Q3 2015 - Mindshare World

The Media Market bulletin from The Exchange

Q3 2015

Tickertape | The media market bulletin from The Exchange | Q3 2015 | © Mindshare 2

CONTENTS

Introduction 3

UK Economy 4

Adspend Forecasts 7

Audio Visual 8

Affinity: Publishing & Digital Display 15

Out-of-Home 18

Biddable Media: Paid Search & Social 20

References 23


INTRODUCTION

Hello and welcome to the Autumn 2015 edition of Tickertape. We have re-worked the format of Tickertape slightly this month to reflect Mindshare’s structure with sections dedicated to Audio-Visual, Affinity (Digital Display and Print Publishing) and Biddable media buying. The out-of-Home market continues to have its own dedicated section. We believe that this reflects the modern media landscape more truthfully and we hope that you notice the difference. ____________________________________ As we went to press three months ago there were real concerns about a ‘Grexit’ – Greece leaving the European Union, a combination of shrewd political gamesmanship by the European Central Bank, and a pretty much complete capitulation to EU demands by the Greek government meant that this immediate threat to Britain’s economic wellbeing was avoided. However, the global economic picture remains uncertain, with analysts focus turning to concerns over a ‘slowdown’ in the Chinese economy, and weakness within American financial markets. ____________________________________ None of this seems to have had a negative effect on Adspend though, and for the third quarter in succession we have changed our forecasts upwards. We now believe that total Adspend will increase by 7.4% in 2015. TV has been the main driver of this and is now expected to increase by 7.8%. With retailers seeming to be in bullish mood as we approach Christmas, it would not be at all surprising to see this figure

significantly exceed 8% by the time we publish the final Tickertape of the year. Whilst the TV revenue market is booming, audience levels remain static, underlining the need for advertisers to reach viewers through non-linear video platforms. As such a measurement system that accounts for these platforms remains at the top of AV buyers’ wish lists, and it appears the BARB’s Project Dovetail is not yet quite fit for purpose… The Cinema market, meanwhile, is having a fantastic year. Revenue is up double digits, and with the promise of a bumper end to the year with the release of Spectre, the new Bond instalment, and Star Wars: The Force Awakens Cinema sales house will be confident of smashing their Q4 revenue targets. ____________________________________ Over the past few years Digital and Print Publishing have become increasingly intrinsically linked, and from now in in Tickertape we will be presenting our views on these markets as one. This month we have focused on the ‘freemium’ print market, into which music stalwart the NME has re-emerged in an attempt to prevent itself becoming yet another once-famous title to be consigned to history. ____________________________________ As ever, if you have any questions about the content within Tickertape, please do not hesitate to contact one of the Exchange experts referenced at the end of this document.


UK ECONOMY

UK Economic Outlook A recurring theme within Tickertape over the past couple of years has been that of a relatively stable and slowly improving UK economic picture, whilst the Global economic forecast remains uncertain and unpredictable. That outlook remains unchanged in autumn 2015.

UK GDP for Q2 2015 improved by a solid, if unspectacular 0.7%. Weak inflation, low interest rates and a strong pound have helped to keep consumer sentiment buoyant. The UK economy expanded by 3% last year in its best performance since 2006 and The Bank of England expects the same momentum to be maintained this year, currently forecasting 2.8% growth.

Quarter on Quarter UK GDP Growth 2003-15

However, after several years of rapidly falling joblessness, figures published by the Office for National Statistics on August 12th showed that unemployment grew by 25,000 in the three months to the end of June, to 1.85m. Worse, the number of people in work fell by 63,000

over the same period. That decline, which started in January, has lasted longer than any since the recovery began. Yet there was better news on the wages front. After years of stagnant earnings, Britons are now getting a pay rise. Wages rose by 2.4% year-on-year in the second quarter.

In other areas too, the jobs market is returning to its pre-recession norm. Over the past year the numbers in full-time employment have risen faster than employment overall, while the number of part-timers and freelancers has fallen. “Churn”, a measure of how many workers are changing employer (and a sign of confidence in the jobs market) is also returning to pre-crisis levels.

Economists are mainly upbeat about these trends, which suggest that the period of low wages may be coming to an end. Immigration from crisis-struck Europe and welfare cuts have increased Britain’s labour supply, keeping wages down and encouraging employers to hire more workers. But with unemployment now nearing its post-2000 average again, labour shortages are pushing up wages.

Although the government boasts that this is all part of its “long-term economic plan”, forces beyond its control have helped considerably. Whilst improving, average wage growth is still only around 2% a year - lower than its long-term average of 4.5%. The fact that people currently feel better off than they have for several years has been as much the result of low inflation - which is due to the collapse in global commodity prices - as of more generous pay. These benign conditions will not last forever, and with real earnings still 5.7% below


UK ECONOMY

their peak in 2008, the recovery still has further to go.

