Month: November 2019

Complex Networks’ chief revenue officer Edgar Hernandez described Climate as a “product development, product storytelling division” that will work with companies to create products that are meant to appeal to the media company’s audience of people interested in streetwear culture. The media company announced Climate at an event for advertisers and agencies it hosted on Nov. 2 in Long Beach, California, in connection with ComplexCon, its annual Comic-Con for streetwear aficionados. During the event, Hernandez said that Climate had been the original name of Complex but was dropped because of rights issues at the time.

Climate is a part of Complex’s expansion into different revenue streams. In addition to selling ads and sponsorships against its articles and original shows, the company makes money from producing and licensing shows for TV networks and streaming platforms, and operates a growing commerce business. Last year, content licensing, syndication and commerce accounted for 85% of the revenue generated by its food property First We Feast, which will host its first event called First We Feast Fest in 2020. Complex’s events business will further expand with an international version of ComplexCon planned for 2021.

Climate appears to be an opportunity for Complex to commingle its advertising and commerce businesses. The division will generate revenue from the consulting fees it charges companies, and its services are not expected to be bundled with any other services, according to Jonathan Hunt, evp of marketing and audience development at Complex Networks. However, in addition to developing a product with a company, Complex would be able to sell ads and sponsorships for the company to promote the product on Complex’s site, through its social accounts and within its slate of original shows. Complex could also receive a cut of the product’s sales in situations where it would share ownership of the products developed by Climate. Asked whether Complex will retain any ownership of those products, Hernandez said, “There will be opportunities for those discussions to be had.”

Complex has been working with other companies to develop products “on an ad hoc basis” and is formalizing that work through the creation of Climate, said Hernandez. This past summer Complex worked with PepsiCo’s Brisk to create a limited-edition drink designed by streetwear brand Carrots by Anwar Carrots and sold at 7-Eleven stores, said Hernandez. If people bought four cans, they gained access to an e-commerce site to purchase limited-edition apparel. In an apparent sign of the promotion’s popularity, the site crashed on the first day, he said. Complex has also worked with retailers Champs and Zen to produce separate digital video series with the companies.

Climate will be separate from the company’s division responsible for its product licensing agreements and will report to Hernandez.

Complex is in the process of interviewing candidates to lead Climate and expects to hire more employees to join the division over the next three to five months, said Hernandez. He declined to say how many people the company expects to hire for Climate because the number could increase depending on how much business it receives early on.

Complex Networks joins a growing list of media companies, including BuzzFeed and Clique Brands, that develop products for other companies. These companies aim to apply the audience insights they glean from the articles and videos they produce — and in Complex’s case, the events it hosts — to identify product details that would make people more likely to pay for one product over another.

Complex has established its product development bona fides with a line of hot sauces that it sells in connection to its popular talk show “Hot Ones,” which is being adapted into a game show to air on WarnerMedia’s TruTV network. On Oct. 17, the media company released its latest hot sauce, Last Dab XXX, and drove more than $500,000 worth of sales within 48 hours, according to Hunt.

Complex has also proven that it can help other companies sell their products to its audience. Once a year Complex hosts ComplexCon, a two-day event in Long Beach where companies like Adidas and Puma sell their wares to tens of thousands of streetwear aficionados. Last year, people spent $25 million buying sneakers, hoodies and other products from companies that hosted booths at ComplexCon; Complex does not take a cut of product sales.

This year Complex used ComplexCon to tout not only its ability to help brands push their products to its audience but also to now help them develop products for this customer base. On Nov. 2, the company hosted an upfront-style event at ComplexCon called NextFront to pitch its content and commerce business to more than 100 companies, 70% of which already do business with Complex, as well as agencies, vendors and platforms including TikTok, which had a group of employees in attendance. In addition to Climate, Complex announced a research product, Complex Collective. That product would give companies access to a panel of people who have opted in to provide feedback on anything from products to videos to Kanye West’s latest album, said Aaron Braxton, senior director of insights at Complex Networks. Complex Collective is working with Instagram on identifying youth trends, he said.

One agency exec who attended the NextFront event said they are interested in learning more about how Complex’s Climate division would be working with companies and their existing agencies. On stage during the event, Hernandez said that Complex is not trying to compete with traditional creative agencies’ or companies’ in-house talent.

