Month: July 2022

Still, according to several sources reached for this story, OOH as an industry still only attracts about 4 percent of media budgets, a number that’s quite low for the second oldest media medium besides print. 

That’s why Geopath, an industry-funded organization charged with standardizing and improving the state of measurement for OOH players — traditional and digital in all forms — is feverishly working to advance its measurement to be closer to real-time, and able to be considered by media planners and buyers alongside other media in omnichannel budgets. 

Geopath used to be known as the rather uninteresting name of Traffic Audit Bureau until 2016, and its mission was to simply count the traffic passing the billboards of its member companies, the largest three remain Lamar, Clear Channel Outdoor and Outfront. 

Under current president Dylan Mabin, who’s been with Geopath since 2008, when it was still TAB, the mission is clear: get OOH measurement standards up to date and as aligned with other media options available to buyers and planners, while shortening the time frame of data reporting that can be used across the landscape. 

Geopath worked with PwC to establish what Mabin called four “imperatives” for the industry. 

• Strong standards and definitions;
• Transparent audience impressions methodology;
• A universal inventory database; 
• Ensuring all of the above are interconnected. 

“We [need to] connect it to all the different demand side and supply side [companies]  and make sure that planners are aware of the fact that this data now exists for out of home,” said Mabin. “It’s inherent in those programmatic systems — not just programmatic for digital, but programmatic for any sort of efficiency.”

Can what Geopath is doing with several small ad tech and measurement partners (it only has a staff of less than 20) make a difference in growing OOH’s share of budget from its measly 4 percent? 

Michael Lieberman, U.S. CEO of Kinetic Worldwide, WPP’s OOH investment arm, noted that when it comes to national advertisers, that 4 percent is more like 2 percent, since so much of OOH is local. That said, he does think Geopath is getting the job done. 

“We’ve got fantastic industry support, all pushing and agreeing that this is the right direction,” said Lieberman. “We understand as an industry that if we want to grow, this is essential and required, whether you sit on the agency side, the media on our side, the industry bodies — our partners at the OAAA [Out-of-home Ad Association of America] and DPAA [Digital Place-based Ad Association] … So yes, I think we’re at a point where everyone’s rowing in the same direction.”

Lieberman said he’s put some of the advances Geopath has made in measurement to use with clients, and seen strong results with food and personal-care CPG brands. “We’ve run five different planning models, and in each one, we’ve gone anywhere from the 4 percent baseline allocation of where we sit as an industry to as high as 30 percent,” he said.

DPAA president and CEO Barry Frey recently signed Geopath to be a member “so we can all be aligned,” he said. “I definitely think it will help raise our rightful share of the omnichannel market because of the data information they’re amassing. They’re becoming a core basis of information for our industry.” 

Not every DPAA member has signed on to Geopath. One company, a digital OOH video player whose CEO spoke with Digiday on condition of anonymity, said he prefers to use another measurement provider in part because the name Geopath doesn’t necessarily connote industry expertise. “Saying we’re measured by [a major, recognizable measurement firm] makes the measurement part of a pitch discussion a 30-second part of a meeting versus a 30 minute meeting,” said the CEO. 

But the CEO was quick to add he thinks Mabin is on the right path. “I think the opportunity for Geopath is to create something that’s a lot more portable than it’s historically been, so outdoor can have an input into an agency platform or to comScore or Nielsen” or other measurement platforms, he said.

“We’ve seen the stats where there is an initial interest curve,” said Vincent Cirel, chief technology officer at Gannett. “Everybody was implementing and experimenting with AR and VR. Now there’s a bit of a retrenchment, backing away from it. That’s because people have played with it. They’ve learned something and now they’re trying to figure out the best way to monetize that.” 

With the U.S. augmented, virtual and mixed reality market worth $28 billion in 2021 and projected to reach more than $250 billion by 2028, according to Statista, publishers have a strong incentive to find a solution to that problem and to consider investing more in both technologies. And with companies like Meta and Google spending more to build out virtual and augmented reality tools, improving hardware and software for headsets and smart lenses and glasses, these virtual and mixed environments are being primed for publisher participation.

Despite often being grouped together for having similar technical foundations, virtual reality (VR) and augmented reality (AR) are two distinct technologies. For publishers, in particular, they offer unique opportunities: VR — which includes 360-degree video — allows for immersive storytelling and community experiences – and the ability to place ads in a virtual space; AR lends itself more readily to marketer applications, like allowing consumers to virtually try on clothing or makeup, or overlay a car into a driveway to gauge its size — but it offers publishers the ability to overlay data and insights on real-world surroundings. 

The pandemic further propelled the usage of and interest in these technologies since VR and AR offered potential solutions for people to remotely gather when in-person events were canceled – though success has so far been mixed.

For this report, Digiday+ Research surveyed 388 industry professionals, including publishers, agencies, brands and retailers, to uncover how they’re currently using AR and VR – and how they plan to incorporate the technologies in the future.

• The number of publishers using VR and AR has decreased significantly since 2017.
• More than 50% of publishers had used some type of VR in 2017, but less than 20% do so now. 
• Publishers use VR primarily to create entertaining experiences and as a new revenue stream, but the majority no longer think it is relevant to their business.
• Meta-owned platforms are the main host platforms for VR, with fewer disruptors in the space compared to AR. 
• Less than 15% of publishers use AR in 2022, down from nearly 20% in 2017. 
• Even though publishers have decreased use of AR, marketers are using it more, indicating that publishers may have to build out AR capabilities to create better ad experiences in the future. 
• All survey respondents have continued to use AR mainly for entertainment purposes, with social media and camera filters being the most-used applications, and almost half of respondents using AR for gaming.
• Owned-and-operated platforms were the primary host space for AR technology in 2017 but have fallen in favor of third-party platforms. 
• Meta-owned platforms top the list of platforms on which all respondents host AR technology.

