Month: May 2021

And on the consumer side, its acquisitions of Revue and Scroll, as well as its launches of Super Follows, Tip Jar and Spaces, have publishers and creators looking at Twitter with fresh eyes, not just as new opportunities to engage users but to potentially nurture and build new relationships with subscribers. It also has analysts wondering about the potential upside of a subscription-focused product.

All of those changes put Twitter one step closer to realizing a potential that has always been distinct from Facebook. But the company also needs that flurry of changes not to affect daily user growth, a stat that still serves as a bellwether for most platforms: Despite beating revenue estimates for the first quarter of 2021, Twitter’s stock price slid 8.5% in April after revealing that it missed its target for growth in monetizable daily active users.

Twitter’s head of consumer product, Kayvon Beykpour, revealed at Twitter’s 2021 Analyst Day that it intends to grow its monetizable daily active user base to 315 million by the end of 2023, up from 199 million today. 

Twitter declined to make an executive available for this article. 

“In the past two years or so they’ve been playing catch-up,” said Rohit Kulkarni, managing director at the investment firm MKM Partners. “Now they are acting and talking like their peers.” 

For years, Twitter took its lumps — including plenty on Twitter, natch — for being more hesitant, more cautious and more limited than other platforms, particularly in comparison to Facebook. While Twitter piqued lots of interest with Vine and Periscope, observers and employees alike felt like things moved slowly.

“It’s always had a much slower cadence than its peers,” one former employee said. “It has not really evolved the way it should.” 

Recently, that has begun to turn around. In the summer of 2020, about a year and a half after Twitter committed to overhauling its infrastructure to allow more rapid development, it completed that work. That change helped Twitter significantly increase its development capacity and the company entered 2021 hoping to push those capabilities much further. Twitter wants to double its development velocity this year, CFO Ned Segal said in March. In its full-year earnings presentation, Twitter revealed it planned to grow the company’s headcount by 20% in 2021, with most of the hires concentrated in engineering, product and research.

Those additions have come with costs — last year, Twitter’s research and development expenses rose 28%, to $873 million; its general and administrative expenses, which typically includes headcount, rose 56%, to $562 million — but the investments have shown signs of paying off. Its first-quarter revenues exceeded $1 billion, up 29% year over year.

Clean up and catch up

A lot of the moves Twitter has made recently have been about bringing it closer to parity with other major platforms. Last November’s launch of fleets and carousel ads, for example, basically caught Twitter up to products that Facebook, Pinterest, Snapchat and LinkedIn offered users and advertisers already, in some cases for years. 

“Some of it is what I’d call catching up,” said Amanda Grant, global head of social at the media agency GroupM. 

Getting to the same place as its competitors will give Twitter a chance to begin resetting the reputation it has acquired over the years. 

“I think they have that burden to gain the confidence of the advertiser segment [that lost faith in what they offer],” Grant added. “Because there’s over a decade worth of user familiarity with the platforms, you have what advertisers believe is the truth about the platform.”

Fresh looks

The changes Twitter has made on its consumer side have shaken up its relationship with publishers too. Though Twitter is at or near the top of many reporters’ and editors’ minds, it accounts for a single-digit percentage of referral traffic to publishers, according to Parse.ly data, and so tending to it became one of several things an audience development person might do with their workday.

“For a while, we fell back on our scheduling tool, to check the box,” said Alexandra Ptachick, the director of audience development for USA Today. 

But Ptachick said Twitter’s recent announcements have drawn significant interest from many different parts of USA Today. The publisher, a beta tester of Spaces, is using them to experiment with new ways to put its reporters in front of users — last week, it hosted a Spaces event with the reporters who covered the Derek Chauvin trial in Minneapolis, Minn.

Ptachick and her colleagues are also intensely interested in figuring out how these newer products fit into USA Today’s ambitious digital subscriber targets.

“We look forward to understanding what Tip Jar might offer a publisher,” Ptachick said. “Any time you say there’s audience and there’s potential for growth and experimentation, and we can make money, [I’m interested].”

