Month: October 2019

Blacklists have long been criticized for their bluntness, which is compounded by the fact most brand-safety tools lack the ability to read and interpret context correctly. For instance, the word “shoot” is often used in sports articles to reference when a goal is scored. That means that hundreds of brand-safe articles about footballers “shooting for goals” get blocked. Likewise, after the Manchester bombing in 2017, the name of the city remains on the majority of blacklists. Given Manchester is one of the U.K.’s biggest cities, it gets mentioned a lot, but any page in which it’s included, can’t be monetized currently. Even inventory around the recent “Wagatha Christie” spat between Coleen Rooney and Rebekah Vardy has been blocked on The Mirror because some have contained the word “hack” referring to an Instagram account. This tool, called Mantis, sits on the IBM Cloud and has been designed to detect when the use of a word on a keyword list is blocking an article that’s on a totally different, brand-safe topic, and in doing so unlock valuable inventory.

General-news publishers have hemorrhaged ad revenue as a result of lengthy keyword blacklists blocking targetable inventory for years. But the issue has spread to be just as problematic for sports publishers, as well as fashion, beauty, lifestyle and entertainment sites, according to Terry Hornby, digital solutions director at Reach.

“Ultimately, we want to move away from keywords [blacklists] entirely,” said Hornby. “But we get that not everyone will trust Mantis overnight. We want to prove the concept to the market.”

Some campaigns can be more affected than others, depending on the objectives and the keyword lists used. An executive at a national news publisher said that between 10% and 30% of ad revenue can be lost from a single campaign, but added in some cases that can be much higher.

For others, it’s even more extreme. An executive at a different publisher said that as much as 90% of a single campaign’s impressions can be blocked. “Some campaigns can flatline at close to zero, or insignificant delivery, depending on the keywords and tech used,” said the publishing executive who spoke on condition of anonymity. “That translates directly to revenue.”

Others have said that lists block as much as 65% of their entire programmatic ad inventory. While some clients have lists that have more than 2,000 words blocked for a single campaign, according to publisher sources.

“We often get told that parts of our content are being flagged for inappropriate content but then there are no further insights into which parts of our sites or what for, which makes it impossible to troubleshoot and identify the problem,” said a publisher from a magazine brand.

The general consensus among publishers is that there are huge volumes of incorrect keyword matching occurring.  That often means a scramble to deliver on an ad partner’s campaign objective in other ways and shift around available impressions. Some publishers have to change targeting away from relevant articles and content types mid-campaign because all the relevant pages have been blocked.

“Clients are more than ever focused on brand safety, and the [agency] solution is to crank what technology exists to the highest possible brand safety level and trust that it’s working as it should,” said an executive at a media group.

Of the six publishers spoken to for this article, all said it is hard to even quantify an exact amount of revenue they’re missing out on. “We can’t see the impacts of all brand safety blocking on activity in our exchanges, even with log file access. Only buyers would have that visibility,” said the same executive.

The issue affects direct-sold, insertion-order based inventory, as well as campaigns that are bought and sold programmatically. Industry-wide, publishers are likely losing hundreds of thousands in revenue in the U.K. alone, according to media sources.

Hornby is confident the use of the Mantis tool will open up a significant amount of unlocked inventory, therefore increasing bidding for inventory in online auctions, which will, in turn, drive up programmatic ad yields.

Reach plans to license the tool to other publishers — on a pay-as-you-go model — providing reporting and services as requested. It doesn’t plan to drive major profits from licensing doing so, according to Hornby. “The unlocked inventory is what will provide the meaningful revenue,” he added. For the partnership, IBM provided the technology but it won’t take a cut of any revenue made from licensing or advertising, according to Hornby. He will kick off an agency roadshow to help the buy-side understand the potential for the platform.

Both publishers and agencies spoken to for this article are interested in the tool. While some agencies are open to evolving keyword blacklist strategies to center more on semantic and machine-learning-based tech, there will need to be hard proof it’s a better approach than keyword blacklists.

For agencies, often the biggest hurdles in using custom publisher tools revolve around lack of scale. For Mantis to get traction among agencies, a lot of publishers would need to adopt it so that agencies needn’t split their brand-safety strategies for different media plans, according to Matt McIntyre, head of programmatic for EMEA at Essence.

