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MEDIACOM Marketing Digest 27 July 2004

MEDIACOM Marketing Digest 27 July 2004

ADSPEND

Where Did The Money Go?

Last week we noted the surprising decline in reported Television Advertising Expenditure for the first half of 2004. This week we dig more deeply and come up with some interesting results, revealing that the TV Spend decline has occurred in May and June.

We remind you that these are reported figures, based on ratecard value, as collected and analysed by Nielsen Media Research, and thus do not represent actual spend data. But the results are comparative, year on year. And, as the above graph (tracking in millions of dollars) shows, reported TV AdSpend fell by approximately $7 million dollars a month in both May and June, representing a monthly decline of close to 6% - despite YOY rate increases of around 16% each month for both TV1 and TV2, less for TV3.

That represents an effective monthly decline of 18.7%, based on the spend levels required in May & June 2004 to maintain 2003 levels.

Fortunately, the CanWest MediaWorks share offer has now closed, so there won't be any embarrassing investor questions about whether the latest adboom has turned bust.

Is this a momentary glitch or the start of a new trend? Too early to say for sure, but the indicators aren't promising. TV spending is down in 17 of the 30 categories measured by Nielsen, in both May and June, so the drop isn't attributable to just a couple of industry sectors.

Notable sectors in decline:

* Automotive down 6% in May, down 14% June

* Beverages down 18% in May, down 20% in June

* Business Services down 39% May, 65% June

* Foodstuffs down 9% in both May & June

* Government down 19% May, 7% June

* Insurance down 37% in June

* Office Products down 62% in June

* Pharmaceuticals down 7% May, 11% June

* Real Estate down 39% June

* Cosmetics down 3% May, 15% June

* Transportation down 41% May, 81% June

Two swallows do not a summer make, but seventeen of them have gotta mean something. If this is the end of the golden wether for TV advertising, remember you read it here first - but don't go betting your budgets (or your TV negotiating strategies) on these initial results. We'll be keeping close watch on the next couple of months' reported results, before we get too ready to party!

RURAL READERS

New Rural Survey

The Colmar Brunton Rural Readership Survey 2004 has just been released, and the results, though largely confirming our existing prejudices, do provide useful guidance. The full survey report runs to some 122 Powerpoint pages, with Everything You Ever Wanted To Know About Rural Readership included, but the three key questions we wanted answered were:

1. How many farmers read the new Farmers Weekly?

Answer: 90% (compared with 94% for Rural News, 94% Straight Furrow, 92% Country-Wide)

2. How often do farmers use email and the internet?

Answer: 21% Daily, 27% Often, 27% Seldom, 24% Never

3. How many farmers visit the farming magazine websites?

Answer: not many.

* www.country-wide.co.nz

2% visit often, only 21% have ever visited.

* www.ruralnews.co.nz

3% visit often, only 28% have ever visited.

* www.straightfurrow.co.nz

2% visit often, only 20% have ever visited..

We aren't particularly surprised by these results (which are thankfully in line with our expectations); they simply underscore the need to think laterally and plan carefully when working in a market well-served by farming publications but with only limited opportunity to stand out from the crowd.

TV ADS ON ICE

We feel a little like Michael Moore (the filmmaker, not the politician) when we tell you about "a new Australian invention that [would] change the way we all watch and record TV forever" - were it not for the conspiracy of technology suppression which will ensure that this product will never see the light of day!

Ice (an acronym for Intelligent Content Engine) is a new service that might, if left unchecked, allow viewers to:

* Automatically reduce the volume during commercial breaks - enabling viewers to control the loudness of the ads.

* Check what's on TV at the touch of a button - an on-screen TV guide.

* Record any program digitally, no tape required, at the touch of a button - no more confusing codes, video clocks and manuals.

* Remove ads entirely from recorded programs.

* Prevent children viewing unsuitable TV programs - a new parental control system.

Ice is a patented system which addresses two of what the developers call "the most persistent and widespread consumer demands":

* managing or eliminating TV commercials

* removing the guesswork from programming recordings

The system was developed in Australia, and will probably be buried there, because - unlike the TiVo and other Personal Video Recorders - it has been specifically designed to draw the ire of both the advertising and broadcasting industries.

If you'd like to read more about this device, before it joins the perpetual motion machine, the water-powered combustion engine, the Faster Than Light Interstellar Drive and the Ark of the Covenant in the Forbidden Archives, point your browser to http://icetv.info . Just don't tell them who sent you, OK?

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NEW LOOK LISTENER

The New-Look Listener

Fans of The Listener will have already seen the New Look of this worthy publication, and will be grateful that this particular makeover has not been Extreme, but rather a refining of the core concepts.

In fact, the refurbishment has been so artful that it's difficult, without directly comparing the new mag to its predecessor, to identify where changes have been made. Our observations:

Notable, but scarcely revolutionary: the continuing motif of subheads and titles, white titles reversed out of red blocks, in the finest tradition of magazine design guru Roger Black.

