Month: November 2019

As different as the acquired businesses are to one another, none of them can be described as a core part of an ad tech or martech stack — i.e., a demand-side platform, an ad server, a content marketing platform or search engine optimization tools. None of those types of businesses are easy to manage. Agencies and publishers have tried to make those deals work in the past and struggled to varying degrees. When mobile phone operator Three kicked off a search to acquire a DSP in the first quarter of the year, for example, the procurement process quickly ground to a halt, said one consultant with knowledge of the plan on condition of anonymity. With the latest wave of acquisitions, however, advertisers aren’t trying to shoehorn sprawling ad businesses that weren’t developed with them in mind. Instead, they’re eyeing smaller but arguably more strategic vendors that can turbocharge specific objectives.

“We’re not talking about premium ad tech and martech businesses that are attracting the interest from advertisers,” said Tristan Rice, partner at M&A advisory SI Partners.

The motivations for these deals aren’t too dissimilar to why advertisers have bought agencies, built their own technology and hired internal specialists over the years. Data-driven personalization is a common thread that draws together many of the deals that have been completed by brands. Owning those types of companies directly could save time and money while also provide greater control over results.

Take Walmart’s acquisition of Polymorph Labs and McDonald’s deal for Dynamic Yield, for example. Walmart is able to serve highly targeted ads, and McDonald’s can offer diners individually tailored menus. The idea of using data and technology to enable a better customer experience and ultimately drive higher conversion rates is a key factor in many of these deals.

Growing interest in ad tech and martech from advertisers is viewed as something of a lifeboat for entrepreneurs worried they weren’t going to see a payday for their businesses, which provide solutions to specific problems rather than the full-scale propositions of larger players in the ad tech and martech space. For a start, the companies that have caught the eye of advertisers are valued on the tech solutions needed rather than the strength of their financial models. The likes of Dynamic Yield are smaller vendors that haven’t been able to grow at the same rate as larger, more traditional ad tech and martech players have. The valuations between the two types of ad tech and martech businesses are worlds apart. McDonald’s bought Dynamic Yield for $300 million (£234 million), whereas AT&T acquired ad tech vendor AppNexus for $1.6 billion (£1.3 billion, for example).

“Brands and retailers at risk of being disintermediated by Google, Amazon, Facebook and Apple are actively fighting back,” said Julie Langley, partner at M&A advisory firm Results International. “We will undoubtedly see a lot of interest in tech businesses that can help physical retailers bridge the gap, and turn physical stores into a positive as part of their broader digital transformation.”

Like the McDonald’s deal, Mastercard’s move for SessionM earlier this month was motivated by how much data, targeting expertise and measurement sophistication it could bring to the financial firm, specifically its branded credit card loyalty programs. In the case of Nike, it doesn’t take that much of a leap to expect further acquisitions in both ad tech and martech when former eBay CEO John Donahoe, who is also the CEO of cloud computing company ServiceNow, takes over the reins in January 2020.

“Large brands, in particular, want to own elements of their tech stack,” said Nick King, founder of consultancy Canton Marketing Solutions. “However, they are wisely not trying to buy or build what I call the foundation stones of ad tech, as off-the-shelf solutions are programmable to a high enough level. “The opportunity sits within data and personalization tech as the needs are often so unique. Given the time of building from the ground up, acquisitions are a very quick way to get ahead of the completion.”

While these sorts of advertiser-led acquisitions initially caught some observers in advertising by surprise, they’re starting to make a lot more sense.

“In an era where tech-enabled marketing is rapidly allowing marketing functions to move back in-house, it’s not surprising to see some of the world’s most powerful brands with massive proprietary first-person data assets, seeking to build the value of that data and drive greater engagement and utility from it,” said Jim Houghton, partner at M&A advisers Waypoint Partners.

The observation runs counter to the narrative behind M&A activity in ad tech and martech over the last two years. It was more about the numbers. But none of the advertiser-led acquisitions have been driven by the size of their EBITDA or the liquidity of its cash flow in the way they were for venture capital investors. The shift from venture capital to advertiser-led deals means both the size of the fees and how they’re structured are unlikely to be anything like what ad tech vendors and martech entrepreneurs have been exposed to in the past.

