Month: September 2019

The clear implication was to take a swipe at Apple’s Safari browser anti-tracking update, Intelligent Tracking Prevention, which has had multiple iterations since its 2017 debut to stamp out workarounds.

In general, publishers have agreed that those figures are pretty much in line with the average revenue losses they had seen as a result of Apple’s initial anti-tracking changes. However, several major publishers have also stressed that the figures have been taken out of context and used as a weapon to further Google’s own cause.

“The application of the math is wrong,” said an executive at a major publisher who spoke on condition of anonymity. “If we have $1 billion in total ads, of which 20% is spent in cookie-less environments, then removing cookies everywhere should result in $1 billion being spent equally across all browsers. Not as Google indicates — only having $400,000,000 left,” said the same executive.

Other major publishers were in agreement, adding that although the estimated revenue loss from Apple Safari cookies had dropped to similar levels, that revenue hasn’t simply disappeared from publishers’ coffers.

“We didn’t like the fact Google positioned information they took from one place and used it for a different scenario — you can still monetize those audiences on Google Chrome for instance [rather than Apple Safari] — the money has been redistributed,” said another executive at a major publisher. “There was some internal uproar over that.”

Other publishers took to developer forums like GitHub to voice their frustration over the way the figures were used.

Google cited two other reports that were in sync with its own findings: “Consumer Privacy Choice in Online Advertising: Who Opts Out and at What Cost to Industry?” and “An Empirical Analysis of the Value of Information Sharing in the Market for Online Content.”

A Google representative referred back to the company’s blog posts and declined to comment further on the criticisms.

In some cases, Google’s announcement did more to rekindle fury over Apple’s treatment of publishers than ignite new frustrations with Google. “Apple are quite happy to cause serious damage to publishers and the advertising ecosystem regarding us as acceptable collateral damage,” said a publisher who requested anonymity.

Moreover, although several major publishers agree that the revenue-loss results have been misapplied, the fundamental warning Google has made about cookies is on point.

“The exact match of figures to the real-world might be shaky, but they [Google] are not wrong that the death of the cookie could represent real trouble for the publisher,” said an executive at a major publisher.

The anti-tracking policies of browsers Apple, Firefox and Brave, combined with the tighter data privacy regulations like the General Data Protection Regulation and California Consumer Privacy Act, have added a sense of urgency to the quest for effective ad targeting methods that don’t rely on third-party cookies. For publishers and media agencies, that has meant a push toward developing next-gen contextual targeting techniques which don’t rely on personal data so won’t risk falling foul of GDPR and won’t be penalized by browser changes.

There is much talk in publisher, and ad tech circles, about the development of standardized IDs that aren’t reliant on third-party cookies but can be used at scale. But a viable, independent product contender is yet to emerge.

For others, Google’s recent positioning around the removal of third-party cookies being detrimental to publishers has given cause for hope that the tech titan doesn’t plan to follow suit and introduce default cookie-blocking as Apple has. In May, Google quelled a major industry fear that it would blanket-block cookies by instead revealing plans to give consumers a choice over whether they want to block third-party cookies used for ad targeting or not. But many publishers remain edgy that more features may be added later on that could hurt publishers, as Google continues its conservative approach to data protection law compliance.

“The bigger concern is still how Chrome will implement cookie-blocking for users,” said an ad ops executive at a publisher. The hope is that by publishing the revenue-loss research Google intends to still allow cookie-tracking and therefore publishers’ audience-targeting campaigns won’t be severely hit, added the same exec. “But we’re all at Google’s mercy on this, so until they announce it, all we can do is speculate,” they added.

The post ‘The math is wrong’: Publishers grumble about Google’s ad targeting research appeared first on Digiday.

Excerpts lightly edited for clarity and flow.

Why are rebates important to the way you work with agencies?
There’s an overall perspective that should be applied to things we decide to turn a blind eye to and that comes with maturity. If an agency is locked in on a retainer and I know I’m getting great value and my stakeholders are happy then I can accept that business making money on our account. We’re both playing the game. It’s part of the overall landscape. If I sign off on those deals knowing that we’re a cash cow then I’m not doing my job properly. I don’t want to have a creative or media agency go out of business because I was too onerous. You need to decide as a business whether you’re prepared to bring that agency skill-set in-house which might make things 20% cheaper because you don’t have the VAT and there won’t be that cushion of margin you’re having to pay out, which might add up to another 20% of savings.

