Month: September 2022

“We are definitely seeing brands go forward with earlier sales, similar to last year,” Katya Constantine, CEO of performance marketing shop DigiShop Media, said when asked about the earlier time frame for holiday sales this year. “With another Prime day being announced for early-mid October, we now see it as the earlier kick off to holiday shopping and brands’ promotional plans.”

Ad execs noted that the holiday shopping season has been extended in recent years, so while the current economic environment may contribute to some marketers bumping up their plans, it is likely not the only reason for the early holiday sales.

“I don’t think this is to combat inflation but rather a force function to extend the holiday shopping window earlier and earlier,” said Alex Brandstetter, senior strategy director, account management, at Wunderman Thompson Commerce, Seattle. “This was a massive success during Covid.”

Brandstetter continued: “The reason they did it back then was to take pressure off their constrained supply chain by spreading demand over a longer period, but today, it is actually driving consumers to start spending earlier in Q4 — encouraging brands to spend more in retail media as well.”

Grace Teng, chief media officer at Zambezi, said she expects that brands’ and retailers’ e-commerce teams will be “activated way early this year” and that they will “be doing a lot of optimizations,” a move that “extends the buying period so there will be more time to optimize.”

This is not to say that all advertisers or ad execs are getting requests from clients to kick off sales early this year. While some marketers are aiming to lean into sales and roll them out earlier in the year to appeal to consumers ahead of the peak holiday shopping season, some are focused on trimming where they can now.

Some agency execs said that there’s simply more pressure from marketers on agencies to keep overhead as low as possible going into Q4. That might be why some agency execs say there are fewer pitches happening now: If marketers are aiming to save and keep overhead low, they may be less likely to want to move their business and start anew.

“Many brands that benefited from the ‘Covid bump’ are now seeing sales slip,” noted one ad exec who requested anonymity. “As a result, there’s a lot of scrutiny over working versus non-working dollars. By and large performance marketing is the focus. The more ‘traditional’ brand marketing is being trimmed on a number of accounts.”

“We’re being tasked to work with leaner budgets, be more flexible and rethink a lot of how we approach campaigns,” the exec continued. “This means smaller production budgets. We’re also focused on a lot of partnerships that bundle content and media to stretch dollars further.”

3 Questions with Lisa Odenweller, founder and CEO of DTC wellness brand Kroma Wellness

How does having celebrity investors, like Gwyneth Paltrow, and other fans like Jessica Seinfeld, Bobbi Brown and Amy Schumer tie into Kroma’s marketing strategy? 

I thought if we could get highly influential people, whether it’s celebrities, business leaders [or] moms in the community, it could be our megaphone to the world. I had to get really creative and clever about how to raise money. I knew that [venture capitalists] were not going to fund us at this stage, nor did I really want that. I really had this vision of, could [investors] be our marketing. The buzz of the product and experience got out there and helped me bring together these investors. Because they were engaged with the product and the brand, they helped us tell the world. They got us, not only the megaphones for great press, telling their friends, plugging us into events, getting in front of the right people, [but] have been that marketing machine to give us an advantage.

Why were influencers and celebrities a key part of Kroma’s strategy?

All of my effort was in building those relationships with influencers, our investor community, celebrities, press, etc. Again, very non-traditional. I think where the mistake is, especially in today’s world, is these companies are becoming dependent. They come out of the gate dependent on paid media. So when the paid media [return on advertising spend] went [down], their whole strategy imploded. I never wanted to build a company dependent on that. Our success was grassroots, guerilla marketing — people telling people. That’s the most powerful type of marketing, but it’s also the hardest to do.

So with your current learnings, what’s next?

