Month: February 2023

However, ChatGPT has gotten editors talking. They’re encouraging their editorial teams to familiarize themselves with ChatGPT, and are discussing how AI technology can assist journalists with their jobs.

“[We’ve] encouraged all of our editors to play around with it… to see how good it is at at providing answers and crafting stories in a certain voice,” said Emma Rosenblum, chief content officer at Bustle Digital Group.

Editors and chief content officers at BDG, Gizmodo, Forbes, Futurism, Trusted Media Brands and 1440 cited a number of reasons for hesitating before welcoming the technology with open arms — mainly, issues regarding inaccuracies, plagiarism and the underdevelopment of the technology.

ChatGPT is a “catalyst for publications to have conversations around the topic,” said Francesco Marconi, a computational journalist and co-founder of real-time information company Applied XL.

Embracing the new

There’s nothing new about AI technology being implemented in newsrooms. Forbes has its own AI and machine learning tools built into its CMS platform called Bertie to help journalists optimize headlines, generate descriptions and recommend images for a story, for example. The AP has been using AI technology to report on companies’ earnings for years. The Washington Post used AI technology to report on the Olympics and elections.

But the six publishing execs Digiday spoke with expressed both excitement and apprehension by the arrival of ChatGPT and the developments in AI technology.

“A large, disruptive technological change [happens] every ten-ish years, and I think this is the next one,” said Tim Huelskamp, co-founder and CEO of newsletter publisher 1440.

The opportunities

Forbes’ chief content officer Randall Lane and chief digital and information officer Vadim Supitskiy said the technology behind ChatGPT can serve as an assistant and research tool for journalists’ reporting, as it has the ability to scour the internet and spit out an answer to a prompt in moments. Eventually, those capabilities will be something they will want to integrate into Bertie to make their own CMS smarter.

ChatGPT can help journalists parse through large amounts of data or information to find a throughline, for example. It can also help summarize an article, provide variations on a headline and edit for grammar, as well as suggest authors in a relevant beat, Marconi said.

While TMB’s editors aren’t discussing how ChatGPT can be used as a content creation tool, they are experimenting with it as a research tool. Beth Tomkiw, TMB’s chief content officer, said editorial teams are experimenting with ChatGPT to see if it can provide additional ideas on topics to cover in certain verticals (such as asking the chatbot to provide an outline of topics on cleaning and organizing), and to provide lists of categories like “the top 25 books” in a certain year, she said. ChatGPT is an agenda item in TMB’s next monthly content leadership meeting, Tomkiw said.

Using ChatGPT for some of these tasks can one day “free up reporters from the boring, rote stuff,” like covering earnings or other “fill-in-the-blank” stories, said David Ewalt, editor-in-chief of G/O Media’s tech site Gizmodo. “One day, this technology will be a legitimate reporting tool that will help a reporter get the easy stuff done, so the reporter can… call sources and dig in and do the stuff that a computer can’t do. We’re just not there yet.”

The limitations

Despite the possibilities on the horizon, editors are tapping the breaks before speeding into adopting the technology in their newsrooms.

The biggest issue editors had with ChatGPT are the inaccuracies (CNET already ran into this problem).

“There are major, major issues with accuracy, with bias — every vice that is present in human writing on the internet is amplified by ChatGPT,” Ewalt said. “AI systems are nowhere near advanced enough to be able to tell the difference between a reliable source and an unreliable source. They’re just not there yet [and] aren’t going to be for a long time. So they’ll pull information from bad sources and repeat it as fact.”

While journalists make mistakes too, it’s not at the same level or volume as the blunders ChatGPT is making right now, said Futurism managing editor Jon Christian, who broke the news that CNET’s AI-generated stories were riddled with errors.

“If any publisher is thinking about experimenting with this stuff, treat its outputs with the scrutiny that you would treat a reporter doing their first assignment ever. Check everything,” Christian said.

Forbes’ Lane takes issue with the fact that ChatGPT only provides answers based on data available through 2021. “It’s not real time. So if a journalist is trying to write about anything newsy, [ChatGPT] by definition is writing things that are already known.”

There’s also the plagiarism issue. ChatGPT doesn’t clearly share its sources when it answers a prompt. Is it using full sentences someone else wrote? Is it paraphrasing someone else’s idea, without attribution? These are all major issues to consider, Ewalt said. 

