Month: February 2019

President Trump is preparing to ramp up the government’s role in promoting next-generation technologies such as 5G wireless and artificial intelligence, two key areas of competition with China.

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today’s column is written by Eric Wheeler, CEO at 33Across. Economic downturns are both cyclical and inevitable. Since getting my first advertising job in 1993, I’ve been through a few recessions. With the exception of Sept.… Continue reading »

The post A 2019 Recession Isn’t Certain, But A Downturn Could Shake Up Ad Tech appeared first on AdExchanger.

SoftBank has spent at least half of its nearly $100 billion Vision Fund in less than two years, increasing the pressure to raise more money if the world’s biggest tech investor wants to maintain that pace.

“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.  Today’s column is written by Lance Neuhauser, CEO at 4C Insights. To maintain incremental growth, today’s direct-to-consumer (DTC) darlings are looking to expand beyond the digital sandbox where they grew up. After years of slathering on the search and Facebook ads, DTC… Continue reading »

The post DTC Adoption Will Help Make TV A Performance Medium appeared first on AdExchanger.

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Gray Lady Rising While digital media suffers a blood bath, The New York Times is reaping the rewards of a growing digital readership. The publisher brought in $709 million in digital revenue last year and is on track to pass its goal of $800… Continue reading »

The post Gray Lady Goes Great Guns; Here Come The DTC Consolidators appeared first on AdExchanger.

In November 2018, Digiday conducted a survey of 274 industry pros from brands, agencies and publishers. We found that most marketers are at least somewhat pleased with the steps that prominent social media platforms have taken to address brand safety since 2017.

Click here to download our full report on brand safety. 

Twitter: a clean bill of health

Twitter, which has spent the past year booting unsavory and fraudulent accounts, was rated as the least hazardous environment:

• In our 2017 survey, only one percent of respondents cited Twitter as the most brand-safe social platform platform
• In 2018 percent, the number was 45 percent — a significant plurality of respondents.

Last year, LinkedIn came out on top. Of course, we’re likely not experiencing a fall from grace on the part of the career platform; the shift likely speaks well of Twitter, not poorly of LinkedIn—only four percent of respondents called the latter a brand-unsafe platform this year.

For Twitter, its progress is a symptom of a larger trend: Social platforms have spent much of the past year booting controversial accounts (e.g. Infowars) from their platforms. Some users may not have approved —  but marketers did.

Overtreatment

62 percent of respondents said that blacklists — pre-prepared lists of sites where marketers’ ads can’t run — have been their most effective brand safety treatment over the past year, up from 50 percent a year ago. But 69 percent said that using some prominent brand safety tactics, including blacklisting and whitelisting, have inoculated their brands against reaching specific audiences. Last year it was only 30 percent.  

Innovative therapies

Computer vision, also known as image recognition, may be the most promising technology when it comes to treating brand safety episodes. It can analyze and identify objects with extreme accuracy.  In many ways, image recognition is a cure while blacklisting and whitelisting are merely palliative measures; it enables marketers to venture into seemingly unsafe publisher territory without fear.

31 percent of respondents cited image recognition as amongst their most effective technologies when it comes to mitigating brand safety concerns. A year ago, it was 18 percent. In other words, many of the respondents who were already using it a year ago are now more convinced of its value.

 

The post Research: These popular brand-safety tactics may be slashing audience reach appeared first on Digiday.

Times may be tough in digital publishing right now, but Business Insider parent company Insider says it just had its best revenue year ever. Going forward, it plans to continue putting money back into the business and making new hires across editorial and business departments — but in a smart and sensible way.

Insider Inc. — the parent company of Business Insider and general news spinoff Insider –achieved profitability for the full year in 2018, with total revenue growing 20 percent year over year, said Pete Spande, publisher and CRO of Insider. Spande declined to provide specific revenue numbers for Insider. In December, Insider CEO Henry Blodget said the company was on target to hit or get close to $100 million in revenue by the end of 2018, said a source familiar with the matter; the company has exceeded that mark for the first time.

Spande ticked off close to a dozen ways Insider makes money today, including four different enterprise and individual subscription tiers across BI Prime and BI Intelligence, a direct and programmatic ad sales business, branded content production, video production and licensing (such as the company’s show for Facebook Watch), events, international brand licensing and new areas such as commerce.

