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The Audit Bureau of the Future – IFABC 5 November 2014
Script – Carolyn Morgan
1: Title slide
I’m delighted to be presenting to you all today. I’d like to say thank you to Jerry
Wright for asking me to update the report on the “Audit Bureau of the Future”
that I presented to the IFABC General Assembly in Madrid two years ago. Since
April this year I have been reviewing published stats on global trends in media
and advertising. I have also conducted an online “change census” among 23
audit bureaux, plus interviewed 10 European bureaux face to face in Zagreb at
the IFABC Europe conference and Tom Drouillard, new head of AAM in the US
over the phone. In addition I have interviewed by phone 10 senior agency
executives and advertiser marketing executives to understand the buyers view.
2: Content slide
This presentation covers the main findings and opportunities for Media Audit
Bureaux to develop in future. In addition there is a 120+ slide report available to
all of you to refer back to. And a short exec summary, which you are welcome to
share with your respective boards.
So today I am going to cover:
- current trends in media consumption worldwide
- the buyers view from the interviews with agencies & advertisers
- what we see as the “7 steps” to the media audit bureau of the future
We are going to have a break for Q&A after the first two sections which Jerry will
moderate, and then we have more time scheduled after the last section.
[check] There’s a page where you can submit questions by typing during the
presentation, and then I can answer them when we break for Q&A.
3: “Mobile driving internet…”
There are clear regional variations in how internet access is changing. In Europe
& North America fixed internet access is widespread, typically over 50%, but
mobile is moving more rapidly with >75% penetration. In the purple regions:
Asia, Lat Am, North Africa, South Africa, mobile is already over 75%, even where
fixed access is less than 50%.
Forecasts now project that 80% of literate adults worldwide will have mobile
internet access by 2017.
Tablets will replace PCs, but smartphones will drive growth: by 2017 that means
3.5 bn smartphones and 1 billion tablets. Large screen size phones are blurring
the boundaries.
4: “Mobile devices are changing consumer behaviour”
This explosion of mobile devices is changing how people consume content and
how they shop, and these trends are seen everywhere. The phone or tablet is
becoming the default device for web browsing whether at home or travelling.
Mobiles are used to multi-task – check emails or contact friends – while watching
TV. Or even to watch entire TV programmes. Mobile is an important daily news
source, especially given the growth of social media as a referral source for news
5: “Fastest mobile web growth in Asia…”
This chart shows just how much mobile web access has grown just in the last
year. Globally it has grown from 14% to 25%. The pattern is widespread but it’s
particularly dramatic in Asia and Africa.
6: “Time spent daily on digital video…”
In the last two years the time spent watching digital video has doubled for most
age groups, with <34s now watching on average 35 minutes of digital video a
day. The interviews I carried out with agencies and advertisers show that in
some regions this trend is even more marked. Cynthia Evans of GroupM said that
in LatAm digital video was around a third of total viewing. And David Porter of
Unilever in Shanghai said that affluent young Chinese will happily watch an entire
programme on a smartphone. I’ve also seen stats that back up that owners of
larger format phones spend more time watching digital video. Plus inevitably the
extra time that mobile media consume is at the expense of print, radio & TV.
7: “mobile commerce growing steadily…”
These stats from Global Web Index show the growth of mobile e-commerce. This
was a particular trend noted by Gary Lim of Johnson & Johnson in Singapore and
David Porter in Shanghai.
8. “Print publishers now embracing digital channels…”
So how is this affecting traditional publishers, core customers for many audit
Most now accept print is in long term decline; and certainly news brands are
finding online is expanding their audience, and advertising is expanding. Mobile
digital edition revenues are growing, albeit from a low base. B2B media are
making a more rapid transition to digital subscriptions, as the decline in print
recruitment advertising undermines the profitability of print. New digital
revenues are growing, but barely replacing print losses, especially in North
America and Western Europe. And pureplay entrants are taking share.
9. “Magazine publishers grow digital rev to replace print…”
So this slide based on PwC analysis shows how digital revenue (the top section) is
growing as print revenue declines. Interestingly, publishers are having more
success in digital advertising than circulation, and B2B publishers are making the
transition more rapidly than B2C.
