In this week’s Week in Review: ITV chases the SME market, Facebook suffers a stockmarket kicking whilst Amazon, whilst Twitter’s revenue also plummets. Interestingly, various European pay TV operators reported a growth in subscribers this week. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.
Ofcom Report Highlights UK TV Industry’s Woes
Ofcom’s Communications Market Report for 2018 highlighted some of the challenges facing the UK TV industry. Television advertising revenues fell by 7 percent in real terms in 2017, and the report noted that while this may be largely due to macro-economic factors, the “risks of structural decline appear to be growing as viewing figures fall and online video advertising grows”. The report also noted there was a decline in pay-TV revenues in 2017, after many years of growth, indicating a challenging market for pay TV operators such as Sky and Virgin Media, which face competition from subscription on-demand services like Netflix and Amazon Prime.
Unsurprisingly, much of the decline was attributed to the fact that many younger viewers are heavy YouTube and Netflix users:
A third of people watch programmes on BBC iPlayer, and subscription streaming and on-demand services such as Netflix and Amazon Prime Video are in around 40 percent of households. Young adults (16- 24s) watch an average of an hour of YouTube a day, and our research into children’s media literacy found that YouTube and Netflix had higher brand recognition than BBC or ITV among 12-15 year-olds.
The fall in broadcast viewing is steepest among children and young adults. Children’s viewing fell by 15 percent in 2017 to an average of 1 hour 24 minutes, and 16-24s’ viewing fell by 12 percent to an average of 1 hour 40 minutes. Over-54s make up 28% of the population of the UK but accounted for 51% of television viewing in 2017. These changes in viewing behaviour present major challenges to broadcasters.
Apple Becomes World’s First $1 Trillion Company
Apple, a technology company that hasn’t truly innovated in years, became the first world’s first company worth $1 trillion
Amazon Tops List of Programmatic Spenders in the US
MediaRadar, an advertising intelligence platform, announced the results of a new study, analyzing the top US programmatic spenders. According to MediaRadar data, in Q1 2018, three-quarters (75%) of all brands tracked placed digital ads programmatically.
Amazon alone accounted for 10% of the spend of the top-50 programmatic advertisers in Q1 2018, spending 1.5x more than the next biggest programmatic spender, Microsoft. The top-10 programmatic advertisers were:
- Charles Schwab
- Weight Watchers
- Coors Light
Programmatic native advertising also saw considerable growth. Of the brands that ran native ads in Q1 2018, 42 percnet placed all of their native programmatically — up 10 percent compared to Q1 2017.
Comcast Partners with Amazon
Comcast and Amazon said Thursday they have formed a partnership to bring Amazon’s Prime Video service onto Comcast’s Xfinity X1 set-top box, the latest uneasy alliance between the cable industry and online-video providers.
Turner Sees Double-Digit Gains at its Upfront
Turner saw “double digit growth” from its upfront negotiations this year, according to Adweek. The company wrapped up its negotiations with double-digit CPM (cost per thousand viewers reached) gains and secured volume increases in the mid-single digits, according to “a person familiar with negotiations”.
Sizmek Releases Revamped DSP
Sizmek released its new Sizmek DSP which also integrates the technology the company acquired from RocketFuel technology. The company says it’s faster, more intuitive, and easy to use. Sizmek say the DSP’s AI is configured in such a way that buyers don’t have to worry about it taking control or hiding its activity from traders, so buyers retain control over campaign execution and when to use AI.
ProSiebenSat.1 Revenues Decline 4 Percent
ProSiebenSat.1, a leading German media company, saw its revenues drop by 4 percent to EUR 1,794 million over the last year, down from EUR 1,872 million. However, in a statement the company said that adjusted for consolidation and currency effects, the Group generated revenues at the previous year’s level.
Dr. Jan Kemper, CFO of ProSiebenSat.1 Media SE, says: “We are operating in a demanding market environment which impacted growth in our Content Production & Global Sales and Entertainment segments in the first half of the year. At the same time, however, our third segment Commerce with NuCom Group was able to accelerate its organic growth. Due to the seasonality of our business models, we now anticipate the second half of the year to be stronger, as it has been the case in previous years.”
In June, ProSiebenSat.1 announced plans together with Discovery to build a leading streaming platform for Germany, integrating 7TV, maxdome, and the Eurosport Player. This was approved by German and Austrian antitrust authorities at the end of July. The objective of the platform is to gain additional partners and establish 7TV as a provider of local, European, and US content. Starting in the first half of 2019, the expanded platform will offer digital entertainment tailored to its viewers’ preference
Dailymotion fined for Data Breach
Dailymotion €50,000 for failing to secure its customers’ personal data by France’s National Commission for Computing and Freedom (CNIL) , a relatively small fine considering the company lost 82.5 million email addresses and 18.3 million passwords. Significantly, no users of Dailymotion have reported any damage as a result of the hack over one year after it took place.
UK Ad Spend Acheives Record Growth for Q1 2018
UK advertising spend in Q1 2018 rose 5.9% year-on-year to reach £5.7bn – the 19th consecutive quarter of market growth, according to Advertising Association/WARC Expenditure Report data published this week. Further key findings from the report include
- Q1 2018 was the strongest first quarter in three years
- Print display ad revenue for national newsbrands rose for the first time in seven years
- Radio (+12.5%) recorded its strongest growth in four years, while internet (+10.8%), out of home (+5.3%) and TV (+5.0%) were all positive during the quarter
- Ad spend growth forecasts for this year and next have been upgraded, by 0.6pp to 4.8% and 0.7pp to 4.5% respectively. If proved correct, this would conclude a decade of continuous growth, and result in investment of over £24bn in 2019.
- Search now accounts for almost three in ten pounds spent on advertising in the UK, a share which has risen 1.8pp over the last year. Spend on search advertising has grown consistently since monitoring began in 2001.
- Display formats, which account for just under two-thirds of all adspend in the UK, recorded a rise in investment of 4.7% in Q1 2018 – on a par with the rate recorded in the final quarter of 2017. Excluding direct mail, spend on display formats rose 6.0%. This was the strongest sector growth since the final quarter of 2015.
Inscape Partners with LiveRamp
Inscape, a provider of smart TV viewing data and LiveRamp, a specialist in ‘omnichannel identity resolution’ that was recently acquired by Acxiom, announced a partnership to connect LiveRamp’s IdentityLinkTM ID with Inscape’s ACR-generated insights from nearly nine million smart TVs.
Channel 4 Appoints Chief Operating Officer
UK broadcaster Channel 4 has confirmed the appointment of Keith Underwood as its new chief operating officer. Underwood took on the role in March while a full recruitment process took place and has position has now been made official. He was previously Channel 4’s director of strategy and technology.
Index Exchange Hires Chief Financial Officer and General Counsel
Index Exchange, an ad exchange, today announced it has hired Neil Dorken as Chief Financial Officer and Jason Cicchetti as General Counsel. Dorken, a registered CPA, joins Index Exchange from Air Methods — the world’s largest air medical transportation company, with USD 1.2 billion (GBP 9.12 million) in annual revenue and 5000 employees. In addition, Jason Cicchetti, who has acted as the Index Exchange’s external counsel for the past several years, now joins the company as General Counsel.
Ad of the Week: China Airlines, “The Trip You Promised”, Leo Burnett Taiwan