Why Digital Native D2C Brands are Turning to TV

We’ve seen an explosion in the number of upstart direct to consumer brands – companies which build their audiences online and sell to their customers directly – over the past few years. When it comes to marketing, many of these disruptors have tended to use social platforms and podcast sponsorship to build direct relationships, and social video to communicate exactly what their product is and how it works.

While these digital natives eat up market share in established industries, it might initially look like bad news for TV advertising. However, the reality is that as these brands mature, many of them start to behave like “traditional” FMCG marketers and turn to TV advertising to help them scale further.

A report earlier this year from the Video Advertising Bureau (VAB) highlighted this growing investment in TV advertising by what they call “direct disruptors”. VAB analysis of Nielsen Ad Intel data found that TV spend by the fifty D2C brands it analysed grew from $322.8 million in 2015 to $1,313.6 million last year.

So what’s driving these brands to TV?

Advanced TV specialist Simulmedia has worked with several of these brands as they’ve branched out into TV, and CEO Dave Morgan says it’s a matter of scale and brand building.

“Everyone would expect that these digital first direct to consumer brands would build their full businesses on digital, but what happens in many cases is they perfect their product and customer segmentations online, but then they find they can’t really scale any further using digital only,” he said. This hasled them to turn to TV.

Julian Hearn, co-founder of meal replacement powder maker Huel, who raised an additional $26 million last week, agreed that TV’s huge reach made it an attractive medium to his company, which just this week launched its first TV campaign. “I’m not a fan of offline advertising,” he said. “It’s extremely hard to track performance and therefore difficult to optimise. However, TV is interesting, it has massive scale, and it’s an engaging medium.”

“Mattress in a box” company Casper meanwhile ran TV ads from the very beginning, again because it provided reach quickly and efficiently. “We decided to start running TV ads from day one as TV is THE mass media that provides a very large reach in a limited amount of time,” said Quentin Luce, who handles Casper’s European TV advertising. “TV is also, surprisingly enough for most advertiser, a very cheap medium when bought efficiently, which allows us to maximise repetition and therefore increase brand recognition.”

As these digital natives move onto TV, Morgan says they are more focussed on bottom of the funnel metrics than traditional TV advertisers. “None of them say I’ve bought my gross rating point so I’ve got my brand, I’m good,” he said. “They want to know exactly who they’ve reached. In every conversation we’ve had with these companies at Simulmedia, they have involved data scientists or people with deep knowledge of data analytics as part of the conversation.”

Luce agreed that while Casper looks to TV advertising for brand building, they also want to see direct results. “While at first our ultimate aim is of course to drive direct sales in order to cover the cost of a TV campaign, the halo effect of any campaign has a long lasting effect and definitely builds the brand,” he said.

The VAB’s data suggests this approach works very well. Its analysis found that emerging D2C brands (brands founded within the last five years) tended to see their revenues take off after launching a TV campaign or increasing investment. It also claimed that TV is very effective at driving greater audience engagement online – it found that as emerging brands increased online spend by an average of 93 percent, they saw 312 percent growth in search queries, 206 percent growth in social actions, and 177 percent growth in online video views.

“We directly see from day one a TV effect on website visits, and sales coming from those direct visit usually happen quite fast afterwards,” said Luce.

Good News for TV?

This all sounds like good news for broadcasters, with new money flowing into linear TV. “I think that it is not unrealistic to expect that between five and ten percent of US TV advertising revenue in three or four years, certainly within five, will be coming from these direct to consumer brands,” said Dave Morgan.

He cautioned, however, that this won’t necessarily increase TV ad spend overall. “The big question is, does the Casper mattress dollar take away the Tempur-Pedic incumbent money, is it a net positive for TV? And as things stand, that’s far from certain,” said Morgan.

It should however alleviate broadcasters concerns that the rise of DTC brands will be bad news for TV advertising. So even if TV’s traditional big FMCG spenders see a decline, it appears there will be new advertisers ready to replace them.

