Month: October 2019

“These deals that give agencies free space aren’t a by-product of how they trade,” he said. “They’re setting up the deal with the specific intent of pushing their media agency brands and planners to sell the inventory they own or have a stake in ahead of what could be in the best interest of their client. The big issue now for advertisers is the neutrality behind the planning of their media investments.”

What advertisers know less about is when agencies acquire free ad space and then, in effect, sell it back to their clients. When an advertiser signs off on a deal for the agency to buy media at a 20% discount, there’s usually a stipulation in the contract that the advertiser can’t run audits to find out how those discounts are gained, said Broderick. Many advertisers tend to be OK with that type of deal since they’re benefiting with a lower price. But based on Broderick’s analysis of multiple deals across the agency groups, what advertisers think they’re getting at 20% is actually the inventory the agency has gained for free from the media owner.

“It’s not 20% off in simple math. It’s 80% more,” said Broderick. “The agencies are not declaring that difference because some of the contracts say they don’t have too. They’re selling clients their free space that they can’t audit to know how much it costs.”

Being given free inventory by media owners in exchange for ad spending isn’t new. Agencies have gotten free bonus inventory when certain volume targets are met for years. And those deals are fine when the inventory is shared with clients to reduce their costs. Problems arise if agencies essentially sell this bonus inventory to clients and pocket the money for themselves rather than pass those savings on. In a world where media owners can effectively create as much as digital inventory as they like, making money from selling free media is a lucrative high-volume, low-margin business. Now, agencies are waving away cash rebates because they have to be shared with clients under the revised contracts, whereas free media is harder to account for, said Broderick.

“Agencies get a certain amount of cash value which can be taken in free space,” said Nick Manning, a former Ebiquity exec who now runs his own consultancy Encyclomedia. “The amount of free space in the market makes media benchmarking much harder, as media rates are now manipulated by free space.

Here’s how it works. First, a media plan is created by an agency and signed off by an advertiser. The agency nearly always then pre-bills the advertiser for the planned delivery of that media. Once the campaign actually gets delivered, the numbers will nearly always differ from those that were planned in the case of non-guaranteed buys or biddable media like for search, social and programmatic. The reconciliation process after the campaign runs compares planned versus billed versus delivered, ensuring any differences get settled, which is usually through credits from the agency to the client or deductions from future budgets. Those deductions usually incorporate some of the free media that the agency has put a value on, said Broderick. In other words, when an advertiser agrees to those sorts of deals, it could be receiving free media that their agency put an imaginary value on in order to placate concerns that they don’t pass rebates along.

Margins in media buying, even since the crackdown on rebates, can sit between 20% and 25%, according to one industry insider. Margins in media have long subsidized the lower margins in creative and PR. Those margins tend to be higher in digital media, where the rate can be more than 30%.

“It’s like a game of whack-a-mole when it comes to keeping track of how agencies set up trading deals,” said Broderick. “The agency groups continue to develop new ways of trading all the time. There’s some trading happening now that ourselves and our clients won’t become aware of until at least January 2021 because the contracts haven’t been audited yet.”

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The battle for first-party data
The third-party cookie is in the throes of demise. This is heightening pressure on publishers to figure out how to offer advertisers the targeting they’ve come to expect.

“We know, long term, getting users to log in is interesting,” said one publisher. “And if you look at Google and Facebook, they don’t allow many third-party trackers on their pages. So, in the long run, that’s also the direction we should take. We just need to find a way to make that data exchange solid and understandable for the users.”

“A higher base of registered users shows more intent to buy, and at least they are further down the funnel,” added an exec. “A lighter user base can get what they need elsewhere.”

“I’d rather have someone’s email address than show them any ads,” added another exec.

Perhaps, but most publishers struggle with getting their visitors to log in, particularly since most come from search or social platforms. One approach: Force registration to read more.

“How do you make registration walls worth it?” wondered one publisher. “There are ways of hiding the registering function. For some, getting three articles free a month is enough.”

Added another: “Sampling is important, but the cost of it should be zero. The cost should be getting your card out — it could be 1 cent — it’s the action of doing it.”

The subscriptions/advertising divide
Publishers with subscriptions at the core of their business model publicly take an optimistic view of the impact on their ad businesses. After all, subscribers are logged-in users with lots of data. What’s more, they’re more engaged and loyal, and often a more lucrative audience. But there are issues.

