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June 29, 2017The map is now the territory
ReportsWe are in the midst of a rapid change in how maps are made and used, from a world of cartographers making records of physical features to sell to consumers and businesses, to one where information about the world is automatically tracked and measured, and built into every service we use. A whole host of industries traditionally unconcerned with geography are being and will be transformed by maps and location, from retail and advertising to finance and insurance. Every business needs to know what maps can offer them. A variety of maps suppliers are jostling for position in serving this growing need: local or international, free or commercial, seeing mapping as a core or side-business. Different suppliers suit different requirements.
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June 27, 2017UK broadband, telephony and pay TV trends Q1 2017: Profit warning [...]
ReportsUK residential communications market revenue growth dipped modestly to 2.7% in Q1, from 3.3% in the previous quarter. This was mainly driven by ARPU weakness arising due to the timings of Sky and Virgin Media’s price rises, but weakness also stemmed from the sustained decline in broadband volume growth and continued new customer price competition.Looking forward, the implementation of an overlapping price increase from BT, as well as Sky’s price increases coming into full effect, should boost market revenues by around 1ppt in Q2 2017, but this will drop away again by Q3. The churn fallout from the communication of these price increases should also dissipate in Q2, benefiting BT and Sky competitively, and making it challenging for TalkTalk to repeat the feat of recovering to positive retail broadband net adds
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June 23, 2017How to sell games: borrowing ideas from Netflix and Apple
ReportsA Netflix-like subscription model for console based video gaming is a big step closer with Microsoft launching a clear and easy Xbox subscription game solution, and it may even work. Sony’s strategy for premium online services across all its businesses remains muddled and complicated, but could be fixed quickly: dropping game streaming is the first step, providing a lower cost subscription service is the second. Google’s admission that more curation in its games app store will be needed finally indicates a better understanding of the games industry, in parallel with the company’s efforts to win over other creative industries
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June 10, 2017BT Q4 2016/17 results: Mobile strength, pressure elsewhere
ReportsBT had a reasonable quarter in its consumer broadband business given market pressures, and a very strong one at EE with continued growth acceleration. It had a good quarter for fibre adoption as well, helping its wholesale divisions stabilise their revenue, but business/IT was weak as expected.Regulatory pressure remains intense despite the (welcome) Openreach agreement, with price cap regulation proposed or due on a range of products, and a regulatory approach which is far from investment-orientated. Pressures in the business/IT market are likely to continue, and pressures in the consumer broadband market are likely to intensify, justifying BT’s current cautious approach to guidance and dividends.
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June 9, 2017UK General Election online: news and advertising
ReportsIn contrast to print coverage, most shared news and opinion content on social media was decidedly pro-Labour this election season, with fake news relatively non-existent compared to the US election in November. Facebook’s role in news distribution has steadily grown and now rivals Google’s, but only a half of the UK’s electorate are active users – for the platform to become decisive in political news would require much stronger turnout among young voters. Facebook was the chief digital ad platform for both main parties, with Conservatives targeting Labour seats, Labour defending them and both adopting a negative tone.
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June 8, 2017Nintendo Switching to a new console era
ReportsThe successful launch of the Nintendo Switch creates a new console model, and demonstrates the staying power and long term value of great franchises. Microsoft reveals the specification for Scorpio, but it won’t be enough to catch up to Sony. New franchises, and probably new leadership, will be the key to stopping Xbox sliding into irrelevance outside North America. Sony’s PlayStation 4 now exceeds 60m units worldwide, allowing Sony more freedom to publish a wide range of challenging creative console games, while VR games continue to gain momentum.
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May 19, 2017Mounting risks to marketing effectiveness
ReportsA partial — if seductively persuasive and impressive — data framework for online advertising combined with short-term incentives have encouraged a dramatic shift in the ratio of brand to activation advertising from 60:40 to 50:50, depressing the pricing of display media. Mounting evidence suggests a focus on quick returns and cheap media at all costs is hurting marketing effectiveness, measured in long-term Return-on-Investment, brand equity and consumer satisfaction. Guarding against this risk requires brand-focused advertisers to create more space for long-term judgement for CMOs, and to refocus agency remuneration towards planning and creative work.
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March 29, 2017SXSW Conference: Deep Machine Learning takes centre stage
ReportsDeep Machine Learning was awarded the Breakout Trend at the 2017 SXSW Conference. We take a deeper look into what this could mean for the future of digital, whilst exploring the other technology on offer at the event. -
March 24, 2017The Future of Wi-Fi – Applications and Revenue Opportunities
ReportsTwo decades after its introduction, Wi-Fi continues to improve and innovate the way we wirelessly connect devices and access the Internet. These improvements will lead to new and emerging markets and applications for Wi-Fi, which in turn will provide new revenue opportunities for carriers and operators. -
March 20, 2017The World of Wearables – Disruption is Underway
ReportsAustralians are willing to adopt wearable technology though high price points and perceived value are limiting purchases. To date, uptake of wearables has been predominantly by early adopters and spurred by niche uses in the health and fitness industry. Industries are yet to capitalise on the full potential of wearables. Some industries have begun to adopt basic functions, such as the finance industry, using it to personalise products and increase payment efficiency. The next growth phase of wearables will be fuelled by artificial intelligence, the Internet of Things and virtual and augmented reality. Significant disruption is expected as use-cases are identified across new and major industries.
