In this week’s Week in Review: Unruly appoint Norm Johnson as CEO, Facebook announced Q4 results and CBS and Viacom discuss a potential merger. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.
Top Stories
Norm Johnston Named CEO of Unruly
News UK announced today it has appointed Norm Johnston, Global CEO of Mindshare FAST and Mindshare’s Global Chief Digital Officer, as CEO of its ad tech business Unruly. Unruly has been looking for a new chief executive since outgoing CEO and co-founder Sarah Wood announced her decision to step down last October. Johnston will report to Rebekah Brooks, CEO of News UK, which acquired Unruly in 2015 as a way to boost its online digital content and video distribution.
“Norm’s data-driven approach and deep understanding of marketers’ requirements will be invaluable to Unruly clients and the wider News Corp business,” said Brooks. “He’s a programmatic pioneer with truly global experience and I’m very much looking forward to working with him as we build on the milestones that Unruly has already achieved.”
Facebook Says Time Spent on Platform Decreased Due to Reduction of Video
Facebook’s beat expectations again with its Q4 results, released on Wednesday, but founder and CEO Mark Zuckerberg reported that time spent on the platform has decreased by five percent after the company’s decision to cut the amount of video shown on the News Feed. Revenues reached $12.9 billion in Q4, bringing the yearly total to over $40 billion, with the daily active user count reaching 1.4 billion. Monthly active users clocked in at 2.1 billion, a 14 percent year-on-year increase. However, the social media platform’s decision to cut the amount of video content that shows up in the News Feed, has caused time spent with the platform to drop.
“On our last earnings call, I said that video done well can bring people together, but too often today, watching video is just a passive experience,” said Zuckerberg via a blog post. “In Q4, we updated our video recommendations and made other quality changes to reflect these values.We estimate these updates decreased time spent on Facebook by roughly 5% in the fourth quarter. To put that another way: we made changes that reduced time spent on Facebook by an estimated 50 million hours every day to make sure people’s time is well spent. That’s how serious we are about this.”
CBS and Viacom Exploring Merger
US Broadcaster CBS and media conglomerate Viacom are exploring a potential merger, they announced this week. The two have formed special committees to explore the possibility of a reunification of the two brands, which split over a decade ago. The Redstone family already own a majority stake in both companies through National Amusements, but are keen to merge the two in order to stay competitive, especially in light of Disney’s recent purchase of the majority of 21st Century Fox, and AT&T’s ongoing attempt to buy Time Warner. A merger was mooted back in 2016 too, but failed due to the concerns of CBS shareholders, and the special committees formed this week have cautioned that the talks will not necessarily amount to anything.
The Week in Tech
Google’s Ad Business Earns $27 Billion in Q4
Google’s parent company Alphabet released its financial results on Thursday, showing that Google’s ad business bought in $27.3 billion in Q4 last year, helping Alphabet reach a 24 percent year-on-year increase in sales. The troubles Google faced over brand safety on YouTube seem to not have had too much of an impact as Alphabet CFO Ruth Porat listed YouTube as one of the key drivers of revenue growth, alongside mobile and desktop search. While sales beat expectations, profit per share came in below Wall Street’s predictions, leading share prices to fall by as much as four percent in the aftermath.
Flashtalking and Spongecell Merge
Data-driven marketing platform Flashtalking and personalised creative company Spongecell announced a merger this week which will see the two united under the Flashtalking brand. The companies say that combined they will offer dynamic creative expertise, products and services.
“The market leaders coming together is a response to a very real demand we see from brands and agencies,” said Flashtalking CEO John Nardone. “Increasingly they’re recognizing data driven creative is essential to connect with today’s consumer and have been asking us both to assist with our expertise, technology and processes to deliver better more impactful advertising.”
“Together we now deliver the market-leading DCO solution within the context of a complete buy-side ad serving solution: a truly independent technology and analytics partner without media buying conflict or bias, representing a clear and viable alternative to DoubleClick,” said Nardone.
