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Perspectives

DCN’s must reads: week of April 19, 2018

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Here are some of the best media stories our team has read so far this week:

Innovation | Perspectives

News aggregators, Flipboard make a comeback as Facebook falters

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Mark Zuckerberg may be all over the news lately, but thanks to Facebook’s algorithm change, there’s a chance you may not be seeing much about it on Facebook itself. So where are people going for news now?

They may be returning to news aggregation and curation apps, which have had their ups and downs over the years. The fact is that less news on Facebook means more opportunities to distribute news via other platforms. Though there’s still a strong incumbent advantage by tech companies like Google and Apple. Some of the upstart news apps are using machine learning and AI to better serve users. And one thing is certain: Publishers have more freedom to experiment and see what works outside of Facebook.

Digital Magazines Make a Comeback

The “digital magazine app” Flipboard was something of a media darling after it was first released in 2010, and has raised more than $200 million in funding over the years. While conversation around it has largely been muted for the past few years, the company still attracts 100 million monthly users, and its users have generated 35 million “magazines” to flip through. After Google, Facebook and Twitter, it’s the number four traffic source for digital publications, according to Parsely.

Given Flipboard’s popularity and longevity, it’s in a prime position to toot its own horn and make itself relevant, reliable and profitable, especially as Facebook continues to cope with data scandals. As CEO Mike McCue told Axios’ Kia Kokalitcheva and Ina Fried, “As people start to realize they need a place to reliably go to read about the things they care about, it’s time for us to seize that moment, whether it is on the product or on the management team.”

So it’s no wonder Flipboard recently hired former Spotify and AOL executive Kal Amin to serve as its new chief operating officer, the latest in a string of new hires. In a world of fake news, Flipboard can focus even more on human curation. If the company stays on track, keeps expenses to a minimum, and finally reaches profitability, its app could be a win-win for Flipboard, publishers and users.

Machine Learning and Bursting Your Filter Bubble

While Flipboard users can personalize the app toward their interests and therefore see more content they are interested in from the get-go, other apps are distinguishing themselves by prioritizing popping peoples’ filter bubbles. Take the startup Knowhere, which uses machine learning to create articles that are then reviewed by human curators. It also allows users to toggle between reading versions of a political or polarizing story written from a left, right or “impartial” perspective.

BuzzFeed has launched an “Outside Your Bubble” feature on some of its articles, and researchers at MIT have released a Chrome extension that allows Twitter users to “flip their feed.” However, the use of machine learning to create multiple versions of the same article is a new twist to addressing a recognized problem.

And machine learning is becoming more popular globally. In Japan, one of the most popular news apps, SmartNews, uses machine learning. The Norwegian news aggregator app Sol also uses a combination of algorithms and human editors to engage users. The company has 50,000 daily unique users and adds a small but steady 5,000 new users a week, according to its CEO. And half of the users who register with the app agree to use a chatbot assistant to curate their content. Therefore, it’s not necessarily that machine learning will take over any preferred human curation. It looks like it will be used to augment curation according to taste and needs.

Tough Competition for Aggregators

The major hurdle for all these new startups and apps, though, is that there is entrenched competition beyond just Facebook. Apple News is the default news app on iPhones and iPads. Admittedly, its user base is small given the number of iOS devices around the world. However, there are plenty of consumers uninterested in researching and downloading new apps can who can easily turn to it. And although Google’s Feed, which was released last year, hasn’t quite reached epic numbers, Google still dominates search and driving traffic to publishers through Google News and AMP.

And with Facebook’s massive (if declining) user base, it’s hard to really count out the social giant. Even the CEO and founder of Nuzzel, a news app that surfaces trending content across different social media platforms, acknowledges that Facebook will still likely hold a big lead. “Even if people get a little less news on Facebook, more people will still get more news on Facebook than most other places,” Nuzzel CEO Jonathan Abrams told Mashable’s Karissa Bell.

And when the founders of Sol realized it needed to encourage users to download the app, it did the obvious: It advertised the app on Facebook and Instagram, and went from number 17 to number 1 among free apps in Norway’s Apple App Store.

