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Industry Research

Featured Post | Industry-Research

Viacom dispels stereotypes and reveals actionable insights with its “Generations” study

As data and becomes more important for advertisers and other players in the ecosystem, media companies strive to provide more insights that illustrate their understanding of their audiences. One such company is Viacom, whose global insights team launched a research project this year called Generations.

The project includes videos that aim to dispel some stereotypes of Baby Boomers, Generation X, and Gen Z. “We’ve all heard the terms Gen Z, Millennials, Gen X, and Baby Boomers,” begins a video introducing the research. “But what do you really know about these groups? A lot of what we think we know is based on opinions, assumptions or stereotypes, instead of real data.”

Insights for everyone

Research spanning generations is a broad topic. However, Colleen Fahey Rush, chief research officer at Viacom, said that the Generations project “helps our company and our partners to better understand how people of all age ranges and demographic groups see the world. Plus, they allow our brands and businesses to stay ahead of the trends to make sure the stories we tell are resonating with our audiences.”

The videos can be seen on Viacom’s website, though the company said it shares much more detailed research with advertisers, agencies, distribution companies, and other partners. “We see it as our mission to understand how our audiences see the world and how that affects their attitudes. This allows us to stay ahead of the curve and ensure that the content we create continues to resonate with our viewers,” said Rush.

Research that informs the business

Viacom, which owns Comedy Central, MTC, BET, CMT, and Nickelodeon, has done a number of large-scale studies, which have found emerging trends among its audiences around the world. “Viacom differentiates itself from other media and content companies with its longstanding legacy of data and insights, giving us a competitive advantage in the industry,” said Rush.

She added that Viacom also sees Generations as “one of the added benefits of collaborating with Viacom. We are committed to knowing our audiences and sharing that knowledge with partners.” This allows them to “craft messages, products and propositions together that best speak to consumers.”

A spokeswoman for Viacom said that Generations was conducted by Viacom’s Global Consumer Insights group, which is not exclusively tied to advertising sales. Therefore, the research is not solely focused on the needs of marketers, nor can the company quanity how it directly impacts ad sales. Viacom Velocity, which sits within Ad Solutions, is primarily responsible for driving the company’s Madison-Avenue related research.

This week, Viacom reported that ad sales rose 6% to $976 million in its most recent quarter, marking “the first growth in ad revenue for the home of MTV, Nickelodeon and Comedy Central since the third quarter of 2014,” according to Ad Age.

Lessons to be learned

Viacom said that last year alone its research “connected with over 1.8 million kids, teens, young adults and adults through consumer insights, covering 79 countries globally, from Sweden to South Africa and Argentina to Australia.” 

Key takeaways from the Generations study include:

  • The stereotype in media and marketing is that Boomers are feeble grey-haired people living in retirement homes. “We know people are living much more active lives for longer than ever before,” according to a Generations video. Viacom also noted that the boomer stereotype that they’re all technically inept is false. In fact, many are much more tech-savvy than people realize.
  • As Gen Xers were growing up, new technology, communications, and cable TV channels like Viacom-owned MTV were spreading American culture around the world. The result is that Gen X a single global generation, with more cultural interests in common than previous generations.
  • According to Generations, the biggest misconception about Millennials is that they’re “lazy, no good for anything and that they’re spoiled,” according to Christian Kurz, SVP of Viacom’s Global Consumer Insights. Instead, he said, many don’t have much money, they’re very entrepreneurial, open-minded, and prospering in the face of adversity.
  • Born after 1997, Gen Z account for 25% of the U.S. population and 33% of the global population. By 2020, they will account for 40% of U.S. consumers. Since they are still growing up, Viacom said not much is known about them. However, they predict that events like climate change, Brexit, and the elections of Barack Obama and Donald Trump will surely impact their lives, the extent to which we don’t yet know. The Gen Z Generations video noted that growing up in an increasingly fractured world can lead to stress and anxiety. And, Viacom reports that Gen Z is the most diverse U.S. generation we’ve had yet.
About the author

Maureen Morrison is a writer and consultant, working with agencies, startups, publishers and brands on editorial strategies. She previously was a reporter and editor at Ad Age for 12 years, covering agencies, digital media, technology and marketers.

