- Los Angeles Times | Disney-Fox deal is complete; CEO Bob Iger’s big swing could change media industry (7 min read)
- NBC News | Google hit with $1.69 billion E.U. fine for blocking ad rivals (2 min read)
- Wired | How Google Influences the Conversation in Washington (9 min read)
- Variety | ‘Subscription Fatigue’: Nearly Half of U.S. Consumers Frustrated by Streaming Explosion, Study Finds (4 min read)
- NBC News | Netflix is sitting on a data goldmine — and it’s starting to give us a peek (4 min read)
- Bloomberg | New York Times Cools on Apple, Whose News Subscription App Looms (2 min read)
- The Guardian | Cambridge Analytica a year on: ‘a lesson in institutional failure’ (20 min read)
- BOF | The BoF Podcast: John Ridding and David Pemsel on Reinventing Old Media for a New Media World (25 min listen)
The drip, drip, drip of ideas to regulate tech companies continues. And when it comes to privacy, even the tech giants realize that regulation is coming and want to help craft those regulations. But 2020 presidential candidate Sen. Elizabeth Warren went even further, calling for the breakup of large technology companies with her Medium manifesto and a #BreakUpBigTech hashtag.
Her idea in a nutshell is to make any company with a marketplace of goods or ideas and $25 billion in revenues into a “platform utility” that cannot participate in the marketplace with its own goods or services. “Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities under this law,” Warren writes. “Therefore, Amazon Marketplace and Basics, and Google’s ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well.”
That means Facebook would lose Instagram and WhatsApp and Google would lose Waze, Nest, and DoubleClick.
Whoa. Does that mean that suddenly publishers get their online ad mojo back? Not exactly. Those independent companies would still wield outsize power, and this campaign manifesto has a loooong way to go before it becomes real-life public policy and legislation.
Breaking Up is Easy to Love
But before we come down to Earth and reality, let’s look at just how attractive this #BreakUpBigTech idea is to so many people in media and public policy – and how it even crosses ideological boundaries. After Warren released her plan, she gave a keynote at the South by Southwest Conference in Austin on March 9. To say it was a phenomenon would be an understatement. The SXSW conference had already been trending against big tech, and Warren’s proposal and keynote lit the match for even more heated discussion and argument.
She won converts such as high-profile investor Roger McNamee, an early Facebook investor who slammed the company in his new book, “Zucked.” At SXSW, he said that, “I think Warren’s proposal is brilliant. There’s a behavior that’s rampant in the industry of people owning a marketplace and then participating in it. They do so in the detriment of competitors.”
And it wasn’t just the Democrats and those on the left cheering on Warren’s proposal; she also gained some strange bedfellows on the right who have been suspicious of the growing power of tech giants. Their arguments have not typically been about economics but about how social platforms are biased against speech from conservatives.
Even Ted Cruz supported Warren’s idea on Twitter: “First time I’ve ever retweeted @ewarren But she’s right — Big Tech has way too much power to silence Free Speech. They shouldn’t be censoring Warren, or anybody else. A serious threat to our democracy.” He was referring to Facebook actually taking down some ads Warren ran on the platform to promote her #BreakUpBigTech ideas – though they blamed the takedown on her use of Facebook’s logo.
Criticism from Tech and Media Pundits
But of course: the devil is in the details. Warren’s broad plan was an easy target for tech pundits like Ben Thompson to point out its shortcomings. Thompson notes that “the reason why all of these companies have escaped antitrust scrutiny to date in the U.S. [is that] here antitrust law rests on the consumer welfare standard, and the entire reason why these companies succeed is because they deliver consumer benefit.” In other words, they remain free services that people largely like, and it’s not realistic that Apple would sell you an iPhone without apps or an App Store.
From the right, the National Review’s Rich Lowry says Warren has hit on the perfect catnip for liberals and conservatives by calling for the breakup of tech giants, but her prescriptions wouldn’t work and are too draconian. As Lowry wrote for Politico, “Their business practices aren’t above scrutiny. But any real offenses should be addressed with fixes addressing specific conduct, rather than with a massive politically imposed reorganization across the industry.”
And in the media and journalism world, an anti-trust breakup wouldn’t really move the needle for smaller local publishers who are dealing with much more intractable issues. As Free Press director Tim Karr told Sludge, “Even under a scenario where the largest online platforms are broken into their component parts, digital advertising will remain under the control of non-news media; newsrooms will continue to be shuttered and reporters laid off.”
