Since our first-ever U.S. Advertising forecast was published in 1950, we’ve been making headlines and sharing our unique perspective and outlooks on the marketplace. Here you’ll find our latest headlines, press releases and thought leadership.
National TV Networks Report No Growth in 4Q16
February 27, 2017 // Thought Leadership
By Michael Leszega & Vincent Letang
The big four broadcast networks and six of the big eight cable TV groups have now reported their fourth quarter earnings, and the theme this quarter is zero growth in the overall national TV market.
However, given the strong comparable of 4Q15 when the net ad revenues (NAR) of cable and broadcast networks grew by almost +6%, this result is fairly decent. In fact, in our latest forecast (published early December ’16) MAGNA predicted 4Q16 NAR growth for national TV to be flat (-0.5%).
Broadcast network ad sales were flat year-over-year compared to strong growth of +8% in 4Q15 when the market first heated up. In fact, that stability was the average of strong NAR growth for two companies (NBC, FOX) and strong declines for the other two (ABC, CBS). Similar themes were (again) conveyed in earnings releases where strong pricing was countered by lower ratings. The decline at ABC was due to lower impressions, which was driven by lower average viewership. NBC saw strong growth due to the premiere of Thursday Night Football. However, even excluding TNF, ad revenues would have increased modestly at the network.
Conversely, CBS ad revenues declined due to fewer TNF games being aired in the quarter, as the NFL split coverage of TNF between NBC and CBS, compared to last year when CBS was the sole provider. Finally, FOX also saw strong growth due to sports related advertising, in this case baseball, as game seven of the World Series (Chicago Cubs vs Cleveland) was the most-watched baseball game in 25 years.
Here’s a breakdown of ad revenue growth and ratings (4Q16 vs 4Q15, ratings are prime time, A18-19):
• ABC: -6% decline, -15% ratings
• NBC: +10% growth, flat ratings
• CBS: -8% decline, -18% ratings
• FOX: +9% growth, -6% ratings
Cable networks NAR declined slightly compared to 4Q15 (-1% vs 4Q15) as growth at 21st Century Fox (+10%) was offset by declines by other vendors.
Growth at Fox was due to higher ratings at Fox News, as news programs continued to do well during the 4th quarter, and higher postseason baseball ratings on Fox Sports 1.
Time Warner was flat on the quarter as growth at the news business was offset by lower delivery at some of the entertainment networks.
Disney’s decline (-5%) was partially due to timing, as they aired only three college football bowl games on New Year’s Eve this year, compared to all six last year (the other three bowl games will be accounted for in 1Q17 earnings as they aired on January 2, 2017). Disney did not disclose what ad revenues would have been on a complete like-for-like basis.
Here’s a breakdown of ad sales and ratings (4Q16 vs 4Q15):
• Time Warner/Turner: flat growth, -6% ratings
• Viacom: -3% decline, -3% ratings
• NBC Universal: +1% growth, -3% ratings
• Disney: -5% decline, -19% ratings
• 21st Century Fox: +10% growth, +10% ratings
• Discovery: +1% growth, -7% ratings
• Crown Media: Now private and no longer in our composite, but worth noting that ratings were up +34%.
The networks discussed the continued strength of the scatter market. Disney, NBCUniversal, Discovery and more mentioned this in their earnings calls.
For example, Disney said: “primetime scatter pricing at the ABC network is running over 25% above upfront levels.”
Broadcast prime ad loads averaged 11.56 minutes/hour in the fourth quarter, -2% lower on a quarter to quarter basis, but flat on a year to year basis. The only significant movement was on FOX, which was down -6% Q/Q. Cable prime averaged 12.33 minutes/hour, up about +1% on a Q/Q and Y/Y basis. In totality (averaging all channels owned by the network), Viacom ad loads increased by +5%, while Turner was down -4% and A&E was down -9%. Turning to individual channels with significant movements, MTV ad load was up +8% Q/Q (or +4% Y/Y) while TBS was down -5% Q/Q, CNN was up +5% Q/Q but down -8% vs last year, and Discovery Channel was up +6%.
