Month: March 2018

South by Southwest Interactive is known for being the place brands go when they have a great piece of experiential marketing to show off–whether that’s Hulu’s Handmaids Tale being creepy and sending hoards of women dressed in red cloaks around the city of Austin, or HBO building an immersive activation at this year’s festival to…

Marc Fernandez wants to “build strong IP” and eventually connect with distribution partners. The ‘Collider’ will remain within the ‘Complex’ advertising and multichannel network.

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Publishers are rethinking their Facebook strategies in the wake of LittleThings’ sudden shutdown on Tuesday. While LittleThings is the first pub to fall victim to Facebook’s news feed algorithm change, it is likely not the last. Many pubs play Whac-A-Mole with the news feed, optimizing article and video content to fit the whims of a fickle Facebook algorithm.… Continue reading »

The post Publishers Adapt To The New Realities Of The Facebook News Feed appeared first on AdExchanger.

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“AdExchanger Politics” is a recurring feature that tracks developments in politics and digital advertising.  Today’s column is written by Jordan Lieberman, politics and public affairs lead at Audience Partners. Happy election season, everyone. I’ve got good news and bad news. The bad news is that many of those who enter the political advertising space right… Continue reading »

The post Political Targeting In A Post-Cookie World appeared first on AdExchanger.

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“The Sell Sider” is a column written for the sell side of the digital media community.  Today’s column is written by Chris Kane, founder at Jounce Media. Marketers who measure website traffic, online sales, app installs or even offline sales all take a fundamentally similar approach to attribution. For each conversion event, they capture a… Continue reading »

The post Attribution Blind Spots Are Eating Your Performance appeared first on AdExchanger.

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A weekly comic strip from AdExchanger that highlights the digital advertising ecosystem… AdExchanger: Origins AdExchanger: Crisis In Ad City (Part I) AdExchanger: Crisis In Ad City (Part II) AdExchanger: Enter Malware (Part I) AdExchanger: Enter Malware (Part II) AdExchanger: Enter Malware (Part III) AdExchanger: Enter Malware (The Conclusion) AdExchanger: Angels And Startups AdExchanger: Rumble In Arbitrage Plaza… Continue reading »

The post Comic: Warming Up appeared first on AdExchanger.

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. “Less Doing More” In a speech at the ANA Media Conference, Chief Brand Officer Marc Pritchard shared new details on Procter & Gamble’s ongoing marketing revamp, which involved significant spending cuts with “several big players” by 20% to 50%. “We took more control, and… Continue reading »

The post Pritchard’s Latest Progress At P&G; Bank of America Names Brand Safety Officer appeared first on AdExchanger.

In 2017, WPP, the bellwether of the ad industry, had its worst year for revenue growth since 2009, as the agency network wrestled with issues that have impacted every major network to some degree.

Upheaval in the way advertisers spend their money rocked the world’s biggest holding group by sales in 2017. CEO Sir Martin Sorrell said it was “not a pretty year,” but the future for his business looks even bleaker. The fortunes of the big agencies are viewed as the doyen for the global economy, yet the biggest ad network is seemingly collapsing as the market holds up. WPP is facing an existential crisis on all fronts.

It’s not just WPP. Omnicom, Publicis, IPG and Dentsu have all struggled due to several factors. The big agency groups’ struggles aren’t just a symptom of the transparency crisis that has engulfed the industry. There’s a move away from delineated channel solutions to more holistic customer experiences and an increasing focus on measurable results and profit margins. Together, these factors are reducing the marketing spend and the margin that agencies can retain.

Here are five structural challenges that WPP’s earnings show agency bosses must now face.

Agencies need to reinvent themselves
Agencies are durable businesses, and flexible ones. But as they have flexed with marketing trends, their costs have ballooned. Sorrell singled out the the “long-term impact of technological disruption” on WPP’s performance. What the comment suggests is WPP and its peers will continue to seek out fast-growth, cutting-edge technology services for the marketing industry to remain competitive. The growing risks of disintermediation, coupled with the threat from consultancies and from more agile, digital-focused mid-tier players suggest there is likely to be no change in appetite for M&A.

Arguably WPP is acting faster than some of the other holding companies to reduce its cost base by merging agencies and reducing management and back-office overhead. Evolving the service offer of its agencies to give clients the more integrated, “contemporary solutions they want will be harder however,” said Tristan Rice, partner at M&A advisory SI Partners. This transition is like trying to turn multiple supertankers, Rice continued, but it also brings all its “supertankers into closer competition with each other.”

Clients are taking control
Like the changing of the seasons, agency bosses are (again) downplaying the threat of advertisers in-housing media management and content production. Beneath all the surveys and headlines on marketers doing more for themselves lies something more amenable for agencies — if they can get the business model right. Yes, marketers are doing more for themselves, but in many cases, agencies are helping them do it as they try and shift their business models toward the more consultative end of the marketing mix. Speaking to analysts about WPP’s results, Sorrell rattled through the media, data, content, production and programmatic capabilities his agencies have helped advertisers set up over the last year. Conversely, recent WPP data indicates that programmatic and content studios may be going in-house as much as “out-house, revealed Sorrell. “The trend is not clearly defined,” opined the ad veteran. “It’s certainly not clearly defined as in-house.”