“We have very much flipped from an advertiser business to a subscription business,” said a publisher. “With that, as a business, we make very strong choices, which are not always advertiser-first. So we’ve had push-back from advertisers now: ‘Well, it’s great you’ve got a sustainable model but in terms of what are you doing for us that’s relevant for me? Because it seems like all you care about is subscribers.’ That’s definitely not the case.”

Then there’s getting the sales team to not feel like they’re playing second fiddle.

“I think the sales teams get a little confused,” said an exec. “Quite often they’ll take our subscriber number [to market to advertisers] when they really should be taking our traffic number.”

Added another: “It’s about constantly modifying how you train and educate those [sales] teams and not giving them targets that are just so crazy when clearly the other side of the business might be damaging some of their revenue.”

The cookie conundrum
The General Data Protection Regulation landed like a bomb at many publishers. Now, the ePrivacy Regulation is coming down the pike. The industry is scrambling to keep up. “There are so many working groups at the moment, it’s a bit ridiculous,” moaned one executive. “Because there are lots of things happening at the same time.”

The scramble for answers in a world where the cookie is not the fulcrum of digital advertising can sometimes lead to more questions than answers.

“Initially I thought that looking into persistent IDs would be a solution,” said an exec. “However, persistent IDs, the way they are built at the moment are almost relying on syncing cookies — so we are going around and around the same option, the same solution.”

On publishers looking past the doom and gloom
At times, the many arrows aimed at digital media can seem overwhelming. And yet, most publishers find a way.

“I think as an industry we tend to — and the same applies for cookies — rush toward the ultimate end,” said a publisher. “Fundamentally the industry will always find a way through because it’s a multibillion-pound business that cannot fail. … We always jump to the worst-case scenario, but actually there are a magnitude of ways to work through [the industry’s current issues].”

The post ‘The industry will always find a way’: Candid thoughts of European publishers on the state of media appeared first on Digiday.

Selling ads direct can be more difficult, but publishers so far have found that it’s a bright spot when it comes to revenue. More than 50% of publishers reported this year that direct-sold was a large or very large source of revenue.

Publishers with more than $50 million in revenue plan to focus largely on subscriptions, video advertising and growing ad revenue, both in programmatic ads and direct-sold advertising.

Publishers with under $50 million in revenue are also focused on advertising, but subscriptions are slightly less important.

The post Digiday Research: Reader revenue is the top publisher priority for 2020 appeared first on Digiday.

An earlier draft also specified that consumers would determine their consent settings via the browsers they used, not publishers directly, making browsers the so-called gatekeepers of consent. That latter part has been deleted in the various revisions, yet numerous European publisher trade bodies, including the European Publishers Council, have stressed their concern that it will be reintroduced.

On Oct. 18, the EPC, along with nine other European publisher and advertiser trade bodies including the European Newspaper Publishers’ Association, European Magazine Media Association and Federation of European Direct and Interactive Marketing, have written a letter of appeal to the current European Council Presidency (Finland) to appeal the current text. Their argument: The current form could seriously damage publisher advertising revenue, while benefiting the major tech platforms whose product sets make it already very easy for people to stay logged in.

“[EPrivacy Regulation] puts the future financial viability of independent, advertising-funded media at risk,” the trade bodies wrote.

On Oct. 22, European Union member states will vote on whether or not they agree on the current, revised version of the law. Should they do so, that may speed up the law’s ratification earlier than suspected, according to Angela Mills Wade, executive director of the European Publishers Council. “It’s looking, alarmingly, like it is speeding up,” she said.

Despite the efforts publishers have gone to, and continue to go to, in order to scale consumer log-ins, that remains a tough task, added Mills Wade. Google and Facebook have broad product sets that make it far easier for consumers to remain logged in permanently.

“It is very problematic,” said Mills Wade. “Research has shown there is huge resistance from consumers when it comes to being asked and re-asked to log in [or give permission for data to be used.] That would make it very difficult to get the right consent and specificity of the data to track for the advertisers while actually favoring the logged-in platforms. [EPrivacy Regulation] is completely disproportionate and mad.”

The publisher and advertiser trade bodies have also appealed to the European Presidency to not overcomplicate the user consent process for a media and ad landscape still grappling with GDPR compliance.

