outlook 2014 final

What’s in store forIrish Media in 2014?

Connec�ons that Count

CONOR MURPHYManaging DirectorEmail: [email protected]

Tel: (+353) 1 4211700

Web: www.vizeum.ie

Follow us: @vizeumireland


Introduction


There is a general sense amongst consumers and the business community that the Irish economy is improving. Cautious optimism is probably the most appropriate sentiment post the “bailout” programme. Kick-starting the revival was the country’s emergence from recession in quarter two of 2013, with 0.4% growth in GDP. This continued in quarter three (1.5%) and expectations are that the economy will have expanded by 0.3% for the full year. Resulting from this growth, the economic outlook is the most positive it has been since 2008 and in fact we are seeing the strongest levels of growth since 2007.

Although the emergence from recession is positive and important for the nation’s morale, we are still faced with significant challenges going forward. Unemployment has been slowly, yet steadily declining and now stands at 12.4%. While the year-end position exceeded most analysts’ predictions, it is still concerning that the number of youth unemployed stands at over 25%. Similarly, the fact that house prices rose nationally by 6.4% is good news. However, this is being driven largely by a lack of supply in Dublin which has seen house prices in the capital jump by 15.7%. There’s no fear of a bubble as credit needs to be freely available for that to occur, but the price increases are being achieved off a very low number of house completions. The retail sector is still under pressure but it is lifting slightly. The latest Retail Sales Index shows that volume was up 3% and value increased 1.1% year on year.

The year finished on a very positive note with the exit from the “bailout” programme on December 15th. The markets responded very favourably, demonstrated by the sale of new benchmark 10 year bonds at a yield of 3.54% in early January 2014. This was closely followed by Moody’s credit rating review which resulted in an upgrading of Ireland’s rating to investment grade.

Consumer sentiment is at its highest level since June 2007. There is an ever increasing sense amongst consumers that the negative impact of austerity on household finances is largely finished. The hope is that this sentiment will help improve domestic demand and encourage spending.

We have certainly come a long way since September 2008, and 2014 should see Ireland continue to reap the benefits from a very tough few years. Estimates vary, but most analysts are predicting GDP to grow in the region of 2% for the coming 12 month period. Along with Germany, we are the only two countries in the EU that will see a significant improvement in growth. Whilst this growth is heavily export driven and relies on the performance of our export markets, the signs are positive for the likes of the US and UK.

On the back of an improved Irish economic outlook, I’m cautiously optimistic that 2014 will see 3% growth in the overall advertising market. Unsurprisingly digital will contribute significantly to the overall growth number, but I also anticipate TV and out of home will see positive numbers year on year. Radio will be down marginally and while press will see the largest decrease in revenues the positive signs are that the rate of decline is slowing greatly. In this document we have outlined the upcoming trends across the various media as well as the reasons behind the revenue numbers. I hope you find it both insightful and useful.

Best wishes for the year ahead.

1The Outlook

Conor Murphy, Managing Director, Vizeum Ireland

Television 194 198 2%Print 175 165 -6%Radio 86 84 -2%Digital 174 201 15%OOH 54 55 2%Cinema 7 7 0%Mobile 1.5 3 100%

Total 692 712 3%

€M 2013 2014 2014 (growth)

3 Contents

5 Social Media

9 Digital Display

13 Television17 Radio

21 Press25 Mobile

29 Cinema

33 Outdoor

5 SocialMedia


6The Outlook

Take a breath!2013 was a year of frantic growth for social media. Pope Francis joined Twitter, the introduction of Vine opened the floodgates for bitesized video content and One Direction broke teenage girls’ hearts globally with the click of a “selfie”. Not to mention Beyonce opting for Instagram instead of a press release to launch her new album or astronaut Karen Nyberg taking Pinterest to space. It is safe to say that we have now departed from the “information age” and have moved gracefully into what can only be described as the “social age”.

This has given a platform for self-expression never seen before. Where people are creating social profiles to form an ideal portrait of themselves; from choosing their most flattering pictures, to crafting witty status updates and commentary and, most importantly, deciding what filter to use when taking pictures of their morning coffees.

The rise of smart phone penetration and usage in Ireland has given the big players in social media such as Facebook and Twitter some healthy competition. The emergence of platforms such as Snapchat, Instagram, Whatsapp and most recently Jelly, provide new areas for users to express themselves. 2013 saw Facebook announce for the first time a decrease in its 15-24 user base and an increase in the 55+ category. It has been argued that this reduction is due to the fear of parent friending, but could this just be a sign that the leaders of the social age are shifting the behavior in how and where they consume social media?

Content is becoming bite-size, conversations are happening in real time and loyalty to platforms fleeting. We are seeing broad reaching social networks such as Facebook turning into the modern day rolodex. Facebook is a mass social platform; this is its strength and weakness. We can speak to vast numbers of people, but concerns around privacy means that when we want to engage or create, we will start to utilize other platforms. Then leverage the power of Facebook purely to push out content. In order for brands to take advantage of this phenomenon, an understanding of platforms and how all technologies converge together is essential. The importance of social media is mirrored by the investment made in it from advertisers. €15m was spent on social advertising alone in 2013. This does not take into account the financial investment brands are making towards platform management and content generation. We predict that the social ad spend will increase by a further 13% to €17m. Facebook, Twitter and Youtube will remain dominant, but smaller platforms will become integral to overall communications.


