b8ta, the retail as a service startup that has partnered with the likes of Google and Macy’s, is getting into the kids’ toys space. As part of a new joint venture with Tru Kids Brands, which owns Toys “R” Us, b8ta will bring its expertise in experiential retail to the iconic children’s toy store. Both entities will own 50% of the venture.
After about eight to ten months of working together, b8ta and Tru Kids Brands are pulling back the curtains on what they’ve been working on. With these new stores, parents and kids can expect theaters for movies and video games, a treehouse where kids can play, STEAM workshops and more. The first two stores, which will open in November in Houston and New Jersey, are about 6,500 square feet with future stores being closer to 10,000-square feet. For context, these are much smaller than the size of the Toys “R” Us stores people became used to, which were about 30,000-square feet.
b8ta’s solution offers brands that want a physical presence with an experiential-driven store that comes with software for checkout, inventory, point of sale, inventory management, staff scheduling services and more. That means toy brands will have the option to pay to showcase their products in an interactive way Toys “R” Us. Those brands can then manage their in-store experiences and give customers the options to buy things in the store, or direct them to buy online.
“I think there is an interesting mash up between experiential retail that b8ta has been perfecting in its store with those hands-on experiences,” Tru Kids Brands CEO Richard Berry told TechCrunch. “Having the ability for brands to showcase things and give them online experiences too.”
This joint venture comes after Tru Kids Brands announced the return of Toys “R” Us in February, following the toy store shuttering its operations in the U.S. last year. For b8ta, it seems to have found a niche with struggling retailers. Last June, Macy’s acquired a minority stake in b8ta and used it to enhance some of its spaces. That came during a time when Macy’s was closing a bunch of its stores.
With Toys “R” Us, b8ta saw this as an opportunity to expand into the kids category.
“As you may recall, we had mentioned we were interested in taking our business model and our approach to designing stores in other categories,” b8ta CEO Vibhu Norby told TechCrunch. “Last year, we took a serious interest in the kids space. Around the same time, we heard the news aout what happened at Toys ‘R’ Us and thought it was interesting.”
Fast forward a bit to when Norby was introduced to Berry, and that’s when they landed on the idea for a joint-venture to operate Toys “R” Us in the U.S. Next year, the companies will open additional locations in high-traffic areas throughout the U.S. To date, b8ta has raised $39 million in funding from Macy’s, Sound Ventures, Khosla Ventures and others.
EBay said today it is buying a 5.5% stake in e-commerce marketplace Paytm Mall as the global firm makes another push to gain footprint in India’s fast-growing e-commerce market.
The two firms did not disclose financial terms of the deal, but a source familiar with the matter told TechCrunch that EBay has invested between $150 million to $200 million in Paytm Mall at a valuation of $3 billion, up from under $2 billion last year. Paytm Mall had raised about $650 million prior to today’s announcement, the source said.
The agreement will see more than a million products of EBay be made available for purchase to users on Paytm Mall, Vijay Shekhar Sharma, founder and CEO of Paytm said in a statement. “We will jointly select the inventory we want to bring here. It will be done in a month’s time,” he added. EBay will continue to operate its e-commerce site in India, the company said.
The deal could strengthen Paytm Mall’s position in India, where it competes with Walmart -owned Flipkart, and Amazon India. Online retail sales in India are expected to grow to about $72 billion in three years, according to research firm eMarketer.
Paytm Mall, which is backed by SoftBank, Alibaba, Ant Financial, and SAIF Partners, reported GMV sales of $188 million in 2018. In last one year, sales at the e-commerce arm of One97 Communications, which also runs Paytm wallet, has lost momentum after it cut down the lofty offers it was bandying out to customers, according to an Economic Times report.
Like Amazon and Flipkart, Paytm Mall operates on an inventory-led model in India, but in recent months it has shifted its focus to offline-to-online and online-to-offline models, wherein orders placed by customers are serviced from local brand stores. A second source told TechCrunch that Paytm Mall intends to aggressively grow its non-inventory based models. Paytm Mall claims to have over 100,000 seller partners on its platform.
“We are deeply committed to India and believe there is huge growth potential and significant opportunity in this dynamic market,” said Jooman Park, Senior Vice President of EBay’s APAC business. “This new relationship will accelerate our cross-border trade efforts in a rapidly growing market, providing hundreds of millions of Paytm and Paytm Mall customers with access to EBay’s unparalleled selection of goods.”
