Month: February 2018

Provenance and transparency aren’t just things Absolut talks about in an ad campaign. Both are becoming key to the brand’s shift from approaching media as a commodity it buys at the lowest cost to operating as a lever for growth.

The advertiser’s latest global ads feature its employees in the nude to show it is the “vodka with nothing to hide.” It’s an apt statement, with Absolut and owner Pernod Ricard trying to get clarity on what happens to their budgets on the likes of Facebook and YouTube. Despite a lack of transparency in advertising measurement and the spread of fake news, the duopoly’s audience is just too attractive for brands, said Craig Johnson, Absolut’s chief marketing officer.

Johnson outlined for Digiday a more measured approach to working with the platforms that is closer to the lower-key approach of Unilever marketing boss Keith Weed than the more combative stance of their Procter & Gamble counterpart, Marc Pritchard. Below are excerpts, lightly edited and condensed.

How have you exerted more control of the media strategy with the latest campaign?
When we launched “The Vodka with Nothing to Hide” campaign, we did all the global media [planning] in-house. We wanted to make sure we had the right collaborators, so we were having one-on-one conversations with suppliers that we know shared our values and beliefs. It wasn’t a scattered approach and meant that we were directly talking to certain partners like BuzzFeed and Facebook. We wanted to make sure that we worked with a limited number of partners. We don’t do everything this way, but we feel that those partnerships are the best way sometimes to get the best value for what we want to do. Yes, we do programmatic because we need to be where our consumers are. But the programmatic buys we’re making now prioritize quality [inventory].

Can Absolut increase reach by reducing waste?
We have been able to increase our reach by reducing waste by focusing on higher-quality ads. But that higher quality generally comes with a cost. We’re prepared to pay more as long as we know that we have good reach. We’ve seen that in the latest campaign, where we’re working with partners on a cost-per-view basis, that cost has been the least costly for us. It’s very efficient this time around because we have good suppliers and partnerships.

How much responsibility lies with marketers?
It’s down to us to use due diligence to drive as much efficiency through everything that we do. I think the digital space, to some degree, is no different to out of home or TV when it comes to how we try and get reach. All those mediums are a bit of an inexact science, but the idea is try and use our scale, our [buying] power and our collaborations to get the best value for our dollars.

With the duopoly’s transparency issues, why are you confident in the media you’re spending on those platforms?
It comes down to working closely with our partners. Clearly, some [platforms] have been more open than others when it comes to measurement. However, the best way for us to truly get a read on how content is working is the feedback that we get directly from the consumer, whether it’s comments, shares or through the ad hoc research that we’re doing. A/B testing and measuring trends give you great insights, but truly what we want to understand is how our content is affecting the behavior of consumers and whether what we do strikes a chord with consumers. And the only way for us to do that now is through direct conversations with people on whatever channel.

Is it a concern that you may have to pay more for ads in Facebook’s walled garden following its algorithm change?
We’re trying to make sure we get value for our dollar to reach our consumers, so of course it [price hikes after the news-feed change] is a concern for us. We know that Facebook is a great platform to reach consumers, so we’re not worried about the algorithm change. If they weren’t good partners with us when we launch campaigns, then it might be more of a concern. If we see any [change], then of course we’ll respond, but at the end of the day, it’s about being where our consumers are. When it comes to them [Facebook] being a better citizen and creating an environment that’s safe, then that’s something we support.

Diageo paused spend on Snapchat earlier this year over age-verification concerns. Does Absolut run ads on Snapchat?
We’re not doing anything with Snapchat currently. We’re trying to be responsible and make sure that it [Snapchat] follows our code. We’re in a watch-and-study mode with it.

The post Absolut CMO: We’ll pay more for quality ad placements appeared first on Digiday.

The decline of organic reach on Facebook is affecting publishers’ branded-content studios, too.

Over the past six months, the amount of money publishers spent to distribute branded content on Facebook has risen dramatically, according to Keywee, a content marketing tool. In the fourth quarter of 2017, spending on branded-content distribution leapt 159 percent year over year. Spending grew 231 percent year over year in the prior quarter, according to Keywee. The company wouldn’t share raw dollar figures associated with the increases.

To some extent, that uptick was driven by growth in branded content, with more content studios producing more campaigns that require more paid distribution. Worldwide spend on branded content totaled $5 billion in 2017, according to estimates from branded content distributor Polar, up from $3.6 billion in 2016. But higher prices played a role, too. Over the past two months, the cost per click publishers pay for Facebook ads grew 16 percent year over year, per Keywee.

