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.

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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.

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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.

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8 Digital Advertising Predictions for 2020

8 Digital Advertising Predictions for 2020

Advertising

Google takes control of advertising. More businesses feel the heat over consumer privacy. Voice search gets smarter. These are among the trends influencing digital advertising in 2020, according to True Interactive. Here’s a sample of what’s on our minds:

1 Google Takes Control of Advertising

Google is taking away manual control of Google Advertising with the removal of the average position metric and by continuing to implement automated bidding tools and metrics such as top impression share that make measuring search ranking less transparent. As a result, CPCs are going up.

Going forward, Google will continue to push automated bidding strategies. Google’s rationale is that its algorithms are smarter, making it possible for Google to adjust bids per auction. But smarter bids are not necessarily less costly ones in the short term, and there is still much trepidation by marketers in handing total control over to Google, who stand stands to profit from an increase in CPCs and overall spend. Bottom line: as Google continues to make manual bidding more challenging, advertisers will be forced to buy into automated bidding with less transparency.  Expect CPCs to increase at least in the short term as businesses hand more control over to Google.

— Beth Bauch, senior manager

2 The CCPA Throws Down the Hammer on Big Tech

By July 2020, we will see the first major lawsuit against one of the big technology firms – likely Facebook or Google – over a violation of the California Consumer Privacy Act (CCPA). The CCPA, which goes into effect January 1, is evolving. Businesses are still figuring out its vagaries and requirements. Google and Facebook are in interesting and vulnerable position because they touch so much audience data for businesses, increasing their risk level. And we know Facebook’s track record for privacy violations, don’t we? Watch for it: a major lawsuit will happen that forces businesses to come to terms with the CCPA.

— Tim Colucci, vice president

3 Netflix Adopts Advertising

Netflix will need to adopt some form of advertising. Netflix has achieved phenomenal growth, to be sure. But the entertainment company also faces unprecedented threats with Disney+ and, eventually, Apple+ once Apple figures out a long-term strategy that works. (Apple has a lot of cash and time to get Apple+ right. Just wait.)

In addition, the cost of creating content is putting Netflix in an interesting bind: when Netflix has a hit show, it has to spend more money to accommodate audience demand, creating even more costs. On top of all that, for the first time in a long time, Netflix has reported drops in membership levels.

Netflix will likely introduce a less-expensive ad-based model, but the company will also do something it has avoided pursuing: product placements in shows like Stranger Things, which popularized brands such as Kellogg’s Eggos without earning Netflix a dime in return. Those days will come to an end as Netflix responds to pressure from investors to cover its costs and respond to the threat of Disney.

— Héctor Ariza, manager

4 Voice Search Gets Smarter and More Useful

I’ve written often about the rise of voice search, and I continue to see more people using their voices to find things with their smart speakers, phones, and in-car devices. But what’s changing is that people are getting more comfortable buying things, not just searching for things, with their voices. That’s happening because as we get accustomed to the ease of using our voices to manage our lives, we are gradually becoming more comfortable accomplishing more complex tasks. In addition, thanks to improvements in artificial intelligence, voice-enabled devices are getting smarter and more capable of managing purchases and product orders. Frankly, the market got flooded with smart speakers such as Amazon Echo and Google Home before AI was adequately advanced to make a voice-activated speaker as smart as we’d like them to be. Those days are rapidly drawing to a close.

— Taylor Murphy, manager

5 Google Monetizes Maps and Google My Business

We recently blogged about the fact that half of searches on Google stay on Google properties such as Google Maps, YouTube, and a business’s Google My Business (GMB) listing. In other words, half of searches are not resulting in clicks on a business’s website. In addition, Google My Business is the most important local search signal according to the Moz Local Search Ranking Factors. These data points mean that businesses need to invest more time and energy maximizing the value of their presence on Google. Google knows this reality and is getting more aggressive about offering advertising products for businesses on these sites. Earlier in 2019, Bloomberg discussed how Google is evolving Google Maps with more advertising tools. Especially as more cars integrate mapping technology, Google is going to place even more advertising emphasis here. I also expect Google to provide more advertising options for businesses to promote themselves on their GMB listings. I also would not be surprised If Google introduces a premium version of GMB in which businesses will enjoy more features for a cost.

