Less BS, More Facts, Some Opinions
“The Sell Sider” is a column written for the sell side of the digital media community. Today’s column is written by Justin Choi, founder and CEO at Nativo. The age of the platform has, without a doubt, taken a serious toll on publishers. Direct content consumption on publisher sites gave way to content discovery via… Continue reading »
The post A Path Forward That Publishers Are Ignoring appeared first on AdExchanger.
Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. MePodcasts DTC brands love podcast advertising. Take MeUndies, which has sold 9 million pairs of underwear and expects to post $75 million in sales this year after shifting some of its Facebook ad dollars to podcasts four years ago. The brand, which got into… Continue reading »
The post DTC Brands Win At Podcasts; Ads-Free FTW On Streaming (For Now) appeared first on AdExchanger.
In the digital media industry, there’s a big push for transparency. Publishers are demanding to know details around ad fraud, viewability and brand safety, all of which have a direct effect on payments from demand partners. If ad fraud goes up, payment goes down. And if brand safety is in jeopardy, the agency might not pay a publisher.
In order to combat these dangers, OAREX Capital Markets has joined the transparency initiative, disclosing credit data and details on digital advertising intermediaries, agencies and brands in our Digital Media Payments Study.
By analyzing key statistics from this report, those in the ad tech and digital media landscape can better understand the impact payments can have.
Digital media payment trends analysis
The number of late payments declined significantly in 2018. We attribute this to a few factors. For one, businesses get to a place of more efficiency as they develop along their lifecycle. We’re seeing some shakeouts in the market, but we’re also seeing consolidations, and with that comes efficiency among other firms.
It could also be a self-fulfilling prophecy — after OAREX gets involved, many of these media firms, for the first time, have to pay someone else — us. Their cooperation and obligation to pay OAREX could be the factor that reduces payment times, simply by virtue of us expecting to get paid on time.
Why do digital media companies pay late?
The most common reasons are those listed in our report: advertiser disputes, operational inefficiencies and financial troubles.
We see operational inefficiencies as the most common cause for late payments: emails going unanswered, unnecessary pushback to new things, or bureaucracy that prevents deals from getting done. These factors plague a huge number of digital media businesses. These are not credit-related barriers to getting paid by your customers, but it’s good to know if they’re inconsistent with how or when they pay you.
While consolidation among firms can bring efficiency, we’ve seen that most companies that get acquired pay late or inconsistently. This is likely due to inefficiencies in integrating multiple A/P departments vertically (think Verizon and OATH brands).
Another factor that creates payment delays is advertiser disputes, which although are still prevalent, are becoming rarer. These can be robotic traffic offsets for publishers, attribution fraud issues for mobile apps, or brand safety issues for video platforms. Some demand partners offset for the cost of robotic traffic/fake installs or CPMs that ruin brand safety.
The third reason for payment delays is financial stress. We typically discover financial stress when we underwrite for one of our publishers. These can include any type of demand-side partner within the digital media ecosystem. Signs of financial distress include lawsuits for not paying a client or vendor, tax liens, open collections accounts or even tips from the ad-ops subreddit.
What trends to watch in 2019
Our data leads us to believe that advertisers have baked the cost of fraud into their budgets. We see average robotic fraud for publishers around five to seven percent, but the majority of payment amounts are within one percent of the reported amount. Fraud hasn’t gone anywhere; it’s just that fraudsters are operating within the expected limits advertisers are willing to accept as a cost of doing business. If they ratchet up, they might not get paid, so they simply operate at or below advertisers willingness to accept fraud.
Acquisitions will continue to crush payment performance. When you hear about a big acquisition, don’t be surprised if a payment delay occurs. We’ve seen it with many acquired firms, as they are notoriously late or inconsistent as to the timing payment hits.
Lastly, we believe that payment delays in video will continue. Many video providers are growing too fast for their own good, and they’ve over-leveraged. A minor drop-off in demand for any of these companies could result in a major cash crunch for them and their publishers — not to mention the brand safety issues, which certain AI-enabled products are beginning to solve quite impressively.
Our advice? Raise cash before September, as payments tend to be all over the map and late in Q4. This is especially true in December, where payments late by 15+ days doubled this past year. The average late days in Q4 was nine days; it was six-and-a-half days during the entirety of 2018. Based on our analysis, a nine day delay in receiving payment could require a firm to have 15-20 percent more cash than usual on hand. It’s busy season for everyone, so it’s likely that things will fall through the cracks.
