2019 Media Outlook
Well, one thing you can say about 2018 in the media world – it wasn’t boring! The central purpose of paid media – to connect brands and customers in as relevant and efficient means as possible, got both easier and more difficult in the past 12 months.
On the one hand, advances in technology mean that with each passing year, our ability to measure and process data improves, our ability to attribute and optimize grows stronger, and our ability to automate certain rote tasks enables us to do more with less (as long as we trust the machines… although I feel like I’ve seen a movie or two suggesting that’s not a great idea!).
On the other hand, those same forces are erecting new barriers to making those crucial brand-to-consumer connections. More and more media vehicles are shifting from ad-supported to subscriber-based. Every hour spent watching Netflix or Prime Video, or listening to Spotify Premium, is one less hour where marketers can engage with their customers through traditional means. And since these pay services are premium-priced, it is the most valuable eyes and ears – those with the most disposable income – that are becoming harder to reach. Add to this the continuing trend of big companies (think FAANG) continuing to hoard, and occasionally misuse, our personal data, making it extremely challenging to connect the dots for how Consumer A actually came to buy Product B.
So what’s in store for 2019? I suspect these same market forces will continue to be at play, with the largest content and distribution platforms exerting their influence to their own advantage (as they are obligated to do for the benefit of their shareholders). Some musings on what might come to pass in the next 12 months:
Apple and Google Keep Bickering: Google generates most of its revenue from data-enabled advertising; Apple makes theirs from hardware. And the two keep colliding. An example: Apple’s Safari web browser defaults to stringent privacy settings that conveniently prevent Google from collecting data they want to improve their ad products. So Google creates a new website tagging architecture to preserve and collect the data that Apple is trying to block. The result is that advertisers who don’t keep their tagging structure current risk significant blind spots in their analytics. I fully expect this cat-and-mouse game to continue, with Apple remaining focused on security and Google trying to work around Apple’s adjustments. For the end client it is a constant game of catch-up, involving complex coding and site improvements that many just don’t have the resources to handle.
Data Collection Gets Trickier: While GDPR (the European Union privacy rules rolled out last year) didn’t necessarily impact many domestic advertisers, the California Consumer Privacy Act of 2018 (which goes into effect in 2020) most definitely will. (And side note – as I write this, a Senate subcommittee is actively discussing a bipartisan, national privacy bill.) Even without such federal legislation, California is too big to ignore, and most advertisers will not want to have two sets of rules regarding consumer privacy and data collection for their U.S. operations. So expect that most companies will adopt California’s stringent rules across the country. This means more disclosures, more opt-in requirements, and more care taken with any sort of consumer data collection – the lifeblood of digital media. Clients who don’t start thinking about this in 2019 will be caught flat-footed in 2020.
What’s Old Is New: Even though the digitization of everything continues, there is plenty of upside for investing in traditional television, radio, outdoor and print. No CMO gets excited in a boardroom talking about radio ads, but they do get excited about results. And marketing mix modeling continues to demonstrate that traditional media works. Given concerns about online brand safety (think YouTube), accuracy in reporting (think Facebook), and the general draining of dollars to on the tech-toll road (think programmatic), the safety of traditional media becomes very appealing. This explains why, despite continually shrinking ratings, CPMs in the network upfront and scatter market continue to escalate – there just aren’t many places left that can provide both scale and safety, and those that can are highly sought-after. Traditional media has its challenges as well – in Philadelphia TV alone, upwards of $50 million political dollars from 2018 will evaporate for 2019, a trend that will play out across the country – but this means more opportunity for other advertisers to capitalize on the power of these media.
Amazon Ads Explode: It’s hard to say that the biggest company in the world (depending on that day’s stock price) might be underperforming, but Amazon’s ad revenue potential has nothing but upside. Love them or hate them, Amazon has built a kingdom that you can’t help but admire, and the level of knowledge they have about our shopping and browsing habits cannot be ignored. Expect their AMS, AAP and AMG ad products (all recently rebranded as “Amazon Advertising”) to post serious growth in 2019 and to begin to erode Google and Facebook’s dominance in the digital ad space. I don’t see how this doesn’t happen in 2019.
So it will be another “fasten your seatbelts” year in media. CMO demands for accountability and performance will only increase, and their options to divert money from media to other channels will also grow. Consumers will continue to demand more, in service, speed, customization, and access, and they will be less willing to trade their privacy to get it. Yet the mission of paid media remains unchanged – to connect brands with consumers – and do it better, cheaper and faster. The old rule of thumb used to be “pick two of those.” Today, all three have become table stakes.