Month: July 2019

AT&T kicked off the year by announcing that its advanced advertising division, Xandr, would work with WarnerMedia’s Turner networks to sell ads targeted based on the telecom company’s customer data. Then the company shook up the ranks of WarnerMedia, with HBO CEO Richard Plepler and Turner president David Levy choosing to depart, Warner Bros. CEO Kevin Tsujihara stepping down after a scandal and former NBC exec Bob Greenblatt stepping in to oversee WarnerMedia’s entertainment and streaming businesses.

Meanwhile, after taking majority control of Hulu through its acquisition of Fox, Disney was able to negotiate to buy Comcast’s stake in the streaming service and is expected to bundle Hulu subscriptions with subscriptions to its Disney+ and ESPN+ streaming services. Comcast has begun to merge the international operations of Sky and NBCUniversal while also combining some of their ad sales efforts. And then Discovery has begun to use audience data from Scripps Networks to bolster its ad targeting capabilities.

It’s not like the mergers of major media companies are over, though. Merger talks between CBS and Viacom have resumed for the third time and appear to be much more likely to go through this time.

Every major entertainment company has a Netflix rival now (or will soon)
Netflix has established that people are willing to pay to stream shows and movies to their TVs, phones and computers. Now just about every other entertainment giant is getting in on the act.

A year and a half after Disney announced plans to develop its own streaming service and pull its programming from Netflix, the House of Mouse showed off the product and some of its original programming before the $7-a-month service debuts in November. That’s more than could be said of Apple, which announced its streaming service Apple TV+ but has yet to say what the cost will be of the service, which is supposed to become available sometime this fall.

NBCUniversal did say how much its streaming service will cost: nothing. That’s because the service will carry ads when it rolls out sometime next year, though there will be a paid, ad-free version. And WarnerMedia is reportedly circling around a $16 or $17 price tag for its streaming service that the company plans to start testing later this year.

The content trade wars have commenced
If content is king, everyone’s coming for the crown. For any company to succeed in rivaling Netflix, they will need content that can compete with Netflix’s library for people’s attention. So they are starting by pulling from Netflix’s library. Once again, Disney initiated this trend when it announced that it would pull its content from the streaming service to populate its own. NBCUniversal has followed suit most recently by announcing that it will remove “The Office” from Netflix to put the show exclusively on its streaming service in January 2021. WarnerMedia is likely to do the same with “Friends” for its streaming service.

The content trade wars extend beyond programming that’s already been produced to also cover people producing new programming. As Netflix has locked up deals with prolific TV producers like Ryan Murphy and Shonda Rhimes, its would-be rivals are similarly signing exclusive overall deals with TV makers secure rights to the new shows they make. Apple has snagged the creator of “Friday Night Lights” and “Parenthood” Jason Katims and “The Fast and the Furious” director Justin Lin, but it appears to have lost out on J.J. Abrams, who has reportedly been won over by WarnerMedia. For its part, Amazon has hung onto “The Marvelous Mrs. Maisel” creators Amy Sherman-Palladino and Daniel Palladino and nabbed the creators of HBO’s “Westworld” Jonathan Nolan and Lisa Joy away from Warner Bros. TV.

As digital platforms bid for TV budgets, TV networks angle for digital dollars
The TV and digital video advertising markets have been on a collision course for at least as long as the likes of Hulu and YouTube began lobbying for — and taking — a cut of the annual TV upfront market. Last year Roku joined the fray, and this year Amazon and Facebook have followed. But they aren’t the only ones trying to catch the ad dollars shifting from traditional TV to streaming video. So are the TV networks.

In an apparent acknowledgment of advertisers’ interest in audience-based advertising and digital alternatives to linear TV’s rising ad prices and declining viewership, TV networks have upped the digital side of their pitches to upfront advertisers. After acquiring Pluto TV, Viacom immediately made the ad-supported streaming video service a centerpiece of its upfront pitch this year. Meanwhile, NBCUniversal used its upfront presentation to talk up its upcoming, ad-supported streaming service, and Discovery, as well as AT&T’s WarnerMedia and Xandr, promoted their digital ad targeting options.

