Market Meter: Special edition: Outlook 2004

To mark the advent of a new year, this issue's meter looks at activity for the next 12 months. In 2004, newspapers and conventional broadcasters can expect some battles from agencies and clients over what many consider to be outlandish rate hikes.

To mark the advent of a new year, this issue’s meter looks at activity for the next 12 months. In 2004, newspapers and conventional broadcasters can expect some battles from agencies and clients over what many consider to be outlandish rate hikes.

Specialty TV really came into its own in 2003 and is now considered part of the upfront buy rather than an afterthought. Expect more migration to specialties in 2004, as advertisers cut back on conventional, and look toward media willing to work with them.

Radio and out-of-home should also benefit from advertiser desire to find new ways to reach time-strapped consumers and do so efficiently and effectively.

Conventional broadcast TV

4 out of 5

The year ahead is not expected to be as bullish for conventional broadcasters as 2003. Client budgets are staying the same or growing marginally and buyers are fed up with broadcasters raising rates when audiences aren’t keeping pace.

Helena Shelton, VP broadcast operations for MBS/The Media Company, expects advertisers to hold back more than usual in 2004 in an effort to see how the schedules shape up before plunging in.

The 2003 fall season was a big disappointment to agencies. Although every year buyers expect about half of all the new shows to fail, Global had a larger number of cancellations than usual.

It all boils down to programming, says Shelton, ‘CTV has done very well. They’ve got the programming. They’re having a gangbuster year – and their audience estimates are accurate – and CanWest Global isn’t.’

Jack Tomik, SVP of CanWest Media Sales, says cancellations for CanWest for the 2003 season really weren’t much different than in previous years. He says because buyers are dealing with one sales organization, it’s easy to forget that it essentially sells two complete program schedules – the Global network and the CH stations in Hamilton, Vancouver Island, and Montreal.

And because both schedules were wrought with new shows, Tomik says it makes sense that there would be more show cancellations for CanWest.

Moving into 2004, Florence Ng, VP of broadcast at ZenithOptimedia, says she is seeing a little more flexibility in negotiations with stations. But to get consistency of audience delivery, she says, buyers are sticking to the tried-and-true existing shows and basing buys on their own audience estimates, not the stations’ estimates.

Specialty TV

4 out of 5

Specialty viewing is building as conventional declines. Specialty’s share of advertising budgets will continue to follow suit in 2004.

While rising conventional rates and static budgets are driving advertisers to specialty, viewers are drawn to the channels focusing on their special interests.

Carol Cummings, senior TV buyer at Montreal-based Media Experts, says advertisers need to find alternate media vehicles because the cost of conventional is proving to be prohibitive, however, advertisers are still anxious about abandoning the mass reach of conventional TV. She expects some day to make a specialty-only buy and get exceptional results.

Digital TV

1 out of 5

Digitals still haven’t got the audience numbers that draw advertisers, but those looking for alternatives to costly conventional might take another look.

ZenithOptimedia’s Ng says it’s still going take a while before bigger audiences start tuning to digital, but points out that when buyers started moving into specialties the audiences were also quite low.

Radio

3.5 out of 5

Buyers expect to see increased radio usage in 2004, in keeping with an overall market trend toward efficiency and flexibility.

Steve Aronovitch, broadcast investment manager at Starcom Worldwide, says radio will continue to be led by retail advertisers and the hot periods will revolve around retailer seasonality. January and February will be a little quieter, but activity will pick up in March for spring break and stay brisk up to the end of June. Early summer is notably when beverage marketers – both alcoholic and non – hit the air.

Back-to-school will be strong in 2004, then comes the holiday season.

Aronovitch expects that some of the trends that started in 2003 will carry over into 2004, including clients targeting by daypart, particularly breakfast and mid-day drive time. Advertisers targeting younger audiences have also been using the medium to drive product.

Media directors say the JACK, BOB and DAVE formats are the ones that will continue to gain market share.

Newspaper

3 out of 5

Newspapers are increasing rates by 5% to 12% for 2004. The Toronto Star is asking for 8% more and the Globe and Mail’s rates are going up at least 5%. Despite the rise in newsprint and labour costs, agencies and clients are generally peeved.

Ed Weiss, VP associate media director at Echo Advertising in Toronto, says the rate hikes aren’t justified. ‘In an economy that’s growing at 1% or 2%, it doesn’t make any sense. There are going to be a lot of battles fought on the newspaper front. They’d better be very careful, because their whole industry is hurting and if they’re going to keep increasing rates, they’re going to price themselves out of the market.’

However, the Globe and Mail’s VP of marketing, Sandy Muir, says for the first quarter of 2004, he is seeing an improvement in ad spending compared to the same period in the previous few years.

He says flat circulation and readership numbers are a result of better circ management that sees the slashing of free and bulk circulation papers that punctuated the newspaper wars following the National Post launch.

Magazine

4 out of 5

More magazine pages were placed in 2003 than in 2002, and Julie Myers of ZenithOptimedia expects ad pages to increase another 10% in 2004. That’s because sellers are really pushing their products and are much more willing to explore different ideas in a creative sense. This has meant, for example, increased use of full-page with adjacent 1/3-page ads and advertorial opportunities. Myers warns, however, that advertorials could become overused and readers will become immune to them.

The high interest in magazines is going to continue in 2004, says Myers, particularly when it comes to targeting working women for whom TV might be a staple, but the hours tuned are lighter.

Out-of-Home

4 out of 5

The outdoor marketplace was extremely active in 2003, right through December, illustrating the increased usage of the medium and its effectiveness. Financial services companies, radio stations and packaged goods were very visible O-O-H advertisers.

Kin Shand, a media supervisor at Echo Advertising, says we can expect outdoor to remain a viable media option for various advertisers as other media costs continue to increase. ‘We anticipate seeing greater innovation with the medium, that is, intrusive and noticeable campaigns, mirroring campaigns such as Mini’s cars in cages.’