Data-Labor-Technology

Like many cable networks, CMT jumped on the scripted bandwagon a few years ago. However, while acquiring Nashville after ABC canceled it in 2016 gave the network a ratings boost, its original scripted shows Still the King and Sun Records didn’t connect with audiences, so CMT will be jumping off the wagon once Nashville’s series…

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Although national broadcast networks have led the charge on audience data and automation – at least in the linear TV environment – local station groups aren’t far behind. NBCUniversal Owned Television Stations is laying the foundation for greater addressability at the local and regional level. The division houses 39 NBC and Telemundo local TV stations… Continue reading »

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Chinese authorities have asked Xiaomi to list on the mainland, and the smartphone company is considering a dual listing in mainland China and in Hong Kong, though the plans could change.

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When Facebook, Twitter and Google executives were summoned late last year to testify before Congress on political interference and advertising in the 2016 election, they were steadfast that they could manage the issue through ad policies and disclosures. Early bipartisan calls for legislation have mostly faded and, for now, self-regulation is the name of the… Continue reading »

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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 Jason Dille, vice president of media at Chemistry. Nature tends to favor the large – except when it doesn’t. Take the African elephant, the largest land-based animal on the planet,… Continue reading »

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Pod People NBCUniversal is cutting its TV ad load, reducing the number of prime-time ads by 20% and total ad time by 10%, Alex Bruell reports for The Wall Street Journal. It hopes this strategy will appease consumers who are increasingly impatient with advertising… Continue reading »

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It was two years ago at the Cannes advertising spectacular, a week of peacocking, drinking and schmoozing on the French Riviera. And on a corner of the Daily Mail yacht, there was LittleThings, hosting a late-afternoon pick-me-up with hand massages and nail touch-ups, and, of course, rosé. It was a modest affair by Cannes standards, but it showed the aspirations of the then 2-year-old media company.

LittleThings, which started as a pet supplies e-commerce site, became a poster child for astonishing audience growth, topping 50 million uniques in three years by sharing inspirational stories on Facebook about people and animals doing heroic things, among other inspirational content aimed squarely at Facebook’s sweet spot: middle-aged women. The formula thrived for a while as long as Facebook rewarded it and other clicky content sites with referral traffic. Facebook even touted the company in its case studies.

CEO and founder Joe Speiser brushed aside comparisons to fast-growth Facebook publishers like Upworthy and ViralNova. This time it was different, since LittleThings was an original content publisher — and Facebook needed publishers like LittleThings that drove engagement on the platform. As Facebook changed — emphasizing video, in particular — so too would LittleThings. “As long as you constantly pivot within the Facebook ecosystem, you’ll be fine,” Speiser said on the Digiday Podcast in May 2016.

That turned out not to be the case for LittleThings. When Facebook decided earlier this year it wanted less publisher content in the news feed, LittleThings’ traffic and engagement plunged. Speiser and Gretchen Tibbits, the company’s president and COO, announced Feb. 27 to their 100 employees that after attempts to sell fell through, the company would close.

The publisher is now a cautionary case study in relying too much on a giant distribution partner whose priorities might not line up with yours. Speiser and Tibbits have fans, both within LittleThings and in the broader industry. They were known as levelheaded media operators who focused on the details of the business and gave the internet a counterpoint to the often negative news of the day. Yet it was not enough.

The business model was intrinsically risky. LittleThings decided early on to ride a tiger, in its case Facebook, only to have the tiger turn around and eat it. LittleThings only grew as big as it did because of Facebook — but it couldn’t find that audience elsewhere when Facebook choked off its reach.

“We would never have reached this scale without a platform,” Tibbits said. “If you look at this target, women over 30 in Middle America, it’s on Facebook. And we did explore OTT and SEO and Instagram and Pinterest, but we haven’t been able to monetize those materially.”

