Month: April 2021

TikTok has risen rapidly from being a new platform for marketers to kick the tires on to becoming a staple in some advertisers’ social budgets.

“Curiosity, for sure, has exploded. We were a test partner, I would say, in 2020, and 2021 is the year that we want to be trusted,” said TikTok’s head of global agency & accounts Khartoon Weiss in the latest episode of the Digiday Podcast.

The latest sign of that trust is a three-year deal that TikTok has signed with IPG Mediabrands. The deal marks the second arrangement that the ByteDance-owned company has struck with a major agency holding company this year, following a deal with WPP announced in February.

The agency holding company deals signal that TikTok has reached a new crest in its relationships with advertisers and agencies — two groups that may still be figuring out how to use the platform — but are invested in that education.

Through IPG Mediabrands’ deal with TikTok, the agency group and platform will hold quarter-long “creator camps” for popular TikTok users to provide feedback on brands’ TikTok strategies and campaigns as a part of a broader program called “creator collective.”

“It’s a new initiative that connects brands with forward-thinking and diverse creators who will advise on strategies and best practices, which is what we honestly get asked about most,” Weiss said.

Here are a few highlights from the conversation, which have been lightly edited for length and clarity.

Creating for TikTok 101

We’re going to be going to market much more diligently around how do we create, as the marketing community that we are, for TikTok in a way that is relevant. So you’ll see a lot of that thinking and infrastructure from us this year and the rest of 2021.

‘Creative testing at scale’

We don’t want brands and agencies making one [TikTok video]. We don’t want them making two. We want them making thousands of TikToks because what happens then is the best content will win. This is almost programmatic creative testing at scale. Take it as programmatic creative testing at scale, let it run and see what catches.

A once-in-a-century pandemic has created a moment for a strategical reset among advertisers. And therein lies the opportunity. More than ever, an informed, independent viewpoint on global media investments is critical for advertisers. Why can’t then, goes the theory, Waters recalibrate an industry laggard like Ebiquity to offer this media management advice to marketers at a time when they need it most?

“My frustration is there’s a lot of good practice in and around how TV is traded that isn’t there online,” said a media director at a global advertiser, who started working with Ebiquity last year. “I need a media expert across both areas that can help me find ways to incentivize the likes of Google and Facebook to be as innovative in their commercial deals as they are on their platforms.”

It’s no surprise, then, that Waters has focused on reestablishing Ebiquity as a media specialist since he joined nearly a year ago.

“Ebiquity lost its way for four years trying to become a nebulous marketing consulting business covering areas it didn’t really have propositions in,” said marketing consultant Nick Manning, a former Ebiquity exec, who still has financial interests in the business.

This changed when Ebiquity acquired media management firm Digital Decisions last January. Doing so gave Waters, who joined not long after the deal in April, a monitoring and reporting service for online media that Ebiquity had struggled to build on its own — a way to measure online media performance that isn’t focused on cost.

The sheer amount of variables that are involved in any digital impression is so large, that a CPM benchmark by itself is not valid and gives a blurred impression of the media’s performance.

That’s not to say there isn’t a role for this type of pool benchmarking — it’s still a key way for advertisers to know how competitive their TV prices are. It does, however, need to be part of a more rounded approach to tracking media — not least because online media poses major risks to advertisers if left unchecked.

“It makes no sense for senior marketers to use pool-benchmarking data to push agencies into getting them cheaper media, especially given those savings tend to get hidden from them so they’re not actually making any cash savings,” said an exec who works for Ebiquity, but was not authorized to speak to Digiday. “The smart marketers will look to the programmatic supply chain to make savings.”

Other companies claim to do something similar — some even have a strong media tracking product. Most, however, don’t have Ebiquity’s scale. 

It has stacked its client roster with around 70 of the world’s largest advertisers. Another 30 or so would give the business stewardship of over $100 billion in ad spend — half of which 50% is spent online, said Waters. Those businesses waste anywhere between 15 and 30% online, which represents around $15 billion, according to Ebiquity’s analysis. Even if the company takes around 0.5% of this spending, which is noticeably smaller than the commissions and service fees advertisers pay ad tech vendors, it’s a market opportunity worth around $250 million.