The number of publishers using VR and AR has decreased significantly in the last five years. In particular, publisher use of VR has dropped steeply, down 34 percentage points from 2017, when 51% of publisher respondents said they used some type of VR, to just 17% in 2022. The decrease may be surprising considering that VR is well-suited for publishers’ storytelling needs and, as Digiday noted in 2017, publishers everywhere were giving VR a shot. At the time, The New York Times had received wide acclaim for an immersive piece on children displaced by war, and the Financial Times made a splash with an Olympics-related exploration of the landscape of Rio de Janeiro.

However, the 34 percentage-point drop is likely due to a combination of the technology’s novelty having worn off a bit, high cost of implementation and slow user adoption rates. “Early on, with things like Google Cardboard [headsets], we were trying to do VR with our phones, and it just doesn’t work,” said Adam Simon, executive director for IPG Media Lab. “That was fun, the first time we did it, but no one did it more than a handful of times. It’s too much of an ask for users, and the quality was not good enough.”

On the other hand, publisher use of AR has declined less precipitously since 2017, down just five percentage points. But adoption rates of AR were not high for publishers in the first place, with only 18% of publishers using the technology when Digiday surveyed them in 2017 versus 13% in 2022. Five years ago, Digiday found that publishers’ lukewarm attitude toward the technology came from a lack of utility, with some publishers wondering whether AR could tell a story better than already existing technology like interactive graphs or images. 

Simon said he’s noticed a decline in the amount of strategy and consulting the company does around both technologies since 2017. “We used to do a ton of in-market activations,” he said. “Now, we do maybe one every two months, a handful of them a year.”

When publishers first began experimenting with VR, it was anticipated that they would largely use the technology to provide immersive storytelling experiences for their audiences and to place ads within those environments — virtual extensions of two key publisher services. 

Some news organizations are giving users the option to engage in virtual environments or 360-degree video livestreams to experience a news event rather than just read about it. The BBC, for example, has a unit within its research and development division devoted to building its VR and 360-degree video capabilities to enhance its journalism, narrative and educational content. Most larger media outlets have experimented with the technology in recent years. 

“Almost everybody this year is talking, directly or indirectly, about this concept of immersive journalism and what that looks like for the future,” said Gannett’s Cirel. “If you think back 20 or 25 years, the news was [watching] CNN or reading a newspaper. Now that’s evolved into the web, mobile and Web3 among other things.” 

Cirel said the technological landscape is primed for expansion, giving consumers the opportunity to dip in and out of various virtual news experiences. For example, a user could potentially follow links from a news report about Parliament to a virtual tour of the legislative gathering, or hop into a 360-degree immersive travel experience of London. 

“One story can lead [somewhere else] when it comes to storytelling and immersive journalism,” he said. “The tentacles of a story can expand out and branch into other domains, and technology hasn’t been prepared to deliver a solution until now. Current and forthcoming generations are going to understand and consume storytelling and news in completely different ways than have been done historically.”

In a similar vein, many publishers who do currently offer VR activations are using the technology to provide another layer to journalistic storytelling: entertainment. 77% of surveyed publishers said they use VR to create entertaining experiences, and 46% use it as a new revenue stream, in addition to the more traditional ones like selling ad space and tickets for events. 

Publisher Blavity has used its virtual conferences to generate revenue from sponsored ads and attendee fees, while at the same time providing educational experiences. The company said it saw an uptick in attendance and sponsorship – and therefore revenue – year over year: Ticket prices increased between 57-75%, and the number of sponsors went up from 120 in 2020 to 170 in 2021. 
Blavity’s second virtual AfroTech conference hosted on eXp World Holdings’ virtual world platform included everything from a digital job expo hall and program stages to avatars designed to resemble the real-life conference attendees, including incorporating a full range of skin tones, hair styles, facial features and outfits that users could choose from to build their custom characters.

During the pandemic, Complex Networks, owned by BuzzFeed, similarly shifted its in-person ComplexCon fashion and music festival to a VR entertainment event, ComplexLand. While largely seen at the time as options of last resort, these experimental virtual environments offered the chance to continue having large gatherings with a real sense of presence without the in-person health risks. Neil Wright, head of experiential for Complex Networks, said the company wanted not only to push the boundaries of technology beyond a simple video call by creating a virtual experience, but also maintain audience engagement and generate a revenue stream for brands that relied on ComplexCon for a portion of their yearly profits. 

“It is a brand play for engagement of both our brand partners, the energy brands or streetwear brands, as well as attendees,” he said. “But also it is a pretty solid revenue opportunity for us with our clients as well. As we evolve it, there are unique opportunities we haven’t really scraped the surface of … Is it a video game? Is it e-commerce? Actually, it’s all of that. It’s really been interesting to see how fast technology is moving across the board with virtual environments and virtual opportunities. Each year, the conversations become easier because these activations and platforms are more commonplace marketing or commerce tactics at this point.”

Virtual events like ComplexLand and Blavity’s AfroTech conference offer glimpses of what the future might hold for the metaverse. The metaverse is defined as a “successor state” to the modern internet that will allow users – and companies – to generate and own content and assets that can then be distributed freely across the touchpoints and platforms that will compose a widely accessible and connected digital world. Many of the nodes composing this digital world will be virtual – or at least that’s the current plan. 

But for now, the metaverse is an abstract potential hovering over an emerging set of siloed virtual islands. Current online platforms allow users to move about somewhat freely within the confines of specific services, but limit interoperability between platforms. Right now, even so-called metaverse precursors such as video game “Fortnite” don’t allow players to recreate their own user-generated content or carry over collected assets to many other platforms. 

The metaverse is in its infancy, but publishers would be wise to start experimenting with it now, according to Gannett’s Cirel. “Central to the [metaverse] is VR and to a lesser extent, but it will grow, is AR,” he said. “Particularly when it comes to storytelling, you’ve got the reality of the world, and that’s the story that you’re telling. How do you augment that reality with different factoids, but really come under the broader umbrella of immersive journalism? That’s the secret sauce, the recipe that everybody’s got to figure out.”

