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April 2016

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Unicons – ‘R’ we all being bluffed by their true value, and is it all about ads?

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There are currently 161 companies listed with ‘Unicorn’ status, resulting in a cumulative value of $567B. The list is as intriguing as the mythical beast itself with a few familiar (though many unfamiliar) tech companies featuring. While their exponential rise has been well documented in recent years, there are strong indications that their fantasy statuses and values are winding down with large doses of reality.
 
Unicorns (Uber, Spotify, Dropbox & Pinterest to name a few) are the nickname of privately owned tech companies valued at $1 billion or more who have risen rapidly through VC investment as opposed to direct customer revenues or advertising. Their key uniting asset is how they have disrupted industries filled with big, entrenched incumbents, with an idea and a smart tech solution, most often in the form of an app.
Unicorns notably disrupting the media and advertising worlds include Snapchat ($16bn), Pinterest ($11bn), Spotify ($8.53bn), Vice ($4bn) and Buzzfeed ($1.5bn).
 
Their meteoric rise is often a function of the number of users they attract to their product and the view that at some point the monetising switch can be activated for happy fortunes. Facebook famously floated with much scepticism at $104bn (McDonalds is valued only at $94bn), yet just four years on and their revenues of $17bn are not far off the $24bn of the burger chain, only with far less cost.
The real clear and present challenge however, is that while they seemingly offer different services in different industries, they are all in fact largely competing for the same piece of value, ‘consumer attention’. Attention is the currency that excites the advertising trade and enables their revenue models to work. Attention however is also the consumer’s most valuable asset, and it’s finite. This means that while the unicorns look to users, they really should be caring more about share of attention, a metric that gives us as advertisers a greater opportunity to connect and be relevant.
Continual Innovation will be a key part of any future success and perhaps also other unicorns on the list, such as Medallia, a company that aims to hardwire the customer into every decision. Unicorns that fail to demonstrate how their users are unique and attentive, will ultimately lose the power of what they ‘r’ and ultimately become just that, Unicons.

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Google plays Devil’s advocate to ignite the YouTube vs. TV advertising debate

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In a somewhat controversial move, Google has criticised the effectiveness of television ads and called on advertisers to significantly increase the amount they spend on YouTube.

Google EMEA president, Matt Brittin presented the research report ‘The (Entertainment) Revolution will not be televised’ at Adweek Europe last week in London. The report claimed that advertising on YouTube delivered a 50% higher ROI than television in nearly 80% of cases that were studied across eight countries.

In releasing such a document, Google have opened the debate about the significance of leaning towards a new age of advertising, however Thinkbox director Matt Hill has voiced his concern that this YouTube analysis “misses the point” of TV advertising.

“The true value of TV advertising is not just its ROI, but that it achieves the best return on investment at the highest levels of investment. TV builds brands better than anything else and creates the most profit”.

The advertising industry acknowledges the importance of YouTube advertising, however whilst the integration is agreed upon, the optimum proportion of a client’s budget that should be invested in YouTube has caused much debate.

In October, Eileen Naughton, Google’s managing director of UK and Ireland operations told brands that targeted 16-24 year olds that they should spend 24% of their TV advertising budget on YouTube. However, through their own research Thinkbox claimed YouTube only accounts for 10.3% of time spent by 16-24 year olds consuming video.

The general consensus is this; rather than being seen as a direct competitor to television advertising, YouTube compliments TV advertising playing the role as Robin (not the Joker) to TV’s Batman.

Tess Alps, the chair of Thinkbox reiterates this, as she noted that YouTube “is an invaluable part of the TV landscape and our shareholders use it for many different purposes: to promote their programmes, feed their desire to see programme clips and TV ads again”.

Both YouTube and TV platforms have their own strengths, and it is dependent on the content of the advertisement as well as the target audience that will determine the optimum mix when delivering the most effective campaigns. With longer TV advertising slots becoming expensive, brands often provide smaller spots on TV that drive the viewer to longer content digitally, for example Trainline’s current television campaign using QR codes to drive sales on the website.

The debate will not end between influences to television advertising and the rise of other emerging platforms, but for now this superhero is yet to find its own kryptonite that will plot its downfall.

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Catching up to the implications of catch-up TV

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Although many argue that live television viewing is on the decline, recent reports show that catch up viewing figures have been on the rise and are paving the cracks for their live transmission programmes.

