Publications

Format: Sep 2017
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Sector(s) Datesort ascending
Internet Trends H1 2017: Fruits of the mobile revolution

With smartphones in the pockets of 3/4 of the UK population, and accounting for over half of all online minutes, the mobile revolution is in its final stages, allowing us to survey its impact

As the number of social media users continues growing, untapped older demographics and Instagram help the Facebook suite of apps grow in the UK, but Snapchat is the social media app of choice for UK teens

News publishers face issues with brand attribution as social media platforms overtake search as the main news aggregators online, while small UK video publishers have become unlikely winners in a global market for soft news, infotainment and gags that dominate social video

 

  • Apple
  • BBC
  • Facebook
  • Google
  • Twitter
Internet, Media, Mobile, Technology 5 September 2017
Voicing concerns: virtual assistants and the media

Voice, and the smart virtual assistants that power voice interfaces, will be a key transformative force over the next five years

Any business providing content or services via digital means is potentially affected, as these virtual assistants promise a single front end for all digital services, representing an extraordinary concentration of control over discovery, delivery and data

Media businesses will clearly be affected. But there is an opportunity for them right now to influence the assistant providers to their advantage, a window that will not stay open forever

  • Amazon
  • BBC
  • Google
  • Samsung
  • Sky
Internet, Media, Technology, TV 23 August 2017
Facebook video: escaping the News Feed

Facebook video consumption - and video ad revenue - is still concentrated on the mobile News Feed, limiting engagement growth and appeal to brand advertisers in the interim period before VR and AR go mainstream 

Features like a dedicated video hub and ad breaks have seen limited deployment, likely as a result of lukewarm user reception, but Instagram Stories holds promise 

To attract long-form viewing Facebook is cautiously investing in original TV content and sports rights, but is late to the game over audiences on connected TVs 

 

  • Facebook
Internet, Media, Technology, TV 28 July 2017
SME marketing: a local and global battleground

Accelerating print advertising declines in 2016 are placing pressure on local newspaper publishers to deliver faster online growth

However, digital growth is being supported yet compressed by Google and Facebook; we estimate SME expenditure on Google is roughly 2x the local press, and we expect SME spend with Facebook to match local newspaper advertising revenues in two to three years

Publishers need to grow consumer registrations and subscriptions, digital display and also digital marketing services, in partnerships with the tech giants – but first they have to convince consumers they have relevant use-cases that global platforms cannot replicate

  • Facebook
  • Google
  • Johnston Press
  • Local World
  • Trinity Mirror
Internet, Media 18 July 2017
Tinder and online dating: who's paying?

Tinder is one of the most high-profile mobile apps on the market and has transformed the adoption of online dating

Tinder’s success is due in large part to its understanding of user experience, which is key to getting, keeping and upselling users through network effects

But the financial value of this success is limited by the industry: even a mobile revolution has not created a high-revenue mass market where none existed before 

  • Guardian Media Group
Internet, Media, Mobile, Technology 27 June 2017
The map is now the territory

We are in the midst of a rapid change in how maps are made and used, from a world of cartographers making records of physical features to sell to consumers and businesses, to one where information about the world is automatically tracked and measured, and built into every service we use

A whole host of industries traditionally unconcerned with geography are being and will be transformed by maps and location, from retail and advertising to finance and insurance. Every business needs to know what maps can offer them

A variety of maps suppliers are jostling for position in serving this growing need: local or international, free or commercial, seeing mapping as a core or side-business. Different suppliers suit different requirements

  • Apple
  • Google
Non-UK Media, Internet, Media, Mobile, Technology 26 June 2017
How to sell games: borrowing ideas from Netflix and Apple

A Netflix-like subscription model for console based video gaming is a big step closer with Microsoft launching a clear and easy Xbox subscription game solution, and it may even work

Sony’s strategy for premium online services across all its businesses remains muddled and complicated, but could be fixed quickly: dropping game streaming is the first step, providing a lower cost subscription service is the second

Google’s admission that more curation in its games app store will be needed finally indicates a better understanding of the games industry, in parallel with the company’s efforts to win over other creative industries

  • Apple
  • Facebook
  • Google
  • Microsoft
  • Sony
Internet, Media, Mobile, Technology 21 June 2017
UK broadband, telephony and pay TV trends Q1 2017: Profit warnings come in threes

