• The US government is warning that attempting to change the $5 billion FTC settlement with Facebook could result in a far worse deal.
• Critics have savaged the settlement, arguing it is ineffectual, and non-profit EPIC has sought to get involved in the legal process.
• US attorneys counter that there's no guarantee that the ultimate outcome of this could produce better results than the FTC managed.
• Visit Business Insider's homepage for more stories.

The US government has a warning for critics of the Federal Trade Commission's $5 billion settlement with Facebook over privacy issues: Don't be so sure a better outcome is possible.

The FTC recently reached a multi-billion dollar settlement with the Californian social media giant over alleged violations of a 2011 consent order concerning its handling of users' data. It's a record-breaking fine — but critics have argued that it is ultimately ineffectual, amounting to only a fraction of Facebook's annual profits, and it's not accompanied by any more fundamental structural changes to the company's business model.

The Electronic Privacy Information Center (EPIC), a privacy-focused non-profit organization, is one such critic. It filed a motion to intervene in the case, arguing the settlement "is not adequate, reasonable, or appropriate"— and now US government lawyers are hitting back.

In a court filing on Monday, US attorneys argue that EPIC is seeking "to intervene to place itself in the government's shoes because it wishes the Stipulated Order were different." They argue that EPIC doesn't have proper grounds to get involved in the case, and also make an interesting argument as to the risks of any such meddling from third parties.

"Contending that '[t]he proposed settlement fails to safeguard the interests of Facebook users' ... EPIC presumably wants the Court to reject the proposed settlement in favor of some other penalty against Facebook that would—in EPIC's opinion—safeguard Facebook users' interests," the filing reads.

"But it is pure conjecture that rejecting the proposed settlement would lead to a different or better outcome that would 'safeguard the interests of Facebook users' in the manner EPIC's prefers. Indeed, rejecting the settlement could yield multiple other outcomes in litigation or later settlement far worse for consumers."

In other words, the US government is arguing: If the settlement went to court the ultimate outcome might be significantly worse for ordinary consumers than it is now.

To be sure, there's always a risk when you choose to litigate a matter in court. But it's worth noting that the settlement the FTC ultimately struck with Facebook is markedly weaker than options that were at one point being considered. The FTC explored the possibility of fining Facebook tens of billions of dollars, and holding CEO Mark Zuckerberg personally accountable, but that did not ultimately happen.

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Read more:

• Mark Zuckerberg's personal security chief accused of sexual harassment and making racist remarks about Priscilla Chan by 2 former staffers
• Facebook says it 'unintentionally uploaded' 1.5 million people's email contacts without their consent
• Years of Mark Zuckerberg's old Facebook posts have vanished. The company says it 'mistakenly deleted' them.
• Car-bomb fears and stolen prototypes: Inside Facebook's efforts to protect its 80,000 workers around the globe

Join the conversation about this story »

NOW WATCH: Jeff Bezos is worth over $160 billion — here's how the world's richest man makes and spends his money

• Gin Lane, an ad agency that has helped take direct-to-consumer upstarts including Harry's and Hims to market, is spinning off into a multi-brand conglomerate of direct-to-consumer brands called Pattern.
• Pattern raised $14 million in funding from investors including RRE Ventures, Primary Ventures and Kleiner Perkins to focus on home and wellness companies.
• It is launching with a line of cookware products called Equal Parts that also will promote cooking as a habit.
• Click here for more BI Prime stories.

Gin Lane no longer wants to just help other direct-to-consumer companies grow. The creative and design agency that helped launch DTC upstarts including Harry's and Hims to market wants a piece of the burgeoning DTC pie for itself.

Read More:Investors from Greycroft, Science, Lerer Hippeau, and others who control millions of dollars name the direct-to-consumer startups that will blow up this year

The specialist agency is shutting shop and retiring its brand after more than a decade and creating a new company called Pattern that's focused on direct-to-consumer brands geared toward home and wellness.

The company has raised $14 million in funding led by RRE Ventures, Primary Ventures, and Kleiner Perkins.

Pattern wants to build a 21st century model for consumer brands

Pattern said all its brands will be founded on the idea that home is a sanctuary from addiction to work and technology, which has led many people to burnout. To that end, its first brand is a cookware line called Equal Parts, which is designed to promote enjoyment of home life with things like tips to make cooking more fun, in addition to cooking products themselves.

"With more than 10 years of experience, we know how businesses should be built in the direct-to-consumer era," Nick Ling, co-founder and CEO of Pattern and former CEO of Gin Lane, told Business Insider. "We believe we can have a more direct and meaningful impact on our generation's lives and wanted to challenge ourselves and the rest of the industry to build brands for today's consumers."

Pattern will have to compete with other DTC upstarts along with established brands 

Creating a conglomerate of in-house DTC brands may seem like a natural evolution for Gin Lane, which has been at the forefront of the DTC boom and has also had equity stakes in clients like Quip and Smile Direct Club in exchange for its services.

Read More:A new breed of ad agency is cashing in on the direct-to-consumer boom, and big agencies are scrambling to catch up

But the DTC landscape has also gotten crowded, with thousands of companies trying to break into categories from mattresses to eyewear. Pattern will not only have to contend with other upstarts but established marketers like Unilever and P&G trying to fight back with their own disrupter brands.

Still, Ling and his co-founder and chief creative officer Emmett Shine are convinced they have cracked the formula for success because they know how to scale DTC brands. They say they've had conversations and live tests with hundreds of consumers and that they plan to regularly get feedback from consumers, which will give them an edge.

"We didn't want to reinvent the wheel in terms of what we're already good at," said Shine. "We wanted to coalesce around something bigger, and more personal to us."

SEE ALSO: Investors from Greycroft, Science, Lerer Hippeau, and others who control millions of dollars name the direct-to-consumer startups that will blow up this year

Join the conversation about this story »

NOW WATCH: Burger King's CMO explains why the biggest risk in marketing is not taking one

• PR agencies are worried about consulting companies eating their lunch, just as they've been doing with ad agencies.
• PR firms traditionally relied on inaccurate measurement, so now they're adding data services to show their work actually delivers.
• Omnicom's FleishmanHillard is announcing a partnership with data marketplace Memo to provide clients with data like how many people read an article and for how long.
• Another PR giant, Edelman, is announcing a deal with software company Cision to apply digital ad-like measurement to earned media.
• Click here for more BI Prime stories.

Similar to ad agencies, PR agencies are threatened by consulting companies, so they're fighting back by stepping up their efforts to measure their work.

FleishmanHillard, which is part of the ad holding company giant Omnicom, today is announcing a partnership with data marketplace Memo to measure how earned media performs for clients.

Memo gets article-specific data directly from prestige publishers like The Washington Post and Condé Nast that show how many people viewed an article and how long they spent with it. Memo says it's in contract with other major PR agencies to provide this data.

Read more:Huge consulting firms are coming after the ad agency business — here's how agencies are fighting back

Another PR giant, Edelman, is announcing today a deal with software company Cision to boost its performance-focused services. Dustin Johnson, head of US transformation and innovation at Edelman, said clients will get access to data from programmatic ad sales company MediaMath that shows how many actual people read an article and what their demographic makeup is — the same kind of data an advertiser would get if they ran a paid ad campaign. 

The PR landscape is about to get more competitive

Behind these two announcements is a realization that life is getting more competitive for traditional PR agencies, and it's about to get tougher for their core business, earned media. Some of the key reasons:

• The PR industry has grown as companies face intensified pressure to take a stance on social issues and with the rise of digital media outlets giving companies new outlets for exposure. 
• At the same time, the rise of new entrants and advertising agencies trying to diversify their services by acquiring PR, marketing and creative firms have turned up the competition for traditional PR firms, according to a report on the industry by IBISWorld.
• Consulting firms like Deloitte and Accenture are encroaching on the advertising business, and some insiders believe a move into PR's bread and butter, earned media, can't be far behind.  
• Traditionally, marketers have measure earned media, or articles that mentioned them, based on their potential audience rather than their actual reach. But the potential audience data is widely acknowledged to be highly inaccurate, which makes it hard for marketers to justify the expense of PR services to their CFOs.
• Marketers have social monitoring tools that measure the reach of earned media on social platforms like Facebook. But as Facebook's traffic to publishers has declined, those tools are telling less and less of the audience story, said Eddie Kim, the founder and CEO of Memo. "We're seeing Facebook traffic tank and search becoming more meaningful," Kim said. "Less than 10% of an article's views come from social media."
• Companies like Casper and Warby Parker that built themselves on social media by selling directly to consumers are entirely optimized around sales, so to get their business, PR agencies need to show their services can help lead to business outcomes.

PR agencies are betting on data to stay ahead

The hope for PR agencies is that bringing more transparency to their work will help them stay ahead of the curve.

"The hypothesis is, earned media and audiences connected to them are high, high value," Johnson said of Edelman's deal with Cision. "Marketers and salespeople care deeply about these audiences. The competitive set is the marketing services, the agencies, the consulting companies. That's where this elevates us, where earned media is much more connected to sales."

Ephraim Cohen, general manager of FleishmanHillard in New York, said he's seeing more clients ask for earned media in requests for proposals and evaluate firms based on their earned media capabilities.

