Why Marketing Shouldn't Wait: A Fundamental Aspect of Every Stage

• by Michael Baer , September 26, 2023

I have the privilege of working with numerous startups and early-stage companies.

Yet what surprises me is a recurring sentiment I hear among many startup CEOs and leaders: "We're not ready for marketing yet."

It’s time to debunk this notion altogether. On the one hand, it makes perfect sense that founders and leaders are busy juggling the many different aspects of building their new idea and bringing it to life, from refining and building their product or service, building the team, sourcing funding, developing relationships and partnerships, working through operational considerations, and beyond.

However, marketing should never be relegated to a late-stage, last-minute consideration in one’s start-up journey. Just because it will ultimately drive promotion and advertising during the in-market stage for the company doesn’t suggest that marketing is just about ad campaigns or running social media efforts. While these activities might become part of your marketing activation, there's much more about marketing that make it fundamental, especially for early-stage companies.

So, what does marketing entail for an early-stage company?

Identifying the problem you solve: Marketing is about understanding the problem your product or service addresses in the world and whether it's a problem that demands a solution. Often, founders get so engrossed in their technology or product that they overlook the critical question of why it's needed – which can have a detrimental effect on all other activity, especially rallying support and funding.

Knowing your customers: Effective marketing requires an intimate understanding of your customers -- their pain points, challenges, desires, and needs -- and is essential for framing your business's value proposition effectively. Ultimately, you’ll want to know how customers approach the category, how they shop for solutions, and how differentiated your offering is to others that they might consider.

Knowing your customer also means deciding whom to focus on – and whom NOT to. Rather than frittering resources targeting anyone who might buy your product, it’s important for marketers to identify their minimum viable audience,  the group that represents the most attractive immediate segment to begin to build on.

Crafting a compelling narrative: Marketing involves creating a compelling story about the world that highlights the necessity of your product and why people should care about, support or buy it. No pitch or presentation can persuade investor or customers if it isn't crystal clear and centered around addressing real needs and desires. If you’re saying you don’t need marketing because you’re still seeking funding, then you might never get there.

Developing a go-to-market strategy: Marketing helps to define the best strategy for the commercialization of your company’s products and services – and how to derive the greatest value from them. Unfortunately, many early-stage companies devote too little time to this type of planning, often leading to wasted resources and time when they need to realign their focus.

So, is there any stage in a business's growth journey where marketing isn't fundamental? The answer is a resounding "no." Marketing need be an integral part of your business from the very beginning, helping you define your purpose, understand your audience, tell your story, and chart a path to success. Don't wait. Start marketing now.

 

The Reality of Customer Acquisition: Everything, Everywhere, All at Once

• by Nick Drabicky , September 25, 2023

The following was previously published in an earlier edition of Marketing Insider.

Consumers do not care about your channels. They want what they want, when they want. And that preference could change an hour from now.

In this always on, channel-agnostic consumer reality, marketing and creative options are almost limitless. So, why do brands and retailers continue to think investing only in performance media will meet customers where they are?

As privacy rules have changed and digital marketing has grown and matured, combined with completely different customer behavior than pre-COVID, it’s past time for a change in how we present our brands to customers. Here are eight options for advertisers to reach their alwayson customers:

What’s old is new again.

1. Data-driven direct mail. Today’s version of direct mail is a far cry from the circulars of years past. With a data-heavy approach and easily tracked results, direct mail has become a logical extension to many media plans. We have routinely found that targeted and measured direct mail can elevate the impact of broader digital campaigns.
2. Digital out-of-home is on the rise. Out-of-home advertising has seen a resurgence since 2020. Technology advancements make it almost as targeted and measurable as other digital media tactics. Brands can leverage advanced measurement solutions like footfall studies, personalization based on location, and retargeting outdoor-exposed consumers.

Social is far more than Meta.

3. TikTok, of course. Through remarkable user growth and smart product development (including Video Shopping Ads), TikTok has become a must-consider for every media plan. While the barrier to entry is low financially, it does have a perceived high creative barrier to entry. This has kept many traditional performance marketers on the sidelines, which means it is still quite affordable and undersaturated.
4. Pinterest: the little engine that could. Pinterest continues to improve and innovate in a meaningful way. Sitting on a mountain of consumer insights, and audience analysis, Pinterest presents a great opportunity to drive brand awareness and product consideration.
5. Twitter (now X): Just kidding.
6. Snapchat keeps innovating. It is one of the most successful platforms for creative brand awareness, consideration, reach, and engagement. For example, a leading retailer’s custom AR-filtered storefront for virtual try-on resulted in significant lifts in awareness, consideration, and purchase intent.

Up-and-coming opportunities.

