Author: rssmasher

Jeffrey Katzenberg is betting big on building a mobile video platform and business that others — from former Hulu CEO Jason Kilar to Verizon — haven’t been able to figure out.

Since last year, the former DreamWorks Animation CEO has been making the rounds in Hollywood and at big industry events to pitch an ambitious new project, the mobile video-focused holding company WndrCo. Among other things, WndrCo is building a global video platform for short- and mid-form content, which would be anchored by shows from some of the top Hollywood talent at production levels to rival HBO and Netflix.

On Jan. 24, the Beverly Hills-based WndrCo announced former HP CEO Meg Whitman as the CEO and first employee of what it’s referring to as its “New TV” venture, which doesn’t have an official name or product yet but will be a subscription-based app developed in-house by the company. Whitman will hire a team for New TV as the venture also raises funds to get the product off the ground, said sources with knowledge of the company’s plans. Whitman’s long track record in building and running major tech companies including eBay and HP will ideally complement Katzenberg’s background in content, these sources said.

It’s not clear how much Katzenberg and Whitman are looking to raise specifically for New TV, but in public comments that Katzenberg made last year, he said he was looking to raise $2 billion for all WndrCo. Since then, WndrCo has raised $595 million, and, more recently, Katzenberg has been telling industry executives that he’s now only looking to raise about $1 billion, according to Recode. Internally at WndrCo, the expectation is still that New TV will require several billions of dollars worth of investments over the coming few years, sources said.

There’s skepticism among entertainment and tech insiders about the feasibility of a premium video platform for short- and mid-form content. Others including Verizon’s Go90 and Kilar’s Vessel have tried it, only to fail.

Katzenberg’s pitch, according to multiple sources inside or who have recently met with WndrCo, is that previous attempts didn’t go far and big enough — to the point that he doesn’t even see New TV and previous mobile video platforms as worthy of comparison, sources said. Katzenberg’s pitch is that Go90, Facebook Watch and Vessel tried to create more polished versions of YouTube, where New TV is focused on building primetime TV-quality shows that are delivered in episodes that run for 10 minutes or less.

At the core of the New TV content strategy will be these tentpole shows, which are internally being called “Mini-Series,” sources said. A typical Mini-Series will have a total running time anywhere between 120 minutes and 240 minutes, but broken into 8- to 10-minute chapters for distribution on the New TV platform, according to WndrCo sources. New TV is targeting shows with budgets as high as $100,000 to $150,000 per minute, sources said. For comparison’s sake, a lot of the programming seen on Go90 and Facebook Watch these days costs roughly $20,000-per-minute or less. (In talking about his New TV ambitions at Cannes last year, Katzenberg cited how shows on HBO and Netflix had budgets in the range of $200,000 to $300,000 per minute.)

“The kind of resources that have existed in the two-hour format and the one-hour format, [Katzenberg and New TV want] to bring it to this new form of storytelling,” said a source with direct knowledge of WndrCo’s plans.

As WndrCo and New TV raise money, a significant portion of the funds will also be set aside for marketing these high-profile projects, an area which sources said Go90 and Verizon have been lacking.

Katzenberg’s track record ensures he will be able to raise a healthy amount of capital and generate interest among big media companies and A-list talent to develop shows for the platform. Recently, Katzenberg has been pitching a model similar to Hulu, in which media giants such as Disney, Fox and Viacom would invest in New TV while also providing original content for the platform, according to Recode.

There’s no doubt among industry insiders that Katzenberg, Whitman and company will be able to get big partners on board and that the content that ultimately shows up on New TV will be high-quality.

New TV hasn’t bought any projects yet but has about a dozen or so ideas it’s mulling over and has met well over 200 TV showrunners across both scripted and unscripted programming since last year, said a source. Last year, during Cannes, Katzenberg also said he’s met with big-name talents such as J.J. Abrams, Ron Howard and Jerry Bruckheimer.

Ultimately, the question is whether that’s enough to convince people to download and pay for a new app. People already can watch cheaper short- and mid-form shows on YouTube and Facebook, and they already have Netflix, Hulu, Amazon and HBO for long-form, expensive fare. Is there a market for the middle — a product that attempts to combine the two?

Ever the persuasive pitchman, Katzenberg is confident that he can convert even a percentage of people that have now grown accustomed to watching a ton of short-form videos every day, sources said. As the argument goes, if people are willing to pay Spotify for something they can easily get for free, a similar market can develop for short-form videos — if done right.

