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Perspectives

DCN’s must reads: week of May 23, 2019

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

Perspectives

Google Chrome cracks down on tracking cookies. But who should make the rules?

Google has joined the likes of Apple Safari and Mozilla Firefox on the privacy front by offering users of Chrome the chance to disable or remove third-party tracking cookies. Last week, the company announced three protections that will soon be coming to the world’s most widely used web browser:

  1. In order to access consumers, developers will be required to specify – with attributes – which cookies contain user tracking and cross-site capabilities.
  2. Chrome users will be able to access this information and delete all cookies without affecting those which are active on a single domain (e.g., login, settings, site preferences).
  3. The browser will “aggressively restrict” fingerprinting techniques used by websites to identify browsers without a tracking cookie, though Google is vague on what this entails.

In today’s environment, it shouldn’t come as a surprise that one of the biggest players in online advertising and data-tracking is coming down hard on third parties (even if they don’t have a stellar track record with tracking). Let’s take a critical look at this new direction, starting with the positives.

The good

In the past, measures to crack down on data privacy abuse have swung between ruthless and milquetoast. Safari’s Intelligent Tracking Protection (ITP) has been called “nuclear” [by pundits for crippling trackers right out of the box, a measure that users rarely bother to disarm.

As a cornerstone of the digital ecosystem, Google understands the importance of data tracking for online publishers, acknowledging on its blog that cookies “play an important part of the web experience today,” It went on to add:

“Blunt solutions that block all cookies can significantly degrade the simple web experience that you know today, while heuristic-based approaches—where the browser guesses at a cookie’s purpose—make the web unpredictable for developers.”

Chrome’s new privacy features differentiate themselves by providing, in outline, a standard for transparency that eliminates guesswork and ostensibly leaves users in charge of their web experience.

This approach is both more balanced and precise than the wide bat swung by some competitors. These approaches challenged publishers to take inventory of the cookies they drop, and to use them in a more responsible way.

But not everyone is convinced that Google should wield its power over the web this way.

The bad

With a natural vested interest in its own data-driven products and services, some wonder whether the new privacy standards will apply to Google itself. While the company insists that they will, its power to act otherwise points to a larger problem.

We have heard time and time again that “data is currency,” and that’s true. Organizations depend on it for every step of the business cycle, from lead acquisition to customer service. However, with customer bases collectively exceeding half the global population, tech giants like Google  and Facebook have as much data as they could possibly want.

Even assuming the best of intentions on their behalf, we still must ask: Should privacy standards be determined and enforced by the very organizations who stand to benefit the most from them?

The battle for control

The drive for more and more data has given rise to the advertising crisis as we know it today. In the face of invasive third-party trackers, malvertising, performance issues, data breaches and other privacy infringements, consumer trust is at an all-time low.

One thing is increasingly clear: The industry needs oversight, and many contenders have stepped up to fill the vacuum. From emerging legislation like GDPR and CCPA, to Google, Mozilla, and other browsers, publishers have no shortage of authorities trying to dictate their relationship with clients—both consumers and brands/advertisers.

Awash in downgraded content, poor segmentation, and privacy agreements galore, end users are the casualties of this struggle, and the battle for privacy governance has quickly become a case of too many chefs spoiling the pot.

So, here’s a thought: What if organizations were equipped to set their own rules? And instead of concentrating power in the hands of Silicon Valley giants, what if the relationship between businesses and advertisers could be self-governed?

A better way forward

Publishers and media organizations are on the cusp of winning the future of digital. With historical direct relationships with brands and ownership of coveted first-party data, there’s never been a better time to take control of the digital revenue channel. The first step to winning is knowing the parties that contribute to your supply chain and verifying compliance with publisher policies covering data, security, quality and performance.

In most cases, more than 90% of their code is third-party generated and the veil of mystery surrounding a third-party’s identity has been a significant obstacle to content moderation. If Google did one thing right with the new Chrome updates, it was forcing developers to identify the purpose and scope of their cookies to the end user.

As long as businesses can vet the partners executing on their platforms, vulnerable and abusive code can easily be censured, creating a better digital supply chain for users, ad exchanges and publishers alike.

In this future, Digital Vendor Risk Management (DVRM) can arm organizations with the information they need to govern their digital assets. With built-in regulatory compliance, DVRM not only identifies risks, but ensures that the proper response is taken in any jurisdiction.

The best solution for customers and the best solution for business always go hand in hand. Rather than bringing them under an iron fist, DVRM creates a sustainable digital ecosystem by empowering businesses to protect their customers while driving revenue.

