Month: February 2019

Virtual assistants do their jobs better thanks to Wikidata, which aims to (eventually) represent everything in the universe in a way computers can understand.

A new batch of food-­focused investment firms are pumping hundreds of millions of dollars into fast-casual startups—powered by AI and data-mining apps.

Voice computing seeks to deliver a single correct response to any query. That’s why it’s going to upend our relationship with information.

When about 10 million players watched DJ Marshmello’s live set within Fortnite over Super Bowl weekend, you could almost hear the wheels in the industry’s brains start turning.

The event — better than any halftime show — gave a glimpse into how Fortnite could eventually evolve into a brand-new stage for advertisers.

Not only did the dance party feel epic to those people within the game; it was also shareable. This mix of spectatorship of esports and one-off events piqued the interest of advertisers in the days after the virtual concert, said Richard Downey, svp global new business at The Specialist Works.

But it can be difficult. The cost of creating an in-game promotion in the vein of Marshmello’s concert is high, said Downey. And to survive in esports, brands need to be authentic and creative. “Gamers will call out brands that mess up. You can’t just advertise in a community like the one Fortnite has without authority, especially if you’re a non-endemic brand,” said Downey.

Marshmello’s YouTube channel gained around 699,000 subscribers the day after the event, a roughly 1,800 percent increase over his January average daily subscription figure of 37,000, according to analyst Jose Arroyo. And his YouTube views per day jumped from 7.8 million to 42.8 million — or roughly 500 percent.

The advertisers already winning at Fortnite are those that are part of the community now synonymous with the game.

Fast-food restaurant Wendy’s did this last November when it hosted its first livestream of the game on Amazon-owned Twitch. Wendy’s set up a stream on the video site for free last November when it co-opted the game’s “Food Fight” mission. Missions in Fortnite are only available for a limited period, creating opportunities for brands like Wendy’s to do more “firsts” rather than repeating an existing activation.

The event split players into either playing for the Durr Burger or Pizza Pit in-game restaurants, with Wendy’s asking its fans to play against the burger chain. Going after Durr Burger was meant to be a dig at those rivals to Wendy’s that use frozen burgers, said the brand’s senior director of media and social Jimmy Bennett.

While Wendy’s didn’t appear in the game, awareness of the brand spiked. The restaurant streamed video for almost 10 hours in one day. During that time, Wendy’s went from zero followers on Twitch to more than 7,400. More than 1.5 million total minutes of video were watched by users during those 10 hours. There were around 43,500 comments during the stream. For context, Wendy’s gets mentioned about 3,000 comments per day on Twitter.

“What we did wasn’t down to a paid relationship with either Twitch or Fortnite,” said Bennett. “We see a lot of brands jumping in and trying to use paid media to grow their brand presence, but it’s actually more exhausting to try and do it that way. We didn’t have to do so much heavy lifting and put so much money to support it because we were able to organically lean into the experience.”

Most advertisers aren’t at this stage yet and instead sponsor Fortnite’s most popular players.

High-profile Fortnite influencer Dr. Lupo became the first professional esports player to be sponsored by insurance company State Farm earlier this month, while Ninja, the most followed streamer on Twitch, was paid by UberEats to promote the game last summer. The UberEats promotion linked a level of discount to the number of “kills” Ninja made during a match. It was meant to be extended over a week, but the discount was redeemed so many times that the fast-food delivery service ended it after one day.

“Brand participation seems to be largely focused on individual streamers and teams,” said Christophe Jammet, director of social media and mobile at innovation consultancy DDG. “It’s easy for consumer brands to justify this sort of partnership due to the sheer reach and level of engagement that someone like Ninja garners across multiple platforms like Twitch and Youtube, making it quite easy to activate the audience and get them to either build affinity for the sponsor brand or onboard new customers using promotions.”

Fortnite doesn’t feature in-game ads, but its developer Epic Games can code in branded content for the right opportunity. Last month, the NFL launched a two-week sale of NFL jersey in-game skins for players to buy.

