Whatâ€™s in store for Irish Media in 2013?
Introduction 2013 is set to be a very exciting year for media communications. Digital technology is continuing to shape how consumers access and consume brands. Whilst this presents advertisers and agencies alike with many challenges, it also opens the door to great opportunity.
Outlook projections for 2013 Medium
TV Print Radio Online Out of Home Cinema Total
€234 €269 €118 €108 €64 €7 €800
€218 €238 €106 €131 €55 €7 €755
€203 €199 €96 €152 €51 €7 €708
€209 €182 €94 €176 €49 €7 €717
Content creation and distribution has fundamentally transformed the media landscape. Media communications can no longer be thought of as linear. Consumers now more than ever, decide what, how, when and where they interact with brands. We are now faced with almost endless possibilities to engage, converse and share brand experiences with consumers. Connected devices and social media in particular have facilitated the changing shape of the media landscape, and that evolution will continue at great speed in to 2013. In the coming 12 months, we will see further atomization of audiences, categories, brands and media. Throughout this document, I hope we give you an insight in to the changing dynamic we are experiencing. Without giving too much away, I would like to touch on a few key points that are not just presenting great opportunity, but also great accountability for both agencies and advertisers. • While we now can legitimately talk about mobile being a medium of great importance in its own right, it has also dramatically altered how consumers interact will all other media. • TV programmes have transcended linear viewer engagement through the TV set /Laptop, to simultaneously capture a social audience who now willingly partake in the programme itself. • More consumers are now using Google’s search engine on their mobile as a result of seeing a TV ad rather than on their PC / Laptop. • Out-of-home is now no longer purely about giving great creative an on-street presence. QR codes and mobile websites now mean bus shelters can act as retail outlets, 48 sheets can oﬀer rich downloadable content, POS can oﬀer discounts for the store you are about to walk in to. • Press and radio are adapting too, as mobile oﬀers an opportunity to capture audiences that evaded them in times past. • Despite some negative press around IPO’s, privacy, cyber-bullying, key social platforms continue to go from strength to strength. Their reach and consumption time now completely outstrips that of traditional high reach websites and portals. Social will continue to dominate and brands that win in this space are those that have clear, deﬁnable strategies for each platform that work in harmony with each other. • Critically, technology is enabling media to deliver better, proven results. As a result digital media is becoming increasingly performance based; not only in how we buy, but what we can report. Performance doesn’t need to concern itself purely with cost per acquisitions or cost per leads, but with engagement, views, etc. Real Time Bidding and Attribution Modeling have led the way in that regard. Not only can we deliver more cost eﬃcient results, but we can with greater accuracy determine what element of the digital communications mix is working hardest. That’s great news for advertisers and agencies as we seek to maximize the return on investment. These areas are dealt with in greater detail throughout our 2013 outlook, but for me they are shaping the game for brands both now and in to the future. I am optimistic that 2013 will buck the trend of advertising spend decline seen over the last four years in the Irish Market. Albeit slow (and with a lot riding on the promissory note negotiations) we are in the midst of an economic recovery. Optimism is gradually returning; which is absolutely imperative to enable advertising and commercial activities grow and in doing so deliver business value for our clients. We, at Vizeum are committed to delivering strategies and solutions for our clients that ultimately help speed up the economic recovery by delivering exceptional results for them. With that in mind, I am forecasting media spend to show modest growth of +1% year-on-year. I hope you enjoy Vizeum’s 2013 outlook document. If you have any queries at all please don’t hesitate to contact me on 01-4211700 or firstname.lastname@example.org Wishing you all the best for the year ahead
Conor Murphy, Managing Director, Vizeum Ireland
2 The Outlook
Contents 02 Social
09 13 Television Radio 25 Cinema
17 Press 32 Technology
2 The Outlook
2012 was a big year for social media and the medium is expected to account for 5% of total digital spend when the ﬁnal Price Waterhouse Cooper ﬁgures are released in April 2013. The increased investment in the medium can be attributed ﬁrst of all to the growth in social audiences throughout the year and secondly to a realisation amongst agencies and advertisers alike that social media is now a core part of any digital strategy. The market leader, Facebook now reaches 1.8 million unique users on a monthly basis and shows no signs of slowing. However, it should be noted that time spent on Facebook showed slight decline in 2012, with the average user spending 29 mins on the platform in October, compared to 31 min in October 2011. Bear in mind however that the time spent on Facebook is still more than the time spent on both YouTube and Linkedin combined. It’s still the market leader by some way and should be the ﬁrst consideration when developing a social media strategy. 2012 was also notable for the growth experienced by some of the smaller social players in the market. Linkedin in particular has increased audiences substantially and now reaches 645,000 unique users monthly. In addition, we saw new players such as Pinterest rapidly gain traction. In terms of advertising, 2012 bought many new ad formats to the social platforms. Facebook launched “Oﬀers”, an advertising format designed to link the platform to business results and is already showing promising returns for Vizeum clients. Facebook also launched “custom audiences”, a highly eﬀective way to marry a brand’s existing customer list with Facebook’s audience to allow more discreet targeting. Twitter advertising also became a reality in 2012 and Vizeum became the ﬁrst agency to avail of the new social formats on Twitter for telecoms brand, meteor.
We expect social to continue to grow rapidly in 2013 from a media spend perspective. The Outlook 3
Mobile will be crucial to social success in 2013. With Facebook, YouTube and Twitter all having made strides in delivering compelling ad formats for mobile, and Smartphone penetration expected to hit 71% by the end of 2012, we can expect mobile to be a key growth driver in the social space. 2013 will also bring a closer collaboration between search and social. Traditional search listings are increasingly displaying search results from the leading social networks and these type of listings will become more prevalent in 2013, making SMO( social media optimisation) a sought after skill. As more and more social content is created by brands, search agencies will need to incorporate optimisation of these social objects into overall SEO strategy. Social agencies in turn, will need to be aware of the ability of SEO and natural rankings on search engines to drive social conversations.
4 The Outlook
Mobile will be crucial to social success in 2013. We can expect mobile to be a key growth driver in the social space.
We expect media investment in social to continue to grow rapidly in 2013. But we’re also going to see more ﬁnancial investment in social media management and content generation, as more and more brands embrace social for building customer relationships. Our ability to measure the real eﬀect of social media will therefore need to improve, and Vizeum predicts that 2013 will be the year when the market moves away from loose KPIs such as; fans, followers and views to richer metrics such as; average engagement rates, customer proﬁling and measurement of oﬄine behaviours as a result of social activity.
FACEBOOK & TWITTER STILL DOMINANT Facebook and YouTube will retain their dominant positions throughout 2013. Given the sheer scale and reach of the Facebook platform, we expect advertising revenues to continue to grow, but twitter will show the highest percentage growth of all social networks in 2013, both from an audience and from an advertising point of view. With their “built for mobile” platform and the pervasiveness of second screen behaviour, twitter will become more and more relevant as a medium through which we catch up on life events and TV events in particular. The Eurovision ﬁnal is a prime example of this type of second screen behaviour generating almost 18,000 tweets throughout the programme in Ireland alone. We’ll see more advertisers in 2013 looking to ﬁnd ways to tap into this trend and leverage these conversations.
