Month: April 2018

Jan Koum, a co-founder of Facebook’s WhatsApp unit, is leaving the messaging service after what people familiar with the matter described as disagreement over putting advertising on its app and frustration over the confines of working in a big company.

“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 Bruno Gralpois, co-founder and principal at Agency Mania Solutions. As the saying goes, the grass is always greener on the other side of the fence. When advertisers consider a review… Continue reading »

The post The Demise Of Decades-Long Agency-And-Client Relationships appeared first on AdExchanger.

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. TV Dinner A raft of new YouTube ad products highlights the importance of OTT and skinny pay-TV services in its strategy. For the first time, advertisers will be able to target YouTube television screen inventory, just as they can choose to exclusively buy tablet,… Continue reading »

The post YouTube Turns On TV Device Targeting: Google GDPR Plan Angers Publishers appeared first on AdExchanger.

Digital agencies, once fast-growing upstarts stealing business from lumbering incumbents, are at greater risk of slipping in relevance themselves in a fast-changing market — and are now scrambling now to add other services, like strategy, consulting and even media in order to keep growing.

A couple of forces are hurting the digital agency business more than other types of shops, say executives in the industry. One is the threat of marketers taking many capabilities in-house that make up digital agencies’ bread and butter. Perhaps more worrying is the encroaching threat from management consultancies, which are pinning most of their agency offerings on specific digital services.

One former digital agency employee said digital shops too often built their brands and made money in the early years on mostly tactical solutions — think websites or even banner ads — that were part of a bigger pitch that these agencies could help drive supposed digital transformation inside companies.

Margins are being cut for many agencies. But digital work has always commanded a lower margin than, say, television creative. And the maturation of digital advertising has had an inverse effect on prices. One theory, said one executive, is that every company in the world needed “digital services” in the early to mid-2000s, and even up until maybe five to six years ago. But while these companies may now still hire an agency for a rebrand or refresh, they’ve brought a lot of those capabilities in-house. “We basically are seeing a number of potential industries where we can charge a premium diminish,” said this executive.

“I’ve felt all along that digital agencies were primarily tactical,” said a search consultant who is working with a few. “They often didn’t have the strength to compete in a full-service review, and they often lacked the understanding of business dynamics and creating products.”

Kate Watts, the CEO at Faire and former U.S. president at Huge, said what she thinks is happening is that design and user experience is getting commoditized, while strategy isn’t. So for agencies that didn’t bring in serious strategy and even planning strength early on, things look tough. At R/GA, for example, global chief strategy officer Barry Wacksman said the agency had to seriously change, adding in consulting capabilities a few years ago and investing heavily in startups through a ventures arm as another way to make money.

“The more tactical and repetitive the work, the more the marketer can bring it in-house,” said Pivotal analyst Brian Wieser.

In response, digital agencies are scrambling to add capabilities. At Huge, the company is “reinvesting in consulting and business transformation expertise,” said IPG CEO Michael Roth. R/GA, the agency’s new Tokyo office, which recently won a big assignment from Shiseido for consulting, was also mentioned on IPG’s earnings call earlier this month. Wacksman said consulting is now the fastest-growing and most profitable part of the agency’s business.

(R/GA is also incidentally running a new ad campaign about itself starting this week, touting its abilities to transform businesses.)

“We don’t think about things in terms of adding on capabilities, more that we’re folding them in,” said Michael Koziol, global CEO at Huge. “We’ve been successful in avoiding bolt-on strategies; what we do is we fold new things into existing offerings.”

Huge has had management turnover recently; Koziol recently replaced longtime CEO Aaron Shapiro. According to former and current employees, Huge is trying to add in “integrated” offerings, so it can break out of the digital agency mold and get the kind of budgets it used to command. Competition is coming not just from consultancies and marketers’ own teams, but also so-called full-service shops like Droga5 or 72andSunny that are also making digital an obvious centerpiece of their businesses. There is some “existential discomfort,” said one former Huge employee; many people who signed on to one kind of company are suddenly finding a sea change afoot. Huge isn’t doing badly. It posted, according to insiders, 12 percent growth this year, which is better than the industry as a whole, but still its slowest year since the recession. The agency also recently closed some offices and had a couple of rounds of layoffs.