— Mark Smith, co-founder

6 Cause Marketing Faces a Reckoning

Cause marketing has been around for years. Businesses have learned they can create stronger emotional ties with customers and job seekers by associating themselves with a topical issue such as sustainability. In 2019, businesses were falling all over themselves to promote a position on sustainability as the topic reached all-time levels of public awareness. But there’s just one hitch: we’re seeing a glut of cause marketing campaigns, and they’re not necessarily connecting with consumers. I was reading a recent report from DoSomething Strategic that discusses how businesses have struggled to make their cause marketing connect with young people. Gen Z definitely wants to associate with purpose-driven companies. But businesses still have a lot of work to do in order to convince them that they’re aligned with Gen Z values. Businesses are going to become more careful about how they do cause marketing. I believe we’ll see fewer online ads and a more thoughtful use of content marketing, PR, social media, and native advertising in which a business can spend more time having a longer-term discussion about issues it cares about. Businesses will humanize these conversations by sharing their position through the voices of their people.

— Kurt Anagnostopoulos, co-founder

7 Agile Advertising Takes Hold

We all know about real-time marketing, in which a brand uses social media to turn a news event into a marketing opportunity. Agile advertising occurs when a business acts on a recent event and creates a connected marketing experience that endures well beyond a single tweet, Facebook post, or other digital impression. We saw Bud Light exercise agile advertising during the World Series when it capitalized on the fact that a fan in the stands stopped a home run ball with his chest while holding two Bud Lights in his hands. Bud Light created a series of marketing moments including creating a branded T shirt depicting the fan stopping the home run ball. Bud Light paid the fan to attend another World Series game sporting the Bud Light attire. We also saw agile advertising in action when Aviation Gin created a slick ad online that gently made light of the controversial Pelton cycling ad. I see more businesses adopting this practice because the digital production tools have evolved to the point where talented storytellers can quickly conceive of an idea and get it into market with an ad that taps into current events and endures for days and weeks.

— Max Petungaro, associate

8 Hispanic Marketing Hits Its Stride

In the United States, 69 counties are majority Hispanic, doubling from 34 in 2010. Hispanics have increased their economic power, reflecting a growingly diverse U.S. population. In 2020, Hispanics will possess $1.7 trillion in buying power. The United States continues to reflect Hispanic tastes in all aspects of our culture (including and beyond the Hispanic community, ranging from movies to popular music). We’re going to see businesses apply research and targeting to do more effective, sophisticated Hispanic marketing that recognizes the diversity and tastes that reside among Hispanics. Brands are already capitalizing on this growing market. (For more insight about marketing to Hispanics, check out our blog post.) And tech companies such as Google are responding to a more multicultural world in general by making their platforms more open to people who speak languages other than English, an example being how the Google Assistant voice software can interpret 44 languages on smart phones. These types of developments will help bridge the world between businesses and Hispanics in 2020.

— Amanda Cortese, associate

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Photo by Diego Jimenez on Unsplash

Facebook’s Growth Highlights Importance of Messenger

Facebook’s Growth Highlights Importance of Messenger

Advertising Facebook

Facebook is having a good year financially. In its recent third-quarter 2019 earnings announcement, the company bested analyst expectations for growth in not only revenue but also membership: monthly active users now number 2.45 billion. Facebook isn’t going anywhere even though its problems have brought upon itself the threat of government regulation and even break-up.

What is Facebook doing right? Well, here’s one answer: Messenger.

What Is Facebook Messenger?

Facebook Messenger is an app that people and businesses use to communicate with each other. Users can send messages, react to messages from others, and exchange photos, videos, and audio files. Facebook operates Messenger as a separate app. And it’s an extremely useful tool for brands, which can share all sorts of things, including ads. Through Facebook Messenger Ads, companies and users enjoy real-time text conversations—with the click of a button.

Currently, Facebook offers a number of different types of Messenger Ads:

  • Destination ads, which employ a lighter touch to engage customers. Rather than the usual “Shop Now” call to action, a “Send Message” button allows users to “get their feet wet,” as it were, and grow acquainted with a brand.
  • Sponsored messages, which deliver specially created messages (a sale coupon, for example) directly to a consumer’s inbox.
  • Home section ads, which crop up in the home dashboard of the messaging application and allow users and brands to engage in organic conversations.

Brands embracing tools like Messenger Ads stand to benefit: according to Facebook, 53 percent of users are more likely to make a purchase if they can message you. And because Facebook Messenger Ads don’t target non-brand-aware users, companies connect with people who have already interacted with their ads previously—an audience that is likely to be receptive (brands also gain points for not invasively reaching out to . . . everyone). Finally, it’s worth noting that Messenger Ads offer local targeting options, allowing brands to touch base with a specific audience based on where the business is located.

What Does Facebook Have to Say About Messenger?