All that said, the time is ripe for news aggregators to finally break through and make a difference. There is an opportunity to stand out with customized content, better data security, respect for consumer privacy, and the appeal of being something other than Facebook.

Perspectives

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

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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.

Marketing | Perspectives

Google to publishers on GDPR: “Take it or leave it”

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In a blog post a few weeks ago, Google announced how its ad-serving technologies will comply with the EU’s GDPR. In short, Google will control all the data on the publisher site (not just data related to serving an ad) and their publisher “partners” will take all the liability for getting consent from consumers. Oh, and by the way, Google won’t provide any specificity (as required by GDPR) about how they intend to use the consumer’s data. “Google can demand such lopsided terms because they, along with Facebook, dominate the ad-serving marketplace.” But really: This is just another example of monopolists doing what monopolists do.

Looking past the strong-arm tactics of Google, however, this is a deeply flawed approach that does not meet the spirit or letter of the GDPR. We commissioned a legal analysis of the Google proposal, which you can read in depth here.

Let’s touch on the key points:

Google as a Controller

Under GDPR, there are “controllers” and “processors.” A Controller alone or jointly with others, “determines the purposes and means of the processing of personal data” (see GDPR Article 4(7)).

Processors have no independent right to use data because they only process data on behalf and at the direction of a controller. (This is a gross oversimplification of the terms and there are a host of obligations on both kinds of companies. To read the actual text of the GDPR, go here. In the meantime, for the purposes of this post, we’ll move on.)

Controller companies need to rely on one of six legal bases to process personal data of an EU citizen. The most talked-about legal basis is consent. Under GDPR, a company can legally process personal data if it gets clear, affirmative, opt-in consent from a consumer for each data use. Google’s proposal claims they will be a “controller” of data in their capacity of serving ads, which probably makes sense since they hold an enormous amount of data that they use to personalize ads and they would like to continue collecting data as they serve an ad to help target ads to the consumer in the future.

However, Google’s proposed terms go a step further by claiming that it will be a “controller” of all the data on a publisher’s site (not just what they need to serve the ad). By declaring itself a controller over all the data on a publisher’s site, Google is asserting independent control of a publisher’s audience data. This is a massive land grab by the already-dominant Google.

Consent

Google’s proposal also requires publishers to get consent from consumers for Google’s activities. Let’s put aside the fact that Google has its own consumer-facing properties where it could get consent. Google says it won’t serve ads on a publisher’s site if the publisher doesn’t get consent for Google and do so in any way that Google likes.

There are multiple problems with this heavy-handed approach. As noted above, the GDPR requires companies to obtain clear, affirmative, opt-in consent for each data use. Yet, Google provides no information about how it would use the data and, thus, publishers are left in the dark while shouldering all of the liability. Even if they could get consumers to give their consent for Google, the consent would surely be ruled invalid because the publisher can’t provide the consumer any transparency about how their data will be used. Only Google can do that, but they won’t – likely for competitive reasons.

The other problem is that this approach conflates consent for Google with consent for other purposes that consumers might be more likely to provide. In practice, when an EU citizen visits a site, the publisher would have to ask consumers for consent for Google (and all the as-yet-unknown data uses) along with consent for email marketing or location information for the purposes of personalizing news. Lastly, under Google’s terms, they re-assign all of their liability for GDPR compliance (and the fines of up to 4% of global revenue) to the publisher. Google is trying to have its cake and eat it too and then send the bill to publishers.

Non-Personalized Ad Solution

In a tiny footnote of the Google announcement, Google promises to roll out a solution for serving non-personalized ads. Presumably, under this solution, Google would simply serve contextual ads at the direction of the publisher. Perhaps they would even relegate themselves to the role of a processor. It’s unclear whether they think they have a “legitimate interest” (another legal basis to process data) to collect data for other purposes. Suffice to say there are a lot of questions about this solution and whether publishers could rely on it.

