Less BS, More Facts, Some Opinions
Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Amazon Ad Revenue Accelerates Revenue in Amazon’s “Other” category grew 132% YoY to $2 billion this quarter, with advertising services making up a “majority” of that segment, CFO Brian Olsavsky said during the company’s earnings call Thursday. So it’s safe to say Amazon’s ad… Continue reading »
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Verdens Gang, the Schibsted-owned Norwegian tabloid, has added 20,000 subscribers since January 2017 by putting documentaries behind the paywall, bringing its total subscriber count to nearly 150,000.
VG’s premium subscription, VG+, which also offers exclusive articles and long reads, has around 400 documentaries that the tabloid’s video spinoff, VGTV, has acquired over the last five years. These include global award winners like “Searching for Sugar Man,” “Amy” and “Catfish.” An annual subscription to VG+ costs 695 Norwegian kroner a year ($87).
The publisher uses teasers to its premium subscription on the tabloid homepage. Last year, ads for “Magnus,” a film about Norwegian chess prodigy Magnus Carlsen, led to nearly 1,500 new subscribers. VG crunches user analytics to help determine how long to promote content, its placement, what content has a higher conversion to new subscribers or a higher churn rate, and engagement metrics like session length and time spent. Promotions for “Love and Sex in an Age of Pornography” and “Emma Wants to Live” both converted roughly 1,200 subscribers each.
The publisher began acquiring Norwegian rights shortly after Netflix launched in Norway, said Andreas Fay, head of acquisition at VGTV. But it’s not like the Scandinavian giant to shy away from competing with the big U.S. tech platforms. Besides Netflix, VG+ documentaries are up against Norway’s public service broadcaster, NRK, which reaches 61 percent of Norway’s population of 5 million across TV and radio, according to Reuters Institute Digital News Report.
“We saw the opportunity to take the No. 1 position of expertise as the main provider of docs,” said Fay. VGTV, which consists of roughly 65 people, experimented for years on different genres, but decided to focus on documentaries as they are a better fit for a news brand. Fay and another staffer work on acquiring documentaries, and two people work on producing VGTV’s in-house documentaries, collaborating with the VG editorial team and external partners.
VG found documentaries help with churn and frequency. The early indication, according to Fay, is that those who sign up through documentary promotions are less likely to unsubscribe than those signing up through nondocumentary promotions. Subscriber surveys backed this up.
“Documentaries definitely have some commercial value, but it also has the value of integrity,” said Fay. “We’re offering a better experience for the users in multiple formats. They work on different levels, but it’s not necessarily a cash cow, and in my opinion, it’s not meant to be.”
Norway is the world leader in getting people to pay for content, according to the Reuters Institute Digital News Report, with 40 percent of people in Norway paying for video content like Netflix in the last year. In the U.K., this figure is closer to 25 percent.
When free and ad-supported, VGTV’s documentaries averaged around 500,000 monthly started streams. While the number of started streams has dropped significantly, said Fay, the number of completed views rose.
“We have a lot of potential in the way we present content to existing users and new potential customers on all platforms,” said Fay. “We’re on Apple TV, but the experience is not yet seamless. That’s what we’re focusing on these days.”
Image: Courtesy of VGTV via Facebook.
The post How Schibsted’s Norwegian tabloid used documentaries to add 20,000 subscribers appeared first on Digiday.
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Amid all the news of Facebook’s scandals, Instagram has remained relatively unscathed. In the wake of the brouhaha over Cambridge Analytica, advertisers like Mozilla declared they were pausing spend on Facebook. Elon Musk deleted his companies’ Facebook Pages. #DeleteFacebook trended. Congress hauled Facebook CEO Mark Zuckerberg to hearings. But Instagram, an app with 800 million monthly active users (as of September) that pulled in $4.3 billion in ad revenue, according to eMarketer, was barely mentioned. The companies work similarly and share data — and Instagram itself ran 150 ads that were part of the Russian disinformation campaign — but Instagram is not seen as an enemy.
That is exactly what Facebook wants. Instagram has benefited from people often seeing it as separate from Facebook, while the app hasn’t worn out its welcome with as many people as Facebook.
“You cut slack for people when you like them. Facebook has always been the thing you love to hate. Facebook became a household utility, and people are like, ‘Yeah I don’t use Facebook,’ but Instagram is a place where you highly curate your life,” said Ian Wishingrad, founder and creative director at agency BigEyedWish.
