Less BS, More Facts, Some Opinions
“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 Kurt Abrahamson, CEO at ShareThis. Facebook recently created a small panic in the marketing and data community when it announced that it would pull the plug on its Partner Categories… Continue reading »
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Open For Business The IAB Tech Lab made its Open Measurement SDK generally available Tuesday after a seven-month beta. App publishers are embracing it with open arms. To meet all buyers, apps previously needed as many SDK integrations as there were viewability vendors –… Continue reading »
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Publishers focused on growing consumer revenue will take opportunities wherever they can find them, even abroad. But international markets come with specific challenges, including a low propensity to subscribe, complicated tax issues and lower awareness of U.S. publishing brands.
Awareness gap
Thirty-eight percent of American publisher respondents said international expansion would be important to their business in 2018, according to a Digiday Research survey. Markets outside the U.S. hold promise for publishers looking for subscribers, too. But the hill is steeper for publishers that don’t have strong brand awareness overseas.
“There is an opportunity for a couple U.S. publishers, but not for all of them,” said Lisa Jaeger, a partner in the media practice at the strategic consultancy Simon-Kucher & Partners.
Some address this problem by forging partnerships with local media companies, a move typically made to bolster ad sales. Bloomberg Media, for example, has partnerships with media companies from Mexico to Saudi Arabia, which provide access to local advertising dollars, local reach and marketing muscle.
“International success for media companies generally comes from a mix of quality content, strong brand equity, symbiotic and collaborative partnerships in market, and hard detail-oriented work,” said M. Scott Havens, Bloomberg Media’s global head of digital. “When you take a brand that’s not global, that may not translate as well as others that have international scale and recognition.”
Cultural differences
People aren’t exactly wild about paying for news in the U.S. But in Europe and elsewhere, the concept is more foreign. While 16 percent pay for news in the U.S., just 13 percent of Australians, 8 percent of Canadians and 6 percent of Britons paid for news in some form, according to the Reuters Institute.
Price pressure
The price consumers are willing to pay for content differs from market to market. Publishers including The New York Times and The Wall Street Journal are offering introductory rates as low as 99 cents per month to grow their international subscriber bases. Such a low price can help get volume, but makes it hard to get people to pay full price.
“I’m concerned about the price image they’re building here,” said Jaeger of the American publishers charging low introductory rates. “In research we’ve done, what we’ve found is that those customers who subscribe to a new offer at a very low price are in many cases just subscribing because of the price.”
VAT
The value-added tax, or VAT, is a cost that the supplier of any digital content or service to the European Union must collect on all transactions, then pay back to the EU, at a rate that differs by market. While the EU sets a baseline rate of 17 percent, member states are free to raise it at their discretion, or even lower it in certain exceptions; in some cases, the VAT is as high as 25 percent.
Each EU member state has its own way of accounting for the VAT payment as well, which adds a layer of complexity to publishers’ accounting and fulfillment systems.
Payment systems
Online payment with credit cards may be common in the U.S., but overseas, it can be a different story. “In some countries in both Europe and Asia, personal credit card use is not as common as other payment forms, and those payment forms vary widely across countries,” said Miki King, vp of marketing at The Washington Post. “Additionally, in some areas, there is a general lack of awareness of news subscription services.”
The Post, which has quadrupled the size of its international subscriber base over the past year, said it is testing PayPal-esque systems in parts of Southeast Asia and experimenting with various payment methods and subscription promotion messaging.
The post Publishers pursuing international subscribers face market-specific hurdles appeared first on Digiday.
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The Digiday Programmatic Marketing Summit Europe is coming up in a few weeks in Portugal, where we’ll discuss how brands are taking back control of their ad tech stacks and media spends from agencies. If you’re an agency or brand executive being affected by this change, apply for a complimentary pass to attend and be part of the conversation.
The disintermediation threat to media agencies has become very real.
Not since the advent of online marketing have agencies had to worry so much about being replaced by the technology platforms they helped grow. It’s not just high-profile players such as Procter & Gamble’s marketing chief Marc Pritchard threatening to spend their money elsewhere if agencies can’t ditch what advertisers believe is an archaic “Mad Men” model. Local players such as David Wheldon, Royal Bank of Scotland’s CMO, and Gerhard Louw, the media boss at Deutsche Telekom, are openly questioning why they should continue spending so much with agencies when they do so much directly with the likes of Google and Facebook.
