Wednesday, June 12, 2019

Here's what you need to know in advertising and media this week - Business Insider

Here's what you need to know in advertising and media this week - Business Insider


Here's what you need to know in advertising and media this week - Business Insider

Posted: 11 Jun 2019 05:52 PM PDT

Fernando Machado Burger KingBurger King

Hello!

This week we published our fourth annual list of the 25 most innovative chief marketers. With the $221 billion US ad industry facing disruption on several fronts, marketers have to navigate fragmented consumer attention, pioneer new ad models, and fend off direct-to-consumer upstarts.

And leading this year's list was ... Fernando Machado of Burger King. Senior advertising reporter Tanya Dua, who compiled the list, wrote that Machado continues to deliver envelope-pushing ad campaigns like its "Moody Meals" that threw shade at McDonald's Happy Meals and its Google Home of the Whopper TV spot that hacked Google Home devices to dish details about the Whopper. Machado also oversaw Burger King's first Super Bowl spot in 13 years, which turned heads by making archival footage of Andy Warhol eating a Whopper into a 45-second ad.

Burger King's been on a growth tear, too: Its market value rose 23% this year to $29.9 billion while the much-bigger McDonald's rose 10%. Burger King also opened up 1,000 restaurants around the globe last year to McDonald's 600. Read who else made the list here.

This is your weekly Advertising and Media Insider newsletter, where we catch you up on all the big stories we worked on this past week. What did we miss? Send me tips or feedback at lmoses@businessinsider.com.

Here are other stories we've been reporting. (You can read most of the articles here by subscribing to BI Prime; use promo code AD2PRIME2018 for a free month.)

Wall Street analysts forecast a major power shift in the streaming TV market, with Hulu and YouTube surging while others falter
AT&T, Dish Network, Hulu, YouTube, and Sony are all battling it out over cord-cutters who are ditching traditional-TV services, and looking for cheaper alternatives online. Hulu and YouTube's live-TV services are growing rapidly, and analysts break down why they could soon be two of the leading internet-TV providers.

The New York Times says it's getting ads to perform 40% better by targeting people based on emotion
The rise of mobile and privacy measures like Google's and Apple's anti-tracking initiative is forcing marketers to find alternatives to cookies to personalize ads to people. The New York Times is pushing ads that match messages to people based on emotion, and says these ads outperform its regular ads, but advertisers are skeptical of the premise.

New data shows why Disney is betting heavily on 'Star Wars' TV shows for its Netflix competitor, despite a slowdown on movies
Younger audiences have lost some enthusiasm for the "Star Wars" franchise, but it's still a major hit with people 35 and up, and that could make it an essential part of Disney's streaming efforts, according to a report from analytics firm Ampere Analysis.

Here are other stories from advertising, media, and tech you should check out:

Here's why the failed attempt to break up Microsoft will make or break the crackdown on Facebook, Amazon, and Google, according to two top lawyers in the Microsoft case

The news industry is joining the attack against big tech companies like Google and Facebook

Biographer Ken Auletta, who failed to crack the Harvey Weinstein story in 2002, says he's done 100 interviews for his book on the disgraced mogul

Meet the 14 top executives who lead Alphabet's 'Other Bets,' helping the company go beyond just Google

The way a hyper-local news article went viral on Facebook shows that even legitimate news has the potential to mislead readers on social media

Why an industry-shaking merger of Dish and DirecTV could finally happen, according to Wall Street analysts

Insiders were shocked when DC Universe's 'Swamp Thing' was suddenly canceled despite a huge investment in the series and rave reviews - Business Insider

Posted: 11 Jun 2019 05:57 AM PDT

DC Universe's latest original series, "Swamp Thing," was abruptly canceled on Thursday with no explanation, despite positive reactions from critics and fans alike. The series had only aired one episode on the streaming platform, which launched in September, and episode two became available on Friday.

Seven people close to the production, who wished to remain anonymous, told Business Insider they were shocked by the news that "Swamp Thing" was canceled.

The James Wan-produced horror show, based on the DC comic book, has a 92% critic score on Rotten Tomatoes, and "#SaveSwampThing" immediately began trending on Twitter after the series was canceled.

"Cancellation came as a surprise, 100%," a producer on the series said. "It came out of left field."

Read more: DC Universe has canceled its new series 'Swamp Thing' after airing just one episode, despite a 92% rating on Rotten Tomatoes

The first season was originally going to be 13 episodes, but production abruptly shut down in April after the season was cut to 10 episodes. Despite this, the seven people said they had little inclination that the show was in trouble, and even expected more seasons to come, especially after the show started getting good buzz.

"We walked away with the sets standing," the producer said. "We didn't tear them down and go home."

One source close to the production told Business Insider that the show had a possible three-season arc, and the feeling on set was that it could have gone past that if it was a hit, with characters spinning off into their own shows. The source used the specific example of a potential "Justice League Dark" team-up series.

But while the full 10-episode season will stream, and episodes debut every Friday, the series won't return for a second season.

When asked for comment by Business Insider, DC pointed to a community post on the DC Universe website.

