This week, another big tech, Amazon, joined Meta and Alphabet in reporting better-than-expected advertising revenues. This highlights the rapid growth of the retail media sector. GroupM predicts a roughly 10% increase in this sector by 2023, accounting for 14% of the total ad market. As the largest e-commerce platform, Amazon is well-positioned to benefit from this trend. The demand for Amazon’s ad services is high, as it allows advertisers to directly engage with consumers, backed by a wealth of first-party data. This has led to Amazon gaining more market shares and becoming the third-largest digital advertising platform, holding 7.3% of the market, trailing only Meta and Alphabet. Turning to global holding companies, following disappointing results from IPG and Omnicom, WPP reported slower-than-expected growth of 2% for the first half of the year. The company cited reduced spending and delayed projects in the tech sector as the main issues, similar to its peers. This has resulted in a downgrade of full year guidance from 3-5% to 1.5-3%. Currently, the expected full-year growth for global holding companies ranges from 1- 5% (IPG: 1-2%, Omnicom 3-5%, Publicis approximately 5%). In the UK, 4imprint released an unscheduled trading update, with PBT expected to significantly exceed market expectations. Despite concerns over the US economy, 4imprint’s# strategy has yielded strong revenues and profit. A generally positive tone from the rest of the results this week, with Gannet upgrading profit guidance, GlobalData on track to meet its full year double-digit growth target, and both National World and Pearson in line for the full year.
News of the week
Meta’s new privacy proposal in EU, also to launch new AI chatbots with personas
Under growing pressure from privacy regulators, Meta has proposed to seek consent from European users before showing them targeted ads based on their digital activities. These are known as ‘behaviourial ads’ on both Instagram and Facebook. The proposal could be implemented as early as the end of October. Previously at one point, Meta denied access to users who opted out of data collection, however, since April, European users have been given an option to opt out of targeted ads, albeit through a somewhat lengthy process. The new proposal removes complexity - allowing users to simply select 'yes' or 'no' to targeted ads, while still being able to use the apps even if they opt out. This change could negatively impact Meta's ad revenue if a large number of users choose to decline targeted ads. Also this week, Meta announced plans to launch Generative AI-powered chatbots with distinct personas as early as September. These chatbots are capable of interacting with users in a human-like manner. They not only have the potential to boost user engagement, but also gather a wealth of data that could be used for targeted ads. This move follows similar initiatives by competitors, including Character.ai and Snap's 'My AI' feature. FT, WSJ
WPP and Spotify announces global partnership
Spotify and WPP recently embarked on a global strategic partnership with the aim of integrating Spotify’s insights with WPP’s Choreograph platform to facilitate a more effective connection between brands and customers. By leveraging Spotify's first-party data and neuro-insights research, WPP can help their clients gain a deeper understanding of audiences’ listening patterns. This, in turn, can inform more effective digital audio advertising strategies. In addition, WPP’s clients will have an opportunity to gain early access to Spotify’s ad products. This partnership not only broadens Spotify's client base through WPP but also allows WPP to promote Spotify’s ad products via thought leadership studies and training programs. The first output of this partnership is a WPP client-specific version of Spotify's Sonic Science insights study. This study delves into the relationship between Spotify, digital audio ads, and listeners. The findings reveal that Spotify drives higher levels of engagement than other media formats, with ad engagement remaining high for both music and podcasts. WPP
Ofcom report: broadcast TV saw steepest audience decline ever
This week, Ofcom released its annual report on media consumption trends in the UK. One trend highlighted in the report is the sharp decline of traditional broadcast TV in the UK, with weekly audience reach falling to 79% in 2022 from 83% in 2021 (88% in 2019). This is a continuation of the structural shift away from "linear" TV viewing since the pandemic. Interestingly, even older audiences, who had been loyal linear TV audiences, are switching to digital services. Despite the shift from linear to streaming, BBC One and ITV1 are still the top two first choices for UK viewers when they turn on TV, with Netflix only coming in third. In the meantime, short-form videos are gaining popularity among young people. In the first quarter of 2023, two-thirds of households were using a subscription streaming service, a slight decrease from the peak of 68% in the first quarter of 2022. What’s attracting eyeballs away from TV (linear and streaming) is short-form. The report said that seven in ten 15-24 year-olds watch short-form videos on a daily basis. Ofcom said there are more competitions for attention than ever as audience is presented with an ’all-you-can-eat’ buffet of content, however, public service broadcasters are still acting an important role of bringing the nation together. Ofcom, FT
M&C Saatchi wins ads brief for Every Story Matters campaign
M&C Saatchi London has been appointed by the UK's Covid-19 public inquiry to create advertising for Every Story Matters, a campaign designed to gather evidence about the pandemic's impact on people. The campaign encourages individuals to share their experiences without the need for formal evidence or public hearing attendance. M&C Saatchi will work with a research agency, which will be appointed this month and M&C Saatchi will not collect or have access to the experience data. The UK Covid-19 inquiry, chaired by Baroness Heather Hallett, was launched to evaluate the UK's handling of the pandemic and identify future lessons. The inquiry has already received responses from over 12,000 people and has the support of more than 60 organizations which includes Age UK, Marie Curie, Shelter, Sense and the Royal College of Midwives. It has reportedly cost taxpayers £100m and could potentially exceed £200m. Campaign
Ladbible forms partnership with data analytics firm Skyrise
LBG Media and data analytics firm Skyrise have formed a partnership aimed at enhancing LBG’s understanding of its audience. LBG reaches 69 million people across its five brands, accessing two-thirds of all 18-34 year-olds in the UK. This is a very attractive but notoriously difficult age group for advertisers to target. LBG believes the partnership will further power their industry-leading, data-driven solutions provided to its advertiser clients. The partnership has already shown benefits in LadBible's recent collaboration with the British Army, where Skyrise's data analytics significantly aided in efficient traffic driving and application submissions. Campaign
Other news
- Ad verification platform DoubleVerify acquires AI company Scibids. Campaign
- Media is ending news access in Canada. The Guardian
- Sky Media trials ITV’s media-buying platform PlanetV. Campaign
