Tag Archive: media buying

1. Coronavirus has a dramatic effect on media inflation

   May 6, 2020 12:10 Comments Off on Coronavirus has a dramatic effect on media inflation

   In just a few short weeks the Covid-19 pandemic has disrupted the human way of life right across the globe. We have been forced to stay at home and, crucially for the advertising industry, our consumption habits have been transformed quite literally overnight. Many brands have been impacted by reduced spending, forcing them in turn to reduce their own advertising budgets; almost all advertisers have revised their 2020 marketing activity in some way.

   This disruption to global media markets has caused a sharp drop in demand and, as a result, a decrease in pricing for most media types, according to ECI Media Management’s special report on the impact of coronavirus on media inflation, produced by our experts. At a global level, all traditional media types will suffer from deflation of varying severity, while Digital Display and Digital Video – which were looking very robust in our original report released at the beginning of the year – are forecast to be only minimally inflationary in 2020. The story is more varied at a regional level: in North America and EMEA, all media including Digital are deflationary, while in APAC and LATAM some media types are showing more resilience. It seems likely that the fact that these regions are at different stages of the pandemic – APAC is seemingly through the worst, while LATAM looks to be at the start of the curve – is affecting inflation.

   Digital: inflationary overall, but deflationary in key markets

   With advertisers shifting spend out of OOH, demand is high for digital, leading to overall inflation for Digital Video and Digital Display, particularly in APAC which is driving global Digital inflation. However, several major markets such as the US, the UK and France are experiencing deflation in digital channels due to the huge inventory increases combined with decreased demand. The use of programmatic blacklists to block terms associated with coronavirus is reducing the price drop for digital channels, although the trend is causing digital publishers to struggle – the IAB is trying to combat this practice.

   The video streaming platforms should be one of the few sectors to benefit from the coronavirus pandemic, with subscriber and viewing figures up significantly. Those platforms with a revenue model based on advertising should see increased demand from advertisers seeking to benefit from that increased viewership, especially in the US.

   TV: consistently deflationary, except in APAC
   

   TV viewership has perhaps never been higher, with people turning in their droves to TV as a source of information and entertainment. The increased viewership has led to increased supply, particularly as some advertisers have had to pull their spend – and that has led to an overall deflationary trend. This means that there is huge value for those brands who are still active in TV, with much more reach at no extra cost.

   Coronavirus will have a lasting impact

   Coronavirus and the havoc it is wreaking on our economies and our way of life will have a profound and enduring effect on the entire advertising industry. It seems inevitable that, when we do emerge from this crisis, the landscape will have dramatically transformed. Economic uncertainty and a lack of growth will likely see brands continue to exercise caution over their marketing spend: ad spend is likely to decrease, and media inflation will inevitably respond. At ECI Media Management, we will continue to provide forensic analysis and actionable insights so that advertisers are able to successfully navigate this new terrain. Please don’t hesitate to contact us if you would like to discuss your media activity in a post-coronavirus world.

   Read and download the report here.

   Discover our top 10 recommendations for advertisers during the coronavirus pandemic here.

   Image: Cipariss/Shutterstock

2. TV in the time of coronavirus

   April 15, 2020 13:09 Comments Off on TV in the time of coronavirus

   Around a third of the world’s population has had their freedom of movement limited to a lesser or greater extent – these restrictions include recommended or mandatory social distancing, school closures and orders to work from home if at all possible. For the billions of people now spending the vast majority of their time at home, TV has become the primary source of entertainment and connection with the outside world. It is a trusted source of information and distraction, and even acts a social glue: it’s one of few things that we still have in common that isn’t the battle against the covid-19.

   TV is an industry that has seen huge change over the last few years: the pandemic will accelerate that change and, in some cases, even reshape it.

   People are watching more TV than ever

   It’s no surprise that TV viewing figures across the world have increased dramatically over the last few months. In the two-week period to March 29^th, overall usage of TV among viewers aged 18-49 in the US increased by 25% year on year, compared to the same period in 2019. Streaming video on demand (SVOD) services have enjoyed similar gains: Netflix subscriptions are reportedly up 27%, Hulu’s are up 16% and Amazon’s 21% (according to NBC). In the UK, TV viewing grew by 17% year on year in the week commencing March 16^th – and that was a week before lockdown restrictions were implemented. Meanwhile, Statista found that 43% of US adults are now more likely to watch movies from a streaming service, while 40% of adults are more likely to watch TV online.

   Primetime has shifted earlier as viewers turn to TV to alleviate boredom throughout the day. According to Conviva, daytime viewing jumped by nearly 40% in the week of 17^th-23^rd March, versus the week of 3^rd to 9^th March.

   A profound effect on advertisers
   

   Of course, the impact of coronavirus on brands has been profound: many are seeing decreased sales with customers unable to leave the house, and with financial concerns of their own affecting purchasing decisions. With decreased revenue, many advertisers have pulled back some of their advertising spend – American travel advertisers, for example, cut their spend by 50% in the first two weeks of March: that cut is likely to have increased significantly as more travel restrictions have been implemented in late March and in April.

