Month: February 2020

The basics
Amazon advertising is unique because it doesn’t live in a vacuum. The company has always placed advertising on the platform as part of a company’s overall retail approach. As the slide below shows, advertising isn’t the beginning: Companies should think of merchandising, pricing and product first. Then, work on the “earned media” portion — reviews and recommendations, and potentially an Amazon’s Choice Label.

The types of products
There are a few different types of advertising ad products, all under the Amazon Advertising umbrella. The old organization of Amazon Marketing Services and Amazon Advertising Platform (sponsored ads and a DSP) no longer exist.

Using the Amazon DSP
How and when to use various ad products should also depend. Sponsored ads for example can be good at driving handraisers into a funnel, while the Amazon DSP can do a lot more. There are four “levers” to pull, from changing placements to potentially going off Amazon.com, to new ways to target audiences, and using different types of content to do it.

Putting the advertising in context
For brands, because retail is such a large part of the Amazon advertising system, advertising strategies can be broken down in a few areas. For many brands, “owning” their presence on Amazon is a priority, due to issues like copycat products, keyword bidding wars from competitors, and just an ever-present need to win against the algorithm. For example, as Eos director of digital marketing Swati Bothra explained in her presentation, the strategy should begin with a brand “defense,” following by ads both inside and outside the Amazon ecosystem.

Sales matter
While Amazon’s algorithm has often been compared to a black box, ultimately search rank, the true kingpin within Amazon Advertising, is all about sales. That means sales, especially relative to competition, become the most important metric. For campaigns, it’s mostly then all about keyword use: relevance, frequency and volume. As Alan Kwok, who runs growth at Hero Cosmetics explained, it’s about combining keyboards with other variables for campaigns, then tracking the results.

And Amazon is currently testing ways to drive more people to brand pages, with souped-up Store page features and a new follow button on that page, according to one media executive who asked to remain unnamed.

Follow buttons have been added to Amazon Live, according to an Amazon spokeswoman.

Overall, the company is working to “deepen brand engagement,” David Fildes, Amazon’s director of investor relations, said during the company’s 2019 fourth-quarter earnings call last week. Fildes cited in particular Amazon’s effort to bolster its Store page features, granting companies the ability to post earned media lifestyle content and do more storytelling.

Analysts have noted advertisers’ growing interest in recent months in paid video ads, which are now available through Amazon’s self-serve ads platform (for certain advertisers), as well as paid ad placements in over-the-top media.  

“We’re seeing some clients who are starting to really think about Amazon for what they can do with the consideration and awareness part of the funnel,” said Todd Bowman, Merkle’s senior director of Amazon ad online retail. “As Amazon is pushing more video betas, video capabilities, pushing OTT a lot and the Store page, advertisers are seeing that as an opportunity to build awareness about the brand and drive more sales through that.” 

This shift, as advertisers increasingly view how they can tap Amazon’s site for brand awareness and storytelling, has happened over the last year or so but especially in recent months, according to agency buyers. “A year ago we began to see brand [awareness] dollars move into Amazon, the same dollars that went to booking subway ads, bus ads and billboards were now going into Amazon,” said Eric Heller, executive vp of marketplace services at Wunderman Thompson Commerce. He added that a company’s ability to tie its awareness campaigns on Amazon.com to sales data is unique. “It is far more increasingly an awareness and even a launch platform.” 

This very topic drew considerable attention at Digiday’s Amazon Strategies event held last week in New York. Both agency and retail representatives said days of thinking of sales on Amazon.com as a simple conversion funnel are largely gone. Now companies are using videos, Store pages and other ad features to find and capture prospective customers (or “hand raisers”) and create more top-of-funnel awareness, said Enrico Mirabelli, associate director of media at iCrossing, at the event.

Amazon’s reputation for its search ads has turned its advertising business into a juggernaut: For its fourth quarter of 2019, Amazon reported $4.8 billion in revenue from its “other” category, which is mostly comprised of revenue from its advertising business. That’s a 41% increase from the $3.4 billion reported for the fourth quarter of 2018. Still, Amazon is aiming for advertisers to see its potential for creating brand awareness and storytelling advertising (an opportunity that’s found on other platforms). 