Global Economic outlook

Meanwhile the global economic remains unsettled and far from reassuring. Last week, the head of the International Monetary Fund warned that global growth is likely to be weaker this year than last. Christine Lagarde also said she expected there would be only a modest acceleration in 2016. She warned there could be an economic "vicious cycle" caused by higher US interest rates and the slowdown being experienced by China, adding that these threats could jeopardise recent economic gains in Latin America and Asia. According to Ms. Lagarde, "The good news is that we are seeing a modest pickup in advanced economies. The moderate recovery is strengthening in the Euro Area; Japan is returning to positive growth; and activity remains robust in the US and the UK as well. The not-so-good news is that emerging economies are likely to see their fifth consecutive year of declining rates of growth.” Going on to say “There is reason to be concerned. The prospect of rising interest rates

in the United States and China's slowdown are contributing to uncertainty and higher market volatility.” The inherent lack of confidence in the Global economy meant that Global stock markets delivered their worst performing three months in four years for the period July-September. Markets saw falls of between 7% and 15% over the three months with the Shanghai index falling furthest, down 25%. Confidence in stocks has been hit by the crisis in Greece, the Chinese slowdown, the threat of higher interest rates, and concerns that US stock is fundamentally overvalued. The threat of ‘Grexit’ seems to have been averted, for the time being at least, but the markets started the quarter in the throes of the Greek crisis. Many investors were convinced there would be no bailout, economic chaos in Europe, and a Greek exit from the Eurozone. That did not happen, but the European economic recovery remains anaemic at best. A week after the Greek agreement, China had a Black Friday with the Shanghai market falling over 6%, sending markets round the world into a tailspin. Markets are often derided as inaccurate economic barometers, but economists agreed that this indicated two very obvious facts: the Chinese stock markets were vastly over-valued, and the Chinese economy is slowing. Observations that are supported by a growing stream of weak economic figures coming out of China. In the medium term this may not be a bad thing. Lagarde’s take is; "China is in the midst of a fundamental and welcome transformation. It has launched deep


UK ECONOMY

structural reforms to lift incomes and living standards. These reforms will, by design, lead to a "new normal" of slower, safer, and more sustainable growth.” However, the slowdown will undoubtedly lead to short term uncertainty breeding a lack of confidence and volatility. Meanwhile, the numbers on the US economy are ambiguous. Figures for August showed a sharp 3.2% fall in exports as the weakening global economy and the strong dollar made U.S. goods more expensive for foreign buyers. U.S. employment figures released in August were disappointing, but not disastrous, and U.S. economic growth has been revised upwards showing an annualised growth rate of 3.9% - although this forecast was made before the summer collapse in exports. Mixed signals about the health of the U.S economy mean that the U.S. Federal Reserve continues to prevaricate on the issue of whether to raise interest rates – again adding to the uncertainty that the markets hate. Global GDP Forecasts

So, whilst the UK economy remains in pretty good health there are serious concerns to be addressed. Global uncertainty, weakened demand from China, the ongoing issues faced by the Eurozone economic region and the strength of the pound (which threatens UK

export markets), suggest that we can expect moderate economic growth over the next year at best, with the UK recovery facing serious global challenges. Selected Economic Indicators

GDP change (%) 2014 2015f 2016f

US 2.4 2.5 3.0

China 7.4 6.8 6.3

UK 1.7 3.0 2.8

Eurozone 0.8 1.5 1.7

The Economist, ONS, IMF

Component 2013 2014 2015f

GDP 1.9% 3.0% 2.8%

Inflation (CPI) 2.1% 1.0% 0.2%

Inflation (RPI) 2.6% 2.0% 1.0%

Unemployment rate 7.2% 6.0% 5.4%

Adspend 4.8% 6.2% 7.4%

Mar-15 Jun-15 Jun-15

GfK consumer confidence 4 7 3

ONS, BoE, GfK, Mindshare estimates


ADSPEND FORECASTS

Adspend forecasts Whatever the global and domestic challenges facing advertisers might be, adspend levels seem to be unaffected. Throughout 2015 GroupM have consistently revised TV spend estimates upwards with each quarterly edition of Tickertape. This quarter is no exception to this, with our TV market forecast now up 7.8% YoY, this figure is likely to increase again once the Christmas advertising bonanza is fully accounted for and may hit 8% by the year end. The Radio market appear to have cooled slightly, although we are still predicting YoY growth. Meanwhile Cinema advertising is booming and is up an impressive 12.5% - largely because of a strong slate of releases which is set to culminate with the new Bond and Star Wars films in Q4. Our predictions for the print and digital markets are unchanged, with the two continuing to enjoy contrasting fortunes as detailed in the chart to the right.

