Month: October 2019

But this time, conversation with five different publishers reveal, publishers are going in with eyes wide open. Nobody is expecting a game changer or a silver bullet. This time, they’ll settle for the symbolic import of a platform paying them for their journalism and the hope that Facebook News can deliver an incremental benefit — provided Facebook sticks with it.

Among publishing executives, theories abound about why Facebook is trying something like Facebook News. Some think the new product is designed to take some of the regulatory heat off of Facebook, or to at least put pressure on Google. Others think its team of human curators is only there to train Facebook’s algorithms to pick a different kind of story.

Yet they also see a product that sends a message that platforms should be spending money to pay for high-quality, original reporting, and are heartened that Facebook is finally giving their core product a spotlight, free from the competition of baby pictures, screeds written by users’ relatives and grabby videos.

And while some say they are unsure about the product’s prospects after the conclusion of the 2020 election season, they see a positive in the fact that Facebook was willing to hand out multiyear deals, even as many feel unclear on Facebook’s motivation for carving out a designated space for news on its platform.

“This showed that they have more long-term commitment, though it’s not exactly clear what their motivation is,” one source said.

Facebook is going to be rolling the new product out slowly, in the United States to start. The tab will feature articles from some 200 publishers, including The Wall Street Journal, BuzzFeed News, Business Insider and The Washington Post, according to The Wall Street Journal. That long list is reportedly missing several prominent publications, including The New York Times, The Associated Press and Reuters, according to The Financial Times.

Facebook appears to be tempering expectations about how much impact the tab might have. While over the summer, Business Insider reported that Facebook CEO Mark Zuckerberg told at least one executive he thought the tab could attract up to 15% of Facebook’s users, that stat does not appear to have been one of the platform’s main selling points. Sources at multiple publishers said that Facebook had not given any guidance or expectations about how much content or audience the tab might drive, instead framing the tab as a product that would attract a more sought-after subset of its audience: those interested in news.

But early on, publishers will have to take Facebook at its word. At launch, there will be no way for publishers to detect whether referral traffic is coming from News Tab versus any other parts of Facebook, such as its News Feed, or from groups. A source inside Facebook said that the goal is to eventually allow publishers to distinguish between the two channels.

The team responsible for curating the news content is still coming together too. Facebook was posting job listings for news curators who would work on the tab as recently as last week, and multiple sources said they had an unclear picture of how they would interact with Facebook’s team or pitch content to its editors on a day-to-day basis.

For some, there is also a technical challenge: the arrangement has also required some technical work. Multiple sources said Facebook required participating publishers to build a separate API that the platform can ingest directly; one source described that effort as substantial, though others described it as more minor.

For all the skepticism, multiple sources said they saw the tab as a step in the right direction. “I do think Facebook is investing in original journalism. They want original reporting. That seems to be the thing they’re paying for,” another source said.

The simple fact that Facebook is paying was enough to pique some publishers’ attention. A source at one publisher that is not participating in the tab said that business development colleagues were eager to get involved after reports emerged that Facebook was paying some participants directly.

“I think it’s going to evolve and it’s going to open up,” one participant said. “I don’t think there’s any first-mover advantage.”

Yet despite the promise of easy(ish) money, some publishers continue to regard the product with some skepticism. “I think what Facebook looks like in three years is pretty hard to figure out,” the second source said.

The post Hope springs eternal for publishers trying yet again with Facebook News appeared first on Digiday.

Slate gates some of its content for paid members, though David Stern, vp of product and business development, said his team has pulled away from doing completely paywalled series. Its top-performing podcast, “Slow Burn,” mixes eight free, ad-supported episodes with eight bonus episodes, which are promoted in the free version.

But the company remembered the challenges it faced in building a paywalled podcast, so it decided to build a tech product, Supporting Cast, which enables publishers to put podcasts behind a paywall. Eighteen months after they had the idea, Supporting Cast’s list of clients is now in the dozens. Stern expects that Supporting Cast will be a profitable line of business for the company, which is why he hired a sales rep and a development team to successfully build out the product. He also anticipates the product’s revenue growing linearly, like Slate Plus’ did. In its first year, Slate Plus brought in only about 10% of the revenue it did this year.