Consumers see the obvious differences between the apps as products, but distaste with Facebook doesn’t cause the same ire toward Instagram despite the same supreme leader and back-end infrastructure. Only a “handful” of Facebook advertisers paused spending, said Facebook Chief Operating Officer Sheryl Sandberg during the company’s April 25 earnings call. Facebook and Instagram are considered connected and separate depending on the company and the marketing goal.
“From operational mechanics, [Facebook and Instagram are] considered a single platform. For marketing purposes, it is considered separately in the same way you’d evaluate any channel/media tactical mix,” said Jessica Richards, managing director of North America at Havas Media-owned agency Socialyse.
Facebook and Instagram share data, but the data privacy scare stemming from Cambridge Analytica did not ignite a #DeleteInstagram movement. Musk decided to delete Tesla’s and SpaceX’s Facebook Pages, but as he tweeted, Instagram’s “probably ok imo, so long as it stays fairly independent.” Indeed, Musk is an active user of Instagram.
“There’s a perception that Facebook has been burning in ashes, but that Instagram is untouchable,” said Eric Schiffer, CEO of ReputationManagementConsultants.com and DigitalMarketing.com. “But I think that’s the public disconnect and even Congress’s disconnect. All it requires is one high-profile incident.”
As researcher Jonathan Albright wrote in his analysis of Russia-linked manipulation on Instagram, the service is larger (by monthly active users) than Twitter and Snapchat combined. Yet Instagram was not the brunt of Congress’ questioning this month, and advertisers did not tout decisions to pause spend on the app.
Facebook and Instagram may both be considered social networks, but the experiences are different. At the most basic level, Instagram is limited to photos and videos, while Facebook is filled with news articles and other links. On Facebook, people can easily share other’s posts for others to see in the news feed, while on Instagram, the feed is still (mostly) content directly from people that users actively choose to follow. Facebook encourages reactions, while Instagram is limited to the like. Pictures may say a lot, but how we can react to them is actually quite limited, and to the user, there’s something pure in simplicity.
“We like, love, hate, laugh at Facebook posts now — very specific emotions. On Instagram, we just like a picture. We don’t play ‘games’ or take ‘quizzes’ on Instagram,” said Janet Johnson, a social media researcher and author.
As people choose to share less on Facebook’s news feed but keep posting to Instagram Stories, Zuckerberg’s strategy to buy rivals before they gain too much power themselves has paid off. While he didn’t manage to buy out Snap CEO Evan Spiegel, Zuckerberg has Instagram CEO Kevin Systrom to make sure his company doesn’t lose teens. Facebook also bought apps MSQRD and Tbh amid their rise to popularity. Yet Instagram has kept its individual identity. Integrations in the back end for developers and advertisers keep the money flowing. But to consumers, Instagram is a brand that isn’t flooded with fake news or grandparents’ love reactions. And that benefits Facebook.
“I think Facebook will eventually become the layer that powers the generational products people love,” said Eric Toda, director of marketing at Gap, who previously worked at Facebook on the global marketing solutions team. “Everyone should stop comparing them to ‘what’s the hot app now.’ They’ve evolved past that. I see Facebook as a holding company similar to Time Warner, Oracle or SAP. They’ll be super successful, but more of a lifeblood than a shiny face themselves.”
The post Why Instagram managed to remain unscathed amid Facebook scandals appeared first on Digiday.
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Data privacy and getting compliant in time for the General Data Protection Regulation was a hotly debated topic for marketers attending the Digiday Programmatic Marketing Summit Europe in Estoril, Portugal, this week.
With less than a month to go until the deadline for GDPR enforcement, uncertainty around who in the supply chain will be held responsible should regulators decide to prosecute remains top of mind. We’ve collected some of the main concerns that attendees talked about throughout the week — under condition of anonymity — to give a flavor of what execs across the digital ad industry are truly thinking.
Advertisers with GDPR jitters are a risk to everyone
“We’re hearing brands saying they may just pause spend to avoid risk.”
“They [advertisers] must understand that simply withdrawing spending is going to hurt publishers, and that means hurting the ecosystem as a whole.”
“The biggest risk at the heart of most clients’ minds is reputation risk under the GDPR.”
“I don’t think the GDPR has been invented to screw brands and ad tech companies over. It has been devised to protect private citizens. But they’re [regulators] also not interested in protecting brands.”
GDPR preparations
“There are some third-party data providers that have told me they don’t know what’s going to happen, so they’ve done nothing. That’s not good.”
