Author: rssmasher

Current contenders include Penske Media Corporation, which owns ‘Variety.’ The owners of ‘Playboy’ and ‘The Hollywood Reporter’ and New York Knicks owner and Madison Square Garden Chairman James Dolan
are also in the running,

Music videos are among the most-watched videos on YouTube, with a recent study showing that more than 40% of the platform’s users watch at least one music video in any given month.

A new survey from PricewaterhouseCoopers diving into streaming video suggests streaming is now inarguably mainstream, but a correction in the market may be necessary as consumers try to navigate the
plentiful options in the space.

Nearly a third of consumers say they have purchased a product or service based on an influencer’s recommendation; nearly a quarter said they have made recommendations to others based on influencer
content.

Words like “dreary,” “unpleasant,” “ugly,” “depressing,” and “meaningless” comprise a theme to much of this year’s TV reviews, and are a reflection of how sad and violent TV has become.

News content will see a boost from the all-important midterm 2018 elections — when the entire House of Representatives is up for another term, and one-third of the Senate.

When Capital One hired independent agency The7stars earlier this month, the advertiser’s brand director Katy Lomax hailed the agency’s “transparent approach” to media buying. Less than a week later, food-delivery company Deliveroo echoed that sentiment, calling the agency “compelling.” Both advertisers’ decisions to opt for The7stars rather than big holding groups illustrate that a network agency’s loss is now an independent shop’s gain.

The last 12 months have seen a steady flow of media budgets into independent agencies on both sides of the Atlantic. Of the £11 billion ($14.7 billion) of media billings tracked by research firm Comvergence across 21 markets including the U.S., Germany and India over the first nine months of the year, around £2.1 billion ($2.8 billion) was assigned to independent media agencies. One-third (16) of the 42 accounts analyzed in the first six months moved to an independent shop, including Honda’s £449 million ($600 million) to Horizon Media and Sprint’s £516 million ($690 million) to RPA. Comvergence estimated independent agencies mainly concentrated in the U.S. would win a further £224 million to £300 million ($300 million to $400 million) in the last three months of the year.

Independent agencies are benefiting from the transparency crisis, said Paul Wright, CEO at media-buying platform Iotec.

That benefit is being felt in the U.K., where the likes of The7stars that have offered independent alternatives for over 10 years now have the scale to take on large clients from the big agency groups. While full disclosure, audit rights and media at net costs may provide reassurances, the web of self-interest can run incredibly deep, meaning advertisers receive no guarantee of neutrality when it comes to strategic recommendations. “Companies like The7stars are winning larger accounts, thanks to having always had open, transparent models and therefore not being part of the problem,” Wright said.

Transparency has been pushed to the top of the agenda in 2017, and there is no doubt the talk is turning into action, said Jenny Biggam, CEO and co-founder of The7stars. She added that independent agencies are profiting from enlightened advertisers increasingly looking beyond the larger networks. “Billings in the independent sector were already up 10 percent in the year before some further big wins more recently, which indicates the trend is set to continue into 2018,” she said.

But independent agencies will continue to benefit only if marketers are prepared to pay for transparency. For all the threats and demands made by some of the world’s biggest advertisers, few have openly said they’re willing to pay more for quality. It might seem counterproductive to put a premium on honesty. Mark Butterfield, marketing consultant and former consulting firm executive, has debated whether that means there’s a separate price for dishonesty. Yet rightly or wrongly, it seems like transparency comes at a premium. If agencies, many of which are struggling to offset shrinking budgets, are to be incentivized to stop making money from undisclosed fees, then advertisers must pay them more to close those options down. You only get what you pay for, said Darren Woolley, founder and global CEO at marketing consultant TrinityP3. In some cases, this is a flat commission or markup, he added, while in others it’s a flat fee or retainer. Both of these remuneration models are supported by some type of performance bonus, added Woolley.

One advertiser wise to the transparent approach is Barclays. Earlier this year, the bank reviewed its £60 million ($80 million) global media account. Unlike other media reviews, Barclays told the participating agencies it would pay more to see how its money is being used to buy media, according to two sources. OMD eventually won the account from GroupM. OMD will have to be extremely careful with what it does with the bank’s money. Both Barclays and OMD declined to comment.

If more brands follow in Barclays footsteps, then the independent shops could start to look more attractive to the big-spending brands. Momentum, both in pitch rooms and in the press, seems to be with the independent shops going into the new year as their larger counterparts struggle to adapt business models under attack on all fronts. Both Capital One and Deliveroo, two of The7stars’ biggest wins since it launched in 2005, came in the wake of the agency’s much publicized support of a strict contract template from advertiser trade body ISBA in the U.K., which is designed to ensure greater transparency in a more fragmented ad market. While the big network agencies made no secret of their frustration toward what they deemed another squeeze on their margins, The7stars did the opposite, subsequently benefiting from the PR even if the restrictive contract hurt its bottom line in the short term.

Fundamentally, it’s about making investments that are right for the client and building trust, said Biggam. In transparent media-buying situations, agencies may be paid more for their services and expertise, but “ultimately, the net cost of media is lower to the advertiser because media owners aren’t paying the agency a big slice of the cost of space,” she added.