But the industry needs to be set up to accommodate these upstart brands. “Very few of them use traditional ad and media agencies, and very few large TV companies have sales teams dedicated to selling to them,” said Morgan.

read more here: videoadnews.com

‘Advertising Is Dead,’ And Other Thoughts From Faith Popcorn

Forecasting the future of marketing and predicting trends is always risky, but Faith Popcorn is pretty good at it. No less a source than The New York Times has called her “The Trend Oracle,” while Fortune named her “The Nostradamus of Marketing.” Popcorn is not only a futurist, but also an author and the founder and CEO of marketing consulting firm Faith Popcorn’s BrainReserve.

What distinguishes her is her practice of “Applied Futurism,” which translates her cultural trend insights into actionable business strategies to help her clients reposition established brands and develop new and innovative business models, products, and services. She has advised national advertisers including American Express, Avon, Bayer, Campbell’s Soup, Citigroup, Pfizer, Johnson & Johnson, Kellogg, KFC, Mars, SC Johnson, Tylenol, and The United States Postal Service.

Popcorn, who is scheduled to speak at the annual Association of National Advertisers’ Brand Activation Conference in Chicago April 16-18, offers her views on upcoming trends and what to look for in the midterm elections in November.

Q. What is the single biggest emerging trend that you see impacting marketers in the near future?

A. Without a doubt, it’s the End of Old-School Masculinity and the Death of Gender. Not only are we at a moment where women and men are moving to a new relationship, we are at a time when men and women are no longer the only game in town; younger generations, millennials and Gen Z, in particular, are increasingly gender-fluid — 20% — and evolving toward one gender. How we market and message is about to be revolutionized.

Q.What kind of impact do you think the #MeToo and #TimesUp movements and the overall gender-equality issue will have on marketers?

A. It’s having a huge impact. Think of the #grabthembythewallet movement that rocked many brands and businesses around the election; the consumer said, “I won’t patronize you if you support brands I don’t believe in.” Now, it’s coming closer to home. The consumer will say, “I won’t patronize you if you don’t elevate the causes I believe in.” Brands need to show that, internally, they are addressing sexual misconduct and gender inequality. They need to visibly support women.

Q. The midterm elections will be held in November of this year. What do you think will happen?

A. As a futurist, I hope people will vote and embrace their role in shaping tomorrow. And in light of this terrible year, may our lawmakers make gun control priority Number One. We all need compassion and healing and hope. I can’t stress this enough: In the marketplace and in the culture, values are the new value.

Q.How can marketers spot key trends and incorporate them in their overall marketing strategy?

A. Look for the signals of tomorrow — step out of your comfort zone, delve into pockets of the culture you usually avoid. We call it TrendTrekking. Then you connect the dots. Go to underground bars and clubs and offbeat cafes; see what people are eating and saying. Go sound-bathing. Try cryotherapy. And ask yourself, what need is this answering, and how can my business address that need?

read more here: mediapost.com

AT&T still won’t advertise on Youtube

The effects of YouTube’s “adpocalypse” continue to reverberate even after the video platform has changed its practices to help ensure that marketers’ ads will no longer run alongside problematic content. AT&T, which pulled its YouTube ads along with many other brands back in March 2017, has yet to return to the video platform.

According to the New York Times, AT&T’s chief brand officer, Fiona Carter, said that “too much of the content our advertising could appear against was not brand safe — it was objectionable by any measure.” She added that “nothing beats human review” when it comes to determining a video’s brand safety, suggesting that YouTube’s algorithms and filters fall short.

YouTube has already promised that humans would manually review all videos made by creators in the Google Preferred tier, the top five percent of creators in terms of engagement and viewership. “We expect to complete manual reviews of Google Preferred channels and videos by mid-February in the U.S. and by the end of March in all other markets where Google Preferred is offered,” wrote YouTube in a January blog post. The blog post also noted more rigid requirements for channels seeking ad money. Before, a channel just needed 10,000 total views to make it into the Partner Program. Now, it will need at least 1,000 subscribers and 4,000 hours of watch time in the past year to become eligible for advertising revenue.