Subscribers’ dilemma

Perhaps the most compelling question surrounding Twitter’s product announcements, however, concerns subscriber revenue. Most platforms right now are racing — and spending — to show that they can deliver a hospitable environment for creators, and Twitter has gone no different, giving users the chance to sell exclusive access to content (via Super Follows), accept direct donations (via Tip Jar) and competitively build complementary businesses with their audiences (via Revue).

“They’re playing to their strengths,” said Matt Navarra, a consultant who specializes in social platforms and strategy. “They’re building products and features around the typical usage patterns they see on their platform, finding those tools to help [creators] make a living without having to rely [on] multiple services; you don’t need to have a Twitter account and a Patreon account now.”

But Twitter has gone one step further, hinting at plans to offer a premium version of its own product, which might feature everything from the ability to edit tweets to, via Scroll, read articles without ads.

How big the market for such a service might be is unclear. But they have a good test bed to experiment in the media, tech and finance universes that are already addicted to Twitter.

“The financial and media community derives highly asymmetric value from Twitter,” MKM Partners’ Kulkarni said. “The smart thing is to complement usage and monetization in a way that there’s a balance.”

“I don’t think that value will account for a majority of revenue,” Kulkarni added, “but it should get to 10% in the next couple of years.”

The 4A’s runs the Multicultural Advertising Intern Program (MAIP). Has interest from the industry in the program grown over the last year?

MAIP, which has been running for 48 years, has been consistently increasing year-over-year. This year, we saw double digit growth in the number of fellows with 435 paid internships. They are all virtual — agencies have stepped up to figure out how they can manage interns virtually. We have 209 agencies and partners participating in MAIP. The previous [high] was 120 [participating agencies and partners] two years ago. So we’ve really seen an increase in the number of interns by the holding companies as well as many independent agencies for the first time. 

Can you give us an update on the Vanguard program?

We also launched our Vanguard program last year, which is aimed at mid- to senior Black talent in the industry, with 52 fellows across 32 agencies and partners. The aim of that program was to amplify their voices within their agencies, to provide sponsorship through executive leaders, to provide them with a mentor as another manager. The biggest driver of success was if we would start to see those fellows promoted during the program or after the program. So far, we’ve had seven fellows promoted and we’re halfway through the program. 

How are you working to improve diversity, equity and inclusion within the 4A’s?

The biggest move we made at the 4A’s was that we really focused on the diversity of the executive leadership team. In the last three months, we’ve added two people of color to our executive leadership team. We’ve also hired six new people — we’ve doubled the foundation team because of demand for the work we’re getting from agencies — and that entire team is diverse. The 4A’s has three open roles and we’re making an effort to make sure we have a diverse range of candidates so we’re not interviewing unless we have 50% people of color on our slate. We made that decision because we want to make sure we’re [practicing] what we’re telling agencies to do. 

One of the issues we heard about last year was that often DE&I execs would report into HR rather than the C-Suite which left them without much power to enact real change. More of those positions have been added at agencies in the last year. Has there been a change in who that role reports into?

Yes. I would comfortably put my hand on my heart and say 90% of those roles, either existing or new, are now reporting to the CEO. DE&I is ranking in the top two priorities for CEOs in our industry right now and they’ve really mandated that those roles should report into them to get direct line access to them. It elevated the role in the space — real change has to be driven by leadership and CEOs [realize] they need a partner to help them change and drive change through the organization. 

What are some other ways you’re seeing agencies try to make sure the industry continues to move forward when it comes to DE&I? 

One area is pre-college education. A lot of agencies are now stepping out and saying how do we educate high school seniors, how do we reimagine and reinvent what media and marketing is for that population because if we’re really going to change the game we have to start educating underrepresented groups to get them to study marketing. There’s also been an effort to work with colleges, particularly HBCUs, about the opportunities within agencies and the career paths within agencies. There’s a real focus in agencies that it’s not just about the next hire; it’s about fundamentally changing the opportunities for underrepresented talent and making the industry more exciting for them. Some agencies are also removing the education requirements on job descriptions and they’re seeing a much larger influx of diverse candidates.

There’s also a big focus within media agencies right now to partner with underrepresented or minority-owned businesses. At the 4A’s we’ve created a list of minority-owned businesses,  particularly Black-owned, that media agencies and brands can start to engage with to make sure the work, media buy and plans are more diverse. 

