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  • Your Audience is Moving to Connected TV

    More people are consuming video content through digital channels than ever before. With a boom in viewership, brand dollars have had no choice than to shift their focus and ad spend from TV to digital. The biggest growth has been the shift of audiences from TV/Cable to Connected TV.

    Direct Response Advertisers

    This shift isn’t just about where attention is moving. Brands and direct response advertisers now have a chance to get much greater value through rich intent signals, precise demographic profiling, quality content, and individualized messaging control, all delivered in real time.

    Direct Response advertisers and brands that have traditionally relied on broadcast TV for their commercials are realizing that the movement of traditional cable users (cord cutters) to connected TV is happening at rapid speeds.

    Cable Costs Increasing

    With the increasing costs of cable providers, 2018 is projected to be one of the fastest growth times yet.

    US Connected TV Users & Penetration – Source

    What is Connected TV?

    Connected TV (CTV) refers to any smart TV that can be connected to the internet and access content beyond what is available via the normal offering from a cable provider. CTV also includes “Over the Top” (OTT) devices (Apple TV, Roku, Amazon Fire) that use a television as a display and can connect to the internet to access content.

    By the end of 2020 there are forecasted to be 260 million installed devices attached to the internet and able to deliver apps to TVs, according to the latest NPD Connected Intelligence forecast.

    This represents 31% growth in TV-connected devices over the forecast period, led by smart TVs and streaming media players. In fact, smart TVs will drive nearly half (48%) of installed internet-connected TV device growth through 2020, while streaming media players will contribute 31 percent of ownership growth.

    CTV/OTT can largely be broken down into three different revenue models:

    SVOD (subscription video on demand – such as Netflix, HBO Now, Amazon and Hulu);

    TVOD (transactional video on demand – such as iTunes, Vimeo On Demand and Amazon Instant Video that allow users to pay for individual pieces of content)

    AVOD (ad supported video on demand such as Crackle, Popcornflix, Pluto.TV etc.)

    By 2021, the number of cord-cutters will nearly equal the number of people who have never had pay TV — a total of 81 million U.S. adults. That means around 30% of American adults won’t have traditional pay TV at that point.

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  • UM’s Investment Chief Outlines Three Key Issues Plaguing OTT Planning

    UM’s Investment Chief Outlines Three Key Issues Plaguing OTT Planning
    by Kelly Liyakasa

    In the words of Jon Stimmel, the chief investment officer for UM Worldwide, planning an over-the-top (OOT) ad campaign is “a Frankenstein of different methodologies mixed together.”

    He added, while speaking last week at the Videonuze Shift summit in New York, that buyers need more automation in the OTT planning process: “We are recreating the process every time for individual clients.”

    Two years ago, UM began planning and evaluating its mobile, digital video and OTT investments in a converged fashion.

    Although every video deal UM does today is “fully integrated,” Stimmel said there’s work to be done to automate cross-screen video buys – and better manage inventory fragmentation across video providers.

    Here are some of the key issues complicating OTT planning:

    Cross-Platform Audience Measurement

    While Nielsen has made advancements in measuring total audience, including in ad-free environments, every streaming video device and platform measures audience differently.

    As virtual MVPDs like Hulu Live, DirecTV Now and Sling TV increasingly steal more viewership from traditional cable providers, buyers need more of a standardized view across these emerging OTT environments.

    “Nielsen is testing capabilities like ACR through the audience business they bought [with Gracenote], and organizations like CIMM are doing a lot of great work … to quantify what’s viewed where,” Stimmel said, “but unifying that across marketers, agencies and trade groups is important.”

    Inventory Discovery

    Agencies want to buy across video environments like OTT and video-on-demand within a single plan, and that’s still complicated because of the sheer number of devices and streaming services.

    “In addition to TV content that’s going unmeasured, the ability to search for content within a device or app is hard to do,” Stimmel said. “Consumers today just want to watch the show they like. It doesn’t always matter on what channel, or whether it’s live or on demand. We need to be able to curate content within different environments.”

    The good news is that numerous technology acquisitions are helping pave the way for better TV discovery, including Nielsen’s acquisition of Gracenote and Spotify’s acquisition of MightyTV.

    Scaled Data

    A holy grail for advertisers is buying de-duplicated audiences across multiple OTT apps and MVPD services (such as Comcast’s Xfinity TV Go service) and driving incremental reach.

    Yet, one of the biggest challenges with the OTT environment is its lack of scale, caused in part by the many miniature walled gardens emerging in the OTT ecosystem.

    To get around the blind spots when measuring OTT, UM taps data aggregators, such as Samba TV, which its parent company IPG invested in, to help fill in the gaps using IP-based or device-level data.

    It also relies on partnerships with platforms like Roku, which its sister investment arm Magna did, to verify audience across publishers by matching first-party segments against Roku’s own audience data.

    Other providers, such as One2one Media, aggregate and unify disparate MVPD data to help match with advertisers’ first-party records.

    Although individual OTT publishers (like Hulu or SlingTV) provide detailed metrics about campaign performance, Stimmel said the goal is to get to a place where it’s working with fewer providers who have much larger scale across screens.

