Month: December 2020

This interview has been edited and condensed for clarity. 

How has the pandemic changed your advertising?

Since the beginning of the pandemic, we have dramatically improved our customer journey online. By improving the customer journey, we defined each touch point very clearly and optimized our message in order to bring those customers down our funnel to buying. We built this digital ecosystem where our social channels, website, search, media partners and e-commerce platforms are connected to be a very consistent experience.

Are you now spending more ad dollars on digital channels?

In the last couple of years, we have dramatically increased the share of digital media in our overall media spend. TV, particularly in the U.S., still has a huge role to play for Grey Goose to really drive top of mind awareness and grow the reach. If I look at the share of traditional media it was probably around 60-70% of the total investment [in previous years]. We’ve probably shifted closer to 50/50 now. Directionally, that’s what we’re leaning towards. We have to learn about what we did this year, whether we reached our objectives and KPIs. But a brand of our size still requires traditional media in the U.S.; I still see traditional media being a big player in our media plan. 

We’ve heard influencers will play a big role in holiday campaigns as people are spending more time on social channels. Is that the case for Grey Goose?

For the holidays, we recognize that these will be different than what we usually experience. However, what we want to remind people is that even in the current situation there are still great things to be celebrated. We’re partnering with influencers to show how they are making the best of holidays. The first episode [of our new content series, “Holiday Best”] with Jay Ellis already dropped. Over the next days and weeks you’ll see other [influencers] partner with us to entertain and inspire viewers to reimagine holiday traditions and embrace the best of this year.

Why did you want to work with influencers for the holiday campaign?

Influencers play a huge role in terms of partnerships. They bring people into the brand on social media platforms and help us drive them through the funnel with retargeted messaging to our e-commerce partners. So the fact that people are spending more time on social media means influencers can play the role of amplifier. 

How has the accelerated shift to e-commerce changed your approach to product offering?

We’ve also been driving programs for them to enjoy simple to-do cocktails at home. We partnered with cocktail courier, for example, during the U.S. Open. That’s a dramatic shift for us in how we approach our partnership with the U.S. Open. We launched cocktail kits and partnered with Cocktail Courier to enable people to buy these kits with a celebratory cup. We sold the equivalent of 40,000 cocktails that people made at home with this kit. It was absolutely staggering. 

Will you be selling kits again?

For the holidays, we made another kit. In our research, we identified that holiday punch, particularly with vodka, would be a drink that people would be looking for. So we created a program to deliver holiday punch tools and ingredients for the holidays. We expect huge success out of it and we have added an influencer layer to it. We partnered with a streetwear designer, Anwar Carrots, to do his own version of the holiday sweater to celebrate the season at home. That’s how we’ve approached increasing our e-commerce [business]. By giving solutions for people to create memorable experiences at home as well as create great cocktails themselves. 

What advertising strategy have you tested this year that’s surprised you?

We’ve seen a huge increase in the use of QR codes. Before the crisis, QR codes [had fallen out of favor]. Now, people realize they can actually snap a QR code with their camera and become more popular. One solution that’s starting to pop up that’s more interesting is TV ads or online videos with QR codes where you can snap it and get to an e-tailer website. We’ve tested that this year. It’s super interesting to me because it enables us to connect the top of the funnel, driving awareness of the brand and giving an opportunity right there when the brand is top of mind to order it or engage with the brand via incremental content that somehow amplifies what’s on the screen. That’s something that’s starting to appear more and we’re investing. 

Known at its core for being a home for user-generated content, Allrecipes collects recipes and modifications to recipes from home cooks around the world. But what’s become valuable for the food publisher in just the last couple of years is that it has been able to find a way to make money off of the first-party contextual data from the ingredient substitutions that are noted in users’ comments.

“Allrecipes is over 20-years-old and I’d love to say that we have 20 years worth of review data but we don’t,” that number is closer to a decade’s worth, said Grace Preyapongpisan, vp and chief of business intelligence at Meredith. That translates to about 7 million user submitted recipe reviews and the site continues to receive thousands of new reviews with recipe modifications landing in the comments every week. 

