Category: Data-Labor-Technology Stories

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“AdExchanger Politics” is a recurring feature that tracks developments in politics and digital advertising.  Today’s column is written by Jordan Lieberman, politics and public affairs lead at Audience Partners. Happy election season, everyone. I’ve got good news and bad news. The bad news is that many of those who enter the political advertising space right… Continue reading »

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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 Chris Kane, founder at Jounce Media. Marketers who measure website traffic, online sales, app installs or even offline sales all take a fundamentally similar approach to attribution. For each conversion event, they capture a… Continue reading »

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A weekly comic strip from AdExchanger that highlights the digital advertising ecosystem… AdExchanger: Origins AdExchanger: Crisis In Ad City (Part I) AdExchanger: Crisis In Ad City (Part II) AdExchanger: Enter Malware (Part I) AdExchanger: Enter Malware (Part II) AdExchanger: Enter Malware (Part III) AdExchanger: Enter Malware (The Conclusion) AdExchanger: Angels And Startups AdExchanger: Rumble In Arbitrage Plaza… Continue reading »

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. “Less Doing More” In a speech at the ANA Media Conference, Chief Brand Officer Marc Pritchard shared new details on Procter & Gamble’s ongoing marketing revamp, which involved significant spending cuts with “several big players” by 20% to 50%. “We took more control, and… Continue reading »

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In 2017, WPP, the bellwether of the ad industry, had its worst year for revenue growth since 2009, as the agency network wrestled with issues that have impacted every major network to some degree.

Upheaval in the way advertisers spend their money rocked the world’s biggest holding group by sales in 2017. CEO Sir Martin Sorrell said it was “not a pretty year,” but the future for his business looks even bleaker. The fortunes of the big agencies are viewed as the doyen for the global economy, yet the biggest ad network is seemingly collapsing as the market holds up. WPP is facing an existential crisis on all fronts.

It’s not just WPP. Omnicom, Publicis, IPG and Dentsu have all struggled due to several factors. The big agency groups’ struggles aren’t just a symptom of the transparency crisis that has engulfed the industry. There’s a move away from delineated channel solutions to more holistic customer experiences and an increasing focus on measurable results and profit margins. Together, these factors are reducing the marketing spend and the margin that agencies can retain.

Here are five structural challenges that WPP’s earnings show agency bosses must now face.

Agencies need to reinvent themselves
Agencies are durable businesses, and flexible ones. But as they have flexed with marketing trends, their costs have ballooned. Sorrell singled out the the “long-term impact of technological disruption” on WPP’s performance. What the comment suggests is WPP and its peers will continue to seek out fast-growth, cutting-edge technology services for the marketing industry to remain competitive. The growing risks of disintermediation, coupled with the threat from consultancies and from more agile, digital-focused mid-tier players suggest there is likely to be no change in appetite for M&A.

Arguably WPP is acting faster than some of the other holding companies to reduce its cost base by merging agencies and reducing management and back-office overhead. Evolving the service offer of its agencies to give clients the more integrated, “contemporary solutions they want will be harder however,” said Tristan Rice, partner at M&A advisory SI Partners. This transition is like trying to turn multiple supertankers, Rice continued, but it also brings all its “supertankers into closer competition with each other.”

Clients are taking control
Like the changing of the seasons, agency bosses are (again) downplaying the threat of advertisers in-housing media management and content production. Beneath all the surveys and headlines on marketers doing more for themselves lies something more amenable for agencies — if they can get the business model right. Yes, marketers are doing more for themselves, but in many cases, agencies are helping them do it as they try and shift their business models toward the more consultative end of the marketing mix. Speaking to analysts about WPP’s results, Sorrell rattled through the media, data, content, production and programmatic capabilities his agencies have helped advertisers set up over the last year. Conversely, recent WPP data indicates that programmatic and content studios may be going in-house as much as “out-house, revealed Sorrell. “The trend is not clearly defined,” opined the ad veteran. “It’s certainly not clearly defined as in-house.”

Transparent ad buying is being demanded
The prevailing thought among many senior marketers now is “where there’s a mystery, there’s a margin.” After 18 months of suspicion and scrutiny of those businesses paid to manage their ads, advertisers are demanding those players come clean about what’s been going. As Ian Armstrong, the global head of advertising at Jaguar Land Rover, explained: “Subsequent analysis will show whether we’re paying too much for something, and it may be that we’re just not getting the return that we expected, which might be a function of paying too much in the first place for ads or it might be a symptomatic of how the technology works.”

As marketers like Armstrong uncover more of the undisclosed rebates and other hidden fees being made from their money, they are trying to either claw back some of that money or limit their agency’s ability to do strike similar arrangements in future, stunting long-term growth if the business can’t come up with an workaround. An example of this shift in action is at Omnicom’s trading desk Accuen; in its fourth quarter, the revenue from the trading desk slumped by $12 million (£8.7 million) worldwide as advertisers shifted to disclosed programmatic buying models.

The consulting firms aren’t coming, they’re here
Sorrell tried to quell analyst concerns that WPP’s dire 2017 was at least in part down to the likes of Accenture and Deloitte. Of the 80 accounts WPP went head-to-head with consulting firms for last year, it “had a win/loss ratio of about 50 to 30,” claimed Sorrell. Those wins, weren’t “significant in the realm of things,” said Sorrell. But Accenture, Deloitte and IBM aren’t interested in competing for advertising and media accounts as they are now. They see upside at the consultancy and technology ends of the advertising spectrum. It’s why Unilever is working with the digital specialists at IBM iX to test blockchain’s ability to weed out fraud from the advertiser’s sprawling supply chain. And it’s why consulting firms drove M&A spent a collective $1.2 billion in agency acquisitions, according to marketing consultancy R3, while the big networks struck fewer deals.

The duopoly effect is real
WPP brushes off the idea that the duopoly is a threat. After all, WPP spends a lot with Google and Facebook. Of the $75 billion (£54 billion), WPP pumped into media in 2017, $7 billion (£5.1 billion) went to the duopoly. While both Google and Facebook have always insisted that they have no designs on nudging agencies from the view of advertisers, many big brands like Heineken, Adidas and L’Oréal already work directly with those companies. In turn, some advertisers like JLR are starting to factor that burgeoning relationship with Google and Facebook into their new agency models, as the advertiser recently alluded to.

The post All that ails WPP and the wider agency business appeared first on Digiday.

With Facebook choking off media content in the news feed, the next great hope for publishers trying to make money on the platform is Facebook Watch. But even here, the deal terms are getting increasingly limited, with Facebook paying more but demanding more onerous terms for high-quality video shows. In this edition of Confessions, in which we grant anonymity for honesty, we spoke with a publisher that’s produced shows for Watch about how the relationship with Facebook is changing when it comes to this type of video programming. The conversation has been edited and condensed.

Facebook Watch deal terms have been changing since the first wave of funding. You’ve produced several shows. How has that impacted you?
The good thing is, they’re upping their budgets. But they haven’t renewed many shows. We’re happy because we’re getting grandfathered in with the terms that we had during Facebook’s first season of funding. If you did a show during season one and it got renewed, Facebook isn’t demanding ownership over the show. But if you’re doing a new show for them, they are demanding ownership. They are being fairly rigid about that.

Doesn’t that limit how much money you can make?
The only approach to Facebook right now is to take your producer fee — your 10 percent production fee — and see if you can up your margin a bit by cutting the cost of production. That’s about it right now, unless you’re important enough to get a sweeter deal from Facebook.

Even though they’re claiming all their deal terms are standard, nothing is standard. Every publisher, every star, every production company has a different amount of leverage depending on who they are. But I do know they are hiring more [business development] people. They hired one guy from ABC News to help them with deal terms for Watch because everything is getting so convoluted and complex for them, and they want to know how to approach talking to a big-name star or media company.

Since you have ownership, how are you looking to monetize your shows beyond Facebook’s exclusive window?
For the first season of our shows, Facebook only had like a week of exclusivity. Now, they want longer windows and are shifting between 60 days and an indefinite exclusivity, depending on the price they’re paying per episode. What we’re going to try and do is take the show after Facebook’s exclusive window is over and try and sell a new season to a brand.

Facebook has bought a ton of sports programming, and others have said its approach is talent-driven. Have you found that to be the case?
Yes and no. You pitch something that’s talent-driven because personalities tend to be sticky, which implies a loyal audience. That’s what they care about. I can pitch an animated show to them with no stars attached, but if I was able to get 25 percent repeat viewership, it would be their favorite show on the platform.

Another publisher that’s produced multiple Watch shows recently told me that because it’s so unclear how long Facebook will fund content, it went all-in and got “as many shows done as quickly as possible” while the money was still there. Was it the same for you?
Definitely. That’s what people did with Go90. Do you think any publisher was bullish on Go90? Every single publisher who had a show on Go90 would laugh when they said they had a show on Go90. The only reason they did it is because Verizon was writing absurd checks — they wrote a $2.5 million check to Elite Daily. Elite Daily! At least Facebook has the capacity to drive massive eyeballs, which Go90 didn’t.

Get more from the world of video by subscribing to Digiday’s Video Briefing, delivered weekly. Sign up here.

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You could argue that Russia’s meddling in the 2016 U.S. presidential campaign through a savvy combination of organic posts and targeted ad spending would be a great Facebook case study. Alas, Facebook’s strategy for explaining to marketers the part it played in the 2016 U.S. presidential election is simple: Deflect, deflect, deflect.

Facebook is in a Catch-22. If it says it did influence the election’s results, that proves its advertising works, opening it up to a firestorm of negativity and questions about its role in democracy. Digiday spoke to 10 media buyers for this piece, all of whom said that overall, Facebook’s response to questions about whether the ads worked to sway the election is to change the topic of conversation.

“They never bring it up themselves,” said an ad buyer at a major agency. “When we do, they deflect. Usually, it’s by saying, ‘Look at all these amazing changes we’ve made to the news feed.’” A CEO at another agency said he’s not surprised: “We’re not getting much from Facebook on this when we do ask.” A third media buyer said, “When it comes up, it tends to be through the context of something major, like an update they’re making.”

In February, U.S. special counsel Robert Mueller indicted 13 Russian nationals who used Facebook and Instagram to sway votes with social media disinformation campaigns, among other tactics.

In response, Facebook has been on overdrive. The company’s executives have said publicly that they are cooperating with Mueller and the U.S. government and sharing the ads to try and figure out how the Russians abused the system. Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg have both said, essentially, that Facebook has to do better. But at the same time, there are an equal number of executives who, using Twitter in particular, are systematically refuting claims that Facebook directly influenced the election.

“[Agencies] don’t necessarily bring it up because we raise it ourselves,” said Erik Geisler, director of U.S. agency at Facebook, in a statement. “There’s so much work we’re doing right now focused on the safety of our community, and the integrity of the platform, that we feel it’s important that our partners are aware and that we’re answering all their questions.”

According to buyers, Facebook did spend time before the election pitching that the company’s ads are effective — and perfect for elections. So for it to say they’re not effective is simply not an option. In a tweet, Andrew Bosworth, vp of consumer hardware, said as much: “Agreed that ads work.”

In the fall, Facebook sent a letter to agency teams that outlined its approach. In what seemed to be a way to ensure agencies were aware of public statements, the letter pointed out a blog post by Joel Kaplan, Facebook vp of public policy, on how Facebook was increasing enforcement of ad policies. It also mentioned a November test in Canada to let people see the ads a company page is running across Facebook, Audience Network and Instagram, which it says aligns with the company’s “election integrity work” in that country. It said Facebook was building an archive to show election-related ads and provide details on spend, impressions and targeting as well.

“Seems to me the main point was to make sure agencies checked out all the publicly shared info linked in the letter,” said one agency exec.

An agency media director said reps at Facebook don’t seem to have a company line. “They’re hoping to not get into an argument on this and that we can just draw our connections on our own,” said this person. The director, who attended a recent off-site with Facebook executives, added that the conversation around the election usually deflects to that. “At the end of the day, the platform simply works. And for me, even if Facebook swayed the election, then it just tells me it still works,” said this director. “Not all CMOs really care about doing the right thing.”

According to another agency executive who didn’t receive the letter, a conversation happened in October where reps specifically said policies were being updated to require documentation from anyone looking to run an election ad.

Another agency buyer said that “reps are being pretty tight-lipped about the election, pointing to the leadership at Facebook and the information that’s publicly disclosed.” The main message this person hears repeatedly: Things are going to be more secure, and ad monitoring is more important than ever to Facebook.

“It’s an interesting conundrum for Facebook,” said David Eisenman, CEO at Brooklyn-based media and creative agency Madwell. Eisenman said the election spend on Facebook was approximately $100,000, which is an “insignificant amount” if you look at the objective — to sway a nation. “But at the same time,” he said, “Facebook does suggest to marketers that a small business can spend a couple hundred [dollars] a month and see results.” So which is it?

Eisenman said Facebook reps don’t bring up the election, and the agency hasn’t asked about it, either.

Sources told Digiday that Facebook executives tend to directly address the efficacy of election ads at a higher level. For example, Carolyn Everson, vp of global marketing solutions at Facebook, has for a while done internal “Weekly Top 3” posts and videos of what’s on her mind. A couple of weeks ago, she did one for clients, which include agencies and brands, talking about the election and specifically outlining the “integrity efforts” and other things Facebook is doing to make the platform safer for brands.

The media director recognizes the strange spot Facebook is in: “It would be crass from a comms strategy perspective to say, ‘Look at the world; we destroyed it, but at least we did it effectively.’”

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Twitter CEO Jack Dorsey unleashed a series of tweets March 1 where he admitted his company hasn’t addressed abuse, harassment and misinformation on the service fast enough and announced steps to correct the situation.

“We’re committing Twitter to help increase the collective health, openness, and civility of public conversation, and to hold ourselves publicly accountable towards progress,” Dorsey wrote to his 4.2 million followers. He said Twitter would seek help measuring the health of the conversation on Twitter.

We’re committing Twitter to help increase the collective health, openness, and civility of public conversation, and to hold ourselves publicly accountable towards progress.

— jack (@jack) March 1, 2018

The tweetstorm was notable for its candor and sincere tone — tech giants are all under the gun to clean up their acts — but also as a contrast to how Facebook has been using the same platform, with recently disastrous results. It also comes as Twitter has been positioning itself as a friend to high-quality publishers, especially in news.

“Jack’s messaging was precisely what we want: humility rather than infallibility, recognition tech can break communication not just improve and a willingness to learn,” said Jason Kint, the CEO of Digital Content Next and reliable critic of Facebook. “We look forward to solutions and hope the companies with the real industry control and resources step up in a way that they haven’t yet.”

Both Twitter and Facebook not only face growing sentiment that big tech is bad for society but growing rumbles in Congress to regulate big tech companies. Facebook recently faced a firestorm of criticism when its ads vp Rob Goldman stepped into the subject of Russian ads on Facebook with a series of tweets. (Goldman ended up apologizing.) Facebook also been falling out of favor generally with publishers over strategy changes that have hurt their business. Twitter seems to have an edge in the PR war for now, though.

“Jack is much better at his own service,” said David Carroll, an ad tech expert at The New School. “He has a home advantage. He’s deferential. Whereas [Facebook CEO Mark] Zuckerberg’s Twitter activity is very minimal. Facebook also has an open call for funded research, but how are they messaging the existence of that?”

The Dorsey tweets do have something of an orchestrated feel. Dorsey’s been flanked by his CMO Leslie Berland, who has 27,000 followers; and Ed Ho, head of consumer product and engineering, with 10,000 followers. Responses to his tweetstorm ranged from supportive and helpful (ban Trump, get rid of the Nazis, require everyone to be verified) to the skeptical.

Is there a canonical list of all the times @jack has said Twitter is committed to change? Because it hasn’t been true any time before now. https://t.co/vJrw4bJ0r9

— ¡feduardo! (@fedward) March 1, 2018

Dorsey’s thread is similar to what Zuckerberg has done this year: using his company’s platform to communicate that he knows something needs fixing and intends to fix it, said Steven Levy, a longtime technology writer who’s at Wired. “It’s a first step to actually fixing the problem,” he said.

The differences is that Dorsey is using Twitter for primary communication, so it’s important that is own voice comes through, Levy said. “It seems that the Facebook executives are using Twitter for timely responses to what they see as criticism worth engaging with, or disputing. The fact that sometimes it bites them back seems to indicate that those tweets are authentic.”

Twitter’s smaller size relative to Facebook also may help it repair its image because it’s not as dominant as Facebook. The media and marketing community is also eager for platform allies to counter Facebook and Google’s enormity, and Twitter has given the impression it wants to get out ahead of the trolls, bots and other abuses of its service. But as with Facebook, Twitter is vulnerable for having let the abuse problem continue as long as it has, and the PR goodwill will only last so long. It also has a chance to get out ahead of its role being spotlighted in probes of Russia’s meddling in the run-up to the U.S. presidential election in 2016.

To one publishing executive, Dorsey came off as “sincere, not defensive. But they have to actually do something. Talk is cheap. If they want to become a credible publishing entity, they need to take responsibility. And that means action.”

The post While Facebook spars with critics, Twitter goes for humility on social media appeared first on Digiday.

LittleThings shut down after Facebook’s algorithm change cut its organic reach by 75 percent, but it’s not the only social publisher that’s in danger, data from several analytics firms suggests.

Publishers such as Viral Thread, ViralNova, 9gag, Bored Panda, Diply and Distractify have all seen interactions — likes, shares, comments and other reactions — slide precipitously since Facebook announced in January that it would deprioritize publisher content in its news feed, according to Facebook-owned CrowdTangle.

That drop implies Facebook has limited their reach on its platform, bad news for publishers that depend heavily on Facebook for referral traffic, according to data from internet analytics firm Jumpshot. Distractify, for example, saw its monthly traffic decline 78 percent year over year in January and 84 percent year over year in February, with most of the declines attributable to declines in Facebook referral traffic.

Some of these sites are more dependent on Facebook than others — just 12 percent of 9gag’s desktop traffic comes from Facebook, compared to 85 percent for Viral Thread, according to SimilarWeb data. But regardless of how dependent they are, it seems that Facebook sees less value in showing that kind of content to its user base.

“Publishers who had a heavy reliance on gaming Facebook news feed algorithms circa 2016-2017 will be hurting bad right now,” said Matt Navarra, director of social media at The Next Web. “Those publishers who failed to diversify their social platform distribution model or went all-in on Facebook will be regretting it in 2018.”

The declines are just part of a slide that publishers have been riding for over a year. While Facebook prioritized native video and Instant Articles, publisher referral traffic from Facebook declined substantially. In late 2017, Google surpassed Facebook as the top source of publisher referral traffic, leading some search-focused publishers to gloat.

But the severity of these drops varies. The interaction rate on 9gag’s posts fell 50 percent month over month from January to February, according to CrowdTangle data; Viral Thread’s interaction rate fell 32 percent, the second-largest decline month over month, over the past 12 months, according to CrowdTangle data. Neither publisher responded to a request for comment.

In the days following Facebook’s announcement that its users would see 20 percent fewer posts from publishers’ pages in their news feeds, publishers speculated about who would be affected most.

Nearly two months later, the effects are hitting some publishers harder than others. LittleThings was forced to shut its doors, while other publishers have had mild to negligible changes to their referral traffic.

“It’s no surprise the impact on some publishers is minor, whilst for others, it’s utterly devastating,” Navarra said. “We shouldn’t forget Facebook’s push on ‘meaningful engagement.’ Some publishers will be struggling to generate it if their mix of content is not adaptable enough to bend to [Mark Zuckerberg’s] latest desire to drive ‘meaningful interactions.’”

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Bleacher Report wants more Americans to fall in love with European soccer.

Armed with UEFA Champions League and Europa League rights in the U.S., courtesy of parent company Turner, Bleacher Report’s master plan is to leverage its social reach to spotlight stories on soccer culture and European sports stars, as well as the matches themselves.

Part of the plan to build its soccer fan base in the U.S. involves tapping into the popularity of House of Highlights, its Instagram account dedicated to sports highlights, which has 8.3 million followers.

Soccer stars like Real Madrid’s Cristiano Ronaldo, FC Barcelona’s Lionel Messi are already well-known globally, but there is scope to build the brands of other footballers who are big in Europe yet aren’t stateside, such as Manchester United’s Paul Pogba and Paris Saint-Germain’s Neymar da Silva Santos Jr., according to James Grigg, director of international operations for Bleacher Report. That’s what Omar Raja, who runs the House of Highlights account that Bleacher Report acquired in 2015, has done already for NBA players.

“What Omar has done with the House of Highlights is pick out the icons in basketball and create great content around them. We will look for similar things for soccer,” Grigg said. “We have a lot of global icons in the game where House of Highlights and Omar can tell their stories, particularly around the intersection of sport and culture.”

Bleacher Report has prepared a list of players that will likely resonate with U.S. audiences, according to Lee Walker, global managing editor at Bleacher Report. He wouldn’t name specific players, but he said they typically have strong social media followings, off-field personalities and personal style, which appeal particularly to younger audiences.

Content around those players will then be supplemented with Champions League match highlights, in-game clips and post-match highlights, which will run on the House of Highlights account and Bleacher Report’s main social handles. Twenty percent of the followers of the @brfootball Twitter account, which posts purely about European soccer, are from the U.S., while 12 percent of @brfootball’s Instagram followers are from the U.S., according to the publisher.

The U.S. Bleacher Report and Turner teams will handle broadcasting and streaming the matches, and the London team will take the lead on digital distribution, though all will collaborate heavily. The three-year UEFA rights deal doesn’t start until August, so Bleacher Report has started building momentum by posting other soccer-related content. The idea is to also grow interest via culture-related content about the sport’s players ahead of the FIFA World Cup, which starts in June and excludes the U.S. national team.

Last weekend, the London team started posting content that spotlights how European soccer players have recently referenced global cultural moments, in order to pique the interest of U.S. audiences that may not understand or care (yet) about the outcome or magnitude of certain team rivalries and matches. For example, Bleacher Report posted an image on its social accounts of Manchester United players celebrating their important win over Chelsea on Feb. 25 with the “Wakanda forever” gesture, a move from Marvel’s box-office hit “Black Panther.”

“Sport is all about storylines and narratives,” Grigg said. “[European] football is a big soap opera just like the NBA is, in terms of players moving teams, changing managers and celebrating on pitch in culturally relevant ways. We can help tell all that.”

Turner has strategically used Bleacher Report as the bridge between young fans and its traditional subscribers, according to Aaron Duckmanton, head of marketing for video tech company Grabyo. “Bleacher Report understands that the best way of reaching and engaging this [next-gen] audience is through mobile, social video, particularly on Instagram and Twitter, where interaction with influencers and sports personalities happens in real time,” he said.

“With most next-gen fans’ viewing habits driven by fashion, lifestyle and influencer content, Bleacher Report is leading the way when it comes to tapping into what content modern audiences want and what platforms they want to consume it on, something other publishers and broadcasters can learn from,” Duckmanton added.

Taking a player-led approach in the U.S. for Europe-based footballers is smart, though unforeseen commercial challenges may arise, according to Daniel Ayers, consulting partner at digital sports agency Seven League. “The challenge is that those global superstar players attract followers from a genuinely global audience, which may or may not be of interest to domestic U.S. sponsor partners,” he said.

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