7. Mobile is at a crossroads. SMS messaging will soon resemble email: annoying numbers of messages with decreasing value. But mobile offers an opportunity for brand engagements in the palm of a consumer’s hand. It’s personal. Treat it as true clienteling, with unique offers of value, and you could be seen as a valued brand with excellent service.
8. AR and VR aren’t going away. Yes, there is a significant barrier to entry. No, it’s not very trackable (yet). That said, in one form or another, AR/VR are not going anywhere. We are already seeing consumers embrace AR in beauty and wellness for try on, color matching and recommendation capabilities.

The days of performance media as the only way to reach new customers have passed, and there is endless opportunity in the year ahead to evolve with customers. Test early and often to ensure that when they are ready to interact, shop, and buy, your brand and products are universally present.

Here's some strategic information for local-direct businesses to consider when posting their brand and its benefits to consumers within their designated market area (DNA). Philip Jay LeNoble, Ph.D.  

 

3 Strategic Questions Any Marketing Executive Should Answer

• by Joe Zappa , Yesterday

All marketing and business leaders understand the need for a strategy, but this vaunted exercise called strategy is elusive in practice.

Marketing teams often get stuck in reaction mode. But even if a marketing leader were to focus on strategy, where would she begin? At a high level, marketing strategy boils down to three questions: Are we telling a unique story that accentuates our competitive advantage? Are we connecting with our target audience? And do we have the measurement frameworks and technologies required to assess and optimize our efforts.

Tell a Unique Story

Most companies suffer from commoditization. Companies get lumped into categories (such as demand-side platforms or data-management platforms), and few customers can tell the difference.

One way to transcend commoditization is to obsess over product features. This doesn’t work for the majority of a company’s audience because it isn’t tangible enough to be memorable or capture their attention.

There are two better ways to earn customers’ attention. The first is focusing on customer pain points. For example, a customer data platform isn’t great because it has the most powerful technology for streamlining customer data, but because it uses that power to help marketers increase return on ad spend and drive cost-effective customer acquisition.

The second is aligning the power of your product with a movement, like environmentally sustainable advertising. This trendy appeal will draw in a wide audience, many of whom will then advocate for or buy the solution.

Distribute the Message

When you’ve established a differentiated story, it’s time to distribute it.

Actively engage influencers and prospects who will amplify your message. On social, make a list of 50 highly active users in your industry and engage with them directly. At events, give talks and host dinners on your big issue. Via PR, directly engage with reporters who cover your key topic.

Identifying a broad story that aligns with industry trends makes successful incursions into key channels much easier. When you have a story aligned with your industry’s direction, you have something genuinely interesting to talk to your audience about. You’re not just touting your own product’s benefits.

Measure the Impact

Ultimately, marketing is judged on its ability to drive sales opportunities. Marketing strategists can’t lose sight of this. They should buy or develop a dashboard that assesses their contributions to revenue.

But there’s a wide gap between customer touchpoints and sales qualified leads. So, marketers also need to establish leading indicators that show traction. On social, this might be followers in their target audience. With PR, it might be placements. These aren’t valuable in themselves, but they lead to value.

Marketers who have strategic hypotheses, act on them, and can measure and optimize those actions empower themselves to make a case for marketing to the rest of the leadership team. Tactics are how the work actually gets done. But it’s strategy that makes the work valuable and allows marketers to communicate that value.

 

Fox Television Stations Strikes Generative AI Deal with Waymark

• by Wayne Friedman , 3 hours ago

Fox Television Stations has signed a deal with ad-technology company Waymark that allows local advertisers to create -- in minutes -- video advertising through generative AI technology.

The deal will cover Fox owned-and-operated stations in 17 markets. Financial terms of the deal were not disclosed.

Previously, a number of Fox TV stations -- KTTV Fox11 Los Angeles, KRIV Fox26 Houston, WJBK Fox2 Detroit and KMSP Fox9 Minneapolis -- had been a pilot test with Waymark’s technology.

The Fox deal follows similar agreements earlier this year with Spectrum Reach, Gray Television, Beasley Media Group and Morgan Murphy Media. 

Waymark CEO Alex Persky-Stern believes the deal with the major TV station group will help “open the door to premium video advertising for millions of businesses who otherwise wouldn't have had the budget, time, or know-how."

Fox Television Stations owns and operates 29 full-power broadcast television stations in the U.S. 

Waymark says its technology is listed in suggested, recommended directories on streaming services Hulu and Roku for advertisers that need creative help.

 

Streaming, Linear TV Scatter Pricing Still Weak, But Higher Volume: Analyst

• by Wayne Friedman , Today

Although there are some signs the advertising business has been recovering, traditional and streaming TV fourth-quarter “scatter” ad inventory continues to be “depressed.”

This analysis comes from panelists at Wells Fargo Advertising Day, according to Steven Cahall, media analyst of Wells Fargo Securities.

