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chart of the week

Chart of the week: Pure-play ads have grown by 1,174 per cent Pure-play ad spending in the UK is estimated to have grown by 1,174 per cent in a little over a decade. Between 2005 and 2019, Group M, IAB, PwC, and the Advertising Association report that digital forms of advertising, particularly pure-play, will continue to be one of the main drivers of growth in ad spending. Digital as an avenue for advertising has existed for the better part of a decade, starting with the creation and execution of banner advertising, email marketing, and website development. As digital platforms grew, advertising focused on ROI, like ecommerce and search, expanded the revenue sources in the advertising industry. Advertising campaigns became more accountable due to the analytic capabilities digital provides, which pushed how advertisers optimised campaigns. In 2005, only about GBP £336 million (US $46.8 million) were spent on digital display, while TV ad spending hovered around £3.5 billion ($4.5 billion)and newspaper advertising hit over £4 billion($5.2 billion) in the same year. By 2017, pure-play digital grew to close to £3.5 billion ($4.5 billion), while newspaper advertising shrunk to a little over £1 billion ($1.3) in ad spend. TV ad spending flatlined putting it on par with pure-play. The report put out by Group M, IAB, PwC, and the Advertising Association, predicts that trend will continue in 2019.
Chart of the week: How can newspapers build trust? At a time when trust in the news is crawling out of historic lows, a new study from the Center for Media Engagement provides promising interventions to promote readers’ trust in news stories. Researchers found that adding a box to news articles explaining the journalistic process significantly bolstered trust across 11 different attributes. USA Today and the Tennessean, a regional US newspaper, provided researchers with two stories from each paper to test out the efficacy of the explanation box with readers. Each media outlet randomly distributed a link with the experimental explanation and a link to the same story without the box to their respective audiences. The story USA Today provided discussed Amazon’s headquarters search, while the Tennessean article examined a viral Facebook post that gave the false impression that a veteran had been declined medical care. The study found that the explanation box boosted trust in each story for 11 of 12 attributes that touch on different facets of trusting a news story. The explanation box especially helped strengthen trust for the “telling the whole story” and “transparency” attributes when compared to participants who did not receive the box. The only attribute that did not have a significant impact from the box intervention was the “does not have an agenda” factor.
Chart of the week: AI is not replacing people in digital marketing Status: Artificial intelligence is taking off and transforming every industry, causing many people to worry that ever-improving intelligent systems will replace human workers. In 2019, the AI market is projected to grow by 154 per cent, and while this pivotal advancement is working its way into industries, not every field is adapting it in the same way. For digital marketers looking to implement artificial intelligence across different facets of their digital strategy, artificial intelligence does not look likely to take over from human workers. In a survey of digital marketing agencies conducted by IAB Europe and Xaxis, only six per cent of respondents said that replacing humans is the most common AI application for their agencies. Generally, using artificial intelligence to optimise business processes and target key audience members were the two most common applications for the technology in digital marketing agencies. Nearly six out of ten marketers said that they were incorporating AI systems into their agencies to deliver better targeting. An additional 55 per cent of respondents said they were using the technology to better identify users and audience.
Chart of the week: Twitter's ads aren't engaging users like they used to While the absolute growth of ad engagement on Twitter continues to inch upwards, the rate of that engagement hasn’t been able to maintain its phenomenal fiscal year (FY) 2016 rate. Ad engagement has grown in Q4 2018, though at a slower rate than previous quarters. Twitter measures ad engagement as any user interaction with a pay-for-performance advertising product, including: expanding, retweeting, liking or replying to a Promoted Tweet, viewing an embedded video, downloading or engaging with a promoted mobile application, clicking on a website link, signing up for marketing emails from advertisers, following the account that tweets a Promoted Tweet, or completing a transaction with an advertising product. The social media platform is known for its sparse character count and incendiary back-and-forth from users. It experienced a huge spike in ad engagement in FY 2016, largely driven by the adoption of auto-play videos. In the last quarter of FY 2018, total ad revenue totaled US$791 million, which Twitter attributes to increased demand and improved clickthrough rates. The cost per engagement dropped as Twitter continued its expansion into video ads, which often yields higher engagements for the same cost. Ad engagement in FY 2018 did not grow at the same rate as the previous two fiscal years, largely because Twitter has ridden the video wave that pushed ad engagement to its 2016 levels and has not innovated beyond that.
