SPOTIFY CUTTING ITS VIDEO LOSSES:  These days it seems like just about every publisher is finding success with some form of online video.  Everyone that is, except for Spotify, who has struggled to gain audience or develop a video monetization strategy.  For a refresher in 2015 Spotify launched an original content video strategy in an attempt to run an “all things streaming” play.  But last month Spotify’s head of Video Strategy Tom Calderone resigned, and now there are signs of a product retreat.  According to RAIN in the attached link, Spotify has already cancelled an original video content series with Bloomberg.  Spotify is saying this reboot is part of an effort to find a monetization strategy that doesn’t involve recorded music and royalty payments.  Not sure if the “reboot” means they’ll be launching different video products, or if they’re trying to quietly kill on-platform video altogether.  Either way this example proves the business adage that it’s sometime better to stick to what you’re good at and not risk spreading yourself too thin by trying to be all things to all people.

WALMART’S COPYCAT DIGITAL MEDIA SALES PLAY:  Yesterday I posted an article about Amazon’s growing digital media business (here).  Now comes word that Walmart is trying to run a similar play, as described in the attached Digiday link.  Their concept is called Audience Extension, which is designed to aggregate purchase behavior on Walmart.com and its subsidiary retail brands, and then retarget those consumers with contextually relevant third party ads on-platform.  Walmart’s secret sauce lies within WMX, its propriety DMP.  You can see the how the purchase path UX works in the flowchart below.  Admittedly Walmart is pretty far behind Amazon in the retailer-turned-ad-platform game.  But they might be able to catch up by leveraging the power of its 5,000+ store B&M footprint to deliver online purchases better than even Amazon can.  And BTW – if you’re in digital media sales get ready for a whole bunch on new competitors setting up shop on your block!

THE FUTURE BELONGS TO VOICE:  If you think the current Amazon Echo craze is the end all be all of voice-based tech innovation get ready, because we’re only in the top of the first inning in the Age of Voice.  According to an Accenture study in the attached AdWeek link we’re about to see a global surge in voice-based digital assistants that can only be compared to the smartphone revolution from a decade ago.  In the graphic below you’ll see some jaw dropping stats – including the prediction that there will be 7.5B voice assistants in use around the world by 2021, which is more than today’s entire global population.  There are too many stats in the inforgraphic for me to summarize so check out the article for yourself.  And then get ready to ride the Voice revolution!

Have a great Tuesday guys!

AMAZON KICKS AD SALES INTO OVERDRIVE:  Are we about to have a three-horse race in the top tier of Digital media sales?  Based on Amazon’s ad sales surge in its latest earnings call the answer is probably a firm yes.  On Friday Amazon reported its “Other” revenue (which is mostly ad sales), grew by 58% to $1.1B.  To put that number in perspective the current leaders are Google who raked in $24B in Q3, and Facebook whose latest Q2 tally was $9B.  By comparison to the duopoly Amazon is still relatively small, but then again it’s just getting started.  Their secret sauce is a mountain of purchase-based data, which they can use to behaviorally retarget today’s purchasers and model out to serve contextually relevant ads to similar users who might be interested in that same product.  Combine those assets with a proprietary DSP which features a self-service API, and you can see why their digital ad offerings are being well received in the market.  I’d expect more of the same in future quarters.

SHORT FORM “DOUBLE BOX” TV ADS ARE READY FOR PRIME TIME:  We’re starting to see an interesting transformation with the standard Network TV ad unit.  Instead of just running :15s and :30s the networks have been experimenting with :06 ads which were originally created for OLV.  To make things more interesting these ads are being served in a Double Box format (image below) for sports broadcasts, which show a live shot of the game on the left and the ad on the right.  The thinking is that viewers won’t tune out if the ad runs concurrent to the game, so they’re more likely to be paid attention to.  And since it would be really hard to play an entire :30 ad during live sports the :06 option becomes the perfect solution.  As noted in the attached AdAge article, Fox has been the most aggressive network with this new unit.  What began as an experiment during this summer’s Teen Choice Awards has expanded to MLB postseason, and is now being planned for Thanksgiving NFL games.  I wouldn’t be surprised to see this become a normal ad unit across more of the networks.

