Media insights on the launch of Facebook gaming

BY MODCO MEDIAPLUS

In a move to take on Amazon’s Twitch and Google’s YouTube, Facebook launched their own dedicated mobile app “Facebook Gaming” where users can create and stream live gameplay. The app is already available on Android and will soon be available on iOS. We consulted our gaming team for some insights on how this will play out for brands on the platform. 

Facebook lowers the entry barrier with significantly cheaper CPMs

For advertisers, the app will have appeal thanks to Facebook’s integrated audience data, dynamic optimizations, and ease of delivery through their self-managed ad platform. Where Twitch provides premium content against a highly-qualified audience, Facebook lowers the entry barrier with significantly cheaper CPMs. Facebook’s strong performance metrics for video content will also help drive higher view times and completion rates compared to standard in-feed placements. Because Facebook Gaming is app only, Facebook can guarantee 100 percent share of attention on that device and higher ad viewability, whereas Twitch and YouTube have to contend with divided attention and free browsing on desktop.

Advertising opportunities

Gaming is huge, and it’s only getting bigger. It certainly makes sense for the tech giant to double down on gaming-related efforts and move up this launch to take advantage of increased time spent at home. With a captive audience, now is the perfect time for advertisers to test and learn on a new platform.

Article BY MADISON RHYNER AND KEVIN RENWICK

In a future cookie-free advertising landscape, browsers and operating systems will become the gatekeepers of digital marketing. This has serious consequences – much more serious than most people are aware of so far.

Who will decide in the future what advertising we see in the digital universe and when – a few gatekeepers? Or do we want to keep market access more open in the democratic or market economy sense? We are currently facing important questions and setting the course. These conversations will probably have a major impact on digital marketing in the next two decades. And most of us may only have an inkling of what’s in store for them.

How did we actually get into the current situation? The short summary: Too much blingbling on the websites, too many trackers and a too high nerve factor of the buy-me-retargeting. Maybe we as an industry simply overdid it a bit. In response, users have installed adblockers and the legislator has reacted with the DSGVO. The politicians meant well but did it badly! Because now our European or German data protection is absurdly leading to the fact that we are promoting global data oligopolies. These massively restrict our scope for action and our economic opportunities. The fact that “A world without cookies is already a first good step”- as Jürgen Scharrer recently commented in Horizont – I personally consider to be a very naive view. The opposite could be the case: “Cookies out” means “GAFAs before”! The loss of cookies strengthens data oligopolies, maybe even a data monopoly.

On the way to a data oligopoly: Few drilling platforms with exclusive rights

If data is the new oil, then – if we are not careful – a few large US digital “oil companies” will own the sources in the future. With only a few rigs, but very exclusive production rights. I think many in Germany and Europe have not yet really understood the true dimension of this upheaval. Google, in particular, has been very clever strategically in this game.

In the first stage, the attention of regulators was focused solely on the “evil” third-party-cookie. Log-Ins, which contain much more extensive rights to data that can be perfectly linked together across devices, were left out.

Stage 2 presents a solution to a problem that only arose in stage 1: the current DSGVO reality with its content solutions is far too complex and lacking in transparency, both for users and companies. The perfect starting point for Google: Because now in the second step – as the saviour on the white horse – Google is approaching with its initiative of the “Privacy Sandbox”.

And from both a technical and organizational point of view, this is a very interesting approach: a central office that collects and manages all data. An end to the completely confusing sea of service providers who are involved in every opt-in process and who, in the end, can no longer be really controlled. And thanks to Google there is already a suitable infrastructure. The browser or the operating system for mobile use. We are told that the digital advertising world would become simple and controllable again.

But we shouldn’t fall too quickly into the convenience trap. If the market only uses the Google solution just because it is simple, faster and apparently easier, it could permanently block the free path to data. And with it, all opportunities in the future to set up and implement their own business models linked to more extensive data. 

The question of what comes after cookies is so fundamental because under the guise of data protection, a new technical infrastructure is to be created that will shift the usual balance of power in the World Wide Web even further to our disadvantage. In a third-part cookie-free Internet, browsers and operating systems become the central gatekeepers. This changes the nature of the web. In the future, few gatekeepers want to decide what kind of data is available to advertisers, agencies and publishers. And thus, also who can refinance themselves to what extent.

The Black Box decides which data we are allowed to work with

The browser becomes a black box. Everything that is important in terms of data and information for meaningful targeting is measured and generated behind closed doors. If one reads Google’s statements more closely, it seems to lead to a situation that we already know in principle from the video portal YouTube among others. Advertisers learn whether they reach their target groups. But in the future, they will no longer be able to track and verify the results themselves. Only YouTube collects the performance data as well. Control? Hardly possible. What was once an open system based on the division of labour, is now a centrally controlled Internet with a completely different character. In this system, one person in particular learns and optimizes: the gatekeeper. This makes it extremely difficult for us as media agencies to externally monitor performance and adapt existing strategies. Creative in-house developments are no longer worthwhile because the gatekeeper decides which set of data is made available.

Of course, you can accept this attractive offer from Google. One should only be well aware of the possible consequences. Because afterwards, nobody should claim they didn’t know.

The Internet is just the beginning, mobile follows and TV is coming soon

Online the weights have already shifted. That’s just the beginning, because in today’s digital ecosystem, everything is connected to everything else.

The largest browser, for example (Chrome), belongs to the globally dominant advertising network Google. And Google also provides the dominant mobile operating system – Android. From this perspective, the oligopoly of browsers mentioned at the beginning quickly becomes a duopoly of operating systems with a rather small player (Apple with iOS) and an overpowering player (Google, for example, has a 76 percent market share in Germany with Android). And it will by no means remain with desktop, laptop and smartphone. This expansion of operating systems will have consequences for advertising on all screens, especially television. As a result Google, a company with a market share of around 80 percent in the western world, would dominate the two largest advertising media worldwide because it controls its revenue processes.

