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Thanks to the magic of CGI, your brand could soon be edited into a streaming platform’s original programming.
Product placement was among the most-talked-about trends in presentations at the Interactive Advertising Bureau’s NewFronts this week. Similar to Upfronts for the TV industry, the event offers streaming and social media platforms a chance to pitch brands on their latest advertising offerings.
NewFronts featured a range of announcements around content and advertising. This included options for brands and retailers, including new options to bring visibility to products, and bringing shopping directly into the content.
Here’s a look at the ecommerce and creator-focused announcements from the weeklong event:
Product placement in post? It’s coming to Amazon. The tech company’s NewFronts presentation included an intro to a Virtual Product Placement (VPP) open beta program that will enable products to be added via CGI to Prime Video and Amazon Freevee shows. Added to designated shots, the products will be added after filming is complete. Elsewhere, billboards and signs will be able to display different messages.
Amazon said VPP is already available on Amazon original shows like Reacher, Tom Clancy’s Jack Ryan, the Bosch franchise, Making the Cut, and Leverage: Redemption.
Amazon shared the example of a still from Bosch where M&Ms were added to a bowl.
“Virtual Product Placement is a game changer,” said Henrik Bastin, CEO of Fabel Entertainment and executive producer of Bosch: Legacy, in a statement shared by Amazon. “It creates the ability to film your series without thinking about all that is required with traditional placements during production. Instead, you can sit with the final cut and see where a product could be seamlessly and naturally integrated into the storytelling.”
In testing, a CPG brand reported a 6.9% increase in brand favorability and a 14.7% increase in purchase intent for their campaign, per Amazon.
The sports-focused streaming platform has additional targeting capabilities for brands. Dubbed “Follow the Audience,” this feature uses first-party data to create customized audience segments, which can in turn be used to target viewers. For instance, this could be used to reach football fans with specific ads, even if they aren’t watching football content.
“Not only can we target contextually and demographically, but we can also identify audiences based on viewership behavior and preferences to tailor campaigns to specific fans, no matter what type of content they’re watching,” said Diana Horowitz, SVP of advertising sales at fuboTV, in a statement.
The Facebook and Instagram parent put a focus on creators with its new offerings. It announced a change to payouts for Reels content on Facebook that will mean more money for some creators (Others will receive less). Additionally, it is creating a new initiative called Challenges on Facebook that is designed to incentivize content creation. It is also rolling out additional insight tools for Reels Play creators.
NBCUniversal’s streaming service had a pair of new ad offerings to unfurl.
A new feature called a Frame Ad will feature a brand message in a border around a show that is playing on the platform. This could include interactive elements that make the ad shoppable. For brands, NBCUniversal also pointed out that it has access to first-party data and a partnership with quick commerce service Gopuff.
Product placement within a show is the focus of a second tool called the Peacock In-Scene Ad. Currently in exploratory mode, this will offer a custom solution for brands to identify the right moments in shows to deliver personalized messaging for a viewer. Then, Peacock will integrate a brand’s product into the show in post-production.
"The majority of Peacock customers are opting for our ad-supported experience and we remain focused on collaborating with our brand partners to develop innovative, personalized ad experiences that continue to enhance the customer experience,” said John Jelley, Peacock Senior VP of product and user experience, in a statement.
Social media is getting more shoppable. Roku offered a look at how streaming services are adding the ability to browse and buy products, too. The platform now has original content. With that comes advertising. Roku said it will be adding a new program for retailers that pairs shoppable ads with its Roku Pay. This is designed to allow products to be sold directly from ads.
Additionally, Roku is partnering with Microsoft to explore how TV advertising, both linear and streaming, impacts search.
The celebrity endorsement just got easier. The Snap x Cameo Advertiser Program offers brands that advertise on Snapchat access to the 45,000 actors, athletes, musicians, reality stars and influencers in Cameo’s talent pool for custom video ads. Brands also get access to ideation and editing services, as well as other benefits. Already, Mattress Firm, 37Games, Kraft, and Molson Coors have used the program.
TikTok’s latest advertising product is allowing brands to appear next to the platform’s most popular videos.
Called TikTok Pulse, the contextual service is offering space for brands among the top 4% of videos. They will appear in the For You Feed, the algorithm-powered feature that curates and recommends TikToks specific to a user's interests. Initially, this capability is being offered in 12 categories, including beauty, fashion, cooking and gaming. To ensure brands appear next to content they deem appropriate, TikTok is also applying an inventory filter and making third party tools available for suitability and viewability verification.
Alongside providing access for brands, TikTok is also testing a revenue share for creators. Initially, those with more than 100,000 followers will be eligible.
On Amazon-owned Twitch, a new program called For Twitch, With Twitch is set to curate creator-driven content for brands. Another feature called Co-Op Drops offers brands a chance to integrate themselves into in-game rewards offered during video game livestreams.
Alongside a host of new content partnerships and plenty of chatter about Elon Musk's impending takeover, Twitter announced a pilot program that is focused on highlights of big global events. Advertisers will be able to promote and run pre-roll on live event pages where the highlights will be shown. This will make content appear in a user’s timeline, as well as place it prominently in the Explore tab, Twitter said.
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The company is pulling back after breakneck pandemic expansion. Will it sacrifice the shopping experience along the way?
Amazon is in a period of rebalancing.
