Month: October 2019

The allure of TikTok for advertisers isn’t just the potential to be among the first major advertising wave on the app, which has captured the attention of younger audiences, but the ability to run campaigns with sound as it is native to the way users watch content on the app, according to media buyers.

Buyers say the company is in a growth phase and that TikTok’s ad business now resembles early Snap Ads with low CPMs, a buggy self-serve platform (for those who have access to it), few metrics and unproven sustainability. Buyers have other complaints, like wait times of up to 24 hours for campaigns to appear on the platform and a junior ads team in need of help, too. For advertisers expecting the maturity of an ad platform like Google, TikTok will be a letdown. But for advertisers looking for a new platform to experiment on while it’s still growing, even with the current hiccups, buyers are bullish.

“They need to scale up a bit to meet the demand on the platform,” said one media buyer who has run multiple TikTok campaigns for clients. “We saw the same thing with Snap and Snap Ads a few years ago.” 

“They don’t have the ad tools built out or measurement tools to really help us figure this out and justify it to compare it to some of the more established digital platforms,” said Matthew Rednor, founder and CEO of Decoded Advertising. “That’s a big complaint and one of the biggest reasons that big advertisers and agencies are not yet on the platform, even though everyone is there.”

It’s standard for new platforms to have immature ads businesses early on and TikTok is no different, according to buyers who say that while ad reps are kind and easy to work with, they aren’t as seasoned as reps at Google or Facebook. At the same time, the company’s main headquarters are in China and some decisions are still run through that team making the time difference a pain. That can, in turn, lead to a slower campaign implementation with some campaigns taking at least 24-hours to be live on the app, according to the first buyer.

It’s unclear how large the current U.S. ad team is or how it is organized, as a spokesperson for TikTok declined to share that figure or share current user numbers; buyers weren’t certain of the size. In February, Digiday obtained a deck that said TikTok had more than 27 million users opening the app eight times a day. The company offers video ads, brand takeovers, brand lenses, “top view” video and its signature hashtag challenge. 

The difficulty advertisers and agencies face with TikTok currently makes sense to Shann Biglione, evp of Americas and global strategy at platformGSK, who said that clients’ expectations for platforms ads teams are often something like Google’s, which is “the gold standard” of ads teams. Dealing with that comparison, “it’d be surprising if TikTok didn’t struggle,” said Biglione. 

Biglione has worked with TikTok’s ad team in China but hasn’t yet worked with the team in the U.S. “When you have up and coming platforms, especially one that doesn’t have [its main] headquarters in the U.S. [it can be hard],” said Biglione. “Operationalizing in China versus the U.S. is a bit different. China is much more fast-paced. Decisions can happen very, very quickly in China versus the U.S.” 

Multiple buyers compared TikTok’s current ads offering to early Snap Ads as costs are low — CPMs are generally around $1.50, according to a buyer — but the tools and measurement capabilities aren’t built out yet, making it hard to prove the value of being on the platform. The company’s self-serve ad platform is still in beta as well as its interest-based targeting, according to a spokesperson, who said that “everything we’re doing is still in beta,” that the company is “in an experimental phase” and that it is “still figuring out what works for the brand and the community.”

The self-serve ad platform is bare-bones at the moment, with capabilities that allow buyers to get ads on the platform but there’s nothing flashy, no advanced capabilities and that it’s “a little bit buggy,” said the first buyer. “To be fair, they did let us know in advance that that was the case. It had been ported over from the Chinese version. We’ve also been helping them and flagging bugs we run into.” 

The lack of results to showcase could keep buyers away for the moment; currently, the company’s ads site doesn’t offer any case studies for prospective advertisers to check out. Metric Digital CEO Kevin Simonson said that the shop hasn’t yet worked with TikTok but likely will in the first quarter of next year. “[The] reason being is that the people I’ve seen who have tested it, paid ads not influencer, haven’t seen good results,” wrote Simonson in an email. “I have a feeling it’ll only work like Snap only works, cheap AOV in beauty for the youngins’.”  

Still, even with that comparison and the lack of clarity into what the platform delivers for brands, there’s lots of interest from advertisers and agencies and that will likely continue to grow, according to buyers. 

“We know a ton of people are there, we know it’s a hot platform, so we should be experimenting and dabbling there versus waiting for them to have mature measurement systems because we know people are there, and this is the time to get on,” said Rednor. “To reject it because they don’t have a full team of reps yet or any of the things that the mature platforms do is kind of crazy at this point. You’re going to be somewhat left behind.”

