Month: April 2019

Google will hold one-to-one meetings with publishers across Europe and a group meeting with publishers in May to further explain the changes and address their concerns. Google has stressed that the changes are not only inevitable for a digital ad ecosystem that’s increasingly shifting from second- to first-price auctions, but that in the long term will help publishers increase yields, and gain access to more bid data.

Google has a history of not consulting publishers prior to rolling out changes that will affect them significantly, and as a result, many remain ever skeptical of its agenda. “It feels like Google is treating us like children, and just taking away more control,” said an executive at a major U.K. publisher who wished to remain anonymous. “Google is also flat blocking other SSPs from doing what they should in favor of their own. Their response is to use Exchange Bidding [which SSPs plug into] but they take a larger cut from publishers for going via EB. It’s a shakedown.”

Google has stressed that many of the changes have been misunderstood. “Our move to first-price auctions in Google Ad Manager, which includes unified pricing, will create a more transparent ecosystem with consistent rules for all sources of demand,” said a Google spokesperson. “As always, we will work closely with partners to bring their feedback into our product development process.”

Here’s everything you need to know.

Why publishers are worried
The areas of contention for publishers center on two prime changes wrapped into what Google calls “unified pricing” — changes it has claimed are a necessary condition of its shift from a second- to a first-price auction.

One change caps the number of rules a publisher can set for its floor prices at 100. Large publishers typically use hundreds upon hundreds of rules for different buyers, including Google. In restricting publisher control of that, it enhances Google’s, publisher sources claim.

Typically, publishers set their floor prices higher for Google, according to sources. Now they will have to set the same floor prices for all exchanges and SSPs. So Google will, in theory, pay less for what they buy, and that’s where publishers could lose money, according to said Andrew Beckman, COO of ad tech vendor Sublime. The flip-side is that it may open up more impressions being bought, as publishers could have previously priced out Google, but now may find they buy more, he added.

Before the rise of header bidding, Google had a last-look advantage on all inventory. Google has pledged it will eradicate the last look, as a part of these changes. But not everyone is convinced. Google’s last-look advantage was the instigator for header bidding, and a shift to unified pricing marks its return to its former dominant position, added Beckman.

“Google is restocking the odds to ensure they still keep that [last-look] information. No one else has it, and publishers won’t be able to control what Google pays for it,” he added.

Google has claimed the changes should make header bidding work more effectively in a first-price environment.

Not all publishers in the U.S. are opposed to the changes. “Fair competition is the best thing for the programmatic industry. Google’s removal of last look is an example of this, and we have always supported these types of initiatives,” said Jason Tollestrup, vp, programmatic strategy and yield at The Washington Post. “The switch to first-price auctions will help us remove many of the rules we currently have in place enabling buyers to see the true value of ad inventory on our site.”

Google’s bid-data pledge
Some publishers are concerned that Google’s claim that the unified pricing changes will provide better transparency rings hollow. “Publishers have slowly started to open the black box [nature of the whole ad tech ecosystem] and get more access to information and understand the value of our inventory and deploy smart pricing tactics,” said an executive at a major U.K. publisher. “But the tools we have used to set the many different floor prices we need for different buyers are being stripped away. It feels like this change is one step forward and two steps back for publishers.”

Google has stated it is open to changes should the 100-rule limit prove to be totally rejected by publishers. A further promise: Google will share more bid data than they have previously. Currently, buyers can opt in or out of allowing their bid data to be shared with publishers. Google will then share that data from opted-in buyers with publishers. For instance, all auction data for a single impression will be shared, such as who bid and for what price (from those buyers that opted in). Google will now remove the ability for buyers to opt in and out, as a result of the unified pricing changes. The result: Publishers should get better visibility across each auction to help inform their own strategies.

However, some publishers believe that having an uncapped number of rules provides a necessary buffer against the rise of bid shading — a technique developed by ad tech vendors to help ease buyers’ transition from second- to first-price auctions by calculating a bid price that’s in between the two.

