Less BS, More Facts, Some Opinions
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The May deadline to comply with Europe’s General Data Protection Regulation (GDPR) is swiftly approaching, and ad tech and security startups are forming a new industry: privacy tech. Companies like PageFair, Evidon, Prifender, Tealium and Segment hope to capitalize with GDPR compliance solutions for brands, publishers and even other ad tech vendors. The International Association… Continue reading »
As the e-commerce world readies itself for the last push of 2017, in-house teams and agency partners alike will be finishing up their final rounds of Cyber Weekend number crunching.
With figures now emerging, everything points towards 2017 being another bumper year. Black Friday sales up. Cyber Monday sales up. People are both buying and spending more, and, perhaps most encouragingly for our sector, an increasing proportion are doing so online.
While it’s clear that the four-day period is now a critical part of any online retailers’ success, it has equally grown to become a key indicator of how a business will perform over the Christmas period. Consequently, marketers now operate under the dual stress of trying to ensure their brand is ahead of the Cyber Weekend curve, with the additional weight of knowing that results will also forecast their festive bottom line, and they can’t afford to get it wrong.
Preparing for 2018
Challenging questions will already be starting to form in preparation for 2018. With more retailers than ever participating in some element of promotional activity, how do you address the competition and maximize revenue from your budgets without overspending? And what insights can be gleaned from 2017 to ensure you can almost guarantee the same level of performance in the years beyond, without cutting deeper into your margins?
We can’t give you all the answers; every business is different, as are the initiatives that will work best. But what we can offer is fresh a perspective on how to tackle these problems by showing you three ways in which we addressed them with our clients.
Study your audience closely
Any strong marketing strategy relies on a solid understanding of the audience your product or service attracts, as well as the levers that drive them.
While Cyber Weekend will attract your core audience, you also need to pay attention to how the gifting season influences the make-up of your customer base.
Last year, we noticed a shift in the demographics of converting users for one of our sports retail clients. The audience became more female in its breakdown (Fig. 1.1), and also swung towards older generations (Fig. 1.2) – not the characteristics typically expected when it comes to sports merchandise.
Looking at additional data, we also noticed a greater proportion of sales coming from people in a relationship or two person households (Figs. 1.3 & 1.4).
By putting all these pieces together, it became clear that women buying gifts for their partners was a significant customer segment to focus on. From these learnings, we created a campaign with tailored messaging and bidding strategies for the 2017 Cyber Weekend and Christmas period.
The next step is to look at how much a conversion costs you from each consumer group. While the bulk of your revenue may be coming from a certain demographic (perceived to be your core audience), this may be because most of your advertising is directed at this audience.
For example, when we look at the consumer age range for a fashion retail client of ours, the majority of their revenue came from 18-34 year olds. As a result, its brand and messaging was geared towards these age groups, as were its rather expensively assembled paid search campaigns.
When we took over their accounts, however, we learnt that over the course of the year the most cost-effective age groups to target were the ‘middle-aged’ brackets (Fig. 2.1). Bid multipliers were applied across our activity, which greatly improved results.
Nevertheless, once we entered Cyber Weekend, an interesting shift occurred. First we witnessed a significant improvement in revenue-per-click performance from 18-24 year olds, along with an uplift for 65+ users (Fig. 2.2).
Fig. 2.3 highlights the scale of this change. Rather than sticking with the same bid multipliers, we needed to respond quickly to reflect the behavioural changes. As a result, the negative bid multipliers placed on 18-24 year olds were reduced, and the positive multipliers were increased even higher for the 65+ audience.
Understanding your audience is key, and when it comes to promotional periods, always keep a close eye on two things: how the breakdown of your audience changes, and how this impacts the way in which you should spend your money.
Pick the moments to push
It’s Thursday evening. Campaigns have been prepared, budgets have been allocated and digital marketing managers across the land can rest easy until it’s time for those Tuesday morning reports.
Unfortunately, we all know it doesn’t quite work like that. It instead involves keeping a close eye on how much money those preciously apportioned pounds/dollars are earning you.
