Month: August 2020

“Our letter was written not only on behalf of news publishers, but it was written on behalf of anyone in the news and entertainment space — big or small, old or new — making sure there was a level playing field and people understand what [the conditions are],” Digital Content Next CEO Jason Kint said. “Amazon is the last company on the planet that needs favorable terms.” 

Apple declined to comment. However, it doesn’t look as though news publishers are likely to qualify for the favorable 15% platform fee. As CNBC reported in April, the Amazon Prime Video app deal is part of a partner program for premium video providers. To qualify, those companies must offer “integration with the Apple TV app, AirPlay 2 support, tvOS apps, universal search, Siri support and, where applicable, single or zero sign-on,” a spokesman said at the time. CNBC reported that Canal+ and Altice One were also part of the program.

With publishers more focused on owning their customer relationships and subscriptions becoming a much more important part of many publishing businesses, those companies have “much more incentive to start pushing back against Apple and taking steps to use whatever leverage they have to manage that relationship and on the best terms they possibly can,” said Michael Silberman, svp of strategy at subscription tech platform Piano.

That leverage could come in joining the growing chorus of anti-Apple disquiet. Apple is currently locked in a high-profile legal battle with Epic Games. Apple removed the wildly popular Fortnite game from its App Store after it rolled out a new direct payment system that contravened its policies. Apple also threatened to remove Epic’s developer credentials. Epic sued Apple (and separately sued Google Play, which also removed Fortnite) and immediately revved up its marketing engine, releasing a pastiche of Apple’s iconic ‘1984’ ad and running what was described as an “anti-Apple” #FreeFortnite gaming tournament over the weekend.

On Sunday, Microsoft’s general manager for gaming developer experience, Kevin Gammill, filed a declaration of support for Epic’s motion for a temporary restraining order against Apple. The Information reported last week that Epic is trying to drum up support from other tech companies to join its vocal opposition against Apple’s business practices. Heck, even Facebook has been taking shots at what it calls the “30% App Store tax.”

Meanwhile, regulators in Brussels are probing whether Apple’s App Store rules breach EU competition law, following complaints from Spotify and e-reader service Kobo. And you’ll of course remember Apple was one of four companies virtually hauled in front of U.S. congress in last month’s big tech antitrust hearing.

All in all, there’s no time like the present for publishers to have their anti-Apple gripes fall onto more empathetic ears.

Most publishers would certainly agree with Apple’s ultimate end-goal of improving user privacy and the overall user experience. They also can’t deny that Apple opens up a lucrative audience of hundreds of millions of consumers, many of which are willing to pay for its services. A study published in June by Analysis Group (for which Apple provided support) estimated the Apple App Store facilitated $61 billion in billings and sales for digital goods and services worldwide last year. But from the rollout of Intelligent Tracker Prevention on Safari, the forthcoming app privacy update on iOS 14 and a recent move to redirect Apple News+ subscribers browsing publisher sites on Safari to its own platform, Apple’s moves tend to break things in the short term — and with little to no prior industry consultation. 

“It boils down to who ‘owns’ the consumer relationship: Apple is a consumer company and it makes sense to the consumer to consume news via Apple [versus] via individual publishers,” said Ana Milicevic, principal and co-founder at marketing consultancy Sparrow Digital, via email. “While some of Apple’s actions appear to benefit publishers—like ITP that’s meant to increase the value of publishers’ first-party data — they still require a whole slew of other things to go perfectly so that publishers can gain some advantage.”

DCN’s Kint describes publishers’ relationship with Apple over the years as maintaining a level of “steady discomfort” due to the nature of its proprietary and closed approach. On the other hand, as Piers Harding-Rolls, research director for games at Ampere Analysis, put it to me, one could argue the hidden complexity and closed experience is exactly what made the App Store so popular and shielded it from some of the difficulties tech companies with more open platforms have encountered.

News Publisher vs. Big Tech complaints have often historically been uphill David and Goliath battles, which haven’t tended to gather much momentum or support from other industries.

But with Apple—which, reminder: became a $2 trillion company last week — the mood music is changing and its hand could soon be forced to relax its “my way or the highway” approach.

Podcast’s ad dollars may be growing, but Tenderfoot TV founder Donald Albright knows how cagey buyers can be.

