Month: August 2019

Excerpts have been lightly edited for clarity and flow.

What strategic benefits does taking a minority — rather than controlling — stake in Business of Fashion bring for the FT?
Ridding: We’ve been getting to know Business of Fashion for a number of years. It’s growing well and has a similar reader revenue model to us. It also aligns with the FT’s broader strategy. We have been working to develop a series of specialist premium subject areas because we think that must-have information is crucial to our global audiences. We’re fairly flexible about how we pursue that strategy. We develop our own, home-grown specialist verticals like “Due Diligence,” [and] we’ve also made acquisitions and also partnerships, which in this case is how we’re going about it.

What can we expect to see from future collaborations?
Ridding: We see the fashion and luxury sector as strategically very important. We have a strong presence in luxury and fashion through “How to Spend it,” but that’s more business-to-consumer facing. The business-to-business dimension of BoF is attractive as it has strong business potential. There is scope to work together closely in some important areas. In particular, it aligns with another part of our strategy to benefit from the decade-long investment we have made in developing expertise around reader revenue subscriptions data analytics. So part of the partnership with BoF is to provide FT expertise and knowledge in subscriptions management and reader revenue. We see this whole field of customer engagement in a scientific, analytical way as something that is strategically crucial for news media but has implications and opportunities well beyond that too. Also, there are lots of opportunities around forums and events. I’ve seen firsthand what BoF does with its live events. While both brands and organizations are very digital- and reader revenue-focused, we’re also big believers in the physical, personal and networking dimension of business.

Is taking a more controlling stake in BoF part of future plans?
Ridding: It’s not on the agenda at the moment, and doesn’t need to be. There is plenty to be getting on with for now.

Amed: We have been explorative in our conversations with the FT and the rest of the investor group, but this is not leading down the path of an acquisition necessarily. But we respect and share values in terms of creating valuable content and a business model focused on reader revenues, so there seemed a lot of natural synergies to explore. But it does not prevent us from working or partnering with other organizations or talking with other potential partners down the road. It’s a step in a positive direction for getting to know an organization that is aligned with our own, but there’s no foregone conclusion about where this ends up.

What do you envisage in terms of commercial targets for the FT off the back of this investment?
Ridding: The principle is, in having found a business in a strategically important space, we want to do all we can to help it grow and succeed, and we now have a vested interest in that. There will be [commercial] benefits from projects, events-specific activities together. We are also starting to explore the potential to cooperate in some interesting growth markets geographically.

Can you speak to those benefits? 
Ridding: We have been building a presence in China over a decade at the FT. Clearly, that’s a fast-growing market for fashion and luxury and BoF has a presence there, so that’s an area we could explore more together. But we want to focus on a few areas and make them a success, then continue to explore other opportunities: not try and boil the ocean at once.

Amed: It’s important to underscore that we’re still running two separate businesses, with our own teams, targets and goals. It just so happens there are some intersecting areas that present an opportunity to collaborate. This week at BoF we have a joint working team, which includes some of the top people from the FT and BoF, putting their heads together through the FT Strategies piece, looking at how we’ve grown our subscriptions business quickly and what are the levers we have available that will accelerate that growth in the coming months and year. We’re taking it one step at a time.

The post The Financial Times’ John Ridding and BoF’s Imran Amed on future collaborations appeared first on Digiday.

Figuring out that platform — a unique combination of advertising and commerce — has become a specialty and a cottage industry of sorts. The existence of that cottage industry is nothing new, with agencies and other various service providers emerging in recent years all pitching their knowledge of the platform to clients. But now, with this directory, Amazon is giving marketers a sense of who’s who among those service providers and tools and giving a boost to agencies that it believes have provided a “high level of engagement and proficiency” with the business.

While the list in its current form may be a snapshot of the larger Amazon provider landscape, media agency sources believe it will grow and expand over time to include more providers, especially as Amazon grows its ads business from one primarily built on search to focus on advertising on FireTV, Twitch, Amazon Audio and more. It’s unclear how Amazon picked the list, what quantification may have been needed or if there are perks for being part of it, as Amazon did not immediately respond to a request for comment.  

