BY JEFF BEER1 MINUTE READ

To call R/GA an ad agency is a bit misleading. Sure, it’s created award-winning ad

work for brands like Nike, Beats and Samsung, but over the years the company has
also branched out to include a venture practice, business consultancy, design and
more. In an industry that’s quickly and constantly changing thanks to technological
innovation and consumer behavior, R/GA chairman and CEO Bob Greenberg sees
self-disruptionas a key business operating principle, one that has served the company
well in the past and will ensure its survival in the future.

Speaking at the Fast Company Innovation Festival, Greenberg outlined how this
strategy has always been a part of the company. Founded in 1977 as a
computer-assisted filmmaking company, R/GA has evolved beyond motion graphics
and a digital studio, into an interactive agency, and now a consulting and ventures
practice, all while creating award-winning work for brands around the world.

[Photo: Jeff Beer]“Disrupting the agency business is something we feel

pretty confident in. We’re helping clients grow, and we do it through
connected communication and connected design, but we always have to
explain that we’re very interested in storytelling,” said Greenberg.
“It shouldn’t be because we’re talking about digital things, that
we’re not interested in storytelling. I think we’re very evenly balanced
throughout our agency capabilities around the
world with systematic designers and storytellers.”

The company works well outside the traditional ad agency purview—it has an
ongoing tech venture program partnership with the L.A. Dodgers, for instance–while
still pushing boundaries in marketing work with projects like a Twitter series for
Converse starring Miley Cyrus and Game of Thrones‘ Maisie Williams. For
Greenberg, the key is to never view the company as a finished product.

Related: What Don Draper Taught This Ad Agency Not To Do

“At best, we like to think of ourselves as an 80% company because we feel that if
you’re 100% you’d be like the advertising business,” he said. “That’s what makes the
advertising business fall into the deconstructionsituation that’s been happening now
for a couple of years. There’s nothing new, particularly, in outbound advertising,
marketing communications that needs to be developed. It’s been 50 or 60 years, and
they’ve done a wonderful job, but we’re looking for things that we’re 40% into or
50% into. We’re very far from our 80%, and we like to say we’re always a work in
progress.”
ABOUT THE AUTHOR

Jeff Beer is a staff editor at Fast Company, covering advertising, marketing, and brand
creativity. He lives in Toronto

TWO-----Since 2011, Netflix CEO Reed Hastings has sat on

Facebook's board, and as Facebook's plans to fund TV-style
shows take form, many are naturally curious what ideas
Hastings shares with Mark Zuckerberg - and whether Netflix
and Facebook will ever be seen as head-to-head competitors.
In the past few months, as Zuckerberg has articulated
Facebook's new approach to premium video, one thing has
become clear: The pair share an important belief about the
future of high-quality digital video. Both Hastings and
Zuckerberg appear committed to the idea that, with global
digital scale, TV-quality shows can be sustained primarily by a
single big revenue stream. For Netflix, that stream is
subscription revenue, with ads completely cut out of the
equation. For Facebook, it's advertising.

That's significant because it goes against the broad wisdom of

the pay-TV industry, which uses both subscriptions and
advertising dollars to prop itself up. It also stands in contrast
to some digital competitors like Hulu, who are trying to
replicate a model similar to pay-TV in the digital realm.

Facebook TV
Right now, Facebook is busy readying its first slate of TV-like
shows , which the social mediabehemoth wants to unveil in
mid-June. And while Facebook is putting up cash this time
around, the company's executives have been explicit that in the
long run, Facebook wants its premium video ecosystem to be
entirely sustained by advertising revenue.
"The goal is going to be creating some anchor content initially
that helps people learn that ... the video tab [is] a great
destination where they can explore, and come to Facebook
with the intent to watch the videos that they want," Zuckerberg
said during Facebook's last earnings call with investors. "And
then the long-term goal is actually not to be paying for specific
content like that, but doing a revenue share model once the
whole economy around video on Facebook is built up."

Facebook thinks that it can make its advertising

offering compelling enough that media companies will make
TV-quality video for its platform without being paid directly by
Facebook to do so. Facebook will simply have to split the ad
revenue with them.

There is evidence that YouTube thinks its advertising products

will be able to support that level of shows as well. On
Thursday, YouTube announced that it would fund half a
dozen new shows, anchored by big-name celebrities like Ellen
DeGeneres, Kevin Hart, and Katy Perry. Significantly,
YouTube is going to have these shows run on its main,
advertising-supported service, and not on its $9.99-a-month
subscription service, YouTube Red.

"Five years ago, 85% of all original series were ad-supported,"

Robert Kyncl, YouTube's business chief, said at an the event on
Thursday. "This year, that number has fallen to just over
two-thirds. And with significantly more content coming to
subscription services, that shift is accelerating. So we see these
shows as a way for us to partner with [advertisers] to buck this
trend."

For both Facebook and YouTube, the coming months will be a

test to see whether that thesis is correct, and a premium set of
shows can lure a premium set of advertisers.

