Month: June 2020

The initiative — which has been around since at least 2012 — means that if Google detects a lot of accidental clicks on a publisher’s ad unit then it will layer on a “Visit site” message so users have to click twice to get to the redirected web page. The additional barrier can deter people, leading to a drop in click-through rates and publisher ad rates. The result, according to sources for this story, is a drop in programmatic ad revenue of between 40% and 60%.

“People don’t want to talk about it because they feel they’re in the dog house,” said Mat Bennet, managing director at OKO which helps publishers monetize ads.

Bennet has spoken with roughly 25 publishers since last year who have run into issues with the initiative, these include global premium news publishers. He saw a peak of Confirmed Clicks activity in March before Europe and the U.S. went into lockdown.  

“Confirmed clicks is implemented to maintain a positive user experience when we see a high number of accidental ad clicks and inauthentic engagement,” said a Google spokesperson. “This also benefits the publisher who may otherwise see a drop in the value of their ad units or bidders even potentially excluding their sites. When we see an improvement in click quality the feature is automatically removed.”

“It’s getting worse, but I don’t see a plague of activity,” said head of growth at Yieldbird, Szymon Pruszyński, which works with 300 publishers. Pruszyński has spoken with four publishers over the last two months who were penalized. “It’s connected with the huge spikes in traffic” during the Covid-19 shutdown and quarantine.

One publisher working with Pruszyński was earning $10,000 a day through programmatic open exchange revenue, this dropped to $3,000 once the publisher was penalized for accidental clicks. The restrictions weren’t lifted for three weeks, making the loss revenue harder to swallow. And that’s exacerbated further by cost-cutting and battening down for an economic downturn. 

Publishers could also fall foul by simple site mapping problems, like content shifting while loading, not enough space around ads or navigation overlapping on specific devices, said Bennet. Of course, some of the accidental clicks could be fraudulent and publishers can see if they are hit with click confirmation by checking the source code. But it can be hard to spot. Mostly, it’s noticed by revenue plummeting despite impressions maintaining. 

Being asked to verify to enter a site can spook some users, said Pruszyński. Wary of malvertising or being scammed, people churn out entirely and click-through rates drop from between 0.8% to 1% CTR to 0.1%, taking a chunk out of revenue. Yieldbird also sees a drop in the number of pages viewed when sites have been hit with Google’s Confirmed Click initiative. 

And if Google perceives a problem with an ad unit on desktop, Google’s demand-side platform stops bidding and buying across all ad units. Typically if a publisher has up to 15 ad units across desktop and mobile, that can turn into a very real problem. 

While everyone agrees with the spirit of the initiative—accidental clicks don’t benefit users or advertisers—like a lot of platform improvements, the issue is about communication and notification. Blanket approaches to cutting off entire revenue sources seem arbitrary and punitive, sources say.  

“Some publishers have a problem for eight or 10 weeks,” said Bennet, who works on the basis Google uses a 30-day rolling average for checking for accidental clicks. “You never quite know if you fix everything. What we advise is to go in hard and make drastic changes. When the problem is removed then you can bring back in units to slowly get the revenue back up.”

In order to ensure that not only the number of subscribers was increasing but subscription revenue increased as well, Horrigan said experimentation was key.

The big question, especially for subscribers that have flooded in due to the coronavirus, is whether they will stick around beyond the pandemic.

“If it is indeed a different cohort, you have to look at what it was that got them to convert — then keep doing it. Most important thing is to deliver on what that expectation was from those people that converted,” she said.

In the latest edition of the Digiday+ Talks, where speakers focus on instructive and actionable content, Horrigan talked about experimenting for customer retention beyond the coronavirus, tips for messaging and marketing, and using propensity models to prioritize engagement.

Digiday+ members can access slides and full video of the Talk below.

Managing churn

The pandemic led to increases in page views —Bloomberg had 120 million unique visitors across its digital network in March — as well as a boost in the number of active subscribers. Though the rate of new subscribers acquired during the pandemic has come down since its peak, Horrigan said that the company has achieved a sustained growth in new acquisitions that still remains about four times what its previous daily average was in terms of new subscribers. 

