Month: September 2020

A coronavirus-led surge in traffic helped. But a tightened paywall, developing onboarding and engagement strategies both on and off its sites, and a careful approach to paid marketing have driven gains which Finnegan expects will continue.

“The last six months have been truly phenomenal,” Finnegan said. “I think we’ve really reset our floor for what monthly success and targets look like. It’s really exciting.”

Like so many news-focused publications, The Atlantic benefited from a surge in visitors this past spring, and the magazine’s coverage of coronavirus helped shatter its previous traffic records, Finnegan said. In March, the site had 68 million unique users, 136% more than March 2019, according to Comscore.

Traffic has come down since then, though it remains up significantly year over year: Monthly unique users were at least 50% higher year over year in every month from April to June, and 27% higher in July, also per Comscore.

Those spikes led to a corresponding jump in conversions, but the upticks were not just proportional to the traffic. While the Atlantic made headlines when it announced it had acquired over 36,000 subscribers in March, it actually acquired more than 36,000 subscribers in April, then again in May and yet again in June, Finnegan said; in both May and June, it acquired more than 50,000 new subscribers each month, delivering a total of more than 100,000 subscribers.

While some of those subscribers were people who had been reading the Atlantic for a while, the traffic spikes have attracted a different kind of subscriber too, Finnegan said. Stories such as Ed Yong’s “How the Pandemic Defeated America” or, more recently, Jeffrey Goldberg’s story about Donald Trump’s lack of respect for U.S. veterans, drove some people to convert seemingly on the spot; in the week since Goldberg’s piece was published on Sept. 3, for example, the Atlantic acquired more than 20,000 new subscribers. 

Mindful of churn, the Atlantic has placed the users who subscribed more suddenly into a separate cohort to watch how they respond to the Atlantic’s onboarding process, which is designed to get new subscribers signed up for newsletters and following the magazine and its authors on social media, to ensure that they develop a habit of reading The Atlantic if they didn’t have one already; Finnegan said that three visits per month is enough engagement to keep a subscriber from lapsing.

If a subscriber drops below that threshold, it will use push articles in front of that reader using paid social ads in an attempt to reengage them.

But before the coronavirus surge happened, The Atlantic was already benefiting from changes it had made. Back in November, The Atlantic overhauled a number of things in its checkout flow, including everything from changing the color of buttons on its subscribe page to reducing the number of payment options it showed readers there. Those changes helped roughly double the number of subscribers it was gaining every day, from a few hundred to around a thousand, Finnegan said.

The Atlantic also made it possible for readers to subscribe via Facebook Instant Articles and Google AMP pages. While most of the Atlantic’s new subscribers have converted from the Atlantic’s site, a dependable chunk — normally around 6% per month, Finnegan said — come in via those two formats.

To date, AMP delivers a smaller share of subscribers than Instant Articles do, largely because AMP is a mobile search-optimized page format.

While the new subscribers from Facebook are welcome, Finnegan said the platform may be more valuable in the long run as a way to improve retention; a “surprising” number of subscribers have authenticated their subscriptions on Facebook and are now reading more Atlantic content there, he said.

The subscriber growth has also been spurred by a shorter paywall. Two months ago, the site dropped the number of articles allowed per month from five to three.

The data acquired from The Atlantic’s first six months also allowed the publication to begin a paid marketing strategy. Though Finnegan said it is spending a “tiny” amount — he would not share specific dollar figures — on paid marketing, its budget is increasing: it spent three times more on paid marketing in August than it did in January. That spending helped convert 2,000 of the 25,000 subscribers the Atlantic acquired in August, Finnegan said.

“We’re feeling like we’re able to do it in a way that we’re getting good incremental conversions at a reasonable acquisition price,” he said.

While not every publication has the same editorial resources as The Atlantic, observers say the moves they’ve made could be replicable.

“Their editorial is truly top notch and I think that is driving a lot of their success,” said Melissa Chowning, the CEO of the audience development consultancy Twenty First Digital, who pointed to The Atlantic’s strategy of emphasizing how subscriptions support its journalism. “That said, The Atlantic seems to have employed a model that other publishers should be able to leverage.”

The Atlantic’s subscriber base is growing at a moment when its advertising and events businesses, like most every media company’s, are under strain. The Atlantic laid off 68 people, about 20% of staff, in May, including most of its video team and its events staff, citing a “bracing decline” in advertising.

When things were at their worst, Finnegan said he worried that The Atlantic might miss its revenue target by 50%. But a rally in the direct-sold advertising business, combined with the huge traffic, have turned things around somewhat. “We’ve got a very outside chance at maybe not shrinking this year,” Finnegan said.

“If I think about where we were at the beginning of the year, I’m still fairly disappointed,” Finnegan added. “If I think about where we’re at relative to the expectations I formed in April, I’m pretty optimistic.”

