Magazine Advertising in a Recession

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Magazine Advertising in a Recession
A summary of commercial behaviour in an economic
downturn and brand and media recommendations for
2009
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Why do advertisers cut back?
Because its easy and its quick
Lower than expected sales lead to lower
profitability Reduced capacity means less volume
to trade Competitors reduce spend so Share of
Voice is maintained with less Direct costs of
unit production increase
Marketing spend is unspent, uncommitted and
vulnerable
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Market Dynamics at q1 2008
House prices and share portfolios continue decade
of increases Easy credit and joint incomes
have created a marketplace of discretional
spending - dining out, premium food ranges,
fashion upgrades, multiple short breaks,
technology, telephony
Relatively inexpensive household essentials have
been and over supplied. Multiple ownership of
brown and white goods, cars, and holidays
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Market Conditions at q1 2009
Discretional spending cut back Renewal of
essentials delayed Employment decreasing
Value of assets reduced
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Market Conditions at q1 2009
Need for brands to remain strong and front of
mind to secure revenue from smaller pool
Price Waterhouse Coopers
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We believe cutting back marketing spend is not
the answer
79 believe marketing is no longer dispensable.
It is key part of the business plan
Marketing is seen as more of a solution to help
than a budget line to cut
Strategy first We set our advertising strategy
to take advantage of opportunities in the
downturn, then try to come up with a budget to
achieve the strategy
61
27
Budget first We reduce our budget, then come up
with a strategy to do the most we can with that
budget
12
Dont know
Advertising on the Edge. Economist Intelligence
Unit Survey
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The importance of not cutting back
Because there are proven negative impacts on
brand position and profitability if marketing
expenditure is reduced during a downturn
Barwise,IPA,PIMS,Data2Decisions
Its a short-term fix Brands that cut back
emerge from the downturn weaker and less
profitable Long term profitability means
maintaining Share of Voice above Share of Market
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The importance of holding a long-term view
The benefits of advertising materialise in the
longer term 50 achieved in year one with the
remaining 50 in years 2 to 4 The impact of
advertising cuts may not be realised immediately.
This may be misleading and harm the business in
the long term
Date2Decisions.ROI defined as the incremental
revenue generated from advertising per unit of
spend
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The importance of not going dark
60 of brands which go dark decline on at least
one key brand metric
Two key brand relationship metrics Usage and
Image suffer when brands go dark for six
months or more (See chart opposite) There is
also a danger that by falling silent a brands
buzz score will decline, with the brand more
likely to be judged on-the-way-down
increase 11 22
decrease (24) (28)
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The importance of bonding
There is a strong link between market share and
brand-to-consumer bonding, an aggregate of
brand-consumer metrics Less investment in
marketing communications leads to lower bonding
and lower market share Millward Brown
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The importance of maintaining share of voice
Brands which cut their budget, relative to their
competitors, have a higher chance of losing
market share
When share of voice minus share of market is
negative, a much higher percentage of brands lose
market share
IPA DataMine
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Because share of voice drives growth
Analysis of 880 case studies shows a correlation
between share of voice and share of market gain
or loss
As a rule of thumb, for every 10 points that
share of voice exceeds share of market a brand
can expect to gain one point of market share,
per annum
IPA DataMine
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Evidence of brand value to advertisers
Cokes market Cap including brand value 120
billion
Cokes market Cap not including brand value 50
billion
The Brand Gap
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The old dynamic
Brand Ret ailer Consumer
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The new paradigm
Brand Retailer Consumer
Direct supply, online shopping, alternative
outlets, alternative products, consumer
product review forums, e-bay
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Brand strategies for 2009
Re-examine the role of advertising for your brand
Promote reasons for consumers to enter the
market, before conveying your own brand
attributes and benefits. Champion the category
and be frontrunner in recovery
Re-ignite consumer satisfaction with the brand
Challenge consumer perceptions and behaviour
toward the brand Use insight to identify and
promote the simple, but forgotten, pleasures
associated with your brand Focus on the
personal connection through message and placement
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Brand strategies for 2009
Reframe brand value Convince consumers that a
change of brand behaviour is not a compromise on
quality Find your brands compelling central
truth and convey it. But consumers will shy away
from brands which over claim
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Communications Planning in 2009
Because despite the headlines its not all about
well, not in the long term
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Because value to consumers is not based on price
alone
Bought goods



other
6
NOT price related 65
on strength of brand 59
Brand important 84
compromise of brand/price
Price related 35
on price alone
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Millward Brown, Brandz UK 2007
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Communications Planning in 2009
Select media which enhance the communication
themes of your brand and select an attentive
and effective medium which delivers a breadth of
proven ROI deliverables in sufficient size to
provide the scale and economies for big brand
media planning
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Communications Planning in 2009
Does this support the brand?
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Communications Planning in 2009
This does
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Communications Planning in 2009
Boosting search is key to our brands
success Magazines lead in getting consumers
searching
Which mediums influence you to start an online
search?
MPA
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Communications Planning in 2009
I need more consumers to buy from my
website Magazines excel at producing the traffic
which converts to sales
made purchase after conducting online search
Offline sources which drive qualified traffic to
websites
MPA
25
Communications Planning in 2009
I want buzz around my brands Magazines and web
are key in reaching connectors
Magazines work well with web in reaching social
networkers Index based on Facebook MySpace users
MPA
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Communications Planning in 2009
I want to reach positive communicators Magazines
and web are key in getting to opinion formers
Influentials use magazines and web the most
Number of times medium ranked 1 among
influentials across 60 categories
MPA
27
Communications Planning in 2009
I have to improve opinions about my brand
Magazines have a superior record in boosting
brand favourability
Brand Favourability Difference in exposed versus
non-exposed consumers
MPA
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Communications Planning in 2009
I want get my brand mentioned Magazines and
web are key in getting consumers talking
Magazines are strongest influence on personal
recommendations Percent saying magazines
contributed to personal recommendations
MPA
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Communications Planning in 2009
Driving purchase intent is critical for our
success in 2009 Magazines rank 1 in lifting
purchase intent
Media Impact on Purchase Intent Difference in
exposed versus non-exposed consumers
Cost per impact of Purchase Intent Indexed to TV
2.61
1.77
1.23
MPA
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Communications Planning in 2009
Most things we ever buy, we buy regularly. Every
week 22 million shoppers are in-market for fmcg
products and in a mind-set to listen to
advertisers in those categories. Small nudges
replace big shouts Using NRS Readership
Accumulation to plan weekly print ratings
magazine advertisers can meet them there
Needs fulfilled (out of the market)
Have
Week by week
Have not
Purchasing mode (in-market)
NRS.IPC
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Advertising in 2009
For more information and usable charts please
contact james_papworth_at_ipcmedia.com 020 3148
3639