“We had 10 clients on the Digital Decisions platform by the end of last year so we’re looking to build on that by productizing ore solutions,” said Waters.

But the problem — up until recently at least — has been Ebiquity’s reach often extended its grasp. Case in point the company’s positioning as the CMO’s consigliere two years ago. It tried to do this despite not being able to properly advise on the fastest-growing part of media plans: online media. 

“The bottom line is classic media pool-based auditing is pretty dead and has been replaced in the digital world by tracking technologies and data aggregation,” said Manning.

Organizational structure, product and clients are the areas that have born the brunt of the pivot so far. And the changes appear to be paying off: the organizational structure was flattened at the start of the year when Waters decided to run the business on a horizontal basis by country and region.

Now, it’s easier to go from selling point solutions to clients handled by different strands of the company that don’t quite sync up to selling them end-to-end solutions. The bigger picture: the flattened structure makes it easier for Ebiquity to foster longer commercial relationships with more senior marketers.

“We managed to grow revenue from seven clients last year despite the challenges of the wider market around us,” said Waters. There’s still work to be done when it comes to bringing all our expertise around the world together.”

As progressive as this all sounds, it also incites a sense of deja vu. Execs from Ebiquity have made similar claims in the past — albeit with less confidence. They pointed to the development of the analytics and tech advisory businesses over the last five years as proof the company was in lockstep with the shifting needs of marketers.

But those decisions seemed like they were done on the assumption that the core media part of the business was in structural decline. Put another way: it was as if the key parts of Ebiquity’s online media pitch were separate from the core media one. So no matter how progressive Ebiquity’s thinking was, it was never going to be enough to mitigate the slowdown on the main business. 

“The tech and analytics businesses were good but we were only ever going to get incremental growth out of them — perhaps 10% a year,” said Waters. “Growth at that rate wasn’t going to offset the decline in the core media business Ebiquity.”

Still, there’s a role for both analytics and tech in Ebiquity’s pared-back plan — it’s just part of a wider solution. Much of which will flow from the Digital Innovation Centre launched in February and will be overseen by group chief product officer Ruben Schreurs, who founded Digital Decisions. It’s Waters’ way of centralizing the expertise of the 30-person Digital Decisions so they’re developing products and services that can be used by the whole group.

While Waters wouldn’t detail the type of services being offered, he wants to develop one every six months for the next two years. More of these services, which are autonomous, improves Ebiquity’s profitability because they’re less reliant on being serviced by people once developed and clients use them consistently instead of as a one-off. 

“We’re neutral in the supply chain so we’ll work constructively with marketers to find the right approach to media management for them,” said Waters. “We’re not trying to help them set up traps to catch out agencies”

Because of its first-party data, and because of the high demand for user purchase data, it is poised to outshine its competitors in the ad world in the coming years. That will happen both on its marketplace — which is becoming flooded with advertisements — and its off-platform ads business, the latter of which is gaining buy-in from a larger share of sellers.

Amazon has already made significant gains in the ad market since the start of the pandemic. While it is still well behind Facebook and Google in its overall share of the ad industry, brands significantly shifted their ad budgets toward Amazon in 2020, according to a report from Feedvisor. Among brands, 28% of ad budgets went to Amazon last year, compared with 22% to Google and 23% to paid social. That’s a notable boost from 2019 when Amazon accounted for 25% of all brand ad budgets. At the same time, Amazon has also increasingly integrated advertising across its own products — most recently, by adding Twitch into the larger Amazon Advertising network.

For years, advertisers have considered Amazon to be a dark horse to upend the Google-Facebook duopoly. In 2020, it grew ad revenue by 52%, to $14.63 billion. While that pales in comparison to what Google ($67.21 billion) and Facebook ($35.22 billion) brought in last year, Amazon’s growth may be accelerated due to the privacy developments on the horizon.

