One Year In, Wavemaker Takes Shape But Stays Fluid

What do you get when two legacy media agencies merge to create a new brand? An entity that aims to be more agile and data-driven than the sum of its parts, said Wavemaker CEO Amanda Richman. “We need to create ways of working that are much more seamless and allow us to be much more connectedContinue reading »

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Billie, A Direct-To-Consumer Women’s Razor Brand, Has A Leg Up On Legacy CPGs

Harry’s and Dollar Shave Club went from upstarts to behemoths, shaking up the century-old razor category in just a few short years. But there’s still more market share to shave off the top. What about women’s razors? That’s the question that Billie, a razor subscription service for women founded last year, is aiming to answer.Continue reading »

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European Advertisers Have Limited Ability To Verify YouTube Ads

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today’s column is written by Bjarte Humborstad, digital director at RED Media Consulting. Following the introduction of the General Data Protection Regulation (GDPR), Google has allowed advertisers to serve their YouTube ads only from Google-ownedContinue reading »

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Quartz Acquired; Oath Doubted

The Business Of Media Atlantic Media is selling its mobile-first business property, Quartz, to Uzabase, a Japanese media company with a business news app and corporate intelligence tool. The deal is valued at between $75 million and $100 million, Quartz reports. Founder and editor-in-chief Kevin Delaney and publisher Joe Lauf will become co-CEOs as founderContinue reading »

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Creators are making longer videos to cater to the YouTube algorithm

YouTube has frustrated digital video creators for not always displaying their videos to the people who subscribe to their channels and for sometimes pulling ads from their videos that people do see. So YouTube stars are increasingly responding by extending the lengths of their videos in order to curry favor with YouTube’s watch-time-minded recommendation algorithm and to be able to feature more ads per video.

“I’ve figured out ways to monetize and to take advantage of the power of the algorithm,” said Cody Ko, a comedian whose main YouTube channel claims more than 1.1 million subscribers. “Obviously, it preferences longer videos, throwing multiple mid-rolls in, which tons of people do now.” Last year, Ko typically posted videos to his channel that lasted between six and seven minutes. But as YouTube cracked down on which videos were eligible to carry ads and removed ads from some of Ko’s, he upped the average length of his videos to range from 12 to 16 minutes.

The move by creators to produce longer videos “is very much correlated to over the last two years when YouTube switched the recommendation engine and search and discovery [to push new channels and creators to viewers],” said Rafi Fine, co-founder of Fine Brothers Entertainment, an entertainment company that produces videos and shows for digital platforms like YouTube as well as for traditional TV and whose main YouTube channel counts more than 17 million subscribers.

While YouTube’s algorithm has prioritized watch time since 2012, creators have seen it shift toward favoring videos that people are likely to click on, but from channels they don’t subscribe to over videos from subscribed channels, Fine said. But if creators can demonstrate that their audiences spend more time on YouTube in order to watch their longer videos, they may be able to retrain YouTube’s algorithm to promote their videos in order to generate the desired watch time.

Other creators and media companies are similarly lengthening the videos they upload to YouTube. Remi Cruz, a lifestyle vlogger with 2.3 million subscribers on YouTube, usually posts 20-minute videos, she said. Gwen Miller, vp of content strategy at digital video network Kin Community, said 10 to 16 minutes has become the sweet spot for YouTube videos. And Whistle Sports, a digital video network that works with individual creators and produces its own original programming, tries to stick between the seven- and 12-minute range.

“We’re trying to generate watch time because we know that’s favorable to YouTube,” said Josh Grunberg, Whistle Sports’ head of community development and growth. “We know that they want meaningful views.”

Meanwhile, the move to increasingly insert mid-roll ads within these longer videos coincides with YouTube’s push over the past year to more aggressively restrict ads from running against some videos in an effort to reduce its brand-safety problems. A video may still risk being stripped of ads, but creators can hedge their bets by attaching more ads to a video so that a monetized view can generate more money to offset a demonetized view.

Once Ko’s videos began to exceed 10 minutes, he could run multiple ads in the middle of videos in order to make more money per view. Sixty percent of viewers probably won’t even be shown an ad, said Ko, “but it ups the chance that someone will get an ad, so the [per-video revenue] goes up, and you make more money for your video.”