With a mere six weeks left until GDPR enforcement, Google has unilaterally rolled out terms at the last minute that it hopes the industry will simply accept. Instead of acting like a good partner, Google is offering a “take it or leave it” approach while prioritizing its dominant marketplace position. The GDPR was not intended to be used as a tool to further entrench Google’s dominance, it was intended to provide greater transparency and choice for consumers over how their data is collected and used. Publishers and regulators should call them out and demand terms that meet the spirit and letter of the law.

Note: Opener art adapted from an original created by  Tdorante10 and is used under a Creative Commons license.
Perspectives

DCN’s must reads: week of April 12, 2018

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Here are some of the best media stories our team has read so far this week:

 

 

Innovation | Perspectives

Publishers need to work together—not against each other

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Recently, a close family friend said “I actually liked getting my news on Facebook. It was relevant for me and easy.” We went on to discuss Facebook’s focus on “time well spent” and how the social network plans to emphasize content shared by family and friends. However, lovers of the News Feed on Facebook have certainly not been the only ones affected. Given that they are on the losing end of Facebook’s algorithmic attention deficit disorder, publishers need to give some thought to the ways in which they will continue to attract high quality audiences. 

In fact, publishers should seriously consider working together on this one. An option that isn’t getting enough attention is allocating part of their owned and operated pages for other premium publishers’ content. This would allow publishers to recapture the monetization, brand awareness, and data they’ve lost from Facebook while creating a healthier ecosystem for all. If done properly, publishers will have an audience that is more engaged, something the early data from Outbrain’s Sphere initiative has proven out. Put another way, audiences referred between premium publishers are simply more engaged than folks who come via social referrals.

Facebook audiences were always a challenge, mostly “side-door” with high bounce rates. But, it was a trade-off most publishers accepted until their brand awareness, monetization opportunities, and knowledge about readers were undermined by Facebook’s decision. Rather than relying solely on Facebook, publishers have an opportunity to band together and expand the personalized discovery experience to include other premium publishers. By linking out to other publishers and gaining the benefit of similar inbound audiences, publishers can establish a “flywheel effect” that nets them either referral revenue or engaged inbound audiences. Win, win!

Three important characteristics are needed to ensure such an audience exchange is truly reader-focused. First, transitioning audiences between publishers can’t be based on a ratio, whether 1-to-1 or 1-to-many. The reader wants the best experience possible and by requiring content from a publisher to meet ratio requirements, the reader will get overlooked. Second, publishers must have the controls and input to decide what other publishers are allowed in the club. Third, data must be provided to all participants that clearly shows the number of engaged users in order to prove out the value of the exchange.

While these three characteristics are critical, the biggest concern we hear is “why should I link to a competitor?” Given the changes in the landscape over the last several years should we all rethink our competitive set? Do I compete with publishers or social platforms for readers? In his 2007 article New Rule: Do What You Do Best and Link to the Rest, Jeff Jarvis discusses the benefits of linking to other publishers. Frederic Filloux built on this idea in Why Publishers Should Consider the “Smart Curation” Market, which supports selective linking based on editorial preference. These are great examples for linking to other publishers meant to create a healthy and vibrant ecosystem while establishing trust with readers.

Bottom line: Providing readers the best discovery experience, even linking to other publishers,  establishes a deeper level of trust that will pay-off for everyone in the long-run.

Marketing | Perspectives

The time is now: Make aggressive moves to win market share

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It’s been a common theme of mine and this publication for months, but it bears repeating: The Facebook and Google duopoly have never been more vulnerable. So, the time is right for publishers to double down on proven tactics and test new ones in pursuit of gaining market share.

If you still need convincing of market conditions, consider the news of just this week from three of the most influential publications on the planet:

  • A coalition of 20 consumer groups are about to file a federal complaint against YouTube/Google for violating a children’s privacy law (NY Times)
  • Facebook’s CEO admitted to a “huge mistake”, and the platform may have leaked info from 87 million users (Wall Street Journal)
  • A lawmaker said the scandals plaguing the social media giant might be “too big” for it to fix alone, and that he might “be in favor of regulating Facebook” (Washington Post)

This coverage is, of course, in addition to the real whopper involving Russian meddling in the most recent U.S. presidential election. These venerable newspapers – which collectively influence millions directly, and tens of millions indirectly – are singing from the same hymnbook. When it comes to the duopoly, they are on the attack. It’s not so much that Google and Facebook have been consistently bad actors, necessarily. But let’s face it, Congressional hearings and privacy problems make great copy. Or, maybe it’s personal. No matter –  this is happening either way.