As a test, this Digiday reporter asked ChatGPT, “Which media companies are using ChatGPT?” It provided examples of a few publishers. When this reporter asked it to share its sources for that information, all of the links it provided were broken.

At 155 pages long, the complaint is a lot to digest. So, in a series of explainer videos, we’ll break down the primary aspects of the Justice Department’s accusations. The first video in the series covers the basics of Google’s ad tech operation that raised antitrust alarms.

“We have one of our clients that has returned to Twitter ads with our guidance,” said Molly Lopez, partner at digital agency Hite Digital, without naming the client. “The platform is a good brand-fit for the client and the client’s target audience over-indexes on the platform, plus clicks and impressions are dirt cheap at the moment, so it’s a good investment.”

Big discounts can have that sort of effect. And Twitter’s ad sales executives offered some hefty ones to tempt advertisers back onto the platform. The main offer was free space — Twitter matched ad spending up to $250,000 during the Super Bowl. It might not sound like much compared to the cost of a commercial during the game itself, but these discounts funded a large chunk of the ad dollars that were spent on Twitter over the weekend, given pre-rolls, takeovers and video sponsorships can typically set advertisers back anywhere between $350,000 to $600,000 per day.

With this fire sale of sorts, only a fraction of some of the larger brands’ Super Bowl advertising on Twitter would’ve actually come from their actual ad budget. 

“We have brought the Twitter 1:1 match for the month of February to a number of clients,” said Carrie Tropeano Dino, head of media and communications strategy at Mekanism. “A few clients in the tech and CPG space are using this as an opportunity to restart advertising on Twitter and test the response.” 

The economics of rehabilitation

Advertising on Twitter (at least for now) is a low stakes investment for marketers. Nevertheless, many of them still aren’t completely sold on spending their ad dollars there again. They know that audiences haven’t left the platform in droves since Musk threw it in disarray — quite the opposite in fact. But they worry their ads are going to be put in danger, now that the social network is overseen by a self-declared “free-speech absolutist.”

As Tropeano Dino explained:” Some of our more conservative clients have opted not to take advantage of the offer because there are still concerns over brand safety and the impact resuming advertising on the platform could have on their corporate reputation.”

To be fair, Twitter has tried to allay some of those worries in recent weeks with new checks and balances. But so far, they don’t seem to have worked. Advertisers are interested in Twitter but are a long way from giving it their full attention. 

“Elon’s not dumb, and the platform will be better than it was,” said a senior investment exec at a media agency who spoke to Digiday anonymously to protect their working relationship with Twitter. From this exec’s perspective, there’s been some stabilization around the ads business in recent weeks, especially since Musk has taken a step back from those efforts, they said. “Once it’s brand safe again, it’ll do just fine,” they added.

Other marketers are on board with that sentiment.

“There’s still a way to go in terms of Twitter’s rehabilitation among advertisers,” said Ryan Detert, CEO of digital marketing agency Influential, which is working with advertisers mulling the same thing. “They will be watching other big events, whether they’re advertising around them or on the sidelines, over the coming months like the Oscars to see what ends up trending around those moments. They will want to know whether areas of concerns like hate speech and political views bleed into the wider conversation around those moments.”

Don’t expect these views to abate anytime soon.

Twitter’s ad sales boss Chris Riedy can only do so much on the limited resources he has available. For now, Twitter’s rehabilitation among advertisers starts and ends with major discounts to minimum costs, and larger ad credit offerings for those who commit dollars to reserved buys. It’s not a pretty way to sell ads, but it is a means to an end for Musk — the end being better cash flows and revenue, not profitability. 

This will change eventually, of course. 

Until then, the message to advertisers from Musk, while not stated explicitly, is implicitly clear: This is the new Twitter. There are opportunities here for advertisers if they play by his new rules. If they don’t, he doesn’t really care. 

“That’s the thing about Musk — he really is a man with nothing to lose, and he’s running Twitter that way,” said Lopez. “He’s committed to seeing his vision for the platform through, with or without the support of major advertisers. Whether you’re for it or against it, at the very least, it’s making for an interesting phenomenon to watch.”

