Data-Labor-Technology

The duopoly may be soaking up all the growth in digital advertising, but not the ad dollars of one growing category: weed marketers.

That’s because Facebook and Google won’t accept marijuana ads. A Google spokesperson said the company doesn’t allow marijuana ads on either the display or search side because the product is illegal on the federal level, while Facebook’s ad policy prohibits sales promotions on cannabis. ​That’s opened to door to smaller programmatic ad marketplaces, in particular, to grow their cannabis business. Six agency and programmatic executives report that their weed business is expanding, thanks in part to less competition. (Holding company agencies also swear off marijuana accounts.)

“Cannabis advertising really started picking up in programmatic buying over the past year because more and more people are getting into the business, and legit marijuana brands are also growing bigger,” said Jeffrey Finch, co-founder and chief product officer for Denver-headquartered demand-side platform Choozle. “They realized that they need more advertising.”

Programmatic buying for marijuana clients requires more human supervision and technological sophistication due to the legal complexities. After all, weed is not legal in every state in the U.S. Because of that, Finch said his team only runs managed programmatic campaigns for marijuana advertisers, although 90 percent of Choozle’s clients use self-serve. “Cannabis is still considered as sensitive content, so we have to be extra careful with the creative and the targeting,” said Finch. “Those ads will show up on publishers who have no aversion to cannabis content.”

Vendors must go through several validation points to make sure weed ads are compliant with laws. For instance, Finch said that in addition to targeting people who are over 21 and in states that legalized marijuana based on ZIP code, his team also uses keyword targeting to find the right content to serve cannabis ads against. For instance, a marijuana chocolate brand can target web pages with the phrase “weed chocolate.” If “weed chocolate” appears on one page over three times, the page would probably be a good fit for the brand.

Meanwhile, Darren Roberts, co-founder of High There!, a dating app for cannabis consumers, is also seeing this uptick in programmatic buying. He said his company is integrating Twitter-owned MoPub to serve display, interstitial and video ads programmatically. “We have a community of individuals who happen to enjoy cannabis, but they are like anyone else,” said Roberts. “That means advertisers can target based on people’s interests like food, culture and outdoor activities. We don’t set the goal of advertising to marijuana brands only — we want to bring mainstream advertisers to our community.”

Despite cannabis advertisers’ growing interest in programmatic, ad tech is nascent in cannabis. Olivia Mannix, CEO and founder of cannabis marketing agency Cannabrand, said her clients usually spend a small part of their marketing budget, like around $10,000 a month, on programmatic. “Cannabis brands are still more interested in earned and owned [media] than paid media because of ad platforms’ limitations,” said Mannix. “When we created ads, the content tends to be more educational and less recreational-focused.”

Meghan Larson, CEO and co-founder of Adistry, an ad network specialized in cannabis advertising, said that although the number of publishers her company works with has doubled to around 300 over the past year, overall publisher traffic for the cannabis industry is much lower compared to other industry verticals. This is because major exchanges like Google, AppNexus and Rubicon Project all declined marijuana advertising, according to Larson. “We can’t move forward yet. It would be great if we can work with Google and Facebook to run device ID tracking,” she said. “But it will come eventually because cannabis advertisers are looking for alternatives to traditional advertising.”

Finch also believes programmatic ad spend in cannabis is too small to interest the likes of Google and Facebook. His brand and agency clients in this category usually spend somewhere between $5,000 and $20,000 a month, and cannabis advertisers make less than 1 percent of Choozle’s overall revenue, he said.

“The only reason why we are doing programmatic for cannabis advertisers right now is someone has to do it — and do it right,” said Finch. “It’s a legit industry in Colorado, and I personally want to make it work.”

The post One digital media area the duopoly isn’t dominating: Cannabis ads appeared first on Digiday.

In our new series “Life After Advertising,” we share the stories of past advertisers who endured the long hours in the industry and have emerged in a new career, perhaps a little worn, but mostly unscathed and living new dreams.