THE DEMISE OF SNAPCHAT SPECTACLES:   Remember back to early 2016 when rumors of a new wearable tech called Snapchat Spectacles started to surface?  These babies were going to succeed in a way Google Glass couldn’t because they’d link Snapchat’s in-app Lens functionality to the real world and open up a whole new augmented reality (AR) universe for its users.  Snapchat’s PR machine teed up a ton of pre-launch buzz, and the geekarazzi was foaming at the mouth to get their hands on a pair.  Then a little called reality set in, and what happened next wasn’t pretty.  As featured in the attached Tech Crunch link, Snapchat Spectacles were plagued by a five month launch delay, poor manufacturing quality, a lack of AR content, and a “shockingly low retention rate” in which three out of four owners stopped using their Spectacles within the first week.  So nobody bought these things.  And I mean nobody.  At last count over 99% of Snapchat Spectacles haven’t been sold and are wasting away on warehouse shelves.  This goes to show how a hot new idea doesn’t just sell itself.  You have to back up the buzz with a useful product people will actually derive value from.

Have a great Monday guys!

AMAZON BRINGS VIDEO ON-PLATFORM:  In a smart flanking move Amazon is aiming to disrupt YouTube (Google) and Facebook’s booming video ad business by including video content within their platform.  As described in the attached Bloomberg link, Amazon is launching a new program called Enhanced Brand Content.  Within the platform brands will be able to upload sponsored :30 video content next to the usual product descriptions and static display images at a discounted rate.  This has the potential to really work for brands, since they’ll be able to place their best content in front of purchase intenders just as they’re ready to hit the buy button.  I’m guessing Amazon will see an immediate spike in OLV biz as this program roles out.  Then it will be interesting to see if this comes directly out of Goo-FBoo’s video rev pocket.

TURNAROUND AT TWITTER?:  During yesterday’s Q3 Earnings Call Twitter showed some signs that a turnaround may be on the horizon, as reported in the attached AdWeek link.  MAUs were up a little at +4M vs Q2.  And although revenue noticeably declined by 8% YoY, it still topped the Street’s expectations.  The key stat in their recovery has been ad engagements, which soared 99% vs. 2016.  This is due to a strategic pivot Twitter made from display to video.  With video Twitter appears to have figured out how to natively integrate advertising into the user experience.  Things look promising enough that Twitter raised its Q4 guidance to the point that they may actually be profitable in Q4.  That would be quite at 180 turnaround from the position they were in just a few quarters ago.

AND THEN THERE’S IHEART:  On the other side of the financial universe iHeart continues its struggle for survival against a $20B+ mountain of debt.  As reported in the attached RadioInk link, iHeart and its creditors still haven’t reached a deal to keep the broadcaster afloat.  Their senior debt holders want the company to organize its holdings for a “prepacked bankruptcy” (sounds scary), while iHeart is scrambling for alternatives.  Time will ultimately be on the creditors’ side in this tug of war.  While only $700M of iHeart’s debt comes due in 2018, a staggering $7B must be paid back in 2019.  Obviously iHeart won’t be able to make that debt payment (most third world countries couldn’t make that payment), which means they’ll default and go into bankruptcy unless an alternative agreement can be reached before then.  Sounds like a fun spot to be in, right?

Have a great Friday (and weekend) guys!

