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Articles by: "Todd Krizelman, CEO – MediaRadar"

Advertising | Perspectives | Revenue

The threat to CPGs creates advertising opportunities for publishers

Packaged goods are typically the biggest spenders in advertising. Not only is a CPG company’s brand and product mix massive, but the competitive threats from e-commerce and direct-to-consumer brands are significant and growing. The competition has taken a toll. In the last two years, CPG sales have declined. As a result, marketers are spending billions on advertising to safeguard their market share and stay top-of-mind among consumers.

For publishers, however, the competitive marketing environment has created a substantial revenue growth opportunity. CPGs are notorious TV spenders, but they also spend considerably on print and online. For publishers to compete for those dollars, it’s important for them to know these CPGs as well as possible.

CPG Ad Intelligence

With that in mind, here’s an advertising-intelligence snapshot of three of the biggest CPG advertisers – according to annual revenue from 2018 – based on MediaRadar data.

Nestle SA – Nestle is the top CPG by revenue, with nearly $90 billion on the year. But it only grew by 0.4%. Still, in North America, the brand spends nearly $640 million on ads. According to our data, Nestle invests in premium ad units, and it advertised on over 250 different media properties in the last year across multiple formats. For publishers, this could mean opportunities with digital video, native and other premium formats. Nestle launched and advertised 90 new products in the past 12 months. There are nearly 125 people on file in marketing roles at Nestle, as well as over 50at their agencies. This offers a lot of targets for publishers.

Procter & Gamble – P&G’s sales declined in 2018, down nearly half a percentage point. Still, the company brought in more than $65 billion in sales. The company’s marketing budget has been slashed by hundreds of millions in certain areas in an effort to adapt to the sales outlook with cuts of $200 million alone in digital). Still, even with a contraction, the company is one of the world’s most prolific marketers, pouring more than $7 billion in advertising globally. Like Nestle, our data finds that P&G invests in premium ad units on over more than 250 properties. They launched slightly fewer products, though, with “just” 83 in the last year. P&G’s marketing team is comparable to Nestle’s, with over 125 people in marketing roles, according to our data. We’ve also identified nearly 130 agency people who work on P&G business. Perhaps that speaks to chief brand officer Marc Pritchard’s push for agency streamlining and transparency.

PepsiCo – PepsiCo beat out Unilever in sales with $63 billion total on the year. The company is one of the few CPGs to see some sales growth, with an uplift of 1.2%. Everything from Frito-Lay snacks to its beverage portfolio have helped the company rise above some of the stagnation experienced by its peers. In terms of where PepsiCo is advertising, the numbers were fairly similar to those for Nestle and P&G. All three prefer high-impact inventory and spend on hundreds of media channels. But PepsiCo only launched and advertised 17 new products in the past 12 months. That seemed to benefit their sales (a more focused approach, possibly). However, it likely doesn’t help publishers who would benefit from the company’s need to promote more new products. Additionally, PepsiCo has the smallest overall marketing team, with almost 100 people on file in marketing roles and over 50 at their agencies.

As CPGs come under threat, they will consolidate some of their marketing spend. However, overall, these companies continue to be massive sources of revenue for publishers. A careful analysis of their growth and marketing strategies – investing in premium formats, new product launches and more – can help publishers unlock more value from existing relationships or even build new ones.

Industry-Research | Perspectives

Native advertising: Is there still room to grow?

Seventy five percent of consumers report that, if content piques their interest, they’ll engage with it, regardless of whether it’s branded or not, according to Reuters. That’s the beauty of native advertising. Unlike display ads or banner ads, native ads don’t have to look like ads. They are non-disruptive and introduce the reader to advertising content without sticking out like a sore thumb.

Native was once one of the hottest trends in online ads. However, the total number of advertisers has stagnated, starting around the beginning of 2017. Only about 11% of online advertisers use native formats these days. And brands that buy native ads only run them across 10% of the sites where they advertise. What caused this shift?

Certainly, online ads should be fair, clear, and engaging. Unfortunately, at times, native ads can be almost too inconspicuous, as they weave seamlessly into the platform where they appear. Additionally, the process of crafting a native ad or campaign is a costly, multistep process involving a lot of collaboration and time. And, without unified standards, it’s especially hard to gauge performance metrics like return on investment (ROI), impact, and effectiveness. For these reasons, some advertisers see too many challenges with creating an effective native advertising program.

