Month: June 2018

Apple wasn’t shy about bashing Facebook on Monday as the Cupertino giant announced more restrictions on ad tracking tools in its latest version of Safari. But less commented upon at the company’s Worldwide Developer Conference was a recent Wall Street Journal report claiming that Apple has been shopping around a new mobile advertising platform to…

Artificial intelligence (AI) adoption is relatively modest across large enterprises, but marketing and sales organizations are embracing the technology most quickly. Forty-six percent of companies are investing in AI for sales and marketing purposes, and 50% are deploying AI projects for commerce and customer service, according to a report released Thursday by Constellation Research. By… Continue reading »

The post Constellation Research: AI Piques Marketers’ Interest, But Overall Adoption Is Slow appeared first on AdExchanger.

Facebook this week announced long-awaited news shows for its “Watch” video section, which is a step forward in the battered Facebook-publisher relationship. Facebook is paying publishers to make the shows, and in doing so, showing a commitment to quality news. Campbell Brown, Facebook’s head of global news partnerships, described it as tailor-made for the partners because it gives them a “chance to experiment” with long-form content and to reach young audiences that don’t typically tune in to the nightly news.

“We have to support that,” she said, adding that the “hope is to create a sustainable business model” for news.

The post The Rundown: With Watch news shows, Facebook still holds the cards appeared first on Digiday.

“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video. Today’s column is written by Mark Popkiewicz, CEO at Mirriad. A generational shift is taking hold of the Asian media landscape as new online video services challenge incumbent TV operators in the largest media market on the planet. But… Continue reading »

The post China Must Rebalance Its Video-On-Demand Ad Load To Reach Full Potential appeared first on AdExchanger.

“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 Auren Hoffman, CEO at SafeGraph. The LiveRamp acquisition by Acxiom, which closed four years ago on July 1, 2014, has been one of the most successful acquisitions in the last… Continue reading »

The post Acxiom’s Next Steps And The LiveRamp Acquisition Four Years Later appeared first on AdExchanger.

There was a time when coffee was coffee: piping hot brown liquid doled out with efficiency to workers seeking a quick jolt of energy. That’s still true for some, but today, coffee is far more than just coffee. It’s a craft, a destination sought out by increasingly discerning, fiercely loyal consumers.

Caffè Nero has known this for a while. Since its founding in 1997, the European coffee house brand has built a network of 700 stores in the UK and abroad on the promise of hand-crafted artisan coffee in a friendly, familiar atmosphere. Caffè Nero customers don’t just want a quick pick-me-up; they come for the experience. That’s a key differentiator, but it also presents an interesting challenge: how to mobilize a huge (and growing) database of customers to spend more and turn new entrants into loyal devotees.

As Caffè Nero’s partnerships manager James Flett put it, “The competition for customers is becoming increasingly fierce, with multinationals and independents all vying to engage customers, grow their loyalty base and increase revenue.” To help achieve these goals, Flett and Caffè Nero turned to IBM Watson Marketing.

Homing in on the coffee club
Caffè Nero had already overcome one of the toughest hurdles for most retailers: building a relationship with customers beyond a simple, amenity-based transaction by getting them to sign up for its prepaid card program. As such, the company sought to specifically target its marketing efforts towards new and existing members — an already captive audience.

The tricky part was translating initial engagement into repeat purchases.

Caffè Nero’s marketers had previously built their approach around four quarterly tentpole campaigns in addition to smaller product launches throughout the year. A fine, one-size-fits-all strategy, but it lacked personalization. To generate significant revenue, Caffè Nero needed to get specific, targeting messages to customers based on their locations, preferences, and relationships to the company. That’s where Watson Marketing changed the game.

 

Starting the right conversations
In order to get started, Caffè Nero had to answer some fundamental questions: What’s the right messaging frequency? Which customers are most likely to convert? Which messages resonate with which customers and ultimately lead to a purchase?

Watson Marketing dove in, scanning through troves of company data to deeply understand the company’s customers, delivering logical, effective recommendations and identifying segments of likely coffee lovers.

“Segmentation is an art,” said Michael Bordash, engineer for IBM Watson customer engagement. “What AI does is pull historical models of a company’s typical customer and find the best candidate for whom a message will resonate and drive conversion and then return a list of particular customers to target.”

By eliminating the guesswork and manual labor required, Watson Marketing cut time and increased precision for each campaign. But an AI-powered approach had another benefit: According to Bordash, “it limits over-messaging, which leads to attrition and reduced attention.”

Loyalty: Brought to you by AI
Armed with customer data based on personal segmenting and behavioral mapping, Caffè Nero crafted a three-pronged communications strategy, with each message precisely targeted towards customers in one of the AI-defined segments.

First, all new prepaid card customers received a personal welcome email. This would keep them informed about new offers while gathering additional personal information about their preferences and frequency of use, deepening the insights available for further segmentation and persona development.