The third thing I believe will drive real change is the leadership development process. Agencies are really focusing on retaining talent. We can bring people into the agency but if we’re not retaining those people [that’s a problem] so there’s a lot of work around retention and leadership development of mid-level diverse talent.

Digiday surveyed 329 professionals across media and marketing in April, including publishers, agencies, brands, and platforms. Publishers and agencies made up the largest groups. Among those polled, 28% said they hadn’t heard anything from their employers about a return to the office. Fewer than half of respondents overall said they would be willing to return to the office full-time over the next six months.

The report also highlighted people badly misjudged how quickly things would return to normal. For a previous poll in January, 38% of the same number of respondents said they expected to do in-person meetings within three months. But when surveyed in April, fewer than 20% had actually done so. Meanwhile, 20% of respondents said in January that they expected to attend in-person conferences in three months’ time, whereas in reality only 4% ended up doing so.

Mirroring the survey’s findings, a check-in with agencies across the U.S. found a diversity of plans, would-be plans – or in some cases, the lack of any plan for a return. The disparity has to do with variables like local guidelines, vaccination rates — and in all cases, the points of view of employees.

M&C Saatchi Worldwide’s New York-based MCD Partners, whose clients include Nestlé and AT&T, has regularly surveyed its teams to gauge their feelings about the return — and in doing so, found that the needle tends to move. Whenever COVID-19 cases spiked, for instance, respondents were less willing to commit to doing business in person, according to Wasim Choudhury, partner, COO and CFO of the agency. MCD Partners does not yet have a firm plan for reopening.

Another marketing firm without a set return plan is San Francisco-based Pereira O’Dell. “We aren’t mandating people come back,” said Rob Lambrechts, chief creative officer of the agency, whose clients include Corona and Intel. Rather, the company’s focus is on creating the workspace of the future for after employees do come back, he stressed. “We have the once-in-a-generation opportunity to reimagine how we work,” he said. “We need to take advantage of it.” 

Drew Kraemer, CEO of digital marketing agency Code3, which returns in June under a phased approach, found that employees’ attitudes vary by geography — with employees in hard hit places like New York understandably more concerned about returning. The agency, which works with marketers like Chipotle and the Miami Heat, surveyed all staff and found that while they’re excited about going back, they also appreciate — and will continue to value — remote working. The agency will require that employees sign up to resume in-person business. “Safety is our priority,” said Kraemer. 

At global creative shop Wongdoody, which is part of Infosys and has done work for companies like Amazon and Honda, there hasn’t been the assumption of a quick return, according to Brandy Flaherty, head of HR and talent, as less than half of the workforce is interested in a blanket, full-time return. That said, more than half have indicated they would return if in-office time were to be less than 50% and dictated by the employee. “There are some that are eager, some that are resistant, but the majority fall somewhere in the middle,” she said.

At Brooklyn agency Madwell, which has done work for brands like Absolut and Vita Coco, 67% of employees expressed a strong desire to return to the office, almost all with two caveats: that all team members are vaccinated and the hope they could work remotely at least one day per week.

“From the very beginning, we told our people that we didn’t feel the need to be one of the first companies returning to the office, and we’d build a plan that could flex as the environment around us continued to evolve,” said Mark Battista, managing director of Boston agency GYK Antler, which has created campaigns for Red Bull and Bose. The foundation of reopening plans at GYK Antler is its so-called “3-2-1 Hybrid Work Approach — three days in the office, two days remote, one creative culture.”

Some marketing firms have already flung open their doors. 

Cheil Worldwide’s McKinney, whose clients include Crocs and Sonoco, reopened its offices in Los Angeles and Durham, North Carolina, on May 3, with its New York outpost set to resume operations soon, according to CEO Joe Maglio. The agency will require that all employees who return are vaccinated, and after an optional period in the summer, expects everyone to be, as the CEO put it, “within a reasonable, daily commute of one of our offices” by September 20. It won’t expect people to be back in the office five days a week, however. 

