Month: August 2019

“We used to frown at shopper marketing,” said Anthony Reeves, chief creative officer at Wunderman Seattle. “That’s changed now. The biggest thing is that shopper and brand have to work together.”

Shopper marketing, at its core, is designed to be an “immediate” mechanism — understand a shopper’s needs at the moment they are shopping, and then fulfill them. That’s no longer the case. Advertisers are now spending more money, mostly on Amazon but also other retail media operations. But where that money comes from isn’t simply “shopper” budgets, but broader brand budgets too.

Amazon, for example, is not just seen as a retailer, but, with the growth of its media platform, also a brand marketing platform.  Consumers are now going to retailer websites before, in many cases, Google. From 2015 to 2018, Amazon surpassed Google for product searches, per data from Jumpshot. Estimates now say up to 50% of searches now begin on Amazon.

Big brands, including P&G and Heineken, are now doing more shopper marketing online, with the lion’s share of budgets now going to Amazon. Morgan Stanley estimates about $178 billion is spent annually on trade marketing. And per research group Cierant, even as giant companies have cut down how much they spend on traditional marketing, shopper and trade marketing has doubled its share of spending. Foresight ROI estimates that most of this is going to Supercenter or clubs, with grocery taking about 25% and others taking 26%.

It’s a growing discipline: Market research firm GfK spoke to 50 shopper marketing professionals this year, with the research showing that it’s now being taken more seriously, with a broader purview of what constitutes shopper. Plus, buyers say more brands are dipping into traditional brand budgets and spending it on “shopper” channels, because the lines are getting increasingly blurred.

Pressure also comes from so-called direct-to-consumer brands. DTC brands don’t have the weight of legacy budget buckets on them, which means many of them, especially as they grow up, are doing more with shopper marketing and brand marketing, and not thinking of these as separate. 

“What’s driving DTC brands is their ability to focus efforts against their key consumers,” said Amy Lanzi, evp and commerce practice lead for North America and Publicis Media. “They don’t have the traditional silos that other companies do.”

Jeff Malmad, executive director and head of Mindshare’s Shop+, said that consumer behavior has changed, leading to retailers themselves becoming more than simple purveyors of goods.

“They’re more capable of providing a more frictionless shopping experience, so you see a more diligent operation of how we reach consumers, with the brands they need at the top of mind,” he said.

Some of the shift is also happening, say buyers, because there is now more downward pressure on agencies, who are being asked to show their homework — more effective with their performance and under scrutiny for accountability. That means so-called “national media agencies” now suddenly feel more interested in shopper. 

Taking those principles and applying them to shopper media suddenly makes shopper marketing more interesting, and far richer. That’s why, for example, WPP’s Mindshare built out Shop+, said Malmad. 

“Brands can no longer dictate how or when they interact with the shopper,” said Mike Montagna, svp of commerce at Starcom and former head of e-commerce at Kraft Heinz. “They have to go where the shopper is, which means using more shopper marketing tactics, from retail sales data to purchase based data.”

There are also internal ramifications for brands. Most big companies have separate teams, historically, for “shopper” versus “brand.” With shopper marketing becoming more important, that changes. 

“There is no replacement for valuable retail shopper data as they know firsthand who the most relevant shoppers are to reach, and that will ultimately impact their bottom line. More and more, clients want to know how to best leverage and navigate the retailer platforms to drive sales via both e-commerce and in-store channels, and what best practices are in areas such as search, display, and sponsorship or email,” said Sherry Smith, CEO of WPP-owned retail agency Triad. 

At Publicis, the holding company is focused on finding and cultivating what it calls commerce specialists inside agency brands. The role, that of “commerce strategist” bridges the performance-oriented investments being made with the brand-oriented ones.

At WPP, an effort has been made to roll up a plethora of retail-focused shops with Wunderman Commerce, which now has over 1,500 employees and has been acquiring agencies like commerce experience shop Gorilla Group, e-commerce agency 2sales, and added Marketplace Ignition in 2017.