“We are also seeing sustained churn and some cohorts are looking like they are performing better than some of our benchmarks as well,” she said.

• “The question is, are these fly by night? I don’t think so, at least for us,” said Horrigan. “It just may be that the critical nature of the coronavirus got them off the sidelines a little bit faster but they weren’t necessarily new people that hadn’t had any exposure to us before.” 
• The subscribers that were acquired during the pandemic, Horrigan said, have been more likely to do a monthly or three-month subscription. 
• From a retention standpoint, Horrigan said these subscribers are behaving similarly to how typical subscribers behave when they’re first coming on board. The monthly option, for instance, is rather typical of people because “most people want to get used to it before you lock into something long term,” she said.

Being experimental is key

Horrigan said that this week when she checked in with her team, she learned that there were 30 experiments running concurrently across the site to try and improve the subscription business. Some of them, she said, are a win, while others are not successful, but across the board, the experiments build off of each other and allow her team to be nimble in how they strategize to reduce churn and increase acquisition.

She shared two recent experiments tied to acquisition and retention that yielded positive results:

• The first test manipulated the messaging on the yellow paywall banner. Version A of the banner used the basic marketing messaging with the term length and pricing. Version B included that same messaging, but added topical and contextual language related to the article page that the reader was on. For example, an article about markets would have a line saying “Stay on top of historical market volatility with Bloomberg’s global coverage.” 
• The second test focused on retention and targeted a cohort of subscribers that were identified as being more likely to churn once their subscriptions were done. Proactively, Horrigan said her team began offering a longer term subscription to those readers at a reduced rate that would lock them versus allowing them to churn after their few-month-long subscription was over. 
• The first test yielded a 5% increase in revenue on the banners that included topical messaging. The second test reduced the churn of that cohort by 10%, but it also drove revenue up by 74% because those readers were moving into a more expensive and longer term subscription offering.

Using a propensity model for acquisition and retention

There are 30 attributes that Bloomberg Media measures when trying to understand its audience and their propensity to become and stay subscribers, Horrigan said. This enables her team to have an individualized experience for each of the readers who are interacting with the brand.

• Some readers may be more price-conscious, while others are likelier to be focused on the content. Bloomberg uses technology that tracks these behaviors and allows readers to have a very individualized experience when considering whether or not to become a subscriber, making it more likely that they will be persuaded. 
• “The cool part of machine learning and algorithms is that you can’t parse it apart. It’s taking those 30 attributes and determining what is the best experience for that person,” said Horrigan.
• She said, however, that one recurring theme regardless of the individual is that engagement is of the utmost importance. “If you haven’t been engaging with us recently, your likelihood to subscribe is going to be lower and your likelihood to churn is going to be higher.”

“We saw that and reached out to Amazon. Our rep said it didn’t apply to us,” said Emily Kerr, vice president of growth at Gallery Media Group, the parent of women’s lifestyle site PureWow. 

Major publishers who do business with Amazon seem to be spared from the cuts — for now. According to people familiar with the matter, rates have remained the same for commerce publishers including CNN’s Underscored, The New York Times’ Wirecutter, and Vox Media/New York Magazine’s The Strategist. 

“When that news went around and really worried the staff, we were assured from our business team that the relationship was strong and doesn’t reflect that exact news,” said one source at a commerce publisher.

High-volume publishers typically have their own unique deals with Amazon, unlike the hundreds of thousands of other sellers, such as YouTubers, smaller websites, and individuals, who use Amazon’s affiliate program. For normal affiliates, Amazon cut rates significantly beginning April 21 for product categories like furniture and home improvement (from 8% to 3%), groceries (from 5% to 1%), and beauty products and business supplies (from 6% to 3%). 

The cuts have hit smaller affiliates harder than large publishers. More than 18,000 people have signed a Change.org petition requesting Amazon change the rates back. 

