Month: June 2020

In fact, it’s music marketers who are adapting to this pitch fastest.

Music publicists like Kate Marlys, owner of Philly PR Girl, see similarities in the way artists and record labels work together to grow both their businesses and image in tandem with the reciprocity that’s developing between artists and TikTok. The app’s feature to let any user upload original sounds to their posts has made it a valuable resource for big and small artists looking to get bigger. Indeed, Marlys is in discussions with TikTok now on behalf of an up and coming musician who wants to get his songs on TikTok videos ahead of his album launch later this month. These sorts of deals enhance TikTok’s ability to tap creators to help build an audience and encroach further into original content and e-commerce. 

“TikTok is much stronger at the media and entertainment side,” said Andrew Rajanathan, a global director at media agency Zenith. “We are seeing far more focus on creators versus strong aesthetic quality. Most notably, we’ve seen the first emergence of a TikTok house for creators who build exclusively for the platform.”

While talent is the driving force behind media companies, they make money from content and distribution. TikTok’s focus on monetizing individual creators is a new concept for many advertisers to get their heads around. Some like Kellogg’s and Crocs realize this talent plus ownership and distribution model is key to how they thrive on TikTok but aren’t sure how they do it given its not really a communications platform in the same vein as other social networks. The few advertisers that have had early wins on the app are those that have found ways to build a defensible intellectual property around the type of quirky, goofy content that thrives on the app. 

Of the 602 job vacancies at TikTok, nearly 10% (55 of the roles) are focused on talent management, per LinkedIn. In the last month, it’s become clearer why TikTok wants so many talent management execs; the app struck a deal with the talent management arm of Evos Esports that will see it act as both an agency and a platform for the team. Around the same time, it also secured access to more than 850 music managers in the U.K. via the Music Managers Forum as a way to solidify its status as a platform for artists and record labels to build new revenue streams. The clearest indicator of TikTok’s growing focus on monetizing talent, however, is its recent appointment of former Disney+ boss Kevin Mayer, who’s expertise makes him more suited to fulfill the entertainment and media ambitions of TikTok than necessarily the advertising ones. 

“The aspect that stands out for me — even at this early stage of our own tests on TikTok – is the time and effort people put into creating videos on the app,” said Roisin Devine, digital manager for Pringles in Europe, who recently tested a user-generated campaign on the app. “It’s a creative platform in ways that we’ve not seen on other social networks.”

When ByteSized Talent, the talent management arm of agency FanBytes, decided to launch a Big Brother-style show in March with six of the U.K.’s biggest TikTok stars together in a house, the plan was to sell it to advertisers as a media brand, not a standard influencer play. Sponsors like gaming business What Do You Meme work with the production crew behind the show to come up with ways to they can be a seamless part of it like when the housemates play the game on games night. So far the tie-up has delivered 4.6 million views and the posts have had a 23% engagement rate for the gaming advertiser. 

“The housemates are playing What Do You Meme and as they do they’re saying the name out loud and there’s a link for viewers to purchase it,” said Timothy Armoo, CEO of FanBytes. “It’s not so much a product placement deal in the traditional sense because we’ve created the idea of the games night with the brand, rather than the content first. In doing so its a more seamless experience. There wouldn’t be a movie night on the show without our client.”

The potential for more of these types of activations on TikTok is significant, as the lack of an easy way to monetize content has held a lot of creators back from using it. Often, creators build a presence on TikTok in the hope that if successful they could move into film, music and everything else off the TikTok platform. 

“There’s an opportunity for advertisers on TikTok because there isn’t the saturation of content that you have on other platforms like Instagram,” said Jide Maduako, CEO of the influencer platform Yoke Network. “It’s fresh land where advertisers can take advantage of the fact that what people are seeing hasn’t already been shown elsewhere.”

Dressler and Waud used to derive a significant portion of their income selling merchandise to their fans on tours or at meet-ups. However, as these events have been canceled due to coronavirus and stay-at-home orders, they’ve sought to find another source of revenue online. 

And they see games as the future. 

Most of Waud and Dressler’s content on the app remains focused on dance and comedy, but both stars are big gamers themselves, and say gaming will take a more prominent role on the platform in the coming months. 

“Gaming is something new for the platform and it’s a different type of content, so it can bring more attention to my page,” Waud said. 

