Tag Archive: distribution

1. Media audits: the big four or specialists?

   July 11, 2018 13:03 Comments Off on Media audits: the big four or specialists?

   In an increasingly complex media landscape, media audits are becoming ever more important; should advertisers choose one of the ‘big four’ firms or a smaller media specialist to carry out their audits?

   The media audit – understanding efficiency and transparency in media activity

   In an increasingly digital and competitive world, where brands are concerned about transparency and about the effectiveness of every single dollar invested in advertising, the media audit is a very important tool in the CMO’s toolbox. Not only does it help advertisers to ensure that their agency partner(s) are delivering on their marketing and business objectives in the most efficient and transparent way possible, but it also enables them to identify errors and troubleshoot effectively: particularly crucial in an age of automated buying.

   Choosing a media auditor

   Once an advertiser has decided that they are going to carry out a media audit with their media agency partner or partners and established the KPIs of the audit, the next step is to select the auditor themselves. The options here are not myriad – this is not a huge industry – but they can be more or less divided into two camps – big generalists, or smaller specialists. The former, comprising the ‘big four’ audit firms – KPMG, EY, PwC and Deloitte – carry out audits across many industries for blue chip clients across the world, and are often chosen by clients for their undoubted auditing and accountancy experience, or because they have successfully audited another part of the company. The other camp comprises the smaller specialists, among whom we at ECI count ourselves. While these specialists do not boast the vast scale of the Big Four, there is huge value in having media specialists audit media activity.

   The big four versus the specialists

   In 2016, Sir Martin Sorrell urged advertisers to choose one of the Big Four to carry out their media audit, largely because they are chartered accountancy firms and are therefore subject to regulation. Sorrell said that he was concerned about giving specialist media auditors access to his group’s privileged information, given that they ‘lack professional rules and regulations’. This is a view

   commonly held by media agencies, an unkind interpretation of which is that they are nervous of having their activity audited by media specialists – some of whom may have even worked agency-side and know which stones to turn. In any case, we are convinced that, in an industry renowned for complexity that increases by the day, it can only be to an advertiser’s advantage to have experienced media practitioners examining and analysing agency practices – because they do indeed know what they are looking for.

   Impartiality issues

   In the wider business world, the big four are having to answer big questions about their work, having been involved in the auditing of failing or failed businesses such as Carillion in the UK, which went into liquidation earlier this year. Their impartiality has also on many occasions been called into question; PwC and Deloitte’s creative offerings (PwC Digital Services and Deloitte Digital respectively) are among the largest creative agencies in the world, putting them directly into competition with the holding companies that own the very agencies they are being hired to audit. Meanwhile, Accenture – not one of the Big Four but similar in offering and scale – has recently launched its programmatic offering, negating, in our view, impartiality for its audit function: this is indicative of a wider industry trend.

   In the end, the choice is of course up to the advertiser themselves, who should make their decision based on their specific needs and preferences. The key is to ensure you study the media agency contract carefully and agree on the scope of the audit with both the agency and the chosen auditor. Ultimately, it is about ensuring that every media dollar is used as effectively and efficiently as possible in order to drive higher media value.

   Thumbnail image: chase4concept/Shutterstock.com

2. The Digital World Cup

   June 26, 2018 00:20 Comments Off on The Digital World Cup

   There are few events that unite audiences like the FIFA World Cup. The passion, excitement and anguish evoked by the beautiful game crescendos for one month every four years, and this year fans from Poland to Peru and Saudi Arabia to Senegal have turned their attention to Russia, pinning their hopes on their national team and praying that this will be their year: the fans of all but one country will have those dreams dashed. Even Americans, whose national team failed to qualify and who are traditionally less interested in soccer, are still gripped by the drama that unfolds daily.