“Amazon has grown its advertising capabilities quickly, which has spawned countless Amazon-focused vendors,” wrote Jason Hartley, svp, national head of search and paid social at 360i, in an email. “That has led to a bit of a Wild West atmosphere, and I think this is an effort to bring some order to brands who are ready to grow their presence on Amazon.” 

Amazon Advertising isn’t the only business that the company has created a directory of service providers to help its clients. The company also created a directory for its Amazon Web Services business. “Think about where Amazon makes their money; they make a lot of money with AWS and with [advertising] media,” said Eric Heller, evp of marketplace services at Wunderman Thompson Commerce. “For people working with them to find value in those programs — they’re complex — it behooves everyone to grease that and make it work better.” 

During the second quarter, Amazon reported $3 billion in what it categorizes as “other” revenue, which is mostly made of up revenue from advertising. That’s a slower growth rate compared to the second quarter last year, just as the first quarter showed, as the platform is maturing. 

“[This is] absolutely a sign of a growing ecosystem and the overall influence of Amazon as an advertising platform,” wrote Kevin Packler, vp and director of Amazon services for Tombras, in an email. “For example, many of the companies on this list didn’t offer Amazon services or even exist five years ago. With Amazon’s reach growing in paid search and via new platforms such as Fire TV and Amazon Audio Ads, for example, the proliferation will only continue.” 

For example, Channel Bakers, an full-service Amazon agency founded over four years ago is on the list.

As Amazon Advertising’s offerings continue to grow, so too will its ad business. The need for agencies and other service providers to be experts in advertising on Amazon doesn’t exist in a vacuum. While the company has grown its ad business quickly it has not been without its own issues. “They’ve made a lot of progress in the last couple of years, but there are still some structural obstacles for them to make the most of their platform,” wrote Hartley. 

One of the biggest obstacles for Amazon’s ad business is that brands can’t treat Amazon as they would any other advertising platform. That not only creates the ecosystem of providers that the directory is meant to help brands with but can be a headache for brands who want simplicity when it comes to how they manage their ad dollars. If they have one team managing other platforms and another managing Amazon, that can create a lot of back and forth. With the directory, marketers are able to see which agencies they can tap for both rather. Amazon is also able to be a somewhat neutral third party, as the directory helps point brands where to go but doesn’t tell them who to use. 

“Amazon is bridging the gap for those advertisers who rely heavily on their agencies as full service shops,” wrote Bruce Kiernan, managing partner and head of commerce in the U.S. at Wavemaker, in an email. “We’ve reached a pivotal moment in our industry where clients are asking for more hybrid solutions.” 

While the dashboards Amazon offers to clients have gotten better with a more complete picture of the data, according to Heller, some data is still only available through third-party vendors. 

“Data is getting better about the Amazon ecosystem,” said Heller. “At the same time, as large holding companies and the like are adding Amazon credibility, what we’re seeing is a revolution of software and data-providers coming up to support brands in this space. Folks dedicated on reporting and supporting operational data, folks dedicated to supporting on brand health and reputation. Two years ago, it was very hard to get this data. Now, for $200 a month on a corporate credit card you can get a raft of data.”

The post ‘A growing ecosystem’: With new partner directory, Amazon signals maturity of its ad business appeared first on Digiday.

But the customer acquisition challenges DTC brands face go beyond cost. Even though Facebook and Google may be a more expensive way to acquire customers, their scale all but ensures that DTC brands can’t entirely abandon the platform. So, in order for a brand to invest in a new marketing, it can’t just be cheaper: The channel also has to be better at something that the duopoly of Facebook and Google typically struggles with. That could be encouraging customers to discover products that are more closely tied to their interests, rather than what websites they’ve clicked on prior. Or, giving them metrics to determine how effective their advertisements are beyond just who clicked on them.

