Month: November 2019

Our latest Digiday+ Research report, done with our sister site, Modern Retail, surveyed brands, retailers and agencies to look at the state of retail media. The key hits:

1. Retail media is growing, and retailers, as well as the agencies who work with them, say it is growing in importance.
2.  Amazon is important, but still does lag behind Google, Facebook and even Instagram on pure “importance.”
3. When it comes to Amazon, retailers are largely very satisfied with its ability to drive revenue. They’re less happy with its data sharing and dashboard services.
4. Alternatives are the ones to watch for: More than half of agencies that work with retailers think Kroger, Walmart and Target are important retail media channels for them.

Retail media is growing.
Retail media’s impact and popularity is growing in the industry. More and more brands and retailers are moving spending over to retail media websites — mostly Amazon — in search of more direct, lower-funnel conversion and a supposed “total wallet” perspective that these platforms provide.

Retail media is the third-most-popular and important media channel for respondents across the board, including retailers, brands and agencies.

Digiday and Modern Retail surveyed retailers, brands and agencies to figure out how they were using various channels, how they used retail advertising, and their thoughts on Amazon.

Among retailers, 42% of them consider “retailer websites” important or very important. For brands, that number creeps up to 53%. And for agencies — who may actually be the most important decisionmakers on this since they do control so much of the spending — that number is almost 60% for agencies that work with retail and 85% for anyone doing retail marketing.

Amazon isn’t the most important media channel — but it’s certainly getting up there.
Among retail media, Amazon’s prowess as a retail media channel is growing. Out of 114 respondents, almost 36% said Amazon is important to them as a retail media channel.

In comparison, 92% of respondents said Google was important, while 91% said Instagram was important.

We broke it down further to also ask respondents what channel was most important to them when it came to their digital marketing strategy. The vast majority of respondents said they would prioritize Google, followed by Facebook and Instagram, as their most important channels.

Frank Kochenash, the president at Wunderman Thompson Commerce, said that brands have definitely arrived at this point. “The perception and observation I have is that increasingly Amazon as a media opportunity is looked at comparably with Google and Facebook, with just a different dimension closeness to retail and point of sale. As pure media, or advertising, Amazon is not quite as big as Google or Facebook is but it seems like it’s in the same conversation.”

Amazon is in a unique place when it comes to advertising or media. It’s already the biggest e-commerce marketplace in the world, commanding the lion’s share of the market.

“Product discovery is an uphill battle on Amazon,” said James Thomson, a partner at Amazon management and consulting firm BuyBox Experts. “You have to have advertising and a larger marketing strategy in place if you want consumers to find your products, because if you’re not on the first page of organic search results, you’re going to struggle.”

That means that if you’re selling on Amazon, you’re probably best off also advertising on it — at least, that’s what Amazon will want you to do.

What people use Amazon for is different
For retailers and brands, Instagram is the most effective platform for brand awareness. About 71% of retailers and a whopping 86% of brands said that Instagram is the most effective channel for brand awareness.

Instagram’s followed relatively closely by Facebook. Amazon doesn’t rank very high, lagging behind both of those as well as Google for brand awareness.

For “community,” Instagram and Facebook unsurprisingly come in very high. Pinterest also ranks high, with almost 30% of retailers saying that it’s effective for creating community and 22% of brands.

But where Amazon gets the most points is for driving sales. More than half of all consumer brands — and 30% of retailers — said it’s the most effective at driving sales. (Google is the only one that does better.)

And again, for agencies that do retail marketing, it’s Amazon.

Retailers love Amazon for ROI — but nothing beats search.
Under 35% of people said Facebook and Amazon have good or very good ROI, while 38% of respondents said the same of Instagram.

But the results get interesting when you look at retailers: 80% of them said Amazon has good, or very good return on investment when it comes to their marketing spending, far more than Google’s 66% and Facebook and Instagram’s, 35% each.

Retailers and brands both know Amazon is great for sales, but not great as a partner.
Only 14% of retailers think it’s trustworthy. And 51% of them also think it puts its own interests ahead of sellers.

It’s a typical catch-22 among brands. Amazon is a great place for retailers and brands to be able to reach new people (37% of respondents said the company does help them acquire new customers) while at the same time, the marketplace is also a retailer of its own, pushing its own private-label products and being able to engineer search results in a way that’ll benefit its own bottom-line.