In 2014, according to BARB data, 57 million adult TV impacts were delivered outside the day of the “live” scheduled transmission date. In the same year approximately 6.4% of all adult impacts were delivered against a programme on a different day to when it was first transmitted. In 2015, we see this number increase to 7.1% and increase yet again to 7.4% this year.

Although this hasn’t happened as fast as some media gurus might have expected, the pattern is still apparent and shows no signs of slowing down. As expected, there are some programmes where this delayed viewing is more prevalent and conversely, some programmes where viewers will not miss out by skipping the first airing. If an advertiser wanted to target a show that has a large proportion of viewing outside of its first transmission, there are simple strategies that can be applied to create an advert that is more conducive to this type of viewing.

Delving into the 2016 BARB data a bit deeper, across the day of week in February and March, Mondays seem to over index, with 8.2% of all viewing being watched not on the same day as the first transmission. In February and March especially, Mondays offered a plethora of high profile programming and allow a good test bed to identify programmes that might be watched outside of their first day of transmission or otherwise.

The 9pm Monday slot was well contested with Sky Atlantics Vinyl, Fox’s Walking Dead, Channel 5’s return of The X-Files and also BBC2’s The People Vs OJ Simpson all of these programmes increasing their initial viewing by at least 90% once consolidated to include the catch up.

These Monday programmes all over indexed to the sub 55 and younger age group, however this skew becomes more prevalent when we look at the magnitude of the audience who watched at a later date. The Walking Dead and Vinyl featured an average uplift of 396% and 237% respectively according to BARB, although from a much smaller base and with their profile featuring almost double the amount of 16-34 adult viewers when compared to natural delivery.

In the short term, catch-up viewing will only increase – we expect this to reach 8% of all viewing by the end of the year. Video-on-Demand (on PC, mobiles and tablets) has been quick to adapt with creative solutions being tailored to the different platforms, but we have yet to see advertisers create specific creatives for catch up TV, which is still where the lion’s share of viewing occurs.

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Facebook goes live

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There are so many ad product launches that it can be hard not to treat all of them with a jaded indifference, however to ignore the latest move by Facebook to launch live video would be a mistake.

Facebook’s move into live video is being pursued ferociously, with Zuckerberg personally redirecting Facebook’s resources to get the format up and running. Uncharacteristically Facebook has even been willing to pay producers to broadcast on Facebook live, absorbing some of the risk of content production that it has so far avoided. Facebook isn’t the only media company moving towards video: Buzzfeed, Vice and Mashable are an example of other online media empires currently pivoting to the moving image and now the industry’s biggest player is following suit.

Indeed the fact that the world’s largest social media company is shifting to live video so vigorously is in itself a good reason for advertisers to take this seriously. Some early adopters have already generated some impressive audiences using the platform, a Buzzfeed live video featured two of its employees wrapping a watermelon with rubber bands until it exploded attracting 720,000 live viewers and 10 million post broadcast views.

Facebook is able to build this audience with relative ease compared to it’s digital and traditional broadcast competitors because of it’s scale and unique position as a social media platform.

Live video on social platforms is not new, Periscope and Meerkat have proved that live streaming works, but arguably don’t have the historic audience to make it as powerful as Facebook Live threatens to be. They also don’t have the desktop presence that Facebook retains and therefore can’t offer the TV-like clout of the big screen.

The social sharing that Facebook offers is a unique opportunity for live broadcasters, because it allows them to stream content in real time on the very same space people talk to their friends and family anyway creating a virtual living room and making it an ideal place to generate earned conversations around your content. This makes it easier than ever for branded live video to reach a large audience and for audiences to easily engage with their preferred live video content.

For Advertisers this offers a unique opportunity; the immediacy of live content together with social chatter around your brand on the same platform amplifies the affect of both.

Facebook live offers an exciting prospect and its immediacy and accessibility gives it an advantage over TV. But the authority and reach of TV means it remains well respected by audiences and advertisers alike. For some brands the fact you can’t talk back on TV adds to the appeal.

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All the world’s a stage and all the brands are merely players

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Secret Cinema. Goosebumps Alive. The Crystal Maze. Despite Netflix and UK cinemas both posting record figures of late and 10 million adults still tuning in to watch Britain’s Got Talent, not a week goes by without a new immersive theatrical experience being discussed around watercoolers across the UK.

With passive entertainment arguably at an all-time high, why are consumers flocking to take part in these unique experiences and how can brands capitalise on this zeitgeist?

Immersive theatre centres on non-linear storytelling, where the attendee is not just passively consuming the performance, but is an active participant in the unfolding action, forging their own path through the story.

