Month: June 2019

It’s an approach that shows that even at the advertising industry’s splashiest event, Amazon will maintain its frugal company culture. By eschewing the platform playbook of using beaches and parties to appeal to advertisers at Cannes, Amazon is telling marketers that even as it works to bolster its ad business it will continue to play by its own rules.

Other tech giants have used Cannes to show that they can branch out of Silicon Valley and speak agency and brand language, using everything from a giant Ferris wheel (Snap) to an immersive experiential offering about the power of storytelling (Instagram) to showcase their brands at Cannes. Even TikTok, which didn’t launch until August 2018, will have a presence at the festival this year.

Instead of big presences, Amazon has opted to court advertisers using a low-key approach, hosting behind-closed-doors meetings that sources say can offer a reprieve from the hubbub of the festival. While it’s typical for Amazon to deviate from hosting big soirees at marketing events, as the company tends to use industry events including the National Retail Foundation’s annual conference in this way, it has been working to beef up its advertising business lately, pitching its OTT offering and purchasing Sizmek to help play catch up with its ad stack.

Amazon declined to comment on the record.

And while Amazon as a company will have a more obvious presence at the festival this year — with Alexa and Amazon Web Services teams working with the festival and digital agency Huge on some initiatives — the company’s advertising team will once again be pitching advertisers at small hotel meetings.

“They choose to focus on smaller, more targeted meetings and event structures, which is in keeping with their culture — and it works very well for them,” said George Manas, president and chief media officer at OMD.

It’s at these meetings that Amazon will typically offer one-on-one time with executives where marketers can voice issues and talk about what’s working and not working on the platform. The company will also use that time to pitch marketers on what’s to come, explaining new ad units, data and targeting tools, updates to Echo, Kindle, Fire and more and how they can use Amazon as a brand-building platform. This year, it’s likely that pitch will include intel on its Sizmek purchase and what that means for advertisers, said one media agency source.

While the company uses the majority of the time to pitch advertisers on what’s to come it also uses the face time as a way to hear and assuage gripes — from backend tools to sales support issues —marketers have about the platform.

Shunning the splashy parties and beaches that its tech counterparts host for small meetings is in line with the company’s frugal and customer-obsessed culture, according to two former Amazon employees.

“They don’t have a boondoggle mentality,” said Melissa Burdick, a former Amazon Media Group employee and president at Pacvue, a company that provides software solutions for advertisers on Amazon. “They have a frugal mentality. The fact that they’d go [to Cannes] is indicative that they think it’s important, but I could never see them throwing a party.”

The company’s differentiation when it comes to Cannes has to do with its foundation, said Anthony Reeves, a former Amazon employee and current CCO of Wunderman Thompson Seattle. While Google, Facebook, Twitter and other big tech players that host large parties and rent out beaches at Cannes were initially built to sell advertising as a whole, Amazon was built as a retail platform first and that’s still where the majority of its business comes from. Net sales were $59 billion during the first quarter; advertising revenue was $2.7 billion during that same time period. In the fourth quarter, Amazon’s ad revenue was $3.4 billion.

“I don’t see them ever doing a big splashy circuit,” said Reeves, adding that the quiet and personal experience Amazon Advertising does offer can be an escape from the commotion of the festival. “If [I’m a customer] and I see them spending a million dollars on a beach at Cannes I’m thinking ‘that’s why the Prime is more expensive this month’.”

That being said, Amazon’s presence at Cannes will be slightly more pronounced this year than last. The company will showcase its new technologies and product offerings in the Palais as part of the festival’s new invite-only summit, CLX (Connect, Learn, Experience). It will also be part of three roundtables discussing Amazon Alexa, Amazon Pay and how it designs ethical platforms as well as host the second annual Amazon Change for Good Hackathon along with digital agency Huge.

But Amazon Advertising isn’t behind those initiatives. Other teams within the company like AWS and Alexa are behind the expanded Cannes presence.

Amazon’s advertising team is also notably tight-lipped at industry events, shunning main stage presentations as well as the party circuit. That’s also part of the company’s strategy. “Data is their most competitive asset,” said Burdick. “They won’t reveal any information or intel. They’ve set up their whole company not to answer questions and to be very secretive. [By doing that] then Walmart could never know what they are doing.”

Of the Cannes meetings, Reeves said, “It’s a very well-orchestrated event and knowing that Amazon has so much data on customers they are very careful about what they can and can’t share.”

While it would make sense for Amazon Advertising to change its strategy as it is working to court TV dollars as it competes with Disney, Univision and the like, Reeves believes the company won’t change its approach there either. “We won’t ever see them spend the money that the other ad platforms do,” said Reeves. “It’s not in the company’s DNA and not good for their brand.”

