Month: June 2019

“Amazon has shifted the onus of fighting illegal sellers onto the brands, and to AI,” said Allen Adamson, the co-founder of marketing and product consultancy Metaforce. “What they need is more people to do it and watch for it. AI can do a lot, but it can’t do everything.”

Jason Bolt, the CEO of Revant Optics, said that so far this year, his company has lost approximately $100,000 in revenue after more than 3,000 products were pulled from Amazon for a potential trademark violation. Revant Optics sells replacement lenses for sunglasses and eyewear brands like Oakley and Ray-Ban through its own e-commerce site and on Amazon, where it carries around 60,000 product listings, does 35% of overall business and has sold for the past eight years. (Revant doesn’t share revenue.) After 300 items were pulled in January, Bolt worked with an attorney to outline the trademark law that allows a company to sell replacement parts for name brands, and the item listings were reinstated after 11 days and $40,000 in lost sales.

After that, Revant — which sells through Fulfilled by Amazon — opted to pay roughly $2,000 a month for a dedicated account manager to help in the event of further issues down the line. Then again in June, the company saw nearly 1,000 products pulled from Amazon’s U.S. marketplace, and an additional 1,600 products pulled from international Amazon marketplaces. Revant’s Amazon account manager couldn’t identify the reason for the product pulls, but suggested tweaks to the listing in the title, description and images to get the items reinstated. When that didn’t work, Bolt sent an email to the address jeff@amazon.com, which reroutes inquiries to the executive support team, who responded.

At the source of Revant’s issues was a new trademark rule that impacted Revant’s category — shoes, although nobody at Amazon could answer why the company had been categorized under shoes. It prohibited listing brand names in product titles and descriptions. Revant’s products were reinstated on Friday, but Amazon said it wouldn’t reimburse lost revenue because it was following its policy to pull products first and figure out the issue later.

“Amazon is a critical partner for us in terms of an e-commerce platform, but it’s also a reminder that we can’t get too heavily leveraged into the platform, unless things improve around communication,” said Bolt.

Revant is just one brand, but other sellers have experienced similar issues around being unable to identify why products were pulled from the site, and then dealing with a labyrinth in Amazon’s support team. Often, sellers will join Facebook and LinkedIn groups to ask questions and field responses on what might be going on with their accounts. And as brands take more action — PopSockets has taken to suing unauthorized sellers on Amazon’s platform, while other brands hire companies that will troll Amazon and try to stamp out gray market sellers — there’s more confusion. Many said that dealing with an Amazon account manager, who are pitched to sellers as keys to scaling growth on the platform, doesn’t help as they’re often in the dark themselves.

Amazon did not reply to a request for comment.

“Amazon is the only place you can play by the rules, do your due diligence, and then spend weeks fighting your case to prove that you did exactly that. It’s a black box,” said one seller who had items pulled for trademark violations that were then reinstated.

As Amazon restructures its platform, it’s taking a hands-off-the-wheel approach to the third-party marketplace to drive maximum volume business there, and increase profitability on the vendor marketplace. Anytime a big, powerful platform shuffles its priorities, sellers reliant on the platform feel the brunt of the changes. But most say they plan to stay on Amazon.

“Brand registry still has a way to go, and it’s very challenging for both sellers and brands when there’s a suspected trademark infringement,” said Todd Bowman, senior director of Amazon at Merkle. “The interface is very basic, and there are a lot of confusing systems. It needs more investments and attention. But Amazon has the customer, so if brands really want to expand their reach, that’s where they’ll go.”

The post As Amazon cracks down on IP infringement, third-party sellers feel side effects appeared first on Digiday.

Cut the “co-pro” cord
When it comes to video-on-demand growth, it’s best to steer clear of production partnerships with the tech platforms. To date, U.K. networks and content producers have been happy to receive funding from Netflix and others to help fund shows, but the sheen has come off co-productions.

“The networks and content producers are going to be competing much more strongly with Netflix and platforms, it’s been a very frenemy environment,” said Jonathan Allan, chief commercial officer at U.K. broadcaster Channel 4. “If you’re going to compete with Netflix and Amazon you shouldn’t do co-pros.”

Allen stressed that any broadcaster or content producer that opts for a co-production with a platform like Netflix, will end up compromised. While someone may sign up to a service like Netflix for one of the subscription service’s flagship original shows like “The Crown” or “Stranger Things”, it’s the broad back catalog of programs either co-produced or licensed from local broadcasters that keep people returning to the service, he claimed. Broadcaster’s gripe this usually means they don’t get the ownership credit for the shows, while the majority of viewing occurs on the platform rather than the broadcaster service.

