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Advertising | Industry-Research

The industries surprising us with their ad spend in correlation to Covid-19

There is no doubt that Covid-19 had a negative effect across industries. However, some sectors, including Consumer Packaged Goods (CPG) and bicycle brands, have actually done well during this time. Throughout the pandemic, these industries have experienced significant and unprecedented increases in sales. With those increases, the same industries upped their advertising spending as well. 

Here at MediaRadar we took a deep dive looking for industries that have increased ad spend levels in response to Covid-19, as well as those working towards a recovery. Back in June, we analyzed how the ad industry fared during the pandemic, highlighting the industries that had just begun bouncing back. Now, three months later, we’ve reassessed how those industries, plus others, are progressing. Based on what we’ve found, things are continuing to look up. 

Industries that increased ad spend

Pet brands – Pet adoptions experienced a dramatic increase during the pandemic. In fact, the Humane Society noted that in March and April there was a 34% year-over-year (YoY) increase in the number of pet adoptions. Capitalizing on this trend, pet brands (i.e. pet food, grooming supplies, etc.) upped their advertising, with the most recent weeks spend gap showing that pet brands’ ad spending has jumped 52%, YoY. 

Bicycles – Covid-19 caused many to avoid public transit. It also afforded people more time to take bike rides for leisure and as alternative exercise to gyms. These are just some of the reasons why consumer interest in bicycles significantly spiked during the pandemic. Since March, ad spending from bicycle brands is up 56%, YoY. As a matter of fact, the N.P.D. Group, a market research company recently reported that in March, sales of commuter bikes was up 66%, YoY, and sales of leisure bikes was up an incredible 121%, YoY. 

CPG products – As consumers have become extra cautious, and care more than ever about cleanliness, bath and shower products, such as body wash, soap and hand sanitizer have increased marketing efforts. Since March began, ad spend from bath and shower products is up 81%, YoY. Unilever reported that in Q2 of 2020, body wash sales increased 12%, hand soap sales increased 155% and hand sanitizer sales increase was off the charts. Ad spend from home fragrance brands are also up 51%, YoY. Since March began, every week except for one, ad spend in the CPG category is up when compared to its 2019 counterpart. If you’re going to be stuck at home all day, it might as well smell nice.

Commercial furniture –  It probably comes as no shock that as the world was forced to work from home. Thanks to Covid-induced lockdowns, the commercial furniture category saw an extreme increase in ad spend. According to a survey by YouGov, 54% of office workers didn’t have any sort of home office set-up before the pandemic. With everyone now purchasing office furniture for their homes, commercial furniture ads, normally reserved for the world of B2B, have entered the B2C sphere. Year-to-date, ad spend from commercial furniture brands is up 225%, YoY, with no signs of slowing down. 

As reported on DCN in June, additional industries to increase their advertising spend in response to Covid-19 include RVs, food subscription boxes, video games, skincare and childrens toys. Each of these industries is still outspending their 2019 levels, with food subscription boxes jumping 235% and RV’s jumping 378%, YoY, since April, respectively. 

Industries on the Mend 

Automotive – The automotive market continues to slowly but surely recover, as ad spend nears levels similar to last year (2019). During the week of August 10th, automotive ad spend was down just 8%, YoY; the industry’s best mark since the pandemic began. For automakers who are still reporting sales, results are getting better by the month. While Toyota’s sales were down YoY in July, they were still at their highest point since the pandemic began. Also in July, Kia and Hyundai were both roughly flat, while Mazda’s sales were up 3.4%, YoY.

Hospitality – Hotel brands seem to have found a new equilibrium for weekly advertising. Since mid-June, ad spend levels have consistently remained around $4M per week. While this is up nearly four times when compared to April and May, it remains down by about two thirds, YoY. According to STR, a hospitality industry data firm, US hotel occupancy for the week ending August 15th was at 50.2%. While this remains down 30%, YoY, it was the 17th week of increases in the past 18 weeks. 

Bars & Restaurants – Bars and Restaurants are seeing ad spend slowly return to levels consistent with last year (2019), with national chains being the main drivers of the recovery. During the week of August 10th, ad spend was down only 10%, YoY, its best level since mid-March. According to NPD, customer transactions at major restaurant chains were down 44%, YoY, in mid-April, its worst point. But, after 21 weeks of being down double digits, sales were down just 9% during the week of August 10th, signifying major improvement. 

Electronics – Consumer electronics experienced a major spike in sales during the early days of the pandemic, however, it quickly fell off. Best Buy reported a surge in sales as consumers transitioned to work from home, with online sales alone up 242% in Q2, YoY. However, Best Buy’s executives were quick to say this was a temporary spike as people adjusted to quarantine life. During the week of June 8th, after ad spending hit a low point of -70%, YoY, spend has been recovering and is now down only 20%, YoY, with sub-categories including cell phones, computers and WiFi equipment helping to drive the recovery. Back-to-school may have provided another boost, as parents are much more likely to be shopping for computers and tech instead of clothes or backpacks this year. 

