Ipsos Study Of Marketers Shows Shift In Media Mix

Media Mix Changing For Canadian Marketers Print, Radio and TV Continue to Be Big Casualties as Marketers, Agencies Shift Spending to New Frontiers

Public Release Date: Wednesday, November 11, 2009, 11:30 AM EDT

Ipsos Reid is Canada's market intelligence leader and the country’s leading provider of public opinion research. With operations in eight cities, Ipsos Reid employs more than 300 research professionals and support staff in Canada. The company has the biggest network of telephone call centres in Canada, as well as the largest pre-recruited household and on-line panels. Ipsos Reid’s Canadian marketing research and public affairs practices are staffed with seasoned research consultants with extensive industry-specific backgrounds, offering the premier suite of research vehicles in Canada—including the Ipsos Trend Report, the leading source of public opinion in the country—all of which provide clients with actionable and relevant information. Ipsos Reid is an Ipsos company, a leading global survey-based market research group. To learn more, visit www.ipsos.ca

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Media Mix Changing For Canadian Marketers Print, Radio and TV Continue to Be Big Casualties as Marketers, Agencies Shift Spending to New Frontiers

Toronto, ON – The change in media spending patterns among Canada's marketing and advertising industries continues according to a new Ipsos Reid poll released today. In fact, when asked to assess the pace of change in the media mix over the past two years, 92% of respondent Marketers (36% a lot/56% a little) and 88% of respondent Agency leaders (36% a lot/52% a little) indicate that virtually nothing has gone untouched.

The study shows that increases in Mobile, E-mail and Online at the expense of traditional media such as print, radio and TV are partly due to the impact of the recession which has created new spending patterns using scarcer media dollars, a belief that customer relationships can be built online, continued interest from senior management (marketers) and the rapid concurrent development and proliferation of digital technologies.

So, who are the losers in the battle over digital dollars? In fact, assuming that their total marketing budget remains basically the same for 2010, responses from marketing and agency directors alike suggest that adjustments in ‘spend’ across different media will result in the continued downward trend for print, radio and television, with stagnant growth on out of Home Digital and direct mail categories: © Ipsos Reid -1Washington z New York z Chicago z Minneapolis z Seattle z San Francisco Vancouver z Edmonton z Calgary z Winnipeg z Toronto z Ottawa z Montreal

Increase

Stay the Same

Decrease

Net Change

Print

9%

49%

41%

-32

Radio

11%

63%

26%

-15

TV

10%

67%

22%

-12

Digital

12%

73%

14%

-2

Direct Mail

23%

55%

23%

0

Out of Home

And it would appear that ad revenue losses experienced by television networks may not rebound even after confidence and spending returns to consumers. Since 2007 an increasing proportion of marketers have indicated that their spend on television will decrease over the next two years; this has moved from 27% of marketers in 2007 to 42% this year --up a whopping 15 points in just three – this is clearly a function of much more than an economic recession:

Agree

Disagree

Neutral

2009

42%

41%

19%

2008

39%

45%

16%

2007

27%

47%

26%

2006

27%

50%

23% © Ipsos Reid -2-

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And the winners are… At the other end of the scale, the study suggests that online media, e-mail and mobile media will benefit the most as dollars are shifted into their categories:

Increase

Stay the Same

Decrease

Net Change

Mobile

49%

49%

2%

+47

E-mail

63%

31%

6%

+57

Online

81%

18%

1%

+80

The survey of agency and marketing professionals, which has tracked opinions as far back as 2006, shows that digital marketing continues to gain momentum with growth in usage of Email, Search, Social Network Marketing and Social Marketing.

What are the main drivers of this change? Many observers of the shift in media dollars to digital might be quick to assume that the recession is driving this change. While there is some truth to this (38% of marketers agree that this is the case), the survey results suggest that assumption would be too simplistic.

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Industry leaders were asked to indicate what they thought were the three main "drivers" of these changes over the past two years, and while there may be a slightly different emphasis by marketers versus agencies, the total and more complex picture as to what is driving change is clearly evident:

Marketers

Agencies

Audience/ Client Needs

46%

43%

Driven by Budgets/ Affordable Tech

40%

44%

Technology

38%

44%

Access to Internet/ Online Marketing

25%

33%

Changing Media Habits

17%

15%

Increased Knowledge

12%

4%

ROI/ Better Measurement Tools

10%

19%

And underlying all of this is a strengthening recognition that strong customer relationships can be created on the Internet: attested to by 60% of respondent marketing and advertising in 2008; in 2009, view t has risen to 64%.

But, a proof is a proof is a proof… While many (56%) continue to believe that that their senior management is interested in digital marketing, they also recognize that senior management is taking a good hard look for © Ipsos Reid -4Washington z New York z Chicago z Minneapolis z Seattle z San Francisco Vancouver z Edmonton z Calgary z Winnipeg z Toronto z Ottawa z Montreal

the proof in the pudding: asked what would be needed to change in order for them to spend more of their budget on digital media, respondents answered with proof that it works (24%), measurement tools (24%), better understanding (20%), and more resources (12%).

So, who are the Leaders in the Digital Marketing World? Asked who they would identify as leaders in the digital marketing world, the list has expanded well “beyond the tech world” to include CPG and retail categories:

Apple (21%), Google (10%), Nike (10%), Amazon (9%), Dell (8%), Coca Cola (7%), TELUS (6%), Rogers (6%), Starbucks (6%), Facebook (5%), Dove (4%), e-bay (4%), Best Buy (3%), Microsoft (3%), Chapters/Indigo/Coles (3%), P&G (2%), Aeroplan (2%), Pepsi (2%) and ING (2%).

These are some of the findings of an Ipsos Reid national survey, in collaboration with the Canadian Marketing Association (CMA) and Marketing magazine, conducted online with 540 Canadian Marketers/Agencies from among CMA members and Marketing Magazine subscribers in early September, 2009 in order to assess the digital marketing landscape in Canada. Specifically, the study measured current levels of familiarity and usage of digital marketing techniques among client-side marketers and agencies, gauged sentiments on the current state as well as the future of digital marketing, and compared results to surveys conducted in 2006 through 2008 to determine if there are any positive or negative trends. Where applicable/relevant results for past waves conducted in 2006 through 2008 have been shown differences between client-side marketers and agencies have been highlighted. To ensure results can be tracked, the questionnaire was kept consistent with previous © Ipsos Reid -5Washington z New York z Chicago z Minneapolis z Seattle z San Francisco Vancouver z Edmonton z Calgary z Winnipeg z Toronto z Ottawa z Montreal

versions, however, understanding that with changes in the marketing landscape and evolving technology, digital marketing too would change, some elements of the questionnaire were adjusted e.g., definitions of select techniques, adding certain techniques, and combining select techniques of digital marketing. The online survey of Marketers and agency staff was not based on a quota sample hence the respondent demographic profile may not be exactly reflective of the universe of Marketers in Canada.

-30For more information on this news release, please contact: Steve Levy President Ipsos Reid Market Research Canada East (416) 324 – 2107 [email protected]

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