Month: March 2022

One approach is to use marketing mix modeling, which allows CMOs to show business leadership how their efforts help the bottomline. “CFOs love it because a lot of analysis is done in silos,” said Jon Turner, global chief analytics officer at Mediahub, adding that those silos can add discrepancies into reporting. “With marketing mix modeling, you look holistically so it can’t explain more than what your sales actually are. It explains all the sales and allocates them to various marketing drivers.” 

Sure but what is marketing mix modeling?

It’s a way of using statistical analysis as a tool to look back at sales over a period of time to determine what exactly caused those sales. Essentially, it’s a way of helping marketers and agency execs contextualize what’s working and what’s not. For example, say a marketer who typically spends the majority of their ad dollars on TV reallocated that spending to digital channels and offered a discounted product price. If that approach accounted for higher sales figures, that marketer could then take that analysis, tweak their approach and optimize it to spend more of their budget on what’s working and less on what’s not.

Sounds like an obvious thing to do. How does it work? 

Marketers and agency execs input data to the analysis based on not only the marketing tactics they are using but each activity that a brand may deploy or encounter. So they’re not only accounting for digital, TV, out-of-home, radio, podcast and social media advertising but the price of a product and various promotions that are being run. Of course, that’s not all. That’d be too easy. They’re also accounting for things like inventory levels, seasonality, even shifting weather patterns — basically anything and everything that could impact sales. That data is then compared to previous sales data, often at least three years’ worth, to show how sales have changed and give a reason as to why they have changed. It’s correlation over causation.

If that sounds like a vague synopsis, well, that’s because it is one. The model is specified for each brand and has to account for anything that would cause sales peaks for valleys. 

OK so it’s just another attribution method. Big whoop. 

Well, yes and no. While it is a way for marketers to point to a reason for sales, it’s also a predictive model to help marketers make decisions for the months ahead. Marketers will use the analysis — often on a quarterly basis — to see the shifts that are happening and move dollars around to hopefully continue positive trends. Should the model show that a particular channel is working more, they’ll likely move more marketing dollars there. Take out-of-home, for example. As people returned to travel and commuting following lockdowns, it’s become a more useful channel again so marketers are spending more there.

But you just brought up the pandemic. Doesn’t that throw a wrench in the whole thing? 

In some ways but not really. That’s why marketers use a few years’ worth of data for marketing mix modeling. “When you have a shock to the system like Covid, having years’ worth of data becomes even more important,” explained Larry Davis-Swing, evp of advanced analytics at Spark Foundry. “By having plenty of data before it and plenty of data after you can start to understand and isolate all of the stuff you saw happening during Covid.”

Davis-Swing continued: “When markets shut down, we saw consumer behavior shift. People went from going to restaurants to doing takeout and delivery. We saw delivery explode. So we can account for that initial explosion, not because of advertising or marketing, but because consumers had to change their behavior.” 

So yes, data from mid-March 2020 to the end of 2020 — maybe even summer 2021 — is a bit of a wash as consumer behavior changed significantly, making it harder for predictions to come to bear. However, as people get back out of their homes and return to pre-pandemic activities, marketers can then weigh the data from 2019 higher and factor more normal behaviors in to help future predictions be more accurate.

That’s why you have to make sure the inputs are correct.

Exactly. Marketers and agency execs have to think through everything that might account for sales variation so the model can work properly and help with predicting how they should be allocating their marketing mix. If you have a model that’s trying to explain the variation in champagne sales, you’re going to have to input a peak on New Year’s and Valentine’s Day, explained Trisha Pascale, group director of analytics at The Many. If you don’t account for that, the model could be inaccurate and the predictive element of it useless.

Accounting for shifts in marketing and advertising strategies is important too. With the turnover of one CMO to another, which tends to happen every 18 months or so, there’s often a shift in strategy. If you haven’t accounted for more digital advertising or whatever the change may be in the marketing mix modeling, then it won’t show how that shift is working.

OK but aren’t you using a bunch of data. What about the death of the cookie? Won’t that be a problem?

Unlike multi-touch attribution, marketing mix modeling isn’t run at the consumer level, so the more personalized data that could go away with the death of the third-party cookie isn’t as important for marketing mix modeling. 

“We’re talking about really big trends, and we’re not building these models at the consumer level,” said Michael Salemme, svp of analytics at Zenith. “There are ways to run aggregate data to continue to run [marketing] mix modeling. We’re trying to explain changes in sales typically at a national or regional level, so we just need to know approximate exposures.”

But it remains a regional business — a sampling of major holding-company media agencies all took a pass on commenting, saying the efforts to organize high-school sports haven’t yet hit a level that attracts top-shelf national advertisers. Indeed, it’s hard to even find a stat indicating total high-school sports ad revenue, although a best guess is in the hundreds of millions of dollars still at this point. And not every state allows for multi-media rights deals to be cut with their high school sports associations.

