Month: April 2019

“Now that OTT is on the rise, clients want to understand it. It’s less relevant to TV buyers but more relevant to digital buyers.”

“We built so much on such crap. People are questioning TV math less because it’s been around for over 50 years.”

“OTT and traditional TV seem apples to apples because the output is the same. But it’s really not in terms of the application of data and being able to target.”

“For us [the value of] OTT is about being able to monitor frequency against the audience digitally.”

“The CPM can be higher [for OTT ads], but the actual dollars spent are lower than linear TV because of targeting.”

“We inherently believe there’s a stronger connection between someone watching a video in OTT. But when you look at the tools that are available to plan and project, the tools are so archaic. We’re making very big estimates and guesstimates to try to compensate for that because we don’t have the tools we need.”

“The best way to transition clients [to OTT] is to help them understand it as another TV channel and not get so strung up about ‘TV dollars that are now being taken by digital.’”

“At the end of the day, there is no new advertiser money. The CEO and CMO are going to be accountable for the share price. And so the question becomes: how efficient is TV?”

On organization challenges
“A lot of the impetus for buying television comes from our brand team. But we judge based on ROI, which we look to our performance team to solve. And they don’t necessarily have a good answer.”

“It’s a struggle organizationally because we don’t have resourcing for TV specifically.”

“Some clients don’t even know they have a problem. It’s because they have a TV [ad buying] team, a digital team, an e-commerce team. They are all in siloes, and so their agencies are in siloes. So they actually have some issues that they don’t even know that they need to talk about.”

“It’s something that’s going to come up a lot more: The whole organizational structure needs to be blown up at the agency level and the client level.”

“You can watch YouTube on connected TV, so where does that fit in your budget? I differentiate less by device because it’s making less sense.”

“We’re a digital agency. On our larger accounts, we’d be working with a traditional agency, so it’d be two businesses fighting for the budget. Clients were getting frustrated and forced us to get more agnostic.”

“The biggest problem is different agencies who worry about giving up power to each other.”

“For the buyers, it’s about control. TV guys know TV and don’t want to learn something new. The digital guys are thinking, ‘I know how to buy digital and now I have to spend time teaching these [TV] guys how to do that?”

“We are a department of 20 people versus 500 people at larger shops. The order came from the top that we’re going to be integrated and figure [digital video and TV buying] out.”

On data challenges
“Big dollar decisions have been made on bad data for a long time, right? It’s always been about getting the industry to buy your bad data.”

“We have almost walked away from the big attribution players because they don’t work. The biggest thing that impacts one’s performance is word of mouth — which does not play into anyone’s model.”

“It’s unbelievable the amount of data we need to put together the attribution picture.”

On the inability to measure
“You can’t plan TV and video cohesively. There are really good ways of measuring a lot of it, but they all come with the trade-off of not everything you want to buy is measurable.”

“The players actively don’t want to be measured. Like YouTube. How do you plan across YouTube and the rest of the video landscape?”

“We rely heavily on digital and social as measurable channels. When marketers can’t see the return, can’t see the measurability, they dismiss the channel.”

On addressable TV anxieties
“It’s a lot of questions [to figure out if companies are selling truly household-level addressable ads]. A lot of phone calls.”

“With linear addressable, which is live addressable, DirecTV and Dish are the two who can go to the household level. It’s important to understand when it’s actually addressable and when it’s zip code-level addressable or addressable.”

“The whole point of addressable is addressing you and your next-door neighbors. If you want to add another layer of people who are like that, that’s great, but it’s not finite.”

“It’s almost like paying twice the CPM for a smaller universe and betting all your eggs that the data is correct.”

“Is it worth it? Is the premium price worth it?”

“I’m fine running in sports and wherever else as long as the right person ends up seeing my ad. A feminine hygiene ad against a dude is completely wasted.”

The post ‘We built so much on such crap’: Ad buyers sound off on the future of TV advertising appeared first on Digiday.

“We’ve done a lot of work in the last few months in understanding where our current guests sweat, and what our assortment is in the activities where they sweat,” McDonald said at the analyst day. And in a statement this week, McDonald acknowledged that Lululemon “has a unique opportunity to push beyond traditional expectations.” At the same time, it’s working to fend off competition from brands like Nike and Adidas, which are trying to make greater inroads in the women’s and yoga markets — areas that have traditionally been Lululemon’s strong point.

The company reported revenue of $1.2 billion during the last quarter of 2018, up 26% the year prior. But analysts worry that the growth won’t last forever.

“Lululemon’s clearly one of the strongest retail growth stories,” Nomura retail analyst Simeon Siegel said in a note to investors earlier this month. “However, it seems either sales or margins are approaching a peak.”