Even during this most promotional of promotional periods, there are still moments to pull back on advertising. Spending as much as you can (as evenly as you can) over the entire four days is a one-way street to overspending, under-delivering and sleepless nights.
So rather than sitting there fretting, why not monitor your purchasing trends to see when the best times would be to maximize spending?
A trend that we’ve really seen come to the surface in 2017 is what we have called the ‘pyjama panic buy’. As you can see in Fig. 3.1, at 11pm each night, we witnessed a spike in return on advertising spend from our campaigns. Unaware of when offers end, consumers have a tendency to purchase late at night (around 11pm) in the fear that the discount will have vanished by the time they wake up.
With retailers extending promotions across the weekend and beyond, the process repeats itself each evening. What’s more, by this point in the day a portion of your competition will have undoubtedly reached their daily spend caps too.
Save your pennies in the morning, and push them later when it really matters.
Being the best at the bottom
With Cyber Weekend becoming an ever more permanent part of our collective consciousness, the number of people directly seeking out offers (rather than waiting for them to magically appear) continues to grow.
Analysing Google Trend data from 2017 in comparison to 2016, Fig. 4.1 demonstrates the year-on-year growth of Black Friday related search terms. Not only did we see a general uplift over the four day weekend itself, but we also saw growth in interest in the weeks leading up to 24 November.
What this tells us is that consumers are more proactively researching which brands will be offering discounts, and what those discounts look like – all before Cyber Weekend kicks off. We can therefore make the solid assumption that more and more people are entering the period with a pre-conceived idea of what they’re in market for.
Pull channels as a result become even more of a race to the bottom. While branding during the research phases is clearly an important exercise, advertisers should be questioning more than ever how they can get in front of the user at that final point of purchase.
One way in which we managed this was by capitalising on the uplift in volumes around Black Friday based terms. Our proprietary Google Shopping technology gives us the ability to target keywords of interest through our performance-based model. In doing so, we ensured our client dominated the space at this crucial stage. This could come in the form of specific products they stocked, or even brands that they resold (Fig. 4.2).
Every single day our platform dynamically pulled out the key terms based on recent data, and adapted campaign structures to prioritise the products that drove best performance.
When assessing the development of Cyber Weekend as a force within the online world, it’s clear that its claws are firmly planted within our promotional calendars.
What comes with this mass awareness is mass competition, with businesses of every shape and size entering the market in an attempt to take advantage of the buying frenzy.
For digital marketers, the path to success is becoming ever more complex. Which channels do I use? What offers do I push? Which products will become best sellers? How do I keep an eye on margins?
The answer is to narrow your focus; ignore the dizzying lights of all that volume, and focus on the detail. From there, your efforts can grow.
Get your hands dirty. Get creative. Get granular.
Alex Haynes is senior partnerships manager at international digital agency NMPi.
Harford and Uber CEO Dara Khosrowshahi worked closely together at Expedia.
Uber is filling another key role in its executive ranks just as the year turns. The ride-hail company has hired former Orbitz CEO Barney Harford to be its first-ever chief operating officer.
Harford, who has been learning the ropes at Uber as an adviser since October, worked closely with Uber CEO Dara Khosrowshahi at Expedia. Before becoming CEO of Orbitz — which Expedia later acquired — Harford led Expedia’s push into Asia while Khosrowshahi was CEO. He begin his official work as COO on Jan. 2.
His appointment comes as Uber embarks on an important year. Coming off a year wracked with public scandal, Khosrowshahi is under a great deal of pressure to turn the company around in 2018. Adding to that, the long-time travel executive has his sights set on taking the company public in 2019.
Harford joins a growing C-suite. In October, Khosrowshahi appointed former Pepsi executive Tony West to be Uber’s chief legal officer. The next priority for the company is to fill the CFO role.
“I have never met a stronger operator or a more thoughtful strategist than Barney,” Khosrowshahi wrote. “He is able to go deep on key aspects of a business while never losing sight of the big strategic picture. He loves engaging with operations, marketing, product, and engineering teams around hard problems, and is passionate about using technology to transform the world.”
