Data-Labor-Technology

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.”

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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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If any brands haven’t already shifted their Facebook strategy entirely to paid, then they may have to soon.

The social network is changing its news feed to prioritize what friends and family share, which will reduce the amount of content that users see from brands and publishers.

Agencies believe brands will have to spend more on paid ads on Facebook in order to get the same number of views — further lining Facebook’s pockets. This is just the “final nail in the existing coffin” of organic reach, said Doug Baker, director of strategic services at digital agency AnalogFolk.

Facebook’s ad rates have risen by 35 percent in the last quarter alone. Agencies have noticed a slow decline in organic reach on Facebook for some time. Digital agency Jellyfish said organic reach on Facebook has already dropped by up to 2 percent across most European clients. John Hegeman, Facebook’s vp of product management, said in a statement on the news feed update that advertising on the social network will be “unaffected,” but agencies disagree.

Far too many brands pump bland broadcast comms into mass-reach media buys on Facebook and spam millions of news feeds, said Mobbie Nazir, chief strategy officer at agency We Are Social. Now, there will be far more onus on planning Facebook campaigns that go deeper into media planning, campaign execution and optimization, and reporting on various metrics, she added.

“We all need to become better media planners, said Greg Allum, head of social at Jellyfish. There’s a “fundamental shift” in the roles of traditional social media marketers encapsulated in the news feed update, he added. Not only “do you have to understand brand and content,” marketers also require a key understanding of how to plan media campaigns on social.

For many brands, the bigger challenge will emerge from Facebook’s parallel war on low-quality brand content, with the platform’s December announcement that it was deprioritizing “engagement bait.” While agencies accept it will be difficult for most brands to be consistently “meaningful” — particularly when competing with treasured moments with friends and family — there is an opportunity to drive higher creative standards. “Those brands that look to add value to people’s lives and invest in high-quality, original content will have the most sustained success,” Baker said.

The risk could come once brands find loopholes in the algorithm. “I can see brands that tap into authentic conversations with a credible point of view will do well,” said Chris Pearce, the CEO at digital agency TMW Unlimited, “whereas others will be tempted to be increasingly controversial or polarizing in order to stimulate conversation.”

Another risk is if posts are boosted. Ad rankings on Facebook are not affected by the news feed’s overhaul. But as Kevin Chan, the integrated performance director at iProspect, pointed out, if a boosted page post is getting less organic reach due to these changes, then that might impact the auction. Engagement is a “very small” part of ad ranking on the social network, which relies on many other data points to determine what ads people see to ensure relevancy and value, he said.

It seems like Facebook is returning to being a social network rather than a news organization. In the enduring debate on Facebook’s impact on post-truth politics, the social network has continually denied it is a media company. This algorithm change looks like a step to confirm that, returning to the days of wall posts and status updates.

In terms of how this change will be pitched to brands, Edie Greaves, senior strategist at digital agency Possible, believes there will be a continuation of the stance from both Facebook and Snapchat that brands are “partners,” not “advertisers.”

Greaves believes Facebook will begin offering brands new ways to communicate with people, but they will have to up their spend to get into the news feed. Perhaps Facebook will follow in the footsteps of networks like WeChat that heavily restrict the role brands play in the news feed but give more free reign to advertisers within messaging apps, she added.

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Programmatic has become the norm when it comes to media buying, but that doesn’t mean it’s without its flaws. But the hot technologies of blockchain and artificial intelligence could fix the issues.

For IBM, that’s the goal. “One thing we’ve been thinking a lot about is how blockchain is going to affect media buying and how much fraud and waste can be eliminated by putting blockchain in programmatic,” said IBM’s CMO Michelle Peluso, who chatted with Digiday about using new technologies to clean up the inefficiencies and waste in programmatic.

IBM has publicly talked a lot about investing in blockchain. How do you view its role in advertising?
Programmatic is the way the world works. It’s not going to change, but there’s a huge amount of inefficiencies and waste. Right now, on average, of any dollar a marketer spends, only about 50 cents shows up in front of who you are trying to advertise to. If I want to get a message in front of hundreds of thousands of people, I’m using programmatic and algorithms to deliver it. Where it actually shows up, I really don’t know. And there are so many tolls that show up along the way — there’s a brand-safety toll, a brand-help toll. Everyone’s taking their 10 cents on the dollar out along the way. What blockchain can do is register each point where that ad shows up effectively, so marketers can control the process and get more working dollars in front of customers.

You’re also bullish on AI.
AI is [transforming] and will transform our profession. We are using it to outperform programmatic. Programmatic is a relatively dumb system — it doesn’t learn. You’re basically saying, I want to reach these audiences. What we do with AI is look at what can we do to actually learn from how we use programmatic, which channels perform the best, and look at how much more we should be bidding on. So it’s the notion of learning and improving.