While Warren’s proposal is a great thought experiment that builds more momentum to regulate tech giants, it is mostly a half-baked proposal that needs more details and a better way to support independent media outlets. Yes, it’s nice to dream about a more level playing field when it comes to online ads, privacy and trusted information, but we also have to realize that tech giants have armies of lobbyists and change will happen incrementally.
Publishers are using voice technology, such as smart speakers (e.g. Alexa and Google Home), to create new connections with their audiences, particularly younger consumers. It’s also a great way to develop new revenue opportunities. According to the new INMA report, Audio Opportunities for News Media, publishers are building audio resources to allow dynamic content or ads insertion into voice-enabled devices.
The report includes a number of market estimates of ownership and media usage. For example, according to the International Data Corporation, smart speaker adoption will grow worldwide from 99.8 million in 2018 to 230.5 million in 2022.
INMA’s research also cites TMG Media, which reports that one-third (33%) of those owning an audio device, own more than one. Media habits of audio device owners show that 45% are listening to less radio, 38% are using their smartphones less, 32% are reading fewer magazines and newspapers and 29% are watching less TV.
In addition, Edison Research and NPR found that 43 million Americans own a smart speaker. This audience is open to new media experiences. In fact, 81% of them are open to new smart speakers features created by brands. Twenty-two percent of these users also like brands that create skills/features on smart speakers, stronger than any brand activity on TV, radio, and podcasts.
A few news publishers are building their audio assets internally or using third party on-demand audio platforms to distribute their new content to audiences (full detailed case studies in report).
The Financial Times
The Financial Times (FT) debuted its News Briefing, a daily news offering, optimized specifically for smart speakers. They also produced an interactive documentary, FT Hidden Cities Berlin, in partnership with Google and available exclusively on Google Home. FT estimates at least 60% of their listeners are non-subscribers to their print and/or digital products. FT views the usage of smart speakers as a new opportunity to experiment with content to grow subscribers. Further, smart speaker listeners are a younger audience, often a difficult segment for FT to target.
Alastair Mackie, head of audio for commercial at the FT believes that creating content for the smart speaker allows FT to be innovative and engaging while present itself as a digital first’ media company.
The New York Times
The New York Times’ T Brand Studio produces ad-sponsored and stand-alone podcasts. It launched The Daily, a 20-plus minute daily news podcast and radio show, in 2017. It’s widely popular and a strong advertising vehicle in the marketplace. New audio content in the works at The Times includes a daily flash briefing, an interactive news quiz, and enhanced coverage of its Sunday newspaper. Sebastian Tomich, global head of advertising and marketing solutions, thinks smart speakers offer a great opportunity to test audio content and learn about audience engagement while generating revenue.
The Times is also investing in teaching consumers how to use audio commands with step-by-step instructions.
Audio smart speakers are changing consumer habits and news media companies are beginning to invest in audio tech to produce on-demand audio content. They believe it offers great branding and marketing opportunities and can help generate additional advertising revenue. It’s a ripe time to invest in audio content as smart speaker owners are spending more time listening to on-demand news, music, podcasts, and books.
Recently, Facebook CEO Mark Zuckerberg published a new company manifesto called “A Privacy-Focused Vision for Social Networking.” In it, Zuckerberg acknowledged Facebook’s poor privacy track record: “frankly we don’t currently have a strong reputation for building privacy protective services.” Who knew he had such a gift for understatement?
Zuckerberg outlined a new approach for the company, in which Facebook will build services that allow people to communicate privately. Apart from acknowledging the extreme examples of “child exploitation, terrorism, and extortion,” Zuckerberg doesn’t say how he will address the very real concern that he may be enabling the more problematic aspects of Facebook’s effects on society to flourish without scrutiny. Nor does he say that he is changing Facebook’s basic model of hoovering up data about its users and monetizing it through marketing.
However, Zuckerberg is clearly responding to growing concerns about how the digital world impacts our privacy. I share these concerns. I also have a suggestion for how they should be addressed.
The Problem With Privacy Policies
If you are like most people, the answer to these questions is “no.” According to Deloitte, 91% of us don’t read the terms of service. Most of us are not equipped with the knowledge base or willing to spend the time needed to navigate through privacy policies and privacy settings. In 2008, one study estimated it would take a typical internet user 244 hours a year to do so! And it is surely worse today.
The Cost of Free
We sort of get that when we use a “free” service, the real “cost” of that service involves giving a company access to data about ourselves. But we only sort of get it because we don’t really know what we are giving up, and therefore we are not in a position to assess whether it’s a good deal or not. Spoiler alert: it’s not.