THE AGENCY-CONSULTANCY LINES ARE BLURRING:  There’s a really interesting transformation occurring in the agency-scape thanks to the intrusion of business consultancies like Accenture, PwC, etc..  In a nutshell the consultants are starting offer media planning as an add-on service, and are effectively winning AOR-type work which used to be set aside for traditional agencies.  Beyond just an efficiency play there’s a preconceived notion that the consultancies are somehow better at business strategy, so they must be better at marketing.  The sentiment in perfectly explained in the attached Digiday link, with the quote . .  “Hold on, this guy is from Accenture; it has to be brilliant.”  So what are the agencies doing to counter this threat?  As noted in the attached AdExchanger link, all four agency HCs are jockeying to provide consultancy-type services, which could effectively flip the script on the consultants.  I don’t think there will be a clear winner or loser in this tug of war.  Instead the line between business consulting and media agency work will become more blurred, and we’ll start to see hybrid organizations emerge – like the Publicis.Sapient example in the AdExchanger piece.  No matter how this plays out the transformation will be fascinating to watch.

IMPRESSIVE GROWTH AGAINST SOME HEADWINDS:  During yesterday’s Q3 Earnings Call SiriusXM announced that it grew their quarterly ad revenue 8% YoY, as reported in the attached RadioInk article.  This is impressive for two reasons . First, Sirius usually competes for broadcast radio dollars instead of digital budgets.  As you know Radio is having another flat-to-down year, so to go +8% in that sector is an accomplishment.  The other impressive stat is that Sirius continues to grow its subscriber base, which self-generates additional ad inventory, despite the fact that US Auto sales are down significantly YTD.  For years satellite radio has relied on free trials in new cars as the feeder system for paid subs.  In Q3 Sirius reported over 300K new self-paying subscribers despite a declining auto market, which is a testament to the strength of their subscription offer.

PUTTING “GUARANTEE” LIPSTICK ON A PIG:  In its latest attempt to legitimize Radio’s ROI, Westwood One is teaming up with Nielsen to launch a new initiative called the Westwood One Guarantee Program, as described in the attached AdWeek link.  According to the article, ”Nielsen will measure return on advertising spend on behalf of the radio campaign”, but offers no details on how this will be accomplished.  The reason there are no details is because it’s impossible to determine if a specific listener heard a radio ad and then made a purchase from the advertiser.  That’s because broadcast radio doesn’t have logged in users.  So they’ll have to use Nielsen’s ratings “estimates” to model out some correlation of the exposed audience to store traffic and/or register sell-thru.  It will be probabilistic at best, but that won’t stop WW1 or the Broadcasters from positioning this as an iron clad guarantee to gullible advertisers.  I don’t know who I feel more sorry for with this one – clients who are sleeping soundly at night on the false belief that their Radio advertising is guaranteed, or the WW1 sellers who can’t sleep at night because they’re peddling this garbage.

Sorry for the rant first thing in the morning.  Have a great Wednesday guys!

COULD OPEN ARCHITECTURE KILL THE AOR?:  Driven by market demand ad agencies are increasingly being forced into Open Architecture relationships with clients, instead of the traditional AOR model.  Open Architecture is when clients can contract agencies on a project-by-project basis, usually piecing together work from several agencies simultaneously.  Of course there’s a huge downside to this for agencies since the workload and billing becomes much choppier compared to steady AOR relationships.  For brands Open Architecture is a way to make agency costs variable instead of fixed, which allows them to save money by simply eliminating projects or switching to lower cost options as needed.  This trend is starting to take its toll on agency bottom lines, as was the case with IPG in their Q3 Earnings Call – AdExchanger has the details in the attached link.  My guess is that we’ll see a trend of more earnings call misses from the agencies thanks to Open Architecture .

SNAP COMES BACK DOWN TO EARTH:  As the realities of flattening user growth and the demands of running a profitable business set in at Snap the belt tightening begins.  As reported in the attached Business Insider link, last week Snap announced it was laying off 18 employees – but that’s not too unusual in the digital media space.  What is notable is where the layoffs came from . . . Recruiting.  It doesn’t take a brain surgeon to figure out that if you lay off recruiters you’re not planning a major new hiring push.  The other interesting comment involves individuals’ performance.  According to Snap CEO Evan Spiegel, the company will hire at a “slower rate” in 2018 and that leaders will be asked to make “hard decisions” about their teams and employees who aren’t performing well.  When you consider that Snap’s payroll ballooned from 600 employees in Q4’15 to over 2,600 employees just two years later, you have to wonder how it’s even possible to know who’s performing well and who isn’t.  Both of these are indicators of a digital publisher who’s girding for challenging times ahead.  You have to wonder if this is just a stabilization move for their business or if it’s the first perceptible sign of a decline at Snap.  Only time will tell.

