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

Industry-Research

The shift to non-game app spending signals change in the mobile market

More than half of U.S. app store spending now comes from non-games apps compared to five years ago when games apps accounted for more than two-thirds of total app spending. The shift to non-game apps signals a change in the mobile market from early days, when consumers were less willing to spend on subscriptions or in-app purchases.

According to Sensor Tower’s Q2 2022 Data Digest Report, while spending on mobile games has slowed, the rapid rise of spending on non-games shows a strong potential for growth on mobile. In fact, the report shows that U.S. consumer spending on non-games grew at more than twice the rate of games. Non-games achieved a compound annual growth rate of 40% since June 2014, compared to less than 20% for games.

Spending on non-game apps continues to outpace the spending growth in mobile games. This trend was a reversal from 2019 and 2020, when mobile game spending was consistently higher than non- games apps. While mobile game spending surged at the beginning of the pandemic, by the end of 2020, non-game growth was about equal, then advanced ahead of mobile games by mid-2021.

As the market adjusted itself from the rapid growth registered in the early months of the pandemic, mobile app revenue overall declined year-over-year for the first time in May 2022.

The growing subscription market is helping app growth across a variety of categories. App download activity includes U.S. consumers spending one million dollars across 400 different apps, with a large percentage on subscriptions. Content companies in the U.S. and China controlled the top spots on the App Store, combining for 45% of all installs on the platform in Q2 2022. Top subscription apps include Disney+, HBO Max, and Hulu.

The Sensor Tower methodology includes App Store and Google Play download estimates for April 1, 2022, through June 30, 2022. The estimates use downloads per-user base and only one download per Apple or Google account counts in its total. Downloads of the same app to multiple devices like updates, or re-installs by the same person are not included in the total.

App market overview

Like many entertainment and informational products, U.S. consumer spending on apps soared in April 2020 at the start of the Covid pandemic. Year-over-year growth jumped from around twenty to thirty percent in 2019 to thirty-five to fifty percent in 2020. With app revenue readjusting itself from the rapid growth of Covid’s early days, revenues declined year-over-year for the first time in Q2 2022. It’s important to note, that even with a year-over-year decline, Q2 20222 is up 71% compared to Q2 2019, before the pandemic.

Interestingly, Apple’s App Store generated approximately $43.7 billion from in-app purchases, subscriptions, and premium apps and games in the U.S., up 5.6% year over year. In contrast, Google’s store registered $21.3 billion, down 7.4% year over year. 

TikTok was the number one download app globally and the number one spot in the U.S. With close to 14 million downloads, it was four million downloads ahead of the second-place app, Facebook.  Amazon led as the top shopping app since Q4 2018 in the U.S., however, this ended in Q2 2022. SHEIN, a fast-fashion retail app based in China, ranks as the number one shopping app with the most U.S. downloads.

App downloads signal a return to norms

The Q2 report shows U.S. consumers returning to pre-pandemic activities. Travel apps received record high downloads while airline mobile apps increased more than 30% compared to Q2 2019. Further, consumers want to attend concerts and in-person sporting events, with the top five ticketing apps registering more than 10 million downloads combined, an increase of 70% compared to pre-pandemic Q2 2019.

Tracking mobile downloads, app popularity over time, and spending across app categories offers insight into consumer actions, activities, and shifts in behavior – all drivers of market share. Sensor Tower app download and spend analysis identifies a positive shift in consumers’ willingness to make purchases on their phones. It also shows consumers shifting app categories from mobile games to non-game apps, namely subscriptions, and a return to some pre-Covid activities.

Industry-Research

Advertisers should be watching CTV

As consumers find their way to connected TV (CTV) content, so do marketers. CTV and streaming products help media companies extend their content reach and tap into a strong-growing demand for content. To that end, we’re witnessing the rise of AVOD and FAST services, which broaden the reach of streaming beyond the premium content consumer. While consumers benefit from lower-cost alternatives, advertisers are keen to capitalize on a broader consumer base.

Attractive marketplace

Advertisers see a significant advantage in CTV as it combines the value of television engagement with the precision of digital buying and targeting. The ads are usually not skippable, appear in regular ad breaks, and are indistinguishable from cable television ads in production quality. 

eMarketer forecasts 204.1 million connected TV users, representing 60.1% of the population this year. They also project CTV ad revenues to increase 35% to $6.41 billion this year from upfront sales and to grow another 35% to $8.14 billion in 2023.

In fact, a new survey by Advertiser Perceptions and Premion reports that 66% of advertisers are shifting budgets from digital, social, and linear TV to fund CTV/OTT spend increases.

Quality, volume, and device

CTV streaming content is in the early stages of developing effective optimization for programmatic inventory. Peer39, an intelligence platform for contextual targeting and analytics, offers insight into CTV’s inventory quality. Their Programmatic CTV Benchmark report provides an additional level of transparency to better understand how CTV campaigns compare to the rest of the industry. 