“I don’t know if there’s a market — everyone that has tried it has failed,” said a Hollywood agent. “You could argue that [Go90, Vessel and others] just didn’t spend enough money, and maybe that’s why it’s taking time for WndrCo and New TV to build up a fund because they’re going to need to raise a substantial amount.”

In the past year, the market for high-end, short-form video shows has dried up. Platforms such as Spotify and Comcast’s Watchable have either stopped funding original digital shows or ceased operations entirely. Go90 is rethinking its content strategy. Facebook bought a ton of short-form shows during its initial round for Watch, but it’s now, along with YouTube, leaning toward longer-form, TV-quality fare.

While the big-budget fare will be core to the New TV product, Katzenberg and co. are not ruling out lighter, episodic fare in areas such as music, news, lifestyle and entertainment to round out the mobile app, sources said. In this context, New TV could be the next big hope for digital video makers looking for a place to sell shows to — even if some digital producers have grown weary of companies trying to build a consumer platform for short- and mid-form video.

“I’ve just seen too many of these things with huge fanfare come and go,” said one veteran digital producer. “Katzenberg is a real one, but even so … It will just slip away into the night.”

“No one is baking into their financial plan just yet that they’re going to be getting money from a WndrCo deal in a way that they are right now with Facebook Watch,” added a media executive that’s sold shows to Facebook and has met with WndrCo. “But without knowing what it looks like just yet, having [Katzenberg] as a potential partner certainly makes me optimistic.”

WndrCo, meanwhile, has already signaled its interest in working with digital media creators by making some small investments in digital media companies including Clique Media Group, The Young Turks Network and Whistle Sports.

“It’s Jeffrey Katzenberg,” said an executive at a company that took an investment from WndrCo. “There are guys you just don’t bet against.”

For more on all things video, subscribe to Digiday’s new weekly video briefing, written by Sahil Patel.

The post Inside Jeffrey Katzenberg’s billion-dollar bet to crack the code on mobile video appeared first on Digiday.

Google is known for dominating search marketing, but Amazon is giving Google a run for the ad revenue thanks to the rapid growth of Amazon Marketing Services, Amazon’s search marketing platform.

Media buyers said the e-commerce conglomerate has improved AMS over the past six months. While many brands are still learning marketing on Amazon, they are already sold by the performance of its search ad products, and Amazon is also pushing advertisers to spend more on AMS, according to agency executives.

AMS offers three ad formats: Sponsored product ads that feature a “sponsored” label in search results, headline search ads that show up as the very first sponsored result beneath the search bar and product display ads that could appear in the right-hand rail on a category page or on a product detail page below the “Add to Cart” button. From October to December of last year, ad spend on sponsored product ads and headline search ads gained quarter-over-quarter increases of 64 percent and 75 percent, respectively, compared to 37 percent on Google Shopping, according to Merkle’s marketing report released on Jan. 25. The report is based on ad spend by over 100 brands in the U.S., and Merkle declined to provide the baseline number of those percentages.

“Amazon’s ad growth is stronger than Google’s because lots of ad formats on Amazon are fairly new to brands,” said Andy Taylor, associate director of research for Merkle. “But overall, ad investment on Google is much stronger than on Amazon.”

It may be normal for brands to advertise more through search marketing on Amazon during the holiday season, but five agency executives interviewed for this story said they saw an uptick in ad spend on AMS in general. A New York-based agency executive who prefers anonymity thinks it took a while for many brands to fully understand and trust Amazon, but after 2017, many have bought into the performance that Amazon delivers. “Brands are increasing their Amazon spend as a whole, rather than reallocating from other [ad] placements,” said this New York executive. “The ROAS [return on ad spend] [of AMS] is often higher than other search engines, due to how far down the funnel the searches are.”

Jacob Davis, vp and head of audience planning for iCrossing, also said most of his clients’ spend on Amazon is on search products, although his team continuously evaluates other ad opportunities on Amazon.

Sponsored product ads seem to be Amazon advertisers’ primary focus at the moment. This ad format accounted for 85 percent of all ad spend on AMS, followed by headline search ads (11 percent) and product display ads (4 percent), according to Merkle’s marketing report. Meanwhile, a Seattle-based executive said that on average, his clients spend 60 to 75 percent of their Amazon marketing budgets on sponsored product ads.

