All posts in “Advertising Tech”

Nike is using its new digital studio to build a community of sneakerheads

A year after acquiring Virgin Mega, Nike is revealing some of the early results of its experiments with augmented reality and community-building.

Virgin Mega was a startup backed by Richard Branson’s Virgin Group that focused on fan communities and shopping. Ron Faris, who led the startup, told me that Nike acquired Virgin Mega in order to explore those same ideas.

Since then, the team has turned into a “digital studio” called S23NYC. Faris said it still has a “startup culture,” with a small team of 24 startup veterans working out of the old Converse offices on 23rd Street in New York City.

S23NYC has taken over Nike’s SNKRS app, which is supposed to offer content and insider access to the latest sneakers. Faris said he treats SNKRS as “our digital piranha tank.”

“This is like our lab,” he said. “We drop something in the piranha tank and see how fast the piranhas swarm around it.”

For example, after Penny Hardaway took a sharpie to his sneakers to so that they met NBA rules, the SNKRS app launched a stealthy promotion where users could unlock Royal Foamposite shoes by swiping over the screen to color in a digital photo — Nike describes it as “scratch-off cards for the digital age.”

SNKRS has also run geotargeted Stash campaigns, where users can purchase limited edition sneakers from the app — but only after they’ve to traveled to a certain location in their city, whether it’s Washington Square Park in New York or pop-up flower stands in Los Angeles.

SNKRS found em

And the team ran a promotion with Momofuku’s David Chang, where users had to capture an image of Chang’s Fuku East Village menu in the SNKRS AR Camera, which would bring up an 3D model of the Nike SB Dunk High Pro Momofuku and unlock the ability to purchase the sneakers.

Faris said these promotions are linked by a focus on scarcity and urgency, combined with the idea of giving sneakerheads the opportunity to “peacock” their knowledge. In other words, the most in-the-know fans can snag their own sneakers, then get bragging rights by sharing that knowledge with others. For example, Faris said users were posting photos of the Fuku menu on Instagram, and they’d hang out at a Stash location to help others unlock the promotion.

Faris added that one of the goals is to use technology to capture “only the good of lines, which is the tailgate, while avoiding the bad, which is where you feel like you’re at the DMV.” So even when users are directed to a certain geofenced area, there’s no actual line to pick up the physical shoes. That means it’s less of a cutthroat competition, and it doesn’t come with any tedious waiting.

Next up, Nike plans to launch SNKRS in China and Japan later this year (the app is already in the United States and Europe). Faris also said his team is working on an initiative called Stash Squads, where people who live outside a given city can still participate in a Stash promotion by forming teams with locals.

Facebook Messenger lets games monetize with purchases and ads

Facebook is finally giving developers a reason to build games for Messenger while also opening a new revenue stream for the chat app. After launching HTML5 ‘Instant Games’ inside Messenger like Pac-Man, Space Invaders, and Words With Friends Frenzy in November 2016, today Facebook is allowing developers to add in-app purchases as well as interstitial and rewarded video ads. Players get a virtual good or bonus life in exchange for watching rewarded videos.

Facebook will take a cut of the ads shown in Messenger games that are routed from its Facebook Audience Network, and they’ll begin appearing in some games on iOS and Android. In-app purchases will only start testing on Android, with Google Play taking its standard 30% cut.

Facebook was cagey about how much of a cut of in-app purchase revenue it plans to take, repeatedly giving this vague statement when asked: “Our early tests for IAP will follow the standard rev/share policy and transaction fees for Google Play In-App billing.” For now it seems that the remaining 70% goes to the developer, but Facebook will likely opt to take a portion of that when in-app purchases fully roll out.

Developers who want access to the monetization beta program as Facebook rolls it out more widely can sign up here, while advertisers who don’t want their Audience Network ads from appearing in games can opt out. Facebook plans to roll out ad measurement and optimization tools for game developers soon, plus ways to publish games to its directory more easily.

The move should attract higher quality games to the Messenger platform, as until now, devs could only hope to build an audience and monetize down the line. Now with cash able to flow in through the games, it’s worth pouring more development resources into the platform. Previously, the only real way to earn money off these games was indirectly through branding, as with titles like Valerian Space Run, Wonder Woman, and Lego Batman Bat Climb that promote movies.

Facebook seems to be taking Messenger Instant Games quite seriously after its desktop game platform withered and mobile game was dominated by the App Store and Google Play platforms. Facebook sees an opportunity to not only give people something to do between chat conversations and a way to challenge freinds, but also now to start squeezing more cash out of the 1.3 billion Messenger users without interrupting the traditional use cases as its inbox ads do.

Snaps raises $6M to expand its marketing platform for messaging apps

Snaps has raised $6 million in Series A funding for what it calls its Conversational Marketing Cloud.

By that, it’s referring to a suite of tools that allows businesses to promote themselves through messaging. CEO Christian Brucculeri said Snaps is differentiated by its “write once and deploy everywhere approach,” allowing marketers to build things like chatbots and emoji keyboards that work across platforms, no develop required.

Brucculeri also pointed to the Snaps’ ability to deliver personalized messages to each consumer, thanks in part to integration with customer databases and with artificial intelligence platforms like IBM Watson.

As an example of what a brand can do with Snaps, Brucculeri recounted a campaign with Budweiser, where a chatbot would ask consumers about their favorite team, then send them a message before the game, reminding them that kickoff was in two hours and asking if they needed a beer delivery from Drizly.

