New estimates as to the impact of the Covid-19 pandemic on advertising revenue in 2020 and 2021 have been issued by Magna Global, a unit of IPG Mediabrands that provides media intelligence, such as on-going estimates of worldwide advertising revenue. Magna predicts that total worldwide ad spending will end 2020 down by 7%. In the U.S., if you remove the once every four year advertising tidal wave driven by Presidential and other political campaigns, then Magna estimates that U.S. advertising revenue will be down 6% for 2020.

Other analysts generally agree with Magna’s estimates, such as Raghu Kodige, Co-Founder and Chief Product Officer of Alphonso, a TV measurement and data company based in Silicon Valley, who said, “This is a reasonable, if modest estimate, given that we’ve already logged 25% of the year in a lower-spend environment with major tentpole marketing events, like March Madness, completely shut down.”

The digital ad spend is projected to be flat year-over-year by end of 2020 worldwide and up a bit in the U.S. for 2020 at a 2% projected increase. Magna says: “The most resilient formats will be digital video, as well as social media ads.” Digital spending had a very good Q. 1 this year and there are already signs of the third and fourth quarter bouncing back.

wrote about the falling advertising revenues caused by the Covid-19 recession last month here at Forbes.com and the new data from Magna shows clearly that traditional advertising is under a lot of pressure (particularly print and TV) and digital spending is showing some strength into the second half of 2020 and the full year of 2021.

Jonah Bloom, former Editor-in-Chief of AdAge and currently CMO of Kinship, a start-up dedicated to improving people’s friendships and networking, said there is, “a long-term, ongoing shift, that isn’t going to change regardless of market conditions,” as “brands continue to spend more on customer experience, and (related) technology and content.”

In 2021 Magna expects that advertising spend worldwide, and in the U.S., will rebound based on the GDP growth expected in 2021. Vincent Letang, Executive Vice President and Managing Partner, Global Market Intelligence at Magna, said, based on well-respected estimates of likely GDP growth in 2021, that the GDP is forecast to grow in the U.S. by 3.1% to 4.7%, according to macroeconomic forecasts issued by the Federal Reserve Bank of Philadelphia and the International Monetary Fund, respectively. These GDP estimates are likely to translate into a U.S. growth in 2021 advertising by 4% approximately, Letang estimated.

The unknowns, both in the advertising world, and across our economy, are immense as we go through this once in a lifetime event. As Josh Sternberg, editor and writer of the Media Nut, a daily media business newsletter, and a former journalist at Adweek, NBC News, Washington Post, and Digiday, said “We have no idea how bad it’s going to get.” He expressed worries to me that with the end of the stimulus, continued unemployment and a virus that is not under control yet, “it’s hard to see ad spend bouncing back.”

Though there is a lot of data and experience to back the Magna estimates, which are similar to other predictions about the next few years in the advertising industry, you still wonder if the Chinese Poet from the 6th Century BC, Lao Tzu, was wise when he said, “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”

Snap, like Facebook FB in its earlier years, is frequently being viewed, in terms of success or failure, from the point of view of monetization. It is relatively easier to acquire a large audience to use a free service like Snapchat, than it is to monetize those consumers and achieve large-scale advertising revenue growth.

In a further step toward enhanced monetization, Snap announced last year a new automated advertising product, Dynamic Product Ads (DPAs) in the U.S. and selected other countries. Snap has just recently extended that product to more countries in Europe, the Middle East, and Australia.

DPAs are appealing to e-commerce advertisers because it allows retailers and brands to more easily sell their services and products to consumers using Snapchat. Google GOOGL and Facebook already offer similar ad products, where an e-commerce catalog is uploaded into a template on a digital platform and then updated in real-time. The benefit to consumers is that they will get up-to-date listings of products and prices. The benefit to advertisers is that they will save time over previous methods of updating e-commerce digital listings.

Rob Seidu, the senior director of media activation in Europe for Adidas said they have seen an increased return on advertising spend during their test of Snap’s DPAs. “The launch of DPAs allows us a route to reach our target Gen Z and Millennial audiences with relevant product creative throughout the consumer journey,” Seidu said.

Long-time digital media observer and experienced revenue executive in the digital world, Michael Hudes, observed, “Snap’s move to launch dynamic ads is a no brainer move for all of the obvious reasons and on the surface, far from innovative. The real question is how does Snap deliver a user experience that performs for a wide swath of brands and not just direct response – D to C – advertisers?”

