What next for the media industry? 2018 revealed
Illustration by Natasha Searston
In the first of two specials, a host of experts review what has been turbulent year for adland – and offer their predictions for 2018
Unprecedented collaboration
John Litster, managing director, Sky Media
I’m hopeful that 2018 will continue the swing-back to TV we’re currently witnessing. Brands and agencies will return to mediums that help to tell meaningful stories and build trust.
This trend will encourage brands to demand more integrated solutions. With improved data and greater understanding from companies like Sky and trusted bodies like BARB, TV will continue to offer advertisers the opportunity to follow audiences across platforms and change their messaging according to the environment.
This will spark an uplift in media owners and clients working more closely together – creating multifaceted campaigns which open up content, talent and product integration opportunities and deliver longer-lasting, more rewarding outcomes.
2018 will be an unprecedented year of collaboration across the TV industry itself – this is typified by our decision to host The Big TV Festival together with ITV and Channel 4 in February. The time is right for the TV industry to shout about what makes us great.
Finally, I see addressable TV as a movement picking up speed with other players joining in. Addressable products such as Sky AdSmart will continue to expand over the next year, and become more powerful, allowing brands big and small to connect with their ideal audience like never before.
Can media agencies bounce back?
Brian Jacobs, founder, BJ&A
As the room-service waiter said to George Best when he brought him champagne, only to find him in bed with Miss World: “Where did it all go so wrong, George?”
The media agency arms of the major holding companies have for years contributed the lion’s share of their parents’ profit. They’ve focussed on bolstering client revenues with funds from vendors, be they media owners or adtech businesses.
In 2016 the ANA investigation, and criticisms from the WFA, Procter and Gamble and ISBA made the wheels wobble. In 2017 the wheels came flying off. Media agency margins reduced; holding company revenues suffered; share prices stalled.
Can the major media agencies bounce back in 2018? Yes, of course they can. They need to cast aside the allures of murky revenues from trading and look to bring their planning skills to the fore. Make the case for being paid for excellence. Be transparent in actions, not just contractual words.
For many years the industry has looked to the likes of GroupM and OMG for leadership. With the7stars and Goodstuff admired by all as Agency of the Year it’s time for the major networks to learn lessons from their independent rivals.
If you think you are well prepared, then think again
Matthew Bloxham, senior analyst, EMEA telecom and media research, Bloomberg Intelligence
After a challenging 2017 for the traditional media industries – TV, print, ad agencies – it might be tempting to look ahead into 2018 and breathe a collective sigh of relief. The UK economy seems to be in relatively good shape with my colleagues in Bloomberg Economics forecasting sequential quarterly growth in GDP to hold steady at about 0.4%. Major sporting events like the Olympics and the World Cup should also provide a short term boost marketing budgets.
But this is not the time for complacency. Quite the opposite. If you think you are well prepared for the structural challenges that lie ahead, then think again. Challenge yourself to work harder, smarter and faster on your business transformation over the next 12 months. Investors are generously rewarding those companies that are ahead of the digital curve and heavily punishing those that are lagging behind.
TV will almost certainly be the must watch sector over the coming year”
Digital is now the largest and still fastest growing media platform in the UK, accounting for 54% of total UK advertising spend in 1H 2017 according to the figures published in the latest Advertising Association/WARC Expenditure Report.
But given the rate of technology adoption amongst UK consumers – smartphone penetration has now hit 85% of the adult population according to figures from Deloitte – there is every chance that the pace of growth in spending on digital advertising could accelerate again in 2018.
So far, digital has helped to grow the size of the total advertising spending pie, but 2018 could be the year many marketing budget holders start to arrive at some more definitive conclusions about whether they are spending too much across too many platforms.
TV will almost certainly be the must watch sector over the coming year. Radical changes taking place in the US content landscape will inevitably reverberate this side of the pond.
Whether Sky ends up being controlled by Fox, Disney or somebody else, its influence as a major broadcaster and content producer is likely to grow. ITV’s new CEO has the daunting task of re-shape the broadcaster’s future in the face of content-producing competitors with much larger scale and budgets. BT might need to re-think its role as a disruptive challenger if Amazon or Netflix push into live broadcasting through the upcoming auction of Premier League football rights.
Bold marketers
Jane Ostler, managing director of media and digital, Kantar Millward Brown
One thing we can all predict with certainty is that 2018 is poised to be another busy year for marketers. In particular they will have to handle continued evolutions in communication approaches, media targeting technology and ROI measurement.
