Month: March 2018

AdExchanger |

“Brand Aware” explores the data-driven digital ad ecosystem from the marketer’s point of view. Today’s column is written by Belinda J. Smith, global director of media activation at Electronic Arts.  Spurred by the groundbreaking ANA K2 report, marketers spent the latter half of 2016 and much of 2017 talking about transparency. We went from pushing… Continue reading »

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Growing concerns about cybersecurity have made assessing cyber risk vital to deal strategy.

Uber Technologies Inc. is gearing up for battle in Asian markets against Didi, Ola and Grab—all ride-hailing services with investments from Japan’s SoftBank Group Corp.

AdExchanger |

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Omnipresent The dispersal of location data across the digital ad ecosystem exposes the industry to legal liability and backlash should it ever face a breach, Christopher Mims writes for The Wall Street Journal. Most consumers aren’t aware that even if they opt out of… Continue reading »

The post The Location Data Powder Keg; The Tricky Business Of Ecommerce Subscriptions appeared first on AdExchanger.

Streetwear publisher Highsnobiety is setting a goal of making commerce revenue 30 percent of its total revenue over the next five years, according to the publisher.

The publisher is working with brands and designers on creating product collaborations to tie in with the release of its third longer-form documentary, which explores how the marijuana industry is evolving into a premium lifestyle market, due out in April. Also next month, Highsnobiety is launching a Japanese-language site and social channels, working with nine brands on T-shirt collaborations to mark the occasion.

In January, the publisher received $8.5 million (€6.9 million) in funding led by Felix Capital, which it plans to use to further develop its video and branded-content businesses and help realize its commerce ambitions. According to the publisher, it plans to have the e-commerce strategy in place, plus a core team of five new hires, by year-end, growing this to up to 20 people by the end of 2019. Founder David Fischer estimates it will run a version of these commerce projects each month this year, before expanding them to up to three times a month.

“We want to make our content better with commerce, not just speaking about things but actually doing them, too, so that we’re fully integrating products into the content,” he said. “The big question is, how can we scale that? We can’t do a documentary and product launch every week.”

The move holds promise, said Guy Levine, CEO of digital agency Return. And by showcasing a number of products from a variety of brands, Highsnobiety can maintain the draw of exclusive, limited collections while having enough scale to make revenue meaningful.

“It’s a model that has infinite possibilities to scale,” Levine said. “There are many possible spinoffs. Highsnobiety could become its own label.”

According to Fischer, part of the funding will go toward developing its in-house tech to help drive conversions, adding features so audiences know what sizes are available, item prices and shipping costs, plus automated capabilities like displaying related products.

“This is the first time we’re in a position to craft a content-led strategy for commerce the way we want to do it,” Fischer said. “The right strategy will make us produce a better content product.”

Levine said the challenge will be creative arguments. “Who owns the customer, Highsnobiety or the brand?” he said. “Is it a data company that’s aligned with a fashion house, or is the fashion house more aligned with the product?”

The 13-year-old publisher has dabbled in commerce, but more for marketing purposes rather than driving revenue goals. For its 10th anniversary, it worked with 10 different brands on capsule collections such as a range of T-shirts with A Bathing Ape, sunglasses with Mykita and sneakers with Puma, which were sold on Highsnobiety’s website and through global retailers. For its collaboration with Adidas, it distributed co-designed shoes to 60 retailers, reserving 400 pairs to sell on Highsnobiety’s site. Within two hours of going on sale, 16,000 people were trying to check out on the site.

Other publishers set up e-commerce to add incremental revenue to offset falling ad revenue. In some cases, this leads publishers to change what they write about, sometimes awkwardly.

Halfway through 2017, Highsnobiety narrowed its focus to scaling affiliate partnerships, headed up by Martin Kara, former Adidas head of affiliate marketing. Highsnobiety’s revenue from affiliate deals with some 50 merchants will reach seven figures this year, Fischer said, making up less than 5 percent of its total revenue. Fischer believes the limit for its affiliate revenue is roughly 10 percent of total revenue. “We’ll never be a commerce platform offering thousands of products,” he said.

The affiliate business is helping inform Highsnobiety’s broader commerce strategy. For instance, accessories drive higher conversions than apparel because sizing is less of a barrier. The most common average basket size is around $185 (€150), and the second most-common basket size is between $493 (€400) and $616 (€500), a sign its audience is willing to pay for the right product.