“Even though the numbers are steady, the advertisers are thinking: ‘people aren’t spending money, so I’m not going to spend money advertising to them,” Albright said on the Digiday Podcast.

Albright co-founded Tenderfoot TV —named before its pivot to audio — with filmmaker Payne Lindsey in 2016. The production company is behind true crime hits like Atlanta Monster and Up and Vanished.

“For us, a company with 500 million downloads and six number one podcasts… they don’t always just jump right in,” Albright said about advertisers.

The company’s listenership hasn’t suffered much from the disappearance of the commute — prime podcast listening minute— that many stakeholders feared.

“When I look at our data, most of our podcasts are consumed on desktop or laptop, not in cars,” Albright said.

And he’s optimistic about the industry’s ability to create more jobs and attract the kind of top talent that in a previous era would have opted to work for Netflix or other giants in video storytelling.

Albright himself hadn’t listened to a podcast until Tenderfoot’s own Up and Vanished — podcasting is his second career, after one marketing and producing music (Lindsey comes from the world of video too). Tenderfoot counts 10 employees, including its two founders.

And As podcast companies get acquired left and right, Albright emphasizes the need to preserve the creative independence that podcasts nurtured well so far.

“My fear is that now everything that you do is going to be through the lens of a corporate entity,” Albright said. “Not just them having legal control of what you can and can’t say, which in some cases I understand, but creative control. That’s something we’ll always push back on no matter who our partners are.”

Tenderfoot TV itself has teamed up with the iHeartPodcast Network on a slate of nine podcasts.

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

Quality doesn’t always win the day

“It’s a tough business. It can be very lucrative if you’re very successful. [But] you can have a very good podcast and not get the traction. You can have a podcast just as good as anything that we make, but that discovery element [is hard]. If you can’t get the listeners, you can’t sell advertising. You’re selling advertising against those listeners. It’s not about your inventory. The model is ad-based and it’s an up and down market.”

The ‘commuter dip’ is overstated

“Podcast listeners are the best consumers in the marketplace, and they’re the most loyal — consumers of the products that you advertise and consumers of your content. I think there’s nothing that will stop them from listening to the shows that they love. If they used to listen in the car, now they’re listening on a walk or doing yard work. I wouldn’t say it’s as simple as ‘no one’s commuting.’ When I look at our data, most of our podcasts are consumed on desktop or laptop, not in cars.”

Even a record of hits doesn’t guarantee advertiser interest

“It’s been difficult more so for us on the advertising side. We have the same amount of episodes, same amount of downloads, just a scared seller’s market. Where you think you have a show that’s going to launch and be sold out, [but then] it’s only 50% sold. It’s more like you still have to put out an episode sometimes: ‘It has all the makings of a hit, but we’re going to wait to see how episode one does, and then we’re going to come in.’ So we always get so much more advertiser interest in the second half of ours season than the first half of the season.”

On industry consolidation

“There’s only so many companies. There’s Gimlet, now that’s gone. The Ringer, that’s gone [both were acquired by Spotify]. There’s HowStuffWorks, that’s gone [acquired by iHeartMedia]. Land is being grabbed up, and eventually what’s Wondery going to do? What’s Tenderfoot going to do? For us it’s about still being able to tell the right stories. That’s the beauty of podcasting: the freedom. The part that’s going to be great is that it will be a viable industry that people can survive off of. They don’t have to do it as a side job. We have to go there if we want this to evolve into something that’s taken seriously. A billion dollars in [ad] revenue, which was the target for this year, is great, but it’s nothing compared to what other mediums are doing. We have to grow this responsibly. We have to put creative first. And I think we can do that. The money will also bring in the creators that are making the Netflix series and all that.”

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How is your mental health? 

It hasn’t been great, if I’m being honest. For whatever reason, the end of July and early August has been extremely tough. There are macro economic forces at work but there’s a lot of pressure to keep performance up while the economy is basically getting worse in some ways. There’s a lot of pressure to keep hitting these very intense sales and performance goals at a time when CPMs are rising, cost-per-acquisition is rising, etc. and a lot of that pressure falls onto media buyers, at least in the DTC world. People can mentally acknowledge that there could be other issues [impacting performance], whether with the landing page or conversion rate optimization or copywriting [but] the buck seems to stop with media buying for whatever reason. 

