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Industry-Research | Perspectives

Native advertising: Is there still room to grow?

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

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

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

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

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

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

Perspectives

The cookie conundrum: Complexity for publishers in the age of ecommerce and cybercrime rings

Media publishers in 2018 are at a historical juncture as they face new pressures from many directions. These pressures included competing content providers who provide a wider array of products to draw site users; readers with changing habits, expectations, and preferences; and a growing number of data privacy regulations that are forcing businesses, in general, to change how they operate.

Publishers in the increasingly diversified digital media landscape have had to revise their business models along with the introduction of paywalls, multi-tiered subscription packages, and merchandise. Not only are they content providers but full-blown ecommerce businesses, a change that comes with its own set of challenges.

Cookies and commerce

That fact is that, if a website accepts any form of payment, it is running an ecommerce platform. Actually, media companies are unique in that they can have three disparate revenue channels all tied to their digital environment: advertising/sponsorships, subscriptions and merchandise. More likely than not, these three channels are managed by various internal groups with different objectives. The absence of a single throat to choke for the digital environment at a time when the latter is under mounting cyberattacks and a growing number of data privacy regulations raise these companies’ exposure to a host of digital risks.

The most significant challenge is managing all the third parties and digital partners who help make the ecommerce websites’ user experience a success. That experience involves providing content to users based on their subscription level and enabling payment for subscriptions and—for a growing number of publishers—merchandise.

The problem is, most of these third parties, and the cookies they use to identify visitors/users, are unknown to publishers. On average, the cookies they drop into an ecommerce site can account for anywhere between 50-95% of all cookies on that site. Left unmonitored and unchecked by publishers’ digital policies, those largely unknown cookies can degrade the user experience by driving up latency, collecting information from unsuspecting users, or both.

Regulation ups the stakes

While latency might not break any laws, collecting information without users’ informed, specific consent violates a rising number of data privacy regulations. We have seen the impact of changes to the legislative landscape on publishers. Privacy laws such as the EU’s GDPR and the state of California’s Consumer Privacy Act have created an increasingly dangerous environment for data processors who fail to adhere to them.

In May of this year, after GDPR came into effect, large US based publishers such as The Chicago Tribune became unavailable to EU readers, due to the mismatch in privacy laws in the European Union, and the code operating on these sites. At the time of writing, the Tribune remains offline in the EU, highlighting how seriously even the largest publishers are taking the legislative changes we have witnessed this year. The proposal of a U.S. federal Consumer Data Privacy Act, which would jail CEOs for misleading regulators makes compliance even more urgent, especially for large companies.

The mood of publishers’ audiences is also changing. As the Cambridge Analytica scandal has proven, users of all types of platforms are increasingly aware and suspicious of how their own data is collected and used. The last year’s mega breaches such as Equifax have only escalated consumer wariness of the security and use of the data they willingly provide to publishers.

Bad actors

To further muddy the waters, we have seen the exponential growth of malicious campaigns targeting publishers. Increasingly sophisticated cybercrime groups such as Magecart, widely believed to be responsible for the British Airways breach, and, more recently, 3ve, are exploiting vulnerabilities around payment pages, capitalizing on digital advertising’s obscure processes, and targeting users of digital wallets.

As if all of this wasn’t enough, publishers also have to contend with upstream partners who process or use the data harvested on their platform whose consent management process, or lack thereof, could put publishers at risk of infringing data privacy laws.

Digital cookies are routinely dropped on with 65% of cookies collecting personal data, and 28% of cookies lasting longer than a year. While they allow publishers to provide a better experience for readership, it can also mean that they are in direct conflict with the latest data privacy laws.

Getting cookies right

Publishers can take proactive measures to stay compliant by ensuring that executives in charge of the various ecommerce revenue streams align their goals, objectives and policies in order to safeguard and enhance the user experience. Understanding the landscape of your digital ecosystem is essential. Make sure that you are monitoring your website for the code being run, and proactively question why it is running. Furthermore, the third parties running code, and the companies in their own supply chain who process data need to understand the players and activities in their own digital landscapes.

However, taking these steps are just the start. Publishers must also prove such measures are being taken. Therefore, publishers, their third-party partners and any other relevant parties should undertake rigorous audit trails to retain proof of regulatory compliance. This allows you to make the case for your overall legislative posture, if it is called into question.

In addition to this, there are industry organizations which aim to create a set of standardized compliance-related practices in order to create a more transparent culture around cookies. The International Advertising Bureau have attempted to deliver and enforce a framework via their CMP Validator. The AOP (Association for Online Publishing) UK has engaged in similar activities with their Cookie Consortium. Involvement of as many publishers and technology vendors as possible in these industry initiatives is crucial to the continued success of publishers and other players along the digital supply chain.

Why it matters

It’s important to establish that the running of cookies on web pages is a fundamental part of how the internet functions in 2018. It makes life significantly easier for both publishers hoping to keep users happy, even working to turn this hope into an actionable reality. It also benefits users hoping to access content, and marketers hoping to build a strategy.