“Our revenue is going to grow in tandem with our clients,” he said.

The Athletic has instead taken a hybrid approach. It originally launched its first 20 podcasts as subscriber-only, but it now has 120 total podcasts, with most running at least some episodes for free. The Athletic co-founder Adam Hansmann said on a recent episode of the Digiday Podcast that podcast ads fetch $25 CPMs, making a freemium model more attractive than typical display ads.

Just two months after introducing advertising, this stream has grown enough in that time to compete with subscription revenue, with sales responsibilities falling on a very small team, according to Nick Adler, gm of audio at The Athletic.

The Athletic is also tracking how many people sign up for its membership product via unique URLs read on the shows and on paywalled podcasts’ websites, though Adler wouldn’t share how many conversions the company is making based on podcast listens alone.

Figuring out what should be ad-supported and what can support a subscription is a process, Stitcher CEO Erik Diehn said. Further, the formats that typically see subscriptions as a better strategy for monetization are scripted fiction, which may not drive as much advertiser appeal — or niche podcasts that have 10,000 to 50,000 listeners — since there are fewer options for those topics.

Vox Media, which doesn’t have subscriber bonuses or paywalled content for any of its 200 shows, does offer an ad-free listening experience for its Today Explained and Reset podcasts through a partnership with Stitcher Premium, according to a person familiar with Vox’s Podcast Network.

However, Diehn said that the majority of traditional publishers looking at different podcast monetization strategies are still pretty low, and while he has seen interest grow over the past year, many are still figuring out their overall podcast strategies and haven’t advanced to consumer-revenue models yet. Those who have subscription models or are comfortable working in mixed revenue streams, though, tend to be more open to the idea of turning to a platform like Stitcher to provide those paid services. 

Some publications have also turned to platforms to see if a completely subscription-focused strategy will work. Podcast streaming platform Luminary has taken a complete opposite approach to monetizing podcasts, operating on a Netflix-like model offering exclusive podcasts for a flat rate of $7.99 per month. Publishers ranging from The Ringer to Pineapple Street Media to New York magazine have provided shows for Luminary since launch, and podcast publishers have been waiting to see if the venture-backed app is able to deliver on this consumer revenue stream to the same degree that ad-free streaming has for television.

The pressure to find new monetization avenues for podcasting is not as strong as it is for typical digital content. For now, the podcast ad market is buoyant. IAB’s 2019 Podcast Revenue Report from June found that $479 million was spent on podcast ads in the U.S. in 2018, which was a 53% increase from $314 million in 2017. And the report estimates that this number will increase to $1 billion in 2021.

While Stern and Diehn said they see advertising being the dominant revenue-driver for podcasts by a significant degree at each of their companies, Adler said that The Athletic sees a healthy mix between the two businesses that doesn’t have one dominating more than the other.

“There are only so many models under the sun. We have tried out so many variations of subscriptions,” said Diehn. And while advertising remains the dominant revenue source for podcasts at the moment, he said there is more consumer revenue to be made in live shows and merchandise. But the largest other bucket of revenue he sees is in podcast adaptations into TV and film. 

The post Subscriber-only podcasts are on the rise appeared first on Digiday.

Given the impending competition, Shudder picked a good time to premiere its first long-form original scripted show “Creepshow.” According to Deloitte, 57% of U.S. streaming viewers said they subscribe to services for their original programming, and Shudder’s “Creepshow” appears to lend credence to that claim. Fifty-four percent of the service’s subscribers have watched at least one episode of the series since it premiered in late September. The show not only piqued the interest of Shudder’s existing subscribers, but also appears to have helped to attract new ones. Shudder gm Craig Engler said that October has been “an amazing month in terms of subscriber acquisition,” though he declined to provide specific numbers.

