Month: April 2023

No matter what happens with generative AI, its disruptive forces are already beginning to play a role in the fast-approaching US presidential race.

McKinney’s first work for Popeyes debuts a new positioning for the brand, fittingly titled “We Don’t Make Sense, We Make Chicken.” The 30-second spot revolves around New Orleans culture and is set to air on digital channels next month, before nationwide out of home and TV activations launch in June. The short ad packs a…

Marketing leaders play a key role in building momentum around sustainable practices but lag behind other business functions, according to new data from the World Federation of Advertisers (WFA) and Kantar’s Sustainable Transformation Practice. The report, released this week, drew on survey responses from more than 900 client-side marketers from 48 countries as well as…

Minimal growth and lower spending on advertising are forecast for the British sector in 2023 due to ongoing economic uncertainty, with the latest figures from the Advertising Association/WARC Expenditure Report forecasting a 0.5% increase on last year’s $43.13 billion (34.8 billion pounds) spend. According to the latest industry report (released within a week of others…

This story was originally published on sister site, Modern Retail.

Amazon search results are no longer showcasing so-called “editorial recommendations,” marking the end of an opaque program that many viewed as pay-for-play.

For years, Amazon had a program called Onsite Associates — known internally as OSP — that worked with publishers to match top-rated products with editorialized blurbs. For example, in a screenshot taken in 2021, search results for masks had a section from the blog Gear Review that showcased the publisher’s top picks. According to sellers, despite the high positioning in search results, the placement brought mixed results — likely having to do with the fact that brands offered the spot had to meet top-seller performance metrics like having more than 100 reviews and a rating above four stars.

But at the beginning of the month, Amazon took out that section of the search results and replaced it with more ad units. “At Amazon, we’re always experimenting and evaluating the potential of our products and services to deliver customer value, and we regularly make adjustments based on those assessments,” wrote Amazon spokesperson Keri Bertolino in an emailed statement to Modern Retail. “While we’ve made the decision to discontinue this specific experience that uses article content from publishers, we are actively exploring new opportunities to test where and when we show articles across Amazon to ensure we’re showing customers the most relevant and helpful content for their shopping journey.”

For many sellers, this is a welcome change — as it could bring down the cost of ads and make the search experience less cluttered. But there has been a cottage industry growing for years capitalizing on connecting sellers with publishers participating in the OSP program.

“People paid PR firms to get access to it,” said Jon Elder, CEO and founder of Black Label Advisor. If a product was chosen by a publisher, it could get top billing on the results. “It took up a huge spot on the search results,” Elder said. “It was very in your face — a really really high-value spot.”

But it seems like Amazon is focusing on other ways to work with publishers rather than having their content synthesized on search results. “Back in August of 2021, there was a major shift in the Amazon OSP content,” said Kris Weissman, general manager of SellerRocket, an agency that does PR for e-commerce clients. Amazon, Weissman said, told publishers that posts needed to be formatted in a very specific type of way in order to get placement on Amazon. Internally, it seemed clear that Amazon was in the process of de-prioritizing the OSP program.

“Overall, transactions and performance from the content was declining,” Weissman said.

As such, agencies like his have been working on growing other areas of the business. With OSP being sunset, publishers aren’t being paid commissions for editorial content that is posted on Amazon. But that doesn’t mean all publisher-Amazon relations are dead. “[Publishers] still get affiliate fees from their own native content,” said Weissman. “It’s just not any content that lived on Amazon.”

With that, “we are already shifting [our focus] to the native publisher content,” he said.

Weissman wasn’t the only one noticing the editorial recommendations not leading to conversions. “When you look at impressions and opportunity, it just hasn’t been performing,” said Abi Harmon, CEO of Perpetua. “They’ve been looking to replace it with something that’s going to be a better customer experience.”

Harmon added that it may mean that agencies will have to rethink editorial strategies. The focus will no longer be about getting a spot on a list at the top of the search results, but instead focusing on the editorial placements that are known to drive organic traffic. “I do think it’s going to be a pivot of looking at measurement and attribution,” she said.

For most onlookers, this move isn’t a huge shock — in fact, many expected it. “Us as a business had been pivoting to external content over the years,” said Weissman. “That’s where, one, the value was and, two, what the brands were wanting.”

On the seller side, too, this could be seen as good news. “Most third-party seller are happy with the change because it’s been replaced by another PPC ad slot, so bids are going to go down,” said Elder. “That’s opened up a whole other suite of advertising opportunities for sellers — it kind of levels the playing field.”

As cannabis usage becomes more mainstream, fast-food-chain Jack in the Box is fanning the flames of its cannabis-friendly marketing strategy, further catering to late-night snackers, to drive traffic and ultimately boost sales.

The California-based food chain is pushing the envelope further, building off of previous cannabis-friendly campaigns, in response to recently relaxed cannabis and CBD regulations across states like Minnesota, Delaware and New York. Advertising platforms like Twitter and Google have also relaxed bans. 

Last week, in celebration of 4/20, Jack in the Box rolled out a partnership with WeedMaps, a marijuana-focused online platform, allowing people to map out locations to food truck activations and their nearest Jack in the Box location. It’s the first time Jack in the Box has officially partnered with a cannabis brand.

This builds on prior activations dating back to 2013 when the fast food chain launched its Munchie Meals, its partnering with Snoop Dogg in 2017 and its Jack Loves Trees campaign in 2022.

“We’ve gained equity with this community with craveable snacks available all night long,” Ryan Ostrom, Jack in the Box CMO, said in an email to Digiday. “Legalization has made campaigns like these more accepted in many of our markets.” 

It’s unclear how much of Jack in the Box’s media spend is going toward cannabis-friendly marketing as the company declined to offer specific figures. However, Ostrom said of the partnership with WeedMaps, “the partnership occupies a very small fraction of our total spend for the campaign.” Those dollars were spread across social media platforms and with influencers partners to boost reach and awareness, Ostrom added. 

“We have a wide range of consumers, so ultimately this is a small portion of our budget, but we feel this investment is a great place to secure brand love, favorability, and engagement from a specific segment — the cannabis consumer,” he said. Outside of the 4/20 campaign, Jack in the Box spends its ad dollars of social and digital media, radio ads, out-of-home and digital navigation ads to reach consumers on the go.

In January of this year, the fast food chain spent $6.5 million on media, according to Vivvix, a Kantar company, including paid social data from Pathmatics. Last year, Jack in the Box spent more than $74 million on media. That figure is significantly less than the $119 million the brand spent in 2021. 

Historically, cannabis and marijuana marketing has lived in the fray, barred from mainstream brand partnerships and direct response marketing channels, like social media or paid search. Although it remains illegal at the federal level, more than 21 states have legalized adult-use marijuana. Ad restrictions on Google and Twitter have laxed. And according to a recent Pew Research Center survey, 88% of U.S. adults say that marijuana should be legal for medical and recreational use. Agency experts say they expect to see more partnerships between mainstream brands and cannabis or marijuana brands as it becomes more normalized.

“As cannabis becomes legal in more states and increasingly embraced (or at least tolerated) by most Americans, we can expect to see a rise in non-endemic brand partnerships between cannabis and mainstream brands that just make sense,” Lisa Weser, founder and CEO of Trailblaze marketing agency and evp of Acceleration Community of Companies Advisory, an in-house strategic marketing consultancy, said in an email to Digiday. 

Overall, there’s a shift happening in what Americans consider to be taboo, and per Ostrom, Jack in the Box plans to continue growing in that space along with the audience segment. 

“We’ve been playing in this space for a while,” he said, “but as more brands follow our lead and try to latch onto the trend, we’ll look to stay at the forefront of cannabis culture and continue to find fun, innovative ways to serve this community in ways that only Jack can.” 

This is the second installment in Digiday’s two-part series covering the top ad-supported streaming services. In case you missed it, the first installment provided an overview of the various platforms’ offerings, including pricing and plans, ad software and ad innovations, as well as an analysis of the platforms where brands and agencies distributed the bulk of their 2022 ad budgets and ad placements.

Streaming claimed the largest share of U.S. TV viewing in July 2022, according to Nielsen — a first after four consecutive months of hitting new viewership highs. What’s more, Americans have been adopting ad-supported streaming services at a faster rate than purely subscription-based options: The number of U.S. homes streaming ad-supported streaming services increased 29% in 2022 versus a 21% increase in the same period for non-ad subscription-based streaming services, according to Comscore’s June 2022 State of Streaming report.