Now, I’ve got enough data to know what our ROAS is. Now, I’m ready to spend more. Let’s go get really good content. We run a very tight ship. It’s incredibly mindful about spend and we analyze everything. We look at every single expense and what the [return on investment] is. That’s why we’ve been baby stepping. We’re gonna be investing in building that influencer and ambassador channel. That will involve spending money on influencers, something that we haven’t had to do. [We’ll be] putting more money and investing significantly more in paid media because I have the data to know that it works. — Kimeko McCoy

By the numbers

Sustainability is becoming a bigger topic of conversation around marketing and brand purpose. While a number of agencies have lauded sustainability efforts as an advantage in the talent war or ramped up eco-friendly efforts for office returns, consumers expect brands to lead the way, according to new research from Morning Consult intelligence company. Find more key details from the study below:

• 8 in 10 consumers say major technology companies bear the responsibility to drive innovation in environmental sustainability practices.
•  7 in 10 consumers have never thought about the sustainability of a production while watching a movie or TV show.
• 23% of consumers who responded to the survey think their everyday shopping behaviors have a major environmental impact. — Kimeko McCoy

Quote of the week

“If you have a big open space or people are fighting for small conference rooms to get in, it’s kind of the worst of both worlds.”

— An agency HR director on the difficulties of returning to the office, using co-working spaces for the latest edition of our Confessions series.

What we’ve covered

• As the economy wobbles, advertisers and publishers at the top end of the market go more and more direct
• Lower match rates in data clean rooms are being given a much-needed boost
• How Mojo Supermarket’s founder broke the Madison Avenue-style advertising mold

Digiday+ Research surveyed 132 publisher, agency and brand professionals over the summer to learn more.

Digiday’s survey found that publishers think Apple, Facebook and Google stand to gain the most when the third-party cookie meets its demise: Half of the respondents said Apple will gain a lot or a little from the end of the third-party cookie, 38% said the same of Facebook and 33% said Google will gain. Agency and brand pros agreed on the top three, but the percentages looked very different for this group. Forty-six percent of agency and brand respondents said Apple will gain a lot or a little with the death of the cookie, followed by Google at 33% and Facebook at only 20%.

Interestingly, publisher pros and agency and brand pros disagree about how publishers’ fortunes will shake out once the third-party cookie goes away for good. Only 17% of agency and brand respondents said publishers will gain a lot or a little, but 29% of publishers are optimistic about how they will fare in a cookieless world.

When it came to identifying who will lose when — or if — the end of the third-party cookie comes, respondents to Digiday’s survey revealed that the answer is, essentially, everyone. Publisher respondents said vendors and advertisers will lose the most, with nearly three-quarters (73%) saying those parties will lose a lot or a little with the death of the cookie, followed by agencies, which 68% of publisher respondents said will lose. Meanwhile, 73% of agency and brand respondents said advertisers and publishers will lose a lot or a little, and two-thirds said vendors will lose following the end of the third-party cookie.

But the real story here is how high the percentages are among respondents who think all of these parties will lose following the death of the third-party cookie compared with the percentages of those who think they will gain. Only Apple and Google had fewer than half of respondents to Digiday’s survey say they will lose a lot or a little after the cookie goes away. And it was a close call for Google: 46% of publisher pros said Google will lose with cookie deprecation, and 48% of agency and brand pros said Google will lose.

Digiday’s survey also found that publishers’, agencies’ and brands’ opinions about who will gain and lose from the death of the third-party cookie are dynamic. In fact, they’ve changed even just since the spring — before Google announced the most recent delay of the cookie’s demise. For publisher pros, they’ve shifted course on whether Google itself will gain or lose: In a similar survey conducted by Digiday in the spring, 54% of publisher respondents said Google would gain from the end of the third-party cookie. That percentage was down to 33% this summer. Meanwhile, the percentage of publishers who think Google will lose was up to 46% this summer, compared with 29% in the spring.

Agencies and brands have also changed their opinions on how the end of the third-party cookie will affect Google, Digiday’s surveys found. Only a third of agency and brand respondents said this summer that Google will gain after the cookie is gone, compared with half of the respondents in the spring. And there was a big difference in how agency and brand pros think the most recent delay will affect Facebook: In the spring, 37% of agency and brand respondents said the social media platform will gain from the death of the cookie, compared with only 20% in the summer. Meanwhile, the percentage of respondents who said Facebook will lose rose from 42% in the spring to 64% in the summer.