Mass media owner and publisher Hearst isn’t waiting: They hope to sail their virtual airpship straight into the metaverse – whether it exists right now or not – and gain customers and create buzz at the same time. New customer acquisition and creating buzz are tied as the third-most-popular uses of VR among publishers, with 31% saying they use VR for those reasons.

Hearst launched the airship in the fall of 2021 to show new and future clients the potential for building immersive, co-branded VR experiences in the metaverse, hopefully resulting in branding partnerships down the road. Although, Hearst’s Nancy Berger, svp, publishing director and CRO of the Youth & Wellness Group, told Digiday the airship was not “necessarily going to be about revenue generation.”

Hearst, and other companies eager to place ads within virtual environments, need not fret about whether users will be receptive to the advertising, according to IPG Media Lab’s Simon. “We’ve seen in gaming in general that users and gamers don’t mind when there’s branding in places where there would be branding in the real world,” he said. “It’s totally normal, and they’re totally fine with that.”

Vadim Supitskiy, chief technology officer at business magazine Forbes, says there are advantages to using VR for events and that continued experimentation and buzz creation within virtual spaces is crucial for growth. Forbes, for example, launched a virtual billionaires NFT collection to engage consumers and has hosted several internal VR events for employees. 

“We’ll need to continue building out those experiences to make them more realistic and interactive,” Supitskiy said. “A lot of things are done to gain buzz and to get some publicity, but it’s important for publishers to experiment with the technologies and really start engaging their audiences in the space. It will change the way we interact. It will be the future. And if you don’t start now, you will be left behind.”

Although publishers are experimenting with how best to use VR, the platforms that host VR experiences haven’t shifted much from 2017 to 2022. Owned-and-operated platforms, Meta-owned platforms and Google’s YouTube continue to be the main VR hosts among all survey respondents. That’s notable when compared to AR, which had greater shifts in host platforms from 2017 to 2022, with new players like TikTok overtaking legacy platforms.

VR’s lack of platform change is likely due to few players investing in VR tools, aside from Meta, which is betting big – including the name change – by essentially subsidizing the technologies to encourage adoption. Meta’s first-quarter 2022 earnings report showed that the company spent $3.7 billion on its VR and AR division, Reality Labs – though it took in only $700 million in revenue.

Perhaps it’s not surprising then that a Meta-owned platform overtook owned-and-operated platforms to become VR’s main player. Quest took the first-place spot with 45% of survey respondents saying they use the platform to reach VR consumers. Owned-and-operated platforms fell to a close second place at 42%; but they also had the greatest overall decrease in usage, down from 71% percent in 2017. Meta-owned platform Facebook came in third at 39%, and YouTube retained a healthy percent of usage at fourth place with 31% of respondents saying they use the platform for VR versus 40% in 2017.

Despite investments in VR tools by companies like Meta, VR apps and services still struggle to reach consumers. “When you look at [Facebook’s] engagement on owned-and-operated apps like Horizon Worlds, they only have about 300,000 people on a regular basis,” said IPG Media Lab’s Simon. “Facebook is buying up a lot of companies to try to jumpstart [the gaming market]. But the thing that will start to expand that, is when we see companies like Apple moving into the space and bringing a pathway to bring some of the smartphone apps into the headset space.”

While VR has the potential to be more immediately endemic to a publisher’s mission, AR – which layers digital elements over a real-world view, often through a camera lens – can be harder for publishers to apply. The technology lends itself more readily to marketer applications, like allowing consumers to virtually try on clothing or makeup, or overlay a piece of furniture into a living space before deciding whether to buy it. In fact, product demonstration via virtual try-on and real-world overlay has seen the greatest increase in AR usage in the past five years.

But for publishers, AR thus far hasn’t proven an effective tool to disseminate information, and fewer publishers are using it now than were five years ago. Only 13% of publisher respondents said they use AR in 2022, down five percentage points from 2017 when 18% of publishers reported using the technology. And fewer publishers overall are using AR than VR. One concern for publishers, and a likely barrier to adoption, is how to use AR to present information or tell a story better than can be done with existing technology like on-screen interactive graphs or images. 

The anticipated boom of AR devices, like smart lenses for eyeglasses, has yet to materialize, although the technology has become more accessible on smartphones through apps’ use of their cameras. “You can have a decent AR experience on mobile,” said IPG Media Lab’s Simon. “You won’t have longer experiences, but [you can have] snackable, tactile content….Even if the tech is not quite there yet, it’s getting there and it’s improving every year.”

What usage there is remains largely hedonic, and entertainment purposes continue to be some of the top reasons all respondents use AR, with social media and camera filters taking the No. 1 spot and almost half of respondents using AR for gaming. And, while publishers are using AR less than they did five years ago, Digiday’s survey revealed that marketers have been using it more – and the next installment of this series examines marketers’ use of AR and VR. 

AR also has a large addressable market. Snapchat alone, for example, has over 250 million users engaging with AR every day on average. Increased marketer use combined with vast audience numbers signals that publishers might have to build out their AR capabilities moving forward to allow for better ad experiences. 

Complex Networks, for one, experimented with AR through a partnership with Snapchat at its return to an in-person, reduced-capacity ComplexCon in November 2021. “People physically at the event would hold up their AR filter and see [virtual] ComplexLand through it,” said Wright. “So it was like a multiverse, metaverse if you will. It combined both.

“And we had shopping capabilities. When [product] drops happen within [virtual] ComplexLand, they fall from the sky and your avatar has to go chase them. It’s very similar to ComplexCon, where participants would hold up the filter and [products] would drop from the sky as AR creative artwork. Those are really interesting ways you can leverage this technology, especially if you’re doing a physical event and there is reduced capacity because of Covid. People can still participate.”

But there are pockets of more journalistic pursuits. The New York Times, for example, has doubled down on AR, creating an AR division or “AR Lab” in collaboration with Meta, which it says is devoted to AR-driven reporting on Instagram. Many of The New York Times’ AR news reports focus on demonstrating specific topics or events, for example, skiers executing jumps at the winter Olympics or masks blocking Covid particles by overlaying virtual models enacting an example into the readers’ space – such as a living room – using smartphone cameras. 