“With sponsored product ads, we can do keyword-based targeting and see the highest return,” said Danielle Waller, manager of SEM for Merkle. “There are more complexities going into headline search ads. For instance, you need to have high enough click-through-rate, otherwise Amazon will [stop running] your headline search ads. From an ad performance perspective, there’s no strict rule about sponsored product ads.”

James Thomson, partner of Amazon consultancy Buy Box Experts, agreed that sponsored product ads represent a majority of clients’ ad spend because they are straightforward and easy to set up. But another big reason why sponsored product ads have gotten so many ad dollars is because the format is also available to third-party vendors that usually don’t have access to headline search ads or product display ads.

“AMS requires a vendor account, so it is an ad platform for first-party vendors — third-party vendors can’t access AMS,” said Thomson. “But Amazon now offers vendors in the third-party marketplace a sponsored ad tool that is similar to sponsored product ads under AMS. Sponsored product ads for first-party and third-party look the same to shoppers, and they take the same ad space.”

Thomson also thinks sponsored product ads are near the bottom of the sales funnel, while headline search ads are used to improve brand awareness. Different from sponsored product ads that direct shoppers to a product detail page, headline search ads direct Amazon users to a merchant’s customized “store” page, where shoppers can see different products that the merchant is offering, according to Thomson. “You also need to be a big company to afford top-of-the-funnel advertising like headline search ads,” he said. “Some headline search ads cost $49 per click, compared to a few cents per click [of some sponsored product ads].”

No matter what ad format an advertiser plans to spend more on, ad investment in AMS will continue to grow. On one hand, Amazon is pushing media buyers to spend more on search by doing more follow-up than usual, as well as highlighting growth opportunities and optimization techniques to improve performance; on the other hand, agencies and clients themselves are driving the growth, according to Davis.

“As people are becoming more comfortable in the space and Amazon is making it easier for advertisers to spend, the results have improved, which leads to more investment,” he said.

Joe Migliozzi, lead for Mindshare’s commerce division Shop+ in North America, agreed that Amazon has been investing more resources into educating agencies and improving its advertising platform. “If we had the same search conversation a year ago, AMS was not this user friendly to media buyers,” said Migliozzi.

This year, Amazon seems like it’s planning to expand AMS to third-party vendors. On Jan. 25, the e-commerce giant’s in-house media agency, Amazon Media Group, sent Thomson a message that said: “Our charter this year is to focus on launching third-party brand [owner] sellers from search to display advertising — for a number of reasons.”

For more on everything Amazon, subscribe to our weekly Amazon Briefing email newsletter. 

The post Amazon is targeting Google search budgets appeared first on Digiday.

The Super Bowl is approaching, and as in years past, the cost for a single 30-second spot during the game is astronomical. This year, spots range from $5 million to $5.2 million, before production costs and agency fees. That price tag places a lot of pressure on one ad — although it’s worth noting that last year’s Super Bowl spots amassed millions of views on YouTube and Facebook after they aired during the game, according to iSpot.tv data.

Digiday explored what else digital marketers could buy with a Super Bowl ad budget of $5.2 million. (See our previous tallies here, here and here.)

32 years’ worth of mobile video ads
The average cost per thousand impressions for interactive mobile vertical video is $14, according to Jen Gavin, vp of brand and ad innovation at PadSquad. For $5.2 million, you can receive 357.1 million impressions. For the same amount of money, you could get 32 years — which amounts to 17.25 million minutes or 287,000 hours — of these ads.

33 social games
A game that lives on social media costs between $150,000 and $300,000, according to digital agency The1stMovement. With $5.2 million, you could create between 17 and 34 social games.

4 weeks of Snapchat lenses
Snapchat audience lenses cost a minimum of $175,000 a day, according to Elijah Harris, vp and group director of paid social at Society. For $5.2 million, you could buy around 29 Snapchat lenses, more than four weeks’ worth. For Snapchat Discover video ads, the average cost per thousand impressions is between $8 and $12, according to ad buyers. For $5.2 million, you could do 433 million to 650 million impressions.

Reach 2 million more people on Facebook
With a budget of $5.2 million on Facebook, you’d be able to reach 113 million people and generate 450 million impressions over a weeklong campaign, meaning every Facebook user reached would see the ad four times. This campaign would reach 2 million more people than the 111.3 million Nielsen found watched the Super Bowl in 2017.

