Ebiquity Regulatory News (EBQ)

22 May 2006 09:12

Thomson Intermedia PLC22 May 2006 Thomson Intermedia UK advertising expenditure grows 3.6% in first quarter 2006, driven by digitaland direct media The first comprehensive figures for media spend this year are published today inThomson Intermedia's and KPMG's quarterly bulletin. The information encompassesall media spend and is the first to report press advertising at cost, based ondiscounts offered in each press segment. The key findings are: • Total advertising spend was up 3.4% in Q1 2006 compared to Q1 2005, a relatively healthy trend considering Easter fell in Q1 last yr and Q2 this year. • Overall growth was driven entirely by digital and direct media up 22% over Q1 last year - further eroding the dominance of traditional mass media. Taken together they now account for a quarter of all advertising media spend compared to a fifth just one year ago. • Evidence is building that digital and direct media continue to thrive and are underpinning the growth of the advertising industry. The barometer recorded a year on year drop in traditional media spend for the first time since 2002 when comprehensive coverage began. • Traditional mass media spend in Q1 declined 2% year on year. Spend on TV advertising fell 2.6% to just under £1 billion in the first quarter of this year as Travel, Toiletries/Cosmetics and Entertainment, Media & Leisure advertisers shifted TV budgets to online. • Strong competition among the Insurance and Cards categories in financial services pushed overall Finance sector TV spend up 24% partly countering the drops in Travel and Toiletries/Cosmetics TV spend. • Press advertising grew just 1% to £613 million thanks entirely to growth in Business, Consumer and Regional press, which offset losses in Daily and Sunday newspaper display revenues. Cinema experienced the greatest fall in spend of nearly 17%. • Consumer goods advertisers increased their online display advertising spend fastest although overall investment remains relatively low. • Continued rise of letterbox activity, where spend increased by a fifth over Q1 2005. Door drop activity is still growing faster than direct mail with all major spending sectors in this area showing investment growth. Although finance marketers actually decreased spend on Direct Mail, retail and entertainment continued to increase spend on targeted mailings. • Online display advertising reversed the apparent decline from the last quarter with 16% growth since then. Sarah Jane Thomson, CEO of Thomson Intermedia, commented: "A modest increase in overall advertising expenditure hides a number ofinteresting changes in patterns of spend. In traditional media TV's performanceincludes a stark shift between two sectors - travel fell 18% but finance rose bya surprising 24%. In absolute terms these shifts of tens of millions of poundsshow advertisers and their agencies respond quickly to achieve the best returnfor their clients. "Although not necessarily indicative of full year trends, patterns in mediainvestment for Q1 2006 suggest a number of structural changes. Entertainment isbecoming the pre-eminent category investing in online media, with financialservices and technology sectors following closely. Secondary media such asradio, cinema and outdoor remain vulnerable to belt-tightening within categoriessuch as FMCG and motors and an ever increasing focus on accountability. Therising spend of retailers contrasts with reduced spend among food manufacturerswith implications for all media owners. "Looking ahead to Q2, we expect technology advertisers to remain strong acrossall media and a stronger showing in motors and entertainment categories. Butanyone expecting a World Cup boom is likely to be disappointed." Richard Bawden, Head of Media at KPMG commented "As each quarter passes the data from Thomson Intermedia provides furtherinsight into the structural shifts in advertising expenditure. It alsohighlights the need of advertisers and media owners alike for greater visibilityof where marketing expenditure is going and its effectiveness. As 2006progresses it will be interesting to see if the first year on year decline intraditional media is a one-off or a trend. "The ability to trial, test and refine the opportunities offered by digital andresponse media is clearly winning followers among advertisers, who appearincreasingly willing to swap budgets out of established media to improve theefficacy of their marketing spend." 