Check out our next US forecast, which will be released in early March where we’ll incorporate the new earnings data into new national television forecasts for 2017/2018.
Turner Kicks Off CNN Upfront Talks by Bringing Its Pop-Up Roadshow Directly to Agencies’ Offices
February 24, 2017 // In the News
The event also includes a pair of conversations, both of which are moderated by Brian Stelter, senior media correspondent and host of Reliable Sources. The first is with that agency’s head about the media landscape. During the Feb. 16 event at IPG Mediabrands’ office, Stelter spoke with David Cohen, president for North America at Magna Global, about the importance of succinct messaging.
“We spent tons and tons of time over the past couple of years talking about data and programmatic and media, and we haven’t spent nearly enough time, in my view, talking about what is the message that we’re putting in that environment,” Cohen told Adweek. “We’ve done a bunch of research recently. Attention spans are at an all-time low. I feel like a 15[-second ad] is long and a 30[-second ad] is interminable. We talk about a Snapchat of 10 seconds, a YouTube of six seconds; we need to be far more condensed in how we’re telling stories.”
In the second conversation at the event, Stelter speaks with a rotating mix of CNN execs and talent, including Lisa Ling (host of This is Life with Lisa Ling), Chris Cuomo (New Day co-host), Otto Bell (vp and group creative director, Courageous) and Ed O’Keefe (svp, premium digital content), about some of CNN’s new programming, how the network tells its stories and how partners could work with them. “It’s an opportunity to talk a little bit about the brand, but also talk about the business together,” said Cukaj.
Cohen said he found the CNN Experience a refreshing change from the usual run-of-the-mill upfront discussions. “It’s a period of several weeks of meetings where we go to see some relatively generic presentations that we’re just sitting in the audience, listening to our media partners talk about what they’re bringing to market. A bunch of us have been trying to figure out, is there a better way?” said Cohen. “This is probably the most elaborate, most hands-on, most experiential thing we’ve done with a partner, but that’s what cuts through. So when you think about Turner and CNN, you remember something like this, as opposed to sitting in an auditorium, listening to a bunch of talking heads.”
SCIENTIFIC MEDIA TRIAL REVEALS BEST WAYS TO OPTIMIZE SKIPPABLE PRE-ROLL CAMPAIGNS
February 15, 2017 // Press Releases
MAGNA AND THE IPG MEDIA LAB CONDUCT A COMPREHENSIVE STUDY ON AD SKIPPING AND CAMPAIGN STRATEGIES FOR SKIPPABLE VIDEO ADS
SAN FRANCISCO, CA– FEBRUARY 15, 2017 – MAGNA, the intelligence, investment and innovation unit within IPG Mediabrands, and IPG Media Lab, its creative technology arm, today announced the results of a scientific media trial that analyzed audience behaviors around ad skipping and identified critical steps to help advertisers maximize the impact of their skippable video ad campaigns. The report, entitled Turbo Charging Your Skippable Pre-Roll Campaign, used experimental design to replicate online video experiences in order to measure attention, emotional response, and impact on traditional brand metrics for skippable pre-roll ads. The study involved over 11,000 consumers and 23 types of ads along 8 different industry verticals to reach widespread conclusions for the advertising industry as a whole.
The media trial found a number of key insights regarding ad skipping behaviors. Most notable, 76% revealed that they skip based on the fact that it’s an ingrained behavior. This is further exacerbated by the fact that not only do the majority skip ads, but they do so right away. The reason people complete a skippable ad also differs based on whether or not they are in market for the advertised product: in market audiences are more swayed by pre-existing brand affinities, while everyone else tends to just “wait it out”. While the statistics may seem daunting, the research uncovered that even when people skipped the ad, it was able to breakthrough and increase awareness. In addition, the study found that there are still plenty of ways to increase impact.
“The results of this media trial proved that there are viable solutions to improve skippable ad campaigns,” said Kara Manatt, SVP, Intelligence Solutions Strategy at MAGNA. “While skipping is an ingrained behavior, more succinct ads, coupled with human connection and good storytelling, will help brands more deeply engage with its audiences.”
