Month: June 2019

Each agency has its own inclusion criteria, but content from the partners — roughly 12 broadcasters and digital studios with intellectual property rights — includes linear TV show clips and behind-the-scenes footage, which carry similar brand-safe credentials to linear TV content.

YouTube has faced scrutiny over brand-safety violations over the last two years. In February, Disney and Nestlé paused spend after reports surfaced that the platform’s algorithm had recommended inappropriate content. Yet the platform’s reach, particularly in the 16- to 34-year-old category who are turning away from linear TV, means advertisers can’t ignore it for long. That’s why marketers are increasingly reclaiming contextual control around their ads.

“This, in combination with the fact there is a high demand for broadcast-quality video content, has led to a reappraisal of how we can utilize our relationships with partners and access their YouTube content,” said Harrison Boys, media standards director, Europe, the Middle East and Africa, at Magna Global, IPG Mediabrands.

Earlier this year, Digiday reported how some media companies saw revenue boosts from the increase in agencies buying directly from premium-quality content owners on YouTube, like Viacom, Disney, Vevo and digital media company Little Dot Studios. As an extension of this, agencies are aggregating around a dozen premium-quality partners across broadcasters and digital studios, according to multiple production and agency sources. While each agency has a different internal product name and idiosyncrasies, the purpose is the same: to offer targeting at scale across multiple partners in against brand-safe, broadcaster-like content, rather than against YouTube user-generated content.

“It makes a lot of sense when providing an integrated [TV and online] strategy for large advertising clients who want to synchronize activity with TV and online users,” said Anita Lusanska, head of biddable at media agency Total Media, which has bought YouTube inventory direct from publishers but not created a list of pre-approved partners. “I would prefer the kind of buys where you could overlay behavior or intent, rather than just the placement itself. In that way, it’s similar to TV buying.”

YouTube has yet to show evidence of having stolen a meaningful budget from linear TV. In 2018, U.K. TV advertising totaled £5.11 billion ($6.47 billion), the same as in 2017, according to a Nielsen and Thinkbox report.

Some advertisers have become increasingly wary of algorithmically served content. YouTube, for its part, has tried to improve the brand-safety controls on its platform. While agencies like Total Media will continue to recommend Google Preferred, which uses algorithms to rank the top-performing 5% of YouTube channels by category for advertisers to buy against, its importance is waning, said Lusanska.

“The current method of digital-video buying has to be better,” said Elliot Baum, head of digital media sales at Little Dot Studios, which runs the YouTube channels for show brands such as Gordon Ramsey’s “Kitchen Nightmares.” “Agencies are siphoning off the crap.”

User-generated content on YouTube, even when managed by multichannel networks, is less controlled, which some advertisers can be squeamish about.

“The fact we have a direct relationship with the content curator means we’re able to tailor the contextual environment further for our brands,” said Mark Hanna, programmatic trading director, Europe, the Middle East and Africa, at Cadreon, IPG Mediabrand’s ad tech unit. “This content can then be tailored for our clients’ needs, by creating relevant aggregation across a number of broadcasters and broadcast-quality partners.”

Agencies like Publicis and IPG Mediabrands stress that this is just one of the ways in which they are trading YouTube, depending on the clients’ needs.

“We employ several different approaches to meet our client goals,” said Chris Williams, CEO, Publicis Media Exchange UK, the agency’s investment arm. “This is not the exclusive method we adopt. We are always testing and applying learnings, then we scale on the various methods, including this.”

Omnicom has been buying YouTube inventory in this way since the beginning of the year, according to agency sources. As agencies look for more ways to add value beyond a straight media buy, this is one of the opportunities.

Omnicom, GroupM and Dentsu Aegis declined to comment for this piece.

“Smart agencies saw the opportunity to create something like a preferred supplier network,” said Baum. “They have been acting more like consultancies rather than companies that have the buying power; that’s the shift agencies are positioning for themselves.”

Media companies can make a good margin when they sell their inventory direct — despite YouTube’s 45% revenue share — if they manage to sell above their rate card. For instance, if a media owner’s YouTube inventory rate card is £20 CPM ($26 CPM) and they sell it for £30 CPM ($39 CPM), the publisher gives YouTube 45% of the former. These higher CPMs led to revenue boosts for some media owners.

Agencies contacted for this piece were unwilling to share how much budget is being directed to this form of buying for commercially sensitive reasons.

“If an advertiser who was buying 10,000 channels through Google Preferred is now only buying 10 partners, the benefit to me is an increase in the share of voice,” said Baum. “The revenue will naturally go up as more money flows in. TV buyers are able to get the scale. That’s when you start to see big revenue shifts, but it’s not quite happened yet.”