BY GIVING UP ON DONUTS DID DUNKIN’ JUST LOSE THE COFFEE WAR?:  There’s a crazy interesting business case study unfolding before our eyes in the Coffee/Breakfast space.  As described in the attached Inc.com article, Dunkin’ Donuts is in the midst of a brand transformation. They’re trying to become cooler in an attempt to counterpunch against Starbucks who now dominates the Coffee sector of QSR.  First Dunkin’ dropped “Donuts” from its name, based on the logic that the word implies and unhealthy and/or old fashioned lifestyle.  Now it’s cutting back on the variety of Donuts being offered in favor of a more well-rounded menu.  While adding a breakfast warp to the menu isn’t necessarily a bad thing for Dunkin’, the net effect of eliminating Donuts from the brand positioning could be a bigger problem since it’s intrinsic to their brand identity.  By chasing Starbucks in the cool/hipster/healthy swim lane, instead of just dominating a niche they already own, Dunkin’ is making a classic Marketing 101 mistake.  They’re letting Starbucks define who they are instead of just doing their own thing well.  The long-term result of this pivot could be to water down a once proud brand in the wake of a stronger competitor.

Have a great Wednesday guys!

COULD SPOTIFY HAVE AN AMAZON PROBLEM?:  When we think about the Streaming landscape the conversation usually starts with the big two – Pandora and Spotify.  But these companies run very different businesses.  Pandora is the only streamer who’s primarily focused on free ad-supported listening, while Spotify plays in a much more crowded subscription sandbox.  And as it turns out, there’s a new kid on the subscription side who’s starting to throw some sand at Spotify.  That streamer, of course, is Amazon.  As highlighted in the attached Midia Research link and in the graphic below, Amazon has steadily been gaining subscribers – up to 16M worldwide compared to Spotify’s 58M and Apple’s 28M.  The key growth drivers for Amazon subs are their Amazon Prime subscriptions which includes Amazon Music in the bundle, and their Echo platform which features Amazon Music as the default music service.  Given Amazon’s momentum you have to wonder if Spotify’s subscription-centric strategy is making them vulnerable to a much bigger company who’s doing pretty much the same thing, but with a home court advantage within its own ecosystem.  Keep an eye on this one.

THE CURIOUS IMBALANCE BETWEEN SPORTS AND MUSIC MARKETING:  There’s no doubt that Sports and Music are two of the biggest passion points in our society.  We spend so much time and energy on these two pastimes that they’re the ideal place for brands to market themselves.  But would it surprise you to learn that marketers spend 10x on Sports sponsorships as they do on Music initiatives?  According to the attached Marketing Dive link brands spend over $16B annually to sponsor teams, leagues and players, but only $1.5B on artists and concerts/festivals.  So why the imbalance?  The main reason is that Sports are centralized.  Meaning there are very distinct leagues, conferences, teams and big moment events (think Olympics, Word Cup, Super Bowl, etc.), which are easy for brands to plan for and buy in to.  By contrast, Music is more decentralized with randomly timed album releases, concerts, etc., which are harder to make into tent poles of a marketing plan.  Granted there are annual festivals like Lollapalooza and Coachella, and award shows like the Grammy’s and CMAs.  But these are a drop in the bucket compared to daily onslaught of sporting events.  This disparity could represent a true gap opportunity for brands who can zig into Music related sponsorships while the rest of their competitors are still zagging with Sports.