On the flip side, many would argue that the benefits of native advertising outweigh the negatives. Native display ads receive a higher click-through-rate (CTR) than typical display ads. According to an AppNexus whitepaper, CTR is actually 8.8x higher with native display ads. Moreover, two out of three GenZ, Millennials, and GenX consumers trust branded content more than traditional advertising, finding it more entertaining, thought-provoking, and impactful, according to a Time Inc. study. Furthermore, a Collective Bias survey found that one-third of Millennials say that they’ve purchased something as a result of a sponsored post and nearly 37% agree that useful and high-quality posts offset any objections they may have to branded content.

Based on these findings, it’s not surprising that the industry investing most in native advertising is Media & Entertainment with over $269mm. Top spenders include Comcast Corporation, Hulu, and Cox Communications. The Finance & Real Estate and Technology sectors tie for second place, both investing $75mm, with Professional Services and Retail not far behind, spending $57mm and $46mm respectively.

Overall, MediaRadar’s study found that, while the native market is maturing, there is still room for growth. In North America, where users have become accustomed to branded content, brand advertisers must differentiate themselves from competitors. They can do this by focusing on their most profitable products, reworking existing products that underperform, or refreshing their offerings with new innovations. While publishers must continue to perfect their offerings for native to reach its full potential, the advertising format still has plenty of opportunity for growth in the future.

Advertising | Perspectives

Instagram vs. YouTube: Who will win the digital ad war?

YouTube is currently the most popular platform for video content. So, it’s no surprise that when Instagram released IGTV, its stand-alone app for long-form vertical video, everyone’s first reaction was to compare the two. And YouTube pretty much always came out on top.

However, in the past year, YouTube has been under fire for brand safety issues. In fact, there was a point when 250 brands stopped advertising on YouTube at the same time in order to protect their assets and brand image. To date, many advertisers still believe that YouTube has done a poor job of preventing its advertisers’ brand safety issues, even though they have gotten better at the response.

This led us to host a panel discussion on October 4th to ponder a key question: With YouTube in its most vulnerable state, and given its ongoing brand safety concerns, is it IGTV’s time to steal advertisers away?

The discussion, entitled “Instagram TV vs. YouTube: Who Will Win the War?”, was moderated by Kerry Flynn of Digiday. The panel  consisted of five advertising experts: Kaydee Bridges, VP of Digital & SM Strategy at Goldman Sachs, Elijah Harris, VP, and Head of SM, US at Reprise Digital, Noah Mallin, Managing Partner at Wavemaker North America, Brittany Richter, VP and Head of SM, US at iProspect, and myself.

The discussion offered three key takeaways:

1. YouTube still wins the popular vote.

The majority of panelists agreed that brands interested in video content should be on YouTube rather than Instagram’s IGTV. They pointed out YouTube’s benefits: It’s cheaper, long-form content performs better on YouTube, and it’s better for sharing. Elizabeth Richter, iProspect’s Head of U.S. Social Media, offered a different point of view, arguing that Instagram may work for some brands: “If a brand is struggling with their messaging, or just getting started, Instagram’s IGTV is best because they can experiment with different brand messages and see how consumers respond,” she commented.

2. Instagram’s IGTV is transforming and expanding in promising ways.

For Elijah Harris of Reprise Digital, the early IGTV experience was underwhelming. Its focus was to share long-form content from those he followed on Instagram – something he didn’t enjoy. However, Harris added that the platform currently offers more opportunities worth exploring, raising his confidence in its potential for the future.

3. Instagram’s IGTV isn’t quite ready to compete with the big boys.

Elijah Harris suggested that, if it wants to compete with YouTube, IGTV needs meta tags and better discoverability. To go up against Snapchat, he added, it needs curated content and multi-channel network (MCN) participation.

Noah Mallin of Wavemaker believes that, to compete with Snapchat, IGTV needs “breakout content,” even suggesting that it might fill the void left by the demise of Vine. (“I’m still mourning it,” he confessed). Mallin added that YouTube is “stuck in desktop mode” and must quickly adapt for mobile users.

The consensus was clear. IGTV wants to be the most popular platform for video content. However, it still has a lot of growing up to do. Perhaps Instagram will take note of our panel discussion, and we’ll see a more mature IGTV before we know it.

Advertising | Industry-Research | Revenue

Programmatic spend continues to surge in 2018

It’s predicted that more than $46 billion in ad dollars will be spent on programmatic advertising in the United States this year, with 86.2% of all digital display ads bought programmatically by 2020. But who is spending the most on programmatic? MediaRadar dove in to find the answers. By analyzing thousands of brands, with ads placed programmatically in Q1 of 2018, we discovered which companies are spending more, which are spending top dollar, plus so much more.

