What’s Hot

Q1 2024 has started with a bumper month for free TV, with ITV’s Mr Bates vs. the Post Office clocking up more than 16 million streams on ITVX, while the second series of The Traitors more than doubled viewing figures on BBC iPlayer compared with the previous year. In addition, the UK’s four major broadcasters recently unveiled Freely, a free-to-air streaming service set to launch later this year.

Through analysis of industry data and continued tracking of consumer sentiment, the7stars’ AV team have identified four key trends which are driving the recent success of Free TV and the growth in ad-supported streaming services.

Financial Reassessment

The cost-of-living crisis has prompted individuals to limit their budget and limit their spends on services like Netflix, Amazon Prime, and Disney+.  Instead, people are turning to free streaming services to keep themselves entertained without eating into their budget.

While linear television remains central to modern households, there’s been a noticeable shift in viewers’ behaviour to free streaming platforms such as Freevee, Samsung TV Plus, Roku and Pluto. In the last 12 months, Roku TV has reported a 14% YOY growth and Samsung TV Plus has similarly seen a massive 60% growth in viewership.

Slimming Down Services

Previously, consumers required multiple subscriptions to access diverse content, however recent data indicates a change in behaviour. Increasingly, consumers are being more selective in choosing which subscriptions are worth their while. According to recent data from BARB, there has been a reduction in those with two or more SVOD services from 46.4% of the population in Q3, down to 44.7% in the following quarter. As Maria Rua Aguete, Senior Research Director at Omdia, reveals, ‘This is partly driven by the increasing popularity of Free Ad-supported Television (FAST) channels, which are becoming a preferred choice for supplementary viewing’.

Shifting Perceptions

As users are diversifying their time across various platforms, public perception of free streaming services has improved, as users become accustomed to the benefits of easy accessibility.  This attitude shift across free streaming services has been driven by several factors, in particular improvements in ad targeting and a more seamless user experience.

Better Quality Content

Viewers have long been platform agnostic when it comes to content, with most willing to hop between TV and streaming services in search of quality content. Accordingly, FAST services such as Samsung TV Plus have invested greatly in their output, with popular shows such as Schitts Creek and Masterchef UK helping to boost viewership figures. Such a change has not gone unnoticed: some 64% of viewers believe that content quality on FAST channels is improving.

As the FAST channel market continues to grow, this gives advertisers new opportunities and challenges to align with the correct service providers, whilst adapting to the changing landscape to keep up with evolving viewer demands.

There are few brands more ubiquitous on the Great British high street than WHSmith. Whether Brits view it as a national treasure or a point of contention, a shop more Marmite than Marmite, there is one thing every consumer knows: you are never far from your nearest WHSmith.

The company’s recovery in recent years has been spectacular. Like many high street retailers, WHSmith suffered immensely from the impact of successive Covid lockdowns, losing two-thirds of its stock market value in 2020. But through a focus on new product areas, the store almost doubled its profits last year.

Seemingly a good time for the brand to experiment, WHSmith decided to roll out a trial logo rebrand across 10 of its stores shortly before Christmas. At less than 1% of the chain’s retail portfolio, this apparent rebranding attempt was unlikely to disrupt the brand’s recent success.

However, the reaction, at least from marketing circles, was far from soft. Many drew unfavourable comparisons between the ‘WHS’ logo and that used by the NHS since the 1990s. For days, social media was awash with posts from users claiming, in contrast to the company’s growth, that the new logo was evidence that the brand had lost its way.

The response from WHSmith was swift, noting that the trial was merely an attempt to localise their offering and signpost the products sold in-store, with no plans to roll out the rebrand further. Was it perhaps a thinly veiled PR stunt? This seems unlikely. While annual Google search volume for the brand peaked in the week of December 17th, it was seasonally affected and, indeed, was lower than at the same point in 2022.

Similarly, social trends showed few signs of public discourse around the rebranding outside of marketing circles. According to data from Brandwatch, content related to WHSmith was over three times less common than during its peak two months prior.