Amazon declined to comment for this story.

While bigger publishers were relieved to learn that the Amazon changes didn’t apply to them, the episode has nevertheless highlighted the ever-present danger of relying too much on platforms. It’s a lesson media companies have had to learn the hard way before, and now publishers are bracing for Amazon to change their mind and alter the affiliate arrangements for them, too.

They felt changes might have been on the horizon in March, when Amazon asked some top publishers to deemphasize Amazon links in their content as it faced supply chain pressure in the massive rush of orders during the coronavirus shutdown.

Publishers have also been hit with affiliate fee cuts from other retailers like Walmart facing the coronavirus crunch, particularly when it comes to home goods and necessities like cleaning supplies. Still, media executives say they are enjoying a commerce boost as readers stay at home and aggressively shop online. 

Ryan Harwood, the CEO of Gallery Media Group, said that the company had seen a more than 66% year- over- year uptick in affiliate revenue, particularly in categories like home, beauty, wellness, and food. Gallery plans to create more commerce products to roll out in the future. 

“The silver lining here is that Covid has lent itself to a period of real innovation based on shopping behaviors we’ve seen spike dramatically from our consumer base,” Harwood said. 

Publishers are nonetheless girding for Amazon to reduce the rates. In fact, they’re almost morbidly certain that the retailer will alter the rules of the game. In March, Digiday Research found that 68% of media executives expected commerce revenue to decline this year due to the outbreak.

“We’re in a moment that the entire economy is up in the air and we have no idea what the future is going to be from a consumer standpoint and from an affiliate industry standpoint,” said the commerce publisher source. “We don’t know if the current affiliate structure will last forever.”

Most (52%) are still working on those revisions, per a survey of 151 marketers and agency execs from Advertiser Perceptions. And just three in 10 (29%) of those surveyed said they already have a new strategy in place.

While this summer would seem ideal for companies to reboot, few can afford to go dark, coming off a written-off second quarter. Retailers have inventory backlogs to move, restaurants are opening and “normal” economic life is grindingly returning.

More than half of advertisers still plan to ramp up ad spending in the third quarter, while 28% are accelerating spending before the end of June, per Advertiser Perceptions.

“When the macroenvironment is tough that’s when you still have to make sure that you have the presence in the market to build longer-term relevance,” said Anthony Bradbury, marketing director at Jaguar Land Rover U.K., who is overseeing the Jaguar brand’s return to TV this month. “It’s the most dangerous time to go dark.”

Coca-Cola is planning to restart its marketing after it paused the bulk of its advertising during the lockdown. Barbara Sala, strategic connection and media director for Coca-Cola’s Central and Eastern Europe business unit, said at the IAB Europe Interact conference earlier this month that real-time content production, streaming and distribution would play a bigger role in how Coca-Cola creates and buys ads. Adjustments are being made to ensure those recovery plans are flexible, not fixed. 

“Advertisers are having to adjust their market, creative, and media strategies more sharply and rapidly than ever before,” said Justin Fromm, evp of business intelligence at Advertiser Perceptions. “They’re counting on media partners to help them do it, by continuing to waive cancellation penalties, reallocate budgets to different properties, and reschedule campaigns for when the budget and consumers are there.” 

The way advertisers realize those recoveries vary widely. 

Six in ten (58%) of advertisers say its time to replace coronavirus messaging with product-specific ads, while 44% are hamstrung by the difficulty producing new creative due to social distancing guidelines and lingering stay-at-home orders, and half aren’t sure what their message should be, particularly as coronavirus and the economic cataclysm have been joined by social unrest. 

Even with live sports returning, advertisers are wary of spending their media dollars without greater flexibility to only pay for what is shown. Buyers are demanding contingency clauses and clearer protections against lost income from broadcasters to mitigate the potential blow of further cancellations. This could lead to more diverse rights deals that go beyond live-action such as behind-the-scenes footage and fan-led content. 