"Memo presents an opportunity to say, you've known for a while that the earned campaigns are some of the most valuable you can do; now you know exactly how valuable," he said. "Because you know the impact and true cost, you know how to invest in it. That's a business and game-changer. It's going to scare the hell out of a lot of people. We're an industry that's never had this level of accurate media measurement before."

It's unknown how greater transparency will impact PR budgets

In theory, the ability to get better performance data for earned media will lead marketers to spend more on PR, where spending growth has lagged that of marketing, Johnson said. "The hypothesis is, proving the value of media will unlock more spend," he said. 

It's possible, of course, that the new data show that earned media in fact reaches a smaller audience than marketers previously thought. The hope for PR firms is that their clients always knew that but at least now they can keep spending on earned media with confidence that they know what it'll get them.

Kim's bet is that by using Memo's data, clients will be impressed by how much time people spend reading articles compared to their fly-by behavior on social media feeds.

"There's a risk it isn't as much as you wanted," Kim said. "But that's what's missing right now. The data will give substantially more credit to content than it currently gets. The downside is nominal compared to the upside."

SEE ALSO: NBCUniversal and CBS are building teams to go after direct-to-consumer dollars, but startups still think TV is too expensive

Join the conversation about this story »

NOW WATCH: Anheuser-Busch's CMO on what many companies get wrong when it comes to being purpose-driven

• Two shootings in Walmart stores in the last week have killed at least 24 people in El Paso, Texas, and Southaven, Mississippi.
• Security experts say that Walmart and other retailers need to take a close look at their policies to see whether they can make improvements to prevent similar incidents in the future. 
• Training in-store workers to identify red flags and swiftly react in crises is one of the most powerful solutions. 
• Visit Business Insider's homepage for more stories.

After deadly shootings in two Walmart locations left at least 24 people dead, many are wondering what comes next for retailers. 

Workers at Walmart and other retail chains have taken to social media to express fear that returning to work could put them in the line of fire. Experts say Walmart and other retail giants — from Target to fast-food chains like McDonald's — are now likely seriously considering how to prevent another tragedy. 

Read more:Retail workers say they're scared to go to work after 2 shootings this weekend at a Texas Walmart and a bar in Ohio

"It would be hard to find any establishment that hosts the public this week not thinking about what else should be done," hospitality industry consultant Bjorn Hanson told Business Insider. 

Walmart and other major retailers can do more to address potentially catastrophic violence, according to Hanson and two other experts who spoke with Business Insider. With more than 8,700 deaths linked to gun violence so far in 2019, major stores, restaurants, and other public places are under pressure to keep customers and employees safe. 

In 2017, 94 retail workers and 29 restaurant workers were killed in homicides on the job, according to Bureau of Statistics data. For comparison, 85 people in protective service — police officers, security guards, correctional officers — died by homicide the same year.

Walmart did not respond to Business Insider's request for comment, but a company representative told Bloomberg it wouldn't change its policies around the sale of guns or ammunition.

And, the company is presented with a unique challenge. 

Stores are designed to bring shoppers in, not keep potentially dangerous people out. People may be willing to go through security at an airport, but many would likely balk at doing the same at a Target or Costco. Many stores are open constantly, 24 hours a day, seven days a week, making them one of the most accessible places in America. 

Employees become the first line of defense

As companies seek solutions, in-store workers become the first line of defense.

Employee training on identifying and reacting to potential shooters has become required in the airline industry and increasingly standard at hotels over the last five years, Hanson says. Similar training on identifying dangers and reacting properly is now becoming more common in other industries.

"I wouldn't be surprised if this gets rolled into the types of training that companies offer, whether it's fire, earthquake, any other type of emergency that employers, employees need to be aware of," attorney Neama Rahmani said. 

According to experts, employee training is one of the best concrete steps that companies can take. Workers identifying red flags can prevent shootings before they occur. And, if workers feel prepared to take action when they sense something is wrong, it can cut down the gap between an incident's beginning and the police arriving.

Up-to-date training can minimize bloodshed in an emergency situation, allowing employees to act quickly and confidently. In a crisis situation, customers tend to look to employees for direction, according to Mike Clumpner, the president of security consulting firm Threat Suppression.

"People don't know what to do when the boogeyman shows up — and the boogeyman is real," Clumpner said. 

However, Clumpner said that some companies resist training because of the cost of instructing new employees in an industry with high turnover rates. The issue is especially concerning during the holiday shopping season, he says, when stores are crowded and staffed with new employees. 

Avoid knee-jerk reactions — but revisit policies

Retailers have options beyond employee training, though different stores require different strategies. 

Hanson says that companies are increasingly working with local law enforcement. Visible cameras, different store models, and a security presence can make certain sites less attractive to shooters. Companies need to take threats from disgruntled employees seriously, Hanson says, as well as encourage workers to report any of their own concerns about current or former coworkers.  

But, experts warn against knee-jerk reactions in the face of mass shootings. Changes need to be carefully considered and certain security measures — such as requiring all customers to walk through a metal detector — would be more inconvenient than useful. 

"There can never bee too much security," Hanson. "[But] too much security that isn't responsive to the threat is not helpful." 

Ultimately, it's impossible for any company to guarantee safety. 

"It is very difficult to prevent attacks like this when someone is very determined to commit homicidal mass violence," Clumpner said. 

At Walmart, Clumpner says that the first priority should be caring for employees. Walmart should reexamine policies and be transparent with employees about doing so. Even if there was no way to prevent the two shootings, doing so shows the company is taking responsibility and cares about employees and customers. 

"Take a moment to reflect on the lives that are lost," Clumpner said. "Make sure your employees have a moment to debrief." 

If you work for a retailer or restaurant chain and have a story to share about gun violence on the job, email retail@businessinsider.com. 

SEE ALSO: Walmart says it won't change gun sales policies in wake of 2 deadly shootings at its stores

Join the conversation about this story »

• Business Insider is launching a list of CMOs to watch. We want to hear from you.

• Please submit your ideas via this survey by August 16.

We're seeking nominations for Business Insider's inaugural list of CMOs to watch. We want to hear from you.

Please submit your ideas via this survey by August 16.

This list is separate from Business Insider's annual compilation of the 25 most innovative CMOs in the world.

Rather than established CMOs, we are looking for rising marketing stars who may not have gotten widespread recognition for their work. They could be first-time marketing chiefs or people who have had the top marketing role at their company or brand for less than 12 months.

They don't necessarily hold the CMO title, but they should be the senior-most marketing executives who are affecting change in their own companies and the industry at large.

Criteria and methodology

These executives are bringing fresh perspectives to marketing; helping their companies navigate an evolving industry; and innovating on a daily basis.

They could be pioneering new ways of melding data and marketing; building in-house capabilities; creatively reaching consumers; or cutting costs in new ways. They could be behind a challenger brand's ascent.

The ranking will be determined by factors including the breadth of the marketing executive's role and responsibilities; the scope of the changes they've introduced; and the person's impact on the company's performance and marketing and advertising industry broadly.

We will determine the list based on our reporting and the nominations we receive. 

Again, please submit your nominations here.

Please include your contact information and as many details as possible on why your nominee deserves to be recognized. The deadline for submissions is August 16. We'll aim to publish the list at the end of the month.

Join the conversation about this story »

NOW WATCH: Burger King's CMO explains why the biggest risk in marketing is not taking one

• The entrepreneur and YouTube creator Marina Mogilko spoke with Business Insider about which factors play into how much ad revenue each of her three successful YouTube channels generates.
• Mogilko said her 255,000-subscriber business channel, "Silicon Valley Girl," makes more per view in Google AdSense, through YouTube's Partner Program, than her channel "Linguamarina," which has 1.5 million subscribers.
• Mogilko broke down why the one channel makes more per view than the other and said her business-related channel gets a higher rate because the content is more appealing to advertisers than her other two channels.
• Click here for more BI Prime stories.

How much advertising revenue two YouTube channels generate can vary greatly depending on the type of videos, even if the same creator is behind both of them.

YouTube's Partner Program lets creators earn money by monetizing their channels with video ads, which bank a certain amount of money depending on factors like a video's watch time, length, and viewer demographic.

Business Insider spoke with the entrepreneur and YouTube creator Marina Mogilko about what she typically expects her three successful YouTube channels to make each month in Google AdSense monetization. 

Mogilko said her 250,000-subscriber business channel, "Silicon Valley Girl," makes more per view in Google AdSense, through YouTube's Partner Program, than her language channel "Linguamarina," which has 1.5 million subscribers. 

Mogilko broke down why one channel makes a higher rate than the other and said one of the major factors is that her business channel is more appealing to advertisers than her other two channels. 

Comparing channels 

Mogilko started her main channel, "Marina Mogilko," in 2014 as a way to document her life in Russia and her move to the US. In 2016, she started her second channel, Linguamarina, in which she teaches people English and American culture. 

Mogilko lives in San Francisco and is the cofounder of a travel agency, LinguaTrip. In 2018, she launched her third channel, Silicon Valley Girl, which is about her daily business operations and building a personal brand online. 

What's unique about her channel Silicon Valley Girl is that although it has the smallest number of subscribers of the three (255,000 subscribers), the channel has a higher average CPM rate, or cost per 1,000 video views, than the others. 

