Month: February 2021

Unbundling’s origins

It was a terrible idea at the time because it set media agencies off on a path of figuring out how to monetize leverage and media billings — how to make money off the money. Then in [2015] the transparency shit hit the fan, and [then Mediacom CEO] Jon Mandel stood up at the ANA. I would put Mandel’s face on a T-Shirt — he’s our Che Guevara. He validated the proposition we had from the beginning, which is, we should be paid for giving advice as objectively and neutrally as possible. If you follow the trail of money, media agencies did the exact opposite. We operated transparently this whole time, largely because we were never big enough to be invited to the kickbacks party anyway. That really became a dividing line between independents and holding company agencies.

Because transparency has come to the forefront, holding companies aren’t allowed to get away with what they used to, so now they’re looking for different ways to make money. It’s now turned into ‘Yes, of course we’re consultants and we plan — but now we also have big data operations we can sell you alongside [agency] trade desks.’ But they’re still trying to figure that out because they can’t make money just on consulting.

Margins and disclosed vs. non-disclosed

The old story is the holding company shops would accept a lower fee, then they’d make money behind your back — whether it was hidden margins, rebates, kickbacks, whatever. Some of them were transparently non-transparent. The problem we had with it from the get-go was they never walked clients through how they were going to make the money. They found ways to bury the language in the contract around disclosed versus non-disclosed buying. And they pushed as much through the non-disclosed way of buying that they legally could. Why? Their contracts were written well. That left clients with a lot of egg on their face — because who’s going to admit that they let their agency get away with this? Especially when they were being asked to beat their agency up on pricing.

Holding companies are very good at packaging solutions that sound good, whether it’s true or not or can be executed. There was a recent large review where the winner (a holding company agency) told me outright, “We sold them a data story that we’ll never be able to execute.”

Brand and performance, not brand vs. performance

We’re at an interesting inflection point: On one side, performance media, performance marketers, DTC and digital, and [on the other] brand building over the long term. The immovable object meets the unstoppable force. But there is no either or. Consumers don’t walk around thinking they’re in a mobile e-commerce channel — they’re just trying to buy something.

We’re built the way consumers consume media, not the way media is purchased or transacted. Both performance and brand media work to help each other. And I think marketers really struggle with this, with their teams, with talent, with measurement.

Let’s be clear: data and measurement aren’t the bad guy here. The bad guy is false sense of security around putting things in short-term order where you can instantly gratify a result. A marketer shouldn’t have to justify the value of brand to anybody. Yet they do need to understand how everything works together. If you don’t start fundamentally from planning holistically, and measuring it in a unified fashion — you’ll be fired in 3 years. Because you can’t point to anything that says definitively it’s working.   

Color by numbers

International media auditing firm ECI Media Management last week released its quarterly media inflation report, this latest one offering up its forecast for 2021 ad revenue growth in North America and globally.

The key findings:

• Surprisingly, in North America, out-of-home media is expected to grow the most, at 6.8%, followed by digital video at 5.5%, digital display at 3.4%, radio at 2.9% and TV at 1.4%. Print media is forecast to continue to shrink: -4.6% for magazines, and -6.0% for newspapers.

• On a global scale, growth estimates are more level across the board, with digital video leading the way at 3.6%, followed by growth of 3.4% each for digital display, OOH and TV, and radio just behind at 2.8%; print finds itself in the negative again, but on a more modest scale, with newspapers dropping 1% and magazines down 2.3%.

Take off and landing

—In agency wins, IPG Media’s Mediahub won global media AOR duties for messaging platform Slack, which is owned by Salesforce. And We Are Social won Kraft Heinz’s European social media business, and will run it out of its Germany office.

—Publicis Groupe promoted Helen Lin, chief digital officer for Publicis Media, to CDO for the entire holding company, reporting to Dave Penski, CEO of Publicis Media US and chairman of PMX.

—MDC Partners hired Deirdre McGlashan last week to be its chief media officer, hiring her away from Mediacom where she had been global chief digital officer. McGlashan reports to MDC chairman/CEO Mark Penn.

Direct quote

“We do notice that it’s only during special events, like Black History Month, or only when something terrible happens that people will turn their eye towards us.” — Ashley Phillips, co-founder of the Montreal-based creative agency Six Cinquième, speaking to Digiday marketing reporter Kimeko McCoy about how her Black-founded and focused agency experiences client attention throughout the year.

