Month: February 2020

Bloomberg isn’t the only candidate to wade into paid influencer marketing this election cycle. Before dropping out of the race, a Super PAC for Senator Cory Booker reportedly offered influencers cash for posts about the former candidate. But influencer marketing experts say that the recent effort by Bloomberg’s campaign is likely the largest and most successful, at least in terms of the earned media it generated, use of paid influencer marketing by a politician they’ve seen to date. They also say they expect a significant swell of political influencer marketing to come as other candidates eye the attention Bloomberg has gotten for the memes. 

“We’ve been getting a lot of inbound interest in paid campaigns,” said Ted Murphy, CEO of influencer marketing platform Izea. “The buzz from Bloomberg has other people are looking at influencer marketing as a potential strategy.” Murphy declined to share where the requests have come from or identify if they are from other presidential candidates. 

Ryan Detert, CEO of Influential, agreed that political influencer marketing is on the rise. “It’s going to continue to grow,” said Detert before cautioning that pure-play endorsements of particular candidates will likely cause backlash for influencers. Instead, Detert believes that the use of influencers will be similar to that of Bloomberg’s meme strategy, i.e. they will be used as part of an awareness strategy rather than paid to post about why they are voting for a particular candidate. “If it feels forced there will be backlash,” said Detert.

Using influencers for a paid awareness strategy makes sense to Sway CEO Danielle Wiley. “Younger voters are not seeing TV ads,” said Wiley, adding that using influencers can help candidates reach millions of 18 to 24-year-olds where they are spending their time. “ Purely for impressions and eyeballs, [influencer marketing] can be huge.” 

It’s unclear how much money is being spent on influencers this campaign cycle. As previously reported by The Daily Beast, prior to the meme strategy the Bloomberg campaign worked with branded content marketplace Tribe to pay influencers $150 per post. Spending on television ads during this campaign cycle, meanwhile, has topped $435 million with $230 million of that by Bloomberg, according to the Wesleyan Media Project. 

But even though the strategy is about awareness, not endorsement, influencer marketing experts expect that disclosure issues will crop up. Political advertising is managed by the Federal Election Commission, which has not updated regulations for the current digital advertising environment, as Buzzfeed reported. The Federal Trade Commission, which handles influencer marketing for brands, has repeatedly updated guidelines for how influencers should disclose relationships with advertisers but Influencers don’t always follow those guidelines. Influencer marketing experts believe the same issue will come up with political advertising by influencers. 

While 2020 candidates may be eyeing more influencer marketing, it’s unclear how many influencers will be on board to accept cash to tout particular candidates. Doing so could not only alienate some of an influencer’s audience but could make brands less likely to want to work with that particular influencer, according to experts who say that brands already ask not to work with influencers who are outspoken about politics, religion or any contentious issues. Brands would rather work with influencers that don’t have those issues because influencers can be seen as “more like spokespeople,” said Wiley. 

Still, even with potential disclosure or brand deals at play, experts believe political influencer campaigns are here to stay. “I think this will be the new normal,” wrote Kristy Sammis, executive director, Influencer Marketing Association. “Influencer marketing is now a known, established tactic – along with billboards and tv commercials. It’s worth noting that the guy behind the meme-ads is the chief executive of Jerry Media, which promoted the Fyre Festival. And I’ve said before, the influencer strategy was the ONLY thing about the Fyre Festival that actually worked.”

The Information is currently priced at $399 for an annual subscription and Bloomberg’s digital subscription product costs $415 for one year. With the bundle — priced at $499 — subscribers will save $315. Those who already subscribe to The Information on a monthly basis are able to upgrade their subscriptions to include Bloomberg, with that capability coming later for annual subscribers.

Jessica Lessin, editor-in-chief of The Information, declined to share the company’s total number of subscribers. She said that its sizable audience enables The Information to leverage a mutually beneficial relationship between it and Bloomberg. According to Comscore, The Information had 103,000 unique visitors in December, compared to Bloomberg, which saw over 26 million unique visitors that same month.

Lessin said revenues from the bundle will be split 50-50 between The Information and Bloomberg. Under the partnership, even if one publisher brings in more subscribers than the others, the two companies will split revenue down the middle at the end of an agreed upon period.

Essentially, this acts as a promotion for both Bloomberg and The Information. Because the publishers’ have similar price points and the promotion expires after the first year, this could theoretically leave both companies with a healthy list of subscribers who they will then auto-renew into a full-priced membership.

After the first year subscription has passed, Lessin said that both publications will individually decide how to charge subscribers for the following year, though she said she plans to charge The Information’s subscribers the standard rate for a membership once the promotion ends. According to Bloomberg’s site, the publisher will also charge its standard rate for an annual subscription post-promotion.

“The only players looking to aggregate news have been Apple, Facebook and Google,” said Lessin. “It’s bizarre that we’ve seeded this power to the tech companies,” she added, continuing that she sees an opportunity for publishers to take some of the power back and “work together to expand the audience for quality journalism.”

“If you look at the sort of stakes in covering the largest tech companies, the journalism industry is understaffed for the number stories that need to be covered. We need everyone to be successful,” she said, adding that a bundling model like this will help to support journalism in this space, rather than igniting competition.