However, they can only provide these useful functions if the organizations that use them do so with the appropriate regard for any regulations that govern them, as well as for the users whose data is stored in them. In fact, publishers stand to gain the most from the changing regulatory environment, which provides an opportunity to collaborate more closely with third parties and digital partners, and ultimately build customer trust by improving their user experience.

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.

Featured Post | Innovation | Perspectives | Revenue

In 2019, these 4 shifts offer opportunities for trusted media brands

 

Successful media companies have always relied upon having a direct, trusted relationship with consumers and advertisers. Consumers want to know the brand and the experiences they’ll get from them. And advertisers that want to build this same level of customer relationship directly seek out these trusted media brands or tune advertising algorithms their way.  

The teams at trusted content brands wake up every day and create content people love, products that serve them well, and safe and valuable advertising environments—all while maintaining the high level of ethics and professional standards that benefit viewers, readers, listeners, and a healthy marketplace. And we’re here to support you.  

What makes our members unique is also what makes DCN unique. By focusing at the brand level across the entire media strategy, we’re able to advocate and work to advance the future of trusted news and entertainment and partner to develop all sources of revenues. We can also do it without needing to curry favor or meet the needs of a few large tech platforms with out-sized influence who are required partners for any modern publisher. 

As we turn toward 2019, it is a good time to reflect on the top-of-mind trends for media companies. Here are four important shifts happening in digital media right now—all of which play into the strengths of trusted media brands:  

1. Revenue, direct from audience.

With our quarterly and annual members-only benchmark report, DCN has unique access to market research specific to premium publishers. Importantly, our research isn’t skewed with numbers from Google and Facebook. (This is a very common issue in industry research. Always look “under the hood.”) Our research is based solely upon our members. One of the things our benchmarks tell us is that approximately 80% of members’ digital revenue comes from advertising. However, we’re finally seeing growth in direct revenue from audiences whether it comes in the form of membership, subscription, or donation.  

Trusted publishers are uniquely positioned for this shift because they offer exactly what people want: high quality news and entertainment – that’s worth paying for. It remains to be seen how the market evolves in order for this revenue segment to grow as it must, but we’re thrilled to see our members playing a proactive role in shaping the opportunities.  

2. Distributed platforms, going over the top

The list of platforms is endless and evolving: YouTube, Facebook, Snap, Twitter, Apple News, Flipboard. While publisher revenues on these distributed platforms have been promising at times (YouTube), they’ve often been disappointing (Apple News, Facebook Watch). But right now, quality content creators are seeing the fastest movement in the video space, particularly long-form and over the top (OTT).

Our best practice research on OTT earlier this year showed how our members are taking aim at these opportunities. However, new gatekeepers are surfacing in the OTT space like Amazon and Roku. And while Google and Facebook don’t like being called “walled gardens,” every new platform will no doubt be planting their own seeds to maximize their profits off your content. Experimentation is essential. But protecting your IP and deal terms early on is critical.  

3. Ad targeting, rebirth of context 

In the EU, the impact of GDPR has just started. There are new claims calling into question the entire way Google has collected consent for its ad supply, how real-time bidding operates, not to mention endless class-action suits mostly focused on Google and Facebook. DCN has distributed research on Google’s unique and unavoidable ability to mine behavioral and location data significantly beyond user expectations as you browse the web and walk the streets . We’ve argued towards raising the bar on companies who collect data across most of the web while recognizing the inherent trust in choosing to visit your environments, brands and context.  

Global leaders are asking more questions than ever. Looming large over the discussion is a new law in California which will impact the very companies that are now (albeit, ironically) advocating for federal laws to save them through preemption. It’s been a wild year when Google, Facebook and its trade group, IAB, are now finally pushing for a federal privacy law thereby admitting their existing frameworks may be failing consumers. Quality publishers have a unique role in shaping any solutions as consumers seek more controls and alignment with their expectations. Consumers don’t know the hundreds of ad tech companies mucking up their web experiences, but they do know you and your brands. And, of course, this value then transfers to ads in this environment.  

4. Advertising, direct to consumer

Research from the IAB, as well as industry discussions, has driven a DTC (“direct to consumer”) movement as the next big thing. Here is the great news about this conversation: It’s no longer focused on the plumbing, data, ad tech, and vendors. It’s focused on how brands have value and can connect directly with audiences and consumers, bypassing gatekeepers and intermediaries. This is the sweet spot for quality content companies. In fact, I’d say if anyone wants to better understand how to go direct to consumers, they should start with the members of DCN.

But here’s the rub: Many players in the market won’t ever really be able to go “direct to consumer” without relying on the brand equity of trusted media. In order to find scale, they’ll first need to build demand, be willing to bundle, and find quality brands to associate with and carry their flag. They’ll want to be near those with purpose and value recognized by the public.  

I’m sure each of these movements will surprise us in ways we can’t predict. They may develop more slowly than anticipated or accelerate at light speed like the privacy regulation has with GDPR and Facebook’s mishaps hitting in the same quarter. But either way, premium publishers should be ready as, with the right proactive strategy, there are opportunities in all. 

