Month: December 2020

Normally, these products are par for the course on NTWRK’s app where people tune in to watch live shows where guests talk about products that become available to buy as the show airs. People flock to NTWRK for scarce, coveted gear usually backed by a celebrity. But the app is just the start. Moving forward, NTWRK wants to make those products available on social networks too, starting with Snapchat. 

Here’s the rundown: NTWRK is airing 10 five minute Snap Originals called ‘The Art of the Drop.’ Each week an artist or creator like Baller is interviewed about the item that’s about to be made available to buy from the show. NTWRK keeps the money made from the sales, while Snapchat keeps the ad revenue. In fact, Snapchat brokered a deal with Hewlett-Packard for ads that run up to 10 seconds to appear at various breaks in the show. Snapchat wouldn’t share details of the deal’s dollar amount.

“Live-streaming commerce is massive in China, but no one has been able to nail it in North America,” said NTWRK president Poksha Fitzgibbons. 

Hours after the first episode aired, NTWRK had sold out of the counters it had allocated for the Snapchat order. Neither NTWRK or Snapchat promoted the show so all the demand for the product came from the scarcity frenzy around it. Indeed, NTWRK hyped the limited release of the counter across its own social network, which includes celebrities, fashion-forward influencers and creators, who created their own hype bubble. People wanted the product even before they had seen it.

“We’re seeing social media move from just the sound or the meme going viral to physical products as these platforms, whether it’s TikTok or Snapchat, become a source of culture,” said Jide Maduako, CEO of the influencer platform Yoke Network. “Between influencers endorsing products and the business of scarcity, we’re seeing companies like NTWRK put a fresh spin on the QVC model by merging content and commerce.”

Whenever media owners and tech platforms like Snapchat work together, there’s usually some tension between who gets the better end of the deal. Normally, it’s the publisher that comes off worse. This isn’t one of those instances — at least not yet.

“We had more than 4,300 subscribers [to the show] in the first 24 hours after the Baller episode aired,” said Fitzgibbons. “It’s not earth shattering but its pretty good. If we can continue with that momentum over the next 10 episodes then it gives a chance to develop a consistent stream of content that people on Snapchat want to see. We want to build out a hybrid of entertainment and commerce on Snapchat,” she said.

In many ways, the shoppable series is a proof of concept for NTWRK. 

“We want to showcase that we can perform not only within our own app ecosystem but that when we take the NTWRK format to other platform that it can be complementary,” said Fitzgibbons. “The frequency of shoppable NTWRK content on the likes of Snapchat or TikTok is going to be weekly, whereas on our own platform it’s going to be 24/7, 365 days a week, multiple episodes a day.” 

NTWRK’s bet on shoppable content, especially on Snapchat, is timely. 

While the mobile messaging app will never be as big as Amazon, the number of revenue companies like NTWRK can make from shoppable content has a lot of room to climb. More than half of the U.S.’s Gen Z population has watched at least one Snap Original, according to Snapchat. That’s a lot of key demo attention on a part of the app in which Snapchat CEO Evan Spiegel sees real upside. As recently as last month Spiegel told shareholders that one of his priorities is growing e-commerce on the app. NTWRK’s latest series is likely to be the first of many shoppable shows on Snap Originals.

“Optimizing social commerce needs to be a priority for Snapchat, as the push for integrated shopping is being excelled on other social media platforms like Facebook and Instagram,” said Emma Chiu, global director of Wunderman Thompson Intelligence. ”Snapchat is well known for creating intimate, private and trusted networks for users, and their e-commerce strategy should reflect this.”

“This is our agency’s twelfth year working with brands and influencers on holiday content and we’ve never had so many programs — at least 20% more than last year,” said Kristy Sammis, founder of influencer marketing agency Clever and executive director of the Influencer Marketing Association. “Influencer and creator content has become ubiquitous [during the holiday season] — in the last two years it’s moved from being an optional part of marketing plans to an essential part. Now that professional production studios aren’t reliable — due to safety measures — influencers are the go-to.” 