The Q1 2022 report found that fake CTV content accounted for 4.43% of all ad calls. Fake content is content that doesn’t fit the scope of TV content. It’s likely to be screensaver channels, photo widgets, games, and mobile. Peer39 found the largest share of fake CTV content was among mobile apps pretending to be CTV streaming content in programmatic marketplaces. Approximately 2% to 18.5% of CTV inventory ran on fake content and about 13% of total impression volume per campaign ran on user-generated and non-professionally produced content. 

The programmatic CTV market is run primarily on three key devices, with Roku, Amazon Fire, and Samsung accounting for nine out of ten impressions. Not surprisingly, CTV is a medium for series and movies, and to a lesser extent, live tv for sports and news. 

Regarding the top OTT services by impression volume, Pluto TV stands above all, accounting for 59% of total impressions in open programmatic auctions. Hulu, Sling, and Viacom’s EyeQ only account for 2% of impressions, each.

Effective ad market

According to ExchangeWire, CTV streaming advertising is proving to be more effective than traditional TV advertising, as CTV viewers are 42% more likely to buy advertised products because of the ads viewed. Importantly, content players have insight into what viewers watch, when, and how often. Extracting data in a privacy-compliant manner is essential for profiling and targeting a valuable CTV audience.

The combination of digital reach and television content makes CTV streaming ad inventory especially valuable to marketers looking to reach broad audiences. It allows media companies to attract younger audiences of cord-cutters and “cord-never” consumers, the early adopters of CTV platforms. It presents an additional advertising route for media organizations and uses their first-party data and contextual insight to reinforce the value of video monetization. 

Industry-Research

Key trends shaping the booming streaming market

Earlier this year, Tubi forecasted that free streaming audiences would grow more than paid streaming by mid-2022. Fast-forward to comScore’s new State of Streaming 2022 Report, which backs up this prediction. The comScore data shows that consumers are adopting ad-supported streaming services faster than non-advertising supported streaming services (29% vs. 21% over the last three years). comScore’s analysis uses 13 million Smart TV devices from two primary Automatic Content Recognition (ACR) service providers.

Streaming is thriving, and the industry forecasts continued growth. Even while Wall Street questions the performance of streaming brands and their less explosive growth since the pandemic, subscriptions and viewing time continue to grow.

The overall market for subscription video on demand (SVOD) is substantial. The new PwC Global Entertainment & Media Outlook 2022–2026 projects that the 2022 SVOD marketplace in the U.S will generate $25.3 billion, up 13% from last year. PwC projects this segment to reach $33.6 billion by 2026, representing a conservative growth rate of 8.5% compound annual growth rate from 2021-26.

Subscriptions per household are growing watching watched 5.4 streaming services per month as of March 2022, compared to 4.7 in March 2021. In March 2022, the “Big Five” streaming services (Netflix, YouTube, Hulu, Amazon, and Disney) became the “Big Six,” now including HBO Max. The Netflix audiences overlap with 82% of the other top six streaming services, especially Amazon (66%) and YouTube (66%).

Big 6 services

According to the PwC’s report, global SVOD subscriptions will increase by 485 million between 2021 and 2027 to reach 1.7 billion. The six US-based platforms will have 988 million paying SVOD subscribers by 2027, up from 612 million in 2021. PwC views Netflix as the revenue winner, with $34 billion by 2027, similar to Disney+, HBO Max, and Paramount+ combined.

Device market share

Connected TVs (CTV) are the largest segment of streaming devices at 137 million in 2022 compared to 114 million in 2020. However, Smart TVs are the fastest-growing segment of streaming devices, up 48% YOY from 38 million in 2020 to 56 million in 2022. While Samsung has the largest market share among Smart TV manufacturers in 2022 at 26%, it declined from its high of 31% in 2020. Other top manufacturers include Alcatel/TCL at 15% market share in 2022, down from 14% in 2020, and Vizio at 14% in 2022, flat compared to 2020.

Eight in ten (79%) of Wifi-enabled homes watch streaming content on connected TV devices. Each of these households spends approximately 122 hours per month streaming, an increase of 19% from March 2021. Of all services, Netflix captures the most hours per month watched at 43 hours, followed closely by YouTube at 39 hours and Hulu at 33 hours.

It’s essential to distinguish the terms CTV (connected TV) and OTT (over-the-top). CTV is the device that connects to or is embedded in television to stream video content. It’s the hardware – Smart TVs, gaming consoles (used to stream video content), Roku, Amazon Fire TV, and Apple TV. OTT refers to content viewed over the internet. 

Diversifying audience growth

Diverse audiences now account for more than 40% of Wifi-enabled households viewing connected TV content in the U.S.

  • Hispanic audiences, the largest segment of diverse homes that stream, over-index for Netflix, YouTube, FuboTV, and Sling.
  • African Americans over-index for Amazon, FuboTV, YouTube, and Pluto in terms of the streaming platforms viewing days per household.  
  • Asians over-index for HBO Max, Hulu, YouTube, and Sling.

