Digital disruption, the democratisation of content, advertisers requiring more diverse media sources – PwC’s 2021 Australian Entertainment & Media Outlook is a dream for targeted media brands.
There are five major power shifts that have occurred in Australia’s media landscape over the course of COVID-19, according to PwC’s Australian Entertainment & Media Outlook 2021-2025, and they represent some really good opportunities for publishers with targeted audiences who are willing to review and adapt their offer.
The 20th edition of the Australian Entertainment and Media Outlook brings together the perspectives of PwC partners and industry experts, who look at how the industry has changed with the pandemic and the shifts reshaping the market.
It also notes the financial performance of 12 market segments over 2020 and provides projections for 2021-25. I’m choosing not to focus on these figures because:
- I don’t feel that the data is as relevant to targeted media brands as it is to larger, generalist publications. Setting aside the challenges that travel and sports-related titles experienced in 2021, the significant decline in magazine revenue (-27.3 per cent) is likely skewed by the closure of Bauer’s (Are Media’s) eight titles after being purchased by Mercury Capital.
- It’s much more valuable to look at the shifts that PwC has identified, and the practical steps that print and digital targeted media brands can take to leverage them.
So, let’s dive into the key shifts in power that PwC has identified impacting Australia’s media market.
5 major power shifts
The first and “most powerful” shift identified is the macro shift to digital media consumption as consumers stayed at home and in-person venues shut down during the 2020 COVID-19 pandemic.
Demand for at-home internet connectivity increased over 2020, driven by:
- a 38 per cent increase in download volumes;
- growth in online shopping as brick and mortar stores shut storefronts; and,
- the replacement of in-person business and education with video meeting services and online learning.
COVID-19 ingrained these practices so much that PwC expects these practices to continue as 5G is introduced, enabling better quality viewing, listening and reading experiences for digital consumers.
The report states that this macro shift is in turn driving:
- Control shifts where power moves to the consumers who are spoilt for choice in what they consume, moving away from traditional platforms such as television, newspapers and out-of-home entertainment, to competing digital media platforms and channels.
- Creative shifts that move power to the creators and originators via the “democratisation of content” through platforms like TikTok, Twitch and YouTube, where consumers are choosing to spend their time watching content across multiple online video platforms rather than solely traditional media channels.
- Location shifts where consumers have high expectations of their consumption experience, preferring not to be tied to a traditional method of distribution, but wanting the ability to access what they want, from wherever they are, on any device they choose.
- Regulatory shifts where the focus on market power and privacy intensifies, which have an impact on media’s product and service offerings, customer engagement strategies, business models; and, change the relative strength of participants, altering the way profits are created, and reconfiguring the industry.
Let’s explore these power shifts as they relate to targeted media publishers.
Consumers are gravitating to ad-free services
Spoilt for choice in what they consume, consumers have moved away from traditional media platforms, instead seeking digital media platforms and channels that offer ad-free experiences.
“One of the most profound impacts we’ve seen from digital disruption in recent times has been the increased use and prevalence of non-advertising supported platforms,” PwC Australia Partner Samantha Johnson said on the release of the report.
This has largely been driven by the growth in audiences across non-advertising supported streaming services such as Netflix, Amazon and Stan, as well as streaming sports services, but can also be seen online.
“The shift in weighting from advertising revenues towards consumer-generated revenues has accelerated, forcing a number of key players to rethink their business model, in a world where the expectation is that consumers can access an ad-free or personalised service, but they have to be prepared to pay for it,” said Johnson.
Adapt: membership models
For consumer magazines and digital platforms, this could mean the time is ripe to deepen reader relationships by exploring a reader-revenue-supported membership model. The challenge here is then to find the right balance of value, resourcing, scalability and price-point.
Some resources to get you started:
- Thinking about a paywall? Read this first
- How to map your your reader paywall strategy
- How to build an online community to drive engagement and purchase intent
- What publishers can learn from membership programs
Content has democratised and video reigns
Time spent on multiple online video platforms, such as YouTube and TikTok is increasing across core demographics.
PwC found that younger consumers often have little interest in traditional media, instead choosing platforms that distribute “lightly-produced authentic content”.