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March 7, 2017
Mobile World Congress: a look at tech & media
ReportsSmartphone hardware did not take centre stage at the year’s premier mobile industry event in Barcelona, with license-built Nokias generating as much excitement as flagship smartphones from HTC, Sony and Samsung. In VR, AR and IoT, the most impressive signs of progress were under the hood rather than in flashy device announcements – as the actual use cases become more specific, so does hardware and software. Concrete business applications around the personal data generated by connected mobile devices was a major theme, with new types of automation and personalisation in services and media – and a growing market for security.
Sector AI, Augmented Reality, Internet, Media, Mobile, Mobile and Wireless Technology, Technology, TV. -
February 28, 2017Fashion’s new look: digital sets new trends
ReportsFashion underpins the growth of ecommerce; online took a 14% share of all fashion retail in the UK last year and is set to rise further, challenging the economics of physical retail. Mobile is a key driver, it is changing research and shopping habits, and in turn affecting supplier product cycles, merchandising and marketing strategies. Social media has disrupted the traditional shopping funnel, changing how trends and styles proliferate and shifting the sites of authority and influence in a £66 billion sector. -
February 6, 2017Enterprise cloud on the horizon
ReportsEnterprise cloud computing democratises access to IT capacity ranging from specialised software to platforms to infrastructure, transforming cost structures in sectors like media and retail. Cloud enables unprecedented scalability of bandwidth for digital media services like Pokémon Go and Netflix, while also hosting the back-end for advertisers and retailers. As the industry consolidates quickly, intense competition among Amazon, Microsoft and Google is delivering value to customers and boosting adoption.
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January 27, 2017
Netflix at 10: still growing, still spending
ReportsNetflix celebrated the 10-year anniversary of its streaming service by posting its largest quarterly rate of subscriber growth, adding just over 7m new subscribers in Q4 2016, smashing its own forecast for the period of 5.2m.
5.12m of the new subscribers were for its international services, attributed to acceptance of its growing suite of English language original programs. But growth is just as likely related to the bolstering of overseas offerings with acquired programming, after launching worldwide with relatively small libraries.
While re-establishing confidence after a period of doubt when missing targets in Q2, challenges await; most notably concerns around net neutrality, diversifying content genres, and the open question as to how effectively original programming will be able to carry the service.
Sector Digital Media, Digital Video, Internet, Media, online video, OTT Video, TV, Video Entertainment. -
December 13, 2016
Internet Trends – Consumer behaviours driving market trends
ReportsAs smartphone ownership nears saturation in almost all consumer groups, the base for the UK digital economy is widening: media consumption continues to move to connected devices and use of consumer services on mobile grows. Ecommerce is now responsible for 75% of retail growth, steady even during periods of decline for the overall market. Google and Facebook take up almost 90% of gross online advertising growth this year, and the ecommerce and mobile service markets show early signs of platform concentration. -
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 6, 2016
The Internet of All Things – Towards the Hyper-connected Wo [...]
ReportsThe Internet of Things offers enormous opportunities for Australian organisations to be pioneers in the convergence of operational and information technology. Many organisations across different industries are now realising value in a hyper-connected world. We discuss the nature of the Internet of Things, the current and future adoption rates amongst both consumers and industries, the challenges and issues associated with device uptake as well as the future of the Internet of Things. -
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 18, 2016Snappy birthday: Snapchat’s IPO
ReportsSnap’s IPO is reportedly pressing ahead as expected, suggesting a remarkably early maturity for the company’s advertising business model. Snapchat creatively adapts the tried and true TV advertising formula, focusing on content, context and audience affinity – this goes against the grain of digital advertising and could unlock new brand budgets for online. After an IPO, Snap’s founders would have the freedom to expand their platform with new content, distribution channels and even devices.
November 16, 2016Marketing and measurement in the digital era
ReportsDigital consumption has generated a lot of data in marketing and media and a huge variety of new opportunities for marketers—but insights and intelligence are not growing as much as data points, as a culture of short termism prevails. We recommend the linking of audience measurement and consumer behaviour data, but the industry lacks both standards and trust, while the still-immature digital marketing supply chain poses problems for data integrity. The new data economy has also precipitated a new war for talent, with marketing, media and publishing competing with technology, finance and other industries to attract the best quant and science brains to transition the creative sectors.
November 16, 2016The changing face of the data centre – Enabling digital tra [...]
ReportsDriven by digital disruption, service innovation is going into overdrive as global and local players compete for a share in Australia’s fast growing data centre market. As Australia’s appetite for everything digital grows, the role of the data centre undergoes transformation from a passive hub to an enabler of innovation. We discuss the key areas of growth within the data centre market and how they are likely to change amidst continual disruption.
October 13, 2016Brexit and UK internet privacy
ReportsPersonal data is the fuel of the digital age and the UK is a top producer due to deep internet and ecommerce usage. The EU’s General Data Protection Regulation (GDPR), a key plank of the Digital Single Market (DSM), will directly apply in May 2018, before the date of Brexit in 2019. Upon Brexit, GDPR adoption would ensure easy certification by the Commission for data transfers outside the EU, giving companies another reason to stay in the UK.
