Consumers Are Now More Likely to View Ads Online Than on TV

GroupM unveiled its 2018 “State of the Digital” report, which predicts where people worldwide are expected to consume content in the coming year. And for the first time, the WPP network sees online surpassing every other vertical—linear TV, print and radio—in terms of where people will choose to spend their time with media.

The study, when weighted by expenditure, estimates that consumers will spend an average of 9.73 hours per day with personal media in 2018, up from 9.68 hours in 2017. GroupM predicts online to take a 38 percent share of total time spent with media; for the first time, linear TV trails behind and is expected to end the year with a 37 percent share. The group predicts radio and print to then take 18 percent and 7 percent shares, respectively.

Last year, linear TV held a 38 percent share over online’s 36 percent.

GroupM noted in the report that it wasn’t able to accurately measure TV’s online distribution, so those numbers were “lost in that online aggregate.”

The report likened the rise of digital ad expenditures to that of global e-commerce spend, which it also sees jumping considerably in 2018. Based off the 35 countries that supplied e-commerce totals for this study, GroupM predicts the dollars spent online to climb 15 percent to $2.4 billion in 2018 from $2.1 billion last year.

This is also the first time GroupM predicts e-commerce shopping to “grow notably faster” than Internet usership, which is estimated to climb 4 percent in 2018, compared to 6 percent in 2017.

Across the 35 reporting countries, the network estimates 47 percent of all online display investment to be transacted programmatically in 2018, from 44 percent in 2017 and just 31 percent in 2016.

GroupM’s research also touched on which of the hot-button issues around emerging tech are really top of mind for marketers, according to employees surveyed within its WPP network. For example, respondents described blockchain as a “slow, clunky and expensive” tool they don’t see as practical just yet.

“Blockchain’s main attraction is its distributed ledger, which tells everyone everything and thus presents the opportunity to reduce inefficiency or cheating,” Adam Smith, GroupM Futures director, said in a statement. “However, its Achilles’ heel is the need to keep every participating computer updated with everything all the time, and that’s too slow for a real-time world.”

The study’s respondents within GroupM reported improved development around AI and data use, although they admitted the need for further improvement on the latter. Those respondents brushed off the threat of clients in-housing their work, saying that it’s “more often talked about than done.” GroupM employees surveyed “reported [more] hybrid arrangements” than full in-house operations, “with clients often happy to take on strategy but leave risky and expensive execution to agencies.”

Clients are hiring more digital staff in-house and leaning more on specialist agencies than generalists, according to the study.

In a statement, GroupM global CEO Kelly Clark listed automation and talent as the “big themes in advertising’s current revolution.”

“One of the downsides of specialization is the increase in specialists who know more and more about less and less,” Clark said in the statement. “We have to use automation to liberate brand power so talented people can look across the entire media ecosystem to help clients optimize short-term results and create long-term value.”

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Several Things the TV Advertising Industry Should be Worried About

GroupM’s ‘The State of Video 2017’ report released today doesn’t forecast the doom and gloom for linear TV that some are predicting. With TV making up 60 percent of the world’s traditional media spend, and still rising, GroupM says that TV is seen by many advertisers as essential for brand building and still represents “the peak of consumer engagement”. However, TV is still facing a number of serious challenges GroupM have set out some of its concerns about its future as an advertising medium.

Rising costs but declining audiences

The decline of TV audiences are often overstated, with much of the audience of linear having switched to digital platforms instead. But traditional TV viewing is falling as younger generations turn away from linear – GenY viewership has fallen by about 4.5 percent annually in the UK and US, and for GenZ the figure is close to 9 percent. GroupM finds that aging does not increase people’s viewing like it used to, and predicts that aging GenY and GenZ audiences will erode viewing at a pace of one percentage point a year over the next decade.

Meanwhile rights costs are rising fast, especially for sports, where high loyalty and engagement ratings have seen investments in rights and ad dollars spent on sports rise quickly. But even with sports, GroupM says younger generations aren’t as attracted as older groups, and sports in the future might not guarantee the same huge audiences they do today. Continued audience loss and fragmentation could make it impossible to sufficiently monetise content for linear broadcasters to cover its growing cost.

The threat of the digital giants

Traditional broadcasters will struggle to compete for audiences and programming with the likes of Netflix and Amazon, whose economic model is currently based solely on growth rather than profitability. Netflix and Amazon are estimated to spend around $10 billion per year on content acquisition and creation, and offer a tempting opposition to the emerging ‘skinny bundles’ of limited channels and networks, especially to viewers not interested in sports. “If you are a sports fan and impatient, it is complex and expensive to get everything you want,” says the report, “If you are neither, it is easy and cheap – go to Netflix or Amazon.”