And with organic reach expected to continue dropping and brands holding publishers to higher standards when it comes to their content distribution, the pressure on publishers’ branded-content margins is likely to grow.

“Everybody understands Facebook’s been tightening the algorithm a bit,” said Chris McLoughlin, svp of The Foundry, a branded-content studio at publishing company Meredith. “It’s going to mean margin pressure for those who relied exclusively on organic distribution.”

Facebook’s audience targeting has helped publishers expand their audience reach outside their own properties.

“[Publishers] now recognize that users coming from the paid channel are more engaged,” said Jared Lansky, Keywee’s chief strategy officer. “Instead of selling a $50,000 deal against your organic distribution, you can sell a quarter-million-dollar deal against Facebook distribution.”

But there are trade-offs. The first is declining organic reach, which requires publishers to spend more to get the same level of reach they once expected to get for free. Eytan Elbaz, CEO of Cooking Panda, said that while most of his branded-content distribution is organic, his company has had to pay a “noticeable but not game-changing” increase to get the same reach it once got organically.

The second reason for the increased cost is more scrutiny from brands and agencies. They’re demanding more detail about the people their content reached, even suggesting audience segments of their own for publishers to use, which can increase the price further, even if there are also fewer wasted impressions for the brands, said Melanie Deziel, a branded-content consultant who used to be a branded-content editor at The New York Times and HuffPost.

Executives including McLaughlin say they have yet to see the kind of apocalyptic drop in reach that some were predicting after Facebook announced it would show less publisher content to users in their news feeds. But even if that drop occurs, publishers expect that advertisers will keep using publishers to create branded content and, given Facebook’s targeting capabilities, use the platform to distribute it.

“Given the success that we’ve had with content that we create with our brand partners, we’re not surprised that brands are spending more dollars for Facebook distribution,” said Oren Katzeff, head of programming at Tastemade.

The post Declining Facebook reach squeezes publishers’ branded-content business appeared first on Digiday.

Publishers at the Digiday Publishing Summit Europe in Monaco this week had one issue top of mind: diversifying revenue to avoid being captive to the vicissitudes of the fickle ad market.

Among the core issues discussed by the nearly 240 publisher attendees was the hunt for more direct revenue from audiences. Key growth areas that repeatedly emerged were events, subscriptions and e-commerce. Although alternative revenue models are unlikely to ever make up the majority of a publisher’s revenue, more direct connections provide ongoing value.

At Hearst, 45 percent of the publisher’s revenue comes from consumers, according to Duncan Chater, chief brand officer for Hearst UK. “Experiential is critical in marketing today,” he said onstage, adding that £420 million ($587 million) was spent in the U.K. on experiences last year. “Many millennials would rather spend money on experiences over products.”

Hearst’s 30-person events agency, Hearst Live, programmed 100 events last year for 1.3 million people, driving revenue through both ticket sales and sponsorship. As a result, experiential revenue doubled last year, said Chater. The Esquire Townhouse, a four-day pop-up members’ club in London, launched after Hearst found that Esquire readers were keen to attend more events tailored to their passions. Sponsoring brands like Dior, Lexus and Breitling provided their own services.

While most publishers have some form of an events business that is a core part of their revenue, some digital publishers are turning to pop-up events to monetize video shows they’ve created. One example: Kyra TV, a digital video publisher, is building an audience around three of its original TV shows — “PAQ,” “Greatness” and “Bad Canteen” — distributed specifically on YouTube and its own site. The shows have attracted advertisers, including Converse, Ray-Ban and Nike, and Kyra TV now wants to push into e-commerce and merchandise. The publisher tested the waters by running a pop-up event in London to promote “PAQ.” More than 1,000 people from a range of countries, including Malaysia, Denmark, France and Germany, came to buy merchandise from the show.

“We’re building brands with our shows, hyperloyal, obsessive fan bases behind each show,” said Kyra TV co-founder Devran Karaca, at Digiday’s summit. “So we’re well-placed to actually start our own products.”

The turnout for the “PAQ” pop-up event spurred the Kyra TV founders to make e-commerce and merchandise a more core part of their commercial strategy. “We expect e-commerce to make up a significant portion of our revenue in the future,” added Karaca.

E-commerce in the age of Amazon
To bolster revenue, many publishers have turned to e-commerce or affiliate models where the publisher sends readers to merchants’ sites to complete purchases. While affiliate partnerships are relatively low-risk for the publisher, the payout amounts are small, so publishers need scale, plus authority in their market, to make them successful. The growing threat of Amazon and an overreliance on partnerships with the e-commerce giant concerned some publishers at the summit. Attendees also recognized the difficulty in competing with Amazon on user experience and convenience in order to keep growing buyers.