   Advertisers are redirecting linear TV spend

   Sport is an incredibly important advertising opportunity for many brands, reaching as it does many hard-to-reach consumers, including young men. The fact that pretty much all live sports events have been cancelled or postponed for the next few months has left gaping holes in media plans and TV network revenues and has made premium audiences harder to reach. Advertisers are redirecting linear investment, particularly investment which had been targeted at sort, to other inventory controlled by the TV networks including digital inventory, as the latter attempt to make up for lost reach and hang on to ad revenue. However, brands are also increasingly redirecting linear TV spend to the streaming platforms, accelerating a trend that was already worrying the linear TV networks. It’s interesting to note that the streaming networks are unlikely to enjoy the same level of spend by advertiser as the linear TV networks do: ads on streaming platforms can be targeted to specific audience segments, allowing the advertisers to spend less money.

   With increased pressure on their bottom lines, particularly in light of an imminent recession, some brands may be tempted to remove their spend from TV and streaming altogether in favour of Google or Amazon, which are more likely to lead directly to product sales.

   Coronavirus will impact on all players in the TV industry

   The entire TV and streaming industry will be affected, but it’s likely that TV networks will suffer more than the streaming platforms, thanks in part to their reliance on live sport. Although TV viewing figures are up dramatically, this increased supply is being met with lower demand from advertisers, which is causing prices to decrease. Interestingly, when US network NBCUniversal announced that its viewing figures had increased sharply, it also shared that it would be cutting back on some of its advertising inventory in order to improve viewer experience. This is a laudable effort to stop prices plummeting, and is a trend we expect to see across the TV industry as a whole over the next months and years.

   A triple whammy of factors leading to a loss in ad revenue

   The loss of ad revenue will be a key implication of the coronavirus pandemic for the TV industry. The triple whammy of advertisers looking to make savings in their marketing budgets, a lack of live sports and the pause in production of new content leading to holes in programming, the outlook is fairly bleak, particularly for the traditional TV networks. The streaming services may fare better at least in the short term as advertisers shift their budgets to them from the traditional networks, but they will be equally affected by a lack of content down the line.

   The surge in subscriptions may be temporary

   While it seems so far that the lockdown has led to a surge in subscriptions, particularly for the streaming networks as mentioned above, the upward trend isn’t reliable. The coronavirus pandemic has caused huge increases in unemployment across the world: twinned with worries about a global recession, consumers may well be looking for ways to tighten their belts, and they might be willing to forego their streaming subscriptions, particularly when the lockdown is over and financial concerns kick in.

   Sports fans will resubscribe – but to which service?

   Whether or not they are concerned about money, sports fans in the US may also consider cancelling their pay-TV subscriptions while there is no live sport. They are likely to re-subscribe when sport returns, but could be tempted by the flexibility and lower prices of services such as YouTube and Hulu: this will be a true test of the theory that it is live sport that keeps people tethered to traditional TV.

   A lasting impact on traditional TV and the streaming platforms

   The coronavirus pandemic has accelerated and reshaped a transformation that was already happening to the TV and streaming industries. Some of the effects of the virus will undoubtedly be temporary – sport will return and advertisers will pay to reach the people that watch them – other effects, such as the shift towards the streaming platforms, will be more permanent.

   Image: Monkey Business Images/Shutterstock

3. How will the coronavirus pandemic affect the advertising industry?

   April 6, 2020 10:40 Comments Off on How will the coronavirus pandemic affect the advertising industry?

   The alarming spread of coronavirus across the world has transformed society, business, politics and life itself beyond recognition in just a few short weeks. In an attempt to stem the spread of the virus or at least ‘flatten the curve’, governments have implemented measures never seen before. At least a quarter of the world’s population is living in lock down, with severely limited freedom of movement. Consumer behaviour has been forced to change: no longer able to partake in previously quotidian activities such as going to the cinema and out to restaurants, people are turning to media platforms to keep them entertained and informed. This is having an immediate, direct impact on advertisers and indeed the advertising industry as a whole.

   Media consumption has transformed

   With so many people forced to stay at home, the media they consume and how they consume it has undergone a huge transformation The reach of cinema and OOH has declined dramatically; while some thought that radio might follow suit with fewer people driving to work, it has in fact enjoyed a boost. However, podcast downloads have suffered. Of course, TV, digital and social reach has skyrocketed, with their ability to offer entertainment, information and comfort at home.

   The SVOD platforms will be one of the few sectors to benefit
   

   The video streaming platforms will be one of the very few sectors that will benefit from the coronavirus. Data analysts have predicted that Netflix’s year-on-year subscription growth in the US and Canada will reach more than double previous estimates, rising by 3.8% compared to original estimates of 1.6%. Of course, Netflix now has competition. AppleTV+ launched in November and Disney+, having launched in the US and Canada at the end of 2019, expanded into the UK and Ireland last week, and will roll out in other key European markets in this month. NBC Universal’s Peacock and WarnerMedia’s HBO Max will roll out in the next few months. It seems likely that they will all benefit from the world spending the spring, and possibly beyond, on their sofas. This will be exacerbated by the cancellation of sporting events, with advertisers likely to redirect sponsorship dollars away from traditional TV and into the streaming platforms (where advertising is available) to make up for lost reach.