“[The fourth quarter] looks to be remaining weak,” he says, “pacing down year over year and flat or down in the quarter versus [previous quarter].”

This comes after the summer television upfront market for the 2023-2024 TV season witnessed rare single-digit percentage declines of around 1% to 3% -- with even more uncertainty due to the writers' strike (starting in May and now ending) and an actors' strike beginning in July, which is still ongoing.

Television and streaming scatter market prices have been weak, according to many media-buying executives, since the fourth quarter of 2022.

Cahall added: “Linear scatter may be seeing weaker demand because TV ad buyers committed to more upfront volume this year at the behest of media networks, enticed by attractive pricing... and looser cancellation contingencies.” 

Traditional TV upfront deals placed for the fourth quarter are firm -- with no cancellation options, with the first quarter at a 25% cancellation rate; and second and third quarters at a 50% cancellation rate.

While the broader total ad industry picture seems tentative for the short term, according to Wells Fargo, there are better prospects down the line. “We don't think advertiser sentiment is improving...  with ad growth next year likely a bit below 2023.”

That said, “we also think the industry is setting up for [approximately] real GDP 2024 organic growth.”

 

MSNBC Q3 Gains, Narrows Prime-Time Viewing Race with Fox News Channel

• by Wayne Friedman , Yesterday

Fox News Channel continues to be challenged by MSNBC as top cable news network, according to Nielsen third-quarter 2023 results. 

Fox News Channel was down 20% to a Nielsen-measured 1.75 million prime-time viewers versus the same time period a year ago, while MSNBC grew 1% from the year before to 1.29 million in the third quarter.

CNN came in at a distant third place -- 596,000 -- also down by double-digit percentages (17%) versus the same period a year before.

Behind CNN are some up and comers: Newsmax (276,000) and Nexstar Media Group’s NewsNation (87,000). Among business channels running in prime time, CNBC led with 175,000 viewers, followed by Fox Business Network at 119,000.

Total day viewers show much of the same order in TV networks, with Fox News Channel at 1.1 million, MSNBC at 813,000, CNN with 471,000), Newsmax at 169,000 and NewsNation with 55,000).

The top performer in total day viewing -- MSNBC -- was 4% higher. The networks that dropped the most were Fox News -- down a massive 22% -- and CNN, down by 16%.

The most-watched individual cable TV prime-time news show was MSNBC's “The Rachel Maddow Show” with 2.6 million viewers, leading for the second straight quarter. “Maddow” came in at 2.5 million viewers in the third quarter of 2022.

According to TVnewser, Nielsen MRI Fusion showed that on Monday nights more politically focused viewers who identify themselves as ‘independents’ tuned more into MSNBC than Fox News Channel or CNN.

 

The State of The Media Planning & Buying Union (Um, What Union?)

• by Joe Mandese  @mp_joemandese, September 25, 2023

Two seemingly unrelated pieces of news this morning made me wonder whether it might not be time for media planners and buyers to start negotiating some clauses in their union contracts to protect them from displacement due to AI. Then I remembered media planners and buyers are not part of any unions, although maybe they should be.

So you probably already figured out that the first piece of news was that the Hollywood unions have reached a tentative deal ending one of their longest strikes ever. And while the terms of that deal will not be disclosed until the agreement is finalized, it is expected that it provides some protection from future uses of AI displacing human writers and actors.

While that would be worthy of a discussion for planners and buyers in its own right, it was the second piece of news -- the release of a World Federation of Advertisers study finding that media teams are playing backseat role in setting the AI strategies of big marketing organization -- made me think it was time for planners and buyers to have this conversation.

On the surface, the WFA study might seem like good news for agency media executives, because most of the respondents said they were mainly focused on the role AI can play in creativity, content creation, customer experience, and things like that.

The reason I'm not so sure, is that I believe the role of AI in media planning and buying is already baked in, and sadly, the media teams are only a secondary voice in setting the strategy of it going forward.

How is AI already baked in for media? Well, think about it. While the ad industry has talked about creative use cases for years -- ie. "dynamic creative optimization," "personalization," etc. for years -- most of the actual earliest uses of machine automation have been in the media planning and buying process: ie. programmatic.

And while yesterday's programmatic isn't today's or tomorrow's AI-powered media services, it doesn't take a great mental leap to see how advances in machine learning and AI could ultimately displace -- not augment -- what human planners and buyers have long done, especially decision-making.

Some of the earliest uses of machine learning in advertising have in fact been about media decision-making and or allocation.

Take marketing-mix models, which processed the Big Data of their day to explain which parts of the media mix were performing best. It's still used today, and various iterations of real-time attribution that have grown from it.

In fact, one of the first examples of machines processing data that previously were analyzed by people was the introduction of audience reach optimizers in the early 1990s.

