SNAPCHAT AND THE GINGERBREAD MAN:  Earlier this week I wrote about some clouds on the horizon for Snapchat.  Despite being the shiny new toy of the moment in digital media, user growth is slowing and advertisers are asking harder questions about ad effectiveness.  The attached article from VisionCritical explains the competitive vice Snapchat finds itself in.  As an industry disruptor they carry the burden of having to keep disrupting, because if they ever stand still their uses who flocked to them for the newness factor will move on to the next Johnny come lately publisher.  This is forcing Snapcat into something called the “Gingerbread Man Strategy”, where they have to run, run, run as fast as they can just to survive.  That’s why you see them pursuing seemingly random strategies like their Glasses hardware.  Yes, this can work.  Google is the one great example of a company which built it itself by disrupting industry after industry.  But the road is long and they odds aren’t great for Snapchat to become the next Google.

THE BEST BAD IDEA:  As a follow up to yesterday’s blog post on Nielsen’s ratings fiasco in Tampa, check out this Radio Ink article.  There’s a growing chorus in the broadcast industry for Nielsen to improve or do away with PPM, and even a few calls to go back to the old Diary system which actually still exists outside the top 52 markets.  Let that sink in for a minute – listeners handwriting what stations they’re listening to on a pamphlet for a week and then mailing it in to Nielsen might be an improvement over PPM.  It’s hard to imagine this being a serious suggestion as a way to fix the problem, and it underscores the cul-de-sac the Radio industry finds itself in.  If PPM doesn’t work, and there are no new competitors of technologies offering ratings measurement solutions, what other choice does the industry have besides going back to paper diaries?  It reminds me of the memorable quote from the movie Argo when Bryan Cranston’s character says “This is the best bad idea we have, sir”.  If that’s true then start mailing out those diaries!

LESSONS FROM TOMMY BOY:  Speaking of movies, I’d like to leave you with an article about one of my all-time favorite comedies Tommy Boy.  If you’ve ever been on the road with me for a day of sales calls you know that I’ll start quoting lines from this movie, because nobody captures the trials and tribulations of the wandering salesperson better than David Spade and the late Chris Farley.  Well somebody actually wrote a useful LinkedIn Post about the movie with regards to the sales lessons it can teach.  The first few points the author makes are fairly obvious and/or light. But hang in there for #5 – it’s the key.  Genuine passion, belief, and excitement for what you’re selling makes all the difference.  It can literally rub off on the audience you’re pitching to and make you that much more successful, as it did Tommy Boy.

Have a great Friday (and weekend) guys!

THE RICH GETTING RICHER:  eMarketer is out with their latest forecast of US Mobile Ad Revenue by the major publishers.  The numbers that jump off the page, of course, and the lion’s share being devoured by Google and Facebook.  Google’s revenue percentage, which is derived mostly from Search and Display, was 31.5% in 2016 and is expected to grow to 33.8% by 2019.  Facebook, who generates revenue from Content and Video ads, took in 22.5% of the mobile ad revenue in 2016 and is expected to grow another 4% to 26.5% by 2019.  If this forecast is accurate over 60% of mobile revenue will be controlled by two players within the next three years (let that sink in).  Then there’s a pack of four – Yahoo/Twitter/Pandora/YP – all taking in 1-3% of mobile ad revenue.  Interestingly, of those four only Twitter is forecasted to see significant share erosion, with Pandora expected to pass them in rev share by 2019. The one dark horse on this list is Snapchat – sitting in the #7 position right now, but with lots of momentum but also growing client push back to prove ad effectiveness.  Should be interesting to see how this horse race shapes up over the next few years.  (link)

iHEART GETS CREATIVE WITH AUDIENCE SEGS:  Every year iHeart holds an upfront style gathering called SoundFront to debut upcoming product advancements.  During this week’s SoundFront they debuted a new capability called SmartAudio, which is effectively a DMP that allows matching by clients’ CRM data or other third party data to create custom audience segments.  The innovation wrinkle here is that iHeart is using declared data from the streaming listeners who have registered (a portion of their audience is registered), and then models out segment characteristics against their larger broadcast audience.  It’s a little bit of Frankenstein matching because they’re projecting a listener profile from one platform to another, but at least it’s a creative way to bring audience segmentation to the data-void broadcast side of their business.  (link)