7The Outlook

That old saying... content is...

Content marketing has already become a central area of our social strategies. Brands are looking to create content that is not only relevant, but timely, shareable and of value to their consumers. Publishers such as journal.ie were quick to introduce the native ad as part of their advertising suite, with joe.ie and entertainment.ie quick to follow suit. The challenge to advertisers in 2014 is how to create this content on an ongoing basis whilst remaining relevant and not getting caught in editorial overload. The age of snackable content is upon us, and 2014 will see advertisers making use of short form content platforms to engage with their target audiences. Our biggest tip for 2014 is to think mobile first and ensure everything you create is optimised for this medium.

Nothing in this life is free

The end of December saw a decline in organic reach for brands on Facebook, with reports suggesting this could be as low as 2% of a fanbase. 2014 will see social media channels start to charge brands for using their platforms through paid for reach. If a brand wants to distribute a message to its fans, paid advertising will be the only avenue. Twitter and Facebook already allow for native “in-feed” advertising options via page post ads and promoted tweets. More recently, Pinterest has been trialing promoted pins with selected advertisers.

This allows businesses to insert pins into relevant search results and category feeds, thereby boosting the e-commerce potential of this social network. This will become commonplace in 2014 with Instagram and Google+ set to follow suit. Brands and advertisers will have to realize that reaching an audience on social media comes with a price just like any other online or traditional channel.

Value of the fan

Brands will have to re-evaluate the value of a fan or follower. Instead of looking at them as an audience to disseminate their brand message for potential reach, they now need to look at the information which fans and followers can provide. A person that has liked a brand profile has already opted into the brand and has the potential to become a customer if they are not one already. This fan or follower provides the brand information about their interests, behaviors and values. We can then use this information as a means of finding new fans with similar behaviors in the form of lookalike modelling. 2014 will see social channels being used far more for the strengths they can bring to a direct response campaign and their role in attribution.

an understanding of platforms and how all technologies converge is essential

“”


8The Outlook

Use of social media big data for tactical narrowcasting

The information and clusters of people that brands build on their social platforms, along with all the information that a user provides when signing up to such platforms gives brands the ability to tailor messages to the values, interests and needs of the group. Brands will start to target fewer individuals but the individuals will be significantly more qualified. Content combined with context is an extremely powerful concoction and such strategies will be implemented with increased frequency in 2014.

The rise in fragmented approach to social media

We cannot talk about social media in 2013 without giving the appropriate nod to Snapchat and the way it has altered behavior. Snapchat has been referred to as an ephemeral social network; where content disappears seconds after it has been received. The explosion of this network, especially with millenials, has only highlighted the appetite for such a platform. Platforms such as Snapchat and Vine have brought spontaneity and fun back to the realm of social media. As much as we could not say this time last year that a looping 6 second video platform (Vine) would change the social media landscape last year, we cannot predict what’s next for 2014. Although we’re very much excited to see what happens.

9 DigitalDisplay


10The Outlook

Continued growth across the digital spectrum

Vizeum predicted double digit growth of 15% increase in 2013 and our estimate was right on the money. We anticipate the same level of growth for 2014, with investment across the digital spectrum reaching an all-time high of €201m. Search will continue to take the lion’s share of digital budgets and we expect this to continue with a 10% increase in 2014. Mobile will see the biggest percentage increase but as a platform still has a lot more potential for taking larger shares of digital budgets (discussed in greater detail on pages 25-28). We expect Rich Media and Video formats to increase by approx. 25% as branding formats move from just awareness drivers to engagement platforms. Spend on social media will also increase by 13% caused mainly by the fact that brands are having to invest more in Facebook advertising due to continuous declines in organic reach.

The hot topics in 2013 were again centered on performance marketing; with jargon like RTB, trading desk, programmatic buying, attribution etc. being mentioned as agencies adapted to opportunities this buying model presents. The Aegis Group’s partner trading desk AMNET, which was launched in 2013, continued to deliver excellent results and we expect to see further progression in 2014. With regard to branding

campaigns, the previous 12 months saw a dramatic increase in digital partnerships at the expense of traditional display advertising. Digital campaigns are becoming more integrated as we utilize and harness the assets available from Irish and International Suppliers.

Integration & digital partnerships

Irish suppliers have taken to ‘Native’ advertising like a duck to water; offering integrated digital partnerships. This has resulted in opportunities for advertisers to connect, inform and engage with consumers beyond the traditional MPU and Leaderboard formats. Collaboration between Publishers and agencies is at an all-time high with additional ‘Native’ advertising opportunities being developed to give brands more versatile and integrated campaigns.

