Wachovia hosted an advertising mini conference 3/27. The conference included three panels, discussing recent trends in national, local and new media advertising. Their key takeaways:
* Advertising agencies. As a result of the disintermediation of media, the advertising agency is playing a bigger role in the advertising process. Agencies are getting involved earlier on to help integrate the creative with the planning across all types of media. This reinforces their view that ad agencies will not be hurt by the disintermediation of media, as they are platform agnostic.
* Radio. The outlook for radio continues to be sluggish due to the fact that this medium is doing ''too little too late.'' Of all the media sectors discussed on today's panels, radio is still considered more reactive than proactive. Ad buyers believe that certain initiatives, such as HD radio and electronic measurement, will create additional downside due to increased fragmentation and lower (although more accurate) ratings, respectively. There is a bright spot, however - digital initiatives, such as the internet, could comprise greater than 10% of total revenue in 5+ years.
* Television. The current television environment is strong due to both increased demand (a positive) as well as a significant amount of makegoods (a negative). Despite double digit increases in scatter pricing, the upfront may be hampered by advertiser concerns over increasing DVR penetration. Adding even further to this year's upfront confusion is the question of measurement, as commercial ratings will not yet be available. However, it does seem that networks and advertisers will compromise with Live+3 data at least this year.
* Newspapers. 1) Newspapers continue to lose share to online, more so than any other traditional medium. 2) There is currently too great a difference between print and online CPMs, which cannot be justified, especially in light of declining circulation trends. 3) Buyers are pushing for rate declines in line with circulation trends and in some cases are getting them. 4) Budgets for the majority of newspaper advertisers are flat to down, with the greatest declines in the mid-teens-percent. 5) The Google Print initiative, while still small, has been a win-win. The initiative is not cannibalizing the papers' own sales efforts, but rather bringing incremental advertisers to the papers that otherwise would not have been contacted through the traditional newspapers' sales channel.
* Outdoor. Digital billboards will accelerate, although they will not completely replace the traditional product due to regulatory and location barriers and potential cannibalization. Advertisers are still willing to overlook location-sharing for time sensitivity and negotiable pricing.
* Online agencies. 1) Ad networks are here to stay. The internet is too fragmented for advertisers to go at it alone. 2) The gap between the % of consumer time spent online (~12%+) and ad dollars spent online (~5%) will narrow, but not close, until there is more education on Internet advertising in general; better, more standardized measurement tools; and changes in marketing organizational structures, meaning internet marketers are more integrated with traditional marketers.
