Emerging Trends in Media in the UK
There are four key trends in the UK media and advertising market which we have identified - a move towards transparency, increased online and mobile advertising balanced by a renewed appreciation of the reliability of more traditional media channels, a change in the way companies approach programmatic advertising, and finally a move towards interactive advertising across all channels. In this report, I will examine each of these trends in detail, examining both what industry experts have to say about each of them, and showing quantitatively the effect they are having on the industry.
By far the most commonly mentioned trend in terms of the content or message of UK advertisers going forward is a strong move towards transparency. Jim Coleman, the UK CEO of We Are Social notes, "Brands are in an arms race to win back consumer trust by providing certainty through absolute transparency - not just glossing over the uncomfortable bits. The consumer desire for transparency is nothing new, but in the era of fake news, mistrust around brands, media and governments has gone into overdrive." In the UK, one of the most important components of this is providing transparency in the origin of products and about supply chain processes. This ties in with trends towards buying locally grown/made products, environmental concerns, and ethical concerns about the people involved in the manufacture of the products we buy.
This concern is reflected across the industry - not only in what marketers are seeking to sell, but also in the way that they engage with advertising itself. When MediaSense polled UK marketers about what they would most like to change about the media industry, "transparency" was mentioned by 47% of respondents, making it the most common response. In fact, a whopping 70% of advertisers polled by the World Federation of Advertisers have amended their contracts with media agencies over transparency issues.
Mobile and Online
Perhaps unsurprisingly, the trend towards online advertising continues, with the internet advertising industry in the UK estimated to grow at a CAGR of 8.2% over the next five years, dramatically exceeding the TV advertising CAGR of 3.1%, so that online advertising will be worth £14.4 billion by 2021. In fact, PwC estimates that by that year online advertising will account for 53% of all advertising spend in the UK.
This trend becomes even more pronounced when we consider mobile advertising and VR sets. PwC estimates that mobile ads will account for the majority of internet advertising spend by 2021, since by that year they estimate there will be a whopping 89 million smartphones in the UK by that year. This view is echoed by Amy Cole, the head of brand development EMEA for Instagram, who wrote in the Telegraph, "It’s essential that marketers think about mobile first and foremost – including the consumer mindset, how the format works and what the messaging should be." PwCalso estimates tremendous growth in the UK Virtual Reality (VR) sector, which they think will be worth £801 million in consumer spending by 2021. This represents an enormous opportunity for advertisers to engage with their audiences in new ways through VR.
However, this advertising shift is balanced by something of a movement back towards traditional media channels in light of increased concerns about media trust. KPMG reports that 2017 saw the largest ever drop in media trust in the UK, and that trust in the media in the UK, as well as 17 other countries, is at an all-time low. They also found that more traditional media channels, such as television and radio, were generally considered more trustworthy than newer channels, such as online news or social media. Interestingly, newspapers seem to fall somewhere in the middle of this divide. 65% of people in the UK report that they trust news that they get from television, and 62% trust news they hear on the radio, but just 46% trust what they read in print newspapers, just barely above the 44% who trust what they read from online news. Social media and blogs fared the worst, with just 17% and 12% of the British public trusting each, respectively. In an age of increased emphasis on media trust and reliability, this could be good news for more traditional media outlets, especially television and radio, however as seen above, that has yet to translate into advertising spending.
Changes in Programmatic Advertising
While online advertising continues to grow in the UK, the precise form it takes seems to be shifting, and in particular shifting away from programmatic advertising. As Marketing Week explains, programmatic advertising is a form of digital advertising in which, "brands or agencies use a demand-side platform (DSP) to decide which impressions to buy and how much to pay for them, while publishers use a supply-side platform (SSP) to sell ad space to brands. These two platforms are then matched up in real time." In other words, programmatic advertising allows advertisers and those who are selling digital advertising space to place ads purely automatically, without any human interaction.
While this method of digital advertising was once on the rise, now 22% of UK brands surveyed by the advertising research firm QueryClick say they plan to decrease their programmatic ad spend in the coming year, and 41% say that they have lost trust in programmatic advertising as a result of ad fraud. Of those who planned to decrease their programmatic ad spend, 46% reported dissatisfaction with the lack of alternative technological options, 41% said it was because of a lack of transparency around costs, and 39% cited a lack of transparency about where their ads would be placed. This fear is quite legitimate - recently ads for major brands including Waitrose, Marie Curie, and Mercedes Benz, among others, were shown on websites related to terrorist activities, thereby funding the owners of those websites, leading 80% of UK advertisers to fear that the same thing might happen to them.