That Amazon is now seeking to strengthen its advertising offering beyond lower-funnel conversion ads is no surprise. As Amazon’s ad business has matured, the company has sought to add more capabilities beyond search advertising to position itself as a more serious player and compete with Facebook and Google. “Amazon’s really rising to the challenge and increasing ad inventory as marketing costs continue to increase on Facebook and Google,” said Kiri Masters, CEO of Bobsled Marketing. “With cost per clicks going up and up [on Facebook and Google], it’s good [for Amazon to] bring extra inventory for advertisers to choose from.”

Yet Amazon’s pitching advertisers on its brand storytelling capabilities is not happening now simply because this is an advantageous time for Amazon to compete with the duopoly. It’s part of a longer-term push for Amazon to build out the breadth and depth of its ad placement opportunities for advertisers, analysts said. 

And Amazon’s latest Prime membership numbers can’t hurt. During its recent earnings call, the company unveiled that it now has 150 million Amazon Prime users globally. And that makes the advertising pitch “very compelling” for advertisers, Masters said. 

“Data like [the company’s earnings report] opens the virtual spigot” for Amazon’s ad business, Heller said. “The strength of the data just further cements that this is where consumers are going to find and buy products, and brands see it.” 

In late 2019, Amazon’s brand awareness advertising pitch was focused on convincing advertisers to consider video ads and OTT opportunities. While analysts said they believe that Amazon will continue the approach  this year, they also envision that it will also focus on the Store pages and its paid and earned media capabilities (to drive traffic and tell consumers more about brands).

Potentially allowing advertisers to use the Store page to insert “Pinterest-y” content gives smaller businesses the opportunity to do brand storytelling on the platform; that had generally been reserved for big advertisers with big budgets, Masters said. 

“Originally, we called the brand Store ‘CEO candy’ because if you got the brand Store right you wouldn’t get a call in the middle of the night from a CEO asking why the brand Store looked dated on Amazon,” Heller said. “The reason why was that no one was going to it. “

Added Heller: “Now, we can point ads there and we can create a legitimate conversion source there. That’s all happened within the last six months where brands are prioritizing getting it right. It’s not just digital natives; it’s global big brands.”

Some publishers have asserted that they do not sell people’s information under the CCPA and have seen little to no impact from the law. Others have taken the strict interpretation that they are selling personal information. These publishers have prominently placed the requisite links on their homepages for people to request a publisher not sell their personal information and, in some cases, seen their ad prices cut in half. And then there are those publishers that have sought to split the difference, adopting the strict interpretation but attempting to obscure the opt-out links’ appearance.

Given the ambiguity about the CCPA’s application to targeted advertising and publishers’ varied responses, some advertisers have redirected their ad dollars from publishers that do not appear as compliant. These advertisers have shifted their spending to publishers that meet their compliance expectations, according to ad agency executives. “Better safe than sorry,” said one ad agency executive.

Opt-out rates impinge on ad prices
Advertisers’ flight to safety while the CCPA’s ambiguities are sorted out may be making some publishers sorry that they have not appeared to have fully complied with the law. But other publishers may be sorry that they have taken ultraconservative approaches to complying with the law, such as by highlighting the opt-out links on their sites.

When a California resident has opted out of the sale of their personal information, ad prices, on average, have shrunk by 44% as of Jan. 31, according to ad tech firm Infolinks, which sells ads across a network of 25,000 primarily small- and mid-sized publishers.

According to Sourcepoint, a technology provider that offers a consent management tool for publishers, consumer opt-out rates for the sale of their information have ranged from 0% to 30%. The rates correlate to the prominence of the opt-out notification link, said Sourcepoint COO Brian Kane.

Some publishers have put the opt-out notices at the top of the homepage. Others have placed the notices within their sites’ footers so that people must scroll to the bottom to find them. One publisher that deposited the opt-out notice in the footer said that that less than 1% of site visitors click on the notice and, of those visitors, only 10% opt out of the sale of their personal information.

Publishers opt out of opt-out links
Some publishers, such as Dotdash and Ziff Davis, have not put the opt-out links on their websites.

In the case of Ziff Davis, the publisher’s privacy policy states that it “may and may have disclosed or sold” people’s personal information for business purposes. However, while Ziff Davis offers an opt-out request tool, a link to it is absent from its sites’ homepages. That could become an issue if, when the California AG’s office begins to enforce the CCPA, the regulator opts to take advantage of the law’s lookback window to penalize companies that were not fully compliant anytime after Jan. 1.

If a company has stated that it may sell California residents’ personal information but has not placed an opt-out link on its homepage, that “is going to be problematic because they’re supposed to have it,” said Aaron Tantleff, a partner at law firm Foley & Lardner.

