Month: April 2023

“It’s important that we are in lockstep with technology and culture, or we will get passed by all the time,” said Stoute, adding “[Marketers] need to stop thinking that they can put people in segmented boxes in order to target them. That idea is old.”

As for progress on the DE&I front, Stoute does not see the success of Black culture, as evidenced by the 50-year anniversary of hip-hop, translating to the success of Black representation in the c-suite or boardroom.

“In fact 75% of consumers of hip-hop are not Black. The penetration is deep. And not only is it the music, it’s everything that comes with the music: the style, the clothes, ebonics, the entire thing. They all come with the connection to that art form,” said Stoute. “The DEI inclusion part of it is CEOs hiring, forcing and enforcing diversity and inclusion in their company. The fact that these companies are hiring DEI officers to police that — I’m not sure that’s the best solution or if it’s just checking a box. If your c-suite doesn’t look like your customers, you have a problem. And if you have a diversity problem at the top, you have a youth problem.”

From a large consumer brand perspective, Molly Peck, CMO of Global Buick and GMC, agreed that culture combined with the rapid advance of technology and associated changing consumer patterns will have an impact on automotive marketing and brand marketing in general.

“When we look at our marketing and creative plans, we really boil it down to to three things: it’s our customer, our brand, and it’s culture,” said Peck. “And it’s where those three intersect [that] really serves as the foundation of our media and marketing plans.”

Peck said that her immediate focus is on the consumer and technology and how they are both converging on the propositions of being a marketer of cars — and being in the market for a car.

“The way we reach consumers is vastly different from the way we reached them 10 years ago,” said Peck. “What is happening from a marketer’s standpoint is that we are able [tapping into linear, CTV and addressable media] to serve the right message, to the right consumer at the right time. And what that does for the consumer is that advertising change from being intrusive to something that’s informative.”

And on Tuesday afternoon, Bob Pittman, CEO of iHeart Media, discussed his perspective on culture and how more audio media, including radio, streaming and podcasting, can remain relevant and competitive as audiences shift in demographic makeup and media consumption patterns.

“Audio is at the center of culture. It turns out that radio is the last of the mass market media. Everybody gets in the car and listens to the radio,” said Pittman. “You have streaming music, which is my music collection, you have radio which is my friend, you have influencer marketing. Radio influencers are the original influencers and they do it at scale. It’s the great unifier.”

Pittman also shared his thoughts on the impact generative AI will have on the media industry and his thoughts on how the economy will unfold in the second half on the year.

For Pittman, AI will have two important near-term impacts: on the consumer and the operations of those trying to reach them.

“Operationally it is going to replace a lot of human action, making it better and faster and will certainly have a big impact on costs for companies,” said Pittman, who added that for the past 20 to 30 years technology has change how we work so that more and more of our effort is focused on creating products. “AI is the next step for operational work,” he said. As for the consumer? “I don’t think it’s going to replace the creative artist,” he added.

Looking ahead to the economic picture for the second half of the year after an uncertain first half of 2023, Pittman said he feels the economy has hit the roughest patch and will be looking for a recovery when the state of interest rates stabilizes and the war in Ukraine ends.

“That uncertainty of a macro thing hanging over people is bad for the economy,” he said.

“When I saw it, I was just like, ‘this makes sense,’” said mobile gaming industry consultant Dom Davies. “It’s just a way to deepen the [Rovio] brand — to open up distribution channels, not just for mobile, but into new vectors like console gaming.”

The Rovio acquisition could signal a return to M&A activity for the gaming industry, both mobile and otherwise. Although 2022 was a massive year for M&A in gaming, M&A activity in the space actually declined in Q1 2023, according to Drake Star’s Global Gaming Report for the quarter. The Rovio deal, among others, has made some observers more confident that the gaming industry will continue to consolidate in 2023.

“Q2 started great, and now there’s Rovio — so I think gaming M&A is definitely up again,” said Michael Metzger, a gaming M&A expert and partner at Drake Star. “We continue to expect a lot of smaller to mid-sized deals, and we really expect a significant rebound on the M&A side in the second half of this year.”

