Month: September 2018

Many small businesses are attracted to Amazon by its vast scale. But for some, the platform remains a frustration due to unresponsiveness and sudden policy changes.

As a result, some sellers are looking beyond Amazon. Four sellers Digiday interviewed — all of whom wanted to remain anonymous — now plan to move at least some merchandise away from Amazon to sell on Walmart, eBay or Etsy on the grounds that they cannot predict when Amazon might suspend their accounts or become stricter in its policies.

“Amazon, ever customer-centric, has become known as a bully among small businesses,” said one seller who launched his small-appliance business on Amazon three years ago but now wants to expand to Walmart. “As the platform has warmed up to bigger brands, it’s gotten so controlling and impersonal.”

A clothing seller was suspended in a few days after one of the packages he sent out to a buyer got lost in the mail and was never received.

“I make good money on Amazon,” he said, “but it’s a safe bet to also be on a platform like Walmart or eBay.”

All sellers Digiday spoke to insisted on anonymity to avoid potential negative consequences.

“They come across as a company that is so cutthroat, like ‘We will hunt you down and find anyone who said anything bad,’” said one of the sellers. Amazon did not respond in time for publication.

A recent study from online retailer pricing vendor Feedvisor found that out of 1,200 sellers on Amazon, 36 percent planned to sell on Walmart.com, 27 percent on eBay and 26 percent through Shopify. Thirty-eight percent of sellers are concerned with Amazon competing with their business, 33 percent with marketplace fees and 24 percent with Amazon taking away seller privileges.

When a seller’s defect order rate reaches 1 percent, its account is immediately deactivated and they have to appeal to reinstate it. Amazon holds all money until every order is shipped and received, and the access to a seller customer service phone number disappears. “I was just given this generic email that says, ‘We’ve suspended your account,’” one seller said.

“The big brands bring in the most money while the small businesses round out Amazons vision of taking over as the largest online marketplace,” said one seller.

In Amazon seller forums and dedicated Amazon Facebook groups, sellers have long critiqued the platform for unfairly suspending accounts, not communicating effectively, issues with counterfeit items and taking over an entire segments with its own private label brands. The latest strife is about a new payment method Amazon introduced in August called “Pay by Invoice,” which caters to corporate customers by allotting them a pay period of 30 days. Small businesses are used to getting paid in two weeks, and the new option squeezes their resources, one seller said.

Walmart and eBay have been making small efforts to win over such businesses. Earlier this month, Walmart made returns easier for sellers and buyers. At the same time, eBay expanded its Retail Revival program, a training effort for small businesses.

“Some [sellers] may add these other marketplaces to their Amazon business,” said James Thompson, partner at agency Buy Box Experts, “but as most will quickly find, the amount of work needed to run a Walmart or eBay store is about the same as Amazon, but the sales revenue is less than 10 percent of what they would earn on Amazon for the same amount of work.”

The post For some small sellers, Amazon loses its luster appeared first on Digiday.

Managing a healthy work-life balance is important — especially at an agency where staffers are often expected to be on call to meet clients’ needs at all hours. In the latest in our Confessions series, in which we exchange anonymity for candor, a young ad agency platforms manger in their 20s discusses how even when they make sure to leave the office every day at 5:30 p.m., they still get thrown shade from their colleagues for doing so. The conversation has been edited for clarity. 

Agencies have been known as having crazy work hours. Are hours still crazy?
The hours are insane. I know people who have meltdowns. The other day I was outside having a cigarette with a 24-year-old girl who said she’s been working 15 hours every day this week. She was stress smoking, and I’ve never seen her smoke before. I was like, ‘Why are you doing that to yourself? You’re killing yourself.’

Do you work crazy hours?
I used to work crazy hours at my old job, but it was destroying my mental health. I would work more than 50 hours a week, but it was all the stress of what was in those hours. I was the only person who did my job on the entire West Coast, and I worked for the Chicago office. I had all the clients, and it was a tons of campaigns. I would cry every Sunday night because I didn’t want the week to start.