Advertising is still driving a majority of the revenue for Insider. The company is working toward a goal where a third of its revenue comes from all forms of advertising, a third from subscriptions and a third from the other, aforementioned areas. “I’m not pegging a date to it, but let’s call it by the mid-2020s,” Spande said.

“What we’re really focused on is sustainable ways to create content that can grab an audience — that’s our only job, that’s the business model,” Spande said.

The digital publishing industry is going through yet another rough winter. Even as revenues continue to climb, publishers are being forced to reduce costs. For instance, BuzzFeed grew its revenues by double digits to roughly $300 million, but still laid off 15 percent of its workforce in an effort to create a more sustainable business sheet. Vice Media underwent layoffs for similar reasons.

It’s a big reason why, during the course of the interview with Digiday, Spande and Insider’s chief content officer Nicholas Carlson both stressed the word “sustainable” when describing how Insider plans on investing in the business in 2019.

“We’re certainly focused on growth, but sustainable growth,” said Spade. “We’re very motivated as a company to build what we would hope one of the great publishing brands of the century. We’re not there yet. We have a lot of work to do. But we’re also not a company that’s going to be shedding 20 percent EBITDA every year.”

Carlson pointed to how the publisher grew its more consumer-centric Insider brand as an example of an “iterative” approach to investing in new initiatives. Insider began with eight people in a conference room, and has since grown to 100 people dedicated to that brand. The success of Insider has helped the company grow its audience, reaching 91.3 million unique visitors in the U.S. in December, according to Comscore. This beat out other news outlets such as The New York Times, The Washington Post and BuzzFeed:.

“We built Insider based on the success that we were able to create with those initial people,” said Carlson. “We added [to the team] from there as we saw more success, rather than having a theory and then making a giant bet on it from the beginning. We have big ambitions, but we execute our way toward them carefully.”

Not everything works. While Insider’s video team has grown to more than 100 people, there was a time in 2015 when the publisher considered producing long-form documentary projects under a division called BI Films. This group, which began with six people, focused on making documentaries such as “League of Millions,” a series centering on esports gamers. These would be distributed through platforms such as YouTube, Amazon and iTunes.

“We built the product first and then tried to sell it — and it didn’t work,” Carlson said. “But these were talented video storytelling people, so we took those people and put them in other parts of the company — some on Insider, some on Business Insider, one of them now runs our Inside Audio team.”

Over the years, Insider has also benefited from being fully owned by a larger media company — Axel Springer, which bought the company in 2015 for $343 million — instead of still being beholden to venture capital money like some of the other top digital publishers facing pressure to turn a profit.

“Part of the problem with VC-backed publishers is that the expectations were raised so high, companies felt pressured to grow at all costs,” said Bernard Gershon, president of GershonMedia. “Whether it’s scaling the business by driving more traffic, spending money to buy traffic, hiring brand-name people, opening fancy offices all over the world, companies had to show growth or the illusion of growth.”

“[Henry Blodget] did a great job of moving us out of venture capital ownership and into a long-term shareholder at the right time,” said Carlson. “VCs want return in five, 10, 15 years, whereas we are now owned by a company that wants to own us forever, which means we’re able to grow at a more careful pace and execute on long-term ambitions.”

Of course, the comparisons between Insider and some of its top digital publishing counterparts are not exactly apples to apples in every case. Top publishers such as BuzzFeed and Vice News have big news operations, but are also making a ton of money from non-news businesses.

“Journalism is our business,” said Carlson. “We are not a hood ornament for some other, big profitable business — whether it’s a terminal, a creative agency, or something else that’s loosely tied to a newsroom.”

Meanwhile, smaller companies such as The Information and Skift are also growing revenue by focusing on the business class, but aren’t making general-interest social videos.

“Business Insider is certainly closer to Skift than they are to BuzzFeed,” said Gershon. “They know how to drive traffic, but where they are going to make a lot of their money is going to be in business and technology news and other big markets.”

Growth remains the plan for Insider in 2019, with the company looking to grow its full-time headcount of more than 500 people by 10 percent. Investments will be made in areas such as editorial, video and commerce, which the company has begun experimenting with.