The post As TikTok’s popularity rises, buyers say the ad team needs to grow to keep up appeared first on Digiday.

In the short term, Dataxu’s programmatic buying tool is expected to make it easier for advertisers to buy ads on Roku’s connected TV platform. But in the long run, the combination of Dataxu’s programmatic buying tool and data platform will provide Roku with an opportunity to not only seize more control over the ads running on its platform, but also play a role in the ads running elsewhere, according to industry experts. Roku declined to make executives available for interviews.

Roku has already established itself as one of the biggest connected TV ad sellers. The company does not break out its ad revenue, but in the second quarter of 2019, its platform revenue, which includes revenue from advertising, increased by 86% year-over-year to $167.7 million. However, while Roku is a whale in the connected TV ad market, it is competing against tech giants whose advertising businesses extend far beyond the TV screen. As companies like Google and especially Amazon work to grow the connected TV sides of their ad businesses, Roku needs to fortify its position in the market, which may require extending its ad business into other markets as well.

At the most basic level, Roku’s acquisition of Dataxu should lower the barrier to entry for advertisers to buy Roku’s inventory thanks to Dataxu’s self-serve buying tool. That will likely help Roku to expand its advertiser base beyond the large advertisers — that already buy connected TV ads to mid-sized advertisers — for whom buying connected TV ads is too complicated, said Tal Chalozin, CTO and cofounder of video ad tech company Innovid.

Dataxu’s programmatic buying tool will require some work for Roku to lower the barrier to entry for advertisers to programmatically buy its inventory, though.

“It can be powerful, but it’s not as turnkey as an Adobe-slash-TubeMogul, which bills itself as being a very user-friendly platform,” said David Lee, programmatic lead at independent agency The Richards Group.

However, advertisers and agencies may be willing to overlook the ease-of-use issue if Roku allows ad buyers to use Dataxu to target ads using Roku’s first-party data, as many industry experts expect it will. In that case, Roku would be following in the steps of its main connected TV rival Amazon.

Amazon allows other DSPs, including Dataxu, to buy ads on its Fire TV platform; an Amazon spokesperson declined to comment on whether Dataxu will continue to have access to that inventory. However, if advertisers want to use Amazon’s customer data to target their ads, they can only use Amazon’s own DSP. This is a more likely path for Roku, which has kept its first-party data close to the vest.

“They’ve been under constant pressure from the marketplace to let their data out, but they don’t want to,” said an ad tech exec.

That’s not entirely true. In March, Roku announced a deal with Adobe so that advertisers could buy ads on Roku through Adobe’s DSP using Roku’s first-party data for targeting. Asked whether Adobe’s DSP will continue to be able to use Roku’s first-party data for programmatic buying, a Roku spokesperson said the company is committed to continuing to work with companies including Adobe.

Ad tech and agency execs speculated that Roku may be withholding some first-party data from Adobe and could make that data available through Dataxu. For example, Roku uses automated content recognition technology to track what people are watching on smart TVs powered by its operating system. That ACR technology, which was the centerpiece of Roku’s pitch to advertisers and agencies during CES this year, enables Roku to track not only what people are watching on Roku’s platform but through any device connected to the TV, including a cable set-top box. Considering that Roku had 30.5 million active accounts as of June, “one of the pieces that gets lost is that Roku has the largely scalable active user pane for ACR technology.”

Beyond the data and inventory that Roku could provide to Dataxu, there’s the data and inventory that Dataxu can provide to Roku. Dataxu’s device graph would provide a way for Roku not only to keep track of the ads being served to people on and off of its platform, but also to target ads based on those on-and off-platform ad exposures. “It’s Experian-type data that now [Dataxu] can now provide to Roku and build outward. Start TV-first and then go back out programmatically,” said Glomski.

With that insight, Roku would be able to pitch advertisers on its ability to manage the frequency with which people are exposed to their ads across platforms — something that has been a major headache for advertisers — and also use Dataxu to sequence their campaigns, said James Shears, vp of advanced advertising at video ad tech company Extreme Reach. For example, since Roku targets ads on its platform at the household level, it could use Dataxu’s ability to programmatically buy ads online and on social networks to retarget individuals who had been exposed to ads on Roku.