Mogilko makes an average $10.73 per every 1,000 views on Silicon Valley Girl, she told Business Insider. Her channel Linguamarina, with 1.5 million subscribers, makes an average of $4 per 1,000 views. Her third channel makes even less than that, at $2.71 per 1,000 views.

Mogilko isn't the only creator to see high CPMs on business videos.

Kevin David, an entrepreneur who has a YouTube channel with 600,000 subscribers where he also posts business-related videos, told Business Insider he made as much as $50,000 in Google AdSense revenue from a single YouTube video

It's about location and content 

"People who watch this content aren't kids or students,"Mogilko said of her business channel. "They are people who already started their careers and want transition in their career."

The important factors that have determined these vast differences in CPM rates have been her viewers' locations and the type of content of her videos, she said.

Based on the Silicon Valley Girl channel, Mogilko will earn an average of $19.95 per 1,000 views for viewers in Australia, $19.33 in the US, and $19 for viewers in the UK. 

The lowest CPM rate she has is from Turkey, which for her Silicon Valley Girl channel is roughly $1 per 1,000 views. 

Her video, "10 HIGH PAYING JOBS YOU CAN LEARN AND DO FROM HOME," with 1.5 million views, made $10,000 in AdSense, she said.

Mogilko said she knew of some YouTube creators who label their content as "educational" or "business" to raise their CPM rates, but according to her experience, YouTube's algorithm is smart enough to know whether a video is educational or not. 

For more about how much YouTube pays its creators, check out the interview with YouTube influencer Shelby Church on Business Insider Prime:

YouTube star Shelby Church breaks down how much money a video with 1 million views makes her

Join the conversation about this story »

NOW WATCH: Tobey Maguire's 'Spider-Man' is a classic, even though it's one of the more under-appreciated superhero films

• The next phase of the streaming wars is heating up as legacy media brands like Disney, WarnerMedia, and NBCUniversal prepare to launch their own video services.
• Disney will be first out of the gate this year with a family-focused service, Disney Plus. WarnerMedia is readying HBO Max for next spring. And Comcast's NBCUniversal is gearing up to release a streaming platform in April.
• Here's everything we know about these platforms so far, including the programming, pricing, and launch plans.
• Visit Business Insider's homepage for more stories.

After years of losing TV subscribers to streaming services like Netflix, TV giants Disney, WarnerMedia, and NBCUniversal are entering the streaming wars head on.

The three legacy media brands are each preparing to launch streaming services in the next year.

Disney's forthcoming service will court families and flesh out the media conglomerate's three-pronged streaming strategy, which also includes Hulu and ESPN Plus. WarnerMedia's offering is banking on the HBO brand, and building on it with original series and programming from Warner Bros. and DC. And NBCUniversal is looking to its library programming for its streaming complement to parent company Comcast's cable service.

Here's everything we know about these services so far. Business Insider will continue to cover them as plans develop.

Disney Plus

Disney will be the first out of the gate with the November launch of its family-friendly streaming service, Disney Plus.

The platform will rely heavily on flagship Disney brands, including Marvel, Star Wars, and Pixar, as well as National Geographic, which Disney recently acquired along with other assets from 21st Century Fox.

Disney is leveraging Marvel, in particular, to get the streaming service off the ground. It's making Marvel series exclusively for Disney Plus that will be pivotal to the plots of future films in the Marvel Cinematic Universe, which has grossed more than $22 billion at the box office across 23 movies.

Disney Plus will also have a robust collection of Disney films, which could make it indispensable to parents.

The service will be available for a subscription fee, and will not include advertising.

Disney said it will bundle Disney Plus at launch with its sports hub ESPN Plus and the ad-supported version of Hulu, which is Disney's newly controlled home for adult programming.

The company plans to start marketing Disney Plus in August, and offer attendees to its biannual fan convention, D23, first access to the platform.

US launch date: November 12, 2019

Price:

• $6.99 per month, or $69.99 per year
• $12.99 per month for bundle including Disney Plus, ESPN Plus, and Hulu with ads

Programming highlights: Star Wars spinoff "The Mandalorian"; Marvel series "The Falcon and the Winter Soldier,""WandaVision,""Loki,""Hawkeye," and "What If..."; Disney Channel spinoffs like "High School Musical: The Musical: The Series"; new and old releases from Disney's movie studios, as the rights becomes available, like "Avengers: Endgame" and "The Lion King."

Read more about Disney's streaming strategy: 

• How Disney's marketing advantage over Netflix will be its secret weapon in the streaming war
• Disney execs explain how ESPN Plus is helping build a weapon to fight Netflix, and what they've learned from Facebook

HBO Max

With Disney leaning on family-friendly franchises, AT&T's WarnerMedia appears to be going all-in on its adult network HBO.

The company's upcoming streaming service will be called HBO Max. It will feature programming from HBO, as well as other WarnerMedia brands like Warner Bros., DC Entertainment, TBS, TNT, and CNN. HBO Max will have original series and movies, some of which may tie into WarnerMedia titles off of the platform. The series, "Dune: Sisterhood," for example, is based on Frank Herbert's "Dune" universe, which Warner Bros. is also adapting for film.

HBO Max will have a back catalog of old Warner Bros. movies and TV shows, like "Friends" and "The Fresh Prince of Bel Air," as well, to keep subscribers interested in between new releases. It also has a licensing deal with BBC Studios to stream "Doctor Who" and other shows on the service.

Unlike Netflix, HBO Max will also have live sports and news, though likely not at launch.

"You should assume that, ultimately, HBO Max will have live elements," Randall Stephenson, chairman and CEO of AT&T, said on the company's second quarter conference call. "Those live elements — both unique live sports, premium sports, the ones we just went through, NBA, Major League Baseball, NCAA basketball  — those are going to be really, really important elements for HBO Max. The same with news." 

WarnerMedia has talked about a few different business models for HBO Max. At launch, it's expected to be available for a subscription fee, and without ads. Some programming, such as the live sports and news, will probably feature advertising down the line.

US launch date: Spring 2020

Price: TBD; likely more than the $14.99 per month that HBO Now costs

Programming highlights: Original shows "Dune: Sisterhood"; "Love Life," a romantic comedy starring Anna Kendrick; an animated "Gremlins" series, and a revival of "Gossip Girl." Upcoming HBO programming like Stephen King's "The Outsider"; "The Undoing," from David E. Kelley and starring Nicole Kidman; and "The Nevers," from Joss Whedon. New dramas from the CW including "Batwoman" and "Katy Keene." DC Universe series like "Doom Patrol." And reruns of Warner Bros. shows like "Friends" and "The Fresh Prince of Bel Air," and BBC Studios shows like "Doctor Who" and "Top Gear."

Read more about WarnerMedia's streaming strategy: 

• HBO Max will be WarnerMedia's answer to Netflix, coming in the spring of 2020
• A WarnerMedia exec describes the challenges of uniting HBO, Turner, and Warner Bros. and launching the company's new innovation lab

NBCUniversal's untitled streaming service

NBCUniversal's as-of-yet-untitled streaming service will have a built-in subscriber base when it launches next April. The company plans to make the service free, with ads, to Comcast's more than 21 million US cable-TV subscribers, and subscribers to other pay-TV bundles. Others will have a pay a subscription fee to access the service.

NBC hasn't revealed much about the content lineup for its streaming offering. We know it'll have "The Office," because NBC is yanking it from Netflix to stream exclusively on the forthcoming service starting in 2021. NBC also saved the sitcom "A.P. Bio." from cancellation, by renewing it for a third streaming season.

NBC's platform could also have content from Sky Studios, NBCUniversal UK-based sister company, which is focused on European productions, such as the mini-series "Chernobyl," which was made with HBO.

The company is building the streaming service on the back of Sky's Now TV platform technology. NBCUniversal CEO Steve Burke recently said more than 500 people are working on the service.

US launch date: April 2020

Price: Free for pay-TV subscribers; TBD for everyone else

Programming highlights: Old NBC shows like "The Office." Original series like "A.P. Bio," the first two seasons of which aired on NBC's US broadcast network.

Join the conversation about this story »

NOW WATCH: Pixar has a secret formula for making perfect films. Here are 5 rules that make its movies so special.

Hello,

Welcome to the Advertising and Media Insider newsletter. First, a PSA: We're publishing our first list of rising CMOs later this summer, and we want your ideas. Read the criteria and how to make a nomination by August 15 here.

On to the news: We're seeing the rise of direct brands impact the marketing and advertising world in new ways. For one:

A leading direct-to-consumer ad agency behind upstarts including Harry's and Hims just raised $14 million to spin off into its own multi-brand DTC company

Ad agencies don't want to just help bring direct brands to market anymore. One, Gin Lane, the agency behind direct-to-consumer upstarts Harry's and Hims, is relaunching itself as a company called Pattern that will make DTC brands itself. The competition's fierce, but Pattern's founders told senior reporter Tanya Dua that they believe with 10 years of experience, they know what they're doing.

DTC brands are also attracting investor fever. Consumer brands have raised more than $3 billion since 2012, about half of it raised in 2018 alone, according to CB Insights data cited by Digiday. Tanya also asked investors what their hot DTC picks are.

Investors from Greycroft, Science, Lerer Hippeau, and others who control millions of dollars name the direct-to-consumer startups that will blow up this year

After the healthy sodas and canned booze, some of the more novel ones to me included companies that sell affordable bathing suits for people of all sizes, personalized migraine treatments, and online classes.