Huge is now trying to do much more physical design as well as product design, said Koziol. As for media buying, Koziol demurred. “Maybe,” he said.

“Anyone whose heritage is in tactical and execution is going to be in trouble,” said Koziol. Koziol maintained that Huge was all about having a “POV” — that point of view was that it was about customer experience and what the end user needed. “Yes, at some point, it was designing and building websites,” he said, but the idea is the POV legacy will shape Huge even as it goes beyond that.

Agencies as a whole continue to underperform, with holding companies posting a slew of sluggish growth results. According to Ad Age, total U.S. agency revenue growth was 1.8 percent last year, the slowest since the post-recession era of 2010. According to the latest agency report by Ad Age, digital work is growing — and there’s plenty of it. For the first time, “digital” accounted for more than half of total U.S. agency revenue last year.

The other big concern is consultancies. The biggest “digital network” on Ad Age’s list is Accenture Interactive, which also came in at No. 6 among the largest agency companies overall. Consultancies, said Wieser, tend to have much more exposure to “pure-play digital activity” that is able to siphon off more digital budgets from existing clients, whether inside the agency already or the parent company.

According to Gartner, which earlier this week released its annual “magic quadrant” looking at digital agencies, the leader in the group was Accenture Interactive. Gartner said Accenture Interactive is better suited to bring its core consulting strengths into “digital transformational” initiatives than most others.

Just take a look at Accenture Interactive’s growth in the past year. In 2017, the agency added industrial design capabilities and opened a “digital hub” in Singapore. It also acquired agencies SinnerSchrader, The Monkeys and Wire Stone, to name a few. It’s clear where Accenture Interactive’s energies lie: In a statement, the company’s chief marketing and communications officer said that as clients look for agencies that are “built from the ground up for the digital world,” that’s where Accenture excels. “Digital agencies are seeing a lot of competition from management consultants,” said Watts. The key, she said, is now to offer services that do command a premium, like strategic services.

“All in all, what is happening is that the last decade of digital services is essentially over,” said the former digital agency employee. “The challenge and opportunity is now to invent a new set of service to meet the future needs of companies.”

The post Digital agencies struggle with a new market reality appeared first on Digiday.

For News UK’s The Times of London and Sunday Times, subscriptions are the end goal. One key part of the Times’ arsenal to convert subscribers and retain them: email newsletters.

“Different newsletters do different jobs,” said Ben Whitelaw, head of audience development at the Times and Sunday Times, adding that the title has evolved its newsletters strategy since launching its first newsletter five years ago. “Link roundups are not always the best content for that audience.”

Shortly after the Times introduced its registered-access model — readers can access two articles a week in exchange for an email address — nearly two years ago, it launched the Best of Times daily email for those who register. The newsletter, which Whitelaw says has around 2 million subscribers, covers the day’s top stories across the news, international, sports, business and opinion sections.

The Times has four other newsletters around topics like football, driving, style, and food and drink, which are available for nonpaying, registered-access users. These are designed to expose nonpaying users to a variety of articles, so they hit their weekly limit and convert into subscribers. The Times also has another 20 newsletters for paying subscribers. These, like Brexit Briefing written by Times political reporter Henry Zeffman, tend to have a lot of original content, and because their recipients are already signed up, the Times doesn’t need them to click back to the site. Editorial staffers at various news desks handle much of the daily newsletter writing.

In September 2017, the Times launched The Sweeper, a daily newsletter about fantasy football, and in 2014, it unveiled Red Box, a political newsletter that now has 43,000 subscribers, according to Whitelaw. Using these newsletters, the Times can introduce readers to other parts of its coverage that require registration.

“We haven’t worked out all the journeys,” said Whitelaw. “For now, our newsletters are quite broad brushstrokes. We don’t personalize content yet, for instance.”

Newsletter subscribers are typically a publisher’s most engaged readers. Once readers have subscribed to a newsletter, they are much less likely to let their subscription lapse. So, they’re a critical tool to remind people of what the Times can offer, making sure readers come back each week.

“[Newsletters are] a useful lever to pull to engage and remind people who don’t come back as frequently,” said Whitelaw. “You’re delivering a bundle of information that’s finite and consumable. People are up to speed in a familiar-to-use format.”

