Month: April 2019

At Digiday, our mission is to create change in media. Every day, we chronicle the quest for sustainable media business models while ourselves operating a business for the long term.

One key plank in many sustainable models is direct audience revenue. The “pivot to paid” is a topic we’ve covered in detail, and we’ve been on our own journey for the past 18 months with Digiday+, our membership program. Later this week, we are expanding Digiday+ to become a core part of the Digiday content experience.

In short, that will mean Digiday+ members will have unlimited access to all Digiday articles, while non-members will be capped at a limited number. (Typically this will be four, but depending on your location and other factors you may receive access to more than four, or potentially fewer.) We’ll continue to offer free access to our newsletters and podcasts. But we will also reserve certain articles, as well as original research, for Digiday+ members only.

We will continue Digiday+ as a membership model. Digiday began 11 years ago with an event that brought together publishers trying to figure out their business models. Community has always been at the core of what we’ve done. We will continue that with benefits to Digiday+ beyond full access to content, including member events like our live podcasts and preferred access to other Digiday events. Digiday+ members also receive our quarterly magazine, research reports, recaps from each Digiday summit and more.

Through the end of May we’re offering an introductory 3-month membership for just $99 for first-time members, and enterprise packages are available at larger discounts for groups of five or more members from a single company.

Discounted membership is also available for students and non-profit organizations. Membership for students is available for $99 a year or $25 for 3 months, and annual membership is available to qualifying non-profit organizations at a 50% discount.

The expansion of Digiday+ is an important initiative for Digiday Media. We’re proud to have built a growing, profitable media business of 80 employees, with offices in New York and London, without any venture capital backing. We want to provide one example of a media company building a sustainable model, and the growth of Digiday+ is a critical part of that foundation that’s allowed us to have our journalists focused on creating original, differentiated reporting. Digiday+ allows all of us in the newsroom to focus on creating valuable content that’s worth paying for.

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Right when Cristina Angeli, then-CMO at Stitch Fix, joined the company in 2015, she asked her team for the documents they used when marketing for spring.

“I remember being told, ‘Oh we don’t go by seasons,’” Angeli, who joined the then-startup after stints at Adidas, American Eagle and Lane Bryant recalled. She told her team that they should start thinking about how to organize campaigns by season, because shoppers have been trained by mass retailers to shop for certain items during certain seasons — like for jeans in the fall — and “it would behoove [Stitch Fix] to play on this marketing cadence or fashion cadence so we can be top of mind or an option for people looking for jeans.”

The post DTC startups are hiring grown-up retail talent as they mature appeared first on Digiday.

Facebook Watch has been a roller-coaster ride for video creators and publishers since the social network debuted the video platform in August 2017. After a slow start, in 2018 Facebook rolled out Watch globally, and its mid-roll ads began to generate better revenue for creators and publishers, increasing confidence that Facebook could legitimately contend with YouTube. But through the start of 2019, Watch appears to have hit a rough patch, at least for creators.

In the latest in our Confessions series, where we exchange anonymity for honesty, a video creator with more than half a million followers on Facebook Watch said that monetization has been weaker in 2019, creator support from Facebook has been lacking and issues with reach and Facebook’s publishing tool have made Facebook’s video platform inconsistent for creators and YouTube’s more alluring by comparison. The creator said they are raising these issues in the hopes that Facebook will make changes to address them. The conversation has been edited for length and clarity.

A Facebook spokesperson did not provide a comment by press time.

You have a show on Facebook Watch that has more than a half-million followers, but you’re considering redirecting your viewers to watch you on YouTube instead. Why?
It’s just due to a lack of stability in the Facebook platform. There are so many changes on a month-to-month basis; it’s really a hard environment to thrive in. Some months, it’s great on Facebook. Some months, they’re doing an update or tweaking the algorithm. They’ve had a lot of issues lately where Facebook’s not even functional, and if you’re posting episodes at the same time, nobody’s watching those. And there’s not the communication with the creators on it. I’m still doing stuff with Facebook and still want to do stuff and want Facebook to be successful. But when stuff is so haphazard, you want to have stability, whereas a creator, you create income to keep making videos.

