Posts filed under ‘Market Conditions’
Some highlights from the latest Tampa Bay Economic Indicators Report published by Florida Communications Group Research:
- Unemployment rates continue to be high in the Tampa Bay market – ending the second quarter with a 12.1% rate – higher than the national unemployment rate of 9.6%.
- Total home sales for the first six months of 2010 were up by 14.3% in Hillsborough County.
- New auto sales showed positive signs of improvement and were up by 14.0% in the Tampa DMA and 14.1% in Hillsborough County.
- Taxable retail sales – a major barometer in measuring consumer spending – were down 0.7% in the Tampa DMA and by 1.4% in Hillsborough County. However, one positive note was that retail sales from March through June were starting to level off, indicating that sales may finish the year flat compared to 2009.
Here is the Florida Communication Group Research Department’s Key Economic Indicators report for the Tampa Bay market in first quarter 2010. We are definitely seeing some nice indicators of improvement across the board. Home sales, automotive sales and retail sales are showing growth, while the Tampa Bay unemployement rate is down slightly from the highs of the last two months.
Unemployment rates continue to be high in the Tampa Bay market – ending the first quarter with a 12.7% rate. However, that 12.7% is down about 1/2 a percentage point from highs of 13.2% seen in January and February of this year.
Total home sales are on the rise, up by 18.5% in Hillsborough County
Number of Homes Sold in Hillsborough County
Taxable retail sales were down for the 1st quarter by 2.6% in the Tampa Bay DMA and by 4.5% in Hillsborough County. However, one positive trend was retail sales for March 2010 which showed a slight increase of 1.7% in both the Tampa DMA and in Hillsborough County – the first monthly increase in more than two years.
According to the Tampa Bay Partnership, the Tampa Bay region’s economy ranked third in overall strength in comparison of six major Southern cities. The Tampa Bay Partnership, a regional economic development group, released its economic scorecard for fall 2009. The twice yearly scorecard measures the Tampa area against five large metro areas in the South: Atlanta, Dallas, Jacksonville, and Raleigh-Durham and Charlotte, N.C.
Overall, the Tampa area finished third out of the six economies, which was the same score it got in spring 2009. Raleigh-Durham finished first, propelled by its educated work force and high-paying jobs. Atlanta finished last, dragged down by a loss of 140,500 jobs from fall 2008 through fall 2009.
The economic scorecard measures the six regional economies on six economic indicators. For example, the Tampa area scored last in the housing category. It was hurt by its big drop-off in housing permits. Between the third quarter of 2008 and the same period in 2009, housing permits fell 51 percent in the Tampa area. The Tampa area also has the least affordable apartments, when comparing rents with the Tampa area’s median household income.
Not known for its high-tech industries, the Tampa area also suffered in the scorecard’s innovation category, finishing fifth. It was dragged down, in part, by the relatively few patents issued to Tampa area individuals or businesses. The Tampa area received 0.58 patents per 10,000 workers in the third quarter of 2009. By comparison, Raleigh-Durham received 4.25 patents per 10,000 workers.
The Tampa area was the only one to log an increase in average wages between the first quarter of 2008 and the first quarter of 2009, the latest period for which information was available. Over that year, the Tampa area’s average wages rose 0.38 percent and every other city saw its wages fall.
How Regional Economy Measures Up
(Rankings are for the most recent period, Fall 2009)
The Tampa Bay Partnership ranks the Tampa area against five other Southern metropolitan areas on economic factors. In its newly published fall 2009 ranking, the Tampa area finished third overall.
|Employment and work force||4||6||5||1||3||2|
|Income and productivity||2||5||6||1||4||2|
Source: Reprinted from The Tampa Tribune Business section, 1/29/10
I’ve read a lot of marketing research lately on Set Top Boxes and how they could possibly be a replacement for Nielsen ratings. Each time my VP of Marketing or my company president contacts me to ask my opinion, I have to deliver a solid “Unsure” answer.
One of the main companies providing this service is Rentrak. The idea is that Rentrak will partner with a Satellite cable provider such as Dish Network and a cable provider (currently they are working with AT&T, I believe), and capture reams of data on what the digital cable boxes that connect to our TV sets are tuned into. The theory is that there are thousands of set top boxes in any given DMA, and in the best of circumstances, competitor Nielsen only has hundreds of boxes.
