Sipra

Sipra has an exclusive contract with Rai to manage the advertising space of Rai’s television and radio broadcasts in analogue, digital and satellite and webcast, with the portal and all the websites in the www.rai.it domain, promoting the high value of the media under concession to investors, in terms of programming quality, audience ratings and less overcrowding.

The increase in competition in the advertising sector, which coincides with the development of the digital offering on TV and the Internet, as well as the tendency by investors to reduce their advertising budgets, has led Sipra to adapt its commercial structure to the new market conditions.
In order to optimise the presidia of the domestic and foreign markets and make the most of the offer of multiplatform contents of Rai, at the beginning of 2011 the commercial structure was strengthened: the TV, Film and Web Northern Sales Management and TV, Film and Web Southern Sales Management were created, along with the New Business and Foreign Management, with the aim of expanding the Sipra customer portfolio by developing commercial relationships with new investors in Italy and abroad.

Lastly a structure dedicated to the development of the new Product Placement format was created.

In a context characterised by the deceleration of the economy and the drop in consumption, advertising showed evident signs of difficulty in 2011.
Considering that the Nielsen figures available to date do not allow a fair comparison, due to the absence of declarations of certain concession holders of the sale figures relating to Cinema for December 2011 and of the Cards for the last two months of 2011, the estimate for closure of the year of the market total is - 3.8%, with a loss of 342 million euros. All media suffered significant reductions in advertising revenues, apart from the Internet, which closed at +12.3%.
(Source: Nielsen Media Research – Net Investments for 2011).

Overall, the trend in advertising revenues in 2011 must be interpreted not only in the light of the global deceleration of the economy, which has caused a general resizing of advertising budgets, but also in comparison to 2010, a year characterised by the presence of big sports events, such as the South Africa World Cup and the Vancouver Winter Olympics.

Television advertising investments showed a decline of 3.1%, losing 147 million euros. The medium was influenced by big cuts in budget, particularly for Mass Consumption, Telecommunications and Electrical Appliances. (Source: Nielsen Media Research – Net Investments for 2011).

Sipra’s sales of advertising on the general-interest and specialised channels of the Rai Group recorded a reduction, net of sports events in 2010, in line with that of the television market. During the year 131 new customers were activated on the general-interest channels.

As regards the specialised channels (a total of 11: Rai 4, Rai 5, Rai Premium, Rai Movie, Rai Storia, Rai Sport 1, Rai Sport 2, Rai YoYo, Rai Gulp, Rai News and Rai Italia) advertising revenue highlighted a significantly positive performance compared to 2010, thanks partly to the acquisition of 114 new customers.

The television offering is, therefore, able to satisfy the planning requirements of a greater quantity of targets of advertising investors.

In terms of television advertising investments, Product Placement has also taken on relevance since 2010 (by virtue of the implementation of EU directive 2007/65/CE with Legislative Decree no. 44 of 15/03/2010, the socalled Romani Decree). During 2011, 38 initiatives were accomplished with 30 customers (only one of which was present in 2010).

As regards Radio, on the audience figures front, we ought to highlight the entry into liquidation of Audioradio.
The latest official figures available are therefore related to 2009 and are too obsolete to satisfy customer planning requirements and to represent the developing of audiences for the stations.
This situation can only penalise the medium at a time of evident market crisis.

Investors and operators in the sector would like more recent figures on audiences so that they can measure the medium, but broadcasters have not yet reached an agreement as to which research institute they are going to use.

All this has contributed to the worsening of the recessive trend of the radio advertising market, which fell 7.7%.

Sipra recorded a negative trend, worsened, as already mentioned, by the comparison with 2010, a year characterised by sports events (World Cups and Olympics).
Despite the difficulties indicated, in 2011 Sipra intercepted the communication needs of 112 new radio customers.

As regards Cinema, the latest Nielsen estimates using homogeneous figures, relating to the first eleven months of the year, indicate a 15.7% reduction in revenues.
The Sipra circuit, completely digitalised since last year, clocked up 21.9 million presences with 526 screens in 2011 (Source: Audimovie).
Sipra worked to fully exploit the potential deriving from digitisation, also offering products differentiated on the basis of film programming and other possible planning requirements of its customers. The advertising investments of the Cinema medium are supported by the quali-quantitative data offered by Audimovie, and during 2011, Sipra recorded a reduction which was lower than that of the market.
During 2011, 64 new customers made advertising planning on the Cinema medium.

