Author: rssmasher

Digiday Research surveys executive-level decision-makers who are in the know about critical issues facing the digital media industry. Here are some of our favorite insights from the past year. Check out Digiday+ for the latest research, exclusive content and member events.

Only 14 percent of agency execs believe brands are responsible for ad misplacement
Consumers are quick to judge, tweeting their displeasure the instant they find something they disagree with. But consumers have little to no idea how advertising works, believing, for instance, that every brand’s advertisement on Breitbart is a ringing endorsement of the so-called alt-right. Brands, however, often have little knowledge of or influence over where their ads end up. In this Digiday report, only 14 percent of agency executives believed the brand is responsible for the location of their ad placements. Instead of brands, agency respondents thought that either the brand’s agency (41 percent) or the tech vendor placing the ad (40 percent) should take the fall for inappropriate placement of ads.

90 percent of media execs think Amazon can threaten the duopoly
The Facebook-Google duopoly remains strong, but the days of the duopoly earning 99 percent of all new digital ad spending could be short-lived. With an ad business that now surpasses $1 billion, nine out of 10 media execs think Amazon has the potential to shift the power in the digital advertising world. Amazon has worked tirelessly to invest in the ad tech infrastructure to compete on a global stage. Amazon’s server-to-server wrapper is the most popular, and its header bidding solution is No. 3 among the Header Bidding Index Top 100 sites. Amazon also launched an application programming interface for Amazon Marketing Services, which will provide better data tools for its more nascent ad services.

72 percent of brands conduct most of their marketing in-house
2017 has been a trying year for agencies. Organic growth was virtually nonexistent for major agency groups Publicis and Omnicom. Consumer packaged goods companies slashing their marketing spend hurt WPP. Brands are finding that sometimes it’s easier and often faster to go it alone, with 72 percent of brands conducting over 50 percent of their marketing efforts in-house. As one anonymous executive put it: “Agencies and vendors are battling against each other, and I don’t know whose fault it is. I just want to get the work done. For instance, when we integrated a new tool recently, our agencies said that our vendors’ coding was wrong, while our vendors said that our agencies made the mistake. It took ages for us to finish the integration.”

Almost half of all publishers are deploying chatbots
The growth of artificial intelligence and machine learning has spurred publishers and marketers to create chatbots. The vast majority of them — 88 percent — work within Facebook Messenger, where their primary function is to provide information services and customer support. Digiday’s research found that publishers and marketers alike are eager for chatbots to help them interact with consumers at scale, but they acknowledge chatbots’ limitations. Chatbots aren’t technically sophisticated enough to resolve the bulk of customer interactions, with 91 percent of marketers saying chatbots conduct less than 20 percent of consumer interactions and pass the conversations off to human support when things go off-script.

51 percent of marketers think private marketplaces’ biggest issue is lack of inventory
Private marketplaces appeal to publishers fatigued by ad fraud and nontransparent exchanges because they allow publishers to create special pools of premium inventory for select advertisers to buy from. Publishers can oversee the bidding process for their inventory and are less likely to be affected by ad fraud. Marketers are happy to play along because it secures brand-safe environments for their ad placements. Unfortunately, PMPs are difficult to scale because they’re cobbled together on a publisher-by-publisher basis. More than half of the respondents to Digiday’s survey said their biggest complaint with PMPs is insufficient inventory, with just 16 percent of respondents saying they purchased more than 40 percent of their inventory from PMPs. After brands apply their targeting data to the pool of data and impressions publishers make available, they often find just a handful of users worth advertising to.

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San Francisco startup The Hustle started out as a newsletter built to promote Hustle Con, a free event for startup founders and young people on the make. In the year ahead, it plans try to turn itself into a service-oriented media brand, not just with more ticketed events but a software and product recommendation service.

“We get classified as a media company a lot, but I don’t know if that’s entirely accurate,” Hustle co-founder Sam Parr said. “I think we’re a membership company.” 

The fuel for The Hustle’s growing ambitions is its newsletter, which now has more than 500,000 subscribers, up from 100,000 subscribers 18 months ago, and an open rate north of 40 percent, nearly twice the 22 percent benchmark for a media or publisher’s newsletter, according to MailChimp.

