Marriott International : A Hotel or An Ad Tech Company?
Major international companies have entered the world of advertising to drive revenue for advertisers by leveraging their tech platforms and first-party data.
Does that seem like 90% of business for 2022?
Following on the heels of retail media success stories, Marriott, the world’s largest hotel group, launched a new advertising platform ‘Mariott Media Network.”. And this hotel juggernaut is more likely to succeed than not.
As Marriott put it,
“Marriott’s audience has intent, and travelers will be in the right mindset when receiving these offerings.”
Why Does It Matter?
Marriott Media Network is described as an “omnichannel cross-platform advertising solution for brand advertisers. Marriott can thus offer advertisers new ways to reach travelers – an audience often on the lookout for new experiences with discretionary funds available. An advertising network can also advertise products that travelers may be interested in besides future bookings. As part of this endeavor, Marriott has exclusively partnered with Yahoo.
First Party Data
Apple’s privacy effort has impacted travel marketing. App developers increasingly need users’ consent to track their online behavior. As consumers opt out in large numbers, brands, and ad sellers are increasingly looking to use “first-party data”. Data like customers’ profiles, search history, and reservations act as a first-party data source for advertisers. Marriott plans to tap into its treasure trove of first-party data
Reach
Marriott says it has 8,000 properties under 30 brands spanning 139 countries. Advertisers will have access to more than 164 million Marriott Bonvoy members and renowned loyalty programs. The program allows Marriott to know when its members are traveling, which means brands will likely be able to target travelers before their trip, and while they’re captive in Marriott’s quarters.
It is also planning to extend its reach to non-endemic advertiser categories, notably airline, ride-sharing, and restaurant bookings.
Revenues
In the ad tech world, advertisers are willing to spend money but do not have sufficient and reliable inventory. Considering Marriott’s CRM data and large reach, advertisers may see this as a viable alternative to Google and Facebook.
Interesting Read: Unlock The CTV Opportunity: What The Future Looks Like
Targeting
Marriott is being cautious about programmatic targeting and will not venture into audience network play. With leisure travel volumes returning to pre-pandemic levels, this is a good opportunity for those who want to target a specific segment of travelers.
The company serves ads for now across its owned channels, including display, mobile, video, email, and digital out-of-home (in-room TVs and digital screens in lobbies, gyms, and bars) once fully implemented.
It will show how a travel media network fits into a brand’s media strategy. For instance, an apparel company might identify customers traveling to a ski resort, while an entertainment company might advertise shows, events, or whatever fun things are available in a particular city.
In fact, even small (local) advertisers would get an opportunity to display their offerings. Marketers will be able to reach consumers who are looking for specific services, experiences, and entertainment options in the city or locale they are visiting.
CTV- a better option
CTV ad campaigns enjoy much higher engagement rates than traditional ads. It achieves high-performance results for brands – 94% viewer completion rate compared to just 74% and 69% on PC and mobile devices, respectively.
Advertisers now have a perfect platform to shine on the 42-inch TV in every Marriott room. There is no better way to link the TV screens in hotels with connected TV (CTV) than through programmatic advertising.
The streaming platforms Netflix, Disney+, Hulu, and others are looking into ways of monetizing viewers with CTV inventory. And Mariott adding a CTV inventory to its offering opens up a whole new viewing context, during travel.
Interesting Read: Connected TV Explained: The Essential Glossary Of CTV
Full stack
The Marriott Media Network uses Yahoo as an exclusive SSP. Yahoo’s supply side platform serves as a platform for advertisers to buy inventory. As a result, the Yahoo advertising team will manage demand generation and sales across Marriott paid media and the Marriott Media Network utilizing Yahoo’s demand-side platform. The Marriott supply can be measured and targeted holistically across all of Yahoo’s open web programmatic inventory.
Privacy
Legislation like GDPR in the EU and CCPA in the US, privacy changes by Apple, and the forecast demise of the third-party cookie have severely hampered advertisers’ ability to target customers. Brands are seeking new avenues to reach consumers.
Marriott’s media network is a “demand and supply solution for the cookieless world,” -Iván Markman, Chief business officer at Yahoo.
The media network will not share customers’ personally identifiable information (PII) with the advertisers. It will leverage anonymized customer data that will help to curate the content on behalf of the advertiser to display relevant ads to travelers.