Aside from selling products, Time Out’s e-commerce revenue grew 56 percent in 2017, according to Severine Philardeau, managing director of e-commerce for Time Out Digital. The year before, Time Out’s e-commerce revenue reached £4.7 million ($6.6 million). More recently, Time Out started selling gift boxes of coupons for 10 of the top restaurants in London for £49.99, ($69.82), according to Philardeau, with the 1,000 boxes released last November selling out in six hours.

Subscriptions beyond a paywall
A paywall is not the only way to drive money from readers, as the Guardian has shown with its 500,000-plus paying members. For some publishers, a paywall is too much of a blunt tool, so they’re opting for a blend of subscription models. “Scarcity is more valuable than scale,” said one publishing executive. While digital subscriptions drive high yields, there’s a threshold to how many subscriptions a reader will pay for.

Outside of subscriptions, there was renewed interest in introducing micropayments for individual articles. But there’s a healthy amount of skepticism about how well they can work. In 2015, Winnipeg Free Press was the only publisher out of a dozen that found success with micropayments, yet changing online behavior, more accessible payments and cryptocurrencies could encourage uptake.

The post How European publishers are diversifying from overreliance on ad revenue appeared first on Digiday.

I want my Snap TV?

Snapchat plans to double the amount of Snapchat video shows it releases this year to roughly 80 shows, including what could be its first serialized, scripted shows. In doing so, the company has also widened its sources for shows to include digital and legacy publishers, in addition to existing TV network partners.

Group Nine Media and Condé Nast each have at least one show that Snapchat recently ordered, according to sources. Last week, Uproxx announced a new Snapchat show it’s co-producing with entertainment studio STXdigital called “Brawler,” which will premiere on March 16. Other shows have come out in the past year from publishers, including Barstool Sports (a college-culture show called “Fifth Year”), Billboard (a music series called “Artist Pass”) and Vice Media (dating show “Hungry Hearts with Action Bronson”).

A Snapchat source, speaking on background, stressed that in the case of publishers such as Group Nine Media and Condé Nast, both of which have multiple Snapchat Discover channels, they’re not abandoning their magazine-style Discover editions for video shows. Instead, the shows are part of an effort by Snap to offer more professionally produced content on Discover. This comes after a Snapchat redesign that separated user posts from media and celebrity content within the app.

“We’re excited to make shows for Snapchat,” said Ben Lerer, CEO of Group Nine Media. “We continue to see great growth with audience and engagement on our Snapchat Discover channels for NowThis and TheDodo, and we saw great results producing the ‘Shark Week’ show [for Snapchat and Discovery] last year. This is another way for us to lean in and create more programming for the platform.”

Since launching its shows initiative in 2016, Snapchat has gotten most of them from TV networks and other major media companies, while steering digital publishers toward making magazine-style story editions for Discover. That’s not to say Snap has avoided working with publishers on shows, but a majority of the 40 Snapchat shows that have aired so far have come from companies such as NBCUniversal, A+E Networks and ESPN. More than a few have come from sports leagues, too. That net will widen this year.

“We’re in discussions with them on a number of projects that are at various stages in the [development] process,” said Benjamin Blank, CEO of Uproxx. “It really is a matter of whether something we want to do from a creative standpoint matches up with what they’re looking for.”

Snap’s work with publishers on shows comes as the company is looking to curry favor with publishers reeling from the aftermath of Facebook’s news-feed changes.

One area of concern for publishers and other digital media producers is that Snapchat, unlike Facebook Watch, isn’t subsidizing the production of shows. Producers are asked to fund the show, after which Snap will evenly split ad revenue made from the program.

That arrangement has been fine for some TV networks, which can treat the platform as a marketing vehicle to find younger viewers for their existing media properties. And for some networks, it’s been working. E!’s twice-weekly show “The Rundown” reached 30 million unique viewers in January; NBC News’s twice-daily news show “Stay Tuned” reached 28 million viewers; and ESPN’s “SportsCenter” reached 17.5 million viewers in January.

Other TV networks, such as CNN, which pulled the plug on its daily news show “The Update” in December, weren’t getting enough revenue from Snapchat shows to justify making more episodes. (Snap CEO Evan Spiegel, without naming CNN, threw shade in its direction during Snap’s recent earnings call: “TK.”)

The ability to make money off of Snapchat shows is an even bigger deal for publishers, many of which don’t have the resources of an NBCUniversal or ESPN to invest in social video shows without some type of guaranteed revenue coming back.

