TOP 2016 DIGITAL TRENDS . . . ACCORDING TO A BROADCASTER:  First up today is a summary of the top digital trends of 2016, as seen by Inside Radio.  The source here is important since IR is owned by iHeart.  So most of the points listed are pro-radio and pro-iHeart.  With that said, it’s still a decent look into broadcasters’ talking points on where the industry is today and where it’s headed in 2017.  I happen to agree with the emphasis on in-car digital audio, digital video’s growing prominence, and the need for cross-platform delivery and measurement.  Only question becomes which media companies can best deliver on these narratives moving forward.  (link)

VIEWABILITY VS. EFFICACY:  Today’s guest columnist on AdExchanger is Scott Knoll, the CEO of Integral Ad Science (IAS), which is one of the primary viewability tagging vendors in the digital industry.  Mr. Knoll poses an interesting challenge to the notion that viewability automatically equals efficacy.  Right now clients and agencies alike are demanding threshold or 100% viewability guarantees as table stakes for digital video campaigns.  The thinking is simple – if the ad is viewed it automatically must have worked.  But there are so many other factors which go into the equation including; creative, ad relevancy, targeting accuracy, cost efficiency, and correct back end attribution.  With all of these elements in mind it sort of feels like viewability is the starting line to an effective campaign, and not the end-all-be-all finish line it’s currently being treated as.  Interesting read!  (link)

WHAT 10,000 HOURS LOOKS LIKE:  In his book The Outliers, author Malcolm Gladwell puts forth the theory that if you want to be absolute best in the world in a given field it requires a minimum of 10,000 hours of practice, which usually needs to occur in your childhood to teen years.  To save you from reading the entire book I’ve attached a link which summarizes some of Gladwell’s best examples of this theory in real life.  From the Beatles, to Bill Gates, to Wayne Gretzky, those who practiced way beyond the limits of others become the best of all time.  With that theory in mind take a look at the second link.  It’s a YouTube clip of a :90 Michael Phelps TV creative which was just named AdWeek’s 2016 Ad of the Year.  It gives you a pretty good idea of what 10,000 of practicing anything looks and feels like.  Enjoy!  (link1)  (link 2 – YouTube)

Have a great Monday guys!

ATTRIBUTION REFRESHER:  One of the more common blog questions I get is around the topic of Attribution.  What are the different methods of attribution, how are they calculated, and what are the pros/cons?  To help with this I’ve dug up the attached Digiday article, as part of their “WTF” series.  To sum it up there are three basic ways marketers can assign attribution – Single Point, Multi-Point and Weighted.  Single Point is the industry norm but the most primitive – think of assigning 100% of attribution credit to the publisher whose ad was clicked on.  Multi-Point tries to refine this by evenly dividing attribution credit amongst all the media outlets in the consumers’ journey.  This is more accurate than Single Point, but still sort of ham-handed.  The most accurate, but least developed, crediting model is Weighted attribution.  This model requires a weighting formula, which still really isn’t an exact science.  As the article notes, there’s a growing body of research around Weighted attribution, which means this will become the industry norm in the next few years.  Good topic to be versed in!  (link)

A MESS IN TV LAND:  A big negative just popped up against Nielsen’s effort to rollout out its Total Content Ratings (TCR) platform.  As a reminder, the goal of TCR is to create an apples to apples measurement standard across all forms of video consumption, including set top, DVR, VOD, etc..  This is badly needed for the industry with traditional TV ratings starting to plummet as consumers migrate to digital platforms for their video content.  Nielsen has been testing the technology all year, and slated April’17 as the timetable for full rollout.  But it turns out at least one TV network doesn’t think TCR is ready for prime time.  In a leaked email NBC’s head of Ad Sales, Linda Yaccarino, said TCR’s methodologies are flawed and the release could actually do more harm than good to the industry.  Ouchy!  AdWeek has a full summary of the kerfuffle in the following link.  (link)