The post ‘They have a frugal mentality’: How Amazon pitches advertisers at Cannes appeared first on Digiday.

T-Series began in the early 1980s in India as a cassette tape business founded by Gulshan Kumar. It mostly focused on “devotional” music, particularly Hindu hymns, as well as Bollywood music. In some ways, the company was the first of its kind; devotional music had a huge market, especially among the older set. In the late 1980s, it had its first breakthrough as a real music producer with the launch of music for the movie “Qayamat Se Qayamat Tak,” which led to explosive growth of the company as a bonafide music production label.

“India wasn’t on the Internet map for a long time,” says T-Series president Neeraj Kalyan. The company’s first foray into trying to make money digitally was when it began selling ringtones and “calltones” to telecommunication companies. One of those unique-to-the-West phenomenons, mobile phone users in India rarely are satisfied with a plain old boring ringing sound when someone calls them. Instead, callers will hear a chorus or refrain a popular song — English or Indian — when they call people. T-Series started selling 30-second cuts of their music to these telcos, then in 2004, started licensing content to aggregators.

In 2009, when YouTube first came to India, T-Series noticed a ton of its videos illegally being uploaded to the site. It obtained an injunction against the platform in 2010, which led to an official partnership with the company. On January 1, 2011, it aired its first video on YouTube.

T-Series today is a mind-boggling presence. Right now, the company runs 29 different channels on YouTube, with 176 million total subscribers. It claims it has 10.9 billion — with a “B” — monthly views across that network.

Of course, when it comes to India, the numbers tend to be big: The country itself is the second-most populous one in the world, with 1.7 billion. More than a quarter of the population used a smartphone in 2018, making it the world’s second-largest market after China. The number of people who use the internet rose 11% in 2017, and in 2018, the latest period for which numbers are available, it grew 16%, per eMarketer.

What is unique, however, is that in India, YouTube has begun in some ways to equal the Internet. The Google-owned site says that about 250- million Indians will watch YouTube on mobile a month. And while Netflix, Amazon and homegrown sites like HotStar are shaping the video market, none comes close to YouTube.

T-Series is a good lens through which to view the market. Music is huge, Bollywood is the world’s biggest film industry and the films are song and music-heavy. The four pillars of entertainment in India, as Kalyan puts it, are astrology, Bollywood, cricket and devotional content. “I call it the ABCD of Indian entertainment,” Kalyan puts it.

Indian consumers listen to music through audio apps like Spotify, or the homegrown Saavn and Gaana. But, as Kalyan says, music is visual — people prefer to watch it, not just listen to it.

The company’s revenue now mostly comes from platforms: YouTube is No. 3, after content licensing to TV channels and Amazon. YouTube, says Kalyan, however, is the major tool for content promotion, because of the large user base and global reach. “Our promotion strategy is YouTube first as it gives our content instant reach and allows us to measure consumer acceptance on the go,” says Kalyan. The company now also sources talent from YouTube, singers and songwriters who became big on the platform, like New Zealand-based singer Shirley Setia and London-based artist Zack Knight. It has an eight-person team, with people dedicated to channels for different Indian languages. (That’s one feature YouTube has also added, with new options on the platform that lets people find videos in languages they pick.)

As for PewDiePie, Kalyan sees the whole thing as just a blip, even though it arguably put T-Series on the map like never before. (The company’s head, Bhushan Kumar, turned the competition into a show of patriotism, with a hashtag campaign called #BharatWinsYouTube, urging Indians to subscribe to the channel as it sought to beat Kjellberg).

“We weren’t concerned with who PewDiePie is,” says Kalyan. “Every day for us is a milestone. We weren’t even looking at it. The only time we did is when he put out something offensive that to me wasn’t in good taste.” Kalyan is referring to a video Kjellberg put out that called out T-Series for trying to dethrone him. “It was a total frenzy,” he recalls.

And as for the argument that this was about individual creators versus corporations, Kalyan scoffs. “See, we are a channel, in which every artist who is working with us, they’re opening up their channels. They get a platform where they could showcase their talent to hundreds of millions of people in one go. We are offering them a huge platform. We’re not talking about a corporation, this is about individual creators.”

The post How T-Series took over YouTube appeared first on Digiday.

Food52 is gathering customer feedback to inform its product design as it fleshes out product and category development for Five Two, which launched last October with wooden cutting boards. The company started in 2009 as a recipe site, and then start selling home and kitchen products manufactured by other companies in 2013. Having felt like the company had gotten its “sea legs” in commerce, Hesser said that she and Stubbs wanted to try their hands at manufacturing and selling their own products.