“Any Ziff Davis sites that may share California consumers’ personal information with third parties within the definition of ‘sale’ under CCPA are actively working on implementation of the ‘Do Not Sell’ link,” said a Ziff Davis spokesperson in an emailed statement.

The absence of an opt-out link on Dotdash’s sites does not appear to be problematic since the publisher has taken the position that it does not sell people’s personal information as defined by the CCPA. The publisher complies with the law in other respects, such as by letting users request that Dotdash inform them about the information it collects about them and ask the company to delete that information.

Dotdash’s advertising business has not been affected by the CCPA, said Sara Badler, Dotdash’s svp of programmatic revenue and strategy. “I have not seen any changes or dips at all,” she said.

The service provider safety net
Dotdash has given its advertising business further cover by designating its ad tech partners as service providers, a stipulation within the CCPA that the ad tech industry has rallied around. Under the CCPA, companies can share personal information from California residents, including those who opt out of their information’s sale, for specified business purposes with other companies designated as service providers.

Some advertisers have found it difficult to ascertain whether a publisher and the ad tech firms that mediate an ad’s programmatic are using that designation, according to ad agency executives. That is especially true of publishers with which advertisers do not have direct relationships and may further contribute to the ad price declines that Infolinks has observed.

To help publishers and ad tech firms communicate whether a transaction is covered by the service provider designation, the Interactive Advertising Bureau has developed the Limited Service Providers Agreement.

About 200 companies, including publishers and ad tech firms, have signed the IAB’s Limited Service Providers Agreement, said Michael Hahn, svp and general counsel at the IAB. Hahn said that it is “a fairly sizable number” given that the law only took effect on Jan. 1.

Over the last year, the Guardian cut its weekly output by one-third after it detected, by using its real-time analytics tool Ophan, that no one was reading a huge chunk of the journalism produced by the publisher, according to Chris Moran, the Guardian’s editor of strategic projects. The subsequent change in volume led to traffic growth, tweeted Guardian editor-in-chief Kathrine Viner. In December 2019, the Guardian had 25 million monthly unique users in the U.K., a rise from 23.4 million the previous year, according to Comscore.

From 2017 to 2019, French subscription publisher Le Monde reduced its total number of articles 25% while growing its newsroom staff to 500 journalists. Its online audience rose 11% and its print and digital circulation rose 11%, according to a tweet from Luc Bronner, Le Monde’s managing editor. Comscore reported that during December 2019, Le Monde had 9.1 million unique monthly users in France; that’s a rise from 8.4 million in December 2018.

Last summer The Times of London published 15% fewer stories on its online Home News section after learning that its stories without additional or exclusive content underperform with readers. Following the change in story output, dwell time in the section has increased: Readers of The Times smartphone app spent on average  28 minutes each day on the Home News section; that’s a 25% rise as compared with the same stretch the prior year, according to the publisher.

Media analyst Thomas Baekdal cited several elements at play as publishers migrate from print to digital production. Publishers can now granularly track audience metrics on individual articles, as well as how much revenue, from ads or subscriptions, each online article generates. Certain online stories have a huge reach while others are never seen, regardless of the quality of the article. That’s because people read a smaller number of individual news articles when consuming news online. But people peruse print publications from cover to cover, meaning a wider number of articles are seen but not necessarily read. And due to the infinite nature of the internet, online publishers might be tempted to produce content in abundance in search of revenue.

“Whether a digital magazine publishes 100, 500, or 1,000 articles makes no difference” to the reader, Baekdal said. “It’s the quality and interest of the articles that matter instead. We see this clearly on YouTube, where the most popular YouTubers rarely post more than once or twice a day. Publishers look at this, do the analysis, and they discover that when they cut away the not valuable, nobody realizes that it is gone.”

As their reader-revenue strategies evolve, publishers have gained a more nuanced understanding of newsroom metrics. According to Moran, 1,000 Guardian employees a month use Ophan to track pageviews and readers’ time spent on pages.

Publishers are moving away from last-touch attribution models that give full credit to the final article that a reader clicked on before signing up for subscription. The Guardian knows “very well” that its environmental coverage converts people to donate, Moran said. This fits with the Guardian’s ethos, but too much focus on these data points can bend the journalism in the wrong direction, he said. In many newsrooms reporters are now considering how their stories can drive subscriptions, as Digiday has previously reported; this has led to changes in how reporters manage their time and their reporting style.

