Category Archives: Video

Deep Dive – Inside Facebook and Snapchat’s battle to become ‘the new TV’…

This is my considered take on the story set to define multiple industries in 2017 – two enormous social platforms battling for the biggest prize in advertising, the $200 billion spent on TV each year.

If you like it, please share it, and if you have a comment to add to the discussion, please let me know

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Act 1 – The big blue monster smells blood…

Small changes in the language used by a brand can be very revealing if you look carefully and join dots.

And Facebook knows the importance of semantics better than anyone.

At launch, Facebook’s business platform emphasised the power of precision targeting, personalisation and cost effectiveness. Minimising ‘wastage’ was their USP, a counterpoint to the traditional mediums of print, radio and, of course, T.V.

Facebook Advertising 1.0 was about direct marketing and performed very well in direct response.

But across 2015 and 2016, the language began to change. Slowly at first, but then all of a sudden, Facebook started to emphasise its ability to generate broad, mass awareness. Advertisers were told that when buying ads, ‘optimising for reach’ gave the best bang for your buck. Language like ‘personalised marketing’ was replaced with a focus put on ‘scale’.

Why?

Because Facebook is money hungry and it spotted a huge opportunity.

Like a cocky young lion stalking an unsure middle aged zebra, it saw a chance to take an even bigger bite out of global ad spend as the TV/digital scales starts to balance up.

Brand versus direct

Direct marketing is focused at the bottom of the marketing funnel, and that’s great. But the problem with hyper-targeting is that in seeking out the perfect potential customer, advertisers risk ignoring the wider pool of possible customers.

Facebook realised that in focusing on precision, it was disregarding the need for brands to speak to a wide audience, to have cultural impact and to target vast swathes of people, just like T.V. allowed them to do.

So it made the strategic decision to change tact.

Brand advertising – making end users aware of your product in the first place, or just building affinity for your brand as an investment in some future payoff – is still as necessary as ever. Despite the targeting opportunities of digital, reaching lots of people with salient, noticeable advertising is still the best way for brands to win share.

Just ask Byron Sharp.

Sharp’s ‘How Brands Grow’ is one of the seminal marketing texts, and scientifically makes the case for brands needing to continuously reach all buyers of the category with salient assets.

One of the biggest ‘negative’ Facebook stories last year was P&G’s admission that they were scaling back on targeted advertising, and would refocus on much broader brand campaigns (but still invest the same amount in Facebook). Many saw this as a bad story for Facebook. But the more cynical among us saw it as a carefully orchestrated P.R. move that made advertisers sit up and see Facebook as a brand building, rather than a direct response option on their media plan.

Much of the brand advertising money on TV will eventually split and go somewhere. It’s not going to go to Google, who are kings of direct, so why not to Facebook, the other giant in the digital ad duopoly?

It’s certainly big enough – close to one-fifth of the world’s population checks Facebook daily, there are already more than 4 million active monthly advertisers using the platform and video makes up an increasingly important part of its business.

“The more they can make themselves like TV, it will certainly better position them for those ad dollars.” Kieley Taylor, GroupM

Brand advertising is more lucrative, often more beautiful and less intrusive than a lot of direct marketing. With Facebook’s core focus on user attention, not annoying people but still increasing ad load, trying to offer a platform for media spend that’s like T.V. but better makes sense.

Strategic moves

And they haven’t just talked the talk.

Almost every major strategic move that Facebook has announced over the last 12 months has a connection to grabbing a slice of the brand T.V. pie.

The launch of live video was the first indication. Facebook spent more than $50 million paying publishers and celebrities to create live content, and changed its algorithm to heavily prioritise it in the feed. It also spent heavily on an advertising campaign for Live, intriguingly paying for heavy T.V. ad break rotation to promote it.

But ‘Live’ hasn’t been the only addition in the effort to become more like, and ultimately usurp TV.

In 2016, Nichola Mendelsohn, the company’s VP for EMEA, said that she expected Facebook to be all-video within five years, echoing similar comments by company Zuckerberg.