Second-price for AdWords
Confusion has been expressed over the fact Adwords will remain second-price, and that in theory will allow for a last-look capability — something Google has claimed it will scrap. AdWords is used predominantly for search marketing so works on a CPC basis, but often then converts the CPC to CPM which will then be passed through as second-price in Ad Manager. Whereas now buying search ads via AdWords will remain in a second-price auction, but when they’re converted to CPM it will be calculated on a first-price basis.

Ad server migration pipe dream
One publishing executive, who spoke on condition of anonymity, said it has strengthened the urge to look actively for alternatives to using Google’s ad server and exchange. So far, the only publisher to diversify successfully away from using Google’s ad server and exchange is Germany’s Axel Springer — a strategy the publisher says has begun to pay off, big time.

That said, migrating ad servers is a massive undertaking that would take time and suck resource. As such, outside of Germany there is more reticence.

“The scale of an undertaking like moving ad servers is not something any publisher should take lightly. We’ve watched Axel Springer do it, but these changes won’t likely drive us to look for an alternative ad server,” said a publishing executive who wished to remain anonymous.

Of course, to many, that’s part of the problem. To some publishers, that means Google has them over a barrel, and can make any changes it wants. Some ad tech execs believe SSPs may also suffer.

“It’s terrible for SSPs — they will lose the ability to control or set the value of the impression,” said an ad tech executive who spoke on condition of anonymity. “They will lose their relationships with publishers and unique demand. Everything will be centralized around Google and them seeing everything first and controlling the pricing. If it comes down to it, they will influence who gets what depending on how the rules are set.”

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Soon, Tuft & Needle caught the attention of the team at Amazon that is actively looking for high-performing third-party marketplace sellers to collaborate with on exclusive products.

For sellers on Amazon’s third-party marketplace, the game has changed. Amazon is shifting resources to fuel its open marketplace, where business largely runs itself at a high volume, making up 58% of sales at $160 billion. Amazon is reserving its wholesale business for top-tier brands and its own private and exclusive brand businesses. At the same time, it’s prioritizing brands. To make sure that sellers on Amazon are legitimate, Amazon has rolled out policies to make sure brand owners can identify themselves then stamp out counterfeiters and unauthorized sellers. It’s also tweaked its algorithm to favor branded content, advertising spend and external traffic, alongside price and delivery speed. At the same time, the marketplace has gotten so cutthroat that some sellers are resorting to shady tactics, paying out up to $10,000 a month to under-the-radar services that promise to game the system on the sellers’ behalf, according to BuzzFeed News.

More established brands have the resources to fund legitimate strategies and win on Amazon. For Tuft & Needle, success on Amazon can be boiled down to a few key tactics Kerr introduced to his team: Be creative in garnering customer reviews. Build a desirable brand off of Amazon at the same time you’re building an Amazon business. And use the competition’s successes and weaknesses to your advantage, by, for example, tracking the keywords on high-ranking products, then mining their negative reviews to find what Amazon customers are looking for and not getting elsewhere.

“Amazon has changed over the years, and there are new rules. But there are lessons I’ve learned about the system that have stayed true,” said Kerr. “Your goal is that Amazon will understand that you can perform at the scale they want and need. You can if you lean in.”

Amazon was not able to provide comment for this story.

As these changes take place, brands that have developed savvy Amazon strategies are identifying a clearer path to success on Amazon, and through partnerships, like Nod by Tuft & Needle, and promotions, Amazon has shown it will reward the sellers who figure out and play by the new rules.

Rule 1: Use the reviews
“Amazon is a puzzle that keeps getting broken up and needs to be put back together,” said Dan Brownsher, the CEO and co-founder of the full-service Amazon agency Channel Key. “There’s not a silver bullet. But what Amazon looks for is brands that understand what’s going on and what the data is telling them, and making and affecting change accordingly.”

Brownsher, like Kerr, scaled his own business on Amazon in 2013 before launching his agency. At the time, sellers in the marketplace used to be able to find a hot-selling category on Amazon, source product from Alibaba, resell it on Amazon with decent product content and no advertising budget. As long as the price was competitive, it could turn into a bustling business with little maintenance.

