The Media Market bulletin from The Exchange

Q1 2015

CONTENTS

Executive Summary

3

Selected Indicators

4

Audio Visual

8

Publishing

11

Radio

14

Out-of-Home

16

Cinema

19

Online Display

22

Paid Search

26

SEO

28

Paid Social

31

References

33

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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SELECTED INDICATORS

Hello and welcome to the Quarter 1 2015 edition of Tickertape. As we approach the General Election in May, the UK’s economic recovery remains on track. Inflation is non-existent, unemployment is still falling, GDP continues to grow and finally wage growth appears to be out-stripping the cost of living. But what will be the effect of global economic machinations? How will the slowing of China’s economic growth, the situations in Russia, Greece and the Middle East and most significantly the oil price crash effect the UK? Whatever the answer to these questions is, it would appear that the shifting sands of global economics are having little impact on UK marketers’ budgets. We predict that most media markets will see revenue growth of 510% in 2015. As has been the theme for several years now both internet and print spends buck this trend. Online revenue is set to increase by 12.7% this year, whilst at the other extreme spend on newspaper and magazine advertising is expected to drop by c. 8%. ____________________________________ Despite some disappointing audience figures in 2014, the AV market continues to thrive, with spend set to grow by 6%. However, after years of debate around the subject, have we finally reached the tipping point when the migration of linear TV audiences to on-demand services starts to reduce the amount of money spent by advertisers on TV? Our revenue figures suggest not, but what is for sure is that it’s ever more important that advertisers are reaching viewers through all possible routes and not just broadcast TV. ____________________________________

The travails of the Publishing sector have been well documented in Tickertape over the past few years, however impressive levels of innovation have sprung from this adversity. In this edition, we look at one example in Trinity Mirror, and how they are looking to reinvent themselves in a difficult climate. On a similar note, whilst the Radio market is in good health we have looked at how Bauer Media have restructured their local radio offering in response to the requirements of both listeners and advertisers. _____________________________________ The term ‘Programmatic’ continues to dominate all things digital, and in our Online Display section this quarter one of our Programmatic buying experts Sohel Modi looks to add some clarity to the debate as well as debunking some myths about the subject. Meanwhile, last December’s retail ‘Black Friday’ seems to have been the point at which Mobile e-commerce came of age, we’ve looked at some of the reasons why. We have also added Paid Social to the range of media we look at within Tickertape and have included an introduction to this rapidly growing market. _____________________________________ As ever, if you have any questions about the content within Tickertape, please do not hesitate to contact one of the Exchange experts for more information.

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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SELECTED INDICATORS

UK Economy

programme of quantitative easing will head this off.

Overview As we approach the May General Election the economic outlook remains uncertain, with the UK moderately confident of economic improvement, but with a hugely mixed global picture. By the autumn of 2014 George Osborne could boast that Britain’s economy was expanding rapidly, with a year-end GDP of 3% being talked about. Unemployment was (and still is) falling, and wage growth was starting to creep ahead of inflation (see below). But as the year drew to a close it emerged that Britain’s current account deficit is its worst ever, and the hoped for 3% would not be achieved. That said, we believe that the UK is still well placed to deliver further solid, if unremarkable economic improvement in 2015. Overseas, old storm clouds have failed to disappear, whilst new ones have gathered. China has slowed, its GDP dipping below 7%; still an astonishing performance compared to the big western economies, but less than half its peak of the previous decade. Russia’s involvement in Ukraine means that the country has regained pariah status which has led to its currency collapsing. Meanwhile Greece, which seemed to be recovering is facing fresh political instability, this in turn threatens a renewed bout of fear about the future of the Euro, which hit a twelve year low against the US dollar in early March. Indeed, more widely the Eurozone has failed to regain its economic sparkle with widespread deflation now being discussed as a serious possibility. It remains to be seen whether the European Central Bank’s

The biggest economic story of recent months though has been the collapse of the oil price. Below, we have looked at how this might affect both the Global and UK economy in 2015. Effects of the oil price crash The oil price has fallen by more than 50% since last June, when it was $115 a barrel. It is now $55. This comes after nearly five years of stability. There are four reasons why the price has dropped so dramatically: 1. Demand is low because of weak economic activity, increased efficiency, and a growing switch away from oil to other fuels. 2. Turmoil in Iraq and Libya—two big oil producers with nearly 4m barrels a day combined—has not affected their output. 3. America has become the world’s largest oil producer (largely due to an increase in fracking). Though it does not export crude oil, it now imports much less, creating a lot of spare supply. 4. The Saudis and their Gulf allies have decided not to sacrifice their own market share to restore the price. They could curb production sharply, but the main benefits would go to competitors such as Iran and Russia. Saudi Arabia can tolerate lower oil prices quite easily. It has huge financial resources and its own oil costs very little (around $5-6 per barrel) to get out of the ground.

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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SELECTED INDICATORS

of England and the European Central Bank’s big fear), and the knock on effect of a return to wage stagnation. Talking of which… UK wage growth finally outstripping inflation

Brent Crude $/barrel Jan ’14-Jan ’15. Source: MoneyAM.com

Elsewhere the effects will be profoundly felt. As mentioned above, the Russian economy is already in trouble, and as one of the world’s largest producers, a failure of the oil price to recover in would almost certainly throw Russia into recession. Meanwhile countries as disparate as Venezuela (already sitting on a massive budget deficit) and Iran (dependent on oil revenue to bankroll the Assad regime in Syria) could experience real difficulties if the status quo remains unchanged. Regarding the UK, whilst Alex Salmond will perhaps be breathing a sigh of relief that he does not have to plug the gap in the finances of an independent Scotland that the oil price collapse would have resulted in, the wider effect on the British economy is debatable. Theoretically, cheaper oil should lead to cheaper goods and services, and therefore more disposable cash in consumer’s pockets, which when spent, will generate economic growth. However, the concern is that if the effect of cheap oil is too profound, tumbling prices on high streets will lead to consumers delaying spending in the hope of further price reduction in the future. This in turn would lead to growth-destroying deflation (both the Bank

Whilst the UK economy has enjoyed a steady, if unspectacular, climb out recession, we have consistently held nagging doubts about wage growth versus the cost of living. Finally after six years, weekly earnings do now seem to be pulling ahead of Consumer Price Index (CPI) inflation. This is especially true of the private sector, which accounts for 82% of jobs (and rising) where average weekly earnings rose 2.2% in October and November 2014, compared with inflation of 1.3% and 1% in those months respectively. The fastest wage growth was 3% in finance and business services and 2.7% in construction. Meanwhile, the shrinking public sector saw a less-than-inflation 0.5% rise. If this trend continues we can expect to see tax revenues increase a bit faster than CPI-linked welfare payments, thus improving the UK’s budget deficit. It also means household spending will be more sustainable and continue to drive the UK's economic recovery, without household debts becoming unsupportable again too quickly.

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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SELECTED INDICATORS

continue regardless of who wins the election). GDP continues to grow, and both unemployment and inflation are under control, but a factor entirely out of the UK government’s influence i.e. oil pricing is likely to have a significant impact on the country’s economic success or otherwise.