Additionally, influencer marketing execs say the uptick this year is likely due to the significant production costs of the necessary safety measures. With many influencers able to create their own content as well as being able to shoot with the people in their quarantine pods, the financial appeal of working with influencers this year has spiked, said Vickie Segar, founder of influencer marketing agency Village Marketing.

“Normally we would look for talent and pick people to be in groups; now an influencer or creator will send through talent they are comfortable shooting with,” said Segar, adding that this shift to influencer marketing is part of a reevaluation of the production process. “Covid has forced people to make changes to how they produce content and break the traditional production model. Production is being innovated right now.”

At the same time, with some states urging people to stay at home as the coronavirus once again surges, people are likely spending more time scrolling on apps and seeing influencer content, said the execs. 

“The budgets have shifted,” said Amanda Marzolf, partner in the digital division at Abrams Artists Agency. “There aren’t as many big commercial shoots, no big PR events or point-of-sale materials. People are at home, spending time on the internet, on social media so the budgets have really shifted to that.”

The increase in requests for holiday content by influencers has come with a more eclectic mix of brands making those requests; typically clothing and beauty brands are the primary brands asking for content from influencers this time of year. However, now the requests for influencer holiday content and campaigns are coming from a wider variety of brands including outdoors gear, like Igloo Coolers, home goods, cookware and home fitness. 

While holiday campaigns are typically meant to be “feel good” marketing, there’s been a push from marketers to get holiday content that leans into the typical holiday aesthetic— Santa hats and decorations, eggnog, six-foot nutcrackers etc. — even more than usual this year, according to Danielle Wiley, CEO of influencer marketing agency Sway Group. “Everyone is grasping for nostalgia and happiness where they can get it,” said Wiley. 

Encouraging joy and resilience as well as nostalgia in the holiday campaigns has been common, according to influencer marketing agency execs. In working with influencers like kindergarten teacher Mackenzie Adams and Broadway star Robert Hartwell for the “Letters to Home” holiday campaign, Lowes worked to find “fun and unexpected partnerships” with influencers who have “capture[d] the heart of the nation through their resilience and joy, despite the challenges they’ve faced,” noted Lowes CMO Marisa Thalberg. 

“Brands are allowing influencers to be a little more creative (and therefore more festive) this year,” said Sammis. “2020 has been rough on all of us, and we can all benefit from truly cheerful content, Santa hats and all.”

One TV network executive estimated that roughly 50% of the money committed in this year’s upfront is secure compared to 70% in past years.

“Asking clients to commit to the third quarter of 2021 at this point is a tricky situation because there were problems committing to the fourth quarter,” said one agency executive.

Flexibility was the theme of this year’s upfront, and shorter cancelation windows and higher cancelation amount thresholds were the major trends in deal terms. However, there were two other, quieter developments that have made advertisers’ upfront commitments even more fluid, according to agency and TV network executives: divvying up commitments to take advantage of the more favorable cancelation options and signing commitments in which the money is less secure than in a traditional upfront deal.

Some advertisers and agencies back-loaded their deals by setting a larger-than-normal share of the committed money to be spent in the second and third quarters when cancelation options are more favorable. “If you put more money in the second half [of the year-long upfront deal window], then you’re naturally improving your ability to cancel,” said a second agency executive. 

Secondly, a higher-than-usual number of upfront deals adopted the so-called “endeavor” model that makes commitments much more fluid by not requiring advertisers to place their ad buys for the full year upfront. “We hit a lot of endeavors in this past upfront. It was a big style of buying we saw happen this year,” said a third agency executive.

In an endeavor deal, an advertiser commits to spend a certain amount of money over the course of the year, as with a traditional upfront deal. However, unlike a traditional upfront deal, the advertiser does not have to put in their order for how they want that money spent until later.