Now, with programmatic ad rates rebounding, outgoing CEO Jim Egan is optimistic about the prospect of ad-funded news. We spoke with Egan about where the green shoots are and how publishers’ relationships with platforms are shifting. The interview has been condensed and edited. 

What’s the outlook for the fourth quarter?

It does vary so much by geography and sector. But at the aggregate level, the outlook is still pretty hard for the second half of the year. Hopes we had back in March about a quick snapback are starting to recede. Although, there’s a lot of pent up demand and people want to get back to business. But until we’ve got more concrete visibility of a vaccine and when people are reliably able to go back to work safely, that rush of money back into the market is going to hold off.

We’re finding Canada and the U.S. really quite robust. And we’re seeing some clients which are new to the BBC and bigger deals from existing clients, particularly in Home Entertainment, technology, enterprise software, those sectors. They’re helping make this year much better than it might otherwise have been. 

What are you doing differently to get marketers spending?

With those long-standing clients who are facing the biggest challenges, this is a moment for a different type of client service. We have to be as patient and as responsive as we can and acknowledge the challenges that many of these major advertisers are going through as they face fundamental threats to their business models.

How has your ability to forecast improved?

Everyone will say the same thing: We always felt we were having to be much more short term than we would like. And that’s just got worse. 

The ‘in the moment’ sense of crisis has receded since March when every day was unprecedented. This has been an endorsement of the adaptability of human beings and communities and also businesses. We’re just getting more used to the uncertainty rather than the uncertainty receding.

Has the make-up of BBC Global News revenue changed for good?

The importance of our distribution revenues — which has been mainly pay-TV revenues — but also money that we get from syndication and licensing to a growing number of digital partners. In a relative sense that went up. 

I’m optimistic rather than pessimistic about [digital advertising] there has been a short-term change in the proportions of the revenue mix, but some of the longer-term trends are still there, 

Mark Thompson talks very interestingly and eloquently about how reader revenue and subscription income became very important but that’s not to say that advertising revenue didn’t matter anymore. These are topics that we’re thinking about very very hard right now. When you start to sign people in, and you have a first-party database relationship with them as well as moving people through the funnel of subscription revenue, that’s helpful for your advertising outlook. That trend of having a first-party data relationship with audiences, that’s long term and will outlive the coronavirus crisis by a long way.

How is BBC Global News impacted by Apple’s recent announcement?

For us, Apple’s recent announcements aren’t all that significant. Of course, we’re paying close attention. We’ve always been more cautious than others about where we get data from and how we build up all audience profiles, we try to rely on site information that we have. We’re thinking about a world in which data availability is more about zero-party and first-party data, where there’s a more closely targeted offer for advertisers. While doing a better job of keeping our users’ data private and responding to those concerns. But there isn’t quite as much at stake for us in the transition because our reliance has been less.

How has the relationship with platforms changed?

The interesting frontier is what’s happening to Facebook and Google and the way regulation is becoming a very serious reality and their attempts — which are not the same — to either preempt that regulation by coming up with renewed terms of trade with new publishers or respond to the regulation. 

What’s your view on what’s happening in Australia?

I’m surprised Facebook has gone there that quickly with threats to go dark in terms of news. Its argument that news isn’t that important to it commercially may well be true. But reputationally, news and a healthy relationship with the news publishing community is probably more important than they would like to admit. If you can’t find some peaceful and harmonious accommodation with the news industry — and by extension the political sphere — things start getting really, very, uncomfortable. 

Having a sensibly regulated and moderated framework for how platforms work with news publishers — which helps to maintain the news ecosystem which Facebook and Google claim they’re so committed to— hat’s what everybody wants to see. Getting so acrimonious and so hostile at this early stage in the process doesn’t feel like a positive step.

This is the first really significant regulatory move on the economic front. This is the first time someone’s tried to come up with a regulated rate card for how it should work and trying to arrive at a fair set of terms without invoking all sorts of unintended consequences and perverse outcomes. That’s really hard for the regulators to do.

Commercially funded journalism and publishers’ relationships — both with audiences, advertisers and social media platforms — is very complicated. But good journalism doesn’t have an underlying demand problem, people want to have access to news that they can believe in. I’m fundamentally optimistic about the future of this business.

But as innovative as the Alexa-powered in-car experience is, it’s the link to the wider Amazon platform that has Buick’s marketers excited.

“This program is the first step ar creating a voice-driven experience for customers as well as bringing vehicle shopping element into the Amazon ecosystem,” said Kate Hrabovsky, marketing and advertising manager at Buick.

Aside from Alexa tech, Buick’s campaign includes a custom Alexa “utterance,” a phrase that lets people ask about the manufacturer’s vehicle from any device. Furthermore, there’s an ad touting the partnership as well as a dedicated virtual showroom on the marketplace. The hope is that all those activations help turn Amazon into a branding channel for Buick, whether it’s targeted ads in cars, on the marketplace or on Amazon Fire TV.  (Can you do general Amazon shopping from the car?)