“Joe is a smart guy, and the fact that he couldn’t adjust the business away from its reliance on Facebook speaks to how difficult that transition will be for other social publishers,” said Chris McLoughlin, LittleThings’ former CRO. “Facebook can be a terrific partner, but when a publisher rents all of its audience, it puts itself in a terribly vulnerable position.”

For a while, LittleThings weathered Facebook’s changes. In the summer of 2016 when Facebook rooted out clickbait, LittleThings evolved its curiosity gap headlines to include more information. It ruthlessly A/B tested posts to make sure they’d perform well on Facebook. With dark posts, LittleThings could get the benefit of showing highly engaging posts to only certain parts of its Facebook audience, out of sight of advertisers who might think posts about, say, medical issues were less than wholesome. Mastering those tactics ironically might have led to a false sense of security — and all those tactics would eventually fall out of favor on Facebook.

“I think people were a little wary of being so tied to Facebook and its whims and about the potential of that being the main source of our traffic and revenue,” said Meghan Holmgren, the former managing editor. “But everything I heard from Joe or Gretchen was, we have a great relationship with them.”

In 2016, that confidence led Speiser to move the company out of cramped offices near New York City’s Herald Square to a sprawling space in the newly built Hudson Yards development complex, complete with digital startup trappings like a pingpong table, video games and organic coffee. LittleThings didn’t take VC funding, so it may not have made the mistakes other media companies have in spending way beyond their means, but LittleThings also operated in anticipation of a big digital video payday. The new space had one studio just for Facebook Live, chasing that latest Facebook initiative, doubling its budget in 2017 to create 13 shows.

Among them were daily talk shows like “The Daily Glow” that aspired to be like “The View” and weekly programs such as “Slice,” “The Hostess Next Door” and “Oh, Baby!”

Some of that production level, ironically, was meant to help LittleThings diversify off Facebook. It started distributing those live shows on OTT platforms like Amazon, Apple TV and Roku. The money would come from advertising sold by those distributors. But the scale of those audiences is still nascent, so the money wasn’t material, Tibbits said.

LittleThings also wasn’t quick enough to diversify its ad revenue. It started to sell direct and branded content to supplement its programmatic base, hiring 30 people, and got some praise from the market.

“I think the algorithm change is 100 percent the reason they are shutting down — they were a great partner, and we always saw success with their campaigns,” said Kerry Perse, U.S. director of social at OMD. Brian Rifkin, co-founder of digital video player company JW Player, which licensed its tech to LittleThings, said the site was good at testing posts for engagement and creating a clean environment on the site to better compete for video dollars. “They started to understand there’s so much revenue in video, it’s better to have a pared-down site,” he said.

But LittleThings faced a lot of competition from other, better-established lifestyle titles. “Their bigger challenge was just a lot a sameness in a product in a very competitive space,” said Steve Carbone, chief digital and investment officer at MediaCom North America. “I had a lot of heart for LittleThings, but the category they were in was fierce with more mature competition.” Last year, its non-programmatic business was just in the single digits as a percentage of total revenue, and then, when LittleThings’ audience declined this year, programmatic revenue fell along with it.

“Every day we’d be having meetings saying, ‘What was Facebook’s algorithm change today, and what can we do?’ It was always an issue,” said Jessica Rotkiewicz, who worked as a news and branded content producer at LittleThings until she was laid off last April. “At the end of the day, the company was relying on another party they couldn’t control.”

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Many publishers are faced with a math problem. All the new “incremental” revenue lines — commerce, licensing, micropayments, events — don’t add up to more than their declining ad businesses as Google and Facebook suck up ad budgets.

“No single stream of alternative revenue will make up for the declines that we’re seeing in advertising,” said Jim Norton, the former chief business officer at Condé Nast. “There’s no silver bullet. You can’t say, ‘If we’re down 10 percent on advertising, we can make it up through subscriptions.’”

That reality likely means more consolidation for legacy publishers. But in an era where publishers need to keep looking for ways to build and monetize direct relationships with their audiences, these new streams will remain vital.

