Month: August 2020

Decode will not only publish written content by staffers but also serve as a testing ground for digital design prototypes made to make the online reading experience more interactive and unique. For example, the Decode site uses a “card system” and a horizontal scroll. As for editorial extensions beyond op-eds and essays like podcasts or video, the shop expects to try out other forms of storytelling in the future as it will use Decode as a way to test new ideas it will eventually bring to clients.

Code and Theory isn’t hiring an editorial team to run Decode. Instead, strategists within the agency will own a particular vertical — such as government, healthcare, media and publishing, education or logistics — acting as that vertical’s editor who will gather content from the agency’s roughly 500 staffers and populate it regularly. CEO Dan Gardner will oversee Decode. Editorial decisions will be independent of clients. However, the shop does expect to collaborate with clients as well as other agencies on Decode content.

The agency isn’t looking for its publication to be a new revenue source as it won’t be using an ad-supported model for Decode. However, getting more attention for the shop is one of the goals and by regularly publishing content, Code and Theory is hoping to attract new clients as well as new talent to the agency. 

This isn’t the first publication created by an agency. Shops like SubRosa and Omelet have previously ventured into magazine publishing with a bi-annual print magazine, La Petit Mort and a quarterly glossy, Wake Up, respectively. More recently, agencies have created digital publications and used platforms like Medium to do so. For example, Huge’s digital publication, Magenta, uses the platform.

That Code and Theory is building a publication now makes sense to Allen Adamson, co-founder of Metaforce and brand consultant. “It gives them a platform for thought leadership, which they need as an agency,” said Adamson. “Their core audience of publishers will gravitate toward [an agency that understands what they do]. This helps with brand visibility.” 

As for launching during the Coronavirus, the shop was working on Decode prior to the outbreak. While the agency has observed that execs across the industry are now posting more thought leadership content online amid the pandemic, releasing the publication now isn’t due to the pandemic. 

“We’re not trying to sit this out until 2021,” said Buntin, adding that the shop has been working on Decode for months. “We’re not planning to go back into the office until January. Don’t want to take a wait and see approach. We designed it, we built it, let’s put it out in the world.

However, for businesses used to advertising on Instagram and Facebook there are some key differences at launch. An advertising agency buyer said the product hadn’t been pitched extensively to their agency yet.

“Instagram [is] working on building up a community first,” the buyer said.

There are currently no ad formats available on Reels, which could prove a key early point of differentiation with TikTok as Instagram looks to tempt over its users. Advertisers and influencers can’t pay to boost their videos or to have them displayed in the “featured” section, which is hand-picked by Instagram employees. Similarly, there aren’t any branded content tags available for use at launch, unlike within the main Instagram feed, where influencers can signal they have been paid by an advertiser to promote a product. 

Elsewhere, while businesses are able to create Reels, much like on Instagram Stories, business accounts won’t have access to music in Reels due to licensing restrictions.

“We are currently focused on making Reels a great experience for people and creators, but are evaluating monetization opportunities for the future,” said an Instagram spokesperson. On the subject of branded content tags, the spokesperson added, “We are planning to integrate these tools in the future.” A specific timeline wasn’t shared.

Advertisers, agencies and publishers will get access, however, to a regular newsletter showcasing the latest Reels trends and creators, according to a person familiar with the plans.

Instagram Reels’ international launch lands at a particularly challenging juncture for TikTok, which has been caught in the intensifying political crosshairs between the U.S. and China. President Trump has given its parent company ByteDance until just September 15 to find a buyer for TikTok in the U.S., or else he has indicated he would look to ban the app, citing national security concerns. The precise details of how a ban could legally work are unclear at this stage. Microsoft has confirmed it is in discussions to purchase TikTok in the U.S. and operate the app there and also in Canada, Australia and New Zealand.

TikTok has acknowledged Instagram Reels is a direct competitor — or “copycat product,” as CEO Kevin Mayer put it in a blog post last week. Speaking on the Digiday Podcast, which was recorded before the Instagram Reels launch, TikTok vp of global business solutions for the U.S. and Europe Blake Chandlee said Reels would be “competitive.” 

“They are going to be aggressive in bringing some TikTok influencers over. We know that they’re doing that; that they’re targeting some of those creators,” said Chandlee. “There’ll be a handful that probably do go over and that’s OK, that’s just competition. We actually embrace, and accept, and really want competition. Competition makes you better.”