GroupM say that no national media company has the resources to compete with these players on a global basis, and that it won’t be a surprise if Amazon Prime and Netflix come to form the anchor of the new entertainment landscape.

TV’s long tail under pressure

The long tail of TV, the lowly viewed niche channels that come with pay-TV packages, faces threats on two fronts. The cheap inventory on these channels has helped mitigate TV ad inflation in the past, but the emergence of on-demand video is making TV’s second rate ad inventory on these niche channels hard to sell. The report says these channels in the past held a sort of quasi-on-demand status, offering a certain type of content at any time of day, a status it’s losing in competition with actual on-demand.

Partly as a result of this, networks and broadcaster themselves are now offering stripped-back ‘skinny bundles’, free of these long tail channels, and as these bundles become more mainstream, the economics of long-tail channels and programmes will come under even more pressure.

TV measurement is still inadequate

Viewing measurement has not kept pace with changes in viewing habits, with a lot of content now watched on poorly measured or completely unmeasured screens. Even where there is measurement viewing standards vary, making total measurements of a show’s audience inaccurate and making it harder to monetise to its full value. GroupM says that the loss of linear audiences is largely an illusion, but until a holistic method of measurement with common standards across platforms and devices exists, TV shows will remain undervalued. What is necessary according to the report is “a universal, any-screen, respondent-level method with automatic content recognition.”

Long commercial breaks becoming unacceptable

With SVOD services like Netflix giving audiences ad-free viewing, and short-form online content being supported by short and often skippable ads, audiences are becoming intolerant of the long ad breaks featured on linear TV. Channels are now having to experiment with shorter, less intrusive breaks in the hopes that linear audiences will stabilise or grow, and that advertisers would be willing to pay a higher premium for this more effective inventory. The report advises that TV must make its advertising more relevant, making it more native to its environment and more audience-friendly.

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New WPP Media Agency Ready To Make Some Waves

Wavemaker. That’s the name of the new WPP media agency being formed by the in-house merger of two existing shops — MEC and Maxus — the holding company confirmed Wednesday.

WPP announced the merger in June. With $38 billion in billings, the resulting entity is being positioned as a “media, content and technology agency.”

Tim Castree, global CEO of MEC and Wavemaker, stated: “Our purpose is to provide advertisers with the power to transform and grow their business through our Purchase Journey obsession; and importantly to do this through the integration of Purchase Journey insights and data with [m]PLATFORM, GroupM’s proprietary global audience technology. Our Wavemaker brand and positioning is a compelling manifestation of that purpose.”

Kelly Clark, global CEO of GroupM, added: “Wavemaker is an exciting new global agency brand with a powerful proposition for clients. Tim and his team have the full support of GroupM’s scale, resources and expertise.”

The merged agency network comprises 8,500 people serving clients in 90 countries via 139 offices around the world. According to the agency, the staff includes a mix of digital, data, content and platform/technology experts.

Major global clients include L’Oréal, Vodafone, Marriott, Colgate-Palmolive and Paramount.

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Digital advertising insights as the market reaches attention saturation

Digital advertising will capture 77 cents of every new ad dollar this year and will surpass TV advertising in five additional countries, reports GroupM in its annual Interaction Report. Rob Norman, global chief digital officer and author of the report, addresses the value exchange between the user and the advertiser. Norman points to new revelations in today’s advertising model, “Attention is a reward not a right. Useful advertising is a function of relevance which in turn is a function of time, place, context, cognitive targeting and creation, and actionability.”

Once again, overall daily media usage grew by nine minutes in 2016, to a total of eight hours. Mobile and its many devices drove the increase with a 14-minute increase of time online. In this report, GroupM states that the 2017 forecast appears to be approaching a point of saturation. They see this period as a time of two distinct challenges: peak advertising and peak segmentation. Peak advertising refers to a state of reduced commercial interruption and peak segmentation is the point at which the value of user data cannot be converted in value. Both of these challenges can offset advertising results, for example when inefficient allocations counterbalance detailed targeting precision.

GroupM media snapshot offers key insights on digital platforms and marketing practices. These include:

Advertising paradigm shifts

GroupM recommends that every brand have data and every brand have a data story. Without a data story, a brand lacks discovery, relevance and algorithmic referred platforms. Today there are also expectations of augmented reality and data overlays. Consumers expect brands to have a voice (which may soon be powered by artificial intelligence) to increase consumer interaction, both structured and unstructured.