To appeal to brands and consumers alike, the top ad-supported streaming services offer a variety of plans and pricing, device availability, ad and software innovations, and ad targeting capabilities, all in the hopes of winning advertisers’ dollars and viewers’ attention. 

In this second installment of our two-part series on ad-supported streaming services, we dive deep into the results of Digiday’s recent survey of brands and agencies to analyze how advertisers’ preferences match up with the platforms’ offerings. We also examine challenges advertisers face when placing ads on ad-supported streaming services and how they measure campaign success on the platforms, and we provide a guide to which platforms are right for key advertiser needs. 

Digiday identified the top-earning ad-supported streaming services by 2022 ad revenue and also included other popular platforms selected by the Digiday editorial team for their prominence. Here are those platforms in alphabetical order: 

• Amazon Freevee
• Discovery+
• Disney+ Basic with Ads [launched December 2022]
• Hulu
• HBO Max (Ads) [transitioning to Max on May 23]
• Netflix Standard with Ads [launched as Netflix Basic with Ads, November 2022]
• Paramount+
• Peacock
• Pluto TV
• Samsung TV Plus
• The Roku Channel
• Tubi
• YouTube

Digiday surveyed the 13 ad-supported streaming platforms for basic data, including plans and pricing, launch date, device availability, audience size, and ad software. Digiday updated data for platforms that did not provide updates when possible based on available information. 

Digiday interviewed executives at Hulu, Peacock, The Roku Channel, Tubi and YouTube about their platforms’ ad offerings and recent innovations. 

Digiday fielded a survey in February to 49 brands and agencies on their streaming platform buying behaviors and preferences. Netflix Standard with Ads [formerly Netflix Basic with Ads] and Disney+ Basic with Ads were included in the survey, but do not appear in the results charts due to nascency and lack of data.

Chief among the options brands weigh when deciding on which streaming services to place ads are the ad attributes themselves — factors such as ad break length, the number of ads in a pod and whether viewers are exposed to the same ad too often. Advertisers and platforms alike don’t want to alienate viewers with lengthy breaks and repetitive messages. 

To assess the value of various ad attributes to advertisers, Digiday asked brands and agencies which they considered to be most important for platforms to offer. Short ad-break length (30 seconds or less) and frequency capping tied at first place as the most important ad options for platforms to offer advertisers, with almost half (48%) of brand and agency respondents selecting each of those options, respectively.

When it comes to frequency capping — one of the two most important ad options — the issue advertisers generally run into is that individual viewers are exposed to the same ad too many times in a given week. Typically, advertisers try to limit a video ad being shown to the same person to two to three exposures per week. However, sometimes viewers are served the ad more than three times that threshold, creating a negative brand experience for consumers. 

“If you look at an average brand, their CTV frequency curve looks as bad, if not worse, than their linear [TV] frequency curve,” said Mohammad Chughtai, global head of advanced TV at MiQ, which specializes in managing programmatic buying for advertisers and agencies. 

Advertisers also struggle to rein in ad exposures across differing streaming services. Individual platforms can cap ad exposures within their own services, but if a person uses multiple ad-supported streaming services each week and an advertiser is running a campaign across each service, that person is prone to see the ad in excess. 

Cheryl Gresham, CMO at Visible, Verizon’s mobile virtual network, said she’s aware of the negative impact of repeatedly serving the same ad to viewers. “The AVOD piece that I struggle with … is making sure that we are not spamming the consumer,” Gresham said. “Seeing the same ad over and over again makes a viewer frustrated. When it comes to any video advertising, [it’s important to make] sure that we’re able to include frequency caps and certain — I’ll relate it to linear — buy guidelines to ensure you’re not hitting a person too much that it becomes wasteful.”

Among the platforms Digiday surveyed, nine confirmed that they offer frequency capping: Amazon Freevee, Discovery+, HBO Max (Ads) [soon to be Max], Netflix Standard with Ads, Peacock, Samsung TV Plus, The Roku Channel, Tubi and YouTube. For example, Tubi’s Advanced Frequency Management tool, which the company launched in 2020, reduces ad repetition by scanning frames to algorithmically identify logos and text. It prevents advertisers from placing multiple ads from a brand in the same program when advertisers buy from numerous aggregators and prevents targeting the same households multiple times.

Jenny Burke, evp of advertising strategy at NBCUniversal, said Peacock imposes its own restrictions on ad frequency, which is no more than one ad per 30 minutes and four ads per day per brand. “We know from just our own consumption behavior or research that frequency has been a problem for consumers, which has made them go elsewhere,” Burke said. “And obviously advertising plays right into churn and we’re all in … to make sure that advertising is additive to the experience versus potentially deterring consumers.”

The other side of the frequency capping coin is that sometimes advertisers grapple with reaching viewers a sufficient number of times. A study published by ad tech firm Innovid in 2021 that tracked 36 connected TV ad campaigns found that 85% of households were only shown a given ad one or two times during a campaign.

Brian Albert, YouTube’s managing director of media partnerships and creative works, said ads placed on YouTube fail to reach some viewers often enough precisely because of the streaming service’s size. “It’s largely due to just the scale of the platform,” he said. “You could spend a lot of money in a week and your ad may only reach the same person one or two times.”

To address this, Albert said YouTube launched a Target Frequency tool for advertisers late last year. “It basically enables advertisers to set their optimal frequency per week, up to four exposures, and then our system will optimize delivery to maximize unique reach at that frequency,” he said. “If you’re used to seeing one to two times frequency per week, and you know that three to four times frequency is going to deliver better results because you’re not hitting that point of diminishing return, then being able to essentially manage the delivery to hit that target frequency is game changing for clients.”

Tied in first place with target frequency as the most important ad option for platforms to offer advertisers was short ad-break length (30 seconds or less). Among the platforms Digiday surveyed, eight confirmed that they offer short ad-break length: Amazon Freevee, Discovery+, HBO Max (Ads) [soon to be Max], Netflix Standard with Ads, Peacock, Samsung TV Plus, Tubi and YouTube.

The ability to provide viewers with shorter ad breaks matters to advertisers for much the same reason as frequency caps do — advertisers run the risk of alienating viewers by showing them too many ads at once. Lengthy ad breaks create an interruption that distracts the viewer from the main video, potentially causing annoyance and a negative brand experience. 

YouTube’s Albert said the effects of ad breaks that are too long can snowball quickly. “If we’re serving too many ads, we’re going to see that because our viewers won’t show up and watch as much as they did,” Albert said. “And if they don’t show up, there’s a loss of an opportunity for creators to showcase their content. … [User experience] is ultimately what is most critical and influences our decision making around how many ads you’ll see in a single user session.”

Coming in second after short ad-break length and frequency capping, survey respondents said fewer ads (fewer than four in a pod) was the most important ad option for platforms to offer advertisers. Nearly one-third (31%) of brand and agency respondents selected this ad option. And, among the platforms Digiday surveyed, nine confirmed they offer fewer ads in a pod: Amazon Freevee, Discovery+, HBO Max (Ads) [soon to be Max], Netflix Standard with Ads, Peacock, Samsung TV Plus, The Roku Channel, Tubi and YouTube.

Having fewer ads in a pod is preferable to many advertisers because limiting the number works hand-in-hand with limiting overall ad-break length. Previous reporting by Digiday found that owning the first and last slot ads within a pod is also important to advertisers because those slots are more likely to be seen by audiences since they are placed closer to the content a viewer actually intends to watch.

In April 2022, nonprofit research and development consortium IAB Tech Lab released OpenRTB 2.6, an updated protocol for programmatic advertising that includes support for pod bidding. Pod bidding allows advertisers to bid on specific ad slots within a multi-ad break or pod — an option that has always been available to traditional TV advertisers. 

If implemented by streaming services, adopted by advertisers and supported by demand-side platforms, this fix could thread the needle between maximizing ad revenue and minimizing ad exposures. “It’s going to provide a lever to get that nice balance between monetization and engagement of content upfront,” said Adam Markey, director of product management at Roku.

After “fewer ads in a pod,” limiting the total minutes of ads shown during a block of programming to five or less was brands’ and agencies’ next most important ad option for platforms to offer advertisers. However, only 17% of respondents selected small ad load (less than five minutes per hour) as the most important ad option, making it a distant third to pod size.

