Credit crisis and the graphic industry

Digitalisation of information is affecting the graphic industry for the last couple of years. And the credit crisis is amplifying the effects of consumers turning more often to the Internet than the printed word. As we're now feeling the impact of the credit crisis on our personal life, we're more often asked how this could happen. I came across a beautifully made video that explains the origins of the increasing rate of unemployment, the problems with Fortis, GM, RBS ..., the plunge of the ad spend and the worries of the graphic industry.


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

"TV advertising cheaper than at any point in 20 years"

This is a quote from Screen Digest, a media analysts company covering global media developments. Their perspective of television advertising expenditures is negative: although TV audiences are still growing, revenues are falling because demand is flat. ITV in the UK and TF1 in France are projecting a 3% drop in revenues for this year, and also Spanish broadcasters Telecinco and Antena3 show a sharp decline. Screen Digest is expecting this month to show the strong effects of the recession.
With all the research available on the lack of attention to television advertising, it is still striking to notice that marketers continue to invest in a medium that has lost its original impact.

Advertising and media represent 52,9 % of agency revenues

Advertising Age reports that in 2007 the advertising and media agencies in the US reported a 8,6 percent increase in revenues. Of all activities digital services showed the biggest increase: 26,8 percent compared to 2006. Digital services are changing the agency revenue streams quite dramatically: today its revenue represent almost as much as direct marketing and more than public relations, healthcare or promotional revenues. Advertising spending on digital media explains the growth of media agencies. Group M (WPP), the world largest media group, increased its worldwide digital revenues with 53%.

Paper, pixels and profits

I'm working on a major project that analyses the relationship between (off-line) print media and online media and came across the Deloitte Media Predictions 2007 brochure. Finally a point-of-view that is not over-estimating the hype of what is happening online, but presenting a more realistic and down-to-earth view of position and development of both media. It is clear that online will not substitute newspapers or magazines. Paper and pixels will coexist -and as Betsy Frank of Time Inc mentions- print will be the new new media. The real innovations take place in the print world. New formats, free newspapers, changed editorial approach, product development and integration of online are some of the domains of innovation. Online publishers are also discovering the value of the printed word. Some of them published the web content in books and boost their revenues in such a way. Print publishers should be more aware of the strengths of the printed word: practical, portable, foldable, inexpensive and lightweight. With 439 million people buying a newspaper everyday print is a real mass medium.

Print successful online

I have been writing a couple of times about the revised business model of the print industry, now there is strong evidence that print is successful in this change. Print demonstrates to be a strong provider of local news not only in print but also online. Online video is booming as a local advertising medium and the print news providers are taking a major share of this category. Of the US local online video market the print brands take a two-and-half times higher share than the television news providers.

Online expenditures drive forecast 2006/07

Carat - the media services group - announced last week that global ad expenditure will grow 6 percent this year, which comes from 5,7% forecasted in June this year. Online media are increasing in all regions, in the USA with 20 percent. Some markets demonstrate interesting developments. In Spain new formats in radio, TV, new digital entrants and the free newspaper titles boost growth. The UK shows a very different change, TV ad revenue will decline with 7% in 2006, Internet expenditures will grow with 40% and will represent a larger share than magazines this year. Internet share represents 5,2% of global ad expenditures in 2006, up from 4,3% in 2005.

Business media advertising revenue steady

The American Business Media recent figures on ad pages and revenues over the period September 2005-2006 shows a slight increase of 1,11% and 0,9% respectively. Business media are often seen as vulnerable to online magazines. The stable performance over 2005-2006 indicates the strength of the printed channel for readers and advertisers.

Magazines stick

Research among 30 Fortune Top 200 companies has indicated that 47% of their advertising campaigns didn't work. Which is estimated at $112 billion wasted per year in the USA. Most of these campaigns lack in media optimization, on average campaigns could increase their effectiveness with 35%. Magazines are found to be a consistently successful part of the media mix.