Month: July 2022

The effort to rethink the app, which was originally released in 2013, follows a shift in marketing leadership at KFC as the chain tries to make its products more accessible to customers. The two companies have been working together since 2020, however, Google and KFC each declined to disclose their financial arrangement for this partnership.

“The goal is to continue providing a better experience over time so that customers can enjoy KFC,” said Jeff Long, director of customer journey marketing. The brand aims to showcase how it wants to make customers’ lives better, a message that the brand has incorporated in its app advertising as well as on television, including in its famous bucket ad.

With the KFC app, customers can re-order their previous orders, making it easier for them to save time. These features were created in light of data analyzed by Google, though this new strategy doesn’t move KFC’s perspective on privacy. “We’re always looking at ways to make our guest experience more relevant and personalized, and capturing and growing our first-party data is one way we deliver that enhanced customer experience,” Long said.

“Given that so much of the consumer journey is now happening digitally, it’s offered us a unique opportunity to really partner with brands like KFC in new ways and help them through these pivots and really needs to meet the changing consumer demand,” said Megan Danielson, Google’s head of industry, restaurants. Danielson noted that there has been a YoY increase of 400% from 2020 to 2021 for “takeout restaurants” searches, though she did not provide exact growth figures.

It’s no secret that people have increasingly turned to online video and cable television for entertainment, so platforms such as YouTube, Instagram, and TikTok can be a powerful tool for reaching — both existing and new — audiences. The recent campaign of KFC starring Jack Harlow tapped into the popularity of those social platforms.

As part of a social media strategy, KFC leveraged the social media platforms in an organic way to capture the attention of the millennial and Gen Z demographics for the Jack Harlow campaign. “We were figuring out how we can leverage the strengths and weaknesses of each platform to deliver a holistic kind of campaign approach that makes customers understand what the offering has for them and why they should care about KFC and this Jack Harlow meal,” said Long.

It is unclear how much of its advertising budget is allocated to the KFC app as Long would not share overall budget specifics. Long noted KFC used Facebook for organic growth and that the ad spend was split between TikTok, Pinterest, Twitter, and Instagram with TikTok being the preferred platform when it comes to the priority of the ad spend. According to Kantar data, KFC spent close to $47 million in 2022 on marketing efforts.

There was an increase in restaurant app downloads due to the pandemic, as restaurant owners tried to differentiate themselves among consumers and drive loyalty in an age where cookies are no longer an issue. “Combined with a pandemic-fueled increase in online ordering for fast food, it’s smart to invest in sending traffic toward the chain’s mobile app,” said Margo Kahnrose, CMO at Skai, an omnichannel marketing platform, adding that with authenticated relationships with consumers, KFC is able to tailor and serve its relationships based on rich, first-party data. Statistical data shows that more than half of restaurant customers used their apps on a daily basis, compared to third-party apps, in the last fall. 

In recent years, it has become apparent that the digital market is becoming increasingly comfortable with the idea of personalized brand experiences thanks to the growth of apps, such as the fact that top brands like KFC are looking to invest in their most loyal customers and be prepared for what’s next as consumers’ habits continue to evolve over time. “Brands who see the most success will utilize all premier resources available to them to craft data-backed solutions that aim to drive results and growth versus relying solely on headlines,” said David Anderson, partner, UTA and co-head of entertainment and culture marketing at the private equity firm MediaLink.

But this aspect of the orgs’ business can be a double-edged sword for brands looking to find natural alignment with a gaming creator, according to Nadia Tseng, vp of strategic partnerships at Loaded. “Their best interest is what’s best for the team,” she said. “For us, we won’t necessarily only work with talent from a certain org; we are truly doing what’s best for the client.”

There is also an inherent conflict of interest for a talent management agency helping brands sign creator partnerships, but Tseng stressed that Open World’s approach is talent-agnostic, flagging as one recent example a partnership the company negotiated between fashion footwear brand retailer Journeys and gaming creator Karl Jacobs. Jacobs, a prominent streamer and YouTuber, is represented by Night Media — not Loaded — and was initially skeptical when Loaded reached out with the opportunity.

“It’s evident, through the last seven months that we’ve been working with Karl and Night Media, that he doesn’t find it weird at all,” Tseng said, “because he can see that our best interests are for Journeys’, and that we are doing everything we can to make sure his partnership with them is fantastic.”

