Month: August 2018

Index Exchange’s undisclosed use of bid caching may have angered buyers and infuriated rival vendors, but it’s also a symptom of another ad tech challenge: supply and demand commoditization.

The days when a supply-side platform could claim unique demand because they have exclusive access to premium publisher inventory have disappeared, for a variety of reasons. Aside from the proliferation of SSPs in the market, programmatic advertising developments — most notably header bidding — have also put SSPs under pressure.

Header bidding was welcomed with open arms by independent vendors in 2015 as a way to loosen Google’s grip on the market with its waterfall structure to online ad auctions. Vendors that got in early on the header-bidding gold rush (including Index Exchange) were in a good position. But there have been some unintended consequences — one being that it’s now harder than ever for an SSP to claim any unique demand because they all have the same level of access to publisher inventory.

“There was a time when exchanges could claim to have more unique access to inventory, especially toward private marketplaces, but that’s not the norm anymore,” said Sarah Warner, digital investment lead for programmatic and video, at Group M Global. “There is a growing commoditization and duplication of supply.” To counter that, Group M has spent the last year advising clients how to cut down on the amount of paths to impressions they use, according to Warner. “If you look at the DSPs [demand-side platforms] that integrate with hundreds of SSPs and exchanges — to scale a business, you really only need 10.”

Group M is still in discussion with Index Exchange over the use of bid-caching, a method the vendor has now halted following the market backlash.”We’ve spent the last week combing our data, but it hasn’t shown anything alarming, so we can’t yet discern if this [bid caching] is uniformly bad or good for us as buyers,” added Warner.

Tweaking auction dynamics to gain a competitive edge is nothing new in ad tech. Although buyers and vendors agree that doing so without disclosing it to them is unacceptable; many believe that bid caching is indicative of what lengths vendors must go to remain competitive in a market where it’s increasingly hard to stand out.

“Independent SSPs are looking a lot more similar than they ever have before,” said Matt McIntyre, head of programmatic for Europe, Middle East and Africa for Essence. “You can’t innovate on supply or demand anymore. They [SSPs] have been doing auction tweaks to try and normalize things and bring it back in line with the idea of a unified auction. Different SSPs including Index Exchange did well being first movers in header bidding, but they’ve created their own market where there is no unique selling-point for supply.”

Another challenge for vendors is that any new development that promises to offer decent benefits to either buyers or sellers of inventory, soon gets imitated. “Innovation in ad tech has the lifespan of a gnat before it gets copied or assimilated because everyone is chasing the same goal — which is a temporary advantage over rivals,” said Dan Wilson, CEO of London Media Exchange. “That means innovation gets warped into something that it arguably shouldn’t be — this [bid caching] is the equivalent of a sub-prime mortgage.”

Although plenty of independent rivals have been quick to deny they use bid caching, or anything similar, some industry experts remain cynical toward those who claim to be spotless. “This whole bid-caching issue is likely just playing into Google and Amazon’s hands,” added Wilson.

Innovating beyond tweaking auction dynamics may be tougher, but it’s not non-existent. Rubicon Project’s $38.5 million acquisition of nToggle, a startup that builds infrastructure to streamline bid requests, is regarded as a smart way to help reduce the strain on costly bidding infrastructures, by experts. Meanwhile, some SSP vendor products are genuinely welcomed by publishers and buyers if they are proven to solve a current challenge. The problem is when publishers and buyers aren’t aware of what’s being changed, there is no way to monitor whether auction tweaks are genuinely market innovations that benefit either buy or sell side, or simply tactics to inflate margins for the vendors, said a publishing executive.

This same publisher has teamed up with one of its buyer partners to run tests looking into how much of the marketer’s money is ending up with the publisher, as a result of the bid-caching issue highlighting yet again that publishers and buyers are not always in the driving seat.

“Vendors are their own worst enemies, because they make it so hard for us to get log-file data [to show who is bidding on what inventory, when, and for what price]. We’re going to team up with the buy side to find a way of getting it,” said the same publishing executive. “I don’t want to rely on anyone that has an agenda.”