    “You don’t want to do deals with 50 people,” Stimmel said.

  • Blis Releases Location-Based Analytics Tool That Shows How People Interact With Their Environments

    Blis Releases Location-Based Analytics Tool That Shows How People Interact With Their Environments

    by Allison Schiff

    Unlikely insights into consumer behavior can help move the needle, and location data is a rich source of unlikely insights.

    On Tuesday, UK-based location data company Blis released an analytics tool in beta called Smart Trends that blends point-of-interest (POI) data and offline movement data to draw conclusions about how people interact with physical locations – and the results don’t always align with conventional wisdom.

    For example, as counterintuitive as it sounds, opening a new store close to a competitor could be good for business, said Alex Wright, head of insights at Blis, which used Smart Trends to compare the online and offline shopping behavior of consumers across a handful of well-known brands in large cities across the world, including Berlin, Dubai, London, New York, Singapore and Sydney.

    A brand like H&M, which Blis found enjoys high foot-traffic volumes in almost every city the company tested, benefits from placing stores near larger “destination” retailers because of “the inevitable crossover foot traffic that occurs between retailers in the same sector,” Wright said.

    Blis derives these insights by collecting time-stamped location data attached to anonymized device IDs from verified GPS and Wi-Fi data and beacon signals, which it then connects to specific points of interest.

    Over time, Wright said, these location data “snapshots” develop “an objective picture of spatial behavior,” and can be used for building out consumer profiles, targeting and attribution. In other words, where people go says a lot about them.

    WPP-owned media agency Mediacom, an early test partner for Smart Trends, is increasingly turning to location data to help clients “gain a fuller, richer view” of consumer behavior and help planners understand how people interact with competitive brands, said Ben Phillips, the agency’s global head of mobile.

    “Such insights are hugely valuable across [a brand’s] businesses, because they can help them make strategic decisions about the products they carry, store locations and targeting techniques,” he said.

    Mediacom recently worked with Blis to run a pilot test studying foot traffic across the national grocery market in the UK, an extremely competitive sector, said Phillips, where shopping is still mainly an offline experience.

    “Promotions and store openings [are] constantly shifting the dynamics on local battlegrounds as retailers fight to increase shopper frequency or grow average basket value, which ultimately impacts revenue market share at a brand level,” he said.

    Looking at movement data gave Phillips and his crew deeper insight into the real-world store-to-store behavior of shoppers, the granularity and scale of which “survey data simply can’t match.”

    Even the most sophisticated brands often have a myopic view of consumer behavior because they’re only looking at it from the inside out. Even the most loyal customers in the world don’t spend all of their time engaging with one brand. Location-based analytics helps expand the view beyond a brand’s own properties.

    “To get a more holistic perspective, a view on how consumers behave with your brand in the context of your competitors and beyond in non-retail environments can be valuable in identifying lifestyle indicators to inform brand positioning or cross-vertical partnerships,” Wright said.

    Mediacom sees the value. The agency is planning to up its investment in location data and analytics in the coming year.

    “Nearly 100% of our digital campaigns include mobile in one form or another,” Phillips said. “And location will account for a large percentage going into 2018.”

  • The Crawl, Walk, Run Guide to Lifetime Value

    If understanding a customer’s long-term value were easy, every marketer would do it.

    But measuring LTV (long-term or lifetime value, referred to in some circles as customer lifetime value or CLV) is extremely tough. Brands must be able to identify and track customers over time, and they must work for companies that care about retaining long-term customers, not just making good numbers next quarter.

    Because of these challenges, few marketers measure this stat comprehensively.

    Yet, LTV – which measures beyond clicks or single purchases – is a better gauge of brand health than short-term metrics like click-through rate, which are like junk food compared to the nutritious meal LTV provides.

    “I don’t think there is any measure out there which is more predictive of your company’s eventual success than customer long-term value,” said Anant Mathur, global head of analytics at Essence. “It’s a proxy of how well you retained your customers and how satisfied they were.”

    Brands make better decisions when they use LTV, which saves them money.

    “You will acquire more valuable customers, and will allocate dollars more effectively,” said Matt Greitzer, co-CEO of Amnet. “And you will have a better understanding of the trigger points that drive people along the path of acquisition, retention and ongoing loyalty.”

    Brands also avoid spending marketing dollars on one-time customers. “You may be spending money on customers who will never come back to you,” said Michael Hemsey, president of Merkle Loyalty Solutions.

    The value a brand places on LTV depends on the product it sells. People use razors for decades, while diapers are more of a life stage product, said Christine Peterson, managing partner and digital investment lead at Mindshare.

    Figuring out lifetime value has often fallen to consultancies, who would measure profitability by segment, said Ram Singh, head of analytics at Performics US and a former management consultant. These analysts might look at long-term value as a measure of risk, not just as a way to optimize media. A product where it’s easy to switch to a competitor, for example, might need to lower its LTV calculation.

    Using LTV calculations to inform media decisions is spreading, but still not widely used.

