INSIGHTanalysis: Media Healthcheck – August 2004

Ray Snoddy of The Independent, played host to the alternative MacTaggart Lecture and during the speech, he voiced his opinion of the BBC’s proposed digital switch-over date of 2012. He said: “Talk of analogue switch-off is completely academic while the government isn’t prepared to put a single penny in to making it happen. I for one wouldn’t bet much money on exactly when analogue switch-off is going to be completed.”

On the other hand, the BBC’s director general, Mark Thompson, said the Corporation is keen to drive forward the switch-over date and is already in discussions with Sky.

Thompson added, that he is keen to meet with other public service broadcasters and equipment manufacturers, with the aim of reaching a simple and clear standard for free satellite – which will be a key driver in determining the analogue switch-off date.

A session with Stuart Mison, managing director of Octagon, provided insight in to how television broadcasters can attract more advertising pounds to their station. He said that one solution is for broadcasters to become more creative and produce an alternative to the 30 second commercial spot.

Mison said one option was advertising funding programmes; in which advertisers plug a short-fall in broadcasters programme making budget, in return for their product(s) being placed along side the programme. The benefit to the advertiser is that not only will they appear as a sponsor on television, they will be mentioned alongside the programme in press and internet coverage at no extra cost.

Internet Advertising

Once again, internet advertising was a hot-topic during August, with many predicting that this is set to close the gap on traditional media over the next few years.

UK online marketing solutions group, TradeDoubler, revealed in a study that internet advertising is quickly overtaking television as online has now gained mass-market penetration and that 84% of survey respondents admitted to responding to an online advertisement.

In a separate report, eMarketer predicts that US online advertising spending will hit $18.5 billion by 2008, with this year setting a record high of $9.1 billion – topping the previous high set in 2000 by $1 billion.

Borrell Associates has also predicted a bright future for advertising online by saying, internet advertising is the ‘botox’ of the newspaper industry.

Local internet advertising in the United States has turned in to a fully-fledged boom, says Borrell, and as a result estimates that newspaper-owned internet sites will generate a staggering $1.14 billion this year.

However, despite the growing popularity of advertising on-line, it seems that television and radio are still firm entertainment favourites, as new figures from Ofcom revealed that digital offerings have helped to retain a faithful following.

The average time spent viewing television per UK household increased by 2% to 26.1 hours a week in 2003, driven by the increased number of channels now on offer from television services such as SkyDigital and Freeview.

Digital has also offered a helping hand to radio, which has grown in popularity by 6% to 43.5 listening hours per household per week.

However, in terms of growth in consumer time and money, the internet and mobile phones won the race hands down. Time spent online rose eight-fold in the past four years from 2 hours to 16 hours in high-speed broadband households.

Despite the phenomenal growth improvements from the internet, the true usage figures have yet to match predictions made in 2000 by industry analysts who said that, the internet would rival and eventually be the death of television.

The Olympics

It seems that The Olympics may not provide the boost to advertising revenues many had hoped for, with only 3% of UK marketing activity in the run-up and during the games related to the event, says a survey conducted by a global network of independent advertising agencies.

However, not all of Europe’s advertisers seem to be as uninterested in the games as the UK. Overall, Italy ranked in second place with 60% of its marketing activity estimated to be Olympic-connected, while Holland came in at the number six spot with 30%.