MediAvataar's News Desk

MediAvataar's News Desk

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WPP To Sell 60% Of Kantar To Bain Capital

Investment by Bain Capital Private Equity values Kantar at c.$4.0bn; WPP leverage target to be met a year ahead of plan; c.£1.0bn shareholder return planned

Transaction highlights

Bain Capital Private Equity’s (“Bain Capital”) acquisition of 60% of Kantar creates a strong partnership with WPP to accelerate the development of Kantar
Further simplifies and repositions WPP for growth, whilst unlocking significant value for shareholders

Kantar valued at c.$4.0bn (c.£3.2bn1) in the proposed transaction, equivalent to a multiple of 8.2x 2018 Kantar headline EBITDA2

Proceeds to WPP on completion after tax and continuing investment in Kantar expected to be c.$3.1bn (c.£2.5bn)

Potential value upside for WPP shareholders from 40% equity stake in Kantar

WPP to retain c.60% of net proceeds to reduce debt to the low end of the target leverage range of 1.5 – 1.75x average net debt/EBITDA3 for 2020
Balance of proceeds, c.$1.2bn (c.£1.0bn), to be returned to shareholders

Impact of proposed transaction and use of proceeds expected to be marginally dilutive to headline EPS in 2021

Completion and associated proceeds relating to no less than 86% of Kantar expected in early 2020, subject to approval by WPP shareholders and other customary regulatory and legal approvals

Mark Read, Chief Executive Officer, WPP, said:

“Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities. I would like to thank Eric Salama, his team and everyone at Kantar for their tremendous contribution to WPP – a contribution that will continue as we develop the business together.

“This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”

Luca Bassi, a Managing Director at Bain Capital Private Equity, said:

“Kantar is a market leader in many areas and we are excited to be partnering with its management team and WPP to build on this remarkable platform for growth. We see many opportunities for expansion and will invest in technology to expand the company’s capabilities and reinforce its global leading position.”

Christophe Jacobs van Merlen, a Managing Director at Bain Capital Private Equity, said:

“We believe that we are well-positioned to support Kantar, alongside WPP, in driving forward the business in a rapidly changing industry. Our deep sector knowledge, operational expertise and strong track record of partnering with management teams to accelerate growth gives us confidence that we can help Kantar grow both organically and by acquisition.”

Eric Salama, CEO, Kantar, said:

“Our new ownership structure presents a great opportunity for Kantar, our employees and our clients. In Bain Capital we have a partner who shares our ambition, brings relevant expertise and – with WPP – can help us accelerate our growth and impact for clients. We are focused on delivering ‘human understanding at scale and speed’ and the ‘best of Kantar’ more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider.”

Tuesday, 16 July 2019 00:00

Hotstar breaks global record yet again

The streaming giant recorded 25.3 Mn simultaneous viewers during the match – a new global record, and a reach of more than 100 Mn daily users on the platform

Hotstar, India’s largest premium streaming platform, continued to raise the bar in live streaming, setting a new global benchmark during the India vs New Zealand semi-final on 10th July 2019. The platform registered an unprecedented 25.3 million concurrent viewers, shattering its own previous world record of 18.6 million set during the VIVO IPL 2019 final. Hotstar also witnessed upwards of 15 million concurrent viewers across multiple matches through the ICC Cricket World Cup.

Built to handle immense scale, Hotstar had previously crossed the milestone of 100 million daily users during the India vs Pakistan match. Even with the massive cricket consumption, the entertainment consumption on Hotstar remains extremely high. 60% of cricket viewers also consume entertainment content on the platform and the past 12 months have seen a 2X growth in entertainment consumption. The watch time on entertainment content is 1.5 times that of sports content on the platform. These astounding numbers are a resounding testimony to Hotstar’s immense technology prowess, with the platform continuing to be the preferred destination for sports and entertainment for millions of Indians across the country.

Commenting on the development, Varun Narang, Chief Product Officer, Hotstar, said, “We are thrilled about, once again, re-writing the global record for the highest concurrent video viewership anywhere in the world.

Using tech in creating a delightful consumer experience is at the core of what we do. From building scalable services that enable massive concurrency to managing complexities of live streaming from video acquisition to authentication to delivery, we prepare for failure in the system. We load test our infrastructure extensively to identify failure points.