From 2017 to 2019, The Post and Courier of Charleston, South Carolina, increased its number of digital subscriptions 250%, from 1,700 to 6,000. Previously the local publication had issued 50 to 65 stories a day. After scrutinizing its output, the publisher cut its daily number of stories to 30 in-depth pieces. The Post and Courier also moved from measuring clicks and pageviews to tracking the amount of time readers spent with an article and their engaged minutes; these analytics show a clearer path to subscriptions, the publisher said. If a story did not attract 500 unique visitors and at least 1.2 minutes of engaged time, staffers re-evaluated it and adjusted the headline or keywords.  

This type of analysis evokes newsroom concerns for publishers relying on subscriptions, though, Baekdal said. Publishers often find that the types of stories they produce the most of are often the least read, so they don’t generate as much ad revenue as the more widely read pieces. This leads to difficult decisions about whether publishers should cut back on premium content (that typically costs more to produce), change the ratio of non-premium to premium content, or tweak the pricing of subscriptions, so that people start to read more of what the newspaper wants them to read, he said.

“We know how an LGBTQ media company should operate and we need to bring us back to that,” said Anderson-Minshall, who previously served as The Advocate’s editorial director and has worked with the company for more a decade. “Rumors of our death are very premature.” She added, “We had a year of correction and we have a few months more of correction to become a profitable $20 million business.”

Part of those corrections included a series of layoffs, which culminated in the December departures of the editors-in-chief for both The Advocate and Out, Zach Stafford and Phillip Picardi. In January, Pride Media CEO Orlando Reece resigned. Additionally, at the start of this year the magazine decreased its circulation frequency from 10 issues to six issues. Anderson-Minshall said her company currently has a total of 35 employees for business and editorial functions as well as some contracted workers.

“Part of scaling back wasn’t about profitability but sustainability,” Anderson-Minshall said. “With [the] layoffs, we are on a very slim staff, so many of our workers — dare I say most of our workers — are wearing at least three or four hats and have absorbed the tasks that other team members were doing.”

She plans to reorganize Pride Media’s editorial operations so that writers will create content for all four brands (which also include Pride.com and Plus.com), with each title having a top editor who ensures that brand’s voice, Anderson-Minshall said. The quantity of articles produced will remain the same as in the past, she added. Anderson-Minshall said she will appoint new editor-in-chiefs for Out and The Advocate but did not mention restoring any of the other positions eliminated last year.

Being asked to do more with less has strained some staffers. “We’re doing well in so many ways,” said a person familiar with the business side of Pride Media. “However, it feels like at times we’re running on fumes and don’t have a positive work-life balance.”

While that source said the staffing cuts had prompted Pride Media’s business team to be reactive rather than proactive, some financial progress has been made of late. Last year the company added to its client roster 32 advertisers, making for a total of 131. Pride Media’s assistant vp, Stuart Brockington, said that his company’s digital sales and brand partnership revenue combined rose 22% from 2018 to 2019.

“We’re seeing the most growth on digital and social [for brand partnerships] because that’s where we have the most growth in terms of audience,” Brockington said.

Pride Media logged a 44% increase in digital traffic from 2018 to 2019, reaching nearly 54 million pageviews across its four websites, according to the company’s internal analytics. In 2019 the publisher’s two biggest titles, Out and The Advocate, had 22.3 million and 18.6 million pageviews, respectively, according to the company’s analytics. In contrast, Comscore reported that Out had 30.5 million pageviews in 2019 and The Advocate had 25.6 million.

In addition, the Alliance for Audited Media reported that as of June 2019, Out magazine had a total circulation of more than 192,000 copies, with 99% of that associated with subscriptions. Pride Media reported that the number of subscriptions remained flat from 2018 to 2019.

Brockington said Pride Media’s use of a consulting approach with clients, helping them set up advertising campaigns across digital, print and social media channels and even on their owned properties, has helped build the company’s brand partnership revenue. “In the past, advertising sales [in media] were very transactional: Buy a page or buy a digital banner,” he noted.

February 2019 was the most successful February in the company’s history in terms of revenue, Brockington said. He is projecting that the celebration of 50th anniversary of the Los Angeles, San Francisco and Atlanta Pride marches this year, as well as the fact that this is an election year, will strengthen the company’s sales (much as marking the 50th anniversary of the Stonewall riots did for the company in 2019). Companies and advertisers will seek to build campaigns around these events of importance to LGBTQ audiences, he said. And using media publications created for this demographic is a direct way to make a connection,  Brockington added.