Snaps actually started out as an augmented reality company called GoldRun, but Brucculeri said it was a little ahead of its time — he joined in 2014 to help the company switch directions, eventually settling on its current model.

Nike Stylebot

Snaps has since worked with brands like Nike and Macy’s, as well as celebrities like Lady Gaga, and it says that sales have been increasing 200 percent year-over-year for the past two years.

It’s also gone beyond traditional messaging, allowing marketers to build skills for Amazon Alexa as well. Asked about how the platform might continue to expand, Bracculeri said, “Channels like email and branded native applications are — I wouldn’t say that they’re dead, but I would say they’ve hit a point of maturity and relative decline. The future of communication is conversational.” And so the company will focus on “building products that speak to and help accelerate that vision.”

The funding comes from Signal Peak Ventures, with Signal Peak’s Brandon Tidwell joining the Snaps board. Bracculeri said the money will help the company expand its product, sales and customer support teams, and to open its first office to address the market of Europe, the Middle East and Asia.

Snaps has now raised a total of $13 million.

Featured Image: 10 FACE/Shutterstock (IMAGE HAS BEEN MODIFIED)

Facebook and Google competed for anti-immigration ad dollars during the 2016 election

In a textbook illustration of the conflict of interest between Facebook and Google’s ostensible dedication to free speech and their ostensible espousal of progressive values, the internet giants reportedly took millions in advertising money from a major anti-immigration group at the same time as both were engaged in pro-immigration advocacy.

Bloomberg reports that both companies worked with conservative nonprofit Secure America Now, which spent millions on ads on the platforms during the 2016 election. SAN’s ads, as far as they related to immigration and refugees, were execrable scaremongering, invoking the phantom threat of Sharia law being applied worldwide — the Mona Lisa wearing a niqab, for instance.

And these weren’t merely banner ads placed on popular keywords for xenophobes. They were reportedly targeted and tested with plenty of help from Google and Facebook. The former reportedly worked directly with SAN to improve the campaign, while the latter did extensive A/B testing to see if vertical video would do better. (Head of AR/VR and former head of ads Andrew Bosworth denied the company worked directly with SAN, but confirmed it worked with SAN’s ad agency. Google has since removed the ads.)

A few short months later, in January, both companies spoke out forcefully against anti-immigration efforts, specifically the newly sworn-in President’s executive order that attempted (unsuccessfully) to ban immigrants from several Muslim-majority countries.

Mark Zuckerberg wrote in a blog post:

We need to keep this country safe, but we should do that by focusing on people who actually pose a threat… We should also keep our doors open to refugees and those who need help. That’s who we are.

And Sundar Pichai in an internal memo:

We’re concerned about the impact of this order and any proposals that could impose restrictions on Googlers and their families, or that create barriers to bringing great talent to the U.S….We’ve always made our view on immigration issues known publicly and will continue to do so.

Am I the only one for whom these sentiments ring hollow considering that both companies had so recently been dancing for coins from a group whose sole purpose was to scare voters into choosing the candidate with the strong anti-immigration stance?

I understand that it is a very difficult balance, to be a platform on which free speech is valued, but to have to run a business as well. You can’t turn your nose up at something that turns your stomach — not if the price is right. So the scammy apps, miracle diet pills, and conspiracy theories all get their ad spots just like Target and Newegg.

But to take millions from a group one day, and then turn around the next to say you are deeply and fundamentally opposed to that group’s values — I’d like to say I don’t expect that kind of cynical hypocrisy, but that would be a lie. Why expect any better?

On this and other issues, there seems to be little connection with what the public head of the company says, and what the guts of the company actually do. Whether it’s on accessibility, diversity, abuse, politics, finances, transparency, or any other issue: all you can trust that these companies will do is what’s best for the bottom line.

AdHawk acquires Automate Ads to improve Google and Facebook ad campaigns

AdHawk is announcing that it has acquired one of its competitors, Y Combinator-backed Automate Ads.

Even if you weren’t a customer, Automate Ads may sound familiar because it was previously known as Kuhcoon, a social advertising startup co-founded by Andrew Torba, who has since been in the news for getting banned from the YC alumni network and for his social network, which has ties to the far-right.

So it’s worth stating this upfront: Torba is gone from Automate Ads. In fact, AdHawk co-founder and CEO Todd Saunders said that the company had basically shut down prior to the acquisition. And while Saunders saw value in the technology, no one from Automate Ads will be joining AdHawk. (CTO Charles Szymanski will be consulting during the transition.)

Saunders said that this could be just the beginning of more consolidation, both at AdHawk and across the industry, as  companies try to create broader digital advertising platforms.

In the case of Automate Ads and AdHawk (which was incubated at Techstars Boulder), both companies offer products for running Facebook and Google ad campaigns. But where AdHawk has focused on providing data to optimize existing campaigns, Automate’s tools help advertisers create those campaigns in the first place.

“For us, this moves AdHawk from a tool to a platform and allows us to service many more customers,” Saunders said. “We really believe that campaign creation should be done in a data-driven way, and with our optimization tool, we plan on infusing that into the … process.”

The financial terms of the deal were not disclosed. The plan is to integrate AdHawk and Automate Ads into a single dashboard by the first quarter of 2018.

Featured Image: AdHawk