Month: February 2019

Telecom regulator says spectrum policy helps U.S., but Chinese equipment makers pose threat.

Targeting on TV with the same precision as digital is becoming a reality. Hulu, Roku and other over-the-top (OTT) providers offer advanced audience and behavioral targeting capabilities like CRM onboarding, while companies such as Xandr and NCC Media are applying unique data sets to make the linear TV landscape more addressable. But just because marketers… Continue reading »

The post As Targeting Comes To TV, Digital’s Mistakes Loom Large appeared first on AdExchanger.

When the world changes, sometimes you need to change with it. But evolution doesn’t always happen – or sometimes you just end up moving in the wrong direction. This week on “The Big Story,” AdExchanger looks at RockYou’s bankruptcy and, on a much larger scale, the major pain at Kraft Heinz. With RockYou, the publisher-slash-ad… Continue reading »

The post The Big Story: Falling Down appeared first on AdExchanger.

Tubi TV has no interest in becoming a subscription-video-on-demand (SVOD) service. As giants like Netflix and Amazon Prime pour money into original content housed behind paywalls, Tubi wants to provide access to the world’s largest library of free, on-demand content. The 8-year-old, ad-supported video-on-demand (AVOD) network has more than 12,000 titles available across 18 streaming… Continue reading »

The post Why Tubi TV Will Never Have Originals Or A Subscription Tier appeared first on AdExchanger.

By Christian Printzell Halvorsen, CEO, Cxense

If 2018 showed us anything, it’s that the Duopoly seems to be unstoppable. Google and Facebook lurched from scandal to scandal, suffering bad press, but sacrificing just a fraction of their market shares. Why? Put simply, they still have more of the granular, behavioral and interest data that advertisers want.

To bolster themselves against this unshakable reality, publishers are doubling down on subscriptions. In fact, 52 percent said building logged-in audiences will be their top business priority in 2019, according to Reuters Institute. Bloomberg, Vanity Fair, Business Insider and others are already working on it, gathering both recurring revenue and the deterministic IDs that capture accurate first-party data.

But the strategy is about to hit a wall. Specifically, a hard (or metered) paywall. Publishers often deploy static paywalls — the kind that drops uniformly for every reader — as a first step toward building a subscriber base. These initially pay dividends by accruing a base of frequent readers and super fans. But publishers soon find that it is trickier to lure occasional and flyby readers with the same approach.

Enter dynamic paywalls. Last year, the New York Times, New York Media, and the Wall Street Journal launched new, data-driven paywalls that court subscribers in a more personalized way. Where static paywalls are essentially one-size fits all, the machine learning behind dynamic paywalls crunches user data before determining how to meter site content and offer discounts in return for memberships.

Variables might include demographic information like geography and salary range, as well as on-site behavior like how many stories they read in a session, what kinds of stories they read and more. The Wall Street Journal, which hit its 3 million subscriber mark last year, did just this: bucketing readers into three groups and serving offers based on their likelihood to subscribe.

Publishers don’t need to have the Journal’s resources or scale to accomplish their subscription goals. Danish publisher Nordjyske Medier increased its subscribers by 50 percent when it used a dynamic paywall to tailor and test subscription messages. Through this method, they soon found that die-hard soccer fans were more likely to subscribe when encouraged to keep up with their team’s every play.

The Journal’s approach is simple and effective, but dynamic paywalls offer myriad possibilities. Publishers can balance ad campaign fulfillment with subscription revenue by gating content based on interest. Those die-hard soccer fans might not have access to the sports section without a subscription, but have free reign of the other sections where they contribute valuable impressions. Further, when a big story breaks, editors who want to make sure it gets the widest reach (and ad execs hungry to meet impressions quotas) can request the paywall be dropped.

Most importantly, publishers can use modelling to predict which customers are likely to churn, and when. The Times and Sunday Times of London found that 96 percent of the readers who entered the subscription process were dropping off. Using propensity modeling (a statistical scorecard used to gauge the likelihood of a consumer’s behavior), they began segmenting readers and personalizing their message. The changes boosted conversion by 190 percent according to recently released figures. The same can be done with users who are at risk of cancelling their subscriptions.

But dynamic paywalls aren’t just about the bottom line. User experience is buoyed when publisher sites respond to an individual’s distinct preferences. After years of social feed algorithms catering to their every whim, readers expectation for personalized content is higher than ever. Those raised expectations open up an opportunity for publishers.