Many market channels are experimenting with limited commercial interruption on a whole, or within individual programs. The thinking here is the less cluttered an environment, the higher the recall, the more an advertiser is willing to pay the premium that offsets the reduction in inventory. And further, the better the advertising, the more native to its environment, the even better and improved recall. This thinking warrants creative advertising content to be easily placed inside programming and network context.

Media options:

TV with commercials, as we know, will continue to exist. However, commercials will be more creative with skippable options.
A middle ground of mostly short form commercial content will be traded with guarantees on view duration and “sound on” consumption. GroupM’s current standard will continue to apply; human verified exposure to 100% of the video window, audio on and 50% of the ad viewed.
An entirely new creative category that values both time and attention with the opportunity scale and share.
Platform profiles

Google/YouTube/Google Preferred

Google/YouTube/Google Preferred want to change the idea of the “forced view” advertising television paradigm, which is the forced completion of a commercial. In contrast, Google’s TrueView counts viewing only after a video ad is clicked on or after completed viewing or viewing of the first 20 seconds. The video ad length has no limits, it can be longer than 30 or even 60 seconds and the advertiser only pays for the ads the consumers choose to watch.

Combining the viewership data with all of Google’s other data, provides a robust and detailed report of an opt-in view. Despite YouTube’s success, it has not achieved the watercooler moment of significant simultaneous reach. Consequently, YouTube is often used as a compliment to TV and not a replacement. Even Google Preferred, an aggregation of its highest quality content, has difficulty building scale. The impressions are often placed in questionable content causing marketers concerns.

Facebook/Facebook Video Live

Facebook’s video product is questionable as an advertising vehicle given unease with auto play and sound off. Unfortunately, the consumer’s news feed is now being populated by content that is not necessarily of interest. GroupM shares their Moat data which implies that for every 20 video ads served in the news feed, three are watched for three seconds or more and just one is watched for ten seconds or more. Facebook believes that even minimal exposure has value. However, advertisers need to factor into their own valuation of the platform’s performance to accurately reflect actual video ad consumption.

Facebook’s Live video inventory is familiar to the advertiser because the ad frame is content rather than just the user interface. These ads are initiated by the producer of the content with Facebook determining which ads are seen.

The challenge of measurement is huge with the need to identify and share who watched what, where, for how long and on what device. This is a necessary building block to assess ad and audience value.

Over-the-Top (OTT) or Connected TV (CTV)

Over-the-Top (OTT) or Connected TV (CTV) refers to “television” content delivered via streaming over the internet to a smart TV, streaming Player (such as Apple TV, Roku, Chromecast, Amazon Fire TV) or gaming console. OTT services offer consumer choice, new distribution for program and channel owners and new opportunity for advertisers. The OTT inventory is currently limited but becoming more targetable and measurable. OTT offers an opportunity to reach quality content in a brand-safe and on-demand environment.

A hybrid service combining on-demand and live linear television, called skinny bundles, has a number of strong players in the marketplace; AT&T, Turner, Google, Verizon, Hulu, CBS, Sony and Sling (Dish Network). The premise here is that consumers via their broadband connection can access a reduced channel line-up for a fraction of their original cable bill. The monetization of skinny bundles is based on subscription sales, highly targeted advertising (at a higher cost to marketers) minus the network transmission fees.

Audio on-demand and streaming

Spotify is an online on-demand music collection with the added the ability to find playlists from others, to customize your own and download music for offline listening. Spotify is generally recognized as the global market leader with 100 million users and 40 million subscribers. Pandora, on the other hand, is more about music discovery and a radio service. Pandora decodes music on hundreds of vectors and uses it to create custom “stations.” Pandora also launched an on-demand service (including offline downloads) bringing it closer Spotify’s model. Neither Pandora nor Spotify are profitable, as about 80% of their revenue is returned in royalties to artists and labels. Pandora and Spotify revenue models include subscriber fees and advertising revenue.


The merger of AOL and Verizon offer the world’s third largest aggregation of ad impressions with scaled “channels” in news, sports and finance, and significant ad tech assets and first party data from Yahoo Mail. While it may not challenge the duopoly of Google and Facebook, it could be, if executed properly, a strong offering for advertisers.


Twitter is a unique environment for brand video advertising and for brands to be an immediate and timely connection to consumers. While Twitter’s social significance is unquestioned, it still has not established itself as a profitable entity.


Snapchat has over 100 million users. It is the first of the internet mobile giants to offer a multimedia person-to-person communication experience. The Snapchat Lens is the most innovative digital ad product since the keyword and the news feed. It’s native to the platform and the ability to offer brand assets in user communication makes earned media that much more powerful.