The discussion about cookies, browsers and operating systems is therefore not only an issue for the Internet in the narrower sense, but ultimately affects our entire media and advertising landscape. It is also a cultural debate. Perhaps even the most fundamental one we are currently conducting. It is about refinancing the content that is the basis of our democratic society. Do we regard the Internet as a public space, with the possibility of participation by many citizens and companies? Or is it becoming a purely economic infrastructure dominated by one or a few US corporations?

It is high time that we in Germany and Europe intensify this debate. We Germans, in particular, sometimes tend to lose ourselves in debates about the industry that are too small-scale. It is time to think bigger together and develop serious alternatives!

There has been a lot of talk in recent years about the topic of media agencies and how they have to develop and position themselves. The answer is basically simple: The media agency of the future is a media agency – not a management consultancy, not a technology start-up and not a creative digital agency. Although all these related disciplines have been trying to penetrate the domain of media experts for years, this has not been crowned with lasting success yet.

Best examples are Blackwood Seven or SAP XM. Both providers, come from the pure technology and software side, and were hyped by many industry participants as the media agency model of the future. Algorithms and programmatic advertising instead of people should take the lead over media budgets. It was an exciting experiment, but the revolution did not happen – both companies have since withdrawn from media consulting. The all-encompassing algorithm, which can optimize everything from old clothes to cell phones, insurance, sweets and cars, simply doesn’t exist. And peta, exact or even zeta bytes of data do not change the fact that good media planning requires not only algorithms, but also experience and tools developed from this expertise.

The future naturally lies in (partial) automation. Without smart data, AI, programmatic advertising, individualized control of creation, and tools that work more or less automatically, no agency of the future, even of the present, will function. But if you want to be as creative as you are effective in media planning, you have to employ people with knowledge and experience in a wide range of disciplines in addition to your colleague computer. People who are capable of abstracting beyond the experiences made and of creating something new. Machines are still having a hard time here as well as agencies that are too focused on one discipline.

In the future, it will be essential for media consultants to look outside the box in their own discipline. There will continue to be agencies for very specific niches, such as employer branding or e-commerce. However, the media future belongs to the generalists and not to the specialists or rather: it belongs to a task force of differently positioned specialists, which can be put together individually according to the task and goal of the customer. Agency models such as the House of Communication, which combines all service providers under one roof and has been operating this type of collaboration since its inception, have an advantage here over companies that are only just starting to work in an integrated manner. And independent agencies score points over listed network bolides when it comes to the speed and flexibility with which they react to market developments.

Flexibility and speed regarding customer requirements is one thing, but the size of the company required to be able to implement these is an equally decisive factor that will separate the wheat from the chaff in the market. Investment in manpower, technical equipment and research is immense – which is why the tendency of smaller agencies to slip under the umbrella of more powerful partners, unless they have found their very special niche, will continue to increase.

The challenges that digitisation, the fragmented media landscape and the resulting individualised media use pose to planners are too diverse. The more data and information about the individual is available, the clearer it becomes: Mass communication as we know it from the past no longer works. It has been replaced by individual mass communication. Socio-demographies have had their day. The typical “man aged 14 to 49” no longer exists, nor do “householders” or the much-cited “best agers”. The stereotypes of the past are no longer applicable, for example; men are interested in cars, women in cosmetics, young people are modern and open-minded, old people are traditional and old-fashioned. If we look at people of identical age, place of residence, education and income, they tick completely different boxes.

In times of individualisation, easily accessible information and increased life expectancy and opportunities, values have become our distinguishing feature. What motivates people? What drives them? In order to describe this world of values, the so-called “value sphere”, 360-degree tools are needed that can assign specific values and people to specific media and thus create a value map of the target group. And this is where the algorithm comes into play again. The media agency can bring both aspects together: data and target group expertise to create messages tailored to each recipient.

This does not mean that mass media such as TV or OOH are obsolete per se. They only need to be supplemented by individualised messages and replaced where necessary. This can only be achieved with appropriate tools – tools like the Brand Investor, which the agency of the future does not buy, but develops itself based on its expertise and existing skills. The Brand Investor is the first AI-operated planning tool that manages the communication mix on basis of marketing goals and target groups across all media. 19 media genres are considered – from TV to advertising papers and affiliate marketing.

One thing is clear: the agency business has changed radically. New technologies are giving advertisers the opportunity to depict classic agency services themselves. In particular, with the increasing spread of programmatic advertising, digital-savvy and large companies are taking the path of anchoring media planning in-house. This development is a good thing, because this way advertisers are developing a better understanding of agency work. In practice, however, it often turns out that the strategic and, in many cases, also the operative know-how is missing to work successfully. Not to mention the experience that agencies gain from the overall view of all their clients. Technological development is quite simply progressing too rapidly for us to be able to keep up to date without any problems.

So how will media agencies earn their money in the future? What does their business model look like? Of course, purchasing power and the associated good conditions remain an important factor. And this is exactly where automation plays into the agencies’ cards, because it helps to implement more efficient media planning. But (strategic) consulting will increasingly become another mainstay beyond media. Advertising companies today need a partner who supports them in the development of a promising strategy, accompanies implementation across the entire range of communication and is also available later on for operational support if required. They need tailor-made technologies, specialist knowledge and many years of experience. You need researchers and creative and data specialists. In summary, you need an integrated (media) agency.

First things first, individually, the trends for 2020 do not hold any unexpected surprises in store. However, there is something that is much more surprising this year: the pressure to act that more and more trends are forcing on brands. The heat is on, and not only for the keyword of ‘purpose’ – as many trends are combining for greater impact and need to be discussed as such. 