“We’re a U.S. publisher and thought this wouldn’t affect us until about two weeks ago, and since then, there’s been a massive scramble.”
“A recent audit on a retailer’s site showed that 75 percent of the pixels on that retailer’s site were from external [ad tech] companies.”
“For those banking on legitimate interest, that could be the real Achilles’ heel of all this.”
“I heard an ad tech vendor say it had spent £8 million [$11 million] on getting its business GDPR-compliant, and it still [wasn’t] sure if they’d achieved it.”
“Showing you’re doing it [attempting to be compliant] is the best defense against [regulators] trying to attack you.”
“If you’re a brand [advertiser with a website], you’re a publisher, and therefore a data controller, and so liable in the same way as a [traditional] publisher.”
“Under the GDPR, the value of first-party data will go though the roof.”
Uncertainty about who is liable
“If you’re using a third-party [ad tech] provider that [says] they’re GDPR compliant, how do you then protect yourself against liability if you find out later on that they actually haven’t been compliant?”
“The IAB framework doesn’t protect publishers. As far as we can tell, we take all the risk.”
“I have no real idea what my DPO [data protection officer] is doing, and she has no idea what I’m doing, which makes me a little concerned.”
“I fear the savvy students, who by right under GDPR can claim €150 ($182) payment from us if they find their data has been used without permission.”
Download Digiday’s guide to GDPR, including research, analysis, checklists and more.
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Data scandals like Facebook-Cambridge Analytica and the repeal of net neutrality are having a side effect: More people are taking steps to mask their internet browsing through virtual private network, or VPN, technology.
Once the preserve of the tinfoil hat crowds, VPN makers now advertise on TV and elsewhere with a simple message: Don’t be tracked online. It’s apparently resonating: Where data scandals were reported, VPN sales spiked in the U.S., nearly doubling in some instances, according to a new report from analytics company Edison Trends. The Edison VPN Report analyzed the timing of subscription purchases of VPN services, including Avast, Norton and NordVPN, across Google Play and the Amazon Appstore.
The report found that in the two weeks after Dec. 14, when the Federal Communications Commission voted to repeal net neutrality, paid subscriptions to VPNs on Google Play more than doubled, and subscriptions peaked in the weeks after Facebook’s data leak. The report found a similar outcome from analyzing VPN purchases on Amazon’s Appstore.
VPN use in North America is far from mainstream. Only 17 percent of the North American population uses a VPN, according to a GlobalWebIndex December 2017 survey of 89,029 internet users across 40 countries. The larger issue lies with marketers who are trying to target people internationally. The same report found that 25 percent of internet users globally used a VPN in the past month, and countries like Indonesia, India, Turkey and China all have 30 percent or more of their populations using VPNs.
“Part of the concern with the net neutrality issue is that [internet service providers] can now sell your data to advertising agencies,” said William McCormick, founder of marketing and public relations agency Pure Knot. “People understand that when they visit a website of their choice, they will get ads. What will really annoy consumers is when their data is being sold by a third party they didn’t consent to.”
The growing number of VPN downloads poses a problem to marketers when it comes to localized, IP-based targeting, said Hetal Pandya, co-founder of Edison Trends. Because a VPN service essentially gives a user an alternative ISP address, the original ISP address is unable to track the websites a user visits.
Sometimes free VPN services will sell this data to advertisers anyway, but VPNs that do charge users a fee usually encrypt a user’s data, making it so an ISP can only see that a user is connected to a VPN server.
“A VPN could say someone is in England when they are in the U.S., so local ads won’t be effective, which means the digital marketers’ results will be worse,” said Pandya.
The marketers that will not be affected from the rise of VPNs are those that rely on first-party cookie data from website visits, said Natasha Morgan, vp of marketing at data management company Umbel. “As VPN use rises,” said Morgan, “marketers using IP-based targeting through an ad network may have to find other approaches if they see a dip in conversions.”
But privacy isn’t the only reason why a user might download a VPN. In fact, the GlobalWebIndex study also found that 50 percent of VPN users downloaded one to access better entertainment content, while 31 percent did so to remain anonymous while browsing the internet. Either way, VPN companies are capitalizing on events like Facebook’s data scandal, hoping their promise of protecting user data will prompt more users to download VPNs in the wake of the platform’s mishaps.
