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“The Sell Sider” is a column written for the sell side of the digital media community. Today’s column is written by David Kohl, president and CEO at TrustX. The industry has been doing the math wrong. For years media buyers have tolerated the waste everyone knew was part of cheap CPM media buys because, well,… Continue reading »

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Spotify was an early mover in programmatic audio, and it’s taking that momentum into 2018. “Marketers are moving so much money to programmatic. We’ve seen that channel explode,” said Brian Benedik, global head of ads monetization at Spotify. “We’ve seen brands [come to Spotify] that have never invested in audio because we’ve made it programmatic-enabled.”… Continue reading »

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. PE Strikes Again Private equity firm Diversis Capital has scooped up Marketron, a revenue and marketing software provider used mostly by television and radio stations. “We are excited to see Marketron’s commitment to growing new technologies as well as developing unique opportunities that are… Continue reading »

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There’s a short history of publishers fancying themselves as technology companies and building a business selling their tech to other publishers. Publishers realized that building a whole new side business around licensing their tech is a headache and that they needed to focus on what they’re good at, and leave the tech to others.

New York magazine is trying out a different approach. It built its own content management system (publishers like to give their homegrown CMSes cute names; this one is called Clay, for the magazine’s founder Clay Felker) in 2015 and then licensed the software to the online magazine Slate. Slate started using Clay a year ago and was set to fully migrate its site to Clay this week. But instead of New York charging Slate a licensing fee, Slate is paying New York in the form of code. The CMS is open-source, and developers from both titles contribute to it.

This works for New York because it doesn’t have to devote precious staff to support a client, said Daniel Hallac, the magazine’s chief product officer. Sharing code benefits both parties, too. Slate developed a plug-in so it can access Getty Images, and New York also plans to use the plug-in, for example.

For Slate, the open-source nature of the Clay CMS made sense because Slate has a development team that is comfortable operating without the outside support that a big tech company could supply, said Greg Lavallee, Slate’s director of technology.

He said he likes Clay because it turns all editorial elements such as taglines and pull quotes into their own building blocks, which makes it easier to meet the growing need to publish to distributed platforms like Facebook and Apple News. “It takes a firm stance on trying to componentize everything. It makes most of the distributed platforms much easier because all the platforms work that way,” he said.

Clay also doesn’t force its users to adopt every update; the publisher can pick and choose. And with Clay, Slate can control access to all its audience data.

It’s too early to say where New York magazine will take Clay, but it’s casually marketing it to others to see if there’s interest, especially small publishers that have some tech resources and want to build some tech on their own, but can’t afford to do everything in-house.

Slate and New York magazine have similarities, as independent, midsize publishers focused on politics and culture. Some publishers might be leery of sharing their technology with a competitor. Hallac sees the advantages outweighing any risk, adding that the two aren’t sharing things like editorial content, ad models and user experience, which he considers more important differentiators.

“By partnering with Slate, we’ve been able to increase the amount of people working on this because we’re pooling our resources,” he said. Plus, New York covers such a wide range of topics editorially, from food to fashion to politics, its potential competitive set is limitless.

“If we were to say we won’t talk to our competition, we wouldn’t be able to talk to anybody,” Hallac said. “But we’re also confident in our abilities. We’ll talk to anybody.”

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The Facebook algorithm change that has publishers panicking may be good news for a certain group inside the industry: influencers and their followers.

As Facebook decides to favor content from friends and family over posts from (certain) publishers, agency buyers are telling clients to focus more on influencer content.

“By prioritizing [user-generated content], Facebook is giving brands an opportunity to double down on influencers that maintain authentic relationships with their audiences,” said Corey Martin, who heads influencer marketing at 360i.

Martin said he takes Facebook’s explanation of the news-feed change at face value — that it wants to clean up a cluttered news feed and potentially cut down on fake news. Facebook is telling agencies they won’t see any major changes for paid promotion, although ad rates might increase.

But influencer marketing seems poised to benefit the most from the change: When done on its own, influencer content essentially mimics content from friends and family.

“I would tell clients to do more influencer content,” said Martin. “Facebook has more control over influencers and they have less control over media partners. I don’t think it’ll negatively impact buying ads within the Facebook environment.”

Marco Hansell, CEO at Speakr, said his company found that influencer content performs between five and 10 times better in terms of engagement when an influencer rather than a brand posts it. And if Facebook is already removing brands from the feed, it increases engagement among accounts with organic engagement.

“It’s now this awesome dynamic where brands show up less in the feed,” said Hansell, “and what’s showing up is content coming from public-figure pages, friends and family.”

