December is traditionally a time to look back at the year gone by, but also to predict what the year ahead might hold. We at ECI Media Management will be releasing our own predictions for the advertising industry in 2023 next week, and it is fascinating to see how they compare to predictions from other organizations. Of particular interest has been YouGov’s annual report on the global media landscape, which seeks to analyse consumer survey responses to understand how media behavior has changed over the last 12 months and what the media landscape will look like in the year ahead.
The YouGov report covers a number of topics, but the ones that particularly grabbed our attention for the advertising industry in 2023 are how Generation Z is transforming the media landscape; the challenge faced by streaming platforms, and sustainability in advertising.
Generation Z are disloyal but are fuelling growth in non-linear audio and visual media
Despite the upheaval to our lives over the last few years, it appears that global consumers are creatures of habit when it comes to media consumption, with more than eight in ten intending to either increase or maintain their consumption of all media types in the coming 12 months. There is, however, one group that are less likely to stay loyal to a media type. Generation Z – those aged 18-24 for the purposes of this survey (it did not cover children, who make up the younger half of this age group) – are less likely to stick with their media choices than older generations. This is especially the case for more traditional media activities on traditional channels such as TV, radio and print.
This may be worrying for marketers, but it is counteracted by a brighter finding. Young adults who have maintained or increased their media consumption of each media type in the last 12 months are much more likely to increase their consumption of all media activities in the coming 12 months, compared to older generations. This is especially the case for digital media: growth driver scores for 18-24-year-olds are at 46-48% for streaming music, accessing websites and apps, streaming video and social media, compared to just 15% to 24% for over 55s. The key takeaway for marketers is that, while inspiring loyalty amongst younger consumers can be more challenging, if they can be attracted and retained, they are highly engaged and are more likely to spend more time with the channel in question.
Streaming platforms will face a challenge winning and maintaining subscribers
The streaming companies profited from the stay-at-home orders and lockdowns around the world during the pandemic. However, life has more or less returned to normal for most people around the world, and many of them are facing a cost-of-living crisis, so it’s perhaps unsurprising that consumer intentions to subscribe to streaming platforms is challenged. What’s more, while throughout the pandemic Netflix and Disney+ ruled the streaming roost, they now have a plethora of competitors vying for consumers’ attention.
The YouGov report found that while the growth of streaming services is plateauing – 26% of consumers are likely to increase their viewing in the next 12 months, compared to 35% last year – 37% of consumers currently plan to continue using their SVOD services next year, a higher figure than other types of paid-for content. 13% of consumers don’t currently pay for streaming services but would consider subscribing next year, while a similar proportion (14%) are considering cancelling their current subscriptions. Interestingly, subscribers aged 25-54 are more likely to continue with their subscription services than those aged 18-24.
Those who plan to continue their subscriptions are influenced by different factors than those who are considering subscribing in the coming year. The ‘continuers’ will continue to subscribe as long as their SVOD provider caters to their entertainment needs; ‘potentials’ need assurance that they will make full use of the service they pay for, and that the content offering they receive will provide them with something they cannot get for free elsewhere. They are also eager for flexibility and to avoid being locked into a long-term contract.
As we discussed in a recent blog, the launch of ad-supported tiers by Netflix and Disney+ is a big move for both consumers seeking to save money, and for advertisers seeking to reach them.
A new era in green advertising
Echoing a blog post we published a couple of weeks ago about how the advertising industry can reduce its carbon footprint by addressing the impact of online advertising campaigns – and this is an issue that is raised by the YouGov report as well. It found that 67% of Americans cite sustainability as an important issue, while eight in ten UK consumers consider it to be a key topic of concern as well. More than half of British and American consumers state that sustainability in advertising is important to them – so advertisers and publishers need to be able to address the increasing concern around the impact of the ad industry on the environment. While the most obvious culprit might be the print and OOH industry’s use of paper, it is in fact the digital ecosystem which is potentially more problematic, as it requires a huge amount of energy to power the internet, making it a significant contributor to greenhouse gas emissions.
The environment is an issue that isn’t going away, and what brands are doing to protect the future of the planet is an increasingly important consideration for consumers; it remains important to them even when they have other issues such as the cost of living on their minds. In 2023 the advertising industry should take this as a directive and opportunity to communicate and validate their environmental credentials, both at a product and supply chain level but also in their advertising practices.
Early next week, ECI Media Management will be releasing a whitepaper with our key predictions for the advertising industry in 2023. The paper will focus on issues that are of particular relevance to how media budget is allocated, including streaming, online advertising and the role of TV. And we will of course explore each of those issues and many others in more depth on our blog, ECI Thinks throughout 2023.