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Innovation | Research

Discovery Digital Networks Growth Fueled by Staff Superfans

Discovery Digital Networks is feeling the love from its audience more than ever. The web-native portfolio, which is made up of four original video networks – Revision3, TestTube, Animalist and the DeFranco Network – has increased views and audience 400% since Revision3 joined the Discovery Communications family in May 2012. An increased focus on video has been a key factor in the growth. Today, fans across these four digital networks are consuming, on average, 160 million video views each month and, in social circles, the communities are stronger than ever – with 35 million followers and 14 million Facebook fans.

Discovery’s digital-native portfolio has driven its growth the ‘Discovery way,’ with highly curated, premium content. Content that Discovery owns. Great storytelling is at the heart of the programming, led by show hosts who are as authentic as the content itself. It’s the relationship between the show host and each community that drives engagement.

In fact, according to the latest Discovery Digital Networks’ Audience Survey, the most compelling driver of views and social interaction is the fact that Discovery hosts are, themselves “superfans of their brands, the network and its content,” according to Suzanne McDonnell, SVP of Sales Strategy & Client Solutions at Discovery Communications.

Discovery TestTube ScreenAccording to Discovery’s research, the authenticity of its hosts is at the core of why its content resonates with fans and advertisers alike. As McDonnell puts it, “our hosts are experts not actors. They are born of the communities that they represent.” This affinity between the shows’ fans and the equally engaged hosts has inspired the programming.

Comments from survey respondents made this sentiment clear: “The Rev3Games team comes across as honest professional[s] that actually play and enjoy games…You are critics, yes, but you also have a love for gaming.” Of Hak5, a respondent said “I think it is the personalities that make it top notch. They really seem to be enjoying themselves.” And one DNews viewer said “I feel just like I’m listening to a friend talk.”

Discovery Digital Networks found that 97% of viewers are very/somewhat satisfied with the host’s personality and 92% with the host’s expertise. This fact, says McDonnell, keeps the network focused on “a hosted-show model around which we build passionate communities.”

The power of highly curated, premium programing, led by authentic hosts, extends itself to advertisers as well. Discovery’s research found that 64% of respondents feel that brands featured within the network programs are usually a good fit with the show/channel, and 50% have more confidence in brands featured within the programming. “Viewers trust Discovery Digital Networks to feature brands that are relevant to them. Viewers’ highly favorable opinions of our content adds a halo effect to brands featured within the content,” says McDonnell. “That presents unparalleled opportunity for advertisers to join the conversation and become a member of these communities.”

Revenue

Q&A with Chip Schenck, VP/Programmatic Sales & Strategy, Meredith on Premium Programmatic

This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights… If you want to learn more, keep an eye out on our site for more interviews. Today’s Three on Three interview is with Chip Schenck, VP/Programmatic Sales & Strategy, Meredith on the subject of “Premium Programmatic” advertising.

Chip Schenck HeadshotQ: How would you define Premium Programmatic as it compares to what we’ve come to know as “Programmatic Advertising”?

A:Premium Programmatic is a combination of both a change in sales process/dialogue and packaging of inventory, vs what we have seen previously as standard programmatic. Standard programmatic can be defined as machine to machine buying/selling automation. Where previously, standard programmatic inventory had various shades of transparency with little differentiation in available inventory and no real human interaction—what we call “dials only”—as part of the selling and transaction process, programmatic premium is typically direct sold, human negotiated, uniquely packaged and made up of limited availability inventory, with much greater levels of transparency between buyer and seller.

The simple answer? Programmatic premium is directly sold/personally negotiated but programmatically executed. For buyers, the opportunity is higher value inventory, depending on how you define “higher value.” This might mean earlier look, higher in the frequency curve, specific inventory, audience enriched, etc. It could mean a better environment versus the open exchange, better brand performance, etc.

Q: Describe the way in which your organization handles programmatic?

A: We are approaching the market with a unified sales vision, and a focus on leveraging data in all of our sales channels: Ideally, programmatic and sponsorship dollars working together to support a creative idea will drive better consumer engagement for a client’s campaign, and so we want our sales efforts to be unified where possible. However, not everyone is buying that way, and so will also be able to service parallel paths—sponsorship only and programmatic only—until such time as planning/buying is more holistic.

