swallen nenpa fall conference

8/3/2019 Swallen NENPA Fall Conference

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NEWSPAPER ADVERTISING:BEHIND THE NUMBERS


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1. Introduction to Kantar Media

2. Newspaper Ad Metrics

3. Digital Advertising

4. Key Category Trends

Outline


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3 2010 Kantar Media

Kantar Media IntelligenceLeading global provider of marketing intelligence since 1926

In the U.S. we monitor:

Traditional and digital media 3.5 million brands

$140 billion in ad investments

750 million ad occurrences per year

2 million occurrences daily


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We track a diverse range of media

4


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5

Newspaper

National (3 pubs)

Local (142 pubs in63 DMAs)

Spanish (52 pubsin18 DMAs)

Digital

Internet Search

Internet Display

(>3,200 sites)

Whats Included

Print editions only

ROP display & inserts

All zones & sections

Excludes agate typeclassified advertising Newspapers web

sites are here

Media Coverage


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TV

Network (5)

Cable Nets (68)

Local Cable (2DMAs)

Spot TV (1,003)

Spanish Net (8)

Syndication

6

Radio

Network (5)

Local (32 DMAs)

National Spot(205 DMAs)

Plus

National & LocalMagazines (>300 pubs)

Outdoor (210 DMAs)

Media Coverage


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New England Newspaper Monitoring

7 2009 Kantar Media


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We estimate ad expenditures based on rate card costs

8


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Todays Rough Rules

Local Newspapers

Newspapers = Print editions

Digital = Web sites

All data from Kantar Media unless otherwise noted


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Newspaper Ad Metrics

10 2009 Kantar Media

2.0


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Ad Spend Growth RatesTotal U.S.

-4.1%

-12.3%

6.5%

3.2%

-11.7%

-20.2%

-4.6%

0.5%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

2008 2009 2010 H1 2011

All Media Newspapers

Source: Kantar Media


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Media2010 Ad $vs. 2006

Television 102%

Outdoor 98%

Magazines 82%

Radio 75%

Newspapers 64%

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Most Media Still Trail Their Pre-Recession Peaks


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The Recessions Impact


Ad revenue declines since 2007 for New Englanddailies have mirrored the U.S. average

-32.4%-31.9%



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Anatomy Of A Decline: 2010 vs. 2007New England Newspapers

1. Circulation losses

Affects pricing power

2. Shrinking pool of advertisers

Down 13% since 2007

National average is -8%

3. Continuing advertisers buying less space

11% decline in annual inches from 2007 to 2010 for common advertisers


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2009 Kantar Media 15


Erosion Is Continuing Into H1 2011New England Newspapers

Total ad spending: down2.9%

Down 3.9% for continuing brand advertisers

Total # of brands advertising: down3.2%

# of inches per average brand: down 7.2%


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How does newspaper performancecompare to Local TV Stations?


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Newspapers TV Stations

Total Ad Spending -2.9% -2.2%

Spending From Continuing

Brands

-3.9% -4.0%

# of Brands Advertising -3.2% +2.7%

Ad Volume Per Brand(inches/seconds)

-7.2% -2.6%


H1 2011 vs. H1 2010



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Digital Advertising

3.0


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0%2%

4%

6%

8%

10%

12%14%

2006 2007 2008 2009 2010

Online % Share

18.8%

-1.8%

-11.8%

10.9%

-20%-10%

0%

10%

20%

30%

2007 2008 2009 2010

Online Growth Rates


Newspaper industry reporting shows online ad growth has

resumed and its share of total ad revenue is expanding

Source: Newspaper Association of America

Online Ad Revenue


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Growth in web site ad revenues is being driven by digital-only brands

that do not buy space in the print edition of the newspaper

National sample of 20 newspapers and their web sites

Q2 2011 vs. Q2 2010

Side-by-side comparison to identify digital-only brands

Findings

3/4ths of online ad $ growth coming from digital-only brands

Online spend by digital-only brands growing 2x faster than joint brands

20


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Expanding

Category % Change

Amusements/Events +26.2%

Auto, Dealers +16.0%

Medical Services +56.0%

Media +21.7%

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Leading CategoriesDigital Spend - H1 2011


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Expanding

Category % Change

Amusements/Events +26.2%

Auto, Dealers +16.0%

Medical Services +56.0%

Media +21.7%

Contracting

Category % Change

Auto, Factory -15.4%

Financial Services -14.3%

Telecom -20.7%

Education -9.9%

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Leading CategoriesDigital Spend - H1 2011


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A concern for advertisers

We count the number of displayads on each page

Ad clutter on newspaper sites is:

Trending upward

15-20% above the norm

Higher than local TV & radio sites

Exceeded only by shopping sites

Web Site Ad Clutter


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Site Category 2008 2009 2010 H1 2011

All Web Sites 2.35 2.28 2.54 2.59

Newspapers 2.65 2.61 2.95 3.12

TV Stations 2.88 2.56 2.88 3.02

Radio Stations 2.63 2.44 2.67 2.74

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Web Site Ad ClutterDisplay Ads Per Page


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Ad NetworksNewspapers Web Sites

We track 32 ad networks

% of site ad impressions sourcedfrom networks vs. publisher direct

Remnant versus premium inventory

Supply versus demand

Ad impressions on newspaper sites

are skewed towards networks

Index:Publisher

Direct

Index:Ad Nets

All Sites 100 100

Newspapers 88 140


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Ad Category Trends

4.0


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Automotive

Retail - Home Furnishings & Improvements

Retail Department Stores

Hospitals & Medical Clinics

Key Product Categories


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The Auto Rebound

4.1


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Automotive ad spending has rebounded


