How Google’s New Ground Rules for Search Term Reporting Affect Advertisers

How Google’s New Ground Rules for Search Term Reporting Affect Advertisers

Google

If it seems to you that Google is reporting fewer search terms in your keyword reports, you are not alone. As discussed in Search Engine Land, Google is revising search term reports “to only include terms that were searched by a significant number of users.” As a result, advertisers have access to fewer search terms when evaluating keyword performance. And lack of visibility is a problem.

Here’s how advertisers are affected: lack of visibility into keyword performance makes it more difficult for advertisers to optimize campaigns, especially when using manual bid strategies. That’s because advertisers lose valuable insights into how people are searching. Without that insight, advertisers struggle to add negative keywords to block irrelevant traffic and improve traffic relevancy — which ultimately can make controlling costs per conversion more difficult.

The new ground rules also lack transparency. Google has not explained what the criteria for a specific search term to be deemed as one being “searched by a significant number of users.”

Taking a Closer Look

The change means that advertisers and their agency partners cannot see all the search terms that match their keywords. As a result, it’s impossible for anyone planning keyword spending to have a complete view of how people search — which means keyword planning is less efficient and more costly.

We have seen the negative impact of this change in our own client work. Here are two examples:

  • On one of our campaigns, thanks to this update, we have lost visibility into search terms that account for 47 percent of month-to-date clicks. If this doesn’t sound significant, consider that in highly competitive verticals with relatively high cost per clicks, advertisers may lose visibility into search terms that drive 44 percent of month-to-date spend, just as it happened for our client.
  • In another campaign, we have lost visibility into search terms that account for 53 percent of month-to-date clicks. In other words, we cannot see search terms that drive 51 percent of month-to-date spend for our client.

When an advertiser cannot see which search terms correspond to its keyword spend, then the risk for inefficiency is unacceptably high. Unfortunately, advertisers end up paying for irrelevant search terms, which means paying for terms that are not converting. The visibility fog is not so damaging for advertisers whose cost-per-click spend is low, say, $1 CPC. But for an advertiser paying, say $50 per click, the resulting inefficiency is very high.

Why Is Google Limiting Keyword Visibility?

Why is Google doing this? Well, Google’s official stance is that it all comes down to user privacy. As Google told Search Engine Land:

In order to maintain our standards of privacy and strengthen our protections around user data, we have made changes to our Search Terms Report to only include terms that a significant number of users searched for. We’re continuing to invest in new and efficient ways to share insights that enable advertisers to make critical business decisions.

While Google’s primary purpose may be to protect privacy, this change may result in greater ad spend as budgets are increased in order to make lead goals – which means more revenue for Google. Having visibility into search terms means a more targeted spend for advertisers, and less money for Google. But when an advertiser lacks visibility, the advertiser may spend money needlessly on terms that are irrelevant to the product or service that is being advertised. An inefficient spend means more money for Google resulting from wasted dollars.

We reached out to Google to share our concerns. If you are seeing similar results, you may want to provide your feedback to Google as well.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Walmart Takes Aim at Amazon, Facebook, and Google with Online Advertising

Walmart Takes Aim at Amazon, Facebook, and Google with Online Advertising

Advertising Amazon Facebook Google

When Walmart recently announced that it was joining Microsoft in a bid for TikTok, the news had many people scratching their heads. But the bid makes perfect sense in context of Walmart’s growing online advertising business, an aspect of the Walmart empire that is beginning to catch more attention among brands. Read on to learn more.

The Growth of Walmart Advertising

You might not know it, but Walmart operates its own digital advertising business under Walmart Media Group. Under CEO Doug McMillon, Walmart Media Group has been building an advertising business to compete with Amazon, Google, and Facebook (the Big Three of online advertising). As reported in The Wall Street Journal, “deep-pocketed companies with large amounts of data on their customers are in the best position to mount a challenge” to these competitors.

Walmart feels ready to play in that sandbox. The retail behemoth aims to tap into its own trove of shopper data (about purchases made both online and in brick-and-mortar stores), and sell advertising services to businesses with products in Walmart stores and across the entire digital world, on sites including Walmart.com. As Steve Bratspies, the chief merchandising officer for Walmart U.S., has noted, data can give advertisers a leg up by providing insight into what a consumer might really want and need.