Is that relentless focus on cost where procurement usually falls down?
Yes. If you’re going only after the cost then you will drive organizations out of business. That’s not the responsibility of procurement. We were the ones that would be brought in after the big fat lunches between marketing teams and agencies to squeeze that last 5%, but that shouldn’t happen anymore. Senior procurement execs are at the top table now to get stakeholders to take a look at other agencies they could work with rather than just continuing with the same ones.

What’s the best way to structure a payment deal for agencies?
There are a few payment models but there seems to be a move toward cost-plus models. Here, the business will pay the agency the going rate for staff, work them as efficiently as they can before paying fixed costs on top of that fee, which can be negotiated. In those instances, most procurement execs will focus on the fixed fee because they won’t care what the day rate is for agency execs if they’re able to secure a whole range of services for a lump sum. Agencies must figure out whether they can afford to push against these sorts of deals where they won’t make as much money but could potentially be a door opener to larger accounts later on. On some of the tenders we’ve run recently we’ve had agencies decline to participate because those sorts of deals aren’t worth the effort.

Are agencies easier to negotiate with now?
Deals are a lot more complicated to land. Gone are the days when you could do a nice schmoozy agreement where you’d have your pre-prepared terms and conditions and you’d negotiate your socks off against the agency. Usually, the commercial director at the agency, particularly the small to medium-sized ones, would be wet behind the ears, and subsequently, deals were nice and easy to do. Now, the fight is more equal. The large holding companies have big legal teams. It’s why procurement execs have had to step up their game. If you’re in the lead by literally knowing a little bit more than the people you’re negotiating with then it can feel like you’re the one-eyed kind in the land of the blind.

Is it easier for procurement to work closer to marketing teams in some businesses versus others?
For CPG and other manufacturing businesses, it’s easier to get on the same page as the marketers. These are businesses that have invested in separate procurement departments over years and usually a chief procurement officer. A car manufacturer like Ford, for example, will be used to procurement getting in the way of other processes because there’s a framework in place that shows they add value. Service-focused businesses don’t tend to have as much experience and therefore the fight with other departments is much harder.

Can being in procurement feel like you’re ostracized from other departments?
My current role is straightforward and somewhat of a quick fix to an internal issue. I report back to my stakeholders regularly to outline what we’ve done. That’s about as much interaction as I get with wider stakeholders and that’s fine because the job necessitates that. There are other companies I’ve worked at where I’ve had to pull out all the stops. I’ve had to buy the biscuits to help win over people in the marketing team, sit through late teleconferences and pull in people from three different continents to run projects. People tend to see that effort in my experience. If you’re a procurement exec and you feel there’s another procurement exec who feels ostracized then they need to make more of an effort to break down those barriers with the marketing department because it can repay benefits.

The post ‘We’re both playing the game’: Confessions of a procurement director on agency rebates appeared first on Digiday.

“If you look at the history of the running industry and how every running brand that has become successful started, you really need to have more of a grassroots approach in the beginning. Paid marketing is just an opportunity to layer on top of the foundation. There is no way a brand like ours could exist long-term if you skip that first step,” said Taylor, referring to building a community of runners and brand loyalists to spread the word about the products.

Only in the last two years has Tracksmith turned to paid marketing, mostly through social media on Instagram (where it has nearly 55,000 followers) and paid search, to accelerate growth. Still, the brand avoids working with mega-influencers. Where Tracksmith does do some sponsorship is at the Olympic-qualifier level. In January, it offered product, coffee and support to amateur runners aiming to qualify for next year’s Olympic Trials Marathon in Atlanta.

“Working with micro-influencers, people that are looked up to within a community, is the way to go if you want your brand to sell more. If you want to build brand awareness, of course, go with the big ones. But if you want to start a trend, going smaller is the way to go,” said Alessandro Bogliari, co-founder and CEO of MediaCom USA.

A big jump came after opening the first and only retail location in Boston in April 2017, called The Trackhouse. The brand declined to share revenue, but said the business has doubled each year for the last two years, tied closely to the opening of that store. T0 date, Tracksmith has raised $6.7 million in funding.

As part of the Tracksmith’s retail strategy, it utilizes the space beyond just selling its latest singlets and split shorts. Taylor said the store is running some sort of programming every day of the week, promoted on its website, through Facebook and on running app Strava. Sometimes that’s a summer Friday four-mile run followed by beers at The Trackhouse, other times, it’s events around new products available only in the store, not online.