With a robust technology backbone, and expertise in driving scale by changing behaviour and growing the category, we look forward to setting new benchmarks and delivering unmatched experiences to all our users.”

Commenting on the record, Vinod Thadani, Chief Digital Officer, Mindshare South Asia, said, “Achieving 25.3 million simultaneous viewers in any match is no mean feat. The nail-biting semi-final saw Hotstar’s viewership rise steadily and during the last leg of the game, the viewership increased nearly with every ball! Also, what’s remarkable is the fact that these numbers were attained for a disrupted semi-final played over two days. It’s anyone’s guess what the figures would’ve been had India made it to the finals. Hotstar would’ve definitely surpassed these numbers and set new global standards.”

Tuesday, 16 July 2019 00:00

&pictures to premiere Kedarnath

Witness faith aur love ki anokhi yatra with the premiere of Kedarnath on &pictures on 21st July at 8pm

A story that encapsulates the journey of love and faith – Kedarnath is set against the backdrop of the catastrophic floods that took place in 2013 in Uttarakhand sweeping away the entire Himalayan settlements. With Sushant Singh Rajput sharing screen space with debutant Sara Ali Khan, Kedarnath also highlights the power of faith in God, in love, in the goodness of human beings. The two, who come from completely different backgrounds, must fight for their love which is put to the ultimate test when the floods hit. &pictures, Naye India Ka Blockbuster Movie Channel will premiere this faith aur love ki anokhi yatra, of Kedarnath on Sunday, 21st July at 8pm.

Speaking about her character, Sara Ali Khan said, “In Kedarnath, the character was written so beautifully and was so wonderfully nuanced. There are some projects that you just want to be part of instantly, and after hearing this narration I couldn’t imagine not playing Mukku. For a debutant who hadn’t trained in acting, conviction in a script and curiosity and excitement to essay a character is most important, since that’s your main clutch enabling you to perform! I truly am thankful to Kanika Dhillon for writing this character that will always stay dear to me.”

Speaking on the thought behind making the film, Abhishek Kapoor said, "Kedarnath which is a 2000 year old temple was hit by a mountain flood in 2013. That flood took away 100000 lives. One of the biggest natural disasters of all time. The idea of making this film was to bring healing to people affected and to offer shraddhanjali to those who died or went missing. The maximum numbers of people affected from this deluge were the poorest of the poor and so many who are not even accounted for. Another interesting thing I found out was that most of the porters who carry the pilgrims to the temple were Muslims. Kedarnath is a place where humanity exists in its purest form"

‘Kedarnath’ is a potent combination of love and religion, of passion and spirituality. Set on a 14-kilometre pilgrimage from Gauri Kund to Kedarnath, the 2000-year-old holy temple of Lord Shiva serves as the backdrop for this love story. Mansoor (Sushant), a reserved and reticent Muslim Pithoo (porter) helps pilgrims make an arduous journey upwards to the temple town. He is well aware of the religious customs and that doesn’t stop him from shouting Lord Shiva’s name. His world however turns around when he meets the beautiful and rebellious Mukku (Sara), who draws him into a whirlwind of intense love. Rebel by heart, Mukku is the daughter of the head priest and tourist lodge-owner Brijraaj Mishra (Nitish Bharadwaj) who wants her to get married and settle down with the nephew of another Brahmin priest. Destiny however has plans for the lovers amidst the uncertainties of life, nature and broken hearts.

Sunday, 14 July 2019 00:00

The New Social Media

In a mature social media landscape, a wave of new platforms is emerging to offer multidimensional engagement.

Social media is now a daily habit for many adults worldwide, and particularly for young digital natives. In the United States alone, nearly 80% of Snapchat and Instagram users between the ages of 18 and 29 say they engage with the app every day, with 68% and 60% respectively saying they use it multiple times a day, according to a study published by the Pew Research Center in April 2019. In China, social media is highly integrated into smartphone usage. Nearly all of Chinese internet users access the internet through mobile devices, with much of their time devoted to WeChat—in fact, about 40% of WeChat users spend between one and four hours a day on the app, as reported by Luxion Media in August 2018.

