Month: February 2019

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Ron Rudzin, the CEO and co-founder of the mattress brand Saatva, is tired of customers assuming that because his brand is sold online, it comes in a box.

The post Retail Briefing: How Saatva is differentiating in the crowded DTC mattress market appeared first on Digiday.

Last year, Apple News brimmed with promise for publishers, offering an engaged, high-quality audience that seemed to do nothing but grow. Ad revenue wasn’t great, but at the start of 2018, most publishers assumed that would come around.

One year later, most publishers are still waiting. Monetization on Apple News remains a slog, according to seven publishers interviewed by Digiday. Ad revenue is bogged down by advertisers’ disinterest in the ad inventory that publishers are selling directly, and by remnant ad fill rates that many publishers describe as abysmal, even after a modest improvement to start the year, sources said. One source said their publication earned “low five-figures” every month from Apple News; another said they earned less than $1,000 per month.

Apple did not respond to a request for comment.

Today, publishers are still having trouble selling their Apple News inventory directly, sources said. Three cited Apple News’s limited user targeting, which doesn’t allow the use of third-party data or IP addresses, as reasons for them being unable to sell a meaningful amount of ads on Apple News. A fourth source cited Apple News’s incompatibility with the publisher’s current sales strategy, which relies heavily on programmatic advertising, which Apple News prohibits, as a reason for seeing minimal ad revenue from the platform.

Two publishing sources said the best bet for selling Apple News inventory today is to throw it in as a value-add within larger campaigns. “We’ve been able to position it as a premium, in-app audience, which is attractive to some advertisers,” one source said. “There are drawbacks around targeting though.”

With few opportunities to sell the inventory directly, most publishers are at the mercy of the NBCUniversal sales team, which began selling Apple News’s remnant ad inventory in the second half of 2017. Those ads fetch a CPM of between $3 and $4, a reasonable rate for remnant inventory, multiple sources said.

The problem, those sources added, was that little of their leftover ad inventory was being filled.

One publisher source said that until the beginning of 2019, the fill rate on their remnant Apple News inventory was less than 20 percent. This source said it was such an “atrociously low” number that it made publishing on Apple News less lucrative than publishing through Google’s AMP format or even Facebook Instant Articles, which many publishers abandoned because of its monetization issues.

A second publisher, which saw fill rates of around 15 percent throughout 2018, has noticed a bit of an uptick in 2019 too, with fill rates climbing to between 20 and 25 percent. This source said that increase was encouraging, but stressed that the fill rate remains “abysmal” on the whole.

In the past, publishers including Scripps have boasted fill rates of up to 90 percent in a test of Apple News’s implementation of DoubleClick, but these sources suggest that those results are far from typical.

Apple News has “roughly 90 million” regular users, according to The New York Times; a source familiar with the matter told Digiday that the service has nearly 70 million monthly unique users, and another 20 million international users.

Over the past 12 months, the amount of referral traffic that Apple News directs back to sites in Parsely’s network, which comes from readers clicking on links to stories they read inside Apple News, has remained relatively flat, hovering between 4 million and 6 million views every week.

But publishers contacted for this story all reported seeing steady growth in audience over the past year. For three sources, Apple News now drives more referral traffic than Facebook does. Getting featured in the product’s human-curated Top News widget inside Apple News can drive enormous boosts in traffic, sources said. Getting articles into Apple News’s content recirculation widget, which recommends stories for users to read next, can make a story one of the highest-read stories a publisher can share in a month, one source said.

And while publishers remain frustrated with Apple News as a source of revenue, some said they appreciate where Apple is coming from. “I respect Apple and that they believe in privacy,” one source said. “It just makes it incredibly challenging to sell there.”

Most said they appreciate the work done by the product’s editorial team, which several described as open-minded and open to ideas for packages and what kinds of coverage to spotlight. “They’re very fair,” one publisher source said. “They’ll respond when they feel like it, but they’re always asking for pitches.”

But without much prospect for directly monetizing their Apple News audiences inside Apple, some publishers remain unsure about what the best approach to that audience is.

“It’s a meaningful number,” one publisher source said of their audience on Apple News. “But it’s like, what are we doing with it?”