   Conversely, it seems that the timing is not so good for Quibi, the new streaming platform which focuses on short-form video content for consumers on the go. After all, very few people are on the go at the moment, and people at home for weeks on end are more likely to want something longer and more engrossing.

   Reduced consumer activity will hit most sectors hard

   Unfortunately, most organisations are likely to feel a negative impact. Reduced consumer activity and possibly worries about money in the medium term will impact on sectors as diverse as travel, technology and entertainment. Already many major advertisers have reduced or even halted activity altogether, including Airbnb and Coca-Cola, as well as a slew of travel and tourism brands. Those who haven’t cancelled their advertising spend have moved quickly to change their messaging and their creative and geographical strategies. Many brands have chosen to change their messaging to show support for health services and frontline workers, while imagery of human interaction has declined by 27.4% in social ads. We will see more changes as advertisers seek to adapt to the ‘new normal’, and general anxiety and nervousness around advertising in general.

   With people cooking the majority of their own meals at home, one sector that isn’t suffering is food retail. Supermarkets should take advantage of lower costs to ramp up their advertising in a carefully considered and effective manner. Interestingly, however, is the increased tendency to use local retailers, with people doing what they can to shop as close to home as possible. It will be fascinating to observe whether these behaviours last when life returns to ‘normal’.

   The tech giants and media agencies will feel the strain

   It seems counter-intuitive in a time when consumers will spend much more time online, particularly on social media, but tech giants Google and Facebook are also unlikely to be left unscathed by coronavirus. Analysts predict that Google will see a 15% drop in travel ad revenue in Q1 of 2020, and a 20% drop in Q2. Meanwhile, 30-45% of Facebook’s ad revenue comes from the travel, retail, CPG and entertainment industries, all of which are likely to spend less on advertising in the coming months. It’s not all bad though: it seems likely that many advertisers will seek to move much of their offline spend – particularly from OOH and cinema – into digital.

   Media agencies are likely feeling the strain and this will only become more apparent, not only because of reduced ad spend, but because it’s likely that brands will start to bring services and capabilities in-house as part of their cost-saving efforts.

   What does all this mean for the cost of advertising?

   Back in what feels like another era – the beginning of February – we at ECI Media Management released our annual Inflation Report, providing our forecasts for media inflation in 2020. We noted that coronavirus could affect global travel and local consumption, but no one could have anticipated the epoch-defining effect the virus would have on our modern way of life. And that means, of course, that media pricing will change dramatically in 2020.

   We expect to see hugely increased screen time – likely a double-digit increase, and even higher for news, health and learning websites. As the amount of inventory expands and advertisers limit their spending thanks to pressures on their business, we should expect prices to drop significantly: publishers are already feeling the strain, particularly as brands blacklist many of the terms associated with coronavirus.

   An opportunity for contextual marketing

   With prices dropping and a huge increase in digital reach, there is an opportunity to create highly cost-efficient brand building campaigns. Many brands and third-party ad tech firms have blacklisted keywords relating to coronavirus and covid-19 in order to maintain brand safety; budget previously earmarked for this activity could be pivoted to contextual marketing, which we believe will become a powerful tool in the marketer’s toolbox with the death of the cookie.

   Agility is the key to navigating this crisis

   2020 has swiftly and unexpectedly turned into a year of dramatic change for absolutely everyone, from individual people to entire industries and economies. As we all attempt to navigate these changes from our home offices, one thing is clear: we must remain informed and ready to respond to rapidly changing circumstances. Agility, as is so often the case, will be crucial.

   ECI Media Management has produced a list of ten steps that advertisers can take to mitigate the effect of the pandemic on their media performance – you can find it here. Please don’t hesitate to contact us on value@ecimm.com if there is anything you would like to discuss concerning your media activity.

   Image: SFIO CRACHO/Shutterstock

4. Will the demise of the cookie lead to better brand building opportunities online?

   March 3, 2020 11:55 Comments Off on Will the demise of the cookie lead to better brand building opportunities online?

   By Victoria Potter, US Business Director at ECI Media Management

   Google announced in January that it would be phasing out the cookie in its Chrome browser over the next two years. Apple’s Safari and Firefox have already killed off the cookie in their browsers, but Chrome is by far the most popular browser in the world with 64.1% of global market share in January 2020, so Google’s decision will lead to a major industry shift.

   A pivotal year for digital advertising

   2020, then, is a pivotal year for digital advertising. But exactly how it will change is as yet unclear: how will tech companies, agencies and advertisers react? Will the digital landscape change dramatically or imperceptibly? Will that change be positive or negative?

   An opportunity to refocus on brand building
   

   For a very long time, advertisers have been able to follow consumers from page to page across the internet, understanding their consumption patterns and using that insight for targeting. Focus has turned away from more difficult to measure brand building activity. It’s always easier to value what you can measure over what you can’t. But now that the cookie is on its way out, advertisers and agencies will need to re-evaluate what they use digital advertising for. Could brand building, traditionally the realm of TV and OOH, be one of its new uses?