    “While people understand it, LTV is not common currency in how performance-based campaigns are managed today, which is detrimental to the industry,” Greitzer said. “There is a real opportunity for people to up their game in this area.”

    Crawling: Starting With The Quick Win

    Brands who want to measure LTV can start by looking at metrics that approximate long-term value.

    For example, they can look at repeat purchasers over a short period of time, like a 90-day cookie window, said Jason Colon, regional director of ecommerce for Resolution Media.

    “Instead of looking at a single purchase attributed to a media touchpoint, you can start to expand that out and look at multiple purchases driven after that touchpoint,” Colon said.

    Once enough data has been collected, start bucketing users based on LTV.

    “Crawl is differentiating between high-, medium- and low-value customers, and making investment decisions with that in mind,” Greitzer said.

    Brands should look for metrics that reflect who their best customers look like, said Mathur. Does the brand care about the ability to upsell or cross-sell current customers? Frequency of purchases? Total dollar value of orders?

    “The organization has to figure out how it measures success,” Mathur said.

    Brands interested in harnessing LTV need to start building out their data stack, including tools for data storage and analysis – all of which need to be hooked up to marketing execution solutions.

    “You need to be able to not just store the data, but also act upon it,” Mathur said. That means ERP and CRM systems as well as a DMP and DSP for media execution.

    And brands need to staff up, because good analysis requires both data scientists and people who can make that data actionable. Brands should scope their agencies accordingly.

    “Hire talent that understands the data, but can tell stories in a way that make it compelling to decision-makers,” Mathur advised.

    Finally, brands need top-level executives to be on board – a challenge during a time CMO tenure averages just 42 months.

    “It needs to start at the C-level,” Hemsey said. “What we are talking about is an enterprise strategy. Because [LTV] touches every aspect of the business, from marketing, digital and finance, they all need to be working against a common goal driven by the C-suite.”

    Peterson agreed. “It needs to be embraced from top to bottom at clients, and that’s a difficult shift because of the way people are compensated,” she said.

    Walking: Optimizing Everywhere

    Once brands prove the results of using LTV, they can make the case that the metric should factor into decision-making.

    “[Brands] are starting to embrace a blend: delivering on quarterly sales, but not at the expense of a deeper investment in creating that loyalty and lifetime value,” Peterson said. “Immediate sales impact isn’t the only piece of the puzzle.”

    With executive approval, brands can start optimizing campaigns to get more valuable customers, not just the ones that will bring in the most value on their next purchase.

    Feeding LTV into programmatic campaigns, for example, allows for better frequency management.

    “Getting into the programmatic space, there should be a different frequency cap set for audiences with different LTVs,” Performics’ Singh said.

    Bringing in LTV may also make some media buys look much better – or much worse. Affiliate channels, for example, often attract more transient customers.

    In order to maximize this potential, brands need to make sure their acquisition teams (which often lead on programmatic) and retention teams are communicating. This process requires incenting CRM and media teams to share LTV metrics to apply toward common goals.

    If the units are separate, the acquisition team won’t be incentivized to find high-value customers. “That is an organizational mistake, to have a separate team with different goals that may not even communicate regularly,” Greitzer said.

    “Marketers need to push harder on this collision of CRM and media that’s happening to understand your customers better and make your media more targeted,” Colon said.

    Because the best place to grow LTV is by reaching existing customers, the CRM team needs to be intimately involved. Email marketing, for example, is a great place to increase the LTV of existing customers.

    “Your best customers are ones you already have,” said Amnet’s Greitzer. If brands encourage a customer make a repeat purchase, or increase their order value from $50 to $75, they improve the LTV metric.

    Running: Making LTV Predictive 

    For brands to run, they need to make their LTV metric more ironclad.

    “To run, you need to go from a historical perspective to a predictive one,” Mathur said. “The truth is that the people who were most valuable in the past may not always be predictive of what’s going to happen in the future.”

    Good measurements of LTV take into account what someone is buying, with higher weight to customers that buy low-value items frequently and a lower weight to one-time big-ticket customers.

    “I think of long-term value as a dynamic statistic that will change over time – and it might be more vulnerable to changing depending on what basket [of goods] is being considered,” Singh said.

    Forecasting, however, requires advanced tools, not all of which are ready to market. GroupM for instance is working on a predictive model for its clients.

    “GroupM is coming up with new ways to attribute value and make predictive value measurements for what kind of impact an investment now would have in 20 years,” Mindshare’s Peterson said.

    In reality, this stage is more backflipping than running – it’s so difficult that only the biggest brands typically get to this point.

    One reason it’s so difficult is that being predictive about LTV requires looking at how customers will feel about a brand years out.

    “Run, in my experience, is rare,” Greitzer said. Only a select group of marketers can be “aggressive in their investments without being beholden to a metric that’s easier.”

    Advanced LTV might seem unattainable, but the rise of AI and machine learning will make it more accessible.

    “The predictive power of optimizing toward LTV is one that is nascent today, but we will see more action over the next couple of years,” predicted Amnet’s Greitzer.