Bill Gross, 64, spent 25 years working at ad agencies like Benton & Bowles, Grey, JWT on food accounts like Kool-Aid, Nestle, Unilever and General Foods. But after 9/11, Gross pursued a new route. He moved to Connecticut and opened the Brookfield Learning Center, a tutoring and test-prep business that helps second-graders to early college students complete their education.

Since leaving the advertising industry 14 years ago, Gross also started running marathons, recently completing his 102nd marathon. He is featured in the book “Running Past Fifty: Advice and Inspiration for Senior Runners,” which will be published in October.

Why did you leave advertising to open a learning center?
After 25 years, I realized two things. I wanted a business of my own and I wanted to find something where the outcome had more of a benefit to someone than 30-second commercials. Someone once said to me that you spend the first half of your life doing stuff and the second half of your life making up for the stuff you did in the first half of your life. I decided I could put what I learned from advertising to use helping build kids’ brains instead of filling their stomachs with Kool-Aid.

What skills did you learn in advertising that help you today?
When I’m working with students or meeting parents, I’m applying all the different things I did in advertising, only to a different audience. You look at the market and do a market analysis, just like you would do for a new business pitch. Who is your customer? It’s a kid. Who is your secondary customer? It’s their parents. What is the emotional benefit? They want their problems solved.

What’s your vision for the learning center?
There’s an enormous opportunity to expand the test-prep business. The stakes of going to college, both financially and socially, are enormous. If you want to see what anxiety looks like, look in the eyes of an 11th-grader. Their parents look even worse. Somebody who can honestly, legitimately help them with this process is the business I would like to be in on a larger scale.

What do you miss about advertising?
I miss the people. There aren’t other businesses where you can meet a bunch of people who vibrate at that speed. There’s also something about the idea that good advertising can change people’s behavior. I’m always in awe of the business when that works, but it works infrequently.

What don’t you miss?
The knowledge that sometimes you are selling things that aren’t exactly correct. There were times I would meet with clients and “sell” ideas that I knew in my heart weren’t the best thing, but they were sellable. Everything I sell now, I believe in.

What made you start running at age 50?
I saw my 50th birthday coming up, and I had a little kid I wanted to see grow up. I started to run and really liked it. I’ve now run 102 marathons in 14 years. That’s an obsessive amount, but I think that’s consistent with the personalities of advertising people. They’re high-strung people who want to achieve. I’ll stop running when I fall over at the finish line.

You ran in the Boston Marathon the year the bomb went off. How close were you to the finish line?
I was about half a mile from the finish line. The only reason I wasn’t at the finish line at the time the bomb went off was because I tripped over a grocery bag that had blown into the street and fell hard. It took me about five minutes to get going again. I think someone was watching over me that day.

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The tussle between publishers and platforms shows little sign of abating. Publishers want the reach that platforms afford and a fair reward for filling them with content. On top of this, publishers increasingly want the platforms to take more responsibility for their role in hosting inappropriate content.

Here are four charts on the state of publisher attitudes toward platforms.

Google leads while Facebook falters
Forty-four percent of publishers are more worried about the growth and power of platforms now compared to last year, while just 7 percent are less worried, according to Reuters Institute’s latest Digital News Project report.

The report found that out of all platforms, publishers are the most positive about their relationship with Google, as the below chart illustrates. (A score of three or above indicates a positive view.)

The not-so-surprising finding from the report is that sentiment about Facebook has worsened. The platform has faced struggles that have affected its relationship with publishers, such as its role in spreading fake news, lack of monetization opportunities and changes to referral traffic. Google, meanwhile, has proven itself to be more of a friend to publishers, partly because of Google’s and Facebook’s divergent business models: Publishers’ interests are more in line with Google’s interest in sharing information than with Facebook, a closed social network that earns revenue through advertising.

Traffic referral plays a role
For some time, Facebook was the No. 1 source of referral traffic for publishers’ sites, where publishers could monetize traffic more effectively. In December, data from Parsely found that Google now accounts for 44 percent of publishers’ referral traffic, overtaking Facebook, which accounts for roughly 26 percent. This is partly because of publishers’ adoption of Google’s Accelerated Mobile Pages and Facebook’s continued focus on native video.