Tech companies around the world are finding new ways to help users capitalize on all that online engagement, paving the way for more immersive shopping experiences, intuitive creative tools, and targeted social features. Yet many are also taking action to combat the negative effects of social media culture on mental health. Young people are increasingly rejecting the anxiety-inducing aspects of keeping up their image on digital social networks, and those who stay logged in might soon see a different world. For example, in Canada in May 2019, Instagram began a trial of hiding its “like” counts feature, and a spokesperson told TechCrunch that “exploring ways to reduce pressure on Instagram is something we’re always thinking about.”

In this landscape, millennials and generation Z are craving ways to stay connected and entertained while honoring their values and wellbeing, opening the floodgates to a wave of new platforms and features that promise a better experience.

Social enrichment

Social media channels have become playgrounds for brands and advertisers, to the point where social media’s original purpose—fostering social connections—can get lost in the user experience. Some companies are adding features or building entirely new platforms that put a fresh emphasis on community building and collective participation.

In April 2019, Snap launched its first multiplayer game, Bitmoji Party, which allows users to play live mini games as their own avatars with a small group of friends inside the app. This takes the Snapchat experience beyond messaging into a realm of deeper interactivity and engagement.

“We wanted to build something that makes us feel like we’re playing a board game with family over a long holiday weekend,” said Will Wu, Snap’s director of product, at the company’s Partner Summit. “Something that makes us feel like we’re sitting with friends, controllers in hand, looking at the same screen.”

Platforms designed for other functionalities are using common interests to create social spaces. Spotify is reportedly offering a social listening feature for employees, where users can make the song they’re listening to “social” and let friends in on an entire playlist, according to an article from Hypebeast published in June 2019. At the time of writing, it hasn’t been officially confirmed whether Spotify will release its Connect with Friends feature to the public, but, if it does, it will give users the opportunity to interact within Spotify’s own ecosystem, rather than using messaging platforms outside the app.

In May 2019, ByteDance, the parent company of TikTok (called Douyin in China), launched a new instant messaging platform called Feiliao, or Flipchat. The company calls it an “interest-based social app,” claiming to offer a more targeted resource for social interaction in lieu of the ever-expanding and all-encompassing WeChat. It’s not the only platform challenging WeChat’s reign in this space: Tencent-backed Jike, a similar hobby-based chat app targeted at young users, is gaining steam. And in June 2019, in a bid to get a piece of the social networking renaissance, Beijing-based search engine giant Sohu also launched its own messaging app, called Huyou, or Fox Friends.

For Escapex, the importance of quality connections and experiences goes beyond close friends and into fandom. The platform, which launched in 2015 and has since gained more than 20 million users, operates on an exclusive subscription model—users can pay to unlock content from their favorite influencers and never miss out on anything they post. In this way, celebrities have the freedom to develop their own apps for creating content and interacting with their fans without the restrictions of algorithms or the need to work within the limitations of sponsorship deals. The result of this formula, according to Escapex’s chief business operator Shamik Talukder, is a tighter-knit community of fans that fosters supportive, IRL connections as opposed to ones that revolve around self-promotion and branding.

In China, social apps are completely transforming the e-commerce landscape. Rising platforms like Xiaohongshu (which literally translates as Little Red Book) are creating new spaces for influencers to generate content, foster online communities with consumers, and inspire authentic engagement through livestreaming, short-video, or photo-text formats.

To date, Xiaohongshu is one of the fastest growing and most talked about lifestyle apps guiding how consumers discover products and brands. Starting out in 2013 as a platform for giving advice on shopping duty-free overseas, it has since expanded into a user-generated creative content hub for fashion and beauty reviews and tips that’s attracted a wealth of international brands and bred numerous local ones. As it evolves, retaining authenticity remains one of Xiaohongshu’s core values, and brands and influencers work within strict posting guidelines to sustain the trust of their followers.

While e-commerce itself is still only a small part of Xiaohongshu, analysts suspect this won’t be the case for long. This month, the Alibaba-backed platform started testing a livestreaming feature in a likely move to experiment with a monetization format that has, so far, worked for Tmall and WeChat. Xiaohongshu’s overall appeal is spreading to other tech companies as well—in early 2019, China’s leading question-and-answer site Zhihu launched Chao, billed as Xiaohongshu for men, with feeds for entertainment and gaming, technology, food and fashion.