“Our goal with this partnership with NJ Transit was to increase BetMGM brand exposure and further strengthen our strong relationship with the state of New Jersey, where BetMGM is headquartered,” said Matt Prevost, chief revenue officer at BetMGM. “We see huge value in creative OOH placements and think these particular OOH ads are innovative.”

In strategically placed high-traffic areas around the Secaucus Junction in New Jersey, the OOH displays will feature large format media, including huge rotunda banner panels, glass panels, stair risers and extensive digital screen coverage that will feature 74 non-interactive screens, three interactive transit kiosks, a large-format video wall, and a new LED screen that will be installed in the rotunda in a matter of weeks.

“BetMGM was looking for a first-to-market, outside-of-the-box solution that would break through the clutter,” said Scott Goldsmith, president and chief operating officer at Intersection. “They wanted massive visibility at Secaucus Junction, which is the transfer point to MetLife Stadium, home of the Jets and Giants.”

As part of the three-year partnership, NJ Transit will highlight Intersection partnership’s branding including its website, directional signage at Secaucus Junction, NJ Transit’s app, NJ Transit stations, and NJ Transit maps. “During the months where BetMGM is active with media, some formats are statewide such as interior car cards, two-sheets, and digital while other elements are centered around the Secaucus Junction Domination,” said Goldsmith.

It is unclear how much of Intersection’s advertising budget is allocated to this campaign, as Goldsmith and Prevost declined to share overall budget specifics. According to Pathmatics data, Intersection spent $279,900 so far this year on advertising efforts while BetMGM spent a little over $24 million. Goldsmith did say that 90% is allocated to static advertising, and 10% is dedicated to digital OOH.

As the NFL season continues and travel is back to pre-pandemic levels, brands are taking advantage of the situation in their own way. Among them: Shimmy’s partnership with Gillette Stadium, PepsiCo’s Instacart campaign, Listerine’s outdoor advertising campaign, and ESPN’s fantasy football campaign.

“This feels like a natural extension of the out-of-home activations and naming rights agreements that sports fans are accustomed to with stadium naming sponsorships,” said Amanda Thurston, partner at Prophet, a growth strategy consulting firm. “Well-executed signage and advertising messaging can serve as a continuation of the stadium experience, building excitement for event attendees as they travel, be it by train or car.”

Goldsmith concluded that Intersection hopes to continue the industry-leading sponsorship program at NJ Transit and other transit authorities across the United States. “The BetMGM and NJ Transit agreement is a prime example of how Intersection can generate meaningful, non-farebox revenue for our transit authority partners, which off-sets operating costs and create one-of-a-kind experiences for our advertising partners,” Goldsmith said.

“We simply need to try to keep an eye on it,” said Drew Himmelreich, senior analyst at digital agency Barbarian. “It remains an open question to what degree brands actually want to know what percent of their engagement is authentic…Our clients tend to focus on more standard performance metrics and haven’t expressed an appetite to allocate additional resources toward trying to quantify or contextualize the role of bots or inauthentic activity.”

Research by analytics platform Similarweb recently determined that bots generate somewhere between 20.8% and 29.2% of the content posted to Twitter in the U.S., while accounting for some 5% of the platform’s monetizable daily active users. That means a small number of accounts actually generate a substantial amount of content on the social site, with other studies estimating that bots produce 1.57 times more content than human users.

“I’d say what all that bot-generated content really endangers is the engaging experience advertisers want to be part of,” said David F. Carr, senior insights manager at Similarweb. “If Twitter users sense that too many of the accounts they interact with are robotic rather than genuine — or they get turned off by what they’re reading in the media about bot activity — they’re likely to use Twitter less or engage with a lot more skepticism.”

Similarweb points out that other platforms, including Meta’s Facebook, also deal with bots on their platforms. “The problem certainly is not unique to Twitter,” Carr said.

Using AI for prevention

Simply put, bots are essentially programs used to perform repetitive tasks, which can range from posting spam comments to clicking links. On social platforms, this can result in fake accounts that post frequently, or bots that manipulate information in conversations — both of which are potentially harmful for any associated brand content.

