The WIR: O2 and Virgin Media Agree £31 Billion Merger, Facebook Risks Losing MRC Accreditation, and Roku Launches ‘OneView’ Ad Platform


In this week’s Week in Review: Virgin Media and O2 agree a mega-merger, the MRC warns Facebook could lose accreditation, and Roku folds dataxu into its new OneView ad platform. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.

Top Stories

Virgin Media and O2 Agree £31 Billion Merger
European telcos Liberty Global and Telefonica today announced they have agreed a merger of their UK operations, Virgin Media and O2 respectively. Ownership of the joint venture will be split 50-50 between the two companies, pending regulatory approval. The move will bring together O2’s 34 million mobile customers and Virgin Media’s nearly six million million broadband and pay-TV subscribers, plus its three million mobile customers.

The merger will have significant implications for Virgin’s pay-TV business. The two companies expect £6.2 billion worth of synergies as a result of the merger, and say they will invest £10 billion over the next five years, creating a “fully converged platform”. The deal would give scope to offer pay-TV and broadband packages to O2’s customer base. The two will also combine their mobile businesses to better compete with BT, which owns Britain’s largest mobile network EE.

“Combining O2’s number one mobile business with Virgin Media’s superfast broadband network and entertainment services will be a game-changer in the U.K., at a time when demand for connectivity has never been greater or more critical,” said Telefonica CEO Jose Maria Alvarez-Pallete. “We are creating a strong competitor with significant scale and financial strength to invest in UK digital infrastructure and give millions of consumer, business and public sector customers more choice and value. This is a proud and exciting moment for our organisations, as we create a leading integrated communications provider in the U.K.”

Facebook Warned it Could Lose MRC Accreditation
Facebook has been warned it could lose accreditation from the Media Ratings Council, an influential industry measurement body. MRC accreditation is designed to give buyers confidence that they can trust ad metrics reported by sellers and ad tech intermediaries. The MRC said in a letter to Facebook seen by the Wall Street Journal that the social media giant has not sufficiently addressed concerns which arose in 2016, when it emerged that Facebook’s video metrics had been inflated. Facebook was audited by Ernst & Young in 2019 in relation to this inflation of metrics, and the MRC says its been less than impressed with Facebook’s response.

“The Committee felt strongly that the lack of response and detailed action plans by Facebook within 60 days would lead them to take negative action,” the letter says. “This feedback should be considered a strong message to Facebook.” If the MRC decides to withdraw accreditation, this could extend to Facebook’s measurement of display advertising, as well as video advertising.

Roku Launches New ‘OneView’ Ad Platform
Roku this week announced the launch of ‘OneView’ ad platform, which combines Roku’s inventory and data tools with dataxu, the demand-side platform it bought last November. Roku says advertisers will be able to use data from Roku’s direct customer relationships, its streaming data, and automatic content recognition (ACR) data to buy inventory and plan campaigns across Roku and its partners. Roku also says it will guarantee demographic delivery or business outcomes such as website visits or mobile app downloads.

“Our goal is to help advertisers and content partners invest for a world where all TV is streamed,” said Scott Rosenberg, SVP and general manager of platform business at Roku. “OneView provides the data and scale across the entire TV landscape so marketers can plan, buy and measure TV advertising and ultimately shift spend to streaming more quickly.”

Coronavirus News

ITV Reports 42 Percent Drop in April Ad Revenues
UK broadcaster ITV reported in its Q1 results this week that ad revenues were down 42 percent year-on-year in April, demonstrating the extent of COVID-19’s impact. Back at the start of March, ITV had forecast just a ten percent drop in ad revenues, though that was prior to the UK government announcing the national lockdown. ITV says it is furloughing 800 staff to help cope with the financial burden.

Omnicom Plans for Offices Reopening
Omnicom CEO John Wren sent an internal memo this week outlining how the holding group plans to transition back to working from offices, as US states begin to loosen their lockdown rules, Adweek reported this week. Omnicom will maintain its work from home policy until May 15th, though Wren said employees won’t be rushed back into offices as soon as governments allow them to do so, with offices reopening in a phased manner to ensure social distancing can be maintained.