You fund your show out of your own pockets. Are you able to make that money back through Facebook?
This is on Facebook’s plus side. I have done really well over the last year. I’ve made more money than I’ve spent on the show. But the reality of the situation is, when you’re self-funding it, if you get a month when there’s almost no revenue, you’re just like, how in the world did it go from pulling significant income to suddenly you can’t buy a Big Mac with what you pulled in. You wonder, do I make next month’s videos? Overall, if you averaged it out, I’ve done well with Facebook. But what Facebook is doing wrong is the lack of consistency. YouTube has its flaws too, but I’m looking more at it just because it’s been more stable.

You mentioned months with almost no revenue on Facebook. Have you had months like that?
For a particular month. But I don’t look at it as a monthly breaking even. I look at it as how much have I spent budget-wise over the course of a year. Over the year, yeah, it’s made money. It’s made quite a bit of money. But if you go from $10,000 to $1,000 in a month or suddenly for a week you’re making $100 — and it costs way more than that to make videos — you’re up a creek if it doesn’t pick up the next month. This year, characterizing 2019, it’s been a lot weaker for Watch. It’s been a lot weaker for Facebook monetization. It’s been very roller-coastery.

Has there been any communication from Facebook to explain the weaker monetization in 2019?
They said they had a bug that, in one particular month, affected reach across all pages, and it should be returning back to normal. But that was not communicated until after you’ve had a terrible month and are sitting there wondering, is this the new norm? And that’s the big thing. You’re sitting there wondering, is this going to be something I can make money off of or not? They change things all the time, and that’s the problem. It’s not allowing a stable environment.

The nature of the business [for digital video creators] is things go up, things go down. But I’ve seen weeks where you’re making a couple of thousand dollars and then suddenly you’re like, what the hell? It went from $500 one day to $7 the next day. That’s not just videos going viral. Some kind of change happened. Suddenly you’ve got a video that’s getting a million or 2 million views, but you’ve only made what it costs to go out to dinner. As a creator who’s not like Unilad or one of these big publishers — I make this stuff myself — it doesn’t even have to be hugely profitable. If you know you can make a stable amount of money off of Facebook, personally, I’d stick with it. I like Facebook as a platform. I think it’s got a lot of potential and can compete with YouTube. I just think that they’re kind of shooting themselves in the foot.

How would you characterize the level of support you’re getting from Facebook today, and is that something you’ve seen change over the past year or so?
There was a lot of excitement early on, and it was really great. That’s what’s hard for me. I’ve had a lot of great experiences with Facebook. I don’t want to be 100% negative. But as time’s gone on, there has been less support. Just getting your questions answered and stuff. They were really doing some great things. Then I feel like Watch ran into some problems.

What problems? And when did Watch run into those problems?
This year. Just weirdness with reach. How did a video get 2 million views and make $50? And then last month, if you had that same video, you made $1,000 off of it? There are bugs in Creator Studio [Facebook’s video publishing tool for creators] where you literally can’t do certain things, important things for regular publishing. And months go by with no fixes. But the big thing is the reach. 2018 made you think Watch is going be — that it’s better than YouTube. But into 2019, it’s been a lot more haphazard. I’ve still made money this year, and next month it may be up again. But it’s hard for a creator to ride on a roller coaster like that.

What’s the level of communication from Facebook when there are dramatic reach changes?
That bug where it was impacting things for a whole month across the board for pages, that wasn’t communicated. I didn’t find out about that until later. And then now, April’s not been a good month. I don’t know why.

Was that bug only impacting video?
I don’t know the details. And honestly, Facebook doesn’t give you the details. I think part of it is they don’t want to admit that there are problems. Who would? They want to look good as a company. But at the same time, if there is a significant one and you’re treating creators like partners, then you probably want to say, “Hey, we are working on an issue. We just want you to be aware that this is not the new norm.”

Aren’t there also stability issues with YouTube, though? Last year, I talked to some YouTube creators who were similarly frustrated by its algorithm constantly changing.
That’s true. But how established is YouTube now that they’re doing that? Facebook just started to get into video, and suddenly they’re already playing with scaling back. You need to let people build a fan base before you start doing that stuff. On YouTube, they’re complaining too, and it’s a legit thing because creators make these companies all their money. And I like Facebook more than YouTube still. I’ve not been really into YouTube. But I’m actually now starting to post more on YouTube than I did before, and the reason is I can’t count on Facebook.

