Small Data from Cannes 2017

The 2017 ad growth outlook is drifting down for key markets like the US and UK as well as globally Watch for continuing volatility in 4Q media spending as marketers weigh maintaining media weight against the profits watched by shareholder activists and potential acquirersBudget pressures appear to be most affecting TV and video spending The US TV ad growth outlook has dropped during upfront negotiations with reports of roughly flat upfront commitments by a leader like CBS indicating that LSDMSD declines for TV networksamp8217 overall commitments are on the table The UK TV growth outlook is dropping now possibly negative reflecting higher Brexit uncertaintyIn a number of markets including the US and the UK YouTube has seen cuts from a range of large marketers concerned about brand safety YouTube admits that while it is on the case with tools like machine learning ensuring brand safety is more difficult in video than in display Agenciesamp8217 unused upfront commitments to Google Preferred are aggravating the current oversupply of YouTube inventory FB is not a particular beneficiary of YouTube cuts however as it still draws more from marketersamp8217 social than video budgets as do Instagram and SnapchatFor 2017 digital ad growth outlooks are thus coming down primarily for spending on destination video sites like YouTube over the longer term providing marketers with means to shift TV budgets to digital at scale remains a central ad market challenge The view from large marketers like PampampG that there is 2030 waste in the digital ad supply chain sets the table for downward pressure on digital ad budgets outside FB and GOOGL Some note particular problems with programmatic video TWTR is slowing in 2Q vs 1Q and likely missing budget although its growth should still be positive for 2017 UK digital ad growth has been particularly sluggish in 1H under 10 per our checks One positive is that FB ad spending growth appears to be similar in 2Q as 1QAnecdotes suggest rising search competition for Google but few point to much nearterm impact CPG marketers claim that search ROI is much higher on Amazon than Google Pinterestamp8217s ad products increasingly compete for unbranded paid search ad budgets 97 of Pinterest searches are unbranded However AMZNamp8217s focus on marketers with larger budgets may slow its inroads into search spending by SMBs Some note shortfalls in geotargeting on AMZN as wellKey secular drivers of share shifts remain how marketers use key platforms in their strategies and the small data here primarily relates to newer platforms as well as TVamp8217s goto content sports SNAPamp8217s focus on video is a barrier to scaling spending from SMBs because video ads require higher production values Media execs see recent content announcements by social networks eg the SNAPTWX 100m deal as facing up to the reality that newer video players like FB and SNAP conceived as social not video destinations struggle to scale as options to largescale TV ad campaigns Another opportunity for social networks to gain share would appear to be sports advertising where rates are already high on linear TV and where stars are becoming media channels in their own right on social networks and are thus increasingly competing for media and not simply sponsorship budgetsTrends in monetization rates and methods continue to pressure TV and suggest that media companies need to look beyond advertising and subscriptions In the US TV ad loads are likely to continue to drop with TV ad lengths likely to drop as well Even backers of vMVPDs doubt that any of the newer offerings will attract more than a few million subscribers over the next year Thinking of Nike as a media company which sells shoes not subscriptions hints at how media companies themselves need to expand their scope of monetizationThe macro environment for ad agencies remains tough primarily because of challenging conditions for their larger clients not new competition With large verticals like CPGFMCG cutting budgets agencies are more likely to respond to client losses with costcutting of their own eg WPPamp8217s combination of MEC and Maxus Automation is driving marketers to cut costs including agency fees However even PampampG seen as a lead steer with its focus on media cost cutting sees its own inhouse capabilities as slight and thus presumably not a secular threat to spending with agenciesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers amp160amp160

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Small Data from Cannes 2017

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James Dix

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Small Data from Cannes 2017

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