HAVING FUN WITH GDPR:  Finally today, you know I love a good Programmatic cartoon as much as anyone (weird, I know), so this one from AdExchanger caught my eye.  It speaks to the new GDPR regulations which are about to be implemented in the European Union, and the problems this will create for marketers, publishers, networks, and AdTechers.  (If you’re asking “WTF is GDPR and could it happen here?” right now, check out my DG blog post from a few weeks ago for an explanation.)  My only question on this issue . . . wasn’t all this technology supposed to make it easier to do our jobs?!?

Have a great Tuesday guys!

BILLBOARD BOWS TO STREAMING, REWEIGHTS CHARTS:  Currently Billboard treats the chart weighting of all “streaming” plays the same, no matter if its subscription-based audio, free ad-supported audio or free ad-supported video.  The problem with this cookie cutter approach is that listeners consume music differently across the tiers which can skew the charts.  The most glaring example of this is how younger listeners rip through just the beginnings of songs on YouTube (which count as a play every time), and/or play the same song over and over.   Because of this behavior YouTube ends up with a disproportionately higher effect on the Billboard charts than it should.  To solve this problem Billboard has announced a change in the chart weighting formula which they’ll begin using in 2018.  The formula changes, which differ on the Billboard 200 and Hot 100 charts, are a little complicated – read the article if you really want to geek out.  Regardless of the math behind the formulas, rest assured that as Billboard throws more weight behind the streamers so too will the artists who’ll look to Pandora, Spotify, Apple, etc. to help break their next hit.

AUTONOMOUS DRIVING’S IMPACT ON AUTO INSURANCE BEGINS:  There’s an uncomfortable truth about the future of the auto insurance industry.  Once autonomous (self-driving) cars become the norm there will be significantly fewer crashes, thereby driving the cost to insure a car way down and shrinking the entire category.  Industry experts estimate the US auto insurance market could decrease by 40% within the next 25 years.  And the first sign of change is already here.  According to the attached Business Insider link, Liberty Mutual is the first insurer to offer a lower cost insurance plan for Tesla owners whose cars are equipped with Autopilot technology.  The program is simply called InsureMyTesla, and it features rates which are 20-30% lower than regular automobile insurance.  Down the road (sorry) you could even see insurers offer single price packages for vehicle insurance and maintenance combined.  Feels like some major disruption is on the way.

A LOOK INTO AUDIO’S CRYSTAL BALL:  Finally today, there’s been so much buzz over the last few months about the impact voice-enabled technology is having on marketing I thought it would be helpful to highlight the attached overview article from GeoMarketing.com.  It’s an interview-style piece with Pandora SVPs Susan Panico and Steven Kritzman covering a wide array of future-of-audio topics.  In it they discuss; 1) how connected home devices are driving a new surge in audio consumption, 2) how Voice is supplanting Touch as the next gen way we’re interacting with the tech around us, 3) how AM/FM’s monopoly of in-car listening is being frayed by new connected car streaming delivery, and 4) how this trend is already aging up into the primary buying demos most brands covet.  If you work in or around the audio space and believe it’s important to “skate to where the puck is going”, this is important stuff to understand.

Have a great Monday guys!

REGULATION IS COMING TO DIGITAL POLITICAL ADS:  For decades traditional media has been under a strict set of regulations which require transparency about who’s paying for candidate and issue based Political advertising.  It’s the reason why all TV and Radio ads have “paid for by friends of Joe Bag-of-Donuts” at the end of each ad.  But up until now there’s been no such requirement for digital ads.  However, thanks to the ongoing scandal involving Russian interference of our last election in which foreign operatives allegedly purchased Facebook, Twitter and Google ads to influence US voters, things are about to change.  As noted in the attached AdWeek Link a bipartisan group of Senators is preparing to introduce new legislation called the Honest Ads Act, which will require “paid for by” disclosures as well as other record keeping requirements for digital ads.  My guess is this will sail through Congress, because it’s hard for any lawmaker to argue against improved transparency in this area.

