CANADIAN BROADCAST SALES CANADA’S NATIONAL RADIO SALES COMPANY WINTER 2009
Deloitte TMT Predictions “ As Canada and the world emerge from this recession, the TMT industry will be transformed. It will be more profitable, more flexible and even more responsive to customer needs.”
Duncan Stewart, Director of Deloitte Canada Research
D
eloitte’s global TMT (Technology, Media & Telecommunications) Predictions for 2009 showcase emerging trends that may significantly impact business. For each of the three sectors 10 predictions are documented in the report. Released January 20th, the study is based on research and input from 6,000+ Deloitte member firm practitioners specializing in TMT, Deloitte clients and alumni, industry analysts and leading global TMT executives. The 12 most noteworthy TMT trends that will affect business in Canada include four from each sector. Two of the four from the Media segment are worth mentioning here. 1. “Putting print out of peril may require stopping the presses.” Print has been challenged losing readers and advertisers to online, creating even more distress for the newspaper & magazine industries during the current global economic crisis. Deloitte predicts 1 in 10 will go out of business in 2009. 2. “The dawn of WiFi radio: 10,000 radio stations in your pocket.” Internet radio sets will prevail. Portable, WiFi radios are already available for under $100 but price points are expected to decline even further in 2009. The devices will offer consumers choice, ease of use, familiarity and ‘locationaware’ technology. “Imagine a Vancouverite in Toronto on business — able to listen to CFOX and get Vancouver news, but with Toronto ads.”
“In 2009, Internet radio may not just reinvigorate the medium of radio. It may reinvent it.” Please visit
www.tmtpredictions.ca for the full reports. Source: News Blaze, January 2009; Deloitte
O
hio-based BIGresearch has some pretty big recommendations for Detroit’s three largest automotive manufacturers – General Motors, Ford & Chrysler. According to a recent analysis of the company’s SIMM (Simultaneous Media Usage) database in conjunction with newly developed software from Prosper Technologies, the ‘Big 3’ should give considerable thought to re-allocating their media dollars. The study shows significant discrepancies between what consumers say is the most influential media when it comes to purchasing a car, and which media is actually favoured by the automakers. In this case television is heavily supported but according to BIGresearch, radio should be awarded the largest share of their ad budget. Take General Motors for example; they delegate 3.5% of their advertising budget to radio — a far cry from the 21.5% suggested by the research. More attention should also be given to outdoor.
Automotive Ad Spend vs. Prosper Media Allocation Model (% of Total U.S. Advertising Spend in 2007) General Motors Magazines Newspaper Outdoor Television Radio Internet Other
12.4% 5.0% 1.5% 39.1% 3.5% 7.0% 31.5%
Ford
Chrysler
11.9% 5.2% 0.7% 38.9% 2.3% 6.5% 34.5%
10.5% 6.9% 0.5% 43.2% 1.9% 3.0% 34.0%
Prosper Allocation Model 15.6% 6.2% 14.6% 17.3% 21.5% 8.5% 16.3%
Source: Ad Age Domestic Ad Spending by Category (2007)/Measured media from TNS Media Intelligence’s Strategy, Prosper Media Allocation Model Allocation Model: Media influence weighted by consumption and media cost for people planning to buy/lease a car/truck in the ensuing 6 months
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Of course some will dispute If radio be very powerful. Radio is costthe notion of spending less in efficient and has the advantage of television and more in other reaches 90% of recency, immediacy and driving areas including radio. Chris the people in a website traffic. The latter strength Rohrs, president of the Television very valuable given consumer week, why does isonline Bureau of Advertising, claims research of big ticket items foreign automakers also choose it only get 7% (especially automobiles) prior to television as their number of ad dollars? visiting the retailer (dealer) has one advertising vehicle. Car become an important step in the Gary Drenik, managing purchasing process. manufacturers (excluding director, BIGresearch. the Big 3) attribute In Canada, share of total ad spend more than 50% of their ad versus share of daily time spent with media for budgets to television and radio has long been disproportionate. Adults less than 2% to radio. 18+ spend one third of their media time But is this effective? listening to radio, but the medium accounts Not according for only 10% of total advertising expenditures. to the analysis Television in this country receives a much by BIGresearch. more acceptable portion of the ad pie relative The argument to time spent (daily share of media = 34%; for television as a share of total advertising = 23%). reach medium with For more information please visit visual capabilities is valid, but radio is and look for the article “Rethinking also a reach medium Radio’s Power in Automotive” listed and radio’s ability to under the R Files from your generate visual imagery can homepage.