For digital studio Studio71, owned by German broadcaster ProSiebenSat.1, last year less than 10% of its inventory was sold directly. Today, it’s the majority and growing quickly.

“We expect to earn as much revenue from brands directly as we earn from YouTube at some point in the next 12 months, which would have seemed impossible until very recently,” said Klaudia Liubinskas, director of sales and partnerships at Studio71.

For Little Dot, which doesn’t have a robust revenue stream from the TV business as broadcasters do, this is currently its most scalable revenue opportunity. According to Baum, since January, when it began selling its YouTube inventory directly, it has won 25 new clients. “The is the glue,” he said. “We manage the channels, grow the audience and now monetize them. Ad sales is the final bit that makes it fully integrated. The media is the hook to spend more.”

For digital studios and media companies, this shift to more direct buying is good news. “Over time, this will help to increase the rates of monetization for the top performing channels, while probably reducing it massively for the lowest performing content,” said James Stafford, managing director at Studio71. “Given the struggle to prove a digital ad-funded business model is now entering its second decade, we welcome this shift enthusiastically.”

The post ‘Siphoning off the crap’: Agencies prioritize buying premium content directly on YouTube appeared first on Digiday.

Even though IMDb TV’s inventory can be bundled with the other video inventory that Amazon offers to advertisers through its demand-side platform, Amazon has made IMDb TV a cornerstone of the e-commerce giant’s inaugural bid for advertisers’ and agencies’ upfront dollars, buyers say, and they expect the rebrand could help invigorate interest. “The rebrand of the name is definitely going to help it pick up steam,” said Natalee Geldert, brand media director at PMG.

“They’ve been hitting the streets pretty hard,” Christine Peterson, U.S. digital investment lead at Mindshare, said of Amazon’s video ad sales pitch.

However, Amazon’s ability to attract advertisers to IMDb TV is still coming into focus, as is what the service is able to offer advertisers. While Amazon wants IMDb TV to be firmly within the consideration set during this year’s upfront negotiations, it “remains to be seen,” whether that will happen, said Peterson, who didn’t want to delve into the agency’s upfront strategy with negotiations ongoing.

Though IMDb TV is still new, major advertisers, including AT&T, Capital One, PepsiCo, Procter & Gamble and Verizon, have run ads on it, which inserts brands’ 15- and 30-second spots as commercial breaks within movies and shows.

The reasons for advertisers’ interest in IMDb TV are clear. For starters, IMDb TV offers a library of proven, brand-safe programming and plans to triple its content library this year with the addition of films like “La La Land” and “A Knight’s Tale.” Because those shows and films have already been rated for their original distribution, advertisers are able to apply standard controls governing which programming they are comfortable advertising within, such as only advertising within G- and PG-rated movies and blocking ads from running within certain genres of content, Peterson said. And since advertisers can buy IMDb TV’s inventory through Amazon’s DSP — though not as a standalone option — they are able to target their ads on the service based on the company’s shopper data, and they can use Nielsen’s Digital Ad Ratings to have an independent measurement of their campaigns.

However, ad buyers continue to have questions about the level of scale and performance that the service is able to deliver, as well as the opportunities to take full advantage of Amazon’s broader platform. The size of IMDb TV’s audience is “one of the questions that we need to have answered and verified through outside, third-party metrics,” said Peterson, who noted that it’s a challenge facing any ad-supported platform.

IMDb TV faces other challenges. It is one of many free, ad-supported video services on the market that features a non-exclusive library of old movies and TV shows; others include Roku’s Roku Channel, Walmart’s Vudu and Tubi. Additionally, the service’s branding could limit the service’s ability to accrue audiences for advertisers. While IMDb has strong credibility among TV and film aficionados, “many consumers look to IMDb as an entertainment resource, but not necessarily a streaming destination, and most aren’t even aware that it’s a branch of Amazon’s platform,” said Jenny Schauer, vp and group director of media at Digitas.

Amazon appears to be trying to establish that branch by featuring IMDb TV within its Prime Video streaming service, in addition to making it available through IMDb’s website. The inclusion of IMDb TV within Prime Video means the service provides an opportunity for advertisers to reach viewers on Prime Video’s otherwise ad-free service. “It comes with its own built-in audience. It’s surprising to me that they haven’t done more to market it. It’s kind of buried if you’re a Prime user yourself,” said Peterson, who was not alone in her shock.