Fischer acknowledges there are still elements to figure out, like how much of the fulfillment, shipping and customer service the publisher takes on.

“The way we want to do commerce doesn’t exist right now,” he said. “The world does not need another retailer. The way for us to make a difference is bring something that’s highly curated.”

The post Streetwear publisher Highsnobiety plans to make e-commerce 30 percent of its revenue appeared first on Digiday.

Snapchat began rolling out its redesigned app in February, only to face a barrage of backlash. People voiced their discontent on other social platforms, complaining that Snapchat’s new layout makes it harder to find friends and messages, and 1.2 million people have signed a petition to get rid of the redesign. Even Maybelline asked followers via Twitter whether it should delete its Snapchat account.

But the criticism peaked on Feb. 21, when Kylie Jenner, easily one of Snapchat’s most influential users, tweeted: “Sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.” Snapchat’s market value plummeted by $1.3 billion in the following days.

After this reaction, any brand might immediately reverse course, but Snapchat is not budging. It’s following in the grand tradition of social platforms, which seem to be able to survive, and even thrive, outside of the roller coaster of consumer opinion that traditional brands must abide by.

An attitude of arrogance
It’s not that Snapchat and other platforms are immune from what negative consumer sentiment could do to their reputations. Like any other business, social platforms must balance listening to what their users want and reaching business objectives.

However, they have what Mary Zalla, global president of consumer brands at branding firm Landor, calls an “arrogance” about them. “Platforms are impervious to user input,” said Zalla. “They have enough faith in their platform that they think people will get over that initial wave of backlash.”

One reason for this arrogance, said Zalla, is they are still building their brands, in many respects, and have had success so far. Facebook itself is only 14 years old and doesn’t play from a traditional rulebook. “They haven’t built their whole mountain yet. It’s still being constructed,” said Zalla. “So they are saying that, yeah, some people might not be happy about this and they will fall off, but at the end of the day, this change is going to help grow my platform, so I’m willing to make the trade.”

Another thing they understand, said Brad Wellen, group director of social at Huge, is that it’s human nature to respond negatively to change, and objections usually stop over time as people acclimate to changes.

Pete Imwalle, evp and chief operating officer of RPA, said platforms like Facebook and Snapchat have looked past people’s initial reactions to how these changes can benefit their futures. “They are good at knowing what people will use, not what people want,” he said.

Indeed, social platforms have made a long list of changes, against which people have revolted, but their objections have disintegrated eventually.

When Facebook introduced its news feed in 2006, the platform received so many complaints that CEO Mark Zuckerberg, who had ingrained in the company the motto of “move fast and break things,” had to respond to the outcry, writing a post titled, “Calm down. Breathe. We hear you.” But today, it would be difficult for users, not to mention advertisers and publishers, to imagine Facebook without its news feed. People also forgave Instagram for changing its logo, Twitter for expanding its 140-character limit to 280 characters and all platforms for the addition of interest-based algorithms.

“All of these changes ultimately improved user experiences, making content more navigable, discoverable and more tailored to preferences based on our previous behavior,” said Abi Morrish, head of digital engagement at Wavemaker.

Even as Snapchat users are still venting their frustrations about its redesign, downloads of Snapchat are up. In the week after the redesign, Snapchat saw its downloads increase by 55 percent, 322,000 more installs compared to the week before the redesign, according to data from app analytics firm Sensor Tower. The app also rose to No. 1 in app stores in the days following Jenner’s tweet, per App Annie. It seems the uproar has led more people to see what the fuss was about, giving clout to the old adage “No publicity is bad publicity.”

Of course, these platforms also have a degree of security when they want to make changes because people are so invested in them, Zalla said.

“Snapchat users constantly share their lives, their stories, their information each day — sometimes several times a day,” said Tony Telloni, founder of reputation consultancy Leo Partners. “While Instagram could be an option for them, it’s much harder to ‘turn off’ their behavior on Snapchat and switch everything to a new platform.”

 

 

 

The post Why Snapchat won’t listen to user complaints about its redesign appeared first on Digiday.

Three years ago, Facebook rolled out its Anthology program, an attempt to pair brands and publishers to produce branded content to distribute on its social network. But brands have increasingly bypassed Facebook to do their own matchmaking, as the value of Facebook’s program has faded and its relationship with publishers has gone south.

“I’m trying to remember the last time I talked to [Facebook] about it, and I don’t,” said Jeanne Bright, vp and group director of paid social at DigitasLBi.

