Less BS, More Facts, Some Opinions
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The May deadline to comply with Europe’s General Data Protection Regulation (GDPR) is swiftly approaching, and ad tech and security startups are forming a new industry: privacy tech. Companies like PageFair, Evidon, Prifender, Tealium and Segment hope to capitalize with GDPR compliance solutions for brands, publishers and even other ad tech vendors. The International Association… Continue reading »
Harford and Uber CEO Dara Khosrowshahi worked closely together at Expedia.
Uber is filling another key role in its executive ranks just as the year turns. The ride-hail company has hired former Orbitz CEO Barney Harford to be its first-ever chief operating officer.
Harford, who has been learning the ropes at Uber as an adviser since October, worked closely with Uber CEO Dara Khosrowshahi at Expedia. Before becoming CEO of Orbitz — which Expedia later acquired — Harford led Expedia’s push into Asia while Khosrowshahi was CEO. He begin his official work as COO on Jan. 2.
His appointment comes as Uber embarks on an important year. Coming off a year wracked with public scandal, Khosrowshahi is under a great deal of pressure to turn the company around in 2018. Adding to that, the long-time travel executive has his sights set on taking the company public in 2019.
Harford joins a growing C-suite. In October, Khosrowshahi appointed former Pepsi executive Tony West to be Uber’s chief legal officer. The next priority for the company is to fill the CFO role.
“I have never met a stronger operator or a more thoughtful strategist than Barney,” Khosrowshahi wrote. “He is able to go deep on key aspects of a business while never losing sight of the big strategic picture. He loves engaging with operations, marketing, product, and engineering teams around hard problems, and is passionate about using technology to transform the world.”
This ain’t your grandpa’s Walmart.
When Walmart paid $3 billion for Jet.com and its founder Marc Lore, the promise was that the entrepreneur would help the retailer appeal to new types of customers.
Here’s the next step in that evolution.
A new Walmart subsidiary, called Code Eight, has recently started testing a personal shopping service for “busy NYC moms,” according to multiple sources, with the goal of letting them get product recommendations and make purchases simply through text messaging.
The target customer of Code Eight is described in an online job listing as a “high net worth urban consumer” — translation: A rich city dweller — certainly not the historical sweet spot for Walmart’s main business.
Household items are delivered for free within 24 hours; other purchases are delivered within two business days. Returns are picked up for free at a customer’s apartment building or house.
Walmart’s startup incubator, Store No. 8, is also working on another under-the-radar project, dubbed Project Kepler. This effort aims to reimagine the in-store shopping experience with the help of technologies like computer vision.
Multiple people familiar with the project tell Recode that one goal of the initiative is the creation of physical stores that would operate without checkout lines or cashiers — in a similar fashion to Amazon’s futuristic Amazon Go store, which was announced a year ago but has yet to open to the public.
A Walmart spokesperson declined to comment.
Taken together, these Walmart initiatives mark a major leap in the vision for the type of businesses Walmart will operate, and customers it will serve, five or 10 years down the line. But since both business strategies are in early stages, there is no guarantee that either will develop into a long-term business or launch widely.
Walmart had previously announced that Rent the Runway co-founder Jennifer Fleiss is heading up Code Eight, but has revealed little to no details about the startup.
Recode has learned that Code Eight plans to eventually charge a membership fee, but current testers are using it for free. The personal-shopping service is currently focused on items in “health & beauty, household essentials and apparel/accessories” categories, according to a job listing. It’s not clear if the startup is sourcing this inventory from Walmart and its subsidiaries, or from outside retailers.
Code Eight has told early users that they can order products simply by texting a photo of it. They can also message with a general request for a type of product they need, and leave it up to the service to pick the specific item for them; customers fill out a survey upon joining that is supposed to help personalize their experience.
One source says that the Code Eight product has the appearance of an automated bot, but seems like a human is actually the one communicating on the other end of the message. That may change over time.
“[W]e set our sights on taking the lead in conversational commerce by leveraging machine learning, NLP, and personalization algorithms,” a Code Eight job listing reads. NLP refers to natural language processing — essentially, how a computer turns a human’s spoken or written request into instructions it can process.