Advertising | Industry-Research

What Pew’s latest industry stats say about the media marketplace

Pew Research Center has just released its latest State of the News Media report, which provides an annual briefing of the news media marketplace. Pew aggregates data from reputable experts to produce a concise industry profile. It offers a succinct yet comprehensive analysis of the media industry.

This year’s highlights include:

  • Newspaper circulation decline. News outlets today offer several digital options to reach consumers, including apps, newsletters, podcasts, and aggregation platforms like Apple News. Unsurprisingly, the majority of U.S. adults now get at least some of their news online. As a result, compared to 2017, total daily newspaper circulation declined, revenue from print circulation was flat and ad revenue from print declined 13%.
  • Digital revenue growth. Overall, digital advertising registered strong revenue growth year-over-year. Reflecting on the total digital ad market, revenue grew 23% from $88 billion in 2017 to $109 billion in 2018. Driving this revenue growth was mobile advertising revenue’s increase from $57 billion in 2017 to $71 billion in 2018, comprising almost two-thirds (65%) of all digital advertising revenue. Digital ad revenue for news publishers also grew and closely resembled the total digital ad market.
  • Cable news revenue growth. Cable news (Fox News, CNN, and MSNBC combined) continued to experience revenue growth this year. It’s one of the only sectors, outside of Local TV, to register a revenue increase (4%) in 2018. Further, since 2015, cable news revenue grew 36% and ad revenue grew 58%.
  • Usage flat for news sites. For the second year, both newspaper sites and native news sites usage remained flat (4Q 2016, 4Q 2017 and 4Q 2018). Time spent also declined on news sites (newspaper and native). It appears consumers now engage with news brands offsite using apps, newsletters, podcasts and aggregation platforms like Apple News or Flipboard and other platforms.
  • Local news viewership decline. Local news audiences are on a decline across multiple dayparts. According to Comscore StationView Essentials data, the average audience for local news declined 10% for morning news and 14% for late night and evening news. However, over-the-air ad revenue for local TV rose 12% to $19.3 billion in 2018, on par with a midterm election year.
  • Digital native employee growth slowing down. In 2018, reporters, editors, photographers or videographers in the newsrooms of digital-native now equal 13,500 employees  with a median annual salary of $62,000 according to data from the Bureau of Labor Statistics’ Occupational Employment Statistics (OES).  

The key data points included in Pew’s State of News Media point to the continued shift in audience consumption of digital news and information and the challenges of monetization. With mobile now the access point for 24-hour news coverage, it’s no wonder that print and local news usage declined. Further, digital is no longer limited to onsite consumption, which creates new opportunities and challenges. News publishers have several touchpoints – including newsletters, podcasts and their content on aggregation platforms to – reach and engage consumers.

Advertising | Featured Post | Industry-Research | Perspectives

The halo effect is real: New research confirms that ads perform better in quality contexts

Media companies have long declared that it matters where advertising campaigns run. Unfortunately, when the ability to micro-target users at scale became available, particularly on massive social media platforms, it was simply too attractive for advertisers to ignore.

Despite countless media reports on the risk for brands running alongside toxic, user-generated content on YouTube or Facebook, behavior has never changed for the long-term. Instead, many advertisers used unsophisticated keyword blocking strategies or stopped advertising in the news category and considered themselves “safe.” Regrettably, that something amounted to little more than throwing the baby out with the bathwater. Last week, however, two new research studies released last week clearly demonstrate why this short-sighted strategy needs a serious rethink.

Reports from World Media Group (WMG) and Integral Ad Science (IAS) found that digital ads viewed on trusted editorial sites generate a more engaged audience for advertisers. These reports confirm comScore’s 2016 research that showed ads viewed within a premium publisher environment drive significantly better advertising effectiveness, particularly for mid-funnel consideration.

comScore’s independent research came at a time when the industry was in the midst of proving the basics to the market: that ads were being delivered to real computer screens and being seen by humans, not bots. comScore’s empirical research showed that running ads on “premium” publisher sites had significant impact on brand effectiveness and the lift to advertiser brands was attributed to the “halo effect” from the premium environments.

Quality context delivers real results

Fast forward to 2019 and WMG, a global alliance of a dozen leading news and media companies (e.g. The Atlantic, Bloomberg Media Group, The Wall Street Journal, and The Washington Post) commissioned Moat, a digital marketing measurement service, to conduct research on the quality and engagement towards premium inventory across desktop display, mobile display and desktop video.