Finally, the direct-to-consumer explosion is touching PR agencies. 

PR agencies are beefing up their data services to keep consulting firms like Deloitte and Accenture from eating their lunch

Companies that built themselves by selling directly to consumers on social media are entirely optimized around sales, so to get their business, PR agencies need to show their services can help lead to business outcomes. PR firms have traditionally relied on inaccurate measurement, so now they're adding data services to show their work actually delivers.

Now, a fun thing: I have to plug this piece of great reporting by entertainment reporter Jason Guerrasio on movie subscription service MoviePass. Jason tells the definitive story of the company's rise and fall— and of the lasting impact it's had on the movie business.

Here's the rest of the Advertising and Media Insider newsletter, where we round up the most interesting stories we covered this past week. (If you got this email forwarded, sign up for your own here.)

Who we're talking to

• I spoke to entrepreneur and marketing vet Joe Marchese, who's been saying for years that advertising is broken, about his new holding company, Attention Capital, that's trying to fix it.
• My colleague Lauren Johnson talked to the new heads of Peer39 about their plans to help advertisers get ready for a privacy-centric world.
• Future of TV reporter Ashley Rodriguez talked to MTV CMO Jacqueline Parkes about how she got its revival of "The Hills" in front of new audiences — with astounding results.
• I talked to Best Western CMO Dorothy Dowling about the company's use of AI to personalize ads. She said the results are crushing the industry average.
• BI reporter Amanda Perelli got YouTuber Marina Mogilko to break down how she makes money on the platform. It varies widely by channel depending on who the audience is.

Here are other great stories from media, marketing, and advertising. (Remember that you need to be a BI Prime member to read most of these. Still haven't subscribed? Use promo code AD2PRIME2018 for a free month.)

Taco Bell's global chief brand officer is leaving the company after 4 years

Discovery's 'Undercover Billionaire' explains how recovering from cancer inspired him to try and turn $100 into a million-dollar business in 90 days on TV

A YouTube creator explains how he made nearly $50,000 in ad revenue from one video, without millions of subscribers

Data firm Lotame is pitching TV ad targeting to marketers to stay ahead of marketing cloud giants Adobe and Salesforce

How YouTube star MrBeast, who has 22 million subscribers, uses keywords and the 'shock and awe' effect to maximize views

Former Snap exec Imran Khan's e-commerce startup Verishop is entering retail with a private-label skincare brand

That's it for this week! What other stories do you want to see more of? Send tips or feedback to me at lmoses@businessinsider.com.

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NOW WATCH: Burger King's CMO explains why the biggest risk in marketing is not taking one

• Last week's shootings put the spotlight back on the gun control debate and also on Walmart.
• Gun control advocates and others called on the country's largest retailer to stop selling guns after its stores were the location of two deadly shootings in the past week.
• While some branding experts said that the retailer was being true to itself by not changing its gun sales policy, others said the company should do more.
• Click here for more BI Prime stories.

After shootings in the past week left at least 24 people dead, the spotlight is back on the gun control debate and also on Walmart.

With shootings at two Walmart locations — one that killed at least 22 in El Paso, Texas, and another one in Southaven, Mississippi — gun control advocates and other people have called on Walmart to stop selling guns.

A corporate employee urged workers to strike on Tuesday to pressure the company to stop selling guns.

But while Walmart tweeted that it was shocked and "praying for the victims, the community and our associates, as well as the first responders," the company said it had no plans to stop selling guns.

Walmart is catering to its base

While Walmart may have alienated some employees and customers with its stance, some branding experts said the retailer would withstand the criticism because it was being true to its brand and that many of its customers believe in gun rights.

"Walmart's core consumer base comes from the overwhelming support of the Second Amendment and gun rights. If they ban firearm sales, they risk alienating that core base," said Eric Schiffer, chairman and CEO of Reputation Management Consultants. "Brands today may be under pressure to take stances of principle, either humanitarian or political. But for Walmart, the Second Amendment is a principled battle line and it is willing to suffer the political blowback from Americans outraged by gun violence."

Deb Gabor, CEO of Sol Marketing, said that the impact of Walmart not stopping the sale of guns on its brand will be negligible if the company demonstrates concern for the shooting victims, their families and the community, and keeps delivering on its low-price positioning.

"Customers who choose Walmart are focused on lower prices and don't necessarily have the luxury of taking their business elsewhere," she said. "Walmart's brand promise of 'Lowest prices. Always.' is what attracts and keeps customers coming back week after week, year after year."

Walmart has shifted its gun sales policies in response to high-profile shootings in recent years. It stopped selling assault rifles in 2015 and raised its minimum gun purchasing age to 21 in 2018, after the Parkland, Florida, shooting. 

'The company is old enough, big enough, and profitable enough' 

But other experts said Walmart could stop selling guns and its business would be fine. They pointed to smaller retailers such as Dick's Sporting Goods, which last year ended the sale of semi-automatic, assault-style rifles and high-capacity magazines after the Parkland shooting.

Walmart and Dick's got more people talking about them when the companies announced policy changes around assault weapons in 2018, polling company YouGov said. There appears to be no negative impact on Walmart's sentiment based on the recent shootings, said a company spokesman.

"The company is old enough, big enough, and profitable enough to do the right thing without fear of a short-term boycott or backlash on social media," said Chris Allieri, founder and principal of Mulbery & Astor. "It also has tremendous power in Washington, both with the president, and with the Republican party — and could easily lobby for universal background checks and take a bold step to stop selling firearms altogether."

Andy Gilman, founder and CEO of CommCore Group, said Walmart's brand is strong enough that it could change its policy and influence other retailers to follow suit.

"When Walmart tells vendors to change any aspect of their product line, they all comply quickly," he said. "Likewise, it can come up with a policy that will change the way that individuals can buy guns."

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NOW WATCH: Burger King's CMO explains why the biggest risk in marketing is not taking one

• Since President Trump tweeted directly to Google CEO Sundar Pichaion Tuesday, making sweeping allegations about the tech giant's suppression of right-leaning content, internal message boards have been mostly quiet on the topic, multiple current employees tell us. 
• One reason for the relative silence, one current Google employee who's helped with employee organizing movements in the past said, is that they've been "encouraging" fellow colleagues not to react publicly. 
• "I feel it's extremely likely that anything anybody says internally on this subject will be shared with the far-right press and spun in a way that reinforces the existing narrative," the employee organizer said. 
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Google's internal message boards are typically buzzing with conversation about hot-button issues involving the company.

But when President Trump tweeted directly to Google CEO Sundar Pichai on Tuesday, making sweeping allegations of political bias by the tech giant (and describing Pichai himself as an ingratiating smooth-talker), Google's employee message boards were strangely calm. 

"I have seen some short remarks, but nothing of substance," one current Google employee, who's helped with employee organizing movements in the past, told Business Insider on Tuesday.

Another current employee said they hadn't heard of anybody on message boards talking about the president's provocative remarks, which were prompted by a "Fox and Friends" interview with former Google employee, Kevin Cernekee, who accused the company of having a conservative bias. 

One explanation for the relative silence, the employee organizer told Business Insider, is that they've been "encouraging" fellow colleagues not to react outwardly.

"I feel it's extremely likely that anything anybody says internally on this subject will be shared with the far-right press and spun in a way that reinforces the existing narrative," the organizer said. "I've been encouraging people not to react."

That narrative — of a liberal Google intentionally silencing conservative viewpoints on its search platform — has been reinvigorated with the president's tweets on Tuesday. Those tweets come on the heel of Cernekee's remarks, which accused the Silicon Valley giant of bias against Trump and explicitly altering the way its service works to block the president winning a second term in 2020. 

"We are watching Google very closely!" Trump warned in one of his tweets. 

But experts say the claims are without merit, and many Google employees privately say they've grown tired of the on-going accusations about the company by right-wing conspiracy theorists.

"I think a politician talking negatively about Google isn't surprising to anyone here," said a third current Google employee. "We're a big target." 

On Tuesday, Google told Business Insider that the statements by Cernekee, who it described as a "disgruntled former employee," were "absolutely false." 

Read more:Trump goes after Google CEO Sundar Pichai in tweetstorm, says the tech giant is being watched 'very closely'

The employee organizer who spoke to Business Insider said that so far, they've only seen messages that acknowledged Trump's tweets from today, rather than any of the impassioned debates that often break out on the corporate channels. The source, however, said there were "thousands of mailings lists so it's hard to be definitive" that the tweets haven't provoked any internal discussions.  

Tweets inspired by Cernekee

Cernekee, who was the subject of a recent profile by the Wall Street Journal, claims that Google fired him in 2018 for his conservative viewpoints. Google said Cernekee's termination came as a result of multiple policy violations, including unauthorized downloads of confidential information.

Cernekee told The Journal he denies those policy violations. He also said in the report that he considers himself a "mainstream Republican" and rejected alt-right viewpoints, including the promotion of white supremacy. 

On Monday, however, The Daily Caller revealed that in 2017, Cernekee had petitioned fellow colleagues on Google's internal message boards to raise money to find the culprit who punched white supremacist Richard Spencer in an on-screen interview. 

"It would be a nice gesture," Cernekee wrote, according to the report. 

