Month: December 2021

Unsurprisingly, marketers are concerned. Of course, publishers are more exposed should regulators choose to investigate these findings further — the potentially shady data practices are happening on their site after all. Advertisers, however, are wary of being found guilty by association. So much so that they’re conducting their own investigations into the matter. “We’re going to have to audit our own media buys to see if we’re privacy compliant,” said the chief media officer at a global CPG company, who was not authorized to speak to Digiday. If those buys aren’t compliant, then the marketer can use the audit to consolidate their spending into those publishers working with ad tech vendors that can assure them they have EU-based data centers. “This is scary stuff,” said the marketer.

Granted, those fears aren’t new. In October, ad data detectives shared findings with Digiday which observed a gap between what someone consents to let happen to their personal data versus what actually happens to it three years after the arrival of a law (the General Data Protection Regulation) meant to reconcile the divide. Ebiquity’s study does, however, crank up the pressure on marketers to confront their own role in fueling an ad market where the idea of people being targeted without their consent is even possible.

“For decades, advertisers have been collecting data on users via publishers by pixeling ad creatives unbeknownst to the publishers themselves,” said Lulu Phongmany, a consultant with experience of working at both ad tech companies and media owners. “I work with publishers all the time to develop data agreements and pixel approval workflows now that agencies and brands are being held responsible for how they are collecting their data with new (and evolving) privacy laws being introduced.”

Even if advertiser-led checks confirm Ebiquity’s own conclusion, it doesn’t necessarily mean publishers are intentionally acting nefariously. According to Digiday sources, publishers can sometimes be limited in their ability to outright block third parties from tracking their audiences without their consent. Consider this: neither the advertiser nor the publisher has total control over what trackers are used. When a cookie is loaded on a page it calls a server to then register that the cookie has been served. Sometimes that cookie doesn’t just call the server, it calls other cookies. Essentially, one primary cookie could subsequently call upon hundreds of other cookies, which is where things get tricky for publishers trying to keep track of what’s happening on their site.

It raises further questions over whether the Transparency and Consent Framework, which was developed by the Interactive Advertising Bureau’s Tech Lab and IAB Europe, is robust enough to comply with the demands of the GDPR.

The protocol standardizes how businesses —  publishers, ad tech vendors and agencies — can continue running programmatic advertising outside of walled gardens in a way that is compliant with GDPR. The problem is that it may not actually be legal. Several EU data protection authorities are questioning the robustness of the IAB’s TCF. In fact, policymakers at IAB Europe are awaiting key directives from the Belgian authority, with the data watchdog there expected to publish a key verdict on TCF’s compliance with GDPR in the coming weeks.

“Since the inception of IAB’s TCF initiative, it has relied heavily on good actors and the industry’s desire to be compliant, but a known challenge has been that controls and checks need to be applied and enforced by the Framework’s administrator,” said Richard Reeves, managing director at U.K. trade body the Association of Online Publishers: “IAB’s TCF is still a very necessary structure to enable the programmatic supply chain to be fulfilled; working with senior members of the AOP, and in support of the TCF objectives, we have identified, and shared publicly, a number of actions that can be undertaken to further mitigate risk. The document has been shared with both IAB and ICO, who maintain direct dialogue, to inform their decision-making on how to enforce greater controls and checks.”

Still, as alarming as the report’s conclusions are, it should be taken with a pinch of salt. Indeed, several sources advised those reading Ebiquity’s report to interrogate some of the assertions in its latest report, albeit none questioned its observations. Not least the fact that both Ebiquity’s audit business and Usercentric’s CMP stand to benefit from any alarm kicked up by the report.

While the survey’s participants have not been consistent from quarter to quarter, all three surveys have been taken by representative numbers of people — the smallest sample collected for any one survey was 59 people — and they show that appetite for a return to full-time office work is diminishing.

Through the first half of the year, as vaccines were going into arms and weather was warming, more and more publishers were getting excited about the prospect of returning to in-person work. In July, close to 40% of survey respondents said they’d be comfortable going back to the office full-time within one to three months; a majority said they’d be willing to come back within six months.