At the start of every year, countless experts give their forecasts on the most important trends for the new year. For the fourth time in a row, we have conducted a meta-analysis for the new year based on these trend forecasts. This year’s is based on 40 different forecasts, and we have taken a close look at what the experts have to say about developments in media, marketing and tech. The sources range from renowned trade journals to management consultancies and agencies. From this colourful bouquet of trends we, the experts from the Mediaplus Trendhub, first identified, filtered out and then grouped together the most important topics. The trends were then evaluated in terms of their general relevance for brands. The result of all this was the Urgency Trend Radar 2020. It is made up of five main blocks in which 44 relevant trends are positioned on a heat map by relevance when it comes to action.  

Even if – as already mentioned at the outset – no individual trend necessarily seems ground-breaking in itself, together these trends create an unprecedented explosive force for marketers. The five main trend blocks for the new decade are: Purpose, Super User, Content Experiences, Platform Economy and Private Personalisation.  

Purpose – a topic it will be hard for brands to ignore this year 

The year 2019 set the course: Trust, sustainability and a clear stance were topics that attracted considerable media attention. In 2020, these topics will be increasingly transferred to corporate communications: Clients expect clear positioning and an open commitment to current social values and issues. At the same time, consumers will become much more sensitive and critical of any form of “woke washing”, where brands do not take real action when it comes to the attitudes they portray for marketing purposes. Brands are now increasingly asking themselves if they need a purpose and how they can communicate this effectively.  

Super Users – their influence is becoming increasingly dominant 

Super users have a disproportionately strong influence and determine general interest. Compared to the overall population, these are relatively small groups of power users, but their consumer spending, media usage time and opinion-forming influence far exceeds that of regular users. But who are the super users relevant for my brand and how can I use their power of influence effectively? 

Content Experiences – the key to generating interest 

Our clients’ interest is a rare commodity. For this reason, experiences that brands offer their customers will be an essential key to success on all touchpoints. The transformation from analogue to digital experiences will increase significantly this year. How do you create relevant brand experiences in an age of booming short form videos and podcasts? 

Platforms – increasing their reach  

Platforms have established themselves as the central business models of the digital economy. Amazon, Uber and Facebook are prime examples. But the long-standing dominance of US tech companies is now being challenged by Chinese competitors like Alibaba, Tencent and JD. In 2020, companies will have to adapt and shift more of their activities to platforms. What consequences does this have for the customer journey and why are e-sports platforms becoming increasingly relevant for advertising? 

Private Personalisation – an unresolved challenge  

A new era is dawning for the digital advertising industry. Privacy, data security and trust were already key issues in 2019. This year, the advertising and communications industry will have to look for ways to achieve the same level of personalisation and measurability with less data. But an ideal solution for this has not yet been found. What role do AI applications and new SSO solutions play here? How can data storytelling survive in an increasingly cookie-free time? 

If you take a look at the development of trends over the past few years as a whole, it quickly becomes clear that there has been a major shift from tech and gadget trends to social and strategic challenges. And the world of trends is becoming even more complex. Just like consumers, brands also have a number of different options open to them. There are more and more options to be tried out and attract clients with new, profitable stimuli. But not all decisions will lead all brands to success in the same way. For this reason, a professional evaluation of brand-specific opportunities and risks is essential. 

In the “Deep Dive” format, experts from the Mediaplus Group immerse themselves in the world of marketing trends and provide in-depth insights into current challenges: how can trends be categorised socially and economically, and how can problems be addressed with an interdisciplinary approach? Magnus Gebauer, Group Head Trendhub at Mediaplus, sheds light on this with his article on the evolution of hybrid consumers.

Jane and John Smith are facing an identity crisis. While they used to fit perfectly into demographic characteristics, average buying behaviour and value categories, contradictions are increasingly appearing in their lives. Just recently, though, Jane has been attributed a split – almost schizophrenic – consumer existence with unstable consumer patterns. As she is concerned about sustainability and shopping locally, she buys her food from the local organic shop. However, avocados and other exotic superfoods also make their way into her basket on a regular basis. John also feels that things are no longer as simple as they used to be. While reading an article on the consequences of the Facebook privacy scandal, he found himself accepting the website’s cookies information without hesitation.

What the Smiths perceive as an identity crisis has for some time been described by marketers as the erratic and contradictory behaviour of hybrid consumers. A look at current trends reveals that there are more and more of these contradictory developments. We are now at the centre of the so-called battle of contradictions. Sometimes the battle appears in just one person, or other times it is apparent in an entire target group, which only seems to work uniformly.

From a marketing point of view, the challenges in consciously addressing the target group are growing. At the same time, opportunities also arise when brands get involved in current trend themes. Contradictions are not only evident in terms of consumption, but also in social life and media use.

For this reason, we are taking a look at three current contradictions from society, consumption and media use and pitting them against each other based on their significance for marketing and media. Which trend is the most relevant? What are the challenges? How can marketers take advantage of the trend?

JOMO vs. FOMO

FOMO (or the fear of missing out) is known from the world of social media. As an antidote, JOMO (or the joy of missing out) is the conscious decision to enjoy missing out on something – both online and offline. From a marketing point of view, FOMO is more relevant. Seven out of ten millennials experience this feeling on a regular basis. The trigger possibilities of the “FOMO Sapiens” simply offer far more scope from a marketing point of view – just think about the effect of temporary stories, the effect of artificial scarcity on booking portals or strict time limits. And in practice? Black Friday, Cyber Monday and Singles Day are the best examples of the impressive effect of FOMO logic. Played at the right moment, however, JOMO also offers a creative playground, especially with regard to contextual messages in the up-and-coming digital wellness cosmos – Dominos UK provides proof of this with its  “The Official Food of JOMO” advert. In a humorous way, they position their pizzas as an alternative to the FOMO lifestyle.