GDPR fines and additional warnings have slowly trickled out. Last week, Spanish data protection authority fined Spanish airline Vueling €30,000 ($33,000) for violating cookie consent stipulations under GDPR for not making it clear enough how a user could opt-out, and for assuming they had opted in while not actually having actively done so. A few weeks ago the European Union Court of Justice stated that the use of pre-ticked consent boxes was a big no-no.

The fines themselves are less of an issue compared to the costs of full compliance. For instance, companies told to change how they collect user data will need to start from scratch, incurring technology and compliance costs, including vendor reviews and process changes.  It will also mean starting all over with seeking user consent.

“No consumer will understand the degrees of gray involved in [GDPR] compliance,” said Rowly Bourne, founder of ad tech vendor Rezonence. “They will be annoyed at having to opt-in again.”

There are multiple examples of sites that use the same technique as Vueling. While U.K. regulator ICO hasn’t yet issued a fine for any similar violation, it has gone to recent lengths to appeal to brand marketers not to be responsible for bankrolling ad tech vendors that aren’t compliant, and in doing so perpetuating the issue.

“We’re being told by the ICO: don’t be the least non-compliant,” he added. “By that, they mean they are making their way through the more serious cases first, but that they will get to all of them in time. If you’re slightly higher up the beach and all seems sunny at the moment, that doesn’t mean they won’t come from you.”

The post ‘Completely disproportionate and mad’: Why ePrivacy is a looming nightmare for publishers appeared first on Digiday.

Already, Crooked has started extending its content offerings beyond the purely political. Most recently, the company launched a health-focused podcast called America Dissected with the former public health director of Detroit. The company’s pop culture podcast, Keep It, often features celebrity guests from the entertainment world, and has produced more than 100 episodes.

“It’s not just about politics. It’s about stories that come from history, different angles on moments in American history and also internationally,” said Sarah Geismer, Crooked Media’s head of creative development and production and a former executive with Netflix and Fox TV. “We’re even trying out a scripted podcast. We’re trying to expand beyond what we’ve been doing so successfully.”

Beyond podcasts, Crooked is also expanding its TV and film projects, looking at developing docuseries and focusing on the upcoming 2020 U.S. Presidential election. It has already launched a four-part HBO special in 2018. And while the company is most known for its political coverage, Crooked wants to diversify the types of stories it covers going forward.

With the new podcasts, TV and film projects, Crooked is also focused on growing its audience. The What a Day podcast, in particular, is “specifically geared at younger people [in their 20s and 30s] and avid Crooked listeners, but also about bringing in new people as well,” Geismer added.

Crooked’s strategy for growing its audience and finding success is investing in talent, coupled with substance, Geismer said. “The magic of podcasts is the mix of personalities. It’s this idea that you’re showing up for the talent and not just the substance. You’re here for the people who are delivering that news.”

COO Sarah Wick said the primary revenue driver for Crooked Media remains podcast advertising, followed by merchandise and live events. In the last two years, they’ve sold more than 100,000 tickets for tours of six of its shows. Other growth areas are in TV and film production, ad sales for newsletters and written content and video.

There’s increasingly more ad money to go around in the podcast industry. The third annual IAB and PwC Podcast Revenue Report said marketers spent a record $479.1 million on podcasts in 2018, up 53% from the previous year. By 2021, that ad spend is expected to reach over $1 billion.

While the barrier to entry is relatively low for breaking into podcasting and ad money pouring in, building an audience is a challenge because there are simply so many podcasts, hundreds of millions, in fact, to choose from, said Zoe Soon, vp of mobile at the IAB. Soon said that some of the most popular podcast categories–true crime, news and politics–“are hard to monetize because advertisers don’t want to be near that content.”

Crooked Media, however, has drawn advertisers from DTC brands like Everlane and Barkbox, as well as media brands like Quartz, the Financial Times and Netflix.

“When they [the hosts] talk about a sponsor, it’s hilarious in a lot of ways,” said Chris Corcoran, chief content officer for Crooked Media’s sales partner, Cadence13. “Their reads become part of the conversation. It’s funny but it obviously leads to people getting the product.”

It’s that ability to spur people to action that’s defined Crooked Media’s creation from the start, when its founders decided to leave The Ringer’s Keepin’ It 1600 to launch the company.

“We wanted to not only continue the political podcasts we were doing but expand to a network of podcasts, expand into video, sort of create a progressive media company that didn’t just analyze politics like we did during Keeping It 1600, but also helped inspire activism and organize,” co-founder Jon Favreau said during the same SXSW interview in 2017.

