Month: May 2019

For now, Pro videos will be created as a way to dive more deeply into content that AD editors and producers are already making for the ad-supported version of AD. “This is about wringing another layer of content out of work we’re already doing,” AD editor-in-chief Amy Astley said.

“Behind the Design” is the first series that will be exclusively for AD Pro subscribers, but moving forward, AD Pro is discussing how to create video around industry tentpole events such as Maison&Objet, a home and design event that takes place in Paris every fall. But the plan will be to produce video content that will be relevant to every AD Pro subscriber. Through its first year, AD Pro subscribers should get around two videos per month, a Condé Nast spokesperson said.

Publishers that spent the past five years figuring out how to produce digital video in a sustainable way did so by banking on digital advertising revenue. Figuring out how to make video economically viable for a much smaller but much more valuable audience that also expects a host of other content and services — AD Pro users get exclusive access to Architectural Digest’s archive, exclusive content and trend reports, invitations to exclusive events and access to a jobs board — will be a major point of emphasis as Conde Nast continues its push to launch subscription products for every single one of its editorial titles in 2019.

Though Architectural Digest expects to be able to add some kind of sponsorship or advertising to its videos eventually, series like “Behind the Design,” which will cost more than a series produced in-house, are strictly an audience play.

“I don’t think this is a function of cost,” said Eric Gillin, the chief business officer of Condé Nast’s lifestyle collection, which includes Architectural Digest as well as titles such as Bon Appetit and Epicurious. “In ad-supported media, you can learn what 10 million people will like at the expense of learning what 100,000 people will love. AD Pro is about understanding what people love.”

Architectural Digest is the sixth-biggest video content creator in the home and DIY category, according to Tubular Labs rankings. It has amassed nearly 12 million subscribers across YouTube (1.3 million), Instagram (4.1 million), Facebook (4.3 million) and Twitter (2 million).

AD Pro, created for design professionals, will reach a much smaller audience. Gillin expects to amass 15,000 subscribers in the first year, each paying either $240 a year for an annual membership or $25 per month for a monthly one.

For some things, AD leaned on the infrastructure of its parent company, Condé Nast, in standing up AD Pro. For example, the paywall team that helped stand up paywalls for Vanity Fair and Wired helped build the metered paywall for AD Pro.

Yet in many respects, the resources and manpower that power AD Pro are separate from the ones that run the AD website and print magazine. AD Pro hired a separate 10-person team of reporters to cover the goings-on in major design markets including New York, Chicago, Los Angeles and Dallas. Though AD has its own video team, the publisher hired a separate production team, Noë and Associates, to produce “Behind the Design.”

It hired Noë and Associates in part because AD Pro’s video strategy is not dependent on creating a lot of ad inventory; while Gillin hasn’t ruled out sponsorship for AD Pro’s videos, the chief priority for AD Pro content is an experience that users enjoy (i.e., one without annoying ads).

Condé Nast has been busy pitching itself as a video-first publisher to advertisers, and it is also experimenting more and more with using video to diversify its businesses. Bon Appetit is using a windowing strategy, in which it offers video series exclusively in one digital place at a time, to try and lure its most passionate viewers to install its OTT app. The hope for the videos it is creating is that they will have value for longer periods of time.

“When you have a subscription-based model, you can create the kind of content that creates long-term value,” Gillin said.

The post Architectural Digest expands digital video to B2B subscribers appeared first on Digiday.

“That could have taken three to four weeks in a traditional agency relationship,” said Henderson, who spent 20 years working agency side at companies like Agency.com, Ogilvy and Jack Morton prior to joining Smile Direct Club. “With the speed that advertising and marketing moves today, that’s a significant advantage.”

Smile Direct Club’s 125-person in-house agency, which Henderson leads, is made up of brand planning, communications planning, retail, experiential and creative teams. Working with the company’s internal data analytics and marketing teams, led by CMO John Sheldon, Smile Direct Club’s in-house agency is responsible for all copy and creative in stores and in paid and brand marketing. Smile Direct Club runs out of home ads as well as TV and OTT platform ads, and is “aggressive on virtually all” digital channels, according to Henderson, especially Facebook, Instagram, Google and Pinterest. The size of the agency has grown over the past year, up from 40 people in the spring of 2018, as the brand looks to open more stores, has gone into a partnership with CVS and updates its digital media mix in response to performance on a daily basis.

