Month: March 2019

HBO and Turner employees are bracing for a bumpy arranged-marriage as AT&T looks to merge businesses that have historically functioned as standalone entities.

HBO CEO Richard Plepler and Turner president David Levy are on their way out at WarnerMedia. As far as shakeups go, these are huge — Plepler had been at HBO for 28 years; Levy at Turner for 32 years — as both executives were credited for helping grow HBO and Turner into the businesses they are today. But as regimes change, so do priorities. And now that AT&T is free of government interference to do what it wants with its $85 billion content bet, sources inside WarnerMedia expect more changes are on the way.

The post ‘Change is coming. It’s about to get rougher before it gets smoother’: Why AT&T is combining HBO and Turner appeared first on Digiday.

For business publishers, being creative on Instagram while staying true to your brand can be a challenge. Over the last year, Bloomberg has been using videos of interactive charts and distilling news stories to power its growth on the platform.

Bloomberg’s main Instagram account, Bloomberg Business, has 700,000 followers and grew nearly 400 percent in 2018. While its overall Instagram numbers are shy of competitors like The Economist (3 million) and The Financial Times (1.3 million), Bloomberg gets more monthly video views, which has powered its growth.

According to Tubular Labs data, Bloomberg has around 2 million Instagram video views a month, while The Economist has around 1 million Instagram views a month and the Financial Times has fewer than 500,000 monthly Instagram video views, per Tubular.

Bloomberg uses video to explain the stories behind the headlines and distilling dense topical issues into minute-long videos.

“We developed an Instagram template for these clips — to ensure that they were uniform in style and appearance — and were careful to cherry-pick the topics that we thought would resonate most with our audience,” said Bloomberg senior social editor Kevin Young. Many of its most successful clips are those it runs on the weekends, which tend to be longer feature-based stories like this on how brands are cashing in on the growing legal cannabis industry (74,000 views) and inside the artificial intelligence strategies of big organizations (26,000 views).

Not only does Bloomberg create more videos, but it has more success in longer videos. The publisher’s most-viewed videos, which get over 50,000 views, average 56 seconds, according to Tubular. The length limit on Instagram videos in the feed is 60 seconds. Since April 2018, it posted 450 videos between 30 seconds and 60 seconds, while only 110 at 30 seconds or less. Average views for videos between 30 and 60 seconds are over 30,000, while average views for videos under 30 seconds are much lower at 5,500, according to Tubular data.

The headlines of Bloomberg’s top-10 most-viewed videos follow a formula too: 40 percent of the top-10 popular videos follow a sequence like “This woman is betting on balloons in space,” or “This coal mine is devouring a 12,000-year-old forest.” While 30 percent of the 10 most-popular videos feature a well-known business leader.

Soft metrics like engagement only go so far. The primary motivation for publishing to Instagram Stories is to drive people back to Bloomberg’s site where traffic can be monetized. On Saturdays and Sundays Bloomberg publishes a “five big stories” sequence on Instagram Stories which features 10 of its most popular articles of the week. According to the publisher, it gets click-through rates of 25 percent for these stories.

Instagram is growing as a traffic referrer for publishers, according to data from Parse.ly, which tracks publishers’ referral traffic. Between January and December 2018, Instagram referral traffic was up 4 percent, growing at an average of 2 percent every month. But its rate of growth is less reliable than other social platforms, signaling that publishers should be wary of it. Publishers with niche audiences on Instagram have done well. As a platform, it tends to need a bit more audience engagement effort.

Around 75 percent of the overall content features stats and charts from Bloomberg’s 30-person data journalism team. The rest is a mix of inspirational quotes from business leaders like Bill Gates and Bernie Sanders, more lighthearted references to news stories, like the arrival of the green tea-flavored KitKat in Europe.

Creators, influencers direct-to-consumer retailers routinely flood Instagram feeds, Bloomberg’s content has the ability to punctuate this, said Jim Meadows, managing partner, strategy, at digital agency Commit.

“They are very upfront about what a post delivers on a factual basis,” he said. “It’s popular because of the validity and depth of the stats they share in an era where audiences have less trust for thought pieces and clickbait headlines.”