“Undoubtedly, people are going to develop language that is going to be applicable to these types of deals,” said Irwin Kishner, a co-chair of the Sports Law Group at Herrick Feinstein. “Those clauses are going live on for many years.”

These challenges are compounded by restricted cash flow, with sales down across a number of industries. Indeed, most (54%) businesses cite cash flow as their most pressing concern going into the second half of the year, per a survey of 701 clients Dentsu conducted last month. Cash flow uncertainty is pushing some advertisers to focus on customer retention over acquisition, with CRM coming to the fore for some going into the latter half of 2020. For example, CRM is set to be a crutch for automotive marketers. Cars tend to be the second most expensive purchase made by consumers, meaning the market is sensitive, particularly to rising unemployment.  

“We’re getting back to business as normal now that showrooms are reopening and my role is now focused on helping customers with their next vehicle purchase an informing them that their car is due a service,” said Mark Benton, CRM manager at Lexus. 

As lockdowns ease, there’s a willingness among many advertisers to deviate from their tried-and-tested media plans. According to Advertiser Perceptions, more than half of the advertisers had planned to advertise in postponed live programming, and 75% of them are open to “acceptable substitutes” — particularly in entertainment, lifestyle and gaming video content. It’s the same for social media where some marketers see audiences going now to feel part of something bigger during these testing times. 

“With the current situation, people are using social media more so there’s a chance to reach more customers by focusing our advertising there,” said Yann Le Bozec, EMEA marketing director at Crocs. “As part of those changes we’ve given our influencers a new creative brief to not only ensure that we’re asking them not to do anything that compromises their safety but also to focus on promoting our core products.” 

At the same time, advertisers are fortifying investments in addressable channels where it’s easier for them to not only move money in and out but also to optimize. They’re encountering sudden changes in consumer behavior, product demand and marketing budgets so they need to have tighter control their timing.

“Brands are not making as many long term commitments,” said Terena  Patrick, global director of media strategy at PHD U.S. “Advertisers are looking for flexibility as much as possible to address the constant changes in the world right now. Perhaps the norm was to commit to six months and now those brands are buying two or three months at a time instead. So the dollar amount may not change, just the commitment cadence.”

Currently, advertisers and agencies are waiting on the NBA to release the TV schedule for games. After play resumes on July 31, the league has said it expects to play five to six games per day to finish the regular season before beginning the playoffs, which may feature weekday afternoon games and will run until Oct. 12 at the latest. 

The condensed early schedule and expected collision with other sports has agencies drafting scenarios for how a glut of games may affect viewership. “Inherently, there will be an initial spike and maybe some falloff,” said one agency executive. Agencies are also talking with the TV networks to understand how they might schedule games to mitigate overlap among various sports. 

“People traditionally really try and give each other space so everybody can have their moment. I don’t think we’re going to have that luxury this year,” said Tim Hill, evp and managing director of integrated investment at UM.

To be clear, advertisers have a large appetite for live sports, which remain the foremost way to reach a broad audience. Ever since March when the NCAA canceled March Madness, the NBA and NHL halted their seasons and the MLB postponed its start, advertisers have been going after anything that sniffed of sports. 

ESPN’s “The Last Dance” documentary series on Michael Jordan and the Chicago Bulls launched a bidding war among advertisers for the final sponsorship slot that ultimately went to Facebook, said the unnamed agency executive. Several NASCAR races on Fox have already sold out despite advertisers historically being able to buy that inventory outside the upfront without paying a premium, the executive added.

Moreover, there is a lot of pent-up demand among advertisers that have been waiting specifically for the NBA’s return. Many of Omnicom Media Group’s clients that had been set to advertise against the NBA opted to keep that money in a holding pattern until the league’s season resumed, said Jeremy Carey, managing director of Optimum Sports, Omnicom’s sports marketing agency. Havas Media has held on to all dollars that had been earmarked for the NBA, said Gagne, noting that the NBA attracts a younger audience “that is not readily available on television, whereas football is just broad.”

