Less BS, More Facts, Some Opinions
Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Lost And Found If you’re wondering what happened to all the titles HBO Max just cut, they were
The post HBO Max’s Loss Is Tubi And Roku’s Gain; ANA And 4A’s Denounce David Cohen’s ALM Remarks appeared first on AdExchanger.
Last week, Digiday reported that several publishers’ direct-sold advertising businesses were experiencing a slow start to 2023, with their first quarter ad revenues pacing as much as 10-25% behind forecasts. But the programmatic side of the business isn’t necessarily in a better place.
While publishers’ sales teams are busy tracking down clients to get them into sales meetings, the programmatic open marketplace is in a tough spot also. Three mid-size to large-size national publishers told Digiday that their RPMs (revenue earned per 1,000 page views) are down between 20-55%, while two other publishers agreed that they’re seeing declines as well in this business, but refused to disclose the exact percentage.
Taking a look at the broader programmatic market, the average monthly CPM (cost per 1,000 impressions) in the open marketplace for Jan. 2020 was $1.45, $0.04 more than the average in Jan. 2021, which was even with the average CPM in Jan. 2022, according to Operative’s STAQ Benchmarking Data. In Jan. 2023, however, the average CPM took a $0.20 tumble to $1.21, per the data.
For publishers’ programmatic businesses, measuring based on RPMs can help paint a clearer picture of how much money they earned per page because while CPMs measure the price of individual ad spots, RPMs account for other variables like number of placements on the page, according to Justin Wohl, CRO of Salon.
Wohl declined to share exact price points for the average RPM his company is earning off of the open programmatic marketplace, however he said that from Jan. 2022 to Jan. 2023, the average RPM was down 55% year over year. Compared to pre-pandemic Jan. 2020, the average RPM in Jan. 2023 is down about 21%, making January 2023 “the worst January [when it comes to] ad [RPMs] since 2020,” he said. Meanwhile, average RPMs in the three consecutive January’s from 2020 to 2021 and from 2021 to 2022 increased about 24% and 43%, respectively.
“We’re definitely feeling, on the programmatic side, the lack of competition, the lack of advertiser presence [and] the lack of pricing pressure,” said Wohl.
Another news publisher, The Guardian U.S., is also taking a hit to its programmatic business, but the publication’s svp of advertising, Luis Romero, said it’s largely due to being placed on block lists — a commonly shared aggravation amongst news outlets. This business is beginning to scale back up, he added, but did not share by how much. That said, Romero’s goal for 2023 is to decrease the publication’s dependence on programmatic revenue from accounting for 50% of the advertising business at the beginning of 2023 to being a minority by the end of this year.
One digital media executive who spoke on the condition of anonymity said that their company’s indirect programmatic CPMs are down between 30-40% year over year, but as it makes up a very small part of the advertising business, they are not concerned about how this decrease will impact revenue earned in the quarter or even the whole of 2023.
“It’s a weak spot that can be mitigated through the events and talent part of our business,” said the media executive.
There is still hope held by several other media execs that programmatic direct deals can make up for the shortfalls on the direct sales and open programmatic ends of the business. While open marketplace programmatic allows for advertisers to purchase display ads on a publishers’ site with little clarity on what content their ads will appear next to, programmatic direct deals that happen in a private marketplace or through a seller (programmatic guaranteed) has more guarantees around things like content adjacencies, impressions and engagements.
Two other publishers who spoke on the condition of anonymity said the number of RFPs for programmatic guaranteed (PG) buys are on the rise as well as the RPMs from those campaigns.
“Our programmatic RPM is way up. January’s always a fairly quiet month programmatically, but our RPMs are probably up about 30% from where they were in Q3 [2022],” said the second media exec, who compared Q1 2023 to Q3 2022 RPMs because Q4 is often an inflated quarter for programmatic rates and Q3 was the most recently comparable quarter that was also impacted by the economic downturn.
The second media exec also said that the private marketplace has been the primary area for monetizing their programmatic direct business, and while CPMs have remained consistent, stronger ad units and more ad inventory across more pages has led to an increase in revenue earned. What’s more, the exec’s sales team has been “regaining some traction” with programmatic guaranteed deals after they dropped off a bit in the back half of 2022, leading to further revenue growth from programmatic ads.