22 May 2006 Enquiries: Paul Ryan Richard BawdenHead of Insight Partner - Head of MediaThomson Intermedia Plc KPMG LLPT: 020 8466 2906 T: 020 7311 3350pryan@thomson-intermedia.com richard.bawden@kpmg.co.uk www.thomson-intermedia.com www.kpmg.co.uk About Thomson Intermedia group Thomson Intermedia Plc is the largest independent media business in the UKemploying more than 200 staff including 65 media specialists. We provideadvertising creative capture and media expenditure evaluation services acrossall media to over 350 UK advertisers. billetts, a Thomson Intermedia company, isthe UK's leading media auditor offering consultancy services to 150 UKadvertisers. The group works for over 70 of the UK top 100 advertisingcompanies. Thomson and billets combine to offer unrivalled expertise andexperience advising to major advertisers on communications strategy. About KPMG: KPMG is the global network of professional services firms who provide audit, taxand advisory services. KPMG LLP operates from 22 offices across the UK with over9,000 partners and staff. KPMG recorded a UK turnover of £1.28 billion in theyear ended September 2005. KPMG LLP, a UK limited liability partnership, is theUK member firm of KPMG International, a Swiss cooperative. Rise or Fall in Q1 Media Spend by sector - Q1 2005 compared to Q1 2005 TOTAL TV Press Direct Door Outdoor Radio Internet Cinema Mail Drops Finance + + + - + - - - -Retail + - - + + - - + +Automotive + - + + + - - + -Entertainment, Media & Leisure + - + + + + - + +FMCG - - - - + - - + -IT/Communications + - + + + + - - +Travel - - + + + + - + -Toiletries/Cosmetics - - + - + - - + -Government & Utilities - - + - - - - + +Pharmaceutical - + - + + - - + -Education & Charities + - + + + + - + +Electrical & Household + + - + + - - + -Other + + + + + + - + -TOTAL (All) + - + + + - - + - Rise or Fall in Q1 Media Spend by sector - Q1 2006 compared to Q4 2005 TOTAL TV Press Direct Door Drops Outdoor Radio Internet Cinema Mail Finance + + + + + + + + -Retail - - - + - - - - -Automotive + + + + + + + - -Entertainment, Media & - - - + - - - + -LeisureFMCG - + - - + - + - -IT/Communications - - - + - - + + -Travel + + + + + + + + +Toiletries/Cosmetics - - - - + - - - -Government & Utilities + + + + - + + + -Pharmaceutical - - - + + - + + -Education & Charities + + + - + - + + -Electrical & Household - - - + + - - - -Other - + - + + + - + -TOTAL (All) - - - + + - + + - Spend Methodology Press We scan 30,000 newspaper pages every day. Our input team works through thenight to ensure everything is on your desktop by 8am. We are currently addinganother 1,000 regional titles and editions. No one else is able to provide suchcomprehensive data. • We scan all National Daily and Sunday newspapers, plus the major Regionals (with the 1,000 additional titles coming soon), and the major Business & Consumer magazines. Additional titles can be added to cater for specific client requirements. • Spend is assigned from publishers' rate cards then adjusted by a weighted average colour/mono discount for titles in each press sector based on billetts' observations. TV We are a BARB bureau, receiving the complete database of audience viewingdetails and spots. Applying our in-depth media knowledge to this data, wecalculate expenditure on a spot-by-spot basis. We differentiate multi-channeland direct response advertising in our cost calculations. Following a majoroverhaul of our spend allocation process in 2005, a number of advertisers andagencies have determined our system to be the most accurate on the market. • We use proprietary technology to capture all TV creatives on all the terrestrial channels, and the major cable and satellite stations • New creatives are available on our website within two hours of airing, and repeats are uploaded to the site in as little as 10 minutes • Spend data is available on the site eight days in arrears. Direct Mail & Door Drops 6,000 people on our ABC-audited and nationally representative panel send us alltheir direct mail every month. We scan and record every piece, including doordrops, statement and bill inserts. • Our panel is selected from the GfK Hometrack programme, which has a 25-year history • We allocate spend by estimating a unit price for each item, and multiplying it by our calculation of the number of people receiving it Radio We receive data feeds from JET, the industry's online agency booking system.This means our data is accurate and coverage is growing all the time. Ourestimates of rates are updated in close consultation with industry experts.Audience information is taken from RAJAR. • We use proprietary technology to capture the creatives on national and regional radio channels • These creatives are available on our site within 48 hours of airing, and often within 20 minutes. Repeat spots are on the site in as little as 10 minutes • Spend data is available by the middle of the next month Internet Thomson Intermedia is the clear market leader when it comes to internet creativepickup. We capture all shockwave and flash banners, eye-blasters,interstitials, superstitials, pop-ups, pop-unders, banners, buttons, sponsoredlinks and search engines' content-sensitive ads. We derive detailed pageimpression estimates from a panel of 15,000 UK-based internet users to arrive atour page impression and expenditure estimates. • Our proprietary "spiders" crawl over the 350 top websites up to 200 times each per day • Spend data is updated daily with input from our industry expert panel Outdoor • We obtain creatives from media owners such as Viacom, and from our in-house capture team • We receive spend data from the Outdoor Advertisers' Association (OAA) Cinema • We obtain both creatives and spend from the industry's two sales houses • Creatives and spend are available on our system by the 20th of the month following exhibition This information is provided by RNS The company news service from the London Stock Exchange