Ethical Consumption vs. Convenience

Climate change and movements such as Fridays for Future are bringing ethical-sustainable consumption into the consciousness of the masses. Well-known green issues such as organic and local are gaining in importance, while new issues such as flight shame and data shame are emerging. At the same time, there are few consumers who want to do without convenience products – but these are usually not particularly environmentally friendly. Brands cannot ignore any of the issues, but sustainability is a must and convenience is an additional option. Sustainability communication requires a clever balancing act between credible brand positioning – especially for non-green-born brands – and avoiding the greenwashing trap into which Deutsche Bahn recently stepped with its green ICE paint. Brands have a number of options available to them to be able to achieve convenience: Nestlé offers an Alexa Skill for young parents that makes everyday life easier. Rewe, Edeka and other supermarkets advertise with the fact that customers can withdraw cash free of charge as a kind of value-added service in stores, and Lufthansa implements data-based dialogue marketing in the form of personalised newsletters.

Glossy vs. Real

On social media in particular, the image people – and also businesses – present is especially important. On the one hand, there is the desire to be presented as perfectly as possible, while on the other hand the appearance should also be authentic and real. After all, Instagram’s #nomakeup hashtag features 18.3 million posts. The bottom line in this battle of contradictions is that glossy – the faked, perfect self-portrayal – is still a contender, because artificial and staged images still dominate the media. But it is precisely in the flood of “instagrammable” posts that carefully arranged bowls and walls no longer really stand out – Gen Z has grasped this fact and staged itself in a refreshingly authentic way.
From a brand perspective, real and unembellished staging can also have a stronger effect on attention. The successful Real Beauty campaign by Dove has been using the “No Digital Distortion” mark in its visual communication worldwide since the beginning of the year. To create a modern brand presence on Instagram, it is worth being both glossy and real: you can present yourself and your products filtered and perfectly staged, but you should not forget your personal touch. The American make-up manufacturer Glossier has mastered this almost to perfection.

Contradictions don’t make the world worse, only a little more complicated. This can be transferred to direct customer contact. In addition, not all solutions can be found in media communication – products, sales and customer service are also decisive building blocks and should be included in overall strategic considerations. It is important to be open and bold in the face of these contradictions and to see them more as an opportunity for versatile, authentic communication.

Holistic agencies not only observe current trends, they also analyse and evaluate them based on their relevance for their customers. On this basis, they will be able to react quickly to consumer trends and create innovations from them.

A new decade is always a good time to rethink old habits and draw up new plans for the next ten years. Or so you’d think if you took time to read the – presumably intentionally? – unassuming, but nonetheless still very much evident posts published by Google over recent days and weeks.

Because what these messages describe, albeit in a very convoluted and in some cases quite innocuous way, is nothing less than the end of an era, and indeed the end of a technical tool that has had a significant impact on the operation of the internet as we know it: the cookie.

Anyone who works or has found their calling in the digital world and has been in this game for more than three months should theoretically be aware of what cookies can and can’t do. They should also have a rough idea of what purpose cookies serve on the internet – and what stops working when cookies are removed.

Just a few months ago, Firefox gave us a little taster – let’s call it the blast wave before the barrage of fire, if you’ll forgive us for expressing it in such warlike terms – of just what a world without cookies could look like. This preview suggested – in an equally quiet and unassuming manner – that cookies belong to the dark side and continue to be a thorn in the side of users wishing to maintain their privacy. As a result, cookies are blocked in the browser’s default settings from v.69 onwards. This is remarkable for two specific reasons:

  1. Firefox has a market share of 25%, in Germany at least.  In other words, this is hardly a tiny niche concern, but a quarter of German users, who, more or less by default, have lost the right to decide whether they agree to have the internet refinanced by targeted advertising – or not. I’m not disputing the fact that, had these users been asked the same question, they may very well have answered along the same lines – i.e. “Thanks, but no thanks”. However, the consequences of the no-cookie policy will unfortunately lead to more advertising, not less, and this advertising will very probably be much more intrusive – something I fear that very few users, and possibly even Firefox developers, will be aware of. It isn’t always easy to drill down to the truth of the matter.
  2. Nevertheless, when we look again, something far more interesting and at the same time quite revolutionary comes to light: the browser is promoting itself to the role of a regulatory interface, with the power to make future decisions on the types of data that advertisers, publishers and agencies can publish – or not.

Just take a few minutes to let that sink in. In other words, imagine if the government were suddenly no longer responsible for deciding whether you need a visa to travel to another country and what you need to do to get the visa. Instead, these powers would be transferred to the airline you’re flying with. In one fell swoop, the browser is morphing from a platform offering access to the web, to the role of a customs officer deciding what information can be provided to whom and in what form!

You might well say that’s not a problem because surely the user can use another browser if they aren’t happy and, in any event, isn’t the browser doing a really good job because it’s stopping me being spied on?

But is that actually the case?
Which brings me right back to where I started: last week, Google targeted certain business circles to announce its vision of the future of Chrome and whether it intends to continue using cookies the same way or to stop using them. This time, we’re not just talking about 25% of the German market, but a rather more substantial 45%. Which in turn means that if Chrome makes a major change, the market itself will be bound to follow.

And this change is the crux of the matter:
Google currently needs so-called ‘third-party cookies’, otherwise known as pseudonymised identifiers, which not only represent an extremely relevant business model for Google – the Google Display Network – but also keep the entire online advertising world, as we know it, in business. This is why they are saying they will still support cookies for the next two years, whatever happens.
BUT – and this is a very big BUT: Google is working in parallel to provide an alternative to the cookie – the so-called Privacy Sandbox. Until they show their hand, one thing is clear: their aim is to establish the browser as the ‘privacy police’ with the ability to decide what information about the user, or the website the user has visited, can be passed on to others or used for targeted marketing (targeting).

This is further evidence that Google is shoring up its silo mentality, allowing Chrome to become a separate compartment in the Android-Google world, which also assumes that advertisers and users who allow Google to access their data will benefit accordingly. Those who don’t comply will be penalised, either by fewer targeting opportunities for the hapless advertiser, or more and less appealing advertising for the errant user.