Complex has been talking with companies that sponsor “Hot Ones” about co-developing products to sell in retail stores, said Hernandez. “There’s a really unique opportunity where we could potentially partner with brands longer term to think about, how do you engage this very powerful audience in a way that goes beyond just saying, ‘Hey, I’m going to sponsor this episode’? We know that audience survives past that episode,” he said.

The post Complex is branching into product development appeared first on Digiday.

How do you feel about the use of influencer marketing in travel?
Some people think the way to go is to work with travel influencers, but they tend to replicate the content that we as marketers and PR and communications professionals in the travel industry have already created. When we work with influencers outside the travel sphere, they tend to capture things we don’t have the budget or the ability to capture, like if the room service menu changes. Travel influencers tend to capture themselves in images in a very unimaginative way.

Is it effective?
I’ve not yet seen any anecdotal evidence of someone picking my hotel because a travel blogger told them to. But I have seen them do it because a fashion influencer has. I do think a lot of influencers work hard, but there are some where I’m just like, “Nope, I can’t work with you. You’re everything that’s wrong with Instagram. Good for you, you figured out how to make money, game the system or just look pretty.” Their images are self-serving.

Do you think the bubble will burst for influencer marketing soon?
Yes. I don’t know when, but it’s coming. Everyone was really besotted with a perfect life and doing it for the ‘gram and making sure your grid is perfect, and now there’s this pushback against the concept of doing things just to look pretty on social media. Younger people are using social media like TikTok where they don’t use as many filters, and it’s not about being perfect, it’s about creating things that are interesting — and video is more important than static images. The idea of beautiful people on Instagram is now passé. It’s the same way that Facebook is now for your parents and grandparents. In five or 10 years, it might be very passé to work with Instagram influencers.

What about TikTok?
We don’t look at TikTok as a marketing tool. It’s really for a younger audience, but I think it will eventually evolve, too. It’s already gone from 50% of lip-syncing memes to original content. We haven’t figured out how to use it as a marketing tool, but I hope it doesn’t evolve into a marketing tool. I hope it stays entertaining. Instagram used to be a lot more fun.

How have you changed how you do business with influencers?
I didn’t do contracts, but now I do. In the past two years, almost every influencer comes through with this promise: “I will post about your hotel and give you X amount of photos for your own use.” You can repurpose that content for your social media down the road. It’s a very transactional relationship. But you don’t know until it happens if it has any real impact.

We barter with them. While industries like beauty and fashion have figured out pay-for-play, because what we’re giving is worth so much, it’s difficult for us to pay. For the most part, we don’t pay for anything, but we will give that influencer an overnight stay, dining or spa treatments. I also put in the contracts that they can’t hide or delete static images from their grid just because it doesn’t match the style of their grid. Some influencers have asked me to fund a travel fee for a press trip. We definitely don’t pay those.

How has this changed your job over the past 20 years?
Influencer marketing has added a layer to my job that is exhausting. I have to make sure there are Instagrammable moments throughout everything, and that’s not just for influencers: it’s for regular people. It’s interesting to me that it‘s part of the lexicon. We have gotten to a point where we’re not enjoying the world we’re traveling in if we’re just traveling through a world of selfie sticks. I don’t blame influencers. It’s really all of us.

The post ‘It’s very transactional’: Confessions of a marketer on working with influencers appeared first on Digiday.

Gannett is applying a similar strategy to its Humankind video franchises, taking videos originally made for Facebook and rolling them up into linear video channels available on Roku and Tivo Plus. Gannett plans to run a similar version of this playbook later this year on three franchises it intends to launch, focused on entertainment (“Entertain This”), travel (“Tips and Trips”) and service (“Problem Solved”).

Gannett hasn’t yet decided whether to make an investment in long-form content franchises. But while the news publisher makes up its mind, it’s able to drive more revenue on those videos, either through revenue shares with video services or by selling the inventory as part of expansive packages that bundle print, digital and video together.

“It’s about getting the most out of the content we create,” said Kate Gutman, head of content ventures at Gannett. “There’s a lot of companies out there, like the cable and broadcast production companies and networks, that really can’t take advantage of this new AVOD [ad-supported video on demand] world.”

As their digital video businesses have matured, many publishers have become more focused on finding ways to monetize their content in multiple places. Some publishers, such as Bon Appétit, have focused on windowing strategies; others, such as Group Nine’s NowThis, have focused on re-editing and distributing shows across multiple platforms at once.