“The value a sports brand brings to a game like Fortnite isn’t necessarily about reach,” said Daniel Ayers, consulting partner at digital sports consultancy Seven League. “The value comes from how those games can reward their communities and reward their player bases in real life. That’s an interesting and valuable thing a sports brand can bring to a partnership with games.”

Football club West Ham realized this last year when it launched its own esports tournament. Now, it’s creating more gaming-related content on Twitch and YouTube. “Being a football club, most of this content has been based around FIFA19 — and we have two pro FIFA19 players — but we have run a couple of Fortnite activations,” said the club’s head of content Amar Singh. “Most recently, we ran a livestream with first-team player Declan Rice — who’s a big fan of Fortnite and was keen to take part in the activation.”

For all this interest, Fortnite is doing fine without advertisers.

According to Nielsen’s Superdata, the game made $2.4 billion in 2018, with all of that that coming from the micropayments players make to buy cosmetic skins, dances and pre-released game modes for their characters, which range from $2 to $20.

But that may be changing, as agencies report that Epic is now reaching out to brands more. “Epic Games are actively engaging with top-tier brands across the entire spectrum of pop culture such as music and movies,” said Paul Lammert, director of technology at advertising agency Colle McVoy.

The success of the game has given birth to a new generation of battle royale-style games, some of which are already peeling away Fortnite players in search of a new experience. “Getting marketers to understand the esports landscape can be challenging since it’s still unproven and nascent. But when a marketer is open to different, nontraditional or bold ideas, we’re finding that they are much more receptive,” said Lammert.

The post How brands like Wendy’s and the NFL are marketing on Fortnite appeared first on Digiday.

Samsung is breaking out of Best Buy and opening its first permanent retail stores this Wednesday inside malls: The Americana at Brand in Los Angeles; Roosevelt Field on Long Island in Garden City, New York; and The Galleria in Houston.

YH Eom, president and CEO of Samsung Electronics America, said the company wants to build stores around a tech “playground” concept, where customers can chat with employees and try out smartphones, tablets, wearables, televisions and connected devices, with an emphasis on showing off applications of the technology through gaming and 4K VR activations. The store openings coincide with the launch of the Galaxy S10 smartphone.

Samsung has tested physical retail in the lead-up to the permanent store openings. Its store model has over the past couple of years included pop-ups called “Galaxy Studios” in Dallas, Los Angeles, Chicago, Washington, D.C., and Las Vegas; and it has rolled out store-within-stores at 1,400 Best Buy locations. In 2016, it opened Samsung 837, a brand marketing play in New York that didn’t sell products but offered interactive experiences, a gallery and event space. The mall stores will keep the branding element of 837 with VR and tech displays, but unlike 837, customers will be able to buy products, chat with customer associates and get repairs done.

“[The new stores] keeps the community hub, but it’s more of a scalable model. Samsung 837 is not a scalable model — that’s more about ‘larger than life’ experiences,” said Gabriela Baiter, founder of experiential retail incubator The Whereabout Studio. “They should have this revolving sense of discovery that’s completely missing from the Apple stores,” noting that while Apple stores are emphasizing product functionality, Samsung wants to take that further by helping them imagine use cases through in-store displays and interactions.

She added that Apple has been known for a practical “purist approach” to retail with the experience centered around efficiently delivering products and services. As customers become accustomed to experiential concepts in other retail stores, the Apple Store model is now starting to look a little dated.

But in rolling out VR and gaming displays, Samsung also runs the risk of relying on gimmicks.

“They have to blend theatrics with good user experience and functionality,” said Derek Fridman, chief design officer at Huge. “It’s more than just an Instagram moment; customers have to connect with a brand in a much deeper way.”

As a result, experiential, tech-focused stores are tools that should help brands connect with many audiences, including those customers who would have never considered buying the products, loyal customers drawn to emerging technologies, and those who are most concerned about utility. In developing experiential concepts, however, Samsung has to be attuned to evolving customer expectations around experience. Fridman said the “permanent” experience centers should retain the flexibility of a pop-up so the brand can break and rebuild exhibits quickly.