A Perfect Storm

Several overlapping and intersecting factors, occurring over many years, have lead to today’s market conditions: shifting consumer needs and market demand; thinly-veiled, monopolistic corporate behavior characterized by overreach and insufficient self-governance; and unintended consequences of streamlining the advertising supply chain. To be sure, the past decade has been tumultuous. But the current state of affairs in digital advertising will not come as a surprise to DCN community members.

To wit: Last week, Mark Glaser warned publishers to be careful about gloating in the wake of Facebook’s troubles – sage advice. Last month, DCN CEO Jason Kint addressed Google’s “battle with transparency” when reporting its massive digital advertising revenues. And at the beginning of the year, I offered techniques for publishers to employ to sell more advertising to media buyers via easily digestible sales tools,an emphasis on branding, and formidable client service. Even with all this attention, however, I don’t know that the community expected the situation to get *this hot* for the duopoly.

Having experienced extraordinarily challenging conditions since the late 2000s – and being in the unenviable position of shrinking in the face of a growing, ancillary market –– publishers now have a compelling talking point, a reason to reach out to customers, prospects, partners, and the press. Certainly, behaviors change slowly. Customers are risk-averse, and no one has “gotten fired for buying ads from Google and Facebook” in quite awhile. Now, if only for reasons of diligence, media buyers now have to pick their heads up from Google and Facebook dashboards and assess alternatives.

If Not Now, When?

Last year, and for the first time, companies spent more on digital advertising than TV spots. We all saw this coming, but it actually happened last year, and it signaled an official changing-of-the-guard in the industry. Most professional prognosticators believe digital ad spending will continue to grow for the foreseeable future, to eventually capture 40% or more of the overall marketplace.

Publishers certainly continue to face meaningful growth challenges. However, it’s difficult to imagine conditions being more fertile than today for building market share. The time is right for making aggressive moves. 

Tim Bourgeois (@ChiefDigOfficer) is a management consultant at East Coast Catalyst, a Boston-based digital strategy agency.

Perspectives

DCN’s must reads: week of April 5, 2018

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Here are some of the best media stories our team has read so far this week:

Perspectives

Before gloating over the latest Facebook scandal, publishers should get their data houses in order

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Facebook has been under fire ever since the revelation that it allowed the political consulting firm Cambridge Analytica to harvest user data and use that information as fodder for the Trump campaign. While outrage against the social media giant is warranted, we also ought to be concerned about the entire digital advertising ecosystem, where everyone — including publishers — is on the hunt for data.

Indeed, rather than just pointing at Facebook, feeling smug and a bit of schadenfreude, publishers and advertisers should take a deeper look at their own practices. And how about going even further: Take a leading role in ensuring user privacy. Think about what you can do to make sure data hunger doesn’t comprise user interest.

Walled Garden War

Anger toward Facebook isn’t anything new for media companies and publishers. If anything, the Cambridge Analytica scandal is just one point on a timeline documenting publishers’ tempestuous relationship with Facebook. At a recent Platforms + Publishers roundtable I produced at Facebook, there were plenty of angry small publishers who pointed to a loss of 50% or more of Facebook-referred traffic. Someone even mentioned that going to Facebook was like going back to an abusive partner. You think things are getting better and then, smack! you are hit with an algorithm change and a poisonous political data scandal.

As Axios’ Scott Rosenberg put it, the current fury against Facebook is personal for journalists because they, along with their institutions, blame Facebook (as well as other tech behemoths like Google) “for seducing their readers, impoverishing their employees, and killing off their jobs.” Given the stronghold Facebook and Google have over the digital advertising industry — which has also rendered publishers and advertisers dependent on the duopoly — any backlash that can knock down these tech companies, even a little, stands to make things better for their competitors and the ecosystem at large.