SOCIAL WILL CONTINUE TO GROW Social will continue to grow at a frantic pace in 2013, not just in terms of the monies spent in advertising, but also in terms of content creation and management of the growing number of social platforms. Indeed, as the medium fragments and the variety of social networks available to us increase, social, as a medium may challenge the budgets of more traditional forms of online advertising. Social media has a long way to go to realise its full potential and 2013 is just the beginning!
The Outlook 5
6 The Outlook
Double digit growth in spend again in 2012 As we had predicted, 2012 marked another year of double digit growth in Irish digital ad spend, with a 12.8% jump in the ﬁrst half of the year alone. In fact, at Vizeum, our digital media investment doubled between 2010 and 2012 , reﬂecting its undeniable place in most Irish people’s daily lives and therefore at the heart of our clients’ communications. The hot topics in 2012 were around return on investment and driving real engagement. A key trend was the development in performance marketing, particularly real time bidding and the advancements in attribution as marketers ﬂocked to avail of, and understand more fully the eﬃciencies digital media can deliver. Also in 2012, as the consumer journey across digital devices evolved, we saw the ﬁrst signs of a real shift from the linear model of online advertising to a partnership model between advertiser, agency and publisher. This focus on a deeper and more meaningful engagement will ultimately change the conversation brands have online.
Return on Investment will top the agenda in 2013 We predict that in 2013 performance marketing will continue to top the agenda for many advertisers. Over 50% of total digital spend in Vizeum in 2012 was on performance led campaigns, having grown rapidly over the previous 18 months. We implemented more sophisticated buying and reporting across more channels than just the tried and trusted Google AdWords. By the end of 2013, we expect performance digital to have grown to account for 60% of all our digital spend. How our budget is invested is also beginning to change, with advertisers now seeing equal, if not better returns from new performance channels such as real time bidding (RTB). Looking into 2013, we expect many more advertisers to discover the synergies between RTB and PPC, this will be particularly important in sectors where PPC is competitive and costly, and will oﬀer an alternative route to deliver the best possible return on investment.
Real Time Bidding will replace much ﬁxed placement buying In 2012 Real Time Bidding (RTB), the new method of selling and buying online display advertising in real time, became much more widespread. RTB is a highly eﬃcient way of buying digital display inventory because rather than buying ﬁxed placements, we can now buy digital display via auction. We predict that in 2013 it will further transform the online display industry. Campaigns can be much more targeted and cost eﬃcient delivering better results and lower costs than ever before. More real time bidding solutions will be oﬀered by sales houses in 2013 as they realize that this is where the future of online display volume buying lies. But we also expect to see a rationalization of the market, with agencies limiting the number of trading desks they use to just one or two. And agencies themselves will begin investing in trading desks to oﬀer further cost advantages to clients. At Vizeum, we have been utilizing our own trading desk, Amnet since the end 2010. We will continue to invest in the platform in 2013 to deliver increased performance beneﬁt to clients
Attribution will change how we measure success At the moment the default setting for most advertisers is to attribute a sale or lead to the last thing the user clicked on and disregard all previous interactions. This is far from perfect. In 2013 more advertisers will examine their own speciﬁc customer journeys and paths-to-purchase in order to more fully understand what has shaped the end result. Understanding attribution and creating a performance strategy, which leverages all interactions within a sales journey, will be key in 2013. This in turn will lead to a greater understanding of the roles of both display and PPC as performance channels. As such, more analysis of data will continue to be a priority in 2013 as advertisers and agencies dig deeper to optimize performance. This will be especially important for performance agencies in understanding the consumer journey and uncovering insights that will lead to strategy.
The Outlook 7
DIGITAL PARTNERShIPS WILL LOOK BEYOND PURE MEDIA SPACE The Big 5; Amazon, Facebook, Microsoft, Apple and Google will see their technology footprint grow as they continue to buy budding tech companies (Facebook’s purchase of Instagram in 2012 is a case in point). It’s imperative that agencies work together with their clients to decide strategically whose side they want to be on.
In order to do this there will be a need to really think about these potential partners diﬀerently. Rather than making decisions purely from a media buying / advertising point of view, increasingly we will be delving in to their strengths as organizations to see if there is alignment with our clients that can be availed of. As advertisers look for ways to drive aﬃnity, change brand perceptions, grow awareness or any other number of brand health metrics, they will realize that content and experience is king. Google’s suite of products includes oﬀerings in video, social and measurement. Brands therefore need to look at the value of Google not just from a media point of view but also from a data, insights and video point of view. There’s huge richness there that can be tapped in to. Similarly with Facebook (sponsored stories, check-ins, Facebook Connect, etc.), there’s huge scope to use their assets to build deeper communities (beyond likes!) and avail of their strengths. So when we think of Digital Partnerships, in 2013 we’ll be considering the value beyond pure media of those that can help shape our communications for the future.
In terms of spends for 2013 we predict another 14% growth as the medium continues to go from strength to strength.
8 The Outlook
The Outlook 9
There was great anticipation approaching 2012 that the TV market would ﬁnally see some revenue growth oﬀ the back of continual sharp declines since 2008. Unfortunately, this growth failed to materialise and the year end position is circa -8% down driven primarily by reduced marketing spends and the late introduction of a split year trading model by RTÉ. This new trading model unintentionally gave greater ﬂexibility allowing for some spends to be invested in other media. We are optimistic about modest growth (+3%) in TV revenue in 2013 and we believe it could come from several sources; • The extremely competitive Telecom/Cable Service Provider market where Eircom, UPC & Sky operate will heat up as Eircom enter the TV provider market. Sky will also enter the very competitive Irish Broadband market. • Motor industry spend will show growth with the introduction of a second vehicle registration period for the ﬁrst time in July. • Big brands that cut spend over the last few years will start to re-invest in television to help rebuild key brand scores. • Finance category will see a boost as banks start lending again with mortgages and car loans increasingly on the agenda.
Irish Terrestrial viewing fell after the analogue switch-oﬀ After strong viewership growth in 2011, attributed largely to it being the ﬁrst full year of seven day time-shifted audience measurement being recorded, election coverage and poor weather, we entered 2012 with expectations of viewing decline. Viewing habits are continuing to be reshaped by the increasing penetration of personal video recording devices (PVR’s) like SKY+ and UPC+. Whilst we are watching less live TV, upwards of 95% of TV content is in fact viewed on the day of transmission. Broadly speaking, less than 2% of content is watched between 3 and 7 days after transmission. Young women (15-34s) continue to be the audience who watches the most time-shifted content, whilst in contrast young males, who have a greater inclination towards watching event programming like live sport/news, have a higher percentage of live viewing.
