunday Times while they were free, with 15,000 apparently agreeing to pay money.

The site is currently promoting an offer of £1 ($1.50) for a 30-day trial, after which the cost is either £1 for a 24-hour pass, or £2 ($3) a week.

Although The Times will not discuss numbers, they are understood to be trying to charge a premium for advertising behind the pay wall. Sources indicate that ad rates have doubled to $45 per thousand users.

It’s wrong to get caught up in the traffic numbers, said John Baylon, group digital trading director at SMG Group. “People are asking the wrong questions,” he said. “The point is to make money out of the subscribers you have. It’s about revenue per customer, not the number of customers.”

Advertisers on thetimes.co.uk include DHL, BPP flexible learning, Hewlett Packard and Dubai property developer Emaar. Mr. Baylon said that News International has not been selling the site very hard, and are instead focusing on internal issues and looking at how it is all working.

There are also numerous factors at work in these early days beyond consumers’ willingness to pay for news on the web. Mr. Murdoch’s News Corp., for example, needs to get the site better sorted out. Readers have complained that it is slow and cumbersome, making it a harder sell when there are so many other news and lifestyle sites a quick click away.

The current Times pay wall is also an essentially “all or nothing” offering, shutting out non-subscribers from almost all content, but many commentators still favor a hybrid approach including a bit more free content that’s subsidized by advertising and serves to draw in potential subscribers.

“I continue to believe that a mixed model, with multiple ways of making money, is the only way for general news publishers,” said Hugo Drayton, CEO of InSkin Media.
“But it’s a lot of hard work. There will be areas of content that will prove ‘payable,’ but not general news. I am yet to be convinced that the pay wall is more than part of the answer in a complex, fast-changing market.”

Mr. Baylon, on the other hand, is more optimistic about the long-term prospects for the pay wall. “The consumer mindset is a big boulder, but 15 years ago, when Murdoch started BSkyB, nobody thought people would pay for TV when you could get it for free. Now he has 10 million subscribers, built on the back of great content.”

The Times experiment, and all the attendant adjustments that will follow, needs to happen, said Graham Brown, founding director of consultancy Mediasense. Consumers can gorge on free content all day, but newspapers might not be able to survive without charging, he said. “The internet is an all-you-can-eat buffet, but eventually, like the music industry, newspapers will learn that they can’t continue that way. … It’s commendable that Murdoch is prepared to take the risk.”

News Corp.’s Sun and its Sunday sibling title, News of the World, are expected to eventually follow The Times into some sort of online pay strategy.

“They are likely to test all kinds of permutations… it’s their train set after all…and if they can find a way to make digital content pay, then it’s all worthwhile” Mr. Brown said.

This article was written by Emma Hall and appeared on Advertising Age.com on 22/7/2010.

If you subscribe to Advertising Age, you can view the article by clicking here.

Last week’s annual media owner versus media agency cricket match at the Hurlingham Club, which raised around £100,000 for the Lord’s Taverners charity, demonstrated that this remains an industry, underneath its competitive streak, that is capable of incredible unity and generosity.

Most of the time, though, industry players seem more intent on smashing each other’s businesses for six than working constructively together.

Throw clients into the mix and the situation becomes even more bitterly contested. For instance, last week brought more apparent examples of pitch madness with our sister title Campaign Asia reporting that Reckitt Benckiser is attempting to charge media agencies $10,000 for the privilege of pitching for its business in India, leading to some agencies refusing to take part.

Closer to home, Thomas Cook seems to have scared off some agencies from its UK media pitch with a line in its RFI, under “Fees and Costs”, that makes it clear that it expects “a substantial signing on fee in return for a three-year contract award”. Agency sources have suggested that this could be as high as £1 million.

It seems we are moving into hitherto uncharted territory – at least in the scale of some of these demands. Which has led some media agencies to believe that the role of new-business intermediaries has become increasingly vital. Agencies have praised recent pitches run by intermediaries such as the British Gas contest, with former agency man Paul Longhurst acting as a consultant, and last year’s Lloyds Banking Group pitch, which was managed by MediaSense, as examples of pitch best practice.

