Data-Labor-Technology

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today’s column is written by Ka Mo Lau, chief operating officer and chief financial officer at Thunder. The agency industry has had an identity crisis in recent years in the wake of digital media’s disruption.… Continue reading »

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“The Sell Sider” is a column written by the sell side of the digital media community. Today’s column is written by Erik Requidan, vice president of programmatic strategy at Intermarkets. Since the early days of programmatic, the tire kickers have loudly voiced concerns over its safety and effectiveness. They bemoaned the lack of transparency and… Continue reading »

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. GDPRebuttle GroupM issued a response Tuesday to a Digiday article about its publisher Data Protection Addendum issued in preparation for GDPR. The agency group denies that the new policy asks publishers to share control of their audience data so GroupM can continue targeting ads… Continue reading »

The post GroupM Clarifies Its Data Addendum; Middleware Gets Hot appeared first on AdExchanger.

As brands continue to bring marketing capabilities in-house, agencies have no choice but to adjust.

Brands like Procter & Gamble, Unilever and United Airlines are bulking up their in-house capabilities, and others are following suit. “We are now seizing back control,” P&G marketing chief Marc Pritchard declared recently. The outcome of the move could be disastrous to agencies’ bottom lines. WPP Group’s share price, for instance, is down 14 percent from the start of the year.

“This is going to shrink the size of the outside agency pie because agencies are often not set up to keep pace with the range of tactics and navigate organizations in the ways now required,” said Josh Kelly, managing director at branding and design agency Fine.

But just like with the rise of digital, the agency business isn’t going away anytime soon. Instead, a trend toward client control will end up benefiting nimbler agencies over massive ones and project work over retainers. As always, adaptability will ensure survival.

“We have to look at it as a positive and adjust,” said one agency executive.

One winner: agencies that have a structure to accommodate project-based work. Agencies are already seeing an uptick in requests around shorter, specialized projects. According to a survey released in January from development firm RSW/US, 35 percent of 115 agencies surveyed said a majority of their assignments are now project-based, while 16 percent said over 80 percent of their work is now project-based.

Unlike longer campaigns, project-based work can be done more quickly, often requires fewer resources and has the potential to bring in just as much revenue as longer-term relationships, according to agencies.

One exec at a large agency said although it has lost some agency-of-record opportunities because clients brought resources in-house, it has been hired for more project-based work, and revenue has not slipped due to the shift. In fact, the agency is now making half of its revenue from project-based work and the other half from traditional long-term relationships, whereas a few years ago, the revenue was set at 20 percent coming from one-off projects and 80 percent coming from AOR relationships. Because of the rise in these assignments, the agency has made internal adjustments like orchestrating smaller teams that work one-on-one with clients. Over time, this could save an agency money, although the exec admits that like every other agency, it doesn’t have it “all figured out yet.”

“We have looked at a more dedicated model where we have fewer people at higher experience levels attacking these consultancy-type projects,” said this exec. “We have teams that are smaller and can get these jobs done in a more time-condensed period.” What might’ve taken the agency three or four months to finish before is now confined to two- or three-day sessions with the client and all agency partners, the exec said.

What might be difficult to do, said this executive, is value pricing these types of sessions for clients since they would be reportedly receiving the same service but in a shorter time.

But agencies might want to work this out. “There is ongoing pressure on pricing for like-for-like services that agencies provide, not just because of in-sourcing that occurs but because of changing client preferences,” said Brian Wieser, senior analyst at Pivotal Research.

Marketers believe specialized boutique agencies, which already thrive on individual assignments, will benefit the most from the in-house movement. “Brands will start looking toward niche agencies who really understand their craft and have deep expertise,” said Quynh Mai, founder at Moving Image & Content.

For others, more project work and fewer AOR relationships means potentially less extensive and expensive pitches, which marketers have found exploitative, draining and a waste of time and money. One agency executive, who prefers to remain anonymous, said his agency will spend between $50,000 and $100,000 on a pitch and only receive a $20,000 to $30,000 stipend from a potential client once every 10 pitches, and only if the agency makes it to the final round. What’s more, ideas can be stolen from the pitch process.

“Every once in a while, you’ll get a client that throws language in the [nondisclosure agreement] that it owns any spec work that an agency does in the pitch,” said this executive. “Most smart agencies won’t sign that. We always push back on that.”

“We have seen a client like an idea and don’t select us, but several months down the line, we see it come to life somewhere else,” said another agency executive, on background.

And because pitches have gotten so competitive, some agencies come with the entire campaign already finished, according to an agency executive. But often, a client might identify a need for a pitch and then change that once the agency is on board, resulting in wasted work hours, money, sweat and tears. For the agency above, projects mean the chance to agree to what it calls a “charter engagement,” a period of time when it can work to uncover the real opportunity for their client.

