Articles by: "Rande Price, Research VP – DCN"

Entertainment and media revenues continue to grow

June 15, 2016 Rande Price, Research VP – DCN

The media environment still presents numerous growth opportunities despite the competitive marketplace and the struggle for consumer attention. Importantly, PwC’s Annual Global Entertainment and Media Outlook Report projects the U.S. media and entertainment revenue will increase and account for $632 billion, or 29.4% of the worldwide total of over $2.1 trillion. Further, the entertainment and media revenues are expected to grow at a compound rate (CAGR) of 4.4% from $1.7 trillion in 2015 to $2.1 trillion in 2020. In order to provide this forecast for 2016 to 2020, PwC analyzed historical and projection data for advertising and consumer spending in 13 major industry segments across 54 countries.

U.S. highlights:

Internet advertising in the U.S. continues as the largest market in internet advertising revenue, projected to grow from $59.6 billion in 2015 to $93.5 billion by 2020 with a 9.4% CAGR. Important to note, internet advertising ($75.3 billion) is expected to surpass broadcast TV advertising ($70.4 billion) in 2017.
Mobile has been a key driver of digital advertising revenue comprising 34.7% or $20.7 billion in 2015 of U.S. total internet revenue. PwC projects mobile video advertising revenue will grow from $3.5 billion in 2015 to $13.3 billion in 2020 for an increase of 30.3% CAGR.
Video on Demand (VOD) and over-the-top services (OTT) will drive TV and video revenue from $121.4 billion to $124.2 billion in 2020 (0.5% CAGR). In addition, TV advertising revenue is expected to rise from $69.9 billion to $81.7 billion in 2020 (3.2%CAGR).
Continued declines are anticipated for newspaper publishing, declines of 2.9% CAGR by 2020. Further publisher consolidations are expected. As well, magazine publishing revenue is not expected to decline but register a fractional increase, from $30.5 billion in 2015 to $30.7 billion in 2020. In addition, radio is predicted to increase from $21.4 billion to $23.1 billion in 2020 (1.6% CAGR).

Virtual reality devices and games will be the impetus for rising video games revenue from $17.0 billion to $20.3 billion by 2020 (3.6% CAGR). Virtual reality devices and games will be the impetus for rising video games revenue from $17.0 billion to $20.3 billion by 2020 (3.6% CAGR).

Overall, PwC projects that consumers will look for less expensive content bundles, streaming offers and less commercial interruptions. As a result, consumers’ share of time for ad-supported media will not increase. For advertisers and content providers, this means a detailed examination of the consumer experience to identify drivers of engagement and understand their impact on time spent and their influence on advertising effectiveness.

Industry-Research

Automated detection improves privacy practices

June 8, 2016 Rande Price, Research VP – DCN

A consistent routine of privacy detection, measurement and practice allows websites and services to improve their privacy practices. Privacy measurement is specifically used to find out what user data companies collect, how they collect it, and what they do with it.

OpenWPM is an effective privacy measurement tool developed by Steven Englehard and Arvind Narayanan at Princeton University, who recently published a study, “Online tracking: A 1-million-site measurement and analysis.” Their tool provides an opportunity for web privacy measurement to be a more common place practice. OpenWPM collects large-scale data for simulating users, detects and classifies trackers. This automated process is designed to improve the effectiveness of browser privacy tools by efficiently updating the tracking-protection lists.

What exactly is web tracking and why is it a problem? As consumers browse different websites, they are often monitored by “first parties,” which are the sites themselves. However, they are also observed by “third parties” which are very often ad networks embedded on the web page. Third parties capture consumer browsing history through cookies to uniquely identify the user. Often third parties obtain data such as email address or user characteristics without the consumers’ awareness or permission. Interestingly, cookie syncing is also a tracking practice that allows different trackers to share user identifiers with one another.

