Context is Queen The value of media environment 24 th February 2015

Context is QueenThe value of media environment

24th February 2015

Context is Queen: Newsworks Shift, February 2015 2

Context is Queen: Newsworks Shift, February 2015

Context is QueenThe value of media environment

This presentation was delivered at Newsworks’ Shift conference on 24th February at the British Library

What we have done

Context is Queen: Newsworks Shift, 24th February 2015

• Newsworks commissioned Millward Brown and Enders Analysis to compare agency and brand owner views relating to automated advertising and the marketplace generally

• Millward Brown interviewed a number of senior people from various agencies and brands

• This is a summary of some of the themes and tensions from these interviews, and our overview of the challenges in the marketplace

Who we have spoken to


Agencies Brands

Sue Unerman, MediaCom Dominic Grounsell, (MoreThan) RSA Insurance

Rob Norman, GroupM David Wheldon, Barclays

Martin Vinter, iProspect Matthew Holmes, William Hill

Simeon Adams, Goodstuff Andy Duncan, Camelot

Owain Wilson, MediaCom Keith Hendry, ATS Euromaster

Craig Mawdsley, AMV BBDO Tony Preedy, Lakeland

Jean Isvarphorncha, Liberty

Tim Male, Lloyds Banking Group

(and Albert)


“Not everything that can be counted counts, and not everything that counts can be counted.”

– Albert Einstein

“One of those unfortunate bits of

jargon where words don’t do what they’re meant to do – and that’s to tell you

what it is” - Craig Mawdsley

AMV BBDO

“Programmatic is a sign of the times. But it’s blind buying which I

don’t like”- Matthew Holmes

William Hill

“I’m not keen on leaving stuff to the

chance of programmatic”

Agency Brand owners


Disparate views on the current marketing marketplace


Agencies Brand owners

Market functioning Good Poor

Market maturity Optimisation phase Development phase

Viewability and fraud Teething problems Fundamental obstacles

Gap between ‘promise’ and ‘practice’ of audience targeting

Good progressSome teething problems Fundamental obstacles

“Black box” of agency data Nature of the model Not trusted

Lack of financial transparency Great value for money Fear that they are

overpaying

Key goals and measures

Targeted consumersVolumesContext

Targeted consumersVolumes

Context is key

[Source: Enders Analysis based on Millward Brown interviews


“There are some yawning gaps in the processes and the understanding of how programmatic

actually works – not just within clients, but also the agencies and media owners we are working

with”- Dominic Grounsell

(MoreThan) RSA Insurance

“If we don’t work it out [bots and ads on inappropriate sites] over the next to or or two or

three years, there is a significant danger of a backlash from society, politicians and certainly in

Brussels”- Brand owner


Marketing landscape is being restructuredTotal advertising revenue (£m)

[Source: Enders Analysis forecasts based on AA/WARC and other industry data]

2000 2005 2010 2015f 2020f0

2000

4000

6000

8000

10000

12000

14000

Analogue media

Digital growth has been driven by direct response


2000 20150

2000

4000

6000

8000

10000

12000

Display ad expenditure (£m)

Analogue Digital

2000 20150

2000

4000

6000

8000

10000

12000

Classified ad expenditure (£m)

Analogue Digital

Internet display growth is the next wave

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e0

250

500

750

1,000

1,250

US UK DR

Index 2004 = 100

Nominal internet display ad spend [Source: GroupM, IABUK/PwC, IABE/IHS, OVK, SRI/PwC, Enders Analysis]


CMOs are under immense pressure


Spend less

Shrinking budget

Deliver more

Improve Return on Investment

Prove it

Demonstrate greater ROI to

non-marketeers

62% of CFOs believe marketing is “critical”, but

61% are not confident CMOs

make good commercial decisions

[Source: WARC, Econsultancy, November 2014]

Pressure from the marketplace


Marketing objectives (examples)

• Fame and stature• Positioning• Build trust

• Education and understanding

• Prompt action• Sales

Marketing outputs

Automated is moving up the value chain


Unsold inventor

y

Automated sells the ‘bottom of

the market’

Central buying

efficiency

Automated moves up the value chain

Analytics becomes more

central

Inventory mgmt

Audience is central

Brands, agencies and media utilise a

wider range of parameters and

values

Marketing and media


Awareness: display, video

Interest: social

Consideration: email

Conversion:

search

Marketing objective

[Source: based on blinkx, illustrative only]