10. “Pure play digital news media becoming a threat”
But traditional print media need to watch out for digital pure plays. This analysis
by the Reuters Institute asked readers in different countries which news brands
they had used as a source of news in the last week. The pale blue column on the
right hand side is the pureplays – so you can see in the US they are neck and
neck with traditional media. In the UK established news brands are still ahead,
but the likes of Buzzfeed, HuffPost are growing internationally, so this could
change in the next couple of years.
11. “Mobile will drive digital ad spend, squeezing print”
Moving onto advertising spend, these statistics from Zenith Optimedia show that,
if anything, the switch from print to digital is moving more rapidly than we
forecast 2 years ago. Internet advertising will expand from just over 20% to
almost 27% of total ad spend by 2016, driven by a dramatic expansion of mobile
advertising to 7.7%, bigger than magazines or outdoor. While TV pretty much
holds its own, print is the big loser, shrinking from 25% of total spend to just
over 20% by 2016.
12. Programmatic advertising accelerating worldwide
The stand out trend in digital advertising is the growth of programmatic, allowing
agencies to buy an audience automatically across multiple websites. This is really
taking hold in the US, where agencies appreciate the lower costs, but clients are
increasingly concerned about the lack of transparency and the risks of ads
appearing in inappropriate contexts, of which more later. Programmatic is
becoming more widespread in Western European markets, but as yet is relatively
small in China.
13. Global media market trends: the view from 2014
There’s much more detail in the full report; which you can all review in detail
later, but here are the top-line trends.
Mobile growth is powering internet access worldwide. This is driving change in
consumer behaviour: the most important trends being multi-screen usage, digital
video viewing and m-commerce.
Traditional publishers are almost replacing print revenues with digital -- but the
“digital native” media are gaining ground with consumers.
Ad spend is shifting to digital mobile, with print declining even faster than we
projected two years ago, and digital video eroding the share of broadcast TV.
14. Title: The buyers view
So now let’s take a look at the buyers view, based on my interviews with global
advertiser and agency heads
15. Buyers view (list)
Here’s a list of the people I interviewed: most had global or pan-regional remits.
It’s a mix of different agency groups and major advertisers including GSJ,
Johnson & Johnson and Unilever.
16. Buyers view: main trends in media landscape
First we asked for their take on the main media trends, and these largely
coincided with what we were seeing from published stats. In LatAm and Asia, if
anything the trend to digital screens and video content was more pronounced, as
the adoption of mobile devices provided a new way to reach consumers using the
impact of video-based ads but not traditional broadcast TV. Thus for major
advertisers, digital video and multi-screen is now the core of campaign planning.
The continued expansion of digital advertising, and programmatic was a key
trend, and this, with the emergence of mobile digital video, led to the view that
print is now marginal, especially in China and LatAm.
Buyers also have an eye on the emergence of social advertising and m-commerce
among younger affluent consumers.
17: Buyers view: campaign planning, buying, evaluation
Planning is holistic: with clients considering paid, owned and earned media across
all platforms at once. There’s much greater focus on outcomes in planning: ie
volumes, audience, changes in attitude, enquiries and sales.
Large clients and major digital media are planned at global level; some
campaigns are planned at pan-regional level, but then are often adapted for each
country, and in the case of China, at city by city level.
Video is now a core part of the plan: Unilever in China plans video first, then
sponsorship/ content second. Standard display, print and OOH follow later.
Many brands have highly detailed audience targets, and get frustrated when they
can’t buy at a targeted level – as trading currencies are based on broad
As far as buying is concerned, agencies still have specialists for each medium, but
based within a single buying team. There’s a big skills gap in programmatic
buying – although the largest agencies have invested heavily.
Evaluation of campaigns is now even more sophisticated. Clients have
sophisticated models for evaluating paid, owned and earned media, built in
partnership with agencies and incorporating client data on target outcomes.
