Australia

Toby Barbour on Starcom’s 2017 Media Futures Report

By March 2, 2017 No Comments

Australia’s advertisers expect to cut their spending on subscription TV for the first time in the industry’s history according to predictions in Starcom’s 2017 Media Futures report, while free to air television could return to growth.

The annual survey of advertisers said spending on subscription TV was predicted to drop by 1.6%, down from last year’s prediction of 2.6% growth.

By contrast to the expected end to growth in the subscription TV sector, advertisers signalled that they will turn back to free to air TV which is predicted to grow 1.6% compared to last year’s prediction of 2.6% decline.

After questions were raised last year about the transparency of online video views data, Starcom has also predicted growth in spending on online video will almost halve compared to a year ago, down from 11.6% last year to a predicted 6.1% in 2017.

Magazines are expected to bare the brunt of the flight from print, with advertisers expecting spending on magazines to drop 6.6%, a marginal improvement on last year’s 7.1%.

Newspapers are predicted to dip by 5.5% and cinema by 3.6%.

Asked about above the line plans, only 60% of marketers said they planned to use newspapers in 2017, down from 67% last year, while 68% planned to include magazines in the mix, down from 76%.

Plans for social media have reached saturation point for the first time, with 100% of respondents having it on their plan compared to 98% in 2016.

Starcom CEO Toby Barbour said that the survey was seeing some adjustments in the minds of both senior marketers and media companies.

“I think there is a sentiment of some cautious optimism,” Barbour said.

Overall Starcom predicts growth will run at 1.8% for 2017, down from 2.8% last year.

One of the key findings of the 2017 survey was the growing gap between the views of business being able to meet customer expectations compared to the actual customer experience.

The report found the consumer expectation gap was growing as businesses scored themselves far higher than consumers on their ability to give customers what they want.

In the alcoholic beverage sector businesses scored themselves 63% higher than consumers on meeting expectations, while in airlines the gap was 61%, 52% in banking and 48% in beauty.

“Customer experience is failing the customer, Barbour said.

“We can see those businesses leading in CX are achieving six times more growth than the laggards.

“But CX in its current form is not tailored to consumer needs in 2017. There is an expectation gap between the perception of business capability and the reality of customer satisfaction. Businesses are at risk of prioritising data over people. Business and media as an industry need a pivot.”

Barbour said the industry needed to ask if channel planning should die.

“The first thing is to rethink data because customers, people, humans, they are more than just what the data tells us,” he said.

“In asking customers for data we set an expectation and this creates a gap if we don’t then add a perceived value for them.”

Barbour warned that companies needed to shift from customer experience to human experience to narrow the expectation gap by using data to predict human motivation and human desire, rather than simply measure what their behaviour had been.

He said this was being accomplished by replacing channel planning with experience design.

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