   Harnessing digital to build relationships with consumers

   Before the advent of the cookie in particular, and digital advertising in general, building brands was always at the heart of advertising: trusted brands are fundamentally important in helping consumers make choices. In this new era of digital advertising, can we harness its strengths to make this the new way to build relationships with consumers and earn their trust, rather than just trying to push them to click and buy? This will be particularly important for brands who do not have access to high-quality first-party data, for example FMCG companies.

   Context-based media buying will become a key tool

   A key tool will be context-based media buying, with advertisers seeking out environments where their broader target audiences congregate. Ben Plomion of tech company GumGum advises that marketers should “use the insights they generate from their current cookie data to inform their future contextual strategies”. Technological advances and the growth of AI are making contextual advertising an increasingly powerful tool: they can be used to understand web page sentiment, understand linguistic nuances, verify the content and tone of images and video, and automatically configure ad creative so that it complements the context.

   Premium publishers are able to offer brands superior contextual advertising opportunities thanks to their high-quality inventory and relatively low ad loads, creating a better experience for the user. This means they can help advertisers obtain meaningful reach and build trust and connection – all valuable assets for a brand building campaign.

   Plan to build relationships with humans, not to reach consumers

   At the heart of these approaches is planning with humans – not ‘consumers’ – in mind. Without the targeting and measuring abilities associated with cookies, refocusing on enriching people’s lives through advertising will become critical for success – and that is why we believe the demise of the cookie should, on balance, be a good thing for advertisers.

   Walled gardens could increase the dominance of the tech giants

   There are some pitfalls to look out for. Of course, Google and Facebook’s walled gardens will be largely unaffected by the decline of the cookie (indeed, some believe that Google decided to kill the cookie so that it wouldn’t have to share its data with anyone else). Advertisers will still be able to leverage the first-party cookie within these walled gardens, which will further strengthen the tech giants’ position and even allow them to raise their prices, if advertisers don’t push for content strategies to find their target groups in the digital space.

   In the face of Google and Facebook’s strengthened position, publishers might be tempted to increase ad loads in order to avoid declining revenues; with advertisers struggling to drop their reliance on last click performance metrics, this could lead to an increase in irrelevant ads, which would in turn lead to a rise in ad blocking.

   It’s time to revisit priorities and foster deeper connections

   The decline of the cookie is a seminal moment in the history of online advertising. While it could undoubtedly spell trouble for those unwilling or unable to adapt, in our view advertisers should see it as an opportunity to reappraise and revisit priorities, and to create brand-building campaigns that foster deeper connections with human beings for greater trust.

   What’s your opinion?

   We would love to hear from brands, agencies and tech firms about how they envisage a cookie-less future. What do you think will happen? Do you think the decline of the cookie will usher in a golden era of advertising, or is your forecast less optimistic? Comment on our LinkedIn post, or email us at value@ecimm.com.

   Image: Kim Reinick/Shutterstock

5. ECI Media Management Inflation Report 2020: what’s driving TV inflation?

   February 20, 2020 18:40 Comments Off on ECI Media Management Inflation Report 2020: what’s driving TV inflation?

   Understanding media inflation is crucial for advertisers

   Advertising is an investment: an investment that organisations make into their future success, to grow their business and secure their future. And those organisations, just like any other investor, must have a thorough understanding of how the market – and their investments – will fluctuate, in order to understand the eventual value delivered.

   ECI Media Management’s Inflation Report offers analysis and context on media inflation

   That’s why we at ECI Media Management we release our annual Inflation Report in Q1 every year, with an update in Q3. Our experts analyse data drawn from our global network of offices, cross-referencing it with industry sources in order to make the most accurate forecasts possible. We provide media inflation predictions for seven media channels – TV, Digital Display, Digital Video, Newspapers, Magazines, OOH and Radio, at a global and regional level as well as for 61 countries across North America, Latin America, Europe, Africa, the Middle East, Asia and Oceania. As media inflation is intrinsically linked to global economies and events, and developing technologies, our reports provide the context that is so critical for brands making important advertising decisions.

   The key finding for 2020: TV and Digital Video inflation set to peak
   

   Our 2020 inflation report, released earlier this month, revealed the key finding that, while global media inflation in 2020 will remain largely consistent with 2019 figures, video media will experience a significant increase in inflation this year. TV will reach 7.1% and Digital Video will increase to 6.7%.

   Political and sporting drama, and audience fragmentation are behind the rise in TV inflation

   What’s behind this increased inflation? Given the technological and media context, it doesn’t really come as a surprise. Of course, 2020 is set to be a year of sporting and political drama, with the Olympics, the UEFA European Championships and the US presidential election, to name just a few key events taking place at the start of the new decade. Major events of this nature always inflate TV pricing but, more fundamentally, audiences are fragmenting and ad dollars are following tend to consumer eyeballs to digital video, particularly the growing amount of premium content that digital vendors are producing. As a result, TV vendors have fewer viewers, but increase their prices to maintain advertising revenues.

   Is this digital advertising’s moment?