When I first started writing about optimizers, I asked the late media-planning guru Erwin Ephron why agencies needed powerful computers to analyze what people used to do manually.

After thinking about it for a while, Ephron told me to write some numbers down on a piece of paper: 1.125 followed by 12 zeroes.

It was the first time in my life I had written the number quadrillion, but Ephron told me that was the number of permutations that a planner would need to consider to process all of the possible options in the national TV programming marketplace of broadcast and cable networks and syndication.

And that was 30 years ago.

Over the next several decades the progression of machine automation of media planning and buying has accelerated, but has largely still been people controlling what machines processed, or at least making decisions on what they outputted.

I don't know exactly when machines will be able to do the second parts as good as or better than humans, but I know -- just like Erwin Eprhon did -- that it's just a question of math. Not if, but when and how much.

So here's my advice to any planners or buyers interested in being around for the long haul. Get a copy of the final Hollywood agreements, read the parts related to the use of AI and how it can or cannot explicitly displace human labor, and think about framing something similar for media services.

I'm not going to suggest what you do with it, because Madison Avenue isn't exactly a collective of union shops -- but at least you'll know what the baseline is for a comparable industry going forward.

 

TV Ad Price Deflation Projected to Be Sustained, And Not Just for The U.S.

• by Joe Mandese  @mp_joemandese, 2 hours ago

With the exception of radio and out-of-home, U.S. legacy media ad prices continue pacing downward and are projected to be deflationary for the first time since the COVID-19-related ad recession. Linear TV, in particular, is seeing downward price pressure, according to the just-released third quarter edition of ECI Media Management's quarterly inflation updates.

That's even worse than the roughly 2% decline in linear TV advertising costs ECI was projecting for this year when it released its second quarter update, just as the Hollywood strikes were beginning to derail original scripted TV programming production.

And even though the Writers Guild of America has settled its strike, and the actors union (SAG-AFTRA) are expected to follow suit soon, the impact of the strikes is already baked into ECI's projections.

Coupled with the ongoing decline in linear TV viewership, which has fallen below 50% for the first time, ECI characterized TV ad pricing as "set to deteriorate further into deflationary territory."

"Sports content is expected to be an exception to the deflationary trend, with demand for and viewership of the NFL and NCAA likely to remain strong," the report notes.

While the long-term impact of the Hollywood strikes is projected to be most acute on U.S. ad prices, ECI projects it will also affect the global advertising marketplace, noting, "American content is of course consumed worldwide, so the effects are being felt globally."

 

Who's Really Paying the Monthly Streaming Bill? Heavy Streaming Users

• by Wayne Friedman , Staff Writer, 5 hours ago

Although there has been much analysis of expanding ad-supported streaming platforms, consumer spending on streamers -- subscription fees -- keeps rising.

Brian Wieser, veteran media analyst and writer of Madison & Wall, a Substack column, says this:

“While there are many observers who have opined that consumers are dropping or are likely to drop their streaming services as prices rise -- whether for ad-free or ad-supported offerings -- total [consumer] spending on streaming services is consistently rising."

That number is around $35 billion a year. And while cord-cutting continues to loom over the traditional pay TV business, all isn’t lost yet. It remains at a high level -- around $100 million, down from $110 billion in 2017.

For many premium streaming platforms, it's all about offering options. Recently Amazon Prime Video decided to offer a limited ad-supported option to its service.

Why the rise then in subscription revenue? Because heavy TV-streaming users -- such as those on Prime Video -- will continue to look for ad-free experiences, and will spend more to get it.

Along with the announcement that Amazon will be offering the ad-supported option, it also said that it will be offering an additional ad-free “upgrade” for $2.99 more a month in the U.S.

“I am persuaded by the idea that when given the option, most consumers will pay for ad-free experiences if they are consuming a lot of a service,” says Wieser.

He thinks perhaps by the end of 2024 only a quarter of Prime Video subscribers might pay up for the ad-free upgrade but these will be the heaviest consumers of the platform.

This means “lighter” streaming users -- including those that watch those free, ad-supported platforms like Pluto TV and Tubi, with mass appeal -- will continue to avoid any or all monthly fees.

‘The less intense a consumer's relationship with a service, the more likely they will stay on an ad-supported tier, so long as they maintain their subscription.”

So if you are restless big brand advertiser trying to figure out your future media plans, what does this mean to you? 

Perhaps very little.  Advertisers looking for new alternatives to the declining influence of linear TV ad inventory will continue to struggle to get the reach they need.

“I remain doubtful that the news meaningfully alters the industry's long-term trajectory.” There will be “no change to long-term challenges for ad-supported TV.”

And the struggles for the premium streamers as well will continue in seeking profitability. If that's not enough analyst say there is a 41% chance of a recession in mid-2024. 