For example, as noted in The Wall Street Journal, a customer might buy a bicycle in a Walmart store, then subsequently see ads for bike helmets on platforms like Facebook. The ads would direct the shopper back to Walmart.com to make the purchase. It’s a win/win, with consumer needs being anticipated and met, and brands making the connection to a motivated shopper.

Walmart’s Advertising Services

How does Walmart propose to make those connections? The retailer currently offers advertisers services such as:

  • Sponsored Products ads, which consumers encounter when they are browsing Walmart.com. These ads can take many forms:
    • A brand’s products can get premium placement on the first page of a shopper’s search results.
    • An advertiser’s logo might appear, along with a custom headline, at the top of relevant search results.
    • Products can appear as part of a product carousel of relevant alternate purchase options.
    • Items can be highlighted in a “Buy Box” as the most relevant alternate purchase option on a product detail page.

Walmart Sponsored Product Ad

  • Visually compelling display ads, which keep a brand in the forefront:
    • Across Walmart’s digital properties. Content and advertising can be seamlessly merged on Walmart.com, pickup and delivery, and Walmart apps.
    • Offsite, across the web and social channels like Facebook, Instagram, and Pinterest. As noted earlier, relevant ads will re-engage customers and send them back to Walmart for products.

Walmart Display Ad

Where Does TikTok Fit into All This?

Walmart’s motivation for acquiring TikTok probably has much to do with digital ad dollars. As Mark Sullivan of Fast Company points out, TikTok is a prime space for digital advertising. And Walmart clearly recognizes that, sharing in a statement that TikTok might represent “an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.”

Sullivan elaborates:

TikTok is itself in the early stages of selling ads on its app, and it has data on people’s video content choices, but it lacks data on the things people buy. If Walmart owned TikTok it could use its ecommerce user data to help advertisers put ads in front of the right TikTok users. And Walmart could be the exclusive seller of targeted ad space on TikTok.

One advertising industry insider told me that a brand—say a car company—might use a cookie to capture data on a consumer that came to its site to look at cars, then use Walmart’s ad-tech to show an ad to that same consumer on TikTok.

If Walmart had an ownership stake in TikTok, Walmart could connect its advertisers with TikTok’s young demographic, too. And let’s face it — TikTok is hot. In early August 2020, the video-sharing social networking service reported about 100 million monthly active U.S. users, a figure that is up nearly 800 percent from January 2018. Walmart clearly sees the opportunities inherent in connecting its brands with that audience.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

How to Succeed with Google Discovery Ads

How to Succeed with Google Discovery Ads

Google

It’s official: Google has launched Discovery ad campaigns globally. “Discovery ads,” so dubbed because they are designed for Google users who might not be actively looking for things to buy, have already been adopted by True Interactive in our client work. In fact, we’ve seen higher conversion rates on Discovery campaigns than on traditional display campaign, which have translated into lower cost per conversion numbers. Read on to learn more.

What Are Discovery Ads?

Google Discovery ads are designed to appear exclusively on mobile devices, with the exception of those discovery ads showing in Gmail (these also appear on the desktop). As noted, they are called “Discovery ads” because they are designed for the “laid back” individual: someone who didn’t necessarily access Google with an intent to make a purchase. As reported in Adweek, this is in fact a receptive group: Google says that 86 percent of online consumers exploring the web or watching videos are also open to shopping ideas. That’s a sizable audience: according to Google, Discovery Ads can “reach up to 2.9 billion people across multiple platforms, including Gmail social tabs and YouTube’s Watch Next feeds,” all in a single campaign. As Search Engine Land points out, Discovery ads tend to be image-rich: advertisers can run a single image ad or a multi-image “carousel,” meaning an ad with multiple images users can scroll through. The ads may be similar to ones brands are already running on Facebook, which means advertisers can repurpose existing ad creatives.