The way that brands need to communicate with people, as opposed to target audiences, will continue to evolve away from the more standard paid media channels. There will be ongoing opportunities to embrace new storytelling opportunities, look to entertain through longer form content, and start experimenting with voice-activated marketing. Bold marketers will reap the rewards, but also face new measurement challenges.
Media targeting will continue to improve thanks to improved validation of audiences within the walled gardens. This combined with new machine-learning technology, will enable smart outcome-based decisions. The success of OTT streaming content platforms will create new places to target customers as they watch video, ushering in a new era of TV and cross-platform media measurement opportunities.
Finally, smart marketers will spend more time trying to gain an integrated view of the overall mix, including digital. To do this they will modify measurement and optimisation approaches so that ROI becomes more of a journey, and less of a destination.
The chance to make a difference
Jodie Stranger, CEO UK group and president global clients EMEA, Starcom
Reflecting back on the last 12 months, we continued to see revolutionary behaviour and attitudes, as demonstrated by the General Election’s hung parliament back in June. Voice tech continued to get even more exciting, as voice recognition improved from 95-99%. The ecommerce world also continued to grow, resulting in exploding consumer choice and pressure on brands to keep up with consumers’ growing expectations.
And while this year wasn’t quite Virtual Reality’s year, examples of it being used well are definitely increasing. Overall, as we look back at 2017, we can see that sectors are evolving, merging and adapting at an unprecedented speed. The fourth Industrial Revolution certainly seems to be upon us.
As we look forward to the year ahead, artificial Intelligence, Brexit, rising consumer power and expectations all bring uncertainty, but also huge possibilities for brands to step up and make a difference. 2018 will be a fundamental transitional year as the UK edges towards leaving the EU and experiments with new systems and solutions, and brands must engage to succeed.
The overarching theme for us next year is all about ‘control’ and we have explored trends including the polarisation of people, the limitations of labels in society, people’s waning trust in the establishment as well as the anti-distraction movement (i.e. people regulating how much time they spend on their digital devices).
These trends reflect consumers’ desire to reclaim control of their data, their digital consumption and even their sense of identity. This control extends to how consumers design the shape of the world around them. We believe it is more important than ever for brands to understand what people need and want and the consumer tensions in this new world.
Reversing the trust deficit
Andy Pearch, co-founder, Media Sense
2017 ended with a moment of great irony when YouTube announced it is to employ thousands of human moderators in an attempt to make its environment more brand-safe.
The world’s most AI-driven company has admitted that machines alone cannot make judgements and now increasingly resembles the traditional agencies it disintermediates.
Never have there been more questions surrounding the business model of the big media networks. It is likely that in 2018 we will see an upsurge in brands going to market to reshape their media requirements and customer-centricity not transparency is the key driver, requiring organisations to put data at the heart of their marketing operations.
As a result, media strategy and data analytics are being pulled back into marketing departments, further reducing media agency scope.
We believe GDPR will be another change driver, improving standards and governance within the digital supply chain. As organisations rebuild their products in a privacy-compliant way, the legacy working practices of many digital technology companies will be exposed and hopefully curtailed.
As brands take more control of customer data and measure the direct impact marketing has on customer response, they will become more capable of assessing for themselves the true value of their media inventory. More “premium” inventory will be exposed as massively over-priced and ineffective inventory will be discarded, making the media supply chain more effective.
2017 can be characterised by the trust deficit undermining our industry, we hope that in 2018 we can make progress on directly addressing the areas that can restore its professional credibility.
The future for media research
Richard Marks, director, Research the Media
Next spring will see the long-awaited integration of broadcaster catch-up and VOD outside the TV set into the official UK TV ratings via BARB’s Dovetail system. Whilst there will be some positive effect on certain programmes and younger demographics, the impact on overall television viewing hours will be negligible and it will not reverse the slow long-term decline in the total volume of broadcast-related viewing.
In the last few years, thanks to the stellar efforts of the trade bodies we have moved on from the “TV/ radio/newsbrands/magazines are dead” narrative. However, despite the imminent arrival of Dovetail and on-going initiatives on other industry currencies, the tiresome “measurement is broken” mantra still hangs around past its sell-by date.
Audience measurement is about people not devices or households. Advertisers and agencies talk about the need for ‘impact based’ measurement, but the importance of advertising to TV, for example, will continue to dwindle as revenue directly from the content itself increases.
