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Global Ad Trends: AVOD luring brands and viewers from linear TV

Advertising spend on broadcast TV (excluding political ads) fell by $34 billion in 2020, as pandemic-induced restrictions halted TV productions and brands turned to streaming with the AVOD market set to double by 2025 to $54 billion, per WARC’s Global Advertising Trends: Next Generation TV.

Why it matters

Broadcast’s loss was mostly AVOD’s (ad-funded video on demand) gain, as brand investment in streaming platforms grew by 9.9% to $26.7 billion. Over the next five years, that investment in the US market – the world’s largest – is set to treble to $24.2 billion.

Commenting on the results, James McDonald, Head of Data Content, WARC, noted that next gen TV is “demonstrating the core traits of offering mass reach for resonant creative in brand safe environments. However, unlike with its ancestor, fraud now poses a very real and present threat to advertising trade, especially among unverified vendors.”

The details

• Investment follows consumers. Over a quarter of US (26%) and UK (27%) viewers are streaming more video at the expense of linear TV. A full third of Americans exclusively stream their video content.
• 2020 was a watershed moment for video streaming. 40% of consumers around the world now have an internet-connected TV, either smart TVs or through a device or console.
• Linear TV is receding, but the TV screen remains king. The biggest screen in the house accounted for 75% of all streamed video time in Q4 2020 across CTVs (49%), smart TVs (17%) and games consoles (9%).
• Mobile matters everywhere, but it’s king in Asia, developing markets. While globally, mobile accounted for the same proportion of streaming time as desktop at 10%, live TV is a different story. YouGov finds that one in three globally watches live TV on their mobile, tablet or PC, but this rises to over one in two in India (57%) and China (54%).

Golf is forced to consider a future without Tiger Woods

Golf superstar Tiger Woods was seriously hurt in a car crash earlier this week and, if it turns out his injuries bring his competitive career to an end, that could have serious implications for broadcasters, sponsors and marketers.

However, at least one industry expert told Bloomberg that Woods himself could still make millions from speaking engagements, appearance fees and memorabilia deals even if he never plays in another tournament.

Who could be affected?

• If the crash ends Woods’s playing career, several TV broadcasters will lose one of their biggest draws. They include ViacomCBS, which will broadcast the Masters in April, and Comcast, which broadcasts golf on the NBC network and the Golf Channel.
• Discovery Inc. also will have to adjust its plans. The company has a deal in which Woods provides behind-the-scenes footage for GolfTV, a streaming service, as well as exclusive content for Discovery’s Gold Digest magazine.
• His sponsors include Nike, a partner dating back to 1996, Monster Energy, TaylorMade, which makes his clubs, and Bridgestone, the maker of his golf balls.
• When Woods won the Masters in 2019, the exposure generated $23.6m for his sponsors, according to analytics firm Apex Marketing Group. That level of exposure will be hard to replicate.
• But Bob Dorfman, a sports marketing executive at Baker Street Advertising, said he expected Woods’s sponsors to stick with him so long as he avoids scandal and remains visible. Like boxer George Foreman or NFL quarterback Joe Namath, he said Woods could still have a lucrative career even if his playing days may be over.

Key quote

“You won’t see the Nike logos on his shirt or him swinging a TaylorMade club or his Bridgestone ball rolling in the cup. That will be a challenge for those companies” – Bob Dorfman, Baker Street Advertising.

Sourced from Bloomberg

_{[Image: KA Sports Photos via Creative Commons]}

Australia’s News Bargaining Code becomes law – here’s what that means

Australia has passed the News Media Bargaining Code into law, following furious opposition from Google and Facebook, and a news blackout from the latter.

Why it matters

Now the question shifts to whether the Code will a blueprint for other countries looking to rein in unavoidable ‘gatekeeper’ platforms. Harsh though the law may seem, Google and Facebook have significant latitude to make deals outside the code. Both are doing just that.

What is it

Regarded as a model for correcting an imbalance of power, the law creates a way for commercial publishers to strike deals for payment with platforms on which their content is made available and force them into arbitration should they not agree a price within a certain period.

• The platforms argue, not unreasonably, that this is unfair as it would force them to pay for a free service that provides traffic to news websites where the publisher can then advertise.
• Under the law, it’s possible that Facebook, for instance, would have to pay a publisher for a link that the publisher’s own account shared.

That’s the well-known part; data and algorithmic transparency clauses that could have provided some real information about the data platforms actually use to make money have been lost amid criticism of the law as a link tax.

But the law’s real power lies in forcing the platforms to start making deals with publishers outside the purview of the code.