Some have turned to subscriptions. One source at a publisher that distributes content through Apple News described the subscriptions they were able to drive there as a “pleasant surprise,” while cautioning that Apple’s 30 percent cut and ownership of the customer remained major issues. “It’s not going to bring in the kind of revenue we’d see if we were selling all the ad inventory, but we’ve been pleasantly surprised with the revenue from subscriptions,” that source said. “There are all kinds of issues with it, but it’s better than nothing.”

That lack of overall progress in monetization has dulled the excitement many publishers once felt about Apple News. A survey Digiday conducted among publishers in Feb. 2018 found that nearly 30 percent of respondents said publishers should prioritize Apple News in the new year, beating out Twitter and Facebook and referral platforms such as Flipboard.

Publishers are also starting to think about deriving value from Apple News in other ways that are not directly tied to monetization. One source at a publisher said the company was hoping to find ways to use Apple News to drive podcast downloads. Another was hoping it would be able to figure out a way to drive more people to hit a paywall on their owned sites. A third said it is planning to work harder at converting its Apple News readers into newsletter subscribers.

Those new approaches have less to do with real optimism and more to do with making the best of an underwhelming situation. “Once you’re in something, it becomes difficult to back out,” one source said.

The post ‘Hard to back out’: Publishers grow frustrated by the lack of revenue from Apple News appeared first on Digiday.

U.K. publishers are betting on short-form video platform TikTok as a new way to reach younger audiences.

For the last 18 months, U.K. publishers like the BBC, MTV and Kyra TV have been exploring ways to use the platform either as an incubator for talent, a route to TV or as a content distribution partner. Meanwhile, TikTok is staffing up and beginning to run ad campaigns in the U.K.

The post TikTok makes inroads with UK publishers, advertisers appeared first on Digiday.

To avoid future brand-safety embarrassments, agencies are increasingly looking to buy directly from premium-quality content owners on YouTube.

“We are seeing a huge increase in demand from agencies in our own YouTube inventory bought directly at meaningful CPMs,” said a publishing executive at a major media owner.

Although YouTube takes a sizeable 45 percent revenue share from a publisher’s rate card, there is some flexibility for publishers to still make a good margin should they manage to sell above their rate card. For instance, if a publisher’s YouTube inventory rate card is £20 CPM ($26 CPM ) and they sell it for £30 CPM ($39 CPM), the publisher gives YouTube 45 percent of the former.

Media agencies have long favored buying audiences at scale and for cheap rates on platforms like YouTube, but that mentality is shifting with some agencies claiming they prefer to pay more for a risk-free buy.

“Higher CPMs means lower risk,” said an employee at a media buying agency. “Buying from content owners on YouTube/Networks is certainly more expensive but can be accessed programmatically and represents a far safer buy.”

The pressure should only grow. Last week, Disney, Nestle, McDonald’s and AT&T pulled their ads from the platform after revelations that their ads had appeared next to videos of young girls that were marred by inappropriate user comments. To avoid the issue entirely but still benefit from YouTube’s audiences and scale, agencies are buying premium publisher audiences directly.

Media owners have trumpeted their brand-safety credentials to advertisers ever since the YouTube brand-safety scandal in 2017 in order to win a greater chunk of the ad revenue pie from the major platforms.

“When the brand-safety issues experienced by digital platforms are highlighted, Channel 4 and All 4 provide a natural destination for brands who place brand safety high on their agenda,” said David Amodio, Channel 4 digital and creative leader.

But evidence to show that advertiser budgets had shifted away from the platforms and back to publishers for the long term has been scant. Budgets are often paused, and after a few weeks, returned to the platforms they were pulled from. A Digiday survey of 100 media buyers the same day revealed there was no major inclination to pull spend from a platform that delivers such good results.

In this instance, however, agencies aren’t looking to pull spend from YouTube but instead to redirect it into channels with content created by premium media owners.

“Fraud and brand-safety concerns have empowered premium publishers to sell the ads and creative executions in their own environments where brand safety is guaranteed,” said a publishing executive with a large YouTube audience. “This was after several years of brands and agencies believing the user alone was most important and the context and environment were secondary. We are now seeing this extend into YouTube.”