The case for Twitter

Some advertisers are definitely for Twitter. They’ve continued to advertise on the social network despite Musk’s erratic reign to date. 

“If you asked me objectively whether I’ve seen any big changes to Twitter since Elon Musk took over I’d say no,” said Ivonne Kinser, vp of marketing and innovation at Avocados from Mexico. “Yes there’s some content that’s not positive that could be better controlled by the various mechanisms they have there but that was the same before Musk took over. Maybe they’re doing it in different ways but there are still trolls on Twitter.”

This is one advertiser that wasn’t looking for an easy out when Musk took over and arguably blurred the line between hate speech and free speech. Instead, Avocados from Mexico maintained its ad spending on Twitter, which accounts for 20% of its annual digital ad budget. To Kinser, the social network is still the go-to place for high impact activation during these key marketing moments. As she explained, “What we do as a brand is do our best to stay away from those polarizing conversations and focus on our own brand and products.”

One way to steer clear of those more polarizing conversations is to avoid the traditional auction-bought ads on the platform. Some marketers are doing just that, and are instead advertising on vetted publisher content or on high traffic spaces where the risk of a brand safety breach is lower. Granted, it’s more expensive this way, but the discounts make the outlay easier to swallow.

During the Super Bowl, advertisers did just that. Their pre-roll ads got to appear in 75 clips showcasing past Super Bowl moments as well footage from the week leading up to the match and the analysis content for it. Furthermore, marketers were able to get their ads in 10 videos of real-time highlights during the match, which also ran into the day after. 

“While high engagement is expected — I’m usually most impressed by the costs, with 90% better engagement costs than in-feed tactics and up to 20% improvements in CPM, which is highly varied by the region and publisher of course,” said Kaela Green, vp of paid social at Basis Technologies. “That said, the incremental reach and output from lift measurement studies we have run alongside our buys suggest promising, lasting impact when our brands lean into Twitter’s strengths.”

Clearly, the appetite is still growing on the media agency and brand side. In a study of more than 100 marketers, influencer marketing platform CreatorIQ found that 69% of respondents increased their influencer marketing investment in the past year. Influencer company Open Influence noted a similar trend in a 2023 report on the sector: 64% of marketing executives said their influencer marketing budget will increase in 2023, and some 13% of brands are investing at least $1 million to influencer marketing in 2023.

“Social platforms have permeated every aspect of our lives,” said Maria Rodriguez, senior director of marketing at Open Influence. “What is interesting is that the creator’s influence has an impact beyond the screens. Marketers are maximizing their investments by activating creator content across a wide variety of marketing channels.”

Open Influence’s study also noted that most brands (81%) continue to rely on media agencies to manage their influencer marketing, while 19% manage it in-house. This puts media agencies in a position to steer ongoing conversations on the performance of influencer marketing and shape how compensation will evolve.

“As the influencer market continues to grow, we have noticed [that] the largest increase in rates stems from talent that has representation,” said Alexandra Hunt, senior vp of digital at MSL U.S., a Publicis agency. “Their commission-based model makes for a naturally more aggressive negotiation process.”

How compensation may be changing

When it comes to payment, 20% of marketers said running influencer programs in-house results in challenges across negotiations, contracts and payment flow, according to Open Influence. Some 17.3% of study participants also said developing an effective creative strategy is a major hurdle.

Rodriguez cited other complicating factors that go into determining compensation: “the size of the creator’s audience, creator vertical, the content format required, exclusivity requirements, intellectual property rights, and more. There really isn’t a one-size-fits-all approach.”

This may be where long-term partnerships can be more beneficial, she added, because they are “more cost-effective than one-off or transactional relationships” in building a go-to portfolio of creators that align with their aesthetic at lower costs.

Forming these partnerships and “performance-based contracts” may become more common, said Hunt. She sees the industry shifting to prioritize authority and relevance versus follower counts when partnering with creators. This is where data will play a big part in calculating rates and holding parties accountable for results.

“With increased rates comes increased expectations,” Hunt said. “Leading with data-driven negotiating, we look at a multitude of measurements to help factor individual rates beyond follower count. Monitoring historic spon-con performance and back-end metrics ensures we are compensating based on the expected outcome.”