Economic Indicators Wage growth vs CPI. Source: ONS

It should be noted that pay growth only looks positive because inflation is substantially below target, but do these figures suggest that the Bank of England might implement an interest rate rise to head off any inflationary pressure? 2.2% private sector wage growth hardly looks like runaway inflation, and any change to interest rates is difficult to predict.

Component GDP Inflation (CPI) Inflation (RPI) Unemployment rate Adspend

GfK consumer confidence

2013

2014

1.9%

3.1%

2.1%

1.0%

2.6%

2.0%

7.2%

6.0%

4.8%

6.2%

2015f 2.8% 1.2% 2.2% 6.0% 6.9%

Sep-14 -1

Dec-14 -4

Mar-15 4

ONS, BoE, GfK, Mindshare estimates

Needless to say the Government has made full political capital from the improved picture, with an ‘unnamed Treasury source’ declaring that; “the final plank of Labour economic argument collapses five months before polling day with regular pay rising significantly above inflation”. We can expect to see further squabbling about this topic in the run up to the election, and it’s interesting that whilst the Tories will want to claim that wage growth is the final proof that their austerity measures have worked, they will not wish voters to be too confident that the good times are back. History shows that the electorate is less frightened of a change of government when they take prosperity for granted. So, the UK economy is in reasonable shape (although the size of the budget deficit is a concern, and will mean that ‘austerity’ is set to

Adspend forecasts

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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SELECTED INDICATORS

Despite the climate of global economic uncertainty detailed above, we detect few signs of this having a negative impact on Adspend. It would seem that the majority of marketers are of the mind-set that ‘advertising works, so why stop spending?’ We predict steady to significant growth in most markets, with overall Adspend set to be up by 6.9%. Despite an indifferent 2014 in terms of audience delivery, we expect TV to enjoy another year of growth, with the Rugby World Cup boosting ITV’s coffers in the autumn, as advertisers targeting upmarket and male audiences pile in. We also expect significant growth in online spend again, with even more significant proportions of this investment being spent in advertising on Mobile devices. GroupM believes that Mobile will account for 29% of Search spend and 39% of Display spend.

Revenue estimates (m) Television Radio National Newspapers Regional Newspapers Consumer Magazines B2B Magazines Outdoor Cinema VoD Internet Paid search Display Classified Other Total Revenue estimates (% change) Television Radio National Newspapers Regional Newspapers Consumer Magazines B2B Magazines Outdoor Cinema VoD Internet Paid search Display Classified Other Total

2013 £3,692 £373 £1,089 £982 £422 £263 £771 £183 £226 £6,251 £3,494 £1,812 £888 £57 £14,252

2014 £3,870 £403 £991 £913 £380 £223 £782 £190 £287 £7,145 £3,847 £2,247 £992 £60 £15,184

2015f £4,102 £419 £912 £840 £342 £201 £800 £203 £356 £8,051 £4,193 £2,697 £1,102 £60 £16,225

2014 v 2013 2015 v 2014 4.8% 8.0% -9.0% -7.0% -9.9% -15.3% 1.5% 4.0% 27.0% 14.3% 10.1% 24.0% 11.6% 5.2% 6.5%

6.0% 4.0% -8.0% -8.0% -10.0% -10.0% 2.3% 7.0% 24.0% 12.7% 9.0% 20.0% 11.1% 0.0% 6.9%

GroupM, Mindshare estimates

The Press market is in store for another tough year, with revenue declines of 8-10% meaning that Publishers are under yet more pressure to claw back some of this spend through their online offerings – see this quarter’s Publishing section for more detail on this.

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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AUDIO VISUAL

Demand Following two consecutive years of strong revenue growth: 7% in 2013 and 4.7% in 2014, 2015 continues to see increased brand investment with Q1 due to exit +13.7% yoy. This is an incredible figure when considering Q1 has seen continuous revenue growth yoy since 2010. In the last six years Q1 has seen a 50% expansion in revenue, which in cash terms equates to a staggering £356m more investment in today’s market place than midrecession in 2009.

required to discontinue six weeks prior to the general election, i.e. w/c 23rd March), and 2) the early Easter in 2015 has resulted in an increased brand count/investment in March. This consistent investment across the quarter has resulted in a particularly tough buying climate, and has also set the foundation for an inflated 2015. Our latest full year revenue prediction is +6%, however this is dependent on how the market develops over the next nine months. Audience

As the chart below illustrates, in 2015 all three months in Q1 will see sustained growth upward of 11%, this is in contrast to previous years where investment has been more sporadic. Moreover, even with five years of continuous growth across the period, Q1 in 2015 will see the greatest yoy increase of the last six years, and at +13.7% yoy more than double 2014’s increase of +5.3%. Q1 Revenue 2010 - 2015 25% 20% 15% 10% 5% 0% -5%

2010 Jan

2011

2012 Feb

2013 March

2014

2015 Total

Retail, Finance, Automotive, Computing and Gaming are the main sectors driving this level of growth. However, two important factors influencing this surge are 1) the Governments condensed spending prior to the pre-election Purdah period (government spending is

Migration continues It has long been predicted that the “Generation YouTube” - those brought up on a steady diet of Netflix, YouTube and other ondemand services - would soon begin to impact on linear TV ratings; and now this theory is becoming a realisation. In December last year Ofcom announced that for the first time ever the number of households with a television has dropped (26.33m in 2012 to 26.02 at the end of 2013), and at the same time the number of consumers within the UK who own a tablet has steadily grown. Combined with the continued growth of 4G connected devices as well as high speed broadband we have seen that watching video online is becoming much more of a seamless experience for consumers, and has resulted in broadcaster VOD investment increasing 27% in 2014 to £160m, with further growth of 30% expected in 2015 (Source: WARC Expenditure report, Jan 2015). With platforms such as BBC iPlayer and Sky Go now commonplace, we need to find a new

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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AUDIO VISUAL

method of how we reach our audiences. All evidence suggests that the viewing is migrating to on-demand platforms rather than disappearing altogether (e.g. Sky On-Demand which has seen usage increase by 275% yoy to 55 million impressions served monthly). We await further updates from BARB in relation to their Project Dovetail as well as the industry at large to fully understand the scale of this audience migration. To recap on 2014 TV, linear TV audiences finished down 3.7%, with young audiences a driving force behind these declines: Adult 1634 -6% and surprisingly Men 1634 -6.4% even with the football World Cup. ITV’s traditional autumn ratings winners failed to materialise with both X-Factor and Downton Abbey failing to break the 10 million viewing mark. Although, I’m A Celebrity did give ITV a welcome ratings boost in November pulling in 11.6million viewers. Channel 4’s struggles continued with an overall aggregated audience decrease of 8%. However, their sales proposition has been bolstered by the performance of their digital channels with C4 Sales, and specifically new channel Drama and the addition of BT Sport, saw impact growth of 7.7%. Channel 5 also saw minor audience losses yoy, whilst Sky had a good year seeing overall viewing of their channels up 3%, driven by the strong performance of some of their entertainment channels such as Sky One, TLC and FOX. Looking into 2015, total Individuals have seen an increase across the period which is driven by ABC1Adults, however young audiences are still becoming increasingly difficult to reach

through linear TV due to their migration to other platforms. As you will see from the chart below, January saw a 7.9% drop in viewing for Adults 1634, and 6% for HW+CH. February and March did improve for both these audiences, however they are still likely to exit Q1 with yoy decreases of 5.2% for Adults 1634 and 3.2% HW+CH. Despite this, it is a much more positive story for ABC1Adults who will exit Q1 at +3.5% after three months of positive impacts. Q1 Audiences 10 5 0 -5 -10

