AAF Media Investment Survey | Presentation to Google Marketing & Ad Clients
By Wally Snyder, President & CEO, American Advertising Federation
Tuesday, May 1, 2007 | Four Seasons Hotel, Atlanta

Download the accompanying PowerPoint.

Good afternoon, everyone. It's a pleasure to be here to talk about the dynamic changes occurring every day in our field. I want to thank Maureen Schumacher, Allison Berger and the entire Google family for organizing this great event and allowing me to participate. I'm especially grateful for this invitation because you know that by profession, I'm a lawyer and you invited me anyway. To paraphrase famed banker J.P. Morgan, "I don't want lawyers to tell me what I can't do; I want them to tell me how to do what I want to do." Well, I'm not here to do either because the leadership demonstrated by this gathering speaks for itself. But I would like to provide some insight and perspective to the phenomenon...


During a recent interview I was asked for my take on the biggest changes occurring in the advertising industry. Without a doubt, it's the media options available in the marketplace. Not too long ago we were talking about the impact of creating online communities, products and services. Now, we're living it. And as the technology expands so do the possibilities. Clients—from Australia to Atlanta, from Guyana to Georgia—have more access and want more opportunities to connect with consumers. And it doesn't matter where you live and work—we're all connected. This ever-expanding array of media choices makes decision making tougher—for clients and agencies, account execs and creatives.

The real opportunity is to create an extended plan that blends traditional and new media to enhance performance. If you're interested in running a profitable business (and who isn't?), you have to dig into the research, question your clients about their goals and expectations, and realize that the future is here and now. It's clear technology is changing the digital landscape—for manufacturers, consumers and the advertising industry. No, we are not exempt. More and more, consumers are in control of their media. They want information delivered to their devices in new and unique ways, and they want to decide how to interact with the information.

According to recent statistics, online advertising has grown nearly 19 percent in the last year, making it the sixth largest media category. Google recently acquired YouTube and together will control 60 percent of the Web's video advertising market. Analysts say video advertising is one of the fastest-growing revenue streams in cyberspace and predict spending to triple by 2009—that's 1.5 billion dollars. Keeping up with what's happening can be exhausting. Every week it seems there's a multibillion-dollar deal involving a company that didn't exist a few years ago. That's the pace of change—fast and faster.


As the Unifying Voice for Advertising, the AAF is dedicated to providing top-notch information to members and our colleagues in advertising, marketing and communications. That's what our Media Investment Survey 2007 is all about—an attempt to make sense of what's going on so that we can serve our clients more efficiently, run our business more profitably and draw from the available talent pools more effectively. We're taking up this challenge because the digital landscape is perhaps the major issue of our time, and we see it as our mission to bring everyone to the table to discuss the myriad aspects. The research tells us where we stand. You can view this and other studies on our Web site at www.aaf.org. And much of our National Conference—convening June 7 to 9 in Louisville, Kentucky—will be devoted to this topic and will feature a stellar lineup of speakers and professional development workshops. Now, on to the survey. In order to get an accurate picture of what's going on and the thinking in and around the industry, our respondents...


...came from all over—agency, media, advertiser/client, supplier and academia.


A majority of the pool identified themselves as directors, owners and managers.


And almost 90 percent were to some degree involved in the company's or client's decision-making process for media investment. So, I hope that backdrop helps when viewing our results.


We started out with a simple question. During a time of unprecedented change, how are marketers navigating the tumultuous media landscape? To find out, the AAF Media Investment Survey 2007 polled nearly 1,000 advertising industry leaders across agency, media, client and other sectors. The bottom line result: The increasing rate of change is resulting in a commitment to innovation and dedication to a media mix with the proper balance of traditional and emerging media. Three-quarters said that up to 20 percent of their budget is reserved for experimentation and launch vehicles. In addition, one in eight of respondents list 21 to 40 percent of their budget as reserved for these items.


When asked about media planning in 2007, respondents ranked the following statement—"I am open to new ways to use traditional media" —highest at 78 percent; the next statement—"The right media mix almost always includes a balance of traditional and non-traditional media"—came in with 76 percent, and the final statement—"The search for new properties to grow my brand never stops"—garnered 58 percent. When it came to traditional media...
  • 51 percent of respondents said newspapers are the media category with the most opportunity for reinvention;
  • 34 percent said it was network TV.
  • And in the magazine sector, 46 percent said the business category is "most in need of a newcomer to shake things up."


When asked to rate their own performance at managing, adapting to and getting out in front of significant changes in 2006, one-third of marketers give themselves high marks while one in five admit they have much room for improvement.


I think this slide tells us an awful lot about where we are. As you can see, several Internet phenomena took respondents by surprise, including the rise of YouTube and the rush to Second Life; even in traditional media, many were surprised by the changes in newspapers and metrics.

[SLIDE 10]

When we asked about the pace of change in 2007, 58 percent predicted an even faster pace than in 2006.

[SLIDE 11]

That led 52 percent to agree with the following statement: "I am MORE LIKELY to anticipate, prepare for and get out in front of changes in the media landscape in 2007."

[SLIDE 12]

And of the overall respondent base, 73 percent say "Up to 20 percent of my budget is reserved for experimentation and new properties." On average, respondents will devote 15 percent of their overall media spending to innovation.

[SLIDE 13]

When asked about their approaches to media planning in 2007...
  • Four in five say, "I am open to new ways to use traditional media."
  • Four in five say, "The right mix almost always includes a balance of traditional and non-traditional media."
  • Three in five say, "The search for new properties to grow my brand never stops."
  • The majority said that staid media categories are in need of innovation if they are to remain competitive...

[SLIDE 14]

Here are a couple of examples. In magazines, the category most in need of a shakeup is business, by a significant margin.

[SLIDE 15]

And as I said earlier, even traditional media are feeling the effects of heightened expectation and performance, with 51 percent naming newspapers as the media category most in need of a shakeup. Other categories include network television, radio and direct mail. Believe me, these categories understand this and are taking action.


Well, that was just a peek into the thinking of your colleagues and clients. I appreciate your attention and your time. I'm excited about the future and I hope this and other research will continue to bring us together to synthesize new solutions and innovate new products for the industry. This and other studies will help prepare us for the future, if we keep an open mind and a spirit of cooperation. The journalist and editor, Roy W. Howard, got it right when he said, "No date on the calendar is as important as tomorrow." Thank you.