Every brand is now an ad network
Hotels, airlines and manufacturers are now as much media networks as they are products
This week has given me a little more time to think - mostly due to enforced Covid isolation. Ad networks are probably some of the least sexy parts of the whole media and marketing industry, but they’re about to get a little more interesting.
Onwards.
When your hotel room becomes an advertising platform
Adtech networks in and of themselves aren't particularly interesting. The technology that powers them may vary but their main selling point will usually boil down to effectively being able to automate the process of putting your adverts across a large or potentially specialist number of publishers for an efficient $CPM (cost per impression).
The human side of the pitch saves time, theoretically has been a cheap way to reach a large number of people and should leave agencies or in-house teams a little bit more time to look at the overall media strategy.
For their part, until recently, some (most?) advertisers and agencies often didn't pay too much attention as long as they had a reasonable idea where their adverts were going, ensured said advertising was being delivered in a cost-efficient way, and were able to demonstrate the return on investment (ROI) or a low cost per acquisition ($CPA).
Online and digital advertising was, or so the claim went, meant to usurp traditional, ineffective offline advertising. You could precisely target who you wanted to target an account for every view, every cent spent, and measure every part of the sales funnel.
Of course, that turned out not to be the case. Ad fraud and oblique practices can make it hard to know for advertisers where their money goes and "traditional" media - which is all mostly has digital components anyway, rendering distinctions moot - has shown itself to be more robust than the industry expected, notwithstanding challenges over declining or fragmented audiences.
Even connected TV, which was seen as the future of TV advertising at one point, has less of a guarantee of ad viewability than linear as it still delivers adverts when the television has been turned off.
You get an ad network! Everyone gets an ad network!
What is slightly more interesting about ad networks is where they go next. Google, which dominates every aspect of digital advertising, and Apple have been on a privacy drive, as much as because they can and it hurts competitors such as Facebook who rely on tracking users.
With CPMs and CPAs rising on digital platforms, suddenly more traditional approaches look more appealing. It was always about the money, not the technology.
Privacy moves have also accelerated conversations beyond just user tracking. Advertisers are starting to ask more hard questions around ad fraud, which has been rampant over the last decade, while brand safety is also getting serious consideration as brands try to avoid showing up on digital publications such as far right news they'd rather not be associated with or fund.
The end effect is that first party data (owned by the advertiser) or second party data (owned by a trusted partner) is now favoured over third party data (long lists of people's data purchased from... anywhere) and that marketers are looking at quality as much as quantity. It's leading to some interesting players moving into the ad network sector.
Marriott Hotels may be an unlikely adtech network owner, but they're one of the first brands to move to take advantage of the post-privacy clampdown by Apple and Google. Brands, like Marriott, own a surprisingly significant amount of potential advertising inventory. In Marriott's case, this will include selling advertising space on their app and on the TVs in hotel rooms.
The advantage here is that while the reach and the $CPMs might be high, so is the quality of the customer - in some respects, this isn't a million miles away from cinema advertising.
Dwell time and attention is higher than other channels and Marriott has a lot of data (anonymised, they promise) on their customers. It opens a potentially quality audience to, say luxury brands selling to high net worth individuals or family focused brands.
It follows the Amazon playbook, which has quietly built one of the biggest and most profitable ad networks in the world following the same playbook of monetising its own real estate, first party data, and products in the same place.
In a sector that still faces an uncertain future (pandemics, Airbnb), this potentially gives Marriott a diversified revenue stream.
Marriott, of course, are good at running hotels not advertising networks, which is why they've also partnered with Yahoo, who do know how to run an advertising network.
Brands as publishers ad networks
The hotelier isn't the first brand to monetise its own properties. Australian airline Qantas has spent the past 20 plus years partnering with oOh!media, who specialise in and own out of home media inventory.
This includes advertising on in-flight magazine, pre-rolls on in-flight wifi, plus signage around airports and business lounges. Qantas Business Rewards customers also earn frequent flier points for advertising on radio network SCA.
So are Qantas an airline or a media business? If LG run an advertising exchange through their new generation of smart TVs, does this make them an adtech network or a hardware manufacturer. Could Starbucks opens up their in-cafe music, app, coffee subscription club and even cups to advertisers?
What if a supermarket giant like Tesco, with a large loyalty database, decided to seriously take on Amazon in the advertising network stakes? Given most supermarkets are already publishers and control a lot of pricing and promotions for other brands, this isn't a huge leap.
There's no easy answer here. The lines between advertisers and advertising networks is becoming increasingly blurry, especially in relation to what has come before. Networks like Outbrain do one thing well. Tesco already have a history of diversification, albeit sometimes less successfully than anticipated.
Is this movement a good thing? On one hand it opens up scaled advertising inventory that hasn't been previously been available. This inventory already has a clear point of difference with ad networks: the inventory is more premium and most trustworthy.
You have much more idea where your ads will turn up and the people it'll be delivered to (potentially not hard given than some networks' gender targeting is less than 50% accurate).
