Month: March 2019

“The Sell Sider” is a column written for the sell side of the digital media community. Today’s column is written by Ben Epstein, engagement manager at Jounce Media. Auction duplication is the new normal, and it is getting worse, not better.   A common publisher ad serving setup might look like this: Exchanges A, B,… Continue reading »

The post Conflicting Truths About Auction Duplication appeared first on AdExchanger.

If Google Chrome follows Apple’s ITP and Firefox’s ETP to create a cookie blocker that limits third-party tracking, what would it look like? Google is considering its options, according to an article by AdWeek that said multiple teams at the company – not just its advertising division – are contemplating how to limit third-party data… Continue reading »

The post What Would Google Chrome’s Version of ITP Look Like? appeared first on AdExchanger.

“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 Joey Henderson, commercial director at Avocet. As the debate over in-housing and what it means for brands rages, agencies are at a crossroads. They must decide whether to bolster their… Continue reading »

The post Stick Or Twist: What’s The Next Move For Media Agencies? appeared first on AdExchanger.

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. The House Of Mouse One week after Disney closed its $71.3 billion acquisition of 21st Century Fox, the entertainment giant announced its first ever combined upfront presentation in May. That means Disney won’t be participating in the IAB-backed NewFronts, the digital content version of… Continue reading »

The post Disney Pulls Out Of The NewFronts; Twitter Teams Up With SambaTV To Measure Tune-In appeared first on AdExchanger.

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As in-house innovation labs falter and the competitive landscape picks up, retailers are buying up technology companies to gain an advantage — and take back control.

• This week, McDonald’s purchased Dynamic Yield, a marketing technology and data processing company, for $300 million in order to get customers smarter product recommendations online and in the drive-thru lane.
• In February, Walmart purchased Aspectiva, an AI solution that collects product reviews to offer customers more personalized recommendations.
• In 2018, Nordstrom acquired two technology companies, BevyUp and MessageYes, two customer service messaging platforms, to connect store employees with customers to respond to questions and give styling tips in the Nordstrom app.
• In November, Ulta bought QM Scientific and GlamST, two AI and augmented reality startups, to build in new technologies into its digital experience.
• Kroger bought data technology firm 84.51 in 2015 to support its marketing business.
• Target bought last-mile delivery service Shipt in 2017 to help figure out localized deliveries and store fulfillments.

Analysts expect more retailers and retail brands to buy up tech players that have spent years establishing themselves as market leaders in categories like ad tech, big data processing, AI and machine learning, personalization, delivery and cross-channel capabilities — anything retailers and brands aren’t inherently skilled at, but need to master now to compete in an era where Amazon dominates the industry.

The post Retail Briefing: Retailers want to buy tech companies appeared first on Digiday.

Reddit has been maturing as an ad platform over the last year — and it’s paying off. The platform’s ad revenue is expected to reach $119 million in the U.S., according to an eMarketer study released March 27. That’s up from $76.9 million in 2018, and it’s estimated to rise to $261.7 million in 2021, per eMarketer.

Digiday obtained a recent deck from a U.S. ad agency for Reddit. The deck positions Reddit as a “place where people can be their true selves” and as a “home for conversation.” It also brings up brand safety concerns for advertisers, which Reddit addresses in a slide titled “Anti-Evil Team.” Despite this emphasis on moderation and control, an agency executive at a holding company told Digiday their clients still do not buy Reddit due to brand safety issues.

The post Pitch deck: How Reddit is selling ads appeared first on Digiday.

Publishing leaders gathered this week during Digiday’s Moguls and Publishing Summit events in Vail, Colorado to hash out the challenges facing digital media. The event was held under Chatham House Rule, which means discussions were held on the record, but without personal or company attribution.

Here’s a selection of points that were made this week.

On Apple News+
“It wasn’t a close call [to not participate]. We value nothing more than the relationship with the subscriber.”

“You’re not generating subscribers [with Apple News+], you’re getting revenue. It’s going down a rabbit hole.”

“Their pitch was we are going to take over the news business. Join us or get left in the dust.”

On Google and Facebook’s priorities
“I do think the changes Google makes are in the interest of the consumer. I don’t think that with Facebook.”

“Facebook does what’s best for them on a week-to-week basis. Google is thinking longer-term.”

“The lack of transparency from Facebook is so incredibly frustrating. They give you very little important information. Instagram has been a much better partner. They’re a lot more transparent.”