Revenue estimates (m) 2013 2014 2015f

Television £3,692 £3,870 £4,171

Radio £373 £403 £411

National Newspapers £1,089 £991 £912

Regional Newspapers £982 £913 £840

Consumer Magazines £422 £380 £342

B2B Magazines £263 £223 £201

Outdoor £771 £782 £803

Cinema £183 £190 £214

VoD £226 £287 £362

Internet £6,251 £7,145 £8,055

Paid Search £3,494 £3,847 £4,197

Display £1,812 £2,247 £2,697

Classified £888 £992 £1,102

Other £57 £60 £60

Total £14,252 £15,184 £16,309

Revenue estimates

(% change)2014 v 2013 2015 v 2014

Television 4.8% 7.8%

Radio 8.0% 2.0%

National Newspapers -9.0% -8.0%

Regional Newspapers -7.0% -8.0%

Consumer Magazines -9.9% -10.0%

B2B Magazines -15.3% -10.0%

Outdoor 1.5% 2.6%

Cinema 4.0% 12.5%

VoD 27.0% 26.0%

Internet 14.3% 12.7%

Paid search 10.1% 9.1%

Display 24.0% 20.0%

Classified 11.6% 11.1%

Other 5.2% 0.0%

Total 6.5% 7.4%

GroupM, Mindshare estimates


AUDIO VISUAL: TV

TV & Video market dynamics Despite the almost unprecedented level of inflation witnessed in Q1 (12%), subsequent months have seen fluctuations settle somewhat with the exclusion of August which saw unexpected revenue growth and audience decline resulting in 15% inflation adults. This will leave the full year with inflation of 8% inflation, driven in the main by revenues which will be up 7.8%, we believe.

Adult Audience inflation figures – Source: Mindshare/BARB, Sept 2015

It is worth noting that we are seeing larger growth in the VOD revenue market (+23%) Sky report that 10% of their views are being delivered through Sky Go, and provide the following example for their Sky Atlantic show True Detective, for which that ‘live’ viewing only accounted for 30% of the total delivered audience.

True Detective delivered impacts – Source: Sky Media/BARB

Consolidated numbers so far and predictions up to the end of the year shows few YoY increases in audience levels, with the majority of stations being either flat or down. Note that hype around the RWC has done little to stem the decline even amongst ABC1M audiences.

Audience Impact figures – Source: Mindshare/BARB By far the biggest loss has been to young adult audiences where we’re seeing 7% decline; this is indicative of this audience’s rapid adoption of new technologies and propensity to consuming media on demand. Thinkbox recently released a report on 2014 viewing habits which illustrates this well.

-5%

0%

5%

10%

15%

20%

£0

£100,000,000

£200,000,000

£300,000,000

£400,000,000

£500,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Revenue vs Inflation

Rev 2015 Inflation

-15%

-10%

-5%

0%

5%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

YOY Impacts

Ads Young Ads ABC1A HW+CH ABC1M


AUDIO VISUAL: TV

Source: Thinkbox, July 2015

Nearly 20% of a 16-24 year olds daily AV consumption is through catch-up and broadcaster VOD, but clearly this trend is not just isolated to young audiences. There has been a significant shift in trend in how individuals consume media and it’s becoming increasingly complex for brands to navigate the AV space and ensure their customers are still being reached effectively. More than ever, it is important for brands to have representation within VOD. Project Dovetail BARB, the panel charged with providing industry accepted TV audience measurement, is reacting to this change in audience behaviour, as evidenced by their latest project codenamed ‘Dovetail’. September has seen the release of their first TV Player Reports that details how they intend to measure nonlinear TV viewing.

The project intends to audit broadcaster online TV content, which is both catch-up TV and TV

viewed as live cross device. It will also offer accurate, consolidated, consumption levels for online viewing for the first time. A new, industry agreed, core metric has been devised; APS – Average Programme Streams that measures the ‘popularity’ of a given programme by providing a figure that indicates the average number of devices that played the programme in its entirety. It should be pointed out, however, that although detailed in some respects, the report still lacks a lot of the required detail to be considered a useful tool in measuring campaign effectiveness. As a result this important step still feels underwhelming. The report currently doesn’t audit advertising consumption and there is no mention of audience measurement which one can only assume is coming in Stage 2. In summary, what BARB has achieved so far suggests a fully workable solution to online AV advertising measurement is still some time off.


AUDIO VISUAL: CINEMA

Market Overview

We are seeing a bumper year in the Cinema market as we come to the end of Q3, following a very strong H1 of film. GroupM revenue predictions for 2015 have increased from 7% to 12.5%. This, however, could still be a conservative estimate. DCM, who account for approximately 80% of the UK cinema estate, have seen a 20% rise in revenue YoY from January to September, and with several blockbusters being released in Q4 they expect this to rise to 22-25%. Mindshare are starting to seeing unexpected traction from several clients wanting to get into the new Bond film Spectre.

Top 10 Category Spends for 2015 (Source: AdDynamix Sep 2015)

Admissions are up 9% Jan through to August (this equates to 9m extra admissions year on year) but with July alone showing a 20% increase in admissions, and a strong film slate for the rest of the year, this only looks set to improve – challenging the theory that cinema attendance is a fixed quantity which varies only in distribution. Another reason that could be contributing to the rise in admissions is the takeover from what once was ‘Orange Wednesdays’ (this ended when EE vacated the Gold Spot position

in January after 13 years) to the Compare the Market ‘twofer’ offer. They have extended this to include Tuesdays as well. Since this came into place, DCM have seen admissions flatten out across Tuesdays and Wednesdays. However, as all days of the week are up, it is hard to credit all of the increase to Compare the Market.

