French CSA study highlights disruption in the advertising market

posted on 31 July, 2018   (public)

Study identifies turning point for the advertising sector

On 25 July 2018, the French Ministry of Culture and the Conseil supérieur de l'audiovisuel (CSA) the French regulatory authority for the media have jointly published a study titled "Media and online advertising: value transfer and new practices", which was conducted by the consulting firm Bearing Point. The 95-page study is based on some 60 interviews with advertising market professionals and on an extensive collection of (so far unpublished) data on the advertising revenues of publishers and advertising agencies.The report has a three-tiered objective:

  • Provide a description of state of the current advertising market and quantify value transfers from traditional media to the Internet;
  • Identify and analyse the causes of the shift of advertising revenues from press and audiovisual to the Internet;
  • Come up with strategies that could be implemented by press and audiovisual actors.

The study shows that the development of digital technology is disrupting the functioning of the entire advertising ecosystem. The emergence of Internet advertising in the early 2000s led to a profound shift in advertisers' spending strategies in favour of online advertising and to the detriment of the traditional activities of the broadcast media.

  • Advertising revenues in Television, Print, Radio, Out-of-Home and Film decreased by one-third between 2000 and 2017 while Internet advertising has continued to grow and now accounts for more than a third of total multi-media advertising revenues.
  • Almost all of the growth in the Internet advertising market comes from paid referencing (search) and social networks, two segments in which traditional media players have very little presence: 92% of the growth in advertising investment on the Internet in 2017 comes from these two activities.
  • The loss in revenues for broadcasting is less significant than for the printed press but they are not offset by revenues generated on the Internet: Television advertising is proving resilient thanks to the quality of its offer and its ability to rapidly develop brand awareness and image. However, the multiplication of distribution channels and the proliferation of video offerings on platforms make it difficult to monetize content in a highly competitive universe where audiences are fragmented.
  • The study identifies a turning point for the advertising sector: In response to advertisers' heightened demands, market players have taken positions on brand safety. Advertisers now tend to consider that building brand awareness is a long-term process, with hybrid on and offline communication strategies.
  • Strategies that could be implemented by press and audiovisual actors include: having sufficient technical and human resources, pooling the necessary investments and developing new formats. The players must face new challenges: recreate value through content, be as close as possible to advertisers' expectations, acquire technological skills, demonstrate efficiency, and position themselves on innovative media.

Médias et publicité en ligne : Transfert de valeur et nouvelles pratiques (FR)

Source: Website of French CSA

Additional EPRA Background: Note that the future of advertising in the the digital age features prominently on EPRA's agenda in 2018 with an annual Working Group on Commercial Communication 2.0. The next session of the Working group will take place on 11 October 2018 in Bratislava at the kind invitation of the Slovalk Council for Broadcasting and Retransmission.