Last month, a day after The Wall Street Journal reported Instagram was offering some of TikTok’s stars attractive financial offers to switch to Reels, TikTok said it would increase the size of its U.S. “creator fund” to $1 billion, up from an initial commitment of $200 million, to be paid out over three years.

The most-followed accounts on TikTok tend to be stars who made their fame on the app — or other video apps like Vine that preceded it — while the most popular Instagram accounts are primarily celebrities that found their fame in sports, music and traditional entertainment. The three most-followed TikTok accounts below to Charli D’Amelio (77 million followers,) Loren Gray (46 million) and Zach King (47 million,) according to analysis from content platform PostBeyond. Instagram’s official account is the most followed on Instagram (359 million) followed by Cristiano Ronaldo (234 million) Ariana Grande (196 million) and Dwayne Johnson (192 million).

“Instagram does still have a significant number of users who enjoy TikTok to convert over and install,” the Instagram app, said Owen Landefeld, growth manager at Abacus Growth. The marketing agency’s TikTok partner manager said back in May that around 60% of TikTok users aren’t on Facebook and 30% aren’t on Instagram.

Amy Luca, chief executive at influencer marketing company TheAmplify, said Instagram will face a challenge in luring loyal TikTok fans away from the app.

“Trump has now made it very popular with his recent news and there’s nothing like a potential ban on something to get younger generations to rally behind it,” said Luca. “Reels will likely become another fun feature for the existing [Instagram] users but I’m not sure how likely it is to help with immediate user growth for Gen Z.”

With at least 1 billion global users, even just swaying existing Instagram users over to Reels could make it an attractive proposition for advertisers further down the line. (TikTok has said it has 100 million users in the U.S. The TikTok app and its Chinese version, Douyin, have been downloaded more than 2 billion times to date, according to measurement firm Sensor Tower.)

“The problem we have with feeds in general across multiple social platforms is saturation of the feed: How do you stand out, especially as an advertiser,” said Elliot Georgiou, media activation director at media agency Essence.

He added, “People are used to putting their feed on mute and scrolling by really quickly … [with its emphasis on music] that attention and potential for cut through is that much more powerful on Reels.”

“It’s only recently that larger advertisers have taken baby steps into advertising on TikTok and so it’s not a priority to them in the same way Instagram or YouTube is,” said Mary Keane-Dawson, group CEO at influencer marketing agency and TikTok creative partner Takumi.

That’s not to say the ensuing drama around TikTok won’t affect advertisers’ plans. In some ways, it already has, particularly for those who had already been experimenting, or fully taken the plunge on TikTok prior to the coronavirus crisis.

“We’ve had two of our clients hold back their influencer campaigns on TikTok until September to avoid being caught in the middle of the storm around it,” said Joe Gagliese, CEO at influencer marketing agency Viral Nation that works with advertisers such as Campbell’s, Tencent and Activision Blizzard. “The reality is the prospect of TikTok going away is at the bottom of the list of priorities for larger advertisers that are having to furlough people in multiple markets and reallocate media dollars into next year.”

It’s far easier for advertisers to step away from a social network like TikTok when they don’t depend on it for growth as evidenced by last month’s Facebook boycott. Some advertisers couldn’t wait to restart their campaigns after a month without the social network. TikTok, however, is still considered by many advertisers to be untested and not a channel that would have a direct impact on their goals given that its audience skews toward younger demographics who have lower disposable incomes. If they can, then advertisers will sit on the sidelines and watch the drama around TikTok’s future in the U.S. unfold. 

“No one has reached out with new collaborations, which is odd as normally I’d get one or two inquiries a week,” said Oliver Burton, a creator on TikTok with over 720,000 followers. “Since the news has come out there’s been no emails or interest. I’ve even chased a few people to get their thoughts but plans for TikTok seem to be on hold for now.”

Execs from the app have been trying to reassure influencers and marketers not to make any hasty decisions. –

“I spoke to someone at TikTok earlier this week and they told me not to worry. They insisted that TikTok in the U.S. is different to TikTok in China,” said an agency exec on condition of anonymity for fear of jeopardizing any future commercial deals with the platform. “My contact said talk about TikTok’s future in the U.S. is nothing to worry about and would be resolved soon.” 

Still, it pays to have a backup plan should the app get banned. 