75% of all brands running ads online buy programmatically

A whopping three quarters of brands studied had purchased some form of an ad programmatically in Q1 of 2018. Findings such as these prove that, despite transparency concerns, advertisers are continuing to invest in programmatic.

Even more compelling is that, in the wake of major brand safety controversies (e.g. YouTube’s controversial content woes), advertisers are still purchasing programmatic video. In fact, the number of brands running programmatic video have nearly doubled compared to the previous year.

Amazon leads the way in programmatic ad buys

Big brands are buying programmatically and Amazon is leading the space. Amazon was found to be the biggest programmatic spender by far. The online retailer alone accounted for 10% of the total spend of the top-50 programmatic advertisers in Q1 of 2018, spending one and a half times more than the next biggest programmatic spender, Microsoft.

In order of high to low, the top-10 programmatic advertisers in Q1 of 2018 were:
  1. Amazon
  2. Microsoft
  3. Wayfair
  4. TaxAct
  5. Charles Schwab
  6. Weight Watchers
  7. Sprint
  8. Coors Light
  9. Geico
  10. Dell

Amazon has always been a big spender when it comes to marketing efforts. In 2016  it was reported that Amazon spent more on advertising than Walmart Inc., Best Buy Co. Inc., The Home Depot Inc., and The Kroger Company combined. A large portion of that ad budget was dedicated to programmatic too.

The players remain the same

An impressive 94% of the top-50 programmatic spenders in Q1 of 2017 ended up buying programmatically again in Q1 of this year. The list of companies that renewed include Walmart, Microsoft, and Verizon Wireless.

Despite escalating talk about brand safety, the programmatic market has remained mostly stable, year-over-year. Significant changes in the form of exits or reduced spending have been few and far between. Not to mention, the implementation of safeguard tech like whitelist and blacklist technologies have shown brands that programmatic is actively changing for the better; becoming more brand safe and transparent with every update.

The bottomline is that most advertisers prefer programmatic for transacting online media and that doesn’t appear to be changing anytime soon. No matter the controversy, brands appear to value the rewards of programmatic more than they fear the repercussions. Amazon’s increasingly large investments in programmatic are a testament to its popularity and power in the advertising market.

About the Author

Todd Krizelman (@ToddKrizelman ) is Co-Founder and CEO of MediaRadar (@MediaRadar). Growing up near the epicenter of technological innovation in Palo Alto, California encouraged him to become an entrepreneur and co-found of one of the world’s first social media sites, theGlobe.com. Krizelman also held leadership positions at Bertelsmann’s Gruner + Jahr and Random House. With his expertise in ad sales and innovation, Krizelman joined veteran web architect, Jesse Keller, to found MediaRadar in 2007.

 

Advertising | Industry-Research | Revenue

Post-GDPR impact: Programmatic remains strong in the U.S.

Long before GDPR took effect in May, both publishers and advertisers tried to install safeguards to prepare for its impact on industry practices. We’ve seen some of the effects already. Email marketing distribution lists have shrunk. Companies are re-evaluating and optimizing the data they collect to increase data privacy and consumer trust. Some publishers are even blocking access to EU-based residents altogether.

But how has GDPR affected the ways advertisers buy? It’s been reported that programmatic purchases have plummeted in the EU since GDPR has gone into effect. Companies now need to prove they have user permissions, which becomes tricky if you’re selling advertising on websites where you have no ownership or control. We’re aware of certain firms whose revenues are down from 33% to 50%, in just the past 30 days, presumably due to lagging compliance.

Here at MediaRadar, however, we evaluated programmatic ad spend in the U.S. The impact isn’t nearly as drastic as some may have believed.

Number of brands buying programmatic is up

Surprisingly, our own data found that the number of brands purchasing programmatically in the U.S. has increased since April. This shows that brands still value the convenience of programmatic purchases, even with the new regulations. It’s important to note that this increase in programmatic interest actually came prior to GDPR. From January to May of 2018, we saw 86,695 brands purchase programmatic ads, with the number of brands increasing month over month.

Direct buys are increasing at an even greater rate

From January to May of this year, digital advertising has surged. During this period, the number of brands that purchase programmatically increased, yet direct buying also grew, and at a much faster rate. Because of this, the total percent of programmatic purchases among all digital ad buys has actually decreased. In Q1 of 2018, 61% of ads were placed programmatically. Since then, that percentage has dipped to 59% in April, and to 58% in May, despite programmatic strength.