Perspectives

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

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

Industry-Research | Revenue

How to build a “habit loop” to form a lasting and lucrative reader relationship

Consumer engagement is a critical component of news publishers’ direct to consumer revenue strategies. According to the International News Media Association’s (INMA) new report, Unpacking the Reader-Subscriber Lifetime Customer Journey, every publisher component from content to membership programs and e-newsletters, must reflect a strong and unified value proposition to consumers in order to be habit-forming.

The report includes highlights of Charles Duhigg, a Pulitzer Prize-winning journalist and author of Power of Habit, explanation of the science behind a habit formation. Scientists refer to this as “the habit loop” and it can easily apply to reader engagement. Every habit has a cue, routine, and reward. Duhigg explains that people stop “thinking” when they perform habitual activities. In fact, about 40 to 45% of what people do every day are routine based decisions (habits) rather than conscious decisions. Publishers should aspire to their content being habit forming.

Rewarding behavior

However, to create a new habit, there needs to be a clear and distinct reward. It’s even better if the reward is immediate. Interestingly, Duhigg believes educating people about the “habit loop” helps to change their behavior. If the reward is clear, consumers understand the payback of their actions and accept them more easily. Rewards don’t just need to be monetary or transactional; they can also be emotional.

The report also identifies the importance in shifting focus from top of the funnel acquisition metrics to the consumer lifecycle and conversion metrics. The Wall Street Journal did just this and now trains its journalists to think about three key metrics:

  • Reach: How many consumers are reached by WSJ content at any given moment? Consumers are identified in two distinct groups a) subscribers and b) potential subscribers.
  • Quality: Are the consumers reached the ones who will return to consume more content? Will they promote WSJ content to friends and family?
  • Habit: Is the routine habit forming? When you build a reading habit, the consumption cycle continues.
Engaging strategies

The INMA report also features Matt Skibinski, from The Lenfest Institute, and cites his definition of engagement: “when readers find your content, products, and brands valuable enough that they are willing to pay for it.” Skibiniki believes publishers should look at the occasional reader, the regular reader and the one-time reader to classes of readers will help identify the different signals of engagement.

The INMA report finds consumer engagement to be the most important outcome of direct to consumer revenue strategies. It’s when habits and emotions create a pattern of repetition. It’s also when retention trumps acquisition in a publisher’s relationship with its audience. And INMA concludes that the greater the engagement, the greater the consumer revenue.

Perspectives

Three internet privacy acts every publisher should know

Online, it can seem like the geographic borders of information and e-commerce are becoming more and more blurred. But as a digital publisher, if you’re serving ads to audiences in the US, Canada, or the European Economic Area (EEA), it’s good to be aware of regional privacy and data collection, processing, and disclosure laws, and how each change with different countries.

According to our data, publishers are seeing an average split of 40% US, 15% EEA, and 8% Canada traffic. So we’ve rounded up some information privacy laws and personal information-handling practices that you should keep in mind, whether you’re based in those countries, see visitors from them, or want to to grow your traffic from these regions.

On a serious note, complying with privacy laws and understanding the impending updates could help protect you from everything from fines and class action lawsuits to protecting your consumer confidence from a damaged brand reputation.

1. EEA: General Data Protection Regulation (GDPR) for Publishers

What is it?

GDPR came into effect May 25, 2018 and applies across the EEA. GDPR is considered the data processing standard. It takes a proactive, consent-first approach to the collection of data and analytics.

Why should it matter to publishers?

GDPR ensures that companies can’t collect data without a lawful basis and a reason for processing. GDPR has the broadest definition of the personal data that it protects of any major privacy law. So, if you collect any information from EEA-based users, GDPR should be on your mind. Sites offering goods or services to EEA buyers, or tracking their online activities, are now required to obtain consent from users on the data they collect and with whom they share it with.  Consent Management Platforms, or CMPs, are used by many publishers to manage consent. (View trends in publisher decisions when it came time to implement GDPR).

If you’re found to be in breach of GDPR, you could see big fines, between 2 to 4% of your annual global revenue, in addition to €10 million to 20 million, depending on the severity of the offense. You can be found to be non-compliant with GDPR if you use data in a way that you do not have consent for, or in the event of data breaches—losing consumer information in a cyber attack.

2. US: California Consumer Privacy Act for Publishers
What is it?

Scheduled to come into effect in January 2020, California’s new privacy law AB 375 was signed in by unanimous votes in the summer of 2018. As the world’s fifth largest economy at $2.7 trillion GDP, it’s likely that businesses targeting US visitors will encounter California residents. Consequently, California could become the de facto approach for the US. While California’s privacy law has passed, the Internet Association (a lobbying group that represents companies like Facebook, Google, Uber, Amazon, and Microsoft), the US Chamber of Commerce (the country’s largest lobbying organization), and the Interactive Advertising Bureau (IAB) are encouraging US federal lawmakers to enact a federal privacy law. They want to avoid the confusion and complications of having to navigate a separate privacy law for every state in the US.

Why should it matter to publishers?

The California Act gives consumers the right to decide which personal data is collected and for what purpose. It also allows them to opt out of having their data sold.