R.I.P. AUTOPLAY:  For years autoplay video ads have been the advertisers’ best friend and the users’ worst advertising nightmare.  As the name indicates these ads automatically play as you enter a site or click on content, so you can’t avoid them.  This makes for a wildly effective ad unit that’s also annoying as hell.  Recently users have become less tolerant of autoplay’s forced view, which is why video completion rates are down and ad blockers are on the rise.  Publishers are responding to this behavioral shift as noted in the attached Digiday link.  Autoplay video units are being replaced with value exchange-based ads in which the user voluntarily renders an ad in return for some benefit.  You’re also seeing more embedded rollover video ads which are also user spawned.   Overall this is a positive trend for both consumers and brands, since it eliminates the force feeding of annoying ads which end up making the advertiser look like the bad guy.

TECH-WHILE-DRIIVNG IS MORE DEADLY THAN YOU THINK:  For almost 30 years the driving-related fatality rate was steadily decreasing, mostly thanks to safer cars and a crackdown on drunk driving.  But as you can see in the image below, auto-related deaths rose 5% this past year and a compounded 14% over the last two years.  So what’s going on here?  The only real difference in how we drive today vs. just a few years ago is the use of digital technology while driving.  Texting is a huge problem.  And so is the ever-increasing array of in-car tech which takes our eyes from the road and puts them on the screen. What’s particularly alarming is the spike in deaths of motorcyclists, pedestrians, etc..  This indicates that drivers just aren’t paying attention to things around them the way they used to, and it’s a safe bet that smartphones are the reason why.  To make matters worse NHTSA doesn’t even know the true toll tech-distracted driving is having.  Take the tragic story at the beginning of the attached Bloomberg link for example.  The fatal accident described was clearly caused by a driver using their cell phone, yet it was classified as a generic accident.  Examples like this mean the affect connected devices are having on fatal accidents is actually being under reported.  This should be a wake up call for all of us.  It’s time to start taking distracted driving seriously, because its killing more of us than anyone realizes.

Please have a SAFE Friday (and weekend) guys!

THE “VOICE SHELF” COMES TO SEARCH:  In tomorrow’s Voiced-based environment the entire Search industry will be transformed.  Gone are the quaint days of being one of seven listings on the first page of a Google search.  Instead marketers will rely on voice recognition AI to respond to verbal searches we’ll be making.  In order to succeed in this new paradigm brands will need to solve for two things. The first is getting established as Voice Skill on platforms like Google, Amazon, etc..  Think of this as an embedded SDK which generates content called for by the search.  It’s literally the martini recipe Alexa responds with when somebody says “Hey Alexa, how do I make a vodka martini?”  The second must have is a high ranking on something called the Voice Shelf.  This is the order in which a voice-enabled digital assistant pulls content.  Staying with our vodka martini theme for a minute, if both Kettle One and Tito’s have a martini recipe Voice Skill, which one does Alexa respond with?  Since there isn’t any sponsorable content on voice platforms (yet), it’s sort of a Wild West situation of brands testing ways to get their Voice Skills first in line on the Voice Shelf.  Are you confused yet?  To help sort this out take a look at the attached AdAge article.  And is it still too early for a martini?!?

AMAZON PRIME IS A BRILLIANT LOSS LEADER:  For consumers Amazon Prime seems like a pretty straightforward proposition.  Pay $99/yr and get unlimited free shipping of Amazon purchases along with a host of other freebie benefits.  But since most users blow past $99 in shipping costs annually, how does Amazon make this profitable? As it turns out they don’t have to.  According to the attached BGR link, Prime members spend $1,300 in Amazon purchases, which is almost double the $700 non-Prime shoppers spend.  In other words AP is a loss leader which doesn’t need to make money by itself.  Its only purpose is to get users through the front door, because the profit made on $1,300 is the real game.  Someone once told me half-jokingly that sushi was invented by the soy bean farmers as a delivery mechanism for soy sauce.  Think about it – that could actually be true.  Following that analogy, AP is the sushi to all of our soy sauce purchases.

