DIGITAL MEDIA DIGEST: MAY ‘16
A monthly look at the world of digital from NORTH’s point of view
Hulu Announces Live TV Option
By Caroline Desmond, Director of Media Strategy
Earlier this month, Hulu made an announcement that is a really big deal not just for cord cutters, but for pay-TV subscribers and the advertisers eager to reach them. According to reports, Hulu plans to rollout a live TV option launching in the first quarter of 2017 which would allow subscribers to pay $40 a month to receive access to live streams of popular cable and broadcast TV programming.
Where others like Apple have failed, Hulu has succeeded in brokering deals with the major networks. What has certainly helped is that Hulu is co-owned by Fox, Disney and NBCUniversal. According to the Wall Street Journal, Fox and Disney are reportedly close to closing deals to offer their channels through the new Hulu service, which would give subscribers access to ABC, the Disney Channel and ESPN as well as Fox News and national and regional sports channels.
Similar “skinny TV” bundles exist. For example Sony’s PlayStation Vue service offers live and pre-recorded programming via packages that start as low as $30 per month. Similarly, Dish’s $20-per-month Sling TV offers a mix of on-demand and live content. Audience size varies. Whereas PlayStation Vue comes with a large potential audience of 20 million PS4 owners, Goldman Sachs predicts Sling TV might only reach 2 million subscribers by the end of this year. Hulu currently sits somewhere in the middle with 12 million current subscribers, and Hulu is positioned to achieve the fastest growth through a continued investment in original programming and flexible subscriber options. Almost certainly, Hulu is using this latest announcement to reach an audience of live TV viewers that goes beyond their typical young adult cord cutter.
Don’t get me wrong. Cord cutters are still a significant and fast growing audience. In fact, 1 in 7 Americans have canceled their cable or satellite subscription according to a Pew Research Center survey conducted last December. eMarketer suggests that we’ll continue to see the rate of cord cutting grow to a point where just under a third (or just below 100 million) Americans will continue to subscribe to cable or satellite television by the end of this year. In yet, as Pew reports, there is still a strong contingency of US adults who do continue to pay for a cable or satellite subscription.
This announcement also comes at a time when consumers increasingly expect personalized experiences. Similar to Hulu’s current user experience, subscribers to the new hybrid package would receive personalized programming recommendations based on previously viewed shows. In addition, commercials would be more tailored to the viewer. For example, a new home buyer might see ads related to home insurance or new home furnishings. The value this offers advertisers to run TV quality ads in a more targeted, cost efficient fashion should in turn attract more funding to Hulu further allowing the company to invest in quality programming.
The biggest challenge all streaming TV providers will face is broadband connection speeds. Last fall cloud services provider Akamai reported that only 21% of US homes have Internet speeds of 15 Mbps or higher. Generally speaking, it’s not until you get into the 15–20 Mbps range through a wired connection to your router that the picture really starts to look good on streaming platforms, so for adoption to really take off, more households will need to make the switch to higher connection speeds either through an investment in stronger broadband connection or through enhanced connection speeds for mobile devices that connect to TVs via accessories like Google’s Chromecast.
Amazon Challenges YouTube
By Stacey Gallarde, Senior Media Planner
In recent years Amazon has made multiple moves to expand beyond its e-commerce roots. They’ve broken into the tech space with products such as the Fire Phone, Fire Stick and Amazon Echo; the media space with the launch of Amazon Prime Video, and even into traditional retail with the opening of brick and mortar Amazon Books bookstores. Continuing with this trend, Amazon added another weapon in its arsenal this week with the launch of a new video service dubbed Amazon Video Direct (AVD).
AVD can be described as YouTube-like, in that it allows users to upload original and/or licensed videos. With Amazon’s clout, launch partners include heavy-hitters such as Conde Nast, Mattel, Mashable, Business Insider and Machinima. The content will be available on all devices that Amazon Video can be streamed, including mobile/tablet devices, connected TVs and gaming consoles.
For creators, this opens up a new avenue for exposure on a platform with built in reach. It also opens up the doors to increased revenue potential, with Amazon allowing the creators to choose between four distribution models :
- Make content available to Prime Video subscribers only, in exchange for a $0.15/hour streamed in US, and $0.06/hour in other countries (though there is a yearly cap of $75K)
- Make content available via an add-on subscription through the Streaming Partners Program, in exchange for 50% of the subscription fees
- Make content available through rental or purchase, in exchange for 50% of the revenue
- Make content available to all Amazon customers for free with in-stream ads, for which creators will receive 55% of the ad revenue (similar to YouTube)
On top of that, Amazon is upping the ante to ensure users are striving to make quality content by launching a program called AVD Stars. This program will reward the top 10 AVD titles monthly with bonuses doled out from a $1MM fund.
For Amazon, adding AVD to their wheelhouse is a no brainer. It allows the company to evolve their streaming video offering without having to license or produce original content. It also encourages users to spend more time with Amazon products/services on a daily basis, where they can now not only consume Amazon content, on (potentially) Amazon devices, but also readily purchase products on the Amazon storefront.
“Think of this like a Trojan horse to bring you into the kingdom of Amazon, which is a massive shopping mall,” said Peter Csathy, the chief of consulting firm Manatt Digital Media Ventures.
Marketers should keep a keen eye on AVD as it rolls out. Though Amazon’s user base (~300MM users, plus an estimated ~50MM Prime subscribers) is not yet at the scale of YouTube’s (1B+), there is one important area where they may have a leg up — data! As Amazon is the reigning e-commerce giant, they already have stores of 1st party shopping data. Pairing that with 1st party viewing data gleaned from AVD could prove to be a valuable tool for marketers.
