context is queen
TRANSCRIPT
Context is QueenThe value of media environment
Douglas McCabe +44 207 851 [email protected]
Shift North, 13th October 2015
AgenciesAegis Media, Engine, Fox One Stop Media, GroupM, Karmarama, MEC, Mediacom, Mindshare, Publicis, WPP
Film/television21st Century Fox, Arqiva , BBC, BBC Trust, BBC Worldwide, Bertelsmann, Channel 4, Digital UK, Discovery, Freesat, Freeview, IMG Media, ITV, Ludorom, Miramax, NBC Universal, ProSiebenSat.1, SevenOne Media, Sky, Sony Pictures, STV, Turner Broadcasting, UKTV, UTV Media, Virgin Media, Vivendi, Walt Disney, Warner Bros, YouView, Viacom
PublishingArchant, DC Thomson, DMGT, Dorling Kindersley, Guardian Media Group, Hachette UK, Haymarket Media Group, Hearst Magazines UK, Holtzbrinck Group, Immediate Media, IPC Media, Johnston Press, Local World, London Evening Standard & Independent, Menzies Distribution, News UK, New York Times, Telegraph Media Group, Trader Magazine, Trinity Mirror, TES Global, Which?
TelecomsBT, Emtel, Everything Everywhere, H3G, Liberty Global, Nokia, Post Office, Qualcomm, Samsung, SFR, TalkTalk Group, Telefónica, Tesco Telecoms, Virgin Media, Vodafone, Vonage UK
TechEvenbase, Google, Microsoft, NTT Data, Shazam, Trader Media, Yahoo!
Music/radioBauer Media, BMG Rights Management, Ministry of Sound, PRS for Music, Communicorp UK, Sony Music Entertainment, Spotify, Universal Music Group
Professional servicesAccenture, ATOS, Bain & Company, Boston Consulting Group, Cognizant, Deloitte Consulting, Detica, Edelman UK, Ernst & Young, Hippo Frog Consulting, KPMG, McKinsey, OC&C Strategy Consultants,PWC, Russell Reynolds
Public sectorDCMS, European Broadcasting Union, European Commission, Ofcom, Scottish Futures Trust
Funds Aberdeen Asset Managers, Baillie Gifford, Cedar Rock Capital, F&C Asset Management, Fidelity International, Highfields Capital Management, Morgan Stanley Investment Management, Odey Asset Management
Investment banksAllen & Co, Barclays Capital, BNP Paribas, Citigroup, JP Morgan, Lepe Partners LLP, Moelis & Co, NM Rothschild
PE/venture capitalApax, Bob & Co, Cinven, Dial Square 86, Doughty Hanson, KKR, Permira Advisors, Providence Equity, Usaha Tegas
Some of our subscribers
What we have done
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• Newsworks commissioned Millward Brown and Enders Analysis to compare agency and brand owner views relating to automated advertising and the marketplace generally
• Millward Brown interviewed a number of senior people from various agencies and brands
• This is a summary of some of the themes and tensions from these interviews, and our overview of the challenges in the marketplace
Who we have spoken to
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Agencies BrandsSue Unerman, MediaCom Dominic Groundsell, (MoreThan) RSA
InsuranceRob Norman, GroupM David Wheldon, Barclays
Martin Vintner, iProspect Matt Holmes, William HillSimeon Adams, Good Stuff Andy Duncan, CamelotOwain Wilson, MediaCom Keith Hendry, ATS Euromaster
Craig Mawdsley, AMV BBDO Tony Preedy, LakelandJean Isvarphorncha, Liberty
Tim Male, Lloyds Banking Group
“One of those unfortunate bits of jargon where words don’t do what they’re meant to do – and that’s to tell you what it is”
- Craig Mawdsley “Programmatic is a sign of the times. But it’s blind buying which I don’t like”
- Matthew Holmes
“I’m not keen on leaving stuff to the chance of programmatic”
Agency Brand owners
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Disparate views on the current marketing marketplace
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Agencies Brand owners
Market functioning Good PoorMarket maturity Optimisation phase Development phaseViewability and fraud Teething problems Fundamental obstaclesGap between ‘promise’ and ‘practice’ of audience targeting
Good progressSome teething problems Fundamental obstacles
“Black box” of agency data Nature of the model Not trustedLack of financial transparency Great value for money Fear that they are overpaying
Key goals and measuresTargeted consumers
VolumesContext
Targeted consumersVolumes
Context is key [Source: Enders Analysis based on Millward Brown interviews
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“There are some yawning gaps in the processes and the understanding of how programmatic actually
works – not just within clients, but also the agencies and media owners we are working with”
- Dominic Groundsell
“If we don’t work it out [bots and ads on inappropriate sites] over the next to or or two or three years, there
is a significant danger of a backlash from society, politicians and certainly in Brussels”
- Brand owner
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Marketing landscape is being restructuredTotal advertising revenue (£m)
[Source: Enders Analysis forecasts based on AA/WARC and other industry data]
2000 2005 2010 2015f 2020f0
2000400060008000
100001200014000
Digital growth has been driven by direct response
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2000 20150
2000
4000
6000
8000
10000
12000
Display ad expenditure (£m)
Analogue Digital
2000 20150
2000
4000
6000
8000
10000
12000Classified ad expenditure
(£m)
Analogue Digital
Internet display growth is the next wave
0250500750
1,0001,250
US UK DR FR
Index 2004 = 100
Nominal internet display ad spend [Source: GroupM, IABUK/PwC, IABE/IHS, OVK, SRI/PwC, Enders Analysis]
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Rise of the trading machines (1)
Context is queen: the value of media environment [2015-019]
Media owners
Advertisers/agencies
Ad exchanges
Ad networksDemand-side platforms
Sell-side platforms
Agency trading desks
[Source: Enders Analysis based on IAB]11
Context is queen: the value of media environment [2015-019]
Rise of the trading machines (2)
Negotiated Programmatic Negotiated Programmatic Negotiated ProgrammaticDisplay (ex video) Mobile Video
0200400600800
1,000 844
296 296174 210
40
733600
233350 285
100
2013 2014
Digital display advertising by trading model (£m)
[Source: Enders Analysis based on IABUK/PwC/MTM]12
CMOs are under immense pressure
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Spend less
Shrinking budget
Deliver more
Improve Return on Investment
Prove it
Demonstrate greater ROI to
non-marketeers62% of CFOs believe
marketing is “critical”, but 61% are not
confident CMOs make good commercial
decisions[Source: WARC, Econsultancy, November 2014]
Pressure from the marketplace
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Marketing objectives (examples)
• Fame and stature• Positioning• Build trust
• Education and understanding• Prompt action
• Sales
Marketing outputs
Automated trading focuses on immediate – limited –metrics
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“Not everything that can be counted counts, and not everything that counts can be counted.”
