EuroMedia Trends 2005 Marketers

1
EuroMedia Trends 2005 Marketers Perspective
from 14 European Countries
2
Study background

• The media landscape is changing fast and becoming
  highly fragmented
• Consumers media consumption habits have entered
  a new era with the introduction of new
  communication technologies leading to more
  connection opportunities

BACKGROUND

• Does the allocation of marketers media budgets
  reflect these new media and message consumption
  patterns?
• Which media do marketers perceive as being the
  most effective at meeting different marketing
  objectives?
• What is the role of different media in integrated
  marketing campaigns?

QUESTIONS
3
EuroMedia Trends 2005 - European study of
marketers conducted by Millward Brown on

• Marketing and media decision-making
• Media and marketing spending

TRENDS

• Marketing and media effectiveness

PERCEPTION

• Marketing/media trends in Europe (with a focus on
  Western Europe)

FORECASTING
4
A robust multi country and cross industry study
on trends, and perceived media effectiveness
Europe Western Central Eastern Germany,
France, Croatia, Czech Rep., Italy, Spain,
Portugal, Hungary, Greece, UK Poland,
Romania, Russia, Turkey
COUNTRIES
704 interviews with marketing decision makers
in key industries
SAMPLE
Automotive, Beauty/Toiletries, Entertainment,
Financial Services, Food/Beverage, Media,
Pharmaceutical, Retail, Travel/Transportation,
Telecom, Technology
INDUSTRIES
5
About the Quantitative Study Sample
Travel/ Transportation
Industries Represented
Telecom
Automotive
Technology
Beauty/Toiletries
Education (non public)
Retail
Entertainment
Pharma- ceutical
Fashion/Apparel
Media
Financial Services
Food/Beverage
Q.A1 Which of the following best describes your
industry?
6
Sample design from small to large budgets
Euro Media Trends Respondent Profile

• 40 - 5 Years or Less
• 31 - 6 to 10 Years
• 20 - 11 to 20 Years
• 7 - 20 or More Years

Years in Marketing
Total Marketing/Media Budget Size
47
34

• 60 - Company
• 28 - Division
• 11 - Brand

Budget Responsibility
19
QA3. Overall, how many years have you been in
marketing? QA5. Are you responsible for managing
the marketing/media budget for QF8. What is the
estimated size of your company's overall
marketing/media budget, in millions of ?
7
Main findings

• Biggest budget cuts are expected in leading W
  countries. Many big spenders are cautious, while
  CE marketers are more optimistic about their
  budget growth expectations

BUDGET

• In Europe, marketers favor traditional media
  channels to achieve diverse marketing objectives,
  while in the US trial and repeat has already
  switched to online
• European marketers seem to focus more on short
  term sales building, risking sacrificing longer
  term brand equity building
• Online marketing in Europe is becoming more
  popular (mostly in new customer acquisition and
  by offering measurable ROI) but is still at a
  level below the US (c.f. penetration issues)

'
MEDIA

• In W integrated marketing campaigns are less
  widespread than in CE

IMC
8
About Those Budgets
9
Only around 1/3 of the Italian decision makers
are optimistic about growing their budgets in
2005, in line with the rest of W. CE marketers
are most optimistic.
Increase expected for 2005
CE
? 58
Biggest spenders in Western Europe are
comparatively the least optimistic the picture
is more consistent in CE
? 40
EU
? 37
W
? ITALY 30
From other studies conducted in the US we know
that there, optimism amongst marketers is above
the European average.
QE3. How does your total 2005 marketing/media
budget compare to the budget for 2004?
10
Only around 1/3 of the Italian decision makers
are optimistic about growing their budgets in
2005, in line with the rest of W. CE marketers
are most optimistic.
2003 ? 2004
expected for 2005
increase
decrease
EU
? 40
IT 13
Low GE 22Top ES 48 ITALY 33
W
? 37
? ITALY 30
Low CZ 43Top RO 84
? 58
CE
From other studies conducted in the US we know
that there, optimism amongst marketers is above
the European average.
QE2. How does your total 2004 marketing/media
budget compare to the budget for 2003? QE3. How
does your total 2005 marketing/media budget
compare to the budget for 2004?
11
Most positive markets going into 2005 RO and
RU. Least optimistic DE and FR
marketers plan increase
marketers plan decrease