The growth of digital means more emphasis on real-time marketing as campaigns
can be reviewed against client outcomes and adjusted in-flight.
18: Buyers view: ad risks and measurement issues
The rapid growth of digital advertising is drawing attention to new risks in
Was the ad seen by the target audience and for how long?
Was the ad shown in an inappropriate context?
Was the ad seen by people or computers?
In less well regulated markets, buyers are concerned about online fraud and lack
of transparency in measurement.
With the growing reliance on data, there are concerns that algorithms connecting
disparate data sources could be flawed.
And the growth of social media as part of campaigns carries the risk of a
consumer backlash.
Measurement hasn’t kept up with the changes in how campaigns are planned.
Buyers want to track one customer across multiple platforms, but have to
aggregate different measures and still rely on intuition to fill the analytical gaps.
Ideal would be to be able to measure relative effectiveness of different media
Comparing research data cross border is still harder than it should be.
Viewability is a concern: has the consumer seen the ad? And can we adjust costs
if they have not?
Buyers perception is that existing currencies are slow to adapt due to vested
interests on boards, and that it’s the outsiders who are innovating.
Multiple media JICs are too costly: they need to merge.
19: Opportunities for audit bureaux
Buyers have suggestions for new products and services that audit bureaux could
develop, based around the risks and issues they face.
Measuring the cross media audience: interest in independent media brand
certificates and also audits of media owner cross-platform data.
Making cross border comparisons: working with the industry to establish global
Digital ad risks: including viewability, brand safety and online fraud: developing
ways to certify tech vendors claiming to mitigate these risks and promoting
transparency in digital advertising.
Emerging media: video, mobile, social & ecommerce – create an opportunity to
develop new metrics and standards – and ultimately to track consumers from
media to purchase.
These suggestions are constrained by perceptions of audit bureaux strengths and
how their skills complement other measurement bodies. There was support for
the independence of audit bureau and their ability to bring the industry together
to build consensus. However there is a view that industry bodies are slow to
change, blocked by vested interests and the multi media JIC structure is too
costly. So bureaux would be supported in plans to rationalize JICs and renew
board members.
20: Q&A
We’ll take a break here and there’s an opportunity to ask some questions on the
media trends and the buyers view sections. You can submit a question online, or
ask it now and Jerry will moderate the Q&A.
21: Media Audit Bureau of the Future
This section looks at what changes audit bureau around the world are making to
their products & services, and how they are innovating. It sets out 7 steps that
every IFABC member can take to innovate in their local media market.
22: Audit bureaux view: media trends past and future
As part of the online Change Census, we asked bureau for the main changes
taking placed in their markets, and the themes were in line with what we have
heard from the buyers. Many of the 23 bureaux that took part have also
observed consolidation of publishers in their local market.
23: Industry view: cross media measures…
And there are similar views from industry bodies across Europe. EACA state that
ABCs/ audit bureaux are trusted but have to move beyond their historical
business model.
24: Traditional media audits will continue to decline
Looking across a range of bureaux, print media advertising is in steady decline,
meaning less funding for audits. Many bureaux are seeing customer numbers
declining as publishers consolidate; this has contributed to the Danish ABC
closing. As yet digital revenues, both web and mobile, for traditional publishers
are still small scale so not a major opportunity for bureaux, and there are
alternative measurement options, especially for the web.
Within digital advertising, there is more emphasis on outcomes or response and
as programmatic grows the value of audits is questionable. A large part of the
growth in mobile advertising is from facebook and google, who have their own
Buyers’ focus on audience profile favours panel/ research data rather than
25: Change census shows many bureaux evolving
But according to the online change census, in the last two years many bureaux
have evolved their activities, and have further changes planned.
Most have expanded their stakeholders to include digital publishers, other media
and agencies.
Many are in the process of rebranding, changing focus from “print” to “all media”
Products and services launched in the last two years are now typically
contributing 10-20% revenue, making a contribution to the anticipated decline in
print, with further launches planned.
Overall, customer numbers are down, although many bureaux have won new
customers to offset losses.