Another drawback: There’s a danger platforms will disintermediate broadcasters from the creative talent they have spent years cultivating, said Allen. Co-owning production rights naturally leads to both sides having to make compromises which can affect the quality of the end product. Channel 4 has had its fair share of co-production hits and flops.”The jury is still out on the quality of co-pros, some of ours have done really well, others have not felt like Channel 4,” he said. But even the hits have put Channel 4 at a disadvantage. For instance, co-produced shows like “End of the F***ing World” attracted big audiences, but predominantly to Netflix rather than Channel 4.

Channel 4 also plans to entice the best content producers away from Netflix through more favorable rights deals. This month it signed a deal with Pact, the trade body for independent content producers, which gives the broadcaster more flexibility to show all programs across its portfolio in linear and online in the U.K. without the need for further negotiation rights with the independent producers from which it commissions content. Currently, linear transmissions have a seven-day window on its catch-up service All4, and additional terms are renegotiated. Whereas Netflix typically keeps international rights to the shows it buys, limiting future overseas revenue opportunities for the content creator. Channel 4’s deal will ensure producers get more global control over their intellectual property. “This leverages what we own in the U.K.,” said Allen.

New alliance attempts
So far, U.K. media owners’ main attempt to rival Netflix has been the joint venture, Britbox, between commercial free-to-air broadcaster ITV and the BBC. But the project is still scant on details and already encountered snags since it was announced in February this year.

Alliances between U.K. rival broadcasters have a checkered past and several have failed to create any meaningful difference. ITV has agreed to invest £65 million ($82.5 million) to the end of 2020, but both ITV and the BBC have their own OTT services requiring work and resource.

Spain seems to be a step further. Spanish broadcasters RTVE, Atresmedia and Mediaset España have created a common platform, called LoveTV, that aggregates a number of free-to-air channels under this brand. The service, launched last November, offers catch-up and live viewing.

“Traditional competitors are joining together for distribution, log-in, for ad tech, to try to compete against new challenges,” said Arturo Larrainzar, head of strategy at Atresmedia.

Although working with rivals is slow moving. LovesTV is only available on smart TVs and will soon extend to become an OTT platform with additional content from the broadcasters.

During test phases with audiences, it found the service had a net promoter score of 31%. And 91% of audiences said they would buy a TV that came with this platform installed. These are early results, but prominence on hardware is one way to guarantee distribution. “This will impact viewing patterns for the next few months and means the future will be less challenging,” said Larrainzar.

Market fragmentation still a barrier
Europe is peppered with collaborations and alliances all formed in response to the threat of the major tech platforms. But Europe is fragmented, market differences make collaborations hard to scale, and there’s still more that broadcasters can do to work together.

The Spanish market has a lower penetration of pay-TV services compared to the U.K., Germany and Italy, for instance. It also and a very competitive free-to-air TV market where channels like Paramount, Disney and Discovery are all free.

“Broadcasters across Europe should set aside their animosities and start working together in a much more meaningful way,” said Mertijn de Nooijer, OTT director Europe at M7 Group, Luxembourg-based media company. “The most important area is addressable and programmatic advertising. We believe creating national standards for programmatic advertising should be high on everybody’s list.” Broadcasters should be standing on each other’s strengths rather than “squeezing each other to death” while Netflix and Amazon keep growing unchallenged, he added.

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Ro’s vice president of growth Will Flaherty said that Facebook and Google are still important advertising channels for Ro, as they are go-to places for potential customers who are searching for health-related information. But, the company has found that it’s especially important for Ro, Rory and Zero customers to see ads in other places to know that the brand’s legitimate. In addition to the MLB sponsorship, Ro also started running TV ads for the first time last year.

Ro’s not alone in investing in television — a recent report from the Video Advertising Bureau found that of 125 DTC brands surveyed, 60% spent more on television ads in 2018 as they did in 2017.

“There’s a lot more that we need to overcome as a healthcare business to convince someone to try our service and trust our service than if we were selling a T-shirt or a razor,” Flaherty said. “Advertising on channels like television and out-of-home that give us a little more fuel to bridge that trust gap more quickly.” 

Flaherty declined to say which channel makes up the most of its marketing budget, but that no one channel accounts for more than 50% of its marketing budget.

Flaherty spoke with Modern Retail about how the company measures the effectiveness of ads across channels, as well as how the marketing landscape has changed for DTC brands. Answers have been edited for clarity and length.