Thirty percent of The Hustle’s newsletter subscriber base comes from a referral program like theSkimm’s. Initially, readers who referred contacts to The Hustle got swag like T-shirts. Today, if they refer 10 people, they can become one of the 3,000 Hustle Ambassadors, which gets them access to a private Facebook group for other ambassadors and The Hustle’s seed investors, who include author Tim Ferriss and Bleacher Report co-founder Dave Nemetz.

Those ambassadors, along with The Hustle’s most engaged readers, have inspired some of its new ventures. For example, the company noticed that people in the Facebook group regularly talked about which products or services were best for a specific task or job at work.

Based on that, Parr is building a product-recommendation service for business software that’s slated to launch in early 2018.

Audience feedback has also informed The Hustle’s events business. The site’s female audience responded positively to seeing other women as presenters at Pizza & 40s, an initially male-dominated lunch-and-learn event, so The Hustle — whose audience is now 40 percent female, according to Parr — launched a new event series, 2X, centered around female founders and executives telling their stories in a TED-esque 10-minute format. Two installments, held in San Francisco and Los Angeles, sold over 1,400 tickets that cost between $15 and $35, a big enough success that The Hustle plans to expand the series to 10 cities in 2018, including Chicago, New York and Austin, Texas. Until now, The Hustle has only staged one event outside California.

While growth and brand-building will remain important for The Hustle next year, Parr said his top priority will be ensuring The Hustle’s readers stay engaged with the newsletter. The newsletter is designed to be self-contained, so it regularly surveys readers to get their feedback. The Hustle also taps into Facebook audience data and third-party data sources to gather demographic data that newsletters do not readily offer up to publishers.

“There’s been a re-emergence of email,” said Jed Williams, the chief innovation officer of Local Media Association. “As you look at newsletters, the most important thing is how engaged that list is.”

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San Francisco startup The Hustle started out as a newsletter built to promote Hustle Con, a free event for startup founders and young people on the make. In the year ahead, it plans try to turn itself into a service-oriented media brand, not just with more ticketed events but a software and product recommendation service.

“We get classified as a media company a lot, but I don’t know if that’s entirely accurate,” Hustle co-founder Sam Parr said. “I think we’re a membership company.” 

The fuel for The Hustle’s growing ambitions is its newsletter, which now has more than 500,000 subscribers, up from 100,000 subscribers 18 months ago, and an open rate north of 40 percent, nearly twice the 22 percent benchmark for a media or publisher’s newsletter, according to MailChimp.

Thirty percent of The Hustle’s newsletter subscriber base comes from a referral program like theSkimm’s. Initially, readers who referred contacts to The Hustle got swag like T-shirts. Today, if they refer 10 people, they can become one of the 3,000 Hustle Ambassadors, which gets them access to a private Facebook group for other ambassadors and The Hustle’s seed investors, who include author Tim Ferriss and Bleacher Report co-founder Dave Nemetz.

Those ambassadors, along with The Hustle’s most engaged readers, have inspired some of its new ventures. For example, the company noticed that people in the Facebook group regularly talked about which products or services were best for a specific task or job at work.

Based on that, Parr is building a product-recommendation service for business software that’s slated to launch in early 2018.

Audience feedback has also informed The Hustle’s events business. The site’s female audience responded positively to seeing other women as presenters at Pizza & 40s, an initially male-dominated lunch-and-learn event, so The Hustle — whose audience is now 40 percent female, according to Parr — launched a new event series, 2X, centered around female founders and executives telling their stories in a TED-esque 10-minute format. Two installments, held in San Francisco and Los Angeles, sold over 1,400 tickets that cost between $15 and $35, a big enough success that The Hustle plans to expand the series to 10 cities in 2018, including Chicago, New York and Austin, Texas. Until now, The Hustle has only staged one event outside California.

While growth and brand-building will remain important for The Hustle next year, Parr said his top priority will be ensuring The Hustle’s readers stay engaged with the newsletter. The newsletter is designed to be self-contained, so it regularly surveys readers to get their feedback. The Hustle also taps into Facebook audience data and third-party data sources to gather demographic data that newsletters do not readily offer up to publishers.