Lululemon is still known predominantly as a women’s brand — at the end of last year, about 70% of Lululemon’s business came from its women’s category. By building out full men’s departments in more stores, the company plans to use them as marketing vehicles to promote brand awareness for its budding men’s business. But staying on brand will be critical: McDonald also said during that the analyst day that it plans to focus building its men’s business by catering to men who participate in the core activities that Lululemon’s female customers participate in as well.

“We have no road map to play in baseball, football, hockey, soccer,” McDonald said.

To drive foot traffic and revenue, stores are also being reoriented around experiences. Lululemon said that by 2023, about 10% of its stores will be experiential. It’s planning to open a new 25,000-square-foot store in Chicago that will have a yoga studio, meditation room and serve food and drinks. It’s also planning to open more pop-up stores that run for a few months. Lululemon said that it had 60 of these stores last year.

That store strategy extends internationally. Lululemon said that the majority of the stores that it plans to open abroad this year will be in China. Currently, the brand has 22 stores in China, and McDonald said during the company’s last earnings call that a “disproportionate” number of the 40 to 50 stores it planned to open next year would be in China.

To drive brand awareness in the Chinese market, chief operating officer Stuart Haselden said at investor day that the company plans to invest more in building up a WeChat channel as well as its own China domain. The company currently has a Tmall store. He also said that Lululemon would invest in community events.

“We’re going to leverage the tried and true community strategies and adapt them to regional tastes and opportunities, and amplify them via new investments in digital,” Haldsen said.

The post How Lululemon’s store strategy is helping it expand into new markets appeared first on Digiday.

Here’s what you need to know:

The key numbers:

• 2.38 billion monthly active users and 1.56 billion daily active users (both up 8 percent from the previous year)
• 2.7 billion monthly active users across Facebook, WhatsApp, Instagram and Messenger (same as last quarter) and more than 2.1 billion use at least one of those services every day
• Added 39 million daily active users (up 20 million from the previous quarter)
• $15.1 billion in quarterly revenue (up 26 percent from the previous year)
• Profit was $2.4 billion (down 51 percent from the previous year)
• 93 percent of its ad revenue came from mobile (compared to 91 percent in the previous year and the same as the previous quarter)
• Average revenue per user is $30.12 in the U.S. and Canada, compared to $6.42 worldwide

What Wall Street wanted:
Facebook overshot revenue expectations, reporting $15.1 billion this quarter versus $15 billion predicted by Wall Street. Facebook’s stock increased by 5% shortly after the report’s release during after-hours trading.

Facebook’s FTC negotiations are ongoing
Facebook has been negotiating with the Federal Trade Commission over the last few months regarding a settlement for its privacy violations, most notably with Cambridge Analytica. As part of its earnings report, Facebook revealed it’s estimating the fine to be between $3 billion and $5 billion, and that the company has set aside $3 billion so far.

“There’s not much more to add on that front,” said Facebook chief financial officer David Wehner when asked on the call.

Stories are growing across Facebook’s apps
Instagram Stories may have been Facebook’s first clone of Snapchat’s Stories product, but the medium has gained traction across WhatsApp and Facebook as well. Zuckerberg said each of the three platforms has more than a half a billion daily active users using Stories.

Chief operating officer Sheryl Sandberg shared last quarter that 2 million advertisers were using Stories, and that’s now up to 3 million. The largest growth in impressions are coming from Stories, but they aren’t bringing in as much revenue since the prices are low.

“Ultimately we believe we can increase demand for Stories … and overtime that will play in increase prices but this will take years, not quarters, so in the near time we’ll see a meaningful discount in prices on Stories,” Wehner said.

 Zuck says its privacy roadmap won’t ‘cannibalize’ public platform
Facebook’s News Feed brings in the bulk of Facebook’s revenue. But when it comes to future products, Facebook is focusing on other spaces, which is concerning when it comes to monetization. Zuckerberg predicted the move to encrypted message won’t have an immediate impact on the ads business. He said it also won’t mean the end of public sharing.

“I expect the digital town square will always be important, but there’s a lot more to build there. Over time, I think there’s a bigger opportunity to the digital living room. We all need to communicate privately,” Zuckerberg said.

Facebook will reveal more of its roadmap publicly during its annual developer conference F8 next week, Zuckerberg said.

Facebook is making more money from more advertisers
Last quarter, Facebook shared it has 7 million active advertisers. This quarter, Sandberg revealed how much all of these advertisers are contributing. Facebook’s top 100 advertisers in the first-quarter of 2019 accounted for less than 20% of Facebook’s total ad revenue, Sandberg said. “This means that our advertising base is more diverse than it was this time last year,” she said.

The post Cheatsheet: Facebook’s facing a $3b+ fine but has 7m advertisers appeared first on Digiday.