Then, after creating a dedicated video tab for brands, Facebook made its latest big announcement early this year – mid-roll video advertising.

Just like TV advertising, these are video adverts that will interrupt users mid video.

The company has partnered with Nielsen, the entity most associated with TV ratings measurement and last week announced that it was also  ‘trying to give marketers a more accurate grasp of how ads on the social network compare to other media like television’ by creating  a new modelling tool that compares its ads to T.V.

And there’s more.

In the past week, Facebook has announced that it’s preparing an app for set-top TV boxes, a sort of Hulu/Netflix lite if we’re to believe the news. It will now rank longer videos with high completion rates more favourably in the newsfeed. And, like Netflix and Amazon, original programming is in the offing too. Facebook will look to licence TV-quality shows to be available on the app, and will look to current Facebook video publishers too. According to Kurt Wagner or Recode:

“As part of a larger effort led by Facebook exec Ricky Van Veen, Facebook is pushing publishers to create longer, premium video content. The hope is to get more high-quality video onto the platform and into your News Feed — the kind of stuff, presumably, you might find on Netflix.”

Oh, and Facebook has just this week signed an MTV executive to create original content.

To anyone smart enough to join the dots, the trend line seems obvious.

From a few small copy and language changes on their advertising platform in 2015, Facebook has grown to now offer mid-roll ads on long form content that’s shown on TV and measured in the same way traditional TV is measured. 

Facebook really wants its slice of that big tasty TV pie.

Act 2 – A new challenger arrives…

It’s not just Facebook that’s trying to make a dent in TV advertising.

Snapchat is positively gunning for it. Just like Facebook, Snapchat is stealing vast amounts of attention with its video heavy social app. In its IPO filing last week, boasted of 10 billion videos a day.

But unlike Facebook, which initially focused on targeting and personalisation, Snapchat is a platform that’s purpose built to take brand spend away from traditional ‘brand’ channels. It’s much closer to ‘TV designed for your phone’ than its big blue brother has ever been.

Mobile TV?

Snap is in a perfect position to create a “mobile TV” experience with a menu of programs designed for an attention-short, vertical-video-watching audience. Its UX is already set up in a ‘channels’ format, just like TV, and it doesn’t hurt that the app over indexes heavily in the 18-34 bracket, where TV viewership has been been falling at around 4 percent a year since 2012.

Another trump card is the nature of video consumption on the platform. With Facebook, video is consumed in a stream, surrounded by other pieces of content. On Snapchat, the vertical video on on offer is far more immersive, and delivers much higher attention for brands. Snapchat ads are also fun to watch. Taco Bell and Gatorade have both generated enormous levels of engagement with branded filters, in return for enormous spend.

Taco Bell’s Cinco De Mayo custom filter generated over 224 million impressions.

Snapchat’s content strategy is focused on partnering with networks to develop entertainment programming and it has strong existing partnerships with brands like CNN, Buzzfeed, ESPN and others. In August, the company announced it had partnered with NBC to develop Snapchat-specific episodes of some of its hit shows, including “The Voice”, “Saturday Night Live”, and “The Tonight Show With Jimmy Fallon.” It has also worked with BBC on Snapchat tailored versions of the incredible hit ‘Planet Earth‘ and is planning unscripted drama series called ‘Snapchat Shows‘.

The company has also made some intriguing hires. In a move that clearly flagged future intentions, former Viacom sales head Jeff Lucas, a well renowned exec in the TV world with strong connections to US adland was hired as Snapchat’s vice president and head of global sales.

Ad spend has flowed in to boot.

According to Martin Sorrell, WPP spent $90 million with Snapchat in 2016 — having only projected to spend around $20 – $30 million. This year, Snap wants $100 million to $200 million in 2017 commitments from WPP, Omnicom and other ad companies. According to reports, at CES last month the company pitched a room full of Publicis executives and clients, making the case for why it should soak up TV spend.