Data Hypocrisy 

But there are a couple fallacies with that kind of thinking. First, Facebook has played a crucial role in helping news outlets reach their audiences where their audiences are. And it’s no secret that the micro-targeting of a news item to user — based on the data gathered — worked to help the publisher, even if publishers always felt they were on the losing end of the relationship. And Facebook has certainly made a much bigger effort at helping to drive memberships, donations and subscriptions to publishers; in fact, that was the overarching theme of the roundtable I produced at Facebook.

And secondly: While it’s easy to nurture a grudge against Facebook, it’s harder to understand the complex relationships between publishers and platforms – where there can be collaboration and animosity. National outlets may be more vocal about their criticism around Facebook’s ability to adequately compensate publishers. However, local publishers in particular see Facebook, Google and other major tech platforms as potential allies that can help elevate their standing, and help them compete with national outlets.

Not only that, but consider BuzzFeed’s Mark Di Stefano’s scoop that both The Economist and the Financial Times hired Cambridge Analytica to help them grow their subscriber base in the United States. It’s unclear whether the data benefited the two British companies, but clearly, that’s what they were looking for. As media and tech thinker Doc Searls accurately notes, news publishers are also guilty of using third-party tracking apps that return internet advertising to their users. But, as everyone is now realizing, there’s no guarantee what actually happens to that data. “What will happen when the [New York] Times, the New Yorker and other pubs own up to the simple fact that they are just as guilty as Facebook of leaking its readers’ data to other parties, for—in many if not most cases—God knows what purposes besides ‘interest-based’ advertising?” Searls wrote on his Harvard blog.

Taking the Lead

To be sure, the momentum against Facebook (and Google) has been piling up for some time, and the latest scandal is unlike any other that has reached Facebook. As the company reels in the aftermath of the Cambridge Analytica data leaks, it’s cut third-party data providers out of its ad targeting, added safeguards like an email certification tool for marketers, emphasized its support for local news publishers, and considered more heavily its approach to data collection. Mark Zuckerberg has been forced to discuss the crisis in an apology tour with various news outlets and journalists. It’s safe to say Facebook knows its product (and reputation) is on the line.

But the best reckoning publishers could have right now is not about Facebook, but themselves — and the steps they can take to make sure they have their own data houses in order. As the Association of National Advertisers put it in a statement, “In truth, the Cambridge Analytica controversy is greater than Facebook alone…It’s a brand reputation and data security risk for every ANA member that advertises and monetizes brands on online and mobile outlets.”

One huge step, already started by the Advertising Research Foundation (ARF), is to call for new industry guidelines and standards around data collection that also focuses on prioritizing user protection. The ARF has invited other industry bodies to contribute to the endeavor; now it’s up to the rest of the players in the digital advertising ecosystem, publishers and advertisers included, to do their share to ensure a safer internet. Data is the ultimate feast for everyone, but if the hunger for it leads to toxic consequences, it poisons the entire body.

Innovation | Perspectives | Revenue

Why many mobile ad experiences fail and how to make yours work

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Mobile is as personal as it gets. That’s why people feel annoyed when mobile ads delivered to their devices and apps are a mismatch with their desires and expectations. To cut out unwanted noise and shut out ads that deliver a poor user experience, consumers are reaching in record numbers to mobile ad-blocking technology. Unfortunately, bad ad experiences don’t only alienate and frustrate consumers; they also deprive publishers of an important chance to monetize their assets and audiences.

So, what is a bad ad experience?  Unsurprisingly, ads that disrupt or distort content people are trying to read or enjoy lead the list of most “hated” annoyances, according to research from Nieman Norman Group. Pop-up ads, auto-playing video with sound, interstitial ads that must be viewed before content can be viewed, and postitial ads that obscure the content or just breaking the browsing flow are ad approaches and formats that people want to avoid.

Naturally, in the Age of Personalization—marked by milestone studies that reveal 78% of consumers said they would be happy to receive mobile advertising that is relevant to their interests—mobile ads that are out of sync with people’s interests and context are also a “fail.” However, this doesn’t appear to deter publishers and brand marketers from plowing huge amounts of money into mobile ads that people ignore.