“There’s been a re-emergence of email,” said Jed Williams, the chief innovation officer of Local Media Association. “As you look at newsletters, the most important thing is how engaged that list is.”

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Papa John’s founder and chief executive officer John Schnatter announced that he will step down from his role in January 2018.

The news comes two months after openly criticizing NFL players for protests against police brutality during the national anthem. The pizza chain, an NFL sponsor and advertiser, had seen its quarterly revenues fall since the football season started, with “significant decline” in TV ratings being blamed for the losses. 

According to the Associated Press (AP), Schnatter’s post as chairman (he is also the largest shareholder of the chain) remains intact. Steve Ritchie, the brand’s chief operating officer, will replace Schnatter in the top role. Ritchie said there is no word on whether Schnatter will remain the brand’s spokesperson.

Papa John’s recently underwent a creative review that saw the likes of Grey, BBDO New York, and Laundry Service competing for the business. Chief marketing officer Brandon Rhoten announced the winner of the pitch, Laundry Service via Twitter:

Excited to announce we have chosen @247LS as @PapaJohns Creative AOR. Watch your 6, cheap pizza guys. 😉

— Brandon Rhoten (@brhoten) October 31, 2017

Ritchie, who began his career at Papa John’s making pizzas and answering customer phone calls 21 years ago, said that the brand looks to compete with Domino’s, as well as other fast food brands by making it easier for customers to order a pizza from multiple platforms. The brand currently allows customers to order from Facebook and Apple TV.

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Alphabet has announced that Eric Schmidt will step down as executive chairman and will take on the role of technical adviser on the company’s board at the end of 2017.

Schmidt served as Google’s chief executive in 2001 and became its executive chairman a decade later, retaining his position when the tech giant restructured to form Alphabet Inc.

Alphabet’s board will now most likely appoint a new, non-executive chairman at its next meeting in January.

“Larry, Sergey, Sundar and I all believe that the time is right in Alphabet’s evolution for this transition,” said Schmidt.

“The Alphabet structure is working well, and Google and the Other Bets are thriving. In recent years, I’ve been spending a lot of my time on science and technology issues, and philanthropy, and I plan to expand that work.”

 

In his new role, he is tipped to advise the company’s urban development arm, Sidewalk Labs with its deep learning efforts, as well as its healthcare startups Verily and Calico.

 

 

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Alphabet has announced that Eric Schmidt will step down as executive chairman and will take on the role of technical adviser on the company’s board at the end of 2017.

Schmidt served as Google’s chief executive in 2001 and became its executive chairman a decade later, retaining his position when the tech giant restructured to form Alphabet Inc.

Alphabet’s board will now most likely appoint a new, non-executive chairman at its next meeting in January.

“Larry, Sergey, Sundar and I all believe that the time is right in Alphabet’s evolution for this transition,” said Schmidt.

“The Alphabet structure is working well, and Google and the Other Bets are thriving. In recent years, I’ve been spending a lot of my time on science and technology issues, and philanthropy, and I plan to expand that work.”

 

In his new role, he is tipped to advise the company’s urban development arm, Sidewalk Labs with its deep learning efforts, as well as its healthcare startups Verily and Calico.

 

 

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Thanks to digital skullduggery, brand safety remains hotter than the devil’s anvil.

From the stump speeches of Procter & Gamble’s Marc Pritchard to the role of ad tech in funding misleading content to YouTube’s multiple ad scandals, the perils of digital media buying were on full display throughout 2017. Here are five charts that summarize the state of brand safety.

Brands claim responsibility
Whether you’re examining brand safety, fraud or data leakage, there’s plenty of blame to go around the complex ad-supply chain whenever a snafu arises. But brands have more to lose than others if their ads appear next to questionable content.

A survey of 30 brand marketers by Digiday+ showed that brands place more responsibility on themselves than on agencies, vendors or publishers, when it comes to maintaining brand safety. Marc Goldberg, CEO of anti-ad fraud vendor Trust Metrics, said brand advertisers should be leading the conversation on brand safety because if they don’t care about it, nobody else will.