Happy media planning.

 

Culture And Race Need a Conscious Uncoupling

• by Roberto Alcazar , Leena Danan , September 22, 2023

Flashback to this time last year and Carlos Alcaraz made U.S. Open and ATP history, becoming the youngest No. 1 ranked player in the world.

Coco Gauff’s latest U.S. Open victory was given a presidential seal of approval.

Both Carlos and Coco struck a cultural chord, without anything to do with race or ethnicity- game, set, match. The endorsements, partnership opportunities, and content and social influencer activations will soon follow, but will marketers deem this a multicultural or general market activation? 

Ariana DeBose made history as first Afro Latina, openly queer actor of color to win an Academy Award for acting.

Rihanna was the first female billionaire and the first known pregnant person to star in a Super Bowl Halftime Show, which also became the most watched of all time.

As “the minority” continues to become “the majority,” and continues to make history, we hope that the term “minority” dissolves as quickly as an IG story and we pave the path to become One Market -- powered by sophisticated business intelligence suites and leveled up with cultural insights rather than multicultural demographics.

Multicultural terminology was born from activism, but has since become marketing jargon.

In the 1970s, activists lobbied the U.S. Census Bureau to create a category that included Mexican, Cuban and Puerto Rican immigrants, who were being classified as White; the term “Hispanic” was born.

The term “Latino” dates to the 19th Century, but only made its first appearance in the 2000 Census.

“LatinX”, the gender-neutral version of “Latino” that emerged in the 2000s, has not gained much traction, with only one in four U.S. Hispanics having even heard of the term.

With this slew of multicultural targeting terms also came new strategies such as “total market” (using general market creative to target U.S. Hispanic consumers), but this again ignored the nuances and cultural insights of specific segments that are proven to increase the probability of higher advertising ROI.

The U.S. Hispanic viewpoint was perfectly encapsulated by Danny Trejo in celebration of Hispanic Heritage Month on the "Late Show with Stephen Colbert:“ "All Hispanics aren’t Latinos, and all Latinos aren’t Hispanic, but all Latinos and all Hispanics are incredibly handsome.”

All the signs point towards the notion that culture and race need an uncoupling.

For culture to redefine its course, it needs rebranding.

Maitreyi Ramakrishnan, the star of Mindy Kaling’s “Never Have I Ever,” has touched upon this notion in her red carpet remarks, “I get a lot of comments from people, even from a white person, and they are like, ‘Oh, my God, I related to "Never Have I Ever".’ And I’m like, Yeah. I don’t think losing a parent is just a South Asian thing. It happens to other people. Going through high school is not just a South Asian thing -- a good majority of us did that. Even though I am South Asian, I want people to know we aren’t that different. Our stories are relatable.” 

We can certainly relate. We are all horses in the race, but race is not what makes the unicorn.

There are a plethora of definitions of culture, and most tap into the notions of groups, customs, beliefs and time. They say timing is everything, right? Simu Liu, who dons the cape of Marvel’s First Asian Superhero, fittingly timed his book release announcement on the first day of the Lunar New Year.

The U.S. Postal Service’s Lunar New Year stamps have also found a place in pop culture and are #makinghistory as some of the most successful issues in the history of the Postal Service.

As we approach the fourth quarter, closing the books on the Year of the Rabbit, let’s hop forward together.

It is believed that The Rabbit tends to affect those people who are too attracted to comfort, which makes them forget about the value of responsibility. Let’s make it our responsibility to get uncomfortable with the marriage of culture and race, and with the terms multicultural and general market.

We are one market.

They Spend $3.4 Trillion. Why Can't Brands See Them?

• by Sarah Mahoney , Staff Writer @mahoney_sarah, 6 hours ago

Target ad

Marketers have been talking about the growing clout of the Latino market for decades, yet it’s still one of the least understood demographics. If American Latinos were a country, they’d have a gross domestic product of $3.2 trillion, up from $2.8 trillion last year. That makes them the fifth largest economy in the world, behind the U.S., China, Germany and Japan. Ana Valdez, president and chief executive officer of the Latino Donor Collaborative, tells Retail Insider more about the new realities of this fast-changing segment.

Retail Insider: The LDC has just published its annual analysis, and so many details are staggering, especially the speed of change. Few people understand this is the third-fastest growing economy, rivaling China’s growth rates. And Latinos make up 78% of the workforce growth. What’s the biggest misconception?

Ana Valdez: We continue to see the media portraying Latinos as if they're jumping over the border, that they are underserved and suffering. And it is true that 15% live in poverty. But nobody talks much about the 85% reflected in this report who are not poor.

Retail Insider: What are some of the most notable ways they prosper?

