Last week we said the world had changed and looked at how Retail and Media evidenced this. Now lets consider Broadcast and Agencies.
TV is changing
TV has never been healthier. The ITV share price has never been higher and it’s now around 10 times what it was shortly before Adam Crozier joined as CEO. Part of the reason is that Liberty Media have bought a stake and are rumoured to be planning a takeover.
The programming has never been better. There are some iconic programmes that almost overshadow films. From the Sopranos to MadMen and the Wire to Breaking Bad. Lots of great talent prefers TV to the Cinema now – partly because of the freedom of the medium.
And the research tells us lots people still like watching linear TV – ie in real time, rather than using DVRs to watch at other times – and perhaps fast forwarding through the ads
However for brands it could be argued that things are different now. Much of the iconic programming is watched in ways where advertising isn’t available. As well as those seemingly unusual people who do choose to timeshift and fast forward ads, binging on box sets has become a thing. Netflix and Amazon are getting traction across Europe. The Chromecast is still selling well at Amazon. And viewing video on YouTube continues to grow.
These new(ish) behaviours may not be showing up on the industry research just yet but it feels inevitable they will eventually. And whilst tablets are clearly a big factor, the ubiquity of games consoles and growth in connected TVs (as well as Chromecast/Fire Apple TV) are driving change on the big screen too.
The economics of TV will continue to shift – Amazon winning a Golden Globe – and Jeff Bezos dressing up to go collect it – shows how importantly Amazon view content. As does them signing up Woody Allen to do his first TV show. More evidence that Hollywood sees them as their new best friend. This interview with the head of HBO is good background reading on the evolution from cable to broadband.
Whilst the background to the North Korean movie premiering on YouTube etc may be unusual, it did give the industry a chance to see how that new window works. Once the window when a new movie was only available in cinemas was 6 months – but it’s now typically 4 before a movie is available on DVD and on demand. Given the Interview made $31m in the first couple of weeks in the US alone, newTV will be higher on most peoples attention now. The new Spike Lee movie will premier on Vimeo, weeks before the cinema release.
Things are changing and it looks like traditional TV advertising is likely to be squeezed. Of course brands have quite an interesting alternative as Facebook is getting close to matching ITV for both the reach and the time it takes to get that reach.
Agencies are changing – slowly
If the Broadcast advertising environment changes, then that’s another element of change for Agencies, many (most?) of which are struggling with the challenge of a digital world.
Smart agencies can and do make much more than TV commercials. But the pareto principle still sort of works with the majority of most agencies making the bulk of their money from TV.
One of the points we keep making in our workshops looking at digital transformation and disruption is that in virtually every industry someone from 1965 would struggle to recognize their business now; retail, transport, money and most others are total transformed. But teleport Don Draper from 1965 to today and he would probably feel quite at home. A little over dressed perhaps and perplexed by the fact the media people are now based somewhere else.
Now opportunities like mobile and social challenge existing structures but now some agencies are reverting to one digital team to cover all digital elements.
Technology is changing things too – at least in the media agencies, where programmatic excites CFOs and confuses client CMOs with a plethora of TLAs*
GroupMs Rob Norman explains how the automation of media is playing out within the industry as a whole, whilst explaining the WPP game plan.
But some clients aren’t that happy with the transparency in this new world and a senior Mondelez client expresses their frustration with agency margins – whilst accepting that client procurement has some responsibility for driving agencies to find new ways of making money. (He is also very bullish on Facebook and talks about their desire to innovate)
Fix Friend Neil Perkins runs a great set of events for Google called Firestarters and the inaugural New York one looked at the New Agency Operating System and there is some really smart thinking here.
Whilst Agencies may be resistant to change in some ways, their ability to solve big problems for brands remains hugely valuable – even if the comms tools used are changing.
The issue is that all the very smart thinking has tended to be given away for free whilst the agency makes it’s money out of making something. Now that making stuff is so much cheaper, there isn’t the money to indirectly fund the thinking.
Working out how to solve this is the big issue for the industry. But we suspect that technology can help here. As programmatic matures it should allow the value of communications to be better understood. Can agencies start to be paid for being clever – by sharing in the value they create?
* Three Letter Acronyms
Some seemingly well informed predictions about how the iPhone and iwatch will work together have emerged. The source has a good track record and the Companion app described makes sense. It does reinforce our view that the watch is essentially a peripheral, or accessory, to the iPhone though.
But not everything in devices is driven by Apple. Often accused of copying the iPhone (and of theft by Jonny Ive) Chinese firm Xiaomi have announced a new phone that is pretty innovative. Described by their CEO as shorter, thinner and lighter than the iPhone 6+ the Mi Note is also much cheaper. The firm is now valued at $45 billion – around 4 times its total turnover last year.
Google are also pushing the boundaries of what a phone is, with their modular ProjectAra device. The first review is out – although they journalist wasn’t allowed to turn the phone on – and it does seem interesting. We should remember that its likely the Apple Watch will be modular in some way, so people can upgrade it as new iPhones come out. No-one is going to buy a watch that will be redundant after a couple of years.
The evidence that the world has changed is everywhere;
Sales via smartphones and tablet devices recorded a 55% growth on the same period in 2013. £8bn was spent via mobiles this Christmas, compared to £5.1bn last year. The Index reveals that 37% of online sales are made on a mobile device; an estimated 8.9% of total retail sales.
Facebook talk of a new visual language;
Remember all that research that said Apps were much more used than the mobile web? Seems it is not that straightforward. As we keep saying, getting a good mobile web site is the first priority for brands – then consider what problem an app could solve for your customers.
We are fascinated by BlockChain – the technology that enables Bitcoin – and think there are some fascinating opportunities around marketing and communications. But it is very complicated. This is a good attempt to explain what it is and why it matters
The smart people at PSFK run a great conference on retail – this video from the latest one features some Google advice on mobile and retail.
Finally LinkedIn is one of the big success stories of digital but it seems a little tired and slightly dated now. But the sunk cost for the millions of people who have kept their profile updated and built their networks would seem to make a successor unlikely. The new Facebook for Work could have a chance to displace it.
Pitched as a workplace collaboration tool it faces lots of competition from Yammer etc but Slack has shown that a better mousetrap does get adoption. If it does get traction, adding LinkedIn type profiles would be relatively straightforward. Until then you can connect with me on Linkedin here.
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