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AN INTRODUCTION TO UK TELEVISIONA PRESENTATION TO
SALLY CURRENGALLAHER
MEDIA COMPANY
COPMEDIA COMPANY
i\cdpmedia\intro\tv\0498 .ppt
CONTENTS
Television Viewing
Ratings - The currency of television
Commercial television in the UK§ ITV§ C4§ GMTV§ Satellite/Cable§ C5
Digital Television
The Cost of Television
Our Buying Philosophy
Summary
Glossary of TV Terms
COPMEDIA COMPANY
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TOTAL TELEVISION VIEWING IS SLOWLYDECLINING
Source : BARB
All TV Adult Hours & Minutesper da
1992 4.01
1993 3 .52
1994 3 .49
1995 3 .48
1996 3.45
1997 3.40
COPMEDIA COMPANY
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ADULT SNARE OF VIEWING BY STATION
N
0
01995
1996
1997
mCC
tU
* April-December onlySource : BARB
MEDIA COMPANY
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THE CURRENCY OF TELEVISION
of the population who viewed each individual programme/advertisement
RATINGS OR TVRs
f All Adults
e
verti semen
COPMEDIA COMPANY
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BUT ...
100 TVR's is not 100% of the populationNot 100% cover
4How do we know this?
TVR 1 + Cover Unique ViewersProg 1 . 20 20% 20%Prog 2 . 15 25% 5%Prog 3 . 5 27% 2%
COPMEDIA COMPANY
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B.A.R.B: NOW IT WORKS
4,435panelhomes
N4Each connected via a computer link to AGB
E Viewing is measured electronically
N4E Audiences measured minute by minute
-~4NR's for 200 demographic groups4
Who saw each advertisement and how many times
14 `BUYABLE' AUDIENCES
COPMEDIA COMPANY
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COMMERCIAL TELEVISIONIN THE UK
0 C4
0 GMTV
Satellite/Cable
0 C5
COPMEDIA COMPANY
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ITV
" Regional
® 13 areas(14 contractors - 2 in London)
E Sold by 3 sales houses
® 60% of commercial viewing (impacts)§ mass market - it reaches everybody§ older§ fast cover build
® Yardstick by which all other channels are measured
COPMEDIA COMPANY
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1998 ITV REGIONS & SALES HOUSES
TSMS 1 :4 oftotal : broadcastrevenue
C ScotlandN ScotlandN Ireland
Wales & WestSouth &' S E
East
London(Weekend)
Laser Sales20.7% of
total broadcastrevenue
London (Weekend)N WestYorkshireNorth EastBorders
CarltonUK Sales22.0% of
total broadcastrevenue
London (Weekday)Midlands
South West
ITV Region Homes %
London 19 .40
Midlands 15 .38
N W est 1 1 .65
Borders 1 .18
Yorksh ire 9 .95
N East 5 .03
C Scotland 6 .33
Wales & West7 .67
South &SE 9 .24
East 6 .71
S West 2 .98
Ulster 2 .35
N Scotland 2 .13
COPMEDIA COMPANY
200
180
160
140
120
100
80
60
40
20
0
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ITV ADULT COST '000 - BY REGION
173
100 = Network Average Adult Cost/'000
99
77
0
6475 77
132
77
°6 L z
-a
3
Luo
....H NC
(/)
p
Na
a> --~
°6
06
06Lo a ° ms
NwZ m
V)a ov
64
Source : CDP Media Co.Jan-Dec 1997
55
cO`oVNz
COPMEDIA COMPANY
140
130
120
110
100
90
80
70
60
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ITY ADULT COST '000 - BY MONTH
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source : CDP Media Co.Jan-Dec 1997
COPMEDIA COMPANY
160
140
120
100
80
60
40
20
0
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NOW COSTS VARY BY DAYPART
100 = All Time Average Cost/'000
125
o o`
o o`
o o`
o 0`O 0!