"For over a year, I have seen the alt-right try and work their influence at Google, infiltrating mailing lists, infiltrating Google's culture, and even trying to infiltrate Google's product decisions," Mike Wacker, a self-proclaimed conservative and former Google engineer said in a 2018 internal email, obtained by CNBC. Wacker, who was also fired by the tech giant, called Cernekee the "face of the alt-right" at Google. 

Cernekee, who found himself at the center of President Trump's recent tweetstorm, denied the alt-right associations to Business Insider on Tuesday, saying, in part: "These are false and baseless smears from a jealous and vindictive ex-colleague. I have always supported free speech and opposed white nationalism." 

Got a tip? Contact Nick Bastone via Signal or WhatsApp at +1 (209) 730-3387 using a non-work phone, email at nbastone@businessinsider.com, Telegram at nickbastone, or Twitter DM at @nickbastone.

SEE ALSO: The bizarre life of 8chan owner Jim Watkins, the middle-age veteran who decamped to the Philippines and runs a pig farm

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NOW WATCH: Jeff Bezos is worth over $160 billion — here's how the world's richest man makes and spends his money

• Facebook is accusing two app developers of using malware to hijack people's phones to fraudulently click on ads to make money.
• The Californian tech giant announced on Tuesday that it has filed suit against LionMobi and Jedimobi.
• Facebook did not say how many users it believes were impacted, or how much money it thinks the developers have made from the purported scheme.
• Visit Business Insider's homepage for more stories

Facebook is suing two app developers, alleging that they engaged in a scheme to hijack people's phones with malware that could fraudulently click on ads to make money.

In a blog post on Tuesday, Facebook announced that it has filed suit against LionMobi and Jedimobi, app developers based in Hong Kong and Singapore respectively, with claims of "click injection" ad fraud.

The Silicon Valley tech giant claims the two companies launched malicious apps in the Google Play app store that once installed used users' phones to trick Facebook's advertising system into paying out cash to them by pretending to be "real" people clicking on online advertisements.

"The developers made apps available on the Google Play store to infect their users' phones with malware. The malware created fake user clicks on Facebook ads that appeared on the users' phones, giving the impression that the users had clicked on the ads," Facebook said in the blog post.

The companies "generated unearned payouts from Facebook for misrepresenting that a real person had clicked on the ads. The ads were part of Facebook's Audience Network. LionMobi also advertised its malicious apps on Facebook, in violation of our Advertising Policies," the blog post said. 

LionMobi's current apps in the Google Play app store include a battery tool and a phone "cleaner" app, while Jedimobi's offerings include a "Fat Burning Workout" and a calculator.

Facebook did not say how many users it believes were impacted, or how much money it thinks the developers have made from the purported scheme.

The two developers did not immediately respond to Business Insider's request for comment.

Got a tip? Contact this reporter via encrypted messaging app Signal at +1 (650) 636-6268 using a non-work phone, email at rprice@businessinsider.com, Telegram or WeChat at robaeprice, or Twitter DM at @robaeprice. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

Read more:

• Mark Zuckerberg's personal security chief accused of sexual harassment and making racist remarks about Priscilla Chan by 2 former staffers
• Facebook says it 'unintentionally uploaded' 1.5 million people's email contacts without their consent
• Years of Mark Zuckerberg's old Facebook posts have vanished. The company says it 'mistakenly deleted' them.
• Car-bomb fears and stolen prototypes: Inside Facebook's efforts to protect its 80,000 workers around the globe

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NOW WATCH: 7 lesser-known benefits of Amazon Prime

• On Tuesday, the House Committee on Homeland Security requested that 8chan's owner, Jim Watkins, testify regarding the message board's links to multiple mass shootings. 
• The letter comes in the wake of Saturday's mass shooting in El Paso, Texas where the suspect reportedly posted a manifesto on 8chan minutes prior to the attack. 
• Still, based off the House's letter on Tuesday, it looks to be unclear whether Watkins will attend, as the committee didn't seem to have a valid mailing address for the 8chan owner, who reportedly lives in the Philippines.
• Visit Business Insider's homepage for more stories.

The owner of 8chan, the online message board that's been repeatedly linked to mass shootings, was summoned to appear before the House Committee on Homeland Security, but even the Representatives who made the request on Tuesday seem wary that he'll show. 

That's because little is known about Jim Watkins, 8chan's owner, including — it appears — his physical mailing address. 

"Please provide the Committee with current physical contact information for you or your authorized representative in the United States so that you can receive communication from the Committee," the House letter read. 

Watkins, a US Army veteran, is said to have relocated his family in 2004 to the Philippines, where he reportedly lives today — raising pigs and running various websites, including an audiobook company and, 8chan. 

Read more:The bizarre life of 8chan owner Jim Watkins, the middle-age veteran who decamped to the Philippines and runs a pig farm

The letter, which included a Reno, Nevada address belonging to a "Laughlin Associates," was said to be delivered by mail, email, and Twitter. In it, the Committee said it "respectfully requested" Watkins' presence at the hearing. It was not immediately clear what connection the Laughlin Associates address in Reno has to Watkins.

In its tweet announcing the letter, the House Committee "cc'ed" 8chan's Twitter handle in an apparent attempt to make contact with the company. Given that 8chan then retweeted the letter, it appears the company is aware its owner had been summoned. 

The request for Watkins to testify comes in the wake of Saturday's mass shooting in El Paso, Texas which left over 20 people dead. The suspected shooter, a 21-year-old male, reportedly posted a manifesto on 8chan minutes prior to the attack, which described anti-immigrant and white supremacy beliefs. 

"Regrettably, this is at least the third act of white supremacist extremist violence linked to your website this year," the letter read. 

Representatives from 8chan did not immediately respond to Business Insider's request for comment. 

8chan — which was described as as a "cesspool of hate" by the security firm that protected it from cyberattacks, Cloudfare — went offline on Sunday after the security firm terminated its service with the site. The company subsequently tweeted that it may experience some downtime over the following 24-48 hours, but that it would be back online after its technical issues were sorted out. 

As of writing this article, 8chan's message board remains offline. 

8chan's founder, Fredrick Brennan — who's no longer connected to the site and has become an outspoken critic — had words for Watkins in a report this week by the Washington Post. "Do the world a favor and shut it off," he said. 

SEE ALSO: The 'cesspool of hate' message board 8chan was taken offline after being linked to 3 mass shootings this year

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NOW WATCH: Jeff Bezos is worth over $160 billion — here's how the world's richest man makes and spends his money

• Subway announced it is rolling out the the Beyond Meatball Marinara sub at 685 locations in the US and Canada in September.
• The sandwich swaps Subway's classic meatballs for a vegan plant-based alternative made by Beyond Meat. 
• Beyond Meat has penned deals with chains including Dunkin', Del Taco, and TGI Fridays. 
• Visit Business Insider's homepage for more stories.

Beyond Meat's restaurant chain takeover continues with a new Subway partnership. 

On Wednesday, Subway announced it is rolling out the Beyond Meatball Marinara sub in 685 locations in the US and Canada for a limited time starting in September. 

The Beyond Meatball sub is a variation on Subway's classic sandwich with the same sauce and cheese. However, it uses the Beyond Meatball, which was created by the plant-based "meat" maker exclusively for the sandwich chain. 

Read more:Plant-based 'meat' is conquering fast food. Here's where you can get meat substitutes like the Beyond Burger and the Impossible Taco.

"Our guests want to feel good about what they eat and they also want to indulge in new flavors. With our new plant-based Beyond Meatball Marinara sub, we are giving them the best of both worlds," Len Van Popering, Subway's chief brand and innovation officer, said in a statement. 

Beyond Meat has announced deals with chains including Dunkin', TGI Fridays, and Del Taco. 

"It's not that interesting to me that really rich people eat super healthy food. It's not moving the needle," Beyond Meat CEO Ethan Brown told Business Insider of the company's work with restaurant chains. 

Subway has also recently announced new deals with high-profile brands. In the last month, the sandwich chain has launched Halo Top milkshakes and rolled out King's Hawaiian bread at Subway locations. 

SEE ALSO: Dunkin' and Beyond Meat CEOs say they want to 'democratize' plant-based 'meat' with breakfast sandwiches

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NOW WATCH: This animated map shows where Starbucks, Dunkin', and McDonald's coffee comes from

• Arizona Iced Tea's parent company penned a licensing deal with cannabis company Dixie Brands Inc., The Wall Street Journal reports. 
• The iced-tea maker is expected to start selling vape pens, weed gummies, and marijuana-infused beverages.
• Arizona Iced Tea has rolled out some unexpected marketing campaigns recently, including a pop-up selling Arizona Iced Tea-branded Adidas for 99 cents that was shut down by police after two teenagers were assaulted.
• Visit Business Insider's homepage for more stories.

The company behind Arizona Iced Tea is reportedly getting into the marijuana business. 

Arizona Beverage Co. has reached a licensing deal with cannabis company Dixie Brands Inc., Jennifer Maloney reported in The Wall Street Journal on Wednesday. 

"Plans for the Arizona line are in the early stages," Maloney reports. "It is likely to start with vape pens and gummies, followed by a variety of beverages that could include tea, lemonade, soda, coffee or seltzer, officials said." 

Arizona did not immediately respond to Business Insider's request for comment. 