Yahoo, the ad tech partner, will match anonymized customer data with advertisers’ data. Advertisers will shop for ad inventory via Yahoo’s portal and sales team.
Untapped ad prospects
The addition of a new layer of revenue is an amazing opportunity for Mariott. Though it has had an advertising business for more than a decade this is its first programmatic offering which has immense potential for growth.
Assuming an average occupancy rate of 75% in 2021 and at least 5 ads shown per day at $40-$50 CPM adding additional revenue to its bottom line. The reported revenue is $13.86 billion in 2021. Also, the partnership with Yahoo means a low cost of ad sales.
Presently, the most lucrative and growing market for Mariott International is China. It has 448 hotels spanning 23 brands across more than 110 cities in Greater China. The country with the highest population is the most brand loyal to the hotels. The largest consumer economy has the elite and affluent travelers. The pandemic has prompted them to explore destinations closer to home. An opportunity for Mariott too good to be missed!
Bottom Line
Through a partnership with Yahoo, Marriott is launching an advertising platform to better monetize its substantial customer base. It will support advertisers and publishers in unlocking the full value of their content, audiences, and marketing. Also, Mariott will not be hindered by varying regulations of any country, because it owns the first-party data (information on guests received from loyalty membership).
So next time, one can expect ads that might be potentially relevant on Marriott’s owned properties – website, app, or room TV screens as opposed to welcome messages. Marriott’s move is indicative of a larger trend within the travel industry. And why not? Brands can get around rising operating expenses and establish a new revenue stream with it. Till then Bon Voyage!
Interesting Read: 6 Data Privacy Trends To Look Out For In 2022!
Magnite Launches Programmatic Offering With Samsung Ads
Independent sell-side advertising platform Magnite today announced a collaboration with Samsung Ads in Australia. This will allow marketers to add Samsung CTV inventory to their programmatic media buy, which includes Samsung’s free ad-supported streaming service Samsung TV Plus.
Consumers in Australia will be able to access exciting and premium content immediately through Samsung TV Plus, an internet-based TV platform that was launched in November 2020. They can access 69 channels free live on their Samsung Smart TVs. The list of channels is growing every month. Samsung’s premium ad-supported video-on-demand (AVOD) service in Australia will now allow advertisers to access its connected TV inventory programmatically.
Connected TV is one of the fastest growing mediums in Australia with 11.9 million Australians having viewed content on having viewed internet content on a TV screen. IAB Australia’s Online Advertising Expenditure Report confirms that programmatic is the preferred buying method for content publishers’ video inventory as consumption to date has risen. Magnite already works with Samsung Ads in the US, EMEA, LATAM, and India.
Interesting Read: Samsung Ads Introduces Predictive Planner To Improve AVOD Ad Buys
That’s What They Said
James Young, MD of Australia at Magnite said,
“Programmatic CTV supply in Australia continues to grow at a rapid pace and Samsung will deliver a wider audience reach for buyers. We are delighted Samsung has selected Magnite to deliver a best-in-class advertising experience for their Samsung TV Plus product.”
Alexander Spurzem, General Manager for Samsung Ads Australia said,
“CTV has generally made TV advertising more accessible, affordable and accountable for advertisers, programmatic takes that one step further making it easier for advertisers to buy. The collaboration with Magnite will unlock programmatic inventory for advertisers on Samsung TV Plus and help fuel growth of CTV in the market.”
Interesting Read: AVOD strategy For Netflix Ahead: Should Advertisers Rejoice?
Another threat to the duopoly: How is Vodafone Idea foraying into the adtech industry?
Vodafone Idea has launched its ad-tech platform called Vi Ads, driven by artificial intelligence (AI) and machine learning (ML), to give marketers an ROI-focused programmatic media buying platform. The telecom operator rolled out Vi Ads with the aim of participating as a major player in the multibillion-dollar Indian ad tech industry.
How will Vi Ads benefit?
It is a self-serve interface that helps marketers set up campaigns, track them, derive personalized insight, and enable targeted outreach. Vi Ads is built to achieve full-funnel campaign objectives from awareness to purchase.