Gaming on TikTok is mostly clips from games, highlights, and news videos, according to Wilhelm. But TikTok’s new CEO Kevin Mayer has already stated that one of his goals is to expand the presence of gaming on the platform, and live streaming capabilities specifically for video games could be a part of that. TikTok parent Bytedance has already made a push into gaming, mostly in China with a new gaming division that makes its own games. 

In January, TikTok worked with Epic Games and asked TikTok users to create a new Fortnite Emote; users shared their submissions on TikTok in January with the #EmoteRoyalContest hashtag. And last month, TikTok collaborated held an esports competition with the Collegiate StarLeague. A spokeswoman for the platform said it will add more gaming content this summer.

Internet gaming stars such as Ninja, who has more than 23.6 million subscribers on his YouTube channel where he posts videos of his games, have already started posting gaming content on TikTok. Ninja has built a following of 3.2 million on the video sharing platform and has received more than 17.3 million likes.

TalentX Entertainment, which manages a roster of TikTok creators, including Waud, Dressler, and Sway Houses members Josh Richards, Griffin Johnson, Anthony Reeves, Bryce Hall, Kio Cyr, and Jaden Hossler, recently partnered with esports company ReKTGlobal to create TalentX Gaming. The joint venture will seek to bring more TikTok stars into the gaming world that already exists on YouTube and Twitch and expand gaming content on TikTok itself. 

“These TikTok stars are the next big digital creators, and there are opportunities for them in the gaming world,” Jason Wilhelm, a YouTuber who started a channel in 2011 with Call of Duty gaming content, and now serves as CEO of TalentX Gaming, said. 

TikTok stars would have the ability to advertise the games they play, include ads when they live stream their games, and partner with gaming companies.

“If you start gaming on the platform, you can now go to Xbox and say, ‘hey you’re launching something new next year, you should get me on board, I’m a massive gamer.’ There are more revenue opportunities for the creators across the board,” Wilhelm said.

TikTok experienced a 15% rise in average daily traffic between January 21 and March 24, according to a report by The New York Times.

The video-focused nature of TikTok could allow it to compete with streaming platforms such as Twitch, Wilhelm said.

“TikTok has an opportunity, if they do it fast enough, to take on the entire streaming market,” Wilhelm said. “A lot of these TikTokers are big gamers, and if they had the opportunity to stream their games on TikTok, they would do it in a second because it would be so easy to start and run ads on it to monetize.”

“Gaming is a world of its own when it comes to brand and influencer partnerships. The pay is usually significantly higher than other verticals,” Mae Karwowski, the founder and CEO of influencer marketing agency Obviously, said. “First, there are simply fewer creators to work with who are talented enough at gaming to develop a large audience. [And second], these creators have a captive, target audience […] that already love and spend time and money on gaming. That’s pretty priceless for a brand.”

Wilhelm told Digiday he hopes to help TikTok stars produce more gaming content on TikTok itself and allow them to expand onto other platforms like YouTube and Twitch where they can film their games and run advertisements within those videos to monetize their content.

“Rates for influencers on TikTok are still being defined across the industry, [so] TikTok influencers are turning to platforms like YouTube or Instagram where brands will often pay more for their content, especially with gaming,” Joe Gagliese, co-founder and CEO of influencer marketing agency Viral Nation, said. 

“When you have a 30% or 40% engagement rate on Instagram, if you’re able to capitalize on that, you’re able to catapult yourself into being one of the biggest digital creators,” Wilhelm said. “These TikTok stars’ fans will go where they go, so now is the perfect time to move into gaming.”

He compared today’s TikTok creators with the Vine stars from a few years ago. “You look at the ex-Vine stars, the David Dobricks, the Logan Pauls of the world, they’re the biggest digital creators right now, the most mainstream in digital. And when you look at the fanbases of these creators, they’re very similar to these TikTokers. They both have cult-like followings.”

Successful Vine stars built their careers by moving their audiences onto Instagram and YouTube. Wilhelm believes TikTok stars could leverage their fan bases to create careers in the online gaming world.

“Gaming gives you another way to monetize your platform,” Wilhelm said. 

Sports media and betting are on their way to being inextricably intertwined.

“If you look at the traditional way sports betting has been launched in Europe and even in North America — in the offshore and black markets — how people bet is through betting apps,” said to John Levy, CEO of theScore, a Canadian sports media company.

Those apps aren’t where betters get their actual score lines and injury updates; they’re where gamblers turn to once they’ve watched the game or read about it elsewhere.

