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Although GroupM has invested aggressively in programmatic and data-driven marketing technology, Chairman Irwin Gotlieb still adheres to the importance of top funnel marketing. “I believe strongly in a marketing funnel, and that broad targeting will continue to remain an essential part of marketing,” he told AdExchanger. “If I focus my effort on picking the lowest… Continue reading »

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Among multiple ideas under consideration is listing roughly 30% of the cellphone unit on the Tokyo Stock Exchange, as well as a separate listing overseas.

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“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video. Today’s column is written by Alex Betancur, co-founder at Lucktastic. As we move into a new year, app marketing will continue to evolve with many companies shifting to and relying on a return-on-advertising-spend model. What this really means is… Continue reading »

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. By The Board Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey will not return to Disney’s board this year because “it has become increasingly difficult for them to avoid conflicts,” Disney said in a statement. Sandberg had been on the board since 2010,… Continue reading »

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The warnings have been years in coming. Ever since Facebook surpassed Google as the top traffic referral source in 2015, publishers have seen Facebook send less and less traffic to their sites as it’s made tweak after tweak to its formula to favor users’ posts on over publishers’ and brands’ posts.

Facebook dropped a bomb last week that it would change the news feed to favor posts from friends and acknowledged that publishers would take a hit. Facebook is in the midst of an existential crisis, with the platform under fire for offensive content polluting the feed and enabling the spread of fake news and Russian meddling in the election. With Mark Zuckerberg talking about none less than his legacy being at stake, everything signaled this was more than just another algorithm change but a fundamental shift away from promoting news posts, which was never core to Facebook’s mission of connecting every man, woman and child in the world in the first place. This decision, which sent tremors through media companies, was not your average algorithmic tweak.

“It’s all fallout from the election,” one publisher said, speaking anonymously to avoid irking Facebook. “They’re tired of dealing with it and it’s not worth the effort internally.”

It also might mark the beginning of the end of the Facebook media era, where a social network became a chokehold on an industry, crowning new publishing upstarts who mastered feeding the Facebook beast and left many publishers wondering what shoe would drop next as Facebook kept changing its priorities from clicky stories to short videos to live videos to long-form programming.

Justin Smith, CEO of Bloomberg Media, has warned publishers of platform dependency for the past two years. The move, in his view, is fundamentally an “admission of vulnerability” by Facebook. While many will feel short-term pain, the lasting impact of Facebook occupying a shrunken role in media is for a healthier industry that rewards loyalty, strong brands and sound business models.

“This move can be interpreted as one of the first cracks in the facade of the duopoly,” he said. “This development is very good for all of media in the long run.”

In the short term, of course, there is pain. But that pain will not be evenly distributed.

“This one’s really going to capture the attention of publishers in the sense of, you can’t build a business around the Facebook algorithm because you don’t know when it’s going to change,” said David Chavern, president and CEO of the News Media Alliance, a trade group representing newspapers from local outlets all the way up to Dow Jones and The New York Times.

For publishers that have become too reliant on a business model that relied on amassing big audiences with viral but undifferentiated content, this newest news feed change is a reckoning. A lot of publishers have audience scale but little else to differentiate themselves. What’s more, these publishers weren’t making much money off that scale — it was, in many cases, empty calories.

“Traffic chasers’ fall from grace will be severely expedited,” said Rich Antoniello, CEO of Complex Networks. “If they were going to be out of business in three years, now it will be 12 months.” Said another publisher CEO: “Anyone who listened to Facebook and optimized to reach in the feed is in tough shape.”

Forward-thinking publishers have been moving toward focusing on content that engenders loyalty and hopefully subscription revenue. They’re also pushing to diversify their traffic sources so they’re less dependent on Facebook, still the second biggest referrer of traffic just after Google. There are still many unanswered questions about what the changes will mean for different types of publishers and content, but it’s safe to say this diversification shift will accelerate as publishers move from shock and dismay to asking what tactical things they can do to insulate themselves from an increasingly newsless news feed.

Many have adopted Facebook Groups as a way to deepen their connections with readers in smaller numbers but with stronger engagement, for example.