That’s fightin’ talk, and for good reason. Snap’s IPO puts it at a valuation north of $20 billion. If it’s to realise that, it will need to win its battle to take a slice of the TV pie.

That’s a riskier bet than Facebook, but given its enormous success so far, you certainly wouldn’t write that off.

Act 3 – Who’s the winner and do they take it all?

So who’ll be the winners, losers and the ultimate champion? Will Facebook and Snapchat dance on traditional TV’s grave?

It’s impossible to say at this stage. By the end of 2017, things could be clearer, but its a VUCA (volatile, uncertain complex and ambiguous) industry with lots of egos and lots of moving parts.

Firstly, consistent studies have show that traditional linear TV is still by far the most effective platform for brand building, and in Ireland for example, over 60% of our video consumption is still linear and live. What Snap, Facebook and others don’t seem to have any feel for is the power of TV compared to their own ad offerings. Most great TV advertising is talked about, it’s enjoyed in your living room with your family, and just being on TV gives brands a kudos, a social cache that paying for FB adverts doesn’t. That’s a key strategic challenge for social media platforms, but it might be overcome just by virtue of slowly decreasing TV viewership.

It’s also not just Facebook and Snapchat’s battle to become the new TV, there are plenty interesting players involved.

Other platforms will have a strong say. YouTube for example, despite losing some momentum and offer less powerful brand advertising options, is still the major video player, and has been wooing networks.

On the other side, there’s danger from Netflix and Amazon, who have the huge budget to create their own content, but don’t need to rely on money from advertising. Netflix have a strong recurring revenue from subscription, while Amazon could credibly turn around and give away all its video content for free as a way to generate subscriptions for Prime.

And then there are also plenty of legacy issues with both Snapchat and Facebook that could create speed bumps. Snapchat’s advertising platform is pretty much non-existent, meaning it relies on multiple large deals rather than giving advertisers the chance to self manage. Its lack of targeting will not play well in an age when measurement is everything either. There’s also the double edged of being a youth biased platform – who’s to say the success with under 34s will be grown into older brackets? And then there’s the pressure to monetise pre and post IPO.

Facebook has its own issues. Despite paying for original content and being the place where most people in the developed world get their news, it refuses to admit it’s a media company. Four separate measurement errors in the last year alone has shaken advertiser confidence in the platform too, and articles like this really don’t help Facebook’s case.

So who’s going to win?

Certainly as digital advertising reaches maturity and we come out of the ‘trough of disillusionment’ (Gartner Hype Cycle terminology) caused by the display/programatic/adblocking mess, this will be the defining story of the next five years.

My uneducated guess is that the fragmentation of traditional TV will take much, much longer than we expect, and, at least in the medium term, it won’t be a winner takes all game.

Now that you know a little more about the main protagonists, let battle commence.

Because the final act is about to be written…

 

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Further Reading:

P&G scale back on precision targeting – WSJ
The Facebook Epoch – Stratechery
The Great Unbundling – Stratechery
The T.V. ad isn’t going anywhere, it’s going everywhere – Wired
Facebook’s big TV push – Digiday
Facebook is testing mid-roll video – AdAge
Facebook TV is happening – TV Rev
Old fashioned Snapchat – Stratechery
Get ready for Snapchat to feel a lot more like TV – Business Insider
Why Snapchat is the new TV – WSK

 

 

 

Moving towards maturity and making digital marketing redundant…

make digital redundant

Let’s be honest with ourselves here for a second.

There’s been hundreds of millions (possibly billions?) in marketing budget wasted on digital marketing because of over zealousness about its effectiveness and misunderstanding about how it works.

That’s not an over claim. Look at the scandalous view ability rates of digital display, the amount of money that brands spend each month on creating social ‘content’ that nobody ever gets to see, or the budget pumped into the latest ‘silver bullet’ (branded apps, messenger bots, ‘influencer’ ‘real time’ or whatever the latest buzzword is).

Agencies are happy to keep pumping this stuff out for cold hard cash, while many marketers are afraid to call them out on it for fear that they’ll be seen as ‘not getting it’.

