Month: November 2018

A weekly comic strip from AdExchanger that highlights the digital advertising ecosystem… AdExchanger: Origins AdExchanger: Crisis In Ad City (Part I) AdExchanger: Crisis In Ad City (Part II) AdExchanger: Enter Malware (Part I) AdExchanger: Enter Malware (Part II) AdExchanger: Enter Malware (Part III) AdExchanger: Enter Malware (The Conclusion) AdExchanger: Angels And Startups AdExchanger: Rumble In Arbitrage Plaza… Continue reading »

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. iHeart Apple Music Apple is exploring an equity stake with debt-saddled radio giant iHeartMedia in the hopes of boosting its presence in the audio streaming space. Talks are preliminary, but people familiar with the discussions say a potential stake may be worth tens of… Continue reading »

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At a time when the shine has slightly come off of niche video streaming services and video industry insiders weigh whether it’s even possible for smaller services to thrive in a market dominated by Netflix and other streaming heavyweights, anime-focused Crunchyroll continues to push ahead — and has crossed 2 million paying subscribers.

This makes Crunchyroll, which is owned by AT&T through its Otter Media arm, a top 10 subscription video streaming service. And WarnerMedia sources say it’s a valued asset — along with Otter Media in general — for its parent companies, which recently closed down DramaFever and FilmStruck, in part, because those services lacked a sufficient amount of scale.

There are multiple factors, including exclusive programming that caters to a broader audience, a foray into linear TV, and a growing events business, that helped Crunchyroll double subscribers since February 2017, the last time the company publicly reported subscription numbers, said Brady McCollum, head of business operations for Crunchyroll.

Today, Crunchyroll’s library offers more than 1,100 anime titles and more than 40,000 episodes, available across eight different languages. Exclusive rights to shows such as “Dragon Ball Super,” “Attack on Titan” and “Naruto Shippuden” has helped Crunchyroll reach people beyond hardcore anime fans, McCollum said. The series finale of “Dragon Ball Super,” for instance, was watched by 2.9 million viewers, which puts it on par with some popular cable series on premium networks such as HBO, FX and AMC Networks.

“We have a handful of tentpole shows every year that go beyond the core audience toward a broader audience,” McCollum said. “With ‘Dragon Ball,’ there’s a nostalgia factor with some people.”

Next up for Crunchyroll are its own original series, for which it’s set up a 75-person production division with two new facilities in Los Angeles and Tokyo. The company’s first original series, “High Guardian Spice,” will premiere next year. Crunchyroll expects original programming to help drive new subscriptions — and retain existing users, McCollum said. “We continue to look for the right stories that are more keyed toward western audiences,” McCollum said.

Events also factor into subscriptions. In September, the company held its second Crunchyroll Expo, which attracted 45,000 people through the turnstiles, up from 35,000 the previous year, the company said. In addition to its owned events, Crunchyroll maintains a presence at more than 100 anime- and gaming-focused events around the world every year.

“Events allow us to connect with the audience in real life and learn their interests and promote the service,” McCollum said.

Crunchyroll is available in three tiers: free with ads, a premium ad-free subscription priced at $6.95 per month and bundled with distribution platform Vrv, which is also owned by Otter Media, for $9.99 per month. (The Vrv bundle is largely driven by Crunchyroll’s popularity, but also includes streaming channels from Rooster Teeth, Nickelodeon, AMC Networks and Frederator.)

In addition to 2 million paying subscribers, Crunchyroll said it has 45 million registered users on its platform and 10 million monthly active users. Ad-free subscribers watch for an average of 45 minutes per day.

One thing that Crunchyroll has avoided doing is offer deep discounts and other tactics in order to goose conversions, McCollum said. “We offer a free-trial component — and that’s it,” he said. “We don’t do bargain basement type of deals because inflating numbers is unsustainable. We would much rather take the approach of continuing to build more value into the subscription.”