“It’s time for us as an industry to look more closely at the other ways to grow audiences,” said Matt Karolian, who heads social media for Boston Globe Media. “Does it make sense to maintain all the pages you have now? I don’t think you should be spending a lot of time on improving your Facebook page 10 percent when I don’t think that’s going to be a growth effort.”

Boston Globe Media has been preparing itself for this day, shifting its focus from Facebook pages to other parts of Facebook including groups, that don’t have as large an overall audience but have significantly higher engagement, Karolian said.

Even hard news, which many predict will take a hit in the new news feed because users don’t typically comment or share it, can still find airtime on Facebook if it’s framed in terms of how it impacts people’s lives, which can then prompt people to share or comment on it, he argues.

“Publishers will take all the energies and resource into a low-return strategy and put those into different areas,” especially those driving direct relationships, said Smith.

In the coming weeks, audience development pros will be closely monitoring their traffic data to see if and how Facebook’s news feed change impacts them before reacting. Some will doubtless continue the Facebook tap dance to see if they can alter their strategy to give Facebook what it wants. Jason Stein, CEO of Cycle, predicts “a drawn-out period of experimentation.”

Still, there’s a growing sense that publishers are wanting out. It’s hard to find a publisher that’s happy with the money they’re making from all the content they put on Facebook’s platform. In a sense, this is just the latest in a string of half-steps and unkept promises by Facebook, whether it’s the ever-changing video strategy to fast-loading Instant Articles that haven’t provided enough monetization. For many publishers, the good will has run out. They’ll still post to Facebook, but have given up waiting for Facebook to become a significant revenue driver.

“If it’s a piece of the marketing puzzle, you model that very differently,” said Jason Kint, CEO of publisher trade group Digital Content Next. “You look at the costs and make sure you can justify it as a marketing expense.”

Facebook is a regulator of the news business without accountability, Chavern said. “It is a watershed moment in terms of publishers being much more cynical about their ability to build a business on Facebook.”

And for Facebook, the test will be whether replacing news with more baby photos and status updates will help its business, which is predicated on obsessive user engagement.

“The loser here is Facebook,” Bloomberg’s Smith said. “I can’t imagine that taking off all this quality news content and replacing it with personal connections experiences will result in deeper engagement.”

Brian Morrissey contributed reporting

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Last year, after receiving an advertising degree from the University of San Francisco, Austin Sacks moved to Los Angeles, a city bustling with ad agencies, to begin his career. But he soon realized he wasn’t going to make ends meet on a starting salary.

After months of looking for work, Sacks, 23, landed a job as a market research and account executive assistant at ad agency Pulsar, a role that paid LA’s minimum wage — $10.50 an hour — even though he was working around 30 hours a week. In car-happy LA, it was barely enough to cover his gas.

The financial stress pushed Sacks to work part time as an Uber and Lyft driver. By driving 30 to 40 hours a week, he earns an additional $400 to $600, more than the $315 a week he initially received at Pulsar. A few months ago, he got a raise to $14 an hour, but says he still needs to lean on a second job. “It’s a really disgusting dance with my bank account,” he said.

Sacks isn’t the only one in this situation. Advertising professionals, mostly those starting out in the industry, often have to supplement their incomes with second jobs. With the rise of the sharing economy, a popular choice is to work for ride-hailing services like Uber and Lyft.

Abel Jimenez began driving for Uber when he was in between jobs in the summer of 2016. But even when he became an account coordinator at a small agency in San Francisco that August, earning $37,000 a year, he discovered he would still have to drive on the side to make his finances work. “The bucks weren’t coming in the way I thought they would be,” he said. So from 6 a.m. to 11 a.m., before his work day, he would drive people around, earning an extra $100 a day.

A year later, Jimenez, 25, is now an account executive at Young & Rubicam in San Francisco, making $55,000 a year. Driving for Uber has become less of a necessity, but he still works a second job during weekends to earn extra dollars. He chose to leave Uber in August after learning the company was keeping wages from its drivers, opting to drive for Eaze, a service that delivers medical cannabis goods, like body scrubs and candy, to people in the Bay Area.