To be clear, other DSPs are already able to pitch advertisers on being able to link their connected TV ads to ads running elsewhere. But because connected TV is a cookie-less environment, those DSPs can face challenges in being able to associate an ad served on a connected TV with an ad served on a computer or smartphone. Since Roku owns its connected TV platform and would now own a DSP, industry experts expect that it will be better able to connect the dots across platforms through the deterministic data Roku has on its 30.5 million active accounts.

“Maybe it’s an 80% match within the Dataxu environment and maybe a 30% match within the rest of the partnerships,” said Glomski.

The post With DataXu buy, Roku unveils big ad ambitions appeared first on Digiday.

Vice, which just started using TikTok earlier this year, is finding its TikTok followers crave exclusive content. Next month, Vice is planning to launch a Munchies by Vice account on TikTok and Haik said the account will feature exclusive content made specifically for TikTok by Vice’s own social innovation team, which produces content for a variety of platforms.

“We need to go in with a specific offering that feels native to what users of TikTok are producing themselves,”  said Vice CDO Cory Haik. “We can’t do a derivative.”

Those daily short-form videos, she said, “will still feel like Munchies,” but will also “feel very TikTok. It will have a different voice.”

Vice is still figuring out exactly what kinds of videos to post on TikTok for Munchies, but some early ideas include celebrating food bloopers, using recipes many people know but often mess up on, but embracing those failures. Or developing viral skits that look more closely at trending food items or themes. One example is, if throwing cheese on walls is trending on TikTok, Munchies might create a video that looks at which cheeses stick and why.

“It sounds like a big investment but we’re just optimizing teams that already exist,” Haik said.

BuzzFeed, which also started using TikTok earlier this year with four different accounts, isn’t creating exclusive content for TikTok just yet, but said reception to its repurposed video content has been positive. One of BuzzFeed’s most popular posts is from Tasty, demonstrating a baking hack.

“One of our motivating factors to be on TikTok and create a Tasty account was that we were finding a lot of copycat Tasty accounts on TikTok,” Tabir Akhter, head of platform strategy at BuzzFeed said. “People want to see food content on TikTok. It’s not only videos from high school bathrooms. It’s more than that. It’s a huge and robust platform of lots of people with lots of different interests, and people are really responding to our huge viral food videos on Tasty.”

She said her team has been very strategic and thoughtful about how they adapt existing video content for TikTok so that “it doesn’t feel like an imposter. If feels very native.” BuzzFeed is also thinking about launching more original TikTok content next year.

Hearst Magazines, which has been using TikTok and its former iteration, Musical.ly, since May 2017, also repackages content from other platforms onto TikTok. It’s found certain types of content to be the most engaging: namely, anything featuring celebrities and “mesmerizing” content, said Sheel Shah, Hearst Magazines’ vp of strategic partnerships and consumer products. One of Seventeen’s most popular TikTok posts, he said, was one that showcased the art of bullet journaling.

Historically, publishers have been reticent to spend time and money on platforms where it’s not clear how they can generate revenues. Currently, there is no mechanism for creators or publishers to directly monetize on TikTok, such as with sharing ad revenue, but all three publishers are hopeful there will be one day.

The short-form nature of TikTok videos, however, makes it relatively cost-effective to produce new content as Vice intends to do, but it also forces creators to get creative, even when they’re adapting existing content.

“What makes TikTok unique is the hyper-speed at which content is created and consumed,” said Akhter. “We do enjoy the really short-form nature of the videos … it forces your creativity in the adaptation process.”

Shah, however, said he wonders if TikTok will eventually allow longer-form video content like Musical.ly did before, since he finds the 15-second video format somewhat limiting.

All three publishers said they view TikTok primarily as a long-term way to engage and grow their respective audiences, similar to how they did with Snapchat a few years before.

“For TikTok, right now it’s more about long-term audience development and one day, maybe, monetization,” Shah said. “We want to figure out what this audience is interested in and how we can extend this understanding onto other platforms where we do have ROI.”

The strategies for the two platforms, however, are different, although both TikTok and Snapchat appeal to younger user bases and feature short-form video content.

“Snapchat, for us, is very curated and magazine-like,” said Akhter. “But on TikTok, there’s a huge potential for binge behavior and to go into a rabbit hole of our content, and we’re eager to serve them with that.”

At Vice, Haik said they’ve gotten their Snapchat strategy “down to a science” and they are not aiming to do original content on that platform, or on Instagram in the same way they’re doing it on TikTok.