    Essence’s Mathur agreed. “This is a classic machine-learning application,” he said. “And this will happen faster than most people think.”

    Another trend that might make LTV calculations more commonplace: the rise of consultancies focused on executing clients’ strategies and vying for contracts with brands.

    “Consulting companies are making acquisitions in data or media management,” Singh said. “They are not advising the clients and moving out, but going into implementation.”

    The cozying up of mar tech and ad tech will drive further use of long-term value, Mathur predicted. “When you speak to an individual holistically, you drive higher customer long-term value.”

  • Wattpad: ‘Campaigns Work When They Feel As Native As Possible’

    That teens have no attention span is a fallacy. Just ask Wattpad, a platform where people can write and share stories that they’ve written and solicit feedback from their community.The storytelling platform boasts a community of 60 million monthly active users, mainly teens, young adults and millennials under 30, who spend more than 15 billion minutes engaging with Wattpad content each month – that’s more than 28,500 years of engagement every 30 days.Authenticity stops thumbs, said Chris Stefanyk, Wattpad’s head of brand solutions, and that’s also what appeals to brand partners like GE, Coca-Cola and Mondelez looking to bask in the reflected glow.“The pitch to brand is very much around engagement,” Stefanyk said. “It’s difficult to capture a substantial amount of this audience’s time, so brands want to try and reach them where they already are.”The majority of the content on Wattpad is user-generated and serialized, with topics ranging from anime, action, science fiction and romance to fan fiction, poetry and the paranormal. Anyone over 13 can sign up for an account and a few writers on the platform have even achieved offline fame with book and movie deals.But branded content does just as well as organic, as long as the brand makes an effort to fit in.“Campaigns work when they feel as native as possible,” Stefanyk said.

    During the 2015 holiday season, for example, Coca-Cola sponsored a series of letters to Santa written by Wattpad influencers featuring their nicest or their naughtiest characters. Users ate it up, spending more than 60 minutes on average with the content. Numerous people left comments on Coke’s Wattpad profile begging for the brand to create more bonus content.

    And in a recent campaign to promote the young adult film “Wonder,” which is based on a book of the same name about a 10-year-old boy with facial deformities attending public school for the first time, Lionsgate worked with Wattpad to sponsor a writing contest about kindness. The winning entries were made into professional digital videos.

    Although it’s not possible for Wattpad to tie engagement on the platform to soda or ticket sales, that’s also not the point. Engagement and time spent are the primary KPIs.

    “Brands are spending billions of dollars to generate awareness, but we’re going a bit deeper than that – we’re generating real engagement,” Stefanyk said. “Sixty minutes with branded content – that’s a metric that really seems to amaze our brand partners.”

    Wattpad also works with third-party providers, like Nielsen, to give its brand partners more typical metrics, like brand affinity and favorability. According to Stefanyk, Wattpad has seen 30% to 40% lifts for some brands in likelihood to recommend among engaged users.

    Metrics like viewability, impressions and clicks are implied when users are reading a series of branded stories to completion and asking for more, he said.

    Beyond sponsorships and branded content opportunities, Wattpad offers more traditional advertising options, including in-story ads and brief videos interspersed within stories, as well as basic targeting options mainly based on gender, age, geo and context.

    But targeting by context rather than audience makes the most sense for Wattpad and for its brand partners, Stefanyk said.

    Syfy, for example, recently did a takeover of the science fiction category for its show “The Magicians,” and Warner Bros. did the same for the horror category to promote its movie, “It.” Users interested in those topics make the most sense to target regardless of age, gender or other targeting parameters.

    Every piece of content on Wattpad is tagged with detailed metadata for contextual targeting, and the company invests in machine learning to help with the labeling and the vetting for brand safety’s sake. Content that seems mature or risky isn’t monetized at all.

    “We want the whole ad experience to be tied back to the storytelling,” Stefanyk said. “If we do that, the ads aren’t jarring and they’re with content that makes sense. Our audience is more than OK with that.”

  • Publishers Find Themselves Caught Up In Brand Safety Nets

    Publishers Find Themselves Caught Up In Brand Safety Nets
    by Sarah Sluis

    Publishers are getting ensnared in the filters used by many advertisers to combat the YouTube brand safety crisis.

    Earlier this year, many brands found their ads running next to offensive content on the video platform, prompting marketers and their agencies to enlist third-party monitoring. Now publishers as a whole are feeling the effects.

    The filters sometimes flag content correctly, but other times, they create false positives or flag content that falls into a gray area of brand safety. And the methodologies used by third-party measurement providers vary, leading some brand safety filters to generate more false positives than others.

    AdExchanger spoke to publishers that have seen their content run afoul of filters designed to catch fake news and racy, violent, gambling or political content – and what, if anything, they’ve done about those tags.

    For these publishers, tracking the impact of these filters on a page-by-page basis is time-consuming and often opaque, but it’s clear enough to see the bottom-line impact.

    Brand safety filters, for example, can cause private marketplace campaigns to underdeliver and open marketplace CPMs to fall.

