RBR asked major industry organization heads in our annual survey for their 2008 forecasts, insights, solutions and ideas. 2008 promises to be a busy year for these organizations. IAB is grappling with keeping the FTC from regulating too much of its behavioral targeting abilities. Radio is still working to monetize HD and keep the dollars coming in. The TVB has to deal with less robust programming options from the networks due to the strike; and most everyone is in the midst of further capitalizing on digital and new technologies. We asked about everything from what they're recommending to constituents to whether they expect more growth this year in local or national.
RBR/TVBR spoke to Jeff Haley, Radio Advertising Bureau (RAB) CEO; O. Burtch Drake, American Association of Advertising Agencies (AAAA) CEO; Chris Rohrs, Television Bureau of Advertising (TVB) President; Randall Rothenberg, Interactive Advertising Bureau (IAB) CEO; John Sturm, Newspaper Association of America (NAA) CEO; Sean Cunningham, Cabletelevision Advertising Bureau (CAB) CEO; and Stephen Freitas, Outdoor Advertising Association of America (OAAA) Chief Marketing Officer.
Today's question: How are the numbers looking for Olympics and election dollars?
Haley: ZenithOptimedia predicts Radio stations will get ten cents of every political dollar spent in 2008, and if projections of a $3 billion campaign hold true that could mean $300 million for Radio in the coming year. Radio's immediacy will be a great value to candidates in heated races.
Drake: The Olympics and U.S. elections are two leading indicators for ad spending in the coming year, but the numbers may prove to be most dramatic outside of North America, particularly in emerging overseas markets where ad spending growth is expected to be 6.7 percent worldwide, compared to 4.1 percent in North America. Still, how agencies will benefit from these quadrennial events is yet to be seen.
Rohrs: The outlook for both the Olympics and Political is very, very good. It's the always-popular Summer Games, key events will be live and there is huge interest in China. Political spending in '08 will shatter all records. The Presidential race is wide open, control of Congress is again up for grabs and there will be heavily contested issues on and off ballot everywhere.
Rothenberg: Olympics and Elections don't apply as much for interactive as a unitary medium as say it does in television for a variety of reasons. One is its just kind of not the way interactive works. It's a very, very segmented medium and for one Olympics' dollars have concentrated enormously over the years on television-network and then to some degree on spot if it shakes out. That's because the Olympics are a televised event.
There certainly will be benefits that will come to interactive. Some will be related to the network broadcast and spin-offs there. I think much of it is going to relate to segments and micro-segments. You can imagine in a medium that allows you to have advertising-supported web sites devoted generally to sports than to track and field than to the javelin itself. You can really get micro-targeted it but we haven't heard anything that indicates that there is an enormous and specific flow into the medium as a whole from the Olympics.
From the Elections my guess is that after this election is over we'll look back and find out that an enormous amount of marketing activity took place online. My guess is also that much of it will not be about traditional advertising, as we know it. It will be about the use of social marketing and social media not about the insertion of ads into spaces and places. So how that gets accounted for is I think very questionable. What you're asking is really the allocation of above the line advertising dollars by marketers through their agencies.
An enormous amount of the growth in interactive and it's importance is actually about the allocation of non-media budgets-things that aren't traditionally measured like public affairs budgets, public relations budgets; even operations budgets from marketers. Automotive marketers for example have spent money out of their operations budgets to build the configuration sites-where you go on and say, "I want it in blue and then I want this kind of trim and these kind of tires, this kind of package what does it look like?" Well that's advertising, that's marketing but it's coming out of operations budgets. For all these reasons the Olympics and Election questions haven't been that relevant so far.
Sturm: While both of these contribute to newspaper advertising dollars, they do not represent a large amount of revenue in the industry's broader picture.
Cunningham: Election dollars for Cable look very strong thus far; virtually every presidential candidate that is advertising on TV is advertising on Spot/Local Cable. As it is a non-incumbent race and the many special interest groups looking to advertise - given both the precise demographic and geographic targeting possible with Spot/Local Cable and the ability to extend linear: 30 ads with on-demand and on-line messaging capabilities, Cable should see all-time highs in election dollars. Each successive Olympics has seen all forms of Cable (national, spot & local) earn progressively more ad dollars and the 2008 Olympic dollars look very strong for all indicators.
Freitas: An unusually competitive election year will lead to substantial political advertising revenue gains in 2008 accounting for an overall 64% increase from 2004 with spending on out of home political advertising projected to jump 88% to $63 million according to research firm PQ Media. National brands typically tie Olympic out of home spending to existing national campaigns. There is generally more incremental spending when a US city is host of the Olympic Games.
