Advertising market will remain flat this year

MEDIA & MARKETING:AFTER A four-year "sledge-hammer" hit, the Irish advertising market will remain flat in 2012, according to an analysis of the sector by Core Media, the largest media buying agency in Ireland.

Total advertising spend will hit €710 million this year, compared to an estimated €709 million last year and €749 million in 2010, Core forecasts.

But this expected flatness masks a 3.6 per cent decline, if the mushrooming online market is excluded. Online spend, according to Core estimates, will grow to €152 million this year, up from €130 million in 2011 and €108 million in 2010. Spend on television advertising will also overtake the value of press advertising in 2012, Core forecasts. Like the online sector, television advertising spend will beat the trend in other platforms, rising from €201 million to €203 million, it says.

Press advertising, however, will decline from €213 million to €197 million, according to Core, having fallen from €245 million in 2010. Radio, too, will decline from €100 million to €96 million, down from €107 million two years ago.

“Predicting what way the market will go is almost an impossible task because the sands are shifting all the time,” says Alan Cox, chief executive of the Core Media Group, which is a consolidation of MediaVest, Starcom, ZenithOptimedia, Clear Blue Water, Radical and, most recently, Mediaworks, and represents ad spend of circa €160 million. “But, based on our current understanding, this is what we believe will happen.”

Press is hurting because it is losing more to the buoyant online sector than any other media, Cox says. Newspapers need to re-focus on what their product is – the “news” and not the “paper” – the report bluntly concludes. Protecting revenue by incentivising full-page or “page-killer” size advertisements or increasing impact through dynamic, non-traditional advertising shapes will only go so far. More “liquid” content, consumable across multiple platforms and devices is the only medium-term solution, he believes.

The parallel lines of investment in the printed product and the digital one will, at some point, have to cross. It is just a question of timing.

Radio’s problems go beyond the loss of advertising to newer media – agencies have paid little attention to the creative potential of the medium in recent years, Cox says, although the recent launch of Radio Gauge, a new advertising effectiveness research tool, could help reverse that trend.

In the meantime, 2012 could be a “survival of the fittest” year for the crowded commercial radio sector. “Irish people have a phenomenally strong relationship with radio,” Cox observes. “But there are too many radio stations for the market and they can’t all be sustained.”

Advertising investment usually plummets more than GDP does in a recession. It tends, as Cox notes, to be “the first expenditure to be cut, and the last to recover”. But the gap has been particularly pronounced in Ireland of late: advertising spend has declined by an estimated 42 per cent since 2007, a far deeper plunge than the rate of economic decline over that period. Below-cost selling is one possible explanation for this; inefficient platforms are another.

It is usually considered that positive economic conditions boost consumer spending and, in turn, drive advertisers to commit their cash. Advertisers like to view this process the other way around, however, claiming they can take the lead as an economy crawls out of the gutter.

Using this logic, Core Media now wants the Institute of Advertising Practitioners in Ireland to lobby Government for a one-year tax break for businesses to advertise their wares. This, Cox, says would “help to protect our valuable national and regional media assets”. But there are few, if any, precedents.

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The Leveson inquiry into press behaviour in Britain rumbles entertainingly on, throwing up a glut of soundbites on a daily basis. On Monday, editor-in-chief of Associated Newspapers Paul Dacre admitted that Jan Moir's much-reviled column on the death of Stephen Gately could have benefited from some "judicious subbing". On Tuesday, the editor of the SunDominic Mohan gamely declared that page three "was meant to represent youth and freshness". And yesterday, Paul Staines, aka the man behind the Guido Fawkes website, claimed former Suneditor Kelvin MacKenzie as his inspiration and "lodestar".

Meanwhile, one of the people who pushed for the inquiry to take place, founder of the Hacked Off campaign Brian Cathcart, was in Dublin this week to address a media conference on the question of whether moguls such as Rupert Murdoch were “in decline”. The answer given by the Kingston University London professor of journalism was no, probably not.

“I think he’s wounded and sore. I think he’s busy repositioning himself, but his desire to dominate is unaltered.”

That "moment of evangelical release" exhibited in the House of Commons last July at the peak of the News of the Worldscandal had, he concluded, given way to the "nagging fear" of old, Cathcart added.

“The idea that the UK is like Berlusconi’s Italy is one that British people find difficult to swallow, but I can’t see how it can be argued with.”