Month: November 2021

In September, Digiday surveyed over 80 publisher professionals about how their organizations make money. The research yielded insights about their subscription marketing tactics, the composition of their affiliate commerce businesses. 

It also revealed that a majority of the respondents said that their organizations make some money from selling products directly to their readers. While its impact on the bottom line tends to be minor — more than three quarters of the respondents who make money from selling products describe it as a “small portion” of their revenue — the scope of publishers doing it signals that the publishing industry, as a whole, is starting to embrace a different mindset when it comes to the way it thinks about revenue diversification. 

As publishers struggled to grow their digital advertising businesses in the face of competition from Google and Facebook, many have been on a years-long path to diversify their revenue streams. 

That has created a picture where many publishers now have multiple streams of income. While the share of publishers that make a lot of money selling products is small, it is comparable to the share of publishers that generate lots of money from many other emerging revenue streams. 

In a separate survey conducted at the beginning of the third quarter of 2021, over 110 publisher professionals answered questions about how their organizations make money. 

While the respondents were not identical from survey to survey, a nearly identical percentage said that they generated money from selling products. The percentage that said their organizations generated at least a “large” portion of their revenue from doing so was in line with the percentage that said their organizations made at least a “large” portion of revenue from events, or affiliate commerce, or content licensing.  

We’re seeing a fundamental shift in the way agencies perceive the client-agency relationship. Dave Kersey, svp and executive media director at GSD&M, contrasted the traditional retail dynamic of agencies pitching and competing relentlessly to win clients’ favor with the communicative, mutually supportive mood of the early months of the COVID-19 pandemic. That has yielded a new landscape in which Kersey said agencies are positioning themselves as “thought leaders and partners” rather than vendors.

According to Kersey, the opportunity for agencies now is to forge enduring relationships built on consistent support and open communication between agency and client. The challenge is leveraging that opportunity to maximum effectiveness. That begins with agencies being proactive in telling the client what they should be doing, and making sure the client knows the agency has their back.

“They rely on us to be that media voice 100% of the time,” Kersey said. “Thinking about the space, audiences, how to make an impact and how to drive positive solutions and outcomes for the brand. So the opportunity is to show them that’s why we’re here when they can’t focus on it 100 percent.” A recurring theme was the centrality of people to an agency’s value. No matter how sophisticated the tech, an agency is its people, and they are the core of your client relationships. “No bot is going to come to my funeral,” said Josh Palau, chef media and activation officer at PHD.

Talk of the “Great Resignation” has been all over the media of late, and chances are you’re feeling the crunch within your own organization. As one of the biggest advertising players in the world, Dentsu International is grappling with this issue in all its nuances and complexities. Dentsu’s global director of talent, leadership and organizational development, Caroline Vanovermeire, joined us to discuss how the company is approaching the biggest recruitment challenge in living memory.

Vanovermeire said Dentsu is thinking of the phenomenon as the “Great Reappraisal” rather than “Great Resignation,” and she said the company is evaluating different facets of the employee experience and its benefits packages to figure out how to retain and attract talent. Make it a two-way conversation, listen to employees’ voices, and use what they’re telling you to inform and shape your benefits packages and workplace culture. “I think it’s essential to articulate and design the employee value proposition from the bottom up,” Vanovermeire said.

Vanovermeire said agencies need to develop an instinct for flexibility and personalization in terms of crafting compelling benefits packages. Some employees value a path to growth and a sense of reward in their work, while others are more focused on how flexible a workplace is. Many companies are figuring out how to make hybrid work arrangements sustainable and effective, for example. “By engaging and collaborating with employees, you can really ensure that you’re tailoring what is important to the different groups,” Vanovermeire said. “I think personalization is far more important today than it has ever been in the past.”

Nobody should be under any illusions about the industry’s persistent shortcomings in terms of DE&I. Agencies need to do a better job of outreach and making sure that people of all backgrounds are getting the message that they can have a career in advertising. That’s an ongoing conversation, but at the summit we heard about several initiatives aimed at addressing structural problems that have created enormous disparities in who benefits from media buying.

Megan Pagliuca, chief activation officer at Omnicom Media Group, told us about how OMG partnered with SSP Colossus to curate inventory with a focus on minority-owned publishers, using the company’s clout to get better SSP rates for publishers. OMG has also launched a new program focused on creating a new media channel that will streamline the process for brands to work with a diverse group of influencers and creators via OMG’s diverse creators network. The program will include micro-influencers, an underrated category yet one that has been vital for driving growth for DTC brands in particular.