This ain’t your grandpa’s Walmart.
When Walmart paid $3 billion for Jet.com and its founder Marc Lore, the promise was that the entrepreneur would help the retailer appeal to new types of customers.
Here’s the next step in that evolution.
A new Walmart subsidiary, called Code Eight, has recently started testing a personal shopping service for “busy NYC moms,” according to multiple sources, with the goal of letting them get product recommendations and make purchases simply through text messaging.
The target customer of Code Eight is described in an online job listing as a “high net worth urban consumer” — translation: A rich city dweller — certainly not the historical sweet spot for Walmart’s main business.
Household items are delivered for free within 24 hours; other purchases are delivered within two business days. Returns are picked up for free at a customer’s apartment building or house.
Walmart’s startup incubator, Store No. 8, is also working on another under-the-radar project, dubbed Project Kepler. This effort aims to reimagine the in-store shopping experience with the help of technologies like computer vision.
Multiple people familiar with the project tell Recode that one goal of the initiative is the creation of physical stores that would operate without checkout lines or cashiers — in a similar fashion to Amazon’s futuristic Amazon Go store, which was announced a year ago but has yet to open to the public.
A Walmart spokesperson declined to comment.
Taken together, these Walmart initiatives mark a major leap in the vision for the type of businesses Walmart will operate, and customers it will serve, five or 10 years down the line. But since both business strategies are in early stages, there is no guarantee that either will develop into a long-term business or launch widely.
Walmart had previously announced that Rent the Runway co-founder Jennifer Fleiss is heading up Code Eight, but has revealed little to no details about the startup.
Recode has learned that Code Eight plans to eventually charge a membership fee, but current testers are using it for free. The personal-shopping service is currently focused on items in “health & beauty, household essentials and apparel/accessories” categories, according to a job listing. It’s not clear if the startup is sourcing this inventory from Walmart and its subsidiaries, or from outside retailers.
Code Eight has told early users that they can order products simply by texting a photo of it. They can also message with a general request for a type of product they need, and leave it up to the service to pick the specific item for them; customers fill out a survey upon joining that is supposed to help personalize their experience.
One source says that the Code Eight product has the appearance of an automated bot, but seems like a human is actually the one communicating on the other end of the message. That may change over time.
“[W]e set our sights on taking the lead in conversational commerce by leveraging machine learning, NLP, and personalization algorithms,” a Code Eight job listing reads. NLP refers to natural language processing — essentially, how a computer turns a human’s spoken or written request into instructions it can process.
The Project Kepler project focused on the future of in-store shopping is being led by Mike Hanrahan, the co-founder and former chief technology officer for Jet.com, multiple sources tell Recode. It is located in Hoboken, N.J., where Jet is based.
A Project Kepler job listing for a “computer vision engineer” says that the role will involve creating a “best-in-class consumer experience in the physical retail space.”
Amazon’s Go concept uses a combination of sensors and cameras to track what each store shopper takes off of shelves so it can automatically bill them for their purchase without their having to stop to pay on the way out. The store’s launch has been severely delayed, however, with reports that the technology did not work well when the store was crowded.
Walmart is envisioning a similar system that would potentially eliminate the need for cashiers in stores outfitted with the technology. Walmart has more than two million employees worldwide, many of whom work at checkout.
But it’s possible that the Project Kepler technology would be used in new types of store formats, rather than be retrofitted for existing stores. This project is just one of several across Walmart focused on what the retail store of the future should look like, according to a source.
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“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 Trey Stephens, director of audience monetization at Acxiom. As 2017 comes to a close, it’s a great time for brands to assess ways to improve marketing strategy and better capitalize… Continue reading »
Consultancies aren’t just parking their yachts off the French Riviera at Cannes. They’re setting their sights on major marketing budgets, and 2018 will be the year they start their conquest to remake the industry.