It’s a dynamic that threatens to bankrupt the entire digital ecosystem. At one level, mobile ad spend is rising into the stratosphere. Research firm eMarketer reckons ad spend in the U.S. alone, which accounted for 66% of all digital ad spend in 2017, will increase to 72% (or $65.8 billion) in 2019. At the other end of the spectrum, the vast majority of brands and publishers are wasting budget ads that fail to inspire or influence consumer behavior.

Dangerous Disconnect

New research based on internal data from Verve, a location-based mobile marketing platform that connects advertisers with consumers, puts this dangerous disconnect into perspective. Over half (56%) of respondents surveyed in the U.K. think most ads they see on their mobile phones are “boring or dull.” As a result, the average person in the U.K. ignores 7 mobile ads each day. When looking at the national population, this figure translates to a massive 20 million. “In their current state,” Verve reports, “mobile ads are not making the cut.”

Only one in ten respondents (11%) believed their mobile ads were genuinely helpful. This figure increased significantly with the quality of the mobile ad experience. While just 17% said they were “likely” or “very likely” to interact with a generic ad on their phones, over twice that number (38%) said they would do so it the ad was related to their interests or hobbie. And 34% said they would engage if the ad was related to where they were at that particular time.

Lack of relevancy is part of the problem, lack of imagination is the other. A 2017 survey of 100 advertisers and 1,000 consumers regarding their recent experiences and preferences toward mobile ads conducted by Forrester Consulting and commissioned by digital advertising creative management platform Celtra found that poor creatives may be at the core of bad ad experiences.

The study revealed that more than two-thirds of advertisers believe at least half of their mobile advertising budget is wasted, sunk into the development and deployment of mobile ads that can even harm their brand image. In fact, a whopping 73% of all mobile ads seen in a typical day fail to create a positive user experience.  “The overall digital content experience is littered with creatively uninspired ads, irrelevant ads, and intrusive ads with slow load times,” the report states. “The consumer experience has gone terribly wrong.”

The solution is more engaging ad creatives. Companies that crack the code, using creatives that are more relevant and less disruptive are sure to see improved customer response rates and higher brand recognition, the report concludes. As Mihael Mikek, Celtra founder and CEO, put it in a press release at the time: “Smart advertisers have a significant market opportunity to drive high levels of customer engagement and sustained competitive advantage by leveraging strong creative in their mobile ad campaigns.”

Vendor spin aside, the data suggests positive mobile ad experiences promote positive consumer perceptions and influence actions. The findings also support my personal view that the ability to craft and evaluate effective mobile ad and in-app creatives is at the core of what marketers must learn and master to ensure their campaigns move the needle, not miss the mark.

Inspirational and Relatable

Effective marketers follow the data to determine what works. “But it’s not just about amassing Big Data,” Haydon Young, Director of User Acquisition at Dots, writes in an insightful post. “It’s about creating a Big Picture view of your users by blending what you know about them in the digital world of mobile and apps with what you observe about them in the “real world”.

He recalls how a re-think of ad creatives rocketed conversion rates for Covet Fashion – an app for fashionistas and the shopping obsessed. Observing shoppers in real-life, at malls and shops, helped his team architect an ad experience catered to its unique audience demographics (“moms, daughters, sisters, aunts, grandmothers, and everything in-between”). It allowed them to align with their aspirations (“a vast and diverse group of races and body types united by the singular desire to be a part of the fashion and beauty world”). Rather than use ad creatives that depicted super-models, he removed the faces altogether. This encouraged users to picture themselves in the clothes and look they wanted most. The creatives worked because they spoke to the audience ambition to be and look amazing.

The takeaway: Ad creatives succeed when they address audience demographics and desires and encourage people to unlock their real potential. It’s no coincidence that brand creatives “rooted in real life” are crushing it, according to the Global Marketing 2018 Trends study from Freedman International. From fashion brand ASO that refused to photoshop models in its ads to Fitbit that has switched from using professional athletes to showcasing average people working out, companies are winning audiences with imagery that portrays the real world as it really is.