Takeaways

While the WHSmith logo rebranding sparked debate among strategy experts, it was an example of a test-and-learn framework in action. The brand experimented with something new at a select few stores, measured the public response, and promptly announced the end of the experiment. MarketingWeek’s Mark Ritson was strongly critical of the onslaught, arguing that ‘most people on LinkedIn are completely bonkers’ and reiterating the importance of a test-and-learn approach in many brands’ growth stories.

However, while a trial-and-error approach to rebranding could prove fruitful for some, brands should tread carefully when playing with longstanding logos, especially those with longstanding recognition among British consumers. In recent years, logo changes have often sparked a temporary outcry from certain corners of the internet – such as the simplification of many fashion house typefaces or the suggestion that Mozilla was dropping the eponymous fox from its Firefox emblem, which even prompted the brand to tell fans to ‘remain calm’.

Testing and learning is a necessary, and often rewarding, process for most brands. But, as noted in Creative Review, if brands do decide to trial new identities, they should be prepared to explain clearly and concisely the purpose of the rebranding. After all, as Ritson alludes, social media reactions are often ‘completely bonkers’.

Prime Video has officially entered the ad-funded market, and if Amazon delivers on the platform’s high potential, then we could be about to witness a significant shift in the VOD landscape.

Following in the footsteps of Netflix and Disney, Amazon is set to launch Prime Video with ads from 5th February. However, unlike competitors who have come to market with a reduced subscription fee for the inclusion of ads, Prime Video will convert all of its estimated 13 million accounts to ad-funded in one fell swoop. As a result, agencies and advertisers might have another mass-reach premium platform to further enrich AV plans. Amazon could, in theory, instantly rub shoulders with the more established broadcasters (ITV, Sky and Channel 4) offering scalable reach, as well as a wide range of targeting capabilities and premium content. This will likely, once again, push the traditional broadcasters to invest further into targeting capabilities and content production and acquisition.

Of course, this isn’t Amazon’s first foray into AVOD. Their current Freevee platform has proved to be a shrewd testing ground for Amazon. Arguably allowing Amazon to make the necessary learnings required to successfully launch Prime Video with ads, at scale, from launch.

Naturally, a move like this still comes with an element of risk. Amazon, like many of its competitors, are reluctant to share subscriber counts and deeper audience insights. This can make advertisers and agencies nervous about spending. Whilst some viewers will resent being served ads, despite paying a monthly subscription. After all, an ad-free viewing experience was the USP of SVOD. To counter this, Amazon will offer the option for consumers to pay a higher fee to remove ads entirely, much like the major broadcasters and SVOD suppliers do, though uptake is expected to be low.

Whilst advertisers undoubtedly see the appeal of investing in Prime Video ads due to promises to link ad viewership with sales on Amazon’s retail platform, many are holding off on major investments for now to see how the new offering develops and matches up with its competitors. This makes it essential for Amazon to prove that its access to large amounts of first-party and zero-party data from its retail arm (as well as properties such as Twitch and Fire TV) can be used to measure and drive ad performance on Prime Video.

Further to that, Amazon is banking on the suggestion that most people subscribe to Prime for a multitude of reasons such as free delivery, shopping benefits and live sport, the latter of which will remain separate from a Prime Video buy. So, the thinking is that many viewers will not mind being served ads, as Prime Video is not the chief motivation for subscriptions.

Ultimately Amazon’s offering will be unique due to scale at launch and greater targeting capabilities than their competitors. Should their lofty projections come to fruition, then Prime Video could very well become a prominent pillar of many client’s AV plans moving forward.

As of January 4th, 2024, Google has begun to disable third-party cookies for 1% of a randomly selected group of its Chrome user base. This follows in the footsteps of Firefox and Safari who have similar blockers in place, but with Chrome having the largest market share, the change will have a wide-reaching impact across the media landscape.

Google have been planning to phase out third-party cookies from Chrome for a while now and on 4th January they began rolling out their testing of Tracking Protection across 1% of users. Tracking Protection limits cross-site tracking by restricting third-party cookies by default, rather than users having to opt out manually. Whilst 1% of users have been added to this testing pool, the goal for Google is to phase out third-party cookies for everyone in the second half of 2024, subject to any competition concerns from the UK’s Competition and Markets Authority (CMA) who will be monitoring the test closely. The CMA will be taking into consideration the implications of Google’s solution on the wider industry to make sure it doesn’t solely benefit Google’s own ad business.