Speaking at Advertising Week Europe, Felix Barrett of iconic theatre company Punchdrunk, suggested that the growing popularity of such events is because they allow attendees to revisit a childlike place of curiosity.

Unsurprisingly, this appetite for partaking in unique events is particularly strong among millennials, with a recent Mail Online/Metro research study finding that 76% of 16-34s welcome brands organising or sponsoring events.

If executed well, an immersive brand experience offers audiences something that they aren’t expecting – a captivating real life opportunity to be surprised and delighted while completely submerged in the realm of the given brand.

The quarterly IPA Bellwether Report published last week measured a marked increase in event budgets of +6.3% so it is clear that some brands are already dabbling in this space. Recent examples range from an installation which builds out from the core campaign ad, such as Cadbury creating a musical chocolate fountain from ‘Joyville’ in Westfield London, to Silverpoint, an Absolut/Punchdrunk collaboration project, which was an intersection of a mobile-based game and live roleplay where participants became the protagonist of their own living real-time game.

If a brand is considering an immersive brand experience, there are a few considerations to bear in mind:
Trust – Felix from Punchdrunk commented that the most fruitful partnerships that he has worked on involve a truly collaboration approach where the brand team are open-minded and willing.
Tech – technology should support and enhance the experience, rather than being the core touchpoint to ensure optimum engagement.
Exclusivity – Paul Saville of Wasserman Experience suggests that the best immersive brand experiences are actually not for the masses, but instead are high quality productions targeted at the most influential members of your target audience.

Done correctly, an immersive brand experience can be exhilarating, visceral and tangible, leaving participants with a unique and memorable impression of the brand that they will tell others about – driving invaluable word of mouth as the next generation of brand storytelling.

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#Graziagoesshopping with McArthurGlen

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The7stars are excited to announce the launch of McArthurGlen’s Spring/Summer Fashion campaign. It launched this week with TV, VOD, online, social, radio and a Grazia partnership. The bespoke partnership includes an online hub, with 4 weeks of advertorial content running in the magazine. The partnership content will feature fashion blogger Alexandra Stedman (the Frugality) selecting her top picks and narrating the styles of the season with McArthurGlen, as well as demonstrating the extensive fashion offering of each centre. We were also delighted to take over Grazia’a Instagram for the day with the help of Alexandra Stedman!
Go and take a look at the hub here:
Link: http://lifestyle.one/grazia/fashion/shopping/grazia-goes-shopping-mcarthurglen/

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Turning the tide on music consumption

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Music consumption has shifted drastically over the last twelve months. There are now more places than ever for audiences to consume music, from traditional CD purchases through to the variety of streaming platforms. With Spotify recently announcing that it now has over 30 million paid subscribers and Apple Music around 11 million, streaming seems to be leading the way. But what do these shifts in consumption behaviours mean for the brands looking to leverage music audiences?

The challenge for both music labels and brand partners is in understanding how, when and where these audiences are consuming music. Certainly there is opportunity for marketing, but music audiences are not one homogenous group, with research showing that they go through multiple different listening behaviours throughout the day – it’s fundamental for brands to be able to catch the right listener at the right time.

Brand partnerships with music artists and labels are becoming big business as brands are starting to fully understand the value of these kind of integrated campaigns in reaching new and engaged audiences. In the same way that the consumer has become more ad savvy, it’s not just about appearing in front of relevant content, but using the right creative at the right moment and creating native-like executions – whether that’s product placement in music videos or using music artists as brand advocates.

The platforms themselves are realising the potential value in this market through advertising and larger partnerships revenues, with the race to work with brands seeing continued investment and increased competition from the likes of Apple Music, rebrands from Tidal and Deezer and in Spotify raising $1 Billion in debt financing.

It’s predicted that these kind of partnerships and sync deals in the UK could be close to generating ten per cent of turnover among the UK’s three major labels. Investment is being rewarded with industry recognition – music brand partnership categories have been added to a raft of prestigious marketing award ceremonies, including a roster of over twenty categories, at this year’s Cannes Lions. But, fundamentally, when the right artist and brand are matched, campaigns work equally for both: not only in generating sales uplifts, but for building engagement metrics across a brand’s socials footprint, something that has previously been a struggle for some brands.

The future is bright – brands can benefit from the unique influence that artists can offer in channels where those fans might otherwise ignore or block more traditional adverts, and the more they can understand these disparate audiences, the greater the payback will be.

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Ten years of Twitter

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Last month we wished a very happy 10th birthday to the micro-blogging social platform Twitter – or Twttr to those who have been there from the beginning.