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www.radiocbs.com
Source: Advertising Age, December 2008; RMB Foundation Research 2008
Best Sellers in 2008 L
ast year it was Celine Dion, this year AC/DC tops the music charts as the number one selling artist in Canada. AC/DC of course had the number one selling album, Black Ice, which was released worldwide October 20th, 2008. Coldplay (Viva La Vida) and Metallica (Death Magnetic) follow with the number two and three positions for both artist and album sales. Combined the top 10 artists sold just over 3 million albums in 2008. Overall album sales for the year declined 8.5% from 44.4 million units in 2007 to 40.6 million units. Digital track sales continue to grow (albeit at a slower rate) with an increase of 58% from 25.8 million units in 2007 to 40.7 million units this past year. However, this was still not enough to offset the reduction in physical sales for the year. Digital album sales represented 10% of total album sales. Of the genres listed in the Nielsen report, Jazz experienced the largest decrease in album sales from 2007 to 2008 (-33%). Sales of Rap, Country and R&B albums also declined, by at least 20% for each genre. In comparison, Metal only lost 4% of sales from the previous year.
2008 Top 10 Selling Artists
Artist
# of Units Sold
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
AC/DC Coldplay Metallica Nickelback Jack Johnson Celine Dion Taylor Swift Guns N’Roses Madonna Il Divo
557,000 418,000 404,000 279,000 254,000 234,000 233,000 221,000 215,000 214,000
The list of top 10 selling digital artists (based on digital track sales) differs significantly. The top three are Rihanna, Britney Spears and Madonna. Other than Madonna only 2 others appear in both lists (Coldplay & Nickelback).
2008 Top 10 Artists – Radio Station Airplay
Artist
# of Detections
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Rihanna Hedley* Avril Lavigne* Bryan Adams* Nickelback* Paul Brandt* Finger Eleven* Alan Jackson Toby Keith Rascal Flatts
91,000 88,000 86,000 83,000 81,000 76,000 75,000 75,000 74,000 70,000
Apple
2008 Genre Album Sales Genre
# of Albums (000)
Alternative Classical Country Jazz Metal R&B Rap
6,670 1,340 2,687 936 4,338 3,014 1,601
On January 6th, 2009 Inc. announced that *DRMFree music would be available through iTunes. This is good news for consumers who previously were prohibited from playing tracks purchased through iTunes on any other manufactured portable music player or alternate device. As well, with DRMFree files there are no restrictions to the number of CD’s that can be burned. Apple also promises higher audio quality.
% Change -15% -14% -23% -33% -4% -22% -27%
Note: Titles may appear in more than one genre. The Nielsen Company 2008 Canadian Music Industry Report was provided by Nielsen SoundScan Canada and Nielsen BDS for the 52-week period December 31st, 2007 through December 28th, 2008.
It’s not all
doom and
gloom. “
According to traditional marketing theory, companies can gain market share in a recession by maintaining or even increasing their marketing spend and moving into the space vacated by frugal competitors.
”
It’s no news that we are in a recession and for many the word alone instills panic but for others it creates opportunity. Toronto-based Claymore Investments plans to spend more on advertising in 2009. President & CEO Som Seif says “we’re going to be pretty aggressive… cutting our overhead expenses as much as possible…so we can actually use [the savings] to spend in marketing.” He continues, “…if you’re only marketing when things are good you are going to lose customers.” Radio, it seems, is poised to weather the storm without too much turmoil. According to ZenithOptimedia’s projections, radio will see nominal growth in 2009 “but will be among the first to benefit from an economic recovery and will quickly return to growth mode.” The good news is that ad spend for radio is expected to increase yearover-year during the recessionary period. Newspaper received the worst diagnosis of the major media with negative growth expected during the next 2 years. Television did not fare much better but will receive a boost from the Winter Olympics and World Cup Soccer in 2010.
ZenithOptimedia Projected Canadian Ad Spend* Television
2009
2010
2011
$3.30 b $3.32 b $3.35 b (-0.3%) (+0.6%) (+0.9%)
Newspaper $2.42 b $2.36 b $2.36 b (-3.1%) (-2.2%) (0%) Radio Magazines
$1.57 b $1.63 b $1.72 b (+0.9%) (+0.2%) (+5.7%) $696 m $715 m $740 m (-1.5%) (+2.6%) (+3.5%)
Out-of-Home $455 m $474 m $504 m (+1.6%) (+4.0%) (+6.4%) Internet
$1.80 b $2.07 b $2.38 b (+20%) (+15%) (+15%)
Total
$10.2 b $2.07 b $2.38 b (+2.2%) (+3.2%) (+0.9%) *All figures in U.S. dollars
*DRM=digital rights management Source: eMarketer
Source: Marketing Magazine, January 2009; ZenithOptimedia
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