USA Today originally built a lot of its video audience using platforms, particularly Facebook. But it has made strides in diversifying away from them. While Facebook still drives the majority of Gannett’s platform video views — at least 70% of them in each of the past three months, according to Tubular Labs data — a major chunk of Gannett’s overall video views comes from owned and operated properties.

Almost all of the content published on USA Today and USA Today Network now features video of some kind, Gutman said, and of the 10 billion video views USA Today has driven over the course of 2019, less than half of them have come from Facebook. The USA Today Network has attracted an average of 40 million video viewers per month over the past three months, according to Comscore data, a 33% percent increase year over year.

But because a lot of that video is tied to news and sports, it has a shorter shelf-life than the feel-good fare originally built for Facebook. So it is packaged up for services such as Xumo, Roku and Fubo, which don’t mind that Gannett is a relative newcomer to the world of video.

“What the services are looking for are safe bets when they acquire content,” said Ned Sherman, a partner in the digital media and technology group at Manatt, Phelps & Phillips. “They want content that already has a fan base, already has data behind it that proves it will be a good bet.”

While some of Gannett’s OTT deals involve content licensing fees, they are mostly built around ad revenue-sharing agreements. Gannett’s team is allowed to sell its own ad inventory, which its sales team does by including its OTT ads in bigger packages that leverage the USA Today Network’s digital reach.

That’s partly a function of the size of the audiences USA Today reaches there. But it’s also about leaning into its existing strengths. “We don’t want to go up against CNN [selling digital video ads],” Gutman said. “That’s not a smart move for us. But when we’re being compared to other news providers in our set, we have this strong OTT offering, and it really is a great differentiating factor for us.”

Sherman said that the unprecedented appetite for video content is poised to continue for the next three to five years. As the ecosystem matures, Gutman said, she plans to act accordingly. “We need to be able to monetize this programming really well,” Sherman said. “I’m thinking that way versus ‘I want to make long-form programming in two years.’ This ecosystem is so dynamic.”

The post USA Today is repackaging video to create streaming series appeared first on Digiday.

“Political advertising in digital is an inherently problematic area,” said Joshua Lowcock, evp, chief digital and innovation officer at UM, adding because “digital is not regulated,” and there are “inconsistent decisions across multiple platforms” it can be a tough environment to navigate. “There is marketer concern. On behalf of clients, we’ve made representations directly to the key platforms about their perspectives. There are conversations going on, they’re going on behind closed doors.”

The exact worry of marketers may vary but, in general, the lack of consistency across platforms, lack of transparency into policy decisions and potential to have advertising appear next to virulent political content are among their chief concerns. That doesn’t mean marketers are pulling their budgets from platforms yet, but that conversations are happening among agencies, clients and platforms to address concerns about political advertising.

“So many of our clients do not want to appear next to political advertising,” said Barry Lowenthal, president of The Media Kitchen. That said, Lowenthal’s clients and other agency sources say that they haven’t been asked to pull spending on Facebook or other platforms with political advertising yet.

“When you talk to agencies and clients, it goes back to brand safety concerns for a lot of advertisers and agencies,” said Alison Pepper, svp of government relations for the 4A’s. “[Brands] don’t want their ads next to politically toxic advertising.”

The existence of political advertising on platforms exacerbates brand safety issues that the platforms have been overrun with in recent years. Now, advertisers are uneasy with the idea that their content could be next to incendiary political ads. Companies may then make decisions on where to advertise based on where political ads won’t be.

Currently, Facebook, Instagram, Google, YouTube and Snapchat accept political advertising. Now that Twitter will no longer allow political advertising, the platform joins LinkedIn, TikTok and Pinterest in rejecting those ad dollars. Social media is just one aspect of digital political advertising. Overall, digital spending among 2020 presidential hopefuls is now at $84.6 million, according to the Wesleyan Media Project. Kantar has predicted that $6 billion will be spent on political advertising for the 2020 election with 20% of that going to digital. It’s unclear how much of that is earmarked for platforms but it is likely a smaller piece of the pie. Revenue for platforms from political advertising is small — in 2018, Twitter made less than $3 million from political ads, and Facebook said that political ad revenue amounts to roughly 0.5% each year.