On the other hand, the new gatekeepers now start to look an awful lot like the advertisers. Adtechs don't tend to sell products where it's logical to advertise on a competitor's network. That may not be the same for networks run by B2C advertisers.
Would Marriott take advertising from an alcohol advertiser in competition with their bar supplier? Opening up new networks comes with new questions.
And for consumers? There's very little space that isn't opened up to some form of advertising today and we've learnt to ignore much of it.
For all the surveys that say people want more personalised advertising or deeper relationships with brands, I suspect most of us would settle for being delivered adverts that aren't too intrusive, aren't bad or irritating, and know that whoever holds our personal details isn't going to hawk them around unscrupulous buyers for a quick dollar.
In that regard, the new world of ad networks may possibly deliver, even if the original bar was very, very low.
Interesting reads
Trust me, I’m a blockchain
The “crypto winter” continues, with assorted currencies continue to fall in value. Many people will, sadly, lose a lot of money. But, as a sidenote, Scott Galloway makes an interesting argument that crypto positioned itself as the anthesis of ‘trust’ (the banking system). It has appeal to a specific mindset, but as inflation goes up and bears sweep through the stock market, the riskiest (least trusted) will be abandoned first. Worth several minutes of your time. LINK.
Advertising on Angry Birds
When people talk about the metaverse today, they’re mostly talking about gaming (Fortnite, Roblox). But when people talk about advertising in gaming, it’s unlikely they’re thinking about Candy Crush or Angry Birds. Yet casual mobile gaming revenue is predicted to reach $6.26bn this year. It certainly sounds more plausible than McKinsey’s $5trillion number for the metaverse. My daughter has recently got into Angry Birds (long drives require creative distractions) and I was struck by the unskippable nature of the adverts. It’s not top of a media plan, but as this Digiday piece notes, a 10 minute casual gamer is probably cheaper and more effective to reach than building a space in Decentraland. LINK.
Research: Digital News Report 2022
The Reuters Institute & University of Oxford’s annual digital news report is one of the few pieces of must-read research each year. I’ve not had the opportunity to delve into it yet, but sharing the link for those interested. LINK.
Tumblr kids never went away
Christina McDermott’s Social Lives newsletter is an enjoyable weekly ready if you’re a freelancer or social media professional, and this week shared a gem of a piece from The Conversation on why Tumblr is making a revival. Platforms and tech doesn’t always die, largely due to die hards. There’s a lot to learn about communities with this piece. LINK.
Soccer Apples
Most content platforms have, at some point, dipped their toes into sports streaming, some more successfully than others. Amazon Prime has now become a fixture in the Premier League, while Twitter’s NFL deal for Thursday night fixtures somewhat fizzled out. Now it’s Apple’s turn, with their TV streaming signing a 10 year deal with Major League Soccer in the USA that’s worth about $2.5bn. Sport is one of the few pieces of TV guaranteed to deliver eyeballs but this is a lot of money for a long period of time, compared to the league’s previous deals. Apple are one of the few streamers who don’t really need a live sport offering (although Amazon could probably live without sport rights as well). This might be an expensive suck it and see test or it may be preparing for a much bigger rights play. LINK.
Delayed debt and biometrics.
Apple been busy. It’s launched its own Buy Now Pay Later (BNPL) service through Apple Pay, with PayPal quick to launch their own BNPL offering. The BNPL sector has grown since the start of the decade, with young customers turning to BNPL over credit cards, although its not exactly new - retailers such as sofa warehouses have been offering delayed payments for years now.
BNPL markets itself as an alternative to debt, but it’s still debt (the Australian regulator has just told mortgage lenders to include it when assessing home loan approval), and split payments and retailer fees have a knock-on effect on business cash flow, which may result in higher markups to keep money flowing. The cost of living crisis probably means the BNPL sector will be here to stay but there’s a lot of different brands essentially offering the same thing. Apple may be late to the party, but will probably will a large slice of the market largely on convenience and because they’re Apple in what is essentially a commodity product sector. LINK.
Apple are also making a big push to eliminate passwords in favour of biometric logins, which sounds a bit Minority Report, but is more practical and secure (but not totally practical or secure) than having multiple passwords. Lots of interesting security questions here, although passwords will only be phased out if Google and Microsoft also get similar features correct LINK.
The dangers of minimalist design
Twitter thread that’s well worth a few minutes if you’re the kind of person who finds public space designs of items like bollards and benches interesting (disclaimer: I am that type of person). LINK.
Thanks for reading this far. Hopefully you’ve found it mildly diverting. Like what you’ve read? Forward it onto somebody and ask them to subscribe.
Given I’m still Covid positive (symptom free, thankfully, aside from cabin fever), there’s only one choice to play us out this week: Half Man Half Biscuit’s Token Covid Song from recent album The Voltarol Years. If you’re not into HMHB, you’ll find this baffling. If you are, dig out your Joy Division oven gloves and have a boogie.