Top 10 Films 2015 so far (Source: DCM Sep 2015)

The family film slate has been very strong this summer; Minions delivered 6m industry admissions with Inside Out approximately one million behind. Currently, 5 out of the top 10 films for 2015 are family targeted films. Both Minions and Inside Out smashed box office predictions (both achieved over £11m more than expected). 2014’s top performing film was The Lego Movie which grossed £34.3m, both films have far exceeded this which shows just how strong the 2015 box office performance is, and nods to the rise in production values in ‘children’s’ films attracting a more adult audience.


AUDIO VISUAL: CINEMA

There have however been a few commercial disappointments over the summer including Ted 2 and the latest Terminator but despite this, ad spend surged in Q3 - up 30% for the same period last year. Packages based around the summer blockbusters (Jurassic World, Ant Man, Southpaw, Mission Impossible 5, Fantastic Four) underpinned this. Into September, Straight out of Compton is currently exceeding its £1.5m predicted takings at £7.7m and was top of the box office until the Kray Twin Biopic Legend was released. Currently sitting at £10m, and with Tom Hardy playing both Ronnie and Reggie Kray, this is set to carry on delivering. Looking forward to Q4, it’s easy to see why cinema is so ‘hot right now’. If Tom Hardy wasn’t enough, Jake Gyllenhaal and Jason Clarke climbing up a mountain in Everest are sure to turn a few heads. And if that’s not enough, how about Matt Damon in Ridley Scott’s adaptation of The Martian? And all this is before we mention the S word… Spectre. Daniel Craig returning once again to play James Bond in what is potentially the most anticipated film of the year. With predictions it will surpass Skyfall’s £50m, it looks set to enter the top ten biggest UK films of all time. 97% of all Spectre advertising minutage has already been snapped up, along with the Gold Spot (the last advert in the cinema reel, aired just before the film). There’s rumours of who has bought this premium position but you may just have to wait to see it for yourself in the cinema – or you could Google it! Meanwhile, Disney announced that the trailer for new film Star Wars: The Force Awakens

recorded 88 million views in its first 24 hours, so it’s bound to excel when released on 18th December. A trend emerging for brands is to partner with the distributor and use assets from a new film in an above the line (ATL) partnership. Audi and Marvel Studios joined forces for the release of Avengers: Age of Ultron. The film featured three next-generation vehicles alongside the next generation of Avengers characters. As part of the partnership, Audi released exclusive pieces of digital content and collaborated with Marvel’s comic book creator Stan Lee to deliver fans a comedic digital short closer to film’s release.

Another example of advertisers tapping into the use of film assets include Sky promoting their Sky Fibre Broadband with Toy Story, Minions and most recently Inside Out. This is a trend we will be watching closely in the coming months, especially with the release of Bond. We can always depend on a vast array of product placement but we should also expect to see a number of innovative executions, giving us even more reason to be excited about cinema.


AUDIO VISUAL: RADIO

Radio Market Dynamics The half year radio revenue figure was £285.2m. This represents a 1% increase year on year and a good result for the radio market considering 2014 was a bumper year for radio revenue. Having said that, it feels that the market has slowed in Q3 with stations struggling to reach the revenue heights of this time last year. Q4 was the largest quarter revenue wise in 2014 and radio owners will be hoping to see a repeat of this in 2015. In this respect, we are still predicting that overall radio revenue for 2015 will be up around 2% on 2014 to £587m. The motoring sector remains the leading advertising sector for commercial radio up 3.5% year on year, followed by Government which is up 12.9% year on year and the retail sector which is up a massive 15.8% year on year (source: NMR/Radiocentre). The latest radio audience figures have shown that 90% of the UK population are tuning into the radio every week with the average hours per listener now standing at 21.7. Commercial radio now reaches 34.6m listeners every week and has increased its share of listening vs. the BBC to 44.4% of all radio listening. Within this, Digital listening continues to rise with more than half of the UK population now tuning in via digital devices (29.5 million). DAB still accounts for the majority of digital listening but mobile and tablet listening are continuing to grow fast. 25% of adults are now listening to radio via mobile or tablet which is an increase of 13% year on year. This number rises to 36% amongst 15 – 24 year olds where we have also seen a rise in social media interaction, with 45% of this younger demographic claiming to

receive social updates about their favourite radio station or presenter (Source: RAJAR Q2 2015).

Goodbye XFM, Hello Radio X Much to the disappointment of die-hard fans, XFM ceased broadcasting on 11th September after 18 years on air. Global Radio are now celebrating the launch of new station, Radio X, which burst onto our airwaves on September 21st with Chris Moyles at the helm with his highly anticipated breakfast show. Available across the UK on digital radio platform D1, listeners will also be able to tune in via the old XFM frequencies 104.9 in London and 97.7 in Manchester (Global have handed back the frequency in Scotland).