Meanwhile, Operative’s STAQ Benchmarking Data showed that the average programmatic guaranteed CPMs increased from $9.39 in Jan. 2021 to $9.91 in Jan. 2022, then again to $10 in Jan. 2023. But during the span between 2022 to 2023, average CPMs rose and fell from a $14.50 high in June.
The third media exec said that they are receiving the most RFPs this quarter for their programmatic guaranteed business versus RFPs for branded content, indicating that clients and agencies still want human-touched campaigns, but ones that can be executed quickly and facilitated based on set rates, they added.
Not all publishers’ open marketplace experiences are created equally because unlike the rest of the publishers profiled for this piece, the third media exec said that their open marketplace revenue is doing “pretty well” despite the circumstances, and is considered to be the business that is “as predictable as we can get.” The executive declined to share revenue figures or year over year comparisons, but they said that the majority of that revenue is earned through Google’s open marketplace.
For media buyers, the declines in CPMs is something that they want be taking advantage of, according to Seth Hargrave, CEO of Media Two Interactive, however, due to the fact that most of these declining rates are due to delays in budget approvals, there is a chance that their clients are not in the market for programmatic ads right now anyways.
The tides may change by the end of the quarter — and perhaps they did at the end of last month — if those clients release budgets at the end of their planning cycles. But whether those last ditch dollars are enough to repair a quarter’s worth of damage to publishers’ programmatic businesses is up in the air, Hargrave added.
Advertisers are finding fewer reasons to spend on Snapchat.
The ad dollars (or lack thereof) Snapchat raked in over the holiday season makes this all too clear.
Ad revenue over the fourth quarter was flat compared to the same period the year prior. This was the slowest rate of growth since the mobile app floated onto the stock exchange in 2017. And the slump looks set to continue for a while yet.
That’s according to Snapchat’s own forecast, which warned ad revenue could drop by as much as 10% over the first three months of the year.
This protracted slowdown makes sense, considering Snapchat’s business problems. Among them are layoffs, axed initiatives like Snap Originals, the loss of its longtime ad boss and Apple snuffing out its ability to give advertisers effective targeting and measurement.
Whether advertisers are willing to see how all these issues shake out is anyone’s guess. As it stands, it doesn’t look like they are.
Take the clients at The Social Standard, for instance. They haven’t inquired about influencer campaigns or paid advertising on Snapchat in over 12 months, said the company’s founder and CEO Jess Philips.
“That’s incredibly telling to us,” said Philips. “Coupled with the banner ads on the platform’s business site pushing discounts, as a public company I think the writing is on the wall.”
The implication here is that Snapchat’s limitations are finally catching up to the company — at least in the eyes of marketers. As Craig Brown, head of delivery at digital agency Incubeta U.S., explained, “Snap tends to only be included if it was being used prior to TikTok’s growth, and isn’t a platform that is ever pushed by clients, or asked about by CEOs as ‘are we missing out?’”
While it may be too soon to count out Snapchat’s ads business entirely, rewiring it into something more appealing to advertisers won’t be easy — especially when so many marketers aren’t advertising much there in the first place.
This was certainly the case for the advertisers who employ ad agency Blue Wheel Media. In the fourth quarter, ad spending on Snapchat rose just 3% compared to the previous quarter, and only 7% on the same period a year ago.
For context, ad spending on TikTok was a lot higher over a similar period for a number of agencies. The disparity between the two platforms looks set to stretch on well into the year.
“Snapchat spend will slow down initially to start 2023, as brands cut budgets and become efficiency focused,” said Eitan Reshef, CEO of Blue Wheel Media. “Snap will be out because again, it’s more top of the funnel focused, rather than a profitable conversion channel for many.”
The point is that top of the funnel marketing tends to be bottom of the pile for many advertisers in a downturn, when brand building often takes a backseat to more immediate goals. That’s a tough sell for any media owner, even before considering Snapchat’s problems. And it gets tougher still because even if there were marketers chomping at the bit to advertise on the app, there’s a chance they’d be put off by the price.
