Month: May 2019

PopSockets details the problems with unauthorized online sellers: It’s impossible for PopSockets to control the quality of products sold online, the products don’t come with warranties despite being advertised as such, and customers associate the defective products with the PopSockets brand, not the seller. Negative reviews have piled up on Amazon in response.

PopSockets has had a tumultuous relationship with Amazon thanks to counterfeits and unauthorized sellers on the marketplace, as well as strong-arming from Amazon itself. In September, after selling on Amazon for more than two years, PopSockets pulled its business off Amazon. The decision came after the brand tried to shift its business from Vendor Central to Seller Central, through a partnership with a reseller called iServe so it could better control pricing and marketing spend, but Amazon wouldn’t let it.

Overall, Amazon has been exercising more control over how brands sell on the marketplace in an effort to boost its profits. Typically, brands doing high-volume sales on Amazon are kept on Vendor Central, where they sell wholesale to Amazon. Everyone else can fight it out on Seller Central. As part of this shift in strategy, sellers holding brand trademarks have been given more control: Through Brand Registry, these sellers can register their trademark ID numbers and then, through Amazon’s counterfeit-fighting initiative Project Zero, quash counterfeits independently and then report them to Amazon.

PopSockets are now available on Amazon again through authorized sellers. It speaks to Amazon’s weight in the industry: Sitting out all together can hurt brands more. But its fight against fake products continues: CEO David Barnett has said that the company has spent $7 million defending its patent in the past year, and that seemingly “hundreds” of fake products pop up on Amazon and other marketplaces like eBay every day.

“PopSockets isn’t the only one — almost every brand we talk to has these problems. Once their products start getting traction, there are unauthorized sellers that follow, so you have to have foundational elements that protect your brand. That’s a have to have now,” said Fred Killingsworth, the CEO of the Amazon consultancy agency Hinge. Those elements include Brand Registry, a trademark, strict distribution contracts and third-party seller monitoring and enforcement.

Not all companies have the resources to spend so much on brand protection as PopSockets, which did $200 million in revenue in 2018, does, and Killingsworth said the brand’s need to both use Amazon’s anti-counterfeit tools as well as file a lawsuit demonstrates that Amazon’s own measures aren’t enough. As Amazon looks to win over brands that have resisted the platform, it’s a warning.

“The problem is so pervasive, and no one has a playbook,” said Killingsworth. “Amazon’s writing the rules.”

Amazon Go flips cash-free policy
Amazon opened one of its new cashier-free Amazon Go stores in New York City on Tuesday, but with a twist: It will be the first Amazon Go store to accept cash. Amazon still won’t be installing traditional registers in the store, but if a customer wants to pay with cash, they can flag down a store employee, pay and checkout with them.

The news comes a month after CNBC obtained an audio recording of an Amazon executive telling employees at a company meeting that its Go stores would soon start accepting cash. The move was in response to backlash Amazon faced from lawmakers and advocacy groups, who said that stores like Amazon Go would discriminate against patrons who don’t have a credit card. Philadelphia passed a law banning cashless stores in March; New Jersey followed suit that same month. San Francisco’s Board of Supervisors is expected to pass a law banning cashless stores on Tuesday.

Amazon’s not the only one who recently backtracked on the cashless movement — Sweetgreen announced in April that by year-end, all of its stores will accept cash after it stopped accepting it in 2016. But where Amazon goes, the rest of the retail industry follows. If the e-commerce giant has decided it can’t fight the cashless backlash, many other DTC brands just opening up their first storefronts are likely to decide that banning cash is not worth the risk. — Anna Hensel

DTC’s lack of ad spend diversity
We don’t call them Instagram brands for nothing. New data from MediaRadar breaks down where big DTC brands — Casper, Warby Parker, Brooklinen and Birchbox — were spending their social advertising dollars. It shouldn’t come as much of a surprise that for all four brands, Instagram and Facebook account for the lion’s share of budgets.

Casper

• Instagram: 58%
• Facebook: 40%
• YouTube: 2%
• Twitter: 0%

Warby Parker

• Instagram: 43%
• Facebook: 34%
• Twitter: 22%
• YouTube: 1%

Birchbox

• Instagram: 58%
• Facebook: 40%
• YouTube: 2%
• Twitter: 0%

Brooklinen

• Instagram: 90%
• Facebook: 8%
• YouTube: 2%
• Twitter: 0%

What we’ve covered

Instagram kicks. Adidas is attributing a spike in sales to Instagram checkout.

IRL e-commerce. Retailers are using their stores to promote their websites.