Subscriptions across BI Prime and BI Intelligence will also remain a top priority. Insider executives declined to reveal how many subscribers the company has across its products.

“We are extremely happy with the rate of growth — which, I know, is about as useful as the paper it’s written on,” said Spande. “But we are seeing meaningful growth.”

Profits will also be key, but with an eye toward putting those profits back into the company.

“Our parent company has been really good about providing the tools necessary for us to achieve profitability,” said Spande. “But the goal right now isn’t to be wildly profitable. We’re still re-investing in new initiatives and growth initiatives. We’re going to continue feeding the business.”

Responsibly.

The post Amid bad news, Business Insider parent says it crossed $100m revenue mark and is profitable appeared first on Digiday.

Amazon is using two accelerator programs to fuel its own business. These programs are meant to get in on the ground with startup brands, and also strike up partnerships with established companies to get them to sell with Amazon.

The Brand Accelerator Program serves to get in early with startup brands to help them get off the ground by funding marketing pushes and other costly retail logistics like shipping and inventory management. In exchange, Amazon asks for a level of long-term commitment to a doing a certain amount of business through sales and advertising on the platform. According to a company founder who was pitched by Amazon, Amazon is looking to bring about 10 brands on in 2019, targeting soon-to-launch and already launched brands — preferably, those with sustainability or mission-for-good bent.

The brands have to be able to do at least $1 million in sales in their first month on Amazon, maintain a healthy inventory level, and have expertise in digital marketing and brand building. They must also commit to funneling a minimum of 5 percent of all revenue earned on Amazon into Amazon’s Paid Ads program.  

The Manufacturer Accelerator Program seeks out retailers that can help drive Amazon’s private-label ambitions by doing the heavy lifting on the production end. Through that program, Amazon solicits new products to be manufactured and exclusively sold on Amazon directly. In return, Amazon will handle the marketing and promotion of the product.

It’s unclear when the programs began, but they’ve existed at least for two years in their current forms, said sources.

“Amazon is looking for a way to keep their market share where it is, and what they’re trying to do is give smaller brands, or brands built for different distribution, a way to do that while still accomplishing what they need,” said Lauren Bitar, head of retail consulting at RetailNext. “The consumer market is extremely saturated. Having a website is not a silver bullet, but traditional models are stalling as well. Amazon sees that and is taking brands under its wing.”

Amazon is identifying an opportunity to use its massive marketing machine, the influence of its reviews and even the power of Amazon Web Services to rope brands in who are at varying stages of maturity, and need to work with Amazon for a boost for different reasons. Newly launched direct-to-consumer brands can participate in the accelerator as an alternative to the traditional launch model, which often requires hefty bootstrapping or VC funding to get traction, as a way to help pay for expensive customer acquisition on Amazon. Amazon, after all, is where the majority of retail searches begin, according to eMarketer. Meanwhile, a traditional CPG company that has product development and manufacturing in-house but a small digital strategy can create an exclusive product for Amazon to build up its e-commerce sales.

In return, Amazon can grow not just its retail business, but its brand equity, private-label brands and advertising revenue, as well.

Amazon didn’t respond to a request for comment.

What’s on the table for brands
Similar to how it’s trying to win over DTC brands, Amazon’s accelerator brands are offered a list of perks for participating. In return, brands get free premium content on their product pages, free marketing on Amazon, visibility on the homepage and during Prime Day and holiday sales, lip service on social media and in email marketing, AWS credits to be used for their brand websites, access to a Thinkspace coworking office in Seattle, and free reviews through Amazon Vine. Vine is a reviewer program that identifies top reliable reviewers on Amazon who the company then gives free product in exchange for reviews. This program isn’t open to third-party sellers, and Amazon vendors have to pay $2,500 per product to get reviews through the Vine program.

The goal is to jumpstart young brands’ business on Amazon, establishing a relationship — and reliance — at the outset.

“It’s so crowded for consumer brands today — if you cannot find a collaborative partnership with things that accelerate your business, whether that’s with Amazon or other partnerships, you’re losing out on the opportunity cost,” said Alex Song, CEO of The Innovation Department, a company that invests in and launches startup brands. Song has been pitched by Amazon to participate in the Brand Accelerator Program.