Jan

ABC1Ads

Feb

-35

Mar

HW+CH

Total

Ind

The year has been particular disappointing for both ITV and Channel 4 so far. Both will exit the quarter with declines of more than 5% (total Individuals), due to audiences not only migrating their TV viewing into other platforms, but also continuing to shift their viewing habits into Multi Channel. Sky, ITV Digital, C4 Digital and Five Digital have all seen their share of viewing increase as a result of ITV and Channel 4’s schedule failing to deliver. Specifically, Broadchurch on ITV saw its audience decrease 13% week-on-week after the first episode, and Channel 4’s new flagship drama Indian Summers decreased in its second week by 28%. Additionally, the backbone of

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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AUDIO VISUAL

Channel 4’s schedule also appears to be weakening with programmes such as Location Location Location seeing a decrease of around 13% yoy for ABC1Adults.

The Premier League Football rights have been sold for £5.1m to Sky and BT Sport on a three year contract. Ofcom are looking to block any increase in subscriptions to the consumer.

It’s not all bad news on the terrestrial front as Five have increased their audience and will post around +1.5% across Q1. It would appear that Viacom’s takeover is going to be a successful acquisition. Five are now 20% behind Channel 4 with regards Total Individual viewing figures. This has grown 6.5% yoy. Their growth is likely to continue as Viacom look to make good on their investment. Content has already been shared from MTV to Five with Live Broadcast of the MTV Music Awards and Five have acquired the rights to the Football League. The Big Brother contract has also been extended for a further three years. The full details are yet to be understood but we are anticipating the Five schedule to see further improvements as we progress through 2015.

BT Sport have bought all live rights for the Champions League and the Europa League. C4 and ITV follow suit with the market and are launching programmatic buying for their online video offering. Sky will only be accepting HD creative from 1st June 2015.

Other News in brief Google have created a new property called Google Preferred where the top 5% of their professionally created content is available to purchase through audience or genre buys. Trueview will still be available. Sky are developing their On-Demand platform. They’re in the process of increasing the level of content available through their On-Demand service to include back catalogue box sets, additional movies and more substantial catchup. We expect this to be significant for consumption levels! It will be available for preroll and sponsorship opportunities and will be bought through audience, genres and AdSmart.

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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PUBLISHING

Introduction A full quarter into the year that is 2015 now is a good time for us to look at exactly how this year looks like shaping up in the Publishing market. Systemic change has been long mooted in the print industry, and it’s looking as though 2015 will be the year where it is most demonstratively and meaningfully affected. Election Fever The campaign trail starts today and politics is in disarray. In the aftermath of scandals, referendums, public spending cuts and a widening gap between rich and poor, scepticism for the current political system has never been more vocal, or more divisive. In the past the masses have often been guilty of eschewing political involvement entirely, but now their apathy appears to have curdled into antipathy. Our country is becoming polarised, and politicians have found it hard to understand the people they are meant to represent, let alone speak for them. The major political parties are in disarray too. UKIP have bashfully sprung into the political mainstream (with the help of two Tory defectors), Labour are tied up in post-referendum Scottish squabbles, the Lib Dems look to be trying to recover from a fruitless coalition from their part, and it now transpires that much-reviled Tory spending cuts have only just begun. So it’s with some interest that the newspapers look toward May’s general election, which has the potential to be the most unpredictable for decades. If anything it’s this weight of uncertainty that makes this year’s election particularly interesting for the established news

organisations. Every election since time immemorial has effectively been a two horse race; all the newspapers had to do was pick a horse and back it. And they’ve been enormously successful in doing so; the Sun haven’t backed a losing party in a general election since 1974. But this time around the lines between parties’ traditional ideologies are more blurred and interchangeable than ever, and old alliances may have to be revaluated at short notice. The battle lines are being drawn and newspapers and their respective platforms are now on the block to show their support.

But for every problem there’s also an opportunity, and in the run-up to the election newspapers can play an important role in convincing lapsed readers of their value. It’s been documented in previous editions of this newsletter that gone are the days when printed newspapers actually ‘broke’ news stories; they have Twitter for that now. Now their role is to offer expert opinion and comment; using long-form content to demystify complexities, cut through the spin and quell the swirling rancour in order to help readers make decisions. But this election could be when newspapers really put their stamp of ownership on social news too. They’re already

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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PUBLISHING

in a good place to do so; 59% of UK Twitter users already follow a newspaper account and 62% choose not to believe a news story unless it’s been verified by a newsbrand. So a sizable readership base is in place already, and keen to have the ‘truth’ explained to them by trusted (or less distrusted) professionals. The challenge for newsbrands then is to make their election content sufficiently suited to the medium; succinct enough to be shareable but detailed enough to provide unique insight. Doing so will ensure at least a miniature renaissance for these brands. An election is a complicated beast and none more so than this one, so if newspapers can succeed in offering credible insights that prove a value to readers – a value which cannot be matched by the unsubstantiated armchair commentaries pouring from blogs and social media – then the newspapers could end 2015 better than they began it, in what has been a slow Q1. Chances are they could be the real winners of this election. Digital Promises Are Coming Good It’s long been said that newspapers haven’t adapted quickly enough to the new media world. And it’s an accusation which is hard to refute. It’s been axiomatic since the late 1990’s that the internet was going to change everything, but twenty years later some things have remained suspiciously unchanged. The reasons are plentiful but ultimately there’s one simple truth which underpins everything: newspapers are more profitable than websites. So it’s hard for publishers to turn away from print and towards digital when they know they’re only ever going to make less money by doing so. Particularly when the

investment required to build credible digital properties is by no means paltry. Now though it’s clear that consumers’ habits are changing so ubiquitously that publishers have been forced to make the change before it is made for them (or, more pertinently: without them). 2014 saw many newspaper publishers invest heavily in new digital talent and technologies which will help them compete, so in 2015 we’ll really see what the papers’ investment has bought them. It’s a fascinating time to be in the industry. Each of the newsbrands have adopted a strategy suited to them. Whether it be free content, paywall or pay meter each of their respective businesses will need to continue to evolve in 2015. News UK for example, now with over three years of subscriber information and therefore 1st party data will look to monetise a clearly very engaged audience further whereas brands such as Mail Online continue to show how free content can drive unprecedented levels of scale. It’s worth saying first that most of the newspapers are already making substantial gains with their online properties; many have seen huge user growth in the last twelve months. Often this has simply been down to more refined editorial strategies better suited to their audiences’ online habits. Titles like Metro have taken a ‘click and share’ journalistic approach aimed at making bitesized content designed to be reposted on Facebook and Twitter, very similar to the work already being done by Buzzfeed. The strategy is paying dividends; their monthly unique users are up 130% in the last year. One particularly pertinent success story is the Mirror, whose approach to digital news has changed the most radically. The hiring of