It is worth noting, however, that a full 70% of advertisers polled said they were planning to maintain, or even increase their existing programmatic advertising spend, so this is only a small trend at the moment. Nonetheless, it is getting a lot of attention, and the high rates of dissatisfaction among the industry more generally indicate that it may well spread to more advertisers in coming years.
Another way that advertisers are responding to dissatisfaction with programmatic advertising is by bringing it in-house. Indeed, 65% of advertisers polled globally are increasing their in-house programmatic advertising capabilities. Given the widespread dissatisfaction with programmatic advertising as it is in the UK cited above, it makes sense that this global trend will be reflected in the UK as well.
"Lectures can be good, but dialogues are almost always better", writes Rachel Brown of Marketing Dive. It is this thinking that is driving a current trend towards interactive advertising. A survey of marketing professionals found that 43% planned to use some form of interactive advertising in 2017, up from just 25% in 2016. This makes sense because, as Ronnie Lavi of Innovid notes, "You can more than double the engagement time with the consumer by running interactive video. Once you understand that - and you start calculating your cost per second and engagement - your ROI looks totally different."
Another form of interactive advertising set to increase tremendously in 2018 is advertising by chat. Emily James, Chief Strategy Officer of RKCR/Y&R, writes in the Telegraph, "From chatbots to virtual assistants, conversations with robots will increasingly become a part of our everyday interactions with brands."
In the UK, marketers have been and are continuing to focus on incorporating the GDRP into their marketing efforts, determining their budget, considering Brexit, ethics, and the skill gap. While some details were available for future plans for later this year, the majority of the information is more general and from 2017-16. These details were still included because the future plans from past years like online marketing and transparency/ethical advertising are still relevant today.
As of February 2018, 34% of British adults will opt to have their data forgotten once the General Data Protection Regulations (GDPR) go into effect in May 2018. The GDPR is a regulation that allows consumers the right to have their data erased when there isn't a significant reason fot the data to be kept and This statistic was reported by The7stars, a media agency.
The right to erasure of data applies to marketing data where there is "no compelling reason" (according to the ICO) for the data to be held for longer and is not required for processing,
The majority of consumers have a positive view of the GDPR with 58% believing it to be step in the right direction, and 32% stating that they'll "trust brands with their data after GDPR is in force." This is an improvement from the 58% that "questioned the amount of data that businesses currently hold." Only 19% felt their data was being used in the "best possible way."
In 2017, "Chris Daly, CEO of the Chartered Institute of Marketing (CIM)" spoke on the issues of Brexit, ethics, and the marketing skill gap. A total of 255 UK marketers were surveyed by the CIM. This survey revealed that 55% stated that they were concered the most by Brexit.
According to Daly, marketers were deciding whether to "pre-empt the changes afoot, or simply wait and see." He also noted that patriotism is at a high and consumers are interested in companies that promote British qualities.
On the subject of ethics, Daly reported that 87% of marketing professionals feel pressured to be ethical and to act as a role model. An example of this can be seen in brands like HSBC, M&S, Audi and more that "boycotted Google due to the unethical, extremist content it was serving their adverts next to." Consumers are expecting companies to act ethically and marketers who wish to "gain and retain customers need to create trust between the consumer and the brand, and then strengthen that bond through resilient brand morals." In terms of the GDPR, at the time of the survey, only 11% of companies had initiated plans to become compliant by the May 2018 deadline. With fines as high as €20 billion becoming compliant with the new law is essential.
Chris Daly also reported that nine out of 10 marketers believe that excutives that focus on a marketing specialty lack other business skills. This results in a "detrimental skills gap at the strategic level." To address this issue, Daly suggests that marketers expand their skillset and that teams should include "both generalists and specialists capable of serving their organisation on multiple levels.”
In the Bellwether Report, conducted in the third quarter of 2016 by the Institute of Practitioners in Advertising (IPA), 26.3% of marketers indicated that they would spend more in 2017, 12.9% projected they would spend less, and the remainder reported no changes. From those surveyed, they reported that they would spend almost "10% more on events and online marketing, and 5% more on direct marketing." However, spending on "above-the-line advertising and sales promotions" would decrease by about 4%.
While information on future and current plans for UK marketers was available, minimal details were accessible for the amount of planning that goes into their marketing efforts. This is likely due to the fact that industry leaders and major companies are not required to disclose specific details about their marketing plans. Despite this, according to
Experian, marketing plans focus on "key things that you want your business to achieve over the coming 6-12 months or beyond." Experian is a 125 year old UK-based business, technology, and data company.
The four most important trends in advertising in the UK over the next five years will be a move towards greater transparency, both in the products being advertised and in the way that the advertising takes place, continued growth in online advertising, especially mobile advertising, a change in the way that companies approach programmatic advertising, and an increase in interactive advertising, especially in the form of interactive video and chatbots.