Banking on Vi’s deep data science technology, Vi Ads will enable marketers to engage with the operator’s over 243 million subscribers through multiple channels like Vi-owned digital media — Vi App, Vi Movies, and TV App, and traditional channels like SMS, and IVR calls. The company highlighted the below aspects that distinguish Vi ads:
1. It offers precision targeting not only on the company’s digital assets but also on external third-party programmatic media.
2. It will not be media-specific and enable marketers to engage with Vi users on external media channels and publisher partners of Vi Ads.
3. Marketers can benefit from unique audience segments, interest groups, and targeting parameters derived from Vi’s deep consumer insights built on opt-in consumer data.
Avneesh Khosla, chief marketing officer, Vi said,
“With our programmatic platform – Vi Ads, we will address two of the biggest challenges faced by marketers today – authentic insights and enhanced reach.”
He further added,
“This is a simple, easy to use, and highly efficient solution for marketers to effectively reach out to the right target group with the most relevant messaging at any given point of time, while also providing a monetization opportunity to Vi as we aggressively build and scale our digital assets.”
Interesting Read: Is Google Joining The ONDC Bandwagon With Paytm And PhonePe In The Race?
Vi Ads collaboration
Vi Ads is developed in collaboration with TorcAi, a provider of audience infrastructure and programmatic solutions. It leverages advanced data sciences & machine learning to weave together legacy marketing and advertising technology platforms with new-breed tech. Rohit Verma, CEO TorcAi Digital said,
“This partnership, and the development of the Vi Ads platform, will enable Vi to connect their vast stores of customer insights with advertisers, and publishers, to deliver the right message, at the perfect time.”
Is the entry of telecom operators a threat to the duopoly in the digital advertising market?
In the fast-growing Indian digital advertising market, telecom operators Bharti Airtel, Jio, and Vodafone Idea have launched their own platforms to compete with tech and eCommerce giants like Google, Meta, Amazon, and Flipkart.
The combined revenue of Google and Meta grew to Rs 23,000 crore in FY21 whereas Amazon India and Flipkart generated cumulative advertising revenue of Rs 3900 crore. Digital advertising is sure to undergo a major change as the telcos are going all out to make advertising an additional revenue stream.
In early 2021, telecom provider Bharti Airtel launched its Adtech platform- Airtel Ads and Reliance Jio launched its JioAds later in the year. The three largest telecom operators have a huge opportunity in the digital ecosystem as they collectively own 1.16 billion users and have access to such vast data reserves. As Google plans to phase out third-party cookies by the end of 2023, they are best positioned to take advantage of the fact that they have access to authentic first-party data.
In the case of Airtel, brands can access its 350 million+ customers through various digital platforms via Airtel Ads. It also acquired a strategic stake in the startup Aqilliz to integrate the latter’s advanced blockchain technologies across its fast-growing offerings in Adtech, Digital Entertainment, and Digital Marketplace.
Similarly, JioAds offers advertisers access to reach 450 million+ users through online and offline media assets. The JioAds ecosystem offerings spread across Connectivity, Entertainment, and Commerce. A major selling point for advertisers of JioAds is its brand-safe omnichannel network.
A first-party platform is ideally suited for addressing the question of trust and privacy in digital advertising. Ad tech has seen significant growth and innovation in India due to the digital revolution, which has also led to a higher volume of investments in the industry. The Indian market will be interesting to see if the new entrants can overtake the duopoly and eCommerce companies.
Interesting Read: How Will Partnership With Criteo Benefit Flipkart’s AdTech Business?
How Will Dubai’s Metaverse Sector Contribute To Its Economy By 2030?
The Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum announced earlier this month that Dubai’s metaverse sector will contribute $4 billion to the emirate’s economy by 2030.
Dubai Crown Prince Sheikh Hamdan bin Mohammed and Sheikh Maktoum bin Mohammed, the Deputy Ruler of Dubai have now directed the formation of a task force to track the latest developments in the digital economy, including technology and metaverse trends. As quoted by Arabian Marketer, Sheikh Hamdan said,
The directives of Sheikh Mohammed bin Rashid to form a higher committee to supervise Dubai’s future technological developments reflect the importance of facing the future with an open mind. The move will help us fully understand reality and explore unique ideas that will shape a brighter future for Dubai and the UAE, maximising future business opportunities.