Styled as “The first truly male focussed, fully national music and entertainment brand for 25 – 44 year olds” Radio X features a bloke friendly line up including many former XFM DJs as well as some well-known new talent in the forms of Vernon Kaye, Johnny Vaughn and Kaiser Chief Ricky Wilson. Global have launched a multimillion pound advertising campaign for Radio X featuring Chris Moyles and, like him or loathe him, Global are expecting big things. Currently the XFM


AUDIO VISUAL: RADIO

Network reaches 892,000 listeners per week but they are predicting that this number will rise to 2.67 million within three years. Controversially, the weekday line up only features one woman which some are criticising as old fashioned, however, Radio X insist that this is irrelevant and instead are focusing on the content, promising to continue to deliver a playlist full of the ‘best fresh rock and guitar based music’. To help celebrate the launch, a series of live music events, the Radio X Road Trip, will take place across the country. The first programme of events will be hosted in O2 venues around the UK to celebrate the introduction of the new national station.

Radio X is an essential addition to the Global portfolio. With their larger radio brands having a more female bias in terms of listenership, a station that offers advertisers more scale against a male audience fills a gap in Global Radio’s station portfolio and will allow them to compete further within radio marketplace. Although XFM listeners will be upset to see the station go, it never really reached the listening figure heights it deserved. It is therefore easy to see why Global have gone ahead with the re-brand and spent millions on talent and marketing in a bid to build a station they can commercialise on a larger scale.

Interestingly, competition within the market for this male audience is set to grow. Bauer’s Absolute Radio have reacted by launching on FM in the West Midlands - the first time Absolute has been made available permanently on FM outside London - swapping out the other Bauer owned station Planet Rock that previously broadcast on this FM licence. This should see Absolute Radio increase listenership. Virgin Radio is also set to re-launch in the UK on the new digital 2 multiplex.


AUDIO VISUAL: RADIO

FOCUS ON – DAX (DIGITAL AUDIO EXCHANGE)

How does it all work? DAX (Digital Audio Exchange) has now been live for one year and claims to have seen a massive 100% increase in listener figures, going from 3.5m in June 2014 to 7m in June 2015. The majority of this increase is from acquiring new digital audio providers. With DAX now claiming to represent ¾ of the available digital audio market, booking through them gives advertisers the chance to build incremental reach through a single buying point. It is particularly prevalent for those tuning into digital audio providers via mobile devices. Brought to us by Global Radio, the idea behind DAX was to solve the splinter problems across the digital advertising space, bringing together radio and streaming devices to reach and engage new audiences who don’t necessarily listen to traditional radio. The DAX portfolio is now made up of 140 partners including

traditional radio brands like Absolute, LBC and Capital as well as digital audio providers such as Deezer and Audioboom. It aims to reach listeners on all connected devices and desktops. DAX also offer some specific audience targeting and it allows you to geo target by post code. It does still however have some way to go in terms of becoming the truly programmatic option it wishes to be. Earlier this year DAX announced a partnership with Xaxis in a bid to create the first programmatic digital offering. The partnership is still finding its feet, but through “Xaxis Audio Powered by DAX” advertisers will eventually be able to reach highly targeted audiences in real time. The easiest and most simple way of using DAX is to play out the same audio ad as you are using for your traditional radio campaign. However, if an advertiser wishes to, they can also support their ads with visual elements such as launch screen pop ups, to enrich content for consumers and advertisers. Having said that, initial research shows that visual elements did not achieve high click-through rates as many people are listening to their connected devices via headphones with their mobile in their pocket or whilst they are doing something else away from the screen. DAX are currently exploring ways to combat this and build better visual elements that listeners will interact with more. Mindshare very much believes that clients should be active in this space. Xaxis Audio and DAX provide a simple and effective way to increase reach by engaging with audiences that potentially don’t listen to traditional commercial radio.


AFFINITY: PUBLISHING AND DIGITAL DISPLAY

Digital Display and Publishing as one This is the first edition of Tickertape where we will present to you our views on market developments across the Publishing and Digital markets as one. We are now coming to the end of our first month as the Affinity department and viewing both developments and opportunities from the entire landscape allows us to bring the best opportunities and best insight to our clients and our business. Sir Martin Sorrell, Chief Executive of WPP, who spoke at the Future Forum in Sydney said, ‘the days of separation are gone’ when discussing the media landscape, insisting that segmenting by platform will be a thing of the past. Interestingly, when you look at the Affinity team’s evolution you can see it reflected in Sir Martin’s stance. Originally two separate departments, Print and Digital, the Print team evolved to form Publishing, taking a multi-platform view of traditional print publishers. Sir Martin said “it's dangerous to separate legacy print that's felling trees and distributing newsprint and online print and similarly very dangerous to separate print from television, radio, and the other media”. This even further emphasises the ‘content is king’ approach, recognising that people consume content in different ways across all channels. Sir Martin also stated his belief that people consume traditional media like Print and TV in ‘deeper’ ways than some digital areas. "Engagement by consumers on traditional media such as newspapers and linear TV is greater than you see on areas of the internet, so we have to be balanced."

