Starcom's Outlook 2015

OUTLOOK 15

CONTENTS

INTRODUCTION

2

THE CONSUMER

4

TELEVISION

6

NEWS MEDIA

8

ONLINE

10

RADIO

12

OUT OF HOME

14

CINEMA

16

SPONSORSHIP

18

DIRECT MARKETING

20

RETURN TO GROWTH At the time of writing, the latest consumer confidence data has just been released, headlining a nine-year high in the Republic of Ireland. This rising confidence is finally feeding into retail sales in the South, which finished the year strongly, with a 5.1% annual lift in December. However, the Northern Ireland market struggled, with a year-on-year decline in footfall of 8.7% in December. This contrast is a stark reminder of the great differences that exist between the two economies on this island.

TOTAL MEDIA SPEND (€M) 794.8

747.4

717.0

Advertising investment levels in 2014 increased for the first time in seven years in the Republic with a lift of 4.2%. Demand in the North grew by a lower rate of 3.1%. Looking to this year, despite a bumpy first month, we expect spend levels to grow by 6.3% in the South, with digital driving forward at a rate of 17.5%. Growth will edge up in Northern Ireland, where demand will increase by 3.6%.

FEAR OF RISK The marketing communications industry can be slow-moving and conservative. Despite the creativity of the work produced, it is an industry that is too hesitant when it comes to risk taking and too slow to embrace transformation. Given the pace of change we are seeing in media you would expect agency and marketing professionals to be constantly experimenting and innovating, but this is not the case. When ideas are proposed they are often killed because they can’t be measured, or there is too much effort involved, or people are just ‘too busy’. There is no revolution; the industry just evolves at a slow pace.

Initiatives that are categorised as ‘innovation’ are often just programmes that are built on previous ideas. We are all guilty of falling into this trap, where we become satisfied with incremental shifts from year to year. If companies like Apple, Google and Samsung were as conservative as our industry, there would be no iPhones, Google Maps or curved televisions.

193.5

186.7

181.0

2013

2014 ROI

2015 (f) NI

Source: Core Media Estimates Excludes Sponsorship & Direct Marketing

Most of us agree that taking risks is important for innovation, but in far too many cases, we don’t act like we believe this. Many of us need a framework or permission to be bold, to be told that it is ok to try new things. In fact a structure is essential if you want to see a company-wide step-change in approach. Innovation rarely comes from a eureka moment. As odd as it may sound, you must plan to be innovative.

A method that we like is the 70/20/10 investment principle that The Coca-Cola Company embraced in 2011. This is a simple, memorable and motivational approach that clearly sets out how the company wants its marketing teams to deploy their resources in a way that keeps its brands moving forward.

70

Coca-Cola states that 70% of its budget should be invested in established, low-risk platforms; the kind of activity that “pays the rent”, as the company puts it. However, developing content for this portion of the budget should only take 50% of the available time.

20

The company expects 20% of the spend to be allocated to new or emerging trends that are starting to gain traction with consumers.

10

This is the exciting bit; 10% should be invested in brand new ideas that are completely untested. The company is prepared for them to succeed or fail, and to celebrate either outcome. The other interesting aspect to this model is that the second half of the team’s time should be spent on the 20/10 pieces, as this is where new ground is broken and energy is most required.

An approach like this provides a framework in which innovation can thrive. It allows people to experiment in a proportional fashion. It also prevents some great ideas from being drowned by insisting on proof in advance. We recommend this model; if all of us adopted such an approach, the industry could break exciting new ground and attract great new talent.

2

INTRODUCTION

70

20 10

LEARNING It is challenging for marketers to keep abreast of the key developments in the industry. Despite the fact that the marketing communications industry is slow moving, the global media business is accelerating. We have never seen so much change.

Media accounts for the minority of a marketer’s days, but the majority of a marketer’s budget. At a time when things are moving so quickly, it is so important for us to keep up to date. Marketers do not need to be experts in what’s happening across all media, but they need to be bang up to date with the key trends, issues and opportunities, so that they can interpret the advice they are receiving, approve communications plans and write better strategies for their businesses. This is an exciting time to be working in the industry, but the level of complexity can be a bit overwhelming if you are not up to date.

The Core Knowledge Learning Centre

There is a great deal of research available to support the positive benefits of continuing professional development.

Here’s a compelling one; according to the American Society for Training and Development, investment in employee training enhances a company's financial performance. An increase of $680 in a company's training expenditures generates a 6% improvement in total shareholder return. It achieves this by improving performance in quality, productivity, speed, motivation, leadership, and communication.

With this in mind, we built the Core Knowledge Learning Centre to provide marketers, media owners and creative agency professionals with bite sized courses across all forms of marketing communications.

The course content covers demystifying media buying, how to get better media plans from your agency, the role of data, experience planning, marketing in a mobile world, the power of search, social media, budget setting etc. In total, there are 16 courses available. The courses are run by people who are creating communication solutions for clients every day. Full details are available at coreknowledge.ie. I hope you find it useful.

I also hope you enjoy the following pages, which provide an overview of the key developments we expect to see this year across each sector of our industry.

If you would like to discuss any of the issues, please feel free to call me on +353 1 645 2951.

In the meantime, best wishes for 2015.

Craig Farrell

AN INCREASE OF $680 IN TRAINING PER EMPLOYEE GENERATES 6% LIFT IN SHAREHOLDER RETURN 3

The last six years of commentaries, from all sources, forecasting the behaviour of the Irish consumer have been somewhat reminiscent of Groundhog Day. Each year since 2008 commentators waited eagerly, more in hope than expectation, for a sign that consumers were moving out of the shadow cast by the recession. Each year realism trumped optimism.

Not this time. The good news is that for the Republic of Ireland, 2014 was the day after Groundhog Day. The cycle was broken, and in 2014 a renewed Ireland began to move forward again. Unfortunately, the same cannot be said for Northern Ireland. Although there was some growth in the economy last year, 2015 has not started well for the region, with the retail sector hit hardest. The unfavourable sterling-euro exchange rate will also hamper recovery in 2015.

However, in the South 2014 was a year of re-awakening. In years to come, we may well look back on it as a catalyst for major change in Irish society; perhaps even the moment when the sod was turned on The Second Republic. The recession was largely protest free, but post-recessionary Irish people have chosen to own the recovery.

2006 Ireland was A or B, Fianna Fail or Fine Gael, Indo or Times. Now, we have a much larger choice in all categories and the lines between categories are blurring too. In 2006, we settled for A or B, but now if we are not happy, we will go looking for, or create, C. Witness TheJournal.ie, the craft beer revolution, or that 49 new start-ups are established here every day.

We’ve changed. We have become more self-aware, more decisive and more empowered to improve our lot. We are challenging the institutions of politics, religion and taxation through water protests, the rise of independents, the Anti-Austerity Alliance and Sinn Féin, allied to calls for referenda on blasphemy and equal marriage rights.

We now make more conscious decisions about how we live our lives, and this presents new challenges for advertisers. 2014 marked the death of the meaningless brand in Ireland. Badging, and empty statements won’t cut through anymore.

