Month: March 2020

This conversation has been edited for length and clarity.

How are marketers coming to terms with the third-party cookie news?
I think the gap between the haves and have nots in digital marketing is becoming wider and it’s increasing faster than people can catch up to it.

Everyone has always sat on the sidelines and then when they reluctantly got involved [with data], then it was like, “We are not going to do [identity]. But we have high standards so we are going to use these partners to handle it.” Now these partners are getting cut off at the knees and now they’re just all screwed.

Who’s ‘they’?
It’s the marketers. It’s the agencies. It’s the ‘identity’ players. And for, the most part, a good chunk of publishers who have always said, “Oh, well, we don’t track everybody, but we have the cookie, right?”

Is there a lot of conflation of the separate regulatory and cookie issues out there in the market at the moment?
There’s a lot of conflation and a lot of people thinking [they know] what the impact is. The ones that are most confused are the agencies. They take talking points and they’re throwing them out there. They’re like, ‘Don’t worry. We are going to find you guys the right partners to work with.’ I’m like, ‘Appreciate it, but no. We’ll steer our own course.’

That’s really going to be the gap: When the marketer and the publisher are working directly, where does a data vendor, ad tech partner, media agency fit between the two of them? What’s their role other than just the execution of the media?

Don’t most marketers need vendors because they don’t have their data in order?
If you were data-poor, if you don’t have a direct relationship with the customer and you’re going through somebody else, your world is going to be bad. You might as well go back to demographic-targeting because there is no relationship that you own with the customer to say you have the right to target them. Spend the money on TV and have at it.

If you’re going to be a digital marketer in the new 2020s, you really have to have a full program around having that relationship. The distance between you and the customer has to be zero.

What are you planning to do while everyone tries to figure out what replaces the third-party cookie?
The next 18 months will be very focused on providing internal education for the teams to understand our process moving forward. And then working with the media activation teams to really identify the level that we need to replace. I think generally right now it’s less about partners — it’s more about process.

In many cases our data seller partners were selling us audiences that have been ingrained in our business. If those go away, what metrics we are going to work against? Anything cookie reliant, we will have to map it out and we will have to replace it.

That’s probably where the real winners will be the consultants. Whether or not talent gets brought in-house, you just can’t outsource privacy and data protection because you’re never going to be able to do it from the outside-in. I presume I will be working with less third-party vendors but I will probably need to work with more publishers of inventory sources.

How are publishers going to fare in this new privacy-focused world?
Publishers are just going to screw it up. I don’t think they’re going to be able to think fast enough to realize what’s lawful, or what they’re able to do, and they may just not participate.

I need [contract] language to say: You can’t repurpose my audiences and you can’t model my audience base for someone else. And what kind of compliance do you have?

I have a fundamental trust of Google and Facebook in data clean rooms more than I do with publishers. [Google and Facebook] have been thoughtful about their approach. You can take what you want in and some things you can’t take out. Publishers don’t have … the talent in-house so they’re going to have to hire.

As I look at the landscape right now, I’m very happy to be at the marketer versus any of those other places.

In turn, some of brewer’s media dollars are following those consumers, Brito said. He added: “We’ve relocated resources where possible to home channels like the growing e-commerce one.”

As much as media budgets in China are in a state of flux as marketers grapple with the widespread impact of the virus, some marketers are doubling down on online media. Advertisers like P&G have noticed that those shoppers stuck at home are buying more of their goods online.

Moving money on the fly, however, isn’t always a straightforward process for CPG advertisers. The likes of AB InBev tend to have to make big upfront commitments to media owners to help secure shelf space with retailers, which makes it harder to subsequently move that money. If an advertiser knows an event is coming up an advertiser can plan ahead to minimize the risks.

“We have [DTC] connections with 250 million consumers per year, which is growing at double digits annually.”

All those interactions are happening across a network of roughly 1,300 stores, pop-ups and e-commerce ventures, said Brito. And while China is home to the fastest-growing parts of those DTC revenue streams, Brazil, Mexico, Colombia, Argentina, and the broader LATAM region are also bright spots. As Brito explained: “We took the learnings from what we did in China with our DTC business and built best practices that we’re implementing around the world.”

For example, in Brazil, the brewer has started using customer data from its “Ze Delivery” platform to give those same customers a more personalized experience when they visit one of its own stores there.

Looking forward, Brito said the business would eventually expand its DTC businesses into western markets like Europe. Traditionally, CPG advertisers tend to build their DTC businesses in Asia first. Unlike markets like Europe and the U.S. where CPG business models are dependent on lucrative wholesale contracts with retailers, a DTC business in Asia won’t cannibalize those sales in the same way — unless its a rival.

“CPG companies tend to spend a few years testing DTC models in markets like China and LATAM where they can start to understand things like the lifetime value of a customer and average customer orders,” said M&C Saatchi Performance’s CEO Christian Gladwell, who has previously launched DTC businesses for CPG companies. “Those CPG companies can prove the DTC model in a lower risk environment.”