There’s a trade-off between keeping posts visually appealing and eye-catching but making sure there’s a coherent style, said Meadows, who points to The New York Times as an example of an Instagram account with a clearly defined style. Publishers in social media feeds are in danger of losing their brand identity.

“You have to show your value through your content because there’s so much choice and competition,” said Meadows. “As a strategy, being on Instagram is imperative; it’s where the most interest in publications sit. If you want to recruit a younger, wider, broader audience, Instagram is a must.”

The post Longer videos are powering Bloomberg’s Instagram growth appeared first on Digiday.

Mike Duda, the managing partner at hybrid accelerator agency and venture capital fund Bullish, doesn’t believe a brand’s new round of funding should necessarily be celebrated. But as an investor, he benefits when it is.

Venture capitalists investing in the consumer brand category right now can ride the hype cycle, pointing to the amount of a buzz a brand creates as an indicator of success, even if they haven’t gotten an actual payout. While there’s more money going into consumer brands than ever before, there’s been little proven about the category by way of big exits. But for now, that’s still no matter: Duda said that for Bullish, having made past investments in a brand like Casper, which still has yet to turn a profit, can be pointed to as a win when the firm goes to raise its next round.

“As much as we romanticize the ringing of the bell, that’s just not going to be the outcome for a vast majority of these companies, but that doesn’t mean they’re unsuccessful,” said Duda, whose firm has invested in DTC brands like Casper, Harry’s, Birchbox, Warby Parker, Peloton and Function of Beauty. “VCs need to have ROI, but so far, VCs have been happy to get a return on hype. The return is what we need to make money, but we look smart for the investments that have a lot of heat.”

Duda discussed why he’s still eyeing new consumer companies as potential investments, why digital brands have struck a chord with customers, and what will happen as traditional retailers and DTC companies make more arrangements. Answers have been lightly edited for clarity.

How do you make sense of the DTC boom in retail?
Direct-to-consumer retail was born because it was offering value where a lot of CPG brands couldn’t.

New direct-to-consumer companies aren’t just a value equation, it’s a value-and-better equation. They’re being transparent or purposeful in their mission statements and representing a purpose to the people they want to serve, beyond just a business model. Most DTC companies weren’t really out to wage war with traditional retailers, but rather the brands that didn’t have a direct connection to customers. Harry’s was born based on a flawed customer journey to buy razors — locked plastic cases in CVS stores. Glossier, Warby Parker, Everlane were all predicated on a broken, inefficient, or opaque consumer path and journey. It’s obvious in hindsight. They could position themselves as direct brands about then learn how consumers work and what they’re looking for.

As an investor, how do you gauge success?
VCs get involved in brands because they want an outcome. The expectation is there. What happens in that trajectory, we’ll see come to roost. If a company has five to seven years behind it already, there’s a track record to point to profitability, returning revenue, etc. Not all DTC companies have stayed truly DTC. Casper is a [regular] business now. They killed the biggest retailer in the space with Mattress Firm. For us, that shows success. Still, at a certain point in time, you have to see a light at the end of the tunnel for viable, long-term success. But if we’re talking about something that’s fetal stages, it’s about what we think we can get to a certain point. At some point, you have to answer: Is this a business that can stand on its own and keep growing, or is it a business that someone else is going to buy?

Do you look at potential investments differently now that the DTC category has matured?
Our standards haven’t changed when it comes to who we’ll invest in. You buy into the people and the plan. We had no idea Casper would be as much of a success as it is. There’s a democratization of information now, which is good and bad. If you’re starting now, you can benchmark other companies and what they did along the way. I’m as interested now in a DTC brand as I was five years ago. We’re evolving our own strategy, and it’s all DTC or bust. We invest in brands. We look for great business propositions as retail is changing.

What’s important to note is raising a lot of money is not a trophy. It’s not a win, but it’s passed off as one. You can see why there’s a lot of frothiness and FOMO and irrational valuations and expectations. Corrections always come through, and they benefit the strong companies and not the weak.

