Following mixed 1H results from the global marketing services holding companies, this week we saw some of the smaller UK players start to report. Two trends are clear across the board: sales cycles are getting longer, and clients are delaying commitments due to macroeconomic uncertainty. Given the less-favourable trading environment, both M&C Saatchi and S4 Capital have revised their full-year guidance downwards, expecting a year-on-year decline in the top line for 2023. There has especially been weakness in the creative segments. Unlike its larger peers, S4 in particular has been pressured by its focus on technology clients, which have seen weaker spend; this has also impacted M&C’s Media business. Both companies are working on internal cost savings and improving efficiencies. Despite the tough environment, LBG Media has been a bright spot, delivering 10% revenue growth in the first half. Content views have been growing strongly, and pitching conversion has significantly improved. Looking forward, sentiment on advertising on social media is on an upward trend, which should be supportive. Trustpilot also saw good momentum in trading, which has continued into 3Q. Things are turning for the business, with a resilient top line and on the path to increased profitability. Increased shareholder returns are also becoming an emerging theme, with share buybacks announced by Future earlier in the year, and now Trustpilot and S4 also considering following suit. Finally, Ascential reported a strong 1H, driven mainly by the success of Cannes Lions and Money20/20 in Europe. Next week, we have the final major UK marketing services group Next 15 reporting, as well as Learning Technologies.
Magna increases US ad spend growth forecasts for 2023 and 2024
Magna, the IPG Mediabrands agency, has increased its forecast for US ad sales to 5% growth for 2023 and 6% in 2024, up from the June projection of 4% and 5% respectively. Including events such as the Summer Olympics and the US election, Magna forecasts ad spend to grow by 8% next year. This upgrade is due to an improved economic outlook and sustained growth in digital advertising. It now expects Digital ad sales for 2023 to grow by 10% versus the 8% projected in June. By 2024, Magna expects digital to account for 70% of all ad spend. Within digital, social media has recovered from the Apple privacy changes and is expected to grow 13% in 2023 and 11% in 2024. On the other hand, traditional media owners are experiencing a slowdown of 4% in 2023. While their digital format continues to grow, it is offset by the decline of traditional formats. AdAge
Ofcom retains PSB ad restrictions, and may extend content rules to streaming
The UK's communications regulator, Ofcom, has decided to maintain the current stringent TV advertising regulations for public service broadcasting (PSB) channels, despite the previous proposal to align them with the more lenient rules for non-PSB channels. The decision is due to the uncertainties on potential benefits and concerns about news content being diluted by more advertising. Meanwhile, the British government is planning to extend Ofcom's content regulations to include more internet-based TV channels such as Netflix, Amazon Prime and Disney+. This move is aimed at striking a balance between protecting viewers, especially the young and vulnerable, and preserving freedom of speech without imposing excessive burdens on the TV industry. BroadbandTVnews, Reuters
UK broadcasters launch digital service platform Freely
The UK's major broadcasters including the BBC, ITV, and Channel 4 are launching a digital service named Freely, which will allow access to all free available channels without the need for an aerial. Currently, viewers can access broadcasters’ live programs through their individual apps on smart TVs, but there isn’t a one-stop shop to access all channels. This move is aimed at levelling the playground for public service broadcaster channels with large streaming platforms by making them easier to find. The service will be integrated into the next generation of smart TVs from next year, effectively transitioning the Freeview TV platform to the internet. FT
All3Media kicks off sales process
The British television production company, All3Media, is officially up for sale, according to Reuters. All3Media, which could now be valued at around £1bn, is Britain's largest TV and film production company. Liberty Global and Warner Bros Discovery bought the company for an enterprise value of c.£550m back in 2014, and are said to have shared information with potential buyers who expressed interests. This includes ITV, which is 10% owned by Liberty Global, and Blackstone Group. ITV said in July that it was not “actively exploring” an acquisition of All3Media, but would continue to “monitor” it as a possibility. Other interested parties include the North Road Company. Reuters
MoneySavingExpert launches Gen AI chatbot but remains cautious
MoneySavingExpert.com (MSE), a leading UK editorial brand owned by Moneysupermarket, has begun using a generative AI-supported chatbot to answer reader queries. Despite concerns about the AI's potential to generate incorrect responses, MSE's editor-in-chief, Marcus Herbert, has praised the tool's performance so far. The AI module, which only uses MSE's archive to generate responses, aims to simplify readers’ access to MSE content. The company is proceeding with caution: known for its accuracy and fact-checking, it is also wary of potential damage to its reputation from AI misinterpretations. Valuing trust and privacy, MSE primarily generates revenue through affiliate marketing, without accepting ads or sponsorships, and minimizes data collection. However, MSE is considering a shift towards a more personalized approach with a sign-in feature on its app, although sharing additional information will remain optional for users. The AI chatbot will serve as one of the tools to collect more user data. Press Gazette
- Pearson CEO Andy Bird steps down. FT
- Online Safety Bill become law after years of delay. Sky
- WARC Media forecasts Instagram to hit $71bn revenue by 2024. WARC
- ITV boss warns a hard 2H for broadcasters due to weak macro in the UK . FT
- Warner Bros Discovery to expand UK studios' capacity by over 50%. Reuters.