10 The Outlook
Analogue Switch-oﬀ occurred on October 24th and in typical Irish fashion we were last minute making the switch. As of January 2013, the TV universe has not fully recovered, with the loss of 45,000 TV Homes (c. 3%) at primary reception type level (i.e. main screen). On top of this, we believe many homes have made the decision to not upgrade their second & third sets due to the ﬁnancial cost involved, but also because of the mass availability of programming content online which can be viewed via laptop/tablet/mobile. Less people watching RTÉ, TV3 and TG4 has lead to a very sharp loss of viewers to commercial messages, but what we are noticing is the eﬀect appears to be greater for TV3. Perhaps the light entertainment content shown on TV3 lends itself more readily to second & third set viewing for younger people who are less concerned as to how they receive their content. For 2013, we expect commercial viewing share to the indigenous terrestrial television channels to fall again. There are no major sporting tournaments in the year ahead to help halt the declines. Additionally, TV Homes may continue to migrate to paid-for-TV services like Sky & UPC. We also believe Sky and other UK Broadcasters will continue to opt-out new commercial channels to help oﬀset natural commercial viewing declines derived from viewing fragmentation.
Revenue was down 8% in 2012, but we are optimistic about modest growth in 2013
There was trading instability in 2012
The TV experience will be further enhanced by social media in 2013 2012 was lauded as the year of Social TV in the UK & USA. We are optimistic we will increasingly see synergy between broadcast and social media strategies in 2013 in Ireland. TV has long been praised for its contribution to driving search but Broadcasters, Advertisers and Agencies are clearly seeing the power of Social TV. Programmes like The Late Late Toy Show have seen their hash tag #toyshow peak at 20,000 tweets during transmission. Love Hate is another good example of the viewer’s appetite to share their feelings about what they are watching as during the ﬁnal episode in December viewers posted 20,000 tweets using standard programme name hashtags, but also via some uniquely humorous hashtags related to the content. Within two hours of transmission a Facebook proﬁle which was created as an RIP page to one of the characters had over 17,000 followers.
Video on Demand in 2012 clearly validated that content is king to any broadcaster across all platforms. Programmes like ‘Tallafornia’/’Dublin Housewives’ have delivered up to 12% of its viewers via 3Player. ‘Love Hate’ delivered over 11% of all views to the 1st episode of Season 3 via the RTÉ Player. The average we believe is closer to 3% of views for other content June & the Euros saw RTÉ’s player reach a milestone of > 4million streams per month. In 2012, we undertook an exhaustive investigation in to VOD pricing because of the premiums it commanded in comparison to TV. We also addressed the inﬂexibility of targeting available. RTÉ have adapted their trading for 2013 to a model that oﬀers more ﬂexibility. Within this new model there will be a small element of seasonality of pricing, which has not previously existed and pricing will be linked to device/genre/programming/geographical/age. Other Broadcasters are likely to follow suit as inventory increases.
Companion apps like Zeebox, Shazaam and Get Glue are extremely popular in other markets and soon Irish Advertisers will be able to capitalise on the connection between Broadcast & Social media using TV3’s companion app which will launch in 2013.
Broadcast players will continue to evolve in 2013 Broadcaster video-on-demand services are continuing to experience rapid revenue growth (+ c.35%) despite their signiﬁcant premium cost per thousand sell vs. broadcast TV. Helping to drive this, 2012 saw ; • RTÉ mobile app over 545k+ downloads • Re-design of 3player site • RTÉ deal with Netflix & Samsung
The Outlook 11
VOD REVENUE TO CONTINUE TO GROW For 2013, revenue will grow another 30%. Increased distribution outlets for their content, coupled with improved broadband penetration will increase the inventory available to sell. An ad-serving solution will have been provided for UPC’s on demand service and this is one of the biggest growth areas we project for streams in 2013. There are currently 749,000 Sky TV homes in Ireland (TAM Nielsen). Whilst not all would have access to the on-demand service, RTÉ & TV3 will not be able to ignore the potential windfall and will be in negotiations about releasing their content to Sky’s service.
WhERE ThIS TAKES TV/AV IN 2013 In summary it’s a hugely exciting time for media owners operating in the broadcast market. The medium will have changed more from 2010-2013 than it will have in the previous 50 years since its inception. It’s important in this regard that agencies and advertisers recognize and adapt to the increasing fragmentation that this change is bringing. Agencies and advertisers alike need to think about the multiple touch points all audio-visual platforms provide to ensure messages resonate with the right people, at the right time, in the right environment and on the right platform.
12 The Outlook
The Outlook 13
Basic media stats for radio tend not to change too much. Just like all media though, digitisation has resulted in new radio behaviours evolving.
The faltering terrestrial set The formidable role radio plays in the Irish market is still unquestionable, but its guise has changed. The terrestrial set is no longer king as devices both evolve and become common place. With the increasing penetration of MP3 players, iPods and Smartphones, audiences are now much more adept at selecting their content whether that is terrestrial broadcast radio, international digital streams or a personal playlist via their own portable device. The adoption is heaviest amongst younger audiences. • 56% of young adults have a smart phone. • 77% now have a MP3/iPod (up from 36% in 2006) versus the adult norm of 46% and half of those (56%) use it almost every day. • 25% report to have listened to the radio streamed online within the last 30 days • Nearly 20% have downloaded music in the last week. 2011/2012 saw an explosion in the number of radio station Apps and web traﬃc continues to grow. RTÉ Radio 1 has already had over 670,000 App downloads. Spin 103.8’s App has been downloaded 182,758 times (particularly impressive when you consider their weekly reach is just 223,000). 98fm has had 99,405 downloads, Red FM in Cork has 60,212 App downloads and a smaller player, like Sunshine 106.8 Radio (market share just over 2% in Dublin) is already reporting downloads in excess of 50,000. 2012 saw stations push these oﬀerings more actively. Both Spin 103.8 and RTÉ Radio 1 are of particular note; with their presenters adept at interweaving app and podcast download encouragement into their commentaries.
The threat for 2013 is that as familiarity grows with both apps and online streaming, international stations will be found and inﬁltrate the Irish market. This will result in a more saturated and competitive market where new habits and a broader repertoire are developed. At that point, local stations may seem banal and too homogenous when diverse options are more readily available. As cars in particular become more WIFI enabled, it will lift the boundaries to a greater extent. At that point, we will have thousands of stations to choose from, which cater for the most individual of tastes. This represents a signiﬁcant threat when you consider 87% of people listen to radio in cars (SIGS Dec. ‘12) and on average spend 4.8 hours in the car per week (TGI 2012).
14 The Outlook
We expect that stations will invest in better operating systems, delivering a quality experience across all devices
With the growth in adoption of new devices, we expect stations to invest in better operating systems, so that no matter what device is used, it will impart a quality experience.
15-34s average quarter hour listenership to youth stations
Splitting the dial by age
Coupled with the new manner in which listeners are consuming radio, 15-24s are now listening to 6% less radio than they did in 20081. That listenership is additionally being consolidated amongst the youth stations in preference to the more established national stations. In the same timeframe, those catering for the under 34 year old market have grown by 86%, whilst the nationals are down by 33%2.
Sep t '0 De 8 c' 0 Ma 8 r' Jun 09 ' Sep 09 '09 De c' 0 Ma 9 r '1 Jun 0 '1 Sep 0 '10 De c' 10 Ma r '1 Jun 1 '1 Sep 1 '11 De c' 1 Ma 1 r '1 2 Jun '1 Sep 2 t '1 2
It is interesting to consider this fragmentation in the context of BAI licences. Those 40000 37 licences were awarded in a very diﬀerent climate; pre-recession and pre-tech. With such fragmentation in the market, the proﬁtability of all is now questionable. Whilst there are some deep pockets supporting radio stations, 2013 could see the collapse of some of the less sustainable.