The post How The Times of London uses email newsletters to drive subscriptions appeared first on Digiday.

Facebook’s F8 developer conference in years past has resembled a pep rally, with Facebook wowing the assembled with new products, star guests like Andy Samberg and high-profile musical acts. This year’s gathering should have a less triumphal tone (except for a performance by Logic), as the tech company grapples with pushback from the rise of fake news, its pivot away from media in its news feed and its data privacy scandals.

Facebook CEO Mark Zuckerberg instead needs to “demonstrate just how he plans to win back trust, not just from users, but also from investors and app developers,” said Michelle Steinberg, CEO of Domain Integrated, a digital marketing agency. “I expect a lot of hard questions will be asked. After all, this is a room full of software developers that understand Facebook’s technology and data.”

The subdued tone doesn’t mean F8 won’t be newsworthy. Here’s what marketers should expect from the two-day event.

Privacy, privacy, privacy
Facebook released a new ad last week focused on security. “We’re committed to doing more to keep you safe and protect your privacy. So that we can all get back to what made Facebook good in the first place: friends,” the ad reads.

Parker Ray, head of digital at MWWPR, said he expects Zuckerberg’s acknowledgment of the Cambridge Analytica scandal to come early to emphasize the importance, but also to “get it over with.” However, Facebook’s Chief Security Officer Alex Stamos will host a session titled “Security at Facebook Scale” following the keynote. 

F8 also arrives before General Data Protection Regulation takes effect on May 25. Facebook has one session about data use notices, which may be useful for those behind on what the GDPR means for Facebook.

Zuckerberg may announce solutions for developers to access more data, given all the recently introduced restrictions. In the wake of the Cambridge Analytica scandal, Facebook shut down access to some tools and cut off third-party data providers like Experian and Acxiom.  

“I expect Facebook to roll out a ‘native’ replacement for the third-party purchase data targeting. Facebook may license data directly from retailers and loyalty programs or predictively model purchase segments based on their extensive first-party data,” said Michael Horn, managing director of data science at Huge.

WTF publishers
Facebook hosted an off-the-record sideshow and also organized an official track for publishers at last year’s F8. But that isn’t the case this year. One publisher groused, “I am going to network primarily because I don’t expect much out of Facebook, other than more contrite apologies.”

In January, Facebook announced its push for “meaningful interactions,” which meant favoring posts from friends and family over Pages. That change collapsed organic reach for big Facebook-focused publishers like Mic.

But a major video publisher on Facebook said it hadn’t faced such drastic changes and that it’s still seeing success by natively publishing video on Pages and for Facebook Watch. 

“You have to be careful about not chasing your tail with new features, but you have to be aware of them,” the publisher said. “We’re really going to feel the vibes. Of course, the official panels and the tracks mean something, but as you’re there, you feel what the talk of the town is.”

Facebook did reach out to some publishers for videos to showcase. Watch is still growing. Yet the platform needs to ensure that media companies can make money from it via better analytics and monetization like pre-roll, mid-roll and sponsorships.

Family of apps
The big blue app may be the largest social network. Yet Facebook has an embarrassment of riches, also owning three other billion-user networks that could incorporate more features for marketers. Instagram has faced some application programming interface restrictions, but marketers said they expect more improvements for analytics and storytelling, like with augmented reality.

“You will see Facebook leveraging its AR Studio and Camera Effects even further and going after Snapchat quite aggressively, as Snap continues to push mobile AR. In the next year, we will see Facebook/Instagram and Snap battle it out for AR dominance,” said Cathy Hackl, futurist at You Are Here.

Back at F8 2016, Facebook opened up Messenger as a platform for media and marketers to create chat-based experiences. Some partners like CNN and 1-800-Flowers jumped in early, but others waited. Shortly after Facebook’s decision to decrease publishers’ presence in the news feed, Quartz announced its new Messenger bot. Artists like G-Eazy have created bots to help sell merchandise.

WhatsApp Business app, released in January, now has more than 3 million users, Facebook revealed last week. Both Messenger and WhatsApp could push more commerce experiences. 

Expanding AR and virtual reality
Zuckerberg heralded augmented reality last year with the slogan, “We’re making the camera the first augmented reality platform.” (Coincidentally, this followed Snapchat declaring itself a camera company.) Facebook welcomed brands to use new AR tools. This year, representatives from Nike and Warner Bros. will speak on a panel about AR.