Brands’ Impact and Opportunity

For brands, this does mean that where third-party cookies have underpinned online tracking and some website functionality tools these will no longer work unless they have migrated to using newer alternative methodologies. Whilst, initially, 1% will be a small fraction of an advertiser’s site visitors, this will ramp up towards the end of the year.  Therefore, clients need to prepare now to avoid potential drop-offs to measurement, frequency capping, targeting and retargeting the functionality that third-party cookies have been supporting.

Brands that proactively make the switch to newer solutions will benefit from improved measurability and performance, purely from preventing further ‘cookie loss’ but also recovering users previously lost from view due to similar Safari and Firefox initiatives, and across non-cookie environments like in-app and CTV. By utilising new methods to engage users, brands can re-position themselves as privacy-first. In this way, they can highlight their aims to respect users’ choices when it comes to their data, providing transparency and confidence around which data is being collected, and how it is being used and shared.

Prepped and Ready

Whilst we can’t say with certainty what will change and when (dates could be subject to delay once again) we are working with clients to onboard appropriate cookieless and first-party data solutions to future-proof client ad tech stacks and mitigate against any potential data loss. We’ve been informing clients of changes and new announcements as part of our agency comms to keep them aware of changes. More practically, we’ve been helping clients to integrate these new solutions directly or in collaboration with their tech and data teams.

In the background, we have been involved with leading industry discussions on the topic, including with Google, IAB UK, and other agencies to understand the impact and actions clients should be taking. IAB UK themselves have released a checklist that agencies and clients can use as a guide to assess risk around campaign analytics and ask vendors about their cookieless solutions to discover how fit for purpose they are.

Right now, clients should follow Google’s guidelines and make sure they are prepared for the upcoming changes by working with their agency and tech vendors to audit third-party cookie usage, test for site breakage if these are removed, and migrating to cookieless solutions as they become available. The industry will be keenly monitoring its rollout to ensure advertisers are still able to deliver measurable campaigns through the new cookieless tools and APIs that are available.

In the digital age, convenience is king, so it is perhaps no surprise that the subscription model has seen rapid growth across industries. In just its first day, the Pret coffee subscription service gained 16,500 members, leading the way in a line of coffee retailers ready to attempt the same market shift.

Consumers place value on ease and personalisation, with the average Brit having 2.4 subscription services, according to RIFT. There are big players in the market, from Netflix to Gousto, and the UK market is set to keep growing, being expected to hit £1.8bn in market value by 2025, according to Whistl.

These models increased in popularity massively during the pandemic, but current cost-of-living pressures have led many consumers to make cuts to their budgets, with 41% agreeing that subscription services are the first area to go (the7stars QT, November 2023). Research from Lloyds Bank found that 1.2 million subscription payments were cancelled between 2021 and 2022, as consumers re-examined their expenses in what the bank termed a ‘subscription audit’. Barclaycard, meanwhile, reported a 5.7% reduction YoY in subscription spending. As consumers re-evaluate their priorities, there is greater onus on subscription-based brands to demonstrate the value in their propositions.

In a tough economic climate, businesses from vastly different industries now find themselves in competition with one another. Access to growth audiences is being limited not just by competitors within your industry, but by competitors within your business model. For the first time, pasta is pitted against Paramount Plus, and not everyone will come out on top. Consumers are reaching their own conclusions about which brands offer the greatest value to their lives. According to research from YouGov, we might be reaching a saturation point when it comes to the subscription model, and brands will have to work hard to stand out. Amidst cross-category competition, that will involve homing in on unique selling points and identifying your specific customer benefit. Individuality is increasingly important to consumers, with the7stars ‘Cultural Codes’ whitepaper identifying a growing trend of micro-communities and a focus on identity. Finding your brand’s niche within a cluttered market can be an excellent way to stand out from the crowd and keep your place in the subscription roster.