While no one believes agencies need to disappear, advertisers want to get closer to media owners, especially for programmatic campaigns mired in transparency concerns. To get clarity, advertisers are asking agencies about the source of inventory and how data is being used, and agencies’ responses are pushing those advertisers to run parts of their programmatic internally.
The growing group of marketers who control how their ads are bought online are asking themselves why they should pay a premium for something they can increasingly do themselves. Advertisers like Deutsche Telekom are starting to use their ad tech to buy direct from platforms, while others like Duracell are starting to consult their media agencies before buying online media themselves.
Marketers at Siemens are wrestling with this trend as they try to revamp the way they work with agencies. The advertiser wants to continue working with agencies, said global senior online marketing manager Pauliina Jämsä, but it will be hard to do if “they hold on to the old ways of working.”
“We advertisers hire agencies for a reason: expertise,” Jämsä said. “So, if the agencies don’t proactively bring insights to improve performance, what stops us speaking directly to the platforms or influencers who actually prefer direct communication with a brand?” Jämsä added that agencies need to deliver better-quality service, and she wants to collaborate more closely with her agency on projects and receive more honest responses from it when problems with campaigns arise.
Jämsä is referring to the hybrid model, in which the advertiser takes ownership of certain parts of its media strategy, that more of her peers are inching toward. The driving philosophy: Advertisers control programmatic instead of in-housing an ad tech stack. Companies like Siemens want to run the ad tech contracts themselves, have more say in how they pay agencies and move away from cost-driven KPIs to ones tied to business outcomes, like with Duracell’s latest move. Approaches like these are what most marketers mean when they talk about taking media or programmatic in-house. Therefore, the pressure is on agencies to look beyond media buying when it comes to programmatic.
Seven in 10 (71 percent) of marketers believe media agencies have struggled to adapt to programmatic, per an Infectious Media study of 200 senior marketers. Despite wanting more control over programmatic and viewing the agency model as broken, advertisers believe agencies will play a valuable role in the future, with 96 percent of those surveyed saying agencies should manage multiple aspects of programmatic advertising going forward.
WPP boss Sir Martin Sorrell recently tried to allay investor concerns that the slump in its fortunes was a sign the ad agency business is being disintermediated. And while the likes of Google and Facebook have repeatedly said they have no designs on the lucrative but low-margin agency space, the platforms have found themselves closer than ever to marketers.
“To be frank, advertisers can’t understand the value add between the dollars they spend with an agency and the outcomes,” said Jon Wilkins, chairman of Karmarama, the creative agency acquired in 2016 by Accenture Interactive. “Advertisers are thinking they might as well spend that directly with the platforms, and consequently, we’re seeing a lot of in-housing on the brand side.”
Consultancies like Accenture Interactive are looking to exploit agencies’ disintermediation by online platforms. “The biggest threat to agencies is the movement of more programmatic into advertisers because that’s where all the money is made and where the margin is,” said Trish Shortell, managing director at executive search firm RSR Partners and former svp at WPP. “The likes of Accenture, Deloitte and IBM will create the biggest disruption from disintermediation, by building out capabilities that allow advertisers to take and run programmatic in-house themselves.”
We’ll hear more from Pauliina Jämsä at the Digiday Programmatic Marketing Summit Europe in Portugal from April 25-27. Learn more about joining us here.
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Clients are demanding their ads not show up in seedy places, so agencies are increasingly looking to hire chief brand-safety officers to act as point people for the fight against bad ad placements.
IPG Mediabrands’ UM appointed Joshua Lowcock as global brand-safety officer this week. His mandate is to lead the agency’s effort to stop advertising from running in “inappropriate” content and create safety protocols for the agency’s clients.
Lowcock said brand safety is getting more complex and about more than simply protecting media investment, noting instances like the Facebook-Cambridge Analytica scandal. “The question is, is it working with [platforms] or driving better behavior from them?” he said. “It’s the second: from platforms, from media partners and even ad tech companies.”