Admittedly, you could say that Google is just a supplier and the market will retain the option to create an alternative system alongside the Google vision. However, this initiative also has the support of the World Wide Web Consortium (W3C), as well as data protection authorities, who are clearly set on creating a whole new standard for the world wide web without cookies, not just a Chrome-based solution.
But is this kind of technical rehash of the fundamental aspects of internet advertising either right or reasonable?
Should we be honest and channel the German Chancellor when she said that we probably have no alternative if the industry wishes to continue to expand under the terms of the GDPR, gaining increased user acceptance as it does so?

And what does this mean for the industry?

  1. The third-party cookie will be no more
    And this could happen quicker than we’d ever thought possible. We all need to seek out alternatives, because there’s no doubt that, without cookies, we’re all going to be subjected to more, ever poorer quality advertising. In an effort to prevent this turn of events, we also need to reinvent ourselves: identify new targeting opportunities, other ways of addressing our target market, other efficiency criteria in the assessment process. In some areas, we’ll more or less have to start from scratch.
  2. The browser’s role as gatekeeper is nigh
    Like it or not, the browser will see its role in the technology chain ‘upgraded’ – and that’s putting it diplomatically. This will lead to a sequence of events that we need to monitor extremely carefully: to what extent can browsers, which currently purport to be neutral, still claim to be neutral in the future? Or is it more likely that they will become a hidden, but absolutely essential cog, or economic level, in the overall ecosystem?
  3. The competition authorities need to take a closer look
    Of course, going crying to the authorities always sounds a bit lame, like appealing to the referee in a particularly fraught match. But it really makes sense in this situation: let’s take an in-depth look at what would happen if a company like Google, which already dominates the market in certain areas, suddenly decided to use the browser mechanism to regulate data flows to its own advantage? Especially if this was ultimately with a view to granting better access to this data to people working behind the scenes with other parts of the group. It’s hardly a waste of time to give this scenario more than a cursory glance!
  4. More cooperation and less of the silo mentality
    All our business models require us to establish a process with which all market participants can engage, and which are not defined by a limited number of key players in informal groupings. The IAB’s Transparency and Consent Framework (TCF) is a truly outstanding example of this kind of approach, a framework solution built by the industry by cooperating with the major ‘silos’ represented by the publishing and advertising industries.

Is this reason enough to take a pessimistic view?

No, but it is a good enough reason for us all to get involved, be it in associations, interest groups, in our own companies – working alongside our customers and our own competitors in the marketplace.
We must find a way to ensure future business models that no longer allow individual players to turn into monopolies, while at the same time allowing users to surf the web with their privacy intact. We don’t want a return to the dark days of the late 90s, when the online world was most certainly not a very pleasant place to be…

As an agency, this is something we will need to come to terms with, as will all advertisers and technology suppliers, whether it means rediscovering virtually extinct targeting opportunities such as contextual targeting, or by working more closely with first-party owners like individual publishers and publishing houses, or whether it’s by placing more emphasis on the use of content integration and cooperation.

One thing’s for sure: online advertising is not going to disappear any time soon. It’s far too relevant a channel to slip by the wayside – and usage has become much too widespread in recent years. Advertisers cannot (and will not) relinquish the opportunity to address specific target groups now they have it in their grasp. However, it remains to be seen whether they can be addressed with the same quality and in the same quantities in the future. My view? I don’t think this will ever be possible, but the users have made their decision so now they have to live with their consequences.

Let’s embrace the new decade – and everything it holds!

Why have we been talking lately about a new golden age for audio?

In the “Deep Dive” format, experts from the Mediaplus Group immerse themselves in the world of marketing trends and provide in-depth insights into current challenges: how can trends be categorised socially and economically, and how can problems be addressed with an interdisciplinary approach? Dominik Kropp, Senior Media Analyst at Mediaplus, sheds light on this with his article on the new golden age for audio.

Hardly anybody would deny that video today is booming. The range of video available has never been so varied, and with the market entry of yet more providers planned, this diversification shows no sign of slowing down. But can the same be said of audio? Where’s all this talk of a new golden age for audio coming from? Radio has been around forever and continues to be there, in the background. Let’s start by getting one thing clear: audio is much more than just radio. Innovations have changed the market and taken it forward – or, more specifically, innovations in the following areas: devices, platforms, and content. The main topic of conversation right now is the development surrounding the second podcast wave. Although podcasts have actually been around since as early as 2004, it’s only in more recent years that consumption of the form has really taken off.

With the growing proliferation of smartphones, mobile consumption of online audio offerings has risen significantly; after all, smartphones are our favourite device by far. Interest in online audio content has also been boosted by smart speakers and new digital applications for cars. These new devices have succeeded in making audio more personal and interactive.

In terms of platforms, it is mainly streaming services like Spotify, Amazon, and Apple Music that have served to expand podcasts’ media portfolio. These are used by almost 80% of people under 30, and by around 40% of the entire population according to an ARD/ZDF online study. These partly ad-free services are even drawing usage time away from other offerings, although they aren’t replacing them entirely – fully ad-compatible conventional offerings continue to be relevant. The usage situations associated with each format are quite different. On the one hand there is the largely mobile usage of streaming services on smartphones, and on the other there is the strongly habitual, mostly passive pattern associated with listening to conventional radio.

The YouTube of podcasts?

When it comes to innovative audio content, one topic is very much at the forefront these days:  podcasts. Interest in the podcast market has been boosted to a new level by recent massive investments by Spotify. The Swedish company’s aim is to become the world’s No. 1 podcast platform. With the acquisition of Gimlet, Anchor, and Parcast, Spotify is not only pursuing the goal of further setting itself apart from the competition with its offering of exclusive content, but also of bringing publishers and creatives directly to the platform. Corresponding self-service solutions for podcast producers are being implemented to this end, which may significantly expand the long tail of the platform’s podcast range.  In terms of distribution channels and findability, the podcast market has traditionally been organised along very diverse lines, with many different ways to search for podcasts and listen to them. Spotify’s investment could alter the market on a fundamental level – and make the service the podcast equivalent of YouTube. This is still a gamble on the future, of course, albeit a very promising one.

