Broadcast TV Suffers Steepest Drop in Ad Volume in 2005
Mar 20, 2006 Ι Industry In-Focus
Ι Furniture Ι By Philip, CENS
The total value of advertising placed in Taiwan topped NT$53 billion (US$1.65 billion at NT$32:US$1) in 2005, for a slight decline of 2.8% from 2004' s NT$54.55 billion (US$1.7 billion), according to Nielsen Media Research.
Of the five major media, broadcast TV suffered the steepest decline of 15% in ad revenue in 2005, with advertising volume continuing to slide on poor ratings performance.
Chiang Shih-chieh, supervisor of strategic resources for Carat Media, says that on weekdays the lifeline of the four broadcast TV stations is the 8 p.m. period, while during weekends and holidays the main attraction is variety shows. These are the main time periods that attract advertising.
Taiwan' s four broadcast TV stations now charge NT$26, 400 (US$825) for a 10-second spot. Despite the high price tag, advertisers are still willing to spend the money to reach a large viewership.
The most popular time period for broadcast TVs is the 8 p.m. slot, after which most viewers tend to switch channels. Therefore, advertisers generally include TV commercials during this time period in their marketing plans so as to achieve the maximum amount of exposure. This strategy has been embraced by hypermarkets for their promotional activities, for example, and by show organizers to advertise their exhibitions.
Advertisers turn to cable TV to boost their exposure; but because of the saturation of the market and strict regulation of the sale of channel time to external producers, the volume of advertising on cable TV dropped 8.31% last year.
Chiang notes that in contrast to the single-station operation of the four broadcast TV companies, cable TV can cash in on its channel families by offering the flexible and professional arrangement of commercial spots to help advertisers reach their target audiences more precisely. This is the major advantage that cable TV enjoys over broadcast TV. And, Chiang stresses, it is a critical advantage at a time when the market emphasizes gross ratings.
Dissatisfied Advertisers
However, Chiang says, many advertisers are dissatisfied with the way many cable-TV channel operators plans commercial spots randomly or using them in time slots with low viewership.
Consumer response is changing with the emergence of new media such as the Internet, mobile phones, transportation vehicle advertising, and outdoor media. Advertisers are now frequently unable to achieve their marketing goals via TV alone, and this prompts some of them to consider other media.
However, advertising on TV offers the advantage of objective ratings performance via the use of viewer meters provided by AGB Nielson. New types of media, by contrast, lack objective instruments to gauge the effects of their advertising, which dampens the willingness of advertisers to shell out larges amounts of money on them.
While they lack objective means of gauging their effectiveness, some emerging media, such as outdoor advertising and public relations activities used with integrated marketing, can sometimes achieve instant results and are thus able to attract a growing amount of advertising.
Portable media and magazines have considerable potential. The rate of channel switching for radio broadcasts is low compared with TV, and radio ads cost only a fraction of the amount of TV commercials while sometimes achieving unexpectedly good results.
Chiang notes that although the overall volume of radio advertising dipped 2.92% last year on the adjustment of radio frequencies and government policy uncertainty, magazines, newspapers, and outdoor media still enjoyed growth in advertising revenues. The growth of advertising in magazines, which have the advantage of in-depth content, is attributed mainly to the craze for beauty and luxury, leading to a substantial increase in magazine advertisings for beauty and body-care products, jewelry, and gold jewelry.
The continuing upturn in the real estate market and stepped-up advertising for sports utility vehicles (SUVs) were the major factors behind the growth of newspaper advertising last year. Outdoor media chalked up a 3.5% growth in advertising revenue, due mainly to diversification of presentations and matches with event marketing. (PL, March 2006)
Of the five major media, broadcast TV suffered the steepest decline of 15% in ad revenue in 2005, with advertising volume continuing to slide on poor ratings performance.
Chiang Shih-chieh, supervisor of strategic resources for Carat Media, says that on weekdays the lifeline of the four broadcast TV stations is the 8 p.m. period, while during weekends and holidays the main attraction is variety shows. These are the main time periods that attract advertising.
Taiwan' s four broadcast TV stations now charge NT$26, 400 (US$825) for a 10-second spot. Despite the high price tag, advertisers are still willing to spend the money to reach a large viewership.
The most popular time period for broadcast TVs is the 8 p.m. slot, after which most viewers tend to switch channels. Therefore, advertisers generally include TV commercials during this time period in their marketing plans so as to achieve the maximum amount of exposure. This strategy has been embraced by hypermarkets for their promotional activities, for example, and by show organizers to advertise their exhibitions.
Advertisers turn to cable TV to boost their exposure; but because of the saturation of the market and strict regulation of the sale of channel time to external producers, the volume of advertising on cable TV dropped 8.31% last year.
Chiang notes that in contrast to the single-station operation of the four broadcast TV companies, cable TV can cash in on its channel families by offering the flexible and professional arrangement of commercial spots to help advertisers reach their target audiences more precisely. This is the major advantage that cable TV enjoys over broadcast TV. And, Chiang stresses, it is a critical advantage at a time when the market emphasizes gross ratings.
Dissatisfied Advertisers
However, Chiang says, many advertisers are dissatisfied with the way many cable-TV channel operators plans commercial spots randomly or using them in time slots with low viewership.
Consumer response is changing with the emergence of new media such as the Internet, mobile phones, transportation vehicle advertising, and outdoor media. Advertisers are now frequently unable to achieve their marketing goals via TV alone, and this prompts some of them to consider other media.
However, advertising on TV offers the advantage of objective ratings performance via the use of viewer meters provided by AGB Nielson. New types of media, by contrast, lack objective instruments to gauge the effects of their advertising, which dampens the willingness of advertisers to shell out larges amounts of money on them.
While they lack objective means of gauging their effectiveness, some emerging media, such as outdoor advertising and public relations activities used with integrated marketing, can sometimes achieve instant results and are thus able to attract a growing amount of advertising.
Portable media and magazines have considerable potential. The rate of channel switching for radio broadcasts is low compared with TV, and radio ads cost only a fraction of the amount of TV commercials while sometimes achieving unexpectedly good results.
Chiang notes that although the overall volume of radio advertising dipped 2.92% last year on the adjustment of radio frequencies and government policy uncertainty, magazines, newspapers, and outdoor media still enjoyed growth in advertising revenues. The growth of advertising in magazines, which have the advantage of in-depth content, is attributed mainly to the craze for beauty and luxury, leading to a substantial increase in magazine advertisings for beauty and body-care products, jewelry, and gold jewelry.
The continuing upturn in the real estate market and stepped-up advertising for sports utility vehicles (SUVs) were the major factors behind the growth of newspaper advertising last year. Outdoor media chalked up a 3.5% growth in advertising revenue, due mainly to diversification of presentations and matches with event marketing. (PL, March 2006)
| Analysis of Media Buying in Taiwan in 2005 | |||
| Medium | 2004 (NT$ billion) | 2005 (NT$ billion) | Growth Rate |
| Broadcast TV | 5.7 | 4.8 | -15% |
| Cable TV | 18.2 | 16.7 | -8.31% |
| Newspapers | 18.1 | 18.8 | 3.81% |
| Magazines | 6.4 | 6.5 | 2.34% |
| Broadcast Radio | 3.5 | 3.4 | -2.92% |
| Outdoor Media | 2.7 | 2.8 | 3.5% |
| Source: Nielsen Media Research | |||
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