Rovio head of communications and PR Lotta Backlund told Digiday that “there are many synergies to be had between Sega’s and Rovio’s businesses in the future, and Rovio sees this as good news,” which matched the language in the companies’ official press release announcing the acquisition. Sega reps declined to comment on the deal.

For Sega, there are obvious benefits to acquiring the developer of one of the most recognizable mobile gaming IPs. It’s no secret that gamers have been migrating from the premium console titles to free-to-play or live service games, many of which are on mobile. And as the world economy enters a recession, mobile gaming might be a more sustainable market than other forms of games that require their players to own expensive consoles or gaming PCs. Sega was once an industry leader in console gaming, but in recent years its star has fallen in favor of rivals such as Nintendo and Activision Blizzard. Acquiring Rovio gives Sega a new breath of life in the growing mobile gaming market.

Despite these promising factors, mobile gaming was actually down slightly in 2022, receding slightly from a huge burst in mobile gaming activity fueled by the COVID-19 pandemic in 2020 and 2021. But numbers are back up in 2023, according to Adjust’s 2023 Mobile App Trends report: Between Q4 2022 and January 2023, in-app revenues are up by 14 percent, and installs by 23 percent.

“If you’re a company that was much more into PC and console gaming, it makes sense to get into mobile at a time when you see that there’s this swing back,” said Adjust CEO Simon Dussart. “You acquire a lot of users and you get into a new vertical when you acquire the company.”

The event showcased Snap’s latest innovations in AR and AI, as well as introduced new creator tools to a room of partners, creators and marketers, while anyone who couldn’t attend could watch the livestream. That said, the event appeared slick, as any Snap event has been in the past, with top execs confidently presenting their latest ideas and case studies to the audience.

And while it did certainly prove to be a typical Snap event, where the team and audience gather together to celebrate its successes, there were a couple key announcements, which were key to creators and businesses.

Here’s the rundown on what was announced and why it matters.

More creators can join Snap’s Stories revenue share program

Until now, Snapchat had been testing an early pilot of the revenue share program with a group of creators globally with mid-roll ads that creators have added to their Snap Star Public Stories.

And while the app still hasn’t disclosed the percentage split of these deals, more creators can now join the program, said Brooke Berry, head of talent development at Snap at the company’s event. Specifically, creators who have a minimum of 50,000 followers, 25 million monthly Snap views and post at least 10 Stories per month, are eligible to join the rev share deal.

The program, explained Berry, places ads within select creators’ Stories, to receive more recurring cash payouts for their “behind-the-scenes” content.

This is Snap’s first entry into the rev share pond — a leap not all platforms have dared to make just yet, given the solid infrastructure needed.

Avi Gandhi, founder of Partner with Creators, was impressed that the platform is expanding access to monetized Stories. “The more creators they can get monetizing, the better. I hope they are able to accelerate these efforts over the next year,” he added.

While Snap’s program is positive news, it doesn’t bode well for smaller creators, who are still building up their followings. It also has big shoe to fill: it was only six months ago creators were telling Digiday that Snapchat wasn’t a priority for them because other apps had more features, more opportunities, and in some cases better pay.

Users can post public stories

Similar to the way that TikTok’s algorithm has enabled anyone to become a creator or go viral, Snapchatters aged 18 or older will now be able to post their own public stories, effectively allowing any Snapchatter to become a creator on the platform. Prior to this, public stories were geared toward top-performing creators and brands only.

Devain Doolaramani, CEO of digital entertainment company Powered By Media, who attended the event complimented the offering, telling Digiday that it could help any user grow a brand and build an audience.

Snap is honing in on AR

Augmented reality — the tech which Snapchat is known (and loved) for. 

Snapchat launched its AR Enterprise Services (ARES) and its first offering: the Shopping Suite, on March 23. But it used the event to provide more detail on ARES’ future. 

The product is designed to “bring together our AR and AI technology into a new cohesive service to help businesses improve brand loyalty, decrease product return rates, and differentiate in a competitive environment,” said Jill Popelka, head of AR Enterprise Solutions, from the Snap stage.

