the top 5 trends in digital media...
TRANSCRIPT
P R O V I D I N G I N - D E P T H I N S I G H T , D A T A , A N D A N A L Y S I S O F E V E R Y T H I N G D I G I T A L
THE TOP 5 TRENDS IN DIGITAL MEDIA 2020BUS I N E S S I N S I DE R I N T E LL I G E N C E
1. Social media will become a primary productdiscovery channel for young people in the US — and
increasingly the way that they make purchases
More people discover products on social than do on retailer websites
Note: Survey was fielded online. Source: ViSenze, n=1,037 US internet users ages 18+, November 2019
10%
39%26%
25%
Digital advertisement
Third-party e-commerce website
Social media platforms
Retailer's website
Platforms On Which US Internet Users Discover Products
.Source (left): Yotpo, n=2,000 US internet users ages 14+ who do at least half of their fashion shopping online, August 2019Note: Survey was fielded online in July 2019, and 63% of respondents were femaleSource (right): ViSenze, 1,000 Gen Z and millennial consumers in the US and UK, August 2018
US Internet Users Whose Most Recent Fashion Purchase Was Inspired By Social Media Browsing
28%
38%
51%
55%
Baby boomers (55+)
Gen X (35-54)
Millennials (25-34)
Gen Z (14-24)
Product discovery via social is particularly common among young peopleQ: Where do you most often discover products?
(Select all that apply.)
8%
32%
41%
44%
51%
59%
9%
24%
47%
46%
57%
55%
An IoT device (e.g. smartspeaker)
Through anadvertisement
A retailer's physicallocation
Third-party e-commercewebsites (e.g. Amazon)
A retailer's website
Social media platforms(e.g. Instagram)
Millennial (24-37) Gen Z (18-23)
And influencers could further popularize the behavior among young people
Note: Survey was fielded online and conducted by Censuswide.Source: Wunderman Thompson Commerce, n=2,001 US respondents and 2,002 UK respondents ages 6-16, July 2019
Leading Influences On Purchase Among US And UK Children/Teens
2%
13%
1%
1%
1%
1%
4%
6%
21%
25%
28%
Other
Nothing/no one makes me want to buy things
Politicians
Journalists
In-store sales assistants
Business people
Athletes
Celebrities
Family members
Influencers/bloggers on Instagram, YouTube, Snapchat, etc.
Friends
In the last year, social platforms set their sights beyond product discovery, focusing instead on
driving in-app purchasing
In 2019, Instagram, Pinterest, and Snapchat became active in that space
Source: Company websites
Examples Of Commerce Features On Major Social Platforms
Checkout on Instagram — Mar. 2019Users can seamlessly purchase a product from a brand’s shopping post without leaving the app
Instagram Pinterest
Catalogs and Shopping Ads — Mar. 2019
Brands can upload their full catalog and automatically convert products into
shoppable Product Pins
Snapchat
Dynamic Ads — Oct. 2019Shoppable ads sync directly with
product catalogs on the app, dynamically update, and are targeted
to relevant users based on their interests and past engagement
And interest in purchasing via social goes up as age goes down
Note: Figures may not total 100% due to rounding.Source: ”The eMarketer Ecommerce Survey” conducted in August 2019 by Bizrate Insights
Interest In Purchasing Products Through Social Media Among US Internet Users
10%
7%
8%
14%
24%
17%
26%
30%
7%
5%
8%
8%
20%
19%
21%
20%
35%
49%
31%
24%
4%
3%
5%
3%
Total
55-65
35-54
18-34
Use it regularly Have used before, but don't use regularlyHave not used, but very interested Have not used, but somewhat interestedHave not used and not interested Don't know what this is
2. Connected-TV will be a core rather thanexperimental part of the advertising mix in 2020
— and with the new channel will come new challenges
Advertisers are increasing spend on CTV faster than on any other device
Note: Digital advertising that appears on CTV devices includes display ads that appear on home screens and in-stream video ads that appear on CTVs from platforms like Hulu, Roku, and YouTube; excludes network-sold inventory from traditional linear TV and addressable TV advertising.