cM
CSI ~?N
O"O O
O
150
oOO NN N
100
o o`O N
MN N
50
0M
OV
N
COPMEDIA COMPANY
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CHANNEL 4
® National§ Will sell 20% of airtime in 6 macro regions
-
Restricted programme choice in macros-
Difficult to buy London macro
® 19% of commercial impacts§ More upmarket and younger than ITV§ Slower cover build§ 40-50 TVRs per week maximum
® Best used in conjunction with ITV- Can buy C4 and then use ITV for upweights
COPMEDIA COMPANY 1998 C4 SALES REGIONS (MACROS)
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C4 Macro ITV Region Homes
C4 London London 19 .40
C4 Midlands Midlands 15 .38
C4 North North West 26 .53
Yorkshire
N East
C4 South East 23 .40
South & SE `
South Wales & West
C4 Scotland C Scotland 9 .46
N Scotland
Borders
C4 Ulster N Ireland 2 .34
Total 96 .51
includes Channel Islands
S4C sold 6y TSMS (ITV Sales House) 3 .49
COPMEDIA COMPANY
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GMTV
" National Breakfast Service§ Similar macro opportunities to C4
" 3% of commercial impacts§ Half cost of ITV for Housewives with children§ Expensive for other audiences
COPMEDIA COMPANY
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SATELLITE/CABLE
National sell§ Very limited regional cable sell
Satellite v Cable is simply the means of distribution§ Each provides similar services
" Important for national campaigns
Total worth of subscriptions now £1 .2bn+ per year (nearlythree times the advertising revenue taken by Channel 4)
COPMEDIA COMPANY
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SATELLITE/CABLE . . . . A GROWING FORCE
Currently in just over 6.7m homes (28 .1 % of all UK homes)By the turn of the century it is expected to rise to 40%Current Dish/Cable split is 62%/38%, but with cableexpected to grow fastDish/Cable penetration is fairly evenly spread across the UKCabled homes receive a menu of Astra services plus agrowing selection of "cable only" stationsFootball has been the driving force behind the growth ofsatellite and cableEnglish speaking Astra stations are dominated by Murdoch'sSky group of channels
COPMEDIA COMPANY
45
40
35
30
250
20
15
10
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PENETRATION ESTIMATES
Data point taken at the end of each year
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
III Combined -O-- Dish IN CableSource : CDP Media/BARB March 1998
COPMEDIA COMPANY
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BSkyB - THE BRAND LEADER
The current monthly cost of receiving Sky's top package ofstations is £30 via satellite and up to £45 via cable
M Total worth of subscription revenue now £1 .2bn+ per year(nearly three times the ad revenue taken by C4)
Government has banned BSkyB from bidding for 8 majorsporting events
COPMEDIA COMPANY
180
160
140
120
100
80
60
40
20
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SATELLITE/CABLE RECEIVERS- BY CLASS & AGE
Profile indexed against Terrestrial TV
92
105
123
85
139
157 154
71
33
AB
C 1
C2
DE16-24 25-34
35-44
45-54
55-64
65+
Source : BARB Jan-Dec 1997 (Adults)
COPMEDIA COMPANY
SATELLITE/CABLE RECEIVERSBY SIZE OF HOUSEHOLD & PRESENCE OF KIDS
180
160
140
120
100
80
60
40
20
0
Profile indexed against Total TV
146 140150 150
COPMEDIA COMPANY
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40
35
30
25
20
15
10
SHARE OF VIEWINGIN THE SATELLITE/CABLE HOME
'_ CN U
> U LO LOU U m
U U
-m
N \ N
U
0 aU
0 _>
F- a0
Source : BARB Jan-Dec 1997 (Adults)
COPMEDIA COMPANY
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SNARE OF VIEWINGIN THE SATELLITE/CABLE NOME
60
50
40
30
20
10
The younger they are - the more satellite they watchof0
0
3028
21
3533
25
36
40
54
Adults 16+
Adults 1 6-34Kids 4-9
All BBC
ITV/C4/C5
All SatelliteSource : BARB Jan-Dec 1997
COPMEDIA COMPANY
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FOR SOME GROUPSPENETRATION IS NOW ABOVE 40%
45
40
35
30
25
20
15
10
Uf
O2
V Qm
44 .3
SV
Source : BARB March 1998
COPMEDIA COMPANY
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Channel 5
® Predicted 65% penetration at launch- estimated 50%
False promises
Claiming 70% by end of 1997
Mission statement - modern mainstream- in reality 2nd class ITV- now buying up football- copycat programming
® A film at 9 .00pm every day of the week!- Sweeney- U .S . series
®
It offers nothing that is not available elsewhere
COPMEDIA COMPANY
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HOW THE STATIONS CAN BE BOUGHT
* Amalgamation of selected regions
Offering a single buying
Nationally
point -
By Macro* Regionally Locally
IN x x ,/ x
C4 J ./ V/ x
C5 "/ V/ x x
GMTV ./ ./ x x
Satellite ./ x x x
COPMEDIA COMPANY
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BROADCAST REVENUE (SNARE)
ITV
C4 (inc . S4C)
GMTV
Satellite
C5
01995
1996
1997
" 1998*
* EstimateSource : CDP Media Co.