Facebook’s Anthology program has lost its luster for two main reasons, buyers said: Price and relevancy.

First, the price. Facebook cut the price tag from an initial $2 million minimum spend requirement to roughly $1 million, and agency executives this week confirmed that was still the case. But a two-comma commitment can still take advertisers aback. The reduced financial commitment is “slightly more palatable,” but is “still a sizable commitment,” said one agency executive.

“The promise is to get great content with the media to promote it baked in and learn what works on the platform. But it can be an expensive way to do it,” said Noah Mallin, head of experience, content and sponsorships at Wavemaker.

Second, the program is less necessary. When Facebook introduced Anthology in April 2015, brands were still wrapping their heads around how and why to work with publishers to produce branded content for distribution on Facebook and elsewhere. That Facebook would bring its internal data to bear to help brands identify the publishers to work with and hone their content ideas and distribution strategies “definitely piqued clients’ interest,” said Bright.

But brands and their agencies have become better at developing branded content campaigns with publishers.

“It’s hard for a large holding company that has experts in Facebook data and has connections already into understanding that to know, ‘What extra value would I really get from Facebook? Would they know it any better than we already know it?’” said Erin Vogel, svp of creative and brand content strategist at Spark Foundry.

Facebook has also made it easier for advertisers to sidestep Anthology. At the time of the program’s inception, Facebook hadn’t officially blessed having branded content organically distributed on its social network. But a year later, Facebook dropped its branded content restrictions for publishers and added a tool for them to tag their branded posts so that brands could independently track a post’s performance and pay to promote it as an ad.

“We have relationships with almost all of the Anthology partners and buying expertise on the platform. It’s not something we necessarily need Facebook to facilitate for us,” said Mallin.

Asked about Anthology’s growth, Facebook would only say that it’s worked on more than 100 Anthology campaigns since 2015. Facebook has tweaked Anthology to make it more appealing to advertisers. Instead of being limited to the handful of publishers that were participants at launch, it has opened up Anthology’s roster to include larger and more diverse media companies, such as Turner, 21st Century Fox, Globo and Copa90, according to a Facebook spokesperson. And existing partners have made more of their properties available for Anthology deals. For example, Disney developed last year an Anthology campaign with IBM that incorporated “Star Wars” and one with HP that included “Club Mickey Mouse.”

“Last year, we tested a new approach for Anthology and have now evolved the program to more proactively build content and experiences for brands, around publisher [intellectual property], designed for Facebook’s platforms,” emailed Keenan Pridmore, head of Facebook Creative Shop Studio, home to the Anthology program.

Facebook’s increasingly rocky relationship with publishers has also cast a shadow over the Anthology program. The company’s recent move to deprioritize publishers’ organic content — which has already put people out of jobs and one publisher out of business — has caused ad buyers to wonder whether that friction would carry over into the content publishers are hired through Facebook to make for brands.

“Anthology is becoming a less attractive lever, and the publishers are also less enchanted with Facebook, so even as more publishers have access [to Anthology], I think there is a little bit of, ‘Are you going to get the best out of those publishers through a program like this versus going to them directly?’” said another agency executive.

There’s no evidence that a publisher would hold back on an Anthology campaign because of the more abrasive dynamic between Facebook and publishers, the agency exec said. “But I do think perceptually it starts to call into question: Why go to Facebook to reach these publishers when that relationship in and of itself could be a source of friction?”

The post Facebook’s branded content program loses its luster appeared first on Digiday.

Hearst Newspapers has replaced its one-size-fits-all paywall with a customizable one. The newspaper group, with 24 daily and 64 weekly papers, including the Houston Chronicle and the San Francisco Chronicle, has been tinkering with a paywall whose permeability changes depending on who’s visiting and what they’re reading.

The new paywall replaces a system where editors chose which content was paywalled and which wasn’t. Under the new system, first-time readers can consume as much content as they want, and the amount they consume dictates when they hit the paywall and if or when they are shown a subscription offer.

“The whole approach is: ‘I want to win your trust,’” said Esfand Pourmand, svp of revenue at Hearst Newspapers Digital.

The subscription offers that engaged readers receive will be framed differently (though the cost will be identical). For example, sports fans might get an offer oriented around staying up to date on a team they follow, while the out-of-towner would get one telling them that a subscription will keep them connected to the goings-on of the market. The audience segments, which the papers also use for lead-generation campaigns designed to grow newsletter subscribers, are revised on a monthly basis, based on how much content a paper’s readers have consumed.