NET NEUTRALITY UNDER FIRE?:  Finally this week I’d like to touch on a topic which could mean nothing or everything to our industry.  The issue is around what will happen with Net Neutrality under the new Trump administration.  For those not in the know, Net Neutrality is the current FCC protocol which creates a level playing field for all data bandwidth in the US.  Meaning every bit of information coming through the internet is distributed at the same speed.  Without Net Neutrality publishers or carriers could create high speed lanes which would deliver content faster, thus slowing all the other data which is not prioritized.  Just think of the Line Hopper passes at amusement parks, and you’ll get the idea.  Depending on where you are in the digital ecosystem, Net Neutrality is either a great or horrible thing.  But there’s one thing everyone can agree on.  Net Neutrality is the baby of current FCC Chair Tom Wheeler, and he’ll be resigning right after the inauguration.  To date Trump has made one Twitter post against Net Neutrality (presumably because it limits competition), but there’s been no formal position statement from the new administration.  More to come on this one, I’m sure.  (link)

Have a great Friday (and weekend) guys!

HBR’S TAKE ON THE MUSIC BIZ:  I thought this was a useful article from the Harvard Business Review about the effect downloads and then streaming have had on the music industry.  It’s pretty startling to see physical album sales (aka CDs) declining by 69% from 2000 to 2015.  What’s even more consequential to the industry is the unbundling of the classic album model.  Long gone are the days of buying a full 15-song album just to hear the one or two hits you really like, when you can either download a single song for 99 cents or here the same song via your choice of streaming services.  The consequences have been transformative on the music industry, and are generally favorable to consumers and artists who would never have broken through in the traditional label model.  In full disclosure one of the study authors is Craig McFadden, who runs Pandora’s music licensing team.  Great read!  (link)

DATA’S 3^RD GENERATION:  The next piece is a guest contributor article on AdExchanger about the evolution of marketing data.  The most interesting aspect of this piece to me is the author’s description of the three major waves of innovation in the world of data – POS, Web, and now Multiscreen.  With each successive generation comes additional capabilities for marketers, but also exponentially higher complexities.  As an example think of cookies used to track web users across several sites, and then try tracking that same individual using multiple devices going from app to app, in a cookie-less environment.  Remarkable to think of how far we’ve come, and also makes you wonder what’s next?!?  (link)

OCTOBER TRITON RATINGS:  Finally, yesterday Triton released its latest Webcast Metrics Ratings for October.  This was sort of an interesting month because overall AAS (Average Active Sessions) actually declined 1% from September.  Reminder that September was up 2% from August, which is a normal seasonal increase. But Triton usually sees continuous streaming growth from September through December.  So even a slight drop in October is weird.  Keep in mind that YoY the growth is still a healthy 10%, so nobody needs to press the panic button just yet.  Just worth keeping an eye on.  The usual historical graph is below.  (link)

Have a great Thursday guys!

FRAUD-A-PALOOZA:  If AdAge is right, 2016 may very well go down as the Year of Ad Fraud.  The root causes for this are so easy to see.  More and more money is surging into digital, and much of this new money is being purchased programmatically, which is much harder to track than IO’d business.  As a result fraudsters have seized on a golden opportunity to make money by using bots and unintentional human clicks to capture digital rev.  It’s sort of like the old saying by Billy the Kid . . . “I rob banks because that’s where the money is.”  Unfortunately for our industry the banks is this case are real clients with real marketing dollars which could have been used in a more productive way.  Hopefully AdAge is right about the MRC catching up to these challenges by implementing more stringent ad standards to start reducing this fraud.  (link)

IHEART’s DEBT SHELL GAME:  You know that I love a good iHeart debt fiasco story as much as the next guy.  So yesterday’s disclosure that they decided not to repay $57M in maturing debt to its parent company, Clear Channel Holdings, caught my attention.  Granted this is the business equivalent of not paying your parents back after they lent you money – so doesn’t really change iHeart’s balance sheet.  But the fact that they’re not making this scheduled payment on Thursday tells you something about their cash situation.  My guess is that iHeart will use more and more of these band-aid moves until they run out of gimmicks and eventually declare bankruptcy.  Radio Ink is covering this from two perspectives.  The first link is the story itself, and then a second link includes details on how Bob Pittman positioned this with his employees.  Looks like somebody has their tap dancing shoes on!  J (link1) (link2)

