Month: April 2019

“As [connected TV] becomes more biddable, you’re going to see the same equalizer take root in TV,” Kait Boulos, vp of strategy and partnerships at Varick, said on stage at Digiday’s Future of TV Summit held this week in Palm Springs, California.

On traditional TV, established marketers are able to lock up inventory through multimillion-dollar upfront deals and lock out so-called challenger brands as a result. But because ads can be targeted to specific audience segments on connected TV, challenger brands can take advantage of their experience pinpointing audiences on platforms like Facebook and take connected TV impressions away from the established marketers unwilling to pay the higher prices that correspond to narrowly targeted ads. “It’s not how much you’re spending but how wisely you’re spending,” Boulos said.

Throughout the event, attendees acknowledged that traditional TV advertisers can be put off by connected TV’s comparably higher prices. These advertisers are used to paying $10 to $12 CPMs to advertise on cable TV networks and skeptical of why they should pay $20 to $40 CPMs to advertise on connected TV. “When you start to look at a $30 CPM, you’re asking a lot of questions,” said one attendee.

Those questions generally boil down to one primary query: Is connected TV worth the higher price? The answer is yes, according to attendees. To convince their TV-loving clients that connected TV is worth the money, agency execs in attendance said they focus those clients’ attention on waste.

Sure, advertising on traditional TV may only cost $10 for every thousand impressions, but how many of those impressions are reaching the advertiser’s intended audience and how many are reaching viewers outside the target audience that happen to also be tuning into a given show? Conversely, ads on connected TV can be targeted so that they would only be seen by the intended audience, assuming the data used to inform that targeting is accurate. And because of that targeting, the advertiser doesn’t have to spend as much money in total to reach the intended audience.

“The CPM can be higher [for connected TV ads], but the actual dollars spent are lower than linear TV because of targeting,” said one attendee during a closed-door session for brand and agency execs.

That’s not to say that digital marketers won’t initially balk at connected TV’s high CPMs, which are “more than challenger brands are used to paying in search and social,” said Boulos. But because these advertisers understand what they are getting in return for that money, they are more willing to tolerate the higher prices.

The post Why DTC brands may corner the connected TV market appeared first on Digiday.

Olsavsky also wouldn’t share if that $800 million investment would increase past the next quarter, but said that Amazon was pulling on all levers to make the window possible: Amazon’s owned and operated delivery systems, Amazon Logistics, as well as third-party partners including UPS, USPS and FedEx were involved in pulling it off.

The bet Amazon is making is that the investment will drive more sales, as well as push more customers to become Prime members.

“It’s as simple as price, selection and convenience. One-day increases convenience and selection in the consideration set for customers. By cutting the window in half, it opens up a lot of potential purchases and conveniences to customers,” said Olsavsky, adding that as of now, Amazon had products available for one-hour and same-day shipping, but that the vast majority of products are delivered in two days. “There are lots of components involved in being there for the customer when they need us. We think this is going to be groundbreaking, and we have this capability because we’ve been at this for over 20 years. We’ve invested in and fine-tuned our logistics.”

Two-day shipping has become the industry standard, and retailers like Target and Walmart have scrambled to keep up with the pace Amazon has set for deliveries. As Amazon has worked to speed up its delivery windows, Olsavsky said, its entire system has functioned faster: More items have become available for two-day shipping than were available before, thanks to the investment Amazon has made in one-day logistics.

Cutting its standard shipping window in half will send a ripple effect throughout the industry that’s already shaking in Amazon’s shadow. Within Amazon’s own ecosystem, there will be ramifications. Sellers should follow where Amazon is spending its money. Right now, figuring out a distribution strategy is step one in selling successfully on Amazon, and third-party marketplace sellers have options to ship items themselves, or pay into Amazon’s Fulfilled by Amazon fulfillment program to have Amazon handle two-day Prime shipping logistics. If merchants can deliver orders in two days, they can be certified Prime-shippers without handing 30% of sales to Amazon. If Prime runs on a one-day standard, more sellers will have no choice but to ship through Amazon, unless they can meet that demand.

“Amazon is customer-centric. They want the best deals and customer service for their customers. That’s always going to be it,” said Selina Heckendorf, vp of e-commerce at the Mars Agency and former category launch specialist at Amazon. “Soon, there won’t be much leeway in how sellers operate — it has to be by Amazon’s rules.” — Hilary Milnes

3 questions with Gail Tifford, chief brand officer, WW
After rebranding to WW, Weight Watchers also rethought its rewards and partnership strategy to attract new customers and reposition itself as less of a weight-loss brand and more of a wellness company. Chief brand officer Gail Tifford spoke to the new strategy.