In looking at the big picture, we found that the rate of programmatic ad buying has been largely flat in the U.S. year-to-date. Digital advertising as a whole is thriving, regardless of GDPR implementation. This proves that the increase in programmatic spend can be attributed to the overall popularity of digital, as opposed to programmatic itself. We believe this trend in the U.S. will continue. Programmatic will remain popular among advertisers, barring a wave unexpected GDPR violations as a result.

About the Author

Todd Krizelman (@ToddKrizelman ) is Co-Founder and CEO of MediaRadar (@MediaRadar). Growing up near the epicenter of technological innovation in Palo Alto, California encouraged him to become an entrepreneur and co-found of one of the world’s first social media sites, theGlobe.com. Krizelman also held leadership positions at Bertelsmann’s Gruner + Jahr and Random House. With his expertise in ad sales and innovation, Krizelman joined veteran web architect, Jesse Keller, to found MediaRadar in 2007.

Perspectives | Revenue

YouTube growth flat as brand safety woes continue

In lieu of Facebook’s reputation struggles, as well as changes to their Newsfeed, many publishers are considering YouTube for both inventory and audience development.

However, YouTube has problems of its own – namely, brand safety. According to a brand-new study by Oath and Advertiser Perceptions, polling more than 300 advertisers, 42% say user-generated content sites like YouTube aren’t addressing their concerns over brand safety. This study comes just a month after Cisco pulled all ads from the video platform. Per Cisco’s CMO Karen Walker, in her original blog post (the piece was later edited to remove mention of YouTube), “We have pulled all online advertising from YouTube until the platform has met our standards.”

As digital video consumption rises, publishers see YouTube as an obvious opportunity. Marketers do, too – but they’re also growing increasingly weary of brand reputation across the platform. In looking at our own data at MediaRadar, the numbers bear that out. Across a sample of 70 top YouTube channel pages, advertising spend has been flat in 2018, with only an 0.2% increase YTD. Publishers and marketers alike both want to tap into YouTube’s exploding audience (nearly 1.6 billion watch YouTube content at least once a month right now). But for this to be a go-to platform, there’s work to be done.

To YouTube’s credit, they’re taking on the work. At the company’s NewFront, YouTube talked up its newly expanded Google Preferred lineup, emphasizing its top channels as premium, brand-safe environments. They also touted the increase in human reviewers auditing content. However, as the Oath study shows us, the effort to resolve brand safety and win back trust from now burned and cautious brands will be slow-burn and long-term.

As that process continues, high-quality digital publishers are in a good position either way. While YouTube addresses trust, more marketers will flock to the service. This, in turn, could boost revenue opportunities for the publishers that want to play in that sandbox.

In the interim, however, digital publishers are still the beneficiaries. The Oath report also found that 45% of advertisers are moving spend to “well-regarded premium” digital publishers — think sites like USA Today, BuzzFeed, The Huffington Post, and The New York Times — until they feel standards have improved on social platforms like YouTube. It’s a win-win for publishers, with brand safety a key theme both now and in the future.

 

Perspectives

Facebook vs. Snapchat for Third-Party Distribution: 5 Key Insights

In January, Facebook introduced algorithm changes to its News Feed, prioritizing the content that friends and family share and comment on, while de-emphasizing content from publishers and brands. The changes shifted expectations and strategies for content owners who’ve long valued Facebook for both traffic and engagement.

On April 5th, 2018, MediaRadar hosted a panel to discuss the state of the media industry in the wake of these sweeping Facebook changes.  The name of the event was “Facebook vs. Snapchat: What’s Next for Third-Party Distribution?”

Marty Swant, Staff Writer from AdWeek moderated this discussion. I was honored to be a part of this panel, which included four other industry experts with various and impressive backgrounds: Maia McCann, former Editor-in Chief & EVP of Programming from Little Things, Emily Cohn, Executive Growth Editor from Insider Inc., Kieley Taylor, Managing Partner, Global Head of Social, [m]PLATFORM, and Brian Madden, SVP Development at Hearst Digital.

Here are 5 takeaways from the conversation:

1. LittleThings isn’t holding a grudge against Facebook.

Maia McCann entered the panel with an experience completely unique to any of the other panelists. She was the Editor-in-Chief for LittleThings, the digital media firm that recently shuttered in the wake of Facebook’s algorithm changes.

Marty Swant’s very first question of the night was directed solely at McCann. He simply asked, “What happened? Could you tell us about the rise and fall of LittleThings?”

Maia stated that the company was “born out of viral Facebook traffic.” She went on to say, “We toyed with the idea of diversifying traffic, but we made a decision to look at Facebook as five different avenues of distribution. We looked at Facebook as a landscape. There was an idea that this landscape was never really going to change.”

