In this week’s Week in Review: Ads are no longer Italian TV’s primary revenue stream, Publicis outlines AI’s role in CTV, and Netflix looks for ways to boost its ad business.
Subscriptions Overtake Ads as Main Source of Italian TV Revenues
Subscriptions have overtaken advertising as the main source of Italian TV revenues, according to the Communications Authority’s (AgCom) Annual Report. This marks the first time advertising has not been the main revenue stream in the Italian TV sector, which was worth around €8 billion in 2022, down 0.3 percent on 2021.
The revenues came mainly from subscriptions (39.1 percent), followed by advertising (36.8 percent) and the TV licence fee (24.1 percent). Subscriptions and licence fees grew their share (from 38.1 percent and 23.5 percent respectively) from 2021, while ad revenues dropped from 38.5 percent.
The report also showed that public service broadcaster Rai made up the largest share of total revenue (29.6 percent), followed by Comcast/Sky (23.4 percent) and MFE (19.7 percent). Although Rai and MFE saw their slices drop by 0.1 and 0.2 percent respectively, Sky witnessed the biggest drop at 4.5 percent. Meanwhile the SVOD services (Netflix, DAZN, TIM, Disney+ and Prime Video) grew their market share by 5.2 percent, now accounting for 17.1 percent of total TV revenues.
Publicis Says AI Plays Critical Role in CTV
Publicis Groupe executives spoke at length about the impact of AI technologies on the agency group’s business in its Q2 financial results this week. And CEO Arthur Sadoun said the group’s existing investments in AI are already giving it an advantage in several areas, including CTV and retail media campaigns.
By combining AI with Publicis’s Epsilon identity solutions, Sadoun said Publicis is able to run better and more efficient ad personalisation across media, as well as better outcome measurement. And in CTV ad retail media, AI plays “a critical role” in finding reach and incremental sales for marketers.
Sadoun added that it’s still very early days for AI’s used in advertising, stating that we’re just beginning to see its potential. A priority for Publicis will be making sure its existing investments in AI are utilised across the entire business.
The statements came off the back of a strong quarter for the agency, in which organic revenue growth came in above expectations at 7.1 percent. Given this strong performance, Publicis has now upgraded its outlook for the full year, projecting five percent organic revenue growth across the year.
Netflix Cuts Basic Ad-Free Plan in Effort to Boost Ad Business
Netflix has announced it is cutting its cheapest ad-free subscription plan in the US and UK, a move which looks designed to drive uptake of its cheaper ad-supported plan (or push users on to a pricier subscription tier).
The news, delivered alongside Netflix’s Q2 financial results, comes alongside fresh hints at the progress of Netflix’s push into advertising. The company revealed that overall subscriptions to its ad-supported tier nearly doubled in Q2. But this growth was from a small base – Netflix hasn’t revealed its full subscription count for Netflix with ads, but revealed in March that US subscriptions had reached one million. And revenues generated by advertising are still not material in relation to Netflix’s overall business.
“Building an ads business from scratch isn’t easy and we have lots of hard work ahead, but we’re confident that over time we can develop advertising into a multibillion-dollar incremental revenue stream,” the company said in a letter to shareholders.
The Week in Tech
Twitter Ad Revenues Down, Hate Speech Up
Twitter remains cash flow negative due to a 50 percent drop in ad revenues, according to a series of tweets from Elon Musk this week. Meanwhile research from the Center for Countering Digital Hate, the Anti-Defamation League and Media Matters has revealed spikes in hate speech, harassment and misinformation on the platform during Musk’s tenure. New CEO Linda Yaccarino called the findings “incorrect, misleading, and outdated.”
We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.
— Elon Musk (@elonmusk) July 15, 2023
Lidl Owner Enters Retail Media Partnership with The Trade Desk
Schwarz Media, the retail media unit of Lidl owner Schwarz Group, has entered a new partnership with The Trade Desk. Using Schwarz Media data, the agreement will enable advertisers to measure the impact of digital ads on direct sales and optimise campaigns accordingly. “Through our new partnership with Schwarz Media, advertisers can now activate this rich retail data that will enable their campaigns to reach the right audience, while providing measurement to demonstrate the impact of their marketing activities,” said Samantha Jacobson, EVP and CSO at The Trade Desk.