“We’re essentially a storytelling company that uses data and distribution to acquire an audience,” said Pete Spande, the chief revenue officer of Insider Inc. “We’re looking for new businesses that can monetize our core strengths.”

Publishers have talked about diversifying their revenue for years. And some of them, particularly those that have focused on it for a while, have managed to achieve real successes. Meredith-licensed products, for example, accounted for $22 billion in retail sales in 2016, second only to Disney.

The New York Times, after years of effort, turned consumer revenue into its largest revenue source in 2017. Though that was mostly due to sales of digital news subscriptions, the Times has had so much success with Crossword and Cooking subscriptions that it breaks them out in quarterly earnings reports; Cooking and Crossword combined to generate over $14 million in revenue this past year, a 53 percent increase year over year.

The average publisher now lists six different revenue streams, including branded content, subscriptions, events, membership and affiliate commerce as at least “important” to their business, according to a survey the Reuters Institute for the Study of Journalism conducted.

Publishers have broadened their focus out of necessity. Even though the digital advertising market is growing healthily — U.S. revenues rose 22.6 percent in the first half of 2017 to $40.1 billion, according to the Interactive Advertising Bureau — an overwhelming majority of that growth is going to Google and Facebook. The duopoly’s share of global advertising has more than doubled over the past four years, growing from just over 10 percent ($45.6 billion) in 2013 to more than 22 percent ($113.6 billion) in 2017, according to Bloomberg analysis.

Those unfavorable market dynamics have made publishers a lot more open-minded. “There was a time when the publishers said, ‘Unless it’s 20 percent of my revenue, I don’t have time to talk to you,’” said Oliver Roup, the CEO of affiliate commerce tool VigLink, who noted he’s seen an uptick in interest among publishers in the last two years. “That attitude has largely gone away.”

It’s not that publishers will glom onto anything to make a quick buck. “We’re not interested in businesses that don’t have a trajectory to become eight- or nine-figure [revenue sources] very soon,” Spande said.

But finding the discipline, resources and patience to focus on something unfamiliar is difficult. “It’s really hard, if you’re a TV broadcasting company, for example, to focus on this really promising million-dollar business [that] requires more care and feeding than the billion-dollar businesses,” Spande said. “You have to get to the place where you’re able to spin many plates at the same time.”

Often, publishers still end up with advertising as the main thrust of their business, no matter the additional lines. Roup, for example, noted that he is fielding more and more requests from publisher clients asking to combine data about their affiliate commerce conversions into VigLink’s digital marketing platform to create audience segments for advertising.

These new businesses have marketing costs, too. Hearst Digital Media President Troy Young said he wants branded content, commerce and licensing to represent two-thirds of his business. He said it is sometimes difficult at the beginning to remind colleagues that every ad slot used to promote one of those new sorts of businesses comes at the expense of money it could earn from selling that inventory to someone else — often at a higher margin.

“A lot of people see those assets as being freely available,” Young said. “It creates hard conversations internally.”

Transforming from an industry mainly focused on selling ads to a business that sells lots of different things will take time. But it’s a shift publishers need to make.

“It’s a fool’s errand to think you’ll be able to turn the tide on advertising trends,” Norton said. “Everybody has to be committed to alternative streams of revenue, even at the expense of short-term revenue loss. That’s the beam every publisher and media owner needs to balance on.”

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The Outnet’s Facebook messenger chatbot starts off predictably. The tool first asks if you’re looking for wardrobe ideas or customer service help. If you’re looking for ideas, it then asks if you’re shopping for a certain event or category, like vacation outfits or desk-to-dinner, or for more general style inspiration. (If you’re in need of customer service, you’ll be connected to a real person).