Forever ad-free
Netflix has taken the complete opposite route, and has
remained committed to keeping advertising off its service.
"No advertising coming onto Netflix. Period," Hastings wrote
on Facebook in 2015, in response to reports that Netflix was
testing ads. "Just adding relevant cool trailers for other Netflix
content you are likely to love." The company has given no
indication that its thinking has changed since then.

But as Netflix has introduced more and more original shows,

and its spending on content has ballooned to $6 billion, some
have questioned whether Netflix will eventually have to
introduce some sort of advertising. Still, Netflix's thesis seems
to be that it can continue to grow its user base to offset those
costs, and that the potential reach of the digital realm will let
the company climb to sustainability.

That said, with Netflix predicting its negative free cash flow
will be $2 billion in 2016, and that it will continue to burn cash
for "many years," that is a thesis that may not be completely
tested for awhile.

TV, but online

It's not a sure thing for either Netflix or Facebook that standing
on one major revenue leg will be able to sustain the kinds of
shows you'd see on cable TV. (Netflix could diversify beyond
subscriptions and into things like merchandise , without
having to get into advertising, but subscriptions will likely
remain the major pillar.)

Other companies looking to disrupt TV are going the more

traditional pay-TV route, with a combination of advertising
and subscription.

It's not surprising that Hulu, which is owned by big TV

companies, is trying to keep that business model intact. The ad
load might be lower than cable, but Hulu is still firmly in the
dual revenue camp. And those betting on new online "skinny
bundles," which are essentially cable packages delivered over
the internet, are also hoping the subscription-ad combo can
make it across the digital divide. That includes services like
Sling TV, DirecTV Now, YouTube TV, Sony's Vue, and many
more to come.
It's good to note that everyone could be right.

Advertising alone could let Facebook and YouTube support

TV-quality shows, while Netflix and other streaming services
could rely on only subscriptions, or some combination of
subscriptions and ads. Or they could be wrong, and the Golden
Age of TV could falter as the digital business models fail to
recreate the huge budgets that powered a whopping 455
scripted shows in 2016.

Three------Netflix has a potential standalone billion-dollar

revenue opportunity selling merchandise based on its popular
shows, according to RBC's Mark Mahaney.
A billion dollars!

" We view this as a highly reasonable step by Netflix to further

promote and market its original content and other offerings,"
analysts led by Mahaney wrote in a note to clients.

Netflix would be following the example of Disney and Time

Warner, who have found many ways to spin a hit show or
movie into merchandise gold.
Right now, Netflix's plans are in their infancy, and Mahaney
described that billion-dollar potential as a long way down the
road. But Netflix has already conducted one test with "Stranger
Things" merch at Hot Topic, and seems to be looking to expand
in the area.

"We see this as a development that signifies the coming of

scale of an increasingly ubiquitousglobal entertainment
company," RBC wrote.

In February, Netflix posted a job listing looking for an exec to

head up licensing for "books, comics, gaming toys, collectibles,
soundtrack and apparel," as Bloomberg unearthed .
The posting focused on how merchandise can be used to keep
interest in a show going.

"We are pursuing consumer products and associated

promotion because we believe it will drive meaningful show
awareness/buzz with more tangible, curated ways to interact
with our most popular content," Netflix said in the job posting .
"We want licensed merchandise to help promote our titles so
they become part of the zeitgeist for longer periods of
time. Last but not least, merchandising and promotion will be
used as a marketing tactic to capture member demand
and delight our member community."

As Netflix content boss Ted Sarandos said last year: "Kids

carrying the backpack sells the show."

Four----------------Facebook's main
source of revenue is slowing down, but that
isn't spooking investors yet
ALEX HEATHJUL 26, 2017, 07.18 PM
FacebookLinkedinTwitteroogle+Reddit

FacebookFacebook CEO Mark Zuckerberg is starting to pull the levers on other

growth drivers, like Instagram and video ads.
For the past year, Facebook has warned Wall Street that the
growth of its main revenue driver, News Feed ads, will slow
down meaningfully going into the second quarter of 2017.

Now that Facebook is set to report its Q2 earnings after

markets close on Wednesday, all eyes are on what are believed
to be its next cash cows: Instagram and video ads.

Facebook has yet to disclose the revenue it makes from

Instagram, but eMarketer predicts that the app will rake in
$3.92 billion in global ad revenue in 2017, up 106.3% from last
year. To put that number into perspective, eMarketer
has forecasted that Snapchat will generate just $770 million in
revenue in 2017.
Facebook is also spending to ramp up its original shows effort ,
which is expected to launch in its app's redesigned video tab in
the coming weeks. The social network plans to
eventually monetizeits exclusive shows and other videos
through mid-roll ads, which are currently being tested with a
handful of publisher partners.

Shares of Facebook are up roughly 40% this year,

demonstrating assurance from investors that the company
can diversify the sources of its revenue growth and continue to
grow its user base.

"We see Street estimates likely moving higher for 2018 as the
company ramps monetization in Instagram including Stories
ads, rolls out more FB original video content, begins
to monetizeMessenger, and sees slightly lower
than forecast opex and capex growth," Deutsche Bank analyst
Lloyd Walmsley wrote in a note to clients last week.

Now that Facebook has coasted to 2 billion monthly users ,

investors will also want to hear about the company's plans for
growth in emerging markets, whether it be through
internet-beaming drones or partnerships with local carriers.