Still, the flurry of activity makes up a small proportion of the number of M&A deals emerging in the ad tech and martech sectors now. Private equity investors are still the most active investors. But advertiser-led acquisitions will accelerate over the coming months, said Houghton as vendors focused on data-driven targeting and customer experience continue to be key targets for advertisers.

The post Advertisers emerge as buyers for ad tech appeared first on Digiday.

“There was the novelty effect of Flash Briefings that was there at the beginning, and now it’s table stakes,” said Ahmed Bouzid, CEO of Witlingo, a company that helps businesses publish and manage their voice content across multiple platforms. “The value of Flash Briefings for big publishers isn’t as big as it is for someone trying to break in and increase their audience.”

Some big publishers say they are still seeing growth in audience numbers from Amazon Flash Briefings, however.

“We’ve seen great pick up for the USA Today Flash Briefing from our audience,” said Shannon Rae Green, podcasts/voice editor for USA Today. “The numbers continue to jump; recently, we saw an 11% month-over-month growth rate. Overall, these numbers are modest compared to other more established platforms, but our traffic confirms that it’s a major growth area for us.”

Not surprisingly, Amazon-owned The Washington Post is also seeing a rise in listeners. Jessica Stahl, The Post’s director of audio, said, “We’ve seen listenership steadily increase over time and found a loyal audience of users who listen to our flagship podcast, Post Reports, on Amazon Echo.” The Post currently has five Alexa skills, four of which are Flash Briefings, and it just added one focused on the Trump impeachment inquiry.

Interestingly, the reviews for USA Today’s Flash Briefing skew negative, not for the content, but for the fact that most subscribers say the briefing isn’t updated regularly enough. USA Today did not respond to Digiday’s inquiries about the cause of those problems, to confirm if it’s related to a technical glitch or because the briefings are not being updated regularly.

However, Green said USA Today continues to publish briefings because that’s what the publisher’s audience wants. “We want to meet people where they are and, at times, teach our users how to find us on emerging platforms like Alexa.” She added, “This keeps us connected with our existing audiences and allows us to introduce ourselves to new audiences. This is also important as we continue to diversify our revenue. Equally importantly, we’re learning about a new platform and developing new competencies across our newsroom, product and business teams.”

Discovery in Amazon Flash Briefings remains a big challenge for smaller publishers, however. Content creator Daniel Hill of Daniel Hill Media made sure he received Facebook’s approval to use Instagram in the title of his Flash Briefing, The Instagram Stories, which discusses social media. Since launching it 11 months ago, he’s amassed 22,000 subscribers and on average, 800 to 1,000 people listen daily.

“If I called it the ‘Daniel Hill Morning Minute,’ no one would ever find me,” he said. “That’s why I included Instagram in the title. I positioned myself initially that way to take advantage of that traction.”

As for monetizing Flash Briefings, that’s something many are still exploring. Hill said he’s been approached by a number of direct-to-consumer brands, like Quip, about advertising on his Flash Briefing, but he hasn’t accepted any offers because none have aligned with the content of his briefing just yet.

The post After an early rush to Amazon Alexa, publishers are less enthusiastic appeared first on Digiday.

“Our strategy over the last two years was drilling down into what people were searching for,” said Saltz, who continued that the focus of Delish’s digital growth strategy is now on search. “We didn’t move away from posting to Facebook, but we balanced out the spectacle with key information.”

Saltz said that the editorial strategy changed to incorporate content that was specifically tailored to answering keyword searches and inquires. For example, Delish noted that readers who come to the site and stay the longest tend to be those looking for informational basic cooking guides, so instead of creating short videos that would cover key search terms, the content strategy grew to include longer instructional videos, three to five minutes in length, aimed at satisfying Google inquiries like “how to cook bacon” or “how to cook rice.”

She said that now, rather than having 80% to 90% of its video content be digestible videos suited for social media with longer-form video taking up the other 10% — as was the case two years ago — the divide is now more like 60-40.