For most of the industry’s history, publishing has been a top-down, mass media experience. Reporters and editors dictated the shape of the world based on their own priorities, and in large part they still do. But the one-to-many dynamic that worked when people were accustomed to being spoken to no longer does. Now, readers no longer want to be just another set of eyes. They want to be a valued customer.

Personalized experiences allow for this. Much like subscription services that curate selections based on a customer’s stated preferences, content personalization can design home pages, app screens, newsletters and advertising messages that speak to an individual’s needs. Publishers that opt-in to personalization move from courting readers to courting customers and, eventually, establishing consumption habits like daily newsletter reading. With tactics like this, publishers have the opportunity to become more relevant than ever.

This service-oriented mindset is just what is needed to steal attention (and advertising money) from the almighty platforms, where algorithms pick the content and “users” aren’t just one of thousands: they’re one of billions. At the end of the day, the Duopoly may be able to reap data from an increasingly skeptical audience, but overcoming the brand relationship between a trusted media outlet committed to personalization and its subscribed readers may be too steep a wall for them to climb.

The post Publishers have a problem: Their paywalls are too steep to scale appeared first on Digiday.

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Hungry Mouse Disney is in talks to acquire WarnerMedia’s 10% stake in Hulu, Variety reports. Disney currently owns 30% of Hulu and will pick up 20th Century Fox’s 30% stake if and when the Department of Justice approves their merger. Adding WarnerMedia’s stake and… Continue reading »

The post Disney May Buy WarnerMedia’s Hulu Stake; Video App TikTok Fined Over Privacy Violation appeared first on AdExchanger.

Facebook wants creators to use its platform to drive subscriptions, but some creators aren’t biting.

Facebook offers a product called “fan subscriptions,” which allows creators to make money directly from their followers in exchange for Facebook taking a cut of all subscriptions. Launched last March, the product has 1,000 creators and is still in a beta test, a Facebook spokesperson said. Currently, creators get to keep 100 percent of the revenue. But that could change soon with Facebook taking a 30 percent cut of subscription revenue, as outlined in Facebook’s terms of service for creators and obtained by Digiday.

That revenue cut that is the main point of the contention around the fan subscriptions product. Matt Saincome, the founder of the satirical website The Hard Times, shared his frustrations with the terms in a Twitter thread on Feb. 25. Facebook reached out to Saincome to offer early access to the product, but he said wasn’t interested.

“These are the people who tanked our traffic by 70 percent overnight when they decided to focus on ‘friends and family’ and then asked for money to ‘boost’ our posts to people who already signed up to see it. The whole team was just laughing at the notion of ever building anything creative on Facebook ever again. They’d need to do something to earn back our trust first, not try to lure us in with ‘keep 100 percent of your revenue’ and then say ‘we may jack it up to 30 percent.’ It’s a joke,” Saincome said in an email.

Saincome told Digiday he didn’t know why exactly Facebook had reached out with the offer but guessed it had to do with the page’s ties to gaming.

“It isn’t our biggest page. We have Hard Times page as well and that has more than 250,000 likes. I think they probably targeted [Hard Drive] because it’s a gaming page that has previously had a streaming integration, aka we synced up our stream to it. They seem to be focusing on gaming stuff,” he emailed.

A Facebook spokesperson said a good portion of creators in the program are related to gaming. A creator who has spoken to Facebook about the program also said the big focus, for now, is on gaming.

Saincome said his team makes the majority of its revenue from ads on its owned and operated properties.

“When Facebook decided to not let our content spread organically as it had in the past, we lost a ton and had to work our asses off to replace the lost revenue. We are a tiny DIY organization, and they are one of the largest companies in the world, and they constantly try to eat our lunch. Why the fuck would I let them control my connection to my audience again? Especially if there is money or subscriptions involved,” he said.

Fan subscriptions is Facebook’s latest attempt to lure video creators to its platform as it competes with YouTube, Amazon’s Twitch, Snapchat and TikTok.

With fan subscriptions, Facebook is also competing with Patreon, which isn’t tied to a specific distribution platform but rather helps creators manage a membership program and takes a 5 percent cut. The Hard Times uses Patreon to help fund its new podcast network, Saincome said. Patrons to the Patreon account receive their names and faces in articles on Hard Times’ site as well as ad-free episodes of the podcast.

Despite creators like Saincome comparing Patreon to Facebook’s program, Patreon’s svp of product, Wyatt Jenkins, said his company doesn’t see Facebook as its main competition.