Is this repairable? Like, if Facebook were to come out and say, “Hey creators, we’re sorry. We’re going to do better. Here are all the things we’re going to do better,” would that help to address your concerns? Or would there be a concern in the back of your head that, a month from now or six months from now, Facebook might change its mind?
I’ve not given up on Facebook. I think Facebook can rival YouTube. So for me to pull out totally and say I’m not going to be on the platform, no, I’m not at that point. I’d like to see things stabilize. I’d like to see more communication about the stuff that’s going on. It’s a month-to-month thing. Are you going to keep making videos on Facebook or turn your energies to other platforms? I’ve spent a lot more time this month looking at YouTube. I wouldn’t have spent that time at all had it not been for stuff like this. The problem is, when you have a history of burning publishers and creators and pages, can you be trusted going forward? Hopefully. Like I said, there are a lot of things I like about Facebook over YouTube. Facebook’s a lot more social. There are opportunities to be way more interactive than YouTube even. But they just need to keep a stable course.

The post ‘2019 has been a lot weaker’: Confessions of Facebook Watch creator appeared first on Digiday.

For years, publishers cobbled different tools and services together into a stack that would help them scale their audiences — and make money from advertising — as much as possible. Today, many of them are finding those tools fit poorly into their plans to build consumer revenue streams.

For example, publishers are discovering that many email service providers, such as Campaign Monitor or MailChimp, do not connect easily to the products they use to manage their relationships with subscribers. Instead of being able to sync lists of subscribers with lists of people that should receive certain kinds of emails, staffers have to enter them manually, creating hours of extra busywork.

Conversely, publishers with legacy print magazine businesses are frustrated by how difficult it is to connect those operations to their digital infrastructure, thanks partly to fulfillment providers, who are loath to surrender information that might make them less important to their customers. One fulfillment provider recently took more than nine months to build an API that would give a client access to information about their print readers, said Melissa Chowning, the founder of audience development consultancy Twentyfirst Digital.

These challenges underline an issue that could plague digital media for the next several years: The consumer revenue stack is still coming together, and it may take years for the publishing industry to develop the corpus of knowledge and tools needed to pursue those revenues effectively.

“We [as an industry] are still learning on the consumer side,” said Fran Wills, the president of the Local Media Consortium, a trade group that helps negotiate pricing and deals on products for local news publishers. “Just like the tech stack in advertising evolved over time and there are some best practices that publishers subscribe to, the consumer tech stack is evolving.”

While the digital advertising ecosystem is constantly changing, its list of dominant players and tools is largely settled, which compels vendors to build products that play well with key ad tech products. The consumer revenue space is different, with only a few 800-pound gorillas setting the rules for how publishers might build or manage relationships with consumers.

What’s more, the few end-to-end solutions that are available in the market can be pricey — choosing to use Salesforce for email, CRM, DMP and other services can cost more than half a million dollars a year. Most of the companies in the consumer tech space are handling just one facet of that process. That creates both more uncertainty and more work, as publishers and vendors look to stitch products together.

“It’s too soon to know which tools are going to work together and really support one another,” Wills said.

Google and Facebook, meanwhile, have both launched sets of tools to help publishers drive subscriptions. But both companies remain in the testing phase, and many publishers are wary of giving the duopoly any form of control over the customer relationship.

Google’s and Facebook’s subscription products also remain too cumbersome for small or midsize publishers. One year after launching Subscribe with Google with 17 publisher partners, around four dozen publishers have begun integrating the product into their operations, but fewer than 20 have fully implemented it. To help smaller publishers hunt for consumer revenue, Google instead launched a subscriptions lab in partnership with the Local Media Association, Local Media Consortium and FTI Consulting.

Other consumer tech vendors are trying to expand their products so they can solve for more of publishers’ problems. For example, Piano, which began as a paywall technology, acquired an ESP called Newzmate in February. In early 2019, BounceExchange, which got its start with a pop-up tool designed to help publishers acquire readers’ email addresses, began pitching itself as a device identity resolution provider.

“Our vision is that should all be a seamless experience,” said Piano svp Michael Silberman.

But adding tools that replace existing ones, however imperfect, may not entice everybody. Most publishers — particularly those short on development resources — are reluctant to switch away from one system to another. A large publisher that commits to re-platforming, or migrating from a mishmash of third-party services to a single, integrated one is setting themselves up for a process that can take years and cost millions of dollars, said Pete Doucette, managing director of FTI Consulting’s technology, media and telecommunications practice.