While hard to detect, cookie syncing is transferred server-to-server by sending the ID in the request URL or in the referer URL. DoubleClick net is one of the most active in cookie syncing and shares 108 different cookies with 118 other third parties (this includes both events where it is a referer and where it is a receiver).

As Englehard and Narayanan wrote in their introduction:

Web privacy measurement — observing websites and services to detect, characterize and quantify privacy-impacting behaviors — has repeatedly forced companies to improve their privacy practices due to public pressure, press coverage, and regulatory action. On the other hand, web privacy measurement presents formidable engineering and methodological challenges. In the absence of a generic tool, it has been largely confined to a niche community of researchers.

In the course of their online tracking study, OpenWPM determined that of the top one million sites there are 81,000 third parties. Interestingly of 81,000 present, only 123 are on more than 1% of sites. In fact, the top five third parties are Google-owned domains. News sites had the most third party tracking in terms of content categories across websites.

Overall, web privacy measurement has three parts: simulating users, recording observations and analysis. The difference in OpenWPM is that it automates the first two parts of this process. It also uses 15 measurements on each site it assesses, such as stateful (cookie-based) and stateless (fingerprinting-based) tracking and multiple fingerprinting techniques.

The automated process of creating tracking-protection lists is a key benefit of OpenWPM. Its ability to scale data, detect and catalog trackers is the holy grail. As well offering a web-based analysis platform provides ease and availability to those with limited technological ability.

Industry-Research

Seven steps you can take to manage the risk of ad blocking

June 1, 2016 Rande Price, Research VP – DCN

Publishers, platforms, and industry groups gathered together last month for the third time to discuss the continued threat of ad blocking. Attendees included ESPN, the Guardian and Google to name a few. The meeting was organized by Johnny Ryan, the head of ecosystem at PageFair, a company that builds technology to by-pass ad blocking, and Jason Kint, CEO of Digital Content Next, an industry trade association for quality digital content companies. Though the meeting was private, the participants agreed to share the seven takeaways to best deal with the risk of ad blocking

On the blocked web, the user must have immediate tools to reject and to complain about advertising. There needs to be a set of tools and choices for consumers to provide feedback to advertisers especially offering feedback in real-time to address a particular problem or concern with advertising.
Rather than restore all ads on the blocked web, only a limited number of premium advertising slots should be restored. This will make a better impact for brands, clean up the user experience, and incentivize better creative. Publishers need to offer few and better ads. In doing so they will provide the consumer with a better online experience.
The blocked web may provide the opportunity to establish a new form of above-the-line advertising. Advertising must be less intrusive and complement the consumer’s digital experience, not disrupt it.
Contextual targeting can be used on the blocked web to establish ad relevance if other forms of tracking are not practical or desirable.
On the blocked web, where third-party tracking is largely blocked, publishers can create new value by engaging with their users to elicit volunteered data. Publishers should find alternative methods to obtain consumer details such as offering a valued exchange for personal information such as customized content, newsletters and/or exclusive promotions.
Measuring advertising success on the blocked web with broader top-of-funnel metrics may incentivize buyers to focus on value rather than cheapness. Importantly, publishers must work with marketers to ensure they recognize the value of engaged consumers and trusted publishers. Introducing new measurements such as an attention metrics, will further advance digital media advertising effectiveness.
On the web as a whole, there should be a maximum page load time standard that publishers and advertisers both commit to. The digital media experience should be a positive consumer experience.

The seven recommendations identify the most effective ways to improve the consumer experience on publisher sites and thwart the adoption of ad blocking. Further, communicating to consumers on changes and new implementations will be key to rebuilding their trust for a restored and stronger relationship with publishers.

Industry-Research

Attention is a valuable audience attribute

May 25, 2016 Rande Price, Research VP – DCN

Since the beginning of broadcast television, exposure was the currency of audience measurement. Gradually audience metrics evolved from tuning behavior, to program selection, to page views, to viewable impressions. Interestingly, none of these measures capture the audience’s engagement with media or the advertising. Today’s media companies collect or count on third parties for an abundance of measurement data including page views, expressions of liking and sharing to quantify audience attributes of value to advertisers but again none quantify the audience’s attention.