Keeping in line with its lesser importance to advertisers, among the platforms Digiday surveyed, only five confirmed they offer small ad loads: Amazon Freevee, Netflix Standard with Ads, Peacock, Samsung TV Plus and Tubi. 

Tubi, for example, offers four to six minutes of ads per hour, which Tubi’s Chief Revenue Officer Mark Rotblat said strikes a balance between advertiser and audience needs. “Our priority is creating the best viewing experience possible to keep users satisfied and engaged,” Rotblat said. “We’ve found that this ad load doesn’t overwhelm our viewers and keeps our advertisers happy.”

Ultimately, the most important ad options for platforms to offer advertisers depend on an individual advertiser’s needs and the products it sells. Instacart CMO Laura Jones said that for a company like hers, which isn’t a consumer packaged goods company but does sell that category of products, it pays to take a more holistic approach. 

“It’s a little more of a nuanced value proposition where you have to really make sure people understand the breadth of goods that we can deliver,” Jones said. “We’re less focused on, for example, frequency capping or the specific attributes of the platform. We’re taking more of a portfolio based approach saying, ‘Where are we going to get that value for our media dollars?’”

YouTube’s Albert said his company’s research shows that having the right mix of ad formats, rather than one specific ad option, is most important. “We’ve found that the most effective storytelling on YouTube happens when clients have a full suite of creative assets at their disposal, meaning they have six-second ads, 15-second ads, long-form ads, vertical ads,” Albert said. “So we spend a lot of time talking to clients about the need to have a mix of assets ready, … so it’s not just about innovative ad formats. It’s also about ad format mix.”

Once advertisers have settled on which ad platforms to place ads and what ad options are the most important to have, they naturally want to measure the success of the campaigns they’re running on those platforms. To do that, brands and agencies consider a range of metrics, everything from watch time to impressions to click-through rates. 

Among the brands and agencies Digiday surveyed, watch time/view duration/average completion rate was the No. 1 success metric that advertisers consider for the top three streaming services where they place the majority of ads. Forty-eight percent of respondents said this constellation of attention metrics was most important for Hulu, 45% percent said so for YouTube and 40% said the same for The Roku Channel.

It’s not overly complicated to understand why watch time/view duration/average completion rate comes in as the top success metric for advertisers on almost all platforms, and particularly on the services where advertisers place the majority of their ads. Put simply, no one wants to spend money on ads that aren’t being watched. 

Casey Terrell, CMO at Krystal Restaurants, said an important part of achieving completed views is to strike the right balance of providing ad content that engages customers without annoying them. “I want you to see my message, but I don’t want to infuriate you with 30 seconds of having to look at my brand spot,” he said. “It’s very subjective, but we try to get research and clicks.”

“The other side is the type of [ad] content you’re putting in front of — pre-roll, especially on YouTube,” he added. “If [the viewer is] trying to get to content that’s [time sensitive] or really important … seeing pre-roll in front of it will really upset customers. … We need the eyeballs and engagement, and somebody to complete [a view], but where was the brand love in there? You can really upset customers if you don’t think about it that way.”

Visible’s Gresham said her company monitors how many of their video ads are skippable versus non-skippable, in addition to assessing how well customers receive the ads. “It’s something we watch closely,” she said. “For us, with such low brand awareness, we have to ensure that we have a certain amount [of ads] that are non-skippable. However, we use a lot of social listening to see if we’re breaking through with people. Is the message resonating with them, or is it upsetting them?”

Ad-supported streaming platforms have an equal, if not greater, interest in making sure viewers stay engaged with advertisers’ content for the duration of ads in order to retain their valuable ad dollars. YouTube’s Albert said his company takes numerous factors into consideration when assessing a campaign’s success. 

“We will look at a range of metrics and signals to try to measure user satisfaction, things like view through rates, skip ads, satisfaction surveys,” Albert said. “We’re also obviously very concerned about how well an ad campaign performs for the client, so that’s a factor as well. But it does really come down to striking the right user experience balance, so that we’re keeping this ecosystem in harmony between viewers, advertisers and creators.”

NCBUniversal’s Burke said Peacock conducts research to understand how long viewers stay engaged not only with ad content, but with platform programming too. “We do ad impact studies as well that are more traditional, through the purchase funnel from brand awareness down to purchase intent, and how our formats perform vis a vis the marketplace,” Burke said. “In 2022, we were at 98% completion rates for our ads. [In terms of] engagement … our subscribers are doing more than 20 hours per month and advertising is a piece of that, right? If advertising wasn’t done well, viewers wouldn’t [complete] that same amount of time.”

In March of this year, Tubi announced its Alternative Audience Measurement tool as part of a larger marketing integration. The tool lets advertisers measure their campaigns using Comscore Campaign Ratings and VideoAmp Audience Measurement and, according to Tubi, gives them the ability to test a variety of partners and to measure reach, frequency and attribution on Tubi. 

“While viewer engagement is a key metric for advertisers, we also weigh in on various viewer conversion and retention metrics,” said Tubi’s Rotblat. “Our goal is to maximize the value exchange between our viewers and advertisers so that it’s a positive and beneficial experience for both.”

Impressions was the top success metric — or of equal or more importance as watch time/view duration/average — on platforms where brands and agencies devoted a mid-range of their ad placements. Fifty-seven percent of respondents said impressions were their main metric of success on Pluto TV; 44% said so for HBO Max (Ads) [soon to be Max], Discovery+ and Amazon Freevee; and 38% said the same of Peacock and Tubi. 

Impressions, which measure how often viewers are exposed to the initial in-stream portion of a video ad, can help drive the shift of TV ad dollars to streaming by providing a commonly understood measure of ad-supported streaming’s performance in the language of ad views. Platforms are keen to offer this data as proof of scale as they seek to grow their streaming businesses and to woo advertisers away from traditional TV, using it to paint a richer, often demographic-based picture of their audiences. 

Roku, for example, already provided impression-level data for marketing mix models that break down campaigns by designated market areas, i.e. groupings of U.S. cities and ZIP codes like New York, Honolulu and Montgomery-Selma, Alabama, that TV and radio advertisers historically refer to when measuring campaigns. 

But, in April 2022, Roku struck deals with four marketing tech providers — Analytic Partners, Ipsos MMA, IRI and Nielsen — to expand that data set. “What we’re trying to provide is a little bit more information on creative type, daypart, more granular view of DMA so that you can get even down to the ZIP code to provide a little bit more granularity into those models for each one of those measurement partners,” said Asaf Davidov, head of ad measurement at Roku.

Advertisers are eager to have impressions data, like what Roku offers, because impressions give a basic assessment of how many — and which types of — people are viewing ads on a particular streaming service. By calculating the number of impressions a campaign generates, brands and agencies can determine how far a streaming platform, and a campaign, are really reaching.

While watch time and impressions are important metrics to help advertisers measure audience reach, they don’t quantify how many people took action after seeing an ad. That is where clickthrough rates come in. Clickthroughs measure the total ratio of impressions to clicks, or in the case of streaming, how many viewers took action when watching an ad by doing things like scanning a QR code with their smartphone, speaking into a remote control to request more information about a product or to make a purchase — or simply clicking on a button.

It is perhaps not surprising then that shoppable ads have emerged as a leading ad innovation among the platforms surveyed for this report. Amazon Freevee, Peacock and The Roku Channel all said they’ve put effort toward expanding their shoppable ad offerings in the last 12 months. Interestingly, however, no survey respondents said clickthroughs were an important success metric on Amazon Freevee or Peacock, and only 7% said they were on The Roku Channel. Perhaps their recent investments in new formats will make this a more essential metric in future years.

Overall, clickthroughs were less important to advertisers than watch time and impressions. They were most important to advertisers on platforms that ranked lowest in advertisers’ 2022 ad placements and ad spend, such as Samsung TV Plus, Pluto TV and Paramount+. 

Visible’s Gresham said success metrics can be different for brands with lower consumer awareness and that traditional key performance indicators don’t always tell the full story. “A lot of times my KPI, my CPM or my view-through rate will be 20% more effective by moving [A to B], and that’s important, but what’s most important is how does that connect back to my cost per order, my cost per add to cart?” Gresham said. 

“Last year, our media team was testing out a new partner and the KPI they had been given was site visits. The new partner was driving a ton of site visits so everybody was high-fiving and saying great job … but when you pull it through to add to cart and cost per order, it was zero,” she added. “We learned that site visits wasn’t the right KPI and quickly pushed on changing the KPIs. So, it was a hard learning, but a great learning.”

