NEW STUDY BY MAGNA & CHANNEL FACTORY FINDS “MISALIGNED” CONTENT ERODES THE IMPACT OF HARDWORKING ADS

Study reveals some of the most entertaining “misaligned” content can have the biggest negative impact on brand KPIs

 
New York, NY – September 22, 2021 – New research conducted by MAGNA Media Trials, MAGNA’s industry-leading proprietary research offering, in partnership with Channel Factory, explores the layers of content suitability and how it can affect brands’ advertising efforts. “The Proximity Effect: Quantifying the Impact of Misaligned Content in the Wild West of Video” explored what brands need to know about misaligned content in different ad environments, as well as the role proximity plays when it comes to misaligned content.

Misaligned content for the test brands was determined as content that commonly produces visceral reactions in people, including skin conditions (e.g. pimple popping), ASMR (videos inducing autonomous sensory meridian response) and Mukbang (video host consumes various quantities of food). The study recruited users of popular video apps offering different video environments and had the users spend time on the platforms as they typically would (e.g. pre-roll video and video card). Users were served a mix of misaligned content and standard content.

A critical finding of the study is that misaligned content erodes the impact of hardworking ad creative that had proven strong performance in the standard content. In addition, the study found that brands need to be proactive about how to treat misaligned content to avoid diminishing the effectiveness of otherwise powerful ads.

Brands should also keep an eye on popular, trending content to ensure the appropriate steps can be taken to avoid unfortunate brand and content alignments, since not all trending content is suitable for all brands. Content can be categorized as icky, yet it’s engaging and watchable: while people rated misaligned content as less “premium” and more “triggering,” “embarrassing,” and “not safe for work,” most people chose to watch the misaligned content to completion, with 68% rating it as “entertaining.”

Additional findings of the study include:

  • Misaligned content diminishes the impact of otherwise hardworking ads: The impact on purchase intent diminishes when the ad appears next to misaligned content. The study saw a loss of impact on purchase intent (-8%), brand respect (-9%), brand is high quality (-5%), and brand I trust (-6%) compared to standard content.
  • People remember a brand’s ad, but for the wrong reasons: +41% recall ads in misaligned content while +32% in standard content. However, impact on perceptions of brand thoughtfulness (-10% loss of impact) and caring about customers (-7% loss of impact) diminishes when next to misaligned
  • Consumers feel brands shouldn’t be aligned with certain types of content: Many people felt brands who had ads in misaligned content “leaves a bad memory attached to the brand,” and found the content association to be “weird” or “low caliber” for the brand.
  • Brands are held most accountable in pre-roll environments: In a pre-roll environment, brands are more likely to be held accountable for the content they appear next to: consumers were 1.5X as likely to feel the brand endorsed misaligned content in pre-roll video compared to the video card environment.
  • In a video card environment, the closer the ad, the stronger the brand association: Consumers were +10% more likely to believe the brand supported the misaligned content that the ad was immediately next to compared to two videos away. Brand KPIs were most likely to be harmed when the ad appeared immediately before the misaligned content, making it the biggest concern in video card environments.

 
“A major and critical finding of the study is that some of the most engaging misaligned content actually had the worst repercussions for brands,” said Kara Manatt, SVP, Intelligence Solutions, MAGNA. “The industry should continue to learn about the effects of misaligned content and build technologies accordingly to ensure appropriate and aligned placements regardless of the video environment.”

“We understand that content alignment and suitability is a spectrum and can vary by verticals, brands, and campaigns,” said Jed Hartman, President, Americas, Channel Factory. “Advertisers can see immense benefits from taking a deep dive into what their specific consumers’ thresholds are and working with video partners to custom-curate campaign content targeting to drive more positive brand results.”

 

Download the full study

 

About Channel Factory

Channel Factory is a global technology and data platform that maximizes both performance efficiency and contextual suitability and alignment, turning YouTube’s 5 billion videos and 500 hours per minute of new content into brand-suitable, efficient advertising opportunities. Channel Factory’s mission is to create a suitable video ecosystem that connects creators, brands, and consumers – by enabling advertisers access to the most relevant videos, channels, and creators.

Through their proprietary platform that harnesses the power of the deepest YouTube dataset in the industry, Channel Factory has enabled advanced brand suitability, customized content alignment targeting, and maximum performance for the world’s biggest brands. Channel Factory’s algorithm ensures not only that advertisers run against content that aligns with their brand but also delivers outcomes by optimizing campaigns using active and historical campaign performance data.

Channel Factory has offices across the USA and is present in over 30 countries worldwide including the United Kingdom, Sweden, Norway, Denmark, Finland, France, Germany, Spain, Ukraine, Australia, Hong Kong, and Singapore.

About MAGNA:

MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.

