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ARM Weekly
Media News Update
17th
December 2015
GroupM agrees £500m deal with Channel 4
By Kris Archer
Has the X Factor lost its X Factor!?
By Craig Berg
Amazon Prime hits the mark with High Castle
By Sophie Billington
How privacy is changing the digital landscape
By Luigi Raw

2. TV
GroupM agrees £500m deal with Channel 4 for the next 2 years
Following the highly publicised fallout between the UK’s biggest media agency and Channel 4 sales
at the start of 2013, it has recently been published that a new deal has been struck for the next two
years, at a reported value of c. £500 million – nothing like leaving these things to the last minute!
The deal will cover both GroupM as well as their content arm, GroupM Entertainment, as they look
to supply Channel 4 with some advertiser-funded shows as encompassed in previous deals.
GroupM controls about 30% of the TV ad market and spends an estimated £250 million a year with
Channel 4, whose saleshouse has an annual turnover of nearly £1 billion.
All Response Media Viewpoint
With the TV market continuing to see ever-increasing pressures from rising advertiser’s TV spends
versus declining audiences, agreeing a two year deal would seem sensible, especially against the
backdrop of market consolidation, where Sky continues to dominate and is highly likely to look to
evolve its channels mix moving into 2016.
My concern to the deal two-fold:
1. The length of the deal: Although I’m sure there will be pricing benefits for agreeing a longer term
commitment, GroupM have predominately committed advertiser’s spend to a media owner,
with budgets potentially not even been briefed to their agencies. A risky strategy, as audience
behaviour continues to evolve and ROI becomes more paramount to the traditional brand
approach to TV.
2. The AFP element: Surely with a deal this size, it would be more interesting to see how Channel 4
would be reinvesting this revenue into new, relevant programming, as opposed to agreeing a
deal with the media agency to get their client to commit to producing this content for them.
Overall, time will tell whether the deal is really in the best interests of clients, rather than the lining
of pockets for both agencies and saleshouse.
By Kris Archer, Group Account Director
Fourth series of Luther opens with lowest début yet
One on TV's most popular haunted detectives returned to BBC One on Wednesday this week, as Idris
Elba returned for an extremely short fourth series of London's top shelf moody copper, Luther
(9pm). The first of two episodes reintroduced viewers to Elba's ex-cop John Luther, now living in an
isolated cliff-top cabin in Broadchurch and upping the 'troubled' factor by 200%, as he was dragged
back into action by the arrival of London's latest OTT serial killer. Now a Hollywood star, Elba's busy
schedule (Star Trek Beyond, Marvel's Thor) ensured that Luther was only ever going to return for a
very limited run. The first series consisted of six episodes and kicked off with 5.6 million viewers in
May 2010, following with just four episodes in June 2011, which debuted with another 5.6 million.
Wednesday night brought in just 4.9 million viewers, the show's lowest-ever début audience,
although this was enough to secure the 9pm slot with a 23% share.

3. Amazon Prime hits the mark with High Castle
There is a fervour surrounding Amazon Prime's biggest-ever release to date, The Man in the High
Castle. A series based on Phillip K. Dick’s award winning novel, which explores what it would be like
if the allied powers had lost WWII, executively produced by Ridley Scott. Since commencing its
development of original content, The Man in the High Castle is proving to be the most watched
series Amazon Prime has created. Amazon's investment indicates they are vying to take a slice of the
subscription based market away from competitors, the largest of which, Sky currently holds over 12
million customers in the UK and Ireland.
Traditional broadcast and cinema are looking at this with a cautious eye as Amazon Prime boosts its
subscriptions with the likes of High Castle and other high profile acquisitions, such as Jeremy
Clarkson's new car show. Will the expansion of popular content via Amazon Prime accelerate the
gradual shift away from linear viewing we are seeing, particularly in the younger age bands?
All Response Media Viewpoint
This could be seen as a threat to linear TV advertising if more viewers are moving to alternative
methods of viewing new and original content on the likes of Prime and Netflix. The latest figures
from BARB show that commercial TV’s share of linear viewing was 67% in October, with the average
viewer watching just 2 minutes less commercial TV than in 2014 and 16-34’s watching 6 minutes less
than last year.
This shows that there is a very gradual migration in viewing year-on-year. Combined with the fact
that Amazon does not disclose the number of subscribers it has, or viewing figures, Amazon can
potentially claim unsubstantiated success. Currently there aren’t any advertising opportunities on
Amazon Prime, but if they did come available in the future we would want insight of viewing figures.
By Sophie Billington, Media Planner Buyer

