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Industry-Research | Research

Digital benefits entice new news subscribers

Advertising messaging is an important trigger in increasing people’s willingness to pay for online subscriptions. New academic research, Effects of Advertising Messages on Willingness to Pay for Online News, from Bartosz Wilczek, Ina Schulte-Uentrop, and Neil Thurman, evaluates effective advertising strategies for online subscriptions. The study focuses on four types of advertising appeals: digital-specific, social, normative, and price transparency. The findings indicate that digital-specific features appeal. Aspects like personalization, online-first delivery, and online-only offers significantly impact participants’ willingness to pay. This suggests that emphasizing the unique digital advantages of online news can increase sign ups and subscription interest.

Messaging impact

This research sets out to address two crucial questions. First, it seeks to uncover the most potent individual advertising message (digital-specific, social, normative, or price transparency appeal) to drive people’s willingness to pay for online news.

The study also looks to understand which combination of advertising messages among digital-specific, social, normative, and price transparency messaging ultimately boosts people’s willingness to pay for online news.

Messaging appeal

The different respondent testing shows that digital messaging is the most potent. Social messaging that emphasizes community membership and offline and online events also positively influences participants’ willingness to pay. This finding suggests that fostering a sense of belonging and engagement within a community can enhance subscription intentions.

Normative messaging, which focuses on the importance of supporting independent, inclusive, and watchdog journalism, has a moderate positive impact on willingness to pay.

Interestingly, the price transparency appeals, which provide information on the news industry’s critical financial situation, do not significantly impact willingness to pay. This suggests that while consumers may value transparency, it may not be a primary motivating factor for subscribing to online news.

Combining messages

The research reveals that combining advertising messages can increase people’s willingness to pay for online news. Combining the normative appeal with the price transparency appeal is the most convincing. In comparison, other combinations of advertising messages do not yield significant effects on people’s willingness to pay for online news.

What’s surprising is that neither the normative nor the price transparency appeal is sufficiently convincing on its own. However, combined, they effectively increase audiences’ willingness to pay for online news. Moreover, the findings suggest that adding a digital-specific or social appeal to a subscription pitch that includes both a normative and a price transparency appeal is ineffective. One explanation could be that the more appeals a subscription pitch contains, the longer and more complex it becomes—which might decrease its effectiveness. This suggests that the efficacy of a subscription pitch depends less on the quantity and more on the quality of arguments and how well they work together.

Digital news publishers can leverage these insights to tailor their advertising strategies and enhance subscription uptake. By highlighting the unique features of online news, fostering a sense of community, and emphasizing the societal importance of independent journalism, publishers can increase consumers’ willingness to pay for online news subscriptions. However, it is important to note that normative and price transparency appeals may have a limited impact on subscription intentions on their own, suggesting the need for a multi-faceted approach to advertising online news subscriptions.

Advertising | Research | Video

Streaming continues to overtake TV

In recent years, the traditional television and streaming video industries have undergone significant transformation due to the expansion of digital platforms and changing consumer preferences. To gain insights into these changes, Adtaxi conducted an extensive study, 2023 TV & Video Streaming Survey, exploring the evolving landscape of TV and video streaming with more than 1,000 U.S. adults.

According to the survey, streaming services have solidified their position as the primary mode of video consumption for most viewers. More than 80% of respondents report subscribing to at least one streaming platform, with Netflix leading the pack. The convenience of on-demand content, the wide variety of choices, and the absence of advertisements were cited as the primary reasons for the popularity of streaming services.

Preferred choice

Streaming services are the preferred choice of video consumption for a significant portion of adults, surpassing cable (31%) and broadcast (11%) options. Approximately 42% of adults now opt for streaming services, with 35% accessing streaming content through their TV sets and 7% using personal devices. Roku predicts that this trend will persist and that an estimated 50% of all U.S. households will cut the cord by 2024.

Cord-cutting continues

The research also reveals that the cord-cutting trend shows no signs of abating. A staggering 75% of respondents report that they canceled their traditional cable or satellite TV subscriptions in favor of streaming services. The flexibility, cost-effectiveness, and customizable nature of streaming platforms have made them attractive alternatives to traditional TV providers.

Original content and exclusive deals

In the battle for viewership dominance, original content has emerged as a key differentiator among streaming services. The Adtaxi survey found that 68% of respondents subscribed to a streaming platform specifically for its original programming. Netflix, Amazon Prime Video, and Disney+ were identified as the top platforms known for their high-quality original shows and movies.

Moreover, exclusive deals and partnerships have become important strategies for streaming services to attract subscribers. This includes securing exclusive rights to popular sports events, partnering with renowned creators, and signing contracts with top-tier production companies. These tactics not only help streaming platforms stand out but also provide viewers with unique and diverse content options.

The battle of ad-supported streaming

While subscription-based streaming services dominate the market, the survey highlights the growing popularity of ad-supported streaming platforms. Almost 40% of respondents report using ad-supported services, indicating a willingness to endure ads in exchange for free or lower-cost access to content. This trend should encourage more advertisers to invest in digital advertising within the streaming space, presenting new opportunities for brands to reach their target audiences.