Meredith’s Business Intelligence division has been in its current iteration of data collection for the three years and Preyapongpisan said the team started with Allrecipes out of all Meredith’s portfolio of brands because the site “is the best example of utilizing user generated comments in a way that gives insights to internal teams as well as to advertising partners,” she said. 

Receiving feedback from readers on recipes gives Allrecipes a leg up in being able to decipher insights from those comments because the content is more formulaic in nature.

“Recipes are a great starting point for some of this text-based mining because some of the language tends to be fairly structured,” Preyapongpisan said. 

And recently, early on in the pandemic, people were going to the grocery store less and wanting to use the ingredients in their homes, so the number of substitutions and modifications annotated in readers’ comments increased, said Preyapongpisan. That information ended up being very valuable to consumer-packaged goods companies, she added. 

“Mayo was being used or substituted in things that you’d never expect to see,” she said. “Our partners were really interested in seeing if there were opportunities to market their products in different ways.” 

One salad dressing manufacturer, which Preyapongpisan declined to name, came to Meredith looking for other uses for its condiments and wanted to see if any consumers were talking about possible uses on Allrecipes. 

But there are still challenges, she continued, including coding every single word to figure out which are ingredients, which are modification actions and whether or not the action yielded a positive or negative result. Then, her team has to figure out how many people tested that modification and then, of course, cooking the recipe in order to confirm its validity.  

Therefore, the process of extracting the contextual data from user-generated content and comments on posts is not easy in it of itself, which is why Preyapongpisan said it’s taken a while for Meredith to get the algorithms built and the team in place to successfully make sense of the data that’s available. 

The Business Intelligence team at Meredith runs this process, which includes the taxonomy team that helps identify the keywords in the posts, as well as an analyst group that works with editorial to try and derive meaning from the data that the algorithms collect. Then there is a team that works with advertisers to use the data in sales pitches, she said. 

So the problems with getting this data-mining operation off the ground was not with sorting through the content or figuring out what the team could do with the information, but actually having the team who could execute this strategy in the first place, she said.

And at the end of the day, when it comes to Allrecipes’ strategy for understanding ingredient substitutions, Meredith does not necessarily need someone to make a profile on Allrecipes or collect an email or a person’s location to make money off of their posts. 

“We look at data in terms of aggregating what people are doing to build more personas and generalizations of groups of people rather than focusing on the individual,” said Preyapongpisan. “It’s more important for us in the context of an ingredient substitution to know that this was successful for many people rather than focusing on was this successful for one person.” 

Other publishers outside of the cooking and recipe space are not at the same stage that Meredith is at with collecting contextual data from user comments. 

G/O Media’s CEO Jim Spanfeller said that while he sees the “comment section as an opportunity to build on the very tight connection our readers have with our content creators and with each other,” there is not currently a strategy for data collection on those platforms. A third publisher that asked to not be named also said that the company does not use its comment section as a first-party data cache. 

Vox Media acquired publisher commenting platform Coral last year as a software-as-a-service product that nearly 200 media sites currently pay the company to use, according to Andrew Losowsky, head of Coral. Through Coral, publishers are able to learn about who is leaving comments on their sites via profiles that readers are prompted to create before engaging with a publication.

And while Coral provides data about who the users are on an individual basis, the first-party data is limited to what is in those profiles, rather than what those users are actually saying in the comments themselves. The contextual data beyond identifying spam and toxicity does not get read, Losowsky said.

“It doesn’t surprise me that there aren’t a lot of publishers not doing much with this information,” Preyapongpisan said. “It’s not easy.”

Having previously worked with Jerde at Adweek, Digiday editor-in-chief, Jim Cooper said, “I have always been impressed with her steady, calm and collaborative presence that’s paired with a pretty ferocious work ethic. I’m confident she will be a great cultural fit as we expand and move forward into the coming year.”

Most recently, Jerde served as Adweek’s publishing editor, where she covered traditional and digital publishers’ business models. She also oversaw political coverage ahead of the 2020 election.