.@HamdanMohammed, @MaktoumMohammed review vital technology trends in the metaverse and issued directives to form a task force to track the latest developments in the digital economy. #Dubai https://t.co/oY819Rs5MU pic.twitter.com/lVtk79uYLT
— Dubai Media Office (@DXBMediaOffice) May 19, 2022
But what exactly is Metaverse? Metaverse users interact with other users in computer-generated environments such as shops, learning environments, and meeting rooms, among other things, in three-dimensional, hyper-realistic virtual rooms. It combines elements of social media, augmented reality, virtual reality, video games, and other advanced technologies.
Interesting Read: Admix And JGroup Partner To Bring In-Play Advertising To MENA Brands
The Dubai Metaverse Strategy
Dubai is capable of attracting and retaining the largest technology companies in the world. Hence, Dubai Metaverse Strategy’s higher committee plans to utilize metaverse technology. This will enhance resident surgeons’ performance by 230%.and raise the output of engineers by 30%. It also aims to raise the metaverse’s contribution to one per cent of the emirate’s GDP.
During the meeting with Sheikh Hamdan and Sheikh Maktoum, Omar bin Sultan Al Olama, who is the UAE Minister of State for Artificial Intelligence, Digital Economy, and Teleworking Applications and chairman of the Dubai Chamber of Digital Economy, outlined how Dubai stands to benefit from the metaverse in a way that enables it to generate business opportunities beyond its physical borders.
Further, it is implementing activities and projects that will increase its web presence. The higher committee is actively examining opportunities and challenges. It is trying to qualify human capital so that it can excel in the virtual environment.
Moreover, it’s constantly working to establish a legal framework that addresses the needs of all sectors in the future. Forecasts indicate that business revenues from the metaverse will increase from $180 billion to $400 billion by 2025.
Interesting Read: Bloomberg Media Studios Unveils First Creative Hub In The UAE
Dubai’s metaverse regulatory authorities
Dubai’s Virtual Assets Regulatory Authority (VARA) established its Metaverse HQ earlier this month, making it the first regulator with a presence in the emerging digital space.
Dubai plans to create a prototype of a decentralized regulator model by expanding VARA’s resources beyond borders. Moreover, it intends to make it readily accessible to government and industry leaders, other authorities, and virtual asset providers to shape the future of the digital economy.
VARA’s MetaHQ will utilize The Sandbox platform, an Ethereum blockchain-based application that allows users to create, sell and purchase digital assets.
Interesting Read: OSN Rebrands Its Streaming Service With OSN+
Twitter Level Up Its Privacy Policy, Turns It Into A Web Game
Twitter launched Twitter Data Dash, a browser game in Super Nintendo style that summarizes Twitter’s privacy policies. Its purpose is to teach people about the information that Twitter collects, how that information is used and what control users have over that information.
Image Credit: Campaign Middle East
The social media giant says the game is designed to help users learn how to “safely navigate the Twitterverse.” The company said in a statement,
Through Twitter Data Dash, we hope to encourage more people around the world to take charge of their personal information on our service and maybe even have a little fun in the process. Transparency is core to our approach and we want to help you understand the information we collect, how it’s used, and the controls at your disposal.
Interesting Read: New Video Game Measurement Allows Brands To Evaluate The Impact Of The In-Game Ads
While marketing its revised Privacy Policy, the company wanted to take a different approach to make users understand it in a simple manner. In addition, Twitter reorganized the policy into three major categories: data collection, data use, and data sharing.
So what’s different? We’ve emphasized clear language and moved away from legal jargon.
Beginning today, you can see the updates to our privacy policy and terms of service in the app via settings and on our redesigned privacy policy site.
— Safety (@Safety) May 11, 2022
As of last week, Elon Musk had announced he would be pausing his $45 billion purchase of Twitter, after discovering some accounts on the site were fake. Despite the buzz surrounding the Musk deal, it remains to be seen if this vintage side-scrolling video game will excite the users and serve its purpose.
Interesting Read: 6 Data Privacy Trends To Look Out For In 2022!
Vizio Unveils Advertising Analytics Platform At First-In Person NewFronts
Smart TV maker unveiled a suite of analytics tools on a new platform aimed at helping advertisers build custom approaches to reaching connected TV audiences and measuring cross-screen engagement.