“They’re nothing more than a transactional app,” Levy said on the Digiday Podcast.

Close to half of U.S. states (and Washington, D.C.) have legalized sports betting to some degree in the two years since the Supreme Court struck down the law that banned it nationwide.

Sports betting may be on hold right now, but publishers like Barstool Sports — purchased by gambling operator Penn National Gaming in a deal that valued the company at $450 million — have been betting on the category growing once sports comes back later this year. Like theScore, the acquisition will allow one company to facilitate wagers while also providing betters with the sports news they base their risk-taking on.

The industry is estimated to be worth $8 billion by 2025.

Levy thinks legalization will be accelerated by the coronavirus pandemic’s effect on public funds at a state level.

“That’s trillions of dollars that they’re now trying to recover, and I don’t care what side of the political fence you’re on, the reality is the governments are going to have to start to figure out how to replenish those coffers,” Levy said.

A majority of theScore’s users bet on sports instead of just reading about them, Levy said, citing third party (and the company’s own) data. Nearly half of the bets happen while the relevant game is in play, and despite being a Canadian company, 70% of theScore’s users are in the U.S.

Here are highlights from the conversation, which have been lightly edited for clarity.

Putting the sports coverage and sports betting in one place

“Betting is a part of sports. News flash. It’s always been there, it will always bet there, it survived years of people having to go to the corner and deal with the thugs, bookies and mobsters. And then it went to offshore gray markets, and the U.S. particularly tried to stop that, but it continued on. If you look at the traditional way sports betting has been launched in Europe and even in North America — in the offshore and black markets — how people bet is through betting apps. They’re nothing more than a transactional app. I think about what I want to do, I talk to my friends, I go to a game, and [when it’s] time to make a bet, go to a betting app. What our philosophy has always been is — because betting is just one more reason people are passionate about sports — don’t treat it as this behemoth thing that’s way out there. Just integrate it.”

Staying bullish on sports in 2020

“We were very fortunate in that we had capital in place prior to the pandemic because we were building for this enormous onslaught of sports betting. When the pandemic hit and everything shut down, obviously it affects everybody. We had to tighten our belt and cut expenses. But we didn’t have to lay off anybody. We kept our whole team working full steam ahead because you knew it was going to come back at some point. There’s so much pent-up demand for sports — to watch it, to bet on it. We kept our focus building our product. We want to be ready when this onslaught comes back. You’re going to see a lot of sports all at the same time. You’ve got baseball, basketball, hockey and then football coming on, it’s going be like March Madness every day.”

Budget shortfalls could drive faster legalization

“We were more aggressive than most in terms of thinking about how many states are going to [legalize sports betting] over the next two years. And now we’ve revised our projections because we think a lot of the states that were ‘on the bubble’ because they were nervous or listening to some of their lobbyists that had vested interests [will legalize it]. [States] spent where they had to spend. Businesses had to be supported, people had to be supported in continuing to work. But that’s trillions of dollars that they’re now trying to recover, and I don’t care what side of the political fence you’re on, the reality is the governments are going to have to start to figure out how to replenish those coffers.”

Battling bigger incumbents (and not just ESPN)

“You always have to be able to attract enough capital in your business to be able to do the sort of things that you ought to do. But you also want to be smart about it and how you deploy the capital. You want to be authentic and connect with the sports fan. There was a growing disconnect between what the traditional TV sports guys were doing and what the end user wanted. There’s a million factors for it. Historically, what did I do? I used to sit down in front of the television set and watch ‘Hockey Night in Canada’. You didn’t have all these other distractions. There’s a lot of generational stuff going on here too. Kids, there’s so much taking their attention that they’re not going to watch a four-hour game.”

Join us this Friday, June 5 at 12 p.m. ET on The New Normal, a weekly interactive show focused on how publishers are adapting their businesses. Chad Mumm, SVP of Entertainment at Vox Media Studios, will talk with Digiday editor-in-chief Brian Morrissey about its approach to remote video production and the future of live-streaming. Register here.

“There isn’t one DSP today that can satisfy all the complexities of connected TV,” said a one agency executive.

Ironically, those complexities are why ad buyers wish they could consolidate their CTV ad buying to one DSP. The convoluted CTV ad ecosystem — in which media companies, CTV platforms and ad tech firms can each sell the same inventory — creates issues where an advertiser’s ad can be shown too many times to the same person. Funneling money through a single DSP makes it easier for an advertiser to manage what inventory it is buying and to control how often someone may see its ads. 