“We’re in a very different business model. Facebook has three constituents: advertisers, end users, and, lastly, they have creators. We have one master when we build: creators. No matter how many features Facebook or YouTube build, their priority will be ad revenue, No. 1,” Jenkins said.

Facebook has touted the success of some creators in its beta program. For example, Facebook wrote a case study on the UK creator LadBaby. Earlier this month, Facebook expanded it to Europe, the Middle East and Africa during its first “Creator Day” in those regions. The company has not yet announced when it will be released out of beta. The spokesperson said it will most likely be some time this year.

The Facebook spokesperson said the company hasn’t yet determined what the final ad revenue split will be when the product is released but said it will be in line with the rest of the industry and that creators will retain the majority of earnings. For context, Twitch’s split is 50 percent for its subscriptions. YouTube takes 45 percent of ad revenue. YouTube also shares revenue from subscriptions with creators in YouTube Premium, but that program is being changed in favor of ad-supported content.

Facebook has told creators in the beta program that recurring revenue they receive from subscribers will not be subject to revenue sharing — just the revenue from new subscribers, a spokesperson said. Though that isn’t explicitly written in the contract, as reviewed by Digiday.

Meanwhile, Patreon doesn’t currently have plans to change its existing rates.

“Changing existing creators rates is not something in our future roadmap. We have new products. We bought that merch company Kit to provide new services people can use,” Jenkins said.

The post ‘They need to earn back our trust’: Facebook’s subscriptions play for creators meets resistance appeared first on Digiday.

Facebook wants to crash this year’s TV upfront ad-buying cycle, during which TV networks and advertisers negotiate year-long deals. But for Facebook to take a seat at the negotiating table, the social network will need to act and talk like TV, ad buyers said.

In angling to enter the TV upfront marketplace, Facebook will be pressed to adapt its traditional video ad sales pitch, according to six ad agency executives interviewed by Digiday. To date, the “vast majority” of clients’ video ad spend on Facebook goes toward the standalone video ads appearing in people’s news feeds, said one agency exec. Facebook has been trying to get advertisers to buy its in-stream video ad inventory, in which the company attaches pre-roll and mid-roll ads to videos from publishers and individual creators, as well as the original and licensed shows within Watch. But even when including in-stream video, the ad dollars going to Facebook’s video inventory are coming out of clients’ social budgets, said a second agency exec.

“I think Facebook has aspirations to work directly with more traditional TV and video buying teams, but I haven’t seen that transition unfold fully,” the second agency exec said.

Facebook is in the midst of trying to make that transition, but there is a “decent learning curve happening for them right now,” said an agency exec that specializes in TV and premium digital video and is having upfront conversations with Facebook.

While ad buyers are interested in Facebook’s upfront pitch and receptive to the programming that it is pitching for individual sponsorships, their willingness to sign upfront deals with Facebook “will come down to pricing,” said a fourth agency exec.

Facebook has yet to provide ad buyers with rate cards that will effectively serve as the sticker price for its upfront deals.

Until those negotiations begin, ad buyers are still looking to the quarterly upfront video ad deals that Facebook offers, in which the company asks advertisers to commit to spending at least $200,000 in exchange for fixed CPMs around $25 for ads running across its in-stream video inventory, according to three agency execs.

However, Facebook will likely be forced to push down that pricing to be much lower during the upfront negotiations. “I think it needs to be much less than that if they are expecting [to be a] TV replacement. However, they do not have a lot to sell to start, so I am sure they won’t dive,” said another agency exec who is in upfront negotiations with Facebook.

In addition to pricing, ad buyers are waiting to hear how Facebook plans to deal with instances when it may be unable to deliver on what advertisers paid for. While the company is offering Nielsen-backed guarantees that upfront advertisers’ ads will reach viewers in their target age-and-gender demos, ad buyers are unsure whether Facebook will have enough programming and viewership to make good on those guarantees.

When TV networks fall short of the guarantees they make to advertisers, they offer so-called “make-goods” in which they offer advertisers additional inventory to make up for the scale that they were initially unable to provide. Facebook has yet to discuss with ad buyers whether it will offer make-goods for upfront deals and what those make-goods would encompass, according to three agency execs.

If Facebook tries to make up for in-stream inventory shortcomings by offering its in-feed inventory, “they’re going to learn that’s something we’re not super excited about or won’t see as a one-to-one make-good,” said the fourth agency exec.

Since last year, Facebook has discussed with agency ad buyers an option to buy ads against individual shows within Facebook Watch, the company’s video hub. Those discussions ramped up in recent weeks through private meetings Facebook held with agencies ahead of an event that Facebook hosted in New York City on Feb. 26. There, Facebook officially announced the show sponsorships option as part of the company’s push for TV-like, year-long upfront deals with advertisers.

