Month: October 2018

WPP Group CEO Mark Read has made clear the advertising group will need to become slimmer and nimbler. He put this post-Martin Sorrell talk into action last with the combination of Y&R and VML to form the ungainly VMLY&R. Left untouched: Wunderman, once thought of the déclassé below-the-line arm of the flashier Y&R.

In fact, Wunderman, which Read helmed for three years, has cemented its position as an esteemed arm within the holding company. What’s helped lead that charge is a bet on the importance of digital and commerce and notably Amazon as the supreme leader in that category. Sorrell had repeatedly said Amazon is what kept him up at night. Embracing that nightmare, rather than avoiding, has seemingly paid off as Wunderman Commerce remains an expert of $2.2 billion advertising company going up against the duopoly of Facebook and Google and a stronghold within WPP. That’s been made clear by Read’s promotion and a slew of acquisitions made by Wunderman over the last year. Wunderman Commerce started in June 2017 as new division that included Salmon, an agency WPP acquired in 2013. At that time, Salmon had 850 employees. Now, there’s about 1,300 within Wunderman Commerce globally (Wunderman overall has more than 9,000 employees.)

“Any leadership change can disrupt, but I think it underpins the success that both of those individuals have been involved in,” said Neil Stewart, CEO of Wunderman Commerce.

Raj Nijjer, vp of new business at commerce marketing cloud YotPo, said his company has been working with Gorilla Group, Wunderman’s recent acquisition, and plans to “double down” on that collaboration over the next year because of the strength he sees in WPP.

“Wunderman wants to cater to the digital natives because they’re seeing agencies are coming in and serving them end to end. It’s consolidation not just in direct to consumer brands, but the agencies that serve these brands. Wunderman wants to own that identity, digital-first, digital-native companies. They’re making all the right moves and doing the right things. A lot of time it’s just speak, speak, speak. We see how they serve customers,” Nijjer said.

Sixteen years ago, Stewart said his agency Salmon — which came under Wunderman Commerce in June 2017 — kept talking to clients about the rise of ecommerce. At the time, that meant convincing brands to implement online order, in-store pickup. Now, that’s a quite obvious need and it’s implemented in Walmart and other stores. Another common behavior is consumers shopping on Amazon, and yet, over the last five or so years, the agency has been focused on reminding and helping brands work with the tech giant.

“Brands’ view of commerce five years ago was content. How do I get my content on Amazon? But for us, it was always about sale. It’s brave not to be [on Amazon] but at least have a strategy, have a strategy across the channels. They’re not to be ignored; they’re there to be understood,” Stewart said.

Wunderman Commerce sells brands its expertise in tech giants like Amazon as well as the need to have a multichannel approach. To broaden the services within Wunderman Commerce, WPP has made several big acquisitions of other agencies. Last month, Wunderman bought commerce agency Gorilla Group. Earlier this month, it acquired ecommerce agency 2Sales. This week, it secured a majority stake in marketing performance company Emark. Back in May 2017, Marketplace Ignition was one of the agency’s most important buys for elevating the work within Amazon, Stewart said..

Marketplace Ignition “knew the complexity of selling on Amazon. It wasn’t just put on the estate. It was strategy of the content, strategy around logistics, making sure the right products are available at the time because if not you’re wasting your media dollars,” Stewart said.

An issue that brands continue to face is mismanagement internally on how media is bought across commerce platforms. Some brands end up outbidding themselves, Stewart said.

“Fridges will bid against washing machines for a brand, for example. What we’re trying to do is a consistent strategy across all the channels so they get consistent media spend and customer acquisition,” Stewart said.

Even though Amazon has attempted to make its advertising offerings a bit simpler, Stewart said Wunderman Commerce hasn’t seen much reaction from clients. For one, clients are somewhat shielded from the simplification, Stewart said, and his agency provides much more than using the Amazon-owned technology. Wunderman brands themselves as “practitioners” that understand the evolving system.

“Clients are still getting their head around a broader media mix. We know what goes on with Facebook, Instagram and Google, but now other hills arrived. There’s another major search engine that’s one click from purchase,” Stewart said, referencing Amazon.

Of course, Wunderman Commerce isn’t the only agency focused on Amazon and the greater retail system on-and offline. There’s other big global marketing agencies as well as consultancies. Yet Stewart said he keeps his eyes on smaller agencies, under 50 employees, located in other European countries, that are focused on specific marketplaces. To him, those competitors are also potential acquisitions. As to the consultancies, Stewart said his agency cares more about creative and longevity, not just immediate dollar signs. Indeed, the agency’s slogan is “combining creativity with data” and “powered by commerce,” Stewart added.