“We’re big supporters of machine learning helping make smarter decisions at scale, but it would be easier if solutions like this [Mantis] are available to advertisers who can then apply them across all campaigns regardless of integration to specific publishers,” said McIntyre.

The majority of agencies acknowledge that keyword blacklists are a crude way to avoid brand safety issues, but it works. “In principle, the tool sounds effective and impressive, unlocking more inventory effectively lowers the auction intensity and resultant CPM, which provides greater reach at a more effective cost,” said Paul Kasamias, managing partner, Starcom. “This then becomes a question of risk management in relation to brand reputation. How much additional premium inventory can be truly unlocked and what’s its incremental reach and cost-effectiveness. If the answer isn’t significant, then the conversation becomes somewhat less appealing.”

The post Trinity Mirror parent Reach is getting around news-blocking keyword blacklists appeared first on Digiday.

Dealmakers in the space have taken on a different approach in recent years, as opposed to when venture-capital money flooded the sector and valuations soared. The new acquirer largely follows a different playbook that has cashflows and profit front of mind, not simply growth at all costs. Digital media has entered the age of the operator.

A swift path to profitability tends to come from brands that own, rather than rent, their audience. The majority of recent deals have involved highly-focused, subject-specific verticals. New acquisitions are quickly tucked into the margin-sensitive organization’s wider office space, ad-tech stacks and other back-office functions. Overlapping costs are largely stripped out, rather than continuing to operate the assets as separate, adjacent businesses.

“This allows them to achieve more sustainable scale and negotiating power across the portfolio, while also achieving better operating leverage,” said Luma’s McKenna.

While at one point, acquirers of digital media were largely on the hunt for what was hot in the moment — whether it be in sports, comedy, food reviews — now “the bar has certainly been raised,” said Roddy Moon, managing director for technology, media and telecoms at KPMG Corporate Finance.

“It’s not just about traffic or eyeballs, it’s about profitability and a sustainable business model,” Moon said

There were 84 digital media deals in the first three quarters of 2018, some of which Luma vp Conor McKenna describes as “capitulation deals” from companies who had suffered following big tech platform algorithm changes at the end of 2017.

Bustle has specialized in these. It has acquired five sites in the last year — Mic, Flavorpill, Inverse, Nylon and The Outline. Vivek Shah, CEO of Ziff Davis owner J2, which has bought IT professionals network Spiceworks and parenting site BabyCenter in the past year, told the Recode Media podcast his company is “always in the market” for distressed assets

Large in the margin

Elsewhere, Vice Media positioned its acquisition of Refinery 29 as an advancement in its quest towards profitability, helping to grow its reach among a female audience and to supplement its newer revenue streams, such as events and e-commerce.

“We are obviously very prudent. We will find ways to drive operating leverage against both platforms,” said Vice Media Group Chief Strategy Officer Hozefa Lokhandwala. “We are aiming for 20-plus percent more content coming out of the organization. For us, the goal is to be in growth mode and to do it smartly and thoughtfully.”

IAC’s DotDash made four digital-media acquisitions in 2019 — most recently Liquor.com earlier this month — and firmly has set out its stall as an acquirer, adding highly-focused, subject-specific sites to its growing portfolio. Dotdash said it generated $131 million in revenue in 2018, up 44% on the previous year. Full-year adjusted EBITDA was at $21.4 million in the period.

Dotdash CEO Neil Vogel told Digiday earlier in October the company is “very, very actively” looking for more companies to buy, especially those in the business of evergreen content, and that cashflow is key when sizing up future acquisitions.

“Everything we look at is going to be some multiple of EBITDA — if they don’t make any money, currently, we need to figure out how to fix that,” said Vogel.

Tipping the scale

Deduplication isn’t the only aim. Acquisitions are also positioned to complement other brands in the portfolio. Take Vox Media, which has made three acquisitions this year: New York Media, comment moderation platform The Coral Project and publisher and digital film studio company Epic.

“It can’t just be about the consolidation of corporate teams, said Vox Media Chief Revenue Officer Ryan Pauley. “Successful strategies will be about the elevation of the work itself, whether that’s the quality of the editorial, or of the product the audience sees, or the quality of the work we do with brands.”

Revenue diversification beyond advertising is also a core strand of the new digital-media acquirer’s strategy.

“It’s not just about having good, original, high-quality content,” said KPMG’s Moon “It’s about an appetite for things other than original content, whether that be commerce, or a tie-in to what’s available through traditional video and television.”