As for its social strategy, the number of posts per month on Delish’s Facebook page has decreased year over year as of October by nearly 25%, according to CrowdTangle, and video views on Facebook also decreased by almost 40% in that same period. Meanwhile, the number of posts on Delish’s Instagram has increased by 23% year over year, though video views have fallen nearly 30%. All that said, Delish’s Instagram followers have grown by over 100% year over year, currently hovering at 1.9 million.

The strategy is paying off. Delish has nearly doubled its audience over the past two years, hitting a record 41 million unique visitors in September, according to Hearst. That same month, search contributed 49% of its referral traffic, and in October, it rose to make up 54% of traffic. And while these numbers fluctuate, according to SimilarWeb, referral traffic from search, in general, is up year over year for the site. As of September, search contributed 45% more traffic than it did the previous year, and on desktop, it was up almost 14% year over year.

“SEO takes a bit longer to garner that audience there,” said Saltz. “The strategies that we implemented last year or two years ago are starting to build momentum now. When we [relaunched] four years ago, we had such a hard hill to climb since our competitors had all been established [on search].”

Saltz thinks that having less traffic coming from social is a good thing, generally, but notes that these numbers tend to ebb and flow throughout the year.

“The pendulum will likely swing in March,” said Saltz, adding that, after the holiday season, people’s interests tend to move from learning new recipes to food news and restaurant launches. Saltz said that search traffic isn’t coming in all from recipes, but food news tends to bring in a decent amount of clicks too.

According to SimilarWeb, search was a leading traffic source for many food publications on desktop in September, including Bon Appétit, which had close to 59% of its traffic coming in from search, Epicurious, which saw over 74%, and Allrecipes, which was over 72%. 

“Food sites are driven by advertising, so they don’t care about return visitors necessarily,” said Ava Seave, principal at media consulting firm Quantum Media. “For the content that [Delish has], it makes sense that you go for mass than for repeat.”

The post How Delish nearly doubled its site traffic by focusing on search appeared first on Digiday.

Apple’s recent update pointed to the “continued abuse” of companies using link decoration as a workaround to track people in response to earlier ITP updates. As part of the update, Apple thwarted link decoration use by putting a seven-day limit on all non-cookie storage data, like local storage — a type of web storage that allows sites to store data directly in the browser typically with no expiration date. Data is also deleted if the user is navigated from a domain classified with cross-site tracking capabilities.

“The more Safari traffic you have coming to your website, the more you would be impacted by the changes,” said Adriana Tailor, head of data and insight at TI Media. “Beyond CPMs, which everyone agrees has a lower value for Safari inventory when compared with Chrome [around 30% lower], the biggest impact will be for agencies and advertisers to report performance.”

Each release of Apple’s ITP update has led to some drop in publisher CPMs as more identifying data on Safari audiences is stripped out. With Apple’s crackdown on link decoration specifically, publishers have noted that their analytics tools aren’t working as they would expect, said Joe Root, co-founder of data platform Permutive, which offers alternatives to third-party cookies. He has previously said that the platform is unaffected by the ITP updates.

“Facebook IDs could be getting recycled faster,” said Root. “After seven days, they could count as a new user when they aren’t.” For publishers, for now, this is more annoying than really damaging. But the direction of travel toward a data-privacy first advertising ecosystem is clear. 

In the long term, for publishers making use of their first-party data, it’s an opportunity for them to take back more control of CPM prices and encourage advertisers to buy against that data, added Root.

“ITP is the environment publishers will flourish the most in. It puts them back in control,” he said. “In this update, Apple is making a request for publishers to help them clean up the web.” Publishers and marketers can strip out link decoration so they don’t fall foul of Apple’s increasingly restrictive privacy terms. For publishers, this is a fairly low lift.

Subscription publishers and those with scaled authenticated-logins are in the lead with how they are flexing their first-party data strategies. The issue with the latter is getting login alliances to scale when they’re met with headwinds like working with competitors, configuring technical issues and generating enough interest from buyers.

Vendors who aren’t able to pivot quickly enough to respond to Apple’s changes will struggle. The number of companies offering alternatives to third-party cookies continues to grow, ratcheting up the game of cat and mouse. But ITP 2.3 also appears to put Facebook, which uses link decoration and is likely classified as a tracking domain, in the firing line.