Two new ‘freemium’ Print titles launched Excitingly, this quarter has seen not one, but two Publishing based launches. In a day and age where launching printed publications can be seen as a risk it is refreshing to see two companies taking a risk with these launches. Interestingly enough both of these are in the ever growing ‘Freemium’ market. First up we have Coach, from Dennis publishing. Due to launch on October 7th, Coach will focus in all things fitness, health, style and entertainment. The primary focus will be on being active, taking care of your mind and body and generally getting advice on all facets of life from Coach. Due to launch with a distribution of 300,000, London will be the primary focus but not exclusively. Dennis have the advantage of leveraging their established Men’s Fitness brand to bring guidance and expertise to the editorial side of the launch. This is quite unique for a brand new launch and Dennis will be sure to really utilise this existing pool of editorial staff. It’s this unique approach that could see a successful launch. Several key brands from Mindshare will be present in the first issue, especially those after a young male affluent audience.



The second launch is more a rebirth. NME, Time Incs iconic and historic music weekly publication has just gone free, with the first issue coming out on the 18th September. With a very different print landscape these days, NME looks set to capitalize on its strong brand credentials to help rebrand the print publication. Digitally, NME remains a go-to destination for music lovers everywhere and it will be fascinating to see whether the print edition can revive the huge audience it once had.

Perhaps the most interesting element of this rebirth will be whether the brand can maintain its much championed editorial. Known as a brand in the know and a go to destination for in depth music reviews, insight and culture, some will worry that mass distribution and the free approach will lead to more pop culture editorial. Brands such as Time Out have successfully managed to keep its editorial identity and NME will look to follow this example. It’s exciting to see such an iconic

brand branching out into the successful free market. Instagram continues to grow Facebook announced this week that Instagram now has 400m users, up a staggering 100m since the last official figures were released. These 400m users have shared over 40bn photos to date and each day over 80m photos and videos are shared. This top line growth is impressive and once again, a real feather in Facebooks cap as they continue to grow not only their own original property but those they acquire and develop. Whilst these are global numbers, the USA only makes up 25% of the user base and the UK specifically has over 14m users. Fantastic scale available to share client assets such as videos and images that historically clients invest a lot of money in. Instagram offers great visual opportunities to clients looking to reach younger audiences and advertising take up of Instagram is growing; we expect we will see more targeting and creative opportunities in the near future. News UK buys Unruly In other news, News UK announced its acquisition of viral video specialists Unruly media, bringing the company under its umbrella but allowing the three principal founders to run the business reporting into the company. The co-founders Scott Button, Sarah Wood and Matt Cooke will report into recently rehired Rebekkah Brooks.



This is an interesting move by News UK. They have been steadily growing their content, video and creative partners over the last couple of years. Unruly’s expertise in video and the ability to use rend data to help videos go viral will add another layer to the News offering. With a seemingly stable Times paywall and a recently opened Sun proposition, both high quality data and scale will be there for Unruly to tap into.

It will be fascinating to see how Unruly’s proposition will be put into proposals by News. They have worked for some time with digital creative agency Rocabox who form large parts of brief responses. Only time will tell but it is refreshing to see more connection between publishers and intelligence driven publishers such as Unruly.

AOL re-invented? AOL are making some dramatic changes in a bid to reposition itself. Still largely remembered as a walled garden service loaded from a free CD-Rom, AOL had been bolstering its adtech offering for the past few years with the acquisition of companies such as GoViral (video distribution - $97m, 2011), Adap.tv (programmatic video - $405m, 2013), Gravity (native advertising - $91m, 2014) and Convertro (attribution modelling - $101m, 2014). This pattern has continued in recent months: in May, the US mobile network

Verizon announced that it was buying AOL for $4.4bn. This was soon after AOL’s announcement in that they had agreed a video distribution deal with NBC Universal. Then in June, AOL announced that it had struck a deal to take over all of Microsoft’s digital ad sales, meaning that alongside its existing offerings, AOL will also be responsible for selling ads on MSN, Skype and Xbox. These were followed in September by the confirmation that AOL is buying mobile ad sales network Millennial Media for $238m.

The Verizon deal is widely seen as a move by Verizon to establish itself as a major player in the adtech space. The New York Times have speculated that Verizon’s real aim with the deal was to get access to AOL’s ‘powerful but little known mobile video and advertising technology’. The NBC and Millennial deals also show how mobile and video have become the key priorities for most digital media owners in recent years as they both give AOL access to much more video inventory than they could have reached previously. With IAB research showing that mobile video consumption is dramatically increasing, AOL and Verizon are clearly trying to position themselves as a key player in this space alongside Google (through Youtube) and Facebook.