Loaded’s even-handed approach was a major selling point for Journeys as the brand explored potential agencies and partners for its gaming push. “The type of gamers they brought us were not on their roster,” said Journeys svp of marketing Kari Irons. “For me, that was huge credibility, because they’re not selling all parts of Loaded as a business — they were most interested in making sure they were serving Journeys first.”

With Jacobs acting as Journeys’ “creative ambassador,” Loaded and Open World will continue to provide consulting support to the brand as it builds out its gaming-focused creator strategy. “Ultimately, Loaded has become an extension of the marketing department; we are very much in lockstep on building the strategy and executing it,” Irons said. “They really have the expertise to do this in the most credible, authentic way possible.”

Although brand consulting is the bulk of Open World’s business the company is not planning to rely on this revenue stream alone. Original content production is another potentially lucrative revenue stream, and Open World has hired Jeremy Azevedo, a former vp of content at 100 Thieves, to lead this push. As it continues to develop its network of creators and prospective brand partners, the company envisions that its consulting and production studio divisions will work in tandem to create targeted content tailor-made for gamers and brands alike.

“The bank that we have accumulated is the human capital at this company, the relationships and then a lot of data,” said Loaded CEO Josh Swartz. “So we’re leveraging all three of those things for the benefit of corporate clients.”

In light of a highly transmissible virus with a lot of unknowns at the time, Fitzco, along with the rest of the working world, closed its doors. Remote work became the norm for many, including the ad agency. To put it in perspective, the Pew Research Center reported that in 2019 (pre pandemic), only 20% of people surveyed said they were doing their jobs from home. By the end of  2020, that number jumped to 71%. Of that 71%, most of them started working remotely because their offices were closed until this supposedly blew over. 

On the first episode of The Return, senior marketing reporter and host Kimeko McCoy talks with Fitzco’s staff about everything from disappearing lines between work life and home life to how they’re now managing expectations ahead of their first day back to in-person work. All while the pandemic rages on. 

Digiday is proud to present The Return, a podcast about the advertising industry as it grapples with returning to the office in a global pandemic that has forced society to reconsider the very idea of work. 

In four episodes, The Return follows Atlanta-based advertising agency Fitzco as the company returns to the office after a two year-pandemic hiatus, answering questions about Covid-19 safety protocols amidst each new wave of the virus. It will also examine company culture, the push to change the future of work and what true work-life balance looks like.

The Return is hosted by McCoy and produced by Digiday audio producer Sara Patterson. Subscribe to the Digiday podcast now on Apple Podcasts, or wherever you get your podcasts. 

With that we can dig deeper into the latest round of consolidation in advertising. Remember that in the last few weeks (and months), WPP acquired e-commerce agency Corebiz and We Are Social acquired above-the-line agency Metta Communications in Hong Kong. Like those deals, the one between Brainlabs and Fanbytes stacks up for both sides. There are issues, of course, but it seems closer to a perfect match than a marriage of convenience.

Sanguine-soaked as this sounds, the deal is also dipped in some straightforward logic. 

For starters, Fanbytes didn’t need saving. Otherwise, CEO Timothy Armoo would’ve gone with one of the private equity investors that wanted to buy the agency. Similarly, Brainlabs isn’t exactly short of new business. It handles more than $1 billion in media billings annually, according to one source who declined to go on the record because the number is confidential. These are two companies that could afford to wait for the right deal, rather than settle for whatever was available. 

It turns out that right deal was essentially the one that would give both businesses a better shot at growing their influencer marketing briefs now. On their own, this wouldn’t have been impossible — just improbable. Together, both businesses have a better shot at success — albeit not a clear one. The economy is on the skits, after all. Yes, ad dollars are still being spent, but sooner or later (if not already), that will slow. Downturns tend to do that to marketers.

Even so, Armoo and Brainlabs CEO Dan Gilbert seem to like those odds.

“If anything, this period is a moment when marketers rationalize where they spend their money and invest in the things that really work, including influencer marketing,” said Gilbert.

Not that advertisers needed a downturn to figure out influencer marketing goes deeper than likes, comments and a shout out. 

“Over the last year, the fastest growing segment of the Fanbytes business was a product we built whereby marketers can use influencer content for their paid media,” said Amoo. “Brands were already thinking about how to make influencer creative work harder.”

