The WIR: WPP Posts Disappointing Q3 Results, Facebook and YouTube Say They’re Open to JIC Measurement, and Deutsche Telekom Launches OTT Service


In this week’s Week in Review: Holding group shares slide after WPP’s Q3 results disappoint, Facebook and YouTube say they’re open to joint industry currency measurement, and Deutsche Telekom launches a new OTT service. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.

Top Stories

Holding Group Stocks Sink Following WPP’s Difficult Q3
Share prices for all the major holding groups fell this week following disappointing Q3 financial results from WPP, in which the company reported a 1.5 percent drop in revenue. WPP chief executive Mark Read, who is facing a baptism of fire after being appointed in September to lead the holding group, admitted that his company has been “slow to adapt” to structural change in the industry and has under-invested in core parts of its business.

WPP’s share price fell 18 percent after the results were announced, meaning the company’s value has halved since the beginning of 2017. And while Omnicom and Publicis Groupe’s recent results were much more positive, WPP’s poor performance seems to have hit investor confidence in the sector as a whole. with shares in Omnicom and Publicis falling by four percent and six percent respectively.

Facebook and YouTube Open to JIC Measurement in UK
Facebook and YouTube this week both said they are open to getting involved in a joint industry currency (JIC) model for measurement in the UK. Speaking at a Royal Television Society measurement this week, executives from both companies said they would be willing to get involved in JIC initiatives so long as they are appropriately and fairly measured, though they said they are keen to avoid “one size fits all” measurement structures. Both Google’s UK head of marketing insights Jonny Protheroe and Facebook’s head of marketing science R&D for EMEA Alex North said the measurement models must account for the differences between tradition TV and their own platforms.

Deutsche Telekom Launches OTT Service
German telecoms company Deutsche Telekom this week launched a new over-the-top (OTT) product into the German market, while also rebranding its TV offering as MagentaTV. MagentaTV will be available through an IPTV (internet protocol television) set-top box, which will feature catch-up and on-demand content as well as around 300 linear channels. An alternative slimmed down OTT option will be available via iOS and Android Apps, as well as Chromecast and web browsers.

The Week in Financial Results

Tech Stocks Sink Despite Strong Ad Sales
A number of the big US tech companies released their Q3 financial results this week, and while many supported strong ad sales, markets cooled on tech stocks following disappointing revenue growth:

Amazon
Amazon delivered Q3 revenues of $56.6 billion, falling short of Wall Street estimates of $57.1 billion. The company’s ad revenues however saw continued strong growth, rising 122 percent year-on-year to nearly $2.5 billion. The company’s stock nonetheless fell by over nine percent in after-hours trading.

Alphabet
Google’s parent company Alphabet similarly disappointed on total revenue, reaching $33.7 billion in Q3, short of Wall Street forecasts of $34 billion. Google’s ad revenues rose around 20 percent year-on-year, hitting $29 billion. Again, this was not enough to appease the markets, with Alphabet shares falling over seven percent.

Snap
Snap beat expectations on revenue, bringing in $298 million in Q3.  However the company is continuing to use losers, with its daily active user count down by two million compared the previous quarter. This, alongside general pessimism around the big tech companies, saw stocks fall by around ten percent in after-hours trading.

Twitter
While other big tech companies struggled, Twitter’s stock rose this week following positive Q3 results. The company bought in revenues of $758 million in the quarter, a 29 percent year-on-year increase, comfortably beating out analyst expectations of $703 million. Daily active users on the platform were also up, increasing nine percent year-on-year. Twitter shares were up by over 18 percent following the strong results.

The Week in Tech

TAG and JICWEBS Unite for Single Anti-Ad Fraud Standard
The Trustworthy Accountability Group (TAG) and Joint Industry Committee for Web Standards (JICWEBS), trade bodies from the US and UK respectively, announced this week they are aligning to introduce a unified anti-ad fraud standard within the UK. The two will work together to introduce TAG’s ‘Certified Against Fraud’ programme in the UK next year, with the scheme have been running in the US since 2016. The programme allows industry players to receive certification that they are committed to tackling ad fraud by complying with a set of principles and practices laid out by TAG.