Jacob L. Nelson and James G. Webster of the International Journal on Media Management at Northwestern University recognized the need to further evolve media measurement. They designed a research study to analyze the relationship between the amount of time visitors spend on sites, news sites in particular, and the number of unique visitors the sites receive.

They used comScore data to analyze 887 news websites in their study “Audience Currencies in the Age of Big Data.” Through then analysis of this data which measured an individual’s time spent on a news site and the average number of minutes spent on a specific page, Nelson and Webster found that these two variables most accurately represented an individual’s level of engagement. In further probing, they also found no significant correlation between the number users a site reaches and the amount of time visitors spend on that site. In other words, the number of visitors to a site does not necessarily correlate to the level of engagement. In fact, unique visitors and attention measures are very different measurements, one identifies the quantify of visitors and the other the quality of visits (engagement).

While publishers and advertisers have begun to adopt an attention based metric, there is still research to be conducted. Specifically, for advertisers, confirming the value and predictability of the halo effect of user engagement on ad recall and effectiveness. In programmatic buying, advertisers need further qualification of a time based audience especially since heavy users are often the easiest for advertisers to reach (and cheaper too). Further, time based metrics should not be a measure of consumption where gimmicks ensure long visits that stimulate engagement. Attention metrics must ensure creative methods to monitor user activity and interest to protect against gaming of this measurement. Being that attention is a core requisite for retention, both publishers and advertiser stand to benefit using it as a media based currency.

Industry-Research

Mobile is powerful platform for long-form content

May 18, 2016 Rande Price, Research VP – DCN

Consumers are willing to engage with longer content on their phones. A recent Pew Research study conducted in association with the James L. Knight Foundation and Parse.ly, a web analytics company, found that consumers spend almost twice as much time with long-form stories (i.e., news stories over 1,000 words) on mobile devices than short ones (123 seconds compared with 57). In fact, longer stories attract readers at about the same rate as shorter stories. While a 123 seconds or just over two minutes may not seem so long, it’s longer than most consumers spend with local television news stories. Importantly, the higher word count appears to directly correlate to increased consumer engagement.

However, consumption of content, short and/or long can vary based on how the reader came to the article, the time of day, and even by the topic covered.

Consumers spend the most time with content in the late night and morning. In late night, consumers spend on average 128 seconds on long-form content and 60 seconds or less on short-form. In the morning, consumers spent 126 seconds long-form and 59 seconds on short-form content.
Time spent with long-form content also varies based on how consumers access the content whether it be via a link from an external website, social media, search, etc. Time spent with long form articles based on entry points appear in ranked order: access via an internal link averaged 148 seconds, visit an article directly or follow an email link averaged 132 seconds, arrive from external website averaged 125 seconds, search averaged 110 seconds and social Media averaged 111 seconds (while lowest in time spent with long-form article, still accounted for greatest share of traffic).
Consumers accessing long-form via Twitter spend on average 133 seconds on content where as if they access via Facebook, they spend on average only 107 seconds. The same pattern follows with short-term content.
As one may expect news articles, both short and long, have a brief life span. Eight in 10 consumers interact with short form articles within the first two days of publication and 72% interact with long-form within the first two days of publication.
Important to note, visitors to long-form articles (28%) are somewhat more likely to view multiple articles on a site than visitors to short-form articles (22%). However, long-form reading does not necessarily develop site loyalty.
The research further identified the most popular long-form content on cellphones. Consumers read long stories on crime, foreign policy and government and entertainment and were also more engaged as the story lengthened.

Content on mobile does not need to limit itself to short-form. Mobile offers publishers a strong outlet for long-form content allowing for more sources, more points of view and additional context.