The findings showed that premium digital inventory running across quality content brands in Q3 2018 outperformed Moat’s benchmarks by between 13% and 144%. WMG’s research also concludes that the primary driver of increased engagement is the “halo effect” that comes from the value of the contextual environment in which the ads are seen.

Key performance metrics

  • Desktop display ads viewed achieved an active page dwell time of 66 seconds, 39% higher than the industry average. The in-view rate (where 50% of the ad is viewable for 1 second) and in-view time both exceeded Moat’s benchmarks by 27% and 25% respectively.
  • Mobile display performed 35% more interactions than average. Viewability rates were 32% higher than the benchmark and engaged consumers for 13% longer.
  • Desktop videos viewed achieved 22% higher-than-average rates for viewability. Consumer attention to videos was also high, with audible and visible completion rates at 144% higher than the Moat Q3 2108 benchmarks.

People react to context

Additional biometric research by IAS, a technology company that analyzes digital advertising placements, identified the impact of high quality and low quality mobile environments on people’s reactions to digital ads. This neurological research – looking at the brain centers responsible for positive and negative affinity – further substantiates that the environment in which an ad appears has significant impact on consumers’ reactions to that ad.

IAS’ research found that ads viewed in high-quality mobile web environments are perceived 74% more favorably than the same advertisements seen in low-quality environments. Advertising in high quality content environments resulted in 4% greater favorability, 20% greater engagement, 7% greater emotional intensity, 29% memory encoding detail, and 30% memory encoding global.

For several years now, advertisers have struggled to use digital advertising to grow demand and desire for their products, particularly as direct-to-consumer brands and other low-cost, “brandless” options (see Amazon Basics) are starting to flourish. Like the earlier comScore Halo Effect research, these new studies prove that advertising on high quality content sites drives higher brand attention and engagement for both display and video advertising. Context matters and research continues to prove this: Ad performance is better in a premium content environment.

The only question is when brands will act.

Industry-Research | Perspectives

Marketers seek brand safety and awareness, but focus spending on search and social

With Facebook, YouTube, mobile, and OTT prevailing in the expanding video space—and people spending more and more time in front of small screens—advertisers are increasingly prioritizing video.  In fact, they rank it among their most effective advertising channels.

However, they continue to spend the bulk of their budgets on paid search, with paid social taking the next biggest chunk according to the 2019 “State of Digital Advertising” released by Marin Software. Based on a survey 460 digital marketers, the report details the main priorities digital advertisers are focusing on this year, as well as the biggest challenges and trends.

Marketers cited increasing brand awareness as their top priority (25%). Other priorities include:

  • Enhancing the customer experience – 22%
  • Embracing omnichannels – 20%
  • Delivering personalization – 20%
  • Campaign management – 19%

Advertising trends

Data privacy, video advertising, and visual search were the three largest trends advertisers believe to be impacting their business in 2019. A total of 22% of digital advertisers indicated that both video advertising and information security in the form of data privacy, tracking restrictions, brand safety, and ad blocking will have the largest impact on their businesses this year.  Within social specifically, marketers surveyed cited attribution/cross-device measurement (28%), generating quality creative (26%) and brand safety (26%) as their top concerns.

“Advertisers are very sensitive to these privacy and tracking issues and need to strike a balance between brand safety/sound privacy policies and ad performance tied to audience targeting,” according to Wes MacLaggan, senior vice president of marketing at Marin Software. So, while marketers continue to prioritize search and social channels for digital advertising, their priorities and concerns provide and opportunity for other marketing channels to address these issues and help them reach their objectives.  

Industry-Research | Perspectives

Native advertising had a great 2018 and it shows no signs of slowing

Native advertising has quickly become one of the most popular and effective forms of advertising, particularly for B2B brands. 

According to a Sharethrough and IPG Media Lab study, which surveyed 4,770 consumers on their responses to native ad formats (with some of the participants agreeing to have their eye movements tracked as they looked at different arrangements of ads and content) consumers are 25% more likely to look at a native ad than they are a banner ad. In fact, they look at them 53% more frequently and check them out 4.1 times per session on average, versus 2.7% for standard banners.