MEGAREGIONS 101:  Finally today, I’d like to share a concept and image which isn’t directly related to the media industry, but is important to understand if you work in any consumer facing industry in the US.  It’s around the concept of “megaregions”, which are geographically connected concentrations of population and economic activity.  In the early 1900s, when the theory first came about, there were five larger megaregions – think of the Eastern seaboard from Boston to DC as one of these.  As the population has grown they’ve been subdivided over and over, to the point that we now have 50ish primary and dozens of secondary MRs.  These generally fall along the lines of commute patterns created by the Eisenhower-era Interstate System and geographic features like Colorado’s front range going north-south and the mid-Atlantic’s Potomac estuary horseshoe.  An astounding 70% of the US population resides in a megaregion, and it’s the silent hand which has determined the selection of just about all brick and mortar locations for every industry since WWII.  Megaregions are one of the silent forces of nature which guide are industry.  So the just understanding them makes you a more well-rounded marketer.  (link)

Have a great Wednesday guys!

A VERY PROGRAMMATIC HOLIDAYS: It’s no surprise that programmatic ad spending is surging this holiday season.  AdWeek has done a nice job with the attached infographic, showing some emerging trends inside the numbers.  The most pronounced stat is the increase in PMP-based programmatic buying vs. open exchanges.  You can tell this by the YoY doubling of higher priced bids (classified as $4+ CPMs), because open exchanges rarely see CPMs above $1-2.  It’s also worth noting the +85% increase in Header Bidding, as clients bypass DoubleClick-style bidding and go publisher-direct.  It would be interesting to compare stats like this over the next 4-5 holiday seasons to see the direction and velocity of programmatic growth in our industry.  (link)

FIGHT FOR $15 . . . THEN WHAT?: If you live in NY, CA or Chicago you know the issue of a $15/hour minimum wage is hot right now.  Especially so for service sector jobs like those found in the QSR industry, since many of those employees work at or near minimum wage.  That’s why you see many “Fight For $15” protests at McDonald’s and other larger national chains.  Without taking either side of this issue Forbes looks at the possible unintended consequences of what could happen to QSR jobs if $15/hour becomes the normal labor cost.  (Note: While the article is useful, the video does a better job of laying out the repercussions.)  As you’re viewing this keep in mind some of the macro trends facing the restaurant industry right now.  2016 will be the first year that US QSR annual sales have declined after 5 straight years of growth.  This is partly due to the increasing delta between the average cost of eating at home vs. eating out, which makes eating out of home relatively more expensive every year.  This creates a tough paradox . . . employees can’t really live on the current minimum wages paid by the QSRs (especially in major markets where the cost of living is highest), and the QSRs can’t pay more for labor and still be competitive against other meal options.  Suddenly I’m not very hungry . . . (link)

DIGITAL VIDEO TUG OF WAR: Finally today, I’ve spent a ton of time on this blog discussing the competing business models of free ad supported streaming vs. non-ad subscription streaming in the digital audio space.  It turns out the same conflict is happening on the digital video side, and eMarketer has done a nice job laying out the current landscape.  Right now viewer preferences towards digital video is pretty evenly split (53/47) between subscription services like Hulu and Vimeo and YouTube as the dominant ad supported platform.  It feels like these services are compelled to pick one lane or the other – Hulu had tried to do a “freemium” service for years with some elements of each, but recently abandon the ad supported route for a total subscription platform.  Not sure if this market will end up being a direct mirror of what’s happening in the audio space, but it’s good to be aware of our surroundings.  (link)

Have a great Tuesday guys!

MEDIA LESSONS FROM THE ELECTION:  Over the last 30 days Pandora’s Political team has unpacked the trends and results from this past Election cycle, and summarized their findings in the attached blog post.  The overarching learning is that the shotgun approach of TV advertising no longer works the way it used to.  Instead candidates must rely on a more fluid mix of digital, with an emphasis on mobile, digital video and digital audio.  That last insight about over-targeting to the point of hurting scale is also worth noting.  As I’ve said before, the media lessons learned in Presidential Election cycles often work their way into the rest of the industry over the ensuing four years.  It happened in ’08 and ’12, and the smart money says that same thing will happen with ’16.  (link)