Facebook also is expected to release its low-cost VR headset called Oculus Go. The product will cost $199, and it doesn’t require a phone or need to be tethered. That price point and ease of use could encourage more people to use VR and therefore convince more marketers to invest.

“Facebook will be the platform in which many users first encounter and adopt AR and VR solutions,” Horn said. “The race is on to publish the first few killer apps using the new capabilities.”

Snapchat announced shoppable AR earlier this month. Given Facebook’s history of copying Snapchat, it wouldn’t be surprising if F8 featured more AR commerce.

Other bets for Facebook
Facebook’s rumored video chat device reportedly won’t be onstage this year, but we can expect other businesses to get some attention.

Facebook has two sessions for Workplace, its enterprise software that provides Facebook-like work chat. Of course, data privacy is something that’s scrutinized at the company, so businesses may be less willing to give the social network access to more of their information.

Zuckerberg may emphasize the security of its current community in his keynote, but his long game has brought more people online. In last week’s earnings call, Zuckerberg revealed Facebook has provided internet access to more than 100 million people via Internet.org.

The post ‘We’re really going to feel the vibes’: Facebook’s F8 attracts marketers wanting answers appeared first on Digiday.

At its annual F8 conference on May 1, Facebook is expected to release Oculus Go, a cheaper, wireless version of its Oculus Rift virtual reality headset, meant to bring the much-hyped tech mainstream.

Facebook is joining several companies looking to shift VR from the preserve of gamers to regular use.

“While VR headsets are starting to become more affordable and new players are looking to get into the environment, it will still take some time before adoption is high enough to justify the spend for most marketers,” said Mike Stevens, executive director of strategic planning and account services at agency GYK Antler. He said only three of its roughly 30 clients are experimenting with VR.

Google has introduced a new line of cameras to capture VR content, and startups are experimenting with launching programmatic platforms to make it easier to scale VR ads. Yet marketers say it will still be some time before VR ads become a strong component of a brand’s strategy and teeter outside of experimental budgets, and some are uncertain whether these ads will get there at all.

VR ads have early adopters like Nokia, Mountain Dew, Honda and Macy’s. However, analysts have predicted that the VR business, although “very modest” throughout 2018, will rise to $38 billion in annual revenues by 2026, according to a Greenlight Insights 10-year forecast.

“We are looking at the right recipe for the continued establishment of VR,” said Chris Neff, senior director of innovation at digital shop The Community, pointing to the emergence of wireless, cheaper VR headsets and easier access to content. “But I caution to think it is going to lead to more brand spending. Brands have figured out whether or not they want to play in the space already.”

Marketers also have to consider creative hurdles. Unlike with other types of content, VR cannot be repurposed quite as effectively for other channels, unless a company counts uploading a 360-degree version of a VR film to YouTube or Facebook as repurposing. Jeremy Sigel, global svp of content and innovation at GroupM’s Essence, said creating specific VR content for specific channels requires a lot of time and resources, often more than a company receives back, and therefore, a lot of companies are not willing to experiment too much. Besides, VR ads seem unusually jarring in a new medium, said Chuck Fletcher, chief technology officer at creative agency Barbarian.

“Interruption advertising in VR sounds like a horrible proposition,” he said. “Imagine how long a 30-second ad spot feels when you have no choice but to take it in, with no fridge or pee break possible.”

The post VR is slowly going mainstream, but VR ads are still a long way off appeared first on Digiday.

At last year’s Digital Content NewFronts, ad buyers heard a lot of talk about brand safety from media companies that saw an opening to pry loose ad dollars from marketers spooked by all the stories about ads running on extremist videos on YouTube.

A year later, some say they’re making headway.

“We absolutely are seeing dollars move our way for that reason, particularly on YouTube, given we’re the largest brand-safe publisher on most, if not all, the leading platforms,” a BuzzFeed rep said.

Brand safety also is central to Hearst Magazines Digital Media’s pitch, said Todd Haskell, svp and chief revenue officer for Hearst Magazines Digital Media. As an example, he cited a campaign that Saks Fifth Avenue is running across Hearst titles to reach the women’s publisher’s audience in a “100 percent safe environment.”