NordVPN has posted and shared articles published to its site like “How to stop Facebook from sharing your info with third-party apps.” VPN.com, a VPN comparison site, is one company that is still leveraging the #DeleteFacebook hashtag that trended on social media around the time of the Facebook hearings. On April 18, about a week after CEO Mark Zuckerberg testified before Congress about the Facebook- Cambridge Analytica scandal, VPN.com started protests in Austin, Texas; Atlanta; San Francisco; and Washington, D.C. with 24-foot trucks sporting the hashtags #DeleteFacebook and #OurPrivacyMatters.
Our #DeleteFacebook protests are live in Washington DC, San Francisco, Atlanta, and Austin. We believe privacy is a civil right and are dedicated to fighting for you. Please visit https://t.co/xJjbGfHBCM or DM for more details on how to get involved. pic.twitter.com/sb3KOTwbD7
— VPN.com (@theofficialvpn) April 20, 2018
These VPN companies’ efforts might be working. Across social media, conversations around VPNs spiked April 9, the day Facebook alerted users of its data misuse. Mentions of “VPN” and “Virtual Private Network” skyrocketed to above 50,000, according to Brandwatch data.
“VPNs are heavily marketed as the answer to data security, and the public is clearly responding to that,” said Morgan. “With data breaches like Equifax and data misuse like Cambridge Analytica, people may feel like they don’t have full control of their data online and, as we see the effects of net neutrality’s repeal, and more and more people spend time online to consume content, VPN use will not slow down.”
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The dream still isn’t dead.
After a recent downswing in the video market for TV-quality short-form video series, there is renewed optimism among video makers as the top streaming giants experiment with this type of content.
Netflix, for instance, announced this week that it will air a new documentary series from BuzzFeed News called “Follow This,” which will follow BuzzFeed News journalists as they report interesting stories. The show will span 20 episodes, with each episode running for roughly 15 minutes. Amazon, too, is venturing into short-form video. Last fall, it commissioned three original digital shorts from Funny Or Die through its Prime Video Direct program, which allows video creators of all types — including those that specialize in short form — to upload videos to the Prime platform. This was the first time Amazon funded any original and exclusive content through the Prime Video Direct program. Hulu, meanwhile, hasn’t picked up any short-form video series, but is exploring the format as part of its original content strategy, a source said.
It’s a breath of fresh air for an industry where multiple players have come in, hoping to create a platform for premium short-form programming, only to find no audience interest in such a product. Now, video makers ranging from digital studios to publishers see an opportunity to sell and create short-form shows for the big streaming giants. But that doesn’t mean Netflix, Amazon and Hulu will start buying high-end short-form video programming left and right, and some producers caution to treat these experiments as just that: experiments.
(Definitions for short-form, mid-form and long-form video have always been loose, but for the purpose of this piece, short form is defined as anything less than the traditional 22 minutes that a half-hour linear TV show comprises.)
‘The big three’ are buying in, cautiously
Netflix is already offering new seasons of Jerry Seinfeld’s “Comedians in Cars Getting Coffee,” which originally aired on Sony’s ad-supported streaming platform Crackle. The company is also reportedly purchasing more mini stand-up specials, in addition to the half-hour and hourlong specials the company continues to buy.
In a statement, a Netflix spokesperson said, “We offer many different types of storytelling formats in varying lengths for our members — feature films, talk shows, stand-up specials, drama series, etc. The goal is to give choice and flexibility depending on what they want to watch.”
The BuzzFeed News show will likely premiere in July with a handful of episodes, followed by a new episode every week, said Shani Hilton, head of U.S. news at BuzzFeed. BuzzFeed News will produce the show with a team of 17 freelance staffers working underneath showrunner and executive producer Jessica Harrop. (BuzzFeed News editorial staffers including Hilton and Editor-in-Chief Ben Smith will provide support.) Netflix is paying BuzzFeed News to make the show, but Hilton declined to comment on whether Netflix has total ownership over the show — which is typical for Netflix’s deal terms for original series. The partnership came about as BuzzFeed News explored new types of shows and formats to experiment with, and Smith reached out to Netflix, Hilton said.
In addition to the three original Funny Or Die shorts, which range from 11 to 13 minutes, Amazon’s Prime Video Direct program offers more than 100 short films from film festivals, including the Tribeca Film Festival and the Toronto International Film Festival. Digital publishers such as Tastemade, Machinima and CollegeHumor distribute short-form programming on Amazon, and “The Bay,” an indie digital drama series licensed by Prime Video Direct, has performed very well on the Prime video platform, said Eric Orme, gm of Prime Video Direct at Amazon.