Shock and recovery

The early days of the pandemic were a shock to the entire country, as well as most of the ad industry. While the road to recovery will not be easy or fast for every industry, our data does show that many are making strides. And while it may not always be the usual players buying up ad space, we’ve found that advertising remains an important part of any industry’s strategy, so long as they have products they can sell.

Industry-Research

Despite Covid-19 setback, PwC forecasts modest media and entertainment growth

Consumer behavior was transformed by the shelter in place lifestyle during the pandemic. Stay at home policies not only impacted the way we work and shop but also how we consume media. We’ve seen significant changes in consumer media habits as well as those of media infrastructure. Closures of movie theaters and shutting down film and television productions altered our entertainment sources.

To access the effects of the coronavirus and adjust the entertainment and media (E&M) forecasts, PwC delayed the release of its annual Global Entertainment & Media Outlook. The new assessment comes with the realization that for consumers, E&M is centered in the home. It’s now more remote, more virtual and more streamed. PwC estimates that in 2020 the E&M world declines by 5.6% or $120 billion in absolute terms compared to 2019. However, they project the sector grows by 6.4% in 2021. Further, overall revenue grows 2.8% at a compound annual growth rate from 2019 to 2024.

Additional findings:

  • Overall, advertising is expected to recover slowly through 2024. Digital advertising is the important vehicle with mobile advertising revenue as its growth story. Mobile ad revenue is expected to grow at 88.4% with a 60% share of revenue.
  • Cord-cutting continues to rise especially in North America and new over-the-top (OTT) services challenge the global dominance of streaming giants. pWC forecasts the OTT market to almost double in size from $46.4 billion in 2019 to $86.8 billion in 2024.
  • Subscription video-on-demand (SVOD) revenue is expected to exceed box office revenue this year. It’s projected to rise more than twice the size of box office revenue by 2024. Related, global cinema revenues are expected to drop plunge 66% in 2020 and is unlikely to regain momentum.
  • Newspaper revenue declines continue through 2024 declining advertising revenue combined with high paper production and distribution costs.
  • Consumer magazine competition continues to increase from major tech players, magazine aggregators and digital publishers.

Covid-19 fast-tracked many new business strategies for media companies. This shift amplifies the need for media businesses to closely follow changes in consumer media behavior. The ability to pivot operations to meet consumer needs helps generate and diversity revenue opportunities.

Industry-Research

Americans are critical of news institutions. That’s not all bad

Good and honest journalism informs the public, increases knowledge, and offers a healthy dialogue on democracy. And, to hold journalists to that standard, Americans believe their wariness of the news media is healthy for society. They think it is a good practice to keep their guard up when obtaining news and information in order to help determine fact from fiction.

Recent findings from a a year-long Pew Research Center study shows that close to two-thirds (63%) of U.S consumers think it’s best if society questions the news media. Nevertheless, half (51%) of consumers are confident that journalists act in the best interests of the public. While this still leaves many consumers less confident, a full three-quarters of Americans believe their level of confidence in journalists can improve.

Trust and transparency

Accurate news information is critical for news organizations. Six in ten consumers expect the news they receive to be correct. However, more than two-thirds (69%) of consumers believe news organization try to cover up their errors. This underscores a distrust of the news media. Many think mistakes occur due to careless reporting (55%), the race to break a story (53%), and a direct intent to mislead (44%). Transparency in corrections is an opportunity to grow consumer trust. Just over half of American’s say that seeing corrections from news organizations makes them more confident in that outlet.

There’s a high correlation between consumer trust and the transparency of a news source. Trust and transparency work together offering a system of checks and balances in accountability. This Pew analysis makes it clear that consumers are concerned with news organizations’ answerability.

Close to three-quarters of consumers (72%) think that the news media does a poor job explaining their source of their money. Sixty percent of consumers report news organizations are not forthcoming about conflicts of interest. In addition, more than half of consumers think the news media lacks transparency in telling audiences how they choose their sources (57%) and whether a story is fact or opinion (55%).

Consumer connection

A personal connection with news stories often leads to positive attitudes toward the news media. Further, more than half (55%) of consumers feel that it is important to connect with their news sources.

However, 59% of Americans report that news organizations do not understand people like them. And 57% believe that their news outlets do not value them. This results in close to two-thirds (63%) of consumers lacking loyalty to their news outlets. Importantly, those who feel that their news source values them, are much more likely to think their news is accurate and to think their news outlet is transparent.

Diverse representation in the newsroom is critical today. Notably, Black adults are more likely than white adults to say different aspects of personal connections with news organizations are somewhat important. They also are far more likely to say it is important to see themselves both in news coverage and in the newsroom.