For starters, the value exchange between consumers and service providers is completely opaque, with only one side of this transaction really understanding what is going on. Without knowing the terms of a deal, how can you be sure it’s fair?
As my colleague Pooja Midha says, with transparent value exchange, everybody can win. Before the rise of the internet, the value exchange for all advertising was relatively clear: The ads were the cost (or part of the cost) of access to the content. If you wanted the content, you “paid” for it by giving your time and attention to the ads. Sure, we can turn the pages of the magazine, or grab a sandwich at a commercial break, but that behavior was expected and factored into the price. Both consumers and marketers had a pretty clear idea what they were getting and what they were giving up.
The Data Dilemma
With the internet, that all changed. Free services like those offered by Facebook and Google didn’t offer content, they offered functionality. And they offered it in exchange for consumers’ time and attention paid to advertising. Or, at least, so it seemed. But the unique, bi-directional nature of internet-based services allowed for a second source of value to flow to a service provider – data. And data is where the real money is.
A recent survey asked consumers whether they would be willing to share their data for a price and what price. A majority (57%) said it was worth a minimum of $10, while 43% valued it at less than $10. The higher the income, the more likely they were to want more for their data.
This stands in stark contrast to the true value of their data. Facebook’s average annual revenue per users in the US and Canada was reported to be near $112 in 2018. Think about that. US consumers think their data is worth $10 or less, and just one company is generating $112 from their data.
Transactions where consumers are faced with huge information imbalances are often targets for government regulation. It is no surprise to see the GDPR efforts in Europe and the activity happening in California with the passage of the California Consumer Privacy Act, and the Governor’s recent call for a data dividend to be paid to consumers. While renewed interest in privacy and more transparent value exchange is great, it doesn’t address the core issue. Let me explain.
Today consumers have to choose whether or not they are willing to abide by the myriad privacy policies of all the different companies they engage with over the internet. In my view, that is exactly backwards. It puts the burden on the party with the least information, and in the worst position to understand the details of what they are getting into.
This would be a huge step forward, empowering consumers, and making the digital world easier to navigate effectively, and the costs of doing so more transparent.
In a “my data, my rules” world the consumer is empowered and the value exchange is clear, with information and understanding similar on both sides. In a “my data, my rules” world, marketers can be confident that the data they are using is permissioned. This will reduce their exposure to brand damaging charges of “surveillance capitalism.” Like marketers, in a “my data, my rules” world, technology companies can engage with consumers more safely, knowing that the data they are collecting is permissioned, reducing the risk of ugly articles in the New York Times, and political fallout.
Personal Data Protection in Practice
There are two ways this change can happen. The first is government regulation. Think of it as the ‘do not call’ list on steroids. It may well be that this is the only way to flip current practice.
With one large player having established this as standard operating procedure, it would be hard for other companies not to follow. What consumer wants to use a service that refuses, as a matter of policy, to follow their preferences?
It is time for a change. Let’s stop hiding behind opacity and complexity. Instead let’s all live by a simple principle on the internet. My data, my rules.
You’re a cord cutter. You’re a cord never. You’ve extended the cord with your choice of OTT beyond cable TV.
You commute to work. You’re out of home more than you’re home during the week. So, your mobile phone has become life’s remote control for productivity and connectivity with family and friends and media, and social network(s).
As you pass fellow citizens on the go, you see them watching live sports, movies, binging shows, or catching the latest episode of a series. You can get your coffee to go. You can get your tapas to go. And now you can get your TV to go. It is easy to assume that this is the likely way that most OTT is consumed.
The Comfort of Home
However, most OTT is actually watched from a TV turned Connected TV through a smart app or OTT dongle made by one of the big four: Fire TV, Chromecast, Apple TV, or Roku. The big screen is still the preferred screen to watch TV video content. You want to be home. You want to have surround sound. You want to snack.
We consistently see this trend in OTT media from analytics revealed by the largest content streaming service provider; over 70% of the time, Netflix is viewed on Connected TVs. A majority of YouTube TV is also viewed on Connected TVs, although the service is positioned as a mobile-first viewing platform. We also see viewing of direct to consumer (DTC) OTT brands of all genres – whether business, entertainment, or family – primarily take place on Connected TV, in some cases as high as 80% of the time.
In contrast, just 15-20% of OTT is viewed on mobile devices. Of those views, an interesting and often overlooked statistic “casting,” in which viewers are mirroring or remote controlling OTT to their smart TV wirelessly from their phone. The remainder of OTT streams are being watched on computers.