The post ‘The problem is pervasive’: Inside PopSockets’ fight against Amazon fakes appeared first on Digiday.

In both cases, Twitter is making upfront commitments to the league, according to multiple sources familiar with the matter. These sources declined to provide additional specific financial details of the arrangements, but generally, the two league executives said platforms are willing to pay either an upfront fee or offer minimum ad revenue guarantees.

While a sports league getting upfront commitments might not raise any eyebrows, what’s interesting about Twitter’s deals is that not every content partner gets an upfront commitment — even in the form of minimum ad revenue guarantees. BuzzFeed, for instance, does not get paid upfront by Twitter for its daily morning show “AM2DM.”

Similarly, Snap also prefers to sign ad revenue-sharing agreements with publishers, but in the past has been willing to offer minimum guarantees, sources said. (More recently, Snap has also been willing to pay video makers — as much as $50,000 per episode — for scripted original series exclusively made for Snapchat.)

A Twitter rep said the company does not comment on the specifics of the financial terms of the deals it has with content partners. A Snap spokesperson did not comment on the record.

Generally, two executives from different U.S. sports leagues described a positive relationship with Twitter, Facebook and other social platforms, which continue to seek out all sorts of sports videos. “We definitely get the white-glove treatment,” said one source, citing the responsiveness of executives from platforms.

Some of this can be attributed to the simple matter of supply and demand. There are more publishers than sports leagues in the world, and therefore it makes sense that “news partnerships” teams at these platforms would be stretched thin relative to their counterparts on the “sports partnerships” team.

There is a logic to it. The more the platforms value a relationship with a specific partner — whether it’s a sports league or a big studio or broadcast network — the more they will be willing to give to that partner.

“You have more leverage, but it’s a function of size,” said another league executive. “I’m sure that the difference between how some of these platforms treat NBC is very different from how they treat Bustle.”

One area where TV networks still have a leg up on platforms is the actual broadcasting of live games. Twitter has livestreamed NFL games in the past; Amazon is livestreaming “Thursday Night Football” games this coming season and now has a stake in the New York Yankees’ YES Network; and Facebook has a deal with MLB to broadcast some games this year. But generally, two league executives said that they expect TV networks to retain their (expensive) live sports deals — mostly because they need to. With linear TV ratings eroding and cord-cutting on the rise, live sports remains one of the few categories that people will still watch in droves. “And unlike news, sports aren’t unpredictable,” said a source. (Outside of the actual games, of course.)

Confessional
“You know what’s great about a coaxial cable? You know how long it buffers? Fucking never. You know how long you can watch through a coaxial cable? I don’t know, but it never fucking buffers. It’s on and it’s always on. You can watch for three hours, and you know what happens? Nothing! Cause it fucking works!” — Executive at U.S. sports league

Numbers don’t lie
80%: Stoli vodka is now spending most of its social ad budget on Instagram.

200 million: Number of people who watch gaming videos on YouTube every day — which is big, but not twice the size of the Super Bowl (which is what YouTube wants you to believe).

56 minutes: Average session time for Bon Appétit’s streaming video channel.

What we’ve covered
Hulu and YouTube are once again the NewFronts winners:

• Hulu and YouTube will once again receive upfront ad commitments from media buyers — most NewFronts presenters don’t.
• Other presenters including Meredith and Studio71 are receiving interest, but the platforms will get prioritized.

Read more about the NewFronts here.

Vox Media aims for 12 TV, streaming video series in 2019:

• Vox Media has a show on Netflix, a multiyear production deal with Hulu and other deals in the works.
• The publisher has gradually built its entertainment studio over the past four years, with a focus on creating unscripted programming across its core verticals such as tech and food.

Read more about publishers and the NewFronts here.

What we’re reading
The fight for the bundle is the war for the future of TV: It’s no secret by now that the cable bundle has become bloated and — for an increasing number of people — too expensive. TV companies are working hard to keep that bundle intact, but this piece argues why they are fighting a losing battle. What’s interesting to me is how the bundle itself changes. People might not want to pay $100 for hundreds of channels. But what about a bundle that includes some live TV, on-demand original and licensed programming, and some other service? That’s what Amazon, Apple, Disney and others are looking to build.

Inside Amazon’s OTT ad pitch (sub required): Business Insider got Amazon’s latest pitch deck for OTT ad dollars, which includes a slide on why Amazon is investing in free streaming video with ad-supported services such as IMDB Freedive and an upcoming news video app.