Granted, Snapchat’s ad prices are not extortionate in the current wave of media inflation. For instance, in the third quarter, the cost to buy 1,000 impressions of ad inventory on Snapchat was 30% compared to Meta for the average advertiser, per agency Tinuiti. But Snapchat’s ads aren’t cheap either — at least not when compared to other platforms. Indeed, the same number of impressions on TikTok are 42% cheaper than Meta.
Put another way: It’s cheaper to advertise on TikTok than it is to do so on Snapchat — something marketers will be watching closely. Indeed, in the midst of a downturn, they’re more sensitive than normal to ad prices. This explains — at least partly — why marketers are taking money they would’ve spent on Snapchat to spend with TikTok.
“Tiktok has almost completely replaced Snapchat as the preferred medium to reach Gen Z for our clients,” said Ellen Prinzi, vp of client service and innovation at entertainment marketing agency FlyteVu. “The app’s growing popularity has created ‘pressure’ on brands to have a TikTok strategy. Another plus is that TikTok has a sleek and easy-to-use ad platform that’s only improving.”
But there’s only so much Snapchat can do to manage this slowdown in the near-term. Not least because it has more ads than ever to sell at a time when demand for them is the weakest it’s been in a while. In the fourth quarter, the volume of ad impressions it could sell rose by 8% versus the year prior, but the company saw a 9% decline in the cost per thousand impressions.
“From our recent conversations with our partners it seems like advertising demand hasn’t improved but it hasn’t got significantly worse either,” said Snap’s CEO Evan Spiegel during the company’s earnings call. “The brand spend has significantly reduced like we saw in the fourth quarter but our direct response business continues to grow in the fourth quarter. In general it seems like our partners are managing their spending more cautiously so that they can react quickly to any changes in the environment.”
As grim as the cloud is over Snapchat’s prospects, it has some silver linings. Its audience is one. Time spent on the app may have decelerated to 7% in the fourth quarter of last year, per SensorTower, but engagement there continues to be strong. In fact, it’s increased since the fourth quarter of 2019 from 58% to 63% over the same period in 2022.
With that said, there’s no point in having users if you can’t cash in. It’s only a matter of time before Snapchat is under significant pressure to kickstart its stuttering ads business.
So far, there have been glimpses of what this plan could look like, from Spotlight to the innovation on augmented reality. More needs to be done, however. The narrative around the ads business in marketing circles borders on apathy at times. Worse still, is that Snapchat’s pitch to the market doesn’t seem to have been able to counter this growing indifference.
As far as Baruch Labunski, CEO of Rank Secure, is aware, Snapchat hasn’t done much about changing its pitch or developing new products. In his view, that is a mistake, as the platform should pitch to more businesses or target audiences that would spend money on products being advertised.
It’s a point that gets to the root of one of the key problems with Snapchat’s ads business: It doesn’t offer much variety. A large chunk (90%) of its ad revenue is anchored in the Commercials and Snap Ads served in the Stories and Discover formats, according to New Street Research. Now might be a time for Snapchat to look at ways to diversify its ad revenue.
The platform already took the first leap toward doing so by launching its subscription model, Snapchat+, in August 2022. But as Brown pointed out, the launch indicated that Snap is struggling to find ways to expand its advertising business.
“By being resistant to change and not evolving like other platforms, Snapchat has a long way to go in becoming competitive amongst other ad revenue strategies,” added Alex Payne, founder of Room Unlocked.
Podcast ad buyers have yet to see notable budget cuts from their clients — though the time of podcasts as the shiny new medium may be coming to an end.
Advertising spend in general has been slowing down, as advertisers’ scrutinize their budgets amid rising interest rates, inflation and overall uncertainty around the economy.
But podcast ad spend is not seeing the same adjustments yet. Four podcast ad buyers told Digiday their clients’ budgets are not getting slashed. Instead, they are continuing to see an increase in brands’ podcast ad spend.
A new report out Tuesday from independent podcast hosting and monetization platform Acast [Editor’s note: Not exactly an impartial party] found 65% of the 500 marketers and advertisers surveyed expect to increase their podcast marketing spend year over year. As for marketers who have previously bought ads against podcasts, 83% expect to increase their spend on the medium year over year.
