2013 was a year media companies were happy to have behind them. Fitful at best, most saw their revenues stall or decline. It was particularly so with Seattle media; by year end, ad spending was off 5.8% from 2012 with the most significant losses in, of all media, local spot television.
One could almost hear the collective sigh when 2014 Q1 national numbers were released by Kantar Media Intelligence; U.S. ad spending was up a noteworthy 5.7%, reflecting a strong quarter for sports advertising, early election dollars and a jump in TV ad pricing. Even if you remove the boost to (mostly) television from the Sochi Winter Olympics, and the accelerating pace of digital spending fueled by mobile and video, the national results are in the positive column. Still, no one is jumping on the rosy media-future bandwagon just yet; most feel the U.S. economy still is on a slow recovery path that will continue through the remainder of the year.
What’s Up In Seattle?
Kantar-measured* major media in Seattle saw a Q1 spend uptick of 3.9% year-over-year, boosted in no small part by the Seahawks run to the Super Bowl. While behind national trends, no hand wringing is necessary quite yet; Seattle’s economy fared better than the nation’s during the recession and therefore doesn’t have as far to climb back. But the market’s still missing more than 30% from pre-recession Q1 figures, with only a fraction of that migrating to newer digital media, so you can see why the party hats remain in storage.
Seattle Online Display Advertising Spend
Continues at Record Pace
Despite the clangor of the death knell in the industry press, online display advertising remains strong in the market. In fact, according to Borrell and Associates, investment in display online here outpaces the nation by more than 10 percentage points. No surprise then that Seattle display ad spending on media websites for the first quarter soared 55%, hitting a record high for a first quarter. Still a small piece of the total media pie, that follows a 63% growth pace set for the full year 2013. Kantar attributes much of the digital gains to increases in Insurance and Real Estate advertising.
While ad-network, search, social, mobile and video spend are not included in these figures, the considerable interest and investment in those channels, especially the last two as noted in our recent post, certainly will add fuel to the digital pace this year. (insert device graphic) With desk- and laptop computer penetration at near saturation in the market, and smartphone and tablet ownership headed in the same direction, digital obviously has made the full migration from “new” media for the technologically savvy to a mainstream “traditional” media channel and lifestyle choice.
TV Still Tops
After a lackluster 2013, Seattle broadcast TV also outpaced the national gains with a 12.8% lift, driven mostly by Life and Medical Insurance, Telecom, and Cable and Satellite Provider advertising. With the exception of a few strong performers, other media were off pace YOY. Local radio bucked the 4.7% national slide, declining only 1.7%, and Outdoor, which was up nationally, was off 3.8%. Local magazines and weekly newspapers took the biggest hit, with spending down 20.4% and 17.5% respectively. The Seattle Times was up 3.7% but losses at the other regional daily newspapers resulted in a combined decline of 4.2% for the quarter.
The Seattle Media Pie
As noted, Kantar Media Intelligence measures ad spend in the major media companies in the market and the display advertising on their websites. This includes seven broadcast TV stations, three daily newspapers, 20 weekly newspapers, 26 radio stations, four local magazines, the display advertising of 30 media websites and local out-of-home media. Local cable TV is not measured by Kantar due to digital fragmentation — with more than 20 zone options — and the difficulty in obtaining accurate data. Neither is cinema, direct mail, directories or telemarketing, which collectively account for less than 20% of total ad spend. Also missing is social-media ad spending. Social, once the source of traditional media and website advertising losses, is seeing some defection of its own from marketers who used it as a sales-generating medium. Recent studies by Gallup and Nielsen have found a significant majority of people saying that social-media platforms like Facebook and Twitter have little influence on purchasing decisions.
Traditional advertising platforms (including digital display), therefore, remain the primary workhorses for the delivery of marketing messages thanks to their ability to reach the masses and influence positive business outcomes. Even with the multitude and ever-changing landscape of media placement options, in Seattle, television, daily newspapers and radio companies and their websites attract the lion’s share of measured ad dollars.
The Seattle Times Dominates
Daily newspapers and their online properties garnered 27% of ad spend and The Seattle Times remains the overall media leader for total ad-dollar investment, pulling in 83% of the spend for the three measured metro dailies, and 22% of measured ad spend overall.
Will the media investment uptick hold? So far, Q2 appears to be trending up year-over-year but many challenges remain as marketers continue to experiment in an effort to influence the bottom line. Healthy again or not, indications are that media life will be anything but business as usual.
What do you think? Are Q1 results a healthy bump or are you ready to declare that the media economy is well again?
* Kantar Media Intelligence measures the major media properties in the greater Seattle market that account for the bulk of ad spending and provides total-spending estimates based on media rate cards with adjustments for market factors. All data should therefore be used directionally.
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