Source: eMarketer estimates, July 2019 (left), October 2019 (right)
US CTV Ad Spend Projections, In Billions US Video Ad Spending YoY Growth, By Device
Note: Includes in-stream video ads such as those appearing before, during, or after digital video content in a video player and video overlays; includes social network instream video advertising in platforms such as Facebook Watch and Snapchat Shows; includes outstream video ads such as native, in-feed, in-article, in-banner and interstitial video ads
$3.37$5.04
$6.94
$8.88
$10.81$12.49
$14.12
2017 2018 2019 2020 2021 2022 2023
49.8%
37.9%
28.2%21.9%
16.7%29.5%
34.0%
24.6%18.8%
12.7%
-3.3% -6.0% -7.4% -7.7% -6.6%2018 2019 2020 2021 2022
CTVMobileDesktop
Advertisers are drawn to its promise of combining audience, contextual, and behavioral data on TV devices …
… and its growing reach compared with other channels
Note: Figures are based on data collected from the company’s video ad server, withthe growth of CTV coming at the expense of Desktop and Tablet devices.
Source: Extreme Reach Video Benchmarks Report, 2019
0%
10%
20%
30%
40%
50%
60%
CTV Desktop Mobile Tablet UnclassifiedQ1 18 Q2 18 Q3 18 Q4 18 Q1 19
Share Of Impressions For A Given Ad Campaign, By Device
But as investment grows, two challenges will rise to the forefront
Challenge 1: A fragmented CTV ecosystem creates measurement and
efficiency challenges
CTV inventory is split across many disparate device ecosystems
Source: eMarketer estimates, July 2019
106.4
86.2
68 64.6
31.6 27.4 24.6
Smart TV Roku Connectedgame console
Amazon Fire TV GoogleChromecast
Blu-ray player Apple TV
US Connected TV Users, In Millions
Note: Users are defined as individuals of any age who use the internet through a connected TV at least once per month. Connected TVs are TV sets connected to the internet through built-in internet capability or through another device such as a Blu-ray player, game console, set-top box (e.g., Apple TV, Google Chromecast, Roku), etc.
21%
22%
22%
24%
24%
26%
27%
33%
Lack of advertiser demand
Lack of incremental reach/overlap with traditional TV buys
Confusion about how audience-based TV advertisingworks/its benefits
Poor performance/ROI
Difficulty with data integration
Lack of large-scale audience
Inadequate metrics/campaign measurement
Cost/price
Note: Respondents could select their top three choices.Source: IAB, 2019
That makes campaign coordination difficult for marketers
Obstacles Preventing US Agency And Marketing Professionals From Using More OTT Ads
Challenge 2: Multi-person viewership will create new risks for advertisers
In the US, 94% of consumption on CTV devices is co-viewed, meaning multiple people are watching at
once — that’s an unproven setting for personalized ads
Source: IAB, 2019
CTV targeting capabilities could be constrained by its communal nature
Some vendors may be providing fraudulent information or data
lacking parental consent for CTV campaigns
Source: AdLedger, 2019
Faulty Data Supply Chain
Potential Issues With Targeted Advertising Via CTV
Embarrassment About Personalized Ad Content
Consumers could grow concerned that their personal interests will be displayed by targeted ads in a co-viewing
setting
Target infamously sent a personalized pregnancy
ad to the family of a teenage girl.
In July, 18% of ad requests for OTT
inventory were fraudulent.
Issue Description Example
3. Facebook will lose young users in the US even faster, and its new apps meant to win back young
people will flop
Facebook has a young user problem in the US
Source: eMarketer estimates, November 2019
US Facebook Users By Age Group, 2014-2019, In Millions
0
5
10
15
20
25
30
35
40
45
0-11 12-17 18-24 25-34 35-44 45-54 55-64 65+
2014 2015 2016 2017 2018 2019Note: Users are defined as internet users who access their Facebook account via any device at least once per month
And while Instagram is popular with young people, growth is at a crawl
Source: eMarketer estimates, November 2019
Instagram Year-Over-Year US User Growth, 2018-2023
0%
5%
10%
15%
20%
25%
2018 2019 2020 2021 2022 2023
0-11 12-17 18-24
Note: Users are defined as internet users who access their Instagram account via any device at least once per month.