Just low cost won’t cut it either. If a brand doesn’t demonstrate our shared values of honesty, quality and real experiences over and above price, we will ignore it. Brands can no longer just ‘say’ things consumers like, they must ‘do’ things consumers respect.

2014 showed that ‘Made in Ireland’ is an empty statement, but it opened the door for brands ‘Made for Ireland.’

Just look at the success of Lidl’s strategy.

Enthusiastic film fans have calculated that Bill Murray’s character spent eight years reliving Groundhog Day. Almost as long as we spent in recession. Both emerged from their experiences deeply transformed.

THE

CONSUMER 4

01 WELL’TH

02 GROWTH

03 CHANGE

2015 is the year when Irish consumers make wellness a real priority. A healthy body will continue to be important, both in terms of the food we eat (rise in organic sales & ‘free from’ products) and the exercise we take (rise in fitness activities). Technology has advanced to allow us measure and track our progress with wearables like Samsung Gear Fit, Fitbit & Nike+.

In 2015, more than one million Irish adults will consider purchasing a wearable device (source: Silicon Republic).

Ireland can be legitimately optimistic; all indicators suggest we’re entering a period of growth in the Republic. Unemployment is set to fall below 10% for the first time since 2008, the ESRI predicts GNP to increase by 4.6% this year and consumer confidence is at its highest for nine years. However, not everyone is feeling it; the recovery is uneven and still tentative.

Lessons have been hard learned. Consumer demand for the traditional post-Christmas sales period was particularly strong, meaning we’ve clung on to the smart shopper mentality.

2015 will be a year of change in the Republic.

Political change is in the air, with the rise of the independents & Sinn Féin (which combined are polling close to 50%) and a new political party to challenge the status quo. Social change has begun with the Irish Water debacle demonstrating that the Irish public is willing to demand change.

Technological transformation is ongoing, making changes in shopping behaviour and service providers easier than it has ever been. 2015 will also see a change in how we view ourselves. This year will see Ireland compete on a global stage, in the Rugby World Cup and the Cricket World Cup. Expect a change in confidence and sense of national pride.

On the eve of the 1916 centenary celebrations, 2015 is also likely to be a year where we reflect on how we’ve changed and what it now means to be Irish.

A healthy mind will also become increasingly important in 2015. Mindfulness will become a familiar term, as Irish people search for balance and purpose in their lives. This trend will also influence businesses, as increasingly brands and companies will be judged by their consumers and their employees on their meaningful purpose.

IMPLICATION With a greater focus on well’th, Irish consumers will be actively looking for products and services that can help to deliver on this. Opportunities for businesses abound in the wellness space, from new product development in healthy snacking, drinking or meal solutions, to partnerships and sponsorship, as the trend becomes increasingly important. What can your brand stand for or deliver to capitalise on this trend in 2015?

Notwithstanding the cautious consumer mind-set, we should expect 2015 to be a strong year for white goods, foreign holidays and motors as some big purchases will finally be made. We’re not quite in the luxury space yet, but expect the 2015 consumer to reward themselves for some tough years. The middle ground will become shaky as consumers begin to choose either recession borne discount options or premium brands and services.

IMPLICATION 2015 will be a period where penury makes way for reward for Irish consumers. Brands can share and facilitate this confidence and share in the sense of release. Remember, however, that the Irish consumer is now a hardwired bargain hunter. You need to ensure that your growth strategy continues to have value embedded into its plans.

IMPLICATION There are no sacred cows left for Irish consumers.

2015 will be a year when change is embraced. Your brands and services can take advantage, but will need to evolve to capitalise on the advancements taking place. Change in national pride will be significant. 2015 will represent a big opportunity for brands to define their role in modern Irish life. You need to determine how your brands can help support and celebrate a new found sense of national pride, and become a relevant part of modern Irish life.

ROI ECONOMIC INDICATORS 90.3 62 26

2009 2014

53 13.110.6

1.2

IRELAND EMERGED FROM GROUNDHOG DAY IN 2014

-10.6 Business Confidence

Consumer Unemployment Confidence

Retail Sales Ex Motor

Source: KBC/ERSI Consumer Sentiment Survey, KBC/Chartered Accountants Business Sentiment Survey, Central Statistics Office

5

Television will definitely grab the majority of headlines this year; 2015 is going to be a battleground. Anyone who has seen an outdoor poster in the last month realises that a war for viewers has begun. In the face of increasing competition, most channels are investing in home produced content to set themselves apart. For advertisers, this offers an unprecedented opportunity to leverage the power of television through partnerships with broadcasters, while benefitting from competitive rates and added value.

Despite a slow start in January, we expect spend on TV to grow by 5% this year in the Republic of Ireland, building on a solid 4% increase last year. Growth in Northern Ireland will be softer than the South at 3%.

UTV Ireland is the first new national commercial channel to launch since Channel 6 in 2006.

It launches with strong credentials in ‘Coronation Street’ and ‘Emmerdale’, but to meet expectations, it will need to build on these two shows with relevant home production. The quality of UTV Ireland’s news output deserves credit, but the channel will need to broaden its investment in content to flourish. Hiring key broadcasters, like Pat Kenny, is a move in the right direction.

TV3 has responded with conviction to the challenge so far. Its new soap, ‘Red Rock’, has been received well by critics and viewers, but it remains to be seen how it will perform in the months ahead. With the financial restraint of the ITV studios deal now removed, TV3 is free to invest over €10 million in home produced content. It is spending this money wisely on strong product but TV3 has had a challenging start to 2015; although its sister channel 3e has mitigated this somewhat.

However, this is not just a TV3 vs UTV Ireland fight. In 2014, Sky Media launched four new opt-out channels and has plans to launch more in 2015. In December 2014, Channel 4, More4 and E4 combined, delivered over 10% share of commercial impacts for ABC1s for the first time. In the face of all this competition, RTE will also be forced to react. As share of viewing for some of its audiences falls below 25% for the first time, it needs to fight harder to keep its place on campaign schedules. While ‘Love/Hate’ and ‘Charlie’ may steal the headlines, balancing a public service remit with commercial success remains a difficult task.

With the battle for viewers raging and streaming services such as Netflix knocking on the door, this is going to be the most interesting year yet. Media journalists are already having a field day.

TELEVISION 6

01 MULTI-PLATFORM AV SOLUTIONS

02 PRECISION MARKETING

03 THE DISAPPEARING TV SET

2015 is the year of choice. Advertisers have over 60 linear TV channels to choose from. Each broadcaster has VOD solutions. YouTube now delivers 81% monthly reach. 2015 will be the breakout year for multi-platform, multi-format campaigns. TV spots are no longer enough.

On a daily basis, 96% of adults claim to watch some form of television content. So, while TV continues to offer the highest daily and weekly reach of any medium in Ireland, wastage concerns many advertisers when planning activity. With the launch of Sky AdSmart in Northern Ireland and new planning resources in the South, advertisers can now target the audience they need, not just based on traditional audience breakdowns of demographics, but also by lifestyle or brand targeting.