When more than half of the Advertising Trading Desks s in the market have built a ‘transition’ or ‘liaison’ team between the traditional digital agency and the programmatic agency/ATD to bet better aligned, that is a signal that buying methodologies will change. We look at this as a positive trend for the industry because it moves the conversation towards total value for the client and the publisher, and understanding how each channel can benefit a client’s plan, rather than a focus on price sensitivity or efficiency alone.

Q: What types of marketing initiatives lend themselves best to leveraging programmatic and how can the premium approach better deliver?

A:Programmatic has been used to deliver a lot of direct response campaigns in the past because it was so price driven. However, leveraging the incredible targeting capabilities, the transparency of placement, contextual adjacency when desired, the halo effect from a strong consumer media brand, and the benefits of efficient media, any form of communication can work programmatically. It can successfully drive KPI’s including awareness and reach for the upper funnel; inspiration and intention for the mid funnel; and trial and transaction for the lower funnel. Premium programmatic offers the best mix of pricing efficiency, targeting, reach and scale, while still getting the safety and engagement of trusted contextual environments.

Charles “Chip” Schenck is the VP of Programmatic Sales and Strategy at Meredith Corporation and responsible for helping clients leverage data and insights across Meredith’s Digital Network, for execution across all platforms and channels. Schenck joined Meredith Digital from PubMatic where he served as VP/Publisher Development. In addition, Schenck has held senior leadership positions with a diverse range of media companies including serving as VP/Integrated Sales & Development for American Express Publishing; Associate Publisher for In Touch Weekly; and Managing Director of Sales and Marketing for Hearst-Stratosfera.

Note: This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights.

Also in this series:

Q&A with Neil Johnston, Cox’s EVP of Strategy & Digital Innovation on Premium Programmatic

Innovation

AccuWeather Makes Another Social Connection With Launch of BBM Channel

AccuWeather has launched a branded BBM Channel to extend its social connection to weather fans. The company, which has a longstanding relationship with Blackberry, has joined the ranks of brands such as Time and Disney in creating its own dedicated BBM Channel. The new AccuWeather BBM Channel will offer a range of breaking weather information, including severe weather updates, breaking stories, local weather images, radar and more, which Blackberry Messaging (BBM) subscribers can access across mobile platforms.

Accuweather BBM Channel ScreenAccuWeather timed its Channel release to coincide with last week’s expansion of BBM when Blackberry announced an update to BBM for all users as well as making Blackberry’s private social network available to iPhone and Android smartphone users. AccuWeather’s Coordinator of Social Media Jesse Ferrell says that the move made sense to extend the brand’s mobile and social reach, “BlackBerry has a huge audience who is always connected and online, and we are thrilled to be able to interact with that audience through this Social channel.”

BBM Channels is Blackberry’s social engagement platform that works within BBM. It allows people to connect with the businesses, brands, celebrities and groups of interest. It also lets users engage in in conversation around content in a similar fashion to Twitter and Facebook while providing brands with integrated monitoring and measurement tools.

“Social Media in general helps AccuWeather inform its audience about inclement weather, while reinforcing the brand,” says Ferrell. Though the audience may overlap with other social channels on which AccuWeather is already active, Ferrell says that delivering content within the context of Blackberry Messaging will extend the reach of its weather related information to an audience that might not yet be as familiar with what the AccuWeather brand offers. And, as Ferrell points out, “Because of its real-time and local nature, weather is always a win on Social Media.”

Perspectives | Revenue

Q&A with Neil Johnston, Cox’s EVP of Strategy & Digital Innovation on Premium Programmatic

This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights… If you want to learn more, keep an eye out on our site for more interviews. Today’s Three on Three is with Neil Johnston, Cox Media Group’s Executive VP of Strategy & Digital Innovation on Premium Programmatic.

Neil Johnston HeadshotQ: How would you define Premium Programmatic as it compares to what we’ve come to know as “Programmatic Advertising”?

A: The value proposition of programmatic advertising is the efficiency and scale that automated buying confers. Premium programmatic retains these values, while adding in the safety and fidelity of guaranteed site-direct buying. Technologically speaking, this means bypassing an RTB exchange in favor of exposing and booking a subset of inventory directly against a publisher’s primary ad server.

This has advantages for both demand side buyers and supply side publishers. Buyers are able to selectively access quality, site-specific, high impact inventory in a highly efficient way, while publishers are able to increase yield by accessing the high demand programmatic sales channel in a transparent and optimized way.