Facebook is leaning on fears of China exporting its authoritarian social values to counter arguments that it should be broken up or slowed down. Its top executives have each claimed that if the U.S. limits its size, blocks its acquisitions or bans its cryptocurrency, Chinese company’s absent these restrictions will win abroad, bringing more power and data to their government. CEO Mark Zuckerberg, COO Sheryl Sandberg and VP of communications Nick Clegg have all expressed this position.
The latest incarnation of this talking point came in today’s and yesterday’s congressional hearings over Libra, the Facebook-spearheaded digital currency it hopes to launch in the first half of 2020. Facebook’s head of its blockchain subsidiary Calibra, David Marcus, wrote in his prepared remarks to the House Financial Services Committee today that (emphasis added):
I believe that if America does not lead innovation in the digital currency and payments area, others will. If we fail to act, we could soon see a digital currency controlled by others whose values are dramatically different.
WASHINGTON, DC – JULY 16: Head of Facebook’s Calibra David Marcus testifies during a hearing before Senate Banking, Housing and Urban Affairs Committee July 16, 2019 on Capitol Hill in Washington, DC. The committee held the hearing on “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations.” (Photo by Alex Wong/Getty Images)
Marcus also told the Senate Banking Subcommittee yesterday that “I believe if we stay put we’re going to be in a situation in 10, 15 years where half the world is on a blockchain technology that is out of reach of our national-security apparatus.”.
This argument is designed to counter House-drafted “Keep Big Tech Out of Finance” legislation that Reuters reports would declare that companies like Facebook that earn over $25 billion in annual revenue “may not establish, maintain, or operate a digital asset . . . that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function.”
The message Facebook is trying to deliver is that cryptocurrencies are inevitable. Blocking Libra would just open the door to even less scrupulous actors controlling the technology. Facebook’s position here isn’t limited to cryptocurrencies, though.
The concept crystallized exactly a year ago when Zuckerberg said in an interview with Recode’s Kara Swisher, “I think you have this question from a policy perspective, which is, do we want American companies to be exporting across the world?” (emphasis added):
We grew up here, I think we share a lot of values that I think people hold very dear here, and I think it’s generally very good that we’re doing this, both for security reasons and from a values perspective. Because I think that the alternative, frankly, is going to be the Chinese companies. If we adopt a stance which is that, ‘Okay, we’re gonna, as a country, decide that we wanna clip the wings of these companies and make it so that it’s harder for them to operate in different places, where they have to be smaller,’ then there are plenty of other companies out that are willing and able to take the place of the work that we’re doing.
When asked if he specifically meant Chinese companies, Zuckerberg doubled down, saying (emphasis added):
Yeah. And they do not share the values that we have. I think you can bet that if the government hears word that it’s election interference or terrorism, I don’t think Chinese companies are going to wanna cooperate as much and try to aid the national interest there.
WASHINGTON, DC – APRIL 10: Facebook co-founder, Chairman and CEO Mark Zuckerberg testifies before a combined Senate Judiciary and Commerce committee hearing in the Hart Senate Office Building on Capitol Hill April 10, 2018 in Washington, DC. Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. (Photo by Chip Somodevilla/Getty Images)
This April, Zuckerberg went deeper when he described how Facebook would refuse to comply with data localization laws in countries with poor track records on human rights. The CEO explained the risk of data being stored in other countries, which is precisely what might happen if regulators hamper Facebook and innovation happens elsewhere. Zuckerberg told philosopher Yuval Harari that (emphasis added):
When I look towards the future, one of the things that I just get very worried about is the values that I just laid out [for the internet and data] are not values that all countries share. And when you get into some of the more authoritarian countries and their data policies, they’re very different from the kind of regulatory frameworks that across Europe and across a lot of other places, people are talking about or put into place . . . And the most likely alternative to each country adopting something that encodes the freedoms and rights of something like GDPR, in my mind, is the authoritarian model, which is currently being spread, which says every company needs to store everyone’s data locally in data centers and then, if I’m a government, I can send my military there and get access to whatever data I want and take that for surveillance or military.