   Sports audiences are turning their attention towards digital channels

   Of course, such focus and emotion makes the World Cup fertile ground for brands who are looking to coherently engage a global audience. Once, TV was the obvious choice of channel for these brands, who would plough millions upon millions of dollars into sponsorship, premium TV spots and experiential activity. However, the increased adoption of digital and social media in recent years has forced advertisers to take a step back and consider how to best to reach those who have migrated away from TV: while 62% of the 3.2bn-strong audience still plan to watch the games on TV, 30% will stream them online – a figure that increases in developing countries and likely in countries with a dramatic time difference to Russia. Over half of the TV viewers will use social media while they are watching. Some had feared that the all-important millennials were drifting away from sport in general but, as this McKinsey study found, they are in fact simply fragmenting their viewing habits, streaming games and using social media to check highlights, scores and news. This is backed up by a Google study which shows that there has been a 90% increase in searches for highlights videos in the last year. This is compounded by the fact that many social platforms are becoming increasingly video-heavy – see Instagram’s recent announcement that it will allow users to post videos of up to 60 minutes.

   TV is losing broadcasting rights as well as audiences to tech giants

   All this is happening against a backdrop of an equally seismic shift in the live sports landscape: the buying up of broadcast rights for sporting events by non-traditional entities such as telco companies and even tech giants such as Amazon, is having a profound effect on traditional broadcasters and, by extension, on advertisers. Not only do the broadcasters lose viewership during the sporting events, but also afterwards as they lose the opportunity to market for future programming to the large sporting audience: smaller viewership means fewer eyeballs on ads. At the same time, the new players like Amazon finance the purchase of their rights through means other than ads, for example subscription fees, thereby removing a huge message distribution opportunity for advertisers. This means that the pricing of what remains increases, particularly around high-value programming.

    

   So, what does this all mean for marketers who might previously have relied on international sporting events like the World Cup and the Olympic Games to reach the often elusive younger male audience, as well as the others who only engage with sport every few years?

   Advertisers must respond by adapting and innovating

   The answer is, as so often, to follow the consumer and to innovate. It goes without saying that advertisers need to look at allocating a large proportion of their budget to digital channels; however, they should also be looking for ways to enhance the enjoyment of the event for consumers and give them what they want by creating exciting new products for added value. We know that millennials have short attention spans thanks to the huge range of options available to them, so products such as fun contests, easily shareable gossip and opinions and ‘whip-around’ highlights could be great ways to engage with them and hold their attention.

   Sporting influencers are a huge opportunity

   Sport by its very nature creates influencers with huge followings: Portugal’s Cristiano Ronaldo drove 570m social engagements between January and May this year, while Neymar drove nearly 300m (both figures from Nielsen). Savvy brands are capitalising on these figures: McDonald’s in Brazil incorporated Neymar and his Twitter activity into their #prepara World Cup campaign, while Vodafone has not only featured Egyptian Mohamed Salah in their World Cup activity, but harnessed his social following as well. Visa’s global campaign features six influencers, most notably Sweden’s Zlatan Ibrahimović and makes the most of his innate charm and popularity.

   TV is still important – but it no longer monopolises audiences

   TV is by no means dead and still commands the lion’s share of audiences for live sporting events, including for major ones such as the World Cup and the Olympics. However, advertisers need to be mindful that the trend of audience migration to more digital viewing behaviour shows no sign of abating, and should respond accordingly.

   Thumbnail image: Pasko Maksim/Shutterstock.com

3. AT&T, Time Warner and the battle for the future of entertainment

   June 16, 2018 17:22 Comments Off on AT&T, Time Warner and the battle for the future of entertainment

   The court approval of US telco giant AT&T’s acquisition of Time Warner will have huge ramifications for the media and entertainment sector; in fact, it already is...

   AT&T finalises acquisition of Time Warner

   The entertainment, media and technology worlds watched with bated breath this week as a US court deliberated over whether to allow AT&T’s $85bn takeover of Time Warner this week. On Tuesday, the wait came to an end: a federal judge approved the communication giant’s purchase of the entertainment company with no conditions, and the US government, which had argued that the acquisition would harm consumers, has since stated that it will not seek an injunction to stop the deal.