The “handshakes” — how Facebook shows customers that content was created by influencers for brands — in this case wouldn’t punish the brands. Instead, brands might get some overflow likes from people clicking through to the brand page, too.

Boosting influencer content could be great for Facebook, which has long asked brands and agencies to create a paid strategy for influencer content. By doing that, it can get more ad dollars while getting credit for “cleaning up the feed.”

Noah Mallin, managing partner and head of experience, content and sponsorship at Wavemaker, said he expects Facebook to explore ways to make influencers a bigger part of the platform. While Facebook has plenty of influencer activity, it’s not as popular with influencers as Instagram or YouTube. But Mallin said that the same brand-safety issues that have impacted news also exist around influencers. “What are the safeguards around that?”

Organically speaking, influencers rank better than brands in the news feed, and deprioritizing news can be favorable for influencers. And the new algorithm is expected to mostly punish clickbait-style language, which means brands will need to make meaningful and “authentic” content, which creates room for more influencer partnerships.

In a note sent to its clients this week, agency RPA said as much: “With this new directive at the platform level of making Facebook a place for facilitating and rewarding meaningful social connections, brands who haven’t already made that a fundamental filter for their creative will absolutely need to do so — not only to appease the algorithms, but to ensure that they have a natural, authentic role in what could be the newly characterized Facebook experience.”

Justin Moore, founder at Trending Family, sees one potential glitch, though. Facebook last year pushed many influencers on both Facebook and Instagram to convert to “business” pages. (Most were previously categorized as “public figures.”) There wasn’t any access to full analytics on Instagram without being a business profile, and for larger influencers, brand campaigns required whitelisting and paid media access to an influencer handle. And under the new algorithm, business pages would be punished.

“At at first blush, it does not seem like good news,” said blogger Grace Atwood, who has a business profile.

The post ‘Awesome dynamic’: Influencer marketing gets a boost with Facebook changes appeared first on Digiday.

Amazon a week ago rolled out its cloud-based server-side bidding product that it delivers via Transparent Ad Marketplace, or TAM, to European countries including the U.K., Germany, France, Spain and Italy. So far, U.K. publishers haven’t rushed to jump on board.

Many major national publishers are eyeing TAM, but several said they aren’t convinced it’s worth their while, fearing they would leave themselves vulnerable to yet another tech platform with a different agenda than their own. Others have opted out due to unanswered questions about how agnostic Amazon will be with its demand.

“The verdict is still out,” said a publishing executive that is testing the service.

Several publishers said they found TAM quicker and simpler to implement than other header-bidding partners. But more important, site speed — the feature anticipated to be a differentiator for Amazon’s offering — has improved since implementation due to TAM’s ad call speeds. TAM’s default speed for ad calls is 200 milliseconds, according to sources.

The Telegraph and Trinity Mirror were among the early partners of TAM, both having pursued header bidding and server-side bidding strategies. Bauer Xcel Media, the U.S. offshoot of European women’s magazine publisher Bauer Media, recently revealed that its average page-load time across devices dropped from 12 seconds in January 2017 to between 4 and 5 seconds as a direct result of implementing TAM. Bauer’s U.K. team is now eager to implement TAM, hoping to see similar results.

Other publishers with advanced header-bidding strategies are keen to test the Amazon server-side product to see if it helps drive up revenues. They also want to understand more about the transparent auction mechanics the platform offers, such as publishers’ and SSPs’ access to auction-level reporting, to maximize rate for their inventory via TAM. Publisher reporting includes metrics such as earnings, eCPM, bid rate, win rate and timeout rate by SSP.

One publisher, which tested TAM ahead of its official rollout last week, said display revenue from TAM has been “encouraging,” increasing threefold over a two-month period. Given the implementation occurred in the last few months of 2017, the publisher will assess if those numbers are representative of the average revenue to be expected or skewed by seasonal shifts.

Others are waiting for Amazon to increase the number of demand partners it has integrated before jumping on board. All are interested to see if TAM can offer an alternative or even incremental value to Google’s header-bidding version, exchange bidding dynamic allocation, or EBDA.

“We use dynamic allocation but have no interest in testing EBDA. The mechanics around the Google auction are still too opaque when I compare them with others in the market, including Amazon,” said a publishing executive at a magazine group. “TAM is not quite the full package yet. That will come when Amazon allows publishers to sell PMPs to buyers using Amazon data and transact this via TAM, but as a first pass, the offering is a step in the right direction.”