QE3. How does your total 2005 marketing/media
budget compare to the budget for 2004?
12
Biggest spenders in West Europe are comparatively
the least optimistic the picture is more
consistent in CE
West Europe
Central Eastern Europe
in
QE3. How does your total 2005 marketing/media
budget compare to the budget for 2004?
13
TV is more popular amongst those with larger
budgets Average of perceived share of TV split
by company size
West Europe
Central Eastern Europe
in
QF1. To the best of your knowledge, how was your
total 2004 budget allocated across each of the
following media in ? Data for TV only
14
Marketers grow spending on media linked to short
term sales buildingOf all media that increased
in 2004, Magazines are getting the biggest
increase in Europe, driven also by Italy
of Marketers said they would grow their
particular media budget
EU EU US US
2004 vs. 2003 2005 vs. 2004 2004 vs. 2003 2005 vs. 2004
Online 28 26 57 54
Magazines 25 22 34 30
Direct Mail 20 21 38 34
Newspaper 19 15 28 28
Outdoor 15 15 23 19
Radio 13 11 27 25
TV 12 10 37 33
Online, Magazines, Direct Mail perceived to
offer better targeting and ROI
QF2. How does your 2004 marketing/media budget
compare to your 2003 marketing/media budget for
the following media? QF3. How does your 2005
marketing/media budget compare to your 2004
marketing/media budget for the following media?
15
Amongst on-line users, web advertising will grow
most over the next 5 years in EU There are
growth expectations also for E-Mail Marketing in
Italy
of Marketers naming the one online application
that will grow the most over the next 5 years.
(in ) Europe Italy
Online Promotions 25 20
E-Mail Marketing 25 32
Web Advertising 35 28
Growth expectations for Web Advertising highest
for CE countries
Base Usage of online marketing
Growth expected for the next 5 years for Web
Advertising 60-70 Croatia, Russia,
Romania 50-59 Turkey 40-49 Germany,
Portugal, Greece, Czech Republic 30-39
Hungary 20-29 Italy, France, UK, Poland 19
or less Spain
?
?
?
?
?
?
Q.F7 What is the one area within your companys
online marketing budget that you feel will grow
most over the next five years?
16
European computer and online penetration is
growing fast

• June 2002 9,57
• January 1996 0,73

Global internet penetration
of world population
2001 to 2003 US 62.44 65.98 Europe
19.08 22.43
PCs per 100 inhabitants
Growth rates (2000-2005) European Union 131,6
Rest of Europe 341,9 Italy 116,7 US 110,7
Internet penetration
CE countries grow at double digit rates since
2000. The highest Romania from 6 (2002) to 23
(2003)
17
Internet usage growth rates (2000-2005) go
through the roof. Particularly in the CE
countries, where base internet penetration is
still behind W
Internet penetration ( Population)User Growth
(2000-2005)
US Internet penetration 2005 67 (of the
population) User Growth (2000-2005) 110
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Marketers' Opinions AboutMedia Effectiveness
19
Media Effectiveness Evaluation
We asked marketers to give their opinions on
media effectiveness for selected media.
6 ATTRIBUTES EVALUATED
Building Brand Equity
New Customer Acquisition
Providing Measurable ROI
Ability to Retain Customers
Ability to Reach Target Audience
Offering Efficiency
20
TV leads in building brand equity
But based on those companies which use TV within
their media mix
6 ATTRIBUTES EVALUATED
Building Brand Equity
New Customer Acquisition
Providing Measurable ROI
Ability to Retain Customers
Ability to Reach Target Audience
Offering Efficiency
TV
RADIO
21
Media that deliver short term ROI are rated
highest in reaching diverse marketing objectives