What does that mean moving forward for all the VC-backed companies?
Strong businesses will be able to pick the path that’s best. Weak businesses won’t have as many options. The more capital you raise, the more expectations there are and you close some doors on the way. Legacy companies are embracing what direct-to-consumer companies launch, to offer something new to consumers. Look at Foot Locker: It’s made sizeable investments in some cool companies. That’s the way forward. Early stage DTC companies that were like, “We’re going to kill Foot Locker,” are now like “Foot Locker is our friend.” So what we’re going to see happen in retail is these strong companies getting together.

The post Bullish’s Mike Duda: ‘Raising a lot of money isn’t a trophy’ appeared first on Digiday.

Life as a news publisher isn’t easy. Content can be expensive to produce, difficult to monetize, and often has a shelf-life of just hours or minutes as the news cycle spins quicker than ever.

In an attempt to offset those challenges, news publishers say they are now investing in more “evergreen” content instead, with the hope it will attract a steadier stream of traffic from search and social channels and better satisfy the demands of advertisers.

The post Digiday Research: Chasing revenue, news publishers are producing more evergreen content appeared first on Digiday.

After finding that a majority of its digital ads were not reaching its target audience of women between the ages of 24 and 55, Avocados From Mexico is pushing for digital ad sellers to guarantee its ads hit the mark 70 percent of the time, as measured by Nielsen. But that can be costly to ensure.

Last year, Avocados From Mexico began asking publishers and digital ad platforms to guarantee that at least 40 percent of its digital ads would reach its target audience after the food company saw that only 20-30 percent of its ads were being shown to that audience segment. This year, the marketer is trying to raise its minimum on-target delivery threshold to 70 percent, said Ivonne Kinser, head of digital marketing at Avocados From Mexico.

However, there’s a price to pay for improved accuracy in digital advertising. While publishers and platforms are able to guarantee that the ads reach their target audience — with Nielsen checking that they do — they demand more money in exchange. While Kinser declined to say exactly how much more digital ad sellers charge the brand for the guaranteed on-target delivery, “it’s a lot,” she said. “If it weren’t that much, we would go with 100 percent [guaranteed delivery] at once.”

“Not everybody can guarantee 100 percent [on-target delivery] and still be competitive. Marketers today in the digital space have to really get savvy in tweaking those media strategies,” Kinser said.

Avocados From Mexico’s attempt to cut the fat in its digital ad spending has led to some shifts in where it spends its ad dollars online. Facebook has been able to deliver the brand’s ads to its target audience 96 percent of the time, said Kinser. “They’re the best by far, so we may cut other platforms in order to move more money to Facebook,” she said.

Conversely, native ads, such as the sponsored placements in content recommendation widgets appearing beneath publishers’ articles, do not hit the mark often enough. “We had to reduce native,” said Kinser. Avocados From Mexico continues to buy native ads, but it’s had to come up with ways to spread around its native ad investment to improve the accuracy of its ad delivery. “Let’s say a campaign has six different partners. We calculate the weight of each partner [based on their on-target delivery] so that when we calculate them together that should give us 70 percent on-target delivery,” she said.

Avocados From Mexico continues to invest in native advertising because, while the ads may not deliver the brand’s target audience, they do deliver a good amount of traffic to its site. “The click-through rate of native is second to none when it’s well done,” Kinser said. So Avocados From Mexico tries to offset any off-target native impressions with impressions from publishers and platforms that have first-party data. The brand has found that those publishers and platforms are able to most accurately deliver ads to its target audience.

“Facebook helps a lot because it’s always over 90 percent. So we throw in Facebook and balance partners like native that are good traffic drivers but have a lot of spillovers” by bringing in off-target audiences, Kinser said.

Avocados From Mexico isn’t worried about guaranteeing in-target delivery for everywhere it advertises online. Search advertising, for example, is not part of the guarantee push “because even if someone is not in the target, [by searching for a relevant term and clicking on the brand’s search ad] they are ready to take action with a product or service, so we want to be there,” said Kinser.