Facebook recently launched two familiar-looking apps to reverse this trend
Facebook Lasso Threads from Instagram
TikTok Snapchat
• Short-form video app
• Music-based
• Trending hashtags and challenges
• Editing tools and effects
• Short-form video app
• Music-based
• Trending hashtags and challenges
• Editing tools and effects
• Private, ephemeral messaging app
• Camera-first
• AR lenses
• Private, ephemeral messaging app
• Camera-first
• AR lenses
The social giant’s efforts to replicate the success of these apps among young people will come up short
Snapchat is too beloved by teens
Source: Piper Sandler “Taking Stock With Teens” Survey, Fall 2019
US Teens’ Favorite Social Platforms, 2016-2019
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Fall 2016 Spring 2017 Fall 2017 Spring 2018 Fall 2018 Spring 2019 Fall 2019
Snapchat Instagram Twitter Facebook Pinterest
And TikTok is too popular to displace
Source: The Guardian, The New York Times, CBS News, 2019
We think Facebook will see young users in the US leave at an even faster rate in 2020
Source: Company filings
And that will likely sound alarms, given how critical the US is for Facebook
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
US & Canada Europe Asia-Pacific Rest of World
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
Facebook ARPU, By Region, 2018-2019
4. Publishers can no longer view advertising or subscriptions — alone or in combination — as
sufficient to survive
Facebook and Google — and now Amazon too — rule the US digital ad market
Note: Digital ad spending includes advertising that appears on desktop/laptop computers; mobile devices (phone, tablet, and other); across all formats on platforms. Facebook includes Instagram, and Google includes YouTube. Net ad revenue after companies pay traffic acquisition costs (TAC) to partner sites.Source: eMarketer, November 2019
60.7%
8.6%
30.6%Duopoly (Facebook &Google)Amazon
Other
US Digital Ad Spending Share Among Platforms, 2020
$0
$5
$10
$15
$20
$25
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E
Newspapers Magazines
And print advertising remains in decline
Note: Spend refers to print only advertising. Newspaper ad spend includes classifieds, national, and retail; magazine ad spend includes B2B, consumer, local, and Sunday. Source: eMarketer estimates, October 2019
Print Ad Spending, US, In Billions
As a result, publishers have sought refuge in subscriptions
Note: Figures don’t total to 100% due to rounding.Source: Reuters Institute for the Study of Journalism, n=189 respondents from 32 countries who hold senior positions in traditional or digital-native publishing companies and are responsible for aspects of digital or wider media strategy, December 2019
Most Important Revenue Streams for Publishing CompaniesQ: Thinking about your own company, which of the following statements do you agree with the most? Reader
revenue will be the most important revenue stream going forward / reader revenue and advertising will be equally important / advertising will be most important.
14%
35%
50%
Advertising only
Both reader revenue and advertising
Reader revenue (subscriptions)
But subscription models won’t work for all — just a handful of publishers
Note: Survey was conducted online with a 95% confidence level and margin of error of 3%. Source: Dynata, Business Insider, n=1,000 respondents, February 2019
15%6%6%
9%10%
11%11%
12%12%
14%26%
30%47%
OtherChicago Tribune
The AtlanticThe Guardian
Financial TimesLos Angeles Times
Business InsiderThe Economist
BloombergThe New Yorker
The Wall Street JournalThe Washington PostThe New York Times
Q: Which online publication(s) do you subscribe to?
Every other newspaper, magazine, and digital-native publisher in the country is fighting over this slice
Online Publications US Respondents Subscribe To
There are two nonexclusive routes publishers can take to complement increasingly scarce advertising and
subscription revenue: diversification and consolidation
Nontraditional revenue sources help to lessen reliance on ads and subs
Podcasts E-commerce
Tech/CMS licensing
Events
Selling TV to third-party platforms
Source: Variety, Bloomberg, The Information, Digiday, Business Insider
And publishers recognize the importance of other revenue streams
Note: Respondents completed a closed survey in December 2018. Source: Reuters Institute for the Study of Journalism, n=163 respondents from 29 countries who hold senior positions in traditional or digital-native publishing companies and were responsible for aspects of digital or wider media strategy, January 2019
12%
48%
31%
24%
11%
75%
81%
78%
0%
2%
2%
3%
7%
8%
27%
52%
Donations (organizations)
Events
E-commerce
Related businesses
Donations (consumer)
Native advertising
Display advertising
Subscription
Main revenue focus Important revenue focusHow Strategy Executives Prioritize Publisher Digital Revenue Streams
Meanwhile, M&A among digital publishers ramped up in the past year
March 2019
Bustle Digital Group (BDG) acquires The
Outline
Great Hill Partners buys Gizmodo Media Group and The
Onion from Univision — and rebrands the combined assets as
G/O Media
April 2019
BDG acquires pop culture and music publisher brand Nylon
June 2019
July 2019
BDG acquires science and entertainment site
Inverse
Vox Media acquires New York Media, including New York magazine and O&O
sites like The Cut and Vulture
September 2019
October 2019
Vice Media acquires Refinery29 for $400 million
Group Nine acquires PopSugar for $300 million
October 2019
Source: Company releases, media reports, 2020
May 2019
Dotdash acquires Brides from Condé Nast
And outside of M&A, most publishers think they should cooperate more
50%
67%
71%
Share journalistic resources and output
Sell advertising together
Share tech and back office functions
Q: News organizations have traditionally been competitive, but should that change? Do you agree that they should …?
