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Advertising spend in Ireland expected to increase to €915m this year

Written by Robert McHugh, on 23rd Feb 2017. Edited on 24th Feb 2017 Posted in General

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There will be a 3.3% increase in advertising spend in Ireland with an overall spend of €915 million during 2017.

This is according to ‘Outlook 2017’, an annual document produced by Core Media which forecasts spend for the next 12 months across a variety of media including Television, Radio, Print, Online, Sponsorship and Out-of-Home. Core Media is Ireland’s largest marketing communications group.

The report also outlines the key developments and important issues that will impact the industry this year.

The research indicates that television advertising revenue will increase by 2.5% to €243 million in 2017. ‘Live TV’- watching traditional television at the time of transmission - still represents the majority of consumption. While the resilience of live TV may come as a surprise, given the number of different viewing options now available, more than three quarters of video viewing is done on the TV set at home.
 
There is still a very high propensity to watch certain programmes live, such as sport, current affairs and one-off events, irrespective of the viewing device and these programmes tend to draw large audience.

Not surprisingly, services like Amazon Prime and Netflix are seen as the biggest threat to traditional broadcasters but perceptions often differ from the reality: 24% of homes in Ireland have a subscription to Netflix and 1% claim to subscribe to Amazon Prime (it only became available in Ireland last December). 

While subscription numbers are important, viewing time is the key metric. Data from Ipsos MRBI shows that, on average, these services only account for 3% of daily video consumption among all adults in Ireland. For adults aged 15-34, the number increases to 6%. To put this in perspective, the combined share of viewing of these services was equivalent to just half the viewing levels achieved by UTV Ireland in 2016 (among all adults).

The report predicts radio advertising spend to drop by 3.5% to €123 million this year. Despite healthy levels of listening – 2.97 million adults listen every day for an average of 253 minutes in the Republic of Ireland - radio has long had to battle for its share of the advertising pie and took only 14% of advertising investment in 2016, down from 16% the previous year.

Radio’s future success is linked to how it embraces its ‘frenemy’ – digital. Other media are succeeding ahead of radio, which is, after all, the original home of native content with its trusted voice and presenter endorsement. More research from the industry is required to show radio’s effectiveness as an advertising medium in the digital age.

Advertising around online video (also known as video-on-demand) will continue to see exponential growth of approximately 27% to €30 million, while cinema revenue is expected to increase by 4% to almost €8 million.

The report also shows ‘Streaming’ is growing in importance. IPSOS MRBI has reported that 67% of 18-34 year-olds in the Republic stream online audio on a regular basis with an average of 40 minutes listening time per session. Putting that into numbers, in the Republic, approximately 260,000 people stream music on Spotify every single day. That’s more than the combined reach of 98FM and Spin 103.8 and three quarters of the daily reach of 2FM (335,000).
 
At a macro level, research in the UK and Ireland has shown that streaming affects listening to CDs and MP3 players more than radio. However, it is clear that Ireland has now reached a tipping point with this new form of audio. For any youth targeted campaigns, streaming is a ‘must have’, delivering larger reach than many established radio stations.

Last year was a tough one for print media with revenue down by an estimated 9.4% in the Republic of Ireland. This trend is set to continue in 2017, with further decreases of 9.5% being forecast.
 
The report warns that paywalls of some kind are necessary. For any meaningful paywall to be effective it would have to be adopted by all news websites at the same time. As a small market, there is an opportunity here for Irish news organisations to set an example for other markets and demonstrate true innovation in their medium according to the report.
 
The report recommends from the consumer’s perspective, the fee for access would need to be nominal (€5 per month or €50 per year). Once subscribed, access to all participating sites should be granted. The report further recommends that one hundred per cent of the revenue generated by the paywall should go directly towards a journalism fund managed by trustees.
 
Based on an initial annual uptake of 10% of the adult population, the fund could generate more than €17 million in revenue.

While investment in online media continues to outperform the market, growth is expected to slow slightly this year, with a 13.5% increase in investment in the Republic of Ireland. This compares to a 17% year on year increase in 2016.

Commenting on the Outlook 2017 report, CEO of Core Media, Alan Cox said, "We expect 2017 to build on the growth of 2016, meaning a fourth year of consecutive growth in advertising investment levels in the Republic of Ireland. This is in line with general economic growth and is good news for the industry."

He added, "Technology is continuing to play a key role in the media world and is transforming a world occupied by a fascinating triumvirate – the marketer, the consumer and the media owner. Understanding this evolving dynamic has never been more interesting or challenging."

Source: www.businessworld.ie

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