In response to COVID-19 and the associated lockdown and economic crash, advertisers have slashed budgets. Online budgets are not immune.
This has clarified features of the online ad market: it is demand-driven, relies heavily on SMEs and startups, and is built on direct response campaigns.
We expect online advertising to outperform other media, and for platforms to further gain share. But with a very few exceptions, this health and economic disaster is good for nobody.
Although increases are moderate so far, it is inevitable that overall video viewing will rise given a reduction in competition for people’s time. So far, unsurprisingly, TV news consumption has ballooned while unmatched viewing—a proxy for SVOD usage—has increased.
However, disruption to production of TV content and cancellation of live events will leave holes to fill in the schedule.
Flexibility is built into some types of programming, however nothing can replace live sport, while disruption in the production of scripted programming—especially high-volume soaps—will have knock-on effects that continue for years.
Free-to-air broadcasters, pay-TV operators and OTT services all have a role to play in serving sports audiences.
DTC services will enable sports organisations to engage with and learn about fans.
The industry needs to continue adapting to younger generations’ viewing preferences, particularly if it is to have a chance of combatting piracy.
2020 promises a year of transition for the games industry: eSports and games broadcasting are competing with traditional programming; game streaming services are becoming meaningful platform competition; and new consoles are on the way.
While most in the studio and TV industries continue to struggle with the games market—neither understanding (or seeing) a strategic fit, nor showing a willingness to invest—expect explosive growth to power the industry for the next decade and transform all entertainment services, not just games.
The ‘free-to-play’ games sector requires oversight and regulation to protect children and the vulnerable; expect regulatory turbulence in the UK, Europe and China.
With elections in the UK in December, and in the US in 2020, online political advertising is receiving intense scrutiny. Google has announced limits on targeting, while Twitter has banned politicians from buying ads
Facebook is the big player in online political ads, and it continues to allow targeted political ads, and to carve them out as exempt from fact-checking
Facebook wants to keep Republicans on side and surf the revenue opportunity, but pressure will increase with US elections, and we expect Facebook to bring in restrictions
ITV experienced a slightly-less-than-expected 5% drop in advertising revenue which was alleviated by lower H1 content scheduling costs, reflecting the timing of major sporting events
Love Island continues to be a ray of light, increasing its viewership and guiding the ITV Family audience share to an eleven-year high, while ITV Studios revenues were down but reportedly still on track for its 2019 targets
More information was provided on the Q4 rollout of streaming service BritBox and the addressable advertising platform for ITV Hub. ITV must be active in these areas but late entry presents problems and questions
Google’s advertising business has begun losing market share in the US, with competition from Amazon, Facebook and Microsoft intensifying in search and display
In response, the company is redoubling efforts to reshape its apps, services, and the entire web for more efficient monetisation, spelling uncertainty for partners and users
The adaptability and complexity of Google’s services reduce business risk from targeted regulatory measures, but increase the pressure for a radical intervention
Video sharing platforms, like YouTube, Facebook Watch and Twitch, are vying to attract creators with monetisation options such as branded content and user payments.
Advertising income, already limited for many small and medium-sized creators, has been undermined by YouTube’s response to brand safety concerns.
The new tools come with their own obstacles, but are necessary to keep platforms attractive to video creators.
After the most challenging period in its history since 2012, Facebook has been able to stabilise its fundamental metrics and announce a major product overhaul
Despite talk of a business model pivot, Facebook’s focus remains on advertising, whose growth will remain concentrated in developed markets
News publishers wishing to stay relevant on the upgraded product set need to target exclusive layers of social interaction, with groups particularly important
The split of UKTV has been announced with the lifestyle channels going to Discovery, while the balance, along with the UKTV brand and VOD service, retained by the BBC, costing BBC Studios £173 million
In the same release, a new, global Discovery SVOD “powered” by BBC natural history and factual programming was announced, backed by a ten-year content partnership
The deal is a positive step for the BBC, which safeguards against flaky brand attribution internationally and the potential loss of revenues from Netflix, which is becoming more choosy when acquiring content