The publication has also created a hub page on its website to house reports that use AR for storytelling. And, perhaps bucking the trend of favoring VR over AR, the publication also did away with its in-house VR app, though users can still access VR content via mobile devices on the Times’ website, among other ways.

Sporting events may be one area in which publishers can use AR equally as well as – if not better than – the written word to cover news. Like The New York Times, The Washington Post and USA Today used AR to report on the summer 2021 Olympics. The Post, for example, tapped into the technology to show Olympic climber Brooke Raboutou climbing a 15-meter wall in about 10 seconds. Users scanned a QR code within a news story to see the event in their own space at scale. 

For Post editors, it came down to how to best tell the story. “We could write a long paragraph on sprinting up a 50-meter wall in 10 seconds, but we try to figure out how to show that to you, in your own space, how tall 50 meters is,” said Elite Truong, director of strategic initiatives at The Post. 
Political coverage has also benefited from the use of AR, in some cases providing a sense of proximity to a candidate. Verizon Media (since acquired by Apollo Global Management and rebranded as Yahoo) and Gannett partnered to create an AR viewing experience of an interview with then presidential candidate Andrew Yang in 2019. USA Today’s and Yahoo News’ apps hosted the experience. Readers could hear Yang discuss issues while watching a 3D version of the candidate, whose image was overlaid on top of the reader’s own surroundings.

Unlike VR, which hasn’t had many changes in host platforms over the last five years, AR platform deployment has shifted massively since 2017, and mostly in one direction. Meta-owned platforms dethroned Snapchat to now top the list of platforms that host AR content among all survey respondents — a distinction Meta also holds among VR host platforms. Owned-and-operated platforms, which were by far the primary AR hosts in 2017, have fallen down the list to third place, in favor of third-party platforms. 

Meta’s Instagram is the leading AR host platform (and the leading third-party platform), taking the No. 1 spot with 64% of survey respondents saying they produce content for the platform. Facebook, also owned by Meta, came in second at 44%. Snapchat, which held the first-place spot among third-party platforms (and was second overall) five years ago, fell to fifth overall with 33% of respondents using the platform in 2022. New entrant TikTok overtook Snapchat by a small margin, with 34% producing content for the video platform. Amazon and Google’s YouTube and ARCore rounded out the list.

Notably, owned-and-operated platforms shrunk as the primary host space for AR technology, dropping from the No. 1 slot in 2017 with 76% of respondents using them at the time to third place in 2022 at 36%. One reason for the drop may be that as AR technology becomes more widely available and third-party platforms build out the technology, respondents need to rely less on their own first-party capabilities – as they may have for early skunkworks experiments. And compared to VR, which depends on potentially cost-prohibitive headsets, AR offers ease of consumer access through ubiquitous smartphone cameras, reachable by scores of apps. 

“We do not have mainstream augmented headsets yet,” said IPG Media Lab’s Simon. “We have [Microsoft] HoloLens, which are high-end and enterprise-focused. But we can get a really good AR experience for bite-sized pieces of content on our phones.”

This shift in technology accessibility was also reflected in how respondents are building their AR applications. In Digiday’s survey, the majority of respondents favored working with a third-party vendor (48%) or a mix of third-party vendors and in-house offerings (31%) to build AR apps. Only 21% of respondents favored building AR applications in-house.

Consumer interest in AR and VR appears to be growing, with the worldwide market for AR and VR headsets increasing 92.1% in 2021 over the prior year and headset shipments reaching 11.2 million units, according to the International Data Corporation (IDC). But both technologies face challenges to widespread publisher adoption, as publishers struggle to find appropriate, repeatable and monetizable ways to use the technologies for storytelling and more. 

Sixty-two percent of publisher respondents who are not currently using VR said VR was not relevant to their business, and 59% who are not currently using AR said the same about AR. When asked why they weren’t investing in the technologies, publishers cited a lack of relevance as the main reason for not spending. 

Secondarily, low consumer adoption of and interest in the technologies kept publishers from committing resources. Consumers tend to use VR mainly for gaming, and they use AR to virtually try on products like makeup or place items like artwork in their homes. Most do not use the technologies to enhance their consumption of news or even feature articles and other web content, a primary publisher offering. 

While many publishers find neither AR nor VR technologies immediately relevant to their businesses in 2022, 36% of publishers not currently using AR still plan to invest in AR in the future, and 33% not currently using VR plan to invest in the future. 

“The willingness of companies to invest, or how they’re going to invest, is not really any different for AR or VR … than it was for any technologies that have emerged over the last 20 years,” said Gannett’s Cirel. “In the late 1990s, we were asking the same question about the web. The business fundamentals don’t change. How much is the investment? What is the ROI?” 

Cirel noted that beyond devoting funds to AR and VR, publishers who find the most success with the technologies in the future will be the companies who approach them from a long-term perspective rather than just to create momentary excitement. 

“Lots of companies put out press releases to generate buzz … and 10 to 15 minutes after the press release goes out [they’re looking] at the financial sites to see if it moved the needle on share price,” Cirel said. “Companies are throwing a bunch of stuff against the wall to see what might stick. But the companies that take their time — they do the proper foundational business analytics — those are the companies that are going to benefit the most from these emerging technologies.”

When it came to VR, publishers selected the cost of building and implementing the technology as the third most important reason they aren’t laying out funds, putting it above lack of technical skills as a barrier – though cost and technical skills are linked through hiring and spending on specialists to work on the technology. Developing virtual apps can be costly, with companies spending tens of thousands of dollars depending on software and which platform they’re targeting. A lack of spending for development leads to a lack of technical skills.

Joe Ferencz, CEO at video game development company Gamefam, pointed out that larger companies like Meta and Google are investing in VR technology and platform build-out and he thinks widespread use of the technology will occur. But content creation — and this where publishers have a crucial role — will need to keep pace. Without strong content, VR isn’t yet at a stage to attract mass users.