Analysts question how the SVOD market will continue to grow. Many believe teens and Gen Z will drive the market as short-form video platforms like TikTok move into longer-form content. Others suggest the SVOD platforms will increase as more countries gain broader internet access.

New partnerships, mergers, and more offerings will likely continue marketplace growth. The consumer needs to be front and center as competition grows to evolve an individualized and personalized user experience. 

side shot of laptop with one hand on keyboard and another person's hand pointing to screen
Industry-Research

How the right CMS can accelerate digital transformation for publishers

 Digital news consumption is a daily habit for most consumers. But they have high expectations.  Audiences want news to be timely and offer easily discoverable news content. 

An underperforming website infrastructure can be a crucial barrier for publishers. In moving toward digital transformation, publishers must upgrade their: 

  • User experience, 
  • Ease of discovery of news and information of interest, and 
  • Mobile optimization of both content and advertising.

The Knight Foundation worked with a small group of Black-owned local media outlets to upgrade their publishing solutions to serve underrepresented communities. Members of this group faced challenges, from aging technology to legacy website standards. The five organizations participating in this lab include The Atlanta Voice, The Dallas Weekly, New York Amsterdam News, Houston Defender Network, and The Washington Informer.

While participating in the lab, Atlanta Voice, the Amsterdam News, Houston Defender Network, and The Washington Informer upgraded their content management systems. The Knight Foundation provided grants and guidance for necessary transition and monitored the process. Their report, Digital content platform upgrades for small media outlets, highlights the publishers’ experience and key findings to assist other small publishers in the process.

Participating Publishers:

  • Atlanta Voice is the largest audited African American community newspaper in Georgia, with more than 600 print newspaper locations in the Atlanta metro area.
  • Amsterdam News is one of the country’s oldest published African American newspapers and a leading voice of the black community in the New York region.
  • Defender, also known as the Houston Defender, is Houston’s leading Black news source and offers breaking news, lifestyle, politics, commentary, and community newsletters.
  • The Washington Informer is a multimedia news organization that serves the information needs of the African American community in the metropolitan Washington D.C. area.

Determine the right content management system 

A content management system (CMS) or platform is what houses the content that publishers produce to serve website visitors. CMS platforms need to quickly load content on browsers across device types, including desktop, tablet, and mobile phones.

After a careful review, the publishers in the study decided on Newspack as their WordPress CMS. Its design targets small and medium-sized digital news organizations specifically. The move to Newspack helped provide the publishers with:

  • A clean database of imported content.
  • A better control of story display.
  • Additional improvements to position a well-performing website.

While transitioning to a new CMS can be challenging and requires technical expertise, Newspack onboarding included support tech and importing all the archived content. 

While a CMS is one of the most expensive investments in the digital transformation process, it includes a software-as-a-service (SaaS) model. This helps to reduce the need for additional capital investments. The SaaS model eliminates depreciating hardware like web or database servers.

Beyond the technicalities of transformation

It’s crucial for all stakeholders – including senior management and newsroom staff – to be at the core of a publisher’s digital transformation. Teams need to learn a new process for sharing information, often repositioning themselves. A successful transition means aligning internal teams with your service providers to work together.

Staff development is also critical. An essential function in a digital news organization is that of a web producer. It is necessary to have someone on the team who can produce, edit, and post the digital-first news content. Other positions need to evolve as well and fill gaps in old practices that are now online. Publishers needed to think long-term and strategically and not look to fill full-time or part-time roles with outside contractors. 

Digital transformation is continuous and the transition to a new CMS is a serious commitment, especially for a small publisher with limited resources. Publishers willing to learn new practices and formulate new workflows will run more efficiently and effectively. The results of this transition link to an engaged audience and more advertising and reader revenue.

Industry-Research

Publishers explore subscription models focused on inclusivity

Reader revenue models raise concerns about subscriptions serving only wealthy and highly educated audiences. According to a Reuters Institute’s survey, almost half of news leaders (47%) are concerned that subscription models may “super-serve” more affluent and more educated audiences

A recent article by Laura Oliver identifies news publishers in Sweden, Spain, and South Africa that are creating inclusive offerings to ensure trusted news sources aren’t just available to those who can pay for them. Oliver offers examples of how publishers are paying it forward to readers who may not otherwise be able to afford a subscription. This allows them to access the news at a reduced cost (or even for free), while building good will and paving the way for a long term subscriber relationship.

Daily Maverick in South Africa provides a “pay what you can” model, while Spain’s elDiario.es allows members to pay nothing. Portugal’s Publico offers digital subscriptions to the unemployed, and Sweden’s Dagens Nyheter uses a flex paywall to attract younger and more geographically diverse audiences. Importantly, these publishers are focused on inclusivity and are setting the stage for others to follow.

South Africa’s Daily Maverick’s sliding scale

South Africa’s Daily Maverick offers a sliding scale payment for subscriptions. Readers decide how much to contribute, with prices ranging from just under $5 to just under $23 a month. There is also an annual subscription option from just under $50 to just under $230. Subscribers paying more than approximately $12 a month received the same amount in an Uber voucher as a perk.