While marketers are concerned about political advertising on platforms, getting politics out of advertising will prove difficult especially when it comes to issue-based advertising. As more marketers have pushed for brand purpose in marketing, some of those have added political issues or cause-based marketing into the mix. If issue-based political advertising is out, are brands then unable to talk about those issues in their marketing? For example, last May direct-to-consumer female-founded brands like Thinx and Fur, among others, have used advertising to support abortion rights but it’s unclear if they could do so on platforms if issue-based political advertising is no longer available.

As Dorsey wrote in his tweets announcing the decision to stop allowing political advertising on Twitter, issue-based advertising ads another layer of complexity. “It’s a can of worms as to where to draw the line,” said Lowcock, adding that politically adjacent topics like energy or education could make it all the more difficult. “It’s a complicated category and there isn’t an agency out there without clients in energy, utilities, education, etc., and it potentially creates more confusion.”

According to Matthew Rednor, founder and CEO of Decoded Advertising, removing issues altogether becomes “problematic.” “Where do you draw the line? Oil companies can spend billions on advertising but people that support climate change can’t balance that message?” he asked.

Another issue with political advertising on platforms is that politicians are able to target their messages to niche interest groups. While targeting ads to groups is standard, and advertisers have used geographic groups for targeting messages via television, the targeting capabilities across platforms have become much more advanced in recent years. Those targeting capabilities have pushed marketers to spend more on digital platforms, as the ability to get a message in front of the right person at the right time helps potentially convert a sale is the end goal.

“If you’re launching a new soap brand you’re going to serve ads to your target audience,” said Laura O’Shaughnessy, CEO of SocialCode, adding that candidates should also be able to target their audiences. “The targeting capabilities are one thing, and there’s nothing wrong with them inherently. It’s how all marketing works.” 

While the ability to target specific interests and small groups on platforms has helped marketers, the ability to use those capabilities on the platforms for political advertising bring up more questions like how large the groups who see political ads should be and if there will be discriminatory practices used in who sees those ads, according to agency sources.

“It inflames the problem and increases the likelihood that lies will be accelerated,” said Lowenthal. “It used to be that I might target people who care about an issue but now targeting is being used to reach people who are more likely to believe a lie and that, to me, is a real problem.”

Pepper says questionable propaganda isn’t “new,” but “the degree to which it can spread is a relatively new phenomenon.” “We’re at this inflection point in this industry with platforms and micro-targeting,” she said. “We have to decide as a society where we want to be. “

The post The 2020 election ignites a new debate: Does political advertising belong on platforms? appeared first on Digiday.

James Del, who worked on the business side of Deadspin’s then-owner Gawker Media until 2015, recalls Deadspin’s business being mostly direct-sold ad placements that would fetch $6-$10 CPMs. An executive familiar with G/O Media’s strategy said that currently, direct sales are still bringing in CPMs above the $6 mark, which they expect will continue to increase; however, that portion of ad sales — which used to account for 95% to 100% of the brand’s ad business during Del’s tenure — is far lower now as that kind of display ad business has moved, for the most part, to programmatic.

Del estimates rates would drop to $2-$4 CPMs, and the exec we spoke with did confirm that these rates are lower, on par with industry averages. So while Deadspin’s audience is growing — its Comscore numbers are up nearly 50% year over year — it was lowering monetization abilities. Sports is a tough category for monetization. Del said Deadspin was always a “middle of the pack” property at Gawker, with Gizmodo and Lifehacker as the top breadwinners.

And while sports is a hard area to compete in, the exec said that Deadspin’s unique value proposition still remains with its ability to be the inverse of the major sports brands in covering more of the personalities within the industry as well as going further than immediate score reporting and game analysis. “We have a way wider palette than anyone else in the category — wider than ESPN,” they said.

“I would guess based on what I’m seeing and hearing that it seems as if they’re going for the lowest cost, easiest to execute revenue plays, so programmatic would be at the top of the list,” said Del.

The answer for G/O Media seemed to be to take steps to increase CPMs with video advertising. Deadspin does little original video content, so that leaves the “outstream” video ads of the type that Farmers was running — and igniting the ire of Deadspin’s edit team. The $23 CPM deal would be attractive for a property like Deadspin.

G/O Media now must rebuild the entire editorial team. There’s obviously no guarantee it will be able to attract the same loyal audience.

“As a company that spends money with them, the hope is that the quality of the journalism stays as good as it can be, and the traffic and consumer usage stay consistent,” said Harry Kargman, CEO and founder of mobile advertising products company Kargo. “But if the content goes stagnant, then its usage will go down.”