“Whether Meta or other competitors bring VR hardware to the market, eventually the hardware will find wider adoption,” he said. “It might take three to five years, or even 10 years, but we will get there with mass-market VR. For Meta to build enough high-quality content to meet demand is not realistic. If you look at big companies, like Google, they’re not in the content business. They’re always in the platform business [because] making content is hard and isn’t as scalable.” 

Meanwhile, user headsets can be out of financial reach for many consumers. Meta’s subsidized Quest 2 starts at around $300, while premium headsets can range up to $1,000 or more. The Quest 2 was the most popular headset purchased in 2021, with 78% share of the combined AR and VR market, according to IDC. But as IPG Media Lab’s Simon noted, the overall number of consumers investing in the technology is minor compared to market size. 

“VR right now is stuck in a weird limbo,” he said. “The total addressable market [for Facebook, for example] is about 10 million people. But we also know a lot of VR headsets aren’t in active use….People went through a bit of interest in things like [Google] Cardboard, and that’s not something consumers are interested in anymore. AR is just easier for people to dip into.”

AR technology, however, has moved past the basic stages of platform build-out and has become more accessible to consumers via their smartphones, making adoption much smoother for companies. According to Artillery Intelligence, there are currently about 1.1 billion AR-capable devices, a number expected to grow to 1.73 billion by 2024. 

Because of increasing user access to AR via smartphone apps, publishers don’t have to spend as much to develop AR features. They can focus instead on creating content to attract users, although much of that content still lacks sophistication. As seen in the survey results, publishers placed the cost of building and implementing the technology (14%) slightly lower on their list of reasons not to invest in AR than they placed lack of technical knowledge (16%). 

Despite the proliferation of smartphones, Simon pointed out that distribution for AR activations can be a challenge. “As we look towards more dedicated hardware for AR, one of the questions is whether we are going to have an app store model,” he said. “[Software developer] Niantic is definitely pushing the idea of channels, which I think is right. If we fast forward 10 years, users could have an AR device they wear all day, in which they could turn on or off different information channels, for example, restaurant reviews or a game they want to engage with.”

As the technology behind VR grows and companies like Meta continue to spend to create more accessible options for users and publishers, adoption may increase among both. Still, VR will likely need to achieve the same ease of access that AR has discovered, particularly through the release of new, less obtrusive hardware, before widespread publisher adoption can take hold. But the draw of potential revenue can move mountains, and with the market size for AR and VR expected to increase by a compound annual growth rate of 41.6% from 2021 to 2030, according to Allied Market Research, publishers may find themselves drawn to both technologies in the not too distant future.

Google searches related to allergies in the U.S. have fluctuated over the last year, especially as new variants have been introduced amid the Covid-19 pandemic. The query for “Covid or allergies,” as an example, seemed to peak nearly a year ago, but rose again as cases in the U.S. were rising in December and again in mid-May amid another rise in cases, according to Google search trend data.

This month, the brand introduced four creative spots, including “Cashier” and “Los Flores” that will launch on linear television this month, with digital and social content following in August. The new campaign includes a brand new tagline and first-ever sonic logo, in addition to setting up bespoke characters who will bridge the digital and TV divide. The brand worked with Doner for the creative development and J3 for media buying for this campaign.

The new ads are designed to help allergy sufferers “Zeize the Day,” as the new tagline suggests. Put plainly: the ads position Zyrtec as the solution to help people get back to their day-to-day lives despite allergies.

“Our goal is to drive salience and emotional resonance with consumers, so that they can find us on digital when they want to learn more and choose Zyrtec when they are in store,” said Lewis, as Zyrtec recognized that Covid has changed the conversation about how allergy symptoms are represented.

Since Zyrtec launched its “Muddle No More” campaign in 2012, sneezing has become much more complex, given Covid symptoms. The brand wanted to connect with allergy sufferers on a more emotional level and show how Zyrtec can help them be their best selves throughout the year by removing sneezing from the ad. “The upbeat spot with a brandable sonic mnemonic and a feel good Funkytown beat does a great job of showing what’s possible when you get it right, not focusing on what’s wrong,” said Trace Cohen, Partner of marketing company, Metaforce.

It is unclear how much of Zyrtec’s advertising budget is allocated to the TV spots and social media advertising, as Lewis would not share overall budget specifics. According to Pathmatics, the company spent close to $25 million so far in 2022 on marketing efforts. Lewis noted that half of its spend is devoted to digital channels, and over the past few years, they have been gradually right-sizing the media mix between linear TV and digital channels in line with shifting consumer trends.

Zyrtec is not the only allergy brand that wants to connect with consumers on an emotional level. Allergy brands like AstraZeneca and Allegra have recently had campaigns that have been able to connect with their audiences on an emotional level in a meaningful way.

“Zyrtec appealing to an emotional connection with this campaign, associating its product with not only its customers’ needs but their very sense of self, is a smart way to make sure they’re always at the top of the consideration set even while people are bombarded with competitive choices at the point of sale,” said Margo Kahnrose, CMO at Skai, an omnichannel marketing platform.

The brand understands that consumers are savvy about allergies; they don’t need any allergy cues to understand that their allergies are being affected.

Looking into the future, Zyrtec expects to spend a considerable amount of money on connected televisions, as well as social media platforms. Lewis concluded, “times change and consumers have changed as well, and it behooved the brand to take a new approach.”

It’s the second such postponement in a little more than 12 months. In January 2020, when Google initially said it would phase out third-party cookies, it said it expected to make a move in 2022. Last year, that deadline was moved to late 2023.

Although, for some, the fact that news of the delay was leaked (Insider first reported it on Wednesday) is indicative of just how unwieldy a task Google has ahead of it.

True, Google Chrome is an outlier when compared to the likes of Apple’s Safari, which began rolling back support for third-party cookies years ago. However, the scale of its footprint and Google’s dominance of the media market paints a target on its chest, a reality that requires deft political maneuvering from the online colossus.

In a blog post, Anthony Chavez, vp Privacy Sandbox, Google, noted how feedback from the media industry in forums such as W3C, not to mention oversight from antitrust bodies such as The U.K.’s Competition Markets Authority, prompted the delay.

