Five trends that will change the media landscape in 2018

Streaming services will take more cues from traditional media

Streaming services are working hard to steal eyeballs from traditional broadcasters – and they seem to be succeeding. Netflix beat analysts’ expectations by adding 5.3 million new subscribers during the third quarter of 2017.

And it is planning on spending some serious money to continue that trajectory, with a content budget of roughly $8bn (£5.9bn) for 2018 – a major leap from the $2bn (£1.5bn) it spent last year.

“While we have multi-year deals in place preventing any sudden reduction in content licensing, the long-term trends are clear,” the company said in a letter to shareholders. “Our future largely lies in exclusive original content that drives both excitement around Netflix and enormous viewing satisfaction for our global membership and its wide variety of tastes.”

However, there has been a recent shift among these newer players to return to traditional models, which is something we could see more of this year.

“Platforms like Netflix are increasingly beginning to pilot their own shows, releasing content on a weekly basis rather than in bulk. This return to tradition will become the norm, rather than the exception in 2018,” says Dror Ginzberg, CEO of video creation platform Wochit. “Despite online video being a digital medium, traditional TV models lend themselves to keeping audiences coming back for more.”

Despite the growing popularity of Netflix, Apple TV and Amazon Prime, the streaming giants have their own disruptors to watch out for. Ginzberg predicts consumers will increasingly opt for more personalised streaming services, leading to fragmentation in the market. For example, Shudder shows only horror films for £5 a month.

“The choice will be completely fragmented, as some platforms will have exclusivity over content, meaning no one streaming service will be able to cater to every consumer’s needs. Instead, we’ll likely see a rise in more niche streaming platforms to cater to increasingly diverse audiences,” he says.

Publishers will reassess their relationship with digital giants

Last year, there was a palpable sense of change when it came to the relationship between advertisers and digital giants Facebook and Google. Their once robust image of offering reach and scale was steadily tarnished by measurement errors and brand safety scandals.

Unsurprisingly, traditional publishers have been one of the first players to try and benefit from their downfall. News UK and The New York Times both launched aggressive campaigns focused on the trustworthiness and quality of their journalism – with some success.

Chris Duncan, managing director at The Times and The Sunday Times, believes digital giants will look to improve their offering so as to not scare off advertisers. But the relationship between publishers and the digital duopoly is also set to change.

Earlier this year Google removed its ‘first click free’ policy, thereby giving publishers the freedom to decide how many (if any) articles they provide readers for free.

What ended during the course of last year is the belief that relying on those platforms can fund your journalism entirely.

Chris Duncan, The Times and The Sunday Times

“We’ve seen significant movement from Google to support subscriptions in a better way, which has been welcomed. Facebook has a similar programme but has delivered less in terms of tangible benefits for publishers,” he says.

Facebook is now planning to downgrade posts from publishers, having trialled a separate News Feed last year, which is likely to significantly impact media brands’ audience traffic.

Duncan predicts publishers will look to become less reliant on the digital giants by reassessing the importance of their own independent platforms. Consumers can undoubtedly expect publishers to make a harder push for their attention with more marketing campaigns in the pipeline.

“From a publisher’s perspective, you have to make sure you have an independent platform and that you’re focused on driving subscriptions and forming direct relationships with customers. That relationship [with the digital giants] is simply a means to grow the business rather than a means in and of itself,” he says.

“What ended during the course of last year, is the belief that relying on those platforms can fund your journalism entirely. It’s not realistic.”

Magazine publishers will up their focus on measurement

Like newspapers, magazines have long suffered from falling print sales. According to the most recent AA/Warc Expenditure report, advertisers spent £877m on the medium in 2016, marking a 6.8% decline compared to the previous year. And more doom and gloom is on its way, with spend forecast to drop further by 6.8% in 2018.

Digital spend for magazine brands, however, increased 0.2% for the same period. It is therefore unsurprising that the magazine industry wants to shout louder about its ability to drive sales and brand trust across different platforms, including digital.

A new industry measurement system, Audience Measurement for Publishers (AMP), will be implemented later this year, which publishers hope will lead more brands to reconsider the medium and lead it to become more closely aligned with news brands.

The system will provide advertisers with de-duplicated reach and frequency for magazine brands across all their platforms (mobile, tablet, PC and print), to show how audiences move between platforms and increase the number of brands across digital platforms.