We are a team of experts driven by results, integrity and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity and enablement. For more information, please visit our website: https://magnaglobal.com/ and follow us on LinkedIn and Twitter.

 

Media Contact:

Zinnia Gill
Mediabrands
Director, Global Corporate Communications
(646) 965-4271
[email protected]

Magna: U.S. ad spending to surpass $300 billion by 2022

By Alison Weissbrot, Published by Campaign

The latest forecast from Magna shows that the ad spend rebound continues in the U.S.

The economy is still recovering from COVID-19, but U.S. advertisers are ready to spend as people slowly resume normal activities.
Magna revised its 2021 U.S. ad spend forecast upward on Monday as ad spend grew 32% year over year in the first half, reaching $130 billion.

Now, Magna predicts U.S. media owner revenues will grow 23% in 2021 to $278 billion and 12% in 2022, when the market will surpass $300 billion for the first time. By the end of 2021, U.S. ad spend will be 24% higher than it was in 2019.
The recovery was across all major verticals and media types, as advertisers got back into the market after pausing spend during the pandemic, said Vincent Letang, EVP market intelligence at Magna.

“The rebound was much stronger than anyone expected,” he said. “Cases are up, but whether they are vaccinated or not, people are coming back to their pre-COVID lifestyles. This latest surge, so far, is not threatening to derail the economic recovery.”
Recovery was the most prominent (+50% growth) in the retail, automotive and restaurant categories, which are starting to open back up, as well as competitive verticals such as finance and entertainment.

“Some brands have stopped communicating for many months so they need to come back and get back their share of voice,” Letang said. As brands return to the market, digital media is continuing to reap the benefits. According to Magna, pure-play digital ad formats, including search, social, video, programmatic and digital audio, grew 49% year over year to $85.1 billion, with Q2 sales alone up 60% year over year.

Search and social media each grew by 49% year over year in the first half of 2021, while digital audio grew by 51% and digital video pure play by 68%.

Growth was driven by large brands returning to the market as well as small businesses, which flocked online to keep their doors open when stores shut during the pandemic.

“The digital market didn’t shrink last year; it just slowed down,” Letang said. “So we are massively above 2019 levels here.”
E-commerce has been a huge driver of digital ad spend, as the pandemic “triggered an acceleration in underlying business, lifestyle and consumption trends” that are unlikely to revert back, Letang said. Media consumption habits, driven by the shift to streaming and the rise of new social platforms such as TikTok, also drove the digital ad spend growth.

“Now there is almost no product category that is not in the wave of this fast transition to e-commerce,” Letang said. “That’s benefitting digital media, for sure.”

But traditional media wasn’t totally left behind, growing 11% year over year thanks in part to the Tokyo Olympics, which, despite a decline in ratings, brought in an incremental $800 million to $900 million for TV overall. Letang estimates that CPM inflation largely offset ratings declines.

“We still don’t have full transparency into whether streaming viewing offset the decline in Nielsen ratings, but we suspect it didn’t,” he said. “We suspect there is really erosion for tentpole events.”

Double-digit CPM inflation is expected to hold for the Beijing Winter Olympics in 2022, but will eventually have to cool as “a lot of brands will be simply priced out of TV,” Letang said.

Overall, digital is driving much of video’s growth. Cross-platform video grew 20% in the first half, with broadcast media grewing 10%. Meanwhile, spend against ad-supported video on demand on channels such as Hulu grew 41%, and spend against pure-play digital video platforms such as YouTube grew 68% year over year.

Digital is also driving growth in audio and out of home, which grew 29% and 2%, respectively, year over year.

“Increasingly, we need to think of two markets,” Letang said. “Traditional media is growing in a good year, or looking at a recovery, but plateauing long-term. It can grow because of digital innovation, but not significantly. On the other hand, digital will continue to grow faster than the economy for at least the next five years.

Read the full article in Campaign

US Advertising Sales Projected to Hit $278 Billion in 2021 As Recovery Accelerates

By Jason Lynch, Published by AdWeek

Mid-term elections should help push next year’s haul past $300 billion, according to Magna

While the delta variant has disrupted plans for a return to normalcy this fall, it hasn’t hampered advertising bounce back. U.S. ad sales are now projected to increase 23% this year, to $278 billion, according to Magna’s latest quarterly forecast.

Already, advertising spending has jumped 32% in the year’s first half, to hit $130 billion. And Magna anticipates that U.S. spend will grow an additional 12% in 2022, hitting $300 billion for the first time ever, thanks to the mid-term elections and a return to normal business conditions across all categories.

Thanks to overall economic recovery following the pandemic’s onset last year, as well the Olympics in Tokyo spend and a rebound from categories hit hard during the pandemic, Magna has increased its annual projections from its last quarterly forecast in June, when it anticipated a 15% growth in ad sales this year to reach $259 billion.