‘Native’ advertising was definitely the buzz word of 2013 and we predict it will be sticking around for 2014. It can often be confusing as to what ‘Native’ advertising actually is but the IAB Native Advertising Playbook (published December 2013) has helped to clarify this confusion. According to the IAB, Native ads are ‘paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong’. They have broken it out into six categories; In-feed units, paid search, recommendation widgets, promoted listings, in - ad with native element units and custom/‘can’t be contained’ formats. In-feed units via social platforms (discussed in more detail in the Social section) and on websites such as Joe.ie, Journal.ie, etc. has seen the largest growth with our clients. This sponsored content has become an integral part of campaigns as we adopt a pull rather than push strategy for our clients. 2014 will see a move to more bite-size content with long articles becoming a thing of the past. Sponsored Content will also become more visual with imagery, animated gifs and video supplementing this entertaining content.

Performance display continues to go from strength to strength

The Aegis Group’s partner trading desk AMNET Ireland was launched in 2013. To date it has been achieving significant improvement in performance for our clients. We believe that having an Irish operating desk is really important for both our clients and for the Irish media industry. Performance digital is an increasingly large percentage of media budgets and to date much of that revenue is flowing to overseas publishers and exchanges due to a lack of available programmatic inventory locally.

Our aim is to divert more programmatic revenue to Irish publishers who can deliver a more relevant environment to our consumers and therefore better engagement and improved business results. Trading desks can open up a world of additional inventory from infinite sources, some of which can be very cheap. However, it is important to focus not on delivering cheap inventory but on improving business results for our clients through highly optimised targeting and re-targeting. To date we have concluded seven exclusive private marketplace (PMP) deals with premium Irish publishers which will allow us to deliver premium positioning in a fully optimised way.

Improving conversions

Retargeting continues to be the most efficient tactic for Performance Display. However, it is limited in scale as it is dependent on actual visitors to a site and then being

able to find them across the web. In 2013, we saw the emergence of new display tactics to reach this intended audience with the launch of Google Search Retargeting, Facebook Retargeting and Custom Audiences. In 2014, we expect all of these tactics will be improved upon and more widely used across the industry. Further emphasis will be drawn to displaying the most relevant message with much evidence that it will improve conversion rate. Dynamic retargeting will allow an advertiser to serve personalized messages to potential customers based on what product or service they have viewed on an advertiser’s site. Dynamic retargeting has become more accessible for advertisers with more providers, better quality creative and lower fees.


11The Outlook

Digital campaigns are becoming more integrated as we utilize and harness the assets available from Irish and International suppliers

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12The Outlook

Understanding what’s driving results

Attribution modelling will give us a better understanding of campaign performance and aid the pursuit for efficiency. It is the method in which we give credit to a particular channel or tactic for driving a conversion. The default setting for most advertisers is the Last Click Model which has been widely criticised for only taking into account the final touch and disregarding any previous interaction in driving a sale. Attribution modelling has been available in Doubleclick for Advertisers (DFA) for over a year now. In that time, it has helped us understand how different tactics play a part throughout the purchase journey in driving a conversion. Although we don’t expect the industry to abandon the Last Click Model, we do foresee that planners will take into consideration other models and assisted conversions, allocating budget accordingly and in turn improving campaign performance. Attribution has also highlighted excessively long paths-to-conversions. This is due to duplicated inventory across networks increasing the number of times a user sees a message. In the drive for efficiencies, campaigns will become more streamlined by consolidating buys and moving towards a single platform as well as managing frequency by applying a universal frequency cap to help reduce wasted impressions.

Where impressions are delivered

Finally another area that we feel will be more prevalent than ever is the topic of the ‘viewability’ of impressions. This is often linked to inventory bought via trading desks, however many Irish publishers are creating and selling ad placements below the fold which is an issue that will need to be tackled. ‘Viewability’ verification tools such as Comcore vCE, Alenty, Double Verify and Google Active View will be used progressively in 2014 for branding and performance campaigns. Comscore vCE does have a unique selling point on the other tools as it can actually verify that the inventory bought is profiling above the norms for the target audience of a particular campaign. Viewability data does need to be regarded with caution however as it is purely PC traffic and Comscore excludes all traffic on Chrome and Safari. It is also important to note that there are no Irish benchmarks, so while it offers some interesting insights, it is some way off playing a leading role in the trading / buying process.

13 Television


14The Outlook

TV remains a potent force for viewers and advertisers

TV viewership experienced a slight decline in 2013 on the previous 12 months. The average minutes spent viewing was 208 which is a decrease of 3.3% on an all adult basis versus 2012. While variances exist by audience, it is the younger demographics that are watching less and less traditional TV formats than previous years (adult 15-34 consumption is down 6.6% on 2012). There are a number of factors driving this like the availability of content across platforms and devices being the obvious one. But it’s also important to note that there was no major sporting event in 2013 and Ireland experienced a long hot summer which kept people out of home a lot.

Despite this, TV is still a mass reach, highly consumed medium. Commercial impacts were helped in large part because of new supply from More 4 and Sky sales which countered the fall in terrestrial impacts post the DSO. 2014 will see even more channels roll out Irish ads. Channel 4 Ireland launched in January, while Sky have announced a further five opt-outs across the year. This

added inventory, while assisting in the delivery of reach, will help keep costs down for advertisers.