    Penalizing High-Risk Content

    Underdelivering private marketplaces first alerted Ranker to its brand safety issues. The entertainment site lets users vote on topics and lists, including some that are sexual or violent in nature, such as the hottest celebrities or the deadliest crimes.

    In early Q4, the publisher discovered that Integral Ad Science (IAS) was blocking all content on its site, even though only a minority of it fell into the adult or violence categories. When Ranker dug deeper, it discovered that many brands had pulled spend months earlier in Q2.

    “These brand safety vendors are doing the best they can, but in using broad strokes to solve the problem, they are creating collateral damage,” said Ranker CEO Clark Benson.

    Ranker’s problem stems from how IAS scores content. If articles about the cutest kittens and puppies are placed on the same domain as articles about hot women or the worst crimes, the kitten and puppy content will see its “adult” score inch up.

    “We don’t block entire domains, but because we penalize high-risk things more than low-risk things that benefit you, a site that posts one pornographic article a month will get penalized a lot,” explained Dave Marquard, VP of product at Integral Ad Science.

    Ranker also learned that some of its content was miscategorized after receiving vendor reports. An article about who might die next on “Game of Thrones,” for example, may be incorrectly flagged as violent content, or an actress named Fanny could likewise be flagged for an offensive keyword, noted Evan Krauss, Ranker’s SVP of global sales.

    To resolve the issue and boost its brand safety score, Ranker took extreme measures: It demonetized many articles with the worst brand safety scores. That approach was more tenable than another remedy that IAS suggests: isolating all articles that will fail brand safety screens under a sub-URL, such as That could jeopardize the site’s SEO rankings and hurt revenue even more.

    A Gambling-Lite Gray Area

    The brand safety thorn for PCH/Media relates to how the filters define gambling. PCH visitors play games to win a chance at entering its sweepstakes – the digital application of its famous Prize Patrol. Because PCH allows users to play blackjack and slots, brands who block “gambling” on their brand safety filters can’t buy ad inventory on those pages.

    “In our view, it’s completely brand-safe,” said Chris Moore, director of business development at PCH/Media. “There is no money exchanged on our site. Where we run into problems is around the contextual providers and brand safety companies of the world … who want to put a blanket over an entire category.”

    One large demand partner added a brand safety block in Q3 that cost PCH/Media $20,000 a day. PCH/Media made its case to the partner and finally saw some spend start to return this week – but that doesn’t offset months of lost revenue.

    Because PCH’s content falls in a gambling-lite gray area, it’s also encountered scenarios where brands that it’s dealt with for years suddenly can’t buy on some parts of its site. The brands say they are OK with PCH’s content, Moore said, so they place direct and private marketplace buys. But they can’t or won’t override their brand safety filters.

    Political Content Flags

    Intermarkets, which represents right-leaning politics and news sites such as The Drudge Report, also sees its content falling into gray areas around brand safety. The publisher has had to petition its removal from fake news lists, and it maintains close relationships with ad tech partners so it can troubleshoot and resolve issues quickly.

    Given its ability to successfully overturn site blocks after being flagged for fake news, the publisher is more troubled by advertisers that block all news or political content.

    “Some advertisers are going from saying they don’t want to be around political content to [avoiding] anything they don’t feel is shiny, happy and perfect,” said Erik Requidan, VP of sales and programmatic strategy at Intermarkets. “That’s a big division. And it’s hard to create a brand or have an environment that’s sterile, clean and happy when you’re breaking news.”

    Plus, filters don’t take into account how a controversial topic like white nationalism or Black Lives Matter is covered; they ding publishers simply for talking about it.

    “The stuff that makes [an article] newsworthy is what trips the filters,” Requidan said.

    A Tech Learning Curve

    The looming question is whether this problem of overly stringent brand safety filters will get worse or taper off.

    Will advertisers loosen or remove their filters in pursuit of scale and lower CPMs? Or will they keep the filters long after memories fade of ads running next to terrorism videos?

    “Between fraud, viewability and brand safety, it’s contextual accuracy that keeps the CEOs of agencies and brands up at night the most,” said Rob Rasko, CEO of consultancy 614 Group. “That’s the one where the phone call comes through, and that makes it the scariest.”

    It’s possible that publishers’ woes will decline as filtering technology improves. “There are not a lot of companies right now with the ability to get that taxonomy correct, but you should expect there to be more,” Rasko predicted.

    A provider like Grapeshot scans each page individually for keywords that might violate standard or custom brand safety settings. It wouldn’t use the presence of non-brand safe content on the same domain to downgrade content except in rare instances, like for a porn URL or a publisher that doesn’t allow its web crawlers, Oakins said.

    In contrast, Integral Ad Science’s algorithm accounts for adjacent URLs when scoring sites in addition to keywords, which can make bland content appear unsafe.

    “We look at a word like ‘shot’ in context,” said Daniel Oakins, Grapeshot’s global director of publishing. Using that approach lowers false positive rates.

    Prices for brand-safe ad inventory are rising, Oakins said: “I think CPMs have gone up to make up for the lack of available inventory to buy. People still want to buy, so quality, safe content will rise in value.”