With the rebrand, how did WW’s rewards program evolve?
In October, we launched Wellness Wins, a points program. Our first reason for doing it was really our mission, which is to inspire healthy habits for life. So, that’s where we start the conversation. Loyalty and retention is a result of that. We reward you with what we call Wellness Wins for tracking activity. And that could be tracking food, that could be tracking activity, attending workshops. What we’re really trying to do is inspire people to track, because we know that the more they track, the more successful they are.

Brands are increasingly intertwining their rewards programs with lifestyle goals. How are brands using WW’s member base to maximize reach?
With brands, I think they’re looking at access to our members to be able to drive awareness of their offerings with a like-minded group of people. Right now, we have 10 partners, like Thrive Market, Obé Fitness, ClassPass and Rock ‘n’ Roll Marathon.

How are retailers approaching WW as a partner?
We announced our partnership with Kohl’s [in January] which is multifaceted. One part is their participation in the rewards program, but more importantly, we will be opening up physical spaces within their brick-and-mortar [stores]. So we will be having programming, as well as selling our products in their stores. There was such a synergy within the mindset of their consumer and our members that we’re taking that partnership to the next level. – Suman Bhattacharyya

By the numbers: DTC ad spend
MediaRadar released a new report breaking down the biggest trends in DTC advertising, compiling data from brands like Casper, Warby Parker and Brooklinen. The study found that:

• Ad spend is still on the rise for the paid-marketing-happy category. DTC ad spend is up 20% annually for five consecutive years.
• Sorry, Facebook, TV is the next frontier. MediaRadar found that DTC brands across the board are starting to spend more on TV. Casper is spending upwards of $30 million per year on the channel.
• Affiliate revenue reaps rewards. DTCs place branded content three times more frequently than traditional brands, with most of the action happening on BuzzFeed and Yahoo.

Other news to know
PayPal is looking outside of the payments business and is now eyeing post-purchase: The company invested $11 million in Happy Returns, a company that operates “Return Bars” in stores, malls and other high-traffic areas to make online returns easier.

Jewelry brand Mejuri raised $23 million in a Series B round of funding, planning to use the cash to open more stores, expand internationally and invest in branding and customer experience.

The cashless backlash continues: Sweetgreen will accept cash again.

Among other executives, Walgreens has hired its first chief digital officer.

What we’ve covered

Amazon’s new rules: As Amazon shifts its sights on supporting brands on its marketplace, brands are figuring out how to succeed as sellers.

Lulule-man: The athleisure brand needs to win over the men’s market. Its stores are at the center of its strategy.

Following the DTC stretch: On Digiday’s Making Marketing podcast, Brooklinen’s CEO explains the company’s approach to going beyond bedding.

The post Amazon’s $800M bet on one-day delivery is about to pay off appeared first on Digiday.

The brand, founded in 2014, opened its first store (“SmileShops”) in 2016 and now has more 247 of them in the U.S. and Canada. It also last year launched a fleet of five “SmileBuses” that travel around the country and stop at cities, college campuses, businesses and sporting events for one to two days.

For SmileDirectClub, physical stores, either standalone or in CVS, lower the barrier of entry and make it easier to fit customers for aligners. The buses, meanwhile, are designed to help fill the gaps between its permanent store footprint, according to Alex Fenkell, co-founder of SmileDirectClub.

“Having SmileShops helps us build personal relationships with our customers in a branded environment and helps with credibility,” said Fenkell. “It gives them the opportunity to ask questions and get answers in real time.”

All DTC brands need to expand their footprint offline in order to scale — but historically, stores haven’t had a robust data-collection process. SmileDirectClub’s SmileShops are an important channel in that they give the brand a chance to collect data on potential customers, even if they decide not to order a kit through the company. Fenkell said the “majority” of appointments are set up through SmileDirectClub’s website, where customers enter their first and last name, email address, and phone number, even before they decide whether or not to buy a SmileDirectClub kit. It’s an easy way to drive customers to both its websites and its stores, while at the same time collecting data that will further help the company in customer acquisition and considering where to expand its physical footprint.

The CVS partnership will also help SmileDirectClub collect more data on what kinds of customers are driven to visit shops located within a traditional drugstore like CVS. While SmileDirectClub was testing its shop-in-shops in CVS, its employees also surveyed shoppers to give CVS more data on how valuable the SmileDirectClub partnership could be. Fenkell said that SmileDirectClub found that of the more than 600 visitors it surveyed over a three-month period, more than 30% weren’t regular CVS customers.