Similarly to the availability of advertising inventory, consumers have never had as much content to view and the means to view it. 47% of TV homes are now Sky subscribers, 25% are with UPC and eircom recently launched their TV service giving the consumer greater choice and access to content. PVR’s have now become mainstream with 54% of TV households having access to the technology. The good news for advertisers is that “live TV” remains dominant. We are not seeing a sizeable shift in viewing habits despite the rapid growth of digital homes in recent years.

% Live ViewingAge 2011 2012 2013

Ads 15+ 96.4% 94.9% 94.5%Ads 15-34 94.6% 92.1% 92.0%

The good news for advertisers is that “live TV” remains dominant“

”

The commercial marketplace

TV revenue’s fell by approximately 4%-5% in 2013 and is now standing at €194m. Advertisers continued to move share from RTE and the lack of a major sporting event were contributing factors in the decrease in revenues. The growth of online video has also had an impact. The video on demand market, although relatively small, grew by 16% in 2013 and is set to increase by a further 20% in 2014.

We are predicting revenue growth for traditional TV in the region of 2% for the coming year, which is a positive sign for the advertising industry as a whole. The seeds for this were sewn in 2013 with the number of advertisers using TV increasing slightly on the previous year. We also witnessed strong growth across sectors such as financials, supermarkets and telecoms. We anticipate an increase in revenues for the retail sector on the back of an improving economy, a reduction in unemployment as well as the continuing improvement in consumer confidence.


15The Outlook

100%

90%

80%

70%75%

87%90%

% Digital Homes

2011 2012 2013

We expect TV viewing to remain largely static in 2014, if not increase slightly. Needless to say content is paramount for attracting audiences and with the continued influx of UK stations and international programming, local broadcasters are responding by producing uniquely Irish content. This is not only positive for Irish audiences, but imperative for the likes of RTE and TV3 to maintain share. While we do expect to see audiences continue to move away from terrestrial stations, it will be at a slower pace than previous years due to this investment in Irish content.


16The Outlook

AV viewing continues to evolve

Irish audiences still strive to watch strong content. Screen based consumption has evolved as a direct result of technology and convergent behaviour amongst viewers. Convenience and control are becoming more and more important. Smartphone penetration improved broadband speeds and 4G have given the viewer greater flexibility to watch content at a time and place that is convenient to them. Netflix subscribers have now surpassed 150,000, whilst the broadcast players, UPC horizon and Sky Go have increased viewing through mobile devices. It’s no surprise that the profile of those utilising these platforms and viewing content through their tablet, laptop and mobile is younger than linear TV. And while this can create complexity, it does provide opportunities to deliver incremental reach to those audiences who are watching less live TV. Furthermore media meshing has given rise to TV companion apps such as Showpal and Shazam. Advertisers have the ability to offer a more engaged experience for the consumer as well as maximising the value of the TV ad

17 Radio


18The Outlook

An ongoing love affair…

We all love the radio... It’s a vital part of how we live our lives, remain up-to-date and keep ourselves entertained. Despite ongoing media fragmentation and the continued digitization of the world around us, 83% of Irish adults still tune into the radio every day (versus 87% ten years ago – a really strong figure considering the changes to media consumption that we’ve all experienced over the last decade). Like a lot of other media channels, radio has experienced the same shift in balance between media owner and consumers and the evolution of radio has placed more and more power in the hands of the listener. Radio is no longer about radio stations; it’s about continuous entertainment platforms. All of the main radio players offer their listeners access to their products no matter where they are. Mobile technology means that we can consume radio wherever we are, podcasts allow us to be in control of content, while text lines, email addresses and Twitter allow us to communicate with DJ’s and shows whenever we choose.

RTE Radio 1 is still the most listened to radio station in the country with 861,000 people tuning in each day. The dominance of RTE Radio 1 is such that it nearly has double the number of daily listeners as the 2nd placed station in the market, Today FM (457,000 daily listeners). However, when we look at younger, under 45 audiences, then the strength of Today FM becomes more evident; Today FM have 342,000 15-44 listeners which is nearly 60% more than Radio 1 and more than double that of Newstalk.

Personalities matter

Who we choose to listen to is as important to us as the stations that they broadcast on and 2014 should provide some interesting developments within the radio market. Newstalk’s coup in bringing Pat Kenny away from RTE last summer was probably the biggest talking point within the radio industry for years. The switch has really put Newstalk on the map for a lot of people that didn’t tune into the station and long-term expectations for the show are very high. Newstalk are also going to be looking for a replacement for their drive time presenter George Hook soon as he has signaled his intention to retire in early 2015. 2FM are currently reworking their schedule and expectations will be high that the station regains some of the ground that it has lost with younger demographics over the last 10 years. 2FM’s breakfast show hasn’t been working effectively since Ryan Tubridy moved to RTE 1 in 2005 and getting this right is the first step in putting the brand back on the map for younger listeners. Today FM has been doing some interesting deals with artists in order to get proprietary access to content. The station had exclusive rights to new albums by David Bowie in 2013 and Bruce Springsteen in January of this year. This type of promotion gives listeners and fans a compelling reason to tune into the radio stations and helps differentiate it from its competitors. A lot of this content is pushed out through social media platforms as well which really helps the station gain momentum through word of mouth.