For “shopper marketing” agencies, it’s an interesting conundrum. On one hand, it’s great for them to see their discipline getting more interest. On the other hand, there is a distinct feeling that the bigger and more general media agencies are coming to get them. 

For Smith, it’s the opposite. Shopper agencies within holding companies are advantageous, she said, even as larger media agencies set up specialty teams. 

“However, brands are questioning whether the larger organizations have these unique skill sets to understand and move at the pace of retail. Plus, as more data is used within shopper marketing, brands are asking their agencies to become experts in distinguishing successful tactics among retailers and content publishers,” said Smith.

One of the other effects of this is a dearth of the right talent. Lanzi said ideal “commerce” specialists understand retail media offerings but also strategically how to fit these into existing budgets. And because brands are so siloed, between shopper leads, sales leads and brand market leads, the commerce specialist has to bridge their gap.

“You can’t just think as a marketer, but you also can’t think as a salesperson,” said Montagna. “Understanding retail and brand goals is hard.” 

Some places, both inside agencies and brands, are thinking more of a category management structures, appointing what Montagna calls “mini CEOs” of their categories, responsible for all aspects from marketing to sales. “It’s a dual role.”

The post With rise of Amazon, shopper marketing is booming appeared first on Digiday.

“What’s happening right now is a crisis of trust between clients and agencies,” Avi Dan, chief executive officer of agency search consultancy Avidan Strategies, previously told Digiday. “Clients feel like they’re not getting the right results [and] the right service from their agencies.”

Shift work to consultancies
Other alternatives are cropping up — consultancies, who already work with plenty of big brands for various technology, supply chain or other management consulting functions, are also working more with the office of the chief marketer. While some clients aren’t convinced that consultancies can do the work to fix a problem but are better at pointing out what’s wrong, that isn’t stopping clients from tapping them over agencies. Per Digiday research, 22% of clients surveyed plan to shift marketing work that’s done by agencies to consultancies.

Consultancies are able to win the work of some clients who are fed up with the agency model, which can be bureaucratic and expensive.

Take work in-house
Clients looking for another option other than an external agency will likely consider moving work in-house. Much of the move toward in-housing has been the result of clients looking to take back control of their marketing dollars, something the world’s largest marketer, Procter & Gamble, has championed repeatedly in recent years. In-housing can have its own issues, but clients will typically continue to work with agencies in some fashion, with 61% of clients surveyed noting that they still work with an external agency partner for creative production.

How in-housing impacts the agency-client relationship
Moving work away from agencies, a trend in recent years, certain changes the agency-client dynamic. Of the 73 clients surveyed, 30% said moving work in-house has strained their relationships with agencies, per Digiday research. The rise in tension makes sense: There’s a more clear and present threat that the client may move more of the work an agency does for it in-house, especially if it helps that in-house team learn how to do what it does. That tension can not only impact the overall mood but the day-to-day relationship, with agencies pushing back more on clients’ requests.

The post Digiday Research: Why the brand-agency relationship is getting increasingly worse, in 5 charts appeared first on Digiday.

Then what had been a dream that was finally becoming a reality turned into a nightmare. On March 31, 2019, Wiener and Comscore president Sarah Hofstetter — Wiener’s successor at 360i who joined Comscore in September 2018 — announced their resignations from Comscore after the company’s board demanded cuts that the pair argued would compromise their long-term strategy to establish a cross-platform measurement currency.

In their absence, the effort to combine Comscore and Rentrak to rival Nielsen appears to be coming undone, based on conversations with 12 people who have knowledge of the inner workings of Comscore’s business following Wiener’s and Hofstetter’s departure, including former employees and agency executives. Instead of overtaking Nielsen, Comscore has been overtaken by Rentrak, according to former Comscore employees. Agency executives have similarly observed an emphasis on the TV measurement side of Comscore’s overall business in conversations with the company’s leadership, which now primarily consists of former Rentrak executives.