“While we’re going to do our best to take the perspective of our teams into account, the reality is that nobody knows the right answer” about resuming face-to-face, Maglio said. “While there’s no way to make a decision that will have everyone cheering, we’re going to respect what’s been working and be honest about what hasn’t worked as well over the last year and ultimately find the right balance.” 

3 Questions with Nabil Sabet, group director, design and architecture firm Moser Associates

How can you build a successful culture with a blended, hybrid workforce?
The office has shifted from a place where employees perform individual and task-oriented work for over eight hours each day to a resilient and adaptable space where people come to interact, collaborate and ideate before transitioning back to remote work and individual tasks. The new blended workforce requires a blended workplace. The blended workplace integrates the physical, social and digital elements of the work environment to support the team’s distributed work style.

Can you give specific examples of what that looks like?
A digital work environment that integrates team culture and creates an equitable experience both inside and outside the physical workspace is critical in blended workplace. In contrast to one centralized location, a blended workplace operates as an ecosystem of remote and communal settings, all connected digitally. Employee experience and wellbeing impacts company culture which is why it is essential to put mental health, security, purpose and a sense of belonging at the top of the business agenda. Moveable walls and furniture can give employees the power to reconfigure and access the type of space needed to complete a certain type of work. Accomplishment can be difficult to assess without being in a group and working together to push the needle. A successful distributed workforce requires frequent temperature checks to see how things have progressed, understand achievement and motivate to move forward. Clear and frequent communication is also critical.

What are the biggest opportunities that can come from this trend?
Performance measures must now shift to focus more on outputs rather than traditional inputs such as attendance, hours spent working, presence in meetings. This readjustment places the value on what we achieve more than the process of getting there. Working independently and autonomously will also become the norm as leaders empower their teams to make decisions and perform tasks with less direct oversight. Adaptive and collaborative work requires the right environments matched with the right workflows and technologies. We must break old norms and push through to new ecosystems that build resilience, foster human connections and nurture culture, purpose, and innovation. With coming to the office now a conscious choice instead of a default mode, we don’t come together just because we have to, we come together intentionally and for a purpose. We might even be more focused and productive when we do.

By the numbers

• 86% of 2,000 U.S. respondents said they felt their personality change as a result of the pandemic in one or more of the following areas: extraversion, agreeableness, openness to experience, conscientiousness and neuroticism.
  [Source of data: Oracle CX’s Human Habits survey.]
• 70% of 350 CEOs, COOs and HR and finance leaders surveyed across the U.S. plan to have staff back in the office by this fall.
  [Source of data: LaSalle Network’s Office Re-Entry Index.]
• Surveys of 37,271 U.S. adults in May showed younger age groups with low incomes are among the least likely to be willing to get vaccinated. Less than half of 18 to 34-year-olds who earn less than $50,000 a year either have been vaccinated or plan to be.
  [Source of data: Morning Consult’s Vaccine Dashboard.]

What else we’ve covered

• A growing number of companies are implementing plant-based initiatives as veganism continues to grow amid grave environmental concerns.
• In a home-working world, employees, devices and the cybersecurity team are dangerously separated — and this has increased the threat from cyber criminals. We spoke to a range of security experts to find out how employers can guard against cyber attacks in a long-term hybrid and remote-working set up.
• As vaccination numbers in the U.S continue to rise, some businesses have begun to offer customers gifts if they’ve been vaccinated, as a way to increase first-party data sets.

This newsletter is edited by Jessica Davies, managing editor, Future of Work, Digiday. For any FOW-related news, drop me a line at jess@digiday.com.

One sell-side executive described programmatic’s effect on DOOH buying as “creating muscle memory” in that it’s more measurable and targetable alongside other media than it has ever been before

Programmatic currently accounts for only about 10 percent of all DOOH inventory, but media buyers and sellers agree that number will surge as media agencies strike alliances with programmatic providers and DSPs.

“Programmatic will become much more important within digital out of home,” said Ameet Shah, partner and vp of publisher operations and technology strategy at Prohaska Consulting. “Audience [as a means of assessing OOH] has always been there, but never was the focus because it was hard to transact and put in place.”