“Our customers have told us that they love short-form content — whether it be premium short-form titles or festival-quality short films,” said Orme, in a statement. “Prime Video Direct offers an opportunity for these creators to provide Prime members around the world new and compelling content in areas that go beyond traditional movies and TV.”
Mobile consumption is partially responsible for the interest
Netflix has historically been tight-lipped about viewership data for its programming. Recently, the company revealed that close to 25 percent of streaming globally happens over mobile networks, and in some international markets such as Finland, mobile consumption can account for 75 percent of total streaming at parts of the day. Netflix also offers offline viewing, which allows users to download movies and TV shows to watch when they don’t have access to Wi-Fi.
In this context, it makes sense that Netflix would consider programming for smaller screens. It even introduced a new feature within its mobile app that allows users to screen 30-second movie and TV show trailers in a vertical video format.
Funny Or Die has become one of the most popular content providers within the Prime Video Direct program, said Orme. With the momentum it sees with short-form content, Amazon’s “excited that we can make it available on all devices, especially through our mobile app,” he added.
“For the [subscription video streaming] giants, short-form content has historically been a low priority because mobile was a low priority. Yes, consumers watched Netflix shows on mobile devices, but that was only a small fraction of the audience,” said Peter Csathy, founder of media advisory firm Creatv Media. “But mobile has always been the next great frontier for the giants, and it also presents an opportunity for them to accelerate growth amidst frenetic competition, while also expanding to younger audiences that are accustomed to watching short-form video on their phones.”
‘Premium’ short form is hoping for a comeback
The market for short-form series has struggled in the past year, enlivened only by Facebook Watch and some TV networks seeking original digital content for their apps. Verizon’s Go90, which according to some insider estimates has spent close to $1 billion over the years on content, is likely on its way out and pivoting distribution to Tumblr. And Comcast’s Watchable and Vessel are among the video platforms that hoped to make a dent in the premium short-form video market, only to fizzle out.
“Go90 and Vessel had a ton of challenges: Those were platform plays, which require a lot of things to be successful,” said Reza Izad, CEO of Studio71. “And when you have scaled incumbents, both of which control most of the traffic on the internet, it creates unfair advantages.”
The hope is that since Netflix, Amazon and Hulu are already huge platforms, they can support short form in a way that Go90 and others couldn’t. The big streaming platforms don’t need short form to survive and would only benefit by offering more programming that subscribers might enjoy — regardless of length.
For producers that want to make high-end short-form series — with budgets in the $10,000 to $20,000 per minute range, rather than cheap, influencer-driven web video fare that can typically be done for $1,000 to $2,500 per minute — there has been little hope. There is a ton of interest in Jeffrey Katzenberg’s new venture WndrCo, which is looking to build a mobile video streaming platform anchored by expensive original series, but outside of that, the only real opportunity has been Watch. But even Facebook is seeking shows with longer episodes as it tries to grow time spent in its fledgling video-viewing section.
“Story is story,” said TJ Barrack, co-founder of Adaptive Studios. “For [the streaming giants], short form is just another content type to tell great stories, especially as they try to go after mobile audiences. But there hasn’t been yet a show that does to short form what ‘Serial’ did to podcasting.”
The hope is that by experimenting with shorter formats, while maintaining the level of production quality that viewers are used to on Netflix, Amazon and Hulu, the market for this type of premium short form will open back up.
Caution, as always, is key
There’s no guarantee that the premium short-form market will materialize in the way that video makers hope. Yes, the top streaming platforms are interested in shorter formats, but it’s unclear how much value the big streaming giants are placing on short form, especially relative to the amount of money they continue to spend on big-budget TV shows and movies.
“I haven’t heard a mandate from anybody that they’re looking for premium short form — except for WndrCo,” said a studio source who has sold shows to Netflix, Amazon and linear TV. “Everyone in the digital industry is salivating because the BuzzFeed News story came out and now thinks there’s finally a market for [these shows]. There isn’t. BuzzFeed’s show is going to be as long as it needs to be because it’s Netflix, and Netflix doesn’t have time constraints.”
Others argue that it’s inevitable that Netflix, Amazon and Hulu will continue to seek more and more shorter — and cheaper — original content.
“We’re in this arms race between the big three, who are spending $16 billion or so on content this year — that’s unsustainable in the long run,” said Perrin Chiles, co-founder of Adaptive Studios. “The reason they’re testing the [premium short-form] format is that you’re still looking at a premium level of storytelling, but at a lot more affordable price.”
