Month: April 2022

Babylist, founded in 2011, started the brand account about eight months ago and has since gained more than 416,000 followers on the video app. Regularly, Babylist videos rack up thousands of views per post, occasionally going viral. One video of a father helping to deliver his child saw 8 million views.

“[One of the] top six marketing goals for Babylist is around growing TikTok,” Grant said. “Our plan is to spend a lot more than we are currently.”

By the end of the year, TikTok is expected to become one of Babylist’s top three advertising channels. Grant added that the baby brand is planning to invest significantly more ad dollars in TikTok than any other advertising channel this year. 

This year, Babylist’s TikTok spend will be slightly over 7% of the total marketing spend, up from the 2% of total marketing spend it was last year, said a spokesperson for the brand, who did not provide specific dollar amounts. According to Kantar, Babylist spent more than $291,000 on media in 2021, up from the $145,000 spent in 2020. Those figures do not include social spending as Kantar does not track those numbers. Ad-tracking firm Pathmatics reports that Babylist spent $5.1 million on Facebook and Instagram ads in 2021, slightly up from the $4.8 spent in 2020.

The baby brand’s TikTok strategy is two-fold, leveraging both paid and organic efforts. Videos are made up of user-generated content, creator content and videos produced in-house, per Grant.

Babylist’s target audience is made up of expecting parents, from anyone carrying a child to those adopting, fostering or using surrogates. To target those people and grow its user base, Grant says the company uses machine learning and TikTok’s targeting capabilities.

Babylist’s TikTok efforts aren’t relegated to driving direct sales. Instead, Grant says the team sees the platform as one that provides brand awareness, customer acquisition and sales. Success is measured by how many people signed up for a baby registry, she added. It’s a common theme in how many brands approach TikTok as a brand awareness channel as opposed to a performance marketing channel. In fact, most advertisers have yet to view the platform as another branding or performance channel similar to Facebook and Instagram, according to previous Digiday reporting. 

“We’re looking for people to hear about Babylist and sign up more,” she said. “You can’t put an exact number on that, but we do feel like that’s working and that’s driving results.”

Babylist isn’t alone in its TikTok efforts. Brands like L’Oréal, Dr. Squatch and Hotwire have beefed up both spend and content efforts to get in front of the platform’s growing audience. In fact, eMarketer reports that TikTok’s global ad revenues are expected to triple to $11.64 billion this year.

For the last two years, after gaining popularity during the pandemic lockdown, TikTok has continued to become a staple in media spending, even eating up more and more marketing dollars. Earlier this year, Digiday reported that not only is the ByteDance-owned company seeing more performance advertisers testing out the platform, but larger advertisers are spending more also.

Babylist may be on the right track in its refusal to depend on TikTok for sales and conversion, according to Glenn Ginsburg, president of influencer marketing agency QYOU media.

“There’s a happy medium where native and influencer content on social platforms consistently outperforms traditional ad units in view through, engagement and click-through,” Ginsburg said. “A growth marketing and content strategy can catapult DTC brands to a new level of awareness and relevance.”

Overall, Babylist’s Grant says the brand wants to double its video views and plans to continue to invest ad dollars in TikTok and expand its YouTube footprint. By the end of the year, Babylist hopes to reach more than a million TikTok followers.

Yang Adija, svp of digital league business operations, growth and innovation at Turner Sports may be considered to be in that latter group, but he has also spent the past four years creating different blockchain-based projects as well as testing different strategies for getting the media company’s audience interested in engaging with — or investing in — NFTs.

Here is how he did it.

The first iteration of non-fungible tokens was rooted in collectibles, according to Adija, meaning that similar to a baseball trading card or a painting from a gallery, the price of the collectible will be determined by the worth the buyer determines the object has.

“I think [collectibles] make a lot of sense because people are really able to more simply understand [the tangible nature] versus some of the other places where NFTs are going,” like smart contracts being used in business dealings or tickets to in-person and virtual events, he said during the Digiday Publishing Summit held at the Grand Hyatt in Vail, Colorado.

One of the more successful NFT collectibles that Turner Sports has been a part of came from its partnership with NBA Top Shot, digital collectibles consisting of video clips from professional basketball games.