Look past the sticker shock, and such a move might be worth it, Doucette said. But in most cases, publishers lack the flexibility necessary to make bold moves like that. “Most publishers are making incremental decisions, not strategic ones,” Doucette said.

The post In pivoting to paid, publishers run into tech headaches appeared first on Digiday.

Snapchat and the United Nations are teaming up on Earth Day to give Snapchatters a look at what Earth could be like in the year 2100–and it’s not a good look. For 24 hours on Monday, Earth Day, a lens will be available via the Lens Carousel for U.S. users, providing a glimpse of what…

Agencies worried about the existential threat of marketing moving internally can take a sigh of relief, at least, for the moment. Even when clients take specific marketing functions in-house, they often still rely on their agencies to help assist in those areas.

A Digiday survey this month of 73 client-side marketers who manage their company’s agency roster found that 61% of marketers doing creative production in-house will continue to work with an agency to assist with creative execution. For work like media strategy or creative strategy, roughly half of clients still worked with agencies. The picture is different with programmatic: Only 29% of marketers still had outside help for programmatic media buying and about one-fourth used agencies when they did their own search marketing.

The post Digiday Research: In-house marketers typically still rely on agencies appeared first on Digiday.

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Amazon is reorienting its retail strategy, and sellers are starting to feel the effects.

The shift usually goes like this: a strategy is working on Amazon, until suddenly, it’s not. One furniture brand had a two-pronged strategy that combined a wholesale business with Vendor Central, and used drop-shipping to get the bulky items to customers as fast as possible. At the same time, the brand operated a “backup” business on Seller Central, Amazon’s third-party marketplace, where it could more closely monitor customer data, learn more about how products perform, have more flexibility in what products get listed and pad out margins for selling on Amazon.

It worked for the brand, until a week ago, when Amazon began suspending the Vendor Central listings for products that were also appearing on Seller Central.

The hybrid selling model on Amazon has gained traction as sellers realized they could control their own destinies better on the platform if they strike a balance between third-party and wholesale selling models. For a while, this worked for Amazon, too. Its retail business prioritized volume. Now, it’s prioritizing profit and efficiency, and multiple listings for one product aren’t conducive to its bottom line.

It’s one of the many shifts happening as Amazon rethinks its retail strategy. As its third-party marketplace outpaces its wholesale business, with $160 billion in sales in 2018 compared to $117 billion, Amazon is reallocating resources. Its first-party business is focusing in on big-name brands and Amazon’s exclusive and private-label brands, while the rest of its retail business is being funneled to the third-party marketplace, where Amazon is as hands-off as possible. To that effect, its added more seller tools over the past few months and pushed its Brand Registry program to help brands stamp out counterfeits. It all appears to be the lead up to a unified selling platform that would give Amazon full purview over seller strategy.

“When you start to consider what’s your pricing strategy, your fulfillment strategy, and you’re doing business in multiple places, that’s where it can become really complicated for sellers, Amazon and customers,” said John Ghiorso, the CEO of Orca Pacific. “Another reason Amazon is shutting this down is that they were redundant at a certain point. Sellers were running two different businesses, and for what reason?”

There are two lines of reasoning when Amazon makes decisions regarding who can sell where. If it’s a major brand whose business Amazon wants to control in Vendor Central, it will shut down the third-party marketplace listings, something it’s done to brands like Fossil. If it’s a seller that’s not turning a profit for Amazon to sell it wholesale, it will get punted to the third-party marketplace.

For sellers, an extra layer of scrutiny serves well when considering their Amazon businesses. It’s never been a set-it-and-forget-it business, and now they have to tread more carefully.

“It’s a clear reminder that Amazon is in control here, and always has been,” said the furniture brand exec.

Startup stories
Three retail veterans who have worked from one or more legacy retailers before joining a startup share their advice for others who are considering ditching their corporate jobs.