Personal information as defined by the California Act are standard identifiers in the physical world (like driver’s license or social security numbers), digital identifiers (like email addresses or demographic data), online behaviors (like IP, search, browsing history, purchases, and interactions), and any inferred data.

The California Act isn’t quite as rigorous as GDPR. The California Act doesn’t require consent or permissions in the first place, instead focusing on a consumer’s control of who sees their data. Where it significantly differs from GDPR is the lack of a stop mechanism—companies can still collect information—and no initial consent is required.

Publishers who use ad tech that track visitors around the web with cookies and mobile advertising IDs should be aware that the California Act requires that publishers have an option to give people a way to ask for deletion of the information collected. If that personal information is sold or shared, the company must disclose the purpose.

3. Canada: Personal Information Protection and Electronic Documents Act (PIPEDA) for Publishers

What is it?

Canada’s PIPEDA came into effect in June 2015, with updates scheduled for January 2019. PIPEDA protects personal information entrusted to commercial organizations. Personal information includes a person’s age, name, ID numbers, income, ethnicity, blood type, comments, opinions, and employee records.

Why should it matter to publishers?

Targeting Canadians? Publishers will need to obtain their consent when they collect, use, or disclose the Canadian individual’s personal information in the course of any commercial activity. The federal-level PIPEDA gives the user the right to access any personal information gathered, and be informed if that information is used for any other purpose than the original communicated intent.

Like GDPR and the California Act, PIPEDA charges the publisher with protecting the personal information gathered, regardless of whether that is handled directly or by third parties. Interestingly, PIPEDA doesn’t cover any business contact information that an organization collects, uses, or discloses for the purpose of communicating. Note that PIPEDA is one of several laws in Canada that relate to privacy rights.

There are 10 principles for publishers to follow, which outline: accountability: identifying purposes; consent; limiting collection; limiting use, disclosure, and retention; accuracy; safeguards; openness; individual access; and challenging compliance.

Any publisher that breaches PIPEDA could face fines of up to $100,000 CAD.

Privacy Matters

There you have it, three major privacy acts you need to know about as a publisher in high economic demand areas. Privacy laws are complex and this article is meant as an overview, not a replacement for legal advice. The reality is that with increasing legislative and consumer focus on data breaches and digital privacy and protection, scrutiny and guidance is likely to increase. As such, we plan to keep a close eye on these important issues and think you should too.  

About the Author

Trish Manrique is a Content Marketing Partner at Sortable, a Canadian  customer-focused, data-driven ad tech company.

Footnote: What is the European Union (EU) and the European Economic Area (EEA)?
There’s some confusion as to what the EEA is, versus the EU. The European Union (EU) is a union of 28 member countries and both a political and economic grouping. (Source: https://www.gov.uk/eu-eea)
The European Economic Area includes EU member countries and includes countries from the Scandinavian region. We’ve listed it in a handy table below.
The European Economic Area (EEA) includes EU countries and also:
 
Iceland
 
(IS)
 
Liechtenstein
 
(LI)
 
Norway
 
(NO)
 
**Switzerland (Confederation of Helvetia) - Swiss nationals living in the UK are applicable
 
(CH)
 
The 28 EU countries and their country codes are:

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the UK.
 
Austria
 
(AT)
 
Belgium
 
(BE)
 
Bulgaria
 
(BG)
 
Croatia (Hrvatska)
 
(HR)
 
Republic of Cyprus
 
(CY)
 
Czech Republic
 
(CZ)
 
Denmark
 
(DK)
 
Estonia
 
(EE)
 
Finland
 
(FI)
 
France
 
(FR)
 
Germany
 
(DE)
 
Greece
 
 (GR)
 
Hungary
 
(HU)
 
Ireland
 
(IE)
 
Italy
 
(IT)
 
Latvia
 
(LV)
 
Lithuania
 
(LT)
 
Luxembourg
 
(LU)
 
Malta
 
(MT)
 
Netherlands
 
(NL)
 
Poland
 
(PL)
 
Portugal
 
(PT)
 
Romania
 
(RO)
 
Slovakia (Slovak Republic)
 
(SK)
 
Slovenia
 
(SI)
 
Spain
 
(ES)
 
Sweden
 
(SE)
 
The United Kingdom
 
(UK)
 


**though neither an EU nor EEA member, Swiss citizens may reside and work in the UK, like other EEA nations.


 


		

		
			


	



			
										
						


	
	
					
	
	
	

	

		

						

				Perspectives
			

			
2019 will be the year of app retention. Here’s how machine learning can help make marketing human again.

			

				 			

		


				

			
Ten years into the iPhone and global App Economy and all the rules have changed. For nearly a decade, app makers focused on app downloads and installs, the lower-funnel activity that powered staggering growth in the early days of the app store. Now, this focus has shifted due to a dawning realization that sustainable success is the result of a strategy that drives engagement and activity deeper in the funnel. The focus has rightly shifted to app retention.


A defining moment was the observation by mobile measurement company Adjust, which found that on average users delete apps 5.8 days after they used them last.  Significantly, Entertainment apps have the shortest lifespan, with users deleting this app category less than one day following their last session.


