The Year in Context: 2019 Media Marketplace A GROUPM PUBLICATION DECEMBER 2018 CONTENTS INTRODUCTION 4 MEDIA’S YAWNING GAP 6 THE FORECAST IS NOT OVERCAST 10 MARKET PREDICTIONS 14 CONTENT WITH CONTENT 30 AV EVOLUTION 34 PRESS ON WITH DIGITAL 38 DIGITAL SAVED THE RADIO STAR 42 OLD AND NEW IN HARMONY 46 NAVIGATING THE AMAZON 50 SAFETY CATCH STILL ON 54 DATA-DAY-DATA 58 GroupM 3 Christchurch Square SUMMARY 62 Dublin 8, D08 V0VE GroupM is part of WPP Plc and is the holding company for Mindshare, MediaCom and Wavemaker. All rights reserved. This publication is protected by copyright. No part of it may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, elec- tronic, mechanical, photocopying or otherwise, without written per- mission from the copyright owners. Every effort has been made to ensure the accuracy of the contents, but the publishers and copyright owners cannot accept liability in respect of errors or omissions. Readers will appreciate that the data is as up-to-date only to the extent that their availability, com- pilation and printed schedules will allow and are subject to change. 2 | THE YEAR IN CONTEXT: 2019 MEDIA MARKETPLACE 3 | THE YEAR IN CONTEXT: 2019 MEDIA MARKETPLACE INTRODUCTION INTRODUCTION On behalf of everybody at GroupM, we are delighted to be able to Our job is to provide context, clarity, guidance and solutions for our share our second annual publication, which sets out the Irish media clients and this is what we constantly strive to do. marketplace in 2019 and the challenges and opportunities that lie ahead. We have gone further and taken a deeper dive into each individual Our booklet is very purposefully designed to be different from those medium to analyse what is driving change, the causes of each of these produced by other large advertising holding companies in that ours and, importantly, what it means for our clients and their business. is significantly more practical and provides more context for what is We explain how our role as media buyers will evolve in 2019 and the happening, rather than just giving predictions. additional layers of true value that we can bring. The focus of all the content in this publication is to lay out the facts, Economically, one of the most impactful events to hit us in 2019 will analyse why the market is moving in a particular direction, identify be Brexit, and we simply don’t know what the full extent of this will be, BILL KINLAY the challenges or opportunities that these moves will create, and then but undoubtedly the impact will be more negative than positive. The CHIEF EXECUTIVE OFFICER provide a GroupM driven solution to help our clients navigate these potential impact of Brexit, as best as we can forecast it, is built into all challenges or take full advantage of the opportunities. our numbers and is very much at the forefront of all our thinking. Once again, delving into more granular detail – in relation to category Significant opportunities exist in the areas of VOD, Programmatic, changes and their impact on the market – allows us to be more specific Social, Community Management and Research and our teams at and, hopefully, more accurate about cause and effect. GroupM, and our agencies, would love to talk to you about these areas and the advantages that we can bring. The technology driven changes that affect our daily lives continue at a rapid pace and the impact of these changes on the media marketplace, This booklet is designed specifically for clients and its purpose is to in particular, is unprecedented. Technology is moving faster than provide you with information, explanations, clarity, guidance and the human mind can cope with and this provides challenges and perspective on a market that is becoming increasingly difficult to opportunity in equal measure. predict, to navigate and to extract real business value from. Traditional consumption habits are being completely turned upside We hope you enjoy it, and we would be happy to take any feedback or down, and the new marketplace, in virtually everything that we do, comments that you have on our content. is now fully established and operational. This is happening across all sectors of society and across all age groups, albeit at a different pace for some, but the rapid changes are consistent. 