Less BS, More Facts, Some Opinions
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today’s column is written by Terence Kawaja, CEO, LUMA Partners. CAVEAT: LUMA Partners is a leading M&A advisor to the ad tech sector. Hammer >>> Nail. The intersection of media, marketing and technology has always… Continue reading »
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Section Off Late last week, two House Democrats introduced a bill that would require social media platforms to share and implement content moderation policies and would revise Section 230 by allowing the Federal Trade Commission to bring enforcement actions against tech companies that fail… Continue reading »
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When Hearst created its internet-inspired food brand Delish six years ago, its product strategy was entirely digital, which was unique within the publisher’s portfolio of legacy magazines.
And while Delish may not be one of the “Hearst titans,” its playful nature has helped grow the brand’s audience and hone a group of super fans who are willing to pay to be closer to the brand in more ways than one, according to Delish editorial director Joanna Saltz on the latest episode of the Digiday Podcast.
Now, Hearst is bullish on building out its reader revenue lines by installing paywalls on its websites and securing more product licensing opportunities tied to its brands. Delish is not exempt from that strategy.
After it successfully created cookbooks and bookazines, the brand will launch a quarterly print magazine as a way to build out its membership offering. Delish is also seeking a stronger connection to its audiences’ kitchens with everything from branded ice cream to kitchen appliances, said Dan Fuchs, Delish’s vp and CRO.
Here are a few highlights from the conversation, which have been lightly edited for length and clarity.
We realized that our audience really does have a high appetite for print [and] from cooking from a piece of paper. We’ve been doing cookbooks for the past few years and so as we started to develop our next phase, which is really around consumer memberships, we realized that the people who want to be a part of the Delish universe and want to pay to be a part of it, really also want to see us in print. And so we made the decision [to] do it four times a year, make it super fun, make it really themed. — Saltz
The origin really behind [the magazine] was membership-driven [but] from a strategy standpoint, we’re really looking at it cross-platform holistically. Starting with issue number two, we’ve already sold some pages and that’s great, but we’re having also some deeper conversations about native content and sponsored recipes. And also how does that tie into what a partner might be doing with us on Delish.com. Theoretically, we could be doing some great branded content videos for an ingredient-based advertiser that can easily translate itself into a really cool native execution in the magazine spreads. There are some recipes that play a little bit better in print than they might digitally. — Fuchs
Licensing is definitely [a focus] as we look into that growing segment of non-advertiser revenue. We’re doing fewer but bigger, and maybe more long standing, deals. We’re putting a little bit more strategy behind that business, as we look towards what’s really good for the brand, like the Enlighten [ice cream] partnership, [which] gets the Delish name in grocery stores. The [Delish-Dash kitchen] mixers [are a] chance for us to play around with design and [Dash has] sold over $1 million worth of mixers in 2020. And that’s an Amazon-based sales model. But we’re going to be testing some HSN on that in May. — Fuchs
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May is Earth Month. Coincidentally, many companies planning an imminent return to the physical office are ramping up their efforts to be more eco-conscious.
The commitment of businesses and brands to be more Earth-friendly is hardly new. After all, doing so just makes good business sense. Not only does it reduce waste — and boost the image of companies among their customers — but it also bolsters the bottom line.
Even still, during the pandemic, as firms dramatically curbed their energy and paper usage and reduced their office footprint, sustainability has become a whole new rallying cry.
The global agency holding company IPG launched an initiative in the runup to Earth Month that underscored its commitment to the environment. Through its Sustainability Allies team, it has set a benchmark to save 50,000kg of Co2 and one million liters of water over three weeks this month. It has encouraged employees to share their sustainability efforts on social media and is giving the first 100 employees to save 1kg of carbon an insulated tumbler made of recycled plastic.
“Our fragile ecosystems around the world are suffering and underrepresented and disenfranchised communities experience this even more,” the company stated in a recent company memo. “As we continue to face the COVID-19 pandemic, now more than ever, access to clean air and safe water is critical to the health of people around the world. IPG is committed to environmental, social and governance issues. Individual behavior changes, such as reducing waste, are actionable ways to reduce our own contributions to climate injustice.”