Regardless, video makers should remain cautious about deals they pursue with big streaming giants, especially as these buyers seek total ownership or long licenses over the programming, said Shane Rahmani, evp and gm of Electus Digital, which owns CollegeHumor. This could become an even bigger issue if, say, Netflix decides it no longer wants to experiment with shorter programming two years after they buy a show, but maintains an exclusive license to the show or format for another seven to eight years.
“There should be a level of wariness with any new opportunity, but the specific thing I would be concerned about, first and foremost, is IP ownership,” said Rahmani. “If you’re saying goodbye to a format that you love and [it] has a lot of value, just make sure you’re getting commensurate value for that format, and be smart about the global opportunity that you might be losing out on by going to a streaming provider.”
The post Why Netflix and Amazon are experimenting with short-form programming appeared first on Digiday.
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Apple wants publishers to distribute higher-quality videos on Apple News. But publishers want to see higher revenue from those videos. Apple has told publishers it knows the money isn’t yet there, and it has begun to show them how the company hopes to raise their videos’ profiles and revenue prospects.
Last month, Apple added a Top Videos section to the app’s main For You tab to make the 60 million people in the U.S. that use Apple News every month more aware of publishers’ videos. And it has begun inserting skippable interstitial video ads between these videos, which publishers hope will generate money they’re not getting from the videos they distribute on Apple News.
Apple is keeping 50 percent of the revenue from those ads and divvying up the remaining 50 percent among the publishers whose videos appear in the feed when an ad runs, according to three publishers. Based on a document published to Apple’s developer site and dated “April 2018,” the interstitial video ads are currently “only available as Apple inventory.” An Apple spokesperson did not respond to a request for comment by press time.
The Top Videos section within Apple News mirrors the Top Videos section that Apple added last fall to the app’s widget that people can access by swiping left on their iPhone home screen. The Apple News editorial team selects the videos for both sections, and they play in sequence. Videos featured in these sections outperform the average video on Apple News, accounting for a majority of the views for some publishers, according to two publishers. However, in the experience of one of those publishers, people are quick to skip through these videos, which can have median watch times of less than 20 seconds.
Publishers are interested to see if the in-app Top Videos section will lead to longer watch times, but they said it’s too early to know and will be hard to determine for sure; Apple doesn’t break out the two placements separately from one another in publishers’ measurement dashboards. Besides, there’s another reason that video watch times would increase.
The Apple News team is pushing for longer, more original videos from publishers, coinciding with the additions of the in-app Top Videos section and interstitial video ads. To date, publishers typically distribute the same short, sound-optional videos on Apple News that they post on their own properties as well as platforms like Facebook and Twitter. If they do tailor those videos, that usually means making sure a video features text for audio-averse viewers and that it is edited into a square or vertical format to be eligible for the Top Videos sections. But since adding the in-app Top Videos section in March, Apple has solicited longer videos that exceed two minutes.
“They’re trying to find ways to put more premium, evergreen content in the experience,” said a publisher.
Apple is seeking more serialized programming for its news app. For example, Apple has run what are described as “takeovers” within the Top Videos section, in which all the videos relate to a specific topic and can even be from a single publisher. Videos within these takeovers tend to receive a higher viewership than the standalone videos typically included in the section, according to two publishers. Another example of Apple’s interest in higher-quality programming: Last week, BuzzFeed News premiered the first three episodes of its docuseries “Future History: 1968” on Apple News.
However, for publishers to invest more in the videos they distribute on Apple News, Apple needs to show they’ll receive a return on that investment. So far it hasn’t, and Apple knows it.
“At this point, the money is not there,” said one publisher.
NBCUniversal has sold ad inventory for Apple News for the past year. Trevor Fellows, evp of digital sales and strategy at NBCU, said it’s taken time for that effort, announced in late 2016, to ramp up, but that ad sales in the app should be “significant” this year. He acknowledged that the amount of revenue each publisher sees will vary depending on how much content they distribute and traffic they get on the app, and Apple’s cut will also influence it.
“2017 was a startup year,” he said. “We’re seeing significant ad revenue this year.”
While big money may not be there yet, publishers aren’t giving up on it, thanks in part to Apple’s transparency about the issue and the size of the app’s audience. “They’ve been patient with us, and we’re patient with them. A lot of people have iPhones,” said one of the publishers. But that patience won’t last forever, particularly as publishers see the money they could be making.