How display advertising may change

The coming privacy changes are certain to hit smaller publishers that rely on third-party data the hardest. “Most display budgets will move from third-party DSP to big publishers,” said Melissa Burdick, president of Pacvue, a platform focused on e-commerce advertising. 

For Amazon, the opportunities are significant. Amazon’s ad business is sprawling, consisting of both ads on the actual Amazon marketplace (for instance, ads in search results or sponsored product displays on product detail pages) and off-Amazon ads (for instance, an Amazon product ad that might pop up on an external publisher’s website).

“I think that brands are going to prioritize their budgets to where consumers are shopping and it’s clearer than ever that that’s Amazon,” said Natalie Taylor, a content manager at Feedvisor who conducted the company’s advertising study. Taylor added that 62% of brands surveyed said that Amazon ads give the highest return on investment, compared to all other ad types they run. 44% of the brands, which ranged from Fortune 500 to enterprise-level retail brands, told Feedvisor they saw returns between 7x and 10x on Amazon ads.

Ads on Amazon have become so successful for brands — and so profitable for Amazon — that they are now omnipresent. Over the last few years, “Amazon has continually added new ad placements on the site,” said Joe Shelerud, CEO of Ad Advance, a company specializing in Amazon ads that works mainly with third-party sellers. Others agree: The website Marketplace Pulse recently declared, “Everything on Amazon is an Ad.” 

While Shelerud noted that his clients have seen return on ad spend on the Amazon platform remain at high levels, he said that ads on the marketplace are “running up to the saturation point.” And that saturation is driving another subset of Amazon Advertising, called Amazon DSP, which mostly displays ads on non-Amazon websites. 

“We’ve seen a huge demand for DSP and we’re getting a number of clients set up,” he said. He noted while he mostly works with third-party Amazon sellers, he said that DSP also seems to be gaining traction with big brands: “We have seen multiple people reaching out who are not your traditional Amazon sellers coming into the Amazon DSP space,” he said. According to Feedvisor, between 2019 and 2020, Amazon DSP saw the greatest increase of all ad types. The share of brands that said they rely on Amazon DSP jumped from 39% to 49%.

Although some marketers currently supplement Amazon’s first-party data with other third-party information when buying Amazon DSP ads, “in our experience the majority of all DSP targeting uses Amazon’s first-party data,” said Burdick. As cookies are phased out, and smaller websites struggle to gather data on their visitors, that might make Amazon DSP especially important for sellers.

The soon-to-be triopoly

For brands, Amazon’s advantage over Google and Facebook has been simple: as Burdick put it, “when you’re on Amazon, you’re in the shopping mindset.” A well-placed ad draws significantly better purchase conversion rates because it is so close to the bottom of the ad funnel. “If I send a click over to my website, I might see a 1% conversion rate, where if I send them to Amazon I might see a 10% conversion,” said Shelerud. That is also the logic behind other retail media business strategies, including Walmart, Kroger and Instacart.

Amazon has less prominence higher up in the funnel — when people are not yet ready to shop but may be open to considering new products. But the rise of DSP and off-Amazon ad placements that use Amazon data is starting to change that. 

Amazon’s data is increasingly helping to target those upper-funnel customers in a way that Google and Facebook cannot always match. Shelerud used the example of someone who bought car replacement parts on Amazon. “That may say I’m in the market for a new truck in the next year or two,” he said. And because customers don’t frequently go to Google and Facebook to buy car products, that type of data “is what Google or Facebook miss out on.” 

One sign of Amazon’s rise is that Google and Facebook are investing in marketplaces, in part to capture sales data. Google recently added a checkout feature to Google Shopping, called Buy On Google, and Facebook has added shopping capabilities across its entire suite of apps. Even Twitter is testing a shop button. Customer purchase data is increasingly valuable, and while Shelerud noted that Google’s and Facebook’s push into commerce has multiple motives, he said “I think it’s part of the competition” with Amazon.