“We’re thinking about the consumer change. Our organizational strategy is one of enablement. We’re not Accenture. We’re not Deloitte. We see our job as helping brands increase their sales. The perception in the market is you enable a client, you lose a client, but that’s not true,” Stewart said.

Looking ahead, Stewart has his eyes set on expanding the business internationally. Asia is at the front of mind. The structure looks a bit different, notably in the strength of Alibaba and other ecommerce platforms not named Amazon. Stewart said he also wants to grow in Latin America. Amazon has been investing in that region, as well, competing against MercadoLibre.

Amazon has helped strengthen Wunderman as it studies its services, growing as the tech giant does amid the rise of ecommerce and the disruption of duopoly.

“WPP is figuring out how do we help these digital natives who have thrived off advertising on Facebook and Instagram. They need end-to-end commerce. These brands have to figure out how to market, sell, ship, entire end-to-end mini Amazons. They can’t build it all in-house,” said Nijjer of Yotpo.

Still, Amazon remains a threat to the very brands Wunderman Commerce helps and therefore to the agency itself.

“If all the brands die because Amazon kills them all, we’re dead,” Stewart said “Our job is to make sure brands are successful. Without that we don’t have a customer base.”

The post With Wunderman Commerce, WPP bets on Amazon services appeared first on Digiday.

In October 2017, Julien Genestoux decided that his boss at Medium, Ev Williams, wasn’t thinking big enough.

Genestoux, a software engineer, had been working at the blogging platform since it acquired his startup, Superfeedr, in 2016, and thought a lot about how blockchain could be integrated into his new company, either to facilitate payments, preserve the site’s archives, or even help with the curation and article recommendations.

The post Blockchain fever is here. Now what? appeared first on Digiday.

Commercial broadcaster ITV has been building out its addressable TV offering, but it’s been a slow burn on linear TV partly due to finding the right tech partner.

Currently, the broadcaster offers targeted ads on its on-demand and catch-up service, ITV Hub, which has 27 million subscribers. ITV announced last November it was working with an ad tech firm to help it serve ads relevant to viewers’ interests, demographics and lifestyles through connected TVs but has since cut ties with them.

“There isn’t the tech out there we’re comfortable in using for addressable in a linear environment,” said Simon Daglish, group commercial director at ITV at the New Video Frontiers conference in London this week.

ITV is aware it needs the technology to build out its linear addressable TV solutions, either through acquisition — it lost out to Singtel in the bid for Videology — or partnering with others. It’s also working with other commercial broadcasters, such as Channel 4 and Channel 5, on addressable TV products and ways to share data that will strengthen its position against Facebook and Google, although Daglish couldn’t share details.

Through ITV Hub, the broadcaster can offer regionalized targeted ads, although the analytics have been kept within its own walled garden, a bone of contention for buyers. Hub is a “major source” of revenue, said Daglish, and it’s continuing to grow 54 percent this year. According to investment analysts, Liberum, ITV’s targeted ads now make up more than 50 percent of ITV’s online video-on-demand offering.

“That is a significant move in our direction and significant move in our targeting of Google and Facebook and taking them on at their own game,” said Daglish. “The difference between Facebook’s highly targeted ads and TV is that we have great content. We see Facebook and Google as they see us; we’re going to go after their revenue.”

Liberum also estimates that due to ITV’s diversification efforts into VOD, content production and what ITV calls direct to consumer (events, products and licensing), will generate nearly 45 percent of its future earnings growth. Previously, Daglish said 80 percent of ITV’s revenue came from advertising, it plans to get this down to half in the next 18 months.

Jonathan Wait, head of product at Dentsu Aegis agency Amplify said ITV’s addressable progress has been slow, with little movement in the last year, and it largely trades on a direct basis with ITV Hub as its programmatic offering is not yet attractive enough.

“The issue with most broadcaster programmatic VOD offering is that the benefit doesn’t outweigh the cost; the CPMs are the same as buying direct,” he said. “The added DSP and tech fees on both sides make it more expensive for advertisers, so it doesn’t make a lot of sense right now.”

Waite said the tech fees add on between 5 and 10 percent to the CPM, which range between £25 ($32) and £30 ($38.94) depending on the supplier and level of targeting. Another layer of data, either first-party broadcaster data or linking with agency IDs, will justify this cost.

“From a planning and buying point of view, there’s a disconnect from what you’re doing; buying programmatically ties into the rest of your digital activity,” he said. “You can frequency control and cap across suppliers, report back on attribution. The more done outside the ecosystem, the harder it is to do, while clients are asking for more efficiency.”

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The post How ITV is pushing into addressable TV advertising appeared first on Digiday.

Despite the risks it poses to their businesses, publishers have now applied its consent standards to their U.S. audiences in an effort to avoid compliance issues, simplify audience data collection, and avoid last minute scrambles to adhere to the new privacy law passed in California.