By the end of 2014, over 12% of Adults aged 25-34 in Ireland did not have access to a TV set at home.

Yet, we know overall consumption of television content across all devices increased by 16% in the same year.

This will grow to 20% of all viewing by the end of 2015. So, if large cohorts of TV viewers are still watching content but don’t own TV sets, how can advertisers continue to reach these viewers in the face of the changing audio-visual environment?

IMPLICATION

In 2014, Core Media invested in CoreCast to transform the way TV is planned. Advertising’s reach for combined TV and VOD campaigns can be measured and quantified. We can demonstrate that an optimised campaign, using TV and VOD, can deliver up to six points of additional reach for the same cost as a TV-only campaign. Not only does VOD reach unique viewers, it can deliver these viewers at a beneficial price point. CoreCast has provided us with additional insights into the new online TV viewer. We have seen that although most online viewing is done during the week, click-through rates peak at weekends. Broadcaster VOD delivers a higher return on investment than other VOD platforms. Furthermore, VOD delivers a tenfold increase in click-throughs compared to traditional online display advertising. We can now be certain that VOD offers, and will continue to offer greater opportunity, accountability and efficiency for clients.

IMPLICATION With 16% of TV viewing delivered on devices outside the TV set, advertisers must embrace multi-platform campaigns to reach all viewers. By engaging with broadcast partners, preferential 360 degree campaigns can be delivered. Not only does a multiplatform campaign increase reach, it also drives higher ROI. Analysis from an eMarketer report in 2013 found a 17% increase in sales response when a viewer was exposed to both TV and digital communications. Similarly, a 2014 report by AOL found that ‘intent’ was 60% among those who viewed on any two screens, and only 45% among those who viewed on one.

The most effective multi-platform campaigns are those that do not conflict with each other and work together to create a cohesive and seamless brand experience for the consumer. By investing in partnerships with broadcasters, clients can achieve this unified messaging, and ensure long-term value in the face of uncertain trading conditions.

The cost savings of precision marketing are significant, but this will require a change in the television pricing model. The cost-per-thousand (CPT) method of reaching viewers will eventually become redundant as television campaigns become ‘served’ and core targeting of niche audiences becomes available. Using software such as TGI Fusion, it is now possible to deliver bespoke audiences that target beyond traditional planning audiences. The CPT of delivering 1,000 Burger King consumers for McDonald’s may be high, but the ultra-targeted nature of the campaign means there is little wastage.

However, the real gains for clients are in return on investment. The ROI from TV is rock solid and continues to grow. When Sky AdSmart rolls out across the Republic of Ireland in early 2016, precision marketing will allow data-driven viewing to be aligned with sales.

IMPLICATION

TELEVISION SPEND (€M) 212.9

205.3

223.5

106.0

102.9

98.9

2013

2015 (f)

2014 ROI

2015 IS GOING TO BE A BATTLEGROUND

NI

Source: Core Media Estimates

7

2014 was a mixed year for news media. In the print sector, circulations declined by 6.5%, and the continued pressure on advertising revenues contributed to the unfortunate closure of Metro Herald.

However, this news masks the early signs of recovery for some titles. The ‘broadsheet/quality’ market revenue stabilised for the first time in over six years, driven primarily by property & recruitment. However, there is a two-speed recovery emerging, as 2014 proved to be the most difficult year to date for ‘red-tops’. We expect this pattern to continue in 2015. On the other hand, online revenues for news media are storming ahead. Across the island, they grew by over a third in 2014 and we expect further significant growth this year.

The industry’s trade body, the National Newspapers of Ireland (NNI) has been given a shot in the arm with the arrival last year of Dara McMahon as Co-Ordinating Director and Vincent Crowley as Chairman. We are expecting energetic, future-focused initiatives in 2015 from this new team. The NNI will relaunch itself in Q1 as ‘News Brands Ireland’. This is a progressive step.

With these positive developments, it is time for the key players to paint a clear and exciting vision for their brands. Each publisher should be working on a 2020 vision, which states what kind of business it wants to be in five years. This is important to ensure the right strategic decisions are taken now. The leading businesses in 2020, will be the ones who showed some bravery and ambition today.

Last year at a talk in Harvard, the editor of the Boston Globe, Brian McGrory, was asked what the future held for news brands. His response was "I have absolutely no idea. Anyone who tells you they know is either lying to themselves or lying to you or lying to everyone around them." It’s time that publishers stopped using this kind of rhetoric and started inventing the future.

News brands should look beyond their core product when shaping their vision. To really thrive in the digital world of 2020, they will need to build a content offering that goes way beyond pure news. A diversified offering will be required to persuade consumers to pay for content in large numbers. Inspiration should be drawn from companies like Amazon and Netflix. 15 years ago Amazon only sold books and Netflix just sent DVDs to customers in the post. Last month, they both won Golden Globes. Now that’s vision.

NEWS

MEDIA 8

01 CREATIVE OPPORTUNITY

02 JNRS – WHERE TO NOW?

03 THE LAND OF THE FREE

In a modern media world of innovation and dynamism, ad agencies are not making full use of the print platform to showcase ground-breaking work.

Editorial shackles and creative agency indifference have all led to ‘portrait vs landscape’ being the most inventive decision made.

News media spend over €400,000 annually on the Joint National Readership Survey. This study has been steadily losing confidence with advertisers because of the way readership is reported by media owners. They focus on the Average Issue Readership figure. This includes anyone who has read or looked at the publication and it suggests that, on average, there are 4.5 readers of each newspaper sold in the Republic of Ireland, which is not credible. We believe that the, less publicised, Almost Always figure better reflects the health of a title’s readership.

It is inevitable that all news brands will charge consumers for their online content at some stage; they will have to. Therefore, rather than asking whether they should charge for online access, they should be asking, what do we need to do with our online product to make consumers happy to pay for it?

Times are changing and financial constraints have led publishers to be more open to innovation. An opportunity exists for brands with vision to take advantage of this new market dynamic. The Sunday World & Irish Daily Star, amongst others, are leading the charge by encouraging media and creative agencies alike to embrace the creativity that press can deliver. Their ‘Outside the Box’ creative roadshow was an excellent initiative to showcase innovation to both media and creative agencies.

IMPLICATION In a world of clutter, attention is a scarce and valuable commodity. In these conditions, we need to think more creatively about how our messages are delivered. This requires a reset of the creative development process where greater priority is given to print ads. We should dream a little and flex the medium to its maximum. There are lessons news media can learn from the out of home sector. It has similar challenges to newspapers, but it tends to attract more innovation from agencies. Food for thought.

Because of these concerns, agencies are favouring the actual number of copies sold as the primary benchmark. Coverage and frequency analysis is also important; however, you could argue that coverage within a single medium is losing its relevance and what advertisers really need is the ability to measure the cumulative effect of multiple media. In its absence, media planners are using the more popular, wider reaching, but far less robust, Target Group Index (TGI) survey to select the combination of titles to deliver campaign objectives.