“This dichotomy is fueled by twin forces: the shift from older to younger consumers, the latter of whom are increasingly setting the trends and dominating the conversation, and the shift from producers to creators, the latter of whom are increasingly benefitting from reward mechanisms for attracting and retaining audiences,” the report states.
The ability for content creators to monetise their work without a third party (beyond the platform they choose, whether it be YouTube, TikTok or Substack) puts pressure on the business models of traditional media outlets.
Video advertising also increased by 17.2 percent to A$1.9 billion, making it the fastest-growing digital advertising segment. Video made up more than 50 per cent of general display advertising revenues in 2020.
Adapt: develop a video strategy
The benefit of creators driving interest in video content is that you don’t have to have an expensive set-up to compete. If you don’t currently include video as part of your content strategy, think about how you might incorporate it into your production schedule:
- What kind of topics are your audience engaging with on video-led platforms?
- How can your written articles be enhanced with video?
- How can your current content be repurposed across YouTube and other online video-led platforms?
- Define your audience strategy around video-led platforms – is it necessary to drive traffic back to your website? Or build brand awareness elsewhere?
- How can you monetise your video strategy?
- Does your platform support video display advertising as an option for your clients?
Advertisers are facing challenges that can be leveraged by targeted media brands
The diversification and democratisation of media available to consumers has presented challenges for advertisers looking to reach audiences at scale and deliver a consistent message over time.
PwC Australia Partner and Technology, Media and Telecommunications Consulting Leader Laurence Dell said advertisers and brands seeking to get in front of their consumers had to rebalance their media and creative strategies in order to achieve their required reach.
“While targeting through digital and programmatic channels certainly played a role, the ability for a consumer to scroll past, skip or opt-out of an advertising message, coupled with the fact that large segments of the population are spending less time on advertising supported services, means that creativity in execution and sound channel planning has never been more critical for brands seeking to attract and retain new customers,” said Dell.
PwC’s report states that the challenge for the advertiser is to meet the consumers where they are, which means taking a more considered and diversified approach.
In addition to this, the internet advertising segment is entering a period of disruption, as leading consumer-facing players (Google’s Chrome browser and Apple) announce their privacy-centric approaches that change how they will allow consumer data to be collected and used.
“Though Google has since delayed the implementation of its signalled change to disallowing cookies within its browser until 2023, these developments will take effect over the forecast period, and shift far more of the power over control of data into the hands of the consumer.
“Advertisers using online channels will grapple with these changes to tracking, segmentation, and targeting of audiences leading to a forecast decline in banner-type display advertising over the forecast period,” the report states.
Adapt: sort your first-party data and collaborate on bespoke solutions for your clients
This development is really exciting for media brands with targeted audiences because it highlights the value that you provide over generalist media brands. Now is your time to shine. Now is the time to build relationships with brands that are a good fit for your audience but may have declined your offer in the past.
- Double down on your audience data: make sure you know as much as possible about your audience demographics, behaviour, interests and purchase intent.
- Consider how your audience data is being captured, processed and communicated in the ebay way to drive advertising revenue.
- Does your content management system and CRM provide you with the appropriate insight into your audience’s behaviour?
- Expand your conversations with clients: in addition to rate card options, talk to clients about bespoke campaigns that meet their needs
- Consider content-related options (including video) to suit your advertising clients and audience.
Refine and adapt to support a diversified media market
“Almost every part of the entertainment and media sector has had to refine and adapt their offering and the business model that underpins it as a result of the new dynamics of consumer control, digitisation and the finite nature of consumers’ attention, budget and time,” PwC states.
This puts content at the fore – unique, quality content that delves deep into consumers’ particular areas of interest will reign supreme – but it must be offered where consumers choose to spend their time.
“As companies race to meet consumers where they are with an ever-expanding range of products, services, and experiences, the entertainment and media industries will grow more pervasive, more immersive, and more diverse,” said Johnson.
As Justin Papps, PwC Australia Partner and report Editor, concludes, “As we emerge from the pandemic, industry players who take stock of the shifting environment, and evolve their strategies and business models to embrace the new consumer behaviours, will come out on top.”