This is the second year in the NewFronts but the company’s VP of national ad sales, Adam Bergman told Adweek that while Vizio may have been the new kids on the block last year, the connected TV company has made “big waves” in the market.
Vizio designs its business around four asset environments: audience, platform, inventory and content, and data. Adweek was explained by Bergam that the most crucial aspect of the business is integrating hardware and software. The entire approach revolves around the consumer experience.
“From the UI, the design, the look and feel of our operating system, to the way we use data to consider content we want to program and how we promote it, ad products and targeting, all of that is built on the integrated hardware and software approach.”
Interesting Read: Here, There, Everywhere, It Is Cross-Screen Advertising!
Introducing Vizio Analytics
Vizio Analytics offers campaign tracking and optimization capabilities for pre-campaign planning, segmentation, and budget allocation as well as measurement and reporting. Through its Inscape TV research business, the platform utilizes ACR (automatic content recognition) data from 20 million owners of its smart TVs.
Advertisers can tap into cross-platform buying solutions from partner companies, including Neustar, Oracle, Experian, LiveRamp, Epsilon, Lotame, Acxiom, IRI, Upwave, Factual, and Kochava. Vizio Ads offers users the ability to measure incremental reach gained over linear TV, as well as assess and validate ad effectiveness against a variety of KPIs, such as brand awareness, perceptions, familiarity, favorability, and purchase intent. Additionally, VIZIO Analytics gives advertisers insight into bottom-of-the-funnel metrics such as location attribution, site attribution and conversion, offline sales lift, and foot traffic. Travis Hockersmith, VP of Vizio’s Platform + Business, in a statement,
“We’ve built a custom analytics platform that gives brands the ability to leverage our massive TV footprint and data infrastructure for cross-platform campaigns. This makes it easier to connect their customer management and measurement services of choice with our analytics support to achieve their goals. The result provides consumers with more relevant ads and gives clients outcome-based accountability with their investment decisions.”
Customers can also utilize third-party measurement support from partners such as Nielsen DAR, iSpot.tv, VideoAmp, and ComScore, all of which license the Inscape data for measurement use cases.
Interesting Read: Connected TV Explained: The Essential Glossary Of CTV
Innovative new ad offerings
Adweek reported that Vizio will debut its new advanced advertising product Jump View, a new offering described by the company as “consumer first.” Jump View is an interactive overlay that, after a consumer finishes watching an episode in a linear environment, offers the user to continue watching the show in a streaming environment.
A key theme of the NewFronts is the shift from traditional TV to smart TVs and streaming, and the need for ad dollars to catch up. Furthermore, Vizio also plans to introduce Vizio Enact, their linear addressable TV advertising solution that enables national advertising.
Content is the key
AVOD WatchFree+ has been completely overhauled since last year’s upfronts, and it now has more than 250 free live-streaming channels, as well as more than 5,000 titles in its on-demand library. Bergman said to Adweek,
“Not only have we rebuilt and recaptured the content programming side of it, that also means we’ve completely rebuilt the ad inventory access, which advertisers really respond to.”
Interesting Read: AVOD strategy For Netflix Ahead: Should Advertisers Rejoice?
How Will Partnership With Criteo Benefit Flipkart’s AdTech Business?
Flipkart and Criteo, a global technology company providing a Commerce Media Platform, have partnered up to use full funnel measurement capabilities for Product Performance Ads (PPA). As a result, Flipkart’s off-platform offerings are going to be strengthened, and advertisers across segments will have the opportunity to reach and engage high-intention customers.
Interesting Read: Everything The Quarterly Results Of The Tech Giants Have To Say
Growth Strategy For Flipkart’s Adtech Business
This launch is a part of the larger 2022 growth strategy for Flipkart’s Adtech business as it continues to innovate and unlock value for brands and sellers. Criteo’s commerce media capabilities will help Flipkart to serve advertisers of all sizes with their full-funnel marketing goals on the open web by leveraging its audience signals for highly relevant reach, resulting in higher campaign effectiveness. Advertisers will be able to drive marketing outcomes and build lifetime value across Flipkart’s 400+ million customers in India.
Advertisers will be able to run marketing campaigns while receiving full-funnel metrics with this solution. Flipkart’s PPA tool also includes Criteo’s Dynamic Creative Optimization+, which ensures that the right customer receives the right communication while improving performance.
