Plenty has been written about the decline of print newspapers, less so about the magazine industry.   Now South African journalist Herman Manson points us towards the FIPP World Magazine Trends 2010/2011, which “will make grim reading for magazine publishers.”

According to the report while global advertising revenue declined by 10.6% in 2009, magazine ad spend was down by 20.2%.   And though this year, global ad revenues will be up 4.8%, magazine publishers will still see their share drop by 1.8%

Two other findings worth noting:

As with newspapers, the Internet is playing its part, with online ad spend increasing from 12.8% of all ad spend in 2009 to 16.5% on 2012.

Secondly, emerging markets are not the saviour of the magazine industry in the same way they are of newspapers.   Earlier this year an OECD report showed that while every member country saw its newspaper industry shrink (in the case of the US and UK -30% and -21% respectively), in emerging markets newspaper sales were up.

However, FIPP’s global magazine report shows that in Brazil, a key emerging market, the magazine advertising market declined by 8.5% in 2010 while in China magazine ads are expected to decline to 1.6% of all ad spend in 2012 from 2% today.

Image – Mark Hogan

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The results made me think of a series of posts penned by Adam Ferrier of Naked Australia, all about how emotional advertising that seeks to make a connection with the audience is often over-rated, and really – though it might not be pretty or win awards – more of an emphasis should be on some sort of A to B action.

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Here’s a series of infographics from the always informative Flowtown, showing the growth of social media ad spending.  Currently half of the US$3.3 billion spent on social media ads worldwide is spent on Facebook.   With Facebook now being the 500 million user gorilla, if anything I’m surprised it’s not higher.

As a % of total media advertising, it will hit 12% of the total in 2011.   No wonder so many media buying and planning agencies are (as I discovered in person on one occasion last week) are making an increasing play to manage clients’ social media strategies – PR consultancies watch out.

Another interesting chart from the infographic, people who ‘sometimes’ (green % below) turn to social media when making purchase decisions.   For travel it’s 24%, clothes 23%, groceries 15%.

That might sound low in percentage terms but quantify that in absolute numbers.   Facebook has 133 million users in the US and 28 million in the UK.   If 23% of those occasionally consult their social media friends before buying clothes, that represents 30.59 million customers in the US and 6.44 million in the UK.

(The full Flowtown infographic can be found here)

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Deloitte has now looked into this as well, releasing a report to coincide with the upcoming Edinburgh Television Festival.   Deloitte commissioned research among 4000+ adults, and found that, as much as people like myself talk about ‘social TV’, only 7% of those polled had become fans of their favourite programmes.

At the same time, the generational shift that Ofcom found in its research, also comes into play here.   Among 18-24 year olds, 46% liked their favourite shows on Facebook.

Also, Deloitte’s research is about actively liking a programme, there is of course a stage before that of people simply tweeting about live TV while its taking place, or exchanging Facebook / IM messages about it.

TV ads skipped by 86%

Another reason why combining online +TV could become more attractive for brands could come down to 86% of viewers with PVRs skipping ads. This is the result of a second Deloitte study conducted to coincide with the Edinburgh TV Festival.

In fact, it’s younger viewers, the very ones likely to be online, who are more receptive to advertising messages.   Deloitte found that while a third of over 55s said that no form of advertising impacted them, only 13% of under 25s felt the same.

Image – ccharmon

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1 – Live, scheduled TV carries a low attention threshold. Compared to other forms of media, consumers are least likely to give live TV and radio their undivided attention.     Social media and print have medium attention scores, while games and downloaded video content rank best when it comes to consumer focus (hence the wisdom of spending money on in-game promotions).

2 – We’re now more likely to ‘media stack.’ 20% of media time is now simultaneous – very often involving TV + the Internet and mobile phones.  Among the under 25s that proportion rises to 29%.  16-24 year olds managed to fit just over nine and a half hours’ worth of media into a little  over six and a half hours of actual time.

3 – The most popular YouTube channels are variations of mainstream media properties. It’s a myth that we want to spend our time on YouTube watching home made ‘world’s funniest animal’ type videos.   Instead, much as we do on TV, we want to see content with high production values, involving recognisable names.

