Category: Data-Labor-Technology Stories

Some 90% of the company’s ad revenue now comes from programmatic/self-serve platforms. In the fourth-quarter 2016, 10% of its ad revenue came from programmatic platforms.

Alphabet Inc.’s Google unveiled new technology that lets publishers create visual-oriented stories in a mobile-friendly format similar to the style popularized by Snapchat and Instagram

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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 Martin Kihn, research vice president at Gartner. A new technology appears, seemingly from the ether, and promises to change our lives. Customer data integration, labeling and storage problems will disappear.… Continue reading »

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Snaplash Snap sales VP Jeff Lucas, formerly Viacom’s ad sales chief, has left the building, Cheddar reports. Snap had a nice stock bounce, too, after it beat Q4 revenue projections, but the company’s next phase of potential growth will largely be in new hands.… Continue reading »

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By Rajeev Goel, co-founder and CEO, PubMatic

Ad tech vendors are vying to be crowned as the leader in transparency by any means necessary, regardless of the consequences for their clients or the industry. In truth, the transparency debate itself has become radicalized, with attention-grabbing headlines occasionally eclipsing appropriate change. It’s time to move past rhetoric. What the market needs is trust between publishers, advertisers, and technology providers–trust that can be achieved by reimagining programmatic business models.

At the IAB Annual Leadership Meeting last year, Marc Pritchard, P&G’s chief brand officer, called for cleaning up the supply chain, vowing to only pay digital media and ad tech suppliers that complied with the company’s strict quality and transparency requirements. It was the first time a brand advertiser committed to leveraging significant ad spend to improve the programmatic landscape, setting off a wave of efforts and initiatives aimed at achieving this goal. While a year has passed without full resolution, many technology providers have revised business practices to align with changing market demands. Some have even co-opted the concept of “radical transparency” to promote mass disclosure of customer fee rates.

This approach sounds good in theory, but will do little to increase trust between all parties. Comparing fee rates doesn’t work in a B2B environment. The business arrangements are too complex, and companies’ product capabilities are too varied. Ad tech is not a commoditized market. A variety of parameters–feature set, payment terms, quality controls, and volume discounts, to name a few–could be factored into each agreement. Simply put, if your offering is not differentiated, rate wars won’t solve your problem.

More importantly, mass disclosures could result in each side of the digital ecosystem having unwarranted influence over the other. Advertisers, justifiably, want to maximize how much of their ad spend flows to the publisher. But this disclosure could put advertisers in a position to dictate which SSP a publisher should select based solely on fee rate. Likewise, a publisher could tell an advertiser they prefer a specific DSP that charges lower fees. This is a slippery slope. Should advertisers only buy ads from publishers that pay their journalists the lowest wages? Or that pay the lowest rent for office space?

Mass fee disclosure could unfortunately result in a single, isolated commercial term becoming the dominant driver of technology decisions. Premium publishers have told us they could risk significant monetization if buyers seek to route ad spend to competitors with lower revenue shares. And it’s not just publishers that would suffer; this practice could ultimately remove choice and stifle innovation across the industry.

Realistically, programmatic take rates–the share of ad spend that goes to a technology provider–should decrease over time, particularly as volume scales and brand spend overtakes direct response in the programmatic market. Ultimately, publishers should have control over what is best for their business; we need to welcome a vibrant and competitive ecosystem that encourages negotiation on both price and functionality.

The status quo, revenue share-based approach has created an opaque ecosystem. As a publisher-first company, we believe SSPs should remove all fees from the buy-side so the total rate is fully transparent to publishers. But this is only one piece of the puzzle.

A viable path forward requires a mentality shift for decision makers. The way to achieve trust is to move the industry towards a mature software procurement approach that is transparent, lowers costs for everyone, and creates healthy relationships. We have introduced new pricing models that are based on usage, not revenue. By licensing technology to support more sophisticated transaction methods– including private marketplaces and header bidding – publishers will have more predictability and liquidity to take advantage of the evolving market and innovate for consumers and advertisers alike.

As technology providers, we need to stop talking exclusively about revenue targets and instead broaden our conversation to a client’s entire P&L. By thinking about both revenue and cost, one can make more informed decisions that will drive long-term business success. This requires a move towards partnerships between principal (publisher or advertiser) and technology provider, as opposed to campaign- or day-trading-based relationships.