The presence of a consultant is not automatically a positive but the involvement of an AAR, Agency Insight or MediaSense on a pitch process should reassure agencies that this is likely to be a client that cares about media or at least wants to run a balanced pitch. As one agency business development director puts it: “I’m increasingly a believer that intermediaries are a positive force in this – it does them no favours to base a pitch solely on price as procurement can do that. And I’ve yet to see an intermediary-led pitch that has descended to the recent levels of farce.”

Media owners such as News International (see piece opposite) are searching for a higher valuation for the content that they provide and, in my view, so they should. Agencies, which are capable of creating excellent work (Mindshare’s clever and effective campaign for First Direct that recently won a Cannes Media Lion and ZenithOptimedia’s O2 activity, which won the Grand Prix at the Thinkbox Awards, were both impressive), should do the same. While media shows great generosity towards charity, a little more towards its own ideas would benefit all sides in the long run.

If you subscribe to Campaign Live, you can view the article by clicking here.

Called Media Minds, our Group is a forum for expressing, exchanging and commenting on current and emerging issues that affect the global media industry. We now have well over 700 members from around the world.

Every quarter we publish a summary of the key topics that got our group talking the most.

The issues that mattered most this quarter were:

The 2010 World Cup winners and losers
Emerging tensions in client/agency relationships
The Digital media shakeout

Click on this link to see a full summary of these discussions.

We hope you find what our group had to say interesting.

Campaign: “Why were there so many media pitches last year and will this dry up to some extent in 2010?

AP: 2009 was an anomalous year : the number of pitches globally rose by 40%, and the value of those pitches increased by 60%. There will always be a constant level of media reviews, due to contracts running their course, business restructures, consolidations and soured relationships. Last year’s increase can be put down to the global recession, which required many businesses to take a knife to expenditure, and to corporate opportunism – a number of clients took advantage of instability to improve existing terms or source a better deal elsewhere. 2010 will be “relatively” quiet by comparison.

Campaign: To what degree are clients asking you for services that go beyond pitch management?

AP: Most of our work does not actually involve pitch management. The majority of our work is based around Performance Management, working with advertisers to improve media effectiveness and productivity with agency partners, and Relationship Management, working with advertisers to strengthen and improve agency service levels and capabilities through formal reviews of relationships, processes and contracts. We have an excellent pitch management process, of course, but it is not our calling card or signature service.

Campaign: What can agencies do to create longer standing relationships with their clients?

AP: Fair question, but we should also be asking how clients can work harder to maintain stronger relationships with their agencies. It’s a two-way street after all. There needs to be two big shifts in focus : a re-allocation of agency resources and talent from the pitching arena to existing clients; and a re-focus away from media costs to media performance as client/agency metrics for success. An agency can only make progress by being profitable, and profitability comes in the main from an existing client base, not from new business. Our advice to agencies would be : re-focus on retention; introduce systems for externally benchmarking your client relationships; minimise staff churn; keep relationships fresh; do the basics well; establish strong and durable contracts.

Campaign: To what degree are digital and social media vital requirements demanded by clients of agencies?

AP: Absolutely essential. Digital media are central to consumers’ lives. Facebook reaches 23 million people in the UK, and accounts for nearly a quarter of all time spent online. All the traditional media are transitioning to digital models – just look at web TV, the Ipad’s apps, digital billboards. These are vital disciplines, and present exciting opportunities for agencies as the landscape is still evolving. There is a debate around whether digital should be treated as a specialist area, but my personal view is that integration is essential and that the digital disciplines should not remain in separate silos.

Campaign: How do you measure whether an agency is doing a good job for a client?

AP: Nice cue ! We have recently established a partnership with Aprais, the market-leading relationship audit service. At MediaSense, we believe that the best work comes from the best relationships. As the industry shakes out, the winners will be those clients which manage their agency relationship in a systemised and structured way, ask the right questions of themselves and their partners, and benchmark their progress.

Campaign: What are the qualities you need to do your job well?