But you made sure you put an end to excessive office hours when you moved to your current job?
When I started here, I wanted it set in stone that I work my hours, and unless someone asks me to physically stay for a project, I was going to go home. I was not going to say, ‘I can’t work overtime’ because you’ll get fired, but I wasn’t going to be one of those people always at the office even if no one asks you. So every day I get in at 8:30 a.m. and leave at 5:30 p.m.

Does that work?
Yes, nobody expects me to stay because I’ve done it since I’ve started. When people stay all the time, you’re expected to. You have to put your foot down.

Is there any backlash to that?
There’s times when people give you that side-eye like ‘oh you must not work hard because you don’t work overtime.’ And it’s like excuse me, I get my work done in my nine hours, and I’m still available by phone at all hours after work. Even if you leave for lunch at any time, you get that side-eye.

Is that mostly from your colleagues?
Yes. In the ad agency world, people who are very young stress themselves until they get sick because they want so badly to be perfect. Everyone I know who is young who works in this business is like, ‘I have to be amazing, I have to get promoted.’ Everyone who is older is so jaded. They just don’t want to work anymore. My boss works from home twice a week and takes calls from home.

Do you feel like multiple people should be doing your job?
I handle seven different parts of our client’s business. It’s crazy. I feel like there should be a manager and someone to assist them for every piece of business I work on. They don’t hire enough people. When someone goes on vacation, we have to sit down and train everybody on what we’re doing. It’s very inefficient. I think that to save money they try to cram as many of us onto as many clients and campaigns as possible.

The post Confessions of a young ad agency staffer: ‘If you leave for lunch, you get that side-eye’ appeared first on Digiday.

Magic Leap, the mixed reality startup hyped and incessantly joked about by Silicon Valley types, released its first product on Aug. 8 after years of secrecy. Cue the brand activations.

On Labor Day weekend, BET’s “Theatre of Bobby Brown” art installation in Atlanta incorporated Magic Leap into the experience. While standing in line, guests were invited to put on the headset and see a virtual Bobby Brown. A golden record then appeared and users could “put their finger on it” to spin it and play a Bobby Brown song.

“We reimagined the line and what people could do while waiting to enter the experience. Technology is redefining how brands find and use their voice so we decided to use Magic Leap to add a dimension to captivate audiences via mixed reality even before entering the installation,” said Tricia Clarke-Stone, CEO of WP Narrative.

Magic Leap, the company, wasn’t involved. WP Narrative, the branding and content agency behind the installation, had put themselves on the waitlist for the product, and for $2,295, the agency secured its own this month. The team said they haven’t seen any other brands using the technology yet, and certainly not beside a 30-foot Bobby Brown head.

For Magic Leap, any brand activation is free publicity for its product. Though, that may not be great for a product that’s still in its early days. Unlike Snap’s Spectacles which are intended for any Snapchat user or recent VR headsets that come with a bunch of different games, Magic Leap doesn’t have much to offer so it’s been keeping its marketing strategy small and focused, with an emphasis on developers.

“Over the last two years I’ve been here, the focus has been orienting around a mission that our creator community would want to be a part of. Now that we’ve launched, our whole focus is on engaging and empowering developers, builders and other creators,” said Brenda Freeman, Magic Leap’s chief marketing officer. “Our mission is tied to a broader and more optimistic view of where technology can take us. We’re not focused on the next quarter, but the next quarter century, opening up a whole new world of how the digital world can seamlessly interact with our physical reality.”

Meanwhile, Magic Leap gave a handful of reporters early access to its first device. In their reviews, the journalists were unimpressed, for the most part. The Verge’s Adi Robertson wrote, “It’s not the kind of revolutionary (or downright magical) advance that Magic Leap has teased for years.” Washington Post’s Geoffrey Fowler wrote in his unauthorized review, “Right now, Magic Leap isn’t even a very good parlor trick.”

Outside of the tech reporter bubble, others in the developer community have praised the device. Cathy Hackl, futurist at You Are Here Labs and co-author of “Marketing New Realities: An Introduction to VR & AR Marketing Branding and Communications,” said it’s the best augmented reality, mixed reality device on the market. Hackl said she found it to be more comfortable than Microsoft’s HoloLens and has a wider field of view.