The CMO budget is the last line item on the balance sheet that companies like Accenture, IBM, and Deloitte haven’t touched. In the agency world, many are shrugging off consultancies’ maneuvering as irrelevant to their business and clients. While market inertia may slow down consultancies in the near term, they are playing a much different game than agencies — and the largest agencies should be particularly worried. Consultancies are integrating the entire digital marketing environment, of which paid media is just one facet, to tell a broader story about ROI — and they have the data to prove it. They aren’t simply selling ads, they’re helping the brand sell products and services with holistic solutions that cover the entire value chain.
Traditionally, Accenture, IBM and other consultancies have been system integrators and technical infrastructure companies. They implement large scale IT solutions and operate data centers for corporations — about as far from advertising creativity as a company can get. But as their core services expanded — and there was a clear need from the market — they bridged into marketing-related activities, such as building interactive and e-commerce websites. Now, they’re consolidating their role in marketing and design, with the CMO budget being the last untapped pot of money. This shift is predominantly driven at the CEO or CFO level, while ad agencies typically connect with CMOs at brands.
These companies have adopted a standard playbook as they remake advertising in their own image: acquire new capabilities, or enter client accounts through audits. Accenture recently purchased the French digital commerce agency Altima, the company’s 17th acquisition since 2013 as it expands its move into marketing and advertising. Altima joined Accenture’s roster of previous acquisitions, including US-based marketing and design agencies Wire Stone and Matter. They’re also acquiring people: Accenture recently hired OMD‘s EMEA president Nikki Mendonça to be the global president of intelligent marketing operations. Rigorous audits will also win consultancies the CMO budget: they’ll look for a pain point within a brand’s marketing strategy, provide a deep analysis of why that’s a problem, and offer a technical solution that integrates a number of third party solutions. The consultancies’ deep experience in building complex solutions out of many building blocks provided by independent vendors is the key enabler for these complex, transformational projects.
Market forces are pushing businesses to become more digitally-integrated. Brands must go all in to digitize themselves if they want to survive this tidal shift — they’ll be called on to better connect with consumers online, tell a broader story about the digital buying journey, and measure the impact of their marketing efforts. For example, lightweight direct-to-consumer CPG brands are upending the beauty industry with influencer-led marketing and slashed prices due to a lack of overhead. As major advertisers go digital, they’ll also face significant challenges in bringing all facets of their business into compliance with data privacy regulations around the globe. Consultancies are demonstrably better positioned here — for example, IBM recently showcased its capabilities to help brands weather the General Data Protection Regulation (GDPR) in the EU.
Traditional ad agencies don’t currently have the staff, expertise, or infrastructure to build out and support this deep digital integration — and they face a considerable amount of resistance from their brand clients as they wage a cold war over marketing data. As a result, they’ll continue to lose market share to consultancies that can build systems and integrations for advertisers, and offer both efficiency and tighter control over their data.
In 2018, consultancies will test the waters in the advertising space by auditing major brand marketing budgets — and it will likely be a bloodbath. Consultancies will come for high-value targets like brand and creative strategy first, and if agencies can’t prove their value, they’ll be left out in the cold. Major agencies are right to be worried — consultancies will likely move fully into the space in 2019 and 2020, once they’ve hammered out the details of adapting their business model to the marketing industry.
There is a silver lining for agencies, though — for the moment, these consultancies will likely steer clear of the execution layer, and leave media buying to agencies. Instead, they’ll continue to expand their creative efforts: building interactive experiences, setting up e-commerce sites, and optimizing and integrating technical solutions. Media buying requires a heavy investment in working capital with a comparably low rate of return to what consultancies are used to. In fact, this will likely prove to be a major boon to small shops and medium-sized agencies — following an audit of a major brand’s marketing budget, independent agencies will be on an even playing field with major agencies. If they can integrate with the consultancies’ technical solutions, and make the right pitch, they could win unprecedented budgets. But is there a motivation for consultancies to move into media buying? Yes — and they will move into media buying aggressively once they’ve isolated a vastly different media buying model than the traditional paradigm.