Three days a week, Tracksmith hosts free runs for the community, while other running groups use the store as a meeting point for runs. The store is also home to an in-house physical therapist in a move to help the company become a hub in Boston for the running community. “We think about it as much as a retail store as a service to the community.” said Taylor.

The brand doesn’t have plans to open additional, permanent retail spaces, but pop-ups are a big way the DTC brand drives awareness outside of Boston. This year, Tracksmith made its first appearance overseas, hosting a pop-up around the London Marathon filled with limited-edition London apparel. The company also hosts pop-ups at the Chicago Marathon and New York City Marathon each year.

This post originally appeared on Digiday sister site Glossy

The post How running brand Tracksmith has taken an anti-Nike approach to building a brand appeared first on Digiday.

TikTok sends out the newsletter each Thursday, and it includes a list of up to roughly 10 trending hashtags, which have been a source of the app’s booming popularity. For each hashtag, TikTok links to a live post on its platform that is meant to serve as an example for the kinds of videos that publishers or individual creators could produce to tie into the trend. It also provides the date for when it plans to start showcasing the trending hashtag on the Discover tab, which is TikTok’s version of Instagram’s Explore tab and features a curated collection of TikTok posts organized by trending hashtag.

It’s unclear when TikTok began sending out this newsletter or how many media companies are on the distribution list. Multiple publishers that are active on TikTok have not received the newsletter, while multiple other publishers that receive the newsletter are not active on TikTok. A TikTok spokesperson declined to comment.

TikTok’s newsletter appears to be a savvy move for a platform that has quickly emerged as a competitor to the likes of Instagram, Snapchat and YouTube but has reportedly struggled to retain its audience. After Chinese tech company Bytedance acquired lip-synching app Musical.ly in November 2017, it rebranded the app as TikTok in August 2018 and went on a spending spree to grow its audience. Last year, Bytedance spent $1 billion to promote TikTok, according to The Wall Street Journal. As of February 2019, 26.5 million people use the platform each month, and those people, on average, spend 46 minutes per day using TikTok, according to a pitch deck that TikTok shared with advertisers that month.

However, for as much as TikTok has grown, its growth hasn’t been easy. A “significant majority” of new users stop using TikTok within 30 days, according to The Verge. That appears to be where the newsletter — and TikTok’s creator charm offensive (plus that billion dollars in ad money) — comes in.

Publisher charm offensive
The idea for the newsletter is to give media companies a leg up on trends before they pop on the platform, according to the sources that receive the newsletter. The inside look is considered welcome by media companies because TikTok, like Snapchat before it, remains an enigmatic platform with its own patterns to which publishers are still familiarizing themselves. While a trend can emerge on YouTube and remain in the zeitgeist for months, on TikTok the shelf life is considered to be much shorter, only lasting for days before TikTok’s audience moves onto a new craze. “The long tail is so much shorter on TikTok,” said one media exec who receives the newsletter.

TikTok is considered unique among platforms in sending media companies a newsletter to apprise them of topics that the platform plans to highlight, according to a combination of media execs that do and do not receive TikTok’s newsletter. They take the newsletter as a sign of TikTok’s willingness to work with media companies and keep them in the loop, a gesture of collaboration that another media exec who receives the newsletter described as “refreshing.”

The newsletter is one element of TikTok’s broader media company charm offensive. The app has been particularly supportive of creators, inviting them to private events with TikTok’s team and operating a Slack group for creators. The app also offers verified accounts for creators and publishers, which may seem like a minor thing but appears to be wildly important for public figures on social platforms.

Additionally, TikTok gives creators and publishers early access to new features, such as livestreaming. The app has been testing the feature with certain creators, and for the first Democratic presidential debate in June, TikTok arranged for NBC News to become the first news organization to stream a live video on the platform, an NBC News spokesperson said at the time.

If TikTok succeeds in encouraging publishers and influential creators to use the platform, their adoption of TikTok — and inevitable promotion of that adoption on their other platforms like Instagram, which has become a popular syndication service for TikTok videos — would effectively serve as free advertising. Any additional users or increased usage that TikTok receives would then help to attract the ad dollars it’s been eyeing since it began testing ads on the platform in January 2019.

Some media companies, including NBC News and ESPN, are active on the platform. First Media has capitalized on TikTok’s trending hashtags to help grow the audience for its food publication So Yummy to 1 million followers after joining the platform three months ago.