Pinterest has approximately 150 million monthly users with approximately half residing in U.S. People use the platform to collect and share images. While often used by hobbyist, it also presents highly commercial and monetizable categories like fashion, food, design and crafts. Pinterest users “pins” (picture postings) of what they like and also learn about what they do not know much about from other user pins. This duality offers a unique advertising opportunity to reach different audience across the lower, mid and upper marketing funnel.

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The global state of digital advertising in 5 charts

Digital media advertising may still be dogged by issues like fraud, brand safety and dodgy measurement, but that’s not stopping the flow of ad dollars.

Digital advertising is expected to account for 77 cents of each new ad dollar in 2017, according to GroupM’s “Interaction 2017” report, out this week. Unsurprisingly, Google and Facebook are leading the pack. More than two-thirds of global ad spend growth from 2012 to 2016 came from those two companies.

In 2016, Google and Facebook swallowed 20 percent of the entire global media advertising pie, according to Zenith’s “Top Thirty Global Media Owners” report, also out this week.

And yet, a little sheen may have come off that lately, for Google at least. Confidentially, agency reps say Google has taken more of a hit from the YouTube crisis than it has admitted publicly. “There has been significant fallout from advertisers pulling spend from YouTube,” said one media agency CEO who spoke on condition of anonymity. “There are a lot of advertisers who would normally spend on YouTube who are still not. Google’s numbers are under pressure quarter on quarter.”

Here’s a look at the current state of global advertising spend, in five charts.

Google and Facebook set the pace
Google, under its holding group Alphabet, still leads Facebook, gobbling up $79.4 billion (£61.4 billion) in ad revenue in 2016, three times more than the social network, which took $26.9 billion (£21 billion) last year. In third place was Comcast, which took $12.9 billion (£10 billion) in ad revenue, according to the Zenith report.

Digital-only media owners took a decent chunk of the top 30 slots for biggest media owners by ad revenue. Among them were Verizon, Twitter, Yahoo, Microsoft and Baidu, which together generated $132.8 billion (£103 billion) in online ad revenue in 2016 — 73 percent of all digital ad spend and 24 percent of global ad spend across all media, according to Zenith.

“Zenith’s new ranking demonstrates just how much the internet advertising platforms are setting the pace for global ad spend growth,” said Jonathan Barnard, head of forecasting at Zenith.

Don’t write off Twitter, though

With all the talk of the duopoly dominating spend and Snapchat being the latest digital darling, Twitter has moved somewhat to the sidelines, as evidenced by several reports showing its recent ad revenue drops. But from 2012 to 2016, Zenith showed Twitter grew the fastest, increasing ad revenues by 734 percent. Tencent is second, growing by 697 percent over the same period to $4.3 million (£3.3 million) in 2016, and Facebook is third, with 528 percent growth to $27 million (£21 million), according to Zenith.

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GroupM Partners with OpenSlate to Mitigate YouTube Brand Safety Risks

GroupM, the media investment management unit of WPP, announced it is partnering with OpenSlate, a YouTube analytics platform, to enhance brand safety on their YouTube media buys. The move follows the recent controversy over brand safety on YouTube, which started with an article on The Times that showed how the ads of various brands were be run against content featuring ISIS and far-right propaganda. The issue has since snowballed into an advertiser boycott of YouTube featuring everyone from Verizon and Johnson & Johnson right through to Walmart, PepsiCo. and HSBC.

OpenSlate is a social video analytics company that maintains data about all ad-supported content on YouTube, which enables them to score YouTube content for quality and brand safety, whilst also providing additional contextual insights. The company will provide clients of GroupM’s agencies additional controls and content safeguards to support their YouTube media buys.

OpenSlate say that their solution will enhance brand safety in both reservation media, including Google Preferred, and in auction-based inventory bought through AdWords or DoubleClick Bid Manager. Using independent data from OpenSlate, GroupM clients will be able to better define the type of content that should be excluded from their YouTube media buys. Finally, OpenSlate will also provide clients with contextual reporting that highlights exactly where their campaigns run.

“Long gone are the days when advertisers could simply rely on reaching audiences in carefully curated programming environments. Most brands today have scaled their advertising on digital platforms like YouTube, where most content is user-generated, but their needs for mature and safe ad products and environments persist.” said Susan Schiekofer, chief digital investment officer, GroupM North America. “Although it is not possible to eliminate all risks in user-generated media, our clients’ hard-won brand reputations must be protected with the best efforts possible. We appreciate that Google is enabling our work with OpenSlate to provide our clients with better brand safety controls, and we believe it’s essential that all digital platforms carrying ad-supported user-generated content do the same.”

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