The TV and video advertising industries have been approaching an inflection point that holds the potential for the measurement industry to undergo its own seismic shift. As the two media continue to merge, measurement across TV and digital has emerged as the foundation for adequately accounting for audiences and ad dollars on a like-for-like basis. This inflection point has made an opening for a company like Comscore to challenge, if not usurp, Nielsen’s standing as the preeminent measurement provider. With its legacy digital measurement business and growing advanced TV measurement business, Comscore was considered especially well-positioned to measure media and advertising in an era when all media are delivered over the internet and ads are bought against advanced audience segments instead of traditional age-and-gender categories. However, Comscore’s aims appear to have narrowed to focus on growing the Rentrak side of the business in the short term.

Cuts to Comscore
While still considered by industry executives to be Nielsen’s biggest rival, Comscore has shrunk in multiple respects following Wiener’s and Hofstetter’s resignations. The company’s stock price has sunk from $20.25 on March 29 — two days before Wiener and Hofstetter announced their resignations — to less than $2, as of this writing. Its total revenue declined by 4% year over year to $96.9 million in the third quarter of 2019, while its net loss ballooned from $56.0 million in Q3 2018 to $279.5 million in Q3 2019. Its ambitions have narrowed from competing with Nielsen’s TV measurement business to concentrating on complementing it with Rentrak’s advanced TV measurement capabilities that go beyond traditional age-and-gender-based measurement, according to multiple former employees. And multiple rounds of layoffs this year have diminished the company’s product and sales teams, the former employees said.

On August 20, Comscore announced in a regulatory filing that it is laying off 8% of its workforce. According to former Comscore employees, roughly 150 people are being let go, including evp of brand and agency sales Moritz Loew; evp Anthony Psacharopoulos; and svp of strategic partnerships and business development Sumit Shukla. These three executives reported to chief commercial officer Chris Wilson and were considered by former employees to represent the company’s digital sales leadership. Loew, in particular, was in charge of selling all Comscore services, including Rentrak, to advertisers and agencies, while Psacharopoulos worked with digital publishers and platforms. Shukla’s position is said to have been a hybrid role with an emphasis on working with walled gardens and platforms like Roku. That the trio represented the digital side of Comscore’s business — i.e. its legacy online and mobile measurement business — may have made all the difference.

In the wake of Wiener’s and Hofstetter’s departures, Comscore’s digital business has taken a backseat to Rentrak’s TV measurement business, according to multiple former Comscore employees. Wiener, Hofstetter, Loew, Psacharopoulos and Shukla did not respond to requests for comment.

“The reality is that the marketplace is evolving. Demand for standalone traditional digital services is declining. Comscore is therefore focused on innovating in a multi-platform cross-media world — of which digital is a huge part. It’s inaccurate to say that Comscore has lost its digital leadership. Further, our executive teams are speaking daily with agency and network executives who are helping guide our cross-platform strategy and innovation. We’ll be sharing more details on our new approach in the coming days. Ultimately, we are redefining Comscore’s mission to capitalize on our customers’ needs. We truly believe these changes will result in a more focused and successful company,” said Comscore interim CEO Dale Fuller in an emailed statement.

Comscore’s rollercoaster history
This is not how things were supposed to go for Comscore, though it’s fitting for how things have gone for the company in recent years. Rentrak had been meant to play a major role in Comscore’s future when the two companies merged in 2016. The former’s TV-and-movie measurement business would appear to pair well with Comscore’s online measurement business to finally bridge audience and advertising measurement across TV and digital. However, an accounting scandal that came to light in 2016 set back the company’s intentions until 2018 when Wiener was appointed CEO.’

“The whole genesis for the merger was to do cross-platform [measurement], and we never got it done,” said one former Comscore employee.

A longtime agency veteran, Wiener recognized Rentrak’s importance to the company’s future and set about integrating its TV measurement capabilities with Comscore’s online measurement capabilities to create Comscore Campaign Ratings. Former employees said that, while Wiener did not bring a measurement background to the role, he was a quick study and drew the right conclusions about what the company’s priorities should be amid a shifting media-and-advertising market. Wiener had taken what former Comscore employees described as a slow and methodical approach to building up Comscore’s cross-platform measurement business. He intended to grow Comscore’s business in the short term — projecting modest growth in revenue and gross margins for 2019 — but not at the expense of setting up Comscore for the long-term opportunity to challenge Nielsen.