The sliding scale attracted 24,500 Maverick Insiders, with a slight majority paying more than $12 a month. Additional benefits include ad-free browsing and invites to speak with journalists. Unfortunately, Daily Maverick Retention is somewhat problematic given credit card expirations and no auto-renewal process. Even with these obstacles, there are 17,100 active members. The Daily Maverick is looking into direct debit cards for less friction in the renewal process.

Sweeden’s Dagens Nyheter targets younger audiences

Dagens Nyheter introduced digital subscriptions in 2015 and expanded its offerings a year later. They employ a metered model, a premium model, and a dynamic model where most articles are free immediately after publication but then move behind the paywall. Approximately 60,000 people signed up for the free offer, and close to 30% converted into paying subscribers in the following year.  

They used this strategy again during the COVID-19 pandemic, which resulted in 300,000 free registrations, with 25% converting into paying subscribers later. Dagens Nyheter subscribers started with approximately 2,000 digital-only subscribers. Now it has about 250,000 and reader revenues account for 78% of their total revenue.

elDiario.es reduced-fee options

Spanish news site elDiario.es believes developing an emotional relationship with audiences will grow its membership. Their offer allows members to pay from $8.50 to $80 or more a month for a subscription. They also offer a free or reduced-fee option for those who cannot pay. The site uses a metered paywall technology to help encourage loyal audiences to become supporters.

Nearly 21,700 members signed up for elDiario.esunder the free option. The site has almost 61,000 paying members, including 3,600 paying a reduced fee. In the elDiario.es revenue model, 50% of revenue comes from readers and 50% from advertising.

Pricing options allow readers with financial limitations to identify how best they can support newsrooms. Publishers willing to experiment with different pricing offers such as “paying what you can” show readers they are more human and less transactional. These efforts help them form a loyal and lasting relationship with audiences, regardless of their financial circumstances.  

Advertising | Industry-Research

Publisher demographics are more effective than data-brokered targeting

Many marketers believe that personalized advertising in digital media is very effective at offering efficiencies and generating clicks and conversions. While advertisers generally agree that targeting is a useful tool, there is little business-to-business (B2B) research that evaluates the efficacy of advertising tactics like this. However, Nico Neumann, Catherine E. Tucker, Kumar Subramanyam, and John Marshall explore What Type of Digital Advertising is Most Effective for B2B Prospecting? in a new study.

Reaching B2B decision-makers

This research questions the best targeting method to reach B2B decision-makers using digital advertising. The authors focus on the tech sector as their desired audience: the most extensive B2B advertising vertical with an over a 30% share of the U.S. B2B digital ad spend market. The goal for the campaign is to increase branding among Information Technology Decision Makers (ITDM). Therefore, reach is a key metric for this campaign. 

Methodology and analysis

Seeking out expertise, the authors asked five different global data vendors to produce ITDM prospect lists. Two vendors provide a simple list of ITDM prospects, including user’s name, location, role, email, and cellphone information. Using their proprietary black-box methods, the other three data vendors provided a ready-made list of ITDM prospects. All five ITDM segments easily integrated into buying or data management platforms.

The core focus of the study is to examine the factors of data quality and their influence on results. The authors compared the five prospect lists to random prospecting on a digital publisher network of Time Magazine, Dotdash Meredith, Design Home, and other quality publishers to serve as a baseline for reaching the target audience. In addition, the researchers surveyed those exposed to the campaign to find out about their ITDM responsibilities, demographics, work-related characteristics, digital footprint, and content interests. This benchmarking exercise assessed the reach performance of the different ITDM targeting practices compared to the network of publishers without purchasing additional ITDM data segments.

The survey analysis examined all segments and found that over 84% of respondents have no IT product or purchase responsibilities despite the list of targeted ITDM users. Interestingly, the first two prospect lists were more effective than using black-box audience segments for identifying ITDMs via digital ads. However, even the prospect lists are not statistically better at reaching the defined target market than the digital publisher network.

The prospect-information validation using the collected surveys suggests a significant level of inaccuracy, consistent across the first two vendor lists.

Invalid data can occur if:

  • A potential error in the link to the data profile itself.
  • Data is classified incorrectly.
  • Information is outdated.  
  • Inaccuracies with machine learning or other attributions problems.

Importantly, audience information generated by publishers is less likely to be subject to these errors.

Effective tools

After evaluating the cost-effectiveness of market costs and reach, the study found that contextual and content-interest targeting is almost 9 to 10 times more efficient than specific ITDM pre-packaged prospect lists. The custom B2B lists for ITDM are no more helpful in finding the desired audience than random prospecting from a digital publisher network. Further, publishers’ demographic first-party data targeting is most efficient.

This study provides independent evidence that publishers and first-party data efforts offer more effective and cost-efficient target audience reach than the use of data brokers and third-party cookies.

