Wall St Speaks Out on Cannes and Ad Industry Turmoil

The Cannes Lions amp8211 arguably the world39s preeminent annual event for the advertising community amp8211 begins today and runs through next week The industry will celebrate a wide range of advertising and creativity while at the same time threats to the health of advertising in the future will loom for some as they so often doFears around adskipping in various forms have been around seemingly forever To start with television there have almost always been opportunities to watch TV programming without ads or to use some technology like a quotzapperquot or VCR or DVR to skip them or simply pay attention to something else Currently there are concerns around overthetop consumption of adfree services such as Netflix Concerns rise and fall although it39s hard to say that changes in adfree viewing as a percentage of total TV consumption have been overly meaningfulTo illustrate prior to this year and for most of the last 20 mostly adfree premium pay cable and public broadcasting accounted for 810 of total TV viewing with a peak in the late 90s according to Nielsen data VCR playback of prerecorded theatrical entertainment probably accounted for a few percentage points too Over the 201415 season so far premium pay cable and public broadcasting is capturing around 7 of total viewing while DVDBluRay viewing accounts for around 2 of TV viewing across the whole population Viewing of religious and shopping channels probably accounts for close to the same And then there are the overthetop content distributors such as Netflix whose approximately 5 shareequivalent of national TV viewing is notable but only a minority of the 15 of TV viewing that is essentially adfree in the United States An equivalent figure would be higher in many markets outside of the US where adfree public service broadcasters may have a more substantial share of TV viewing In the UK for example adfree BBC networks account for around 30 of TV viewing It probably is true that adfree viewing of TV has grown over time as a percentage of total TV viewing in most countries but it39s probably far less than most thinkWith this context it was interesting to see so much recent concern about the potential absence of advertising in digital media focused on ad blocking in general and mobile ad blocking in particular Old fears were made all the more tangible by news that Apple39s upcoming mobile browser update will itself allow consumers to block quotcookies images resources popups and other contentquot associated with advertising However it39s far too early to be concerned about any impact for several reasonsMost mobile content consumption occurs in apps around 90 according to many studies we have seen Apps are unlikely to be impacted by this changeSome publishers might oblige registration and deactivation of ad blocking for access to a siteThere could be more of a focus on forms of advertising that are embedded within a publisher39s content such as branded content or whatever the publisher might want to define as quotnativequotDesktopbased inventory could see a reconcentration of budgets on the margins as desktop consumption of digital media is not necessarily down in absolute terms but mostly is correctly viewed as down as a percentage of digital timeMore importantly a rise or fall in ad delivery remains only one reason why spending rises or falls for a medium so long as that medium satisfies certain goals better than any given alternative Television arguably best satisfies the goals of marketers focused on reach frequency and brand awareness in a leanback environment better than any alternative Similarly digital advertising exists because most advertisers relying on the medium do so because it satisfies certain other goals amp8211 such as engaging with narrowlydefined groups of consumers or driving them to a direct action such as buying something over the web amp8211 better than alternatives So long as this holds true those media and the agencies and marketers who depend on them don39t really have to worry much about ad skipping or ad blockingThis is not to say that the industry will have nothing to worry about as it descends on the Cote d39Azur A new book entitled quotMadison Avenue Manslaughter An Inside View of Declining Ad Agencies FeeCutting Clients and ProfitHungry Ownersquot will be launched there reflecting concerns that many in the creative agency community will share Some media agencies will be worried about the consequences of losing a significant share of the record volume of client pitches they face in the market today or amp8211 worse amp8211 the risks of disintermediation and clients bringing work inhouse Marketers will be concerned about the growing range of issues they are learning about in digital advertising as described our recent note from March on quotAdvertising39s Parade of HorROIblesquot Marketing technology and ad tech companies relatively new to Cannes will probably be concerned they won39t meet aggressive sales goals And everyone will be concerned about the heightened focus on costcuts among marketers which are curtailing spending growth we might otherwise have seen for the industry overallHowever at some point during the week most will also focus on the fluid nature of advertising and the ways in which media owners technology providers marketers and agencies can evolve and grow together Those discussions may be less alarming than ones involving imminent doom but actions eventually taken to solve these problems help ensure that future attendees will have the opportunity to talk about whatever new threats emerge in the future Advertising and the ecosystem around it is fluid and entrepreneurial especially if defined in a broad form of quotdemand generationquot The industry39s capacity to shift form to support this endgoal ensures its resilience as far into the future as we can seeREPORT INCLUDING DISCLOSURES CAN BE FOUND HERE Madison and Wall 61915pdfThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillagecom management or associated bloggers

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Wall St Speaks Out on Cannes and Ad Industry Turmoil

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Brian Wieser

"About That with Carl Mayer:" Alaina Donnellon (Episode 10: Political Spending) - By Carl Mayer

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Wall St Speaks Out on Cannes and Ad Industry Turmoil

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