The global media outlook for 2018 is looking to be disruptive and exciting. Over the past few years we have seen technology companies disrupt traditional media by taking away their audiences and advertisers. The name of the game for 2018 will be content, quality and distribution. We see technology companies increasing their scale and offerings by the likes of Netflix and Amazon but also see more challenges for Google / YouTube and Facebook in terms of the quality of user generated content.
Digital media has its speed and scale, with low cost of content consumption giving access to billions of people around the world. Over the past decade we got to see the power and benefits of internet platforms and social media but this past year showcased the various threats that these internet platforms with their powerful scale and reach play. Facebook and Google have been put under major pressure this past year for the content published/hosted on their platforms, most of which are user generated. These two companies have the distribution but don't own any content, it relies on users to generate content for them, these platforms also does not in any way edit or curate the content published on their platforms. These free passes that they give to their billions of users allows users to publish any kind of content they wish, even explicit content and fake news. We all know of the implications that fake news played in the 2016 USA presidential elections but also the amount of fake news being shared by people on these platforms. There are now many advertiser concerns like bot traffic, fake advertising inventory, explicit content, ads appearing along explicit content and fake news websites. As the digital media concerns show the weakness of digital, what now has to happen is for digital platforms to work more closely with publishers to get more premium editorial content on their platforms. The real key to digital platforms are more editorial content which they have to pay for or acquire companies with these skills and intellectual property. This is why we hear of Walt Disney and Fox in talks of a major acquisition. Consolidation of content and distribution from the traditional side. Companies like Disney now want to go direct to consumers and create a real one to one relationship with them and also control all the data that is generated.
A major force we will see take shape in the advertising space will be Amazon. Their prime video offering is now in reports that they will in future offer prime video free to consumers with advertising shows major market share shift from Google. Amazon combined with its technology devices give advertisers a compelling offering to reach customers who are able and willing to buy. A major shift in media and marketing is the fall of the advertising giants like WPP and Omnicom. These group were created for scale and buying power, but you don't really need that scale and buying power when negotiating for adverting inventory. WPP has seen its stock price drop to record lows and shows how decreases in cpg companies advertising expenditures effects the entire marketing and media industry.
The year 2018 will see digital advertising grow in revenue but we will see massive consolidation and the powers of technology companies put on notice.
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