IMPLICATION We believe that the industry should review the structure and methodology of the JNRS and either reinvent it, or investigate the possibility of investing in a joint venture with TGI to bolster the robustness and scope of that survey, whilst giving a more meaningful result.

Consumers have shown they are willing to pay for content; the growth of Spotify and Netflix are recent examples of this. It is particularly true of under 35s who are twice as likely to pay for online content they value. (Source: McKinsey 2011)

IMPLICATION The Irish Times will be launching a metered paywall on Feb 23rd - the first national daily title to do so.

INM had similar plans for independent.ie in 2013, but decided to put them on hold, and focussed instead on investing in diversified content that delivers an audience of interest to advertisers. Its ‘digital first’ strategy paved the way for richer news experiences in the form of live polling and stronger video content through its in-house studio investment.

For paywalls to succeed consumers need to experience more than just online news. Publishers need to go further still, by investing in digital storytelling tools and rich multi-media experiences, beyond news. They must start competing with TV broadcasters in their video storytelling prowess.

NEWSPAPER & MAGAZINE SPEND (€M) 158.3

141.7

28.2

135.1

26.5

26.8

2013

2014 ROI

2015 (f)

IT’S TIME TO RE-INVENT THE JNRS

NI

Source: Core Media Estimates

9

As other media sectors began to turn the corner in 2014, online continued to drive forward.

Only ten years ago digital was 1% of the market; today it is approaching 30% in the Republic of Ireland, although it has yet to reach the tipping point in Northern Ireland, with a share of just 13%. In 2015 online will become the largest medium in the Republic, surpassing TV for the first time.

This growth is due to an increased understanding of the medium, but there is still a lot to learn; leveraging the power of data insight is only really beginning, but its potential marks the start of a new and exciting chapter in our industry.

Building on this is the rise of DMPs (Data Management Platforms), which fuse together 1st party data (collected through direct relationships with consumers) with 3rd party data (broad information acquired from a multitude of outside sources). These platforms drive greater targeting capabilities and reduced wastage by facilitating multiple messages being served to multiple target audiences based on cross-referenced data proof points.

Speaking of data, IAPI & Nielsen’s joint project to improve the measurement of online ad spend in the Republic was a progressive step in 2014. However, we only have visibility of 55% of display spend. Furthermore, no search or classified advertising information is measured. Therefore, the recorded data only represents 19% of total online ad spend; a lot done….more to do!

On the topic of VOD (Video on Demand), we need to realise that online consumption differs greatly from linear TV. Unless your commercial is ‘epic’, never use ads longer than 20 seconds.

In a lean-forward experience such as watching video content online, 30 seconds of pure advertising is an ocean of time for which consumers will not thank you. Less is more; you should insist on a maximum length of 20 seconds for desktop video & 10 seconds for mobile. Also, make sure that you frequency-cap your campaigns; consumers get violently irritated by having to repeatedly watch the same ads online, over and over again.

In the social space there was quite a shift in the benefits of the Facebook platform. Since this trailblazer came on the scene in 2008 it has offered brands an effective platform to build & reach audiences for free. Throughout 2014, the number of Facebook users seeing brand posts has fallen.

This decrease in organic reach has meant brands now have to pay to reach this audience. This has made Facebook’s shareholders happy, but advertisers feeling bitter.

ONLINE 10

01 AD VIEWABILITY

02 THE CREATIVE/ MEDIA BLUR

03 MOBILE

In a recent poll in the US, 63% of online publishers selected ad viewability as the top challenge facing the industry (source: 614 Group/AdMonsters). The same view is being expressed in this market. Ad viewability is not an issue confined to online. Many ads in other media are never viewed, but online is the first medium for which accurate data is available. Therefore, it is understandable why the viewability debate centres on this medium. There are many possible reasons why online ads cannot be viewed, but the key issue is whether an ad can actually be seen in the viewable portion of a page; a page might load, but if the audience never scrolls down, they will not see the ads served at the bottom.

Whilst the decoupling of creative and media agencies in the 1990s brought a focus to media that was badly needed, the growth of digital has identified a flaw in this model. The interdependency between digital media & the message has never been more important.

A fusion of skills is imperative to deliver optimum campaign effectiveness and business success for brands. However, this is not easy; many media practitioners believe that ad agency creatives think that media science has no place in the creative process.

This absence of integrated thinking is harmful, particularly for digital campaigns where the creative and media functions should be inextricably linked.

Many sites now have more traffic coming from mobile devices than desktop. In fact, mobile platforms accounted for almost 50% of total time spent on digital media in 2014 (Core Media estimate) and this will only increase. In spite of this, many brands still talk about ‘digital first’ strategies when they should always be planning from a ‘mobile first’ perspective.

IMPLICATION

The pendulum is swinging back towards agencies that can deliver a fully integrated media and creative offering. Media agencies have started to invest in art directors, copywriters and creative technologists to ensure that digital activity is fully optimised. We recognised the need to invest in our own creative resource in 2014; we now have a full creative team of eight led by our recently appointed Creative Director, David Howlett. Together with our media specialists, this team creates engaging and highly effective communications material for our clients that deliver improved results. Twenty years after the demise of the full service agency model, we appear to have come full circle!

The lack of urgency regarding this issue is frustrating.

While publishers recognise a problem exists, almost 70% of those polled in the US survey stated they do not believe high viewability will be achieved by the end of 2015. The industry must tackle this issue head-on.

Explanations of why 100% viewability is not possible should be replaced by commitments to address the problem.

The IAB (Internet Advertising Bureau) says that 100% viewability measurement is not yet possible because of the different types of ad units, vendors and measurement methodologies. It says that the industry should aim to have campaigns meet 70% viewability.

This must be challenged.

IMPLICATION

While mobile is often referred to as the second screen, the truth is that smartphones are really the first screen among connected consumers. According to a recent study conducted by Nielsen, half of consumers believe mobile is the ‘most important resource’ in their purchase decision-making, and more than a third said they used mobile exclusively.

Added to this, we have seen Google & Facebook completely pivot their businesses to be truly mobile first, and they are winning. But still, many marketers do not place mobile in pole position when designing their digital infrastructure and campaigns.

IMPLICATION ‘Mobile-first’ must be the mantra for all marketers. If you regard mobile as the ‘second screen’ you will cede market share to brands who understand the connected consumer better. Challenge yourself and your organisation to bring mobile to the front of all marketing thinking. This is not a nice-to-do; it is a must-do. And remember, it won’t be long before the ‘mobile-first’ mantra will become ‘mobile-only’.

ONLINE SPEND (€M) 243.1 206.9 172.4

24.3

21.6

19.8 2011 2013

2015 (f)

2014 ROI

THE INDUSTRY’S APPROACH TO AD VIEWABILITY MUST BE CHALLENGED

NI

Source: Core Media Estimates

11

Radio needs to be rebooted. The industry has been focused on consolidating sales teams, rather than exciting listeners. Music radio’s preoccupation with losing listeners has led stations to play the same popular songs repeatedly and offer less variety than ever. Whilst programmers will show you ‘sound data’ to support this practice, it is symptomatic of the repetition that has come to epitomise the radio product in this country. Radio has become safe and generic.