AP: A clear vision – you can’t take people with you unless you know where you’re going. Objectivity, diplomacy and peer group respect – much of what we do is to help multiple stakeholder groups resolve problems and achieve alignment. Logic and basic maths – because at the end of the day someone needs to quantify the hard benefits of the work agencies are doing for their clients. Flexibility – media excellence is not just a by-product of rigid behaviours and metrics, after all…”

Of course, there were more pitches worldwide than ever in 2009 – about 30% more than normal – and there was certainly an element of “pencil-sharpening” going on by some brand owners, who were actually quite happy with their agencies, but were under pressure to reduce costs. But it wasn’t necessary for them to go to market to achieve this result.

Now in 2010, it seems inevitable that the number of pitches will start to come down. For one thing, there are more global media agency contracts than ever, and it is clear that these are less likely to be unpicked than local or regional arrangements.

Contracts are becoming less portable these days, as the role of the media agency has evolved from being a buyer of spots and spaces to being more fully integrated and “plugged in” to the digital sales funnel. There are genuine issues around the ownership of data, which need to be carefully considered by clients before considering a switch.

I believe we are turning a corner, where agency performance is no longer judged on its ability to cut costs, but to build genuine value and sales. The best performers will be the clients with the strongest and most productive agency relationships. 2010 might give everyone in the industry a chance to catch their breath. Perhaps both clients and agencies will use the opportunity to draw up more progressive contracts.

Andy Pearch April 2010.

This piece appeared as an ‘Industry View’ in M&M’s re-launch edition, April 2010 (page 7).

To view the article click here.

Our analysis of 2009 TV ad revenues – the year of the worst recession in history – shows that the most cost-effective channels actually lost market share, while the most expensive broadcasters gained. This is counter-intuitive, given the extreme cost pressures on many businesses and the increased prevalence of procurement-driven media pitching. Bizarrely, we are witnessing a flight from value!

Perhaps this suggests that something is wrong with the functioning of the TV market and/or the way in which buying performance is assessed and rewarded. Many sellers have pointed out that CRR has turned impact volumes into the criteria for success, and has stifled broadcaster innovation and commercial creativity. Many buyers have pointed out that the pervasiveness of media auditing rewards delivery against hygiene factors, while penalising differentiation and risk-taking.

While there is clearly some truth in these opinions, is there really any appetite for changing the status quo?

Well, Channel Five are trying to steer buyers back to a more value-driven approach, and they are building a very strong case.

Five is after all the UK’s fifth most-watched channel, enjoys over 50% weekly reach, regularly outperforms Channel 4 in peak-time and attracts 20 million more viewers per week than Sky One. Despite this, in April 2010, 100 16-34 adult ratings on Five will cost a third of the price of the same on ITV. Yes, a third! Just as surprising, 100 ABC1 Adult ratings on Five will be just half the price of the same on Channel 4.

“That’s not fair!” I hear cry the folks at Grays Inn Road. “Our ratings are more valuable!” On a reach basis, yes – but not a lot more. On a cost-per-reach basis, no.

“It’s all about engagement!” I hear cry the folks at Horseferry Road. “Our viewers are more loyal”. And maybe they are, but there has been very little robust data on viewer engagement, until now….

There is a new kid in town, called IAG. Owned by the research giant, Nielsen, IAG is a big business in the States and has set up in the UK. IAG measures viewer attentiveness to programmes and tracks advertising recall within programmes. Their data promises to shed new light on channel loyalty, and to identify the most effective programme genres and advertising environments for brand owners. A glimpse at the first cut of data indicates that Channel Five is faring very well in terms of viewer engagement and ad recall.

If successful, IAG could change the way we value TV airtime because it offers the prospect of linking quality metrics to consumer outcomes, rather than inputs. (And waiting around the corner are IPTV and return-path ad serving on Sky, which will take the TV value debate to yet another level).

So 2010 appears to be the year for re-appraisal. To progress, the TV industry must move from a mindset of cost-reduction to a mindset of value creation, where negotiations will increasingly become results-based rather than share-based, and where measurement will increasingly focus on outcomes rather than proxies.