For the CMOs of major brands, the future of their marketing spend will depend on the outcome of a mandated consultancy audit. Long-time agencies of record could fall by the wayside — unless agencies and brands agree to a mutually beneficial, more transparent deal. Barring this, consultancies will help CMOs manage their budgets, soliciting bids from creative shops, media agencies, tech vendors, and platforms on the CMO’s behalf — and building the technical solution that integrates all the pieces.
To defend against consultancies, agencies must provide greater value, get leaner, and become more transparent. Smarter agencies — such as WPP — are already building out or buying IT infrastructure to integrate their digital marketing capabilities. But as these holding companies move from a verticalized to a horizontal approach, there’s still a challenge in connecting the disparate pieces for clients at scale — when each client wants a bespoke solution — while receiving fair compensation for their work.
Moving into 2018, agencies should lean on their bona fides: relationships, creative expertise, and organizational DNA that consultancies can’t easily access. The competition from consultancies should also be seen as an opportunity for agencies: to tell a holistic marketing story, built on deep ROI, across the nonlinear consumer journey.
NFL ratings are down this season, but in-game ad revenue continues to grow year-over-year this season, according to new data from Standard Media Index. This season’s NFL revenue, from September to the end of November, is up 2 percent among all networks. There was one additional nationally aired linear TV game than in the same…
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Welcome to AdExchanger Talks, a podcast focused on data-driven marketing. Subscribe here. Jonathan Suarez-Davis will speak at AdExchanger’s upcoming Industry Preview conference on Jan. 17-18. In the wake of several big acquisitions, Salesforce Marketing Cloud has surpassed $1 billion in annual revenue. In this week’s episode we talk with its chief strategy officer, Jon Suarez-Davis, who joined the… Continue reading »
What’s the Story? is a storytelling video series dedicated to learning what truly makes a great story, told through the lens of the world’s talent and practitioners of the craft in entertainment, marketing and beyond.
Gary Shenk, chief executive officer at Branded Entertainment Network (BEN), has been on the forefront of brand integration for a number of years — and is clearly bullish on its effectiveness for brands.
In the early days, brands dabbled in brand integration. But fast forward to the current state of advertising affairs and it’s clear that brands can find effective, game-changing opportunities in entertainment. In fact, integrations placed by BEN represented nearly $1bn in media value in 2017.
On average, BEN places about 14 integrations per day across streaming, TV and influencers — and in looking at the BEN roster, there are heavy hitters across the board. Dyson, Hyundai, Zillow, Microsoft and General Motors have been matched up with all manner of top-tier content, films and shows including House of Cards, Ghost in the Shell, Grace and Frankie, Portlandia, The Bachelor and more.
One of BEN’s signature integrations was Heineken for the James Bond franchise which, Shenk says, was a big moment of change — switching from a martini to beer.
What’s telling is that, in 2017, about 20% of BEN’s integrations were on streaming shows, further signaling the growth and opportunities in the space. In Shenk’s mind, part of this lies with traditional advertising losing relevance — and being in the content itself is a strong proposition for brands.
“People are spending more time watching entertainment than ever before, but they’re spending less time watching ads,” he says. “For brands, the only way to be noticed by contemporary audiences is to be inside the content itself.”
Additionally, the evolution of binge watching heralds another opportunity for brands to be more deeply engaged with audiences that are paying close attention.
“When you binge, you’re more engaged with the content. You watch two, three, four or more episodes at a time,” says Shenk. “A brand being not only in the place where they know people are watching, but where they know that the people are watching [and] are incredibly engaged and getting more engaged — that is invaluable. That’s why we think this category is only going to continue to grow.”
Though the caché of being attached to creative projects and entertainment is enticing, the fact is the brands, and especially CMOs, need to see the real value of brand integration. To BEN, marrying the art and science is critical.
“Showing the data is the most important thing,” notes Shenk. “Showing how authenticity really, really matters. We measure every integration that we do and show how that relates in a change in awareness, or brand affinity, [or] purchase intent.”
Authenticity is an important consideration. According to Shenk, when brands trust the creative process and BEN’s expertise, it goes beyond just making people aware of a brand or product.
“The reality is that if you give a producer or a creator the leeway to show your brand in a way that is going to emotionally connect with the audience, it is almost always a win for the brand,” he says.