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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PUBLISHING

former Yahoo! Managing Director James Wildman in June 2014 has precipitated a huge shift across the entire business. As custodian of a vast network of national and regional print titles (123 in total), the Mirror have long been capable of providing massive reach. But under Mr. Wildman’s leadership their sites have not only seen huge audience growth (up 100% in a year) but a particular focus on mobile. The Mirror’s own mobile site is now the 12th most visited mobile site in the UK, and they are now appearing in Facebook’s top ten publishers of content shared. In 2015 they seem set to further their digital aspirations, exemplified with the hiring of Pete Picton, deputy publisher and video editor of the hugely successful Mail Online. Being a digitally pioneering newsbrand is perhaps a far cry from the newspaper’s rusty perception of old, making Mr. Wildman 2014’s (and possibly 2015’s) canniest appointment.

in the future; where readers decide the top stories rather than leaving them to an editor’s subjective intuition. If testing new ideas and journalistic models is indicative of the way the market is moving then the rest of 2015 will be a very interesting year indeed.

There are other success stories, too numerous to mention here in detail. The Independent are having great success with their slightly more irreverent news site i100, which has amassed a sturdy 594,000 monthly unique users since its launch last July. A ‘reader controlled news project’, it provides an interesting insight into the sorts of entrepreneurial investments newspaper publishers may be making more of

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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RADIO

Market Dynamics 2014 saw impressive ad revenue results for commercial radio with revenue for the year ending 7% up on 2013. Spot revenue has been the key driver of growth. This may be down to the work the industry has done into showing how radio spot can increase ROI for advertisers, with the RAB’s award winning ROI research showing that those advertisers who increased spend into commercial radio saw a significant return on this investment. Motoring continues to be commercial radio’s leading sector in terms of advertising spend, however it was the retail sector that really embraced commercial radio in 2014, up 26% on previous year. The retailer spending trend looks to have continued into 2015. The radio groups will be hoping that this advertiser demand continues throughout 2015 and are already reporting that the Q1 2015 marketplace looks buoyant. The market is currently incredibly busy and from a Mindshare advertiser point of view it is important that radio booking approvals are given as early as possible as late access to market may be limited. We are predicting radio ad revenues to up 4% for 2015.

Audiences – 34m continue to tune-in every week The latest set of audience results showed commercial radio listening remains steady year on year with 34.4m adults tuning in each week. Commercial radio’s share of listening has also increased slightly vs. the BBC to 44%. Overall digital listening grew by 6% on a year ago to 37.9% of all radio listening. DAB continues to be the main platform for digital radio consumption and accounts for a quarter of all radio listening for the first time. Around 28m people now tune in to radio via a digital platform (DAB, Digital TV & online/mobile). Twenty two percent of adults now claim to have listened to radio via a mobile phone or tablet at least once a month, up 38% on last year. Mobile and tablet listening continues to be more prevalent among younger audiences with 36% of 15-24s claiming to listen to radio via mobile or tablet at least once a month, an increase of 20% year on year. The digital audio market will become even more prevalent in 2015 with a number of new digital audio content providers starting up in the UK. As well as the music streaming services and digital radio we have also seen the launch of Acast and AudioBoom (formally AudioBoo), who aim to be specialists in providing spoken word digital audio content. (Source: RAJAR) Bauer repositions their station portfolio Early 2015 has seen Bauer Media reposition their station portfolio in attempt to further engage with listeners and provide a more distinct radio offering for advertisers. This has

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RADIO

included changes to their local network (formally the Place Portfolio) and taking the Magic Radio brand national. On a local network basis Bauer have dropped the Magic name from the AM frequency stations and have changed the name of these stations to match their FM counterparts, albeit with a 2 on the end. Therefore to give an example for Manchester, the FM station will remain as Key 103 and the former Magic Manchester station has become Key 2. The station formats remain similar with Key 103 as hit music and entertainment station and Key 2 playing greatest hits for an older audience. Bauer have also introduced a third local station via DAB which, to use Manchester as an example again would be known as Key 3. This third tier of local Bauer stations will be aimed at a younger 15-24 audience and potentially link in with the Kiss brand from advertiser point of view. The changes to local stations will also see a more coherent brand identity, across all Bauer regions and the network will be known as “Bauer City” from a national advertiser outlook.

station. The stations continues to broadcast on analogue in London and will now be available nationally via DAB. The national roll out of Magic has seen slight programming and playlist tweaks with the new “good mood music” station tagline. Once again the aim here is to provide advertisers with clear national radio brands with Magic alongside Bauer’s other main national radio brands Absolute Radio and Kiss. Overall Bauer believe focusing on clearly differentiated radio brands and formats will not only provide strong audience growth, it will also offer advertisers a coherent, simplified national and local proposition. Dee Ford, Bauer Group Managing Director said “This strategy marks a new era for Bauer Media’s radio brands. Our aim is to accelerate our significant lead in digital listening, growing our audiences both nationally and locally whilst making it easy for customers to access those scaled valuable audiences. Significant investment in content, talent, marketing and platforms is underpinned with the energy and drive of the Bauer Radio team”. These changes come after Bauer’s recent internal re-structure aimed at providing advertisers with better cross platform solutions across their portfolio of magazine, radio and TV brands. The restructure of the radio stations will also see them increase their competitiveness against Global Radio, who have spent the last few years establishing their national brands with advertisers.

The next big change from Bauer has been converting Magic London into a national

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OUT-OF-HOME

Market Overview

Key events… Election 2015

Despite Quarter 3 threatening to derail OOH’s continued year on year revenue growth, a late surge in activity and a stronger Quarter 4 saw OOH grow by 2.1% in 2014 versus 2013. As previously reported much of the growth comes from the continued interest and investment in digital OOH (DOOH). Across 2014 digital OOH represented 29% of all revenue and this trend has continued into 2015. Kinetic estimate that by the end of 2015 the number of digital panels in the UK will have increased by 25% on 2012 levels to just under 77,000. Much of the DOOH development in 2014 took place in enclosed environments such as malls, retail environments and transport locations – all providing opportunities to reach significant audience in environments where they tend to have longer dwell times. Much of this digital development was also outside of London, extending DOOH’s geographical reach and impact. 2015 Quarter 2 availability warning Two advertisers (Sky and BT Sport) have bought out the billboard market in the 4th May. This had had the knock on effect across all formats in this period and indeed on the 18th May and 1st June. The OOH market is looking buoyant up to the end of June. Occupancy and lead times have been increasing yoy with Route allowing OOH planners to more readily identify which sites offer a particular advantage for any particular audience. Lead times are currently 10 weeks.