Today, with vaccination rates having leveled off in most places and the omicron variant rising, that optimism has given way to a more pessimistic outlook. While close to one-fifth of the respondents said they’d be willing to return to full-time office work within the next month, the share that said they’d be willing to go back within the next three months has declined by more than 10 percentage points.

More than half said they would not go back to work within the next year.

The issue appears not to be related to time needed to implement safety measures or guidelines, either. In April, about one-quarter of respondents said they’d be willing to get back to full-time office work within the next 12 months; in November, just 10% of respondents said they’d be willing to come back within 12 months.

The change in attitude hasn’t kept those respondents hunkered down in their homes. Over that same stretch, the share of respondents who have left their homes occasionally for professional or personal events has grown healthily, though the share that have met in-person for social gatherings far exceeds the shares that have met for work-related ones. 

While the percentages of people that have attended an in-person business meeting or conference has more than doubled from their springtime levels, they are still far behind the nearly 70% of respondents that indicated they’ve met someone in-person for a social event in the last month. 

Agency professionals have shown rising comfort with meeting friends and colleagues in person in nearly identical percentages over the same period of time.

Aside from supply chain and softer BFCM, marketers may not have the flexibility in ad spend that they’ve had in previous years. Typically, if marketers were aiming to make up for a slower than expected post-Thanksgiving sales week they would amp up advertising, making sure that whatever ad dollars needed to be spent by the end of the year were being deployed “but this year that money went to pricing,” noted Allysun Lundy, vp of retail media strategy at Publicis Commerce, adding that the possibility of dealing with stock issues had some marketers hesitant to commit to later activations. 

“This year’s [holiday season] challenges are in many ways the same as last year, if not more amplified — shipping delays continue, and stock issues, as well as inventory, is even more of a dire setback this season,” said Dana Trombley, senior director and agency lead, affiliate marketing and performance partnerships, dentsu. “Consequently, many retailers’ sales started earlier this year but didn’t necessarily translate into [year-over-year] growth.”  

Even so, starting earlier this year or extending the deal window beyond Cyber Monday may become the norm simply because consumers expect it to be going forward, according to agency execs and marketers. 

“Consumers [have] been trained to believe [that products are] ‘always on sale,’” said Trombley.  “I think we’ll see deals starting even earlier in the future, and those who did not begin sales early will rethink it in planning 2022. But more importantly, creativity in messaging and loyalty rewarding instead of price slashing needs to play a more substantial role in holiday seasons to come.” 

Some believe that deals associated with the New Year and New Years’ resolutions, especially for products still in-stock from marketers who planned on those promotions, may move up this year in the same way that fall and winter holiday ads did. 

“Brands need to extend their planning out further and continue to be nimble and creative,” said Kari Shimmel, chief strategy officer at Campbell Ewald. “Right now we are already talking about the December holidays for 2022 along with spring lines for 2023.” 

Regardless of timelines this year or next, marketers and agency execs believe there needs to be more creativity and planning into holiday advertising going forward. 

“Advertisers need to dig deeper in the value of those holiday customers to craft their future strategies,” said Maggie Siegler, group director, retail lead, dentsu. “The expected sales during the holiday season creates opportunity for more brand discovery, but questions if brands can convert those new shoppers into loyal customers.”

3 Questions With Skillshare CMO Liana Douillet Guzmán

During the pandemic, online learning boomed. Obviously that helped a company like Skillshare, which is focused on online learning. Now that people are venturing back outside, how is Skillshare adapting?

Skillshare did see a huge spike when lockdown orders took place at the beginning of the pandemic. Our member engagement doubled or tripled in most markets. While it’s even more inspiring to watch society inch back to normalcy, there are still some “pandemic fads” that I predict will stand the test of time: sweatpant WFH uniforms, and online learning. We are expanding the types of learning experiences Skillshare offers, though, to find the best of both worlds between connections made in-person and the flexibility and accessibility of online learning. We polled our members to find out what they wanted more of, and discovered they valued accessibility to instructors, increased accountability for projects and peer-learning the most. 