Eventually, somebody, somewhere will disrupt this model and re-invent it, but the radio industry is poor at innovation - real innovation - that challenges the norms. This must change in an age when personalisation is the name of the game, and ‘share of ear’ is being challenged by the rise of Spotify.

To boost the relevance of radio in the digital world, stations are dabbling in video to enhance their audio content, but in practically all cases, in Ireland, this strategy has lacked conviction and commitment, so far.

In the UK, BBC Radio 1 has taken this opportunity seriously by creating a ‘visualisation department’, which has a team of people producing video content. A performance studio has been created to make stunning live videos for YouTube. The main Radio 1 studio has been reinvented to look amazing on video and be ultra-easy for the presenters to record live video interviews. Two prominent YouTubers were hired, not to make videos, but to produce a radio show. BBC may not have all the answers, but it is trying, pushing and moving forward.

The lack of dynamism in the industry is reflected in the level of demand, particularly in the Republic of Ireland, where ad spend increased by just 1% last year. Northern Ireland fared better with an increase of 3%. 2015 will see similar growth in the North, but only 2% increase in the South.

Radio is also burdened with recall-based audience research, which is a poor way of measuring consumption in an age where steering wheel controls mean that a listener can cycle through countless stations on even the shortest commutes. It is not credible that such a listener could accurately recall and, more importantly, distinguish between the stations he/she is consuming.

Radio is certainly in need of visionaries to create new formats, produce daring content and drive industry change. As the so-called golden age of television has shown, if you invest in and unshackle amazing talent, you can change the way audiences consume your medium.

RADIO 12

01 GRABBING AN UNFAIR SHARE

02 AT A CROSS ROADS

03 WHAT’S IN A NAME?

The author and futurist William Gibson famously said “The future is already here – it’s just not evenly distributed”. Nothing could more accurately describe the state of Irish media, where digital is now taking the largest share of media budgets, at the expense of traditional media. Looking to the UK we can see a clearer view of this future, where digital has swapped places with the likes of press, outdoor and of course radio, while television has remained constant. TV has weathered the storm better than other traditional media and has done so by proving that it works well with online media. A number of major studies have shown that a symbiotic relationship exists with television creating demand that digital fulfils.

Media in Ireland stands at a crossroads. The industry is currently engaged in a detailed examination of the benefits of carrying out crossmedia research. For the first time advertisers, media owners and agencies could properly see the combined reach of different media and stations, allowing them to understand the true value of each part of their media plan. This is a significant opportunity for the radio industry.

Radio groups spent 2014 trying to woo different stations to jump ship and join their respective groups.

Media Central added iRadio, Spin SW and Red FM from IRS as well as Beat FM from UTV Radio, while UTV recovered ground adding WLR from IRS. In December RTE radio went one better, as Ray D’Arcy ‘came home’ as he put it, and re-joined the mother ship. The man who began surrounded by Zig & Zag, returned from Today FM where he was surrounded by 221,000 loyal listeners, leaving a hole in the Today FM schedule.

IMPLICATION Despite our many similarities with the UK, there are also some stark differences. Radio has been a proven driver of demand in Ireland for many years. Direct Response (DR) radio often outperforms DR TV. Despite being encumbered by ‘terms and conditions’, for certain categories, it has consistently driven response. However, one similarity that does exist is the perception that TV works best with online media. This is helping future proof TV while jeopardising radio. Now is the time for the radio industry to commission major research proving its efficacy at driving online sales and showing that radio delivers for brands in a digital world. The future is here, this research would help radio grab its share.

In the UK, cross-media research (Touchpoints) showed that the impact of radio had been much understated. The study showed the power of radio and made a compelling argument for it to be on the majority of brands’ schedules.

IMPLICATION Radio should seize the day and lead the way on cross-media research in Ireland. While it will benefit the whole advertising industry, the experience across the water shows that radio stands to do well from the research. With the levels of listenership in Ireland, a cross-media project should prove to advertisers that the medium can help them reach their audiences more effectively than had been thought. For the industry, it could become a potent tool, showing a traditional medium thriving in a modern environment, through the latest in research.

IMPLICATION Since Pat Kenny’s move to Newstalk from Radio 1 he has grown his Newstalk time slot by 87,000 listeners, an impressive 155% increase. Ray D’Arcy would only have to grow his new show’s listeners by a mere 12% for it to overtake his old one in terms of total listeners.

It’s an unfortunate development for Today FM, as D’Arcy was the station’s most popular show. While station management has a good track record of nurturing new talent, these are very big shoes for the aspiring Anton Savage to fill.

For advertisers, change brings opportunities.

Volkswagen has already jumped on board with the new programme, backing the decision to bring D’Arcy on board. Toyota has renewed its sponsorship with Today FM, giving a sign of faith for the new man.

Today FM will be hoping he delivers.

RADIO SPEND (€M) 117.3

115.0

113.9

17.2

16.6

16.1 2013

2014 ROI

RADIO HAS BEEN FOCUSED ON CONSOLIDATING SALES TEAMS, RATHER THAN EXCITING LISTENERS

2015 (f) NI

Source: Core Media Estimates

13

As we look at the year ahead, the out of home (OOH) sector has every right to feel optimistic. We expect spend to grow by 7% this year in the Republic of Ireland, on top of 6% growth in 2014. Growth in Northern Ireland will be lower at 3%. This sustained comeback will be driven by extra investment in existing plant and the explosion of digital screens. With a programme to develop more units and locations, we expect digital out of home to increase its share of total OOH spend, across the island, from 9% last year to 12% in 2015. More illumination and more HD posters will also play their part in boosting interest in the sector.

It’s not all good news though; looming on the horizon is the very real threat of legislation to restrict the use of OOH by alcohol brands in the Republic.

Alcohol currently accounts for 8% of spend in the medium. This is unlikely to come into effect before 2018, but the sector needs to start attracting new revenue now to minimise the inevitable shock to the system.

Looking at the industry infrastructure, it must be said that the stalwart 48 sheet format is looking tired. Next to newer formats like Metropoles, it is definitely showing its age. While JCDecaux, among others, will try to prolong its lifespan with HD printing and universal illumination, it must be prioritised for conversion to digital at the earliest opportunity.

Elsewhere, thriving formats will embrace technology and innovation. Exterion is already seeing the benefits of its investment in the CIE network. We believe JCDecaux will exploit some of its current contracts to invest in more digital screens in retail centres. The company is also expected to launch a long awaited digital network in Tesco stores.

Clear Channel Ireland will also increase investment in its bus shelter network, replacing some of the older Adshel shelters with more modern marquee units. The challenge for Adshel is to increase illumination in its plant. We may also finally see some digital 6 sheets on our streets later in 2015.