Graphic based upon an Adjust analysis of 8 billion app installs from January through July 2018.


What’s worse, the average app loses its entire user base within a few months. Media apps may offer fresh content to nurture engagement, but even that appeal can grow stale. A recent report that provides an overview of Media and Entertainment engagement and retention metrics reveals 43% abandon the app a week after they install it and 67% of users churn within two weeks.


Indeed, 2018 will go on record as the year our fascination with the hockey-stick growth of the global App Economy as measured in app downloads (pegged to grow globally from 205 billion in 2018 to 258 billion in 2022) was replaced by the sober realization that the average retention rate for mobile apps plummets after just the first three days.


It follows that 2019 will be the year we see an avalanche of interest and activity aimed at finding new and better ways to encourage app engagement, app retention, and drive lasting loyalty.


Aligning marketing with app activity


In the online marketplace, a single-digit increase in retention can mean a double- or even triple-digit increase in profits. When it comes to marketing and monetizing apps, the advantages of offering the appropriate campaign at the appropriate moment can equally significant.


It’s a given that effective marketing is personal and relevant, aligned with who your consumer is and understanding of their individual needs. However, apps introduce a new dynamic: activity. To deliver marketing and messaging users will accept and appreciate, marketers must also segment audiences according to what they have or haven’t done in-app.


If you want users to keep coming back to your app, you need to understand user profiles (age, gender, geography). But you also need to grasp user behaviors and the patterns that point to churn. (Have they launched the app in the last 3-5 days? Where did they drop out before committing to a subscription? What did they choose as news preferences and how often would they prefer updates?)


Unfortunately, the work required to segment audiences and – more importantly – market to each user segment differently has moved beyond human capacity. It requires marketers to sift through billions of data points (trillions if you count the input from the smartphone sensors).


In a recent interview Anand Jain, Co-Founder at CleverTap, a mobile marketing platform company sharply focused on the science of app engagement, told me marketers typically tend to use “less than 5% of the data available to them to make decisions.” However, it’s not just because marketers are overwhelmed by the sheer volume of data. Marketers, he said, also increasingly struggle with bias. “Preconceived notions about what the data is ‘telling’ them about how users should – and must  – act in their app or react to marketing messaging is blinding marketers to the smart ways they could be prioritizing and personalizing campaigns to match every user’s unique engagement preferences.”


Removing bias to deepen engagement


That’s where machine learning can play a major role. It has the capacity to weed out human bias and help marketers open the aperture of how they view and engage their audiences.


Right now, marketers tend to operate according to rules. If users haven’t done x in the app for a certain period of time, reach out with y message via the channel that makes the most sense (push, in-app messaging, text, email, social). But without a deep understanding of who the audience is and what will bring them back (insights that emerge when marketers wield all the data, not just 5% of it), the outcome—even if it is personalized to address the user by first name—has many similarities to one-size-fits-all marketing.


Good marketers are clearly customer focused and likely have a strong intuitive sense of their customers’ behaviors. However, they will undoubtedly achieve greater success by understanding the vast amount of customer information that digital makes possible. This is the first step to architect strategies that will allow them to achieve customer intimacy at scale.


Engagement is emerging as “the” performance metric that matters across the every stage of the marketing funnel and every step of the user journey. But keeping users active and interested remains the biggest puzzle marketers have yet to crack. That’s where machine learning shines. It gives marketers a much greater ability to tailor engagement approaches to specific audiences, even specific customers, based on the probability that they are very likely, likely and even less likely to churn. The opportunity and ever-present challenge of mobile is its intimacy. To retain customers, every offer, incentive, “nudge” in the desired direction must strike a personal note.


		

		
			


	



			
										
						


	
	
					
	
	
	

	

		

						

				Perspectives
			

			
DCN’s must reads: week of November 15, 2018

			

				 			

		


				

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



		

		
			


	



			
										
						


	
	
					
	
	
	

	

		

						

				Featured Post | Perspectives
			

			
Recklessness, a reckoning, and the road forward

			

				 			

		


				

			
Two cars travel down a two lane road approaching one another from opposite directions. A solid white line sits painted in-between them as they approach each other. One car swerves, crossing the line, then cuts back. 65 MPH and climbing, and the only thing preventing the car from crossing into the other’s lane again is a theoretical barrier painted on pavement. These guiding lines are not a guarantee. They’re more of a social contract, a legal rule that we abide by because it is for the betterment of ourselves, others, and the rest of society. However, this driver chose not to follow the rule and crossed into the wrong lane. What happened? Recklessness.


The media and information industry is in an age of recklessness. Fueled by misinformation, lines are being crossed. And this reckless behavior is taking a serious toll on the trust in and value of the media. 


We want to believe in societal norms that govern the free flow of trustworthy information. There are standards that should apply across platforms, publishers, and consumer domains. There is an assumed integrity that applies not only to the words we write, but the videos we produce, and how they are spread throughout the web. But this recklessness has led to a reckoning; and now we must forge a new path forward. 