Depending on how you answer changes the course of the conversation. If you’re indeed looking for vacation outfits, the prompt will take you out of the chat and to The Outnet’s vacation trends shop on its site. But those shopping with less direction are introduced to The Outnet’s “stylish friends”: editors and influencers who have worked with The Outnet on one of its video series. The bot takes users through a series of more whimsical prompts that range from standard (“Is your style more ‘laid-back L.A.’ or ‘East Coast elegance’?”) to borderline absurd (“Would you ever leave the house without underwear?”).

Each response conjures up a content hook featuring an influencer, like a 15-second video clip that auto-plays in the chat or an excerpt from a Q&A, followed by a prompt to shop a featured brand or category.

“This is a new channel for us to broadcast the content that lives on our site and help customers navigate our assortment,” said said Andres Sosa, evp of sales, marketing and creative at The Outnet.

With the bot, The Outnet wants to make the most of both its in-house content and its Facebook followers, while avoiding expensive paid posts and promoted videos. The competitive landscape for e-commerce marketplaces has made the cost of customer acquisition skyrocket, and as social media marketing shifts from organic to paid reach, pulling in customers through editorial POV-derived inspiration is critical in controlling marketing spend. Bots aren’t free — The Outnet worked with an external partner to build its version over the course of eight months — but they’re easier to maintain than constant promotions. They also act as data vehicles.

“The goal is to trace customer behavior from social media. All of our social channels have sales targets,” said Sosa. “Facebook, for us, has been very profitable. Instagram, we’re getting there. It’s about connecting the dots and making sure every piece of content she sees is engaging, and also has a commercial element attached.”

Chatbots, which have fared better for the beauty industry than fashion, are still in early phases of adoption as brands try to figure out what approach works best. In January, Facebook Messenger disabled its M platform, a virtual personal assistant that powered customer service inquiries with AI. So brands are warming up to content-driven chatbots, as companies like Tommy Hilfiger and Burberry ping those who subscribe with news, like the start of a live-streamed fashion show or new product arrivals. For The Outnet, the first thing it asks those who visit it on Messenger is whether or not they’d like regular style news delivered through the bot.

“The customer service bot has failed to catch on. But it’s not the death knell for the entire channel. What The Outnet has made has potential because it’s scalable, easy to personalize, and can drive customer insight and purchases,” said Maya Mikhailov, the CMO of mobile commerce platform GPShopper. “But the opt-in hurdle still exists.”

With the chatbot, The Outnet plans to track the type of content that drives customers back to the site most frequently. With evergreen content backdrops, it can swap out the shoppable elements, like brands and trends, according to what’s popular or driving the most traffic. The editorial team works with the merchandising team to plan what products will be promoted through the bot, which rolled out in February.

It also put together a 10,000-person panel of “Outnet Insiders,” sourced from a customer pool, to find out what type of articles and videos from The Outnet they would be interested in. From that panel, The Outnet found that its customers care about influencer style, which inspired its three recurring series: “Dropped Pins,” a video series around how to dress for different cities; “Speed Dial,” a video interview series; and “Cheat the Week,” a written week-in-the-life Q&A.

The bot is also a guinea pig for YNAP to see how much stickiness the channel has as a social content vehicle. YNAP, which opened a 500-person tech hub last year, is testing the different ways AI and virtual commerce can make the customer journey easier, and keep customers returning for a more personalized experience.

“Mobile is the future of shopping, so everything we do supports that belief,” said Frederico Marchetti, YNAP’s CEO, during the announcement of the tech hub. “I don’t believe in the super automation of everything, but AI can understand customers on a personal level, and we plan to take advantage of that and understand its potential first.”

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Condé Nast Britain’s fashion title Glamour has revamped its content and commercial strategy to align with its new future as an almost entirely digital brand.

The publisher, which announced its plan last October to produce only two print issues a year, has spent the months since making radical strategic changes, which involved downsizing from 55 people to 40, creating a five-person video team and redefining its editorial direction and distribution.

