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Adweek - April 30, 2018

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VIDEO
ROUNDTABLE
NEWFRONTS,
BRAND SAFETY
AND MORE!
NOSTALGIA KICK
YOUTUBE RED IS BETTING ON ITS NEW KARATE KID-BASED SERIES
COBRA KAI TO SHIFT ITS ORIGINAL CONTENT PUSH INTO HIGH GEAR.
BY JASON LYNCH
WILLIAM ZABKA (L.) AND RALPH MACCHIO
IN THIS ISSUE
ING
APRIL 30, 2018 | VOL. LIX NO. 11
14
FEATURE
The Karate Kid is back
with new series Cobra Kai,
and underdog YouTube Red
is all over it.
AM
NTE
PRIME ME
LISA LACY
In its latest lette
membership fees in
renewals. This mark
Olsavsky said durin
high, as we pointed
Amazon rep explain
which have increa
Same-Day and Pri
company bo
7
TRENDING
Upstart underwear
brands are taking off.
raise annual Prime
mbers and June 16 for
as never been greater,”
n. “And the cost is also
see rises in costs.” An
ree two-day shipping,
ansion of Prime Free
just a week after the
ers worldwide.
AGENCIES
11
C-SUITE
SHUFFLE
DATA
POINTS
How the
NewFronts
influence
advertisers’
budgets.
AD OF
THE DAY
BIG NUMBER
22
PERSPECTIVE
Grand Theft Auto proved
all press is good press.
25
PORTRAIT
AGW specializes in the
unconventional.
C O V E R : A X E L D U P E U X ; T H I S PAG E : T O P S T O RY: I S T O C K P H O T O ; B I G N U M B E R : G E T T Y I M AG E S
Facebook
Facebook wants to hit reset. Its new campaign aims
to convince users that Facebook can go back to the
days of being a platform primarily for friends sharing
photos, messages and party invites, with the sole
mission of connection. Of course, the creative team
isn’t naive. They know people aren’t going to move
past privacy and data issues, clickbait, fake news and
all of the other problems that have permeated the
platform in recent years. This campaign, especially
the out-of-home work, tries to address that with a
message that the company is working hard to fix
what went wrong. —Kristina Monllos
MOOD BOARD
20b
THE EU WANTS
TO INVEST
20 BILLION
EUROS IN
ARTIFICIAL
INTELLIGENCE
RESEARCH
BY 2020.
The Week in Emojis
S TA R B U R S T
SPOTIFY
AMAZON
LAUNCHED A CLOTHING LINE
I N S P I R E D B Y T H E O N LY C A N D Y
C O L O R T H AT M AT T E R S : P I N K .
T U R N E D A S U B WAY S TAT I O N
INTO AN INTERACTIVE
H O M A G E T O D AV I D B O W I E .
IS NOW OFFERING IN-CAR
DELIVERY FOR ITS U.S.
PRIME MEMBERS.
On Wednesday, 360i announced
the promotion of president Jared
Belsky (1) to CEO. His predecessor,
Sarah Hofstetter (2), will take on
the chair role in what amounts
to the latest C-suite shift for the
Dentsu-owned network. Last
month, the agency promoted CMO
Abbey Klaassen (3) to president
of its New York headquarters;
just this week, former 360i CEO
and chairman Bryan Wiener (4)
became CEO of comScore as the
measurement company looks
to re-establish its place in the
market. Belsky, Hofstetter and
Klaassen will continue leading
the organization, along with CCO
Menno Kluin. —Patrick Coffee
1
2
3
4
EDITOR’S LETTER
Membership Will
Have Its Privileges
JOIN ADWEEK PRO TO ACCESS PRINT AND
DIGITAL CONTENT, EVENTS AND EXCLUSIVES.
As a nearly 40-year-old brand,
Adweek has a rich history of following
the key trends shaping the businesses
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about. We pride ourselves on being
nimble and scrappy enough to change
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We have adapted along the way
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Pro, a new community-driven
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4
of content per month for free,
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Membership plans start at just $6 for
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The past two years have seen
change, at scale and at pace, that
the media and marketing worlds
have never seen before. Careers
and businesses hang in the balance
as our world transforms. And we
are really at the beginning of this
generational story arc.
The new Adweek Pro
membership oferings and site
upgrades announced today are to
help follow that story through a
tighter, highly symbiotic bond with
our community, which will help
inform and guide our best-in-class
content, products and franchises.
It will be our honor to host
this community, and we know
membership will have its privileges.
James Cooper
editorial director
@jcoopernyc
APRIL 30, 2018 | ADWEEK
ing up mostly endemic ads. MLS has attracted
brands like PlayStation, EA, Adidas and AT&T
for its new esports league featuring 19 of MLS’
23 teams. During its first competitive tournament, the eMLS Cup, viewership on Twitch
increased throughout the broadcast, peaking
at 30,000 viewers, according to Twitch.
The NBA 2K League, which launches May
1 on the NBA 2K League Twitch channel,
already counts Dell and Intel as advertisers.
“The NBA has a global reach, so combining
our eforts to deliver a great on-court experience for both the professional esports players
and viewers is a natural fit,” said Bryan de
Zayas, director of marketing and esports at
Dell Gaming and Alienware. “Through this
partnership, we’re trying to close the gap
Madden competitions
between traditional sports fans and esports
are tied to NFL events
fans while delivering a superb gaming and
such as the Super
SPORTS MARKETING
viewing experience for esports fans.”
Bowl and NFL Draft.
Dell has been supporting the esports
industry for over a decade. The company is
the official PC hardware and monitor partner for the NBA 2K League, and will leverage its gaming brand Alienware throughout
the season. But slowly, more mainstream
THE NFL AND MLS ARE TARGETING GAMERS AND
advertisers are signing on. “We are now
ADVERTISERS WITH THEIR NEW ELEAGUES. BY A.J. KATZ
noticing significant investments in esports
from non-endemic brands, particularly
beverages, packaged goods, snacks and
auto,” said Dario Raciti, director of Zero
Code, OMD’s interactive entertainment
leagues and score some of the $906 million
t’s no secret esports is booming as
unit. Meanwhile, NFL’s Madden 18 Ultiin revenue projected for this year, according
mainstream media companies like
mate League Championship ran on ESPN2
to Newzoo, an esports market research firm.
ESPN and Turner Broadcasting sign
and Twitch on April 28. David Highhill,
Pro sports leagues see two benefits from the
on—all with an eye toward reaching
head of NFL esports strategy, said esports
new franchises: attracting a broader array of
young men and the advertisers that
not only serve as a phenomenal platform
advertisers and building out their brands.
would follow. But for the most part,
for the NFL to reach its existing
MLS senior director of properthe bulk of hard-core gamers is still drawn to
fans wherever they are, but it’s also
ties and events James Ruth said
Amazon’s Twitch and YouTube, streaming
a way to develop new fans.
diving into the gaming space
the less brand-friendly, first-person shooter
“We’re doing a very thoughtmakes a lot of sense for the younggames like Call of Duty, Counter-Strike:
Projected
ful job of tying key moments of the
er-skewing audience. Ruth said
Global Ofensive and Overwatch. But now
esports
competitive gaming calendar into the
roughly 65 percent of avid MLS
professional sports leagues are beginning
market
key moments of our NFL calendar,”
followers became fans of soccer
to partner with Twitch, as well as cable nets
revenue
said Highhill, explaining the league
by way of EA Sports’ FIFA, which
ESPN2 and Disney XD, and are ushering
in 2020.
aligned competitions with the Pro
is a higher percentage than those
brands into the burgeoning esports space.
SOURCE:
NEWZOO
Bowl, Super Bowl and NFL Draft.
who became MLS fans by actually
With 2 billion gamers on the planet and 385
While OMD’s Raciti has a bit of trepiplaying the sport. “As we continue
million interested in watching esports, gamdation when it comes to the traditional sports
to think about the channels we have availing has huge potential.
leagues in the esports arena, given relatively
able to us to build our next generation of
That’s why professional sports leagues
low viewing numbers, he’s still bullish on
like the NBA, NFL and MLS are working with fans, gaming is really important to that,”
the growth of esports overall. “There’s also
said Ruth. Many MLS players are gamers
video game publishers to build their own
a diferent kind of interaction between the
themselves, and with that in mind, “It’s only
athletes and the fans in the esports world,”
natural
for
MLS
to
use
gaming
as
a
conduit
A . J . K AT Z I S A S TA F F W R I T E R F O R A D W E E K , W H E R E
HE SPECIALIZES IN COV ERING MEDIA PERSONALITIES,
explained Raciti. “That’s what attracts the
to create great content, or diferent touch
T E L E V I S I O N R AT I N G S A N D P R O G R A M M I N G . HE I S
millennial audience, and consequently what
points with fans,” said Ruth.
C O - EDI TOR OF A DW EEK ’S T V N E W S E R B L O G C O V E R I N G
T H E N AT I O N A L N E W S I N D U S T R Y. @A J K AT Z T V
In terms of advertising, eleagues are scoop- attracts marketers.”