How to read it

Celebrated as “world-leading” by the Australian government and denounced as a shake-down of digital platforms by critics, the News Media Bargaining Code caught fire after Facebook’s swiftly taken – and swiftly reversed – decision to block news in Australia as a retaliation.

Facebook was to be granted some more time to get out there in the market and start making deals, as Google had already been doing. It was also given the option to pay publishers in one lump sum rather than through a pay-per-click arrangement.

Think outcomes

The Australian government’s intended outcome is to keep the country’s media landscape well-funded and diverse.

In pursuit of those aims, it’s likely that the country’s relatively concentrated media market will be better-funded as a result of deals made over payments, though neither the code itself nor the impetus it provides to make deals outside the code does anything for public service news providers or smaller outlets (with less than $150,000 AUD in revenue) left out in the cold. In short, the biggest winners are the biggest publishers.

Sourced from the Government of Australia, New York Times, Stratechery, the Guardian

Why CX measurement needs to move beyond surveys

Most businesses rely heavily on surveys to inform their approach to customer experience (CX), but often these are not representative, are backwards-looking, fail to identify the basis of sentiment and don’t link to any business outcome.

Context

• A survey of 260 US-based CX leaders by McKinsey found that 94% used a survey-based metric to measure CX performance but only 4% were able to calculate the ROI of CX decisions.
• But analysis of a range of data sets covering existing interactions and attitudes, and the use of algorithms to generate predictive scores based on journey features enable a business to predict satisfaction and value outcomes.
• Insights and suggestions thus derived can be quickly shared with relevant people who can take appropriate and prompt action. 

Case study

An analytics-driven approach at one credit-card company enabled it to focus investment and operational efforts on those journeys and specific moments that made a difference for customers. Interaction and operational costs were reduced by 10-25% as a result.

Takeaway

“CX programs of the future will be holistic, predictive, precise, and clearly tied to business outcomes. Evidence suggests that the advantages will be substantial for companies that start building the capabilities, talent, and organizational structure needed for this transition” – McKinsey Marketing & Sales/Operations.

Sourced from McKinsey 

UK and German marketers suffer least because of COVID-19

The majority of marketers suffered lost revenue due to COVID-19 last year, but the UK and Germany were the countries least affected in terms of ‘big declines’ in revenue, according to a new study by Criteo. 

What the study found 

The State of Digital Advertising report (based on a survey of over 1,000 senior marketing executives for brands and retailers across ten markets around the world) found 10% of UK marketers and 8% of German marketers saw a ‘big decline’ in revenues due to COVID-19. The figures were highest for Spain (25%), the US (22%) and France (21%). 

• Three quarters (76%) of those surveyed say the marketing function has increased in importance during the pandemic.
• The biggest reason for the increased significance is acquiring new customers (61%), closely followed by the increased digital marketing activities (59%) for brands and retailers.
• Social media posted the biggest increase in marketing spend in the last six months in the UK (68%), closely followed by retail websites/apps (62%). 
• In the UK, 77% expect performance marketing channels will attract more advertising spend in their organisation this year, with website sales (46%) and average customer spend (45%) ranked as the top metrics influencing marketers’ plans.

Pain point 

Over-dependence on walled gardens is a top concern: one in three marketers says that among the issues they experience most frequently, their digital campaigns are too dependent on Facebook, Google and Amazon. 

Sourced from Criteo

Reach and ad quality are key short-term drivers of ROI

Reach and ad quality are the most important short-term drivers of return on investment (ROI), according to research from Nielsen.

Why it matters

The most significant short-term factors for driving ROI vary across categories – ad quality ranks highly for most but is of less importance for food and personal hygiene & health advertisers.

Improving on the factors most relevant to their category can help advertisers double their ROI, from an average of $1.06 to $2.09. WARC's own analysis of the most successful brands shows that the median ROI can rise even further, up to $3.99.

Takeaways

• Reach achieves an average rank of 1.8 (between 1 as the most significant driver and 9 as the least significant) while ad quality follows at 2.4.
• The WARC Awards for Effectiveness is a new global competition showing how marketing delivers business results – entries are now open.

Sourced from Nielsen, WARC Data

Tata Motors shifts to a post-COVID media mix

Keeping auto brands in the minds of consumers has been a challenge for India’s Tata Motors during this past year and the lessons the brand has learned will inform future strategy, according to the head of marketing in the passenger cars division. 

What COVID-19 has changed 

• Consumers are thinking more about vehicle safety features then they did before.
• A digital path is replacing the traditional showroom visit. 
• People weren’t using cars as much during the pandemic but now they see them as a safer way to commute.

It’s about screens now 

“We’ll be focused more on digital, in terms of media and experiential marketing,” Vivek Srivatsa told Afaqs! “Social media and online reputation management becomes more important. Being seen on a screen – whether it’s a mobile phone or a TV or a laptop, becomes important.”

