The Polar Report

The Polar Report: Industry Insights #18

April 19, 2023

Welcome to The Polar Report, a curated view of what’s happening in the world of Digital Monetisation, Audience Development and Measurement. This week we dive into whether Elon Musk’s optimism in Twitter's ad revenue was misplaced, the impact the NFLs Sunday ticket bundle could have on YouTube TV, gamers utilising FAST and SVoD services more than CTV users, and the debate surrounding when an impression is not an impression within the media industry.


Elon Musk’s Optimism on Twitter’s Ad Revenue Recovery is Falling Short

Last week, Elon Musk, CEO of Twitter, spoke to BBC in an exclusive interview and expressed his optimism about the app's recovery from the losses it incurred when advertisers stopped trusting it after he acquired the company. However, new data suggests otherwise. Ad revenue on Twitter is recovering at a slow pace, and several statements from Sensor Tower and Insider Intelligence indicate that advertisers are hesitant to return.

Ad spending on Twitter was down by almost 20%, and Twitter's top advertisers spent $83 billion in the past two months, a decline of nearly $102 million from the first quarter of 2022. Insider Intelligence predicts that Twitter's global advertising revenue in 2023 will be 37% less than initially predicted, a decline from $4.1 billion to $2.9 billion. 

Before Musk's takeover in October, Mondalex International and Coca-Cola were among Twitter's top 10 advertisers, but they are not listed in the top 50 for the past two months, according to Sensor Tower. Mondalez International expressed concern about its advertisements being aligned against hate speech. Other leading advertisers, such as Volkswagen, have confirmed that they are not interested in resuming advertisements on Twitter.

Arguments could be made that advertisers are more interested in apps that provide them with a higher return on investment, and Twitter may not be one of them, particularly after Musk's acquisition. 

Despite its popularity, Twitter is facing several challenges, such as competition for marketing budgets during a period when many firms are cutting ad spending due to the global economic situation.

Full Article on Digital Information World

Audience Development

NFL Sunday Ticket Bundle Could Boost YouTube TV Subscribers Significantly

Google has made a major move in the market for multichannel subscription services with its recent acquisition of NFL Sunday Ticket. The fully-owned YouTube TV announced pricing plans for the football package, which Google paid an estimated $2.5 billion/per year for. This deal marks a major shake-up in the market, as DIRECTV, which formerly held the rights to the games for about $1.5 billion per year, had not been able to make any money on it in years. DIRECTV had hoped to make subscribers who are football fans more loyal to the satellite video service, but it could never get the economics to work.

However, YouTube TV, a division of Google/Alphabet, has figured out alternate economics. Consumers can subscribe to the football package for $449/year, but if they subscribe to their internet video service, one of a number of what are called virtual multichannel providers, the cost is only $349/year. Virtual providers like YouTube TV offer a similar package of TV channels as cable or satellite, but they are delivered over the internet.

The new deal starts at the end of the 2022-2023 season and is estimated by S&P Global Market Intelligence to have gone up $1.0 billion/per season. It was not surprising that DIRECTV did not bid on the new package of football rights. When it renewed its deal with the NFL in 2015, it paid $1.5 billion per season, up 50% from the deal it signed in 2011 when it agreed to pay $1 billion per season.

To date, YouTube TV has had a difficult time penetrating the very crowded virtual multichannel provider market, which essentially provides a cable-like channel line-up but delivered over the internet rather than wired cable. However, virtual multichannel services are the only category of multichannel providers to post growth in the last year, rising 14.9% from 15.3 million subscribers in the fourth quarter of 2021 up to 17.6 million subscribers in the fourth quarter of 2022, according to S&P Global Market Intelligence.

Although the market is crowded, these different services have been able to poach millions of subscribers from traditional cable and satellite viewers. Ultimately, YouTube TV has the opportunity to grow its overall audience through package deals. If this pays off, then we could see YouTube spreading its wings and purchasing the rights to other sports packages

Full Article on Forbes

Gamers Prefer Ad-Supported Streaming Services, According to LG Ad Solutions Study

A recent study by LG Ad Solutions found that gamers in the US are more likely to watch free, ad-supported streaming (FAST) services than all connected TV (CTV) owners. The study, titled The Connected Gamer, surveyed over 700 consumers who owned a connected TV and played console games in March 2023 to explore trends and behaviours related to CTV consumption among US gamers.

The study found that nearly two-thirds of gamers spent at least two hours a week streaming via FAST services, with only about 23% streaming through their gaming console. Additionally, gamers subscribe to most subscription streaming services, over-indexing on Discovery+, Apple TV+, Peacock, and Paramount+.

Furthermore, the study found that 78% of LG TV users play video games at least once a week, with 93% of LG Gamers using FAST apps, and 67% preferring them. Women who play video games on any connected TV or device spend 4+ hours gaming per week, with 61% of female gamers preferring streaming free video content with ads.

In terms of discovering new games, 42% of gamers cite streaming ads as a way they discover new games. The study also revealed that gamers are more likely to multitask while watching TV than the average CTV owner, with 53% playing games and 50% shopping while streaming.

The study also highlighted that gaming is a social activity, with 40% of gamers with children playing with their kids 1 to 3 times a week, and 2 in 5 of all gamers frequently or always playing via local co-op on the same console in the same room.

Finally, the study found that 80% of gamers prefer seeing ads relevant to their interests, and 76% prefer seeing ads that are relevant to the streaming content they are watching. The generations with the largest percentage of console gamers are 30-44 (79%), followed by 18-29 (74%) and 45-60 (63%).

This study clearly shows that gamers are an important audience for advertisers and streaming services, and they require personalisation and relevance in their ads. Understanding the gaming audience's habits and preferences can help advertisers and streaming services create effective and engaging campaigns.

Full Article on Advanced Television


Can an impression truly be considered an impression?

The debate over what actually counts as an impression has been long-lasting. Last year, the Internation Knowledge Exchange was established to facilitate discussions on the latest developments and innovations in TV and video measurement, new metrics, and data collaboration in the media and advertising marketplace.

A webinar on the topics was considered a success as it highlighted the fundamental differences in measurement and currency approaches in Europe and the United States. Ultimately, the low down is, the European Union is advocating for a single currency for the medium through a Joint Industry Committee (JIC). Whereas the United States is exploring multiple currencies for TV and video platforms via a Multiple Currency Certifying Committee (MCCC).

Where the differences lie is centred around premium content versus user-generated and short-form content. One of the key points emphasised was the different definitions of “impressions”.

Ryan Stonehouse, Director of Global YouTube and Video Solutions at Google, stated that "an impression is an impression is an impression," referring to "viewable impressions" as defined by the Media Rating Council (MRC). However, viewable impressions are solely a screen measure of content rendered and do not provide any measure of audience engagement, such as the number of eyes or ears on the content. Therefore, it is essential to have a common currency that takes into account the quality, safety, and suitability of the content for consumers and advertisers.

BARB Chief Executive Justin Sampson emphasised the importance of content and context in measuring any currency and highlighted the superficiality of using viewable impressions as a currency, especially for "unfit for TV content."

Overall, the state of the media industry is one of complexity and fragmentation, with multiple stakeholders advocating for different approaches to measurement and currency. The need for a common currency and a consensus on what constitutes an impression or contact is crucial to move forward and accurately measuring the impact of advertising and content across platforms.

Full Article on Media Post