The suite includes features such as 3D Viewer, Fit Finder and AR Try-On, which, according to Popelka, saw early testers experience a 24% lower return rate, though she did not provide exact figures.

Snap did tease a new feature, AR Mirrors, which will allow users to virtually try on products. “This will help them shop smarter, faster, and bridge the gap between online and in-store shopping,” Popelka said.

Snap talked some numbers

CEO Evan Spiegel and his team gave a number of examples of the successes of Snapchat, from how it is used to how it makes content more accessible and fun for students. Not to mention enhancements to new features across My AI, lenses, personalization features for the Bitmoji and Snap Map.

It sounded like Snapchat is becoming an all-in-one platform across all niches: shopping, creators, AI, said Doolaramani.

Spiegel boasted that 750 million people use Snapchat every month, reaching the vast majority of 13 to 34 year olds in more than 20 countries, while vp of product Jack Brody announced that more than three million Snapchatters have now subscribed to its Snapchat+ subscription service, and soon access will become even easier through Verizon’s +Play platform.

The Snapchat+ subscription service was launched last August. Users pay $3.99 per month to access an enhanced version of the app, including a collection of more than 20 exclusive, experimental and pre-release features (so far).

Snapchat’s ongoing troubles

Spiegel and his team, however, did not speak to advertisers’ issues over its perceived small user base, while advertising on the platform isn’t always as effective as it once was, thanks to Apple’s ATT implementation.

All in all, Snap has had a rough time, resulting in marketers losing confidence in the app. Sure, the platform’s Q4 earnings stated that its user base had grown to 375 million daily active users by the end of 2022, up from 319 million the previous year. But compared to other platforms, Snapchat is almost always second tier in any social media mix, and usually one of the first to be cut when budgets are tight.

Alex Roa, founder and CEO of marketing agency The Culture Club, is one advertiser that still isn’t sold. Writing recently on LinkedIn, he said that it still fails as a full length media platform.

“Snapchat is mostly used as a communication platform with its media tied in as an add-on,” Roa explained. “Hard to see a path for Snapchat to have a majority new user share be for media/entertainment purposes only, where it would then compete with YouTube or TikTok. Hard to see a world where you send your parents a Snapchat video from a creator.” 

• Publishers are attempting to lock-in ad dollars this quarter after a bleak Q1.
• To do so, they’re focusing primarily on requests for proposals that have the best odds of being won.
• Event sponsors are also being upsold into larger in-quarter campaigns. 

Ad budgets began defrosting for some marketers in the middle of Q1 and with that, advertisers warmed up to having conversations with publishers about their marketing plans for 2023. But it doesn’t mean publishers can expect to see those deal dollars anytime soon.

Just three weeks into the quarter and some publishers and media buyers are reporting that deals once settled for Q2 have slipped later and later into the year, likening what’s happening to a sort of “bumper car effect.” 

But to avoid another down quarter, publishers’ sales teams are trying to determine how exactly to persuade advertisers to commit, whether by cutting bait on noncommittal clients, anchoring deals to timely events or creating turnkey solutions. 

Here’s how some media companies are trying to secure deals this quarter:

Focusing on the firm 

Some of it comes down to hedging bets against the clients whose dollars are most likely to stick. 

For The Independent’s svp of the U.S., Blair Tapper, this starts with assessing which requests for proposals are most likely to lead to a conversation with the client. There are some obvious RFPs that come in and were clearly sent to 500-plus publishers, Tapper said, versus others where The Independent is maybe one of three total publishers included in the outreach. In the cases where her team has 1:500 odds that they’d win the business, she said that RFP gets weighted as far less of a priority. 

“We tried to be more thoughtful in terms of the briefs that we’re responding to,” said Tapper, adding that the goal is to keep her team’s average campaign win rate at about 30%, which it is on track to maintain this quarter.

Tapper also pointed to the “email graveyard” where her team will craft thoughtful outbound pitches to prospective clients that never end up responding. “[It’s] a waste of time,” she said, shifting the strategy from pure volume to measuring the number of active conversations the team is having with clients.