Speed reading

—Kate Kaye, platforms, data and privacy reporter, digs into Google’s recent deal with News Corp to pacify Australian lawmakers at a time when the duopoly is facing increasing regulatory threats across the globe.

—Meanwhile, Tim Peterson, senior media editor, wraps up the 2020 ad revenue gains of digital-forward media companies, often at the expense of traditional or linear media outlets.

—VentureBeat rounded up the motives behind the alliance formed among adtech players to figure out a way forward in light of Apple’s iOS 14 upgrade that, among other things, requires users to opt in to sharing their data with advertisers, inhibiting targeted advertising without consumer consent.

—Axios has two good stories that address the eroding newspaper publishing landscape: the first explains the expected negative impact of venture capital firm Alden Capital buying Tribune Publishing, and the second explains the merger of the national ad sales forces of two of the few remaining standalone newspaper conglomerates, McClatchy and Gannett (both of which Alden tried to purchase in recent years).  

When California residents request that website publishers stop selling their personal information in accordance with the state’s privacy law, many publishers still use that information to sell targeted ads by passing the data into programmatic ad marketplaces where they have little control over how other companies use that information. Although the publishers are using the Interactive Advertising Bureau’s CCPA compliance framework, the rickety custody of the data they share may put them at risk of non-compliance, making them vulnerable to lawsuits or legal enforcement, according to privacy lawyers.

“I would not say it’s illegal. I would not say it’s not compliant,” Jessica Lee, partner and co-chair of the privacy, security and data innovation practice group at law firm Loeb and Loeb, said of the IAB’s CCPA framework. In fact, for companies that want to continue participating in the programmatic ad marketplace, she said, “the IAB’s framework is the best option that we have.”

Still, said Lee, the IAB approach “definitely creates some risk” because the companies with whom data is shared may use the data in violation of their contractual agreements. She and other ad tech and privacy lawyers say there are risks to assuming every entity along the complex ad supply chain is clean. “There are parties in your supply chain that are taking an aggressive approach,” speculated Alysa Hutnik, partner and chair of the privacy and security practice at law firm Kelley Drye and Warren.

The New York Times’ conservative approach

For more risk-averse publishers like The New York Times, a loose interpretation of the CCPA is not an option. “We’ve really been trying to demonstrate and open the path toward a more privacy-friendly ecosystem, and so we’re trying to push the envelope,” said Robin Berjon, executive director of data governance at The New York Times.

When a California resident has opted out of their data being sold — or enabled the Global Privacy Control tool, which California’s attorney general has implied qualifies as an opt-out request — the Times prevents the ad space created by that person’s page visit from being sold in real-time programmatic ad marketplaces. Instead, the publisher relies on contextual signals and its first-party data to target ads to these site visitors.

“We basically shut down open programmatic when people are in a Do Not Sell state,” Berjon said. However, when a California resident requests that the Times not sell their personal information, the publisher’s opt-out tool states that it “will continue to share your personal information with our service providers, which process it on our behalf,” which could create exposure risks for the Times.

Berjon told Digiday those service providers perform tasks related to analytics and ad serving. He pointed Digiday to a blog post he wrote in July 2020, which noted that the company shares data about readers with tracking companies or “data controllers” to attract new subscribers. The post states that as of April 2019, the firm limited those data controllers to “marketing-related parts of the site, such as subscription offer pages,” adding, “This reduced the amount of data we shared with third-party data controllers by over 90 percent.”

The New York Times’s approach is just one of many, and a relatively conservative one when it comes to data use, said Hutnik. “There’s no common approach right now. It’s all over the map,” she said.

CafeMedia’s looser interpretation

On another side of that map is CafeMedia, which uses the IAB’s CCPA compliance framework. The company manages ad operations and sales for 3,000 digital publishers, all of which now feature Do Not Sell buttons, according to Don Marti, vp of ecosystem innovation at CafeMedia.

When people use those buttons to opt-out from sales of their data, the firm continues to use open programmatic systems to fill ad inventory, passing the same data along to third-party firms operating in those ad marketplaces as they would if someone had not enabled Do Not Sell, according to Marti. He said CafeMedia does not monitor what actually happens to the data downstream and that the company leaves it up to its third-party partners to decide how certain data might be used. “That is where it goes back to how vendors define sale under CCPA,” he said.

Given the CCPA’s vague definition, “‘sale’ is a highly-contested term,” said Lee. Because firms like CafeMedia and others employing the IAB framework leave the definition of Do Not Sell up to the interpretations of third-parties, companies intercepting that data could have various interpretations regarding what they can and cannot do with the data, she said.