As excitement reaches a crescendo OOH looks to the effect of the May election on our industry. Legally the parties are restricted to using private landlord sites as they are not allowed to use sites owned by government bodies. This prevents them from using busshelters and a proportion of the billboard market. As in 2010 budgets are tight and so we expect to see more tactical PR driving ads like those pictured on a handful of landmark digital sites. Digital OOH will also allow parties to evolve their message as they react to events leading up to May 7th. Key Events…. Rugby World Cup 2015 The autumn will see the Rugby World Cup come to England. It’s the 3rd largest sporting event in the world and we expect the major

Tickertape | The media market bulletin from The Exchange | Q1 2015 | © Mindshare

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OUT-OF-HOME

sponsors and partners to be active from August through to November. Tier 1 and 2 partners have had an exclusive opportunity to buy key OOH locations and networks and now all locations are available to any advertiser. Waterloo and Twickenham station dominations have sold to a tier 1 partner but there are still several digital and traditional opportunities to buy into the World Cup.

network across 30 cities providing a robust national offering, while Primesight will convert 50 static billboards in the regions to digital 48s. Likewise in specific environments JCDecaux are due to digitise 100% of their mall 6-sheets and Exterion will relaunch XTP with new HD kit that will finally do justice to the opportunity. Inventing the future of OOH OOH has always been an early adopter of new technology given its potential for enhancing how brands can engage their consumers. Back in January an unfortunate select few from the OOH industry travelled to Las Vegas to the CES show to assess and predict how we can incorporate the latest gizmos. Some examples that emerged are:

Recently Coke, Canon, and our own Dove for Men have joined the list of partners so we expect there to be several broadcast campaigns that will put pressure on the market. September and October is traditionally a busy time for OOH so lead times will be even longer long. The earlier we can get sight of Q3 plans the better. Looking ahead GroupM predict that OOH will grow by 3.1 yoy in 2015. All four of the big OOH media owners will be enlarging and enhancing their digital portfolios. Clear Channel will roll out their D6

‘Medical Posters’ - The Childhood Eye Cancer Trust have used posters with special ink to raise awareness and early detection of retinoblastoma (an aggressive form of eye cancer). The reflective ink mimics the effect of the cancer as seen in how a camera flash appears reflected in the eye. ‘Be in the know’ – promoted as a new type of travel guide, the ‘Taxi Trails’ website in Stockholm reports on the final destination of taxis based on their GPS recorded routes. The firm purports that visualising this information provides the ‘clever tourist’ with an idea of where locals go indicating popular places to eat, socialise or shop. If incorporated into the UK we could look to use this data schedule DOOH for regularly updated contextual targeting.

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do Omote justice with words, so please click on the link below to see the results. http://vimeo.com/103425574

‘Magic Leap’ – while OOH was one of the first mediums to adopt augmented reality with the Lynx’s Angels campaign, the Florida based firm Magic Leap are creating a lot of excitement in the tech world with their new ‘cinematic reality’ virtual experience. Thus far we have only been teased with a beautifully animated 3D miniature elephant emerging from a child’s open palm. However as more details of the technology emerge we can start to envisage how we can incorporate it into stunning OOH experiences surpassing anything previously seen. Face tracking technology has come a long way in recent years. So far in fact, that we now even see it being deployed in OOH screens in order to serve audience appropriate communications. But this latest iteration is perhaps one of the most visually arresting applications we’ve ever seen. Producer and technical director Nobumichi Asai, who has previously made a name for himself through his projections on buildings and cars, has collaborated with makeup artist Hiroto Kuwahara and digital image engineer Paul Lacroix to develop Omote. Using a combination of facial scanning and projection mapping, Omote can layer detailed and intricate visuals on subjects that are moving. And the results are stunning. We really can’t

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CINEMA

Demand; 2015 starts positively With 2014 advertising revenue only growing 4% year on year (Yoy) cinema sales house DCM, who account for approximately 80% of the UK cinema estate, saw their brand count increase by over 45% yoy. Expectations for 2015 are that this trend will continue and, led by an eye catching year of film, advertising revenue will be up 7% yoy. Q1 looks set to be up 20% yoy, driven by the automotive sector almost tripling its spend.

Top Q1 2015 spending categories (source: DCM)

FILM THE LEGO MOVIE: THE INBETWEENERS 2: DAWN OF THE PLANET OF THE APES: THE HOBBIT: THE BATTLE OF THE FIVE ARMIES: THE HUNGER GAMES: MOCKINGJAY PART 1 GUARDIANS OF THE GALAXY: PADDINGTON: X-MEN: DAYS OF FUTURE PAST: HOW TO TRAIN YOUR DRAGON 2: THE AMAZING SPIDER-MAN 2:

GROSS BOX OFFICE £34.3m £33.4m £32.7m £32.7m £30m £28.5m £27.2m £27.1m £25.1m £24.1m

Top ten grossing films from 2014 (Source: DCM)

Whilst there is no doubt that 2014 struggled with not having enough marquee films to pull in viewers, 2015 looks to have no such worries and Cinema is widely expected to have one of its biggest years. At face value, a brash prediction, but when you look at the upcoming slate there is genuine substance to the claim. The Cinema Exhibitors’ Association Chief Executive, Phil Clapp, notes "I cannot recall a time when the industry has been as excited about an upcoming film slate as it is now. Every month in 2015 we will see films released that people will talk about and want to see again and again”. January and February have born this out with respective admissions up +2% and +5% yoy.

Supply; 2015 to be one the best years for film? 2014 admissions finished down -4% yoy, in part due to the warm summer and a World Cup, but also due to a fairly weak film slate. Despite that there were still some standout films, notably; 12 Years a Slave, The Wolf of Wall Street and Guardians of the Galaxy.

Expected top ten grossing films 2015 (source: DCM)

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CINEMA

The year kicked off in force with the award season hopefuls Foxcatcher, Whiplash and Birdman all being well received by critics and cinema goers alike. Whilst Birdman and Whiplash went on to scoop a joint total of seven Oscars at this year’s awards, The Theory of Everything and American Sniper were the films that really outperformed their box office forecasts (The Theory of Everything was predicted to take £5m at the box office and actually delivered £22.2m whilst American Sniper increased from £2m to £13.7m). One of the most hotly anticipated films of this year, Fifty Shades of Grey, may have got mixed reviews, but its opening weekend grossed £13.5m, seeing its total box office estimate being raised from £15m to £30m. To offer further context, that weekend alone was the largest opening weekend of any film since November 2012. As we come out of winter and into spring, we start to see some of the big box office hits, such as the seventh instalment from the Fast and Furious stable. Extra sentiment is likely to be attached to this one, with franchise main stay Paul Walker dying half way through filming. The first of two Marvel films in 2015 sees Avengers Assemble: The Age of Ultron herald in the summer blockbusters. Again, directed by Joss Whedon, anticipation around the eleventh instalment in the Marvel Cinematic Universe is particularly high after the impressive performance and reviews of the first Avengers Assemble movie and last year’s Guardians of the Galaxy. Another potential blockbuster is Mad Max: Fury Road. Again the brainchild of George Miller, who was behind the original three films, we now see Tom Hardy take on the mantle as Max. Another return will be Jurassic World, this time set on an Island off

Costa Rica twenty two years after the last film. The release of the film has been delayed some ten years with the script having several revisions. We then see a number of large titles in quick succession with Minions (of Despicable Me fame), Terminator Genesis and Ted 2. November and December are set to see three of the year’s potential top four grossing films hit UK screens. The first of these is the twenty fourth incarnation of Bond. Entitled Spectre, Daniel Craig (Bond), is expected to come up against Oscar winner Christoph Waltz (believed to be taking on the role of Blofeld). Craig’s last outing as Bond became the biggest grossing UK film of all time and will no doubt prove a big draw for both brands and viewers alike. Forecast to be the year’s biggest film, Spectre is closely followed by The Hunger Games: Mockingjay Part 2, which will see the popular film series conclude. The year finishes with J. J. Abrams’s inspired Star Wars: The Force Awakens. Reprising the cast from the original trilogy the plot is currently a closely guarded secret and is already one of the most keenly anticipated films of the year.

