Manuel Angel Alonso Coto

Spending on advertisements on conventional media is set to grow by between 5 and 7% - 2,000 and 3,000 million Euros – reaching €11,000 million by 2012, according to the first report on "New scenarios for the Media and Advertising Sector: Spain 2012", prepared jointly by Capgemini Consulting, Havas Media and IE Business School.
The report, presented at IE Business School, examines key trends and scenarios in the sector expected for 2012, and is based on the responses of leading Spanish companies in the sector.

The study, which is available in our Marketing Community, provides a snapshot of the media and advertising sector in Spain and its ongoing transformation, as internet and broadband, digital supports and new consumer habits bring new ways to reach the consumer, resulting in changing business models and shifts in the value stream.

The report states that the inexorable fragmentation of audiences over the past 10 years has resulted in a drop in the market share of mainstream television channels from 69.3% to 55.1%. The growing number of advertising channels will accelerate this process, resulting in a fall in the average market shares of leading Spanish television channels of a further 20 to 30%, which will translate into drops of between 4 and 6 points over the next 5 years.

The rate of change is not currently fast in the Spanish sector. However, changes in the value chain, both in Spain and worldwide, are increasingly obvious and are expected to have a major impact on the sector with regard to products, services and new players, particularly where multiplatform convergence is concerned.

The report describes a scenario in which the Spanish media sector foresees greater competition and is currently investing more in both content and in new digital platforms. Levels of investment among Spanish television broadcasters, specifically, differ significantly from their European rivals. Television broadcasters in the UK and France invest an average of 91.7 Euros per viewer/year on program content, while Spanish firms invest an average of just 50.6 Euros on content, something that has to change in order to ensure profitable audience share levels and multiplatform broadcasting rights.

The year 2007 saw the end of close to 5 years of solid growth in the advertising sector, during which spending on advertising grew at an average annual rate of 9,3%, with a record investment of 7,984 million Euros in conventional media. Internet has been the key driver of these rates of growth, starting off slowly to later reach €482 million, with an average annual growth rate of 61%, as stated in the report.

It has been television, however, that has capitalized most on this growth. Between 2003 and 2007 spending on TV advertising grew by €1,150million, more than the aggregate of all other media, and now comprises 43.4% of the advertising market share. Moreover, television has achieved these results despite the fact that the Spanish viewer has more options than ever before (over 160 TV channels), and prime-times are increasingly scarce and permanently saturated.

TV is not only the market leader in terms of revenues from advertising. It also continues to be the form of media that generates the highest level of recall, with a mention rate of over 50%.

Technological change has produced an explosion in supply and has brought about fundamental changes resulting in more complexity and uncertainty, particularly for the entity placing the advertisement.

The study shows that the potential growth rate of the Spanish publicity market for the year 2012 stands at around 7%, which translates into €3,000 million. Said growth rate will be driven by: a more transparent (easier to measure) market, with more options that make it more accessible to different investment strategies; the continued key role of branding in the creation of value in an increasingly competitive environment; and the capacity of the sector and leading competitors to adapt decision frameworks to the new environment.

Let's trust the good omens caom true! What do you think?

Best regards.

Manuel A. Alonso Coto

Posted on 26 April 2008 in ADVERTISING, E-MARKETING

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