The strength of established radio personalities gives many radio stations a distinct advantage in creating cross platform advertising solutions for clients. Taking a well known radio personality and hosting an Outside Broadcast in a client’s store, branch or other location allows for a really participatory experience for listeners and consumers on-the-ground. This works really well when social media elements are used to help amplify the event. This type of activity is something that only indigenous radio brands can undertake. Global music sites like Spotify or Dailymotion may offer listeners customisation and control of their listening experience, however they cannot put a well known face on the high street for a brand’s benefit like most of the stations on the Irish dial.

Dublin still a battlegroundLocal stations continue to battle it out within their franchise areas. Dublin is the most competitive region and whilst RTE Radio 1 has the largest reach in Dublin mainly due to its older profile, it is really FM104 that continues to dominate the u35 sector with 207,000 daily listeners. Spin 103.8 also performs well for 15-24s and these two stations can be used solely to reach under 35s in an efficient manner for advertisers. 98FM continues to lack direction and listenership continues to decline. Ray Foley’s move to the breakfast slot from 2012 has not reinvigorated the station (FM104 still has nearly three times the audience during the 06.00-10.00 time slot). Newstalk’s Dublin provenance helps them punch above their weight in this region and their 122,000 daily listeners puts them 58% ahead of their Communicorp stalemate Today FM in the capital.


19The Outlook

83% of Irish adults still tune into the radio every day“ ”


20The Outlook

Advertisers continue to see radio as an important part of their overall communications mix. Vizeum estimates put the value of radio advertising in Ireland last year at €86 million. For 2014, we predict a 2% decrease in the overall market worth. This is actually a positive indicator as the industry had been seeing double digit year on year declines throughout the recession years. The new youth sales entity, Media Central, should hopefully provide a more 360° approach to radio sales both online and offline.

We predict that 2014 will remain a tough market for radio stations. The drive towards innovation and content will continue and we’re sure that there will be some more big name moves within the sector to keep us all interested. The push towards a more competitive market sector will benefit the listeners and we are certain that radio will continue to remain a potent communications platform for brands and advertisers for years to come.

21 Press


22The Outlook

Ongoing challenges

2013 proved yet another difficult year for the press sector. ABC data for Jan – June showed that the downward trend of newspaper sales has continued with dailies down 6.4% and Sunday titles falling by 7%. JNRS figures show that overall readership has fallen from 91.4% in 2004 to 80.6% last year. As a medium for advertisers, the sector has also had it tough. We estimate that the volume of advertising within the sector has halved over the last 5 years from €314m in 2009 to approx €165m by the end of this year.

Whilst all the major publications operating in the Irish market have embraced digital platforms and offer readers quality content and opinion both on and offline, the sheer volume of information available to consumers via digital media outlets continues to vastly outweigh those of the indigenous Irish press industry. It’s not just in Ireland that the press sector is struggling; newspaper proprietors in the UK, US, France and Germany are also facing the same struggle to move forward into a digitally led world whilst retaining actual paid for sales on a daily basis. The monetisation of online content hasn’t been cracked properly by anyone and paywalls are still largely rejected by most readers of broad content; is only in more niche areas that people seem willing to pay for some content.

We’re still reading

In Ireland our loyalty to newspapers however should not be underestimated. As a medium, it is still one of the few (like cinema) that consumers will actively purchase and this speaks volumes of the loyalty that many people still have to their daily newspaper. Growth within the sector is coming from online sources only. Traffic to newspaper websites (that do not charge for content) continues to grow with Independent News & Media leading the way with over one million unique visitors per month. Most journalists are using social media to promote their columns and themselves – Fionnan Sheahan has 15k Twitter followers and Fintan O’Toole has nearly 29k. This helps push online users towards specific content within newspapers’ websites but it also demonstrates how we can survive without buying an actual printed newspaper. Therefore it’s important that publishers manage this promotion of content so as not to cannibalize their base. If anything it highlights the need for complementary, yet differentiated content across the two platforms.

Newspapers can still shape the agenda for the nation. The Irish Independent’s expose on the Anglo Tapes showed that in 2013. However, these types of news events are proving to be the exception rather than the norm for the category. People still strive for news and content, whether that is economic, sports or celebrity based. However, increasingly the newspaper is unable to move fast enough to supply information at the speed that we now all move. Other key categories that were once the sole preserve of the press industry such as property and recruitment have moved online and arguably a brand like LinkedIn represent a much stronger threat to the sector’s recruitment revenues than any elements within the actual market itself.

Continued investment

Advertisers from certain categories are continuing to see the benefits of press and as such, similar to readers, are remaining loyal. On any given day of the week you will find retailers, motor distributors and financial institutions battling for prominence within the early pages of all the popular broadsheets. Similarly, within the redtop titles the battle is being fought amongst mobile phone companies, clothing manufacturers and drinks companies. All these advertisers recognise the importance of press when trying to reach certain demographics and continue to use press across most campaigns. The Newspaper category has actually been one of the most successful sectors at developing online / offline sales platforms. Most clients are happy to buy display ads within the pages of a newspaper and on their corresponding website. This cross-selling of content has come more easily to the press sector than other categories such as radio or TV. However, including digital inventory as part of a sales opportunity to clients, the press sector will have to be careful to ensure that there is still a compelling reason for readers to buy newspapers and not just avail of information online at no cost.