NIELSEN IS BROKEN:  If there was ever any doubt about the problems with Nielsen’s PPM ratings system, consider the situation going on in Tampa right now.  One household in Tampa was given four people meters, which is one for every person in the home.  All family members dutifully wore there PPMs, and they all listened to a heavy amount of the online stream version of a Hispanic station owned by Beasley Broadcasting.  As a result of their listening volume, compared to the relatively small total # of PPMs in Tampa, the online station rose to #1 in the market within selected demos.  In reaction to this Nielsen deemed this household an “outlier whose behavior does not represent the marketplace”, and subsequently took the household’s listening out of Tampa’s ratings calculation.  Does this sound like a stable ratings measurement system to you?  The core problem is Nielsen’s unwillingness to update their measurement technology to something better than a device you might find at Beeper City.  Or at the very least, add significantly more PPMs to the market in order to stabilize the data.  I have two links on this from Inside Radio.  The first is a description of what’s occurred. (link1)  And the second is a radio consultant’s take on what Nielsen should do to fix their PPM problem. (link2)  Be sure to remember Tampa the next time you hear a radio rep use Nielsen data garbage to pitch their station.

Have a great Thursday guys!

GEEKING OUT ON FINTECH:  I recently met with a client at a large traditional bank who told me one of their top internal fears was getting eaten slowly by the nibbles of many smaller fintech startups – aka death by minnow.  Their estimates were as high a 60% attrition of revenue over the next five years (which seemed a little high to me), if they didn’t get ahead the curve on new fintech advancements, especially in a mobile in-app environment.  It occurred to me that this particular bank’s challenges were probably no different than any of the other large, national, location-based institutions.  So the tech innovation pressures keeping this banker up at night were probably the same concerns of the other guys.  The following Digiday article bears out this point, with a series of charts showing what traditional banks are thinking about, planning for, and putting resources towards right now.  Here’s a hint . . . it’s all digital and mobile.  Helpful to know if you work for or call on a Financial Services company.  (link)

SOME HONESTY FROM A BROADCAST RADIO VETERAN:  If you’re a regular reader of this blog you know about the radio industry’s infatuation with the idea of Reach as a competitive advantage.  And you also know I believe it’s a non-actionable headline that does nothing for listeners or advertisers.  That’s why I get nauseous when I see the parade of stats from Nielsen (and the radio trades), like the latest Inside Radio article here.  For an alternate perspective from another veteran broadcaster take a look at the blog post from a gentlemen named Dick Taylor.  Mr. Taylor spent over 30 years in broadcast radio, including 10 years as a Market Manager for iHeart (ClearChannel), and is now a Professor of Broadcast in the School of Journalism at Western Kentucky University.  So I’d say he’s qualified to speak on the topic.  He’s one of the first broadcasters I’ve seen get very honest about the fallacy of reach and the waning importance of mass media.  Thank you for punching through radio’s “corporate line” and calling it as you see it Dick Taylor!

DON DRAPER WINS THE PITCH IN THE END:  This final one is so awesome I lost sleep last night waiting to tell you about it.  Even if you’re not a Mad Men diehard you’ve gotta respect it.  In season six of the series one of Don Draper’s most memorable pitches was called “Pass the Heinz”.  It was notable because 50 years ago Don pitched a marketing campaign that would never show a picture of the actual product, which would have been unheard of back then.  Instead he only focused on the benefit to consumers.  Simply stated, if you put Heinz on a food it will taste better.  That’s all you need to know, right?  Well 50 years ago the fictional Heinz client turned down Don’s creative idea.  But now the real Heinz brand is resurrecting and running a real ad campaign with this creative.  Yes, it’s true!  Makes you wonder which Sterling Cooper product pitch you’ll see come to life next. (link)

Have a great Wednesday guys!