Google Sets Out to Bridge TV and Digital with New DBM Tools
Google last night announced two new tools for its DoubleClick Bid Manager to help advertisers coordinate their TV and digital campaigns, which it says will enable them to reach TV audiences both over TV and over their digital devices. The first tool will use real-world triggers to coordinate campaigns across TV and digital devices, and the second tool will integrate TV measurement directly into the DoubleClick Bid Manager interface. The tools appear to not really enable cross-screen targeting, but rather are away to try to make TV and digital campaigns more coordinated. Read more on VAN.
RhythmOne Completes Acquisition of YuMe
Ad tech company RhythmOne announced today the final stage of its acquisition of YuMe, the last part of a deal agreed last summer. RhythmOne anticipates its expanded scale after the acquisition will make it a top five comScore ranked marketplace, and says the deal will create a combined organisation with one of the largest cross-device supply footprints in the industry.
JICWEBS and TAG Partner to Align Anti-Fraud Strategy
The US-based Trustworthy Accountability Group (TAG) and the UK’s Joint Industry Committee for Web Standards (JICWEBS) have announced they will work together to tackle issues facing digital advertising including brand safety, buying transparency, fraud and criminal activity. Both bodies currently have similar aims, but they hope now to exchange learnings and coordinate their approaches in an effort to better clean up the digital supply chain.
Ericsson Sells Media Solutions Stake After Disappointing Q4 Results
Mobile maker Ericsson has agreed to sell a 51 percent stake in its Media Solutions business to One Equity Partners it announced on Wednesday. Ericsson will retain the remaining 49 percent stake, and the two companies will launch an independent company to develop the business. The decision comes after a strategic review, in which it also decided to wholly keep and continue to develop Red Bee Media, the other part of its media operations. The news came after Ericsson released its Q4 results which revealed a fifth consecutive quarterly loss, with sales falling 12 percent.
The Week in TV
Fox Wins Thursday Night Football Streaming Right
Fox Sports outbid CBS and NBC to win the rights to broadcast Thursday Night Football, the NFL announced on Wednesday. Fox will produce all 18 Thursday Night games and will broadcast eleven, with the NFL maintaining exclusivity for seven games, in a deal reported to be worth $660 million per year. Analysts say the deal shows Fox committing to a sports focussed strategy, in the wake of Disney’s acquisition of much of 21st Century Fox last year, and that the deal will bring a measure of stability to the slimmed down company.
UK TV Ad Revenues Fell Two Percent in 2017 says WARC/AA
Ad revenues for TV in the UK shrunk by two percent in 2017, the first annual dip since 2009 according to estimates from WARC and the Advertising Association (AA). However the Advertising Association/WARC Expenditure Report’s results for the UK ad industry as a whole were positive, showing 3.5 percent year-on-year growth in Q3 driven by the strong performance of mobile advertising. Read more on VAN.
Linear OTT Pay TV Market Reached 7.4 Million in Europe in Q3 2017
Linear over-the-top (OTT) paid services reached 7.4 million subscribers in Europe by the end of September last year according to research from Dataxis, representing 13 percent growth over the previous quarter. The linear OTT market has grown largely due to the emergence of specialised sports and kids content offerings, say Dataxis.
Forty-Two Percent of US Customers Cap SVOD Subscriptions at $20
In the US, 42 percent of customers would only be willing to spend between $1-20 per month on subscription video on-demand (SVOD) services, according to research carried out by YouGov for IP video solutions company Phenix. While Netflix in its recent financial results said it believes there is plenty of room in the market for SVOD services, Phenix says the average customer would be limited to spending on one or two subscriptions, according to their data. The research also showed that latency remains a big block to live streaming, with 40 percent of respondents listing it as a concern.