Publishers have griped about the lack of responsiveness from platforms, transparency in audience data and upcoming projects, overall business alignment and, most important, monetization opportunities.

“The underlying discontent is platforms have too much power, and publishers don’t get the fair financial reward,” said Nic Newman, research associate at the Reuters Institute for the Study of Journalism.

Snapchat offers the lowest returns
Publishers struggle to keep up with platforms’ products, especially those that have yet to prove financially viable. Snapchat in particular has required a lot of legwork, with publishers staffing teams to meet content demands without much proven return on investment.

A Digiday+ survey of 35 European publishers found that 3 percent of respondents thought Snapchat offered the strongest monetization potential among platforms, with over half (52 percent) citing YouTube as offering the best monetization potential.

Publishers eye alternative revenue streams
With the concerns about platforms’ power, the need for publishers to diversify their revenue streams is more pronounced. Nearly half (44 percent) of respondents see subscriptions as a very important source of digital revenue in 2018, while both display advertising and branded content were viewed as important revenue sources by 40 percent, according to the same Reuters Institute report.

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Desperate times call for desperate in-browser messages.

With Apple already making moves against ad tracking in its Safari browser and the General Data Protection Regulation being enforced in May, ad retargeters are desperately trying to get consent from users to track their digital browsing behavior. Companies such as Criteo and AdRoll are trying to get people’s consent by serving in-browser messages that opt users into ad tracking once they close the messages.

Criteo and AdRoll did not return messages about this story. But Digiday spoke to five ad tech industry insiders who unanimously concluded that the in-browser messages should not qualify as acquiring user consent.

The GDPR demands that personal data only be used with explicit permission from individuals. Apple updated its Safari browser in September to prevent third parties from tracking users for more than 24 hours after a user visits a website.

Together, these moves make it a particularly difficult moment for retargeters since they are fighting a two-front war to keep their business model afloat, said Ratko Vidakovic, founder of ad tech consultancy AdProfs. Criteo’s stock already tumbled in December after it revealed that Apple’s crackdown on ad tracking hurt its business more than expected.

As seen in the screenshots below, AdRoll placed an “accept and close” button where users normally close a window. To opt out of AdRoll’s tracking, users have to click the link in the fine print.

Similarly, Criteo served people a message that opts them into the firm’s tracking once they click any link on the page. Its opt-out option is also buried within the message.

The GDPR regulations state that consent must be “freely given, specific, informed and unambiguous.” Ari Paparo, CEO of programmatic bidding firm Beeswax, said there’s no way the tactics of Criteo and AdRoll meet this standard. He called their attempts to gain consent “ridiculous.”

Altimeter analyst Susan Etlinger said these tactics are risky because companies that don’t comply with the GDPR could face a fine of 4 percent of annual sales or €20 million ($24 million). Trying to nudge users into consenting to data tracking is “going to become a high-stakes poker game for advertisers once GDPR goes into effect,” she said.

Since retargeting firms usually don’t have direct relationships with users, the GDPR’s consent requirements could expose their business models. But they’re not the only group in the Lumascape that the legislation could affect. Any vendor that primarily relies on third-party data could get caught in the crosshairs. That’s why data management platforms may soon face a tough battle to obtain the data that powers their businesses.

The enforcement of the GDPR will fundamentally change ad retargeting as we know it, said Dave Morgan, CEO of TV ad-targeting company Simulmedia. As browsers start policing ad tracking, Morgan thinks more users will refuse to consent to handing over their data to ad companies, and aggressive ad targeting will become harder to execute.

“I don’t know how one would argue that [the retargeters’] approaches truly amount to clear notice and consent,” Morgan said. “In fact, this is the kind of stuff that holds back digital advertising and undermines the industry’s trustworthiness with both advertisers and users.”

The post Ad retargeters scramble to get consumer consent appeared first on Digiday.

Condé Nast is pushing to identify marketing opportunities across its publications, with the help of research initiatives designed to better understand consumer behavior.