In addition to being a great showcase for brands, by embracing technology the OOH medium is increasingly becoming a medium of personalised and interactive communications. 2015 will see OOH leave behind many of the criticisms levelled at it in the past. All it took was the greatest recession in history. There are lessons in here for other media, particularly news brands.

OUT OF

HOME 14

01 PAPER TO PIXELS

02 ALWAYS ON

03 LOVE ME TENDER

2014 was finally the year that digital out of home took hold. We saw the expansion of digital screens into transport hubs, cinemas, bars and pharmacies, and further investment in shopping malls with the introduction by JCDecaux of its next generation iVision screens. This year we will also see the introduction of digital advertising on bridges in Dublin in Q4. Up to six advertisers may be allowed in each commercial loop.

Strictly no animation will be allowed. The first large digital panel to hit the streets in Cork is also expected later this year.

While it is technically accurate to say that the out of home medium has always been ‘always on’, few advertisers embrace it as such. Now it is possible to make that a real option and, as a result, open up a new range of advertising opportunities. Digital OOH will become a real-time advertising medium later this year.

We currently have day-part and day-of-week opportunities. We now expect real-time opportunities, which will provide the ability to automatically activate and update the advertising message using live data and content. With smartphone penetration increasing at such a fast pace and with Wi-Fi access becoming more freely available on public transport, in public areas, in restaurants and pubs, there is an emerging natural fit between the OOH world and the online world.

Two vital contracts will be reviewed in 2015. The Luas advertising contract, held by JCDecaux since its launch in 2004, will be retendered with a particular emphasis this time on the introduction of digital screens. Also, the bus shelter contract, currently held

by Clear Channel (under the Adshel brand), will be reviewed later this year in both the Republic of Ireland and Northern Ireland. Adshel manages the largest number of outdoor panels in the industry, with approximately 4,200 displays located in the South and 1,900 in the North.

IMPLICATION OOH is now much more than a brand awareness medium. It is finally moving beyond static and one-way messaging. It can enable a two-way engagement between consumer and message through technologies including touch screens, near field communications (NFC) tags, QR codes, hashtags and iBeacons. Clear Channel Ireland now has over 2,500 bus shelters across the island equipped with NFC tags while Visualise has introduced the technology to its shopping trolley portfolio.

OOH is becoming a content springboard, where we can use the sites to create engagement, interaction and amplification. This allows for a deeper brand experience and coverage beyond the exposed audience. In addition, face-recognition technology will advance to enable advertisers serve targeted messages to specific audiences. We expect this to be a realistic option in Q4 this year.

IMPLICATION Media owners should live up to the ‘always on’ promise and move away from the five-day working week to a seven-day working week. This would eliminate frustrating posting calendars and provide a scenario where damaged posters would be repaired in real time instead of three working days.

The digital OOH sector will require a robust audience measurement system; the existing Joint National Outdoor Research is not geared to measure this type of format. As digital reaches critical mass, it will be essential for audience research to keep pace with the medium’s growth.

IMPLICATION If either of these contracts moves, it will mean a complete re-drawing of the OOH industry. JCDecaux, regarded as one of the most dynamic global operators, suffered a shock defeat in the CIE tender two years ago. It also handles the prestigious, but costly, Dublin Bike Scheme.

If it loses the Luas tender, it will need to reconsider its strategy for Ireland. Similarly, if Clear Channel does not retain the bus shelter contract, it is hard to see how it could maintain a business in Ireland. Internationally, Clear Channel is eager to sell its OOH operation outside the USA. While the weakened euro may have delayed this process, if JCDecaux or Exterion Media can muster up the $3 billion required, we could have a completely different landscape next year. One thing is clear, whoever wins or loses, advertisers will benefit. The successful tenderers will pump huge investment into the medium.

OOH SPEND (€M) 68.4

63.9

60.3

17.4

16.9

16.1 2013

2014 ROI

OOH MEDIA OWNERS SHOULD MOVE TO A SEVEN-DAY WORKING WEEK

2015 (f) NI

Source: Core Media Estimates

15

Cinema is on a strong footing and poised for growth this year. Ad spend is expected to increase beyond the global forecast of 3% by achieving 6% growth in the Republic of Ireland and 5% in Northern Ireland. From both a technology and content point of view, the medium is in a good place.

Like so much of our lives, movies have been digitised. Going to see a ‘film’ now means going to see a collection of ones and zeroes projected from a server, rather than a 35mm film print. The impressive conversion of all screens to digital last year has catapulted the medium into the modern era faster than expected. However, it has not seen the full benefit of this switch, from a commercial point of view, due to the economic climate and inertia from agencies.

For advertisers, the investment in digital has brought lower production costs and has enabled us to target audiences by movie showing, by cinema site and by day of week.

This is a far cry from the days of 35mm film, when it was costly and inflexible.

There are high expectations of audience growth this year due to the strong pipeline of movie releases. The new Bond movie, Spectre and Star Wars Episode VII – The Force Awakens are the most anticipated, but there are many other movies lined up, including Avengers: Age of Ultron, Jurassic World, Mission Impossible 5, Terminator: Genisys, Mad Max: Fury Road and the final Hunger Games film. Even Seth MacFarlane’s foul-mouthed bear, Ted, is back. Pixar will also be releasing Inside Out which promises to be its most striking movie since Up. Despite the positive outlook, it will not be plain sailing for the medium in the longer term. The overall quality of the ‘movie’ product has been diminishing in recent years. The current studio system is extremely risk-averse; as a result, the level of sequels, remakes or comic book adaptations has ballooned, as can be seen from the above list. TV has overtaken cinema as the home of quality, characterdriven drama and many believe that television now provides a more creative environment for actors to work in than film.

Added to this, the production quality of TV series is now virtually indistinguishable from cinema content. HBO in recent weeks, became the first television network to feature its programming in IMAX® theatres, showing two episodes from season four of ‘Game of Thrones.’ Hollywood is in danger of playing a short-term game, if it is happy to cede this territory to HBO, Netflix, Amazon and others.

CINEMA 16

01 OVER-LOOKED MEDIUM

02 DIGITAL POSTERS

03 SECOND SCREEN MOBILE

Cinema advertising only accounts for 1% of total media spend across this island. Its reach is far smaller than TV, but both media work very well together.

According to research from Millward Brown (‘What does cinema advertising add’ 2009) the recall of ads that appear in both media is significantly higher than ads that appear on television only. Research from Hall & Partners last year also claims that cinema-goers are twice as likely to recall ads they see in the cinema. In the pre-digital era cinema was inflexible and somewhat inaccessible to advertisers due to the long lead-times and high production costs. Now, however, these costs have been slashed, and it is possible to book ads, which once required at least a month to turn around, in less than a week.

The onward march of digital out of home ‘posters’ has made its way into cinema foyers. At the time of writing, 34 digital units are being installed in key locations in the Republic of Ireland. Each of these units has a 55inch screen that displays full motion advertising in high definition. The full network will be operational by the first week in March.