23The Outlook

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The Newspaper category has actually been one of the most successful sectors at developing online/offline sales platforms


24The Outlook

We believe that press continues to be an important medium for reaching many key demographics. It offers loyalty, engaging content and high dwell times in an otherwise busy world. Whilst there will continue to be declines in the overall revenue figures, it will soften greatly in 2014 (-5%) versus the previous year (-14%).

25 Mobile


26The Outlook

Finally…

If 2012 was the year of the mobile, 2013 was the year where the advertising and media industry made significant strides to catch-up. Unsurprisingly this is being driven by the continued rise in smartphone penetration. While we await the latest release of figures following the Christmas period, Google reported smartphone penetration to be 57% in July. 67% of these users access the internet every day from their smartphones.

Resulting from this is a continued evolution of how consumers use and interact with their mobiles. As Vizeum predicted 12 months ago, 2013 was the year where search activity on mobile finally overtook desktop devices. Irish publishers have also experienced a notable increase in mobile traffic, with the majority stating they receive +50% of their traffic from mobile devices. This growing trend is being driven by accessibility and improvements in technology. Major telecoms providers are making smartphone devices more accessible to consumers through very competitive data packages, while fibre and 4G technology has greatly improved connection speeds and quality.

In response to this, websites such as Joe.ie, Her.ie and The Irish Times have introduced responsive design websites. Ecommerce sites such as Donedeal, Carzone and Ticketmaster launched apps that enable seamless buying experiences and social giant Facebook opened up its newsfeed to allow for greater engagement with brands through mobile.

Promisingly we are starting to see a more streamlined approach to mobile advertising creative as publishers implement IAB mobile standard formats. This, together with the implementation of mobile adserving SDK’s such as Celtra and Medialets, makes mobile a much more accessible advertising solution for clients. In 2014 we expect to see more mobile centric creative formats available to advertisers, along with more mobile ad inventory shifting to ad exchanges.

Personalisation

Mobile phones have long been talked about as being an extension of oneself but this has become a reality now more so than ever before. Smartphones wake us up, inform and entertain us, keep us connected, enable creativity and prevent us from getting lost. They are our soundtrack, our wallet and it’s not too grandiose to say; our lifeline. Invariably this generates a significant level of data. Smartphones, know as much if not more about ourselves than we do. In 2014 we will see advertisers begin to scratch the surface of the big data available through smartphone devices. It will be the year where advertisers can start converting searchers into buyers with personalised offers and push notifications. By utilizing the likes of event triggered messaging or geo-targeted promotions, conversion rates will improve as advertisers provide more targeted communications to their consumers.

Bluetooth Beacons could finally allow advertisers to attribute exposure of online advertising to actual physical sales in store. Apple recently launched iBeacons, a technology that is compatible to Ios7 which sends push notifications to users as they walk around the Apple store. The technology introduces micro location context targeting where messaging can include coupons, product information, etc. and ultimately could lead to in-store mobile payments.


27The Outlook

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Integration of mobile in successful marketing strategies will become a key focus over the next 12 months


28The Outlook

Micro-content

How information is being consumed and shared is continuing to get smaller, shorter and more visual in nature (whether as video or imagery). Naturally these bite-sized pieces of content lend themselves very well to mobile. This trend is easily demonstrated through the explosion of Snapchat, where users send video or photos that last for 10 seconds and then disappears forever. Consumers can instantly point, shoot and upload without having the desktop serving as a middleman; thereby enabling more instantaneous sharing of content.

A battle between the big tech companies is taking shape to decipher who will provide the leading platform to edit and share content through your smartphone. First to market was Twitter owned Vine, which allows users to upload and share a six second looping video. This was closely followed by Instagram Video (owned by Facebook) which allows consumers to take 15 second non-looping videos. Towards the latter part of 2013, MixBit was launched by the creators of YouTube. MixBit allows for 16 second video’s which can be linked together and we believe this is the one to watch for 2014. What’s different is that all clips uploaded are shared allowing anyone to edit any piece of video. The user is anonymous, making the content the centre of this platform not the user. However, we do expect more apps to be launched in 2014 in an attempt to take a slice of the micro content pie; thereby increasing both the options and complexity when developing content strategies for mobile.

Integration of mobile in successful marketing strategies will become a key focus over the next 12 months. Mobile will be more than just a way to reach people through advertising. Emphasis will be placed on developing a holistic approach to mobile across display, SEO, PPC and content amplification as part of the overall media mix. Advertisers and agencies will need a deep understanding of the significant impact mobile will deliver across their communications mix. If 2013 was the year where the advertising and media industry caught up, then 2014 will be the year where advertisers take full advantage of the opportunities available to them.