And that’s what they said
Sankalp Mehrotra, Vice-President – Monetisation, Flipkart, said that commerce advertising is growing faster than the overall digital market. It will soon account for a sizable portion of the total digital pie.
“Flipkart Ads is focused on providing technology-led advertising solutions to ensure the most relevant experience and outcomes for advertisers and customers alike. In addition to our current suite of advertising options, the launch of PPA in partnership with Criteo will help address the needs of incumbent and insurgent brands across verticals to solve their full-funnel marketing objectives on the open internet.”
Taranjeet Singh, Managing Director, SEA and India, Criteo, added,
“We are happy to announce the partnership with Flipkart, India’s homegrown e-commerce platform, to further accelerate and utilise Criteo’s commerce media capability. By combining Criteo’s superior audience-first technology and Flipkart’s reach, we will be able to offer a remarkable capability to marketers and brands to achieve meaningful marketing outcomes on the open internet.”
Interesting Read: AVOD strategy For Netflix Ahead: Should Advertisers Rejoice?
How Roku Plans To Enhance The Advertising Experience?
Roku revealed new advertising solutions to create a better TV advertising experience for marketers in the streaming decade during its upfront presentation. The company announced innovation across the Roku Channel, Roku Brand Studio, and OneView to help marketers accelerate the transition to TV streaming. Alison Levin, Vice President, Ad Revenue & Marketing Solutions said,
Marketers turn to Roku for data, commerce, and measurement tools that they can’t get anywhere else to accelerate the shift of ad dollars to TV streaming. This upfront, TV starts here.
The streaming company has announced a new advertising data partnership with Microsoft, as well as shoppable ads and a new video series that integrate products with content. Below are the highlights of Roku’s NewFront presentation.
Interesting Read: A Look Ahead: Convergence Of Linear TV And Digital TV Advertising
OneView streaming platform
In conjunction with Microsoft Audience Intelligence, Roku will link ad exposure with online searches and browsing through its OneView streaming advertising platform. Microsoft’s Audience Intelligence uses data from more than 7 billion Bing searches each month. The company has described the collaboration as ‘industry-first.’
A OneView’s new program for retailers will combine shoppable ads with Roku Pay so they can sell products right from ads on the TV screen.
During the NewFront presentation to TV ad buyers, the company announced new software that enables viewers to make purchases directly from ads, using their Roku remote controls. It will be rolled out on the entire platform and exclusively in One View. In an interview with Beet.TV, Kristina Shepard, Head of Agency Partnerships & National Brand Team Lead, Roku, said,
We actually know that Roku users are five times more likely to click on an ad via their remote than scan a QR code.
With the new software, viewers will no longer need to enter a card number or address to buy straight from the ad. Shepard explained to Beet.TV,
It’ll all be pre-populated. They could see a product, enter a product page, explore images, details and click the remote with all of their information already stored, get an email from that retailer with information confirmation for their purchase and go right back to streaming.
We’re aiming to make it a frictionless seamless experience for that consumer that will obviously benefit the retailer and the marketer as well.
Roku’s other recent advertising innovations have included the launch of dynamic linear ads, adding a clean room to facilitate the use of advertisers’ first-party data, and introducing Nielsen’s Digital Ad Ratings audience guarantees and a watermark that validates video ads on its platform.
Interesting Read: Unlock The CTV Opportunity: What The Future Looks Like
Roku Brand Studio
Roku announced its Roku Brand Studio, which was launched a year ago, as an integrated product offering at the upfronts.
Through its partnership with Reese Witherspoon’s Hello Sunshine, “The Short List,” will feature 12 short-form films across the drama, comedy, documentary, and animation genres.
Roku Recommends is returning for a second season in September, this time in partnership with Variety to reveal top 10 lists plus Weekly Shows called The Pop-Off, In Case You Missed It, and Live And Let DIY.
Roku Channel
A Roku Channel is a home for free and premium entertainment on the Roku platform, which enhances the TV-watching experience. Roku Channel ranked amongst the top five channels on the Roku platform in the U.S. based on active account reach and streaming hour engagement in Q1 2022.
Roku unveiled a roster of new Roku Originals programming, including seven original series for The Roku Channel to be hosted by lifestyle/cooking celebrities Martha Stewart, Emeril Lagasse, Christopher Kimball, and more.