Now, the way in for smart product teams is through the reviews. Like Tuft & Needle, Bark, the parent of BarkBox, used a combination of competitive review tracking and review generation to pick up traction when it first started selling on Amazon in August of last year. After spending a full year learning the ins and outs of Amazon’s ecosystem, Bark’s data team set up a search algorithm to mine the reviews of other dog products on Amazon to fine-tune its own product lineup. To generate reviews on the products once they’re live, Bark tapped into its brand ambassador team to test new products with the suggestion of leaving a review if they liked it.

“We used what we could learn from the category players already doing business on Amazon to reverse-engineer our product development,” said Bark CEO Matt Meeker. The Amazon team at Bark looked for high-volume selling products with big margins, and then looked to reviews and ratings to identify opportunities for improvement and differentiation.

Since Amazon doesn’t share much specific customer insight with sellers, reviews can be used instead to gather customer data.

Innovation Department has launched four separate brands on Amazon in the CPG and health and wellness category using customer insight found by combing through competitive reviews, combined with search term data provided by a software partner.

“A lot of people are searching for collagen on Amazon,” said Alex Song, the CEO of Innovation Department. “Reading reviews, we found that taste is often a concern, the look and feel of the package, portable or not portable. There’s a wealth of information, so instead of launching a new business and waiting to get feedback, I look at similar products on Amazon to understand the positives and negatives.”

Rule 2: Build a brand — on Amazon
Amazon’s algorithm now rewards brands that have the resources to establish shop-within-shops on the marketplace. It’s just as important that sellers have A+ premium product content, a brand store where customers can shop full collections, and product video and imagery alongside fair prices and Prime shipping.

This doesn’t come free. Amazon essentially is building a pay-to-play business that favors companies with the budgets to build out enriched content and spend on-site advertising. If they do, they’ll reap the rewards.

“There is too much competition that you can’t just compete on pricing, which will get you involved in a pricing war race to the bottom,” said Selina Heckendorf, the vp of e-commerce at the Mars Agency and former category launch specialist at Amazon. “Building your brand is so important now. The idea that you can’t have brand loyalty on Amazon is going away.”

Amazon strategies, then, initiate off of Amazon. Brands with direct-to-consumer businesses like Tuft & Needle, Bark and the bedding brand Buffy have to split traffic between their own sites and Amazon, because spending time building a direct-to-consumer business then fuels more organic traffic on Amazon. That traffic, combined with an Amazon search ad buy like Sponsored Brand or Sponsored Product, boosts products to the top of results.

“Barriers to entry on Amazon are low,” said Brownsher. “Amazon has created this marketplace that lets you start an e-commerce business overnight. But at the end of the day, if you’re not creating value for the consumer, you’re not going to be successful. If you’re not differentiated, if you don’t have a brand with a following with organic traffic and customer loyalty, you won’t be successful. You’ll be eliminated from the value chain.”

Rule 3: Don’t stay still
Once brands have nailed the fundamentals — Prime fulfillment, advertising spend, product fit, premium content, organic traffic — Amazon likely comes knocking.

It came to Tuft & Needle once the brand started taking over mattress sales on the marketplace. For Prime Day, Song said that one of his brand’s teams is in the process of developing an exclusive Amazon product that will be featured in the “Product Launches” spotlight on Amazon’s homepage on its busiest business day of the year. Working with Amazon opens doors to free marketing spend and access to Vine, its reviewer program.

Proving out success on Amazon in the form of customer loyalty and brand awareness is only becoming increasingly valuable, as Amazon’s seller development team is actively looking for more brands to recruit for the platform, based on search intent. In the third-quarter of 2019, Amazon search data shows that brands like Chubbies, Allbirds, Rothy’s and Away consistently come up in searches but are met with dead-ends on the marketplace, which isn’t a good customer experience.

“It’s giving brands incentives like more data and control in the third-party marketplace in the hopes that they’ll get hooked to Amazon’s business,” said Brownsher. “Amazon’s priority right now is to recruit brands that have shown to have incremental businesses.”