That’s why we launched Chroma Courses in October 2021. The multi-week, small group courses offer deeper interactions with teachers and peers, building in more accountability for members to accelerate progress toward goals.We believe that community and personalized experiences will keep people coming back to online learning platforms in a post-pandemic world.

Has a return to in-person activities impacted Skillshare’s marketing strategy? How or how not?

It certainly has. The creator economy exploded throughout the pandemic and, as a creator-first platform, we are constantly adjusting our marketing approach to support them. Investing in marketing and content initiatives that align tightly with what our community of creators care about and feel passionately about is top of mind for us, especially as we think about the role of creating and creativity in a post-COVID world. This includes incorporating channels like YouTube and TikTok that creators are paying attention to into our marketing plans so we can continue to support their networks and revenue streams.

We are also focused on expanding internationally. We believe creativity is a global language and we are continuing to grow our presence around the world while also aligning to local needs in terms of product-market fit and regional content in markets like India, Latin America and Europe.

How is Skillshare thinking about the future of work, and how is that being interpreted to employees?

We were early movers on a remote-first approach to work, and as a leadership team, we made the decision early on in the pandemic to transition to a fully distributed team. With reports showing more than half of U.S. workers are looking for new jobs, being an early adopter of the remote work model and giving employees the flexibility to design a work routine that matches their lifestyle is protecting us from feeling the brunt of “The Great Resignation.” 

Beyond that, we’ve made a concerted effort to put employees’ mental health at the core of our people strategy. We’ve seen again and again how the seemingly simple act of creating can be a force for good in people’s lives so we give each of our team members a “Creativity Fund” of $2,000 per year to support their individual development and creative exploration. We know that engaging in a creative process has full body benefits, from reducing stress and anxiety to increasing positive thoughts. We encourage our employees to find something outside of work that helps them recharge, and give them space to do it. — Kimeko McCoy

By the numbers

Shoppers are steadily checking names off of their holiday shopping list, having gotten a head start buying gifts back in October. And as they reach the home stretch, new research from Celtra creative automation company reveals that cross-channel personalized ads will play a key role in winning shoppers over this holiday season. Find more from the report below:

• 62% of American consumers said they plan to purchase online and in-store, with 60% expecting to shop through retailers’ websites this holiday.
• 35% of consumers favor brands to communicate with them through email instead of receiving direct mail.
• 48% of shoppers seek personalized products and offers, and 77% are more inclined to shop with brands that personalize content across their online shopping journey. — Kimeko McCoy

Quote of the week

“It’s a completely different business model. One depends on profits from media buying while the other could care less about media because there are much bigger fish to fry.”

— Tom Triscari, an economist at consulting firm Lemonade Projects, told Seb Joseph for his piece on the state of consultancies versus agencies.

What We’ve covered

• The latest global ad forecast from GroupM predicts a boon for media.
• Here’s why brands like Google and Spotify are working with this astrology app.
• How this CBD brand is leveraging digital video to get into TV and streaming.

The business has doubled its headcount over the last 18 months to 60 people — no mean feat during a talent crisis that’s crippling businesses across the sector. Furthermore, those hires have touched down at every department across the organization as well as at new ones like the creative studio and people and culture teams. But the recruitment drive won’t stop there. Fanbytes expects to double its headcount again in 2022, and is currently hiring over a dozen new roles with more to be announced. Some of those will be in New York where it is moving to next on its path to building an agency uniquely positioned to capitalize on the creator economy. 

There’s no single thing that’s driving this growth. Rather, it’s a series of small wins, from securing a wealth of senior talent from across the industry to shore up core parts of the business like its creative studios division to having a who’s who list of investors capable of opening up the upper echelons of industries like fashion and media. Momentum like this is critical, said Fanbyte’s chief operating officer and co-founder Ambrose Cooke. And things really picked up at the peak of the pandemic. 

