Facebook is likely to see an ad spend backlash following the false reporting saga and multiple metrics errors, according to WPP AUNZ's John Steedman.
In his market overview as part of WWP AUNZ's full 2016 year results, the former GroupM chairman, turned board director, says those that snare the largest chunk of digital ad spend may experience a slowdown in 2017.
He said concerns over viewability, ad fraud and third-party verification may stall the speed of growth in digital and cause more brands to reduce their digital spend.
“Google and Facebook, as always, have been dominating the digital sector, but that said, Facebook may slow given misreporting issues,” he said.
He referenced Procter&Gamble, whose chief brand officer Marc Pritchard announced a review all of its agency contracts and plans to crack down on transparency around digital marketing last month, as well as a swing back towards TV and away from digital last year.
Steedman added: “Some advertisers are evaluating the amount they spend on digital channels as is the case in point with P&G. I do believe that other advertisers, and in particular FMCG businesses, will also look to do the same.”
He also mentioned brand safety for YouTube Preferred, specifically relating to hate speech videos that brands can find themselves advertising on – as reported by AdNews this week.
“WPP media agencies no longer buy YouTube Preferred for this very reason,” he said.
Steedman said the first line of defence to combat this is to partner with local premium publishers, those that “curate journalistic content” as that is “far lower low risk for brand safety and ad fraud”.
Overall Steedman said market growth is driven by digital and company recalculations show the market has grown by 6% in 2016, compared to 15% in 2015. WPP AUNZ is forecasting market growth at 4.2% for 2017.
He says 47% of spend is in digital which is essentially driven by search, and broadcast represents around 25% of the market against 43% as reported by SMI through the media agencies.
TV's troubles
Steedman said there's no better channel for brand building than TV, however the 'dire nature' of the medium and the major challenges ahead means it faces a very uncertain future.
“Broadcast had a challenging year driven by audience decline and some advertisers' reassessment of the channel,” Steedman said
He said there is no question that broadcast television is struggling with revenue and audiences, although it does continue to attract a fair share of the agency dollars, around 43%.
“Broadcast counties to be an important channel when it comes to brand building which other channels struggle to deliver. The recent financial results of the broadcasters reflect the dire nature the broadcasters are currently facing in the market.”
He stressed that the federal government needs to act now on reform in the media industry to reflect today’s ever-changing media landscape.
“They also need to address the ridiculous license fees currently being paid which are amongst the highest, if not the highest in the world. Unless they do, broadcast in particular free to air, faces an uncertain future,” Steedman said.
To address the decline in audiences broadcasters need to produce high end material which is “absolute appointment viewing for their audiences”, says Steedman.
Also in his market overview Steedman said digitisation of out of home (OOH) has delivered growth, particularly with car manufactures and retail; that radio's ability to drive a retail result has delivered a positive result for that channel; and that print remained challenged. He said the print decline will be slower in 2017, however newspapers will be somewhat impacted with the lack of election spending.
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