Chart of the week: Podcast loyalty boosts positive attitude towards ads Loyal podcast listeners will stomach a few more advertisements to support their favourite show, a study by Westwood One found. Advertisers have successfully incorporated their products into podcast programming, yet podcasts’ ability to translate that willingness by listeners into substantial revenue still lies further down the road for the medium. In fact, about half of the respondents found most of the ads on their podcasts engaging, enjoyable and relevant. The favourable ad experience and seamless incorporation advertisers have managed to achieve on people’s favourite podcasts lead about half of the respondents to go out of their way to support brands that advertise on these programmes. While podcast listeners are willing to sit through advertisements, podcasts have not been able to make significant revenue from advertising on podcasts, despite the audience that the medium draws. A study published by Edison Research estimates that 73 million people tune in monthly to podcasts, putting it on par with streaming music listeners. While a similar number of people listen to podcasts and stream music, PwC estimates that podcasts made about US$400 million in 2018 from ads, while ad-based streaming music made well over a billion dollars. As podcasts find their footing and leaders in the industry turn to monetisation, advertising on podcasts will grow in the future.
Chart of the week: UK leads European ad revenue for social media The United Kingdom was able to drum up the most social media ad revenue in 2018, according to analysis and forecasts by Statista’s Digital Market Outlook. The UK brought in about US$2.8 billion in revenue solely from advertising on social networks, excluding revenue generated from membership-subscriptions or premium fees. The business model of social media networks largely relies on revenue from ad generation. Among other non-advertisement or marketing related scandals, social media sites, like Facebook, have come under increased scrutiny over who they sell advertisements to, and how they share user data to advertisers. The UK was able to bring in over double the revenue of Germany, the second-place finisher. Germany and France’s social media ad revenue combined does not match the UK’s ad generation abilities. Overall, mobile social media advertising currently surpasses desktop advertising and is forecasted to remain the dominant device for advertisers.
Chart of the week: Where media could benefit from AI Artificial intelligence (AI) is transforming business practices and the labour market across all industries, upending how leaders look at structural issues within their companies. While AI is often associated with the tech and finance sector, media has and will continue to incorporate artificial intelligence into every facet of the industry in the coming years. According to McKinsey Analytics, within the media sector, AI is expected to add the most value to the marketing and sales side of the industry, adding a projected 300 billion in value to that area alone. The strategy and corporate finance subset of the media sector are expected to gross US$99 billion in added value from AI in the coming years. Many of the areas within the media industry that are projected to gain the most value from AI, such as the marketing and corporate finance, will be expanding into traditional AI, which includes machine learning and statistical techniques, such as regression analysis. Areas where the potential added value of AI is currently smaller, like workforce productivity and fraud analytics arena, are projected to gain most of their value from advanced techniques being developed.
Chart of the week: News industry pivots to subscriptions for 2019 News industry leaders are doubling down on their focus on subscription services going into 2019, with half of the editors-in-chief, CEOs, managing directors, and heads of digital citing subscription services as their main revenue source for the new year. The news industry continues to find their footing as the field undergoes major changes grappling with the question of how to turn a profit. Notably, about one in three news industry leaders will be looking to display and native advertising as their main revenue focus for the next year. Ad revenue was the industry’s bread and butter prior to the digital age. Many people surveyed for the Reuters Institute for Journalism Predictions for 2019 cited the cut-neck and cut-rate advertising game fueled by big tech as the major reason news organisations are no longer able to play the advertisers game in the same way. Platforms like Google and Facebook can provide access to a targeted audience more efficiently and at a scale that puts media organisations at a competitive disadvantage. This year is shaping up to be the year of diversified revenue streams as subscription services surge to the top of news industry leaders’ priorities.
Chart of the week: Despite digital age physical books still reign supreme Three-quarters of people in the UK still read physical books rather than their digital equivalents, according to estimates from the Copyright Infringement Tracker. Despite the widespread prevalence and preference for digital forms of media, physical books were able to maintain their decisive majority in 2018. TV and music are the two types of media most often consumed digitally by UK residents, with about 95 per cent of people watching TV digitally, while roughly nine out of ten respondents listened to music digitally. People played video games digitally a little under half the time, which was the only media that came close to the dominance of physical books. The Copyright Infringement Tracker extrapolated poll results to estimate the volume of digital and physical media consumed by people in the UK. Overall, they estimated that each medium registered a slight decline in overall consumption. Television was the only exception, where consumption is projected to have risen from 145 million in 2017 to 160 million in 2018, mostly driven by digital formats.
Chart of the week: Facebook remains a major gateway to online news Despite the scandals Facebook has been entangled with over the past 12 months, the world’s largest social network remains a popular source of news for Americans, far ahead of any other social network. According to survey data published by the Pew Research Center, 43 per cent of US adults get news on Facebook at least occasionally, with YouTube (21 per cent) and Twitter (12 per cent) the second and third most popular social platforms for news. In light of this year’s revelations about false information deliberately and systematically spread via social media, it’s no surprise that news consumption on social media didn’t grow any further this year. According to Pew’s findings, 20 per cent of American adults get news on social media often, while 27 per cent do so sometimes, both unchanged from 2017. Interestingly, more than half of social media news consumers expect the news they see there to be largely inaccurate. So why bother in the first place, one might ask? According to the survey, it’s the convenience of getting news on social media that people like most about it. But does that outweigh the disadvantages of inaccurate information? To some it does apparently.
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