Still, AT&T isn’t convinced. In fact, the telecommunications company is working on its own alternative to advertising in brand unsafe places like YouTube and Facebook.

In a pitch focused on brand safety, AT&T is touting its own private marketplace for advertising across its OTT properties, DirecTV and DirecTV Now. According to Digiday, which obtained AT&T’s pitch deck, the company’s advertising and analytics CEO Brian Lesser explained how YouTube and Facebook fail to offer a “quality environment” for advertisers and presented AT&T’s new offering as a digital video advertising alternative to brands who care about the entertainment content with which they’re associated.

AT&T’s pitch cites the limited competition in the OTT space (which includes Hulu, YouTube, Sling, and Netflix) and mentions a more tailored, individualized approach to helping agencies place their OTT advertisements.

Meanwhile, brand safety remains as big a concern as ever on YouTube. Between one Logan Paul mishap after another and a whole slew of dubious children’s content, the video platform’s content hasn’t been the most reassuring for brands who decided to pull advertising along with AT&T back in March. That being said, many other brands have put their advertising back on the platform, but with extra cautionary measures in place. JP Morgan Chase, for instance, advertises on YouTube with the help of an internal plugin that the finance giant created itself to ensure its ads are appearing on channels that aren’t home to objectionable content.

read more here: www.tubefilter.com

IAB whitepaper explores use of blockchain for video advertising

The Interactive Advertising Bureau (IAB) today released “Blockchain for Video Advertising: A Market Snapshot of Publisher & Buyer Use Cases,” an in-depth whitepaper that uncovers strong use cases for blockchain technology in digital video advertising, with a focus on over-the-top (OTT) advertising. The paper acknowledges that blockchain has captured the public’s attention through the skyrocketing growth of cryptocurrency, but also illustrates that the technology is a natural fit for the digital advertising supply chain—potentially enabling increased efficiencies and a more trustworthy supply chain, as well as reducing cost and fraud for publishers and buyers.

The report outlines the foundational structure of blockchain technology, including terminology and then deep dives into blockchain use cases in digital advertising, exploring applications such as FreeWheel’s initiative BlockGraph™, XCHNG from Kochava, Ads.txt Plus from MetaX, and NYIAX (New York Interactive Advertising Exchange). After laying that groundwork, the report spotlights blockchain use cases and proofs of concept for video and OTT advertising, investigating new platforms using the technology, including MadHive’s MAD Network.

Alongside these real world blockchain case studies and insights from executives at the center of these cutting-edge deployments, the report identifies the key advantages of using blockchain for digital video/OTT inventory:

– Low queries per second (QPS) compared to digital display advertising
– High value, premium asset class with well-established standards and transactional processes
– Fewer suppliers, most of whom are known to each other
– Market is still nascent so players are motivated to innovate
– Suppliers have lived through the first phase of automation (programmatic) and are more willing to be transparent, and more wary of intermediation
– Lots of content delivery networks (CDN) are involved in the supply chain, and the CDNs are already peer-to-peer
The paper also cites some challenges to overcome:

OTT inventory is already in high demand with sellers—who, as a result, may be less open to experimenting with new business models and processes

OTT digital video is already a high margin buy, so the inefficiency of multiple intermediaries is less obvious
Typically OTT has a complex set of endpoints, or clients, to serve the advertising to
Shared taxonomies, definitions and standards will be needed to enable “smart contracts” of the future, with flexibility to fix current problems and bring incremental improvements

Nonetheless, the potential benefits for publishers and advertisers far outweigh the hurdles and calls for IAB and IAB Tech Lab members across the ecosystem to join the organizations’ business or technical working groups examining the future of blockchain, to bridge gaps and meet challenges head on.

“Blockchain seems to be the new ‘siren’s call’ in the business world—but there is no doubt that this technology holds tremendous promise for digital video advertising,” said Anna Bager, Executive Vice President, Industry Initiatives, IAB. “This paper is a first of what we anticipate will be many reports from IAB exploring the future of blockchain in digital video. Tapping into our members’ pioneering work and insights from across the ecosystem, we plan to offer thought leadership, guidance, and inspiration that will steer the new course for digital video, OTT, and blockchain.”

read more here: www.digitaltvnews.net

YouTube’s Is In the Living Room and Advertisers Want in

There’s a great migration happening among the citizens of YouTube, and it’s not in the direction one might assume.