Publishers receive 70 percent of the revenue from the pre-roll ads that Apple sells against their videos through NBCUniversal in the U.S. and The Telegraph in the U.K. But given that the Apple News audience skews toward affluent people in their mid-20s to mid-40s, publishers would prefer to sell that inventory on their own. And while they can, Apple hasn’t made it easy to do so. Apple has begun letting more publishers use Google’s DoubleClick for Publishers to serve ads against their Apple News inventory, but limits on targeting and third-party verification impose “a major burden,” said one publisher. As a result, publishers are left for now to largely rely on the revenue share and to approach Apple News as more of a marketing play than a business driver.
The post Apple News ramps up its video push while publishers wait on revenue appeared first on Digiday.
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Programmatic advertising is changing too fast for many marketers, who are being pushed out of their comfort zones into an ad tech landscape they know little about.
Marketers at the Digiday Programmatic Marketing Summit Europe in Estoril, Portugal, privately confessed to finding ad tech a baffling environment that would require more time to tame than it’s worth.
“We shouldn’t rely on our technology partners to fix all our problems with advertising, but we do because media is still a small part of what we do versus our other responsibilities,” said one marketer.
The challenge, said Gawain Owen, Jellyfish’s digital strategy director, is in thinking about the technologies not just as a way to reduce display spend. Instead, Owen said marketers need to dig into the strategies their buying vendors use.
“Very rarely do brands understand what an SSP is,” said Owen, who previously handled media budgets at Diageo and Nestle. “That’s the point in the supply chain where I [as an advertiser] invested a lot of my time to understand. … I would ask publishers: Which supply-side platform would you like me to me to use, and why do you want me to use that particular one? Was it due to costs, or is that due to operational efficiency? If it was due to costs, then we would split the benefits with the publisher.”
Even for a more progressive advertiser like Duracell, pushing out from its comfort zone further into the supply chain is hard, said Jon Ones, head of digital for Duracell’s international markets.
“We trust our technology partners to choose our SSPs and negotiate the right deals with them for us,” he said. “It’s not something we’re focused on [in-housing] today because what we’re already doing [with the DSP] is bringing us so much already.”
Some advertisers like Siemens have brought programmatic talent in-house to make those calls after growing frustrated with the lack of help received from their agencies. As one agency executive during a closed-door town hall discussion said, “I’ve been at a network agency when a client has said they don’t want to use a certain partner, and the agency has countered with, ‘You are using that partner.’”
A marketer picked up on the point and urged agencies to help tackle advertising’s problems with technology. “It is really frustrating that when you ask a question [about transparency in ad tech], you get a bunch of spreadsheets,” this marketer said. “We need the transparency because we’re under pressure from different departments to look at where our money is going. It is no longer the case of just having a black hole we can throw money at in the hope it sticks somewhere.”
The post Marketers still shy away from venturing too deeply into ad tech appeared first on Digiday.
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For the luxury industry, blockchain technology can provide an invaluable assurance of trust.
In luxury, an industry in which customers want to feel confident about where their items are made, their authenticity and their backgrounds, the blockchain can act as an official keeper of that information along every step of a product’s journey, verifying whether or not something is what the brand claims it is. At least that’s the promise, anyway.
“The word ‘blockchain’ is just the latest bright, shiny thing,” said Jason Kelley, the gm of blockchain services at IBM. “Put the word aside and think about the outcomes: The customer wants to make sure they can have confidence in a brand, in an industry, in what they just purchased, especially when something is high value. They want to make sure they can trust it.”
Blockchain is an open-source distributed ledger that, for consumer products, can compile and track every movement and piece of information related to a specific item as it travels through the supply chain, validating each point of the journey from sourcing to manufacturing, to retailer, to consumer. Once submitted to the blockchain, no information can be changed or removed.
“Blockchain acts as the gatekeeper in the emerging trust economy, where the supply chain plays a central role. The efficiency of a supply chain relies on trust between different stakeholders, and it can assist in increasing the traceability and reliability of information along the chain,” Patrick Laurent, a partner and technology leader at Deloitte, wrote in the company’s 2018 report on blockchain and the Internet of Things.
The problem, of course, is that blockchain requires open-source cooperation among participants to ensure that every point of interaction along the supply chain, from source to retailer, is accounted for. The luxury industry isn’t known for freely sharing secrets among competitors. But through technology like IBM’s new TrustChain platform, which uses blockchain technology to create a network of information surrounding product history, the fine jewelry industry is getting on board with the idea of a trusted database. As the network gets off the ground, it could serve as a template for other facets of the luxury industry to open up.