Advertising revenue itself also needs to be diversified. Group Nine looks to avoid potential cannibalization in terms of client lists when looking at potential acquisitions.

PopSugar, which was acquired by Group Nine Media earlier this month, for example, shared none of the same top 10 clients, according to Group Nine Chief Executive Ben Lerer. Group Nine’s biggest categories are in the liquor, beer and automotive space, while PopSugar introduced more fashion, beauty, retail and fitness advertiser to the client list.

It ain’t easy

To be sure, the path to building the new digital-media conglomerate won’t be easy and not every acquisition will succeed. Bedding acquired assets into the wider organization means more painful cuts are inevitable. And many of the aforementioned companies’ acquirers remain venture-backed, meaning the high expectations for a return on investment haven’t gone away.

“Digital media has already endured most of the reckoning from the venture-fueled mania,” said Bryan Goldberg, CEO of Bustle Digital Group.

Goldberg said that acquisitions can take time to fully take off, noting that it took around 18 months for Elite Daily, which BDG acquired in 2017, to become fully integrated and begin turning a profit. “People in the venture world are not so patient,” he said.

Elsewhere, the majority of digital-media startups still rely on advertising for the lion’s share of their revenue. With a downturn looming, marketers’ spending could slow in the coming months and years.

Google and Facebook continue to dominate the digital ad market, with a 31.4% and 19.3% share of total worldwide ad spending last year respectively, according to eMarketer. With a backdrop of tightening data regulation and recent moves from browsers suggesting a cookie-less future, digital-media companies will need to build out strong first-party data strategies in order to maintain healthy levels of spending. And that’s not to mention trying to figure out how to get consumers to pay for the content they are viewing and expand into new areas such as events and commerce.

Digital media industry executives are positive that the sector’s strongest players will overcome those hurdles.

Vice Media Group’s Lokhandwala — who before joining the publisher last year was a former managing director in the media investment banking group at JP Morgan — said the market was “much more unclear” five or six years ago about where the media ecosystem was headed. Now there is more clarity about the attributes for building what he described as a “next-generation media company.”

“People are looking at…building companies that have the sustainability, durability and stability to pivot, move and be nimble as changes continue to happen to the media industry, distribution and how technology is affecting that,” he said.

The post The age of the operator: What the new cluster of digital-media acquirers are doing differently appeared first on Digiday.

Here’s a primer on what to watch out for.

WTF is SupplyChain Object?
Launched alongside sellers.json, SupplyChain Object is pitched as a way to help buyers to remove anonymity in the supply chain. In a nutshell, the tool shows all intermediaries involved in the sale of a particular impression. This trail is mapped across a chain of nodes that represents all the sellers who were paid in an individual bid request, using information including the URL of the seller and the publisher ID. For the tool to work, it has to be included in the bid request for an impression.

“Using both SupplyChain Object and sellers.json in tandem with each other can be eye-opening for buyers,” said Chris Kane, founder of programmatic consultancy Jounce Media. “Rather than make decisions on how to buy impressions based on relationships and intuition, buyers can use both sellers.json and eventually SupplyChain Object to make data-driven decisions on supply-path optimization.”

What does SupplyChain Object tell me that sellers.json won’t?
Sellers.json shows a buyer the first two payment hops in a transaction. Sellers.json shows that demand-side platform X paid supply-side platform Y which paid publisher Z. Or it might show how the payment went from DSP to SSP to reseller. But who does the reseller pay? The publisher? Another intermediary? That’s where SupplyChain Object comes in. If the tool is included in the bid request, then that request would show the full chain of payment all the way back to the publisher. That’s the theory at least, as the adoption of the tool is still a work in progress.

Why aren’t more ad tech players adopting SupplyChain Object?
SupplyChain Object’s role in reconciling ad tech’s issues is debatable. For the tool to leave its mark on ad tech, vendors on both the buy and sell sides must be on the latest OpenRTB protocol — a set of procedures from the IAB Tech Lab to bring more clarity to the digital ad supply chain. The protocol poses a technical issue in that it could severely limit the use of SupplyChain Object given the majority of ad tech vendors won’t be on the latest version of OpenRTB, said Dan Larden, managing partner of product and partnerships at programmatic agency Infectious Media. There’s also the lack of commitment to SupplyChain Object from Google’s SSP to consider. For any buyers already struggling to implement a  strategy consistently across digital channels, this SupplyChain Object initiative is only going to add to their list of headaches, said Larden.