Winning larger media accounts won’t be easy for independent agencies. The recent closure of the U.K. office for Blackwood Seven, a Danish startup that tried to replace media agencies with an artificial intelligence platform that could plan and buy media, is a testament to that. Any agency coming into the market fresh like Blackwood Seven will find it “difficult” due to lack of infrastructure, said Dan Pimm, co-founder and director at December 19, and the lack of its own client case studies, which offer potential clients piece of mind about working with an agency. The difficulty for independents is building from bottom up rapidly, Pimm added.

Although independent agencies are on the rise, established businesses will take advantage of the current climate, while newer shops will have to work hard and be patient for success.

Facebook is increasingly asking for stricter terms for video shows it buys for Watch, including buying shows outright, sources said — a scenario that would limit the amount of money publishers can make from Facebook.

As it heads into 2018, Facebook is increasingly seeking bigger-budget video shows that it can own outright, multiple Facebook Watch partners say. While Facebook’s initial wave of funding included buying short-form video series that it called “spotlight” shows, the platform plans to do away with the spotlight moniker and format and focus on longer programs with bigger budgets, partners said. As one Watch partner described it, Facebook is classifying programs as “hero” shows, which it buys and owns, and “ecosystem” shows, which video makers independently produce and upload to Watch.

“We are in the middle of negotiations around a bunch more shows, and they’re saying that they’re shifting their deal terms. Basically, the spotlight deal you knew is going to be going away,” said the Watch partner.

For the hero shows, Facebook is asking for programs with episodes lasting 15 minutes or longer, sources said. Facebook is willing to put more money toward these projects — while budgets will obviously vary, multiple Watch partners quoted potential budgets well into six figures per episode — but it increasingly wants to own these shows. This means the producer would only make the typical 10-15 percent profit margin that entertainment studios carve out for making TV shows, sources said.

Facebook declined to comment for this story.

“Coming from a production world, the margins are tight, and you’re getting squeezed everywhere. When you layer that model into an organization that’s traditionally based on media, it can be challenging,” said a second Watch partner. “But it also creates a new stream of revenue, which is not necessarily ad-based, which is much needed at this point.”

The notion of owning intellectual property is taking on greater importance among digital media companies, which have started to make video shows for digital platforms and linear TV. If the publisher retains ownership of the show, it can generate another revenue stream by reselling or repackaging the show for other distributors in later windows — or even creating merchandise if the show is really successful.

Facebook isn’t the first distributor to want total ownership of the content it buys. Netflix, for example, has been doing more of this. But Facebook initially allowed publishers to retain ownership of their shows, particularly the short-form spotlight shows for which Facebook only requested a two-week exclusivity period in its initial wave of funding. In more recent deals, Facebook has asked for longer periods of exclusivity.

For 2018, Facebook is willing to offer back-end percentages — additional money the producer makes if a show’s revenue exceeds the production cost, said the first Watch partner. But there are doubts about whether this can bring in any meaningful revenue. Most back-end deals typically have the producer getting 1 or 2 percent of the profit, which means a show would have to make a lot of money beyond the initial production cost for the publisher to see a noticeable return.

Facebook’s mid-roll ad breaks program has not worked out for publishing partners. In 2018, Facebook plans to test pre-roll ads within Watch, which could boost Watch-related revenues for Facebook and publishers. But that’s no guarantee, since most viewers are still discovering Watch shows within the news feed, and pre-rolls won’t show up for videos in the news feed.

In essence, Facebook’s changing deal terms mean publishers might only be able to rely on the production margin to make money from Watch shows.

“It’s going to come down to the amount of time required versus the return on money,” said the first Watch partner. “If I am developing a show, my first preference is to make sure that time spent goes into a piece of IP that I can retain ownership to and can monetize over time. If I just sell to the highest bidder now, it leaves me with nothing more than a margin.”

Even within these constraints, some publishing sources argued that there is value in being a production shop for a big distribution platform like Facebook — as long as that’s not the only way the publisher is making money developing shows.

“[Production] can be a good single piece to a bigger, multifaceted media business,” said Evan Bregman, director of programming for digital studio Rooster Teeth. “We’re never going to be in the position where the only thing we do is try and sell IP to other people; it’s one of the many things we do.”

Plus, there is marketing value to having a show on a platform that has the potential to reach a lot of viewers.

“People are willing to make a slightly worse deal on Facebook than they would with other platforms like Go90, which no one is really watching,” said a third Watch partner. “But that has its limits, too.”

There are some signs that Watch monetization is poised to improve. According to a recent Ad Age report, Facebook is considering letting publishers sell ad inventory inside their Watch shows, something publishers have pressured Facebook to do.

However, there’s no guarantee that Facebook letting publishers sell ads inside Watch will immediately make producing shows worthwhile. The pivot to video is hard, but the pivot to entertainment requires much more patience and a greater willingness to make upfront investments, according to Marc Hustvedt, CEO of Above Average.

“You have to decide: Are you in the services business, or are you in the entertainment business?” said Hustvedt. “It’s OK to be in both, but know that when you’re talking about building entertainment franchises, it’s a hits business; some shows are going to perform great, and others are going to horribly underperform. That’s the risk of being in the business. That’s why you need a portfolio with different business models.”

Although TV’s dominant reach of U.S. viewers has seen some declines, it still beats digital media platforms by wide margins.

Data released from Drawbridge on Wednesday suggests that small screens are out and large, portable screens are back as the preferred choice for clicking through to complete tasks.