“One of the great unlocks that we feel NFTs have allowed is that previously you couldn’t create the kind of scarcity that you can create now in the digital format. And by creating digital scarcity, you’re now able to have uniquely owned items that will have value on their own [which is] determined by the buyer, just like a paper trading card that has Michael Jordan on it. It’s going to be worth a certain amount and the digital trading card that has LeBron [James] will be worth a certain amount as well,” said Adija.

Sports fans — and, generally speaking, fashion and art enthusiasts — were the obvious first picks after identifying that collectible NFTs were a good starting point for blockchain experimentation, given their affinity for wanting to own a rare or one-of-a-kind item. But as more use cases for NFTs emerge and the value becomes less tied to personal interest, other cohorts within the Turner Sports audience have become attractive targets for new products that Adija’s team is launching.

“We quickly moved on to think about, ‘How do we create additional utility?’ We were looking to explore that with gamers now, [but] there was a bit of a challenge because within the gamer community, there’s a feeling of disrupting what they’re used to,” Adjia said.

To get around that, his team drew a line to another promising cohort — financial enthusiasts — a group that wants to associate value to their digital properties and see it appreciate by adding additional value over time.

The line drawn between gamers and financial enthusiasts manifested itself in an NFT-based video game that Adija’s team named Blockletes (pronounced like blockchain and athletes). 

The game allows users to play as golfers (the characters are NFTs themselves) and they accumulate value (or conversely lose value) as they compete in matches, improve equipment through purchases (also NFTs) and interact with other characters. Those character and equipment NFTs are then bought and sold within the game’s economy and can even be exchanged for USD. 

“You can start out as a novice, which will be more popular [and therefore more] available, and work your way up to a legend, which is a lot more scarce. You have to be more skilled to become a legend, or if it’s selling in the open market, you can acquire a legend [NFT] in the open market,” he said. 

The next test Adija’s team will be working on is giving audiences a new goal to work towards by actively engaging with the brand and with these new projects that is less about the monetary investment but more about exclusivity and community access.

“Although NFTs have been around for a number of years, it is still a very young space,” said Adija. “The way that I look at it is how do we provide value to our users. [NFTs] are simply an opportunity to transfer ownership of a digital item and the ability for us to create scarcity with that item. But it’s also programmable.” 

And the programmability is what becomes especially interesting to Adija’s team as they move beyond the collectible nature of the technology into adding value to content and audience participation. 

“Someone can collect a digital trading card, [then] let’s say they now go and watch our telecast of ‘Inside the NBA’ – we can now have that NFT unlock more value, because they are continuing to participate and engage with us as a whole,” Adija outlined. 

Similarly, Adija’s team is testing what a rewards program might look like that gives NFT owners access to exclusive content or events that other audiences don’t have access to. “And the really important thing for us is creating a community that is seeing the holistic value of an NFT,” he said.

And yet agitations with the upfront persist, particularly among ad buyers itching against the collar of their annual commitments. “The upfront is something that this time of year everyone is like, ‘Tear it down,’” said a second agency executive.

So, with the broadcast networks’ upfront presentations a month away, let’s look at the cases for and against the upfront for a sense of whether the annual buying model has become too big a part of the business to ever fade away. 

The case for the upfront

The upfront is the offspring of TV networks’ and advertisers’ mutual needs for security. TV networks want to know how much money from advertisers they can count on to offset the costs of the programming they pay for in order to attract the audiences that advertisers want to reach. Meanwhile, advertisers want to know they will be able to reach those audiences because TV remains the primary opportunity to reach a large, concurrent audience. 

As a result, the erosion in linear TV viewership — combined with the limitations major ad-supported streamers have put on their ad loads — has actually heightened the level of scarcity in TV’s inventory supply and urged more advertisers to participate in the upfront. “Our strategy [in 2021] was, for clients that didn’t participate in the upfront in the past, to get them into the upfront,” said a third agency executive.

