MediaCommunications

MediaCom View: As media owners begin to migrate more video content online, the real challenge will not be recruiting the audience (who will naturally gravitate there over time as hardware convergence proliferates) but how they will sell the packages. There are numerous questions: what kind of packages will be most attractive to advertisers? What will the pricing models be; e.g. what will a pre roll on Friends online be worth Vs a 30 second spot offline in Friends? Should online and offline be sold together as part of the same broadcast package? We believe that all of this is still to be decided and that clients should test early and work with media owners too establish the best/most effective solution.

MediaCom View: It has been tremendously important for outdoor to maintain its growth momentum and judging by the revenue figures reported by the OAA last week, this continues to be case. After the strong performance in Q3, with outdoor finally hitting double digits (10.4%) as a proportion of display media, clearly finishing 2006 strongly was a primary objective for the industry. As expected, only online matched and exceeded outdoor's growth by the year end. The final outdoor figure for 2006 was £932.7million versus £896.8million in 2005, an overall increase of 4% across the industry. The lowest quarterly growth in 2006 was in Q2 which only showed a 0.5% increase, so to complete Q4 with an increase of 7.2% was particularly triumphant. Entertainment, telecomms and retail were the highest category spenders on outdoor last year, accounting for 35% of the overall spend in the medium. With the diversity of out of home formats involving even greater focus on digital platforms in 2007, it seems evident that the medium will benefit from further substantial growth in this sector as well.

MediaCom View: The self-regulating, non-broadcast body on advertising practice, is currently discussing the broadcast ban on junk food advertising to anyone under 16 & how best to implement this ban across all other media, i.e. - print, online, cinema & billboard. In November, Ofcom laid out proposals to block manufacturers of certain foods (i.e. - those high in salt & sugar content) & prevent advertising on TV at certain times of the day. The Department of Health have gone on record to say that the rules for non-broadcast advertising should follow those for broadcast advertising but, currently, they do not. This is due to the non-existence of an external regulator for this media. Banning adverting on any level would have a severely adverse affect on ad revenue streams and it would be a serious worry for the non broadcast media.