“This feedback aligns with our commitment to the CMA to ensure that the Privacy Sandbox provides effective, privacy-preserving technologies and the industry has sufficient time to adopt these new solutions,” he wrote. “For these reasons, we are expanding the testing windows for the Privacy Sandbox APIs before we disable third-party cookies in Chrome.”

High stakes game

Wayne Blodwell, CEO of consultancy firm TPA Digital, said the latest delay in progressing The Privacy Sandbox experiments is not a surprise. This is because Google effectively has to play this “high stakes game” with one arm tied behind its back given the scrutiny it faces from regulators — let’s not forget it has pledged to roll out any agreed measures with the CMA global.

“I also highly doubt that this is the last deadline pushback we see,” he claimed in a written statement, adding that while “many may sigh” at the latest announcement, much progress has been made since the prospect of sunsetting cookies was first mooted in 2019.

Blodwell added, “It’s still fascinating to me that Apple doesn’t appear to be under any scrutiny, yet Google are having to go through major hoops with regulators before they do anything, I wish someone would really take a look at that.”

Several sources told Digiday that many independent ad tech companies — those that stand to be impacted most by the retirement of traditional identifiers — have made significant progress with potential substitute ad targeting tools.

Although “scalable and democratized technical solutions” that can help monetize long-tail web properties are currently lacking, Blodwell added, that he was confident that ideal solutions will present themselves, eventually.

Why the delay?

Sources involved with Prebid.org, a body geared toward developing industry standards for sell-side players, also noted how staffers at Chrome (a team distinct from their peers at Google Ads) have been interacting with third parties such as ad tech players and publishers.

Paul Bannister, chief strategy officer at Cafe Media, said, “I was somewhat optimistic [of real progress] earlier this year when they announced the Topics API, a new Origins trial and all of the new information came out about FLEDGE because other ad tech companies were testing things… it felt like we had real momentum.”

Bannister, whose team has been in direct discussions with the Google Chrome team, speculated that the ongoing economic uncertainty may have played a role in causing the latest delay as multiple companies in the space (not just Google) have been forced to prioritize generating revenues in the near term.

He added, “I think the economy being rocky could be making people redeploy resources that might have been working on Privacy Sandbox features, which would have been for next year or beyond, to focus on short-term initiatives, I think that may have contributed to a slowing of things.”

Incentivized delay?

However, some expressed a degree of cynicism, indicating a belief that the successive delays are just red meat that Google is throwing to keep regulators at bay, now the potential divestiture of (at least some) of its ad tech offerings is in prospect.

“Isn’t this the headline they [Google] needed to show they were moving in the right direction but they’re just not prepared for it and they’re just delaying it over and over again when they really just don’t want it to happen,” said one source, who was not authorized to speak to press.

A separate source, who similarly declined to be named given their employer’s PR policy, characterized the continued delay as “a distraction tax” which ultimately meant the continuation of the status quo, and Google’s unrivaled hegemony of the online advertising sector.

“Google is very happy to force its rivals to pay [to use its ad tech stack] as long as it possibly can,” added the source. “Even if we could all agree [on a suitable set of ad targeting tools to substitute cookies] tomorrow, Google would benefit from the uncertainty… there’s no incentive for Google to reach a conclusion, I think they’ll delay, yet again.”

Businesses on the brink

The key hits:

• IAC’s Dotdash Meredith saw an 18% decrease in its pro forma digital revenue in June 2022 compared to June 2021.
• Platforms like Google, Twitter and Snap are already reporting lower revenue than expected, blaming “macroeconomic headwinds” as a primary reason for down ad revenue. 
• Media advisors and analysts say they’re seeing warning signs but are waiting to see how much of a hit certain advertising categories take before proclaiming a recession. 

Not all media analysts are ready to call it a recession, but there are plenty of red flags popping up in the digital advertising economy. 

Earlier this month, IAC issued its June Monthly Metrics report revealing its media subsidiary Dotdash Meredith had an 18% decrease in pro forma digital revenue in June 2022 compared to June 2021 — pro forma measures Dotdash’s comparable revenue from before and after its acquisition of Meredith last December. For context, this decrease followed a smaller 3% year-over-year decline in pro forma digital revenue in May.

Representatives from Dotdash Meredith declined to speak further about the reasons for why pro forma digital revenue was down in June, stating that the company does not break out the various businesses — commerce, programmatic advertising, branded content, licensing and others — in its monthly or quarterly earnings reports. 

While one company does not speak for the whole of the industry, it does beg the question if Dotdash Meredith is alone in experiencing a decrease in revenue at the halfway point of the year. And beyond that, how much the economic slowdown of 2022 mirrors the pandemic-induced recession of 2020.

“That was a quick recovery [in 2020]. Q2 was rough but then Q3 bounced back. I don’t know if this one’s going to be so quick. It will for sure take us into 2023,” said one publishing exec.  

Programmatic ebbs and slows

The programmatic open marketplace is experiencing dips in CPMs compared to the weekly averages it saw in 2021. According to Operative’s STAQ Benchmarking Data, the first week of June 2022 had an average CPM of $1.58, nearly $0.20 lower than the average CPM the same week in 2021. By the first week of July, however, average CPMs fell to $1.41, the second lowest CPM of the year after the week of January 2, 2022. That was more than $0.20 lower than the same week’s average in 2021. 

“There’s always a dropoff [in programmatic ad prices] at the end of the quarter and start of the new quarter,” said another publishing executive. “The drop we saw was not terrible. It was there. It wasn’t bigger than expected, but I think the recovery from the drop is slower than expected.”

Big Tech sees weak advertiser demand

The official second-quarter earnings reports for many public media companies won’t be out until August. At that point, they will help further unpack just how significant of an impact the economic slowdown has had on the digital media industry, but in the meantime, some of the major platforms are already reporting that 2022 is not the growth year executives once hoped for. 