With the majority of OTT being watched on a Connected TV, the medium is taking the shape and the form of the TV industry. vMVPDs are the new MVPDs. NewFronts are the new Upfronts. Even co-viewing is now a thing in OTT discussions with buyers. In this case, the number of viewers in the room watching an ad on a Connected TV is being considered, as with TV.
All in all, the trend of watching TV over the top compared to traditionally now accounts for a third of total daily TV time globally. The adoption rate will likely continue to grow as access and content proliferate over the top. Although we live our lives on the go and do most things on our smartphone, the preference and actual predominance of watching TV over the top is on a Connected TV, at home. OTT is really the new TV.
Here are some of the best media stories our team has read so far this week:
- The New York Times | British Panel Calls for Stricter Antitrust Rules on Tech Giants (5 min read)
- AdWeek | Brands Are Rethinking Their Programmatic Buying Strategies to Reduce Risk (3 min read)
- Bloomberg | Apple Races to Get Studios Signed Up for New Streaming Service (4 min read)
- AdAge| TrustX, P&G and the ANA move to reduce so-called ‘ad-tech tax’ (4 min read)
- Bloomberg | It Takes Deep Pockets to Fight Netflix (5 min read)
- The Guardian | Google must be broken up due to its ‘overwhelming’ power, News Corp says (3 min read)
- The Hollywood Reporter | At SXSW, Digital Media Bosses Exude Confidence in Their Challenged Businesses (3 min read)
- Sludge | To Fix A Broken Press, Warren’s Plans For Big Tech Will Need To Do Much More (7 min read)
- Bloomberg Businessweek | Silicon Valley’s Worst Nightmare Is Ready for Her Next Act (5 min read)
- Recode | Spotify is asking European regulators to help it fight Apple — just before Apple launches a big new subscription service (2 min read)
If someone asked you five years ago which type of digital media would be seeing its renewed heyday, the podcast might not have been on the top of your list. But indeed, the format – still firmly connected to its broadcast radio roots – is in the midst of a renaissance.
Achieving new heights of popularity means that publishers of the audio-only medium have started to experiment with new business strategies to find a path to monetization.
We’ve seen some innovative approaches in the podcast sector like digital ad insertion, or having ad slots be dynamically filled by more up -o-date or geolocated content. But analyzing the recent business moves gives us an idea of what’s coming next in podcasting revenue.
Will Revenue Follow Audience?
In early February, Spotify purchased podcast publisher Gimlet Media for a cool $230 million. In a conversation with Recode’s Peter Kafka, Gimlet co-founder and president Matt Lieber explained that Spotify wasn’t just its second largest partner but also its fastest growing partner. He went on to say the reasons why the acquisition made sense was a “disconnect between the number of people who are listening and the amount of shows they’re listening to, and the amount of money coming into podcasting.”
With the size and scope of Spotify, Gimlet saw opportunity to overcome one of the fundamental challenges of podcasting: discovery. The competitive landscape means that to have your podcast’s needle found in the metaphorical hay stack, you either need to be lucky or know how to appeal to the right audience.
Lieber told Recode that the data found at the Swedish streaming platform (and its 96 million subscribers) would help with that process. The lack of relevant listener and audience data has held back the podcast industry in the past. Platform controllers like Apple weren’t releasing detailed enough listening data. This made it it difficult to fine tune advertising budgets and understanding your audience.
That’s not to say this new found access to audiences will change the fundamentally open nature of podcasting at the publisher. While there will be most certainly exclusive productions on the streaming platform, Gimlet’s most popular offerings won’t disappear from other podcast platforms. At the time of the announcement, Spotify said they had no plans on putting the content behind paywalls.
Similar to this approach, there are efforts like the premium Stitcher service which removes ads from their free shows and offers bonuses to subscribers.
So what about the companies who do want to publish content behind a subscription fee? Podcast publisher Luminary has set its sights on being the Netflix of podcasts. With a planned launch date of June, the service will charge $8 a month to get access to podcasts from the likes of Trevor Noah, Conan O’Brien, and Malcolm Gladwell. The media start up hopes the draw of big names will have people opening up their wallets.
Although, there are those who are a skeptical of the reach of direct to consumer efforts.
“Well everybody wants scale and they want people talking about [their show] and to engage with it,” said NPR’s senior vice-president of programming and audience development Anya Grundmann. “So you haven’t seen a lot of subscription [offerings] from the very beginning when trying to build audience.”
