Thomas König, Group CEO REICHLUNDPARTNER, Raffaela Hinterreiter, Online Media Director REICHLUNDPARTNER Media, and Markus Huber, Managing Director SMC, discuss the future of the media landscape in Austria.
Question 1: Sometimes clients are surprised when they see the cost of a good digital campaign. Digital is cheap, isn't it?! Is there a perceived quality problem with digital advertising formats? König: When the world ends, I go to Vienna, because everything happens there 20 years later (Karl Kraus). This could also be adapted to the digital world in Austria. Unfortunately, such thoughts are still manifest among many decision-makers (including senior management). Hinterreiter: I don't think we're talking about a quality problem here, but rather it could be due to the extensive options for budget design. We are increasingly seeing that many customers now recognize the benefits of digital advertising and know how to use it for themselves, which means that more and more budget is flowing in this direction. But what is also important in this context: In addition to regional selection options, many other targeting options are available that also enable measures with smaller budgets. But broader target groups naturally require correspondingly higher budgets to achieve market penetration. Huber: There has been a major rethink in the industry in recent years: Customers have increased digital budgets, hired their own digital marketing specialists, and also realized that you can advertise online in a completely transparent and traceable way. I think the efficiency of online advertising is at an all-time high. This makes it possible for advertisers to find out exactly where customers come from, how high their customer acquisition costs (CAC) are, what other interests the user has - and to read out a lot of other data as well. Companies know exactly what they get for the "euro invested". For me, that makes social media the best advertising medium in terms of quality. Question 2: Let us return once again to the supposed 20-year gap in Austria of Karl Kraus. So is there any data on how digital vs. traditional has evolved in recent years? Hinterreiter: Yes, based on Focus data, we know that traditional spendings are declining - especially in the print sector, we have seen a continuous decline in recent years. During the pandemic, of course, media genres such as cinema and outdoor advertising lost heavily last year. In contrast, online spendings increased significantly. Based on the data now available for the first time as a result of the Austrian digital tax, we can infer even stronger growth in digital advertising spending in Austria. Huber: Global revenue increases can also be transparently tracked for listed social media such as Facebook, Twitter, LinkedIn and Co. This also clearly shows that we in Austria lag far behind other Western countries in terms of budget weighting. I think the year gap applies to Austria - if not 20 years, but still 5.   Question 3: Personalization and measurability are big buzzwords in the digital realm. What has become of it? Huber: The iOS 14.5 update presents us with one of the biggest challenges yet in the world of social media when it comes to measurability and will definitely keep us busy for the next few weeks and months. Initial results show that only 4% of users agree to tracking. Facebook and Instagram are currently preparing measures here to leave the networks free for those users who continue to agree to tracking. Hinterreiter: Users care more than ever about respecting their privacy and handling personal data sensitively. With the elimination of third-party cookies, the digital advertising industry faces a new challenge. First-party data will continue to move to the forefront, and email marketing will also continue to gain importance in personal user interaction. Of course, this change will also affect personalization and measurability. Nevertheless, promising approaches already exist and will continue to evolve in order to appropriately map the performance of digital campaigns in the future. Measurability definitely remains one of the biggest advantages of the digital world.
  Question 4: How do you see the development of audio communication in the digital field? Will streaming and podcasting soon replace radio and TV as a medium? Hinterreiter: The audio sector has never been as diverse as it is today, which is due to the numerous digital offerings. The use of music streaming, web radio to podcasts continues to increase. The growing on-demand offering and the variety of topics create interesting potential for advertisers. Just recently, YouTube also added audio ads to its inventory. Digital audio offers exciting possibilities not only for extending analog RF campaigns. The high level of attention and the accessibility of sometimes very pointed target groups - especially in the area of the increasingly popular podcasts - also make digital audio advertising increasingly relevant for the Austrian advertising market. Of course, programmatic advertising has also long since taken hold of the audio sector. König: I see great potential in podcasts in particular, because the platforms for this are also becoming more and more public and consumers can thus search for and expand their area of interest in a targeted way. Huber: Podcast, but also audio books are the current audio trend. For advertisers, this offers a wealth of new opportunities. Be it the extension of classic radio campaigns or the simple sponsoring of podcasts. Audio communication has also long since arrived in the field of social media. Most recently, the social network Clubhouse made headlines. Here, users can host livetalks and interact with listeners. Facebook is also currently working on so-called Live Audio Rooms, which are supposed to be an alternative to Clubhouse. But other social media, such as TikTok, which is particularly popular with Generation Z, also thrive on the combination of moving images and audio. Our general experience is that all social media that have emerged in recent years are heavily influenced by audio communication. Podcast example. https://open.spotify.com/show/6Hwsvr8aqel8HWsZkDrwXs   Question 5: What will media use look like in the future? What are the trends that await us? Hinterreiter: Basically, we see the development of analog (classic) media very positively, as they continue to deliver strong reach and high contact quality. I think that the trends that have already become apparent in recent years will continue. Media use will become even more digital and flexible in the future. Time-shifted and location-independent use will play an increasingly important role, especially for channels such as TV and radio. On-demand moving image or audio offerings will continue to grow rapidly. This can also be seen in the current hype surrounding podcasts, which appear to be becoming a sustainable trend. Changes in media use and the accelerated flow of information are having a significant impact on the print sector. Here, too, online media can score with advantages such as topicality, multimedia and interactivity. König: I believe that digitization is the key to individualization - allowing consumers to define their own individual program for themselves. But even in the traditional sector, we see that special interest media are definitely growing and new ones are emerging. What no longer works is the "one fits all" solution. In other words, it won't be enough just to be present on social media in the future either? Huber: That depends entirely on the target groups and the budget. If you reach the majority of your target audience on one social medium, you don't necessarily have to be active on several. I think that media use will continue to become more digital, as it has for the last few years. In the field of social media, the topic of social commerce will become more and more established. In the past year in particular, more and more companies have relied on performance campaigns to promote their web stores or generate online leads. I assume that companies will have to integrate social commerce as a fixed component of their sales strategy. Here, efforts to direct the entire sales process to social media are taking place again and again. That is, you handle all the sales on Facebook or Instagram. Of course, the field of influencer marketing is also exciting to watch. As soon as a new social network establishes itself, the first influencers appear. In general, we notice in the area of influencer marketing that more and more of our customers are relying on micro-influencers - i.e. lesser-known people who nevertheless have a high level of credibility in their community. Here, a kind of fusion with social commerce is currently taking place. Thus, "user-generated content" has a much better conversion rate than pure product posts. Question 6: Closing Question. If you invest the entire budget in digital media, you can save analog advertising. Is that really so? König: Big brands could probably afford to do that because of the brand strength that has already been established. Among the leading international cosmetics groups, the trend is very much in this direction. The situation is different for newcomers. Why? These brands must first clearly define their positioning and anchor it in the minds of the target group. This requires an integrated media mix. Only in this way can brand equity be built up and the positioning sustainably anchored. I think that there is no generally valid answer to this question, because every brand has its own personality and this must be assessed individually. Huber: In the area of social media, we notice that social media campaigns work particularly well when the brand is established and perhaps a classic campaign is also running in parallel. This increases the affinity for a product or brand and also has an impact on the performance of the social media campaign.