Category: Data-Labor-Technology Stories

In this short video, marketing executives talk about making smarter decisions using data.

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Germany’s top antitrust enforcer opened a new front against big tech firms when it said the way Facebook harvests user data constitutes an abuse of dominance.
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Last week, Instagram added two features that will alter the content in users’ feeds: The ability to follow hashtags will surface hashtag-focused posts, and a “Recommended for you” section will show posts friends have liked.

When it comes to organic reach on the platform, both changes have favorable and unfortunate implications for brands, publishers and influencers. Here’s a rundown of them:

Clutter will increase
Both changes will add increased clutter to Instagram feeds, resulting in more content users must scroll through to reach all organic content. Ever since 2016, when Instagram switched from a chronological algorithm to one that tailors posts for each specific user, brands have to pay to be seen. Instagram said the new changes will not impact where paid ads will appear within user feeds, so posts that are not backed by a robust paid Instagram strategy are likely to be further buried.

The new hashtag-related posts will follow the platform’s same algorithm. If a user follows a certain hashtag, say “#photography,” Instagram will determine which posts to show the user in their feed based on the recency and quality of the posts. There is no limit on how many hashtag-related posts appear in a user’s feed, said an Instagram spokesperson.

Meanwhile, the new “Recommended for you” section, which will include three to five posts, will appear after a user has viewed all of their new posts. Consequently, users who open and close the app more often will see the “Recommended for you” section more frequently than those that do not.

More discoverability
Both updates could improve discoverability on the platform in general, even as organic posts fall to the bottom of feeds. Take the “Recommended for you” feature.

“If Instagram follows Facebook,” said Samantha Skey, president and chief revenue officer at SheKnows Media, “I imagine we’ll see plenty of sponsored posts, which could make for strong advertising as it captures a trusted referral.” For the time being, Instagram said it has no plans to place sponsored posts in the “Recommended for you” section.

With the new ability to follow hashtags, marketers can capitalize on trending conversations. For instance, on Dec. 15, Target used #StarWars in a post to appear next to other posts that reference the opening of “The Last Jedi” movie. Now, if a user follows #StarWars, they might see Target’s post in his or her feed.

“For years, brands that had a right to be seen alongside certain hashtag-related content were buried by the algorithm,” said Matt Lang, senior digital strategist at digital agency Rain. “But now, they’ll have a chance to surface.”

Letting users follow hashtags could also boost influencers, said Kamiu Lee, vp of business and development strategy at influencer platform Activate by Bloglovin’.

Hashtags could encourage publishers to create communities related to their own brands and hashtags that audiences will want to follow, said Amy Ramirez, Instagram manager at travel publisher Culture Trip.

Hashtag abuse
Marketers don’t need big follower counts or social media budgets to do so, so it’s likely that they will add more trending hashtags to their posts as well as to their Instagram Stories, which could lead to hashtag abuse.

“The real challenge on all of us [is] determining which hashtags are actually relevant and can add value to conversations,” said Amanda Peters, group strategy director at Wunderman.

Allie Arends, social media engagement supervisor at Space150, said brands and influencers will have to start strategizing about their organic Instagram content almost like they would an SEO strategy. “The image, copy and especially hashtag usages should serve a specific strategic purpose to maximize organic reach,” she said.

Still, there’s no guarantee brands’ and influencers’ hashtagged posts will appear in users’ feeds. Lang said advertisers shouldn’t be surprised if Instagram decides to enact another algorithm that prioritizes which posts get featured for a specific hashtag that is being followed.

Either way, advertisers look forward to seeing which hashtags users end up following. Scott Lindenbaum, evp and director of digital strategy at Deutsch, said this kind of personal interest data could help make ads more relevant.

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Experian’s Targeting unit remains true to its big data roots, says Kevin Dean
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Quinn, an investor in the crypto trading platform Coinbase, says “the toothpaste is out of the tube.”

The decentralized virtual currency called bitcoin has been around for nearly a decade, but it’s just recently starting to find mainstream attention and, in some circles, acceptance. That shift is thanks in no small part to the skyrocketing value of bitcoin, the world’s best-known “cryptocurrency,” from $1,000 near the start of the year to nearly $20,000 today.

For investors like Spark Capital General Partner Megan Quinn, “the toothpaste is out of the tube.” On the latest episode of Recode Decode, hosted by Recode’s Kara Swisher and The Verge’s Casey Newton, Quinn explained her investment in Coinbase, a company that is trying to position itself as the safe place to trade cryptocurrencies.

“People were sleeping on each others’ couches and renting rooms before Airbnb, but Airbnb provided that really safe, clean, approved — you got feedback, it was a transaction,” Quinn said. “You felt good about it. We think Coinbase is providing that sort of experience for trading crypto.”

