Ebiquity Regulatory News (EBQ)

6 Feb 2006 09:07

Thomson Intermedia PLC06 February 2006 Thomson Intermedia Plc and KPMG UK advertising expenditure rises 5.4% in 2005 6 February 2006 The first available figures for media spend for the whole of 2005 are publishedtoday by Thomson Intermedia and KPMG. The information is released a month afterthe year end and encompasses almost all media spend. The key findings are: • Advertising spend was up 5.4% in 2005 compared to 2004. • Spend in December 2005 was 5% higher than in December 2004,contradicting fears that spend had crashed during the run-up to Christmas. • Spend changes varied significantly between individual media: TVadvertising was up 4% at £4.2bn; national press ads were steady at £1.8bn*;outdoor was up 2% at £754m, and cinema was down 4% at £139m. Direct mail fellfor the second year, following many years of rapid growth, but seems to havebeen offset to some extent by a rise in door drop activity. • The biggest movements were in the hardest media to measure, especiallythe internet, where search advertising reportedly increased significantly, butdisplay advertising appears to have declined in the last quarter. Sarah Jane Thomson, CEO of Thomson Intermedia, commented: "The slight improvement in UK advertising expenditure in 2005 compared with 2004represents a significant achievement given the decline in consumer spending onthe High Street; fears that ad budgets were slashed in the run-up to Christmasappear to have been overdone." "The data shows that it is premature to announce the long-term decline of thetraditional mass media such as TV and press. They remain the predominant mediafor many campaigns, although the fragmentation of audiences and the rise of newmedia will present increasing challenges to advertisers and their advisers." "Arguably the biggest media story of the year is the continued rapid growth ofthe internet as an advertising medium. The internet is a famously accountablemedium, in that advertisers can see quickly and precisely the impact of theirspend. However, it is also an opaque medium: the growth is in search-based ads,which the advertising industry cannot monitor, whilst internet display adrevenues actually seem to have fallen at the end of 2005. In the longer term weare very conscious that as this medium continues its explosive growth, there isa lack of marketing spend transparency." Michael Higgins, KPMG partner, commented: "The annual and quarterly monitoring of advertising expenditure continues tothrow up notable trends and patterns. After many years of strong increases,spend on direct mail has gone into reverse. On the other hand, the financialservices and retail industries both seem to have made significant switches fromdirect mail to door drops." "We see three main causes for the decline in direct mail - the rise of e-mailmarketing, better targeting of direct mail, and consolidation among marketers,especially in financial services. Focussed door drops present an inexpensivealternative to yesterday's direct mail campaign: advertisers may not know thename of the recipient, but they can tell from where they live that they fit thetarget demographic." "The emphasis on different media by different industry groups is interesting,with IT and communications taken together with the entertainment, media andleisure sectors accounting for almost half of on-line display spend. Travel,retail and fmcg all saw increases in expenditure over the year, while thefinance sector saw the biggest fall." "The quarter by quarter analysis also produces noteworthy results, for instancethe fact that the year-on-year decline in direct mail was reversed in the lastquarter of 2005." "With a stable to slightly positive outcome in 2005, the outlook for advertisingexpenditure in 2006 is difficult to call. However we do expect to seeincreasingly sophisticated use of research to enable advertisers to switch inand out of the smaller media to gain advantage." * Note to editors: this is an estimated figure, based on an assumed discount toratecard prices. Enquiries: Calum Chace Bernice MarksCommercial Director Press officerThomson Intermedia Plc KPMG T: 07880 788913 T: 0115 935 3542 / 07789 925294calum@thomson-intermedia.com bernice.marks@kpmg.co.uk www.thomson-intermedia.com www.kpmg.co.uk Spend methodology: Press - all display advertising in national and major regional newspapers, keyconsumer and business magazines monitored valued at rate card; TV - commercialspot advertising for terrestrial and multi-channel broadcasters on a cost perthousand basis derived from network revenues and BARB data; Direct Mail and DoorDrops - ABC audited nationally representative panel of 6,000 individuals basedon Royal Mail rates; Outdoor - placement details supplied by outdoor mediaspecialists and contractors, rates supplied by OAA; Radio - national and majorlocal radio advertising logs and RAJAR audience data comprise a cost perthousand basis for estimation of expenditure. Internet - proprietary web-spidertechnology collects occurrence and creative data from over 300 websites,industry sourced impressions and CPT figures are used to estimate value ofonline display advertising only. Cinema - industry sourced revenues and campaignestimates. Rise or fall in media spend by sector - 2005 compared to 2004 Total TV Direct Door Outdoor Internet Press Radio Cinema (All) Mail DropsAutomotive + - - + - + + + -Education & Charities + + + + - + + + +Electrical & Household - - - + - + - + +Entertainment & Media & + + - + - + + + +LeisureFinance - + - + - - - + -FMCG + + - + - + + + +Government & Utilities + + - + + + + + -IT/Communications + + + + - - - - +Other + + + + + - + - +Pharmaceutical + + - + - + - + -Retail + + - + + - + + +Toiletries/Cosmetics + + + + - + + + -Travel + + - + - + + + -TOTAL + + - + + - + + - Rise or fall in media spend by sector - Q4 2005 compared to Q4 2004 Total TV Press Direct Door Outdoor Internet Radio Cinema (All) Mail DropsAutomotive + + - + + + + + -Education & Charities + - + + + + - - +Electrical & Household - - - + + + + - +Entertainment & Media & + + + - + - + + +LeisureFinance - - - - + + - + -FMCG + - + - + - + + -Government & Utilities + + + - + + + + +IT/Communications + + - + + - - - +Other + + + + + + - + +Pharmaceutical - + - - + - + + -Retail + + - + + + - - +Toiletries/ Cosmetics + + + + - - + + -Travel + + + + + - - - -TOTAL + + + + + - - - - Share of media spend by sector 2005 Total Total TV Press Direct Door Outdoor Internet Radio Cinema 2004 2005 Mail DropsAutomotive 12% 11% 7% 19% 2% 2% 7% 4% 15% 17%Education & Charities 2% 2% 1% 1% 10% 5% 1% 1% 2% 1%Electrical & Household 2% 2% 2% 3% 1% 2% 1% 1% 1% 3%Entertainment & Media & 11% 11% 14% 8% 6% 10% 17% 26% 15% 9%LeisureFinance 17% 15% 12% 11% 47% 28% 6% 19% 7% 1%FMCG 10% 11% 21% 6% 1% 0% 17% 0% 10% 29%Government & Utilities 3% 3% 3% 2% 2% 3% 6% 2% 11% 5%IT/Communications 9% 9% 8% 8% 5% 8% 12% 20% 12% 18%Other 1% 2% 1% 1% 0% 0% 13% 1% 1% 0%Pharmaceutical 3% 3% 5% 2% 1% 2% 1% 1% 4% 1%Retail 18% 19% 15% 20% 20% 37% 8% 13% 14% 4%Toiletries/ Cosmetics 7% 7% 9% 9% 1% 0% 6% 1% 3% 8%Travel 6% 6% 3% 10% 4% 3% 5% 9% 5% 2%TOTAL 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% (c) Copyright Thomson Intermedia 2006 This information is provided by RNS The company news service from the London Stock Exchange