Bye Bye Indy FASTS?

Published: Tue, 06/21/22

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MONDAY JUNE 20th 2020
The Daily Reyd (TM)

Are we Getting FAST Standards or Destruction of Indy Video?

A few weeks ago, I concluded that VIDEO DESPERATELY NEEDS STANDARDIZATION for the industry to grow. After the column, I received emails from executives at ROKU, Netflix, Hulu, and others asking how this could be done without losing their market share.

They felt this was needed long term, but were worried that it would hurt their income in the short term and they might lose their jobs.

As the streaming wars heat up, consolidated power is rapidly turning the business model behind streaming into something more resembling traditional television, or the monopolistic tech sector.

One example is the new requirements being implemented by Roku and other major connected platform players for free, ad-supported streaming service (FAST) partners. These requirements include minimum weekly ad inventory commitments and impression guarantees, as well as exclusivity clauses that prevent partners from running ads on competing platforms.

The effect of these requirements is to consolidate power among a small number of large streaming providers and limit new entrants' ability to compete. This consolidation of power is likely to lead to higher prices for consumers and less innovation in the streaming space. So far, the major streaming providers have been able to avoid regulatory scrutiny by positioning themselves as tech companies, but this may change as the industry continues to evolve.

Roku has informed some of its free, ad-supported streaming service (FAST) partners that it will reduce their cut of advertising revenue and require that they begin using its tech stack for some functions, according to Protocol sources – something most aren’t very happy about.

The changes include cutting FASTs’ net ad revenue share on both video-on-demand and linear content from 60% to 55%. Roku has also told FASTs that they will need to use its ad server and buy inventory through its demand-side platform (DSP) going forward. In exchange, Roku will offer lower minimum guarantees and fees.

The changes come as Roku is facing increased competition from other streaming platforms, including Amazon’s Fire TV and Google’s Chromecast. Roku has been working to improve its position in the market by signing deals with major content providers, such as WarnerMedia and NBCUniversal. The company is also rumored to be working on a new streaming device that would be more expensive than its current products.

Roku began transitioning some partners to its new platform last month, and will phase the others in over the next few months. The platform transition is a blow for free content providers, who will see a 55% cut in revenue. This is more favorable than the terms of some other distribution platforms, but still a challenges for providers given Roku’s scale. Roku is one of the largest streaming platforms, with over 40 million active users.

The platform has been a boon for free content providers, who have seen their audience grow exponentially. However, the transition to the new platform will result in a significant revenue loss for many of these providers. While the terms are more favorable than some other platforms, it is still a challenges given Roku’s size and reach. Free content providers will need to find ways to make up for the loss of revenue in order to continue providing their service. Otherwise, they may need to consider alternative distribution platforms.

Roku has announced a new system that it says will help ensure the “best possible streaming experience for customers.” The system will allow for easier delivery of content and improved quality.

Some suggest that the mandatory tech adoption is largely aimed at preventing viewing-surge outages during live events, including coverage of the upcoming midterm elections.

Roku says that the new system will help content providers deliver their content more efficiently, and that it will also improve the quality of the content that is delivered. The company has not yet released any details about how the system will work, or how much it will cost. However, it is likely that Roku will require content providers to use the system in order to continue to provide their content through Roku's platform.

Some say Roku currently lacks the capabilities to report some data with the granularity and speed they need to program content and provide specific data, including numbers of ads served during programs, that is required by some revenue-sharing contracts with content providers.

Roku says it will work with partners to ensure the best business outcomes for both, as well as best experience for viewers. tv programmers say that Roku's closed platform doesn't provide enough information about how much time users spend watching particular genres of shows or what prompted them to stop watching.

They also want more information about how many people see an ad and whether they take action afterward. However, Roku says that it has plans to improve its reporting capabilities and is already working on new features. The company is also working on ways to better panel homes so that it can more accurately measure viewership. In the meantime, Roku is urging content providers to consider other factors in their decision-making, such as the number of households reached and engagement levels.

