• by Joe Mandese  @mp_joemandese, August 10, 2003

Veronis Suhler Stevenson's annual report on the communications industry is always chockfull of revealing statistics about the media business, and among the ones in this year's tome are two that are in themselves remarkable, but taken together speak volumes about the current and future state of advertising.

The first set of data - my personal favorite and one that I've tracked especially closely over the years - shows the amount of time consumers spend with media. Not surprisingly, the stats show the amount of time people spend with media is steadily increasing. This in itself is not a new fact. Many studies, including MTV Networks research diva Betsy Frank's periodic time usage studies have well documented this phenomenon and even explained how it is possible for people to consume more media than they have time in a day to use (the answer: multitasking).

What's revealing about VSS' analysis is that it actually breaks out the share of time people are spending with ad-supported media versus non-ad-supported media. And the alarming fact the investment banker keeps reminding us of is that people are devoting a smaller share of their time with advertising and a greater share with premium media.

You can pick bones in terms of how VSS defines and clusters these categories, but you've got to at least give them credit for trying. Few others have, especially in as public and well-circulated material as the annual Communications Industry Forecast.

Using very simple definitions to categorize "media with significant advertising support" (broadcast TV, radio, daily newspapers, consumer magazines) and "media supported primarily by consumers" (cable and satellite TV, box office, home video, interactive TV, recorded music, video games, consumer Internet and consumer books), VSS shows us that consumers still spend the majority of their time with the ad-supported kind, but are rapidly shifting to the other side.

In 1997, the benchmark year for this year's report, U.S. consumers spent two-thirds of their time (66.1%) with ad-supported media. By 2002, advertising share had eroded to 57.8% and by 2007 the banker predicts it will fall to nearly half (55.4%). In other words, by 2007 consumers will be spending nearly 27 minutes of ever hour spent with media on media that are not supported by advertising.

How long will it take before advertising represents the minority? You do the math, but it's on track to happen sometime during the next decade or so.

And while Madison Avenue seems consumed by countering technologies that will enable consumers to avoid ads in ad-supported media (ie. TiVo), the VSS tracking study seems to suggest an even bigger threat simply is the migration of consumers to premium content.

As if this wasn't enough to give ad industry pause, another equally powerful statistic highlighted in this years report appears to belie the hottest trend on Madison Avenue: communications planning.

Communications planning, for those who may not be familiar, is a "media neutral" approach to planning that is supposed to think beyond the Big 5 media (TV, radio, newspapers, magazines and outdoor) to more objectively involve other new and specialty media, as well as other forms of the marketing mix like promotion, public relations and direct marketing.

The approach has been wildly popular in Europe and, not surprisingly, like anything popularized by European media people, it is rapidly becoming the hot new discipline among the major U.S. media shops.

Sure, they may not call it communications planning per se (Starcom calls it contextual planning, MediaCom calls it real-world media planning and Universal McCann has coined communications architecture) it's essentially the same thing.

I hope this doesn't sound like I'm trivializing the practice. Communications planning is a very important development and it is smart for agencies to embrace it. In fact, communications planning promises to revolutionize how marketers invest in media, much the same way that the discipline of account planning changed the way creative agencies developed advertising campaigns. You might even say that communications planning is really just media account planning. But instead of thinking in terms of how consumers relate to a brand, the focus is about how consumers relate to a communications medium and how that in turn relates to a brand.

If it sounds complicated, it's because it is. Instead of dealing with the Big 5, or six or seven media options, communications planners must think in terms of a much broader array of communications options and they must do so while thinking about a broader array of communications objectives. It's not longer just about building brand awareness or brand differentiation via TV, radio or print. It's all about delivering the right ROI for a brand based on the best communications platform and the most important marketing objectives. That might mean a mix of Internet and direct marketing media to deliver better sales or CRM. Or it might mean a PR campaign to launch a new, under-budgeted brand with lots of sex appeal but no bucks.

How does this relate to the other important VSS statistic I alluded to? Well, according to this year's report - and as far out as VSS can see - there's absolutely no change in the marketing budget between traditional media and the other stuff.

Again, in 1997 the base year of the report, VSS estimates traditional media advertising enjoyed a dominant 56.2% share of marketing budgets. By 2007, the last year forecasted in this year's report, traditional media is projected to be 56.3 cents of every marketing dollar.

What's happening here? If marketers and agencies have truly bought into communications planning, why is there no shift taking place among marketing resources?

The only answer I can come up with takes us back to the other VSS stat, time spent with media. The reality is that for all the fragmentation of the media marketplace and all the expansion of new media and marketing options, most consumers still and will continue to spend most of their time with a couple of dominant media: TV, which represented 46.7% of the time people spend with media in 1997, will represent 46.1% in 2007. Radio will remain at the same 28.4% in both years.

The big erosion among the major media will take place among print media: magazines will drop from a 4.1% share to a 3.1% share, while newspapers will fall from 5.6% to 4.3%. The big gainer, not surprisingly, will be the Internet, which has emerged as the fastest growing of the major media. In 1997, the Internet represented only 0.8% of the time consumers spent with media. But 2007, it will have a 5.6% share.

Now as to whether these media are actually reaping proportionate share of advertising budgets, well, that's a discussion for another column.

Share Of Time Spent With Media

                                  1997     2002     2007 
Media With Significant 
Advertising Support              66.1%    57.8%    55.4% 
Media Supported Predominantly    33.9%
42.2%    44.6% 
By Consumers** 

Source: Veronis Suhler Stevenson Communications Industry Forecast. *Broadcast TV, radio, daily newspapers, consumer magazines. **Cable & satellite TV, box office, home video, interactive TV, recorded music, video games, consumer Internet, consumer books.