“Amazon is a brand play for us given the partnership with Alexa and the fact that we want to capitalize on the new vehicle launch,” said Hrabovsky. “But that’s also working as a way to show how technology can improve the customer shopping experience for the brand as people have another way to interact with it via Alexa.”

For now, Buick’s marketers are more concerned with making sure information about its vehicles is readily available across Amazon’s properties, not selling cars from there. 

“The normal buying experience is still the same,” said Hrabovsky. In fact, most of what the marketing on Amazon will try to drive people back to the manufacturer’s own site or showroom, she said. 

It’s somewhat of contrarian stance given most advertisers who buy ads on Amazon also sell products there.

For all its growth, Amazon’s ad business has yet to make real inroads into brand budgets. Most advertisers tend to be wowed by Amazon’s ability to drive direct response. But voice technology could change that, particularly if Amazon looks to install Alexa into more cars. 

While Amazon continues to lead the smart speaker market, both Google and Apple have the advantage of having their voice assistants built into smartphones. Cars could be a way to push Alexa further into the mobile space, as well as get Amazon’s ad business closer to those marketers with some of the biggest brand marketing budgets available. 

“Buick’s addition to the growing list of voice-enabled cars is one step closer to Amazon’s vision of ‘Alexa everywhere’”, said Steff Preyer, business director at voice agency Rabbit & Pork. “Rather than thinking of voice search as a standalone activity that occurs within the home, voice is on its way to becoming an omnipresent channel, so that you can fire a command at an inanimate object at any point of your day and expect to get a response.”

Buick’s fledgling partnership with Amazon is indicative of a wider trend among automotive advertisers.

In a year where physical retail was, by and large, shut for more than three months of the year, more people bought products online and plan to continue doing so even as lockdown measures ease. In turn, car manufacturers have stepped up their pursuit of online sales.

France’s PSA, Volkswagen and Daimler have all tested car-based e-commerce strategies in recent months, reported the Financial Times. 

WarnerMedia’s HBO Max ad pitch has been relatively light on specifics, according to the agency executives. “It was part of our upfront discussions [with WarnerMedia], but it’s all pretty loose because there weren’t a lot of details on it,” said one agency executive. The company has set an asking price for its initial advertisers and shared how many ads the streamer will air per hour of programming. However, the company has not told the agency executives whether people will have to pay to access HBO Max’s ad-supported tier.

When HBO Max’s ad-supported tier does launch, it will carry a maximum of four minutes of ads per hour for episodic programming and two minutes of ads per hour for movies, according to the agency executives. That is a lighter ad load than traditional TV, which typically airs roughly 16 minutes of ads per hour. Streaming services have cut down on ad time seemingly in recognition that an overabundance of ads is a major reason why people have cut back on traditional TV watching. NBCUniversal’s Peacock, for example, carries five minutes of ads per hour.

The company is asking that advertisers spend at least $250,000 per quarter, according to the agency executives. “The cost of entry is really low,” said a second agency executive. However, WarnerMedia is setting high CPMs for its ads, so that $250,000 may not go so far. The company is setting the CPMs at the agency level, so the executives declined to discuss specifics but said the CPMs are in the range of CPMs for primetime broadcast TV shows, which can hover around $80. As a result, the lower commitment may make it easier for HBO Max to attract a large number of advertisers, but the high CPM is likely to lead some advertisers to wait until they have a better sense of what they would be getting in return for that money, said a third agency executive.

WarnerMedia is taking a different tact in pitching its streaming service than NBCUniversal did when lining up advertisers for its Peacock streamer. Instead of seeking out a small number of exclusive launch sponsors that would pay tens of millions of dollars, WarnerMedia is looking for a broad array of advertisers to run ads across HBO Max. To that end, the company is aiming its pitch at agencies that will then identify particular clients to advertise on the service. 

There appear to be two main reasons why WarnerMedia would still be ironing out HBO Max’s advertising pitch. For starters, WarnerMedia may not be able to sell ads against some of HBO Max’s top programming. According to The Information, new episodes of HBO shows distributed through HBO Max will not be able to carry ads because of HBO’s agreements with pay-TV providers as well as WarnerMedia executives’ concerns that inserting ads in those shows could hurt the HBO brand.

Additionally, the streamer is not yet available on two of the biggest connected TV platforms, Amazon’s Fire TV and Roku. That has drawn questions from agency executives about how many people they can expect to reach when the ad-supported tier debuts. “If you launch a platform and you’re not on Amazon and Roku, did you actually launch?” said a fourth agency executive.