Meanwhile, an executive at a mid-sized digital media company, who spoke on the condition of anonymity, said that because it’s been so difficult to establish relationships with new advertisers, their team “has a relentless focus” on its core advertising base during Q2. Seventy-five percent of the company’s ad revenue comes from about 50 companies in total, they added.

Q1 “didn’t materialize,” the media exec said, adding that in the first quarter of the year, 30 deals moved from the “recommended stage” within the media company’s CRM, which means that they had a good chance of winning the campaign, to “lost.” Comparatively, the exec said that the whole of 2022 saw only 25 deals move from “recommended” to “lost.” They did not disclose the number of total deals they have so far this quarter.

As of mid-April, less than a “handful” of deals have made that transition in Q2, and the exec said they were confident that the campaigns that came in toward the end of the first quarter will go live as planned in the second quarter, though “I don’t take anything for granted now.”

Timeliness is key 

The media exec also said their company’s events business has been helpful in upselling clients this quarter. While the company was down about 23% year over year in Q1 — making it the worst quarter since the pandemic — Q2 is looking to end about flat to 5% up compared to Q2 2022, the media exec said.

One of the events that the publisher held this month charged a sponsor upwards of $500,000 for the event activation and then won a commitment for an additional $1 million for content outside of the event.

Meanwhile, The Independent is using significant (and scheduled) world events to try and secure dollars within the quarter. For example, King Charles’s coronation in May, an event largely seen as positive that helps advertisers commit in-quarter, Tapper said, but did not disclose brands already sponsoring to the editorial coverage of the coronation.

Templating turnkey solutions 

Knowing the timely tentpole moments that are already on the calendar, the media exec said that they’re able to create turnkey offerings linked to holidays like Mothers’ and Fathers’ Day or Pride Month that range from $100,000 to $250,000 and include sponsorships around editorial packages and newsletters or social assets which can be sold and executed on a faster sales cycle of 30-45 days.

“We’re doing everything we can to create more urgency around in-quarter opportunities,” the exec said, noting that they hope it secures deals because they are priced relatively low and are quicker to execute than campaigns that take more bandwidth.

Another media executive who also spoke on the condition of anonymity said that the influx of RFPs this year has led their team to create more templated responses to clients as a means to alleviate some of the pressures on the sales team, but also as a way to increase the amount of sub-$250,000 deals, which require less of a lift but stack up.

Similar to a programmatic campaign, the philosophy comes down to this: The easier it is to execute a deal, the more likely it is that an advertiser will follow through and not slip through the cracks of Q2. 

What we’ve heard

“Because of this whole potential ban, brands have been backing up [from TikTok]. They don’t really want to invest in this [platform] if it’s not going to be evergreen content that’s going to be on this app continuing to gain views.”

— Kat Stickler, content creator on the latest episode of the Digiday Podcast

News podcasts are growing

A study by Pew Research Center released on Tuesday found that podcasts are becoming a significant source of news and information to listeners. Two-thirds of podcast listeners say they have heard news discussed on the podcasts they listen to. Pew surveyed over 5,000 U.S. adults in December 2022.

“Podcasts are a big part of [many Americans’] news and information diets,” said Katerina Eva Matsa, Pew Research Center’s director of news and information research. 

For example, podcast company Acast had 83.6 million listens to news podcasts during Q4 of 2022 in the U.S., an 11% increase compared to Q4 2021, according to Acast’s research and insights director Tommy Walters. Acast hosts news podcasts from publishers like The Economist, The Daily Beast and Vice. 

Downloads to Bloomberg Businessweek’s podcast with iHeart are up double-digits year over year, an iHeart spokesperson said.

On Apple Podcast’s charts, two of the top 10 podcasts are news shows: The New York Times’ “The Daily” and NPR’s “Up First.”

Ad dollars are also up. According to Magellan AI data, advertising within news podcasts grew 41% year-over-year in 2022. In Magellan AI’s latest quarterly podcast advertising benchmark report, news was the second top genre for new brands appearing in podcasts in Q4 2022, increasing from 289 brands in Q3 2022 to 301 brands in Q4.

Edison’s Infinite Dial study on podcast consumers released in March found news was the third top podcast genre by reach from Q3-Q4 2022, behind comedy and society & culture, respectively. 