That hasn’t stopped the companies looking to take media coverage to a more sophisticated level, most of which have been around for more than a decade, including PlayOn! Sports, PlayFly Sports Properties and others. And they’re beginning to attract a bigger caliber of advertiser, from Toyota regional dealerships connecting with high-school sports associations, to a Department of Defense deal through PlayFly that serves as a recruitment effort for academically and athletically above-average kids. 

Not unlike media agencies’ increased efforts to connect with influencers who may not have huge followings but whose relationship with their fans runs deep, buyers are looking to tap into the passions and loyalties around high-school sports.

“What’s been the most important is being able to connect with the communities, those families and supporters of the sports,” said Sydney Lathrop, management director at Saatchi & Saatchi, who has placed Toyota dealer associations into deals with high-school sports associations in Oregon, Idaho and elsewhere. “What we are seeing with the new kind of opportunities that exists at the high school level is really allowing us to do that. It’s not about forcing our branding our message on anyone but really being able to enhance that experience. For us, it’s really been about a community play.”

Many of the sponsorships go beyond traditional media placement. Lathrop said other elements like showing a Toyota key fob to get free parking or a better seat at a game, or having dealers celebrating student athletes of the week on their social channels, “allows our local dealers to support kids and families in their community. I’m really just taking it beyond those spots and dots to the event, the activation and engagement level.” She added that she’s seen her client increase spend by 25 percent, although she wouldn’t say how much that entails. 

Even though Pennsylvania doesn’t currently allow multi-media rights deals for its high-school sports associations, Marc Brownstein, president and CEO of Philadelphia-area agency Brownstein, said he would get his clients (which include NJM insurance and Lyft) into it if it were available. “You can get that intense level of passion that brands can connect with at a more affordable level,” said Brownstein. “And it shows they care about their community by supporting schools and athletes.”  

PlayFly’s vp and executive director Chuck Schmidt said the DoD deal, which he declined to assign a dollar value to, first rolled out in Washington state. (Playfly also engineers ad deals with high-school sports associations in Oregon, Idaho, California, Arizona, Nevada, New Mexico, Louisiana, Michigan and Virginia.) It’s essentially a recruitment tool for an elite unit. Some ad categories are verboten, he added, including firearms, alcohol and birth control.

Schmidt helped arrange a multi-year deal last fall in Louisiana with Ochsner Health, an area medical provider that went far beyond just ads as well, including internship opportunities, a medical sports advisory board to share knowledge and providing mental health services to student athletes during the coronavirus crisis. 

“The timing felt right as we as a health system have grown in key markets in Louisiana. There are championship events and networks within the Louisiana high school portfolio that can offer synergies with us,” said Dave Mueller, director of corporate sponsorships with Ochsner Health. “So the agreement helps us to continue our brand message, and be front and center at these key events, with coaches, athletic directors and parents alike throughout the year.”  

“I believe that within the next two to three years, we’re going to see continued growth in revenue, because of what’s being done to invest in helping states with technology, whether it’s an app or web capabilities,” said Schmidt. “Not only to provide a stream of revenue, but to help schools and the associations be more efficient in how they administer those sports.”

Added Christy Hedgpeth, Playfly’s new president and a former high-school and college basketball player: “This isn’t just about cash [for schools, which are often cash-strapped], this is about matching corporate partners to school bodies that provides products or services that solve problems. And we believe this area is very under-developed.” 

Color by numbers

The creator economy continues to glow red hot, with the latest stats to prove it from CreatorIQ (which, of course, has a vested interest in showing off how red hot it really is). CreatorIQ and its newly acquired unit Tribe Dynamics surveyed 150 brands and 200 influencers to determine budgets, compensation, activation formats and platforms, as well as the fast emergence of social commerce. Some highlights: 

• 66% of brands reported spending more on creator marketing in the past year.
• 48% of brands reported investing over $100,000 annually on creator marketing; 10% spent over $1 million. 
• 59% of brands cited “inadequate budgets,” and 66% cited inadequate personnel resources as a roadblock to success. 
• 94% of brands reported compensating at least a portion of their creator partners for sponsored content.
• Between 25%-75% of brands’ creator marketing budgets are dedicated to compensating influencers.
• 94% of brands provided influencers with either discount codes or affiliate links to share with followers.

Takeoff & landing

• IPG’s Mediahub landed Post Consumer Brands’ media business, while incumbent Spark Foundry didn’t defend the business.
• Indie full-service agency Cutwater won media and creative responsibilities for Hartz pet care brands.
• Digital media and marketing shop The Goodway Group acquired female-founded growth marketing firm Tuff, its first acquisition. 
• Ad-tech firm Gimbal/TrueX officially renamed itself Infillion, several months after the two companies merged. 