“The bad ones are responsible for those spam comments and messages you’re always seeing on feeds or can even scrape website content, among other things,” said Matt Mudra, director of digital strategy at B2B agency Schermer. “The question is, how can brands and agencies prevent their content from being affected?”

At Barbarian, for example, Himmelreich said analysts use automated alerts and tools to flag unusual social media activity. In this case, the automation serves as an added layer for human reviewers, who are still necessary when looking at large spikes in conversations or other major abnormalities on these apps. Barbarian also uses different measures for certain channels, based on varying platform and account risks.

“Our analysts know to be on the lookout for red flags when they are doing performance reporting, and we have automated alerts in place for our clients’ brands that inform us of unusual social conversation activity,” Himmelreich said.

Brian David Crane, founder of digital marketing fund Spread Great Ideas, added that focusing on preventative measures is key for agencies. Using automation and machine learning as part of the bot management solution is becoming more prevalent, and that includes bot monitoring tools like Bot Sentinel and Botometer. In other words, bots policing bots.

“In the wrong hands, automated bots on platforms like Twitter can manipulate information and create glitches in the social fabric of trends and conversations,” Crane said. “It can be very challenging for brands or agencies to tackle them head-on since bots are easy to code, can be implemented from the shadows and can be hard to track back to the source.”

Developing best practices

Increasingly, agencies and creative firms are incorporating best practices to combat bot problems as part of their brand safety measures. And there are many safeguards that don’t require AI or additional information technology training, some of which continue to evolve as brands more heavily invest in social channels.

Tyler Folkman, chief technology officer for influencer marketing company BEN Group, said that agencies and brands can follow some simple guidelines even as bots get more sophisticated. These include looking for shallow engagement, such as single emojis, looking for accounts with a small following but that follow a large number of accounts, and weeding out accounts with “poor profile pictures.”

“It’s a place to start to help brands be smarter,” Folkman said.

Agencies can also use internet protocol filtering and blocking to stop traffic from certain IP addresses associated with spam and bot activity, Mudra added. This means they can use something called frequency filtering to limit the number of times a visitor can view an ad or website.

“For context, any viewing numbers past three times is most likely a bot. Another easy one is blocking sources that may show suspicious behavioral patterns. Remember that bots behave differently than humans would,” Mudra said.

When it comes to search engine optimization, which remains a major focus in social strategies, Baruch Labunski, CEO of SEO marketing firm Rank Secure, said bad bots can actually steal an agency or brand’s content and harm their reputation if left unchecked. Some of the ways to combat this include simply searching for copies of your content through tools like Copyscape, and regularly getting rid of spam comments and bad links.

“There are also good bots that can do this automatically, depending on the platform,” Labunski added. “Block both unknown IP addresses and known bots. Test your site’s speed so you will know if it slows down. A slowdown can indicate you have some bad bots.”

But as noted, the bot challenge extends beyond Twitter’s domain. Himmelreich noted that bot issues seem more pronounced on Twitter, but that it is “rarely the most important social channel in the marketing mix.”

“Bots seem to be most prominent on Twitter, but inauthentic activity more broadly, like orchestrated campaigns by agitators or abuse of a platform’s algorithms, we also see as risks inherent to social media as a marketing vertical,” Himmelreich said.

Experts believe TikTok, Instagram and Facebook are also tackling their own bot problems, with Mudra adding this will “most likely intensify” in the social space and beyond. Instagram may be particularly vulnerable.

“If you’ve noticed on your social feeds over the past 12 to 24 months, there’s been a large uptick of bots spamming content on Instagram posts,” Mudra said. “I also suspect many blog sites, wikis and forums are seeing higher occurrences of bot traffic and bot activity.”

What is in agreement is bots are sticking around — so now it’s a matter of sorting the good from the bad.

But given commerce revenue is down this year for some media companies and the economic slowdown has put restraints on shoppers’ wallets, publishers may need to rethink their commerce strategies.

Take Hearst which is in the process of launching a new marketplace in the fourth quarter. The marketplace is meant to be the new hub for the company’s DTC products and licensed products, but it will also be a new sales channel for the brands and products that readers of Hearst’s media brands regularly shop for as well, according to Sheel Shah, Hearst’s svp of consumer products and partnerships on the latest episode of the Digiday Podcast, which was recorded in front of a live audience at the Digiday Publishing Summit on Sept. 20.