The question of content quality and Netflix: One common criticism of Netflix is that it has a lot of crappy programming, which ignores the fact that Netflix isn’t trying to just be HBO and only win Emmys, but wants to replace the entire pay-TV ecosystem. It wants to offer shows for those who love “Real Housewives” and for those that can’t get enough of “Mad Men.” A second Netflix piece by Matthew Ball also goes into why Netflix has a Teflon-esque resilience even as it prepares to battle more competitors in the coming year. The short answer? The company has a fantastic head start.

Hulu needs to get bigger, faster: This piece from Mike Shields proposes an interesting question: What if Hulu was once again free for everybody? And could that help the video streaming service “save” TV advertising? It’s certainly true that Hulu is in fast-growth mode right now as the company chases subscribers and more ad revenue. An idea that seems as extreme as being free for everyone isn’t as crazy as you think. (Hulu can keep charging for its live TV service and an ad-free option.)

How Twitter turned its ad business around (sub required): Not that long ago, Twitter’s business was in a heap of trouble as the company was struggling to grow revenue and users. But by focusing on brand marketers and signing content deals with top media companies and sports leagues, Twitter has been able to improve its media business. There is still a ton of room left for Twitter to grow, but based on conversations with publishing and other media sources, the company has forged strong relationships with video makers — and both sides are now reaping those rewards.

Facebook updates video guidelines to prioritize longer, original content: About time.

The post How platforms cozy up to the NBA, NFL and other sports leagues appeared first on Digiday.

So brands who’ve been told to take their programmatic in-house, those investments could be more difficult in the face of all of this?
Some have been led to believe that you don’t need full-time staff to do trading, that you can just set it and forget it based on the signals that you see that drive conversion. But that’d be like in a Marvel Avengers way optimizing to the 50% of the population that you still see, then the Thanos snap happens and those people never existed before, right? I’ve seen this happen already.

What about the Acxiom and Epsilon investments in the face of this?
I am interested to see how both of those investments, long-term, pay out in the era of ITP.

How would you characterize what’s happening now?
It’s essentially the slow death of the cookie that we’ve been waiting for happening all of a sudden happening very quickly. It just started to happen last week, but nobody’s kind of introduced what these investments into Epsilon and Acxiom look like in the face of ITP.

What does this mean for media agencies?
The walled gardens basically are coming out with the solutions to fix this. It might be that we implement multiple solutions on behalf of clients. That’s what we’re doing within our environment so that we can kind of get ahead of this. What they’re all trying to do essentially is prevent data leakage from moving into third-party platforms, like an Acxiom or Epsilon.

All of that comes from this renewed focus on privacy. When you have consumers aware of privacy issues in this way, does that change the job of the media agency?
Everyone was rushing toward a reality where we could have a central nervous system and DSP and a DMP that was plugged in the multiple DSPs and multiple ecosystems. That was going to be the future of behavioral media and the future of advertising. And then there’s a privacy backlash and people being like, “Well, how exactly do you know that I was here on another screen and now they’re on this one? How is my data being utilized?”

Which marketers will be affected most?
The clients that are most affected are the clients that don’t have an e-commerce backbone and are looking at, you know, proxy KPIs as points future conversion. Pharmaceutical clients and automotive clients that had clicks built into knew their econometric models that predicted future outcomes that weren’t necessarily e-commerce-based, have been the most significantly affected.

The post ‘They’ve started to render DMPs useless’: Omnicom Media Group CEO Scott Hagedorn’s state of programmatic advertising appeared first on Digiday.

Traditional media and online budgets are handled by advertisers’ marketing teams, but shopper marketing is run by trade teams, particularly in CPG businesses, because they deal directly with retailers. It’s a setup that has kept shopper marketing budgets largely out of reach for Amazon and Google until now. But with more sales happening online, advertisers have started to rethink how that money is spent.

Large CPG advertisers tend to fund around 60% of their Amazon ads from shopper marketing budgets, said Connor Folley, former Amazon executive and founder of search ad platform Downstream. This split drops to 25% for smaller advertisers due to their marketers not always making the distinction between shopper marketing and general marketing budgets, said Folley. Advertisers are increasingly spending shopper marketing budgets online, and most of that incremental investment goes to search ads on Amazon, he added. But ad tech vendors like Criteo, and increasingly retailers like Walmart and Target, are trying to get in on the action.

At retail performance agency CPC Strategy, shopper marketing accounts for as much as 65% of what some advertisers spend on Amazon or as little as 10%, according to Nancy Lee, senior manager of marketplace channels.