During a recent conference call with investors, CEO Mark Zuckerberg and COO Sheryl Sandberg returned to the topic of Messenger, and its importance, several times. Some key points stand out:

  • Businesses are already using Messenger to drive sales. According to Sheryl Sandberg: “Messaging is one of the fastest growing areas for online communication–especially between businesses and people. We’ve seen businesses use Messenger to reach customers, generate new leads and even sell cars. For example, French auto manufacturer Renault used a combination of Instagram Stories and Click-to Messenger ads to drive sales of a limited-edition vehicle, the Captur Tokyo. Facebook was their only advertising channel, and over the span of 30 days, they sold 100 cars—20 directly through Messenger. This quarter we added a Click-to-Messenger feature in Stories so businesses can grab someone’s attention in Stories and then continue the conversation.”
  • Messenger and Stories Deliver a 1-2 Punch. As noted above, Renault is using Messenger in conjunction with Stories. In the investor earnings call, Zuckerberg and Sandberg underline how businesses can maximize the value of features like Messenger through this type of imaginative pairing. To make it easier for more brands to create ads for the Stories format, Facebook has launched customizable templates for Facebook, Instagram, and Messenger. Advertisers can upload existing photos and videos, then augment them with different layout, color, and text options. The end result? More engaging Stories. And the Click-to-Messenger feature Sandberg references makes it possible for businesses to capture a user’s attention on Stories and then continue the conversation via Messenger.

What You Should Do

 When using Messenger as part of outreach:

  • Consider how Messenger will serve your brand in the context of the entire customer journey. Messenger Ads can spark interest, for example, and the Messenger the app can be a brilliant customer service tool.
  • Combine Messenger with Stories for an engaging and ultimately personal customer experience.

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How Brands Are Making Sweet Music on Spotify

How Brands Are Making Sweet Music on Spotify

Advertising

Spotify is more than a popular, iconic streaming service. It’s a platform for businesses to reach an audience—specifically Millennials and Generation Z—through advertising. And there’s much to be learned from the brands that know how to do it right. Read on for some examples of companies who have advertised on Spotify in smart, creative ways that push the envelope and speak directly to their target audience:

Pepsi “Maxes” Summer Fun

Armed with the knowledge that customers are more likely to crave a cold drink in hot weather, PepsiCo turned up the heat by promoting Pepsi Max, a low-calorie, sugar-free cola. As part of their “Max Your Summer” campaign, which reached out to Australian consumers aged 18 to 49, the beverage giant used dynamic advertising on Spotify, including audio spots focusing on events co-sponsored by Pepsi. The campaign, which ran during the Australian summer, November 2017 to February 2018, was meant to keep listeners up to speed on summer fun in their area, with ads tailored to day of the week and consumer location. The localized approach yielded tangible benefits for Pepsi. According to Power Digital Marketing, “Users who saw the campaign were 34% more likely to agree that ‘Pepsi Max is the #1 tasting no-sugar cola.’”

Hungry? Have a Snickers

In 2018, Spotify ads for the Snickers candy bar operated under a unique premise: that consumers who listen to music outside their typical tastes or comfort zones are in fact . . . hungrier. In creating its campaign, Snickers drew from Spotify data suggesting that a consumer who makes an unexpected switch to a different musical genre or artist is in a different mood, and that mood changes can correlate with hunger. The resulting ad, which targeted listeners who changed things up, featured faux musician “Aneta Snickers” rapping about how when you are hungry, “you’re not you.” The answer for the presumably hungry listener? A Snickers bar, natch.

Jose Cuervo Wants Your Favorite Playlist

In a Spotify campaign targeting United Kingdom college students, Spotify and Jose Cuervo tequila partnered with 50 student radio stations in the UK to collect playlists curated by students from 50 universities. The lists were subjected to a public vote; student consumers could vote for their uni playlist and the chance to win a concert. The campaign was a success for Jose Cuervo and Spotify: votes far exceeded campaign predictions. And it was a success for students at the winning University of Portsmouth, who enjoyed a concert headlined by Alexis Taylor (Hot Chip) and Orlando Weeks (The Maccabees).

Chuze Fitness Reaches Out When You Work Out

Chuze Fitness has also made the most of the Spotify platform. The gym chain, which has been growing nationally, wanted to create brand awareness for their new locations. Of course, when people work out, they listen to music. So Chuze Fitness worked with Spotify to deliver their message. The resulting advertising campaign geo-targeted the city where the new Chuze Fitness gyms were located, even as it specifically targeted people listening to “fitness” playlists. The strategy proved profitable: according to Power Digital Marketing, Chuze Fitness “saw an uptick in their brand interest on Google through Google trends within the city [where] they were advertising.”

Why Spotify?

Companies who work with Spotify can benefit from the platform’s strong brand. They also can maximize their reach thanks to Spotify’s exceptional targeting tools, such as:

  • Interest targeting, which helps brands understand consumers’ passions via their listening preferences, and subsequently connect with a specific audience in a meaningful—and effective—way.
  • Real-time context targeting, which allows brands to target people based on their habits—and tendencies—at specific times of day. Someone waking up is typically in a different frame of mind than someone studying, or to use the Snickers example, someone who is hungry. Understanding the psychology of users at different times, and when might be the best time to share a branded message with that user, is a powerful tool.

