Narrative: Advertising Sustainability
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Facebook’s business model for Messenger won’t be payments and commerce but advertising – Recode (Apr 11, 2017)
This isn’t a huge surprise – on the one hand, we’ve already seen Messenger start to introduce ads, and on the other though there’s been some payments and commerce activity within Messenger it’s been clear for some time that it wouldn’t be a major money spinner for Facebook. But it’s interesting to hear this straight from David Marcus, who runs Messenger, because Facebook had been at least a little more opaque on this topic in the past. It’s also been increasingly evident that Facebook has been looking for more places to squeeze ads as it reaches ad load saturation in the core product, and Messenger is an obvious place to do that. But a messaging app is also the place where advertising feels most invasive and least native, because it gets in the way of your most personal conversations with the people you care about most. That’s a risk, and Facebook is going to have to tread carefully here to avoid turning off users as it pushes ads in Messenger. (Incidentally, it’s worth noting that Facebook has just announced a group payment feature, so even though payments aren’t going to be a source of revenue or profits, as this article says they’re nevertheless an important feature of Messenger.)
via Recode
Twitter Opens Advertising Analytics to Third Parties (Apr 10, 2017)
As per the Marc Pritchard interview I covered earlier today, many advertisers are still concerned that they’re essentially being defrauded when placing ads online, because they don’t know which ads are really being seen by human beings as opposed to bots. One of the big requests these brands have had for ad platforms is increased outside auditing by independent firms which have standardized measures for things like viewability and can compare metrics across multiple platforms. We’ve already seen Facebook and Google open up both for outside auditing and for measurement by third parties, and Twitter is now joining them. Twitter’s analytics around advertising have been an area of weakness, so even nothing here directly improves Twitter’s own tools, open up to third parties should at least help some advertisers feel better about the data they’ll get back when advertising on Twitter.
via Twitter
Twitter Introduces Custom Hearts, a Sponsored Filter Equivalent (Apr 10, 2017)
Twitter today announced Custom Hearts, an equivalent of sorts to Snapchat’s Sponsored Filters product for advertisers. Advertisers can now use the Custom Hearts product to replace the standard heart icon that users use to show appreciation for a live video stream in Periscope or Twitter with a brand image of some kind. The example used here is the movie franchise The Fast and the Furious using “F8” as an alternative to promote its eighth film, which premiered over the weekend. It’s a lot subtler than Snapchat’s Sponsored Filters, and it doesn’t have the same social multiplier effect of users applying a sponsored filter to a picture or video and sharing it with their friends, but it’s good to see Twitter innovating to find new forms of advertising given its recent struggles with growing ad revenue. More importantly, it’s also doing more with analytics, something I’ll cover in a second post shortly.
via Twitter
P&G Chief Brand Officer Renews Calls for Advertising Platforms to Grow Up – New York Times (Apr 10, 2017)
I won’t cover this in depth again here – I covered Marc Pritchard’s remarks in January at the time, and his line hasn’t changed much. But given all that’s happened in the interim it’s worth reiterating that Pritchard remains a prominent voice advocating for change in the digital advertising platforms on behalf of big brands. Specifically, he’s arguing for more transparency in what can be a very opaque value chain from start to finish. None of these issues are going away soon, though it’s arguable that what the brands really want here is more leverage, so I would guess that they’ll keep beating the drum while slowly getting more and more of what they want. The crisis of sorts around ads showing up against undesirable content is likely to blow over soon enough, but the ongoing tension between advertisers and these platforms won’t go away any time soon.
via New York Times (see also this episode of the Beyond Devices Podcast about the state of online advertising)
WPP Drops as Major Client Unilever Slashes Advertising Costs – Bloomberg (Apr 6, 2017)
I’m tagging this against Alphabet/Google even though there’s no explicit connection here, simply because that company is by far the biggest beneficiary of online advertising spend, and this story suggests that we may see lower spend going forward as some of the world’s largest advertisers start to cut their marketing budgets. As of right now, there are only some early warning signs, with Unilever signaling cuts, but this could easily be the beginning of a much bigger pullback, which could affect not just Google but Facebook and other online ad players. The article cites some other softness in the overall advertising space, and we’ll have to see if this turns into a meaningful drop in spending across the board or just ends up being a minor dip (and whether either of those affects digital advertising specifically).