There’s also the hope that, as a result of forming their own internal teams, clients will be more cognizant of what they already need, and pitch projects to agencies accordingly.

“A lot of times it’s easy for brands to initiate assignments without doing the homework on what that outcome needs to look like,” said Stephanie Parker, svp of brand leadership at agency Barkley. “As they take on more accountability internally, they have to sit down and think about how they are using their agency resources to their biggest advantage.”

“Clients themselves will have some skin in the game,” said another agency executive.

Chris Mele, managing director of creative studio Stink Studios, said building an in-house agency means brands will have more knowledge around the overall creative process, how much talent can cost and how difficult talent is to find and retain, which might just open their eyes to how much they need agencies in the first place. Already, some brands are finding it difficult to recruit for the internal roles they need to fill and have resorted to asking their agencies to act as headhunters.

“It’s quite easy to balk at an agency estimate for a project when you’re looking at the overall costs or scope,” said Mele, “but after a couple of quarters of running a 20- or 40-person in-house team, there may be a shift in perception on the return you receive for your money.”

The post Agencies see change ahead as clients take more marketing in-house appeared first on Digiday.

At the Digiday Media Buying Summit earlier this month in New Orleans, we sat down with 63 media-buying executives to learn how they’re implementing artificial intelligence and their concerns about competing with consulting firms. Check out our earlier research on how retailers are using mobile apps for consumers here. Learn more about our upcoming events here.

Quick takeaways:

• Only 25 percent of media-buying agencies have integrated AI into their media-buying processes, according to Digiday’s survey from the event.
• Only 13 percent think AI will replace media buyers.
• Seventy-six percent believe consulting firms pose a competitive threat.
• Roughly half (49 percent) think consultancies pose the greatest threat to full-service agencies.
• Concerns about increased competition from consulting firms have remained constant from last year.

Robot media buyers?
AI is a hot topic in any crowd, especially for those worried about losing their jobs to the technology. A McKinsey Global Institute report from November predicts that 400 million to 800 million people will lose their jobs to AI by 2030. For now, however, media buyers seem to think their jobs are safe. Only 13 percent of respondents to Digiday’s survey believe AI will replace them.

The post Digiday Research: Media buyers fear consulting firms, not AI appeared first on Digiday.

NBCUniversal CEO Steve Burke joined other media executives and politicians in suggesting that Facebook needs to be regulated in the wake of its user data breach.

“Facebook is a gigantic business, and gigantic businesses have big responsibilities to the world,” Burke said. “For decades, broadcast and cable TV has had regulation. We don’t take cigarette ads, we don’t put liquor ads on at 2 p.m. in the afternoon, and we look at the spot to make sure it’s OK with standards.”

Burke was speaking March 27 during NBCU’s fourth annual Innovation Day, an internal conference the company hosts for its top advertising clients. This year’s event, which was held in Studio 8H — where NBCU shoots “Saturday Night Live” — at 30 Rockefeller Plaza, drew 450 marketing and agency execs from companies ranging from Amazon to Kia and all the major ad holding companies.

Burke said the data firm Cambridge Analytica has proved to be a bigger issue than Facebook’s past problems because it ties directly into Facebook’s business model. Facebook routinely collects data that its users don’t always know it is collecting and then sells that information to buyers.

“Facebook has a real problem because, at the end of the day, large businesses are based on trust,” Burke said. “There has to be trust with the consumer, and there has to be trust with investors.”

Of course, Burke wasn’t negative toward every platform. He praised Snap, in which NBCU invested $500 million during the company’s initial public offering last year.

During the Winter Olympics in South Korea earlier this year, NBCU struck a deal with Snap to program daily stories from the games, a daily Snapchat Discover channel programmed by BuzzFeed and, for the first time, live broadcasts of important moments during the Games. Burke said 45 million people watched NBCU’s Olympics programming, with 75 percent of them falling between the ages of 18 and 34.

Beyond the Olympics, Burke also noted that NBC News’ twice-daily Snapchat show, “Stay Tuned,” pulls in 2.5 million viewers per broadcast and 5 million viewers on average every day. And NBCU and Snap are operating a joint venture to create scripted Snapchat shows, which will likely be longer than the existing unscripted programming on the platform, according to a previous Digiday report.

NBCU favors Snap for a variety of reasons, Burke said. Snapchat values professionally produced content and realizes media companies need to be able to sell ads to pay for that content. Snapchat also curates the content, which makes for a more ad-friendly environment, he added. (Tasteless Rihanna ads notwithstanding.)

The pressure being applied on major media companies and marketers manifested itself in different ways during the NBCU conference.

In another session, Pearlena Igbokwe, president of Universal Television, threw a little shade toward tech companies looking to create original programming. “The wonderful thing about the kinds of storytelling that we tell — there are a lot of intangibles, which is why the notion of a computer one day telling a great story is never going to happen.”