“It’s an absolutely systemic issue in the future of direct-to-consumer,” said Evan Wray, the co-founder and CEO of Mavely, a new shopping app that publicly launched earlier this week. “As a result all of these different companies are trying to find alternative outlets to acquire customers.”

Today’s fast-growing DTC startups can expect pitches from platforms like Pinterest to streaming services about why they are a better — and cheaper — place for acquiring customers. There’s also a steady drip of new startups — from shopping apps like Mavely and Verishop to marketing platforms like DTX Company that are pitching startups, in part, about their ability to acquire customers more cheaply, and customers that they can’t reach on traditional social and search-based digital channels.

Mavely’s main pitch to brands is centered around lower customer acquisition cost — Mavely has about 30,000 users with 100 brands including Brooklinen, Ritual and M. Gemi selling through the platform. The app makes money by taking an affiliate fee from each purchase. Wray said that during the testing phase, brands have been able to acquire customers for about one-half to one-third less than it takes for them to acquire them on Instagram.

But Mavely is also trying to pitch brands on the fact that it’s a platform designed to allow them to reach new customers through word of mouth — something that they can’t do through by bombarding customers with Google and Facebook ads. Mavely users can invite their family and friends to join the app, and receive 5% back on their purchases.

There’s also a section on the app for friends to message one another and recommend products. The hope is that customers of one brand can then find products from other brands, based on recommendations from people they know have a similar taste as them.

Other options
Other DTC brands are seeing potential in spaces where they can benefit from the caché of other brands, because it allows them to reach customers that they might not have been able to through broad targeting options on digital platforms. On Facebook and Google, brands can’t target customers based on who is interested in buying products from companies who prioritize sustainability, for example.

Alexandra Zatarain, co-founder and vp of marketing for high-tech mattress brand Eight Sleep, said that when the brand decided to open its first physical retail space, it decided to open a space in Showfields, because it wanted to be in a space where they might get traffic from other brands looking to discover similar. In the four months that Eight Sleep has been displaying in Showfields, Zatarain said that about two-thirds of the visitors it has gotten initially came to check out another brand’s space, or were drawn in generally by the Showfields concept.

“That is huge for a brand like us where we might not have enough of a budget yet to just support that kind of traffic to our own retail location,” Zatarian said. As such, she said that a focus for Eight Sleep going forward will be establishing marketing partnerships where the company feels that it can acquire new customers who are already customers of another brand whose demographics are similar to those of Eight Sleep.

Another key consideration for brands as they look to other marketing channels is what kind of metrics they can obtain through new advertising channels. As they’re accustomed to growing up on click-based attribution channels like Facebook and Google, they are used to advertising through platforms where they can see exactly how many people view their ads, and seemingly end up buying their products because of that. But DTC brands are increasingly finding that click-based attribution doesn’t do a sufficient enough job of accounting for all the other places that a customer might have heard about a product from before buying.

That’s led The DTX Company to pitch DTC brands on its new Unbox technology platform, on the fact that it can help them market on and better understand the value of traditional channels like TV, as well as offline channels. In September, the company will start doing offline activations at events like conferences and football games, where customers can buy items using QR codes to allow DTX Company to better understand how customers are interacting with brands.

DTX Company’s chief revenue officer, Jim Norton, said that its in talks with “hundreds” of brands to use the platform, with a couple dozen brands in test mode on the platform. He said that the hope is to gather enough data so that the company can provide insights about “what worked for an out-of-home ad for an apparel company, or an out-of-home ad for a subscription vitamin.”

Karalyn Zamora, the director of digital marketing and growth at Gravity Products, said in an email that her team has been tracking lifetime value more closely as a measure of customer acquisition success as Gravity Products’ product line has expanded. (It initially started with a single product, the Gravity weighted blanket, and now also sells pillows and sleep masks.) In addition, Gravity now relies more on return-on-advertising spend, rather than cost-per-action, to track the effectiveness of marketing campaigns.