Final thought

“OOH will remain important. With lesser travel, OOH becomes more important because when you go out, you tend to notice these things more. It doesn’t become a blind spot” – Vivek Srivatsa, head of marketing/passenger cars, Tata Motors.

Sourced from Afaqs!

L’Oréal sees ‘no limit’ to growth in China

Cosmetics giant L’Oréal’s next CEO predicts a post-pandemic boost for the beauty industry, citing what is happening in the China market now as proof that a “fiesta of makeup and fragrance” is coming.

During a recent earnings call, Nicolas Hieronimus, who takes over as boss in May, set out the group’s strength in China, where it has seen double-digit growth and where all of its categories have returned to normal.

The details

• The Chinese love of beauty will continue to drive the market, the company says, with rising demand from Chinese men as well as women. China’s consumers love strong brands and understand quality.
• E-commerce will be a key focus for the brand in China, where 50% of sales in the sector are already online.
• Skincare will continue to be the number-one growth driver in China, partly due to the country’s ageing demographic. The sun-care category also has huge potential.

Soundbite

“The market has still many years of growth ahead. The spending per capita of Chinese consumers is still quite low compared to that of the USA. So, there is no limit to the growth potential of China”– Nicolas Hieronimus, Deputy CEO at L’Oréal.

Sourced from Seeking Alpha

UGC powers social commerce in the UK

Social commerce is now firmly mainstream in the UK – and user-generated content (UGC) is a vital part of its success, according to a report from Bazaarvoice.

The impact of COVID-19

The tech company’s annual Shopper Experience Index finds that, in the UK, 31% of consumers say they’ve cut visits to the shops, and 21% say they’re currently not shopping in-store at all; 18% only go out for essentials. And, strikingly, less than half (45%) say they would select in-store over online if they had to choose only one way to shop for the next year.

The social details

• A third of UK consumers now buy directly through social media – the highest level in Europe.
• Feedback from other customers really matters, with over a third (37%) of shoppers saying they won’t buy unless there is user-generated content available.
• Almost half (48%) look specifically for customer photos on product pages.

The bottom line

“Brands and retailers can use rich, visual content online to create experiences where shoppers feel they truly trust and understand the product they are buying. Customer videos, images and reviews are one of the most effective ways to achieve this. Enhancing the online experience with authentic user-generated content means other shoppers have the confidence to buy” – Ed Hill, SVP EMEA, Bazaarvoice.

Sourced from Bazaarvoice

Brits go streaming as digital media consumption grows

During the pandemic, Britons watched more live and on-demand TV but average weekly viewership fell as streaming viewership rose sharply, according to a new report. 

YouGov’s ‘International media consumption report 2021: Is there a new normal?’ is based on more than 18,000 interviews across 17 global markets and explores traditional media, digital media, advertising, subscriptions and the impact of COVID-19. 

Key GB points 

• COVID-19 increased average weekly viewers for streaming (+8%) while live TV (-2%) and on-demand decreased (-4%).
• The proportion of Britons who listen to podcasts increased to a third in 2020 (33%), with comedy the most popular genre (16%).
• Commercial radio listenership declined from 59% to 55% as fewer people commuted and more worked from home. 
• Print magazine consumption saw significant decline between 2019 and 2020 (41% to 26%), print news readership fell 9%.
• Popularity for mobile/tablet news apps grew by 4% to rival print as a preferred news source (29% compared to 34%).

Final thought 

“COVID-19 has significantly impacted consumer behaviour and, in turn, media consumption habits globally. Change has been unpredictable. Reliable, up-to-date insight can provide an early window into behaviour change to inform effective media planning and campaign development” – Jules Newby, Sector Head of Media at YouGov.

Sourced from YouGov

One in five viewers streams at the expense of linear TV

One in five internet users say they don't watch traditional TV content but do stream TV, according to data across six European markets and the United States from AudienceProject.

Why it matters

More consumers are using streaming services like Netflix and this data suggest some audiences are moving away from traditional TV, rather than watching both.

Consumers are also more interested in the content than the specific platform or device they actually watch it on. Internet-connected TVs and video-on-demand services offer more choice so have proven attractive to audiences.

Takeaways

• One-third of internet users in the United States say they don't watch traditional TV content but do stream TV, the highest share across all seven markets surveyed.
• Advertisers have responded – linear TV spend has fallen $47.1bn over the last five years while online video spend has grown $38.7bn.

Sourced from WARC Data's Global Advertising Trends: Next Generation TV. WARC Data subscribers can access the full report here. A free sample report is available to non-subscribers here.

'Shoppertainment - the next big e-commerce opportunity in Europe?

