Tag Archive: streaming

  1. The US TV landscape is transforming before our eyes – what does it mean for marketers?

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    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.

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  2. Is Netflix ready for the launch of rival platforms?

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    Make or break for Netflix

    A couple of weeks ago, Bank of America Merrill Lynch told clients that Netflix’s Q3 figures, out later today, would be ‘make or break’ for the streaming platform, and would indicate whether it would be able to effectively compete with new rival platforms from the likes of Disney and Apple. It’s been a difficult few months for Netflix – its share value has plummeted by nearly 30% in the last three months, and subscriber levels fell short of the company’s own guidance in Q2. Whether those subscriber levels have recovered will be of particular interest in the Q3 results – and investors will be looking for signals that they can retain that recovery as competitors launch their streaming platforms.

    Who are the competition?

    So what does the competition look like for Netflix? Apple and Disney are launching their streaming services next month: Apple TV+ on 1st November, and Disney Plus on 12th November in the US, Canada and the Netherlands, with other markets in the months afterwards. This makes strategic sense, particularly for Disney, as it can piggyback on the marketing for its big-budget holiday-season films, and Netflix has shown over the last few years that it gets its biggest viewership in the last couple of months of the year. WarnerMedia’s HBO Max and NBCUniversal’s streaming service will be launching in early 2020. So Netflix’s battle to keep its subscribers loyal – and grow its customer base – starts now. Convergence Research Group, which tracks the streaming industry, predicts that its 47% share of the streaming market in 2018 will decrease to 34% by 2022, as reported in an LA Times article.

    Original content will be increasingly important

    This decrease will in part be down to the fact that Netflix will be losing some of its most watched shows to its competitors: ‘Friends’, for example, will go to WarnerMedia’s streaming service in early 2020, while ‘The Office’ will be shown by NBCUniversal from January 2021. With adults spending only around 30% of the time they spend with Netflix watching Netflix Original content, it looks like this could have an effect on Netflix’s subscriber numbers.

    However, Bank of America Merrill Lynch told investors that he believes Netflix will have time to ramp up production of original content while its rivals work on building their subscriber bases. This will means that Netflix will need to continue its huge investment into original content – this year it is estimated to have spent around $16 billion dollars, and Pivotal Research Group estimates that this will have climbed to a giant $35 billion by 2025. This needs to be funded from somewhere and Netflix’s capacity to raise subscription fees – its fallback option to date – will be stymied by increased competition. Netflix could also consider increasing its debt, introducing ads, investing in innovation (such as the ‘Bandersnatch’ episode of ‘Black Mirror’, where viewers could choose what the main character did next), or harnessing the vast wealth of data they have on what people like to watch, and where.

    A core part of the streaming bundle?

    Netflix’s choppy year has made investors a little nervous, which is why so much rests on the figures that it is releasing today. But many think that things will be ok. Mark Mahaney, lead internet analyst at RBC Capital Markets, for example, told CNBC that most people will want to use more than one streaming service, and it’s likely that that will mean Netflix plus another – Netflix will be a core part of the bundle. He believes that Netflix has the scale advantage and better brand name, content, global distribution and partnerships than its competitors, which bodes well for the future. Time will tell!

    What does this mean for advertisers?

    TV is still a crucial medium for advertisers, but with viewers having more and more ad-free options from the new streaming platforms, it will become increasingly difficult to reach their hearts and minds. What’s more, they are likely to be less forgiving of higher ad loads on the ad-funded free-to-view channels. This means that the most effective media channels will likely become more expensive, and the wise ones may well have fewer, higher impact ad spots for which advertisers will pay a premium. Furthermore, the growth of addressable TV will allow for more targeted and therefore more engaging ads, and lower levels of rejection by the consumer.

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  3. How can vehicles like YouTube be made safe?

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    YouTube is embroiled in yet another brand safety scandal

    YouTube was recently beleaguered by yet another scandal involving brand safety. A Wired investigation revealed that many major advertisers, including Alfa Romeo, Grammerly and L’Oreal were featuring alongside videos that had widespread activity by paedophiles in the comments section. In response, brands such as AT&T, Disney, Nestle and Epic Games pulled their YouTube spend. This isn’t the first time that they’ve had to do this following a brand safety scandal: in early 2017, UK newspaper the Times revealed that brands were unwittingly funding terrorism by appearing next to extremist videos. Indeed, AT&T had only recently resumed its spend before pulling it again after this latest issue.