TargetVideo Acquires Brid.TV
TargetVideo, a German video publishing and advertising company, has acquired online video platform Brid.TV. TargetVideo provides video production and marketing services, adding Brid.TV’s video player, content management system and ad tech stack to its offering. Financial terms were not disclosed. “This acquisition not only gives us access to the international market but also accelerates the development of our ad technology and ensures that our publisher network remains ahead of the curve,” said TargetVideo CEO Maximilian Gall. “Now, we can offer brands and media agencies an expanded range of programmatic advertising options.”
Vans World Skates Past 100 Million Visits on Roblox
Vans World, the skate brand’s virtual area on gaming platform Roblox, has surpassed 100 million visits, the company announced on Thursday. Since its launch in September 2021, users have logged more than 8 million hours on Vans World, which has also seen brand collaborations with Gucci, The North Face and Stranger Things. “Throughout the past 2+ years, Vans has built an experience that prioritises what is really valuable to the Roblox community,” said Marcus Holmström, Co-Founder and CEO at The Gang Sweden, developers of Vans World. “Their emphasis on quick, fun gamification, customisation options, and smoothly maintaining brand integrity has helped drive success in this experience.”
Amazon Interactive Video Service Integrates Bitmovin Analytics
Amazon Web Services (AWS) has added Bitmovin Analytics to its live streaming solution, Amazon Interactive Video Service (Amazon IVS). The Bitmovin platform complements the existing analytics available on Amazon IVS, according to the companies, in order to support data-driven advertising strategies. “Bitmovin Analytics with Amazon IVS is a robust solution, providing deeper session analytics that can pinpoint playback issues and provide actionable insights to resolve them to ensure IVS-powered streaming services are delivering exceptional viewer experiences to their audiences,” said Stefan Lederer, CEO and co-founder of Bitmovin.
The Week in TV
Viaplay Pulls Back on International Strategy and Cuts 25 Percent of Staff
Nordic broadcasting group Viaplay on Thursday announced a strategic reorganisation of its business, following a turbulent period in which the company has downgraded its financial outlook and replaced its CEO. The new strategy will see Viaplay focus on its core Nordic, Netherlands, and Viaplay Select operations. As a result, it will downsize, partner, or exit completely other international markets, a significant change of course for the company. The reorganisation will also see 25 percent of Viaplay’s staff laid off. And the company will undertake a complete review of the entire business, considering “all options” including “content sublicensing, asset disposals, equity injections or the sale of the whole Group” according to CEO Jorgen Madsen Lindemann. Read more on VideoWeek.
Canal+ Takes 12 Percent Stake in Struggling Viaplay
French TV company Canal+ has taken a 12 percent stake in Viaplay Group, hours after the Nordic streaming outfit announced its withdrawal from international markets and 25 percent staff cuts. The investment makes Canal+ Viaplay’s largest single shareholder, but has given no indication of its plans for the group. Viaplay has suggested it may be open to a sale, prompting speculation that the Vivendi-owned broadcaster could buy the business.
ProSieben Cuts 400 Staff as Streaming Push Continues
Germany broadcaster ProSiebenSat.1 this week announced it is cutting around 400 full-time jobs as part of a restructuring, which will see streaming platform Joyn become more and more of a focus within the business. Bert Habets, group CEO of ProSiebenSat.1 Media, described the cuts as “a difficult but entrepreneurially necessary decision, so that ProSiebenSat.1 can increase its earning power and grow sustainably and healthily again”.
The company suggested that the restructuring is not just down to economics, but partly as a result of its streaming-heavy strategy. “In a constantly changing media industry, it is only logical that we have realigned our strategy and are constantly questioning our own positioning,” said Habets. Read on VideoWeek.
TNT Sports Replaces BT Sport in UK and Ireland
TNT Sports, the rebranded version of BT Sport, has gone live across the UK and Ireland. TNT Sports is a joint venture between BT Sport and Warner Bros. Discovery (WBD), which already uses the brand in the US and Latin America. The channel is also available on WBD streaming service Discovery+. “From today, fans can watch TNT Sports in the same places they enjoyed BT Sport and without any interruption to their access,” said Andrew Georgiou, board member of the JV, and president and MD at WBD Sports Europe. “In addition, with TNT Sports now on Discovery+ in the UK, we can begin to deliver a simple and even more compelling offer that appeals to the whole household, combining more live sport together with entertainment.”