Esports Goes Pro
I
6
$1.4b
APRIL 30, 2018 | ADWEEK
TRENDING
CHALLENGER BRANDS
PANTY RAID
THE WONDERFUL WORLD OF UNDERWEAR
These four underwear brands are throwing out the conventional
sexualized marketing tactics to focus on comfort and simplicity.
Everlane’s new
underwear line
is all about
comfort and
“No frills.”
STARTUPS ARE USING COMFORT AND
INNOVATION TO STEAL BUYERS FROM
ESTABLISHED BRANDS. BY KATIE RICHARDS
Ladies’ lingerie brands are the latest
in the fight to fend off digital upstarts.
For years, Victoria’s Secret has been
the dominant brand, with roughly 50
percent of the women’s underwear
market share, but last year its sales
reportedly saw a drop-off with each
passing month (as much as 10 to 14
percent from month to month in early
2017, per Women’s Wear Daily). And in a
recent survey by research firm YouGov
BrandIndex, consumer satisfaction has
fallen among women 18 to 49.
Now a new wave of
undergarments, from Tommy John
to ThirdLove, is starting to garner
attention and win over consumers
thanks to new marketing tactics
and product innovation. “These
competitors have the advantage of
being a new voice in this market while
Victoria’s Secret is really stuck trying
to turn the Titanic,” Valerie Aurilio,
executive creative director at Landor,
said. “These brands haven’t lost sight
of what’s important. The product is
the focus of what they are selling.”
That’s not to say Victoria’s Secret
is going away. Analysts suggest that
as long as women buy lingerie and
athletic wear, Victoria’s Secret has
a spot in the marketplace, even if
its presence is shrinking. “Victoria’s
Secret will be around in 10 years,
but it’s going to be much smaller
and to some extent part of it is
their traditional retail foundation,”
Allen Adamson, founder and CEO of
BrandSimple Consulting, predicted.
Victoria’s Secret did not respond to a
request for comment.
Some undergarment brands like
MeUndies launched as a means of
convenience for customers, sending
members a fresh pair of undies each
month. “The convenience of having
… the most comfortable underwear
delivered each month is an easy
way to refresh the entire underwear
drawer,” Jonathan Shokrian,
MeUndies founder, explained.
K AT IE R I CH A R D S I S A S TA F F
W R I T E R F O R A D W E E K S P EC I A L I Z IN G
IN B R A N D S A N D M A R K E T IN G
T R EN D S . @K TJ R I CH A R D S
ADWEEK | APRIL 30, 2018
Other brands like Tommy John
also think about convenience, but put
product innovation at the forefront
of what it does. Tommy John, which
launched 10 years ago for men, started
as a way to fix comfort and design
flaws that customers experienced
with other boxer or brief brands. After
years of women either buying the
men’s product or repeatedly asking for
a women’s line, Tommy John finally
delivered in early April. “There was
a gap in the market for comfortable,
functional and sexy underwear. We
didn’t feel that women should have
to compromise comfort for sexiness
or sexiness for functionality,” Tommy
John marketing chief Josh Dean said.
Dean said the women’s line sold more
in its first day than the men’s line sold
in the company’s first year in business.
Clearly the hunch paid off.
ThirdLove launched in 2013
on a similar premise—there was a
gap in the market when it came to
comfortable bras that were well
made and fi t women of all sizes. The
online retailer became the first and
only brand to offer half-cup sizes for
women. Overall, ThirdLove has nearly
70 sizes available, which is more
than double Victoria’s Secret—the
brand’s biggest competition. While
developing nearly 70 sizes, ThirdLove
has collected data from nearly 9.5
million women through the brand’s
Fit Finder—an online quiz designed
to find the perfect-fi tting bra. For
that reason, co-founder Heidi Zak
believes her company has staying
power in the competitive industry as
more look-alike brands surface and
as traditional retailers try to revamp
their product and marketing.
These brands are also standing
out among female consumers with a
new approach to marketing underwear.
Typically, women are sold lace and
frills by women who, by definition,
represent an unrealistic standard of
beauty. At least that’s what Tommy
John’s CMO noticed when the brand
started to work on its inaugural
marketing campaign for the launch of
its women’s line. “There’s a lot of very
serious and sexualized advertising
ThirdLove has collected
data on 9.5 million women
through its Fit Finder.
MeUndies
promotes gender
neutrality, body
positivity and
inclusion in its ads.
Elizabeth Banks directed
humorous spots about bunching
underwear for Tommy John.
out there. No one has really talked to
women in an engaging and humorous
way about their underwear that
addresses the problems they face
in a way that doesn’t take itself too
seriously,” Dean said.
Tommy John’s first marketing
campaign tapped actress Elizabeth
Banks to direct a series of lighthearted
and humorous spots about the
everyday underwear problems
women face. A 60-second spot from
the brand’s “Little Adjustments”
campaign garnered over 1 million
YouTube views in just a week, proving
the success of the message and its
tone. Ecommerce brand Everlane took
a similar approach when launching its
underwear line in March. The brand
ran out-of-home, digital and social ads
announcing the “No frills. No bows.
No bullshit.” line. While these spots
weren’t necessarily humorous, they did
take a straightforward approach with
consumers and showed women of all
shapes and sizes.
7
TRENDING
SO, HOW’S THAT
TRUST THING?
THE JURY IS STILL OUT ON WHETHER MEDIA
SHOPS HAVE ENTERED AN ERA OF ‘RADICAL
TRANSPARENCY.’ BY PATRICK COFFEE
“One-sided.” “Inconclusive.”
“Immense shortcomings.” The ad
world’s response to an anonymously
sourced 2016 study on media
transparency conducted by the ANA,
K2 Intelligence and analytics company
Ebiquity was almost universally
negative. As Publicis Media CEO Steve
King put it, “The whole industry was
tarred by one or two rogue players.”
Yet the report, which focused on
8
cash rebates and other markups that
publishers allegedly paid to major
media shops without their clients’
knowledge, has had an undeniable
influence on the most profitable part
of the agency world in the two years
since its release. Its findings frayed
an already fragile sense of trust
between clients and agencies, and
they continue to affect the ways the
world’s largest advertisers manage
PATRICK COFFEE IS A SENIOR
EDITOR FOR ADW EEK , W HERE HE
SPECIALIZES IN COV ERING AGENCIES,
BR ANDS AND INDUSTRY TRENDS. HE
IS EDITOR OF ADW EEK’S AGENCYSPY
BLOG. @PATRICKCOFFEE
Trust, however, has no monetary
value. “The industry has gotten used
to a conflicted business model,”
Albrecht said, adding that agencies
look to play the metaphorical roles
of both doctor and pharmacist by
advising clients to buy inventory
that benefits their bottom lines. All
involved parties, he said, have acted in
their own short-term interests to the
detriment of the larger ecosystem as
holding groups look to squeeze evergreater profits from their media wings.
Yet some industry leaders still
claim the hype around transparency
outweighs the reality. “Transparency
is table stakes,” said one media
agency veteran who noted that the
vast majority of reviews still hinge
on price negotiations. King even
argued that the controversy has
‘The whole
[media]
industry
was tarred
by one or two
rogue players.’
Steve King, CEO, Publicis Media
made Publicis Media stronger. While
some of the network’s largest clients
initially paused their media buys after
the report went live, King said that
Publicis passed “all 34” subsequent
audits—and that the ANA study
ultimately “acted as one of the best
advertisements for our group.”
“I feel very strongly about trust,
because a lot of people are throwing
bricks at our industry,” King added,
citing Publicis Groupe’s recent moves
to make contract language clearer and
its investment in the NewsGuard “fake
news” content filter.
Liodice, who referenced a pair of
2017 surveys in which a majority of
U.S. and U.K. marketers said the ANA
report had led them to act, believes
the movement has expanded well
beyond its initial focus on kickbacks,
and he remains “slightly optimistic”
it will push clients to become more
responsible stewards of their own
budgets. When asked to predict its
long-term influence, he said, “I have
a feeling it will stick to our ribs better
than we thought.”
APRIL 30, 2018 | ADWEEK
STUART KINLOUGH/GETT Y IMAGES
AGENCIES
their own budgets.
P&G’s Marc Pritchard, for example,
recently described the ongoing
quest for greater transparency as
“marketers taking back control of our
own destiny.” “It gets to the very root
of trust and value between clients
and agencies,” said P.J. Leary of PJL
Media, who oversaw much of the
study while serving as chairman of
Ebiquity. He noted that his company
was “well aware of the issue” years
before a 2015 ANA speech by former
MediaCom CEO Jon Mandel first “lit
the fuse” on the matter of kickbacks.
And despite agencies’ protests,
clients have been paying attention.
“Advertisers now see transparency
as a competitive advantage,” said
Tom Denford, co-founder of search
consultancy ID Comms. “We have
advised them on $5 billion in media
negotiations in the last year, and the
majority of this has involved progress
on transparency.”
Agencies themselves have also
acted, albeit reluctantly; most in
the U.S. have adopted the ANA’s
suggested media contract template,
which came from the U.K.’s ISBA. In a
more dramatic example, independent
shop Crossmedia recently took what it
believes to be an unprecedented step
by hiring a major global accounting
firm to conduct an internal audit of
its U.S. operations. According to a
letter CEO Kamran Asghar sent to
all partners, the goal was to “instill
our clients’ confidence in us” by
confirming that Crossmedia adheres
to its own Seven Principles, which
seek to eliminate any perception
of conflicts or revenue drawn from
sources other than “remuneration
arrangements with clients.” “All
negotiated value is client value,
meaning whatever we negotiate we
turn over to our clients,” said Asghar,
who calls his modus operandi “radical
transparency.”