For Crunchyroll, the focus remains on building a multi-faceted media brand, with the video streaming platform at its core. In addition to hosting its own events, the company also sells merchandise and more recently has ventured into mobile gaming. (A second game is expected to be announced by the end of the month.)

“The market for niche services is going to continue to grow as people would rather be a part of community,” said Alan Wolk, co-founder of TVRev. “But there are only so many very committed fans in any area, so companies will always have to add onto the core offerings.”

“We want to be be something beyond just a video platform — and it’s already been super beneficial to us,” said McCollum.

Another area that Crunchyroll is exploring is linear TV. Earlier this spring, the company launched a one-hour programming block in Brazil with shows “Black Clover” and “Re:Zero” on local network Rede Brasil. More recently, it licensed “Mob Psycho 100” to Toonami, an anime-themed programming block on Cartoon Network in the U.S.

“We will continue to super-serve fans, but we also want to keep providing additional entry points for more casual fans,” said McCollum.

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To anybody working at an agency, not all clients are going to be sunshine and rainbows. For the latest in our Confessions series, where we exchange anonymity for candor, Digiday spoke with a young ad agency staffer about clients taking advantage of their agency’s time and services.

When working with clients, what is your most common feeling?
Panic, because clients are never happy. Some clients need a lot of hand-holding. It’s really difficult and sometimes feels overwhelming. You want to keep your client happy, but sometimes they just cross the line. There are certain things we are tasked with doing, and when it gets outside of that, it’s sometimes hard to know where to draw the line.

What are clients asking for that cross the line?
Sometimes they’ll ask about my thoughts on something like what platform is best, but really what they are looking for is a broader strategy, and we weren’t hired to do that. We might only work with a brand on a social media campaign on Facebook, for example, and then they come to us asking us if they should spend a certain amount on one platform over another or what platforms they should consider for another campaign that we are not working on. We are not an employee of their company. We don’t want to give them all of our ideas for free, so how do you help them without overstepping?

Why do you feel that clients feel like they can ask for more?
They think that because they are paying us all this money, they can get us to do whatever they need. And sometimes they just don’t know.

What do you mean?
I don’t think it’s malicious; they just don’t get it. Some clients act like 5-year-olds. They call at all hours of the day. You feel like you have to drop everything for them; but sometimes you just can’t. I have my email notifications on my phone because if a client needs anything at any time, you better open it because if it’s important and you didn’t get it done right away, there are questions from the client the next day. It could just be a touch-up to a social post, but if it doesn’t get done, they are not happy. They also just send us way too much material. They might send us 30 video files when we only need two, so then we have to watch 30 trailers to find the right one. I’m sure they think of us the same way, thinking like “how come our agency doesn’t understand why we have to send them 30 video files?”

How do you manage that?
We try to work with clients upfront about what is involved, but sometimes it’s hard for us and for clients to anticipate what they will need, so sometimes we leave contracts broader. But we try to be as specific as we can. In the moment, we try to control it. We tell them we have only this many hours in one day and can only take so many calls. At the end of the day, we still want to make them happy, but we have to teach them to respect us as well.

Do you feel like you have enough manpower to handle your clients?
I have three clients, so not a crazy number, but that doesn’t mean that I couldn’t use more help. I could have two other people working with me and still feel overwhelmed. I don’t even know how many hours I work a week because of that.

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Connected TV ad buying largely mirrors traditional TV’s direct buying model. For now. But as connected TV platforms and ad tech firms continue to lay the programmatic pipes for traditional and over-the-top TV, agency ad buyers are tasked with determining how to adjust to the growing overlap between TV and digital video.

Traditional TV ad buyers are purchasing TV networks’ connected TV inventory as an extension of their traditional TV buys, while digital ad buyers are picking it up as a new, more premium type of digital video inventory. That’s true within agencies as well as across the multiple agencies that advertisers employ.

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Vox Media bet it could solve the puzzle of making digital media work by having distinct editorial verticals, underpinned by a common technology and sales backbone. That approach may be approaching its limits, as Vox Media has rolled tech news site Recode into its news site, Vox.com, after doing the same with fashion site Racked.com last summer.