“[News podcasts are] the top genre getting ads [and] in an election year coming up, expect that to grow even more as attention is turned up towards that genre,” Walters said. “News and politics is kind of a first entry point for a lot of [podcast] listeners.”

However, publishers might not be directly benefiting from this surge in listens. The majority (59%) of U.S. podcast listeners in Pew’s study say that as far as they know, they don’t listen to any podcasts connected to a news organization, suggesting listeners are getting news from independent podcast hosts.

“We are seeing the role of news organizations in these spaces not being [as] dominant or prominent as [they] used to be,” Matsa said. — Sara Guaglione

Numbers to know

43%: The number of publishers in a 112-respondent survey conducted by Digiday+ Research who reported that they did not make any revenue from events in Q1 2023 — up from 37% year over year. 

3,300+: The number of news media jobs that have been cut in the U.K. and North America so far in 2023.  

$787.5 million: The amount of money that Fox News agreed to pay in the settlement of a defamation suit filed by Dominion Voting Systems.

What we’ve covered

‘We have too much volume’: The open programmatic market may be down, but it’s definitely not out:

• As publishers see more ad dollars trickle out of the programmatic open market, it has reignited the speculation that this is the beginning of the end of the open auction. 
• But here’s the thing: spending on the open programmatic market may be down, but it’s not out — and it probably won’t ever be.

Read more about how publishers are still feeling beholden to the programmatic open marketplace here.  

Gumtree is seeing positive results from using first-party data in direct deals:

• Short-term pain for long-term gain is a business cliche. But it’s not wrong, as online classifieds site Gumtree’s direct ads business shows.
• Before unpacking those gains, here’s a closer look at what it took to get them: it started back in 2021 when Gumtree’s executives wanted to sweat their data harder in ad deals.

Read more about Gumtree’s first-party data strategy here. 

Despite DEI promises, media companies are still mostly hiring white people:

• Publishers are slowly publicly releasing the latest reports on the diversity of their workforces. 
• While Condé Nast, Hearst, The New York Times, Vice Media Group and Vox Media diversified their companies’ staffs compared to the year prior, they are still primarily hiring white people.

Read more about the state of diversity in hiring in the publishing industry here. 

‘They are blatantly blocking news’: Confessions of a programmatic sales lead on brand safety filters’ impact on publishers’ direct-sold ads:

• News publishers have been given the short end of the stick when it comes to the programmatic advertising space for the better part of a decade. 
• That end only seems to be getting shorter, as verification firms like IAS and DoubleVerify add more tools and filters for media buyers to use in their campaign planning.

Learn more about how brand safety tools are impacting news publishers’ direct-sold ads here.

What we’re reading

Insider’s newsroom is the latest to experiment with AI: 

Global editor-in-chief of Insider, Nicholas Carlson, announced that the publisher’s newsroom will begin experimenting with artificial intelligence in the journalism it produces, reported Axios.

Publishers are selling off some of their pandemic era-acquired brands:

Media companies like Vox Media, Dotdash Meredith and G/O Media have spent the past month paring down their portfolios, according to Adweek. These actions represent the reassessment of M&A moves that many cost cutting publishers are needing to do during this current economic downturn. 

Al Jazeera English is moving to Qatar:

Al Jazeera’s English brand is planning to move its live broadcasting center from London’s Shard skyscraper to Qatar, which could potentially lead to the media company cutting dozens of U.K.-based jobs, according to The Guardian.

Vice Media taps a new interim finance chief: 

In its efforts to find a buyer, Vice Media hired Mark Del Priore, director of turnaround consultancy AlixPartners as an interim finance chief, the Wall Street Journal reported. 

Twitter continues to re-label media companies’ accounts, the latest: Canadian Broadcasting Corporation:

The CBC’s Twitter account was labeled as “69% Government-funded Media” on Monday, a change that occurred after the platform’s owner Elon Musk said his team “corrected the label,” which originally stated the CBC was “70% Government-funded Media,” Reuters reported.