YouTube’s brand pullouts
In March, brands like AT&T and Verizon took their ads off YouTube after The Times of London published an exposé that showed brand ads appearing in videos that promoted terrorism. Although most of the brands that pulled their ads from YouTube were back on the platform within a few months, posturing surrounding this event catapulted brand safety into elite buzzword territory.

The concept of brand safety has been around for years, but as seen in the Google Trends graph below, searches for brand safety peaked in March.

Violent content is widespread
From drugs to piracy to sex, there is a lot of content on the internet that advertisers try to distance themselves from. Violence is the category that ad-verification company Integral Ad Science blocks, most often for brand-safety reasons, for its advertiser clients.

Travis Lusk, vp of global sales strategy at IAS, said advertisers aren’t necessarily more sensitive to violence in content than they are to sex content or illegal downloads. Compared to other touchy topics, there just happens to be more content across the web that gets categorized as violent.

Brand-safety tactics
In November, video ad platform Teads surveyed 100 CMOs and vps at large brands about brand safety. Nearly 80 percent of them said they are more concerned about brand safety than ever before.

About half of the survey respondents said they had reviewed their agency and vendor contracts over the past year. More than a third said they layered on more third-party ad measurement to their campaigns.

“Marketers are stepping up to take control over the way their money is spent,” said Forrester analyst Susan Bidel.

Programmatic perils
IAS found that across display and video for both mobile and desktop, programmatic buys have a greater likelihood of exposing brands to unsafe content than direct buys. This makes sense, given that with direct deals, brands know who they are working with. Programmatic platforms, on the other hand, are engineered to bring ads to thousands of publishers simultaneously, and the long-tail sites featured on these platforms offer cheap scale at the price of appearing next to low-quality or sensational content.

As Pritchard noted in a recent interview with Digiday: “We’ve still got to do work on brand safety.”

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Diageo’s voice strategy is becoming clearer with the launch of a service for the Amazon Echo Show that shows people how to make cocktails with the drink maker’s brands.

It is the company’s first app in Europe for Amazon’s latest voice-controlled speaker, which launched last month with support from a handful of brands and publishers. Diageo was among the early adopters, intrigued by the addition of a screen to Amazon’s range of smart speakers, a feature Diageo believes makes the device perfect for the kitchen.

Rather than adapt an existing skill, the name for apps on Amazon’s voice-controlled devices, Diageo has created a new one for the Echo Show. The advertiser took the concept behind thebar.com, a site it launched in 2013 to tap into the trend of mixing drinks at home, and built a voice-controlled version called “The Bar.” The skill gives people three options: People can ask for a recipe and then be talked through the recipe; it offers cocktail suggestions based on user preferences such as sweet or sour; and it teaches people mixology techniques.

Ingredients for the cocktails can be saved to shopping lists that are then sent to the Alexa mobile app, where the user can buy the ingredients. The skill also gives users the option to purchase certain ingredients and 12 of Diageo’s brands, including Smirnoff, Captain Morgan and Johnnie Walker, by directing them to Amazon.

“Technology is changing the way we socialize in and outside of the home,” said Periklies Antoniou, new technology and media innovation manager at Diageo. “With the new The Bar skill, we’re tapping into the growing number of adults using voice-enabled devices to take them on a journey toward mastering mixology.”

Antoniou’s enthusiasm for the new skill reflects how quickly and aggressively Amazon has flooded the market with its range of smart speakers. Forty percent of U.K. households will own an Echo by next year, according to the Radiocentre. Wise to the possibilities that scale could bring, Diageo has cozied up to the online behemoth’s voice-controlled offering, so much that the advertiser was wheeled out during Amazon’s first upfronts to the U.K. advertising industry earlier this year.

Should the Echo device become ubiquitous in households, then it could potentially become a sales channel for Diageo, which has struggled with direct selling for years like most consumer goods companies. While Diageo’s latest Echo skill is focused more on brand awareness than e-commerce, the brand has previously talked up the latter’s potential on voice-controlled devices. A recent report in the U.K. from Accenture found that 60 percent of people want to use the Echo to help them shop, and 7 percent already do so.