Similar roles are cropping up elsewhere. GroupM’s Joe Barone, managing partner for brand safety in the Americas, was appointed last year to that role to focus on brand-safety elements, including viewability, ad fraud and the context in which advertising appears. GroupM also has a dedicated brand-safety practice, established in 2016, led by evp John Montgomery.
At Bank of America, the team is in the process of hiring a brand-safety officer that will essentially focus on making sure the company gets what it pays for when it comes to advertising. Speaking at the CMO Summit at the Mobile World Congress earlier in the year, Bank of America’s svp Lou Paskalis said the role was a direct response to brand-safety issues like last year’s YouTube scandal. The bank declined to comment on the progress of the search and whom it is looking to hire.
This week, the American Association of Advertising Agencies announced that it’s creating an Advertiser Protection Bureau, which includes members from Dentsu Aegis, GroupM, Havas, Horizon and IPG Mediabrands. Each holding company will have one brand-safety leader on the bureau, and the idea is to work together for clients, by notifying each other if and when they see ads in unsafe environments.
Opportunism is at play, of course. Last year, when a flood of brands pulled ad campaigns from YouTube after seeing ads appear alongside objectionable content, agencies used that opportunity to remind clients they weren’t asleep at wheel — and that brand safety was top of mind. It rankles agency buyers that brands want brand-safe environments, but often don’t want to pay the premium associated with them. As one buyer told Digiday, the brand-safety crises have come with extra scrutiny of agencies. From accounting for every dollar to checking every impression, clients are getting much more in the weeds, this buyer said. “To me, a brand-safety role or roles is a way to reassure them we’re doing our part.” That means agencies defend their importance to and role for clients.
A Digiday survey of media buyers in March found that brand-safety concerns have a growing impact on how agencies buy media, with over half of the respondents saying agencies are responsible for brand safety. Only 14 percent said brand safety was the brand’s responsibility.
Silos are also an issue. At many agencies, brand safety remains the responsibility of multiple people. At iProspect and Dentsu Aegis, there are multiple people in digital roles who have brand safety in their remits. The argument for a centralized role is that brand-safety incidents are often not just about one brand, or even one agency.
“The analogy I use is with credit cards, where when there is fraud, all the banks work together to fix and identify,” said Lowcock. “It’s good for everyone.”
The post The new most important role at agencies: Brand-safety officer appeared first on Digiday.
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Snap has been stepping up efforts to curry favor with publishers, especially as publishers continue to feel the impact of Facebook’s news feed changes. Its newest pitch: commerce.
Snap has begun testing a commerce function within a handful of Snapchat Discover publisher channels, according to multiple sources with direct knowledge of Snapchat’s test. A handful of Discover publishers have already tested this option, which lets users swipe up and buy a product from the recently launched store inside Discover that also offers Snapchat merchandise like sweatshirts and hats. Sources said Snap is taking a cut from commerce revenue generated during the test; sources haven’t shared exact percentages.
Beyond the publishing partners that have tested commerce within Snapchat Discover, two other Discover publishers said Snap has approached them about commerce to let them know it’s coming and to gauge their interest.
Snap declined to comment on the record, but has previously told Digiday that commerce on Snapchat is a big priority for the company. This includes working with advertisers like Nike to sell products in Discover.
The Discover publisher commerce test comes at a time when the relationship between publishers and the biggest social media platform, Facebook, is at a low point. On April 10, Snapchat is hosting its first Publisher Summit in New York City, which is part of a broader charm offensive Snap has unleashed on publishers.
“As Evan [Spiegel, CEO of Snap,] mentioned on our previous earnings call, content is one of our top three priorities in 2018, and your success on Snapchat is at the heart of that. So we’re going to push harder and be more proactive with helping you succeed on Snapchat,” said Mike Su, Snap’s platform content lead, in a letter sent earlier this year to Discover publishers announcing the Publisher Summit.
Another way Snap has tried to help publishers make more money on Discover is by setting branded content guidelines for Discover for the first time, sources said. They allow publishers, for the first time, to distribute branded videos as Snap Ads units. News of Snap’s branded content approval was first reported by Ad Age.