   Despite rising costs, TV remains the best way to deliver mass, quality audiences. Digital inventory is of course plentiful, but it is of varying quality and is susceptible to ad blocking and data privacy laws. The decline of the cookie will exacerbate advertisers’ difficulties with digital advertising, forcing them to rethink how they reach audiences with relevant advertising. We believe that in the medium term this could herald a golden era for digital advertising, with a focus on high quality opportunities such as contextual marketing. In the meantime, TV offers advertisers a brand safe, brand appropriate way to reach quality audiences, build their brands and, with the advent of addressability technology such as Sky’s AdSmart, target specific audiences.

   Actionable insights to navigate the complex media landscape and maximise effectiveness

   It’s imperative that today’s advertisers take advantage of and respond to the changing media and global landscape in order to drive the highest possible value from their investments. In a context of rising media prices, we at ECI Media Management empower our clients to make the right investments by providing forensic analysis of their media activity, and actionable insights so they can successfully navigate the complex digital market and maximise TV effectiveness. The ultimate goal is to drive higher media value, and media-led impact on business performance.

   You can read the ECI Media Management Inflation 2020 report here.

   Contact us if you would like to discuss anything you learn in the report: value@ecimm.com

6. Why the decline of the online tracking ecosystem could be the start of a golden age for digital advertising

   December 18, 2019 12:23 Comments Off on Why the decline of the online tracking ecosystem could be the start of a golden age for digital advertising

   Advertising without digital is like transport without engines. Yes it’s possible and yes there is something quite charming about it, but it’s old-fashioned and less efficient: once you’ve tasted modernity, you can’t go back. Digital advertising has brought us capabilities beyond the 20^th century marketer’s dreams: individual targeting based on behaviour and preferences, as well as cross-device tracking, programmatic buying and real-time optimisation.

   Much of that was made possible by the humble cookie, but after 25 years its very existence is under threat. Indeed, tracking online activity is a house of cards that has been slowly but steadily collapsing over the last few years thanks to ad blocking, browsers blocking cookies, the rise of walled gardens and cookie-free environments such as apps, connected TVs and the Facebook stack, and privacy regulations. But what does that mean for advertising? In truth, no one really knows. Should marketers be quaking in their boots? Will programmatic die along with the cookie? Is the cookie even dying? In all the uncertainty, we can be sure of one thing: digital advertising will change and the successful marketer will be the one who adapts.

   Look beyond the cookie for reach, frequency and frequency capping
   

   Cookies can still be used to track and control reach and frequency in Google’s Chrome browser, which still has a majority market share in many countries, although its key competitors – notably Firefox and Apple’s Safari – have smart cookie-blocking technologies activated by default. This means that all browsers except Chrome are a black hole for measuring reach and frequency based on cookie data. Furthermore, Google is moving towards an opt-in version of cookie blocking, making the future of cookie-based tracking precarious.

   One solution for ensuring that reach, frequency and frequency capping are still tracked effectively is the use of audience verification services, for example Nielsen DAR and ComScore vCE. These services validate delivery, reach and frequency for real human audiences with much less reliance on cookies. However, very few advertisers outside the US invest in these products – we expect this to change as the cookie continues to decline.

   A return to contextual marketing

   Targeting is another area that will be dramatically affected by the change in the tracking landscape – and nowhere is this truer than in programmatic buying. Much of what we recognise as programmatic buying relies on the cookie and is therefore likely to decline. That doesn’t however mean that DSPs will become useless: marketers will still be able to efficiently handle direct, high-quality publisher deals, as well as buy lower cost, mixed quality data-free inventory across select sites on the open web.

   While the ability to target individuals on the open web is likely to decrease with the collapse of the tracking house of cards, contextual targeting is set to explode. Contextual targeting is based on the content the user is looking at, rather than their behaviour profile, meaning that ads are more likely to be relevant to their current activity. It puts an emphasis on the placement of the ad, so is similar in that respect to traditional print advertising – the focus is on producing and distributing relevant content. This approach allows advertisers to deliver marketing messages to consumers when they are in a specific situation or frame of mind; as consumer behaviour becomes more fragmented and unpredictable, taking the guesswork out of advertising can only be a win.

   Contextual targeting is not just an answer to the demise of the cookie: it is also an antidote to many of the issues around brand risk and safety, and is a way to be less dependent on the personal data that is so heavily regulated by GDPR and CCPA.

   Is this digital advertising’s moment?

   While the collapse of the digital advertising house of cards may seem catastrophic to brands who have relied on precise targeting in their advertising strategies, in reality it opens as many doors as it closes. Indeed, with consumers now spending more time in apps than in longtail websites, making programmatic audience-targeting even more challenging, many marketers will already be exploring ways to bypass programmatic altogether. The resultant high quality, content-focused advertising is pushing out and replacing click-bait strategies. Perhaps the decline in the online tracking ecosystem will herald a golden age for digital advertising because, ironically, the shift away from targeting individuals will lead to a better user experience.

   Image: Shutterstock

7. The streaming revolution: should marketers be worried about ad-free streaming?

   December 4, 2019 17:26 Comments Off on The streaming revolution: should marketers be worried about ad-free streaming?

   The New York Times recently observed that Hollywood experiences a seismic shift every three decades or so. In the 1920s it was the shift from silent films to ones with sound, while in the 1950s it was the rise of broadcast television and the 1980s saw the cable boom.