Buzzfeed Uncovers Massive In-App Ad Fraud Scheme
A sophisticated ad fraud scheme involving over 125 million Android apps and websites stole hundred of millions of dollars from advertisers according to a report from Buzzfeed News released this week. The operation allegedly bought popular legitimate apps from their developers, and then tracked the behaviour of those apps’ users. This data was then used to create sophisticated bots capable of mimicking real user behaviour, making fake traffic appear legitimate and allowing it to bypass fraud detection systems. Google calculated that around $10 million was stolen from advertiser who bought ads on the affected apps from its own ad network.

Simulmedia Adds OTT Inventory to Transparent TV
Simulmedia this week announced that it has begun to add premium OTT inventory from its linear TV partners to its Transparent TV offering. This means advertisers will now be able to plan, buy and activate integrated video campaigns across linear TV and premium streaming video from one unified platform. “We are starting with a foundation in national, linear TV, delivering hundreds of millions of viewers across more than 80 national networks,” said Simulmedia CEO Dave Morgan. “Now, we’re complementing it with additional reach from those networks’ streaming video products, which audiences consume over multiple content platforms and devices.”

The Week in TV

Netflix to Fund Fresh Spending Spree with $2 Billion Debt
Netflix announced this week it plans to raise a further $2 billion in financing through debt securities, in order to fund new content production and acquisitions. “We recognise we are making huge cash investments in content, and we want to assure our investors that we have the same high confidence in the underlying economics as our cash investments in the past,” the company said in a letter to investors. “These investments we see as very likely to help us to keep our revenue and operating profits growing for a very long time ahead.” Investors however don’t seem to share quite the same confidence, with Netflix’s share price falling nine percent after the announcement.

AT&T Reports Continued Pay TV Decline and Digital Growth
AT&T reported continued declines in subscriptions to its pay TV services in Q3, with subscriptions to DirectTV and U-verse services dropping by 346,000. It’s digital offerings meanwhile are adding subscribers, but not by enough to mitigate the pay TV losses, with DirecTVNow bringing in 49,000 new subscribers in the quarter. The company’s advertising unit Xandr meanwhile saw positive growth of 30 percent, driven largely by its acquisition of AppNexus earlier this year.

“We continue to navigate industry pressure,” said John Stephens, AT&T’s chief financial officer. “We are refining our four video products tailoring them to customer needs.”

Germany’s SVOD Market set to Overtake UK
Germany’s subscription video on-demand market is set to surpass the UK’s as the largest in Europe according to Ampere Analysis, thanks to strong growth of Netflix and Amazon Prime Video. Netflix gained 400,000 new subscribers in Q3 this year, while Amazon Prime gained almost 700,000. Meanwhile Digital TV Europe quoted Cirkus’ Mark Bradford as saying Germany could overtake the UK by the end of this year.

Roku Users Reject Pay TV says TDG
User of Roku devices, more than any other device, are most likely to reject traditional pay TV services according to a report from The Diffusion Group. The research found that 35 percent of Roku users don’t subscribe to any pay TV service, suggesting that it most commonly seen as a complete alternative to pay TV. “Should Roku remain the dominant brand, and continue to expand its vast OTT content ecosystem [and] legacy pay-TV will suffer,” said TDG president Michael Greeson.

The Week in Publishing

Refinery29 Lays Off Ten Percent of Staff
Digital publisher Refinery29 plans to lay off around ten percent of its workforce, according to the Wall Street Journal, as it’s set to fall short of its annual revenue target. The company’s co-chief executives Justin Stefano and Philippe von Borries said in an internal memo that they will be moving focus away content geared towards social media, and shifting more resources into high quality video which can be licensed to TV and streaming networks. Social media content has driven views according to the memo, but had not yielded enough income to justify high levels of investment.

