New Digital Age has partnered with Katzy Communications and The Advisory Collective on a research project, The Forecast: Digital Media & Marketing 2020, to discover predictions for digital media and marketing in 2020. Our panel of 23 senior stakeholders was as representative a sample as possible of both our industry (coming from media owner, agency, client, regulator, tech and consultancy background) as well as our society (in terms of gender, age and ethnicity). Contributors to this report, with the full list below, included Lara Izlan, ITV; Phil Livingstone, The Body Shop; Leonardo Oliveira, Vodafone; Jules Kendrick, JICWEBS; and Karen Eccles, The Telegraph. In Part 1, we examined the macro-factors set to affect our industry in 2020. In Part 2, we look at the impact of changes in consumption habits and how a ‘Post-Brexit’ Britain might take shape for our Industry. These questions were issued to our respondents prior to the UK leaving the EU on 31 January. Whether due to ongoing uncertainty, sensitivity or some other issue, a few respondents chose not to answer the questions about Brexit; but those who did had strong opinions. As Phil Livingstone, Global Digital Marketing Director, The Body Shop, said “I think it’s fair to say, we’ve all put plans on hold while this whole Brexit mess is sorted out. There’s been instability for several years and regardless of how you voted, the government’s dithering has suppressed growth, expansion plans and investment into the UK.” Yasser Hussain, UK Country Manager, Exit Bee, summarised the overall consensus on a best-case scenario for post-Brexit, saying “I see the UK growing but at a slower pace. Thankfully services that have easy transborder transactions still represent the bulk of the UK economy. If the government can protect these, we can still do well.” The recent IPA Bellwether report announced the expectation that Brexit would increase both opportunities and spend within the industry. This was in line with general thinking amongst respondents who felt that Brexit would have a lesser impact on digital than on other industries. As Jules Kendrick, Chief Executive, JICWEBS, said “the UK already operates as a standalone entity with EMEA divisions and in its governing structure (JICWEBS, IAB and ISBA are great examples). This will enable tech like AI-driven software to flourish.” Both Paul Frampton, President Europe, Control v Exposed and Tim Hussain, Global Managing Principal, Ebiquity felt that staying as is would mean no meaningful growth but no collapse. Dino Myers Lamptey, Founder, The Barber Shop said that we should be “taking as much time as possible to agree a trade deal with the EU, that is as close to the one that currently exist. Therefore both sides can feel like the doors are still open for free flowing trade, and no one is left with a bitter taste in their mouths.”
Our immediate future This question elicited relief and some positivity. Frampton said, “We are seeing more positivity as there is at least a clearer direction of travel. Uncertainty is the worst for business as it leads to intertia.” Maria Cadbury, Founder, We Are Spring thought that “business has an admirable ability to get on with things — driving growth, creating jobs and economic value and opportunity — but the continued uncertainty and prospect of another 10 months of negotiations to secure a trade deal with the EU will not help anyone.” As Livingstone said, “there is relief all round we have ‘a deal’ but we have no idea what that actually means. The UK is at the centre in so much innovation, technological advancement and manufacturing so, politics aside, there can only be upside. Life goes on, but this time with renewed vigour and willingness to succeed.”
What effect is Brexist having on your business/industry’? We found a 50/50 split between those who said that being in a global business meant that they hadn’t seen any particular impact versus those who have felt adverse effects. Some had already been impacted by clients relocating. Kendrik states that “Investment won’t change immediately but even if a quarter of organisations relocate or put R&D into continental Europe instead of the UK over the coming 5 years then it would be a devastating blow.” Yasser had “just returned from Amsterdam, meeting three major global clients all of whom used to have their marketing function in London. Some great new startups like Seedtag and Exit Bee are European companies choosing to set up In London, but remain headquartered in Spain and Greece respectively.”
The worst-case scenario Leonardo Oliveira, Senior Gobal Brand & Media Manager, Vodafone, Portuguese-born, who has lived/worked in the UK since 2013, pointed to the potential impact on our workforce due to the “exodus of non-UK nationals, and all that would entail if valued members of the workforce end-up leaving”. While Paul Frampton spoke of “trade drying up from Europe and no established trading deals with the Americas or Asia leading to a downturn in the economy and a 2008-like recession.” Of course, recession was the cited as one of the worse possible side effects of Brexit, Kendrick thought we could see “UK GDP down by 2-5% which means we’ll be in recession although not likely to happen in 2020.” And Yasser agreed that “Worst case could be that the very service industries we rely on suffer from slowdown in business, lack of obtaining skilled staff and moving abroad. Should this trend deepen then we can expect perhaps a 5-7 years of zero or below zero real terms.”
Impact on UK exports and investment into UK businesses Not unexpectedly the feeling was that the UK ‘brand’ was at a low point and that our standing with the EU had been damaged. But more importantly as Tim Hussain pointed out “this has resulted in the continued pausing on any significant OPEX investments. Many product-based industries are likely to be negatively affected, and consumers will see prices affected.” Oliveira, thought that “the UK will need to focus on different markets like US, China, India, which will create opportunities too. “Much of the world seems to be spit into those who regard Brexit as an act of wilful economic self-harm, and those who think our departure is a huge opportunity to free the UK from the ever-closer Union of an undemocratic, federal superstrate.”