Transparent ad buying is being demanded
The prevailing thought among many senior marketers now is “where there’s a mystery, there’s a margin.” After 18 months of suspicion and scrutiny of those businesses paid to manage their ads, advertisers are demanding those players come clean about what’s been going. As Ian Armstrong, the global head of advertising at Jaguar Land Rover, explained: “Subsequent analysis will show whether we’re paying too much for something, and it may be that we’re just not getting the return that we expected, which might be a function of paying too much in the first place for ads or it might be a symptomatic of how the technology works.”

As marketers like Armstrong uncover more of the undisclosed rebates and other hidden fees being made from their money, they are trying to either claw back some of that money or limit their agency’s ability to do strike similar arrangements in future, stunting long-term growth if the business can’t come up with an workaround. An example of this shift in action is at Omnicom’s trading desk Accuen; in its fourth quarter, the revenue from the trading desk slumped by $12 million (£8.7 million) worldwide as advertisers shifted to disclosed programmatic buying models.

The consulting firms aren’t coming, they’re here
Sorrell tried to quell analyst concerns that WPP’s dire 2017 was at least in part down to the likes of Accenture and Deloitte. Of the 80 accounts WPP went head-to-head with consulting firms for last year, it “had a win/loss ratio of about 50 to 30,” claimed Sorrell. Those wins, weren’t “significant in the realm of things,” said Sorrell. But Accenture, Deloitte and IBM aren’t interested in competing for advertising and media accounts as they are now. They see upside at the consultancy and technology ends of the advertising spectrum. It’s why Unilever is working with the digital specialists at IBM iX to test blockchain’s ability to weed out fraud from the advertiser’s sprawling supply chain. And it’s why consulting firms drove M&A spent a collective $1.2 billion in agency acquisitions, according to marketing consultancy R3, while the big networks struck fewer deals.

The duopoly effect is real
WPP brushes off the idea that the duopoly is a threat. After all, WPP spends a lot with Google and Facebook. Of the $75 billion (£54 billion), WPP pumped into media in 2017, $7 billion (£5.1 billion) went to the duopoly. While both Google and Facebook have always insisted that they have no designs on nudging agencies from the view of advertisers, many big brands like Heineken, Adidas and L’Oréal already work directly with those companies. In turn, some advertisers like JLR are starting to factor that burgeoning relationship with Google and Facebook into their new agency models, as the advertiser recently alluded to.

The post All that ails WPP and the wider agency business appeared first on Digiday.

With Facebook choking off media content in the news feed, the next great hope for publishers trying to make money on the platform is Facebook Watch. But even here, the deal terms are getting increasingly limited, with Facebook paying more but demanding more onerous terms for high-quality video shows. In this edition of Confessions, in which we grant anonymity for honesty, we spoke with a publisher that’s produced shows for Watch about how the relationship with Facebook is changing when it comes to this type of video programming. The conversation has been edited and condensed.

Facebook Watch deal terms have been changing since the first wave of funding. You’ve produced several shows. How has that impacted you?
The good thing is, they’re upping their budgets. But they haven’t renewed many shows. We’re happy because we’re getting grandfathered in with the terms that we had during Facebook’s first season of funding. If you did a show during season one and it got renewed, Facebook isn’t demanding ownership over the show. But if you’re doing a new show for them, they are demanding ownership. They are being fairly rigid about that.

Doesn’t that limit how much money you can make?
The only approach to Facebook right now is to take your producer fee — your 10 percent production fee — and see if you can up your margin a bit by cutting the cost of production. That’s about it right now, unless you’re important enough to get a sweeter deal from Facebook.

Even though they’re claiming all their deal terms are standard, nothing is standard. Every publisher, every star, every production company has a different amount of leverage depending on who they are. But I do know they are hiring more [business development] people. They hired one guy from ABC News to help them with deal terms for Watch because everything is getting so convoluted and complex for them, and they want to know how to approach talking to a big-name star or media company.

Since you have ownership, how are you looking to monetize your shows beyond Facebook’s exclusive window?
For the first season of our shows, Facebook only had like a week of exclusivity. Now, they want longer windows and are shifting between 60 days and an indefinite exclusivity, depending on the price they’re paying per episode. What we’re going to try and do is take the show after Facebook’s exclusive window is over and try and sell a new season to a brand.

Facebook has bought a ton of sports programming, and others have said its approach is talent-driven. Have you found that to be the case?
Yes and no. You pitch something that’s talent-driven because personalities tend to be sticky, which implies a loyal audience. That’s what they care about. I can pitch an animated show to them with no stars attached, but if I was able to get 25 percent repeat viewership, it would be their favorite show on the platform.

Another publisher that’s produced multiple Watch shows recently told me that because it’s so unclear how long Facebook will fund content, it went all-in and got “as many shows done as quickly as possible” while the money was still there. Was it the same for you?
Definitely. That’s what people did with Go90. Do you think any publisher was bullish on Go90? Every single publisher who had a show on Go90 would laugh when they said they had a show on Go90. The only reason they did it is because Verizon was writing absurd checks — they wrote a $2.5 million check to Elite Daily. Elite Daily! At least Facebook has the capacity to drive massive eyeballs, which Go90 didn’t.

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The post ‘Nothing is standard’: Confessions of a Facebook Watch partner appeared first on Digiday.