One agency holding company is putting those assets into partnership for mutual benefit. Digiday has learned that GroupM has quietly cranked up its Sightline partnership, which pairs the programmatic abilities of its Xaxis unit with its OOH media agency Kinetic Worldwide. The partnership was formed a year ago, just before the COVID pandemic forced large-scale lockdowns across the globe, so it never quite got off the ground until recently.

But Michael Lieberman, Kinetic’s U.S. CEO, said Sightline has run efforts for 22 clients this year (he declined to name any specific clients), attracting new business from CPG, retail, finance and national auto advertisers. “National advertisers, who may have looked at us for a heavy-up in one or two markets, are now thinking of us as an audience platform that can sit alongside their video, their display, their connected TV, or audio [buys],” he said.

“We’re able to attack budgets from both sides,” added Gila Wilensky, U.S. president at Xaxis. “This lets Xaxis unlock more out-of-home dollars and for Kinetic to finally offer programmatic — previously neither of us had access to this.”

Programmatic’s adoption among OOH media agencies will continue apace. “We typically use managed service, partnering up with DSPs,” said Chris Olsen, U.S. president of IPG’s OOH media agency Rapport, who noted the agency has bought more inventory programmatically to date this year than any prior full year. “In the second half of 2021, we’re looking to have our own programmatic division within Rapport,” he said.

As more digital OOH media firms build out the reach and sophistication of their technology, they see significant opportunity to work OOH into consideration sets alongside other media from the buy side — especially when programmatic becomes the tool used on both ends.

“It’s helping reverse-engineer audience thinking and audience transacting,” said Sean McCaffrey, CEO of GSTV, which runs a network of video screens at gas station pumps. “That’s one of the key drivers of its growth and acceptance. I can think about audience in out of home not just as LaGuardia airport or the 405 freeway, but as Chevy drivers, kids in the household, golfers — the same way I’d think about audience in other digital media.”

Still, obstacles remain in place — not least of which is that the majority of OOH inventory (more than 60 percent, one source estimated) remains non-digital. There’s also the issue of third-party data deprecation and mobile providers’ limits on tracking users. Just as the DOOH embraces programmatic, some sources of data could end up limited.

But even here, industry executives are split on how significant an impact data deprecation will have.

One one side, both Kinetic’s Lieberman and Rapport’s Olsen acknowledged that a dropoff in third-party data, particularly location-based data, could throw a curveball at the insights needed to power effective use of programmatic.

But Prohaska’s Shah said he sees upside relative to other digital media. “Look at what’s important — context, value, audiences. Digital out of home remains fundamentally unchanged in the level of data [it needs] … So by default the value of this inventory goes up.”

Color by numbers

It’s seemingly impossible to have a conversation in media or marketing without bringing up third-party cookie deprecation. So it is with marketers and agencies, who named it their top challenge for 2021 in Adswerve’s most recent survey of 284 executives. Here’s how they responded and where other concerns fell in priority:

• Decline of cookies/changes in availability of 3^rd party data: 66 percent
• Difficulty in providing ROI of data-driven programs: 35 percent
• Business recovery from COVID-19: 29 percent
• Siloed organizational structure/poor data-sharing protocols: 29 percent
• Lack of internal experience/talent: 24 percent
• Limited budget/lack of funding: 24 percent
• Government/data privacy regulation: 15 percent

Takeoff & landing

• Mike Bregman was named chief data officer for Havas Media Group North America, and will join the media agency’s leadership team. Bregman comes from Accenture’s Applied Intelligence unit, where he was global managing director overseeing customer, marketing and sales analytics.
• Omnicom’s PHD USA hired Sarah Clayton as its first head of commerce, joining from drugmaker Bayer, where she was U.S. marketing director.
• Playbook Media, a full service independent agency, partnered with measurement service TVDataNow to offer clients media buying and management, as well as measurement and performance optimization to clients looking to spend in the CTV/OTT space.

Direct quote

 “We’re not just marketers … we’re storytellers. Has anyone mentioned that today? We’re storytellers. In fact, we’re telling you a story right now. Not a true story … the story we’re telling, you know, is completely made up. But what do you expect us to do? Tell the truth?” 

— Late-night host Jimmy Kimmel, during Disney’s upfront presentation to media buyers last week.