The reported move would make Arizona one of the first big beverage brands in the US to begin selling marijuana.

Beer giants have been eyeing the market, with Constellation Brands and Molson Coors penning deals with cannabis companies. Last year, Heineken's Lagunitas debuted a marijuana-infused sparkling-water beverage in California.

Read more:Marijuana could be the biggest growth opportunity for struggling beverage-makers as millennials ditch beer for pot

While there have been reports of Coca-Cola and PepsiCo considering the space, neither company has made any formal deals with cannabis companies. In June, Brett O'Brien, senior vice president of PepsiCo-owned Gatorade, told industry publication Beverage Digest the company is "not shying away from CBD" while developing its new hydration beverage Bolt24.

"You've got to be willing to try things," Arizona CEO Don Vultaggio told The Journal of the deal with Dixie Brands. "The upside is we're one of the first ones in an emerging space."

Arizona Iced Tea has gotten press for some unexpected marketing moves in recent months.

In May, the company partnered with chef Danny Bowien to create an Arizona Iced Tea-inspired menu served at Bowien's Mission Chinese location in Brooklyn, New York. In July, police shut down a pop-up selling Arizona Iced Tea-branded Adidas for $0.99 after two teenagers were assaulted in the mob of Arizona-loving sneakerheads. 

SEE ALSO: Police shut down an Adidas pop-up selling 99-cent Arizona Iced Tea sneakers after 2 teenagers were assaulted in massive crowds

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NOW WATCH: How lobster went from the 'poor man's protein' to the delicacy we eat today

• When a new Chick-fil-A location opens, sales tend to drop at nearby McDonald's, Wendy's, and Burger King locations, according to a report from Gordon Haskett. 
• In the first six months after a Chick-fil-A opens, customer traffic falls an average of 5.4% at Wendy's, 4.4% at Burger King, and 1.5% at McDonald's locations.
• Chick-fil-A is steadily expanding across the US, becoming the third-largest restaurant in the US by systemwide sales in 2018. 
• Visit Business Insider's homepage for more stories.

As Chick-fil-A expands, other chains are feeling the pressure. 

When the chicken chain opens a new location, foot traffic at McDonald's, Wendy's, and Burger King restaurants in the area drops, according to a Gordon Haskett report that analyzed geolocation data from millions of mobile devices, collected by Alpha Hat. 

In the first six months after a Chick-fil-A opens, customer traffic falls an average of 5.4% at Wendy's and 4.4% at Burger King locations within 1.5 miles of the new restaurant. Nearby McDonald's locations see traffic fall an average of 1.5% in the short term. 

In the second six months, traffic declines tend to improve, with Wendy's down 0.4% and McDonald's down 0.5% on average. However, Burger King's traffic continues to seriously suffer, according to Gordon Haskett's analysis, with traffic falling 3.4% on average in the second six months after a Chick-fil-A opens in the area. 

"Chick-fil-A is increasingly becoming a key investment thesis point for investors looking at the domestic [same-store sales] trends across the quick service segment, and especially for the hamburger players," Gordon Haskett analyst Jeff Farmer writes. 

Calling all fast-food fans:Vote for your favorite and least favorite chains as we search for America's favorite fast food

Farmer notes that Chick-fil-A is one of the few quick-service chains in the US with an annual growth rate in the high-single digits.

Additionally, Farmer notes Chick-fil-A's average unit volumes are the best in the industry, with the average location making $4.6 million a year. For comparison, Burger King's average unit volume is $1.4 million and McDonald's is $2.8 million. 

Chick-fil-A has been steadily expanding across the US in recent years, with plans to open its first store in Canada in Toronto before the end of 2019.

The company has paired its expansion with same-store sales growth, allowing Chick-fil-A to become the third-largest restaurant in the US by systemwide sales in 2018. 

SEE ALSO: Why the 'A' in Chick-fil-A is capitalized

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NOW WATCH: An authentication expert at The RealReal showed us how to spot fake designer accessories

• Equinox and SoulCycle are facing backlash after a report that the brands' chairman is holding a fundraiser for President Donald Trump.
• Stephen Ross, the chairman of the company that owns both brands, is scheduled to host a Trump fundraiser charging $100,000 per ticket this week, The Washington Post reported.
• Now Equinox members and SoulCycle visitors are threatening to cut ties with the trendy fitness brands.
• Visit Business Insider's homepage for more stories.

Equinox and SoulCycle are facing backlash over the brands' chairman's ties to President Donald Trump.

Stephen Ross, a real-estate developer and investor, is planning to host a fundraiser for Trump's reelection on Friday in his New York home in the Hamptons, with tickets costing $100,000, The Washington Post reported.

Ross is the founder and chairman of the real-estate company Related Cos. and the owner of the Miami Dolphins.

Ross' fundraiser has sparked boycott threats from Equinox members and SoulCycle fans. The Related Cos. acquired Equinox in 2005, and Ross sits on the board of directors; SoulCycle is owned by Equinox.

"This Friday the Soul Cycle and Equinox Fitness chairman is throwing a fundraising lunch for Donald Trump's 2020 presidential campaign," #GrabYourWallet founder Shannon Coulter tweeted Wednesday.

"Tickets are $100,000 each. Adding to the list," she added, referring to #GrabYourWallet's influential list of brands for anti-Trump people to boycott.

Read more:People are saying the Tucker Carlson boycotts are a betrayal of free speech. They're wrong.

Others voiced similar concerns on social media, with many people threatening to cancel their Equinox memberships.

Equinox's Instagram page has also been flooded with negative comments about the fundraiser.

"Is it true that the owner of Equinox is a Trump supporter? Say it ain't so!!! I will have to quit," one comment reads.

SoulCycle is also seeing backlash online.

SoulCycle and Equinox released similar statements on Wednesday afternoon, calling Ross a "passive investor" and saying the brands are unconnected with the fundraiser.

"We want to let you know that Equinox and SoulCycle have nothing to do with the event and do not support it," Equinox tweeted. "As is consistent with our policies, no company profits are used to fund politicians." 

In addition to Equinox and SoulCycle, Related Cos. has made major investments in the dessert chain Milk Bar, the celebrity chef David Chang's Momofuku restaurant empire, the fast-casual chain &pizza, and the gym brand Blink Fitness.

Ross has long had ties to the GOP, holding a fundraiser for Jeb Bush in 2016.

He is apparently friendly with Trump, speaking with the president during the controversy over NFL players kneeling during the national anthem to protest police brutality, the New York Daily News reported. Ross, apparently influenced by Trump, decided that the Miami Dolphins would require players to stand.

"I like Donald [Trump]. I don't support everything that he says,"Ross told the Daily News in March 2018.

"Overall, I think he was trying to make a point, and his message became what kneeling was all about. From that standpoint, that is the way the public is interpreting it. So I think that's really incumbent upon us to adopt that."

SEE ALSO: Chick-fil-A's American takeover should terrify Wendy's and Burger King

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NOW WATCH: This animated map shows where Starbucks, Dunkin', and McDonald's coffee comes from

• Logan Paul is one of the most controversial personalities on YouTube, where he has amassed nearly 25 million subscribers across his channels.
• The 24-year-old star is often embroiled in controversy: He filmed a video of a dead body in Japan's "suicide forest," Tased dead rats in another one, and said he was "going gay" for a month.
• Here's how Logan Paul rose to internet notoriety, and the biggest events that have happened in his career as an online creator.
• Visit Business Insider's homepage for more stories.

The past few years have been a roller coaster ride for Logan Paul. 

The 24-year-old social media star built a career off the now-defunct Vine app and later, off of two simultaneous YouTube channels. His Midwestern good looks, slapstick humor, and intricately planned and executed viral videos have earned him millions of dollars and legions of diehard fans. 

But Paul has become embroiled in multiple controversies in the last two years, costing him advertising on YouTube and a movie deal with YouTube Red. 

Here's how Paul went from a 10-year-old making homemade videos in his backyard in Ohio to one of the most famous — and controversial — social media stars in the world:

SEE ALSO: People are getting refunds after paying $50 to watch the 'glitchy' and 'terrible' livestream of wedding between YouTubers Tana Mongeau and Jake Paul

Paul got his start at age 10, posting videos to the internet using an app called Zoosh.

Source: Insider

By high school, Paul transitioned to now-defunct video-sharing app Vine. He started sharing Vine videos that usually included him doing stunts, telling jokes, and playing pranks.

Paul amassed a huge following on the platform. By the time Vine shut down, he had 9.4 million followers.

The Vine app is obsolete now, but Paul's channel still exists online. 

Thanks to his success on Vine, Paul was able to transition to other social media apps like Facebook and Instagram. Advertisers came calling, and Paul began earning hundreds of thousands of dollars in advertising revenue for sponsored posts.

Source: Forbes

Paul dropped out of Ohio University and moved to Los Angeles in 2014 to pursue a career in entertainment.

Source: Business Insider

He began taking acting classes and snagged a few small roles in TV shows like "Law & Order" and "Stitchers." He told Business Insider in 2015 that he hoped to become a household name and appear in R-rated movies. "It's time for me to grow up and expand my brand of comedy," Paul said.

Source: Business Insider

"I want to be the biggest entertainer in the world," Paul said at the time. "That's my deal. I'll do whatever it takes to get that. As many hours as is needed."