"We appreciate there are questions as to 'why,' but unfortunately we are not in a position to answer at this time," the post said.

The internet had its own theory for the cancellation

Without a detailed announcement from DC Universe, speculation began swirling online that the series was axed due to confusion over funding for the film program in North Carolina, where the series was filmed.

But the North Carolina Film Office director, Guy Gaster, told Business Insider that the state government's budget miscommunication had "no impact whatsoever" on "Swamp Thing."

Warner Bros. was actually approved for $16.9 million — $4.9 million for the "Swamp Thing" pilot, and an additional $12 million for the rest of the season. The Star News reported that the season's budget was around $85 million.

"The parameters of all of these programs are up front," Gaster added. "It's not something that comes as a surprise to the production."

Crystal Reed as Abby Arcane in "Swamp Thing."
DC Universe

Crew members were as shocked as anyone

So why was a well-reviewed series with a possible multiple-season story arc and an enthused fan base suddenly canceled after its debut episode?

While the show was expensive, the producer who spoke with Business Insider didn't believe that was the main factor. The producer said the show was budgeted accordingly, and everyone understood the North Carolina film-grant program.

READ MORE: DC Universe is off to a hot start with 3 original TV series that rival Netflix in quality, but it has a big challenge ahead

"We knew we were getting good stuff on set and we kept hearing that the studio was very happy," a crew member said. "There were also a lot of sunk costs where it felt like if things were going well at all, they'd probably keep going because they had so much invested in it. The swamp we built was incredible and was a very expensive set to build."

A separate source involved in the production said the swamp set cost roughly $2 million. Below is a photo of the swamp set one crew member provided Business Insider:

A photo of the swamp set from "Swamp Thing," which a source told Business Insider cost around $2 million.
"Swamp Thing" crew member

But another potential reason for the cancellation, beyond the high cost, was a shift in strategy at WarnerMedia, DC's parent company, which formed in the merger of AT&T and Time Warner last year.

A source who worked on the show said there was buzz on set that WarnerMedia might fold DC Universe into its own upcoming streaming service, which is also expected to include HBO and Cinemax. That means WarnerMedia could have an alternate vision for DC Universe than originally expected, which could have influenced the "Swamp Thing."

This is the first sign of trouble for DC Universe, which has released four original shows so far (including "Swamp Thing") that have all been received well by critics and fans. It plans to release an animated "Harley Quinn" series and the second season of "Titans" later this year.

If you have a tip about "Swamp Thing" or DC Universe, contact the author at tclark@businessinsider.com.

Amazon, Apple and Google market share makes large target - Business Insider

Posted: 11 Jun 2019 04:31 PM PDT

The head of antitrust at the Department of Justice said Tuesday that officials will scrutinize big tech companies in search of evidence of anticompetitive behavior.

The Department of Justice and the Federal Trade Commission have already agreed to divvy up responsibility for the fresh burst of oversight, with the DOJ looking at Google and Apple, and the FTC looking at Amazon and Facebook, according to recent news reports.

On Tuesday, Assistant Attorney General Makan Delrahim explained, in a video speech to a conference in Tel Aviv, Israel, the kinds of behavior and market conditions the DOJ will look for. On his radar: higher prices, loss of consumer privacy, exclusive deals and mergers designed to protect a monopoly or harm a competitor.

Read: Breaking up Facebook would make Instagram less safe for people, executive says

For the big tech companies that now have targets on their backs, there's a lot of risk: Google, Amazon, and Apple each command a giant swath of various tech markets. Here are some of the biggest markets dominated by the Big Tech threesome, according to market research firm Gartner, which could attract the attention of regulators.

Amazon:

  • Amazon is a giant in ecommerce sales, the No. 1 online retailer, based on US total sales, with an estimated more than 100 million paid Prime members.
  • But it is also the No. 1 — by a mile — cloud computer provider, too, based on revenue. Interestingly, its size has meant that it is the only meaningful challenger to Google in its core market of online product searches.
  • Gartner estimates that 55% of product searches start on Amazon.com, signaling a shift away from traditional search engines.
Apple CEO Tim Cook
AP
Apple
  • Apple commands only about 14% of the worldwide smartphone market, which makes it the No. 2 player behind Samsung for 2017 and 2018.
  • Apple is the No. 4 player in the PC market behind Lenovo, HP and Dell with almost 7% share in the first quarter of 2019. (Data does not include iPads.)
  • Because Apple makes its own chips for use in its products, its semiconductor business is huge, too. In 2018, it commanded a nearly 9% share of the market, Gartner says, which amounts to being in second place in terms of market share behind Samsung.

That kind of buying power on electronics materials gives Apple a lot clout. And its clout could rise higher if Apple ever moves away from Intel chips for its PCs, switching to its own design, as it's been rumored to be working on for years and reportedly could do next year. For now, its still using Intel, including its brand new, high end, $6,000 Mac Pro

Google CEO Sundar Pichai
Justin Sullivan / Getty Staff
Google
  • Google is the internet search advertising leader by a mile. Google has been in antitrust hot water in Europe for years, including billions of dollars in fines involving its search and Android businesses.
  • But Google is also the No. 3 cloud provider behind Amazon and Microsoft, Gartner points out.
  • When it comes to online advertising, Google and Facebook combined control 75% of the market. They are often referred to as the duopoly.