The 2023 TV & Video Streaming Survey sheds light on the ever-evolving landscape of entertainment consumption. The dominance of streaming services, the ongoing cord-cutting trend, the importance of original content, and the rise of ad-supported platforms all point toward a significant shift in viewer preferences and behavior. As the industry continues to evolve, it will be interesting to see how streaming services adapt to meet the demands of their subscribers while providing a seamless and personalized entertainment experience. The future of TV and video streaming looks promising, offering consumers a wide range of choices and content options that cater to the consumer’s interests and preferences.

Advertising | Research

Is behavioral advertising good for consumers?

Most of today’s digital display advertising is sold programmatically. The process is automated from buying to displaying ads and determining which ads are shown to which users. Programmatic advertising uses behavioral ad targeting and relies on extensive online consumer tracking, which raises important privacy concerns.

The benefits are often the counterargument to privacy – asserting the strong economic value consumers derive from targeted ads. But is this really the case for consumers? Do the purported positives – such as oft-touted “better effectiveness” and “ad relevance” – outweigh or offset the impact on consumer welfare?  Further, how is the product’s quality viewed in targeted ads compared to other vendors, and how do the prices compare?

New research, Behavioral advertising, and consumer welfare: An empirical investigation from Eduardo Abraham Schnadower Mustri, Idris Adjerid, and Alessandro Acquisti, answers these questions. The findings show little consumer benefit in seeing targeted ads. In fact, respondents are less aware of vendors displayed and perceive products of lower quality, and at a higher price.

Study details

The research encompasses two studies. Study 1 included 489 participants across two phases. Phase One asked participants to browse randomly across selected websites using a Chrome browser on their computers. If they clicked on an ad, URL of the ad was captured. The research team then used automated scripts and the Google search engine to find competitive products of the advertised brands. They collected several pieces of information for the competitive analysis; landing pages, the product image, price, description, brand, and name of the website that sells the product. 

Approximately one week later, respondents return for Phase 2.  The researchers show nine product photos randomly to participants.

Respondents assessed all nine products:

  • three products from the ads they viewed (ad condition),
  • three competitive products from the organic search results (search condition), and
  • three randomly selected products from ads served to other participants in the study (random condition).

Study 1 included objective metrics in the analysis, like price. The study also included self-reported metrics such as participants’ assessments of purchase intention, product quality, price fairness, relevance, and novelty of product type, brand, and vendor. This design captured participants’ perceptions and purchase intentions independent of their vendors’ perceptions.

The second study replicates the first. However, it includes third-party objective data vendor rankings from the Better Business Bureau and SiteJabber. The researchers share the vendor ratings with the respondents before asking about their purchase intent.

Findings

The research shows that participants’ intention to purchase products in targeted display advertisements is low but still higher than for random products. Notably, Study 2 finds that higher purchase intentions and higher relevance in the ad condition are driven by participants having previously searched for the advertised product.

The findings also state that, on average, products in targeted display advertisements are only somewhat relevant to respondents. However, while participants appear to benefit from the pricing of targeted products, search results can offer better prices and higher-rated vendors.

The researchers only find one major difference in the direction of the results between Study 1 and Study 2.  Study 1, without vendor ratings, shows significantly lower purchase intention. Study 2, including vendor ratings, shows a higher purchase intention for higher-rated vendors. Therefore, vendor quality is a relevant factor in consumers’ purchase decisions. 

The research results offer insight into understanding the complexities of measuring the impact of targeted ads on consumer welfare. These two studies take a new route and look beyond ad effectiveness and click-through. Using objective and self-reported metrics across three conditions – ads, search, and random, results in low awareness, low-quality, and high-priced vendors. This new empirical study further questions the benefits of behaviorally targeted advertising.  

Advertising | Research | Supporter Spotlight | Video

5 Ad trends to know for Upfront and Newfront season

The largest TV networks and media companies are busy presenting their upcoming programming and ad inventory for the year ahead. A large portion of advertising budgets are typically allocated to TV advertising, so advertising shifts among top brands will impact the whole marketplace. In this article, we’ll explore some of the latest advertising trends and insights to keep in mind during the Upfronts, NewFronts, and beyond.

1. Digital takes the top spot

In 2022, nearly $144 billion was invested in digital, print and TV advertising. While TV still makes up 41% of total ad spend, digital was the top ranking format making up 47% of all buys. Over $68 billion was allocated to digital formats. These formats include display, online video, native, and paid social among other formats. This marks an opportunity for continued growth in digital media sales. 

2. Top categories investing in TV are also top buyers of digital 

Four out of the top five categories buying TV ads are top digital buyers as well. Not surprisingly big spenders from finance, media & entertainment, retail, and tech brands drive digital ad sales.  TV investment for these, with the exception of media and entertainment, is down YoY. 

However, each of these categories are up YoY in digital ad sales. Their combined digital investment still exceeds $36.6 billion and made up 53% of all digital spend. This represents a shift in the market towards digital advertising among top segments.