Previous Bond, Skyfall, generated £104m gross at the Box Office

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Amongst the big names that litter this year’s cinema calendar are a few titles that could well do better than current predictions. Entourage, as a TV series, was compelling viewing and if the standard of scripting transfers onto the big screen (set for a June release) then it could easily outperform its current box office forecast of £2m. Ant Man is the second Marvel release in 2015 (July) with Paul Rudd taking on the lead role. The current success that the Marvel franchise is enjoying cannot be understated and it would hardly be a surprise if it surpassed the £10m it is predicted to deliver. Another July release that will be worth keeping an eye on is the new Pixar film, Inside Out. Pixar’s track record and their ability to produce films that both parents and children find humorous suggest a box office estimate of £17m may well be conservative.

The rise of the film trailer As most Facebook timelines are testament to, the intrigue in the next ‘must see’ film is quickly built through trailers. As discussed previously, anticipation is set to be high going into 2015, with an extremely stellar film slate ahead. By way of an example, the official trailer

for Jurassic World was viewed over 55m times on YouTube in its first week of release. The film studios, knowing how much interest there is from the general public, are becoming increasingly selective in how they release the trailers. The first trailer for Star Wars: The Force Awakens was initially only shown in thirty North American cinemas, across twenty states, before being released online. A similar approach was taken when the Star Wars franchise released the Phantom Menace in 1999, with seventy five cinemas across the US and Canada showing the film trailer three days before its full roll-out in US and Canadian cinemas. The trailer only appeared around three movies: Adam Sandler comedy The Waterboy, Brad Pitt drama Meet Joe Black, and Bruce Willis thriller The Siege. The affect? Ticket sales for these films dramatically increased as fans packed into cinemas to see the trailer. With trailers becoming more of an event in themselves and the film industry acutely aware of the power they have to build excitement and interest with an audience, surely media owners, advertisers and media agencies alike, should be looking at utilising such a captive audience? Brands may view this as an opportunity to follow a film from trailer to release, both on the big screen and on YouTube. Don’t be surprised if, by 2016, the clamour for exclusivity around the films and cinemas showing the most anticipated trailers means that the two UK cinema sales houses, DCM and Pearl & Dean, review the layout of the cinema reel and focus more on starting off with a sponsored trailer or, in fact, a spot that becomes the new, trailer orientated, gold spot.

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ONLINE DISPLAY

Programmatic Buying Explodes We have been seeing huge growth in the programmatic space for the last few years. This area is one that continues to evolve at a rapid speed and 2015 has already started to bring more exciting opportunities for everyone involved. Before we go into this though, we will start with a brief explanation on programmatic trading to dispel any confusion around the area once and for all. The IAB defines Programmatic trading as “the use of automated systems and processes to buy and sell inventory. This includes, but is not limited to, trading that uses real-time bidding auctions”. Inventory bought through programmatic can be bought in multiple ways. RTB buying is the most common method however there are three main ways in which inventory can be bought programmatically; buys from open RTB, buys in private marketplaces and programmatic direct buys. Open RTB: Inventory bought on an impressionby-impression basis in real-time through an open, unreserved auction which takes place in the open exchanges. Low barriers to entry means ease of access to both buyers and sellers. This has led to some issues of substandard inventory making its way on to the exchanges. However, open exchanges have maximum inventory and if approached carefully this can provide great returns for advertisers. Private marketplaces: Private Marketplace commonly referred to as PMP, is a customised, invitation-only marketplace where premium

publishers make their inventory and audiences available to a select group of buyers. This way of buying leads to increased transparency, efficiency and control of the process and stronger PMP arrangements means less reliance on open exchanges. Programmatic direct buys: Programmatic direct is a way to automate direct ad buys for set campaigns. Programmatic direct doesn’t just mean guaranteed (automated guaranteed), it also includes non-guaranteed (unreserved fixed rate) contracts. Not all programmatic is auction based and not every part of the buy is automated. PMPs and programmatic direct buys are considered as a safer method to buy programmatically and are more appealing to brand marketers because of the superior control mechanism. The IAB UK predicted that 46% of digital advertising would be traded programmatically in 2014 nearly doubling spends of 2013 which was 28%. This rapid growth was possible because of the advancements in technology to support private marketplaces and programmatic direct deals and continued maturation in programmatically purchased mobile / video advertising. Programmatic is no longer a buzz word but it offers a wealth of benefit for both buyers and sellers and should be embraced at scale. Let’s look at the benefits for all the stakeholders involved i.e. brands, agencies and publishers and finally look at some trends which might develop in 2015. Benefits of Programmatic Advertisers and publishers all are looking to achieve efficiency and a higher ROI but have different triggers for taking the plunge.

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ONLINE DISPLAY

For Publishers, programmatic has established itself as a viable source of ad monetisation and an effective sales channel. For advertisers and agencies acting on behalf of those advertisers, it is proving to be an amazing method allowing them to incorporate customer data and greater audience intelligence into digital advertising initiatives leading to superior results and actionable insights. There is still a misconception that programmatic means replacing humans with technology. The reality is that intelligent human input is key to the success of a programmatic campaign. Planners now need to think strategically about 1) the best route to buy i.e. open RTB, PMPs or programmatic direct, 2) what data they can ingest to improve targeting i.e. customer data or data from a data provider like bluekai, exelate etc 3) how best to optimise the live campaigns and future campaigns as we get access to a lot more data and there is an increased requirement of data analysis to make future campaigns better. If anything, programmatic method of executing media is far more complex and labour intensive than the traditional method. Some trends to look out for in 2015 and ahead PMPs and Programmatic Direct will increase the confidence of brand advertisers with the promise of better quality inventory: Open RTB will still be an important part but we could see more relationships established for PMPs and in the Programmatic direct deals. Increased control, efficiency and visibility provided by this method of buying should mean that we will see a lot more advertising

budget being spent on upper funnel activity as the confidence increases. 2014 saw a lot more brands rethinking their data strategy This will continue to happen in 2015 and brands will be tempted to invest in data management platforms to take control of their first party data. The idea of bringing all the media channels together and the ability to link all the data points up will further lead to growing of spends in Programmatic. Fraud and Brand Safety will still be key in 2015 According to estimates cited by various providers like Integral Ad Science and bodies like IAB, 15% to 30% of website traffic is considered fake. In fact, a major criticism of open ad exchanges is that they deliver fraudulent impressions. The IAB is working on various initiatives aimed to reduce the issues by recommending implementing controls such as using 1) Fraud Prevention tools like Integral Ad Science, Project Sunblock. 2) Increasing transparency of the source of inventory by getting publishers to disclose their domain when selling on exchanges and finally 3) breaking the black box systems which have come up in recent times. In 2014 Mindshare added layers of brand safety protection and fraud and this year will see even more measures put in place by us along with the industry to combat this space. Impact on Other Media Channels Up until now we have seen growth in digital predominantly display. However, we have also seen the impact of programmatic on mobile and video and we feel this year we will see more growth in both these channels. Increasingly, TV, radio and out-of-home media