This is great for attracting more media dollars, but not so great for the commoditization of influencers. The harder advertisers make content work, the more they see talent as a media product first and foremost, often driven by data. This can lead to a lack of creativity and authenticity, and a lower quality of content. The key is really understanding what influencer marketing can do but accepting that it can’t do everything.

“This was one of the things that really stood out to us about Fanbytes,” said Gilbert. The team acknowledged that influencer marketing isn’t an exact science, he added. 

Indeed, it’s very hard to attribute breakfast cereal sales and footfall in a supermarket directly to an influencer marketing campaign. But understanding a digital footprint, brand uplift and engagement is more realistic. The important thing is incorporating this into the wider reporting picture.

Having proprietary insight tech will accomplish this for an agency: it lets Fanbytes executives understand the benchmarks and channel averages of the influencers they’re working with. For example, what does good look like to them and does that match the expectations of the brief? Being able to answer those questions with data gives marketers the means to give influencers’ clear KPIs for their campaigns and use a mix of qualitative and quantitative metrics. 

“This isn’t a theoretical construct,” said Gilbert. “The Fanbytes team are in market building campaigns that deliver value, which is where the growth rate of our business is coming from. So we’re seeing fast-moving consumer goods? clients switch budgets from TV to influencer. The reason for that isn’t because of any trading deals or rebates, it’s because it drives results across the marketing funnel.”

Being able to prove those results is more important than ever. 

Increasingly, influencer-led marketing is seen as a key component within the overall marketing mix, and is therefore playing a more central role in advertisers’ strategies. Of course, that’s going to ebb and flow through the current economic storm, but influencer marketing isn’t necessarily going to be one of the first line items on a media plan to get cut by clients, should the market go sideways. On the contrary, more big advertisers are recognizing that talent partnerships, when done in the right way, are a legitimate avenue for reaching and engaging with diverse audiences, and driving real impact.

“We haven’t seen a pay per click advertising my — only brief in years — it’s all integrated into wider ad spending and the same is going to happen for influencer marketing,” said Gilbert. 

In fact, his clients are already asking for it, he said. 

“Certainly, over the next two or three years it’s going to become a significant part of media plans and subsequently integrated with other lines of spending,” Gilbert added. “Not many brands can afford to work with Michael Jordan but they can use people in pockets who have influence over more targeted pools of people to get great results.”

There are lots of caveats to this way of thinking, particularly when it comes to how linked ad spending is in these areas to the growth of agencies, given the seemingly endless stream of financial constraints foisted around those businesses. But as digital communications and customer experience become more central to the way businesses grow, it makes sense for marketers to tap into that expertise.

Take General Mills, for example. Marketers there are moving more of their ad dollars into influencer marketing, especially for vegan products like Lärabar, which have incredibly engaged communities on social media. These niche audiences demand a trusted and authoritative voice that branded content and traditional advertising often can’t deliver.

“We know we can impact every part of the marketing funnel with influencers — we have the data to back that up,” said Amoo. “But we also know that the other parts of that funnel are being managed by marketers in other parts of the marketing team like paid media, SEO and display. Coming together with Brainlabs allows us to reach those people more easily.”

Conversations with marketers are already starting to shift as a result. 

“Budgets are getting bigger, the campaigns are longer as are the partnerships with influencers,” said Amoo. “The conversations have gone from giving us some money to launch a product to some fans to launching the product but then seeing how those people can be retargeted or marketed to over a 12-month period.”

There’s no doubt these are challenging times for agencies. The pandemic and subsequent downturns of 2020 and 2022 have magnified pre-existing trends — talent retention, squeezed margins and emerging competitors to name a few. In many ways, these trends amount to the ultimate stress test for agencies.

Brainlabs’ plan has withstood the pressure to date. It is projected to grow revenue 40% this year compared to 2021. Moreover, Gilbert told Business Insider earlier this year that his agency is headed toward $100 million in revenue. Most of this growth comes from the U.S., where more than 60% of Brainlabs‘ business comes from now. Needless to say, talks have already been had about taking Fanbytes over there.

Chances are the expansion — for both businesses — won’t stop there. Over the last year, Brainlabs has bought marketing services companies in Canada and India. And it remains on the lookout for businesses in Germany, France, Australia, China and Japan. In the next three to four years, it expects to be a fully global agency.  