Unfortunately, their strategy did not serve them well, as Facebook’s landscape did change. LittleThings was not built to withstand those changes. It lost about 75% of its organic traffic, which killed their profits and caused the company to shut down.

In light of the outcome, one might assume that McCann could have bitter feelings towards Facebook’s algorithm changes. However, she expressed a much more positive outlook, devoid of grudges. In fact, she appeared grateful: “There’s been a lot in the press about how Facebook killed LittleThings. I really don’t feel that way. I don’t have rage dreams about Mark Zuckerberg. Facebook made my career.”

She noted that Facebook gave her the giant audience that led to her success. Without it, she’d just be “writing somewhere.” McCann also added that there was “probably a route out of it,” in reference to the decisions LittleThings made leading up to its shut down. “Hindsight is 20/20,” said McCann.

2. Traffic sourcing strategies vary greatly.

Something to note in McCann’s comments about LittleThings was how they approached traffic sourcing. They relied almost solely on Facebook. Regardless of LittleThings’ fate, however, this showed one very specific approach to gaining an audience.

When the other panelists discussed their own strategies, it became evident that media companies can, and do, approach traffic sourcing in completely different ways.

Brian Madden of Hearst Digital discussed how the company “never wanted to focus on a single source of traffic.” They focused on multiple sources, to diversify their audience, maximize growth potential, and avoid having a heavy dependence on a single source (i.e. Facebook).

LittleThings and Hearst presented two contrary ways of seeking traffic. Regardless of outcome, however, neither one of these ways is right or wrong. They’re simply different.

3. In media, experimentation is key.

Throughout the panel, one of the consistent themes was that, for media companies, experimenting with different content platforms is crucial. Brian Madden spoke heavily on Hearst’s diligence with experimentation and how it has fueled their multi-platform  and overall success.

“We always knew something else was coming, so we wondered how we’d be first on every platform… Being able to experiment in a lot of different places has been key.”

Even in rehashing the story of LittleThings, Maia McCann stated that, if given a second chance, she would, “diversify traffic, hire people for SEO, look at YouTube, and look at Snapchat.” In other words, she wishes they had experimented with more platforms.

Experimentation allows media companies to better understand which platforms and audiences are the most profitable, and where they might be able to find long-term success.

4. Content should be “story”-driven.

One thing that Snapchat and Instagram do extremely well, is showcase content in a “story” format. Kieley Taylor of GroupM’s [m]PLATFORM expressed her thoughts that “Stories” and “Moments” would be a large factor in filling the Facebook void.

“The story-telling format that we’ve seen the most success with, is the ‘Stories’ format. The thing that is working across a lot of distribution points, where a lot of people are trying to spend their time, is ‘Stories.’ [i.e.] Instagram Stories, obviously Snapchat.”

She referred to this “mobile-first, social native” format as something of great value.

Not only should publishers and advertisers look to tell a story within their content, they should also look to utilize the “Stories” format on Snapchat and Instagram to communicate that content to their audience, and potentially fill the vertical content void left by Facebook.

5. SEO fuels long-term success.

Emily Cohn of Insider and Business Insider was a strong advocate for search engine optimization (SEO), especially as it relates to the long-term success and profitability of content.

“Search is our number one source of traffic,” said Cohn. “Around 80% of our search traffic is to stories that were not published today. One of our top-searched stories is from 2014. Search is valuable to us because it’s making our whole ten years’ worth of content really valuable.”

While media companies may find high rates of traffic from social media, a single viral post may not lead to long-term content profitability.

Maia McCann also expressed her belief in the value of SEO, saying that LittleThings got rid of their SEO team amidst company cuts, and that in hindsight, doing so was a “huge mistake.”

While these takeaways were certainly some of the highlights of the night, the entire panel was filled with many terrific questions from Marty Swant and the audience, and a ton of great insights. Overall, we learned there is a lot of opportunity out there through social media channels. Now, it is up to media outlets to harness and monetize that opportunity.

Perspectives

Answering publisher questions in the wake of the Facebook algorithm changes

Facebook’s recent newsfeed algorithm changes have left publishers with a lot of questions. Many who relied heavily on Facebook and other third-party distribution sites find themselves needing to look elsewhere. Now these publishers are focusing on building stronger on-site communities and finding other distribution platforms that are more publisher-friendly. They’re wondering about Facebook’s decision, how they will be affected, and what they should do next.

Since the algorithm change, here are some of the most common questions I’ve encountered in talks with publishers:

Why did Facebook make the decision to de-prioritize publisher content in its Feed?