About the Author

Chris Olson co-founded The Media Trust with a goal to transform the internet experience by creating better digital ecosystems to govern assets, connect partners and enable Digital Risk Management. Chris has more than 15 years of experience leading high tech and ad technology start-ups and managing international software development, product and sales teams. Prior to The Media Trust, Chris created an Internet-based transaction system to research, buy and sell media for TV, radio, cable, and online channels. He started his career managing equity and fixed income electronic trading desks for Salomon Brothers, Citibank and Commerzbank AG.

Advertising | Perspectives

Video advertising in on the rise. But it isn’t for everyone

It’s no secret that web-enabled video is booming. Driven by the combination of an increasingly sturdy infrastructure to support its delivery and the growing popularity of online streaming services like Netflix, Amazon Prime, and Hulu, consumers of all stripes are spending more time watching video on personal devices. So, advertising budgets are being adjusted accordingly, as brands seeks to take advantage of the shift in behavior and make online video a larger piece of their media mix strategy.

New research from Brightcove – Video Advertising Trends and Preferences – demonstrates many positive developments for online video promotions: solid through rates (~60%), modest error rates (~25%), and manageable blocking rates (~20%). Yet, for all of the positive momentum surrounding online video, I frequently find myself advising clients to tread carefully when it comes to embracing the tactic.

Here are the three key issues that are top-of-mind with marketers when it comes to video advertising, and how publishers can respond.

1. It’s Easy to Do Video Advertising Badly. To be sure, it’s never been easier to create videos. However, while the means of production is readily accessible for just the cost of an iPhone, the other requisite – and costly – inputs haven’t changed. Sophisticated videos still require a multifaceted team comprised of a copywriter, art director, talent (performer), editor, and post-production expert to create a quality asset. Any attempt at cutting corners typically results in a shoddy asset that has the potential to hurt a brand’s marketing efforts more than it helps. That’s not to say there are exceptions – there are, and they get a lot of attention. But they are just that: exceptions.

Implication for publishers: Due mainly to its price tag, but also because of the relative complexity required to do video well, the domain remains the purview of large companies with deep pockets and the means to create quality assets, either using internal resources or with the help of agencies. And that’s where publisher sales efforts should be focused. Otherwise, sales groups can find themselves spinning their wheels for months trying to woo small companies with tight budgets to pull the trigger on a video campaign, only then to have it stall or perhaps worse, and push something out to the marketplace that winds up being problematic. For publishers focused on building out their video advertising offerings, providing video production resources to brands can be a meaningful – and potentially game-changing – tactic.

2. Video Is The Champagne of Online Marketing Channels, But Most Companies Can Do Just Fine With The House Table Wine.
Video is a major attraction to both senior marketing managers and also non-marketing executives, and for good reason. Only over the past decade or two has video become a viable advertising option for the mainstream. For most of the second half of the 20th century, video advertising (with all of its barriers to entry) was almost exclusively the purview of household consumer brands like Coca-Cola, General Motors, and Nike.

The development of reliable wireless broadband and the emergence of platforms like YouTube and Instagram have changed all that, of course. And this has democratized video advertising. However, just because it’s available doesn’t necessarily make it a good fit. Indeed, for most small and mid-sized companies, alternative digital channels such as search and display offer more options by way of speed-to-market, testing, and optimization.

Implication for publishers: Though video can be used as a direct response tactic – think of all the late night infomercials and class-action-lawsuit-recruiting pitches – it’s most effective as a component of a multichannel, sustained campaign. In other words, it’s part of a solution, not the solution. In this kind of a use case, video reinforces messages and offers being delivered via complementary channels, both online and off. For years, I worked on acquisition campaigns for a big telecom company. We used video as an upper funnel tactic to establish awareness, and reaped the benefits later on in the lower funnel area of the customer journey. Publishers that can offer these multi-touch point solutions know how and when to add video to the media mix, and do so in a way that effectively sets expectations and creates a roadmap to success.

3. Many Brands Want to Jump Into Video Advertising With Both Feet, But Markets Need Education. Even experienced and savvy marketers are prone to miscalculating what’s required to manage campaigns that rely on video to be successful. First and foremost, budgets get out-of-whack right out of the gate, as ‘workable media’ metrics get wonky simply due to what’s required to create the video asset. That’s not the case with brands that have been running TV spots for decades, of course, but rather for companies trying to move upstream in the online advertising value chain.

Accustomed to an environment where advertising units can be churned out easily in hundreds or even thousands of variations – as is the case with search, display and even content marketing – the usual rules go out the window with video advertising. So the entire digital marketing methodology that most active online promoters have adopted, which is based on a plan-design-launch-analyze-repeat methodology, doesn’t really work with video advertising, nor does that last-touch attribution metric which we’re all, however sheepishly, still embracing.