    And that flight to brand safety may benefit direct-response advertisers, Ranker’s Benson predicted.

    “If direct-response advertisers don’t care about being on a page about Trump or death because they are looking for conversion metrics,” he said, “this should give them more competitive CPMs.”

  • Film Studio Open Road Marries TV And Mobile Data

    Film Studio Open Road Marries TV And Mobile Data
    by Kelly Liyakasa

    Data is changing the way movies are marketed.

    Studios like Open Road Films are taking a more targeted approach to marketing, moving from broad-based buys – such as people aged 18 to 49 with a propensity for “dramas” – to more granular segmentation.

    “When finding audiences for a particular film, it used to be really shortsighted, where you might have only considered other theatrical films an audience has consumed,” said Yvonne Abt, SVP of media for Open Road Films.

    Entertainment marketers must also compete for consumer attention as more networks and video services, such as Netflix and Amazon Prime, boost their own program marketing in linear TV.

    “Television used to be the sandbox for theatrical clients to gain awareness, but it’s become untenable to try to compete against all of those marketing dollars and attention-grabbing creative,” Abt said. “We needed to be scrappy and find other ways to get attention.”

    That said, the film studio didn’t want to completely ignore television, despite a digital-first push to reach a female-skewing audience for the October release of “All I See Is You,” the psychological drama starring Blake Lively.

    Working with its partner, Tremor Video DSP, Open Road Films studied data representing about 34 million homes with the TV data platform Alphonso.

    It found that in particular, linear and over-the-top captured the most attention from the older-skewing female audience it was after.

    Using Alphonso’s data, Open Road identified and isolated audiences based on what they watched across broadcast, cable and streaming, down to the program level.

    The audiences were selected based on multiple “entry points” to the film, such as whether a viewer is more likely to be fan of thrillers, romances or strong female protagonists.

    With this information, Open Road used Tremor Video to create 15 buckets of micro audience segments to target through mobile video. The goal was to send mobile ads that matched the context of the TV programming consumed just minutes before or after the show content aired.

    “We were really trying to deliver a personalized ad experience on the personal device married to specific TV messages,” said Abbey Thomas, CMO of Tremor Video DSP.

    Tremor Video’s in-house creative team worked with Open Road’s creative team to customize various messages to reach these female viewers, whether they were watching “Scandal” on network television or “Stranger Things” on Netflix.

    Open Road designed about 11 different pieces of creative to help amplify its second-screen ads based on different viewer attributes.

    “By combining data about different television and streaming programs, it really helped us ascertain which people would like which message and then optimize the creative around it,” Abt said.

    For instance, if Open Road knew a consumer liked the program “Scandal,” it determined they were more likely to associate with a strong, flawed heroine and opt for creative geared toward that mindset.

    By combining TV and mobile data and targeting viewers with more precision, Open Road generated moviegoer lift as high as 17%.

    Ensuring proper frequency caps throughout the campaign’s life cycle can make or break the consumer’s cross-screen experience and impact conversion, said Abt, who previously worked with entertainment advertisers at agencies Horizon, UM and OMD.

    “If we’ve seen someone has been exposed 10 to 15 times to our trailer and has shown other positive signs and signals, we may actually choose to dial down frequency so we can put more money toward people we still have to convince,” she said. “In that way, it doesn’t negatively impact consumers who have already seen the trailer, and we save a little bit of gas in the tank for those last-minute decision-makers.”

  • How Streaming Video Service Crunchyroll Strikes A Balance Between Subscriptions and Ads

    How Streaming Video Service Crunchyroll Strikes A Balance Between Subscriptions and Ads
    by Kelly Liyakasa

    For video service Crunchyroll, finding the right mix of ads and subscriptions is critical for ensuring long-term success in the OTT space.

    That strategy also includes a range of alternative revenue streams, such as offline events and ecommerce.

    But before it could effectively monetize, Crunchyroll built a scaled audience by catering exclusively to Japanese anime enthusiasts.

    As a result, the niche streaming service continued to attract funding from its investors. Ellation, Crunchyroll’s parent company, is backed by Otter Media, a joint video venture between AT&T and Chernin Group.

    “Brands like ours, and maybe the WWE, have proven that serving a key audience and knowing exactly who you’re creating content for doesn’t have to be a niche effort,” said Colin Decker, COO of Crunchyroll and former GM of Discovery Digital. “That’s what made us one of the top 10 SVOD services in the world with a larger direct-to-consumer business than most US TV brands.”

    In 2017, Crunchyroll crossed the 20 million-user milestone – and 1 million paid subscribers.

    Decker spoke with AdExchanger about how Crunchyroll achieved its growth and where it’s heading. 

    AdExchanger: How does maintaining a direct-to-consumer model pay off for an OTT brand?

    COLIN DECKER: The business I ran at Discovery Digital Networks was absolutely about expanding our own, original IP in a social sharing and distribution model. We were fully ad-supported.