There’ve been plenty of indications that it might. Over the past six months, Amazon has been accused of pushing private-label brands over sellers’ products, especially via more noticeable and visible promotions. And because Amazon has so much data on what sells through its platform, it’s able to quickly understand what sells and what doesn’t, and ramp up accordingly. Trust with sellers is also a concern for a multitude of other reasons. Amazon can in many ways seem to retailers like a black box. Sellers told Modern Retail that sometimes, working with the company can be confusing — algorithms aren’t clear, it’s sometimes hard to get straight answers — and there is the ever-present fear that at any point, Amazon may change the rules on you.

The other concern for brands and retailers who sell on Amazon is how sophisticated the platform is. The company has been making some improvements in this area, with new attribution tools that help in figuring out if advertising off-site is translating to sales on Amazon, as well as new offerings like 14-day lookback windows, and improved dashboards. Still, only 8% of brands and retailers say they’re satisfied with seller services or Amazon dashboards.

“There has been talk for quite some time that Amazon’s focus on media will result in a triopoly for ad dollars between Google, Facebook and themselves. It’s clearly happening based on everything that we are hearing and reading in the industry, however, their features and solutions that they offer have not been as competitive to the top two platforms,” said Sherry Smith, CEO of Triad Retail.

Other retail platforms have an opportunity.
Nobody likes a monopoly. Retailers and brands know Amazon is a juggernaut, and it works, for both sales and advertising. But at the same time, other retailer sites including Walmart, Target and Kroger, have made efforts to beef up what they’re doing in terms of becoming more sophisticated media platforms.

Brands are eager for alternatives.

Fifty-four percent of agencies that do retail marketing for brands say non-Amazon retail media is important to their marketing strategy. That number dips to 16% for retailers, but it’s not exactly scraping the bottom of the barrel.

“Kroger, Walmart and Target have a real opportunity to win in retail media as they offer true omnichannel solutions for brands. CPG brands make a significant investment in retail media channels, however, the reality is that close to 95% of category purchases are still happening in-store. Retailers are beefing up their data capabilities to meet the demands of their suppliers; however the biggest challenge is the learning curve on the supplier side to build the internal expertise to operate all these different platforms — each having their own unique nuances that require the technical expertise to deliver the results that warrant the shift in media investments towards retail,” said Smith.

In some ways, said Kochenash of Wunderman Thomson, it’s a bit of a negotiation tactic. “There is a lot of interest in other media retail platforms. When you ask brands about this, part of their answer is part of they’re negotiating vis a vis Amazon,” said Kochenash. “I’m very interested in Walmart or Kroger. I do think there is increased interest in media offerings of other retailers.”

The post Digiday Research: Marketers are increasingly advertising on retail sites — and not just Amazon appeared first on Digiday.

Indeed, plans are underway to ensure that BritBox doesn’t compete with the distribution channels for ITV and the BBC, with both broadcasters pulling content from Netflix and Amazon. Currently, 5% to 10% of Netflix’s and Amazon’s existing TV shows come from the British broadcasters, according to Ampere Analysis. Keeping content on those platforms would have increased the chances of a viewer finding the same shows in various places, at different prices.

“We’re committed to our licensing agreement with content that sits on other providers like Netflix, but over time we’re excited to bring that content to BritBox where it will be the principal place for us to curate the best of British content,” said Amy Townsend, director of consumer marketing at BritBox. “We won’t be competing with Netflix. We have content that’s unique and can hold its own around the world.”

In fact, the marketing strategy behind the launch campaign pitches BritBox as a cheaper, additional streaming service for people who already subscribe to one. The streaming giants have acted as catalysts for viewers subscribing to multiple players, particularly in Europe where the average streaming home in the U.K. and Germany last year had two services, one of which is Netflix, according to Ampere Analysis.

“In reality, consumers now only choose two out of three streaming services, but this will become three out of six or seven with all the upcoming launches,” said Daniel Gadher, research manager at Ampere Analysis.

Viewers want premium content from multiple providers, but they don’t want to have to sign into multiple accounts to access them. And yet that confusion is set to intensify as the streaming market becomes even more crowded. Alongside the established platforms of Netflix, Amazon and Now TV, alternatives from major U.S. studios such as Disney with Disney+ and Comcast and NBCUnileversal’s Peacock are all set to launch in the U.K. within the next six months. Inevitably, there will be casualties as people start to look for fewer platforms. There are already early signs of consolidation in the market as operators like Apple TV and Amazon’s subscription hub start to aggregate content and streaming services.