“The magic Amazon has wrought is to bring the media inventory right to the point of sale,” said Alistair Dent, managing director of iCrossing. “Advertisers aren’t treating Amazon as a marketing cost in the traditional sense: It’s a profit center. Within the limits of diminishing marginal returns, they want to spend as much on Amazon as possible.”

For the former head of media at a global CPG advertiser, using shopper marketing budgets to grow spend on Amazon isn’t straightforward.

There was a lot of internal confusion over what part of the business should manage and fund advertising on Amazon three years ago, said the marketer. At that time, the e-commerce team, category team, digital team and marketing team all worked directly with different parts of Amazon, they added. The confusion meant there were times when the marketer’s media agency would negotiate ad deals with Amazon without being made aware of the stock commitments brokered by their colleagues in the category team. When those media and sales commitments weren’t aligned by the advertiser it led to wasted spend, which is why the marketer started to build a team that consisted of sales, trade, content and supply chain execs to figure out how to fund ads on Amazon.

“In-store promotions accounted for around 70% of what the CPG company I worked for spent annually on marketing and advertising, which was why it became a larger part of what I spent on Amazon,” said the former head of media, who spoke to Digiday anonymously. “I needed to find new money outside of digital to spend on Amazon. For some campaigns I’ve run on Amazon, around two-thirds of the budget came from shopper marketing.”

Other advertisers seem poised to make similar moves.

Procter & Gamble, Unilever, Coca-Cola, Mars and PepsiCo are among a raft of global CPG business on the hunt for retail experts who understand that media spend on Amazon is less effective without a well-established e-commerce presence there. Agencies are making similar investments, whether that’s on behalf of clients as is the case for Mindshare across EMEA or the expansion of e-commerce focused consultancies from Dentsu Aegis Network and WPP over the last six months. Until now, the buy side hasn’t always known where the ad dollars should come from to buy ads on Amazon, they just knew they had to buy more ads there, said Maja Milicevic, principal at Sparrow Advisers, who has worked with CPG advertisers in the past.

“We’re catching up now but Amazon is already proactively pitching to CPG advertisers to show them how they can start to move more of their shopper marketing budgets online.”

Many advertisers have struggled to see the difference between buying search ads on Amazon and Google. Larger advertisers have moved large sums of money from Google — sometimes as much as 50% — into Amazon in recent years without really considering how those two platforms worked together, said Amazon advertising and marketing consultant Daniel Tejada. Now, the more progressive clients are looking to incremental sources like shopper marketing to inflate their ad budgets rather than pull from existing search budgets.

“For brands, Amazon search and Google search represent two different types of marketing programs,” said Frank Kochenash, president of Wunderman Thompson North America. For brands with no direct-to-consumer website, Google search is a brand marketing play with the goals of reach and frequency, said Kochenash. However, for those same brands, Amazon is a performance-marketing channel to drive sales at an efficient ROI compared to other sales driving activities.

The post Amazon is winning lucrative shopper-marketing budgets appeared first on Digiday.

Seven years after its launch, Bleacher Report’s mobile app is “our flagship. It’s the best experience of B/R that we want you to have,” said Chris Nguyen, svp of product at Bleacher Report. The app accounts for a large percentage of Bleacher Report’s owned-and-operated audience as well as its owned-and-operated revenue, he said. According to Comscore, 4.8 million people in the U.S. used Bleacher Report’s mobile app in March 2019, up from 3.7 million in March 2018. Despite that growth, the app’s monthly user base remains a fraction of the 19.9 million people that used ESPN’s app in March 2019. That suggests that Bleacher Report could do a better job of communicating to people why they might want to use its app, which is where the Instagram Stories feature comes into play.

One of the main reasons people use Bleacher Report’s app is to get customizable push notifications on breaking news involving their favorite sports or teams. These push notifications can provide a form of social currency if someone finds out about a blockbuster trade before any of their friends, which is why Bleacher Report has seen a lot of people screenshot its push notifications and share them to Instagram. “We know the No. 1 trigger in the app that drives sharing is the alerts,” said Nguyen.

However the potential audience boost from that form of sharing was a black box to Bleacher Report. “We actually had no way of understanding what they do when it’s screenshot and shared. This is a different way of tapping that behavior,” he said.

When people share a post from Bleacher Report’s app to Instagram Stories, a thumbnail of the post will appear in the story, including its title, main image, how long ago it was published, how many comments it has received and how many people have liked the post in the app. Atop the post will appear the caption “Open in Bleacher Report” that people can tap on to install or open the app.