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The post Amazon’s server-side bidding product gets off to slow start in UK appeared first on Digiday.

No longer the realm of outdated cosmetics companies, the peer-to-peer selling model is witnessing a renaissance in beauty.

Remade for a world of digitally savvy consumers, brands including Beautycounter, Ever Skin, Juara Skincare and Rodan & Fields are reliant on the model, while others, like Glossier, have built it into their direct-to-consumer playbook in recent years. Even Coty wants a piece of the pie: Last year, it paid $600 million for a 60 percent stake in Younique, a cosmetics company bent on social selling that reports over 80,000 reps.

The new crop of beauty brands that use the peer-to-peer selling tactic have given the business model new life since pioneering companies like Mary Kay and Avon have fallen off the map. Although both of the early adopters are still around today, they’ve struggled over the years to connect with modern shoppers. Avon’s seller community has continuously declined since 2012, and its stock market value is down to $1.3 billion, while Mary Kay has been riddled with bad press about its exploitative business model.

In their wake, newer brands have thrived, thanks to building up their selling communities on social media, tweaking their models to increase reach and emphasizing the results and ingredients-focused imagery that today’s customers crave.

The perfect timing
“Many of the older options hadn’t quite caught up to the times, but now it’s about leveraging different social platforms like Facebook and Instagram to make the model more digital and doable,” said Ani Hadjinian, general manager of Ever Skin, which is the beauty offshoot of Stella & Dot, the social-selling accessories brand launched by Jessica Herrin in 2003.

Herrin grew that brand to profitability; it’s generated more than $300 million in revenue, reportedly paying that same number in commissions to more than 50,000 stylists, who receive 35 percent of their sales. Three years ago, she saw an opportunity to do the same in beauty.

“There weren’t many modern players in the space,” said Hadjinian, adding that, on top of that, the rising popularity of the side-hustle made timing feel especially ripe.

“In this day and age, where you can choose to rely on things like Uber or Lyft for work, instead of committing to the 9-to-5, it can be such an incredible model for people — especially for women,” she said, hinting at their potential need for flexibility and their desire to continue working while raising families, a common theme among Ever Skin’s “specialists.”

Indeed, according to a study last year from the software company Intuit, the gig economy makes up about 34 percent of the U.S. workforce and is slated to reach 43 percent by 2020 — none of which would be possible, of course, without technology.

New opportunities in e-commerce
Ever Skin, for its part, gives its sellers — now numbered into the thousands — the option to sell not just at special in-person events, like its forebears, but online, as well. It sets up each seller with a personal e-commerce site and provides them with digital marketing guidance for promoting its products on Instagram and Facebook.

Beautycounter, Rodan & Fields and Younique follow the same dual model, although the latter is also bridging the two worlds by offering virtual selling parties.

Glossier’s rep program, which launched early last year, is similar in that sellers are given their own landing page on the Glossier website, complete with their favorite products and a video introduction — but, in keeping with the brand’s origins, it’s promoted as online-only. The company now reports around 500 sellers.

The model’s limitations
Not everyone was pleased with Glossier’s rep launch: In July, one representative told Racked that it felt the program might be negatively affecting Glossier’s cool girl image. “A lot of the girls are really off-brand,” she told the site. “They wear a shit-ton of makeup and I don’t even know how they use Glossier.”

Reddit threads filled with similar complaints followed.

“I think that came from the fact that it wasn’t integral to Glossier’s launch. They grew out of social media and then layered this in as a selling mechanism, which might be off-putting to someone who was so used to experiencing Glossier directly from the brand,” said Chelsea Gross, an associate director of client strategy at L2. Ultimately, though, the sales reps are just another form of influencer, she said.

The peer-to-peer sales model has been met with skepticism before, occasionally being likened to a pyramid scheme that may rip off its sellers. However, Joyce Lee, a beauty consultant and the former beauty buyer for Opening Ceremony, believes this is less of a problem today.

“Trust and transparency have more value in the beauty market than ever before,” she said.

As such, all of these newer entrants aim to be transparent about sales commissions on their websites, with most averaging between 20 to 35 percent. Some, like Beautycounter and Ever Skin, also market their products as safer than most, posting thorough ingredients directories and FAQs about how their products are made.

The social (media) effect
But the online community and its endorsements have had the greatest impact on the category, Lee said. Social platforms facilitate speedier connections, plus they allow these companies to drive home a message of authenticity.

“Yes, those who participate in these rep programs get paid to do so, but they are usually customers who love the products they’re promoting,” said Lee.