Speed reading

• Missed last week’s upfronts presentations? Then you’ll want to read Digiday senior media editor Tim Peterson’s Future of TV Briefing, which analyzes the impact on streaming of the surprise WarnerMedia/Discovery Communications merger, and offers a cheat sheet on all the major presentations.
• Digiday’s platforms, data and privacy reporter Kate Kaye details Publicis Media’s efforts to more effectively evaluate data and tech partners, as a means to rooting out negative cultural or racial stereotypes.
• Venturebeat looks into the gains Google’s Android ad sales platform is enjoying in the early days after Apple’s IDFA implementation.

GARM aims to change that.

The next step is getting the platforms on board to allow an independent auditing firm to sign off on the transparency reporting data supplied to GARM by the platforms. Thus far, only one — Facebook — has committed. But, the rest remain holdouts. There is no indication yet that the other platforms participating in GARM will agree to allowing third-party auditing of the information they provide to the brand safety transparency group.

“These are ongoing conversations that the GARM Steer Team is having with each of the platforms to make sure that they follow through with their MRC accreditation in a way that is sustainable and appropriate,” said Rob Rakowitz, initiative lead at GARM.

He said that some platforms have fewer resources such as people or budget to fulfill audit requirements, for example. “It would be in everybody’s best interest that there is third-party verification on these numbers,” he said, adding that GARM members expect independent audits eventually to be an integral part of the reporting process.

“They will not be dodged,” said Rakowitz of the potential audits.

The state of platforms playing ball

Facebook publicly stated in July 2020 it would allow for the industry’s go-to measurement verification body, Media Rating Council, to evaluate its compliance with GARM’s brand suitability framework, in the hopes of garnering accreditation for the MRC brand safety guidelines for monetized content. However, those words have not yet resulted in tangible results. Although the company is the only one of the platforms that has publicly agreed to MRC conducting an audit of its brand safety transparency reporting for GARM, and plans an independent audit of its self-published content enforcement and standards reports, no MRC brand safety auditing specifically related to GARM reporting has been done at Facebook as of this article’s publication.

Separately, but on related trajectories, both Facebook and YouTube are working with MRC on brand safety-related audits that are not GARM-specific. Facebook is set to commence an MRC audit related to brand safety metrics in June. And Google-owned YouTube has received accreditation from MRC for its brand safety processes that evaluate content on the platform at the individual video level for ads bought through YouTube’s reservation program or through Google’s ad tech. But it has yet to commit to an audit of the brand safety transparency reporting it supplies for GARM. Last year the video platform did begin working on updating its brand safety processes to align with GARM’s standards.

“YouTube remains committed to partnering with GARM to support its mission to develop an industry-wide approach towards building a more sustainable and healthy digital ecosystem for everyone. We are in discussions with the MRC to explore our next accreditations, but have not committed to an independent audit of our metrics at this time,” a YouTube spokesperson told Digiday.

There’s a bit of bureaucracy adding complexity and slowing the process. MRC cannot conduct an audit to verify data supplied by platforms for the GARM report until GARM’s reporting requirements are finalized and then incorporated into MRC’s brand safety standards and audits. That has yet to happen, according to the MRC.

By contrast, while GARM participant TikTok believes in the accountability and transparency mission, the company isn’t ready to commit to a third-party audit. “We don’t really have a stance on it now,” said Dave Byrne, global head of brand safety and industry relations at TikTok, regarding third-party audits of the brand safety data it provides to GARM. But he added that GARM gives platforms a forum “to be transparent in a way that advertisers can hold them accountable, but it never feels like a conflict; it feels like a collaborative working environment.” 

Convincing platform partners to agree to outside audits is “of course, a tender process,” said Luis Di Como, evp global media at Unilever, which is a founding member of GARM. While he said GARM advertiser members demand independent oversight of platforms’ first-party brand safety reporting, Di Como acknowledged, “This cannot be done overnight.”

A sign of progress

Overall, the GARM process aims to reconcile the platforms’ disparate efforts to moderate content and provide brand safety-related measurements. For instance, GARM’s aggregated measurement report translates content violation categories the platforms use internally or in their own branded transparency reporting into standard categories. What Facebook deems “Hate Speech” and “Bullying and Harassment” and Twitter calls “Hateful conduct” are all labeled by GARM as “Hate speech & acts of aggression.”