Creating and connecting The transformation of radio means it is now a more communal experience, where presenter/producer and listeners can communicate. It’s a much more active experience where you can ﬂick from terrestrial to digital to setting up your own playlists. An App like iHeartRadio is a great example of content aggregation. Here listeners can build their own schedule, pulling in programmes from a wide range of radio stations across the US. With the launch of Spotify in November 2012, personal playlists have moved into a social space. By sharing music preference with friends from facebook, we now have peer to peer endorsement and sharing where previously we had private journeys. Musichub from eircom also has a social nature but it further demonstrates the challenge for the radio market as “brands” delve into the music space. And these are just the tip of the iceberg with other oﬀerings in existence; including Deezer, WE7 and Groove Shark.
Other media don’t oﬀer the same top personalities, or the communal experience of radio
1 JNLR Dec. ’12 v Dec. ’08. Minutes listened 2 JNLR Dec. ’12 v Dec. ’08. Average Quarter Hours. Youth stations: Spin 103.8, Phantom, Nova, Beat, Spin SW, I Radio NW, I Radio NE, Red FM.
The Outlook 15
But with the transformation of radio there is also great opportunity for better synergy between presenter and listener and that line is ever changing. Uniquely, what the medium of radio oﬀers, is unique connections across multiple platforms (social, webcams, mobile, website and radio set). The live TV function, which Today FM oﬀer, is an example of heightened oﬀerings. 20% of their unique monthly traﬃc has used this service. It highlights the evolving nature of radio. Their presenters treat the webcam as a TV Show and interact with the cameras and audience. Personalities and the communal experience is something other media can’t oﬀer, so it will be harnessed and capitalised on in 2013.
NEW APPROAChES TO TRADING AND RESEARCh In 2013, we expect agencies to push more aggressively for opportunities to capitalise on the deeper engagements available. Consequently we expect commercial teams to consolidate, as they recognise the need to integrate the sale of the traditional spot and the newer oﬀerings. With revenue dropping, this streamlining in the sales divisions will not only be essential commercially but also needed to gain a USP over the competition. Radio will be treated holistically as one entity rather than diﬀerent product oﬀerings. Radio Gauge has gone some ways in looking to show the eﬀectiveness of radio. For example, they have shown that there is a 13% diﬀerential in ad awareness between strong and weak creative. The next step will be to ﬁrmly demonstrate engagement levels.
WhERE ThIS TAKES RADIO? New forms of music listening are a threat but it is key to remember that personalised playlists do become tiresome. Radio stations are important for introducing new talent, providing a local experience and shaping popular culture. To stay relevant, Irish stations will regularly review the uniqueness of their oﬀering to ensure they are creating a community, which is impenetrable. This will be an ongoing battle as consumers now evolve at a faster pace than ever before. To do this content must be on the pulse and not formulaic.
This applies to not just the playlists but also the tone and station personalities. For 2013, we expect revenue to be down 2%, and for radio to ﬁrmly move from being a passive experience to much more active, where you can choose what you want to listen to. To survive, content will be the winner.
16 The Outlook
The Outlook 17
2012 was a tough year The future for the press industry was the subject of much discussion in 2012. As widely anticipated, the year turned out to be another very tough one. The 4th consecutive year of recession and austerity, combined with the continued expansion of digital media and smart devices put huge pressure on revenues and yield in the sector. However the medium is far from dead: we are still spending almost €1m a day during the week, and a further €2.2 million on Sunday papers each week! At Vizeum we had predicted that press ad revenues would be down about 10% year on year, but signs are now pointing towards an even greater drop of 16% for this medium. Marketing budgets have been under pressure to deliver return on investment and as such digital media, with their performance based buying model and free content saw an increased investment, largely at the expense of press.
The Online/Oﬄine content dynamic A key challenge facing the industry is determining what content should be published in the newspaper and what should be made available online. We all know that free content online is aﬀecting newspaper circulations but certain publishers have had greater success in diﬀerentiating the product oﬀering and thereby protecting revenues. In the case of the Daily Mail for example, readership of the print version increased by 13% in 2012 while the online site (which contains very diﬀerent content) also went from strength to strength. Conversely, when we look at the broadsheets that suﬀered declines in print sales and gains in online readers in 2012, we can see that their online content is largely similar to the print version. Quite simply they are not providing consumers a very compelling reason to hand over €2 every day. The Irish Independent for example lost 7% of its print readers (35,000 people) with reported unique monthly users to the same content online increasing by 40%.
Most titles circulated fewer papers and experienced a loss of readers in 2012, with the broadsheet titles seeing the largest declines Total readership of any newspaper
08/09 09/10 10/11 11/12
2000 1500 1000 500 000s)
18 The Outlook
The economy also continued to have a profound eﬀect on family life and consumer behaviour, with traditional rituals like a simple newspaper purchase often seen as an unaﬀordable luxury. Although overall print reach remained strong, we are purchasing less frequently. Most titles circulated fewer papers and experienced a loss of readers in 2012, with the broadsheet titles seeing the largest declines. Overall in 2012 daily newspaper circulations were down by 6% and Sundays were down by 9%.
2013 will be about copyright, content, social media and cross platform trading One of the key themes that will shape 2013 will be adequately commercialising content accessed through the digital platforms. This has been a conundrum for news houses globally and has been tackled with varying degrees of success to date. Could the huge success of the online subscription based NY times (which is set to go 100% online within a few years) or the FT in London be replicated in Ireland? Press owners have been fearful here to put this to the test, with only the Sunday Business Post charging online readers beyond a pay wall. This has had limited success. One solution that is being hailed as a possible breakthrough is the provision of ‘micropayments’ in order to access content. Rather than subscribing to full newspapers and paying in advance, users pay as they go, accessing only for a short time or for that which is of interest to them. The protection of content, which the press industry feels is increasingly being cannibalized by online aggregators, will continue to be a problem for press owners in 2013 as they invest hugely in quality journalism. Yet as they see it, others make the commercial return for distributing it online. In fact, it is an issue that is currently being tackled on a European level, with a copyright bill likely for 2013. Irish press owners and the NNI are hoping that this will be enforced by the Irish government, compelling aggregators here to compensate the owners for the material used. Understanding the importance of social media as a huge opportunity to extend reach will also be important in 2013, and we’ve already seen the Irish Times embrace this. The launch of their social reader in 2012, allowing users to consume and share content with friends through their Facebook page, was the ﬁrst by any Irish newspaper. This has worked enormously well for the Guardian in the UK and is applauded by us in Vizeum, as it oﬀers our clients greater insight and increasingly targetable contextual READERShIP GAINS AND LOSSES marketing solutions. Adults 000s
As the press sector changes, trading with advertisers and agencies will also need to evolve. Most Irish titles have realized that cross platform trading is a must. Solutions are becoming much more advanced, ﬂexible and innovative. However, titles must also remember that content is the ultimate product they are selling and the medium it’s consumed through will become less relevant to advertisers. So the industry must work to a point where circulation and readership measurement are combined across print and digital platforms for all titles. In fact, it is now likely that the JNRS will include combined print and digital ﬁgures for news brands by the end of 2013. We believe that the onus is on the press titles to support their brands & provide a reason for people to purchase. In 2012 the Irish Times invested in showcasing their quality of journalism and their focus on insightful thought provoking articles.