Grundmann pointed out that podcasts often end up being the “carrot” that drives consumer purchasing of subscriptions to news publications. Recently, the Guardian began running podcast ads in the shows they produce for their membership program, which seems to be having positive results.
Reaching the Masses
However, there’s also a drive to reach as many people as possible, much like its predecessor, broadcast radio. “I don’t see us putting our stuff behind a paywall,” said Grundmann of the public broadcaster. “Our goal is to reach as many people as we can and not just people who have money.”
That doesn’t mean NPR has not benefited from new ways to monetize the format. Grundmann said it has extended its podcast-related events business because there’s “so much energy of people wanting to meet people and be part of a community.”
Whether through the draw of exclusive content for power users or listening experiences without ads, direct to consumer offerings from podcast producers are beginning to emerge. But it’s also obvious that the traditional subscription model might not be the best fit for the resurgent industry, as many producers are hesitant to go all the way and lock content behind paywalls. Creators will need to continue to experiment and test strategies to determine the best ways to monetize the connections with their audiences.
Though it’s been around in some form for well over a decade, podcasting has sort of limped along in its evolution. Unlike other digital advertising manifestations – such as search or social media – which enjoyed meteoric rises, podcasting has sporadically entered and exited the consciousness of marketers since its inception. Today it accounts for only a sliver of the global advertising marketplace – around 1% of total spending.
One explanation for advertisers’ hesitancy to embrace the podcast channel is due to straightforward herd behavior: You don’t get fired for buying ads from Google and Facebook. These digital marketing stalwarts emerged almost literally overnight in the late aughts, enjoyed glowing press coverage for a decade, and attracted tens of billions of dollars in advertising during their ascent.
The other is guilt by association. It’s well known that while online ad spending has grown (particularly for Facebook and Google), other channels – television, print, radio – have shrunk. And, for better or worse, podcasting has been lumped in with radio advertising. So, it lacked the shiny new appeal of its digital channel brethren in mobile, search, social and video.
On The Hunt For Alternatives
However, there is one aspect of the digital ecosystem that everyone can agree on, and that’s insanely rapid evolution. There’s a saying among digital media buyers that captures this spirit, and it’s only mildly hyperbolic: “a campaign that worked just fine before breakfast might fail miserably after lunch.”
Today’s advertising environment is, of course, dramatically different than it was a decade ago, or even a year ago. A combination of questionable management practices (see: privacy; see also: safety), absence of customer governance (see: Russia), and aggressive tactics (see: exorbitant prices) has some brands seeking out alternatives to the duopoly. And podcasts are going to be one of the beneficiaries of this shift in the coming years.
Why the Time is Right for Podcast Ads
Though not a one-size-fits-all kind of advertising channel, we’re advising brands to seriously consider adding podcasting to their media mix in a meaningful way, for one or more of a variety of reasons.
The Price Is Right
Due to the relatively low cost of entry and ongoing management, as well as the influx of deep pocketed players like Spotify and Luminary – which are spending hundreds of millions of dollars to shore up their podcasting capabilities and aggressively pursue market share – podcast advertising can be more cost effective than pricey online formats such as paid search or high-end social media. And attractive long-term deals are typically made available by aggressive players in the category. This makes podcasting easy to insert in planning conversations.
Ease of Implementation
Most podcast advertising involves a few lines of copy that is read by the host and/or an offer that might require an accompanying landing page. And that’s it. No pricey multimedia creative, or really any image-based assets are necessary. Indeed, for all but the earliest stage companies, these items are already in place.
The Future is Bright
From a certain vantage point, podcast advertising is, in fact, a “bright and shiny object.” Most prognosticators agree that both the volume of podcast listeners and their level of engagement will grow meaningfully over the next few years. However, while daunting and even prohibitive to some, the idea of getting in to a new channel as an early adopter is enticing to many brands.
The Duopoly Aren’t Dictating Terms
While it might seem trite, many brands are experiencing Google and Facebook fatigue. Though few can remove the duopoly from their media mix altogether anytime soon, the prospect of engaging with new and friendly outlets is enticing.
Be On The Lookout For Speedbumps, Not Obstacles
As with any new tactic, there are of course issues being worked out in the podcasting category. These include lack of widespread familiarity – necessitating executive education – a shortage of case studies, and the reality that most successful podcasting efforts to date have been part of a multichannel campaign. Also, in comparison to other online channels, the turnaround time on investments is typically longer, in part because podcast advertising is often used for general brand building. But the cost-benefit equation works in enough situations for the tactic to be considered in earnest by most advertisers, if not necessarily for every type of campaign.