Post-Truth, True Story


Unfortunately, this is clearly no longer the case (‘That’s not altered. That’s sped up. They do it all the time in sports.’). There are now separate narratives, cultures, and communities built around the rhetorics of truth, information and more dangerously, misinformation. Reputation is no longer a default to “trusted” media brands at the domain level. It needs to be re-focused, re-earned, and re-defined. 


The role of media institutions today is more important than ever. In the age of recklessness, we need to continue to provide our communities and readers with the knowledge they need to inform their lives, societies, and governments. And it’s the responsibility of the rest of society to process this information and re-paint those lines that define to bring awareness to what is real and what is not. Today it’s more important than ever to understand the information that is being put in front of you. And that understanding runs deeper than images and text, to the source, the context, the delivery channel, and much more. 


The revolution will not be qualified; it will be quantified. The media business is positioned better than ever to expose the value of their work and drive their business forward. Putting an emphasis on trust, the value of a media brand is in its operation and its reputation. 


Media business leaders need to keep their eye on the road. How can they secure and deliver information that is validated, honest and objective? And through that, expose that their organizations differentiate from other less reputable players in the space. 


To emphasize this value, media must prove its worth. That seems frustrating, especially because many of these institutions have been in business for decades, even centuries. However, when you ask someone to pay for something, you must give them a reason why. In order to be successful, the media business must be subscribed to, not just supported. That means creating a product market fit that is both helpful and necessary. To do this, we must expose our practices, and how we seek provenance, validation, truth and every other value that’s standard to the media industry. 


Proof of Effort


Building value means exposing the underlying components for all to see. To severely oversimplify: The greatest value of the media industry is in its effort. The practices behind media, and the process by which information is researched, created, edited, and published is what drives its purpose and differentiation from imitators. 


However currently, the only way to quantify media’s value is in generalities. How many page views, referrals, visits, and shares does a piece of information garner? This is the opposite of what drives reputation and an institutions’ value, which has everything to do with the actions before a piece of information is published. Because of this, and how information is distributed (social platforms, search, applications), information has become commoditized. The value of a viral video is measured the same as an investigative expose, even though the investment in each is severely different. And gaming that system is how we continue to not just commoditize our worth, but blur the value between information and misinformation. 


Media’s recklessness is fueled by misinformation. And because of this, not all media can be valued equally. But how did we get here? The value attributed to media-at-large is dictated by the returns of where it is being distributed. Facebook, Google, and other major platforms have rewarded content based on output mechanics. This has little to do with how the information is created, edited, and published prior to distribution. Because of this, everything appears to be created equal; even though the efforts behind different types of media work and the investments tied to them are all different. We need to refactor the economics of the web and better reward and expose the value in the efforts of creating the good, while in parallel demoting the bad. This starts with quantifying elements of effort as it relates to truth. 


A Valuable Proposition


Quantifying the next era of media can be  associated in a few sets: attribution, provenance and the effort behind the work. What’s clear is that we know that there is value in a creator’s work. And we, as an industry,  recognize what it is but do a terrible job conveying it to our audience and consumers. Building a way to expose the efforts in media and put the value on that input instead of the output will get us there. This is the key differentiation between what can and cannot be trusted; is the way that we got to this information accurate? If so, show it.


This information exposure is the first step towards a path away from misdirection and recklessness. In today’s society, the lines in the road are meant to be abided by because there an understanding how they got there and why they exist. As long as that narrative continues, they will continue to do their job governing the way we as a society move around. The same goes for media. We must remind the world why these practices and principals exist, and how they came to be in the first place. They are the lines that govern information and most importantly, democracy. This must be exposed for the betterment of our world. 


All of this adds up to a world in which quality media, information exposure, and great creative translate into good business. It’s the key component to wresting control over news from misinformers, manipulators, “clickbaiters,” and social media hubs and placing it back into the hands of media organizations that want to produce quality information about issues that really matter. We must put value on our effort to build a transparent and healthy newfound ecosystem. 


Media is undervalued. It’s undervalued financially but especially undervalued in its role in maintaining a free and open society. Acknowledging and emphasizing its purpose through ubiquitous effort points solves for both. It will enable us to build new platforms, value systems and economies based on our true value and starve misinformers in its wake. 


We know why the work that we do is so important. Now it’s time for us to let the world know exactly what goes into it.


		

		
			


	



			
										
						


	
	
					
	
	
	

	

		

						

				Industry-Research | Perspectives
			

			
Marketers are ready to up their personalization game – and publishers can help

			

				 			

		


				

			
According to a new study by Forrester, many big companies struggle to develop and deliver advertising that is highly relevant and personalized. Whether it’s due to stodgy internal processes, bad data, or a dearth of appropriate technology, large organizations haven’t yet been able to make personalized advertising tactics a part of their marketing operations. 


To gauge marketplace sentiment, Forrester talked with 100+ senior marketers at U.S. companies with more than $1 billion in annual sales. 


