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December 2016

Lightbox Loves

The QT: Lightbox’s brand new quarterly tracker

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It would be fair to say that 2016 has been a tumultuous year, politically, socially, economically and otherwise.
Here at the7stars we found that there was a sincere desire from clients to better understand the mood of the nation, and so we conducted a series of surveys in summer 2016 to cover the Brexit pre-amble, fall-out and the implications up on spending behaviours over the coming months.
In the immediate aftermath we saw that 30% of Brits were less positive about holidaying in Europe, and 1 in 10 saw their house buying plans as affected.
As events progressed, alongside feedback and reaction from clients, it lead us to realise there was a real need to monitor these topics on a more consistent basis, rather than just as a reaction to a key political event.
Enter: The QT.
November 2016 saw the first wave of The QT – Lightbox’s brand new proprietary consumer tracking study. Working with respected and award-winning fieldwork agency Populus Data Solutions, we interviewed a nationally representative sample of 1000 Brits. The survey covered five core topics, consistent with metrics asked in the summer months. To give us greater breadth and depth of coverage we boosted this to cover ten more topics each wave – flexible to suit the needs and interests of the7stars’ clients and prospects.
In a research first, we followed up with a week-long Facebook Messenger community with 20 Brits, where we spoke to them about everything from Christmas ads to bathroom moments, gleaning a deeper insight and relationship with these consumers. Using this platform allowed us to speak to consumers in a place they felt comfortable, in language that felt human, and in a way which ensured they shared with us as much as they could – the good, the bad and the ugly.
So what did we find out?
The majority of Brits actually feel no different in terms of their disposable income than they did this time last year. Only 29% claimed they were less comfortable than in winter 2015. This aligned with their general happiness. 1 in 3 said they were happier than they were in this time last year – fuelled by 18-24s, and those in London and Scotland. 1 in 4 said they were less happy, mainly being those 65+, or living in Eastern England.
This happiness seems to correlate with household income. Those earning over £40k were much more likely to be happier than in 2015 than those on lower incomes.
Which categories are they spending more or less on?
As of November, it looks like the experience economy is still of great importance to Brits. 62% will continue to spend on eating out or takeaways. Categories such as travel saw continued desire to spend – people would rather holiday on a lower budget than not holiday at all.
18-24s are leading the charge on intention to spend. For those whose holidays have been affected, 1 in 3 will spend their next trip in Britain, 1 in 4 will reduce the budget of their European trip, and 1 in 5 will take more short breaks.
Physical experiences proved popular for the festive season too. 1 in 5 Brits will buy theatre or concert tickets as a gift, and the same proportion will buy an experience (i.e. afternoon tea, brewery tour, restaurant trip etc) for a loved one. 18-44s are most likely to gift these items.
What also saw was a marked move away from white goods, consumer electronics and gadgets. These seem to be areas where consumers are happy to ‘make do’ rather than refresh.
What’s next?
The next wave of The QT will run in early February 2017. For more information on the study, or to add a question please contact Frances.Revel@the7stars.co.uk

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Adblockalypse: Our word of the year

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While Oxford Dictionaries declared 2016 to be the year of ‘post-truth’ politics, we have an alternative suggestion for the advertising industry. This has been the year of the advertising backlash. Instead of putting up with annoying, inconvenient or unattractive ads, consumers have avoided, blocked and covered up banners and billboards alike.

In the year of ‘adblockalypse’ – the latest figures suggest that 21% of us have adblocking software installed – we’ve also seen cats take over Clapham Common and, the latest, a campaign plastered over tube card panels suggesting that advertising ‘shits in your head’. An activist group by the name of Special Patrol Group (SPG) made it their aim to disrupt adverts on the underground network this month because they believe unavoidable tube ads “make us unhappy”.
The group claims to have replaced 400 paid-for ads with their own. Although a small imprint on the OOH market, this, as with the CATS campaign earlier this year, is a reminder that the groups have made some headway in an anti-advertising movement. Such a movement isn’t unprecedented; in 2007, São Paolo enforced its Clean City Law, which saw over 15,000 billboards removed from the city, along with bus and taxi ads. This, it is assumed, is the activist groups’ end game.

As ad blocking and ad avoidance rates rise, we need to look at how spaces – often public spaces – are used for advertising. If TfL’s ads were replaced with art, photography or inspirational quotes, it may mean more pleasant viewing for the 1.34 billion commuters and tourists travelling on the underground every year. However, with TfL awarding its advertising contract to Exterion Media for an estimated £1.1bn back in March, the profit generated for TfL is not just back pocket change. It goes some way to help maintain the network and, in effect, lessen the price burden on the consumer.

Getting ads removed from the underground is unlikely, at least any time soon, so instead we need to learn from the backlash, and look at what made CATS’ and SPG’s campaigns shareable and relatable. The #advertisingshitsinyourhead hashtag has been posted over 1.5k times on Twitter, and the CATS campaign picked up a mention in almost every national paper.

What the campaigns had in common were that they were unexpected, yet relatable. They offered weary travellers something different, and brightened up a part of the day that is usually the most depressing: the commute. That’s not to say that every campaign should be a media first and commuter-targeted, but advertisers should look to their broader principles to produce great work.