“At this point, we’re testing all crew and talent. When we started, we were only testing the talent who would be unmasked, but it’s become more industry norm to test our crew,” said Jim Huie, director of production at production company Alkemy X. 

While testing has been a requisite part of TV and film shoots, local authorities including the Los Angeles County Department of Public Health did not require shorter-term productions, such as digital videos and commercials, to test cast and crew members. Given that, the Association of Independent Commercial Producers advised its members that polling —having cast and crew members report whether they had experienced any Covid-related symptoms — was a preferred screening process to testing. Finally on Dec. 3, the AICP agreed to make testing a requirement for its members, as other film and TV unions had done back in June. Beyond the unions, productions have taken it upon themselves to mandate health and safety protocols.

“The entertainment industry has really taken it seriously and adopted strict guidelines,” said one producer who works on digital and branded video shoots. “You have to pass so many more tests and wear so much more [personal protective equipment, such as masks] than people going into a store or restaurant.”

Jukin Media, for one, has adopted a three-stage testing process for its video productions. Cast and crew members take tests 72 hours before a shoot that return results within 24 hours. Then, crew members that have to work on location to build and light a set the day before a shoot are required to pass rapid tests that return results immediately, but can be less reliable than the 24-hour tests. Then on the day of the shoot all cast and crew members are required to pass a rapid test on site. “Doing a three-stage approach might be overly cautious, but safety and health is the number-one concern,” said Jukin Media CEO Jonathan Skogmo.

Creative Humans, a company that connects advertisers and agencies with freelancers for video productions, requires all freelancers in its network to be tested three days before they start working on a shoot, according to the company’s founder and CEO Darlene Liebman. Asked if that means people need to get tested multiple times if they are working on several different shoots within a given week, she said, “Yes, they should be constantly getting tested if they are moving from shoot to shoot.”

As Liebman’s comment implies, productions cannot be cautious enough. However, the importance of prudence has become so heightened and the number of new Covid cases has risen so rapidly that the combination seems to be pushing some companies to push pause on their physical production returns. According to the official Los Angeles area film office FilmLA, the number of production permit applications declined month over month for the first time in November since productions restarted in June. 

The anonymous producer said that clients had been steadily easing back into physical production in July. But even then clients were cautious. While the company had been limiting crew sizes to the point where only a director of photography would be sent to a talent’s home to shoot, in a few cases the clients nixed that idea.

“They said there would be no interaction at all” and that the DP would only drop off a capture card for the talent to use when recording themselves, the producer said. Then, as cases ticked upward in the fall, their company’s client work has gone entirely remote since October and is expected to remain that way until at least January to guard against a shoot putting people’s health at risk. “There’s no guarantee,” said the producer.

Here’s the rundown on PubMatic’s post IPO plan for growth in an ad tech market that’s undoubtedly having a moment in spite of its unresolved issues.

The key details

• PubMatic raised $118 million yesterday off the back of 5.9 million shares sold at $20 each. That was up from the $16 to $18 price range the ad tech vendor had initially set.
• There are currently around 1,100 publishers and app developers selling inventory via the platform, which includes biggies like Verizon, News Corp and Zynga.
• PubMatic’s programmatic auctions handle 134 billion ad impressions daily, that generate one trillion advertising bids a day
• PubMatic has been self-funded since 2012, though did raise $60 million in venture capital.
• PubMatic now trades on Nasdaq under the ticker PUBM. 
• Over the last 12 months through the end of Q3 2020, PubMatic made $127M in revenue, up 33% year-over-year.
• PubMatic delivered its sixth straight year of positive cash flows from operations.

PubMatic’s plan

What usually happens after companies successfully go public is that they use the influx of capital to expand, to hire, to acquire businesses, to move into bigger offices. PubMatic hopes it’s in a position to do the same once its IPO closes on December 11. 

“While we’ve been self-funding for over half a decade we want to further accelerate our growth and capitalize on the large market opportunity,” the ad tech vendor’s chief commercial officer Jeff Hirsch told Digiday. These are heady times for ad tech vendors like PubMatic. Increasingly advertisers are buying more ads online in the midst of the coronavirus crisis and in turn are using more ad tech to do so. “It’s a good time to be in digital as there are a wealth of opportunities,” said Hirsch.