“Having an internal agency, analytics and media group lets us create individual work for each channel and see in real time what’s working and adjust accordingly,” said Henderson. “We have weekly and daily updates along the lines of, ‘This ad’s performing really well, so let’s expand this across platforms quickly.’ We’re rigorous with analytics. It’s indispensable.”

More brands and retailers are rethinking their agency relationships as in-house creative teams allow for more control, faster decision-making, and more frequent updates to budget allocation depending on how certain campaigns perform. According to Digiday Research, the No. 1 reason clients break up with agencies is that their dissatisfied with the quality of the creative (see full survey results below). It’s not just data-driven direct-to-consumer brands cutting ties: Gap, Inc. brought creative in house last year to better align marketing with product drops, while Walmart broke off its long-time partnership with WPP earlier this year to grow Walmart Media Group. For the big-boxes in direct competition with Amazon, it’s a necessary investment for survival: Sophisticated in-house media operations can drive critical incremental revenue for retailers fighting falling foot traffic. 

On the smaller scale, the goal of the new OOH campaign is to drive people to Smile Direct Club’s five Manhattan stores, where customers can make appointments for aligner fittings. To measure results, the brand is monitoring increases in visits to the stores as well as responses to the call-to-action of the digital billboards: Visitors in Times Square can text a photo to a number and send a selfie to get their photo on the billboard. Smile Direct Club has been testing out-of-home ads in new markets where it’s opened stores to drive as much brand awareness as possible, and has run New York City subway ads in the past. According to Henderson, the agency looks to the brand’s internal data to make decisions on what’s most efficient for its ad spend, and then makes decisions accordingly.

“We’re learning and responding every day to what customers want,” Henderson said. “I’m not the naysayer that says agencies are a thing of the past — it depends on the business. But I’m glad we work internally.”

Mailchimp goes beyond email
In March, Mailchimp announced that it would be leaving Shopify’s marketplace, after Shopify said that it would “restrict partners” that tried to get merchants to leave Shopify. It was clear that Mailchimp was getting ready to offer more services that would rival that of Shopify’s. On Monday, Mailchimp pulled back the curtain on its ambitions, announcing the launch of a new CRM platform that goes beyond the company’s original focus on email marketing.

Mailchimp, which says its focus is on small to medium-sized businesses, now supports Facebook and Instagram retargeting (it previously only supported Google ad retargeting) and added the ability to repurpose content already created in Mailchimp to Facebook and Instagram. It also now gives businesses the ability to view customer lifetime value, based on the formula Mailchimp uses to estimate its own customers’ lifetime values. Additionally, Mailchimp now has a direct-mail feature that allows businesses to send recurring postcards to customers.

“In the marketing world, [direct mail] was sort of written off as an antiquated type of channel. But what we’re finding is in the digital world, your impression time is five to 10 seconds, maybe, with an ad and you can’t ever go back to it,” said Darcy Kurtz, Mailchimp’s vp of global product marketing. “But with a postcard, it’s much more personal because it’s a physical thing: It comes to your home, and you can keep it.”

Kurtz declined to say what other e-commerce features Mailchimp is considering adding. But if the company can convince its customers to turn to Mailchimp for all of their marketing needs, convincing them to one day turn to Mailchimp for, say, their point-of-sale needs is less of a daunting task. — Anna Hensel

The state of the Amazon marketplace
Feedvisor, a data and intelligence platform for sellers on Amazon, released its annual report breaking down what’s on the minds of the people doing business on the platform. In its “State of the Amazon Marketplace” report for 2019, Feedvisor found that overall, the majority of sellers saw revenue increase last year, with about half of that growth being driven by the third-party marketplace.

Also notable: Despite turbulence around changes related to a potential single-platform marketplace, sellers aren’t jumping ship. More this year said they planned to increase their Amazon business, while the number of sellers who said they planned to invest more in Walmart’s and eBay’s marketplaces declined. In general, Amazon controlling how brands sell on the platform wasn’t cause for much concern: Nearly half said that the shift of non-brand sellers from the first-party marketplace to the third-party marketplace didn’t concern them. What’s top of mind instead is increasing ad spend and rates and reviews.