This Pew analysis highlights the value of consumers and the news media building a connection with one another. Authentic consumer criticism of the news organizations and their journalists can help better inform conversations. It allows for thorough examinations of the facts and provides assurance of truth in journalism.

Industry-Research

Publisher revenue down 2.3% with revenue diversification alleviating ad declines

Digital publishing revenue declined 2.3% year over year against Q1 2019, according to the latest quarterly Digital Publishers Revenue Index (DPRI) from the Association of Online Publishers (AOP) and Deloitte. During the first three months of the year, income from subscriptions experienced strong growth of almost 20%. However, display and recruiting advertising both suffered significant declines, falling by 22.5% and 12.8% respectively in Q1 2020.

Diversification

Publisher revenue diversification efforts helped offset the ongoing decline in digital ad revenue for publishers, as the duopoly continues to account for the vast majority of growth in this sector. This decline was, of course, intensified by the pandemic.

On a 12-month rolling basis, subscriptions and miscellaneous revenues performed strongly, growing by 18.8% and 25.9% respectively. Online video revenue grew by 10.7% and sponsorship experienced a slight increase of 3.2%. Growth in these areas however failed to offset the substantial reduction in revenue from display advertising formats — down by 17.1% year-over-year. Overall, digital revenue fell by 4.0% on a 12-month rolling basis.

Despite downturns across multiple revenue areas, the B2B sector was able to maintain revenue by growing sponsorship (10.9%), online video (10.6%) and subscription (2.3%) income.

Priorities

A growing number of AOP board members reported prioritizing non-advertising revenue growth and cost reduction strategies. According to the DPRI, almost 90% of publishers cited non-advertising revenue growth as a high priority for the next 12 months, up from 78% who said the same in Q2 2019. Meanwhile, 78% of publishers identified cost reduction as a high priority for the next 12 months, up from 44% who were focusing on this area in Q2 2019. None of the publishers surveyed reported seeing expansion by acquisition as a strategic priority over the next 12 months, reflecting their need to focus on existing business operations.

As Richard Reeves, Managing Director, AOP, commented, “Ten years ago, display advertising made up 58% of digital publisher revenue and subscriptions only 7%. Subscriptions now account for 22% of total revenue; with display advertising having shrunk to 42%. As income from display continues to decline, the shift towards subscriptions and other diverse revenue sources is only set to grow, accelerated in part by the pandemic. The publishers that adapt to this change will be the ones that have the most to gain when the storm passes.”

Advertising | Industry-Research | Perspectives | Video

Get your ad message right so that new TV audiences tune in

In a world turned upside down, TV – in all its current forms – serves as a vital anchor. It is a trusted provider of news and information, as well as a continual source of entertainment and comfort. It unifies families and friends through shared viewing experiences – even when they are in different locations. And it facilitates new routines, which helps people through these testing times.  

TV consumption has spiked, with a Thinkbox.tv weekly viewing report from May 2020 revealing UK viewing is up 21% year-on-year. Even as the country begins to return to a socially distanced version of normal, staying home will be the default position for many. And this will prolong consumers’ reliance on TV.

This trend is positive for advertisers. This is particularly true as 54% of consumers are paying as much or more attention to ads than they were before lockdown began, according to a recent FreeWheel survey. But to make the most of these larger audiences, advertisers need to understand the changing habits, preferences, and expectations of consumers. This will allow them to make informed decisions around messaging, tone, and delivery channel.   

Match the messaging to the moment

Ad messaging needs to relate to what is happening during current times, to be contextually relevant and to resonate with consumers.

Our survey revealed that the vast majority of UK consumers want advertising to be relevant. Three quarters of respondents feel that brands should acknowledge the present situation in their ads. Ads can be used to reinforce preventative measures such as social distancing and hand washing. They can also show customers that brands are there to help them with lockdown related challenges.   

From Nationwide to NatWest, financial services businesses are recognizing the current situation in their advertising. They are reinforcing their support for customers and outlining how they can still access services from home. Supermarkets have also brought the current context into their messaging, such as the Co-op’s campaign to support food redistribution charity FareShare.       

Set the right tone for the vertical   

Just because consumers want ads to relate to the current situation in some way, that doesn’t mean messaging needs to be sad or negative. In fact, humor should play a central role in advertising. True to form – the majority of Brits (58%) say they want to see ads that make them laugh. Many brands have taken a fun and light-hearted approach to messaging such as Maltesers with its “Look on the light side” campaign and Hotels.com with its humorous “Just stay home”’ messaging.   

Setting the right tone often depends on the vertical in which a brand operates. Despite ongoing uncertainty, a quarter of consumers want to see TV ads relating to travel. They also want emotive ads that make them dream, providing beacons of positivity in challenging times. Just because viewers can’t go to their dream destination right now doesn’t mean travel brands shouldn’t maintain awareness and advertisements.