A New Instrument, A New Tune
One explanation for the slow adoption of podcast advertising is that it has been historically lumped into the broad “offline” advertising category, which of course has been out of vogue for the past decade or more. And while podcasting doesn’t offer many of the bells and whistles we traditionally associate with digital advertising – like immediate response, easily identifiable last touch attribution, and aggressive acquisition – it’s unquestionably gaining momentum among advertisers. Its evolution in the coming years will almost certainly be unlike other online tactics that preceded it, which were pursued in stampede-like fashion, but it’s an interesting emerging tool in the digital advertiser’s toolkit, and worthy of a close look by most brands.
About the Author
Tim Bourgeois (@ChiefDigOfficer) is a principal at East Coast Catalyst, a Boston-based advertising audit company.
Here are some of the best media stories our team has read so far this week:
- MIT Technology Review | Zuckerberg’s new privacy essay shows why Facebook needs to be broken up (7 min read)
- MediaPost | Brands Lose Up To An Estimated $50 Billion Annually From Ad Fraud (2 min read)
- Wired | A Second Life for the ‘Do Not Track’ Setting—With Teeth (5 min read)
- TechCrunch | Privacy complaints received by tech giants’ favorite EU watchdog up more than 2x since GDPR (17 min read)
- Yahoo Finance | Why Facebook, Google, and Twitter don’t want to be media companies (6 min read)
- The Financial Times | Silicon Valley lobbies hard to kill off California privacy rules (3 min read)
- Adweek | A Look Inside the 2019 Ad-Tech Outlook (4 min read)
- Redef | Big Media Isn’t Ready to Fight Back (Netflix Misunderstandings, Pt. 5) (22 min read)
- AdExchanger | Without A Real Programmatic Direct Plan, Publishers Face PMP Pain (4 min read)
- Recode | Can the media business be saved? A “Spotify for news” is not the answer, says News Media Alliance CEO David Chavern. (47 min listen)
It’s safe to say that brand safety has been one of the most pressing issues in marketing over the last two years. Advertisers have been made all too aware of the perils of digital media and what can happen if an ad runs alongside harmful content. Often, marketers may not even aware of where an ad will run, thanks to programmatic. So, they can be caught off guard when the issue spreads on social media.
The most recent brand safety concern happened in February when a YouTube user posted a video that highlights patterns of comments by pedophiles on otherwise innocuous videos. These people made comments that sexualized the kids in the videos. In other instances, these commenters shared links to child pornography.
Soon after, several advertisers including Nestle, Disney, AT&T, and Epic Games all pulled their advertising from YouTube. YouTube responded by disabling comments on most videos that include children under 13, as well as on some videos featuring older minors. It had also been reaching out to agencies and brands, reassuring them that YouTube is still a safe platform for their ads.
Brands and Boycotts
Many people feel that when brands boycott a platform, it’s just grandstanding PR. And really, boycotts haven’t materially affected YouTube’s financial performance. But these days, advertisers are generally concerned by the responses from platforms like YouTube and Facebook, with one digital ad executive recently telling Ad Age that YouTube’s promises “ring hollow, however, given this latest flare up is just one of many brand safety failures in the past two years.” They just keep happening, and so the cycle of brand boycott, only to inevitably return to the platform, continues.
Ad Age noted that YouTube offered flimsy solutions for advertisers. “YouTube has offered half-measures for brands, the executive says. For instance, YouTube is telling some brands to categorize ads as ‘alcohol’ (even if the company is not an alcohol brand), that way it tricks the automated ad system into avoiding videos with themes that appeal to children and families.”
Do Advertisers Really Care?
However, some observers think these brand safety issues have been overblown. It has been suggested that some advertisers are much more worried about consumer backlash over brand-safety incidents than they are about the incidents themselves. In the grand scheme, there are relatively few flare ups when considered in the context of how many ads are served, says media analyst and consultant Thomas Baekdal.
“What brands are worried about is to be called out about something – often outside of their control – and to face some type of backlash. Because of it… they are worried about what people might say or do on social channels,” he says. “They are also worried about activists, who in recent years have grown far more aggressive. And again, with the help of both the press and social media, they have managed to have a far bigger impact using very few resources.”
That may be true. But any time a major advertiser like AT&T, which spends a total of billions in advertising annually, pulls its advertising from one of the world’s largest platforms, reporters do need to cover it – regardless of whether or not it’s a cynical PR move on the brand’s part. (You could argue that the business press should stop covering PR stunts like this altogether, but that’s an entirely different conversation.)