And then there is the financial upside. If TV and streaming continue to be the most cost-effective way of reaching a large audience — especially in the face of Facebook’s rising ad prices and dropping performance — then it will continue to be the closest option to a must-buy for advertisers. That puts advertisers on the hunt for the lowest possible price. The best bargains can usually be found in the upfront market where TV networks and streaming services offer rates that can range from 40% to 80% lower than what advertisers can secure in the so-called “scatter” market, where inventory can be purchased outside of the upfront’s annual commitments.

“TV still delivers a lot of people at a really cheap relative price point,” said a TV network executive. “It’d be hard to find alternatives. Last year, if the alternatives were better, why would [advertisers] pay plus-20 [percent price increases in the upfront]?”

The case against the upfront

Those 20%-plus price increases distill the primary case against the upfront from the perspective of buyers. The annual rate hikes have become a regular aspect of the upfront and are symptomatic of the aforementioned case for the upfront leading to the development of a market that favors the sellers.

“There’s a bit of overcommitting in an upfront model because of the fear of missing out [on inventory] and fear of inflation [in ad prices],” said the second agency executive.

That overcommitment corresponds with angst among advertisers about being locked into these annual commitments. While upfront deals feature more wiggle room for advertisers in light of advertisers’ flexibility demands from the past two years, they are still more stringent than is comfortable for some marketers in an era when digital ad inventory can be purchased in real-time auctions.

No less than P&G chief brand officer Marc Pritchard called for an end to the upfront’s audience guarantee model in a speech at an Association of National Advertisers event in March. “We don’t believe the typical upfront process is advantageous to advertisers,” Pritchard said, according to Ad Age.

He’s not wrong, and Pritchard has a pretty big saber to rattle with P&G’s budget. But he issued a similar call for the upfront to shift to a calendar-year model in 2020 as chairman of the ANA — and then P&G proceeded to participate in the traditional broadcast-year upfront window.

So long as the sellers can retain advertisers’ confidence in the sellers’ abilities to deliver, in the TV network executive’s words, “a lot of people at a relatively cheap price point, they will be retain a high level of advertiser demand that will put them in position to push up that price point. Theoretically, there would be a limit to that price point. But considering that agency executives are expecting another round of double-digit rate hikes in this year’s upfront negotiations, the market appears clear of the ceiling so far.

“We do need a buyer’s market, which it doesn’t seem like there’s ever going to be one again. It certainly won’t be this year,” said the second agency executive.

And it probably won’t be next year either. You may have noticed by now that the case against the upfront has come purely from the buyers’ perspective. That’s because there isn’t really a case against the upfront for sellers. 

Sure, TV networks and streaming services may put themselves in a position of accumulating debt to advertisers for falling short of audience guarantees. But historically sellers have been able to carry that debt across multiple quarters and keep their hold on that revenue. And if advertisers were reaching a breaking point with the debts that had piled up, that would have likely come to pass in last year’s upfront given all the pandemic-induced shifts in programming, audience attention and ad spend. And yet the sellers have found ways to bend to advertisers’ flexibility demands without breaking the upfront model.

“We understand making a commitment 16, 17 months out has its challenges. We’re open to various forms of flexibility. What came back loud and clear last year is there’s still a value to get access to inventory in an upfront-like timeline,” said a second TV network executive.

Earlier this year Google confirmed what many had thought inevitable when it confirmed that it would introduce its Privacy Sandbox concepts to the Android mobile operating system — a move that will, somewhat, ape the data limitations on Apple’s iOS.

Unsurprisingly, all tiers of the industry that felt the burn of Apple’s iOS 14 — a move that is estimated to have wiped a combined $16 billion in revenues from the likes of Meta, Twitter, and YouTube in less than 12-months — are concerned Google’s plans will have a similar impact.

However, Google’s reliance on advertising revenue, not to mention the regulatory travails it faces, means it must tread a more delicate path with its Privacy Sandbox proposals for Chrome often the subject of bruising peer review as they advance.

The pillars of Privacy Sandbox on Android

The nascent plans for Privacy Sandbox on Android were first unfurled in February 2022 with much aplomb, but little detail, and since then those stewarding the mobile OS’s privacy scheme have better fleshed out their proposals, according to sources familiar with their conversations.