NIELSEN’S HOUSE OF CARDS:  If you sell digital audio you’ll often end up in a competitive pitch against broadcast radio because you’re trying to take ad revenue they’ve traditionally claimed.  And you’ll invariably be asked to defend your “numbers”, either Triton’s Webcast Metrics Ratings or you own internal audience data.  In these moments you’ll be compared to Nielsen’s radio ratings as if they’re the gold standard you can’t possibly sell audio without.  To help combat this Inside Radio has conveniently gift wrapped every problem with Nielsen into one article that you might as well print and hang next to your computer.  There are so many problems with Nieslen’s sample size, legacy diary markets, encoding technology, and lack of MRC accreditation in most markets, that it actually becomes tedious to read this one.  And to make matters worse, broadcasters feel like they can only provide this feedback upon the condition of anonymity, as if Nielsen is some sort of advertising mafia that will break your legs if you say something bad about them, no matter how truthful it is.  Seems like a really great setup to provide reliable ratings for the broadcast industry and their clients.  J   (link)

GOING THREE FOR THREE:  This last one has been making the rounds on LinkedIn for a while.  It’s actually from Jeff Weiner, the CEO of LinkedIn, so he seems like a fairly successful guy to take career advice from.J  I think the diagram below is spot on – it really takes a combination of these ingredients to go from good to great in most professions.  So many times you’ll see coworkers and business associates possess two of the three elements, which can get you pretty far in business.  But possessing all three qualities is a rarity, which makes it something special.  Mr. Weiner goes into detail on his interpretation of each bucket in the attached post.  Great reading for a Monday morning as you think about how to approach your own work week!  (link)

Have a great Monday guys!

FAKE NEWS, REAL AD DOLLARS:  There’s been a ton of press since the election around the controversy of fake news stories intentionally making their way into online portals.  Beyond just the issue of disinformation influencing people’s opinions, there’s a very real problem of marketers having their ads placed next to these stories.  This ends up wasting ad budgets and can also make the brand look bad by appearing to sponsor this garbage.  Most of these ad placements occur through programmatic ad networks, because there’s no way to “truth filter” out the fake stories and only run next to legit articles.  As a result you end up with example like this.  I’m guessing Ram didn’t intentionally sponsor coverage of the Yoko Ono/Hillary Clinton affair.  J  (link)

ZERO SUMMING OUT TWITTER:  Twitter’s challenges of stalled user growth and flattened ad revenue are well documented, but you rarely hear about this trend from the perspective of the social media publishers.  The following Digiday article lays out a provocative theory that social is effectively a zero sum game in the US right now – meaning there are very few new social users, just migrators from one platform (Twitter) to another platform (Facebook).  And just as users are migrating over to FB from Twitter, the content publishers are doing the same thing.  The result is sort of a death spiral, where fewer users go to Twitter and see less original content.  Not exactly a bright and sunny forecast for Tweet Nation.  (link)

MAPPING YOUR SALES APPROACH:  Finally today, I wanted to share an interesting matrix on the profiles and roles of the various types of salespeople in our profession. This was generated by Korn Ferry, which is a global people management consultancy.  I’m sure you’ve seen these types of 4-quandrant matrixes before and maybe even used a self-assessment tool to figure out where you fit.  It’s always good to recheck the professional oil from time to time.  So where do you sit today and where are you aspiring to be tomorrow?  Here’s a tip . . . . transactional = bad, and consultative = good.

Have a great Friday (and weekend) everyone!

THE SUM OF ALL FORECASTS:  Business Insider has done a nice job of compiling three of the leading media forecasts into one summary article.  None of the predictions are too shocking . . . digital growing to $100B driven by mobile, TV revenue migrating to OLV, desktop internet being cannibalized by mobile, etc..  Keep in mind as you’re reading this the “Radio” slice of the pie is for terrestrial only – still flatlining at 6%, and Digital Audio is being split across Desktop Internet and Mobile Internet.  Definitely worth the read!  (link)

PREMIUM POWER:  As you know by now, on Tuesday night Pandora announced details of its upcoming on-demand platform called Pandora Premium.  Given that Pandora’s core offering is a free ad-supported model, this new tier will help complete the full spectrum of delivery options so listeners can enjoy their music however they prefer.  To give you a snapshot of yesterday’s press coverage I’ve included an article from Engadget – this one’s more of a product overview. The second link is from RAIN to give the streaming trades perspective.  Both reviews are thorough and overwhelmingly positive, which bodes well for the new service.  (link1)   (link2)

DON’T SLEEP ON APPLE:  Speaking of subscription streaming, yesterday Apple gave an update of its Apple Music audience growth.  Apple says it’s now up to 20M subs (that’s a worldwide #), which is a 5M increase in the last six months.  By comparison, Spotify is sitting at 40M WW subs.  Obviously both companies will be carefully watching what happens to their audience base once Pandora Premium is fully rolled out.  (link)

Have a great Thursday guys!