Online search data reveals that millions of travelers are in escapism mode, discovering and dreaming of life without restrictions. So, reaching out to these consumers now can make all the difference in the medium to long-term. Sandals Resorts is one travel brand continuing to spend on TV ads. They acknowledge the reality of the current situation, but remind viewers that their holiday havens are ready and waiting.

Choose the right delivery channels

The term “TV” now encompasses a wide range of delivery channels. These include traditional linear TV, broadcaster video-on-demand (BVOD), and subscription streaming services. Much media attention is currently given to the rise of video streaming. However, FreeWheel’s survey found that linear TV is still the most watched type of platform, with 34% of consumers selecting this as their first choice compared with 26% for paid streaming services and 14% for catch-up TV.

In the current climate, audiences rely on broadcast TV for important updates, with over 27 million viewers watching the Prime Minister’s “road map to recovery” announcement on Sunday 10th May 2020 and almost 13 million viewers watching the Queen’s VE day address. Primetime remains a significant moment for people to connect with others. In France, primetime audiences broke the all-time viewers record on Monday 13th April 2020: 36.7 million watched French President Emmanuel Macron’s speech, on TV and online. That represents a 94.4% market share according to Mediamétrie.

Advertisers can make use of multiple channels to reach consumers when they are fully engaged in TV content. And they can use different platforms to reach different audiences or demographics. As TV content across all channels becomes more addressable, advertisers will be able to target audience segments defined by specific criteria, regardless of the platform they are using or the content they are watching.    

Tune in

In these unprecedented times, consumers are turning to TV – in all its forms – for information, entertainment, and routine. And they want to hear from brands; only 8% say that it should be a priority for brands to stop advertising. Armed with important consumer insights, brands can make use of a boom in media consumption to reach and engage TV audiences with useful, appropriate and contextually relevant messaging. Media and brands have an important role to play, they have demonstrated that they can be agile, reinvent themselves and be creative. In future, companies that listen to viewers are more likely to better match viewers’ user journey, expectations, and needs.

Industry-Research

Covid-19’s community connection sparks engagement with local media

The Covid-19 pandemic and the work-from-home lifestyle are affecting consumers’ media consumption behavior, including engagement with local news. From streaming music to OTT viewing, multitasking with media during the work day is a definite. An analysis from Nielsen’s Remote Workers Consumer Survey shows a larger share of media time is now spent on digital and connected TV devices. The Nielsen survey included 1,000 adults who worked from home prior to and during the coronavirus.

Consumers report their top three workday activities include listening to music (AM/FM and streaming), viewing OTT content and increased social media activity.

Local news consumption

While drive time to work decreased, consumption of local news did not. In fact, news (47%) as a content category leads in viewership compared to comedy (40%) and movies (36%).

Not only did the consumption of local news via digital media increase, it also increased across traditional channels. As concerns and restrictions grew, news briefs were a daily reality in the early days of the coronavirus. Consumers tuned to local news outlets to stay informed. A separate Nielsen viewership analysis between early February and early March registered notable spikes in local news viewing.

Viewing data from Nielsen’s Local People Meter (LPM) in 25 of the largest markets showed viewership in local news increased. Most notably, viewership increased among Persons 2+(7%), among Persons 2-17 (20%) and among Persons 25-54 (10%). Clearly, local news is present in peoples’ daily routines. Increases in local viewership respectively tracked increase Covid-19 positive case levels.

In addition, a study from NewsWhip shows local news sites such as dallasnews.com, wsmv.com, wcvb.com and wndu.com rank highest in user engagement among top news and entertainment media brands. And local sites such as oregonlive.com and wfla.com rank alongside national and international news sites in top related coronavirus articles.

Quality and quantity

Consumers are also seeking out established media brands for information on the public health crisis and the economic consequences. Interestingly, the desire for virus related news and the latest facts are curbing interest in opinionated and partisan sites.

Further, supporting the Nielsen survey and viewership data is a study from Horowitz Research. The findings here show that more than half of US consumers (58%) report accessing more local news during the pandemic than before (38%). Nearly a third of consumers (29%) also report they now consume more local public radio and local/regional newspapers. The increase in local news consumptions is most noticeable among persons 18-34. More than half of this demographic (53%) report they are watching more local news since the Covid-19 crisis.

Working from home offers choice in content consumption. The change in business workplace to the work at home environment offers a new connection point in digital media. Access to local digital news sites provides a strong  community focus and serves hyperlocal needs. It also offers marketers an active environment to engage with consumers and integrate at a local level.  

Industry-Research

Consumers believe that data privacy is a human right

As we know, data monetization is big business for many companies in the digital ecosystem. It’s an integral and lucrative part of programmatic sales’ third-party ad targeting capabilities. However, most of this data is collected, sold, and used without consumer consent.

