Tag Archives: bbc

The Future of Media with Martin Sorrell

I caught a very interesting discussion about advertising and the future of media last night on BBC Radio 4’s “The Bottom Line”.

Sir Martin Sorrell shared his views about some key issues in marketing and media from an agency perspective, including the future of advertising, the benefits of scale, and how long the present financial crisis may last.

Also present were the CEOs of Vodafone and Eurostar respectively, both talking about the huge impact of digital marketing and media on their business.

The key take aways were:

1. Agency revenues are increasingly tied to consulting fees, and moving away from commissions.

“What we’re seeing is clients looking for us to harness the talent that we have in more effective and efficient ways. We’re seeing clients asking us to put teams together – for example we have a team Vodafone, a team Unilever, a team Ford or whatever it happens to be – to put together the best talent to deal with the issues in the marketplace.”

2. The rise of online and the decline of traditional media vehicles.

“The average client worldwide is spending 10 or 12% of his or her budget on internet. You and I spend, according to the statistics, 20% of our time online, so the weighting should at least be 20%. By the time we get to 20%, you and I will probably be spending a third of our time online.”

The balance has shifted. So TV, instead of being a third in a normal market or worldwide, probably will go to about 15 to 20%. Newspaper and press will go to 20 to 25% with internet, mobile, video content making up the balance.

3. Customer insight is increasingly becoming a viable revenue stream

“For us, there have been three engines. One is the new markets which are now 27% of our business; second is new media or digital, which is now 25% of our business; and third is consumer insight, which we think is becoming more and more important.”

All parties were fairly bullish about digital, and the structural changes occurring in media, feeling that even as existing revenue models collapse from both an agency and publisher perspective, new ones are forming to take their place.

In many cases this has meant a greater engagement with online, although the impact of new media is being felt as much by website owners and digital agencies as by owners of traditional media vehicles.

Link to listen again and transcript.

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Online Video news views surge 600%

Interesting to see online video news views on YouTube increasing by 600% in 2008 according to some reports.

This is significant for a couple of reasons:

  1. Online video is beginning to mature. As users increasingly turn to online news sites for their “print” news, a similar revolution appears to be gathering momentum in “tv” news.
  2. YouTube is moving beyond being an online aggregator of entertainment clips, and into the serious business of competing with more established broadcasting brands. Although much of the video news in question on YouTube is provided by established broadcast brands (i.e. the BBC YouTube channel), so there is a certain circularity here.

The most important take away is that online video is gaining authority.

One of the side effects of this is that online video advertising revenue will increase, as premium brands begin to see the relevance of online TV.

Crucial for companies such as the struggling ITV, but more significantly an interesting step on the path to online video convergence and a viable business model.

UPDATE

Beet.tv has an interesting post on how news videos displayed on YouTube have been organized to be timely and relevant to the news of the day through the integration of Google News into YouTube News.

ITV: Online Video Advertising comes of age

Interesting to see the still troubled ITV finally beginning to monetise their online video inventory.

The stand out development for me is that revenue from online video ads is finally outstripping that from advertising carried in the white space on other areas of the site.

While ITV has been slow on the uptake where online TV viewing is concerned, having been left well behind by the BBC iplayer for one, it is encouraging to see they are finally getting their online revenue stream in shape.

Monetising core content – their TV programs, not the site that hosts them – will be crucial to their survival moving forward.

Online Video viewing figures on ITV.com

ITV COO John Cresswell on cost-per-thousands:

“The CPMs at the moment are very good. CPMs of £35 to £50. Video online is at the premium end of the marketplace. We could have cut the pricing but decided we’ve got a premium product and to hold it.” “Long-form viewing online has increased significantly this year, we’ve seen some drama being watched up to 600,000 times. We’re seeing a significant opportunity there for us.”

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