With ad buyers’ appetites for targeted ads against TV-quality content growing along with digital platforms’ abilities to satiate that hunger — the TV networks have started planting the seeds to make targeted advertising an even bigger part of next year’s upfront pitch. When this year’s upfront cycle was only beginning to get underway, a consortium of TV networks banded together with Vizio’s automated content recognition firm Inscape to form Project OAR, an effort to standardize targeted TV advertising on connected TVs. Then in the middle of the upfront season, another group of TV networks, OpenAP, announced it would roll out a buying platform for targeted TV advertising.

Subscription video sales skyrocket
The subscription video market is quickly becoming oversaturated. In addition to subscription stalwarts like Netflix, Hulu and Amazon Prime Video, there are the aforementioned subscription-based streaming services coming from Apple, Disney, NBCUniversal and WarnerMedia. And then there are the subscription resellers. In light of the success that Amazon has experienced with Amazon Prime Video Channels, Apple, Roku and Facebook have rolled out or are developing their own programs to sell subscriptions to other companies’ subscription video services, seemingly lowering the barrier for more subscription services to hit the market.

The surfeit of subscription services demands the question: How many services are people willing to pay for? The answer to that question is clouded by the fact that the prices of some subscription services, especially streaming TV services, continue to balloon. This year Hulu, YouTube TV and DirecTV Now have each raised the prices of their respective streaming TV services to cover carriage fees and compensate for subscriber churn. Meanwhile, Netflix has continued to increase its prices to account for the amount of money it must spend on content to keep people entertained and, therefore, subscribed.

This surge in competition for viewers’ — and advertisers’ — attention and wallets that we’ve seen in the first half of the year will inevitably continue, if not accelerate, in the second half of 2019. The launches of Disney+ and Apple TV+ will give us a better idea of the level of competition facing Netflix, and the wrap-up of this year’s upfront cycle will show how narrow (or not) the divide between traditional TV and digital video ad sellers really is. The streaming video war is unlikely to be won or lost anytime soon, but before the year is over, we may see the first victories and casualties.

The post The war for streaming video has officially begun appeared first on Digiday.

How does this sit with GDPR?
GDPR introduced new requirements around the need for businesses to obtain consumer consent in order to use their personal data for their own purposes, such as targeted advertising. In order to keep the separate laws from conflicting, that meant PECR’s rules on consent also had to change to coincide with GDPR’s. In a nutshell, consent under PECR must now be opt-in, not opt-out, or as sometimes referred to as: “soft” opt-in. Direct marketers need to be able to show consent was knowingly and freely given.

Are fines for PECR as high as GDPR?
Nowhere near as high. PECR fines only go up to a maximum £500,000 ($630,000) for breaches, similar to those that were used under the former Data Protection Act (GDPR’s predecessor.) Under GDPR law, the European Commission has given EU regulators the power to fine up to €20 million ($23 million) or 4% of global revenue, whichever is higher. That’s why GDPR has been a far more high-profile, and feared, law. A business running direct marketing can also use the legitimate interest clause, but under the GDPR’s definition.

Sounds like PECR enforcement is quite lax?
In a way, yes. Although, prior to GDPR’s enforcement the ICO did fine two companies, albeit softly. Airline Flybe was fined £70,000 ($88,000) for sending more than 3.3 million emails to people who had already unsubscribed from its email marketing. Honda received no more than a £13,000 ($16,000) wrist slap for sending 289,790 emails to clarify certain customers’ choices for receiving marketing. While Honda believed it was ensuring its data protection compliance was water-tight by rechecking details, which it classed as customer service — rather than marketing — emails, the ICO didn’t agree. Honda couldn’t provide evidence that the customers had ever given consent to receive that kind of email in the first place — a no-no under PECR.

Wait, didn’t hundreds of companies do just that ahead of GDPR enforcement?
Absolutely. Consumers were hit with an avalanche of emails ahead of GDPR’s enforcement in which they were asked to resubscribe. In doing so, businesses hoped to avoid any risk of a GDPR fine. In reality, that merely drew attention to the fact those companies may have been in breach of PECR for years. They’ve likely most escaped any kind of penalty because the ICO had its hands full with GDPR. Plus, there would have been a grace period allowed for companies attempting to do the right thing, and any inevitable chaos stemming from an early misunderstanding of a new law.

Did they need to send those emails?
Probably not. But the fear of the more eye-watering GDPR fines would have been motivation to do so. That, plus a healthy dose of misunderstanding and the industry’s pretty broad interpretation of GDPR would have contributed to the panicked email stampede.