These statistics are just a glimpse into the data we compiled in our Digital Media Payments Study. To find out more, read our free report here.
The post Trends, predictions and pitfalls: What we can learn from digital payment transparency appeared first on Digiday.
Restaurant delivery service DoorDash is expanding its reach to last-mile delivery for physical retail.
The 6-year-old company, which raised $500 million at a $6 billion valuation this week, acts a courier for 330,000 restaurants in the U.S., fulfilling online orders. But as retailers look to shorten delivery windows and figure out online order fulfillment from physical stores, DoorDash sees an opportunity. It first stepped into retail delivery with a grocery delivery partnership with Walmart that went live last April, and according to Toby Espinosa, head of business development at DoorDash, the company is pointing to its 30-minute delivery windows and insight into customer data as its pitch to retailers.
“Every product that we consume will most likely be delivered at some point in our lives in two hours or less; the first manifestation of that is food,” said Toby Espinosa, head of business development at DoorDash. “Our Drive [enterprise] platform enables us to make deliveries on behalf of partners that aren’t necessarily food or restaurants, and that’s where we see our entry into new verticals like grocery or retail.”
DoorDash has two sides to its business: One is its consumer-facing marketplace, which connects consumers to participating brands through the DoorDash app. The other is Drive, which is DoorDash’s platform for working with retailers that launched in 2016. Like Postmates, which delivers a range of consumer goods beyond groceries, DoorDash has begun moving into consumer retail beginning with its tie-up with Walmart, and has ambitions to expand to new areas like alcohol delivery. DoorDash lets retailers embed its technology into its digital ordering platforms that connect directly to the DoorDash fleet, which Postmates also offers.
DoorDash also offers retailers capabilities to understand customer behavior based on insights from Drive as well as its consumer-facing platform, including which products tend to be ordered at specific times of the day and neighborhood insights. It also offers brands operational insights, such as what delivery times are optimal. Brands can use the insights they get from Drive to figure out decisions like where to launch new locations, whether to raise delivery fees during peak service times, and prompt time-of-day based promotions to encourage orders.
DoorDash is up against a crowded field of competitors as retailers figure out last-mile delivery solutions. Other services like Postmates (which recently filed for an IPO), Uber Eats, Deliv, Instacart and Deliverr all vying for market share. Meanwhile, GrubHub is the market leader on food delivery. Despite the competition, DoorDash’s pitch to retailers includes breadth of its “Dasher” delivery driver fleet (it operates in all 50 states and several Canadian cities), customer experience (the ability to customize elements of the delivery process depending on a brand’s requirements) and direct point-of-sale integration.
“DoorDash, in particular, appears to be working to advance the data that they can provide to partnered restaurants,” said Gartner analyst Evan Mack. “Chipotle’s site features DoorDash integration that allows the restaurant to have DoorDash deliver orders while maintaining access to live order updates, customer feedback, and localized delivery information.”
Similarly, Wendy’s, in a recent earnings call, reported that DoorDash integration gives them a better understanding of customer behavior.
“We’re partnering with DoorDash to have the access to the [customer] data and to share information,” Wendy’s CEO Todd Penegor said in an earnings call last August. “We’re working to integrate DoorDash into our app some time into the future in partnership with them. We’ve always talked about having the customer — from the time they order to the time that it’s delivered, optimal is under 30 minutes. ”
As the delivery field gets more competitive, companies will face increasing pressure to differentiate and maintain the same level of service across different business areas — be it restaurants, consumer-packaged goods or groceries. Retailers may also show a degree of risk aversion by experimenting with multiple platforms, as Walmart has done, working with Point Pickup, Skipcart, AxleHire and Roadie and Deliverr (Walmart earlier experimented with Uber and Lyft, before abandoning these programs). Maintaining a consistent service experience will be the key challenge, said Jonathan Smalley, CEO of data analytics company Yaguara.
“It will be interesting to see if they can keep [the same customer experience] when expanding beyond restaurants into other types of retail,” he said. “The delivery experience can be really hard to control, especially given that a lot of couriers are working for multiple platforms.”