“You want to look at the store as a blank canvas to tell a narrative, from everything from fixtures to the technology to the hardware and logistics,” he said. “You don’t want to ‘hard code’ the space.”

As well, there’s the question of ROI and measurement. According to Baiter, being able to collect user feedback data to evolve product experiences should be a crucial goal. But expecting customers to convert after a one-off experiential activation is far from realistic.

“The practical application of VR and AR is to create value — if you don’t create value, it’s just a novelty,” said Brendan Witcher, principal analyst at Forrester. “We just don’t have time anymore to sit around and do novel things — the distinction between novel and sustainable is critical.”

The post How Samsung is planning its store strategy appeared first on Digiday.

Media companies All Def Media and IMGN Media have signed a deal to produce three original shows that the companies will air on Facebook, YouTube, Instagram and Snapchat. The hip hop culture and comedy publisher and the company behind popular meme account Daquan hope to eventually adapt the digital shows into programs they can sell to linear TV networks or streaming video services like Netflix, said All Def Media CEO Chris Blackwell.

The three unscripted shows will be distributed sometime this spring through All Def Media’s Facebook and YouTube accounts and Daquan’s Instagram and Snapchat accounts. On Instagram, the untitled shows will post to the platform’s long-form video service, IGTV. One show will be comedy clip variety show in the vein of Comedy Central’s “Tosh.0,” and another will be an interview format featuring influencers and musicians answering questions while on a treadmill that accelerates when the interviewee opts not to answer. The concept for the third show is still in development, said Barak Shragai, CEO of IMGN Media.

All Def Media will be fully financing all of the shows but the companies will share equal ownership of the intellectual property, said Blackwell. He declined to say how much money All Def Media is investing in the shows. “We really wanted to get in business with IMGN,” he said of the decision to cover the shows’ costs.

All Def Media and IMGN Media plan to pitch advertisers on branded content deals for the shows as a way to generate revenue in the near term. They will also explore potential licensing deals to syndicate the shows elsewhere, said Shragai. The companies’ eventual ambition is to use the shows’ expected four-episode initial run as a type of pilot to prove out the formats and pitch them to linear TV networks and streaming video services.

The trio of shows could also lead to another kind of a deal between All Def Media and IMGN Media, which is profitable and has raised $6 million in funding, per Shragai; Blackwell declined to discuss All Def Media’s financials.

For starters, All Def Media and IMGN Media complement each other when it comes to producing content for an audience that Blackwell described as “black Twitter” (though the companies will not be distributing the shows on Twitter). IMGN Media’s Daquan account has risen to popularity on Instagram, where it has 12.1 million followers, by posting memes related to the NBA and hip hop culture. The shows with All Def Media will be the company’s entry into original content, Shragai said.

All Def Media, which caters to that same audience, has created original shows, like “All Def Comedy” for HBO, and produces roughly 50 pieces of original content a week, said Blackwell, noting that the company has two sound studios and 22 editing bays.

All Def Media has established an audience on Facebook and YouTube; in December 2018, it received 51.5 million views on Facebook and 28.2 million views on YouTube, according to data from Tubular Labs. Meanwhile, IMGN Media has cultivated a following on Instagram and Snapchat. In December 2018, IMGN Media’s Daquan account received 192 million video views on Instagram, per Tubular Labs data, and last year IMGN Media debuted nine channels on Snapchat Discover.

All Def Media and IMGN Media are already having conversations about other ways the two companies can work together. They have discussed collaborating on the “meme museum” that All Def Media is considering erecting as part of a push into the experiential space, according to Blackwell. Similarly, both companies are interested in e-commerce and see an opportunity to develop and sell merchandise related to the shows, per Shragai. “It’s kind of the perfect union,” said Blackwell said of the partnership.

The post All Def Media, Daquan publisher IMGN Media are now co-producing original shows appeared first on Digiday.

Sir Martin Sorrell is not done shopping.