Why do so many agencies
resist this approach? “Transparent
behavior does reduce profit margins,”
said ANA CEO Bob Liodice—and
Omnicom’s John Wren acknowledged
as much in an early 2017 earnings
call. Crossmedia co-founder Martin
Albrecht also said that “we would
never claim to be the cheapest agency
in town” while joking that he has yet to
pay off his mortgage.
TRENDING
CUSTOMER EXPERIENCE
The Next
Generation
Of Loyalty
Programs
WHY COMPANIES ARE TRADING
IN POINTS FOR BRAND-BUILDING
EXPERIENCES. BY LISA LACY
hanks to Amazon’s latest
shareholder letter, we know its
formidable Prime subscription
service now has 100 million
members who order more than
5 billion products a year.
Competing retailers have rolled out comparable two-day (and faster) delivery options, but
Prime sets a high bar with streaming movies,
TV and music, as well as access to books and
shopping deals. Amazon is also a daunting adversary when it comes to price and convenience.
But retailers have an opportunity to distinguish themselves by providing personalized
services with early and/or exclusive access to
dstrom ofering Rewards Card holders early
products, which has become a more important access to anniversary sales, exclusive holiday
part of their loyalty programs as consumer
points events and VIP access to store events.
interest wanes in transactional value.
Another example is Mac Cosmetics’ Select
In fact, Marissa Tarleton, CMO of savings
Loyalty Program, which is tiered based on
site RetailMeNot, said loyalty is no longer a
dollars spent in a calendar year with benefits
single program, but rather a product, marketing like exclusive products, early access to collecand business strategy that builds products and
tions, complimentary makeup applications,
experiences to make customers repeat visitors.
birthday gifts and exclusive event invitations.
“Loyalty for most brands is about
Target’s RedCard holders also
frequency and retaining users long
have early access to events like its
term,” she added.
collaboration with British boot brand
Research from professional
of consumers
Hunter. In addition, they receive 5
say customer
services network PwC found 73
percent back on all Target purchases
experience is a
percent of consumers say customer
and free two-day shipping. As a
top factor in
experience is a top factor in making
result, Target said RedCard holdmaking a
a purchase decision.
ers are some of its most loyal guests,
purchase
And, David Clarke, global chief
generating nearly 25 percent of sales
decision.
experience officer, experience consultin 2017. With $71.9 billion in revenue
SOURCE: PWC
ing leader and principal at PwC, said
last year, that’s nearly $18 billion.
successful companies transcend being a product
“A program like this appeals to Prime memor service and instead become platforms that
bers’ sensibilities while also reinforcing Target’s
foster communities of like-minded people.
diferentiators in a way that makes clear why it
“I think smart brands will think about
makes sense to be loyal to Target, too,” added
ways to capitalize on the relationship opporJared Blank, svp of marketing and insights at
tunity to drive loyalty,” Tarleton added.
AI-driven retail marketing firm Bluecore.
But retailers must also ofer additional
Target is also piloting a loyalty program in
experiences, or what Tarleton called “softer
the Dallas area called Target Red, which gives
features that are less transactional,” like Nor- members 1 percent back on purchases, 50 per-
73%
ADWEEK | APRIL 30, 2018
Access to VIP events, limited-edition products
and personalized offers are replacing discounts
as a way to cement customer loyalty.
cent of a first-year membership on same-day
delivery from Shipt and free next-day delivery
with Target’s Restock service.
Retailers can generate loyalty even further
with personalized experiences thanks in part
to the data they collect.
“Each time a consumer swipes their card or
enters their email, data from each touch point
aggregates into a singular profile, giving retailers
a consistent view of each customer and the ability to deliver contextualized experiences,” said
Stephanie Waters, global retail industry principal at digital software company SAP Hybris.
What’s more, Tarleton said consumers
now expect ofers, services and benefits to be
customized to their preferences.
Walmart’s Savings Catcher, for example,
is a free loyalty app of sorts that is embedded
into how consumers already engage with the
retailer, Tarleton said. To use it, shoppers
scan their receipt’s bar code, which allows
Walmart to look for advertised deals nearby.
If it finds a lower price, Walmart gives the
shopper the diference. Walmart’s built-in
features drive repeat engagement through
personalized discounts like a loyalty program
would, kind of like Kohl’s Cash, she added.
And while consumers may not necessarily
say they want personalization, they will come
to expect it once they reach a certain threshold, Tarleton said.
Sephora couples its loyalty program with
its app and online tools to give it the ability to
recognize customers online, in-store and on
mobile in a highly personalized way.
“They are using omnichannel and personalization strategies in their products and
experiences that drive long-term loyalty well
beyond what their traditional rewards program can likely accomplish,” Tarleton added.
LISA LACY IS A TECH REPORTER FOR ADWEEK,
FOCUSING ON ECOMMERCE. @LISALACY
9
VOICE
How Data Is
Building a New
Brand and Digital
Video Economy
OTT AND THE DIRECT ECONOMY ARE KEY
THEMES UNDERPINNING THIS YEAR’S MOST
INNOVATIVE CROSS-PLATFORM CONTENT.
BY RANDALL ROTHENBERG
It started for me with a new television.
When I set up my new smart TV, I
noticed that there, right next to the
traditional networks, were upstart
new publishers—sharing space on my
screen like equals. That, it struck me,
is the new consumer economy.
People now have access to
publishers, to brands and to media
directly. OTT is no longer simply
“over the top.” It is just media. Direct
to consumer isn’t a new type of
commerce, it’s just a fresh, new brand.
10
And this economy is not a trend. This
is a full-scale revolution.
What’s propelling this new
consumer economy? The cloud-based
internet. Dominant consumer-facing
companies have traditionally created
value through their ownership and
operation of high-barrier-to-entry,
capital-intensive supply chains. From
CPG to media, the most successful
companies owned or had significant
control over every major function
within their supply chain—including
experience in the new consumerdriven economy. This direct
connection between consumers and
companies is not optional either.
Today, two-thirds of consumers
expect a direct link with companies.
Consumers don’t skip these ads,
they like them (literally), share them
and even talk about them via social
channels while they watch. More than
half of all audiences watching OTT TV
discuss the brands they see on screen
with the people they are watching
with, and incredibly, ad-supported
programming is more popular than
subscription-only formats.
All these opportunities will
also be addressed at the IAB Video
Symposium, which follows the
NewFront presentations on May 7 with
proof points that show what works
and why and best practices that will
move the industry forward.
As the consumer wields more and
more power in every interaction and
video continues to grow as a driver of
revenue and ROI for both buyers and
sellers, you’ll see OTT content across
multiple screens. The sight, sound
and motion of digital—and especially
OTT—offer unparalleled opportunities
to tell brand stories.
Meanwhile, the ability to transform
that data into actionable insights
offers the modern marketer tools of
unprecedented scope and power. And
for brands that are ready to tap into this,
the opportunities are game changing.
Specs
Claim to fame
Randall Rothenberg,
CEO, Interactive Advertising
Bureau, likes to take photographs
of sharks, blennies and
nudibranchs on coral reefs with
his Olympus OM-D E-M1 camera
in a Nauticam housing.
Base New York
Twitter @r2rothenberg
APRIL 30, 2018 | ADWEEK
I L L U S T R AT I O N : G E T T Y I M A G E S / S C I E N C E P H O T O L I B R A R Y R F
OPINION
the creation of products or content
and their distribution.
The cloud has taken the ability
to manage supply and demand and
segmented it down to the individual
level. Every part of the supply chain
can currently be leased for a fraction
of the cost.
Warby Parker, Harry’s, Glossier,
Casper—just a few of the companies
that illustrate the way this new
economy operates. Now, anyone with
a good idea and a credit card can
capture the attention of audiences
directly, gleaning first-party data that
can fuel those relationships.
OTT allows all media companies to
act like these new direct brands and
talk directly with consumers. As with
direct brands, OTT delivers valuable
first-party data. Thanks to OTT,
media companies are able to offer
advertisers richer analytics, more
concrete attribution and provide a 3-D
view of a customer. It brings the TV/
premium video advertising ecosystem
closer to the long-held promise of true
addressable TV/premium video.
The growing popularity of OTT is
also radically changing the traditional
TV landscape (56 percent of U.S.
adults own IP-connected, streamingenabled TVs like mine), bringing
interactivity, data and targeting long
associated with digital media to the
big-screen TV.
By 2021, a million minutes of video
content will cross the internet every
second, representing 82 percent of
consumer internet traffic. Whether
it’s livestreaming, video on demand,
via mobile or on over-the-top (OTT)
devices, video is becoming the most
significant source of internet traffic
in the world. As a result, total digital
video ad revenue, including mobile and
desktop, rose to $5.2 billion in the first
half of 2017, up 36 percent from $3.8
billion in the same period in 2016.