Everyone in the industry has been guilty of hyping up digital, getting excited about tactics and and forgetting of the bigger strategic picture.

But by focusing on the revered efficiency of digital, we’ve lost sight of the real value of creative advertising.

We’ve lost sight of a lot of things.

Contrarians

As Ian Leslie said in his recent excellent piece about adland…

“The ad industry has been bamboozeled by the rise of digital, because most of it had no idea how advertising worked in the first place.”

Sure, the growth digital has completely changed the ad industry. It’s hugely exciting and has had a bigger impact on consumer behaviour than almost anything else in history.
But it’s has also led to many negative side effects.

  • It’s meant that we prioritise short term, easily measurable data instead of clarifying thinking and focusing on long term brand building.
  • It’s led to biased thinking from marketers eager to cosy up to tech cos and desperate to distance themselves from the supposedly moribund world of “traditional” media.
  • It’s led to many of us thinking like direct marketers, not brand marketers and ineffectually using ‘precision targeting’ to try to engage the perfect individual, while forgetting that wastage is actually a good thing.
  • And of course it’s led to fraudulent practises within an industry that can’t really afford to lose any more credibility.

We seem to have convinced ourselves that digital is this completely different approach and the learnings of old don’t apply.

But as contrarians like Mark Ritson, Byron Sharp and Bob Hoffman have been saying for years, digital is just another interesting tool to add to the marketer’s arsenal. It’s not a panacea for everything and those who tell you it is are either wilfully lying, utterly biased or just don’t know enough about how advertising really works.

Stabilise

But maybe this period of inflated expectations and unnecessary buzz has some positive outcomes. Maybe it’s just the early stages of us truly understanding digital.

As with any technology, it takes time for it to stabilise and for smart people who are impacted by it to really understand and stop get carried away with talk of ‘disruption’, ‘game changer’ and ‘the death of’ everything else.

As a marketer who has only known the digital age of advertising, it’s been all to easy for me to over prioritise it and to demonise everything else as old fashioned. That’s the same for many under 30s in adland. They refer to ‘traditional’ advertising in a pejorative sense, and hail any small new tactical evolvement of digital as a huge step.

Tom Goodwin sums this up well when he says that…

“It’s not unusual in technology leaps to think you’ve understood the power of the new when you haven’t. We thought the wonder of the mobile phone was making phone calls anywhere, when in fact it was a personal gateway to the Internet.”

We’re only beginning to get to grips with the best way to use digital now, and this learning curve will continue for a long time yet.

But things seem to be getting better. And even the past few months, the signs are that our approach to digital seems to be maturing.

Understanding

Firstly, we’re starting to see a more sophisticated approach to digital that’s more in line with the way we believe advertising works, and less inclined towards believing that it requires a completely new approach.

Let’s focus on FB for a minute.

P&G’s recent announcement about its spend on Facebook advertising is a good example. In line with Byron Sharp’s theories of brand growth, one of the world’s largest spenders is actually moving away from uber targeting and starting to remember the rules that emotional fame campaigns that reach lots of people and get talked about (building mental availability) are far more effective in the long term.

“The inference is they are switching to TV but what’s really happening is a shift to reach and frequency and away from highly targeted buying, but still on Facebook, which we’ve been doing on similar clients for the past two years.”

Ironically, this news could turn out to be a good thing for Facebook, as the digital brand building platform with the largest mass reach in the world.

BBDO’s excellent comms planning division also underline the shift in approach in their recent ‘About Face’ report.

In the past 5 years, brands have focused on building up Facebook ‘fans’ and pushing out organic content to them. But there’s two fallacies at play here.

Firstly, the likelehood is that these ‘fans’ are already existing heavy buyers and thus, this approach contradicts the fundamental marketing theory that for brands to grow, they must aim their marketing efforts at all buyers, as opposed to only loyal buyers.