Direct quote

“Finding a way to match ad supply with viewing demand could make the experience better for consumers. It could create more predictable and stable media buys for broadcasters and publishers — versus the protracted transactions of the upfront dance. It could eliminate inefficient guarantee and liability transactions. And all that could create more growth and value creation with more ad inventory.”

— Marc Pritchard, chief brand officer at Procter & Gamble, in a keynote address at ANA’s Media conference.

Speed reading

• Digiday senior ad tech reporter Ronan Shields and I looked at the choices advertisers, agencies and publishers have to make in supporting quality journalism during the invasion of Ukraine.
• Senior media editor Tim Peterson rounds up how Disney’s long-reaching tentacles across media and data enable it to be a real competitor to the digital giants — and how Disney is harnessing that clout.
• Peterson also outlined the main questions buyers and sellers must address heading into the 2022 upfront buying season, which stands to (once again) be unlike any other in history.

Since then, Jacobs has made a name for himself as a prominent YouTuber and Twitch streamer in his own right, building a social media following of over 24 million across platforms, according to the data platform GEEIQ. Jacobs’ wheelhouse is Twitch, where he is one of the most-watched streamers, according to data pulled from Twitch Stats.

Brand partnerships are a standard practice for the creators in MrBeast’s sphere; MrBeast himself is infamous for lending his name to activations that have included a massive giveaway with Current and the launch of a restaurant chain, MrBeast Burger, in 2020. Jacobs is also getting into brand partnerships. Jacobs caught up with Digiday about how he balances his brand partnerships with the preferences of his community.

This interview has been lightly edited and condensed for clarity.

What considerations do you weigh when approached by a potential brand partner?

When a brand reaches out, it goes through waves of, like, “is it actually going to make it as a brand deal that I do?”

The first wave is the most important: is it going to fit into the type of content I like making? Is it going to fit into my brand as a whole? Because if not, then just immediately, right there, I’m going to cut it off before I even hear how much money it could be. I don’t want to be heartbroken. The second wave would be to hear what the deliverables are, what they’re lenient on and what they are hoping to get out of it, to see if it’s a good fit in that sense. And then the third wave would be hearing what their budget is, and if it fits with me.

What are examples of partnerships that were a good fit, and why?

A perfect example is that I had been talking to my management team about trying to give me rights to watch certain cartoons on my stream — like, doing watch parties on my stream. I’m super passionate about animation, and it’s something that my community knows, and through me, my community has a passion for animation as well. And then Adult Swim reached out to ask me to co-stream their festival as a sponsorship. So they gave me the entire schedule of the festival and told me to pick two hours out of it to do a watch party stream, and it lined up perfectly.

Another example would be that I did a partnership through StreamElements for Spotify Wrapped, which gives you a rundown of all the music that you’ve listened to on Spotify for the year. I go over my Spotify Wrapped in front of my stream, and they get to see my live reaction to figuring out what I’ve listened to the most, what artists I like and stuff like that. And it really made for a fun stream of, like, the streamer exposing himself, in a good way, to his community.

You became famous through YouTube, but now primarily stream on Twitch. How are these considerations different for each type of creator?

Compared to a YouTuber, or somebody that does short-form content, I think a livestreamer inherently shows who they are much more than most other content creators, just because they’re live for hours at a time. It’s not a hit record, then edit type thing; it’s all raw, live reactions. So, because of that, I think livestreamers are put in a spot where their sponsorships have to be a little bit more organic, or else it comes across more as selling out.

You’ve sold Karl-Jacobs-branded merchandise. How have you been able to turn yourself into a brand while maintaining a genuine connection to your community?

I’ve been very, very calculated in the way that I’ve tried to grow my community in a way that I can still be in touch with them. A bit way that I interact with my fan base, to try to get a good understanding of how they feel about certain types of content, is I have a private Twitter account that I keep at around 100,000 followers, which I use as a way to kind of weed out people that aren’t necessarily a fan of me — that just follow me. So, if I only open it a little bit at a time, then it’s only the actual, real, hardcore people in the community. To get a really good look at what the real fan base is looking for, in terms of content.

It’s almost like a market research group.

Exactly, yeah. I love that — I love A/B testing stuff, I love looking at direct cause-effect type things, so it’s perfect for that.

What are the demographics of your community — who is the prototypical Karl Jacobs viewer?

I’d say my demographic is generally teenagers and skews female, definitely. I’d say it’s kids to teenagers to young adults, but I know that’s a large range. I came from MrBeast — that’s where I originally had built my following, and that skews a little bit more male, and a little bit younger. Then, my Twitch community skews much more female and a little bit older. So that’s what I’m working with.

I know that brands kind of froth at the mouth for the kind of people that watch my stream. That’s almost a bigger reason for me to be more careful about what brands I work with because I know that it could have a lasting impact. And I’ve done a pretty good job building a community of people that really, genuinely trust me. They trust that whenever I give them content, it’s going to be good content and that whenever I bring up a sponsorship, it’s actually something that I genuinely back, to a degree.