“Brainlabs is in a unique place of not being tied to legacy approaches to planning and buying,” said Greg Paull, principal at independent search consultancy R3. “They have built an impressive suite of sophisticated tools with the talent to match. More importantly, they have been putting the right dots on the map to give global clients the comfort of a strong worldwide presence.”

In the post-Covid world, all bets are off in terms of structure and alignment between agencies and advertisers. It’s just as likely that more marketers are going to bring chunks of media in-house as it is that there will be more pitches. The agencies best suited for this dynamic are going to be the ones that help reduce friction and measure business outcomes — the companies who can truly navigate how owned, earned and paid lead to real outcomes, said Gilbert. 

Chipotle isn’t the only brand to either gamify or give away crypto. Last year, Burger King partnered with the financial services companies Robinhood to give away Bitcoin, Ethereum and Dogecoin to people who spent $5 within the burger chain’s app. Last year, NFL star Aaron Rogers gave away $1 million worth of Bitcoin through Cash App. Crypto giveaways have also been a tactic for crypto exchanges like FTX and BlockFi as a means of getting people to open accounts — but also a dangerous and popular tactic for scammers across the internet.

Despite the tongue-in-cheek title, Buy The Dip is part of Chipotle’s broader strategy for experimenting with marketing across gaming in a variety of formats. It’s also created several experiences inside of the online platform Roblox such as a virtual Halloween maze last fall — which featured virtual costumes and other items — followed by a virtual store this year that let people roll a virtual burrito and earn one of 100,000 given away in real life.

The games have been more popular than expected, according to Chipotle Chief Marketing Officer Chris Brandt. The last crypto giveaway brought in nearly 4 million unique visitors who played 26 million times while the Roblox games brought in nearly 7 million people who played tens of millions of times. “We certainly want to cement ourselves with fandom from the newest generation of both Gen Z and beyond and people who are tech-savvy and digitally savvy,” Brandt said.

Along with Roblox and online games, Chipotle has experimented with esports over the past few years. In 2020, it began working with popular organizations including content and menu item partnerships with 100 Thieves CEO Matt “Nadeshot” Haag and Twitch streamer, “BrookeAB.”

Chipotle took into consideration the popularity of games as they have evolved over the years, from Solitaire on mobile devices to Fortnite. “Everybody’s a gamer,” Brandt said.

The games have also been a way for the company to recruit customers to join its massive loyalty program, which Brandt says now has 29 million people. (People need to sign up for the loyalty program before playing the games.) The loyalty program’s first-party data lets Chipotle personalize messages and offers to people and also help reach consumers directly during a time when third-party data is becoming less effective. He said the escalation of media prices over the past years has been “incredible,” prompting the company to avoid expensive TV ads it used to buy in favor of cheaper channels on a variety of platforms. However, Brandt did not give say what these prices have looked like.

Last year, Chipotle spent $222.1 million on advertising, marketing and promotional costs, according to the company’s 2021 annual report — up from $222.2 million in 2020 and $168.8 million in 2019. (That includes costs for food giveaways.) Total ad spending in 2021 across digital, print and national TV was less than $100 million, according to MediaRadar.

Attention from crypto giveaways often comes from customers who either already see the value or who are “crypto-curious,” according to Liz Miller, vice president and analyst at Constellation Research. However, she said promotions can fall short when they’re focused on the “kitschy” part of crypto or NFTs.

“Random acts of promo rarely create a lasting relationship,” Miller said. “The real risk brands will run into here is that these secure digital currencies are here to stay and will be a backbone for commerce in the upcoming metaverse economy. Break a consumer’s trust now with these promotions, you may not see that trust return in those upcoming universe of shared immersive experiences.”

Chipotle isn’t just giving away cryptocurrency — it’s also now accepting it as payment. Last month, it began partnering with the digital payments platform Flexa to let people buy food with crypto. Other major brands that accept crypto payments through a range of partners include Starbucks, Gucci, Home Depot and Microsoft. And although it’s still a niche way to buy products and services, a May survey of 2,000 U.S. adults found that 41% of those who haven’t owned crypto are “likely” to buy it in the next year compared to 59% were said they’re “unlikely.”