Following his departure from WPP in April 2018, Sorrell formed S4 Capital and has picked up two companies, digital production firm MediaMonks and programmatic firm MightyHive. Now, he would “like to have a significant first-party data asset,” the former WPP CEO said when asked about S4 Capital’s future acquisition plans during an interview at the Interactive Advertising Bureau’s Annual Leadership Meeting in Phoenix, Arizona.

The post ‘Data is the battleground’: Martin Sorrell’s S4 Capital is shopping for a first-party data company appeared first on Digiday.

In 2017, Kroger CEO Rodney McMullen and CFO Michael Schlotman introduced Restock Kroger, an initiative that would change the makeup of Kroger’s business. With traditional retail being squeezed, and customers slowly shifting online, Kroger had to rethink its model, build an online business that would help capture customers’ shift to digital while still driving traffic back to stores. It also planned to create new revenue streams that would help pay for the cost of re-righting a physical retailer.

By 2025, said McMullen and Schloatman, a new Kroger would be born.

The retailer is on a mission to reformat its stores to push pickup and delivery shopping options, which will then drive more online business, which will then bring in more online advertising revenue, which it can then use to invest more in the online-offline capabilities. And it’s not doing this in a vacuum: Kroger has to figure out its own flywheel model before Amazon devours the market.

The grocery retailer, which operates 2,800 stores in 35 states through 24 regional chains including Kroger, Dillons, Ralphs, City Market and Smith’s, has been pushed to respond to industry pressures.

Thanks to online competitors like Amazon and third-party delivery services like Instacart, customer behavior is shifting: Any one customer might want to shop in a store, have groceries delivered at home, or pick up most items through curbside delivery and grab the rest themselves, depending on the day. Right now, only 3 percent of grocery purchases happen online, but that’s projected to hit 20 percent by 2022, or $100 billion of the $640 billion dollar grocery industry, according to a report done in 2018 by the Food Marketing Institute and Nielsen.

“It’s a lot of complexities that we face, and in response, we’re putting together a new ecosystem that makes it effortless for customers to get what they want when they want it,” said Matt Thompson, Kroger’s vp of digital. “All the pieces and components have to come together because the customer is demanding it. We’ve moved aggressively because the future is now. It has to be simple and seamless no matter what we’re talking about: in store, pickup, delivery.”

Through Restock Kroger, the retailer is working ahead to prevent a steady decline of market share that would be lost to more competitive online players over time. Taking a page out of Amazon’s playbook, Kroger is building a retail flywheel to support its next phase of business. The pieces: physical stores, Kroger Ship delivery service, Kroger Pick Up curbside delivery, an exclusive Our Brands product selection, its financial services program Kroger Personal Finance and retail media business, Kroger Precision Marketing, are being set up to work together to bring in new revenue streams and drive customers to spend more overall with the company.

“I look at it as a death by a thousand cuts,” said Tory Gundelach, vp of retail insights at Kantar Consulting. “If you don’t offer delivery or curbside pickup, there are few shoppers that are going to up and leave, taking 100 percent of their business with them. But you will slowly start to lose one basket here, one basket there, and in a business like grocery, where you don’t see a ton of incremental growth, it becomes a significant problem for a business.”

Putting the pieces in place
When McMullen announced the Restock Kroger program, he told investors the plan would generate $400 million in incremental operating margin by 2020, following a $1.3 million investment: $800 million invested in new customer experiences and $500 million in the hires needed to support them.

But it’s not as easy as slapping online pickup and delivery options on top of a physical store network: Online sales have different margin structures and have a harder time turning a profit, meaning a retailer like Kroger could easily lose money on online orders.

Kroger’s flywheel starts with the main entry point for customers and its main competitive advantage over Amazon: the physical stores. Right now, digital sales account for only 1 percent of all Kroger sales. But thanks to Kroger’s loyalty card, it can track 97 percent of all in-store purchases to a household, which gives it an overview of the purchase history and patterns of customers.

“The trick for retailers is that they can’t assume a build-it-and-they’ll-come deal for getting the same customers who shop their stores to spend with them online. As grocery shifts online, Amazon has a disproportionate share of online grocery, which means it easily eats into your growth as more dollars go online overall,” said Andrew Lipsman, retail analyst at eMarketer. “That’s a huge hurdle for a company like Kroger to clear.”