However, not all DSPs are able to access the same inventory or use the same data, as Amazon and Roku are making clear. Over the past two years, Amazon has pitched advertisers on using its DSP to buy ads on its Fire TV platform that can be targeted using Amazon’s shopper data. This year, Roku has rolled out a similar pitch. After acquiring ad tech firm Dataxu last fall, Roku rebranded Dataxu’s DSP as OneView and made it a centerpiece of its upfront pitch to advertisers this year. For example, Roku will guarantee lifts in site visits and mobile app installs for advertisers, but only for ads bought through OneView.

“The idea of using multiple DSPs isn’t ideal unless the DSP in question offers something very compelling, and at first look, they do,” said a second agency executive of Roku’s OneView platform.

Amazon’s and Roku’s DSP are compelling primarily for buying ads on their respective CTV platforms, though. By contrast, advertisers’ CTV buying is not specific to certain platforms. “I see very few clients who are saying they want to buy connected TV but only on Roku,” said the second agency executive. 

That keeps independent DSPs like The Trade Desk in the mix. The independent DSPs are usually better suited to advertisers’ publisher-centric buying strategies, such as the private marketplace deals that advertisers set up with individual media companies that span their streaming apps across CTV platforms — including Apple’s, Samsung’s and Vizio’s platforms — as well as their sites and mobile apps. However, while the independent DSPs can buy ads on Amazon’s and Roku’s platforms, their access to inventory and data is limited compared to the platforms’ DSPs.

The multi-DSP setup may not be ideal, but it is manageable so long as advertisers coordinate their campaigns across the different bidders. For example, an advertiser can use Amazon’s DSP to buy ads on Fire TV, Roku’s DSP for its platform and then set up The Trade Desk to not buy ads on those platforms. “For connected TV, [using multiple DSPs] is the right approach because you’re going to be working with the strongest level of data fidelity for targeting and measurement,” said a third agency executive.

But Amazon and Roku are not content selling ads solely on their own platforms. Roku’s DSP is already able to buy ads on other platforms by plugging into different programmatic marketplaces and setting up deals with publishers to make them available to OneView. Considering the growing Facebook-Google dynamic between Roku and Amazon, agency executives expect that Amazon will try to access more off-platform CTV inventory for its DSP. However, so long as Roku and Amazon are able to give their own DSPs an advantage on their own platforms, neither DSP is likely to arise as the sole DSP for CTV advertisers. 

“Consolidating to one DSP is not the best move anymore,” said the third agency executive.

This conversation has been lightly edited and condensed for clarity.

Are you talking to your clients about the Black Lives Matter protests? 

Most of my clients are white. We’re talking about what’s happening and we’re talking about white privilege today. I don’t know of any better opportunity than to have this conversation right now. If we can’t talk about what’s happening, I don’t know if I want you as a client. People are asking about how the weekend was and I’m honest with my clients that it was very emotional. [As far as campaigns go] we’re delaying Pride campaigns and talking about which organizations to donate money to.

Brands have posted support of Black Lives Matter. What do you think of the responses so far?

If big brands want to tweet and say they care about Black Lives Matter, they also need to start donating money and they need to help non-profits. At the same time, they need to make sure there are more people of color in their leadership who represent the people who buy the product including people from the black community. But these organizations don’t care about that.

Why do you say that?

Brands want to be able to pat themselves on the back, change their Instagram profile picture and think they’re done. Changing your profile picture is the laziest thing you can do. It’s the new status quo. I want to see money, I want to see checkbooks out and donations happening and I want to see receipts. Until I see that, I don’t want to see these companies changing their profile pictures for Black Lives Matter or for Pride. Pride started because of a riot.

There’s been a focus on diversity and inclusion in recent years. Do you think it’s led to change in the ad world?

No, I don’t think so. Some black people got hired and made good money for a year or two but actual change within the organizations hasn’t happened. It’s still mostly 12 white dudes and maybe one white woman on an executive team. There are still problems and issues.

Could you give us an example of an ongoing issue?

Everyone still says there’s a [talent] pipeline problem. There aren’t pipeline problems it’s just that there are still a lot of white people who don’t want to hire a person of color who would quite frankly kick their ass and do a lot better at the job. I’ve been in too many jobs where mediocre white men keep failing up and no one does anything because when you do say something you’re the angry black person.