    Coming to Crunchyroll, which had such a unique subscription-based relationship with its users, allowed us to anchor the brand and a business and then build a strong, profitable model off of that. There are a lot of incremental and ancillary businesses you can develop if you have a strong brand.

    Can you share an example?

    It gives us permission to do a lot of other things that we probably wouldn’t have done in a purely ad-supported business. For instance, events – we just launched the Crunchyroll Expo, our own anime conference. We have Crunchyroll movie night, which happens four times a year in 300 theatres around the US. We have the Anime Awards, which is like the Oscars for anime. We lean very hard into commerce, have an ecommerce store and do a lot more merchandising at our live events now.

    How do those ancillary events build audience engagement?

    Crunchyroll kind of uniquely organized itself around an underserved category of people out there and over time, the aggregate momentum of that group became something bigger than the community, and it became more of a lifestyle and point of view. Instead of us just finding random anime fans around the world, we’re making new fans and showing them how great this medium is and what it means to be part of it.

    You’re one of those rare video services that’s grown both your subscription and ad-supported businesses. What made you choose to do a hybrid?

    In a purely ad-supported environment, you’re fairly dependent on the platforms you’re building audience on, which you do not own. There have been very few people who’ve been able to meaningfully build an owned-and-operated ad-supported business that’s capable of true scale, because the real audience scale fundamentally lives on big social platforms, especially Facebook and Google’s YouTube.

    An important question for anyone to ask in the TV environment today when considering launching a new offering into the marketplace is, “Does your proposed offering uniquely speak to someone out there or does it attempt to reach everyone?” And that sheds a light on the fundamental issue we see, which is that a lot of content brands who try to be something to everyone, come from the legacy of traditional distribution – the MVPD world.

    How does a legacy broadcaster find similar success in OTT then?

    It’s a combination of things: a deep, committed empathy with the audience you’re trying to serve and then fact-checking yourself with actual data, whether it’s consumption data in your own platform or, in our case, lots of social data because it’s important to know what’s happening with the anime conversation outside of our own world.

    We also don’t wake up in the morning thinking of new ways to make money. We wake up thinking of new ways to absolutely super-serve and engage our fans. That’s always the formula we start with.

    How can a digital (or traditional) publisher find success in OTT when they’re often at the mercy of the platforms to increase their distribution?

    Be reasonable in your expectations, be prepared to devote the time that it takes and be prepared with the capital to support you through that transition. It takes time.

    Crunchyroll has been around for about 10 years, but the hockey stick really happened within the last two years. A huge pitfall for a lot of OTT services right now is having unrealistic expectations about how quickly they can create a direct-to-consumer relationship.

    We were big fans of (Comcast’s) Seeso and partnered with them (before they were shut down). They had 100,000 subscribers, which is nothing to sneeze at, but you’re often punished if you don’t get to 1 million in year one. So, I’d say have patience, commitment and capital.

    Also, absolutely know your audience. When Crunchyroll was a small startup, the people who worked here were the audience. And so it really just super-served itself.

    Interview condensed and edited.

  • TV Commercial Length And Attention: The Elusive Sweet Spot

    On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.

    Today’s column is written by Joan FitzGerald, an independent consultant.

    In our entertainment-overloaded, attention-starved digital age, every teacher knows they need to balance the long and thoughtful with the short and punchy, or else they’ll lose the attention of the class.

    This has never been truer than in video advertising. Building ad formats and ad environments where attention can thrive is the new mandate as consumers have more control over their viewing environment. We need to rethink our metrics to focus on attention – and fast.

    Impressions, or exposure to an advertisement, is the foundational advertising metric that the media industry has relied upon for decades. It is coming under more scrutiny now than ever. The impression metric is grounded in the assumption that consumers pay attention. Unfortunately, attention, especially among younger consumers, may have been inalterably diverted from the 30-second commercial. New ad formats and contexts are the keys to getting their attention back.

    Media brands like Fox’s True[x] introduced the six-second spot. Turner has done ground-breaking research on ad context. Google pioneered giving consumers more control of their ad experience.

    Research from TVision Insights suggests shorter commercials deliver on ROI; it found that Discovery’s Shark Week promotional ad viewers who paid attention for at least three seconds had a tune-in rate 68% higher than average. And iSpot.TV calculated that 28% of attention is driven by program-related factors, and the rest by factors such as ad creative and creative wear-out, the point where the ad loses its effectiveness due to repeated airings.

    On digital platforms, marketers and digital ad platforms long ago realized that commercials lasting 30 seconds – or even 15 – are non-starters in most contexts. How long the commercial actually appeared on the device before the next commercial started or before tune-away was easily measured. Digital ad platforms saw that they had to go shorter or give consumers more options, such as skip buttons, to control the experience to retain their audience.

    On television, 15- and 30-second commercials have been the mainstays of the business. But, while it’s theoretically possible to measure how long the commercial appeared on the TV screen, the metric is not used in our transactional systems. Nielsen’s measurement standard is a minute and not granular enough to untangle this question. Television set-top box data doesn’t always have actual end times – these are often modeled.