In the period leading up to Facebook’s IPO many analysts doubted Facebook’s ability to monetize particularly in the mobile environment. But once Facebook demonstrated rising advertising revenue with good margins, the stock took off and has been a darling of Wall Street.

While Snap’s stock price has moved up considerably in the last year, as they increased revenue and demonstrated the value of their many US and European users, they are still trading below their high. Snap has other efforts underway to increase their advertising revenue, including an advertising network across many sites and apps, not limited to Snap properties.

Snap has continued to hire advertising sales people from some of the leading digital companies, like Facebook, Amazon AMZN, and Google. Snap continues to take more and more steps toward demonstrating they can grow their primary revenue stream – digital advertising.

It has been widely reported that ByteDance, the Beijing-based digital entertainment and information company, had impressive 2019 revenue and earnings. ByteDance had revenue of $17 billion in 2019, up from $7.4 billion in 2018. In the first half of 2019 ByteDance is reported to have had revenue equal to or exceeding the whole year of 2018. According to the same reports, ByteDance’s profit was $3 billion for 2019. It is also reported that they have over $6 billion in cash available for investment and growth initiatives. As a privately held company, ByteDance does not officially release their financial data and I was not able to get a comment from ByteDance regarding their financials.  

ByteDance has been reported to have a valuation over $100 billion and as high as $180 billion. ByteDance has announced that they have over 60,000 employees in 126 cities.

ByteDance owns TikTok, which is their non-Chinese mobile app which allows consumers to make short videos and share with the millions of users on TikTok. TikTok is headquartered in Los Angeles. Kevin Mayer, the former Chairman of Direct-to-Consumer and International at Disney DISannounced last week that he was going to ByteDance as COO of the whole company, and CEO of TikTok.

TikTok is reported to have over 800 million daily active users which compares to 1.73 billion daily active users for Facebook, who reported that number this year.

ByteDance has a number of core products that use artificial intelligence to choose content that will be shared with readers whether it is in their news and information content product, Toutiao, or their entertainment apps, particularly Douyin and TikTok. Douyin is a mobile app launched in China by ByteDance in 2016 focused on consumer-generated short videos.

Much of the revenue for ByteDance comes from advertising and in-app purchases, both areas with a lot of room for growth, plus ByteDance’s user numbers continue to grow rapidly. ByteDance was founded in 2012. ByteDance has raised money from funds like Softbank, KKR KKR, Sequoia, General Atlantic, Hillhouse Capital Group, Coatue, SIG Asia Investment, and Source Code Capital. Knowledgeable sources have indicated to me that there are also some influential Internet-related investors from around the world, invested in ByteDance, some at a very early valuation. This will be a company that will be closely watched for an IPO or other liquidity event.

Every few years a new “bright shiny object” appears on the digital scene. Sometimes these companies go on to be huge (Amazon AMZN, Google, Facebook, etc.) and other times they fail massively – Excite.comGo.com/Infoseek, Vine, Friendster, etc. Other companies may not be the “bright shiny object” of their early years, but they are still gaining momentum and traction, such as Snap. Even MySpace, a company that most people probably assumed was shut down and written off entirely, is still alive with about 4% of American social media users reporting they are currently using Myspace in a quantitative study I conducted with 2,400 Americans in June of last year.

Which flavor of “bright shiny object” is TikTok? Short-term or long-term?

TikTok has received a lot of attention in the U.S. and around the world recently, including the announcement of the new CEO of TikTok (and COO of parent company Byte Dance), Kevin Mayer, the head of Disney DIS’s Direct to Consumer services and International (including Disney+). Mayer was previously the planning and M&A guru at Disney. Forbes writers Dawn Chmielewski and Abram Brown reported in detail the search by Byte Dance for a CEO of TikTok and the hiring of Mayer.

So the question is now: is TikTok more like Vine (short 6 second video serviced owned by Twitter TWTR and shut down) or more like YouTube, owned by Google GOOGL, which reportedly has revenue over $15B a year – mostly advertising – and over 125M monthly unique users in the U.S. alone.

While some analysts look at TikTok as competition for the social networks – Facebook, Instagram, and Snap, there are many reasons to think of TikTok as more of a competitor to YouTube. TikTok is not about sharing what you did today or where you went (though there is some great travel content on TikTok), but more about creating and sharing content, such as songs, dances, ideas, challenges – all presented in short video form. Unlike Vine, which limited users to six seconds, a TikTok can be as long as 60 seconds, with a function that combines four videos of 15 seconds each. Furthermore, you can upload to TikTok longer videos shot outside of the Tik Tok app.