However, Avocados From Mexico doesn’t have the budget to always have its ads show up when people search for relevant terms, said Kinser. So the brand has started to test out how it can make sure its ads appear at the right times, like immediately after its commercial aired during this year’s Super Bowl. The brand hired ad tech firm Advocado to tweak its search ads to reach anyone who may have seen its Super Bowl ad during the game’s telecast and searched for relevant terms within two minutes of the ad’s airing. “If we can at least own [those search results] during that micro-moment when our spot is out, then that is worth it,” she said.

Advocado’s technology tags TV ads with a watermark in order to know when their air. Then it plugs into Google’s search advertising platform to find out how much it costs to be the top ad placement on search results pages for queries that incorporate hundreds of relevant keywords. With that information in hand, Advocado then places bids to buy out that inventory for the two minutes after the TV ad aired.

According to Advocado CEO Brian Handrigan, 52 percent of traffic to Avocados From Mexico’s site following the Super Bowl ad’s airing “can be explicitly tied to the keywords we pumped up during those two minutes.”

The post Avocados From Mexico wants guaranteed digital audience reach appeared first on Digiday.

Amazon is growing the reach of Amazon Pay to a range of merchant categories, including consumer electronics, service-based businesses, fashion, home, sports and toys.

While the extent to which Amazon Pay will scale into brick-and-mortar retail is still unclear, the payment method is gaining interest from small-scale, online merchants that don’t have physical stores. For new e-commerce companies, adding Amazon Pay means customers get additional assurance their transactions are being handled by a safe, reliable partner. Amazon Pay means quicker transactions and means of access to millions more customers. But it also means partnering with a potential competitor in a race to develop competitive offerings.

Online apparel brand Lulus said it added Amazon Pay three years ago to build customer trust while it was in an early growth stage. Lulus doesn’t sell through Amazon’s marketplace; rather, it sells through its own e-commerce site.

“At the time we rolled out [Amazon Pay,] we didn’t have the brand awareness,” said Noelle Sader, vp of marketing at Lulus. “Amazon is a brand that people trust and generally have faith in.” Sadler added that exit surveys from customers suggest they are happy with the Amazon Pay checkout experience.

Reducing the number of abandoned transactions is another motivation for brands to add Amazon’s payment wallet. Bombas, an online sock business, said adding Amazon Pay two years ago was part of a bigger strategy to adapt to customers’ increasingly mobile shopping habits. A card on file increases the likelihood of a sale, especially for mobile shoppers. Bombas has added Amazon Pay, as well as PayPal, to facilitate additional mobile sales. According to Amazon, Amazon Pay is used by “tens of thousands” of merchants in 18 countries and an unspecified number of physical store and restaurant checkouts in the U.S., Europe and Japan. It’s still relatively small compared to PayPal; a recent report from Jeff Cantwell, an analyst at Guggenheim Partners, suggested its reach is 4 percent of the number of merchants that accept PayPal (19 million merchants accept PayPal). But Amazon Pay’s expansion to non-Amazon websites will likely constrain PayPal’s total payment volume growth, the report said.

“Checkout on mobile is very different [from physical checkouts],” said Andrew Heath, Bombas’ chief operating officer. “With mobile, you might be just browsing and shopping, but you’re in the middle of a walk and don’t have your credit card.”

A faster checkout experience is increasingly becoming a top customer expectation. According to Gartner L2 data, 72 percent of big-box retailers now offer “expedited checkout options” — methods that include mobile payments like Apple Pay, Google Pay or a merchant’s own mobile wallet solution.

“Brands must prioritize easing checkout friction to ensure customers are not lost as they move through the purchase funnel,” said Griffin Carlborg, senior specialist at Gartner L2’s Amazon Intelligence team. “Amazon Pay can expedite the checkout process and serve as a solution.”

To others, Amazon Pay is more than just one payment vehicle of many: It offers easy access to 100 million Prime members. Unique Vintage, which sells on Amazon and through its own site, has added Amazon Pay as a package of payment vehicles to grow sales.

“Ultra-fast payment methods like Amazon Pay and PayPal are becoming more and more popular for us,” said Abbi Graddy, marketing coordinator at Unique Vintage. Reaching the Prime customer has been a big draw, she added.