The post WTF is PECR? appeared first on Digiday.

Meanwhile, it has also started offering more free access to existing content. Dazn charges a monthly fee for viewers to access live and on-demand sports. Previously a lot of content, which Dazn buys the rights to broadcast live, has been behind its paywall. Most of Dazn’s sports content is watched live, requiring it to be more inventive to offer free samples. Like a lot of subscription media companies have found, there’s a balance to strike between how much content people should sample without the risk of devaluing the product.

In Brazil, its ninth market, Dazn owns the rights to football tournaments Serie A TIM and Ligue 1 exclusively until 2021. Ahead of launching the platform, Dazn streamed select matches on Facebook and YouTube for free. It also worked with brand ambassadors, Ronaldo and Neymar to post on their own social media accounts about the launch and partnered with football influencer collective, Desimpedidos, who acted as commentators on the YouTube streams.

“Brazil was a perfect storm,” said Sarah Beattie, vp of communications and new markets at Dazn, at an event in London hosted by social video company Grabyo. “We created a big groundswell and social audience. Now we are transitioning those over with the right content mix to get people to sign up.”

According to Dazn, streaming the matches grew its Brazil YouTube channel to over 1 million subscribers in three months, it’s now at 1.5 million subscribers. More than 280,000 viewers tuned in to watch the Desimpedidos takeover of its YouTube stream of the match between Paris Saint-Germain and Bordeaux. The additional pre-game content they created to drive people to live feeds on social platforms also reached more than 600,000 people per game.

Of course, social media followers don’t equal paying subscribers. But Beattie said the company is “comfortable” with the progress it’s made transitioning people over to paid subscribers.

“We spent a long time looking at what is the tipping point,” she said. That tipping point also shifts depending on factors like the type of sport, the market, time of broadcast and Dazn’s commitments with rights holders and its ambitions for the sport within that market. In Brazil, for instance, football was always going to be a huge driver for the OTT platform.

“There is a definite use of content that we have identified that has an inherent value to fans,” she said. “If we can engage them in a meaningful way off-platform, our opportunity to convert them to either a free trial customer or a paying customer is that much stronger.”

This means using ancillary content around live events on social to drive viewers to the platform. In the U.S., where it owns a number of rights to fights, it does this with undercards through its relationships with the fight promoters. In Spain, Dazn uses footage of practice from Spanish motorcycle Grand Prix, MotorGP.

Dazn, which is privately-owned, rarely talks about its subscriber numbers. Earlier this year it said it had over 4 million subscribers globally.

Dazn is also getting smarter about the original content it creates and distributes for free. Ahead of launching in Spain in February with the MotorGP rights, it discovered people were less interested in the sport because it had been behind a paywall. Before launching in Spain, Dazn released “In Our Blood,” a free documentary about three Spanish riders to remind people of the passion and old rivalries of the sport.

As most sports are seasonal, during the downtime Dazn creates original programming to keep people on the platform. It’s preferable that customers pause their account rather than unsubscribing, costing the platform more to acquire them again.

“Original content is becoming more important as a retention driver,” said Beattie.

For this purpose, last year it released “Being Mario Götze,” a documentary about the German football player, distributed on its platform, to keep fans interested in the sport during the summer when there is little football played.

There are indications that Dazn’s efforts are paying off, according to Beattie. In Germany, it shares the rights to show the FIFA 2019 Women’s World Cup with Germany’s two public broadcasters ARD and ZDF. With places to watch the match for free, there’s little incentive for people to watch on Dazn’s paid-for platform.

“If [audiences] are choosing to watch on Dazn there is something we are doing to get them in or keep them,” said Beattie. “To see what that content is doing for other people who would have either churned or paused is really encouraging.”

Image: Courtesy of Dazn.

The post Why Dazn is making more content available for free appeared first on Digiday.

Though it was originally developed for Instagram Stories, PopSugar’s evp of product marketing and sales strategy, Chris George, said that he sees opportunities to use Sparkle to build pages that brands can drive people to from mobile search results, mobile sites or other platforms.

Though PopSugar began by offering the product to large retailers it already works with, it expects to begin offering a lighter version to smaller retailers through Shopify’s app ecosystem. It is toying with the idea of including a small amount of media to entice smaller retailers to use Sparkle. The full-service version of the product, which will include full analytics and account support from PopSugar, will carry a monthly price tag in the five figures, George said, with the lighter version costing quite a bit less.

