A cheerier
outlook for the second half
The economy may be lagging but advertisers are spending
By Diego Vasquez
Sep 2, 2010
Sure, there's been a lot of bad economic news lately, from the hiccupping housing market to the stalled unemployment rate, but from an advertising perspective things aren't so bad. Buyers say that despite the dour news the media economy is holding up. Advertisers have not pulled back their spending. Though consumers did not spend as much during the back-to-school season as some may have hoped, advertisers are continuing their efforts to reach out to them. Media buyers expect fourth quarter spending to be strong, especially among retailers, and they believe the recovery will continue in 2011. Digital and TV will remain the hottest media categories, with local radio possibly seeing better results in fourth quarter. But print will continue to lag. Carmen Graf, senior vice president and group media director at GSD&M's Idea City, talks to Media Life about second-half spending, 2011 spending, and why things still look pretty rosy.
Do you see the media economy's first-half spending surge continuing during the second half of the year?
Based on the clients we touch, we wholeheartedly believe fourth quarter will remain strong. We have a lot of retail brands at GSD&M Idea City and for many, fourth quarter is their top priority. They have to go into 2011 strong.
The good news is that they are coming off first half momentum, but they have aggressive sales goals and need to increase their market share – at the very least, maintain it.
We also know that the upfront marketplace was robust and that we will be facing increased political spending, so the marketplace will not be soft. All of this points to continued spending. It’s 2011 that will be the question.
Which categories (TV, online, radio, etc.) will be strongest in second half and why? Which categories will be weakest and why?
It’s a good question.
I would say strongest will be television at both the national and local level, and of course, the disruptive technologies – digital, mobile, social. We continue to see steady increases in search engine marketing. Our clients have ramped up email programs and direct mail efforts as well.
From a magazine perspective, it will be spotty and, I believe, will come down to specific titles. We are already seeing fall magazine titles thick with ads and they are pushing more integrated offerings – which is great. And we can’t forget all the holiday gift guides.
Also, our clients are beginning to embrace the potential of the tablet, although I am not sure how much of a presence we’ll see in fourth quarter in that space as creative lead times are longer.
Of course there are magazine titles that continue to struggle and see challenges, and local newspapers, which used to be a retail mainstay, continue to decline.
Usually we see an uptick in radio for fourth quarter, but I think the jury is out on that for this year. Much will depend on where the political advertisers spend. Some advertisers will go into local radio in lieu of TV just because of that.
Have you seen any signs of a slowdown in spending over the past month, as disappointing housing, unemployment and GDP numbers were released?
From an advertising point of view, we haven’t seen any spending cutbacks, despite consumers pulling back their spending in August.
Let’s face it, we have heard it was a tough back-to-school season across the board, so advertisers have to double down. While consumer spending isn’t trending as strongly as we all hoped for, it isn’t nearly as bleak as in recent years.
What do you foresee in terms of fourth-quarter spending by advertisers? Will they be spending heavily to lure in consumers, like last year, or will they be spooked into closing their coffers, like in 2008, when consumers snapped their own wallets shut?
Our feeling is that advertisers, particularly retailers, will be spending. But be sure they will be scrutinizing every dollar they invest.
My guess is that we will see more brand-tailing, more customized offers and likely bigger incentives as they try to conquest share from the competition. And we know consumers are researching more this year so we expect to see earlier holiday spending this year, at least in digital forms.
What sort of outlook do you have for media spending in 2011, both at a national and local level? Do you see the recovery continuing, lagging, or chugging along even stronger?
Oh, to have a crystal ball.
I think it is too early to say. That will depend on fourth quarter and end-of-year results.
My best guess is that if there were a decline, it would happen in second quarter. It makes sense because that is when advertisers can really affect their upfront buy. If this happens, then I would guess local would be the beneficiary to some of those dollars.
Based on my client conversations for 2011, however, clients remain hopeful and are full speed ahead for 2011.
Also, digital, mobile, social and one-to-one channels will continue to grow. If sales are good this season, they will continue the momentum. If they aren’t what they expected, they will spend to turn around share. But rest assured that they will spend differently and find other ways to create a more meaningful and engaged connection with their audience.
|
|
|