But Magic Leap is not for every consumer with $2,295 to spare. That doesn’t prevent brands from experimenting. Wayfair lets Magic Leap users place virtual furniture in front of them. The National Basketball Association created an app for Magic Leap featuring Lebron James dunking in front of the user.

“If there’s one uniting theme around the folks we’re working with, like Wayfair, the NBA and many other brands, it’s a desire and a focus on disrupting their respective categories,” Freeman said.

The NBA has bigger plans for the headset beyond its current app.

“Eventually, the game could be available streaming on your coffee table as though you were a giant looking into the arena from above,” Jeff Marsilio, the NBA’s senior vice president of global media distribution, told Recode earlier this year.

Still, some users are just happy with seeing flying whales.

WOW ML1! You never cease to amaze me! Beautiful!!! Thank you! #MagicLeap #FlyingWhales #FreeYourMind pic.twitter.com/XkX1w1WJcM

— DarcioB (@darciob) August 31, 2018

For now, Magic Leap has been catering its marketing to its early users. That focus on customer service included working with Enjoy, a startup founded by Apple’s former retail head Ron Johnson that provides specialists to visit purchasers’ homes and help with setup.

“The way they deliver the headset is some of the best marketing I’ve seen. Instead of someone purchasing a box and trying to figure out on their own, this really impressed me and has created very positive word of mouth in the industry,” Hackl said.

More consumers will have a chance to experience Magic Leap once they appear in AT&T stores in the future. The startup signed a deal with AT&T to be the exclusive wireless distributor of the device.

“We want to build brand love by empowering people to experiment right now, even as we also build relationships oriented toward higher-level objectives and longer-term opportunities. We need amazing creators with vision and ambition to take this journey with us, and AT&T is a perfect example of a partner who will help us build,” Freeman said.

To continue its work with this community, Magic Leap will host a conference in Los Angeles in October.

The post Magic Leap’s marketing strategy focuses on developers, but brands are advocating through experiential appeared first on Digiday.

Immediate Media, publisher of titles including Top Gear and Radio Times, has strengthened its food portfolio with the acquisition of BBC Good Food from BBC Studios this week, with an eye toward growing revenue opportunities beyond advertising.

The 40-odd staff from Good Food will move over to Immediate Media’s offices in the coming weeks and will create a group to house the other food titles under its portfolio. Immediate said it does not plan any staff cuts as part of the deal.

BBC Good Food brings with it a strong events arm: BBC Good Food Show. These regular roadshows with the U.K.’s top chefs, tastings, shopping and entertainment, attract 300,000 visitors who spend £27 million ($35 million) at the Shows, according to event organizers, River Street Events. BBC Good Food also has a popular Amazon Alexa recipe skill which will enhance Immediate’s opportunities in the audio space.

Immediate has diverse revenue streams across the portfolio through affiliate links, selling bikes and TV shopping businesses tied to its craft magazines. The opportunities for Good Food brand extensions through selling kitchenware to TV cookery shows are ample.

“We’ve grown fast when other publishers from a magazine heritage have not had an easy time of it. Our success is that we’re laser focussed on special-interest communities,” Immediate Media CEO Tom Bureau said. “There are wars on consumer attention and if you focus on the stuff people love doing you have a strong strategic platform for growth. In a large market, there’s huge commercial opportunity.”

This marks Immediate Media’s sixth significant acquisition since 2011 as part of the company’s focus on passion areas. Immediate has nearly 80 special-interest titles under its stable including wedding magazine Hitched, Cycling News and Simply Knitting. Specialist titles may not be the most flashy, but they are strong profit drivers during otherwise turbulent times for media.

“Under Immediate Good Food will be able to commercialize its reach more effectively,” said Alex DeGroote, an independent media analyst. “Mature magazine companies [like Immediate Media and Future] are very profitable. Immediate Media loves solid, unglamorous titles in secure market positions. There are few competitive threats and the demographic is skewed to the older reader. Special-interest brands typically have high subscriptions and low churn.”

According to the Auditing Bureau of Circulations, BBC Good Food has a monthly subscription circulation of over 200,000. As Digiday has previously reported, a subscription-focused business can command a price eight to 12 times its earnings, while an ad-supported business might fetch a price four to seven times.