Trust between publishers, advertisers, and technology vendors can be achieved. The real path forward is the application of clear, mature licensing models, not radicalized headlines masquerading as transparency.

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Unilever CMO Keith Weed grabbed headlines Monday when he said the packaged goods giant wouldn’t advertise on tech platforms that create societal division or don’t protect children. The comments were from a keynote at the IAB Annual Leadership Meeting in Palm Desert, California, where Weed said social media needs to earn back the public’s trust, which he said is at a new low, caused by the tech companies’ failure to deal with the spread of illegal, unethical and extremist material shared on their platforms.

“Is it going to be the year of the techlash or a year that we start rebuilding trust?” he asked. “We need to redefine what’s responsible business in the technical age.”

But unlike Marc Pritchard, Procter & Gamble’s chief brand officer, who used the perch to bash the platforms at ALM last year, Weed described a lower-key approach of working with the platforms behind the scenes, which he explained in a conversation. Below are excerpts, lightly edited and condensed.

You’ve said Unilever would not pull advertising from platforms but instead work with them. What’s the case for this approach?
This has moved from being from an industry issue to a societal issue. We need to engage in a much more positive way and encourage them to move faster. Many cut advertising on YouTube last year. We didn’t have a problem with our advertising on YouTube. We were using the highest guardrails and were buying high-quality inventory.

Do you think your approach worked with YouTube, then?
I think they were committed to making big changes. It’s good to have multiple voices. And it’s true with other platforms: Be as tough as you can behind closed doors. It’s been helpful with Facebook, with all the platforms. I’m not suggesting for a second we don’t put the issue on the table — but be challenging in a collaborative way as opposed to giving public ultimatums.

We already direct investment against the 3 V’s: viewability, third-party verification, value. All I’m doing here is adding another criteria, make sure the platforms contribute to a positive contribution to society. I don’t put road maps out in public, but third-party verification and what needs to be achieved by what stage — these are the standards I’ve been working on for some time.

There are those who might say platforms won’t clean up their act until powerful companies like yours suspend advertising on them. What do you say?
In the YouTube example, people did suspend advertising. But engaging and being part of the dialogue, with always the ultimate approach being, if it’s not sorted out, you vote with your dollars, has proven to be more successful.

Unilever has reduced underperforming ads and taken more of its marketing in-house, halving the number of agencies it uses and making 30 percent fewer ads. Is that work done?
We continue to invest in advertising, but we were were producing too much content. We weren’t wearing our ads in sufficiently. I still think there’s more we can do. Where I think we’ll go further is, I’ll further be trimming agencies, not by a particular percentage, but to simplify our portfolio.

Are you prepared to pay more for media if that’ll ensure safer environments?
We’ve always paid very competitive rates, and we’ll continue to do so. I do believe we need to move to a single measurement system, and this will help in cleaning up the challenge of the supply chain. It’ll have a much better impact on user experience, and it’ll help us optimize. You can only spend your dollar once, and you need to spend it wisely, and I don’t intend on spending any more than I need to in digital media.

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During a trying time for global expansion in digital media, Forbes’ investment in diversifying revenue streams over the last two years has set it up to grow sustainably in Europe.

According to the publisher, it now has 12 million unique monthly users across Europe, 15 percent of Forbes’ global traffic, thanks largely to its European contributor network of 200 people. Forbes has 4.7 million monthly uniques in the U.K., per comScore.

Globally, two-thirds of Forbes’ digital ad revenues now come from programmatic, direct deals and branded content, with revenues from print, live events and custom research making up the remaining third, according to chief revenue officer Mark Howard. Howard said branded content and live events are the two fastest-growing revenue streams and areas of growth for Europe.

“We’re in expansion and growth mode in Europe; we’re playing offense at the moment,” he said. “Because we’re a single title, we can make a lot of decisions about our technology, infrastructure and resource to more nimbly change focus than perhaps some others.”

Events play an important part in Forbes’ business growth. Globally, Forbes hosted 17 paid events in 2017, up from 11 in 2016. In 2018, it will add at least five more events. Three of Forbes’ events franchises will run in Europe in 2018: the CMO Summit, the CIO Summit and the Under 30 Summit, which will make its Western Europe debut. Last year marked the first CMO Summit in London, which had 85 attendees, and the conference this November will extend to a full day.