29 Cinema


30The Outlook

2013 was undoubtedly a very challenging year for cinema. Admissions were on the slide, the film offering was patchy without any real blockbuster winners and the pressure from the stay at home alternative options, namely Netflix, have gone from strength to strength as they profit from stronger unique content and a more stable broadband delivery platform.

Admissions on the slide as the schedule generally disappoints

Headline admissions for the year stood at 14.66m. This follows patterns of decline in recent years as the squeeze on cinema goers is being felt in Ireland. This pattern is unlikely to be significantly arrested in 2014.

Analysis of the top 10 releases for the calendar year shows this issue acutely as they account for €25m in 2013 versus €34m in 2012; a 27% drop in takings for these headline films in the space of 12 months. The top film of 2013 was Despicable Me 2. Whilst the antics of the minions made for gripping viewing during the school holidays for many (including a number of big kids here) the revenue generated was €3.7m. In each of the previous 5 years, this level of revenue would have seen it rank a lowly 5th place in the top 10. This showed that the market suffered from a lack of blockbusters that captured the public imagination and lure less frequent film viewers into their local cinema.

Sequels, as in previous years, dominate the top 10. Iron Man saw its 3rd outing in a consistent franchise. The Hunger Games and The Hobbit carried on where they left off with second instalments for their loyal and growing following. Positive signs were also seen from Man of Steel, a Superman remake which was successful enough globally to have a sequel commissioned that will now include Batman & Wonder Woman, although the casting has not been universally welcomed.

TOP 10 films 2013

Top 10 Films 2013 01 Jan - 31 Dec. Cumulative 2013 Total

1 Despicable Me 2 (3D+2D) €3,751,543

2 Iron Man III (3D+2D) €2,826,660

3 The Hunger Games: Catching Fire €2,596,286

4 Man of Steel (2D+3D) €2,502,962

5 Les Misérables €2,324,380

6 The Croods (3D+2D) €2,252,638

7 The Hobbit: The Desolation Of Smaug (3D+2D) €2,218,649

8 The Hangover Part III €2,213,343

9 Frozen (3D+2D) €2,185,833

10 Gravity (3D + 2D) €2,177,567

Cinema’s advertising popularity remains consistent

Although there is pressure on admissions, the medium still has consistent support from a wide range of advertisers as overall revenues remain virtually static. P&G remain the largest supporters with investment double that of second place. Cinema has also attracted investment from brands that had not used the medium in previous years such as Electric Ireland & Opel which helped offset the reduction in investment in 2013 from the likes of GlaxoSmithKline and Volkswagen.

Growing pressure from now established and growing competition

Netflix has been a threat to the industry in Ireland for a while and its effect we believe can in large part be attributed to the decline seen in cinema for 2013. The subscriber growth of over 50% to 150,000 in 2013 now means that it’s a serious player in the content

delivery marketplace for the monthly price of one cinema admission. This is a significant challenge to the cinema sector especially when film output is not quite as strong.

Netflix has seen huge benefits from the current race in the broadband market being undertaken by eircom, UPC & SKY. The infrastructure which the service relies upon has improved significantly in all major cities in the last 12 months as eircom roll out their fibre network. Where users were put off by interruptions and slow downloading, these issues are now far more frequently becoming a thing of the past.

In addition, resulting from direct competition with the subscription TV market, Netflix has identified the requirement for unique content delivered as a when viewers want it. This has heralded the award winning House of Cards series at a cost of €75m and subsequently a new series of Orange is the New Black, as well as streaming other US hit shows such as Breaking Bad.

This in turn adds up to a significant international player in the Irish marketplace that is only likely to get stronger in 2014 as infrastructure and content continues to improve attracting new customers at the expense of the pay TV providers but also the cinema industry.


31The Outlook

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Although there is pressure on admissions, the medium still has consistent support from a wide range of advertisers


32The Outlook

On the horizon in 2014

The 2014 schedule looks to have greater depth than last year. As of writing, American Hustle, 12 Years a Slave and Wolf of Wall Street have produced strong revenue numbers and with film critics unanimous in their praise, it has been a strong start to the year. Post Oscar season, the sequel remains king which ensures relative guaranteed success based on their predecessors. However, outside of the three aforementioned movies, the year does not have many substantial surprises, although there’s always one that makes an entry, perhaps the Lego movie or Dawn of Planet of the Apes? The year is made up of the fourth episode of Transformers, another outing for Captain America, the always popular X-men, Amazing Spider-Man 2, Rio 2 and the now familiar end of year films in the final Hobbit & penultimate Hunger Games.

3D films are still very much the norm with plenty of next year’s blockbusters available in this format; although the film makers do seem to be a little more selective in their choosing, which is the lag effect of high profile flops for this format in recent years taking effect.

In advertising terms there is a strong and loyal market that consistently use cinema. Also as digital penetration of screens is now at 100% this does help to increase flexibility for advertisers and may attract a few more new brands to trial the medium. All in all, we estimate revenues to be largely static.