“Say you place a $50 million commitment. You give $25 million now and then endeavor to pace toward the additional $25 million throughout the year,” said the third agency executive. Moreover, the advertiser gets the lower price of the larger $50 million commitment despite only actually committing $25 million upfront. 

While the intent is for the advertiser to still spend that remaining money, the ordering delay creates an opportunity for the advertiser to back out. More likely, however, the advertiser would attempt to renegotiate the commitment when the time comes to place the remaining orders, according to agency executives. If an advertiser is looking to spend less money than remains in their commitment, it may have to agree to pay a higher price.

That may still work out in the advertiser’s favor, though. Since the renegotiation would be based on the lower price agreed to under the larger initial commitment, the higher renegotiated price may remain lower than the price the advertiser would have paid if the initial commitment had been smaller. 

However, there are trade-offs with the endeavor deals. Chief among them, advertisers typically had to choose between deals offering staggered order dates or more favorable cancelation options, like 30-day rolling cancelation windows. But more to the point, an advertiser exploiting an endeavor deal by reneging on their commitment may not be penalized in this year’s upfront — but will pay for it if they participate in next year’s upfront. 

“There’s the risk-reward. If you [end up spending the full amount committed], it’s a good partnership. But if you come up short, when you go into the next negotiation, you can’t negotiate with the additional dollars,” said the third agency executive.

Confessional

“We don’t have a ton of highly produced original content, and our point of view is that’s what you need to compete on [connected TV]. We have social video, and it’s done fine. But a year to 18 months from now, we’re going to have to be on CTV.”

— Digital media executive

Stay tuned: Connected TV device sales

This year’s holiday shopping season could simplify or further complicate an increasingly knotty connected TV landscape.

As is the case every year, connected TV device makers like Amazon, Google and Roku as well as smart TV manufacturers such as Samsung and Vizio offered up sizable discounts for Black Friday and Cyber Monday in hopes of taking a prominent position in people’s homes. But this year that position is likely even more valuable. These companies have been building up their respective CTV ad businesses: the more devices they can sell, the more ads they can sell.

How this year’s CTV device competition shakes out may not take shape until after the holidays when people unwrap their gifts. But an early winner may be Samsung. The company’s 4K TVs were a top-three most-purchased product on Thanksgiving Day, according to Adobe.

Of course, what smart TV and CTV devices people purchase and what CTV platforms they actually use can be two different things. On Nov. 28, atop Adobe’s list were Microsoft’s latest gaming consoles, which can double as a CTV device. And on Cyber Monday, Google’s Chromecast was the only smart TV or CTV device to crack Adobe’s top five most-sold products that day.

Numbers don’t lie

3%: Year-over-year increase in TV ad spending in the third quarter.

1.03 billion: Number of total minutes that people spent streaming Disney+’s “The Mandalorian” during the week of Oct. 26.

What we’ve covered

As gaming becomes a culture touchstone, advertisers toggle in:

• Marketers are finding more ways to get their brands in games, from branded characters to programmatic ads.
• Bud Light, Duracell and L’Oréal are among the brands investing more in gaming.

Read more about gaming here.

Publishers reaping the benefits of Snapchat’s strong second half:

• Over the past quarter or so, publishers’ Snapchat revenue has increased, even compared to a year ago.
• A rise in CPMs contributed to that boost, as did ad placement changes Snapchat made in the spring.

Read more about Snapchat here.

What we’re reading

MGM’s sale squabble:
MGM is among the few remaining major independent film and TV studios. Whether that remains the case for much longer is up in the air, according to the Los Angeles Times. As Netflix has produced more projects internally, companies like Disney and WarnerMedia have similarly redirected their own studios’ efforts to creating movies and shows for their respective streaming services. This trend has thrown shade on the future of independent studios, and the pandemic’s impact on the theatrical business has only further dimmed the prospects for a company like MGM, which has had to postpone the next James Bond movie until next spring. As much as the studio and its programming library may be alluring for a company looking to build up a streaming service and/or original programming division, the pandemic’s impact on production and theaters may offset the allure. Additionally, the studio’s investors are reportedly split on whether to sell MGM or not.