Gross agreed: “A lot of the case studies we bring to our clients focus on the power of social media that these companies, in particular, have doubled down on,” she said. “They use their consultants as home-grown influencers, whose content they then leverage for marketing purposes.”

Rodan & Fields, for example, often posts before-and-after imagery from its sellers to promote specific products. According to research by L2, in 2017, 1 percent of the brand’s social media posts were these images, but they drove 13 percent of its overall engagement. Ever Skin does the same on its website.

Casting a wider net
Rodan & Fields and Younique are now valued at $1 billion, they’re followed by Beautycounter, worth a reported $225 million, and Juara and Ever, estimated to be more in the low millions.

For these companies to continue to grow, they may need to look past the influence of their consultants.

Although previous iterations of the model relied solely on peer-to-peer sales to drive revenue, today’s brands are finding that to be a roadblock to success. “It creates a friction that consumers ultimately are not looking for, [as not everyone will have connections to a consultant],” said Gross.

As a result, they’re pushing their products direct-to-consumer from the start, as well. The one exception in the group, Rodan & Fields, finally began selling its products directly online in recent months, though only in packages that retail for upward of $200.

Acquiring these customers outside of the consultant-sphere is crucial because, as Hadjinian put it, it’s a form of insurance. “Not everybody wants to be a seller, but you always need customers,” she said.

The post Beauty brands are remaking the peer-to-peer sales model for a digital age appeared first on Digiday.

Axios made headlines when it announced, then delayed, its plans to launch a $10,000-a-year subscription product. Founder and CEO Jim VandeHei said the publisher, which is turning one year old, is still committed to it and that he expects to launch it by the end of the year. For now, the company is focused on rolling out a new unpaid network of 200 contributors, including China expert Bill Bishop and Israeli journalist Barak Ravid; and plans to get into video. We talked to VandeHei about the subscription plans, its video ambitions and how it limits its reliance on Facebook. The conversation has been condensed.

Where are you with those high-priced subscriptions you teased last year?
Because traffic is stronger and revenue is higher, we’d be insane not to keep our foot on the gas. My guess is by the end of this year, we’ll do that. I don’t think you can have a robust, scalable, durable media company that does not have a subscription dimension to it. Subscriptions are attractive if you can get it right. Consumer subscriptions are hard. I think people value information they can trust more today than they did even a year ago.

Why launch a contributor network?
As a news organization you can’t afford to have boots on the ground in all these countries. But all these people are vetted, and heavily edited. This is not at all like what HuffPost or Forbes did. It’s not about opinion. We’re not looking for scale. It’s about who can get the best possible information, distilled smartly.

What does Facebook’s news-feed change mean for publishers?
It’s hard to imagine we don’t see a decline in the amount of Facebook traffic to the vast majority of publishers. Even before the announcement, I would not want to be a publication making garbage for clicks. That run is now over.

It’s not written on a tablet anywhere that Facebook needs to do news at all. They’re a publicly traded company that allows people to communicate with each other. It’s possible they go back to their roots. Those roots might include a massive deprioritization. I know people are up in arms about it, but you should never build a business on someone else’s benevolence.

We’re not at all Facebook-dependent. Twenty percent of our traffic is direct; 20 percent is Google; we get a lot from Flipboard. We do well with Facebook. Some Reddit. Year one, we focused mainly on text. In year two, you’re going to see a big push into video as we take the smart brevity concept and apply it to video.

Is there an ideal platform for distributing the kind of video you plan to do?
I don’t know. I don’t get all screwed up about whether this will live on Roku or on Facebook. Where it lands is not much concern to us, particularly, as long as it has a ton of value.

How important is politics coverage to Axios?
Trump is a massive international story, and being able to own pieces of the Trump story has been hugely helpful for us as a brand. But more important, we’ve been able to be as dominant and influential in other sectors. People come for the Trump, but they stay for the media, or our technology or our science coverage.

How has the media in general covered the administration?
There’s been terrific investigative and accountability journalism done by mainstream media from day one. I’d say the negative is a forming Trump derangement syndrome across the media. The people with their thumbs on the scale are in hysterics when they talk about this presidency, or the Republican Party, when they appear on television. I worry this undermines the great journalism that’s being done.

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One unintended consequence of Facebook’s feed purge is that it may make publishers more vulnerable to ad fraud.

With Facebook favoring user content and deprioritizing publishers’ posts in its news feed, publishers will turn to traffic resellers to make up for the clicks they’re losing from Facebook, said independent ad fraud consultant Augustine Fou. The traffic brokers found through online forums and LinkedIn tend to specialize in low-cost traffic that’s of low quality, though. More than 90 percent of the sites that DoubleVerify flags for having high levels of fraud purchase clicks from traffic resellers.