China’s leading e-commerce companies are also building their own thriving social ecosystems for shoppers and influencers. Alibaba’s Weitao app, which is directly connected to its shopping platform Taobao, is enjoying a surge in popularity in 2019 after making relatively little impact after its launch in 2013. Its users comprise industry experts, influencers, celebrities and others, who generate product and store recommendations, brand storytelling and creative lifestyle content to drive purchases directly within its app.

London-based shopping app Depop is growing in popularity with gen Zers. In June 2019, Depop raised $62 million in a Series C funding round, and has big expansion plans going forward, expecting to reach more than 15 million users in the United States alone in three years, according to the company’s CEO Maria Raga. This is thanks to a thriving community of bedroom entrepreneurs,who buy and resell thrifted or handmade clothing on their profiles and build a social media following based on their personal style in a way that’s fluid, fresh, and affordable. Many in the Depop community consider themselves teenage fashion influencers in the making,leveraging the accessibility of cheap fashion on the platform to boost their cool factor on Instagram, or discovering trends before they hit other social media feeds.

Creative inspiration

In an algorithm-driven digital world, new spaces are emerging to bolster frictionless self-expression and creativity, some with the aim of building judgment-free zones, others prioritizing a decentralized network.

New Life AI’s creator Vector Newman promises his platform will put power into the hands of talents who are normally excluded from the creative economy. “As the founder, I’m federating people but eventually I want this project to be owned and driven by the community,” Newman toldDazed.Users’ content is boosted through a voting system that operates entirely on a global cryptocurrency,and the ecosystem is devoid of data farming, ads, or any centralized algorithms. “Auser from Sri Lanka can vote for content posted by a Mexican user and some microscopic value units will flow between the two and bounce onto everyone else,” Newman said.

VSCO removes the need for upvoting and validation altogether in its app, with a mission to simply “help everybody fall in love with their own creativity.” Launched in 2011, the photography and video editing platform (which allows users to share their work, but not like or comment) has recently seen a surge in popularity among gen Zers as they seek ways to remove themselves from the social pressures and Facetune culture of Instagram (see our “Into Z Future” Report for more on Gen Z creativity).

“The younger generation are very smart, they are very perceptive, and they actually value their mental health and their overall wellness, and they know what serves them,” VSCO’s vice president of product Allison Swope told Cheddar’s Nora Ali at the Mobile Apps Unlocked Conference in Las Vegas in May 2019. “People don’t feel a pressure when they share on VSCO and it’s a thing that they value very deeply, in addition to the quality of the tools.”

Instagram, which serves primarily as a digital portfolio for artistic work completed outside of the app, is carving its own space in the augmented reality (AR) filter trend and expanding its creative toolkit for users. In April 2019, Facebook announced it would be opening its Spark AR feature to a beta community of Instagram developers, allowing virtually anyone to create their own AR filters for their Instagram Stories. Other users can access these filters by following the creators. The resulting face filter crazes have taken on entirely different aesthetics compared to those on Snapchat; Instagram AR talents like Johanna Jaskowska have transformed countless feeds with their unique brand of futuristic, ultra-glossy, beauty “masks.”

In China, apps are also differentiating and giving consumers separate hubs for creative expression outside of larger platforms such as WeChat and Weibo. Bite-sized video is a fast-growing medium, with apps like Alibaba and Tencent-backed Bilibili wooing China’s anime-obsessed gen Zers, while Tencent-backed Kuaishou has become a favorite among China’s rural internet users for showcasing their skills to a wider audience. The latter platform had its cross-linking with WeChat restoredin June 2019, allowing users to embed and share their videos on food, entertainment, fashion, and more with audiences on WeChat’s Moments feed. According to an article on Elephant Room, Kuaishou stands out as an example where the typical restrictions of influencer marketing apply to a much lesser extent.

“What the app focused on instead,” the article stated, “was building a community where diversity reigns, where users are given the freedom to establish their own rules, choose their own idols, and to create the type of content completely to their own tastes.”