RIDING THE DISCOVERY DINOSAUR:  If I had a nickel for every time someone in Radio bragged that AM/FM is “still #1 in music discovery” I’d be writing this blog from my villa in Tuscany right now.  It’s not really a sellable metric, but Radio keeps beating the discovery drum as anecdotal evidence that they’re still relevant.  But times are changing.  In a new study by the research firm Integr8, in the attached RAIN link and in the graphic below, you can see how broadcast radio’s monopoly on music discovery is slipping with the younger demos.  In fact, Gen Z is just as likely to discover that next new song or artist on a Streamer or YouTube as they are on their local radio stations.  Can you imagine what this stat will look like once today’s teens age up into the primary advertising demos?  Again, this is really only a brag stat since I’ve never once sold the propensity to discover music in my 25 years of media sales.  But once Radio loses the discovery crown we won’t have to hear about this stat every time Nielsen releases a pro-Radio propaganda piece. Tick, tick, tick …

Have a great Thursday guys!

THE FCC CHAIR’S TEPID SUPPORT OF THE 1^ST AMENDMENT:  Remember all the way back to last week when President Trump inferred that NBC stations are risking having their broadcast licenses not renewed due to repeated “Fake News” reporting.  This set off a firestorm of 1^st Amendment defense because it was seen as an assault on freedom of the press.  This put the spotlight squarely on the FCC who’s in charge of broadcast licenses, and it’s Chairman Ajit Pai who was just appointed by Trump and confirmed by the Senate to a new term.  While fellow FCC Commissioners immediately rallied to the 1^st Amendment’s defense, Mr. Pai was silent for a week.  Then yesterday in a speech at George Mason University, Pai stated his support for freedom of the press as an apolitical principle which would not be swayed by political influence.  His comments were covered in the attached Inside Radio link.  The Chairman stopped short of announcing his disagreement with the President (and didn’t even mention Trump by name), but his comments were seen as lukewarm support for one of the most important liberties we enjoy in our country.  It’s a start, I guess.

END OF DAYS FOR AGENCY TRADING DESKS?:  Yesterday on their Q3 Earnings Call Omnicom CEO John Wren announced that its in-house trading desk, known as Accuen, was basically flat on revenue year over year.  More significantly, he also explained that the HC was beginning to transfer Accuen talent from the trading desk to individual client teams, as noted in the attached AdExchanger link.  This is happening because clients are less willing to allow agencies to place their business through non-transparent trading desks, which are basically stand-alone profit centers for the HCs.  And as the market demand shifts agencies must be agile enough to move resources.  Rest assured programmatic is still important to Omnicom and its clients.  But by embedding programmatic specialists in account teams they can still leverage the power of their data platform (known as Annalect), while providing the full transaction transparency their clients are demanding.  You may remember Publicis made a similar move when it disbanded their Vivaki trading desk in 2015 and spread that programmatic talent across the account teams.  It’s a sign of the times about where the industry’s programmatic business is headed.

THE POWER OF THE USP:  Finally today, let’s go all the way back to a lesson you would have learned during a freshman year marketing class about the power of Unique Selling Propositions.  USPs, as they’re known, are the key differentiators which separate a company from its competitors in the minds of its customer.  Inc.com published a fascinating look at how USPs work in the attached link.  Their assertion is that all USPs can be divided into one of three primary categories – Cost Leadership, Innovation, and Customer Intimacy.  Then they explain each through real companies who are leaders in their respective categories.  They referenced Southwest which goes the extra mile to control costs by using identical planes across their entire company.  And Google, who’s completely committed to bringing life changing innovation to market regardless of cost.  And Ritz Carlton Hotels, who knows enough about a given customer’s preferences to leave dark chocolate instead of milk chocolate on their pillow at night.  All of these are impressive examples of harnessing the power of a well-defined USP to create a competitive advantage and beat out the other guys.

Have a great Wednesday guys!