In August, Loop published the story ‘Guardian Media announces major structural changes’ covering the public announcement by Guardian Media that they were ready to “adopt a new business approach, moving towards a digital-first strategy…”. The story quotes the Guardian Media’s Managing Director Lucio Mesquita describing the justification for the announced changes to ensure a “strong future at times of considerable challenges to the media industry as the digital revolution disrupts traditional revenue models.” These major changes followed disappointing revenue figures for the first six months of 2016. The media group, which consists of CNC3, TBC Radio Network, and Guardian Newspapers, blamed the fall in corporate revenue on lower advertising sales. How much disruption is the “digital revolution” causing in Trinidad and Tobago?
We do not have access to figures on the size of the digital market in Trinidad & Tobago, but we were able to get comparative figures for traditional advertising through Media InSite, the Trinidad-based company which happens to be the premier media monitoring company in the Caribbean. We looked at the overall estimated spend on traditional media for August 2016 vs August 2015. Last year was an election year, which can skew advertising spends, so the data was run with and without political advertising included. You can see that overall advertising activity is down 20% year on year. If you exclude political advertising, activity is down 10%. The trend is not all bad, with Radio standing out showing positive growth. With all advertising included, Radio shows a 1% growth. If you take out political ads, that jumps to 10%.
We dug a little deeper into the numbers and looked at the performance of the Guardian Media properties and compared them with the overall industry. The Guardian properties appear to be doing better than overall media trends. Guardian Media growth rates show a small positive increase of 3% compared to the overall media industry, which is down 10% year on year for the month of August (with political ads removed). If we include election advertising, we see negative growth rates for both the Guardian Media properties and the Industry. But Guardian is down only 15%, while the overall industry is down 20%.
Our analysis is based on independent tracking of advertising activity across media outlets, using the published open rates from the media to calculate a dollar value for that activity. This is done because we do not have access to actual advertising spend data. We recognize that most media is not bought at open rate, with media companies extending advertisers volume discounts and specials as a matter course during business. However, if we take the Guardian Media’s own published revenue results and add that into the analysis it would appear Guardian Media is having to offer increased discounts and deals to keep advertisers in traditional media. This would explain how we are tracking increased activity resulting in falling advertising revenue. The Growth of Internet Ad Revenue
We don’t have figures for the Online Ad Revenue in Trinidad & Tobago, but if we look at the USA market and reports on Global trends in advertising they all point to impressive growth. Quoting an article in Adweek.com from May of this year, “According to Zenith, digital ad spend has grown 18 percent every year for the past five years while spend across all other types of media has grown .6 percent.” (Lauren Johnson, Adweek) Extrapolating this growth trend into the Trinidad & Tobago market, we see negative growth trends from traditional media. This would explain why positioning yourself for a future where Digital Ad Revenue is key to profitability makes perfect sense to media companies.
How to shift to Digital?
They are some fascinating changes happening to the media market as we witness mass experimentation, on a macro and micro scale. Traditional media companies are coming to terms with the seismic shifts caused by digital platforms in the media landscape. As advertisers shift budgets online in response to audience and technological changes, traditional media companies are left having to adjust their company models to suit. You can see direct evidence of that in the structural reorganization of Guardian Media with their radio, television, and print divisions becoming Content, News, Sales, and Production departments. They are struggling to become content creators who act as gatekeepers to an engaged audience. That audience is not restricted to the pages of a newspaper or the ad spots available during the broadcast day, but is rather spread across multiple channels. Guardian Media and others are now faced with the challenge of how to hold their audiences’ attention wherever it happens to want to engage with them, and somehow monetize that audience. And they will have to monetize it in a way shows real value for advertisers while not turning off the audience.
There is no set roadmap for how to best accomplish the shift to Digital, but it is fascinating to see all the different ways the old and new entrants to the market are trying to fill the changing demands of the advertising industry. Media InSite is an independent, Port of Spain-based advertising data service specializing in competitor intelligence and ad placement auditing for brand managers, ad agencies, and media houses. Operating since 2011, the company records and indexes advertising content in Barbados, Grenada, Guyana, Jamaica and Trinidad & Tobago. Statistics in this report are based on information from our proprietary digital system that logs all instances of pre-recorded spot advertising on monitored radio, TV, and cable channels along with staff-indexed newspaper display advertising content. Contact: Allison Demas Founder and CEO Media InSite Ltd. www.media-insite.com