Comscore’s board had other ideas and pressed Wiener and Hofstetter to make cuts. That led to Wiener’s and Hofstetter’s resignations, which almost immediately dropped the company’s stock price from $20.25 on March 29 — two days before Wiener and Hofstetter announced their resignations — to $14.24 on the day after the news broke.

Comscore’s stock price has sunk even further in the months following Wiener’s and Hofstetter’s resignations. On August 26, shares in Comscore were trading for under $2. That devaluation has made Comscore an attractive acquisition target, and in recent weeks at least one company has inquired about acquiring Comscore, though Comscore’s board is said to not have engaged in any acquisition talks.

The company’s reticence to sell may have to do with the prevalence of former Rentrak execs among the company’s board and leadership. Rentrak merged with Comscore in an all-stock deal. Considering that Comscore stock was trading at $41.15 on the day that the merger was finalized, Rentrak execs stand to make significantly less money if they are unable to turn around the company’s stock price, if not the company.

The cross-platform promise
By combining TV and digital measurement capabilities, the merger of Comscore and Rentrak was supposed to strengthen the combined measurement firm to contest Nielsen’s dominance over the measurement market. What has come to pass instead is instability inside of Comscore. After Comscore’s board pressed Wiener and Hofstetter to make cuts in order to generate short-term profits, the pair resigned. Rentrak executives have filled that leadership vacuum and prioritized the company’s small-but-growing TV business in the near term, potentially at a cost to the company’s long-term prospects.

Agency execs are concerned that Comscore may be missing its window. When Wiener and Hofstetter were at the helm, agency execs were able to have big-picture conversations with the pair about how to get cross-platform measurement off the ground. In their absence, those conversations are absent. Conversations with Wilson are more “nuts and bolts, day-to-day things,” said one agency exec. Meanwhile, interim CEO Fuller, who has a history of leading and serving on the boards of enterprise software firms, is considered “very smart, but he doesn’t live the business because it’s not his day job.” On Comscore’s most recent earnings call, Fuller was asked about Comscore’s plans to hire a permanent CEO — the search is a high priority for the company’s board, he said — and said, “I look forward to getting back to retirement.” A former Comscore employee said the comment was characteristic of Fuller’s habit of making jokes that sometimes fall flat.

While agency execs acknowledged that any new measurement product would face a long road to becoming a currency on which media is bought and sold, the rollout of Comscore Campaign Ratings, which remains in beta, has been slower than the agency execs had anticipated. That slower-than-expected rollout has been aggravated by a feeling among agency execs that Comscore lacks the leadership that agency execs can turn to after encountering the kinds of hiccups natural to any developing product.

“I don’t know, if Bryan or Sarah were still there, whether it would be any faster, but at least I would have somebody to whine to,” said one agency exec. This exec said that it has been more difficult to receive answers when technical glitches are found, and they’ve gotten the sense that the company is spread thin across its ranks.

The slow pace of Comscore’s product development would make sense considering how decimated the company’s product leadership team has become. In June, the company’s chief product officer Dan Hess left the company, as did svp Naresh Rekhi. Since then svp of TV and cross-platform products Kendall McMahon has also left the company. However, while multiple former employees used the word “gutted” to describe Comscore’s product team, they and the agency execs do not believe that explains the slow rollout of Comscore Campaign Ratings, which remains in testing. Instead, they believe it is an issue of Comscore not being able to get enough advertisers, agencies and media companies to adopt the product at a time when Nielsen is aggressively pushing its cross-platform measurement products. “I don’t know if they’re going to get left behind. But they’re definitely not going fast enough to lead the market because Nielsen is picking up the pace,” said an agency exec.

Enter Rentrak
Multiple former Comscore employees used the words “a Rentrak takeover” to describe the shift inside the company following Wiener’s and Hofstetter’s departures. They pointed to Rentrak executives dominating the company’s leadership ranks and its shift in emphasis of TV measurement over digital measurement, which has also become apparent to agency execs.