More highlights below:

• 64% of sellers get more than 60% of their annual e-commerce revenue from Amazon
• 70% of Amazon sellers saw revenue growth in the last year. Of those, 61% saw their revenue grow by up to 40%. Nearly half are third-party marketplace sellers
• 37% of Amazon sellers don’t plan to expand to other marketplaces this year, up by 5% from last year
• The percentage of sellers who plan to expand to Walmart (17%) and eBay (10%) declined from last year by 8% and 9%, respectively
• 62% of Amazon sellers have private-label products in their inventory; 25% of sellers have catalogs that are 100% private label
• 45% have a presence on Amazon marketplaces outside of the U.S., up by 8% from 2018
• When asked what areas of business they want to improve over the next year, the top response was strategic advertising (51%). Nearly half of sellers (49%) said their ratings and reviews; 95% of sellers find ratings and reviews important to their business
• 74% are using Amazon PPC advertising to promote their products

What we’ve covered

Google stifles Amazon: Google’s anti-tracking moves could hinder Amazon’s off-platform growth.

Big spenders: Unilever plans to keep buying up more brands, but it’s not laser-focused on DTC.

Safety is still a concern: According to GroupM’s chief digital investment officer, Susan Schiekofer, brands need to have stringent brand-safety guidelines.

The post Inside Smile Direct Club’s 125-person in-house agency appeared first on Digiday.

It’s no secret to news publishers that the speed of publishing in general, is critical. MittMedia has found that average pageviews for articles peak approximately an hour after they’ve published. The graph below shows the average article pageviews against the number of minutes from publishing. The growth curve is much steeper than the one trailing, but most articles have the majority of their traffic after the peak.

“This means the business model for selling content is a long-tail model,” said Magnus Engström, head of data strategy.

The publisher has 140,000 digital and print subscribers, which has doubled since the beginning of 2017. Digital-only subscribers account for just over 60,000. In 2016, the publisher tightened its paywall but this model meant it struggled to get enough pageviews.

“We decided the easiest way to get new readers was through recommendations,” said Katarina Ellemark, product manager at MittMedia. “We trust people a lot more than we trust newsletters, we want people to continue sharing our pieces. This was a soft threshold.”

MittMedia tested the time wall on and off for six months in 2017, turning it on permanently to generate more ad inventory after the publisher had sold out just before Black Friday in November.

“It was a win-win situation,” said Ellemark. “We had people following the metrics closely, and no one was cherry-picking all the articles in the first 60 minutes. The only feedback we got from users was, why wasn’t the feature in the app?” The feature isn’t available in MittMedia’s apps partly because users show different behaviors, reading more articles more frequently in app.

Building the time wall wasn’t complicated. It took eight designers and developers around two weeks. “The innovation for us was doing it so soon after the paywall,” she added. “The gut feeling in the company was, what are we doing, do we really want to drill a hole right through it? But for the users, it’s super logical; it’s easier for them to decide whether we’re worth the price.”

Publishers have opened up paywalls during busy breaking-news periods to drive reach and ad revenue. But the consensus is these fly-by readers from social and search tend to be less loyal and low value. In Sweden, publishers have healthy direct traffic. MittMedia has lowered dependency on referral traffic: 86% of pageviews are direct, social and search account for 5% and 7%, respectively, according to the publisher. MittMedia tabloid Vestmanlands Läns Tidning has 70% of direct traffic, according to Similar Web.

Equally, Swedes have a higher propensity to pay for online news: 26% of respondents in the Reuters Institute Digital News Report paid for online news in the last year, an increase of 6% from the year previous. This falls to 16% in the U.S. and just 7% in the U.K.

Opening the gates to drive reach and volume is one way of growing prospects, the success then depends on the ability to gather data on audiences, said David Gosen, chief commercial officer at Cxense, which helps publishers with content recommendation services.

“Using time can be a valuable part,” he said, “but the overriding subscription strategy has to be reader-led: Serving relevant content to the reader leads to better conversion rates. At its core, future success in the subscription business is unquestionably driven by the AI capabilities to process huge volumes of data to segment and target prospects to convert.”