TV’s mask mess:
Ubiquitous as masks have become in today’s culture, there’s little consistency in how people wear them. That is also true of characters on TV. According to Vulture, TV shows are portraying mask-wearers of all types, including having characters sans masks standing among others who are responsibly covering their faces. The inconsistency is at best annoying and at worst infuriating. But it’s also reflective of reality. There’s the actual new normal in which plenty of people are out and about without masks (even when they’re out with people who are wearing masks). But there’s also the reality of entertainment. How compelling or charming can a character be when their face is half-hidden? This isn’t an easy dilemma to deal with, which is probably one reason why some shows are opting to ignore the pandemic altogether and setting themselves in a world where there is no coronavirus crisis (unfortunately we don’t live in that world, so please wear a mask).

Like in the U.S., participating U.K. publishers will receive direct payments from Facebook, sometimes over a period of multiple years, to distribute content they are not currently putting on the platform; the largest deals, according to the Guardian, are worth millions of pounds per year. And like in the U.S., Facebook assured participating publishers that participating in the program would expose them to added Facebook users.

But for now, most participating publishers still have to take Facebook at its word. More than a year since Facebook News launched in the U.S., it remains impossible to distinguish Facebook News traffic from overall Facebook referral traffic for most of the program’s participants. And early tests by Facebook to break News traffic out of the platform’s overall referrals show a narrow impact from the product: Facebook News typically accounts for a low single-digit percentage of the traffic that a story gets, one source familiar with the product said.

“It is not something we think about,” said a source at one publisher which has not yet been able to track News traffic.

All new digital products take time to get traction, and Facebook has been particularly deliberate in rolling out News since CEO Mark Zuckerberg first mentioned the concept in the spring of 2019. After announcing the launch last fall, Facebook spent much of the first few months rolling News out to small subsets of its user base, only making it fully available in April 2020. Six months in, Facebook said “millions” of people were using News, but would not be more specific. A spokesperson said Monday that use of News has expanded this fall, but would not provide specifics.

Since then, Facebook has been selective about what kinds of stats it shares about the product. Over the past few months, the social media giant has cited internal data which it says shows that 95% of the audience Facebook News delivers to publishers is new and incremental.

At an intuitive level, that is unsurprising. A Facebook user is less likely to encounter content from publishers they are not following in their news feeds, so a curated environment should put a wider variety of publisher content in front of News users.

But after years of measurement errors Facebook has made across its platform, many participants are taking Facebook’s assurance with a grain of salt.

“We have no way of verifying if that’s true,” said a source at second publisher whose content is available in Facebook News.

That stat also doesn’t share how big a number that 95% comes from. New user behavior can take time to develop, and the News product can only show small percentages of the content produced by the hundreds of participating U.S. Publishers.

But currently available data suggests that Facebook News’s audience is still small. The second source noted that the percentage of referral traffic Facebook delivers for their site has remained essentially flat across the year.

A source at a third publisher whose content is on Facebook News noted that referral traffic from Facebook this year has not behaved differently than it has in years past. “There’s nothing there that’s driving any added success,” that source said.

But most of the participants regard those incremental audiences as icing — albeit a thin layer — on the cake. Beyond the value of Facebook formally recognizing and distinguishing factual, well-reported journalism by putting it in a distinct corner of its platform, every source contacted for this story said that the direct compensation for their content remained Facebook News’ biggest value, and they were keen to see it continue.

While the direct payments are not enough to keep a media company afloat, they represent an important shift in the relationship between platforms and publishers that the latter group is keen to press further, particularly with platforms continuing to face antitrust concerns.

“Don’t get me wrong,” the second source said. “We’ll take it.”