Implication for publishers: Media companies are in a unique position to genuinely educate customers and prospects on how to do video advertising successfully. Taking a measured approach to pitching video ad solutions requires some discipline and might also result in leaving short term money on the table, but given all of the potential pitfalls, it’s preferable to the damage that could be done with either existing, long-term (and profitable) customer relationships or potential new ones. Given the relative newness of video advertising.

There’s no doubt about where video advertising is headed. Along with the voice/speech category, video is on an upward trajectory that will last for years. Everyone loves video: consumers, executives, B2C, B2B, domestic, and international audiences alike. There’s no better package for message delivery. And it’s why the entertainment industry (using TV and movies as its backbone) remains just about as relevant today as it’s ever been, even in the wake of the internet revolution that was supposed to decimate the category. However, just as it’s difficult to make a quality, differentiated TV show or movie, so is the case with online video advertising. It’s part art and part science, and requires a ‘secret sauce’ to be effective. Brands will be well-deserved by wading carefully and deliberately into this space, and savvy publishers that serve as their guides will be rewarded as well.

About the Author

Tim Bourgeois is a digital media consultant that helps brands optimize ROI on advertising, technology and agency investments. Connect with him on LinkedIn.

Featured Post | Perspectives | Policy

What policy makers can learn from privacy-focused products

The legal and policy community continues to debate the impact of General Data Protection Regulation (GDPR), the ins and outs of the California Consumer Privacy Act (CCPA), and how (or whether) Washington should regulate consumer privacy. While the debate rages on, we are seeing a stream of consumer-focused privacy-oriented product rollouts. It is interesting to look at what these controls actually do and how they might inform the policy debate.

In a concession to consumer privacy, Google recently announced that it would allow consumers to block companies from tracking them across the web when they are using Chrome. Specifically, they will differentiate between 1st party and 3rd party cookies. As such, they will allow consumers to delete 3rd party cookies while preserving the 1st party cookie, which, for example, allows a website to remember a consumer’s log-in information. In addition, Google will soon roll out features to prevent companies from identifying consumers via device fingerprinting, another method used to track consumers across the web.

Let’s be clear, Google is late to the privacy game given the long history of privacy protections offered by Apple and Mozilla. Apple has famously blocked 3rd party cookies by default in Safari and recently introduced Intelligent Tracking Prevention (ITP), restricting the ability of companies to access cookies when a consumer is not interacting with that company.  

Services that care for consumers

When a consumer visits YouTube on Safari, Google can access the cookies they have set on their browser. However, as soon as the consumer navigates to another website, Google can no longer access those cookies. ITP essentially breaks the ability to track consumers around the web.  Apple has also worked to block loopholes where cookies, set by companies like Google and Facebook, pretend to be 1st party but are then used for tracking and secondary use. Unfortunately, it is hard to muster much confidence that Google will be anywhere as diligent as Apple in closing loopholes, given its business model is built on its ability to expertly track consumers.

Mozilla, on the other hand, offers multiple ways for consumers to block third party tracking in Firefox. Mozilla is also considering rolling out a “Super Private Browsing” mode, which would incorporate Tor privacy features into Firefox.

Beyond the most commonly used browsers, a whole suite of new services have popped up. Duck Duck Go, a search engine, and Brave, a browser, offer strong privacy controls as their primary value proposition. As we’ve noted for several years now, more and more consumers are turning to ad blockers to protect themselves and/or improve their web experience. Forcing these massive platforms to once again compete on privacy will be good for everyone, particularly consumers. The question, of course, is whether some of these companies are simply too big to change at this point.

Policy implications

Back to my original question: What can policymakers learn from these new consumer privacy controls?

For starters, consumers increasingly demand more and stronger protections of their data and digital lives or the market wouldn’t be headed that direction. You can reasonably debate whether Google’s recent announcement went far enough. But the fact that a multi-billion-dollar company like Google did anything at all speaks volumes.

It’s also worth pointing out that all of these new controls, which curtail the ability of companies to collect consumer data at scale, are not actually breaking the internet despite the frequent claims of ad tech lobbyists. In fact, given this push to meet consumer demand for greater privacy controls, it’s funny and a little sad to look back at the hysteria from some of these lobbyists.

Meeting consumer demand

The big takeaway is how these companies and their engineers are designing services and features to meet consumer expectations for privacy. This new wave of privacy controls gives consumers the ability to stop companies from tracking them across the web. Yet, these services preserve the ability for websites and apps to collect and use consumer data when the consumer is interacting directly with that company.

This approach makes sense. Consumers share their data so that companies can use it to provide a service or content. In this fair value exchange, the consumer can choose to engage or not. Consumers do not expect companies to track them outside of that fair value exchange and doing so is simply bad business.  

It isn’t a question of whether consumers want their privacy protected, these market moves demonstrate the demand and inevitability. And, as policymakers consider how best to craft consumer privacy protections, it’s worth noting how today’s best engineers have attempted to meet consumer demand and expectations for privacy.