Given the steady increase in the value of data and data collection, consumers are growing ever more concerned about their privacy. In fact, a new study from KMPG, finds that nearly all U.S. consumers (97%) report that data privacy is a concern. The majority of consumers (87%) view data privacy as a human right. And, unsurprisingly, consumers worry about what companies are doing with their data (54%).

Seeking governance

In light of new regulations in place, General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the U.S., privacy is a critical focal point in digital media. Front and center are new data protection laws to guide the online data collection process.  

Consumers overwhelmingly align with the above legislation. More than 90% agree that the data privacy rights of the CCPA should extend to all Americans. Along these lines, four in five (84%) consumers say that they are open to state legislation giving consumers more control over their data.

Importantly, Americans want companies to be transparent in their data collection and usage. They seek regulations similar to GDPR. Nine in ten respondents (91%) agree they have the right to delete personal data and the right to know how their data is being used.

Paying closer attention to online data practices

While U.S. consumers are paying more attention to how brands use their data, they also need to take steps to secure their privacy. KMPG’s research shows that consumers engage in risky online behavior. Eight in ten consumers think it’s a risk to use the same password on multiple digital accounts (78%) or to use a credit card online while on public Wi-Fi (75). Yet, more than 40%, respectively, participate in both of these activities.

Covid 19’s impact on privacy practices

The Covid-19 pandemic also presents data privacy concerns. Three-quarters of Americans are thinking more about data privacy issues during Covid-19. However, a majority are willing to share their personal information to keep others safe and to return to work faster.

Strong willingness to share personal data to safeguards others against Covid-19:

  • 89% would allow places/employers to take their temperature.
  • 85% would share their COVID-19 diagnosis with their employer.
  • 67% would share their personal location data to help track COVID-19 cases.
  • 67% would share their lifestyle information as it contributes to COVID-19 exposure with their employer.

Ad tech companies collecting online data and advertisers using it must rethink the programmatic scenario. GDPR and CCPA are important industry reset buttons, even if forcibly, toward an ecosystem of transparency. It’s the right step to renewing consumers trust.

Industry-Research

Social news consumption leaves people media-malnourished

It’s no surprise that social media is where consumers, especially young adults, get their news today. According to a new study from Pew Research Center, 18% of U.S adults use social media for political and election news. Unfortunately, this cohort lacks both the depth and breadth in terms of political news.

Politics

This study finds limited exposure to election news for those using social media as their political news source. Only 8% of consumers who receive most of their political news from social media report that they are following 2020 election news “very closely”. Both broadcast news followers and print news followers are more than three times more likely to follow election coverage closely (37% and 33%, respectively) than social media news followers.

Further, consumers who mainly use social platforms as their main source for political news appear to pay much less attention to news in general compared followers of other news sources. In fact, those who get their political news from cable TV are nearly twice as likely as those in the social media cohort to follow (“fairly closely”) election candidate news (70% vs. 36%).

Current events

This Pew report also analyzed data from previous studies, such as Pathways & Trust in Media. This provides insight into how well consumers that use social media as their main news source are informed on current political news. The analysis found that those in the social media group were among the least likely to have heard a lot about each of six current event stories. Further, they were also among the most likely to have heard no news on each of the six events.

Another analysis in this report identified 29 fact-based news-related questions in five Pew studies across the last nine months. The questions included topics on the presidential election, the economy, the political parties, Donald Trump’s impeachment, and the coronavirus outbreak. Pew’s analysis of the 29 questions shows a high correlation between the least accurate responses and consumers who rely mostly on social media for political news.

On average, 43% of social media news consumers answered correctly compared to 63% among those who rely mostly on news websites or apps and 56% among those who turn mostly to network TV. The only comparable group to social platforms are adults who watch local television (37% of correct answers).

False information

Unfortunately, consumers who rely on social media as their main source of political news are more likely to be exposed to false information. In fact, about a quarter of U.S. adults who get most of their news from social media are more likely than others to hear false information or unproven claims. With multiple conspiracy theories centered around the Covid-19 pandemic, about a quarter of U.S. adults who get most of their news through social media report that they heard “a lot” about Covid-19 conspiracy theories. In addition, about eight-in-ten (81%) report they heard at least “a little.” Hearing conspiracy theories is much higher among those who use social media than among those who use any of the other six platforms (broadcast TV, cable TV, print, etc.) for their political news

Demographic characteristics

The Pew study shows that those who rely on social media as their main source for political news tend to be less well-informed. Social media does little to help educate their users how to identify trusted news sources. Consumers need help to navigate through feeds where premium and trusted news brands are right alongside misinformation and disinformation.

Industry-Research

Cord-cutting accelerates in the wake of the Covid-19 pandemic

From business model shifts to consumer behavior, the pandemic has accelerated changes in the media business. Many of these shifts were already underway, of course. And it is likely many of these changes are likely here to stay. A new report from Roku confirms that streaming media consumption and binge watching are up. However, while traditional television also experienced a lift during the early months of lockdown, Roku sees an uptick in the trend towards cord cutting and cord shaving.