To mix metaphors, buyers who are still focusing on the traditional ad buying ecosystem can’t see the reality of the forest because they’re too busy counting all those supposed viewers that can’t see or hear them — all those unseeing, unhearing trees.

Reaching beyond ‘reach’

How did we get here? To paraphrase author John Green, slowly at first — and then almost overnight. 

In the 1950s, when there were just three major television networks playing to a captive audience, viewers were exposed to about 300 commercials a day, which had a reach of 90 percent. There was less competition for attention, both on the TV screen and elsewhere in the home, unlike now, when there are almost 500 scripted original programs on TV and more than 860 over-the-top (OTT) apps available.

Since viewers had fewer choices of what to watch, and little control over how or when they watched programs, the math for ad buyers was relatively simple. Ratings, a broad measurement of the number of households tuned to a particular broadcast during a particular window, was the yardstick for the assumed effectiveness of ads that aired during the same broadcast — and therefore the cost of those ads. An ad that aired during a program with an audience of 10 million was more expensive than an ad that aired during a program with an audience of 5 million, based on the assumption that twice as many viewers saw it.

But now, with so many for TV and OTT programs available, almost nothing is the same.

Viewer attention: A new way of looking at things

In the 21st century, viewer attention is the true measure of an ad’s success.

Yet, viewers’ attention is more difficult to capture than ever. In the U.S., adults spend large portions of their day connected to screens, but the median duration of online attention to those screens is mere seconds. Television viewing is now largely a personalized, on-demand experience. Moreover, individuals often split their attention between two screens at once. More than 80 percent of the TV audience now uses a second screen while watching TV. 

So, while the TV in the living room might still be on all evening, as it probably was in the 1950s, family members are likely scattered all over the house at the same moment, viewing different content or games on their personal devices.

In short, at a time when TV viewers are so easily distracted, an ad-buying system that still leans exclusively on ratings is obsolete. Since ad buyers can no longer assume that audiences are engaging with specific content, they must optimize their campaigns with person-level attention data, to ensure that TV dollars are not wasted. 

As Paolo Provinciali, vp of media and data for Anheuser Busch, puts it: “If marketing is about reaching people with a brand message in order to drive an action or perception change, we need to make sure they are paying attention to that message if we want it to drive impact. We can’t be optimizing against empty rooms and a distracted audience.”

Viewers aren’t just ignoring ads — they’re avoiding them

Getting eyes on ads would be challenging enough in an era of rapidly diminishing attention spans and ever-expanding viewing options, but the problem is actually worse than that: Technology enables viewers to actively avoid ads, and over the past decade, numerous studies tell us the vast majority of adults skip them when they can.

The good news is that there is a lot of programming that captures significant viewer attention from specific audiences. And, in even better news, creative ads, in context, are still highly effective at engaging audiences. With person-level attention data, ad buyers can find the right audience — one that’s paying a lot of attention — across linear and CTV. 

On the other hand, ratings do not always correlate with attention. Often advertisers can find greater value in a show with moderate ratings and high attention. That combination results in far higher ROI. A smaller audience can often deliver better results than a larger audience — as long as it’s the right audience.

A new frontier of possibilities

Fortunately for ad buyers and sellers, the industry is moving to standardize the measurement of viewer attention at a micro level.  

Many premiere TV and advertising measurement companies, such as Oracle Data Cloud’s Moat Reach, Xandr, VideoAmp and iSpot, have incorporated person-level attention data into their measurement programs. The industry is moving towards attention as an additional qualitative currency for ad buying and selling. The Attention Council, an industry group composed of leading advertisers at some of the biggest brands, along with next-generation measurement providers, is also focused on standardizing cross-platform attention measurement.

Savvy buyers and sellers want to be able to measure TV, CTV and digital in the same manner — and that capability is at hand. All that’s required is a willingness for brands to partner with media sellers to use the same standard — which shouldn’t be a hard sell, given that both stand to gain. 