Why do you think that is? 

Some of it is self-induced. In the media buying world, people are always tweeting out these ridiculous stories of like, “I made this brand a million dollars with a seven dollar ad spend. Here’s the case study.” That just ratchets up the pressure and creates this environment where there are unrealistic expectations for everybody all the time. 

Do those expectations affect your mental health? 

I have a diagnosed anxiety disorder. I’ve struggled with it on and off, but lately it’s been rough as clients are trying to hit aggressive sales goals and they’re leaning on you harder because they don’t have any other levers to pull so it creates a high pressure environment. The last three weeks I basically haven’t stopped working other than taking an hour for dinner but then I’ll get back to it to squeeze every little bit of performance I can. 

That sounds unsustainable. 

It is. It used to be better with the work/life balance, but now I get Slack messages [from clients] 24/7, literally one in the morning on Sunday people are messaging me. Boundaries have gone away and I don’t know if it’s the work from home nature of the pandemic, but it has set in this malaise where one day just fades into the next and the work/life balance has completely gone out the window for me — and for others I know too — due to this pressure to perform. People freak out if there’s a single bad day whereas in the past there was a little more leniency. 

Why do you think this pressure falls to the media buyer? 

There are a few reasons. In the DTC world especially it seems like for whatever reason the media buyers are the ones running the ship and making a lot of decisions on strategy. I also think that media buying has a very aggressive, toxic culture tied to it. There are a lot of gurus who are coming at it from a media buying perspective pedaling secret methods that can make you absurd returns and things like that. There’s also just a lot of inconsistency day-to-day with Facebook in particular — but then someone will post a screenshot of a great return. 

When you’re surrounded by all of it there’s this ambient pressure to meet these unrealistic expectations and there are so many people trying to work with DTC brands that you’re thinking if you say no or push back or don’t meet the absurd expectation then there are 20 people behind you ready to go. So the unrealistic expectations boil over and destroy work/life balance which takes a toll when you have a mental health issue. When you can’t step away ever or let off the steam in a healthy way it can be very difficult. 

Have you tried to talk to clients about boundaries to get a sense of normalcy back? 

I’ve talked to some of them. Half of them respected it and said that I shouldn’t feel the need to respond and things like that. The other half I’ve unfortunately had to let go. I’m fortunate I have the kind of job I do and my team is able to continue to have steady work in all of this but there just comes a point where the dollar amount isn’t worth the mental toll. For people who dig in their heels on unhealthy behaviors you have to let them go. 

What do you wish they understood? 

We’re human beings on the other end. Also, you should trust the people you work with — pushing harder on someone will only push them to make panicked decisions rather than what’s better in the long run.

Other than letting some clients go, are you doing anything else to try to help your mental health? 

I’ve been meditating and journaling a lot which helps. I’m also trying to focus on the present rather than focus on outcomes — or when the pandemic will be over. 

GQ’s editor-in-chief Will Welch and digital director Jon Wilde are both optimistic about GQ’s readers spending in the shop, they said, based on the success that the commerce businesses have seen since the start of the year. 

Year to date, revenue earned from the Best Stuff Box is up 162% over 2019. On average, the box’s retention rate for one-off purchases is more than 85%, while the average annual retention rate is more than 75%, according to the company. What’s more, the publishers’ affiliate sales hub, GQ Recommends, is up 105% in revenue year to date over 2019. 

A third of the people who purchase the GQ Best Stuff Box comes from editorial content promoting the box, like unboxing videos on YouTube or a newsletter. And the past five boxes have sold out completely, some selling out just six weeks after being released.

This editorial conversion data point from the boxes was particularly encouraging to Wilde, because he said it indicates that the editorial recommendations were highly valued enough that they drove readers to make a purchase, and the audience was likely going to listen to these recommendations again for the branded merchandise. 

Beyond that, however, “it means we don’t have to spend a ton of marketing money to drive people to care about our t-shirts,” said Welch.

Through the first half of the year, GQ averaged a paid and verified print circulation of just under 950,000, according to the Alliance for Audited Media, and in July, had a 6.3 million unique visitors to its site, according to Comscore.

And while Welch said the shop will be plugged in the content that reaches that large audience, scale is still second order to testing out their readers respond to the merch line.