TikTok, whose mobile app is free, is owned by Byte Dance of China. Byte Dance is a private company with many reports that it is worth $100B and beyond. Byte Dance runs a similar service to TikTok in China, Douyin, which was launched in 2017.

TikTok was launched outside of China in 2018 and merged with Musical.ly, another company owned by Byte Dance, that year. Douyin and TikTok when translated from Mandarin mean: “shaking sound” and “vibrating sound” respectively.  

TikTok was the most downloaded, mobile, non-game app worldwide in January and February of this year. There are over 800M worldwide users. In China there are 400M users which doubled in one year. About half of all smartphone owners in China are using TikTok. Byte Dance is also growing TikTok in India where they have over 120M users. Southeast Asia is another growing area for TikTok.

In the U.S. TikTok is reported to have 60M monthly users, who spend on average 45 minutes a day on the app. A majority of U.S. users of TikTok are female (57%). Over 40% percent of TikTok users are between 16 and 24 years old. Roughly 50% of TikTok’s global audience is under the age of 34. While only 9% of US internet users say they have used TikTok, 49% of teenagers say they have used the app. Another demographic strength for TikTok are the large number of families, siblings, and co-workers that collaborate on TikTok dances, challenges, lip syncs, etc. When you watch TikTok you see many multi-generational users.

Though privately-owned, it was reported that TikTok grossed over $175M in revenue in 2019. TikTok revenue comes from in-app purchases (virtual goods and subscriptions), sponsorships and advertising. All of these areas are likely to grow for TikTok as the platform grows in numbers of users and as TikTok gears up their revenue sales teams.

Tiktok has hired many top Facebook executives and others from Snapchat, YouTube and other companies, before the hiring of Mayer. It is expected that TikTok will continue to pursue some of the top talent at the successful social media and digital video companies. TikTok has a large office in Los Angeles (the largest presence outside of China) and their European efforts are headquartered in London.

Vine failed for many reasons, including that six seconds was too short a time for some people to express their creativity. Furthermore, Vine was bought by Twitter where it withered. It was not a good brand fit with Twitter or demographic fit. TikTok is the main business of Byte Dance outside of China and will not have the problems Vine had at Twitter. Also, the TikTok app has a lot of strong functionality that did not exist for Vine, such as powerful viral tools, easy video recording and editing, mobile first, a great recommendation algorithm and strong social features.  

TikTok is also more than just dances and Vine-like antics. They also have people giving short video advice on health, exercise, the stock market, travel, DIY (do-it-yourself), and even politics. Naturally these categories will reach young people, as well as a more mature audience.

I spoke to a number of 20-30 year olds in the media world and most of them said they used TikTok. Numerous people I spoke to said that TikTok is more like a short/mobile first version of YouTube. I think TikTok is going to challenge YouTube more than than TikTok will challenge Instagram or Facebook.  

I think TikTok will be grow substantially, and quite possibly, will have the longevity of YouTube, which is 15 years old this year. Vine, in comparison, lasted 5 years. My projection of strong, future growth for TikTok in the U.S. is supported by the high evaluation score that TikTok receives from its users – a 4.7 score out of a 5-point scale.

If you doubt the appeal of TikTok, take a few minutes and explore the videos on the app. And don’t miss this one – “The Five Stages of TikTok” on TikTok which you can search for on TikTok or you can watch it on YouTube:

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Monday, May 11, Shanghai Disneyland DIS opened to a limited number of visitors, along with new rules and procedures to keep everyone healthy. “During this initial reopening phase, the park will institute new measures and procedures, including opening with limited attendance and required advanced ticketing and reservations, accommodating social distancing in queues, restaurants, ride vehicles and other facilities throughout the park, and implementing increased frequency of sanitation and disinfection,” according to the Shanghai Disney Resort website. Disney and Disney’s travel partners had tickets on sale the morning of May 8 and they were very quickly sold out for most of the next week.

In general China’s government has been reopening much of the country and much of the economy, as the spread of the virus has slowed dramatically in China. The government and companies like Disney have implemented rules regarding social distancing, as well as mask and other health requirements. Disney reportedly will be scanning visitors when the Shanghai park opens for any high temperatures.