    The problem with commercial length as a transactional metric is that the ad buyer may assume that a six-second commercial has less value than a 30-second commercial because it’s shorter. This is too simplistic an evaluation given today’s advertising dynamics. In today’s world of lower attention spans and more ad avoidance, shorter commercials may have higher value.

    There is emerging research that shows consumer attention and comprehension can be captured in seconds. The Media Ratings Council (MRC) set the digital video viewability standard, which gets us to “opportunity to see” the ad – the step before attention – at only two seconds. MRC found that recall tripled as digital video ads moved from the lowest to highest levels of viewability.

    The consumer experience may be better with shorter commercials on linear TV because commercial pods can be shorter. Consumers may find that tune-away isn’t worth it if commercials are shorter. Six seconds may be just the right lead-in to a rich interactive experience so that consumers search or click-through for more.

    The reality is that commercial length is not a good surrogate measure for attention, and probably never was. Just because the commercial invites the consumer to watch for 15, 30 or even 60 seconds does not mean that it sparked the consumer’s attention and created comprehension for the brand.

    Marketers today know that consumer attention matters, but they are not sure they need a 30-second commercial to get there. Worse, they wonder if the 30-second commercial is just an idealized version of something that is actually self-defeating; if the consumer skips the ad because it’s perceived as too long, should a brand have used that ad in the first place?

    Marketers may no longer have the luxury of building the brand story in one long creative execution. We may have to start with shorter commercials and build the story through ad formats with more creativity and ingenuity. Even in this attention-starved world, commercials – with a bit more creativity and a lot more ad technology – can continue to grab consumers’ attention and compel them to action.

    The ad world is changing. We need to make sure our definition of impression withstands the test of these digital times. Media brands must ensure that impression means attention and is relevant to the video advertising world we live in today. That means understanding what it takes to get consumers to pay attention to the brand message, and inventing new ad formats and programming context to get us there.


  • The Case For Connectivity

    Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

    Today’s column is written by Ashley Herzog, vice president of product at Visto.

    Like a good mass transit system, interconnectivity is the key differentiator for advertising technology these days.

    But for any brand embarking on a self-serve programmatic strategy – for many an agency, too – it’s not as straightforward as simply plugging services together. Challenges and delays remain in vetting potential programmatic partners, reviewing commercial terms and poring over contracts – time-consuming work that can all be for naught if the systems can’t be integrated.

    One big hurdle: vendor vetting friction. Considering the current size of the Lumascape, just assessing hundreds of providers for initial fit could take an eternity. Seemingly every day a new partner enters the ad tech ecosystem, offering new or sometimes duplicative services to brands and agencies. The most persistent or notable often push their way to the front, whether or not their technology truly warrants the recognition.

    What is more, marketers need sign-off from multiple people within their organization. A customer wants to assemble a group of diverse and complementary partners with experience and market equity, but putting together the puzzle can be like solving a Rubik’s cube.
    Another challenge is the commercial negotiation. There is a steep adoption curve to embracing programmatic platforms’ business terms. Most will require a 12-month upfront contract with minimum spend guarantees, which have now risen to upward of 20%. Some providers require a strict and steep monthly minimum, which for a brand manager can add up to a lot of early pressure. In many cases it may take two to four months to ramp up a team to the kind of understanding or visibility to drive significant results.

    Finally, there is the contract review. Legal due diligence is important – and time-consuming. I recently learned of one big publisher that took more than six months trying to get its legal team to review a programmatic ad tech contract. And I heard about one major brand that already had a data management platform and programmatic director in place, but just didn’t know where to start to build out its programmatic stack. Just getting one demand-side platform in place took it more than eight months.

    These points of inertia are not just road bumps slowing down brands’ inevitable adoption of programmatic tools – they are actually suppressants discouraging many from jumping in at all. I have seen many advertisers and agencies, put off by these challenges and complexities, actually shy away from the prospect.

    Programmatic buying is still a mystery to most marketers, according to the ANA, with only 23% claiming to understand how to effectively leverage programmatic strategies. This simply isn’t good enough – when brands are looking at investing millions of dollars in media spend, any mistakes are costly. It’s on the vendors to add in a layer of product onboarding and training to help alleviate this gap.

    When I think about how my peers in engineering can smooth out the disconnection and inefficiencies between the core executional actions of advertising platforms from a technical standpoint, I enviously wish there were an equivalent magic wand we could wave over on the business side, to reduce the friction and uncertainty around vetting, negotiating and clearing supplier contracts.

    That is why I think everyone in the industry needs to make a concerted effort to reduce the inertia and increase the simplicity with which customers can onboard themselves to a programmatic stack.

    Too often, people leading brand marketing efforts are overwhelmed at the first step on the on-ramp. That can limit spending against tactics that may be extremely valuable to a brand, but are deemed too daunting to explore. So, vendors should take it upon themselves to make the best in programmatic solutions as accessible as possible.

    Building the first programmatic stack is about contracts and fine print as much as it is about APIs and data. The industry needs to make these business matters as plug-and-play as the technology in the platforms it sells, reducing the time it takes to assess partners, negotiate terms and review contracts.