Ko’s shift to posting longer videos brought another benefit. “I find the retention is better for longer videos,” he said, attributing the correlation to the added time allowing for more jokes to be included.

Viewership retention underpins the trend toward longer videos and mid-roll ads. Without viewers willing to sit through longer videos, creators wouldn’t generate the watch time that YouTube’s algorithm looks for and wouldn’t have as many impressions for YouTube to serve ads. That’s leading more creators to increase the attention they put toward retention.

Earlier this year, Fine Brothers Entertainment took a harder look at its videos’ viewership retention analytics to take fuller advantage of the mid-roll ad option and increase the amount of money they make per video. Previously, the company would insert the ad around the seven- or eight-minute mark of an 11-minute video. It would do this for two reasons: It didn’t want to annoy any viewers that were also served a pre-roll ad, and it assumed people would stick around through the mid-roll, having seen most of the video, said Fine. But based on its videos’ retention rates, Fine Brothers Entertainment found that viewers were more likely to watch through an ad if it was inserted around the five- or six-minute mark.

“Everything inside that area [of viewership retention], that’s the No. 1 area right now on YouTube to be focused on,” said Fine.

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From silent discos to burger battles: How events are driving Time Out to profitability

Events have become a more attractive option for publishers keen to get closer to their audience.

For Time Out, which started as a city guide, events have always been core to its brand. According to the publisher, it’s been evolving them over the years to make events a bigger part of its ad proposition and grow its e-commerce line, rather than adding incremental revenue to drive it to profitability.

In London this summer, the publisher is putting on Time Out’s Eye-Openers, 24 events inside the capsule of the London Eye, including drag queen acts and cocktail making; Movies on the River, a floating cinema on the Thames sponsored by Rekorderlig Botanicals cider; and other events including silent disco at London skyscraper The Shard and Battle of the Burger in New York. Last year, the publisher ran nearly 800 global events — up from 250 the previous year — for 150,000 attendees.

“It’s a combination of our brand and our content,” said Christine Petersen, CEO of Time Out Digital, part of Time Out Group. “Brands can interact with our customers in a 360-degree way.”

In March, Time Out hosted its annual Mac & Cheese Smackdown in New York, its largest event yet, where 13 cheesemongers fed 2,000 attendees their dishes. Tickets to the event cost £42 ($55), and it was sponsored by Jack Daniel’s, whose goal was to get its drink into younger people’s hands.

In Time Out’s annual report, ticket sales from events fall under e-commerce revenue, which was up 57 percent in 2017 to drive 19 percent, or £7.3 million ($9.6 million), of Time Out Digital’s total revenue. Event sponsorship falls under digital advertising revenue, which grew by 19 percent last year to make up 31 percent, or £12 million ($15.8 million), of Time Out Digital’s revenue.

Petersen said events are a core driver of Time Out’s e-commerce growth, driving over 400,000 e-commerce transactions in 2017, including restaurant bookings and theater tickets, up 33 percent from the previous year.

As the types of events vary, so do the sponsorship objectives: For Jack Daniel’s, the goal was getting the drink in younger people’s hands. For others, the goal is driving social reach. “If you’re not a brand that people follow, it’s all about the Instagram moment,” said Petersen. “It’s incredibly powerful if a sponsor can get into the Instagram moment tied up with Time Out.”

The danger with events is they can be low-margin and hard to scale, and publishers looking for a quick fix to stem falling ad revenue will come unstuck. “It takes strategic decision-making,” said Richard Gillis, managing partner at Havas sports and entertainment agency Cake. “Sometimes publishers shy away from bold decision-making and investment.”

Time Out doesn’t pull in a sponsor for all events, instead working with third-party providers on a revenue-share model, as it does with Hornblower Cruises for its boat trips in New York. How many events work under different models will affect how much further it can grow.

“Movies on the River is extendable: a boat, a movie rental, a sponsor with a beverage — that’s rinse and repeat around the world,” said Petersen. “You can look at everything as quite bespoke, or you can come with systems. It’s key the events stay fresh and interesting, but not constantly reinvent it. We could do Battle of the Tacos in two years.”