Beyond providing ad options and measurement tools to assist advertisers in their quests for effective ad campaigns, platforms also offer brands ad targeting options based on viewer watch behavior and demographics like age, geographic location or gender via demand-side platforms. DSPs automate the ad buying process for advertisers, and most platforms have relied on the targeting capabilities built into a handful of top DSPs, like Adobe Ad Cloud, The Trade Desk and Yahoo, to attract advertisers as they boast about the niche segments they can target through the DSPs.

Digiday’s survey results show that, in fact, the majority (60%) of advertisers said it’s more important for ad-supported streaming services to offer premium or targeted audience reach capabilities than it is for them to offer higher total audience reach (chosen by 40% of respondents).

Targeting a niche audience is important to many brands because it gives them the ability to focus almost exclusively on the specific part of the market they’re trying to reach. As a result, the return on investment may be higher because they’ve presumably spent their marketing budget efficiently, targeting only the consumers they know are in the market, or fit the specific demographic, for their products. 

YouTube’s Albert said his company has been encouraging clients to consider a more premium/targeted audience strategy. “The conversations we’re having now with clients is that if you open up the aperture a little bit and go beyond just broad demo targeting — instead of targeting adults 18 to 49, think about reaching some advanced audiences — and marrying that with target frequency, now you’re getting the best of the best Google AI capabilities to ensure that you’re delivering the right ad to the right person at the right time to drive the best outcome,” Albert said. 

It should be noted that YouTube has access to some of the most extensive targeting capabilities through parent company Google’s DSP (Display & Video 360), the dominant DSP in streaming and online advertising. Offering premium or targeted audience reach may not be as simple for smaller or newer platforms with less access to first-party data reserves for targeting. 

Netflix Standard with Ads, for example, debuted in November 2022 with limited ad targeting options, and the service struggled to meet advertisers’ audience number expectations as well. That can be particularly frustrating for brands and agencies that have their own first-party data that they’d like to match with platforms’ data, according Laurie Crowley, svp and group director of investment at Havas Media. 

“We know that some of these premium ad-supported tiers that just came into the marketplace did come in with very limited and/or no targeting,” Crowley said. “And I think that is so key right now for clients that are dedicating a lot of resources to developing their own internal strategic targets using their first-party data. And to be unable to transact on that at least in the nascent stages of some of these top-tier streaming networks, I think it’s challenging and frustrating for clients.”

“I do think that that’s part of the issue is that those audiences might not be there at scale to be able to target on a more granular basis,” she added.

As advertisers strive to reach their coveted premium audiences, the majority of brands and ad agencies said DSPs are still the most important ad software to achieve their targeting goals. More than half (56%) of survey respondents said DSPs are the most important ad software for ad-supported streaming services to offer advertisers. The need to use a variety of DSPs is a given for advertisers because some DSPs have exclusive access to certain inventory while other DSPs have exclusive access to specific user data — like Google’s D&V 360, which has access to YouTube’s inventory. Therefore, advertisers can’t use a single DSP to consolidate a full CTV buy. 

However, perhaps of more interest is the percentage of advertisers who said platforms’ proprietary ad buying tools are the most important software for platforms to offer advertisers. More than one-third (35%) of brand and agency respondents said self-serve ad buying tools, such as Hulu’s Ad Manager, are the most important ad software for ad-supported streaming services to offer advertisers — perhaps indicative of a desire by advertisers to shift from relying on a select few giant DSPs to engaging with more platform-relevant offerings. 

Indeed, ad-supported streaming platforms have been experimenting with providing their own ad buying tools for several years now. Hulu, for example, launched its Ad Manager, which allows advertisers to target users by age, interest, gender, location and show genre, in July 2020. Roku began offering OneView earlier that year in May, and Samsung launched Samsung DSP in September 2020. 

Among the platforms surveyed for this report, nine confirmed that they offer proprietary ad buying software: Amazon Freevee, Disney+ Basic with Ads, Hulu, Paramount+, Peacock, Pluto TV, Samsung TV Plus, The Roku Channel and YouTube (via parent company Google’s DSP). Hulu and Disney+ Basic with Ads tap into parent company Disney’s Disney Real Time Ad Exchange (DRAX), while Pluto TV and Paramount+ access Paramount’s EyeQ. 

More recently, in April 2022, Peacock launched its Peacock Ad Manager. NBCUniveral’s Burke said part of the reason for providing the in-house platform was that the company had noticed a shift in how agencies and brands were buying ad time. “We have a large programmatic business in partnership with many, if not all, of the DSPs,” Burke said. “We’re finding the trend of agencies and clients either taking that in-house or having their own proprietary buying methods. Hence, not only having DSP integrations, but Peacock Ad Manager.”

“We want to offer the capabilities to buy the way the client wants to,” she added. “And because of our democratization of inventory and our client base growing so much … it’s really changing, particularly as our small- and medium-size business growth is a bit more of a hockey stick [in terms of] growth rates.”

Krystal Restaurant’s Terrell said he’s noticed a trend toward ad-supported streaming services offering and promoting their proprietary self-serve ad buying tools directly to brands, and his company is willing to consider using those tools. “You can go to [media agency] OMD and they’ll bring a billion dollars to market and you can just get packaged up with everybody else and they’ve got DSP, and it’s fine,” Terrell said. “In the last year or two, it feels like there’s a lot more direct happening, of people coming straight to us — a Hulu or an Amazon — saying, ‘No, just come straight to us.’”

However, a potential downside to using proprietary ad buying software, or even multiple mainstream DSPs, is the cost and training required to get staff up to speed on using a different service. “[A consideration for us] is ROI but also, ‘Do I now need to have a complete media team on my side? Does that fall into the digital vertical? Are we going to get the scale that we could get through an agency partner that’s bringing a bunch of brands with them?’” Terrell added. 

Terrell said his company is letting media agencies handle the bulk of its ad buying for now, but they’re testing out proprietary services as well. “Let’s see what a Samsung direct buy is, because they reached out and said, ‘Hey, we have our own proprietary cable service now, an OTT [offering],’” Terrell said. “It’s interesting. I just don’t know what they can do yet and if there will be a drastic shift over to that. Everybody’s kind of waiting.”

Successful ad targeting can be a fine line to walk for both advertisers and platforms, as many consumers are turned off by targeting that feels precise or invasive while others find irrelevant ads more annoying. A Morning Consult poll from 2021 found that 38% of all adults are bothered by ads that are too relevant to them or their lives, while 51% were bothered by irrelevant ads. 

That audience uncertainty about how consumers want to be reached by advertisers is mirrored in brands’ and agencies’ mixed responses to Digiday’s survey questions concerning first-party data reserves. The majority (65%) of survey respondents said that demographic information, including age and income level, is the most important type of first-party data reserves for streaming platforms to have for ad targeting, but nearly one-half (46%) of respondents said the more general category of consumer activities and interests was most important. Almost another one-third (31%) of respondents selected geographic information, such as the city or region a viewer is located in.

Platforms themselves have a vested interest in providing the most useful first-party data reserves to advertisers, as the data have become a critical selling point to appeal to advertisers with the rise of privacy concerns and regulations around using third-party cookies in programmatic advertising.

The Roku Channel, for example, has focused on reaching larger contextual audience segments using demographic data — advertisers’ most important type of first-party data reserves — and serving ads intended to be useful rather than meddlesome. “Brands find that [for example] we can reach women 18 to 34 more accurately and more precisely than a traditional TV approach,” said Jordan Rost, head of ad marketing at Roku, in a 2022 Digiday interview. “But we also understand what those same streamers are watching. Based on the types of content or the ads that they’re exposed to, advertisers can re-engage with those same audiences.”

NBCUniversal’s Burke said Peacock is placing resources toward local geographic targeting — advertisers’ third most important type of data reserves — while continuing to address traditional demographic audience segments. “The ability to buy local inventory across our streaming footprint is meaningful and local marketers need to find their audiences,” Burke said. “Traditional age and gender remains an interest for some buyers, but more and more we’re seeing interest intent — are they in-market for a particular product? Age and gender is still a targeting capability … [but] it is getting smaller as those advanced targeting capabilities grow.”

YouTube’s Albert said the platform has found that a mix of contextual and niche ad targeting is the best approach for advertisers to take. “We introduced YouTube Select [formerly Google Preferred] because there are some clients who want to run against the best content on YouTube,” he said. “We built an algorithm to help identify channels based on passion and popularity signals, so that we can essentially package the top five percent of channels on YouTube and make it available for clients to buy. That’s very much a contextual buy.”

