Business Insider, Mindshare, and Starcount give their insights into 2018
We began by speaking to Jim Edwards, editor-in-chief for Business Insider UK, to get an editorial perspective on the changes and challenges going on in media right now, and what we might expect to see developing in 2018.
At a time when even Facebook and Google are now coming under further scrutiny, and new kid on the block publications like BuzzFeed and Vice are struggling to live up to the promise of their ‘digital first’ hype, 2017 has undoubtedly been a year of big challenges for digital media. Edwards however, does not necessarily see this as being indicative of a wider downward trend.
“It’s easier for digital publications to scale up and, unfortunately, that means it is easier for them to scale down, too,” said Edwards. “It’s probably not a wider downturn – the economy is still healthy, we’re not seeing a recession, and ad-spend continues to rise. But there are hiccups on the way. There were 57,000 journalists in the UK in 2007. This year there are 73,000, according to the British Labour Force Survey. That’s a 28 per cent increase, so something is going right.”
Photo: Business Insider UK
When asked about what he sees as potentially being some of the biggest trends coming down the track for media in 2018, Edwards points strongly to a decreasing level of trust in Facebook.
“You’re going to see publishers putting Facebook into the ‘unreliable boyfriend’ category. Over the years, Facebook has repeatedly extended news organisations’ reach, and then retracted it again, often suddenly. It offers us new ways to get revenue, and then it launches products that reduce our on-site revenue. I think you’re going to see publishers develop as many different revenue streams as possible, so if Facebook does something negative for the audience it won’t be such a big deal.”
“The other thing that we are finding already, is that more generally within the industry competition is becoming faster and more complex to deal with. The time lapse between everyone saying “pivot to video!” and the realisation that “pivot to video!” wasn’t a complete solution, was weeks or months. Those sea changes used to take years.”
Aside from changing revenue streams and evolving technologies, the past two years has seen an altogether more deeply rooted change in the public’s relationship with the media industry take place. Accusations of ‘fake news’ and ‘alternative facts’, along with the rise of social media and citizen journalism, has prompted society to ask questions about the role of traditional media. For Edwards, the most alarming thing about these developments is not the media industry’s ability to combat fake news, but the appetite that appears to be on display for alternative facts in the first place.
“The scariest conversation I had this year was with a media history researcher who told me she thinks society is going through a permanent cultural or ‘epistemological’ change,” said Edwards. “It’s not simply that some people can’t tell the difference between real news and fake news. Rather, some people want fake news. They want ‘alternative facts’. They prefer it to verification and context and balance and detail. They prefer to live on a flat earth, where there is no climate change, and where everyone agrees that Democrats run secret child abuse rings out of pizza parlours. She believes this change may be a permanent feature of Western culture, because the internet makes it a lot easier to live without being bothered by the truth.”
“The good news is that there are plenty of people who really do need facts and truth and verification and transparency. In an environment heavily polluted with nonsense, accurate reporting becomes more valuable, both to readers and the advertisers who need a reliable, non-delusional environment for their brands to be seen in. So there is hope!”
Helen McRae is the UK CEO of global media and marketing services agency, Mindshare. She also acts as chair of Mindshare Western Europe, representing Europe on the GroupM Europe board. We asked McRae to identify the leading trends that had the potential to significantly shift the industry in 2018.
“There are three key innovations to flag for growth in 2018 that signify the beginnings of revolution for the industry,” said McRae. Some of the innovations we have been talking about for the last few years are beginning to gain scale. One of these is conversational commerce. Christmas will no doubt be a boost for sales of smart speakers, bolstering the usage of voice activated devices across the UK. Also, having emerged in 2016 and then been somewhat re-appraised in 2017, chatbots will be back on the agenda in 2018, with people using them in much more sophisticated ways.”
“Slightly more emerging is image recognition. Developments in areas such as visual search, code scanning and facial recognition mean that people will be increasingly turning to images for quicker and easier interactions with brands. Lastly, the progress of AR will be an exciting one to watch. The big technology companies are making AR platforms more accessible for people and thanks to developer kits such as ARKit, ARCore and now Snap’s Lens Studio it will be easier for brands to create mobile AR experiences in 2018.”
Analysing where traditional publishers sit within the developing digital ecosystem, McRae emphasises that in the future, premium content will be more important to advertisers than ever before:
“Quality, premium content will be more important than ever but publishers will need to prioritise other sources of revenue beyond online display to keep them afloat,” says McRae. “We must not forget that advertisers don’t always want massive reach for every element of a campaign – it is about connecting with the right audiences in the right ways. With increasing concerns around programmatic, fake news and brand safety, the context in which ads are placed has become more important than ever and marketers are inevitably demanding more control over where their ads are placed.”