Lisa Torres, president of cultural quotient at Publicis Media, talked about creating a coalition, called the the once & for all coalition, that works toward removing some of the legacy barriers that hinder investment in minority-owned media. The coalition recruited economists and other experts to break down and analyze pillars of media buying such as the evaluation and budgeting process, measurement and metrics. “Our current measurement and metrics do not account for influence, don’t account for being able to drive audience word of mouth, the connectivity to the community,” Torres said.

The goal is to secure commitments from agencies to increase investment in minority-owned vendors, creating smoother access to a diverse set of vendors and training agencies to make responsible investment decisions that set vendors up for success. Torres sets a strict “no performance, no soapboxing” standard for prospective partners. She wants to work with agencies and executives who are serious about action. “I wanted to have people who actually gonna work and do this, and really think about it and be purposeful,” Torres said.

Inevitably, the summit landed routinely on the subject of post-cookie identifiers and the experiences agencies are having with test-and-learn tactics. Rayna Elliott, svp, digital strategy and innovation, Horizon Media, said that testing pure contextual targeting against audience targeting on various KPIs had delivered mixed results. “In some cases, for some clients, [pure contextual] performs better, in other cases it does not,” Elliott told us.

Horizon has even run tests with no data targeting at all. “Does it change things drastically?” Elliott asked. “In some cases we found no. You’re not paying for that additional layer of data and you’re still hitting your target — especially if it’s a broad enough target. If you’re not looking for something super niche, taking off that layer of data targeting might not be the enemy, it might be OK.”

Josh Palau described the process PHD has been going through of identifiying non-cookie data to assemble individual consumer profiles. “It’s a real person,” Palau said. Those profiles are then assigned an ID. These profiles represent a guess at who a target consumer might be, but is only hypothetical until the company tracks the performance of the IDs for 30 days. “It seems like they’re exactly what you’re looking for,” Palau said. “And when it doesn’t perform, you then have to figure out why.” Elliott also discussed the legal implications of developing privacy solutions. “There’s a lot of lawyers involved,” she said. “Every time we’re like ‘we want to test this out,’ it needs to vet through our internal lawyers, it needs to vet through the clients’ lawyers, there needs to be paperwork and new processes that are signed.”

We also heard upbeat noises from the out-of-home sector, with brands rediscovering the category’s unique creative appeal in the context of people trickling back out into cities and events schedules gathering steam once again.

Jason Carrasco, head of strategic partnerships & growth at Gupta Media, said “spectacle” is the big draw of out-of-home. As she noted, Kanye West and Drake both used out-of-home to create suspense and ratchet up excitement around recent album launches, and Google and Amazon are going big on billboards and other out-of-home formats.

Tech is helping out-of-home move into a new era. Carrasco talked about how measurement is becoming more practical, at least in terms of establishing ballpark engagement figures. Meanwhile, Mike Cooper, global president and CRO at Adomni, said real-time buying and geofencing is “killing entry barriers” that have traditionally kept smaller businesses and agencies outside the out-of-home market. “I feel we’re on the edge of something pretty epic,” Cooper said. “In 1920, the government put alcohol on prohibition until 1933. The next time the government put anything on prohibition was in 2020, when going out of your home was put on prohibition. And if 1933 taught us anything, it’s when a prohibited substance is released, we get fucking wasted on it.”

Programmatic product placement

Triple Lift and Amagi recently announced a partnership to push forward on what could be one of the most exciting developments in the industry in years. Programmatic product placement allows brands to purchase space within CTV content programatically. Transactions would be close to real-time and content could be displayed according to audience profile or contextual factors, with inventory available across dozens of streaming channels. The market for programmatic product placement is forecast to be worth $11 billion, so this is definitely a space to watch closely.

“Programmatic is just literally a way to buy … The biggest underpinning is understanding your client’s business. For us it’s not about a KPI on did you deliver a plan on time, or were you fully staffed by a certain percentage of the engagement, or frankly even things like ROAS that I would argue are not really business driving KPIs. In all of my endeavors, I need to drive X amount either acquisition, because I knew how much that consumer’s worth to us long-term, or a profit target, because I knew how much money I needed to stay on shelf.” – Josh Palau, Chief Media and Activation Officer, PHD

• A number of speakers talked about how the relationship between agencies and brands has become defined by an ethos of partnership and transparent communication, rather than a transactional client-vendor relationship. Josh Palau said that agencies should be on the front foot in guiding strategy for clients, but he reminded us that programmatic in itself is not a strategy, just one tool in the toolbox.