UK residential communications market revenue growth dipped 0.6ppts in Q1, from 3.3% in the previous quarter. This was mainly driven by ARPU weakness arising due to the timings of Sky and Virgin Media’s price rises, but weakness also stemmed from the sustained decline in broadband volume growth and continued new customer price competition

In competitive terms, BT and Sky suffered as a result of communicating price rises in the quarter, Virgin Media had a strong quarter if not quite as good as it was expecting, and TalkTalk manged to recover to positive retail broadband net adds at the expense of high marketing costs

BT, Liberty Global and TalkTalk issued profit warnings in the quarter, all of which were at least loosely related to increasing pressures in the consumer market. We expect these pressures – a slowing broadband market, an expanding Virgin Media, and a stabilising TalkTalk – to continue

  • BT
  • Liberty Global
  • Sky
  • TalkTalk
  • Virgin Media
Fixed Line, Internet, Media, Mobile, Telecoms, TV, UK Media 19 June 2017
BT Q4 2016/17 results: Mobile strength, pressure elsewhere

BT had a reasonable quarter in its consumer broadband business given market pressures, and a very strong one at EE with continued growth acceleration. It had a good quarter for fibre adoption as well, helping its wholesale divisions stabilise their revenue, but business/IT was weak as expected

Regulatory pressure remains intense despite the (welcome) Openreach agreement, with price cap regulation proposed or due on a range of products, and a regulatory approach which is far from investment-orientated

Pressures in the business/IT market are likely to continue, and pressures in the consumer broadband market are likely to intensify, justifying BT’s current cautious approach to guidance and dividends

  • BT
  • Liberty Global
  • Ofcom
  • Sky
  • TalkTalk
  • Vice Media
Fixed Line, Internet, Media, Mobile, Technology, Telecoms, UK Media 9 June 2017
UK General Election online - news and advertising

In contrast to print coverage, most shared news and opinion content on social media was decidedly pro-Labour this election season, with fake news relatively non-existent compared to the US election in November

Facebook’s role in news distribution has steadily grown and now rivals Google’s, but only a half of the UK’s  electorate are active users – for the platform to become decisive in political news would require much stronger turnout among young voters

Facebook was the chief digital ad platform for both main parties, with Conservatives targeting Labour seats, Labour defending them and both adopting a negative tone

  • BBC
  • Facebook
  • Google
Internet, Media, Mobile, Technology, TV, UK Media 7 June 2017
Nintendo Switching to a new console era

The successful launch of the Nintendo Switch creates a new console model, and demonstrates the staying power and long term value of great franchises

Microsoft reveals the specification for Scorpio, but it won’t be enough to catch up to Sony. New franchises, and probably new leadership, will be the key to stopping Xbox sliding into irrelevance outside North America

Sony’s PlayStation 4 now exceeds 60m units worldwide, allowing Sony more freedom to publish a wide range of challenging creative console games, while VR games continue to gain momentum

  • Amazon
  • Microsoft
  • Sony
  • Walt Disney
Internet, Media, Mobile, Technology, TV 5 June 2017
Mounting risks to marketing effectiveness

A partial — if seductively persuasive and impressive — data framework for online advertising combined with short-term incentives have encouraged a dramatic shift in the ratio of brand to activation advertising from 60:40 to 50:50, depressing the pricing of display media

Mounting evidence suggests a focus on quick returns and cheap media at all costs is hurting marketing effectiveness, measured in long-term Return-on-Investment, brand equity and consumer satisfaction

Guarding against this risk requires brand-focused advertisers to create more space for long-term judgement for CMOs, and to refocus agency remuneration towards planning and creative work<o:p></o:p></span></h2>

Internet, Media, Technology, UK Media 18 May 2017
Prophets before profits: Snap goes public

Snap is going public: its filing shows widening losses and slowing user growth, calling into question its ability to reach profitability and justify the ~$20 billion valuation it is seeking

Long term, the company hopes to capture the large brand advertising budgets it expects will leave TV as linear viewing declines. But how it plans to do so is unclear, as it has shown little interest in connected TVs, and the ad model for augmented reality – Snap’s focus – is a long way off

Most of all, investors are being asked to trust in the ability of Snap’s founders – who will retain full control of the company – to continually innovate products which will attract users and advertisers

  • Facebook
  • Google
  • Netflix
Non-UK Media, Internet, Media, Mobile, Non UK Media, Technology 1 March 2017
Fashion's new look: digital sets new trends

Fashion underpins the growth of ecommerce; online took a 14% share of all fashion retail in the UK last year and is set to rise further, challenging the economics of physical retail 