While personalization has been a staple at marketing conferences and strategic planning sessions now for more than a decade, it seems to be one of those things that, while rather easily embraced by SMBs, is proving to be a major challenge for large enterprises. This isn’t surprising to Raquel Rosenthal, CEO at Digilant, a programmatic advertising company, who says there’s more to digital marketing than meets the eye. “To be sure, technology plays a big part in the digital advertising ecosystem,” she observes. “But I would argue that process and people are arguably more important than the tech component – especially when it comes to something complex like personalization – and it takes time for all three areas to gel successfully at large corporations.”


Three Tactics to Try


Personalization is one of the few issues in marketing that genuinely impact all three primary constituents – advertisers, platforms, and audiences – equally. The advancement of true customized advertisers will lead to better outcomes to everyone in the mix: Advertisers will improve ROAS, platforms will be able to charge more, and audiences will have superior experiences. It’s a win-win-win. 


Clearly, the marketplace clearly has a ways to go before this becomes a reality. Publishers can pursue three tactics to help accelerate the movement: 


1. Package & Promote Personalization Capabilities


Personalization, one-to-one marketing, customized messaging – call it what you will – but make it a bit part of your pitch, as soon as possible. If it’s already there, emphasize it more, and maybe even lead with it. Personalization is subjective, and means one thing to a startup and something completely different to a $10 billion category leader. 


If you’re an established publisher, promote personalization even at the risk of putting mainstay features like superior reach and rich audience data on the back-burner. The marketplace already knows you have these offerings – that’s the benefit of being around for awhile – but might think you’re lagging in the area of personalization, like they are. Let them know otherwise, in no uncertain terms, and get aggressive about it. 


2. Deliver The Personalization That Most Brands Can’t (Or Won’t)


Whether it’s because of bad data, lack of technology, regulatory restrictions (real or perceived), or stifling internal politics, many big brands aren’t able to manage personalized campaigns with internal resources. But most are able engage with external providers to do so. 


Either through the application of creative (“innovative”?) techniques that rely on data segmentation and labor-intensive methods, or via the litany of ad technology flooding the marketplace, publishers of every stripe and size are in a favorable position to deliver targeted marketing solutions. Getting there might require an unorthodox product design strategy, but it’s there for the taking. 


3. Fortune Favors The Bold


Personalization is an area where traditional publishers have a unique window of opportunity these days. While the eyes of the world remain fixed on the duopoly’s every move, there isn’t a lot of interest or bandwidth to cover the rest of the marketplace, affording other players more room to maneuver. 


These market conditions won’t last favor, but a window currently exists. And for publishers interested in making bold moves, personalization could be a appropriate fit. 


Many Big Brands Are Lagging, And Publishers Can Help


Forrester sums up its core findings of this research effort neatly, and in a way that highlights both new market realities and the underlying opportunities: “To differentiate themselves and provide value for increasingly demanding customers, companies must become obsessed with delivering relevancy and value in all their customer interactions, including their advertising.” 


Knowing how valuable personalization can be for brands, and how significantly many are struggling to employ the tactic, publishers that find a way to help advertisers quickly and easily incorporate personalization into marketing operations will be able to meaningfully differentiate themselves from the competition – including the duopology. 




About The Author


Tim Bourgeois (@ChiefDigOfficer) is a principal at East Coast Catalyst, a Boston-based digital media audit company. 


 


		

		
			


	



			
										
						


	
	
					
	
	
	

	

		

						

				Innovation
			

			
What is OTT?

			

				 			

		


				

			


Are you down with OTT?  Yeah, you know me.


O is for ‘Over’.  T is for ‘the’.  The last T? Well, it’s not that simple.


What exactly is the ‘Top’?  You probably haven’t heard two people define OTT alike. In fact, lately it has come to mean everything Other Than Traditional.


So, let’s start from the top, with a multiple-choice question:


What is OTT?


(a) STB: the set top box with your cable subscription and remote control using a private cable network also known as an MVPD (multichannel video programming distributor). These days, consumers can also stream their favorite content like Netflix via apps integrated with their STB. A lot of streaming content can also be accessed via Xbox and PlayStation gaming consoles that increasingly take centerstage in living rooms.


(b) STV: the smart TV.  No longer just a screen, these televisions are equipped with an operating system (e.g. Android TV) so that they can connect to the public Internet network and directly stream content.  Moreover, CTV (connected TV) streaming devices like Fire TV, Apple TV, Chromecast, and Roku, connect TVs to the Internet to stream consumers’ favorite content onto any TV no matter its IQ.


(c) iOS, Apple mobile Apps, and Android Apps on Google Play. These apps allow consumers to stream content on mobile phones anytime, anywhere. Users can also directly “cast” or project from a smartphone to televisions, which allows the mobile to serve as the new universal remote.  And let’s not forget how many people stream video over the Internet onto laptop, desktops, and tablet.


(d) All of the above.  Or, DTC- Direct to Consumer.  This is the right choice and what it’s all about.  Essentially, it’s all about the direct distribution of video content to consumers over the Internet, no matter how its accessed whether by streaming device, gaming console, Smart TV, mobile device, computer or STB. No cable company/private network required.


What’s not OTT


Often, there is confusion about PTV (Programmatic TV) — which is the enablement of digital data capabilities for greater audience insights than GRP (Gross Rating Points) and reports in real-time instead of months. There’s also its subset ATV (Addressable TV), which accomplishes one-to-one digital targeting capability.  PTV and ATV improve the targeting and reporting capabilities of both OTT and traditional linear TV.