The post How delivery company DoorDash is pitching retailers appeared first on Digiday.
Facebook’s efforts to stem the flow of misinformation and fake news on its platform have had mixed reviews. But new evidence suggests the amount of fake news on the platform is falling, and with fresh calls of government regulation from U.K. independent reports, the tide could be turning if Facebook opens up about how the program is progressing, an area where the platform has weathered criticism.
“It’s a constructively critical relationship,” said Phil Chetwynd, global editor-in-chief at international news agency Agence France-Presse, which partners with Facebook fact-checking in 17 countries. “Do we want more? Yes. Do we see overall a constructive positive evolution? Broadly yes.”
In the last month, Facebook started sharing reports with AFP on five countries that include data like the number of domains that have been taken down and the number of notifications sent to users as a result of AFP’s work. It’s part of the platform’s pledge to share quarterly reports that include customized stats that reflect the work and impact of each fact-checker.
Still, there’s more Facebook can do, including explaining whether advertising was stopped because of fake news. While the platform is showing willingness to listen, it’s not easy for it to open the hood.
“Don’t underestimate the difference between the online journalism culture and that culture of a data-business,” said Chetwynd.
Others are finding similar sticking points. Full Fact, a U.K. fact-checking charity, which started working with Facebook last month when the platform rolled out its fact-checking program to the U.K., is also leaning on Facebook for more data.
“We want Facebook to be sharing data transparently and more widely. It’s clear Facebook can share more information,” said Will Moy, director at Full Fact. “We’ll be telling them that is what we expect a responsible internet company to do.”
So far, Full Fact has fact-checked just 10 stories on Facebook, including debunking a picture that was shared over 25,000 times of a horse living in a flat in Preston, Lancashire, which turned out to be a picture of a model horse in a window in Illinois, U.S. More pernicious claims include an false image stating that illegal immigrants and refugees can claim a much larger yearly benefit than British pensioners, which was shared over 2,000 times on Facebook.
Every three months, Full Fact will publish a report on its processes, how effective the program has been and how the program needs to improve. Until then, Full Fact is figuring out the right processes in how it debunks stories, like how much time and resource to dedicate to it — currently an editorial team of six reviews content — and guidelines on which stories to review. Three topic areas where it will intervene are during the aftermath of terrorist attacks, in the lead-up to elections and content around health.
How much leverage fact-checking agencies and charities will have on getting Facebook to open up is questionable. In January, two fact-checking agencies in the U.S., Snopes and Associated Press which were being paid by Facebook, announced they were ending their part in the program for now but hope to work with it again. In the U.K., The Cairncross Review, which explores the future economic model of news, released recommendations that independent regulators should supervise platforms’ efforts to improve users’ news experience, including identifying unreliable sources.
Facebook faced criticisms, mainly for not showing its workings but also exploiting a PR opportunity, allegedly putting journalists in the firing line and pointing fact-checking agencies toward certain topics, which the platform denies.
During the yellow-vest protests in France last November, which saw a lot of misinformation shared, Chetwynd saw that once it debunked stories as false, they stopped being shared. Facebook can duke the algorithm to reduce future impressions of something that is “fake” by an average of 80 percent.
Facebook still works with 39 fact-checking partners globally across 20 languages, among other initiatives to help fight fake news, like machine learning.
“Fact-checking was never going to be one-size-fits-all,” said Chetwynd. Instead, there’s lot of different misinformation, and it needs to be tackled in different ways.
“It’s not just about resource; that is a useful metric, but how well you diagnose the problem and interventions put in place,” said Moy. “Facebook will benefit from sharing more of their data. It will need to justify what it can and cannot share.”
The post ‘A constructively critical relationship’: Facebook’s fact-checking program shows improvement appeared first on Digiday.
Martin Sorrell’s S4 Capital acquired the programmatic agency MightyHive last December to marry hands-on-keyboard expertise with dynamic creative expertise from MediaMonks. The acquisition kicked off a formal working relationship between S4 CEO Sorrell and MightyHive CEO Pete Kim – who are bonding over their similar Type A personalities. Sorrell’s reputation for all-hours emails and constant… Continue reading »
The post Under S4, MightyHive Plots Expansion Beyond Its Google-Centric Roots appeared first on AdExchanger.