“With the widely reported issues around questionable adjacencies and toxic environments, this has only become more important,” Haskell said. “We speak to issues around brand safety in every pitch, but particularly in ambitious content marketing programs like this.”

Studio71, a maker of digital video, has been doing five times the number of deals year over year since it’s pushed a new internal brand-safety product, said Reza Izad, the CEO there.

“Eighty or 90 percent of our conversations are starting with the fact that we have some of the biggest hits in the digital video ecosystem as a whole,” he said. “But not only that, we have parsed that into a segment that is really clean for conservative, CPG brands that want to play in the space, but don’t want negative associations for doing that.”

Others throw cold water on the idea that publishers can steer ad dollars away from the platform giants. Publishers are well aware that brand safety problems haven’t gone away. Still, most marketers that paused their spending on YouTube after reports of ads running near extremist content later returned. Facebook said its data breach has had no material impact on its advertising.

But not all are convinced brand safety is that big of a lure. After all, marketers come to marquee publishers expecting that and go to platforms for mass reach and micro-targeted audiences. The New York Times used its NewFronts presentation on Monday to showcase its business journalism, audio and video plans as well as its use of reader data to help advertisers. The unspoken message some took away was the quality of the Times’ journalism speaks for itself.

“We don’t pitch ourselves that way,” Sebastian Tomich, global head of advertising and marketing solutions at the Times, said offstage, in somewhat of a contrast to last year’s presentation. “People know we’re brand-safe. The only way we’d benefit is if marketers shift spending in a big way, and that’s not happening. [Big platforms] are too essential.”

Ryan Pauley, vp of revenue and operations of Concert, Vox Media’s publisher-led marketplace, said the publisher has been seeing more yearlong deals, and he believes high-quality editorial content is a big selling point. But marketers are foremost coming to Vox Media to reach specific audience in multiple formats, as was the case with an automaker that recently ran a campaign with Vox Media’s Recode and The Verge to position itself as tech-savvy.

“Nobody’s really pulling away from the [tech] platforms,” Pauley said. “But they are looking for partners that can activate across platforms, whether it’s programmatic, branded content, audio, so they can spend less time negotiating a deal with 12 different partners.”

“I don’t see a wholesale shift,” said Noah Mallin, head of experience, content and sponsorships at Wavemaker. “I think there is some flight to quality to say where you can be not necessarily away from Facebook, but be more careful about where stuff is showing up. But I don’t think it’s an either-or thing. The fragmentation of the audience’s time is only increasing, with time shifting to platforms that are not ad-supported at all.”

Sahil Patel contributed to this report.

The post NewFronts publishers seize on brand safety as a selling point appeared first on Digiday.

Banks’ race to meet the customers “where they are” has taken on a new twist: customers are now product developers — not just end users.

Last week, U.K. challenger bank Monzo rolled out “Monzo Labs” — a feature within the app that lets users test new features as they’re being developed. It’s part of a trend to release product iterations to an ever-larger number of users — a necessary move to keep pace with changing expectations as businesses scale quickly. Any Monzo user can test products and offer feedback.

The goal of Monzo Labs is to keep customers involved in product thinking as user numbers grow, with the goal to get every Monzo customer involved in some way, said Tristan Thomas, Monzo’s head of marketing and community.

Three-year-old Monzo, which has 650,000 customers, has been active on various fronts in seeking feedback from customers on products while they’re in development — both through in-person “Testing Tuesdays” at Monzo offices and an exchange of views and polls on its online forums. For instance, Monzo polled its users on its forums on how much it should charge for overseas ATM fees, and introduced goals-based savings envelopes called “pots” based on user input. To keep pace with the demands of a growing customer base, the company decided to open up product testing to all interested customers. Monzo labs’ inaugural product test is of a feature called “Summary” which does an analysis of a customer’s salary and spending habits to predict spending outflows and disposable income.

Read the full story on tearsheet.co

The post Banks are treating customers like product developers appeared first on Digiday.

During Monday night’s Digital Content NewFront presentation, Twitter announced it’s debuting 30 new shows for its platform, as the company continues its bets on news and video. At the company’s second annual NewFront, the company said it signed a multi-year partnership with NBCUniversal, which will sponsor seven of the new shows with content from the…