On what platforms do Discovery ads appear? As one might guess, they occur on Google Discover (the new name for Google Feed). They also show up on Gmail, which The Drum reports enjoys more than 1.5 billion monthly users, and YouTube, cited by Forbes as the second-largest search engine in the world. Heavy hitters, in other words.

True Interactive and Discovery Campaigns

True Interactive has been an early adopter of the format for our clients. As noted, we have seen an increase in conversion rate and a decrease in cost per conversion. Why? For one thing, the ad format applies the power of the Google algorithm to target the right consumer. And the format has simply hit at the right time: mobile usage is increasing.

Some basics about our experiences and requirements follow here:

  • Targeting: as with any regular Display campaign, we can use remarketing, in-market, affinity, custom intent and similar audiences.
  • Bidding: these campaigns can only use automated bidding strategies such as Target CPA and Maximize Conversions.
  • Ad Placements: ads can show on YouTube (mobile home feed only), Gmail (Promotions & Social tabs—as noted, ads are served on both mobile and desktop), and the Discover feed (iOS, Android Google app, and mobile Google.com site).
  • Ad Formats:
    • Two options:
    • Asset requirements:
      • Images: high-quality images are needed (they can’t be blurry) in either 1200 x 628 (landscape) or 1200 x 1200 (square)—preferably in both sizes.
        • Note that ads with call-to-actions inside the images will be disapproved. You can have Google include a Call-to-Action button in your ad by choosing one from Google’s predefined list (e.g., Learn More, Subscribe, Shop Now, Apply Now, Get Quote, etc.)
  • Text:
    • Carousel requirements: one main headline (40 characters max), one main description (up to 90 characters), a business name (up to 25 characters), as well as one headline for each individual carousel card of up to 40 characters.
    • Single image requirements: at least one headline no longer than 40 characters (can include up to five different 40-character headlines and Google will optimize for performance), along with one description line of up to 90 characters long (can include up to five different descriptions of 90 characters each and Google will optimize for performance).

What You Can Do

What should your takeaways be? We recommend that you:

  • Capitalize on this format.
  • Monitor Google ad innovations on an ongoing basis and understand the powerful nature of Google and how it is evolving.
    • As we’ve blogged, Google draws on several advantages as it grows its ad business:
      • A massive user base that relies on Google across multiple platforms and apps.
      • A head start in using AI, with the specific aim of making advertising more effective—and smarter.
      • An established global presence that showcases how Google tailors advertising products in support of international ad campaigns.

Google has a good track record of recognizing needs, and creating products—Shopping campaigns with partners, for example, or location-based digital advertising—to meet those needs. That proactive stance will no doubt continue.

Contact Us

Eager to learn more about what Google might offer your brand? Contact us.

How Brands Have Made the Pivot with Nimble Marketing

How Brands Have Made the Pivot with Nimble Marketing

Advertising

On the True Interactive blog, we have discussed examples of how businesses are adapting the tone of their online advertising to remain relevant—and appropriate—during the pandemic. But some brands have needed to do more than adjust their tone; they’ve had to adapt their marketing strategies and even their business models to address specific needs or limitations brought about by COVID-19. Here are some examples:

Raising Cane’s

Raising Cane’s, the fast-food chain specializing in chicken fingers, saw the pandemic coming. As discussed in QSR, Raising Cane’s founder and co-CEO Todd Graves closely followed news of COVID-19 and its spread throughout China; Graves and his team knew it was only a matter of time before the virus moved abroad, and they were quick to take action when it did. Health and food safety, always a priority, got even more attention. And the restaurant bolstered its ability to manage drive-through service rather than sit-down dining, even as the maintenance of food quality remained a priority. The operational change demanded a marketing pivot.

Raising Cane’s changed its message, including its digital advertising, to focus on its heightened focus on safety. The business also ratcheted up promotion of its drive-through service. Especially in the early days of the pandemic as shelter-in-place mandates took hold, it was not always clear to people which restaurants were open and which ones were not. In addition, the company mobilized part of its work force to support healthcare workers on the front lines fighting the pandemic, ranging from having employees sew masks to donating food to hospitals. The company talked about these efforts, which encouraged others to step up, too. In doing so, Raising Cane’s also aligned its actions with consumer preferences: according to a Kantar study, more than three-quarters (77 percent) of the general population would like to see brands talk about how they’re helpful in the new everyday life.