Amidst persistently high inflation and squeezed margins, price rises are often a necessary evil for subscription brands. But while two-thirds of consumers are inclined to think negatively of subscription services that raise prices, according to the7stars QT, the effects of this can be negated through clear communication and strong customer relations. When increasing the price of a subscription, offering additional benefits as well as hassle-free cancellation and more flexibility, such as the option to temporarily pause a subscription, will help consumers to justify maintaining their subscription while cutting back elsewhere.

As recent trends have shown, subscription models will be no less important to Brits as 2024 progresses. But amidst a saturated market and tightened household budgets, brands should consider new ways to demonstrate value and convenience to their audience.

2024 – the year of the Euros, a General Election, and the Summer Olympics. Despite economic challenges, the macro media market shows promise, with global spends expected to grow at pre-pandemic levels, between +4% and +7% compared with 2023. With January complete, here are our insights for the year ahead.

Video

2023 Video pricing was relatively stable compared with 2022, with Linear TV deflation (-6%) mostly offset by modest increases in CTV (+2%), Online Video (+2%) and Cinema (+2%) pricing. In 2024, it’s expected that declining audience figures and steadfast advertiser investment will spell inflation for Linear TV pricing of between 8-10%.

Audio

Radio ad spend is forecast to maintain its relevance, with a predicted increase of 2% in 2024, alongside a continued shift towards DAB+ for linear radio, offering improved audio quality and spectrum efficiency.

OOH

The OOH market rebounded strongly in 2023, with a forecast of 6% annual growth in 2024. Key focus areas for the OOH market in 2024 include programmatic, effectiveness, sustainability and new contract tenders, with a continued emphasis on data-led programmatic DOOH, with such strategies delivering enhanced targeting opportunities and relevance through the dynamic creative that can be deployed.

Publishing

This summer is expected to be more buoyant than usual. The Euros will promote extensive coverage across all platforms to help drive interest across several categories. The general election is also likely to influence the publishing market – the last general election in December 2019 saw increased circulations in multiple titles, bucking the usual trend of circulations being in decline. Another key consideration is how news brands will cover the general election, with the rising continuation of AI use.

Social

Anticipated changes in paid social media investment for 2024 suggest a notable increase compared with 2023, as marketers recognise the growing influence and engagement potential within social platforms. It’s prompted a strategic reallocation of budgets towards these channels. The shift is fuelled by the proven efficiency of personalised ads, increased consumer time spent on social media, and the expanding features of e-commerce integration. Video content will dominate, whilst augmented reality ads will gain traction.

Search

This year, the ongoing advancements in AI and machine learning will continue to play a pivotal role in optimising paid search campaigns. Ethical considerations and user privacy concerns are also expected to influence the paid search landscape. As regulations around data privacy evolve, advertisers will need to adapt their strategies to ensure compliance while maintaining effective targeting capabilities.

Programmatic

The market is turning back towards context as a way of linking a user to interest and content, rather than historical browsing behaviour. Context predates the internet and as technology advances, we can see a triumphant resurrection in contextual targeting application. Sentiment analysis, natural language processing and deep learning allow us to reach users with a level of precision unattainable in recent years.

Looking at these factors, 2024 is set to be an exciting year across the media landscape.

Mediatel and DCM’s Cinema TVRs forecast system has been out for around six months now and clear advantages are emerging. We’re already starting to see the benefit across AV, especially when demonstrating the scale of films vs top programming across the linear channels. This forecasting tool also allows us to examine the impact across seven multiple audiences.  Therefore, we can determine whether each opportunity is effective for our specific audience, making the investment a much more efficient buy.

Their new Q4 2023 data provides a forecast for the coming 12 months’ worth of major cinema releases. The service allows users to filter by genre and demographics, identify the audience with the highest TVR or admissions forecasts, and locate the industry rate card prices.

With Christmas right around the corner and 2024 in sight, now is the perfect time to consider some major releases coming out in Q1 and how they’re expected to deliver vs a variety of different audiences.

Let’s start with Migration, which is an animated comedy following a family of ducks trying to convince their Dad to go on a family trip of a lifetime. Set for release at the beginning of February, this Universal Pictures offering is expected to deliver strong results across the board. Unsurprisingly, HP+CH are due to benefit the most from this with TVR delivery as high as 8.7.