This is an expansion of the media company’s current commerce shop strategy, which consists of 20 individual online branded shops for nearly all media brands in the Hearst portfolio, including the Oprah Daily Shop and Good Housekeeping Shop. The shops currently sell branded merchandise and licensed goods and are collectively on track to make 500,000 transactions this year, a 15% increase over the previous year’s transactions, according to the company, which declined to share hard revenue figures.

Ultimately, Shah hopes that the marketplace can tie together the company’s commerce business — from DTC and licensed products to affiliate links to direct brand deals — and ultimately drive digital subscriptions to the brands in Hearst’s portfolio.

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

The state of the e-commerce spectrum  

Affiliate commerce [has] definitely evolved since the days of drop[ping] links into content. Publishers can do that and you’ll see a pretty quick return on that investment, but I think more mature publishing companies have taken it much further through strategic relationships with brands and thinking about how to create this type of content that will not only serve a reader but also drive revenue for the business.

And as that business has grown, there’s been more and more thought into where you go from affiliate — which is definitely the unlimited product catalog and a smaller percentage of each of those sales that you do help facilitate — to the direct-to-consumer e-commerce business that many media companies have tried and failed [or] succeeded.

[Direct-to-consumer] is definitely a higher margin — 100% of the revenue comes in the doors of the media company — however, of course, your product catalog is much smaller. You’re not going to be able to list and sell everything that there is online, direct-to-consumer. Finding a way to balance in between there is the big whitespace that publishers, and even other companies, have really tried to navigate. 

Enter: The marketplace model

We are looking to expand those direct-to-consumer e-commerce shops into a marketplace. So starting in the holidays, brands that we write about and that our editors love will be able to be considered to join our marketplace, and we’ll be able to sell their products in addition to our own in our branded shops. 

I have no interest in taking on more inventory of products, especially as the vision for the marketplace is to have dozens, if not hundreds, of brands [selling] on the marketplace. There’s no way that I’m going to be able to scale it with taking on inventory for each of these brands.

But I know many of those conversations happen where initially a brand is going to say, “Well, Target took on this many and Walmart took on this many, how many are you taking on?” I don’t want to take your inventory, but [then brands want to] guarantee some amount of sales. We’re not doing that either. 

I’d much rather get as many SKUs into the product catalog as possible, figure out which ones are resonating with our audience, and then go back to those brands and start figuring out how we build a strategic business together. If you create a marketplace where the barrier to entry is quite low, then I don’t think brands are going to ask that much of you. 

Our job is to make sure the product gets to the right user. And if it does, what do those conversion rates look like? And if those conversion rates are high, I want to have follow-up conversations with those brands.

The convergence of memberships and commerce

There’s a lot of opportunity where you can kind of see both of those businesses, [e-commerce and memberships] helping to lift each other. We’re looking to modernize and add more consumer value to our subscription business. We’ve been live for [about] three-and-a-half years with some of our [membership] programs, and we have above 85% renewal rates on most of [them].

Next is, “OK great, you serve a magazine to them on a monthly or quarterly basis, you have access to our digital websites. What more can our brands do for these users?” And I think that’s where the shop can come in.

Right now, our members have an exclusive discount to the [brand] shop. If you’re a Men’s Health member, you get 20% off at the Men’s Health shop. That’s nice — you can pick from like 30 to 40 products and get an exclusive discount from them. But what happens when that shop has hundreds of products from all of the brands that you love? That marketplace evolution can now expand our membership benefits. But at the same time, you’re having a bunch of different folks coming through your shop funnel, who are now like, “[If] I can get 20% off if I become a member, let me learn more about Men’s Health membership.”

You have high intent users coming in directly to your shops to purchase because it’s a credible place to buy and you have the product that they want. You also have readers coming in through our digital websites and they learn about memberships. And I think you can use both of those funnels to help build a larger direct-to-consumer e-commerce business, whether they are individual transactions on our shops or recurring subscriptions on our memberships.