DCN-Research

2016 DCN content distribution impact research

May 12, 2016 Rande Price, Research VP – DCN

The 2016 DCN Content Distribution Impact Research report – the first comprehensive examination of content distribution’s impact on premium publisher’s brand websites across content type — examines the current market for content distribution, consumer motivations for interactions with various platforms and the impact on engagement with premium publishers’ brand sites.

Available to DCN members only, the research showed when known brands appear on the social platforms measured – Facebook, Twitter, Snapchat and Instagram – they saw a double-digit net increase in engagement. The research also showed Snapchat Discover currently has the greatest ability to drive longer engagement with premium brands (53% between 10 and 20 minutes) and 51% of respondents noted they’re more likely to engage with a brand that publishes on its Discover offering.

The research also found that nearly 75% of consumers access more information now that their favorite brands are on social media: Social is additive – respondents who plan on spending more time accessing information from brands on social media sources don’t plan to reduce their content consumption on brand sites and apps.

Additional findings from the report:

Usage – Current events and depth of information on brand sites/apps drive usage.
Impact – A majority of consumers are likely to visit a brand’s site or app after reading a story on a social media platform.
Engagement – Viral and personalized content are hidden drivers for engagement on premium websites.

Important Note: If you are a DCN publisher member, please be sure to log in or register to access this special members-only research, which will appear below this notice once you have logged in.

Industry-Research

Evaluating content distribution channels

May 4, 2016 Rande Price, Research VP – DCN

Publishers face unprecedented pressures in the mobile and social media dominated marketplace. In fact, according to eMarketer, mobile accounted for half of digital ad spending in the U.S. in 2015 and is suspected to reach 70% share of advertising by 2019, according to eMarketer. In response to publishers’ needs, the International News Media Association (INMA) released a report “Evaluating Distributed Content in the News Media Ecosystem” to help educate on the implementation strategies of distributed content.

As background, it’s important to note recent digital media announcements promoting content consumption on mobile and social media. Digital platforms are dominating users’ time and advertisers’ spending. Specific announcements include:

April 2016, Facebook opened Instant Articles to all publishers worldwide. IA is rich-media articles that open instantly within the Facebook mobile app instead of sending users away to a Web browser.
February 2016, Google launched Accelerated Mobile Pages (AMP), an open standard to speed up the mobile Web experience and Snapchat announced a new subscription option to publishers in its Discover section
Apple’s News app attracted 100-plus publishers.
October 2015, Twitter launched Moments, a magazine-like story format for curated streams of Tweets.

The INMA report identified different roles a publisher can choose to distribute their content on social platforms and classified them into three categories:

On-platform hosts: Facebook Instant Articles, Snapchat Discover, Twitter Moments.
Off-platform open standard: Google Accelerated Mobile Pages.
Off-platform aggregators: Apple News, Axel Springer Upday.

Publishers first need identify which category can support their business strategy. Specifically, is the publisher looking to build an audience (growth), to develop an exclusive consumer relationship (content marketing) or are they interested in experimentation on multiple goals (laboratory).

Social media strategies are vital a publisher’s digital business. It allows one to distributes content beyond its property and to grow its audience base.

Industry-Research | Perspectives

Brand activation marketing offers unified approach to target audience

April 27, 2016 Rande Price, Research VP – DCN

Over $595 billion dollars was spent on brand activation marketing in 2016. Brand activation refers to marketing that both builds a brand’s image and drives a specific consumer behavior or action.

PQ Media in partnership with the ANA conducted a comprehensive analysis of brand activation, an organized assessment of brand marketing, by platform, channel, and consumer segment. The research also projected that by 2020 activation spending will be over $740 billion outpacing advertising and trade promotion spending.

rand activation encompass focuses on six platforms that connect and interact with the consumer: promotion marketing, experiential marketing, retailer marketing, relationship marketing, content marketing, and influencer marketing. Each platform includes 32 different channels.