The Project Kepler project focused on the future of in-store shopping is being led by Mike Hanrahan, the co-founder and former chief technology officer for Jet.com, multiple sources tell Recode. It is located in Hoboken, N.J., where Jet is based.
A Project Kepler job listing for a “computer vision engineer” says that the role will involve creating a “best-in-class consumer experience in the physical retail space.”
Amazon’s Go concept uses a combination of sensors and cameras to track what each store shopper takes off of shelves so it can automatically bill them for their purchase without their having to stop to pay on the way out. The store’s launch has been severely delayed, however, with reports that the technology did not work well when the store was crowded.
Walmart is envisioning a similar system that would potentially eliminate the need for cashiers in stores outfitted with the technology. Walmart has more than two million employees worldwide, many of whom work at checkout.
But it’s possible that the Project Kepler technology would be used in new types of store formats, rather than be retrofitted for existing stores. This project is just one of several across Walmart focused on what the retail store of the future should look like, according to a source.
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“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today’s column is written by Trey Stephens, director of audience monetization at Acxiom. As 2017 comes to a close, it’s a great time for brands to assess ways to improve marketing strategy and better capitalize… Continue reading »
NFL ratings are down this season, but in-game ad revenue continues to grow year-over-year this season, according to new data from Standard Media Index. This season’s NFL revenue, from September to the end of November, is up 2 percent among all networks. There was one additional nationally aired linear TV game than in the same…
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Welcome to AdExchanger Talks, a podcast focused on data-driven marketing. Subscribe here. Jonathan Suarez-Davis will speak at AdExchanger’s upcoming Industry Preview conference on Jan. 17-18. In the wake of several big acquisitions, Salesforce Marketing Cloud has surpassed $1 billion in annual revenue. In this week’s episode we talk with its chief strategy officer, Jon Suarez-Davis, who joined the… Continue reading »
Others in tech investing are also mulling how to counter the free-spending by the Japanese investment company
Call it the SoftBank Effect.
According to sources close to the situation, the high-profile venture capital firm Sequoia Capital is in the early of raising a third global growth fund that could range from $5 billion to $6 billion.
Sources said a numbers of other funds in Silicon Valley are also considering fundraises of this magnitude or even higher, prompted, in part, by the pressure to have larger pools of capital to deploy in the wake of SoftBank’s $100 billion Vision Fund.
As Recode noted earlier this month, SoftBank Vision Fund is backed by tech giants including Apple, Qualcomm and Sharp, as well as by sovereign funds from Saudi Arabia and the United Arab Emirates, making it the largest technology investment fund ever.
Leading rounds that include scratching out checks that start about $250 million (Slack) and head to $10 billion (Uber), its scale has reshaped Silicon Valley in 2017 — and, more to the point, irked the VC community.
“They have created a lot of tension between founders and their earlier investors, when they say take our giant wad of money or we will give it to your competition,” said one VC. “It’s made everyone else realize they need more capital, so that SoftBank is not the lead in every deal.”
That’s been one of the reasons for Sequoia’s giant raise, said sources, although the longer delay of a lot more startups in going public is another.
And Sequoia is definitely making an enormous leap from a previous $2 billion raise for its most recent global growth fund in 2015 that was disclosed in June
The Sequoia fundraising for the new global growth fund is in its exploratory discussions, said sources, so final numbers have not been determined. Its previous funds in this series have invested in companies like Airbnb, Stripe and Toutiao.
Between making its 10th agency acquisition of the year and winning the Maserati account, Accenture Interactive’s December reflects a 2017 that saw it get closer to senior marketers. Joydeep Bhattacharya, Accenture Interactive’s managing director for the U.K. and Ireland, said it’s only a matter of time before consulting firms oust traditional agencies in advertisers’ minds and revealed how the crumbling digital advertising ecosystem could benefit the consulting firm in 2018.
Our recent conversation has been edited and condensed.
Big brands have said there’s no role for consulting firms in cleaning up the supply chain. Why is there a bigger role for Accenture Interactive in helping marketers spend their money?