Lawyers interviewed for this story lamented the lack of clarity from California’s Attorney General Xavier Becerra around how the CCPA applies to technical aspects of programmatic advertising. They said the ambiguity has created confusion in how the law is interpreted.

CafeMedia is far from the only company in the programmatic advertising market relying on the IAB’s framework. “The vast majority of our publisher partners have adopted the IAB framework,” said Eric Shih, global svp business development for Teads, which helps manage advertising for publishers including ESPN, Washington Post, BuzzFeed and others. He did not say specifically which of its publisher clients use the IAB approach. Shih said Teads requires contractually that DSPs and ad buyers abide by CCPA regulations if applicable by preventing tracking across sites through third-party cookies.

In one example Marti gave, one external company with which CafeMedia shares data has an internal firewall set up that prevents commingling of some data from other sources, therefore restricting the information used to decide how the ad is targeted.

Enforcement on the horizon

While companies using the IAB’s framework appear to be compliant under the CCPA, that status could change if the law’s definition of sale and application to targeted advertising is cleared up. And if that happens, a company would be on the hook for having shared data with another company if the latter company had continued to use it. “You could be subject to an enforcement action by the attorney general,” said Lee. Alleged violations could also trigger lawsuits under CCPA or other California privacy laws, she added.

Further clarity and a greater likelihood for enforcement is on the horizon. The revised version of the CCPA, the California Privacy Rights and Enforcement Act, which will cover data use beginning in 2022, removes confusion around the meaning of “sell,” by explicitly giving consumers the right to opt out of the “sharing” of their data. It places the burden on companies to monitor whether other entities with which they share data comply with the terms of contracts through yearly audits.

Plus, the CPRA creates a new agency intended to strengthen enforcement capabilities. That state agency, said Lee, will be watching to ensure that companies actually conduct audits. Simply relying on contractual agreements to ensure compliance of third-party partners, she said, “I don’t think that’s going to be good enough.”

As it stands, Clubhouse is limited. There are around 2 million active weekly users on the app. Still, it does offer what every advertiser wants: a highly targeted group of influential individuals in one place. The trick now is to get advertisers actually involved.

Unlike other social networks, Clubhouse is audio-based. People can join different conversations on different topics. Think of it like being able to dip in and out of panel discussions from an app minus the sandbox moment from a sponsor. And therein lies the rub for marketers: Clubhouse is ad free. While this hasn’t outright deterred marketers from the app, it has made them think harder about what they should be doing on it.

So far, this means working with one of the app’s influencers. Not only is it safe insofar as advertisers get to control who does the talking in the room, it’s also the easiest way to market somewhere that clearly isn’t a place for hard sales — yet.

In the app, these moderators — or influencers — are put on a virtual stage and can control who speaks, when, and on what topic. Their conversations are then promoted on the app’s main feed — and potentially touted to users via push alert.

“With this model, an advertiser can view a particular room as a very dedicated audience ripe for ads and brand activations released to the room’s subject matter, knowing that everyone in the room has a vested interest in the topic and was chosen to participate in the discourse, said Justin Kline, co-founder of influencer marketing agency Markerly.

It’s why Pernod Ricard cognac Martell partnered with global marketing content creator Karen Civil to celebrate black female entrepreneurs during Black History Month. Throughout February, Martell and Civil are hosting weekly Clubhouse conversations with guests such as beauty brand owner Supa Cent, Lush Yummies Pie CEO Jennifer Lyle, founder of Girl CEO Ronne Brown, and entrepreneur Premadonna.

“As a brand, we need to ensure our content and the important conversations taking place this month reach as many people as possible,” said Izzy Hussein, senior brand manager at Martell Cognac. By partnering with an influencer to connect with consumers on Clubhouse, we are able to leverage the built-in Clubhouse community and invite new users to participate authentically via our influencer partners’ reach.”

Behind the scenes, more marketers are looking to strike similar deals.

“I’ve never been an influencer before but there is a lot of attention on Clubhouse so far,” said Jin Yu, an angel investor who goes by the name WolfXLion on Clubhouse and has nearly 60,000 followers. 

He joined in November and since then has worked with companies in beauty, tech and fashion as well as Kimpton La Peer Hotel. “Because it’s so new and fresh, brands seemingly have no idea what to look for when it comes to Clubhouse, they just know it’s a significant avenue that they should capitalize on,” said Yu.