Crooked isn’t just concerned with growing its audience, however. It wants to motivate people to vote and get involved in the political process, too. Vote Save America, its platform to encourage people to register to vote, volunteer and learn more about the candidates, is a big part of that.

“Our goal is reaching as many people as possible going into the election,” Wick said. “Expect more podcasts, more written content and more video from us.”

Photo credit: Crooked Media

The post With 15 new shows in the works, Crooked Media is expanding beyond politics and beyond podcasts appeared first on Digiday.

Doing so hasn’t changed how the company allocates its digital budget yet, but it has resulted in tweaks to some of its food photography or copy after figuring out which posts were driving delivery sales. With photography, finding a sweet spot between photography that looks professional and user-generated has been key, especially since the chain’s main focus for digital advertising is on Instagram. The chain handles marketing with an in-house four-person team, but it also works with digital consulting agency Lamington Co.

In addition to having a digital product to link to in advertising, delivery likely also gives Dos Toros more data on the consumers who order delivery through them than third-party delivery services. In general, as companies grapple with more third-party data restrictions having the ability to gain first-party data on consumers has become more valuable.

Historically, Dos Toros has made digital the focus of its small marketing budget — which is usually between 1% and 2% of its total sales — with 70% going to digital and the majority of that 70% going to Instagram. The rest has been a combination of billboards, partnerships and guerrilla-style marketing tactics, like last summer’s burrito drops. This month, the chain has put billboards front and center with 60% of its dollars going to the medium. The rest of the budget is split with 10% each going to partnerships, content creation, marketing, content creation and influencers.

Ahead of its Oct. 30 anniversary, the nearly 10-year-old fast-casual Mexican chain has significantly increased its use of out-of-home with the lion’s share of its budget, or 60%, going to billboards in New York City and Chicago. Some of those billboards speak directly to the chain’s more well-known competition, Chipotle, with mildly antagonistic copy that reads, “Thanks Chipotle, we’ve got it from here.” 

In the first six months of 2019, Dos Toros marketing budget was $4,000; in 2018, the chain’s budget was $13,000, per Kantar, which doesn’t measure social, where the majority of Dos Toros budget has typically gone.

“We’re always spending time and money on digital. That’s our steady drumbeat of marketing across digital and social platforms, but we felt with this campaign we’d have more of an impact with out-of-home,” said Kremer. “Also, I think out-of-home is a little undervalued right now. The bang for the buck was there.”

While the chain has used billboards before, this is the biggest effort the company has ever done. Previous efforts were very local, using just a few placements nearby a new restaurant location to get the word out to passersby. This time, the chain has put placements all over New York City and Chicago, the two cities where the chain currently has locations.

“Digital is the base of the marketing pyramid for most brands these days,” said Christophe Jammet, director of social media and mobile at innovation consultancy DDG. “Digital is great for brand building and awareness, but it’s important for brands to not ignore the importance of [showing up in] real life. New Yorkers are walking around going to work and making decisions about what to eat, and this is a reminder of a brand that is physically adjacent to you. It’s a really relevant means of advertising.”

The post Dos Toros is using its delivery capabilities to track and attribute its digital ads appeared first on Digiday.

While most of the shows are being put together out of original content, some are being assembled out of material that exists elsewhere. WNYC’s show, Impeachment: A Daily Podcast, is assembled using excerpts from The Brian Lehrer Show, which airs weekdays on WNYC.

That hasn’t dimmed interest. Downloads of Impeachment: A Daily Podcast are moving at twice the rate of downloads for “The Brian Lehrer Show,” a spokesperson said.

The impeachment mania mirrors the Trump craze that hit shortly after the 2016 election when publishers ranging from Mic to Slate launched Trump-specific newsletters and site verticals.

But like those products, impeachment newsletters and podcasts will likely be difficult to monetize. Of the impeachment podcasts out there, just one, Daily DC: Impeachment Watch, carries ads, and those are sold as part of WarnerMedia’s podcast network, rather than as part of a direct buy.

“This is far more catering to the consumer than it is catering to the advertiser,” said Stephen Smyk, the svp of podcasting and influencers at media agency Veritone One, who added that he was surprised by the number of impeachment podcasts that have materialized in the past month. “What some of our clients say is, ‘There’s being on political content, and there’s being on political commentary.’ They’ll do news, but not commentary, and this hedges into that [latter] area.”

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