Perspectives

DCN’s must reads: week of May 16, 2019

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

Advertising | Industry-Research | Perspectives

Marketers keep spending on problematic platforms

Despite a steady stream of negative news about social media platforms, eMarketer predicts that marketers will continue to invest ad dollars there. eMarketer’s US Social Trends for 2019 foresees continued fallout from 2018’s social media scandals and revelations, particularly for Facebook. It appears that marketers will continue to advertise on the problematic platform, despite declines in usage and engagement along with increased regulatory scrutiny.

For Facebook-owned Instagram, the report points to the likelihood of “growing pains” and investigations into data practices and privacy, in part stemming from the actions of its parent company. Overall, eMarketer says that 2019 will be a year to watch in terms of changing user behavior and engagement across social media platforms.

For Facebook and Instagram, eMarketer predicts that:

  • They will bring in a combined $67.25 billion in worldwide ad revenue, up 23.5% from 2018.
  • They will see US expenditures increase 20.6%, to $27.57 billion this year.
  • Time spent on Facebook among US users will remain flat this year, at 40 minutes per day.
  • Time spent on Instagram will inch up only slightly, to 27 minutes from 26 minutes in 2018.

However, the report points out that, much as marketers have had trouble shifting ad dollars away from linear TV despite declining audiences, they won’t be inclined to quit Facebook either, even in light of its mounting problems. In fact, Next year, eMarketers predicts that marketers will put $32.18 billion into social ads, with the vast majority—$27.57 billion—spent on Facebook. That will bring social ad spending to 47% of TV ad spending ($69.17 billion) this year.

For Snapchat, eMarketer predicts that usage will slow. However, the company will have better luck garnering revenues from its existing users. eMarketer estimates that Snapchat’s US average ad revenue per user (AARPU) will top $10 this year ($10.18 to be exact), up 30.4% over 2018 (when AARPU grew just 10.9%).

Other eMarketer 2019 productions include:

  • An explosion of the stories format (followed by a backlash)
  • The spread of vertical video
  • The newsfeed will maintain its dominance as social media’s primary UI
  • Social shopping will gain traction

Given the turbulence in the social media landscape, we’ll all need to keep an eye on Facebook’s place and popularity in the marketing landscape as well as the ripple effect that increased scrutiny on platforms data usage will have on all players. It will also be interesting to see if the stories format remains relevant in the long haul, as well as continued shifts in the perception of, and tactics around, influencer marketing.

Perspectives

Should publishers ditch native ad content promotion for good?

The internet is filled with tricks and tactics to reach your target audience.

There’s the e-newsletter blast, the banner campaign, the native ad widgets. There’s Facebook and Instagram and Twitter. These methods are constantly changing and requiring publishers to adapt to new rules and regulations, but one thing remains constant: if you want to reach your audience, you’re going to have to pay. Given that paid promotion is a part of most content programs these days, it’s vital that publishers are getting the best bang for their buck – or else their margins will suffer.

In recent years, platforms have cracked down on organic traffic, forcing publishers to adjust their spend accordingly in order to drive traffic to their sites. It’s also changed how we sell products like content. You can no longer put an article or video on your page and sit back as the views roll in. Instead, campaigns need a dedicated (and usually significant) amplification budget to deliver the results the client expects.

Considering this, it’s important to ensure that you’re getting the most bang for your promotion buck. Otherwise, you’ll end up breaking even — or worse — on something that should be a significant revenue stream for your business.

Two of the most common tactics are Facebook and native ad network promotion. Each has its pros and cons (scale, price, engagement), which we’ve explored in the last five years at Pressboard. But after more than 3,000 stories, we’ve stopped using native entirely and have shifted our whole client content promotion budget to Facebook. Here’s why.

The Native Ad Problem

Native ad networks have been praised for their ability to deliver a nondisruptive ad experience to viewers. In fact, research from the Native Advertising Institute suggests that readers prefer them over pre-roll video ads and banner advertisements, probably because they blend into the page more seamlessly.

And while they do succeed in sending traffic to a site, native ad networks face one major challenge: quality.

In order to outcompete other native networks and provide advertisers with adequate scale and inventory, many native networks have had to expand their reach beyond premium sites. As a result, quality of traffic has naturally given way in favor of quantity. The readers on these sites are often less qualified, which means they’re less likely to click on and engage with your stories.

At this kind of scale, native ad tactics also inevitably encounter brand safety issues. We’ve all seen those cringe-worthy headlines popping up in “Stories You Might Like” panels; it’s even worse if your sponsored content is sitting next to one of them.

Why Should Publishers Care?