Roku’s annual study found that approximately 32% of U.S. households don’t have a traditional pay TV subscription. Another 25% of households, which Roku identifies as Cord Shavers, have cut back their service. Amidst the Covid-19 pandemic, financial woes and concerns about the economy are driving further interest in cord-cutting and cord shaving. Roku reports that 45% of these Cord Shaver households stated they are likely to cut the cord fully in the next six months.

Roku’s 2020 annual Cord-Cutting Study found that:
  • TV audiences are watching more ad-supported content and flocking to extended free trials of subscription services.
  • About half of all TV households surveyed said they are streaming more free-TV during the Covid-19 pandemic than they did before.
  • Binge watching is on the rise in 2020. More Americans say that they regularly stream many episodes back to back in one sitting.
  • Americans say reducing home entertainment expenses is the number one reason for cutting the cord.
  • Despite 28% saying that the loss of live sports prompted them to cut the cord, the majority of Cord Cutter households say that the return of live sports won’t entice them back to traditional pay TV.

Streaming is even more appealing now. Consumers cite convenience, a growing selection of content – including free, ad supported options – and on-demand access as reasons to cut the cord. Around 40% of recent Cord Cutter households shared that free TV or extended free trials to a streaming channel helped convince them to cut the cord. And more households than ever are watching free, ad-supported movies and TV shows. Roku’s research shows that Cord Cutting is accelerating is the U.S., and at a greater pace in 2020 than in previous years – a trend that is not likely to slow even as the economic impacts of the pandemic eventually diminish.

Industry-Research

Uneven content policies and moderation practices: How YouTube’s standards fare

Publishers establish editorial guidelines to provide a common foundation for journalists, creators, and producers. These guidelines provide a common language to identify an editorial framework and boundaries. Guidelines are often questioned, reevaluated, and updated in a process that allows the editorial voice to evolve over time. Editorial guidelines also present a check and balance system for standards and content moderation, which in turn creates a safe space for advertising.  

Unfortunately, the editorial guidelines of social media platforms appear to be a complex maze of mixed messages. This results in unhappy content producers – given opacity around monetization of some content – and risky business for marketers.

A new research report, Tiered Governance and Demonetization: The Shifting Terms of Labor and Compensation in the Platform Economy, examines YouTube’s governance and guidelines including its content moderation practices. The authors, Robyn Caplan and Tarleton Gillespie, investigate the complex landscape of YouTube, the largest video hosting platform in the world. They explore YouTube’s monetization models and their attempt to provide a foundation for governance.

Monetization strategy

One problem is that they frequently include different governance strategies for different creators. The result is that creators struggle to remain inside the viable boundaries for monetization.

YouTube offers a partnership program for content creators and shares advertising revenue with them. Plain and simple, the more user-generated content, the more views, which allows YouTube to collect user data to support targeted advertising. And the more ads served, the more revenue generated.

The YouTube Partnership Program (YPP) is intrinsic to its revenue model. Essentially, it is a form of unpaid labor that generates enormous revenue for the platform. YouTube’s partnership program encourages users to make more content with an offer of compensation as ads run against that content.

YouTube’s content creators vary from amateurs, professionalized amateurs, legacy media organizations, and YouTube’s contracted producers of original content. One particularly tricky aspect is that each is held to held to a different standard and entitled to a different monetization offering.

A few other social platforms developed similar programs, but YouTube’s is by far the largest. According to Caplan and Gillespie’s research, YouTube’s lack of clarity and complicated rules appears to do little in the way of effective content moderation or fair compensation. Further, the fact that YouTube works with multiple creator tiers fuels issues of inconsistent treatment. Consider how editorial standards would impact:

  1. amateur creators who are not dependent on revenue,
  2. creators who are dependent on revenue
  3. professionals building their reputation for secondary distribution, or
  4. media institutions who partner for distribution power.

Enforcement practices

YouTube’s policies vary, with little explanation, in dealing with content that violate their standards and practices around sexual content, violence, harassment, hate speech, or misinformation. Actions include content demonetization, removal of individual videos, or the suspension of entire accounts. They might also place videos behind age barriers or include interstitial warnings indicating graphic content. YouTube may also remove videos deemed to infringe on copyright infringement, violate privacy, or simply spam.

Caplan and Gillespie summarize the YouTube problem:

  • YouTube stated values as an open platform of expression are in direct conflict with their cautiousness regarding acceptable content and the financial and algorithmic incentive structure.
  • YouTube’s governance offers a different set of rules for different users. These include different material resources and opportunities for creators to different procedural protections and different expectations of fairness.
  • Given the ambiguity in the guidelines, creators develop their own theories as to why their content is demonetized.  