‘Big Three’ SVOD Services to Triple Original Content Spending by 2022 says TDG
The ‘big three’ subscription video on-demand (SVOD) services, Netflix, Hulu and Amazon Prime, will triple their spending on original content by 2022, according to The Diffusion Group (TDG) Research. While spending on original shows has escalated over the past few years, TDG expects this to continue due to the importance of original content for attracting and maintaining subscribers.
“The big three SVOD players own 60 percent of TV streaming time,” says Brad Schlachter, TDG senior advisor and author of the new report. “And they are looking to maintain if not grow this share by creating compelling originals that serve both to attract new users and retain existing subscribers even as subscription rates increase.”
New TDG report examines the role of original content in driving viewer acquisition & retention, and the 5-Year content strategies of Netflix, Hulu, and Amazon Prime Video. (PRNewsfoto/TDG Research)
The Week in Publishing
Amazon’s Ad Business Grows 60 Percent in Q4
Amazon’s advertising business reached around 60 percent year-on-year growth in Q4 last year, according to its latest financial results. Amazon CFO Brian Olsavsky described the company’s growing advertising arm as a “key contributor” to Amazon’s Q4 sales growth of 38 percent year-on-year. The company doesn’t break down ad revenues explicitly, but “other” revenues, which is made up mostly of ad sales, grew 62 percent.
Meredith Closes Time Acquisition
Meredith Corp finalised its acquisition of Time Inc. this week, with president and COO Tom Harty taking the CEO role to lead the transition. The deal, which was struck late last year, will triple Meredith’s digital revenue, and give it an audience of 174 million unique US digital visitors, though Harty is tasked with turning around Time’s fortunes as revenues have been in decline for both its print and digital ad businesses.
Twitter Launches Sponsored Moments
Twitter expanded its ad offering this week with the introduction of sponsored “Moments”, which pairs brands with selected publishers in Twitter’s Moments stream. Moments are collections of Tweets and videos, some of which feature a variety of sources and some of which are put together by a single publisher, all based around the same event or story. Brands will now be able to sponsor single-publisher Moments, which can be promoted and targeted towards specific audiences. The feature is already live, with Bank of America the first customer, sponsoring Bloomberg’s Davos themed Moment.
AOP Figures Show UK Publisher Revenue and Confidence Rising
UK digital publisher revenue grew by 6.7 percent year-on-year in Q3 2017 according to data from the Association for Online Publishing (AOP) and Deloitte. The AOP’s quarterly Digital Publishers Revenue Index figures also shows that annual growth from online video increased by 34 percent on a 12 month rolling basis from October 2016. Confidence from digital publishers is also on the up according to the report, from both company and industry perspectives.
Vice to Combine All Ad Businesses Under Virtue Worldwide
Vice announced this week its decision to unite all of its advertising ventures under Virtue Worldwide, the creative shop it founded in 2006. Carrot Creative, the digital agency which Vice acquired in 2013, will therefore be integrated under the Virtue brand. The announcement was followed by news that Mike Germano, co-founder and CEO of Carrot Creative, has been let go by Vice following allegations of workplace harassment.
Over 40 Percent of Millennials List Facebook as Favourite Video Platform, finds Wibbitz
Over 40 percent of millennial and Gen X respondents to a survey conducted by video creation platform Wibbitz listed Facebook as their preferred platform for consuming video content, with over half of millennials ranking Snapchat as their second favourite platform. The research, which gave insight into content consumption trends for video, also found that mobile devices were the most commonly used for watching video content. Wibbitz said the results show the importance of brand and businesses creating multi-platform video strategies.
The Week for Agencies
Bank of America Merrill Lynch Expects Low Growth for Agencies
Bank of America Merrill Lynch expects three years of sluggish growth for the ad agency giants like WPP, Omnicom and Publicis, according to a note to investors seen by Reuters. BAML gave the world’s top ad agencies an ‘underperform’ rating, as competition from consultancies and more desire from brands to spend on tech and data rather than creativity and storytelling put pressure on the holding companies.