“Podcast advertising is continuing to experience growth and is still projected to be a $4 billion industry by 2024, so the advertiser interest is undeniable,” Elli Dimitroulakos, Acast’s global head of ad innovation, said in an email.
Despite the fact that ad buyers remain bullish on the medium, the fervor that swirled around podcasts during the pandemic seems to be settling down to a place where podcasts are considered just one of many channels brands can put dollars into — rather than the shiny new place to be.
“Some of the shininess has worn off,” said Molly Schultz, svp of integrated investment at UM. “We have done so much with the technology around it to make it more similar to everything else we do… that’s good for many reasons, but it does then take away from that, ‘This is so different and so new.’ But clients don’t always need that.”
Billing is up for podcasts is up year over year, said Maria Tullin, vp and managing director of advanced and digital audio at Horizon Media. She is continuing to see an increase in podcast ad spend from both existing and new clients in the podcast space, though she did not provide exact figures to illustrate this.
Kristen Coseo, director of podcast and digital audio strategy at Ocean Media, said their clients are pulling back from channels like linear TV and reallocating dollars to podcasts. “Right now, podcasts have just been — on a performance standpoint — killing it for all clients. I don’t think we’ve had one client yet that hasn’t proven successful within [podcasts and streaming audio],” she said.
Ocean Media quadrupled audio ad spend year over year from 2021 to 2022, Coseo said. “I don’t think we’ll see the same growth that we did year over year last year,” she said. Clients are “still overly cautious” right now and the “softness” they’re seeing in other channels will likely trickle into the podcast space. Despite this, Coseo predicts “we’re going to be spending even more than what we did last year” in podcasts.
Podcast ad spend from CMI Media Group’s clients “has gone up 10X” in the last year, despite those brands cutting their spend in other channels, said Mark Pappas, svp of innovation at CMI.
While advertisers remain cautious about creating new budgets at this time, Tullin is seeing clients come in with low test budgets for podcasts, and then returning with “three-times that budget” and adding podcasts to their quarterly or annual media plans, she said. Peloton and Sleep Number are two existing clients of Horizon’s that have recently handed over their podcast budgets to the agency.
“Our budgets are staying the course because we’re letting people dip their toe in and then they’re getting excited about it,” she said.
Compared to last year, Tullin is seeing more performance clients coming in with annual podcast budgets, versus the mostly brand awareness clients they were working with this time last year.
But how can advertisers’ optimism be reconciled with the contraction happening in the podcast production space, with layoffs, cancelled shows and cost cutting hitting the industry?
Dimitroulakos believes this is because production companies are moving away from “the massive multi-million dollar minimum guarantee signings.” But as those large deals that were signed during the pandemic taper off, ads on shows with lesser-known talent — even those with smaller audiences — have “more appealing” prices for advertisers, Coseo said.
The buyers Digiday spoke with said there is plenty of ad inventory available despite the recent reports that investment in new and existing shows may be decreasing. Pappas noted that the number of podcast shows on Spotify increased from 4.4 million last year to 5.5 million as of this month.
Coseo is not seeing a decline in the number of shows booked overall for Ocean Media’s clients, and budgets are not being spread out across more shows, she said.
Developments in podcast ad targeting and measurement tools has only improved the ad buying process, especially with the increasing adoption of dynamic ad insertion, said Schultz.
In fact, there’s a lot of competition right now to book upfront commitments in the top podcasts, Tullin said. The biggest challenge her team is facing is the “frantic booking for stuff immediately and then strategic planning for Q2 through [Q4]. We are trying to do all that right now because we want to book things now to get the best, most efficient upfront rates.”
This week’s Future of TV Briefing looks at the state of advertisers’ adoption of YouTube Shorts as the platform prepares to share ad revenue with Shorts creators.
The key hits:
Not even advertisers have a feel for how much ad revenue YouTube Shorts creators can expect to receive after the platform launches the ad revenue-sharing program for its TikTok clone on Feb. 1. That’s because advertisers don’t necessarily know how much money they’re spending on ads running in the Shorts feed at the moment.
Asked on Monday to what extent advertisers are spending money on Shorts ads right now, VaynerMedia svp and head of investment Jon Morgenstern replied, “That is a great question because the exact answer, at least to our understanding of it right now, is it’s unclear.”