The shift to a direct-brand
economy and OTT are the key themes
underpinning the best-in-class
creative you will see at this year’s
NewFronts, which run from April 30 to
May 4 in New York.
Over the course of a week, you will
see both traditional and newly minted
brands going direct to consumer.
You will see Casper and Peloton
creating TV-like ads for digital. Just
as Hulu debuted shoppable ads at
the NewFronts in 2017, watch for
more innovations this year including
six-second videos, long-form video,
sequential storytelling, picture-inpicture messages around content so
the ads and brand interactions are not
disruptive, and so much more.
The one thread that links them:
They’re all part of a great content
D ATA P O I N T S
Let’s Get Digital
HOW THE NEWFRONTS INFLUENCE ADVERTISERS’ VIDEO STRATEGY. BY SAMMY NICKALLS
When the Digital Content NewFronts launched in 2008, no one could have predicted the issues digital video would one day face, such as brand safety, misleading
political ads and conspiracy videos. However, the Interactive Advertising Bureau, which operates the NewFronts, says that hasn’t deterred advertisers—and
it has the research to support that claim. IAB found that eight out of 10 advertisers increased their original digital video (ODV) budget after attending the
NewFronts in 2017, while 87 percent agreed that advertising on original video programming is an essential part of their clients’ media buys. “This study
confirms that brands and media buyers are following audiences as they flock to digital screens to engage with innovative storytelling that harnesses sight,
sound and motion,” said Anna Bager, evp of industry initiatives, IAB. “Original digital video content is taking a vital role in the mix, with advertisers making bigger
investments in the medium year after year.”
Digital and mobile
video ads are
booming
Agency
Marketer
$
$
Digital video
Mobile video
Other digital
Other mobile
81%
$
Average dollar amount spent
(in millions)
How the 2017 NewFronts
affected advertisers
$
Digital budgets
are allocating
more to video
every year
$13.5
12
$
9
$7.4
$7.5
16
33
31
3
57%
asked for more
information.
2016
$6.6
i
$
$
$
$9.9
$7.9
increased
or changed
budget.
%
53%
20
2017
0
2016
2017
34
29
% Change
2016—2018
+71%
46%
spent more than
16
2018
55%
planned due to
the NewFronts.
21
+27%
2018
Advertisers are betting
on original video
14
37
27
59%
22
Agree completely
Agencies and marketers
are focusing on
original video
Advertising on ODV is an essential
part of my/my client's media buy.
38%
Average dollar amount spent
(in millions)
$4.3
6
49% 87%
Investment in ODV will grow and make
up a larger share of my advertising.
34%
$6.4
$3.2
$3.5
Agree somewhat
53% 86%
ODV is very effective for advertising
directly to the consumer.
$3.6
3
33%
INFOGRAPHIC: CARLOS MONTEIRO
$2.4
0
2016
2017
+83%
53%
82%
+50%
Ads that appear in ODV are more effective
than ads in other digital video content.
29%
SOURCE: IAB
ADWEEK | APRIL 30, 2018
83%
ODV is as important as TV
advertising for my media plan.
2018
30%
% Change
2016—2018
49%
51%
80%
11
FAC E T I M E
1
2
3
4
5
ADWEEK EVENTS
Adweek
Executive Lab
MAPPING THE MODERN AUDIENCE,
PRESENTED BY ALPHONSO.
BY SAMMY NICKALLS
8
On April 18 at NeueHouse Madison Square
in New York, Adweek gathered thought
leaders together to discuss addressability,
measurement and data trends. 1 Kavita
Vazirani, evp, strategic insights and analytics,
NBCUniversal. 2 Attendees ask questions. 3
(L. to r.) Ed Gaffney, director of implementation
research and marketplace analytics, GroupM
North America; Vazirani; Lauren Wiener, CEO,
Tremor Video DSP; Raghu Kodige, co-founder
and chief product officer, Alphonso; Adweek’s
Chris Ariens. 4 The Alphonso team poses for
a group shot. 5 Mastercard’s Justin Flood (l.),
manager, ad intelligence, and Jay Sears, group
head, svp, ad intelligence. 6 Ashish Chordia,
co-founder and CEO, Alphonso. 7 Attendees
network at breakfast. 8 Bryson Gordon (r.), evp,
advanced advertising, Viacom, and Adweek’s
Josh Sternberg. 9 Trilia Media’s Ryan Healey (l.)
and Jeff Cavallo. 10 Guests mingle.
9
7
12
10
APRIL 30, 2018 | ADWEEK
RAQUEL BEAUCHAMP
6
Apply
to attend
today
adweek.com/
brandweek
How Will
You Shape
the Future?
Take the
First Step.
PALM SPRINGS, CA
SEPT. 23-25, 2018
Ralph Macchio
and William
Zabka were
photographed
at World Seido
Karate in New
York City.
THREE DECADES AFTER THE ORIGINAL, RALPH MACCHIO AND WILLIAM ZABKA ARE BACK
STARRING IN YOUTUBE RED’S NEW SERIES COBRA KAI, BUT THIS IS NO KARATE KID RETREAD.
BY JASON LYNCH PHOTOGRAPHY BY AXEL DUPEUX
n the iconic 1984 film The Karate Kid,
Daniel LaRusso’s sensei, Mr. Miyagi,
tells his protégé, “man who catch fly
with chopsticks, accomplish anything.”
Well, perhaps anything except convince
Ralph Macchio, who played LaRusso
in three Karate Kid films, or William Zabka,
who portrayed his nemesis Johnny Lawrence
in two movies, to return to the franchise. “I’ve
always been very protective of this franchise
and this role. I said no for 30 years because
it was always easier to let the legacy stand as
what it was, as opposed to try to go back to the
well and fall short,” says Macchio. Or as Zabka
puts it: “There’s the danger of you tip your hat
too much in that way, and there’s no way to get
out of it. I always joke that my career’s over
the day I do a flying sidekick to a potato chip
in a headband as a commercial. That was the
thing I feared the most.”
But now, 34 years later, Macchio and Zabka
have reunited for the new series Cobra Kai, a
modern-day revival of the Karate Kid franchise, which spawned two sequels, a 1994
revamp (with Hilary Swank stepping in for
Macchio) and a 2010 reboot, starring Jackie
Chan and Jaden Smith. Yet even more surprising than their return is the platform that the
new dramedy is airing on. After interest from
I
ADWEEK | APRIL 30, 2018
streaming heavyweights like Netflix and Hulu
and linear networks like TBS about airing the
series, all 10 episodes of Cobra Kai’s first season will be streaming on YouTube Red—YouTube’s subscription video on demand (SVOD)
service—beginning Wednesday, May 2.
Cobra Kai will provide the brightest spotlight yet for YouTube Red, which launched in
fall 2015. For $10 per month, the service ofers
ad-free access to YouTube videos, YouTube
Red originals and audio platforms YouTube
Music and Google Play Music. “I want YouTube Red to be the subscription service you
can’t live without,” says Susanne Daniels,
YouTube’s global head of original content—
and she thinks Cobra Kai could be the show
that finally makes that happen.
The series premieres one day before YouTube’s annual Brandcast extravaganza on
Thursday, part of this year’s NewFronts, during which the company will attempt to put its
brand-safety issues behind it and dazzle buyers with new ad oferings centered around TV,
the living room and its original shows. Moving into original content—Cobra Kai is one of
30 new films, series and specials that Daniels’
division will release this year—is “a natural
progression” for YouTube, says Michael Venables, executive director, digital, Hearts &
Science, who noted that, much like Netflix,
the company began more as “a service provider and then evolved to be in content creation.”
Cobra Kai, which picks up three decades
after the events of the first film, finds Zabka’s
Johnny down on his luck, trying to make ends
meet as a handyman, and reminded at every
turn of his high school foe Daniel, who now
runs a successful chain of local car dealerships. A series of mishaps, some involving
their high-school-aged children, prompt
Johnny to reopen his old Cobra Kai karate
dojo, much to Daniel’s dismay.
“It’s the ultimate fan fiction: for us, it’s
what J.J. [Abrams] is doing with Star Wars,”
says Hayden Schlossberg, who serves as Cobra Kai’s creator and showrunner alongside
longtime pals Jon Hurwitz and Josh Heald.
“But it was a completely diferent thing at the
same time. By going in with the antagonist
of the original movie as our protagonist, at
least for the first episode, it was more original
while being a continuation.”
The 1984 film, in which Macchio’s Daniel
learns karate from Mr. Miyagi (the late Pat
Morita) and defeats Johnny in the Under-18
All-Valley Karate Tournament, was a touchstone for many ’80s kids, but perhaps none
more so than Hurwitz, Heald and Schloss-
15
berg. Back then, “there were no Pixar movies.
You had Back to the Future, E.T. and Karate
Kid as the first big stories you got sucked into,” says Schlossberg. And the film’s themes
about fatherhood and bullying “weren’t done
in a way that was comical and silly; they really
resonated,” adds Heald.
The co-creators, who frequently rewatch
the movie, were going through a special DVD
edition of The Karate Kid during their early
years working in Los Angeles, and were drawn
to an interview with Zabka, in which he explained that in his mind, Johnny wasn’t the
villain, but the protagonist of his own story.