For BritBox to come through all of the competition unscathed, it will hope the strength and depth of its local content offering can drive subscriber growth. BritBox does not have the international footprint and content that its larger rivals have. Nor does it have the big budgets to spend on content, which is why so much emphasis is on the archive content it has. Negotiations are underway for several exclusive shows to BritBox, though no deals have been finalized, said Townsend. Furthermore, the positioning of BritBox may prove challenging. Currently, the streaming catch-up services from its stakeholders — ITV, BBC, Channel 4 and Channel 5 — all have established brands in the U.K., and more importantly, show some of the same content for free.

“With the launch of BritBox, Britain’s ‘traditional’ broadcasters enter the VOD market armed with an affordable price point, and a combination of exclusive new and classic shows that appeal to multiple generations,” said Luke Bozeat, chief operating officer at MediaCom U.K. “It’s a necessary shift for all four U.K. broadcasters that have arguably failed to reach younger audiences who consume content on phones, laptops and tablets; Ofcom recently stated that the BBC needs to do “much more” to both attract and retain younger viewers.”

The optimism among BritBox execs is in part thanks to the success of the service in the U.S. Since it launched in 2017, the service has attracted more than half a million subscribers. Despite the success, the strategy to grow the service in the U.K. is different. In the U.S., BritBox gained popularity among viewers 45 years old and older, who account for more than 60% of the 650,000 subscribers, it reported in the summer. It’s a broader age range in the U.K. where Townsend said ads would target viewers aged between 25 and 54 years old.

“The audience we’re targeting already subscribe to [streaming] services and understand the category,” said Townsend. “They’re comfortable paying for extra curated content and, in particular, British content.”

The post How BritBox is positioning itself as an add-on to Netflix in the UK appeared first on Digiday.

Huffington and the Thrive Global team declined to offer more detailed financials but she said the company has a “clear path to profitability.” Thrive Global’s headcount has grown 61% year over year to more than 100 employees across five global offices. Thrive has more than 80 customers, including Bank of America, Microsoft and Procter & Gamble, the company said.

Alongside discussing Thrive’s strategy, Huffington also spoke about the wider media landscape. “The old model is broken,” Huffington said, adding that she predicts companies will use “unusual diversification attempts” amid a backdrop of consolidation and layoffs. Verizon Media, the owner of HuffPost — which The Huffington Post rebranded to in 2017 — is reportedly exploring a possible sale of the asset. “I think Verizon has been a very good and supportive owner,” Huffington said.

The conversation has been condensed and lightly edited.

You have several different lines of business now. How is revenue split between your different divisions? 
Three years ago, most of the revenue started coming from our corporate clients and doing workshops and what we call “28-day challenges” to improve an aspect of employees’ behavior, like sleep, relationship with technology, gratitude, mindfulness. We used all the data we collected and used the workshops like a laboratory to build a behavior-change product. It’s built to be a platform with a lot of backend APIs so companies can plug in anything else they love [that helps] employees de-stress, avoid burnout and be more productive. We are going from the bulk of revenue being workshops to the bulk of the revenue being the platform. The goal is to scale to hundreds of millions of people.

How does the revenue model work?
It is totally SaaS, with per-user, per-month [pricing] and the live workshops being the icing on the cake. We help [clients] take what they’re doing for their employees to use it as a marketing tool, both for recruitment, retention and just generally a celebration of what the company’s doing. For example, we’ve launched an entire section on our media platform with Deloitte and Jen Fisher who is their U.S. chief well-being officer: She’s now our work-life integration editor-at-large.

How much has the actual business grown over the past three years?
We have demonstrated to our investors, both original and new, that we have a clear road map to profitability and growth. We are growing dramatically year by year. We are looking to double revenue in 2020, and that’s the road map against which we are hiring. We have dramatically expanded our product and engineering team.

Is e-commerce still a business line?
No, that was a decision we made to completely discontinue any e-commerce because we wanted to focus on the behavior-change tech product. We see e-commerce becoming part of the company in the next two to three years. But definitely not now. The only product we kept is our phone bed. We sell it on Amazon at cost, it’s not really to make a profit. It’s to encourage people through this little ritual to take this very important micro-step of not sleeping with a phone near their bed.

There has been a huge wave of consolidation, layoffs and lots of difficulty in the [media] sector. What’s your take on the way things are going in the media landscape, and which companies do you think will win?
I think over the next couple of years we are going to see very unusual diversification attempts because it’s clear that the old model is broken. That’s why we brought into Thrive the model of being a platform where people can find community around topics. We now have 40,000 people writing on Thrive, which was the HuffPost model. When I left HuffPost in 2016, which was 11 years after I founded it, we had 100,000 contributors.