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ONLINE DISPLAY

are becoming Internet-connected, forcing the question of how programmatic ad buying might be implemented in these different media to increase efficiencies. For example, Sky AdSmart provides tailored advertising to consumers viewing content on Sky. It allows us to pick and choose from a range of households attributes. We can now achieve higher levels of interest in TV advertising and positive impact following exposure leading to a positive action in store or online. Sky AdSmart launched postcode targeting in Dec 2014 which will enable advertisers to target Sky TV audiences based on the first two letters of the post code. In summary, 2014 saw major changes in programmatic with more brands and publishers adopting private marketplace and automated guaranteed methods. New technologies emerged and agencies developed expertise around programmatic buying and delivered their recommendations to clients. Whether or not the industry is ready for it, the statistics have shown programmatic is here to stay. It won’t replace people and it won’t replace direct-to-site buying, but this method of buying offers unique efficiencies. We will see more exciting evolutions in programmatic in 2015. Mobile retail surges in Q4 2014 – driven by Black Friday Sales Q4 each year is dominated by the Christmas period and this is the case above all in the Retail industry. The last couple of years have yielded record sales figures from digital channels, with mobile accounting for an ever increasing share.

In 2014, Q4 was massive for retailers, and Christmas played a big role (preliminary data indicating that in the UK on Boxing Day, over £500k was spent per minute on mCommerce sites) – however many retailers noted that there was a “Black Friday effect” on Christmas sales as a whole. In the US, retail giant Target saw 60% of its online traffic coming from mobile devices in November and December 2014, with a large spike occurring over the Thanksgiving weekend. In the UK, John Lewis, despite breaking their Click and Collect record over Christmas, saw a 1.4% reduction in overall sales. However, on Black Friday, johnlewis.com saw a 300% surge in traffic, with 70% of all traffic coming from mobile devices. 13,000 orders were placed in one hour between 8am and 9am, with the site crashing several times throughout the day. However, mobile’s impact on retail wasn’t restricted to the Q4 in 2014. According to Flurry data, mobile shopping grew 174 percent year-over-year across all devices, and on Android it grew 220% from the year before. This is big news, as the propensity for Android users to spend their money on mobile has always lagged behind iOS. With this increase, the playing field appears to be being levelled. According to Flurry, one of the reasons that commerce has gained traction on mobile devices, while simultaneously faltering in the desktop world is because it can capitalise on impulse purchases. Mobile showrooming is on the rise - a quarter of 16-30 year olds in the UK now use their mobile to compare prices and find additional information about a product – and with brands now beginning to recognise

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ONLINE DISPLAY

the power of mobile (and tailoring their mobile experiences accordingly) consumers are able to make their impulse purchases, easily via their Smartphone.

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SEARCH

PPC Evolves Beyond Simple Keyword Buying PPC continues to make up a large share of marketing budgets - accounting for 13%, according to eConsultancy’s 2015 Marketing Budgets Report, with its ability to better track ROI, a key part of that. The channel itself has seen huge changes in the last couple of years, since the introduction of Enhanced Campaigns in 2013. PPC ads have evolved, with the introduction of several ad extensions meaning they take up ever more space on the Search Engine Results Page (SERP) and contain more and more information. The basic tenet however of PPC has not really changed; a user is served up an ad relevant to their search query, and is then directed to a relevant landing page. What has changed, and will continue to evolve at a rapid pace, is the use of a searcher’s context as an underlying layer of targeting. PPC will continue to move away from simply buying keywords, with the increasing use of first party data for targeting. This has already started with the widespread adoption by advertisers of Remarketing Lists for Search (RLSA), with Mindshare’s client base alone more than doubling their usage of the product in 2014. Using RLSA, advertisers can target a searcher based on behaviour exhibited on their website. For instance, a user could have spent a certain amount of time on site, or viewed a product page, but not converted. They could then go on to perform more searches, giving an opportunity to re-capture their interest with a targeted offer, or simply to make sure an ad is more prominently placed.

In addition, products such as Google’s Universal Analytics gives not only the ability to target people based on a particular goal reached on a website, but also assigns them a unique, persistent ID, through which they can be tracked across device. With Facebook basing its re-launched adserver Atlas around unique IDs as well, cross device tracking has now become more of a reality than ever. This enables advertisers to build up a fuller picture of how a user interacts with their brand as they go about their online business. 2014 also saw the likes of app install and app re-engagement ads being rolled out. The latter displays an ad unit that deep links to a specific section within an app that a user has already installed on their (Android) phone, if that page is relevant to the user’s search. With customer experience set to be a key focus area for many companies in 2015 (according to the eConsultancy report mentioned above), we could start to see PPC moving beyond just a pure acquisition driving channel, playing more of a role in keeping users engaged with a brand. With the rise of Product Listing Ads (PLAs), which display product images on the SERPs based on website data feeds, and the use of local, time of day and device bid modifiers, PPC operations have definitely moved on from simply bidding to position on a specific keyword. This all means that PPC marketers will have to be as adept at audience segmentation and demographic targeting as they are at managing CPCs. Copy testing will also be more crucial than ever, as a more segmented audience theoretically means different wants and needs,

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SEARCH

meaning a need for a more diverse array of messaging. All this will in turn add an extra layer of complexity in managing activity, with campaigns and ad groups being sliced into ever smaller dimensions, leading to hundreds upon hundreds of different ad variations. This level of complexity will need to be matched with extra tools to deliver it, so hopefully Google (and Bing when they roll out retargeting), will come up with ways to ease that burden. Attribution Will Take another Step Forward Google released their Estimated Total Conversions metric in 2013, using signed in user data to try and put a number on the amount of people going on to convert on desktop from clicking on an ad on their mobile phone. Whilst this data is only estimated and relies heavily on probabilistic matching, it means that PPC is one of the only channels that is beginning to tie this behaviour together in a meaningful way. In Dec 2014 Google took this another step further and released another metric; Estimated Store Visits. This records in-store visits by using data from users who have location history activated on their mobile devices and previously clicked on an ad within the last 30 days. Interesting yes, and definitely a step in the right direction, but this is only the first step in tying up online and offline activity. Perhaps NFC and mobile payments could take off in 2015 too, meaning we could also layer in transactional data to measure actual conversions, using services such as Google Wallet – hugely valuable to any advertiser.