Raising Cane’s realized a benefit from its marketing pivot: a temporary dip in sales that occurred when coronavirus hit U.S. shores was followed by a return to pre-COVID-19 sales numbers. Now Raising Cane’s is making another interesting change as it promotes a sponsorship of virtual musical performances to benefit people on the front lines fighting COVID-19. How about a song with those chicken fingers?

D’Artagnan

For meat and poultry seller and manufacturer D’Artagnan, pivoting has meant changing market focus. Before the pandemic, 75 percent of the company’s revenue came from sales to restaurants with some revenue coming from direct sales to consumers online. But as restaurants closed in response to lockdown orders, that business dropped 80 percent. At the same time, grocery stores saw a leap in business as people began eating at home more. D’Artagnan recognized that trend and adapted by tapping into it, overhauling its operations to meet grocery market needs as well as a 700 percent increase in demand from customers suddenly ordering directly from the D’Artagnan website. The company pivoted its online marketing in a few crucial ways:

  • Ramping up special deals on its website to attract more consumers.
  • Advertising its direct-to-consumer business with Google Advertising, including promotion of overnight delivery; and reliance on social media to promote deals such as Mother’s Day specials.
  • Promoting an expansion of at-home delivery services, which made consumers in some previously untapped markets aware that the company was open for business.
  • Redirecting its sales team to build relationships with supermarkets.

The switch has demanded flexibility from D’Artagnan’s 280 employees, who have need to operate differently. The willingness to meet those challenges has been rewarded with sustained business, and sustained business has meant jobs: The Wall Street Journal reported in mid-April that the company had retained all its employees.

Peloton

In an era when people are traveling less and doing more of everything at home, this maker of exercise equipment has shifted focus from the use of Peloton bikes in hotels and gyms to at-home use. App Annie explains that Peloton optimized for search on both their app and web site, taking out words people aren’t searching for right now — “at the gym,” for example —and replacing them with phrases touting an at-home experience. They also dialed up at-home trial promotions, increasing their free trial from 30 to 90 days. The extended trial period is highlighted in the first sentence of Peloton’s iOS app description, a good way to reach out as customers get their heads around the necessity of getting fit at home. The company has also relied on Google Advertising to promote its ability to stream fitness classes to consumers. Recently Peloton reported a 66-percent surge in sales. Clearly, people are ready for a workout.

Contact True Interactive

To succeed with online advertising in 2020, contact True Interactive. Read about some of our client work here.

YouTube: The Streaming Ad Giant

YouTube: The Streaming Ad Giant

YouTube

Who knew? YouTube is an advertising giant in the streaming industry. And YouTube is becoming increasingly vital as more people stay at home and stream content in light of recent news events.

According to App Annie, in 2019, YouTube made a whopping $15 billion on ads alone. The news comes courtesy of Alphabet (the parent company of Google): for the first time since Google acquired YouTube in 2006, Alphabet has released YouTube’s ad revenue. And the figures are staggering, accounting for almost 10 percent of Google’s overall $161 billion revenue in 2019.

Why This Matters

The news is important because it underlines YouTube’s dominance in an increasingly crowded arena. As App Annie points out, on Android phones, about 70 percent of time spent on the top five video streaming apps worldwide was on YouTube. The platform, a pioneer in the world of video streaming, continues to hold its own. That’s telling. As Forbes notes, “In a market where new streaming video services seem to spring up overnight, YouTube isn’t losing viewers or ad money.”

Also notable: while many of the top apps are Chinese brands, enjoying strong support in China, YouTube isn’t active in the Chinese market—and yet it is still number one in rankings measuring time spent on the top streaming platforms. By a significant margin.

How YouTube Does It

So how is YouTube achieving this cash cow status?