Be There, Be Useful, Be Quick: Google’s Mobile-First Algorithm
By Crystal Stanford, SEM / PPC Manager
Google originally rolled out its mobile-friendly algorithm update in April of 2015 — often referred to as “mobile-geddon” because sites not yet updated to be mobile-friendly were heavily penalized — and now it appears that they’ve rolled out an as-promised boost to the update this past week. The boost is said to increase the power of Google’s mobile-friendly ranking signal. In other words, if you still don’t have a mobile-friendly site, your mobile-friendly competitors will receive yet another leg up on you.
Mobile Friendly Test Tool
It’s 2016, so I’m hoping with all hope that you already have a mobile-friendly site, but if you’re still unsure, Google offers an easy tool, appropriately called the mobile-friendly test tool, to verify.
These recent updates to encourage mobile-friendly websites are only one of many pieces in their mobile-first strategy. In addition to ensuring that websites being returned on search results pages offer a good experience to those searching on mobile, Google is also catering to queries that naturally occur on mobile devices. They refer to these as “micromoments”, moments throughout our day when we pull out the smartphone to complete a task, often in a rush. Google encourages marketers to meet people in these micromoments and provide utility to them.
Near Me
One of the most common microments is the situation in which we need to find some sort of business or service within our immediate proximity. Google notes that “near me” searches (as in, “best sushi restaurant near me”) have increased 146% year over year on mobile, and 88% of these searches occur on mobile devices. In response to this growing trend, Google has started to autocomplete for these searches. They’ve also rolled out the Google My Business API to arm businesses with a one-stop shop for updating locations and store hours to better inform results for “near me” queries. In addition to location, Google also allows mobile searchers to sort by rating and store hours (“Open Now”).
Google’s mantra to help marketers optimize for these microments is, “Be there, be useful, be quick.” Your mobile-friendly website showing up for a “near me” query is an obvious box to check off when you want to be there, be useful, and be quick, but in addition to what’s happening on Google’s search results page, the final and perhaps most important piece is making sure that your website is providing a quality mobile experience.
Quality Mobile UX
For this, Google recently published a very informative white paper called “Principles of Mobile Site Design: Delight Users and Drive Conversions”. Some of the more helpful points include: Keeping calls to action front and center (see Progressive example below), keeping menus short and sweet, making sure it’s easy to navigate back to the homepage, making sure the site search is visible, utilizing existing information to simplify form fills, and using click-to-call buttons for complex tasks.
Overall, the gist of creating an enjoyable mobile experience for potential customers is minimizing the amount of scrolling, searching, and typing someone will have to do on their more-limited mobile screens, and understanding the types of actions a potential customer is probably going to want to take. In the case of the Progressive example, Progressive has probably gathered through their analytics that mobile visitors are most likely looking to get a quick quote of car insurance.
Mobile-Friendly Isn’t Enough
While most websites by now have cleared Google’s first hurdle by creating mobile-friendly websites, the problem for marketers actually starts there. It isn’t enough these days to just take your existing website and make sure it squeezes itself onto an iPhone screen alright. Your competitor is doing that too, and maybe better. How do you get a leg up on all your mobile-friendly competitors? Be there, be quick, be useful.
Do potential customers searching for you on mobile do it differently than when they search for you on desktop? Should you optimize for “near me” queries? Do you need to set up a My Business account, or if you already have, do you need to update it? Put more thought into your mobile site and what your customers might be doing on it. Perhaps your mobile traffic behavior is very different from desktop traffic behavior. Figure out if that’s true and design your mobile site accordingly. Mobile isn’t just a “nice to have” anymore, it’s essential.
The Fat Finger Condition
By Nathan Johnson, Asst. Media Planner
Imagine, you’re scrolling through an article on your smartphone, fully engaged in the rich story being told. Suddenly, the page goes blank as you notice that it’s being redirected to another. Quickly realizing that you grazed the edge of an ad, you desperately hit the back arrow before the new page has fully loaded. Slightly frustrated, you continue reading the article making sure to avoid the ad next time.
I like to call the scenario above, the fat finger condition. Many of us, including myself, are plagued with the inability to scroll through our mobile devices without occasionally clicking an ad that was not intended to be clicked. According to a study by location-based mobile ad platform Retale, roughly 60% of banner ads clicked on mobile were done so by accident. That’s a staggering number, though is understandable given the screensize.
Not only do accidental clicks frustrate users, but they also cause the advertiser to lose money on clicks that amount to nothing more than that. This creates an environment where publisher’s ad space can become devalued over the long run.
Companies, such as Google, realized that this can’t go unaddressed and have been implementing a series of “protections” across mobile web and apps to prevent accidental clicks. Most recently, Google unveiled it has extended accidental click protections to native ad formats. A couple ways the company plans on preventing accidental clicks are by ignoring fast clicks (figure 1) and when users miss adjacent content and accidentally clicks on the edge of an ad (figure 2). Google says these protections prevent tens of millions of accidental clicks per day and could also help increase overall conversion rates by 10% on average.
Figure 1 Figure 2
While the interactivity of the mobile space continues to evolve, we as advertisers can be proactive in ensuring our ads are generating the desired interactions. So I leave you with two thoughts as you plan your next media strategy:
Utilize ads that work well on mobile.
The desktop media strategy won’t always work well on mobile given the device has a much smaller screen. Use placements that work well in the space, such as in-feed content. This can be native articles and video, to name a couple. Avoid running heavy amounts of banner ads on mobile.
Look at the page analytics.
Seeing what users do after the initial click will give much more insight into the success of the click. For example, the bounce rate, time spent on page, and conversion rate are all great measurements of user interest.
