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Market Forces Shaping the Future Media Mix

August 1, 2009
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The graphic communications industry can anticipate a dynamic and evolving media and marketing communications landscape over the next three years, according to a new PRIMIR study entitled “Media Mix and the Impact on Print.” By the end of 2007, total U.S. media and marketing communications spending levels exceeded $779 billion, with a five-year compound annual growth rate of 2%. Advertising media spending accounted for only 32% of this total, with a softening of spending levels in 2007 and overall declines in 2008 and 2009. In contrast, non-media spending channels continued to grow at a 3% compound annual growth rate, fueled by steady investments in promotional programs.

However, print’s role in this media and marketing communications mix has been in decline for the past six to seven years. Executives and experts interviewed for the PRIMIR study anticipate spending declines in newspapers, inserts, directories and catalogs, but expect relatively steady spending for on-demand sales collateral, packaging, direct mail and custom publications. At the same time, they plan to steadily increase spending levels into an expanded array of online/Internet-delivered communication as well as mobile vehicles.

According to the study, six notable marketplace forces will be the primary drivers behind media and marketing communications spending through 2012:

1. Increasing diversity and growth in the 65+ population segment represent more important influences on consumer discretionary spending and media consumption, including rapid adoption of online activities. As of 2007, 35% of America’s population was part of a minority, which is significantly higher than Canada’s 16%. Aging populations are also a factor, with 12% of North Americans over 65. That figure is expected to increase about one percent per year through 2030. This older group is Internet enabled, with 45% of those aged 75+ actively online and the percentage is steadily increasing (the proportion doubled in just three years).

2. Economic conditions that began eroding in late 2007 unfolded into a global recession by late 2008. Recessionary conditions are expected to continue throughout 2009 and potentially linger into the first portion of 2010. Economic pressures on marketing executives are driving efforts to capture media and marketing communications efficiencies in every channel, with greater analytical efforts to determine effectiveness and return on investment.

3. Rapid and far-reaching expansion of digital technologies by media and consuming audiences are creating Internetdependent lifestyles that are reshaping content consumption practices and creating new content delivery opportunities. Examples include the digital conversion of television broadcasts, the expanded coverage of digital outdoor signs, increasing household penetration of digital video recorders, steady growth in household broadband access and online activities ranging from viewing videos to handling personal finances. Internet-dependency will grow as continuous expansion of Wi-Fi connectivity makes Internet access more ubiquitous. Concurrently, traditional media, especially printed media, are aggressively trying to build online audiences and ad revenues to offset continuous declines in their off-line audiences.

4. Notable within the context of digital media expansion is the mushrooming adoption rates for Internet-enabled mobile devices in particular. This trend is expected to gain momentum, especially as recession pressures ease, driving a new wave of convergence across electronic devices that generate new behaviors for overall media consumption. Devices in the future will likely represent a hybrid combination of features from laptops, netbooks, mp3 players, GPS navigators, video recorders and ‘smart’ phones.

5. A critical shift toward consumer control over media consumption and message delivery accompanies these digital innovations. As Internet-enabled devices converge in the coming years, a sizable and ever-increasing proportion of consumers will exert much greater control over when, where, what and how media is consumed.

6. The ultimate by-product of all these market forces is the continual fragmentation of audiences. It will be increasingly difficult to cost-effectively transmit marketing communications that reach a critical mass of target consumers.

Not only will marketers and media outlets refine their thinking about integrated communications programs, but they will also evaluate the individual components of 360-degree communications plans (the practice of using multiple media channels to surround target audiences with advertising message exposure opportunities) to ensure effectiveness and the accountable contribution of each.

There remain opportunities in the printing industry, but aggressive efforts to build market share to offset overall business declines from key customer segments will be necessary. Global opportunities exist in selected countries where traditional print media have yet to experience severe contractions, but these too may begin to erode on a longer term horizon as digital media and production processes gain a stronger foothold. Economic expansion will help rebuild demand for print industry products and services but only in the more stable print media categories.

Firms in the printing industry supply chain will need to innovate and explore opportunities to develop new sources of revenue outside their existing core businesses.

In addition, the development of new ancillary products and services will not only expand the customer base but also strengthen existing customer relationships.

NPES members will receive an Executive Synopsis of the study in early September and, to request a free copy of the complete study, may contact Aaron Allenza at NPES headquarters at e-mail: or phone: 703-264-7200.


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