Turner Shutters Super Deluxe
Turner announced this week is has shut down Super Deluxe, its off kilter digital video and TV studio. Super Deluxe was first launched in 2006 as a website hosting comedy shorts from established comedians like Tim and Eric and Bob Odenkirk, but was folded into Adult Swim in 2008. The Super Deluxe brand however was revived in 2015, and created content for platforms including YouTube and Facebook Live, on which it claimed to reach 52 million users each month. Turner said the decision came due to “duplication with other business units in our new WarnerMedia portfolio” following AT&T’s takeover of Time Warner earlier this year. Presumably AT&T already has its own studios already creating videos like this:

YouTube Hits Out at New EU Copyright Laws
YouTube CEO Susan Wojcicki this week hit out at the controversial Article 13 of the EU’s new copyright directive, saying that the legislation “threatens hundreds of thousands of jobs, European creators, businesses, artists and everyone they employ”. The new directive, which was approved by the EU parliament earlier this year, is designed to stop the spread of copyrighted material on platforms like YouTube, Facebook and Twitter by shifting more responsibility for policing content to those platforms. Wojcicki is hoping that through the #saveyourinternet campaign, the final wording of the new directive might be changed to soften the directive’s effects.

Instagram Ad Revenue Thriving says Marin Software
Instagram is an increasingly attractive target for advertisers according to research from Marin Software, with over 15 percent of all ad spend across Facebook’s properties being spent on the photo and video sharing platform.  Instagram Stories are the most popular ad format, accounting for 25 percent of all ads on Instagram.

The Week for Agencies

IPG Records Strong Sales Growth in Q3
Interpublic Group (IPG) posted overall revenue growth of four percent in its Q3 financial results this week, with income reaching $2.3 billion. IPG chief executive Michael Roth said client spending was high due in part to IPG’s acquisition of consumer data platform Acxiom, as well as better economic conditions. “[IPG’s acquisition of Acxiom is] an indication that we are looking forward,” he said. “In the marketplace, clients look to see whether we continue to invest and have those kind of resources.”

Bayer Brings Programmatic Buying In-House
German pharmaceuticals company Bayer is partnering with MightyHive to bring programmatic buying in-house, according to AdExchanger. Bayer’s VP of digital strategy Josh Palau reportedly told an audience at Programmatic IO New York that the company has been contemplating bringing programmatic buying in-house since March last year, and this it hopes to drive greater efficiency and effectiveness in marketing, as well as taking more control of its customer data.

Accenture Buys Brazilian Content Marketing Agency
Accenture Interactive has bought Brazilian content marketing agency New Content according to The Drum, the consultancy’s second agency in Latin America. The agency, based in  São Paulo, employs over 200 staff and handles content strategy, creation and production. Terms of the deal were not disclosed.

Hires of the Week

Facebook Appoint Nick Clegg as Head of Communications
Facebook last Friday appointed former UK deputy prime minister and head of the Liberal Democrat party Nick Clegg as its head of global affairs and communications team. Clegg has said he sees the role as an opportunity to work on the frontier between technology and politics.

Snap Hires New CSO and CBO
Snap this week announced two new hires to replace its former chief strategy officer Imran Khan. Jeremi Gorman, previously of Amazon, has been taken on as chief business officer while former HuffPost CEO Jared Grusd has been picked as the new CSO.

Chris Castallo Appointed Head of Unscripted Content at Amazon
Christ Castallo, previously CBS’ head of alternative programming, was appointed this week as Amazon Studios’ head of unscripted content.

This Week on VAN

Third Party Audience Monetisation Leaves Media Companies “Shooting in the Dark” says IPONWEB’s Golbere, read more on VAN

Striking Out on Your Own: What is Life Like as an Advertising Consultant? read more on VAN

To In-House or Not? How Brands are Taking Back Control and How the Role of Agencies is Evolving, read more on VAN

GDPR is a “Very Small Baby Step” in Regulating a Data-Fuelled World says TRUTH’s Keane-Dawson, read more on VAN

How ‘Bring Your Own Device’ Platforms are Shaking Up In-Transit Advertising, read more on VAN

Ad of the Week

Ford, The Future is Built, Wieden+Kennedy


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