Month: September 2019

Jellysmack and the creators share the revenue from the ads that Facebook sells against creators’ videos, according to Jellysmack CEO Michael Philippe; Jellysmack does not currently have the ability to sell ads against its videos on Facebook. Philippe declined to say how specifically the revenue is split between Jellysmack and creators but said that some creators in the program are making “six figures per month on Facebook.” Additionally, the processing of creators’ videos will help Jellysmack’s optimization tools understand different types of content than the types of videos it posts to its own Facebook pages, and Philippe hopes the program will help it to establish relationships with creators who may eventually star in Jellysmack’s original shows.

For YouTube stars and their talent managers, Jellysmack’s program is appealing for obvious reasons. “It’s found money,” said Adam Wescott, partner at talent management firm Select Media Management. “But it’s still a bit unproven. When it comes to Facebook, the CPMs don’t match YouTube.”

While Facebook has cultivated a crop of homegrown creators, the social network has struggled to win over YouTube stars for two main reasons. YouTube-centric creators are unsure whether Facebook can consistently deliver a large, intentional audience a la YouTube, as opposed to passive views from people scrolling through their news feeds. And even if the audience is there on Facebook, the money may not be, at least not enough to justify the effort required to either produce original videos for Facebook or edit their YouTube videos for the social network. Conceivably, creators could cross-post identical versions of their YouTube videos to Facebook, which is nice in theory but unproven in practice. “While it seems easy, there’s not really that payoff when you talk about monetization,” said Christina Jones, vp of talent at talent management firm Digital Brand Architects.

YouTube-centric creators like Lizzy Capri face a dilemma when looking to expand to Facebook. Since 2017, Capri, who is not involved in Jellysmack’s program, has worked to develop and hone a content strategy that has amassed her 3.9 million subscribers on YouTube. She would like to replicate that success on Facebook but recognizes that that would require replicating the time and effort she had to put into her YouTube channel because Facebook is “a whole different beast to learn,” she said. For example, she would have to edit her YouTube videos, which are usually more than 10 minutes long, for Facebook, where three- to five-minute videos perform best, she said. Additionally, she would have to determine how the profile of her audience on Facebook might compare to her YouTube audience and take that into account when tailoring videos for the platform. Because she knows the effort required to establish a successful channel on Facebook, she also knows that she doesn’t have “the bandwidth to do that right now,” she said.

Caylus Cunninghman, a creator who goes by the name “Infinite,” could probably make the time to grow his channel on Facebook, he said. But he doesn’t have to. As one of the creators in Jellysmack’s program, Cunningham has been able to “just leave it in [Jellysmack’s] hands because, at the end of the day, they know how to run a Facebook page, and I don’t really. I know YouTube,” he said.

Cunnigham had tried to get to know Facebook. In early 2018, he began uploading some gaming-related videos to Facebook to try out the platform but only attracted roughly 20,000 followers. That pales in comparison to the more than 12 million subscribers he has on accrued on YouTube since he started taking YouTube seriously in 2016. Then around April of this year, Cunningham began working with Jellysmack to edit his YouTube videos for a new Facebook page that has amassed 2 million followers to date.

Cunningham can customize whatever edits that Jellysmack makes to his videos, including their titles and thumbnail images. But he usually just leaves whatever optimizations are made by Jellysmack’s tools. Typically Jellysmack removes the intro and outro from his YouTube videos and adjusts the aspect ratio of his videos — which are produced horizontally for YouTube — so they can be more easily viewed when people are holding their phone’s vertically, he said.

While Cunningham has established a large following on Facebook, YouTube continues to generate more views and revenue. He estimated that his YouTube videos typically receive two to three times as many views and ad dollars as his Facebook videos. However, considering that Jellysmack is handling the heavy lifting in adapting his YouTube videos for Facebook, whatever views and revenue he can reap from Facebook is pretty much all profit. While Jellysmack has effectively made Facebook a passive income stream for Cunningham, the platform is beginning to take a more active role in his content strategy. “Sometimes when I’m making my YouTube videos, I do think of Facebook now,” said Cunningham.