How effective have new, harder-to-measure channels like TV and billboards been for Ro?
The thing we’ve seen as we expanded our mix is tremendous crossover effects. As one example we ran a campaign in the Boston market, an out-of-home campaign last fall. We also happened to do quite a bit of advertising around the baseball playoffs that October [when] the Boston Red Sox went all the way to the World Series. So we were running a pretty heavy media wave in the Boston market against our target audience. 

When we looked at the attribution picture for all our users we acquired in Boston during that time period, we compared both the granular click-based attribution data with data from a post-transaction survey where we asked people where they first heard about us. It unearthed a tremendous amount of overlap between channels. People who [according to] our click-based data came in through Google search or came in through Facebook and Instagram, in the survey cited some of these offline institutions where we ran ads. 

There’s no single attribution. We basically have to take that approach as we measure these online channels, make sure we leverage as many different [measurements] as we can [and] triangulate them all together to make the most informed decision we can. 

Within the channels, there are ways to optimize and tweak and make sure that we’re putting those dollars at the right places, but at the macro level, the truth is there’s no silver bullet for attribution. 

How do you think the marketing landscape has changed for DTC brands over the past few years?
The DTC brands that are doing really well are the ones that have realized — particularly if you think of their digital ad mix — that their ads are in some way, shape or form content. A really beautiful product shot of a suitcase or home goods fits into one’s Instagram feed as seamlessly as photos from a vacation or one’s newly renovated apartment.

In that context, the creative is increasingly the difference maker if you think about broader trends on digital platforms. I think both in the Facebook ecosystem and the Google ecosystem this is the case. Marketers have less and less control over how they can target and create audiences and segment out different personas. The platforms are shifting to a model where it’s more important to just utilize the automated bidding techniques. In that environment, creative is your one lever to drive performance. So with that in mind, I think the [brands] who are increasingly the winners are the ones who have been thoughtful around creative iteration, video production, etc. 

What challenges does an increased focus on creative raise?
In the digital ecosystem, you’re seeing much more of an emergence of very scientific AB testing of creative assets, and feeding that into the design process. 

We’re getting pretty close on our end — producing assets in-house and creating a second cut, third cut, fourth cut of assets that have baked into them the learnings from earlier testing. Closing that feedback loop and doing that well — it’s a difficult process to do, it requires cross-functional coordination. You need sharp, talented designers that are not only gifted at what they do, but also have the ability to internalize and beta test. You need smart growth marketers to structure tests, and provide data that’s clean for marketing team members as well as design members to process. 

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The refills are part of Amazon’s Subscribe & Save program, which lets customers set a recurring order on a monthly schedule, with deliveries every one to six months. Through that model, customers end up saving between 5 and 15% per order. All of the Made For You products are also eligible for free one-day shipping for Prime members.

“Amazon’s subscription offering through Subscribe & Save is most appealing for the brands that have to compete with that digital brand. It’s an easy, frictionless way for incumbent brands to compete against new programs,” said Jason Goldberg, chief commerce strategy officer at Publicis. As subscription razor companies have flooded the DTC market, Bic is using Amazon’s platform and existing operations — fulfillment, fast delivery, an existing membership base with Prime — to compete.

As part of Amazon’s exclusive brands program, Bic also got access to Vine reviews pre-launch. Vine reviewers are active Amazon reviewers recruited by the company to review products in exchange for receiving them for free. Made For You products have 30 reviews each, and all are tagged as Vine reviews. Vine is open for all first-party Amazon vendors to utilize, but they have to pay to get products in front of customers, and it costs $60 per product listing for a maximum of five reviews.

Bic joins companies like Merisant, the parent company of Equal sweetener, GNC, Starter leggings and mattress brand Tuft & Needle in an exclusive partnership with Amazon, in which the brands and manufacturers develop products to sell solely on Amazon, and then reap the benefits of being in Amazon’s “Our Brands” umbrella. That includes favored promotion around events like Prime Day and other holidays and more built-in marketing and advertising on the platform, Vine reviews and insights from Amazon around product development.

As Amazon shifts smaller sellers to its third-party marketplace, its first-party marketplace is increasingly being reserved for household name brands like Nike and Dyson, Amazon private-label brands and Amazon exclusive brands. After a period of pumping out new private labels, Amazon has shifted focus to exclusive brands, because the brand partners do the heavy lifting of product development and manufacturing — areas they’re accustomed to working in, but Amazon’s not.

“Amazon’s switched gears to focus on exclusives, which makes a lot of sense,” said Oweisi Khazi, senior principal of Amazon Intelligence at Gartner L2. “It’s a win-win situation: Amazon has the ability to own and work with brands that will take on the cost of R&D, manufacturing and sourcing, while getting brands exclusive to Amazon traction.”

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