Hardly noticed, because they blend easily into the essential fabric of the Listener: the addition of new columns and a new entertainment section, The Lounge.

Not far enough: the addition of just three more Sky channels to the small selection already featured. Whilst we applaud the choice of channels to include, we lament the non-inclusion of Sky Movies 2 and Sky Sport 2 & 3. Not enough room? Then why not revert to the nearly-tabloid Listener page size of the dim, distant past?

Not there yet: the lamentable coloured borders on the TV and Radio Listings pages.

Opportunity yet to be seized: programme listings written with an attitude, not merely reprinting broadcaster handouts. The opinionated listings in the Evening Post of the late seventies or early eighties provided an excellent demonstration of the possibilities.

iSKY

Interactive TV Tiptoes Forward

October 2003 saw Sky launch the first interactive application in New Zealand when, in conjunction with Panasonic, they launched New Zealand's first interactive advertising channel - Channel 222. Results from that campaign - which promoted recordable DVDs - were highly favourable, and Sky now have the interactive channel capacity to invite other advertisers to join the fray.

It costs $30K a month to lease a megabyte of interactive bandwidth on Sky, with production costs eating up something like $30K (not including creative development), with the leadtime currently running to several months. Apart from that, you still have to promote the channel in other media (e.g. general Sky channels). And, despite the name, your channel won't be truly interactive. Yes, viewers can point and click to navigate their way through the channel, but they won't be able to send any responses back just by clicking on their Sky remote - at least, not yet. Panasonic settled for encouraging text messaging and emails, and reported receiving nearly 50,000 responses to the promotion they were running in conjunction with Channel 222.

Still, interactive TV is the way of the (near) future. Both TVNZ and TV3 are actively considering digital television offerings, which will inevitably include interactive channels. Today's Sky service could be a good opportunity to take advantage of interactivity while it's still a novelty, and will attract audiences for its own sake.

How could you use an interactive channel right now? Here's an example:

* A viewer watching Sky Digital responds to your advertisement directing them to another channel, for example Channel 444

* Channel 444 is an interactive application running through the set top box. Once on channel 444 the viewer is able to navigate the application to find out more information, play a game or qualify themselves for your product

Eventually, the viewer will then be able to point and click for more information - that viewer request will be carried back to Sky through the telephone line plugged into each Sky Digital box. Because Sky know in which household each smart card is installed, they could provide order fulfilment directly to each viewer (and could even charge them via their Sky account or credit card).

For examples of interactive TV campaigns, visit http://www.broadbandbananas.com. Then give us a call to discuss how we can make interactive TV work for you.

BUZZ

The Other Side of Buzz

Marketers beware: 60 Minutes has discovered Buzz Marketing - and it doesn't like what it sees!

In an expose airing in the US, 60 Minutes followed a handpicked team of attractive, approachable guns-for-hire assembled by a company called Essential Reality.

Their purpose: to promote a new product called the P-5 Glove, a cutting-edge device that video-gamers can use to fly planes and fire weapons on their computers, with the twitch of a finger.

Their strategy: to go into coffee bars and crowded places, and have fun with the new Glove, attracting a few prospects. And say, 'Yeah, sure, c'mon you wanna try it? Great, try it,' and then all of the sudden you just involve them with the brand. And then feed them a few sound bites along the way.

So far, so good. Just one of the many measures used by advertisers to create buzz for their product.

But 60 Minutes tracked down some of the people lured into using the computer glove.

John Flaherty said he didn't like being taken. "It just seemed to me like a nice friendly encounter, and it kind of restores your faith in your fellow New Yorkers. And then, to find out it was all fake, it was just kind of, I don't know - I don't like, I don't like the ring of it."

So - a word to the wise: create buzz with care. At the very least, don't let a team of investigative reporters film you in the act. The buzz you generate may not be quite what you intended.

TELEVISION TV Cancellation Deadlines

Just a quick reminder that the last day for cancelling September television time without penalty is TOMORROW, Wednesday July 28.

ABOUT MEDIACOM

MEDIACOM, with offices in 80 countries, is one of the world's largest and most respected media service companies.

We create media solutions that build business for a wide range of local, regional and worldwide clients.

With $13 billion in global billings, a commitment to strategic insight, total communications planning, tactical media brilliance and tough but creative media negotiating, MEDIACOM provides unsurpassed value in today's chaotic media marketplace.

Published by MEDIACOM (NZ) LIMITED, P O Box 3369 Auckland New Zealand, Phone 09 914 4940 Fax 09 914 4903 Editorial Comments or requests: newsletter@mediacom.co.nz To subscribe to this newsletter, please send an email with SUBSCRIBE in the subject line to subscribe@mediacom.co.nz

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