Other niche streaming services, like BritBox and Crunchyroll, have similarly been loading up on original programming over the past year or so. At the same time, genre-centric streamers, such as DAZN, are stepping up the promotion of their original and licensed programming beyond their paywalls, all in an effort to give people enough reasons to start paying for their services and to continue doing so.

“It’s a balance between original content bringing in new users and library content to keep them,” said Josh Boaz, managing director and cofounder of digital performance marketing firm Direct Agents, which works with niche streaming services including BritBox and Sony Pictures Television’s Funimation.

Niche services are generally considered to be somewhat apart from the streaming wars. Netflix execs cite Disney+, not DAZN, when discussing the impending competition, and horror fans are more likely to cancel their subscriptions to Hulu instead of Shudder so they can pay for HBO Max. However, whether or not the niche players consider the general-interest streaming services to be competition is beside the point. If Netflix considers Fortnite to be among its competition for audiences’ attention, then so is BritBox given its hold on older audiences. And while the number of subscription-based services on the market may be growing, people’s budgets may not be. On average, people are willing to pay to subscribe to six streaming services, according to a survey conducted in August 2018 by Magid Advisors.

The number of services that people are willing to pay in any given month for is what will put the squeeze on this market. Services like Shudder and BritBox may have a hold on horror fanatics and anglophiles, and they may never win over the people who hide under the covers or hate dry humor. But there’s a whole market of casual fans.

Consider someone who may have recently binged “The Walking Dead” and “The Crown” on Netflix and enjoyed them enough to pay $5 a month for Shudder and $7 a month for BritBox, in addition to the $13 they’re paying for Netflix. Problem is, this person has kids, and in a few weeks they’re going to need to pay $7 a month for Disney+. They could refrain from a couple lattes, but maybe they don’t want to; people are funny like that. Instead they’ll have to decide if they enjoy a genre so much that they’ll pay for a single service simply for that programming and give up Netflix until their kids tire of rewatching “Moana.” Or maybe Netflix suffices because it has the “Scream” series and “The Crown” returns next month. Or maybe they can wait a month or two to give their kids Disney+ for Christmas (if the kids are good and they’re done with “The Crown” by then).

At the same time that  niche services are pressed to protect their businesses amid the streaming wars, they are also being presented with an opportunity to profit from the fight. In the shareholder letter that Netflix published in connection to its third quarter 2019 earnings, the company asserted that the influx of streaming services will accelerate the shift of audiences from traditional TV to streaming. That’s likely to primarily benefit the broader  services whose movie and TV libraries most closely mirror the wide swath of programming people are accustomed to paying for on linear TV. Still, those services’ libraries are unlikely to fulfill viewers’ appetites for specific types of shows or movies.

Obvious as it may seem, content is the biggest competitive edge that these niche services have in contending with the major players. Their programming libraries lack the breadth of a service like Netflix, Amazon Prime Video or Hulu, but those general services lack the depth of the niche streamers. “I haven’t seen Netflix go that deep into any category. They do not buy enough content to satisfy the superfan,” said Boaz.

But the niche services’ content can only be a competitive advantage if people are aware of it. To that end, BritBox plans to take some of the companion programming it has produced around the shows it licenses for its streaming service — behind-the-scenes clips, cast interviews, etc. — and distribute those videos on its YouTube channel “in the coming months,” said BritBox president Soumya Sriraman.

One niche streaming service is even considering going so far as seeking deals to distribute select titles from its service on other, more general-interest streaming services, according to an exec at this service who asked to remain anonymous. The hope is that people on those other services will check out a show, like it, look for similar programming on that service, not find a sufficient amount and eventually sign up for the niche service.

Shudder and BroadwayHD have similarly adopted external distribution strategies for promotional purposes. In February, Shudder premiered its first original feature-length documentary, “Horror Noire,” at Hollywood’s Egyptian Theater to a sold-out crowd of 700 people a week before the film became available on its streaming service. BroadwayHD has been doing limited releases of some shows its service carries in theaters for roughly three years, said Bonnie Comley, one of the service’s founders.