At the top of the food chain are CMOs, the execs holding the purse strings of advertising and in the seat of power. But they’re also under greater pressure than ever before from their CEOs and CFOs to deliver results for the tens or hundreds of millions of dollars they spend marketing their products and services.

How are CMOs dealing with the raft of privacy regulations, as well as Apple and Google’s recent moves to inhibit behavioral tracking? How big a priority are these issues to them?

It’s telling that the CMOs contacted for this story either declined to comment on the record, or didn’t return calls requesting interviews.

Speaking with other marketing experts though, one gets the sense CMOs know the identity issue has huge implications for the future health of their companies, but haven’t come close to solving it. For starters they’ve learned they need to stay flexible to adapt to changing circumstances. “Clients aren’t unsettled,” said Eileen Kiernan, global CEO of IPG agency UM. “At the end of the day, modern marketing is about being fluid and agile — whether it’s in response to changes in market, consumer or competitor activity or changes in regulations and technology.”

Greg Stuart, CEO of MMA Global, an industry non-profit that tackles major issues on behalf of its marketing leader and solutions company clients, has been mapping the consumer privacy landscape closely. Stuart recently polled his global board of directors, which is made up of two-thirds top-level marketers, and the topic of identifiers ranked as their No. 2 priority, just behind marketing effectiveness (identifiers play a key role in measuring marketing effectiveness) but ahead of issues like data and marketing organization

“Based on conversations with my board, I think marketers’ biggest concern around privacy issues is around risk management and assessment, and avoiding liability issues,” said Stuart, himself a CMO in a previous career stop at Cars.com. Given their desire to avoid paying possibly significant penalties that might incur the wrath of the CFO, Stuart said, CMOs are paying particular attention to ensuring they are in compliance with current laws.

To what degree are agencies involved in helping their clients figure out solutions? “Intimately involved — but I would say we’re looking for solutions, not workarounds. We’re working with our clients and CMOs to ensure that they’re well informed about what the changes mean in real terms,” said Kiernan. “For some clients, it’s about strengthening their first-party data capabilities, for others it’s about helping them scenario-plan media and data partnerships, alternative solutions in the market, and how to manage for the lack of certainty.”

Kiernan agrees that the issue goes beyond marketing: “CMOs are drawing on the cross-functional expertise in their teams, whether it’s their data scientists working in partnership with us, but also increasingly having their corporate legal and privacy teams as part of the conversation.”

In recent months, major brands have made clear their desire to secure more first-party data directly from consumers, as a way of getting around these identity obstacles put in their path. But there’s also talk among agencies and brands that the narrowing of privacy limitations offers a wakeup call of sorts to inch away from lower-funnel tactics that relied on the very information that’s now being blocked.

“Maybe it’s about going back to this idea of context,” said one marketing executive speaking off the record during Digiday’s Media Buying Summit in March. “Years ago, contextual buying was the way you [bought media], then we morphed to this purchase-based targeting where we used third party, purchase-based targeting vendors that was very cookie-based. Now it’s going back to contextual again for more equity-based advertising.”

“There’s no question that all these changes will drive a change and evolution in marketing,” said Kiernan. “It’s about being pragmatic, commercial and identifying solutions that respect the law and individual rights while ensuring that marketing can both drive and be accountable for business results.”

For his part, MMA’s Stuart doesn’t believe there will be a huge return to contextual advertising as a way of sidestepping privacy limitations, but he adds that today’s tools enable a much more robust way to execute it. He argues that it boils down to whether marketers are pursuing attribution goals versus orchestration goals — the latter being the ability to serve up an ad in a targeted way, which is exactly what’s being inhibited by Apple’s and Google’s moves.

“There’s a real understanding that this is not just about media investment, addressable media and attribution, and that it’s also about a shift in public sentiment on data and privacy,” added Kiernan. “It’s my role as a CEO — and our role as an agency committed to helping futureproof our clients’ businesses — to balance both the art and science of data-driven marketing — in a continually evolving landscape.”