And secondly, for most big brands their organic reach is less than 1%, meaning their carefully cultivated posts (likely created by an agency on a huge hourly rate), aren’t being seen by 99% of the people who ‘like’ their page, never mind anyone outside of that already qualified base.

Therefore, smarter brands are starting to realise that focusing on reaching as many people as possible is a much more lucrative and viable tactic than micro targeting.

But it’s not just brands that are seeing the light. Ironically, Facebook also supports this return to the same logic that we use for ‘traditional’ advertising, emphasising in its literature to advertisers that ‘reach’ is a much more effective KPI than precision targeting or optimising for engagement.

“By optimizing towards reach rather than towards action-based objectives, advertisers can generate a much larger impact for their brand, more cost-efficiently.”

The excellent Jerry Daykin sums it up well:

“Behind those unintelligible digital headlines, ever changing platform specifications and powerful speeches about consumer engagement & conversation is a simple truth: digital marketing is most effective when it plays by traditional rules, but does so better than traditional media can. The real advantage of digital is often when it can help us broadly reach more consumers, not specifically target fewer.”

Integration

Another sign of digital maturity is its continuing integration with other channels. We’re seeing the light that the most effective way to use digital is in tandem, rather than it being expected to do everything alone.

Consistent research has shown that multi-channel campaigns actually make the same budget work harder and more efficiently and advertising across platforms delivers a higher ROI, and that integrated campaigns build better brand associations and more brand equity. Binet and Field’s seminal research found that adding an online response element to a TV advert boosts the efficiency of TV by a factor of 4x.

Digital is strong alone, but better together.

Indeed, the best, most awarded campaigns at Cannes, in Warc awards and in IPA/ADFX tend to be those that use a variety of media to communicate their message, and the average number of channels used in awarded campaigns is increasing.

It’s clear to see that cross platform advertising builds brands in consumer brains better than a single platform. It leads to a multiplier effect. No individual media channel can become a silver bullet for a campaign, not least digital.

Make digital redundant

I’d like to finish with a proposal that I’ve stolen from elsewhere.

As an industry, let’s focus on making the term ‘digital’ redundant.

Let’s not see it as a separate thing. That’s outdated thinking.

Digital is like electricity, it’s everywhere, it’s the thing we build on top of.

Imagine if some new agency came to you with an ‘electricity strategy’.

Digital marketing is not a thing. Digital is a marketing channel, not a marketing strategy. And increasingly, everything is digital anyway.

It should be baked into every idea that we come up with, but it’s also not a replacement for any other tool.

This would mean the death of purely ‘digital’ or ‘social’ agencies too, which in my view would be a good thing for the industry, and lead to less biased thinking.

The call for talent in the future won’t be for ‘digital marketers’. It’ll be for well rounded marketers who understand how advertising really works, aren’t biased towards any one medium and can create an effective integrated plan. People who not only ‘get’ digital, but also don’t put it on an unnecessary pedestal as the silver bullet for everything.

As Jerry Daykin says, in this new age of maturity that we’re hopefully entering, It’s not so much about mastering a completely new art of digital marketing, as it is about mastering traditional marketing in an increasingly digital world.

So paradoxically, the best thing that marketers could do to push digital marketing forward, is to kill the term itself.

But enough of my rambling, there’s bound to be some holes in the thinking above, so what’s your take?

 

 

 

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Further Reading

The science behind social proof on social media – why early momentum creates a multiplier effect

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If your friends jumped off a bridge would you do it too?

Any Irish person of a certain vintage is likely to have heard that immortal line from an aghast mammy at some stage. Little does the Irish mammy know that she’s describing a psychological phenomenon.

Ever been in a classroom and someone walks into the room? One member of the class turns and looks, and without even thinking, the rest of the classroom does too.

Ever been at a rugby game when there’s a lull in the action? Then one slightly well oiled chap starts to sing a chant and the rest of the crowd join in.

This is ‘social proof’ at play. We’re evolutionarily hardwired to be group animals.