Agencies that have bought on media owner YouTube channels directly have bought non-skippable ads, rather than YouTube’s skippable ad format TrueView, because they believe people are more likely to wait for the premium content.

“Deals also take longer to negotiate and set up but very high completion rate as people really want to see the content,” said a media agency executive.

Some agency groups have created their own lists of premium content providers with massive YouTube audiences that they have pre-approved that they want to buy on YouTube on behalf of clients, on a programmatic-guaranteed basis. Disney, Vevo and LittleDot Studios, which runs the YouTube channels for show brands such as Gordon Ramsey’s “Kitchen Nightmares,” according to agency sources.

Although the opportunity to do this has been around for some time, momentum has been slow to build, according to Elliott Baum, head of digital media sales at LittleDot Studios. “People don’t realize it’s an option, but agencies are slowly cottoning on. Everyone else is still wining and dining off influencers. But doing this [buying directly across publisher audiences on YouTube] is really the backbone of what advertisers need to do. They need to change the way they approach YouTube.”

The post YouTube’s brand-safety woes give publishers a boost in selling video ads directly appeared first on Digiday.

Talent and culture were a focus for agency executives gathered in Nashville this week for the Digiday Media Buying Summit. During town hall sessions, held under Chatham House Rule, attendees discussed research, done via Digiday+, that showed that 30 percent of agency employees were currently looking for a new job — and that independent agencies had happier and more satisfied employees. Edited highlights below.

Why people jump ship
“A lot of people think the grass is greener elsewhere. As soon as they think they’re not getting the best opportunities, they think they can move.”

“It’s an age thing. One of the downsides of cool young agencies where they often culture is people get spoiled and they get entitled.”

“I would say it’s interesting because here in the U.S. we have at-will employment, and so people feel they can move around. We as businesses treat people like mercenaries. So they act like it. Attrition is less in other parts of the world. I also don’t think leadership communicates.”

“I owned an agency. We had a lot of churn. There is a clear lack of progression in how they can keep growing in their role.”

Work-life balance
“The work-life balance issue is real. Having owned an agency and worked at large ones, it’s the ability to see exactly where work is going and also making sure the long hours line up with you as a human being. A lot of companies talk about work-life balance, but it’s pure lip service. If you’re someone that wants to have a family or has other needs and if someone who is not going to stay past 10 or 11 at night, it’s hard in an agency.”

“I had a baby recently, and when I went back to work I felt I had to work harder than before I had a baby so people didn’t feel I was resting on my laurels. I felt so apologetic if I had to stay home with the baby once. Look, we’re in advertising, we’re not rocket scientists or brain surgeons.”

“Work-life balance comes with experience. I see people who are just junior don’t know how to manage their time and agencies don’t empower people to do better with time management.”

Why people move to brand side
“People are burning out. People in their 20s go agency side, and people in their 30s go client side because they just can’t do it anymore.”

“People aren’t just jumping out of agencies to other agencies; it’s people going to Google and Facebook because they sell the dream of this work-life balance. Agencies are agile and flexible, and the reality is it doesn’t move as quickly.”

“I’ve worked at holding companies. The biggest thing is raises. Even for junior-level people, who have worked hard to get to the next level, they are gone by two or three years, so that’s why people are jumping: They’re getting it to get a salary bump. Raises come so infrequently.”

“Consultancies historically walked in and told you what to do. As some of their employees shifted to get hired by the clients, those people are growing, becoming CMOs. They want the same approach the consultancies use. So it’s a better match, and what’s happening is that consultancies are getting to be a path for people who want to go brand-side.”

“We migrated a brand from holding company to in-house. They wanted us to interview talent for their in-house agency the way we did for our agency. And it was really hard. The interesting thing was after the project was done, they asked us to stay on, on retainer, to oversee our in-house team.”

“People want to go to client-side so they can manage agencies and work-life balance is better. They won’t have to work because they can tell agencies what to do and go home at 5 p.m. and the agency will do it.”