via Bloomberg
YouTube Cracks Down on Fake Channels by Setting 10,000-View Minimum Before Serving Ads – Variety (Apr 6, 2017)
As I’ve said essentially from the beginning of the advertiser boycotts of YouTube, one easy way for the company to resolve at least some of the issues would be to raise thresholds on the channels and videos that could carry ads, and it looks like YouTube is now taking baby steps in this direction, albeit in the apparent context of impersonation rather than other content issues. Channels will now have to earn 10,000 views of their videos before they can fully join the YouTube Partner Program and begin serving ads, which should help weed out some troublesome channels before they get to the point of monetization. As of right now, that should have only a tiny effect on the ability of creators in general to monetize their YouTube activity – 10,000 views generate such a minimal amount of ad revenue that this isn’t going to hurt anyone’s ability to make money. As long as the threshold stays at this low level, then, this might be a relatively painless way to introduce at least a low bar to monetization on YouTube.
via Variety
Google says its YouTube ad problem is “very very very small” but it’s getting better at fixing it anyway – Recode (Apr 3, 2017)
There are one or two interesting data points in here, with the most interesting probably being that videos big advertisers “had flagged received less than 1/1000th of a percent of the advertisers’ total impressions” – in other words, the problematic videos were around one in 100,000 or less of the videos where ads appeared (it’s worth noting that this number only relates to the videos flagged by brands – there may have been quite a few more they didn’t find). The other interesting thing here is the suggestion Google exec Schindler makes several times that there’s some unnamed person behind the recent attention this issue is getting: there was a report recently that someone who developed detection technology for videos was pushing the story as a way to get attention for that technology, and I wonder if Schindler is hinting at that without being explicit and thereby drawing more attention to the issue. The last thing worth noting is that Google is now allowing outside firms like DoubleVerify and comScore to start auditing ad placement, which is something that third parties have been wanting. The issue is definitely fading from the headlines as the stream of advertisers announcing boycotts dries up, but it certainly hasn’t been dealt with definitively, and as I’ve argued, as an issue it goes well beyond just YouTube and affects programmatic buying more broadly as well.
via Recode
Chase Had Ads on 400,000 Sites. Then on Just 5,000. Same Results – The New York Times (Mar 30, 2017)
This is a great illustration of the broader fallout from the recent YouTube / Google backlash from advertisers: in this case, JP Morgan is dramatically narrowing the number and range of sites on which it will advertise, and it’s about to do the same thing with YouTube as well. In both cases, it’s taking that action itself to whitelist sites and channels rather than relying on any Google tools to do so. In other words, even if Google doesn’t choose to solve the problem by limiting ads to a smaller number of sites or YouTube channels, advertisers may go ahead and do so anyway. That’s going to be bad for the long tail of creators and sites, who may see both overall ad volumes and prices drop significantly. This isn’t nearly over, and even if Google and YouTube address some advertiser concerns, I suspect we’ll see ongoing fallout and a narrowing of where big brands advertise going forward. See also this post from music video service Vevo, which is making a pitch that its YouTube channel and videos are a safe space within the platform.
via New York Times
Twitter will start putting ads in front of Periscope videos – The Verge (Mar 28, 2017)
Like Facebook, Twitter is pushing ads into more and more places, including videos on its platform, in an attempt to drive ad growth at a time when that rate of growth has been slowing. In Facebook’s case, the slowdown is due to saturating ad load, whereas for Twitter it’s a combination of anemic user growth and ineffective ad formats. Pre-roll ads for live video are likely to be a bit of a turnoff for users, but if the video is important (and long) enough then they may just put up with them anyway. But this is yet another sign that Twitter is willing to try lots of new things when it comes to finding new sources of revenue, on top of last week’s reports about testing a paid subscription service.
via The Verge
Spotify Acquires MightyTV to Improve Ad Targeting (Mar 27, 2017)
When I saw some of the headlines about Spotify buying a company which is good at recommendations, I assumed that would be the focus of the acquisition, but it turns out that the focus is actually on improving Spotify’s ad targeting. So you won’t see better music recommendations, and if you’re a paid user you won’t see any change as a result of this buy at all. I was a Spotify subscriber for a time, but have never used the ad-based service, so I don’t know how the targeting is at this point, but if it’s anything like other online video and audio services, it could use some help, so this seems smart. But of course good targeting requires good data on users, and I’m curious to see how Spotify will improve in that department – by itself, it presumably knows relatively little about its users beyond their musical tastes, so better targeting would likely require buying in third party data to enhance its user profiles. And therein, of course, lies the inherent tension in all ad-based business models – user privacy versus effective targeting.
via Spotify