According to one Discover publishing source, Snap sent publishers the following rules for branded content:
Snapchat is also allowing publishers to work with advertisers to run “promoted stories” separate from their Discover editions, sources said.
“There’s an interest on [Snap’s] end on how to work with partners to drive more revenue and make it more meaningful,” said an exec at a Snapchat Discover publisher. “It’s a constant conversation, and there’s definitely a feeling of a commitment to the partnership and figuring all of this out together.”
All of Snap’s moves contribute to the amount of money Snap pays to its media partners. In 2017, Snap paid more than $100 million to Discover content partners, according to Snap’s year-end earnings report. One Discover publisher said Snap-related revenues for the company grew by more than 50 percent in 2017 compared to the previous year.
“Snapchat’s been a more valuable partner for a while now — and that’s especially the case for the group of Discover partners that figured out how to drive audience and engagement and were early to the platform,” said an exec from this Snapchat Discover publisher. “You’re talking about millions of dollars in revenue that you can directly associate with Snapchat and with being on Discover.”
The post Snap is testing commerce with Snapchat Discover publishers appeared first on Digiday.
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Mark Zuckerberg did little to help defuse digital advertising’s “creepy because it’s complicated” reputation during a congressional hearing on April 10 in the wake of Facebook’s Cambridge Analytica scandal. He may have even inflamed it.
Under questioning by Roger Wicker, a Republican senator from Mississippi, Zuckerberg revealed that not even Facebook’s CEO has a firm grasp on what information Facebook collects on people to target them with ads.
Wicker: “There have been reports that Facebook can track the user’s internet browsing activity even after that user has logged off of the Facebook platform. Can you confirm whether or not this is true?”
Zuckerberg: “Senator, I want to make sure I get this accurate. So it’d probably be better to have my team follow up afterwards.”
Wicker: “You don’t know?”
Zuckerberg: “I know that people use cookies on the internet and that you can probably correlate activity between sessions. We do that for a number of reasons, including security and including measuring ads to make sure the ad experiences are most effective, which of course people can opt out of. But I want to make sure that I’m precise in my answer, so let me follow up with you.”
Here is a more precise answer: Yes, Facebook can track people’s internet browsing activity even after they have logged off of Facebook.
Facebook even updated its Cookies Policy last week to clarify that the company is able to collect “information about your use of other websites and apps, whether or not you are registered or logged in,” according to the revised policy that was published on April 4.
The previous version of Facebook’s Cookies Policy was less clear. That version specified that Facebook could still collect information about people using its own website and apps whether they or not they are registered users or logged in to Facebook but did not specify if that was the case for non-Facebook sites and apps.
We use cookies if you have a Facebook account, use the Facebook Services, including our website and apps (whether or not you are registered or logged in), or visit other websites and apps that use the Facebook Services (including the Like button or our advertising tools).
Zuckerberg’s apparent uncertainty about how Facebook tracks people outside of its walled garden to target them with ads compounds the issue facing digital advertising in the wake of the Cambridge Analytica scandal. The more light that is shone on the tracking and targeting that goes on, the more aware people become of the shadows.
Early into Tuesday’s hearing, Iowa Senator Chuck Grassley asked Zuckerberg if Facebook has been able to identify companies that have improperly accessed Facebook user data other than Cambridge Analytica and CubeYou, which were both brought to Facebook’s attention by news outlets. Zuckerberg had to equivocate. He reiterated that Facebook is investigating who else may have improperly access data about Facebook’s users but did not include an important caveat that he has admitted elsewhere: Facebook may not succeed in completely containing that data.
Facebook’s questionable competence as steward of its data has raised another question that’s consequential not just Facebook but all of digital advertising: do Facebook and its ilk need to be regulated in the U.S. as they will soon be in Europe when the General Data Protection Regulation takes effect in late May?
Last week Zuckerberg said that Facebook would adopt policies and controls in countries outside of Europe that would be similar to those required under GDPR, and he repeated that commitment on Tuesday.