Agency R/GA had already prioritized improving its sustainability before the pandemic, but over the last year its global office footprint reduced further and in a way that better suits its future plans for the office, according to Jess Astor, vp, executive director of business operations, R/GA. “With fewer people expected to be commuting to the office daily, office layouts will prioritize space for collaboration and communal work areas, and we have built a desk- booking system,” she said.
R/GA is among the companies radically reimagining their commitment to the physical workspace — and the use of resources that comes with it — as detailed in a recent article by The New Yorker.
Meantime, the office space solutions giant Industrious announced a goal of reducing paper and plastic waste by 25% its 100-plus locations in the U.S., where it operates more than 3 million square feet of space.
Industrious chief commercial officer Anna Levine said the company created its sustainability program after hearing feedback from its members and its own team about how some simple shifts in operations could have a significant impact on reducing waste. Its members, the company discovered, typically spend between six and nine hours a day in the office and use an average of five paper or plastic cups daily per member.
“We’ve known for years that sustainability just makes good business sense. Buying reusable and bulk items, for example, allows us to save longer term on operating costs,” Levine said. “And people truly want to be part of the change they want to see — they recognize that with small behavioral shifts their collective action can yield real results. As we see a national and global shift back to the physical workplace this summer, we still believe that these small shifts can produce big change — it’s one of the fundamental benefits of coworking and it’s important to remain mindful of that.”
Remote and hybrid work arrangements have had a clear impact on sustainability efforts. As a result of the pandemic, 78% of U.S. consumers believe their daily habits will change over the long term, including how they work and live, according to a recently released survey of 8,041 consumers globally by the professional services company GHD.
GHD also found that even after offices open back up, 37% of respondents in the U.S. expect to work from home more than they did before the pandemic, while 30% said their employer’s green credentials impacted their decisions about whether to become an employee and would consider those factors when choosing a future employer.
“The shifting workplace dynamics will permanently change how we think about everything — from transportation and digital infrastructure to how we configure our cities and office spaces,” said Greg Carli, sustainability, resilience & Environmental Social Governance advisory leader at GHD.
As cofounder and chief innovation officer of Resonance Global — a company whose business is helping other companies embrace sustainability — Steve Schmida knows a thing or two about how companies can become more eco-conscious upon the return to the office. Among the actions he advises his clients to take are continuing to cut back on business travel, and on office space.
It’s advice Schmida himself has followed.
“As the pandemic wore on, Resonance reduced its office footprint — a trend that we will continue as we allow much greater flexibility for remote work even as we return to the office,” he said. “Less office space means lower cost and carbon emissions, as well as reduced use of resources.”
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Marketers are starting to tweak their media plans — interest in out-of-home placements, as well as experiential pop-ups, are starting to crop up, for example — to account for people’s changing behavior as vaccinations ramp up in the United States.
That’s not to say marketers’ appetite for virtual events and live audio (a la apps Clubhouse and Twitter Spaces, etc.) has petered out altogether. On the contrary, marketers and media buyers say marketers will take a hybrid approach over the next few months as other marketing methods that had dipped (i.e. out-of-home and experiential) due to the pandemic make a comeback, along with new live and audio options.
“Humans crave the company of others, and after this long hiatus, everyone is anxious to jump back into normalcy,” said Kristy Gomez, director of communications planning at Chemistry. “But the smart move is to adopt a hybrid model — a mix of [in real life] and virtual events to cultivate the new audience share they’ve gained virtually, be safe and responsible in how they encourage the public to ‘re-enter’ in-person activities and be ready with something impressive when the public can engage with brands again.”
Even if marketers return to the tactics they used pre-pandemic, they aren’t likely to approach them the same way. When it comes to out-of-home, for example, the focus may be on areas where people may gather socially rather than on mass transit commuting as people aren’t yet going back to offices but are beginning to socialize in person and out of the house, explained Sarah Greenfield, executive director of strategy at creative boutique Episode Four.