Jul10-Jun11 Jul11- Jun12
Irish Daily Star
Irish Daily Mirror
Irish Daily Mail
Sunday Business Post
News of The World
Irish Sunday Mirror
The Irish Mail On Sunday
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NEWSPAPERS STILL OFFER SCALE, TRUST AND GRAVITAS In 2012, almost half of Irish Adults said they regularly accessed some sort of digital news source and only a quarter said they were still reliant on newspapers to keep them informed. And this situation isn't going away. We currently estimate that 65% of the Irish population own a smart phone, with up to 35% owning a tablet by the end of 2013. So what has become clear over the past 12 months is the changing role for the printed news media in Irish people’s lives. Newspapers still oﬀer scale, trust and gravitas, but now readers are getting headlines online & purchasing printed titles more for the commentary, insight and analysis oﬀered. What’s important to note is that we spend around 20 minutes on average reading a newspaper, compared to 5 minutes scanning a screen for headlines.
LOOKING TO ThE YEAR AhEAD So looking to the year ahead, we believe that the real winners will be the newspapers that grasp the crucial diﬀerence in how news is consumed across media and devices. Those that provide cross media news solutions, bespoke to the medium or device (that compliment rather than steal from each other) will be ahead of the game. Subsequently, they will be well placed in the medium term as readers’ age, print revenues continue to contract and the lines blur between media. As such, we feel that it’s crucial that all press owners have a clear strategy going into 2013 in order to future proof themselves. Whilst 2013 will continue to be a challenging time for press owners (we predict -9% revenue), it is also a time of huge opportunity and at Vizeum we ﬁrmly believe that those who act now will continue to play a big role in the future media landscape of Ireland.
20 The Outlook
The Outlook 21
In 2012 the age of mobile had ﬁnally arrived 2012 was another period of great change for Irish marketers, as the power and potential of mobile ﬁnally began to ﬁnd its rightful place on the agenda. In fact 32% of all Irish internet usage in 2012 was through a mobile device. In the ﬁrst half of 2011 the IAB had estimated mobile ad revenue at €1.6m (2.5% of all online spend), and by the end of 2012 we estimate it has grown to 4%. But, due to content providers’ slow transition to the medium, and advertisers’ less than rapid uptake, this is still way out of proportion with the estimated 65% of our population that now own smart devices. In fact, a growing number of people are already in the habit of accessing the web exclusively through these devices. A 2012 Google Ireland study showed that 56 % of owners access the web via a mobile device multiple times per day, and they were found to spend an average of 9.2 hours per week online. Some of the signiﬁcant mobile developments for advertisers in 2012 included; the introduction of rich media adserving allowing advertisers oﬀer a more engaging message, Twitter’s entry to the ad market, Facebook’s development of its app & introduction of mobile speciﬁc targeting, Google’s expansion of the YouTube Truview format to mobile, and numerous mobile speciﬁc formats by Irish publishers such as Independent.ie and Irish Times. In addition, the mobile network buys through Yappy and others are now driving increased value in the sector.
Mobile growth set to continue in 2013 Mobile is a medium that is not only beginning to rival others in both reach and frequency, but has arguably already surpassed the rest in terms of targeting capabilities. With smart-phones almost the norm, data-access becoming much more aﬀordable and WIFI more widespread than ever (not to mention 4g on the horizon), we predict that usage will continue to grow rapidly in 2013. One indicator of the rapid growth is that 1 million of Facebook’s two million active Irish users now access the site through mobile. This is an increase of over 300,000 users since 2011 and will continue to shift upwards. In fact, how we consume media in general will continue to be shaped by the mobile device in our hand. For example four out of ﬁve of us now have a smart phone, tablet or laptop nearby when watching TV, making it a much more social medium than ever before. Often the mobile is our ﬁrst media contact of the day and last at night, and most of us won’t leave the house without it. Even mobile search volumes doubled in 2012, and our Vizeum prediction is that they will exceed desktop searches by 2014.
We predict that mobile searches will exceed desktop searches by 2014
22 The Outlook
The opportunity and importance for advertisers of these changing habits cannot be overstated. Those advertisers taking early advantage of the growth in mobile search will enjoy high Click through Rates and low Cost per Clicks. Meanwhile ‘media bridging’ will be a hot topic in 2013 as we integrate the power and impact of traditional media with the targeted and personal nature of the mobile device. The phone or tablet can act as a hub for accessing further information; sending the consumer in a particular direction or simply combining multiple marketing messages across a variety of platforms being consumed simultaneously.
Integrating traditional media with the targeted and personal nature of the mobile device
More Irish sites must become mobile enabled
Media Bridging will leverage cross platform synergies
In 2012 (depending on the sector) mobile represented between 25 % and 45% of Irish brands’ web traﬃc. However, the vast majority of businesses have not optimised their websites for mobile. Consumers want information to be only a click or two away, the site to ﬁt the screen and to have a simple and straightforward experience. Fifty-ﬁve percent of respondents to a recent Google survey said a frustrating mobile experience hurts their opinion of a brand and ultimately their likelihood to engage or purchase. As well as optimising their site for mobile, brands will need to invest more in display and search advertising in 2013 to keep up with consumer demand. Developments in web browsers and within apps have greatly improved the richness of mobile ad formats. Plus we can target now by an ever growing choice of demographic, geographic and even device oriented metrics. Although CPMs are higher for display through mobile than PC, the targeting capabilities and the higher relevance to the user leads to greater engagement rates. Therefore used correctly it is more cost eﬃcient than PC display advertising. A large amount of Irish mobile traﬃc is currently through apps, with the average smart phone user having downloaded 29 according to Google Ireland. However, we predict that the native apps as we currently know them will be largely replaced by rich web apps that can run in any browser or even oﬄine thanks to HTML5. Developers will be happier as they won’t be bound by Apple’s charges and won’t have to support multiple platforms. The upshot for the mobile consumer will be fewer visits to the apple or android store and a simpler, faster, more eﬀective mobile site interaction.
The Outlook 23
WE PREDICT ThAT MOBILE REVENUE IN 2013 WILL INCREASE BY 12% There is still huge room for improvement in the use and application of Irish mobile advertising. We must be quite clear on knowing the unique strengths of mobile. No medium has a greater opportunity for immediate action, provided the prompt is executed well. It is also imperative to not just directly transfer the message from PC or other media. The consumer frame of mind when on mobile is very diﬀerent to desktop and at Vizeum we know that a deep understanding of the role of each device at diﬀerent stages of the consumer journey is critical.
We predict that mobile revenue in 2013 will increase by 12% as more varied and rich options become available to advertisers. Over the coming year an increasing number of sites will become mobile optimised and the consumption of online video on mobile will continue to grow rapidly. Some of the more exciting developments this year will be the roll out of a Google Wallet trial and more Near Field communication solutions – check out our technology section (page 34) for more details.