As the advertising landscape continues to evolve, a small number of big platforms are increasingly dictating the rules of engagement. According to protocol sources, this scenario exemplifies "classic big platform bad behavior," amounting to acting as "advantaged competitors."

With trillions of dollars at stake over the next decade, advertisers' biggest obstacle is viewed as fragmentation. As a result, the big platforms are aggressively pursuing cross-platform strategies in order to gain an edge.

While this may be good for businesses, it raises concerns about competition and the long-term health of the ecosystem. Only time will tell how this all plays out, but one thing is for sure: the advertising landscape is changing rapidly and the big platforms are leading the way.

Pesach Lattin
Pesach@lattin.us

The Rundown

Media Compost
ALL YOU NEED TO KNOW, CONDENSED ('CAUSE YOU DON'T HAVE THE TIME!)

1. The Better Business Bureau's National Programs' Digital Advertising Accountability Program issued a compliance warning on Tuesday, reiterating that the industry's self-regulatory codes require consumers' opt-in consent to tracking in some circumstances. What's more, companies can't infer consent based on consumers' continued use of a service after being informed of its data collection policies, the organization says. This is in line with the FTC's recently released guidance on online data collection and use practices. The BBB's warning follows complaints it has received about companies' online data collection and use practices. In particular, the organization has received complaints about companies' use of cookies and other tracking technologies to collect consumers' data without their knowledge or consent. The BBB warns that these practices may violate the industry's self-regulatory codes and the FTC Act. The organization is urging companies to review their data collection and use practices in light of the compliance warning.

2. Magnite, the world’s largest independent ad exchange, has inked a multiyear deal with LG Ads Solutions to use audience-level automatic content recognition (ACR) data from LG smart TVs for planning, activation, measurement and advanced analytics across its ad inventory. The partnership will give Magnite access to insights on what audiences are watching on LG smart TVs, allowing the company to deliver more timely and relevant advertising to viewers. In addition, the deal will enable Magnite to offer advertisers new ways to reach their target audiences through LG’s ad inventory. “The partnership with LG Ads Solutions provides us with a wealth of valuable data that we can use to better understand viewer behavior and deliver more targeted and effective advertising,” said Joe Zawadzki, CEO of Magnite. “We’re excited to work with LG to help brands reach their target audiences through the power of television advertising.”

3. According to LinkedIn, user engagement is at an all-time high, with members spending an average of 3x more time on the platform than they did just 2 years ago. In order to build on this momentum, LinkedIn is introducing new comment and comment reply options on Event pages, as well as a new 'Repost' option. These features will provide LinkedIn users with more ways to connect and engage with each other around the events they're interested in. LinkedIn sees this as a way to further its mission of creating economic opportunity for its members by making it easier for them to connect and build relationships with each other. So far, reaction to these new features has been positive, with users welcoming the ability to have richer conversations around events they're interested in. It will be interesting to see how these new features impact LinkedIn's engagement levels going forward.

4. Hasbro's Nerf brand has unveiled its first non-gendered mascot as part of a new "Unleash the Play in You" platform. Called Murph, the entity is covered from head to toe in Nerf dart materials and is meant to personify playfulness. The announcement refers to Murph using they/them pronouns and describes them as a natural born gamer who is always up for a challenge. The launch of Murph is accompanied by a social media campaign that includes the hashtag #UnleashThePlayInYou. Hasbro's goal with this new platform is to encourage kids (and adults) to let go of their inhibitions and embrace their inner child.

5. In a petition filed with the Supreme Court on Friday, Florida officials said a lower court erred when it struck down the state law. That law, passed in May by Florida Republican Gov. Ron DeSantis, would have prohibited social media companies with more than 75 million monthly users from "deplatforming" political candidates and news organizations. The law also would have required social media platforms to give users at least 24 hours' notice before changing their terms of service and to allow them to appeal content moderation decisions. The American Legislative Exchange Council, a conservative group that supported the Florida law, also filed a petition urging the Supreme Court to take up the case. So did TechFreedom, a libertarian technology policy think tank.

