Month: April 2023

Publishers are following in the footsteps of advertisers that have pulled money out of Twitter since Elon Musk took the helm six months ago. Some media organizations are now doing the same, and no longer paying to promote posts on Twitter to draw more eyeballs to their stories or sponsored content.

“Publishers are seeing the platform as toxic and unstable, and no one really wants to put their budget or energy into maximizing a platform that feels toxic and unstable,” said Melissa Chowning, founder and CEO of Twenty-First Digital, an audience development and marketing firm, in an email. Chowning’s “handful” of publisher clients that previously retained ad spend with Twitter have walked away from the platform, she said.

The social media platform had previously appealed to large brand advertisers, but companies from Coca-Cola to Best Buy paused their advertising on Twitter when Musk took over the company last October, due to controversies, uncertainties and changes that plagued the platform. This month, Twitter started winding down its legacy verified program that gave blue check mark badges to notable figures or organizations — particularly news publishers — to indicate their accounts were truly theirs. Now, individuals can pay $8 or $11 a month for that check mark, and most organizations will have to pay $1,000 for Twitter’s new gold check mark verification badges launched this month.

Of three national publishers Chowning works with, and declined to name, none of them “had any interest” in paying for Twitter’s gold check marks, she said.

Earlier this month, MediaRadar analyzed Twitter spend among 17 major U.S. news outlets, including Axios, CNN and HuffPost from Jan. 1, 2022 through Feb. 28, 2023 and found an 83% year over year decrease. The Atlantic, The Guardian and The Gist told Digiday they are no longer paying for paid posts on Twitter.

According to MediaRadar’s report, the news publishers it analyzed collectively spent just $279,000 from January to February 2023, a sharp decline from the $1.7 million spent during the same period in 2022. Axios and CNN declined to comment on this story.

Holding onto their wallets

Publishers like NPR and PBS have left Twitter entirely — both as users and as advertisers. A spokesperson at The Atlantic said they are not doing any paid marketing on Twitter right now; they declined to comment on this story.

The Guardian hasn’t placed paid posts on Twitter over “the last few months,” a spokesperson said. The Guardian declined to answer questions about when or why they stopped, but a spokesperson said the organization was “keeping an eye on developments.”

Newsletter publisher The Gist stopped paying for ads on Twitter about two years ago, co-founder Ellen Hyslop said. Advertiser clients have expressed “no interest” in having sponsored content boosted on the Twitter platform since then too, she said. Two digital publishing execs told Digiday in January that clients were not interested in advertising on Twitter.

“Twitter felt like it started to be a place and a community that was a little bit more negative than positive,” Hyslop said. “We started to see from our audience, a little bit of a mass exodus from Twitter because of fake news that unfortunately people were experiencing on Twitter.” Hyslop believes this move was accelerated by more news content getting shared on other social platforms like Instagram and TikTok.

But some still bullish on Twitter

Other publishers, however, are still spending money on the platform. News newsletter publisher 1440 started paying for ads on Twitter last December after not advertising on the platform in at least three years.

“We’re spending about six-figures a month on Twitter right now. It’s been about 10% of our [subscriber] growth over the last couple months,” Huelskamp said. The newsletter publisher currently has over 2.4 million newsletter subscribers. He declined to share exactly how much money 1440 spends on Twitter per month.

“We had tested Twitter previously and that just wasn’t feasible for companies like us… It was just not a good channel for folks that are doing direct response advertising,” he said. “Something like 90% of the clicks that came to our site would never convert.”

But when Huelskamp noticed that paid posts on Twitter were changing from “Bank of America ads to T-shirt ads,” 1440 started to pay to promote their own posts on the platform. The Wall Street Journal reported last month that Twitter has more direct-response advertisers now paying for posts on the platform.

A publishing executive who spoke to Digiday anonymously said Twitter’s paid posts are converting newsletter subscribers “on par with Facebook and Google.” The publisher is spending around $2-6 cost per acquisition, they said.

HuffPost’s Twitter ad spend is “very small and based on client demand or if a branded content campaign calls for it,” a spokesperson said. They did not immediately respond to questions about how much they’re spending on the platform or if they’re paying to promote their own content on Twitter.

Declining role in referring traffic

Another reason for the decline in ad spend from publishers on Twitter is likely the platform’s declining role as a traffic referral source to publishers’ sites.

In 2022, referral traffic from Twitter to news & media sites dipped by 20% year over year, according to data from publisher analytics firm Chartbeat. Chartbeat analyzed Twitter traffic to over 300 U.S. news & media sites in 2023 and found little change since January.

Data from Similarweb also showed a decline in referrals from Twitter year over year in March 2023 to about a half dozen major news websites. Publishers such as BBC, CNN, The Guardian, The New York Times, The Washington Post and USA Today each saw referral traffic from Twitter fall between 36% and 49%.

“[For] our marketing efforts, we’re constantly looking for the best returns. Sometime it’s on Facebook, sometimes on Google, sometimes [on a newer platform],” the publishing executive said. “We’re just constantly trying to find that perfect wave.”