Food52’s strategy is to use the data on what items already sell well through its website and what white spaces exist to determine what products it will launch next, and then use customer feedback to add personal touches. For example, the newest product in the line, an apron launching today, has an oven mitt stitched into the bottom corner, after a reader said she often used the corner of her apron to pull things out of the oven.

The company has launched six products so far through Five Two and plans to launch about 14 more by the end of the year. Cookware, knives and bedding are slated for the fall.

“We are in a category where people have all these things in their kitchens and their homes that they really have no idea how they’re made, why they’re made, why they’re made of certain materials — and we felt like this was a great opportunity to shed light on that,” Hesser said.

Five Two is currently the third most popular brand on the site; Food52 sells products from more than 350 0ther brands. Seventy-five percent of Food52’s revenue comes from commerce, and the company did about $30 million in revenue last year.

Food52 is following the path of other publishers, most notably Goop, by betting that its close relationship with readers, as well as the data it’s gathered through its own marketplace on what products are popular among customers, will help it build a successful direct-to-consumer line. But publishers have found that it can be difficult to keep customers engaged throughout the entire product development cycles, which can take a year or more. And, that it takes more feedback than just knowing what existing products readers like to buy to create new items from scratch that they’re willing to shell out money for. 

“Publishers are good at publishing, they’re not [historically] good at making products — they have to learn a whole new muscle,” said Richie Siegel, founder and lead analyst of Loose Threads. “There’s a pretty filled graveyard are of companies that have tried this unsuccessfully.”

Food52 gathers customer feedback in different ways, depending on the product. For the first item in the FiveTwo line, cutting boards, the company asked its readers to fill out an 11-question survey, promoting it across Food52’s various email lists, social media pages, and directly on the site. Questions were predominantly multiple choice, asking readers to weigh in on what type of wood, weight and dimensions they wanted in their ideal cutting board. Food52 got about 10,000 responses. Based on reader responses, Food52 decided to make its cutting board double-sided, and deeper grooves to make it easier to dispose of any juice that pools up when cutting meat, for example.

For the third item in the line, wooden spoons, the company instead asked readers to post pictures of their favorite wooden spoons on Instagram with a caption about what they liked about it and why, and to tag Food52 in the post.

Incorporating customer feedback into the design will get more challenging as Food52 starts selling more complex products. Stubbs said that Food52 wanted to kick off its DTC line with products that it deemed to be kitchen essentials, but also ones that “we know can be produced quickly or we have a really strong relationship with our manufacturer and know they can move quickly.” Now, Food52 has to start working further out — it released a survey at the beginning of the year looking to gather reader feedback on cookware, a product that it’s looking to launch in the fall.

The post How Food52 is building out its direct-to-consumer brand using reader feedback appeared first on Digiday.

You’re seeing more but it’s fragmented?
You have more partial pieces of a pie. You just don’t have a great view. [For example,] now you have location data, but is location data accurate? Is the partner you’re using really willing to give you the true data that they’re using? Is it a panel? Not a panel? Is it “census data?” Is it statistically significant? The more we introduce, the more little pieces we get.

Also, the stuff we always had a nice clean view like the desktop cookie world is being reduced down, whether through ad blocking or regulation or whatever have you. It creates a fragmented partial view.

Holding companies have made major acquisitions of data marketing firms at the same time that attribution has become more difficult. IPG acquired Acxiom. Publicis Groupe bought Epsilon. Will these big acquisitions help?
Potentially. They use a people-based model. Instead of tracking devices and software, which is essentially what we’ve been doing in the digital space. They’re people based in the sense that we’ll be able to take first-party data, go find more of them and actually find humans across their devices. It feels like more of a targeting capability.

So agencies can use these databases to target people with more information?
It’s like a database of human beings with technology around it that allows us to go and find those human beings. It’s kind of like direct mail, basically. We’re all going to direct mail. I can find “Katie” but her name is scrubbed out. Her personally identifiable information (PII) is scrubbed out. But I know that she has certain traits, where she lives or demographics, some of the things about her. She comes with devices that I can find and I can target her on that laptop, on that phone, on our TV at home.

How does that help to look at attribution?
The idea behind that is like a closed loop system, quote unquote. I think everyone’s trying to move in that direction. A lot of these systems are moving towards a people-based model. And the idea behind it is to get to a place where yes, we can convert, and understand who converted and then look to see and provide weighting and attribution towards which platforms delivered on that. So, the answer is yes because you can get to like a one-to-one match of people.

But I still don’t think it solves for the other things. If you can’t track them through the things you track before, like cookies and other things, it’s still a partial view, right? It’s a partial view into what those people did. You’re still going to have a challenge.

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