Caplan and Gillespie offer examples of YouTube’s randomness in enforcing its standards. For example, it appears that YouTube determines participation in YPP based on an algorithmic mix of popularity, engagement, and propriety.  However, according to many independent content creators, YouTube also allows inappropriate content to circulate and amplify based on popularity and the ability to generate revenue for the company.

YouTube’s participatory video culture does not bode well for advertisers’ demand for quality and predictability. It appears to be a system based on rewarding audience size and celebrity stardom. Unfortunately, given this revenue model, when YouTube adds new layers to its already complex labyrinth of standards, it fails its creators and fails to effectively moderate content.

Industry-Research

The market is flooded with streaming options. But are consumers satisfied?

As more media companies enter the streaming video marketplace, consumers are presented with more choices and content. The good news is that, overall, consumers value the video subscriptions they subscribe to. Hub Entertainments’ annual Monetizing Video report finds that 62% of viewers feel they get at least a “good” value from their TV subscriptions. Hub’s research was conducted with over 2,000 broadband users, age 16-74, who watch at least 1 hour of TV per week.

Significantly, holding subscriptions in high esteem is not necessarily a side-effect of Covid-19. While lockdowns helped drive viewership and overall value, we have seen high levels before shelter-in-place orders. In fact, DCN’s Digital Subscription Economy research showed that 64% of consumers reported their subscription(s) offer high value.

Valued services

Across the different video/TV services consumers use, streaming services topped the list in terms of value for the money. Seven in 10 rated Netflix, Hulu, Disney+, and Amazon Prime as excellent or good value for the money. Boasting deep libraries of content, streaming are convenient and appealing entertainment resources. In contrast, only four in 10 consumers ranked traditional pay-TV as a good value for the money.

Consumers estimate they spend $94 per month for all their TV subscriptions combined. However, they believe they should only pay $72 per month. It is interesting that, even though they are paying $22 more each month, subscriptions services are still perceived as a good value.

Actual vs. reasonable price

Breaking down the payments across the television categories, traditional pay-TV subscribers (no SVOD) are the most likely to feel their total TV bill is higher than reasonable. They estimate they are paying $106 for their subscriptions but think they should only pay $69. The actual vs. reasonable gap is $37 more than they think they should pay.

Pay-TV only (including SVOD) subscribers estimate paying $107. However they think they should only pay $79, making the actual vs. reasonable gap $29. Consumers paying for streaming-services only (no pay TV service) estimate they are paying $60 and think they should only pay $54. This is the only cohort that thinks they are paying the appropriate amount.

Consumers ranked the kind and amount of content a platform offers right up there with pricing as the most important features. Least important features included both recommendations and notifications.  

Streaming theatrical releases

Accessing theatrical releases at home is of high appeal among adults 18-34 years old. In fact, 63% of young adults, a key target audience in the theatrical movie business, say they definitely/probably would pay to stream a movie at the same time it’s released in the movie theater. Consumers 35+ differed greatly. Only 12% said they’d definitely/probably pay to stream a movie at the same time released in a movie theater. Further, 18-34 years olds show a strong willing to pay with 65% would definitely/probably pay $15 dollars, 65% would definitely/probably pay $25 and 57% pay $50.

Streaming theatrical releases is a completely different distribution dynamic, altering the window availability across the distribution timeline. The recent release of the big Broadway musical “Hamilton” on Disney+ serves as a promising start with more than 725k global downloads. This marks a 47% increase in app downloads compared to the average four weeks in June. Of course, not all movies will have “Hamilton” level success. Monitoring and evaluating  new distribution patterns will be critical to understanding how wide-spread streaming and its adoption becomes for theatrical release.

Industry-Research

Analyzing the past, present, and future impact of Covid-19 on readership

We’ve spent the past several months analyzing the impact of Covid-19 on audience engagement throughout the world. With a few months’ worth of engagement data available, we wanted to take a deeper look into answering the following questions in the context of the crisis:

  • How much are people reading? Namely, has their engagement risen or fallen in any significant way and how that engagement has changed over time with the rise and fall of case numbers.
  • Where are readers finding content?
  • Which content, and which types of content, have readers found most engaging during this period?

For this analysis, our Data Science team reviewed more than 175 billion pageviews from the beginning of the year across 56 million articles, about 7 million of which were about Covid-19.

Traffic and consumption patterns among audiences

First, we analyzed consumption patterns in terms of the total number of articles published each day on Covid. We saw a small rise in the number of articles as the crisis began to grow internationally. Then there was a huge peak in coverage in mid-March, around the time that the U.S. and U.K. announced major policy changes. 

That was followed by a 45% decline in the number of coronavirus-related articles between that mid-March peak and the end of May. 