Advertising | Industry-Research

Streaming drives this year’s upfronts

The buzz this upfront season is all about streaming. As Tim Peterson at Digiday put it, “Historically streaming has taken a backseat to traditional TV in the annual upfront market. This year, however, streaming will be sitting shotgun as it gets closer to seizing the wheel.” Many upfront presentations this year emphasized the value of ad-supported services like Peacock, Hulu, and HBO Max. In particular, networks focused on the value proposition for advertisers to buy inventory on their ad-supported streaming offerings – to keep those dollars in their family of brands.

The strategy this upfront season contrasts with to Wall Street analysts’ concerns over the long-term viability of the streaming marketplace. In the wake of Netflix’s quarterly performance, Quibi’s short life, and CNN+’s untimely demise, analysts have been skeptical about the marketplace’s growth potential. BofA Global Research analyst Jessica Reif Ehrlich reports, “We believe investors are now questioning the long-term market potential in streaming.” However, networks are not only confident that their streamers will continue to attract audiences, they are betting on their connected TV extensions to attract this year’s upfront dollars.

Networks believe that consumer viewing habits, particularly for those who ante up for subscriptions, will prove a viable market for advertising dollars. Streaming service penetration is strong among U.S. households. Deloitte research reports that approximately 80% of U.S. households in the United States paid for a streaming service in 2021, with about 35% churn across the member base. Monitoring engagement is essential to understanding churn. Subscriber growth and retention work hand in hand in monetizing the streaming ecosystem.

Streaming is nearly one-third of TV viewing

Time spent is an essential metric of engagement and retention. The Gauge, Nielsen’s total TV and streaming snapshot for March 2022, shows that streaming audiences spent nearly 30% of their total TV time watching over-the-top video content. Streaming gained a full share point over February as broadcast networks transitioned away from NFL football and the Olympics. The Gauge offers a monthly macroanalysis of how consumers access content across television delivery platforms.

There was a slight decrease of 0.7% in total streaming viewing when comparing total television viewing last month. Viewing share across all streaming providers, Netflix, YouTube, Hulu, Prime Video, Disney+, and Other Streaming was either flat or gained slightly in March.

The slight dip in streaming usage is significantly less than the drop in total TV usage, down 4.2%. March’s drop-in TV usage is consistent with historical declines this time of year due to the increase in warmer weather and more time spent outside.

Advertisers chase audiences on CTV

Broadcast programming also lost more than a full share point, and sports viewing was down 53%. NASCAR and the NCAA basketball tournaments are big March events. However, “sports event programming” share of viewing dropped from 25% to 12% in March.

An important question for marketers and agencies is where to place their advertising bets; in other words: how much of their ad budgets should they be transitioning to connected-TV audiences? While linear TV still possesses strong advertising muscle, linear ratings are a dwindling sales proposition. Undoubtedly, audiences can increasingly be found streaming content and that’s where advertisers are looking for them.

Networks and content producers are looking to direct to consumer distribution and connect-TV is center stage. There’s still much to work out, especially around audience fragmentation and measurement. Importantly, connected-TV advertising offers quality and relevance and the ability to implement cross-channel media planning. No doubt that this year’s upfronts require a careful analysis of audiences’ video content consumption in order to make savvy decisions about where ad dollars will be best spent.

Industry-Research

The value of a shared experience: co-viewing and CTV

Tracking co-viewing is essential for publishers to monetize all viewers they reach across all platforms and apps. It provides details of how people watch television in the household. TVision’s new report, Spring 2022 Co-Viewing Report, offers insight on TV and connected TV (CTV) reach with person-level data.

TVision’s technology detects viewers and what their eyes are looking at in the room. Their technology identifies the content that plays through the TV, or a device connected to the TV. TVision uses an opt-in panel of 5,000 households across the U.S. While the sample is small, when you slice and dice all of the streaming services and apps, it offers intelligence on the co-viewing experience.  

Identifying co-viewing

TVision, like other rating companies, captures Viewers Per Viewing Household (VPVH). This metric represents the average number of viewers present when the television or device is on with the content tuned. Co-viewing offers high value to marketers. It provides an additional audience qualifier – especially if family programming and an adult and child are present. The report shows that viewers are more likely to watch CTV content with friends and family than Linear TV. CTV typically sees VPVH averages of 1.29, while Linear TV falls slightly lower at 1.26.

Family-friendly movies and TV shows dominated the most co-viewed programs across ad-supported CTV apps. Further, Tubi, followed by HBO Max and Hulu, has the highest VPVH. Additionally, movies (73.2%) tend to have more co-viewers than TV episodes (54.8%).

Not surprisingly, the pandemic triggered an increase in co-viewing habits. During Covid’s stay-at-home order, streaming TV co-viewing increased by 15%, and linear co-viewing increased by 9%. According to a Nielsen Study in 2020, co-viewing with streaming happened 47% of the time and 34% on linear.

