Advertising in the magazine industry is challenging right now. Selling media requires brands to differentiate themselves, forcing them to be sharper and more unique in what and how they package content, and how they work with advertisers. It’s a complex world of supply chains and distribution, and one media exec thinks that industrial marketing mightn’t be around for long.
On the heels of his Amazonification of media presentation at DIS, we spoke with Troy Young, global president, Hearst Magazines Digital Media, about three of the broad trends he sees in the advertising industry.
Trend around performance and accountability
Marketers still work in three-month cycles: from client brief to agency RFP, to media company, to response from agency, then to client for a decision.
It’s a trend that modern marketers are doing less of this.
In February, the IAB published a study that showed that growth in most categories was moving to brands with flexible supply chains and specific consumer relationships. The study, titled “The Rise of the 21st Century Brand Economy,” reveals that direct brands like Allbirds (shoes), Dollar Shave Club (men’s grooming) and Birchbox (beauty) are supplanting indirect brands like Crocs, Payless and Gillette. According to the study, companies and consumers are increasingly communicating with each other directly, bypassing third-party intermediaries like ad agencies and publishers.
“While incumbents maintain scale advantages, (Rothenberg) said the successes of direct brand upstarts in grabbing sales and share in categories whose dominant players had been fixed for generations had caused the giants to alter their strategies and operations,” according to a release.
Instead of a three-month process with agencies, marketers are becoming closer to the mechanics of media buying. Companies are now looking for the fastest path to a closed-loop solution. Logging into Google and setting up a campaign may be more efficient.
“I think, increasingly, marketers are becoming accustomed to managing the control systems of advertising themselves,” Young said. “The distance that was created between marketers and marketing action, which used to be that space was filled with creative and media companies, that distance is shortening.”
Marketers are now working closer to the performance of their campaigns, with capital-flexible, low-barrier supply chains. Young said this approach is also closer to the data that tells them what’s working and what’s not, and is a far more iterative approach of spending and seeing what works and continuing their investment based on real understanding of who they’re reaching and what it’s doing.
“Marketers are quite liking the empowerment of what Google and Facebook have given them, regarding hyper-granular audience targeting, a lot of data, and the ability to control the levers themselves,” Young said.
Media companies, as Young explained, need to be aware of this trend and will have to adjust. “We need to help clients sell. We need to help them understand what sells, who buys, and why. It means that we will work more closely with clients to help them achieve tangible results. It means that we need to help clients understand what works much sooner.”
Advertisers want more data
Another trend Young highlighted is that advertisers want to know a lot more about where their audiences are inside of media brands.
“They want to know a lot more about our audiences and how and why they’re relevant to them,” Young said. “And that’s really the data challenge. They want to understand more about the shoe buyers or the beauty buyers, they want us to provide as much data as we can, about their shopping preferences and how their preferences, broadly, are changing. So, what we need to become, as a company, much smarter about every aspect of our audiences and what they’re doing on our properties and beyond.”
Consumer trust in advertising this year hasn’t had the smoothest ride. A survey by the European Commission, which polled approximately 26,500 EU residents, suggested that legacy publishers and broadcasters are most trusted, versus social networks like Facebook, which are much less trusted sources. Indeed, a second more recent poll by Monmouth University revealed that people think that outside groups actively plant fake news on social platforms.
Marketers have grappled with the issue of brand safety on digital platforms over the last year, prompting some CMOs to overhaul or make major changes to their digital marketing strategies. “Marketers have been wondering whether the world of digital advertising is a safe place for their brands,” wrote Andrew Stephen for Forbes. “Particularly in the age of programmatic advertising, where algorithms (or robots, if you prefer) determine where ads are placed and who potentially sees them, marketers are understandably concerned and perplexed.”
Yet, magazine media have proved remarkably resilient. According to research and data organisation Kantar, who released a global “Trust in News” study in October 2017, trust in mainstream news media remained intact despite the fake news scandal during recent elections in 2016 and 2017. “Print magazines are the most trusted news sources, while social media sites and messaging apps are least trusted around the world,” according to the study.
The trend around trustworthiness is positive for media companies who create professional, in-depth, well-researched journalism and have established media brands, according to Young.
“So much of what people buy from premium brands like ours is the associative relationship between their brand and ours in an environment that provides the right context for their products, because that storytelling aspect is really important to them,” Young said. “They’re trying to create an understanding of their brand, such that it cannot be seen in environments where it will be compromised because ultimately that will reduce the value of their brands.”
“Those are harder things to put in a spreadsheet, which is, you are who you associate with. I think in our world, that remains very much true, that if you want to be seen as premium, you have to be understood in a premium environment.”
Republished by kind permission of FIPP, the network for global media