“We have other clients who prefer to buy based on the specific or niche audiences,” he added. “We find that when you do both, you can actually drive the best results. … If you’re truly trying to maximize your unique reach, your effectiveness and your efficiencies, clients who do both see the best results.”

Ad-supported streaming platforms collect first-party data for use in ad targeting in a number of ways, depending on their size and whether the platforms are smart-TV-based streaming services or owned by larger media companies. 

Platforms owned by larger parent companies have the advantage of accessing large reservoirs of first-party data spread across media properties. As noted in Digiday’s year-ago report on ad-supported streaming services, Google’s YouTube and Disney’s Hulu (and now Disney+ Basic with Ads too) have the largest first-party data reserves compared to other platforms, and they rely on those reserves and in-house tech stacks to appeal to brands and target ads. 

Meanwhile, NBCUniversal’s first-party identity platform NBCUnified consolidates first-party data across all of its media properties, including Peacock, and across NBCU’s data clean room. “We can connect our data with marketers’ data in a privacy-compliant way to find the audiences they’re looking for,” NBCUniversal’s Burke said. “And then it helps the consumer because we serve more personalized or additive ads that are useful to their consumption behaviors.”

On the other hand, smart TV-based streaming services like The Roku Channel and Samsung TV Plus use first-party data collected during device registration and through automatic content recognition (ACR) technology built into smart TVs for ad targeting.

In an effort to expand its data collection capabilities beyond ACR tech, Roku launched its own clean room in April 2022. An agency, brand or publisher can bring its data to Roku and combine it with the platform’s first-party data to measure and target campaigns, but without either side exposing its customer data to the other. The Roku clean room creates audience segments that can only be targeted with its proprietary DSP OneView.

Disney also added clean room technology to enhance its already massive first-party data reserves within the last year and a half. The company said in a January 2023 press release that, “Disney Advertising has engaged with most major agency and media holding companies … as well as nearly 75 advertisers” for its clean room. Dana McGraw, svp of audience modeling and data science at Disney Advertising, said in a statement that the company had anticipated a need for expanded, cross-platform data collection for more than a decade.

As brands and platforms continue to navigate the best ways to target ads and to understand what types of first-party data are most useful to them, more platforms will likely follow Disney’s and Roku’s lead with expanded first-party data collection capabilities.

While advertisers may have differing opinions on what types of first-party data reserves are most important for platforms to offer them, they are generally united in their beliefs on the biggest challenges they face when placing ads on the streaming services. Most advertisers said the expense of buying and placing ads on platforms is the largest roadblock they encounter when it comes to ad-supported streaming services. 

More than half of brand and ad agency respondents selected cost of media as their top challenge on all platforms, excluding Amazon Freevee and Pluto TV, where lack of scale was their main barrier. Peacock skewed more heavily toward cost than other platforms, with three-quarters (75%) of respondents saying cost of media was the top challenge they face at Peacock. The next platforms where cost of media was a main hurdle were Hulu and Discovery+, both at 56% of respondents, followed by YouTube and The Roku Channel at 53% each.

Considering the services’ select programming, the pricing premiums aren’t entirely unexpected or unwarranted and, as long as programming remains consistent, are only likely to increase. But some agency executives are frustrated by high CPMs coupled with lack of measurement. 

“Pricing is high, and it’s high in my opinion when the lack of insights are not as robust,” said Natalee Geldert, head of brand media at digital agency PMG. “So I feel like advertisers … when we go to plan, those CPMs or those rates have premiums on them, and my question is why, when on the backend of the campaign I might not be able to have the depth of the reporting in order to realize the impact of having that premium rate.”

“So, it’s very top-line in terms of content bucket, genre bucket,” she added. “I can’t see an age breakdown or begin to pinpoint a segment of age in a post-campaign or a hindsight report, and so for me that’s a constant tension when pricing is premium yet the lack of insights just sometimes doesn’t warrant that premium.”

As the cost of acquisition continues to grow, advertising executives will have to make tough decisions about where to place ads, according to Visible’s Gresham. However, the rise of innovative ad formats that prompt viewer action and emphasize quick ROI, such as shoppable ads and ads with scannable QR codes, may help executives more readily make those decisions.

“We always have to tie it back to the sales,” Gresham said. “We have got to grow. And the accountability and the pressure that CMOs have for the budget — the fiduciary responsibility of not spending $1 unless that dollar is going to return, and more — we’ve got to be really, really critical and really honest with ourselves on the decisions we’re making and the way we’re spending our dollars.”

Another area of concern for some advertisers is brand safety, particularly on YouTube. Thirty-three percent of respondents said they had concerns about brand safety on YouTube, the largest percentage of respondents to say so for any platform. Marketers have always been cautious about their media placements appearing alongside content that could negatively affect their brand, but in YouTube’s case, those concerns are amplified by the platform’s user-generated content.

With hundreds of thousands of hours of UGC uploaded to the platform daily, it is seemingly impossible, even with the help of automation — and despite being accredited for brand safety by the Media Ratings Council — for YouTube to ensure all advertiser content is placed next to appropriate video content. Indeed, UGC, the main factor that distinguishes YouTube from its competitors according to YouTube’s Albert, could be one of its biggest challenges, depending on the campaign. 

Interestingly, instead of cost of media, brands and agencies found lack of scale to be the top challenge facing them on two of the 13 platforms assessed in this report. Fifty-six percent of respondents said lack of scale was the top challenge they encountered on Amazon Freevee and 43% said the same of Pluto TV.

While no clear trend regarding lack of scale emerges when analyzing only two platforms, in general, smaller ad-supported streaming platforms naturally have less audience reach. Amazon Freevee, the rebranded IMDb TV, notably hasn’t publicly shared audience numbers.

Additionally, many ad-supported streaming platforms are nascent offerings, with lower numbers of users signing on to the ad-supported versions initially. Netflix Standard with Ads, for example, which launched in November 2022, was falling short of ad-supported viewership guarantees made to advertisers as of December. As a result, Netflix allowed advertisers to take their money back for ads that had yet to run, according to several agency executives. The specific shortfall amounts varied by advertiser, but in some cases, Netflix had only delivered roughly 80% of the expected audience, the executives said. 

“They can’t deliver. They don’t have enough inventory to deliver. So they’re literally giving the money back,” one agency executive said at the time. 

If and when the smaller and newer platforms are able to grow their audience, that will seemingly serve to reduce one barrier advertisers say they face from ad-supported streaming services. The more prevalent challenge of cost of media is likely to remain for the foreseeable future — or at least for as long as advertisers are willing to pay platform premiums. 

Platforms’ recent efforts to expand their services while matching advertisers’ needs to compete for their budgets run the gamut from launching entirely new ad-supported platforms or merging existing streaming services to expanding data collection and ad targeting capabilities and leaning into cutting-edge format and software innovations.  

Based on what each platform told Digiday it offers advertisers (plus Digiday’s own research and reporting), and taking into consideration what brands and agencies shared as their greatest platform needs, Digiday has put together this quick guide on which platforms are right for campaigns that rely on some key advertiser demands:

If you’re an advertiser looking for:

• Shorter ad breaks and smaller ad pods
  • Amazon Freevee
  • Discovery+
  • HBO Max (Ads) [transitioning to Max on May 23]
  • Netflix Standard with Ads
  • Peacock
  • Samsung TV Plus
  • The Roku Channel (fewer ads only)
  • Tubi
  • YouTube

• Frequency capping
  • Amazon Freevee
  • Discovery+
  • HBO Max (Ads) [transitioning to Max on May 23]
  • Netflix Standard with Ads
  • Peacock
  • Samsung TV Plus
  • The Roku Channel
  • Tubi
  • YouTube

• Content takeovers
  • Amazon Freevee
  • Tubi
  • YouTube
• Shoppable ads
  • Amazon Freevee
  • Peacock
  • The Roku Channel
• Dynamic product placement 
  • Peacock (In-scene ads, launching later in 2023)

• Proprietary ad software
  • Amazon Freevee
  • Disney+ Basic with Ads
  • Hulu
  • Paramount+
  • Peacock
  • Pluto TV
  • Samsung TV Plus
  • The Roku Channel
  • YouTube (via parent company Google)
• Deep first-party data reserves 
  • Disney+ Basic with Ads (The Walt Disney Company)
  • Hulu (The Walt Disney Company)
  • Peacock (NBCUniversal)
  • YouTube (Google)

• Clean room capabilities
  • Disney+ Basic with Ads (The Walt Disney Company)
  • Hulu (The Walt Disney Company)
  • The Roku Channel

• Expanded audience reach, measurement and targeting services
  • Peacock
  • The Roku Channel
  • Samsung TV Plus
  • Tubi

Since last fall, Twitter has seen tremendous, and for some users, not so favorable changes as a result of Elon Musk’s purchase of the platform. Said changes include the overhaul of its verification process, which now permits anyone to get a blue check mark on their profile.