“We’re already seeing a return to OOH and most of the major OOH vendors reporting above pre-pandemic levels,” noted Billy Long, evp of OOH practice, Publicis Media Exchange. “We’re also seeing more focus on short-term buys and a bit of hesitancy to commit to longer lead times given potential uncertainty toward the back half of the year. Digital also continues to have a growing presence as more marketers enjoy the flexibility and ability to upgrade inventory, turn on/off as needed.”
As for live audio and virtual events, marketers and agency execs expect the use of both to continue in a hybrid fashion as events slowly return this fall. Allowing for a virtual option will no longer be a replacement or “substitute,” noted Michelle Millar, vp group director of media and activation at Hanson Dodge, but another way for marketers to connect with people.
Taking a hybrid approach in getting back to pre-Covid marketing tactics as well as maintaining those added during the pandemic will likely be common.
“While the desire to reconnect [in real life] is going to influence the way the public moves this summer, people spent over a year becoming accustomed to virtual events and live audio platforms as alternative means of connection and communication,” said Gomez. “This opened up a world of experiences that many wouldn’t have tuned into before.”
How is Skullcandy working to diversify its marketing and media strategy?
At one end of the spectrum, we have launched our Skullcandy channel on TikTok. We know that our consumer is constantly looking for what’s next and we want to meet them where they are. TikTok, as well as other new platforms, give Skullcandy the opportunity to engage with new audiences, expanding our ecosystem to envelop even more consumers.
At the other end of the spectrum, we have consumers who crave more technical information, especially as we launch more and more sophisticated products. As a result, Skullcandy is now engaging these consumers on Reddit, providing an official brand POV, including detailed product information, support and customer service help. [We’re] also rolling out more content from our executive team on Medium and LinkedIn where our consumers are craving more tech-forward, long-form communication from us. Skullcandy’s chief product officer will author content on subjects like the benefits of active noise cancelling and more.
With the continued shift to online shopping, product reviews are critical to consumer decision-making and conversion in our category. To support that, we have launched a “Digital Health” initiative where we are proactively managing product reviews by seeding products to consumers in advance of launches, aggregating and reporting all reviews to the organization so that we have a comprehensive feedback loop.
How is influencer marketing changing and how should marketers be thinking about it?
Now more than ever, marketers need to find unique influencers that share the brands’ values (and its consumers’ values) over people that simply have a large following. We’ve often seen higher engagement with lesser-known influencers who have a loyal following. If you are using the same influencer as a number of other brands, you risk getting lost in a sea of hashtag soup.
Marketers are reexamining their strategies after the last year. How did Skullcandy change its strategy and how has that helped?
Over the past two years, we’ve started to highlight our mission-driven efforts around climate advocacy and youth mental health, deemed Music with a Mission. With all the turmoil over the past year, it reinforced our consumers’ desire to do business with brands [that] are doing good. It has inspired us to elevate our efforts by continuing to support Protect Our Winters and turning inward on some key company-wide sustainability initiatives. And, by continuing our work with To Write Love On Her Arms, a non-profit movement dedicated to presenting hope and finding help for people struggling with depression, addiction, self-injury and suicide, we are directly addressing challenges that our young consumer is facing daily. While we know that the world and the way we are marketing towards it is always evolving, Skullcandy will continue to adapt to make sure we are addressing the needs of our youthful consumer. — Kimeko McCoy
For several years, there has been a push for Apple and other messaging platforms to create emojis that better represent a range of life. Emojis are an integral part of today’s culture and communication as even brands got on board, creating custom emojis. It seemed calls for more diverse emojis were being heard when Facebook rolled out 1,500 new “diverse” emojis for Messenger back in 2016. But according to Adobe’s new Global Emoji Diversity and Inclusion Report, there’s still a ways to go. Take a look at the key findings below:
“Marketers should value pre-permission messaging just as highly as ad creative itself. It could prove possibly one of the strongest calls-to-action that advertisers can manufacture at the moment, because of the knock-on effects of having very low opt-in rates for advertisers, from reduced audience sizes to less informed optimization strategies.”
— Bruce Tissington, paid social lead at media agency Space & Time, told senior brands editor Seb Joseph of how marketers should approach Apple’s ATT consent issues.
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Ad tech vendors will look a lot like mobile app gaming companies in the future, according to Zynga’s president Bernard Kim.
