A 3.3% increase in advertising spend during 2017, to reach an overall spend of €915 million, is being forecast by Core Media, Ireland’s largest marketing communications group. This increase will mark the fourth consecutive year of growth in advertising investment levels in the Republic of Ireland and is in line with general economic growth.
The figures are contained in ‘Outlook 2017’, an annual document produced by Core Media which forecasts spend for the next 12 months across a variety of media, including Television, Radio, Print, Online, Sponsorship and Out-of-Home. The report also outlines the key developments and important issues that will impact the industry this year.
Some of the highlights contained in Core Media’s Outlook 2017 report are:
- Television advertising revenue to increase by 2.5% to €243 million
‘Live TV’- watching traditional television at the time of transmission – still represents the majority of consumption. While the resilience of live TV may come as a surprise, given the number of different viewing options now available, more than three quarters of video viewing is done on the TV set at home.
There is still a very high propensity to watch certain programmes live, such as sport, current affairs and one-off events, irrespective of the viewing device and these programmes tend to draw large audience.
Services like Amazon Prime and Netflix are seen as the biggest threat to traditional broadcasters, but perceptions often differ from the reality: 24% of homes in Ireland have a subscription to Netflix and 1% claim to subscribe to Amazon Prime (it only became available in Ireland last December). While subscription numbers are important, viewing time is the key metric. Data from Ipsos MRBI shows that, on average, these services only account for 3% of daily video consumption among all adults in Ireland. For adults aged 15-34, the number increases to 6%. To put this in perspective, the combined share of viewing of these services was equivalent to just half the viewing levels achieved by UTV Ireland in 2016 (among all adults).
Meanwhile, advertising around online video (also known as video-on-demand) will continue to see exponential growth of approximately 27% to €30 million, while cinema revenue is expected to increase by 4% to almost €8 million.
- Radio advertising spend predicted to drop by 3.5% to €123 million
Despite healthy levels of listening – 2.97 million adults listen every day for an average of 253 minutes in the Republic of Ireland – radio has long had to battle for its share of the advertising pie and took only 14% of advertising investment in 2016, down from 16% the previous year.
Radio’s future success is linked to how it embraces its ‘frenemy’ – digital. Other media are succeeding ahead of radio, which is, after all, the original home of native content with its trusted voice and presenter endorsement. More research from the industry is required to show radio’s effectiveness as an advertising medium in the digital age.
‘Streaming’ is growing in importance. IPSOS MRBI has reported that 67% of 18-34 year-olds in the Republic stream online audio on a regular basis with an average of 40 minutes listening time per session. Putting that into numbers, in the Republic, approximately 260,000 people stream music on Spotify every single day. That’s more than the combined reach of 98FM and Spin 103.8 and three quarters of the daily reach of 2FM (335,000).
At a macro level research in the UK and Ireland has shown that streaming affects listening to CDs and MP3 players more than radio. However, it is clear that we have now reached a tipping point with this new form of audio. For any youth targeted campaigns, streaming is a ‘must have’, delivering larger reach than many established radio stations.
- Print to experience 9.5% drop in revenue in 2017 to €138 million
2016 was a challenging year for print media, with revenue down by an estimated 9.4% in the Republic of Ireland. This trend is set to continue in 2017, with further decreases of 9.5% being forecast.
People must pay for news; therefore, paywalls of some kind are necessary. For any meaningful paywall to be effective it would have to be adopted by all news websites at the same time. As a small market, there is an opportunity here for Irish news organisations to set an example for other markets and demonstrate true innovation in their medium.
From the consumer’s perspective, the fee for access would need to be nominal (€5 per month or €50 per year). Once subscribed, access to all participating sites should be granted. 100% of the revenue generated by the paywall should go directly towards a journalism fund managed by trustees.
Based on an initial annual uptake of 10% of the adult population, the fund could generate more than €17 million in revenue.
- Online to see 13.5% increase in investment to €328 million
While investment in online media continues to outperform the market, growth is expected to slow slightly this year, with a 13.5% increase in investment in the Republic of Ireland. This compares to a 17% year on year increase in 2016.
‘Search’ and ‘display’ continue to fight for share of advertising investment. Search’s share of digital spend stands at 51%, but this has been eroding at a rate of one percentage point per annum for the past five years. It is likely to dip below 50% within two years. Display, with 38% share, is growing, because its role as a direct response-only channel is changing; it now has the scale to create mass market reach for brands.