Despite more people becoming familiar with crypto, some way other factors determine whether it works as a marketing tool.

“These campaigns may be best suited for companies that consumers more immediately associate with crypto — such as financial services or gaming — to avoid consumers alleging that a brand shoehorned crypto into their strategy as a quick attention grab,” said Kevin Tran, media & entertainment analyst at Morning Consult.

Chipotle was able to associate with the crypto community with its “Burritos And Bitcoin” campaign despite some hesitancy concerning the sector.

“Even though the market has gone up or down, the idea that we’re still talking about crypto is a pretty big win,” Brandt said. “Certainly there are people that think it’s some kind of Ponzi scheme, but there’s a lot of utility for it and clearly there’s still a lot of interest.”

In search of views

The key hits:

• Gen Z audiences are increasingly using TikTok as a search engine.
• Pinterest’s video platform caters to search-driven viewership.
• Publishers like Refinery29 and Tastemade are taking advantage of search-based video behavior.

YouTube is not only the biggest digital video platform on the market but also the second biggest search engine. And yet search does not play an outsized role in creators’ and publishers’ video strategies beyond YouTube. But maybe that’s about to change.

Famed for its content recommendation algorithm, TikTok’s search functionality took the spotlight recently. Nearly 40% of 18- to 24-year-olds in the U.S. turn to TikTok and Instagram for search queries instead of Google Search and Google Maps, a Google executive said at a conference earlier this month.

Meanwhile Pinterest — as much a visual search engine as a scrapbooking site — remains committed to establishing itself as a digital video destination. Last week the platform hired YouTube’s global head of original programming Nadine Zylstra to be Pinterest’s global head of programming and originals. 

The spread of search-driven video viewership beyond YouTube would appear to be welcome news for video publishers like Vice Media Group’s Refinery29 and Tastemade that produce the types of utility-based videos — such as shopping guides and cooking how-tos — that people are likely to seek out through search queries rather than rely on platforms’ recommendation engines to surface.

“Refinery29 are experts at service content. We want to deliver actionable content to our audience, which really aligns with Pinterest’s direction of what they want to achieve as well,” said Tamar Riley, vp of audience and content strategy for Refinery29 and i-D. In June, Refinery29’s audience on Pinterest spanned 61 million people, according to a VMG spokesperson.

Of course, not all videos cater to being queried through search. But that doesn’t mean search-related tactics do not apply to videos in general entertainment categories like comedy. Adding captions and text to videos, for example, is considered by industry experts to be a potential way to give platforms’ algorithms more information about a video to boost its appearance in search results. “We know for Facebook that has always been important in terms of uploading the caption file for that reason,” said an executive at a media company that produces general entertainment videos.

Video viewers on Pinterest, in particular, have shown a penchant for seeking out videos through search. Having posted more than 40,000 videos to Pinterest and with 15 million followers on the platform, food-and-travel publisher Tastemade has seen that audiences’ behavior on the platform is “very search-oriented,” said Lauren Arso, head of content for social at Tastemade. A Tastemade spokesperson declined to share its monthly viewership figures for Pinterest but said that, on average, 17.5% of Pinterest’s global monthly active user base watched a Tastemade video each month in the first quarter of 2022; Pinterest had 433 million global monthly active users in Q1, per the company’s quarterly earnings report.

The search-driven viewership on Pinterest not only lends itself to Tastemade’s video approach, which is largely oriented around practical programming like recipe videos, but it can also provide a lens for how to program for other platforms. “It’s always interesting for us to see what content, themes and categories are performing on Pinterest because it could give us a glimpse into the future of what’s going to perform in a couple of weeks on a different platform,” Arso said.

The inverse may also be true. Publishers with established search engine optimization strategies could use their existing insights around how to drive search traffic to their sites’ text-based content and apply them to their video strategies across the likes of YouTube, Pinterest and TikTok.

“Seeing that Gen Z are using TikTok as a search engine, there’s just a real opportunity actually internally for teams to collaborate more on using the insights around search data to not just sit across dot-com content but to sit across social too,” Riley said.

What we’ve heard

“As a buyer, I’m wildly scared of what they’re going to come out with. They’re going to overprice themselves.”