Time Out Group doesn’t break out head count beyond its total of 400 people globally, but Petersen said a small team primarily based in the U.S. and U.K manages events, with outside help from production companies when needed.

Sustained growth at this rate will be a challenge, said Gillis. “You don’t want to get into a scale game to drive growth. Something else has to happen,” he said. “Value is a feature of scarcity. The price will go up if you create more value in each event. There’s no reason they can’t do that, but it’s harder with 800 events than with 250.”

Petersen said events are starting to intersect with Time Out Markets, which are part of Time Out Group but managed separately from Time Out Digital, opening up more ways for brands to reach Time Out’s audience.

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‘Like having a lawyer in the room’: Agencies are turning advertisers’ angst about spending on Amazon into an opportunity

Agencies are playing up Amazon angst to their advantage.

Marketers are wary of their margin becoming Amazon’s opportunity when they buy ads for products they sell on the site. Agencies, in response, are acting like advisers to those marketers, building on their earlier attempts to capitalize on interest in the platform.

When e-commerce management firm Kwontified met with one of its advertisers recently, the client wasn’t interested in learning how to buy a search campaign. Instead, it wanted to know how to protect its interests if it shared its data with Amazon in order to reach the right shoppers.

“There’s a latent fear among a lot of brands that if they get too close to Amazon that they’ll copy and extol what they have,” said Jordan Taylor, Kwontified head of marketing. “Rather than just creating campaigns, we’re forecasting sales for clients, talking to them about whether the platform is right for their brand before going in to negotiate deals with Amazon reps on their behalf.”

An ad agency executive, who spoke to Digiday on condition of anonymity due to existing deals with Amazon, summed up why that difference is such an intriguing concept for their agency: “Not all my clients like working with Amazon because it has been going directly to them, absorbing all their information without sharing anything back. People talk about the role of an agency in a world where Amazon becomes the dominant channel, and my answer to clients is, ‘You should treat us like having a lawyer in the room.’”

The agency is building a consultancy capable of bringing the e-commerce and media aspects of Amazon together for clients. Once built, the agency’s Amazon division will have little similarity to its other specialist teams, said the executive. While media planning and buying will be offered, the real differentiator will be in the team’s ability to advise marketers on what products to put on Amazon, how to control the third-party seller environment, creating a product review process and working with Amazon’s executives.

“The fact is that there are many advertisers that are still looking at Amazon like a retailer rather than an advertising platform,” the agency exec said. “That means a lot of the spend is coming out of shopper marketing budgets than the bigger media ones.”

To a business like Nike, which likes to keep its brand on a tight leash, Amazon’s web of third-party sellers took that control away. Search ads from the Amazon Marketing Services division aren’t going to solve those sorts of problems for advertisers, said Avery Durnan, vp of media platforms at VaynerMedia. Some of the advertisers just want guidance on how to fit Amazon’s e-commerce offering in their media strategies, rather than actual campaigns. It’s those clients that don’t want to be left behind on Amazon, said Durnan, but also don’t want to jump into it with limited knowledge of the impact it could have on their own businesses.

VaynerMedia has an entire division dedicated to tackling those questions for clients, said Durnan. More brands “just want the education on Amazon,” she said.

“There are brands hesitant to invest on Amazon because they feel like they will lose their margin, but we’re trying to encouraging them to realize that if they’re not going to be there [on the site], then someone else will by distributing their product,” she said. “We’re having to explain to brands that they can control those third-party sellers by owning their [product] listing and owning their own brand terms.”

Experienced Amazon advertisers don’t appear to share the concerns of first-time advertisers on the platform. By the end of the year, Amazon’s ad revenues in the U.S. are forecast to jump 63.5 percent, surpassing $2 billion for the first time. The rise will give the retailer a 2.7 percent share of the U.S. digital ad market, a portion that will grow to 4.5 percent by 2020.

“We absolutely have to act as consultants right now,” said Gareth Owen, managing director at digital agency Roast. “Learning the best way to hack the platform, learn with Amazon and being agile and fleet of foot is the only way to keep ahead of what will be a long journey to maturity.”

