Winner takes it all
05 July 2011
An expectation of budget increases, an envy of digital companies and the best pan-regional sales teams across international media are all revealed in the annual M&M Sales Team Benchmarking Survey for 2011
“Balancing your budget is like protecting your virtue. You have to learn when to say no,” former US president Ronald Reagan once said. As any politician handling the budget for one of the world’s premier economies will tell you, with more money comes great responsibility. It looks as though agencies may have to get used to hearing this maxim when advertisers hand over the keys to the vault this year.
Ever the optimists, 17% of advertisers and agency employees do not expect any platforms to see spend shrink in the next two years. For more cynical respondents, it seems traditional platforms are expected to suffer the brunt of any decline; 65% think print will fall by 2013 and that number rises to 69% when restricted to respondents with budgets of €7m ($10m) or more.
Agencies express a more positive outlook than their clients with 52% of agency personnel in M&M’s Sales Team Benchmarking Survey anticipating a rise in budgets for the year, as opposed to the 40% that expect no change. For advertisers, the picture is less clear with 43% expecting budgets to stay the same compared to the 33% that predict an increase. The other 24% foresee a fall.
Many print titles have prepared for this decline through renewed focus on cross-platform offerings. If there is a crumb of comfort for print, it is not the only traditional channel to fall. Radio (-29%), cinema (-16%), out-of-home (OOH) (-16%) and even TV (-25%) are expected to decline. Digital will be the chief benefactor because of its accountability. Research to prove return-on-investment (ROI) ranks most highly for 36% of advertisers and 37% of agencies.
Bloomberg Markets is deemed the best for print when it comes to accountability for those that had done business with them with around 45% of respondents rating its research and ability to prove ROI highly. The Economist is second with 35%, closely followed by Fortune and Harvard Business Review with 33% each. In OOH, Clear Channel triumphs in delivering the greatest ROI with 23% of respondents ranking it best. JCDecaux edges out CBS Outdoor to take second place. Last year’s multi-platform champ, Euronews, was crowned best among the TV channels in terms of ROI with 33%, rating it ahead of CNN (31%), CNBC (30%) and Discovery (30%).
Proprietary and syndicated audience research remain more important tools to agencies than advertisers. Both categories are rated as very important by agencies with syndicated research ranked 49% and proprietary research 34%. For the individual research offerings, EMS proves most valuable to media owners with 56% using it frequently, beating BE into second place with 18%. However, agencies find TGI Europa more useful – 58% of respondents use it frequently.
When looking to new platforms, advertisers and agencies are almost united – 40% of advertisers and 55% of agencies rate social as very important. Mobile apps receive almost as much recognition, with 38% of advertisers and 47% of agencies rank the channel very important in 2011. Online display follows closely with 31% of advertisers and 41% of agencies rating it very important.
Ignite’s Social Media Facebook Page Rankings for March show that the top 50 brands have more than 477.2 million fans, which explains the plight of micro-sites as they are rated at best as somewhat important by 45% of advertisers and 37% of agencies.
The fanfare that has heralded the iPad’s arrival and subsequent slew of tablet devices has been intense during the first half of 2011, with the devices dominating many technology shows. However, their impact is a divisive issue in the relationship between advertiser and agency in their priorities. The majority of advertisers (31%) classify the platform as being ‘very important’ over the next two years, compared to only 26% of agency respondents. Media owners, possibly seeing it as a revenue driver, are the most optimistic about tablets with 34% of them stating that it is ‘very important’.
Professionalism gives way
Professionalism is rated as the least important quality for advertisers with 45% placing it behind ROI, creativity and flexibility. This thinking also rings true for 55% of agencies overall, 45% of agencies in Europe and 58% in the rest of the world.
A flexible multi-platform approach is not far behind ROI as it ranks first for 31% of advertisers and 28% of agencies. MSN is deemed best of the online companies in this regard, achieving a top rating from a third of respondents to put it ahead of Yahoo (30%) and Google (27%).