   AT&T now owns the rights to Time Warner’s vast range of media and entertainment assets, including major sports leagues and film franchises such as Harry Potter and Lord of the Rings. Time Warner’s TV content, now also owned by AT&T, is arguably unrivalled, including as it does Game of Thrones, The Wire, True Detective, The Sopranos and many more. Channels HBO and CNN are included in the deal, as is HBO’s SVoD app which boasts 130 million subscribers who each pay about $15 a month. There’s also Time Warner’s video game assets such as Lego, which bring in $2.5bn a year in revenue.

   Consumer behaviour is driving seismic shifts in content distribution and production

   In short, the AT&T acquisition of Time Warner is one of the biggest and most significant mergers of content producers and distributors ever, and represents a seismic shift for the media and communications industries not only in the US, but across the world. It is the culmination of dramatic changes disrupting the media and technology spaces, driven by changing consumer behaviour. Consumers are increasingly consuming content on mobile devices and over internet connections, so distributors who could previously rely on provision of cable services for revenue are scrambling to adapt; this will only be made more urgent by the advent of 5G. Companies such as YouTube, Amazon and Netflix – the latter now the world’s most valuable media company – are upping the stakes even more; indeed, AT&T argued that they needed to acquire Time Warner so they could remain competitive against these and other SVoD providers.

   Comcast and Disney are in a bidding war for 21st Century Fox

   This dramatic shift in the media industry is the driving force behind a flurry of mergers between content distributors and producers. The trend started with Comcast’s purchase of NBC Universal in 2011 and last week’s announcement about AT&T and Time Warner is expected to accelerate that trend. Indeed, Comcast are once again in the spotlight having announced just days after the AT&T news that they have made an all-cash offer of $65bn for the large portion of 21st Century Fox that

   Rupert Murdoch has put up for sale. That’s a significant increase on the $52.4bn offer that rivals Disney made in December and demonstrates how desirable the Fox assets, which include the film and TV studios, cable networks and a stake in streaming service Hulu, are to distributors. It remains to be seen how Disney will fight back.

   Mergers between distributors and producers will open up opportunities for cross-promotions across different parts of a business, for example the exclusive screening of proprietary content on a distributor’s networks (although this has been explicitly prohibited in past deals), as well as opportunities to increase revenue by licensing shows to other distributors and fleshing out existing pay-TV offerings.

   The meaning of these acquisitions for advertisers

   Of course, such big news in the entertainment sector will inevitably have a profound impact on advertisers. AT&T has for some time been working on an advertising and analytics unit, headed up by ex-Group M North America CEO Brian Lesser, that will create an ‘automated advertising platform that can do for premium video and TV advertising what search and social media companies have done for digital advertising’. AT&T CEO Randall Stephenson has openly stated that his company’s goal is to enable TV advertising to target consumers and households more specifically in order to compete against the likes of Facebook and Google. It’s ambitious, but when you consider that AT&T collects data from its nearly 160 million wireless and 40 million pay-TV subscribers, and will own content from Time Warner networks like HBO, CNN and TNT, it suddenly seems more than feasible – particularly as it will be one of the few US companies that will be able to follow consumers across their TV screens, computers and mobile devices. AT&T’s move into this area (and we imagine Comcast isn’t far behind) is yet another demonstration of the fact that the ability to gather consumer data, analyse it and transform it into value for the consumer – and therefore advertiser revenue – is a huge financial opportunity.

   Once again, we’re seeing the effects of technology on the media and communications industry. The AT&T acquisition of Time Warner and the outcome of the 21st Century Fox bidding war between Comcast and Disney will have a profound impact on the US media scene for years, if not decades – and we expect that similar vertical mergers will become the norm in both the US and across the world. The lines between the media, entertainment, technology and communications industries are becoming increasingly blurred.

   Thumbnail image: Atstock Productions/Shutterstock.com