“The SERPs have changed tremendously over the past few years. Today, you’re seeing pages where 40 or 50 percent of the results are Google’s. It’s very worrisome.”

On programmatic advertising
“Is anyone else seeing a soft [first quarter] in the programmatic marketplace? Last year, we had a strong Q1 and Q2, and then in Q3 and Q4 it just fell off a cliff — from a fill perspective. And I don’t want to pull prices down to chase fill. But it’s been a soft quarter”

“Controlling programmatic is the toughest challenge we have.”

“We would normally do $1 million per month on Facebook [Audience Network], last month it was $300,000.”

“The fundamental issue with publishers and programmatic is how do you add value to that ad unit on your side beyond price? My PMP sellers are just asking for three times as much than what sellers can get on the open exchange because our inventory is ‘brand safe.’ But that’s not enough. Because they can bid on our inventory through Amazon, and use Amazon’s audience data, and still get on the same inventory at a cheaper rate.”

“There is less confidence in PMPs in general. We’re seeing a very low volume there.”

“The value in setting up a PMP is having control over the deal ID and the ability to optimize that. That’s becoming less and less strong to buyers because DSPs now are also telling buyers that the open market is safe now. That they don’t have to rely on publishers.”

“The number of requests that I’m getting to expand the data that’s within the bid request [has grown]. I’m getting requests for win rate, the next closest auction price — all of this data that says you bought this at $12 but should have been bidding $6. We haven’t said yes to these requests. But people are starting to push for all this transparency.”

On branded content
“We’ve had a return to editorial sponsorships and partnerships that we used to do seven, eight years ago. There’s a lot more enthusiasm for that right now. They can be seven-figure deals and they can help accrue value to the brand while providing a decent margin — versus doing custom content where the margins are not as great.”

“A lot of local advertisers are performance-driven, not brand-driven. We’ll sell them a brand sponsorship but also go on Facebook and buy on their behalf. Guess which one works better? We just end up doing a lot of low-margin deals.”

“The agencies that are evaluating those plans are using a computerized methodology to calculate a CPM. These are high-quality productions that take real resources. But then they turn around and they say, ‘Our eCPV has to be four cents.’”

On decreasing reliance on social
“We used to have 40 social media people across our brands. Today, we have 22. Social used to be 30 percent, now it’s 10 percent. That’s what we all need to do. You can’t rely on any of them, long-term.”

On influencers and talent
“Own the IP. Talent could leave, but we own the IP. So they’ll have to start something new if they were to leave.”

“[Homegrown talent] can be difficult once they get too big. With one, we had so much trouble getting anything through to her. I remember sitting with her agent and having to go, ‘This isn’t Beyoncé. Some of them have to chill out.”

On new revenue opportunities
“We want all the cannabis revenue. So many publishers are not taking it. I would take it all day long.”

“There is a decline in linear TV. With Netflix, HBO and all of the other SVODs out there being ad-free, there has to be a place for those TV dollars go. That’s gonna be connected TV.”

“DTC brands are KPI-driven advertisers, which is why Facebook works so well for them. They want to move product. So when we talk to them in sales pitches, we need to educate our sellers on having a new type of conversation that they’re just not used to having. They have to learn about CTA and other things that they’re not comfortable with.”

On brand safety
“I look at brand safety as an epidemic in our industry. Consumers don’t care about brand safety.”

On pre-roll double standards
“[CPMs on] six-second ads are getting pressed. [Agencies are] halving it when they go from 15 to 6, but they don’t double it when you go from 15 to 30.”

The post ‘Social used to be 30 percent. Now it’s 10’: Candid thoughts of publishers appeared first on Digiday.

The rise of digitally native direct brands is spurring more interest in new types of financial arrangements between brands and agencies.

The issue is largely that e-commerce founders often don’t believe that agency and brand interests are aligned, leading to most of these new types of companies preferring to create their own in-house marketing departments. In response, agencies have to change up how they work. These new models include equity-based arrangements that involve upfront investments and ownership in the client’s companies; discounted rate cards; “fire-at-will” policies that peg payment to specific projects; or outcome-based models based on specific KPIs. 

The Engine is Red, a Santa Rosa, California-based agency has done both funding and other performance-based models. For equity-based arrangements, founder Chris Denny said that it feels like there is more “control” because “you’re part of a team that makes it work.”