Bleacher Report’s hope is that people will see a breaking news post that a friend shared from its app to their Instagram Story, be bummed that they weren’t the first to know and opt to install the app in order to be the one to scoop their friends in the future. That is why the publisher introduced the feature on April 25 to coincide with the NFL Draft and all the alerts it would be sending out regarding which players each team drafted and any trades that may occur during the draft.

While the feature has been available for a couple weeks, Nguyen said it was too early to share any stats regarding the number of app installs and app opens driven by the Instagram Stories feature so far.

Bleacher Report is not directly making money from the Instagram Story sharing feature. Instead, the idea is that the feature will grow the app’s user base, thereby giving Bleacher Report more opportunities to serve ads within the app.

The Instagram Story feature could help to grow the app’s registered user base. People don’t have to sign up for a Bleacher Report in order to use the app, but they do if they want to comment or like posts in the app. Since Instagram is a social platform, it’s possible that the people who install the app from Instagram may be more likely to sign up for Bleacher Report accounts in order to take advantage of the app’s social features. If they do, then that will make it easier for Bleacher Report to personalize the content and ads that it shows those people across its owned-and-operated properties.

Bleacher Report is able to track which content people are sharing from its app to Instagram Stories as well as what content shared on Instagram Stories leads people to install or open the app. However, it’s being careful with how it interprets and applies that data to the content it produces and the alerts that it triggers. “It’s not necessarily ‘this is the stuff that gets shared most, let’s go create more of that.’ It’s more that we want to make our experiences as optimized as possible for sharing,” said Nguyen.

The post How Bleacher Report is using Instagram Stories for app downloads appeared first on Digiday.

These retailers see an opening to grab a larger share of the pet market as millennials are shopping differently than pet owners have in the past. In 2017, millennial pet owners surpassed baby boomer pet owners for the first time, according to the American Pet Products Association. According to a survey from market research institute GFK, more millennial pet owners actually turn to grocery stores instead of PetSmart and Petco to buy their pet food. Within the pet-food sector, natural and organic pet food are among the fastest-growing segments. And as of 2017, 40% of pet owners bought products online, according to a survey done by market research firm packaged facts. Amazon has built out its pet-care and food category with brand partnerships and private-label brands, while online pet retailer Chewy.com filed last week to go public, two years after it was acquired by PetSmart for $3 billion.

According to Euromonitor International, pet care and pet food are now $52.6 billion and $34.2 billion markets respectively, in the U.S.

“It’s been an interesting time for pet retail in the U.S.” said Jared Koerten, an analyst with Euromonitor International who covers the pet care space. “There [used to be] a very clear distinction between what people called the pet specialty space — mom-and-pop shops, Petco and PetSmart — and your mass retailers. They were two very different universes, and so a lot of the brands and products that were sold in the pet specialty space were exclusive to that space.”

In response, Petco is trying to protect its turf by adding more services to its stores. This week, the company will open an exhibition kitchen in one of its New York City stores, as part of a partnership with DTC brand JustFoodforDogs. The brand markets its product as “human-grade food for dogs,” and the kitchen within the Petco store will make fresh pet food daily. It is also piloting two higher-end stores in San Diego called PetCoach, which place a greater emphasis on pet services. On-site services available at these stores include grooming, training, veterinary care, nutrition consultations, day care, mobile vet house calls and dog walking.

“In an increasingly competitive retail landscape, we’re focused on transforming and further differentiating Petco as a complete partner for modern pet parents by providing a full suite of pet-care services and experiences, both in-store and online, that simply can’t be delivered by mass retail,” a Petco spokeswoman said in an email.

Koerten said that he hasn’t seen any other mass retailers like Walmart go as far as to open in-store vet clinics yet. But now that mass retailers are selling more products that were once exclusive to pet specialty stores, it’s a logical next step.

More attention from mass retailers gives DTC pet brands more partnerships to work with than ever before, who are negotiating for more branded end-cap displays and shop-in-shops, but not all brands are flocking to physical stores. Gabby Slome, the co-founder of DTC dog food brand Ollie, decided last summer to start selling through Walmart-owned Jet.com, its first wholesale partnership. Slome said that Ollie decided to start selling through Jet in part because of the data Jet was willing to share with Ollie about which of its products were selling best, and geographic penetration. Additionally, Jet let Ollie put an insert in its packaging to encourage customers who ordered Ollie food through Jet to then visit Ollie’s website.

“It’s obviously scary as a direct-to-consumer company to go wholesale and retail,” Slome said. “We wanted to pick [a partner] that had a) big reach and b) was interested in trying new things.”

The post Mass retailers are adding more products and services to woo pet owners appeared first on Digiday.