Not all native ad networks are created equal. There are networks with built-in quality control measures, like minimum time spent, that ensure the audience they reach is, well, actually human. They can also lead to massive revenue if done thoughtfully.

But at the end of the day, there are better ways to deliver the results your clients want to see.

Content is different than banner ads or other kinds of advertising. While a banner needs 0.5 seconds to communicate its message, content needs audiences to engage with it to be effective. That connection is incredibly powerful: branded content leads to 59% greater recall than other digital ads. Beyond this, advertisers need to show that their investment in content is making an impact, and their clients are increasingly concerned about engagement rather than clicks. Therefore, it’s vital that the people who click on your ad intend to read and scroll through your content.

In a recent study, we compared how two traffic sources — Facebook newsfeed and native ad networks — compare when it comes to engagement and click-through rate.

The data came from over 1 million unique reads promoted through Facebook or native ad networks and tracked using Pressboard’s platform. We analyzed engagement metrics including time spent, scroll depth, and click-through rate on links in the article to determine which tactic was most successful. The results?

The Facebook Solution

After reviewing the results, Facebook is the clear winner when it comes to both engagement and conversion. Readers spend an entire minute engaging with content when they reach it from a Facebook ad. That’s almost two times higher than traffic coming from a native ad network. They also convert at double the rate of what we’d expect from a reader who reached the content after clicking on a native ad.

Even when we considered cost, Facebook outperformed native ad networks. Sure, native drove cheaper clicks and impressions, but that advantage changed when we looked at verified reads. Fewer clicks on native ads reached the content we were trying to promote, whereas the Facebook audience was more likely to reach our content. As a result, each actual read that came through Facebook cost $0.34, while reads earned through native ad networks cost $0.59.

Anyone that invests in content promotion knows the importance of every dollar. And while clients aren’t concerned about the publisher’s bottom line, they are invested in the performance of their content. Finding a platform that delivers strong conversions and engagement and at relatively affordable cost is a win-win. Until something inevitably changes in the AdTech space, we think we’ve found it.

Perspectives

DCN’s must reads: week of May 9, 2019

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

Featured Post | Perspectives

Are the NewFronts still worth it for publishers?

Certain terms like “new wave,” “new school,” and “online video” start to lose their meaning over time. The same seems to be true of the “NewFronts,” now in their eighth year in New York. The showcase for traditional and digital native publishers selling their video offerings to marketers has been split up into twice-per-year affairs (with a fall showcase in L.A.). Just 16 publishers presented in New York this year, down from 36 in 2017.

The idea of the TV Upfronts and NewFronts are to dazzle advertisers and get them to commit a chunk of their advertising to the publisher, though there is less scarcity online. Have the NewFronts made progress over the years? Most definitely. Has that progress meant there is no need for them anymore? Not quite.

What’s most interesting at this year’s shindig is that traditional players are pushing new acquisitions and initiatives, while the digital natives are trying to sound more traditional with ongoing series. This points to a convergence of purposes and the fact that online video, OTT, streaming video et al have commingled to the point of absurdity. This leaves marketers grasping at just what they’re buying and how they can track and optimize it all. And yet there’s still a place for publishers at the NewFronts as a showcase for offerings and to generate much needed buzz.

Platform domination

The biggest challenge for publishers, as always, is trying to stand out from dominant players like Hulu, YouTube, and even Twitter. And the dominant players just get more dominant. YouTube casts an immense shadow as the largest ad-supported video platform online. But, as Digiday’s Sahil Patel points out, YouTube users are spending 200 million hours per day watching YouTube on a TV, up from 100 million hours last October.

And Hulu hit $1.5 billion in ad revenues last year by offering a mix of legacy TV programming and original shows. During its NewFronts presentation, Hulu execs pointed out that they have 26 million paid subscribers, and a much younger audience than cable, at 31 years old vs. 53 years old. Plus, 80% of Hulu viewing takes place on a TV set, up 75% from last year. (And Hulu even sponsored Digiday’s coverage of the NewFronts.)

This puts many publishers in a bind because they have to sell their uniqueness to advertisers while also cutting deals with the platforms to expand reach.

“Mass reach is still a thing,” Mediahub’s Michael Piner told Digiday. “And there are certain partners that are being prioritized because they can achieve the mass reach of TV.”

What do publishers get?

So what do publishers get for their money and trouble at the NewFronts now? Well, the decrease in presenters means they do get more attention from attendees. And at least one publisher, Studio71, was touting its upfront ad sales.  The company has presented at the NewFronts from 2016 through this year’s edition. Studio71’s CEO Reza Izad told Digiday that 85% of their revenues each year came from upfront commitments. They boast 100 million unique viewers per month on YouTube and vet each piece of content on the network.