Among TV advertisers, the need for television ads to be able to prove business outcomes in the way Google and Facebook can remains critical to address.

“If we can’t figure out a way to get the business outcomes [that clients need], then there is no way to figure out a better commercial experience that [TV networks can charge more for],” said John Swift, CEO of investment and integrated Services in North America for Omnicom Media Group.

One result of the growing power of Google and Facebook is the consolidation happening among major media and telco companies. AT&T is trying to buy Time Warner. Disney is trying to buy parts of Fox. Comcast and NBCUniversal put in a bid for Sky in the U.K. Discovery bought Scripps Networks Interactive. Verizon merged AOL and Yahoo.

“It’s happening for very logical reasons: As the world is increasingly global and you’re increasingly competing for ad dollars with Google and Facebook, you want to be a global player yourself,” Burke said. “Everyone right now is trying to figure that out — but not all consolidations are going to work.”

The post ‘Facebook has a real problem’: NBCUniversal CEO Steve Burke on the impact of platforms appeared first on Digiday.

Brands are pumping more money into non-standard ad formats like branded content, but sometimes the hardest part of the sell can be brands’ media agencies. In the latest in our Confessions series, in which we grant anonymity for honesty, we spoke to a digital media executive whose company primarily makes its money from non-traditional advertising, like branded content and in-person events, about the biggest obstacle to doing those deals.

What’s the biggest impediment to your business?
I wish the media agencies would go away.

Why’s that?
Because they’re not incentivized to make innovation happen. They still are often living in this world of web-based impressions, banners, programmatic advertisements that, understandably, are very measurable from a quantitative perspective. But for digital advertising to move forward, we need to come up with stuff that hasn’t happened already, new ways to market to an audience, to measure whether something is successful. But the way the model works right now is the media agency requires there to be a rigid format via which the success of campaigns are measured. I mean, they’re still having problems figuring out how to measure social marketing.

Do you do things to work around the media agencies?
We are always, trying, and luckily we’ve been successful. Yeah, it’s critical you have a relationship directly with the brands.

Do the media agencies try to put themselves in the middle of it anyway?
Sure. Sometimes there’s a contract there that requires they be involved. And some brands understand that and say, “Look, we’ll figure out how to work with you and the media agency together.” We have plenty of examples of relationships where we work with the brand directly, and they bring in the media agency, and we all together figure out how to make something work for everyone involved. But more often than not, the marketer is the one legitimizing stuff to the media agency, where the media agency is saying, “How are you going to spend this much money on this?” or “This doesn’t make sense. This isn’t the way we do things.” There’s always this sort of “We have to fit this into the media agency box,” and that kills deals sometimes.

What’s an example of how a media agency has mucked up a deal with a brand?
A lot of times they need to put things into a spreadsheet, to say, “Here are the impressions, here’s the reach.” Often their models are built to deliver eyeballs at scale and to find the highest value CPMs available.

Have you had to do things to please the media agency to get the deal you want with the brand?
We have to play that game, for sure. There’s still money being made there. It doesn’t mean that it’s not worthwhile to pursue a deal from a media agency because they often connect us to brands that we wouldn’t otherwise be connected to. But ultimately we want to have a relationship with the brand, to sit in the room with the marketer and say, “What do you want to do? How can we help you do that?”

 

The post ‘They need to put things into a spreadsheet’: Confessions of a media exec on ad buyers appeared first on Digiday.

While beauty and fashion publishers have opted for highly polished, aspirational visual content on Instagram, Hearst title Cosmopolitan UK decided a year ago to change its strategy on the platform to focus on posting more funny, shareable content.

This approach appears to be paying off, with Cosmopolitan UK, which has 330,000 Instagram followers, growing its Instagram following by 31 percent between the end of 2016 and the end of 2017, according to the publisher. The amount of content it publishes on Instagram has increased, too; it posted 130 times in February, up from 70 posts last September, according to Socialbakers data. Interactions — likes and comments — on the posts also doubled from 20,000 a month to nearly 400,000 between March 2017 and March 2018, according to Socialbakers.

Cosmopolitan UK said it is still honing its content on Instagram. It focuses on celebrity news, beauty reviews, like galleries on how to apply makeup, as well as recipe videos, shareable memes and lifestyle and health care topics, including mental health, politics, people’s experiences dealing with chronic illnesses and coming-out stories. Between March 2017 and March 2018, nearly 60 percent of its Instagram posts were photos and 40 percent were videos, per Socialbakers.

“Cosmopolitan is known for being a fun, insightful friend,” said Claire Hodgson, Cosmopolitan UK’s digital editor, adding that despite the title’s colloquial tone, there’s a growing appetite for more serious content on Instagram and in its articles.

Instagram Stories is growing as a referral traffic source for Cosmopolitan UK. The publisher aims to post between six and 10 Instagram Stories clips a day with the option of swiping up to read more.