These agency execs, who were interviewed before Comscore’s more recent layoffs, feel that Comscore’s sales team is strong across digital and TV and that the sales organization is unified between the two sides. However, as they talk to people higher up in the company, the focus of the conversation shifts to the linear TV side, though that could have as much to do with those execs today commonly being former Rentrak execs as with a shift in the company’s strategy.

Former Rentrak CEO Bill Livek serves as the vice-chairman of the company’s board, and people inside and outside Comscore, including one agency exec, believe that he had been angling for the CEO position before, during and after Wiener held the role. Former Rentrak board member Brent Rosenthal serves as the board’s non-executive chairman. Chief product officer David Algranati hails from Rentrak, as does chief commercial officer Chris Wilson, who had been fired for poor performance in the fourth quarter of 2018 before being brought back after Wiener and Hofstetter stepped down.

Livek, Algranati, Wilson and evp of national sales Carol Hinnant are considered by former employees to be the four most important people at the company today and they are all Rentrak alumni. Furthermore, while Loew, Psacharopoulos and Shukla were let go, three other execs who report to Wilson and joined Comscore from Rentrak remain: Hinnant, evp of local TV Steve Walsh and svp of strategic partnerships Scott Worthem.

Comscore’s shift in emphasis from its legacy digital business to Rentrak’s TV business is not unfounded. The company’s syndicated digital measurement products represent the bulk of its biggest revenue segment, accounting for 50% of the $68.9 million that Comscore’s “ratings and planning” segment generated in the second quarter of 2019. However, that business is in decline, having accounted for 55% of the company’s $70.5 million in “ratings and planning” revenue in Q3 2018. Revenue from Comscore’s TV and cross-platform measurement products, meanwhile, increased year over year in the period, though Comscore does not break out those two categories to show how much of the increase was driven by TV versus the cross-platform measurement products.

Additionally, the Rentrak execs likely have their reasons for emphasizing the company’s growing TV business in order to buoy its sinking stock price. Comscore’s stock price had already had been a source of frustration among Rentrak execs in connection to the all-stock terms of the merger. Roughly a month after the merger closed, Comscore disclosed the accounting issues, which immediately dropped its stock price by 30%, was later confirmed by an internal audit and led the company’s stock to be delisted on Nasdaq in February 2017 (it regained its listing in June 2018).

That scandal set the wrong foundation for the merger. Rentrak executives looked at the Comscore employees, who were now their colleagues, as crooks even if they weren’t involved in the scandal and contributed to a massive divide between Rentrak employees and legacy Comscore employees that were never fully addressed head-on, said a former Comscore employee. “Could you imagine being one of them and now here you are [with Comscore shares trading] at $2? I’d be pissed off and unhappy too. For that topic only, I don’t blame them,” said this former employee.

“Just trying to live to fight another day”
Particularly troubling for several former employees is the sense that Comscore is not concerned about competing with Nielsen. Inside the company there is the sentiment that Comscore does not need to compete with Nielsen, that this is not a winner-take-all scenario. While Nielsen dominates traditional TV measurement, Comscore executives are said by former employees to believe that they can leave that side of the market to Nielsen and that Comscore can focus on advanced TV measurement, where it notched a recent win a deal to be the measurement provider and currency for AT&T-owned Xandr’s addressable TV advertising business.

However, it’s not only that Comscore appears comfortable being a complement to Nielsen instead of a competitor. What’s making former employees and agency execs uncomfortable is the feeling that the company has narrowed its focus to the near term. “The sales efforts to get stuff in our hands is still as strong as ever, but the ‘what’s the next thing to build?’ Effort is quieter than it used to be,” said one agency exec.

Cross-platform and digital measurement remain part of Comscore’s long-term strategy, but they have become less of the focus in the short term. The short-term focus centers on linear and addressable TV measurement. “They’re just trying to live to fight another day,” said one former employee.

Comscore’s prospects are such that on August 14, the same day the Xandr deal was announced, Comscore announced that Paul Reilly — one of the board members who is said to have been among those clamoring for cuts — was resigning his seat. Comscore executives have internally tried to downplay Reilly’s resignation by telling employees that board members often resign for personal reasons. But Reilly left no room for that kind of interpretation in the resignation letter he sent to the company on August 12.