Business events are competitive, but despite their challenges, they play an important role for Forbes. “If you look at the top 20 accounts in the company, in almost every instance they are borne out of very strong relationships with the CMO,” said Charles Yardley, managing director of Forbes Europe. “Convening [CMOs] is mutually beneficial.”

Forbes has only recently built its European editorial footprint by acquiring The Memo, a U.K.-based finance and tech publisher, which has a slim team of three editorial staffers that will join Forbes’ existing team of two editorial staffers based in London. Previously, Forbes’ U.K. edit team reported to its U.S. counterpart, but Alex Wood, The Memo’s founder, is assuming the position of Forbes European editor to deepen its business and finance coverage on the continent, particularly in the Nordics.

“The Nordics are underreported,” said Wood. “Coverage often overlooks Stockholm, Oslo and Copenhagen, but they are smashing it consistently, particularly in financial technology.”

As well as growing the number of Forbes’ European contributors, the publisher will soon launch a European newsletter, inviting The Memo’s 20,000 daily newsletter subscribers to sign up. The open rate for The Memo’s daily newsletter was around 30 percent, according to Wood. MailChimp puts the average open rate for media newsletters at about 22 percent.

Having a stronger European editorial focus will help grow Forbes’ native ad program, BrandVoice, which gives advertisers access to its content-management system to publish content directly onto the site, said David Carr, strategy director at Digitas LBi. Forbes now has over 10 BrandVoice partners from Europe, compared to seven two years ago, the publisher said.

The type of branded content Forbes creates leans toward thought leadership and whitepapers for business professions. “We lead much more with audience and a content platform, organic discovery and distribution, as opposed to leading with large creative fees and following it up with big arbitrage traffic numbers,” said Howard, although he added that Forbes is investing in the creative services it offers. Last February, the publisher introduced geolocation and audience targeting to BrandVoice. As a result, Howard said 85 percent of the content views are within the target audience.

Yardley said an undersold service in Europe is Forbes’ custom research. In the U.S., Forbes conducts research on its audience, a combination of smaller email surveys and more thorough research. Custom research is increasingly the starting point for deeper partnerships with brands, which then run smaller events and BrandVoice content with Forbes.

“Research by Forbes offers a seal of endorsement,” said Carr, “despite the fact that people on the online front know there has been a detraction from the brand because of the fact that anyone can write for it. Yet Forbes has cachet and has built a very successful model from it.”

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Don’t call it a pivot. USA Today Network is bulking up its video capabilities with plans to add 20 new editors and producers to join its current 40-person team that  handles video and photo production for USA Today and its network of 109 news and media properties. USA Today has also built new studio space in parent company Gannett’s midtown Manhattan headquarters as part of the video investment.

“In the evolution of our video business here, it used to be that if you were a great photographer and had been at the company for 20 years, we were leveling you up to shoot video,” said Russ Torres, vp of digital video content and strategy for USA Today Network. “But just because you’re a great photographer, it doesn’t necessarily mean you’d make a great videographer — it’s a different discipline, so that’s who we are in the process of hiring.”

USA Today Network’s video business is already profitable, Torres said, but the company has reorganized in an effort to grow distribution and revenue. Prior to Torres’ arrival from Yahoo, USA Today Network did not have a sole “head of video” that could oversee content and strategy across its network. It created many silos where multiple different video teams, including the core video production unit within USA Today and other teams within individual network properties, would produce content on their own. Often, that meant duplication.

“This is not a vanity investment,” said Torres. “Video’s a viable part of our business, and there are expectations on both the content side and the business side for the business to grow.”

Going forward, Torres and the content team will split its time between daily videos, including viral clips, breaking-news items and features tied to written features, and creating new editorial video properties, including shows for USA Today Network sites and social platforms such as Facebook Watch and YouTube.

On the latter, Torres points to recent success with USA Today’s Humankind Stories and Animalkind Stories on Facebook, which focus on feel-good local stories sourced from the network. Animalkind Stories got more than 400 million views on Facebook in January, the company said. The page, which lives on Facebook Watch, also received 109 million interactions last month, which suggests a shareability that will survive any impact of Facebook’s news-feed changes, Torres said.

