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Media Trends For 2006: Consumers in Charge

Media Trends For 2006

Even the most fundamental change rarely happens overnight – indeed the biggest changes are often irreversible because they have crept up announced. So every now and again it pays to sit up and give attention to how far the world around us has evolved.

The following are our big six themes.

1 A NIAGARA OF SUPPLY BUT A PINT GLASS OF DEMAND

The total volume of traditional media consumption – viewing, reading, listening – remains broadly constant when measured across the last decade. But against this there has been a veritable explosion of channels across all media – TV being the most notable, with a doubling in the number of BARB reported channels in the last five years alone. The net result is fragmentation: in 1995 there were 225 TV programmes delivering to an audience of over 15 million, in 2004 there were only 10.

The implication: mass media no longer provides de facto scale of audience.

2 CONSUMERS ARE SPENDING FOR RELEVANCE AND CONTROL

Consumer spend is healthy across all categories. Total consumer expenditure on traditional media has grown from 1.9% to 2.1% of total household expenditure between 2000 and 2004. Add mobile phone and internet (ISP) costs and the picture becomes more dramatic still: a rise from 2.8% to 3.7%. This spend has gone on a combination of choice (more money is now spent on pay TV than the licence fee), relevance (higher-value but lower-circulation monthly magazines – the average cover price has increased by 30% in real terms in the last decade) and increasingly control (nearly a million homes now pay extra for Sky+).

The implication: consumers are increasingly available through the communities of interest catalysed and represented by relatively specialist media.

3 INCREASING COMMERCIAL MESSAGES ARE MATCHED BY INCREASED RESISTANCE

Analysis bears out what we all know to be true – that commercial messages are increasing: 48% more leaflets on your doormat than in 2000; 18% more delivered TV; 16% more DM. All this is alongside the increasing use of physical space, from sports grounds to shopping trolleys, to promote brands. To counter this, 8 million homes have signed up to the Telephone Preference Service to block cold-calling – even before BT's recent campaign advising people of its existence. Eighty per cent of the recorded ads in the million Sky+ homes are claimed to be skipped.

The implication: commercial messages must give something back to the audience; relevance of offer and entertainment value will be prerequisites to receptiveness.

4 DEMOCRATISATION OF MEDIA TECHNOLOGY

The geek may still be alive but technology has moved mainstream: 83% of the population has a mobile phone; internet and digital TV penetration are now over 50%; over a third of homes have broadband, which is growing in both speed and penetration. Perhaps most surprising is the degree of trust that we now place in media technologies that simply did not exist a decade ago. One recent study by the Henley Centre found search engines to be a more 'important' source of information even than personal recommendation. Another study conducted by MEC in the US showed that for many mums the computer is her 'best friend' – a level of relationship few would have predicted even in recent years.

The implication: digitally embracing consumers will need digitally driven communications.

5 MANAGING ENERGY: STREAMLINING AND ELABORATION

Time is a real constraint, but a bigger constraint for most people is their finite resources of energy.

Oversupply – in all areas of life – combines with increased on-demand delivery so that consumers can now elect where, when and to what they devote their energy. This means that on some occasions people want a fast, no-frills, 'streamlined' service – text-message bank balances or self-scanned grocery shopping. On other occasions they want a far richer, 'elaborated' experience – a personal shopper, a customised product specification or a much deeper media experience. Media mirrors this: with streamlined, headline-only formats of news or text message updates of Big Brother at one end of the scale, through to interactive, searchable archives of magazine content or DVD extras at the other. (see Figure 1)

The implication: consumers will increasingly want a range of depth of communication-tiered messages from the most streamlined brand statement to the most elaborated interactivity.

6 MEDIA MODELS ARE RE-INVENTING

Media businesses are re-inventing as service businesses with content at the core. As they become less reliant on advertising – Sky Bet will be a bigger revenue stream than TV advertising for Sky in 2006 – so they become more open than ever before to a dialogue with commercial partners that goes outside historical formats.

The implication: an unprecedented favourable climate for innovation.

This article featured in Market Leader, Spring 2006.

NOTES & EXHIBITS

FIGURE 1: AVERAGE WEEKLY HOUSEHOLD SPEND (EXCLUDING INTERNET/MOBILE PHONE)


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