Jimenez said driving has helped him better relate to different types of people. “Driving people around all day makes you more self-aware of how you approach people you work with,” he said. “When you’re driving people, you are catching people at different points of life. Some people don’t feel like talking; others can’t stop asking questions.”

But not all young professionals can work for an Uber or Lyft, even if they’d like to. For one, you have to own a car, which is rare in some cities like New York. “I feel privileged because I have a car,” said Jimenez. “Not everybody is fortunate enough to work in the gig economy.”

Others simply don’t have the time. One young millennial, who wishes to remain anonymous, works as a senior specialist at an ad agency and said they would like to supplement their income by driving for Uber, Lyft or another ride-hailing service, but they don’t have enough time to do so.

“We work too late and too long to have side jobs,” said this person, who works up to 60 hours a week and earns a $50,000 salary. “I feel like I should get paid way more, but I’m already so exhausted from this job I would cry if I had to work a second one.”

The post Cash-strapped young ad agency staffers moonlight as Uber drivers to make ends meet appeared first on Digiday.

Ever since it became widely accepted that the fashion calendar is broken, the industry hasn’t been able to find a fix-all solution that would bring the release of designer collections in line with changing customer demands. See-now-buy-now, thanks to being a drastic and expensive undertaking, never became the revolutionary movement it was propped up to be.

In its place, the Council of Fashion Designers of America, which owns the rights to the New York Fashion Week schedule, has been exploring solutions that would help designers move faster, enact smarter supply chains, and update production cycles in a way that would minimize lag time between runways and collection releases.

Its most recent move: a partnership with Nineteenth Amendment, a retail platform and production management company that specializes in on-demand manufacturing.

Through the partnership, all CFDA brands — including Calvin Klein, Tory Burch, Vivienne Tam and Michael Kors — will have access to Nineteenth Amendment’s production platform. Through the platform, which carries no inventory, customers can pre-order designer items that are either sold through Nineteenth Amendment’s retail site, the brand’s own website, or through wholesale partners like boutiques and department stores. Once ordered, items are manufactured in one of Nineteenth Amendment’s local U.S. factory partners and shipped within four to six weeks. Currently, about 500 small designers sell through the platform, and the company has a dozen factory partners. To scale with the new CFDA partnership, 60 more factories will be brought onto the production platform as a partner.

“Our opportunity now is to figure out, ‘How do you adjust the supply chain from start to finish?’” said Steven Kolb, president of the CFDA. “Designers are all coming to us with the same problem. There’s no more waiting around to let this sort itself out, because customer behavior isn’t going backwards.”

Amanda Curtis, co-founder and CEO of Nineteenth Amendment, said the company is in the process of onboarding and testing upcoming partnerships with more established brands, as up until now, the company’s bread and butter was helping small designer clientele make their first retail sales. She couldn’t share the names of the designers who are testing the platform yet, but as partnerships come together ahead of February’s New York Fashion Week, designers that do use the platform will be able to sell items directly from the runway, without any inventory hanging overhead.

“What we’ve enabled is see-now-buy-now-make-now,” said Curtis. “There’s no risk in inventory upfront, which is why see-now-buy-now didn’t really work.”

At New York Fashion Week, for instance, those watching a designer’s runway show could view a capsule collection of items available for pre-order on their phones or the web, that the brand has designed specifically for the Nineteenth Amendment platform. If an item is purchased, the manufacturing process is set into motion, including fabric sourcing, purchasing, manufacturing and shipping. Since all items are manufactured in the U.S., turnaround time is guaranteed to take no more than six weeks. During the process, both designers and customers can see a real-time view of the process.

Designers have the option to either turn over their entire production to Nineteenth Amendment or set aside only a small collection of items to be part of on-demand manufacturing. Wholesale partners can sell through the platform, as well, with buyers seeing the sample designs, accounting for less inventory risks.

“New brands, emerging brands, they don’t have to do things the [traditional way],” said Downing. “What you do is this: Present the collection in your showroom to buyers ahead of time, then you do your actual fashion show and presentation in real time, in season. I’m a big believer in in-season shows.”

Curtis, who was a designer before starting Nineteenth Amendment, said that the company has a 7 percent e-commerce return rate, takes 10 percent commission for any piece sold and charges designers $20 a month to use its management platform.