COPMEDIA COMPANY
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ADULT HOUSEWIFE IMPACTS (SNARE)
19 .619 .71 8 .8 18 .8
ITV
C4 (inc . S4C)
GMTV
Satellite/Cable
C5
" 199519961997*
" 1988**
4 .6 5 .0
"April-Dec" EstimateSource : BARB
COPMEDIA COMPANY
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THE CHANGING FACE OF TV BUYING
Satellite has now reached critical mass
" Penetration is too large for many national advertisers toignore
It is now possible to buy successful campaigns using Satelliteonly
Used in combination with other TV channels it can successfullychallenge the once dominant position of ITV
COPMEDIA COMPANY
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THE RACE f0 DIGITAL
® Plans for digital television are already very well advanced
Competing transmissions will be available via satellite, cableand by terrestrial signals
® All will come at an additional cost to the viewer, with chargesfor a decoding box (satellite & terrestrial) and for receivingpremium channels
® All will provide additional choice, crisper picture quality andCD quality sound
COPMEDIA COMPANY
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THE RACE i0 DIGITAL
m Sky leading the way for the advent of Non-Terrestrial Digital
BDB (Carlton, Granada) to capitalise on advent of TerrestrialDigital
0 The launch of Digital has been delayed probably until 1999
COPMEDIA COMPANY
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TERRESTRIAL= DIGITAL BROADCASTING
The Government will allocate six multiplexes (bundles offrequencies)§ One to the BBC§ One to be shared between ITV and Channel 4.§ One will probably carry S4C & Channel 5 on half its
capacity
Applications for the remaining three and a half multiplexeswere open for tender
COPMEDIA COMPANY
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BDB
" BDB successful applicant
BDB shareholders are- Carlton Communications- Granada Group- BBC
ITC forced BSKYB to sell their stake in BDB . They will remain apremium programme provider
® All current television channels plus 15 new channels areplanned to be available on digital by early 1999
COPMEDIA COMPANY
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BDB - WHAT WILL IT OFFER?
0 3 BBC Channels
0 Sky One- BBC Horizon
0 Premium Channels- BBC One TV
- Sky Movies- BBC Showcase
- The Movie Channel3 Carlton Channels
- Sky Sports- Select- Films- Entertainment
® 4 Granada Channels- 3 from GranadaSky
- Sports Club
COPMEDIA COMPANY
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SATELLITE - DIGITAL BROADCASTING
British Interactive Broadcasting (BIB)- British Telecom- BSkyB- Midland Bank- Matsushita Electric
Potential to provide shopping, banking and internet services tosatellite subscribers
Bringing information age to television viewer not just the PCuser
® Predicted to start Christmas 1998
COPMEDIA COMPANY
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SATELLITE - DIGITAL BROADCASTING
It will not be cheap for the subscriberSet top boxes (decoders) will have to be subsidised - with aprice down to £200 to be attractive to consumersViewers will have to subscribe to Sky's 200 channel digitalpackage
" Interactive services will have to be paid forCharges not been decided
" Industry estimates 5 million customers within 5 years
COPMEDIA COMPANY
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CABLE- DIGITAL BROADCASTING
Although details are not fully known yet, the cable companiesare claiming they will be offering a full range of channels(including BSkyB stations) with easier and better interactivefacilities than either satellite or terrestrial digital services
N Claim they will be on air late Summer
COPMEDIA COMPANY
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THE COST OF TELEVISION
Demand _ RevenueSupply Audience
- market driven- constantly changing- no rate cards- ITV drives the market
CPTor
Station Price
COPMEDIA COMPANY
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BUT . . .
" We do not know what the revenue will be
" We do not know what the audience will be
" How do we know we are getting a good price?
" We agree on a position against the station price
COPMEDIA COMPANY HOW AUDIENCE DELIVERY AND REVENUE CAN
AFFECT RATING PERFORMANCE
COPMEDIA COMPANY
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BOOKING DEADLINES
Generally 1 st of Month
2 months prior to transmissioneg .
April
-
February 1 stOctober
-
August 1 st
® Late booking will incur cost penalties
® It will also compromise our access to programmes
COPMEDIA COMPANY
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OUR BUYING PHILOSOPHY
Client led- no agency deals
Value led-
total control -> quality campaigns-
no pre-emptions-
programme choice-
centre breaks-
deals are met
COPMEDIA COMPANY
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OUR BUYING PHILOSOPHY
Reach the right people (Target Audience)
In sufficient numbers (Coverage)
®
Enough times to be effective (Frequency, OTS)
In the correct environment (Positioning, Programming)
At the cheapest price
But : Never compromise the effectiveness of the schedule simply to improvethe cost
COPMEDIA COMPANY
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COVERAGE
Buying into similar programmes, however popular they may be, willrestrict the potential coverage
Strong daypart, high conversions and buying centre breaks ofprogrammes help establish high levels of cover
"
Finding the right 'mix' of programmes that appeal to our targetmarket is the way to maximise cover
"
This can only be achieved if you have total CONTROL of the airtime
COPMEDIA COMPANY
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SUMMARY
0 Ratings are the currency of television
ITV remains the dominant player- but C4 is good for more targeted opportunities- and satellite is growing
" The price of television is market driven
N The key to successful buying is control
COPMEDIA COMPANY
RATINGS§
% of the population who viewed each individual programme/advertisement
1 + COVERAGE§
%of the population who viewed one or more spots during a campaign
4+ COVERAGE§
%of the population who viewed four spots or more during a campaign
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GLOSSARY OF TV TERMS
COVERAGE/REACH§
% of the population who viewed any spot during a campaign
Cost Per Thousand (CPT) = THE PRICE§
Expressed in thousands, the cost of reaching one thousand of given population
PURE COST§
The true average cost for all advertisers for any given month. All advertisers spend _ all commercial impactsdelivered
GROSS OR PUBLISHED COST§
Costs published by the sales houses, totally made up and up to 23% higher than Pure Cost
® IMPACTS§
Viewing figures expressed in 000's