“There’s a lot of money in LGBT circulating” around, said a former Pride Media executive. “But there are issues with how [Pride Media] is operating. Other LGBT media companies are doing wonderfully.”

The screens brightly display the food and drinks inside the coolers. Food and drinks

vendors can also pay to display ads, including full-screen door takeovers or smaller pop-ups that highlight nutritional information. Advertisers’ targeting options range from pinpointing a time of day, certain weather conditions or events such as the Super Bowl. The ad revenue is split between the participating retailers and ranges from a 25% to 75% share, depending on factors such as their capital expenditure. The advertising prices range from a cost per thousand impressions of $1 to $15, according to the product and type of campaign.

Where Cooler Screens were installed, retail stores’ monthly sales rose 5 to 12 percentage points higher during January to May 2019 over the prior year’s stretch, as compared with sales at similar area stores without the technology, Cooler Screens said. Sales of Cooler Screens-advertised products rose 5 to 10 percentage points higher than sales of the products not advertised in this way. MillerCoors, Coca-Cola, Chobani, Red Bull and Conagra are among the more than 65 food and beverage companies that have participated in the trial so far. Cooler Screens also has ongoing pilot tests with other retailers besides Walgreens, but is keeping the names of those retailers confidential, the company

said.

But the trials have encountered some bumps in the road. When Cooler Screens first started touting its technology at the start of last year, it spoke of potential future capabilities such camera and eye-tracking technology that could serve different ads depending on the inferred demographics of shoppers. This sparked “a very passionate discussion” in the press and among consumers around the potential privacy implications, according to Cooler Screens CEO Arsen Avakian.

The initial response to Cooler Screens’ launch “was an eye-opener for me,” Avakian said. “We learned privacy is a strategy [and] we have to take a leadership” position. To date the company has not deployed facial or eye-tracking technology or targeted ads based on the gender or age of a shopper, a Cooler Screens spokeswoman said.

Ann Cavoukian, executive director of the Global Privacy and Security by Design Centre, has been advising the company on its approach. About 20 years ago, Cavoukian, the former information and privacy commissioner of Ontario, created her own “privacy by design” framework, which has since been incorporated into the European Union’s General Data Protection Regulation.

This privacy by design approach “is all about proactively embedding much-needed privacy measures into one’s operations, in an effort to prevent the privacy harms from arising,” Cavoukian wrote in an email. “That is exactly what Cooler Screens has achieved: no personally identifying information is collected nor retained, achieving their goal of being completely ‘identity blind.’”

A Walgreens spokeswoman said the company does not capture or retain any information that individually identifies customers. “There may be future camera enhancements to improve the customer shopping experience, but all such enhancements will be carefully reviewed and considered in light of any consumer privacy concerns,” she said.

Research conducted by Look Media for Cooler Screens found 72% of the 5,700 customers surveyed agreed or strongly agreed that they preferred the digital doors to traditional doors.

Neil Saunders, managing director of GlobalData Retail, said while the consumer focus groups that his research and consulting agency has set up have shown that consumers are interested in new in-store technology, he does not think digital cooler doors revolutionize the shopping experience.

“If Walgreens genuinely wanted to enhance its stores, there are a lot of basic things they should focus on before toying around with digital innovation,” Saunders said. “The bottom line is that I suspect this is more about Walgreens wanting to drive incremental revenue by facilitating brand advertising and marketing in their stores than it is about satisfying the consumer.”

The expanded deployment of Cooler Screens’ technology within Walgreens stores will cost in the “hundreds of millions of dollars” range, Cooler Screens estimated. It declined to comment on how much investment it has raised so far, beyond that it is approaching a Series C round. The Wall Street Journal reported in January 2019 that Cooler Screens had raised about $10 million in funding, including an investment from Microsoft, which is offering software to power the Cooler Screens infrastructure.

For 2021, Cooler Screens is planning to sell its advertising by plugging into third-party demand-side platforms, so advertisers can extend their digital campaigns to the in-store doors. Cooler Screens is also testing an analytics platform for ad buyers, which would “mimic the same approach Google [has had] with Google Analytics,” Avakian said. And Cooler Screens would offer its existing customers analytics data and technology to optimize their campaigns at no charge. The company is also considering charging food vendors and retail stores for the data it collects about stocking levels, according to Avakian

.