Data-Labor-Technology

The New Yorker belongs to a rare club of publications whose revenue from readers exceeds that of advertisers. Total paid circulation for the weekly rose 12.3 percent last year to 1.2 million, even as the subscription price grew 20 percent to $120 for the most popular print-digital bundle. Today, readers contribute 65 percent of the revenue. (At The New York Times, reader revenue is 60 percent.)

Based on that growth and the Trump bump, which helped deliver The New Yorker’s biggest month in subscription growth in January 2017, executives at the news and culture weekly and parent Condé Nast believe they can double the number of paying subscribers by 2023.

Other publishers are trying to see how far they can go to get readers to pay for content, with ad revenue flagging. Elsewhere at Condé Nast, Wired just put up a paywall, and Vanity Fair has said it’s planning to. The New Yorker can charge a high price because it has an especially die-hard fan base (and there’s that coveted tote bag), so the lessons of its experience are limited.

“It was scary to think about charging three-figure sums,” said Pam McCarthy, deputy editor of The New Yorker, recalling the decision to raise the price of the bundle to $100 in 2016. “Then, we thought, people in their 20s are paying for Netflix when we were embarking on this increase. And The [New York] Times’ success is encouraging, as well as The Washington Post’s growth. The lesson of the past five years has been not to undervalue ourselves.”

Monica Ray, an evp of consumer marketing at Condé Nast, is spearheading the growth strategy with The New Yorker. She sees growth coming mostly from new groups of consumers based on subject interest. Data has shown, for example, there are a lot of readers who seek out The New Yorker for its political and culture coverage. That understanding has helped inform editorial decisions: Helped by the additional circulation revenue, The New Yorker has hired 15 writers for the site in the past year for a total of 40 and plans to add up to 10 more this year, focused on areas like Washington and health. The publication hasn’t cut back, saying the goal is to offer more to readers, as it’s found that the more kinds of content people read, the more willing they are to pay up.

“They’re in a fairly rarified group of publishers that are seeking aggressive growth,” said Michael Silberman, svp of strategy for Piano, which helps publications with reader-pay strategies. “If it were purely digital, that’d be even more impressive. But even print plus digital is impressive because print is shrinking overall.”

The New Yorker has leaned on its nine email newsletters, the biggest of which, the Daily, has more than 1 million subscribers. The publication has also expanded coverage into areas like politics, business and food, and it’s personalized targeting on its site to grow readership and subscriptions. But the most important driver has been the ability to target affinity groups on Facebook and Google using paid posts and paid search keywords to put articles in front of potentially new audiences, Ray said. The New Yorker is discussing the possibility of joining publications that are testing subscription sales on Facebook, but hasn’t committed.

“Those digital channels are what’s opened up The New Yorker,” Ray said. “That’s changed the way we reach consumers.”

Overseas is another growth area that The New Yorker has just started to explore. The magazine is starting, as most U.S. publications do, with the U.K., to be followed by other English-speaking countries. It’s hired Sam Knight, a writer who’s based in London, and does some Facebook targeting of its articles to people in the U.K. But the weekly doesn’t have bureaus overseas, preferring instead to send writers to places they’re covering, and doesn’t tailor its content for other markets.

Advertising is still important to The New Yorker — ad revenue held steady last year — but the growth in paid circulation has become a huge selling point with advertisers, said Chris Mitchell, chief business officer at Condé Nast with responsibility for The New Yorker. “Circulation was always the most boring slide in your deck, and now it’s the thing you lead with,” he said. “It’s nice to have a more balanced business because advertising can be a more cyclical and fickle thing.”

Like other U.S. publications, there are awareness and cost barriers to growing overseas. The New Yorker charges the same subscription price everywhere (overseas subscriptions are less profitable because of shipping costs), but may lower the price, given awareness of the publication isn’t as strong outside the U.S.

While subscribers haven’t resisted price increases so far, it’s hard to know if and when that’ll happen. Ray thinks there’s still room to increase the price further without sacrificing conversion rate, given The New Yorker’s unique editorial and that the magazine has tested cutting back the number of articles people can read for free before hitting the paywall to four from six, and the conversion rate still went up.

“It is all about the editorial stories and being able to find writers who can write the stories that don’t appear anywhere else,” she said. “We do need to show subscribers the value; we always have to come up with different ways to meet different needs for them.”

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Once one of the most high-profile programmatic holdouts, BuzzFeed has embraced the automated ad business to the point that last week it opened its programmatic inventory to its entire sales team.

BuzzFeed took a measured approach to programmatic until August 2017, when it announced it would start selling traditional banner ads through open exchanges like Google’s AdX and ad networks like Facebook’s Audience Network. The publisher began testing the standard display ads on its site in September and “stepped on the gas in October and November,” said Dan Walsh, who oversees BuzzFeed’s programmatic business on a day-to-day basis as gm of BuzzFeed.com.