“Most of our clients did really well during COVID, and so you’ve got a lot of CMOs asking why change [is] a good thing. So I would say heading into 2022 diversification planning has been the number one thing we’re talking about, but it’s not going over as well as we’d like.” – Claire Russell, Head of Media, Fitzco

• Claire Russell talked about the challenge of persuading clients to move away from an “addiction” to search. She said one mistake is to focus on search itself, while neglecting the fact that consumers need a reason to care about the brand — or even to know that the brand exists — when they discover it in search. TikTok is obviously one channel that many brands and agencies want to get more involved in, but Russell also flagged podcasts as a good avenue for diversifying media mix over the past year. For some brands, often-overlooked platforms like Reddit can be an appropriate fit (but be sure Reddit is a good match for the brand before making the leap).

“Analytics has become more and more important, and will continue to become more and more important as it goes from not just reporting but truly understanding. What can we measure? How can we measure it? What does it mean? I think that’s going to continue to be a big theme.” – Rayna Elliott, SVP, Digital Strategy and Innovation, Horizon Media

• Elliott gave us food for thought on the kind of skillsets agencies are going to need to build out for the post-cookie world. In addition to hiring more people who are skilled in analytics, she said she expects that the focus on developing and rolling out new identity solutions will mean even more need for data specialists. Finally, Elliott said that business solutions teams will also need to be staffed by more people who “truly understand the data and the digital pieces.”

More than 40% of the U.S. population identifies as ethnically diverse, but minority-owned media organizations and media organizations principally serving minority communities receive only 5% of media spending.

Ten years after its debut, Vox Media’s technology news publication The Verge hasn’t necessarily changed all that much — at least not compared to its ambitions from the outset. Rather than changing course over the past decade, the outlet has followed through on its original trajectory.

“The biggest difference between The Verge now and The Verge 10 years ago is that we have the staff and the capability to actually do all the things we wanted to do,” said The Verge editor-in-chief Nilay Patel in the latest episode of the Digiday Podcast.

That being said, The Verge does seem to be in upgrade mode. Not only is the outlet preparing a site redesign for sometime in the next year, but within the past two months, it has opened up new product lines and revenue sources. In September, Vox Media acquired podcast newsletter Hot Pod, which has become part of The Verge and which operates a subscription business that has become the publication’s first paid product. A month later, The Verge debuted a connected TV app and hosted its first live event.

The Verge hadn’t exactly planned to be making these leaps to coincide with its 10-year anniversary. “We thought 2020 would be our growth year,” Patel said. The pandemic postponed the publication’s plans by a year. 

“All of that energy was pent up, and it is all coming out at once because we’re turning 10. We’re excited. We want to take the next step of our evolution,” said Patel.

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

On sticking to the original intent

We were a consumer tech website. Now we have these other aspects [to The Verge’s editorial coverage]. But our thesis from the beginning is that it’s fun to be smart about technology and thoughtful about it. So we’ve never felt any pressure to dumb down or go more mainstream. We’ve always felt pressure to make people deeper into it.

On hosting its first live event

Our conference needs to be about The Verge, which is the culture that technology creates. It needs to be for people. It needs to be for our consumer audience. It needs to be open. So we were open; anybody could buy a ticket [to On the Verge]. We wanted to show real people doing things with technology. So we did have art exhibits. We had a drawing class on the roof, which was my favorite. To have an event where a bunch of people are quietly learning to draw, it made me so happy. We had musicians. The point was not, “Come, listen to executives.” The point was “Come, participate in the future.”

On releasing a connected TV app

We’ve been making video from the beginning. We have a huge library of video that we think is interesting, that we want to resurface in different ways. Most importantly, our audience keeps asking us for a way to view video without the baggage of YouTube or other platforms.

On acquiring a podcast newsletter — and subscription business

I wasn’t on the hunt for a subscription product. It was people I respect coming to work for [Vox Media]. I had a perfect senior reporter who was already friends with [Hot Pod founder Nick Quah]. I didn’t think we were going to lose subscribers right away with an author change. I thought we would actually gain them, which we have actually.