It’s how Kim explains why his company was able to make a move to acquire ad tech firm Chartboost for $250 million last week (May 6 ). His rationale: ad tech still has a future in mobile advertising, but maybe not on its own.
Apple’s privacy rules made sure of that.
The company’s decision to only allow access to its Identifier for Advertisers, or IDFA, on a user opt-in basis and to only provide limited reporting back to advertisers through its SKADNetwork affects any business that monetizes ad space in apps. At the same time, the plan also knocks advertisers looking to reach specific audiences on those devices where the privacy rules are in force.
It left Zynga with no choice but to try and become a walled garden in and of itself. The rationale being that if Apple’s tracking crackdown all but quashes the idea of being able to facilitate targeting and measurement through data being beamed from one independent company to another then the only viable option would be to pass it around with a closed ecosystem owned by one business — Zynga.
Now, with Chartboost’s under its belt, the company does not need to work with — and subsequently share— as much data with other ad tech vendors. Indeed, Chartboost’s business spans a demand-side platform, a mediation service and technology that allows multiple buyers to compete simultaneously for the same ad slot in an app.
Essentially, this means that Chartboost won’t just help Zynga grow the amount of money it makes from players because there are more advertisers competing to reach them at the same time, it also gives its own marketers tech to help them acquire new gamers as well as hold on to existing ones. Either way, Zynga is in a position to extract more value from the first-party data gained from people playing its games.
“Chartboost will power our first-party app inventory as well as enhance our cross-promotional activities within Zynga titles,” said Kim. “As the market continues to shift and become more dynamic and disrupted it’s in Zynga’s strategic interest to own more parts of the ecosystem.”
It’s an outlook not too dissimilar to the one held by Applovin. The ad tech company is effectively reading the same playbook as Zynga albeit in reverse. It acquired mobile game developer Machine Zone a year ago and is in the process of acquiring mobile measurement firm Adjust. Apple’s privacy changes sparked a wave of gaming and ad tech M&A.
“The gaming companies are going through acquisitions and mergers after Apple announced ATT like other technology companies because with the large pool of publishers (different games) — IDFV allows them to monetize better across their own network,” said Tiffany Ou, general manager of the Americas region at app monetization company NativeX. “With SKADnetworks delayed attribution, a lot of mobile advertisers will reduce their marketing budget which will impact the smaller app developers when the traffic/data can’t justify the premium eCPM.”
Naturally, Zynga is keeping an eye on how it all plays out.
“You’re going to see more deals like this and things are going to become very interesting over the next few weeks as Apple’s Apple Tracking Transparency framework starts to filter through the market,” said Kim. “We remain very inquisitive in the marketplace. And we’ve been able to find success through previous acquisitions — even in the pandemic — like Rollic and s Echtra Games. It’s more fun to be in the games industry as part of a larger family than it is going alone.”
The deal all but brings an end to the company’s plans to build its own ad tech — for now. In February, the company’s CEO Frank Gibeau told investors Zynga planned to build its own ad network. Chartboost, however, scratches that itch.
“We’ve been on a path to potentially building our own ad tech but in this case, we found the right partner and were already using the service,” said Kim.
Despite the optimism, Kim said it’s still too early to make sense of the impact ATT has had on the business, especially given the adoption of the software update that includes the new rules has been relatively low so far. Regardless, he believes the business is well placed to come through the crisis stronger.
“We’ve factored the ATT impact both on the supply and demand side into our numbers and we’re still bullish on the future even with headwinds,” he said.
For context: the company increased its full-year guidance by $100 million earlier this month (May 5).
Like most companies in mobile advertising, Zynga is braced for some short-term pain from ATT, specifically on ad rates in the second and third quarters, but believes it has the necessary strategies in place to mitigate those losses. There’s also the possibility that its ads business on Google devices could grow as a result of money being (directed?) away from targeting iOS devices, where advertising is hampered.
“It’s definitely been a recent trend that we’re seeing on the demand side of our business with regards to rates as a result of some shift of dollars from iOS to Android,” said Kim. “I also think a lot of that growth has come down to improvements to the [Google Play] app store and better hardware in the marketplace.”
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