    It appears that media vendors continue to sell very poor-quality content, and buyers continue to purchase it – will anything change? How?

    Why is this happening?

    With their ads appearing alongside some of the most unsavoury content imaginable, you’d be forgiven for assuming that brands would turn their backs on YouTube permanently, or at least until they could be assured that it wouldn’t happen again. You could also be forgiven for thinking that tackling this matter would be top of vendors’ list of priorities, given that their business model is so dependent on advertising. So what’s going on?

    It’s all about the money

    The answer is, as it so often is, money. For vendors, the temptation to sell huge bundles of automated or semi-automated impressions can be too strong to pass up, while the sheer reach of those impressions is hard for advertisers to resist. The issue here is a lack of motivation on both sides to police content: brands could be doing more to monitor their campaigns, while vendors certainly have work to do around the content that appears on their platforms, and what advertising appears next to that content. The algorithm always goes where eyeballs go, which can lead to errors: for example, children’s videos often have high viewing figures, and children don’t tend to skip ads. The algorithm thinks this is fertile ground for an advertiser and promptly serves… an alcohol ad. This is especially likely if the child is looking at mum’s iPad and the brand is using demographic targeting. To be fair, Google has gone to significant effort to build tech that can track consumers across all devices, but that hasn’t stopped its targeting capabilities falling short, as the example above illustrates.

    In short, these scandals are happening because of an industry that continues to reward quantity rather than quality.

    So what can be done to improve brand safety?

    This is a difficult battle but it’s certainly one worth fighting as digital advertising becomes ever more prevalent and important. Responsibility lies with the platforms, of course – they must try much harder to make their content safer (not just for advertisers), and to prevent ads being served alongside potentially damaging content. But brands have work to do as well.

    Advertisers must be more careful about where their ads are being served, and what bundles they buy. There will always be a conflict between reach and relevance: while vendors and tech firms sell a dream of the automated purchasing of millions of hyper relevant, this is completely unrealistic, particularly in the short and medium terms.

    Using premium marketplaces

    One avenue that some savvy brands are pursuing in order to mitigate the risk of ads being served alongside ‘unsafe’ content is premium marketplaces, such as Google’s Preferred programme, private marketplaces and programmatic direct deals. These platforms give brands access to – at a premium price – inventory that is higher quality, brand safe and more relevant, in theory at least. However, these platforms are becoming increasingly crowded by concerned advertisers, and the packages often leave out high quality content. Alarmingly, there have even been instances where the packages have included content that has caused the brand safety scandals that brands are desperately seeking to avoid.

    Other formats are an option

    Of course, there are other options to the ‘traditional’ video ad: native advertising is not only safer, but also easier to target at the right audiences, so you get relevance and reach.

    Vendors must act too

    Of course, it goes without saying that the platforms themselves must really focus on weeding out inappropriate content, and on being stricter about which content can be monetised through ads. This might be controversial amongst content producers who rely on ad dollars for their income, but it will be critical to the success of the video platforms and avoidance of the scandals that have beset them in recent years.

    There’s no easy answer

    This is a complex issue which will take a lot of work from both brands and vendors to overcome; there’s no silver bullet. Google’s EMEA president even admitted that the tech giant may well never be able to guarantee 100% safety for brands. Advertisers will need to accept that they can’t have both huge reach and hyper relevance: greater relevance will come at a cost through programmes such as Google Preferred or private programmatic exchanges. Meanwhile, vendors must of course invest in tools and technology to make their content safe – for advertisers and viewers.

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  4. The reincarnation of audio

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    The last decade has seen a huge focus on digital and visual innovation in the advertising industry; but marketers and practitioners have always known the value of non-intrusive, highly accessible and limit-free advertising, which is why we are seeing a recent re-incarnation of audio for this generation.

    Divergence and evolution

    The audio marketplace has seen a divergence and then evolution from the standard radio format towards the podcast and music platforms, although radio still remains crucial. The beauty of these mediums for the advertiser is the ad: no blocking and no ‘peak-time’ engagement driving up prices.

    Demand for on-demand audio driven by commutes and smart speakers

    On-demand audio streams surpassed 400bn in 2017, compared to 252bn in 2016. Commuting times are rising as people seek more peaceful lives outside of cities, and rail commutes are on average 2 hours and 11 minutes: it’s no wonder that the demand for podcasts and other on-demand audio has risen so dramatically. Furthermore, smart speaker streaming helped to drive an 8% increase in the number of hours spent listening to digital broadcasts in 2018 versus 2017. The resurgence of audio should not go unnoticed.