According to Similar Web stats, BBC Good Food has 18 million monthly unique visitors on desktop and mobile, with around 85 percent of traffic coming from search, and ranks 14th in the world for the food and drink category. In the food and drink category, Immediate Media already has recipe and review title Olive, which has just shy of 1 million monthly unique visitors on desktop and mobile, according to Similar Web.

In 2011 Immediate Media licensed a number of magazines from BBC Studios, the commercial arm of the BBC, including BBC Gardeners’ World and Top Gear so has sold the ads for Good Food for years. According to Douglas McCabe, CEO at Enders Analysis, the transition of BBC Good Food under the Immediate umbrella has been a long time coming. “It’s a great brand — in print, online and as a live event — and understandable that BBC Studios would want to hang on to it, but in the end Immediate Media provides a more natural home.”

In 2017, BBC Studios made £157 million ($203 million) in profit. BBC Good Food might be an iconic title but its numbers are tiny compared to BBC Studio production revenues, DeGroote points out.

The investment indicates an increased confidence in the industry, said Liz Duff, head of media and investment at media agency Total Media. “Does it indicate that the return to context is gathering pace, and is being reflected in ad revenues? A brand safe environment with great content will surely be of interest to advertisers, and the move is one that agencies will welcome,” she said.

The post Inside Immediate Media’s BBC Good Food acquisition appeared first on Digiday.

Eamonn Store is CEO at FairShare, an independent agency, and a former WPP exec

While perhaps anti-climatic, the news of Mark Read’s official appointment to the job he’s being unofficially doing for some months now will likely be welcomed with a cautious optimism from the financial and media community.

The optimism is deserved, as Read is an intelligent, strategic and considered leader, who has an understanding and perspective of the politics and nuances of the WPP leadership hierarchy. On the business side, WPP can expect some more decisive moves. Martin Sorrell seemed increasingly blinded by a combination of ego and denial.

We can expect to see a winnowed WPP leadership group, finally freed from the fiefdoms and self-preserving alliances, with a tighter and more contemporary leadership team prepared to streamline this vast holding company with rational reasoning. We can expect to see this group reform quickly with some much needed mergers of old agency brands that have been in steady decline since the Mad Men era. Y&R into VML is an openly discussed no-brainer. Perhaps some form of merger of JWT into Wunderman and a complete overhaul of GroupM, perhaps even a move towards the re-bundling of media and creative services. Let’s face it, it’s early days but the merger of Maxus and MEC into Wavemaker has not exactly got off to a flying start.

Beyond this much needed reformation, Read has a much greater opportunity as a straight-talking, less egotistical leader to put greater purpose back into marketing communications. WPP has been about only two things: baseline growth and increased margin. It’s why the holding company enjoys something in region of 40 percent staff turnover, with the top 1 percent compensated in a manner that handcuffs them with material wealth but limited personal fulfillment. Meanwhile the young blood has jumped ship for better life balance and hipster ways of the social media giants.

Read has a very real opportunity to open up the windows and refresh this rather stuffy house. A chief purpose officer should sit on a par to agency CEOs to challenge the authenticity of how WPP agencies lead their clients, partners and people. In too many instances the very character that built these great agencies has checked out and been replaced with bean-counters and internally facing politicians. This needs to change. In an industry significantly weakened by transparency issues across the board, straight-talking and jargon-free simplified contractual agreements in clear language can go a long way.

With its media clout and client base, WPP could genuinely solve hunger in America, make a serious dent in addressing the opioid crisis in America, or have a very real impact in addressing one of the greatest threats to society: mental health. WPP can move beyond the rote sustainability reports and instead focus on having a real impact on these issues, such as mental health, that are deeply meaningful and truly resonate with its people and partners. And it can do all of this with profit.

It is abundantly clear that a very significant portion of corporate America is focused on social impact. Changing customer and business partner behavior demands it. Currently, too many good intentions are wrapped up in self-serving corporate comms and retrofitting of existing work into bodies such as the UN Strategic Development Goals. We’ve all seen it. As the likes of Mark Benioff, Indra Nooyi, and Paul Polman have already testified, purpose and profit can work hand in hand. The future of solving societal issues is heavily reliant on profitable commercial progress. It’s not just acceptable but essential for corporate business to do well from doing good.