“I do not believe the Company’s go-forward operating strategy, in general, is progressing fast enough and specifically in innovation and product development,” Reilly wrote.

The post ‘A Rentrak takeover’: Inside the fallout from Comscore’s executive shakeup appeared first on Digiday.

“Our mindset is to find and develop upcoming talent and turn them into global superstars and brands in their own right,” said Devran Karaca, one of Kyra TV’s three co-founders. “For monetization, we leverage their audience power to create great relationships with advertisers, brands and e-commerce businesses within these entities.”

Kyra is in talks to sign two other creators over the next few months. The plan is to build on the success of its two talent-led long-form shows on YouTube, “PAQ” and “Nayva.” The more recent, “Nayva” — a weekly 20 minute show airing each Tuesday, covering fashion, beauty, style and culture for teenage girls — launched last October and is fronted by four women.

Kyra took a more manual approach to recruitment for “Nayva’s” foursome, running Instagram ads to ask people in New York, Los Angeles and London to audition. Out of nearly 150,000 applicants, Kyra whittled it down to 18,000 who were invited for an open casting call.

Since launching in October, the channel has grown to 330,000 subscribers on YouTube thanks to episodes like recreating early 1990’s looks and animal print styling challenges. “Nayva” runs clips on TikTok and Instagram, but YouTube is the focus. With an average watch time of 15 minutes on 20-minute content, advertisers are drawn to its ability to get younger audiences to stick around, according to Karaca.

Thanks to this success, advertiser demand means this year the publisher is on track to make $10 million (£8.1 million) in revenue, three times what it made in 2018. Around 80% of this is from branded content; the rest from platform ad sales and e-commerce sales expected when it launches this line in October.

All “Nayva” episodes are available for branded content opportunities, which mostly take the form of product and brand integration. Kyra pitches the top-line narrative to brands, which typically pay six figures per episode. For Converse, sponsoring one episode last year led to a yearlong partnership. For now, between 20% and 30% of “Nayva’s” episodes are paid for by brands.

Although, according to Iona Goulder, creative director at Kyra TV, there will be a limit to how many brand episodes it can take on in order to keep up its growth rate. Aside from exceptions with brands like Nike and Beats by Dre, “Nayva’s” editorial episodes drive more subscribers than its brand episodes. This editorial episode, where the foursome recreated rapper Rico Nasty’s most iconic outfits drove 19,000 YouTube subscribers, with over 600,000 views. Beats by Dre drove 5,000 subscribers.

“If you have too many brand deals it’s more difficult to build your own personal brand franchise,” said Goulder. “There’s a danger you are potentially compromising your own message to integrate a brand’s message.” The channel is still less than a year old, so there’s room for more brand deals as it establishes itself.

Production studios and media companies, like Bleacher Report and Complex, have long worked with talent. Kyra’s approach is interesting because the talent is exclusive and it’s central to Kyra’s content ambitions. Brands work with Kyra’s talent via its shows, like “PAQ” and “Nayva,” but also for brands like Calvin Klein and TK Maxx; these presenters extend the campaigns through their own personal accounts.

Kyra has adapted its editorial strategies along the way. It previously launched two other shows, “Greatness” and “Bad Canteen,” but the high-production values of “Greatness,” where the presenters travel around the world, were only met when brands paid for the episode. New content hasn’t been added to these YouTube channels in the last year. Now Kyra is focused on developing formats that are feasible with or without brand involvements. Revenues from pre-roll ads on platforms have never been a core aim. From the start, the publisher has avoided being sucked into the quick-scale mentality and high — but potentially meaningless — views of Facebook.

While agencies are impressed with Kyra’s ability to create longer-form shows for younger people, it needs to work on developing its slate. “The challenge, as always, is how you scale while still being authentic,” said Dan Wood, joint head of MediaCom Beyond Advertising. “Sure they have been aggressively casting and looking for the right options, but it’s not easy to develop this stuff overnight.” Using tech to scour platforms for upcoming talent will boost its ability to find emerging stars more quickly.