Responding to the faster rate of change in the media environment, many bureaux
are updating their rules more frequently, although there is more work to do.
Bureaux are reviewing how they publish data to suit the changing needs of
Many bureaux are partnering with other media auditing organisations, and most
have hired in new digital skills.
26: high level of recent & planned launch…
Here’s a snapshot of the products and services launched in the last two years,
with digital publications and multi-platform certificates now more common.
Future launch plans include measuring events, video, OOH. And several are
looking at helping buyers manage digital advertising risks by auditing vendors
tracking viewability and brand safety. Plus some are investigating merging panel
& census data, often in partnership.
27: many are partnering
A number of bureaux are partnering with other local media measurement bodies
to provide a more holistic, multi-platform service to buyers.
28: IFABC change census…example Brazil
In the full report, we have summarized the key innovations for each member that
participated. This will help other members who are planning to rebrand, add new
stakeholders, partner or launch new services to identify members who have taken
similar steps and may have best practice to share.
Here’s an example of the summary page for our host, IVC of Brazil.
29: Future opportunities for audit bureaux
So here’s a summary of the new products and services that bureaux could
develop, that fit with the media trends, the buyer’s view and the experiences of
other IFABC members worldwide.
The first three issues were identified by buyers:
1. Cross media audience: opportunities could include media brand certificates,
auditing media owner cross-platform data or developing cross media deduped
reach, which some bureaux have already developed for B2B media.
2. Emerging digital media: bureaux have an opportunity to help develop
standards and metrics for video, mobile apps, mobile ads, streaming radio, and
possibly social media and e-commerce
3. Digital advertising risks: bureaux can help to reassure buyers that vendors on
brand safety and viewability by certifying tech vendors, promote transparency in
digital advertising and help to define engagement measures.
4. Non digital media: not identified as a priority by buyers, this can provide useful
incremental revenue for bureaux while they invest in digital media measurement.
Many bureaux around the world have successfully developed revenues around
measuring events, OOH, TV, free newspapers or catalogues.
5. Cross border comparisons: identified as an issue by buyers, can’t be tackled by
individual bureaux, but establishing global standards is a potential project for
30: 7 steps to success: future media audit bureau
Different bureaux around the world have varying local environments and may
have other media measurement bodies in their local market. Based on the
experiences of the bureaux that participated in this project, we have developed a
set of 7 steps that bureaux can take, starting with the core requirements of
engaging with agencies and advertisers and building credibility and trust across
multi-media. All bureaux should progress along this path: the precise speed will
depend on their local market and the resources available.
So the first step is to engage with agencies & advertisers directly; then build
credibility and trust across multi media. Bureaux should then work in partnership
with their current clients, publishers, to help them exploit digital opportunities.
With this base, bureaux can explore options to provide trusted multi-media data,
and then to create measures for new types of media – both digital and non
The final steps – which may mot be appropriate for all bureaux – are to provide
the stamp of trust for processes in digital ads, and to collaborate or even partner
with other measurement bodies.
So now we’ll look at each of these steps in more detail.
31: step 1: engage with agencies & advertisers directly
Add agencies to Board where possible, and create an advisory group of meet 1:1.
Bureaux that have launched successfully strongly advise getting agency support
in advance.
It’s equally important to meet advertisers directly to understand their challenges
32: step 2: build credibility & trust across multi-media
The industry needs to feel that the bureau is credible across multi-media. Many
bureaux have rebranded from “print” to “media” to support this: talk to your
colleagues before you take this step to learn from their experience.
Build relationships with other media JICs and measurement providers.
Grow your profile in the industry: it helps to have an influential figurehead who
attends key events and meets opinion formers.
Widen your board/ stakeholder membership to cover digital & non-print media
owners & agencies – and help break down silos between media types.
33: Step 3: Help publishers exploit digital opportunities
Traditional publishers are the core customers for audit bureaux – so it’s important
to support them as they evolve their business to digital. The Netherlands offers
training for publishers, and Switzerland provides consultancy and creates market
research. Many bureaux now offer media brand cards with total cross-media
reach, or have simplified audit rules, as the UK has done. Most now audit digital
editions and publications: stay flexible and let rules develop as the industry
As publishers revenues come under pressure, they will seek lower audit costs, so
streamline your processes, and explore low-cost alternatives, like the Romanian
small publisher audit.