“Just last week, I opened it up to the entire sales team to start having those conversations across more than just trading desks, across more than just agencies, going direct to clients,” said Lee Brown, BuzzFeed chief revenue officer. Brown said opening up programmatic has brought in new advertisers, but wouldn’t provide any numbers about how that business has performed.

For years, BuzzFeed pitched brands on its ability to produce articles and videos that would be distributed on its site and through its social accounts. BuzzFeed would then boost the placements that performed the best to increase the impressions that came from people sharing a piece of content on their own, which were free of charge to the advertiser.

But now that BuzzFeed is selling traditional ads on its site, the company has a financial interest in directing traffic back to the site, which has led advertisers to wonder whether BuzzFeed is still just as invested in supporting the spread of their branded content.

“It’s a bit of a conflict of interest and bait-and-switch for longtime advertisers,” said one brand executive that has done branded-content deals with BuzzFeed. “I’ve paid premium dollars to BuzzFeed for sponsored content that was supposed to generate two times or more impressions from the earned reach, and the advertiser next to me just bought ads on BuzzFeed’s homepage and is trying to get eyeballs there. Those two things conflict, and it’s a turnoff.”

Brown dismissed any perceived conflict between the two sides of BuzzFeed’s ad business. “Our core business is still native,” he said. He also described how BuzzFeed can connect the native and programmatic sides of its ad business.

For starters, he sees an chance to take its cut-down versions of brands’ TV ads, called BuzzCuts, and run them programmatically across its site. Second, he is exploring how to use programmatic banners for advertisers to show to people who were exposed to a sponsored quiz or other native campaign. Third, he sees an opportunity to create BuzzFeed’s version of the interest-based audience segments that Facebook, Google, Snap and others offer for ad targeting.

“Whether it’s targeting people who are heavy quiz takers or love Disney princesses … we think about those types of segments as something that advertisers are very excited about,” said Brown.

BuzzFeed is also starting to put measures in place to protect its programmatic ad business from advertisers that would buy ads on its site, then track that audience around the web and target them on other sites, reaching BuzzFeed’s audience for less money, a risk that premium publishers face when they sell their inventory on the open market. Since BuzzFeed sells its inventory through open auctions, as Walsh confirmed, it can fall prey to this practice.

BuzzFeed is adopting the Interactive Advertising Bureau’s ads.txt initiative, which lets advertisers know which companies are authorized to programmatically sell ads on BuzzFeed.com. It’s also looking to sell some of its inventory through private marketplaces so that only authorized advertisers can access it. The company has sought advice on how to set up such deals from investors like NBCUniversal and Hearst, which have erected their own private marketplaces, Brown said. A job listing on BuzzFeed.com for a director of programmatic partnerships includes the creation and implementation of private marketplaces as the first bullet point under the position’s responsibilities.

BuzzFeed’s recent expansion into programmatic is a notable change since early 2018, when its programmatic sales were limited to Walsh and a few other employees, according to Brown.

During CES in Las Vegas in early January, BuzzFeed held meetings with its programmatic partners, and even then, four months after it opened up to automated ads, those partners were surprised to learn how lean its programmatic team was. “I would have anticipated them to be slightly more ahead by this point in that respect,” said one ad tech executive.

That’s no longer the case.

“The most remarkable thing about it is they were one of the original and only holdouts, and now they’re whole hog in it,” said the ad tech exec.

The post Inside BuzzFeed’s pivot to programmatic advertising appeared first on Digiday.

Artificial intelligence is the thing right now, so naturally, any modern marketer can’t afford to miss out. In the latest edition of Confessions, where we trade anonymity for candor, a senior media agency exec argues that most clients chasing AI are mostly doing it for public relations, not business objectives. Here’s our conversation, lightly edited.

There’s a lot of interest around AI.
You have the senior-most clients, generally CMOs and even CEOs, who are trying to make sure their company is in the press, saying, “Brand X is doing something innovative.” And there are only two things at their shiniest point right now, and that’s AI and blockchain. The conversations start with, “We want to be innovative.” Then, there’s a big pause. That translates into: “I’d like to have some press about it and speak on stage about it.”

How bad is the misinformation?
I’ve had clients asking me how to buy [an IBM] Watson. We see a lot of this. We try to talk them down, to say there’s a lot of this that’s based on promise, not reality. The year of mobile is a perfect example of that. Until the phones became widely distributed and platforms emerged to use them, it was just talk.

Is there even agreement on what AI is in the first place?
There are as many definitions as there are grains of sand on the beach — like programmatic, it’s become a word that has many meanings.

Will AI mature into something important?
I’m hugely bullish that it’ll transform our business, but I’m realistic. If you have very large data sets, these algorithms can process them in a way that humans can’t figure out, like understanding how to bid on programmatic for different kinds of audiences. The problem is, very few clients have their data act together. So they all want to try AI, but they don’t have anything to feed it.

What do you say to them?
Who’s in charge of your data? They list multiple people, which is always a problem. There are some things you can do that are AI-ish, like dynamic creative that doesn’t require as much data. So it’ll create 10,000 versions of that ad and optimize to the five that actually work. That’s AI training wheels.

It must be hard to try to meet their demands but still be realistic.
People get so lost in the tactics of what’s going on, so if you can be the guy saying, “What business problem are we solving with this?” all of a sudden people get back on safe ground. That usually resonates really well. More often than not, it ends up being additive to something we’re doing.

It sounds like this AI obsession speaks to something bigger, though.
A lot of innovation changing boils down to fame. It’s, how can we be recognized for our efforts publicly? So it’s building the brand’s fame or individual’s fame. It ends up with a lot of chasing shiny objects. The story is the same, but the rate of change keeps accelerating.

What about blockchain?
Today I received my first client-specific request saying they want to be part of a story that involves blockchain. The issue is, it’s so nascent that there are a couple actors in the place talking about it, but they’re purely formative. [Clients] don’t understand it’s not a thing; it’s just an ingredient. I guarantee it’ll be as talked about as AI.

What do the clients think they can do with blockchain?
They want to cancel their subscription to their brand-safety vendor and just do blockchain. It’s just so far from being a reality. Some want to use blockchain as a third-party ad server. It’s reflective of them not understanding what it is. It’s 70 percent chasing an object and 30 percent pushing the boundaries of the future. The jokes about robots taking over have pretty much stopped, though. Nobody’s expecting them anytime soon. So that’s good.

What’s the cost of all this chasing shiny objects?
I think some chasing the shiny object is healthy because even if don’t get all the way there, we get down the path. The cost is that some programs that we know are working get starved a little. The money’s always coming from somewhere. Most will cut the print budget — that’s the first cupboard that gets raided — or the platforms they’ve had a long time. We do spend a lot of time chasing down different opportunities that turn out not to be a thing.

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Retail banks are missing out on $15 billion in global revenue thanks to a gender gap in access to checking and savings accounts.

A BNY Mellon report published last week in collaboration with the UN, cites flaws in design and marketing that make financial products less accessible to women than they are to men. For example, women tend to be in the workforce for a shorter period of time but also tend to live longer than men, so insurance or retirement savings products and the marketing for them may need a refresh.

The report identifies gender gaps on other products; financial institutions are missing out on another $7 billion in credit card revenue, $14 billion in personal loans and $4 billion in housing, the report says.

There’s no shortage of headlines and reports about how companies fall short in marketing to women: just look here, here and here. In this installment of Confessions, in which we trade anonymity in exchange for honesty, we spoke with a marketing expert who spent a decade in large financial institutions like Citi and Bank of America and now works at a fintech company, who says overarching statements about marketing “problems” are misguided and unless research comes out specifying what about the marketing isn’t working, the problem is that women are treated as a niche.

Read the full story on tearsheet.co

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Amazon may not want brands to think they have anything to be afraid of, but in 2017, it pulled the trigger.

That year, the company’s private-label business skyrocketed, with Amazon now owning the trademarks for a total of 41 brands across the apparel, shoes, accessories, grocery, household and pharmacy categories, up from 12 in 2016. Amazon doesn’t break out what percentage of its sales come from private-label brands versus wholesale retailers versus vendors, but a report from e-commerce analytics firm One Click Retail estimated in December that Amazon’s private-label brands drove about $470 million in sales last year.

The post Amazon’s invisible brands: How the company is changing the private-label industry appeared first on Digiday.

Tesla Chief Executive Elon Musk took to Twitter to lobby President Donald Trump on China’s trade stance on auto makers, saying the Middle Kingdom’s current rules “make things very difficult.”

Uber is in advanced talks to turn over most of its Southeast Asia operations to local rival Grab, ending a costly fight for market share in the fast-growing region.

Agencies of all sizes made a point of recognizing International Women’s Day today as movements like #MeToo and #TimesUp increasingly move from the entertainment and media worlds to the ad industry. Some agencies, including the New York office of creative shop Stink Studios, encouraged female employees to stay at home to show their male counterparts…

A lawsuit brought by a former executive at Hyundai’s Innocean Worldwide accuses the agency and its chief creative officer of sexual harassment, discrimination, retaliation and wrongful termination. According to the suit filed on Jan. 11 in the Superior Court of Orange County, Calif., onetime Innocean director of content Victoria Guenier said she suffered repeated harassment…

YouTube announced that the YouTube Studio tool it began testing in beta last June as an alternative to Creator Studio will become the default experience for several creators “over the coming weeks,” and three new metrics will be introduced, along with a new dashboard. Creators will still have the option to go back to the…