Despite the moniker, “Premium” does not necessarily mean better – it’s simply another buying tool that suits certain campaigns more than others. The name is more a reflection of the relative scarcity of this guaranteed inventory compared to the rest of programmatic space, as well as the higher prices that come with that. Premium may be better suited to certain branding campaigns, for example, while RTB might be better leveraged by performance campaigns run through DSPs that can optimize against its scale in real-time.

Q: Describe the way in which your organization handles programmatic?

A: Our CMG properties leverage the technology of our subsidiary, Cox Digital Solutions (CDS), on the programmatic supply-side to excellent results. Some of our sites seek to maximize yield, others maximize fill, and still others are most concerned about protecting CPMs and direct sales channels. CDS’ proprietary dynamic floor optimization technology lets us optimize demand tailored to our properties specific needs.
On the sell-side, our inventory has been included in private exchange deals facilitated by CDS through our partners at Casale Media to buyers such as MediaMath. We are currently exploring our options to expose guaranteed inventory programmatically.

Q: What types of marketing initiatives lend themselves best to leveraging programmatic and how can the premium approach better deliver?

A: Practically any campaign, shy of a truly integrated/native one, can benefit from the advantages of programmatic. While there is currently a bias towards premium for branding and RTB for performance, the lines are blurring, as scale and measurement improve optimization in the premium space, and transparency and viewability improve brand safety in the RTB space.

My advice here is simply that while programmatic will evolve, it’s here to stay. So get educated. And, more than anything, get started.

Neil Johnston is Cox Media Group’s (CMG) Executive Vice President, Strategy and Digital Innovation at the company’s headquarters in Atlanta where he oversees Strategic Development, CMG Digital and the company’s growing portfolio of digital investments. Johnston previously served as Executive Vice President and Chief Financial Officer of Cox Media Group. He also was Cox Radio’s Chief Financial Officer from September 2000 until it was made private in 2009.

For premium access to Cox Media Group inventory, please contact Andy Levi at Cox Digital Solution ([email protected]).

Note: This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights.

Innovation | Revenue

Free to Innovate: Experimentation in Fee-based Media Models

For a time, free looked like the only option for the media business. The model seemed to be a veritable free-for-all. Because, despite digital content consumers’ insatiable appetite, models that made this all-you-can-eat buffet profitable—or at least as profitable as offline legacy models—remained elusive. The upside of the rise of free was that market pressure caused many media businesses to experiment with monetization methods and, in many cases, they have diversified their revenue streams, strategies, and organizational structure which makes them more resilient in the long term.

Yet contrary to the seemingly overwhelming tide of free, many media organizations sustain subscription-based models. In fact, according to research conducted late last year, 95% of OPA members have an ongoing subscription based strategy. And these strategies are far from stagnant.

Subscription Model Starting Point
While its longstanding subscription business makes it one of the industry’s paid content poster children, the Financial Times continuously pursues the development of new offerings that maintain customer affinity and feed the bottom line. When considering a new premium offering, FT.com managing director Rob Grimshaw suggests that you first focus on “what is unique or different about your product. Then he says, “take advantage of the flexibility that the web environment offers. You don’t have to put up a gigantic blank door on the site that says ‘pay to enter.’ The web offers many ways to do these things: You can build sampling in, you can use freemium models.”

Though Michael Crosby, COO of The Deal says that a subscription based initiative “is no different than any business idea,” he suggests examining the market and look for a problem that exists. Then ask “Can we provide insight or analysis the fills that gap?”

Sarah McConville, Harvard Business Review Group VP and HBR Press publisher, also approaches the development of subscription offerings from distinct value propositions. However she says “we always start with audience. For whom are we developing this? What job are they hiring Harvard Business Review to do?”

Innovation and Experimentation
As Grimshaw points out, digital media provide an opportunity for a great deal of flexibility and experimentation with pricing, offerings and customer experience. At FT.com, they not only view subscription models as a revenue stream, they are a means to better understand, serve and retain customers. “Subscriptions create a direct relationship with your audience,” he says. “You learn so much about them including demographics, onsite behavior and other information that can be very powerful from a marketing and advertising point of view.”

Financial Times Fast FT App ScreensOne insight that he has put to work for FT.com was that “engagement is absolutely critical to the success of subscription models.” This engagement imperative was a driving force between the company’s Fast FT product, which provides a continuous stream of “intelligent first-response to the news.” While the creation of a near-real time news culture marked a shift for the FT, Grimshaw says it has paid off with those visiting Fast FT spending ten or more minutes on the site.