The post Behind the bid-caching debate, signs of ad tech commoditization appeared first on Digiday.

This month, Viacom announced it’s launching three divisions in Buenos Aires, New York and London to increase the international output of its short-form digital content. Initially, the hubs, which will create, distribute and monetize digital content, will focus on three Viacom brands: MTV, Nickelodeon and Comedy Central.

Viacom has always had people in the U.K. producing content that’s exported globally, this added investment comes from the success of short-form series from these brands. In 2017, Comedy Central produced 14 short-form shows like “Josh Investigates,” “Comedians Solve World Problems” and “Bad Snappers” in 150 territories on owned and operated and social platforms. This year, Comedy Central is planning to produce 20 series. On YouTube, MTV International subscribers have doubled to nearly 850,000 since October 2017, according to Social Blade data.

“We have always made content in the U.K. This is adding a lot more fuel to how we utilize formats in several markets and how the hubs work with each other to increase output,” said Brendan Yam, vp and gm of Viacom Digital Studios International. “We’re figuring out how to work more efficiently as international organization.”

With its international hubs, Viacom plans to boost efficiencies through a single social publishing platform for sharing content on social, centralized language versioning capabilities, a centralized ‘bank’ of formats and branded intellectual property for creating local versions with local talent and partners.

The company said there are a “substantial” number of team members who work on short-form in the U.K. and in its other international offices, where it will be increasing the headcount.

As of last year, most of Viacom’s original series development is done in-house, with a small amount of production outsourced. The benefits are having more visibility and control over consistency, particularly in what a digital series needs to work globally, such as not using local talent. Since the move to producing the bulk of content in-house, the media company is seeing more talent bring ideas directly to Viacom — “Modern Horror Stories,” for instance, came from in-house talent — and the company has been able to create more content for brands and partners.

Jake Cassels, managing director at production studio The Connected Set, noted the immediate opportunity for short-form video in the U.K. is still nascent, saying that “broadcasters like BBC Three are showing more interest, but it’s a slow burn. [Viacom’s investment is] a symbol of confidence in the U.K. market.”

According to Cassels, another motivation behind the U.K. investment is that U.K. producers are in a more favorable position for selling rights internationally by selling shows to separate territories rather than all in one bulk.

“Viacom is future-proofing themselves,” he said. “But as content production gets more global and distributed on global platforms, it’s going to become harder to do those deals.”

The challenge with short-form video is making it work financially when currently the U.K. short-form ad market is cornered by YouTube. The threshold of the numbers of subscribers needed to monetize on the platform has increased, so YouTube alone won’t cover decent content costs, said Cassels. Content creators need to produce in volume and shoot in ways where it can distribute on multiple platforms while monetizing through branded content and producing for other content creators.

“With direct revenue from platforms, there’s a lot of work to do there. Monetization is not a direct activity from ad sales,” said Yam, adding that Viacom Digital Studios International is looking at cutting deals with pay-TV operators, mobile carriers and other publishers. “Branded content, doing production for other partners and including social reach and activity has been critical. We’re interested in seeing [direct revenue from platforms] develop further.”

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Image: courtesy of Comedy Central UK via Facebook.

 

The post Viacom sets up international hubs to pump out short-form content appeared first on Digiday.

Online marketplace Notonthehighstreet.com is moving most of its performance budget into Google Shopping now that it’s a major source of traffic and sales.

The advertiser has become reliant on the search giant’s visually-oriented search comparison service over the last year. As a result, most of its performance ad spending, particularly paid search, has moved from traditional text ads to Shopping ads, said head of performance marketing Luke Boudour, who declined to say how much exactly. That’s a big shift over a short span of time, which Boudour said comes from the ability to push people directly to product pages on a relatively lower cost per click with Google Shopping ads.

“We’re skewing our performance budget toward Google Shopping, specifically when it comes to paid search, because it’s been easier to drive sales from those ads,” said Boudour. Google Shopping’s pay-per-click ads usually lead to much higher click-through rates, he said, and added that more clicks means more spend on ad budget.