One thing all can agree on about TikTok, however, is that its user base skews young. A leaked ad pitch deck fromJune 2019 said the majority of TikTok users (69%) are from Generation Z (ages 16 to 24), while 25% are age 25 and older. Most users are also female (60%). In the U.S., TikTok has more than 30 million monthly active users who spend, on average, 46 minutes on the app, per user, per day. Globally, the number of monthly active users is 800 million, with 500 million based in China.

Snapchat, by comparison, has 210 million daily active users worldwide, and eMarketer estimates it reached 297.7 monthly active users this year.

“We still believe, more so than ever, there’s a huge audience on the platform,” Shah said. “It’s a great opportunity for us to engage and interact with that new generation of consumers. We want to make sure that we’re there. We can get feedback on what this audience likes and doesn’t like, which informs our broader content strategy.”

While all three publishers have participated in trending hashtags on TikTok, none we spoke to have purchased a hashtag challenge or branded lens.

Looking ahead, Vice’s Haik said she wonders if TikTok will enable creators to have direct-sell ads and she thinks it could also be a platform where Vice could place branded content. She, along with Shah and Akhter, also said they wonder if and how TikTok will eventually make it easier for users to discover creators, their media titles included.

The post What publishers like BuzzFeed, Hearst and Vice are learning from being on TikTok appeared first on Digiday.

In the U.S., BuzzFeed has been creating commerce content since 2016, but it only recently transferred this to its international business. “Our commerce is thriving because we know our audience inside out,” Rogers said.

The company would not say how much revenue the U.K. affiliate operation brings in so soon after launching it. But Rogers said his intentions are to make affiliate a significant part of the revenue mix.

As the digital ad market has been in flux, BuzzFeed has faced upheaval in its path to profitability, in the U.K. as well as globally. The publisher made staff cuts at the beginning of this year. Changing leadership and organizational structure also meant the publisher has been less visible in the U.K. agency market. Rogers joined BuzzFeed in June as part of an international restructure to charge BuzzFeed’s revenue growth.

BuzzFeed globally will be profitable for the whole year for the first time in 2020, according to Rogers. The publisher has said it made $84 million (£65 million) from platform revenue last year, up from $7 million (£5.4 million) in 2014. Last week, BuzzFeed was among the media companies that struck a deal with Facebook to license content for a fee in the platform’s news tab.

However, success has also come from diversifying revenue streams and looking outside platforms. BuzzFeed made $200 million (£155 million) in revenue over two years from revenue streams that didn’t exist in 2017.

“Inherently we’ve been structured as an ads business, which is still core, and we need to continue focusing on innovating in that,” said Rogers, 

In the U.K., Rogers listed five key businesses for BuzzFeed: native and programmatic advertising, which makes up the majority of revenue; commerce and affiliate; studios, which produce shows like “Worth It”; product licensing and consultation.

All of BuzzFeed’s international regions besides Germany now run affiliate content, but in the U.K. it’s seeing some of the strongest results in terms of selling partners’ products. BuzzFeed has multiple U.K.-based affiliate partners, one global partner and also works with select networks like Rakuten. It’s also in early conversations with retailers like H&M and Zara.

“Affiliate marketing is using the same techniques that BuzzFeed has used for years, like quizzes and lists, the fun stories. That’s the way to connect with the audience in an authentic way,” said Rogers.

BuzzFeed charges an upfront fee for affiliate partners as well as commission on each sale, the amount depends on the partners. In the U.K., the norm for most mainstream affiliate partners is just to take a commission on the sale. As with BuzzFeed’s native ad rates when it first entered the U.K. market, it will take some evidence to show it’s worth the money.

“It’s a more premium play. It will involve us educating the market and affiliates. Over time we’ll show it’s worth paying for,” said Rogers.

For now, all affiliate action occurs under BuzzFeed’s core brand, but there’s scope for its verticals — like Bring Me, BuzzFeed’s travel brand — to widen the products and retail partners.

“We want to move into transactions as well as experiences,” said Rogers. “Companies like Airbnb would be a natural partner to help us shift away from content and awareness to transaction and experiences, using affiliate to do that adjacent with Bring Me content. There’s an opportunity for that.”

The post BuzzFeed UK has hired 6 affiliate writers to fuel diversification efforts appeared first on Digiday.