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Amazon Targets Unprofitable Items, Forcing Marketers to Rethink |
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Hello CMOs. One of the unique selling points of “Fortnite” is the celebratory dances that players can buy for a couple of bucks if they want to celebrate a kill by doing the running man or the floss.
It’s a selling point in the literal sense of the word, too. Sales of virtual goods in the wildly popular battle-royale game have helped “Fortnite” maker Epic Games Inc. generated more than $2 billion in revenue since it launched in mid-2017.
But should the originators of those popular dance moves get a cut, too? Rapper 2 Milly seems to think so. He’s suing Epic for selling the “Milly Rock,” a dance move he says he created in 2011. Epic calls the move in question “Swipe It” and sold it in a $10 package of virtual goods. Epic said it doesn’t comment on ongoing litigation.
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PHOTO: MARTIN MEISSNER/ASSOCIATED PRESS
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Amazon controls nearly half of online sales in the U.S., and now the e-commerce giant is looking to exert more control over the big brands that sell on its platform.
With Amazon exercising more fiscal discipline over its bottom line after years of focusing on growth, the company is looking to cut the CRaP—that is, items that “Can’t Realize a Profit.” These products tend to be priced at $15 or less, are sold directly by Amazon, and are heavy or bulky and therefore costly to ship, the Journal reports.
It has been putting pressure on brands to cut prices or change their packaging. Although this can hurt companies’ online sales or impose extra costs, some executives say Amazon’s strategy can be beneficial for brands if it pushes them to develop more profitable product formats.
While we’re on the subject of Amazon, its Alexa Super Bowl commercial was YouTube’s most-viewed ad of 2018, CMO Today reports.
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PHOTO: GABBY JONES/BLOOMBERG NEWS
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What are your predictions for in-housing in 2019? Will the practice continue to rise, or will we see companies dialing down their in-house capabilities as they come to the realization that some areas of marketing are best outsourced?
By all means, gaze into your crystal ball and send me your answers on a postcard, but first make time for this piece from Digiday, which dives into the Electro Creative Workshop, Clorox’s internal creative agency that has been operating for 20 years.
Electro has a 120-strong team and works alongside the company’s external agencies, but also acts as an agency of record for Clorox’s smaller brands. It’s also helping other brands create their own agencies through a partnership with the Association of National Advertisers.
Improving Clorox’s direct-to-consumer strategy is also on the agenda for next year. To do that, Clorox is directly hiring talent from DTC companies. They “think and act differently than many of my other team members,” said Clorox CMO Eric Reynolds.
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American commutes are getting longer, meaning more time for travelers stuck in traffic to look at billboards and listen to commercials. The New York Times takes a look at how outdoor advertising companies are using anonymous data from mobile devices and apps to figure out what kinds of people are passing their billboards.
“We love a good traffic jam,” John Miller, vice president of sales and sales operations for Lamar Advertising told the Times, presumably while rubbing his hands with glee. Elsewhere, Clear Channel Outdoor has used its data-collection service to find some unlikely correlations. Fast-food customers have a strong correlation with going to the gym, and gym ads perform better when placed near a commuter’s workplace rather than their home.
The article doesn’t discuss any privacy concerns that could arise from this kind of tracking. Back in 2016, for example, Sen. Chuck Schumer (D-NY) asked the Federal Trade Commission to investigate what he dubbed “spying billboards”.
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“That mafia gathering of silence that always surrounded it [ad tech] because no one wanted to talk about things, that silence has gone and that’s really powerful. It’s a sign of self-regulation.”
| — The Guardian Chief Revenue Officer Hamish Nicklin, speaking to Digiday |
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43 Months |
The average tenure of a CMO, according to a survey of 2,400 executives by sales intelligence firm Winmo. The median was 33 months.
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| Three Wishes with…Sparrow Advisers’ Ana Milicevic |
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This week, as we wind down the year, we are asking leaders across the marketing and advertising industries to share their wishes for what 2019 might bring. Today, we speak to Ana Milicevic, principal and co-founder at Sparrow Advisers, a management consultancy specializing in ad-tech and related fields. Below are edited excerpts from our interview.
Your wish for the ad-tech industry next year?
Just one? I think we are again going to see consolidation and simplification, but what I’d like to see the ad-tech industry really do is start providing a viable alternative to the duopoly. We started down that track, we were doing fine for a while. Now, partly because of consolidation, it seems like we are veering toward a very walled garden-type scenario. In the long run, I don’t think this is good for either consumers or for buyers, to have to buy across multiple different walled properties. I’m hoping we can find a way to reverse this trend.
What’s your wish for those big tech platforms and walled gardens?
Understanding where the concerns are coming from for consumers. Enabling super-granular targeting may seem interesting and advantageous, but [tech platforms should consider] the downsides of it and how it can really be predatory and exclude a very wide swathe of folks from seeing certain ads, [or] being exposed to certain versions of what is really reality. I think that that’s where I’d like to see [tech platforms] go: step up on the responsibility front.
What’s your one wish you personally hope you achieve next year?
I would like to make sure that companies stop confusing tactics for strategy and enable them to think beyond the next quarter—and stop falling for the next shiny object in technology.
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Facebook said Friday that pictures belonging to up to 6.8 million users may have been exposed by a software glitch that granted app developers access to the photos. The Irish Data Protection Commission said the regulator opened a “statutory inquiry” this week to see whether Facebook is compliant with GDPR. Facebook said it believes it is in compliance with European law. [WSJ]
Prada said Friday it will stop selling monkey keychains that were widely derided by consumers as racist. The high-end brand said in a tweet it “never had the intention of offending anyone and we abhor all forms of racism and racist imagery.” [Ad Age]
Colin Kroll, the co-founder of HQ Trivia and Vine, was found dead of an apparent drug overdose Sunday morning in his Manhattan apartment, authorities said. He was 34. [WSJ]
The Weekly Standard, a conservative magazine critical of the Trump administration, is closing after a 23-year run, its parent company said Friday. [WSJ]
Instagram will start telling brands which products users are bookmarking on the app, a new analytics feature that could eventually be used for ad targeting. [CNBC]
Google has detailed plans of a major New York expansion and says the addition of 7,000 jobs in the area is a “conservative estimate.” [WSJ]
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