Fenkell declined to share what customer data SmileDirectClub will share with CVS. But the partnership will shed light on what co-advertising is needed, as more drug stores like CVS consider adding more health services from companies like SmileDirectClub. Walgreens has said that it will soon open a primary-care clinic in a Houston store, for example.

“I think there’s really interesting data there [they could collect],” Alice Fournier, an analyst with Kantar Consulting, said. “Where will someone who visits the SmileDirect store then go buy at CVS? So I think there’s a great holistic shopper understanding that then affords both companies hopefully to retarget while at the physical shelf or online.”

That insight will help SmileDirectClub expand into more partnerships. A spokeswoman declined to share the average age or location of SmileDirectClub customers but said that the company did “over-index” on millennials. The company’s internal research has also shown that many of them look to start the SmileDirectClub treatment process in the lead-up to a big life event — for example, after a survey found that the majority of SmileDirectClub’s customers were getting ready for a wedding at a future date, the company decided to partner with David’s Bridal, allowing customers to save $100 if they use a promo code from David’s Bridal.

Corporate partnerships will be a continued focus for SmileDirectClub’s retail strategy, according to Fenkell. SmileDirectClub has struck partnerships with companies including Facebook and Pinterest to bring the SmileBus to their offices for a day. Additionally, both Aetna Dental and UnitedHealthcare earlier this year announced that they would start covering SmileDirectClub’s services, and there are plans to bring the SmileBus to UnitedHealthcare’s headquarters for the insurer’s employees to check out the service.

“Our presence meets the needs of differentiated, growing customer demand,” Fenkell said. “We want to be where the customer wants to engage.”

The post How SmileDirectClub is building out a physical retail network appeared first on Digiday.

He joins Jeremi Gorman, Snap’s chief business officer who previously served as head of ad sales at Amazon and Jared Grusd, chief strategy officer who was CEO of Huffington Post and Julie Henderson, chief communications officer who served in the same role at 21st Century Fox. But Mitchell comes with his own reputation for authenticity and creativity within the brand world.

Sources that have worked with Mitchell told Digiday that he has long understood and respected Snapchat as an ad platform and other social apps. He’s pitched creative campaigns, catered to social platforms, in his time at Nascar, Gatorade and McDonald’s. For example, McDonald’s did a takeover of Reddit in December, working with agencies OMD and We Are Unlimited.

(Mitchell also does maintain an active Snapchat account, but it’s “private” and for friends only, per a rep.)

“Kenny has a track record of considered bets that have created and sustained relevance for his brands without ever resorting to empty stunts. Gatorade could have been considered ‘conservative’ as a marketer, but under Kenny, they became a Snapchat case study for their sales team when pitching other brands,” said Paul Kelly, chief revenue officer of Highsnobiety.

Snap has previously highlighted Mitchell and his work with the company. For its 2017 IPO roadshow video, Snap featured three marketers to share their (bullish) view on Snapchat as an ad platform. The first guest was Mitchell, who touted the success of an animated video about Usain Bolt they had shared on Snapchat.

“Thirty percent completion rate on a seven-minute video — you don’t get that on the other platforms,” Mitchell said.

That video wasn’t Mitchell’s only case-study-worthy success on Snapchat during his time at Gatorade. He led Gatorade’s dunk AR lens during the 2016 Super Bowl, and he oversaw Gatorade’s AR game, featuring Serena Williams, during the 2016 U.S. Open.

Inside Snap, Gatorade’s Usain Bolt video served as its long-form video case study for advertisers, perfect to show that advertising was welcomed, not hated, by users, and video longer than 10 seconds could work on the platform. Sources said Mitchell even evangelized vertical videos within Gatorade.

Snap CEO Evan Spiegel emphasized Mitchell’s Snapchat knowledge in his statement.

“Kenny’s consumer marketing expertise and his deep understanding of our products will be a great combination for Snap. Throughout his career, Kenny has demonstrated his ability to successfully execute innovative, global marketing campaigns, many of which have leveraged our own vertical video and augmented reality products. He’s a natural fit to join our team and lead marketing as we continue driving the positive momentum we have in the business,” Spiegel said.

