Media stategy - The Nestlé spend shift

It was recently reported in Media Week that Nestlé is switching more money out of TV in favour of outdoor, largely as a result of disagreements with ITV.

Have ITV upset Nestlé to such an extent that they are now forcing their hand? Or is Nestlé abandoning years of convention in favour of strategies that are less reliant on TV? Within the fast-moving consumer goods marketplace, TV has historically been the builder of brands and the reason why Nestlé, among others, can boast such powerful portfolios.

Major advertisers have reams of data to back up its use. They also know that it not only drives sales, but also has the power to establish and maintain market position. So why are they now doubting its worth? ITV also stands accused of not rewarding long-term advertisers.

But advertisers have been operating in a TV marketplace which still uses station average price and is even more controlled since CRR – the contract rights renewal system brought in to protect advertisers with the creation of a single ITV – was introduced.

TV is cheaper than it has ever been, so could it be Nestlé’s negotiation and not the medium which is at fault if it is not being delivered.

Discovering more effective media mixes, as part of overall marketing communications is mandatory to enable long-term brand planning.

In today’s world, if you stand still you actually go backwards. So moves to develop return-oninvestment models are the goal of many marketers and communication planners in justifying their efforts.

But this is wholly different to substituting one medium for another because it is falling out of favour. And more importantly, why now? Surely TV has not stopped demonstrating its cost effectiveness for long-term advertisers? Outside of TV, the rules are different. Many advertisers have been lured from TV with incentives, which can be likened to those being offered to new TV advertisers.

These incentives do not necessarily imply any value advantages in exchange for loyalty. But setting a precedent is a powerful negotiation tool, especially as deals operate within an increasingly transparent trading arena.

So who has the power now? Understanding the inter-relating effects of marketing communications can ultimately prime advertisers and agencies with a greater knowledge base.

From this they can make informed decisions within the overall marketing plan, giving them the edge in both intermedia choice and negotiation.

Whether ITV accepts a shift in power is another issue, but if advertisers start to spend differently, their learning can only increase.

Review by Martin Greenbank, Strategist BLM

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