“I worked at a brand once. There was so much complacency. Everyone was so worried about losing their jobs; they didn’t take any risks. Everyone went home at 5:15 p.m.”

“It’s trendy to go in-house right now.”

The post ‘People are burning out’: Why agencies lose talent appeared first on Digiday.

Roku expects its revenues to crack the $1 billion mark in 2019. In quarterly earnings released Feb. 21, the OTT streaming platform, which has grown from a device manufacturer into an advertising platform and OTT operating system, predicted that two-thirds of its revenue would come from its platform business, in which it sells ads that run inside partner apps, takes a cut of subscriptions people add through its platform, and helps drive subscriber acquisition for those channels.

We sat down with Rosenberg to discuss the growth of its advertising business, how it shares data with channels and content creators and the growth of its Roku channel. The conversation has been edited and condensed.

You’re doing business with two-thirds of the top 200 national advertisers. What happened to that other third? Why aren’t they spending money with you guys yet?
I ask my sales team that all the time. They’re coming. Every account, every brand is in a different place on the spectrum. We have brands that come to us with lengthy customer files, a custom audience they want to retarget with OTT, and then we have brands that come to us and say, “I get that 15 percent of my audience can only be reached on OTT, so I want to buy on Roku but I only want to target women, aged 18-34.” And then there are some brands that want to invest, but they haven’t reached that tipping point where they’ve started.

So is 2019 the moment that that tipping happens?
It depends on what your measure is. When we started our ad business three to four years ago, it was very much about getting the infrastructure in place to deliver a better ad experience for marketers and consumers. I feel in terms of market momentum, about two years ago, our conversations with agencies and brands were not about if they should be investing in OTT, it’s about how much and how. Our dialogue has really shifted to equip them with the measurement tools to comfortably reallocate budget. The reallocation is still lagging actual consumer engagement.

Marketers often talk about OTT being expensive, but when you net it out with the bottom funnel effects of brand perception, purchase intent, store visitation, actual sales lift, all of which are actually possible in an OTT environment because it’s served one to one and trackable, the ROI is significantly ahead of linear TV and certainly online digital video.

Your ad business is doing very well. But moving forward, you face real stiff competition from people like Hulu and Amazon. How do you see Roku continuing to differentiate over the long term when it comes to capturing advertising dollars?
Our advantages come in a couple of ways. The first is the size of our footprint. Marketers come to Roku because we reach a sizable and engaged audience. The second is data. I know those two companies have lots of data, but the ability to leverage that data to put a more targeted, more relevant ad in front of consumers and then measure its impact is a key differentiator. We’re multiple years and a dozen-plus measurement partners into the process of making the case that ads perform on our platforms.

Tell me about the availability of the IP and content that goes into the Roku channel. Not every content owner can decide to go D2C, but it seems like the proliferation of options has been affected. What are your thoughts on what that’s going to do with the composition of what’s available in the Roku channel?
What we’ll see with the large D2C players coming together, whether it’s AT&T or Disney or Comcast NBCU, [is] they will carry a lot of content, but they will also specialize in ways that make their app special. The side effect of that is that there will still be a lot of content left in need of a home. That creates a great opportunity for services like the Roku channel.

The post Roku platform head Scott Rosenberg: OTT’s ROI beats linear TV appeared first on Digiday.

Since 2009, Pop-Up Magazine has been producing what can be described as the journalism version of a concert, where contributors take the stage in front of a live audience to read aloud articles that are produced specifically for the event and accompanied by music and videos and photos displayed on a theater-sized screen behind them. Google, Coach, Lexus, Amazon and Warby Parker are among the brands that have worked with Pop-Up Magazine, which was acquired by Laurene Powell Jobs’s Emerson Collective in November 2018.

Now, it’s helping other companies to produce their own events and is rolling out a kit for anyone to put on their own Pop-Up Magazine show.

Pop-Up Magazine now been approached by between 12 and 24 companies that have asked it to help to produce their events, said Chas Edwards, president and publisher of the company, which also publishes California Sunday, a print magazine inserted in the Sunday print editions of newspapers such as the San Francisco Chronicle and The Los Angeles Times.