While Amazon Pay can help speed up transactions over the short term, it can come with some compromises. According to Carlborg, handing over payments to Amazon means Amazon has control over one part of the transaction, letting it study customer behaviors and use that information for its own objectives, including competitive product offerings. Amazon did not comment on what data it’s able to access from Amazon Pay transactions. The company has previously said payments data from Amazon Pay isn’t shared, and that transaction data is private.

“Any brand considering using Amazon Pay must understand the duality of the partnership,” said Carlborg. “In the short term, Amazon Pay may improve conversion rates, but in the long run, it provides Amazon with competitive insights to capture online sales.”

It’s a concern that factored into nutritional supplement company Campus Protein’s decision to pull Amazon Pay off its e-commerce site after six months. CEO Russell Saks said concern over Amazon getting insights about customer behavior through Amazon Pay, along with the lack of a meaningful lift in conversions, led to a decision to pull Amazon Pay. Despite having pulled Amazon Pay off its site, the company continues to sell through an Amazon Storefront.

“Off past experience, what [Amazon] usually does [with behavioral insights] is they seek out different markets or industries or roll out their own private label lines,” he said.

Regardless of these concerns, some argue that for nascent e-commerce brands, neglecting Amazon Pay means losing customers. A seller who declined to be identified said Amazon Pay is preferable to traditional payment methods, and it’s easy to use for both customers and merchants. Company representatives are also available to address issues quickly, he added.

“My perspective is, what are your options? Amazon is winning in e-commerce,” he said. “They’re a fabulous company to do payment processing — Amazon can tell us if a customer is a fraud risk or not with 99 percent certainty. It makes sense to work with them.”

The post ‘A brand people trust’: Why new online brands are adding Amazon Pay appeared first on Digiday.

Despite its growing influence on U.K. retailer Marks and Spencer’s social media following, Instagram is more an organic play than a paid-for one.

From shoppable posts to influencers, the social network is becoming central to the retailer’s social media marketing. But when it comes to Stories — the fastest-growing part of the social network — Marks and Spencer is still in test-and-learn mode, particularly when it comes to posts for its food business, said head of food content Emma Sleight. While some posts are either ads in Stories or boosted by paid support, the majority of those for Marks and Spencer’s food business are organic as it tries to understand what content chimes with its followers.

“We’ve increased our posting on Stories to at least three times per week for M&S Food, allowing us to maximize our organic reach beyond the main feed,” said Sleight. “We all know that the use of Instagram Stories is on the rise, which means brands have to respond in kind.”

Most of the Stories being shared focus on gamification and polls, said Sleight, with the aim being to “create meaningful engagement” as well as serving as a good test bed for various content ideas. A campaign for the retailer’s Percy Pigs candy range using Giphy last November gained 13.1 million views, for example. Indeed, the goal of stories for Marks and Spencer’s food marketers is to drive brand awareness on Instagram, not to nudge followers off-platform to convert into customers.

“We see Instagram Stories as a high-impact way of reaching our target audience and driving awareness of our innovation and product development,” said Sleight. “Anything that puts the customer at the heart of creative, like encouraging them to tap through gamification or stitching together customer-generated posts, sees a spike in engagements.”

The strategy for clothing, however, seems to be more focused on conversions. The Stories that promote specific products such as M&S Denim are driving users to purchase pages on its e-commerce site. The retailer was not able to share more information on the performance of its clothing brand on the social network.

The difference between the food and clothing parts of the retailer is evident across all of its Instagram activity.

Organic posts, which are posted publicly on the brand’s main timeline, feature lifestyle photos and videos with influencers intended to cement brand awareness on the social network. It posted over 210 different organic pieces of content across its main timeline and as stories in the last 30 days, according to an analysis conducted by analytics firm BrandTotal.

Sponsored posts, which are dark posts that are only viewable by users within the campaign’s target audience, have clear calls to action like “Buy Now” and “Shop Now.” These sponsored posts promote specific products like seasonal collections, include pricing and are conversion based ads.

Interestingly, all of the brand’s campaigns on Instagram, which covers the food, clothing and furniture parts of its business, are running all from its main account, which could become confusing to its audiences if they are not properly segmented.

The post How Marks and Spencer uses Instagram Stories appeared first on Digiday.