OUT-OF-HOME

Market Dynamics Despite the slight dip in Q2, the Out of Home market became extremely buoyant again during Q3 as the heavyweights BT and Sky fight it out for sporting rights in addition to advertisers support for the Rugby World Cup. Lead times are still hovering around the ten to twelve week mark. November and December are also looking strong with advertisers entering the market looking to target Christmas shoppers from early November. We recommend any advertisers still looking to book Christmas focused campaigns to do so as soon as possible – particularly if we are looking to target particular retailers or use Route to identify the best panels and locations for our audience we will need to plan now to get the pick of the market. Given how strong Q3 has been and how Q4 is shaping up, we expect Out of Home revenue to be up 2.6% year on year and early indications suggest 2016 will see low single digit growth. TFL appoints JCDecaux Arguably one of the largest changes for decades to the OOH market was announced this quarter. After decades of stewardship under Clear Channel’s Adshel brand, TFL announced that it was awarding the world’s largest bus shelter advertising concession to JCDecaux in a deal worth €700m across a period of eight years. The handover process will be relatively swift, coming into effect in January 2016 and affects 10,500 6-sheet sites - predominantly bus shelters. With the announcement only recently formalised,

JCDecaux will announce how they plan to develop the inventory to sell to the market on the 7th October. Clear Channel’s market share of the UK roadside 6’s market will fall 8% from 62% to 54% and they will be left with 35,000 x 6’s in 250 local authorities across the UK. JCDecaux’s share will increase to 36%. Clear Channel will still have a presence in London of 7,300 panels as they have retained Local authority contracts in Ealing, Kensington and Chelsea, Greenwich, Haringey, Sutton and Bromley. They’ve also just won Tower Hamlets. The majority of the remaining panels are located in the London ITV outer ring in towns like Guildford, Southend, Hemel Hempstead and Chelmsford. In terms of cover they are claiming to still be able to reach 80% of the UK population and 70% of Londoners.

It’s still unclear if the shelters will be replaced or just rebranded with JCD signage. The likelihood of removing all the shelters looks improbable in such a short handover period. However, with Clear Channel currently installing a national network of digital 6-sheets in the key cities around the country in line with recent trends, it is certain that JCDecaux’s


OUT-OF-HOME

plans for London will feature a strong element of digital development in the capital. While malls, rail and to a smaller degree large format roadside panels already provide a national digital footprint, the development of a key city roadside small format network opens the way for advertisers to create strong national coverage at the “touch of a button”. Cromwell Road re-vamp Likewise in a break with tradition, Clear Channel are redeveloping their iconic Cromwell Road 96 sheets in West London into a digitised version by the end of Oct 15.

Could you recognise your city just by listening to it? Stimulating our different senses can be a powerful way to get people to feel things. We are after all intrinsically driven by our emotions. For the majority of us we also feel an emotional connection to the city we live in; where we live forms part of our identity.

So could you recognise the city you live in purely by listening to the ambient sounds it makes? And would certain sounds inspire you to visit a new city? This recent OOH campaign from European high-speed train operator Thalys thinks so. In a drive to get people to explore other cities near them they captured over 1000 unique sounds from Thalys destination cities including Paris, Brussels and Amsterdam and imbedded them in 3 interactive screens. Passers-by could be transported to a different city simply by plugging in their headphones.

An engaging concept that works to subvert the usual reason we have headphones in the first place or as Thayls themselves rather nicely put it: ‘Headphones are often used to block out a city. With Thalys Sounds of the City, they were an opportunity to rediscover one!’ https://www.youtube.com/watch?v=ltcNSZu0nZc#t=79

https://www.youtube.com/watch?v=ltcNSZu0nZc#t=79

https://www.youtube.com/watch?v=ltcNSZu0nZc#t=79


BIDDABLE MEDIA: PAID SEARCH & SOCIAL

A is for Alphabet Perhaps the biggest news in the Search world this quarter seemingly came out of the blue, when Larry Page and Sergi Brin announced the creation of a new company called Alphabet, under which all their disparate companies would sit. Over the years Google have acquired several businesses that diverge from their core search offering, with the likes of Nest (home networking), Life Sciences, and Calico (biotech) all sitting under the Google banner. Allowing them instead to operate as their own entities under Alphabet means they can benefit from closer support and investment from Page and Brin, whilst also allowing Google to concentrate on their search efforts. Twice referring to a ‘slimmed down’ Google in his announcement letter, the subtext from Page also seems clear; re-focus on their original mission to organise the world’s information to ensure they remain at the forefront of search, through which they have become the multi-billion dollar company they are today.

Continually beleaguered by anti-competition and data privacy enquiries in the EU and elsewhere (one complaint brought about by the Russian search engine Yandex actually recently being upheld), some are speculating that Google could also split further into region-

specific companies, to ensure they better adhere to local rules and regulations.