Here’s a great example:

Herd instinct

This herd instinct is a legacy of our ancestors, when if one person started running because of perceived danger, it was probably better for you to do likewise, lest a wild animal catch you unaware. Those who acted differently than the group probably exited the gene pool.

That’s why in modern times, individuals feel that they are behaving correctly when they’re behaving the same as other people, particularly if it’s a large group of other people.

This is partly why crushes at big events are so nonsensically dangerous. Alone, each person in the crowd would be unlikely to start running because of some danger or a gate opening. But in a crowd, we’re reduced to our base state of following what others do. Social proof is also the reason why sects commit collective suicide, why the Nazis got into power and partly why financial bubbles occur.

So we know that this invisible power of peer pressure can warp common sense.

But in a world of social media, where we can follow what everyone, from celebrities to friends is doing at all times, social proof is also incredibly important to understand for marketers.

People like me

It’s never been easier to see what the group thinks in real time. Because most of what consumers or brands do online is actually layered on top of a voting system (favourite, RT, like, heart, review, comment) . That makes it far easier to see what ‘people like me’ like.

That’s also why Facebook’s advertising is so effective – showing those little avatars of your friends alongside a brand name gives increased credence to the brand.

This compulsion to do what the group does is also key part of the science of why things go viral. According to a fascinating NYT piece, peer pressure is hardwired into our brains, without us even knowing:

In an experiment, researchers asked teenagers to contribute some of Instagram photos, while scientists analysed their brain activity with functional magnetic resonance imaging.

As part of the experiment, the teens could also see how many likes had been given to each photo. Although the researchers had assigned the likes as part of the experiment, the teenagers were given the impression that the endorsements came from their peers.

When the youngsters viewed images that had a lot of likes, there was greater activity in neural regions of the brain involved with reward processing, social cognition, imitation and attention, researchers said, compared with neural reactions when the teens looked at photos with fewer likes.

The effect was magnified when they saw an image they themselves had contributed which had received a large number of likes, researchers said.

Teenagers were more likely to give a like to an image that had already gotten dozens of likes, even if it was a fairly banal picture of a plate of food or a pair of sunglasses. They were less apt to like the same kind of image if it had gotten few likes.

Basically, the respondents took their cues from whether others had liked the photo, rather than using their own opinion to make a decision.

The content was irrelevant, the social proof of other people liking it was all that matter.

Compound

So the more likes that a piece of content had already gotten, the more likely this activity was to compound and create a snowball effect.

Similarly, digital video analysts Unruly have released research that backs up the importance of early momentum. According to the brand, in 2013, around 10% of video views came in the first two days.

In 2014, around 18% of views happened by day two and in 2015, around 25%.

unruly-social-diffusion-606x453

This may seem like a small point, but it’s actually revelatory. A similar thing happens on Facebook, Instagram, Twitter, Tripadvisor and Reddit. It means that the content that brands put onto social channels must get early traction in order to be effective. 

If not, then you lose all momentum, the social proof/herd effect is lost and no matter if the content is great or not, it’s seen by sub optimal amount of people.

Takeaways

So what are the key takeaways for marketers?

Firstly,  support your content with advertising early in its lifecycle. Don’t wait to turn it on, have it ready to go when the video goes live.

Also, ensure that your content plan leaves room for reactivity, and also that you’re posting at the right time for your audience (Facebook insights tools will help here). More early likes serve as a social cue, orienting or alerting people to what is cool or socially appropriate. That’s why a certain Irish male media brand purchases thousands of fake Instagram followers when its entering new markets to give the illusion of group acceptance.

Screen Shot 2016-08-06 at 13.05.38

And most importantly, endorsements are incredibly powerful, if you get the right person endorsing. Irish consumers are the most cynical in Europe, but we do value the opinions of people like us. Consumer reviews are the second top online research channel after search engines, while a word of mouth recommendation from a friend or influencer is the second top method of brand discovery after T.V. Yet we rarely optimise for these channels of influence. Similarly, 35% of Irish consumers actively write reviews, so for a brand, getting the testimonial/social proof effect right can have a huge impact on your bottom line.