Here is a situation where more is not necessarily better. For example, although Nielsen only has 610 homes in its Tampa sample at any one time, extensive statistical analysis has been run on our market to prove that number will provide statistically relevant results with low standard of error. Beyond 610 homes, it doesn’t matter if you have 1200 homes or 12,000 homes, you’re not going to significantly improve the standard of error on any particular rating. In addition, I know to a day, the demographic composition of each of those 610 homes, and I know that sample is very closely matched to represent the market demographics, in terms of age, cable/satellite usage, children in home, race and geography.
Nielsen’s Pat Ligouri made an excellent point in a Media Post article this week:
In a DMA where a telco’s STB HHs represent only 8% of the market’s TV HHs, you will not get a complete picture of tuning activity, especially if those STB HHs are clustered geographically or if the telco’s subscribers have specific age, income, or other characteristic skews that don’t mirror those of the DMA.
Secondly, I have concerns about limiting TV measurement to only homes with these digital cable boxes. Again, in the Tampa market, there are over 115,000 homes that still receive cable only over the air (about 6% of the market). Even if we were to suppose that those 6% of homes won’t drastically affect the ratings one way or the other, Tampa is still a very fractioned media market. (See my earlier post about cable advertising in Tampa Bay). Currently, Tampa residents are 56% Bright House cable, 15% VerizonFIOS cable, 15% Satellite only (no cable), 8% other cable providers (such as Comcast) and 6% over the air. In order for me to comfortably accept ratings from a service such as Rentrack, I’d want to see them form partnerships with all of the cable and satellite providers that cover our market, otherwise I would fear highly skewed and inaccurate ratings.
And even IF that were to occur, I’d still want to investigate viewing patterns by TV set. For example, in my own home, I currently have only one set-top box, yet I have four televisions. The single set-top box is connected to our “main” TV, but the other three are connect in the old fashioned cable-straight-to-the-wall mode. One thing we learned during last summer’s digital transition is that viewing patterns by television differ greatly. The kinds of programming, times of viewing day and number of hours I use my main TV are very different from how I view my television in my bedroom, or how my husband uses the TV in his “mancave”. During the digital transition, many people would buy the digital converter box for their main televisions, but neglect the bedroom TV. Correspondingly, viewing levels for the TV dayparts most highly viewed on that bedroom TV (namely early morning news and the late night talk shows like Leno) dropped pretty significantly.
So, while I watch the growth of set top box ratings services like Rentrak with interest, it may be quite some time before I make a recommendation for our company to seriously consider this as a viable ratings option. Wait and see.
It is a very competitive cable marketplace in Tampa Bay. Division among various cable systems prevents an individual system from reaching the full market. In Tampa Bay, there are four major cable systems and 50 minor cable systems – up to 108 different head-ends an advertiser would need to purchase to fully reach all cable subscribers.
Tampa Major Cable Systems
|Bright House||Tampa Bay DMA||992,790|
|VerizonFIOS TV||Tampa Bay DMA||272,100*|
|Comcast||Sarasota / Bradenton||160,100|
Source: Nielsen Media Research (February 2010). *Verizon FIOS includes Knology Subscribers (estimated at 27,200 total homes in Pinellas County).
By only advertising on Bright House, an advertiser’s commercial will not be seen by 44% of the Tampa Bay Market! Alternatively, advertising on a broadcast channel like WFLA, you will reach all of these homes, regardless of how they receive their TV signal.
Source of Television Signal – Tampa Bay DMA
Due to the rise of satellite and VerizonFIOS, Bright House Cable’s penetration in the Tampa market is slipping quickly. In fact, their penetration is down 8% in the past two years, and declining more every month. You can see the effect of Verizon, as Bright House’s penetration among cable homes is declining even faster than their penetration of the total market. While Bright House used to have a monopoly hold on the cable market in Tampa, Verizon has caused them to lose 15% of their share of the cable market in three years.
The FCG Research Team just finished up updating our annual presentation comparing broadcast television advertising to cable television advertising. Here are some great research tidbits from that presentation:
Broadcast Television Strengths
- According to bi-annual studies conducted by the Television Bureau of Advertising and Nielsen Media Research, the public consistently perceives broadcast television as the most influential, most authoritative, most exciting and most persuasive advertising medium. Despite the attention given to cable news networks such as Fox News and CNN, broadcast TV is also consistently seen as the primary news source, the first choice for weather, traffic and sports and the most involved in community.
Primary Source for News
First Choice for Weather, Traffic and Sports
Most Involved in Community
Source: TVB, Nielsen Media Research Custom Survey 2008. Graphs illustrate Adults 18+.
