2019: the good, the bad, the ugly…and a weird one
From agency regeneration to the language of contempt, and Sorrell’s thirst for revenge to adspend virtue signalling, Dominic Mills shares his views on the year ahead
My friend with the Tarot cards is busy, so I’ve been peering into the tea leaves (Yorkshire Gold, if you care) myself to take a look at what 2019 holds for adland.
A couple of years ago I vowed in one of these columns to be less grumpy and more positive, only to be told by a regular reader that he disapproved. “My problem with you,” he wrote, “is that you’re not curmudgeonly enough. I want more curmudgeon, not less.”
No second invitation needed, but if my friend will permit I’ll start with some of the reasons to be cheerful – although I can’t go as far as PwC’s Sam Tomlinson on Mediatel last week. Nonetheless, I must be going soft because, to my surprise, I agree with much of what he says.
Good #1. People are paying for media and associated stuff. I know…remarkable, isn’t it? Obviously we know about the rapid rise of Netflix, Amazon Prime (and Spotify subs too) but there are other bright spots out there, and it may be that the habit spreads.
There’s a catch, though, which is that media owners looking to move from ad-funded to a mixed model have to hold their nerve and experiment.
In this respect, we should acknowledge the efforts of, in wildly contrasting ways, News UK and The Guardian. Last summer, digital subs to the Times and Sunday Times hit the 500,000 mark, and by year-end I understand they were up 20% year on year. As of last June, The Guardian reported a paying base of 570,000. Obituaries are premature.
Elsewhere at News UK, other revenue streams are opening up. The Times has extended its Cheltenham Literary Festival brand to the high seas. Yes, really. Cunard is running a cross-Atlantic version on the Queen Mary 2, and 75% of the berths for 2019 have been sold already. The Sun meanwhile is moving into e-commerce via gaming payments and the like.
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Next stop, telly. Page 4 of the new ITV Magazine – covered later under the weird – has a full-page ad for its ad-free catch-up service via the Hub+ service at £3.99pm. ITV’s never really pushed this too hard before, but it seems like it is preparing to give it a go on the basis that it might piggyback off Netflix/Amazon educating consumers about the trade-off between ads and subs. Certainly, ITV is having some success in North America with its Britbox SVOD service in partnership with the BBC: as of September it had 400,000 paying subscribers at $6.99pm. Expect more toes in the ‘pay-for-stuff’ water this year.
Good #2. Agency regeneration. One of the things I love about the ad business, agency-side at least, is the near-constant regeneration or reinvention process that goes on. Where ex-A&Eers James Murphy and David Golding lead, others will take inspiration and say, ‘yes, we can do it too.’
They may be newbies, they may be veterans escaping network hell, they may be earn-out bunnies craving the new new thing…it doesn’t matter. It adds energy and momentum and, hat tip to clients here, there are always some brave enough to give them some business to start with.
There’s a curious paradox hidden in here too. Agencies are often (rightly, IMHO) criticised for their conservatism, whether it’s processes, business models or thinking. Yet it is this very conservatism that creates gaps in the market for nimble newcomers like Murphy or Golding or indeed, now he has turned from gamekeeper to poacher, Sir Martin to jump into.
One of the things that will make 2019 so interesting is to see whether the network agencies, by and large creative, can shed their inherent conservatism and reinvent themselves.
Good #3. At last, in Amazon, a credible challenger to the duopoly for digital £/$ that the industry has long wished for is emerging. Amazon comes without many of the legacy issues – measurement, transparency, hubris and so on – that the others have and there is no indication – as yet – that it wishes to disintermediate agencies. But it is an 800lb gorilla used to throwing its weight around too. Let’s hope that old curse – ‘be careful what you wish for’ – doesn’t become reality.
Bad #1. Big Social/Big Tobacco. Currently under attack on every level, and edging towards the crosshairs of the regulators, the duopoly must feel like Big Tobacco did 20-30 years ago – social pariahs.
