Study: Consumers Put Their Money Where Their Media Is, Advertisers Don't

Of the many criteria media planners use to determine the underlying value of a medium, consumer engagement is emerging as one of the most important. Agencies and the media may debate exactly how to measure such engagement, but one common ingredient is the amount of time consumers spend using a medium. On that basis, daily newspapers appear to be commanding a disproportionate value from Madison Avenue, while radio appears to be grossly undervalued, according to a Media Post analysis of just-released industry data.

The average consumer is projected to spend 173 hours reading daily newspapers in the U.S. during 2003, according to the 2003 edition of Veronis Suhler Stevenson's Communications Industry Forecast (Media Post, Aug. 11). Advertisers, meanwhile, will spend a projected $52.4 billion advertising in newspapers, second only to TV's $56.3 billion. Based on those figures, advertisers are shelling out $303.1 million for every per capita hour consumers spend with newspapers, a huge margin over any other medium.

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By comparison, advertisers will invest one-tenth of that amount -- $32.6 million - for the per capita hours consumers spend with TV. In fact, print media, which overall generate the least amount of time with consumers, reap a disproportionate amount of advertising budgets, suggesting that Madison Avenue does not currently do a very good job of allocating money on the basis of consumer involvement with media. Magazines for example, generate only 123 hours per person per year, but will attract $11.3 billion in advertising budgets. That's a yield of $92.2 million for every per capita hour, or three times the yield of television and more than twice the yield of the average of the major consumer media (TV, radio, newspapers, magazines, Internet).

The youngest of the major mass media, the Internet is rapidly increasing in terms of the number of hours people spend online, but it currently lags the print media in terms of advertising yield per consumer hour ($39.4 million).

Radio, the oldest of the electronic media, meanwhile, is reaping the lowest yield per consumer hour ($20.2 million).

The findings, while extreme, apparently are not surprising to some, who note many other factors go into both the definition of consumer involvement and advertising market shares than just the amount of time consumers spend with a medium. Another measure trumpeted by print media is so-called wantedness, or an intrinsic measure of how much a consumer wants the medium. While there also are various ways of determining such wantedness, one key factor is whether and how much consumers actually pay to get the medium.

"When people pay for a medium, this suggests higher involvement in the medium, a specific active interest in that medium's content," says Gene DeWitt, a former agency media chief and until recently president of the Syndicated Network Television Association. "So, if the name of the communications planning game is building a connection between consumer/prospects and brands/products/services, wouldn't one look more closely/favorably upon media that can perhaps deliver a more engaged audience?"

When the consumer cost/value relationship is factored using this year's VSS data an entirely different media planning picture emerges, one that indeed favors print over most other media except the Internet. While the average American consumer spends the most amount of money ($235.52 for cable or satellite TV subscriptions) and the most amount of time (1,726 hours per year) with television that investment translates into an average of 14 cents per TV hour.

Newspapers by comparison reap twice that amount (31 cents) and magazines get nearly three times as much (38 cents) from consumers for each hour they spend with their medium. The Internet, however, gets four times (58 cents) the average of the major consumer media.

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