Content by opinion leaders, for opinion leaders

Despite the increase among users, podcasts are still by no means a mass phenomenon. As the Reuters Digital News Report 2019 reveals, a good fifth of German online users listen to podcasts at least once a month, whilst many of these are heavy users who listen to them several times a week or even daily. These users tend to be young adults who are well educated and higher earners. Regular podcast users are an attractive target group for brands. They are often people who are strongly interested in a particular topic that shapes opinions in their direct environment, and so functions as a multiplier. Podcast enthusiasts are harder to reach via conventional media, as they watch less linear TV and consume less print media than the average population.

A higher impact through listeners’ undivided attention

One of the biggest opportunities that podcasts represent for advertising is their high impact potential. A key characteristic of the podcast usage situation is direct, intensive contact between speaker and listener. The level of concentration devoted to actively selected content is high, and people often listen attentively and exclusively to podcasts without doing anything else at the same time. Acceptance of advertising among podcast listeners is also higher than it is in the case of most other media, as the advertising is better suited to the usage situation. Native ads recorded by the host are an especially personal form of advertising, tailored to the context. A further plus for advertisers is exclusivity, as a single podcast often features only a small number of advertising messages. At the same time, the resulting lack of scalability is one of the reasons why podcast advertising is presently still unable to deliver sufficient contact for broad reach campaigns.

In terms of usage behaviour, listening to podcasts is also limited with respect to the duration of the content. In contrast to the trend for maximally brief snippets for mobile use on the move, however, on-demand podcast usage is often longer, and listeners’ high levels of interest in the topics discussed mean that their readiness to engage is greater.

New options for audio campaigns

The decentralised way in which podcasts are marketed means that the market is still extremely fragmented at present with respect to advertising opportunities. Uniform standards of measurement are also lacking, which makes formats more difficult to compare. More progress is certainly also needed in terms of booking options and reach definitions if podcasts are to become a more relevant part of media plans.

These issues aside, however, podcast advertising is making new forms of address possible in the audio environment. High-intensity listening means that podcasts are less suitable for “noisy” ad breaks designed to motivate, and more suitable for brand showcasing and development. For the right target groups, this can represent a useful building block in an audio campaign.

And so it may well be that the golden age of the podcast is also coming. With both video and audio booming, the battle for users’ attention is entering a new phase.

“We compete with (and lose to) Fortnite more than HBO,” Netflix CEO Reed Hastings wrote in a letter to investors at the end of 2018, pointing out that gaming, far more than cable TV, will be a major competitor for Netflix in the future.
The video game industry is posting record-breaking revenues year after year and attracts players across all demographics on every device, from dedicated gaming consoles to personal computers and smartphones. The more gaming is growing, the stronger a contender it becomes in the fight for three scarce resources of our modern, connected world: time spent consuming media, audience attention and share of wallet. And it’s not only about gamers playing themselves – the e-sports industry is also growing massively and watching professional gamers compete in tournaments has become a popular source of entertainment for many interested in the medium.

However, one of the biggest shifts for the industry is looming on the horizon, a change so significant to the established ways of doing business, that gaming might never be the same again, neither for hardware makers and game developers, nor for the players.
Shortly before this year’s E3, the gaming industry’s annual trade show in Los Angeles, Google announced its plans for a new type of gaming service: Stadia. For decades, video games were distributed on physical storage media like cartridges, DVDs, Blu-Rays and later online downloads, to be installed and played on powerful hardware in the form of consoles and personal computers. Stadia is Google’s attempt to change this by moving gaming into the cloud.
Games will be streamed over the internet to any device with a screen that has an internet connection and is capable of running Google’s Chrome web browser or compatible with Google’s streaming technology Chrome Cast. All the heavy lifting in terms of graphical computing and processing will happen in Google’s data centres.

What is rather trivial for a linear content like a movie or piece of music, is a lot more complicated for the medium of games. Unlike movies or TV shows streamed from Netflix and other services, games rely on rendering their environments in real time, constantly adapting to player movement and viewing angles. Additionally, they require precise player input through controllers or a mouse and keyboard that must be reflected on screen with minimal delay. The massive processing and networking infrastructure required is something only a handful of companies can provide, Google being one of them.
The benefit for the players is that they no longer need to purchase expensive gaming computers or consoles to play the best-looking, most complex games, but can simply stream them to their TVs, tablets, laptops or even phones.

The business model behind Stadia, which will launch in November 2019, requires users to pay a monthly subscription fee to use the service. And this is where things get complicated. Unlike video or music streaming services, Stadia will not launch with a wide catalogue of old and new games, but a very limited selection of mostly older titles that are included in the monthly package. If players want to access other games as part of the service, they will have to purchase individual games digitally from the Stadia store or pay publishers such as French company Ubisoft a monthly subscription fee to gain access to their catalogue of games.
In a market where numerous large game publishers and hardware makers are already in fierce competition over gamers’ wallets with myriad subscription services to gain access to publisher games catalogues, microtransactions for in-game items, fees for online multiplayer and the purchase price of many games themselves, it is questionable whether Stadia can succeed without going the traditional route of platform owners gaining a market share in the gaming industry: exclusive games and discount pricing.

All major console makers own several development studios that are creating games exclusively for their platform and, in Microsoft and Sony, pay hefty sums for timed exclusivity for high-profile third-party titles. Another tech company that recently adopted the model of selling exclusive games for a subscription fee to interested audiences is Apple, their service Apple Arcade is launching later this year.