As Vickie Segar, founder of influencer agency Village Marketing, part of WPP’s Wunderman Thompson, previously mentioned, the trend toward higher compensation is to be expected as more businesses seek out influencers. Additionally, as larger companies and agencies start to leverage influencer marketing, content creators will begin to drive up their prices.

“I do think that there is a correction that’s happening with big brands who are now understanding that they cannot spend $400 million in TV and $300,000 in influencer,” Segar said. “If you’re a DTC brand, all of these big brand players are coming in and now you have more of a crowded marketplace. You have so much demand on these creators, and these creators are increasing their rates.”

Jess Flack, CEO of influencer marketing firm Ubiquitous, runs a platform that helps facilitate pay and negotiations for creators. She also believes this is where stakeholders will rely on data to define rates and a standard pricing model based on engagement. Without basing it on performance data, it is entirely up to how much the brand wants to pay and how much creators will accept.

“We automatically pull the median views over the last nine posts of all creators that have joined our network, and this allows us to send them an offer based on their true performance,” Flack said. “I would also add that pricing and CPMs vary greatly by channel.”

For instance, Flack added, currently that CPM range is about $5 to $10 on TikTok, $12 to $15 on Instagram and $20 to $30 on YouTube.

“Influencer marketing is still a very new industry and there is not a universally accepted or adapted pricing model for how all brands or how all creators set their rates,” Flack said. “In our model at least, if costs do go up, it is because influencer marketing is becoming more effective.”

The challenge in metrics

Measuring impact across social media investments continues to be an ongoing struggle. Not only are there various platform choices and difficulties in acquiring the data, but now agencies are expanding content into augmented and virtual reality – making it difficult to capture insights and analytics across all channels. Ed East, global CEO and cofounder of influencer marketing agency Billion Dollar Boy, sees this demand for larger, integrated campaigns as a sign of the maturing industry.

“[Creators] have outgrown the social media platforms where they first found fame and entered into mainstream media,” said East. “We’re now regularly receiving creative briefs that reflect this evolution in the industry, with more ambitious campaigns and bigger budgets across a wider range of media.”

Campaigns are now developing using creators across display ads, podcast and music services and advertorial content through publishers, he added. “We’ve even launched new products in the metaverse using creators, demonstrating just how ubiquitous creators have become. … The market has become so saturated with influencer content [that] brands, talent and audiences are relying on agencies and effective creative briefs to help them produce content that stands out, while also feeling organic and not overly prescriptive.”

The proliferation in content unsurprisingly results in only 40% of marketers believing it is easy to get accurate influencer marketing metrics, according to Open Influence. Because of common one-off transactions with influencers, it can also be hard to track results overtime, Open Influence’s Rodriguez explained.

“In the past, influencer marketing was mostly focused on driving top-of-funnel results, including awareness, impressions and engagement,” Rodriguez said. “Now with the evolution of social commerce features, we are able to be present in every touch point of the customer journey. To truly understand the ROI of any creator marketing campaign, it’s important for brands to work closely with experts in the space to set clear objectives, define success metrics and evaluate results.”

Flack at Ubiquitous agreed that metrics continue to be a tricky area of the business.

Not only is it hard to identify the right creators to begin with, but Flack said it goes beyond “settling for the standard, inert metrics like follower counts. And then usually, once the post goes live, you face questions like, ‘How do I measure the results from this post?’ That is hard just for a single post, let alone 50 posts that all went live at the same time.”

Color by numbers

As we enter the middle of Black History Month, cultural intelligence firm Collage Group investigated which brands resonate most with Black American consumers, distilling a top 10 out of its research. Using a Brand Cultural Fluency Quotient (B-CFQ) score to determine brand resonance across six different cultural factors (fit, relevance, memories, values, trust and advocacy), the top 10 from top to bottom are: Walmart, YouTube, Lysol, Sprite, Visa, McCormick, Dove, Febreze, Netflix and Google (Alphabet companies got a two-fer in YouTube and Google). — Michael Bürgi

Other stats from the 2023 survey:

• 64% of Black Americans say they enjoy cooking at home, compared to 54% of the general population
• When it comes to social media, 88% of Black consumers follow influencers or content creators on social media platforms, and 42% follow food and cooking influencers/ content creators 
• 72% of Black Americans worry about their finances
• 83% of Black Americans say brands need to be involved in social issues in some respect. 