We then looked at consumption patterns among audiences (seen in the graph above), the overall traffic numbers, broken out by pageviews on non-Covid articles and Covid articles, show that: 

  • Journalists were covering coronavirus before it truly caught the public’s attention. There were more than 7,000 articles per day published on Covid starting at the beginning of February, but our data shows that audiences weren’t paying attention until the very end of the month.
  • Traffic and coverage peaked at the same time, the second and third weeks of March.
  • Traffic has declined faster than traffic, with a nearly 60% decline in traffic from peak to the end of May.

The latter point aligns with our assessment that consumption patterns in recent months have suggested the onset of reader fatigue.

How reader behaviors varied in certain regions

Our next step was to see if country trends reflected those patterns, so we analyzed engagement across countries where we were able to get data about new cases.

In the U.S., we saw that people started reading about Covid-19 significantly before new cases were exploding. The peak day for traffic on coronavirus stories was 36 days before the peak day of new cases.

Yet, engagement with Covid stories has waned at a much faster pace than actual cases — new cases have only declined 20%, while traffic has declined about 80%.

In Europe, we saw a similar pattern of engagement peaking before new cases reach highs, but we saw greater alignment between engagement and the fall in cases.

Readers in Brazil were only engaged around the same time that other countries peaked.

Google properties, Facebook referred most traffic

When dove into the referral data, Google Search and Facebook saw significant jumps in traffic.

When we looked at the total volume of search traffic to Google, we saw a massive rise in mid-March — more than 60% or 200 million daily pageviews. In the case of Facebook, traffic also grew significantly, to the tune of 35%, or 70 million daily pageviews. 

This change in traffic, with a greater percentage of traffic coming from search, is in line with what we typically see during major news events, where readers more often rely on search to seek out relevant information. However, we usually think about that phenomenon on the shorter timelines that are usually associated with breaking news events. Because Covid coverage has been prominent for several months, it’s notable that the dominance of Google Search as a traffic source has been sustained over time.

What’s more, the growth of traffic from just these two sources accounts for about half of the increase in traffic to publisher sites, with the other half coming from an increase in direct traffic.

Google News and Twitter also each saw 60-70% increases in the volume of traffic during this period. When you think about our previous understanding of how audiences find information via search over social, Twitter’s rise is especially notable.

Did audiences engage for longer periods? Our data says yes

When we looked at overall engagement, we saw that visitors spent 35% of their time on coronavirus-related articles in March, falling to 20% in May. While that breakdown may seem surprising to news consumers, our global dataset includes sites that fall outside of news, say sports or entertainment, which shows us that audiences were still spending time on non-Covid content as well.

We then looked at Average Engaged Time, we saw that readers spent 34% more time on Covid articles than non-Covid articles. This matters because this behavior points to more than a click. It demonstrates sustained engagement with the content.

How readers engaged with certain types of content

We also wanted to see if audiences favored certain content structures over others. Therefore, we analyzed the top 100 Covid-related stories by Total Engaged Time and categorized them into articles (traditional, short-form narratives), infographics/interactives, live blogs, and longform pieces.

About half of the top 100 pages were articles. For live blogs, they only accounted for 39% of the top 100 list. However, they drive almost half of all engagement, showing that this frequently-updated format has resonated well with readers. Additionally, infographics and longform content were among the top pieces by engagement. 

When we delved further into their referral sources, we saw that articles received traffic from various traffic sources, while live blogs were most popular via homepages, which we classify as “internal” traffic in Chartbeat. Infographics performed best on search, while long-form pieces were a hit on social media platforms.

What the data tells us about the past, present, and future of audience behaviors

Let’s take a step back and answer the questions posed at the beginning of this piece and what they mean for content producers:

How much people are reading?

The publishing community began covering the pandemic ahead of the uptick in reader engagement. While the volume of coverage has been sustained, it has also outpaced the volume of traffic. That said, this traffic is still higher than pre-pandemic levels. 

However, the data suggests the onset of coverage fatigue, which also points to a need for new coverage strategies as the pandemic continues. Our country-by-country analysis shows that traffic tends to climb quickly as the virus spreads, but peaks within days of a lockdown. This illustrates a relationship between engagement and how regional measures are impacting the lives of readers. That said, traffic remains higher-than-usual when compared to pre-pandemic data we’ve analyzed.

Where are readers finding content?

Google and its related entities have been significant referral sources to external traffic to coronavirus-related content, well above Facebook, which in its own right has also referred substantial levels of traffic.

Which content, and which types of content, have readers found most engaging?

Engagement is higher on content that is directly related to coronavirus, but we’ve seen that readers are favoring the up-to-the-minute urgency that live blogs offer.

Therefore, what we can see on the whole is that reader attention, as measured by traffic and engagement, is higher than ever for publishers. The prevailing question, however, is if it will continue to stay that way as the pandemic continues and what, if any, impact it will have on longstanding interactions between audiences and content creators.

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