In the meantime, Sony and Microsoft are also working on cloud-based gaming platforms which are expected to launch along the release of the next generation of consoles. Sony has even entered a strategic partnership with Microsoft to develop their own future cloud gaming solutions based on Microsoft’s Azure cloud technology – a move that would have been unthinkable only a few years ago, but new competition in the gaming space seems to foster new alliances.
The streaming future of gaming is not without obstacles, however. The traditional core target group of gaming enthusiasts is growing increasingly frustrated with the fragmentation of platforms, exclusivity of content and publishers transforming their games from a one-time purchase to service-models with the aim of increasing long-term revenue through microtransactions and paid additional content.

Although the same cannot be said of movies and music these days, many gamers still feel the need to “own” the games they paid money for, instead of simply buying the right to access them temporarily through a streaming service. And as the younger generation of players grew up with mobile games and free-to-play titles financed through microtransactions, it is uncertain that a streaming service with fixed costs and more traditional games is even attractive to them, especially when pitted against the many different forms of competing entertainment available. As much as Netflix sees games as a competition over its audience’s time, attention and money, games face competition from video and audio streaming services as well.

It will be exciting to see how the industry transforms over the next few years and if streaming and subscriptions are truly the future. The thought of being able to play any game, anywhere on any device without having to buy a console or PC is certainly appealing. Even ad-supported models don’t seem to be too far-fetched in this scenario, which would provide attractive opportunities for brands to reach young and affluent target groups. If the industry is successful in bringing their core target groups with them into a streaming landscape and if ease of use and lower cost of access can even attract new target groups, gaming could cement itself as the leading form of entertainment among younger target groups for many years to come.

In the “Deep Dive” format, experts from the Mediaplus Group immerse themselves in the world of marketing trends and provide in-depth insights into current challenges: how can new trends be categorized socially and economically, and how can problems be addressed with an interdisciplinary approach? Magnus Gebauer, Senior Consultant at Mediaplus, sheds light on this with his contribution to the Beyond Meat trend.

Brand communication to meet the growing appetite for plant-based products

I tried my best: that is all I can say about my feeble attempt to get my hands on a packet of the coveted Beyond Meat burgers from my local discounter. Within the first ten minutes of the shop opening its doors, every last one of the much-hyped burger patties had sold out. And then there is the Californian food producer’s sensational stock market launch, which chalked up gains of up to 600 percent on occasion. Why is that? Although the number of vegans has increased in recent years, there are barely a million in Germany.

Shift in values is changing consumer behaviour and media planning

A closer look soon reveals that the new vegan products are geared towards a far broader target group than the gaunt vegan stereotypes of the 1990s. They are designed for the mainstream and are driven by three major values-based consumption trends:

  1. The current fitness and health trend: Meat substitute products are seen as being healthier because they contain no cholesterol and less unsaturated fatty acids.
  2. There is a growing wish among consumers for better environmental protection and animal-based food production is very energy-intensive.
  3. Following the animal and meat scandals of recent years, more and more consumers are calling for better animal welfare.

Looking at these developments from a media perspective, it once again becomes clear that traditional target group selection based on sociodemographic attributes is not the way to go. Vegan-oriented consumer groups are bound together more closely by shared values and motives than by age or gender – which is exactly where psychographic targeting comes in, offering a more intelligent solution for values-based customer communication. Psychographics is an approach that stems from personality psychology and that deals with the motives of human actions. Psychographic targeting activities take traditional target group descriptions to the next level, adding profiles on motives, attitudes and personality traits. By drawing on psychographics, new media planning approaches are more effective, as the target group’s values must also tie in with the various advertising environments. Which helps to pinpoint those environments that fit perfectly with the brand or product.

Mainstream messages and relevant campaign strategies

The sudden unprecedented boom in this area – in spite of the fact that meat-free alternatives have already been on the market for quite some time – can be attributed on the one hand to the mass-market taste experience and, on the other, to the different, more active marketing of the products in question. Product communication for the meat-free hamburgers is not aimed at vegans and vegetarians but is geared squarely towards lovers of meat and fast food.

“The only consumer we care about is the hardcore meat lover”: interestingly enough, this sentence has become something of a mantra for Impossible Foods CEO Pat Brown, one of Beyond Meat’s main competitors. By his own account, the company founder does not see vegetarian and vegan consumers as his most relevant consumer group. This makes more sense when you consider that his company supplies Burger King with the patties for its vegan Impossible Whopper, and that Burger King advertises its vegan product as being indistinguishable from the original Whopper with regard to taste.

Similarly, the message sent by McDonald’s national advertising video launching its own vegan burger (“Believe it or not: tastes great for everyone – not just idealists. The new Big Vegan TS”) illustrates which target group it has in its crosshairs. Here, McDonald’s is playing with the hackneyed contrast between environmental activist and lumberjack – reconciliation being ultimately achieved in the form of a burger. The message that is to remain with consumers is clear: meat-free burgers are not just for starry-eyed idealist chicks, but for everyone.

British supermarket chain Sainsbury’s has opted for a somewhat different marketing strategy. As part of World Meat-Free Week, it opened up a meat-free pop-up butcher’s shop to demonstrate to customers how to cook with the plant-based meat alternatives sold at Sainsbury’s – while, it can be safely assumed, securing extensive media coverage with this unique campaign. This illustrates above all the importance of having a well thought-out campaign strategy that zones in cleverly on consumer trends, while both engaging customers and providing added value for them. After all, in times where consumers are bombarded with countless one-size-fits-all advertising messages, contextual relevance is the key to grabbing their attention and, in turn, is the basis for a successful marketing campaign.

Is the interest in vegan issues subsiding again? 

Looking at the recent hype regarding Beyond Meat with the benefit of a little hindsight, there is no denying that media interest has cooled off somewhat. However, given the clear shift in values, it would be a mistake to assume that plant-based products have had their moment in the sun. The abundance of vegan alternatives – not only food, but also anything from shoes to cosmetics – will continue to make waves as long as brands serve major consumer trends adroitly while gearing their communication strategies to changing values, leaving past stereotypes behind. With psychographic targeting, media planning has the right solution at the ready.