As many entrepreneurs are, I see Mark Zuckerberg as someone who takes his business personally. While I don’t think he’d act against his own best interests, I do think his decision in some ways was a reaction to the polarization that the news can create. This way, Facebook is not choosing a side, or subjectively deciding which news is ‘appropriate’ and ‘real.’ It looks like they’re disengaging.

Are there specific ad formats/publisher inventory you believe will be hurt the most by Facebook’s decision?

It’s not so much about ad format, in my opinion. Facebook’s big appeal to publishers was the benefit of strong audience development and the convenience of content distribution. These will be the main things that disrupt publishers the most. Facebook actively courted publishers for years on end, promising them audience and shared revenue. This shift could be quite the loss for the publishers who relied heavily on the platform for audience development.

What 2-3 platforms could rise up to support publishers in the absence of Facebook?

I believe that Snapchat and Twitter both have the potential to benefit from Facebook’s shift. That being said, Snapchat is certainly the platform that will benefit the most. Their publisher-focused Discover Channels are central to the platform. Especially with the most recent interface update, Discover Channels are positioned in a way that is meant to drive as much user traffic as possible. Snapchat has certainly jumped into the lead role in providing a solution to publishers who were thrown off by Facebook’s changes. They are a publisher-friendly platform on the market right now.

Should publishers forget about third-party distribution and refocus on building engagement/audience on-site?

Publishers are always working to build on-site audiences. But of course, that’s much easier said than done. These third-party distribution platforms—like Facebook, Twitter, and Snapchat—help identify and grab that audience, making it easier to build those communities back on-site. The issue for some publishers is that they become too comfortable with third-party platforms and, in turn, rely too heavily on them. There will always be a happy medium for both, though, as third parties remain a great tool for audience engagement and content distribution.

Facebook’s shift has certainly stirred up some uncertainty among publishers, regarding whether or not third-party distribution platforms are a reliable tool, and if the risk outweighs the rewards. These publishers will ultimately find comfort in the publisher-friendly models of other third parties, specifically Snapchat—but they will also invest more time and resources into building core communities on-site.

Perspectives | Video

Vertical video, brand safety, consolidation, and Meredith: Four predictions for 2018

In 2017, the advertising industry — both buyers and sellers — experienced many changes that will shape the space moving forward. Some were related to the constantly advancing technology that has become so important in the category. Others dealt with an increased demand for greater transparency from partners.

So, with the New Year now underway, there are several areas that I believe are especially critical for the industry to pay attention to in the coming months. Here’s a closer look at four of them.

1. Sharp increase in vertical video.  

While Snapchat’s stock price is declining, at MediaRadar, we observe that the number of brands buying on their platform is rising sharply. One of the unexpected byproducts of Snapchat’s impact on the market is that those advertisers are now more actively running vertical video – everywhere. Simultaneously, we see more internet use of mobile phones than ever. As a result, we predict a continued, steady increase of vertical video as the vertical format becomes more common.

2. Brand safety becomes much more important.

In the beginning of 2017, it seemed like brand safety was a minor issue. However, ater repeated lapses at YouTube (and elsewhere), advertiser confidence is shaken. The scale of the problem is significant. YouTube CEO Susan Wojcicki is taking no chances. She announced she had hired 10,000 people to manually watch videos. And the WSJ’s overview on the people doing the clean-up paints a bleak portrait of what they’re up against. We predict brand safety becomes an important part of 2018 campaigns.

3. Ad tech consolidation.

We believe there will be fewer ad tech companies at the end of 2018. Here are the headwinds the industry faces. First, MediaRadar observes more MSAs between agencies and ad tech players than ever before. Ad spend is being increasingly consolidated and concentrated. Second, high-profile brand safety failures from 2017 are decreasing the amount of buying on programmatic. Third, follow-on investments by venture capital has declined sharply into ad tech firms. And, finally, companies that sell direct are becoming more sophisticated selling against programmatic, as well as co-opting programmatic for their own benefit.

4. Meredith rises.

Industry pundits are quick to fret about the negative impact of disintermediation on traditional media businesses. But disintermediation doesn’t actually favor the new vs. the old. Des Moines-based Meredith Corporation is a wonderful example of this. In the past 10 years, they have been careful buyers, scooping up assets from Gruner + Jahr, Disney, Martha Stewart, Selectable Media, AllRecipes.com, and now Time Inc. They’ve also had big success launching new brands, such as their mega-hit, Magnolia Journal, in 2017. The result is a company that will have approaching $5B in annual revenue. The stock has gone up 6X in the past 10 years. Meredith is clearly a recognized leader in the new media hegemony.