A couple of months ago, First Media saw a trending hashtag related to DJ Marshmello and cut a version of an existing So Yummy video that starring marshmallows disguised as superheroes. That video was featured on the TikTok’s discover tab, according to Yuval Rechter, chief product officer at First Media. In a sign of TikTok’s mutable platform, that video has received 168,900 likes, making it tied for the 23rd most liked of the 76 videos that So Yummy has posted to TikTok as of this writing.

Publishers’ wait-and-see approach
However, other publishers have been taking a wait-and-see approach to TikTok. Multiple publishers that receive TikTok’s newsletter are not active on the platform because they have yet to figure out their strategies for it. Not that there’s too much urgency to do so; like Instagram’s IGTV, TikTok has yet to roll out a monetization program that would incentivize media companies and established creators to prioritize the platform. But publishers’ wait-and-see approach is also a symptom of the wariness publishers have in embracing a platform that is still early in establishing itself.

Even though the newsletter is meant to help publishers and creators prepare to capitalize on TikTok’s trending hashtags, it’s unclear to media companies how advantageous it is to have the heads-up. Multiple sources at media companies that receive the newsletter and have used it to inform the videos they produce for TikTok said that they haven’t been able to gauge how much of an impact it has had on their videos’ views or engagement rates.

Publishers that have not received the newsletter are similarly still trying to nail down what content does and doesn’t work on TikTok. “I don’t think any one brand or digital publisher has found a formula that works consistently. Part of that is the ephemeral nature of the platform. Part of that is also rapid growth and evolution,” said a source at one publisher who has not received the newsletter.

The post TikTok courts publishers with weekly newsletter previewing trending hashtags appeared first on Digiday.

“We reduced it to zero,” said Tony Yu, co-founder of Vessi, of the ad spending. “It’s kind of a scary thing to do, but at the same time it’s not. We have a massive waitlist of people wanting our shoes right now, and we’re working to [meet] that customer demand before we work to acquire new customers.” 

The company, which launched in January 2018, says it shut off advertising after it went through six months worth of stock in one month. Vessi was initially producing 5,000 pairs a month. Now, it is working to scale to be able to produce 50,000 a month.

Figuring out how to scale production and balancing ad spend is a common issue for DTC brands as they grow, according to Nik Sharma, a DTC investor. As DTC brands focus on ramping up customer acquisition via advertising on channels like Instagram and Facebook — the standard channels for new DTC brands — there can be a lack of communication between marketing and operations, which can lead to this issue. 

“A lot of brands tend to focus on the demand side and neglect the supply side,” said Sharma. “It’s a good problem to have for a second because you know there is a lot of demand for your company and your product. But customers have an interrupted experience and now they have to wait, so there’s a risk that customer will go buy elsewhere.” 

Vessi was spending in the six figures on advertising — the company declined to share its exact spend — with the majority of its spend focused on Instagram. While the percentage changes depending on the performance of the creative and where it works best, roughly 50% of its dollars were going toward Instagram. 

“It’s our primary awareness driver to get people to know we exist,” said Yu. “We’re using visual cues to identify with our customers what the experience would be like if they wore our shoes. Instagram is definitely the biggest spot [for that].” 

The rest of the spending was split between digital channels like Facebook and Google, offline pop-ups, which account for less than 10% of the budget, and experiments with newer platforms for the brand like Snapchat and Pinterest. Once back, the company plans to spend more on Snapchat and Pinterest, which allowed it to target demographics by age — younger on Snapchat; older on Pinterest — with more creative meant for that demographic. 

“Our younger demographic requires a different type of like creative experience for them to engage with the company,” said Yu, adding that that’s what Snapchat provides though it can be hard to scale. “As that platform starts to mature, we’ll definitely try and spend more on Snapchat.”

Once it figures out distribution and starts spending again, the company plans to add podcasts and YouTube to the mix. Those channels offer more storytelling potential than Facebook and Instagram, where the marketing for DTC companies can be more “value prop” and “transactional,” according to Sharma.

For DTC brands like Vessi, it can be important to show investors that they can market outside of Instagram and Facebook, said Sharma. “A lot of brands are getting pressure from investors to show they can expand outside of Facebook and Instagram,” he said. “It’s good internally to know you can put your eggs in other baskets.” 

In the meantime, Vessi’s social channels will give consumers a taste of what it’s like to work at a startup and how they are working to scale production. “We want to be more transparent and give people a peek inside,” said Yu. “It might be a tour of a factory or a walk around the office, how we’re making the shoes, all the things people might have questions about.” 

The post Why DTC sneaker brand Vessi isn’t spending on marketing right now appeared first on Digiday.