  • For one, YouTube delivers an audience, and you need an audience to attract advertisers. As Lifewire points out, YouTube is one of the most popular sites in the world. It’s arguably the favorite video-sharing and viewing site on the web today, offering a range of long- and short-form free content. And as Lifewire notes, “Youtube.com is the second most popular website in both the global market and in the U.S for 2020, even though a huge portion of YouTube views are from outside the U.S.”
  • But YouTube also does something else: it continuously offers advertisers attractive products. As we’ve blogged in the past, YouTube’s Masthead ad format for TV allows brands to connect with consumers the instant users access the YouTube app on their televisions. The Masthead format is a response to the fact that while consumers aren’t watching as much linear TV, they are still using their televisions as a tool for experiencing streaming platforms like YouTube. In other words, YouTube understands viewing trends, and is staying nimble in its bid to connect with advertisers in an informed way.

What Can Be Learned from YouTube’s Success?

We can draw two conclusions from YouTube’s enduring popularity:

  • First, streaming platforms, especially Netflix, cannot help but notice how well an ad-supported format on YouTube has been working. Netflix—and other competing platforms—certainly must be feeling more pressure to create advertising products. And that’s good news for brands. (I blogged about Netflix’s potential adoption of advertising in this post, “Why Netflix Might Embrace Advertising.”)
  • Second, YouTube’s growth likely bodes well for apps like Quibi (another destination for streaming video that relies on ads). Quibi is endeavoring to carve a niche in a crowded field; YouTube shows them what’s possible, and arguably creates an environment ripe for inspiration.

Clearly, streaming platforms offer an attractive opportunity to advertisers. Note also that in light of recent events, it is expected that more people will turn to streaming platforms such as YouTube. Per a blog post from PMG, “Popular media platforms such as YouTube and Tik Tok will also likely see a monumental boost as kids and teens spend more time online and at home” during temporary school closures caused by the COVID-19 pandemic. YouTube, with its combination of innovation and reliability, is proving to be a model for succeeding with ad-supported shorter-form streaming. In its quiet bid for dominance, YouTube has become a leader.

Contact True Interactive

Want to learn more about YouTube, and the opportunities that exist for advertisers in the streaming community? Contact us.

Quibi, the Newest Disruptor: Advertiser Q&A

Quibi, the Newest Disruptor: Advertiser Q&A

Advertising Video

Just when you thought you had a handle on content streaming (Netflix: check, Disney+: check), a new player has emerged with the potential to shake things up all over again. Backed by a boatload of cash and the imprimatur of Hollywood royalty like Steven Spielberg, Quibi is poised to carve a unique niche in a crowded field. Read on to learn more.

What Is Quibi?

 

Quibi is a new premium streaming service that imposes a cap on programming time: the name Quibi, in fact, is shorthand for “quick bites” of video. Quibi aims to showcase stories of 10 minutes or less; content is meant to be viewed specifically on one’s mobile phone. The platform, founded by chairman Jeffrey Katzenberg, has installed tech vet Meg Whitman as the CEO, and investors include studios like Walt Disney Co. and WarnerMedia.

What Kind of Content Will Be on Quibi?

Given the unique mobile phone focus, Quibi will be generating all new content. As Whitman tells Marketplace, “We will be the first streaming service that launches without a library.” As Whitman sees it, starting from ground zero means an opportunity to create something truly fresh: “We have . . . invested significantly in content. This is all about finding the great stories, attaching the great actors and actresses to it and getting them excited about doing something entirely new.”

Quibi expects to deliver 175 shows and 8,500 episodes in its first year. The content promises to be a diverse mix, from long-form narratives to reality programming, documentaries, food shows, and daily news programs. Given Quibi’s format, the long-form narratives will be delivered in bite-sized chunks, serial fashion (think Dickens and the serial way he delivered novels like Pickwick Papers). Whitman is quick to stress that short format doesn’t mean inferior quality. “Nothing’s lesser about the movies [we’re developing] other than the chapterized way we deliver them,” Whitman says.

Content can be downloaded, so users won’t need an active Internet connection to view programming. And quality of the viewing experience is a prime mandate. As Whitman told Marketplace, “[P]eople are watching a lot of videos on their mobile phone today, but it’s an uneven experience. Sometimes, if you’re holding the phone in portrait, it’s a little postage-stamp size, then you turn it horizontally, it’s got big black lines. Some content is only available in portrait, some is only available in landscape . . . we have to be able to have seamless portrait-to-landscape rotation with full-screen video.” To that end, the company is employing what Whitman calls “compression technology,” and reportedly working with Google to ensure flawless video streams. Whitman also notes, “[W]e shot, obviously, to the aspect ratio of the phone.”