Now more than ever, it’s apparent that marketers need to be more focused on growing their businesses. If they don’t own that agenda, then someone else will. As more industries get disrupted and more new players emerge, then those marketers who are able to influence the trajectory of their own company’s growth will be the ones that thrive. It’s only a matter of time, and we want to be the ones that set the pace for that [change].
Was that focus part of the reason why Maserati recently picked Accenture Interactive without a pitch?
Maserati’s CMO [Jacob Nyborg] talks about the importance of horizontality [within businesses], but there aren’t many agencies that can not only join creative, data and technology end to end but also say that they’re ready to be a true partner. By that, I mean really understanding a client’s growth KPIs, which could mean putting our own fees at risk because of that. We have the talent and the culture at Accenture Interactive, but it’s also about how we take complete accountability to get results.
[In 2018], agencies will be asked to dial up their commitment as partners and have a commercial relationship linked directly to growth. Creativity in the traditional sense will be even more important as the arena for winning hearts and minds of consumers becomes even more competitive and crowded.
How have you found winning new business?
The direct channels for our agencies like Karmarama, for example, are continuing to flourish because the agency has a broader story to say. For Accenture Interactive, it [new business] works well when we’re able to pull the client onto the global stage like we did with Maserati. Being part of Accenture gives us access to places where the business is already present at the boardroom. We don’t just see this is as a scale play; we’re going to grow on reputation. We’re going to be selective about the clients we go after. It pays dividends in the long run.
Do potential conflicts of interest between clients or between parts of Accenture Interactive’s business like media and auditing worry you?
We have a clear approach; we don’t want to make acquisitions that could upset those agencies already in our existing family. With Karmarama, for example, once we knew we could work with them and vice versa, the second part was to collectively decide together [as Karmarama, Fjord and Accenture Interactive] who is best suited to win what business, as there are enough clients to go after for us. It’s a simple and easy conversation that takes place between the three CEOs that I have within my family.
Do potential conflicts become more apparent as your programmatic business grows? Would you spin off the auditing side of the business?
We’ll cross that bridge when we reach it. Right now, we’re focused on how we can invigorate creative, data and technology together, and then have a clear role in the programmatic space. Depending on how things go and what clients see value, then we’ll decide how best to operate in the market.
Part of Accenture Interactive’s programmatic push centers on offering a managed service to run clients’ in-house trading desks, which many media agencies can do. How will the business be able to sufficiently grow in 2018?
Now that we have critical mass [on the programmatic side of Accenture Interactive], I’m seeing more interest in it. More clients are coming to us asking us to do discovery pieces of work that helps them to understand where their money is going and what they can be doing to drive better effectiveness. That’s not just down to us. The market and the view of media within it has started to shift with the transparency and brand-safety issues that have made the mainstream news.
Why did Accenture Interactive acquire digital agency Rothco?
Firstly, we look at acquisitions as talent magnets rather than [profits and losses]. We don’t just acquire agencies for financial maximization. The other part of our strategy is to be a leader in each of our markets. In the U.K., we have Karmarama. We want to be a dominant player in Ireland, which is part of my [management] patch, and so we got Rothco to help us do that. They’re an agency that’s very strategy-orientated, which made it a good fit for the rest of the business. Ireland is a big market for us. It’s where our worldwide innovation center is. There are also a lot of international brands that are either headquartered there or have sizable options, so it’s a great place to immerse all the international clients that visit in creativity and innovation.
Image courtesy of Accenture Interactive
Alcohol brands like Heineken and William Grant & Sons have concerns about using Snapchat as a marketing platform because they don’t think the app’s age-filtering feature is effective. But that’s not a hurdle for Moët.
The luxury champagne company, which is more than 250 years old, is launching a Snapchat game this week called “Moët & Chandon Tower Toss” as part of its holiday campaign “The Greatest Entertainer.” To play the game, two people take turns swiping up to shoot a champagne cork at a four-layer Moët champagne tower on a table. Each player has 10 seconds to toss as many corks as they want, receiving points based on precision and which tier they target. Moët placed paid ads on Snapchat Discover to direct users to play the game.