Although most digital content producers, including YouTube, are fixated on mobile phones and producing short-form shows for audiences on the go, YouTube viewers are increasingly firing up the TV set.
“Our fastest-growing area is the big screen, the TV,” said Sarah Ali, head of living room products.
In 2016, viewership on TV screens grew 90% compared to 2015, according to YouTube. And in 2017, viewership on TV screens is set to rise another 90%, the company said. It would not release the number of people viewing on TV screens.

With televisions now internet-connected, app-enabled and smart-speaker assisted, it’s easier to stream over-the-top — also referred to as OTT or streaming-video — to the larger screen, which is likely why an increasing number of YouTube’s 1.5 billion viewers are channel surving like the “old” days of TV.

YouTube is undergoing a transition that touches on more than where people view. The brand safety revolt this year prompted the company to hold creators, some with big followings, to higher standards. The full impact of that is yet to even play out. The move to the living room, however, could ultimately prove helpful by giving more prominence to professional content and de-emphasizing reliance on the “creator class.”

To be sure, YouTube is not the only beneficiary of this migration. Companies like Roku are attracting more consumers. Apple TV and non-traditional players like Facebook and Twitter are building TV apps to offer their brand of internet videos on demand.

Here’s a broader view of the landscape. 50% more advertisers.

The living room is recognized as a more lucrative territory to hook consumers. A YouTube viewer spends 30% more time watching NBC’s content when it’s on TV versus mobile or a laptop, said Mark Marshall, exec VP-entertainment advertising sales group at NBCUniversal. YouTube, in general, is a growing platform for NBC, with a 30% increase in minutes watched across all screens, Marshall said. But NBC’s YouTube clips on TV are growing faster—minutes watched were up 65% year-over-year.

That’s still fewer minutes than mobile and laptop, but changing viewer habits are clearly presenting new opportunities for digital advertisers to place commercials that resemble the ad breaks of TV’s heyday. “In the upfront this year, we will have 50% more advertisers buying YouTube than last year,” Marshall said.

Advertisers have been chastened—even a bit shell-shocked—by the mobile revolution, and the digital domination of Facebook and Google. Mobile, for instance, still accounts for 60% of all YouTube viewing, according to Marshall.

Mobile has grown so unforgiving to brands that Facebook and Google developed six-second video spots, so advertisers get used to snappy messaging.

The OTT market is offering an alternative to that mobile mindset, and media players like Hulu are luring brands with 15-second and 30-second commercial interruptions. YouTube is phasing out the 30-second spot, but advertisers still get 15 seconds, which shows advertisers just how much time they can expect to get in front of consumers, which is not much.

Roku, with 23.1% of the U.S. connected-TV device market, is the leader in OTT boxes, which are hubs for apps like YouTube, Hulu, Amazon Prime and traditional broadcasters trying to reach an audience that no longer buys cable packages. Google Chromecast and Amazon Fire TV sticks are No.2 and No. 3 among streaming devices, according to eMarketer, and 170 million people in the U.S. plug into connected TVs.

Over-the-top boxes and connected TVs account for 32% of ads that run alongside what’s considered premium digital content—shows and movies with respectable production values, according to Freewheel, a video ad-tech platform. Four years ago, connected TV devices accounted for only 2% of such ads, it said,
“We’ve been very public about how much audience has shifted back to the large screen,” said Scott Rosenberg, Roku’s svp of advertising. “In this new world, there are thousands of apps and channels, and getting consumers to tune into your show, it becomes an interesting and a hard problem.”

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All You Need To Know About In-App Advertising

Smartphones and other connected devices are not only totally ubiquitous, but they are now easily the most used accessory (even more than watches and jewelry) for both men and women. And while there is enough talk about gadget detox, let’s face it – these devices have changed our lives forever and become our office and our assistant at the same time – besides, of course, being our entertainment device, our wallet, our fitness coach among others. And yes, they are the primary communications device that we now use.