2.6 billion Instagram impressions
Instagram video ads’ cost per thousand impressions ranges from $2 to $3, according to ad buyers. With a budget of $5.2 million, you could get around 2.6 million impressions. And at 2 cents per view, you could get 260 million video views.

2.6 billion paid search clicks on Amazon
With the Super Bowl, there’s always the chance that a viewer will miss seeing your ad if they take a moment to dive into the chips and guacamole. At least with search ads, you know people are actively searching for your brand. The cost-per-click rate for search ads on Amazon is roughly $2, according to ad buyers, so with $5.2 million, you could get 2.6 billion clicks.

1.85 billion display ad impressions
The average cost per thousand impressions of display ads is $2.80, according to email marketing company MonetizePros. A budget of $5.2 million can get you 1.8 billion display ad impressions.

8 posts from Selena Gomez
An influencer that has around 100,000 followers would usually charge around $3,000 a post on Instagram, according to Richard Wong, vp of marketing and creator relations at influencer agency #Paid. A budget of $5.2 million gets you 1,733 posts with an influencer of this stature, meaning you would have a potential reach of 173.3 million people, 62 million more than tuned into the Super Bowl last year. Influencers with larger followings, like Selena Gomez, who has 133 million followers on Instagram alone, charges $600,000 to post for a brand on the platform, according to Wong. Even at this rate, with $5.2 million, you would be able to purchase eight posts from Gomez with extra money to spare.

The post What a $5.2 million Super Bowl ad can buy in digital media appeared first on Digiday.

When Ralph Lauren CEO Patrice Louvet announced that Alice Delahunt, formerly Burberry’s director of digital marketing, had been hired as the brand’s first chief digital officer, the underlying message was clear.

Finally, the American luxury brand was getting serious about enacting change.

“We are moving urgently to expand our digital presence all over the world,” said Louvet in the announcement. “We have to meet consumers where they are, which is increasingly online, and digital expansion is one critical way we will drive new growth for our business and brand.”

If Ralph Lauren were a different company, this title and the timing of a first hire would be incredibly retrograde. But in luxury fashion, the chief digital officer still has a purpose. It’s the person who can be brought in to buckle down and mature the brand’s digital efforts, and help right ship. At the same time, they signal both internally and externally that real time, energy and money is being invested in digital advancements, and progress is on the horizon.

“This would feel like an irrelevant role but for one caveat: It’s luxury. It’s desperately behind. Having a change agent who can come in with gravitas for a brand that needs it is a positive,” said Chris Paradysz, the founder of digital agency PMX. “If you have access to the CEO, it can be a successful role for a duration of time.”

Delahunt will be reporting to Louvet, whose enthusiasm for the new role is meant to inspire confidence. For Delahunt, there’s a lot of work to be done. During the company’s most recent call with investors, Louvet laid out the work Ralph Lauren was doing to get up to speed in digital across all fronts: increase digital wholesale and direct retail sales, increase digital marketing spend, drive e-commerce platform management, and improve its presence on social platforms like Facebook, WeChat, Youku and Instagram.

But even in a digitally stunted industry like luxury, the role of the chief digital officer has a seemingly unavoidable expiration date.

The Frankenstein role
In a November study, technology research firm Gartner predicted that across all industries, hiring for the CDO position will peak in 2019 and, by 2025, phase out entirely. The study estimated that 15 percent of large enterprises have a CDO.

“Companies struggle with digital transformation because the scope of change is massive and often very disruptive,” said study lead and Gartner analyst Mark Raskino. “However, CEOs are under pressure from boards and external stakeholders to drive the digital future.”

He said that the typical tenure of a chief digital officer is two years, and that the chief information officer ends up absorbing the duties of the chief digital officer as departments get up to speed and adapt to new practices enacted by the CDO.

“What’s counterintuitive about a chief digital officer is that digital sits inside of every department. It needs to, and over time, every company should strive for that,” said Ananda Chakravarty, senior analyst at research firm Forrester. “It’s typically a Frankenstein role. These companies have many legacy solutions they need to modernize and bring up to speed. Then they also want to bring together innovation, agility and new projects, and this is all lumped under one key individual to coordinate.”

At Ralph Lauren, Delahunt was described in broad terms as being responsible for elevating the company’s digital platforms globally and enhancing the digital experience for customers to drive loyalty and revenue. With her appointment, the company announced a few more digital hires: It appointed three new svps of e-commerce for Ralph Lauren North America, Club Monaco and Ralph Lauren International. While Delahunt reports to the CEO, the company wouldn’t confirm who reports to her.