Online is becoming recognized across attributes
6 ATTRIBUTES EVALUATED
Building Brand Equity
New Customer Acquisition
Providing Measurable ROI
Ability to Retain Customers
Ability to Reach Target Audience
Offering Efficiency
Promotion
Online
Promotion
Promotion
Promotion
Promotion
22
TV leads in building brand equity
Build Brand Equity
But based on those companies which use TV within
their media mix
Numbers represent of respondents rating the
medium "extremely" or "very" effective for the
stated attribute.
Base Media used within the marketing mix
Numbers represent of respondents rating the
medium "extremely" or "very" effective for the
stated attribute.
QC3. We are interested in your opinions about
media effectiveness. Please rate the media below,
on a scale of 1 to 5, in terms of their ability
to deliver on the following attribute.
23
Media that deliver short term ROI are rated
highest in reaching diverse marketing objectives

Offer Efficiency
Measurable ROI
Direct Mail Promotions Online Magazines Newspaper
Outdoor TV Radio
Direct Mail Promotions Magazines Online Newspaper
Outdoor TV Radio
Numbers represent of respondents rating the
medium "extremely" or "very" effective for the
stated attribute.
Numbers represent of respondents rating the
medium "extremely" or "very" effective for the
stated attribute.
QC5QC8. We are interested in your opinions about
media effectiveness. Please rate the media below,
on a scale of 1 to 5, in terms of their ability
to deliver on the following attribute.
24
Online is becoming recognised across attributes
Customer acquisition
Retain customer
Reach target audience
Direct Mail Magazines Promotions Online Newspaper
TV Outdoor Radio
Promotions Magazines Direct Mail Online Newspaper
Outdoor TV Radio
Direct Mail Promotions Magazines Online Newspaper
TV Outdoor Radio
Numbers represent of respondents rating the
medium "extremely" or "very" effective for the
stated attribute.
Numbers represent of respondents rating the
medium "extremely" or "very" effective for the
stated attribute.
QC4QC6QC7. We are interested in your opinions
about media effectiveness. Please rate the media
below, on a scale of 1 to 5, in terms of their
ability to deliver on the following attribute.
25
Continued Importance of Online Media..
26
Online is becoming a specialism within European
marketing departments, particularly among the
biggest spenders
Having a centralized online marketing group at
the company
Europe US
Compared to
42
73
ITALY 37
In Western Europe 44 of respondents said they
have centralised online marketing groups (54
among the biggest spenders) while in CE this
ratio was 28
The US data represent learning from different
studies conducted by Millward Brown
Q.D2 Do you have a centralized online marketing
group at your company?
27
Leading to half of European marketers using a
specialist external agency for online
supportOnly 1/3 of the Italian Companies works
with an external agency
Working with separate agency for online support
Europe US
64
46
Biggest spenders 51
W CE
61
44
The US data represent learning from different
studies conducted by Millward Brown
ITALY 33
Base total
Q.D4 Does your company work with a separate
agency for your online marketing/media efforts?
28
How Media is Being Usedto Meet Marketing
Objectives
29
What objectives are brand marketers trying to
meet definitions.
Awareness Creating awareness of new product
Trial Repeat Retaining customers and
increasing loyalty
Awareness Keeping established product top of mind
Trial Repeat Encouraging trial
Trial Repeat Purchases
Awareness
Trial Repeat Acquiring new customers
Consideration
Consideration Expanding the brand's consideration
Consideration Communicating the brand's position
30
TV and Magazines were named most effective for
creating awareness and keeping established
products top of mind
Awareness Creating awareness of new product
Word of Mouth
Outdoor
Magazines
TV
Awareness
Awareness Keeping established product top of mind
Magazines
TV
Outdoor
31
Traditional media still have highest confidence
of European marketers in boosting consideration
Consideration
Consideration Expanding the brand's consideration
Consideration Communicating the brand's position
TV
Newspapers
Magazines
32
While in Europe marketers vote for traditional
media channels to increase trial and loyalty, in
the US Online channels excel on response-based
efforts
Direct mail
Magazines
TV
Trial Repeat Retaining customers and
increasing loyalty
Trial Repeat Encouraging trial
Trial Repeat Purchases
Direct mail
TV
Newspapers
Trial Repeat Acquiring new customers
Magazines
TV
Newspapers
33
TV and Magazines were named most effective for
creating awareness and keeping established
products top of mind
European Top 3 most effective media for awareness
mentioning using the medium to meet stated
objective
QC1. For each of the media you use, please
indicate the business/marketing objectives you
are trying to address.
34
Traditional media still have highest confidence
of European marketers in boosting consideration
European Top 3 most effective media for
consideration
mentioning using the medium to meet stated
objective
QC1. For each of the media you use, please
indicate the business/marketing objectives you
are trying to address.
35
While in Europe marketers vote for traditional
media channels to increase trial and loyalty, in
the US Online channels excel on response-based
efforts
Trial Repeat
European Top 3 most effective media for Trial
repeat

