Month: August 2019

The company has tapped celebrity investors like NBA veteran Steve Nash and Cleveland Browns’ quarterback Baker Mayfield as ambassadors. 

The company also uses influencers with smaller followings, anywhere from 15,000 to 300,000, to bolster the brand. “Sometimes those conversions [from the guys with a smaller following] are a lot more powerful than some of the bigger athletes,” said Neff. “Sometimes you just don’t see the return you would expect from [big celebrities]. Their audience is so big, but it doesn’t mean they convert at a big number. That’s why we do both. It’s like a brand awareness play versus an actual ROAS goal.” 

Legends Brand, initially a socks company, pushed into apparel in July 2018. Over the last year, it has spent roughly “seven figures” in marketing dollars and in the next year it plans to spend three times that, according to Neff, who declined to reveal the company’s exact ad spend. Neff did say that the company will spend anywhere from $5,000 a day to $15,000 a day on marketing, depending on the day. 

Aside from the roughly 50% of the marketing spend devoted to Instagram, Legends Brand allocates approximately 10%-15% of its dollars for Facebook, 20% for affiliate marketing, 15% for email marketing. 

Focusing on Instagram for discovery and brand recognition makes sense to DTC expert and investor Nik Sharma, who added that there’s more inventory on Instagram with Stories to help get the word out. From there, a brand like Legends can retarget consumers who’ve seen their Instagram ads on Facebook, where they may be more likely to actually convert, said Sharma. 

The company uses grassroots events to collect emails of those interested in the brand and then uses those emails to retarget potential consumers. Events can also generate content for digital channels; Legends Brands hosted a celebrity basketball game earlier this year with celebrities like 2 Chainz, Quavo, Floyd Mayweather and more, which was streamed on Twitch. 

Earlier this spring, the company debuted its first pop-up store in Manhattan Beach. Neff expects pop-up stores to be a bigger focus for the brand going forward as he believes it’s important for consumers to be able to touch and feel the product. Next year, Legends Brand also plans to roll out partnerships with gyms and trainers. 

Currently, the company handles all of its marketing in-house. That said, the company is currently running a test with a media agency and in conversation with a few others as it’s deciding whether to keep marketing in-house or work with agencies. (It declined to name the media agency it is testing.) “It’s always nice to keep it in-house so you can control the spend,” said Neff. “When it’s your money that you’re spending, you obviously care more about it than the agency does because it’s your own personal money.”

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It also spurred new financial arrangements — e-commerce founders often don’t really believe that agency and brand interests really are aligned, so they prefer to do things themselves. In response, agencies are becoming OK with with non-FTE-based payment arrangements that are more equity based, or discounted, or incentivized toward outcomes.

Dentsu seems to have caught on: “DTC advertisers are born from performance, building their brands online through smart targeting, engaging creative and seamless customer experiences, and MuteSix is the leading solutions provider for this hyper-growth category,” said Jeremy Cornfeldt, CEO, iProspect US in a statement.

After all, the shiny new thing is like catnip to agencies — I think most of us still remember the number of blockchain agencies that cropped up last Spring at Havas, GroupM and others. “Are you surprised?” said one DTC brand founder to me when the Dentsu announcement came out. “They finally caught on.” — Shareen Pathak

How clean is clean?
Amazon has begun testing a so-called “clean room” for marketers and the e-commerce giant to cross-reference their respective data sets in order to inform advertisers’ campaigns, according to an AdExchanger report published Aug. 27. Amazon by no means invented clean rooms, which are designed to be privacy-safe environments to commingle advertisers’ customer data and platforms’ aggregated audience data. Google and Facebook already offer clean rooms for advertisers, and marketers including Hershey’s and Unilever have been developing their own versions.

However, agency execs have some questions about Amazon’s clean room. “Amazon’s clean room is similar to Google’s where you have to put data in. But how comfortable is an advertiser in giving their data to a massive tech company?” said one agency executive who has had conversations with Amazon about its clean room. That wariness is not necessarily unique to Amazon. However, Amazon has a habit of using its platform to benefit its own business at the expense of others, such as by promoting its private label products on other brands’ product listings. So this agency exec’s concern is whether Amazon will use the data it gains access to within the clean room — or more likely the resulting insights into an advertisers’ business or customers — to compete with advertisers.