“The pandemic fuelled our growth because brands that were used to spending millions of pounds on traditional media had to move that money — or at least significant sums of it — online, which is why you saw so many platforms grow as a result,” said Cooke.

Sure, this was happening well before COVID struck but like many media trends over the last two years, clients prioritizing creator content over agency-led creative intensified as a result. Indeed, the marginal costs of acquiring new customers are more acute than ever for marketers. Creators, however, can bring those costs down, added Cooke.

Nowhere was the shift clearer than on TikTok during the pandemic. In fact, 2020 was a wild year for the platform. Between the geopolitical tensions around the business and the CEO hooha, the app managed to hit one billion monthly active users, pushing into the upper echelons of the online media sector globally. Naturally, it piqued the interest of advertisers, from PepsiCo to Dr. Squatch. The FanBytes team saw this coming earlier than most. 

They started brokering deals with advertisers on behalf of up-and-coming creators in 2019 at a time when the industry was still trying to work out whether TikTok was a passing fad. Soon after, Fanbytes formed a talent management business Bytesized Talent. Now, it represents some of the biggest creators in the U.K. like EmandLoz (fashion and entertainment), and Mr Tov (comedy, lifestyle and family). More importantly, it gave the business a proof of concept to take to marketers. TikTok’s value proposition to them, goes the thinking, revolves around an endless stream of entertainment content that captures someone’s attention. So when it became clear that TikTok was far from a gimmick, execs at the agency already had a clear view on how both creators and advertisers could make money from it — Bytehouse. 

Launched at the onset of the pandemic, Bytehouse was a collective of creators who live together producing content, while fuelling each other’s careers. It seemed to work. So far there have been 15 brands including Boohoo and Compare The Market that have appeared in content produced by the collective from the house. 

“Because we had built the Bytehouse and were getting all this press around it we started getting a lot of brands who wanted to work with it, which then fed into them wanting to work with Fanbytes as a whole,” said Timothy Armoo CEO and founder of Fanbytes. “The Bytehouse essentially became a TV show for young people during the lockdown. Marketers saw it as a show that was tailor-made for that moment.”

They definitely did at the U.K. government health body Public Health England (PHE), which was one of the biggest advertisers in 2020. 

Initially, the advertiser just wanted to work with the creators FanBytes represented — specifically those in the Bytehouse as a way to show their fans different ways they could keep themselves occupied during lockdown. Now, its giving the agency briefs that span messaging on vaccinations to mental health. Jan Nixon, marketing manager at PHE, expanded on the point: “Through the numerous projects we have worked with Fanbytes on over recent years, they have demonstrated an inherent understanding, not just of how to connect with younger audiences, but how to do so in purposeful, thought-provoking and lasting ways that inspire action.”

Still, working with marketers this way only scratches the surface of how Fanbytes’ management team hopes to cash in on the agency’s expertise. 

Put simply, it wants to create its own IP. Bytehouse and the Bytesquad group of creators who lived in it were just the start. Armoo explained: “The campaigns drive the insights, the insights drive creators who are growing on these platforms who in turn drive our talent business, which subsequently underpins our owned and operated business in terms of IP, which then brings in more brands and campaigns to power insights and so on.”

In many ways, what they’re building subverts the standard business tropes of media companies. While media companies — even agencies — have always been talent companies, their business models don’t necessarily reflect that. Yes, the talent is driving the business forward, but the money tends to come from owning and distributing content. Now, businesses like FanBytes are wired to monetize the individual. To do so properly, however, they’ve had to think differently about building an agency. See for example, the flurry of senior talent to have joined the business this year: head of campaigns, Natalie Stagnaro from Gleam Futures, director of brand and communications Rebecca Fennelly from JOE Media and head of creative, Tom Sweeney from Social Chain.

​​“The fact that we’re hiring all these senior people shows the business taking the next step to becoming a full-bodied partner to Gen Z, rather than just getting an influencer to post something on behalf of a brand,’ said Armoo. Moving forward, those deals are more likely to resemble joint ventures, he continued. 