Agency New Business Drops 30 Percent in Q1
New business was down by 30 percent in Q1, according to figures from R3 Worldwide. “This decline won’t get any better through Q2 as more and more marketers delay, defer and de-prioritise activities, including agency reviews,” Greg Paull, principal at R3, told Campaign. “The message to agencies is clear – hunker down for an annus horribilis.”

AMC Networks Predicts 30 Percent Drop in Q2 Ad Revenues
US TV network AMC Networks is forecasting a thirty percent drop in its Q2 ad revenues, with production stalled and ad budgets cut. But the lockdown is also driving higher subscriptions for its paid services – it expects to reach 3.5-4 million subscribers across its four paid streaming services by the end of 2020, two years ahead of its target.

Disney Reports “Significant” Decline in Ad Revenues
Disney said it’s seen a “significant” drop in ad revenues as a result of the pandemic in its Q1 financial results this week, though the media giant didn’t break out exactly how hard ad sales have been hit. CFO Christine McCarthy said that Disney-owned sports broadcaster ESPN has been hardest hit thanks to the cancellation and postponement of live sports.

Three Quarters of Consumers Want Advertisers to Address COVID-19
Three-quarters of UK-consumers think that advertisers should address the COVID-19 pandemic in their ad campaigns, according to research from FreeWheel. FreeWheel’s study also found that 58 percent of consumers want to see ads which make them laugh during the lockdown.

FreeWheel Study

NBCUniversal Cuts Senior Management Pay by 20 Percent
NBCUniversal has cut pay for its senior management team by 20 percent, and is reducing pay for employees earning over $100,000 by three percent, as a COVID-19 related cost-cutting measure. The news came shortly after the announcement that NBCUniversal is restructuring its operations, with streaming service Peacock integrated more closely into its linear TV business.

Small Minority of Consumers Report They’re Less Likely to Engage With Ads Next to COVID-19 Content
A very small minority of consumers say that they’re less likely to engage with ads which appear next to coronavirus-related content, according to research from Integral Ad Science. In the UK, 17 percent of consumers say they’re not likely to engage with an ad next to COVID-19 content, compared with 21 percent in France, 13 Percent in Germany, and nine percent in Italy.

IAS Content

Sky Launches £1 Million AdSmart Support Scheme for SMEs
Sky Media has launched a £1 million support scheme for small businesses, offering them addressable TV ad campaigns via its AdSmart tech. Businesses can nominate themselves or be put forward by their customers, with Sky donating ad space to 100 businesses.

Production Trade Group Issues COVID-19 Guidelines
The Association of Independent Commercial Producers (AICP) has released guidelines for commercial production as US authorities begin to relax lockdown restrictions. The guidelines give advice on how production companies can best function while still maintaining worker safety and adhering to government restrictions.

ePremierLeague Draws Over 150 Million Video Views
The English Premier League’s inaugural ePremierLeague, an esports invitational launched while the regular season has been on hold, drew over 150 million total video views according to Nielsen Sports. The tournament saw the 20 Premier League clubs represented by players and other celebrities competing in a knock-out format. The final reached three million views on the Premier League’s official Facebook account, and 394,000 views on YouTube.

The Week in Tech

IAB Europe Release ‘Guide to the Post Third-Party Cookie Era’
Trade association IAB Europe on Thursday released its ‘Guide to the Post-Third-Party Cookie Era’, to prepare brands, agencies, publishers and tech intermediaries for the much-anticipated post-third-party cookie advertising ecosystem. The guide, which has been developed by experts from IAB Europe’s Programmatic Trading Committee, aims to provide level-setting background into the current use of digital advertising cookies, the contributing factors to their depletion and an overview of the alternative solutions that are currently available.