3. Few advertisers entering the market bought national TV spots

Only 1% of advertisers entering the market bought national TV spots. Despite looming recession concerns, MediaRadar observed 52k new advertisers (nearly 80k brands) entered the market in the second half of 2022. Not all of these advertisers purchased TV spots (530), but over 36k invested in digital display, video advertising and other digital formats. 

4. Online video advertising is up 

Online video advertising is increasingly more important to advertisers as it rose 86% YoY. A study by Hubspot says, “91% of marketers surveyed say they find video important to their advertising mix and 92% of them say online video produces a high ROI.” These feelings are likely contributing to the continued growth of video ad sales across media formats. 

MediaRadar observed 31.1k advertisers spend an estimated $28.2b in video advertising during 2022.  Top three categories advertised via online video during 2022: software ($1.9 billion), pharma ($1.4 billion), and film promotion ($1.4 billion). Combined spend nearly reached $4.8 billion, this is only 17% of total online video spend.

5. OTT investments increased despite concerns 

Just a few years ago, new OTT streaming platforms were being launched regularly and consumers were anxious to embrace them. Now, platforms struggle to match growth of 2021 and prior. To overcome challenges groups, like Disney+ and Netflix, have introduced ad supported versions at a reduced cost to mixed reviews. Despite the challenges, 5.7k brands increased their investment in streaming platforms YoY. Together their buys were nearly $1.3 billion. Most notably LinkedIn, eHarmony, Kohl’s, and Febreeze contributed to this YoY increase. 

While the Upfronts and Newfronts are an increasingly important time for large networks and media conglomerates, it is also an important time for all media sellers to understand the shifting marketplace and carve their niche into the new year. There is much opportunity to capitalize on the changing advertising landscape and continued digital growth. 

Research

INMA identifies new approaches to attract a Gen Z audience 

Whether reliant on advertising, subscription revenue, or a combination of both, attracting new audiences is a critical component of media success. And, given that Gen Z is the largest generation, the cohort takes on particular significance. While they consume about the same amount of news as Millennials, they use it much differently than previous generations. Therefore, it is critical that media leaders understand their specific consumption style to attract this younger audience.

The International News Media Association (INMA)’s new report, What Gen Z + Media Need From Each Other, identifies strategies to grow digital news media appeal among the Gen Z audience. Author Paula Felps explores six case studies to see how news media companies are experimenting with connecting with Gen Z. The case studies were on Germany’s Funke Zentralredaktion, The Wall Street Journal in the U.S., Norway’s Dagens Næringsliv, The News Movement in London, The Sydney Morning Herald, and The Australian in Australia.

Understanding Gen Z

The report first offers insight for a better understanding of Gen Z’s news consumption habits and what drives those habits. Felps cites Reuters Institute report to profile Gen Z’s digital consumption habits, and McKinsey and EY research to identify levels of engagement.

Attitude and behavioral differences identified in the research reports:

  • Most Gen Zs turn to social media platforms for news coverage. WhatsApp and Instagram are growing. However, TikTok is becoming the fastest-growing network for news among its younger users. Forty percent of 18 to 24 years old use TikTok and 15% of them use it for news. (Reuters Institute)
  • Gen Z is very inclusive; they reject hierarchy and crave transparency. (McKinsey)
  • Making news more understandable and balanced is key to reaching this age group. (McKinsey)
  • Authenticity is a significant personal value. Issues like climate change, racial injustice, and health care are authentic concerns of Gen Z. (EY)
  • Gen Z doesn’t want more crisis coverage. (Reuters Institute)

Attracting the Gen Z audience

The case studies covered in the report reveal that experimentation is essential in attracting Gen Z. Two of the successful initiatives included are Funke Zentralredaktion and The Wall Street Journal.

  • Funke Zentralredaktion creation of a political TikTok channel is a strong example of attracting and growing a Gen Z audience. Funke used TikTok to introduce top politicians to the platform and asked them questions concerning the Gen Z demographic. The TikTok videos included serious issues but maintained a creative and modern look using filters, emojis, and sounds. The channel grew to nearly 70,000 followers in less than one year, with some videos reaching more than 3 million views.

Important lessons learned from Funke Zentralredaktion’s Gen Z subscribers:

  • Approach serious topics in a creative manner.
  • Ensure that the topic is relatable; find the right angle to address.
  • Meet Gen Z on their platforms, e.g., TikTok.

The Wall Street Journal (WSJ), part of Dow Jones, created a student membership program to capture college students to create new readership habits. WSJ learned the great value of acquiring younger subscribers and creating a lifelong relationship with the brand.

Important lessons learned from the Wall Street Journal’s Gen Z subscribers:

  • Less news in more formats, offer alternatives to reading news like podcasts or videos.
  • Free and easy, meaning content needs to be compelling and cost-conscious subscription pricing.
  • Digital only and be present where they are – such as Instagram and TikTok.
  • Personalize to attract, engage, and retain this audience.

