The Audit Bureau of the Future

1. The Audit Bureau of the Future Presentation: IFABC General Assembly, Rio Nov 2014 Carolyn Morgan @carolynrmorgan

2. Contents • Trends in media consumption: • Digital devices and internet access • Changes in consumer behaviour • Publisher reactions • Advertising spend • The buyers’ view • Media Audit Bureau of the Future • 7 steps to success • Innovation case studies • Summary and next steps

3. Mobile driving internet in LatAM, MENA, Asia

4. Mobile devices are changing consumer behaviour… • Web browsing at home or travelling • Multi-tasking while watching TV • Watching video & catch up TV • Important daily news source • Growing e-commerce channel

5. Fastest mobile web growth in Asia, Lat Am, Africa

6. Time spent daily on digital video growing rapidly Source: Nielsen

7. Mobile commerce growing steadily Source: Global Web Index 2014/ World Newsmedia Network

8. Print publishers are now embracing digital channels • Accept print is in long term decline • Online expands audience for major news brands • Digital edition revenues growing from a low base • Online advertising expanding • B2B media moving more rapidly to digital subscriptions • New digital revenues are (almost) replacing print declines…but progress is uneven • And digital entrants are gaining share

9. Magazine publishers grow digital rev to replace print Source: FIPP, PWC

10. Pure play digital news media becoming a threat Source: Reuters Institute

11. Mobile will drive digital ad spend, squeezing print

12. Programmatic advertising accelerating worldwide

13. Global media market trends: the view from 2014 • Mobile growth powering internet access • Mobile driving change in consumer behaviour • Multi-screen usage • Digital video viewing • M-commerce • Publishers (almost) replacing print revenues with digital • But digital native media squeezing traditional publishers • Ad spend shifting to digital mobile • Print decline faster: 20% by 2016 • Mobile ads outpace desktop internet • Digital video eroding TV share

14. The buyers’ view Advertiser and Agency interviews

15. Buyers’ view: agency & advertiser interviews • John Montgomery, COO GroupM interaction, US (JM) • Cynthia Evans, Chief Strategy Officer, LatAm, MEC Global (CE) • Simon Thomas, Strategic Systems Director, GroupM, UK (ST) • Khurran Hamid, Global Director of Digital Media, Glaxo Smith Kline (KH) • David Porter, Media Director, Unilever North Asia (DP) • Mark Greenstreet, Chief Research Officer, AE Media, UK (MG) • Nick Hiddleston, Research Director, Zenith Worldwide (NH) • Lindsey Pattison, Global Strategy Officer, Maxus Global (LP) • Alan Hodge, Global Trading Director, Maxus Global (AH) • Gary Lim, Marketing Director, Johnson & Johnson, Malaysia (GL)

16. Buyers view: Main trends in media landscape • Digital screens and video • Print now marginal • Digital ad growth • Rise of programmatic • TV transforming to digital • Social advertising (& commerce) Source: 10 interviews with agencies, advertisers worldwide

17. Buyers’ view: campaign planning, buying, evaluation Planning Holistic strategic planning: paid, owned, earned Focus on outcomes Local vs global Video now core Fine targeting frustration Buying Trading specialists Programmatic skills gap Evaluation Data-driven proprietary evaluation Real-time testing & optimisation Source: 10 interviews with agencies, advertisers worldwide

18. Buyers view: ad risks & measurement issues • Advertising risks • Viewability • Brand-safe content • Online fraud • Data integrity • Lack of transparency • Social Media backlash • Privacy • Measurement issues • Cross-media audience • Cross-border comparisons • Viewability • Video, mobile, social • Relative effectiveness • Slow to change Source: 10 interviews with agencies, advertisers worldwide

19. Buyers view: opportunities for audit bureaux Issue/risk Opportunity Cross media audience Media brand certificate Audit media owner cross-platform data Cross border comparisons Establish global standards Viewability/ brand safety/ online fraud Certify tech vendors Promote transparency Video/ mobile/ social/ ecommerce Metrics/ standards for emerging media Track consumer: media to purchase Slow to change/ JICs to costly Renew board members Rationalise JICs