But this year it has expanded that strategy internationally. It has a deal with Japanese entertainment company Shochiku, in which every three months BroadwayHD will distribute one of its filmed productions in theaters in Japan. And BroadwayHD plans to debut its filmed version of “42nd Street” in theaters in the U.K. before it becomes available on the U.K. version of its streaming service, a strategy that it had implemented for the U.S. release earlier this year.

There is a potential risk, however, to these niche services promoting particular programs and attracting subscribers in return. It provides a playbook for Netflix et al. These general interest SVOD services are going after as large a share of the general audience as they can and have shown that strategy involves stocking up on programming in particular genres that appeal to specific audience segments, like the slate of romantic comedies that Netflix has released over the past year and a half.

The broader streaming services are unlikely to try to replicate the niche streamers’ entire libraries, but they will compete to acquire the titles most likely to lure their subscribers. “It translates to potentially higher costs for licensing content. That’s one reason why we’re doing originals,” said the exec at the niche streaming service.

The post How niche streaming services thrive in the land of giants appeared first on Digiday.

How Adidas’ marketers decided digital investments had gone too far was the crux of a talk media director Simon Peel gave at an IPA conference last week. In a nutshell, the advertiser discovered four years ago it had focused on return on investment and return on ad spend — metrics widely regarded as proxies for efficiency — at the expense of reach, penetration and broad brand building activity proxies for effectiveness. Peel and his colleagues thought only performance drove online sales for the brand, when in fact, brand activity also played a part. It left the business reliant on last-click attribution and four attribution models — Google Last Click Google Custom, Adobe and Facebook. Now, Adidas’ marketers compare performance and cross-channel lift.

Adidas’ case study is a microcosm of what appears to be a quiet discussion around the true efficacy of digital advertising, particularly in a world where fraud is rampant, privacy regulations make it harder to target individuals, there’s trickier tracking in the absence of cookies, and agencies have hidden agendas. It’s no wonder some advertisers are re-evaluating where they buy ads online.

But those concerns are nothing new. In 2016, Procter & Gamble said it had gone too far in targeting online users, for example. What’s different this time around, however, is the likes of Adidas appear to be reaching diminishing returns with digital advertising in terms of media allocation and impact. The fact that there’s been sustained growth over the last several years means there was always going to be an inevitable point where the intersection of digital market maturity and client budget size prevents continued share of growth.

Spending online is on course for its first decline in 10 years. In the U.S., investment in the first half of 2019 grew 17% year over year to $58 billion, down on the latter half of 2018, per the IAB, The last time that happened was in 2009, the year of the industry’s first decline in online ad spend, which was attributed to the recession. It’s a similar situation in the U.K. where advertisers made cuts to budgets for the first time in seven years, according to the quarterly Bellwether Report from the IPA. Search, for example, reported growth of 6.1% in the most recent quarter, although this was down from 9.9%. — Seb Joseph

A license to sell
Revenue diversification was the key topic at Digiday’s Publishing Summit Europe, which was held in Budapest, Hungary, this week. It’s not just about publishing companies growing their subscriptions, events and commerce arms, either: Publishers are becoming the new vendors.

Washington Post is licensing ad targeting and content software to other publishers. Vox also has a CMS licensing play. Elsewhere, The Financial Times announced a move into consulting, offering its subscription expertise to other companies looking to build direct-to-consumer businesses, including those outside the publishing sector.

Revenue diversification comes with its challenges. In a Town Hall session on Monday — conducted under the Chatham House Rule, which allows reporters to share what attendees said without identifying them or their companies by name — one publisher said its move from being an advertiser business to a subscription business received some pushback from the advertiser side. The gripe eventually boiled down to: Well, it’s great you’ve managed to sustain your business, but how does this help me?

Some hand-holding with in-house ad-sales teams will clearly be required when publishers expand their horizons beyond advertising. Revenue diversification can cannibalize some traditional ad sales in the short term, publishers said.