While partnering with influencers may seem like a good idea to marketers, users may be more hesitant to embrace hard selling on the platform.

“Clubhouse seems to be taking steps to discourage that,” said Sydney Busby, content strategy supervisor at Wunderman Thompson in Atlanta in an email. “Marketers may need to recognize that at this time Clubhouse isn’t the friendliest place to push a message on behalf of their brands.”

That’s not to say marketers should not be exploring the app. In fact, several brands are building a presence on the platform via their own profiles, including Milk Bar, Kool-Aid and news publishers like Politico.

Just before Valentine’s Day, Restaurant Brands International (RBI), which oversees Burger King, Popeyes and Tim Hortons, found its way onto the platform with an open forum room that gathered an audience to talk about the company’s post earnings call featuring those companies’ execs.

Duncan Fulton, RBI’s chief communications officer, doesn’t seem to be sold on the idea of paid influencers on Clubhouse just yet as it may take away from the transparency and authenticity the app’s users have embraced.

“The longer the brands can maintain that without gaming it, the longer the platform will be a powerful tool for conversations people care about,” Fulton said. 

As it stands, marketers have a long way to go before they’re comfortable on the app.

Without the boondoggles of curated content, profile pictures and filtered images, Clubhouse and its users value transparency, Busby said. According to Busby, users have been reporting others for promoting multi-level marketing businesses. Some have taken to Twitter to express similar complaints and outlets like The New York Times have cited users promoting multi-level marketing cloaked as financial advice among other issues. 

The social platform is constantly releasing updates empowering the community to self-police and is currently toying with the idea of adding a badge system for moderators, according to Busby.

Despite this initial use of influencers, Clubhouse is likely to remain brand-lite for a while yet. Like many new social platforms, ads and how marketers can leverage ads, come last.

“The watch time is so incredibly large — people are spending upwards of eight hours on the app,” said Yu, who has hosted rooms that have lasted as long as 50 hours. “Because it’s so new and fresh, brands seemingly have no idea what to look for when it comes to Clubhouse, they just know it’s a significant avenue that they should capitalize on.”

It was at that moment, said Johnson, cofounder and CEO of the lead generation firm Kennected, that he experienced clarity and made the decision to channel his energies into confronting those struggles, pushing harder and coming out even better on the other side of this crisis, for himself and his company.

“What was very important was that I and the c-suite of the company remained positive and focused,” said Johnson, whose clients include Walmart and Merrill Lynch. “That’s what being a leader is all about — you need to set the mood and clear the path for the rest to follow with confidence.”

Last year, c-suite executives dealt with some intense additional burdens: debating payroll reductions, layoffs, furloughs. CEOs were expected to have the answers on when offices would reopen, whether staff would need to be vaccinated before they return and have a ready answer on what would e different once they do.

“The answers to these questions are so uncertain for many leaders, it leaves them feeling unable to address their teams’ needs,” said Drew Train, cofounder and president, Oberland, New York creative agency whose clients include Uber and Blue Man Group.

And yet, management, in the eyes of employees, is somehow supposed to be inoculated against stress and mental health concerns. “Leaders have to make it seem like things are always great — they aren’t, and there is a stigma and a real cost to that kind of honesty in business. So keeping that bottled up inside can also have a negative impact,” added Train.

A recent survey of 12,000 people from 11 countries by Oracle and Workplace Intelligence found that c-suite executives have experienced mental health issues more than their employees. Management has also had the hardest time collaborating with teams virtually, managing increased stress and anxiety, and being removed from the workplace culture.

“Executives are perhaps even more susceptible to burnout culture than their employees,” said Dan Schwabel, managing partner of Workplace Intelligence. “The kind of drive and dedication that helped them get to the top in the first place is also part of what is driving them to work longer hours and neglect work-life balance.”

CEOs are meeting the challenge head-on, finding solutions and leading their teams not only through this global crisis but in spite of their own difficulties. The Oracle study found, for example, that management was most open to using AI for help with mental health, with 73% preferring to communicate with chatbots and digital assistants to get better versus 61% of employees. The c-suite was also more likely to see the benefits of AI, with 80% saying it had helped their mental health at work.

Mike Popowski, CEO of the Atlanta-based creative agency Dagger, whose clients include Coca-Cola and Delta Air Lines, said, “When you get down to brass tacks, a company can only be as healthy as the people in it.”