US Linear Ad Impressions Rise as Spend Falls, Finds iSpot.TV
Figures from iSpot.tv for H1 2023 have revealed a 5 percent increase in US linear ad impressions – even as national ad spend fell 7.4 percent over the same period. Linear household TV impressions reached 4.2 trillion in the first six months of 2023, while TV spend dropped to $21.6 billion. CBS took the highest share of voice (SOV) of TV ad impressions (14.3 percent), followed by ABC (13.6 percent), NBC (10.8 percent), Fox News Channel (9.1 percent), ESPN (6.2 percent), CNN (4.9 percent), Univision (4.5 percent) and MSNBC (4.3 percent).
Altice Co-Founder Armando Pereira Faces Corruption Charges
Armando Pereira, co-founder of Dutch telco Altice, has been indicted for 15 crimes, including corruption, money laundering and forgery at Altice Portugal. The company has suspended several managers, workers and legal representatives while under investigation, according to Reuters. Co-CEO Alexandre Fonseca has also suspended himself from all duties.
UK Government to Review BBC Licence Fee Alternatives
The UK government will announce a review into BBC funding this autumn, a source has told The Times. Proposed alternatives to the licence fee are expected to include a subscription model, a broadband levy, and advertising. The news follows the BBC’s annual report last week, which revealed the number of active licences has fallen by 500,000 since last year. The review will also assess options for the BBC to make more money commercially, according to reports. “The evidence that there is a growing unwillingness to pay is shown by figures each year,” said the government source. “The licence fee model is becoming unsustainable.”
Half of Internet Users Disengaged from Linear TV
Almost half (45 percent) of internet users claim to watch little to no linear TV in a typical day, according to Ampere Analysis, rising from 37 percent in 2021. The report noted that “it is far too early to write off linear TV,” given stable levels of low-level viewing (less than two hours per day) for events such as sports and reality TV shows. Meanwhile BVOD services have ensured broadcasters can still engage audiences via streaming, according to the report. “At first glance, the decline in linear TV viewing looks to be a worrying trend for broadcasters as their traditional audience begins to drift away,” said Minal Modha, Research Director at Ampere Analysis. “However, as the increased engagement with broadcast-led video services shows, if the linear channels can continue to adapt and provide a strong OTT offering for audiences switching from scheduled TV channels, they have an opportunity to retain them, albeit on a different medium.”
The Week for Publishers
Axel Springer Post H1 Growth Despite Tough Economy
Publishing group Axel Springer posted 1.4 percent growth in pro forma sales in its H1 financial results, and 13 percent growth in adjusted EBITDA, despite a tough economy and weak ad market. “The fact that we were able to grow despite a challenging economic environment is remarkable,” said Mathias Döpfner, CEO of Axel Springer SE. “Axel Springer is very determined to become a purely digital media company that uses the opportunities of artificial intelligence to make quality journalism and classifieds offerings even more relevant and successful.”
Google Begins Talks with Publishers About AI Tools for Journalists
Google has begun holding talks with various news publishers about using AI to write articles, and developing AI-based tools which could be used to assist journalists, the tech giant said in a statement this week. Google didn’t name which publishers it has contacted, but The New York Times reported that itself, alongside News Corp and The Washington Post, were among those involved in the discussions.
Social Media Dominates Young UK Audiences’ News Consumption
Online news sources, particularly social media sites and apps, are the dominant means by which younger people in the UK access news according to Ofcom’s latest News Consumption in the UK report. People in the 16-24 age bracket report around 63 percent of their news consumption via social media on their mobile phones. Ofcom says this suggests younger people tend to have less direct connections with established news brands than older generations.
Bloomberg Sees Efficiency Gains but Revenue Losses from Programmatic Cutbacks
Financial news publisher Bloomberg has seen an increase in page load times, CPMs, clickthrough rates, and viewability rates following its decision to shut off open marketplace programmatic ad sales earlier this year, Adweek reported this week. Overall ad revenues were down year-over-year in the first half of the year, but chief digital officer Julia Beizer expects ad revenues to be up in H2.
The Independent Signs Ecommerce Partnership with Gambling.com Group
UK newspaper The Independent has signed a multi-year media and ecommerce partnership with Gambling.com Group, which The Independent says strengthens its strategy of growing out non-advertising related income streams. The deal will see Gambling.com’s data powered sports betting content distributed by The Independent, in line with similar deals signed in the US with Gannett and The McClatchy Company.