   As we draw to the end of the 2010s, a new seismic shift is rapidly increasing its pace. The streaming revolution is upon us, and the big three of the entertainment industry – Disney, Warner Media and NBC Universal – have either recently launched their streaming services, or will do soon. On the whole this is great news for consumers, particularly wealthier ones, who have a huge amount of high-quality content and their fingertips, although it comes at a cost, of course. It is, however, less welcome for the traditional broadcasters and cable channels, who are seeing their viewer numbers decrease at an alarming rate. In the US there was a 5.4% decrease in cable subscribers in Q2 of this year.

   TV has for at least 70 years been at the heart of the advertising strategies of advertisers big and small around the world: where does this latest shift leave them? And should they be worried?

   Better content, more choice, no ads
   

   The modern consumer has more choice and control than at any other time in history, and they are more connected than ever: 50% of the US and UK populations have a connected TV, and that figure is expected to continue growing. These consumers are increasingly choosing to consume video content from the new streaming services over the more traditional broadcast channels. Why? There are two key reasons: the quality of the content available, and the fact that the majority of them are ad-free, so they can watch their favourite shows without interruption. A huge 60% of adults in the US were subscribed to a streaming service in 2019, while in 2018 Netflix use alone surpassed cable and satellite TV for the first time. With the glut of new streaming services – mostly ad-free – launching at the end of this year and the beginning of next, those figures will only increase.

   If it affects consumers, it affects advertisers

   As consumers leave traditional TV in their droves, advertisers are having to work out rapidly what it all means for them. Of course, if consumers are flocking to ad-free services, that makes reaching them much more difficult. This is particularly the case for wealthier consumers – a key target audience thanks to their buying power – who are more able to pay to rid their viewing experience of ads. The high-quality ad spots that do continue to reach large numbers of consumers – think live sport and of-the-moment experiences such as the Oscars – will increase in cost dramatically. Indeed, many TV media owners will be rethinking their inventory strategy and may well have fewer, higher impact ad spots for which advertisers pay a premium. This is also more likely to be acceptable for viewers as it will likely mean shorter ad spots with higher quality advertising.

   Advertisers must to an extent accept some of the responsibility for the migration to the ad-free services. Consumers are fleeing ads because they are all too often repetitive, irrelevant and uninteresting. If advertisers can transform their strategies and the quality of their advertising and targeting, consumers will be far more forgiving of an interruption of the programme they are watching.

   Technology will help: many traditional TV broadcasters are embracing technology in order to allow them to shift to programmatic, highly targeted buying, for example Sky’s AdSmart addressable offering which has rolled out across multiple markets over recent months. This will help increase relevance but, as we explore in this article, it’s not necessarily the answer for brands seeking mass reach – TV’s traditional USP.

   It all comes down to targeting

   Amid all the talk about the streaming revolution, there are many saying that it’s not over for TV. There are undoubtedly still many people watching scheduled TV; particularly for non-US audiences, local broadcasters have expertise in creating culturally and contextually relevant content that the mainly American streaming services aren’t yet doing. There is also the paradox of choice – with endless options available to them on the streaming services, there is evidence that many feel overwhelmed and gravitate back to traditional TV when they don’t know what to watch. And of course live events such as sporting fixtures will always attract viewers – although whether they remain on traditional broadcast TV remains to be seen.

   However, whether people are still watching scheduled TV or not misses the point. Effective advertising is all about targeting, and if a large proportion of your target audience is absent from a channel, targeting becomes far more complex. This is especially true as the future of the cookie looks increasingly uncertain: indeed, Google may follow the lead of other browsers and further restrict the use of third-party cookies on Chrome.

   The answer for marketers is, of course, to rethink, to innovate. Where do the new opportunities lie? Are there other channels and strategies that will deliver on your objectives, or will you need to increase your TV budget to secure those high-impact, high-quality spots? Creating, implementing and learning from a great media strategy will become ever more crucial as marketers strive to understand what works, and why.

   Image: Shutterstock

8. Facebook: the changing fortunes of a tech titan

   November 27, 2019 11:47 Comments Off on Facebook: the changing fortunes of a tech titan

   It is not so long ago that Facebook’s halo shone brightly. It was apparently created with the most laudable principles in mind: to connect people and to create communities around issues that people care about. For advertisers, it provided the holy grail of being able to create highly targeted ads and deliver them to the right user at the right time.

   But then it all went wrong. The company has been buffeted by a series of major privacy and security scandals on a seemingly almost monthly basis. Its reputation has plummeted in inverse proportion to the number of negative headlines it has received. Is this the beginning of the end for Facebook? And is it still a brand safe platform for advertisers?

   What’s gone wrong for Facebook?
   

   What hasn’t? The real troubles started in 2016, when Facebook faced accusations that it had allowed external forces to interfere in the UK’s Brexit referendum and the US presidential election, as well as allowing the spread of misinformation. Then, of course, came the Cambridge Analytica scandal where a whistle blower claimed that the data analytics firm working with Donald Trump’s election campaign had been given access to the personal information of up to 50 million individuals in order to target them with personalised political ads.