As part of its Future of TV week, which wraps today, Digiday, in partnership with sponsor DirecTV, hosted a CTV leaders dinner in New York Wednesday evening.

The deep and wide ranging conversation with over a dozen agency and platform executives — conducted under Chatham House Rules, which shields participants from sharing names and affiliation in exchange for candor — covered topics spanning from the challenge of making sense of dense fragmentation in the CTV space (according to research by DirecTV, 70% of viewers pay to subscribe to live and video-on-demand services), to whether AI has a place as a tool to streamline the more complex functions of the CTV proposition.

What follows is just a small fraction of the conversation, edited for brevity and clarity, and, again, conducted anonymously.

On fragmentation

“It’s really confusing for marketers, and frankly, how you make sense of the various different propositions that everyone has to offer. You couple that with FAST channels being onboarded. And now you’re in a place where how do you define premium. Fragmentation is difficult for all of us.”

“There’s really a lot of transparency issues between the different devices and platforms. And that’s what we’re hoping to eventually break down. But yes, a lot fragmentation.”

“We used to buy the same way consumers watch and it was easy. But now consumers have a whole different landscape than the buying landscape these days and you have to navigate both. And that’s a complexity that we have to think as programmatic continues to grow. How you buy vs. what you’re consuming adds to that layer of fragmentation, because it’s just not synced up the way it used to.”

“Where fragmentation really comes to me is literally like, ‘How are you going to buy? How are you making sure that you’re buying across all devices and publishers that you really need to reach your audience effectively.’”

“I feel like it’s probably going to be easier to buy linear, addressable and linear. And, for a while, a lot harder for CTV because of the fragmentation, identity becomes a really big important part of that.”

On reach

“So it becomes a really interesting planning question in terms of overall budget in terms of like, yes, audiences are shifting here. But can you really reach them? Where do you spend your first dollar? How much do you do there? Where do you go next? Planning has become my thing. So complicated.”

“How do you equate an ad in one program versus another in linear? We’re used to already valuing those differently, because Prime was more valuable than overnight. And then you looked at different costs on an efficiency basis, and that would range but it’s really what’s effective reach? Is it the same? Is there anything you could do to tip the scale?”

“We’re used to just kind of checking the box because it was all equal and you could do a comparison pretty easily. Now there’s a lot of ways to reach them [audiences]. So what is effective reach? Can we just check the box that person has been reached vs. did we make an impact and an effect?”

“Yes. But that is assuming that we measure all the same way which we do not.”

“Totally agree. So the conversation on the unique reach challenge is, at some point, you have to measure those things and figure out how you can use uniformity, which most people are not, most brands are not. In fact, most brands aren’t measuring it at all. If you want to reach a certain amount of customers, you’ll have no idea how many of them you’re getting to.”

On CTV and data

“We’ve all seen this before. It’s just walled gardens, everyone protecting their data again, and it’s a mess. It’s gonna get messier.”

“The question is, do those platforms, Amazon, Roku, all start to set up their own clean room initiatives. And that data never leaves their world and then we’re all sort of working in those environments regardless.”

On Identity

“CTV is born on third base… So authentication rates on CTV proportionally or anytime is greater than anything. The web on its best day is a low single digit authentication. CTV without trying can hit five to 10. It’s going to be more signal rich than most of digital. Identity will be accelerated, which we think of identity in terms of what we use right now. But where there is rich signal, that’s where the market is headed.”

“I think there are potentially challenges there just from marrying identity and show level data. And there are some regulatory issues that we may have there. So I don’t know how those get married.”

On AI’s emergence

“ChatGPT is only as good as its recent put in. And for planning tools, is that information good? How much do you believe the information you’re being given. And then also the, again, to that point of identity, do you actually believe that identity is truthful?”

“I think it will help. Like where it can be applicable, or where it’s interesting to me, is that it will lower the cost of creative so it allows for more entrants into the space.”

“Then also areas that are hard to understand. Podcasting is a great example — it generates so much content but it’s impossible to know what it is. But large language models can now decode it really cheaply. Create datasets that open up different channels in ways that we can understand. There are these sort of adjacent solves or really interesting areas to explore.”

Two years after Apple’s App Tracking Transparency went into effect, the framework is looking more like Schrödinger’s cat than a total poison pill for ad-tech.

It’s no secret and no surprise that Apple’s privacy changes have had a major impact on digital advertising. Since going into effect two years ago this week, ATT has cost social networks billions of dollars in lost ad revenue, given Apple a potentially major advantage for its own ads business, and provided users a way to think differently about their data.

When Apple first introduced ATT in 2021 — a feature of iOS 14.5 and iPadOS 14.5 — it offered users an easier way to opt out of being tracked by apps with added controls for how companies collect, share and use personal information. However, it also exposed weaknesses in seemingly impenetrable giants like Facebook and Google and created an “existential crisis” across an industry heavily reliant on third-party data.

Despite doomsday warnings of how Apple’s changes could cause an implosion of ad-tech, there is still growth. Internet ad revenue grew 10.8% year-over-year to $209.7 billion after growing 35% the year prior, according to the Interactive Advertising Bureau’s 2023 report released earlier this month. Even social media grew at a rate of 14%, according to the annual study, which was conducted with the auditing firm PwC.