The site now loads faster, “slightly exceeding current standards” as determined by Google’s Core Web Vitals report (which currently shows pages should load faster than 2.5 seconds), said CNN Digital’s head of product, Amanda Rottier. Rottier hopes it will improve reader engagement, which CNN measures by looking at time spent, how often readers are returning to the site and how much content is consumed.

The new CMS could help CNN’s business by allowing it to cut back on the money it’s spending with third-party tech vendors and by improving its user experience and engagement to attract more ad dollars. According to media buyers, advertisers look for a good user experience and high engagement rates when evaluating where they’re putting their budgets.

“We had legacy publishing systems and a lot of them. We really felt strongly that in order for us to grow our business, and grow and innovate on our user experience, we needed to effectively migrate all of our systems and our CMS to a new homegrown system that could allow us to do that more effectively,” Rottier said.

Cutting back on ‘tech debt’

CNN reduced the number of third-party tech vendors it was paying for from 50 to 10 by building those components into Stellar, amounting to an operating cost savings of about 60%, Rottier said. She did not say how much money CNN was paying those vendors.

“It’s really reducing that tech debt down a lot more,” she said. 

“Advertisers are increasingly looking for ways to reduce their environmental impact, and [implement] sustainable practices. The design and development of a new CMS can help reduce energy usage, decrease file size and minimize bandwidth, ultimately creating a more sustainable and responsible digital ecosystem,” said Krystal Olivieri, global chief innovation officer at ad agency Group M, in an email.

Improving user experience to draw in advertisers

The new CMS, which took nearly a year to build, gives CNN’s editorial team more flexibility with the design and experiences across CNN’s website and app, Rottier said. For example, content can now be published on multiple platforms in one central place, for distribution onto Apple News, Facebook and CNN’s mobile app, Rottier said.

The CMS was built based on feedback from CNN’s editorial team, she added. In anonymous feedback sent to CNN’s product team and shared with Digiday by a spokesperson, editorial employees said Stellar reduces the amount of time spent programming and publishing content, “from double digit minutes to single digit minutes and seconds” — especially important when dealing with breaking news. Stellar allows them to drag and drop pieces of content for the page and edit collaboratively, according to the comments.

Stellar will also enable CNN to improve the user experience and advertising offerings by giving their product team more flexibility to build content personalization and recommendation features, Rottier said. According to Comscore, CNN.com had nearly 122 million unique visitors in March 2023.

Rottier did not have details on what this would look like, but noted CNN’s teams are in talks with advertisers to determine product development with marketers in mind down the line. CNN hasn’t built new ad units or features for advertisers with the launch of Stellar yet. Of the four ad agencies Digiday contacted, none of them had heard specific pitches from CNN about its new platform.

“We evaluate publisher partners primarily based on their content, audience, creative units, cost, measurement approach and added value. CMS improvements can absolutely make the experience better for users, which may improve time on site, engagement and number of visits, but we’d expect publishers to be continuously improving those elements over time,” Claire Russell, head of media at ad agency Fitzco, said in an email.

Jared Lake, svp and head of media investments at ad agency Ocean Media, added: “ I think moving into an election year, any product improvements that provide advertisers with better options for targeting and relevancy is a good thing.”

The company is in the process of fully migrating its backend system to Stellar, which is hosted on CNN’s tech stack. Agency executives did not seem concerned that the migration would impact impressions on CNN’s site, an issue that beleaguered Dotdash Meredith’s tech stack migration. To “minimize any possible negative impacts,” CNN’s editorial teams have created content using the previous CMS but displayed it using Stellar templates, according to a CNN spokesperson.

Stellar was first tested by the team behind CNN’s product review site Underscored. The entire CNN Opinion team has been onboarded onto Stellar, meaning several hundred CNN employees are already using the publishing platform, according to a CNN spokesperson. The next teams to be onboarded to the CMS are Enterprise, Culture and Features. Rottier expects all of CNN’s teams to be using Stellar by the end of this summer.

Publishers such as Ingenio, Forbes, Dotdash Meredith and BuzzFeed are updating their publishing platforms to integrate more AI tools. But CNN said this isn’t part of their roadmap yet. “We don’t have anything specific, but we are actively looking at ways to think about how AI can help both our editors and our users as well,” Rottier said.