    Is the marketplace ready for digital audio?

    Whilst the marketplace re-aligns with its audio roots, it is inevitable that there will be challenges for media planners, advertisers and auditors alike. The proliferation of streaming, smart devices and wifi has given consumers greater autonomy over their time and their method of consumption. Whilst this provides excellent opportunities for reach and brand awareness for advertisers, it begs the question: does the marketplace have the tools and devices ready to provide accountable and accurate tracking and analytics? Until these tools are standardised and harnessed across the market, it is likely the adoption of digital audio into media planning will remain consistent, but slow. Investment into this medium will be a lower priority until it can be demonstrated that digital audio outputs add strong, measurable value.

    Alongside this tracking and analytics issue, the industry will need to work out how to harness the increased quantity of data in order to drive further engagement with consumers. While digital audio attracts investment with an environment that is free of ad-blocking, it does create a transparency issue for the consumer-agency-platform owner relationship.

    An exciting future for audio

    The future of digital audio is an exciting one. The integration of programmatic audio is set to   propel audio back onto the main stage of advertising channels. Programmatic advances will increase campaign ROI, augment automation and decrease audio costs. The combination of these factors, alongside the accessibility and increase in the number of platforms will see marketers, advertisers and auditors being forced to become more innovative and dynamic in a format once seen to be traditional and static.

    All hail the return of audio: finally, our eyes will be given a rest from mobile screens!

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  5. Does mobile pose a threat to TV?

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    Audiences appear to be increasingly consuming video on their mobile devices. What does that mean for TV?

    A few weeks ago, we posted a blog asking if video streaming spelled the end of the TV industry as we know it. We concluded that TV would survive – even thrive – as long as it adapts and innovates. But the medium is not just fighting a battle on one front: mobile is another contender for the throne.

    The mobile decade

    Arguably, nothing has changed the face of media consumption – and therefore advertising – over the last decade as much as mobile. The statistics are familiar: in many developed countries, smartphone penetration is at around 70%, and mobile connection statistics tell a similar story: in 2008, there were 4.02 billion mobile connections globally, while in 2018 this had more than doubled to 8.53 billion – and in 2020 the figure is projected to be 9.02 billion. Human beings are duly becoming more reliant on their phones: in the UK for example, people spend around 24 hours a week on them, on average, and check them every 12 minutes, and this trend is reflected around the world. The mobile phone has replaced the television as the media device that we most miss; in 2007, 52% most missed the TV, while 13% missed their phone the most. 11 years later, the figures were 28% and 46% respectively.

    A bleak future for TV?

    Indeed, you could be forgiven for believing that the growth of mobile means a bleak future for linear TV. The young, mobile generation are increasingly tending to stream video content instead of watching traditional linear TV, and often do so on a mobile device. Many tech companies have noted this and are acting upon it: in June, CBS announced that it will be streaming NFL games on mobile devices from this autumn, while, shortly after closing their acquisition of Time Warner, AT&T announced the launch of their new mobile streaming service, Watch TV. These services will no doubt be popular, thanks in part to the smaller ad load for content streamed on a mobile.

    TV is still the most popular medium for video consumption

    However, Nielsen data released this week suggests that mobile is not denting TV’s success as much as it seems. Of 5.57 hours a day that US adults spent watching video in quarter one of this year, 4.46 of those were on live or time-shifted TV, while only 15 minutes were on a smartphone or tablet. Young people aged 18-34 were the only demographic who spent longer on a tablet or smartphone consuming general content (not just video) than on a TV. What’s more, even those households that don’t have a traditional TV don’t rely on their mobile devices to watch TV programming: 27% use a computer and 30% go elsewhere (to a friend’s or public place), compared to 16% using a mobile device.

    TV versus mobile in the future

    Will this change as the young, mobile generation grow older and take their mobile habits with them, replacing the more stagnant habits of older people? Or will they change their habits as they age to reflect those of their parents? Will increasing concern around mobile addiction and interest in digital detoxes encourage people to put their phones down and switch their attention to television? Time will answer all these questions, but we believe that TV is here to stay. One commentator said that ‘mobile is a wart on the ass of TV’: while we think that mobile is more significant in the video space than that, we can’t imagine that consumers will transform viewing habits so much that they will choose en masse to watch long-form content on a mobile over their television. TV is safe for now but, as always, needs to innovate and adapt to stay ahead of the game.

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  6. Media audits: the big four or specialists?

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    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.

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  7. The Digital World Cup

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    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.

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