Take Rhia Official, a toy influencer who is repped by the agency’s talent management team. “Instead of saying to marketers ‘what type of campaign do you want to do’, we’re saying’ ‘why don’t we do a limited edition drop of a toy line with her,” said Armoo. In other words, it’s a commercial plan rooted more in insights than distribution like other influencer agencies. 

To do this properly, Fanbytes’ co-founder and chief technology officer Mitchell Fasanya built its own insights technology — Bytesights. In a nutshell, the tech helps the agency spot which creators are popular across various subsets of the Gen Z demographic by tracking how the content they post performs. Want to know what trends are going to blow up on TikTok — or any of the other main social platforms for that matter? Bytesights has you covered. As Fasanya explained: “You can use the platform to understand when trends emerge on a platform like TikTok, see at what point they exploded and then identify the influencers that have contributed to that. As a marketer, you can use those insights to try and create your own moments on the platform.”

In December 2020, the company acquired the Charlotte Agenda to get its local news arm into gear. In February, Axios launched its new software-as-a-service business, Axios HQ, which made over $1.5 million in under a year. And in the spring and summer of this year, rumors circulated the media space about whether Axios would merge with The Athletic or be acquired by Axel Springer.

Those rumblings have since quieted down and Axios’s president and co-founder Roy Schwartz said that “It’s too early at this point to sell the business or to merge it with something that would be larger than we are.”

But either thanks to or in spite of the headlines, Axios is set to hit $86 million in revenue this year, replicating the 40% year-over-year growth the company saw in the year prior — all while maintaining profitability for three years running. 

In the latest episode of the Digiday Podcast, Schwartz dives into three new and growing businesses — local news, Axios HQ and the upcoming subscription product Axios Pro — that the media company has been prioritizing over the past year and will continue to do so in 2022.

Below are highlights of the conversation, which have been lightly edited and condensed for clarity.

Profitability as a start-up is not always the goal

We’ve been profitable for the last three years and the year before that was breakeven. We don’t actually try [to] be profitable, we’re still in growth mode, we’re trying to actually invest that money. But I think that it just became very difficult to do [so] during COVID. Hiring has been difficult. You know, we started 2020 with a plan to lose money but because we froze all investments, we ended up making money last year. And then this year, we went in again, saying, “We’re going to invest a lot of money,” which we did do, but the hiring has just been very difficult. It’s much slower than we anticipated. And so we will be profitable, but it’s not necessarily on purpose.

Finally building a subscription business

​​If you go back to our first pitch, it was that we wanted 50% of our revenue to come from advertising, and the other 50% to come from sustainable subscription-type services. And we’ve been focused on that from day one: What is that service that we’re going to provide? Pro is very obvious. We always knew we were going to do paid content at some point. The reason that we’ve waited five years to do it, is that the advertising business grew much quicker than we anticipated, then the audience grew much quicker than anticipated. And we felt we didn’t want to put a barrier up for people to read content and to get to know our brand before we were big enough. And so now at this point, we are large enough that we can create great content that people pay for. We have a history of doing that —before we were at Axios, we helped with political Pro, which has been a fantastic success as a subscription product

The Axios approach to mergers and acquisitions

We are always open to having discussions and learning more about potential partners [and] potential investors. We did that over the last couple years. We’ve had a lot of good conversations to learn more about who’s out there [and] what are they looking for. What are they trying to do and does it line up with our vision? I think ultimately, what we’ve decided is that we have an incredibly fast-growing business. We have several really large opportunities in front of us with these different business lines and we want to see how those play out. We want to invest more in it.

I think the thing that we’d probably be most on the hunt for in 2022, would be really good investment partners —people that see the vision that we have, especially with HQ. It’s an area where having people who really understand the SaaS space can help us [over] the next few years, as we anticipate exponential growth. It would be great to have a couple of partners who’ve done that before.

We’ll continue looking for great partners in that area [and] we also will look for acquisitions, but it’s less likely to be the front of our strategy. It’s more that if we see something that’s very attractive, then we will make room for that, but we’re not leading with that as our strategy. Our strategy is internal growth [and] building these lines of business.