Next, registered customers began receiving automated monthly statements with personalized information about their card balances and general updates about new releases and promotions.

Finally, Watson Campaign Automation kept Caffè Nero prepaid customers primed to buy through friendly top-up reminders. These emails were triggered in real time whenever a customer’s balance dipped below £2, so they’d be less likely to run out of credit and skip a purchase opportunity.

“AI can pick up when customers say, ‘Only send me stuff that’s important.’ That means you can arbitrate and figure out which channel, message, and content take precedent,” Bordash said.

A successful pick-me-up
Caffè Nero has long known that coffee is more than just a quick fix for the afternoon lag. But now it has the data to keep loyal customers coming back and grab an even bigger share of what has become more than an $85 billion industry. So far, it’s working.

The company’s new data-driven loyalty programs have resulted in card holders visiting Caffè Nero shops and spending twice as much as a control group. Email open rates have reached an impressive 70 percent, online purchases are up significantly and 68 percent of customers receiving personalized, relevant emails buy coffee within a week.

“Thanks to the ability to segment our customers and deliver relevant, bespoke and real-time value in our marketing communications, we’ve seen impressive results,” said Flett. “We’re genuinely starting to see communications translating into physical visits, which was one of our primary objectives.” That kind of success will wake you up in the morning.

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The post How Caffè Nero built loyalty with an extra shot of AI appeared first on Digiday.

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Live For The Moment Facebook’s latest TV gambit is paying up for live news. The platform announced a list of news programs for its video hub Watch with talent like Shep Smith of Fox News and CNN’s Anderson Cooper. Facebook will pay publishers to… Continue reading »

The post Facebook Dives Into Live News; Apple News Plays Favorites appeared first on AdExchanger.

Four years ago, when Rich Fulop founded Brooklinen, the direct-to-consumer luxury bedding startup, the customer acquisition strategy was straightforward for DTC brands: pour money into Facebook ads.

Soon, Brooklinen was spending up to 75 percent of its overall ad budget on Facebook. But Brooklinen and other DTC companies, and marketers of all stripes, were pouring money into Facebook’s giant ad machine, lured by micro-targeting segments. Simple economics took over: Facebook ads became very expensive for DTC brands like Brooklinen, Thinx, Roman and Quip — all of which are now diversifying their spending to new channels, including fuddy-duddy outlets like out-of-home, terrestrial radio and even — heavens — print.

“We’re trying to move away from Facebook as fast as we can,” said Fulop, who said CPMs on the platform are double what they were a year ago. “We’re fighting in this little slip of real estate with everyone else out there and it’s hard to cut through. You’re paying an impression-based auction so you are essentially biding against anybody and everybody that wants to compete for that space, so it’s become a hyper-competitive environment.”

Digiday spoke with 10 direct-to-consumer companies, and all of them report their marketing mix has de-emphasized Facebook for other digital alternatives — including Facebook-owned Instagram — but seven of them also say they are expanding into traditional vehicles. The reason: Prices are getting high for audience segments and the feed has become a very cluttered space.

“We can’t work fast enough to maintain the stability of the pricing,” said Fabian Seelbach, svp of marketing at DTC company Curology, which sends customized acne treatments to consumers. “The effectiveness for Facebook has gone down and got particularly bad in late April and early May, which is why we are shifting significant spend.”

Seelbach said that Facebook was once a stable piece of its business but, by the end of April, the company was paying 30 to 50 percent more on CPMs, so had no other option but to shift 30 percent of its Facebook ad spend away from the platform, and will likely shift another 30 percent in the weeks to come.

Part of this spend is going to Instagram Stories instead. Seelback said the appeal of Instagram Stories is that while it requires a different creative format, all the targeting and audience and mechanics behind the scenes are still in the Facebook ad manager, making it easier for Curology’s internal team to manage the switch. Another reason: Seelback said Instagram Stories CPMs are now half as much of in-feed Facebook ads. As Curology continues to scale its business, Seelback expects the company to shift some of its spend into traditional media channels as well.

In January, Facebook changed its news feed to prioritize user content over branded or publisher content. That, according to several companies, has led to increased competition over limited ad inventory in the feed. With less inventory in the ads auction, CPM prices have increased dramatically and, with less ads, ad impressions have sunk. After the algorithm change in January, CPMs on the platform shot up to 122 percent year over year as the impression rate dipped, according to AdStage data reported in Recode.

Most DTC companies begin their marketing online since the scale is wide and the overall process is easy, according to Fulop. But with Facebook’s raising prices and unpredictable algorithm changes, DTC companies no longer view Facebook as their only or best option, even when starting out.

Rob Schutz, co-founder and chief revenue officer at erectile dysfunction startup Roman, was formerly vice president of growth at Bark & Co. for five years. At Bark & Co.’s BarkBox, a DTC subscription service for dog toys and treats, he was able to grow the business quickly on Facebook because there was less competition and CPMs on the platform were only a few dollars, said Schutz. That was in 2012 before Facebook even had one million active advertisers. Today, that same feed is being shared by six million active advertisers, according to Facebook’s 2018 first quarter earnings.