33 Outdoor


34The Outlook

2013 took the market by surprise as Out of Home bucked the trend of previous years and delivered a tangible growth in revenues. This was a welcome sight for all contractors and buoys optimism for the year ahead. Digital options continue to grow at a gradual pace and innovations are helping fuel growth alongside a noticeable return to larger brand building campaigns utilising this channel.

2013 saw a return to growth

At the end of 2012 & start of 2013, revenues remained under severe pressure and the relative upturn in fortunes seen in H2 was far from predicted.

The overriding theme of the year has been that brand and launch led campaigns were more frequent in 2013 with outdoor very much at the heart of their media mix. This meant that while price led tactical campaigns were still present; there was greater breath and variety of advertisers using the medium than in years previous.

A number of categories significantly increased investment in OOH including Telecoms which undertook an aggressive product launch and customer recruitment drive within the pay TV and broadband market. eircom launched their fibre network in Q2, SKY began offering broadband services for the first time in Ireland with OOH at the heart of the creative idea, while UPC continued with their bundled offer and headline horizon TV service.

Finance was another sector to grow as banks needed to show that they were back in business and willing to lend. As a result, unseen campaigns for mortgages, insurance & current accounts were active throughout the year across the major players. Confectionary was the other standout category lead by product innovations, launches and campaign extensions from advertisers such as Mondelez.

The benefits of growth was more acutely seen in specific formats; roadside 6 sheets benefitted from heavyweight campaigns from eircom & Sky throughout the year as their mass reach appealed for new products and offers.

Source: PML market estimates

Top 5 Categories SOV1 Telecoms 12.2%2 Travel 8.0%3 Finance 6.9%4 Food 6.5%5 Retail 6.4%

Top 5 Advertisers SOV1 Diageo 4.08%2 Unilever 3.32%3 Mondelez 3.07%4 eircom 2.57%5 McDonalds 2.42%

Luas wraps saw an upsurge in popularity even though the lead time for the medium is 3+ months. Users of the medium included eircom, Irish Times, Ulster Bank, & UPC who leveraged this unique format for new product launches. It was also the case that there were multiple Luas’ wrapped for most of the year, which demonstrated advertisers long term commitment to using OOH as a brand building and awareness medium.

In addition, the staple 48 sheet saw resurgence in popularity. The new Adshel bus shelter vinyls proved very popular and resulted in increased options to add impact to a standard 6 sheet campaign and compete with the traditional 48 sheet format.

Steady progress continues in digital

Investment in innovative digital screens and formats remains an acute balancing act for the OOH market as a conservative approach is understandably being taken to such significant capital outlays. However, the plant is continuing to grow and now accounts for circa 5% of OOH. The successful dPod format from CBS has grown significantly and is now available in 4 key Dublin shopping centres & Cork’s Mohan Point which was driven by advertiser demand. The Orb screen network launched in 2013 in Dublin’s city centre and offered another way for digital ads to be consumed in a number of key venues and in high traffic street sites. They have been popular with film distributers especially for showcasing trailers.

We expect that digital plant? will continue to be invested in, fuelled by positive results in 2013 for the industry; although wide spread digital only campaigns are still in a minority when compared to other European markets.

Posters that give back

Driven by new technologies and the continued rise of smartphone usage has further increased the attractiveness of interactive opportunities. Options such as Near Field Communication, Blippar & the now already more old fashion QR codes allows for simple or complex interaction with some OOH formats to extend the possibilities and role of the medium.

A suite of dPods in the existing plant have the option of an interactive touch screen which has been regularly utilised to create awareness, intrigue, and ultimately longer term interactions with brands.

We would expect more brands to consider and utilise these options in their OOH campaigns throughout 2014 as once unique and different interactive options become widespread.


35The Outlook

“ ”Out of Home bucked the trend of previous years and delivered a tangible growth in revenues


36The Outlook

All change in transport

The significant change last year that has shaken up the market dynamic and pecking order in OOH was the awarding of the CIE contract which includes all Dublin bus, DART, bridge & station advertising. It’s the largest available contract in Ireland and was awarded to Exterion Media (Formerly CBS) from previous incumbent Bravo, who itself was taken over by JC Decaux earlier in the year.

As part of the tender, investment and improvement of the available plant was high on the agenda so we expect to see the fruits of this investment filter through as the year progresses.

What does 2014 have in store?

Investment in longer term OOH opportunities will now be on the horizon as contractors build confidence in more stable revenues & the commitments from the CIE contract are played out. Emphasis will remain on digital formats to ensure that the steady growth in recent years is continued upon.

We expect to see modest growth in revenues as most of the market forces in 2013 are still evident this year. Telecoms will continue to battle for share and financial institutions will continue to invest. This, alongside green shoots in other industries such as automotive, should help to deliver further improvements. As a result, revenues are expected to grow by 2% in 2014 to €55 million.

The knock on effect of increased popularity is that the medium will become less short term and tactically focussed as cycles and formats more regularly sell out. This has the need of greater advanced planning to secure the optimal campaign.

What’s in store forIrish Media in 2014?


CONOR MURPHYManaging DirectorEmail: [email protected]

Tel: (+353) 1 4211700

Web: www.vizeum.ie

Follow us: @vizeumireland


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