The highest impact ads, along with requiring the highest investment, always tread the line between disruptive and intrusive. As long as advertisers stay on the side of the consumer, and take over spaces with the public in mind, we can learn from, rather than be dismayed by, the anti-advertising movement.

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Channel 5 is still alive

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Between Netflix supposedly investing $6 billion in original content next year, ITV unveiling its 2017 programming at this month’s star-studded Gala, and Channel 4 promising a revamp of its on-demand platform at its own Upfronts, there’s been a quiet success story in the TV industry this year. In the 12 months to the end of September, Channel 5 recorded a £58.4m profit – the first consecutive year of profitability in its 20 year history, even without Richard Desmond at the helm.

Between October 2015 and September 2016, the channel saw a huge 19% increase in turnover to £383.6m. This coincides with a 9% increase in younger viewership.

David Lynn, the UK, Northern and Eastern Europe President for Viacom, which bought Channel 5 in 2014, said the broadcaster was now “sustainably profitable” for the first time, thanks to the radical approach taken by the American ownership.

Lynn suggested the success was “driven by original British content. We’ve transformed the business model through our advertising partnership with Sky Media and by getting Channel 5 to work more closely with our pay TV channels, making it sustainably profitable for the first time, in spite of recent economic uncertainty”.

Only seven of the shows on air in 2013 are still broadcasting today. Channel 5 is aiming to dedicate two thirds of its schedule towards home-grown content by the end of this year, giving the channel a fresh feel as well as look. This has already led to the commissioning of comedy series Borderline, the UK version of the popular Lip Sync Battle, and factual-entertainment series Ben Fogle: New Lives in the Wild and The Yorkshire Vet.

This fresh new approach has come at a cost – £230m, to be exact. The broadcaster has increased its spend on programming by 11%, including the purchase of The X-Files, the first new series of the hit show in thirteen years, which drove the biggest ever audience for a drama on Channel 5.

The bulk of Channel 5’s income comes from its advertising revenue, which has contributed to the increase in profit, along with outsourcing the sales operation to Sky Media. This not only cut overheads, but meant it can profit from selling inventory secured with the ratings growth.

Online viewing also increased on Channel 5 this year via its rebranded My5 player, delivering an 18% year-on-year increase in streams. A My5 linear TV channel was also launched in August, replacing a time-shifted channel with different programming attracting a larger audience.

With Viacom rejuvenating Channel 5 to become a solid, profitable television brand, advertisers are starting to acknowledge the power of the channel’s station portfolio. The channel is now providing a platform to talk to younger viewers and build reach. What’s more, up against the giants of Sky and Netflix, Channel 5 has proved the success of British broadcasting along the way, rather than relying entirely on American imports.

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Digital audio update from the RAIN summit

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Digital and programmatic audio advertising were hot topics at this year’s RAIN Summit, the annual conference for the internet radio and online audio industry. As we’ve seen with display and video, advancements in these areas are always promising opportunities.

Many advertisers are looking to pair the benefits of digital audio – exclusive placement, personal connection, uncluttered environment and highly engaged audiences – with the advantages of other digital buys by activating first and third party data, as with Bauer’s Instream offering, which allows targeting across their online stations via their first party logged-in user data.

– Digital audio is being examined in two ways:
– How it supplements traditional audio buys and;
– How it fits into the overall media channel mix, and the digital strategy in particular (especially as digital audio capabilities become closer aligned with other digital channels – it is expected that more spend will come from digital budgets rather than traditional radio budgets)

Creative formats pose a challenge. So far we are seeing a lot of traditional radio creative being used across digital audio spaces – meaning they aren’t taking advantage of the capabilities of listener devices. Progressions such as 3D audio and dynamic ads from DAX (the digital audio exchange powered by Global) are interesting developments. However, the next frontier for digital audio suppliers is to develop ad formats that allow the user to engage with rather than just consume ads. This will allow advertisers to see how audio can be used to drive action, as well as for branding.
Standardising measurement and attribution across all suppliers needs to be addressed to bring digital audio in line with other digital channels. DAX is making strides with its Listener Insight IDs, but as more players have entered the market this needs to be standardised to make performance comparable and to allow advertisers to gain the same insights that are possible through display and video.

In a further attempt to help both advertisers and comms planners understand the role that digital audio can play as part of a campaign, DAX and Spotify are leading the charge by creating their own planning systems to allow for better cross-media planning. Spotify’s Galileo tool can model the incremental reach that it can have over and above broadcast radio, while DAX has worked with the IPA to build the platform into the Touchpoints channel planner tool to illustrate the delivery of DAX when supplemented by other media channels.

Over the next 12 months, it was agreed that the focus should be bringing digital audio in line with video and display. The more digital audio is made accountable and the benefits to campaign performance become apparent, the more advertisers are expected to get on board. With this growth, the conversation around ownership of this mainstream media channel between digital and audio will become more important. Finally, as tracking/research progresses, we’ll gain learnings about the listener audience expanding targeting abilities of digital audio buys.

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The return of Binet & Field: Media in the digital age

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With their previous volumes becoming landmarks in using evidence-based marketing science to drive profitable brand growth, it’s no surprise that Les Binet and Peter Field have been named the ‘Godfathers of Marketing Effectiveness’. Their latest study, presented at this month’s IPA Effectiveness Week, looks to be just as important.

Unveiling the initial findings from their third volume, Media in the Digital Age, Binet began by dismissing the concept that brands grow through loyalty. Penetration works far better – of the cases on the IPA database showing growth, only 7% are growing through a loyalty strategy compared to 22% through penetration.

This requires a paid media approach – average share of market growth per annum is just 0.9% for unpaid online campaigns, versus 2.6% for paid-for media. For growth, you need not only place content, but also pay to bring it to people’s attention.

By looking at the thousands of cases in the IPA databank, Binet and Field uncovered what is driving this profitable brand growth – i.e. effectiveness – in a digital age.

Thanks to the impact of the internet, advertisers need scale, which means online video and TV, not either/or. Online video-only campaigns saw a 25% increase in very large business effects. TV-only campaigns saw a 33% jump. For campaigns which did both, the increase was over 50%.

Budgets matter more than they used to. The proportion of growth explained by share of voice is getting stronger, doubling from 6% to 12% for campaigns between 2008-2016 compared to 1998-2006.

Mass media is working better than ever. Adding TV to a non-TV campaign has always paid dividends in terms of the effects on business. But this ‘TV boost’ is growing – since 2008, adding TV as a channel has seen a 40% boost.
This makes it all seem easy – keep using paid media and mix online video and TV to drive share of voice, and growth will follow.

But it’s not that simple. While the effectiveness of some strategies is clear, the number of large business effects achieved by campaigns has decreased sharply since 2012. Why the performance decline? Binet and Field pointed to four factors:
– Increasing focus on the short-term (8% of cases in 2006 had a short-term focus vs 25% in 2016).
– Greater proportions of the budget spent on activation rather than brand building (31% in 2014 vs 47% in 2016). The most efficient campaigns still adhere to the 60-40 rule: 60% on brand-building, 40% on activation.
– Greater focus on ROI/ROMI, which is a risky strategy in the long-term. ROI rewards sales activation strategies, but not what will happen in terms of the brand over the next few years.
– A worrying trend in ESOV decline – from 13 percentile points in 2006 to 3 in 2016. Brands are letting campaigns take the strain, not backing great creative work.
Binet highlighted the findings as “empirical evidence that our industry is focusing too much on the short term”. His rallying cry was that, “for truly effective advertising, we must continue to invest more in long-term brand building”.

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Fake news, post-truth and digital culpability

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Along with ‘filter bubble’, a term used widely this year was ‘post-truth’ – so much so that it was named word of the year by Oxford Dictionaries this month. Meaning “relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief”, the term has been used mostly thanks to Brexit and the US Presidential Election.

Post-truth is an issue for anyone looking to find information, especially using online sources, where a user may not scrutinise what they’re reading to the extent they perhaps should. One of the main contributors to this condition is the apparent rise of fake news. Facebook and Google, the largest digital platforms, have faced accusations of disseminating such content and not doing enough in the way of prevention.

The issue of blame comes down to whether Facebook, in particular, can be accused of acting as a publisher or a news outlet, or whether they’re just a conduit for self-published content and shared links. What Facebook can’t deny is that they are undoubtedly a source of news for the mobile generation – 49% of 18-34 year olds see Facebook as their “most or an important way they get news.” As a platform for news, Facebook must therefore be liable for the distribution of content, providing a space for objectivism and quality.

Unlike Google, Facebook doesn’t necessarily need user intent to serve fake news. The most common way for fake news to spread is through the sharing of inflammatory articles with deliberately sensationalist headlines and clickbait descriptions. This is a serious problem as it relies on the user to be objective, and to continually question what they’re reading. When you combine this with the ‘filter bubble’ trend, then it’s understandable how fake news spreads so easily.

Unfortunately for Facebook, the problem is intertwined with its main strength, algorithms. Any platform with a human team to curate news articles from multiple sources would never have this problem. Whilst Facebook use an algorithmic model which rewards content that gets shared, without any human interception, it’s not possible to guarantee the quality of the output, which advertisers and agencies alike should start to question.

There is a distinct shift in the display and video markets, especially when inventory is being bought programmatically, to analyse the quality of that space. In a recent statement Facebook Chief Mark Zuckerberg admitted they were “looking at the problem” of fake news; however, there still isn’t an easy way to negatively run against a feed, or underneath content that you would block if you were setting up a display campaign.

A recent move to ring-fence premium content was with Facebook Instant Articles, but updates seemed to have slowed in that area, likely down to a lack of interest from advertisers – and it’s here where Facebook will decide how important the issue really is. If advertisers aren’t concerned about the newsfeed environment, and dwell times remain stable, then Facebook won’t be either. In a post-truth world, quality may not be worth as much as it once was, but digital platforms have a responsibility for objectivity and education, whether they like it or not.