Kroger’s new model would allow it to be proactive about the customers who may not shop online now but will in the future: It expects digital to account for 20 percent of its sales by 2022. So it’s using that in-store customer data, with 84.51, the in-house data technology company that it acquired in 2015, to build customer profiles that prompt more relevant online and mobile messages, product recommendations and promotions, which drive more customers to build online shopping lists. It may be more profitable to have customers shop in stores, but more customer volume shifting online helps supplant the cost of investment in online order and delivery capabilities.

The stores are then crucial in fulfilling online pickup and delivery orders. Right now, Kroger offers delivery in 150 markets with Instacart, with orders being picked and packed at physical stores. Putting more emphasis on order pickup and delivery would then drive more customers over time to shop online.

“We’re seeing enormous investments in digital at Kroger. Capturing a shift to online-only works if there’s a good ecosystem in place for buying groceries online,” said Jason Goldberg, the svp of commerce at SapientRazorfish. “And when you have more people shopping online, you need to monetize it.”

The new media model
Underpinning Kroger’s online grocery business is Kroger Precision Marketing, its retail media arm. Kroger doesn’t break out the size of its advertising business, but it’s growing: In the third quarter of 2018, the company said revenue for Kroger Precision Marketing was up 150 percent year over year and that its ad products resulted in 700 million product impressions for brand advertisers, which include PepsiCo and Nestlé.

Brands have always spent money with retailers like Kroger to get more exposure and visibility in stores, like an end-of-aisle display or space in its weekly circulars. Online has blown the possibilities open, and Amazon’s retail-as-a-search-engine model has taught brands to think differently about where they spend their ad dollars. Kroger has also used 84.51 to put more customer data in front of advertisers, showing how they can target families who most often buy baby formula or a certain brand of soda with more relevant ads.

“What the data lets us do is: If you’re a Kroger customer you’re going to see the things you need in your next shopping trip being targeted for you, and it doesn’t matter where you’re shopping with us,” said Thompson. “Relevance is almost overused but for the customer and for our brand partners, we need it to make this entire thing work.”

Kroger is counting on a new ad business to drive higher-margin revenue from brands who will spend not just trade dollars, which get them better visibility in stores, but brand marketing dollars with Kroger. Kroger has rolled out 16 new ad products in the last year, including search ads on its online site and programmatic ads on sites like ESPN.

One brand marketer who asked to speak on background said that it’s now spending 25 percent more annually marketing with Kroger but that it still considers it an experiment to see if the ROI is worthwhile. The marketer also said that Kroger is pushing newer ad products hard, like keyword term bidding and brand promotions in search, by offering more specific customer data profiles to inform the ad buys. It also promotes higher-than-average ad response: Stuart Aitken, Kroger’s svp of alternative business, said that Kroger’s ads have a 70 percent average for viewable impressions and click-to-conversion rates that are two to three times the industry standard.

“Kroger’s entering new territory here by competing for general marketing dollars, not just traditional trade dollars,” said David Tiltman, head of content at marketing consultancy WARC. “What makes it interesting is the data they have and are able to share. What makes it risky is the question, do they really have the scale to make it worthwhile?”

Activating the flywheel
Kroger is in a race for reinvention, one that is complicated by Amazon.

For Kroger, it will take time to see the effects of the flywheel settle into place, and competitive players like Walmart and Amazon are looming. But if it makes good on its bet to generate an added $400 million through its investment, it will be sending a message to traditional retailers: Follow the Amazon model.

“What will make Kroger successful is connecting the pieces. It can’t be a bolt-on online business; it has to flow through what they’re doing in the store, how they’re using mobile apps to drive the online business, understanding why people go in the stores when they do,” said Gundelach. “Everything needs to work together — higher-margin businesses lift up the tighter-margin ones. Amazon laid out this strategy. Other retailers can lift it.”

The post To protect its business, Kroger is building an Amazon-style flywheel appeared first on Digiday.