Morgenstern wasn’t the only agency executive I spoke to this week who gave that answer. And the reason that ad buyers don’t exactly know how much money advertisers are spending on Shorts ads is that YouTube has yet to give advertisers the option to buy Shorts ads specifically or to see what share of their overall YouTube campaigns ran as Shorts ads.
In an emailed statement, Nicky Rettke, vp of product management for YouTube’s ad business, confirmed that advertisers cannot currently buy Shorts-only ad placements and that YouTube does not provide Shorts-specific reporting metrics.
“We do not break out performance on YouTube Inventory (home feed vs. in-stream vs. Shorts) as our campaign strategies are designed to drive performance at scale across Google properties and help customers find the right media mix to drive that performance with automated bidding,” Rettke said.
The long and short of Shorts ads
Suffice it to say, a little more than eight months after YouTube officially rolled out ads in the Shorts feed globally last May and as YouTube starts to give Shorts creators a cut of that ad revenue, the YouTube Shorts advertising business remains pretty nascent. But to be clear, it’s not prenatal.
YouTube has been pitching advertisers on advertising in the Shorts feed, which garnered 1.5 billion users per month, as of grandparent company Alphabet’s third-quarter 2022 earnings call in October. In PMG’s 2023 planning meetings with the platform during the fourth quarter, “the conversation was about how to forecast investment for the Shorts product, and quite honestly there was a group of us in the room that said we can’t provide a forecast because it’s something that’s new and we just need to see more robust data, more robust reporting, other brands using it,” said Natalee Cecil, head of brand media at PMG.
There are brands using Shorts ads, though, by virtue of YouTube including Shorts as a placement option for campaigns running across the video platform. And agency executives expect advertiser adoption to increase as advertisers become more interested in the short-form video platform.
“It’s increasing. Launching in ’21 in alpha, beta in ’22, I’m starting to see it really start to progress. I’m definitely starting to see more of the love for it,” said one agency executive.
“There’s a lot of folks that are like, ‘Hey, what are the YouTube Shorts ad opportunities?’” said Morgenstern, adding, “There’s a lot of appetite.”
VaynerMedia has tested running campaigns designed to over-index on Shorts inventory — such as by only uploading vertical video ad assets and limiting ad delivery to mobile devices — and estimated that Shorts ads are 20% to 30% less expensive on a cost-per-thousand-view (CPM) basis versus YouTube’s traditional mobile video ad inventory, according to Morgenstern.
“It’s efficient CPMs, efficient view costs. But it’s a little quicker. The average [view] duration is a little lower. But it seems ripe. It’s where you hope to see it,” he said.
Directed toward direct-response advertisers
To date, YouTube has included the Shorts feed as a placement option for certain types of campaigns running on the broader platform. These campaign types — specifically called “video action,” “app,” “performance max” and “discovery” campaigns — are particularly geared toward performance, or direct-response, advertisers seeking the people who see their video ads to click on them to visit a brand’s site, install its mobile app or purchase a product. Asked when YouTube will support reach and frequency objectives for Shorts ads, Rettke said, “We are thinking about how brand advertisers can leverage Shorts to achieve their reach and awareness objectives, but don’t have anything to share today.”
“I think [YouTube has] been focusing on the lower-funnel tactics because there’s a little bit of a lower risk there versus awareness where you need mass reach to drive awareness,” said the agency executive.
In other words, aiming its Shorts ad product at direct-response advertisers is a way for YouTube to address the chicken-or-egg issue as it starts to share ad revenue with Shorts creators. If brand advertisers seeking broad audiences are going to invest in Shorts ads, they’re going to want to know they’re able to reach a broad audience in the Shorts feed, which means having creators and publishers producing enough Shorts videos to attract a large, recurring audience. And a good way to get creators and publishers to regularly produce Shorts videos is to compensate them directly for that content. But that compensation is contingent on advertisers buying Shorts ads, and, as mentioned, brand advertisers are going to need to see audience numbers before they open their wallets wide.
“Will the monetization [program for creators] provide that mass? Will it yield enough growth? I don’t think we’ll know until it gets underway,” said Cecil.