Source: Reuters Institute for the Study of Journalism, n=192 respondents from 29 countries who held senior positions in traditional or digital-native publishing companies and were responsible for aspects of digital or wider media strategy, January 2019
Publisher Opinions On Collaborating With One Another
We don’t expect publishers to abandon subscriptions or ads, but they will invest in
alternative revenue streams and pounce on opportunities to collaborate or consolidate
5. The podcasting world will become a clear duopolyof Spotify and Apple by year end, with Spotify on
pace to unseat Apple in the coming years
Apple is the leading podcast platform, but Spotify is growing quickly
Source: Voxnest, 2019
Podcast Provider With The Largest Market Share, By Country, November 2019
Podcast Provider With The Largest Market Share, By Country, March 2019
Apple Spotify
Note: Spotify’s total podcast listeners were calculated as a percentage share of the total MAU base at the time Spotify released data on the share of total MAU consuming podcast content on the platform.Source: Company filings, 2020
In fact, for Q4 2019 Spotify reported strong growth in podcast listening
Global Spotify Podcast Listeners, Share of Total Spotify Users
Spotify Podcast Consumption Hours
200%Up
Year-over-Year
35 430%
10%20%30%40%50%60%70%80%90%
100%
Q3 2019 Q4 2019Total podcast listeners, in millions
February 2019
Spotify acquires Gimlet and Anchor
for $340 million
Spotify purchases Parcast for $56 million
March 2019
That’s likely because Spotify has doubled down on its podcasting efforts
Spotify signs exclusive deal with the Obamas’ production studio to create shows for its
platform
June 2019
May 2019
Spotify redesigns its app to push users
toward podcast shows
July 2019
Spotify launches its first themed episodic podcast series using
Parcast’s true crime library
Spotify allows users to integrate podcasts
into playlists
October 2019
November 2019
Spotify launches personalized podcast playlist “Your Daily
Podcast”
Spotify buys The Ringer for undisclosed sum
February 2020
Source: Company announcements
Particularly, it has improved exclusive content and discoverability —Apple’s weaknesses
Discoverability features
Apple Podcasts
Spotify
Indexing
Curated playlists
Recommendation algorithm
Most-Streamed Spotify Originals
1. The Joe Budden Podcast with Rory & Mal2. Gemischtes Hack3. Fest & Flauschig4. Serial Killers5. The Misfits Podcast
Simple web browser: universal accessibility
Exclusive Content
No exclusive content yet —reported in Jul. 2019 that Apple
was looking into originalsSearch based on
full transcripts
Source: Company announcements, Bloomberg
And as podcasting grows in global popularity, Spotify is better-positioned abroad than Apple
Note: Surveys were conducted by YouGov using an online questionnaire in January and February 2019. Samples in each country were assembled using nationally representative quotas for age, gender, region, and education. The data were also weighted to targets based on census/industry accepted data. Source: Reuters Institute for the Study of Journalism, n=about 2,000 in each country, 2019
Podcasting has appeal across many regions of the worldPercent Of Each Country’s Population That Has Listened To A Podcast In The Past Month
21%21%
23%
25%27%
29%
30%35%
35%37%
39%
53%
United Kingdom
Germany
JapanFrance
AustraliaCanada
Italy
United StatesSweden
Ireland
SpainSouth Korea
Android Makes Up Majority Of Global Mobile Market
Source: Global Stat Counter, November, 2019
And Spotify has more potential abroad because it’s available on Android
At best, Apple Podcasts can win this whole slice …
… while Spotify can compete for the whole pie
76%
23%
1%
AndroidiOSOther