DIGITAL MEDIA DIGEST: AUG‘18
A monthly look at the world of digital from NORTH’s point of view
Net Neutrality Rollbacks & Consolidation Loom Over Streaming Growth
By Caroline Desmond, Director of Media Strategy
The growth of streaming TV continues to outpace projections, and this has implications for how consumers discover new programming and how media buyers find audiences. It also places streaming TV at the mercy of Internet Service Providers (ISPs) no longer subject to net neutrality regulations — ISPs who are increasingly consolidating with other telcos to form media super powers.
According to a new eMarketer study published just last month, cord-cutters — defined as people who have cancelled their pay TV service and do not plan to renew — will account for a third of the U.S. population the end of 2018. This is significantly higher than previous projections which estimated cord-cutters would only make up 22% of the U.S. population by the end of the year.
As traditional television companies continue to see year-over-year declines, eMarketer has increased its future viewership estimates for streaming television providers including YouTube, Netflix, Amazon and Hulu. One report published earlier this year and reposted by Mediapost reported that “nearly 70% of U.S. TV viewers subscribe to one of the big three subscription video-on-demand services — Netflix, Hulu, or Amazon — up from 49% in 2014.” One of the biggest factors fueling this growth, says eMarketer, is the draw of the original programming offered by streaming providers in addition to new options that allow subscribers to add on live TV options as part of streaming packages. For example, Hulu Live allows consumers access to live sports, news, and entertainment programming in addition to Hulu’s entire streaming catalog for only $39.99 per month.
With the rise of cord-cutting and streaming as the primary means of household TV viewing, the way consumers discover programming fundamentally changes. Gone are the days of “must-see TV” viewing where hoards of viewers would tune in live for weekly broadcast events like ABC’s TGIF Friday night lineup that ran from 1989 to 2000, or NBC’s primetime Thursday night block that dominated ratings in the 90’s. The beauty of these “it” broadcast events was that the networks could rely on them to drive discovery of new programming. New programming could piggyback on the coattails of successful returning series. Viewers not wanting to miss a moment of their favorites would tune in early and thereby discover new shows. (And advertisers could count on these weekly broadcast events to reach mass quantities of attentive viewers.)
In contrast, streaming platforms like Amazon, Netflix and Hulu have turned this model on its head. Streaming platforms have trained viewers to watch on their own timetable. Streaming platforms are also geared toward show specific searches or passive browsing through a catalog of shows across a multitude of networks. Networks can no longer rely on the programming block to aid show discovery, and shows must be marketed directly to consumers who are no longer loyal to a particular network.
What this also means is that advertisers seeking to reach television viewers are better off buying based on an audience versus a network upfront deal. Tactics like programmatic television enable advertisers to overlay rich audience data onto linear TV inventory to find specific audiences wherever and whenever they watch. Similarly, advertisers have increasingly invested in connected TV inventory — ads that run within video apps on internet connected televisions including ad supported video apps like Hulu. In fact, ad spend within connected TV inventory is expected to double this year to $8.2 billion and grow to $20.1 billion by 2020.
Traditional television networks are taking note of the additional time consumers spend on streaming services. As a result, companies like Discovery and Disney have created new roles charged with developing direct to consumer streaming services. One of the biggest challenges these networks hope to solve is how to create and maintain direct relationships with consumers. In the past, the networks would acquire viewers through cable providers that sold their programming as part of a cable package. Now, as consumers take a more a la carte approach to cable programming, networks must, more than ever, develop content that competes with the streaming originals to maintain loyalty.
Although the traditional television networks face their own challenges, it’s not all smooth sailing for the streaming platforms. The recent rollback of net neutrality regulations could present significant issues for some streaming TV providers. As a quick review, net neutrality basically says all traffic on internet should be treated equally. The previous regulations would have prevented an internet service provider like Comcast — which owns NBC — from slowing down connection speeds when someone views content from a competitive content provider — Netflix for example.
The rollback of net neutrality regulations is particularly relevant in light of increasing consolidation among media companies. Consider the recent acquisition of Time Warner by AT&T, for example. The Justice Department has already announced plans to appeal a district court ruling allowing the merger to go forward, but some say the odds of winning the appeal are slim. On the one hand, this kind of acquisition allows cable companies like Time Warner to acquire additional data on consumers that will be useful to market their own direct to consumer streaming services. On the other hand, these acquisitions place more power in the hands of companies like Time Warner that are also internet service providers (ISPs). This combined with rolled back net neutrality regulations could mean greater advantage taking by ISPs that hurts streaming services like Hulu, Netflix, or other new startups in the streaming category that currently democratize access to content. Consumers stand to be hardest hit if this is the case, but advertisers could also feel the pinch if too much power is consolidated into the hands of the few. Competition in the TV buying landscape means better rates and pressure for media companies to innovate. As with many emerging media trends, time will tell.