Beyond creating new editorial video properties, Torres’ team will also develop and produce shows for key USA Today verticals, including sports, money, life, tech and travel. The team is targeting five to seven digital series this year that could live on USA Today sites and distribution platforms such as Facebook Watch, YouTube and MSN.

The USA Today Network averaged more than 16.7 million unique video viewers per month in 2017, according to comScore.

And while the 20 new hires for Torres’ team will focus on making video, USA Today Network is also committing to additional hires on the business side to grow the existing business as well as create new revenue streams. This includes an executive to oversee platform distribution deals.

USA Today Network is also exploring how it can turn some of the bigger stories from its network into other types of media, including films and TV shows, said Maribel Wadsworth, president of USA Today Network and associate publisher of USA Today. The Indianapolis Star, for instance, broke the story on the sexual assault allegations against former USA Gymnastics national team doctor Larry Nassar and continues to offer extensive coverage on the story. Agencies have approached The USA Today Network to turn its reporting on the Nassar case as well as other stories into long-form video projects, the company said.

“Because we produce premium original reporting, we regularly attract attention from agencies, independent producers and publishers,” said Wadsworth. “Today, we have a few different development deals in the pipeline and are actively engaged in a conversation about a broader relationship to turn the USA Today Network content into scripted and unscripted series, documentaries, movies and books.”

Image provided by USA Today Network

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Data providers are next on Pernod Ricard’s hit list to uncover which companies are secretly profiting from its budgets.

As easy as it is for an advertiser like Pernod Ricard to show third-party cookies often aren’t accurate, it’s proven harder to determine how that inaccuracy translates into wasted budget. What’s changed — and the reason why almost two-thirds (62 percent) of brands have made uncovering data arbitrage and the markups made on their data a priority in 2018 — is that advertisers are tightening up their contracts. If an advertiser doesn’t have contracts in place that guarantee transparency, it won’t know the fee added on to data segments as they are passed down the chain.

“Can I say with 100 percent guarantee that the [the third-party data] we use for our lookalike targeting is the way it should be? No, but we’re moving in the right direction,” said Conor McQuaid, evp of global business development at Pernod Ricard. McQuaid said it was inevitable the transparency spotlight would move to the costs and quality of data after Pernod Ricard gained greater clarity on how much of its budget contributes to effective advertising.

Now, Pernod Ricard is pursuing what McQuaid calls a “test and learn” approach to weeding out the unreliable third-party data it is buying from data vendors. One way to do this is by comparing third-party data with Pernod Ricard’s own data. For instance, a third-party data set of a company’s current subscribers can be shown to be unreliable if its first-party data shows those same people clicked on an ad and signed up to become new subscribers. “We’re buying the appropriate data and then seeing what the response is from the activity to determine whether it’s valid,” explained McQuaid. “Clearly, our preference is to use our own data where possible.”

His comment doesn’t mean third-party data is dead in the eyes of advertisers like Pernod Ricard, but its role is changing. Third-party data will be used to “add color” to an audience profile or provide indication of intent, rather than as the core audience targeting method in a campaign, said Nick McCarthy, svp of data solutions of Merkle’s Europe, Middle East and Africa business.

McQuaid declined to reveal the results of those tests. There’s no incentive to publicly name bad actors, and in some cases, advertisers are contractually bound to keep quiet. Agencies are also in a bind where if they name bad actors, they can be held liable by brands. The best approach, according to ad tech firm Sonobi’s Chief Operating Officer, Justin Kennedy, is for marketers to conduct appropriate due diligence on data partners to know what they’re paying for upfront.

According to Infectious Media, which has extensively tested third-party data on behalf of its clients, it’s often difficult to get complete transparency on the third-party data supply chain. “Where we can’t get the transparency we require, we generally find it better to source data directly from publishers to ensure provenance and quality and to eliminate hidden charges in the supply chain,” said Dan Larden, Infectious Media’s global strategic partnerships director.

Rather than rely on agencies to help detect those hidden fees as some advertisers are, Pernod Ricard has turned to its in-house team of experts. The advertiser “still has some way to go” on bolstering its own data analytics expertise, McQuaid admitted, but it has made progress over the last 12 months. Furthermore, the business is reorganizing its central marketing team with the appointment in July of former finance chief Christian Porta to oversee its brands, a move it said will allow the global team to work better with local teams on issues such as data transparency.