“It’s a huge seismic step forward,” says James Wildman, CEO at Hearst Magazines UK and new chairman for Magnetic, the marketing body for magazines. “What the industry has been crying out for, and what planners have wanted is a de-duplicated, single search reach metric for our media. It differentiates us even further from other media that we’re competing with.”

Due to the measurement data being verified by a third party, Wildman believes the new system will convince advertisers to invest more in magazines instead of other digital platforms.

“Lots of value is lost in the media supply chain at the moment. The advertisers we speak to are voicing ever-clearer concerns around things like measurement, and we will soon have a gold standard measurement system in place. It will also allow publishers to bring to the forefront the scale of their businesses,” he says.

“Ultimately, it means we can drive a much more collaborative approach within our industry to play at our collective strength instead of competing within our own market.”

Broadcasters will battle disruptors with addressable TV

Addressable TV has admittedly been around for a number of years, allowing advertisers to show different ads to different households while they are watching the same programme.

But it is set to skyrocket in 2018. Virgin, Channel 4 and ITV have all indicated their moves into addressable TV, a space which has traditionally been occupied by Sky Media.

It’s not surprising; online targeting is commonplace, which is why brands are keen to do the same for TV advertising. And with marketing budgets coming under increased scrutiny, brands are ever more keen to prove the ROI on their activity. It also allows smaller brands to get involved, says Jamie West, deputy managing director for Sky Media UK.

“It is making TV more relevant. Television was traditionally for big brands, but addressable TV has made it available to smaller advertisers. When you go beyond that as a capability, it gives TV much more flexibility. It enables you to think about targeting discrete messages to different audiences,” he says.

There is clearly a lot of value in high quality content, and so you have to spend more on it. But there will be less margin for error for big budget failures.

Matthew Bloxham, Bloomberg Intelligence

Yet concerns around declining advertising spend remain. The most recent figures from AA/Warc predict spend will fall 2.4% in 2017, before recovering in 2018 and growing 2.8%.

West admits that consumer behaviour has been changing rapidly, which is why Sky has looked to respond by making its content available on every possible channel. He insists TV can stand its ground – as long as it keeps investing in quality content.

“The competition for viewers continues to be a tough market, but the level of investment in content from Sky, ITV and Channel 4 is growing at a huge rate, which is positive,” he says.

Matthew Bloxham, senior analyst for EMEA telecom and media research at Bloomberg Intelligence, agrees. With Netflix and Amazon posing an ever-greater threat, TV is undoubtedly facing a challenge to keep attracting eyeballs. Bloxham says the more traditional players can at least slow the transition by investing in their own platforms and prioritising high quality content.

He explains: “There is clearly a lot of value in high quality content, and so you have to spend more on it. But there will be less margin for error for big budget failures. In a shrinking market, especially for ITV with its reliance on ad revenues, broadcasters have to continue to draw in those big audiences, and focus on what kind of audience they’re pulling in and find a way to get a premium on the product they offer. Only that way will they protect their revenues.”

Digital out-of-home will get more personal

Last year, more marketers were predicted to align their mobile marketing strategies with out-of-home (OOH) campaigns. This included serving mobile ads based on people’s location, or refining outdoor campaigns to improve mobile interaction.

This time around, programmatic is making a big splash. Media agency MediaCom recently launched an automated trading desk, which will allow advertisers to purchase digital out-of-home (DOOH) advertising programmatically.

Historically, DOOH buyers have purchased advertising manually, with the ability to buy ads off a 27,000 strong data set route. The new automated technology supposedly allows brands to reach an audience more flexibly, taking insights from roughly 55 million data points including geo-location.

Drinks brand Innocent is the first company to use MediaCom’s new technology, for a campaign spanning London, Manchester and other key cities for a month. The campaign has data at its core, which identifies the best times to be live across each screen. The creative will also feature bespoke messaging by city and even specific locations.

“This moves us from generic broadcast media to relevant, personal, real-time connections. It’s all about targeting the right people at the right time. It’s great to see the potential for OOH to be used in a more targeted fashion, and talking in terms of audience as opposed to buying panel sites really brings it in line with other available media, particularly digital display,” says Bara Hrdlickova, senior brand manager at Innocent.

John-Paul Major, head of programmatic futures at MediaCom, adds there have been “massive” changes in digital out-of-home, but that the negative headlines around programmatic should not impact the medium itself.

“There are brand safety checks in place with our company, which the rest of the industry is following as well. We should separate out what people think about programmatic in display versus the medium itself. While there are no barriers to entry for content creation in programmatic advertising, programmatic in traditional media is very brand safe and viewable,” he says.