20. Q&A

21. Media Audit Bureau of the Future

22. Audit bureaux view: media trends past & future • Last 2 years • Print decline; growth in internet • Rapid growth in mobile, digital video • Increase in programmatic trading in digital • Consolidation of publishers • Advertisers hesitate to commit budget long term • Publishers move to online & digital editions • Next 2 years • Press ads will be static at best • Future is mobile • TV and digital video will merge • Regional press may go bust • Measurement will be cross-media • Further print title consolidation • Programmatic growth continues Source: IFABC 2014 Change Census: 23 responses

23. Industry view: cross media measures & accountability EACA ABCs trusted but must break out of legacy business model European agencies want common standards I-COM Cross media measures needed Viewability growing concern Better mobile & tablet measures Plan TV + digital video Cookies & privacy IAB Europe Cross-media evaluation with integrated surveys Industry-wide online measurement currency Compatible definitions & demographics across media Viewable not served impressions Audience metrics by device

24. Traditional media audits will continue to decline • Print media advertising in steady decline > less funding for audits • Customer numbers declining in many markets • Publisher consolidation risks revenues: Danish ABC closed • Digital revenues (web & mobile) for traditional publishers still small – and more commercial measurement options • Digital display losing share, emphasis on outcomes/response & growth of programmatic reduce value of audits • Growth in mobile ads – but 70% facebook & google • Focus on audience profile favours panel/research not census Source: IFABC 2014 Change Census: 23 responses

25. Change census 2014 shows many bureaux evolving • Expanding stakeholders to digital publishers, other media, agencies • Rebranding in progress for many (print > all media) • Recent launches contributing 10-20% revenues now • Further launches planned • Customer numbers down overall, although new customers won • Frequency of rule updates increasing • New data, publishing formats planned • Partnering with other media audit orgs • New skills being hired in, some organisations changing radically • 23 countries took part – full summaries in Appendix

26. High level of recent and planned launch activity • Launched last 2 years • Digital publications (replica & non replica) • Total audience for B2B • Multi platform certificates • OOH ad monitoring • Online adspend • Web traffic audit • Brand safety • Viewability • Events • Free newspapers • Internet campaign audit • Future launch plans • Total audience certificate • Event audit • Viewability • Video measurement • Hybrid audience measurement • OOH audience • Brand audit for b2b media • Socio-demographic analysis • Total delivery auditing • Streaming radio/video • Brand safety • Merge panel & census Source: IFABC 2014 Change Census: 23 responses

27. Many are partnering…. Source: IFABC 2014 Change Census: 23 responses

28. IFABC change census …example: Brazil Source: IFABC 2014 Change Census: 23 responses

29. Future opportunities for audit bureaux Cross media audience Media brand certificate Audit media owner cross-platform data Cross media de-duped reach Metrics/ standards for video, mobile apps, mobile ads, streaming radio, social media, ecommerce Emerging digital media Certify tech vendors eg brand safety Promote transparency Define engagement measures Digital advertising risks Non digital media Events, OOH, TV, free newspapers, catalogues Cross border comparisons Establish global standards

30. 7 steps to success: Future Media Audit Bureau 7. Collaborate with other measurement bodies 6. Provide stamp of trust for processes in digital ads 5. Create new media measures: web, other media 4. Provide trusted multi-media data 3. Help publishers exploit digital opportunities 2. Build credibility & trust across multi-media 1. Engage with agencies & advertisers directly

31. Step 1. Engage with agencies & advertisers directly • Agencies drive change so stay close to them: • Add agencies to Board where possible • Create an advisory group or meet 1:1 • Understand their needs and problems • “Meet directly with agencies” (Romania) • “Don’t rely on agency associations” (Poland) • “Get agency support before new launches” (Germany) • Meet advertisers directly to understand challenges

32. Step 2. Build credibility and trust across multi-media • Consider a rebrand • Build relationships with other media JICs, measurement providers, trade bodies • Grow profile in industry: have an influential figurehead • Widen board/stakeholder membership • Become the champions of trust in advertising • Help break down silos between media types