The theme park business is huge and many companies are deeply invested in their theme park attractions. The global amusement parks market size was valued at USD $45.2 billion in 2017, according to Grand View Research, a market research and consulting company headquartered in San Francisco, CA. Grand View, previous to the COVID crisis had projected almost a 6% CAGR for the last three years and through 2025. Obviously those estimates will be revised as the parks around the world figure out when and how to reopen.

In the U.S., Disney plans a phased reopening, starting with Disney Springs in Florida, an outdoor shopping, dining and entertainment complex, which will reopen on May 20. Other Disney Parks locations will remain closed for now, including theme parks and hotels. No date has been set for other Disney parks to reopen. Some analysts are predicting not until 2021.

In the old days, we talked about all the new things in TV – color, remote controls, cable – the world was our oyster in TV viewing. But there was no Internet then and there were no connected TV sets back then. How did we live without those? Now two-thirds of the US, with access to the Internet, connect their TV to the Internet in one way or another.

One of the predominant ways that people connect their TV to the Internet is thru Smart TVs which are traditional TVs with full Web and Internet connectivity and interactivity. You can watch a “regular” TV show from broadcast or cable outlets, or you can watch YouTube or look at Facebook or watch Netflix NFLX, all on your Smart TV. As Dave Morgan, a long-time advertising expert and the Founder/CEO of Simulmedia, a television advertising technology company based in NYC, said, “Connected TV is a big tablet.”

The current pandemic is giving people a lot of time for a wide variety of activities (if they aren’t busy working or schooling their kids) such as watching TV, including their Connected or Smart TVs. Alphonso, a TV measurement and data company based in Silicon Valley, issued a study recently looking at Web traffic attributed to viewing of Over-the-Top (OTT) content, which is traditional TV content delivered over the Internet not through broadcast or cable. Much of the OTT content is distributed through Connected and Smart TVs.

Below is a chart that shows visits to Websites promoted by advertisers on OTT content climbing dramatically as the country began to “stay at home.” This was analyzed across eight different industry sectors.

This sort of data will certainly encourage more brands and agencies to purchase advertising inventory on OTT and Connected TV. This data is evidence that OTT content is a viable vehicle for building brands.

Allen Bush, the CMO of Alphonso, commented on the future of advertising on Connected TV programming, “Connected TV advertising is still a small fraction of overall TV spend today. Advances in measurement will help double that spend over the next few years as more brands find the right balance between performance marketing and brand marketing.”

Bush explained the increase in Website traffic due to OTT advertising, saying, “In addition to more streaming content being consumed by more households, there’s the simple fact that people are more likely now to do things online (since they can’t go) to at a brick and mortar location.” Alphonso data below shows the huge growth of OTT viewership since the lock-down.

An early proponent of Connected TV and OTT content is Christy Tanner, Executive Vice President and General Manager of CBS News Digital. CBSN, the 24-hour streaming service of CBS News, has allowed CBS “to deliver critical and timely information during this crisis,” Tanner said. She went on to say that she expects the growth of streaming audiences, consuming OTT on Connected TVs, will continue “at a rapid pace.”

It use to be that people said, “I want my MTV.” Now the data suggests that people are just as strongly demanding their OTT content and their Connected TVs.

Originally posted on Forbes

The NFL put on quite a digital party for three days as they ran their annual draft. Not only was it broadcast on ABC and ESPN, including a primetime special the first night, but it was also distributed over many Internet platforms, including NFL.comABC.com and ESPN.com. The first night ratings was over 15M viewers – much more than previous years.

In the beginning some folks were worried about how the Draft would look on TV, how the technology would work (or not) and whether the excitement of the live Draft could be maintained. While there were a few small technical glitches at the Practice Virtual Draft, held in advance of the actual Virtual Draft, the actual Virtual Draft went off with no technical problems.

At the Practice Virtual Draft there were some small problems – at one team’s General Manager’s home someone unplugged some computer monitors while vacuuming. Another GM experienced some latency problems.

As an experienced media analyst, I have watched a lot of poorly-produced shows and fewer that are well produced. The NFL staff produced an exciting Virtual Draft that many fans raved about. The producers used a large variety of technology hardware and software to display video and data on a wall of monitors in the studio. The made for TV production also streamed live fans watching the Draft, and reacting to the picks. Former NFL Chicago Bears star, Hunter Hillenmeyer, an investor at Next Play Ventures, said “I thought it was remarkably well executed given all the logistics.”