Verve, PubNative and Applift Combine to Become Verve Group
Media and Games Invest have combine three of their acquisitions Verve, PubNative and Applift into Verve Group, ExchangeWire reported this week. The three will combine their tech into one unified platform, which will be positioned as a “data-first brand performance ad platform”.

Rubicon Project Lays Off Eight Percent of Staff
Rubicon Project this week announced it is laying off eight percent of its staff, following its merger with fellow supply-side ad tech company Telaria. The move is partly related to the pandemic, but also part of a general post-merger cost savings exercise.

Verizon Media Brings Native Marketplace into its DSP
This week Verizon Media announced the launch of its expanded DSP, which it says brings programmatic, premium and its full native marketplace inventory, formats, targeting and measurement together in a single platform. “Given the current climate, brands want simplicity, flexibility and performance,” said Iván Markman, chief business officer at Verizon Media. “Our expanded DSP is purpose-built for that landscape.”

Innovid Finds Video Returning to Growth
Global video ad impressions are returning to growth, according to Innovid, having seen a four week decline in year-on-year volume between March 29 – April 25. For the week of April 26 – May 2nd, global video volume grew two percent year-on-year.

The Week in TV

French Watchdog Rejects Molotov’s Salto Complaint
French watchdog the Autorité de la Concurrence has rejected a complaint from OTT platform Molotov against Salto, an upcoming streaming service set to be released by French broadcasters TF1, M6 and France Télévisions. Molotov has complained that M6 and TF1 have abused their market positions to freeze it out as a distributor of their channels, opting for Salto instead. But the watchdog said it found no evidence that TF1 and M6 are colluding to try to force Molotov out of the market.

Verizon to Bundle ViacomCBS’s PlutoTV
ViacomCBS and Verizon have agreed a deal for the latter to offer the former’s ad-supported streaming service PlutoTV in its wireless, video and broadband bundles. Verizon will market PlutoTV to its customers and integrate it into its connected-TV service Stream TV, according to Next TV.

FuboTV Revenues Grew 96 Percent in 2019
Streaming service FuboTV saw its revenues rise 96 percent across 2019, reaching $146.5 million for the whole year. Meanwhile its user base grew 37 percent, hitting nearly 316 million paid subscribers. But the sports specialist service forecast tougher times ahead due to the lack of live sports.

Elliot Management Backs Quibi’s Legal Challenge
Activist investor group Elliot Management is backing tech company Eko in its lawsuit against mobile-first streaming service Quibi. Eko claims that Quibi’s turnstile function, which adapts video content to fit a mobile screen whichever way it’s oriented, infringes on its own intellectual property.

European Commission Approves NENT/Telenor Pay-TV Merger
The European Commission has given the go ahead to the merger of Nordic Entertainment Group (NENT) and Telenor’s pay-TV operations Viasat Consumer and Canal Digital. The merger was subsequently completed, with the new combined company named ‘Allente’.

A+E Streaming Services Launch on Apple TV in Europe
US network A+E is launching its streaming services History Play and Crime+Investigation Play in select European markets on Apple TV. Both are available in the UK, Ireland, Germany and Austria for £3.99/€3.99 per month.

Streaming Up by Nearly 60 Percent in Q1 finds Conviva
Overall streaming consumption was up by 57 percent in Q1 according to Conviva’s State of Streaming report, with consumers tuning in more during the lockdown, according to Digital TV Europe. Europe saw the highest increased, with streaming up 70 percent.

The Week in Publishing

YouTube Plans to Let Publishers Sell Subscriptions Through Their Channels
YouTube is planning to let publishers sell subscriptions to their digital properties via their YouTube channels, according to a report from Digiday this week. YouTube expects to test the tool by the end of the year, though it still needs to work out what cut of subscriptions it would take, and how much subscriber data it would share with publishers.

Twitter to Ask Users to Watch Their Language
Twitter is testing new tools which will ask users to rethink their posts if they use potentially harmful language, the company announced this week via its Twitter Support account. Twitter users will be given the option to revise their Tweet before posting, thought Twitter hasn’t stated which exact words will be flagged by the tool.

