Month: August 2019

Last year, some BI editorial teams — politics, news and military/defense — moved over to the Insider team in efforts to further distinguish between the two. The two core brands will remain, but internally these verticals will be more clearly defined to avoid any confusion. Business Insider will continue to cover executive news and lifestyle. While general news, politics, and lifestyle — including travel and food — will fall under the Insider umbrella. Although there will still be a cross-pollination of content between the two brands.

This has led to several staff changes. Jim Edwards, former editor-in-chief for Business Insider UK and International, has moved to global editor-in-chief of news for Insider. Julie Zeveloff West, U.S. editor-in-chief of Insider, will head up the lifestyle division. Alyson Shontell is the editor-in-chief at Business Insider. The publisher has invested in editorial staff, growing the newsroom 10% since 2018, when Insider started its push to become more of a general interest, rather than business news, brand.

According to an email sent out to staff Aug. 15. from Nicholas Carlson, global editor-in-chief, Insider, there will be no change to the video teams.

Blodget didn’t point to any previous negative impact that prompted a reorganization but said there had been some confusion on brands and sub-brands. The amount of content published will increase as it continues to invest in its editorial teams, he added, though he wouldn’t reveal specifics.

Business Insider, founded in 2007 to cover business, finance and tech news, expanded into more lifestyle coverage five years ago under the Insider umbrella. The vision has been that the brands would further integrate and this reorganization is a step in that direction.

The links to business news on BI have grown a little tenuous over time. Right now, the site features articles about the wildfire ripping through the Amazon and Kloe Kardashian defending the vacation photos of her baby. There’s plenty of politics and a sprinkling of picks from its Insider buying guides.

“It [the reorganization] helps in order to contextually place campaigns where clients like them,” Blodget said, adding that ad revenue is growing and accounts for the majority of Insider’s revenue.

Last year, Insider was profitable for the first time for the whole year and reached $100 million (£82 million) in revenue. Over time, the publisher has been diversifying into video production, events, licensing shows to platforms like Facebook, and commerce. The publisher has also had the benefit of being fully owned by Axel Springer, which bought the company in 2015 for $343 million (£282 million).

The restructure of editorial teams won’t bear any direct effect to its ongoing subscription business, Business Insider Prime. The paywall launched in 2017 and offers members access to additional reporting on BI. Subscribers have grown 180% between April and June this year, compared to the same period in 2018, said Blodget. They now number in the tens of thousands and are growing “rapidly,” but he wouldn’t share exact figures. Merging with eMarketer, also under the Axel Springer banner, next year will increase subscription revenue and help to balance it out with advertising-led revenues.

According to Blodget, there has been no negative impact on ad revenue from launching Prime.

“The ad business continues to grow; there’s a lot of opportunities for clients,” he said. “We also really believe in the subscriptions business and want to do the kind of journalism which is difficult to do with advertising alone.”

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“For us, having people coming in day in and day out, working the problems, understanding what we’re trying to build, which is a lovable brand, is the right way to build the brand,” said Wininger. “Working with an agency is a much more transactional business. It’s usually time-based. You cut corners because there’s a certain budget, and you have to make due with what you have. In many cases, you get average work because [agencies] make due with what [they] have, and I don’t think that’s right for us.” 

Lemonade already has a roughly 20-person in-house growth team, which has run direct response and programmatic marketing for the company over the last two years. Direct response and programmatic marketing has made up the bulk of Lemonade’s marketing so far, and the in-house creative team will now help produce that work. At the same time, the in-house creative team will be tasked with helping Lemonade branch out from digital marketing and start to do out-of-home, offline and more traditional marketing. 

“The purpose of that is to grow beyond our comfort zone, which is digital,” said Wininger. “We haven’t done a lot of brand identity and brand awareness campaigns so far.” 

According to a 2018 report from the ANA, in-housing is on the rise as 78% of the marketers surveyed said they had an in-house agency, up from the 58% in 2013. Per Digiday research, much of the movement to take marketing in-house has come from marketers looking to take back control of their marketing from agencies. 