Now is the time for WPP to step to the front of the pack, to have the most ambitious progressive agenda where purpose has a genuine place at the table alongside profit. It would be a bold move. Alongside its peers, WPP needs to attract and retain the best talent at all levels. Standing more clearly on specific societal and environmental issues will polarize some but will connect more deeply with the 84 percent of employees who claim loyalty to companies who care about their community, according to WPP’s own Kantar.

With patience, the investors and clients that matter will reward this greater ambition, integrity and boldness. With this renewed focus, WPP has nothing to lose and everything to gain.

The post Opinion: As new WPP CEO, Mark Read should reform WPP around purpose appeared first on Digiday.

As customer acquisition costs through Facebook and Google rise, retailers are turning to publishers for help.

Affiliate partnerships with publishers is becoming an increasingly appealing solution for retailers to drive traffic to their sites with editor endorsements, while riding the coattails of media companies’ SEO rankings. They’re hiring companies like Narrativ and VigLink to get the traffic from products they carry when they’re linked by publishers, using technology that optimizes for the best price and ensures that shoppers don’t arrive at dead links or expired product pages. According to one technology partner manager, one retailer saw commission on clicks increase from 3 to 14 percent after focusing in on affiliate revenue as a customer acquisition tool.

It’s a game Amazon’s already been playing, and winning. Publishers often favor Amazon links (BuzzFeed dedicates entire listicles to the retailer) because it reliably drives readers to live product pages, shares data with content creators around what performs and pays publishers a better commission rate than competitors – 20 percent per click versus a 5 percent average, according to Narrativ.

As other multi-brand retailers wake up to the revenue and traffic potential that affiliate links unlock, they’re hoping to loosen Amazon’s grip on the market.

“Amazon’s continued and increasing dominance is causing almost all retailers to scramble and try to win as much competitive traffic from content publishers as possible,” said an exec at a technology vendor that works with retailers on affiliate marketing. “To fight Amazon, retailers are using publishers as a means to improve their e-commerce share.”

Affiliate advertising, worth $7 billion, is a tiny industry compared to search advertising, worth $95 billion. But affiliate links are much easier to scale while maintaining cost. Amazon patented its affiliate linking technology at the same time that it patented its one-click checkout, and those affiliate links now drive about 650 million visitors to Amazon per month.

“Publishers are looking for revenue outside of traditional advertising, and affiliate links act like windows to retailers that are competing for traffic online,” said Shirley Chen, founder and CEO of Narrativ. “Retailers have invested so much into partners like Facebook to retarget customers while taking no active role in affiliate linking. Amazon’s gone unchecked in owning this area, but I think we’ll see that start to change.”

Overheard
“The traditional agency model feels like a generic service, not a partnership. No brand is looking for that today.”
–Deanne Bedoya, senior director of brand marketing and creative services, Lucky Brand

What we’ve covered
For some customers, free coffee is worth giving up some personal data. The Japanese coffee chain Shiru Cafe, which has 21 stores located mostly in Japan and India, launched its first U.S. location in Providence, Rhode Island, at the Brown University campus earlier this year. To access free coffee, customers have to be students or faculty members who provide personal data including their names, dates of birth and work experience through an online registration process. The company is now planning to expand to more U.S. locations by end of the year.

Amazon wants to leave marketers without doubt that its ads are better than those of its rivals at driving sales on its sites. The retailer is testing its Amazon Attribution tool, which lets advertisers compare whether ads on its sites are more effective than those on its rivals. Only those advertisers that sell on Amazon, rather than through it, are being invited to the free trial. Competition for search rankings on Amazon is getting harder as more advertisers compete, forcing some to look elsewhere for traffic.

Emerging designers, particularly those who have built up social media followings, are now seen as keys that can unlock a new customer for the retailers that carry them. Online retailers like Net-a-Porter, MatchesFashion, Moda Operandi and the e-commerce sites of luxury department stores are competing on newness, exclusivity and an ability to discover the next big names in fashion to give customers a reason to shop there and to keep coming back.