How do I get the most from SupplyChain Object?
Buyers that are already using sellers.json and ads.txt will get the most from SupplyChain Object. Insights taken from each node tracked by SupplyChain Object can be cross-referenced against the end seller in the sellers.json file and the names of the ad tech vendors (listed in the ads.txt file) cleared to sell a given publisher’s inventory. Armed with that information, buyers can start to consolidate their spending away from shady sellers peddling fraudulent traffic as well those vendors who are simply reselling impressions to duplicate the number of auctions for the same impression. When that auction duplication happens, buyers can bid multiple times for the same impression, and inadvertently drive up the cost of it.

Wasn’t it already possible to get that clarity in the auction without these tools?
Prior to the arrival of the IAB’s transparency tools, finding out all the players involved in a single bid request was a manual process. A buyer would need to put an identifier into the bid stream, and then ask every SSP to map the ID to the seller to understand which intermediaries received money for the impression. Tools like SupplyChain Object and sellers.json automate that process when it comes to understanding the names and numbers of ad tech vendors taking fees in the supply chain. Nevertheless, the challenge will be how to implement these findings into a successful supply chain strategy as the majority of DSPs still do not allow for any seller ID optimization, said Larden.

The post WTF is SupplyChain Object? appeared first on Digiday.

Amazon’s not nearly as mature as clients think
“When it comes to data, we’re not getting the complete view that we’d like to have. Overall, clients’ expectations are ahead of where the platform is.”

“The backend is clunky. Setting programs up takes a lot of time. [When it comes to Amazon,] clients have unrealistic expectations.”

“We have to run on Amazon and within Amazon and Amazon’s DSP. It’s not the same as The Trade Desk — it’s not as intuitive. It’s a challenging tool to use today. Basic things, like bulk editing, still aren’t easy.” 

Prospective staffers understand organic social, especially on Facebook, but lack deeper knowledge of platforms
“When we’re interviewing, their knowledge is heavily organic social media. Most people know the most about Facebook. But our clients use all social platforms. It’s harder to find people with knowledge of Snapchat and even Twitter.”

“Pinterest is a tough one for us. It’s really behind the times when you compare to Facebook’s Ads Manager. Finding someone who can navigate that ads manager is almost non-existent.” 

“Mid-level, we struggle with finding people who can connect the dots at an enterprise level. When it comes to attribution, most of our clients aren’t using Facebook numbers.” 

“Social folks are in such high demand that tests or demonstrations of their skillset are not something candidates will have a tolerance for.” 

Training and retention
“We’re always going to have to train our people. Even if they come in knowing today, Facebook etc. will change it tomorrow. We’ve invested really heavily in training but it’s worked.”

“You train someone, get them really adept and then they’re going to want a lot more money.” 

“The problem I see more, in speaking to millennials, is that we’re a lean organization and people tend to come in and be like, ‘I checked that box, what’s next? Where do I go from here?’ It’s not that easy. We don’t have a clear structure of moving up and there aren’t many opportunities.”  

“[With younger staffers] there’s a lack of wanting to learn, a lack of curiosity. But it goes both ways. You go to Advertising Week and the leaders up on stage who want to have surface-level conversations. If you’re looking to challenge the next generation, leaders need to challenge [themselves]. There needs to be a little more curiosity. We need to continue to challenge youth.” 

Execution versus strategy
“There’s a lack of strategy in the kids who are entering the workforce. We often confuse executional capability with strategy. They don’t understand the reasons why [we do what we do]. Digital as a whole, particularly with data, has become much more about execution and less about why are we doing these things, what client goals are, etc. I believe the frustrations, when junior staff doesn’t have a path forward, stems from being heavy execution but light strategy.”

More time spent on client education
“The cadence and the recurrence of client requests [for reports] that are repetitive have increased tenfold. Walking through a report on calls rather than clients understanding it on their own.

“Our best people are answering client calls and focused on campaign setup. They don’t have as much time to be doing what we need to do to get the ROI.” 

“If you’re on the client side — I’ve been on client-side, there’s a lot of pressure to turn things around quickly — it’s a lot easier to ask an agency [to explain] reports to you. The volume of those requests has become extremely high.” 

The post ‘Clients have unrealistic expectations’: Media buyers sound off on Amazon, hiring and talent retention appeared first on Digiday.