Where’s the proof that TV + online work in tandem works?  Here are three random examples:

1 – PHD and Medialets developed a True Blood iPhone ad to support the last series.   Though we can question whether HBO’s 38% increase in viewers was down to the mobile campaign, the best click-through rate of 8.73% that the campaign achieved was way beyond the usual display ad rate of 0.02%.

2 – Speaking of click-throughs, Coke achieved one of 6%, when it ran a Promoted Tweets / Twitter World Cup campaign.   Running a World Cup promo while people were tweeting about matches made sense – Twitter saw a clear spike in activity, including a record for the number of tweets per second during the recent tournament.

3 – One of my favourite examples is this one:  US broadcaster Oxygen piloted a “real time viewing party” called Oxygen Live around one of its hit shows – Bad Girls Club.   This pulled in comments and conversations from several networks such as Twitter into an online hub while the show was airing.

Oxygen Live kicked off 30 mins before each show started, meaning that it was trending on Twitter 5 mins before each episode and there was a consistent increase in viewers over the hour.   In fact in the US West Coast when they *didn’t* run Oxygen Live, ratings were up 9% among women aged 18-49.   Once Oxygen Live launched that ratings then saw a much bigger increase, up to 57%.

And as far as a successful example of integrating TV advertising and an online campaign goes….Old Spice anyone?

As a final point, it’s worth noting that two of the new social networks that have created a buzz over the past few weeks, Miso and Glue, have a model that’s directly related to people checking into entertainment events and TV programmes, as opposed to locations.

We’ve got a more detailed summary of the Ofcom report in the latest (agency) Rabbit feed, the html version is here.

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On one hand, an OECD report (via a post by Erina Lin in sfnblog) again confirms that in the UK and US the newspaper market is in a steady period of decline.   And on the other hand, an article in AdAge, shows that digital revenues almost certainly aren’t making up the losses.

The OECD shows that between 2007-2009 not a single member country saw an increase in the newspaper market.  Note, that the OECD’s definition of the newspaper market is: “Online and offline circulation and advertising revenues of traditional newspaper publishers” – in other words everything that traditional papers do to make money.

The US (-30% decline) and the UK (-21%) very much led the way, though among English speaking countries, Australia bucked the trend, ‘only’ seeing a 3% fall in the same period.

Here is another chart from the same report showing that while seniors are still most likely to read a paper, the % who regularly read a newspaper in the US has been going down among all age groups.

50% of UK newspaper revenues down to sales
Though the US and UK lead the world in their shrinking newspaper industries, they are affected in different ways.

With 50% of revenue coming from circulations, UK newspapers are more at risk from changing demographics, with younger consumers in particular not being in the habit of buying a morning paper.   With 87% of revenue coming from advertising, US publishers have by comparison been hit harder by the general economic downturn.

US Newspapers now only have 30% of the digital advertising pie
However, circulations and ad revenues are clearly linked, and here is the bad news.

From the AdAge article, ‘Mounting Web Woes Pummel Newspapers’, US Newspapers are not succeeding in getting a decent share of the whole digital advertising pie.   Even as digital advertising as a whole increases in value, US papers’ share of the total has gone down to around 30%.

In fact, writing on Australian Marketing website Mumbrella over a year ago, journalism professor Stephen Quinn pointed out that while classified advertising used to represent 40% of newspaper profits back in 2000, thanks to the likes of Gumtree and Craigslist, that total had gone down to 23%.

More tellingly, Professor Quinn said that when looking at the New York Times, its online advertising revenues would only pay for a fifth of its news gathering budget.

Before we start writing off newspapers completely though, there are another set of figures from the OECD report worth looking at.  While the OECD countries saw their newspaper markets decline, when you look at emerging markets such as South Africa, India, China and Brazil, a completely different picture emerges.

While circulations in OECD countries went down year by year from 2003-2008 in the so-called BIICS (Brazil, India, Indonesia, China, South Africa) they steadily went up.    To take India as just one example, the % that regularly reads a newspaper went up from 17% in 2003 to 37% in 2008.

As a result, worldwide – certainly outside of the minority of countries where Internet penetration is 50% – the newspaper industry is actually a growth industry.

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There’s been a lot of research out about how social media recommendations can increase the chances of people buying products or services.