Unlike YouTube, whose upfront pitch has been largely oriented around collections of individual channels, Facebook is taking the traditional route to crack into this year’s TV upfront cycle with a show-centric pitch.

“The guiding principle is to meet the video advertising marketplaces where it was,” said Erik Geisler, director of North America agency sales at Facebook, during the company’s Feb. 26 event.

Nonetheless, Facebook is a new entrant to the TV upfront market and will likely need to adapt its sales strategy to prove itself on a like-for-like basis against traditional ad sellers. Over the past three to six months, Facebook has “been angling toward this and how best to merchandise and package things in a way that is more digestible for those more familiar with the TV marketplace,” said the fourth agency exec.

Facebook has been trying to stir advertisers’ interest in sponsoring individual shows through a 13-page program guide for Facebook Watch that it has provided to agencies in recent weeks. An agency ad buyer shared a copy of the program guide with Digiday. The printed booklet highlights 25 individual shows that are part of Watch, including “Facebook Originals” such as Jada Pinkett Smith’s “Red Table Talk” and “9 Months with Courteney Cox,” as well as licensed TV shows such as “Buffy the Vampire Slayer” and “Firefly.” The guide features short one- to two-sentence descriptions for each show and URLs for their respective show pages, though some shows, like “Limetown” starring Jessica Biel and Stanley Tucci, lack the URLs because they have yet to premiere.

“That was the first time that I’ve seen a program guide from them,” said an exec at another agency who received the booklet.

Facebook has become so focused on becoming a part of this year’s TV upfront cycle that some agency execs got the impression that Facebook planned to host an upfront event of its own in New York City — around the same time as TV networks’ upfront presentations in May. However, a Facebook spokesperson said the company will not be holding such an event and will instead conduct an agency roadshow to brief agencies on its upfront pitch.

Sahil Patel contributed reporting.

The post ‘Decent learning curve for them’: Facebook will need to adapt its pitch to crack TV upfront market appeared first on Digiday.

As agencies are still trying to figure out their TikTok strategy, one brand has been committed to the short-form video app since the beginning.

The NBA has a team of several employees (the league wouldn’t specify how many) dedicated to the app and posts five to six videos per day to 3.8 million fans. During All-Star Weekend, the NBA garnered more than 44 million views on its TikTok videos, according to the league. More than 3,000 TikTok users submitted their talents to the brand’s hashtag challenge, one of the ad products and organic behaviors on TikTok, where users mimic each other’s videos, typically synced to the same song. NBA shared their own players’ talents like Steph Curry’s dunks, which received 82,000 likes.

“It’s still so new, but the challenges are a big part of the platform. We’re encouraged by the highlights starting to perform well like showing Kyrie’s [Irvings] handles. We want to teach NBA’s fans and new fans who these players are and what makes them special,” said Bob Carney, NBA’s vp of social and digital content.

The NBA has been known for its dedication to and prowess at social media. The league was popular on Vine, the six-second video app Twitter axed in 2016, and has made several exclusive shows for Snapchat. The NBA also has 35 million followers on Instagram, and NBA highlights have been a key reason why accounts such as Bleacher Report’s House of Highlights are popular on the platform.

TikTok is just the NBA’s latest obsession, and its willingness to join was quite obvious: Carney said the NBA had already been the most popular brand on Musical.ly, which Chinese tech company Bytedance had acquired in November 2017 and rebranded to TikTok in August 2018. TikTok’s rebrand was beneficial to the NBA since the company has global scale and a sister app Douyin in China, where the league has an obsessive audience (the NBA has 4.9 million followers on Douyin compared to 3.8 million on TikTok).

In Nov. 2018, the NBA and Bytedance announced a multiyear partnership. It involves the NBA consistently publishing on the platform in favor of better access to Bytedance’s tools and in-app promotions. For example, the NBA’s All-Star Weekend coverage was featured on the app’s search page. (The NBA declined to share terms of the deal. TikTok did not respond to a request for comment by press time.)

Carney said the NBA became interested in Musical.ly back in October 2016 because its demographics skewed young and female. TikTok’s audience is still similarly skewed. TikTok has 26.5 million monthly active users in the U.S., where 60 percent are 16 to 24 years old and 63 percent are female, according to its pitch deck.