24 The Outlook
The Outlook 25
The Irish obsession with cinema continues. While digital roll out widens its advertiser appeal, it has been impacted by cost pressures. 2012 followed a solid 2011 performance and with a number of banker blockbusters scheduled there was reasonable optimism for a stable performance during the year. This did not quite prove to be the case as admissions dipped below the 16m mark for the ﬁrst time since 2001, a reduction of 5% on the previous year.
Why the Admission Reduction The contributing factor towards this decline is undoubtedly the signiﬁcant pressures on disposable income, especially for the core 15-35 cinema goers. A night at the cinema is now more of a considered purchase. This, coupled with the inconsistent nature of the quality of releases throughout the year meant that the habitual nature of going to the cinema was eroded, albeit gradually. This fact is highlighted by a review of the top ten grossing ﬁlms of the year. Skyfall, the critically acclaimed Bond ﬁlm, launched in October and topped the charts for the year delivering just under €6m. This was followed by the latest instalment of the Batman series – The Dark Knight Rises, which grossed €5.5m. Both releases delivered well above the previous year’s highest grossing release Bridesmaids at €4.3m. The top 10 of 2012 contributed over €34m to the box oﬃce, versus €29m for 2011; an 18% increase. Yet total revenues saw a decline, underlining the reliance on the key releases.
01 Jan. - 31 Dec. 2012
The Dark Knight Rises
Marvel Avengers Assemble (3D+2D)
The hobbit: An Unexpected Journey (3D+2D+IMAX)
Ice Age: Continental Drift (3D+2D)
The Twlight Saga: Breaking Dawn - Part 2
The Amazing Spider-Man (3D+2D)
The hunger Games
26 The Outlook
The Impact of Digital 2012 also delivered signiﬁcant investment in digital projections, although this slowed a little in Q4 as the biggest releases of the year took prominence. Ireland now stands at 62% digital screen penetration with future upgrades for a number of screens scheduled for the early months of 2013. The investment in technology and infrastructure is signiﬁcant but brings with it beneﬁts for all parties: 1. For the consumer, a better viewing experience and no degradation of quality over time which can be experienced via traditional ﬁlm. 2. For the cinemas, there is scope to widen the range of entertainment opportunities beyond ﬁlms to include live events such as sports and concerts, thereby increasing the appeal and use of the facilities. There is now the opportunity to feature more art house ﬁlms from smaller distributors, which until the digitisation of screens was not possible. 3. For the advertiser, a much speedier and cheaper route to market that has cut copy lead times by two thirds and production costs by 80%. In doing so it has enabled a once restrictive and in-ﬂexible medium much more scope to attract new brands for trial.
More Sequels in 2013 This year’s releases follow the pattern of similar years where the sequel is king. These will as much as possible guarantee success in a challenging environment. They include; Iron Man 3, The Hang Over Part III, Hunger Games 2, Monster University (sequel to Monsters.inc), This is 40 (Knocked Up follow on), Man of Steel (a Superman incarnation), & the second instalment of the Hobbit trilogy. Successful books again make their way to the big screen and include; The Great Gatsby, Beautiful Creatures, & World War Z. In addition there is the eclectic mix of Lincoln, Hansel & Gretel, The Lone Ranger & Alan Partridge: The Movie, to enjoy during the year.
3D – TO BE OR NOT TO BE A key debate that rages within the ﬁlm industry at present and into 2013 is if the 3D format is suﬀering a slow and painful demise. 3D after all is not a new invention. It’s been seen in the ﬁlm industry for over 60 years and a number of releases in the intervening period have generated mixed success; essentially cashing in on novelty. Avatar in 2009 was the turning point. The fact it is the highest grossing ﬁlm ever obviously made the studios sit up and listen. The unfortunate knock on eﬀect has been the long line of poor imitations; relying on the novelty of the format rather than the strength of story. Too often second rate ﬁlms have been forced into 3D when it is unsuited. In fact a large proportion of ﬁlms do not have enough 3D eﬀects to justify its inclusion. It has to be commended that Christopher Nolan, director of the Dark Knight Rises, which is the seventh highest grossing ﬁlm worldwide refused the studios request for shooting in 3D. he insisted it was hard for an audience to embrace the 3D experience and that the whole point of photography was that it was threedimensional already. It is hard to argue against this context, so unless the industry takes a step back and adopts a more pragmatic view to 3D, with an enhanced viewer experience at its heart it is unlikely to result in universal adaption and success.
PRESSURES FROM NEW COMPETITION A signiﬁcant and growing threat to the success of the medium in 2013 remains the increasing popularity of on-demand ﬁlm services. Recently we have seen UPC launch their own oﬀering to customers and Netflix increased its subscriptions to 100,000. This can be partly attributed to the improvements in broadband infrastructure increasing the viability of these entertainment options. While these services are unlikely to have much eﬀect on the large appointment to view releases this year, they will aﬀect the smaller, less critically acclaimed ﬁlms of which there are still many. As a result, we expect revenues to remain static in 2013.
The Outlook 27
28 The Outlook
Outdoor spend still suﬀering in 2012 2012 was yet another tough year for Outdoor advertising. The downward trend in spend continued for the 4th year in a row with ﬁgures down -7% yoy. Certain contractors would have experienced declines in the region of 15%, which demonstrates the challenges still facing the medium. The decline in spend was driven by a number of factors; reduced client investment in high impact campaigns, the re-balancing of TV costs that we saw back in 2009/10 making OOH less competitive and supply outstripping demand. However, certain formats such as Shopper targeted outdoor media bucked the trend, with supply unable to keep up with demand as the focus shifted to reaching consumers in their ﬁnal purchase funnel.
Transport formats felt the pinch despite a signiﬁcant increase in reported reach The inclusion of the new Dublin travel survey in CAFAS at the end of 2011 signiﬁcantly shifted the reach and frequency delivered by many transport formats. T-sides, for example, saw reach amongst All Adults increase from 63% to 89%, with average freq. reduced from 12.4 to 5.7. This shift in delivery saw advertisers investing less in Transport formats and 2012 saw reported spend down -26% yoy. This was, however, oﬀ the back of having successfully maintained strong investment levels for the last 4 years. Up until the new travel survey transport formats had in fact seen revenue growth of 1.6% (the only reported format to show growth over the 4 years). A new travel survey has been compiled for Cork with its addition to CAFAS planned for early 2013. Whilst we had hoped that the new survey would give scope to introduce Cork Plus and Cork Met to the outdoor coverage reporting tool, it is likely that the sample size will be too small, so we will continue with the overarching Cork deﬁnition. Either way, it will be interesting to see if the traveller numbers increase as signiﬁcantly as they did in Dublin and what impact that will have on OOH delivery in the area.
Are digital screens the way forward? There has been a lot of talk about the increase in outdoor digital screens and we have seen growth over the last few years with the launch of Transvisions in Dublin, dPods, C-Stores, Petrol Pump screens and Centra TV. We are still a long way, however, from having a comprehensive digital plant. By the end of 2012 we had 916 digital screens on oﬀer vs 811 in 2011, so whilst there was growth, it is by no means proliﬁc. This slow growth will continue in 2013, with CBS planning to launch in 2 more shopping centres and digital bus sides still on the agenda. The versatility of digital screens to gain greater standout with movement and interaction is signiﬁcant. Talk of additional innovation coming in 2013 such as touch screens also increases the excitement around the format. To a certain extent the ﬂexibility of the format is only limited by the imagination of the agency and creative team. But there still remains the question over whether the increased impact can actually justify the higher cost per site.