Other renewed upcoming titles will include “Weird: The Al Yankovic Story,” starring Daniel Radcliffe and Evan Rachel Wood; “SLIP,” starring Zoe Lister-Jones; “The Great American Baking Show,” starring Paul Hollywood, and Prue Leith; and “Honest Renovations,” starring Jessica Alba and Lizzy Mathis, and more.
Interesting Read: Clean Rooms Explained: How Marketers Can Prepare For Cookieless World
AVOD strategy For Netflix Ahead: Should Advertisers Rejoice?
Netflix plans to add ads. Yes, you read it right and it is the moment advertisers have been waiting for.
Netflix has been resisting advertising on its streaming service for years, but now it says it is “open” to charging lower rates for ads. Reed Hastings, co-chief executive of Netflix, says the company is introducing ad-supported plans to give customers more options. The company recently reported a loss of 200,000 subscribers in the first quarter.
“Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription. But as much I’m a fan of that, I’m a bigger fan of consumer choice.”
The news that Netflix is considering ad-supported options is the antithesis of its very essence- not to embrace ads. With Netflix’s position as the world’s largest subscription service and its vast user data, the service will soon become one of the highest-valued advertising platforms. And this makes many wonder that is Netflix AVOD for real? Find out below.
Interesting Read: Here, There, Everywhere, It Is Cross-Screen Advertising!
AVOD, an evolving marketplace
Millions of Netflix users were delighted with Netflix’s ad-free experience. The platform gained subscribers, increased its content budget, attracted more users, and so on and so forth. The competition, however, has diverted customers and increased Netflix’s costs. In order to grow, the streaming giant has to explore other sources of income except for subscriptions. A new AVOD service can significantly contribute to Netflix’s growth.
Streaming fans are seeing their TV bills climb as they pay for separate platforms to watch hit shows, such as Disney+, Amazon, Hulu, and Netflix. Several streaming services offer different tiers of subscriptions. Viewers can choose to have their shows interrupted with ads for a small fee. Even before Netflix’s dismal subscriber news, the new survey data from Accenture shows that consumers “don’t mind” adverts.
- 63% of consumers think it’s too expensive to pay for all the entertainment subscriptions they want
- 73% of consumers said that they would not pay more to remove ads from their shows
- 88% of consumers plan “no change” or a “decrease” in their entertainment spending next year
For instance, Warner Bros. Discovery’s HBO Max offers a premium ad-free tier at $14.99 per month and a $9.99 tier with ads. Advertisers have viewed this opening as a turning point both for Netflix and the overall stance of the industry. Consumers are put in charge. Since they are paying less voluntarily, they accept the ads too. Netflix’s offering would be a plan layer like Hulu, meaning that if subscribers still want the ad-free option, they’d be able to have that along with a lower price plan for ad-tolerant consumers.
Consumers, marketers, ad tech, and Netflix stand to gain as the deal increases its bottom line by billions.
Interesting Read: All You Need To Know About Connected TV Advertising!
Is joining hands with adtech the right way?
Netflix is the last major game-changer in the market for ad-supported video on demand (AVOD). The streaming giant is yet to clarify how an ad-supported tier would operate; however, it would join competitors like Peacock, Hulu, HBO Max, and the recently announced Disney+.
Disney and NBCUniversal both hold ad tech events during their annual upfront sales season, continuing to demonstrate a convergence of video publishers and digital platforms. Even if Netflix is going to cave to AVOD’s forces, it should consider the CTV ad viewership experience and ensure it maintains high-quality content. Connected TV ad buying faces a host of challenges around privacy, fraud, and measurement.
In his Netflix earnings last week, CEO Reed Hastings hinted that the company might opt to outsource platform ad tech work to tech providers in the market. He said,
“In terms of the profit potential, definitely, the online ad market has advanced and now you don’t have to incorporate all the information about people that you used to. So we can be a great publisher and have other people do all the fancy ad-matching and integrate all the data about people … so we can stay out of that.”
In order to enter the AVOD marketplace, Netflix could face a major challenge in moving from a subscription model to an ad-supported model. Their focus was on creating awesome content and getting subscribers, which is completely different from selling ads in such a way that they add value to the consumers’ experiences.