With numbers like that, it’s no surprise that native advertising is considered one of the top ad formats by most companies. In fact, eMarketer recently estimated that U.S. advertisers will boost spending on native ads by 25% this year, reaching $43.9 billion. 

My company, advertising intelligence and sales enablement platform MediaRadar, took a close look at B2B brands advertising online with native content. For the study, we analyzed our own data and spoke with our B2B clients for unique insights. 

Here’s what we found. 

More B2B brands advertised with native content in 2018

As we analyzed B2B brands advertising with native content in 2018, our deep dive revealed that native content was a high-growth area for the B2B space. In fact, we found that the number of advertisers buying native ads on B2B platforms increased quarter-over-quarter, every quarter throughout the year.

Comparing native, mobile, video and display ads 

When compared to mobile, video and display advertising, we saw that native experienced the highest rate of increase, with a growth rate of more than 50% year-over-year. In contrast, mobile only saw a 20% increase year-over-year. That was followed by video with a jump of 13% and display with just an 11% bump. 

However, even though display ads saw the lowest year-over-year rise in the number of advertisers, it remains the most common ad format used by B2B. More than 95% of brands advertising in B2B media were buying display ads in both 2017 and 2018, according to our findings.

Even with the high growth rate, native ad buying remains a rare behavior for the B2B advertiser, with only 7% of companies buying the format in 2018, leaving plenty of room for growth.

Who’s buying native advertising?

The analysis also identified the industries which bought the most native placements in 2018. According to our data, media, finance, and technology companies bought the most. And the B2B space saw the highest increase in the number of buyers of all online ad formats. In addition, realtors, legal services, and technology recruiting companies were the top categories to drive increases in native B2B advertising. 

Native advertising is here to stay

Native advertising reached an apex in 2018, particularly for B2B brands, serving as one of the highest-growth areas in the space. But there is no end in sight. Based on the study, native advertising currently serves as one of the more stable and reliable forms of advertising, especially when compared to mobile, video and display. 

Native content has developed and matured over time, experiencing its highest growth rate year-over-year, increasing purchase intent. Its performance only proves that native is thriving and here to stay.

Industry-Research

Journalists are worried about the future of journalism

Journalism has faced a number of challenges over the past few years and there doesn’t seem to be an end in sight. The duopoly has long been seen as one of the biggest threats to the journalism industry. However, according to our “Don’t stop the press” survey of 153 national, business, and trade journalists across the US, UK, and Europe, only 21% felt that this was a major concern.

Other factors such as the decline of quality, reluctance to pay for content, fake news and reliance on advertising revenue were all considered a bigger threat. In particular, shrinking newsrooms has a major effect on the industry, affecting both the quantity and quality of the output of journalists.

The impact of technology

Technology has been a driving factor for the growth of the news industry and has allowed us to spread information far and wide. It gives journalists the power to share the latest news with all corners of the globe and is a hugely important resource.

However, although there are many benefits with the growth of technology in the space, it has also had its drawbacks. Readers are reluctant to pay for digital content, which has put additional strain on journalism. More than half of journalists cited this as a top threat to their job.

However, 90% of journalists feel that technology has ultimately had a positive effect on their industry and has created a number of new opportunities. It’s allowed them to understand their audiences better, produce content that is more likely to engage readers and collaborate with the commercial team to create content that will drive ad revenue and subscriptions.

Journalists understand the need for paid content

Ultimately, journalists understand that their content needs to be paid for with a combination of ad revenue and subscriptions. Subscription strategies are a priority for publishers. In fact, according to Reuters Institute, 52% of publishers said building a subscription audience will be their top business priority in 2019. According to our research, an almost equal number of journalists like paywalls and understand that they are needed, compared to those that don’t like them but think they are necessary. Only 10% thought all content should be free to access.

However, quality journalism requires funding. The publishing sector is still undecided about the best way to fund its output. Our research clearly shows that some funding models actually undermine journalists’ ability to produce their best work. To combat this, media companies and their journalists need to work together to create a sustainable, best-in-class product that provides a guarantee of sustained, quality output, job security, and satisfaction—something most journalists agreed in this research, was sadly lacking.