As part of the overhaul, verification is now under a subscription model. Twitter is charging $8 per month for Twitter Blue for regular users, and $1,000 per month for Twitter Gold for businesses and brands.

For content creators of color, the verification has been a hard sell. Many fear that Twitter will no longer be a place where they can share views on topics, like Black Twitter, or that their content will not be seen by the general public.

Joy Ofodu, a podcast host, content creator and voice actress who goes by @JoyOfodu on social media, began using Twitter in 2009. But it was not until the mid 2010’s when she started using the platform to inspire laughter in people with her content focused on comedy and healing work humor. She said she does not subscribe to Twitter Blue and does not intend to sign up for it, because to her, it takes away the myth of a democratized internet and access to free social media, as, in her view, Twitter cares more about money than it does about its creators and influencers.

“Elon’s assault on Black Twitter was very clear, direct, quick and intentional after his takeover of Twitter,” said Ofodu. She added that she’s seen major social media companies say that they care about creators and then “take away the tools, take away the security, take away the verification or programs that were dedicated to those creators.”

Twitter Blue was supposed to level the playing field for the platform’s users, but it seems most people aren’t buying into it. And despite attempts to win back advertisers, as of yet, Twitter Blue isn’t generating enough revenue to cover its losses.

Ofodu is not alone. Nagier Chambers, a content creator who owns independent media outlet Big Gold Belt Media (@BigGoldBelt), and Twitch streamer David Cherry (@DataDaveTV) share the same sentiment. Both Chambers and Cherry used Twitter for close to a decade and subscribed to Twitter Blue when it first launched. They were not previously verified prior to Musk’s takeover.

From the two creators’ perspectives, Twitter made promises to everyone who subscribed to the new verification system that their tweets would have higher visibility than the average user within the platform’s algorithm, as well as a cleaner user experience to suss out legitimate users vs. those who are not. But neither said they saw a difference after becoming verified, leaving Ofodu, Chambers and Cherry questioning if verification is worth the money, especially as they also invest their dollars in expenses such as recording equipment, cameras and other subscription services. (Twitter did not respond to a request for comment.)

Chambers explained that he subscribed to Twitter Blue because his work and contributions in the media and entertainment industry were being overlooked by film and television studios that would share content from other media outlets that were verified.

“Coming from an independent outlet, it’s a little bit of a challenge because prior to Twitter Blue, the application for verification always denied me and they want you to have credits from other places that’s already been verified,” said Chambers. “So this is a way to allow a backdoor way in the verification process.” He compared this to a VIP experience. Besides the verified tab that he got on his timeline, it meant that verified, legitimate users appeared for him rather than bots.

Meanwhile, Cherry said he subscribed to Twitter Blue when it first launched in the fall of 2022, but unsubscribed not too long after when he noticed that his daily tweets did not gain any traction. This happened during the same time when false brand accounts such as Nintendo, Rockstar Games, and Lilly were spreading fake news about the actual brands. 

“Twitter wants to prioritize those who are subscribing and I am not surprised by what Elon did because he is out here suppressing Black voices, Black cultural moments and Black creators who put social issues in front of your eyes,” said Cherry.

In the months before Musk took over, Twitter was poised to announce a new creator program, Voices X, which would have allowed brands to connect with diverse and influential Twitter voices. However, a number of high-profile Black Twitter users left the platform after Musk took over — a move that has been associated with a rise in hate speech on the platform. The users who left include screenwriter, producer and showrunner Shonda Rhimes, R&B star Toni Braxton and actor Whoopi Goldberg.

Chambers, Cherry and Ofodu agree that Twitter Gold is unaffordable for smaller companies and creators because it costs $1,000 a month for businesses and an extra $50 per person for verifying employees as affiliates. In particular, Black-owned businesses have to decide how they will spend their marketing dollars on social media since companies are not showing evidence that they are still funding minority-owned companies. However, with the current economic uncertainty, every dollar counts when it comes to budgeting for marketing.

Cedric J. Rogers, founder and CEO of Culture Genesis, a digital video network for underrepresented creators and publishers, said that Elon Musk has destroyed relationships with brands in an effort to make money. He added that creators won’t be able to monetize Twitter in any significant way as a result.

“Black creators will continue to leverage Twitter to promote their personal brands but they won’t be able to monetize the content,” said Rogers, adding that Culture Genesis has firsthand experience with brands asking to remove campaigns from Twitter. Going forward, the agency was asked to exclude Twitter from future campaigns, as agencies and brands are now asking for campaigns to be executed on TikTok, Instagram and YouTube, Rogers said.

Six months into Musk’s tempestuous tenure of Twitter and his plan is finally becoming clearer.

The controversial billionaire wants to turn Twitter 2.0 into a WeChat-style super app, where people can do everything; from talking to friends to buying groceries. Everything except watch ads. As ever with Musk, advertisers don’t seem to be a top priority.

After all, “It is most important that Twitter keeps its freedom of speech, and if it means a loss of advertisement dollars then so be it,” said Musk at his fireside chat at the recent Possible event in Miami.

Bottom line: advertisers are low on Musk’s priority list, if on it at all.

Musk believes Twitter should be an open forum for free speech for all, regardless of what voices that may be. And while not advocating reach, this still includes the likes of far right groups, inappropriate content and misogynistic posts to name a few. Simply put, those accounts can still post on Twitter, but they won’t be promoted. Of course the problem for advertisers is no one wants their content to exist near these posts.

“It boggles the mind to walk away from the primary revenue source while trying to rebuild this airplane while flying it,” said Matt Voda, CEO of OptiMine Software. “And yet Musk keeps doubling down on things that drain brand safety and continue to scare off major advertisers.”

Despite the chaos the industry has witnessed at Twitter HQ since Musk took over Oct. 28, Twitter’s daily active users have slightly increased.

Earnings records showed the platform recorded an average of 229 million monetizable DAUs for Q1 2022 — the last period before it was announced that Musk would enter into a takeover deal. But since October, the original blue bird app’s DAUs have averaged around 246.8 million, with a mean average increase of 1.3 million new users each month, per data from Apptopia. So it’s clear no Twitter-alternative has fit the bill enough for users to abandon the app in their masses just yet.

And usually, wherever audiences go, advertisers automatically follow. But given the turmoil that has ensued since Musk signed on Twitter’s dotted line — reported increases of hate speech, lifetime banned users reinstated and almost daily concerns over brand safety — advertisers have been forced to give it a wide berth. They’ve had to contend with slow responses (if any at all) due to lack of remaining staff at Twitter HQ available to answer their questions.

And whether it’s the platform’s subscription service Twitter Blue or creator monetization (or rather lack of), Musk has turned his attention elsewhere on Twitter. All in all, not a lot has really changed for marketers over the first six months of Musk’s tenure.

The continued havoc has seen advertising spend on the platform plummet from around $156.6 million last October, to just $76.9 million (so far) in April 2023, according to Pathmatics data. Within that, it’s no surprise that the top 20 advertisers on Twitter during the week commencing Oct. 16 (pre-Musk), which included the likes of Mondelez International, The Coca-Cola Company and Microsoft, have continued to reduce their ad spending week-over-week since the acquisition. Per Pathmatics, their ad spending dropped by 87.5% in the last week of March 2023, compared to the week prior to Musk’s takeover back in October.

By comparison, this year, the top 20 advertisers are predominantly brands such as the tablet reMarkable, brewing company Anheuser-Busch and liqueur company Remy Cointreau. And spending, on average, for the top 20 advertisers is generally about 51% lower now than it was in October.

Twitter has always been considered a tier two platform. A nice-to-have if ad budgets allow for experimentation, but when budgets are tight, it’s an even easier option to cut before other platforms. Marketers want to put their ad dollars into platforms that can provide the best returns on investment.