Valdez: When you look at income growth, educational attainment or entrepreneurship, they do better than other cohorts. Take home buying. Latinos account for more than 55% of all the new homes bought, yet we're only 19% of the population.

Retail Insider: Was there anything in this year’s data that surprised you?

Valdez: Yes. We keep saying that Latinos are very young and that we haven’t even begun to see how that will impact the workforce in the future. But this year’s numbers surprised me: The most common age group among Latinos is 10 to 14, compared to 58 among non-Latino Anglo-Americans.

Retail Insider: In the overall U.S. population, the birth rate is the lowest in decades. And young mothers have been hit especially hard, with hundreds of thousands leaving the workplace since the pandemic. Tell us what life is like for young Latina moms.

Valdez: Latinos give a great deal of importance to family and kids' education. Latino immigrants (and I am one of them), focus 100% on the opportunity for education in this country. And so when you had COVID bringing kids home, that felt like a big tragedy. Many mothers stay home and aren’t returning to work because they are finding new ways to help kids in their education. They’re also founding new businesses much faster than other groups to make up some of that income while prioritizing their kids. And they’re apprehensive about their children’s mental health.

Retail Insider: Which risks, particularly?

Valdez: We recently did some research with the Society of Latino Engineers and found that 17% of engineering students are Latino, which is good. That’s up from 4% in 2010. What’s not good is that at least 60% of them say they had one or various mental health issues as they got through college. Many are first-generation, so they don’t have as many resources or role models. They don't see themselves reflected in the media.

Retail Insider: What do most national brands get wrong about the Latino market?

Valdez: Latinos are careful to buy from brands that represent them well and are aware of brands that don't. Target is the best example. Target has flourished, not just because of its messaging but even with product development. Other companies think they can use some “diverse” effort, and Latinos will come.

Media is a good example. Even though we are just 20% of the population, we consume 25% of the box office. And it’s easy for movie marketers to think, "We don’t need to cater to them—they are coming to us anyway." But now, the box office is shrinking because Latinos and other non-represented groups are going to places like TikTok and YouTube. Broadcast and cable used to be a big thing, and now those platforms are also shrinking.

Retail Insider: What about the messaging and programming aimed at Latino and Hispanic audiences?

Valdez: Authenticity is so important. To get to that, you need to have Latinos making decisions at every level. Latinos are very sensitive to their culture.

Retail Insider: As we head into the general election next year, the Latino vote is already getting a lot of consideration. Any predictions?

Valdez: Latino youth is integrating into the voting bloc. And they are different. Older Latinos, we were raised to lower our heads, work hard and be humble and grateful. Our kids are much more outspoken. They were born here, and for 90%, English is their first language. They know their power.

Both parties will have to be very careful because they are underestimating the power of Latinos. We saw a lot of switching in the last presidential election. Look at what happened in Georgia, Arizona, New Mexico, Colorado, Washington and Nevada. And Voto Latino is registering millions of new voters. They will have a significant impact. Latinos will be the biggest surprise in this election, and I think people are energized.

COMMENTARY The Reality of Customer Acquisition: Everything, Everywhere, All at Once

 

COMMENTARY

The Reality of Customer Acquisition: Everything, Everywhere, All at Once

• by Nick Drabicky , September 25, 2023

The following was previously published in an earlier edition of Marketing Insider.

Consumers do not care about your channels. They want what they want, when they want. And that preference could change an hour from now.

In this always on, channel-agnostic consumer reality, marketing and creative options are almost limitless. So, why do brands and retailers continue to think investing only in performance media will meet customers where they are?

As privacy rules have changed and digital marketing has grown and matured, combined with completely different customer behavior than pre-COVID, it’s past time for a change in how we present our brands to customers. Here are eight options for advertisers to reach their alwayson customers:

What’s old is new again.

1. Data-driven direct mail. Today’s version of direct mail is a far cry from the circulars of years past. With a data-heavy approach and easily tracked results, direct mail has become a logical extension to many media plans. We have routinely found that targeted and measured direct mail can elevate the impact of broader digital campaigns.
2. Digital out-of-home is on the rise. Out-of-home advertising has seen a resurgence since 2020. Technology advancements make it almost as targeted and measurable as other digital media tactics. Brands can leverage advanced measurement solutions like footfall studies, personalization based on location, and retargeting outdoor-exposed consumers.

Social is far more than Meta.

3. TikTok, of course. Through remarkable user growth and smart product development (including Video Shopping Ads), TikTok has become a must-consider for every media plan. While the barrier to entry is low financially, it does have a perceived high creative barrier to entry. This has kept many traditional performance marketers on the sidelines, which means it is still quite affordable and undersaturated.
4. Pinterest: the little engine that could. Pinterest continues to improve and innovate in a meaningful way. Sitting on a mountain of consumer insights, and audience analysis, Pinterest presents a great opportunity to drive brand awareness and product consideration.
5. Twitter (now X): Just kidding.
6. Snapchat keeps innovating. It is one of the most successful platforms for creative brand awareness, consideration, reach, and engagement. For example, a leading retailer’s custom AR-filtered storefront for virtual try-on resulted in significant lifts in awareness, consideration, and purchase intent.