Takeoff & landing

• Stagwell’s Assembly landed U.S. media AOR duties for financial investment firm T. Rowe Price, which according to Comvergence, increased its media spend to $65 million in 2022, compared to $13.3 million the year prior.
• Sasha Savic is returning to IPG’s UM to be its global CEO, reporting to Mediabrands global CEO Eileen Kiernan, whose former role he now fills. Savic most recently was chief innovation officer for the merged EssenceMediacom, after running Mediacom for nearly a decade, but also worked at Havas Media following an earlier stint at McCann and UM.
• Speaking of IPG, it and Omnicom announced their 2022 financial results. First, Omnicom: the holdco generated 9.4% of organic growth on $14.29 billion in revenue and profit of $1.3 billion. At IPG: organic revenue growth stood at 7%, on $9.5 billion in net revenue and $938 million in net income.

Direct quote

“The timing around [the Joint Industry Committee’s efforts] is aggressive. That’s my only hesitancy … but having an aggressive goal is a smart way to go about things. The full effect of it will take place in the 2024-’25 upfront. But as we build these baselines and standards, the entire industry will benefit …[Nielsen] will have a seat at the table — it’s important that Nielsen One to be a part of this. We believe measurement in today’s world needs to be more modern … and right now there’s a big gap. Think about the technology we have — [measurement] no longer needs to be panel-based. And Nielsen’s working on that themselves.”

— Geoffrey Calabrese, chief investment officer for Omnicom Media Group, referring to the coalition of advertisers, TV sellers, agencies and industry groups that are trying to establish common standards for the future of media measurement. Calabrese took part in a panel session addressing the topic at NBC’s One23 event last week.

Speed reading

• Digiday senior reporter of marketing and tech Marty Swant has been covering the explosion of AI-related developments closely, including a good summation of some of the latest startups to launch.
• I caught up on the latest efforts by media agencies and marketers to shore up their privacy knowledge and efforts, given the shifting sands toward more regulation.
• Digiday’s senior editor of media buying and planning Michael Bürgi wrote about Dentsu’s efforts to support Black-owned media businesses through the third-season launch of the More Than That with Gia Peppers podcast and radio show.

Last week Yahoo announced it is to close its SSP amid a 20% reduction in its overall workforce – its buy-side operations will remain while it will lean on its recently formed relationship with Taboola for its native offering. This emerged just the same day as Big Village Media and its SSP EMX Digital filed for bankruptcy with court documents listing its liabilities as anywhere up to $100 million.

Yahoo

Ari Paparo, founder of Marketecture, told Digiday that Yahoo’s cutbacks were to be expected given the ongoing challenges the sell-side of the market faces as the buy-side of the industry seeks to downsize the number of players they work with.

“I think that, fundamentally, the SSP business is not very attractive … It’s not growing, and it’s very competitive as publishers really treat you like a commodity, they have like 10 or 20 of them implemented on every page,” he added.

“And it’s becoming less attractive because it’s under pressure from the buy-side who’s using SPO [supply-path optimization] to reduce the number of paths that they’re buying from. And also, you have, advertisers and agencies running bake-offs on the supply side to have preferred relationships, this all favors the biggest SSPs in a consolidating business.”

Paparo also noted that reducing Yahoo’s ad tech offerings – the amalgam of multiple different technologies assembled via way of purchases made by multiple management teams – makes sense for its current PE-backers Apollo Global. “That can be a tough business to manage where you have a lot of legacy deals and technologies,” he added, “cutting that could to a lot to improve their finances.”

‘Sustainability’ is (ironically) reducing ad tech’s numbers

Meanwhile, multiple sources also noted how SSPs are starting to face challenges from previously unforeseen quarters, such as brands’ environmental, social, and governance commitments; pledges that (theoretically) prompt them to work with fewer partners.

Matt Barash, svp, Americas & global publishing, Index Exchange told Digiday a decontamination of the ad tech supply chain is on order and that primaries on either tier of the ecosystem should limit their risk. For instance, safeguards around which companies they enter credit agreements with – the Big Village and EMX Digital Chapter 11 filings filed earlier this week list several creditors with unsecured claims in excess of $1 million – and more attention to detail are advised. 