The big difference, however, is that while tobacco revenues went into decline as consumers voted with their feet (and compensation payouts soared), there is no sign (see Bad #2) that advertisers are punishing them where it hurts by taking their budgets elsewhere.
And by the way, sticking with the Big Tobacco analogy, those killers are still with us. Legislation has failed to neuter them.
Bad #2. Talk…but where’s the action? Last year kicked off with the sense that advertisers were prepared to step up to the plate when it came to withdrawing ad budgets placed against harmful content, principally on the duopoly platforms. Great, we thought, people with clout taking a moral lead.
But what happened? I wish I knew. The lack of evidence – i.e duopoly revenues falling or those of legacy media increasing – makes it hard to judge whether they followed through. It would be nice if they told us.
In the absence of anything, we must conclude therefore that this was a headline-grabbing piece of virtue signalling. All talk, no follow through.
Bad #3. World economies. As we saw last week, when Apple sneezes, stock markets plunge and the rest of the the world catches a cold. Apple’s particular issue is China – but the latter’s spat with the US is a problem for nearly everyone.
But nor is it the only spectre stalking the world economy. Interest rate rises loom…and then there’s Brexit. No wonder stock markets are nervous.
While it’s true that stock market levels often have little connection with the real world performance, they do have an effect on ad expenditure. Cutting costs is the easiest way to preserve the illusion of profitability and protect the share price, and near the top of any CFO hit list will be marketing budgets. No big advertiser will spend their way out of a share price slump.
Here in the UK, the two most vulnerable sectors right now are high street retailers and car manufacturers, both traditionally big media spenders. It ain’t going to be pretty.
Ugly #1. Language. My thanks to Marketing Week columnist Helen Edwards for her piece on the coarsening of industry discourse, in which she looks at how the language used by the industry makes it look churlish and out of date.
‘Mums with kids’, ‘white bread’, ‘gammon’, ‘male, pale and stale’ and so on.
Personally I don’t mind being described as male, pale and stale – it’s true, if nothing else – but I’ve heard it used to describe audience segments and buyers of some car brands. Not good. The agency in question clearly demonstrated its contempt for an important segment for one of its clients in the use of such language.
Ugly #2. Anyone expecting a truce in the bitter battle between WPP and Sir Martin better look away now. At one time I thought Sir Martin’s second career was about rehabilitation. Now I think it’s about revenge. Whether it’s in the courts, fighting over M&A targets or in pitches, it’s going to be nasty.
For the neutral it’ll be enormously entertaining, a veritable soap opera. For everyone else, it’ll take a big emotional toll.
Weird #1. The ITV Magazine. I must confess to being stunned by the news that ITV was going into the consumer magazine business. You can read about it here.
There’s a certain counter-intuitive thrill in a TV broadcaster turning to print, but now I’ve seen it, I’m utterly confused. It’s available only in Waitrose, and it’s produced by John Brown Publishing, which is the Waitrose/John Lewis content marketing agency.
It’s just £1, or free if you have a Waitrose card. So it’s no money-spinner, just a 92-page promo with high(ish) production values.
But what is it? Editorially it’s more like a lifestyle mag – cooking stuff, travel stuff, sort of fashion stuff – than it is a telly mag. No listings, none. In a trailer for Cold Feet it doesn’t even say when it’s on. And why the Waitrose distribution? Are Waitrose shoppers light viewers, or do they index heavily on ITV? I have no idea. And finally, how does ITV measure success? Tricky one, huh?
I wish I could be more generous, but I give it two issues max.
Curmudgeonly enough?
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Coming up this week…
The Year Ahead is Mediatel’s very popular afternoon invite-only networking event for senior professionals from across the media industry, which sees panellists give their views on key media issues from the year, and their predictions for the year ahead.
Torin Douglas and Ray Snoddy are back and will be joined by Tracy De Groose, Executive Chair, Newsworks and Kathryn Jacob OBE, CEO, Pearl & Dean this year. They’ll share their thoughts on 2018 and a few predictions for 2019, in answer to questions posed by you.