   That saw the opening of the floodgates: in the last 18 months there have been multiple scandals, including claims of sensitive data being given or offered to third parties such as Spotify, Netflix and a Russian email service linked to a close associate of Vladimir Putin; the spreading of fake news; the enabling gender and racial discrimination in job and housing ads; the hacking of 30 million accounts; the inflation of video view metrics; and a smear campaign to silence or discredit prominent Facebook critics. Most recently it emerged that Facebook is still leaking data to third parties, and last week it was in trouble for refusing to follow rival Twitter’s lead and limit or ban political ads.

   A sharp decline in corporate reputation

   This scandals and controversies have had severe reputational ramifications for Facebook. It now has an exceptionally low reputational score in the Reputation Institute’s US RepTrak ranking, below even a cigarette company. This, according to the Reputation Institute, is because of Facebook’s response to these crises, rather than just the crises themselves: Mark Zuckerberg and his leadership team have always focused on trying to protect their image, rather than their reputation.

   Is Facebook still a good option for advertisers?

   Of course, many of these issues are rooted in the fact that Facebook makes the lion’s share of its revenue from its advertising business: last year, 98% of their global revenue was generated from advertising. User data is at the heart of the product it offers advertisers. But will their problems have any impact on marketers? There are queries around a decrease in the number of active users, as well as in the quality, effectiveness and reliability of consumer data – and, of course, whether continuing to use Facebook’s advertising products insinuates that you are ok with their behaviour. However, it would be safe to assume that the many people who still use Facebook – and their number is in fact increasing – aren’t unduly bothered by the scandals that the platform has faced. Furthermore, while Facebook is taking steps to improve privacy and security, they will always ensure that their product offering – their core income – stays useful and relevant to advertisers. Marketers should focus on ensuring that their advertising stays relevant, diverse and emphasises the brand’s commitment to data security and privacy. It is also worth thinking deeply about what targeted advertising contributes to your marketing strategy: are you actually accessing new customers, or just those who would already buy your products?

   Thanks to Facebook’s reliance on advertising revenue, advertisers are in a position of great power. They could use this to great effect: by teaming up with agencies and advertising bodies they could make it clear to advertising platforms such as Facebook exactly what they expect in terms of privacy and data usage. In the face of such a unity of strength, could they refuse to comply?

   How can Facebook win back the trust of its advertisers and users?

   As for Facebook themselves, they must continue to focus on the issues of trust that currently surround its brand: it must be honest and transparent with both users and advertisers, and identify effective ways to eliminate the preponderance of fake news that still litters its platform.

   Facebook has undeniably played a key role in the targeted advertising revolution, but to maintain its status it has a lot of soul-searching to do.

   Image: Shutterstock

9. What does TV fragmentation mean for US marketers?

   November 15, 2019 14:23 Comments Off on What does TV fragmentation mean for US marketers?

   ECI Media Management’s US Business Director, Victoria Potter, looks at the changing TV landscape and explores the ramifications.
   

   This week, eMarketer released an article stating that this year, there will be about a 3% decline in TV ad spend from 2018, and that trend shows no signs of slowing. By 2022, eMarketer is predicting that TV ad spend will drop below 25% of total us ad spending. Of particular interest is that, the typical “political year” bump that has been prevalent in previous years will not be as great in 2020, only accounting for about a 1% increase, followed by steady 1% decreases in the following years. Contributing to this decline is steady growth in cord cutters and ratings decline.

   Nielsen is showing steadily declining ratings over the past few years. In the desirable Prime daypart, C3 ratings have seen a 33% decrease from 2016 to present.  While ratings are declining, networks continue to show increases in pricing – with Nielsen reporting a 7% increase in spend during the same period. And, coming out of the latest Upfront, networks were seeing low-double digit increases, despite lower audiences.

   What does this mean for marketers? Linear TV still provides efficient reach build. However, the days of one-size-fits-all tentpole events are over, and not coming back. It is important to adjust the media mix to account for audience erosion and fragmentation.

   Connected TV increases
   

   Meanwhile, as we see Linear TV spend decreasing, another eMarketer report out this week predicts Connected TV spend will reach around $7 billion, a 38% increase vs. 2018, and projected spend of over $14 billion by 2023. Connected TV is defined as TVs, smart TVs and TVs hooked up to the internet via a set top box, game console or similar device.

   A reminder: the day is still 24 hours long

   The amount of new content available is staggering: Hollywood Reporter stated in June that 2019 was on track to top the 2018 year-long high of 495 scripted series. To add to the proliferation of streaming services already available (Netflix, Amazon, Hulu), this month sees the launch of Amazon TV Plus and Disney+, the latest, but not last, entries into the streaming world, with PeacockTV (Comcast/NBCU), and WarnerMedia (HBOMax) to follow next year. However, the day is still only 24 hours long, meaning that all the new content is vying for the same attention, creating more fragmentation. It leaves many asking – what will the new TV ecosystem look like? Subscription services are currently ad-free, but there’s a big question on how much of an appetite consumers have to create their own “bundles” with so many standalone options. While cord-cutting was once thought of as a money saver, it is now a trade-off between the channels in the cable bundle vs. a personally curated streaming bundle.