To date, the company has raised $5 million (£4 million) in funding, and it has just closed a seed round for a higher number to be announced in October. This will go to setting up its e-commerce line, opening an office in LA, launching between two and three new shows and signing new talent by the end of the year. Kyra has grown to 60 people. By the end of the year, it will have another 15 or so in LA. With a base there, Kyra expects to ramp up its talent acquisition. Already, 60% of “Nayva’s” audience is in the U.S.

As younger people increasingly spend more of their time on social media rather than TV — GlobalWebIndex found people spend on average 2 hours and 22 minutes a day on social media — looking to these platforms for talent makes sense.

“These platforms are essentially the cable networks of the modern era,” said Karaca. “It’s about getting as much attention from that [Gen Z] audience. The people winning on those networks are the talent, so we believe in building that infrastructure and strategy around them.”

Image: courtesy of Kyra TV.

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That share of spend is set to grow over the coming months, according to Elshout. For now, the amount the travel brand spends on video is evenly spread across ads in the feeds for Facebook and Instagram, said Elshout. The remaining two-thirds are spent on dynamic ads targeting people who have looked at a TUI holiday but not booked, for example. Elshout wouldn’t reveal the total amount the advertiser spends on paid social but said that 80% of the money is on mobile rather than desktop.

Video ads have grown quickly over the past few years, with more advertisers spending more on platforms like Facebook and Instagram. As more video ads are bought on social media platforms, the amount of display ads with videos embedded has declined, with advertisers like TUI recalibrating where they buy their ads from. While display video accounted for 82.7% of online video ad spending in 2018, the pace of growth for social video is fast, with a 20.8% annual growth rate through to 2023, per Forrester.

Video continues to lead the way in paid social with advertisers like Deliveroo and Lastminute.com reporting that it is the most effective social ad format when it comes to hitting both brand and performance goals. TUI’s decision to buy more video was predicated on the discovery that ads on Facebook and Instagram drive more traffic to its site and deliver more sales at a cheaper cost than they have done before.

The discovery was reinforced by TUI’s alternative approach to optimizing campaigns. Instead of running a series of smaller test campaigns, which can often increase costs due to the data needed for all the different variations, the advertiser found a way to automate the way it finds the best combinations for video ads to deliver specific goals, such as clicks, to special offers as well as broader reach targets. Working with martech business Smartly.io, TUI’s marketers use algorithms to determine what parts of a video, such as the call-to-action or the end screen, deliver the best results. It’s a more modular approach to optimizing TUI’s paid social campaigns, said Elshout.

Since the advertiser first tested the approach at the start of the year, the cost-per-action has dropped as much as 36% for some campaigns versus what it would’ve been without the modular approach, said Elshout. He believes the CPA could be even lower given tests to date have been for shorter, tactical campaigns. The longer the campaign, the more time TUI has to test the different combinations that make up a video ad. The cost per initiated checkout dropped by 72%, said Elshout.

“We want to expand the modular approach to creating video ads so that it’s more like an always-on tool for us. It’s good to test,” said Elshout. “In some ways, we can iterate even more over longer periods.” For instance, a campaign earlier in the summer ran for two and a half months, which meant there was a longer period to test different combinations of the same video ad. Some of those combinations were based on previous learnings as Elshout and his team had found some assets from older campaigns were working on the more current one.

There’s no hard correlation between the best-performing ads and whether they run on Facebook or Instagram, said Elshout. There are signs, however, that the type of format used could be more important than the social network for the advertiser. Ads focused on peddling price-orientated messages tend to perform best in the feeds for Facebook and Instagram, while those that have more of an inspirational slant tend to do well on Stories. Indeed, ads in Stories are becoming a staple in all Facebook campaigns. “We’re spending more on Stories,” said Elshout. “When we promote our less price-orientated comms, then that’s where Stories tend to perform better than the other formats.”

Decisions on what ads to buy are made from TUI’s in-house team, which consists of two search specialists, one display manager, a video specialist, a digital marketing manager and Elshout. The team has been built over the last two years and is being replicated in the advertiser’s other markets, like the Netherlands.

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