Pernod Ricard’s attempt to unbox the data it uses has greater urgency ahead of the enforcement of wide-ranging data privacy laws governing advertisers’ management of Europeans’ personal data. In order to comply, the alcohol manufacturer will need to know in many cases that consumers have given active consent for their data to be used and will consequently have to get closer to the source of any data it buys. This will mean asking questions about how the data was sourced and whether all the correct permissions were obtained, which could potentially lead the advertiser to uncover more dubious activity in its supply chain.

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A year ago at the IAB Annual Leadership Meeting, P&G marketing head Marc Pritchard shook his fist at digital platforms and digital players that wouldn’t adopt uniform measurement standards, a sense of reality has set in. It was, at the time, a rare public rebuke for a duopoly-dominated digital media order.

A year later, in the California desert, the criticisms Pritchard leveled are now almost old hat. Digital media and marketing execs have entered the acceptance phase of duopoly control. Pritchard himself has said he’s seen enough progress on issues he raised to keep digital ad spending mostly the same.

Unilever CMO Keith Weed called for a more collaborative approach with the platforms. (Unilever also wasn’t among the marketers that pulled ads off YouTube last year after extremist videos were discovered on the platform.) It’s more effective to talk tough behind closed doors instead of through public ultimatums, Weed said without directly mentioning Pritchard. Weed made no specific public demands on the platforms, though, which left some audience members wanting. “It’s easy to make impressive statements,” one attendee shrugged.

The quandary for marketers is that they realize that public trust in the social platforms and corporations is nose diving, and that their brand risks a negative rub-off of advertising on a platform that’s polluted with misinformation or offensive content. At the same time, they can’t replace the platforms’ audience and user data elsewhere. One major marketer confided that after his company pulled its ads off YouTube last year, it paid the price: “It hurt my sales.”

(The digital platform giants themselves weren’t around in a big way to take shots at. Last year, Facebook, Google and Snapchat all had a big stage presence; Facebook’s vp of partnerships Dan Rose took the main stage to talk about how the platform had big plans to collaborate with publishers. This year, only Google was on the agenda.)

A year ago, Pritchard’s call to action raised digital ad execs’ hopes that other advertising giants would follow suit and bring pressure to bear on Google and Facebook to level the playing field and fix the fake news on their platforms. Publishers were eager to keep the pressure on Google and Facebook, whose dominance of digital advertising has come at the expense of publishers.

But after being angry for a long time, there’s a view that digital execs can’t blame Facebook et al. for everything. Marketers are getting pressured internally for taking responsibility themselves for embarrassing ad placements. There’s a publisher sentiment that Facebook doesn’t owe them anything, that they need to look themselves in the mirror and accept that they helped create their digital business problem, having decided 20 years ago to give away their content for free online. Call it the backlash to the backlash.

If Facebook’s recent announcement that it would run less news content in its news feed, was distressing for publishers that rely heavily on it to reach audiences, there’s also a feeling of liberation now that publishers know they can’t count on Facebook for distribution like they used to.

“There’s a feeling that we’re in the middle of a reckoning,” said Grant Whitmore, an evp at Tronc. “There’s the belief that money will flow to us. It gives a certain type of publisher swagger to say, ‘I have an audience who comes to be because they like what I do.’”

That doesn’t mean there’s no room for opportunism. Some, like Oath, the newly cobbled together Verizon-owned company that includes Yahoo and AOL, are using the opportunity to present themselves as an alternative to the duopoly. “We look at ourselves as not just a viable alternative, but one that should be in the conversation,” said Tim Mahlman, Oath’s president of advertiser and publisher strategy.

Attendees acknowledged digital ads’ problems are far from solved, but also acknowledged there’s been progress in cleaning them up. Ad fraud declined 10 percent last year, according to an Association of National Advertisers report. There’s been a big uptake in adoption of ads.txt, which is designed to help buyers avoid spoofed domains and arbitraged inventory. Chrome’s ad blocking filter is about to be turned on, which high-quality publishers hope will lead to higher pricing for their inventory by weeding out annoying and obtrusive ad formats.

Mahlman said the 2017 YouTube brand crisis and pressure from the P&Gs of the world kicked Oath into gear to shore up its own verification practices and caused others to follow suit. “It cleaned up a lot of our industry,” he said. “It also sends signals to major brands that they need tech to know an ad was served to a real human.”

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