The hotly anticipated musical remake of Mean Girls by Tina Fey brings her Broadway adaptation to the screen in January. The film is expected to do well against the younger audiences. 16-24s are expected to deliver 3.5 TVRs and 16-34s are expected to deliver 3.3 TVRs. HP+CH will also expect to do well here with around 2.4 TVRs forecast to deliver.

Our final choice is Argylle which follows a reclusive author writing best-selling espionage novels about a secret agent. This joint production by Universal and Apple TV+ presents a star-studded cast, including Dua Lipa, Bryce Dallas Howard, and John Cena just to name a few. We’re hoping this will bring in some big numbers for Q1 with the audience of ABC1 Men due to be the strongest (similar to Kingsman) and planned to deliver 4.3 TVRs.

We have only pinpointed a few films here but, by using the tool, you’ll be able to explore and compare values across the full film list. As an agency, we’ll be looking to use this tool more and more to help with client briefs and demonstrate the real scale of Cinema and why we should be considering it for all budget sizes. With admissions rising and expected to deliver more in line with 2019, we can expect TVRs to increase too, making Cinema a great channel to consider in 2024.

It is increasingly important for companies to track the environmental impact of their produced video content and video advertising. New Digital Age recently reported that the internet contributes more than 3.7% of all global emissions, of which online video now represents 80%, and is expected to grow exponentially by as much as 25% per year.

With many more individuals and companies producing video content, we now see the gap closing between them and the volume of people consuming it, with calls for an industry-wide effort to reduce the environmental impact.

The advertising industry uses a high volume of processing power to deliver digital video and display advertising, via programmatic and data-driven approaches, paired with an improvement in high-quality creative assets.

Advertisers, agencies, and media partners need to collaborate to reduce their impact. There is no uniform approach, but we highlight below several areas and approaches that they should be thinking about to reduce digital processing and environmental impact of digital campaigns.

Data processing

One pivotal area demanding attention is data processing. It is imperative to encourage the reuse of data processing outputs across various facets of an advertiser’s business, agency, or media partners. Exploring the use of renewable energy sources for data processing by media partners is another avenue that can optimise campaign activity, diverting it away from less eco-friendly traffic. Embracing custom campaign bidding approaches focused on efficiency metrics, such as viewability and attention-based criteria, not only enhances campaign performance but also contributes to reducing emissions.

Inventory Supply

Educating advertisers on the intricacies of the digital supply chain is paramount. This involves pinpointing emission hotspots at each stage of the supply chain. Additionally, supporting media partners in excluding sites from their inventory supply that fail to meet sustainability thresholds is a proactive step towards reducing environmental impact. Implementing technologies that stream video content only when actively viewed, automatically pausing during inactive periods, is a practical approach within the inventory supply chain.

Creative and On-Site/App Experience

Examining the creative and on-site/app experience is crucial for minimising environmental impact. Scrutinising colours, brightness, and font usage in ads, and reevaluating the necessity for high-definition assets, can significantly contribute to a greener digital landscape. Utilising online tools to optimise creative images for improved loading speed and encouraging the reuse of existing assets prevent unnecessary production. Exploring features like Dark Mode Browsing, which enhances user experience and speed, can result in a 32% increase in conversion rates, as reported by Google.

Example Partner Initiatives

Several initiatives from industry partners exemplify a commitment to reducing the carbon footprint of digital campaigns. Scope3’s integration with safety partner IAS measures digital campaigns’ carbon emissions, enabling advertisers to optimise away from high-emission, low-performing inventory. Sharethrough builds custom private marketplaces (PMPs) contributing a percentage of CPMs to carbon removal projects, aligning advertising efforts with environmental sustainability. Greenbids develops custom bidding algorithms for digital campaigns, optimising for media KPIs while concurrently reducing carbon output against sustainability goals. Seen This provides adtech that minimises carbon emissions through lower data transfers on ad campaigns, estimated to be 25% lower than conventional technology.

Brands must choose strategies that best accommodate their sustainability goals, while achieving their advertising objectives. The time to measure impact is now, so that collectively we as an industry can adapt and thrive.