Another consideration among brand advertisers is brand safety. This is not news to YouTube. And while slotting an ad between videos in the Shorts feed is not the same as inserting an ad in a regular YouTube video, that adjacency still counts as a brand safety concern for certain advertisers. But YouTube has yet to enable advertisers to take the blocklists they use to prevent their traditional YouTube ads from airing on certain channels and apply them to the Shorts feed to bar their ads from appearing before or after those channels’ short-form videos. Last year the platform did extend its three-tiered content exclusion options to Shorts ads, which includes a “limited inventory” option that places stricter guardrails on the types of content that ads can appear against, according to Rettke.
“I mean, it’s all supposed to be brand-safe. So it’s curated within reason there. But again, it’s still YouTube. We all understand the nuances of uploading videos on YouTube and what can happen in that space,” said the agency executive.
Upfront ahead
As for what will happen with YouTube’s Shorts ad business, agency executives expect the platform to address some of the ad product’s shortcomings, particularly the absent ability to buy Shorts ads specifically, the lack of Shorts-specific campaign reporting and the dearth of features designed for brand advertisers. And that shoring up of the Shorts ad product could come as soon as this summer as YouTube makes the rounds to advertisers and agencies in the annual upfront marketplace.
“Their focus is on growth in the upfront this year. And if Shorts is going to be a place for that, then they’re going to look to add it in there,” said the agency executive. They added, “Everything else, I have a pretty good understanding of what YouTube can deliver. Shorts is the one piece where it’s like, ‘Hey, I’m starting to see it, but I need all that full reporting from campaigns and where it’s actually airing through one of my line items.’ Then I can truly start to allocate an upfront towards it.”
“Even if you don’t use music, then your [share of the revenue] pool may be smaller because everyone else has used music. So we’re not going to overthink that. It’s obviously good to understand the system. But I wouldn’t want to drastically change what we do based on this.”
— TheSoul Publishing’s vp of content distribution Victor Potrel on the Digiday Podcast
14%: Percentage share of projected new streaming subscribers that will come from Latin America in 2023.
20 million: Number of paid subscribers that NBCUniversal’s Peacock had in the U.S. at the end of 2022.
$3 billion: Amount of money that NBCUniversal will lose on Peacock this year.
-5%: Percentage decline year over year in U.S. national TV ad spending in 2022.
2.03 million: Number of pay-TV subscribers that Comcast lost in 2022.
145,000: Number of pay-TV subscribers that Charter lost in the fourth quarter of 2022.
Why TheSoul Publishing isn’t overthinking how YouTube Shorts will share ad revenue with creators and publishers:
Listen to the latest Digiday Podcast episode here.
Marketers seek agency-of-record relationships with influencer agencies as influencer marketing matures:
Read more about marketers’ influencer agency relationships here.
Why Vice, BBC, WaPo, others see new TikTok teams as the next wave of specialist publishing talent:
Read more about publishers’ TikTok teams here.
With TikTok’s growing list of issues, should marketers think twice about the platform?:
Read more about TikTok here.
Apple’s MLS ad pitch:
Apple is looking for advertisers to commit to $4 million-per-season deals to advertise against its Major League Soccer streams but isn’t offering any viewership guarantees, according to CNBC.
Instagram’s Reels rev-share dilemma:
Instagram is seeing short-form video rivals TikTok and YouTube Shorts start to split ad revenue with creators, but the platform’s parent company has been wary of sharing revenue from in-feed ads, though that stance may be shifting, according to The Information.
Paramount’s Paramount+ With Showtime:
The company formerly known as ViacomCBS will rebrand its Showtime TV network to be called Paramount+ With Showtime — not to be confused with another Paramount-owned TV network, Paramount Network — according to The New York Times.
Hollywood’s updated Covid-19 guidelines:
TV and film studios and entertainment labor unions have agreed to updated guidelines that no longer require most crew members to regularly test for Covid-19, according to Variety.
Sony’s IP opportunity:
If HBO’s “The Last of Us” proves to have cracked the code on video game adaptations, then Sony — which publishes video games as well as produces TV shows and movies — could become an intellectual property powerhouse, according to The Wall Street Journal.
Over-the-air TV’s holding pattern:
Over-the-air TV’s future is up in the air with the National Association of Broadcasters asking the U.S. Federal Communications Commission to commit to the next-generation ATSC 3.0 standard in a way that will encourage hardware makers to support the transmission standard, according to Broadcasting & Cable.