By folding sites into Vox.com, the company grows the audience of its flagship site. Vox’s verticals represent the high-quality, safe havens that would seem to appeal to advertisers at a  time when brand safety is all the rage to talk about. But for all the talk of “well-lit environments,” ad buyers still crave scale.

Vox Media reached nearly 90 million uniques in September, putting it just behind Hearst and ahead of The New York Times and The Washington Post. But Vox.com, with 30 million uniques, ranked only 31st in the news category. The volatile news cycle also has advertisers increasingly steering clear of news, and most of Vox Media’s non-news sites are small individually. Recode itself is just over 1 million in uniques, down 51 percent year over year. (All figures are from comScore)

The company recently conducted a content audit of its sites to identify potential areas to save money and has tried to have the sites work more closely together to promote content-sharing, people familiar with the matter said. The company said Eater and Curbed have worked together on editorial content. But such opportunities are limited.

“It’s hard to be an independent publisher these days,” said John Wagner, group director of published media at PHD. “Even if you set up your programmatic exchange, direct is where you make your money. It’s definitely harder to build content around news because of the volatility in the news cycle. It’s way easier to build content around sports, food, home, etc. So that’s the challenge — how do you monetize the audience outside the exchanges?”

The Recode case also points to the risks of a personality-driven site. Recode was founded in 2014 by veteran tech journalists Kara Swisher and Walt Mossberg, and was bought in 2015 by Vox Media, particularly for its conference business. But Mossberg has since left, and Swisher is doing other things; she recently became a contributing New York Times opinion writer.

Web traffic is not everything. Vox Media has pointed out that while Recode’s traffic has declined, its podcast and conference business has grown and includes live conversations that air on MSNBC.

Vox Media reportedly was in danger of missing its $200 million revenue goal for this year, another sign that digital upstarts are struggling to live up to the high (possibly unrealistic) expectations of its investors. In February, Vox Media laid off 50 people (it employs around 900 now). Lindsay Nelson, who was recently named chief commercial officer, is leaving the company for a role at TripAdvisor. With the Recode skake-up, editor-in-chief Dan Frommer is leaving the company.

Vox Media is reliant on digital ad revenue at a time when investors are increasingly enamored with subscription- and reader-revenue-driven companies. It’s just started developing a commerce business and has no significant subscription revenue.

Vox Media has done video licensing deals with Netflix and PBS, but deals like that typically have limited upside. In Netflix’s case, the streamer wants to own original shows, which curbs the amount of money the programmer can make.

A company spokesperson said Vox Media has had “a strong year in terms of audience and revenue growth,” with a comScore audience at an all-time high. “We are confident in our ad-supported digital content, as well as a growing network of successful podcasts (62 shows to date); a rapidly rising non-fiction TV production studio (producing shows for partners including Netflix, CNN, and PBS); an ad marketplace that offers trust and scale (Concert), and developing the leading technology to enable other publishers to scale (Chorus, which recently announced the Chicago Sun-Times as a new partner).”

Concert is Vox and NBCU’s 40-company ad platform that it pitches as a way for advertisers to buy high-quality publisher content at scale. Such co-selling deals have their limits, though. Condé Nast left Concert after less than a year. Other publishers participating in Concert said its appeal is limited by the revenue cut Vox Media takes (about 30 percent).

Joy Robins, chief revenue officer of Quartz, said Quartz likes its partnership with Concert because it lets Quartz deliver senior decision-makers at scale without having to rely exclusively on the platforms.

“That said, it is a product that has a rev-share attached and, as a result, we’ve been careful to make sure it enhances and not replaces our current offering, which means we leverage it more to help create additional targeted audience extension for larger programs we create on behalf of brands,” she said.

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HBO Now is leading the pack when it comes to TV networks operating over-the-top video services, according to a survey of entertainment, studio, and publishing executives at the Digiday Hot Topic: Future of Entertainment last week in Los Angeles. Of the 44 executives polled by Digiday, two-thirds selected HBO Now.

