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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%).

Podcast listeners more diverse than US population

Podcast audiences have grown rapidly across the United States in recent years and are now more diverse than the wider US population, according to data from Nielsen.

Why it matters

As well as being major podcast listeners, Nielsen adds that Black and Hispanic listeners are more engaged with podcast advertising. NPR has engaged different podcast audiences through a selection of diverse content and advertisers can use the medium to connect with new audiences.

Takeaways

• Hispanic, Black, Asian American and 'other' listeners collectively account for two in five (41%) of podcast listeners.
• While 8% of all podcast listeners visit a retail location for more info when hearing a retail podcast ad, this rises to 9% among Hispanic listeners and up to 14% among Black listeners.

Sourced from Nielsen, WARC Data

US economy is boosted by 10% jump in personal income

Household income in the US rose by 10% in January, the second largest increase in income on record, according to figures released by the Commerce Department last Friday.

The increase came as federal government stimulus payments to households and consumer spending increased 2.4%, and it is hoped that the extra money will prime the US economy for a burst of growth this year, the Wall Street Journal reported.

Background

The administration of former President Donald Trump agreed a $900bn stimulus program last December and has been sending one-time cash payments of $600 to most households. In addition, the government has been adding $300 a week to the standard benefits claimed by the unemployed. Meanwhile, job growth resumed in January after falling in December.

Next steps

• Analytics firm Oxford Economics forecasts that US output will grow 7% this year, its strongest rate of growth in decades, and that US output will fully recover from the downturn by this summer.
• Income was above pre-pandemic levels in December, the savings rate is high and it is expected that wealthier households will contribute significantly to consumer spending this year.
• Previous government data have revealed that retail sales increased in January by the most since early last summer.

Key quote

“People are going to travel more. They’re going to go back to restaurants and bars, they’ll go back to the gym – all the things they basically were not able to do before the pandemic. This is where you will really see a burst in spending” – Lydia Boussour, senior economist at Oxford Economics.

Sourced from The Wall Street Journal

Consumers want India's brands to take a stand

Brands in India have to pick a position on controversial socio-political issues because consumers want them to, but it is is a high-risk, high-returns strategy.

Why it matters

When it comes to controversial socio-political issues, brands in India generally play it safe and avoid taking a bold stand – unlike their global counterparts. There are many risks for those that want to do so in a polarised nation, but the returns can more than make up for it.

Takeaways

• Indian brands are known for cause marketing but have often shied away from taking a bold stance on socio-political issues.
• Taking a position on an issue requires research on its probable impact, with some fundamental principles to be observed.
• Brands must have the necessary credentials, be consistent and committed, and act and not just talk.

APAC consumers want help not dreams from brands

While the APAC region has a higher level of trust in governments’ handling of the pandemic, concerns about the state of the economy persists, according to a study from McCann Worldgroup.

Why it matters

The global study, Truth About Culture and Covid-19, shows people in APAC generally trust their governments’ response to the pandemic but are concerned about the economy, with 64% being more cautious about post-crisis spending. The number rises to the highest out of any market surveyed in China, with 60% of people worrying about their jobs/finances, ranges between 35-40% in Southeast Asia and is lowest in Australia at just 26%.

In addition, 54% of people in APAC believe brands should understand their frustrations rather than providing them with dreams, a significant increase from 2018 when only 41% of people said the same.

Other highlights from the study

• One APAC outlier is Japan, where 33% believe the government’s handling of the pandemic was inadequate. Also, only 13% believe their country was prepared to handle the outbreak. 
• In India and the Philippines, three in four people said that they will be more conservative with their finances. 
• In Japan, 55% say they intend to go do/buy what they haven’t been able to, rather than be cautious about spending. And in South Korea, 69% intend to do/purchase what they’ve missed out on as a result of the pandemic. 
• 22% of people in APAC are concerned that people will become more racist, compared to 18% globally. This is most prominent in markets with high Chinese ethnicity, such as Hong Kong (29%), Singapore (29%), and China itself (28%).
• 38% of people in APAC believe COVID has emphasised existing inequalities. 
• 43% of people in APAC believe this crisis will inspire new innovations, compared with 36% globally. This is most strongly seen in Singapore, with 58% believing that the crisis will inspire new innovations, the highest figure globally.
  

The global study covers ten markets in the APAC region: China, India, Japan, Australia, Philippines, Malaysia, Singapore, Hong Kong, Indonesia and South Korea.

Sourced from McCann Worldgroup

Mobile gaming investment intensified in 2020

Mobile gaming bucked the downturn in advertising budgets last year and accelerated its advertising revenue growth, according to data from game development company Unity.

Why it matters

Gaming audiences grew rapidly last year as a result of stay-at-home orders and advertisers responded with higher levels of investment at a time when budgets were under pressure.

Some brands have been hesitant, though. WARC's survey of over 1,000 marketers finds that 40% of brands don't plan to advertise across gaming formats in 2021.

Takeaways

• In eight of the 15 game categories analysed, growth rates for mobile ad revenue more than doubled last year.
• To succeed with mobile gaming, advertisers need to tailor their approach and integrate messaging.

Sourced from Unity, WARC Data

California privacy law has not hit publishers' ad revenues

The California Consumer Privacy Act (CCPA), which enables residents of the state to opt-out from sales of their personal data on websites, has had little to no impact on ad revenues, prices or inventory.

That is according to a survey of around two dozen publishers, conducted by digital ad consultancy Beeler.tech and revealed by Digiday.

Key findings

• Publishers and ad tech executives believe the main reason the CCPA turns out to have had little impact on their bottom line is because of low opt-out rates among Californians. (By contrast, the European Union’s Global Data Protection Regulation requires users to consent to data collection by opting in.)
• In other words, compliance notices required by the CCPA make it easier for people to click to accept cookies rather than to opt-out.
• However, while the CCPA has not hit revenues, publishers expect it to have an indirect impact by inspiring similar laws in other states or even federal regulation.
• Technological change is likely to have a bigger impact than the CCPA, especially with Google planning to disable third-party cookies and Apple restricting ways of targeting users with ads.

Key quote

“A ton of effort has gone into compliance on the part of publishers, but there is no upside or downside revenue-wise” – Rob Beeler, CEO of Beeler.tech.

Sourced from Digiday

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 then 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 on 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 A$150,000 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 least affected by 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 1,000 senior marketing executives for brands and retailers across ten markets around the world) found that 10% of UK marketers and 8% of German marketers saw a ‘big decline’ in revenue due to COVID-19. The figures were highest for Spain (25%), the US (22%) and France (21%). 

• Three quarters (76%) of those surveyed said 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