PANDORA PREMIUM TO DEBUT WEDNESDAY:  Yesterday Pandora delivered the biggest streaming news of 2017 with the announcement of its on-demand subscription tier, called Pandora Premium, which starts rolling out to the public on a limited basis this Wednesday, March 15^th.  The Premium subscription will priced at $9.99/month, and become the third tier in Pandora’s full spectrum of streaming options.  Listeners will still be able to use the current base Pandora product (which will remain free and ad-supported), and the mid-tier Plus product which is priced at $4.99/month.  This move is significant because Pandora has dominated the free online radio side of streaming for years, leaving all the other players to duke it out on the sub side.  Now Pandora is playing offense on their side of the street – setting up what should be a very interesting showdown.  There are about 1,000 articles covering yesterday’s announcement.  The following RAIN link is about the most balanced and detailed one I’ve found.  It’s a long read, but well worth it.  (link)

LOTS OF SIZZLE, BUT WHERE’S THE STEAK?:  Even with that “new IPO smell” hanging in the air, Snapchat’s ad business is coming under increased scrutiny.  The challenge from marketers is simple – if you’re casting yourself as equal to Google of FB then you need to back it up with scale and ad effectiveness.  The scale is there for now, but there’s some growing skepticism over how well ads on Snapchat are actually working.  This is happening because so many marketers rushed to get on to the platform just assuming they’d see results.  Only now, per the attached RBC survey, are questions being asked about how well those ads are working.  Compound this concern with increased competition from YouTube and Facebook, with the latter having literally cloned Snapchat’s stories functionality.  All of this is creating a scenario where Snapchat needs to start proving that ads on its platform are working, or their money will start flowing back to the other guys.  (link)

A NEW PLAYER IN THE AGENCY GAME:  Finally today, AdWeek has a really interesting feature story on a phenomenon that’s quietly happening across the agency side of the industry.  For years smaller boutique creative and digital agencies have been bought up by larger agency holding companies.  I’m talking about the four big dog global HCs  – Omnicom, Publicis, WPP, and Aegis/Dentsu.  But lately there’s been a new buyer of agencies in the form of global Business Consultancies like Deloitte, Accenture, PwC, McKinsey, etc..  Previously these consultants concentrated on traditional business offerings like accounting, HR, and strategic advisory services.  But lately they’ve been adding data and analytics to the mix, which lends itself perfectly to digital advertising.  And now they’re completing the circle by actually buying agencies who plan and produce digital marketing.  This is creating a full A to Z offering for their clients and making these consulting firms even more powerful.  The infographic down the left side of the article shows which agencies have already been snapped up and by whom.  It’s a pretty amazing list to consider.  (link)

Have a great Tuesday guys!

FINDING MEANING WITHIN THE MADNESS OF SxSW:  Today is the bridge day between Sx Interactive which has been running since Friday and the chaos of Sx Music which starts this afternoon and runs through Thursday.  As a witness to this year’s craziness I can tell you even the soaking rain of Saturday didn’t diminish the crowd’s passion and enthusiasm for Sx.  And since many of you have never attended, I thought the following AdWeek piece would help explain what Sx means to digital marketing, how it’s evolved over the years, and how it’s fought to stay relevant in the space shifting world of tech.  I’m sure over the next few days you’ll see reports about the newest Japanese Cyborg which can learn to cook your favorite meals (yes, they exist).  But for now just take in the big picture implications from the intersection of marketing and tech.  (link)

THIS IS YOUR BRAIN . . . THIS IS YOUR BRAIN ON AUDIO:  Staying on Sx for this one, there was some buzz in Austin around Pandora’s release of a first-ever neuroscience study on the way the human brain processes and remembers audio ads vs. visually based ones.  The breakthrough here is the hard science behind the results.  For years scientists (and radio sales reps for that matter) have implicitly connected audio signals to memory.  Think about songs you don’t even like but can’t get out of your head.  But nobody’s ever had any science to back up the theory . . . until now.  Thanks to a brain wave analysis conducted by the research firm Neuro-Insights we now know that audio messages make a bigger impact of your brain than other ad formats.  AdWeek unpacks the story in the following easy to understand summary of the study.  (link)

THE 11 BEST AD CAMPAIGNS OF THE PAST YEAR:  Every year Business Insider compiles the “best” advertising campaigns of the previous year into one all-star list.  Granted, the term best is sort of a loose one – does it mean most creative, highest ROAS or some other ad effectiveness measurement?  Regardless of the definition, this year’s list has some real beauties on it.  Here are my favorite three:  #3) The McWhopper Proposal . . . Burger King pitches the idea of a joint product to McDs, McDs turns it down, but the rumor leaks and goes viral yielding 9M earned social impression on a concept that never even happened.   #4 Brewtroleum . . . the Kiwis (New Zealanders) may have saved mankind with their plan to convert left over beer yeast into renewable energy.  How quickly can we test this theory?!?  And finally my favorite is #11 Share The Blood . . . The Romanian National Institute of Blood’s creative approach to solving their nation’s blood shortage due to a national phobia of vampires (yes, it’s a real thing).  They offered a free ticket to the Untold Music Festival in return for a pint of donated blood.  I can’t make this up people!  After reading these you’ll really appreciate the creative genius found in so many parts of the marketing industry.  (link)

Have a great Monday guys!