Hiring Gen Z in the newsroom

Another aspect of attracting this younger audience that the report covers is their critical role as content creators.  One example offered in the report is that of The News Movement. Created by two news veterans, William Lewis, former chief executive of Dow Jones, and Kamal Ahmed, former editorial director at the BBC, the goal of this news platform is to commission and produce content by and for Gen Z. The News Movement distributes its content on Gen Z’s their favorite platforms (i.e., TikTok and Instagram) as well as on its own site. It also has partnerships with the Associated Press (AP) and others to help it produce content. It’s presently in beta.

Felps’ INMA report identifies new approaches for the news media to experiment with to attract Gen Z, like using video or podcast formats and creative filters.

To ensure future sustainability, media companies must engage with Gen Z to offer news that is more understandable and relatable.  And, in addition to meeting this audience where they already are, by distributing content on the platforms and in the formats this generation prefers, it is also critical that media leaders understand that Gen Zers must be included on staff and afforded a voice in the newsroom.

DCN-Research | Research

It’s a critical time to refocus your subscription strategy

Over the past 20-plus years, digital subscriptions have become essential to sustainable growth for media companies as part of their revenue diversification strategy. We know the pandemic created a strong consumer appetite for subscriptions. However, the digital media industry is wisely considering the future trajectory as the subscription marketplace faces heightened competition and inflation.

The research

Digital Content Next (DCN) partnered with FT Strategies to better understand the digital subscription market, explore the macroeconomic influences, and identify best practices for future growth. 

The research, Navigating the Future of Digital Subscriptions, used a three-prong approach to analyze market conditions and identify business practices for subscription growth.

  1. Qualitative interviews with a subset of senior executives from DCN member organizations to discuss business development and strategies for capturing future opportunities.
  2. A quantitative survey among DCN member organizations on their priorities for the future as the subscription economy develops.
  3. Review of data, analyses, and reports from the government, financial institutions, industry, trade organizations, trade publications, and consulting firms to identify and explain factors affecting the overall economic climate in the U.S. and their impact on the digital subscription economy.

Macro analysis

The Covid pandemic was a critical inflection point that significantly impacted consumer behavior and subscription offerings in the digital content market. However, as the effects of the pandemic wane, the market faces new economic pressures.

On the business side, higher interest rates could affect business investment. For consumers, increasing inflation rates, accelerating price-increases, and the reduction in consumer savings may force many to cut back on what they deem non-essential. Further, falling unemployment rates impact digital media companies in acquiring and retaining talent, which can also add costs.

Even with the economic factors plaguing the market, our analysis concludes that the digital subscription economy is expected to continue its strong growth and is somewhat insulated from adverse economic conditions. However, digital content companies must be mindful of the risks posed by the changing macroeconomic climate.

The report, which is available to members of DCN, provides details on the economic forecasts for advertising and subscription revenue, plus additional insight into the cost of doing business and the competitive marketplace. As the subscription economy continues to grow over the next three years, audiences will likely be the target of many subscription businesses from a broader set of media outlets.

Navigating the future

The research outlines four areas of focus on how best to navigate and implement new strategies for future growth in digital subscriptions.

  • Align the subscription mission with a highly collaborative organizational structure.
  • Find and leverage the right audience data to act as a common language across the organization.
  • Think more broadly about what innovation means to attract new audiences.
  • Expand content distribution to accelerate audience growth.

Digital media companies are in a stronger position now to invest and prioritize their subscription business. While overall market projections look positive, monitoring and responding to shifts in macroeconomic factors is essential to inform how best to navigate the future of the digital subscription business.  The full report includes a macro analysis of current market conditions, market forecast, and steps to navigate future subscription growth.

Full research report for DCN members only. Register to download. The link will appear immediately below. If you’re already registered, the login button is on the top right of the page.

Research

Adopting influencer practices can help journalists reach younger audiences

Getting attention and creating awareness is vital to influencers and journalists since both compete in the same attention economy. As part of her Polis Newsroom Fellowship at the London School of Economics, Salla-Rosa Leinonen explores the idea of adopting an influencer style of journalism to bring the audience closer to the newsroom. In her new report Can Journalists be Influencers? she makes the case for newsrooms to support staff who want to experiment with a journo-influencer role to help build credibility among a younger target audience.

A vehicle to reach a younger audience

Influencers create original content with a distinct and authentic voice. Building creditability among a younger audience is an effective tool for marketing, branded content, and endorsements. Effective influencers attract a lot of attention on social channels like TikTok, Snapchat, and Instagram. Leinonen suggests that journalists who want to reach a younger audience implement influencer practices on social media.

Notably, a new study from UK communications regulator Ofcam shows that for the first time, Instagram is the most popular news source among younger people (22%) of teens, with TikTok and YouTube close behind. Further, TikTok users participating in the study said they get more of their news from “other people they follow” (47%) than from news organizations’ accounts (24%). Another study, Reuters Digital News Report, also shows that 40% of young adults, 18- 24, report using social media as their main news source. Therefore, social media provides a critical point of connection for younger news consumers.

As part of her research, Leinonen interviewed Olivia Le Poidevin, a BBC reporter, to discuss the similarities between the journalists and influences. Poidevin noted that journalists use the news as a vehicle to connect to the audience, while influencers use their content. However, Poidevin concludes that there is a convergence between news and content. She states, “Up to now; there has been a clear division between ‘content’ and ‘news,’ in many media organizations as if they were two separate worlds. From the audience’s point of view, they are not separate; they are the same.”