A shared viewing experience yields more attention

When multiple people sit down to watch a program together, they’re more likely to keep their eyes focused on the screen. Interestingly, when comparing engagement and co-viewing metrics for some of the most-watched connected-TV apps, the majority with high VPVH also index well above average for attention.

TVision’s data shows that adult audiences pay more attention to ads overall when watching with other adults—with a 107.6 attention index. An increase in TV viewing, especially streaming, coupled with the rise in co-viewing, creates a ripe opportunity to connect with consumers.

Younger audiences are more likely to co-view CTV content, with viewers under 18 showing the highest co-viewing rates of all demographic groups. Overall, adult audiences pay more attention to ads whether they watch with others or by themselves. Children, however, are more likely to pay attention to ads when watching in a group than on their own.

The TVision report helps to quantify co-viewing audiences viewing TV and CTV services. However, using a co-viewing index as a multiplier can easily overestimate an audience size and distort total monthly unique users (MAU). As the industry looks to determine the size and scope of streaming and FAST channels, it’s essential to monitor and scrutinize audience viewership and co-viewing claims.

Advertising | Industry-Research

Contextual may be a better alternative to behavioral advertising

Targeted contextual and behavioral advertising currently dominate much of the digital advertising marketplace. Behavioral advertising uses personal browser data collected by intermediaries to serve ads to users by assigning them into micro categories. In contrast, contextual advertising serves ads to match the marketer’s requirements. 

GumGum, a contextual intelligence company, commissioned Harris Poll to survey consumers to better understand their online advertising preferences. Nearly eight in ten (79%) consumers report being more comfortable seeing contextual ads than behavioral. While more than three-quarters of all people are more comfortable with contextual ads, there are some generational differences: 84% of consumers ages 35 to 44 preferred contextual ads, while 76% and 75% of those between the ages of 18 to 34 and 45 to 54, respectively, preferred a contextual experience. 

Personalized ads are not beneficial 

In contrast, most respondents (66%) report they are uncomfortable with companies tracking their browsing history to show them personalized ads. Further, women are more uncomfortable with behavioral ads than men (70% vs. 61%). Older adults aged 55+ are also more likely than younger adults to say they are uncomfortable with brands tracking their browsing history. 

While marketers often overstate the value of personalized ads, consumers are also uncomfortable when brands use their browsing history and habits to serve personalized ads. Personalization often relies on surveillance advertising, which is data-invasive and has consumers concerned.

Similar trends have also been observed in European research. Last year, Global Witness commissioned YouGov to conduct research among 2,000 regular social media users in France and Germany about personalization in online advertising. The findings show that consumers are uneasy about targeted ads — driven by everything from income and religious views to life events such as pregnancy, bereavement, or illness — and do not want to receive any personalized advertising. Further, approximately 38% of the respondents said they are “creeped out,” and 31% said they feel violated.  

Behavioral targeting can lead to discrimination  

Beyond privacy concerns, selecting specific demographics and audiences to receive certain advertising can be discriminatory. Civil rights groups accused Facebook of violating federal anti-discrimination laws in 2016 because of their targeted advertising practices. At least five lawsuits were filed against the company at that time. A settlement was reached in 2019, and it noted, “Facebook advertisers can no longer target users by age, gender and ZIP code for housing, employment and credit offers.” 

Google announced a cookie replacement called FLoC, Federated Learning of Cohorts, in mid-2021. The company planned to shift online advertising tracking from user to group tracking. However, many voiced concerns that users could potentially be identified within cohorts. Google’s newest idea in their Privacy Sandbox is an API called Topics, which links user browsing history to topics for interest-based advertising. Unfortunately, there’s a significant disconnect between Google’s Sandbox initiative and consumers’ sentiment from the user privacy perspective.

Contextual relevance

Contextual advertising addresses consumers’ privacy concerns, allowing publishers to serve more relevant ads to their customers without tracking their browser history. Interestingly, few marketers transitioned their dollars from behavioral advertising to contextual advertising after Google announced the end of cookies in 2022 and then again when it announced its delay until 2023.

The research clearly shows that consumers are uncomfortable with behavioral and personalized ads. As the digital advertising industry moves forward to make changes and create solutions, transparency is essential, and it is necessary to inform consumers on how their data is collected and used. Digital ads that do not make consumers uncomfortable build brand trust and increase the likelihood of a positive response.

Diversity, Equity & Inclusion | Industry-Research

Research highlights the need for diversity in media leadership

Diversity in news media matters because it offers a voice to underrepresented communities and helps provides education to break down the barriers of prejudice. When the news media provides structural diversity – hiring, retention, and promotion – it better reflects the audiences it serves, and more accurately portrays society.

A recent study, Race and Leadership in the News Media 2022, from Reuters Institute, evaluates leadership diversity in the newsroom. The research includes a sample of 100 major online and offline news outlets in Brazil, Germany, South Africa, the U.K., and the U.S. 

