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December 9, 2016Auto classified marketplace: From lifestyle to driverless future
ReportsThis is the third and final report in our annual review of vertical marketplaces (classifieds), focused on used cars, and follows Vertical marketplaces overview and recruitment outlook [2016-116] and Property classified marketplace [2016-119]. Auto Trader continues to dominate online auto listings, accounting for 85% of UK revenues in 2015 by our estimates as total UK online auto spend increased 13%. We believe that growth will slow to -7% this year and low single digits in 2017/18 as Brexit bites and consumer confidence retreats, although used and new car sales have so far remained buoyant since the vote. In common with the other classified verticals we see a period of sustained innovation on the horizon which will challenge the existing market leaders; data provision rather than audience listings will likely become the main source of value to advertisers while further out the advent of autonomous vehicles promises to disrupt the established structure of the entire auto industry. -
December 6, 2016
European digital news models
ReportsPay access now predominates in print-rooted national digital news across Europe, with meters the most popular model. Reliance on digital advertising is retreating. Best of class Continental publishers have roughly stabilised revenue, and the risk of print ad decline acceleration looms – as in the UK. Digital is still typically below 20% of revenue as online advertising CPMs decrease and newsstand buyers are reluctant to migrate to digital subscriptions – on current trends digital revenues will be insufficient to sustain a full-scale newsroom. Emerging innovations include aggregation, bundling (with broadcast, music, telecoms), and youth-skewed spin offs, but execution is uneven. Profitable native digital news sites provide templates for focused coverage at a fraction of traditional newspapers’ costs. -
December 5, 2016
Property classified marketplace
ReportsThis is the second of three reports in our annual review of vertical marketplaces (classifieds), focused on property, and follows Vertical marketplaces overview and recruitment classified outlook [2016-116]. Stamp duty reforms and the impact of the Brexit referendum triggered a -10% fall in UK residential property sales between April and October 2016 and the consensus among estate agents and commentators is that the property slowdown will continue into 2016/17 as buyer confidence recedes. As a result, we expect UK property classified advertising to slip into decline in 2016/17 driven by losses in print, while online advertising growth will slow to low single digitsIn the online market, while Rightmove continues to deliver outstanding financial results from its simple listings model, we believe that a new phase of innovation is imminent. Consumers are demanding enhanced services through data and personalisation, and there is clear potential for virtual/augmented reality and artificial intelligence to disrupt the market in the longer term. -
November 30, 2016
UK digital ad forecast 2016-2018
ReportsThe UK digital ad market has been resilient in the immediate aftermath of the Brexit vote, and set to reach £10 billion in annual value by early next year. Growth is likely to remain strong even in the face of a possible economic slowdown next year, thanks to continuing growth of ecommerce and online media consumption. We expect media budgets to come under pressure, and this could be to the advantage of digital, which often provides better attribution of short term return on investment; we could see a “flight to attributability”. Within digital, growth is concentrated on video, social in-feed and search advertising on mobile, while desktop display is in decline: 2016 will be the first full calendar year when digital desktop ad spend is down year-on-year in the UK. Of this growth, Google and Facebook account for close to 90%, thanks to their leading offerings in the fastest-growing categories.
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November 28, 2016
Vertical marketplaces overview and recruitment classified outlook
ReportsOur annual review of vertical marketplaces (classifieds) is presented in three reports, with the first providing a summary of the key macro trends, technological developments and spending outlook for the total UK classified advertising market followed by a detailed analysis of recruitment marketing; we will look at the property and auto verticals separately in two upcoming publications. Overall, we believe that the UK classified market is poised for a period of sustained innovation as the print to digital transition matures and incumbents search for new revenue streams induced by slowing digital revenue growth and consumer and client demand coupled with increasingly applicable emerging technologies. Across the three verticals we identify voice, video, virtual and augmented reality, user-generated content; and, critically, Artificial Intelligence as potentially disruptive forces. In terms of macroeconomic drivers, we observe that the Brexit referendum has had a minimal impact thus far but believe that economic uncertainty around the terms of the UK’s departure from the EU will prove a significant dampener on revenue growth in the next two years. In recruitment, the jobs market remains in growth despite the initial shock from the referendum and the recruitment industry continues to grow its revenues, up 2% in 2016 by our estimates. However, recruitment advertising spend itself was down -1% in the first half of this year reflecting the saturation of the online market as the print to digital transition reaches its latter stages; online now accounts for 76% of recruitment spend. The pay per listings model of traditional job boards appears increasingly outdated and in the future we believe that recruitment advertising services’ main value will lie in collecting and organising job seeker data rather than charging for advertising space, a view corroborated by Microsoft’s $22.6bn acquisition of LinkedIn announced in June. Meanwhile, the online jobs aggregator Indeed continues to build its revenue share while print brands’ digital revenues fell in both 2015 and H1 2016.