The 32% increase in 2021’s first half “was caused by a unique combination of national brands reconnecting with consumers and competing for a limited amount of traditional media inventory, while the lasting changes of Covid on lifestyles and marketing methods continue to fuel huge digital advertising spending from both big brands and small businesses,” said Vincent Letang, evp, global market intelligence, Magna, in a statement. “These ongoing organic growth engines, combined with Olympic budgets and the mid-term election spending, will continue to generate double-digit spending growth in the second half and into 2022.”

All of the top advertising categories increased ad spend in the first half, with automotive, finance, restaurants and retail up more than 50% over 2020 numbers. Magna estimates triple-digit growth for travel (up 8% in first half) and entertainment (32%) in the second half as Americans start traveling again and delayed blockbusters are released in theaters.

The automotive, travel, restaurants and personal care categories won’t return to their pre-Covid levels this year, but are expected to reach them in 2022.

Big gains for streaming platforms

Video media ad revenue was up 20% in the first half, reaching $35.7 billion. Broadcast and cable national ad sales grew 10% (to $19.5 billion), while local stations and local cable sales increased 13% (to $7.8 billion).

Streaming platforms saw big gains in the first half: connected TV, OTT and AVOD ad sales jumped 41% (to $2.6 billion) and digital video pure players like YouTube and Twitch increased 68%, to $5.8 billion.

Audio media, including traditional radio and podcasting, was up 29% (to $7.2 billion), while publishing was relatively flat, increasing just 0.8% (to $7.7 billion).

Digital pure players—which includes search, social, video, digital audio, banners and programmatic—saw a 49% first half increase, to $81.5 billion.

Read the full article in AdWeek

Magna Upgrades Full-Year Forecast And Predicts Double-Digit Growth For 2022

By Steve McClellan, Published by MediaPost

IPG intelligence arm Magna has upgraded its 2021 U.S. ad economy growth forecast for a fourth time given what it said was greater-than-expected ad spending in the first half and a strong outlook for the second half.

The firm now predicts that U.S. media owner ad revenues will grow 23% to reach $278 million this year. In June Magna forecast the U.S. ad economy would grow 15.1% in 2021 — up from 6.4% in its March update, and up from just 4.1% when it issued its initial 2021 ad outlook in December 2020.

Magna also upgraded its 2022 forecast predicting an 11%-plus gain and crossing the $300 billion threshold for the first time.

First half 2021 growth was a robust 32% to $130 billion, per Magna’s analysis. All industry categories grew ad spending during the period, with auto, finance, restaurants, and retail all showing gains of 50% or more.

Revenues for traditional media owners grew 11% in the first half while pure-play digital platforms expanded 49%.

Magna reports that by the end of the year spending will reach 24% above pre-COVID levels with a “Covid Recovery Index” of 91 for traditional media and an index of 158 for digital.

Factors driving next year’s growth include what Magna called “return to normal business conditions for all verticals,” a strong macro-economic outlook and spending supporting the mid-term election cycle.

Read the Article at MediaPost

Magna Dramatically Upgrades U.S. Ad Outlook For This Year And Next

By Joe Mandese, Published by MediaPost

Madison Avenue’s consensus outlook for the U.S. ad economy improved dramatically this morning, as IPG Mediabrands’ Magna unit increased its forecast for 2021 ad growth to 23.2%, up from 15.1% in June, 6.4% in March and just 4.1% when it made its original prediction for the year in December 2020. Magna also upgraded its outlook for 2020, and now expects it to rise 11.6%, up from the 8.0% it was projecting in its June update.

Based on Magna’s upgrades, the consensus outlook for the ad industry’s Big 4 forecasting units — also including Dentsu, WPP’s GroupM and Publicis Media’s Zenith — now stands at growth rates of +16.6% for 2021 and +10.7% for 2022.

Importantly, much of the revised growth isn’t just due to easy comparisons with 2020’s ad recession and continuing uncertainty surrounding the COVID-19 pandemic, but is part of a genuine ad spending expansion, says Magna Executive Vice President-Global Market Intelligence Vincent Letang.

“The unprecedented growth in advertising spending in the first half (+32%) was more than low comps due to the COVID lockdown and recession last year,” he states, adding, “It was caused by a unique combination of national brands reconnecting with consumers and competing for a limited amount of traditional media inventory, while the lasting changes of COVID on lifestyles and marketing methods continue to fuel huge digital advertising spending from both big brands and small businesses. These ongoing organic growth engines, combined with Olympic budgets and the midterm election spending, will continue to generate double-digit spending growth in the second half and into 2022.”

Read the Article at MediaPost