Month: December 2019

“We had to revamp our Amazon strategy. There are a ton of knockoffs of our products there. Amazon really punishes you if you’re not on Prime, if you’re not paying for ad space to be a sponsored post and there are some patent trolls out there who will claim they had your product first. We had to spend a ton of money revamping our entire Amazon exposure out there. It’s helped our brand soar, but Amazon is a full-time job to control other retailers out there who are selling your product online when they aren’t supposed to be.” 

Managing in-house marketing is difficult.
“If you want to take something in-house, it takes a lot of work and eventually you’re going to need the amount of headcount you have at your agency, but it’s going to be under your control. The relationship with our agency will get tougher toward the end [when we’ve in-housed everything].” 

“If you’re super open [about taking things in-house,] it’s much better than trying to do things behind the agencies’ back because they’ll just stop working, they’ll be like ‘F-you’.”

“Whatever you do [in-house or agency], you get the best work when you’re working with a team who will tell you ‘no’ or that ‘your idea is bad.’ Sometimes bigger corporations need an agency to step in to tell them that something is a bad idea, that they don’t have the pulse on culture.”

No one wants to pay agency-of-record retainers.
“Agency-of-record retainers are so high, and if you’re a small brand, you can’t support it. It’s much more cost-effective to do a big project when you need someone to give a strategic vision or define the look and feel and then have someone junior or in-house do the execution.” 

“Even if you end up spending more over time it feels better to some brands who are very new to spending on creative to do project-based work rather than retainer.” 

“When you’re paying a retainer, it feels like people at the agency are onto the next thing and business development is looking for the next retainer payer. By clearly defining the project, it forces the team internally to really be thoughtful about where we’re trying to get to and the agency doesn’t take it for granted. I’ve found that the turnaround time on project-based work is a lot shorter. With a retainer, the agency will stretch it out for months because of the retainer fee.” 

Internal structure is still a problem.
“We’ve have segmented out our channels. I handle digital. We have a separate social team, so I don’t touch social at all. A lot of times, we can find ourselves being really siloed and we’re not cross-promoting. Or we’re doing double the work that we all need to be doing. We also have an in-house creative team and outsource with an agency so there’s definitely duplication of the work happening.”

“Our team is too small, and the number of people who want something from marketing is vast. We’re trying to figure out how to balance what we can achieve for the brand and what everyone else wants. And everyone in the business thinks they know about marketing.” 

“With startups, there are often times where the founder is not the brand marketer but they are the brand vision. There’s a really tough dichotomy because you want to lean on them since they understand the brand but they also don’t understand what marketing costs. They’ll say they don’t want to do paid social but they want exposure. There are a lot times where tactile marketing strategies that most of us have employed before don’t line up with the founder or CEO sees as needed.” 

No one has attribution figured out.
“There’s a lot of brand media you can’t measure. You can’t measure a TV commercial or an out-of-home billboard but that doesn’t mean it’s not important.”

“I always push anyone we work with to work under one system [for attribution]. Tracking becomes a lot harder when everyone is using their own preferred system. You have to pick the system of attribution that works for you and make sure whoever you work with is on your system instead of you being on theirs.”

All eyes are on TikTok.
“We’re trying to figure out when to dip our toes into TikTok. Our brand and social media teams are studying TikTok and immersing themselves in it. [But the underage community is hard to understand,] a lot of the [popular TikTok personalities] are under 18.”

“TikTok is very intimidating.”

“TikTok stars are much cheaper than Instagram because they still don’t know what to charge.”  

The end of likes will make influencers more accountable.
“With our brand, we’re moving so quickly, so to find content creators and influencers we want to work with, the number of likes is a big part of the consideration. Likes going away on Instagram will require us as brands to have a more authentic conversation with influencers before working together now. We’ll need to see how often their posts are shared or saved — right now that’s all private information for them.”

“Influencers have been the shiny object for a lot of marketers. A lot of brands [for whom it doesn’t make sense] have been using them. Now, with likes going away, it’ll make influencers more accountable. Influencers will have to actually report back to you and prove what you’re paying them and why it’s worthwhile.” 

“I haven’t been in a conversation in the last three years where somebody didn’t want to use influencer marketing.”

“I do marketing, but I’m also an influencer. Brands are sending out emails saying they need access to more analytics. I’ve never thought likes do anything; it’s all about your reach. Now brands are finally catching onto that.”

“Attribution for influencers is really, really hard. There’s a disconnect between putting too much focus on things that are truly effective in brand building and things that short term and that can give us the attribution. We go with what can be attributed because we can prove it. In my experience, we do that because marketing can be first at the chopping block, so it’s important to prove value, but then you negate your long-term strategy because you can’t track those brand-building aspects as easily.”

It won’t be a hard paywall though. While there isn’t going to be a distinct split between how much content is behind the paywall versus free, the company said that all features and long-form journalism will be paywalled, as it is more expensive to produce. Additionally, stories that are popular for the site, like conference coverage, will be paywalled, but the edit staff has the ability to pick and choose articles they feel would drive readers to the paywall.

Non-paying readers will still be able to access news and second-day takes, wire syndications, sponsored content and Fortune’s list of franchises.

Michael Schneider, Fortune’s publisher and chief revenue officer, estimates that 60% to 70% of Fortune’s revenue comes from advertising and sponsorships, with the remaining amount coming from consumer revenue, in the form of magazine subscriptions and its conference business. A representative said that Fortune is still on track to be profitable this year, though the company wouldn’t disclose specific numbers. The company expects memberships to account for approximately 20% of its overall revenue in three years and reach up to 30% of its revenue in five years.