Using today’s simple video livestreaming technology we saw live the players and their families watching anxiously at home. We also had a chance to “peek” into the owners and General Manager’s homes. Some even brought their families on-camera. It reminded me of a reality TV show. The NFL put their livestreaming capabilities to good use. Throughout the show they put up 20-30 fans on one screen showing the fans’ reactions to the picks in real-time.

Many of us like to visit houses for sale and watch TV shows about buying homes and renovating homes. It was no surprise then that many viewers had their own opinions about the decor of the homes they were allowed to “visit” during the Draft. On the snarky side, some people specifically called out the NFL Commissioner Roger Goodell for an unimpressive basement. One tweet read: “Roger Goodell’s home looks like a 1991 Sears catalog.”

No doubt the most interesting livestream came from Jerry Jones’ yacht. The owner of the Dallas Cowboys watched from the Eugenia Bravo, a yacht that is, coincidentally, the length of a football field from end zone to end zone.

Many people feel that virtual draft was more “veritas” than “virtual”. The feeling of authenticity came through to many. Keith Seifert, NFL National Writer for ESPN, tweeted: “The @NFL‘s virtual draft revealed a level of humanity, intimacy and spartan aesthetics that was pitch-perfect amid a national quarantine and suggestive of a new way of drafting. Short version: It was great”.

Other observers were somewhat more sparing in their praise. Long-time TV analyst and Executive Vice President at ScreenEngine/ASI, a media research firm, Steve Ridge said, “Though lackluster, perhaps boring at times, the virtual draft provided a much-needed diversion from pandemic pandemonium. It was authentic, and provided a peek behind the curtain at the lives, families and homes of many. For sports enthusiasts, it sure beat watching last year’s Masters again.”

Some people have even called for the NFL Draft 2021 to incorporate more of the digital elements that were employed in this year’s broadcast of the Draft. Maybe the Virtual Draft will become the style of future NFL Drafts.

Originally posted on Forbes

Sadly, we won’t be watching or attending any sports games for awhile (quite awhile?), but luckily your phone will help you with your “sports fix”.  New mobile sports games will be coming out from Nifty Games this year. Nifty Games is based in the San Francisco Bay Area.

NFL has announced that they have signed a deal with Nifty games to publish a head-to-head football title called NFL Clash that is set to debut later this year. This is in addition to the Nifty NBA Clash game that is currently in development and planned for release this year as well.

The logo for the new NFL Clash game to be released in 2020.

NFL Clash game logo

 NIFTY GAMES

Picture of Nifty Games, CEO, Jon Middleton.

 

 

 

In an interview with me, Jon Middleton said, “The competitive nature of clash-style games are a lock and key fit for mobile sports games. We will be bringing NBA and NFL Clash games to sports fans around the globe, as they compete head to head with teams comprised of their favorite pro athletes.”

Jon also talked about the early founding of Nifty Games, (It) “was founded out of a love of sports – and sports games. I grew up playing sports, watching a ton of sports on TV and my co-founder, Pete Wanat and I have been in way too many fantasy baseball and football leagues together over the years.” Clearly, Jon is a real sports fanboy!

Jon also spoke about how sports games have evolved over the years and he seems worried that the blockbuster console sports games are too real. As he said “as the games market has grown and become mass market entertainment, the sports game market has actually reduced and is laser focused on simulation and realism. While this has led to some of the greatest games of all time with the Madden, 2K and FIFA franchises, the need to improve fidelity and test the limits of gaming consoles also exposed a massive opportunity in the fastest growing and now largest videogame sector…Mobile.”

Long-term Jon sees Nifty games producing more head to head mobile quick-session sports games. As we progress, we’ll stay focused on delivering fun, authentic sports games to fans around the world with their favorite players, teams and leagues as partners. The long term goal is to build the largest competitive community of sports fans on the planet. We’re excited about the future, with mobile gaming we’ve got access to most every sports fan, of every sport, everywhere.” 

Nifty also announced that they have closed a $12 million Series A fundraising round led by March Capital Partners. Defy Partners, aXiomatic Gaming, Vulcan Capital, Courtside Ventures, Transcend Fund, Century Game and OneTeam Ventures also participated in the round. Nifty Games closed a $3 million seed round late in 2018.