   How do we measure it all?

   With the myriad options available to advertisers and consumers alike, the question becomes – how do I evaluate my reach across platforms? Many companies are proposing their solutions, most recently Roku and Innovid, which launched a combined solution currently being tested by several Innovid and Roku clients.

   It can be difficult to navigate the changing video landscape – to determine the right balance between scale and targetability. Here is some advice from ECI Media Management’s experts:

   • Establish clear Reach and Frequency goals, and put in place a standard for measurement
   • Be clear about target(s) and ensure your agency is prioritizing goals when putting together plans; keep fragmentation in mind and make sure your media mix is broad enough to adequately reach the audience, building reach and not just frequency.
   • Ensure you account for transparency within your agency agreement, as more media dollars are allocated to principal agreements.
     • Most of these principal-based buying situations are done as a service to clients, offering flexibility. However, a lack of transparency requires a great deal of trust, as clients do not fully know where, or even when, their ads are running.

   Image: Shutterstock

10. Is Snap really a threat to the Google-Facebook duopoly?

    November 13, 2019 10:15 Comments Off on Is Snap really a threat to the Google-Facebook duopoly?

    A few weeks ago we wrote about how Amazon poses a serious threat to Google’s search dominance. But Amazon is just one of a few companies snapping at the heels of the Google-Facebook duopoly that has for so long dominated digital advertising. Third quarter results, released in the last few weeks, revealed that the ad businesses of Amazon, Pinterest and Snap all grew more rapidly than that of the industry giants in Q3. Amazon is the biggest disruptor in terms of size, but it’s Snap – owners of Snapchat – that is enjoying the fastest growth.

    Snap’s growth is remarkable
    

    The latest round of quarterly results were not a resounding success for Facebook or Google. While Facebook’s results were better than expected, it recorded its third consecutive quarter of sub-30% expansion; meanwhile, Google’s growth is languishing below 20%, at 17.1%.

    Things were much brighter for Snap: its ad business grew 50% year on year in Q3, and its stock price surged by over 175% this year as advertisers increasingly look to the platform to provide a return on their investment. Why?

    What is behind Snap’s success?

    Snap’s CEO, Evan Spiegel, has credited two major changes at the company for their success. The first is an initially poorly received redesign which Spiegel says boosted time spent watching premium content by 40%, thereby increasing ad revenue; the second is their adoption of a self-serve ad platform over the last two years, which has made it easier for brands to buy ads on the platform and expanded Snap’s ability to sell ads.

    Those ads are increasingly popular as Snap is good at leveraging its hard-to-reach audience and building innovative, intuitive ad products that increase ROI for advertisers. Its core userbase is the often hard-to-engage youth audience: 90% of 13-24 year-olds in the US say that they use Snapchat, and they’re highly engaged – they open the app on average 20 times a day, and dwell time is around 25-30 minutes, significantly longer than that of other social networks. All this gives brands plentiful opportunities to reach their audiences at the right time, with the right message – and that amounts to increased ad revenue for Snap.

    Snap’s range of ad products come in a range of different formats, including Snap ads which allow users to swipe up to visit the advertiser’s website or app and can be optimised against reach, clicks and sales; and commercials, a more premium offering which are unskippable and appear within premium content. They feel more like a TV buy for advertisers and have high viewability and completion rates. In October, Snap launched a new product to target direct-response advertisers, for whom Instagram – their historical home – is starting to feel a bit crowded. Its new dynamic ads allow advertisers to create ads linked directly to their product catalogues and can be served to users based on their interests, using a variety of templates created for mobile. This new product brings Snap’s offering more in line with that of its bigger competitors, and is one of a range of features that has helped to make Snapchat more shoppable, engaging and effective for marketers.

    Snap’s focus on the development of effective advertising formats is commendable, and will be key to its future success; indeed, it will be key to the success of the digital advertising industry as a whole. Traditional channels continue to have the upper hand when it comes to the price-effect ratio, and digital players must aim to emulate their success.

    AR is key to Snap’s future success

    While Snap’s star is certainly in the ascendant, there is still plenty of work to be done: it is still unprofitable and it only has 210 million daily active users – mediocre compared to the 500 million who use Instagram’s Stories product every day. CEO Spiegel stated on the quarterly earnings call last month that augmented reality (AR) will be crucial for the company’s future: each daily active user interacts with a Snap AR product, such as lenses and filters, an average of 30 times per day. This month the company is launching Spectacles 3, a redesigned version of its augmented reality sunglasses, and in the next seven to 10 years plans to integrate other AR wearables into its range. Snap has historically led the way in AR and has had viral success with some of its AR filters, but Instagram and Facebook are moving into the space, so Snap will need to move quickly to retain its first mover advantage and remain the dominant AR platform.

    So, is Snap a serious threat to Google and Facebook?

    Snap’s product development and innovation are turning it into a serious contender for advertisers’ ad dollars, and its growth rate means that the digital advertising giants – Google, Facebook and increasingly Amazon – need to pay attention, particularly as Snap has such high access to the millennial and Generation Z audience. It does however have a lot of work to do if it is to grow exponentially and become a real threat.

    Image: Shutterstock