Still, many publishers such as Group Nine and Refinery29 decided to forgo the NewFronts for a private tour to increase intimacy – and likely save costs. The increased competition for digital video ads is partly to blame, and people are also paying more for services such as Netflix and HBO that don’t serve ads at all.

But it’s still hard to ignore the growth of digital video, especially if you sell video advertising in entertainment. The IAB’s Video Ad Spend Report surveyed marketers and found they would be spending $18 million on average this year on digital video ads, up 25% from last year, with the Media/Entertainment vertical up a whopping 75%. (And yes, that means studios are buying more ads on other media.)

Switching places

Meanwhile, notable presentations from Meredith and Conde Nast discussed new shows for their OTT services, and Meredith is also distributing them through its local TV stations. And as OTT moves into broadcast, cable network Viacom was showcasing content on its newly acquired PlutoTV OTT service. 

“Viacom is embracing digital inventory, and at the same time we see Condé and Meredith pushing themselves into the OTT universe,” Wavemaker’s Noah Mallin told AdAge. “They are starting to resemble each other more and more.”

As AdAge’s Jeanine Poggi’s so astutely points out, this is the year when the NewFronts actually looked a lot like the regular TV Upfronts, with the themes of brand safety, original programming, and scale. “This year more publishers spoke about renewing existing shows, creating long-form content akin to TV and positioning themselves as the new ‘primetime,'” Poggi wrote.

So where does that leave publishers and the IAB? Perhaps the time has come to ditch the NewFronts and merge them into the regular TV Upfronts. More importantly, publishers need to calculate carefully the benefits of a flashy program on stage at the NewFronts, and whether that still beats a private tour or other marketing outreach. Ultimately, it will take a new round of upstart video-centric publishers who want to make a splash to inject new energy into the NewFronts.

Advertising | Audiences | Perspectives | Revenue

To maximize OTT performance, should we think lean back or lean forward?

Given that OTT is the new TV, how should audience interaction be considered? TV is conventionally viewed on a large screen ten or so feet away and described as a “lean back” viewing experience. However, the new capabilities that come with OTT are associated with “leaning forward” – similar to browsing the Internet. In the digital age, people navigate content by swipes on mobile touch screens or clicks on portable laptops and desktops. In other words: They lean forward.

From a media perspective, it has proved optimal to follow traditional TV practices in order to maximize viewer time with OTT video content. This starts with playing video the moment the app opens just like tuning into a TV channel. These days, the practice is becoming standard particularly across OTT apps for broadcasters with linear establishments. (AKA, leaning back.)

By the numbers

The metrics behind the lean-back practice are particularly compelling when comparing average view time for media companies that have transitioned from on-demand menu starts to starting with video streams. Average viewer times have increased between 80-120%— more than doubling from less than a half hour to over an hour per session.

Moreover, Pluto TV, the leading free streaming service with more than 15 million monthly users, takes it a step further with 24 hours of programming on OTT channels. Pluto recently announced a view time of two hours per session, which already represents half the average daily view time of TV in the U.S. of nearly four hours. And consider Hulu (with 28 million customers), which recently announced binge watching on the service as a new ad targeting metric. So, length of viewing time is now a metric of significance in OTT viewership and even advertising.

Ad engagement

From an advertising perspective, lean-forward ad engagement can be far more impactful. This means capturing consumer attention with interaction of any kind, whether a game of sort for brand recall or data capture for direct response. In digital, user interaction is the driving force behind premium and higher value ad opportunities. 

However, when we consider OTT as the new TV — where leaning back is the status quo on a connected TV versus the underwhelming amount of time spent watching OTT on mobile phones — a new balance must be struck with the level of interactivity and added value that is possible. Compare this to the lean-back paradigm of TV in OTT, where the remote is purely a means of turning the stream on or off or tuning the volume up or down.

With lean-back, media companies and marketers will need to capture the most meaningful signals from viewers through their viewing behaviors and activity along their content journey. They will also need to break the mold with interactivity in simple and beneficial ways to the viewer, such as skip or continue to watch a certain commercial like done with simplicity in digital.

For OTT, we’ll need to take a hybrid view to maximize consumer understanding and ad performance. As a medium, OTT must be evaluated in the context of “lean back” in terms of programming presentation, and a “lean forward” opportunity in the presentation of commercials through viewership behavior.

Perspectives

Publishers face new risks in the wake of the CCPA

While the California Consumer Privacy Act (CCPA) is poised to present peace-of-mind for many, it could be crippling for any publisher that relies on their GDPR compliance framework. In light of recent updates to CCPA, it’s clear that publishers must get on board or face some seriously damaging consequences in the form of not only revenue loss but also severe financial penalties.