 

Source: JWT Intelligence

Although as internet ad market matures, growth projected to slow from 17% to 9% a year

Internet advertising will account for 52% of global advertising expenditure in 2021, exceeding the 50% mark for the first time, according to Zenith’s Advertising Expenditure Forecasts, published today. That’s up from the 47% of global adspend that internet advertising will account for this year, and 44% in 2018.

However, the growth rate is falling rapidly as the internet ad market matures. Internet adspend grew 17% in 2018, but activity in the first half of 2019 leads us to expect only 12% growth for the year as a whole. By 2021 we expect internet adspend growth to have fallen to 9% year on year. The growth rate of the internet ad market is starting to converge with the growth rate of the market as a whole.

Internet adspend growth is led by the overlapping channels of online video and social media, which are expected to grow at average rates of 18% and 17% a year, respectively, to 2021. These channels are benefitting from continued technological improvements to smartphone technology, connection speeds, and advertising targeting and delivery, combined with strong growth in investment in content. 5G technology, which launched in South Korea and the US in April and is starting to roll out elsewhere, will further improve brand experiences on these channels by making mobile connections much faster and more responsive.

Other channels are growing much less rapidly. Paid search, which accounted for 37% of internet adspend in 2018, grew by 11% that year, and we forecast its growth rate to fall to 7% in 2021. A lot of innovation in search is taking place in voice, which is currently not monetised. Online classified advertising (ads sitting alongside other ads rather than content, such as jobs, property and second-hand vehicle listings) is starting to lose out to other digital channels, or free alternatives. Online classified advertising grew 9% globally in 2018, but is already starting to shrink in some markets, and in 2021 we expect spending to decline by 1.6% globally.

Traditional media remains the priority for most big brands

Much of the growth in internet adspend is coming from small, local businesses that spend all their budgets on platforms like Google and Facebook, which offer simple, self-serve tools to manage campaigns, and highly targeted audiences. The fact that large numbers of small advertisers are spending all their budgets online means they are skewing the overall picture. The global average is made up of very many small advertisers that spend all their budgets online, and large advertisers that – on average – devote considerably less than half their budgets to it. Big brands are investing large sums in internet advertising, but the majority are still spending most of their budget in traditional media.

The categories that have advanced the furthest in using modern digital channels are technology, media, finance and professional services,” said Matt James, Zenith’s Global Brand President. “And even within these, brands still rely on traditional media to create broad mass awareness and reinforce brand values.”

Some traditional media face tough competition

Within the traditional media, print has long been in decline as online alternatives have taken their readers and advertisers. The ad revenues of printed newspapers and magazines peaked at US$164bn in 2007 and will total just US$70bn this year. Broadcast television is now beginning to shrink, though not nearly on the same scale: Zenith forecasts traditional television ad revenues to shrink every year from now to 2021, falling from US$184bn in 2018 to US$180bn in 2021.

Other traditional media are more healthy. Radio is increasing its ad revenue by 1% annually. Out-of-home contractors continue to expand their digital display networks, contributing to 4% annual growth in their revenues. Cinema, though accounting for a tiny 0.8% of total adspend, is growing at 12% a year, thanks mainly to a boom in the popularity of cinema in China.

Global adspend to grow 4.6% in 2019, led by the US

Zenith forecasts global adspend to grow by 4.6% this year, to reach US$639bn. That’s marginally down from the 4.7% growth forecast in March, but is a strong result given the increased estimates of how much was spent in 2018. Zenith now estimates growth in 2018 at 6.4%, up from its previous estimate of 5.9%, creating a tougher comparative for 2019.

Global adspend is now forecast to increase by US$28bn this year. Almost half this growth (US$13bn) will come from the US, which is benefiting from very rapid growth in internet advertising – at 15.4%, ahead of the global average of 11.7%. China will be the next biggest contributor to growth, adding US$4bn in extra adspend, followed by the UK and India at US$1bn each.

“The point at which internet advertising exceeds 50% of global adspend has been approaching for some time, but this is the first time it has appeared in our forecasts,” said Jonathan Barnard, Head of Forecasting at Zenith. “However, 2021 will be the first year of single-digit internet adspend growth since 2001, the year the dotcom bubble burst.”

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