Interestingly, 60% of all overall marketing spend is placed on integrated traditional and digital strategies with relationship marketing as the largest brand activation marketing platforms used in 2015. Relationship marketing channels includes direct mail, catalogs, list management, database marketing, marketing information and big data analysis, email and search lead generation marketing, loyalty programs, mobile marketing apps and proximity services.

The study identified that consumer brand activation accounted for 59% of all B-to-C spending ($332B) while B-to-B spending accounted for 41% or $229B. Automotive is the largest industry vertical to spend on brand activation. Importantly successful brands are using a combination of brand activation methods to effectively target audiences.

Industry-Research

The Financial Times’ research shows speed matters

April 20, 2016 Rande Price, Research VP – DCN

The Financial Times recently conducted valuable research studies to understand how website speed influences consumer engagement and its overall impact on revenue.

Their first study was conducted among subscribers, selected at random, for a control group and a test group. The control group saw their website at normal speed and the test group saw the site with a five-second delay added to each page load. Important to note, the 5 second delay was in addition to FT’s normal load time. The first test showed a significant drop in engagement in the control group compared to the test group.

The Financial Times then conducted a second study but this time they segmented subscribers into four groups. There was a control group, the same as before with the website at the usual speed, the second group saw the website at 1 second delay in page load, the third group saw the website at 2 second delay and the third group saw the website at 3 second delay. As well, FT was able to look at these tests group by device (mobile, tablet, desktop) by historical subscriber level of engagement (high medium and low) and by time (day/month).

The analysis was based on session depth which identifies the number of pages a subscriber views during a visit. FT used session depth as their conversion rate and calculated the difference test groups. FT found that short visits had little to no impact across the test groups. However, for subscribers visiting more than three pages, there was a gradual decline in engagement across each test groups. In fact, over the testing period subscribers read fewer articles given the laps in loading each web page. Interestingly, the research also found that both very loyal subscribers as well as mobile users were more tolerant of site delays.

Importantly, the research suggests a strong correlation between a site’s speed and its impact on both sessions depth and the number of articles read. In other words, the slower the page loading time the greater the negative impact, regardless of how small the delay. In FT’s case, engagement directly impacts subscriptions so there is a clear correlation to revenue. Further since FT sells based on page views and time spent with each advertisement, the more time spent on the site the greater impact on advertising revenues

Complete article: http://engineroom.ft.com/2016/04/04/a-faster-ft-com/

Industry-Research | Perspectives

Transparency is a key determent in marketers’ trust of agencies

April 13, 2016 Rande Price, Research VP – DCN

Greater transparency on rebates and agency business models is critical to the level of trust between advertisers and their media agency in today’s marketplace. In a recent study conducted by ID Comms, nearly nine in 10 (86%) of marketing, media and procurement specialists reported that the current levels of trust that exist between advertisers and their media agencies was no greater than average. Further, 80% of the respondents do not anticipate any change in the level of trust in the coming year. Importantly, just over three-quarters (77%) of respondents reported that a close and trusted relationship between marketer and agency will deliver better stronger performance; it’s something many want to see fixed in the near future.

When advertisers and media agencies were asked specifically which areas of transparency most influence an advertiser’s trust in their media agencies, their top responses were:

How the agency manages rebates/AVBs, 71%
How the agency makes money, 60%
How agency group buying / share deals work, 59%
How the agency trades with media vendors, 58%

ID Comma conducted this survey globally with 65% of respondents based in Europe, 25% in the U.S. and 10% in the rest of world. Interestingly. Interestingly, 67% of U.S. agency respondents ranked higher than their counter parts in Europe with regards to “how the agency trades with media vendors” and “how the agency manages rebates” as the most significant items to determine advertiser trust in their agencies

This study further emphasizes the need for trust and transparency in business practices among advertisers and media agencies. Providing clarity on budgets, media buying practices, data integration and post campaign analysis should build stronger partnerships between advertisers and media agencies.