6. According to a new report from Sensor Tower, livestream shopping is on the rise in the US. The report found that the number of app installs for livestream shopping apps has grown steadily over the past year, with a particularly sharp increase in the past few months. This growth is likely due to the growing popularity of livestream shopping platforms such as Amazon Live and ShopShops. These platforms allow shoppers to browse and purchase products in real-time, while also providing a sense of community and connection that is often lacking in online shopping. With more consumers than ever turning to online shopping, it is likely that livestream shopping will continue to grow in popularity in the coming months.

7. Google has updated its policy for real estate agents who want to run ads on the platform. The new policy requires agents to have at least five customer reviews in order to run an ad. This change comes as a surprise to many in the industry, who have been used to the previous policy of only needing one review.Google’s AdsLiaison clarified that the overall process hasn’t changed, except for the reviews requirement going from one to five reviews. For real estate agents who are looking to advertise on Google, this new policy may mean that they need to work harder to get customer reviews. However, the increased visibility that comes with advertising on Google may be worth the effort.

8. Cirkul, the maker of a popular water bottle that adds flavor and nutrients to ordinary water, has raised $70 million in new funding, boosting its valuation more than 500% to $1 billion.

The investment was led by Accel Partners, with participation from existing investors Kleiner Perkins and GV (formerly Google Ventures). Cirkul will use the new capital to expand its product line and grow its direct-to-consumer business.

Founded in 2016, Cirkul has become one of the fastest-growing companies in the beverage industry thanks to its unique product and clever marketing. The Cirkul bottle features a flavor cartridge that can be swapped out to change the taste of the water. The company also sells a variety of cartridges with different flavors and nutrients, including vitamins, electrolytes, and caffeine.

Cirkul has built a passionate following among health-conscious consumers thanks to its focus on healthy hydration. The company's products are also popular with athletes and people who are active outdoors. In addition to selling directly to consumers, Cirkul has partnered with major retailers like Target, Walmart, and Best Buy.

9. A new report from the Mobile Marketing Association (MMA) shows that the majority of mobile advertisers are feeling the squeeze. 55% of respondents said that mobile advertising became harder in 2021, and the median estimated revenue loss due to the changes was a sizeable 39%. The report attributes the challenges to a number of factors, including an increase in ad fraud, greater competition for ad inventory, and more stringent privacy regulations. As a result, many advertisers are being forced to reevaluate their strategies and experiment with new tactics in order to stay afloat. While the challenges of the past year have been significant, the MMA remains optimistic about the future of mobile advertising and expects spending on mobile ads to continue to grow in the coming years.

10. I thought this was a joke: DoubleVerify, today announced the creation of a carbon footprint metric that breaks-down an ad campaign's carbon emissions and includes data on ad tech platforms that contributed to the emissions. The metric will become available soon. "As the world increasingly turns its attention to the environment, it's more important than ever for businesses to be transparent about their carbon emissions," said DoubleVerify CEO Wayne Gattinella. "This new metric will provide our clients with the insights they need to make informed decisions about their marketing spend, and we're committed to helping them drive real change." No, it's not a joke, but really shows that as they lose customers for their "fraud business," they are trying to make up the income?

The Watercooler
Impress your Co-Workers with these useless facts about marketing

It’s called the 4A Framework, and the idea is to create content based on one topic using four different angles:

Actionable: This is tactical content where readers gain insights they didn’t have before in the form of tips, hacks, curation, resources, and guides.

Analytical: Support your core idea with numbers and analysis. The goal is to help readers unlock a new way of thinking using trends, numbers, teardowns, and examples.

Aspirational: Motivate readers and help them understand what is possible. You can do this by using stories, biographies, lessons, advice to past-self, personal stories, mistakes, and so on.

Anthropological: Help readers understand the current state of things. Explore common fears, failures, struggles, and comparisons.

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