For most traditional media, 2009 was an ugly year, but for print the tanking economy accelerated the digital migration for many large marketers.
Many big-spending categories made sharp cuts in print, according to Nielsen Co. data. Auto and light truck dealerships cut it 23 percent, real estate brokers 36 percent, financial brokerage services 35 percent, hotels and resorts 31 percent, and automobile insurance 26 percent.
Ad spending overall fell 9 percent last year, per Nielsen. National magazine and newspaper spending fell 19.3 percent and 13.7 percent, respectively, for the same period. Marketers who made those cuts say that online media is both more accountable and has a better chance of bigger exposure, but many say print still has its place.
One of the converts to digital media is Re/Max which cut its print spend 53 percent, per Nielsen. Instead, Re/Max used display on sites that indexed high with buyers and sellers, and the company implemented behavioral targeting, tracking consumers who had been on sites like banks where they checked out mortgage rates.
“We had done a lot of SEO, paid searches before, but in 2009 we made a much more concerted effort to serve more relevant information to consumers,” said Abby Lee, vp of Re/Max brand marketing. “It’s been very, very successful for us with much higher click-through rates. National print will be down again this year.”
Hertz Car Rental blamed the economy for its 58 percent cut in print. Hertz rep Paula Rivera said that the brand’s digital spend rose “due to the effectiveness of the medium.”
At State Farm, the print budget fell 55 percent as the insurer launched four online initiatives to reach female household decision makers. One of them was a highly popular Yahoo Webcast series featuring celebrity moms like Susan Olsen, who played Cindy Brady on The Brady Bunch. “It got a huge number of views. It’s times like that when digital is more cost-efficient because I don’t pay any more for all of those extra views,” said Ed Gold, State Farm’s advertising director. “The great thing about print, you know who the end user is. You know they’re there monthly; they pay for it, etc. But the level of viewers is not going to vary all that much unless it’s People and they put Princess Diana on the cover.”
However, another State Farm effort was done in collaboration with Meredith Corp., publisher of titles like Better Homes & Gardens. The insurance company sponsored five different programs on topics related to insurance and financial services on the company’s Better.tv broadband network.
Therein lies one of the few glimpses of optimism as print revenue is projected to continue to decline. Digital ad revenue for U.S. consumer titles hasn’t fallen along with print, even if its growth has dramatically slowed: Such spending rose 1.6 percent last year versus 114.5 percent in 2008, per a newly released annual global entertainment and media outlook from PricewaterhouseCoopers. “Inventory in the digital world is almost limitless, with a lower price point on the spending side so you can reach a lot of people more cheaply,” said Tim Corrigan, a PwC partner in its entertainment, media and communications practice. “Print’s in decline right now. At some point it will reach a bottom around 2012, and after that we’ll see some growth predicated on an overall upturn.” PwC expects print revenue to drop 7 percent this year, 3.5 percent next year and 1.1 percent in 2012 before rising 0.6 percent in 2013.
Audrey Siegel, president at media agency TargetCast, isn’t buying into a direct correlation between the dollars cuts in print shifting into digital investments. Citing data from market research firm TNS, Siegel used the auto category as an example: In 2009, print spending decreased $263 million from 2008, but she argued that print’s portion in the overall percentage of media spending remained the same.
“In regard to digital spending, there’s no reliable source in tracking it, so when we talk about print dollars migrating, it’s anecdotal,” she said. “Digital will continue to grow but not necessarily just at the expense of print. It can just as easily be a case of broadcast dollars shifting into digital. You can make the case that broadcast is a closer proximate to digital as we go forward, and digital becomes less about Web sites and more about things like digital video.”
Another vote of confidence comes from E*Trade CMO Nick Utton. The online brokerage cut print spending 47 percent last year after introducing its Talking Baby brand building campaign in 2008, with some of those dollars moved online. “Our increased focus on customer acquisition over the past year-plus has led to a recalibration of our advertising mix,” Utton said. “Regardless, print is still, and will continue to be, a key component of our marketing plan.”