I just think that that’s a really bad future. And that’s not the direction, as someone who’s building one of these internet services, or just as a citizen of the world, I want to see the world going. If a government can get access to your data, then it can identify who you are and go lock you up and hurt you and your family and cause real physical harm in ways that are just really deep.
These are of course legitimate questions, but we don’t hear so much about China, which combines astonishing ingenuity with the ability to process data on a vast scale without the legal and regulatory constraints on privacy and data protection that we require on both sides of the Atlantic . . . [and this data could be] put to more sinister surveillance ends, as we’ve seen with the Chinese government’s controversial social credit system.
In response to Facebook co-founder Chris Hughes’ call that Facebook should be broken up, Clegg wrote in May that “Facebook shouldn’t be broken up — but it does need to be held to account. Anyone worried about the challenges we face in an online world should look at getting the rules of the internet right, not dismantling successful American companies.”
If we in Europe and America don’t turn off the white noise and begin to work together, we will sleepwalk into a new era where the internet is no longer a universal space but a series of silos where different countries set their own rules and authoritarian regimes soak up their citizens’ data while restricting their freedom . . . If the West doesn’t engage with this question quickly and emphatically, it may be that it isn’t ours to answer. The common rules created in our hemisphere can become the example the rest of the world follows.
You could break us up, you could break other tech companies up, but you actually don’t address the underlying issues people are concerned about . . . While people are concerned with the size and power of tech companies, there’s also a concern in the United States about the size and power of Chinese tech companies and the … realization that those companies are not going to be broken up.
WASHINGTON, DC – SEPTEMBER 5: Facebook chief operating officer Sheryl Sandberg testifies during a Senate Intelligence Committee hearing concerning foreign influence operations’ use of social media platforms, on Capitol Hill, September 5, 2018 in Washington, DC. Twitter CEO Jack Dorsey and Facebook chief operating officer Sheryl Sandberg faced questions about how foreign operatives use their platforms in attempts to influence and manipulate public opinion. (Photo by Drew Angerer/Getty Images)
Indeed, China does not share the United States’ values on individual freedoms and privacy. And yes, breaking up Facebook could weaken its products like WhatsApp, providing more opportunities for apps like Chinese tech giant Tencent’s WeChat to proliferate.
But letting Facebook off the hook won’t solve the problems China’s influence poses to an open and just internet. Framing the issue as “strong regulation lets China win” creates a false dichotomy. There are more constructive approaches if Zuckerberg seriously wants to work with the government on exporting freedom via the web. And the distrust Facebook has accrued through the mistakes it’s made in the absence of proper regulation arguably do plenty to hurt the perception of how American ideals are spread through its tech companies.
Breaking up Facebook may not be the answer, especially if it’s done in retaliation for its wrong-doings instead of as a coherent way to prevent more in the future. To that end, a better approach might be stopping future acquisitions of large or rapidly growing social networks, forcing it to offer true data portability so existing users have the freedom to switch to competitors, applying proper oversight of its privacy policies and requiring a slow rollout of Libra with testing in each phase to ensure it doesn’t screw consumers, enable terrorists or jeopardize the world economy.
Resorting to scare tactics shows that it’s Facebook that’s scared. Years of growth over safety strategy might finally catch up with it. The $5 billion FTC fine is a slap on the wrist for a company that profits more than that per quarter, but a break-up would do real damage. Instead of fear-mongering, Facebook would be better served by working with regulators in good faith while focusing more on preempting abuse. Perhaps it’s politically savvy to invoke the threat of China to stoke the worries of government officials, and it might even be effective. That doesn’t make it right.
Amid worker protests and antitrust investigations, Amazon’s Prime Day sales event carried on as usual — and that means it again set new records for the online retailer. This time, Amazon says Prime Day 2019 was bigger than both Black Friday and Cyber Monday combined, as Prime members purchased more than 175 million items during the event.
While last year’s Prime Day 2018 became the biggest sales day in Amazon history, it’s getting harder to directly compare one Prime Day sale with another, because Amazon keeps stretching them out.
Prime Day 2019, for example, was a full 48-hour sale, up from 36 hours last year and 30 hours the year before.
What we are able to tell, however, is that people will continue to shop as long as there are bargains being offered. During Prime Day 2018’s 36-hour sale, Prime members bought 100 million items. During this year’s 48-hour sale, members purchased over 175 million items. (Neither calculation includes Whole Foods sales.)