With Google shopping ads, bidding occurs at the product level, rather than on specific keywords. This means that Google ultimately determines which keyword or keyword group products on Notonthehighstreet.com fall into based on information taken from the advertiser’s site. Everything from product titles, price, branding and imagery are taken into the site and placed into a feed on Google Shopping, which the retailer worked with technology platform Goa to manage.

The result is more qualified traffic and consequently better conversions, said Boudour, as shoppers are more likely to click on ads that have relevant production information such as price and imagery. Text ads, on the other hand, had become too costly for Notonthehighstreet.com as a result of the unqualified clicks they generated when shoppers accidentally clicked on them due to not being able to see the product’s price, appearance or reviews.

Other retailers have had the same idea as Notonthehighstreet.com. Google Shopping ads accounted for eight (82 percent) of retail search ad spend in the U.K. in the first quarter of 2018, according to a study of 40 million search ads from more than 260,000 retailers by intelligence platform Adthena.

“We’ve seen more of our retail clients shift more of their search budget into Google Shopping rather than text ads, said Hannah Langley, head of client services at media agency Threepipe. “Google has reduced the amount of inventory for text ads in that time, which has sped that transition up.”

Despite Google’s attempt to promote Google Shopping in organic search results over rival services ruffling European regulators, retailers like Notonthehighstreet.com view it as a key part of their performance strategy. Google Shopping is the only real way of tapping into searches at scale given the retailer is reluctant to get too close to Amazon, which Baldour said is a “rival.”

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The post Online retailer Notonthehighstreet is investing more in Google Shopping ads than text ads appeared first on Digiday.

Instagram is heavily courting beauty brands and beauty influencers through the recent launches of IGTV and custom Instagram Stories filters.

The two new features borrow from competitors: IGTV from YouTube and custom filters from Snapchat. For beauty specifically, they allow both brands and influencers closer to the platform. This is relevant as more cosmetic products are announced on social media. like Pat McGrath Labs, and Instagram recently expanded its partnership team with Kristie Dash, who will be solely dedicated to beauty.

Parent company Facebook has done the same with its Facebook Watch platform that debuted last August, introducing exclusive beauty series like “Huda Boss” with influencer Huda Kattan and its upcoming beauty AR experience with ModiFace/L’Oréal. Right now, there are no sponsored ads or monetization opportunities on IGTV or the custom Instagram Stories filters, like the platform has with its in-feed posts.

At the launch event of IGTV on June 21, the social media platform announced the longer-form streaming channel with several beauty influencers, including Manny Gutierrez, who has 5 million Instagram followers, and Susie Shu, who has 161,000. Director of fashion partnerships Eva Chen also secured an army of creators and brands pre-launch, like Kattan, Kim Kardashian West, Laura Lee and YSL Beauty to post content day of, turning IGTV into a spectacle. (The company wouldn’t release the number of people approached for IGTV’s launch initiative.)

Results varied: Kattan’s first piece of IGTV content, which chronicled her being locked in Sephora, saw 537,000 views — the beauty mogul has 26.8 million followers. YSL Beauty has 4.5 million followers, and its first “Dare or Dare” video with global beauty director Tom Pecheux had 18,000 views. Beauty influencer Laura Lee, with 2.3 million followers, reached 279,000 views for a video that went through her favorite summer makeup products.

IGTV, which looks to take a piece of YouTube’s pie, was created to bring fans closer to their Instagram favorite stars, said Chen. Year-over-year, the company saw an 80 percent increase in overall video and wanted to use the vertical landscape to its advantage.

“If you look at the way people are holding their phones to do Stories or take photos, it’s vertically, so we knew there was an opportunity to do something different and native to Instagram,” Chen said.

Instagram product manager Ashley Yuki, who worked on IGTV, agreed: “Filling the whole screen or space of the phone makes you feel closer to the creator or brand, especially for beauty, so the vertical positioning let us make video a real destination.”