Young companies, especially digitally native startups, are more likely to use in-house teams rather than agencies. Typically, the DTC brands are set to disrupt a category, and with that mindset, they would rather handle marketing internally rather than using the traditional marketing relationship of agencies.

While taking back control isn’t at issue for Lemonade — the company has not yet worked with agencies on its marketing — Wininger does believe that an in-house creative team will be better suited than agencies to produce large amounts of quality work in a very timely manner. That’s not to say the company won’t work with agencies. If the in-house creative team hits a plateau and fresh eyes are needed on a project, asking for outside help is something Wininger is open to. Some media buying will also likely be done by an external agency, per Wininger. 

Ferrera is currently learning the insurance business and focused on hiring for the team. In the meantime, he’s working with a couple of freelancers to craft new out-of-home campaign, TV spots, digital campaigns, stunts, a new brand book and a new messaging hierarchy. 

For Ferrera, the ability for creative to be impactful to other parts of Lemonade’s business beyond communications, such as product design or UX, was attractive. 

Another point of differentiation that may attract talent, per Wininger, is the level of data the company has on its consumers and the potential to use that for creative. The company has a proprietary in-house attribution tool called Mojito that allows it to get nuanced data on its consumers that can then inform the creative.

“A lot of that is kind of our secret sauce,” said Wininger. “We’ve been building tools and technology around the way we run ads ever since we started. It starts with really good attribution. If you don’t have good attribution systems, you’re pretty much running blind. This is one of the biggest challenges of the industry today. Even on digital platforms, it’s not simple to get good attribution. So attribution is one big thing where we think we’d create tools around in-house.”

With the help of the attribution tool, Lemonade is able to serve 10,000 different variations of an ad to 10,000 different people or different segments of people. “This is something we invested a lot of time in,” said Wininger. “When you have a predictive persona, you can then serve the right ad with that predicted persona and improved the chances of hitting the world view or their needs at the time and improving conversion dramatically.” 

Access to that data is something Wininger believes will be attractive to candidates for the in-house creative team.

“Lemonade is yet another foray into the ongoing AI-powered digital transformation and disruption of traditionally high-human-capital and expertise-driven industries,” said Ted Nelson CEO and strategy director at Mechanica. “Because Lemonade’s reason for being is using technology to strip the costs out of a traditionally human-capital-intensive industry, it’s no surprise that they’re trying to strip the costs out of their agency relationship as well, through bringing it in-house.”

“The problem is, the brand development challenge of getting human beings to trust a non-human powered insurance agency will be significant,” Nelson added. 

The post Why insurance startup Lemonade built an in-house creative agency appeared first on Digiday.

At a time of commoditization, it makes sense that purpose is being used as a differentiator. At a brand marketing summit recently hosted by Digiday, attendees all agreed that the key is for them to show that they’re making a net gain for society by being part of it. Without that, they’re doomed. But as always, the key is how far this will go beyond marketing claptrap. After all, there’s enough research being bandied about on how people will buy more from companies with a purpose. Enough, at least, to make a public proclamation necessary, especially when combined with anti-corporation election-year rhetoric. But when put that way, it’s hard to see grandiose statements as little more than marketing propaganda. — Shareen Pathak

The renaissance of OOH?
Brands like Spotify and Casper have made a splash in recent years with colorful and witty out-of-home campaigns. For newer direct-to-consumer brands, using OOH, especially on the subway, has become part of the playbook to quickly get consumers’ attention when they launch. But even with the increased attention on OOH from DTC brands, the resurgence may truly come into focus this year.

On Wednesday, the Out-of-Home Advertising Association of America reported its highest quarterly growth since 2007, with OOH advertising revenue up 7.7% year over year to $2.69 billion in the second quarter. While that growth is coming from a variety of OOH placements — like billboards, street furniture, transit placements and more — the highest increase, 31%, came from digital OOH. That digital growth could be thanks to the growing ease of buying digital OOH programmatically. As previously reported by Digiday, demand-side and supply-side platforms have recognized the potential of digital OOH. The potential of digital OOH to make it easier for brands to pop up with OOH placements everywhere much easier than it has been before — like Kylie Jenner did with the debut of her Kylie Skin brand — could see the category grow even more. That could account for why marketers, per an eMarketer report from earlier this year, are growing their spend in OOH more than their spend on traditional TV. — Kristina Monllos

The post The Rundown: When brand purpose looks like propaganda appeared first on Digiday.