For brands that have built Amazon teams and figured out their strategies, there’s still more room to grow. At Tuft & Needle, Kerr said his priorities are to build out the brand’s landing page and to improve it with better design.

“We’re always looking for opportunities on Amazon to improve our performance,” said Kerr. “The ecosystem changes fast. The big brands want to maintain share and new players want to steal it, so you have to always be careful. No matter your success on Amazon, you’re always on defense.”

The post ‘There are new rules’: How brands are growth-hacking Amazon’s marketplace appeared first on Digiday.

Ahead of Twitter’s third NewFronts presentation next week, Kay Madati, Twitter’s head of content partnerships, spoke with Digiday about revenue growth for media companies on the platform, why this year’s NewFronts will focus on fewer deals, Twitter’s efforts to shore up brand safety on its platform and more. The interview has been edited and condensed for clarity.

Twitter’s payouts to publishers increased by 60% in 2018. What’s behind that growth? More publishers? More content?
All of the above. Since the business has hit its stride over the past two, three years, we have grown to more than 950 global content publishers. We’re doing more content through more partnerships and deals than ever before. Even with the people we were already working with, we have gone back to the drawing board to make those relationships bigger.

Give me an example of a deal that’s gotten bigger.
When you look at our execution around the NBA, for the first time ever, we’re having live game content outside of TV on Twitter. We are going to leverage content tools such as Q&As, unique camera angles, fan voting — going beyond what we have ever done with the NBA before. That can be said about our PGA Tour deal and our renewal of “AM2DM” with BuzzFeed.

Twitter announced 30 new deals and renewals at last year’s NewFronts. The goal this year is to talk about fewer deals? Why?
Pretty much everything we announced on stage [last year], we launched. And pretty much everything we announced that received an advertiser sponsorship — which shows the strength of the business. But volume is one measure of success, and we’re still doing a lot of partnerships. When we looked at 2019, we wanted to focus on how deep we are going with those partnerships, and how these partnerships are engaging communities and creating conversations that keep people more engaged on Twitter. That will be the theme.

But are there past deals that did not work? Is this an acknowledgment that you’re doing fewer deals?
No. On stage, we are going to be talking about fewer deals, but that does not mean we don’t have other deals. We do not have to talk about everything during a one-hour presentation. Partnerships continue to grow and we fully expect to have more than 950 by the end of the year. I didn’t want the message to be that we have a lot of partners. What’s more interesting is what we are actually doing with partnerships.

Has your pitch to advertisers changed?
Our core value proposition is our audience and the communities that exist around the content on our platform. Our audiences are engaged and participating in the dialogue; this is not a place where you watch a half-hour Netflix show; this is a place where you participate and share.

That’s risky, though. You can’t control what people are saying around this content. Has that been an issue with advertisers?
You’re hinting at the larger issues of platform health. I’m not suggesting that isn’t a problem, but Jack [Dorsey] has been clear that the No. 1  priority is allowing people to have healthy conversations. Most of the content we are bringing to the platform inspires people to share, whether it’s the World Cup or working with the PGA Tour or with CNN around a debate. How we leverage some of our machine learning and human reviewers in and around these content executions are still questions that advertisers have. But for the most part, they have come along for the ride.

Are you looking to compete with TV?
Most of our content executions are complementary, not competitive — they have to be. We are not replicating what’s happening on TV. When something happens in the world, it also happens on Twitter. People want to travel [across screens] and be a part of this conversation. It’s not that hard of a pitch. Also, fundamentally, a lot of our advertisers and publishers are wrapped up in the offline iterations of the content we’re bringing to the world. Advertisers that are excited about our executions with the NBA are also buying linear TV ads [on] NBA games and are on the ground at the NBA All-Star Game.

But are you looking to take a greater share of TV ad budgets?
Where the money comes from is less important to me. I don’t go into these relationships with the mindset that need to chase TV budgets, versus digital budgets, versus social budgets. More importantly, we think we are a must-buy. I’m not greedy, I’ll take the money from wherever it comes.

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