• Meta reported its first-ever revenue decline in its Q2 earnings report of a 1% decrease year-over-year to $28.8 billion. The company also predicts that its total revenue will be lower in Q3 in the range of $26-28.5 billion as a result of the “continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty.”
• Google’s “18-month run of blistering growth” is over, according to The Information, after second-quarter revenue for the search engine’s parent company Alphabet was only 13% year-over-year as opposed to the 20-plus percent growth it saw for the past six quarters. 
• Snap opened its letter to investors by saying: “The second quarter of 2022 proved more challenging than we expected.” Revenue for the social media platform company was also up 13% year-over-year, but “revenue growth has substantially slowed,” and “we are also seeing increasing competition for advertising dollars that are now growing more slowly,” the letter read. 
• Twitter’s Q2 revenue decreased by 1% year-over-year to $1.18 billion, 11% below the estimated 10.5% growth, according to CNBC. The company blamed its down revenue on the uncertain status of Elon Musk buying the social media platform, but its advertising revenue increased by only 2% year-over-year, totaling $1.08 billion. The remainder of its revenue comes from its subscription business Twitter Blue, which totaled $101 million, representing a decrease of 27% year-over-year. 

“It’s not a slam dunk to pronounce [a recession] today. There are plenty of warning flags, though,” said Todd Krizelman, CEO of MediaRadar. “Google’s [second quarter] results reinforced what we see, which is, some segments have slowed down but others are going like gangbusters.” 

Up and down ad categories

Krizelman is correct in saying that what’s going on in the industry is not a blanket statement. Just like in Q2 2020, certain advertising categories are experiencing decreases while others are growing. 

• Travel is up 82% year-over-year in the first six months of 2022 versus the same period in 2021. This category expands from airlines and luggage companies to helicopter charter flights and local ice rinks, Krizelman said.
• Meanwhile, all food advertising, including CPG brands, is down about 2% in the first half of 2022 compared to 2021. Wine, beer and spirits is also down a whopping 21% year-over-year, per MediaRadar. 
• Beauty is up 20% with people going out and about more, and home furnishings is up 12% as many major retailers are now sitting on a surplus of products after supply chain issues were resolved, Krizelman said. 
• Restaurants and bars are down 11% in marketing spend as they return to a state of normalcy post-COVID and the pet category is down 9% after the surge of people adopting dogs and cats in the early months of the pandemic has finally waned. 

With the categories in flux — and with many “up” categories being different in 2022 than the ones up in 2020 — advertising agencies and ad tech vendors are also readjusting their predictions for revenue growth this year.

Financial advisory Macquarie Group released a set of research from its clients in the media and entertainment, ad tech and advertising categories revealing the decreases in predicted annual revenue for 2022 as of June. 

At the mid-year point, Macquarie found the average revenue growth rate predicted for the full year of 2022 decreased from 9.9% to 9.7% year-over-year for media & entertainment, from 23.2% to 21.4% for ad tech and from 6% to 5.1% for advertising. While this might not seem like a drastic dip — the aforementioned stats would all mark year-over-year increases, after all — it’s important to recognize that many companies across the industry are reconciling with the fact that initial growth goals will not be met this year.

No business is safe, not even commerce  

Ad revenue is not the only area of publishers’ businesses that are at risk. Earlier this week, Shopify laid off 10% of its staff — approximately 1,000 employees — as “consumers resume old shopping habits and pull back on the online orders that fueled the company’s recent growth,” according to a report by The Wall Street Journal.

This trend of consumer behavior, of course, threatens publishers’ e-commerce businesses as well, and if a recession leads to shoppers spending less altogether, the whole industry will be in a vicious cycle. In July, the U.S. consumer confidence index fell for the third consecutive month.

“A [gross domestic product] slowdown will lead to an ad slowdown, which will impact everybody,” said Tim Nollen, a director and senior analyst for the media, entertainment, advertising & ad tech division of Macquarie. The U.S. will report GDP growth — or lack thereof — for Q2 on Thursday. – Kayleigh Barber

What we’ve heard

“[Podcast revenue] will probably get to 50% [of total revenue this year]. A lot of that depends on how the other lines are growing. We have three lines of business: digital business, audio business, and subscription business that we’re leaning into quite hard.”

— Slate CRO and president Charlie Kammerer

The post-cookie identity picture is a freeze frame

A little more than a year ago, Google’s decision to delay its deprecation of third-party cookies in its Chrome browser put publishers’ post-cookie preparations in something of a holding pattern. A year later, they’re still in it (and might be for another couple of years).

“We’re definitely in a holding pattern waiting to see what comes next,” said one publishing executive.

To be clear, publishers haven’t been sitting on their hands while waiting. They continue to develop their first-party data capabilities and assess alternative identifiers like Unified ID 2.0 — as they were doing before Google’s postponement. But they’re still waiting for the buy side to decide on which alternative IDs advertisers will support. “That’s the sticking point, and I don’t know what we can do to move them along,” said a second publishing executive. 

Well, that’s not the only sticking point. Publishers remain leery of the potential for all this alternate ID effort to be for naught (or at least not yet).

“You’ve gotta ask if Google is going to actually kill the cookie,” said the first publishing executive on Tuesday. 

The next day, Insider reported that Google plans to postpone its third-party cookie deprecation deadline once again, this time to 2024… at least, and Google confirmed as much in a company blog post stating, “we now intend to begin phasing out third-party cookies in Chrome in the second half of 2024.” Cue Wilson Phillips: I know that there is pain, but you hold on for one more day… — Tim Peterson

Numbers to know

4.4 million: Number of podcasts that were distributed on Spotify during the second quarter of 2022.

84%: Percentage share that came from unregistered non-subscribers across 670 publishers’ sites that have subscription models.

$87 million: Enterprise value of 3BlackDot, a gaming-centric media company that has been purchased by its CEO from Webedia.

27: Number of Twitter Spaces events that The New York Times has held this year, as of its July 8 event on U.K. prime minister Boris Johnson’s resignation.

$60 million: Amount of revenue that Newsweek generated in 2021.