Benefits of being an influential journalist                                         

The report defines the role of an “influential journalist” as someone who gains awareness or fame through more traditional modes of journalism but also uses social media to build their following. Only pieces of their content like article excerpts, snippets, and clips are usually available on social media. They use social media to market, share, and showcase their work with new audiences who are not spending their time on traditional media platforms.

Leinonen cites Sandra Banjac and Folker Hanusch’s research on audiences’ expectations of content creators on Instagram, YouTube, and blogs, compared to journalists. The research finds that both content creators and journalists share many of the same values. These include likeability, the feeling of being directly spoken to, sharing valuable information, and expertise, which all drive followers to seek more information.

Importantly, “journo-influencers” can learn to leverage new storytelling formats without sacrificing the skills and integrity of journalism. They can also connect their journalistic style to their personality to build trust with their followers. This report suggests that journalists rethink their news reporting process as content creation to generate an authentic voice to connect to younger audiences.

Advertising | Research | Supporter Spotlight

Target future-focused companies to make your business “recession proof” 

Rising interest rates and elevated inflation are signals that typically lead to an economic slowdown, and sometimes a recession. Based on numerous client conversations, the concern is certainly on everyone’s mind. 

However, despite these concerns, at MediaRadar, we observe a more textured landscape. Much like the early days of the pandemic in 2020, we don’t see the market moving in unison at all. There are distinct categories of advertising that are sharply up. The key to navigating these times will be remaining agile, tracking and pursuing the healthiest categories of advertising.

We’ve shared some advice and insight on what ad segments are healthiest.

A rising tide in advertising

One conclusion: Advertising is healthiest where there is very high demand. This sounds obvious, but it’s quite profound to see the results. 

  • Higher education. The business of for-pay private colleges and universities is highly competitive. Schools are trying in earnest to lure students back in-person. University ad spend was up 79% YoY during the first half of 2022. Online education was up 264% YoY with a first half 2022 investment of $199mm. 
  • Career training. Advertising for construction and trucking training is up 13X and 11X, respectively YTD 2022. There is massive demand for anyone in both logistics (The Truck Driver Shortage) and construction too (Response Needed to Housing Supply Crisis). For example, there is demand for more than 5.5 million homes to be built and demand for 60,000 truckers immediately.
  • Skill tune-ups. The Great Resignation meant droves left the workforce. Many are tuning their skills for the future. Some examples of where advertising is up dramatically: Executive education ($37mm, +651% YoY), business schools ($52mm, +33% YoY), and culinary schools ($17mm, +1545% YoY).
  • Streaming channels. This is a hyper-competitive segment in-part because so much new programming is being released. Netflix isn’t just marketing for big tent pole names like The Gray Man, but for hundreds of shows each year. Each show typically has marketing to a specific audience profile. Q2 2022 total ad spend for subscription streaming services was $414mm. 
  • New movie promotion. Ad placement to support in-theater releases is growing. Dramatically (Massive Film Marketing Spends Are Back). In MediaRadar we found over $1.2B was invested to promote new releases through June 30, 2022. This is up over 325% YoY from 2021. Spend in 2022 is on pace to rival or exceed 2019. Conclusion: With audiences returning to theaters, studios are investing much to support releases.
  • Travel. Surging fuel prices and angry crowds stuck at airports haven’t slowed airlines and others in the travel market from aggressively marketing. We’re surprised how broad-based the rise is in travel; airlines are just a part of the total travel pie. Ad placement in the first half of 2022 is up 83% YoY to nearly $2.1B. 
    • Cruise lines invested over $363mm in advertising through June of 2022 (up 250% YoY). 
    • Local tourism bureaus are busier than ever. Florida, California, South Carolina, Virginia and Michigan have a combined spend of over $140mm during the first half of 2022. In total 149 destinations ranging from Arguilla to Wyoming around the world are marketing in the U.S. International tourism groups – Brazil Tourism has invested over $1.3mm so far this year encouraging people to visit; last year there was no investment.
    • Airline ad investment is up nearly 140% YoY to $190m in the first half of 2022. While more than 120 airlines market in the US, there’s significant concentration of spend from Delta, Southwest and United. 
  • Tech advertising is on the rise. From Jan to Jun 2022, we see ad spend in this category up 34% YoY to over $6.7B. Some of the increase is due to chip shortages gradually improving. While not out-of-the-woods, many tech companies will be able to see more inventory in the second half of 2022. Some of the surge however is coming from a dramatic rise in marketing for B2B software.
    • Financial software ($196mm, +128% YoY), 
    • Advertising/marketing software ($127mm, +274% YoY), 
    • HR software ($95mm, 417% YoY) 

Rollercoaster categories

With the pandemic abating some and consumers shifting their spending trends, it would be easy to write-off home furnishings and real estate. But the two categories have different kinds of headwinds, which means they may need the support of advertising. 