Lessin said that she is in conversations with a “number of publishers” to explore this model further, though plans for additional bundles have yet to be announced.

Lessin said that the company is profitable with approximately 80% or higher of its annual revenue coming from its subscription business. Within that, she said that most of the subscriptions — north of 80% — are from individual subscribers. The remaining 20% or so subscriptions come from the business-to-business model that Lessin said her team recently launched and is looking to build out this year.

The business-to-business model experienced 150% increase in revenue in 2019 and currently features a seat-based group sale offering for companies. This year, it will also include specialized vertical products (the first one will be for investors).

The other portion of The Information’s revenue, according to Lessin, comes from its events sponsorship business. Since launching in 2013, the company has had 70 sponsors and last year, it hosted close to a dozen events.

Matt Skibinski, reader revenue advisor for The Lenfest Institute, said “bundles are a way to experiment with the [aggregation] model in a lower stakes way,” continuing that it gives the publisher more control over its content and its interactions with the reader. “If I were a publisher, I would be very reluctant to sacrifice my direct relationship with the reader in any way, so things like Apple News + may be worth it economically, but I’d be wary of the long term effects” on readership.

Skibinski added, however, that “in general, there are not a lot of examples of this kind of cross [promotion] or package deals working well for publishers. It’s hard to find the right product.” As for “potential pitfalls,” he said that  readers who are loyal enough to one brand to pay for a high price point subscription, likely enjoy experiencing that content within the environment of that brand.

Marketers have for years had problems with Amazon’s search recommendation engine, an algorithm that was responsible for over 35% of all sales on Amazon.com in 2018, per McKinsey. Despite how crucial the algorithm is for sales on Amazon, marketers have minimal influence over it. With limited control over those recommendations, marketers run the risk of seeing their rivals rank better than their own search terms.

“When you search for our brand, you’ll probably get our rivals too, which isn’t what we want when we’re paying money to drive people to the site,” said one senior marketer who wasn’t authorized to speak to Digiday. Rather than promote individual sellers, Amazon promotes the catalog and bestsellers, said the marketer.

Now, Amazon is hoping improvements to its branded stores functions will help assuage those concerns — including a test of if Stores results should appear in search results.

The stores would appear at the bottom of search results within a carousel of brand stores alongside an image and name of the brand store, said one agency exec, who has seen mock-ups of the design. Promoting stores is part of Amazon’s wider attempts to go after brand awareness and storytelling campaigns, said Joanna Lambadjieva, managing partner for emergent retail at Threepipe.

Amazon’s developers are also working on updates that give companies more control over how they look. Improvements to the content management system behind the stores will give companies the option to let shoppers follow their favorite stores as well as introduce richer imagery.

Amazon launched “Amazon Stores” in 2017 as a free self-service product that lets companies create and manage stores to showcase their brands and products on the marketplace. Unlike the similarly named “Amazon Storefronts”, which list the products a company has for sale, Amazon Stores are essentially a dedicated space on the marketplace that can be designed to display the look and feel of a company’s brands while showcasing their spectrum of products available. The problem with these stores, however, is that unless a company is actively driving audiences to them through paid ads or from external search queries, they can be hard to find.

Amazon declined to comment. A source close to the company, however, said the company is always testing new experiences.

While all the updates to stores won’t be enough reason for companies to change their view on Amazon, it does make it easier for them to use their brands to gain an advantage in a competitive marketplace, said Lambadjieva. Plus, the branded stores are also the only place on Amazon.com where marketers can track traffic from external sources through source tags.

“The creation of a well-structured brand store with products and product extensions together will shape the customer journey, said Dan Simmonds, the director of Amazon at OMG Transact, the new e-commerce arm of Omnicom Media Group. “This user behavior — if executed correctly — could be identified as a user trend within the Amazon machine learning and influence what is shown to the user under the ‘recommendations’ section,” said Simmonds.

The stores may help solve the algorithm problem, which isn’t exactly new. In fact, companies like Birkenstock pulled products from Amazon.com as far back as 2016 due to concerns over a recommendation engine that could inadvertently use the money it spent driving people to its product listings to instead drive sales for rival footwear manufacturers. Following the move, other companies like Nike and Ikea questioned whether the lack of control over how their products were recommended on Amazon was worth the risk, though, with the retailer’s market share, the marketplace remained a consideration.

Marketers overall are dealing with the challenges that come with selling on Amazon.com — where it’s in the marketplace’s best interest to have multiple sellers sell the same product, not just the business that manufactured it.

Now, as larger, premium companies establish their own direct-to-consumer offering, more of them feel conflicted over whether they can work with Amazon in a mutually beneficial way when they’ve had limited influence over what is recommended to shoppers.

This recommendation process tends not to sit well with marketers, who increasingly feel that the traffic and incremental revenue from Amazon.com is not only less profitable than those from other marketplaces or even their own sites, but also doesn’t help bolster their brand. “Amazon doesn’t often want to promote the most profitable or strategically important ranges for brands, which also creates a disconnect,” As Paul Kasamias, managing partner of performance at Starcom explained:

“There are a lot of companies who still feel conflicted about whether they can build their brand on Amazon and whether it’s going to be a serious sales channel for both the short and long-term,” said Andy Siviter, head of e-commerce at digital agency Croud.