“As CEOs, we have had to think about everyone else without forgetting to also take care of ourselves,” said Cathy Butler, CEO of the San Francisco creative agency Organic, whose clients include National Instruments and American Family Insurance.

She said that in the beginning of the pandemic, her focus was on making sure everybody else in the organization was doing OK, reminding employees to take breaks and take advantage of the agency’s medical benefits. Those solutions proved beneficial not only to staffers but to management as well.

Kashif Naqshbandi, CMO of Tenth Revolution Group, a London-based global tech recruitment firm, said his company established a work tool it has dubbed Buddy Up With the Board, wherein employees can book video calls with members of the c-suite. No agenda, just an informal chat about whatever employees want, be it career advice or talking about their worries in this challenging time.

As with Organic’s outreach, the idea turned out to benefit executives every bit as much as employees. Naqshbandi explains, “We’re a big company. We don’t always get to know all our people as well as we’d like, and these one-on-one chats have brought a sense of closeness that many of us have been missing out on the last few months.”

Craig Zevin, COO of the Los Angeles-based healthcare tech company Uberdoc, said the biggest positive he has made during the pandemic has been leveraging WFH to reclaim time in his day. He has permanently scheduled two 15-minute breaks each workday. He also uses what would be his typical commuting hours for mental wellness, as well as physical health and personal development.

“Being vulnerable is important, but you have an obligation to present confidence and stability to your employees and investors,” he said. “You need to find ways outside of your company to connect and share your experiences if you want to stay healthy mentally.”

3 Questions with Creature CEO Dan Cullen-Shute

What prompted Creature to move to a 3:2 return-to-work model last September?
We were adamant that we couldn’t go back to how we worked before the pandemic. So we settled on a model where people are in the office on Wednesday and Thursday, then can work from wherever they want on the other three days. We think those two days are really important to building a coherent, cohesive culture that people want to be part of. Those will be the days where we’ll have breakout sessions and creative meetings to get the buzz from working with each other in one space. At the same time, we know that people either don’t like to, or can’t always, work from home so the office is open throughout the week. The flexibility is there.

What impact could the 3:2 model have on employees?
If you only have to come into the office twice a week then all of a sudden you don’t have to live in London, which is an expensive place to live and not getting any cheaper. We’ll potentially look at renting out blocks of rooms at a hotel near the agency so that people can stay in for a night.

What have you learned from going through this process?
The first was around internal organization. We spend a lot of time pretending to clients that we’re not powered by chaos but actually we are and I was worried about how we would be able to control that remotely. It turned out that it could be because we just focused on ensuring people knew what was expected of them and then let them get on with it. The other issue was around creative because there was a weird belief that if we’re not a small room presenting an idea to a client then it would all fall by the wayside. Sure, there’s a bit of that because selling anything is as much about having a good narrative as it is having a good thing at the heart of what you’re trying to sell. However, when we were forced into a situation where we had to adapt then it was great to see what could be done remotely. — Seb Joseph, senior news editor, Digiday.

Numbers don’t lie

•  71% of 500 c-suite executives interviewed say it will take until 2022 for the U.S. economy to return to its pre-pandemic state, while 90% are forecasting revenue and earnings increases over the next two years [Source of data: Forbes’ 2021 CxO Growth survey.]
• 56% of 2,004 U.S. women aged between 18 and 69 years old who have been working from home during the pandemic, said they enjoyed it and didn’t want to go back to the office, while 3% said they hated it and couldn’t wait to return [Source of data: New Meredith Corporation Study.]
• 55% of 1,500 marketers said they’re not willing to travel by air for business or personal reasons yet, while 70% said broad vaccination distribution would make them comfortable enough to travel [Source of data: Association of National Advertisers’ 2021 Travel Survey.]

What else we’ve covered

• Marketing executives are busy preparing for the new, hybrid world of in-person and remote collaboration post-pandemic. But the return of in-person business doesn’t mean the end of technology as a collaboration tool, especially as companies continue to expand their offerings in this space, such as Microsoft Hub Room and Cisco Collaboration Room.

• Despite the move to more remote working, brands and agencies are in danger of replacing the much-criticized physical form of presenteeism with a new online version. Remote presenteeism is being driven by job insecurity, poor management and a never-ending diary of virtual meetings. 
• With the notion that people can now work from anywhere becoming a more embedded reality, the battle for talent will only intensify. Some businesses are turning to artificial intelligence to help them identify the right talent and onboard them.

This newsletter briefing is edited by Jessica Davies, managing editor of Digiday’s Future of Work.