Wide Eye Media will be launching a mobile cinema app in April called ‘cinime’. Utilising image and sound recognition, it will offer new opportunities for advertisers. Cinema-goers will be encouraged to download the app in the foyer and instead of being asked to switch off their phones, the audience will be encouraged to leave them on until the movie starts, with the ‘cinime’ app open. It will respond and interact with the screen, receiving content and offers.

IMPLICATION Cinema should be an automatic choice to support TV campaigns targeting young adults. It is the norm for television channels with relatively small audiences such as MTV or Discovery to be included in TV campaigns, yet cinema is regularly excluded. This doesn’t make sense. The only factor that needs separate consideration for cinema is the creative. Cinema-goers arrive with the expectation of being entertained; advertising that falls short is unlikely to be well received. Whilst this is an important consideration for the media planner, it would be a poor reflection on our industry if this continues to be a regular reason to exclude the medium.

CINEMA SPEND (€M) 7.4

7.0

6.8

2.1

2.0

1.9

2013

2014 ROI

IMPLICATION This new format offers advertisers the ability to extend their out of home campaigns into this environment, or to augment their on-screen cinema activity. Digital displays of this kind should be used to intensify the impact of a campaign by playing with digital motion without using a TV-style approach. In fact, these screens should never be used to show an adapted TV commercial; they must be designed from scratch to fit in with the exact environment in which they are placed.

Digital out-of-home advertising is highly effective in prompting consumers to take action. Creatives should look for opportunities to engage with people, as they are walking by.

Remember that messages can be changed in real time to promote sales and to support events when it is necessary to get information to customers as quickly as possible.

Before the film begins, cinema-goers will be able to interact with the ads and trailers. The app will allow advertisers to send offers to people as their phones pick up sonic messages from the big screen.

IMPLICATION This new app is an opportunity for studios, cinemas and brands to engage with the consumer before and after the film. It is a super use of technology. The app was launched successfully in the UK last year. Ben & Jerry’s made good use of it through a branded movie quiz campaign. Questions appeared onscreen, along with a prompt to open the app. The accompanying audio triggered a matching interactive quiz on the phone. If the user got all the answers right, they received a voucher for a free scoop of Ben & Jerry’s ice cream. This was delivered right into the app, via a barcode that could be redeemed in the foyer.

CINEMA SHOULD BE AN AUTOMATIC CHOICE TO SUPPORT TV CAMPAIGNS TARGETING YOUNG ADULTS

2015 (f) NI

Source: Core Media Estimates

17

As 2015 begins, the mood around the sponsorship industry is more positive, and with economic recovery well underway there will undoubtedly be increased investment in the sector. The launch of Livewire, our dedicated sponsorship agency, represents our confidence in this industry. The biggest challenge facing the market is the supply of properties.

This is forcing brands into sub-par secondary sponsorships that can leave a bad taste if not activated effectively.

Although still a relatively young industry, it is surprising that certain issues continue to beset the sector and prevent many sponsors from maximising the potential available.

Key issues in this regard are: •

Brands continue to enter partnerships without a clear link to business strategy

•

The price tag of the property is the primary focus of attention without an activation and a measurement budget being part of the upfront conversation

•

Measurement continues to be an afterthought, and attributing a figure to the return on sponsorship investments remains the holy grail

2014 was a great year for Irish sponsorships; validated once again as among the best in Europe at the European Sponsorship Awards recently. Irish entries for Electric Ireland, An Post and Liberty Insurance all took home top prizes at the prestigious awards. At home, the Irish Sponsorship Awards showed that event-based sponsorships around music and the arts had a good year, with The Electric Picnic being an effective platform for Heineken and Bacardi. Also, Tiger Beer’s inaugural year of partnership with the Dublin Fringe Festival was recognised with the Grand Prix at the awards.

2015 promises to be an exciting year for many reasons. Staples of the market such as summer music festivals, the Six Nations and the GAA Championships will continue to provide opportunities. UTV Ireland is shaking up the broadcast sponsorship arena with the arrival of full licensing of programmes from ITV, such as Coronation Street. The Rugby World Cup will attract much attention and with the Olympics only 18 months away, we expect to see the start of local activations from sponsors. Finally, we will see the return of particular categories to sponsorship in 2015, such as the motor industry, which is a clear indication of both the health of the sponsorship market, and indeed the economy itself.

In terms of investment in all types of sponsorship (including media & product placement), we expect strong growth of 8% in 2015 in the Republic of Ireland, building on the 4% lift in spend in 2014. Demand will also increase in Northern Ireland, but at a lower rate of 5%.

SPONSORSHIP 18

01 DIGITAL COMMERCIALISATION

02 POWERFUL SPONSORSHIP

03 RETURN ON INVESTMENT

The benefits of digital for rights holders are threefold. Firstly, it provides greater marketing capacity; secondly, it provides more accurate fan data and thirdly, it creates a range of new digital assets.

Combining strong digital strategies with fan data analysis ensures rights holders can grow revenue and enhance capacity.

Key trends for sponsors include a focus on engagement, rather than exposure, and increased emphasis on cause marketing. Sponsors who put purpose at the heart of their partnership strategy, whether through community initiatives or via customer loyalty schemes, can move beyond awareness to address other objectives, such as affinity or churn.

2015 must be the year when effective measurement of sponsorship return on investment comes of age.

The lack of robust measurement practices represents a blot on the industry’s reputation. Too often, exposure is the only outcome which is measured and all too often no measurement plan is put in place at the outset. Industry experts will still tell you that, even in 2015, it’s not the ability to measure that is the issue, but the fact that knowing the true value to the business is perhaps undesirable! This has to change.

Clever content combined with fan data ensured the Canadian Olympic Committee’s #WeAreWinter campaign trended worldwide during the Sochi Olympics. This is a good example of a rights holder proving the value and scale of its property. The IRFU hopes to emulate this with #ShoulderToShoulder during the Rugby World Cup. The NFL’s partnership with Twitter and the NBA’s League Pass are two high profile examples of rights holders unlocking the potential of digital assets. The launch of GAAGO as a digital platform for delivering games in other markets represents a local success. GAAGO will expand its offering to over 100 programmes in 2015.

IMPLICATION Rights holders cannot depend solely on sponsors to enhance the profile of their properties. Successful rights holders will invest in fan analysis and savvy digital strategies to maximise the appeal and value of their assets. With access to content remaining a key asset, rights holders will go to greater lengths to highlight the value of their properties in 2015.

For example, Heineken is prioritising brand loyalty with emotional association rather than exposure for its sponsorship of this year’s Rugby World Cup. This strategy helps brands to differentiate at the point of sale. Sponsors who demonstrate purpose via cause sponsorship can create real brand affinity. Electric Ireland’s sponsorship portfolio includes not only properties such as the GAA Minor Championships and Electric Picnic but also causes including the Darkness into Light Walk. This sponsorship not only engages with an estimated 80,000 participants, it mobilises staff and demonstrates authentic brand purpose.

IMPLICATION Sponsors who demonstrate ‘purpose’ stand to gain.