Key findings for the ten top online news outlets and ten top offline news outlets in each of these markets:

  • In total, 21% of the 82 top editors identify as nonwhite, compared to 43% of the general population across the five countries. However, excluding Africa from the analysis means only 8% of the top editors are nonwhite compared to 31% of the general population.
  • At the time of the analysis, Brazil, Germany, and the U.K. did not have a nonwhite top editor. In contrast, 33% of top editors are nonwhite in the U.S., increasing from 18% in 2021. Further, in South Africa, 73% of top editors are nonwhite, increasing from 60% in 2021.

Many journalists highlight the importance of diversity in the newsroom and its important impact on editorial decision-making. The Reuters research measures diversity in the newsroom and tracks its progress compared to industry studies across the globe.

Tracking change in the marketplace

American Society of News Editors (ASNE) research surveyed 293 news organizations in the U.S. in 2018. The study found that 23% of the newsroom employees included people of color represent and 26% for online-only news organizations. The research also shows that 79% had at least one woman among their top three editors, and 33% had at least one minority journalist in a top-three position.  

The National Council for the Training of Journalists (NCTJ) in the U.K. used the 2020 Labour Force Survey (LFS) data to identify diversity in journalism. Their report shows women employed in journalism as a majority (53% compared to 47% of men). There was also a slight decrease in the proportion of white ethnic groups (94% to 92%) in journalism compared to 2018. Journalists working in the U.K. increased from 78,000 in 2018 to 96,000 in 2020. However, nonwhite journalists did not grow proportionately.

In Germany, the New German Media Makers (NdM), a nonprofit association representing media professionals with immigrant backgrounds, conducted research in 2020 among 126 editors-in-chief and 122 editorial offices. The study found only 6% of the editors-in-chief have an immigrant background. While most editors-in-chief generally rated diversity in editorial offices as necessary, they did little about it. The NdM made three important recommendations to editors-in-chief and closely monitor the news media.

  1. Report for the whole society: diversity in a program or publication can increase reach, circulation, and opportunities to employ people from immigrant families.
  2. Decision-makers must develop a strategy to attract journalists and staff with immigration histories.
  3. Disclose diversity data transparently, create clear targets, and document.

News media owners and their editors need to accelerate diversity initiatives in their organizations. Reuters research and the previous studies show a slow transformation of the newsroom with nonwhite journalists and editors under-represented. Importantly, transparency and documentation are essential to share best practices for building a diverse newsroom across the globe.

Diversity, Equity & Inclusion | Industry-Research

Media companies build trust when they address audience concerns

No other business sector has more cultural relevance than media. Media shapes perception, but public perception deeply affects the media industry. Because of this, media companies need to identify the social discussions and issues in society and find a balance in addressing them without alienating their audience.

New research, Media Materiality 2022, conducted by the Responsible Media Forum with consultant Carnstone Partners Ltd, identifies the material sustainability issues for the media sector in the UK, Europe, and North America based on a three-tier research plan:

  • Reviews of environmental, social, and governance (ESG) reporting frameworks, investor indices, and recent (2019 or later) materiality assessments published by companies participating (Axel Springer, BBC, Dentsu, ITV, and others) in the Responsible Media Forum. 
  • Interviews with senior sustainability practitioners from media companies, including advertising, broadcast, entertainment providers, news publishing, and telecommunications. 
  • Interviews with external experts, including ESG thought-leaders, investors, policymakers, non-governmental, organizations, and third sector (non-profits, social enterprises, cooperatives, etc.).

Identifying material issues

To build trust between a media company and its target audience, a company needs to take responsibility for its role in, and take a stand on, meaningful issues. There are consequences when a company fails to act. For example, Disney and its CEO, Bob Chapek face backlash due to company’s donations to Florida politicians who support the “Don’t Say Gay” bill. Critics of Disney felt that that the company did not stand up for its LGBTQ employees, cast members, and guests. And fallout thus far has included widespread media coverage, employee walkouts and a public apology.

These sorts of situations are becoming increasingly prevalent. Thus, it is critical for organizations to understand the issues that are significant to staff, stakeholders, and their customers.

Responsible Media Forum defines material issues as “financially significant over the short to medium term.” These have the potential “to affect a key financial indicator, e.g., profits or revenue, by around five percent or more within two years.” These issues were found to be material: climate change, cyber security data privacy, diversity, equity & inclusion, people management, responsible content, skills development, sustainable value chain, and well-being.

Interestingly, both fake news and net neutrality are no longer identified as material issues as they were in the 2018 report. Important material issues for publishers to incorporate into their best practices.