The effort is part of Condé Nast Performance Lab, a recently launched program within the media conglomerate’s research and analytics team that collects data and conducts surveys to better inform marketing strategy across publications. After sharing its first study in July — which used neuroscience to show the efficacy of sponsored posts — the group revealed its latest findings, showing that early adopters of style trends are also more likely to become technology trendsetters.

Data showed that the correlation between fashion and technology is translating to sales: Fashion-conscious individuals are spending twice as much as others on products like the latest iPhone models, smart home devices and VR- and AR-enabled items. The study examined more than 1,200 people between the ages of 13-49 who were split into two test groups: the “fashion-conscious” consumers, defined as those who engage with Condé Nast brands dedicated to style content (such as Vogue and W), and a standard national sample that does not.

Cara Pantano, senior manager of custom and primary research at Condé Nast, said the study points to opportunities for brands and publishers to take advantage of an untapped demographic of fashion and tech enthusiasts. Though there has been a rise in events like Silicon Valley Fashion Week, which celebrates technology-driven fashion design, marketers are largely neglecting the overlap. “The consumption of fashion and technology is more similar than advertisers realize,” she said.

On the business side, Stephanie Fried, svp of research and analytics at Condé Nast, said technology brands that advertise in publications like Wired and The New Yorker can use the information to consider investing in fashion and style publications. On the editorial side, the studies can be used to inform content strategy and serve as the genesis for new verticals, she said.

“The goal is to partner with the advertisers, not just on a specific campaign or media plans, but in helping them market their products better,” she said. “We can drive more equity long-term by helping them understand their core consumers.”

The study also found that 50 percent of fashion-conscious consumers pay close attention to technology marketing, and 47 percent agree that technology showcases a sense of style within their homes. As a result, this group is particularly interested in Amazon, Google and Samsung technologies, like Amazon Alexa and Google Home. Additionally, the fashion-conscious category was more likely to say a smartphone expressed their sense of style over a purse or a pair of sunglasses.

Fried said the intersection of fashion and technology continues to proliferate, thanks in part to the rise of brands dabbling in virtual and augmented reality efforts. (Take, for example, JCPenney’s recent virtual reality holiday pop-up, which used VR to allow users to make purchases online from a temporary retail space in New York City.)

Also bolstering the overlap between fashion and tech enthusiasts is the increase of wearables created with the fashion community in mind, including Fitbit’s designer collections and the debut of smartwatches made by Gucci and Michael Kors. According to the study, fashion-conscious consumers spent almost four times more in this category than the national sample.

“In some of the open-ended questions, people would say they change their [smartwatch] bands every day to fit their outfit,” Pantano said. “It’s part of an overall trend toward customization, and we’re trying to do that across [Condé Nast] through customization of content, recommendations and features on the sites.”

The post How customer data is guiding Conde Nast’s marketing strategies appeared first on Digiday.

TD Bank just bought its first technology firm, Toronto-based artificial intelligence startup Layer 6.

The Canadian banking giant, also based in Toronto, invested an undisclosed amount in Layer 6 to help it “continue to transform itself” in the industry shift from mobile-first to AI-first customer experiences, said Rizwan Khalfan, TD’s chief digital and payments officer. The transaction was completed Tuesday morning.

Banks always say to keep up with competition — which now includes financial startups and retailers as well as competing banks — their best bets are to build, buy or partner with them. But buying is rare: last fall JPMorgan Chase acquired WePay, a small business-focused payments company. In the last three years, Silicon Valley Bank acquired API startup Standard Treasury, BBVA acquired digital bank Simple, Ally acquired trading platform TradeKing.

But bringing in an AI startup, and Layer 6 specifically, whose niche is in personalization and prediction, solves a huge problem for banks as they compete with other industries’ more personalized customer experiences. The ability to anticipate the needs and preferences of individual customers doesn’t exist in banking today, but will be a requirement going forward, Khalfan said. Consumer activity is becoming more digitized everyday and the amount of customer data from digital transactions doubles every two years.

Read the full story on tearsheet.co

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