“All in all, DTC brands use Facebook as a shopping catalog,” said Tom Ajello, cco at consultancy Vivaldi. “Which in essence is right. But when the catalog gets filled with too many interesting things it turns into Skymall. And we all know what happened to Skymall.”

With six-month-old Roman, Schutz isn’t risking staying within Facebook’s ecosystem. There’s some Facebook, but already the startup’s traditional media spend is larger, according to Schutz. The startup is running out-of-home ads (Roman has paid for a takeover of New York’s Grand Central Terminal), a TV ad airing on June 11 and direct mail.

“With new business, you’re going to push for scale and at some point you get priced out on Facebook prospecting,” said Schutz. “That’s a trend now — companies are looking for ways to fill the funeral to get people in a retargeting bucket. Especially with TV– you see a lot of brands on the direct-response side spending more money there because it’s an effective channel. It’s being treated similarly to a digital channel.”

Jake Kassan, CEO and co-founder of DTC watch company MVMT, sees Facebook as no longer the premier channel for DTC companies to start out on. Rather, an omni-channel strategy is needed. “For a brand like us, starting off, it was a no-brainer— jump on FB and build a brand,” said Kassan. “You’re not going to see that as much. The barrier to entry is far more difficult than it ever has been.”

Even with four years of experience with Facebook advertising, in recent months, MVMT’s Facebook spend has dipped to 30 percent of its overall spend, as it finds its return on investment diminishing. This year, MVMT’s offline marketing, which will include direct mail, podcasts, local and national terrestrial radio and TV, will take up 30 percent of the company’s budget, with TV accounting for 20 percent.

“You just never know where data laws or algorithm changes will change,” said Kassan.

The move away from Facebook is not an easy one. After all, Facebook is a direct-marketing machine. Traditional media has higher production costs, wider cancellation windows and longer lead times, and harder measurement. Quip, an electric toothbrush startup, just launched its first TV ad this week in an effort to diversify away from Facebook, but is treating the channel as it would a digital one: testing multiple TV ads with different tracking codes to get a read on what creative is resonating best by network and time of day.

“We’re building brand awareness with [offline advertising], but it’s hard to know who’s seen a billboard or how it’s performing,” said Fulop. “That’s one thing companies don’t have to worry about with Facebook. You know exactly why you’re going to get back. Good or bad, you’re going to measure it.”

The post Pivot to traditional: Direct-to-consumer brands sour on Facebook ads appeared first on Digiday.

Defy Media has shut down its ad network, but now faces a lawsuit from a publisher alleging it’s owed $300,000 for ads it ran while part of Defy’s network.

Topix last week filed suit against Defy over ads that ran in December and January, said Topix CEO Chris Tolles.

Defy made its name creating comedy and entertainment videos for YouTube through channels like Clevver, Screen Junkies and Smosh; as of 2016, it had raised $85 million. It also had a programmatic ad network that Defy used to sell ads on publishers’ sites, including Topix’s. Defy CEO Matt Diamond said earlier this year that the digital media company would get out of the programmatic ad business to focus on its core publishing operation.

A Defy spokesperson emailed that the company talked to “many affected parties regarding payment timelines” and is still evaluating options for its programmatic business, “including a possible sale.” The company’s full statement is included later in this article.

Other publishers have also claimed on Reddit and elsewhere that Defy owes them money.

Defy Media emailed publishers in mid-May that the company had decided to suspend its programmatic business and asked them to remove its ad network from their sites.

Patrick Garrett was one of the publishers who received the email. He then logged into Defy’s publisher dashboard and saw that the company had continued running ads on his site, Bourbon & Banter, but had not paid him for any ads that had run in 2018. Garrett said he’s owed “several thousand dollars.”

Another publisher, PBH Network, which operates sites such as All That Is Interesting and Runt of the Web, claims it’s owed $15,000 for eight months’ worth of ads. The ads date back to October 2017, said cofounder and president Alexander Baldwin.

Here’s the full statement from Defy:

“Over the past 18 months Defy has made some significant and at times difficult changes. These changes include increased focus on our owned and operated brands as well as core video business and partners. A few weeks ago, we made the difficult decision to suspend our programmatic division, which had been part of Defy for a number of years and included direct relationships with publishers. This was done after months of effort to either sell the business or raise money directly into it. We have been (and continue to be) in direct conversations with many affected parties regarding payment timelines. Given recent feedback, we are taking steps to improve communications with those impacted, including reaching out to those who expressed concerns via social media and setting up a dedicated email address. Defy continues to evaluate its programmatic business and all potential opportunities related to it, including a possible sale.”

The post Publisher sues Defy Media, claiming it’s owed $300,000 appeared first on Digiday.