According to a recent Digiday survey of 91 publishing executives, almost half  — 47 percent —  of U.S. publishers are applying GDPR standards to their U.S. audiences

The post Digiday Research: Almost half of US publishers are now applying GDPR standards to US audiences appeared first on Digiday.

Turns out the bed-in-a-box brands have been ignoring the Hispanic market.

At least, that’s the bet Nectar Sleep, one of the wave of DTC mattress brands that have sprung up recently, is making: going all in on the U.S. Hispanic population.

Nectar Sleep, which launched in 2017 as the more affordable sister brand to luxury mattress retailer DreamCloud, sees potential for long-term growth by targeting the Hispanic demographic in the country. It’s a $1.5 trillion market, according to data from The Selig Center for Economic Growth, and with current revenues of $300 million per year, Nectar Sleep is priming to scale by building brand loyalty with what they believe to be an under-penetrated consumer group.

To lead the strategy, Nectar hired Jose Romero in July as its first business head of the U.S. Hispanic division. The brand’s Spanish-language site, Colchones Nectar, launched this week.

“The Hispanic market is not addressed by our competitors with messaging and marketing in a way that’s specific. So the competition is reduced and we can deliver our message at a lower cost to acquire customers,” said DreamCloud CEO Craig Schmeizer. “But this isn’t about fighting for growth. This is about building brand loyalty in a market that has been overlooked by mattress and furniture companies.”

Nectar Sleep is fighting for growth, however, in an industry that has been flooded by e-commerce options: Casper, Leesa, Tuft & Needle, Purple, Saatva, Sapira, Helix, 4Sleep, Eve and Bear are all competing for market share and attempting to scale both online and offline. And as of Monday, the mattress industry, valued at $29 billion in 2017 according to Cohen, gained another competitor: Amazon released its first private-label bed-in-a-box to the market.

“These brands are catering to the busy urban, millennial lifestyle, and now, they’re looking at new growth engines [as they are] facing tougher competition with the entrance of Amazon into the mattress market,” said CB Insights analyst Thomas Sineau.

For DreamCloud, which Schmeizer said became profitable last year, raising only a small amount of venture capital ($10 million to date) and differentiating the business’ lines of revenue across distribution channels and brands have helped insulate it from partaking in a customer-acquisition spend contest in order to scale. DreamCloud consists of its namesake brand, Nectar Sleep and Level Sleep, a B2B mattress company selling primarily to chiropractors.

Differentiating Nectar Sleep’s demographic appeal is the next step. Schmeizer laid out the brand’s business playbook for tapping into the Hispanic market in the U.S.: Hire a dedicated team covering internal operations as well as customer service and sales, launch a Spanish-language website and flesh out its paid and organic social media strategies to appeal to the market across Facebook, Instagram and Twitter.

In addition to hiring Romero, Nectar grew its Spanish-language speaking customer service team from a group of six to 10, and, according to Romero, will build out a more specialized marketing team overtime as it tracks the progress of the demographic expansion. On the marketing front, the brand will bet on Spanish adwords and target Hispanics specifically on social media by income, product preference and location. The brand also plans to work with an outside agency in order to add creative that appeals to a Hispanic audience. More than just targeting the Spanish-speaking audience, Romero said that the marketing and customer service strategy will appeal directly to Hispanic culture.

“This is a long-term loyalty play, because this is an audience that, culturally, puts much more stock in recommendations, so word-of-mouth becomes a very powerful tool for the brand,” said Byron Beach, the digital social strategy leader at multicultural marketing agency Orci. “If you do it right, this audience is more loyal than the general market. So you build a highly valuable asset.”

To gear up for the launch of Spanish-language customer service, the new site and the marketing push, Schmeizer said that the DreamCloud team spent two months training its global team of 200 on the new initiative to make sure that there was a unified brand mission around the incentive, not just a weak-willed pivot to milk money out of an untapped demographic. He also said that overall, marketing spend went up to $100,000 annually (an increase year-over-year, although he didn’t share specifically how much) in order to properly invest in new performance marketing.

“The costs, we believe, will be more than made up for by addressing this sizable market and building brand loyalty,” said Schmeizer. “Because it’s been underserved we hope that there’s market pay off.”

By differentiating its demographic targeting to include the Hispanic market, Nectar is preparing for its next phase of growth: international. It’s launching in the U.K. this year, and using its push for the Hispanic market in the U.S. as an early test for launching in Latin America next.

“We need to be part of the community,” said Romero. “This is a very important demographic that can be fiercely loyal.”

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The post How Nectar Sleep is appealing to the Hispanic market appeared first on Digiday.

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