A survey of similar audience members said the same in a survey at the Digiday Hot Topic: Future of TV event in February this year.

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With Election Day fast approaching in the U.S., Snapchat is ramping up its efforts to get people to the polls and keep them informed. The messaging application announced a deep integration with TurboVote in September, in support of National Voter Registration Day, and it revealed last week that more than 600,000 users signed up for…

This holiday season, retailers want to get customers in and out of stores as fast possible.

This week, Walmart, Target and Kohl’s rolled out mobile checkout capabilities, which give store employees capabilities to check out customers using mobile devices, an experience similar to Apple stores. Big-box retail brands are also rolling out digital way-finding tools to help customers navigate through aisles quickly to locate items quickly, find them at other store locations or have them shipped to a customer’s home.

Through convenience enabled by in-store technology, retailers are pivoting away from an old industry mindset: Get customers into stores so they’ll spend more dwell time, and as a result, more money. The focus is now on making the in-store experience as efficient as possible. Even if the customer only spends a few minutes picking up a low-price item, it’s not seen as a negative. The idea now is to build loyalty to a brand that encourages ease of transaction and repeat visits.

“The legacy model of retail is all about having the inventory and having customers come pick it up,” said eMarketer e-commerce and retail analyst Andrew Lipsman. “If you’re engaging in inventory retail, the only way to win is when a customer needs it right at that time today; as Amazon does more same-day delivery, you’re going to lose.”

So instead of trying to battle Amazon using the legacy inventory model — hoping that whatever is in stores will compel customers to make purchases — retailers are focusing experience driven through convenience. To do that, retailers are reducing friction at checkout, giving customers to options to pick up or ship items to stores, and adding digital tools to help find products either in the store or online, if they’re out of stock. So, shorter, smaller-dollar visits don’t worry larger retailers who once thrived on keeping a captive customer on site as long as possible. They’re making up for that with more options: If a customer can send a pair of online-only shoes to a Walmart store and pick it up there the same day, that’s a sale the retailer may not have made otherwise.

“It’s about giving them options — what the [customer’s] choice is for a particular trip,” said Walmart rep Ragan Dickens.  “It’s about an omnichannel approach and what works for them in that moment.” A customer may have a few different types of visits in a single day, and the retailer wants to meet those needs in the most convenient way, he added.

Thursday, Target rolled out employee-assisted mobile checkout. Under a new “skip the line” convenience service, employees equipped with mobile devices will be deployed to the busiest sections of stores to help customers settle up without lining up at checkout. Target already offers customers curbside and in-store pickup. Target, however, is working to use its stores to serve a dual purpose, by catering differently to customers who need to get in and out in a few minutes, and those who have the time to relax and browse inventory. Among plans being considered for future store designs are two entrances: an “inspiration” entrance catering to those who want to spend time at the store, and an additional convenience entrance designed to serve customers who are in a rush. It’s the concept behind Target’s Houston “next generation” store, and it’s influencing plans to redesign 600 stores by 2019.

“Less time at the store is not a concern — our traffic has been increasing,” said Target rep Eddie Baeb. “The more convenient we can make our stores, the more relevant they are to [customers’] lifestyles.”

Instead of focusing exclusively on growing purchase volumes during each individual visit, the new strategy is a longer-term loyalty play, said David Bray, CEO of Briz Media Group, an ad agency that serves tech companies that work with retailers. Tech can make the experience easier and more enjoyable for customers, triggering a more positive association with the brand.

“The old school philosophy is you want to keep them there and make them shop for shoes, makeup and what have you, but now with the online offerings, the offline world is about creating the brand relationships with the consumer,” he said.

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Customer data is going right down to the store level at Kohl’s, where the company is using it to serve managers action items around how to better drive sales in their stores.