“The fact that they don’t pay for [shows], you end up having to figure out if and when to prioritize working with them,” said one Discover publishing partner that’s pitching shows to Snap.

But the allure of doing a show for Snapchat, which continues to reach a younger demographic than most other social platforms, remains strong. That pull is why publishers such as Group Nine Media and Hearst Magazines Digital Media have recently launched new divisions dedicated to creating video shows for distributed platforms.

The opportunity to get new viewers is a big reason Barstool is doing more episodes of “Fifth Year,” said Erika Nardini, CEO of Barstool Sports. On most platforms, Barstool’s audience is 70-80 percent men; on Snapchat, “Fifth Year” viewers were evenly split between men and women, she said.

“Snapchat brought us new eyeballs and an incredible audience,” Nardini said. “We were on 24 college campuses last fall, and at every single one, we had college kids taking photos of our personalities and posting it to Snapchat. It made it clear that we were on a platform that college kids, a big part of our audience, were already using.”

It also helps that the first season of “Fifth Year,” which consisted of 13 episodes and averaged 3 million viewers per episode, according to Snap, was profitable for Barstool. Snap brought in a series sponsorship with Wendy’s, a new advertiser for the publisher.

Similarly, Uproxx’s “Brawler” has landed an advertising sponsor, with the potential of a few additional sponsors also signing on, Blank said. He wouldn’t name the advertiser, saying Snap is taking the lead on ad sales for the show.

While the downside for producers is that Snap isn’t paying for shows, producers retain ownership over the programs, which could help improve the economics of these deals. For instance, as part of Uproxx’s agreement with its production partner STXdigital, the companies will look to expand “Brawler” beyond Snap, whether that’s licensing the program to other platforms at a later date or using the show format to develop a different version for a different buyer down the road.

“We’re not a production company that has a couple of phones and farms out the production to other companies,” said Blank. “We do the physical production in-house, which ensures future opportunities for us for our properties. It’s the second and third windows where these things get interesting.”

The post Snapchat is enlisting more publishers to make video shows appeared first on Digiday.

The use of artificial intelligence is becoming more common in smartphones, connected home devices, wearables and connected cars. By 2020, there will be 20.4 billion connected devices in use, according to market research firm Gartner. Location data is getting easier and easier to acquire.

Here are five charts that illustrate how companies are using location data.

The more uses, the merrier
Thanks to the rise of emotion AI systems, Gartner predicts that by 2022, personal devices will know more about an individual’s emotional state than their family does, giving marketers critical data they can use to serve up their messages wherever people are, while they are in the right mood.

Location data company Carto partnered with market research firm Hanover Research on a February 2018 study called “The State of Location Intelligence 2018,” surveying more than 200 C-level executives about the ways their companies use location data. Using location data to identify new consumer markets, improve marketing strategies and improve customer service were the top use cases.

Go granular
If you really want to know your audience, you have to look at your audience’s wider location behavior, according to location services company Blis.

For a week in January, Blis geofenced retail chains Lord & Taylor, Saks Fifth Avenue, Macy’s and Bloomingdale’s to track post-holiday foot traffic. These outlets wanted to break down their visitors into students and parents to determine which group they should tailor their messages to in the post-holiday season. Blis collected device IDs from the locations and then determined if those store visitors were parents or students by tracking them to high schools and middle schools. If the IDs were seen at schools in the mornings or nights, Blis determined that they were parents dropping off or picking up their children.

During this time, Lord & Taylor discovered that it brought in the most parent visitors out of the other stores, but trailed in student visitors. Macy’s saw that it brought in the most students but was behind Lord & Taylor and Saks Fifth Avenue in parent visitors.

Data everywhere
The same Carto study examined how companies collect location data. It turns out that companies still use websites more than mobile devices to get location data.

Future investments
Carto’s study also looked at how soon companies plan to invest in location data in the future. Nearly every executive said they would invest more in location data in the next year or next three years.

Connected vehicles’ potential
A promising avenue for location data is connected vehicles. Smart cars can track a driver’s location, and with AI, they can quickly position a brand’s message at a precise time and place. If a driver is approaching their neighborhood diner, for instance, that business could have an ad appear on the driver’s dashboard one stoplight ahead of the diner. People are also open to sharing their connected car data in exchange for better car services and experiences, with 55 percent of more than 3,000 people surveyed in a 2016 McKinsey & Co. study saying they would be comfortable with sharing their data. The study also found that overall revenue from monetizing car data could climb to at least $450 billion by 2030.

The post How companies are using location data, in 5 charts appeared first on Digiday.

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