How Is Quibi Different from YouTube and Other Platforms?

As noted, story lengths on Quibi are capped at 10 minutes. And Quibi content has specifically been created for viewing on a mobile phone.

There is a distinction between what Quibi promises and the content made for mobile phones on free platforms like, say, TikTok. Services like TikTok offer user-generated content. By contrast, filmmakers like Steven Spielberg and Catherine Hardwicke are collaborating with Quibi to create programs designed specifically for viewing via Quibi, sometimes even at certain times: “Spielberg’s After Dark” series will only appear on the service at night, for example. An untitled show devoted to zombies is reportedly being discussed with Guillermo del Toro. User experience will also be informed by how customers hold their phones: changing from vertical to horizon orientation will change what the viewer sees.

Who Is the Target Audience for Quibi?

The target audience is Millennials—ages 18 to 44. The idea is that the platform will especially appeal to consumers on the go: someone waiting in line at the bank, say, or taking a quick bus ride during which 10 minutes of content might be the perfect diversion.

When Does Quibi Launch?

The platform is due to launch in the United States on April 6, 2020, but as Whitman notes, “you don’t have to wait till then to get involved.” On Quibi.com, you can learn about new shows, the technology, and any milestones before launch date. Whitman adds, “We’ll let you know on April 6 when you can download the app from either the Apple App Store or Google Play Store.”

What Advertising Opportunities Exist on Quibi?

There will indeed be opportunities for advertisers, as users will be invited to choose between Quibi with or without ads. The service will launch, for viewers in the United States, at $4.99 a month with ads, $7.99 a month without. Whitman shares with Marketplace, “We think that most [consumers] will pick the ad-supported version because it’s a very light ad load. It’s only 2.5 minutes per hour of watching, which is much less than prime time TV, which is 17.5 minutes of advertising for every hour that you watch.” Ads will appear before a Quibi show begins and last six, 10, or 15 seconds. They will be unskippable. Advertisers already onboard include Discover, General Mills, Taco Bell, Walmart, and PepsiCo.

Quibi programming will also come with ratings to help advertisers determine whether a show is geared to mature audiences. At the WSJ Tech Live conference in October 2019, Whitman said, “[Marketers] can feel safe that their brand shows up next to content that they’re OK with.”

And because Quibi programming is structured around serialized chapters, the platform is looking into an alternative where advertisers could serialize their ads, too.

What Kind of Reception Has Quibi Received?

It’s a mixed one. Naysayers insist the endeavor is a gamble, and that the subscription fee will discourage consumers used to video content that can be viewed for free on platforms like YouTube. Katzenberg, however, is confident. “I think we are doing something that is now such a well established consumer habit,” he told NewsDio. “There are 2.5 billion people walking with these televisions in their pocket. They are already watching a billion hours of content every day. I just know that it will work.”

Quibi has tried to get out in front of its critics by building visibility through some (presumably expensive) ads during the 2020 Super Bowls and Oscars.

Not all watchers have been impressed, as this Verge article discusses.

There’s no denying Quibi has attracted some heavyweights to create content. Will consumers be willing to pay for that content? Only time will tell.

Contact True Interactive

Curious about Quibi and the opportunities this new platform affords? Contact us.

How the Streaming Wars Benefit Brands

How the Streaming Wars Benefit Brands

Advertising

How will the streaming wars affect the way businesses market themselves in 2020?

This question looms large. A growing number of streaming services, including Apple TV+ and Disney+, now compete with already established players Amazon Prime, Hulu, and Netflix. More services, including one coming from AT&T, are on the way. All of them cater to a younger audience that is notoriously indifferent to ads, which helps explain why most – but not all — streaming services remain ad-free. But that doesn’t mean it’s impossible for businesses to market themselves through streaming services.