At the Albany Times-Union, the first paper to test the flexible paywall, the total number of subscribers has doubled since it started tests in September, and the overall number of new subscriber numbers for Hearst Newspapers has jumped 10 percent. The company declined to provide raw subscriber numbers.

“We’ve found that each market has different DNA,” said Rob Barrett, president of digital media at Hearst Newspapers. “We’re trying to find the optimal place for the paywall based on the interests of the consumer.”

The aim of the flexible paywall is to grow reader loyalty, a key metric for publishers that are looking to move past their obsession with scale and lead readers to become paying customers.

To get a clearer picture of what its readers were spending the most time with, Hearst reindexed every article on its sites using Google’s natural language processing tool. It then layered on reader information such as geographic location, device type and other audience data from third parties. Barrett stressed that none of the data it has on its reader base, which he says totals 90 million unique visitors across Hearst Newspapers, is personally identifiable.

At the Times-Union, knowing which stories were being read most and by whom let the paper identify the most engaged segments of readers. Many of the segments they identified confirmed assumptions that Barrett and the Times-Union’s consumer marketing staff had: Sports page visitors were among the most loyal, as were people who read lots of stories about local business.

Some surprises emerged. Barrett said that before the test began in October, he’d assumed the paper’s coverage of local crime stories would not attract a loyal audience. That turned out to be incorrect.

Learnings from Albany were applied to San Antonio and Houston next. Today, the consumer marketing heads at every Hearst newspaper participate in a weekly conference call to compare notes and share best practices.

While a tactic that works in one market might not work in another, the data framework that each system has set up gives each title the flexibility to try them all. “The idea is to put ourselves in position to be surprised,” Barrett said.

The post How Hearst Newspapers changes its paywall to drive reader loyalty appeared first on Digiday.

With advertisers clamoring for uncontroversial environments, Facebook is pitching a brand-safe program to advertisers, but the black-box nature of the proposal has some ad buyers balking.

Facebook is offering the chance to buy ads against what it considers its most brand-safe videos, according to four agency executives that have been briefed on the pitch. The company is asking advertisers to commit to spend $750,000 over three months, at $250,000 a month, to participate in the program, said two execs. That amount of money is considered to be a bargain for brand-safe video inventory on a major platform like Facebook, but there are aspects of the experiment that undercut its value to ad buyers.

Ad buyers that have been pitched on the deal said Facebook is giving them limited control over where their ads would appear and that they’re leery of trusting Facebook to determine what videos are brand-safe or not.

Facebook’s program seems to parallel Google’s Google Preferred program that packages YouTube’s top channels into a separate bundle, though how brand-friendly that bundle is remains an open question. For now, Facebook’s program is being described as a test, but it comes in anticipation of Facebook letting advertisers only buy ads to run before or during videos in its YouTube-rivaling Watch hub. The test includes but is not limited to inventory in Facebook’s dedicated video section but also spans videos running elsewhere on Facebook. The company is characterizing this inventory to advertisers as its “best, brand-safe inventory,” as one agency exec put it.

A Facebook spokesperson declined to comment.

Unlike the regular ads Facebook attaches to videos as mid-rolls or, more recently, pre-rolls, advertisers in the test can’t target their ads based on categories such as viewers’ interests, locations or gender. Instead the ads will only be broadly targeted to viewers 18 years old and older, according to the agency execs. Facebook will only bill advertisers participating in the test for ad impressions delivered to viewers in that demographic group as measured by Nielsen, according to one of the agency execs and another person familiar with the matter.

Further frustrating ad buyers, Facebook will not allow advertisers to specify which publishers’ videos they do or not want their ads to appear against, the execs said. That lack of control had led to advertiser pushback against Watch as well as Facebook’s broader pre-roll and mid-roll inventory and its ad network business.

“For our clients, I pretty much told my team we’re not doing any in-stream video because of brand-safety [concerns],” said one agency executive.

Facebook has begun to try to address those concerns, if slowly.

Last year, the company said that by the end of 2017 it would provide all advertisers with lists of which publishers’ videos might carry their ads before the spots were bought, but those pre-campaign placement reports have only been made available to brands buying ads directly from Facebook.  Facebook also said last year that it would give advertisers lists of which publishers’ videos did in fact carry their ads, but those reports have also been delayed and are expected to be made available to all advertisers buying its ads directly by the middle of 2018.

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