Media

Retail

Automated values conversion and ignores “out-of-market”


Visits: $0.01/visit

Audience: $0.05/profile

Signups: $0.25/lead

Purchase: $1.00/click

Awareness: display, video

Interest: social

Consideration: email

Conversion:

search

Marketing objective Ad unit

[Source: based on blinkx, illustrative only]

Media

Retail

Digital Marketin

g Economy


“We have stringent guidelines in place which keep us away from porn, and any illegal sites where possible. But some do slip through the

net”- Matthew Holmes

William Hill

“It is more about where you don’t want to appear than where you do”

- Brand owner

Automated and unintended consequences?

Automated measures

become more important

Long term and reputational

measures diminish and

media becomes

commoditised

Automated grows in scale and

influence


Rise of third-party data; decline of media real estate value


Consumer Marketing Mechanics Media

Visits to a website typically generate many tracking scripts, enabling publishers and 3rd party networks to track devices

These help power interest and behaviour based advertising

The browser's cookie is analysed and advertisers bid for, and serve, impressions in a fraction of second

Is the incentive to invest in content in order to create an attractive advertising platform being undermined? Businesses that curate and aggregate are more efficient at creating traffic


“As far as online display advertising is concerned, it always works best when there is a

relevance between the creative that is being used and the environment”

- Tony Preedy

Lakeland

Actions taken after seeing display ads


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

19%22%

40%

9%

15%

26%

7%10%

23%

Original content sitesPortalsSocial networks

Research product online or in store, competition, watched video

Clicked link, searched online, bought productTalk about a brand or visit/follow

[Source: AOP, The Value of Trust, 2012]

Quantifying context – video example


TV YouTube0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Revenue per hour ($ estimates)[Enders Analysis estimates]

FT “Halo effect” research underlines the value of context


Content provider

assessment

5 established (FT) and 5 emerging (HuffPo) content

brands

Key values – trust, quality

Product attribute evaluatio

n

6 purchase categories (tech,

airlines)

Key values – trust, quality

Implicit test

Respondents shown website and brand pairings, and some words they could associate with the brands

Only 2 seconds allowed – so “automatic”

Established brands gathered many more positive

responses, and many more rapid

positive responses

[Source: FT ‘Halo Effect study, 2014 conducted by InSites Consulting]

Brand matching

6 brands shown in rotation and asked to match which of the content sites most suitable for

advertising in

51% more placements in established

media compared with emerging

media

The UK’s demographics – gender, age, wealth

0-55-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-84

85+

Male Female

27%

40%

31%

[Source: Enders Analysis based on ONS]


Media transition

Or to put it another way….


I’d rather be dead than sing Satisfaction when I’m 45

– Mick Jagger (aged 31)

45-65s are less brand loyal than younger age groupsAverage brand loyalty by age of principle buyer (% share of requirements)

Under 28 28-44 45-64 65+0%

10%

20%

30%

40%

50%

26%

17%13%

16%

38%34% 32%

38%41%

33% 33%38%

Alcohol Household goods Toiletries

Consumer survey, year ending January 2014 [Source: Kantar Worldpanel]


Viewability and non-human traffic


Viewability

• 56% of adverts are not seen (Google study, November 2014)

• 57% of video adverts are not seen (Vindico survey of 2 billion ads, 2014)• “Seen” is defined as “half of

its pixels visible for one second”

Non-human traffic

• Kraft believes 75% to 85% of its digital advertising (real-time ad marketplaces) is “fraudulent, unsafe or non-viewable or unknown”

• There is $9.5 billion on “non-human” traffic – according to Solve Media estimates

Human Traffic, 38.5%Search engines + Other good bots, 31%Scrapers, 5%Hacking Tools, 4.5%Spammers, 0.5%Other impersonators, 20.5%

[Source: Incapsula]

Human traf-fic, 38.5%

Non human traffic 61.5%

Web traffic breakdown


Three questions


1. Are brands and agencies’ views on automated trading truly aligned?

2. Does the reality of automated trading live up to the promise?

3. Is there a limit to what can be traded automatically – and if so, how do we define it?

Context is Queen: Newsworks Shift, February 2015 31

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Context is Queen The value of media environment 24 th February 2015