Test for Success

Authenticity is a must across the entire ad experience. Be upfront about what your app offers and choose mobile ad creatives that are descriptive, not deceptive.

“The most important thing to do creatively [in the ad] is to show users what the experience is within the app,” observes Helene Trompeter, Media Manager at The Weather Company and a Mobile Hero recognized for her app marketing accomplishments. “Being straightforward and visualizing the benefit of your app capabilities [in the ad creative] almost always outperforms lifestyle imagery.”

Even the coolest creatives won’t appeal to everyone in your customer base. So, use data to develop effective segmentation and targeting strategies. “Ad copy and images may perform differently depending on user demographics, operating systems, and interests,” Trompeter explains. Choosing the right creative for the right audience is an ongoing task that requires the discipline to test and the courage to innovate. It can be a daunting task, but Trompeter tells me there are some shortcuts. Dynamic ads and creative templates can remove a lot of the heavy-lifting, making it easy for marketers to mix and match hundreds of creative variations to ensure mobile ads are fresh, relevant and engaging.

Trompeter achieves this by applying what she calls the “80/20 rule.” In practice, she runs “about 80% of budget toward historical performers and 20% toward testing.” It’s a smart approach that recognizes the hard truth about effective advertising. Marketers have to focus ad spend on what is proven to work. However, they also need to experiment with ideas and ad elements that take them outside their comfort zone.

Push the Boundaries

Verve Foundry can use part of the screen or all of it to create an animated experience.

Meaningful and effective mobile ads follow the data and demographics to appeal to the target audience. But using the right ad format can also make a huge difference. Walter T. Geer III, VP and Creative Director at Verve, tells me new ad formats that build on existing ways people interact with the mobile Web and apps on their devices are boosting audience engagement. “Scroll, pinch, swipe—it’s all about delivering the best possible ad experience with ad formats that let consumers use their fingers and put them in control.”

The days of using the consumer’s mobile device as a “launching pad” for ads that disrupt and annoy are over, Geer says. “The future is about creating an opportunity that is cohesive to the device and using the data to ensure mobile ads deliver the right opportunity and one that is relevant to the individual.” This is also where ad formats that “augment and enhance user activities” play a major role, enabling a positive brand experience and driving closer customer connection.

A prime example is Canopy Onscroll, a new ad format developed by Verve that combines two engaging experiences into one without interrupting the consumer’s core app experience. Animation beyond the banner activates when scrolling. “It’s one of our highest engaging ad units and a great example of how giving users choices. In this case, showing subtle animation completely activated by scrolling—is capturing people’s attention with advertising that is effective, not intrusive.”

Effective and emotive mobile ad creatives are a huge departure from the annoying screen-takeovers and one-size-fits-all ad experiences that characterized the early days of digital marketing. Stronger creatives, real-life imagery, and innovative formats that push the envelope point the way to positive ad experiences that will engage, motivate, and activate consumers.

Perspectives | Revenue

Advertiser concern about journalism’s fate should be due diligence, not philanthropy

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What role do advertisers play in the state, or the plight, of contemporary journalism? What role should they play?

Jim Rutenberg’s New York Times piece last year entitled “Ad Buyers Have a Say in Whether Real News Survives” generated some discussion in both news and advertising circles around these questions.

Particularly, people debated his proposition that marketers should “do their part to support” quality journalism. Ben Thompson called Rutenberg’s piece a “rather fanciful suggestion” because advertisers “are (rightly) motivated by what is best for their business.” Meanwhile, an anonymous ad buyer told Shareen Pathak at Digiday that it’s particularly difficult to “hold up products that people don’t want. I don’t see corporations getting into that business. And I don’t see my agency recommending they do.”

I’m sympathetic to the point that agencies and brands shouldn’t be responsible for providing philanthropic support of companies running for-profit news organizations. After all, there’s always the option to provide underwriting for non-profit news organizations if we’re talking about patronage. However, Rutenberg’s piece, and the discussion around it, moves us into potentially productive ground for the contemporary debate about a crisis of trust in news organizations.