In this environment, Five can thrive.

Andy Pearch, 25/3/10

To learn more about what’s new at Five, click here:

Things can only get better

Things are looking up for media folk this month with a succession of good news stories. In the UK, the largest commercial TV channel ITV reported advertising up 29% in April, 27% in May and 32% for June driven mostly by retail and FMCG clients. Brokers at RBS say an 11% increase for the year is “conceivably possible”.
In the US and Canada, automotive spend is on the rise while both Carat and Zenith have now upgraded their global ad forecasts, predicting respectively a 2.9% and a 2.2% increase in 2010, up a couple of percentage points from previous figures.
According to Carat, Germany and Spain’s ad markets will still shrink but the US forecast has turned positive. New boss of Aegis Jerry Buhlmann says 2011 will be “an increasingly benign environment”.
The positive news has also fed through to industry employment data, with BNET’s Ad Agency Layoff Counter reporting that WPP is hiring again, R/GA is looking for 230 staffers and Euro RSCG Life has 50 vacancies.

MediaSense thinks:

April 2009 marked the nadir for the global recession, so year-over-year comparatives will be very positive for the next two quarters. Global stock markets have priced in a recovery. So if the revival extends into the autumn, we can say with confidence that the media recession is over.

Traditional media fight back

The group has detected a global mood amongst regulators and traditional media owners to turn the tide against digital upstarts such as Google.
The Times in the UK is heading behind an online paywall with an aggressive strategy against aggregators. Also in the UK, a report from The Commission of Inquiry into the Future of Civil Society calls for Google and other companies who make money by aggregating news to be taxed to support local newspapers. A similar proposal has also been debated by the US Federal Trade Commission.
UK restrictions on TV ad sales could also be loosened, with the regulator Ofcom proposing to review the rules on conditional selling and possibly allow broadcasters to restrict supply of ad minutage. A relaxing of cross-media ownership rules is also on the cards in the US and Australia
One contributor to Media Minds suggests that traditional media owners should change their approach to digital investment to be successful. Essentially, they should stop looking for a single big solution and focus on lots of small initiatives. VOD is the fastest growing online display category right now, and traditional content owners appear well-placed to reap its benefits.

MediaSense thinks:

Well, it’s about time! The past 5 years have shown us that the ad-funded model cannot survive in isolation; consumers (and aggregators) will pay for great content; and the last click should not always win. Regulators must continue to play a key role in maintaining healthy media ecosystems.

The iPad changes everything?

Rupert Murdoch has become a fan and Apple had a good launch weekend for its new techno-wonder, shipping 300,000 machines to consumers, who downloaded one million apps and more than 250,000 ebooks during the first day of US sales.
It’s the Apps for the new platform that represent potential salvation for traditional media owners, offering them a way to monetise content via the web as effectively as they have been able to in the mobile space.
But more than that, the tablet could transform the newspaper and magazine reading experience, offering interaction and supplementary content at the tap of a finger. Apps have been launched by Wall St Journal, The Guardian, New York Times, US Today, GQ, National Geographic and Men’s Health. Although many offer free taster content, most charge for full access.
Reviewers have generally been impressed with the iPad, citing its bright and responsive multi-touch screen. However, the first problems have also surfaced with users reporting intermittent WiFi problems, and the absence of Flash as an option for publishers.
Group members agree that its ultimate success will depend on its ability to influence on the whole PC/laptop market, beyond simply offering Apple connoisseurs a bigger mousetrap.

MediaSense thinks:

Add apps and e-subscriptions to advertising and cover prices, and the fate of publishers is back in their own hands. For the time being, the economics of devising bespoke immersive ads for apps just doesn’t add up, but every advertiser should be testing and experimenting in this new environment.

March’s most read articles were:

1.WPP: Digital will be 2/3 of our business in 3 years
2.Media agencies suffer as recession bites
3.Hiring freeze thawing as agencies hunt for talent
4.Aegis promotes Buhlman to Group CEO
5.MediaSense announces client management deal