Mitchell was also committed to following youth culture and media, sources said. Kelly worked with Mitchell during his time at MTV and later at AwesomenessTV. Mitchell had led Gatorade’s long-form scripted drama series called “Versus” about female teen athletes for AwesomenessTV, which premiered on Verizon’s go90. He also worked on an MTV documentary about high school basketball called “Nothing But Net,” which was cosponsored by Gatorade and Nike.

“As a partner, Kenny gets the best out of the people who work with him. He has a very clear vision but is open-minded and pragmatic. At MTV, he supported a joint initiative with Nike knowing that while another partner means another voice, but it served the ultimate objective,” Kelly said.

Mitchell’s willingness to take risks and collaborate has been met with respect externally and internally. One of Mitchell’s colleagues at Gatorade in the marketing department described him as an “amazing leader” and “extremely smart.” The marketer also noted how Mitchell will be reuniting with Jeff Miller, Snap’s global head of business marketing, who served as director of digital strategy at Gatorade from 2014 to 2016. “They were the Gatorade digital brain trust,” the marketer said.

Mitchell starts at Snap in June. He’ll be moving from Chicago to Los Angeles to work out of Snap’s headquarters. Snap recently launched its new Android app and with it a consumer marketing campaign, which includes running digital ads on other platforms like Twitter.

“I think what I’m most excited about is that he’s proven he understands the platform. He did a long time ago when others thought it was just a joke,” said a Snap employee.

The post ‘He understands the platform’: Snap’s first chief marketing officer has a track record for success on Snapchat appeared first on Digiday.

PopSugar took a more cautious approach to launching a U.K. presence than other U.S publishers previously have. Rather than attempt to monetize its U.K. audience immediately PopSugar hired a lean editorial team in London in 2012. That team remained in place for four years figuring out what content worked for the local market, and who the audience was. Those insights proved invaluable when it came to differentiating its editorial proposition and giving the commercial team a good base to start pitching to advertisers in 2016, according to PopSugar chief revenue officer Geoff Schiller. That’s a good four years without monetizing the U.K. “We didn’t want to build the plane while it’s in the air; that can be haphazard,” she said.

A go-to method for publishers monetizing overseas operations with lean teams is often to set up programmatic advertising which can be managed from the U.S. office. But that was never an option for PopSugar, whose business model for the U.K. is based on direct native advertising deals and branded content partnerships with both agencies and direct advertisers like skin-care brand Aveeno. Instead, the U.S. team waited patiently.

Ad revenue in the first half of this year is on track to grow by double-digit percentages compared to last year, according to Schiller, although he wouldn’t reveal specifics. PopSugar has forecast that it will grow revenue by 43% in 2019, which will put it on track to be profitable this year. Although the company produces video, the best margins are still to be found on text-based branded content articles, which drive much of the growth, he added.

PopSugar has widened its U.K. editorial mandate to include parenting, lifestyle, beauty and fashion content, and appealing beyond Londoners to women across the country, according to Schiller. Quick-fire news articles with lengthy headlines such as “These Cats Who Live Across From Each Other Have the Romance of the Century, and My Heart Can’t Take It” and “This Mum Is Thanking a Flight Attendant Who ‘Swooped’ In to Help Her Son With Special Needs” are typical fare on the site.

In the U.K., the site has 3 million monthly unique users, according to Comscore. The publisher claims it reaches 1 in 4 millennial women. Even so, competition remains high — with titles like Bustle, Refinery29, Cosmo all targeting similar audiences — and PopSugar has room to grow when it comes to brand recognition in the U.K., according to media analysts.

“Several media companies claim their ‘unique’ ability to reach women 18- to 40-year-olds, but in reality, there are many of them attempting to do pretty similar things online,” said Alice Pickthall, analyst at Enders Analysis. “In their established U.S. business, they have monetization expertise beyond native ads, powered by Taboola, and branded content, so they have potential to move into brand licensing, live events and further monetization of ShopStyle.”

In the U.S., PopSugar creates its own technology on behalf of brands, and the U.K. commercial team can benefit by cherry-picking what would work best for the U.K. market. For instance, the U.K. often uses Trend Tank — the proprietary predictive trend tool that anticipates what stories will explode on social media platforms. The tool has proved popular with brand clients in the U.K., according to the publisher.

“U.K. clients want to leverage all our data and understanding and be prescriptive with them on how to connect with that audience at scale,” said Hayley Sharp, U.K. commercial director at PopSugar. “They want to utilize all our credentials rather than create white-label content for them like the U.S.”

The post How PopSugar plans to expand its UK business appeared first on Digiday.