Yesterday Edison Research published its annual Infinite Dial Report for 2017.  This is an eagerly awaited study since it’s the most comprehensive (and neutral) look at audio consumption in the US. It’s also valuable since Edison has asked some of the same questions as far back as 2000, giving us 17 years of trend line data to study.  I know you may not read the entire doc, so I’m going to flash some of the most important takeaways for today’s DG roundup.

FINDING #1 – THE MAINSTREAMING OF STREAMING:  Right now 61% of the US population 12+ listens to some form of internet audio streaming.  That percentage is up 4% YoY, and has been steadily growing at the same rate for the past few years.  At the current growth trajectory 75% of the population will listen their music via stream by 2020.  That’s what I’d call mainstream, baby!   (link)

FINDING #2 – FOR THE STREAMERS IT’S PANDORA, THEN SPOTIFY, THEN NOBODY:  Pandora continues to be the clear market leader with 32% of the US population listening each month, following by Spotify at 18%, iHeart at 13%, and Apple at 8%.  Keep in mind as you see the YoY growth numbers for Spotify that this is total audience, so subscription and free listening combined.  Spotify doesn’t publicly release its split between the two buckets but industry experts estimate it to be 40% Sub/60% Free.  If those percentages are true then Spotify’s addressable reach (% of the US population who can be reached by ads) drops to 11%.  By comparison Pandora’s addressable reach is about 31% – so think of a 3 to 1 spread between the two.  (link)

FINDING #3 – AM/FM STILL DOMINANT IN CAR . . . BUT:    With over 8 out of 10 Persons 12+ still tuning in to broadcast radio in the car each month there’s no doubt that terrestrial radio is still king of the road.  But we’re starting to see the beginnings of a perceptible shift.  If you look at AM/FM and CD listening (both incumbent formats of in-car listening), you’ll see a 2% and 4% YoY drop respectively.  In reverse Owned Digital Music and Online Radio listening are up 7% and 4%.  I know these don’t seem like huge moves, but 4-5% can add up quickly over just 5 to 10 years.  And when (not if) broadcast radio losses its monopoly in the car you’ll see radio as we know it fall apart.  (link)

Hope this was helpful.  Have a great Friday (and weekend) everyone!

DIGITAL TRACKING OF TERRESTRIAL RADIO LISTENING?:  I’m fairly confident I’m the only actual reader of the RadioWorld blog, so I feel compelled to dutifully report when anything breaks there.  This morning they’re featuring an article about NextRadio’s new measurement reporting tool called The Dial Report (not to be confused with Edison Research’s Infinite Dial Report).  The Dial Report is actually a dashboard which can show audience data about who’s exposed to ads from broadcast radio stations on a smartphone.  I’ll give NextRadio credit for the concept – measuring actual listening without relying on Nielsen’s feeble PPM system is a breakthrough.  But there’s a huge delta between theory and practice here.  In order for the Dial Report to capture terrestrial radio audience data the listener must (1) own an Android phone which (2) has an FM Chip installed and (3) has a Device ID which can be matched to a third party’s data about that same Device ID in order to know who’s using the phone in the first place.  Did you get all of that?  My guess is the scale for this is so small that the data isn’t usable.  But it’s still an interesting concept to be aware of as broadcasters inch (and I mean inch) closer having actual audience data.  (link)

DID TOO MUCH BRANDING KILL HILLARY?:  Vox is out with a fascinating analysis of the type of ad messages run, beyond just dollars spent, for the 2016 Presidential Campaign.  Of all the stats they’ve pulled the most startling is that 75% of Hillary Clinton’s TV ads were personality based (either pro-Clinton or anti-Trump), and only 25% of the ads were issue-based.  This is the lowest percentage devoted to issues since as far back as they can do this analysis in 2000.  So did too much general branding and not enough lower funnel call to action ads hurt Hillary?  It’s worth thinking about not only for future political campaigns, but also other ad categories.  The best marketing plans usually include a well-balanced combination of upper funnel branding and price/item call to action ads.  A painful lesson learned by the Clinton campaign to be sure.  (link)