Overall, chief digital officers tend to have a laundry list of duties that cobble together different departments and initiatives. At Kering, chief client and digital officer Grégory Boutté oversees transformation of e-commerce, CRM and data management. LVMH chief digital officer Ian Rogers was hired to launch the company’s e-commerce retail site and, in June, hired a direct report to handle digital communication. Xcel Brands CEO Robert D’Loren, who oversees a portfolio of premium labels like Isaac Mizrahi and Houston, said that right now, CDO Kate Twist doesn’t have her own team, but has several groups of indirect reports in the merchandising, e-commerce and marketing departments. Twist is overseeing e-commerce management, manufacturing technology, design technology like 3D sampling and algorithm-based design, new innovations in AI, and digital marketing.

“At the moment, her function is new and she’s leveraging several different teams,” said D’Loren. “We need one person who can oversee this technology, manage the results and make sure that every department is talking to each other. We don’t do things for symbolic reasons in our company. You either affect change or you don’t, and this is a very real initiative for me. Change management is the hardest thing for a business to do.”

The disappearing digital officer
At luxury skin-care brand Shiseido, which is the oldest Japanese beauty brand, CDO Alessio Rossi was brought on in January 2016 with a clear mission: Bring the company’s digital capabilities to the next level. Then, move on.

“The whole point [of the CDO] is to find opportunities for the industry to evolve, without taking a departure from the brand’s original codes and values,” said Rossi. “CDOs are temporary. We may not exist in a few years and we never existed in ‘digitally native’ companies. We are here to inject a new way of working, one that is about ongoing experimentation, trial and error, fail forward, push forward. It is a knowledge transfer, essentially. Once that’s done, our task is over. We can be successful in this job if we are out as fast as possible.”

Two years in, Rossi could be closing in on his time at Shiseido. During his stint at the company, he said his mission was to bring all of Shiseido’s global teams to 100 percent digital proficiency. That resulted in an internal Digital Academy that exists in six regions, and basically acts as a course study in digital marketing, e-commerce, CRM, manufacturing and supply chain.

Ralph Lauren and Xcel Brands have said that the CDO position is not seen as temporary within their organizations. D’Loren said the chief digital officer at the company will eventually have a team that could include a data scientist, a dedicated merchant and a coder.

“I see it as a role that will not only not disappear, but have increasing importance,” he said. “Any company that isn’t thinking this way isn’t thinking forward.”

Regardless, the position will no doubt be forced to evolve: Chakravarty predicts that most will be combined into a chief information officer role or transitioned to a chief data officer title. The problem with the tenacity of a CDO is that it’s meant to impact internal change, whereas the brand’s efforts and resources will eventually have to face outward, to the customer.

“Quick winds of progress bring excitement to the brand when it’s using a digital-first approach, but for me, real lasting progress starts with understanding your customer profoundly,” said Paradysz. “Not the brand, but the customer.”

The post Why luxury brands still hire chief digital officers appeared first on Digiday.

CEOs at consumer goods companies are feeling the heat from investors to deliver top-line growth, forcing them to treat marketing as a value driver rather than a cost.

Investors used to hail digital expenditure of CPG companies as an important metric for growth, said Alan Erskine, managing director at Credit Suisse, at an Advertising Association event in London on Jan. 25. But that stance has shifted amid concerns over digital ad effectiveness, the Facebook-Google duopoly and transparency, as growth in the CPG category remains elusive.

Investors are now asking whether the sector’s “cost-cutting scalpel has been cutting into muscle rather than fat,” he said. Perhaps sensitive to this, CEOs have upped pressure on senior marketers to justify their investments, as many companies in the sector abandoned their margin targets in the second half of 2017, in favor of greater investment behind top-line growth, Erskine added.

Procter & Gamble summed up the shift in its latest update to financial analysts on Jan. 23. Whereas previous updates highlighted the company’s marketing efficiency savings to the bottom line, chief financial officer Jon Moeller drew analysts’ attention to investment increases in the latest update. P&G increased ad spend by 2 percent in its last quarter, said Moeller, and further rises are planned.

The world’s largest advertiser is spending more on advertising that drives its business goals ahead of the arrival of growth-focused activist investor Nelson Peltz to its board in March.