The Outlook 29
Will Alcohol restrictions on OOH advertising come in this year? Potential alcohol restrictions are still a big cloud looming over the OOH industry heading in to 2013. Whilst Roisin Shortall made an abrupt exit from the cabinet in Sept 2012, the increasing restrictions on advertising alcohol are realistically not oﬀ the agenda and we anticipate that Alex White is likely to bring it back to the table early this year. Although it is diﬃcult to forecast a timeline at this stage, realistically any restrictions are unlikely to be implemented until H2 2013. The government seem to be adopting a watch and wait strategy following the UK’s minimum pricing approach. Alcohol only accounts for approx 13% of all advertising spend on OOH, down from 23% in 2002. So, whilst the potential impact on contractors will still be felt, it is not likely to be as signiﬁcant as some predict. In terms of impact for non-alcohol advertisers, it is unlikely that media owners will drop their costs signiﬁcantly more to attract new advertisers to replace the alcohol spend, but there will probably be more potential for negotiated runs on as bonus to reward existing advertisers investing in the medium.
Ireland will begin to catch up on other markets Continued developments in mobile and the increased proliferation of smartphone handsets means consumer interaction and the way they engage with OOH formats will continue to evolve. We have seen a recent increase in functionality and interaction with Outdoor formats in a number of other markets. For example HMV & 20th Century Fox in the UK introduced QR Codes in bus shelters to enable mobile users to buy DVDs online on the spot. In South Korea, Tesco opened a virtual grocery store in a subway station, allowing users to shop by scanning codes on their smart phones and have products delivered to their homes the same day. With production costs reducing and access more universal, we anticipate that we will see more of this sort of interactivity in Ireland in 2013.
30 The Outlook
MOBILE MEETS OOh Even in the OOh arena the ongoing trend for cross media consumption is being realised. The continued merging of media saw the roll out of free wiﬁ in Dublin Airport, on Dublin Busses and on the Dart network in 2012 with a full rollout to be completed in 2013. And in January 2013 Dublin city council began its rollout of free WIFI on the streets of Dublin. Although advertising formats are not currently being marketed, as the year progresses, this format may provide a relatively simple initiative that oﬀers increased targeting capabilities and the potential to enhance campaign interaction.
LOOKING FORWARD Overall 2013 will continue to be a challenging year for the Outdoor contractors. We do, however, anticipate that the market will level oﬀ with spend forecast to decline at a slower rate of 4%. As advertisers seek to re-establish their brands after a prolonged period of focussing on point of sale, we should start to see greater demand for high impact formats.
The on street presence that outdoor oﬀers, plus the added opportunities for interaction that technology brings, means there’s now greater scope to achieve real engagement with consumers when they are out of home. We see 2013 as a great opportunity to shape innovation in the outdoor market and open new routes to consumer interactions not seen in Ireland before.
The Outlook 31
Technology Introduction Technology and gadgets are always evolving with such pace it can be hard to keep up with what the next big thing will be. While some products can oﬀer clear tangible beneﬁts, it can often be diﬃcult to distinguish between revolutionary products and quick fads. We believe the coming year will be largely dominated by greater connectivity and mobile devices. This section outlines some of the changes we expect to see in the coming months and years and how they will beneﬁt consumers and brands alike.
32 The Outlook
TV as technology certainly has been a hot topic over the past number of years; with the introduction of ﬂat-screens to HD screens, from terrestrial to digital signal and from 2D to 3D, the rate of change shows no signs of slowing. While some of these advances have provided enhanced user experiences, others have been more hype than anything else.
This time last year 3D was the big buzzword but failed to launch for two reasons; a lack of available 3D content and a lack of desire to wear special glasses to see the content. Another hot topic in 2012 was the evolution of the ‘Smart TV’ and will continue to be so for 2013. Early versions of Smart TVs allowed users to connect to the internet, but they’re becoming increasingly smarter with built-in cameras for Skype and an ability to stream online content or even browse our social networks. With a rate of change so rapid, discerning consumers may be hesitant to purchase, opting to wait for the next new version, but manufacturers like Samsung are already one step ahead, releasing their ‘Evolution Kit’ to future proof their devices. The kit, a small box that connects at the back, will provide hardware and software enhancements that will increase performance speed, easier navigation of menus or add applications previously not available.
At CES (Consumer Electronics Show) 2013 in Las Vegas, major players such as Samsung, Sony, Panasonic and LG talked about the progression of TV. UHDTV or Ultra High Deﬁnition Television is undoubtedly the new buzzword, oﬀering mammoth displays up to 85 inches and wafer thin, oﬀering twice the resolution of current high deﬁnition screens. As with 3D, there’s a lack of UHD content available. In fact, the only content available is what the content manufacturers create to showcase the devices so the likelihood of UHDTVs coming into our home this year is slim to none, after all, Irish HD channel subscriptions only increased from 11% to 16% this year. We believe the future of TV largely revolves around its connectedness, both as a device itself and to other devices. Manufacturers are already evolving TV to become more than just a screen; they’re quickly becoming media hubs with which we can engage with in far greater ways than ever before. With 80% of Irish people already using a ‘companion screen’ the appetite for more information about what we watch is already there whether it’s information about the show we’re watching, the opinions of others through facebook or twitter, or even further detail behind products and services in advertising. Considering tablet penetration in Ireland was expected to reach in the region of 40% post Christmas, we predict TV will become increasingly social as more people consume TV content with a smart device in their hands. For brands and advertisers, the opportunity lies in how to eﬀectively engage consumers in a meaningful way that contributes to their socially driven content experience.