Mobile is a key driver, it is changing research and shopping habits, and in turn affecting supplier product cycles, merchandising and marketing strategies 

Social media has disrupted the traditional shopping funnel, changing how trends and styles proliferate and shifting the sites of authority and influence in a £66 billion sector

  • Amazon
  • Facebook
  • Google
  • Twitter
Internet, Media, Mobile, Technology 28 February 2017
Enterprise cloud on the horizon

Enterprise cloud computing democratises access to IT capacity ranging from specialised software to platforms to infrastructure, transforming cost structures in sectors like media and retail

Cloud enables unprecedented scalability of bandwidth for digital media services like Pokémon Go and Netflix, while also hosting the back-end for advertisers and retailers 

As the industry consolidates quickly, intense competition among Amazon, Microsoft and Google is delivering value to customers and boosting adoption

  • Amazon
  • Google
  • Microsoft
  • Netflix
Internet, Media, Technology 6 February 2017
The Media Day 2016 - multi-tasking millennials and multi-media baby boomers

Ofcom’s 2016 Digital Day confirms a pronounced shift in media and communication habits of UK adults since 2014 towards mobile and online viewing of TV content.

Time spent on TV devices has proved robust in the digital transition thanks to internet platforms like Netflix and Amazon, along with older users’ attachment to linear TV.

The ascension of mobile at the expense of computer time is very marked due to changes in the home, and among the young, is driving multi-sourcing and multi-tasking.

Internet, Media, Music and Radio, TV 3 February 2017
Internet Trends - Consumer behaviours driving market trends

As smartphone ownership nears saturation in almost all consumer groups, the base for the UK digital economy is widening: media consumption continues to move to connected devices and use of consumer services on mobile grows

Ecommerce is now responsible for 75% of retail growth, steady even during periods of decline for the overall market

Google and Facebook take up almost 90% of gross online advertising growth this year, and the ecommerce and mobile service markets show early signs of platform concentration

  • Amazon
  • Facebook
  • Google
Internet, Media, Mobile, Technology 13 December 2016
Auto classified marketplace

This is the third and final report in our annual review of vertical marketplaces (classifieds), focused on used cars, and follows Vertical marketplaces overview and recruitment outlook [2016-116] and Property classified marketplace [2016-119]. Auto Trader continues to dominate online auto listings, accounting for 85% of UK revenues in 2015 by our estimates as total UK online auto spend increased 13%.  We believe that growth will slow to -7% this year and low single digits in 2017/18 as Brexit bites and consumer confidence retreats, although used and new car sales have so far remained buoyant since the vote. In common with the other classified verticals we see a period of sustained innovation on the horizon which will challenge the existing market leaders; data provision rather than audience listings will likely become the main source of value to advertisers while further out the advent of autonomous vehicles promises to disrupt the established structure of the entire auto industry.

Internet, Media 9 December 2016
European digital news models

Pay access now predominates in print-rooted national digital news across Europe, with meters the most popular model. Reliance on digital advertising is retreating. Best of class Continental publishers have roughly stabilised revenue, and the risk of print ad decline acceleration looms – as in the UK

Digital is still typically below 20% of revenue as online advertising CPMs decrease and newsstand buyers are reluctant to migrate to digital subscriptions – on current trends digital revenues will be insufficient to sustain a full-scale newsroom

Emerging innovations include aggregation, bundling (with broadcast, music, telecoms), and youth-skewed spin offs, but execution is uneven. Profitable native digital news sites provide templates for focused coverage at a fraction of traditional newspapers’ costs

  • SFR
Non-UK Media, Internet, Media 6 December 2016
Property classified marketplace

This is the second of three reports in our annual review of vertical marketplaces (classifieds), focused on property, and follows Vertical marketplaces overview and recruitment classified outlook [2016-116]

Stamp duty reforms and the impact of the Brexit referendum triggered a -10% fall in UK residential property sales between April and October 2016 and the consensus among estate agents and commentators is that the property slowdown will continue into 2016/17 as buyer confidence recedes. As a result, we expect UK property classified advertising to slip into decline in 2016/17 driven by losses in print, while online advertising growth will slow to low single digits

In the online market, while Rightmove continues to deliver outstanding financial results from its simple listings model, we believe that a new phase of innovation is imminent. Consumers are demanding enhanced services through data and personalisation, and there is clear potential for virtual/augmented reality and artificial intelligence to disrupt the market in the longer term

  • Rightmove
Internet, Media 5 December 2016

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