Foot Locker isn’t letting the death of the mall brand seal its fate.

To turn around slipping sales, Foot Locker has made investments in moving product more quickly and devised a way to drive online customer in stores, and vice versa. The retailer has also generated a lot of buzz over the past year for its investments in digitally native consumer startups, including a $100 million investment in sneaker resale platform GOAT, $12.5 million in children’s apparel company Rockets of Awesome, a $3 million investment in children’s footwear brand SuperHeroic, and a $2 million investment in Pensole Footwear Design Academy. Foot Locker also invested $15 million last year in women’s activewear company Carbon38 and announced on Friday that it was so confident in the brand that it had invested an additional $10 million into it at the start of the year.

These investments are meant to give Foot Locker more data into what consumers are buying through other channels, and gives the retailer apparel brands whose inventory flow it has more control over.

As a result, Foot Locker has avoided what other mall brands have faced, from declining relevancy to bankruptcy filings. It’s proven itself willing to work strategically with DTC companies — a new phase that has put it in the same conversations as the likes of Walmart and Target — and has several channels that it can turn to for insights into what digitally native consumers are looking for in footwear and apparel.

“[Foot Locker] realized the world has changed,” Christopher Svezia, a footwear and apparel analyst for Wedbush Securities, said. “They want to know more about what the consumer likes, and knowing what trends change very quickly.”

During the company’s fourth-quarter earnings on Friday for 2018, Foot Locker announced that comparable store sales in the fourth quarter increased 9.7 percent. Last year, they decreased by 3.7 percent. Foot Locker also hit a record total for annual sales in 2018 with $7.9 billion. On the earnings call with investors, Foot Locker CEO Richard Johnson pointed to August 2017 as the time when the retailer realized “we need to change the way we did business. We started the evaluation process both in internal and in external view of capabilities we might be lacking.”

Foot Locker makes most of its money through the sales of sneakers and apparel from other major brands — most notably Nike, which accounts for about 70 percent of Foot Locker’s product. In 2017, Nike sales fell in the U.S., while Adidas rose in popularity. Foot Locker wasn’t able to foresee the downturn in Nike’s popularity, and as a result, sales took a hit.

Over the past year, Foot Locker has cleared out inventory by continuing to close stores, and by recognizing, as Johnson said during the company’s first-quarter earnings call this year, that “the peak of product receptivity of our customers is much, much faster from the old days of seed to scale.”

In terms of the in-store experience, Foot Locker this year added what “Nike Pro Athlete” employees to its store — employees who are trained specifically on Nike equipment who can help push Foot Locker’s most popular products in stores.

Foot Locker is also experimenting more with what it calls “off mall” retail spaces as it closes more stores in malls. One example is its new “Power Stores,” which are meant to serve as more of an event space, and a “hub for local sneaker culture, art, music and sports.” Foot Locker plans to launch more than a dozen of these stores in 2019.

Matt Powell,  a sports industry analyst for NPD Group, says Foot Locker has also improved this year in blending its digital and in-store experiences, by pushing more customers to order online but pick up their orders in store. Foot Locker also redesigned the mobile apps for many of its stores, including Kids Foot Locker and Lady Foot Locker.

This year, Foot Locker also redesigned its loyalty program so that members can redeem credit at any of the stores under the Foot Locker brand — which includes Kids Foot Locker, Champs and Eastbay.

Nike still accounts for the majority of Foot Locker’s inventory, so if Nike experiences another downturn in popularity, Foot Locker may find itself in a similar position that it was a year ago, which may explain why Foot Locker made so many investments this year in apparel and footwear startups.

Apparel, and specifically children’s apparel has been one of the retailer’s fastest-growing categories for the past several quarters, which is where Foot Locker’s investment in Rockets of Awesome and Carbon38 may give it an advantage. The investment in GOAT can also help give Foot Locker more insight into how long certain types of sneakers remain popular in the resale market.

“I think the idea here is that the traditional label of retailer vs. brand is gone. Nobody is one or the other today, and so a great retailer has to have good brands they control,” Powell said.

The post ‘They realized the world has changed’: How Foot Locker suddenly became hot again appeared first on Digiday.

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