“He’s so far from who I really am, so when
I approached it, I had to find the goodness in
him for it to relate to me. I couldn’t see playing just a mean guy beating someone up,” says
Zabka, who based that approach on Johnny’s
first line in the script: “I’m an ex-degenerate
… I have one year to make it work,” and last,
“You’re all right, LaRusso. Good match.” He
adds, “To me, that was the heart of Johnny. I
always saw him as a more three-dimensional
character than just the villain.”
The trio talked about making a Karate Kid
movie from that perspective, but the possibility “never felt particularly realistic,” says
Hurwitz, especially after the 2010 remake.
Years later, prompted by the recent explosion
in streaming content, “where you’re able to
examine diferent properties in a whole new
way,” says Hurwitz, the trio took another stab
at trying to get the rights, this time pursuing their idea as a series. They met with Will
Smith’s Overbrook Entertainment, which had
the Karate Kid rights and sparked to their idea.
Next, they approached Sony, which had released all five Karate Kid films. The studio had
talked over the years about potential sequels
or TV revivals, but this “was a whole new take
we hadn’t heard before. It was something we
couldn’t pass up,” says Jef Frost, president,
Sony Pictures Television, who insists there
was no corporate mandate to revive the franchise. “It was the creative that drove this.”
All that was left was convincing the actors
to finally say yes, after decades of noes. Heald
knew Zabka, having written a cameo for him
in the 2010 film Hot Tub Time Machine, while
Hurwitz and Schlossberg had previously talked with the actor about doing a cameo in one
of their Harold and Kumar movies. “I had no
idea it would be this, not in a million years,”
says Zabka of the “instantly enticing” pitch
over lunch. “I walked away from this restaurant shell-shocked, almost like a girlfriend
came back and said, ‘I want to give it another
go.’” He was also thrilled by the opportunity
to challenge himself as an actor and portray
new sides to Johnny. “I made that clear: I
don’t want to double down on being the biggest jerk of all time,” he says.
Macchio, who unlike Zabka had no prior
relationship with the trio, was also won over
16
‘I said no for 30 years
because it was always
easier to let the legacy
stand as what it was.’
—Ralph Macchio
during a four-hour meeting by their passion
for the first film—“The Karate Kid is Star
Wars to them, and they treat it as such,” says
the actor—and their “fresh angle” on the
story that would resonate with present-day
audiences. “They pitched the pilot, first season and beyond,” says Macchio. “I had a zillion questions, but I also felt that the timing
and the platforms we have now that we didn’t
have 10 years ago lent itself to this feeling to
me, like now is the time.”
Both actors, who were also onboard as coexecutive producers, were on hand as the show
was pitched to a variety of outlets, including
Amazon, Netflix, Hulu and TBS. But in the
end, the most enthusiastic publisher turned
out to be, like Daniel in the first film, a scrappy
underdog: YouTube Red. “They could not have
expressed more excitement and enthusiasm,”
says Frost. “We felt this was a home that was re-
ally going to build its platform around this project. And it didn’t hurt that they were willing to
pick it up straight to series on the pitch as well.”
Adds Hurwitz: “They talked about our show being their House of Cards—the kind of show that
will show the rest of the town, and viewers, the
types of things they could do. There was something really exciting about that to us: to have
our show be a big fish in a small pond—and the
small pond happens to be Google.”
YouTube’s Daniels, a longtime Karate
Kid fan, was immediately all-in. “There was
nothing I was worried about,” she says of the
pitch—and saw Cobra Kai as the perfect opportunity to help expand YouTube Red beyond its initial slate of content that starred
established YouTube stars (“that allowed us
to fish where the fish were”) and broaden the
service’s core demo from 18-34 (“the heavy
users of YouTube”) to 18-49. While she is
continuing to make programs featuring YouTube stars like Liza Koshy and Jenn McAllister (jennxpenn), Daniels is increasingly
gravitating toward series with established IP
(intellectual property) that resonates with
YouTube’s broader base, like the drama series Step Up: High Water (based on the movie
franchise), which debuted in January, and
now Cobra Kai.
While Daniels isn’t revealing YouTube
Red subscriber numbers yet (but “we are
growing significantly,” she insists), she is also
cultivating ad-supported original program-
APRIL 30, 2018 | ADWEEK
C O V E R F E AT U R E
ming (AVOD) outside of the YouTube Red
paywall. Those programs always have a “prosocial” message, she says, like the Kevin Hart
fitness series What the Fit. YouTube Red’s
programming, meanwhile, has an “edgier,
anything-goes” feel.
However, in the coming year, YouTube
will experiment more with the windows on
its AVOD and SVOD originals. “It’s a unique
marketing opportunity: We have billions of
unique viewers on the AVOD platform. Exposing episodes to them and then moving them
behind the paywall is something we’ll be trying a bit more of this year,” says Daniels, who
will ofer two Cobra Kai episodes for free in an
efort to hook YouTube visitors—the site has
more than 1.5 billion monthly logged-in YouTube viewers—and convince them to join Red
to watch the remaining eight episodes.
Buyers, starved for more ad-supported
premium video opportunities, say they would
love to get a crack at YouTube Red shows like
Cobra Kai. “This is the type of premium content that has mass appeal, and could be a fit for
Katy Perry
performed
at YouTube’s
Brandcast
last year.
P E R R Y: TAY L O R H I L L / F I L M M A G I C F O R Y O U T U B E
YouTube’s NewFronts
Shift From Mobile to TV
YouTube’s biggest challenge used to be
delivering compelling content to mobile
screens. But while mobile still represents 60
percent of YouTube’s overall watch time, the
focus of Thursday’s NewFronts event—which
the company calls Brandcast—will shift to
“the second biggest revolution that online
video has ever gone through: the TV screen
and the living room. The TV screen has been
our fastest-growing screen for some time
now,” says Tara Walpert Levy, vp of agency
solutions, Google and YouTube.
With more than 150 million hours of
YouTube content each day now streamed
on TVs, television is now “a core part of the
overall effort” for YouTube, says Walpert Levy,
with the company announcing a pair of new
TV-focused offerings for buyers this week
ahead of Thursday’s Brandcast.
YouTube is bringing its YouTube TV live
TV streaming service into the upfront for the
ADWEEK | APRIL 30, 2018
KARATE LESSONS 1984’s hit The Karate Kid spawned
two sequels, a 1994 revamp and a 2010 reboot. In Cobra
Kai, William Zabka’s Johnny reopens his infamous dojo.
first time, partnering with networks to offer
their YouTube TV inventory as part of Google
Preferred (the company’s premium advertising
program that allows brands to only run ads
against the most popular 5 percent of content),
across all platforms. “This is the first time
you’re going to be able to buy, in the upfront,
traditional TV networks and the full YouTube
content offering in one place,” says Walpert
Levy. “This is one of the biggest pushes we’ve
heard from advertisers.”
Additionally, YouTube will roll out a new
type of device targeting in its ad-serving
platforms AdWords and DoubleClick that
will enable brands to reach audiences who
are specifically watching on connected TV
devices (this will be in addition to the desktop,
mobile and tablet targeting that already exists
for buyers). Walpert Levy notes that this
offering—which is also available outside of the
upfront and across all YouTube ad buys (not
just Google Preferred)—gives brands flexibility
to tailor their spots for TV. They could opt to
use close-ups differently, or run longer spots
compared to mobile.
The company hopes its new offerings will
help assuage buyers’ ongoing concerns about
brand safety on the platform. In January,
it announced several changes to address
brand safety fears—among them, YouTube is
manually screening each individual video on its
Google Preferred channels, and has created a
three-tiered system for brand safety that gives
marketers more transparency into where their
ads appear. The response has been “incredibly
encouraging,” says Walpert Levy. “It has given
a lot of comfort to our advertisers.” —J.L.
a number of target audiences,” says Venables.
But Daniels said that YouTube’s original films
are more likely to be a part of her AVOD experiment than its series, as was the case with
last year’s Demi Lovato documentary Simply
Complicated, which was sponsored by Ulta
Beauty, before later moving to YouTube Red.
As it mounts its biggest marketing campaign for a YouTube Original, the company
is drawing heavily on data gleaned from its
own platform, teasers that play up Karate
Kid nostalgia and digital activations around
Cobra Kai’s launch “that leverage what we
know about what works in terms of virality
on YouTube,” says Angela Courtin, global
head of YouTube TV and originals marketing. She also leveraged the show’s theatrical roots with two big events last week: The
series premiered at New York’s Tribeca
Film Festival, and YouTube partnered with
Fathom Events to screen The Karate Kid
and the first two Cobra Kai episodes in more
than 600 movie theaters. “When you’re connecting serialized content back to a feature-
‘I want YouTube Red
to be the subscription
service you can’t live
without.’ — Susanne Daniels,
global head of original content, YouTube
length IP, there’s a way to bring those two
worlds together,” says Courtin.
Daniels says Cobra Kai tracking has been
“really strong” ahead of Wednesday’s premiere—“we have a really good feeling about
this”—and she will “absolutely” order a second season quickly if the response to the series matches its prelaunch excitement.