Coinciding with Tuesday’s hearing, Democratic senators Edward Markey and Richard Blumenthal introduced a bill that would appear to be the closest U.S. equivalent to GDPR, if passed into law. The CONSENT Act — the Customer Online Notification for Stopping Edge-provider Network Transgressions Act — would make it harder for companies like Facebook to collect people’s information by requiring them to ask people to opt in to such data collection and usage.
Blumenthal teased the bill during Tuesday’s hearing and asked Zuckerberg if he would agree to asking people to opt in rather than opting them in by default when they use Facebook. Zuckerberg hedged. “I think that that certainly makes sense to discuss, and the details matter a lot,” he said.
Zuckerberg also hedged when repeating that Facebook is open to being regulated in the wake of the Cambridge Analytica scandal “if it’s the right regulation,” he said. However the conditions of any regulation may not be up to Facebook.
“If Facebook and other online companies will not or cannot fix the privacy invasions, then we are going to have to, we the Congress,” said Bill Nelson, a Democratic senator from Florida. “How can American consumers trust folks like your company to be caretakers of their most personal and identifiable information? And that’s the question.”
The post Under questioning, Zuckerberg doesn’t help digital advertising’s creepy reputation appeared first on Digiday.
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Story-sharing app Wattpad is riding branded content’s pivot to video to Asia.
Wattpad Studios, the company’s entertainment arm that partners with brands and entertainment studios to turn stories that appear on Wattpad into print, films, digital videos and TV shows, is expanding into Asia as the app’s popularity grows in the region.
Last week, Toronto-based Wattpad hired Dexter Ong, previously the director of corporate development for 21st Century Fox Asia, to oversee a new office in Hong Kong, where he will oversee the company’s expansion in Asia. With 130 employees worldwide, Wattpad plans on adding 40 more positions this year to support its entertainment business. The Asia expansion comes after the company recently raised $51 million in funding from Asian investors, including Tencent and Globe Telecom’s Kickstart Ventures.
“Southeast Asia is one of our most important regions globally, with some of our most dedicated and passionate users,” said Aron Levitz, head of Wattpad Studios.
The move helps the 12-year-old company, which has also worked on growing its presence in the U.S. and Europe in the past year, in its push to become a multiplatform entertainment company and work with global brands interested in reaching its international community of users, according to Chris Stefanyk, head of brand partnerships at Wattpad.
Today, brands and publishers are figuring out how to effectively create entertaining video content that relates to specific audiences. Wattpad doesn’t just want to be a platform brands can advertise on, but the creator of branded content. Asia is proving to be a hotbed for marketers and platforms that want to expand because of the high adoption rate of mobile overall.
“For us, we’re on the path of being the owner of social storytelling,” said Stefanyk.
Known for its community of fan fiction writers, Wattpad started off as an online community for a young audience that enjoys reading long-form content. Wattpad Studios launched a year and a half ago to connect media executives and brands to Wattpad stories and creators. Then, a year ago, Wattpad introduced Tap, an app where users read short stories in the format of text messages. According to the company, 90 percent of its traffic comes from mobile and consists of a millennial and Gen Z audience.
Wattpad has 65 million users worldwide, according to the company, and 17 million of those users live in Southeast Asia. Wattpad.com averages about 5.6 million unique monthly users, while the app averages around 2.6 million unique monthly users, according to comScore data. Overall, Wattpad has seen a year-over-year growth rate of 40 percent, according to Stefanyk.
Since Wattpad’s brand partnerships division was formed four years ago, Wattpad has worked with over a hundred brands such as AT&T, Kraft, GE and Coca-Cola to run campaigns on Wattpad, including story contests that ask users to write about a certain topic, branded lists, sponsored posts and display and video ad formats. Movie studios such as Lionsgate, Fox and Paramount have also recently worked with the platform. For writing contests, brands examine the number of impressions, the minutes spent reading a piece and how much of a piece is read to assess campaign performance. Wattpad does not reveal the prices of its branded content offerings.
Stefanyk said Wattpad users have spent more than 200 million minutes consuming lists and branded stories, reading, on average, 30 minutes at one time. “Wattpad community produces thousands of stories as part of branded writing contests each year,” said Stefanyk.