When looking at the types of content that are currently produced, the research showed that journalists believe that ad revenue-based models favor click-bait, short-form content (67% agree), while subscription-based models support longer-form, quality journalism (84% agree). This indicated that journalists understand that paywalls are necessary to protect journalism in the long term, while still allowing them to drive revenue.

Concerns about the future

The majority of journalists felt seriously concerned for the future of the industry (78%). Their other key concerns included the poor quality of journalism, the spread of fake news, the lack of funding of online media brands, and the decreasing number of newsrooms. In addition to this, 83% of journalists believe that they have poor job security which is mainly driven by consumers reluctance to pay for digital content.

Although this may seem to paint a bleak picture for the future of journalism, our research shows that publishers are working hard to adapt to these pressures. There is a drive towards the introduction of more sustainable funding models which support long and short-form content, ultimately providing a better, more prosperous future for the industry.

Industry-Research

Young people rely on the news. Unfortunately, they don’t always find it reliable.

The good news is that young people continue to read the news. The bad news is that they are losing faith in it. A report released by the John S. and James L. Knight Foundation finds that 88% of young adults access news at least weekly, which includes 53% that do so every day. Conducted by NORC at the University of Chicago, the report analyzes the findings of a survey of 1,660 adults between the ages of 18 and 34.

Unsurprisingly, young adults of all races are highly digital news consumers. They find their news on social media, smartphone alerts, or news websites. And a majority of young adults share news regularly with their friends, family and social networks. Fifty-six percent of young adults share news stories at least weekly, with around 1 in 5 sharing news every day.

Political leanings and learnings

Certainly, it is heartening that young people rely on the news. However, it is unfortunate to note that the report found that a majority of young adults are concerned about the impact of news on democracy and unity in the country, expressing that news organizations may actually divide and polarize citizens.

The survey found that many young adults have concerns about the ideological and political leanings of news sources, according to the survey. In fact, a majority believes certain news sources have ideological positions, divide society, and hurt democracy.

Cultural and ethnic perspectives

Given that the report surveyed large samples of African American and Hispanic participants, the results offer significant insights across races and ethnicities. In particular:

  • A majority of young adults rely on news to make decisions, particularly young African American people: More than 60% of young adults use their favorite news source to decide which policies to support. And more than 50% do the same when deciding who should have their votes. Young African Americans are twice as likely to do this as young white Americans.
  • Young adults largely believe that their race or ethnicity is not covered regularly in the media: Overall, 31% of young adults say that people of their race, or issues that affect people of their race, are rarely covered in their most-liked news sources. Forty-seven percent say the same thing about their least-liked news sources.
  • The majority of African American and Hispanic participants do not feel like media sources accurately or fairly portray their groups, when they do get coverage: Only 45% of African Americans and 40% of Hispanics say their most-liked source very accurately portrays them.
  • As young adults question the media’s coverage of race, many get news from ethnic media sources: 58% of African American and 52% of Hispanic young adults use ethnic media sources at least once per week. Seventy-five percent of Hispanics and 71% of African American young adults who say they regularly experience racial discrimination. Thus, they are more likely to use sources that provide news specific to their race or ethnicity.

Use this news

Given the transformation of news consumption, it is gratifying to see that – while they may access it differently than previous generations – today’s youth continue to rely on news to inform significant decisions. Perhaps the fact that much of news consumption takes place once-removed from the source and that it is delivered in often polarized social media contexts are forces driving today’s young news consumers’ perception of the potentially negative impact of news. They are certainly affected by the fact that the news does not consistently reflect their racial and cultural perspectives. While dispiriting, these insights should prove helpful as news organizations seek to better engage and serve young audiences, who are seeking out news that reflects and informs their perspectives.

Industry-Research

Content discovery is a critical component of SVOD success

More choice sounds like a good thing. However, it’s been shown that there is a point at which too much choice no longer improves perception of value. In fact, too much choice can leave you feeling less satisfied than having fewer choices to begin with. The proliferation of streaming services may well be reaching this tipping point, though arguably cable television has long suffered from choice overload.

The 2019 first-quarter Nielsen Total Audience Report looked at how modern consumers navigate the “paradox of choice” to decide what to watch. Nielsen found that, among adult SVOD users, only one third of them report browsing the menu of a streaming service to find content to watch. And, unfortunately, 21% will quickly stop watching if they are not able to make up their minds.