In the world of print, Bloomberg Businessweek is king of multi-platform offerings with 55%, putting it ahead of The Economist’s 46% and Newsweek’s 41%. CNN is TV’s top player in this category with 56%. BBC World is placed second with 42% and Discovery third with 35%.
It also appears flexibility is a quality valued more by Europeans than the rest of the world. It ties for the most important concern in the EU with 33%, whereas it sits third elsewhere.
Branded content feeds direct business
Branded content continues to form a significant part of everyone’s strategy, according to around 80% of respondents. For media owners, this presents the opportunity to do more direct business – 55% of advertisers deal directly with media owners often, while 34% state they do direct business sometimes. Once again, the agency perception of this dynamic is quite different with only 13% believing that their clients do business directly with media owners often and a further 46% saying sometimes. However, media owners are less inclined to admit that this takes place with only 38% stating that they do business with brands often and 38% doing less direct business with advertisers.
The practice of direct business between the media owner and advertiser is more prevalent in the rest of the world than in Europe, 50% to 42%.
Although branded content’s overall significance is growing, it still falters when compared to traditional spots and banners. For 22% of agency respondents, branded content only registers as 5% of their overall work, compared to traditional’s 95% chunk. Traditional also still dominates for 75% of advertisers although they are now under pressure to give branded content a bigger role in their overall marketing mix.
In total, 27% of advertisers participating in the survey place branded content at 80% or higher of their media activity. Regionally, branded content accounts for a higher proportion of activity for the world outside Europe, as it makes up more than a quarter of all activity for 47% of respondents. This number falls to 36% in the UK and 23% in Europe.
The increase in direct business between advertiser and media owners would explain the importance of dedicated solutions teams to media owners charged with big budgets. Overall, creativity comes third in the list of priorities with 40% of advertisers ranking it second and 33% of agencies following suit. MTV leads in TV creativity with high recommendations from 54% to edge out both BBC World (42%) and last year’s number one, Discovery.
JCDecaux once again tops OOH in this category with 40%, Clear Channel is second (33%) and CBS Outdoor third (21%). MSN again rules the digital media owners with 43%, putting it 3% ahead of its closest competitor Yahoo. Free newspaper Metro International enjoys a healthy 12% advantage over its competitors in creativity, edging out The Economist, 43% to 31%.
How creativity will fare with advertisers’ pockets not running as deep as their agencies would prefer is anyone’s guess.
It is clear that agencies are hoping that the next 12 months will bring the opportunity to invest across the host of the industry’s newest platforms. The value of reaching the consumer across all the available touchscreen has been well documented by those that championed the era of ‘three screen’. As always though there is a word of warning, the harsh lessons learnt over the last few years with regards to ROI appear to have had a profound effect on advertisers. A return to old budgets is further away than anticipated.
TOP 5 COMPANIES TO ASPIRE TO...
01 Google (17%)
The US giant has proved particularly popular with agency personnel with budgets of €7m ($10m) or above. It could be down to the fact that Google employees are each deemed to be worth $336,297 to their company by tech analyst Pingdom. Or perhaps it’s the possibility of being poached by the world’s second most popular company…
02 Facebook (11%)
The lure of the world’s most popular social network is immediately obvious. It is estimated to have poached some 200 employees from Google, and that’s before it emerged that Facebook had hired a PR company to embark on a smear campaign destined to undermine its rival. But has it been successful? If the gap closes next year, then it would appear to be the case.
03 BBC World (6%)
This UK institution is always likely to prove popular among UK respondents, which has helped propel it above Fox One Stop Media and CNN International as the highest-placed TV station.
04 The Economist (5%)
The highest-rated print title for those still dreaming of snaring a high-flying future job has helped spearhead the launch of a digital ad network together with 30 other publishers. It also boasts an enviable list of key clients, which includes Philips, Rolex, Shell and Vodafone.
05 LinkedIn (4%)
The leading business-led social networking tool has been buoyed by its successful flotation on the NASDAQ. It has more than 100 million members and has now been valued at $8.9bn, despite sales seemingly hitting their peak at $243m.
Josh Colley, London