If and when the renewal comes, the creators say they’ll be ready, having ended
Season 1 with a surprise twist that “was in
our original pitch,” says Heald. “We always
knew the season was going to end where it
does, and we’ve always had an idea of where
it’s going after that. We weren’t just jumping
off into the great unknown.”
One eagerly anticipated moment that is
still in their back pocket for now: a DanielJohnny rematch. “Everyone’s asking, ‘When
are they going to fight?’ Which we call the
Ross and Rachel of our show,” says Macchio,
referring to the on-again, of-again Friends
couple. “You’ve got to keep that out there,
but you can’t have them fight too soon. Or it
might be a short series!”
17
VIDEO ROUNDTABLE
THE PRODUCERS
ADWEEK’S ANNUAL NEWFRONTS PANEL COVERS PLATFORM
PROLIFERATION AND BRAND SAFETY. BY JAMES COOPER
W
R O U N D TA B L E : R A Q U E L B E A U C H A M P
ith video blazing new audience and brand engagement, the 2018 NewFronts
should be an important
pivot point for producers
and platforms as well as
marketers getting more comfortable using
video as a branding tool.
That will include direct-to-consumer
brands eager to spin first-party data into nextgeneration marketing including video in all
its forms, ranging from 6-second ads to long
form as well as ad-supported OTT and social
video. Adweek was pleased to once again
host our annual NewFronts roundtable in
partnership with the Interactive Advertising
Bureau (IAB) at our headquarters in New
York. Six industry execs who live and breathe
in the burgeoning digital video market, along
with moderator Anna Bager, evp of industry
initiatives at the IAB, held an engaging and
animated hour-long conversation on key
forces shaping their respective platforms,
content production and businesses.
At the fore of the discussion was the
importance of listening to audiences’ needs
across the myriad platforms—traditional,
mobile and social—to create better-quality
content and more efective branded eforts
for clients, many of whom are still huddled in
experimental mode.
And that’s largely because of brand safety
concerns in this millennial-driven ecosystem
with new rules and light-speed cycles of fame
and fade. Facing those concerns, the panelists discussed new processes and relationship
mandates that they hope will calm CMO worries that his or her video output will be seen
by the right audience in an appropriate environment for messaging. Here are their words.
ANNA BAGER (IAB): I want to start with
those of you that are new to the NewFronts
this year. That would be ESPN, Viacom and
Meredith. Why did you decide to get involved
and what are you most excited about this year?
We can start with Viacom.
KELLY DAY (Viacom): So this is the first
year that Viacom in a long time has really
heavily invested in digital content, in particular Viacom Digital Studios just launched four
months ago. So it’s a relatively new venture
and we were really excited to have the opportunity to tell the story about what we’re doing
and to reach a wide audience in a very cohesive
way and be able to talk about everything that’s
going on. We’ve got a lot of new shows coming
up, and with the acquisitions of VidCon and
WhoSay, we feel like there’s a great story to tell.
STAN PAVLOVSKY (Meredith): As you
mentioned, we’re sort of new to this event. Our
colleagues at Time Inc. have been committed
to NewFronts for the past five years and we’re
bringing a couple of iconic companies together
so that we feel this is a pretty good opportu-
ADWEEK | APRIL 30, 2018
nity to tell the story of the new Meredith and
our capabilities and our scale in video.
TRAVIS HOWE (ESPN): I think for ESPN
we think that it’s an important time for us to
participate to actually help set some strategy around what we see the future of sports
to be, in addition to livestreaming, which we
think is going to be a critical part of the digital ecosystem, but also ways in which you can
tell stories around the game and storytelling
about the game, whether it’s original content
or breaking news and highlights. And so we
think that this time of year is right for us
given where sports sits and the conversation
around engaging audiences and the role that
we see in setting that strategy.
BAGER: How about from founding partners YouTube and Google as well as veterans
Twitter and Studio71?
TARA WALPERT LEVY (Google): When
we first put it together that it was just an
incredibly important moment for people
to understand the trends in terms of how
consumers are behaving and engaging with
‘Direct-toconsumer
brands are
coming to I think
all of us looking
how they can
get closer to
the audience.’
TRAVIS HOWE
video and TV in a broader sense. And it’s
awesome for us to see how it’s gone from like
six partners back in the day to dozens. That
reflects the vision that people are consuming
content in fundamentally new ways. And I
think the fact that you also have some traditional players at the table speaks to the fact
that Nielsen says it’s very difficult to reach
half the country via traditional TV.
MATT DERELLA (Twitter): For Twitter it
came from us hearing from our customers who
asked us to participate to show what we were
doing with news, sports and entertainment. So
we did and were able, I think, to present some-
thing that’s diferent than taking television
and putting it on a mobile device, for example.
We’re really trying to work with our partners
to reimagine sports, news and entertainment
for our mobile-first audience.
REZA IZAD (Studio71): So yes, the NewFronts have always been a great stage to do
announcements around big content partnerships. But with all the brand safety and adjacency conversations, we’re seeing a lot of
demand from the holding companies to do real
commitments. We think going forward it’s going to be more important because there’s going
to be a lot more scarcity around adjacency.
BAGER: In a world of so many shows, networks and platforms, what are your best practices for marketing new content?
DERELLA: The secret ingredient Twitter has is the conversations happening on
Twitter. It is happening there first and that
becomes the most powerful way for us to actually program. In addition, it really helps
if you have incredible engineers working on
products that are driving discoverability. So
one of the things that we’ll be talking about at
the NewFronts is some of the enhancements
that we’re bringing to the service that’s really
going to allow content to be surfaced to our
audiences in a way that’s really timely and relevant and will help connect people with what
they’re most passionate about.
IZAD: One thing you have to figure out if
you’re a content producer is the algorithms
that everyone’s putting into place. It has become really important in understanding how
you optimize your content in those feeds.
Whether it’s on Netflix, which has a whole set
of tools that recommend content, and YouTube and Instagram, Twitter and so on. It’s really changing how you’re producing and what
you’re producing so that you’re really meeting
the demands of those platforms.
WALPERT LEVY: We’re really looking platform by platform and then taking it a step further and saying OK, who are the talents or the
celebrities that dominate those platforms and
how do we develop shows in conjunction with
them? So with YouTube obviously it’s partnering with YouTubers and really looking at them
as creative partners and thinking about how
we develop projects in conjunction with them.
DAY: So when we green lit Cobra Kai (see
cover story on page 14), it was because we’d seen
over a billion views of Karate Kid clips on YouTube, and that makes it easier when you then
go to market to have that built-in audience.
IZAD: All the marketing in the world is not
going to overcome programming that misses
the mark. So content is key.
HOWE: For us, we have to get really good
at predictive modeling around where we think
the best games are going to be, how do we highlight those games and where we make those
games available. But I also think the second
part of our content strategy is telling the sto-
19
V I D E O R O U N D TA B L E
‘Being able to quickly react and
shift is critical as you’re working
with clients to optimize.’ STAN PAVLOVSKY
ry around the game. So much of what we also
do is about the breaking news; it’s also about
the original series, it’s about creating fandom
around their favorite team, their favorite player, their favorite league. And so for us a lot of it
has to do with watching user behavior and actually doing listening per platform.
BAGER: How do you balance the super fan
niche content with more broad-based content
distributed at the traditional notion of scale?
HOWE: We have learned something very
interesting in looking at our partnerships with
some of our social partners. We have realized
that 85 percent of our audience skew under the
age of 35 or under the age of 25. So that’s a very
diferent programming approach to SportsCenter, for example, than we would have historically
taken. They don’t necessarily want to watch the
SportsCenter that we have on our network, so it’s
required for the vernacular or the tone and even
the structure of that programming to live in an
individual outlet like Snapchat, for example.
PAVLOVSKY: We’re pretty passionate
about this topic and we debate it a lot. I think a
lot of the innovation actually happens in niche
programming—something for a particular audience that’s interested in, for example, pets,
like our Paws & Claws series on PeopleTV.
When you bring in those audiences that are
extremely passionate, I think you have a real
opportunity to then expose them to much
broader programming and to diferentiate
what your brand stands for.
WALPERT LEVY: One thing that has been
interesting is that the living room is actually
the fastest-growing platform for YouTube.
And one of the things that surprised us as we
looked at the viewing patterns between television and mobile and desktop, the distinction
is not as big as you would think. So we do see
much longer session times in many cases on
the television, but often they’re going in and
out from short form to long form and back. And
similarly we see a significant number of consumers will watch long form on mobile. I think
it really helps us see that convergence not just
between traditional TV and online video, but
across device types in a way that I don’t know
that people expect. And it just goes back to this
theme that the consumer is driving the bus.
DERELLA: For example, we see that the
conversation on Twitter around Game of
20
Thrones just explodes after episodes. And
that’s something that marketers really want to
be attached to. They want to be around things
that are big and popular and happening in culture. I think that’s a big opportunity that’s on
CMOs’ minds. How do I better understand this
trend toward non-ad-supported, high-quality
video and how do I also connect with those users and those people that are watching it?
JAMES COOPER: What are brand marketers underestimating about the video space and
its evolution in the next 18 months?
‘So if we all
thought it was
hard to get
people to watch
a 30-second ad,
try getting an
18-year-old to
stop scrolling
Snapchat.’