Once again revenues from the Web have grown, albeit to a lesser extent than in the past, closing the year (search excluded) at +12.3% (Source: FCP Assointernet).

In the media mix, for the media monitored by Nielsen there was a rise from 6.3% to 7.4%. (Source: Nielsen Media Research – Net Investments for 2011).

For 2011 the figures of Audiweb show an expansion of the audience (+50.5%) of mobile phone owners connected to the Internet, reaching 7.3 million Italians, or 15% of the reference population. (Source: Audiweb press release of 12 May 2011).

The public service on iPhone and iPad is conformation of an increasingly multiplatform Rai, rich in applications on these supports: Tg1, Tg3, Guida ai programmi, Rai Community, Prova del cuoco, Italia 150, Televideo, Un medico in famiglia, Rai 5, RadioRai, Ghigliottina.
Important new applications are on their way: Rai News, Tg2, Rai Sport and Rai.tv on tablet.

Outlook for 2012

The latest forecasts by the main advertising observers, in the absence of elements that allow expectations of a strong recovery of the economy in 2012, see another negative sign for the year in progress, despite the presence of the big sports events. In particular, it is expected that the first half of the year will suffer considerably from the effects of the current recession, while there could be a certain improvement in the second half of the year.

The latest forecasts for the year oscillate between equal and -5.0%.
According to Nielsen, the macrosectors that will suffer most are those of Mass Consumption -4.2% (within which a slightly positive trend could be enjoyed by the Drinks/Alcoholic beverages sector at +1%), Personal Hygiene -2.5%, and Services and Activities -1.3%, while a certain stability is forecast for Durable Goods +0.6% (thanks especially to Cars and Homes) and for Leisure Time +0.5%.

As regards the media however, the forecast looks like this: Television -1.3% (including digital), Radio -7.4%, Internet +12.0% (excluding search), Cinema - 14%, Periodicals -3.8%, pay daily press -4%, Outdoor -2.3%. (Source: Nielsen December 2011).

The early part of 2012 confirmed the tendency by big companies to reduce investments in order to cope with the economic-financial situation and stagnant consumption.
Sipra’s commercial policy in the first part of the year continues to be based on:
• defending the value of advertising on the general-interest channels;
• developing the Specialised TV offering also in relation to medium/small customers, consistently making the most of the profile and positioning in the ranking;
• proposing a pluri-media offering;
• developing new customers, also via specific pluri-media projects.
The presidium of the territory, particularly in this recessive phase, takes on a decisive role in the competition between concession holders.

The Tv signal broadcasting digitalisation process will be completed in 2012 and the offering, which is currently in a state of constant upheaval, will start to settle, both in terms of acquisition by nontelevision concession holders of existing TV channels and in terms of the birth of new channels.

General-interest television finds itself having to operate in a much more complex competitive setting than in the past, due to the increase in the number of competitors and because it has to cope with a better profiled offering at more accessible costs, especially on the commercial targets (this complexity could be accentuated by the decisions regarding TV frequencies still to be assigned).

Also, in 2012 the crowding limit for pay broadcasters will be reduced from 14% to 12%.

On the radio front, following the entry into liquidation of Audiradio, a technical table coordinated by AGCOM was set up and, by the end of April, it will have to draw up a project for monitoring radio audiences that takes into consideration resolution No. 320/11/CSP. It is highly likely that this project will be unable to monitor and release data before 2013. To fill the gap in information, some research institutes are planning to independently monitor the data, then sell it to broadcasters and concession holders.

Some operators in the sector think that 2012 could be the year in which advertising on mobile and tablet will grow considerably and television campaigns will be increasingly accompanied by videos on the Internet (Audiweb will release the audience figures during the year).

As regards Cinema, an increasingly competitive market is expected due to the arrival of two new film concession holders, International Cinemamedia UCI and Visibilia, which take over the advertising management of the complexes of greatest prestige and number of presences, following the entry into liquidation of the concession holder OPUS.