Unilever to Continue to Cut Agency Work
Consumer goods giant Unilever announced plans to continue cutting the number of agencies it works with as a cost saving exercise. The company says it managed to save around $700 million in production costs last year as it reduced its agency count and bought more advertising work in-house, which it says allowed it to spend more on media buying and in-store advertising. CFO Graeme Pitkethly says the strategy will continue, echoing P&G’s announcement last week that it too plans to continue slashing its agency count.
Microsoft to Build Publicis Groupe’s AI Platform Marcel
Publicis Groupe announced on Monday that it’s chosen Microsoft to build its AI platform Marcel that was announced last year. Publicis says Marcel will be used to enable collaboration between its workforce and clients, helping to identify connections between employees, pool insight and knowledge, and allow increased participation from employees in areas outside their usual remit.
Partnerships of the Week
Tapad Sells Partners with Brand Services for Cross-Device Programmatic Advertising
Social advertising tech company Brand Networks on Wednesday announced a partnership with cross-device marketing platform Tapad which the two say will bring programmatic display and social advertising together into one streamlined portfolio. The deal will see Brand Networks license the Tapad Device Graph for its campaigns, and Tapad will also offload its media services organisation on to Brand Networks.
“This expansion comes at a strategic time for Brand Networks, as the company continues to address the ever-mounting rise of video and mobile,” said Dave Fall, CEO of Brand Networks. “With the additional depth and scale of the Tapad Device Graph and the infusion of talent that comes with the addition of the Tapad media services team, Brand Networks is immediately equipped to handle video and mobile in the multi-device paradigm across display, as well.”
Alchimie and Unified Streaming Extend Partnership
Digital content distribution and monetisation platform Alchimie had extended its partnership with video streaming tech company Unified Streaming. The two first partnered in 2015, with Alchimie using Unified Streaming’s Unified Origin webserver plugin to power its on-demand streaming. Alchimie now says it is committed to further collaboration over the coming years, though the press release didn’t mention whether further collaboration will extend beyond Alchimie’s continued use of Unified Origin.
Netflix Integrated into Altice One
Altice USA’s home connectivity hub, which it sees as a replacement for the traditional cable box, modem and router, has been rolled out across Alice’s entire Optimum footprint with integrated Netflix access. “Now, Altice One customers who subscribe to Netflix can easily access their favorite Netflix shows and movies directly on Altice One,” said Paul Perryman, vice president of business development at Netflix. “And, with the upcoming Altice One remote control featuring a Netflix direct access button, they’ll be able to quickly access Netflix and enjoy their favorite content.”
Hires of the Week
Oath Appoints Vanessa Wittman as CFO
Oath has appointed Vanessa Wittman, previously chief financial officer at Dropbox, as its CFO. Wittman replaces Holly Hess, who will now lead an initiative at Oath’s parent company Verizon which seeks to save $10 billion in costs.
Publicis Makes Global Promotions
Publicis announced promotions for several senior members of its network this week as it seeks to increase collaboration between its branches. Alexandra von Plato has been hired as CEO of Publicis Health, her predecessor Nick Colucci has become COO of Publicis Communications NA, and Leo Burnett Worldwide’s Mark Tutssel will chair Publicis Communications’ new creative board.
The Week on Van
Merging Marketing and Utility can Make AR a Success for Brands says Oath’s Zeda Stone, read more on VAN
After Facebook’s News Feed Changes, What’s Next For Publishers? read more on VAN
UK TV Ad Revenues Fell Two Percent in 2017 says WARC/AA, read more on VAN
Google Sets Out to Bridge TV and Digital with New DBM Tools, read more on VAN
Rob Norman Joins Board of Playbuzz; Q&A with Norman & CEO Shaul Olmert, read more on VAN
Ad of the Week
The New York Times, Investigating Concussions in the N.F.L., Droga5
The New York Times’ ‘The Truth Has a Voice’ campaign continues with this spot released just ahead of the Super Bowl weekend. The ad very simply and effectively highlights how the paper has held authorities to account and helped bring about real world change.