4. Has The X Factor lost its X Factor!?
Initial overnight viewing figures from last Sunday’s X Factor final are at their second lowest since its
inception in 2004, with just 8.2 million viewers witnessing Louisa Johnson from Essex take the crown.
Taking into account consolidated figures yield, on average, an 11% increase against overnight
figures, we can expect the consolidated figure to be around 9.1 million. This means viewing figures
are likely to be down 8% year-on-year and incredibly down 45% versus the 16.6 million who
witnessed the final in 2010.
These figures are hardly surprising however, given that on X Factor’s opening Saturday viewing
figures were down 25% year-on-year. Are viewers simply getting bored of X Factor now in its 12th
series? Perhaps the constant tinkering of the format, coupled with a regular change of judges have
put viewers off? Whatever the reason, this must be a concern to Simon Cowell, but also to ITV and
their predicted advertising revenue.
All Response Media Viewpoint
Whilst analysing why ratings for The X Factor final were at their second lowest ever, we can’t fail to
mention BBC One’s Strictly Come Dancing (SCD). SCD has certainly gained in popularity in the past
few years. Last Saturday’s show provided 9.4 million viewers, whilst Sunday’s show went even
further with 10.8 million for its penultimate show (44% share). It should be noted that last Sunday’s
SCD did not clash with The X Factor final (34% share), and simply shows that the BBC is triumphing
over ITV when it comes to audience share for primetime television. ITV now have a considerable
challenge on their hands to win back viewers and therefore increase advertising revenue from
advertisers looking to attract the lucrative 16-34 audience. Their recent acquisition of The Voice
from the BBC shows they are attempting to bridge the gap, however this also presents The X Factor
with an even greater challenge if it is to continue to attract a considerable market share.
By Craig Berg, Senior Media Planner Buyer

5. Digital
How privacy is changing the digital landscape
I am sure everyone has read or heard of a case recently involving internet privacy and how the way
people are browsing is changing at a rapid rate. The effect in some areas has been referred to as the
‘Edward Snowden Effect’, and what this means simply is that an increasing number of users are
taking privacy seriously. What this has also led to is a number of companies including Google,
Microsoft and Comodo changing how they do things.
Google for example are making it easier for users to privately browse the internet, Microsoft are
setting up servers outside the US to help bypass changes in privacy laws and Comodo are offering
ways to ‘anonymise’ web browsing. With this we have also seen a significant increase in other
security, privacy and anonymising software. There are two major players in the market at this time;
one is VPN (Virtual Private Network), allowing users to bounce web traffic through a third-party
secure server which effectively anonymises data and reduces chances of outside ‘snooping’; the
other is TOR (The Onion Router) which, although it received some bad press recently, is one of the
fastest growing networks at this time. Usage of these services has increased over 38% since 2014
with TOR seeing the largest increase.
This change in browsing habits also brings a change in how we have to setup websites, tracking,
marketing, etc. in that we have to be mindful that some users may be using these services or
technologies. This makes the testing and analysing phase of website and marketing implementations
more important than ever. Here at All Response, when building a new website or setting up new
tracking implementations we will look at various browsing types.
For example, the TOR network uses a dedicated browser that forces secure web browsing (via
HTTPS) which can cause some websites to stop working. Websites that do not currently use this
technology should be tested anyway to make sure they can work via a secure connection. Also these
browsers can block cookies and JavaScript which some sites can be heavily reliant on. By testing this
we can ensure that any strategies we implement at ARM, from DoubleClick through to ARM’s very
own ARMalytics suite, can work in a number of browsing environments.
All Response Media Viewpoint
As an agency we also take privacy and security seriously and appreciate that these users are
protecting themselves from the increasing number of hacks, scams and malwares that are around
the web. We take this and client data security into account when setting up any new strategy and
offer transparency on the data we are utilising across marketing.
Interesting side note: TOR is heavily associated with the dark web* however in a report release in Q1
2015 it was found that traffic through this service only makes up 6% on ‘dark web’ sites with the
remaining traffic using the service for normal browsing with a view on privacy.
*dark web is a term used for a group of sites that can only be accessed by a secure relay network (i.e.
TOR, I2B, etc.) and cannot be tracked, monitored, or even registered. TOR sites generally have a
‘.onion’ based URL. These sites house some of the webs less-than-legal content including one site
that has been in the new a lot called ‘Silk Road’.
By Luigi Raw, Tech Ops Analyst
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