  • Home furnishings. Ad investment supporting home furnishings was $3.2B in the first half, up 17%. June ad spend however was down 1% YoY. While demand ebbs, furniture inventories are building-up. Firms ranging from Target to Williams Sonoma will need to market in order to off-load product. This may yet drive advertising. 
  • Finance & real estate. Ad spend was up 15% YoY in the first half of 2022. With mortgage interest rates rising and falling prices, ad spend however was down 15% YoY in June. We’ve heard from several sources that local real estate agents will need to work harder to market themselves and their properties, to get them sold. The days of homes “selling by themselves” is coming to an end. 

Post-pandemic headwinds

The fear of recession is not always the reason for declines in ad spend. Instead, society is evolving post-pandemic and this is shifting marketing investment. Here are some specific conclusions: 

  • Alcohol sales. Alcohol (beer, wine & spirits) are down 21% YoY in the first half of 2022. Subscription alcohol services have collapsed their ad spend by more than 90% YoY. Large firms like AB InBev too are spending less on marketing. Big picture: There are numerous studies documenting (ie. Pandemic Drinking) the rise of drinking during the pandemic’s onset. As we’re exiting the pandemic, sales of alcohol are declining. 
  • Restaurants & Bars. As the world opened-up after vaccines were introduced, local restaurants & bars actively spent to welcome back patrons. But today the market is back into a steady-state. Although ad spending is down 25% in the first half YoY from 2021 it’s more consistent with ad placement in 2019.
  • Sweet treats. Dessert & sweets brands decreased their ad investment by 81% YoY. The Milk Bar, for example, is down 99% YoY and Krispy Kreme’s ad spend decreased 76% YoY. With people out of their home, we instead see a rise in ad spend for fitness activities. 
  • Pet supplies. Pet ownership surged in the pandemic. With the initial costs of pet ownership complete (think shots, crates,etc) behind, advertising from pet advertisers is down 8% YoY through June 2022. June is down 7% YoY compared to June 2021.

Lean In

At a time when there is considerable worry about the economy, it is the right decision to study the current ad market. This is a good time to course-correct. What’s important however, and encouraging, is that there are many parts of the economy running strong. Our recommendation is to proactively lean into these segments to best navigate the months ahead. 

Industry-Research | Research

Understanding low-trust audiences and how to reach them

Mental shortcuts, snap judgments, gut feelings: everyone uses these to some degree while navigating an increasingly overwhelming news landscape. However, new research finds that these instant reactions are even more prevalent among the 25% of the population with the lowest trust in news. Low trust audiences are more likely to receive the bulk of their news incidentally while engaged in other online activities such as socializing, shopping, or searching for specific information pertinent to their daily lives. Significantly, low trust aligns with low interest. These individuals are unlikely to visit news sites on purpose. They are also the least-studied segment of the population when it comes to news-related behavior.

It is important that content providers understand the impact of snap judgments because they occur upstream of further engagement with news material. Research from the Trust in News Project out of the Reuters Institute for the Study of Journalism at the University of Oxford offers insights based upon an exploration of the behaviors and habits of this audience segment.

News, cues, and clues

The report, Snap judgements: how audiences who lack trust in news navigate information on digital platforms was based upon a qualitative study that involved participants from four countries: Brazil, India, the United Kingdom and the United States. One hundred individuals were interviewed in depth via videoconference as they used one of three platforms: Google, Facebook, or WhatsApp, between December 2021 and January 2022.

Six types of cues were found to serve as as shortcuts for evaluating news:

  • Pre-existing ideas about news in general or particular news media brands, including reputation and perceived reliability of the news outlet.
  • Social endorsement cues, especially from friends and family.
  • Tone and word choice of headlines, with a skepticism for headlines that seem sensationalized.
  • Visual cues, with a preference for photographs and videos perceived as recent and relevant, as well as numerical data and links to other sources.
  • Presence of advertising or indications of sponsored content are often seen as indicative of bias and profit-driven motives.
  • Platform-specific cues such as Facebook likes and Google search engine rankings. (insert cues graphic)

Comfort and control

The study found low-trust individuals have much more favorable opinions of Google, Facebook and WhatsApp than they do of professional news sources. They consider these platforms valuable tools used in everyday life, whereas many stated most news is irrelevant to them. In fact, some perceive news as an attempt to manipulate them; many stated that politicians control major news sources. In “shoot the messenger” fashion, low-trust users tend to conflate content they dislike or find upsetting with news journalists or brands.

News reports on hot topics such as politics and issues that have become politically charged such as the handling of the COVID-19 pandemic are viewed with particular skepticism by the sample group. Participants indicated that content providers have more incentive to be untruthful about such topics.

Low-trust users are more likely to look favorably upon information presented in a manner perceived as enabling them to make up their own minds. Some participants cited the presence of numerical data or links to other sources as indications that news was reliable, while others praised Google search results as such a resource.

Addressing the audience gap

While some of the 25% have overtly hostile feelings towards news organizations, indifference is more to blame for lack of engagement. Lack of knowledge in how journalism works is also a factor. Those aware of their limited knowledge may be less confident in their ability to decipher content and more likely to ignore it altogether or rely on opinions of trusted social contacts.