“The other day I was thinking to myself, Does this thing even still exist?” Alan Wolk, co-founder and lead analyst at consulting firm TVRev, said of IMDb TV. “I was very surprised that they didn’t seem to know what to do with it. I would have thought they would market it every time I log on to Amazon, but they didn’t.”

Amazon appears to be maintaining some distance between IMDb TV and its broader platform. Advertisers are not currently able to attach calls to action to their ads on IMDb TV for people to purchase an advertised product or add it to their shopping carts on Amazon, according to an Amazon spokesperson. However, IMDb TV is close enough to Amazon’s platform that ad buyers are keeping it close on their radars for clients’ campaigns. Because of the potential to tie into Amazon’s e-commerce platform, Geldert said she expects IMDb TV to “bubble up from more of an ad placement and strategy recommendation” for retail advertisers’ heading into the holiday shopping season.

“Although it’s too early to tell what performance IMDb TV will deliver, with this mix of both advantages and drawbacks it’s fair to say the industry is cautiously optimistic about IMDb TV’s longevity,” said Schauer.

The post Amazon’s IMDb TV pitch to advertisers is coming into focus as service rebrands and adds more movies, TV shows appeared first on Digiday.

With the new funding, the brand plans to expand its product collection, reach more customers and increase community outreach through hosted events, partnerships and other forums. The brand doesn’t share specific revenue, but said it tripled sales in the last six months.

But Baboon, which went live more than 10 years after the direct-to-consumer first brought an onslaught of online brands into customer consciousness, doesn’t plan to fall into the VC trap.

“We don’t want to put ourselves in a corner at a valuation level where it hinders the business we can create,” said Person, adding that Baboon sought out investment partners that weren’t looking for a quick return but instead wanted to help contribute to what the brand wanted to achieve in 10 years down the line.

Last year, $1.5 billion flooded the direct-to-consumer brand space, but most VCs have yet to see returns on these investments, signaling that the retail category is structured on a much longer growth trajectory than an industry like technology software. As that’s become apparent, some brands have decided to eschew investor funding altogether, or at least to bootstrap as long as they can. Brands like Tuft & Needle, Native and MVMT have grown $100-million-plus businesses with no or little investor capital; Rothy’s waited until it was three years and $140 million worth of sales in before it raised its first considerable round of funding, a $35 million investment led by Goldman Sachs.

“The companies that have a war chest of money are solely focused on top-line growth, because they’ve gotten great investment, and they are willing to blow that money for top-line growth,” said Adam Winters, CEO of Merchant Financial Group, a finance company that backs small and medium-sized consumer businesses. “It doesn’t mean they have a sustainable business model.”

It’s not that any one funding strategy is better or worse. But Person, who oversaw seven years and roughly 40 brand acquisitions while working with The North Face owner VF Corp., witnessed how limiting a VC-fueled billion-dollar valuation could be for the options a brand would have laid out in it front of it. Baboon isn’t gunning to be acquired by a conglomerate, but it’s plotting out a brand strategy that leaves all potential doors open.

“We want to build a brand that would allow us to scale over time, and the VC world is also very interested in brands that can scale. But it’s not our savior. We want to grow on our own merits, pay our own bills and we want options for exits,” said Person. “Valuations of a certain size can turn off certain partners. So we’re building a business that’s healthy and has good metrics, and not going out over skis. We want to build out our business ourselves.”

The open-door mindset applies to other facets of Baboon’s business. While the brand currently specializes in accessories, the plan is to build a company not off of a hero product — as companies like Away, Harry’s and Casper have done — but a “hero feeling,” according to Kushner. Before launching, the brand started a trendy, adventure aesthetic Instagram account, where it built out a content strategy and its targeted audience.

“By the end of it, people were really wanting to see what we were going to come out with,” said Kushner.

The team believes that approach sets them up to extend into other categories beyond accessories down the line without diluting the brand, because it established a foundation built on that brand, not the product. Similarly, while the brand’s online-based, it started exploring other third-party retail out of the gate. Baboon currently sells older styles on Urban Outfitters’ website and select products in stores and online with specialty retailer Steven Allen.

It boils down to a new DNA makeup and approach for modern DTC brands. With the new funding, Person said Baboon can “push forward on all fronts, but it’s baby steps.” The brand also plans on making new hires and will next launch a new product, fanny packs, on Tuesday, based on feedback it heard from early customers.

“We’re digital first, but it’s an evolving model,” he said. “There are a million ways to go about this process.”

The post Accessories brand Baboon plots next phase of growth with new funding appeared first on Digiday.