Another agency exec, who has not been briefed on Amazon’s clean room, wondered about the data coming into the clean room, specifically whether Amazon will provide log-level data within its clean room.  Amazon already withholds log-level data from advertisers using its demand-side platform to programmatic buy ads.

An Amazon spokesperson did not respond to a request for comment by press time.

That has frustrated agency execs because that data not only provides more transparency into the performance of advertisers’ campaigns but also enables more advanced analysis of campaigns to inform how programmatic buying strategies can be enhanced. According to AdExchanger’s report, Amazon is not making log-level data available within its clean room. Despite the questions about Amazon’s clean room, the two agency execs were generally positive about Amazon opening up a clean room given the company’s reputation for being a black box and are, if anything, impatient for the clean room to officially open up. “They’ve been talking about doing that for a while,” said the first agency exec. — Tim Peterson

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They have also made it significantly harder for managers to fire workers they see as ill-fitting or under-performing; they have made it more complicated for different teams to help one another, especially as tactics change; they have also failed to protect workers from layoffs or sales, as publishers ranging from Vice to Gizmodo to Mic, which ride media’s choppy waters, have all been forced to let people go.

Like nearly everything else in digital media — programmatic, video, subscriptions — unions are no panacea. What they have done, according to those at newly unionized shops, is change the frenetic nature of these businesses as they mature.

“Nobody who is a savvy professional in the digital news business thinks there aren’t going to be shifts in strategy,” said Dominic Holden, a politics reporter at BuzzFeed News and a member of its organizing committee. “We welcome that. But the company should feel pressure to have those bets work out in the first place.”

The trend of organizing in digital media began about four years ago but has picked up steam in the past two: Through the first half of 2019, publications including Wirecutter, BuzzFeed News, Quartz and The Ringer have all announced they’d formed unions, joining a large group that includes HuffPost, Vice Media, Refinery29 and Ziff Davis.

Industry tumult has played a major role. But unionization has gained momentum in media for other reasons, including higher than normal interest in issues including wage fairness and racial and gender equality. For example, Vox Media’s recently ratified contract set aside $50,000 for a diversity committee and laid out formal rules requiring that at least 40% of applicants to any job that gets past the phone stage come from “underrepresented backgrounds.”

“The message resonates well with the potential [employees],” said Marick Masters, a professor of management and the director of Labor@Wayne at Wayne State University. “They’re very inclined to be activists, and they’re very good at communicating with each other.”

That trend has also met with fierce resistance from management, which tends to see unions as a hindrance to moving quickly and another added layer of costs. What’s more, unions are often blamed for creating an adversarial, us-versus-them dynamic. BuzzFeed News, which waited more than five months for management to recognize their union, was stood up more than once by management at negotiations; employees at Thrillist last year felt compelled to stage a walkout, a first for a digital media company, according to the Writers Guild of America, East; late last year, Slate’s staffers voted to authorize a strike over management’s refusal to remove a right-to-work clause from their contract. Vox’s entire editorial team walked out on the final day of scheduled negotiations with management.

“It’s inevitable once the effort begins,” one management-side source said. “These big efforts to resist have just caused a bunch of turmoil and broken down relationships in an unnecessary way.”

While wages and compensation are central to any labor dispute, management-side sources say they’re not the sole reason for resisting. Multiple sources said that the difference in cost between a unionized newsroom and a non-unionized newsroom is often a low single-digit percentage. “You shouldn’t have a company if the costs of unionizing are going to put you out of business,” a second management-side source said.

Instead, management points to things they say make it difficult to operate nimbly. Many union contracts, for example, include disciplinary rules that make it difficult to quickly fire employees management sees as a poor fit, or under-performing. Aside from egregious offenses such as plagiarism, violence or harassment, managers are often required to give employees multiple warnings and opportunities to improve or correct their behavior.