You can listen to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Someday, Quinn said, the value of cryptocurrencies like bitcoin will level off enough that we will be able to start treating them like real money. But that day is not today.

“Today it’s speculative, 100 percent,” she said. “One of the folks on my team said he was liquidating his 401k to buy in, which made me pretty nervous. I’m optimistic that it will actually be a tool for transacting, once we reach some steady state.”

“In a world where it’s going up by a thousand dollars every couple hours, you don’t want to go to Overstock.com and buy a mattress,” Quinn added. “But if we can get to a place where it’s steady-state, I think there’s real opportunity there.”

So, who should buy into bitcoin now, when the price is so volatile? Talking to Swisher and Newton a few weeks ago, when the price was a measly $17,000, Quinn warned not to trust any of the “false prophet[s]” who claim to know when the roller coaster ride will be over; buying in now only makes sense for people with a lot of disposable income, she added.

“If you have a spare $17,000 that you are fine seeing go to zero, okay, fine, that’s not the worst way to spend it,” she said. “I don’t think cryptocurrencies, or bitcoin specifically, is ever going to go to zero. But I think if you’re someone who’s willing to have it go to zero, then you can ride out the stomach-lurching volatility that we’re going to continue to see for a while.”

If you like this show, you should also sample our other podcasts:

• Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
• Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
• And Recode Replay has all the audio from our live events, including the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

If you like what we’re doing, please write a review on Apple Podcasts — and if you don’t, just tweet-strafe Kara.

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This article appears in the latest issue of Digiday magazine, a quarterly publication that is part of Digiday+. Members of Digiday+ get access to exclusive content, original research and member events throughout the year. Learn more here. 

David Pemsel, CEO of Guardian Media Group, is concerned about Facebook but bullish on the ability of philanthropic contributions to fund publishing. Below is our conversation, which has been lightly edited and condensed.

Your move to a more reader revenue-focused model has resulted in reader revenue overtaking advertising. What’s the future for that?
When we started this three-year plan, we recognized that advertising alone would not secure a sustainable business model. We looked at the binary decision of either putting up a paywall, which will inevitably impact reach, or going the advertising-only road and saw a third way in which we can still have reach but at the same time optimize reader loyalty globally and domestically.

Why not a paywall?
Well-intentioned people often tell me, “Just keep cutting costs, put up a paywall and the Guardian will be profitable.” But we have to remind people of the role the Guardian plays in the world. People are anxious about what the world is right now, and our unique ownership structure, which is totally independent and free of shareholders, means people trust our independence and want to support us to keep us as openly accessible as possible.

What are the cultural challenges in moving to more of a reader-revenue model?
We haven’t always legitimized genuine collaboration. There’s tension. When you’re trying to get to a sustainable outcome, a dynamic news agenda, with finite resources, you’re pivoting from an advertising-only to a reader-contributor strategy, there’s a lot of heat in the organization. You must deploy your most precious people in a strategic way, but give them autonomy to collaborate, debate and argue their way to an outcome.

What’s the opportunity in philanthropy?
There are some conventions derived from The New York Times that X percent of your regular readers are likely to become paying subscribers, and that’s your future business model. Over time, that will cap out. You’re then stuck with a finite number of paying subscribers. There are different groups of people who will subscribe digitally and others that contribute at an article level because they feel passionate about a subject. There is no ceiling on how far contributions can go.

What’s next for publishers’ relationship with Facebook and Google?
We have a close relationship with Google from [CEO] Sundar [Pichai] down. They recognize the role of quality news within their ecosystem. So we’ve collaborated a lot around video, VR funding, data analytics and engineering resources. It’s a valuable strategic relationship.

What about Facebook?
Facebook is a different picture. Our relationship with them is difficult because we’ve not found the strategic meeting point on which to collaborate. Eighteen months ago, they changed their algorithm, which showed their business model was derived on virality, not on the distribution of quality. We argue that quality, for societal reasons, as well as to derive ad revenue, should be part of their ecosystem. It’s not. We came out of Instant Articles because we didn’t want to provide our journalism in return for nothing. When you have algorithms that are fueling fake news and virality with no definition around what’s good or bad, how can the Guardian play a role within that ecosystem? The idea of what the Guardian does being starved of oxygen in those environments is not only damaging to our business model but damaging to everyone.

Should Google and Facebook be regulated?
Regulation ensures there isn’t negative impact from market dominance, which there is with those organizations, especially in advertising. But you can’t sound anti-platform or anti-digital or anti-Google or Facebook because it’s the future. News organizations have had this narrative of “it’s unfair, look what they’re doing.” But regulation needs to be used appropriately to ensure there is fairness.