33. Step 3. Help publishers exploit digital opportunities • Support publishers in evolving their business to digital • Offer training (Netherlands) • Provide paid consultancy services to educate publishers (Switzerland) • Create ad hoc market research (Switzerland) • Include digital editions on print certificate (Netherlands, Belgium, UK..) • Create media brand cards to show extent of reach (Sweden) • Provide options to audit free delivery/ free digital editions (Finland) • Simplify press rules (eg UK 3 monthly audits) • Anticipate reduced revenue from publishers and streamline costs • Low cost audit alternative for small publishers (Romania) • Single form for print and digital edition data collection • Reduce numbers of staff (Sweden) • Streamline processes (Switzerland)

34. Step 4. Provide trusted multi-media data • Provide useful data to help agencies plan • Web service for agency members (Sweden) • Monthly advertising market shares (Spain, Switzerland) • Monthly magazine circulation (UK) • Daily web traffic (Spain) • Datasets that agencies can use easily • Aggregate data from own audits & third parties: freely available to media industry • Web portal prasa.info (Poland) • Free mobile app (Sweden, Switzerland) • Media brand audits (Sweden)

35. Step 5. Create new media measures • Grasp the web opportunity where possible • Provide web audits where possible (Romania, Netherlands, Spain, UK) • OR partner with web audit provider (Poland, Sweden) • Engage with IAB, digital agencies, JICSs (JICWEBS – UK) • Develop stamp of trust for brand safety, viewability (UK, others planning) • Measure other media where market permits • Events (Poland, Finland, Australia, Switzerland) • OOH (Romania) • Stand alone mobile apps (Germany) • E-newsletters (Netherlands) • OR partner or collaborate (Sweden, UK, Poland)

36. Step 6. Provide stamp of trust for processes in digital ads • Audit third party vendors in digital advertising – provide stamp of trust • Viewability • Content verification • Brand safety

37. Step 7. Collaborate with other measurement bodies • Collaborate with readership providers • Readership is often the currency, but needs circulation to calibrate • Build relationship with readership providers (UK, Germany, Netherlands) • Include readership data on media brand charts (Sweden) • Explore merging census & panel data (UK: hybrid, Belgium using own data) • Partner with other media measurement bodies • Poland: PBI (Polish Internet Bureau) • Romania: ARMA (TV audience measurement) • UK: PwC, BARB, UKOM • Brazil: Regional Newspaper Association

38. Many ABCs are already taking these steps

39. Mobile app audit: IVW Germany 5. Create new media measures: web, other media • IVW already carry out web audits • IVW have extended audits of mobile apps to include stand alone apps from non publishers as well as publisher editions • All apps that carry third party ads can be included – paid & free • Measure monthly visits and page impressions • Categorise by language, section, topic, format, paid vs free • Can aggregate print plus web plus mobile app visits • Fees for audit plus annual fee • 350 apps audited so far and for 2014 expect €145,000 revenue • Project took almost 3 years from start to roll-out • Advertiser and agency support was crucial to success More case studies in full report

40. Advertising & media measurement in flux: audit bureaux at a crossroads • Digital media will grow rapidly worldwide, driven by mobile and video, changing consumer habits for good • Print media will continue to decline; advertisers will focus on digital media as they follow audiences • Advertisers will plan campaigns cross-media and will demand better measures of overall reach and effectiveness • Audit bureaux that focus solely on print will shrink and may become unviable – e.g. Denmark’s ABC closed • Bureaux can widen activities to cover emerging media eg events, OOH, mobile apps • Bureaux must become part of the digital conversation in their markets & develop services relevant to digital advertising.

41. What will it take to adapt to the digital world? • Collaborating with digital stakeholders • Partnering with complementary research & auditing bodies • Learning from experiences of audit bureaux worldwide • Streamlining costs of core print audits • Frequent updates to digital media standards • Bringing in new skills • Developing new products and services

42. The role of IFABC? • Help agree global measurement standards • Build relationships with global media players • Share best practice • Build data and knowledge base • Develop new joint services • ????

43. Next steps • Understand media and advertising trends (use the report) • Collaborate with bureaux who have already tried new services (use the report to learn more) • Consult agencies/ advertisers • Broaden stakeholders & rebrand if needed • Raise profile in local media industry (figurehead?) • Speed up processes/ streamline costs • Support publishing clients • Grasp the digital opportunities • Partner where necessary; acquire new skills

44. Q&A