Concerned as advertisers are about people’s willingness to watch the fifth NBA game of the day or a second-round series that matches up against Tom Brady, those concerns are unlikely to lead advertisers to redirect dollars away from the NBA. But they will inform how advertisers allocate those dollars against games. “We feel like we’re in a pretty good place with the dollars. It’s going to be about how we lay them in as it pertains to the end of this season,” Carey said.

Besides, with fall TV programming pipelines delayed by the production shutdown, people may not have much else to watch. “That glut of sports is not just filling the sports we miss but also filling the perceived entertainment hole we may see in the fall,” Gagne said.

Trend watch: Supporting civil rights

TV networks and YouTube stars are stepping up to support civil rights groups doing the invaluable work of fighting against discrimination.

• Comcast and WarnerMedia as well as local TV ad seller Viamedia have offered to run ads for free for organizations, such as Color of Change and the NAACP Legal Defense Fund.
• Meanwhile, YouTube stars including Zoe Amira and Carmie Sellitto have said they will donate some of their ad revenue to organizations, including Black Lives Matter and the Minnesota Freedom Fund.

I’ll admit to not knowing how to play my part in the context of this newsletter and my coverage of the broader TV and streaming video industry. I will change that. I will work to talk to a more diverse array of people within the industry so that I will be more aware of and understanding of not only how these societal issues affect the industry but how the industry affects these issues. If you can help me with this, please do; my email is tim@digiday.com. 

Confessional

“Budgets have definitely gotten considerably smaller. I think it’s like payola for publishers where they’re just trying to garner goodwill.”

Media executive on budgets for Facebook Watch shows

Stay tuned: Return to physical production

Shows and movies can return to production in California on June 12, California governor Gavin Newsom announced on June 5.

Precautions are already being planned. Hand sanitizers everywhere. Face masks on everyone. Store-bought boxed lunches instead of craft services. Temperature checks. However, these safeguards cannot ensure that shoots are 100% safe. Any return to production will carry some risk

However, despite these safeguards, any return to production will carry some risk. And producers are finding they are the ones being ask to bear the brunt of that burden.

Some industry unions are saying that they will not allow their members to sign liability waivers that would clear producers of responsibility if someone catches coronavirus while on set, according to two industry executives. Making the matter more challenging, some producers are finding it difficult to obtain the necessary insurance to protect them against that liability.

“It’s a tricky dance,” said one producer.

Numbers don’t lie

$300,000: How much money Discovery has saved per average hour of content by producing shows remotely.

What we’ve covered

Brand advertising return spurs social video ad bounce-back:

• Advertisers are spending more money on social video ads to promote businesses opening back up.
• Advertisers have moved money from TV and out-of-home placements to social video platforms.

Read more about social video advertising here.

Publishers’ platform video ad revenue begins to rebound:

• After bottoming out in April, publishers have seen video ad dollars bounce back across Facebook, Snapchat and YouTube.
• The recovery has been strongest on Facebook and Snapchat, publishers said.

Read more about platform video ad revenue here.

Disney adds Hulu to upfront deals to bolster streaming pitch:

• Disney will sell Hulu’s inventory alongside its own linear TV and digital inventory.
• A new ad program will package Hulu and Disney’s digital inventory as a standalone option.

Read more about Disney’s upfront pitch here.

Protests put tone-deaf influencer marketing in the spotlight:

• As protests against police brutality continue, marketers are pressing pause on influencer campaigns.
• Questions have arisen about diversity in influencer marketing and the need for brands to get comfortable with influencers taking a stand.

Read more about influencer marketing here.

What we’re reading

Connected TV sustains spike
Since the quarantine began in mid-March, people have been watching a lot more TV. However, while traditional TV viewership has ebbed to pre-crisis levels, connected TV viewership has remained high, according to Nielsen.

TV viewership gap grows between NFL and everything else
The Hollywood Reporter has done the math on the past season’s primetime TV viewership. It will surprise no one to hear that NFL games attract the biggest audience, but it is stunning how many more people tune into NFL games compared to the average TV show (and how many people watch “NCIS”).