“I always tell people, ‘Don’t join a startup unless you’re 100% committed to the mission and the passion and you have the drive to do it on a daily basis.’ In the DTC world, there’s no finish line. There’s no companies that have reached maturity where you’d say ‘this company [has matured] and you can kind of coast from here on out.’ Every day is adrenaline-driven, and you have to be prepared for the toll that’s going to take on you.” — Nate Poulin, vice president of merchandising and planning at The Black Tux

“I’ve never worked harder in my life than I have at Stitch Fix. But knowing you’re part of this disruption or change has its payoffs as well. Don’t think of this next step as a cushy office [job] — it is really going to beat you down, in good ways because you’re just working so hard to move the needle and push things through. If that doesn’t sound good to you — like working really hard, and the work’s never-ending, it might not be for you.” — Cristina Angeli, former chief marketing officer at Stitch Fix

“I think it’s important that you’re able to communicate that you’re an innovative thinker, as well as some of the things [in the business] that you see opportunity to improve. Because going to a younger company is all about getting to try new things to improve the business,” — Julie Bornstein, former chief operating officer at Stitch Fix

“The very nature of a new company is such that you’re creating everything from scratch — I’m choosing all of my vendors, which in some ways is scary, because if I make a mistake I only have myself to blame,” –– vp at a DTC brand

— Anna Hensel

3 questions with Leo Wang, the CEO of Buffy
Buffy, a comforter brand, is extending itself to the rest of the home. The company launched in 2017 with a single product — a comforter made with fill from recycled plastic bottles — and CEO Leo Wang sees the brand’s roadmap reaching to every home furniture product, which the brand can create using its sustainable manufacturing process. As DTC brands shift from product companies to category companies, Buffy, which hasn’t raised venture capital, is plotting its growth slowly but intentionally.

How do you consider and plan the growth trajectory for Buffy?
There are two types of DTC brands. One creates a lot of products within a category, like home, and tries to own that space by providing some version of any home product you might buy. Other startups go one product at a time. We fall into the latter. We don’t have the luxury of a blank VC check to launch all the products we want to at once, and put all this working capital into the supply chain. But we lean into that and benefit from that pressure, so we can test more rigorously. Our strategy team is comprised of managing consultants that works closely with the growth marketing team to assess the market size and new product concepts we put out there. We have a tool we use called Buffy Labs. It’s a group of engaged customers we have on speed dial to come in for a focus group or survey around product iterations. We’re launching our second comforter now, and that went through a dozen iterations.

What makes Buffy differentiated?
Getting it right in each product creates a revenue driver, cash booster and new opportunity. There are only 35 of us at Buffy, and we try to be focused at what we do. We haven’t tried to cut any corners for the brand platform that we’ve established, and we haven’t had to do because our first product was successful. That’s the plan for each one. We’re not dropping things day by day, but every time we do, we believe we baked it enough and it’s discernibly different and better and it will disrupt the category. It can’t be a land grab, which is what the startup VC model is. We believe with a strong brand, customers will buy more, but we need to be unit profitable on the first transaction so we can ensure that we have the ability to meet growth targets and have the financial leeway to keep growing.

What are your broader ambitions for the brand?
We want to be a complete bedding company first. Then next year we’re going to be breaking into several furniture items including a sofa, dining table, chair and area rug. We want to bring the same ethos of affordable sustainability with comfort and design to the entire home. What made the comforter successful was people loved the product as well as how it was made. That’s our blueprint for everything. We see CB2 and Ikea as who we’re targeting, but we’re going to do it in a way that’s not harmful to the environment. We see a huge opportunity to lead that shift. How we defined with the comforter that was based on customer interaction. We studied our return rates, we used Buffy Labs, all of that interfacing is really important, so we can do that with everything we make. — Hilary Milnes

By the numbers: Marijuana media spend
Kantar has compiled stats on the state of marijuana ad spend, finding that dollars spent are shooting up in cities where marijuana is legalized. Even as digital marketing remains out of reach for these companies thanks to restrictions, they’re finding places to spend.

• From 2017 to 2018, spend in Denver was up 150%, spend in Las Vegas was up 100% and spend in Los Angeles was up 600%.
• In Phoenix, spend went from $0 in 2017 to $100,000 in 2018.
• Most marijuana ads are for dispensaries and shops and most are billboards—outdoor advertising makes up 84% of total advertising, up 25% year-over-year, per Kantar.
• Spot TV and local magazines are up about 1,000%.
• Internet display and mobile web are up 200%.
• Newspaper ads for marijuana are down 50%.

What we’ve covered

Catch up on Amazon’s retail strategy shakeups:

• It’s shifting resources from private-label to exclusive brands.
• It’s axing purchase orders for vendors that aren’t profitable.
• It’s moving toward a unified retail platform.

The post Amazon is pulling the plug on hybrid selling appeared first on Digiday.

Opinion: Researchers are studying how artificial intelligence could predict risks of premature death. But the health care industry needs to consider another risk: unconscious bias in AI.