The key numbers for Q2

Here are the expected numbers for Facebook's Q2 earnings,
based on analyst projections compiled by Bloomberg:

 EPS (GAAP): $1.31

 Revenue: $9.2 billion

FIVE--------------Roku
has more users than Google
Chromecast and Amazon Fire TV - and Apple
is well behind them all
JEFF DUNNJUL 26, 2017, 07.01 PM
FacebookLinkedinTwitterGoogle+Reddit

Business Insider/Jeff DunnRoku is on the rise, according to a new study.

Roku is set to topple Google, Amazon, and Apple as the most
used connected-TV brand in the US, according to a new study
from research firm eMarketer .
The streaming company will have 38.9 million monthly users
in the US this year, eMarketer says. That's slightly ahead of
Google's Chromecast dongles, which will have 36.9 million
monthly users, and Amazon's Fire TV devices, which will have
35.8 million monthly users. eMarketer said Chromecast was
the market leader last October.

Well behind those three is Apple. The iPhone maker's Apple

TV streaming boxes are tipped to have 21.3 million monthly
users in the US this year.

That gap could only widen in the coming years: eMarketer

predicts Roku will have as many as 69 million monthly users in
the US, while Apple TV will have just over 25 million. Google
and Amazon are predicted to have 64.6 million and 62.6
million, respectively, which would keep this a three-horse race.
Apple/Business Insider
It's worth noting that these figures are estimating the number
of users for each platform, not how many devices each
company has sold. Roku said earlier this month that it now has
15 million monthly active accounts; the study considers that
many of those accounts have multiple people using them.
It's also not a huge surprise that the four major players rank
the way they do. The study notes that Roku's advantage is how
widely available it is, a strategy that's possible because the
company isn't incentivized to push a specific platform the way
Apple, Amazon, and Google are. (Amazon uses its Fire TV
devices to strongly push users toward its Prime Video service,
for instance.) Roku has also grown out its "Roku TV" program ,
in which various TV manufacturers bake the Roku interface
right into their TV sets. Amazon recently started a similar
program.

Roku, Amazon, and Google also sell streaming devices at much

lower prices than Apple does. While the Apple TV starts at
$149, the other three brands have streaming dongles that start
in the $30-40 range, with higher-end devices available as you
go up the price ladder. Those higher-end devices also include
advanced features like 4K and HDR support; Apple TV, despite
costing more, does not. ( Though it might soon .)

It's likely that Apple makes a higher profit off each streaming
device sale than its peers, and the company did patch up a
major Apple TV gap by announcing Prime Video
support earlier this year. But it seems safe to say that Apple
isn't convincing people to pay the premium for its streaming
devices the way it has with its smartphones.

Roku, meanwhile, will likely welcome the study as it reportedly

plans for an IPO later this year.

SIX--------TheSkimmhas hired a digital

advertising veteran to help the media startup
court Madison Avenue
MIKE SHIELDSJUL 26, 2017, 07.17 PM
FacebookLinkedinTwitterGoogle+Reddit


 TheSkimm

 TheSkimm has hired ad veteran Brandon Berger

as its first chief business officer
 The plan is to help the newsletter company
unlock different revenue streams
 The media company recent success in pushing
book sales is being viewed as a replicable model
TheSkimm is looking to move beyond the inbox.

The newsletter startup has named digital advertising veteran

Brandon Berger chief business officer, with the aim of helping
the company expand its business beyond its daily newsletter,
which reaches 6 million subscribers a day.

Berger was most recently chief digital officer worldwide for the
ad agency Ogilvy & Mather. Previously he served a stint as vice
president of digital innovation at the ad agency holding
company MDC Partners.

TheSkimm was founded in 2012 by Danielle Weisberg and

Carly Zakin, two roommates who quit their jobs at NBC once
they saw an opening to reach millennial women with a daily
news roundup.
The company's expansion process is already underway. It has
already rolled out a video production arm as well as a
subscription offering and partnerships with companies like
Starbucks and Netflix.

The plan is to take things up a notch.

"We've had this great consumer narrative," said Weisberg of

theSkimm newsletter. "It was a very clear brand that people
fell in love with. We almost created that before we even created
the business. Now, five years in, we're a full-fledged media
company with multiple revenue streams. So it was exactly the
right time to develop new revenue streams and take the
company further."
That's where Berger comes in. The ad vet said he's
been mulling his next move for some time and was connected
to theSkimm founders a few years ago at a dinner.

In his mind, few media companies have established such a

strong connection with readers with so much upside, he said.

"They own 6am," said Berger, who is moving from Chicago to

New York to take on the new role. "There are very few brands
in the world that have the love and trust and relationship with
this customer that we have," he said. "We can go so deep and
guide this customer. We want to take advantage of that."

For example, theSkimm has recently started a book

recommendation service that has proven to drive sales. Berger
and his two new bosses see the potential to apply that formula
to several other ad categories.
"TheSkimm moves product," said Weisberg. "We know how to
connect with our audience."

The startup has raised $18 million to date, including $8

million last year in a series B round led by 21st Century Fox.