“We don’t want to just buy people’s attention through media — we want to get their attention naturally in a customized way,” said Christine Ngo Isaac, marketing director and head of U.S. consumer engagement for Moët & Chandon. “Snapchat is an open ecosystem and has done a good job in building a customer experience outside of traditional advertising.”
Agency Attention helped Moët develop the game, which the brand claimed is Snapchat’s first two-player game. While the game was designed for Snapchat, Instagram and Facebook users can also play a web version through special links.
But one big question for alcohol brands marketing on Snapchat is how to ensure they accurately target people of legal drinking age, which is 21 in the U.S. After all, marketers from Heineken and William Grant & Sons have said it was hard to verify the ages of recipients of ads on Snapchat. But Ngo Isaac disagrees.
“The statement that Snapchat has an age-gating problem is not completely true. I think the problem is many alcohol brands just take a piece of content from other platforms and amplify it through Snapchat,” she said. “For this specific game, our paid ads on Discover target people over 25, even older than the legal drinking age.”
In addition to Snapchat’s own ad-targeting capacities, Moët also asks players to enter their birthdates before playing the game. “We use double verification to ensure that we are not presenting alcohol content to minors,” said Tom Buontempo, president of Attention. “Targeting in general has become more sophisticated on Snapchat. It is working with many third-party vendors to make sure that their ads reach the right audience.”
But that’s not saying alcohol brands face no limitations in marketing on Snapchat. Moët and Attention originally designed the game differently: Winners would have a chance to unlock an exclusive geofilter and then share it with their Snapchat friends after completing the game. But Moët ended up dropping the geofilter idea because it was extremely difficult to prevent Snapchat users from sharing the geofilter with people under 21 on the platform, according to Ngo Isaac.
“We thought of all the possible scenarios that could damage the Moët brand,” she said. “We take the age issue very seriously, which is why we don’t have a company account on Snapchat. We are still experimenting with the platform.”
A Snapchat blog post said 44 percent of Snapchat users in the U.S. look to friends and family for recommendations on alcohol purchases, compared to 19 percent of non-Snapchatters. Bud Light, Shock Top, Smirnoff and Jameson have all used Snapchat’s ad products like Snap Ads, holiday filters and lenses, according to the company blog.
“We use the same type of age registration as similar ad platforms. All new Snapchat [users] enter their date of birth when they sign up for the app, and we then age-gate,” said a Snapchat spokesperson. “We also don’t serve alcohol ads to users with improbable ages that fall at the upper end of the age ranges on our platform.”
The spokesperson said around 80 percent of Snapchat users are above 18 but declined to specify how many are over 21. But Ngo Isaac said Moët has found “the next generation of drinkers” on Snapchat, older millennials around 30-34, whom Moët wants to target.
“Snapchat is no longer just a teenager app,” she said. “It is becoming a more general advertising platform.”
Image courtesy of Attention
For the past year and a half, Theresa Moore, vp of platform partnerships at Pixability, has been trying to buy video ads on Amazon to no avail. A few months ago, Moore — who said trying to build a relationship with the e-commerce giant has been an “interesting journey” — thought she finally had an in.
Amazon’s user-experience team responded to an email she sent, but instead of giving her the direction she needed to buy, it offered her a $100 Amazon card to learn about her experience trying to contact the company. Moore was flabbergasted: “I told them, keep your $100 and give me the contact information of someone at the company who can help me make progress.” She said she didn’t get a contact, but she kept the $100.
Moore is one of many ad buyers trying to work with Amazon but finding it difficult to secure an Amazon rep and then start the process of advertising through Amazon’s suite of ad offerings, including its in-house team Amazon Media Group, self-serve marketing suite Amazon Marketing Services and programmatic solution Amazon Advertising Platform.
“It’s at a level where you can only develop a relationship with Amazon if you know someone,” said one ad buyer at a large agency who asked for anonymity.
Another ad buyer, who wishes to remain anonymous, said their large agency has begun forming a relationship with Amazon after a year of “stalking,” but only because of a major client’s spend.