The power of authentication
What blockchain can bring to an industry like the diamond, gold and fine jewelry industry is a permanent digital record. The supply chain is often a complicated web of different players, and typically, records, transactions and data are kept siloed among each point of the supply chain, like the mine, the refiner, the manufacturer and the retailer.
“There’s so much power in data that you know is absolutely correct, especially in this industry,” said Kelley. “You can’t have one brand saying, ‘We’re going to fight counterfeits.’ It’s not going to work. In a blockchain network, all points are now connected, different companies are sharing their data, and that increases the level of transparency to be traced and tracked. You can then, to the consumer, give context and transparency.”
As the luxury industry begins to put emphasis on sustainable manufacturing and sourcing practices by eliminating fur from collections, opening up vertically integrated fabric labs, suppliers and manufacturers, and cleaning up their supply chains, the blockchain creates a level of accountability for practices that have been historically tricky to prove. Blockchain is at the core of startup investments at luxury accelerators, as well, demonstrating an interest but lack of internal capabilities.
“There is huge potential for luxury on the blockchain,” said Julie Rodgers Vargas, the director of digital solutions at Avery Dennison. “People buy and discard clothing from H&M without thinking much about where it’s from. When you’re spending thousands of dollars on a Birkin bag, that changes. You could learn where each piece was made, what it’s made from, who designed it and when it was made. That really matters in a luxury purchase.”
According to Kelley, as the TrustChain onboards its first official partners in the fine jewelry industry, including Asahi Refiner, Helzberg Diamonds and the Richline Group, having a detailed ledger of an item’s history on the blockchain isn’t going to be the first factor that convinces a customer to make a purchase — that will always be price and style. But transparency could be the tiebreaker.
Adopting the digital handshake
Mark Hanna, CMO of the Richline Group, attempted to get every company in the group, which owns diamond and gold manufacturers and marketers, to log its records in a cross-company server in 2006. Called The String, the product program would transparently track every action in the supply chain process in an internal database. The goal was to have a universal record that held individual diamonds’ paths from mine to manufacturer to retailer. It didn’t really work.
“It was premature for the retail world; it made them nervous, so it wasn’t a commercial success,” said Hanna. “We didn’t push it out in a big way, either, because we didn’t want to be accused of greenwashing, but our attempts at transparency were sincere.”
Hanna helped coordinate Richline Group’s participation in IBM’s TrustChain after recognizing that blockchain in fine jewelry had to be an industry-wide effort, considering how many different hands touch these pieces at different parts of the journey. For that, Hanna said blockchain’s potential in the industry extends beyond building customer trust. For everyone involved, it makes the process more efficient.
“Our goal was to not be a paper-based company, but to be a digital, data-based company across this entire chain. The benefits of this are far greater than showing your customer you sell a trusted product,” said Hanna. “We can create a greater level of efficiency because of the digital handshake. It’s opening up a chain of communication that couldn’t have happened before.”
On the customer end, that internal efficiency supports external transparency. Hanna said that Richline’s retail partners, which include major jewelry retailers like Helzberg Diamonds, can pull up an engagement ring’s full history of authenticated information, including the diamond’s composition and its sourcing. There’s also a customer-facing web database that can be used by customers to explore product history.
“The younger customer does much more research around each purchase, and that research should and will include the integrity and the ethics of each company they’re supporting,” said Hanna. “You can’t overestimate it — in 10 years, documenting sustainable practices for the consumer will be a requirement.”
Creating a template
While the TrustChain’s first execution is centered on the fine jewelry industry, Kelley said that it can be applied to any industry with a complex supply chain. The next step is convincing companies that the payoff is worth the upfront investment.
“Getting started is the obstacle. This is a new business model and new is not easy. The outcome is high when you think about it: It provides an increased level of trust to an industry where trust is critical,” said Kelley. “But it’s not easy to bring the players across an industry together. Getting started in that process is the biggest hurdle.”
Companies like Burberry, LVMH and Farfetch have started investing in blockchain technology, but getting it off the ground is genuinely a team effort. Clashing competitors will be the hardest hurdle to overcome.
“Even in luxury, we’ll start to see different companies overcome their hesitations about ‘open-source,’ said Laurent. “It’s happening in sustainability. This is the natural next step.”
The post The gatekeeper to trust: How blockchain could infiltrate luxury appeared first on Digiday.
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