Successful Self-Interest

Advertisers should care about the plight of for-profit journalism, but not for the sake of altruism. Instead, advertisers should be motivated by their own self-interest to push back against what they’re being sold—the clickbait headlines, incendiary pieces, and partisan chest-thumping that are perpetuated by business models not optimized for long-term vision, and the difficulty publishers have changing what they’re offering as long as they’re still finding ways to recalibrate the machine to bring decent profits in the door.

For-profit newsrooms have continued down these paths in the past few years because advertisers have been buying it, and many advertisers have continued buying it in part because it’s what publishers are hawking. Thus, it is indeed imperative for marketers to be at the table in this conversation about the current state of journalism, if we’re going to break such cycles.

In fact, I’d argue advertisers are currently in the business of frequently propping up broken media business models that aren’t operating in their brands’ self-interest. Changing contemporary advertising practices would be in the service of getting out of supporting bad for-profit journalism practices.

Marketers shouldn’t automatically trust that publishers are acting in the best interest of their own audiences or the long-term viability of their advertising products, since for-profit newsrooms are heavily driven by monthly and quarterly profit goals, and the tactics that can reliably can reach them.

It’s up to brands and their agencies to think carefully about whether the ad units available to them might negatively impact trust in their brands over time, or else how engaging in advertising offerings only hastily strategized by their publishers might diminish the effectiveness of those products over the long term.

Wrestling with Metrics

And that gets us to the need for marketers to recognize the digital publishing industry’s brand of “kayfabe.” In pro wrestling circles, kayfabe refers to all efforts meant to preserve the fiction of the industry—a collective con over the “marks” they sell their performance to. For digital publishers living off venture capital, this is the sort of “investor storytime” Ethan Zuckerman writes about—creating the best story for getting continued investment.

The kayfabe aimed at marketers comes in the form of creating the best possible amalgamation of numbers to emphasize their reach and sell the ad units easiest to monetize. It might include uniques or clicks without getting into specifics about bounce rates. It might include emphasizing video views on social channels while steering clear of video completion rates. It might include packaged traffic numbers that includes ad inventory the brand sells for a network of otherwise unaffiliated publications.

Of course, marketing and communications departments are sometimes complicit in the lies the metrics tell, too. Like the professional wrestling fans who are actually not marks but are instead “in on the con,” ad buyers, agencies, and brand managers are sometimes playing their part to maintain kayfabe as well. It’s easy to accept numbers which—internally—will impress the rest of corporate leadership, shareholders, and others, ensuring that marketing is considered as certain a bet for investment as other corporate functions—no matter how connected to reality they might be.

Business Sense

Responses to Rutenberg’s piece last year pointed out that the ethical duty of marketing professionals lie with making the best investment possible for the organizations whose budgets they oversee. That should involve a healthier skepticism than ever in what’s being sold, and it should also account for a negative calculation in the ROI: the risk that certain ad products/buys might have the effect of slightly eroding the reputation and trust accrued by the brand over time. The efficacy and economy of advertising opportunities on offer sometimes appear appealing only because no room is given in the model for the negative effects they might have.

The unsettling truth is that for-profit digital newsrooms, in many cases, have the same basic business model as partisan commentary sites and fake news publications. And, in that case, journalistic ethics and process just become “cost centers,” because the ad units they sell and the way that they sell them don’t make any use of the premium the publisher’s reputation should afford. In the process, it means they are focusing on business models that are further damaging the trust between publisher and audience.

Marketers who haven’t revisited their approach shouldn’t change their ad-buying practices because of altruism. They should change their practices because what they’re currently doing isn’t sound business.

Sam Ford is a media consultant and research affiliate with MIT Comparative Media Studies/Writing, based in Bowling Green, Ky. He is also a Knight News Innovation Fellow with Columbia University’s Tow Center for Digital Journalism and an instructor in the Popular Culture Studies Program at Western Kentucky University. Follow him on Twitter @Sam_Ford.

Perspectives

DCN’s must reads: week of March 29, 2018

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Here are some of the best media stories our team has read so far this week: