Monthly Archives

March 2017

In The Press

Media Deals, Transparency and Best Practice: the7stars View

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For many years media agencies (and before them, full-service advertising agencies) have used their total volumes to extract additional value from media vendors for the benefit of their clients.

Advertisers hire media agencies in part because of their specialist ability to negotiate the best prices from media owners on their behalf, thus ensuring the best possible value for their budgets.

If the agency is able to enter negotiations with a hand containing all of the budgets at the agency’s disposal, it increases its clout, strengthens its position, and maximises the value it is able to obtain on behalf of all of its clients.

What Could Be Simpler?

If the buying and selling of media worked openly, transparently and was always undertaken in the sole best interest of those ultimately paying for the advertising (the client) it would indeed be simple.

But, sadly the workings of the media market-place have become increasingly convoluted and complex over time. This has led advertiser trade bodies in a number of markets to question whether buys are indeed always made in the best interest of the advertiser paying for them.

This White Paper seeks to explain some of the more important ins and outs of media trading. It’s been written to try to explain to our advertisers how the market is today, and how it got here. We also aim to lay out our principles on trading and the thinking behind these principles to those who know us less well.

At the7Stars We Believe:
• That our clients should be our sole source of income.
• That our clients should be fully informed as to the deals we do. It’s your money we’re spending and we think you should know everything about how it’s being spent.
• Deals should only benefit the client not us as an agency.
• That it should not just be the size of the client’s budget that drives the value achieved.
• In always seeking out new and valuable deal opportunities for all of our clients, regardless of size.

Download the full paper HERE.

What's Hot

Automated Trading Goes Outdoors

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Automated trading has been a long time coming for the out-of-home (OOH) industry. This month saw a significant step forward as Kinetic, the7stars’ outdoor media partner, launched its automated trading platform, bringing together all major OOH media owners for the first time.

Automated trading of outdoor formats was first trialed in the UK in 2015, with OOH tech pioneer Bitposter leading the charge. But the explosion of digital out-of-home (DOOH) is starting to make programmatic elements a reality. DOOH spend was up 25% in Q3 alone last year (AA/Warc), contributing to a 5% increase in outdoor ad spend across the year, out-pacing the total ad market.

Kinetic’s offering, developed with Bitposter, will provide an integrated trading platform to all major media owners, including JCDecaux, Clear Channel UK, Primesight and Exterion Media. The automated platform will be used alongside Kinetic’s own planning system and sites will be bought via a private marketplace.

The platform will provide a more efficient and streamlined means of buying DOOH. For now, the platform allows Kinetic to access availability across media owners in real-time, replacing the lengthy process of briefing media owners manually. Booking will then take place via the same platform.

Digitisation of outdoor sites has led the way for dynamic campaigns and flexible buying – a necessary improvement on the standard two-week cycles of paper-and-paste sites. Automated trading is expected to open outdoor up to even more innovation, such as real-time tactical campaigns.

The automated platform also goes some way to integrating trading with the reams of data now available, and represents a step forward in the industry’s move from site-based trading to audience-based trading. If audience data can be integrated into the trading platform, buying strategies such as geo-demographic targeting or contextual optimisation will be made possible.

But automated trading also brings its own set of challenges.

Media owners have made it clear they will protect the value of their proposition. So unlike digital, where programmatic was borne out of an excess of inventory, automation in outdoor allows improved targeting and flexibility, rather than cut-price media buys. There is also the issue of misplacement of ads, or display of inappropriate content. Industry leaders will need to develop an automated approval system alongside the trading platform.

Despite these challenges, Kinetic’s platform opens up the future possibilities of programmatic, or OOH’s version of, and could revolutionise the trading of DOOH.
With thanks to Julia Dobbin from Kinetic

What's Hot

Music Industry in Tune with Tech Innovations

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Streaming service Spotify grew its Premium membership subscribers to 43m in 2016, according to data released by Midia. Along with Apple Music, Tidal and Amazon Music, the music streaming services boasted a combined 100m paying users at the end of last year.

Streaming has led to a revolutionary transformation, not only in music consumption, but in discovery. The industry has had to evolve at an unprecedented rate to keep up with the rapidly developing technology and shifts in consumer behaviour.

Many of the issues faced by the music industry are now seen across the consumer landscape, and across industries, with purchase journeys more fragmented than ever. Consumers now expect to be able to seamlessly follow a brand between platforms and across devices, in a way tailored to their personal preferences.

Artificial Intelligence has been revolutionary for companies like Spotify who have built hugely successful predictive algorithms to transform the way people discover music tailored to their use. Having learnt the hard way, music industry leaders are now successfully future-proofing their business by developing data models at the outset that can be exploited further down the line.

Techstars Music, a new startup accelerator program launched by the global community TechStars (www.techstars.com), created to invest in the broad ecosystem of music joined forces with major record labels and artists to invest in what they believed to be the most promising startups in music. What they saw was that more than half of the 11 start-ups they worked with, focused on AI as a key part of their proposition.

Other more adept companies are also developing robust AI programmes to learn how to fully exploit their products. This will allow businesses to drive sales in the short term, and to build new markets by developing highly nuanced content and adaptive distribution channels.

Increasing quantities of first party data and audience insights, fragmented purchase journeys and ever-evolving consumption habits are disrupting most sectors, but none more so than the music industry.
So, expect further investment in AI, data-heavy advertising campaigns and intuitive algorithms to continue to give those in the music industry a competitive edge – and expect other industries to start listening in too.

What's Hot

Facebook Moves to the Big(ger) Screen

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Facebook this month announced a new video app for set-top boxes, including Apple TV, Amazon Fire TV and the Samsung Smart TV.

The free app, rolling out across all devices “soon”, will allow users to watch Facebook content, including live videos, on a much larger scale. The move could even allow the social media giant to compete for TV ad spend by giving it the power to run its growing video content on larger screens.

The app won’t just feature user-generated content; the social network is in conversations to licence original content. It is also pushing some of its publishing partners to create longer videos in an effort to get more TV-style content onto the platform. The demand is clearly there – Facebook users were watching more than 100 million hours of video every day globally in early 2016, and, according to a recent Ofcom report, four in five internet users now watch short video clips online.

What’s unclear is how much appetite users and advertisers will have for a standalone video app. While the company has had no problems getting video content, it hasn’t yet figured out how to make serious money from those videos. But a set-top box app should give Facebook and its partners more opportunities to turn video views into ad revenue.
The news comes as Facebook reports its latest advertising revenue, which soared to $26.89 billion in 2016 – up 57% year-on-year.

The platform is now looking to grow its ad revenue further by jumping on the trend for non-traditional TV viewing. Thinkbox reports that television is watched for an average of an hour a day on content accessed through Netflix, Amazon TV and Now TV, rather than traditional content on Sky, Channel 4 and ITV. To compete with its counterparts, Facebook will need to publish viewing and usage figures to prove its value to advertisers.

The Facebook TV app will, potentially, allow brands to build reach through the platform and develop a strong social media presence by creating and sharing longer-form and higher quality content than is currently seen on the Facebook app in mobile.

A mass migration to the app isn’t expected in the short term. Instead, we should expect to play the long game to see if Facebook viewership figures can compete with those of Netflix and Amazon Prime – if in fact any of these suppliers ever release them.

What's Hot

Influencers: Don’t Watch This Space, Own It

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A study released by influencer marketing platform Mavrck this month stated that “User generated content (UGC) posts featuring brands earned almost seven-times more engagement than brand-generated posts in 2016.”

Influencers and UGC both present brands with a unique opportunity: to align themselves with content that targets their desired audience in a creative, innovative and transparent way without disrupting the user experience.
92% of consumers trust word of mouth and advice from their family and friends more than any other form of advertising. This has contributed to a rapidly rising demand for UGC across all agencies: nearly three-quarters (71%) of brand marketers now rate influencer marketing as a strategic marketing category. However, UGC is also a highly reactive type of content, so managing it means always having a finger on the pulse, and the ability to respond to events in real time.

An advantage of working with influencers – and one of the reasons that this content can be so effective – is the relationship that exists between influencers and their followers; their opinions are truly valued, and their recommendations trusted. This is particularly true of micro influencers and advocates (those with between 500 – 10k followers), as their content tends to be more niche.

In fact, these lower level influencers are often most highly recommended. When planning influencer campaigns, ‘audience’ is often confused with ‘influence’ – meaning brands go after high follower count, rather than finding influencers most relevant to their consumers. Research conducted by Timeout last year broadly defined these two types of influencers:

The Shaker (high authority/celebrity):
They have a massive follower base and national appeal but define their own success by reach. They play an important broadcast role.

The Maker (advocate-medium authority):
They are motivated by deep and meaningful connections and are knowledgeable in specialised areas. They are equally effective in getting consumers to research a product further but Makers are 23% more effective than Shakers in giving people the confidence to buy or try a product due to their specialism and profile.

Whether a ‘Shaker’ or a ‘Maker’ is required is dependent on a brand’s objectives, but the best campaigns work with influencers who can integrate the content naturally within their own stream, and even make it a part of their lifestyle. Success comes from being reactive via social listening and proactive through blogger outreach programmes, and tapping into a client’s social strategy as well as their overall business objectives.

The use of influencer marketing and reliance on UGC will continue to rise as brands recognise it as a way to reach out to consumers without disrupting their browsing, and to generate a more authentic relationship with them. The key to ensuring long-term success for brands will be in starting to build up partnerships (rather than one-off campaigns), integrating influencer outputs into overall content strategy, and focusing on the sentiment, engagement and perception change an influencer creates rather than looking only at the follower count.

What's Hot

Making a Stand: Brands Go Political

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This year there has been a marked shift in the way that brands react to political events and the social backdrop. Stemming from the tide of change across the Atlantic, consumers that might never have previously protested or spoken out against change have come together in a wave of collective activism – and brands are following suit.

The worldwide women’s marches demonstrated a focus that brought politics from the White House in to your office, your home, and everywhere in between. Brands and companies have been expected to show where they stand, and reactions have been fierce when support hasn’t aligned with their customer base, as Uber recently found out.

Brands, mainly led by Silicon Valley, have quickly sought to address this political and social tide by clearly stating where they stand; open letters from the likes of Apple’s Tim Cook reconnect companies with their own employees and align brands with the values of their consumers.

Ads aired during the Super Bowl provided a showcase for those that position ‘unity’ and ‘inclusion’ messaging as part of their brand purpose, with Airbnb leading the charge. Nike’s message of equality and that “worth should outshine colour” also hit hard at Trump’s anti-immigration order, with a host of Nike’s biggest brand ambassadors leading the strike.

This month the fashion crowd drummed for “Make love not walls” (Diesel), and Fashion Week catwalks in New York and London have been awash with political messaging, from statement t-shirts to the use of hijabs in the latest season styles.

L’Oreal’s latest campaign may have made more headlines because of Cheryl’s bump but its message celebrating diversity couldn’t be more relevant. It also aligns well with the brand; the beauty giant updated its famous “because you’re worth it” slogan with “what makes us different is what makes us beautiful”.

Brands should understand their audiences before going headlong in to a political campaign. If the business has always had a clear purpose and a stance on social issues, then it’s likely its consumers know this and will expect it to stand up for these beliefs when the time is right.

Flirting with a more serious message can be perceived as jumping on the bandwagon if done unsympathetically. But if the tone of the brand remains true, then even light hearted approaches will resonate – as long as they feel genuine, use channels that can carry the message, and are reflected throughout the workings of the business.

What's Hot

Before It’s Snapped Up: Is Snapchat a Wise Investment?

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This month, Snapchat’s parent company filed to go public. The success of Snap’s upcoming IPO valuation, estimated for March 1, is largely dependent on how much advertisers are willing to invest.

There’s no doubting the huge potential in the app, but Snapchat’s ad revenues pale in comparison to its peers. Facebook currently generates $62 of advertising revenue for each user in North America, while Snapchat receives just $5.64. Closing this gap will depend on Snapchat dealing with threats and exploiting opportunities:
THE THREATS

Competition: Facebook currently has 1.87 billion monthly active users, and owns Whatsapp, FB Messenger (1bn MAUs each) and Instagram (600m MAUs). By comparison, Snapchat has a comparatively paltry 300m MAUs.

Facebook will ruthlessly protect its position. Last summer Instagram copied Snapchat’s popular stories feature and by January it had as many users as Snapchat. Last week, a similar ’Stories’ feature rolled out on WhatsApp. So often has Facebook copied Snapchat, that Business Insider compiled a comprehensive list to accentuate this point. We can expect to see a similar Stories proposition on Facebook very soon.

Given the superior targeting and reach available through the competition, Snapchat faces a tough task in attracting ad spend away from Facebook’s platforms – especially if its most successful products are again appropriated by the social giants.

Controversy: The calls for third-party auditing of digital walled gardens have been growing since last September’s revelation that Facebook was over-egging its video metrics. While Facebook so far seems to be weathering the storm, similar rumours circulating around Snapchat’s figures could do serious damage to its reputation, if proven true.

THE OPPORTUNITIES
Innovation: Snap calls itself a ‘camera company’ rather than a social or messaging company, which suggests an attempt to lessen competition with Zuckerberg’s network. Indeed, it has focused on developing photographic software and hardware, in particular for its Spectacles product, which launched across the US last week.  The camera is genuinely innovative – it captures video in a circular format, allowing video to fill a mobile screen in portrait, landscape, or at any angle in between. For advertisers it raises the potential of video ads by fully utilising the mobile screen, rather than being confined to a small rectangle, or dependent on users turning their screens.

Ad-Integration: Snapchat’s well-integrated ad formats are best in class when it comes to delivering stand-out within a mobile environment.  It has pioneered vertical video, which has far more impact on the mobile screen than ads based on standard TV dimensions. Sponsored lenses and filters are formats which truly complement the way in which the platform is used. From tennis games to taco shaped heads, Snapchat’s advertising experience works because it enhances the platform rather than placing old formats in a new environment.

Whether it’s investment in shares or ad formats, Snap’s success will depend on how well it does the things that Facebook can’t.

Lightbox Loves

Difficult second album? Return of Lightbox’s quarterly consumer tracker – The QT.

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February saw the second wave of our quarterly consumer tracking project, The QT. In this wave we continued to ask the questions which uncover the mood and state of the nation, but we also included a broad range of topics to support our clients’ own questions and hypotheses about the modern Brit.

So what have we learnt since November?

Brexit continues to loom over the nation, with polarised attitudes to how it is affecting our lives and plans for the rest of 2017.

26% of Brits are worried by the looming triggering of Article 50, with 19% claiming to be relieved at this happening.

We have seen incremental increases in confidence levels for the UK government and political system versus November. One could hypothesise that this is in some way impacted by the result of the US election which was announced immediately post-November fieldwork – but we couldn’t possibly say…

Comfort on income did see some erosion, both versus November and this time in 2016, with 18-24s the group most likely to be less comfortable on this than early last year. For them, purse strings are increasingly tight.

It’s not all doom and gloom though. 9% of Brits are happier than they were when we surveyed in November, and 39% versus February 2016. This is largely fuelled by 18-24s, where 70% claim to be happier than this time last year – vs a surprising 24% of the over 60s.

Experiences over things

One theme consistent with November was that of the power of the experience. 3 in 4 Brits don’t think it is important to spend their time and money on the latest tech this year, with the same proportion wanting to spend it on day trips with family and friends.

This pattern is consistently driven by the millennial group – who on the whole are claiming to prioritising their expenditure on holidays and experiences.


TV content is discovered in a myriad of ways

Millennials are the most socially driven TV viewers – with 2 in 5 using word of mouth to find their next boxset binge. This is in complete opposite to the older Brit – where only 3% listen to recommendations from others.

Serendipity still remains key for 1 in 10 TV viewers, channel flicking until something catches their eye.

What’s next?

The next wave of The QT will run in early May 2017. For more information on the study, the latest results or to add a question, please contact Frances.Revel@the7stars.co.uk