For broadcasters and video creators, OTT offers a direct relationship (and possibly content subscriptions) with consumers outside of the cable TV universe.  But like OTT itself, the Internet-delivered video market is acronym-riddled and complex. A good grasp of the basics will help you understand the many opportunities ahead when viewership of various OTT video services will overtake traditional broadcast TV. This is predicted to happen within the next 5 years, according to a recent OTT Video Services Study.


In addition, revenues in the Global OTT market will increase to $18 billion in 2019, more than doubling the market from just three years ago.  This has massive implications not only for those who produce content, but for agencies, advertisers, and technology providers as well.  As companies in this space begin to assess how they will address this massive paradigm shift, it’s a good time to get familiar with the OTT opportunity.


		

		
			


	



			
										
						


	
	
					
	
	
	

	

		

						

				Featured Post | Perspectives | Policy
			

			
The Midterms are over: Sizing up what it means for big tech

			

				 			

		


				

			
For the last two years, Congress has increasingly focused on big tech platforms. Lawmakers have summoned executives, consumer advocates, and academics for hearings on consumer privacy, market dominance, data breach scandals and perceived political bias. However, with the exception of a bill to amend Section 230 of the Communications Decency Act to clarify  companies’ liability for facilitating  sex trafficking on their sites, Congress has not yet moved significant legislation to regulate the tech industry.


Some are wondering whether a new Democratic majority in the House means Congress will start legislating, particularly with the President saying that he is interested in discussing with Democrats whether or how to regulate the technology industry. Let’s take a look at how the 2018 midterm election results might impact a few high-profile tech issues.


Market Dominance of Big Platforms


Even before the elections, Democrats and Republicans raised concerns about the outsized influence of Google, Facebook, and Amazon – albeit for different reasons. Many Democrats are concerned about the data surveillance business models of big tech companies. Republicans, on the other hand, distrust social media algorithms, which they believe favor liberal points of view over conservative voices.


I expect both parties’ concerns will only grow, especially as we get closer to the 2020 Presidential election. And those concerns might fuel action on other issues. Congress is not likely to do anything to directly address the dominance of the big technology platforms. The expectation is that the Department of Justice and the Federal Trade Commission will work with Congress to provide guidance on what, if anything, lawmakers should do. Thus far, discussions have focused on how various digital business models function and what remedies or regulations would be needed to enhance consumer experiences.


Net Neutrality


Over the past decade, Congress and the Federal Communications Commission (FCC) have been bickering about net neutrality without final resolution. Most recently, the Republican-controlled FCC rolled back net neutrality regulations promulgated by President Obama’s FCC.


With Democrats set to take the reins in the House, they are more likely to move a bill to reinstate those Obama-era net neutrality rules. But the Republican-controlled Senate is likely to completely ignore any bill sent over by the House. That dynamic could change if the courts rule on the pending challenges to the FCC’s rollback. Until the incessant shouting stops, this is likely an insular technology discussion and fodder for future campaigns.


Consumer Privacy


Congress has held dozens of hearings on consumer privacy over the years. This year was no different. However, the tone of the conversation has changed dramatically just in the past few months. As mentioned before, many Democrats have long advocated for a consumer privacy bill of rights, saying that Congress needs to step in to protect consumers. Now, a few key Republicans agree. Many in the industry are calling for the same as the California Consumer Privacy Act and the EU’s General Data Protection Regulation go into effect.


Just last month, Senate Commerce Committee Chairman John Thune (R-SD) stated, “It is increasingly clear that industry self regulation in this area is not sufficient.” Clearly momentum was building on this issue before the midterm elections and there is reason to believe it will continue. Senator Thune is likely to move into a leadership position in the Senate, thus relinquishing his position as Chairman of the Senate Commerce Committee.


However, the next likely chairman is Senator Roger Wicker (R-MS), who signed a bipartisan letter with three other key senators in September saying they want to work with the Administration to “provide consumers with more transparency and control over the collection and use of (consumers’) personal data while preserving the innovation at the heart of the internet.” The House Energy and Commerce Committee is likely to be chaired by Representative Frank Pallone (D-NJ), who included consumer privacy legislation on his agenda for 2019. On top of that, a host of other policymakers, including Senators Wyden (D-OR), Blumenthal (D-CT), and Markey (D-MA), have recently introduced their own legislative proposals. Comprehensive consumer privacy legislation appears to have early bipartisan and bicameral support.


All that said, our nations’ founders intentionally made it difficult to pass legislation. And, 2019 will be no different. For any meaningful legislation to advance through both chambers of Congress, Democrats and Republicans will have to put aside partisan differences long enough to find middle ground. That will be hard for elected officials to do in the current highly polarized political environment. Odds-makers would say the chances are slim that Congress can enact comprehensive consumer privacy legislation, but it’s got a better chance than most.


		

		
			


	



			
										
			


								

									


			

		

	





	


	
		

	

		




	

		

			
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