Bloomberg Rolls Out New ‘Storythread’ Feature
Bloomberg Media is rolling out a new feature for users who reach the site via search results called ‘Storythread’, according to Adweek. Storythreads appear as a ‘welcome mat’ when users arrive on the site, catching them up on a particular story with a summary, and giving them an option to continue following the story by email as it develops. Bloomberg also plans to sell exclusive sponsorships on Storythreads, according to Adweek.

Pinterest’s Revenues Grow, But So Do its Losses
Pinterest reported total revenues were up 35 percent year-on-year in Q1, reaching $272 million. But losses reached $141 million, up 241 percent from the previous year, and the social platform warned that ad revenues would be hit throughout the rest of the year as a result of the pandemic.

PewDiePie Signs Exclusive Streaming Contract with YouTube
YouTube star PewDiePie has signed a deal with YouTube which will see him exclusively live stream via YouTube Live. PewDiePie made his name on YouTube and is arguably its biggest star, as its most subscribed individual creator. But he previously had been signed to stream exclusively on rival live streaming platform Dlive.

The Week for Agencies

A Third of Programmatic Supply Chain Costs End Up in Unknown Hands finds ISBA Study
Fifty-one percent of programmatic ad spend in the UK ends up in publishers’ pockets, with the rest being swallowed up by agency and tech fees, according to advertiser trade body ISBA’s ‘ Programmatic Supply Chain Transparency Study’, released this week. And out of the remaining 49 percent of programmatic ad spend, fifteen percent couldn’t be attributed to any specific part of the supply chain. Read the full story on VAN.

IPG Launches Addressable Advertising Specialist Matterkind
Holding company Interpublic Group this week announced the launch of Matterkind, an addressable advertising specialist which replaces Cadreon. “We are now able to address consumers across touch points where they are consuming content, when and where they will take action associated with the buying of clients’ products and services,” said Erica Schmidt, CEO of the new unit.

The Beyond Collective Launches 87Social
The Beyond Collective, a network of specialist agencies, launched its new social media agency 87Social this week. “The changing relationship between brands and their audiences is accelerating faster than ever, with more clients looking to social media to help ensure their brands stay relevant,” said group CEO Zaid Al-Zaidy. “There’s never been a more important time to ensure that a brand’s presence on social media is strategically grounded, creatively exciting and underpinned with the smartest media thinking.”

Clorox Consolidates Media Account with OMD
Cleaning brand Clorox is consolidating its $500 million US media planning and buying account with Omnicom’s OMD. Clorox’s digital media account, which accounts for over half of the brand’s media buying, had previously been handled by WPP’s AKQA according to AdAge.

Hires of the Week

Almar Latour Named CEO of Dow Jones
News Corp this week announced that Almar Latour has been chosen as the new CEO of Dow Jones, publisher of the Wall Street Journal.

Dugout appoints Jamie Wilson as Chief Commercial Adviser
Dugout this week announced the sports and media consultancy The Value Xchange has been appointed to oversee Dugout’s global commercial strategy working closely alongside the platform’s club, publishing and advertising partners. Jamie Wilson, a director of The Value Xchange, is acting as Chief Commercial Adviser for Dugout, based in London.

eBar Picks Harmony Murphy to Lead UK Ad Sales
eBay Advertising has chosen Harmony Murphy as its new UK head of advertising sales. Murphy joins from The Telegraph, where she was global head of digital and programmatic.

This Week on VAN

Virtual Events Could Makes Game Streamers the Richest Entertainers on the Planet, read more on VAN

Introducing the VideoWeek Podcast: #1, Keith Weed, Advertising Association, read more on VAN

A Third of Programmatic Supply Chain Costs End Up in Unknown Hands finds ISBA Study, read more on VAN

Ad of the Week

Cadbury, This Doesn’t Have to End, VCCP


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