Provinciali, at Anheuser Busch, says he’s already seen where this can go: “Brands and media sellers can mutually benefit. This should be a collaborative process to evolve to an attention-based media industry.”

For brands, incorporating attention data into buys means each ad placement has greater value than buys based on traditional ratings. For media sellers, a finely tuned attention metric helps give more demonstrable value to programming as those ratings fall.

Brands and agencies need partners that are built for today’s complicated, data-driven advertising ecosystem, but many are finding that their legacy relationships — built on legacy technologies — aren’t up to snuff. To help marketers capitalize on all the hard work they’ve put into their data transformations, the industry needs a new data partnership model.

Data and change: Drivers of transformation

There’s no shortage of forces driving the need for brands to own their customer relationships. 

From new privacy regulations to the continued deprecation of third-party cookies, brands have had to recognize that continued success in digital advertising requires a new way of accessing and managing customer data. That reality has been driven home repeatedly for legacy brands that have watched emerging direct-to-consumer brands encroach on their territory with innovative new models for connecting with and advertising to consumers. 

At the same time, even as walled gardens have continued to absorb a greater portion of ad budgets, marketers have realized that allowing these platforms to continue to own the relationship with their customers is simply not sustainable in the long term.

For advertisers, the problems within today’s digital ecosystem are obvious. Unfortunately, there’s little consensus as to how to solve these formidable challenges. But the first step is clear: Brands must own and manage a first-party understanding of customer identity. The question is, how can they then translate that understanding into efficient campaign deployment? 

The efforts put forth by brands in recent years to transform the way they think about and tap into data has been tremendous. Even large CPG brands, which have historically been intermediated by retailers and lacked direct consumer connections, have made great strides in first-party data investment and customer relationship building. The problems arise when they look to centralize that data, match it to third-party resources and deploy it compliantly for campaign purposes. That’s often not their fault, though; it’s the fault of their partners.

The breakdown of legacy data partnerships

Today’s largest data companies are falling down on the job when it comes to helping brands put their hard-won first-party data strategies into action. That’s because they simply don’t have technology solutions that can adapt to today’s rapidly changing data environment. Instead, they’re tasked with continually bending their legacy tools — often to the breaking point — in bespoke ways for existing clients. These applications are inefficient, expensive and often insufficient.

Recognizing the weaknesses of their legacy data partners, some brands have tried to fill the gaps with point data solutions that are engineered to accomplish specific tasks along the path to first-party data deployment. Unfortunately, these companies typically lack robust service capabilities, leaving marketers to try to connect the dots for themselves. At best, the result is a fragmented mess of data connections that lose fidelity from point to point. At worst, brands can find themselves in direct violation of today’s ever-evolving data privacy regulatory requirements.

Marketers need a new paradigm

Today’s brands and agencies have put a massive amount of effort into turning the advertising ship toward a brighter future driven by first-party data. But they need a new model of data partnership to take them the rest of the way through deployment. Today’s legacy players and point solutions simply aren’t cutting it.

To end the dissonance within our industry, we need a disruptive approach to data that rethinks the technology and economics around today’s marketing paradigm. The model marketers need is more akin to a “data bureau” — a new data orchestration system that can ingest any form of identity, individual or household, assign a persistent ID connected to attribute data and then activate against any other media or form of identity. 

For any brand, it’s crucial that their data partners work independently of their chosen technology, enabling them to meet privacy regulations by linking their data back to validated individuals or customers. In this way, the very same data bureau model is compatible with CDPs, DMPs, onboarders and marketing clouds, facilitating privacy-compliant portability of critical data and intelligence between these different systems.

Brands need the right software, and the right hands-on service, to prepare their data for optimal matching in processes that are kept entirely behind the marketer’s firewall, and under their own complete control and supervision. When brands can deploy their first-party data in a privacy compliant manner, marketers can at last bring their data transformations to fruition in a future-proof way.