Tuesday, March 31

Shifting Ad Dollars: Reckitt-Benckiser Migration


"We've seen a fundamental shift in consumer consumption and media habits migrating over to digital video. Obviously YouTube started it, but we want to be aligned with professional content. With broadband getting to the scale that it has, the shift has happened. The integration of traditional and digital media is here now." — Marc Fonzetti, media manager and internet specialist for Reckitt-Benckiser

According to AdvertisingAge, Reckitt-Benckiser joins a long line of companies that are increasingly interested in the net. The company plans to shift an estimated $20 million in TV ad dollars to the Web for more than 15 of its brands, including: Lysol, Air Wick, Mucinex, Finish and Clearasil. $20 million is still only a small percentage of its estimated $475 million media purchased, but signals an accelerated migration.

The increasing emphasis on the Internet isn't only about CPM. Its also about market share. The company, which markets everything from Electrasol dishwasher products to French's mustard expects to increase its market share from 30 to 31/32 percent in 2009. Even more striking, Rob De Groot, head of the group's North America and Australia region confirmed what our research for some of our accounts has been saying for some time.

"The start of the recession has been here for the last six months. We haven't seen any recession in our numbers," he said, according to Reuters. "There is no reason to doubt that our innovation-led strategy is not working."

Right. Recessions are elective. Innovation is exempt.

Reckitt-Benckiser has frequently led the U.K. stock gains, including adding 7.6 percent profit after beating analysts’ estimates in February. The real losers in their most recent move might be major TV network Web sites. Reckitt-Benckiser decided to partner with ad-serving video ad networks such as Glam, Tidal TV, YuMe and Brightroll, rather than TV network Web sites, to avoid higher online CPM charges.

It's long past time for advertising agencies and communication-related firms to consider the obvious. Convergence is accelerating at a increasingly rapid pace. In fact, from our independent research, there is virtually no one under age of 30 that distinguishes media from social media or broadcast from online digital. Besides that, traditional broadcast doesn't reach mobile.

All this means that 2009 is shaping up to be exactly what we said it might be. Except, this is the year of communication in three months, not 12.

2 comments:

Anonymous said...

Big networks will go the way of newspapers. It's inevitable.

Rich on 4/1/09, 8:05 AM said...

Anon,

I don't about that. It seems to me that some networks are handling migration better than others. It does illustrate that networks might want to reconsider how it measure value.

I'm not convinced CPM is the only value indicator online. Some television show fans are more passionate than others.

All my best,
Rich

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