Digiday experiments with NFTs

Digiday launched a special editorial project called Token to Play, including 10 stories exploring the challenges and opportunities associated with NFTs in media, marketing and gaming & esports. In addition to this editorial package, we have also created 10 NFTs of robot avatars as art and are using this drop as an opportunity for experimental journalism where we try our hand at creating and minting NFTs to get a better grasp of these digital assets to inform future reporting. Check out the project here.

What we’ve covered

Instagram makes some meaningful gains with publishers:

• Digiday+ Research surveyed 72 publisher professionals in June about where Instagram fits into the social strategy.
• 58% of respondents said they’re investing a little or a moderate amount on original Instagram content.

Read more about Instagram here.

BDG’s comedy content studio attracts ad dollars to its parenting vertical:

• The BDG Comedy Studio has generated at least $10 million in revenue since BDG acquired it through its purchase of Some Spider Studios in September.
• The comedy studio has worked with 22 different advertisers, roughly 90% of whom are new to BDG.

Read more about BDG here.

How Slate’s Charlie Kammerer is prioritizing frequency to boost podcast revenue:

• The podcast publisher is producing shorter seasons of its shows that can be released more regularly.
• “Slowburn,” “Decoder Ring” and “One Year” are moving from one season per year to two or three.

Listen to the latest Digiday Podcast here.

Publishers hope NFTs will increase event revenue, but slow adoption of blockchain tech leaves attendees unsure:

• Blockworks and CoinDesk have offered NFTs as VIP tickets or freebies for attendees.
• However, even crypto enthusiasts haven’t exactly raced to take the publishers up on the offers.

Read more about NFTs as event revenue here.

NFT holders might become the new membership model but could threaten other revenue streams:

• Blockworks, Playboy and Time have formed communities out of the people who have purchased their NFTs.
• However, the one-time purchases could preclude or disrupt other revenue streams.

Read more about NFTs as membership models here.

What we’re reading

Media execs prep for a recession:
Media executives say their businesses have yet to take a nosedive, but they are girding up for the economic downturn to intensify, such as by slowing hiring and putting on a brave face, according to Vanity Fair.

Layoffs at Vox Media:
Speaking of media companies preparing for a recession, Vox Media has laid off 39 employees and slowed hiring to head off any further economic downturn, according to Axios.

The New Yorker’s archive editor controversy:
The New Yorker fired its archive editor Erin Overbey last week after she spoke out against the publication, alleging the publication had subverted her work after she had called out The New Yorker for a lack of diversity and equity, according to The Daily Beast.

MEL Magazine goes under again:
A year after Recurrent Ventures acquired MEL Magazine following the branded content publication’s shutdown by original owner Dollar Shave Club, its new parent company has shut down the outlet and laid off its entire staff, according to Observer.

The Washington Post reinforces its return-to-office policy:
Post staffers have not been psyched about the news organization’s mandate that employees work from the office three days per week, but the Post’s leadership is holding its ground while allowing for some exemptions, according to Politico.

Digiday caught up with Andre Banks, founder and CEO at A—B, to talk about the agency’s relaunch and where the advertising industry stands on diversity in 2022.

This interview has been lightly edited for clarity.

Why did you decide to relaunch your agency? What does it change?

After 2020, you saw a lot of folks talking about equity, diversity [and] making new commitments, but we came out of the box in 2018 already telling that story. We were a diverse team from the interns to the executive class. Equity is at the core of everything we do, how we solve problems, projects we take on and vendors we work with. The relaunch is being able to show that that vision has gone from aspiration and idea to scale. As more and bigger organizations are thinking about these questions, A—B is now in a place where we can, with 50 [employees in the company], meet that need.

We didn’t stop operations. We kept going, kept moving. For us, it was about the expansion of the services and clarifying the offering. This was us saying, this is actually a united practice that can go from, there’s a problem to solve to we’re reaching millions of people every day communicating this. Putting those pieces together, relaunching as the total package was what [was] behind putting ourselves back out there.

You’re a shop owned by people of color. What’s the importance of that?

We are 79% people of color across the firm. More than 50% of the people of color are Black. Our entire leadership team is people of color. Seventy-five percent of the leadership team is Black. Those numbers have continued throughout at every level at the company. And that’s been pretty consistent from day one. We’ve all had the experience of working in places where we haven’t been able to show up as our full selves. We haven’t been able to bring powerful stories. We want to leverage that at A—B. We want to go deeper into other people’s stories, and center our work in people’s stories, how they relate to identity, how they show up in the world. As a result, the practice has really evolved to be focused on that. That’s where we start any problem solving.

Given advertising’s history and slow adoption of authentic diversity, equity and inclusion initiatives, what does the future of DE&I look like to you at A—B?

We’re moving to a place where people are going from needing help and support that’s fundamentally about building a practice that’s about representation…and elevating that into a practice. It’s not just that we need more Black and brown people in the room. It’s that we actually need to understand their experiences, their perspectives in order to get the fuel to solve these problems in new and different ways.

Where does the newly launched A—B agency fit into the DE&I conversation?

We don’t think of ourselves as DE&I or doing DE&I work. What we often say to folks is, “This is the issue that you’re working on. We’re going to find the most nuanced understanding of people you’re working with.” Usually, there are people of color or an important segment of that. We’re going to look at that community beyond the demographics, really try to understand it. 

What can other agencies learn from your approach?

It’s doable. We didn’t start with a lot of money. I didn’t have any big startup funds. We’ve been able to do this because we’ve had a mission that aligns to the values of this diverse group of people of color. We’ve got a lot of Black people on our team, a lot of people of color. But honestly, I’ve never worked with a more diverse team. Not just in terms of the fact that there are lots of Black and brown people, but everybody’s so different.

Does diverse leadership impact how A—B pitches clients? Is there an advantage to A—B’s diversity?

Definitely. People are looking at the makeup of our team. They’re looking at who’s going to be showing up in the client meeting. [Potential clients] are like, “We want to make sure that folks who show up are going to look representative of the communities that we’re in, show and reflect the values that we’re bringing into the project.”