Pursuing such an approach requires greater strategic thought, commitment and expertise, and it comes with risk; consumers are highly critical of associations they feel are insincere or hypocritical.

But, with risk comes reward and sponsorships with purpose stand to reap rewards in 2015.

IMPLICATION Both sponsors and rights holders can benefit from ensuring that proper measurement takes place. To achieve this, sponsors need to prepare their measurement strategy right from the start, before any deals are signed. Rights holders should insist that a comprehensive measurement plan is a compulsory part of the partnership. Brands need to think about the price tag of the sponsorship as the real price: Sponsorship price = property rights cost + activation budget + measurement budget This is the true price of any sponsorship deal and should form the basis against which ROI should be subsequently measured. A concerted effort by the industry will help sponsorship come of age and navigate it out of the ‘nod and wink’ reputation which has blighted it for too long.

SPONSORSHIP SPEND (€M) 120.8

111.8

107.7

9.5

10.7

10.2

2013

2014 ROI

2015 (f)

THE LACK OF ROBUST MEASUREMENT IS A BLOT ON THE INDUSTRY’S REPUTATION

NI

Source: Core Media Estimates

19

Although Direct Marketing traces its roots back to the early 1900s, it is now enjoying another heyday as technology provides brands with new ways to communicate directly with consumers. In the past, we had to rely on reply postcards, unique phone numbers or search terms to relate the effect of our offline media back to responses and sales. Digital media has changed this as ‘response’ information is available for all advertising in the online world. The amount of data that brands are now capturing on customers is enormous, meaning opportunities abound for those with the right skills and tools to analyse and interpret this information in an insightful, timely way.

Despite the shift towards online channels, direct mail still remains a highly effective way of marketing to consumers. Recent research just published by the Royal Mail in the UK reports on how physical contact translates into an individual valuing an item more highly. Scientific experiments have shown that people value something they can see and touch 24% more highly than something they can only see. Getting consumers to engage physically with a brand is likely to have a strong effect on them and direct mail certainly provides us with the ability to do this. Furthermore, the UK report found that when mail was included in the media mix, it shifted market share three times more efficiently than multi-channel plans without mail.

2015 will mark a year of significant change as Ireland becomes the final country in Western Europe to adopt an official postcode system. Sections of the media have chosen to focus on the €27m price tag associated with launching this new ‘Eircode’ system instead of the benefits it will bring. The problems with the current lack of a reliable postcode system should not be understated. In excess of 35% of addresses (over 750,000) are nonunique and in certain areas the prevalence of surname clustering adds even further confusion. Eircodes will bring many improvements, helping with logistics planning and the provision of public services, as well as making destinations easier to locate.

Technology will still be the core driver of change in the sector this year and we expect that clients and agencies will continue to explore opportunities to integrate CRM data with advertising data to deliver better messaging and greater targeting. This is made possible through Data Management Platforms (DMP), which provide better business results through greater integration of information.

DIRECT

MARKETING 20

01 EIRCODES

02 CREATIVE SUCCESS

03 DIGITALLY ENGAGED

From Quarter 2, all 2.2 million addresses in the country will be assigned a unique seven-digit Eircode.

This, in turn, will bring advances in the accuracy and targeting capability of the medium. The new system will allow for faster and more reliable address capture through websites and call centres. Using the Eircode, organisations will be able to reconcile, combine, clean up and de-duplicate databases that come from different sources. For Irish consumers the postcode will help with online shopping, negating the requirement to use a fictitious postcode in order to complete a purchase. It will also ensure accurate delivery of goods and services. The true benefit to businesses, and the wider economy, will be in the less tangible measure of time. Eircodes are unique to each property, meaning it will be easier to find delivery and pick-up points, making logistics planning for businesses easier and more efficient.

Direct mail is a gateway to engaging creativity. All it takes is an idea and the readiness to experiment.

Whereas the use of different textures and materials has long been a mainstay of great direct mail, marketers are now targeting the other senses. Smells can be used to evoke emotions or memories. Also, sound chips and even paper thin video are available to enhance the consumer’s experience. People enjoy going through their post. Even young people, who are surrounded by the digital world still want to receive mail. 71% of 15-24 year olds enjoy receiving post and 65% say they get excited when they check their mail (Source: Amárach 2013).

In the past, anything that was not considered ‘direct response’ fell into a grey area when it came to measuring its effect. This was because there was no way to measure response other than through expensive modelling or very basic visual correlation.

Digital has changed this as every online channel is responsive. SMS and push notifications via mobile apps facilitate interaction between brands and consumers that can be time or location specific.

These media can encourage a consumer to come instore with the promise of a special offer or to visit a company’s website to unlock a unique discount. The use of augmented reality or coupon/redemption codes can entice the offline user to deepen their engagement with the brand online.

IMPLICATION As Eircodes are rolled out, expect to see growth in geo-targeting solutions claiming to be fully accurate and reliable. As with any major infrastructural change, the new postcodes will bring teething problems; however, opportunities will abound for those with well-managed and regularly updated mailing lists. Those that ignore data management will lose out.

IMPLICATION We need to think about what we can do to satisfy the excitement and hopeful expectation that people feel when they look through their post. Once the envelope is opened, brands get the chance to deliver a memory, a song, a smell or a texture. By simply testing concepts on smaller sample groups, we can ensure continuous improvement in response rates.

Furthermore, 75% of consumers say addressed direct mail is the most relevant form of advertising to them, and they will always feel more engaged when the communication appeals to many senses. That’s why 57% of people will be more likely to open mail if its design is impactful. (Source: Millward Brown 2014)

IMPLICATION As the real and virtual worlds continue to dissolve into one another, marketers will need to continue to improve their understanding of how to link their offline activity seamlessly into a digital brand experience in order to maximise effectiveness.

Creative agencies will need to evaluate how advertising engages and converses with consumers as opposed to purely pitching an offer at them. Most importantly, research and econometric analysis will be needed to help determine the real value and contribution of a specific channel in achieving campaign and business objectives.

IMPACT OF MAIL VERSUS EMAIL MAIL

EMAIL

63%

18% I am more likely to take it seriously

57%

17% It makes me feel more valued

55%

25% It gives me a better impression of the company

75% OF CONSUMERS SAY MAIL IS THE MOST RELEVANT FORM OF ADVERTISING 21

Source: Royal Mail MarketReach, % True of Mail vs. % True of Email.

FOR MORE INFORMATION PLEASE CONTACT: CRAIG FARRELL TEL: +353 1 645 2951 WEB: WWW.STARCOM.IE TWITTER:@WEARESTARCOM EMAIL:CRAIG.FARRELL@STARCOM.IE

The drawings contained in the document are by students from innercity schools who take part in the Junior Achievement programme.

Junior Achievement Ireland encourages young people to remain in education and helps them develop the skills they need to succeed in a changing world. Core Media is very proud of its association with JAI over the past four years. We would encourage anyone who reads this document to visit www.jai.ie to find out more about this worthwhile programme and discover how you can get involved.