Given that about 70% of homes have a subscription video on demand (SVOD) service and 72% use streaming-capable TV devices streaming services will need to figure out the best way to keep users engaged with content on these platforms. At present, most streaming users will gravitate back toward their traditional TV preferences when they’re not sure what to watch

At present, almost two-thirds of adults who stream video content use the services to watch exactly what they know they want to watch. One-third will watch when they have a rough idea, and only 22% watch when they don’t know what they want before exploring their options. An interesting thing about video streamers is that—despite the growth of original content offerings from providers like Netflix and Hulu—they focus on the familiar. Almost 60% say they routinely return to their favorite traditional channels, 44% like to scan through traditional channel options, 39% scan the program listings, and 31% browse their DVR recordings.

Younger viewers are more likely to use menus and check out recommended programming, as well as to spend more time exploring, than older viewers. However, they are also the most likely to tune out altogether if they are frustrated and don’t find something they want to watch. Thus, it is critical for streaming solution providers to master content discovery as they seek to cement their place in consumer viewing habits.

Industry-Research

Highlights and Insights from Mary Meeker’s annual Internet Trends Report

In total, more than half of the world (51%) or 3.8 billion people were internet users last year, up from 49% in 2017. Overall, internet growth slowed to about 6% in 2018. In response, sales of smartphones—a a primary internet access point—are declining since most of the world is already online. These are just a few of the major headlines from Mary Meeker’s annual Internet Trends Report 2019.

The highlights

The report identifies market growth and concerns across the different business sectors. Highlights and trends include:

  • Americans are a mobile-first society. In fact, U.S. consumers spend more time their mobile devices than they do watching TV. YouTube and Instagram are gaining the most online platform time (up 27% and 19% respectively in Q4 2018), and digital video now comprises 28% of the average daily viewing time.
  • People increasingly communicate visually using images captured on their cellphones. More than 50 percent of Twitter impressions now include images, video, or other media.
  • Marketing spend is necessary to attract new customers. However, Meeker believes these acquisition costs are unsustainable and, in some cases, surpass the long-term revenue of the customers. She suggests using cheaper ways to acquire customers like free trials and unpaid tiers. Both enable more usage, engagement and social sharing compared to premium models which drive monetization and product innovation.
  • Concern over problematic digital content continues to climb as 42% of U.S. teens report some type of bullying online. YouTube also remains central for recruitment of radicalized terrorists and social media still serves as a playing field for political polarization.
  • Google and Facebook continue to register steady ad revenue growth. Overall, Internet ad spend is up 22% in 2018, slightly higher than the 21% growth in 2017.
  • On-demand products and services increased from about 40 million in 2017 to 56 million in 2018. Online marketplaces are the most popular, followed by transportation, housing, food delivery and health/beauty.

Digital data and insights can improve user experience

Meeker believes that the use of digital data and insights can improve the user experience. She outlines the following plan:

Collect Data
  • Understand customer wants and improve business processes 
  • Increase customer input/improve products
  • Manage direct customer/subscriber relationships
  • Improve consumer decision-making
Manage Connection
  • Organize internal and external communication
    • Communicate with customers via multiple channels
    • Organize customer data across all systems
Optimize Data
  • Improve analytics/recommendations/personalization
    • Respond to customer events at scale
    • Discover business insights and optimize fulfillment
    • Manage data growth and eliminate inefficiencies 

Meeker sources industry research throughout the report to support her findings and offer forecasts in the tech and venture capital world. She continues to examine the marketplace as an analyst would, identifying the new trends, companies, and business models for investment and her report is an annual industry-insider must-read.

Industry-Research

How people find news and what they’ll pay for

While consumers look to reputable news organizations and quality brands for trusted news and information, many still use search, social media, and aggregators to find and consume news content. In fact, according to Reuters Institute Digital News Report 2019, just under one-third (29%) of consumers worldwide prefer direct access to a website or app for their news and information compared to 55% who prefer search engines, social media, or news aggregators.