Trust-building strategies employed by digital news organizations tend to focus on the behavior and practices of the savviest news consumers. This makes sense if the goal is to solidify one’s base. However, expanding outreach requires more understanding of the less-engaged 25%. Building relationships with new user groups requires deeper understanding of how they engage with their platforms of choice.

This research is significant for digital media providers because it represents data from the least-studied segment of the population, and because the findings are not limited to this group. While some of the cues relied on by these users are under exclusive control of digital platforms, others can be utilized by news providers. The study has compelling implications for how information can best be conveyed to those hardest to reach.

Research

Publishers question AMP’s value

Google’s Accelerated Mobile Pages (AMP) promised a faster and better user experience on mobile while helping publishers boost traffic and generate more revenue. Recently, however, a number of digital publishers have announced that they are reassessing their usage of AMP.

Google introduced AMP in 2015 presenting it as open-source code available for developers. Before AMP’s announcement, Apple, Facebook, and Snapchat announced content partnerships (e.g., Apple News, Instant Articles, Snapchat Discover) which focused on improving the consumer experience but shifted the publisher’s content to their platforms. Each of these proprietary, closed services promised consumers easy access to content but offered limited publisher monetary upside.

Industry executives feared that publisher brands would fade in the background on platforms. Others debated that these channels would provide a path to new and younger audiences, which seemed like a fair trade-off for content control. However, AMP had a unique proposition for publishers: They would keep publisher’s content on the “open web” and, maybe more importantly, they’d also gain a special shortcut to the top of Google search results through a new carrousel.

Fast forward to 2022, and publishers increasingly question the value of these partnerships because they add overhead and offer limited revenue or consumer benefit. In particular, AMP appears to restrict some mobile page functionality like detailed navigational paths and search icons. Given these disappointing results, some publishers are testing life without AMP, while others are phasing it out altogether.

It is important to note that, in December 2020, a lawsuit filed by multiple states accused Google of “anti-competitive conduct” in the digital advertising ecosystem. An unredacted version of the court document became available in January 2022, offering additional details. The added information explains that AMP pages hosted on Google’s servers made it difficult for publishers to use auction platforms other than Google’s ad exchange. It also alleges that Google made non-AMP pages load with a one-second delay. This gave publishers even more reason to be skeptical.

Publisher’s response

Digital Content Next (DCN) surveyed its membership earlier this year to provide insight into publishers’ experience with AMP, its impact, and its use in the future. The results show that most respondents use or have used AMP (96%), with the majority re-evaluating (57%) their AMP usage. Close to half (48%) report that they have they stopped or will stop using AMP.

Respondents report that their top reasons for using AMP were the promise of more search traffic, faster website performance, attracting new audiences, and industry pressure. Unfortunately, respondents reported mixed results in some core benefits like increased search traffic and audience development.

AMP’s reassessment

A recent Wall Street Journal (WSJ) article, Publishers Move to Abandon Google-Supported Mobile Web Initiative, essentially confirms the DCN survey results. WSJ reports that Vox Media, BuzzFeed, Complex Networks, and Bustle Digital Group started “testing or are considering using their versions of mobile-optimized article pages.” These publishers are in addition to The Washington Post, which stopped programming AMP pages last year.

Many publishers said they started to review their AMP usage after Google made algorithm changes in 2021. According to the WSJ, Google made changes “so that pages’ loading speeds, interactivity, and visual stability became factored into its search rankings.” Also, AMP content was no longer exclusively featured in a top-stories carousel in search results. Further, as publishers started testing, they learned that dropping AMP did not affect their load time or search ranking.

Reassessing the benefits of using AMP is triggering many publishers to rethink the control of their content, page designs, ad formats, and paywall. Publishers are rightly taking a harder look at content partnerships to evaluate how they fit their editorial and business strategies and monetization goals. 

Advertising | Perspectives | Research | Supporter Spotlight

Attention: The new rules for how publishers can capture it and reap the rewards

The discussion and debate about measurement in online advertising is rife at the moment. However, one thing is clear: For too long viewability has been used to paint an incomplete picture of ad impact.

We’ve known for a while that viewability is an imperfect metric. And, while standards have improved, the next step in online measurement for brands has been overdue. Media agencies have been working on this problem for a while. They rightly seek to build more sophisticated models in order to spend their clients’ ad dollars within environments that are truly delivering value. 

Though some studies have been done, dentsu international has just released one of the most comprehensive to date. Their Attention Economy research is the product of a three year study involving multiple media partners. The goal is to truly understand the drivers of attention and create a real metric for advertisers to use going forward.

What delivers attention

Critically, the study demonstrated that attention is three times better at predicting outcomes than viewability. They uncovered four key factors that deliver attention:

1. User choice

Forced ads gain more raw attention vs. ads that are easily ignored. However, when a consumer voluntarily views an ad, it results in a significant impact on brand lift metrics, whether they viewed for 2s or 20s. Formats that earned attention yield better, and much quicker, outcomes than outcomes than forced formats.