European consumers are more than ready to embrace the new online shopping formats, such as livestreaming and ‘shoppertainment’, that are so huge in China, a new study claims.

A report from AliExpress, the global online marketplace owned by China’s Alibaba Group, examines the development of the concept in Europe. Its conclusion: shoppertainment, which attracts consumers with interactive events such as livestreaming and games, will be the continent’s next e-commerce frontier.

What the study finds

• Consumers are ready to experiment with new ways of online shopping as a result of the COVID-19 pandemic. Two thirds of consumers from France, Poland, Spain and the UK say they’re shopping more online, and 70% said they’re specifically interested in the idea of shoppertainment.
• Consumers are most drawn to channels when electronics, fashion, and cosmetics are on offer and they’re most engaged when sellers conduct livestreaming events that feature short content that’s trustworthy, relatable, informative and hosted by someone they like.
• A category of ‘online always’ consumers (19% of those surveyed) is most likely to buy spontaneously when they see products offered by influencers they like. They also spend the most time on livestreaming commerce, averaging 23 minutes at a time.
  

Top takeaway

Europeans want different things, the study found: UK consumers want mobile-friendly content that’s trustworthy and entertaining, while French consumers prefer content that’s succinct and endorsed by influencers. Shoppers in Spain look for the best deal, along with practical information, and consumers in Poland value interactions with hosts and other customers the most.

Sourced from AliExpress

Apple boss reaches out to young Chinese consumers

A young Chinese influencer’s virtual talk show with Apple CEO Tim Cook has gone viral in China, reaching hundreds of millions of young consumers either directly or via related posts on Weibo.

Why it matters

Several international brands have been criticised in recent years for campaigns that misread local sentiment. Cook’s charm-filled approach via a social media influencer suggests a new way for Western brands to communicate directly to consumers in China.

The 18-minute video interview on Bilibili between 60-year-old Cook and 22-year-old student He Shijie appears to have had a largely positive response from young Chinese consumers, based on their reactions on social media, according to the South China Morning Post.

The details

• Cook spoke of his admiration for China’s tech advances, the Chinese people, their history and culture, and praised Chinese consumers’ feedback on Apple products, which had enabled “a tonne” of improvements.

• The chat, conducted in English with Chinese subtitles, steered away from any sensitive topics such as censorship, or the security controversy in the US and elsewhere surrounding Chinese tech companies.

• Apple was hit by the China-US trade war under Donald Trump, but in Q4 2020 it registered 57% growth in Greater China.

Soundbite

“Apple is using this peaceful moment not only for marketing, but also using Chinese social media to connect with consumers of Apple products” – Cameron Johnson, New York University Shanghai and partner at Tidal Wave Solutions consultancy.

Sourced from South China Morning Post

Spot volume down by a tenth as coronavirus hit

When the coronavirus outbreak took hold in Australia last year, TV CPMs fell markedly as many brands froze budgets. However, some categories bucked the wider trend and increased their spot volume, according to a WARC Data analysis of Adgile data.

Key trend

The number of TV spots measured in April 2020 (1.23m) were the lowest level recorded and had fallen by one-tenth (11.2%) compared to the start of the year.

However, the spot volume for health & beauty brands rose 47.2% between the pre-COVID period (Sept 2019 to Feb 2020) and the outbreak (Mar 2020 to Sept 2020). Finance and food brands also increased volumes by over a third during this period.

Additional findings

• TV campaigns ran for longer as production was curbed – FMCG campaigns are now over a week longer.
• Retailers, usually value-led, pivoted to brand-building during the coronavirus outbreak.

Sourced from WARC Data's Global Advertising Trends: Next Generation TV. WARC Data subscribers can access the full report here. A free sample report is available to non-subscribers here.

Australia’s OOH industry reports 39% drop in 2020 revenue

Australia’s out of home (OOH) industry saw a total decrease of 39.4% on net media revenue in 2020, down to A$566.5 million, from A$935.5 million for 2019.

According to the Outdoor Media Association (OMA), which represents approximately 80% of the OOH industry, the COVID-19 lockdowns across the country along with economic conditions have been cited as the main factors contributing to the significant reduction for the industry.

Within the total, the share of Digital Out of Home (DOOH) edged up to account for 56.1% of total net media revenue, a slight increase on the 55.8% recorded last year.

OOH category breakdown (2020 vs 2019)

• Roadside billboards (over and under 25 square metres) - A$272.2 million vs. A$369.4million
• Roadside other (street furniture, bus/tram externals, small format) - A$153.2 million vs. A$266.5 million
• Transport (including airports) - A$62.4 million vs. A$169.4 million
• Retail, lifestyle and other - A$78.7 million vs. A$130.2 million