— Agency executive on how much money Netflix will look to charge advertisers at launch

Streaming’s viewership share continues to surge

Netflix losing a million subscribers in the second quarter stands in stark contrast to streaming services, including Netflix, stealing more share of overall TV viewership from traditional TV networks.

In June, streamers notched their largest share of minutes people in the U.S. spent watching TV to date, while broadcast and cable TV networks ceded share, according to Nielsen’s The Gauge viewership report for the month.

For what it’s worth, June is typically a down month for traditional TV viewership, considering that broadcast TV’s primetime shows have typically ended their seasons by May. The NBA and NHL aired their respective finals on TV in June, which increased TV sports viewership by 44% from May. But still, streaming stole the show in June.

“TV viewing is seasonally lower in the summer months, but total TV usage increased by 1.9% on a month-over-month basis, bolstered by a 7.7% increase in streaming,” Nielsen wrote in a company blog post announcing the June numbers.

Notably, Netflix saw the biggest spike in share of watch time in June, rising by 0.9 percentage points from May, likely thanks to the release of “Stranger Things” season four at the end of May. Amazon Prime Video, Disney+ and YouTube followed with roughly 0.2 percentage point increases month over month, respectively, per Nielsen. (The chart below suggests Amazon’s share increased by 0.3 percentage points, but Nielsen put the gain at 0.2 percentage points, likely due to rounding).

Streaming’s rising tide did not lift all boats, however. Hulu’s watch time share dipped by 0.1 percentage points. Considering that traditional TV programming continues to make up a major part of the Disney-owned streamer’s library, Hulu’s downtick seems to correspond with the drop-off in traditional TV viewership.

Numbers to know

$7.34 billion: How much ad revenue YouTube generated in the second quarter of 2022.

$4.99: Monthly price for a subscription to the NFL’s NFL+ streaming service.

15: Maximum length, in minutes, that a video on Instagram can be to qualify for a Reel (i.e. the short-form video product is no longer limited to short-form video).

$17 billion: How much money Netflix expects to spend on programming this year.

347 million: Number of people who use Snapchat, on average, each day.

104: Number of minutes that the average person spends using Comcast-owned free, ad-supported streaming TV service Xumo per session.

WTF is the Video Privacy Protection Act?

A law passed in the Blockbuster era is posing a potential threat to today’s streaming ad market.

Watch the video above to learn more about the Video Privacy Protection Act, and then click here to read an article explaining how the 34-year-old law could be used to rein in targeted advertising.

What we’ve covered

Talent management firm Dulcedo prioritizes relationships with mid-sized esports orgs:

• The management firm has acquired gaming and esports startup C4G Agency.
• The agency has specialized in connecting non-endemic brands with esports organizations.

Read more about Dulcedo here.

How FaZe Clan’s SPAC merger shows the challenges of public ownership in esports:

• On the day the esports org went public, its stock priced closed down nearly 25% from its initial price.
• Other esports companies that have gone public are currently valued far beneath their initial offering price.

Read more about FaZe Clan here.

As social commerce grows, not all marketers see the appeal of live shopping:

• While platforms like YouTube, Facebook, Instagram and Pinterest pitch live shopping opportunities, agency executives said some clients aren’t buying.
• Part of the problem is a skepticism among brands that people in the U.S. are willing to shop while watching live streams.

Read more about live shopping here.

What we’re reading

Amazon, Apple and Google vie for sports streaming rights:
The three tech giants have each submitted bids for the rights to the NFL’s Sunday Ticket Package, according to The New York Times. The bids help to explain why TV network owners ponied up last year to lock up the league’s traditional TV and streaming rights, considering that the NFL remains traditional TV’s biggest, most reliable audience magnet.

Hollywood’s production level looks to return to normal:
The number of movies, TV shows and other projects in production in the Los Angeles area will return to the pre-pandemic amount in the next year, according to Variety, citing estimates from the official Los Angeles area film office FilmLA.

TikTok is overcrowded with creators:
TikTok has lowered the barrier to entry for people to become creators beyond the threshold already set by YouTube, and that has created an inflated influencer market on the platform, in which success can be much less reliable over the long run, according to The Information.

Meta turns TikTok mimic:
Facebook’s and Instagram’s parent company is remaking the two platforms in the image of TikTok, such as by pushing posts to people from accounts they don’t follow, a reversal of Facebook’s “friends and family” push in 2018, according to Insider.