Ad-Supported Tiers

So far, Hulu remains the only major streaming company that offers an ad-supported tier, which costs $5.99 a month. (To watch content ad-free on Hulu, viewers need to shell out $11.99 per month.) Hulu tightly controls ad formats to prevent them from being too intrusive, keeping commercial breaks short. In addition, Hulu is said to be experimenting with different types of ads, such as banner ads that appear when viewers pause their content – making Hulu resemble YouTube as a content-watching option. An ad-supported tier apparently works for Hulu. A recent New York Times article reported that the $5.99 tier is Hulu’s most lucrative one:

Even though it charges $6, the service generates more than $15 in revenue per subscriber each month, because of the high-cost advertising sold against those customers, according to two people familiar with the business.

Advertising grew by 45-percent for Hulu in 2018.

In addition, pressure is mounting for Netflix to provide an ad-supported tier, which Netflix does not offer at the moment. But Netflix might cave in because of rising content creation costs and increased competition. A recent stock downgrade by a prominent financial analyst ratcheted up the pressure.

I believe that Netflix will eventually provide advertising (more about that here). For now, here’s a good rule of thumb: if you’re the type of brand that understands how to capitalize on YouTube ad formats (such as YouTube Masthead), consider the ad tools that Hulu is developing. For instance, Hulu offers “binge watch ads,” which, as the name implies, target people who like to watch multiple programs in one sitting. As reported in TechCrunch,

These “binge watch ads” utilize machine learning techniques to predict when a viewer has begun to binge watch a show, then serves up contextually relevant ads that acknowledge a binge is underway. This culminates when the viewer reaches the third episode, at which point they’re informed the next episode is ad-free or presents a personalized offer from the brand partner.

Expect Hulu to provide more creative ways for brands to attract eyeballs.

Watch Hulu closely. The company’s development of an ad tier may point a way forward for Netflix and other competitors.

Co-Branding

Businesses can brand themselves in other ways beyond traditional advertising, such as having their products placed on shows. Here again, Hulu provides an example of how to do it. According to The New York Times, Hulu has a team dedicated to working with businesses to have their products appear on Hulu programming, with the number of paid arrangements increasing 200 percent from 2018 to 2019.

But Netflix is also cozying up to brands (although it is not monetizing those arrangements as aggressively as Hulu has done). For the Netflix hit show Stranger Things, Netflix has struck 75 co-branding deals, which typically provide Netflix exposure and licensing fees (although they are not product placements, per se). Recently, Netflix and sandwich chain Subway made it possible for Subway to offer a Green Eggs and Ham Sub, an homage to a new Netflix series “Green Eggs and Ham,” which is based on the Dr. Seuss book. The sandwich, in effect, acted as an advertising play for both Netflix and Subway. The awareness included strong digital branding, examples being promotions on Subway’s Instagram and Twitter.

Many other examples abound. For instance, clothing company Diesel paid a licensing fee to Netflix in order to manufacture outfits inspired by the popular Netflix show, La Casa de Papel. Diesel capitalized on the power of digital to run online ads that connected the brand to the show:

 

The Netflix-Diesel relationship is a win-win, generating licensing revenue for Netflix and culturally relevant branding for Diesel.

Amazon Prime Video, meanwhile, is no stranger to co-brands. The service, like Hulu, courts product placement opportunities. For example, snack brand Too Yumm! Recently struck a deal with Amazon Prime Video to have its products integrated into a sports drama thriller Inside Edge 2. Amazon recently struck a deal to have Cheerios placed in episodes of The Marvelous Mrs. Maisel, as well.

As these examples show, the growth of streaming services does not mean the demise of advertising and branding – far from it. In fact, as the Diesel and Subway examples demonstrate, streaming services create online advertising and organic branding through platforms ranging from Instagram to YouTube. In addition, a new survey from the Trade Desk and YouGov indicates that consumers of streaming services are open to advertising in exchange for lower prices.

In 2020, expect streaming services to generate more advertising and marketing opportunities as businesses look for creative ways to court audiences online.

Contact True Interactive

To make online advertising work for you, contact True Interactive. We’re an independent agency that optimizes branded interactions to drive traffic and increase sales.