Amazon has also succeeded in making Prime Day bigger than its Black Friday online sales, thanks to its deep discounts — often at cost or below — on its own hardware devices, like the popular Echo speakers or Fire TV.
This year’s two-day sale was larger than Black Friday and Cyber Monday 2018 sales put together, Amazon says.
The retailer also notes that Prime Day was the biggest sales event for Amazon devices. Again, the top-sellers worldwide continued to be the Echo Dot, Fire TV Stick with Alexa Voice Remote, and the Fire TV Stick 4K with Alexa Voice Remote. The Echo Dot and Fire TV Stick were top-selling devices yesterday, and it’s not surprising to see them again win this title as they have for several years in a row.
The Echo Dot, in particular, hit its lowest-ever price point of $22 and was bundled in with some other Alexa device deals, almost as a giveaway.
“We want to thank Prime members all around the world,” said Amazon CEO Jeff Bezos, in a statement. “Members purchased millions of Alexa-enabled devices, received tens of millions of dollars in savings by shopping from Whole Foods Market and bought more than $2 billion of products from independent small and medium-sized businesses. Huge thank you to Amazonians everywhere who made this day possible for customers.”
In addition, Amazon claims a record number of U.S. Prime members shopped the site during Prime Day. But given the sale length and the growth in membership — there are now over 100 million worldwide members — this is not the most difficult milestone to achieve.
In the U.S., Prime member bought more than 100,000 lunchboxes, 100,000 laptops, 200,000 TVs, 300,000 headphones, 350,000 luxury beauty products, 400,000 pet products, 650,000 household cleaning supplies, and more than one million toys, says Amazon. They also bought over 200,000 LifeStraw Personal Water Filters and 150,000 Crest 3D White Professional Effects Whitestrips Kits, and saved “tens of millions” by shopping Amazon-owned Whole Foods.
Other top sellers in the U.S. included the Instant Pot DUO60 and 23andMe Health + Ancestry kits.
Amazon also sold millions of smart home devices, including iRobot Roomba 690 Robot Vacuum, MyQ Smart Garage Door Opener Chamberlain MYQ-G0301, and Amazon Smart Plug. It doubled the sales of the Ring and Blink devices, as well as Fire TV Edition TVs, versus last year, when comparing a two-day period. It sold 6x the number of eero devices compared with any other prior sale. And it sold more than ever Fire tablets, Kindle devices, and Alexa with screens (Echo Show and Echo Show 5.)
The largest and most important aspect to Prime Day is not ultimately the sales themselves, but the Prime memberships. This locks in consumers to Amazon’s e-commerce ecosystem for a year, and gives Amazon a chance to win their loyalty when it comes time to resubscribe.
This year, Prime Day’s effect on new subscriptions also improved, with Amazon signing up more new Prime members on July 15 than on any other day ever, and July 16 nearly hit that milestone as well.
In total, Amazon says Prime members worldwide saved over a billion dollars on purchases, and millions of items shipped in one day or faster.
Uber is launching a new shopping app with commerce partner Cargo, a startup it signed an exclusive global partnership with last year. The app will feature items curated by Uber including products like Nintendo Switch, Apple hardware, Away luggage, Glossier cosmetics and more, and will be available to download for Uber riders making trips in cars that have Cargo consoles on board. The Cargo app will also provide in-ride entertainment, including movies from Universal Studios available to purchase for between $5 and $10 each (with bundle discounts for multiple movies), which are then viewable in the Movies Anywhere app.
Uber riders will also benefit by receiving 10 percent of their purchase value back in Uber Cash, which they can then use either on future trips, or on other purchases made through the Cargo app while riding. Uber drivers also benefit, earning 25 percent of the value of items purchased from the Cargo Box in-car, and an additional $1 for each first purchase by a passenger through the new app.
Riders just need to grab the iOS or Android app and then scan the QR code located on the Cargo Box in their driver’s car. Cargo’s app only allows purchases while on the trip, and then the item will be automatically shipped to a rider’s home address for free with an estimated delivery time of between two and five business days.
This tie-up is a natural evolution for Uber’s business – the company hosts millions of riders every week, and many of those are taking relatively long trips to and from airports and other transit hubs, which provides ample opportunity to get them buying stuff or watching purchased content. Cargo, in which Uber has some equity stake, has a good opportunity to figure out how best to make the most of those trips.