The currencies need to balance the needs of all their stakeholders, not just advertisers and agencies. In the longer term, I do wonder whether advertising measurement and content measurement may have to go their different ways as their common objectives diminish.
A more transparent approach to data
Dan Larden, global strategic partnerships director, Infectious Media
Media transparency dominated 2017, with the industry beginning to demand greater clarity on how media is sourced, who it goes through, the fees involved, and whether these are hidden or transparent.
In 2018, people will start to ask the same questions of data. A recent Forrester report found 85% of marketers lack visibility into data used to define audiences, which means they can’t be confident about the source of data or how reliable it is when buying audience segments via a DSP.
There’s currently very little clarity on who is in the supply chain and the margin they are taking”
Forrester’s report also shows there’s a hefty financial incentive for advertisers to begin demanding this transparency, revealing that $10.9bn will be wasted on low- or no-quality display ads if data quality and transparency issues aren’t addressed.
It’s not just a lack of transparency into where the data comes from. There’s currently very little clarity on who is in the supply chain and the margin they are taking. With DSPs, for instance, their stated margin on data has been known to be dramatically contradicted by their own financial accounts.
Transparency will become key from a consumer perspective as well. As the year that GDPR becomes enforceable, 2018 will require brands to become more transparent over how they use consumer data and offer the kind of advertising experiences that will make consumers more willing to share it in the first place.
A more transparent approach to data can restore trust between brands, agencies and consumers and will secure the health of digital advertising in 2018.
Out-of-home evolves
Mungo Knott, director of insight and innovation, Primesight
2017 has been a fascinating year for the OOH industry. We’ve seen traditional phone boxes replaced with digital InLinkUK units that have created a new advertising opportunity for brands and there has been a greater focus on experiential marketing with Exterion Live.
The changes we have seen this year epitomise the transformation which we are seeing in our street scenes. The OOH experience is evolving as more digital advertising displays are incorporated into the fabric of our community space across stations, airports, retail and roadside infrastructure.
Out of home has traditionally been the backdrop to our changing culture, as the images on billboards reflect the building of brands and offer the public enhanced lifestyle or satisfaction. The seismic shift in ad revenue to the internet and mobile has challenged all traditional media channels but OOH has met this challenge by blending its power as a medium of physical presence with the flexibility of screen delivered advertising.
Heading into 2018 the clear projection is that DOOH will take 50% of all OOH advertising in the year as more DOOH comes on stream, continuing to make it contemporary and relevant.
The challenge for 2018 is to improve accessibility because operating in technology silos is no longer an option and greater flexibility in scheduling is a challenge which must be met. The out of home industry has been building the groundwork for standards which will enable the long anticipated true trading and ad-serving connectivity between seller and buyer.
2018 will be the year these connections are firmly established and the industry will be well positioned to continue to make an impression on audiences across the country.
A.I. as standard
Peter Day, director of engineering, Quantcast
Artificial intelligence (AI) has increasingly dominated the news agenda in 2017. With research from Deloitte showing that 85 percent of UK businesses plan to invest in AI by 2020, it’s clear that firms across the board are waking up to its benefits.
At Quantcast, we’ve spent more than a decade building the right team, expertise and structure to apply machine learning to the advertising space. We’ve seen more and more brands implement AI in digital advertising. For those that do it well, the results are evident in more relevant, targeted and measurable campaigns.
However, there are still questions over how the technology will impact creative roles and skills in the long term. Many are worried that it will kill off jobs in the sector, and others argue that technology cannot mimic true, authentic human creativity. This last point is true. However, when AI is used in the right way, agency teams will find themselves freed up from the small, repetitive tasks like adjusting campaign targeting and able to invest more time in driving creativity and innovation for clients.
AI is still a new field, but the next 12 months will see it become the new standard in digital advertising, making 2018 a make-or-break year for brands. Those that don’t adapt will quickly be forgotten.
Event: The Year Ahead 2018
The Year Ahead is our very popular afternoon invite-only networking event for senior professionals from across the media industry, which sees panellists give their views on key media issues from the year, and their predictions for the year ahead.
Tess Alps is back to join Ray Snoddy and Torin Douglas, with Lindsay Pattison joining the panel this year. They’ll share their thoughts on 2017 and a few predictions for 2018, in answer to questions posed by you.