The CCPA ripple effect

When CCPA first passed in June 2018,  just one month after GDPR’s enforcement, people were quick to refer to it as “GDPR light.” This was an indication that the landmark law will have significant ramifications on how companies that meet the thresholds and do business with Californians will have to change how they operate. At its core, CCPA signals a shift in business models, in particular where data is a revenue stream. What “GDPR light” downplays, however, is how significant that shift truly is.

The very fact that such regulations were passed in the world’s 5th largest economy was a bold statement in itself. With California at the helm, it’s only a matter of time before the rest of the nation follows suit. Other states are not just going to sit back and have privacy issues impact their citizens after California has made the first move.

More legislation in the works

Already, several other states have already jumped on board with similar laws, some with pages pulled straight from CCPA.  For example:

  • North Dakota: A proposed bill would require companies to provide to consumers (upon request) with information about the types of personal data that companies collect and possess.
  • New York: Two bills are on the docket: one addressing biometric privacy and another that would govern businesses’ collection and disclosure of personal information. Utah: A bill would require law enforcement to get a warrant from a judge to access electronic information.
  • Washington: Legislation would allow consumers to ask companies for a copy of their personal data and to delete or correct inaccurate data. It would also regulate facial recognition technology.
  • Texas: Two bills have been proposed that take more than a page, entire chapters in fact, from CCPA: TCPA and TPPA.

The results are clear: CCPA is about to shake the very foundation of how companies conduct business nationwide. Because of this, several federal regulations have also been proposed. And while it’s unlikely any of them will pass before CCPA is enforced on January 1, 2020, it’s vital to note that these things are currently being worked on behind the scenes. More importantly, since CCPA passed sooner than anyone expected, publishers should begin taking immediate action to align with the upcoming regulations. The groundswell of consumer privacy ballot initiatives is only growing stronger as consumers become more outraged with their lack of privacy rights in the digital landscape.

Proposed amendments

Every publisher, whether operating in California or not, needs to be fully vetted on the new law because it affects anyone who conducts business with California residents. It provides those residents with new rights to their information such as knowing what personal information is being collected, shared, and sold, and with whom.

Furthermore, it also allows them to access and delete, or decline the sale of their information while still receiving equal service and price from businesses. Meanwhile, publishers must inform their digital readers of what information is being collected and why. Publishers must also work to ensure that each vendor in their supply chain is operating within their contracted policies. Additionally, toll-free numbers, email, or websites must be provided to consumers so that they can easily request their information.

The latest on CCPA

Recent changes to CCPA include several notable items, but there are two amendments in particular that could affect businesses for years to come—SB-561 and AB-25. The first dramatically increases the legal risks of businesses that collect and keep information by allowing consumers to file suit for any alleged violation of their CCPA rights without any evidence of harm—even before the Attorney General publishes guidance. What’s more, if the amendment passes, businesses will no longer have the right to consult with the AG on such matters.

The second amendment deals with how the law defines “consumer information.” If passed, this amendment would exclude information collected by a business from a job applicant, employee, contractor, or agent. That’s a good thing, because without this change, consumer information will include business contact information and employee information, resulting in unintended consequences. Former employees will be able to request items from  previous employer records, such as emails and other corporate documents that mention their name, including those that contain confidential corporate information and performance evaluations. They can also request emails to and from former contacts, enabling them to reach out to company clients and prospects.

Preparing for CCPA

At the end of the day, there’s no definitive answer on how CCPA evolves by the time it is enforced on January 1, 2020. Still, with less than a year to go, businesses need to take a risk management approach. They need to find out what information is collected  and from whom, what information is  shared and with whom, and how to secure that data. Operations, security, IT, and compliance teams will need to keep abreast of the regulations and their consequences for the organization. And in order to operationalize security and privacy, these teams will need to work together.

Those taking a wait-and-see approach should look no further than the average cost of GDPR compliance. It’s been noted that, after factoring in legal and other fees, the cost sits anywhere between $1M‐$10M. That number could quickly grow if a violation occurs, and the likelihood is high, given the increased right to personal information. To put it bluntly, waiting to see what happens next is not an option. Businesses of all sizes must act now to protect their bottom line or face the impending consequences. 

About the Author

Steve Stup is responsible for developing and overseeing the revenue strategy at The Media Trust. He has experience developing high growth sales teams through the course of his career spanning around 30 years at The Washington Post, Lexis Nexis, and other recognized brands. During his tenure at The Washington Post, Steve built the company’s digital business and spearheaded successful sales and revenue operations teams. He is an alum of Virginia Tech and The George Washington University.

Featured Post | Perspectives | Revenue

The cannabis business is booming. So how about the cannabis ad business?

Do a search for cannabis-related articles and thousands will come up in the results. And with good reason: Recent years have seen the legalization of it in 10 states now, with 33 states allowing marijuana for medical use. This has given way to countless articles written about the burgeoning legal industry and startups offering cannabis and CBD products.