“You can’t make the quick decision to swap someone out,” one source said. “Obviously you try to hire well, but with these rules, you’re not as efficient as you could be.”

In addition, many older contracts do not always address issues or kinds of work that did not exist when the contracts were drawn up.

For example, commerce content, a newer area of focus for some publishers, has caused some confusion at unionized publishers, because people were uncertain whether it constituted purely editorial content or not.

Similarly, many contracts have language that bar editorial employees from working on branded content, typically designed to insulate reporters from having to produce content at the behest of advertisers. But when audience development or social media employees are grouped in as part of editorial, that bars them from working on distributing that branded content, a vital role for most publishers.

“It definitely adds more complexity,” said one union member who works at a digital publisher. “I think we have a pretty good environment, just in terms of people respecting the bargaining agreement, but it’s a presence in the newsroom.”

Yet as more contracts are ratified across the space, many expect these issues will be ironed out. For the most part, the contracts each union ratifies are publicly available online, giving the industry’s bargaining units frames of reference that they say have helped improve working conditions across titles.

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Dream Team has roughly 10 people publishing regular football video content on its own site and social platforms. Dream Team had over 100 million video views in July, up from 50 million, according to Tubular Labs. Facebook and Instagram is a good funnel for acquiring news audiences, but the team needed to do more to nourish its existing fan base, said Edward Bearryman, head of content and communities at News UK.

“We are building a more franchise approach to content,” he said. “As many brands in the digital space find, bringing in audiences with content is easy, but digital content brands can struggle with loyalty and retention.”

After hearing that audiences wanted more fantasy football content — rather than generic football news content — at the start of the football season in August 2018, Dream Team also launched an email newsletter, Dream Team “Coach,” devised in part by Jimmy Lloyd, content development editor. The newsletter, written by football expert Nick Elliott, to add a more personal feel, goes out every Thursday and features tips and hints on which players are likely to play well that weekend for subscribers to switch around their fantasy football teams.

The newsletter now has over 1 million subscribers and an open rate of between 15% and 20%, according to Bearryman. The content is mostly self-contained content, so it doesn’t track click-through rates via links to external stories.

“That was the big shift and was a battle in many ways; people are used to using email a certain way,” said Bearryman. “We looked at Red Box [political newsletter from News UK’s subscription title, The Times of London] and what audiences want from email. Like other off-platform distribution, audiences don’t want to be thrown around.”

As an extension to the newsletter, in February, Dream Team launched “Coach TV” on YouTube, a weekly 20-minute chat show focused on football news. Videos typically get up to 20,000 YouTube views, one last season had over 500,000 views. Over the course of 12 months, viewer retention rate doubled retention rate from 20% to 40%, according to Bearryman. Watch time on season two is over six minutes compared with three minutes last season.

Publishers like BuzzFeed are increasingly making series over one-off episodes in order to bring people back more regularly. It’s this regular viewing that attracts brand budgets too. The success of “Coach TV” was instrumental in signing bookmaker Betway to a season-long branded content campaign. As well as Betway badging alongside the Dream Team logo, the bookmaker gives exclusive betting odds and offers for the “Coach TV” audience. It’s a natural fit as 50% of Dream Team managers have an active betting account. The season-long campaign, exclusive to Dream Team rather than The Sun, cost £1.04 million ($1.27 million). According to Bearryman, the conversion rate of traffic referred to Betway is 2.5%, which compares favorably with Dream Team’s internal content conversion rates.

Over the last year, Dream Team itself has run between 10 and 12 other branded content campaigns across other sub-brands or franchises. One such sub-brand is “Hometown Glory,” a weekly show where former England football player Alex Scott takes other football players back to their hometown. Dream Team is currently in talks with two consumer goods brands for sponsorship for the season.

More franchises are in the works, according to Bearryman.

“We want to build other online sub-brands and franchises to become famous for and reach new audiences,” he said.

Image: Dream Team via Facebook.

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