Peltz’s influence, according to some analysts, is already being felt at P&G after it revealed it will continue to cut agency and advertising investments, even after a year of cutbacks to media and production budgets. It will reduce the 2,500 agencies by an additional 50 percent this year, the latest in a culling that dates back to 2014, when it had 6,000 agencies. The advertiser will also automate more of its media planning and take more media buying in-house. Creative talent is something P&G is prepared to pay for, said Moeller, but under “fixed and flow” arrangements that let its marketers increase and decrease spend based on performance-based models.

The need to position marketing as a growth driver to investors was also outlined in Diageo’s quarterly financial update on Jan. 25. The alcohol maker saw a 1.7 percent increase in sales on a marketing budget of £968 million ($1.4 billion) in the first half of its 2018 financial year, up from the £908 million ($1.3 billion) a year prior. CEO Ivan Menezes attributed the sales growth to Diageo’s increased spend on effective media and described the software it now uses to unearth those efficiencies. Diageo is “looking to get our pounds to work harder by driving improved effectiveness enabled by the rollout of our marketing Catalyst tool,” said Menezes.

Nearly all of Diageo’s 1,200 marketers across its global business use the Catalyst tool, which launched in 2015, to establish the right budget for each brand based on potential profit and the performance of previous marketing activities, while also determining the impact of planned campaigns. In India, for example, marketers used Catalyst for its Royal Challenge and McDowell’s No. 1 brands during the first part of its financial year and gained “well over” £1.5 million ($2.1 million) of value compared to the original plan, said Menezes.

Like P&G’s Moeller, Menezes operates in a CPG market where the investor narrative around businesses is starting to change.

The markets have shaken off the effects of “monetary uneasiness” of recent years, said economist Vicky Pryce at the same Advertising Association event. Despite the aftershocks of Brexit negotiations across Europe, a slowing U.S. economy and the death of manufacturing in China, the global economy held up in the latter half of 2017, as reflected by the International Monetary Fund’s latest predictions. The global economy is expected to grow at a rate of 3.9 percent this year, faster than the 3.7 percent in 2017, fueled by emerging markets and developing economies, according to the IMF. “After a period where it wasn’t happening, we now have synchronized growth in world trade,” Pryce added.

The world’s economic prospects were reflected in recent forecasts for global ad spend. Global ad spend will rise 3.1 percent in 2018, up from 3.1 percent in 2017, according to the latest estimates from Dentsu Aegis Network.

The difference between being asked to drive growth and shave costs to CPG advertisers is in what happens to that money. Previously, that money would have fallen into a company’s profit line, whereas now, there’s more impetus to spend it on better-performing ads.

As media trading becomes more transparent and therefore more accountable, the commercial model will favor better-quality inventory, which comes at a high cost. Some advertisers like L’Oréal and Barclays have already told agencies they’re willing to pay more for quality inventory to avoid poor viewability, risk of ad fraud and the potential to appear in unsafe environments. The prevailing wisdom appears to be this: Cuts to advertising costs aren’t over at CPG companies, but most want to spend more on what’s working. Now that a cleanup of the media supply chain is underway, those advertisers are changing what ads they buy rather than spending less on them.

The post Consumer goods brands are looking more at performance-based ads appeared first on Digiday.

Like with any overhyped topic, the buzz around blockchain and cryptocurrencies is blurring the lines between fact and fiction.

Ongoing problems like bot fraud, ad misplacement scandals and the long-criticized opacity of the programmatic ad trading ecosystem have led businesses to latch on desperately to blockchain as the potential cure that can fix what many have described as a broken advertising model.

But a lot of the noise around how the technology can be applied to advertising and media is just that: noise. Here’s a look at myths about blockchain’s use within advertising.

Myth: It’s the panacea for fixing ad fraud
Using blockchain to fix the issues of ad fraud and transparency sounds great in theory, but it’s probably too good to be true. For starters, blockchain works in a decentralized format, where networks around the world verify transactions. Given the speed at which ad transactions occur (hundreds of thousands per second), blockchain can’t yet validate transactions fast enough, creating latency problems. To counter this, some ad tech vendors are aggregating ad transactions into one block to create a single transaction. “That means the data is aggregated, so the transparency is already under question there,” said Elena Yegorova, CTO at ad tech firm London Media Exchange.