The post ‘It’s found money’: YouTube stars look for ways to expand to Facebook appeared first on Digiday.

Where can I find these custom bidding algorithms?
Some ad tech vendors like Beeswax won’t build custom algorithms for programmatic advertisers, but its product makes it easy for advertisers to assemble one themselves. For instance, it will offer advice on how to build a custom algorithm and make introductions to companies like Scibids that develop the algorithms. Scibids alongside MediaGamma and Strike Social are among a new wave of ad tech players going to market with variations on the same pitch: They can develop custom algorithms for advertisers and agencies that make programmatic trading less resource-intensive. It’s a timely pitch for the buy side as the financial burden of making programmatic profitable takes its toll on both advertisers and agencies.

“Marketers and agencies want and need the benefits of domain-specific AI capabilities,” said Matt Nash, managing director of Scibids in the U.K. “However, they also recognize that to build the capabilities themselves would involve a commitment to a multiyear project, dedicated resources and investment on an ongoing basis across multiple platforms with no guarantee of a successful outcome.”

All this sounds expensive.
Hiring a developer to build a custom bidding algorithm isn’t as expensive as it was when the data science and analytical expertise needed to do it were scarce. Furthermore, tools like bid modifiers, which allow ad tech vendors to tweak bids without having to duplicate line items on a campaign plan, now exist. With those skills and services more widely available in advertising now, the barrier to entry for businesses that create custom bidding algorithms easier, therefore they’re cheaper to buy. That’s led to more investment from both large and small advertisers.

Give an example.
Hotel chain Meliã turned to SciBids, for example, as a way to offset the time and money spent by its in-house team of traders manually tweaking programmatic campaigns every time the objectives changed. The custom bidding algorithm the advertiser paid for generated four times more return on ad spend, compared to campaigns with a standard algorithm, while it also led to a 15% lower bounce rate from its site, said the head of the hotel’s programmatic division, Queralt Costa.

What are the drawbacks?
The hype around what custom bidding algorithms could do far exceeds what is technically possible for most advertisers now.

Some ad tech vendors and consultants pitch the algorithms as tools that will eventually evolve to a point where they get so big that advertisers will be able to take them from one agency trading desk to another. It sounds great in theory but ignores the technical ad ops gymnastics needed to make it happen. Agency trading desks are built on different ad tech so an algorithm that works on one may not work on another. There’s also the commitment to nurturing a custom bidding algorithm to consider. Depending on how big it gets, a custom bidding algorithm would need to be trained to treat campaigns for separate parts of a business like customer acquisition and traffic generation differently. That requires a commitment that not all advertisers are willing to give now that the realities of taking parts of media buying in-house are clearer.

Do I need a media agency to buy my programmatic ads if the algorithm does it for me?
Setting up a programmatic campaign, from putting the right tags in place on the right sites to making sure the right data is used, is not for the fainthearted. It can quickly devolve into an operational quagmire if mishandled as the algorithm won’t make the right decisions in auctions if it doesn’t have the right information. Organizing campaigns to be managed by a custom bidding algorithm is just the start, however. In the case of Mindshare, its execs are still needed to look over what a custom bidding algorithm buys, said Alexis Faulkner, head of Mindshare’s digital division, Fast, in the U.K at a Scibids event in London last week.

“The algorithms are doing the heavy lifting in terms of the day-to-day optimization of programmatic campaigns, but it’s taking a lot of man-hours to evaluate the impact of what they buy,” said Faulkner. “We’re just moving to the analytical phase of custom bidding algorithms.”

It won’t all be plain sailing for media agencies if custom bidding algorithms become more widely adopted. There’s a strong likelihood that agencies won’t need as many programmatic traders as they currently employ if advertisers want an algorithm to place more bids, said Amir Malik, a digital marketing expert at Accenture Interactive at the same event. Instead, agencies will need to set their sights on data scientists who can manage the algorithms that buy the media, he said.

The post WTF is a custom bidding algorithm? appeared first on Digiday.