Much like the boxes, which have to be capped at a specific amount due to the limitations of the number of higher-quality products that GQ can access, the shop will only have a few hundred of each shirt for this initial drop.

Launching a merchandise shop serves as a level of “validation” for a publisher that it “has a certain quality and taste,” according to Ava Seave,  principal of media consulting firm Quantum Media.

“But, historically, magazines are weak about selling [branded] things” beyond magazine subscriptions, she added, due to the fact that audiences tend to be segmented across platforms and the overall message of the brand gets diluted as a result.

This is why affiliate businesses and licensing deals with manufacturers who can make and distribute the products on their own are often times the most appealing and less expensive routes for publishers, she said. 

But since GQ is manufacturing these items in a small batch to sell in its own shop, the costs of manufacturing and then shipping out t-shirts leaves a profit margin that at the end of the day likely pales in comparison to the other areas of a publishers’ business, Seave said.

“It’s not going to be gigantic, but it’s worth testing,” she said.

Seave added, however, that there is another value play beyond the gross margins that a publisher can make off of merchandise sales. “Maybe they’re trying to make their own case that it’s a brand that can be licensed,” she said.

“You can’t just chase dollars, otherwise we’d be undermining the authority” that GQ has when it comes to quality product recommendations, said Welch. 

In recent weeks, Facebook has posted senior-level jobs in payments, e-commerce and advertising, per GlobalData. These include a business product marketing manager for e-commerce, a technical program manager for its marketplace e-commerce business, a product marketing manager for e-commerce and a director of payment partnerships for the APAC region.

The recruitment drive comes amid the launch of Facebook Shops, the social network’s latest attempt to show where it fits in online shopping. Facebook Shops is an e-commerce feature that lets businesses list products for sale across its apps via virtual storefronts. Unlike Facebook’s previous shopping products, the latest storefronts will be native to the platform.  

“Many large brands with DTC offerings really value Facebook as it allows them to collect rich insights in consumer preferences and behaviors not possible on other channels,” said Clement Ma, account director at ad agency Precious.

Take the recent Facebook boycott. 

It’s been nearly a month since a month-long boycott of advertising on Facebook ended for many of the world’s largest advertisers, and while there are some noticeable outliers, e-commerce advertisers weren’t among them.

To be clear, this group of advertisers extends far beyond traditional retailers to those looking to either build or extend retail businesses online. From direct-to-consumer startups to luxury brands, mom-and-pop businesses to CPG manufacturers, there are many companies that believe Facebook’s ads are indispensable in helping sell products online. 

These advertisers saw Facebook as a key getaway to online shoppers, especially those Dynamic Ads that display products and info about them to users. In the second quarter of the year, spending on those ads was 20% of digital agency Kenshoo Social’s spending, up 38% on the same period a year ago. 

“A trend we noticed is that media paused in July tended to be upper funnel: typically from clients that use Facebook for upper-funnel strategies, and those brand dollars were diverted to other channels or delayed for use on Facebook later in the quarter,” said John Dobrowolski, general manager of Kenshoo’s social business.” By and large, performance or direct response budgets remained intact.”

In fact, it’s fair to say that when the boycott ended, many of the e-commerce advertisers that were on the boycott let out a collective sigh of relief. 

Of the 29 e-commerce advertisers that told digital agency Tinuiti to stop buying ads from Facebook throughout July, just one considered extending that ban into August. All others planned to resume their pre-boycott campaigns; some with additional spend to make up for lost media dollars in July. 

These were the businesses some observers said would struggle to survive without ads on Facebook such is their dependency on the social network for revenue.

Using statistical models, researchers at Said Business School, University of Oxford estimated the boycott would see brand consideration and purchase intent for retailers fall by 25% and 8% respectively. This is because advertisers see opportunities to push media dollars much farther than just a sale, from boosting Google rankings to capturing an email for future promotions. 

It’s worth noting, however, that most marketers still find it hard to say with any real confidence where any given sale came from. Some channels are good at creating sales potential, others at unlocking it like, others at both — and some are not very good at either one. 

For advertisers, particularly those with e-commerce businesses, ads on Facebook not only create sales potential, they increasingly unlock it as new e-commerce features are added like the Shops in May.

“With the introduction of Shops on Facebook and Instagram, the importance of Facebook as an online sales driver is likely to increase as brands need to ensure they are delivering fantastic customer experiences on social commerce platforms,” said Ma.