The company is now exploring one model with an upstart cannabis company by developing positioning, branding and packaging. It has an ownership stake in the company, and gives them a discounted rate card, billing them “as needed.” Equity dividends are tied to capital raises, exits, acquisitions or quarterly basis.

The difficulty, said Denny, is making sure that those are calculated over a long term, and he also includes in the model other targets like lifetime value.

“This type of performance model works for a DTC, disruptor brand,” he said. “And that’s a great time to contribute a huge amount of value especially when they are a single acquisition channel in the beginning.”

Outcome-based models have existed for a while. Years ago, performance-related compensation was heralded as the future of the agency business, the idea being that it would stop agency work from being commoditized and also increase trust and strengthen the relationship between agencies and their clients. The issue is that agencies have major overheads. And “outcomes” are a tricky notion — marketing can only have a certain impact on sales, or revenue. But for DTC brands, who have simpler models, these arrangements can be more attractive.

For Denny, this often means lowering billings — he said he’s often charging clients six figures where he would be charging seven. “Clients are exhausted by assuming a huge bulk of risk over a long commitment with little visibility,” said Denny.

Part of that has, of course, led to the in-house movement. And for digitally native brands, many of whom are doing their own marketing work, paying for an agency has to come with some kind of guarantee. The ANA, which has done a number of studies into what’s driving the in-house movement, found in a report this year that there is an “aversion” to using agencies among these brands. “Agencies that can figure out how to align with these startups and their business needs can become critical partners to DTC brands as they grow,” the ANA report found. The trade body found that an increasing number of agencies were creating more outcome-based models or taking stake in the companies.

Matthew Zehner runs a 10-year-old agency, named Zehner, in Los Angeles. In the beginning, his agency took equity from companies that were his clients. In the early years, especially at startups with not a lot left to lose, people would give him up to 50 percent of the company. “It’s all kind of worthless,” he said. Then, the agency experimented with a model where it invested a little in the company, to own between 2 percent and 5 percent. “Our minds have now been, they want to keep costs down and get services but also, we want skin in the game because they want you to work harder.”

One of its clients is an apparel company Dress the Population, which sells wholesale but also online. Zehner is now working on a project basis to help it redesign its site, but also help with a specific challenge, like the problem of managing returns. “We’re business partners now in a solution,” said Zehner.

Most of these arrangements are more common with those types of companies because it’s slightly easier to measure performance when you’re only selling through one channel. Dress the Population’s CEO, Adam Schoenbaum said that there is a real expense involved in paying an agency that simply doesn’t make “financial sense” for a startup. “By us partnering, it creates an amazing situation where [Zehner] can share in the long term upside potential.”

At Horizon Media, a new performance-based agency, named Big, will be aimed specifically at garnering clients in the startup, emerging brands and e-commerce space. The unit will offer data management, buying, channel strategy and everything Horizon provides, except that the compensation model is 100 percent driven by “business outcomes.”

Other agencies like Gin Lane, or the venture capitalist-agency hybrids like Bullish, also offer more flexible work arrangements. Gin Lane, which has made a name for itself as the branding agency behind Harry’s, now has a ventures arm that invests in brands. “It’s important for those involved in creating wealth and ownership, to share in that journey as well,” said co-founder Emmett Shine.

Digital agency Digital Operative has decided to focus its approach on clients in e-commerce, including Amazon. That means working with clients on outcome-based arrangements where the “outcome” is how much sales are being driven to the brand’s DTC site. In some cases, said CEO BJ Cook, he’s created financial models where he has a minimum monthly retainer and a percentage of revenue he earns based on revenue driven to certain channels, like Amazon.

“There’s definitely more interest in these models, now, because of the rise of e-commerce only brands. If I bring this up to a Fortune 500 company, they don’t want to do it,” said Cook.

The post DTC brands force agencies to think of new ways to get paid appeared first on Digiday.

Even as Amazon’s dominance in e-commerce continues to steamroll everyone, Boston-based furniture marketplace Wayfair is quietly building out its growth strategy with a plan to go beyond table stakes like free shipping and quick delivery times.

Instead, it’s attempting an experiment unlike one seen before in e-commerce: Do everything yourselves, not matter how much it costs, and bide your time when it comes to returns.

The post ‘The long game’: Wayfair tries to find a retail lane in the Amazon age appeared first on Digiday.