As we look ahead, expect vertical video, brand safety and consolidation – as well as the growth of Meredith Corporation – to be top-of-mind among advertisers in 2018. Closely following any developments in these areas will be crucial to their success next year, and beyond.

Advertising | Perspectives

How to tackle brand safety in programmatic, according to GroupM, Vox Media, The Trade Desk, LinkedIn, and Sizmek

The number of brands placing ads programmatically dropped 17% in April compared to the same period last year. The reason? Brand safety.

Left to Right: Tanya Dua, Business Insider; Joe Barone, Group M; Mike Caprio Sizmek; Matthew Hogg, LinkedIn;, Ryan Pauley, Vox; Kathleen Comer, The Trade Desk; Todd Krizelman, MediaRadar

Brands are more concerned than ever that their ads are being displayed next to offensive content. Things have escalated in light of the most recent YouTube scandal. As a result, some are beginning to shift programmatic spend. But is this the right move? How can agencies and brands better control quality? How can the industry improve?

Earlier this month, my company, MediaRadar, hosted a panel discussion around these questions and the future of programmatic. Panelists included top experts from GroupM, Vox Media, The Trade Desk, LinkedIn, and Sizmek.

Here are their thoughts.

Who’s to blame?

When asked who was at fault for the distrust within the programmatic supply chain, Joe Barone, Managing Partner, Brand Safety Americas for GroupM cited the system as a whole.

“I think it’s the programmatic supply chain,” Barone said. “Brand safety means a lot of different things to a lot of different people. One of the issues that’s very emotional for the client is brand equity associated with negative content. And it’s not even the biggest issue from a financial standpoint. There’s a lot of issues, which is why there are so many different ways to try to fix it.”

Similarly, Kathleen Comer, Vice President, Client Services at The Trade Desk, thinks it’s up to the industry as a whole to fix it. “I might focus less on blame and more on missed opportunity,” she said. “There are a lot of big-spending advertisers who are starting to reevaluate the transparency of our supply chain. And they’ve scrutinized us. To me, it’s all of our responsibility to fix it because that means there are budgets on the sidelines that haven’t been leveraged yet.”

How to fix it

The panelists also offered up solutions on how to make programmatic more transparent in the future. Mike Caprio, Chief Growth Officer at Sizmek, says that the company plans to deliver more transparency via one of the company’s recent acquisitions.

“We just made a recent acquisition of a company called Rocket Fuel,” said Mike. “And one of the big initiatives that we’re undertaking over the next couple of weeks is moving to a 100 percent transparent marketplace. For us, that means that we’re going to disclose every fee, every bit of inventory that’s blocking our platform, the viewability rates – everything that’s available. That’s the starting place where we can make sure buyers know what they’re getting from using our marketplace, by working with our supply partners to make sure everything is being disclosed, including fees.”

Matthew Hogg, Head of Programmatic at LinkedIn, believes it’s a complicated issue without a single solution. “With this kind of space, there’s no silver bullet. There’s no ‘hey, we’ve done this thing and it’s going to fix all of your transparency and trust needs and wants.’ But we’re trying to think very strategically. Big on our list of priorities is ads.txt, which I think is a step in the right direction.”

What still needs to be done

The discussion concluded with the panelists commenting on what they think still needs to be done. “I think the first thing that needs to be done is a behavior change,” said Ryan Pauley, VP, Revenue Operations & General Manager of Concert, Vox Media. “There’s enough technology and solutions today to make a real difference. Publishers need to make sure the inventory is viewable and leverage the ads.txt file. DSPs should do the same as trade desk. Marketers and clients need to assess the level of risk they’re willing to tolerate because they can manage it too. There are enough solutions in place that I think a few behavior changes can make a difference.”

Barone thinks that better attribution is the solution. “One of the biggest problems is that we give credit to things that never happen,” he said. “When this happens, you don’t even know what drove your business. If we could build better models and know what is working, it will be a huge benefit. Better attribution is a big part of the answer.”

At the end of the day, programmatic buyers are demanding a more transparent and brand-safe environment than ever. And while there’s no single, clear-cut solution, the industry will keep taking measures to mitigate the problem.

 

Advertising | Industry-Research | Perspectives

The state of programmatic native in 2017

Over the past year, advertisers have devoted more dollars to programmatic native than ever before. And it’s easy to see why. Programmatic native gives native scale, while bringing more efficiency and data-targeting into the equation. Nativo, TripleLift, Sharethrough, Unruly, and Bidtellect are some of the most well-known players/programmatic native exchanges in this space.