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$10

$12

$14

$16

$18

$20

$22

'01 '02 '03 '04 '05 '06 '07 '08 '09 10 11(e)

Billions

AUTOMOTIVE AD SPENDING: ALL MEDIA


To 2001 Levels


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Newspapers have lost the most ground


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$0

$4

$8

$12

$16

$20

'01 '02 '03 '04 '05 '06 '07 '08 '09 10 11(e)

Billions

All Media Newspaper

TOTAL AUTOMOTIVE AD SPENDING



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Auto Segment 2004 2011 (est)

Factory $100 $84

Dealer Associations $100 $53

Local Dealers $100 $60GRAND TOTAL $100 $72


Local Dealers - Newspapers$52


Relative Rate Of Ad SpendVersus Peak Year of 2004


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Auto spending in local newspapers is concentrated around local dealers

2004 2010 H1 2011Local Dealers 69% 77% 84%

Dealer Assn Groups 19% 9% 8%

Factory 12% 14% 8%

TOTAL AUTO 100% 100% 100%


Distribution of Automotive Ad Spend



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0% 10% 20% 30% 40% 50% 60%

Other

Radio

TV

Newspaper

H1 2011 2010


Newspaper share has grown in 2011

Auto Dealers Media Channel AllocationTop 25 DMAs


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Newspaper share gains are reflected in above-average spending

growth rates

14.6%

21.8%

1.0%

19.2%

0.0%

5.0%

10.0%

15.0%

20.0%25.0%

All Media Newspaper Spot TV Other

H1 2011 vs H1 2010



Auto DealersTop 25 DMAs


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+38.4% +20.6% -36.7% +41.0% +28.8% +3.9%

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Newspaper Ad Spend: H1 2011 vs H1 2011


Dealer AffiliatesTop 25 DMAs


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Among local dealers and associations,search spending is twice as large as

display spending

Digital Auto BudgetsDisplay vs. Search


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Boston and San Francisco

Cable system and primary paper covering same geography

Q1 2011

Base: Local auto dealers

Dealer association groups and factory excluded


Dual advertisers account for 10% of thenewspapers total dealer spending


How Important Is Local Cable TV?


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Retail: Department Stores


4.2


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A decade of declining sales

Down 10% in past 4 years

Consolidation into 7 major brands

85% of category total ad spend

Budgets shift towards national media

At the expense of newspapers


BackgroundDepartment Stores


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Total Ad $ Newspaper Ad $

+13.7% -11.6%

+9.6% -6.0%

-4.7% -10.9%

-16.4% -26.4%

-29.5% -12.2%

-55.3% -55.6%

H1 2011 vs. H1 2010


Major Brands Have Cut Newspaper Budgets


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Newspaper AdvertisingDepartment Stores

Newspaper share ofbudget varies widely

National chains foregoROP in favor of FSI

Except Macys

Newspaper% of Ad $

Inserts % ofNewspaper

CATEGORY 27% 50%

Macys 48% 14%

Kohls 34% 98%

JC Penney 23% 94%

Sears 20% 94%

Target 19% 86%

Wal-Mart 4% 57%

Full Year 2010


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FSI Spending Declines AreDue To Fewer Insertions


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Retail: Home Furnishings & Improvements


4.3


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Newspaper share of budget varies

widely

Category definition

U.S. retail sales up 6% from 2009

But still 15% below 2006 peak

Less spending on discretionary big

ticket projects

Housing market correlation

20% fewer advertisers in measuredmedia within New England

BackgroundHome Furnishings & Improvements


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45%

23%

12%

20%

Segment Share:2010Furniture Home Centers Bedding All Other



Primary SegmentsLocal Ad Spending


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Primary SegmentsLocal Ad Spending

45%

23%

12%

20%

Segment Share:2010

Furniture Home Centers

Bedding All Other

Total Local $ Newspaper

Furniture +2.0% -7.0%

Home Ctr -13.5% -15.7%

Bedding +17.8% +32.2%

Other -2.0% -2.1%

H1 '10 H1 '11

$3.8

$20.1

Sleepy's Newsp Ad $

H1 2011 vs. H1 2010


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National media budgets are trending flat

Regional media spending has plummeted

Aggregate declines of 55-60% from 2007-2010

Down a further 40-50% in H1

Newspaper share of budget has declined

Pacing at 35-40% in H1


Home Depot & LowesNew England Ad Spending


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Furniture StoresNew England Ad Spending

H1 budgets rose across the region

15-25% by market since 2009 low

3/4ths of the top advertisers by market are

spending more

Newspaper share of spend holdingsteady overall

Even among dominant TV advertisers

# of newspaper advertisers is flat year-

over-year

Turnover among small spenders


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Hospitals & Medical Clinics


4.4


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An aging and less healthy population

A growing appetite for health information

A crowded and competitive market for medical service providers

Establishing a brand identify with consumers

Geographic service areas are expanding

Implications for the media advertising mix

Background


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Upward trend double digitgrowth rates

Growth currently stronger in thelarger population markets

More advertisers per market helpsdrive spending

Ad $ Growth vs. Prior Year

2008 2009 2010 H1 11

10.6% -9.7% 12.8% 31.5%

53

-20% 0% 20% 40% 60%

Burl

Port

Prov

Htfd

Bos

# Advtsrs: 10 vs 07


Hospitals & ClinicsNew England Ad Spending


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What Do These Ads Have In Common?


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Recap



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Key metrics for print edition advertising remain weak

Digital ad spending growth coming from digital-only brands

Newspaper web sites and ad networks

Key categories

Spending surge from local auto dealers is benefitting newspapers

A weak environment for key retail advertising segments

The growth opportunity from healthcare providers

Recap

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