Of course, Spotify isn’t the only game in town. The platform faces stiff competition from Apple Music, Amazon, and other streaming services. But in a crowded market for music streaming, Spotify still stands out.

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How to Advertise to Gen Z

How to Advertise to Gen Z

Advertising

Generation Z is a fast-growing demographic, and savvy businesses are getting to know them and how to connect with them, as good marketers have done with generations that precede Gen Z, such as Millennials and Baby Boomers. Who makes up Gen Z, and why are they important? Read on for a thumbnail sketch of the generation that has grown up in an “always on” technological environment.

Who Is Gen Z?

Pew Research defines Generation Z as anyone born from 1997 onward. Bloomberg research indicates that in 2019, Gen Z will comprise about 32 percent of the population, making it the most populous generation — larger even than the Millennial generation, which, for years, has dominated the imagination and attention of advertisers.

Gen Z is different from any other generation because of one simple fact: they are true digital natives. They don’t know life without smart phones. In addition, they are growing up in an economy where ownership isn’t mandatory or even preferable: Older Gen Zers are comfortable renting someone else’s belongings to get from Point A to Point B (think Uber) or spending time in a new city (Airbnb), a pattern that will probably persist once they come of age and have real spending power. And this is a generation invested in meaningful social connection and expression, where “friend” count, or quantity, is less important than the quality and personal nature of one’s connections.

5 Way to Connect with Gen Z

It’s important that your business understand how to communicate with Gen Z. What are the keys to a meaningful connection with a tech-savvy generation that values just that — connection?

1 Lead with Digital

Use online advertising as the cornerstone for all your advertising. Remember, this is the generation that is growing up digital. As Jonah Stillman, the co-author of “Gen Z @ Work” and a 2018 panelist at Advertising Week in New York City, has noted, “[Generation Z] sees no difference between the physical and digital worlds. This is a generation that is native to technology and has complete comfortability with [their] phones.” This is also a multi-screen generation: if Millennials are known to use three screens at once, you can plan on Gen Z using five. Make sure your ads are present across multiple platforms in order to optimize views and clicks.

2 Be Visual

Gen Z is growing up in the age of YouTube and Instagram. For example, online videos are a key brand discovery platform: Marketing Dive reports that 56 percent of the group has indicated “they want video to reflect the products and services they already own or are specifically interested in.” As we have blogged, creating great visual content is no longer a nice to do – it’s a must-do.

3 Look beyond Facebook

In 2018, eMarketer senior forecasting analyst Oscar Orozco told Business Insider that “[o]utside of those who have already left, teens and tweens remaining on Facebook seem to be less engaged—logging in less frequently and spending less time on the platform.” A 2017 Piper Jaffray survey, in which only nine percent of teens designated Facebook as their preferred social-media platform, confirms this trend. As nineteen-year-old Ishan Goel, a marketing strategist with the Mark Cuban Companies, observes, being on Facebook is “not cool.”

So where is Gen Z spending its digital time? According to Ishan Goel, “Because Gen Zers are individualistic and value their privacy, they prefer anonymous social media like Snapchat, Secret, and Whisper rather than Facebook,” An Hodgson, an income and expenditure manager at Euromonitor International, notes that Instagram is also a go-to.

4 Be Authentic

This isn’t necessarily a generation invested in status. Piper Jaffrey reports that “refined-classic” brands like Ralph Lauren or Vineyard Vines are suffering record lows in the Gen Z market, dropping from a 14 percent average to a 5 percent market share among teens. (That said, according to a recent report from consultancy Irregular Labs, 25 percent of the 1,000 13- to 24-year-old females surveyed indicated that they are saving up to buy a luxury product.)

Gen Zers also value ads with everyday people in them, as opposed to celebrities. Look to retailers like Target for a sense of how to get it right when it comes to authenticity: in Target’s online as well as in-store advertising for women’s fashions, for example, models come in all shapes. And in the store itself, even the mannequins showcasing the clothing are different sizes.

5 Tread Carefully with Cause Marketing

Gen Zers value social issues. In a new study from the consulting firm DoSomething Strategic, two-thirds of Gen Z consumers indicate that there is a correlation between a brand’s association with a social cause and positive impressions of that brand. That said, authenticity (see above) must be established: any whiff of a disconnect between the cause marketing and a company’s values, and Gen Z will not be impressed. Furthermore, a study published in the Journal of Advertising Research suggests that businesses should avoid relying on guilt in any cause-related marketing they pursue.

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