In the “Deep Dive” format, experts from the Mediaplus Group immerse themselves in the world of marketing trends and provide in-depth insights into current challenges: how can new trends be categorized socially and economically, and how can problems be addressed with an interdisciplinary approach? Magnus Gebauer, Senior Consultant at Mediaplus, sheds light on this with his contribution to the “share-of-wallet conflict in the subscription economy”.

“Do you really need a cow in order to get the milk?” A simple and logical question posed by Zuora founder Tien Tzuo. Zuora is the world’s leading infrastructure provider of the Subscription Economy. If you believe what Mr. Tzuo says, in a few years’ time there will be no reason to own even one single product. A daring thesis that is well worth a closer look.

The Subscription Economy is a cross-industry phenomenon. Hello Fresh and the Dollar Shave Club represent a multitude of services that are set to turn established markets upside down. Even the more conservative car manufacturers are discovering digital subscription for themselves. Mercedes-Benz is testing its own vehicle subscription with “Mercedes me Flexperience.” Word has spread that this business model pays off. Zuora talks about growth rates of over 300 percent in the last seven years.

New players, new fortune

Even in the world of media and entertainment, there’s no stopping paid subscription offers. Excessive CD and DVD shelves are a thing of the past thanks to Netflix, Spotify and co. Disney +, Apple TV + and newly announced platforms such as Quibi will reinforce this development, and at the same time they are changing the way the entire moving-image market evolves. But why are these digital subscriptions so in demand?

Subscription Economy stands for maximum customer focus. For the consumers of today it’s no longer just about owning a product or using a service. They demand solutions that they can adapt to their needs in a flexible and individual way. There are four major triggers for using paid media subscriptions:

  1. Greater flexibility through the possibility of on-demand usage
  2. Access to high quality and often exclusive content
  3. (Partial) Advertising freedom
  4. Curated/personalized content

Paid Media Subscriptions are a convenient on-off relationship – with 30 days notice.

The share-of-wallet conflict

Netflix and Amazon Prime Video are not only competing with each other – in the fight for part of the available entertainment budget, video-on-demand (VoD) services are also facing subscription offerings from the audio sector as well as digital journalism. Add to that the new subscription offers of the booming gaming industry and countless new players, such as the digital magazine app Readly. More and more services are fighting for users, but there is a cost for paid media subscriptions. The question quickly arises about how many subscriptions a user is willing to sign up for. An internal survey among colleagues at the House of Communication at Serviceplan has shown that two to three different services are used – at a cost of 25 to 35 euros per month. Not a small amount but not nearly enough to be fully sustained by subscription services. The share-of-wallet conflict over the available budget is obvious. In addition, it is clear that there is not one subscriber prototype; from the binge-watcher to the news aficionado to the gaming nerd, everyone uses subscriptions differently.

Is it possible to buy an ad-free life?

Theoretically, one could buy an almost ad-free life through subscription media. Theoretically! In practice, this is simply too expensive for the average user. Added to that, paid media subscriptions do not cover all content by far. The services expand the media portfolio and reduce usage time from other offerings, but don’t completely substitute them. Subscription customers continue to use other media offers that can be advertised. But the fact is that the advertising space, especially for heavy users, is visibly smaller.

Flat rate solutions are not in sight

What the impact will be for the individual media channels can’t be solved with a flat rate. There are far too many differences in the market conditions for the video, audio and digital journalism categories.

Pay-VoD deducts usage time from linear TV, as there are very similar usage motivations here. However, Pay-VoD users can still be reached via ad-supported video channels and will have ad-funded offers in their media portfolio. Music streaming takes less usage time from classic radio than Pay-VoD on linear TV. Above all, music streaming replaces physical sound carriers. Also, music streaming is not ad-free per se. Spotify and Deezer, in addition to the payable accounts, also have advertising, free variants in their portfolio. And what is the reaction of the publishers? Many have adapted their strategies and introduced paid-content models in recent years. In terms of advertising, however, for digital journalism there is no erosion as paywalls do not mean “ad-free”. To be ad-free, users tend to rely on an ad blocker instead of paying for content.

What significance does that have for media strategy?

Through the Subscription Economy, more and more channels are losing valuable ad space. A fact that can’t be ignored, but it’s no reason to throw in the towel. Even if the initial situation becomes more difficult for advertisers, solutions exist.

Advertise in less erosive channels on a more continuous basis

Marketers were used to the fact that moving image and audio media give them almost infinitely scalable reach in a short time. But it is precisely these media that are subject to the strongest erosion phenomena. By contrast, journalistic offers, social media and out-of-home continue to offer attractive advertising space and will therefore grow in the media mix. For those who don’t shy away from the effort, they are also able to penetrate into media that move away from the classic advertising space: influencer marketing, sponsoring, product placement, native audio or in-house productions offer a variety of possibilities for brand staging – and are a welcome support for content producers. In terms of advertising pressure, it is advisable to be moderate but continuously present. This is how you build up depot effects for the brand – the marathon runner clearly beats the sprinter here.

Increasing complexity: the right planning tool question

It is hardly surprising that media planning will become even more complex in the future. Advertisers will need to expand their media mix to reach the right consumers. A broader media mix makes the use of high-end planning tools inevitable. Here’s how to answer these questions: is the range of a channel already exhausted? Is it worth adding another? What are the contact costs and how good is the advertising impact? AI-based planning tools such as the Mediaplus Brand Investor provide appropriate answers.

Back to the beginning

In the future it will also be possible to reach consumers via advertising. However, more levers will need to be set in motion and finer adjustments made. And what about the cow in your own four walls? She still won’t be needed in order to drink a glass of milk. Subscription guru Tien Tzuo is absolutely right. Unlike him, we don’t consider paid subscriptions to be the centrally dominant business model in the medium term. Rather, they are an additional, if not insignificant distribution channel which applies to grocery shopping as well as media consumption.