It’s an especially difficult situation for companies in the direct-to-consumer space. While bigger brands and retailers can take stands to insulate themselves from these costs, smaller DTCs have neither the resources to find new manufacturers nor the clout to negotiate prices. Similarly, the overall cost of retooling a supply chain could prove more costly than simply dealing with the tariffs themselves. This led to DTC companies warning that prices may be increased — likely as a result of them being unable to make any manufacturing changes that could help offset the new taxes.

Direct-sourcing apparel company Everlane, for example, is based on a business model that it says is ethical and transparent, especially in sourcing. For all of its clothing, it clearly lists where the material is sourced and how much it costs. As the New York Times reported last June, the stiff import tax hikes could very likely lead to the company increasing some prices. One cashmere sweater, for example, would cost $11 more as a result of a 25% tariff.

“We will look at how we may potentially take some of the hit ourselves, which lowers our profitability and lowers the profitability of all the public retailers as well, and then we’ll look at how do we move as quickly as possible if prices go up,” Everlane CEO Michael Preysman told the Times.

Others in the industry are fearful too. Brands that cater to outdoor activities rely a great deal on goods from China, for example. Bike companies, for example, foresaw prices to go up as much as 25%, reported Outside.

In public testimony before the latest tariff went into effect, Rich Harper, the manager of the Outdoor Industry Association, lamented the looming duty hike. He pointed to existing contracts smaller companies had already signed. “They will be forced to either absorb the costs of the higher tariff or pass it along to the consumer,” he said. “Regardless, the effect will be to hamper the innovation the industry is known for and outdoor consumers demand. It will mean less money for the design, development and testing of new technologies and products.”

According to Rodney Manzo, CEO and founder of the supply chain management company Anvyl, the current China situation exacerbates pain-points DTC companies regularly face. Anvyl’s customers include Harry’s, Lola and Hims. For the last few months he has been helping clients come up with ways to potentially offset the new economic reality, including helping them find new manufacturers. While a recent survey from the American Chamber of Commerce in China said that 41% of American companies are at least thinking about moving manufacturing away from China, that move could prove more destructive than staying.

For companies looking to begin manufacturing products, what takes weeks in China may take up to a year elsewhere. Moving to an overhauled supply chain out of the country could significantly put a damper on business.

Manzo added that many Chinese manufacturers also offer secondary factories around the globe. Often, they have satellite locations in countries like Thailand, Vietnam and Malaysia. Some of his clients, for example, are now tweaking their production programs to rely less on the factories in China and more on ones elsewhere — while not necessarily switching manufacturers.

What this situation brings to light, he said, is that many DTC players need to rethink strategies beyond manufacturing to lower costs. Instead of raising prices on goods, some businesses are focusing on streamlining logistics and other costs as a way to offset the import tax. “What you can potentially do is capture the cost saving elsewhere in the supply chain,” said Manzo.

Overall, businesses that rely on Chinese manufacturing may have to retool their overall strategies. Companies like Everlane, for example, market their business as being sourced from around the world. While that’s a nice touch in press materials, it’s also a helpful way to cushion trade woes like this current China situation. This latest political move highlights a greater need for supply chain diversification, concluded Manzo.

Right now, many businesses are frightened but not necessarily able to move their supply chains into totally new locations. Most are adopting a wait-and-see strategy, while trying to figure out smaller ways to cut costs that won’t necessarily impact prices.

“There’s tons of fear,” said Manzo. “But there’s also tons of inactivity.”

The post ‘Tons of fear’: How DTC companies are dealing with Trump’s tariffs appeared first on Digiday.