“If you were to ask a small business owner if the hype was overblown, they’d say absolutely not,” said IAB President David Cohen. “Is it the doomsday scenario? No. But [it] still inhibits the industry… There’s a pretty big delta between 35% and 10.8%.”

Apple hasn’t gone without facing new scrutiny over ATT. Officials in France are reportedly considering antitrust action related to its app tracking changes, following similar actions taken by German regulators last year. And earlier this week, European Union regulators clarified that Apple’s App Store would be among the 19 tech giants governed under the new Digital Services Act. (For example, the company will be forced to follow the same app tracking transparency rules it’s set for third-party developers.)

Apple’s changes have been a “very bright light” on non-consented data use, said Gartner analyst Eric Schmidt, but declining match rates and weakening retargeting have also highlighted broader issues around measurement.

“Competitively, it was a master stroke by Apple,” Schmidt said. “They put themselves in the driver’s seat. They control the narrative of what happens on an Apple device stays on an Apple device. They put Google on the defensive and control the timing because now they have the narrative and can decide when to make the next tweak, [or] tighten up the next parameter.”

The impact of ATT also continued to be a cloud over corporate earnings, following last year’s slowdown at companies such as Meta, Google and Snap. Others — such as Nextdoor, Spotify, Groupon and Cars.com — have all mentioned the potential challenges in their financial disclosures along with ad-tech companies including The Trade Desk, Pubmatic, Magnite, AppLovin and Criteo.

When asked on Meta’s quarterly earnings call whether the company is getting back to where it was pre-ATT, Meta CFO Susan Li said the company is “making progress certainly in mitigating the direct impact” while Meta VP of Finance Chad Heaton said business returning to how things were before ATT is the “wrong way to think about it.”

“I think ATT is just the new landscape that all digital advertisers, including us, operate in,” Heaton said. “We’re in this new space. From there our focus is on improving ad performance with investments in onsite objectives and AI.”

Many companies have tried to develop workarounds, but Schmidt said a frontrunner solution seems even less likely than it did a year ago. If 2022 was all about which alternative ID might prevail, 2023 is more about if there will even be one, leading to an “almost existential challenge for advertisers.”

“Marketers are questioning their open web programmatic budgets and scrutinizing those budgets at a level they haven’t in years past,” he added. “They’re asking if there are places where those dollars are better spent. That’s the ball that Apple got rolling.”

Some say the technological shift has also led advertisers to move past mobile to explore other types of advertising such as connected TV, email and gaming across PCs and consoles. The weakening signals have also led some advertisers to shift from performance marketing toward more brand-driven messaging. Some are shifting because they don’t see brand marketing as affected by privacy and consent issues, but others are cutting brand dollars because they’re harder to measure.

The impact could also be felt in Apple’s own iOS ad inventory not getting filled like it did before ATT went into effect. When video platform Connatix analyzed audience-based buys, it found that iOS traffic makes up just 48% of ad revenue despite iOS devices accounting for 64% of total traffic. On the other hand, Android devices accounted for 52% of ad revenue despite only making up 36% of ad requests.

Others have seen somewhat of a recovery with iOS devices since ATT went into effect. According to InMobi’s Appsumer data, iOS share of spend fell from around 50% before ATT to 37% in the first few months after it went into effect, but it’s now returned to 50% in recent months.

Publishers are much more aware of the impact than advertisers, said Connatix head of client success Binda Patel, who added that in-house teams noticed it more than advertisers that outsourced media buying to agencies.

Opt-in rates of users have been higher than the industry originally expected, said Brian Quinn, U.S. president and GM of AppsFlyer, a mobile analytics provider. However, the average opt-in rate across all industries has ticked downward from 46% after the first year to 45% after the second. Some industries have seen more success, with shopping apps having an 82% opt-in rate.

“No doubt we’ve seen a greater exploration in non-mobile platforms,” Quinn said. “It’s a healthy sign for the industry because it’ll give more publishers on more platforms an ability to help brands find and engage users and it’ll be a more balanced ecosystem moving forward.”

Some see opt-in rates varying based on how well a company can articulate how and what it tracks and what value it can provide users. For example, when ATT first went into effect, just 18% of users were open opt-in via ATT, according to Airship. However, the company’s survey conducted last year found that the percentage could double when users see some sort of value from the exchange.

Two years later, there are also still questions about whether iOS users yet fully understand the data they share with companies. According to new research this week from the University of Bath School of Management, 43% of users were “confused or unclear” about what app tracking entails while 51% said they were concerned about privacy or security. However, researchers didn’t find any association between whether users’ concern for privacy led to them allowing less tracking or not.

Even when users opt-in, other researchers at the University of Oxford have found some iOS apps still track users based on the “grey area” of Apple’s policies while other apps have been found to provide inaccurate transparency about their data policies.

“The whole discussion around control is in ways a trap,” said Konrad Kollnig, a privacy researcher and professor who worked on the University of Oxford study. “Who’s in control?”

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