Mike Shields explained in this blog that no matter who runs the ads, Netflix must create watchable ads – viewers won’t shrug off terrible ads as “just SSP’s fault.” To get AVOD right, Netflix needs to take ownership of its ad business and build out operations from the ground up, then hire outside help as Amazon does. Its ad business reached $31 billion after it integrated its programmatic advertising internally.
Interesting Read: Bridging The Gap: Is YouTube Unifying Linear And CTV Ad Buying?
And the road ahead
As AVOD gains traction in the CTV space, it could be perceived as not only a low-cost alternative for the less affluent but also a fiscally responsible option.
The data of Netflix’s longtime customers are attractive to brands and very valuable. In fact, some retailers, such as Lowe’s, The Gap, and even Walmart, have launched ad services to boost revenue. This data is the ad value, along with the brand’s ability to connect with customers.
Interesting Read: Bridging The Gap: Is YouTube Unifying Linear And CTV Ad Buying?
Video Amp Acquires Elsy to Automate And Simplify Media Measurement
VideoAmp has acquired the automated campaign management platform Elsy, a move designed to further scale and accelerate the adoption of its measurement and currency solution as an alternative to Nielsen. In this way, advertisers can optimize their advertising dollars by placing their commercials across multiple media platforms.
VideoAmp gained notable attention over the past few months for its collaboration with media agencies and TV networks working to measure video audiences, an increasingly difficult task. In its latest move, VideoAmp hopes to simplify that challenging task. However, the company did not disclose the terms of the deal.
VideoAmp uses cross-screen TV measurement and attribution technology and has been riding a wave of broadcaster discontent with Nielsen. However, clients need more than just a different currency. CEO Ross McCray of VideoAmp told Adexchanger that the feedback from the clients was that their methodology is too manual. Hence, it was taking too long for clients, especially on the buy side, to test and operationalize different metrics throughout the purchase funnel with their partners and, from there, plan media campaigns accordingly.
Within an increasingly fragmented media ecosystem, there is a growing need to centralize solutions and automate campaign planning. A particular challenge for marketers is measuring deduplicated reach and outcome-focused metrics, such as brand lift and sales.
Interesting read: Here, There, Everywhere, It Is Cross-Screen Advertising!
The rationale behind the acquisition is that it claims to be “measurement agnostic” and able to optimize across all media sources. Elsy will reduce latency and time-consuming manual operations, while also eliminating the disconnect of measurement from day-to-day decisioning, taking the guesswork out of the equation and providing a holistic understanding of a campaign in unprecedented ways. It will integrate with VideoAmp to algorithmically provide recommendations for media optimization. Its software tracks and analyzes campaigns through the entire funnel, ranging from reach, frequency, programmatic retargeting, and eCommerce conversions and sales. Elsy CEO and Co-Founder, Laurent Colard, now SVP of Product at VideoAmp said,
“The level of data-driven insight and guidance generated for media professionals when we pair our technology and algorithms with VideoAmp’s current planning, optimization and measurement software is something the market has not previously had access to.”
Use of alternate Currency is easier now
Consumers are migrating away from stand-alone linear TV and have adopted streaming, the on-demand video that might be watched on a service like Netflix or Paramount+, or via YouTube or a network’s own offerings. Currently, the job of measurement has become extremely crucial. Even Nielsen trying to gain back its industry accreditation for its national rating system while introducing a new product that it says will allow advertisers and television networks to do better targeting. Meanwhile, TV networks are linking up with companies like VideoAmp to develop “alternative currencies” to those long devised by using Nielsen ratings.
VideoAmp’s data is being tested by media agencies and programmers including Paramount and Discovery. McCray said that participants in the tests said that most of their time was spent manually inputting the new currency because their systems aren’t set up to handle it. Two things were requested- the ability to ensure results and budget tracking to support it. Cray explains how the acquisition will correct these problems,
“With this acquisition we’re doubling down on our position and saying we’re not only providing measurement, attribution and currency, but we’re also driving more of the automation for campaign management because that is going to accelerate the adoption of our measurement.”
Elsy will enable advertisers to forecast consumer activity and determine if they should move their ad money between different platforms. McCray stated to Adexchanger that “Currency is a nightmare to track manually.” The aim is to integrate “some of the material pieces of the workflow ” by next year, but “a good deal” will happen over the next six months.
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