Hispanic & Latino Media & Purchase Trends
By Devon Brown, Performance Marketing Manager
The hispanic population is the fastest growing demographic in the U.S. They currently make up 17% of the population, about 57 million people, and that percentage is expected to grow rapidly over the next 25 years. Currently, over half of hispanic households make more than $60K per year, and 25% make more than $100K per year. They account for a lot of buying power in the US, and with them come some distinctive media and purchase trends.
Media Trends
Online TV
74% of affluent hispanics watch TV online. Most Latinas are bilingual and live in bilingual households, therefore they choose streaming services that offer a rich variety of both english and spanish content. Hulu, Netflix and Sling TV are most popular among Latina audiences because of their bilingual offerings. They are also the fastest growing demographic for streaming tv service subscriptions, with an average 8% year over year growth.
Radio
94% of Latina woman over the age of 18 listen to AM/FM radio, averaging 13.5 hours per week, which is longer than non-hispanic caucasian women. The majority of content consumed on radio includes: Mexican Regional (14%), Spanish Contemporary (11.5%), Contemporary Hit Radio (10.4%), and Adult Contemporary (8%).
44% of Latina women listen to digital and streaming radio services, such as Spotify or Google Play, which is 10% higher than non-hispanic caucasian women. They are 35% more likely to download content from these services as well.
Social Sites
Hispanic communities are heavy users of Facebook, Instagram and LinkedIn. They spend an average 17.2 minutes on Facebook per visit, which is comparable to caucasian demographics, 38% of hispanic people are on Instagram compared to 28% of non-hispanic caucasian adults, and they visit LinkedIn 49% more often than other demographic groups.
Website Verticals
Beauty and financial website visits index higher among Latina audiences compared to other demographics. Latina women are 172% more likely to to visit cosmetic and fragrance websites, and they make up for 20% of all female visits of financial websites.
Influencers
Influencers are a big part of Latina culture. Consumers trust the opinions, recommendations and referrals that come from people they feel have had a similar life experience to them. Instagram influencers such as LeLe Pons and YouTube star Willy Rex command millions of followers, and have been featured in mainstream music videos, commercials, awards shows, and more.
Buying Trends
Beverages
Hispanic demographics outpace caucasian demographics in 9 out 10 beverage categories. Sports drinks,energy drinks, soft drinks, and juice drinks were particularly popular.
Health and Beauty
Latina’s outspend caucasian women by 4% in cosmetics, deodorant, women’s fragrances, and hair care. This indicates they care deeply about their appearance and general hygiene, and are willing to spend money on healthy and beauty.
Athletic Supplies
35% of Latina’s run or jog, compared to 22% of non-hispanic whites. They also participate in a variety of sports and activities. Therefore, they frequently shop at sporting goods stores and spend 10% more on athletic equipment than non-hispanic caucasian women and families. Luxury athletic shoes ($500 or more) were particularly popular, followed by athletic clothing under $100, athletic shoes under $100, and sports equipment under $100. Activities noted include aerobics, softball, basketball and soccer.
Conclusion
The Latina demographic is a huge opportunity in the US. To successfully target younger, affluent Latina’s, streaming radio, streaming tv, and social sites would all be ideal. Additionally, because Latina’s use media and content to stay close to their heritage and culture, bilingual content and proper representation should be adopted in order to gain population preference and loyalty. Key categories of growth are beverages, health and beauty, athletic supplies, and sporting goods.
Digital Worship: Religious Organizations As A Case Study For Reaching Younger Audiences
By Izzy Kramer, Media Planner
Religious organizations, like many other traditional organizations, are increasingly challenged to engage younger audiences. To do this requires an ability to adapt and invest in emerging media technologies. And like a business, keeping a church running requires funding. Generally, that money comes from donations from their members, but this is becoming increasingly difficult as older generations give way to a younger audience less likely to be affiliated with a particular church. According to Pew Research, “35 percent of millennials are unaffiliated with organized religion, as compared to about 23 percent of all Americans.”