Up-and-coming opportunities.

7. Mobile is at a crossroads. SMS messaging will soon resemble email: annoying numbers of messages with decreasing value. But mobile offers an opportunity for brand engagements in the palm of a consumer’s hand. It’s personal. Treat it as true clienteling, with unique offers of value, and you could be seen as a valued brand with excellent service.
8. AR and VR aren’t going away. Yes, there is a significant barrier to entry. No, it’s not very trackable (yet). That said, in one form or another, AR/VR are not going anywhere. We are already seeing consumers embrace AR in beauty and wellness for try on, color matching and recommendation capabilities.

The days of performance media as the only way to reach new customers have passed, and there is endless opportunity in the year ahead to evolve with customers. Test early and often to ensure that when they are ready to interact, shop, and buy, your brand and products are universally present.

 

COMMENTARY

The End of Ad-Free Streaming?

• by Cory Treffiletti , Featured Contributor, 5 hours ago

That’s it!  The era of commercial-free streaming is essentially over.

This past week, Amazon announced it will be including ads in its Prime Video streaming service, and offering subscribers the chance to pay more to avoid them.

This follows on the heels of Netflix and Disney offering the same services, although they all seem to have gone about it differently.  Both Netflix and Disney first raised the price of their core services, and then announced the addition of an ad-supported model that will be less expensive.

To date, the data seems to suggest that very few (if any) people have opted to downgrade to the ad-supported model.  This path chosen by Amazon will certainly help us understand if people are willing to pay $2.99 more per month to avoid the interruption of ads, or not.

Why are the streamers relying on a model that is questionable in terms of efficacy?  Didn’t we learn from the Internet 1.0 that an old model doesn’t always work in a new medium?

I work in advertising, so I do pay attention to  ads, but the data suggests not many other people do.  Some studies show that as much as 90% of viewers will skip, ignore, and pay to avoid the commercials completely across all platforms.

That means what advertisers spend on video is wasted to the tune of 90% of their budgets.  As a media guy at heart, I think that number is painful.  Video is the fastest growing medium across all channels, and it is the core of a marketers’ budget in today’s landscape.

When we first launched the Internet, we looked to print for an ad model that would work, and we came up with static ad banners.  They continued to evolve, but banners are still the lowest common denominator of online ads.  Search became the most effective model, and it took Google to innovate on what others had already been doing with classifieds.

The streaming services are faced with a conundrum.  They can’t reliably acquire or retain more subscribers, so they are looking for additional ways to increase their revenue.  They are currently relying on the old-school standard of commercials, but consumers don’t like commercials.  They hate having their content interrupted.

There must be other options for them.  In full disclosure, I work with a company that is doing product placement, which is a solid opportunity for the streamers, but in fairness, I do think they have even more ground to work with.

Streamers have an entire ecosystem of monetization opportunities they can explore.  Beyond product placement and embedded ads, they have the start menu and the search functions in their UI.  Targeted display ads and integrated ads based on the content being searched represent a very interesting place to reach an audience with advertising that is targeted.

Streamers also have the opportunity to embed clickable shopping into their UI.  Disney+ recently started doing this, but I have been wildly unimpressed by this feature, since it’s buried deep in the viewing experience, making it hard to find.  If it was surfaced earlier and more upfront, it could work extremely well.  

Even the introduction of full-screen ads during the start-up, search and selection of shows to watch could be interesting, more like how the movies do trailers and ads upfront.  The consumers do not like their content interrupted, so why do we keep interrupting them?

The models will continue to shift over time as streamers look to create new ways to monetize their content.  Some will work better than others, and the next two to three years will tell the tale.

 

Consumers Decrease Streaming Services, Spending, But Increase View Time

• by Karlene Lukovitz  @KLmarketdaily, Yesterday

The average number of streaming services used by consumers decreased from 11.6 in Q4 2022 to 10.9 in Q2 2023, and their average streaming spending declined from by nearly $20 a month, from $189 to $170. 

Yet, average time spent watching all types of streaming video rose from 4.4 hours to 4.7 hours per day, or 6.8%, during the same six-month period. Meanwhile, time spent watching pay TV services declined. 

That’s according to the latest video trends report from TiVo, based on a survey of 4,518 North American adults in Q2. 

Time spent with subscription-based video-on-demand/SVOD services rose 4%, to account for 30.7% of overall viewing time; ad-supported VOD/free, ad-supported services and social video view time rose 6%, to a 28% share; and vMVPD time rose 1%, to a 7.6% share, while time spent with cable and satellite pay-TV services dropped 7%, to a 28.1% share. 