Findings illustrate the importance of contextual nuance when it comes to leveraging video viewing for marketing communications, and that streaming via connected TV (CTV) is the central opportunity to bond with these three multicultural audiences in the video advertising ecosystem today.

Among each of the cultural cohorts considered, OTT services and on-CTV devices were identified as the go-to experience for co-viewing video. In the US, 44 percent of Hispanic/Latino audiences, 40 percent of Black/African American audiences and 33 percent of  Asian audiences reported recent instances of co-viewing. 

In the US, 56 percent of Hispanic/Latino viewers reported that their co-viewing experiences had taken place on a CTV device, as compared to 53 percent of Black/African American viewers and 52 percent of Asian viewers.

Co-viewing equates to greater ad receptivity as well. In the US, 58 percent of Black/African American viewers report being receptive to CTV ads, along with 55 percent of Hispanic/Latino viewers and 49 percent of Asian viewers.

Advertisers extend reach among these fragmented and distinct audiences with ad-supported CTV content, and they also enhance impact. In part, that’s because audiences across all three groups reported that they were in better moods when watching CTV. As a result, ads create more impact and resonance on CTV than on other platforms, including mobile and linear television. 

In general, the survey also found that different generations do not differ much when it comes to demand for culturally relevant video viewing. It is important to consumers young and old. 

Multicultural viewers identify with sports and especially music

Consumers gravitate towards videos that are culturally relevant to them and this highly correlates with overall viewing lengths. Music and sports content lead the charge in this regard. Black/African American and Hispanic/Latino viewers alike indexed either near above the general popular population averages when asked whether they ascribed high cultural relevance to music and sports content. Meanwhile, Asian viewers ascribed lower cultural relevance to sports content, but still ascribed a high degree of cultural relevance to music content.  

Music scores as a highly relevant content type for all three groups of CTV viewers. For advertisers, the lesson is clear: CTV combined with music videos equates to prime viewing sessions for ad receptivity across all three cohorts.

In the US, 70 percent of Asian viewers reported being receptive to advertising during music video viewing sessions on CTV, as compared to 65 percent of Black/African American viewers and 60 percent of Hispanic/Latinos viewers

Since music content places many forms of cultural themes in the commercial spotlight, marketers can benefit from giving it particular attention in their engagement with CTV audiences in these cohorts. Product purchase decisions and media choices are highly informed by cultural relevance, and a brand being thoughtful about culturally relevant executions is as important as having a healthy brand image.

Cultural insight is key to engagement

Consumer media tastes help shape self-identity. Products, services and experiences are favored or rejected by people every day, helping to define them and their lifestyles. Consumers constantly apply meaning to their choices and use this meaning in their social constructs. Cultural insight is in part rooted in an understanding of this, and shaping brands in specific contexts acknowledges the importance of nuanced media choices in marketing.

Given the high volume of brand advertising consumers are subjected to each day in ad supported experiences, contextual nuance works. Carefully crafted engagement cannot come from buying generic, context-blind ad exposures to consumers that simply “check the box” for a given sociodemographic or online behavior. There is a right time and a right place, and decades of brand research has quantified this time and again. Media planning can implement this understanding of distinct cultural areas that improve communications. Cultural relevance is a critical brand health metric that brands should aspire to measure and improve upon, across the entirety of their respective addressable markets. 

Multicultural consumers no longer represent sleeping-giant constituencies, as they develop and refine the framework of identities to our modern communities. Music and culture are inextricably tied to concrete historical and technological developments that galvanize America. 

Prior research by MAGNA and the IPG Media Lab, in 2019, also supports this, highlighting that: “Consumers think brands should be involved, particularly in social issues, as there’s a desire for brand involvement in what consumers are most passionate about. Being culture-focused positions brands as more relevant and those brands who position themselves within culture friendly environments perform better.”

Tapping into cultural nuance is not easy. If it were, most marketers would do it and be great at it. Broad cultural contexts are rarer and rarer, and to harness these contexts takes a lot of thoughtfulness and a high degree of successful execution. Consumers do not come from the same backgrounds, especially in the highly diversified markets where most reside today. Marketers must be conscious not to devalue backgrounds and experiences, as this may be where nuance is needed most.