KELLY DAY
WALPERT LEVY: Clients are still wrestling with how to define quality. Historically
there’s been a very traditional, very ecosystemdriven definition of what quality looks like and
it’s very high production and it’s typically long
form. And we don’t see consumers making
those same choices. What’s going to continue to
be an important translation point over the next
18 months is really recognizing how you balance the environment that you feel safe in as a
brand with what consumers are saying they’re
passionate about and are paying attention to.
IZAD: It’s surprising how many agencies we
go into and ask, have you heard of Rhett and
Link who’ve been on the platform for 10-plus
years, and many people don’t even know who
they are. That’s one of the biggest challenges:
How do you cut through the clutter? Because
there’s actually a ton of really well-produced
content on the platform and it’s not just a bunch
of kids on skateboards or whatever those old
adages are. It’s the audience that isn’t watching
TV. It’s the audience that everyone talks about
but no one seems to understand where they fit
into the cultural landscape.
WALPERT LEVY: I’d actually push back on
that a tiny bit. I think it’s one of the areas where
clients and agencies are making huge strides.
IZAD: They definitely have, but it’s surprising given the investment they’re making how
little they know about what they’re seeing.
That’s been our perspective, and we go out and
sell individual channels and it’s surprising how
much work we have to do to create that market
for these creators.
BAGER: How do you leverage your data,
your specific audiences and really the connection you have with them to create better content as well as branded content?
HOWE: Talking about direct to consumer,
brands are coming to I think all of us looking
to how they can get closest to the audience. I
think for us particularly, sports can be very
emotional. It’s one of the only pieces of content
where you can see grown adults cry whether or
not their team won or lost. Sometimes it’s hard
to determine who they’re crying for, but sports
can have a very emotional response. And I
think for us we’ve had to use that information
to the best of the advantage of the marketer.
PAVLOVSKY: For branded content to be
successful it requires a really good understanding of the audience. So through data and
insights we have had a lot of success with clients in starting the conversation and having
multiyear relationships. But what happens
during the creative process is you’re trying
to provide those insights around this custom
content and then you have a negotiation process with the client to make sure that they’re
happy. It’s bridging that gap between what
we think will resonate with consumers and
the perception that the client has around the
content and the message that they want to tell
about their brand. So having that data and being able to quickly react and shift is critical as
you’re working with clients to optimize.
COOPER: What’s your take on ad length
and the proper balance?
DAY: So if we all thought it was hard to get
people to watch a 30-second commercial, try
getting an 18-year-old to stop scrolling Snapchat. These are really hard environments and
very noisy environments to get consumers to
stop and pay attention, whether it’s to your
advertisement or a show. We acquired WhoSay earlier this year because we believe that
having solutions for advertisers that involve
APRIL 30, 2018 | ADWEEK
V I D E O R O U N D TA B L E
everything from creating short-form spots to
longer-form programming to in-store shopper
activations is the way that advertising is going,
and that we need to be a solutions-driven organization and to create all diferent types of
experiences that are going to help people stop
scrolling and pay attention to your message.
COOPER: What’s the most important thing
you need to be doing now to make sure that
your video capability will be important and
relevant in the next two years?
DAY: I think for publishers across the board
we all have to be incredibly agile and flexible
and responsive in how and what we’re producing. We all have to be really good at understanding how consumers navigate these platforms;
they’re on everything. If you watch the way
young people interact with their phones, they
just go through these platforms at the speed of
light. So over time as distribution becomes increasingly social, increasingly mobile, there’s
basic blocking and tackling skills about knowing who the talent is, what the audience does
and how to create content in these environments. You just have to be ready for anything.
HOWE: It’s about continuing to aggregate
the ecosystem that works today and looking at
how you’re bringing in new platforms, whether
for a moment or for a longer period of time in
figuring out what that new platform means to
your existing viewing ecosystem and then figuring out how you program accordingly based
of of the viewing habits. And I think that that’s
where data and technology play an interesting
role in addition to the storytelling that happens on that individual platform.
IZAD: So as I look across the room, whether
it’s Viacom or ESPN or Meredith and Time,
we’ve been working really closely for years and
we look at our role in this digital landscape as
a bridge, not an island. As a chance for us to
bring the best of what we have, to bring new
reach to these platforms, these content creators that make sense in our platform. It’s really important that we continue to nurture and
build those partnerships even deeper, building
of the foundation of the last five years. I think
that really sets us up for a real balance in the
marketplace where there’s a lot more choice for
advertisers and consumers.
BAGER: Obviously a huge issue in the ecosystem is brand safety. Where are we now in its
evolution and what will drive important gains?
PAVLOVSKY: I think it would be great for
the ANA and the 4A’s and the IAB, et cetera, to
come up with some guidelines that media buyers can work with. There are a lot of diferent
components to brand safety, and we haven’t
even talked about data and data privacy. So I
think we’re quite a bit away from having consistency in terms of a way to measure. Plus there’s
so many diferent formats and we talked about
diferent lengths and diferent contexts. But
we definitely welcome more standardization
and we’ll build around it.
DERELLA: We just try to simplify it. For
Standing, from left, the 2018 Adweek NewFronts roundtable moderator Anna
Bager, evp of industry initiatives, IAB; Travis Howe, svp of platform strategy
and global operations, ESPN; Stan Pavlovsky, president of digital, Meredith;
and Tara Walpert Levy, vp of agency and media solutions, Google. Seated, from
left: Reza Izad, CEO, Studio71; Matt Derella, global vp of revenue and content
partnerships, Twitter; and Kelly Day, president of Viacom Digital Studios.
ADWEEK | APRIL 30, 2018
‘One thing
that has been
interesting is that
the living room
is actually the
fastest-growing
platform for
YouTube.’
TARA WALPERT LEVY
marketers, if you want to be in control, we have
a solution that allows you to pick specifically
the content you want to run adjacent to. Some
want more than others, and for us we just put
that control in their hands so they can decide
rather than us trying to arbitrate what is premium or what is safe.
DAY: Viacom has always had a very strong
position about brand safety because we operate in a kids brand. It is obviously a very
sensitive issue for us and one that we take
our role in quite seriously. I think that the
simplest way that we have solved for it barring larger sort of macro changes is that we
generally control our sales rates. So we like to
be able to promise to advertisers that if you
know that you buy from Viacom, we’re only
going to run your ads in a brand safe.
WALPERT LEVY: I think this is such a
critically important topic, and frankly the new
explosion of content models and consumer attention is going to mean we’re going to have
to pay attention to getting to a new normal
for a long time. I will say, though, we clearly
learned a lot the hard way along with many of
our partners for which I think we apologized
many times and will again. But I think the
good news is that from that learning we announced a whole slew of brand safety initiatives at the beginning of this year that we’ve
gotten tremendous feedback on from our clients. One of the fan favorites is that there will
not be an ad that runs against the Google Preferred lineup at the upfront that is not vetted
by a human. And there are other things that
surround third-party verification and better
algorithm signals. I think that continues to be
a decent amount of work for our agencies and
our brands. So I think we’re getting easier; I
don’t know that we’re close to easy just yet.
21
Pers
tive
ON THE ORIGINS OF BR ANDS AND THE PEOPLE WHO BUILD THEM
THE LOCATION
The game is set in
Vinewood within the
city of Los Santos—
both fictional places.
But it’s obvious that
this sun-baked,
concrete wasteland
is Los Angeles.
THE RIDE
Apart from a
staggering collection
of weapons, GTA5
gives players a
choice of 464
vehicles to drive,
crash, race and, of
course, steal.
THE PLAYER
Grand Theft Auto
«
WHY THE MOST CONTROVERSIAL VIDEO GAME
FRANCHISE EVER CREATED IS A TOUR DE
FORCE OF MURDER, MAYHEM—AND MARKETING.
BY ROBERT KLARA
According to data
from Steam, GTA5
averaged more than
44,000 players in the
last 30 days alone—
and that’s just those
who are playing via
one online platform.
P R E V I O U S PAG E : R AQ U E L B E AU C H A M P
On March 8, President Trump convened a closed-door
roundtable at the White House. The meeting was a
response to the shootings at Marjory Stoneman Douglas
High School in Parkland, Fla., and no members of the
press were admitted. An outsider might assume the
meeting was for congressmen or law enforcement.
But it wasn’t. Seated around the table were executives
from the top video game companies—including Strauss
Zelnick, CEO of Rockstar Games.
Zelnick made no public statement about the meeting,
but the critical proceedings must have seemed familiar
to him, considering that the executive was pulled into a
similar session in 2012 during the Obama administration.
There is perhaps no whipping boy more popular with
critics of violent video games (who remain convinced,
despite a wholesale lack of evidence, that the games
engender real-life violence) than Rockstar, which
produces Grand Theft Auto.
The franchise—which is famed for its misogyny,
ferocity, bloodshed and all-around feloniousness—serves
as proof of how profitable those themes can be. As of Q4
2017, Grand Theft Auto V (the latest in the 11-game run)
has shipped more than 90 million copies, while the series
itself has moved north of 250 million. As Britain’s Daily
Mail wrote in 2013: “If the Devil had to invent a game, it
would be this one.”