Specifically, the report recommends that advertisers consider using 6 second non-skippable ads, which substantially increase both higher and lower funnel metrics and provide impressive value compared to skipped ads, to help compliment their skippable pre-roll campaign. Some other creative hacks included making sure that branding for the ad was actually a part of an early story arc that the viewer would see before they skipped the ad, as well as involving more emotion and storytelling throughout to invoke a greater connection and engage the audience.
Key highlights include:
· Most people skip ads (65%), and they skip as soon as they get the chance.
· Skipping is already an ingrained behavior, and there isn’t much that can be done to curb skip rates other than use shorter ads.
· However, ads that are skipped are still valuable: people are paying attention to pre-roll ads, so they still pick up on the advertised brand and remember it. The value of a skipped ad also increases incrementally the longer a person sticks around.
· There are still many ways to optimize a skippable ad campaign:
o It is especially important that the creative invokes a human connection through storytelling and emotion to help raise awareness and brand opinions.
o An early story arc with upfront branding is the best way to increase an ad’s impact, since people are skipping early.
o 6 second ads are a highly effective way to compliment a skippable pre-roll ad campaign: they have impressive value compared to even longer non-skippable ads and offer the ability to impact consumers that would have otherwise skipped. There are also many ways to utilize this newer ad format, which can help convey originality for a brand.
In conducting the media trial, a total of 11,338 users were recruited from a representative online panel. They were given an initial survey with demographic and media consumption questions, and then directed to a content video of their choosing. Before viewing the ad and content, they were also asked to turn on their webcam so that emotion and attention could be tracked throughout the experience. After choosing a piece of content that was indicative of their normal media consumption habits, participants were randomized into one of the 108 test cells involved in the study that determined what type of pre-roll ad was served. Each participant had 2-3 video experiences, depending on the type of test cells they were randomized into. Passive data collection took place during the ad experience, such as interactions, time spent with the ad, etc. Afterwards, participants completed a survey that measured traditional branding metrics and qualitative feedback.
MAGNA Strikes Deal With Roku, Shifting More Ad Dollars Out Of Linear TV Heading Into Upfronts
January 25, 2017 // In the News
In Magna’s latest effort to move advertisers’ money out of traditional TV, the media-buying arm of Interpublic Group struck a deal with Roku to help clients reach audiences who have shifted their TV viewing to over-the-top devices.
As linear TV ratings continue to decline, with people watching content on a delayed basis and a variety of devices, David Cohen, president-North America, Magna, said he is constantly looking for other ad outlets beyond linear TV.
Through the deal, Magna clients, who include Coca-Cola, BMW and MillerCoors, will be able to more precisely target audiences on the platform using custom data segments created by Magna, Mr. Cohen said. This is the first time Roku will allow an agency to use custom data segments to execute a buy, he said, rather than relying on third-party data.
Magna will also gain access to Roku data to help better understand the OTT marketplace while planning media buys. And Roku will allow Magna to tag all campaigns with Nielsen Digital Ad Ratings (DAR) to then combine viewing on TV and Roku for a more holistic picture, Mr. Cohen said.
MAGNA and Roku Forge Strategic Advertising Partnership
January 25, 2017 // Press Releases
AGENCY-WIDE OFFERING DESIGNED TO IMPROVE OTT AUDIENCE TARGETING AND MEASUREMENT
LOS GATOS, CA AND NEW YORK – JANUARY 25, 2017 – MAGNA, the intelligence, investment and innovation unit of IPG Mediabrands, today announced an industry-first strategic partnership with Roku Inc. to deliver targeted advertising to OTT audiences. Through this partnership, IPG Mediabrands clients will gain accelerated access to the advanced advertising capabilities of the Roku(r) platform, including precision targeting, programmatic workflows, interactivity, and audience measurement.
MAGNA’s partnership with Roku further cements the agency’s video diversification efforts. During the 2016 Upfronts, MAGNA secured the largest ever Google Preferred deal and shifted a portion of clients’ TV advertising spend to YouTube. Partnering with Roku builds on these efforts, enabling MAGNA clients to reach viewers who have shifted their TV consumption to OTT. MAGNA clients already active with Roku include BMW, Coca-Cola, The Hershey Company, MillerCoors, JetBlue, Dunkin Donuts, Charles Schwab, IHOP, Sony Pictures Entertainment and Office Depot.