However, this behavior varies by country. In the U.S., consumers regularly take a number of different paths to access news content. Reuters refers to this as the “pick and mix” model with 27% of U.S. consumers preferring direct access, 20% preferring search, and 25% using social for their news content. Regardless of the route taken, 26% of people rely on “more reputable” news sources (40% in the U.S.). An additional 24% also report they stopped using sources with a less accurate reputation. Others stopped sharing reports with potential inaccuracies (29%).

Trust

Trust remains an important factor in selecting news content. Overall trust for mainstream news sources is 42% globally and 32% in the U.S. Trust in news sources people sought out themselves is 49% globally and 50% in the U.S. Trust in news found in distributed environments such as search and social media is much lower.

While the news media faces challenging times, people believe it’s doing a better job at keeping them up to date (62%) and helping them to understand the news (51%). Unfortunately, almost one-third of consumers report actively avoiding the news because of its negative effect on their mood (58%) and say that they feel powerless to change events (40%).

Reader revenue

Subscriptions are gaining momentum in the U.S. Reuters reports almost one in ten (8%) of their U.S. sample are digital-only subscribers (up from 3% in 2016). Notably, The New York Times now has over 3 million digital subscribers, the Washington Post has about 1 million, and the Financial Times has more than 700,000 digital-only subscribers.

These subscription models—plus alternative ones like the Guardian’s membership model—are strong performers for the year. Each employed successful marketing strategies, be it ongoing payments, unique product offerings, or bundles.

Reuters does raise concerns about subscription fatigue. Defined as the idea that people are becoming frustrated with being asked to pay separately for lots of different services online. The average (median) number of news subscriptions per person among those that pay is one in almost every country. This is the same even among the most interested in news, the wealthiest, or the most educated.

Further diversification

Notably, podcasts are gaining traction and adding a fresh new audio component and on-demand access to gathering news and information. In fact, 35% of U.S. consumers listened to a podcast last month. The Guardian, Washington Post, The Economist, and the Financial Times are among the forerunners of news publishers that have launched successful daily podcasts in the last year.

It’s important for news publishers to continue their strong branding efforts to differentiate their quality and reputable journalism from the misinformation on the internet. Further, while subscription revenue is important, there are also other avenues to try for revenue diversification. This is a good time for news publishers to test new formats (podcasts, videos, live, group chats, etc.) and communicate their brand personality to a younger audience.

Industry-Research | Innovation

The future of media will be personal, according to PwC

Consumer interaction on digital platforms is a key driver of revenue for entertainment and media companies. With increasing affordability and availability of broadband, mobile continues to be a strong contributor to the growth of this segment. However, according to the new PwC’s Global Entertainment & Media Outlook 2019–2023 Report, further innovation and personalization will significantly change how we access and use the Internet.

PwC predicts that creative new offerings and business models will increasingly revolve around people’s personal preferences. New applications will involve artificial intelligence in combination with digital assistants. Media companies will strive to build products that empower consumers to set their individual preferences and curate their own context.

The PwC Outlook Report cites personalization as a central theme in overall entertainment and media revenue growth. Global spending is expected to rise 4.3% over the next five years, with revenues hitting $2.6 trillion in 2023. The report provides a strong and notable resource for revenue estimates in the both the US and global markets.I

Additional forecasts from PwC’s Outlook Report include:
  • Subscription TV revenue in the U.S. will experience a 2.9% CAGR (compound annual growth rate) decline to from $94.6 billion in 2018 to $81.8 billion in 2023. Much of the loss comes from cord-cutting and SVOD competition. Interestingly, the US remains the biggest Pay-TV market accounting for 46% of the total global revenue in 2018.
  • SVOD’s continues its popularity as more streaming services are introduced and unbundling continues to grow. Newcomers to the market will need to differentiate themselves to attract subscribers.
  • The OTT market is also dominated by the U.S., contributing to more than half (55.6%) of global OTT revenue in 2018. OTT video revenue in the US reached $14.5 billion in 2018 and is set to double by 2023.
  • The U.S. virtual reality (VR) market registered $934 million in revenue in 2018 and is expected to grow at a 16.6% CAGR to reach S$2 billion by 2023. Gaming remains the primary application of VR, accounting for 57.4% of total VR revenue in the US in 2018. VR video, however, will see the most growth in the forecast period, climbing at a CAGR of 22.4% to reach $861 million in 2023.