The first few months of a calendar year can be sleepy for some publishers, but not for Bleacher Report. The Turner-owned sports publisher, which is trying to thread itself into the fabric of sports and pop culture, has already announced a content partnership with Caesars focused on sports betting and wrapped up a weekend of parties, activations and coverage of the 2019 NBA All-Star Game.

To discuss what’s next for Bleacher Report, we caught up with Bleacher Report chief operating officer Alex Vargas. The conversation has been edited and condensed.

Going into 2018, the goal was to build licensing, build commerce, and nurture some of the sub-brands that were in their infancy. How would you say 2018 went?
I would say 2018 was a great year. We try to think about things two to three years at a time: 2018 was the last year of a three-year plan, where we pretty successfully evolved the business from what it was at the beginning of 2016. At a high level, the strategy is to build a portfolio of brands that consumers really care about and a suite of monetization capabilities that are able to support those brands.

How big can your sub-brands get?
B/R Football was something we green-lit in 2013 ahead of the 2014 World Cup. It was a bet on international as much as it was a bet on that particular sport. And it was informed by data that we had around consumption trends from our audience in and around that sport. Fast-forward to 2018, the following World Cup, and that is now a very real, substantive business with a standalone business unit and a community of people that really care about that business and a meaningful amount of revenue that’s contributing to this organization.

House of Highlights is now a top-10 Instagram account. We’re expanding it to [become] a legitimate media brand. Last year, we increased our focus on B/R Kicks. Kicks was a stream in the app for a number of years, and based on the amount of engagement and consumption of that stream, we decided to set aside more resources. We have a dedicated team, we’re producing original content.

What all these things have in common is they have a profile of niche areas where we can build communities. In this day and age, audience is somewhat of a commodity. But building a community and creating content that’s able to spark a conversation is what we’re looking to accomplish with all of these.

But how meaningful can these businesses become for Bleacher Report?
I would say that with any of these sub-brands, if there’s not a path to doing 10-plus million in revenue a year, it’s probably not worth the effort.

Do you feel like sports betting ticks the boxes you look at for sub-brands?
It’s fair to say that in 2019, betting is a sub-brand we’re looking to build in partnership with Caesars. If you look at the U.K., where the B/R Football office is anchored, sports betting is just as much part of the fabric of sports culture as anything else. Over the last 10 years, as social has exploded, the intersection of sports and culture has really grown. And if you look out over the next 10 years, I would expect as betting becomes more mainstream, it will become more of the fabric of sports than it is today.

Taking that cluster of sub-brands you highlighted there: One of those is homegrown, one is an acquisition, one is a partnership. Do you see one pathway being more enticing than others when it comes to expanding your stable of brands?
They’re all just different. Where we’ve spent a lot of time thinking is how to set them up best for success. They all have, to some extent, an independent org structure, where there’s clear accountability but also some level of independence and creative freedom and an ability to test and learn.

Over the past couple of years, we have established internal board meetings where we talk about long-term strategy and goals, and we get very specific about milestones, funding. But at the same time, we’re very, very keen on making sure all of these sub-brands are able to leverage resources and capabilities from the Bleacher Report mothership. If all of these things had to operate in standalone independent businesses, it would be a lot more challenging to be profitable, candidly. But that strategy’s no different from what we’ve done with Bleacher Report leveraging resources from Turner Sports over the past five, six years.

What revenue segment for Bleacher Report is going to grow the most in 2019?
You have to think about the suite of monetization capabilities as being interrelated. Yes, we’re in advertising, and we sell sponsorships across social, branded content. But the things we’ve invested in over the past 12, 18 months — experiential, commerce — they are small and growing very quickly, but we don’t think of them as being independent. There have to be ways for advertising to work hand in hand with events, to work hand in hand with e-commerce

The post ‘Audience is a commodity’: A Q&A with Bleacher Report COO Alex Vargas appeared first on Digiday.

Phones are too big and too hard to hold and use with one hand—and that’s why PopSockets last year sold 60 million PopGrips, a grip that attaches to the back of your giant smartphone.