Source: Business Insider

Paul began posting videos to YouTube, and now runs two channels — an official channel and a "Logan Paul Vlogs" channel — which have about 5.3 million and 19.7 million subscribers, respectively.

Paul's YouTube channels bring in a lot of money for the star. In 2017, Paul made $12.5 million.

Source: Business Insider

Paul has also started doing his own ad campaigns. He was the face of Dunkin' Donuts' first social media star campaign, appeared in a Hanes ad, and partnered with Pepsi.

Source: Insider

Paul's younger brother Jake also got his start on Vine, and has since gained fame on other platforms.

Jake has nearly 20 million YouTube subscribers, but has also been embroiled in controversy. In 2017, he was accused by his neighbors of turning his neighborhood into a "war zone," and subsequently left his show on Disney Channel.

Source: Deadline, Insider

Most recently, Jake Paul got married to fellow YouTuber Tana Mongeau. Logan Paul was in attendance, and has since made comments hedging that the relationship between the two is fake.

Source: Business Insider, ET Online

Logan Paul, by contrast, remained relatively scandal-free until 2017. In June of that year, Paul appeared at VidCon, a popular convention for teens to see their favorite online creators. Paul hid $3,000 in a secret location and was mobbed by screaming fans, and was filmed being tackled to the ground by security guards.

Source: We The Unicorns

Then, in September, old tweets were unearthed in which Paul perpetuated racist stereotypes about black and Asian men.

Source: Next Shark

Soon after, another scandal hit: In December 2017, Paul posted a video of him and his friends discovering a body in Japan's so-called "suicide forest."

In the video, Paul and his friends were planning to camp in the forest overnight but stumbled upon a corpse hanging from a tree. Paul blurred the face of the body, but he and his friends stood around the corpse and filmed it before leaving the forest.

Outrage over the video was swift, and nearly 200,000 people signed a petition to have Paul kicked off YouTube. He was removed from Google's Preferred Ads program, and a planned YouTube Red movie deal was suspended.

Source: Insider, Business Insider

Soon after, Paul issued an apology for posting the video. "I've never made a mistake like this before," Paul wrote on Twitter. He announced he was stepping away from posting on YouTube and "taking time to reflect."

Source: Twitter, Insider

By the end of January, Paul was back on YouTube with a documentary about suicide survivors. "From this point on, I want to make an effort to contribute and immerse myself in the conversation. So I'm pledging to donate $1 million to various suicide prevention organizations," Paul said.

Source: Insider

But only a few weeks later, Paul made another misstep when he posted footage of himself Tasering two dead rats. YouTube temporarily suspended ads on videos made by Paul, citing his "recent pattern of behavior," but they were reinstated by February.

Source: Business Insider

Many big YouTubers took to social media to criticize Paul, with some calling for YouTube to kick him off. However, YouTube CEO Susan Wojcicki said that Paul hadn't violated policies enough times to get terminated, and that suspending his ad revenue was "actually a pretty strong statement."

Source: Business Insider

In light of the incident, Paul saw his views and new subscriber numbers tank. Between December 2017 and March 2018, SocialBlade statistics showed a 47% drop-off in views, and an 88% slowdown in subscribers. The controversy also cost Paul an estimated $5 million worth of business deals.

Source: Business Insider, Business Insider

Just a month later, a model who appeared in a Paul's music video for "No Handlebars" spoke out about her experience filming with the YouTuber. The model, Eliza Johnson, said that she "felt kind of abused," and felt she was treated differently as the only plus-size model at the video shoot.

Source: Business Insider

During the first half of 2018, Paul drummed up interest for a fight against fellow YouTuber KSI. The fight between the YouTube stars ended in a draw, but brought in an estimated $11 million in revenue between in-person tickets and a pay-per-view livestream.

Source: Business Insider

News emerged in July that Paul was dating actress Chloe Bennet, who stars in the TV show "Agents of S.H.I.E.L.D." However the two reportedly split up in October 2018.

Source: Business Insider, Dexerto

Almost a year after Paul posted the Japan suicide forest video, YouTube released an original movie called "The Thinning: New World Order" starring the controversial star. YouTube defended the movie as a collaborative effort that was released "in fairness" to fans and other cast members.

Near the end of 2018, Paul launched his podcast, "Impaulsive," where he interviews and chats with friends and fellow YouTubers. The show recently celebrated its 100th episode.

But it took no time at all for his comments on the podcast to turn controversial. In an early episode, Paul said that he was planning to "go gay" for a month for "male-only March," which was criticized for forwarding the view that sexuality is a choice or phase. He later apologized for his "poor choice of words."

Source: HuffPost

Paul was filmed in May practicing and training for a slapping competition taking place in Russia. In a video posted on Twitter, Paul is shown slapping a man so hard that he falls down, seemingly unconscious. Paul later said he pulled out of the competition to "preserve the health and wellness of everyone competing."

Source: Business Insider

Paul re-entered the spotlight in July when he gave a bizarre interview on Fox Business. Paul claimed on TV that he had "graduated" to become an "ex-controversial" YouTuber, and shared that his expenses surpassed his income recently.

Source: Business Insider

Paul held a track-and-field tournament in July for YouTubers and video creators called the Challenger Games, where he bet $100,000 that he was the fastest YouTuber on the planet. However, during the race Paul pulled his hamstring and had to be helped off the track.

Source: Business Insider

The latest estimate of Paul's wealth puts his income at $14.5 million between June 2017 and June 2018.

Source: Business Insider

• The news that independent ad agency Barton F. Graf is shutting down highlights the growing struggles facing independent agencies and the ad business at large. 
• Digital platforms Google and Facebook dominate ad spending and clients are demanding more data and project-based work.
• Some insiders say that independent agencies have an opportunity as the holding company model is called into question.
• However, agencies admit they need to do better at proving their value.
• Click here for more BI Prime stories.

This week, New York-based agency Barton F. Graf announced that would close at the end of the year. The independent creative agency — known for its quirky and entertaining ads including Supercell's "Clash of Clans" Super Bowl ad starring Liam Neeson— blamed shifts in client contracts and spending, staff exits, and declining revenue.

The news, which was first reported by AdAge, highlights the growing struggles facing independent agencies and agencies in general.

The ad industry is going through several seismic shifts

The landscape is a far cry from what it was when founder Gerry Graf set up the agency a decade ago, when creative was still king and TV and 30-second spots ruled. That has changed considerably, with digital platforms Google and Facebook dominating digital ad spending and clients demanding more data and project-based work.

Creative agencies have struggled to grow in this environment, expanding only at the current rate of inflation in the US, said Forrester analyst Jay Pattisall. Independent shops have been especially hit, with independent agencies decreasing as a percentage of agencies from 51% in 2016 to 39% in 2018, a result of agency M&A and closures, according to Forrester's research with SoDa.

Many creative agencies have lost their core proposition as clients increasingly value business expertise, data, and C-Suite relationships, said Jack Skeels, founder and CEO of Agency Agile, an agency consulting organization.

"Shops built around selling a big idea no longer work," he said.

More broadly, the ad industry is facing strong headwinds. The holding company model is under pressure; brands including Verizon, Marriott and Mastercard are increasingly taking their advertising in-house; direct-to-consumer brands have upended traditional advertising; and new competitors including in-housing specialists and DTC agencies and consulting firms like Deloitte and Accenture are encroaching on agencies' turf. 

Read more: Brands continue to take their advertising in-house at an unprecedented rate — and it's terrible news for ad agencies

Adding to that, clients are increasingly trying to drive down agency fees and opting for project-based work over agency-of-record relationships. P&G has said that it has saved upwards of $1 billion in agency fees, and Johnson & Johnson also recently made sizeable cuts to its marketing budget. 

"Obviously, procurement pressure is increasing and scopes are decreasing," said Jason Harris, co-founder and CEO of independent agency Mechanism, pointing out that even big agencies were not immune to the shifts."The recent mergers of iconic shops — most which no longer have the equity of their founding names — show that it can happen to any and all of us." 

The shift to project-based work has been hard for agencies of all sizes, said Pete Imwalle, EVP and chief operation officer at Los Angeles-based independent agency RPA.

"The amount of effort to win an assignment needs to be adjusted to the size of the potential win — we can't do three-to-six month, multi-round reviews with spec work for assignments that only pay the winning agency," he said. "The math doesn't work."

But the era of independent agencies may not yet be over

While some fear that the closing down of Barton F. Graf signals doom for other independent agencies, others remain optimistic. 

As the viability of the holding company model is called into question, there's opportunity for independent agencies that are smaller and more agile, said Ted Nelson, CEO at Mechanica, an independent agency.

"[They are] independent to fully take ownership of client objectives, independent of quarterly revenue targets that force cyclical talent layoffs, independent to truly innovate on behalf of their clients, and independent to evolve along with today's always churning restless markets," he said.

Indeed, some, including Wieden+Kennedy, Mother, and Johannes Leonardo, continue to thrive.

"Smaller agencies usually have lighter operational models, less legacy overhead, and more nimble ways of delivering content at speed, which is what larger agencies can often lack," said Claire Telling, co-CEO of grace Blue. "They just have to set up a financial structure that allows for the company to stay afloat during potential dry spells."

