Nov 03, 2009 at 09:32 PM
Shifts in Spending to Q4, Marketers Prefer 'Just in Time' Advertising
Lots of media and marketing earnings calls this week. Here's two bellwethers from today, which seem to reflect a still cautious yet more upbeat expectation for ad markets heading into Q4. For instance, Viacom is seeing advertisers purchasing "just in time" inventory, while over at MasterCard, lower-than-expected Q3 spending, may result in "the fourth quarter advertising and marketing spend [being] about 20% higher than [the] fourth quarter spend last year." Happy holidays..
In the media networks segment revenues were flat. We continued to see sequential improvement in the advertising market as we moved through the third quarter. Our domestic ad revenues were down 4%, a two-percentage improvement over the second quarter.
The inspired marketing approach illustrates the breadth and prowess of our marketing team. Over the last few months this team created and executed a comprehensive campaign for a large budget blockbuster, Transformers, pushing it to number one at the box office and a quiet, relatively inexpensive viral campaign for a very low budget Paranormal Activity, that empowered the audience, spread like wildfire, and pushed it to number one at the box office.Finishing out this year will be Jason Reitman’s Up in the Air, staring George Clooney and Peter Jackson’s, The Lovely Bones. Our 2010 slate is in great shape with several tent poles including Martin Scorsese’s Shutter Island at the beginning of the year, and Iron Man 2 and Shrek Forever After in May.
Our advertising revenues continue to reflect marketer’s preference for just in time buying. The scatter market was quite active throughout Q3 and so far in Q4 with increasing scatter premiums.
For us hits matter across all sectors of our business, and the advertising results for our major hits reflect that truth. Successful tent pole events such as the VMA’s, continue to be winners with year over year gains. Our marketing partners recognize that these events are can’t miss opportunities to reach their target audiences.
You see a lot of increases or some companies just getting into the advertising market for the first time, the technology sector. As you look forward long-term that entire sector should be a great growth opportunity for advertising. It’s a very competitive industry. New products being launched at the consumer level. Both online, on mobile so we see growth there on a long-term basis. You see some categories that suffered a lot in the recession such as automotive who are coming back in. Everybody knows that advertising does work and it drives growth for businesses. And on the other hand you still have some sectors and individual companies that still feel a little challenged or uncertain about the future and they have to shepherd their resources.
So we work with all of them and we come up with creative campaigns and we maintain relationships both existing and new ones but right now the tone is feeling better but we have to be cautious and that we’re just at the early stages of a recovery. But we do have optimism based on the fact that there are a lot of companies out there that are coming back in and stepping it up particularly in competitive categories.
Advertising and marketing spend decreased by 29.4% versus the year-ago period. The total amount spent was lower than what we had expected, primarily due to the slower redeployment of funds to growth markets and certain other initiatives in support of fourth quarter campaigns.
the lower-than-expected third quarter advertising and marketing spend was primarily due to the slower redeployment of funds to growth markets and certain other initiatives which has been shifted to support fourth quarter campaigns. As a result, we now expect the fourth quarter advertising and marketing spend to be about 20% higher than our fourth quarter spend last year.
As economies around the world are beginning to show some positive signs, we are trying to step in and take advantage of some of those opportunities and it clearly varies from one part of the world to another but as we move into what is a larger seasonally spending season, we are trying to make sure we are well-positioned and working with our customers and supporting our brand and in various promotions built around various sponsorship and other activities to lever what we see as a beginning to improve global economy.
Generally only a small slice of our total advertising and marketing spend is specifically done in connection with customer programs. Having said that, obviously we do know what our customers are planning to do from a program point of view and from a country point of view going forward and we try to line up our spend, especially our media spend, in order to be focused on those kinds of areas.
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