HBR has also made a significant change in approach over the past year by offering “All Access” as its primary offer to subscribers. Readers can access their Harvard Business Review subscription in print, online, and via your iPad, and access to the current issue as well as the online archive of 50+ years of HBR articles. McConville says “we were really pleased to see that, in a time when many media brands are cutting subscription price and offering more content for free as a way of maintaining circulation levels, with “All Access” we’ve been able to add more subscribers, and increase the price with this subscription. Harvard Business Review’s 1H13 AAM Publisher’s Statement was the highest paid circulation level in HBR’s history at 260K. “

At The Deal, Crosby says they focus on helping readers come up with “ideas for their next deal through our editorial insight.” Realizing that these readers will then want to figure out how they might have a connection with someone who will help them make that next deal, The Deal launched a subscription offering called “Connections” that does just that.

Subscription Success Strategy
To create a content product that pays, Crosby says you must have an “obsessive focus on the user experience” Understanding how it fits in with their daily workflow is the starting point that will ensure that a user “needs to have your service.”

One piece of advice McConville says it is essential to align the editorial and commercial stakeholders in a shared understanding of how offerings serve subscribers. However she also suggests “bringing in the skeptics, listen and take them seriously.”

Grimshaw agrees that much can be learned from peers and your own team. However, he suggests that one of the best ways to foster innovation in subscription content offerings is to “look outside of the boundaries of the publishing industry.” He suggests looking at the retail industry, gaming, and others pioneering the space to find inspiration for the next generation of subscription innovation.

You Might Also be Interested In:

Q&A with Rob Grimshaw, Managing Director, FT.com on Subscription Model Success

Q&A with Michael Crosby, Chief Operating Officer, The Deal on Subscription Model Success

Q&A with Sarah McConville, VP of Marketing, HBR & Publisher HBR Press on Subscription Models

Innovation

Where Dreams Come True: Disney Launches Startup Accelerator

Disney has joined the ranks of Fortune 500 companies launching accelerator program. General Electric made headlines last year when it announced StartsUpHealth with the mission to build 1,000 sustainable health and wellness companies within a decade. And two years ago, Nike partnered with TechStars to create the Nike+ Accelerator Program, which is designed to drive digital sports innovation. Disney also opted to partner with TechStars, a mentorship-driven seed stage investment program.

Disney Startup Accelerator ScreenWhile he notes Disney’s respect for the past, Kevin Mayer, EVP, Corporate Strategy and Business Development at The Walt Disney Company, says this initiative is an extension of Disney’s “long, storied history of innovation.” According to Mayer, “We have also been leaders in entertainment technology development with inventions like the multiplane camera, audio-animatronics, circle-vision 360° and Fantasound. I see Disney Accelerator as an extension of this legacy and a new way of bringing together the creative energies of the media/entertainment and start-up communities to inspire innovation.”

Disney Accelerator will select 10 startup companies for a three-month mentorship and seed-stage investment program which begins June 30th. Participants will receive $120,000 in investment capital to develop their ideas. They will also receive mentor support from top Disney executives, including Disney chairman and CEO Robert A. Iger and John Skipper, Co-Chariman, Disney Media Networks Group and President of ESPN, along with others from Pixar, Marvel, Lucasfilm, ESPN and Walt Disney Imagineering and the investment community.

“While the seed capital is clearly a boost for the selected start-ups, the most valuable aspect of the program is its unique access to the time, expertise and involvement of Disney Accelerator’s diverse group of mentors,” says John Kosner the EVP Digital and Print Media, ESPN who is one of the participating mentors. “These new companies will get the benefit of all the ideas, experiences and lessons learned from some of the most successful and innovative leaders Disney and its network has to offer.” The list of mentors also includes Anne Sweeney, Co-chairman Disney Media Networks and President Disney-ABC Television, Group; Jason Calacanis, CEO and Founder, Inside.com; and Alan Patricof, Founder and Managing Director of Greycroft Partners.

According to Meyer, that the Disney Accelerator “unites the start-up community and the media/entertainment industry in an effort to collaborate on new, disruptive, innovative products that could provide opportunity or value for our business and inform the future of the media and entertainment industries.”

Along with access to stories, characters, technology and other resources from across The Walt Disney Company, selected teams will also present their companies and products to industry leaders and investors during an Investor Demo Day in September.

Applications are being accepted through April 16.

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