At this stage, Rakowitz and Di Como both stressed the value of the newly agreed-upon metrics included in the group’s inaugural report. The new Violative View Rate measures the percentage of views that contain content considered to be in violation, while another new standard used by YouTube for the report, the Advertising Safety Error Rate, gauges the percentage of total impressions on content that is in violation of content monetization policies aligning with GARM standards.

GARM’s report presents a macro-level view of aggregated data showing what’s happening according to brand safety measures across a platform. But the existence of the new metrics already appears to be influencing how the platforms and others report at the campaign level. The existence of those newly-created standardized metrics — which GARM hopes MRC will eventually verify for all platforms — “is definitely having a knock-on effect on post-campaign reporting,” said Rakowitz. “We are hearing from not only the content verification companies, but platforms themselves that some of these metrics will be introduced into campaign reporting,” he continued.

The knock-on effects may extend further and go beyond advertising. Ultimately, as regulators and legislators lump together big tech platforms and their alleged harmful societal impacts and demand transparent reporting about hate speech and disinformation, GARM standards could help the platforms align on how they report that information to governments, too, suggested Rakowitz.

“Advertisers, CMOs and media leads are not the only stakeholders,” he said.

The plan for now is to use those profits to bolster the national titles that remain in Meredith’s portfolio and focus on organically growing into more of a multi-platform publisher, according to Catherine Levene, president of the National Media Group, which houses more than 40 magazines and digital brands including Better Homes & Gardens and People.

The deal was not done in an effort to drop an under-performing business. In fact, despite the economic downturn during the pandemic, the Local Media Group did not struggle in 2020. According to Meredith’s 2021 second quarter earnings report, which rounded out the 2020 calendar year between Oct. 1 and Dec. 31, the LMG had a 53% increase in total revenues for that division year over year to $328.4 million, with political advertising increasing by over 100% year over year.

The third-quarter earnings report, which covers the calendar year’s first quarter of Jan. 1 to March 31, showed that the LMG was up 3% in total revenue, earning just over $200 million. Political advertising was down 59% year over year, given the Presidential election took place the previous quarter, but non-political advertising was up 5% year over year. 

“The stars aligned” in 2020 for this division to earn a valuation as high as $2.7 billion, according to one media consultant who spoke on the condition of anonymity. That’s because the Presidential election led to a once-in-four-years boom in political advertising revenue and increased local viewership during the coronavirus pandemic led to a boost in non-political ad revenue as well. They added that an offer this high likely would not have come around again for another four years, if at all.

Meredith is “a magazine company at heart,” said the media consultant. “I don’t think I could have imagined [the reverse of] them selling the National Media Group and keeping the Local Media Group.”

Levene said that the LMG had been courted for years with offers but this was a competitive offer that came at the right time.

The consultant added that the money from the sale will most likely be used to pay down debt and hopefully increase its stock price as a result. As of March 31, Meredith still held $2.6 billion in debt, according to the company’s third quarter earnings report, most of which was accrued from buying Time Inc. in 2017 for $2.8 billion.

“It provides a great return for our shareholders,” said Levene. “But it also allows us to strengthen our balance sheet and make us more flexible for growth investments.” That initial growth, she said, will primarily be focused on Meredith’s existing portfolio of brands by expanding to new mediums and platforms.

While mergers and acquisitions have been a trend in the media industry as of late, M&A is not top of mind for Meredith, according to Levene.

The company’s video and television programs have not been curtailed as a result of selling off the LMG, said Levene, who added that shows associated with its national brands, like Southern Living and People, will still be syndicated on traditional TV as well as distributed digitally. Additionally, she said that the teams will be looking for new avenues to expand video entertainment content, including partnerships with streaming services and social media platforms.

Southern Living has been a blue print for this multi-platform expansion, Levene said, with its recipe tester and developer Ivy Odom turning into a video host on several channels, including hosting “Hey Y’all” on linear TV on the channels that were a part of Meredith’s LMG, a personality for the version of “Hey Y’all” on Snapchat Discover, and most recently, the face of Southern Living on TikTok.