Billions of investment and consumer dollars are flowing into the legalized cannabis space. Last year, legal cannabis was a $10.4 billion industry in the U.S., employing a quarter of a million people, according to New Frontier Data, a cannabis market research firm. According to a report from the Associated Press citing New Frontier Data, “Investors poured $10 billion into cannabis in North America in 2018, twice what was invested in the last three years combined… and the combined North American market is expected to reach more than $16 billion in 2019.”

But for all the explosive growth of this new and legal market, the advertising part of the equation has not kept pace. The largest digital platforms don’t allow cannabis ads. Cannabis articles may appear on many publishers’ sites, but few allow advertising of these products. The fact is that cannabis is still a Schedule I drug in federal law, and the Controlled Substances Act of 1970 prohibits advertising and selling of such products. State laws vary widely, causing many with ad space to sell to err on the side of safety.

It’s no surprise, then, that many of the publishers reached for this article just don’t allow cannabis advertising, particularly in national publications. One major publisher with a number of popular titles said that it doesn’t accept cannabis advertising. Though it does accept ads for topical cannabidiol (CBD) oil products to the extent allowed by law.

Publishers leery of cannabis ads

Meredith Corp. said that it doesn’t accept any marijuana or cannabis-related products (including Marijuana-based THC, Cannabinol [CBN] or CBD products) or any other product that’s illegal under U.S. law. One exception the company now allows is Epidiolex, which contains CBD and has been approved by the FDA to treat childhood epilepsy and can be legally advertised for such use under federal law.

Meredith said it also now accepts industrial hemp-related products, including Hemp-based CBD or CBN products, with THC content of 0.3 percent or lower. Hemp products of this sort were previously illegal under the Controlled Substances Act. However, they were made legal under the 2018 Federal Farm Bill, enacted in December 2018.

There’s more leeway on the local publication front. Local newspapers and publications in states where cannabis is legal for recreational use may have an easier time accepting ads, depending in state law. The Seattle Times, for example, accepts cannabis advertising.

“Cannabis advertisements are reviewed by our staff to ensure they meet our general advertising creative and copy policies. There are Washington State rules for this category of advertising, and we comply with those requirements,” said Gary Smith, VP of advertising at the Seattle Times. “While there are complexities around accepting this type of advertising, it has been a growing part of our overall client mix. And we’ve had very few customer complaints associated with the inclusion of this ad content in our products.”

Is the duopoly doing it?

Publishers need not worry that they’re losing out on cannabis ad dollars to Google and Facebook. Both have shied away from allowing cannabis ads. Google’s policies state that ads promoting products that alter mental state for recreational use, including “legal highs,” are prohibited.

Facebook similarly prohibits such ads, though the company reportedly formed a group to “examine its approach to cannabis,” which suggests that it could be moving towards a more permissive stance. In the meantime, state legal cannabis businesses are allowed to create verified business pages on Facebook, and appear in search results (they were previously blocked from search),” according to Bloomberg Law.

Varying state laws are a hurdle for brands that want to market cannabis products in multiple states where it’s legal. And given that that Google and Facebook don’t allow cannabis ads, and that many publishers shy away from them, Cannabis brands often rely on outdoor advertising and sometimes even events.

The brand perspective

Jason Deland, co-founder and chairman of cannabis brand Dosist and founding partner at ad agency Anomaly (which handles advertising for Dosist), said that their media strategy has largely prioritized outdoor advertising for creating awareness. Zoned areas that allow for outdoor cannabis advertising in California have helped Dosist build its brand, as has its retail location on Abbot-Kinney Blvd. in Los Angeles’ Venice Beach.

Dosist has also had event partnerships with Barry’s Bootcamp, with messaging focused on sleep and the health benefits of cannabis. The company also has advertised with Cannabis-friendly publications like High Times. As for social media, Deland says that Dosist creates organic content on its own pages.

Other brands have tried to circumvent the social media ban on cannabis ads by using influencers to promote their products or promoting prices on their own social accounts. However, that can have its own set of headaches and influencers can sometimes have murky return on investment.

For now, it seems like unless there is a change to the categorization of cannabis at the federal level, most companies with ad space to sell won’t allow cannabis advertising anytime soon. There are the rare exceptions of course, as noted above with Epidiolex, and more of those may come in the future as pharmaceutical companies look to get more cannabis-related drugs approved. Others are hopeful that with the recent allowance of industrial hemp products to be advertised – thanks to last year’s Farm Bill – that the federal government will ease up eventually on cannabis, but only time will tell.

About the Author

Maureen Morrison is a writer and consultant, working with agencies, startups, publishers and brands on editorial and communications strategies. She previously was a reporter and editor, and spent 12 years at Ad Age covering agencies, digital media, and marketers.

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