“We started with a proposition for small designers to make retail sales without a huge investment,” said Curtis. “But throughout the industry, big and small, the struggles are exactly the same. All designers are thinking about inventory risks, selling direct to consumer and the lead times of manufacturing over shore. Everything we put in place was to fix all of this.”

The post Inside the on-demand designer production process that could replace see-now-buy-now appeared first on Digiday.

News UK is bullish on the opportunity for vertical video, and it’s starting to see the fruits of its labor.

The publisher of British newspapers The Sun and The Times of London launched V-Studio last June, a suite of tools for creating vertical video content, in order to relieve the creative barrier of reshooting content for mobile. Typically, shooting vertical video is a low priority for U.K. creative agencies. But clients that commit to a certain amount of budget directly with News UK won’t have to pay additional creative costs for it.

Vertical video demand is being driven by audiences, platforms and advertisers alike, according to the publisher: 91 percent of the audience for tabloid brand The Sun comes from mobile, while that figure is 79 percent for subscription title the Times.

Over the last four months, News UK has run 16 vertical video ad campaigns across its owned and operated platforms and Snapchat Discover edition. Twelve of those were for luxury clients such as Michael Kors and Net-a-Porter, which are adopting the format more quickly than other sectors.

Luxury clients have typically been reluctant to jump into outstream video because of the lack of control around what their content is adjacent to. But they have been receptive to vertical video, a nonintrusive format that takes up the full mobile screen and users can swipe off of. Equally, luxury advertisers spend a lot of money on TV ad creative, and vertical video now offers a useful additional digital distribution route for these at scale.

“The market suggests that outstream video cannot replace the lack of supply of pre-roll in the industry, but we see the opposite,” said Oliver Lewis, director of digital strategy and partnerships at News UK. “If the vertical mobile canvas is used correctly, it can be an alternative and complementary to instream. Outstream driven by mobile vertical is a big opportunity.”

V-Studio launched with seven different interactive vertical formats for clients. Recently, the Times used the vertical format that incorporates live data feeds in a campaign for Michael Kors. The ad used viewers’ location data to show them their nearest Michael Kors store, after 33 percent of Times mobile users opted to share their locations for the campaign. Different creative is served based on audience preferences. The campaign click-through rate was 75 percent above the average for News UK’s nonvertical video placement, according to Lewis, although he wouldn’t share absolute numbers.

News UK has said vertical video formats increase interactions sixfold compared to horizontal ads. The publisher is testing how the format performs with more branding metrics like purchase intent, rather than interactions with the ads.

Three-quarters of the vertical video campaigns run by News UK repurpose existing assets from clients, while V-Studio shoots 25 percent as part of branded content campaigns. The format is now included in all News UK video briefs. The ambition is to have vertical video included in every branded content campaign News UK runs by the end of the year. Vertical video appears in about 60 percent of branded content campaigns to date.

CPMs for News UK’s vertical videos fetch twice what the average pre-roll video ad would on the Times’ mobile site and 25 percent more than pre-roll video ads on The Sun, according to Lewis. News UK makes 50 million monthly impressions available for vertical video across its network. In December, vertical video inventory on the Times sold out, and Lewis expects to sell out in January, too. The publisher is looking to increase supply on the Times and through its other brands like Dream Team and Style Play.

“We don’t expect to see a deflation on [the CPMs for] the Times. It’s a premium environment, and it’s performing well,” said Lewis. “We won’t create inventory to backfill. It’s not an opportunity to lower yield; there’s a flight to quality, and that should be reflected in the rate.”

By the second half of the year, News UK expects the number of vertical video campaigns it runs to overtake traditional mobile outstream formats. New formats are in the pipeline, too: The publisher is testing shoppable vertical video formats to release in the coming months. Virtual reality and 360-degree vertical creative are also in the cards this year.

Direct deals rather than programmatic have been the focus so far, although advertisers can buy News UK’s vertical format through Unruly’s SSP. Lewis said it wouldn’t rule out further partnerships over the course the year.

“There has been some negative press around the format,” said Lewis. “We believe it’s an opportunity to capture a large amount of video budget; it needs support and growth from all publishers.”

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