User-generated content comes with its risks and needs vetting and monitoring. Is that one of the reasons why you haven’t gone down [an open-marketplace] advertising route with Thrive so far?
This is not part of our road map. We are never going to go that route.

One of the great things about SaaS companies is that they are valued at far nicer multiples than the media business and, I imagine, wellness businesses. Have you set out any key goals or targets for going public?
No, we haven’t yet. We are in a very good place in terms of cash-at-hand and revenue, so when we want to accelerate growth by raising a Series C [round of funding], then we are going to look at whether we do a IPO or strategic sale. At the moment, we are very focused on growth, with a clear path to profitability. We are on track actually to exceed our road map for growth and profitability.

You obviously still follow HuffPost very closely. How close are you still to developments there, given that Verizon is reportedly exploring a sale of the asset? Do you feel that HuffPost might be more valuable outside of it? What would you do if you were still in charge there?
I think Verizon has been a very good and supportive owner, and I’ve talked to Lydia [Polgreen, HuffPost editor-in-chief] and that’s what she said as well. I don’t know anything about what they want to do in the future.

The post Arianna Huffington sees a ‘broken’ media model appeared first on Digiday.

Translating the technical issues 
“As an industry, we’re guilty of over-complicating things massively,” says Matt Simpson, EMEA joint Chief Executive Officer, Investment, at Omnicom. “Frequently, we don’t show empathy to our clients, who are overworked, having to spend time facing incredibly technical issues. Fundamentally, they want the ability to buy good inventory that performs well and to understand their consumers.”

“Yet we quite often bamboozle them with lots of technical stuff,” adds Simpson. “I spend loads of time on GDPR, privacy and the technical issues that are coming up around identity, but [clients] just want to know they can trust the channel.”

Consumer concerns around privacy has resulted in many browsers and platforms, including Apple, Google, Facebook and Firefox, updating their privacy settings and closing loopholes in their anti-tracking algorithms. The buy-side are looking to first-party data to alleviate the reliance on diminishing third-party cookies.

Anna Forbes, UK general manager at The Trade Desk, says their clients want to see how it works with Facebook and Google, because they provide “a one-stop solution and simplicity to be able to do audience targeting, sell their product and to package the content in the right way.” Forbes also says they’re working a lot more with clients on their first-party data strategies to be able to overcome the challenges around third-party cookie blocking.

This echoes Celine Saturnino, Chief Commercial Officer at Total Media’s view that “a lot of the challenges are around concerns about how we’re going to use their data and how we’re going to protect them from ICO legislation.”

The nuances of transparency
For brands, transparency can differ widely, from having granular data on how their ads are placed to knowing where their ads will appear. Meeting brands’ expectations can be tricky to navigate when there are many players advising them on what they can and can’t see and what they should be able to see.

“Most of my advertisers have got various companies and areas saying, ‘we need to do this and you need to pay us to do that’,” says Simpson at Omnicom. “So whether the client actually wants to see the load level files and transactions is irrelevant. They want somebody to look at them because somebody told them that they need to look at them.”

“Transparency is just trust,” adds Simpson. “I want for our clients to trust us, and I recognize that to gain trust we have to get over some of those barriers.”

Fern Potter, managing director, Neo Media World, says blockchain is a “great example” of when trust and transparency is not communicated in the best way. She says: “There’s a lot of advertisers going through a digital ledger and ultimately using blockchain, and it’s a problem when we get that quite late in the day, as a tech partner, because ultimately it’s just about what you’re trying to uncover. And we don’t necessarily get involved early on enough in the discussion to say, ‘well, actually, that’s just another fee that you’re going to end up paying’.”

Potter believes this is due to not having enough people at agency side “that can defend why blockchain isn’t necessarily the best route to having full transparency.”

From an agency perspective, Celine at Total Media says: “We’re feeling the pressures much more substantially from a contractual perspective to take responsibility for our partners. We are having to audit our partners a lot more closely than we’ve ever done before, a lot more questions and, quite frankly, the answers coming back are not good enough and they’re not transparent enough.”

This is part three of a three-part series, compiled from conversations at a buy-side panel at Unruly’s ‘Trust Talks,’ which aims to put the people into programmatic took place in London in October 2019. The panel was moderated by Lindsay Rowntree, head of content at Exchange Wire.  

The post “Transparency is just trust”: How buyers are navigating a changing programmatic landscape appeared first on Digiday.