Future of the subscription model There was a split in opinions as to whether we were reaching a tipping point in terms of the number of subscription services available versus the number of eyeballs to watch the content. According to Dino Myers-Lamptey, “Netflix and Amazon’s catalogue is always on and always available and keeps growing. Viewers are close to recognising that they don’t need any more and they should be scaling back.” Fleur Bennett agreed that with so many different subscription models to choose from, “consumers have too much choice, and not enough money in their wallet, to use them all.” OpenX conducted its own poll in 2019 and the results Gavin Stirrat said were that “88% of consumers polled only had two subscription services. With so many subscription services available and new entrants to the market it seems inevitable that there will be an adaptation in current business models, “Netflix, which has historically relied on licensing pre-existing content in order to drive subscriptions now faces the challenge of creating its own content and supporting the cost of this, while media houses such as Disney and HBO build their own platforms and withdraw content from their competitors” said Nene Harrison from Eley Consulting. Anna Forbes from The Trade Desk thought that “If companies are to continue creating innovative, creative content that keeps attracting eyeballs, they’ll need to look at new ways to fund this — including ad-funded models. That’s the direction we’ll see many subscription platforms go, if not this year, then in the mid- to long-term.”
What’s the future of video streaming? The resounding sentiment was growth, with brands expected to continue to invest heavily in 2020 and video reaching a level of maturity. Karen Eccles at The Telegraph felt that “we’ll see much more focus on storytelling, quality and attention, and the right stories being brought to video on the right distribution platforms.” Oliveira cited the fact that as video was a great format to enable brands to have an emotional connection with their audience we would continue to see more opportunities with formats in this channel. Anna Forbes talked of the innovation that video brings around brand partnerships and product placement. ”This innovation is set to continue, powered by cutting-edge technology out there. We might see, for example, programmatic and CGI combining to alter products on screen to be optimally relevant for individual audience members” Four of our respondents felt there was a real opportunity around CTV. Phil Livingstone cited the US experience and the rise in connected TVs as partially fuelling the rise in video advertising. Although we are still in early stages Gavin Stirrat saw the better integration of CTV services into consumer devices as “creating a much more seamless experience for consumers, driving much higher levels of consumption” Yet the feeling was that if this is to flourish it will be in a walled garden environment. Canton Marketing’s Rob Webster expected “a series of walled gardens to emerge as quality media brands would not want to operate in an open RTB environment for too long”. Let’s not forget the consumer perspective, Paul Frampton talked to the fact that “With 5G coming and fibre getting cheaper, video opportunities will grow. The growing Gen Z audience has a voracious appetite for mobile-first video and snackable content so this presents greater opportunity for reach”.
Audio opportunities “Spotify has done great work leading the charge here, not just in terms of digital and programmatic audio but also the adoption of podcasting”, Yasser summed up what most felt, in terms that Spotify had unlocked the ‘potential’ of audio. Apart from Spotify there seemed little agreement as to who was innovating and how. Global/Dax’s audience was talked about as having great potential but not always the creativity and flexibility needed and some other players in the space such as Audiboom and Deezer seemed shackled by funding. Again the opportunity seemed to be operating within a walled garden environment according to Frampton “Spotify is now a walled garden in itself, with strong data and identity so it can compete in a smaller way with GAFA. This is only going to grow exponentially.” Branded podcasts tell stories that are driven by themes and both publishers and marketers are increasingly recognising the opportunities that exist within podcasts. Eccles said “that relevant and user-empathetic advertising and sponsorships that help fund the production of brilliant content will thrive.” While Fleur Bennet thought “one-on-one targeting makes a lot of sense, and you have a captive audience. In a lot of cases, people are in their cars, so you have their full attention. Brands are excited to layer programmatic on top of audio and incorporate it into their broader digital buy.” Only a couple of our respondents were not as buoyant over the future of audio. Hussain said that the growth was slow and our anonymous contributor thought that though audio worked for relevant pieces of content it was unlikely ever to get a significant percentage of the overall budget spend. We’ll leave the final thought on audio to Dino Myers Lamptey: “what is interesting and disruptive is the onslaught of AI-composed music. The ability to get around rights issues is a huge need, though one that will be a bullet through the music industry.” We hope you’ve found Part 2 of our responses as insightful as you found Part 1 – our final piece will look at the impending Cookiepocalypse, and how the changing tides of our industry might continue to impact the ever-changing dynamic between advertiser, agency and publisher.
Survey Respondents
Lara Izlan, Director of Advertising Data & analytics, ITV; Phil Livingstone, Global Digital Marketing Director, The Body Shop; Leonardo Oliveira, Senior Global Brand & Media Manager, Vodafone; Jules Kendrick, Chief Executive, JICWEBS; Karen Eccles, Director Commercial Innovation, The Telegraph; Rob Webster, Founder, Canton Marketing Solutions; Dino Myers Lamptey, Founder, The Barber Shop; Nene Harrison, Founder, Eley Consulting; Juliet McCutcheon, Sales Director, Channel Factory; Paul Frampton, President Europe, Control v Exposed; Tim Hussain, Global Managing Principal, Ebiquity; Yasser Hussain, UK Country Manager, Exit Bee; Jenny Stanley, MD, Appetite Creative; Amy Williams, Founder, Good-Loop; Anna Forbes, UK General Manager, The Trade Desk; Gavin Stirrat, VP Europe Partner Services, OpenX; Amy Kean, Head of Strategic Innovation, Global Clients, StarcomAnonymous, General Manager, global mobile app analysis company; Morwenna Beales, VP Key Accounts, ID5; Seun Odeneye, Managing Director UK & Ireland, Cadreon; Louise Nylander, Global Marketing Director, Unruly; Maria Cadbury, Founder, We Are Spring; and Fleur Bennett, Senior Director, Strategic Accounts EMEA, Placements.io.