That has led more top-of-the-funnel platforms like Pinterest to pitch that as their value proposition — the head of Pinterest’s sales team that works with DTC brands, Katie Dombrowski, recently told Modern Retail that it believes DTC brands can acquire higher lifetime value customers on Pinterest, because they come to Pinterest with more of a shopping intent compared to other platforms. As more and more platforms seek to win over DTC brands’ marketing dollars, they will have to continue to finesse their pitch as to why the customers they acquire on that platform are more valuable than the traditional Facebook or acquired customers.

“I think one of the things that a lot of brands are struggling with is that fast, expensive acquisition does not always yield the greatest lifetime value,” Norton said.

The post ‘Systemic issue’: The customer acquisition challenges DTC brands face go beyond cost appeared first on Digiday.

On one level, these improvements are meant to improve conversion rates and drive more revenue. On another, they’re designed to encourage people to visit more regularly, build up reader trust and direct long-lasting relationships, increasingly high priorities among media companies.

“We’re very much in the 2.0 phase,” Nilla Ali, BuzzFeed’s vp of strategic partnerships, said of the site’s commerce product strategy. “2.0 is about, ‘How can we amplify the successes we’re seeing?’”

Last month during Prime Day, BuzzFeed began adding a widget to the top of its commerce articles that highlighted the products past readers had bought most frequently. The theory was that the widgets would help readers get through lists, which often had upwards of 30 items listed, more easily.

The widget drove click-through rates that were seven times higher than the ones BuzzFeed typically got during non-sale periods, enough to encourage them to keep adding them to past popular articles.

That widget is part of a broader trend at BuzzFeed and other commerce publishers to highlight and repurpose what is working. Ali said that BuzzFeed’s editors now regularly use the three years’ worth of affiliate conversion data it’s gathered to find content to repackage and redistribute, mostly through Facebook. “It’s about reformatting,” Ali said.

Other publishers have made changes that keep top-performing content visible. The Strategist noticed that its daily deal posts, which perform especially well with regular visitors, were getting lost as the site published more content throughout the day (the Strategist’s homepage feed populates in reverse-chronological order). So New York Media’s development team built a widget for the daily deal post that follows desktop visitors as they browse the site.

To make things even more user-friendly, the widget now links directly to the retailer’s site, rather than the Strategist article describing that product. An upcoming redesign of Strategist’s homepage, due to launch late next month, will feature more of those kinds of widgets.

“We’ve built up a lot of trust with our users,” said Camilla Cho, gm of e-commerce at New York Media. “We’re now at a point where we’re comfortable showcasing the direct product links.”

Outside of optimizing the most successful content, other publishers are trying to find ways to deepen the brand loyalty built up among their readers. Back in the spring, The Wirecutter began publishing list-style articles designed to help readers discover broader varieties of products, said Blaine North, Wirecutter’s executive director of product and design. That included product lists, but this summer, it’s been experimenting with advice with no monetizable links at all, such as a recent post about how to visit San Francisco for a weekend on less than $100.

“The No. 1 thing for us is helping them make a decision,” North said.

Because commerce content monetizes differently from regular ad-supported content, commerce publishers quickly began treating the page designs differently. For example, The Strategist long ago removed a Taboola widget that sits at the bottom of most of the other New York verticals’ pages. Other sites, have gone so far as to strip all ads off their top-performing commerce pages to ensure that they load faster.

To test new formats and designs, many publishers are using paid social distribution to learn what works and what doesn’t. Though most commerce publishers focus on search for referral traffic, some are using Facebook as a place to test whether certain kinds of content resonates with their audience. The amount of money publishers have spent this year to date to distribute commerce content through Facebook is up 75% from the previous year, according to Keywee Chief Commercial Officer Jared Lansky.

But even with all this expansion, a certain amount of focus is necessary. “Where we’re seeing success is where publishers understand what their audience is,” Lansky said. “They’re not going to find success with stuff that’s not tied to their endemic audience.”

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