Doing so has “dramatically grown our provider network” and “transformed how much we are able to invest in consumer marketing,” according to Richard Fine, Zocdoc’s vp of strategy, adding that “it allows us to significantly — and sustainably — scale our marketing spend alongside our growing provider coverage.”

The company declined to specify how much its marketing budget has grown, breakout how it has allocated its 2020 media budget or how much it is currently spending on its first national TV campaign, which began to air in mid-August. In 2019, Zocdoc spent $1.9 million on media, per Kantar, which doesn’t measure advertisers’ spending on social media channels. 

“Like many digital first companies you can do lower funnel and performance [ads] online but you max out those channels,” said Fine. “You want to go to that place where there are the most eyeballs and obviously TV is still that.” 

The new national campaign, which touts the ease of booking a doctor’s appointment via Zocdoc, is the beginning of the company’s move towards offline channels. In 2021, Zocdoc expects “a significant shift to offline channels,” per Fine, “with the potential to be majority offline.” 

Falling ad prices on TV earlier this spring amid the height of the coronavirus crisis caught the attention of a number of direct-to-consumer brands, as previously reported by Digiday. That wasn’t the draw for Zocdoc but the lower ad rates made the decision to move to television an easier one, according to Fine. 

The campaign is currently airing on roughly 30 cable networks, including the Food Network, CNN, Discovery Channel and ESPN. Per Fine, Zocdoc plans to add additional networks in the coming weeks as it increases its media budget and further optimizes its buy. 

“To become a household name you still need to tell a bigger story through a video ad,” said Allen Adamson, brand consultant and co-founder of Metaforce, adding that the shift toward offline channels could help “elevate” the brand. 

At the same time, in early Spring, Zocdoc added telehealth options allowing patients to book virtual appointments which also increased its provider coverage. In April, during the height of the stay-at-home orders, telehealth represented 40-50% of Zocdoc’s bookings which was a “very dramatic change in our business,” said Fine, adding that in January telehealth represented “close to zero” of its bookings. While telehealth appointments have leveled off the company does expect the trend of using some telehealth to continue. 

“Telehealth has already receded from the highs of April,” said Fine. “But at the same time it’s still 20% of healthcare where it used to be 1%. It’s not 40% but it’s now a very major part of the mix and I expect it to be a part of the mix permanently.”

Shoppable media is vying to serve as a silver bullet for advertisers seeking to achieve shorter decision journeys and rapid ROI, while still maintaining control over their brand, a major priority in marketplace selling (and often left unsecured). 

The benefits for advertisers who reduce friction in the consumer journey are numerous, and they include the following outcomes.

Shoppable media plugs massive leaks in the consumer journey

In-app shoppable environments are an opportunity to minimize the heavy yield loss otherwise incurred at every stage along the decision journey. If user ad-click behaviors — from site visits to purchases — are any indication of representative stages along the purchase journey, more than 95% of users typically do not make it from one stage to the next if required to switch apps, sites or sessions. Reviving the communications with users once lost along the journey and reminding them to reconsider is costly, requiring data and ad frequency. It’s also annoying for consumers who are no longer interested, or those concerned with data privacy.     

Tapping into walled garden data is critical for advertisers

The ability to capture first-party customer data is perhaps the most significant benefit for advertisers. While shoppable ads are popular for small-ticket items under $150, they present all advertisers with unique opportunities to initiate direct-to-customer relationships. They also help  to expand the current customer file, generate awareness and drive repeat purchases and greater customer lifetime-value. Even though e-commerce marketplaces such as Amazon were pioneers in streamlining the on-platform purchase journey for millions of consumers, advertisers’ ability to capture customer data remains severely limited on e-commerce platforms that prefer to own customer relationships, including Amazon and comparable marketplaces like Walmart and Target.

Shoppable rebalances the reach and frequency equation

Shoppable ads also challenge the prevalent media practice of high-frequency ad retargeting after initial exposure as a means of improving return on ad spending (ROAS). They prove the power of intuitive user experiences that integrate media, merchandising and content to eliminate the steps that add friction to the customer journey and elongate the buying process. This substantially reduces the need for reminder messaging. Shoppable ads enable advertisers to place more focus on incremental reach and less focus on frequency. The net result is better market share growth and greater success in hitting ROI targets. 

The open web is next

The evolution of shorter consumer journeys will continue on the open web, overhauling publisher partnerships and programmatic media. This is where high-involvement, big ticket purchases will begin to benefit from the shortened journey as they crisscross the broader web, requiring customers to directly interact with many parts of the advertiser’s business value chain. Meeting the new high bar of customer expectations will require advertisers to redesign their internal and partner content, tools and services into a unified path that aligns organically with consumers’ decision-making. It will also require advertisers to rethink the role that media and advertising play in generating better insights into the incremental value of each stage in the customer journey, and to consider the immense benefits that stem from shortening the buying cycle.