“As we started bringing it to brand partners, we realized there was a bigger opportunity,” George said.

As Stories have turned into a pivotal feature in Instagram, they have become an important source of referral traffic for publishers, who use Stories to drive everything from branded content views to e-commerce.

But pages that users access by swiping up tend to load slowly. After noticing that PopSugar was losing out on traffic because users were abandoning Stories before their content loaded, the publisher’s six-person product research and development team, PopSugar Labs, started building a page format that would load more quickly.

After initially using it to capture more email addresses and drive long-form video views, PopSugar began using it in the beginning of 2019 to drive e-commerce on its own properties. It tapped into the APIs at Amazon and Walmart so that any person who clicked on a buy link for a product in the page would be automatically directed to a new checkout page with that product in their carts.

That version of Sparkle was included in a presentation that several PopSugar executives, including George, made this spring as part of an annual road show it makes to advertisers. After getting some feedback from brands and retailers, it began optimizing the product for use among retailers and brands.

Sparkle currently has five retailers integrated and expects to add more. “Some retailers are very easy,” George said. “Others are more protective and there’s more of a vetting process.”

Though publishers have long tried to position themselves as middlemen or gatekeepers for brands looking for audiences online, their continued investments in digital products that drive e-commerce on platforms could lead to more hacks and evolutions like this one, said Gretchen Grant, a senior consultant at Quantum Media.

“Many of the things that publishers discover they do well, either opportunistically or over time, do end up being of use to advertisers,” Grant said. “Publishers are always trying to figure out ways to add value to advertisers in direct deals.”

The post How PopSugar built an Instagram tool that helps retailers with their e-commerce appeared first on Digiday.

Reselling isn’t new: For decades, people have hawked their already-bought goods via sidewalk sales and thrift and vintage stores. Sites like eBay too provided a way for individual sellers to cash in on used goods. Goodwill has been around since 1902. Jessica Ramirez, a research analyst at Jane Hali & Associates, described this latest wave of startups as “modernized vintage.” “Resale has had a facelift,” she said.

The state of resale platforms
Flashy new resell platforms are catching people’s eyes. “There are more consumers who are entering the resale market — both as sellers and as buyers,” said Neil Saunders, managing director of GlobalData Retail. “It is most certainly growing at a very rapid clip.”

His firm’s numbers, in fact, forecast that the market for resold clothing, accessories, and footwear in the U.S. will hit $51 billion in 2023, more than double what it was last year. Meanwhile, older companies are dabbling with it as well. Neiman Marcus, for example, invested in the resale site Fashionphile and has begun building out a program for shoppers to sell back their old clothes. H&M is reportedly making similar moves too. Both the startups and the older players tout these programs as moves toward better sustainability; instead of buying something cheap and throwing it out some months later, people can recycle their own fashion. This, said Saunders, “fits with consumer trends.”

Beyond the RealReal and StockX there are myriad other online resellers that use a variety of models. ThredUp, for instance, offers a website quite similar to other fashion retailers and department stores. All the clothing it sells, however, is used. People can send ThredUp their own unwanted pieces, for which they can receive a small amount of cash or store credit. ThredUp has raised over $130 million in funding and business intelligence platform Owler estimates that the company brings in around nearly $40 million in revenue.

Poshmark uses a more direct route, having sellers take pictures and ship their own products to buyers. In 2018, the company reportedly brought in nearly $150 million, and it’s been allegedly working toward going public later this year. Poshmark said it has over 50 million users and over $100 million of inventory is uploaded to its platform every week. Thus far, the company has raised nearly $160 million in venture capital. Modern Retail reached out to Poshmark and ThredUp for comment about the reselling market and their future plans, and they both provided statistics about growth and scale.

Still, the overall impact is contested. ThredUp, in fact, commissioned a study (performed by GlobalData) that said the secondhand fashion resale market will eclipse fast fashion by 2028. Forrester analyst Sucharita Kodali, however, described ThredUp’s report “their propaganda.” Those kind of industry claims are “always the issue with someone who is trying to make a case for their own business.”