The prevailing issue in social media is the fake news menace and the primary social news channels (Facebook and Twitter) are quite rightly being called to account. They must take a firm stance and exercise control over what is published on their platforms. A commitment to verification is absolutely required to win the confidence of the marketing industry. Advertisers are concerned: they do not want their content to be placed in spurious environments.
- Sponsorship investment to increase by 5% to €141 million
Core Media expects investment in sponsorship rights to increase by 5% from €134 million in 2016 to €141 million in 2017. This is driven by the wider appreciation of the role that sponsorship can play within the marketing mix.
Competition breeds fresh thinking and this was evident in the use of virtual reality (VR), augmented reality (AR) and the continued growth of advertiser funded programming (AFP) as ways to activate sponsorship. Overall, greater competition and investment in data resources will serve to provide heightened experiences for fans and therefore stronger measurable commercial return to sponsors in 2017.
A growing mistrust of the sports industry, amid doping and corruption scandals, will put greater responsibility on sponsors in 2017. All too often, sponsors have remained silent amid controversy. This low-risk approach rarely,
if ever, delivers a benefit to the sponsor. In 2016, Speedo swiftly axed US swimmer Ryan Lochte after the Olympic medallist’s improper conduct at the Rio Games. The swimwear manufacturer said Lochte’s conduct ran ‘counter to the values this brand has long stood for.’ As part of the decision, Speedo donated $50,000 of Lochte’s fee to a charity partner. This action clearly defined the integrity of the brand and served to enhance its image during a controversy that could have damaged it.
- Out Of Home investment to rise by 4% to €75 million
After a good 2016, this year will be another positive one for Out of Home, with revenue growth of 4% forecast for the Republic of Ireland in 2017.
With additional capacity due on many public transport vehicles, this will further grow the audience for potential advertisers and benefit all main OOH formats. With increasing audiences, new formats and additional opportunities for advertisers, 2017 should be approached positively for all involved in the OOH sector.
In many European cities, large format digital roadside opportunities are being fully embraced by local authorities, commuters and advertisers. Digital roadside screens are generally developed through public/private partnerships between local authorities and OOH owners to deliver visually impressive sites with communications rotated between advertising and public information (traffic or weather updates, safety messages, road closures, etc.).
Properly managed, such partnerships are a win-win scenario for all involved, including motorists, cyclists and pedestrians. We have already witnessed the success of the commercial and public world coming together in the joint partnership that brought about the highly successful dublinbikes scheme (JCDecaux and Dublin City Council).
Despite representations from various OOH owners, local authorities in the Republic of Ireland appear slow to accept the inevitable. As a result, we are still waiting for the introduction of large digital roadside panels.
Commenting on the Outlook 2017 report, Alan Cox, CEO of Core Media, says:
“We expect 2017 to build on the growth of 2016, meaning a fourth year of consecutive growth in advertising investment levels in the Republic of Ireland. This is in line with general economic growth and is good news for the industry. Technology is continuing to play a key role in the media world and is transforming a world occupied by a fascinating triumvirate – the marketer, the consumer and the media owner. Understanding this evolving dynamic has never been more interesting or challenging.
Despite all the change that our global industry has experienced over the years, it is also important to remember that the fundamental role of an agency has not altered. Our creative purpose has always been, and always will be, to win the battle for cultural relevancy – to connect brands with people in a meaningful way, in order to build market share for our clients.
When placed at the heart of an organisation, creativity can become the most valuable, potent commercial asset a business can possess. Creativity, at its very best, can defy logic, transcend strategy and transform the fortunes of businesses. Overall, the implication for senior marketers is to think wider than traditional communications and seek out the right talent mix to maximise the impact of creativity.”
Core Media consists of nine individual agencies – Mediavest, Mediaworks, Starcom, ZenithOptimedia, Core Knowledge, Engage Communications, Livewire, Ignite and Radical. The company has been voted Agency Network of the Year for the last four years at the Media Awards and the company was also voted one of the top three workplaces in Ireland by the Great Place to Work Institute for the last four years.
If you would like a full copy of the report, please email email@example.com or call 01 522 5200
For further details, please check out www.coremedia.ie