Responding to material issues

  • While the media’s carbon footprint is relatively small, integrating climate change content can encourage behavioral shifts in society.
  • Data privacy is an essential practice of media companies. With privacy regulations, such as the General Data Protection Regulation (GDPR), becoming standard practices, publishers should communicate how they collect and use consumer data. 
  • In 2018, the Responsible Media Forum now includes “equity” as part of diversity, equity, and inclusion. Equity refers to the creation of a level playing field and increased commitment to diversity in both developing and retaining talent and entry-level recruitment. This is an important issue among those under 40 years old. DCN’s research on Gen Z Digital Media Attitudes, Values & Behavior shows that both Gen Z and Gen Y see this as the foremost issue companies should care about today.
  • Responsible content is crucial for publishers. Media companies are responsible for their content across their portfolios and usage of intermediaries. Related concerns include diversity of output, editorial compliance, creative independence, transparent and responsible editorial policies, freedom of expression, impartial and & balanced output, and promotion of causes.
  • Media companies must invest in their employees. Skill development, including training and mentoring, are strong retention tactics, especially against tech platforms.
  • A sustainable value chain is important to manage. Media companies need to manage the upstream and downstream of their supply chain beyond their own needs to support.
  • The 2018 report expanded the definition of well-being to include a focus on mental health. With the Pandemic and employees working from home, it’s no surprise that mental stress is an integral part of the wellness category.

Other areas to watch

In addition, the Forum identified three additional categories to determine whether an issue did not meet its materiality threshold but still represented an important matter.

  1. Strategic: an issue that can significantly affect the ability of the company to deliver its strategy in the medium to long term.
  2. Operational: an issue that matters for internal, reputational, and efficiency but is neither material nor strategic.
  3. Emerging: an issue that is not yet widely on the radar of a company but is increasing in importance and expected to become a material or strategic issue within the next two years.

Media plays a critical role in reflecting and responding to the needs of society. This report provides a starting point for media companies to access material issues and other key areas of potential concern in order to better meet audience expectations.

Industry-Research

How differentiation and education will shape the next phase of streaming

Video is exploding, and new services and platforms are popping up right and left. From broad TV platforms categories like SVOD. FAST, and vMVPD, the wide range of products and offerings can be confusing. The two biggest areas to address are viewing choice, which is about deciding what to watch (the content), and where to watch (the platform).

With series distribution deals, syndication rights, and talent deals, it’s hard for viewers to know what shows are on which platform and where to find what they want to watch. However, it is clear that content drives subscriptions with over more than one-third of viewers (36%) signing up for a service to watch a specific show/movie in the past year according to new report from HUB Entertainment Research.

Acronym soup

Consumers and professionals alike are confused about the proliferation of acronyms such as:

  • SVOD: subscription video on demand service that users must subscribe to access (i.e., Netflix) content.
  • FAST: a free, ad-supported streaming TV services like a Roku’s Roku Channel or Paramount’s Pluto TV.
  • vMVPD: a virtual multichannel video programming distributor. It offers aggregate live and on-demand TV and delivers the content over the internet. vMVPD services resemble the familiar cable line-up and packages like Hulu Live TV and YouTube TV.

Multiple streaming sources

HUB Entertainment Research’s Evolution of Video Branding report confirms that consumers are unclear about platform offerings. For the report, HUB surveyed 1,601 US broadband consumers aged 16-74 who watched at least 1 hour of TV per week in February 2022.

According to HUB, viewers use 5.7 TV sources compared to 3.7 before the pandemic in 2019. Numerous streaming brands like Amazon Prime Video, Apple, Disney+, HBO Max, Hulu, and Netflix are marketing to consumers around exclusive content deals.

Disney+ and Warner Media were the first to offer theatrical releases straight to SVOD during Covid-19. Antenna Research’s analysis of Hamilton and Wonder Woman 1984, theatrical release directly to streaming, showed that roughly half of the U.S. viewers joined the service after their premieres but were gone within six months.

Awareness and differentiation

HUB’s analysis examines the ways in which streaming brands are trying to break out of the pack to attract and retain viewers. Awareness is ubiquitous among five brands – Netflix, Amazon Prime Video, Disney+, Hulu, and HBO Max. However, aside from Netflix in this top tier, two-thirds or less of respondents understand the top brand’s offerings and how they’re differentiated. Further, the next tier of streaming services presents even lower awareness and knowledge of the service.

Programming as a differentiator

Interestingly, consumers view Disney+ and ESPN as TV streaming services with strong genre focus. Their programming genre is their brand: Disney+ is synonymous with children and ESPN with sports. Interestingly, among those aware of the different services, Disney+ is viewed to have the strongest genre focus in their programming.

Options and confusion

In particular, awareness about FAST services is very low. Less than one in three of those surveyed understand what differentiates one brand from another. Consumers view FASTs services as interchangeable and impossible to tell apart from one another.

According to Nielsen, consumers had at least 200 streaming service options in mid-2021, with more to come. The Hub research identifies the consumer confusion associated with the tremendous growth of TV streaming services. Together, these services accounted for 28% of total TV usage in October 2021.

Consumers welcome guidance in identifying and understanding the value of each streaming proposition. Strong branding and points of differentiation are encouraged among services and platforms, especially FAST programmers. To fully maximize the opportunity streaming offers, the market will require increased consumer education. And streamers need to focus on what makes them unique, whether that stems from a strong genre focus, breadth of offering, affordability, usability, unique content offerings, or brand recognition alone.

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