THE FUTURE OF RETAIL IS NOW:  Everyone in our industry acknowledges the impact Amazon has had on the Retail category.  They changed the game by making online purchases with home delivery as acceptable as brick & mortar retail.  Now Amazon is planning to take things a step further with the launch of Amazon Go, which will completely eliminate the in store checkout process.  The long term vision is consumers picking products off the shelf and literally walking out of the store shoplifting style, but still paying for their purchases using a combination of RFID and Beacon technologies.  Picture elaborate digital readers being placed at the store exits picking up sensor tags on every product in order to tally what’s been bought and then billing the consumer through a pre-established account.  This concept isn’t some way off in the future Jetson’s thing . . . it’s being beta tested right now at a concept store in Seattle.  Get ready for this technology to change the way all of us shop in the near future!  (link)

YOUTUBE PAYS UP:  Over the past few months there’s been a steady stream of complaints from artists and labels that YouTube isn’t paying its fair share in royalty payments for music which runs on the site.  Yesterday YouTube fired back with the disclosure that it’s paid $1B in royalties over the past year, which puts it near the top of the global royalty payment list.  YouTube’s actual payment model is a little convoluted and hard to understand – in simplest terms think of a rev share for ads that run on artist pages.  So maybe there’s more of a communication gap between the parties than the “value gap” the music industry is claiming?  Regardless, a billion dollars in payments is a heck of a lot of zeros back to the industry.  (link)

MORE VINYL THAN DOWNLOADS . . . YIKES!:  Finally today, here’s a striking anecdotal stat on the state of music downloads.  During 2016 vinyl album sales in the UK doubled and have now surpassed digital downloads, which fell by 50% YoY.  I know this stat is just for England, but it tells the story of complete abandonment of downloads, a music delivery system which was the hot new thing just 6-7 years ago.  The reason for this decline, of course, is the rise of streaming which allows listeners to effectively rent the music they’re listening to instead of making the full purchase.  I haven’t seen the 2016 US download sales stats yet, but I’m sure the story is similar on this side of the pond.  (link)

Have a great Wednesday guys!

THE VIABILITY OF “PLUS”:  Now that Pandora and iHeart have announced details of their on-demand platforms, featuring a mid-tier or “light” option at $4.99/mo, industry experts are trying to make predictions on how successful the Plus options will be compared to the full $10/mo plans.  RAIN is featuring one consultant’s study of the iHeart audience, with the prediction that roughly 4M listeners will eventually subscribe to iHeart’s All Access Plus.  Admittedly the math seems a little caveman, and consumers will always express purchase intent at higher levels before they’re forced to whip out their CCs, but low to mid seven figures does seem plausible.  It’ll be interesting to look back a year from now and see where this number ends up.  (link)

TV’S TAKE ON TV:  UBS is holding a 2-day investor conference this week around the topic of linear and digital TV.  The following AdWeek article is a summation of content from streamers like Netflix and old-line broadcasters like CBS.  Keep in mind as you’re reading this that the #1 goal of these execs it to make their company strategies look as strong as possible to the investors in the room, so expect some sugar coating.  With that said, it’s still interesting to compare digital streamers’ expansion strategy to broadcasters’ plan to find more ways to charge for existing content.  At both ends of the industry you can tell that there’s massive change afoot in TV land. (link)

MEDIA’S TIPPING POINT:  As 2016 winds down we’re started to see forecasts about the 2017 ad market.  Magna Global and Zenith are both calling for digital spending to surpass TV globally in 2017.  As you may recall digital is now outbilling TV in the US, and is poised to surpass TV globally next year.  Mobile is the primary driver if digital growth making up 45% of total digital revenue in 2017, and is expected to comprise an amazing 72% of digital rev within the next five years!  Traditional media will lose two major revenue drivers from 2016’s Olympics and Pres Election, so expect digital to fill the vacuum in what experts are calling a “tipping point year” for our industry.  Should be an interesting ride!  (link)

Have a great Tuesday guys!