From the first tweet sent by founder and now chief executive, Jack Dorsey, Twitter has undoubtedly played a huge part in the way we communicate in the digital age. Much of Twitter’s platform has become part of the everyday lexicon; no longer is the hashtag an oft unused button at the bottom of your phone, but now a universally selected symbol to aggregate information – from revolutions to selfies.

Probably the most important feature Twitter has brought to the public is the Trend. An ingenious consequence of the Hashtag, Trends are a quick and simple way to understand what the people around you are talking about, something that can be seen on a local, national or international level.

The real genius behind this is its breakthrough into real-time search. News and content is not delivered in an algorithm based on your profile or behaviour, but rather by the weight of mentions from users around the globe. The benefits of the feature can be seen in real life developments, breaking first on Twitter, from the serious: #JeSuisCharlie; #BlackLivesMatter; to the ridiculous: #drummondpuddlewatch; #Susanalbumparty.

Over the 10 years, it’s easy to see the impact Twitter has had on the world’s biggest news stories. Twitter was blamed for encouraging users trying to get involved with the London riots, but also for strengthening the protests leading to the eventual Arab Spring. Some users have even found themselves the subject of unfair and often visceral abuse; Jon Ronson tells the stories of these unfortunate Tweeters in his book So You’ve Been Publically Shamed, where a harmless tweet can cause a sudden and catastrophic backlash from strangers with an internet connection.

For all the tangible virtues of the platform, Twitter seems to have been sleepwalking through the last couple of years of its decade in the public eye. Its user figures, estimated to be around 18m, have stopped growing, a pattern that is replicated around the world. This has been one of the defining elements which has caused Twitter’s share price to crash, and also resulted in the return of founder Jack Dorsey in an attempt to steady the ship.

Twitter’s main problem lies in the adoption of new users. As a younger audience migrates over to more visual-based platforms such as Instagram and Snapchat, Twitter has become a platform for breaking news and celebrity updates. Along with an advertising product which always seems to be slightly behind Facebook, its offering can tend to feel lacking, especially as you require very little demographic information to sign up.

With rumours of Google’s interest in acquiring the platform continuing to appear, one thing is clear, Twitter has had a very obvious and lasting effect on communication. Its ability to remain relevant to a new generation and the catalogue of advertisers looking to target them is much less certain, and may well take an unfortunate acquisition to do so.

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TFL strikes again

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It has been no secret that the biggest out-of-home advertising contract in the world has been up for grabs recently – and in March it was announced that Exterion have retained Transport for London’s (TfL) rail advertising contract.

As well as granting the rights to sell ad space on the London Underground, the contract includes Docklands Railway, London Overground, Tramlink and Victoria Coach Station, plus the long-awaited and newly-named Elizabeth line.

Exterion beat its competitor, and the outdoor market leader, JCDecaux, in a head-to-head pitch, after Clear Channel dropped out of the race earlier this year. If JCDecaux had been successful, the outdoor market would have been dominated by a single goliath, owning over half of outdoor contracts in the UK. Experts speculated that this would have led to further consolidation, with pressure on a weakened Exterion to be sold to a rival.

The new rail contract forms part of TfL’s push to maximise non-fare revenue through commercial ventures: ambitious targets aim to increase the current £1.1 billion of commercial income to £3.4 billion by 2023. This has led to a real step change in TfL’s outlook, and a subsequent change in its relationship with its advertising contractor.

Unlike the previous agreements, where Exterion (then CBS Outdoor) was lumbered with onerous guarantees that led to an open disagreement after the 2008 crash, the new contract has been dubbed a “partnership” by both sides.

For TfL, this means it will now pay for improving the infrastructure of its sites, with £100 million to be invested. This will lead to new formats and technology for advertisers to take advantage of: there are rumours that digital escalator panels will be replaced with “digital ribbons”, and that the upgrades will see the launch of “digital tube car panels”.

The new infrastructure will also benefit passengers, giving them Wi-Fi access in more stations, and even, eventually, in tunnels.

Exterion is also keen for change. It’s hinted heavily that it wants to lead developments in the out-of-home market trading model, pushing the industry into an audience led sell. This will be shaped by its partnership with O2 owner, Telefonica, which will give it a deeper insight into Londoners’ travel behaviour.

Advertisers however will have to wait for change: the latest two London Underground updates are both still stalling. Both DX3 (the new projector digital format) and the highly anticipated night tube have been delayed. It seems there are severe delays on other lines.