34: Step 4: provide trusted multi-media data
Bureaux have a reputation for integrity and being a neutral party, so use this to
aggregate and publish useful data that helps agencies plan. Spain and
Switzerland now publish monthly ad market shares, which generates extra
revenues. Plan datasets so that agencies can use them easily. Several bureaux
have developed web portals or mobile apps that aggregate data from their own
audits and third parties which are made freely available to the media industry.
Providing trusted multi-media data cements the bureau’s credibility in the local
35: Step 5: Create new media measures
Where the local market permits, bureaux should grasp the opportunity to provide
web audits, maybe via a partnership, to form part of multi-media reach. It’s also
worth engaging with IAB, digital agencies and relevant JICs to understand the
issues in digital advertising
Actively look for other media – digital or otherwise – where there are
opportunities to create measures. Many bureaux are earning good revenues from
auditing events, outdoor, free newspapers & catalogues, stand alone mobile apps
or e-newsletters
36: Step 6: Provide stamp of trust for processes in digital ads
Buyers are increasingly concerned by the risks in digital advertising, and are
supportive of audit bureaux certifying third party vendors. The UK and the US
are well advanced in this field. As many of the organisations are global, there is
a strong case for harmonizing approaches across borders.
37: Step 7: collaborate with other measurement bodies
Advertisers and agencies are planning campaigns across multi media, with highly
targeted audiences and with specific outcomes in mind. Audit bureau who don’t’
already have expertise in other media or in panel/research would do well to
partner with local readership providers and explore ways to integrate different
types of data. A number of bureaux are already partnering with other web, TV or
press media measurement bodies.
38: Many ABCs are already taking these steps
I’ve mentioned some of the local bureaux who are already exploring these ideas.
In the full report we have several case studies of best practice for you to explore.
Feel free to talk further to the members here at the GA or afterwards.
39: Mobile app audit: IVW Germany
Here’s an example of the case study on how IVW in Germany set up their mobile
app audit – it’s expected to generate €145,000 in 2014 and they have audited
350 apps to date.
40: Advertising & media measurement in flux: audit bureaux at a
There is a consensus that digital media will continue to grow rapidly worldwide,
driven by mobile and video, changing consumer habits for good.
Thus print media will continue to decline, and advertisers will focus on digital
media as they follow audiences
Campaigns will be planned cross media, and agencies will demand better
measures of overall reach and effectiveness
Audit bureaux that focus solely on print will shrink and may become unviable, as
shown by the recent closure of Denmark’s ABC.
Bureaux can widen their activities to cover emerging media such as events, OOH,
mobile apps….
They must also become part of the digital conversation in their markets and
develop services relevant to digital advertising
41: What will it take to adapt to the digital world?
Bureaux will need to develop new skills and capabilities:
How to collaborate with digital stakeholders
How to partner with complementary research & auditing bodies
Sharing best practice and learning from audit bureaux worldwide
Streamlining the costs of core print audits
Making frequent updates to digital media standards
Bringing in new skills, and developing new products and services
42: The role of IFABC
IFABC is well placed to help agree global measurement standards, and also to
build relationships with global media players. IFABC can also assist members by
sharing best practice, building the data and knowledge base and developing new
joint services.
43: Next steps
Do use the full report to understand more about media and advertising trends
and the views of buyers. Learn about which bureaux have developed new
products and services and collaborate with them to uncover best practice.
In your local market, consult with agencies, broaden your stakeholders and
consider rebranding if appropriate.
Raise your profile in the local media industry – perhaps find a figurehead to speak
and network?
Work with your publishing clients as they develop digital revenues; speed up
processes and streamline costs
Then grasp the digital opportunities where possible in your market, and partner
and collaborate to make progress.
Carolyn Morgan
17 Sep 2014