Brands can work with Wattpad Studios to determine what Wattpad stories might have the most commercial success as video and TV products, and then collaborate with partners such as Universal Cable Productions, Entertainment One, CW Seed and HarperCollins to turn them into branded entertainment.
So far, Wattpad is working with around a dozen brands in Asia on branded video content through Wattpad Studios. Stefanyk said putting more resources in the area should increase these opportunities.
Stefanyk noted a 2017 campaign Wattpad worked on for Unilever ice cream brand Cornetto for the Philippines. Together, they created a branded story on Wattpad written by one of 200 Wattpad Stars, the platform’s influencer network. Cornetto also conducted a contest that asked Wattpad users to submit stories about summer romance. Wattpad Studios took the winning story and made it into a full-length movie called “This Time,” featuring Filipino teen stars James Reid and Nadine Lustre.
The post Story-sharing app Wattpad looks to Asia appeared first on Digiday.
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A day after Gizmodo Media Group’s top executive left the company, the Univision Communications Inc. unit’s employees clashed with their new digital boss at a meeting that left people “panicked” and “frustrated,” according to those in attendance.
The exec was Sameer Deen, who was recently elevated from head of Univision.com to lead all Univision digital, including Fusion Media Group. FMG encompasses the former Gawker Media properties, including Gizmodo, Jezebel and Lifehacker; as well as The Root and The Onion.
Deen was put in the new position last month as the Spanish-language broadcaster Univision looks to make budget cuts across the company soon after canceling its IPO plans. Other FMG executives have been pushed out in recent weeks. On April 9, Gizmodo Media Group CEO Raju Narisetti left the company; Narisetti said in his departing memo that he asked to step down, but others disputed that he left on his own.
According to FMG staffers at the meeting or close to the company, Deen and FMG staffers got off on a bad foot. FMG staffers, many of them from the former Gawker Media, repeatedly asked for specifics about the possibility of staff cuts that have been reported.
The back and forth happened during a regularly scheduled monthly meeting that editorial director Susie Banikarim holds with staff. Some gave Deen credit for coming to the meeting and taking questions, which went on for more than an hour, but whatever goodwill there was replaced by anxiety. Deen said Boston Consulting Group, which was hired to do a review, would be around another five or weeks, but then when pressed, backtracked and said he didn’t know, said those present.
The consulting group recommended cuts of as much as 35 percent at FMG, The Wall Street Journal reported. That would drastically reduce staff at a unit that one former exec with knowledge of the numbers said was a bright spot within Univision, making its first quarter sales goal. (A company spokesman said the figure was inaccurate.) At the staff meeting, Deen confirmed there would be cuts, but said no decisions had been made about where and how many.
“The anxiety is just ridiculous,” said someone close to the company.
“Sameer didn’t have any real answers for us — or didn’t want to share them,” said one person in attendance.
Part of the clash was cultural — Deen comes from Univision.com, which is dominated by lifestyle and entertainment content aimed at a Hispanic audience, and FMG, which Univision bought in 2016 to diversify its audience, is known for its passionate and irreverent news staffers. Deen told a story about Gawker co-founder Nick Denton and expressed his affection for Gawker, but faced a room that was skeptical that he understood what their brands were all about.
Another issue hanging over FMG is that Univision is integrating the group into the rest of the company. The company reportedly struggled to integrate the former Gawker properties back when they were acquired, resulting in benefits and administrative problems, and the bad memories haven’t entirely faded. It’s the story of a “legacy media company trying to get into digital media and fucking it up because they can’t help themselves,” a former employee said.
FMG spokesman David Ford said in a statement: “Gizmodo Media Group is a company built on open and honest dialogue — even when it isn’t comfortable. Sameer came to listen to the staff, to hear their concerns, and answer questions as best he could at this time. Our digital media brands are an important part of UCI’s evolution as a company and diversification strategy, and they will continue to be moving forward. Right now the company is focused on ensuring they are positioned to grow, adapt, and compete in a rapidly-changing media landscape.”
Deen agreed to come to the next labor-management meeting, confirmed the Writers Guild of America, which represents some of the editorial employees at FMG.
The post Fusion Media Group employees clash with new digital boss appeared first on Digiday.
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