Digital agency PMG had a similar experience. PMG started reaching out to Amazon about two years ago and didn’t gain traction with the company until a year in, when its client, retailer Cole Haan, expressed interest in spending with Amazon, according to Price Glomski, evp of digital strategy at PMG. That led the agency to acquire eight contacts at Amazon and start building its own internal Amazon practice. In the past year, the agency has spent well into seven figures on the platform, working on campaigns for large clients like Beats By Dre, Glomski said.
But even when ad buyers have an Amazon rep and footing within Amazon, they don’t necessarily get the answers they need quickly.
The makeup of Amazon’s internal client services teams is murky. None of the five ad buyers Digiday spoke with for this story know how Amazon’s client services teams are structured or how many people each has. There is a general understanding that AMG, AMS and AAP all have their own teams, and one ad buyer, who prefers anonymity, believes Amazon has teams structured around specific brands rather than agencies. Still, this person said, “You never have a holistic idea of what’s going on.” An Amazon spokesperson said the company does not reveal how many people work in each division or how many teams fall under client services.
Moore said after months of pestering Amazon, she finally secured her own rep who directs her to other groups within the company that might be able to assist her. But that’s where the help stops.
“It’s such a black box,” said Moore. “They’ve been really nice, but the groups at Amazon don’t know who does exactly what I want, which is to run video ads.”
Even PMG, with its eight contacts and several Amazon campaigns under its belt, has trouble navigating Amazon’s internal client services teams.
“The teams have really focused expertise, so when you ask a question about another ad product or product road map, it tends to get lost in translation, and you have to be directed to another product team,” Glomski said. “Fortunately, the Amazon team we work with is really good, but even they come back to us and say, ‘Sorry, it’s a development in progress.’”
Ad buyers said Amazon is following the playbooks of other ad platforms like Google, Facebook, Instagram and Snapchat, which were slow to make their client services teams available to agencies and ad tech providers while developing ad offerings. Rather, they initially focused on building relationships with large brands.
“Amazon definitely gives more interest and more resources to the larger brands,” said one ad buyer. For instance, one brand this person works with has its own assigned Amazon contact.
Moore is not surprised that Amazon would take this approach. “At the end of the day, brands are the ones that have the creative and the customers,” she said. “Amazon can get the information they desire straight from the brands without having too many chefs in the kitchen.”
“Everything Amazon does is to benefit Amazon,” said another ad buyer. “Everything they’ve built, from their tech stacks to their ad units to their content pages is all to benefit them, so why wouldn’t they go to brands with the big budgets first?”
But this might not be the best tactic for Amazon, as ad buyers at agencies and brands with smaller budgets get antsy about spending on the platform. PMG’s smaller clients, for instance, are eager to spend more on Amazon. Glomski said PMG estimates another $20 million to $25 million is on the table for Amazon from the agency’s midsize brands.
“You can tell [Amazon] is continuing to grow, so for some of our smaller clients, which are still good brands, they just don’t have as much mind share for them,” said Glomski. “What needs to happen quickly in order for advertisers to not get frustrated with Amazon is for Amazon to start building out their strategic group to help grow and train advertisers that will be in the system.”
Amazon has made strides in the past year, like bringing training teams to select agencies and making client service hires. The fact that Amazon’s user-experience team is reaching out to ad buyers like Moore also shows the company is considering ad buyers’ efforts to advertise with the behemoth.
“Agency relationships are very important to us,” said Seth Dallaire, vp of worldwide sales and marketing for Amazon Media Group. “We’ve made investments in both agency development and services as our advertising business grows, and this will continue to be the case.”
Some agencies are seeing the effects of these investments. “They’ve gotten much better in terms of having contacts you can work through, and they’ve made themselves more available to agencies,” said Kevin Packler, vp and director of Amazon services at independent agency The Tombras Group.
But Glomski warned that until the majority of ad agencies and smaller brands feel they are getting the attention they need from Amazon, other platforms with robust client services teams like Google and Facebook will continue to retain more market share. This is especially true, he said, when it comes to transparency and data, another area in which Amazon is known for being a black box.
“With Google and Facebook, any CMO can go in and pick apart different aspects of their marketing strategy,” said Glomski. “If Amazon can provide optics to performance on a daily and hourly level, which is what most marketers today need, that will create a sense of trust and willingness to spend $10,000 dollars a day on Amazon.”