Search will be fundamental to any full-fledged strategy Diageo concocts for voice-controlled devices.

There will come a time when many search queries won’t be “mai tai” in text form; instead, it will be “how to make a mai tai” as a verbal query, the company’s head of digital innovation, Benjamin Lickfett, has said. When that time comes, brands that exploit the most relevant conversational, long-tail search terms will be able to monetize voice searches, which is why Diageo is trying to have a plan in place before its rival brands.

Image courtesy of Diageo

Diageo’s voice strategy is becoming clearer with the launch of a service for the Amazon Echo Show that shows people how to make cocktails with the drink maker’s brands.

It is the company’s first app in Europe for Amazon’s latest voice-controlled speaker, which launched last month with support from a handful of brands and publishers. Diageo was among the early adopters, intrigued by the addition of a screen to Amazon’s range of smart speakers, a feature Diageo believes makes the device perfect for the kitchen.

Rather than adapt an existing skill, the name for apps on Amazon’s voice-controlled devices, Diageo has created a new one for the Echo Show. The advertiser took the concept behind thebar.com, a site it launched in 2013 to tap into the trend of mixing drinks at home, and built a voice-controlled version called “The Bar.” The skill gives people three options: People can ask for a recipe and then be talked through the recipe; it offers cocktail suggestions based on user preferences such as sweet or sour; and it teaches people mixology techniques.

Ingredients for the cocktails can be saved to shopping lists that are then sent to the Alexa mobile app, where the user can buy the ingredients. The skill also gives users the option to purchase certain ingredients and 12 of Diageo’s brands, including Smirnoff, Captain Morgan and Johnnie Walker, by directing them to Amazon.

“Technology is changing the way we socialize in and outside of the home,” said Periklies Antoniou, new technology and media innovation manager at Diageo. “With the new The Bar skill, we’re tapping into the growing number of adults using voice-enabled devices to take them on a journey toward mastering mixology.”

Antoniou’s enthusiasm for the new skill reflects how quickly and aggressively Amazon has flooded the market with its range of smart speakers. Forty percent of U.K. households will own an Echo by next year, according to the Radiocentre. Wise to the possibilities that scale could bring, Diageo has cozied up to the online behemoth’s voice-controlled offering, so much that the advertiser was wheeled out during Amazon’s first upfronts to the U.K. advertising industry earlier this year.

Should the Echo device become ubiquitous in households, then it could potentially become a sales channel for Diageo, which has struggled with direct selling for years like most consumer goods companies. While Diageo’s latest Echo skill is focused more on brand awareness than e-commerce, the brand has previously talked up the latter’s potential on voice-controlled devices. A recent report in the U.K. from Accenture found that 60 percent of people want to use the Echo to help them shop, and 7 percent already do so.

Search will be fundamental to any full-fledged strategy Diageo concocts for voice-controlled devices.

There will come a time when many search queries won’t be “mai tai” in text form; instead, it will be “how to make a mai tai” as a verbal query, the company’s head of digital innovation, Benjamin Lickfett, has said. When that time comes, brands that exploit the most relevant conversational, long-tail search terms will be able to monetize voice searches, which is why Diageo is trying to have a plan in place before its rival brands.

Image courtesy of Diageo

SoftBank and Mubadala are in the round.

Chinese ride-hail behemoth Didi Chuxing just raised $4 billion, the company announced on Wednesday. Before this round, the company had raised upward of $15 billion.

Participants in this round included SoftBank and Mubadala. Didi would not disclose the current total funding. This round valued the company at around $56 billion; the company most recently was valued at $50 billion.

After Didi acquired Uber’s China operations in August of 2016, it expanded its international footprint through investments in companies like Brazil’s 99.

The company expects to continue that expansion. Part of the funding will also be dedicated to the development of AI, according to the announcement. Earlier this year, the company launched an AI lab in the U.S. to focus on the platform as well as self-driving.

Didi also has dipped its toe in dockless biking by participating in a recent $700 million round investment in Ofo, which recently expanded into the U.S.

This is developing …

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