The increase in AVOD/FAST reflects consumer budget constraints and major subscription video on demand (SVOD) companies launching lower-cost, ad-supported tiers. This new SVOD/AVOD hybrid structure has provided consumers with more flexibility, letting them consolidate subscriptions, cut costs and still watch the same or more amount of content, says TiVo.

“Consumers know what they want in a video service and are adjusting their entertainment habits to fit their needs—whether that be cancelling their SVOD subscriptions or reviving their cable,” said Scott Maddux, VP of global content strategy and business at TiVo parent company Xperi. 

The average number of paid video services per household declined from 7.6 to 6.9 in the first half, although that was up from 6.7 in Q2 2022. The average number of nonpaid services upticked from 3.2 in Q2 2022 to 3.9 in Q4 2022 to 4 in Q2 2023. 

As in the past, consumers with higher household incomes reported using more sources, but the gap was considerably smaller in Q2 2023. 

However, income is not as large a driver of number of sources as geography and age. For example, U.S. respondents reported 12 sources, on average, to Canadians’ 7.1.

Younger consumers continue to use more sources, on average. But in Q2, Millennials decreased their number of video sources by 11%, to 13.5, while all other age groups increased their sources by significant percentages -- including boomers, up 42%, to 7.4 sources.

In Q2 2023, Tubi beat out Roku Channel to become the most commonly used AVOD/FAST service in North America, according to this survey. Other top services include Pluto TV and Freevee. 

72% of all AVOD/FAST viewers noted watching some form of free livestreaming TV or FAST channels. In Q2 2023, those accounted for roughly half the viewing time of all AVOD/FAST services. 

While Netflix, Prime Video, Disney+ and Hulu remain the most commonly used SVOD services, the number of viewers who use Peacock’s ad-supported tier rose 4%, to 63.3%, surpassing Hulu, at 54.6%, and Paramount+, at 51.7%.

Social video users grew from 80% in Q4 2022 to 85% in Q2 2023. YouTube dominates social video content, with 54% of respondents listing this as their most commonly used social video

source. Only 20.0% of all respondents ranked TikTok. 

While 22.9% of respondents have canceled a service in the last six months, 28.7% started subscribing to a new service. That is down from 34.4% who started subscribing to a new service in Q4 2022, but remains consistent with Q2 2022 numbers. Over 44% of respondents say they usually continue subscribing

to a new service for at least one year, a YoY increase of about 3%. Forty-one percent say they have room in their budgets for additional services. 

Large libraries of good content and good original programming ranked first and second in reasons for signing up for a new SVOD (cited by 42% and 32.5%, respectively), but wanting to watch one specific show or movie was third (31.9%). 

Nearly a quarter (22.6%) of video time is spend watching local content, and a stable 59% of respondents consider it somewhat or very important. Forty-two percent consider local sports content important — up 7% from Q2 2022 — and 66% and 69% consider news and weather important, respectively (both unchanged year-over-year). 

In fact, while virtual multichannel video programming distributor (vMVPD) continues to be a top competitor to pay TV, 28% of people who cut the cord later decided to resubscribe to traditional TV to solve their need to watch sports, live events and local programming. 

Seventy-one percent of respondents reported having pay-TV subscriptions in Q2 2023, compared to 73% in Q4 2022 and 74% in Q2 2022. Twenty-seven percent of those with pay TV service said they plan to cut the cord within the next six months—down from 29% in Q4 2022, although up from 23.4% in Q2 2022. 

Ad-free SVODs still have the highest content quality rating, but it slipped notably over this past year. vMVPDs and AVODs saw their ratings rise slightly. Ad-supported SVODs still lag ad-free ones by 11 points, and AVODs/FASTs lag them by 17 points. TV network apps’ rating declined slightly. 

Content discovery continues to be a pain point, with 82% of consumers saying they’re prone to browsing before making a final selection, and over 60% using multiple apps in the process. It’s “essential” that entertainment providers focus on solving consumer content discovery issues, stresses Maddux. 

When it comes to discovery methods, word-of-mouth remained strong year-over-year, which put it on top, over streamers’ ad campaigns, as the percentage of viewers citing commercials as a top resource drop by six points year-over-year.

 

As for devices, TV remains the preferred choice by more than 3 times other types of devices for watching video. Preference for watching on TV, however, has declined substantially since the spring of 2022, with only 63.7% currently reporting a preference for watching content on this device. The drop appears driven primarily by pay TV subscribers. 

Video now accounts for 17.6% of entertainment consumed in cars, versus 82.4% audio, and 80% of those who watch video in cars say they do so at least a few times a month.