The question for PubMatic is where to start. 

There are three priority areas for PubMatic: the first is to focus on convincing more publishers to let it sell impressions on their behalf. The second is to help advertisers and their agencies get smarter and more efficient around how they buy impressions and from whom. Lastly is figuring out how to bring identity resolution (i.e. how the walled gardens are able to understand each user) to the open web. 

Given its trend-of-the- moment status in ad tech, CTV is likely to be what a public PubMatic prioritizes. In many ways, CTV is a chance for ad tech vendors to bring in reams of dollars they wouldn’t have usually had access to as so much more of the ads there are now bought with dollars usually reserved for TV.

As Hirsch explained: “We’re seeing TV money move into digital as buyers benefit from technology and automation.” PubMatic’s success will be predicated, at least in part, on its ability to make it easier for CTV media owners to sell their inventory at scale. In other words, PubMatic wants to play a role in allowing more publishers to run simultaneous auctions from all bidders to increase their chances of making the most money from them, a process commonly referred to as header bidding.

“That’s an area where we believe we can provide value in the CTV world,” said Hirsch

Why it matters

There is a historical irony at the heart of Wall Street’s current infatuation with ad tech. Specialist ad tech vendors are pitching themselves as a jack of all trades to keen-eyed investors — but in doing so those pivots are returning the market to the more freewheeling and discursive ways of the early publicly traded ad tech vendors that investors eventually turned on.

Reading between the lines

PubMatic isn’t desperate for money — at least not yet. Otherwise, it wouldn’t have been so conservative with its IPO expectations of $115 million. Not when investors have warm, fuzzy feelings for ad tech thanks to The Trade Desk’s robust success since its own IPO in 2016. Investors are paying more than 35 times the ad tech vendor’s projected revenues for next year. 

It’s not the initial investor reaction PubMatic is arguably focused on, its long-term vision. A big part of The Trade Desk’s success since its IPO four years ago has been how it articulated its intrinsic value to the industry. 

“When The Trade Desk’s IPO happened they framed themselves in the minds of investors that they were going to be an alternative, not a competitor, to Google,” said Bob Regular, CEO of Infolinks. “They understand that in any market you need at least two choices — Google can’t be your only choice.”

Pubmatic needs to create a narrative around the business. 

“We’re not a data-management platform, nor are we a demand-side platform. We’re an SSP for publishers,” said Hirsch. “But what we do find is we’re able to leverage our infrastructure more robustly for more parts of the market.”

Problems ahead

Between Google phasing out third-party cookies from Chrome and Apple making its own mobile identifier opt-in, the mechanisms ad tech vendors like Pubmatic use to track people across the web and mobile apps are becoming scarce. That could limit the quality of ad impressions those businesses are able to sell. Furthermore, Pubmatic makes a lot of money from a handful of players like Verizon. If one of those businesses struggles then it could mean bad news for Pubmatic.

The big picture

Companies like PubMatic are starting to realize that the industry is moving to an age of integrated ad tech services. There was a time when it was enough for PubMatic to succeed on the strength of the publishers it represented. That’s no longer possible in a market that’s gone through so much consolidation and left most ad tech vendors selling the same impressions. Now, those businesses are having to build themselves up again on the strength of their ties to buyers, not sellers.

PubMatic did this earlier than others. It did this by building preferred relationships with media buyers — so in exchange for larger commitments from them the ad tech vendor would offer incentives like better data, new tools and discounts. And at the same time, PubMatic built strong technical relationships with the ad tech vendors like The Trade Desk that compete in its auctions. Doing so meant the chances of failed bids from those ad tech vendors was at a minimum. 

While trying to be all things to everyone could dilute PubMatic’s value, in some ways it’s the only play it has. Buyers, publishers and former employees interviewed by Digiday describe a well run, but an ultimately ordinary ad tech that has never fully been able to differentiate itself around some of the sector’s milestone moments, from the advent of header bidding to the emergence of CTV.

Now is its time to change that.