This is hardly without precedent – airlines have attempted to capture consumer interest in the skies with onboard duty-free and other sales, as well as content for purchase. The big question will be whether Uber and Cargo together can provide enough additional purchase incentive vs. riders just opening the Amazon app or whatever other commerce options they have available on their own personal devices to make it a sustainable extension of their business.
Amazon has agreed to make a raft of changes to the business terms it offers sellers on its marketplaces following an intervention by Germany’s Federal Cartel Office (FCO).
The regulator instigated an investigation in November last year after receiving a large number of complaints from sellers pertaining to Amazon’s German marketplace, amazon.de: The largest of the company’s five European marketplaces.
Among the changes the ecommerce giant has agreed to make are amendments to its liability provisions towards sellers to bring it into line with European standards for b2b relations, and changes to account termination and blocking to remove its unlimited right to do so without justification — meaning ordinary account terminations will in future require 30 days notice.
In a statement, Amazon said:
We are making several changes to the Amazon Services Business Solutions Agreement to clarify selling partner rights and responsibilities. The changes will become effective August 16th. 58% of the physical gross merchandise sales on Amazon are from third-party sellers, and we’ll continue working hard, investing heavily, and inventing new tools and services to help our selling partners around the world reach new customers and grow their business.
The company has also agreed to remove exclusivity of court of jurisdiction, meaning European sellers with a dispute against it may not only be able to instigate legal proceedings in Luxembourg but could, under certain conditions, be able to take it to a domestic court in future.
Other changes include reductions to confidentiality requirements Amazon has used to bind what sellers can say about it in public; product information rights and quality requirements; and over product reviews and seller ratings.
The new business terms, which will come into effect in 30 days times, will apply not just to all Amazon’s European marketplaces but also to its marketplaces worldwide, including in North American and Asia.
In a press release detailing what the FCO bills as the “far-reaching improvements” it has obtained in Amazon’s terms for sellers, it confirms the amendments conclude its proceedings against the company.
“The amendments address the numerous complaints about Amazon that the [FCO] received from sellers,” said president, Andreas Mundt, in a statement. “They concern the unilateral exclusion of liability to Amazon’s benefit, the termination and blocking of sellers’ accounts, the court of jurisdiction in case of a dispute, the handling of product information and many other issues.
“With our proceedings we have obtained far-reaching improvements for sellers active on Amazon marketplaces worldwide. The proceedings are now terminated.”
Also today Reuters reports that Austria’s regulator has also dropped a separate competition investigation of Amazon’s business as a result of the amended business terms.
Despite settling probes by EU Member States, Amazon is still facing antitrust scrutiny in the region, with the European Commission today announcing a formal investigation of how it handles merchant data.
The pan-EU competition regulator has the power to levy major fines if it determines the bloc’s rules have been broken, as well as to order a cessation of any infringing behavior — backed by the threat of additional fines for continued violation.
The FCO notes it refrained from placing further requirements on Amazon regarding the rules for product reviews in today’s settlement in light of this ongoing Commission inquiry, as well as in view of a current sector inquiry it’s conducting into online user reviews. So there could be further changes to Amazon’s terms coming down the pipe as a result of ongoing investigations.
New EU rules intended to regulate the fairness and transparency of online platform businesses are also looming — and likely concentrating minds at Bezos HQ — having been agreed by EU institutions earlier this year.
The platform regulation will likely come into force across Europe before the end of next year.
European regulators have announced a formal antitrust investigation of Amazon’s use of data from third parties selling on its ecommerce platform.
Commenting in a statement, competition commissioner, Margrethe Vestager said: “European consumers are increasingly shopping online. Ecommerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”
The move is not a surprise as Amazon was already on the radar of Vestager’s department.
Last fall it emerged the regulator was making preliminary enquiries about Amazon’s use of third party sellers’ data — to try to determine whether or not merchants selling on its platform are being placed at a competitive disadvantage vs the products Amazon also sells as a consequence of its access to their data.
Dual sided platforms — that both host sellers on a marketplace and sell stuff themselves — raise competition-related questions about what is done with third parties’ data, she said then.
Based on its preliminary fact-finding the Commission said today that Amazon “appears to use competitively sensitive information — about marketplace sellers, their products and transactions on the marketplace”. Although it’s worth emphasizing that this is a preliminary finding and does not prejudice the outcome of the formal probe.