In terms of search however, not much will change, and this move will probably serve to ensure that the speed of innovation that keeps them ahead of the game is kept up. App Marketing Strategies Getting Increasing Focus One of the other huge shifts, which is news to no one, has been the move to mobile, with many sectors experiencing consistently higher levels of traffic on mobile than desktop (61% of people searching for the iPhone 6s on launch weekend did so on their mobile, for instance). The trouble for Google however is our love of apps. As more and more people shift to using mobile apps to find out information and carry out transactions, Google have been faced with the risk of being shut out, as they traditionally have not been able to index app data. However, Q3 saw them introduce their Universal App Campaign type, which offers a kind of one stop shop for all their app promotion formats, giving advertisers the



ability to let users both discover and re-engage with their apps wherever they are across the Google ecosystem. This of course works best if Google have been able to index the app in order to serve up the most relevant ad to a user, giving them access to all that data that they can then use to fuel their advertising products. With the likes of Starbucks seeing 5m app transactions a week, and Walgreens in the US seeing app users spend 4x more than usual, companies would do well to start thinking about what a well thought out app strategy could do for them. While app ads are not a particularly new means of getting exposure, there have been significant developments in the market which focus on re-engaging users who already have the app installed. Analytics solutions are increasingly being used to feed-back detailed usage information, just as Google Analytics does for websites. From there, custom audiences can be generated based on usage patterns, with the opportunity to identify regular users from dormant ones, for example. The prospect of re-targeting these segments programmatically becomes interesting, with the potential to serve tailored or dynamic messaging that increases relevance for the end user. For example, a hotel booking app could predict when someone was stuck at an airport due to bad weather by using device location and weather data and serve a bespoke message which takes them directly to a tailored list of hotels within the app. Up and coming technology providers such as AD-X can track engagement at a granular level

using custom event tags with the app. In turn, partner agencies can leverage this data to make better informed media buying decisions and improve the user experience by working closely with the developer to remedy pain-points and reduce drop off. Indeed, these ad tech innovations provide opportunity for digital and media agencies to help clients market their app beyond driving the initial install. With time spent within apps increasing, it’s likely that the most successful brands will be the ones investing in tracking solutions, leveraging that usage data to find efficiencies and re-engage rather than alienate their audiences. Search Continues To Morph Into….? The rise in app usage also goes hand in hand with the growth of digital assistant services like Google Now, Cortana, Siri and Facebook M all of which rely on using data collected from a user’s device to serve up relevant information. This in turn means that we’re getting closer to seeing what the evolution of search that has been talked about over the past few years actually looks like; serving up answers to questions that you haven’t even asked yet. What then are the implications for biddable media? For instance, with Wunderlist integrated with Google Now you could get reminders to buy eggs if you pass your nearest supermarket after a certain time period has elapsed (i.e. since you bought your last box - integration with Google Wallet perhaps?). With Google announcing integration of Google Now with several new apps, and Search being baked into Windows 10 and iOS9, we’re perhaps not far



off having to get our heads around how to do truly ‘predictive’ paid search. Facebook M Facebook now has its own personal digital assistant project, M, following in the footsteps of Apple with Siri, Google with Google Now, Microsoft with Cortana. The development of M has been focussed around completing everyday tasks and finding information on your behalf. However its personality isn’t purely artificial, with real people having trained and nurtured its artificial intelligence engine.

Unlike other AI assistants in the market, M has the unique ability to actually complete tasks on your behalf, although the real world functionality is likely to be limited at present. Under specific scenarios it can do things like purchase items and book restaurants, flights, hotels and make appointments. While it’s early days for the project, Facebook are thinking beyond fulfilling people’s need for information with their assistant, by reducing the number of steps needed to fulfil recurring tasks. Instagram ads People are going to Instagram for visual inspiration in ever greater numbers, with figures released showing the community has continued to grow rapidly, now at 400m users, with nearly 75 percent of said users living

outside of the US. Efforts to monetize this have also been rampant, with Instagram recently making their ads platform available on a self-serve basis to advertisers both large and small. The development team have also been hard at work syncing Facebook’s wealth of targeting capability with the platform, allowing advertisers to refine their messaging and hone in on people based on what they care about. Brands now also have access to a greater variety of ad formats, developed to solve specific business problems and objectives. Of particular note are the carousel formats, making use of the inclination to swipe laterally on mobile devices and even the ability to shop for a product right from the app. Some of the latest reveals include landscape photo and video ads and Marquee, a premium buy aimed at advertisers looking to rapidly increase brand or product awareness. The scarcity and high production values of branded content on Instagram has yielded very strong branding results for advertisers thus far. Of all campaigns measured for ad recall, 97% recorded an uplift according to a recent study. Advertiser Made.com found that the average order value of Instagram users was 10% higher than average, while game developer Kabam found users were more likely to play their games for longer and make more micro transactions. Having now lowered the barriers to entry for smaller advertisers, the question will be how will users react to the increase in ads and how will this affect tolerance and tendency to engage with sponsored content.


REFERENCES

Introduction & UK Economy Matt Russell

Audio Visual: TV Mark Hewitt

Audio Visual: Cinema Nancy Day

Audio Visual: Radio Sarah McCarroll

Affinity Craig Smith & Tim Luckhurst

Out-of-Home Oli Ford

Biddable Media Tom Hawkins & Liam Russell

Q3 2015 - Mindshare World

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Transcript of Q3 2015 - Mindshare World