|DVR systems, like ReplayTV's, do not pose as much of a threat to TV as previously thought, according to a new study.
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In comments that came during discussions of the likely impact of new digital technologies on TV advertising, David Poltrack presented an internal CBS study of 734 DVR viewers and found ad skippers recalled on average two commercials they fast-forwarded through and one brand. That is about the same recall as live TV viewers.
Would double ratings
Mr. Poltrack said DVR use will add audience to network shows if the viewers were counted. He noted the research also found that if time-shifting viewers were added to the shows' live audience, it would nearly double the ratings for most of the top 20 network series.
Overall, other forecasters told the audience that advertising spending will see stable growth patterns after the comeback from the latest recession, but they disagreed on what effect client budget pressures and new technologies, such as the DVR, will have on the future.
Speaking this morning at the annual media conference, Robert J. Coen, director of forecasting at Interpublic Group of Cos.' Universal McCann, projected U.S. ad spending will ultimately grow 7.4% this year to $263.7 billion, spurred by the summer's Olympic Games and political advertising, as well as increased spending by national advertisers.
Next year, national advertisers will continue to spur growth of 6.4%, to $280.6 billion. Major categories in national advertising, such as automotive and food, held up well during the downturn and continue to spend well, Mr. Coen said. Meanwhile, he said secondary categories that "cut and ran in 2001," such as telecom and computers, are restoring spending.
While national advertising has been boosting totals, "local marketers have been very stingy with their budgets," Mr. Coen said. He revised his previous outlook for 2004 from local ad growth of 7.4% to a final 6.9%. Local advertising will remain weaker next year, with 4.8% growth, while national advertising will grow 7.4%.
There are indications that "things are looking better in other parts of the world," Mr. Coen said. His forecast calls for 5.8% growth outside the U.S., to $272.8 billion, bringing the global total to $553.4 billion, up 6.1% in 2005.
Steve King, chief executive of Publicis Groupe's ZenithOptimedia, agreed with the general direction of Mr. Coen's forecast, with slight differences on his numbers. Zenith's forecast calls for major-media growth of 6.9% this year, to $369.7 billion, then 5% year-over-year in 2005. The U.S will grow 6% this year and 4.2% in 2005, Europe will grow 4.5% in 2005 and Asia will grow 6% but is expected to outpace Europe by the next decade.
Online surpasses outdoor
In the U.S., the lack of big events such as the election and the Olympics will "create a hole" in TV spending, especially in the network and spot TV categories. Meanwhile, the Internet will continue to establish itself as a mass medium, overtaking outdoor with a 5% share of spending by 2007, Mr. King said.
"The waters under the surface have been slightly more turbulent" overseas than they appear, Mr. King said. Clients are increasingly demanding accountability in their media buys and procurement-department pressure is growing, he said.
"Clients are looking to invest, not spend," he said.
Brands need to spend
The tide on procurement pressure is turning, Mr. Coen said. Many advertisers who followed their procurement department's lead and cut budgets to the bone during the recession are finding their brands losing ground to competitors.
"I think we may be seeing the cycle go the other way," he said.
Mr. King also disagreed on the effect of new digital TV technologies on advertising. Ad-skipping technologies such as TiVo and DVRs are cutting into ad viewership and forcing advertisers to seek other media.
"It does seem television has reached a stage of maturity," Mr. King said.