All or Nothing
Baekdal also questions the move to ban comments, arguing that in some cases, comments are integral to a platform’s existence, or a content creator’s success. “One of the things we have to remember is that YouTube is fundamentally a two-way channel. It’s a platform where you are communicating rather than simply publishing. So, taking away comments entirely is a pretty drastic step that, for some channels, could destroy them,” he says. “If you have a YouTube channel where the discussion and the community are what defines the focus, removing comments would kill that channel. More to the point, it punishes the wrong people.” In fact, if some of the comments are inappropriate, disabling all comments penalizes the video’s poster.
Shelly Palmer recently wrote a column for Ad Age that’s worth reading in full. He argues that we should stop looking at YouTube to ever be totally brand safe. Palmer posits that there is no possible way to make YouTube, or any environment that relies so heavily on user-generated content (UGC), 100 percent brand safe. “Asking ‘Is YouTube safe for my brand?’ is a better question, and it is the proper lens for any serious marketing discussion.”
The Quality Question
For publishers, there’s a potential upside to all this uproar. Just after the most recent YouTube incident, Digiday noted that agencies began looking to directly buy from premium publishers on YouTube, potentially providing a revenue boost.
And let’s not forget brand safety is not a one-dimensional issue. And, for many advertisers, it isn’t limited to these noisy consumer outcries and PR flare ups. At the Digiday Media Buying Summit in November, GroupM’s Joe Barone defined it in a number of ways, including viewability and concern over bot traffic. Less flashy, but still important.
“We’ve also begun to talk about is the idea of quality. If we can get a quality environment, quality inventory from quality publishers, that are seen by real people in appropriate contextual environments, those ads sell better. Brand safety is linked directly to inventory quality and client results. Clients have become very educated on this process. They ask the same questions. They start with questions like ‘you mean to tell me my ads aren’t being seen?’ or ‘bots are clicking on my ads?’”
About the Author
Maureen Morrison is a marketing consultant working with agencies, startups, publishers and brands. She previously was a reporter and editor, having spent nearly 12 years at Ad Age covering agencies, digital media and marketers.
Publishers are reclaiming their voice when it comes to how and when they are reaching their most important readers. As the market continues to feel pressure from ever-changing trends of the duopoly, publishers are putting more effort into direct relationships with their audiences and leveraging actionable intelligence from data. This means much more than ad targeting today. Data allows publishers to better serve their readers and, as a result, better profit from true engagement.
A study by the American Press Institute surveyed over 4,000 consumers of news and found that 78% respondents value getting reliable, accurate facts. An audience survey conducted by The New York Times, found that 73% polled believe “that it has never been more important to support quality journalism.” As consumers are willing to pay for quality journalism, publishers are looking to leverage these trends to deliver their best content and form meaningful reader relationships that will sustain the media business.
Although the vast majority of readers don’t subscribe, those that do are the that do are the most impactful. They spend longer on site and drive greater revenue. Of course, it is important to remember that there is no one-size-fits-all for subscriptions. Solutions will be different for every publisher and publishers must adapt to audience behaviors quickly, as they change often.
Flexible paths to subscription
For example, some audiences respond well to metered paywalls. Among digital subscribers, it was found in the same study by the American Press Institute that 47% of respondents became a subscriber after they reached a limit on free access. Other audiences engage after enjoying a newsletter. Deciding on what content to show and when to show it is something that needs to be finessed in order to satisfy audiences (and hopefully entice them to subscribe).
Yet, even as subscriptions become a focal point, advertising revenue still accounts for the majority of publisher revenue, despite per-ad revenue declining. At the same time, readers are getting savvy about how they choose to consume content, bouncing quickly from pages when they are blanketed with disruptive ads. Publishers that deliver a clean website experience are more likely to build long-term relationships with readers.
Engagement is key. But getting there is not easy. One route is personalization. In fact, publishers who successfully drive subscriptions share a common theme in understanding the importance of integrating both analytical and editorial teams to provide deeper reader personalization in this digital era. This can mean content personalization, but it can also take the form of personalizing subscription offers based upon customer behavior and preference.
Data driven success
Hearst Newspapers has integrated various initiatives where their growth is fueled by data. The publisher’s goal was to evolve its digital properties into a portfolio of diversified subscription and ad-supported sites. Through the use of AI, Hearst analyzed over two years of subscriber data and can now identify what users are going to convert and where, as well as analyze pre- and post-subscription patterns.