Is brand safety a concern for you?
The reality is none of us can say with certainty that anywhere in the world, we are safe. Look what just happened with YouTube. They are working on fixing it, but even Facebook and Google themselves have said there’s not much they can do about it. I mean, it’s hard. It’s not black and white. We are putting a lot of money in it, and pull back on channels where we have concerns. We’ve had good talks with the YouTube teams.

Will you reduce spend on YouTube?
We don’t comment on the specifics on that because we are all long-term relationships, but suffice to say, it’s a topic we are very focused on. To their credit, and Facebook is another, they have really woken up, and they are getting more active about what they can do.

Facebook has changed its algorithms to favor user content over publishers’. Do you believe the move could lead to improved brand safety on the platform?
Facebook’s new announcement might go a step further in helping it, but the onus is on publishers to keep brands safe. Publishers have to keep upping their game. It’s the need for transparency, clarity and building out the tools and capabilities to keep brands safe. It’s critical.

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Digiday’s “Research in brief” is our newest research installment designed to give you quick, easy and digestible facts to make better decisions and win arguments around the office. They are based on Digiday’s proprietary surveys of industry leaders, executives and doers. See our earlier research on publishers implementing header bidding and ads.txt here.

The enforcement of the General Data Protection Regulation on May 25 will disrupt the business practices of most media companies.

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Financial services institutions are known to shy away from social media due to strict industry regulations. But a growing number of consumer-facing banks, insurance companies and personal finance apps are looking to create promotional content with individuals with large followings on social media, in order to add personality to their brands and cater to the 18- to 34-year-old cohort, according to agency executives.

“Financial services is a tough category, but one I think would be of interest to millennials and women,” said Holly Pavlika, svp of marketing and content for influencer agency Collective Bias, which is pitching several banks. “Education is a huge need in the category around investing and getting a mortgage, et cetera, and having real people tell real stories helps make the category less intimidating.”

Kerry Perse, director of social media for agency OMD, said that when her team ran its first influencer campaign in the financial services vertical around two years ago, the client needed to be educated on what influencer marketing was and convinced that the content would be compliant with the Federal Trade Commission and Financial Industry Regulatory Authority regulations. Now, companies in financial services have a much better understanding of influencer marketing and feel more comfortable with this marketing approach, she said.

“We’ve already done influencer marketing for a couple of financial clients this year, and we are also planning for next year,” said Perse.

Meanwhile, Kamiu Lee, vp of strategy and business development for influencer platform Bloglovin’, has seen a growing interest from financial clients in working with influencers since last year, especially later in 2017, as those companies want to humanize the brand and reach young people, she said. “This is also because as influencer marketing matures, industries outside food, fashion and beauty are also catching up,” said Lee. “Marketers now understand what influencer marketing means — it’s not just about product placement.”

Rob Gregory, president of influencer agency Whosay, also said there’s a growing demand for influencer marketing from clients like Bank of America, Cigna and Principal Financial.

But it’s not easy to run influencer marketing in financial services because of FTC and FINRA regulations. In some cases, financial products may require more disclosures than what the FTC requires. For instance, influencers may need to include a line like “past performance doesn’t guarantee future performance” in their financial product endorsements, in addition to the #ad hashtag, according Pavlika. Meanwhile, individuals are not allowed to endorse a specific stock or investment idea under FINRA, so influencers can’t post or share that type of messaging, said Lee.

“All the legal [regulations] have the potential to take away from authenticity and interrupt the influencer’s ability to tell a story in a human way,” said Pavlika.

Given the strict industry regulations, Perse and Lee both think a good way for financial companies to approach influencer marketing is developing content that relates to an individual’s personal experience, especially life milestones like buying a house or starting a business, where the influencer promotes a financial product in general terms. For instance, a financial-planning app can work with a recently engaged influencer who may talk about how the app helps her save money while planning her wedding, according to Lee.

Another example: If a campaign is about an individual retirement account rollover, the brand can use lifestyle social influencers to talk about how they used one to easily consolidate their multiple retirement accounts from previous employers, said Perse. “They talk about specific products in the context of life stage or a current challenge,” she added.

Lee believes that since financial companies typically have ongoing philanthropic initiatives, they can also work with influencers on that front. “Influencers can help humanize the story instead of just saying bank XYZ donates this much money,” she said.

While financial institutions could benefit from influencer marketing, the decision to work with social stars comes down to the product. For instance, investment products are not a right fit for influencer marketing, while digital wallet products, apps and functional bank offerings are ideal, said Pavlika.

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