“We are strong believers in the value of the media brand providing tacit endorsement for the advertiser, but publishers will not be able to solely rely on quality premium content under the current ad model. There is simply not enough online display revenue for this to be sustainable and emphasis should be placed on growing new revenue streams. This could be anything from bringing content marketing in house, creating more personalised content or the development of more innovative mobile ad solutions. In addition, with more people turning to social media for their content, publishers are having to rely increasingly on their larger digital rivals to provide them with traffic. Industry collaboration will be key to determining what this relationship will be for the future.
The need for greater industry collaboration has been a key theme throughout 2017, and was emphasised earlier this year by the new FIPP chairman, Ralph Büchi. With Facebook and Google having come under increased scrutiny over the past twelve months, does 2018 represent an opportunity for the more traditional side of the industry to gain markets hare back from these giants?
“Yes, there are definitely opportunities for traditional media outlets,” said McRae. People aren’t going to stop using Facebook or Google anytime soon – the services they provide are just too much of a lure. And for that reason advertisers are not going to stop spending on these platforms altogether – currently the majority of new digital ad-spend is being driven through Google and Facebook’s platforms. However, if persistent concerns around brand safety, measurement and the ad tech supply chain are not addressed, this cannot be sustainable. Advertisers will be forced to re-think and will be looking elsewhere to reach people.”
“With GDPR also on the horizon, the ad products and practices of these digital giants will become harder to sustain. Consents will be key. People may be more prepared to give marketing consents to more traditional media outlets that they know and trust, and where the data exchange is more straightforward – then, herein lies the advantage of good quality first party data.”
That last point about the EU General Data Protection Regulation Act (GDPR) is an important one, because it’s a legislative update that has the potential to cause significant waves across the entire industry, not only in Europe but globally too. After four years of preparation and debate, the GDPR was finally approved in EU Parliament in April 2016, and will come into play in May of 2018 – there’s even a countdown clock on the official GDPR website.
The legislation prevents brands from using a person’s data unless they have explicit permission to do so. Alongside recent Apple retargeting regulations in the US and an increasingly unaccommodating Chrome browser, the net appears to be closing in on intrusive advertising, particularly in the programmatic sector. Whether or not this bodes well for traditional media brands has been a strong source of debate in 2017, but what we can say with certainty is that behind all of the AI, AR, and other theoretical trends that look set to reshape the industry in 2018, GDPR will present a tangible challenge.
Clive Humby is the chief data scientist for Starcount, an online analytics firm that combines rich data from digital and social channels across the web, as well as other sources, to report on consumer behaviours. Formerly one half of customer science firm, Dunnhumby, the firm first gained prominence for helping to establish Tesco Clubcard in the UK’s in the 1990’s. Humby sees the incoming GDPR regulations as an opportunity for traditional publishers to reclaim digital market share.
“Many businesses are scratching their heads trying to decide how to re-contact existing customers to get improved consents, what consents need to be now and in the future and how to continue to engage with customers, what the implications are likely to be for their programmatic advertising methods and algorithms and just what might be legal and not when using digital channels and social media advertising. There is no question that it marks a step change in consumers rights, essentially moving to a positive ‘consent for purpose’ model of using data.”
“One area that has been overlooked however is how the GDPR guidelines interact with the existing Privacy and Electronic Communications Regulations (PECR) that were updated in 2016. The combined effect of these two pieces of legislation create a significant landmark and a huge opportunity for traditional media to reclaim lost advertising revenue. Whilst inevitably traditional print media will offer all or nothing coverage of its readership, the new data sources opening up offer much richer profiling by passions, interests and motivations. This type of profiling is central to magazine publishers in terms of the diverse range of interests they cater for and offer to advertisers. The next 12 months offers a unique opportunity for traditional media to take advantage of the many unknowns that GDPR and PECR raises.”
The incoming GDPR legislation is a timely reminder that for all of the technological expansion going on around us, legislative and consumer challenges in 2018 will also need to be met. As is the case for example with Uber, which itself now faces tighter control from the EU having been re-designated as a transport company, technology platforms are themselves not exempt from legislative constraints. With greater investigations now being made into Facebook and Google content on a global basis, this could again contribute to a resurgence in more traditional distribution models.
What we find more generally going into 2018 is an industry that has ways weathered and adapted to numerous waves of technological change. In many ways the editorial trends within the industry provide the biggest challenges, as social media has rewoven the fabric of what the public considers to be accurate reporting. But as the agency and research sectors show, it will ultimately be media’s ability to go on producing quality, verified, premium content that sees it through the next round of media tech change.
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