Archive for May, 2014

Digital advertising spending is expected to grow faster in media and entertainment than in other U.S. industries. The new report by eMarketer says a key driver behind the projected increases is the heavy use of video and rich media ads, the two fastest-growing ad formats, by marketers of news media, movies, TV shows, games and music. These marketers are also big investors in mobile advertising, which the firms says “makes sense given the migration of media and entertainment consumption toward tablets and smartphones.”

The eMarketer report, The US Media and Entertainment Industries 2014: Digital Ad Spending Forecast and Trends, notes that advertising objectives in media and entertainment campaigns are as complex as the industries themselves. Sometimes marketers are trying to drive specific outcomes — digital subscriptions, in the case of a news publisher, or bodies in seats, in the cases of theatrical film openings or concert tours. Other times media and entertainment firms use advertising to burnish their brands. Examples of these types of ads might include homepage takeovers and sponsorships. Overall, the report says, U.S. media leans toward the direct-response side, with roughly a 60-40 split between direct response and branding. Conversely, the breakdown in entertainment spending is almost the reverse, with 36.5% of the total going to direct-response advertising and 63.5% to branding. This mix between these two advertising objectives puts the combined U.S. media and entertainment industries at an approximately 50-50 split, which is in line with computing products, telecom, and health and pharma.

eMarketer forecasts digital ad spending by the U.S. media and entertainment industry to grow from $4.23 billion last year to $8.54 billion by 2018. Spending is expected to increase by 21.6% this year to $5.15 billion, with percentage gains decreasing in coming years, but still in double digits by 2018.


The proliferation of digital video has raised the specter of large-scale “cord-cutting” by millennials. The plausible premise is that millennials get so much video online that they see little incentive to pay for cable or satellite service or for premium channels. However, buzz about this topic has gotten ahead of changes that may someday manifest in actual behavior, reports eMarketer. The research firm’s new report, Millennials’ Media Usage: What’s Distinctive, What’s Not and What Matters Most, emphasizes that it is second nature for millennials to exercise personal choice and program their own media day – even to the point of seeing themselves as “co-creators” of their media environment. But most are still including cable, satellite or telco TV as part of their daily media experience.

Millennials are indeed more likely than their elders to forgo pay TV services, the report notes, as one would expect of people who have tight budgets and the technological savvy to access tons of free online video. But they have yet to cut those cords en masse. November 2013 polling from Verizon Digital Media Services found 13% of millennials making do without any pay TV service — a higher number than for nonmillennials (9%), but, eMarketer notes, not high in absolute terms. The Verizon survey found that 49% of millennials (age 16-34) have cable service, vs. 56% for people 35-64; 26% have satellite TV vs. 27%; and 12% have telco fiber optic pay TV vs. 8% of non-millennials.

Still, there is some basis for the perception that millennials want to spend less for TV service. An Altman Vilandrie & Company survey in July 2013 found that 47% of 18- to 24-year-olds and 40% of 25- to 34-year-olds spent less on cable due to the availability of digital video. But the eMarketer report adds one caveat: People sometimes profess a greater frugality than they really practice.

An Ipsos MediaCT poll in October 2013 found that 2% of 18-34-year-olds said they had canceled their pay TV service in the previous six months – exactly the same percentage as for all respondents. 7% said they had never had cable/satellite service – also the same percentage as for all respondents. So, only 9% of millennials identified themselves as cord-cutters or “cord-nevers.” 29% did say that they had cut back on their pay TV services in the previous six months, slightly more than the 28% figure for all respondents. 62% of millennials said they had maintained or added to their cable/satellite services, just a single point less than the 63% figure for all respondents to the Ipsos survey. Overall, from the various sources cited in the eMarketer report, millennials are more likely than other groups to cut the cord – but only slightly so.