November 2, 2016Programmatic TV’s European Evolution
ReportsDeclining broadcast viewing to the TV set among younger demographics, fragmentation of video viewing across screens, the lack of robust measurement of viewing across screens and the development of online video advertising technology are altering the European TV landscape. Programmatic TV is at an early stage, but has shown its potential with increased audience targeting options and campaign automation: the roll-out of programmatic models and ad technology for European TV advertising have already prompted advertisers to see TV in new ways, beyond its core strengths in mass brand advertising. Automated ad technology can support the existing linear broadcast ad infrastructure; in addition we project a combined potential for annual increased TV ad revenue of €220-300m by 2018 in the seven markets of the study, driven by new advertiser spend on addressable TV advertising and programmatic broadcaster OTT.
August 26, 2016Classifieds Marketing Outlook: All Segments
ReportsInternational opportunities and additional adjacencies have supported the growth in this market. We discuss the current and future market trends including the transition to digital, how the market is entering a new phase through digital, and the success achieved by the leading players.
August 17, 2016Automotive Marketing Outlook
ReportsThe online automotive market is in the fast lane, but speed bumps may lay ahead. We discuss the current and future market trends, including the ongoing transition from print to online advertising, current and future car sales, and how we expect business to be impacted by future market changes.
July 8, 2016Recruitment Marketing Outlook
ReportsAustralia’s recruitment market is both large and growing; supporting the ongoing need for classified advertising. With the print to online migration almost complete, the market is poised for a new phase of innovation and development. We discuss the current and future trends of the market, the key market players and how businesses can position themselves in the ever changing digital world.
June 29, 2016Property Marketing Outlook
ReportsAustralia’s property market remains robust both in terms of house prices and building approvals. This will support ongoing growth in all overall classified and display expenditure by home sellers and real estate agents. Median house prices in metro areas (notably Sydney $780,000 and Melbourne $585,000) are on all time highs having achieved double digit growth rates in the past 12 months. Foreign investors and low relative interest rates has fueled these trends. Likewise the the loans market is very large and continues to grow, though there has a been a shift in recent times towards higher density housing (now around 49%) relative to detached homes.
June 22, 2016Consumers and digital marketing – Challenges and tensions a [...]
ReportsUK digital advertising will grow beyond £10 billion by 2018 by our estimates, representing more than half of all advertising spend and delivering the most advanced large advertising market in the world on a per capita basis. Nevertheless, we see critical issues in digital marketing that are frequently acknowledged, but hard to fix. At the heart of our hypothesis is the view that the marketing industry – brands, agencies and media – has focused on technology and efficiencies at the expense of consumer experience and distinctiveness.June 8, 2016UK news media: less advertising, new models
ReportsThe decline in print display advertising in national newspapers accelerated to -16% in 2015, while growth in digital advertising is slowing, and will be unable to offset revenue decline for the foreseeable future. We believe this decline is structural and irreversible, continuing at a sharper pace than before despite the recovery in the UK economy in 2013-2015, and very different from the cyclical decline of 2009. Publishers must convince brands and agencies that in the mobile era their superior content environments have added value. If scale newsrooms are to survive, costs must be reduced through collaboration and outsourcing.May 3, 2016Content marketing online in Europe to 2020
ReportsPaid placements for content marketing online in Europe will increase by 186% from 2014-2020, to over €2 billion. It is a particularly exciting area for premium publishers, who can leverage their content expertise to reverse the flight of ad money to lower-cost properties. Almost all are developing creative content offerings to capture this value. Metrics and measurement, disclosure and cost remain as challenges for content marketing online, but growth is strong due to high commitment to spend from advertisers.March 22, 2016The rise of platforms and news distribution
Focus Report, ReportsWhat does the Future Hold for News Providers?March 7, 2016Programmatic advertising in the mobile era: direct marketing succ [...]
ReportsProgrammatic advertising is quickly gaining digital market share across the globe. We discuss the key market trends fuelling the rise of programmatic advertising, the expected impact to the advertising market, the value of programmatic advertising within Australia, as well as the issues, myths and opportunities associated with programmatic advertising.
July 6, 2015Content marketing: publishers’ saviour?
ReportsBrands are investing more than £5.2 billion a year in content strategies, £1.2 billion of it with consumer media, and investment is growing at 25% per annum, massively outstripping growth in traditional advertising. Content marketing defies the broader direction of travel in the digital era – response-measured programmatic advertising – by expressing value in content and context, much of it at the top of the discovery funnel. In a rapidly converging marketing value chain some consumer publishers are adopting agency values and practices by responding to the changing demands and expectations of their advertisers.