Some advertisers are going as far as to put contingency clauses in their contracts with influencers to guarantee that their TikTok campaigns will run on Instagram in the absence of the video-sharing app. Indeed, talent execs at companies like Viral Nation and Select Management Group have seen these requests more frequently ever since talk of a ban in the U.S. first started to boil over last month. Just as TikTok benefited from the Facebook boycott last month, its rivals are poised to snap up its content should it be banned. 

“We have been exploring emerging platforms like Triller, which has overtaken TikTok in the app store, so if the situation around TikTok does change then we can react accordingly,” said Stephanie Lamb, account director at influencer marketing agency Tailify. “We’re also discussing Instagram Reels with some of our clients, which is coming out soon. We’re future-proofing strategies for clients so that we can move campaigns on TikTok over to other platforms if they pose better opportunities.”

But the problem with repurposing content from one platform to another is it should never be a straight swap, marketers have previously warned. There should always be flexibility in the core campaign idea, narrative, formats as well as in the relationship between advertisers and influencer, but in essence, there are clear benefits to postponing campaigns over pushing it out in a forced and inauthentic way on a channel for which it wasn’t designed.

“Content from TikTok on other platforms is hit and miss,” said Avila. “I can upload a video on TikTok and it gets three million views, but when I put that same vide on Twitter it only gets around 2,000 views.” 

Ultimately, for advertisers, it isn’t so much who owns the app, but the intense scrutiny of the platform that has had its fair share of controversies, ranging from dangerous challenges to sexually suggestive content. The platform has often been accused of exposing its young user base to an unsafe environment. And there aren’t many advertisers on TikTok so campaigns stand out more during the good and bad moments, which isn’t necessarily desirable when it’s adjacent to a geopolitical tussle.  

Whatever the amount of money political advertisers will end up spending, media companies will welcome the injection of advertiser demand, though they are leery of opening themselves up too widely to political ads that may upset their audiences, employees or other advertisers. While media executives do not expect political ad dollars alone to return their ad revenue to pre-crisis levels, they see the additional competition for their inventory as likely to push up their ad prices as other types of advertisers, such as automotive, return to the market.

“As we get into that 13-week period [before the Nov. 3 election], that’s where it turns into the Super Bowl for hitting our targets on political and getting those dollars, and that will put more and more pressure on [ad] rates and be more and more beneficial for news publishers across the board,” said a second media executive.

However, media companies are taking care with the political ad dollars they are willing to accept. Given the civil unrest over racial injustice as well as the politicization of the coronavirus crisis, media companies are wary of running ads on their properties that could be considered controversial and likely to upset segments of their audiences or their employees. 

The first media executive’s company has taken a $50 million revenue hit because of the crisis, due to the weakened ad market and physical production shutdown. However, while the company is selling ads and sponsorships to political advertisers, it is “not aggressively pursuing” political advertisers because “I’ve got to look my kids in the face,” said the executive.

At the same time, media companies are wary of being seen as taking political stances with which ads they do and do not accept. “We have to make sure we’re being representative. And it’s a commercial. Some people don’t like MyPillow, and we run MyPillow ads,” said the second media executive, referring to the pillow brand whose CEO Mike Lindell has been a vocal supporter of President Trump.

Another example of how media companies are being hyper vigilant with the political ad dollars they accept, a third media company that spoke to Digiday for this story will fact-check the creative of all political ad campaigns purchased directly through its sales team, said an executive at this company. Additionally, this company has decided not to allow political advertisers to buy ads on its sites through the open programmatic ad market. 

Adobe has taken a similar stance by deciding to ban political ads from being bought through its programmatic ad buying tools. Twitter and Spotify announced last year that they will not allow political ads to run on their platforms. Facebook and Google will continue to accept political advertising.

As media companies work out how to handle demand from political advertisers, streaming services and 24/7 streaming channels are sorting out how to manage campaign ads with their non-political advertisers. Streamers often run multiple video ads within a pod, akin to TV’s commercial breaks, and advertisers typically ask for their ads to be separate from certain types of other ads, such as a competitor’s spot. However, streaming ad technology has not fully developed to the point where it is easy for media companies to manage creative separation when ads are purchased programmatically. 

Creative separation is not a new challenge in programmatic streaming advertising, but “it’s more relevant now than ever before because political advertising is a hot-button issue,” said the second media executive, who hopes that the rush of political advertisers into the market will “speed up the resolution of what’s been a very challenging problem.”