- In February 2010, the combined 9 broadcast networks delivered a total of 35.4 household ratings points in prime. In comparison, it took 42 cable networks combined to deliver 29.4 household rating points. On average, each broadcast network delivered more than 5 times as many households viewing as any cable network. Source: Nielsen Media Research, February 2010
Cable and ADS Penetration in Tampa
- Although market average cable penetration is 79%, the individual county coverage varies wildly, ranging from 37% to 88%. In fact, SIX out of 10 counties in the Tampa DMA have cable penetrations under the market average.
- Like cable coverage, although market average ADS penetration is 16%, the individual county coverage varies wildly, ranging from 7% to 56%. In fact, five out of 10 counties in the Tampa DMA have ADS penetrations over the market average.
|County||Cable Penetration||ADS Penetration|
Source: Nielsen Media Research, February 2010
- Cable penetration in the Tampa market had been declining from 2002 to 2008. Since the arrival of competing cable system VerizonFIOS in the Tampa Bay area in Spring 2006, overall cable penetration is on the rise in the market.
- Although penetration of Alternate Delivery Systems (ADS) such as Satellite has been declining in the past year, overall market penetration still remains above 16%. Advertisements placed on local cable systems are not received by ADS homes.
Attached is a report from Nielsen on Multicultural Advertising Spending Trends in 2009 , which takes a look at advertising targeted towards Spanish-Language and African-American segments. According to the report, spending on Spanish Language and African-American media declined 4.7% and 7.3%, respectively, in 2009. The declines are consistent with the trend in overall advertising, although are not as deep.
Spanish Language Ad Spending: Nielsen found that Spanish Language advertising was down 4.7% in the U.S. last year. A total of $5.4 billion was spent on all Spanish Language media in 2009, down almost $270 million from the previous year. The slide was paced by significant declines in National Magazine and Local Newspaper advertising, which were down 38% and 25%, respectively.
The decreases in print media were offset by a 32% increase in Spanish Language Cable advertising. Nielsen found that 19 of the top 20 advertisers in the medium increased their ad spends year over year.
Spot TV was the top cash generator for Spanish Language media in 2009 with an estimated $1.4 billion in ad sales, down 10% compared to the previous year.
|Spanish Language Media|
|Media Type||2008-$ (000)||2009-$ (000)||% Change|
|Spanish Language Cable TV||323,065.0||426,959.4||32.2%|
|Spanish Language Network TV||2,982,158.3||2,866,092.5||-3.9%|
|Source: The Nielsen Company|
African-American Ad Spending: Spending on African-American media saw a similar decline of 7.3% in 2009. The decline was paced by decreased spending in Network TV (-72%) and National Magazines (-33%).
Increased spending on Cable TV helped balance out the losses. Advertisers spent 35% more on African-American Cable in 2009, thanks to added spending by each one of the top 20 advertisers in the category.
Spot Radio earned the most revenue among African-American media in 2009. Advertisers spent $748 million on the medium last year, almost 10% less than in 2008.
|African American Media|
|Media Type||2008 $ (000)||2009 $ (000)||% Change|
|Source: The Nielsen Company|
Product Categories: The top spending product category for both Spanish Language and African-American media was Quick Service Restaurants. Advertisers within the category spent $335 million on Spanish Language media and $87 million on African-American media. McDonald’s was the top fast food advertiser in both media segments. The Automotive category was the next highest spender in both multicultural media. Spending in Spanish Language was down 39% in 2009, paced by double-digit percent losses by each of the top five auto advertisers. Spending by the auto industry in African-American media was down 18% year over year.
The category showing the most growth among the top 10 Spanish Language advertisers was Satellite TV providers. Advertisers in this category upped their ad spends 77% in 2009, as satellite TV companies made the pitch for their services in the run up to the DTV transition in June 2009.
|Spanish Language Categories|
|Product Category||2008-$ (000)||2009-$ (000)||% Change|
|SATELLITE COMM SVCS||134,658.1||238,744.6||77.3%|
|DIR RESP PROD||220,632.3||237,227.6||7.5%|
|Source: The Nielsen Company|
Insurance companies showed the most growth among the top 10 African-American media spenders. General Insurance and Car Insurance categories placed 8th and 9th after increases of 29% and 24%, respectively. The Motion Picture category showed similar growth, increasing its spend 24% to $72 million.
|African American Categories|
|Product Category||2008-$ (000)||2009-$ (000)||% Change|
|DIR RESP PROD||41,810.4||43,544.9||4.1%|
|Source: The Nielsen Company|
Here is the complete report from Nielsen: MultiCulturalSpotlight10.23.09