In some cases, Instagram Stories drives more referral traffic for Cosmopolitan UK than Facebook does, though Facebook, where the publisher has 2.3 million followers, is its largest platform in terms of followers. For example, when celebrity Kylie Jenner gave birth at the beginning of February — after Facebook announced its news feed would deprioritize publisher content — Cosmopolitan UK posted about it on Facebook and on Instagram Stories. Within 45 minutes, Facebook accounted for around 30 percent of traffic to the page compared to around 60 percent for Instagram Stories. Ultimately, Instagram makes up a small slice of the pie, but, nevertheless, Hodgson said, “Instagram is the place where breaking news and viral content can really flourish.”

Other publishers are also experimenting with Instagram to drive traffic. Condé Nast Britain’s fashion title Glamour UK has increased Instagram referral traffic by 25 percent since Jan. 1, according to the publisher. BBC News, meanwhile, is using Instagram Stories to guide people to sign up to its newsletter.

“Instagram Stories can really pay off as a referral tool,” Hodgson said. “Previously, we were using it more as a branding platform.”

Image: Cosmopolitan UK via Facebook

The post Cosmopolitan UK grew its Instagram followers by 31 percent last year appeared first on Digiday.

It’s time for banks to clean up their houses.

At least, that’s the message Bank of America svp Lou Paskalis sent last month when he announced the bank will hire a brand safety officer to ensure the company’s ads aren’t served up next to controversial content.

“I get a text from my chief financial officer every time there is news about a brand safety issue. I know why he is sending them to me… at some point he is going to say ‘gee is marketing safe to invest in?’ and we don’t want that,” he said.“We have to clean up our house right now.”

Paskalis is part of a growing, yet somewhat puzzling trend: Top marketers at giant financial institutions are becoming the new most vocal people demanding change in marketing, evangelizing a cleanup of digital media, or simply becoming more “woke.”

It’s perhaps a little ironic: These are heads of marketing at companies that are part of an industry still recovering from the reputational crises brought during the financial crisis. Their investment banking counterparts continue to rack up fines for things like anti-money laundering violations and market manipulation — things that have long run rampant in the industry and perhaps always will.

Read the full story on tearsheet.co

The post How bank CMOs became the new marketing evangelists appeared first on Digiday.

Baidu is coming for European advertisers, but it will stick to its strength — building technology — to facilitate this while an agency takes its ad business to market.

The approach is unconventional for Western technology businesses but aligns with how the Chinese equivalent of Google likes to do things. Like Baidu has done in parts of China where it does not have a sales team, the company tasked a local agency in Europe, long-term partner agency Forward3D, to drum up interest in ads spanning search, display, native and in-feed mobile ads.

“We’re an online business with strong technical capability,” said Linda Lin, Baidu’s gm. “Baidu wants to focus on where we’re strong, which is the technology side. Agencies are experts in industries our teams cannot really understand at depth. We see value in that knowledge as we try to grow.”

Forward3D’s London office will be the only agency Baidu permits to sell two courses to marketers and agency executives in Europe. The first course offers a basic rundown on search advertising on Baidu, which makes up the bulk of the 86 percent of its revenue it took from advertising in its most recent quarter, while the second course expands into both search optimization and its nascent native ad business. The plan, according to Lin, is to appoint other agencies in other international markets over the coming months.

Companies that complete either course are then given access to the Baidu platform in the hope that an influx of brands stems the flow of online searches and internet ads shifting to rivals such as WeChat and Tmall. Baidu’s share of the entire search market reached a two-year high last October, but that figure slumped to 60 percent last month, according to financial analysis firm The Motley Fool.

“There are a lot of Western brands that Chinese people could learn from, as the average spending per capita is on the rise,” said Lin of the scale of the opportunity behind Baidu’s pitch.

As small as the search engine’s native ad business is — it accounted for 2 billion yuan ($318.6 million) in 2017 compared to the 20.4 billion yuan ($3.2 billion) Baidu made from all ads in its most recent quarter — Lin is optimistic. There’s a growing demand for the ad format both in China as well as internationally, she said. In-feed environments, particularly in its news aggregation app, seem to be the most successful format for native ads. The problem is most Chinese native ads are not in-feed, consequently reducing their native effect.

“The mobile in-feed ads are a big thing because the overall targeting around interest clusters and affinity groups allow you to go for very specific groups,” said Hannes Ben, chief international officer at Forward3D. “Clients love that [level of targeting] because it gives them an opportunity to really relate to the right people.”

With far fewer regulations around personal data and privacy, companies will be able to access far deeper and richer data on their potential customers in China. Earlier this year, a Chinese consumer group accused Baidu of snooping on users of its smartphone app, while Tencent and Alibaba have been forced to clarify to the public how they handle personal data after coming under fire for the practices they use.

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