You’ve described the digital ad model as broken. How would you describe it now?
The commoditization that’s come with everything being more machine-led has meant some clients have lost sense of how to build brand equity over time. There is nothing wrong with programmatic; it’s just the safeguards in that ecosystem need to be about total transparency. Some of those data points in media planning are completely opaque, and that still needs to be solved.

Who is responsible for addressing ad fraud?
There is a client at the top of this food chain. It’s their money. They can’t allow their money to be disseminated in places they don’t understand, so it’s beholden on clients being much clearer on where their money is deployed and for agencies to be more clear and transparent about where that money is going.

What’s a big trend you see in 2018?
Voice is increasingly on our radar. The translation of the written word into devices like Google Home or Alexa is starting to take off. What is the role of news organizations in a voice-activated search world with no interface? What’s the user experience? How do you get brand recognition? If you say, “Good morning, Alexa or Home,” how can you be reassured that the Guardian is the first thing that comes up in the news category? I love that challenge.

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What is TV DMP? How can you combine TV viewership data with other behavioral audience data to reach your consumer across screens and devices? Learn more about Lotame TV DMP at https://www.lotame.com/products/tv-dmp/
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As a B2B marketer, you are often caught trying to serve two masters: the need to drive engagement for specific campaigns or periods relative to the business vs. the overall goal to drive persistent ROI throughout the year. In any scenario, it’s becoming more clear that the “campaign” mentality no longer serves.

Even marketing’s cousin, advertising, has evolved. In the age of programmatic and audience-based, data-driven marketing, advertisers have already moved away from the campaign a
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Digiday Media is launching a monthly Amazon briefing newsletter, where we’ll compile the latest news about the retail juggernaut from Digiday, Glossy and Tearsheet. Sign up here to get the monthly briefing in your inbox.

If 2017 was about the hype around Amazon’s ad business, then 2018 will be its reality as the online giant tries to convert that interest from advertisers into revenue. The retailer’s ad business is tiny compared to Google and Facebook, but it is quickly carving out a place for itself alongside the online duopoly. Here’s how its stake in online media will materialize, in four charts.

Eyes on Amazon
Brands may not be ready to spend big on Amazon in the same way they do on Google and Facebook, but they are taking it seriously. Nearly two-thirds (63 percent) of 250 business-to-consumer marketers surveyed in the U.S. said they would increase their spending on Amazon over the next year, according to a report by GroupM’s Catalyst done in September. Fifty-four percent of respondents said they would increase their Google budgets, while 53 percent said they planned to spend more on Facebook ads.

Amazon’s growing share of budgets is in part due to its being new to many advertisers. Just 15 percent of the marketers interviewed said they use all of Amazon’s advertising products, while only 17 percent said they have a fully defined strategy.

Amazon’s ad business will surpass Twitter and Snapchat
The site’s ad revenues in the U.S. are forecast to hit $1.65 billion in 2017, significantly less than that of Google ($35 billion) and Facebook ($17 billion) but ahead of Twitter ($1.21 billion) and Snapchat ($642 million), per eMarketer. Advertising on Amazon is rising faster than almost every other big ad publisher, according to eMarketer, with a 48.2 percent rise set for 2018. In 2019, Amazon will take $3.19 billion in net U.S. digital ad revenues, equating to around 3 percent of total digital ad spending.

Amazon looms large in the purchase process
Amazon is becoming as ubiquitous to product searches as Google is to general online queries. While more shoppers in the U.S., Germany, the U.K. and France use Google (85 percent) for product research and shopping, 56 percent use Amazon as the starting point for product research, according a survey in September of 3,100 shoppers by technology platform Kenshoo. Even if shoppers find a product that’s suitable on another site, more than half (51 percent) admitted they will usually check Amazon to do more research before making a purchase.

Agencies are boosting spending on Amazon
WPP CEO Sir Martin Sorrell has been one of the most prominent voices on Amazon in 2017. Hopeful that the shopping giant will break Google and Facebook’s stranglehold on online media, Sorrell and his peers have maneuvered their agencies to win more of the budget going into the channel. That shift is reflected in WPP’s plan to increase its spending on Amazon by 40-50 percent, to around $300 million, according to The Wall Street Journal. Similarly, French holding company Publicis will increase its year-over-year spending on Amazon by 50 percent to $300 million in 2018. Omnicom is set to double its year-over-year spending on Amazon next year to around $200 million.

Most advertisers want to test the impact of Amazon ads, said Andreas Reiffen, CEO at performance marketing specialist Crealytics. “We’re mainly being asked two questions: What return on ad spend can we expect?” he said. “And how much incremental uplift can we generate by spending additional advertising money on Amazon?”

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Hear how Lotame’s data management platform (DMP) has helped leading media companies increase CPMs, sell more media, and improve ROI. Learn more about how Lotame works with publishers around the globe at https://www.lotame.com/solutions/publishers/
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