An exec at a digital lifestyle publisher, speaking on the condition of anonymity, anticipated buying more traffic to make up what his site loses from organic visits. This publisher has people devoted to making money on paid Facebook traffic through arbitrage and has gotten the cost down to a few cents a click.

Publishers that don’t already focus on buying Facebook traffic won’t be able to afford those prices at scale, so they’ll likely turn to traffic sellers whose costs per click are under a cent.

Publishers that pay celebrities like George Takei and Lil Wayne to promote their content on Facebook are also likely to find themselves in a precarious situation. Facebook has told publishers that people will see less content from celebrities in their news feed. Facebook did not reply to an interview request for this story.

“Publishers that rely on celebrities will scramble and turn to lower-tier traffic markets,” the publisher exec said. “Those that don’t know how to do proper audience targeting [with paid Facebook traffic] will get crushed.”

Jonathan Mendez, board member of ad tech firm Yieldbot, said that when Facebook and Google change their algorithms to reduce organic traffic, a swath of publishers reacts by purchasing cheap clicks from traffic brokers. Getting industrywide data on this effect is difficult because publishers typically don’t publicly admit to buying traffic, even though the practice is common, and getting data from the traffic brokers requires sleuthing.

Facebook at least has real human users, which can’t be said of many traffic sellers. If publishers turn to traffic sellers as a shortcut to replace their declining referrals from Facebook, then they’ll likely end up with a high amount of fraud that drives down their CPMs, Mendez said.

Of course, publishers aren’t blameless in this scenario. Nobody forced publishers to become dependent on Facebook, just as nobody is going to force publishers to buy cheap clicks when Facebook rips the rug out from underneath them. But platform-dependent publishers that are already feeling strained are likely to look for a new source of cheap clicks, according to an ad fraud exec, speaking anonymously.

“If the publishers are running light on traffic, they will take steps to buy the traffic, and so they are contributing to fraud,” the ad fraud source said. “In their desperation, they may make the entire ecosystem worse.”

The post How Facebook’s feed purge could expose publishers to fraud appeared first on Digiday.

Ad tech is getting a linguistic makeover.

With vendors across the complicated ad supply chain using their own terminology (one platform will use the term “anonymized ID” while another uses “identifier” to describe the concept of identifying a user through a unique code), analysts at media-buying agencies are spending the majority of their workday formatting and relabeling data rather than analyzing it, said David Smith, CEO of ad agency Mediasmith.

Smith co-chaired an Interactive Advertising Bureau Tech Lab task force that’s pushing an OpenData spec to standardize the language that vendors, advertisers and publishers use in their campaign reports. The idea is that having everyone use the same terms and definitions will make it easier for advertisers, publishers and vendors to transfer and use large data sets. The IAB opened the spec last week for public comment.

Vendors use their own lingo to describe their data to stand out among the clustered Lumascape. This creates confusion, but the intention of tech firms’ marketing isn’t to create awkward acronyms — it’s to appear unique to prospective customers, said Jason Krebs, chief business officer of GIF engine Tenor. This is why vendors pushed their own nomenclature for years around the concept that we now call header bidding.

“Vendors started to compete on the basis of ‘my metrics are better than yours,’ and with each new tech update, they had new things they could measure or call by a different name,” said Altimeter analyst Omar Akhtar.

As the number of middlemen in the supply chain ballooned, ad buyers ended up getting reports that all use different terms to describe the same thing, leading advertisers to spend money on analysts to manually restructure data sets, said Bidtellect CTO Mike Conway, who sits on the IAB Tech Lab’s OpenData task force.

Unlike other tech sectors like finance, ad tech has little oversight. Groups like the IAB can create a Rosetta Stone for data labeling, but there is no fine for failure to use these standards since the industry is self-regulated. The IAB’s specs will gain adoption if ad buyers withhold their dollars from vendors that refuse to abide by them, Smith said.

The IAB’s spec is open to public comment through March, said Dennis Buchheim, gm of the IAB Tech Lab. The task force is only creating standards for data mentioned in campaign reports. Later in the year, it may do the same for audience segments and data used for billing purposes, he said.

The biggest barrier to getting people to pay more attention to how they label data is that this work is wonky and unsexy, Smith said. “People aren’t going to say, ‘Wow, you normalized field headers? Let’s give you an award for that one.’”

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