THE IMPORTANCE OF SERVANT LEADERSHIP:  If you’re currently a people manager, or are aspiring to become one, this may be one of the most important articles you’ll ever read.  It involves the concept of “Servant Leadership” which I have become a disciple of during my 20 years as a team leader.  In a nut shell Servant Leadership inverts the manager, who usually resides at the top point of a org pyramid, by literally rotating the pyramid 180 degrees.  This puts the point at the bottom, which requires the manager to support the whole team from below instead of delegating down on them.  The following Inc.com article not only explains the importance of doing this as a contemporary manager, it also provides five actionable tips to help you get there.  Of all the suggestions #5 is my favorite.  Managers become leaders only when they walk the walk.  Add value to your team by getting in the trenches to do the work with them and teaching by example.  Print this one and commit to reading once a month – it’ll keep your management game honest and make you a true leader of people!  (link)

Have a great Thursday guys!

ADS AS CONTENT:  I think it’s fair to say 99.99% of visitors to any digital publisher are going there for content and not the ads.  In fact, the challenge for consumers is often to navigate around the ads to get what they came for.  That’s how the marketing concepts of Native Advertising, Embedded Content, and Value Exchange were born . . . ie: weave your brand message into the content and/or reward visitors for interacting with your ad by giving them more content.  But what if the script was flipped?  In other words what if the ads themselves performed the same duties of entertaining, informing or inspiring as the actual content does?  That’s the point made in the following AdWeek guest column article.  It’s important to note it was authored by Celtra CMO Alex Saric, who works for one of the leading rich media creative providers in the industry.  So yes, he has a business motivation to get clients to start thinking of ad creative as content.  But even that bias doesn’t diminish the importance of the point he’s making.  (link)

CONFESSIONS OF A MEDIA AUDITOR:  As you know the issue of digital traffic fraud is white hot in the industry right now.  There’s a growing client demand for publishers, networks, and agencies to be transparent about who ads are being served to and if they’re actually being seen.  The following Digiday article tackles this issues as part of their “Confessions” series.  They’ve anonymously interviewed an industry insider, in this case an actual third party media auditor, for an unfiltered view on what’s really happening around the topic of ad fraud.  It’s a fairly insightful piece, especially on the issue of poor third party source traffic creating a shit in/shit out environment.  And yes, I even appreciate the ominous grey-on-black Mr. Robot style head shot which sets the tone for the piece.  J  Solid read!  (link)

IS IT NATURE OR NURTURE? . . . TECH STYLE:  Finally today I’d like to leave you with an interesting question to ponder.  As a father of four high school/college aged children it feels like I’m constantly stroking tuition checks.  So naturally I ask myself is the college degree worth the expense or do “born with” skills matter more?  In the tech world there are several famous examples of true innovators (and now billionaires) who never finished a four-year degree – think Steve Jobs and Mark Zuckerberg to name a few.  So does creative genius need to be cultivated on a college campus or can it just happen with the right combination of ambition, creativity and resources?  Six years ago Paypal founder and serial entrepreneur Peter Thiel thought the answer was no, and he put his money where his theory was by creating Thiel Fellowships.   Recipients, called “Thiel Scholars”, are paid $100,000 over two years to drop out of college and create a Silicon Valley startup.  Mr. Thiel has funded dozens of these Fellowships since 2011, giving us the perfect test lab to answer the question about how essential a college degree is.  Business Insider features several of these stories in a “where are they now” style article.  Admittedly some of the Thiel Scholars they didn’t follow weren’t as successful, but the estimated success rate over the six years is about 50%.  A fairly impressive number and some amazing success stories to be sure. (link)

Have a great Wednesday guys!