Having been in the entertainment industry for a number of years, Shenk also has strong opinions on what makes a great story. In his mind, it’s all about the character. A rabid reader, he believes that motivations and imperfections make a great character and help drive a strong story.
His favorite story of all-time, The Great Gatsby, certainly fits the bill.
“You have this rich, incredibly good-looking guy who has it all,” says Shenk. “What does he want? He wants love and he wants love of specifically of one individual. He has it all, yet, he has this incredible Achilles heel of this need for affection that is elusive to him. So, that’s a good example of the type of story that I love. One with a character that’s motivated to do something in an incredibly strong way that you sympathize with because of his flaws.”
What’s the Story? is sponsored by Branded Entertainment Network (BEN), the first global network for branded product integration in the entertainment industry, across all media, including the influencer space.
If you would like to pitch someone for “What’s the Story?“, please complete the linked form.
The ad tech industry is a fast-moving and innovative environment. It’s also very competitive and full of gimmicks and buzzwords in place of technology and real solutions. Santa’s a little preoccupied this time of year, so I thought I’d give him a hand with a “naughty or nice” list—the best (and worst) trends in ad tech and digital media—to help marketers break through the hype and kick off the New Year with confidence. See which ones are meaningful – and which ones lack substance.
THE NICE LIST
Ad quality
After P&G’s chief brand officer Marc Pritchard challenged brands to “stop giving digital media companies a pass,” we saw growing demand for better brand safety, ad fraud and viewability standards. Digital media companies are beginning to respond with improvements in fraud prevention, transparency and accountability. The greatest impact comes from all three of these areas working together in concert, which is becoming the new standard. There’s still work to be done, but it’s encouraging to see continued progress as poor ad quality can negatively impact advertising performance and cause long-term damage for brands.
People-based media
Even though the industry has been talking about people-based media for some time now, this year we saw more and more brands demonstrate their commitment to reaching consumers with tailored messaging. The key is to ensure you’re talking to real people across all their devices and digital touchpoints, and not just cookies. While not everyone is truly delivering on the promise of one-to-one marketing at scale, brands are moving in the right direction. I encourage all companies to work towards delivering only relevant, meaningful messages to individuals on the right device and at exactly the right moment.
Measurement
Measurement may not be the most exciting aspect of marketing, but it’s among the most important. Brands want more accurate measurement of their advertising performance, and digital media companies are responding by (finally) abandoning last-click attribution for more advanced and effective measurement methods and metrics – like incremental return on ad spend.
THE NAUGHTY LIST
Non-validated metrics
Let’s face it: the trust is gone. Marketers have been “burned” too many times by digital media companies’ miscalculated metrics related to how consumers are interacting with content on their platforms. Attribution or measurement that isn’t validated by a third-party partner has always been questionable, but this year it was increasingly troubling to some advertisers that rely on such platforms for content distribution and monetization. Digital media companies must strive for transparency and accuracy to ensure they are truly driving results or they will continue to face more backlash.
DIY solutions
Some things you can do yourself, while others you should leave to the pros. Too often, I have seen marketers take the DIY approach and try to piece together multiple technologies to activate their CRM data for digital marketing. The result is an underperforming, money-wasting ecosystem. It takes an investment of time, talent and capital to build robust platforms that can bring that data to life, accurately reach consumers at scale and build personal connections. Marketers who take the DIY path typically spend more time refining and fixing, and ultimately lose sight of the true cost of ownership. Their time and resources would be better spent on driving their business rather than learning martech skills.
Trends that overpromise and under-deliver
AI, VR and blockchain are the future, or so they say. These buzzwords have been getting a lot of attention lately, but are they actually a sound business investment? While there’s value in staying on top of emerging tech and it’s fun to think about how they’ll shape our world in the future, they represent just one facet of a product or deliverable and are not a strategy on their own. Marketers need to do their due diligence and understand what’s underpinning these tools so they can ensure they’re good for their business in the long run and not just a short-lived (and expensive) gimmick. Read the fine print before buying into the hype.