“We don’t want to give up ad sales, but we want to diversify the revenue,” said Jonathan Rivers, Fortune’s chief technology officer. 

Fortune wanted to launch a paywall years ago, but its former parent, Meredith, limited Fortune’s ability to invest in projects that wouldn’t deliver incremental revenue almost immediately, according to Schneider. Since gaining independence from Meredith Corp. at the end of 2018, Fortune CMO Michael Joseloff said Fortune’s leadership spent the better part of a year collecting information through reader surveys to see what its audience would be willing to pay for. Then, the product and edit team created variations of those new offerings and sent around a survey again to see how readers ranked the value of the prototypes. From there, they were able to decide which tier had which new content offerings, Schneider said. 

In quarter three, Joseloff said there are plans to roll out more community-focused membership tiers, called the professional membership, which will include exclusive, interactive experiences for members, such as community events and possibly invitations to conferences, in addition to access to the content. 

Fortune also had to hire to build the paywall. Rivers, who was hired in March this year to lead the paywall, has since built out a tech team of 16 full-time staffers — something that Schneider said the publication never had while it was under previous ownership. 

“As part of Time Inc., we essentially had zero technology staffers dedicated to the brand. Most of it was shared or outsourced, and I can tell you from history that it took a long time to get something fixed. It was so important for this brand to hire a tech team,” said Schneider.

The editorial team has also been expanded by 44% over the past year with 13 new full-time editors and writers in the U.S., two in Europe and an entire editorial team of 11 added in Asia, which now has a total staff of 46. Fortune now has a total of 206 employees, and while the effort has been to move toward more consumer revenue, the sales team has also expanded and reassembled to focus more on platform agnostic selling, something the brand didn’t have under previous owners. 

“I don’t think people realize the complexities of taking something that’s 89 years old and making a new company out of it,” Rivers said. 

Elizabeth Hansen, a research fellow at the Shorenstein Center for Media, Politics, and Public Policy at Harvard Kennedy School, said that in her research, there tends to be a lot of confusion from publishers around what membership means. “It’s a term that covers a lot of different models. A subscription can look more transactional than a membership. A membership is a more engaged and participatory.”

Paired with its new membership program will be a site redesign designed to make its ads less obtrusive, as well as a print redesign, a new mobile app and a video hub filled will have premium content, like business insights and longer interviews with executives.

Since August, Facebook, YouTube and Microsoft’s Mixer have been poaching popular gaming streamers, such as Tyler “Ninja” Blevins and Michael “Shroud” Grzesiek, from Twitch. These platforms are offering money in exchange for the streamers broadcasting themselves playing video games exclusively on the rival platforms. These moves signal a shift in the power balance, not only among the platforms but between the streamers and the platforms.

Twitch has historically locked top streamers into exclusive deals in order for the streamers to make money from the ads sold against their live videos. But over the past two years, streamers like Blevins and Guy “Dr Disrespect” Beahm IV have achieved mainstream celebrity, appearing on magazine covers and striking deals to create TV shows based on their streaming personalities. That fame has put the top streamers in position to be willing to move beyond the platform that built their followings and try to build other platforms’ live viewership.

While YouTube accounted for 87% of on-demand gaming video uploads in the first half of 2019, per Tubular Labs, the platform trails Twitch in live video. In the third quarter of 2019, creators streamed 87.3 million hours of live video on Twitch versus 11.1 million hours on YouTube, according to gaming and esports analytics firm Newzoo.

“Those creators now attract other creators to the platform. They attract new viewers to the platform,” said Niles Heron, co-founder and chief strategy officer at gamer-centric talent management firm Loaded, which represents Blevins.

Twitch remains the dominant platform for live viewership by a large margin. In the third quarter of 2019, Twitch accounted for 76% of the more than 3 billion hours that people spent streaming gaming videos across Twitch, Facebook, YouTube and Mixer during the period, according to livestreaming technology provider StreamElements. However, Twitch’s would-be rivals appear to see an opportunity to steal viewership away from Twitch by stealing its top streamers.

Growing their gaming audiences could help these platforms to grow their advertising businesses, especially among companies looking to younger viewers. Of Generation Z males, 77% regularly watch people play video games, according to a study by media company Whistle. “The best way to connect with gamers is through content,” said Chris Erb, founder and managing partner at Tripleclix, a marketing agency that specializes in gaming and has worked with Taco Bell, Kelloggs and Hollister.

Blevins’ defection from Twitch to Mixer in August seems to have triggered a cascade of exclusivity deals between streamers and platforms that resembles a major sports league’s free-agency period. “Definitely the conversations have heated up specifically this year,” said Damon Lau, head of esports at UTA. Some streamers, like Timothy “TimTheTatman” Betar, have opted to renew their deals with Twitch, but many others have been won over by an influx of offers.

“I’m friends with a lot of Twitch streamers of decent size, and every time someone’s contract is coming up [for renewal], I know they’re weighing offers from like five different companies,” said Jeremy “Disguised Toast” Wang.

Wang, a popular Twitch streamer who is represented by UTA, announced last month that he has signed a deal to live stream exclusively on Facebook. He acknowledged that, in switching platforms, he will likely lose some viewers, but he sees an opportunity to grow his audience on the social network, especially internationally, which was his main motivation in making the move.

It also helps that in many of these deals, including Wang’s, the exclusivity only applies to live videos and does not prevent streamers from posting on-demand videos to other platforms.

Livestreaming “is one of many revenue sources [for streamers]. As you get more impact opportunity on platforms other than wherever you’re doing your livestreaming, it becomes easier to say, ‘Even if there is attrition when I switch, my business is still safe.’ It’s not all eggs in one basket anymore,” said Heron.