The Commission said its in-depth investigation of Amazon’s practices will focus on:
the standard agreements between Amazon and marketplace sellers which allow its retail business to analyse and use third party seller data — saying that, in particular, it will focus on “whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition”
the role of data in the selection of the winners of the ‘Buy Box’ and “the impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection”. The Commission notes that the ‘Buy Box’ is “displayed prominently” on Amazon and “seems key for marketplace sellers as a vast majority of transactions are done through it”
The Buy Box — an example of which can be seen in the below screengrab — refers to a coveted section of the Amazon website where consumers who are viewing a product can click to add it to their shopping cart.
Seller/s who win placement in the box likely gain an advantage over competing sellers of the product.
Responding to the Commission’s announcement of a formal probe, an Amazon spokesperson sent us this statement: “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”
On both sides of the Atlantic regulators are fast dialling up their scrutiny of the tech sector. Although Europe has led the charge — with Vestager spearheading a number of investigations into tech giants during her tenure as competition chief, including probes of Google and Apple, as well as Amazon.
Earlier this year EU institutions also reached agreement over new regulations designed to boost transparency around online platform businesses and curb unfair practices to support traders and other businesses that rely on digital intermediaries for discovery and sales.
The new fairness and transparency rules online platforms are likely to come into force in the EU next year.
Amazon’s Prime Day continues to gain competition from rival retailers piggybacking on the annual event with their own sales. Ahead of this year’s Prime Day, RetailMeNot had forecast that this year’s sale would see competition from 250 retailers. Today, the firm upped this figure to over 300, saying it found that more retailers than earlier estimated have decided to run their own counter-sales.
As of 9 AM on the second day of Prime Day — Tuesday, July 16, 2019 — RetailMeNot says it has counted over 300 unique retailers running Prime Day-related offers. This is up from the 275 retailers it had uncovered yesterday afternoon, and up from the 250 it had forecast.
For comparison’s sake, Prime Day 2018 saw competition from 194 retailers; the year before that, just 119. And only 27 retailers ran counter sales back in 2016.
The rival sales come from retailers both large and small and are targeting online shoppers with aggressive deals, flash sales, free shipping offers, and other promotions. These sales extend across all categories and retailer segments, the report also notes.
Free shipping — which is one of Amazon Prime’s biggest draws — is a common offer from the Prime Day rival sales. Retailers are either lowering their free shipping minimums or touting free shipping “with no membership” needed, to counter Amazon’s plan to woo subscribers to join its free shipping service and perks program, Amazon Prime.
Many retailers are also using messaging that includes words and phrases that appeal to e-commerce deal hounds, like “Cyber” (13% of retailers used) or “Black Friday” — e.g. “Black Friday in July” — which 32% of retailers used. But even more are directly copying from Amazon, as 38% used the word “Prime” in their messages to consumers.
Some retailers even went for clever variations on the word “Prime” itself — like Joann Fabric’s “Primo Days,” for example. Meanwhile, ULTA’s deals on beauty primers were referenced as “up to 50% Off Primer Days” while West Elm noted several “Reasons to Love West Elm, (Primarily) Today.”
Already, the e-commerce market in the U.S. is feeling the impact from Amazon’s sale. According to Adobe, large retailers have already seen a 64% increase in their e-commerce revenue, compared with a typical Monday. It also predicts Prime Day 2019 will push total U.S. e-commerce sales to over $2 billion, when it all wraps.
Whether or not the sale is still paying off for Amazon as expected with all this new competition remains to be seen, however.
Kevin Krim is EDO's President & CEO. His 21-year career has spanned search, social and TV advertising across start-ups and major companies like Yahoo and NBCUniversal. Sebastian Chiu is EDO's Chief Data Scientist. He earned his undergraduate and post-graduate degrees from Harvard, working previously as a data scientist at Dropbox.
One of the most-discussed plot twists in recent advertising has been the pivot of Direct-to-Consumer (DTC) brands to linear TV. These data-driven, digital-first players are expanding well beyond Facebook and Instagram—and becoming serious players on the largest traditional medium in advertising.
A January 2019 Video Advertising Bureau study found that in 2018, 120 DTC brands collectively spent over $2 billion in TV ads—up from $1.1 B in 2016. 70 of those 2018 advertisers ran TV ads for the first time.
