A recent study conducted by the Bifröst University examined the attitudes of large advertisers towards RÚV’s presence in the advertising market. The majority of respondents were in favour of RÚV remaining in the ad market.
Majority in favour
The question of whether or not the National Broadcaster (RÚV) should remain in the advertising market has long been a controversial one. In broad strokes, opponents argue that RÚV, being partly funded by government subsidies, enjoys an unfair advantage over private media companies, while proponents maintain that RÚV’s programming would suffer and that a portion of the ad revenue that RÚV would receive would be diverted to foreign advertisers (Google, Facebook, e.g.). Minister of Culture and Business Affairs Lilja Dögg Alfreðsdóttir recently announced that she would not be withdrawing RÚV from the ad market. (A working group was established in April to examine the effect of the withdrawal.)
A recent study conducted by Bifröst University has now shed light on the perspectives of advertisers regarding the potential removal of RÚV from the advertising market. During a seminar held in the House of Business, some significant findings were presented yesterday morning, RÚV reports.
The survey’s authors sent a questionnaire to 111 executives of Icelandic companies and received 56 responses. Out of the respondents, around 30% were from companies with over 200 full-time employees, while 19% represented companies with 100 to 200 employees. The researchers were satisfied with the response rate.
One of the key insights from the study revealed that approximately 36% of advertisers expressed their intentions to either reduce their advertising budget or redirect it outside the country if RÚV was eliminated from the advertising market. The survey also found that a majority of the respondents, about 64%, viewed the removal of RÚV from the advertising market in a negative light.
Following the presentation of the research findings, a panel discussion was held with marketers active in the advertising market.
20% to divert funds to foreign media
Nearly half of the respondents in the survey believe that advertising funds currently allocated by marketers would shift, to some extent, towards other media channels. Over 20% of advertisers stated that they would completely divert their advertising budgets to foreign social media platforms such as YouTube, Facebook, and Instagram.
The study also found that Sjónvarp Símans was identified as the private media company that stood to benefit the most from the removal of RÚV from the advertising market. However, only around 19% of respondents expressed their intention to advertise there. A smaller percentage, specifically 7%, indicated their preference for advertising with Stöð 2, Stöð 2+, and Sýn’s sports channels.
Conversely, the radio segment of the survey revealed a different trend. If RÚV were to be removed from the advertising market, 47.6% of advertisers would shift their focus to Sýn’s radio platform. Bylgjan, Sýn’s most popular radio station, was identified as a favoured prospect.
It is noteworthy that 9.5% of advertisers expressed interest in targeting podcast listeners and considered advertising on that platform. Additionally, 7.1% of respondents stated their intention to advertise with Árvakur’s radio media (Árvakur is the publisher of Morgunblaðið).
Filmed commercials to decrease significantly
The study noted that the film industry would undoubtedly face significant consequences if RÚV were to be removed from the market. Over 30% of respondents indicated that they would either greatly reduce their production of filmed TV commercials or cease production altogether in such a scenario.
The survey conducted by the researchers also aimed to explore other aspects, including the comments made in relation to the bankruptcy of Torg ehf, the company that owned and operated the media outlets Fréttablaðið and Hringbraut. Sigmundur Ernir Rúnarsson, the former editor of Fréttablaðið, argued that RÚV’s dominant market position had played a part in the company’s bankruptcy.
Respondents were asked about their perceptions regarding the impact of RÚV’s presence in the advertising market on the bankruptcy. Around 67% stated that they believed RÚV had little or no influence on Fréttablaðið’s fate. Regarding the TV station Hringbraut, half of the respondents held the belief that RÚV played little or no role in its closure.
Conclusions
As noted by RÚV, the study’s main results indicated the following:
Two out of three respondents were in favour of the status quo, that is, of RÚV remaining in the advertising market.
84% of participants use RÚV to publish TV and radio advertisements.
35% of advertisers said they were likely to transfer their advertising money to other national TV channels if RÚV was taken off the market.
36% of advertisers would either reduce advertising money or divert it to foreign media.
59% of participants believe that the absence of RÚV would have a major impact on their ability to achieve set advertising goals.
63% of advertisers who produce filmed ads think it is likely that they will reduce that production if RÚV were removed from the ad market.