The Kohl’s Actionable Analytics program is an analytical add-on to the store’s existing associate dashboard, which shows sales data and other daily stats. With Actionable Analytics, Kohl’s uses local customer data, comparable store data and machine learning algorithms to serve managers weekly tasks that they can check off to improve store conversions. The recommendations vary in scope, but are made using information like what customers in the immediate store area are searching for and buying online and in Kohl’s stores, as well as what products and departments are selling well at other locations.

“So much data is available today, but we need to be synthesizing that for [managers] so they know their customer better, their business better and they get specific recommendations on what to prioritize,” said Kohl’s COO and president Sona Chawla. “The worst thing you can do is throw a ton of data at them and expect them to absorb it. The big ‘aha’ we had was that we needed to give them insights. No CEO just gets a stack of reports on their desk; they’re told a handful of top-priority issues or insights to tackle.”

One store manager told Chawla that through a “Stores Like Me” recommendation on the dashboard, she learned that a particular electronic item wasn’t selling as well in her store as it was at stores in similar geographies. With a visual merchandising recommendation, she figured out that the way the product was stacked in a display was making it difficult to see and access. Rearranging the display helped drive conversions of the product. In the tool, managers are able to check-off specific tasks they’ve completed and then track progress.

Other use cases: Store managers can anticipate how certain inventory might sell based on online searches and other store performances, and stock the floor properly so it doesn’t get cleared out. Based on customer data, store managers will also soon be able to get staffing recommendations from the dashboard, around how many people to keep on the sales floor versus in the stockroom during particular store hours, and what departments might need extra staff depending on how products in that category are selling.

Kohl’s began testing the Actionable Analytics dashboard earlier this year through the “Your Store” learning lab, which tests new technology in a small number of locations to see how it sticks. After expanding it to 50 locations, the company is now rolling it out to 300 of its total 1,158 store fleet. Chawla said that the high-volume holiday period will be an observation period for the technology but that the company plans to eventually roll it out to all stores.

The dashboard is one piece of Kohl’s broader push to improve its store network. The company has been downsizing some stores to 35,000 square feet — 60 percent of its typical size — and adding capabilities like mobile check out, buy online pick-up in store lockers, self-checkout, RFID-enabled inventory, but online ship to store, and mobile app tools like store mapping and in-stock product searches. While these tools have been tested in the “Your Store” learning labs, the holiday season is prime time for seeing how the technology scales. The stores are also critical online order fulfillment centers: Typically, 40 percent of online orders are fulfilled by a store location; during the holidays, that goes up to 50 percent.

“The stores are our secret sauce. If we didn’t have our stores acting as fulfillment centers, we couldn’t handle our digital demand,” said Chawla. “It’s critical to evolve them, but it’s not about throwing a bunch of technology at the stores. Many ‘stores of the future’ have failed because it was a big bang, and they changed everything at once. That doesn’t work.”

The company’s technology team is tasked with building out new tools — sometimes with external partners, not all technology is built in-house — and then iterating depending on how they’re received. As Kohl’s prepares for the holiday shopping rush, it’s on par with other big-box retailers like Target and Walmart, using its broad store network as an efficiency point for tackling online order shipments and deliveries. Capabilities like on-the-spot checkout systems to reduce lines, ship from store and in-app tools are common in-store holiday strategies.

“These functional developments are becoming table stakes — that’s what everyone in retail is competing on,” said Bill Alberti, chief client officer at customer agency C Space. “But to become meaningful to customers, you can’t get there by guesswork. It starts with understanding who your customer is and what their lives look like, and how you can fit your retail brand into their lives in more meaningful ways rather than just on functional developments.”

With Actionable Analytics, Kohl’s hopes to arm their store managers on the frontlines with real-time information based on customer insights to head off out-of-stock disasters in popular items or poorly staffed high-trafficked departments. For the holidays, Kohl’s is hiring 90,000 additional store employees.

“Before, all of our data was passive. This is active,” said Chawla. “It’s about giving managers a voice — they have a voice today, but it’s not well-informed by analytics. They should know the digital demand around them, what’s happening with competition so they can react.”

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