At present, Privacy Sandbox on Android contains a number of tent-pole discussion points that largely reflect the proposals for audience targeting and tracking in Google Chrome after third-party cookies are retired. These include recommendations for continued interest-based targeting known as the Topics API, a proposal for retargeting Android device users dubbed FLEDGE, as well as a proposed means of measuring campaign performance with limited data signals called Attribution Reporting.

Google’s Privacy Sandbox proposals in Chrome have been met with mixed feedback, its early FLoC proposition is now KO’d, with the outcome of those continuing discussions far from certain.

Proposals to police third-party code

However, delegates at this week’s App Growth Summit in New York City effused over early proposals to police third-party code on apps submitted to Android app outlets, dubbed SDK Runtime, with some speculating that Apple may look to emulate it.

Currently, Google’s policy effectively lets third-party SDK developers, such as in-app measurement companies, share the same permissions as their Android app publishers. Such a policy lets third-party service developers better integrate their SDKs with code on their client’s Android app. From here, the host developer submits the packaged app for distribution via an app store.

However, it also opens the door for bad actors to infect the wider ecosystem as it creates the potential for undisclosed user data collection by third-party SDK providers without the knowledge of a host publisher. This is because publishers often rely on the self-reporting of their SDK providers as they don’t always have the resources required to regularly verify what data their partners are collecting.

“In Android 13, we plan to add a new platform capability that allows third-party SDKs to run in a dedicated runtime environment called the SDK Runtime,” according to documentation from Google. It goes on to detail how the initial version of SDK Runtime will focus on supporting advertising-related SDKs, including ad serving, measurement, as well as fraud and abuse detection.

A Google spokesperson informed Digiday that the new set of technologies is optional for SDK developers as the Privacy Sandbox proposals advance.

Removing publishers’ headaches?

During this week’s App Growth Summit, keynote speaker Mike Brooks, svp of revenue at WeatherBug, described the proposal as establishing a repository of privacy-compliant SDKs” that effectively takes responsibility for SDK management as potentially “groundbreaking.”

He added, “So, it’s basically a [proposed] library where every partner submits their SDK and Google combs through it and has to approve it, so there’s no bad code in it … then all the publisher has to do is flip a switch and the SDK is integrated.”

SDK integrations are often complicated tasks for app publishers with the process of vetting third-party code often delaying much-needed app updates. “You often find that there’s a two-to-three month delay due to queueing of SDK-integrations, then you just find there’s so much business you haven’t been able to do,” Brooks told Digiday.

Fellow AGS keynote speaker, Trevor Hamilton, managing director, Americas, Kochava, described Privacy Sandbox’s proposals as a scaled developer-friendly proposal, adding that it is critical for publishers to understand the surveillance capabilities of their partners before going to market as users don’t often screen the terms and conditions they consent to.

“There’s a small percentage of people that really dig into the details and really understand it,” he told conference attendees. “Just like with cookie policies, I think people are just gonna reach for that ‘X’ as fast as they can to continue their content experiences as fluidly as possible.”

Will Apple imitate?

Speaking separately at this week’s IAPP Global Privacy Summit, Apple CEO Tim Cook, advocated centralized control of app developers’ partners arguing that less rigid controls meant “that data-hungry companies would be able to avoid our privacy rules” and track iPhone users against their will.

WeatherBug’s Brooks, along with several other conference attendees who requested anonymity due to their employers’ PR policies, believe that Apple may potentially replicate Google’s approach, especially as the amount of data app developers collect from phone users comes under the microscope.

Although Kevin Susman, vp brand and communications at MATRIXX Software, said it’s difficult to compare how Apple and Google treat privacy. He observed that it seems Google is trying to apply a decentralized privacy strategy as opposed to Apple’s walled-garden approach.

“Apple makes money from the developers, now, it also makes huge ads money monetizing privacy,” he added in an emailed statement. “This gets to the heart of the question — will Apple follow Google’s privacy approach for devs [sic] who opt out of Apple’s ecosystem and pursue side-loading or an alternative app store? I don’t think so, at least not for a while because Apple has a walled garden in its DNA … What I think they will do is essentially wall off third-party devs [sic] that opt out of Apple’s App Store in the name of security.”