“This version looks like going after Facebook,” said Root, adding that in recent earnings calls Facebook referenced that it is finding it increasingly difficult to target Apple audiences. “There could be some downstream impact on the platform.”

For context, the Safari audience impacted by ITP 2.3 is still going to be a slice of publishers’ Safari traffic, which in turn can be between 30% and 40% of traffic. But Apple isn’t done killing off cross-domain tracking, and, increasingly, industry onlookers fear Google’s Chrome browser, which has been flirting with third-party cookie crackdown, is ramping up its efforts.

For now, this sting from ITP 2.3 isn’t as bad as earlier updates. “A seven-day expiry on this type of data [using local storage] is much better than the one-day expiry that first-party cookies get from the same process,” said Tailor. “However, it’s impossible to rule out changes to this expiry date. Future ITP updates may put a one-day expiry date on non-cookie storage.”

The post Impacts of Apple’s latest privacy update thwarting ‘link decoration’ appeared first on Digiday.

“On Oct. 25, we experienced a data logging issue that caused a temporary outage recording organic video view metrics. The issue did not impact ad breaks revenue, distribution, impressions, engagement, paid metrics, Instagram metrics or Ads Manager metrics. We know our partners depend on accurate reporting, we take this very seriously, and our teams are working to ensure this doesn’t happen again,” said Jeff Birkeland, head of creator and publisher experience at Facebook, in an emailed statement.

The immediate impact of the outage is considered to be minimal, according to publishers, creators and agency executives. Publishers and creators did not lose revenue as a result of the outage. Meanwhile, marketers are conditioned to have all but given up on getting organic reach on Facebook, so a couple days’ worth of unmeasured views is unlikely to amount to much of an impact on overall organic view counts, according to multiple agency execs.

However, considering that the outage lasted for two-plus days, there could be longer-term, indirect effects on how companies’ and creators’ video performance is judged. Additionally, the outage marks the latest in a series of technical issues with Facebook’s video platform that contribute to concerns about its reliability. “I saw that message [notifying people of the measurement outage] and laughed since it seems like it’s been buggy for months,” said one creator.

Evaluating the organic performance of any show episodes or branded video campaigns that debuted around the time of the outage — which coincided with the final weekend before Halloween — would need to take into account that reporting gap. That would also be the case for any evaluations of organic Facebook video view counts for the entire month of October and any comparisons made with previous months.

Since Facebook is not able to recover the uncounted organic views, there’s no way to know how many organic video views went uncounted, but companies can try to estimate views based on past performance in order to account for the missing view numbers. In a previous article published by Digiday, First Media president Sharon Rechter claimed that the publisher effectively lost more than 100 million organic views on Facebook in October because of the social network’s technical glitches. As of press time, Rechter had not responded to a later email asking whether the Oct. 25-28 outage was what she had referred to.

The error adds to a general unease with platform-provided measurements, particularly among marketers. “Marketers make decisions based on expected outcomes, and if they can’t trust the data surrounding those outcomes implicitly, it certainly invites a new layer of scrutiny,” said an agency exec.

Facebook’s video platform, in particular, has cultivated a reputation for being error-prone. The company’s history of measurement errors dates back to September 2016 when it was found to have miscalculated videos’ average watch time for two years. That error led a group of advertisers to file a lawsuit against the company; Facebook settled the lawsuit in October 2019.

The errors have extended beyond measurement. Earlier this year creators told Digiday that there was a bug during the first quarter of 2019 that affected the reach of their videos on Facebook, negatively impacting their videos’ viewership and resulting revenue. Facebook’s video publishing tool Creator Studio has similarly been a source of frustration for creators and publishers. In June and July, the tool suffered a series of outages and stopped functioning altogether for a period of time, Digiday previously reported.

“It’s buggy all the time. We’re dealing with it all the time,” said one media exec of Facebook’s video platform.

The post Facebook’s latest video measurement glitch adds to error-prone reputation appeared first on Digiday.