The company has long scaled at a relentless pace as it sought to not only provide a marketplace for commerce, but the infrastructure that enabled it, as well. Amazon found another level of overdrive over the last two years, as demand spiked to unseen heights during the pandemic and the company tried to build to keep up.
This wasn’t necessarily a period that saw the kind of invention that Jeff Bezos made an existential tenet of the company, but it nonetheless seems to be shaking out as a cycle that included risk and fallout.
In this case, the risk was not a new device like a smartphone or a move to bend the future to Amazon's will like drone delivery. Rather, it was an expansion that took its already-vast operations to new heights.
Nowhere was this more evident than the company’s logistics network. As CEO Andy Jassy described it to analysts Thursday on an earnings call, the company doubled the size of a fulfillment network it took a quarter-century to build in two years. It also built out a last-mile delivery network that was the size of UPS, which is one of the top two carriers in the U.S.
In 2022, all of that expansion ran into 40-year-high inflation, war in Ukraine and a pullback in demand for goods amid reopening. The company first admitted the problem: It had overbuilt.
But the solution is not to tear down. It had to keep expanding as only Amazon does, while still cutting back in a period of “belt-tightening,” as executives have put it.
That’s evident in watching developments out of the logistics network alone. Amazon pulled out of some areas, and canceled plans to expand into some new warehouses. Yet, as Business Insider reported, it still added 79 million square feet – a footprint that is equal to half of next-closest competitor Walmart’s entire distribution network. It is also expanding Buy with Prime, a new program that will allow direct-to-consumer brands to offer Prime benefits, and, by extension, access to Amazon’s logistics network. Another service, called Amazon Warehousing and Delivery, is designed for upstream storage, necessitating more space to be made available in the network.
At the same time, it will seek to keep doing more for consumers.
Jassy indicated as much when he was prompted to outline his priority areas. Beyond cost-cutting, he said speed is the second highest priority for Amazon. As if to conform this, he said later in the call that one-day shipping is getting off the ground in North America.
Selection is another priority area. At Amazon, that phrase translates to a few things, but top of mind is “expanding the third-party seller marketplace.” Third-party sellers accounted for 59% of sales in Q4. Beyond sales, Amazon’s work with the sellers who post their products on the marketplace is also lucrative for the company. Amazon allows these sellers to tap its logistics network to offer Prime through the Fulfillment by Amazon program. Its business segment called third-party seller services grew 20% year-over-year in the fourth quarter, right in line with the massively profitable cloud computing division Amazon Web Services.
Price, Jassy said, is another area of importance, especially with the consumer pullback on discretionary purchases being observed amid inflation.
“I think pricing being sharp is always important,” Jassy said. “But particularly in this type of uncertain economy, where customers are very conscious about how much they're spending, having the millions of deals that we put together with our selling partners in the fourth quarter was an important part of the demand that you saw.”
Finally, Jassy cited a priority of improving the customer experience. He said Buy with Prime would give subscribers the ability to use their benefits across the web, and noted that virtual try-on for shoes brings change to the shopping experience.
But it’s in this area that the tradeoffs that may be happening under the surface may rear their head again. GlobalData Managing Director Neil Saunders noted that online shopping generally is becoming “more difficult" on Amazon.
“While the Amazon marketplace is far from a terrible place to shop, it has become more complex and cluttered with a multitude of products, delivery options, and prices levels for shoppers to sift through,” Saunders wrote in note released at the time of the earnings call. “The result is that impulse buying has dropped and that more people are migrating away to other retailers. This is not yet a serious problem as erosion has only happened at the margins, but it is something Amazon will need to address and arrest to prevent further decline.”
Taking a rhetorical step further, the journalist John Hermann wrote this week that a “junkification” of Amazon is taking place, while arguing that “everything is going according to plan" for the company.
He placed the growth of the third-party seller marketplace at the center of this trend. But it also comes as Amazon grows its advertising business, with many taking note of a growing number of ads on the platform. The company also wants to keep growing Prime, and is now using content such as Lord of the Rings and NFL’s Thursday Night Football as key acquisition channels. Both had “record” signups of new Prime members, CFO Brian Olsavsky said.
“We see a direct link between that type of engagement and higher purchases of everyday products on our Amazon website,” he said.
It will have to do each of these things at once, while entering a period that will require it to be “more targeted with its growth ambitions,” as Saunders put it.
"Since its inception, Amazon has had a culture of throwing dollars at many different things to see where they led and what they could learn," Saunders said. "That approach worked well for a younger, fast-growth business. It works far less successfully for a more mature entity. In our view, management deserves credit for recognizing this and quickly responding. However, the shift requires a lot of care because Amazon needs to find a new balance between being ambitious and innovative and being more frugal with its spending – which will be very challenging."
Jassy said the changes of the pandemic made its logistics a "different network." That may be true of the whole company. Rather than an isolated cycle of overbuilding and pulling back, this may prove to be a period that changes Amazon altogether. The bets will still be there, but the risk will be magnified with fewer dollars that don't pay off to go around. As hinted by the logistics buildout of the pandemic and even Buy with Prime, they also may look more operational.
Less delivery robot, more delivery optimization.
As Jassy put it: “We're going to be very thoughtful about how we streamline our costs, and I think you see a lot of that, but we're also going to continue to invest for the long term.”
The recipients of those investments will say a lot about where it wants to head in this next year.