Industry-Research

Virtual reality’s challenging future

March 30, 2016 Rande Price, Research VP – DCN

Virtual reality is still in the beginning stages as a new medium with challenges ahead. The consumer market is currently small, however UBS predicts that annual device sales will reach roughly 34 million units by 2020, attributing to $6.7 billion hardware sales and 3.3 billion in software sales.

What exactly is virtual reality? The experience can vary from an occurrence that allows people to feel present in an alternative environment; to an augmented reality set in the real world and with virtual objects and information layered into the experience or it can be seen as a spherical or “360-degree view, allowing the viewer to look up, down and around.” Many simply explain that the VR experience as an illusion.

To provide a better understanding of the VR experience, the marketplace and its future, the Knight Foundation partnered with the USA Today Network to produce a full industry analysis. The report, Viewing the Future? Virtual Reality in Journalism examines these core questions and more:

Storytelling: Is VR a new and powerful tool for journalism? Does it have the ability to engage the viewer and provide a fuller experience of the subject matter?

Feedback to VR content is characterized by a more emotional reaction. Consumers report that VR brings them closer to the events and breaks down boundaries allowing you to step inside the story. Still journalists report being challenged to preserve a narrative thread in VR storytelling.

Ethical impact: Does the VR experience alter the authenticity of the information?

Providing a 360-degree of a story offers consequences as well with regard to personal privacy and graphic content.

Market growth: While VR experiences are expected to grow this year, is there enough content being produced to continue momentum?

The production of VR is both timely and costly. In order for VR to establish itself and become more widespread, time and cost must be reduced.

Monetization: How will the medium be monetized? What are the metrics for effective brand messaging and/or sponsorships?

Many digital ad experts do not see VR as a banners and boxes business. They think of VR in terms of creative and custom integrations such as immersive pre-role, native VR and advertorial features and/o product placement.

Importantly, VR is also rooted in real-world applications in medicine, surgery, architecture, and entertainment. Interestingly, nurses found that placing a burn victim in a virtually snow-covered environment can relieve pain; surgeons use VR to practice new techniques and sports coaches use to train athletes in situational assessments. Adoption is key to market growth and many anticipate a convergence to mobile devices will make the mobile virtual reality platform a core part of the VR experience and secure its future.

Industry-Research | Revenue

Ad spending forecasts still point to strong digital growth

March 23, 2016 Rande Price, Research VP – DCN

This week ZenithOptimedia revised its annual U.S. advertising spending forecast to 3.7% increase from its original 3.9% increase. The revised estimate was attributed to reduced advertising budgets in newspaper and magazines. This year’s U.S. as well as global ad market remains strong given media spending for the presidential election, the Olympic games and the UEFA Football championship in Europe. Coupled with this announcement, ZenithOptimedia also release a new study citing the digital’s share of advertising spend will inch ahead of television in 2018.

Magna Global also predicts that global digital media spend will catch up with television’s advertising market share at approximately 38% each in 2019; and in the U.S. in 2017. A Magna analysis reported that digital media is the number one media category in 14 of the 73 markets worldwide including in the U.K., Australia, Canada, Germany, China, Sweden and the Netherlands. The company supportes its prediction with the decline of television viewing. In 2009 television viewing peaked at 31.6 hours per week, this year it is at 29.8 hours watched per week and it is expected to drop further to 27.1 hours per week. One reason for the decline is viewing has moved to digital media platforms where people also watch television content.

eMarketer’s forecast, in line with the others, also suggests that digital advertising spend in the U.S. will overtake TV’s majority share in 2017. Mobile is now accounts for almost two-thirds (63.4%) of total digital ad spending and is the main catalyst for its growth in ad spending. In fact, eMarketer expects by 2020 that mobile will account for 70% of total digital ad spend and will be equal with television at a 32.9% ad spend share.

All three forecasters agree that this is a great opportunity for publishers with strong digital brands to register strong profits especially those offering multiplatform advertising opportunities.