Operating environment trends

There are several drivers for the major changes presently taking place in the media landscape. Among the key perspectives are consumers’ use of media, advertising reforms, technological development and the increased significance of responsibility.

Consumers

Media plays a central role in daily life in Finland: Finns use a whopping seven and a half hours per day consuming various media. Newspapers represent 32 minutes of this amount, compared to 56 minutes for the Internet. The time spent on Internet use has increased significantly and Finns also spend more time reading newspapers, particularly on weekends.

Real-time social technology and ways of operating have become a social filter of contents between the media and the consumer. Only material that is deemed significant by the user’s social network passes through the filter. Examples of such filters include Facebook and Twitter. On the other hand, social media is also a method of distribution for media content. For instance, the amount of visitors arriving to Iltalehti.fi through Facebook multiplied in 2010.

Media consumption is changing as daily life is becoming more time-constrained and fragmented. There is a growing need for media content in small doses. The advances in mobile technology support this phenomenon. People also seek meaning to idle moments in daily life from quickly accessible media content.

Online shopping is increasingly popular. In the beginning of 2010, 41% of Finns had bought something online within the past three months. Online shopping is becoming more and more commonplace as the range of products and services expands and consumer trust in online retailers grows. The fast pace of modern life also supports the growth in online retail.

The ability to provide experiential and relaxing content has become crucial for media regardless of its other roles. Commercial TV channels continue to play a leading role in the Finnish media landscape, but the online versions of tabloid newspapers have clearly increased their significance the most.

Consumers are making a strong push into becoming content providers alongside professional journalists thanks to digitalisation and the proliferation of user-friendly online publishing tools. The consumer has become an empowered influencer, which presents an opportunity in itself for media companies. The ability to piece together various perspectives into a quality package is now highlighted in the work of a journalist. Equally important is the construction of a media story, which requires dramaturgical skill, and the effective processing of various subjective viewpoints.

Advertisers

The significance of focused advertising and the measuring of results continues to grow. As the number of advertisers and advertising channels increases and target audiences become more fragmented, the attention value of individual adverts decreases. The effective measurement of online advertising creates pressure to improve the measurement of the results of advertising in more traditional media. Media salespeople are increasingly expected to have in-depth expertise of new forms of advertising.

Social media has assumed a major role, not only in the daily life and media consumption of consumers, but also in the advertiser’s toolbox: a recent study suggests that 94% of Finnish advertisers intend to make use of social media in 2011. However, the use of social media in campaigning has yet to assume an established form and best practices are still being sought.

Advertising in the printed newspaper continues to be effective and reaches Finns on a broad front. Even in the younger age groups (12–19), the printed newspaper reaches over 62% of the population. The rate is even higher in older age groups. Newspaper advertising is also holding strong as a media channel that offers a high rate of consumer recall.

Newspaper advertising influences purchase decisions. A newspaper advertisement is perceived as useful rather than intrusive. Newspaper advertising offers a superior rate of influencing purchase decisions compared to other advertising channels.

The role of online advertising will continue to grow as electronic media increases its share of consumers’ time. Online advertising also finds new forms through, for instance, its semantic nature and by taking advantage of the consumer’s own active role in the process. Advertisers are increasingly striving for direct contact with consumers, enabled by the Internet and social media in particular.

Technology

Consumer demand for various electronic reading devices and tablet computers has taken off in Finland with the launch of various devices on the market. It has been estimated that up to 170 different tablet computers may be launched in 2011. From the media’s perspective, this may herald the start of an entirely new era. Forrester Research has estimated that tablet sales may exceed sales of laptop computers in 2012.

The role of moving images in the media continues to grow. The popularity of Internet-based digital video and various online television services is increasing. According to the Finnish Communications Regulatory Authority, two thirds of Finns aged 15–64 watch short video clips online. Among the youngest age groups, YouTube is surpassing Google as the most popular search engine on the web. Another indicator of YouTube’s popularity is the fact that a total of some 17,000 hours worth of new video is uploaded on the site every day. Watching one day’s uploads would thereby take a person about two years.

Corporate responsibility

The public perception of the media industry is becoming increasingly critical. As also shown in Alma Media’s study, the media in criticised for failing to highlight relevant stories, exaggeration in reporting and making careless mistakes under the pressure to be the first to report the news. The media industry needs to respond to this criticism by, for instance, opening up journalistic practices to its audience.

Companies will need to improve their transparency. Calls for transparency increased explosively after the Enron case a decade ago. However, transparency no longer concerns just financial reporting, but also other aspects of business. Corporate responsibility reports are just one way of shedding light on the impacts of business operations.

Diversity and pluralism are growing in importance as trends that the media sector must understand on a broad basis. That means, among other things, the need to recognise a multitude of voices and values. For instance, the voice of immigrants is barely heard in the public dialogue on Finnish immigration policy. At the same time, the emphasis on biodiversity concerns the media sector as well: as sustainable forestry can help preserve biodiversity, environmentally sound paper choices can support sustainable development.

The environmental debate, which has thus far largely revolved around carbon dioxide emissions, is set to evolve into a more comprehensive consideration of ecological impacts. Carbon footprint measurements will be complemented by other indicators of the ecological footprint. Tracking and reporting water consumption is also assuming a more prominent place on the agenda. A media group must be able to respond to these questions as well.

Sources: TNS Atlas Intermedia 2005–2009, TNS Gallup Oy; eMedia 2008 and 2010, Taloustutkimus Oy; Use of information and communication technologies 2010, Statistics Finland; Consumer Insight Space report, 15/30 Research Oy; Finnmedia: Strategies of the Finnish media sector; Advertising barometer, The Association of Finnish Advertisers 2010; VTT Adfeed 2010; KMT Lukija 2009, TNS Gallup Oy; Spontaneous recall of advertising, Kuulas Millward Brown and Itella; Newspaper advertising 2007, Kärkimedia panel; Media and advertising from the present to 2013, VTT; Tekniikkatalous.fi 12.12.2010; Markus Keränen, 15/30 Research Oy 24.11.2010.