To get a clearer picture of today’s programmatic native ad market, my company, MediaRadar, pulled together some of the most pressing trends on the year so far.

It’s a growing market

The number of advertisers placing native in Q1 2017 was nearly identical to Q1 2016 (2,318 vs. 2,326 brands). However, there was a sharp increase in Q2 2017, where the number of advertisers grew 42%, from 2,100 to 2,981 native programmatic advertisers. Why the surge? Good performance. As I have shared previously, programmatic native is generally evaluated on the same KPIs as display. In a contest against most standard IAB ad display units, programmatic native scores well with high click-rates and engagement. And it can scale.

Penetration is low

Despite the fast rise in programmatic native, 122,241 brands were buying advertising online in the first half of the year. This means that as a% of total, only 2.5% of those brands buy native programmatic. We are only scratching the surface here. Even though large national brands make up the early adopters, there is still significant room for programmatic native to grow. This is welcome news for native exchanges that sell this kind of advertising. They know the opportunity is poised to grow substantially.

Renewal rates are mixed

While total numbers are strong, quarterly renewal rates on programmatic native remain challenged, with only 20% renewing. Specifically, the brands buying in the first half of 2017 share just 20% of the same brands from the first half of 2016. So, for programmatic native to continue its expansion, brands will have to recognize its benefits and make a long-term commitment to the format.

Campaign duration varies

Campaign duration remains short, with most native campaigns lasting a median of one month. In Q1 and Q2 2017, 14% and 20% of advertisers ran multi-month campaigns, respectively. During this time period, renewal rates on longer campaigns were much higher than shorter-term campaigns. This is why renewal rates and campaign duration are often tied together tangentially. Longer campaigns mean more of an opportunity to tweak and amend programs, which feeds into higher renewals.

Programmatic native is on the rise. And while there are some challenges – namely measuring performance of programmatic native and no definitive, standard set of metrics, as well as some market confusion about what programmatic native can offer – the benefits outweigh them. Yes, the market is still in its infancy – relative to its potential – but it’s becoming increasingly popular. And it has a lot of room to grow.

Industry-Research

Research finds that publishers rely on autoplay, but not without risk

Thanks to the increasing popularity of digital video, autoplay ads have become one of the most common forms of online video advertising. But that could change if Google and Apple have their way.

In recent months, both companies have hinted at browser-based features that will potentially curtail autoplay video’s impact. In April, for example, Google teased an ad-blocking feature in both the mobile and desktop versions of Chrome that would limit auto-start content. And in June, Apple unveiled an upcoming autoplay-video-blocking feature for its Safari browser. How might this impact proliferation and adoption of autoplay among publishers? To answer this question, we first need to know how many publishers rely on auto-start video inventory.

The Big Picture

At MediaRadar, we examined nearly 63,000 video ads from January to June of this year to get a better sense of how the industry is reacting. Here’s what we found:

  • Nearly one-third (31%) of publishers auto-start 75% or more of their on-site video ad inventory.
  • Roughly another third (30%) of publishers auto-start between 50 and 75% of their video ads.
  • Just under 40% of publishers are less reliant on autoplay video ads, auto-starting 50% or less of their inventory.

So what do these findings mean for digital publishing/advertising? Here’s a closer look.

Websites that use auto-start ads stick with them.

Among our study’s three segments that embrace autoplay video ads, there’s no broad shift in websites reducing their dependency on auto-start video inventory. In fact, we see exceptionally low variance month-to-month. Most sites have chosen a model and stayed with it consistently in 2017. It’s also worth noting that there isn’t one singular type of media company that supports autostart ads – they can be seen practically everywhere.

There are some commonalities across the types of publishers using auto-play.

Publishers that use auto-start video ads the most have some commonalities. Smaller websites – think niche, regional, enthusiast, business-to-business, as examples – have fewer overall impressions. This likely drives the need for video inventory, which is sold at a higher cost per impression. These same websites have the highest incidence of autoplay video advertising. This shouldn’t necessarily be interpreted as bad news. Presumably, video ads running on these sites are highly-targeted and likely to be well-received. Sites reliant on programmatic advertising were also more likely to employ auto-start video.

How might Google and Apple shake things up here?

While the threat of Google Chrome stripping out auto-start videos is real, it’s not imminent — at least not yet. Based on past experience – like with Google AMP, for example – we found that most publishers have taken a wait-and-see approach before making a change in their business practices. Apple could be a more interesting company to watch as their advertising interests are limited. They have no dog in the auto-play fight, so to speak, and could dramatically disrupt things for publishers and advertisers if they decide to block these units more aggressively via pre-installed software or hardware.

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