In this smart phone era, businesses have built a fortune – trying to solve our problems, make our lives easier, entertaining us and making us smarter – all by creating these wonderful apps. The business models vary for all these developers and publishers – ranging from pure brand engagements based apps, paid apps (one time and subscription), in-app purchases and ad-supported apps. With hundreds of millions of Indians getting into the connected world via these app ecosystems on their affordable android smart phones, the advertising based model (i.e. based on in-application advertising) represents the largest opportunity in the Indian market for the next few years at least. Whether its messaging, ticketing, entertainment and gaming or shopping, in-application advertising is being integrated with these applications as consumers spend more and more of their time on their favorite accessory. All stats and data points put the In-app advertising market at well over 80% of total mobile advertising ad-spend and it’s the only thing that brands, advertisers and agencies are chasing today.

Traditionally mobile game apps have used in-app advertising very effectively. Providing basic features for free (read ad-supported) and then allowing users the option of in-app purchases for premium content has worked well in the aforementioned spaces. Free usage allows a large adoption, gets users hooked on products and the usual value exchange is the data (information) that the user passes to the publisher – basis which such user is targeted for relevant ads. Google (via Youtube & other products) & Facebook (and more recently Instagram) have built huge revenue models on this business model.

VOD Players eyeing a slice of the pie

1. The 4 pre-requisites to a successful in-app advertising model are

2. Large number of users (daily and monthly)

3. User data & info – that enables targeting

4. Very high engagement and time spent

And as a top-up – Exclusive IP or unique engagement model that allows brands to connect with the user base in a deeper way

The sceptics will say that the market is dominated by the top 2 global internet giants as of now and they have the benefit of the enormous data / information they have at their behest. That is true. But something changed a few months ago – with the launch of JIO and the changes that played out post that – India jumped from being 150th in broadband penetration (in early 2016) to no 1 mobile data user in the world!!! As per Industry reports, the monthly mobile data consumption on Jio’s network was 1 billion GB which is 1.5X of China or the same as US. And in the next two years it is expected to double to become 1.5X China and US put together as per some estimates and reports. And then there are the other telcos too, who will control the balance market.

The number one beneficiary (from this explosion) is going to be the Online Video business – which is expected to account for 50-60% share of this online data usage. And we are not even talking about fixed line high speed broadband in your houses, which will power your set top boxes, wifi routers and smart TVs. That’s another top up on this already humongous opportunity. And that is the reason why you see the explosion of the number of online video destinations in the last 12 months.

Now, the above will lead to growth in all kinds of video monetization – subscription, transaction, but most of all it will be advertising. And when it comes to Video – and engaging video that allows users to consume large volumes of content on their devices – the key is great content. And that is where the party is just beginning for content creators and premium IP owners.

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£5.27 Billion Invested in U.K. TV Advertising in 2016

Television ad revenue in the U.K. totaled £5.27 billion ($6.6 billion) in 2016, with online businesses now the biggest spenders on TV, according to full-year revenue figures provided to Thinkbox by the British commercial broadcasters.

According to Nielsen, among the biggest spending online businesses on TV were Amazon (£34.3 million, up 39 percent), Comparethemarket.com owner BGL Group (£38.8 million, down 4 percent) and Moneysupermarket (£25.9 million, up 6 percent).

Together, new or returning advertisers accounted for 1.6 percent of total TV ad revenue in 2016, according to Nielsen. WARC estimates for the Advertising Association indicate that the total U.K. advertising market grew to £21.1 billion in 2016 (up 4.4 percent), with TV advertising representing 25.3 percent of it. The AA/WARC forecast that in 2017 the U.K. ad market will reach £21.8 billion (up 3.2 percent), with TV forecast to increase by 1.6 percent.

Despite some recent inflation in TV advertising prices—due in part to increased advertiser demand and some decline in TV set viewing—in 2016 TV advertising was 28 percent cheaper in real terms than ten years ago.

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