MORE IN-APP USAGE STATS: Last week I featured a post about the Top 10 Apps (by device penetration) in the US according to comScore. Now Inside Radio is showing a slightly different data cut of in-app time spent by content type in the attached link and in the chart below. Despite FB’s continued domination within Social, it’s good to see in-app time spent with Music going up. The reason for this is simple – Music is one of the very few things people do for long periods of time in an app environment. Music is that one constant companion you’ll take with you as you do other things in your life. This creates average session lengths of 45 minutes to an hour – when’s the last time you spent 45 minutes in a row on Instagram? (As an aside, did you notice how hard Inside Radio tried not mention Pandora in this article? Despite the fact that Pandora is a Top 10 publisher for app penetration there’s no mention. Instead they focused on iHeart being “among the top 50 apps for adults 35 to 49 years old”. Nice job of selective reporting IR!)
SOFTER BTS/BTC AD SPENDING: According to Kantar US ad spending during the critical Back-To-School/Back-To-Campus window if off to a sluggish start for 2017. For a level set 2016 was a banner year with BTS/BTC spending surging +15% to $284M – so the industry is up against a pretty tough comp. According to Inside Radio in the attached link and the graph below, 2017’s estimates are expected to settle in the +3% range. It’s important to note yesterday’s report only counts July, August and forward business already placed for September – so an in-month Sept spending spike could skew the numbers up. The biggest YoY decliner categories are Telcos like Sprint and AT&T, and B&M retailers like Target and Staples. This early forecast seems to comport with an overall cooling of Retail spending in 2017. For all of our sake let’s hope things heat up again for holiday prime time!
WINTER IS COMING FOR THE AGENCIES; 2017 is shaping up as a “flat is the new up” year for ad agencies and their parent holding companies. On the surface the drop in agency top line revenue appears to be tied to softness in major categories like Auto, CPG, and Retail. But there’s a bigger structural problem going on within the agency megaplex, which is explained through the example of WPP in the attached WSJ article. Here’s what’s going on. Over the past 4-5 years agencies have been on a buying spree of smaller creative shops and AdTech specialists to give themselves a “full array” portfolio which is essential to compete in today’s digital media world. Visualize these specialists as rows on a grid. Then keep in mind the holding companies must constantly sub-divide their agencies to create new ones in order to have competitive separation – can’t have the same agency handling Subaru and Honda, right? Consider these different agencies the columns on our imaginary grid. The result of these two factors is a confusing-at-best matrix of entities within each of the four major HCs. Each group tends to operate autonomously and run its own P&L. This drives more add-on billing upcharges (which clients loath), and a lack of resource/data sharing which creates inefficiency. This setup is what HCs and their agencies are struggling to monetize. My guess is this problem will only get worse before it’s solved.
Have a great Tuesday guys!
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