MAGNA is actively expanding its television advertising strategy across emerging platforms like OTT, enabling the agency to provide client solutions at the pace of the consumer. According to Nielsen, in December 2016, Roku represented 48% of monthly active streaming players. Roku’s data, coupled with the proprietary data stack of Cadreon, the programmatic arm of IPG Mediabrands, will provide clients with the ability to precisely target audiences on Roku’s platform. Roku is also the industry’s first and only OTT platform to support Nielsen’s Digital Ads Rating (DAR) measurement. In an industry-first move, all IPG Mediabrands campaigns will be DAR measured, with the goal of bridging the gap between TV and OTT advertising.
“Last year, we made a concerted effort to provide marketers with viable sight, sound and motion opportunities beyond linear television,” said David Cohen, President, North America at MAGNA. “Now, we’re continuing to diversify the mix, transcending audience demographics while leveraging data in a new and exciting way through our partnership with Roku. They offer the most sophisticated OTT advertising path to reaching customers.”
“By integrating advanced ad technologies directly into our TV operating system, Roku is able to offer advertisers the most advanced ad capabilities in OTT,” said Scott Rosenberg, Vice President of Advertising at Roku.
“This partnership accelerates our work with IPG Mediabrands, and opens the door to close collaboration on new ad products in 2017.”
OTT viewing, and digital video more generally, are growing rapidly. Ad-supported viewing is now the fastest-growing segment on the Roku platform, accounting for half of the top 250 most-watched channels.
These figures aligned with MAGNA’s latest Global Advertising Forecast, released in December 2016, which projected that digital advertising spend will surpass TV this year.
MAGNA is the centralized IPG Mediabrands resource that develops intelligence, investment and innovation strategies for agency teams and clients. We utilize our insights, forecasts and strategic relationships to provide clients with a competitive marketplace advantage.
MAGNA harnesses the aggregate power of all IPG media investments to create leverage in the market, negotiate preferred pricing and secure premium inventory to drive maximum value for our clients. The MAGNA Investment and Innovation teams architect go-to-market investment strategies across all channels including linear television, print, digital and programmatic on behalf of IPG clients. The team focuses on the use of emerging media opportunities, as well as data and technology-enabled solutions to drive optimal client performance and business results.
MAGNA Intelligence has set the industry standard for more than 60 years by predicting the future of media value. The MAGNA Intelligence team produces more than 40 annual reports on audience trends, media spend and market demand as well as ad effectiveness.
About IPG Mediabrands
IPG Mediabrands was founded by Interpublic Group (NYSE: IPG) in 2007 to manage all of its global media related assets. Today, we manage over $39 billion in marketing investment on behalf of our clients, employing over 9,000 marketing communication specialists in more than 130 countries.
IPG Mediabrands is a new world agency group designed with dynamic marketing at its core. Our speed, agility and data smarts ensure we continue to create growth for many of the world’s biggest brands. IPG Mediabrands’ network of agencies includes UM, Initiative and BPN as well specialty business units including Ansible, Cadreon, Healix, Identity, the IPG Media Lab, MAGNA, Mediabrands Insights, Orion, Rapport, Reprise, and Society.
About Roku, Inc.
Roku pioneered streaming for the TV and aspires to power every TV in the world. As of Dec. 2016 the Roku OS powered TV streaming for 13+ million monthly active accounts. Roku is known for streaming innovation and high customer engagement, offering content providers and video advertisers the best way to reach streaming audiences. Roku customers streamed 9+ billion hours of video and music in 2016. Roku streaming players and Roku TV models are available in 10 countries through direct retail sales and licensing arrangements with TV OEMs and service operators. The company was founded by Anthony Wood, inventor of the DVR. Roku is privately held and headquartered in Los Gatos, Calif. U.S.A.
Roku is a registered trademark and Roku TV is a trademark of Roku, Inc. in the U.S. and in other countries.
Global Corporate Communications, IPG Mediabrands
Tricia Arana Mifsud