There are certain points Amazon won’t budge on when pitching brands on the accelerator: It doesn’t “brand gate” accelerator brands, meaning if other third-party sellers offer the same product at a lower cost, the brand will have to push their price down in order to retain the buy box. It also doesn’t share customer data insights beyond typical analytics, and it makes no promise that it won’t drum up a private-label competitor product. It’s a risk that brands have to be willing to accept.

It also promotes special projects the companies can work on together that go beyond marketing mechanics, like a co-branded pop-up retail store outfitted with Alexa products.

“What Amazon seems to realize is that when it comes to the direct brand movement, it has to figure out a way to help brands get over the stigma that Amazon is the devil or this evil monster that’s going to come eat you alive,” said Song. “Otherwise, they’ll be missing out on valuable brands and products in the long run.”

Developing products for Amazon
Private-label and exclusive products is a growing priority for Amazon, and its Manufacturer Accelerator Program (called “Our Brands” on the site) solicits manufacturers to create products for Amazon in exchange for incentives.

Mattress brand Tuft & Needle was selling first-party on Amazon’s site when the team pitched the idea of creating a more affordable mattress to sell exclusively on Amazon. Tuft & Needle’s core queen-sized mattress retailed for $599, which, Amazon shared, put it in the top 20 percent for cost of mattresses sold on Amazon. According to COO Nick Arambula, the company had already started production on a more affordable mattress before Amazon came knocking. Selling it exclusively through that channel meant it could be kept separate from Tuft & Needle’s more expensive product selection on its own site.

Amazon didn’t invest funding or offer a stipend in exchange for the product. Instead, the company said it would handle all promotion and marketing of the mattress on the site, which meant that it could get in front of a mass audience for free. In a particularly saturated category like mattresses, that was a deal, according to Arambula.

“Amazon is similar to Google in that there’s a bit of pay-to-play,” he said. “It’s a huge search engine for products and so already, we spend a portion of our budget on Amazon marketing, both for our direct business as well as the Amazon business.” Arambula declined to share specifics. It also helps Arambula avoid certain logistical headaches that come from governmental import regulations.

Having a strong Amazon business can also lift the brand off Amazon, he added, because people search the site for reviews and feedback on products they buy elsewhere. While not having direct access to customer data is a blow, Arambula said that the customer reviews — jump-started by the Vine program — offer enough insight for the company to make decisions about product fit and performance.

Amazon’s “Our Brands” initiative also looks to fill blank spots in the company’s product selection, without it having to go through R&D and development to do so. Marisant, the company that owns Equal sweetener, worked with Amazon to develop an exclusive sweetener, a process that went from start to finish in 90 days (a process that would typically take around eight to 12 months). Marisant North America president Brian Huff said that working with Amazon, which gave feedback on product positioning, packaging and branding but nothing else, pushed the company to work fast and more agile than it had to before, helping the company adapt techniques better suited for e-commerce than physical wholesale.

“We essentially wanted to prove to Amazon, and ourselves, that we could do it,” said Huff.

Through the accelerators, Amazon is growing its own business but also positioning itself as a good-for-all brand ally.

“It’s clear in conversations that they’re trying to build trust,” said Song. “In the world of direct brands, Amazon knows if it doesn’t get past this stigma that Amazon is the devil or the evil monster that’s gonna come eat you alive, it’s doing itself a disservice in the long run.”

The post Amazon is using two accelerator programs to get brands to sell on its platform appeared first on Digiday.

About a year into Amazon’s acquisition of Twitch in 2014, one partnering publisher told Digiday the platform was “terribly exciting.” Twitch’s focus on gaming and its ability to connect publishers and advertisers to a highly engaged young and male audience were attractive. Four years later, not much has changed in Twitch’s pitch other than more ad formats.

A Twitch pitch deck from April 2018 titled “Overview & Capabilities” touts its community of gamers with studies about their engagement and ways brands can get involved. Digiday received the pitch deck, along with a separate deck about Twitch’s audience dated October 2018, from a U.S. advertising agency.

The post Pitch deck: How Amazon’s Twitch is selling advertisers appeared first on Digiday.