4 | THE YEAR IN CONTEXT: 2019 MEDIA MARKETPLACE 5 | THE YEAR IN CONTEXT: 2019 MEDIA MARKETPLACE MEDIA’S YAWNING GAP MEDIA’S YAWNING GAP It may be something to do with the looming spectre of Brexit and the A LITTLE RATIONALE BEHIND MY POSITIVE STANCE: ‘Ireland’s economic uncertainty that surrounds March 29, 2019, but there’s no doubt this is a time when there’s a heightened level of consideration as to the position I was lucky enough to get invited to the Liberty Global Board Gala indicators, almost of the Irish nation, in relation not only to our closest geographical Dinner at Christchurch Cathedral in July. This was an event that marked neighbour, but also to Europe in general. the Liberty Global Board members hosting an annual board meeting in a without exception, country of importance to their business. Likewise, the same introspection is also taking place within our own are impressive‘ media industry, not just because of the level of uncertainty that Brexit For those who don’t know who Liberty Global are and what they do, brings but also because, as we all know, the media agency business apart from owning Formula 1 globally, they are the holding company model is undergoing serious examination. for many media and communication-led companies, of which Discovery SIMON CRISP Channel is one and Virgin Media another, which, incidentally, was GENERAL MANAGER Clients are looking for a greater return on their spend than ever before named as Liberty’s best individual business performer in their 2017 and, additionally, media owners are looking to unlock greater returns annual results. from their assets, as indeed, they are all pressured to compete on ‘Clients are what may be considered uneven playing fi elds, against the ‘FAANGs’ Liberty Global also has huge cable assets across the US; they are one (Facebook, Apple, Amazon, Netfl ix, Google). of the major media players in the world and the man that built the looking for a company – John Malone – is now the biggest landowner in the USA, to greater return on For those of us who work for companies that are not one of the FAANGs, boot. there’s a reality that means our earnings are under pressure and the their spend than relatively fl at media market outlined in this handbook means we don’t Malone discovered his Irish roots in recent years and he’s been buying have the luxury to be anything other than more effi cient, smart and up many Irish assets, including stud farms, hotels and land, to the tune ever before ‘ inventive as we try to run our media businesses in 2019. of a cool €300 million, to date. When asked why he’s invested such a hefty sum in Ireland, he responded with one word: “stability”. And, Basically, nothing is going to come easy to us as an industry in 2019, yes, he is of course right; Ireland’s economic indicators, almost without but this might just be a god-send, spurring us on to future-proof our exception, are impressive and despite the accusation of ‘leprechaun businesses expeditiously. If we were entering a 2019 market that was up economics’, the underlying indicators are strong and genuine. ‘Spurring us on – let’s say by 10% – maybe we’d have been ignoring the challenges of the underlying business models we are working within right now. Also, we haven’t lurched too far to the Right, remaining largely to future-proof Centrists, all of which, on the face of it, is attractive. Plus, add in all our businesses’ I’m not suggesting we’d have been lazy but when there’s a little more the well-known factors, including a positive corporate tax regime, cash in the coff ers, most of us will naturally relax rather than attack the and what’s not to like about Ireland from an investment and business challenges surrounding us. It’s just human nature, and I see no reason perspective? why our industry would have reacted any diff erently; disruption doesn’t come when we are at our most comfortable. Moving back to our own media world, more specifi cally, what does Ireland off er that, perhaps, other territories can’t deliver? ‘Our industry’s Our industry’s challenges aren’t local, as we know, there’s a worldwide focus on the very same media tasks we have here in Ireland. However, Well, within a stable economic and mature marketplace, our size is challenges aren’t we have many reasons why Ireland has the very strongest of narratives critical to future success. We are perfectly positioned to be the media local’ and we should be extremely positive about our position within, not just test-bed of Europe and, in some cases, the world. the European media scene, but also further afi eld. 6 | THE YEAR IN CONTEXT: 2019 MEDIA MARKETPLACE 7 | THE YEAR IN CONTEXT: 2019 MEDIA MARKETPLACE MEDIA’S YAWNING GAP MEDIA’S YAWNING GAP ‘Media owners Referring to Liberty once again, there is no doubt, in my opinion, they We can be more effective than larger territories for a couple of good ‘Eventually are testing the Virgin Media Ireland model forward to a point whereby reasons: with a global the success of a future ITV UK bid can be measured effectively.