For instance, the other week Harris in the US found that 50% of under 35s followed the recommendations of social media friends, compared to 17% who acted on celebrity endorsements.   And last year Comscore released a study showing that ‘social search’ (social media activity and paid search together) was 233% more effective than search advertising alone.

However,  a recent study featured in Marketing Magazine in particular is worth noting.   It shows that people accessing an online retailer via social media are 10x more likely to buy something than a visitor that comes to the site cold.

According to Sage Pay, on average 7% of visitors to an online store will make a purchase.   However, if directed to the retailer via social media, the % of visitors who will go to the transaction section goes up to 71%.

Especially when compared with a click-through rate that can be as low as 0.02% for display ads, those figures are fairly compelling.   Yet, in the same Sage Pay survey, only 5% of marketers with responsibility for online marketing said that social media was the most effective communications channel.

This is one of the items that we featured this week at Rabbit on our regular ‘Rabbit Feed’ – more details here

Image – Daniel Weir, Via Flickr

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…or so says .Fox Networks which unveiled a ‘ground breaking‘ piece of research with Comscore to show that consumers exposed to video advertising (as opposed to online display advertising) were 28% more likely to visit a site and 2x as likely to conduct a brand search.

In addition, Comscore and .Fox found that video and display advertising saw “site visitation increase by more than a factor of seven over a four week period following exposure to an ad.”

A note of scepticism to start off with: Does an online ad really have a residual effect of four weeks? (the allotted time for people to take action).  And what about other brand messages that a consumer may have seen during that period to drive site visits as advertising rarely works in isolation.

However, Comscore’s findings that online video advertising is mildly less annoying for consumers and more effective than display is supported by other research.

Last month TubeMogul found that 16% of viewers click away on seeing a video pre-roll ad, which leaves 80%+ of the audience still intact…though for newspaper and magazine sites, exactly the ones who need to sell ads online, the news is worse.   There a quarter (25%) leave when the pre-roll starts.

Meanwhile as long as three years ago, Doubleclick found that click through rates for video advertising ranged from 0.4 to 0.74% as opposed to the 0.1 to 0.2% for normal display or banner ads.

Another finding from Comscore is also worth noting.   Only 38% watch TV online to avoid ads.   By comparison 71% do so because they missed an episode while 57% cite convenience.   Apparently people who watch online TV would also be willing to tolerate six or seven mins of ads per hour, compared to the four mins they are currently served up.

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Three US based stats from Alan’s blog:

1 – Classified advertising is down a massive 64% from the $17.3 billion it brought US papers in 2005.  Thanks Craiglist, and in the UK, the likes of gumtree

2 – Retail advertising was down 36% over the same period

3 – National advertising was down 44% since 2005

The problem is of course also a demographic one.   Apparently in the US, the average age of newspaper readers is 55+ as shown in the video below (via Steveouting.com).

And the UK probably isn’t too different in that respect, a Parliamentary Committee two years ago found that newspaper readership fell 40% among 25-34 year olds, but rose by 4% among 55-64 year olds – and if anything that trend will have increased over the past two years, given that the UK nationals have lost more than the population of Wales in readers since then.

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In other words, even on the Internet people are most likely to be directed to stuff that someone’s told them about face to face.

For regular TV, TV advertising is actually the prime source of content discovery at 46% – who said commercials were dead!  However, social media from strangers only scored 6%.   Meanwhile, just as they are for online videos, verbal recommendations are key in helping people find out about offline TV shows (38%)

Conclusions: Concentrate on online PR, and a search + social media strategy
So is the conclusion that a social media and online engagement strategy is largely a waste of time, and you might as well put your cash into both TV and search ads?  Hardly.

First of all, it’s obvious that even if someone tells you about a great new viral face to face they must have heard or read about it somewhere else.   As always off and online word of mouth have to very much work in tandem.

Secondly, stories or reviews on the Internet ranked highly (27%) in terms of helping people find out about new online videos.   In other words just as you would offline, editorial endorsement online from major blogs and news sources (the lines between the two are blurred anyway) works.

Finally, the Knowledge Networks study shows the effectiveness of search when it comes to helping people discover online video.

However if your social media and search strategy works together then search ends up being even more effective.   That’s shown by an earlier Comscore study that said that people exposed to both what they called “influenced social” and paid search had 233% heavier search behaviour.

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