Another barrier: Everyone in the value chain needs to apply blockchain software to achieve full transparency in digital ad transactions. Otherwise, it will only be a “snapshot” of transparency, Yegorova added. Because it’s costly to implement, many industry observers believe it’s unlikely that every business will adopt it. “You’re looking at a minimum of hundreds of thousands [of pounds] for implementation, plus ongoing costs,” she said.

Myth: Blockchain is bitcoin
Blockchain is not the same as bitcoin, but the noise around both is causing confusion. Some believe the mania around cryptocurrencies is having a negative impact on blockchain’s future. “There is ignorance about the differences between bitcoin and blockchain, and because there is this bubble of cryptocurrencies raising billions in ICOs [initial coin offerings] and the fact a lot of those ICOs were not legitimate businesses, that sets a question mark around the whole piece, which is unwarranted and not right,” said Mary Keane-Dawson, CEO of media agency Truth, which uses blockchain technology. There’s a fair amount of posturing around blockchain, with people claiming they understand it when they don’t, according to Keane-Dawson.

One of the main points of confusion is the difference between the type of token needed for blockchain and the kind needed for cryptocurrencies. “You do need a token to run blockchain, but it can be a utility like a bit of programming that activates an event in the ad tech value chain, rather than a coin,” said Keane-Dawson. “If you want to have a coin that is traceable, then inevitably you’re going to have volatility. And in the media and advertising space, we couldn’t do that, as it would lead to clients and customers not really understanding what their token is worth today.”

Myth: It’s a chance to make a quick buck
Dogged by issues like hidden tech fees, arbitrage and bot fraud, programmatic ad trading hasn’t earned the best reputation this year. That’s why so many people are jumping on the blockchain bandwagon to paint themselves as companies trying to solve the crisis, not add to it. But it’ll be relatively easy to separate the genuine attempts from the opportunists. “If you announce blockchain, it must be certified and audited, so it is difficult to fake it,” Yegorova said. Expect a bunch of companies that have loudly touted their plans to build blockchain businesses quietly fade away once they realize what it will take, and how much it will cost, to build one.

Myth: Blockchain’s most useful application within advertising is cracking fraud
Those that don’t think blockchain will fix ad fraud and transparency issues believe better uses exist for the technology: to help publishers, ad tech vendors and marketers keep on top of consumer consent once the General Data Protection Regulation, and potentially the ePrivacy Regulation, are enforced. That would also potentially give independent ad tech vendors a fighting chance against the likes of data-rich companies like Google, Facebook and Amazon when it comes to competing in a post-GDPR world, according to Ciaran O’Kane, CEO of ExchangeWire. “Blockchain really could be transformational in advertising, just not for inventory transparency purposes but for data use and privacy,” he said.

The post Debunking common blockchain-saving-advertising myths appeared first on Digiday.

Bloomberg Media wants to build stronger bonds with its audience across devices in 2018, so it’s hired its first digital head of product in Julia Beizer, formerly of The Washington Post and HuffPost.

Beizer, whose appointment is set to be announced Jan. 29, will oversee a wide range of products, including Bloomberg’s desktop and mobile site, growing suite of OTT apps and video products like TicToc, which now has 750,000 daily viewers. She will also work to get Bloomberg Digital’s various departments, including licensing and distribution, working together more efficiently.

“This is an efficiency play and a best practices play,” said M. Scott Havens, Bloomberg’s global head of digital.

At its core, Beizer’s job will be to grow Bloomberg’s audience and get people to read and watch more of its content. To that end, a key focus of hers will be to personalize the experience people have on and across Bloomberg’s sites and apps.

Some of that work has already started. In October, Bloomberg began pushing its sites’ and apps’ most engaged visitors to register, if they hadn’t already, and provide information about their interests to make their future visits more personalized.

Bloomberg launched a personalized section of its Apple TV app, called “For You,” the contents of which were tailored according to each user’s consumption of content. That effort helped lift consumption: Last month, viewers that watched videos in the “For You” section consumed almost 11 videos per session on average, 29 percent more than those that didn’t.

For now, that personalization is only available on Apple TV, one of eight OTT video platforms Bloomberg’s video is available on. “Right now, you’ll find us in a lot of places because we don’t want to miss a chance to connect with our consumers,” said Havens, adding that he expects to see OTT platform consolidation in the next year to 18 months.

Whether the number of platforms decreases or not, delivering more experiences like that will be a key priority of Beizer’s. In her estimation, publishers have yet to fully harness the potential of personalization. “There’s real user service there that doesn’t run into the risk of filter bubbles, that I don’t think we as an industry are nailing yet,” Beizer said.