The Outlook 33
Ownership of mobile phones in Ireland stands at 98% while ownership of smart phones is at 65% but over time as consumers update their handsets, smart phones will quickly dominate the market. Mobile always had reach on its side given the number of handsets in the market and location considering 75% of people never leave home without it and 61% will even bring them to the bathroom3. Now smart phones have opened areas like mobile social networking and mobile browsing, the way in which we use mobile is changing. Our phones have become a lot more than a device for making calls or even sending text messages. 50% of adults use their phone to stay up-todate with the news, 69% access social media, 73% send email and 89% look for local information according to AMAS. What’s really interesting is the change in how we search. 82% will now use their phone to research before a purchase decision and 36% will buy a product or service through our mobiles, with €685 being the average online spend per person in Ireland over 6 months. These statistics have big implications for brands as the consumer has a lot more control when making a purchase decision. They can search for more information about the product in-store, comparison price shop for better deals or read user reviews to ﬁnd out what others thought of the product post purchase removing the risk from decisionmaking. Alternatively, if they ﬁnd a better deal online they can purchase through their mobile. In our mobile chapter we mentioned the importance of mobile enabled sites. Only 2-3 years ago brands were focusing on mobile apps, investing thousands to develop branded apps for a myriad of platforms from Apple’s iOS and Google’s Android to the now defunct Nokia OVI store. Apps came with signiﬁcant barriers; they were expensive to produce, they had to be created for multiple platforms and changes took time to implement and be approved in app stores. We believe 2013 will focus on the mobile web removing a lot of these barriers. Brands will be able to create one mobile site that will be easily functional regardless of what type or brand of mobile device is being used. Brands will be able to alter their content instantly and at a considerably reduced cost. The role of mobile throughout 2013 and beyond will become stronger allowing brands to expand their reach, use mobile as a response channel or to enhance other media activity. The mobile web won’t be the only signiﬁcant change for mobile devices in 2013, we believe mobile payments will be a hot topic this year and although the topic has been around for a while, it’s only recently Ireland has begun to see any advance in mobile payments becoming a daily experience. NFC (Near Field Communication) or virtual wallets will dominate mobile payments and facilitate the convergence of physical and digital payments. NFC enabled devices will allow payment to be made by swiping the phone against an NFC enabled payment terminal, while virtual wallets store bank account information for online payments or barcode readers. In the US alone, Mastercard estimates mobile payments will increase almost fourfold in the next four years from an estimated $172bn in 2012 to more than $600bn by the end of 2016, while also planning for standardization of payment across all channels globally. Closer to home, in recent months we’ve seen some retailers push their online stores such as Supervalu and Tesco both facilitating online shopping and home delivery. While Supervalu opted for a standalone app, Tesco opted for a mobile enabled website, both retailers are oﬀering tangible beneﬁts for consumers by removing the hassle of visiting a supermarket, simplifying the retail experience while providing value led discounts for shoppers and incentivised loyalty schemes. FMCGs aren’t the only brands delving into mobile payments as Hailo, the mobile taxi app also oﬀers a mobile payment option for occasions you ﬁnd yourself stranded with no cash. These technological advancements will mean that mobiles’ importance in the advertising communications mix will to continue to rise in 2013 and beyond.
3 (Google 2012)
34 The Outlook
Interestingly, 78% of Irish tablet owners use their device to go online in the evening, mostly for browsing the internet, checking email, playing games, reading the news, watching online content, using social media or shopping for products or services. Tablets can easily and are quickly becoming companion devices for watching TV or lazing on the couch, thus keeping users engaged and in the room for longer. While competition in the market has mostly been dominated by Apple’s iPad, Google’s Android enabled devices oﬀer cheaper alternatives, while Microsoft’s late entry to the market oﬀers a wider choice for consumers. However, with more competition in this fast changing environment consumers can be easily confused by the variety oﬀered by Apple’s competitors. While Android products are typically cheaper, speciﬁcations by device can diﬀer greatly and the version of Android included can often be considerably more dated than the latest version available, which may not be compatible with the spec. Microsoft on the other hand released two versions of its Windows 8 mobile platform, RC and Pro. RC oﬀers an app only interface while Pro allows for a full version of Windows that will be backwards compatible with Windows software. Price also diﬀers largely depending on manufacturer and version chosen.
In Q3 2012 tablet penetration for Ireland was 16% and is expected to reach in the region of 40% after the busy Christmas period. The average time per interaction with tablets is approximately 30 minutes according to Google, while the IAB reports Irish people spend 8.2 hours online with a tablet over a week.
Ultimately, apps are a primary driver when choosing a tablet. As the iPad was ﬁrst to market it had ﬁrst mover advantage and now has over 275,000 apps to choose from. Conversely, Microsoft couldn’t list the Top 100 games at launch as there simply weren’t enough. In the UK, to help generate awareness of the capabilities of mobile phones and tablets, Samsung signed a product placement agreement with ITV’s X Factor for an undisclosed sum. The deal provided each contestant in the live shows with a phone and tablet along with further product placement in the Xtra Factor, giving the brand considerable exposure to the show’s young tech aware audience. Thanks to the proliferation of tablets into the Irish market combined with the fact tablets are consumed as a companion device to TV, there will be many opportunities for brands and advertisers in 2013. We believe the challenge will be how to eﬀectively reach their audience with relevant content while delivering on the brands business objectives.
The Outlook 35
In Q3 2012, the Communication Regulator auctioned oﬀ access to new mobile spectrums allowing for the rollout of LTE (Long Term Evolution) or 4th Generation devices. All four Irish telecoms operators successfully bid for access which collectively netted the exchequer €482m in up-front payments and €373m over the next 17 years. However, these upfront and long term costs do not include the cost to develop the required infrastructure. Eircom group, for example, is viewing 4G as part of a €1.5 billion investment in its network, which includes ﬁbre connectivity. 4th Generation connectivity will add an additional string to Ireland’s competitive bow and is a key element of the Government’s national broadband plan which is focused on the rollout of high-speed broadband services across Ireland. 4G services are already available across Europe in Germany, Spain, Italy and most recently Britain. 4G oﬀers mobile download speeds of up to 4 times that of existing 3G services and upload speeds improve by a factor 10. In fact the improvement will be so great that mobile devices will be capable of downloading content just as fast as a ﬁbre connection at home with speeds ranging from 40-50 MB.
The most obvious beneﬁt for the consumer will be the signiﬁcant improvements to connection speeds allowing high deﬁnition content to be streamed seamlessly, consistent streaming for music services, and easier access to larger ﬁles stored in the cloud and better national coverage. Brands will beneﬁt from being able to oﬀer consumers higher quality and a wider range of mobile content while encouraging deeper and longer engagement. Networks will be working hard and fast to develop their 4G infrastructure in order to oﬀer these new connection speeds to their customers, as one minimum target laid out by the regulator is for the networks to develop 70% of population coverage within 3 years. While there is only a limited number of 4G devices currently available on the market, such as the iPhone 5 and Samsung Galaxy S III, we expect this to change rapidly over the coming year as Europe develops its 4th Generation networks and manufacturers look to expand their product oﬀerings. The major implication of this means Irish brands should already be working on mobile optimized sites or risk losing out to competitors.
36 The Outlook
We believe there are some exciting changes coming down the line from the advancements being made in technology, most of which are revolving around portability while remaining constantly connected. Television is quickly becoming more than something to point furniture at. It’s progressing into a connected media hub to access our social networks, connect to our online services and video chat with family or friends, illustrating how single devices are becoming multi-capable. Eventually TV hardware will be capable of wirelessly connecting directly to mobile devices. By pairing these devices a consumer could be watching an ad on TV and instantly pull extended or additional content straight to their phone or tablet and make a purchase with the tap of a button without even having to take their credit card out of their pocket. We expect mobile will be king over the coming months and years. It’s the device we carry everywhere with us and engage with most often, and it’s already become far more than simply a phone. It’s a window to our online lives, access to unlimited information, a source of entertainment and could also quickly become our sole form of payment simplifying purchases. For brands, the key will be how to eﬀectively use these new technologies to create new and relevant ways for consumers to engage with their business and enhance their previous experiences. There’s no doubt technology will oﬀer new opportunities throughout 2013 and brands quick to recognise the potential will be those starting from a diﬀerent place.
The Outlook 37
CONOR MURPhY Managing Director Email:
(+353) 1 4211700