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‘Trial and error is not appropriate’: Facebook’s issue ads policy sweeps up brands

Facebook’s new political ads policy has drawn scorn from publishers — and now a constituency more near and dear to Facebook is bothered: ad buyers.

In the wake of Russian meddling in the 2016 U.S. presidential election, Facebook has taken an extra-cautious approach for political advertising. Anyone who wants to spend money on Facebook to promote political topics must register with an official government ID, and once approved, they must mark all political ads as political.

Yet frustration has mounted since ad buyers — even executives at major media-buying agencies — have been unable to properly identify what ads need to be labeled as political. Brands’ corporate responsibility efforts, such as ads during Pride Month, have been swept up in the madness and have led to delayed campaigns. Facebook’s automated system has also erred. It’s all left buyers feeling like Facebook is just guessing and not doing enough to be transparent.

“I’ve been very clear with the people I talk to at Facebook that trial and error is not an appropriate way we should go to market because advertisers may or may not be able to get through it,” said an executive at a top global media agency. “It’s creating a lot of extra work, and I have yet to get definitions that are clear enough to provide enough guidance.”

In May, Facebook released a list of 20 issues that would be subject to its new terms that require advertisers to register as political advertisers and to properly label ads that are political. At that time, media buyers told Digiday they appreciated Facebook’s attempt to regain public trust, but were concerned about the barriers the policy would introduce. Now, media buyers are dealing with those hurdles and remain confused about what exactly is included in these 20 issues.

WeWork had been running Facebook ads promoting its support of #pride on June 20. It also ran an ad for the WeWork offices in Chicago on May 21. Both ads were archived as ads with political content and marked as “ran without a ‘Paid for by’ label.” A Facebook ad from Nestlé promoting tips on how to help veterans succeed at work received the same treatment. So did Facebook ads for insurance company Lemonade that promoted its renters insurance plans “for the price of a latte.”

WeWork declined to comment on its Facebook ads. Lemonade did not respond to a request for comment. Kate Shaw, who handles corporate communications at Nestlé, said the company has been working closely with Facebook during this process.

“As a key partner, we have engaged in a constructive dialogue with Facebook about the measures it is taking to provide more transparency to users,” Shaw said. “We are encouraged by and broadly welcome the changes it has announced and implemented to date. We will, however, look into whether any of these moves have had unintended consequences — such as the inappropriate tagging of content as ‘political’ — and share any concerns we have with Facebook.”

A Facebook spokesperson said the company has been pretty clear that it’s still working on its policy, and it will not be perfect.

“This is a first step. Certainly we don’t want to create unnecessary roadblocks for businesses — and we’re grateful when people help us discover where we’ve made errors, which is also why we have processes in place like the ability to appeal an ad. At the same time, these tools are incredibly important in helping us prevent election interference,” a different Facebook spokesperson said.

The appeals process is one way Facebook is trying to improve and account for errors in the system, the spokesperson said. After Ad Age flagged a Facebook ad paid for by Walmart about the company bringing jobs back to America, Facebook said it was inaccurately deemed political.

“The aim of this policy and authorization process is increased authenticity for political ads on Facebook,” a Facebook spokesperson emailed Ad Age. “It won’t be perfect to start — we’ll learn and evolve over time — but we think the good far outweighs the bad.”

Publishers have been critical about this new policy since it also required them to label political articles as political ads if they put paid media behind it. To publishers, the move conflated independent journalism with advertising. Following the protests, Facebook tweaked its policy to put those articles in a separate archive, but it didn’t eliminate the step.

Separately, media buyers for brands are juggling the initial registration process. Registration can take a few weeks to complete. It also requires someone on the account to send their official government ID, which some people inside brands are uncomfortable with and therefore agency executives are doing on their behalf.

Once registered, buyers need to properly mark their ads that are political, according to Facebook. Facebook will remove an ad if a buyer erroneously marks it as political or if it is political and not marked. Bloomberg reported that ads with the words “Bush” and “Clinton” are being removed even if they don’t have anything to do with the former presidents.