In the past year, Hermès has hired Pop-Up Magazine’s Brand Studio team to put on several performances from past shows for a private dinner the fashion brand hosted for some of its vendor clients in October 2018. Google-owned navigation app Waze similarly hired the company to assist with its Waze Forward event, which was effectively a daylong sales pitch to advertisers and agencies held in New York City in October.

“When we were talking about the Waze Forward event, I was thinking what can we do that was innovative and different and not make this just like every other conference that we all go to,” said Suzie Reider, managing director of advertising for North America at Waze.

A former colleague of Edwards’ at CNET, Reider had previously attended Pop-Up Magazine shows in San Francisco and New York and reached out to him. After that conversation, Pop-Up Magazine’s Brand Studio team worked with Waze to pick out two performances from past shows that tied into the transportation theme, and it also produced a custom presentation for the brand.

In cases like the Hermès dinner, when Pop-Up Magazine is simply licensing stories from its archives, the company charges in the high five figures, whereas when the Brand Studio team is developing original content for a company, the rate rises to the low six digits, said Edwards. There’s even more money to be made in developing an entire show for a company and taking it on tour; “that can be a couple-million-dollar engagement,” he said.

Pop-Up Magazine is also planting seeds for another revenue stream. This year the company began rolling out Pop-Up Zine, a do-it-yourself kit for individuals to produce their own shows. While individuals are required to charge for tickets to Pop-Up Zine shows, Pop-Up Magazine is not taking a cut of ticket sales. Instead, the company plans to eventually be able to sell sponsorships against Pop-Up Zine shows alongside any sponsorships that the individual show producers are able to sell.

Whether or not Pop-Up Zine grows in popularity to the point that Pop-Up Magazine is able to sell sponsorships against the local shows, it’s possible these off-shoot shows could otherwise contribute to its business, as was the case with Waze.

While Pop-Up Magazine’s Brand Studio is increasingly working with other companies to produce their own events, its primary work remains producing the sponsored presentations that take place during Pop-Up Magazine shows. If a Pop-Up Magazine show is analogous to a magazine, these sponsored presentations are the advertorials that can appear between presentations by journalists.

At a Pop-Up Magazine show in Los Angeles on Jan. 30 kicking off the company’s “winter issue,” a presented story about an adult day care center for people with memory issues was followed by an ad for email marketing company MailChimp. Pop-Up Magazine executive editor Anita Badejo introduced the ad, which was a video narrated by actor Jay Duplass that played on the stage’s backdrop screen.

Google was another sponsor of Pop-Up Magazine’s winter issue, which concluded its six-city tour on Feb. 13 in Austin. Google had sponsored Pop-Up Magazine shows before, but the latest tour was the first time that Google’s Brand Studio team participated, using the tour to promote its “Search On” documentary series by teasing a clip of one of the series’ films on stage.

Of course, reach is an issue. While Waze would “absolutely” work with Pop-Up Magazine again to create content, said Reider, the performance marketer is unlikely to sponsor one of its shows because of the reach limitations.

But Pop-Up Magazine emphasizes its shows’ ephemerality to its audience the point that it can make them more engaged and therefore more alluring to some brands. At the Los Angeles show, Pop-Up Magazine senior producer Tina Antolini opened the show by reminding the audience of the shows’ transient nature. “After tonight, the show will disappear. You won’t find any of it online. We made it just for you,” she said.

That distinctiveness has enabled Pop-Up Magazine to charge in the low six figures for sponsorships of tours that span multiple cities, according to Edwards. He declined to say how much revenue the company generated last year or whether it’s profitable, but he said the tours themselves are profitable. In addition to sponsorships, Pop-Up Magazine sells tickets to the shows — which average $42 a ticket in big cities, said Edwards — to offset the costs of renting out a venue and paying the journalists that produce and present stories on stage.

“I haven’t found many opportunities to have a space where people are 100 percent engaged. They’ve created something really special,” said Kennedy.

The post Pop-Up Magazine is now helping brands put on their own events appeared first on Digiday.

Loblaws, Canada’s largest grocery retailer, is on a digital push to keep its highest-value customers loyal.