Barry Lowenthal, CEO of The Media Kitchen, said advertisers will be given pause by the upheaval.

“The first thing that media buyers are going to ask their sales staff is, ‘Why [is] edit staff leaving?’” said Lowenthal. “It’s never a good sign when the edit staff starts to depart on their own volition, especially when they depart in protest.” 

The post Ad buyers evaluate what remains of Deadspin appeared first on Digiday.

Across the European Union, for example, Twitter made money from just 21 political advertisers at the time of Dorsey’s decision, according to its transparency report, which revealed none of them bought ads during the campaign period for the EU parliamentary elections. The amount of money Twitter makes from politicians couldn’t be more than a rounding error. But the amount of goodwill the social network will garner from the move is going to be invaluable, particularly in light of Facebook’s current predicament.

Dorsey’s decision came shortly before Facebook’s latest earnings call, during which CEO Mark Zuckerberg felt it necessary to clarify his company’s much-maligned stance on political ads. It was just days after he had been grilled by lawmakers on Capitol Hill over concerns the social network is being used to spread misinformation and sow political division.

Banning political ads would ease those pressures on Facebook at no real financial cost either. Ahead of the U.K. general election in December investment in political campaigning is predicted to dwarf the £3 million ($3.8 million) that was spent during the last election campaign in 2017. Indeed, looking at next year’s forecasts, when Facebook is set to be a key marketing platform in the presidential election in the U.S., Zuckerberg said ads from politicians would be less than 0.5% of the social network’s total ad revenue next year. On Oct. 30. Facebook finally succumbed to paying its paltry £500,000 ($647,000) by U.K. data watchdog the Information Commissioner’s Office over Cambridge Analytica’s misuse of Facebook user data to sway voters in 2016. 

Yet Facebook believes political ads are worth the headache. Both publicly and privately execs from Facebook have repeatedly ruled out a ban on political ads, pointing out that it makes more sense to introduce greater transparency into those promotions than to impose a complete blackout on them.

“I don’t believe these businesses have banned political ads for the greater good of society as their primary motivation,” said Nigel Gwilliam, head of digital at U.K. agency trade body the Institute of Practitioners in Advertising. “You can imagine Dorsey, having watched the knots other tech leaders were tied up in, in front of the U.S. senators recently, not wanting to be in that position.”

What Zuckerberg didn’t address on the call is the existential impact a ban on political ads could have on Facebook’s wider business model.

Twitter’s ban of political ads, alongside similar moves from TikTok, Pinterest and LinkedIn, backs Facebook into a corner that further paints it as the big, money-hungry monopoly putting profit before people. And while the ban won’t change the fact that hate speech is still out there — Twitter is still used by U.S. President Donald Trump to share divisive messages with the tens of millions of people who follow him — it does raise an interesting point over how seriously the platforms take their role in spreading democracy or disinformation. That’s a powerful branding tool to be harnessed by social networks hellbent on convincing the world they want to mitigate the negative impact they can have on society.

There’s a perceived wisdom in marketing that people want their favorite companies to use their power and influence to do good. A ban on political ads subscribes to this theory and could attract new people to those social networks that have taken a stance.

“The easy option for Twitter was to ban all political ads, while Facebook has taken a different approach,” said Yuval Ben-Itzhak, CEO at Socialbakers. “We feel that Twitter’s priority would have either been investment in policing political ads or in continuing to invest in their other business priorities. They have chosen to focus on investing in their other business priorities.”

Those other business priorities revolve around Twitter’s image. Dorsey and his team have worked hard over the last year to make the micro-blogging site a safe, more enjoyable place for users. It’s the same for TikTok, which is marketing itself hard currently with a campaign in the U.K. to promote its efforts to keep users safe. When TikTok announced it had banned political ads on its app last month, it was more a reinforcement of an existing policy it hadn’t openly discussed at a time when it was under fire for censoring topics like Hong Kong’s protests and pro-LGBT content.

“As a step forward for discussing and tackling this issue, Twitter’s voluntary action is positive,” said Samir Patel, chief innovation strategist at Blue State, a digital agency that worked on the 2008 and 2011 presidential campaigns for President Barack Obama. “But where is the government and true reform in all this? We need a Digital Bill of Rights for Democracy.”

The post Political ads take center stage in battle between social networks appeared first on Digiday.