GTA has earned one further distinction: The game is a
textbook case of how infl ammatory marketing can create
a legendary brand.
The story began 21 years ago, when a tiny Scottish
developer called DMA Design Limited released a carstealing game that developer David Jones originally
called Race-n-Chase. The first two versions (2-D
overhead-view games) were respectable sellers, but not
blockbusters.
Everything changed in 2001. The former DMA,
renamed as Rockstar, switched the game’s format to a
shooter perspective, allowing players to walk and drive
around in a 3-D world (a “sandbox” in gamer parlance)
stealing cars, shooting it out with cartels and generally
behaving with complete moral bankruptcy. It was a
template magnified into the scarred cityscapes of GTA’s
fifth edition, which goes so far as to let players kill
prostitutes and waterboard a man strapped to a chair.
Unsurprisingly, these elements have enraged
everyone from legislators to parents groups, and you’d
be forgiven for overlooking how GTA revolutionized its
industry in a technical sense, pioneering everything
from licensed music (ZZ Top, Van Halen) to celebrity
voiceovers (Dennis Hopper, Samuel L. Jackson).
Like it or not, GTA also proved that old saw about
there being no such thing as bad publicity. Early on,
publisher BMG Interactive decided to hire Max Clifford, a
notorious publicist. He planted stories about the game’s
violence designed to infuriate politicians, who duly
denounced the title, leading to more press. As GTA cocreators Jones and Mike Dailly told the Sunday Times,
Clifford “designed all the outcry.”
That basic construct has worked ever since. By
continuously pushing the envelope and seeing no need
to apologize for what it is, GTA has done for video games
what the parental advisory label on explicit content did
for record albums: If you want to sell a lot of something,
tell people it’s evil and that they shouldn’t have it.
“They know how to be over-the-top violent—and they
have fun with it, which I think is why people are attracted
to it,” said game designer Dustin Hansen, author of the
video-game history book Game On! “They understand
shock and awe. They intentionally put controversial stuff
in there so people will find it. That does grab new users.”
Bad news for the White House, no doubt.
ADWEEK | APRIL 30, 2018
BEFORE
Fast
Facts
2013 GTA5
debuts.
$270m Cost to
make the game
$800m Made in
first 24 hours of
its release
AFTER
Game changer The original GTA was a 2-D game with an overhead perspective (top). But GTA3 was
watershed, with a 3-D player perspective (above) and “sandbox” play. GTA was the vision of Scottish
developer David Jones (inset, top), but it took the refinements of producer Sam Houser (inset, bottom)
for the game to hit the big time. While the franchise has run through 11 different games, its signature
cartoon aesthetic (below, left) remains instantly recognizable, as do characters like repo man Franklin
Clinton (below, right) who made his debut in the latest game.
Man overboard Even some
hard-core fans of GTA thought
Rockstar went too far with the
torture sequence in its fifth version.
Not only is the scene graphic (the
man strapped to the chair bleeds,
screams and begs for mercy), but
the player is required to actively
participate in the torturing. And
that’s not water you’re pouring over
the man’s face—it’s gasoline.
23
TA L E N T P O O L
Curriculum Vitae
CEO, Hulu
2017-present
President and COO, Fox
Networks Group
2013-2017
Co-president and co-COO,
Fox Sports Media Group
1997-2013
How He
Got the Gig
As former CEO Mike
Hopkins departed after four
years to become chairman
of Sony Pictures Television,
the Hulu board—which
Freer had been a part of
since 2013—“decided that
the best thing for us was to
have somebody be the new
CEO who is a known entity
and knows a little bit about
the business,” he said. They
approached Freer, who
said it was “a really easy
decision for me to make.”
90-Day Plan
Randy Freer
HOW HULU’S NEW CEO IS CAPITALIZING ON THE
HANDMAID’S TALE’S MOMENTUM DURING HIS FIRST
NEWFRONTS THIS WEEK. BY JASON LYNCH
When The Handmaid’s Tale
premiered one year ago,
the Elisabeth Moss drama
changed Hulu forever. “That
show’s success created
awareness for Hulu that
wasn’t there in the creative
community and within the
general population, and [it]
started a chain of events that
helped move the momentum
forward,” said Randy Freer.
Since he took over as CEO
in October, it’s been his job
to captain the streaming
service’s evolution and prove
that the Emmy-winning
Handmaid’s (Season 2
premiered last week) was
no fluke.
It’s a challenge that
Freer—who will oversee his
first Hulu NewFronts event
on Wednesday—was eager
24
to take on after spending
four years “in more of a staff
role” as president and COO
of Fox Networks Group.
“Where I was probably
happiest and had the biggest
impact [in my career] is
when we were building
and scaling the regional
sports network business,
and ultimately Fox Sports
as a larger business,” he
recalled of his earlier days
as co-president and co-COO,
Fox Sports Media Group. “I
had that itch to get back into
really owning something and
being able to, with talented
people, hopefully grow it
and put a stamp on it.”
So Freer has been
working to fortify Hulu’s
technology platforms,
especially for its year-old
live TV offering, which is
“more challenging” than
the traditional on-demand
service: “You have to be
great at it. There’s not a big
margin for error.”
He is also overseeing
deals, like an expanded
partnership with Spotify,
which adds a Hulu
subscription to its Spotify
Premium package, to
expand Hulu’s subscriber
base beyond the 17 million
U.S. participants for its
SVOD and live TV offerings.
In the white-hot OTT
space, “there’s a window
of opportunity with some
length to it—I’m not sure if
it’s 24 months or five years—
to acquire subscribers,”
Freer said. “You have to have
a diversity of distribution
opportunities.”
And as Hulu shells out
big bucks to outbid rivals
like Netflix for high-profile
new projects from George
Clooney, Reese Witherspoon
and Kerry Washington,
Freer is channeling his
Fox Sports days, where he
negotiated ever-escalating
sports rights deals. “When
we started doing deals, they
were probably $30 million.
By the end, they were
$3 billion and going up,”
Freer said. “So it gave me
a little intestinal fortitude
for the time we’re in right
now, where entertainment
programming is escalating
at a pace that we hadn’t
seen before. But I’m hoping
it won’t go to $3 billion
for a show!”
When entering a new
company, as Freer did
last fall, “even if you have
an agenda or think you
know what needs to be
done, the first thing to do
is listen and get to know
people and what’s working
in the business, what the
obstacles are and where
you can create more
momentum,” he said. “One
of the things I try to do
every day is spend time in
the places you can make
the biggest impact.”
NewFronts
Preview
For his first NewFronts
as CEO on Wednesday
morning, Freer will focus
on “the whole Hulu
product and business”
and not just the company’s
splashy content. From
the service’s lower ad
loads to targetability
offerings to providing a
safe environment for
brands, “there’s a huge
opportunity for us to lead
the industry,” he said.
S A M I D R A S I N / WA LT E R S C H U P F E R M A N A G E M E N T
CEO, HULU
PORTRAIT
Specs
Who Adam Gorode, cofounder and CEO, and Katie
Witkin, co-founder and COO
What Culture marketing shop
Where Brooklyn, N.Y.
1 AGW produced Art the
Throne, an immersive
experience for Season 6 of
HBO’s Game of Thrones.
2 The shop created the ’47
Redesign program and certain
digital communications for
the sport lifestyle brand.
3 AGW handles all brand
communications for Vinyl Me,
distributor of this Gorillaz
“Demon Days” record.
1
2
AGENCY
Not Your Average Shop
AGW APPROACHES EVERYTHING WITH AN UNCONVENTIONALYET-AUTHENTIC EYE—AND THAT’S WHAT BRANDS LOVE
ABOUT IT. BY LINDSAY RITTENHOUSE
ADWEEK | APRIL 30, 2018
3
AGW: GRIFFIN LIPSON
At AGW, authenticity is revered. “The success of our agency rests purely on our culture,”
explained CEO Adam Gorode, who co-founded the Brooklyn culture marketing shop five years
ago. “We’ve benefitted by having a band of outsiders approach this industry. Our media buyers are
not media buyers by trade; our advertisers are not advertisers by trade. … I’m not caught up in the
way things should be.” Nothing about AGW is conventional, and that’s the approach it takes when
helping brands like HBO, MTV, TBS and Vogue authentically engage what it calls “cultural passion
points.” Using his music background as a concert promoter for Kanye West and Snoop Dogg, Gorode
was able to pair MTV with popular indie artist St. Lucia through a digital activation that connected
the mainstream giant to a notoriously hard-to-reach millennial audience. Gorode co-founded AGW
alongside COO Katie Witkin because he felt he never truly fit in at other agencies. “I wasn’t the easiest
employee, and I think it was because I was very vocal,” he admitted, explaining that he was constantly
shut down, which made his work “sufer.” At AGW, employees are free to speak their minds and try,
well, pretty much anything. “Just because I’m the CEO doesn’t mean I always have the right ideas,”
he said. “If you’re challenging people, it means you care.”
25
LOOK BACK
2010
The top 25 submissions to the YouTube
Play: A Biennial of Creative Video exhibit
were projected onto the interior of the
Guggenheim Museum in New York.
The video-sharing site will hold its
NewFronts event on May 3.
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26
APRIL 30, 2018 | ADWEEK
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