“Whenever there’s an app that gains traction we always evaluate if we should use it. When we saw [Musical.ly’s] demographics were very young and very female and when we saw the content, we thought it would be something for us to engage a different audience,” Carney said.

As for TikTok’s benefits, the NBA’s activity promotes the app’s legitimacy to other brands and advertisers. Bytedance is currently hiring a director of sports partnerships, based in Los Angeles, according to a LinkedIn job posting. The National Football League also has been experimenting with TikTok with augmented reality stickers on different players.

In the beginning, the NBA posted about two to three times per day and found that the most engaged content was fun or funny, such as mascots in the stadium or other in-arena moments. That’s still true on TikTok. One of its top videos, 3.2 million views, was of mascots throwing cakes into people’s faces on National Cake Day. The NBA also posts themed content for each day of the week, such as Mascot Monday, Talent Tuesday and Workout Wednesday.

To grow its audience, the NBA isn’t promoting its TikTok channel on its other platforms, Carney said.

“Our goal is to engage the audience where they’re at. We’re not always trying to send them places. The one exception to that, on a general matter, across all of social is encourage and promote the games on TV, but we’re not trying to move our Twitter audience to TikTok,” Carney said.

The post The NBA has 3.8 million fans on TikTok — and another 4.9 million on Douyin appeared first on Digiday.

TJ Maxx is benefiting from other retailers’ bankruptcies.

The retailer’s sweet spot is meeting a consumer need for discounted brand products while helping vendors offload unwanted merchandise. As more retailers fold, including Payless ShoeSource and Gymboree, their vendors are reaching out to TJ Maxx to offload unwanted inventory, enhancing the retailer’s product selection, CEO Ernie Herman told investors Wednesday.

“When we look at our value positioning in terms of how well we’re able to execute, we’re so well positioned in our ability to execute brand, fashion, quality and at the value pricing,” he said. “Whenever [bankruptcies] happen, we end up with some of those vendors that supply them reaching out to us.” Customer traffic was the primary driver of sales, and the company is gaining market share, he added.

The company reported 6 percent growth in same-store sales for its fourth quarter of 2018, a 4 percent jump year over year, while fourth-quarter net sales were valued at $11.1 billion. Its store count, at more than 4,300 stores, keeps growing.

TJ Maxx has benefited by being a contrast to e-commerce capability. Customers can easily find and shop whatever they need online, but in a TJ Maxx store, they’ll rifle through discounted products for goods they otherwise wouldn’t be able to find, said Gartner L2 director of client strategy and research Tom Gehani.

“Compared to third-party marketplaces, where you can find any product anywhere, off-price has been this beacon of scarcity,” he said.

Though the retailer faced some margin pressure (its profit margin for the fourth quarter was 10.6 percent versus 10.1 for the same prior year), strains the company attributes to additional freight and labor costs, it’s part and parcel of being a discount retailer whose core activity is to move inventory quickly. While TJ Maxx’s store network, which currently stands at 4,306 locations, keeps growing (it added 236 stores globally over the past year, including 29 new stores in the U.S.), the question over time, said Nomura retail analyst Simeon Siegel, is how big it is able to grow.

“I am confident in their sustainability, but how large can they get?” said Siegel. “You’re picking up the mistakes [of brands and retailers]; someone is making the initial bet — no one grows forever.”

He added that off-price retail is increasingly becoming a destination for shoppers; but having its success pinned on supply availability from full-price retail channels isn’t a certainty over the longer term. Meanwhile, large chains like Target, Walmart and Home Depot are investing in tech-enabled experiences in-store, including online order pickup, cashierless checkout, and VR/AR technology, while growing their online stores. While TJ Maxx has a “click and collect” service in its U.K. stores, it’s not yet available in the U.S.

How long TJ Maxx can continue to keep e-commerce as a secondary experience to in-store shopping is unclear. According to data from Nomura, e-commerce represented 1 percent of sales across the company’s brands. The company is growing its e-commerce offerings, including a planned launch of a Marshalls’ e-commerce portal later this year, but Herman told investors that the inventory online is deliberately not the same as what’s available in stores. Hence, the best “gems” of the treasure hunt are only available to in-store shoppers. That’s a compelling model, but whether or not that formula is viable over time is an open question, said eMarketer retail and e-commerce analyst Andrew Lipsman.

“They’re more justified than taking that approach compared to other retailers, but, as a long-term proposition, 20 percent of apparel sales are happening online, and that’s a big segment of the market you’re saying no to.”

The post Retail bankruptcies are driving growth at TJ Maxx appeared first on Digiday.