The received wisdom is, in general, 10% of people will convert; the other 90% need to be monetized through other means like advertising. MittMedia told Digiday in February that churn rate was at that time between 12 and 14%.

“Entering a market you have to be very careful in reducing price,” said Ellemark. “Conversion is a balancing act, and what works for us doesn’t for everyone. The paid content business is an ecosystem, even if you have the best content it needs to be easy to use.”

The post Sweden’s MittMedia increases subscriber conversions by 20% with a ‘time wall’ appeared first on Digiday.

“We can offer fast, convenient shipping options because we’ve built a network of fulfillment assets that are strategically located across the U.S.,” Walmart e-commerce president and CEO Marc Lore said in a press release. “We’ve also done extensive work to ensure we have the right products in the right fulfillment centers based on where customers are located and what they’re ordering.”

The news comes after Amazon executives said during an earnings call in April that the company plans to spend $800 million to make free one-day shipping available to Amazon Prime members. While Amazon can offer a greater assortment of products (currently, 100 million products are eligible for two-day shipping through Amazon Prime), Walmart is trying to woo customers on the basis that they can order products without having to pay a membership fee, like they do with Amazon Prime.

While Walmart and other retailers have always had to play catch up to offer a comparable breadth of shipping and delivery options as Amazon, this week’s announcement shows that the gap is somewhat starting to narrow. For example, it took Walmart until 2017 to offer free two-day shipping on orders over $35 — 12 years after Amazon first offered free two-day shipping with Prime.

Now, Walmart is entering into the one-day shipping conversation at the same time as Amazon. Andrew Lipsman, an e-commerce analyst with eMarkerter, said Walmart’s “willingness to experiment” has been critical in helping it build out a more robust logistics network.

“They really threw every option at the wall in terms of acquisitions, partnerships, everything to build out that delivery infrastructure — and not all of them stuck, but they were willing to eat some of those costs of experimentation,” Lipsman said. “And that’s clearly put them in a position today where something like next-day was even possible. Had they not [made those investments] over the last two to three years, I don’t think there’s any way they’d be able to do this in any sort of credible way.”

Over the past year, Walmart has built out its logistics network by partnering with a number of companies, including Udelv, Ford and Instacart on fulfilling last-mile delivery, as well as investing internally. To that end, Walmart in 2017 acquired a last-mile delivery company, Parcel. It also built out a robust grocery logistics network, increasing the number of stores offering grocery pickup from 1,500 to 2,100 last year. This year, the company plans to make grocery pickup available at an additional 9,00 stores this year, as well as double the number of stores that offer grocery delivery.

Walmart’s also had to add more distribution centers, including ones specifically dedicated to e-commerce. It now has 156 distribution centers in the U.S., up from 134 five years ago. The company also announced that it’s working on building a new high-tech grocery distribution center to open in 2020, which Walmart claims will be able to 40% more product than a traditional distribution center.

Thanks to these logistics investments, Walmart’s e-commerce sales have grown 40% year over year. That gives Walmart more data points to turn to as it seeks to roll out costlier but more convenient delivery methods like next-day delivery, where it will have to start by offering a very tight selection in order to make it cost-effective. Walmart said in its announcement today that the roughly 22,000-plus product assortment is based upon the products that are most frequently purchased from Walmart.com, but the exact assortment available will vary by location.

With next-day delivery, Walmart is also choosing to make it more cost-effective by only including products that can be shipped from a single box, from the same fulfillment center. “This means the order ships in one box, or as few as possible, and it travels a shorter distance via inexpensive ground shipping,” Lore said in the announcement. “That’s in contrast to online orders that come in multiple boxes from multiple locations, which can be quite costly.”

Cost is the biggest constraint Walmart will face as it continues to build out its logistics network. Walmart CEO Doug McMillon said during the company’s last earnings call, “We need to make more progress to improve profitability,” and that “as we continue to enhance our assortment, repeat visits should increase and contribute to improved profitability.”

It’s particularly pressing, considering  Amazon has proven that it’s willing to suffer consistent losses to invest in customer benefits.

The post ‘They threw every option at the wall’: How Walmart is narrowing the delivery gap with Amazon appeared first on Digiday.