The retailer is quickly upgrading its digital experiences and loyalty program as Amazon and Walmart gain market share in Canada. Loblaws expanded online grocery pickup to reach 75 percent of the Canadian population, and began a tie-up with Instacart to offer grocery delivery in late 2017. It’s also testing a partnership with startup Freshfood to offer customers discounts on products that are nearing their expiration dates. Loblaws’ investments in digital, supported by an Amazon Prime-style loyalty program that costs customers $75 a year, are the retailer’s protective barrier against the encroachment of big competitors.

“It’s in anticipation of Amazon building something [in grocery retail],” said Amar Singh, senior analyst at Kantar Consulting. “It’s trying to build a strong omnichannel presence, and they want to have a consolidated platform to grow loyalty with the PC Insiders program.”

Loblaws, which generated $36 billion in revenue last year, is no danger of losing its crown as the top grocery retailer in Canada. In online grocery, however, it risks ceding ground to competitors without a menu of services to cater to those customers. Its e-commerce sales last year were more than $381 million, according to the company.

“It’s a standard digital playbook,” said Forrester retail analyst Sucharita Kodali. “You need to figure out a way to retain your customers.”

While Amazon isn’t a significant component of the Canadian online grocery market, its appeal among digital-first shoppers is causing Canadian grocery retailers to build out their e-commerce offerings at a rapid pace. According to a poll carried out by Vancouver-based NRG Research Group last year, Amazon and Walmart are making headway among Canadian online grocery shoppers. The study found that 62 percent of Canadians who buy their groceries online say they buy them on Amazon, 37 percent buy them at Walmart and 23 percent purchase them at Loblaws. As Loblaws grows its online and delivery options, No. 2 retailer Sobey’s last year entered into a deal with U.K.-based Ocado, with whom it will develop an automated warehouse in Toronto to speed up fulfillment for e-commerce orders.

While 2018 was about scaling Loblaws’ digital services, 2019 will be about execution, with further investments in technology to drive customer adoption and satisfaction, Loblaws president Sarah Davis told investors on a fourth-quarter earnings call Thursday.

The company’s digital efforts are seen as a differentiator as other big-box brands rush to keep up.

“The rapid ramp (and traction) of Loblaw’s digital food initiatives, for online (food heavy) sales in excess of $500 million [Canadian]  is, in our opinion, not only impressive but should also give key competitors pause,” wrote Raymond James analyst Kenric Tyghe, in a recent report.

Features like online pickup and home delivery are becoming table stakes as more customers turn to e-commerce for grocery purchases. While online pickup for digital orders has performed well in the U.S., it’s still in an early phase of growth in the Canadian market, said Singh. With the potential for higher basket sizes, it’s an opportunity.

Singh added that Loblaws is smart to expand online pickup given its significant physical-store presence across the country. Loblaws operates more the 2300 retail stores across Canada, including Loblaws, Real Canadian Super Store, No Frills, Shoppers Drug Mart drug stores and Joe Fresh apparel stores.

Despite the flurry of digital upgrades, focusing on upmarket customers through fee-based grocery pickup, delivery and annual Prime-style PC Insiders memberships could open up room for competitors to gain ground with value-conscious shoppers, said Toronto-based retail analyst Bruce Winder.

“It somewhat insulates them [from competition,] but it’s not bulletproof because if you look at Loblaws’ business, it’s skewed toward the more affluent consumers,” he said. “They have some vulnerability for the lower-value customers who may go to Walmart or Amazon.”

The post Canadian grocer Loblaws grows digital offerings to keep Amazon at bay appeared first on Digiday.

MedMen chronicles the history of cannabis–from George Washington’s hemp farm to stop-and-frisk to today’s growing marijuana market–in a new two-minute short film directed by Spike Jonze. The company is aiming to “change the dialogue” and spur the “normalization for cannabis” with the film, which it views as a “statement” rather than an advertisement, explained MedMen…

Popular health and fitness apps scrambled to stop sending sensitive personal information to Facebook after The Wall Street Journal reported Friday many were transmitting detailed information about topics including their users’ weight and menstrual cycles.