Moving away from news
Editorial focus is shifting from quick-fire news updates, text-based product and beauty reviews and how-to videos to more in-depth articles that explore grittier subjects the title has previously shied away from, such as plastic surgery, ovarian cancer and prison life for women, according to Deborah Joseph, Glamour UK’s newly appointed chief content officer. The goal: Cultivate a loyal, engaged audience and a strong brand identity on all digital platforms.

Beauty, culture and fashion will remain key editorial areas. Stories that spotlight celebrities trying new products are a news sweet spot for Glamour, and those will remain. But now the goal will be to create in-depth pieces based on them. “We’re not just going for news content but quality content,” Joseph said. “Quick news is a win for driving traffic, but for building loyalty, it’s the intelligent in-depth content that works better.”

The Glamour site and mobile app have been redesigned to reflect its shift away from being a news-based site to one that exudes the brand’s specific tone and style. Previously, the site geared toward prioritizing the latest news, but the new site focuses more on creating visual impact against a millennial pink background.

“It’s smart not to focus on the quick, high-volume disposable content in favor of longer-form [content],” said Charlie Cottrell, head of editorial at social agency We Are Social. “When publishers’ ad revenues have dropped, they have typically gone after volume of pages. But the investment in quality over quantity is encouraging and gives more credibility to their audience.”

Articles and videos that relate to mental health, beauty science and culture will be major areas of focus. Glamour UK will increase the amount of video it creates by five times its previous output, according to the publisher. A new five-person video team has been created, and a new studio has been built within Condé Nast’s London office, to be shared among the titles.

The aim is to create episodic, long-form series that run on Glamour UK’s site and YouTube. Former print feature formats such as “Hey It’s OK,” which later evolved into a podcast, will shift to video. It will either live as long-form series on YouTube or be recut for social platforms like Instagram.

Prioritizing loyalty over reach
Creating episodic video for social platforms to keep people engaged will be a bigger focus, especially for Instagram Stories, which has driven 25 percent of Glamour UK’s referral traffic since Jan. 1, according to the publisher. The team has created two weekly Instagram Stories: “The Glam Drop,” which runs every Monday and features a beauty writer telling readers what products have arrived for her to sample that week, and “The Weekly Edit,” which details editorial highlights of the week.

Instagram is a platform the title has previously underused, according to Camilla Newman, Glamour UK publishing director. “We’re focused on creating these regular episodic franchises to capitalize more on the platform,” she said.

Glamour UK’s Facebook referral traffic has remained steady since the platform’s algorithm change, according to Joseph, but the publisher has altered its strategy for posting to Facebook as a result. Next week, Glamour UK will launch a Facebook Group specifically to cultivate engagement with readers around content. “We want to own the beauty conversation on Facebook,” Joseph said.

Glamour UK can also drive interest in the Facebook Group around its products such as the Glamour Beauty Club, a membership program that sends those that register product samples that brands pay to promote. The club has grown to 100,000 members in the last six months, and the publisher is speaking with an online retail brand about how to tie in e-commerce links so people can purchase its products.

However, Newman stressed that e-commerce will never be a major part of the publisher’s revenue mix. “The idea with the Beauty Club is to create a loyal user base and community, providing them with a full service,” she said.

One of the biggest changes for the publisher has been merging its editorial and commercial teams completely. From now on, editors will pitch content ideas directly to brands and agencies. Sixty percent of Glamour UK’s revenue comes from branded content, but the aim is to direct all editorial resources on growing that now that the team will be almost totally focused on creating digital content.

“A lightbulb has turned on at Condé Nast over the last year, particularly at Vogue,” said Laura Wade, vp of content and innovation for Europe, the Middle East and Africa at GroupM agency Essence. “Their brands have prestige, but when it comes to who we work with for branded content, there are many hungry digital players that have long made their editorial teams available to us. It’s like they have understood that there needs to be more than that [brand prestige and heritage] and be more willing to try out new formats with us.”

Images courtesy of Condé Nast

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