Editorial teams at The New York Times use content analytics platforms to understand readership in real-time. They also centralize the data for actionable intelligence that helps them better serve their audience. (We’ve seen customers who take this kind of approach increase conversions up to 200%.)
Data enhances the reader experience and makes valuable connection for publishers by allowing editors adjust content strategies based on where audiences come from and how they convert.
By being data informed, publishers can better understand reader engagement as well as how that readership consumes their content and what helps convert them from casual readers to seriously committed, and even to become subscribers.
As the programmatic revolution reaches its potential, bad actors continue to find innovative ways to exploit the system. The technological advances to increase advertising efficiency are the same ones targeted by bad actors who are incentivized to move at a faster pace in order to keep their revenue streams flowing. The result is an endless scourge of malware and auto redirects that threaten the viability of the overall digital advertising supply chain and the relationship the industry has with the end consumer.
Programmatic provides a green field to bad actors, who consistently evolve their attacks, bypassing defenses and attacking publishers and their digital customers. Once thought the answer to publisher woes, malware blockers have proven to be a short-term fix. Unfortunately, malware incidents have almost doubled since the solution’s relatively recent introduction. Clearly, something has to change. That’s why smart publishers are calling in the experts and forming a joint task force between their Ad Ops and the IT/security teams to combat the problem together.
Bad ads aren’t your only problem
Digital ads are not the only security issue that publishers need to watch. Digital publisher businesses have diversified their revenue streams, evolving from advertising-only models to introduce subscription services and merchandise stores such as the ones hosted by most major news outlets, like The New York Times, NBC, and the The Washington Post. These new revenue channels introduce a new significant security risk for publishers due to the storing of personal data and credit card information.
Publishers are an even more tantalizing target for cybercrime groups, especially those behind large-scale malicious campaigns like Magecart, ShapeShifter-3PC, and ICEPick-3PC. Cybercriminals increasingly use the digital ad supply chain targeting payment pages to steal personal data and payment card information. Publishers trust that the payment processing vendor provides perfect security. However, time and again, these vendors are compromised, either through a direct hack, employee error, outdated code or misapplied patches. Even worse, when a breach happens, the customer will hold the publisher accountable. Headline grabbing news regarding major breaches in the past year focus on the brand, not the vendor. That makes sense since the brand has the relationship with the consumer.
Cybercrime groups zero in on vulnerabilities in third-party code in the digital environment to execute their attacks. Digital ads serve as delivery vehicles for third-party code. Publishers also rely on third-party code to optimize and monetize the user experience. Beyond ad-related platforms, the use of analytics, content delivery systems, video platforms, and widgets carry the risk of being compromised, exposing the website and its users to harm. One recent example is the havoc wreaked by the JuiceChecker malware, which utilized vulnerabilities in third-party code to enable smart malware delivery, which evaded multiple detection efforts including malware blockers.
These complicated scenarios leave publishers with difficult choices. While using ads and other types of third-party code help to generate more revenue, they also expose them customer base to more vulnerable code, ready to be exploited by cybercriminals who know how to find and exploit weaknesses. Exposing customers to these threats have long-term consequences. Failure to strike an appropriate balance between revenue and security kills the user experience and creates situations where customers don’t return.
Clearly, a modified approach is necessary if the balance is to be struck correctly. This approach involves bringing product and IT/security teams into the ad/revenue operations fold. An interdepartmental culture is already being fostered by many publishers in order to stay on the right side of legislation such as the EU’s GDPR and California’s upcoming Consumer Privacy Protection Act.
The need for digital security expertise
Moving forward, advertising and revenue operations must work with both product and IT/security teams to review publishers’ existing vendor relationships and strategize how to drive revenue without sacrificing security. Internal security teams are experts in the latest threats and can help develop a comprehensive plan to protect the digital environment and deliver a better user experience.
The ability to successfully generate revenue through multiple revenue streams is important. It is up to the revenue teams to engage with the security experts within your organization to make sure the Internet remains a safe place for advertisers, businesses, and users alike.
About the Author
Steve Stup is responsible for developing and overseeing the revenue and product strategy at The Media Trust. Previously, he ran digital strategy as the General Manager at The Washington Post. In this capacity, he was pivotal in the publication’s digital transformation effort and served on the leadership team that helped position it as one of the most innovative digital publishers in the industry. He led teams responsible for driving product strategy, ad innovation, and revenue operations. Prior to that, he was in technology sales at Lexis Nexis, and other recognized brands. He received his MBA from The George Washington University and is an alum of Virginia Tech.