– Albert Einstein
Marketing and media
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Awareness: display, video
Interest: social
Consideration:
emailConversion:
search
Marketing objective
[Source: based on blinkx, illustrative only]
Media
Retail
Automated values conversion and ignores “out-of-market”
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Visits: $0.01/visit
Audience: $0.05/profile
Signups: $0.25/lead
Purchase: $1.00/click
Awareness: display, video
Interest: social
Consideration: email
Conversion: search
Marketing objective Ad unit
[Source: based on blinkx, illustrative only]
Media
Retail
Digital Marketin
g Economy
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“We have stringent guidelines in place which keep us away from porn, and any illegal sites where possible. But
some do slip through the net”- Matthew Holmes
“It is more about where you don’t want to appear than where you do”
- Brand owner
Automated and unintended consequences?
Automated measures become
more important
Automated grows in scale and
influence
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Rise of third-party data; decline of media real estate value
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Consumer
Marketing
Mechanics Media
Visits to a website typically generate many tracking scripts, enabling publishers and 3rd party networks to track devices
These help power interest and behaviour based advertising
The browser's cookie is analysed and advertisers bid for, and serve, impressions in a fraction of second
Is the incentive to invest in content in order to create an attractive advertising platform being undermined? Businesses that curate and aggregate are more efficient at creating traffic
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“As far as online display advertising is concerned, it always works best when there is a relevance
between the creative that is being used and the environment”
- Tony Preedy
Actions taken after seeing display ads
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Communication/advocacy Active engagement Direct contact0%5%
10%15%20%25%30%35%40%45%
19%22%
40%
9%15%
26%
7%10%
23%
Original content sitesPortalsSocial networks
Research product online or in store, competition, watched video
Clicked link, searched on-line, bought product
Talk about a brand or visit/follow
[Source: AOP, The Value of Trust, 2012]
Quantifying context – video example
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TV YouTube0
0.050.1
0.150.2
0.250.3
0.350.4
Revenue per hour ($ estimates)[Enders Analysis estimates]
Newsworks’ “The company you keep” research
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Reading tasks
8,000 people sampleReaders and non-readersPrint, tablet, desktop (inc laptop) – online survey
Further 600 people sample completed reading task in
print and on tablet
Adverts in context
Classic display advertising categories
Motors, retail, finance, telecoms, TV
Adverts shown in context – with editorial constantly
changing
[Source: Newsworks study, The company you keep, 2015]
3 key metrics
Implicit questioning – moving sliders not answering explicit
questionsBrand love - composite
measure of how close consumers feel to the
brandsBuzz – how much the brand is talked about
Consideration – purchase intent the next time in the
market
+11%
+13%
+16%
Brand love
Tablet
+14%
+20%
+38%
Computer
+10%
+14%
+31%
Buzz
Consideration
News brand readers vs non-readers
[Source: Newsworks study, The company you keep, 2015]
Viewability and non-human traffic
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Viewability
• 56% of adverts are not seen (Google study, November 2014)
• 57% of video adverts are not seen (Vindico survey of 2 billion ads, 2014)
• “Seen” is defined as “half of its pixels visible for one continuous second”
Non-human traffic
• Kraft believes 75% to 85% of its digital advertising (real-time ad marketplaces) is “fraudulent, unsafe or non-viewable or unknown”
• There is $9.5 billion on “non-human” traffic – according to Solve Media estimates
Human Traffic, 38.5%Search engines + Other good bots, 31%Scrapers, 5%Hacking Tools, 4.5%Spammers, 0.5%Other impersonators, 20.5%
[Source: Incapsula]
Human traffic, 38.5%
Non human traffic 61.5%
Web traffic breakdown
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Our conclusions
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1. Brand owner and agency views are highly divergent
2. Brands do not believe automated buying delivers on its promise
3. CMOs are under increasing pressure (internal / external)
4. CMOs fear performance is too focused on direct (not IPA’s “60:40 split”)
5. Automated trading favours social and aggregator sites
6. Content media risks being undermined
What next?
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1. Discussions about automated trading– transparency and measurement clarity
2. PAMco – de-duplicated single measurement for readers3. Newsworks looking at a potential engagement study4. Shift 2016: update on how context amplifies standard
measures
Thank you
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