egta CEO & Top Execs Survey Report June 2017
egta CEO & Top Execs Survey: report of selected findings June 2017 In April 2017, egta conducted a high-level, wide-ranging opinion survey among its 140 members. This piece of research was designed to shed light on the priorities, expectations and forecasts of the leaders of some of the industry’s most powerful and influential companies. The survey sought answers to the following questions: • What direction is our industry (broadcast and advertising) headed in? • What threats and challenges are keeping TV and radio CEOs and top executives awake at night? • What are the most promising opportunities for growth in the coming years? egta’s survey generated a very high response rate, with more than 80% of sur veyed companies ’ senior managers taking part. The following report examines some of the trends that can be determined by analysing the responses of European single-market sales houses , a sub-set of respondents that represents the majority of egta members a nd aligns with the survey’s most comprehensive geographical coverage. Analysis of the complete data-set, which represents the views and opinions of all egta members, including international and non-European companies, is available on request from egta. Concerns, opportunities and competitors European television and radio sales houses rank audience measurement and the lack of a single trading currency , competition from online players in the advertising market and changes to the way young people consume media as their most significant concerns . These concerns mirror the considerable efforts now being undertaken in several markets to modernise television/video audience measurement, as well as the dominance of Google and Facebook in particular in the digital advertising space. Likewise, much of today’s media discussion centres around young people and how their media consumption habits are impacting the media business. Of less concern are some of the issues that are currently disrupting the digital marketplace, such as ad fraud , ad blocking and viewability , suggesting that broadcasters and their sales houses have yet to feel much impact from these. The most significant opportunities for the coming few years centre around two poles: new ways to deliver content to audiences and the targeting possibilities opened by data , while programmatic trading is considered a middle-ranking opportunity. The survey responses suggest that broadcast sales houses do not consider artificial intelligence and machine learning – arguably among the most significant concepts now driving the next generation of data-driven marketing technologies – to be particularly significant opportunities for their businesses yet, suggesting that the television and radio industries are unlikely to be the leading innovators in this field in the near future. When asked to note potential growth areas for the coming few years, respondents overwhelmingly point to digital technologies as offering the most promising opportunities. On the one hand, these relate to digital advertising concepts , such as data , targeting , addressability and programmatic marketing , and on the other
hand, they concern ways to distribute and monetise content , with VOD (subscription and advertising-funded) the term to appear most regularly. Several respondents also see branded content , native advertising , mobile and personalisation as opportunities for growth, along with exploiting new client sectors – e-commerce in particular. Perspectives on the television and radio advertising markets Advertising represents the lion’s share of revenues for most respondents, with a mere 22% reporting that advertising made up less than half of their turnover . Those exceptions to the rule mainly consist of public broadcasters that have other sources of income, such as licence fees, and commercial broadcasters that form part of a larger media entity, such as broadcasters combined with telecoms operators. European television and radio sales houses are optimistic about the future, with more than half (60% for TV, 54% for radio) expecting growth in adspend on their media between now and 2020. In both cases, the majority of these optimistic respondents forecast 0-10% growth over the period. A quarter of respondents (25% for both TV and radio) are rather more pessimistic, forecasting – for the most part – modest declines. For television, the greatest optimism for high growth comes from respondents in Russia, Ukraine, Turkey and Romania, while expectations for the largest decline stem from Denmark and Switzerland. Close to two- thirds of TV respondents’ companies (60%) have been able to increase the price of their broadcast TV advertising inventory in real terms over the past three years, with less than a quarter seeing decreases in price. A similar, if weaker, t rend is seen for the prices of these companies’ online inventory. Most TV respondents expect the price of their broadcast TV inventory to increase by 2020, but they are less optimistic about the prices for their online inventory. A majority of radio respondents, likewise, have seen increases in price for their broadcast radio inventory; however, fewer have seen their online inventory prices increase. Despite this trend, radio respondents are generally positive for the future price levels of both their broadcast and online inventories. Sales house strategies Broadcast, rather than online, remains by far the biggest advertising revenue source for both TV and radio respondents. Overall, respondents from both media expect online to take a larger share in the future, rising from an average of 7% today to 16% in 2020 for TV and from 5% to 15% for radio. These forecasts, should they be realised, would represent an evolution in monetisation strategies and a potential multi-billion Euro shift in the way European broadcasters derive their advertising revenues. 40% of TV respondents indicate that they have recently developed partnerships with telecoms operators , suggesting that this is an important aspect of today’s television business. Partnerships include activities around specific TV shows , content packages , sales on A-VOD and S-VOD and – in one case – the use of STB data for addressable advertising . In a small number of instances, the relationships are deeper, involving buying or taking shareholdings in telcos or undertaking a merger .
39% of all European respondents (representing both TV and radio companies) have either invested in or acquired start-ups . The majority of these relate to digital and data-driven advertising technology in some form, and several respondents note that they engage in media-for-equity deals . Investments in Augmented Reality (16% of TV respondents) and Virtual Reality (21% of TV respondents) are currently relatively rare, and it remains to be seen whether these technologies will emerge as a viable – if niche – business proposition, or whether interest in them will fade, as was largely the case for 3D television a few years ago. Respondents overall indicate that they tend to have at least as much, or more, direct contact with advertisers than they did three years ago. Data strategies Among respondents, the most frequently cited actions undertaken as part of their company’s data strategy include the creation of a dedicated data team , the establishment of first-party data collection and addressable and/or personalised advertising in online video and audio. Fewer than half of respondents indicate that they have prepared for the EU’s General Data Protection Regulation , which is due to come into force in May 2018 and will likely have implications for all European sales houses. While many have recently hired digital advertising specialists , data scientists and social media specialists , only a very few reported that they have hired or appointed a Data Protection Officer , a dedicated position that will be an obligation for certain companies under the GDPR. The use of second and third-party data , and the inclusion of a DMP either as an in-house-developed solution or from an external provider, are among the rarest actions to be undertaken by respondents. More than half of respondents indicate that their companies employ programmatic advertising (which may include automation technologies) for online display and non-linear online VOD . A smaller, but significant, number also employ programmatic for linear/live simulcast online video , online audio and broadcast/terrestrial TV (in some cases, in a test phase). Just under a quarter of respondents indicate that they do not employ any programmatic advertising at all. Research Respondents indicated that, overall, their companies are investing more into research than they were a few years ago, with a small minority reporting decreased investment. High priorities include research into TV and radio effectiveness , followed by audience insights , ROI and comparisons between media . Advertising creativity and – for radio respondents, online audio attribution models – are significantly lower priorities.
29/06/2017 egta CEO & Top Execs Survey Extracted sub-set of data: European single-market sales houses June 2017 Geographical coverage and response rate No. companies represented: Full survey Companies surveyed: 118 Companies represented: 95 = 80.5% response rate Plus: Valid individual responses: 101 Kazakhstan: 1 Presented sub-set of data: European single-market sales houses Companies surveyed: 105 Companies represented: 82 = 78.1% response rate Valid individual responses: 86 1
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