As fashion companies, including Gucci, DVF and Milly, pull back on wholesale channels in favor of working more directly with consumers, department stores are strategizing to give them what they want — often, an opportunity to tell consumers who they are and why they’re worth shopping. An increasingly common fix is the promise of a sales staff well-trained on the brand’s product and backstory.

By the numbers
Forrester released its 2018 retail forecast last week. Here are the numbers to know.

• $3.7 trillion – total retail sales
• $1.4 trillion – retail sales influenced by digital
• $507 billion – online retail sales
• $118 billion – mobile retail sales, 23 percent of total online retail sales

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The post Retail Briefing: Retailers are trying to loosen Amazon’s grip on affiliate revenue appeared first on Digiday.

The rapid growth and consumption of Instagram Stories has made it hard for advertisers to ignore, even if they have reservations over whether they can match the high-end, premium content on the platform. Spending is shifting to Instagram, with brands like Smirnoff, Nike and Stella Artois starting to spend more money on the vertical video format.

Here is the state of advertising on Instagram Stories, in five charts

Advertisers are shifting ad dollars to Instagram due to Instagram Stories
Ad budgets are flowing into Instagram. Instagram ad spending is growing at a rapid rate thanks to the rise of Instagram Stories. Instagram accounted for 23 percent as much spend as Facebook in the second quarter, according to Merkle’s analysis of own clients’ spend.

Smirnoff’s increased advertising on Instagram Stories in 2018, for example, is funded by incremental growth of its social media budget, even though Facebook’s viewability issues are an ongoing concern, said Jay Sethi, vp of Smirnoff in the U.S.

The price of impressions on Instagram has fallen despite greater competition for them
The Stories format has lured more advertisers over to Instagram, but the ones that were already there aren’t seeing the cost of impressions rise as a result of the competition. After a rise in 2017, average cost per thousand impressions over the first six months of 2018 is $4.91, according to analytics firm Brand Networks’ analysis of its clients’ spend.

In some cases, buying ads in Instagram Stories has been cheaper than buying them in Facebook’s feed, said Catherine Chappell, paid social account director at iProspect,

“We see CPCs 125 percent higher on Instagram over Facebook,” said one media buyer on condition of anonymity. “From an acquisition perspective also, CPAs are over triple on Instagram compared to Facebook.”

Instagram Stories aren’t great for reach for brands
Posts that aren’t Instagram Stories generate three times more reach on average compared to those that are, according to analytics firm’s Delmondo’s study of Instagram data from more than 5,000 Stories over the summer. The lack of reach is offset by the fact that someone touches a story to view it, the branded content takes over the whole screen, agency executives have said.

More Instagram Stories from brands are being played all the way through
The completion rate for Instagram Stories from brands grew for the first five months of 2018 from 63 percent to 71 percent, according to Delmondo. Stories on sports organizations, brands and entertainment companies usually serve content to a more niche, impassioned audience, said Delmondo’s CEO Nick Cicero.

“Experimenting with the format and the creative on it has been key to successful campaigns, said Cat Turner, chief creative officer at agency CULT, as has not taking the consumer too far from their environment, but delighting them enough to stop and engage.”

Instagram is winning over younger age groups
More than six in 10 (63 percent) 16- to 34-year-olds on Instagram and Snapchat watch Stories on both platforms daily, per a VidMob study of 1,000 16- to 24-year-olds and 1,000 25- to 34-year-olds in the U.K. between May 14 and May 23, 2018. Instagram, however, is the place millennials are more likely to watch Stories. About 68 percent of millennials on Instagram watch Stories, per VidMob, compared to 49 percent on Snapchat.

“If you attend an event and want to share it with your friends, would you post it on your feed? It’s more likely that you’d share it as a story,” said Leah Forsyth, managing director at independent creative agency HarrimanSteel. “Sharing a story is starting a dialogue. You’re letting people in, and there’s an invitation to respond. With the layer of gifs and filters, you also get to create a personalized, animated layer, and this allows for rich expression.”

The post The state of advertising on Instagram Stories in five charts appeared first on Digiday.