“It’s very clear that agencies and media companies want to do more with fewer,” added Barash, “They don’t need as many partners as they once had. 

“In a world where profitability is paramount, they have to be selective over who’s providing not just the opportunity to spend on the buy-side, but also how profitable those connections are.” 

For Barash, it’s the companies that have invested in the infrastructure required to drive more profitable integration paths that are now starting to pull ahead.      

Creditors likely to be out of pocket

Sources have noted how developments are an echo of the 2019 bankruptcy of Sizmek — then a full-stack ad tech offering before it was sold off piecemeal — as dozens of creditors are likely to be left out of pocket in the case of EMX Digital.

In the weeks leading up to EMX Digital’s bankruptcy filing, bankers representing the ad tech outfit were understood to have been soliciting potential interest from suitors dubbing it an opportunity at “risk-based pricing” according to documents seen by Digiday. Although, separate sources indicated that the Feb. 8 filing meant that any such deal was unlikely.

“If you were one of the [potential] buyers, you’d have made a deal pre-bankruptcy to get the SSP side of the business,” said one source with direct knowledge of the legal wrangling, who requested anonymity.

“Even if there is a new iteration of it, I think you’d get a lot of backlash from DSPs and agencies that don’t want to work with it … there’s lots of different sources to inventory on Pluto TV [one of the largest unsecured creditors according to EMX’s bankruptcy filing].”

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Multiple sources told Digiday that while the latest developments are likely to have credit managers tightening the reins when it comes to which parties can spend on their platform, they highly doubt the implosion of EMX will lead to a more widespread contagion in the sector.

Nick Carrabia, evp at OAREX, an invoice factoring company, told Digiday that it would “be speculative” to predict any domino effect following last week’s bankruptcy filing. Although his outfit, which assists clients (such as publishers) with cashflow in return for taking ownership of an invoice, has noticed that sell-side ad tech companies are getting increasingly lax on payment terms.

“In our recent payment studies, EMX had been paying late,” he said. “In H1 [2022] programmatic payments across the whole portfolio had been coming in about two days early, and while they have been getting later, in our upcoming [H2] report it looks like they have been coming in on time.”

In December 2022, mobile gaming installs were 5 percent higher than the average for H2 2022, with that figure increasing to 22 percent in January 2023, according to data shared with Digiday by Adjust. 

“There could certainly be some behaviors and patterns that emerge during this time period that favor gaming more,” said Hank Patton, CEO of the mobile game studio Random Logic Games. “Certainly more than a productivity kind of app would expect, when people aren’t working and are home trying to take a break.”

The rise in mobile gaming installs in December was followed by a boost in in-app purchases in January. In-app mobile gaming purchases last month were 12 percent higher than the H2 2022 average, according to Adjust’s data. 

“The kind of increase in net revenue that we see comes as a result of rapidly acquiring users at a much lower cost than was available for the last six weeks before the Q5 period,” Patton said.

In a gaming industry in which consumer spending decreased by five percent in 2022, mobile gaming is on the rise — and its best numbers for the year have come in over the last two months. As gaming companies and tech firms alike look to expand their inventory and weather the recession, these improved numbers “certainly could be used” to shore up mobile gaming studios’ acquisition dreams, according to Patton. 

“The high-level rationales are going to continue to be what EA and Take-Two did, in terms of expanding their mobile footprint, because the market favors diversification across platforms,” said Chris Petrovic, Chief Business Officer of the mobile game developer FunPlus. “Much like the movie business, you have to have scale in order to weather the downturns, and also to be able to invest in future growth — and we’re seeing that bearing itself now.”

The potential for M&A activity is welcome news to smaller mobile gaming studios, who often expand with an eye towards future acquisitions. And the Q5 bump to mobile gaming revenues is evidence that the best way for mobile game developers to get snapped up might just be to keep doing what they’re doing. Whether they get acquired or not, 2023 is shaping up to be a good year for mobile gaming.

“Our CEO has built the company to sell sometime; we have to exit sometime,” said Berkay Celik, director of strategy for the mobile game studio Ace Games. “But we do not have plans on this now, because we’re focused on the product.”