As another publisher said during the same Town Hall session, the process of broadening revenue streams requires constant ad-sales team education. Page views or monthly uniques might not be the right metrics when trying to sell advertisers on the quality or loyalty of your audience.

As Kjersti Thorneus, director of product management at Norwegian publisher Schibsted, said: “To me, having users pay for your product is the ultimate proof that you have created value; that you have solved a problem in their everyday life so much that they are willing to pay for it.”

Ultimately, while teething problems are inevitable, a user-driven business should be good news for the advertising business too. — Lara O’Reilly

Agencies to employees: We’ll do anything
Talent issues are turning into quite the sore spot for agencies. Unemployment is low and especially if you’re a smaller, non-coastal-city shop, it can be hard to find good people. Ad agency execs are finding it particularly hard to find people to fill certain roles, especially in data analyst positions, and people who understand what one exec described to me as “advanced social” — just understanding paid social marketing.

There’s a lot that’s being done for these talent issues. But what’s also interesting is the lengths agencies are now going to make sure people stick around. At one agency, a vegan account planner was given carte blanche to turn down any accounts for clients that sold meat, as well as any non-vegan beauty product accounts. At another, someone who hated the hot summers in Texas was given the option to spend a short sabbatical in Colorado. But perhaps the most egregious one was this: A lot of agencies want to make sure they’re hiring the right people, so basic tests to ascertain knowledge about marketing and social are pretty normal. But as the job market gets tighter, more candidates are saying “no” to interviews lasting more than one round, and certainly saying “no” to coming in and spending a couple of hours on a test. In response: At least three execs told me they’re paying people for interviewing time, including one who hands out $100 gift cards, and another who just pays cash. — Shareen Pathak

The post The Rundown: Advertisers mull how much digital advertising is too much appeared first on Digiday.

While linear TV works for reaching mass audiences for Direct Line, a notable number of viewers could be missed. But it’s not about going where those viewers for Direct Line — a large portion of those people are still watching TV in the living room and when they’re not there, they’re watching TV on another device, said Taylor. Rather, it’s about personalizing what the company shows them. A pet product, for example, may be too niche to promote on linear TV but could make sense around addressable content, said Taylor.

With a greater spread of inventory across multiple addressable products like ITV Hub, All 4 and Sky Adsmart, addressable TV has started to play a bigger role in Direct Line’s media strategy that’s increasingly funded by the money it has spent on digital.

“Addressable TV is starting to eat into our digital spend,” said Taylor.

He was unable to say how much money has moved from one channel to the other because the advertiser takes a zero-based budgeting approach for short-term investment. Therefore, if addressable TV helps the company deliver against our short-term performance targets like profitable sales,  then it will get investment. Those investments may be at the expense of less effective media lines such as digital or other areas or may indeed receive incremental investment, said Taylor.

Any investment on addressable TV is dependent on Direct Line believes the cost per thousand impression outweighs the cost of wasted ads that aren’t viewed by the intended viewer.

A typical ad on linear TV will range between £10 ($12.87) and £15 ($19.30) depending on the time, channel and type of content, said a media buyer. In comparison, advertising on a broadcaster’s addressable inventory is expensive: On All 4 the cost per thousand impression is £26 (33.45), ITV Hub’s CPM is £35($45.03), Sky VoD’s CPM is £28 ($36.02) and Adsmart CPM ranges between £45 ($57.90) and £250 ($321.64).

Before addressable TV can take more money from digital, it needs to address its measurement issues. It’s hard to know whether an impression on broadcaster VOD has been viewed by a different set of eyeballs or the same ones on a different device, for example. Broadcasters such as ITV and Sky have made moves this year to give advertisers better metrics, but the industry is waiting on the arrival of Project Dovetail, which the Broadcasters’ Audience Research Board is developing to calculate TV’s reach across screens.

The post Direct Line Group is shifting digital ad spending to targeted TV ads appeared first on Digiday.