Allrecipes is also joining Snapchat as the exclusive food partner for the platform’s new scan feature that allows users to “scan” an ingredient. And Allrecipes will serve up recipes to match the ingredients and dishes that the Snapchat camera can recognize.

Beyond platform deals, another priority is growing consumer revenue through increased licensing deals — Meredith is the second highest global licensor in the world behind Disney — and through digital subscription revenue. This means, Meredith will be experimenting more with paywalls and paid products like memberships. Levene would not disclose which brands are planning to have a paid model.

As for advertising revenue, and its considerable first-party data trove, Levene said that Meredith’s more than 12,000-term taxonomy database, which enables contextual targeting in ad campaigns, was collected almost entirely from its NMG and will not be impacted as a result of the sale.

Not included in the sale was Meredith’s MNI Targeted Media, which works with local and regional advertising clients, including placing ads against Meredith video programming that plays in doctors’ offices across the U.S. Though formally a part of the Local Media Group, Meredith will retain this business, which last year generated approximately $100 million in revenue, with $15 million coming from political ads, said Harty. 

Additionally, certain magazine brands print regional versions each month, which allow advertisers to reach demos geographically, he said.

Looking forward, Levene is adamant that Meredith is really a multi-platform media company. “It is no longer a publishing company in a traditional sense,” she said.

To deal with the inherent difficulty of their role (and adapt to the accelerating importance of data management and digital media) many CMOs are turning to the marketing industry’s largest players for assistance: Google, Facebook, Salesforce, Oracle and Adobe. They are moving more and more budget toward the largest players in accordance with a risk-reduction mindset — that these 800-pound gorillas are the safest bets. 

But CMOs who place too much faith in the industry’s largest players are at risk of getting comfortable. Whereas discomfort often fuels motivation and innovation, comfort can fuel complacency and mediocrity. And when CMOs take the comfortable approach, covering themselves by partnering with the marketing industry’s biggest players, they miss out on next-generation, best-in-breed solutions — the kind that can propel brands to the next level. 

Of course, it would not be wise for CMOs to abandon the 800-pound gorillas outright. However, CMOs can’t get into a place of over-reliance. They need to diversify their partnerships if they want to maintain their competitive edge, keeping five rules in mind.

1. Maintain diligence in measurement

Media waste and inefficiency remain significant issues in marketing, so the rigorous measurement of all media must be a CMO’s north star. Any solution deployed by a CMO must provide accurate, validated measurement of the incremental impact on each dollar spent. 

2. Invest in a learning budget

The greatest gains lie in innovation. Therefore, every CMO should maintain a learning budget. This is cash set aside for the testing of new partners, new technologies or new media channels. Experimentation is the best way for CMOs to make discoveries that move the needle and materially impact their business. 

3. Implement a merit mindset 

Marketing moves fast. As such, the technology CMOs use today can easily be outdated tomorrow. Maintaining strong relationships with trusted technology partners is important. By the same token, however, CMOs should implement a merit mindset that holds all partners — both new and long-established — to an objective set of KPIs.  

4. Practice portfolio diversification

Relying on one or two major players to provide many different solutions is dangerous. Not only does it create dependency, but it leads to the cultivation of a fragile marketing ecosystem in which one pest can wipe out the proverbial crop. By practicing portfolio diversification — i.e., working with many different partners and solutions — CMOs can execute more resilient campaigns and strategies that deliver positive results even in the face of unexpected disruptions.  

5. Future-proof privacy

In a world where privacy concerns continue to mount, CMOs can’t afford a mistake. Any solution that incorporates consumer data must feature privacy-by-design engineering, as it is the only way to avoid ending up on the wrong side of laws like California Consumer Privacy Act or the General Data Protection Regulation. 

Being confident is different than being comfortable. For CMOs looking to diversify partnerships and keep their teams moving in the direction of innovation, these five roles put action and diligence together. The future of marketing is one that incorporates a multitude of tactics in the face of all the channels CMOs must address. Keeping a dynamic mindset and test-and-adapt approach is the surest way to stay in front of competition — and it’s a sure bet against becoming complacent.