The hope is that the push for more personalization ultimately will translate to ad revenue. Bloomberg Media, to which Bloomberg Digital belongs, grew digital advertising 26 percent in 2017, due in part to an expansion of its display business; digital revenue now accounts for more than 50 percent of Bloomberg’s advertising revenue. Bloomberg’s global digital audience also grew 26 percent, helped by the use of platforms including Twitter and Asia-focused Line.

The post Bloomberg Digital hires Julia Beizer as its first head of product appeared first on Digiday.

In the rush to diversify revenue streams, plenty of publishers have dropped e-commerce widgets onto their sites to drive incremental revenue. For its e-commerce push, special-interest publisher Future has overhauled its content strategy and redesigned its content platform. As a result, e-commerce revenue overtook display ad revenue on Future’s T3 tech brand for the first time last November.

Last September, T3 redesigned and restructured its site, honing its content to make e-commerce, rather than display ads, the dominant revenue model.

As a result of the changes, e-commerce revenue jumped 120 percent last December compared to the same time the previous year, according to the publisher. Now, 10 percent of the people who visit T3 make a purchase. Traffic to the site has also increased by 12 percent year over year, thanks to the changes in platform and content.

“The thesis was how do we build a site that facilitates transactions,” said Zack Sullivan, operations and marketing director at Future. “If you want to be serious about e-commerce, you need a different business model. You need different relationships with retailers; they need to tell you what is important. The KPIs, the planning, the audience research, almost everything needs to be overhauled.”

As well as creating more articles, T3 tweaked the content strategy to go broader and deeper with coverage, rather than producing multiple variations on lists and buyers’ guides. T3 focuses on gadgets and tech, but it’s moving more into men’s lifestyle and grooming, with an eye on expanding content into fashion and travel, driving bigger-ticket items for the brand. Instead of an article on the top 10 best TVs, for instance, T3’s editorial team of four people uses social and search data to write longer pieces around trending topics, such as the most interesting new technology in TVs, watching sports in style or how to perfect the best home movie night.

The team experimented with writing a higher volume of shorter, quick-hit pieces, but quickly realized that having commercial features like e-commerce widgets and display ads required more room on the page. Instead, the team settled on fewer, longer pieces that could hold more ad units.

Each article published on T3 has an e-commerce element. The publisher has an e-commerce “widget bible” outlining the different e-commerce integrations the new site allows, including buy buttons in different placements on the page. Sullivan and his team are working on understanding which placements drive the highest conversion-to-purchase rates. During busy shopping periods like Black Friday and December, buyers’ guides convert more, as people are making either-or decisions. During other periods, more specific-interest pieces perform better.

Future is no stranger to e-commerce business models: The publisher has some 50 brands across music, gaming and photography, and it has invested in its own e-commerce platform, Hawk, which it can easily customize to suit its needs. In the first half of 2017, Future generated £6 million ($8.5 million) in e-commerce revenue, accounting for 15 percent of its total revenue, according to its financial review.

So far, e-commerce revenue hasn’t cannibalized display ad revenue, to Sullivan’s surprise. Although e-commerce revenue overtook display ad revenue in November, they were equal in December, due to higher viewability and ad demand.

Building the new e-commerce platform increased the number of native e-commerce units, while cutting several display ad units and replacing them with different formats like lazy-load ads, which load only when in view and speed up page performance. This increased viewability from 65 percent to above 80 percent, according to the publisher.

December always leads to a spike in bid activity on the open auction, as retailers with large budgets looking for tech enthusiasts funnel more ad spend into programmatic exchanges and are willing to pay a premium, added Sullivan. On some of T3’s ad units, the eCPM increased by 80 percent because of the increase in demand and viewability.

“There’s this existential angst in the industry that if you increase viewability and decrease the number of units, can you still increase yield?” said Sullivan. “But there are still gains to be made.”

Despite the unexpected growth in display revenue, future growth for T3 will come from e-commerce revenue, due to limits on how much more viewability can improve and how much more ad demand can grow.

“We’re not a shop that does content; we’re a content site that facilitates shopping,” he said. “The new site gives a much more effective retail experience, without being crushed with commercial units.”

The post Future tech site T3’s e-commerce revenue exceeds its display revenue appeared first on Digiday.

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