Most Britons Want Newspapers to Ban Gambling Ads, Finds Yougov
A poll run by survey business Yougov found that the majority of Britons want other newspapers to follow The Guardian’s lead in banning ads from gambling companies. Seventy-three percent of respondents said they either strongly support or tend to support The Guardian’s stance towards gambling companies. Only five percent said they either tend to oppose or strongly oppose The Guardian’s position.
The Week For Brands & Agencies
Omnicom Posts 3.4 Percent Organic Revenue Growth in Q2
Omnicom reported 3.4 percent organic revenue growth year-on-year in its Q2 financial results this week, with total revenues for the group topping $3.6 billion for the quarter. This included 5.1 percent revenue growth in Omnicom’s Advertising & Media division. “While the balance of the year will continue to see economic uncertainty, we are entering a dynamic and exciting new era for our company,” said chairman and CEO John Wren. “Omnicom has secured leading positions in generative AI technologies and partnerships to deliver on our promise to achieve the best outcomes for our clients and increase the operational efficiency of our company.”
IPG Mediabrands Launches New Unified Retail Media Business
IPG Mediabrands, Interpublic Group’s media arm which encompasses media agencies including Magna, Initiative, UM, and Mediahub, has announced the launch of a new unified retail media solution which is designed to help advertisers manage their investments across different retail media offerings. IPG says the new solution is designed to bring “openness and trust to the typically closed world of retail media at a time when brand spend in the space is growing rapidly”. Read on VideoWeek.
UK Marketing Budgets Rose in Q2
The IPA’s Bellwether Report for Q2 found that marketing budgets are continuing to rise on the whole, partly due to brands increasing sales promotions in order to support customers through the cost-of-living crisis. Just over a fifth of survey respondents observed growth in total marketing spend during the second quarter, more than the 14.4 percent who registered budget cuts, giving a positive net balance of +6.4 percent.
Agency Diversity Has Worsened in Some Areas, finds 4As Report
The proportion of agencies owned or run by white CEOs rose to 90.2 percent in 2022 according to the 4As most recent Diversity in Agencies report, up from 73 percent in 2021. 4As CEO and president Marla Kaplowitz said that the industry must do more to help underrepresented groups start new agencies, and access the capital to do so.
Agency Pitches Cost Both Sides Over $400,000
A study from trade groups the ANA and the 4As found that the average cost of running an agency review when the incumbent isn’t involved is $408,500 in America. This figure is slightly lower when the incumbent is involved, but 25 percent of incumbents choose not to compete to retain the business. And their own high costs – incumbent agencies spend on average $406,092 defending an account – likely contributes to their hesitancy to compete.
IAB UK Issues Guidance on MFA Websites
Trade body IAB UK has weighed into the debate around ‘made for advertising’ (MFA) websites, issuing some guidance on how to identify MFA websites. As the IAB says, there is no set definition of what characterises an MFA website. But the trade group says that factors including ad placement and density, quality of the content, traffic patterns, and user journey can help identify MFA websites.
Center Parcs Consolidates UK&I Media Duties with iProspect
UK resort brand Center Parcs has consolidated its UK and Ireland media account with Dentsu’s iProspect, following a competitive review. Work was previously split between Hearts & Science, DAC, and Starcom. Colin Whaley, chief sales and marketing officer at Center Parcs, said that iProspect “was able to demonstrate its data expertise and how it would put our audience at the heart of its approach”.
Hires of the Week
Tubi Enlists Vimeo CEO Anjali Sud
Fox has named Anjali Sud the new CEO of AVOD service Tubi. Sud has served as CEO of digital video platform Vimeo since 2017, and previously spent three years at Amazon.
Wavemaker Names Premjeet Sodhi Global Head of Measurement and Analytics
Wavemaker has appointed Premjeet Sodhi as Global Head of Measurement and Analytics. Sodhi has been with the GroupM agency since 2020, first as Chief Growth Officer then Chief Strategy Officer.
Innovid Appoints Jeff Austin as SVP Revenue Operations
Innovid, a CTV ad tech firm, has hired Jeff Austin as SVP Revenue Operations. Austin joins from retail intelligence company Stackline, where he served as VP Business Operations.
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