Buyers can request an appeal if they believe Facebook inaccurately removed an ad. Betsy Hindman, a digital marketer for business-to-business clients, said one of her Facebook ads promoting an editorial on how cities without an airline hub can attract fly-in visitors was not initially approved by Facebook’s system but was later accepted after a manual review. Her appeals process lasted a day.

For ad buyers, it’s simply not clear what is political and what isn’t to Facebook. For example, one of the 20 top-level issues in Facebook’s list is values. Another is the environment.

“There’s a lot of corporate responsibility campaigns that you wouldn’t anticipate, like Pride,” said the agency executive. “Facebook is casting a wide net, but for an advertiser, like a big retail account that supports Pride and does BOGO on shoes, we’re having to go through new processes on if and when they should mark things as political.”

Indeed, during a press event last week about the launch of the ad transparency tool, Facebook’s chief operating officer Sheryl Sandberg said the company was opting for more transparency.

“We had a choice. We decided that our goal is transparency. We’re just erring on the side of being more transparent,” Sandberg said in response to a question on publishers’ frustrations with the policy.

While buyers at top agencies have access to Facebook representatives to share their complaints and ask about individual ads, smaller advertisers are more limited. Ads can initially be approved and run in the system for hours before they are deemed inactive.

These hiccups are just the beginning. Facebook’s system is only live in the U.S. and is rolling out to Brazil ahead of the country’s general election in October. If Facebook, a U.S.-based company, is struggling to properly identify English ads, it’s questionable how the system will perform internationally. Additionally, it remains to be seen how the issue ads will be localized and then interpreted elsewhere.

“I imagine there will be even more false positives in a place that speaks Portuguese versus English,” said the agency executive.

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Target’s not going cashless (yet), but it wants to digitize cash counting

While cashless retail is far from a reality in North America, Target is taking a major step to eliminate the unseen headaches (and expenses) cash causes in day-to-day store operations.

Starting next month, the retailer will start installing automated cash-counting machines called “cash recyclers” in its stores, which it said will free up more time for employees to take on new tasks. Since counting cash manually is costly, time-consuming and inefficient, the machines will let employees focus on personalizing in-store experiences for customers.

Target will install the machines at 500 stores in August, with the goal to eventually roll them out to all U.S. locations. The machines will let Target, which has 1,800 stores across the U.S. and 300,000 in-store employees, more easily integrate cash transactions into its banking system and improve the efficiency of employee workflow, the retailer said. Target estimates that on an average day, the cash-counting process can take up to an hour and a half collectively for all team members working in a store. Over the course of a week, the machines can relieve an entire shift that employees can devote to other tasks, according to Target.

The efficiencies from digitized cash counting let large retailers like Target, Walmart and Amazon bolster their competitive positions against online e-commerce retailers, including Amazon. Target said the “cash recyclers” will let its staff members focus on customer experiences, but Barry Clogan, president of retail operations at MyWebGrocer, a company that builds e-commerce platforms for grocery retailers, said the flexibility could allow employees to take on a range of tasks, including fulfilling online orders.

“It’s fundamentally driven by the disruption of online retail that Amazon continues to drive,” he said. “The trend is to make these stores more efficient because then they’re a good distribution point, and as you map out the trend toward e-commerce, they become great collection points and fulfillment centers.”

Target differentiates by offering niche product categories that carry higher margins and faster growth rates than other areas of its business, but this business model is under pressure as more customers shift to digital retail, Morningstar analyst Zain Akbari wrote in a recent report.

Other large brick-and-mortar retailers that embarked on similar moves have eliminated the need for certain types of jobs. Walmart, for example, reportedly introduced a similar machine last year that eliminated 7,000 accounting jobs from its stores.

Target said the automation of cash counting won’t result in staff reductions; rather, the “cash recyclers,” which are built by Retail Cash Solutions, will let employees serve customers better. Quicker integration of cash and online banking systems can amount to major cash savings for retailers, according to Fifth Third Bank, which developed a similar machine for retail clients it’s been working with in recent years. A spokesperson for the bank said the machines, which have been installed in Pilot Flying J locations for more than three years, freed up $20 million that the client could allocate to other priorities.

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