Once AB InBev understands the commercial value of each of its DTC businesses, it can then weigh up whether the gains of translating them to western markets outweigh the costs of doing so. Without a DTC business, CPG companies like AB InBev can’t tackle some of the inherent problems of their commercial models. Those businesses struggle to understand what their customers are worth because they sell to them via an intermediary. So, instead of being able to clearly see how much their sales are worth, CPG companies are more reliant on proxies like the number of crates shipped to retailers.

“DTC enables us to be closer than ever to our consumers leveraging technology to personalize experiences,” said Brito.

This is the second deal that the PGA Tour has signed in order to enable the organization it to collect revenue from the sports betting industry, according to Norb Gambuzza, svp of media business development at PGA Tour.

In 2018, he said the PGA Tour signed a licensing deal with IMG Arena that will licensing its ShotLink data for the purposes of sports betting. The product being developed by IMG is approximately three months away from launching and the deal is long term, he said, spanning upwards of a decade. He wouldn’t disclose the terms of the deal, but he said that the organization will continue to collect revenue throughout the years, instead of it being a one-time licensing deal.

For the past couple of years, sports publishers have increasingly viewed gambling as a source of revenue. Now, professional sports leagues are looking to publishing partners to help them get a cut of revenue from the sports betting industry as sports betting has been a legally stick area for these organizations to extend into in the past.

Last year, the major four professional sports leagues — the NFL, MLB, NBA and NHL — began lobbying state legislation to allocate fees from sports bets to the organizations after the U.S. Supreme Court ruled that states were allowed to legalize this form of gambling in May 2018, according to the Associated Press. Since the leagues have still not been legally granted a share of the revenue, organizations like the PGA Tour have begun looking for peripheral opportunities to gain revenue from the sports betting economy — like content partnerships that will bring in advertising and affiliate revenue.

“It’s a great opportunity for the Tour to participate in the [sports betting] category while allowing it to happen at an arm’s distance from them,” said Keane.

Gambuzza added that the PGA’s interest in getting involved in the sports betting space is more so in the adoption of official data in legalized sports betting. “Consumers will be protected if data comes from official sources versus third-party sources. The commercial side of that is something we’d pursue, but it’s not at the top of mind,” he said.

According to Keane, Action Network and the PGA Tour will share revenues made from both affiliate marketing and advertising, though he would not disclose the split between the two parties. The partnership will run through the 2021 PGA Tour Season.

In exchange for this, Action Network will gain access to the league’s footage rights to include in the publisher’s GolfBet video content, as well as official data from the Tour, including ShotLink Tracking. Keane said that the data is something that is particularly exciting because it will help inform his team’s reporting, analysis and predictions.

The way that affiliate revenue works from sports betting platforms is when a person goes to a site like Fan Duel from the publisher’s site and deposits money into their account for the first time, the publisher earns a fee from the betting platform.

According to Aaron Phelps, head of biddable media at Digital Fuel Marketing, which specializes in the sports betting media genre, publishers can earn anywhere from $250 to $500 per first time deposit.

On the affiliate side of the business from a consumer standpoint, the league partnership with the PGA Tour offers more legitimacy for Action Network as a betting knowledge source, according to Phelps. This could increase the likelihood that readers will click through to make a deposit on sports betting platforms, he said.

Keane said that the lion’s share of Action Network’s revenue currently comes from its subscriptions business, however affiliate has been the fastest growing portion of the company’s overall revenue. The affiliate platform was first built in earnest in last month, he said, so while revenue from that platform is “modest” right now, Keane anticipates that by the end of next year, it will be the largest part of Action Network’s overall revenue. He declined to disclose Action Network’s revenue figures.

“The name of PGA is impressive to top-tier advertisers,” said Josh Linforth, commercial director of sports betting media agency Genius Sports Media. “But from the consumer perspective, having the [proprietary shot data] will ultimately drive longer dwell time and more engagement,” which he said will help with both CPM rates for advertising and first time deposit rates for affiliate revenue.

No matter how clever or cutting edge your digital video content is, it’s virtually worthless without accurate metrics to measure its success.

At the Digiday Video Advertising Summit in Palm Springs, California, we asked ad executives about their confidence in the current state of digital video metrics. Their opinions varied when it comes to the present, but these leaders from Ciceron, Deutsch, Direct Agents and M/Six all agree that the future of metrics can only be brighter.

Here are some highlights:

• Andrew Eklund, founder & CEO, Ciceron, believes that wherever there is a problem — whether it’s from a privacy standpoint, identity verification or ad fraud — there are people willing to solve it.
• Lauren Tetuan, head of media, Deutsch, doesn’t have a lot of confidence in the current state of digital video metrics. While she’s concerned that frequency is not measured holistically and that we’re not always doing the right level of cross-device measurement, Tetuan is optimistic that things will get better — even if it’s an uphill battle.
• Dinesh Boaz, creative director and co-founder, Direct Agents, feels that to some extent the industry has gotten better at making sure brand safety and viewability are measured correctly, but acknowledges that ad fraud is still a present threat.
• James Chanter, senior partner, M/Six, feels that the answer to the question depends on what you’re looking to find. Basic metrics, such as engagement and click-through rates, might be easy to measure, but when it comes to thinking beyond that — such as measuring whether someone is engaging with your content or website post-video — there is still a lot of work to be done.