In celebration of Black History Month, brands such as IPSY makeup subscription, Jack Daniel’s whiskey, and Sirius XM broadcasting are extending their inclusive marketing efforts beyond the month of February.
In recent years, the one-month approach to Black History Month marketing hasn’t worked for brands as consumers have become skeptic of brand marketing, especially inclusivity promises that came on the heels of the Black Lives Matter movement of 2020.
Shoppers increasingly want to reach Black men and women all year long and marketers have shifted their focus, including to keep up with Gen Z, which is more diverse than previous generations. According to Pew Research in 2019, one in every four Gen Zers are Hispanic in comparison to just 12% of Gen Xers in 1987. Meanwhile 14% of Gen Z identifies as Black, 6% as Asian, per the report.
The brands did not immediately respond to requests for comment on how these efforts exactly impacted their businesses, but all pointed to areas of growth, from content to new partnerships with Black-owned creators as ways they have become more inclusive.
Jack Daniel’s is on the third year of its annual Black History Month storytelling campaign to highlight Black-owned businesses, Every Legacy Has a Beginning. The campaign lives on the brand’s social and digital channels, with a year-round website landing page. (Jack Daniel’s, citing internal figures, credited an audience of 15,000 visitors through the site with a reach including 5 million on Meta sister sites).
“For us, it’s really using our platform to story tell and uplift others,” said Keenan Harris, director of multicultural marketing for Jack Daniel’s. “We know that we’re a very, very large brand who has a very, very large voice, and we really want to use that for good when it comes to helping and assisting others.”
It’s an exemplary strategy to show how a brand can participate in Black History Month year-round, according to brand consultants and agency execs.
“The companies that truly earn the support and trust of the Black community do more than just slap a banner or new logo onto their social pages for the month of February,” said Ali Fazal, vp of marketing at Grin, an influencer marketing platform. “They are longtime collaborators and supporters of issues facing minorities, drive the narrative forward, are inclusive in their marketing and staffing, and take a stance on divisive political discourse, even if it alienates some customers.”
During the month, IPSY is honoring Black people and Black history through its Glam Bags, which are personalized beauty products worth more than $50. The February box will feature Los Angeles-based, Black artist Dime Jones and Black-owned beauty brands like Patrick Starr, Mohart, Pat McGrath, and Fenty Beauty. (This news comes as Black entrepreneurs want brands to invest in Black-owned businesses.) (It’s unclear what the financial agreements of this initiative look like as IPSY decline to disclose details.)
Over the last few years, IPSY has focused on Black and Latinx communities and those who identify as LGBTQ+, with plans to invest $30 million in these brands by putting their products in Glam Bags throughout the next year, said Tina Shim, svp of marketing at IPSY. “We want to make sure that all of them have a chance to see themselves reflected in our feed no matter what platform they are on,” said Shim.
Meanwhile, streaming services like SiriusXM and Pandora are rolling out Black History Month programming, highlighting leaders who have made a significant impact on this movement as leaders and innovators.
In addition to Black History Month, Sirius XM this year is focusing more on its YouTube strategy for creating content that will span across sports, Black culture, and pop culture. In order to show up where Gen Z is on the platform, they are running a TikTok radio series with special guests from the platform’s top creators. SiriusXM declined to share which TikTok creators will be appearing as for now.
“We are constantly trying to be of the culture, not just appropriating the culture or trying to act like we’re part of the culture,” said SiriusXM’s svp of brand and consumer marketing, Kim Wilson. “We are truly part of the culture.”
The importance of diversity and inclusion in marketing lies in the way they help celebrate diverse audiences and allow them to discover brands that align with their values, which is something more consumers are interested in. According to Grin’s Fazel brands that show a full-time commitment to diversity, equity and inclusion build a better rapport with minority communities. Especially as consumers have come to embrace authentic advertising.
According to Marcus Wesson, chief creative officer at the ad agency 9thWonder, the brands with notable Black history Month strategies are the ones that embrace a strong interest in the culture.
“When it comes time to honor Black History Month, it can be filled with land mines,” he said.