Independent shops Red Tettemer O'Connell + Partners and Stink Studios said they have done exactly that. Stink Studios has leaned on project-based work, which lets it hedge its bets by working with a variety of clients, CEO Mark Pytlik said. None of the agency's clients accounts for more than 8% of its total billings, he said.

"It's a win-win, because clients don't have to commit, and it keeps us on our toes," said Pytlik. 

RTO+P created a content creation unit called wakeandmake.studio five years ago that has helped provide a stream of work and been one of the agency's fastest-growing segments, said Steve Red, president and chief creative officer at RTO+P.

"We've embraced change by changing our business on the regular," said Red. "We never bring boilerplate solutions, because we're not beholden to a holding company that forces it. And that more often than not, leads to long-time relationships with even our project clients."

That said, independent agencies admit they need to do better.

"100% of the clients we serve come to us because a big agency isn't right for them," said Ryan Kutscher, co-founder and chief creative officer of Circus Maximus."The challenge we address is about proving value, which has propelled us into the world of data, and media and analytics."

Independent agencies need to stop accepting outmoded fee structures and ask for performance-based payment terms as the hour-based approach is tied to the agency-of-record model that's no longer prevalent, said Stink Studio's Pytlik.

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• Crunch Fitness is trying to win over new members as people threaten to boycott SoulCycle and Equinox. 
• Outrage exploded online after The Washington Post reported that Stephen Ross — chairman of the company that owns SoulCycle and Equinox — is scheduled to host a fundraiser for President Doanld Trump. 
• Crunch is reaching out to people online who are threatening to cancel their Equinox memberships and ditch SoulCycle. 
• "At Crunch we have spin karaoke, hosted by a drag queen," Crunch tweeted in response to one person seeking a SoulCycle replacement in New York City. 
• Visit Business Insider's homepage for more stories.

Crunch Fitness is ready to cash in on boycott threats against Equinox and SoulCycle. 

Outrage exploded online after The Washington Post reported that Stephen Ross is scheduled to host a fundraiser for President Donald Trump this Friday at his New York home in the Hamptons, with tickets costing $100,000. Ross is the founder and chairman of the real-estate company Related Cos., which owns Equinox and SoulCycle. 

Read more:People are threatening to quit Equinox and SoulCycle following a report that the chairman of the trendy fitness brands plans to host a Trump fundraiser

Ross' connection to Equinox and SoulCycle meant that the news sparked boycott threats against the trendy fitness chains. 

"This Friday the Soul Cycle and Equinox Fitness chairman is throwing a fundraising lunch for Donald Trump's 2020 presidential campaign," #GrabYourWallet founder Shannon Coulter tweeted on Wednesday.

"Tickets are $100,000 each. Adding to the list," she added, referring to #GrabYourWallet's influential list of brands for anti-Trump people to boycott.

Many people took to social media to criticize Ross and threaten to cut ties with the brands. The Advocate's editor-in-chief, Zach Stafford, tweeted that "front desks are getting hit with numerous calls from people canceling memberships," citing sources in Los Angeles Equinox locations. 

SoulCycle and Equinox did not respond to Business Insider's request for comment. 

Now, Crunch Fitness is trying to win over angry Equinox members and SoulCycle visitors. The gym chain has been reaching out to people threatening to boycott the brands on Twitter, in an effort to get them to give Crunch a try. 

"At Crunch we have spin karaoke, hosted by a drag queen," Crunch tweeted in response to one person seeking a SoulCycle replacement in New York City. 

Crunch did not immediately respond to Business Insider's request for comment. 

Switching to Crunch will probably mean that boycotters will save money, as monthly membership fees at the gym cost between $105 and $135. Equinox charges between $185 and $500 a month. 

SEE ALSO: Chick-fil-A's American takeover should terrify Wendy's and Burger King

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• Preston Arsement, commonly known as "Preston" online, grew his digital YouTube brand into a full-time business, hiring 24 people to help him. 
• When he started his channel, previously named "PrestonPlayz," Arsement filmed gaming videos. Now, he creates kid-focused vlog-style content like challenge videos and pranks. 
• With the help of his team, Arsement runs an in-house merchandise line and has made several investments in real estate and game development. 
• In response to his fame, Arsement said parents of his fans often show up to his office uninvited, bringing their children to see him. He'll usually wear a hat if he wants to avoid getting recognized, but his younger siblings are also often recognized from being featured in his videos, he said. 
• Click here for more BI Prime stories.

When Preston Arsement first started to gain a following online, he had no idea he would eventually hire his parents as part of the 24-person team working for him.

At the time, Arsement was 15 years old and didn't know where to even start. Now, almost 10 years later, Arsement — who is commonly known as "Preston" online — has 10 million YouTube subscribers, a merchandise business, and several lucrative investments. 

Arsement, now 24, spoke with Business Insider about how he got started and grew his digital brand into a full-time business. 

Turning a YouTube channel into a brand 

Arsement graduated high school early at 16 years old, and soon after, he partnered with the now defunct online-entertainment network, Machinima.

This partnership was when Arsement and his family began to realize that YouTube could become more than a hobby, he said. 

But Arsement's business really started to heat up a few years later, at 19, when he launched, with a business partner, a company that develops video games within "Minecraft" (another video game).

During the early stages of development, Arsement planned to hire roughly 50 contractors to work on this "extremely lucrative project," he said. 

"We had no legal agreements in place — none whatsoever," Arsement said. "That's when I put my mom on [the team]."

She was his first employee, and together they "buttoned things up within the company" and found a certified public accountant they trusted.

So far, his "games within 'Minecraft'" company has been his largest revenue development, he said. 

"The business of that sometimes is so lucrative that it actually outweighs my YouTube compensation," Arsement said. "We've taken the distribution of the funds and built a game studio in Toronto, which is working on our first ever mobile game." 

Once everything was organized, Arsement extended his brand by building his own in-house merchandise line.

Arsement has a warehouse where he ships T-shirts, hoodies, and other branded accessories, which he sells online through the e-commerce platform Shopify.

This is unlike some of YouTube's other top creators, like James Charles (15.9 million subscribers) and David Dobrik (13 million), who sell their merchandise through companies like Mad Merch and Fanjoy. 

"I didn't want to work with somebody else," Arsement said, referring to his merchandise line. "I wanted to do it ourselves because I wanted to hire people, provide good jobs."

Arsement's company operates in a 5,000-square-foot office in Texas, where he and his team also work on video production and creative for the six YouTube channels he appears in.

Besides his main channel, Preston (with 10 million subscribers and formerly known as PrestonPlayz), the other YouTube channels within the Arsement brand include TBNRfrags (5 million subscribers), PrestonRoblox (1.7 million), PrestonMinecraft (2 million), BriannaPlayz (1.4 million), and KeeleyPlayz (200,000).

When Arsement was 19, he was producing almost four videos a day alone, he said.

Now, he's invested in building a team to help him produce his videos. Arsement began working with the digital talent agency Night Media in 2017 and said that having a team behind him has largely contributed to his quick rise in numbers. 

He and his family have also invested in real estate and vacation rentals through the travel company VRBO, and his dad maintains that aspect of the business.

From one-off brand deals to longer ones 

Besides his game-development and merchandise businesses, Arsement works with brands who pay him for sponsored posts and other promotions.

In the beginning, companies like Disney and Nickelodeon approached Arsement with one-off brand deals, he said.

Now he works on longer-term deals and is in his second year working for Nestlé's Hot Pockets. 

These yearlong contracts usually require about six YouTube videos where Arsement will mention the product and several Instagram posts, he said.

Switch up the style

Part of Arsement's continued success comes from his ability to read trends in the industry. This pertains not just to business opportunities but also his style of videos.

When he started his channel, Arsement filmed gaming videos and streamed himself playing "Call of Duty" and "Minecraft." Now, he creates kid-focused vlog-style content like challenge videos and pranks.

Videos mentioning words like "Fortnite,""prank," or "worst" get more than five times as many views as videos without those words, according to a recent report from the Pew Research Center. 

This new style of content has helped his channel grow tremendously, nearly doubling his subscriber count in one year. In July 2018, Arsement had 6.5 million YouTube subscribers, according to the YouTube data-tracking website Social Blade. Now he has over 10 million.

Business Insider previously spoke with Reed Duchscher, the president of Night Media — where Arsement is a partner — about how certain keywords and phrases in the title of a video could drive views and subscribers. 

Duchscher has been a major player in Arsement's business and overall growth, Arsement said.

The price of success 

Arsement's videos primarily reach a younger demographic, and because of this, he takes responsibility for his content as a role model, he said.

"It's a heavy responsibility," Arsement said. "If you are at the airport, Target, anywhere, you will see kids look at you, and their faces brighten up and it's the sweetest thing ever. But you also have to understand that because you are influencing this generation, you have to always be on your toes and best behavior. Not that we aren't off camera, but we can't always be as 'laxed." 

And Arsement said parents of his fans will often show up to his office uninvited, bringing their children to see him. He will typically just wear a hat if he wants to avoid getting recognized, he said. But it's not always easy. His younger siblings are also often recognized from being featured in his videos.

"They can't just be normal students anymore at school because they are known all over the place," he said. 

SEE ALSO: How YouTube star MrBeast, who has 22 million subscribers, uses keywords and the 'shock and awe' effect to maximize views

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