But while we know that they’re advertising on TV, what may be less discussed is whether they’re succeeding on television—and what strategies they use to achieve their success.
At EDO, we have a unique and differentiated ability to measure how DTC advertisers perform on TV by tracking incremental online searches above baseline in the minutes immediately following individual TV ad airings as viewers translate their interest in advertised brands and products directly into online engagement with them.
By measuring incremental search activity across 60 million national TV ad airings since 2015, we are able to effectively isolate the effects of TV ad placement and creative decisions that are most likely to cause online engagement.
We ran the numbers on DTCs as well as advertisers in various other categories to better understand how DTCs specifically are succeeding in TV ads—and what DTCs who are considering TV advertising can do to achieve success on TV.
The DTC revolution is a quintessential David and Goliath story. In vertical after vertical, small, digital-native upstarts are changing the game and overtaking major brands. Does that story play out on TV as well—or is TV advertising one area where DTC marketers have finally met their match?
To answer that question, EDO looked at how effectively TV ads elicited viewer activity since September 2018 across eight major industry categories including DTC. Guided by historical ad performance across billions of ads, we rated ad performance based on how closely the DTC ads came to meeting the benchmark volume of brand-related online activity in the minutes following each TV ad airing.
We index each industry accordingly—giving an index value of 100 to an ad that meets benchmark standards, and below-par ads getting a score under 100 while higher-scoring ads receive a score over 100. We chose to set our index baseline of 100 to the average Consumer Packaged Good (CPG) ad since it is such a large and broad ad category. Our results are as follows:
It was the perfect storm when CEO and Founder Liam Reynolds finally decided to start TrueUp, a data-driven growth marketing agency/consultancy based in London. After decades of working for large creative advertising agencies, Liam quit his job right around the beginning of Silicon Valley’s growth hacking trend and plunged headfirst into running growth for early-stage startups.
TrueUp has since evolved from a one-man shop into an award-winning agency with a team of dedicated data, paid marketing and conversion specialists. Learn more about how they collaborate with clients and help them develop short- and long-term growth frameworks.
TrueUp’s approach to growth marketing:
“Rather than just saying ‘Look at these amazing results we’ve achieved,’ we would say, ‘Look, these are your growth opportunities, this is the process you need and here’s the framework unlock your true potential,’ We would build business models around this to show the opportunity in numbers, revenue and ROI.
Our approach to growth is anchored in delivering the right message to the right target audience in the right channel at the right time. It sounds simple but we’re amazed at how wrong people get this.
So we’ve created our own bespoke methodologies and frameworks to really explore and identify these hidden killer messages that drive action. We’ve built our own tools that allow us to do a lot of high-tempo, high-intensity testing.
It’s quite common that we have 500 to 600 tests running concurrently on Facebook for any given client. We’re continuously testing, learning, iterating, improving. As a result we’ve achieved some amazing results for our clients.”
Advice to founders:
“We approached True Up to help us establish and scale a UK paid marketing function. The team was highly professional from their initial pitch through the end of the project.” Maninder Saini, SF, International Operations Manager, Quizlet, Inc.
“For earlier stage startups, it’s to focus on achieving product-market fit and having awesome user experiences before worrying about growth. We worked with and mentored a lot of startups that immediately jump to, “Look I need to get X number of customers in X months.” However their products/services are often seriously lacking. This creates very weak foundations for growth. So their efforts would be better spent on creating products that genuinely meet a customer need. Once they’ve achieved product-market fit, it’s to communicate benefits not features. There’s always at least one killer message that cuts through but more often than not it’s hidden and not what the founders think it is. So a structured test program to explore this is also very much needed!”
Below, you’ll find the rest of the founder reviews, the full interview, and more details like pricing and fee structures. This profile is part of our ongoing series covering startup growth marketing agencies with whom founders love to work, based on this survey and our own research. The survey is open indefinitely, so please fill it out if you haven’t already.
Interview with TrueUp CEO & Founder Liam Reynolds
Yvonne Leow: Tell me about how you got into growth marketing and why you decided to start TrueUp.
Liam Reynolds: I started my career at a data marketing company called Dunnhumby. They were famous for managing the data science and intelligence behind TESCO’s Club Card, a very large loyalty program in the UK.