Why do you think there still isn’t real change inside agencies?

People love to go to conferences and listen to people talk, it makes you feel like you’ve done something but you haven’t done anything. When you’re not putting your money where your mouth is then it’s all just talk. Agencies aren’t getting to the root of the problem which is HR, too many managers, too many mediocre white people deciding who is hired and fired. The people who make the final decisions are usually CEOs and they’re white males who don’t want to change the status quo. It’s great PR to say you’ve made this major hire but what has actually changed?

Do you think the hiring issue is also happening within brands?

If brands give out money and the executive or leadership team doesn’t have a person of color? That’s a problem. If you make tons of money off of black athletes and black culture but no one on your executive team is a person of color? That’s a problem. When someone like Beyonce says she’s not going to work with your brand because there’s no one on person of color to work on her team at the brand and you still haven’t changed? I don’t know what to say. You just lost a huge contract deal because you want to be complacent. 

What do you think agency leaders should be doing to help black employees now? 

If you run an agency, whether it’s five people or 500 people, at least 5% of your organization should be black — 13% of the U.S. population is black — if that’s not the case, you need to first fix that. Then, ask the people of color in your organization what to do and do what that person says but understand that that person’s opinion isn’t everyone’s opinion. I told my client this morning, “My opinion does not represent every black person.” When in doubt, give your employees time off to recharge or go to protests in the area and donate money from the agency to a non-profit.

“Asking readers to sign in provides us with more information that we can use to personalize our approach in asking for support, to serve advertising (with readers’ consent) and to create a better user experience,” the post said.

Clicking on an article, readers see a message asking them to register for free to keep reading, although registration is not compulsory and readers can click a “Not Now” tab. In April, the publisher started running a similar test, piquing the interest of media onlookers. Signed-in users get perks like being able to leave comments, access to editorial newsletters and can opt-in to receive discounts or special offers. This also gives valuable insight into content preferences, for instance, The Guardian’s support messages reference how many articles you have read that month.

“It’s a good move,” said senior analyst at Enders, Alice Pickthall. “Registration is part of the funnel to growing reader engagement and donations while improving advertising quality and targeting so the benefit will be twofold to both strands of revenue.”

Registration walls beef up first-party data, which power subscriber acquisition, retention and enhance ad products. More publishers, like The New York Times, Hearst Newspapers and Tribune Publishing, have given registration walls another look over the last year. Publishers get visibility of content preferences and can tailor products and content, increasing subscriber acquisition. The subscriber conversion rate is 10 times higher for known users compared to anonymous users, according to subscription platform Piano.

First-party data is also the power behind retention. “You can’t do good churn analysis without first-party data,” said media analyst Thomas Beakdal. Nordic publisher Schibsted was able to increase the number of people who didn’t churn by 10 percentage points because it could map out people’s cancelation journeys through its first-party data. 

The other goal in building out valuable publisher first-party data is to gird against the dying third-party cookie, a push publishers like The Washington Post, Vox and Business Insider are also making. A registration wall, where readers enter details like email, address and title, forms more robust audience segments that advertisers can target, and increases the premium it can charge for ads. Last week, not yet a year after introducing its registration wall, The New York Times said it was swearing off all third-party advertising data.

The Guardian maintains a strong stance that its journalism remains free and open to all, especially during a pandemic when access to accurate information is fundamentally a civic right. The move is not a paywall or the first steps towards one. 

Now is a time of high traffic and low ad revenues. Globally, The Guardian’s unique browser numbers reached 366 million in March, doubling from February’s record of 191 million, according to internal figures. The number of both regular daily and weekly visitors have increased by a third. Readers clocked up 2.17 billion page views in March, an increase of over 750 million on the previous record set in October 2019. 

Traffic to news sites is beginning to taper but remains higher than pre-pandemic. In April in the U.K., The Guardian had 34.7 million monthly unique users, down from 35.7 million in March, according to Comscore. That’s a big leap from February, where it had 25.6 million unique readers.  

That’s coupled with publishers experiencing a 65% decrease in programmatic revenues, due to a cocktail of low CPMs as swathes of advertisers stop spending on campaigns and brands block ads on coronavirus content.  

While advertising revenue is important, The Guardian is on the road of reaching 2 million paying supporters by 2022.