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SEO

Organic Search Market Overview Crafting quality content has never been more important as Google’s Penguin update continues into its fourth year, and the practice of spammy backlinks has been largely cut out by Panda. Google has become better at discerning information from long and varied queries that aren’t specifically to do with one keyword or phrase, something that greatly helps users who are familiar with Voice Search. More emphasis has been put on local algorithms allowing more companies to be found through local search. User benefits such as these helps Google maintain its dominance in search. However, we can no longer consider organic search as an isolated channel. The rise of paid search means Google’s homepage is a more complicated place than it was a year ago. Organic click-through rates (CTRs) are being impacted by ever more relevant paid results caused by sophisticated changes to ad extensions and the new Remarketing Lists for Search (RLSA). As user targeting in PPC develops, competitive search areas are becoming more dominated by paid search. This is illustrated in a recent study by an SEO tool company, Advanced Web Ranking, showing that first position CTRs have fallen on average from 26 per cent to 18 per cent when there is competition with ads.

Fortunately positions 2 and above seem largely unaffected and the same study even indicates that having one central top ad actually encourages users to click on the first organic link, pushing CTRs up from 26 per cent to 29 per cent.

At the same time Google’s ability to generate content itself from integrated data sources is also expanding and occupying space where organic search links once existed. See, for example, how Google picks up recipe information through microdata (Rich Snippets) from the BBC website and shows cooking instructions, and how graphed financial details for Tesco’s share valuation searches appear.

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SEO

and strategists look for innovative solutions to drive traffic to owned assets, organic search insights are fast becoming a vital ingredient of any media strategy. SEO is now being considered at the early stages of briefs and can no longer function as an end product as it used to.

Cross-channel optimisation with specialists will drive efficiencies

paid

In light of the changing face of Google’s results page it’s more evident than ever that SEO can no longer be considered as an isolated channel. Communication between paid and organic search teams is vital to ensure opportunities aren’t missed and cross-channel optimisation happens. This is equally the case with display and other forms of digital advertising that effect how content performs in search. We are well placed at Mindshare to handle this and the open office and hot-desking environment is a vital ingredient for fluid flow of information and recommendations. Close integration with planners will bring innovative searchable content strategies. What this also means is that brands need to adapt to drive organic search traffic, largely by exploring new content areas where paid competition doesn’t dominate. As planners

A big success of 2014 has been how we have raised the profile of search insights around hourly, daily and monthly search trends, content themes and user journeys which go on to inform media plans and campaign strategies. The challenge will be to improve the quality of this data and make sure every content and media planner in Mindshare is aware of the value search data can bring. To meet this objective the SEO team is working closer with Business Planning to learn and use their advanced modelling techniques which makes data work harder. At the same time we bring fresh points of view to Business Planning research projects which comes from our experience working with brand managers and exchange teams. We will need to optimise for Google’s content and visualisations. Google’s thirst for data means it will return more and more content in place of results. Putting aside the obvious questions this raises about data security, Google is also reading emails and can generate relevant content based on email content (for example; how my next Easyjet flights are listed above the first Easyjet organic homepage ranking).

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What this means for potential paid targeting opportunities is yet to be seen but it shows Google’s intent to become a content publisher of both public and private information. Brands will need to react by optimising the microdata behind webpages for search engines to read. They will need to consider that emails can be read and used in content creation. Brands will also need to continue optimising data feeds, particularly when it comes to merchant centres. Google’s ability to visualise and monetise data into content will undoubtedly improve over the year to come and brands need to make sure their public and private branded information is optimised and what they intend it to be.

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PAID SOCIAL

Introduction A few years ago there was much scepticism around the role social media could play in a marketing strategy. Now it regularly sits at the top of a media plan as brands come to recognize the ever closer relationship between social presence and their business goals. The rate of change within Social is as rapid as ever and over the last quarter we have seen a number of interesting developments. In particular we take a look at the growth of niche platforms, how mobile video has become ubiquitous and how social platforms are attempting to broaden ad reach beyond their own properties. Mobile Video becomes ubiquitous One couldn’t fail to notice the massive growth in video content within social news feeds over the past six months. In a short space of time we have seen it become one of the most viewed and shared forms of media on such platforms. Not only has this has facilitated a number of viral movements such as the ice bucket challenge, it has also increased use of video in social advertising. Indeed, early adopter brands have had particular success with Facebook’s video ad format, which has now overtaken YouTube in terms of available reach now auto-play views are now counted. Facebook has increased value for advertisers by rolling out video-retargeting; the ability to serve a further sponsored post specifically to engaged users. One of the big challenges for advertisers this year will be learning how to create engaging content which can achieve cut-through in newsfeeds now cluttered with video posts. The most forward thinking brands

are already producing bespoke video content for social platforms and they are likely to see a significant step-up in performance vs. competitors who simply amplify their TV ads without considering the difference in audience. Niche platforms continue to grow Aside from Facebook and Twitter, we have seen a number of other social networks increase their user base and ad offering. Pinterest core followers are between the ages of 18 to 34, often female and spend nearly 200 minutes every month engaging through their smartphone and tablet. The platform is used as a storyboard for sharing ideas and advertisers with a highly visual product range (fashion, food & drink) have been finding success by ‘pinning’ their own content. Tumblr is often considered as a topic-based image blogging platform aiming to combine the best from Facebook, Pinterest and traditional blogging. It continues to become increasingly popular with the under 35 crowd and is one to keep an eye on in terms of future advertising potential. Now with a higher user base than Twitter, Instagram’s high quality context has attracted many mid to high end brands, particularly FMCG’s, to showcase their ads amongst user content. The platform is going from strength to strength with nearly two thirds of users under 25, a valuable audience for long term growth. Saying that, trends have indicated that a reasonably high percentage of users lose interest in the platform as they get older.

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Facebook, Twitter extend ad reach Perhaps the most important developments were around how the big players are looking to extend the reach of social advertising beyond the home platform. A key example of this trend was the launch of Facebook Atlas in Q4 last year. Advertisers using Atlas can run display campaigns leveraging insights provided by Facebook as well as the benefits of targeting real users rather than cookies. Indeed, measurement is one of the key selling points with the ability to identify, track and target users as they jump across devices and platforms/sites. Aside from Atlas, Facebook itself now allows ads to be served across a network of partner apps without any additional set-up or cost. In response, Twitter have recently launched their equivalent platform in Beta, Publisher Network; a new way to serve Promoted Tweets on mobile apps which have a total reach of over 1 billion devices worldwide.

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REFERENCES

Summary & Indicators

Matt Russell

Audio-visual

Dean Marks

Publishing

Ben Maslen & Craig Smith

Radio

Tom Balaam

Out-of-home

James Byard

Cinema

David Sargent

Online

Sohel Modi & Neil Bruce

Search

Tom Hawkins

SEO

Bertie Miller

Paid Social

Liam Russell

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