There are many lessons to be learned from what modern churches are doing to engage Millennials and foster long-term loyalty. This article highlights a few of those lessons that are highly relevant to any traditional business similarly challenged to stay relevant and engage a younger audience.
It would seem the experience economy driving Millennial generation should be naturally receptive to church-going; it’s the OG group gathering. But younger generations are not replacing the spots left in the pews of their older counterparts for various reasons. Religion has a reputation for exclusivity and conformity with conservative values that can be off-putting for younger people whose views differ.
From a 2016 interview with Michael Hout, a professor of sociology at New York University, he says “what we see across all denominations is a gap emerging between politically liberal and moderate young people and leadership among conservative churches who are taking political positions on abortion, gay marriage and other social issues. When that happens, people who are politically liberal and not active in a particular church often put distance between themselves and organized religion . . . moderates show the same tendency, just not as clearly. As a consequence . . . 31% of political liberals who were raised in a religion had no religious preference compared to just 6% of political conservatives.”
However, just because there is a lack of affiliation doesn’t mean Millennials aren’t searching for spiritual experiences. From the same interview Hout says, “people assume that people who do not belong to an organized religious group reject religion altogether. But many . . . believe in God and heaven. And spiritual experiences are still attractive for people who don’t go to church.”
All of this to say, this provides a key opportunity for religious groups to reach spiritual-seeking Millennials. And that is where we are beginning to see a shift in how religious organizations are presenting themselves and pushing their parishes into the 21st century. Enter “cyber church”. Cyber church is the overarching term that describes how religious groups use the internet to facilitate its religious activities. These digital tactics not only help churches gain younger members but, more importantly, retain the following.
For example, Zoe (pronounced zo-ay) Church in LA packs the El Rey Theater to the brim with active members. But they weren’t always this popular. After losing their church back in 2014, they had to rebuild themselves, developing a new website and turning to the company PushPay for further mobile assistance. PushPay (originally developing eChurch) is a mobile app developer that focuses on connecting communities, primarily religious groups. Similar companies such as The Church App and ChurchBase also have the same objective creating a niche category.
Overall, the entire church experiencing is evolving to become more digital thanks to companies like these. Let’s take PushPay for example. PushPay works with a church to develop a personalized website and app that allows members to engage with their community. For example, through PushPay, a church member can connect to “live streams, sermons, videos, and other media” from their church. This all allows members to engage with their church without having to physically be there, if they opt not to attend a service. Church members can also then share this media either with other patrons of their church or broadcast about their church on other channels. In theory, the flexibility cyber churches offer increase member retention rates.
But it doesn’t stop at sermons and live streams, the primary purpose of companies like PushPay is enabling mobile payments between registered church members — it’s the virtual collection plate. Via the church’s personalized website and corresponding app, members can donate whenever and wherever, not just during a church service. Traditional means of donating via cash or check are history as all donations are done via debit or credit cards and can even connect to digital wallets. These apps also allow for debit/credit information to be saved as well as automatic recurring payments for easier donating. This plays right into the pocket (literally) of Millennials. I mean have you ever seen someone under 40 write a check?
Furthermore, while donating is available on desktop, PushPay drives mobile app downloads through mobile participation text keywords, desktop promotion of the app, and app promotion served to first-time givers. It is key that mobile app usage is being pushed as it is another tactic to reach a younger audience who already dwell and engage on mobile and are behind the upward trend of mobile usage year over year.
Let us revisit the church I mentioned before, Zoe. I didn’t just bring them up just because they are the poster child for PushPay. Zoe Church uses other means of digital technology to reach and retain Millennial members that I believe other religious organizations will use as well. For example, Zoe Church hosts an annual Zoe Conference broadcasting this event through their YouTube channel and Zoe TV on their website. They have put together a fashion line with clothing designs attractive to younger audiences all available via their eCommerce platform. And the latest development, Zoe Church just dropped their first EP on August 10th. It is available on all major streaming service including Apple Music and Spotify. The EP is highly produced and sounds like anything else you’d find at the top of the charts. All of these tactics are means of having a presence where younger audiences already are on online.
All in all, religion is a touchy subject. It’s right up there with money and politics. But as a I mentioned before, traditional businesses can learn from what modern churches are doing to engage Millennials. Like any traditional business, religious organizations and churches require support from its members to keep going. And what we see happening among religious organizations seeking to inspire a new generation of fellowship, is also a great case study of a traditional organization adapting to modern to technology to maximize engagement among a younger audience.