• Our learning from other studies conducted in the
  US is, that main channels for trial repeat in
  the US are
• Online (Web Advertising, Email Search
  Marketing, Online Promotions)
• Direct Mail

QC1. For each of the media you use, please
indicate the business/marketing objectives you
are trying to address.
36
Integrated Marketing Campaigns
37
59 of European marketers claim that they develop
Integrated Marketing Campaigns Italian
marketers seem to use quite less Integrated
Marketing Campaigns in comparison to the W
average level

• Europe US

59
89
But there is no universal definition!
W CE
78
56
ITALY 43
No strong differences in W on the basis of the
companies' media budget availability
All marketers use different words to describe
integrated marketing campaigns
The US data represent learning from different
studies conducted by Millward Brown
QD5. Does your company execute integrated
marketing campaigns?
38
Some definitions of Integrated Campaigns from W
and CE
Use of all available communication tools with
such a proportion in order to maximize the
effectiveness on my target audience
A campaign with several communications means
Convey the message via several channels, doesn't
need to be identical, must have the same content"
Integrated marketing is about multi-channel
marketing and it stands for cohesive messages,
well-chosen channels, well-spaced (planned) in
time sales activities are strongly connected as
well
The complex use of marketing activities which
are developed by creative, as well as by media
and by BTL, all possibilities, kinds, ways of
communication with reference to the present
target audience
QD5aa. What does integrated marketing mean to you?
39
Integrated Marketing Campaigns are becoming more
widespread.The majority of the Companies has
been using IMC for more than 3 years
of Integrated Campaigns in total
IT 30
IT 10
IT 55
6 DK/ no answer
Base using Integrated Marketing Campaigns
QD5a. When did your company start doing
integrated marketing campaigns? QD5b. For this
year, out of all the marketing campaigns that you
are aware of, how many are integrated marketing
campaigns?
40
Opportunities and Conclusions

• In W there is a cautious optimism about marketing
  budget increases far below the US or CE
  expectations.
• Marketers with medium size budget are the most
  optimistic about their budget growth, while big
  spenders stay very conservative

BUDGET

• European marketers still apply traditional
  approach to planning media budgets giving
  preference to media channels supporting short
  term sales
• Online marketing/web advertising is starting to
  become more important in the marketing mix in
  both Western European and CE countries.

MEDIA

• Almost half of W marketers are not yet converted
  to integrated marketing campaigns that take
  advantage of the strengths of each medium in a
  holistic way
• From the other research we do, we know that
  consumers are using multiple media in multiple
  ways and are available to be reached beyond
  traditional communication channels

IMC