The fashion and beauty communities on Instagram are the top producers of video across feed, Stories and IGTV, according to the company. More specifically, there are 200 million beauty fans globally on Instagram (those that follow a beauty or makeup account), which accounts for 25 percent of Instagram’s global community.

Though the company didn’t share IGTV growth statistics since launch, Chen pointed to Benefit Cosmetics as a best-in-class example for its mix of educational content interspersed with aspirational footage. One of Benefit’s most viewed IGTV pieces of content was an eyebrow shade matcher that promoted its Brow collection of products — that video received nearly 41,000 views.

Lower-touch educational content is also working for celebrity influencers who are crossing over into beauty territory, like model Taylor Hill, who posted an IGTV makeup video that walked followers through her daily routine. It was viewed 495,000 times.

“Handheld, selfie-style videos are the best performing, so far” said Chen. This is in contrast to the more produced, horizontal beauty tutorials and videos on YouTube. “On Instagram, fans expect video to be in real time and for it to feel more real,” she added. That nearly half of Instagram’s beauty fans are under the age of 24 is in line with the transparency and authenticity that demographic is looking for.

Instagram’s custom filters are also creating interest among beauty brands and influencers. The first batch of filters launched on June 26 with Ariana Grande, Liza Koshy, Ariel Martin (known as Baby Ariel), BuzzFeed and the NBA. On July 31, Kylie Jenner launched her own custom face filter on Instagram. These filters are being compared to Snapchat’s Lenses, which launched in 2015. Users can virtually wear seven of the most famous Kylie Cosmetics lipstick colors, and post a video, Boomerang or selfie to their Instagram Stories. The company reported that 400 million people use Stories daily, and that after four weeks, Jenner’s custom face filter had crossed 1 billion impressions.

Jenner’s brand became the first beauty company to debut custom filters, though Chen suggested there was an opportunity for Instagram to do more. Facebook’s ModiFace/L’Oréal partnership will roll out at the end of this month with NYX Cosmetics. Similar try-on experiences will roll out on Facebook in the fall with other L’Oréal brands like Maybelline, Lancôme and Shu Uemura.

Like IGTV, there is no link to buy Kylie Cosmetics within the custom filter as of yet — in fact, users are only able to view Jenner’s custom filters on their Stories once via third-party before they have to follow her directly. Meanwhile, Snapchat debuted a native commerce feature to let influencers earn money from products sold through their posts in late June. Jenner was one said partner and promoted her Kyshadow Sorta Sweet Palette at time of the launch.

Currently, the only Instagram feature to actually track sales or conversation is Stories, which suggests that, for both beauty brands and beauty influencers, IGTV and custom filters as they stand are more of a brand awareness play.

The post How Instagram is enticing beauty brands and influencers with IGTV and custom face filters appeared first on Digiday.

Returned purchases are a major drain on retailers, particularly after consumer purchase activity spikes around holidays. Retailers are trying to make some money off returned goods, often through third-party logistics companies that route them back to off-price clearing centers, charities, and e-commerce markets for used goods.

Last week, outdoor goods retailer REI launched its used goods e-commerce store, a move it said would let it more cost effectively re-sell used goods while responding to customers who have been demanding affordable, high-quality used outdoor goods. It’s beta tested the site since October of last year.

“There’s been inherent demand for lightly-used, high quality, affordable gear, and given customers trends and behavior, we found it critical to deliver an e-commerce solution for our member base,” said Peter Whitcomb, director of strategy at REI. “We see used gear as both extending our potential market size and also talking to [prospects] who perhaps in the past haven’t shopped with REI.”

Customers’ openness to shopping on e-commerce sites like Amazon is an opportunity for REI to beef up its e-commerce presence, and the used goods store is a part of that, the Whitcomb added. Merchandise returns resulted in $351 billion in lost sales last year in the U.S., according to a recent report from Appriss Retail. REI has traditionally sold used merchandise through “garage sales” held at physical stores, events which create a level of excitement among customers. It’s still planning on having used goods sales at its physical locations, but the e-commerce store is a way to reach new customers, including those who don’t live near physical stores, Whitcomb said.