Not all advertisers are likely to come back to Twitter — despite deals that the platform has offered advertisers (like the 2023 super bowl activation details here).

In all, Insider Intelligence is predicting that Twitter ad revenues decline by about 28% this year, said Jasmine Enberg, principal analyst, social media at Insider Intelligence.

According to Insider Intelligence’s forecasts, Twitter will only command about 0.5% of total digital ad spend worldwide this year, and it’ll drop further to 0.4% next year. By comparison, Meta and TikTok are expected to account for 20.1% and 2.2% of total digital ad spend worldwide this year, and 20.1% and 2.6% in 2024. Equally, tier two peers, Pinterest and Snapchat are expected to command 0.5% and 0.6% of total digital ad spend worldwide for both years.

“The majority of Twitter’s ad revenues have historically come from big brands, and they are far more risk averse than smaller advertisers,” said Enberg. “There are some bigger advertisers that are still spending, but they’re not spending the same amount of money that they were prior to Musk. And Musk is the biggest problem with Twitter, but it isn’t the only one.”

Enberg noted that it’s still not clear, despite what Musk has said in the past six months, if he’ll improve performance for advertisers. And taking the company private has meant there’s even less transparency about what’s going on than there was before.

However, advertisers that have stayed on Twitter have been able to take advantage of 15% to 30% decrease in CPMs, multiple sources told Digiday.

And in a bid to win back advertisers’ trust, as Twitter 2.0 is in full swing, the app is now making strides to better agency relationships. Traditionally, reps have connected with agencies quarterly, or when they have issues.

Now, those meetings are monthly — at least for Ashley Hammel, group director, social media & content at Assembly, who also receives a monthly newsletter with updates on products and brand safety and realtime email updates as new changes and updates are announced.

“[Twitter] has changed a good bit from pre-Musk in that now our reps are very proactive in sharing updates with us, versus prior when we did not hear about product and brand safety updates on quite as frequent of a cadence,” Hammel said.

Twitter’s evolution

Behind the scenes, Musk already started to lay the groundwork for Twitter’s evolution in November. The New York Times reported that the company filed registration paperwork with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), taking it a step closer to processing payments.

Since then, court documents revealed that Twitter has “merged into X Corp”, and “no longer exists”. And this was further confirmed after Musk’s appearance at Possible, when Twitter users were notified of the rebrand by the platform, with updates to its Terms of Service and Privacy Policy, which are due to take effect on May 18.

But this isn’t a dream Musk thought up overnight. X has been Musk’s goal ever since he bought the domain, X.com, which subsequently rolled into PayPal. It simply appears that the self proclaimed “Chief Twit” finally sees an opportunity to push through his idea to fruition.

Insider Intelligence has seen indications that Americans are receptive to the idea of combining some of their digital activities into one app, meaning there is value in creating a super app. But Enberg noted there is no indication that most people want to do it on Twitter.

“People don’t trust social media. People don’t trust Twitter. People don’t trust Elon Musk. That applies to advertisers and to users,” she said. More trust is needed for more people and businesses to hand over personal and payment information to Twitter, or rather X Corp, to use a lot of the functions a super app would perform. Not to mention the fact that it takes time for them to adopt an idea as ambitious as this. 

Plus, it’s going to be hard for Musk to convince advertisers that already have low trust to then move to an untested platform in the U.S., Enberg added. “Not only do they have to trust him, they also have to trust that this platform is going to provide some value for them.”

That said, Twitter broached the subject, at least of the X Corp restructure, with marketers. Hammel explained the conversations with her Twitter reps felt similar to the Facebook rebranding to Meta path. In that Twitter, Inc. was renamed to X Corp, but the Twitter platform will continue to be known as Twitter.

“If Twitter is looking to expand to additional platforms and services, such as reintroducing Vine under the umbrella, I think this makes sense as a path forward,” Hammel added.

But the problem is, successful super apps in Asia are hard to replicate in the Western world. Audiences here haven’t been primed in the same ways to pool all their everyday activities via an  everything app as they have in Asia. Which is why social platforms have struggled to make social commerce work effectively to date.

“It is possible for Twitter to become a super app in the sense that it can offer numerous functions to cover nearly every element of your life, but to become super in the sense that it overtakes every single one of its rivals to become the go-to app for users in the West is certainly far more difficult, bordering on impossible,” said Jack Moore, head of social at Hatch Group. “I have absolutely no doubt in Elon Musk’s ability or determination to build such an app, but I do question consumer appetite for it.”

This week’s Media Briefing looks at how publishers’ cash flow is turning into a trickle, thanks to elongated payment windows that are reaching upwards of 180 days.

• Still not going to pay the bill on time
• 3 questions with Saveur’s Kat Craddock
• Publishers test retention tactics, 250+ staffers protest Insider layoffs and more

‘Still not going to pay the bill on time’

The lack of advertising dollars being spent in the market is already taking its toll on media businesses this year, but now publishers are saying that the average payment terms for the deals they are able to close are getting longer and the time it takes to actually receive a payout is extending well beyond the contracted timeline.

The media industry has been built on “easy access to cash,” said Sylvain Le Borgne, chief partnerships officer and head of data and analytics at MediaMath, in which the supply chain of advertiser to consumer involves middlemen floating payments on an endless cycle as new deals are closed.

But now that the macroeconomic climate has advertisers tightening their purse strings and the collapse of financial institutions like Silicon Valley Bank has removed the amount of liquid funds that’s available, that flow of cash has turned into a trickle of nickels and dimes.

“Brands and agencies are paying slower than [the time frames] that the companies further down the supply chain have to pay the publisher. So you cannot collect money at 90 days or 120 days and then pay the supplier at [day] 45. It was possible in the past because money was easy to access and the cost of borrowing was lower,” said Le Borgne.

Publishers, at that end of that supply chain, are bearing the brunt of the burden, having been given little say in the matter though are ultimately still relying on any and all ad dollars that they can get in the door. But with fewer dollars coming in when they’re expected, operational costs become harder to cover and cost cutting measures like layoffs are considered.

“Cash is king and advertisers are taking a really long time to pay us. It sucks,” said a media executive at a midsize digital publication who spoke to Digiday on the condition of anonymity. It’s not just smaller brands or first-time partners either. They added that “major Fortune 100 companies” are taking upwards of 150 to 180 days before paying up for a completed ad campaign, making it “hard to manage cash flow” right now.

“Why does a massive top 10 advertiser in the world think it’s OK to take a year to pay a little publisher?” the first exec added. “It makes it very difficult to operate when you’re down as much as you’re down in Q1 to begin with, on top of [the] compounding issues with cash flow — it’s a stressful thing.”

In some cases, the media exec said, it’s a cash flow issue in which an agency waits to get paid and needs the money to cover their own expenses before writing any other checks. Eventually that money makes its way to the publisher, but being at the end of the chain, they’re at the mercy of the timelines from the advertiser, the agency and any other ad tech intermediaries.

“Payment terms for the agency have become negotiable and so you have [clients] moving agencies and they’re asking for 120-[day] payment to the agency. And so that has to be passed in sequentially down to the publishers,” said David Spiegel, CRO of Betches Media. He added that one client who switched agencies midway through a campaign ended up not paying up for nearly a year between all of the changeover and the new agency having a net-120 payment policy.

A second media exec who spoke recently under Chatham House Rules during the Digiday Publishing Summit’s town hall said that even if agencies weren’t strapped for cash, they’re “so paralyzed by the fear of getting fired” by their clients, who are already pulling back their budgets during the economic downturn, that they’re afraid to push them on paying the bills when they’re due. As a result, payouts are getting processed later than ever, on average 60 days beyond the agreed upon payment window. 

“What we’re finding a lot [is] you get to day net-80, and then honestly an agency is like, ‘You put the wrong, one-digit-off number on your invoice. Please revise.’ And then we start over,” said another publisher during the town hall. “But I think that they’re pushing it off, not wanting to ask for their payment, and then it’s trickling down. I’ve seen a lot more technicalities like that to draw out the process that just makes our [one] yard line look very huge when we’re tracking who’s paying when and how often.”

Other publishers in the town hall said that at a minimum, they will not see payments for 60 days, regardless of what the contracts say.

“Net-30 never worked because it was net-30 to the agency, and the agency has to get paid. So it was always going to be [net-]60 regardless. It’s painful,” said a third exec in the town hall. 