There’s an important effort in today’s entertainment and media marketplace to meet consumers where they spend their time and to deliver what they need wherever they are. These sorts of personalization efforts cut across OTT, SVOD, and VR. While evolving business models around customer behavior is far from new, the renewed focus amplifies the importance of placing consumers at the center of the media experience.  

Industry-Research

The podcast market is booming. Research offers insights into monetization and the marketplace

Podcasts are not a niche market. One-third of Americans listen to podcasts monthly with one-quarter of these listeners tuning in on a weekly basis, according to a new report Investing in the Podcast Ecosystem in 2019 from Andreessen Horowitz. In fact, listeners now spend over six hours each week on podcasts, consuming approximately seven episodes per week.

While the term podcasting was first coined in 2004, it wasn’t until the creation of the iPhone podcast app in 2012 that podcast listening captured mainstream appeal. To date, Apple has 27M monthly active podcast users in the U.S. and accounts for the majority of podcast listening.

The five segments of podcast producers are:

1. Media Companies

Larger media companies with a variety of content formats (broadcast radio, newspaper, magazine, etc.), which monetize podcasts primarily through ads. Other monetization channels include circulation revenue (e.g. iHeartMedia, The New York Times, NPR, Slate, The Washington Post).

2. Podcast-Only Production Companies

Podcast production studios create their own content and distribute on other listening platforms like Apple Podcasts or Spotify. They monetize podcasts through ad revenue, licensing to TV/film and exclusives with listening platforms (e.g. Wondery, Gimlet, Cadence13, WaitWhat).

3. Large Indies

These are primarily personality-driven talk shows with celebrity/influencer hosts. Often these podcasts are monetized mostly through donations, ads, and merchandise (e.g. Joe Rogan, Sam Harris and Tim Ferriss).

4. Non-Media Businesses & Non-Profits

Most often these have a stated goal behind their podcasting initiative. These are largely brand-building marketing efforts, rather than focused on driving revenue and are often reliant on working with a 3rd party.

5. Hobbyist Creator

Any individual creating and posting content. Often unmonetized.

Monetization

Podcasts are primarily monetized via ads, sponsorships, listener donations, membership, and subscription models. However, ad revenue is quite small (0.3B), as compared to other media revenues. I

Currently, podcast advertisers pay per guarantee per download. While this can work for direct response advertisers, it is not effective for brand advertisers that want to form an impression on consumers over a period of time. The accounting in this report shows that 56% of podcasts use dynamic ad insertion.

Still, podcasts are an attractive environment for a hard-to-reach audience. Some podcasters charge listeners for early access to content, ad-free listening, or exclusive bonus episodes. Apple Podcasts does not yet enable this, which has led to some creators to turn to iTunes or third-party sites to sell their content. Podcasting is still in the very early stages of developing monetization strategies for long term growth.

A new model of monetization comes from a company called Patreon, a membership-based platform that provides the tools needed for creators to run a subscription content service. The system allows podcasters to receive funding directly from their fans, aka patrons, on a recurring basis. Patreon charges a commission of 5% for each donation and 5% in transaction fees, leaving the podcasters with 90% of the donations. While a positive model for podcasters, profitability at this time appears limited.

Apps and the larger marketplace

Interestingly, the report suggests that users do not feel passionately about their podcast app. At the end of the day, the audio content is the core element users are engaging with, not the application. The app is a utility and, while Apple maintains the largest share of listeners, its market share dropped significantly last year from over 80% to 63% with the launch of Google Podcasts.

However, apps are being developed that offer new approaches to enhance the podcast market. For example, Castbox offers translation and transcription. This means that consumers can search within podcasts via the transcribed text. Other apps are add context with visual links to the podcast. Entale is a “visual podcast app” that uses AI to showcase relevant visual links for uses to view as the podcast is playing. Further, podcast publishers with larger follower base are creating their own platforms for distributing content. Slate Plus and The Athletic are great examples of using an established fan base to build a strong brand extension. Clearly, there’s an opportunity to build a network of creators and listeners.

New interactive podcasts talk shows and call-in shows, with social elements, are part of podcasting’s future. However, for the podcast market to flourish, podcasting needs to concentrate on finding new and easier ways for creators to distribute their own content, own their customers, and to monetize through alternative sources besides advertising and off-platform donations.

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