REI is working with third-party reverse logistics company Yerdle, which also works with Patagonia and Eileen Fisher. The company processes returns and makes calls on which items should be re-sold. Based on a service agreement with the Yerdle, REI set guidelines on the types of goods are fit for resale, the pricing structure, and the timeframe to ship to customers. Yerdle also runs REI’s used goods e-commerce site.

Beyond cost-saving, the used goods store also fulfills an important brand promise for REI, a membership-based cooperative that promotes environmental sustainability.

“Across the cooperative, environmental stewardship is a core value,” said Greg Gausewitz, REI’s manager of product sustainability. “We are working to reduce environmental impact, and every product has an environmental footprint, mostly from manufacturing of the product; with used gear, there’s no incremental impact.”

Other large retail brands, including Target, Walmart-owned Jet.com, BJ’s, Staples, and Sennheiser (none of whom would comment for this story) are working with tech company Optoro which uses proprietary software to figure out whether returned merchandise can be resold on store shelves, donated, or sent to an off-price retailer, one of Optoro’s online e-commerce sites (blinq.com and bulk.com), Amazon or eBay.

Reverse logistics solutions save retailers money because they can reach their next destination quickly, allowing retailers to recover more costs while the value of items depreciates, said Tobin Moore, Optoro CEO.

“Traditionally, reverse logistics — the process by which goods are returned to the retailer — has been tremendously inefficient,” he said. “Inventory is shipped three to five times before it arrives at its next home, racking up transportation costs.”

Direct to consumer e-commerce retailers, including Everlane, Tradesy and Carbon38, are encouraging customers to return items in person through a company called Happy Returns, which has set up more than 200 “return bars” across the U.S. (including on-site locations at retailer Paper Source). By centralizing where returns are processed, brands are able to save on transportation costs; Happy Returns follows retailers’ instructions on next steps for the unwanted merchandise, said Happy Returns CEO David Sobie.

E-commerce retailers often face a higher rate of return that those with physical locations, adding pressure on them to quickly channel unwanted goods to buyers. According to consulting firm CBRE, historically, retail returns make up about 8 percent of total sales, but for e-commerce merchants, return rates can be as high as 15 to 30 percent, depending on the product type. Groupon, which has been using Optoro’s software since 2014 at its fulfillment center in Hebron, Kentucky, said prior to using the platform, returns were liquidated for a predetermined percentage of the product cost.

“For the items that we can’t resell, the software guides us on the most optimal way to liquidate the item, if possible, based on the condition, demand for the product in the marketplace and expected price, amongst other criteria,” said Andrew Bowerman, vp of logistics at Groupon Goods. “Many times this means selling the product at a higher recovery rate via Optoro’s blinq.com and bulk.com.”

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The post How retailers are recouping costs from returned merchandise appeared first on Digiday.

Content marketing may be gaining popularity with marketers, but many find judging its effectiveness challenging, according to Digiday research.

A large part of the problem for marketers is figuring out what they should be tracking. Over half, 53 percent, of the marketers surveyed agreed that the biggest challenge with content marketing is establishing key performance indicators.

The post Digiday Research: Half of marketers struggle to measure their content marketing appeared first on Digiday.

Tumblr is making some changes to its community guidelines, set to take effect Sept. 10, with an aim of eliminating hate speech, glorification of violence and its perpetrators and non-consensual sexual images. The Oath-owned blogging platform said in a Tumblr post that it sought to clarify its policy on hate speech by “we’re redrawing the…

“The Sell Sider” is a column written by the sell side of the digital media community. Today’s column is written by Chip Schenck, senior vice president of data and programmatic solutions at Meredith Corp. Identity is the foundation of addressable marketing, and yet it’s being treated as a precious resource. This is because digital identity… Continue reading »

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The Web giant owned by Verizon analyzes more than 200 million inboxes for clues about what products people might buy—a practice much of Silicon Valley has declared off-limits.

A new federal law going into effect in September will make it easier for families to combat a growing problem of identity fraud of minors, allowing them to make inquiries about credit files in their child’s name and freeze a file at no cost.