The challenges ahead
One of the biggest challenges for these startups, Kodali said, is making money. Scaling these businesses requires a lot of high costs. The RealReal, for example, has an accumulated deficit of $281 million. In its S-1, the company admitted that it’s unsure if it will be able to become profitable in the future. Businesses like ThredUp likely have even higher costs given they don’t focus on just high-end goods, meaning its business model is to take in someone else’s unwanted products, store them, and photograph them. ThredUp said it’s “upcycled” (meaning, taken used clothing in exchange for a payout) 85 million items—one-fifth of which were processed in 2018—and that its “Upcycling centers” receive 100,000 items a day.

It’s unclear how many people are participating in this new digital resale industry. Kodali cited Forrester research from late 2016 which said that only 21% of consumers had ever purchased anything second-hand. Even though the research is a few years old, she didn’t think the results today would be that far off. “Only 3% said they purchased from Poshmark,” she went on.

While many of these businesses are reporting growing numbers, their sales have yet come close to the billions of dollars in sales that even the ailing retailers are doing. Gap, for instance, reported over $16 billion in sales in 2018. “The truth is,” Kodali said, “I don’t see any of these niche companies getting to that level in the near future.”

Still, if ever there were a time to make a splash in the resell market, now would be it. Given the RealReal’s debut and StockX’s massive money raise, Saunders thought it inevitable for others to go public soon. “I think that there certainly will be interest in further IPOs,” he said. Poshmark will likely be the next, but others will probably follow. (Neither Poshmark nor ThredUp commented on upcoming IPOs.) Increased investor interest, he went on, will help this industry scale; “It’s all about scaling and generating growth,” Saunders said, “investors are very lenient.”

Kodali concurred that there’s growing investor interest at this current juncture. “There’s a window of opportunity now,” she said. But, “if their economics aren’t strong, I don’t know if they have a good case for going public.” And if they’re unable to capitalize on this current fervor, she said, “I don’t know how long they are for this world.”

The post ‘Modernized vintage’: What comes next for the resale market appeared first on Digiday.

How diverse is your agency?
It’s changed. It was overwhelmingly African American at one point, which in that respect, I think isn’t necessarily beneficial. I think it’s good to have lots of different people working in one place. But I think our agency over the last year has become more diverse. We have a lot more Hispanic and Latinx people working there, a lot more white people. It’s a very interesting, diverse group of people now, whereas before I actually thought it wasn’t as diverse, which is strange.

What are the challenges you’ve encountered when working with clients who have never worked with a multicultural agency before?
From my experience, the one thing I tend to notice the most is that a lot of companies or clients who work with general-market tend to be very number and data-driven: more quantitative than qualitative data, and I think one of the most important things in understanding minority groups is having a sense of the qualitative that exists on these people. You can’t define a group of people by data.

When they are asking for specific numbers, what data do you provide them with?
They tend to want to know the types of people who are attending certain events we’re sponsoring: heavily branded events where we participate in the speaking and providing remarks and doing awards presentations, so we have a presence throughout the events. Specifically what they look for in our after-action or reporting, is who was there? What’s the age group? And they want the breakdown: How many people were African American? How many people were Hispanic? How many people were Asian? Why is it important that we’re reaching these groups? What is the value of reaching these groups? It’s kind of justification for why they’re putting money into this specific effort. Sometimes they tend to find more value in general-market events.

Do you have a specific example of when the client’s need for those hard numbers have gotten in the way of your work?
With events, for example, you may have only had 50 African American people at a multicultural event. If there’s a specific demographic they’re trying to reach, our client would typically be like “Why weren’t there 500 people at this event? Or 100 people?” And you have to understand the impact you’re having on that 50 versus concerning yourself with the impact on the masses. That’s the biggest roadblock for us. We’re on the verge of losing this client because of numbers. They have found justification for this through numbers versus the impact that these engagements have with the demographic they’re trying to target.

While working with your clients, have you experienced racism?
Recently, I attended an event with my client; it’s a predominantly African American event as far as attendees and audience. The event vendor invited us out to celebrate the event culmination party. I could tell [my client] was extremely uncomfortable. He was anxious to leave and head back to the hotel. When the vendor recommended a bar in town, the client vehemently shook his head, and said we would absolutely not go there as it was out of his “comfort zone.” He persuaded the events staff, to come back to our hotel instead. I realized that evening that he was extremely uncomfortable being at a predominantly black event.

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