Another added that most clients are asking up front for net-90 and negotiating for net-60 has become part of publishers’ dance. 

But at the end of the day, there is no penalty for late payments and publishers are simply at the liberty of how quickly cash exchanges hands higher up the chain.

Most of Betches’ payments come in around the 90-day mark, despite the fact that net-30 is often the terms set by Spiegel’s team when invoicing clients, he said. “I’m a little cynical about it. Net-30, net-45, net-90, net-120 — I don’t fucking care, you’re still not going to pay the bill on time.” 

Knowing that’s the case, however, he said he balances P&L on a 90-day average on the balance sheet to ensure that cash flow doesn’t dip into the red. Even still — there are no penalties for late payments in the form of late fees or added interest that’s upheld as an industry standard, he said. 

“That’s sort of the problem. The industry has not embraced that [but] the banks aren’t giving 0% interest loans. So why do media partners?” said Spiegel. 

Not all publishers are running into this issue, however. Blair Tapper, svp of The Independent U.S. said that her sales team has been able to maintain the typically asked for 30- to 60-day payment terms for the most part and in the odd cases where a client is late, the Independent’s U.K. office handles it.

A lot of the regularity in payments comes down to the credit checks performed up front for new clients. “We’re cognizant right now of companies’ financial history and working together, because the truth is, if they’re not in good financial standing, a lot of times it’s a non-starter,” said Tapper.

Even with her mission of growing the U.K.-based publication’s business in the U.S. — and especially at a time when ad dollars are a hot commodity and news publishers are often the least likely to win deals — signing a new client on laxed financial terms or in good faith that they’ll follow through is a “risky business,” Tapper said. 

“You could sell something and never get paid. And then is that actually revenue? Arguably not,” she said.

Seb Joseph contributed reporting to this story.

What we’ve heard

“I’m on this Snapchat mid-roll [ad] program, which I’ve been part of since last May. I’ve made over a million dollars from Snapchat mid-roll. Snapchat changed my life entirely.”

— Alyssa McKay during the second episode of the Digiday Podcast’s four-part Creator Series on short-form vertical video creators

3 questions with Saveur’s Kat Craddock

Earlier this month, Saveur’s executive editor Kat Craddock announced she was acquiring the food and travel title from private-equity backed Recurrent Ventures, following in the footsteps of other editors (like Quartz’s management) who acquired the publications they oversaw to run them independently. 

Craddock declined to share how much she paid for the publication, but said she approached Recurrent first about the deal. The acquisition was backed by one other independent investor, she added. Craddock declined to share in detail which business functions she now has to handle on her own but she said that three new hires will join the team soon, including two director-level managers who will work with her to manage the business. Craddock has not had a role on the business side of Saveur until now, but working across departments as part of a small team of now just seven people made Craddock feel she was “in a unique position” to lead the company, she said.

Craddock said she wants Saveur’s editors to be “more involved” in the business decisions behind Saveur, which currently earns its revenue from licensing and programmatic and affiliate advertising. – Sara Guaglione

This conversation has been edited and condensed. 

Why did you want to acquire Saveur from Recurrent Ventures?

We really got a lot out of being owned by them for a while. They put us [on] a really solid footing. They built us a brand new, beautiful website… That said, it was kind of a weird fit for everything else that Recurrent is doing. It wasn’t quite [in the home category], even though it was in this home vertical. It’s more of a lifestyle, global publication, and food is a big part of that.

Being in a position to spin a few plates — whether it’s focusing on blowing out a travel vertical or on recipes, or working a little bit more closely with our licensing partners and cookbook projects — I think that there’s a lot we can do if we’re fielding that ourselves, rather than relying on shared services that are working on very different types of brands.

What previously shared resources will you now have to build out on your own?

We’re a small business now, so a lot of the things that were supported by corporate, we don’t have… We’re sorting it out as we go. We’re getting a lot of support from Recurrent in figuring out what we need — whether [we need to hire] a full-time position, or we can replace [the role] with an app, like payroll — and [other] systems we need to implement to operate as a business.

The company that supports our CMS and our ad platform is [called] Organic [and] we have a separate relationship with them [now]. That will continue… [But] we’re gradually off-boarding from a lot of the different systems. We’ve been integrated into every single little piece of software along the way that we use every day. They’re not just turning the lights off overnight.

Quartz’s editor Zach Seward did something similar to this and then ended up selling the publication to G/O Media last year. Were you looking at prior examples of editors buying their publications when you made this decision?

I’m such a lifer with this brand. That’s not to say decades down the line — I’m not going to speculate on what might happen. But that’s not part of my plan. I haven’t seen a sale like this happen with a legacy publication. I know other editors have done it in other fields and areas. And that was certainly inspiring and impetus to think that it could be possible. But I think each business is so wildly different. I’m not really relying on somebody else’s playbook, necessarily.

Numbers to know

250+: The number of Insider employees who walked out on Monday in protest of the company’s plan to lay off 10% of its staff, 60% of whom were union members.  

23%: The number of publishers pros in a survey of 200-plus brand, agency and publisher professionals who said they are “very prepared” to move beyond the third-party cookie, per Digiday+ Research. 

515 million: The number of Spotify’s monthly active global users in the first quarter of 2023, a 22% increase year over year.  

2.5%: The new pricing model of Amazon Publisher Services’ Transparent Ad Marketplace, which will replace the current $0.01 CPM fee on paid impressions with the 2.5% fee on net revenue delivered to publishers.

What we’ve covered

How SPO is driving ad tech’s decarbonization push:

• “Sustainability” is one of the latest buzzwords in ad tech as marketers attempt to define themselves as purpose-driven.
• And yet, Brian O’Kelley, CEO of carbon emission measurement firm Scope3 said that programmatic advertising has “a huge environmental impact.”

Learn more about the role of sustainability in the programmatic market here.

How the social traffic that gave life to BuzzFeed News ultimately led to its demise:

• BuzzFeed News was “a social media ecosystem company, and the ecosystem went away,” said a former BuzzFeed exec who spoke on the condition of anonymity.
• A news brand built for — and dependent on — a social media audience, could be facing the same algorithm-induced issues that occurred in 2016.

Read more about the downfall of BuzzFeed News here. 

Time, The FT, Vox and other publishers see ad dollars flow to sustainability content after increasing climate coverage:

• Publishers that have grown their teams covering climate change and sustainability are starting to see those strategies pay off with an increase in ad dollars.
• Time, The Financial Times, BBC, The Economist, Vox Media and The Washington Post told Digiday anecdotally that they’ve seen ad growth around their sustainability content – and not just on Earth Day. 

Learn more about the growth of sustainability-oriented ad dollars here.   

Large publishers hedge their bets on subscriptions while small publishers back away: 

• Subscriptions are a longstanding revenue stream in the publishing industry — but they’ve also become a tricky business in the digital era. 
• And while the bigger players still rely heavily on subscription revenue, small publishers are less enthusiastic about subscriptions.

Read Digiday+ Research’s latest deep dive here. 

The Guardian will be paid for permitting the collection of contextual data on its site:

• This is a publisher-ad tech story with that rarest of things: a happy ending.
• And it starts with The Guardian being frustrated over the amount of money it’s losing to ad tech vendors — specifically ad verification companies – and ends with a contextual ad firm agreeing to pay the publisher to collect and subsequently sell its data for targeting.

Learn more about the partnership between The Guardian and Illuma here.

What we’re reading

How digital news publishers are practicing retention strategies:

Canceling digital newspaper subscriptions can be notoriously difficult, but after The Lenfest Institute canceled 22 subscriptions, it reported that about two-thirds of them took five minutes or less to cancel.  

FiveThirtyEight gets slashed during Disney layoffs:

More than half of the 35-person staff at data-driven news site FiveThirtyEight were laid off during the Disney layoffs this week, and founder Nate Silver is reportedly expected to depart the company as a result, according to The New York Times. 

The future of Fox News without Tucker Carlson:

After parting ways with Carlson and following the $787 million settlement with Dominion Voting Systems, Fox stands to win back some of the advertisers who blocklisted Carlson’s show, The Wall Street Journal reported.

Ben Smith’s new book reveals the beginning of BuzzFeed’s end:

BuzzFeed CEO Jonah Peretti was reportedly offered more than half a billion dollars from Disney CEO Bob Iger for the viral digital media company back in 2013, according to former BuzzFeed employee Ben Smith in an excerpt from his upcoming book that was published in Vanity Fair.