DIGITAL DETHRONING KING TELEVISION: Digital has come to the television medium, and there’s little doubt that traditional TV is at a crossroads. For evidence of this check out the cause-and-effect occurring in this pair of AdAge articles. The first Cause . . . (link1) highlights the continued decline of the big four networks’ ratings. Over the last five years ABC/CBS/NBC/Fox have lost over a third of their ratings, and the viewership decline seems to be accelerating. Now the Effect . . . (link2) delves into NBCUniversal’s decision to invest $500M in Snap during last week’s IPO. This is NBC’s attempt to diversify by purchasing an up and coming video distribution system primarily used by the under 35 crowd. Up until now the thinking has always been “content is king”, but as NBC and the other networks are discovering these days you also need to have a digital platform to distribute your content on.

AUDIO AD WATERMARKING: In an interesting audio ad tech advancement, Kantar Media has been selected by a media association (which includes the ANA and 4As) to establish a standard audio ad watermarking protocol for the industry. For those not familiar, audio watermarking is an inaudible sound included within a station’s signal which can be picked up by people meters (PPMs) but not heard by humans – sort of think of this as a tracking pixel for radio. Since Arbitron (now Nielsen) launched the PPM technology in 2006 broadcasters have encoded watermarking in stations to receive listening credit when a PPM device comes within earshot of their station’s signal. But watermarking has only been used to track overall station listening up until now. With this new protocol Kantar will eventually be able to track listening down to specific commercials via a unique Ad-ID. Could this be a step towards an era of “audibility” for the audio industry? (link)

STORM CLOUDS GATHERING AT CRS: For those of you with a country radio background you might be familiar with the CRS, which is radio’s annual Country Radio Seminar in Nashville. It’s a typical industry confab for radio and label execs to interact and tell themselves how great one another is. I know this first hand because I used to be on the agenda committee in charge of planning content for CRS’s of yesteryear. Normally this event doesn’t draw many headlines unless you work in country music. But this year was different. There was a palpable vibe at CRS that radio, the legacy audio medium, is under assault from all angles including smart phones, connected home speakers, and even the driverless cars of tomorrow. Billboard tagged along during the entire CRS and took copious notes for the rest of us – link below. Seems like sobering times for an industry that’s hitting an inflection point. (link)

TOP DIGITAL STATS FROM THE PAST WEEK: And just because I missed you guys, here’s a little extra content in the form of AdWeek’s Top Digital Stats from the past week. Since I have a full time job I haven’t taken the time to zoom in on the syrup in that Denny’s post to see the hidden image, but apparently over 100,000 people have. Enjoy! (link)

Have a great Tuesday guys!

*** A quick editor’s note to DG Nation that the staff will be out of the country on vacation, leaving today and returning on Monday. So the blogging will resume on Tuesday 3/7. ***

As a send-off I want to leave you with something a little different today. I normally try to stay away from political stuff on this blog, so don’t take this as my own political views or opinion of Brietbart.com. But there’s a really interesting example of consumer activism going on right now which I think is worth discussing.

THE ULTIMATE POWER OF THE CONSUMER ON DISPLAY: First, some background. Breitbart is a right-leaning digital publication which has recently caused controversy with its alt-right coverage of news stories. Most of Breitbart’s display inventory is brokered through ad networks, so you’ll often see large national advertisers running inventory on the site even without those brands directly purchasing inventory there. Last Fall one of these advertisers, Kellogg’s, received customer complaints about their ads running on Breitbart, which caused them to pull their campaign. This created a backlash as Breitbart “declared war” on Kellogg’s by asking it’s visitors to stop buying Kellogg’s products. This was an example of consumer activism generated by the publisher. Now we’re seeing an interesting development happen in reverse. A group called Sleeping Giants has created a Twitter page which allows individuals to post screen shots of other national advertisers who run network ads on Breitbart, as a way to shame those brands into pulling its ads. To date over 1,200 different advertisers have blacklisted Breitbart from its network buys due to Sleeping Giants’ pressure, creating one of the most memorable examples of consumer activism affecting brands’ marketing decisions. The following link explains what’s going on and also contains a sub-link to the Sleeping Giants Twitter page. Regardless of your politics, this is a fascinating example of the power play between a publisher and advertisers, and how the mighty consumer almost always has the final say in controversies like this. Fascinating stuff for all you wannabe sociologists out there!

http://www.independent.co.uk/news/world/americas/breitbart-advertising-deals-companies-advertising-withdraw-pull-steve-bannon-alt-right-campaign-a7599156.html

Have a great rest of the week – be back next Tuesday!