2. Creative

The importance of creativity on ad effectiveness has been well documented. However, it was important to measure its impact within their Attention Economy framework. The study showed that ads optimized for the Teads platform gained a 49% boost in attention vs the original. This is a result of optimizing TV ads for a mobile experience. These grab attention from the start through use of techniques such as contrast, addition of text, animation, or bold colors. 

3. Relevance

The dentsu study showed that placing ads within relevant context for the reader gives an uplift of Attentive Seconds Per 1,000 of 13%. Recently, IAS conducted a study with Neuroinsights in the U.S. that demonstrated 23% more detailed memory and 27% more global memory for ads that were aligned with the contextual content, compared with those that were not. We have also observed superior branding impact for ads that are contextually aligned.

4. Time in view

Finally, viewability on its own isn’t enough. However, time in view has been confirmed as an important factor for attention by the study. Both video and display ads quantifiably benefit from quality, viewable time. 

Good news

All of the above is fantastic news for publishers. The study clearly shows that premium publishers drive high engagement of users with quality content. and that induces a slow scroll speed. When this is tied in with in-article, outstream video ad formats, it delivers an average of 12.2s of  time in view (even higher than instream) and twice the amount of attention compared to social media.

Ever since viewability became a priority, publishers have suffered. They’ve also been forced to include ad formats that provide sub-standard user experiences, purely because media buyers are focused on it as a metric. But the quantification of attention can shift this balance. Ad buyers will increasingly be able to focus on media plans that are based on attention and deliver clear business outcomes. 

This will bring back to the center stage not the importance of the quality of the content. It also aligns ads within the context that they’ve been placed.

There are many factors of digital media that are changing for the better. Advertisers, agencies and media owners are all embracing an online ecosystem that’s free from third party cookies. They are aware of its impact on both society and the environment and focused on the quality of ad experiences, rather than the quantity. Attention can be a cornerstone of this new landscape, where a range of brand metrics can be more clearly attributed to certain campaigns.

This is where premium publishers can excel, showcasing greater value to brands than ever before and securing a greater portion of online ad revenue that is currently held in silicon valley. This can be done whilst simultaneously creating even greater trust with their engaged readership and therefore helping develop a truly sustainable media ecosystem. 

Industry-Research | Research

Algorithmic image recognition and “what’s important”

Facebook, Instagram, and Twitter use algorithmic processing for image analysis and sharing. The platforms try to understand the content of these images, and they algorithmically detect the persons and objects within these images at the pixel level. Benjamin N. Jacobsen’s research, Regimes of recognition on algorithmic media, examines how algorithmic media shapes and controls how people see the social world. He defines the concept of regimes of recognition as the algorithmic tools, techniques, and practices that social media platform use to decide recognizability within their platforms. 

The platforms use algorithms to crop images to generate engaging content. Applicable to Jacobsen’s research, the algorithm systems learn to detect and weight certain features in images rather than others. In other words, the algorithms actively generate what is recognized. He agrees with researcher Louise Amoore, who believes social platforms decide what images are interesting and recognizable. Amoore states, “they actively generate recognizability as such so that they decide what or who is recognizable as a target of interest in an occluded landscape.”

Twitter’s detection algorithm

In September 2020, consumers complained that Twitter’s image-cropping algorithm favored white faces over black faces. One example showed that the algorithms consistently cropped out images of former president Barack Obama. Experiments with stock photo models, cartoon characters, and even white and black dogs resulted in similar detection biases. Eventually, Twitter’s chief design officer, Dantley Davis, agreed there was a racial bias in the algorithm. He added, “the algorithm is not explicitly racist since it does not make its decision based on particular faces but rather on the contrasts that are calculated from the pixel values of the image.”

According to Twitter engineers Lucas Theis and Zehan Wang, the company first used facial recognition to auto-crop images. However, it often awkwardly cropped faces not centered within the picture. Twitter then moved to use deep saliency prediction networks to find the “most interesting part” of the image. Saliency maps use predefined areas of images to evaluate the pixel contrasts between different image regions. These data-trained neural networks and other algorithms find and then crop around the most engaging area of the image. Unfortunately, as the algorithms decide what is uploaded, they also determine what is nonrecognizable and set conditions for who is visible on the platform.

Deciding recognizability

The algorithm disregards socio-cultural contents and context in its processing of images. Regimes of recognition can easily make certain people non recognizable — focusing on specific features of an image and ignoring others. Algorithmic media platforms produce rules for what is visible and what is not visible.

Jacobsen questions the shaping, organizing, and automating parameters of cropping images. He sees decisions of inclusion and exclusion as a fundamental political question. Saliency detection algorithms rest on the assumption that some things deserve attention and others do not. Further, Twitter’s role in cropping people’s images (algorithmically) decides what elements in images are redundant. This begs a larger question as to why social media platforms need to edit people’s uploaded images at all?

Social media platforms algorithmically shape and organize people’s factors of attention. Twitter offers a prime example of the algorithmic processes in how it cropped out out black faces because it did not recognize the image. This sends a signal that that what is non-recognizable is unimportant. Further research is needed to examine the role (and potential biases) of algorithmic cropping, techniques, and results of these tools on other social platforms.

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