What are the most expensive cities for weddings? - Business Insider

Posted: 11 Jun 2019 07:56 AM PDT

Some Americans spend a lot on weddings — sometimes more than their annual salaries.

According to The Knot 2018 Real Weddings Study, a survey of 14,000 brides and grooms, the average American wedding costs $33,931, the same average as the 2017 survey.

However, the most expensive locale for a wedding, New York City, costs $96,910 on average, up from $76,944 in 2017. For reference, the national mean household income is $84,525 a year.

The Knot also found the average guest count (136), average wedding gown price ($1,631), and the average age of brides and grooms (29.1 and 30.5, respectively). The most popular month to get engaged is December (16%), while the most popular month to get married is September (18%).

For the first time, the Knot surveyed Generation Z (age 14 to 23) newlyweds, who aren't as drawn to wedding traditions as past generations. Some wedding traditions are becoming less common, like the bouquet toss (45% in 2018, down from 53% in 2016) or the garter toss (33%, down from 41% in 2016).

Wedding prices are higher than ever, and often they come close to or exceed average annual salaries.

Here are the most expensive places to get married in America, along with the average household income of each location.

Inside Salesforce's 6 month courting process of Tableau - Business Insider

Posted: 11 Jun 2019 02:33 PM PDT

Salesforce's $15.7 billion acquisition of Tableau announced Monday started with a text, came together over a meeting in a San Francisco mansion, and very nearly fell apart multiple times.

Around six months ago, Salesforce CEO Marc Benioff was looking for a way to put to use all of the data generated through MuleSoft, the big data platform it acquired for $6.5 billion in May 2018, according to two people familiar with the process.

Benioff, who's known for his personal involvement in acquisitions, reached out to the team at Tableau over text message to see if there was any way the two companies could work together, the people said.

Over the next six months, there was a lot of push and pull. The tie-up had nearly come together three times before, one person said. But market volatility kept getting in the way.

From December 13 to 24, a few weeks after conversations first started, Salesforce's stock fell 14% and Tableau's stock fell nearly 16%.

At the same time, the CBOE Volatility Index, a measure of market volatility, hit its highest point of 2018. Typically, companies don't want to go through major events such as mergers or public offerings if the VIX has spiked.

Both companies' stock prices continued to fluctuate around 5% to 10% nearly week-to-week up until the deal was signed.

Since neither company was willing to budge on price, and it was an all stock-deal, the deal was postponed until the market had rebounded, the people said.

On June 3, less than a week before the deal was announced, tech stocks were hit hard on worries that Facebook and Google might face more anti-trust scrutiny. Salesforce shares traded down 4% and Tableau's stock dropped to $108.26, its lowest price in six months.

Until last Friday, it wasn't so clear that the deal would happen.

"I think that we've tried to do something for a long time, and it's just hard to get the stars to align," Benioff said on a conference call Monday. "And I think that we're fortunate that we got there. "

Ultimately, Salesforce agreed to acquire Tableau in all-stock transaction that gave Tableau 1.103 shares of Salesforce for every one share of its own stock. This valued the company at $175 per share, up from where it closed on Friday at $125.22.

If the deal gets approved by shareholders, the acquisition is expected to close by the end of October.

Tableau bounced back from turmoil

Tableau is a data visualization platform that transforms swaths of data into easy to digest graphics. It competes with Microsoft Azure's Power BI, as well Looker, which Google acquired last week for $2.6 billion.

When Salesforce approached the company about an acquisition six months ago, Tableau was on the upswing after a period of turmoil.

The stock hit a high of $128.74 per share in 2015, before plummeting, sinking to just $37.22 per share at one stage in 2016. In an effort to right its course, the company switched to a subscription revenue model in 2017 from a model where customers paid a higher price up front to use it perpetually. In the years since, the stock has slowly gained momentum, and eventually surpassed its previous high last year.

It was around the time that things picked up financially for Tableau that Benioff initiated discussions.

Read more: From an email to a $6.5 billion deal in 46 days: How Salesforce's bid for MuleSoft came together

With its downward slump in the rear-view mirror, Tableau CEO Adam Selipsky and the board of directors made clear that there would be a high bar for the company to sell, two of the people said. On the other hand, Salesforce was very conscientious about the optics of overspending on an acquisition, they said.

Once the conversations gained momentum, Benioff invited both teams over to his home in one of San Francisco's toniest neighbhorhoods, with large houses and views of the Pacific Ocean. It was there that the teams "put meat on the bones" of the deal, one person said.

Salesforce brought in Bank of America Merrill Lynch to advise financially. The bank had previously worked with the company on its acquisition of MuleSoft.

Tableau worked with Goldman Sachs on the deal. The bank was lead left on Tableau's IPO in 2013, and led their follow on deals later that year and again in 2014. Goldman had also recently sold three other companies to Salesforce, including MuleSoft.

It's unclear whether Tableau spoke with any other companies during the acquisition discussions.

Salesforce declined to comment.

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