Month: December 2021

Although, MediaMath appears to be keeping alternative options on the table with leadership at the buy-side outfit reportedly hinting that it is simultaneously exploring the option of refinancing, or a sale to private equity in recent weeks, sources told DigiDay. 

When offered the opportunity to comment on the accuracy of the reports that it had recently been in negotiations with MediaMath, a Magnite spokesperson said it does not comment on rumor or speculation.

Similarly, a spokesperson for MediaMath claimed it did not comment on rumor, or speculation when presented with the specifics of the recent claims by Digiday.

In June 2020, Digiday reported that MediaMath had appointed investment bank Centerview Partners to explore its strategic options which could include a sale or potential debt restructuring program. It has since emerged that MediaMath has engaged with LUMA Partners, the go-to investment bank for ad tech exits, to again explore its options. 

According to sources familiar with the process, a note circulated to potential acquirers in mid-2021 stated that gross spend on MediaMath’s platform was approximately $591 million in 2020, 70% of which was U.S.-based, and 60% of which came directly from brands. 

A statement attributed to Konrad Gerszke, president of MediaMath, shared with DigiDay read, “We are an ad tech platform with global presence serving the most sophisticated brands and their agencies, helping them to future-proof their digital advertising investment and to improve the return on their advertising spend.”

It continued, “As such, we are always looking for ways to deepen our relationships with a curated set of data, technology, supply and financial partners — including Magnite, who has been a long-standing partner and part of our SOURCE ecosystem — to enhance the solutions we offer our clients.”  

To date, MediaMath has raised $607.5 million, according to Crunchbase, with its latest $225 million funding round from private equity outfit Searchlight Capital Partners taking place in 2018. At the time, it was reported that this funding round valued the company at north of $1 billion.   

Presently, there are few certainties, but MediaMath and Magnite were understood to be negotiating on the eventual cost of an exit in recent weeks, according to one source who declined to be named due to ongoing commercial relationships with both companies. 

A separate source familiar with goings-on at MediaMath, who similarly declined to be named due to ongoing relationships with MediaMath, told Digiday the company had sought to refinance earlier in the year. Out of this process, discussions over a potential sale to a private equity group arose. 

A buoyant but competitive sector 

MediaMath operates a demand-side platform and data management platform, tools that are in demand in a sector of the advertising business where spend is forecast to grow from $192 billion in the U.S. this year to $278 billion by 2024, according to eMarketer. 

And in recent months, MediaMath has been bolstering its global presence striking key partnerships in the Indian subcontinent and Japan along with making key hires in EMEA. More recently, it announced the appointment of Mary Matyas as svp and general manager for North America.    

However, it operates in an intensely competitive space where it competes with the likes of Google’s DV 360 and The Trade Desk for media budgets — although the latter of the two is regarded as a buying tool for agencies whereas MediaMath tends to work more directly with brands. 

Additionally, the fundamentals of ad tech are uncertain as the entire digital media ecosystem is searching for alternatives to third-party cookies ahead of Google’s planned sunsetting of the ubiquitous ad targeting tool in 2023. Meanwhile, the specter of privacy laws such as GDPR continues to loom large over the entire advertising industry. The potential impact such legislation will have on future earnings is likely to feature heavily in any due diligence process. 

Investment theses?

Nevertheless, deals are being made as ad tech companies seek to bulk up, pivot to a business model that better facilitates first-party relationships, or seek a liquidity moment either through debuting on the public markets or through a sale with private equity groups increasingly a prospect. 

In its most recent market report, LUMA Partners noted how dealmaking in the space is rife in the last year after a hiatus in activity during the early stages of the Covid-19 pandemic and that there are now 23 publicly-listed ad tech companies as of Q4 2021.   

The roll-up theory

The union of Magnite and MediaMath, two vanguards of the early ad tech scene, could potentially have a USP as an independent full advertising stack, especially in the CTV space, that could potentially better assure advertisers of transparent pricing — a key component of MediaMath’s SOURCE initiative.

Magnite has made the bulk of its investments in CTV in recent years — Telaria, SpotX and SpringServe — the addition of a buy-side tool that could serve as one of few, if not an exclusive, access points to its inventory could appeal to advertisers keen to cut down on ad tech fees. Think of how Walmart works with The Trade Desk, or why Roku spent $150 million on DataXu.

Ratko Vidakovic, the founder of ad tech consultancy AdProfs, said the potential addition of a DSP such as MediaMath to any sell-side offering would not only bring “a serious demand-side business” but, in the case of Magnite, it would also bring it closer to offering advertisers a full end-to-end platform.

“This [could] gives Magnite a structural advantage because it allows the company to incentivize advertisers to use Magnite’s DSP and SSP together by offering things like lower fees, better reporting, more transparency, and log-level data,” he added.

“At a time when the programmatic supply chain is under intense scrutiny for transparency and efficiency, having the shortest and most unobscured supply chain between brands and publishers is a major advantage.”

Further still, a potential pairing of the buy- and sell-side operation could bring assurances over privacy compliance, according to Vidakovic. “In a world where the notion of broadcasting personal information across an ecosystem of ad tech players looks evermore tenuous, having an end-to-end solution allows the combined companies to have a contingency plan for a future where integrated first-party systems have a distinct advantage over an ecosystem of unconnected third-party players,” he surmised.

The private equity play

LUMA Partners notes how there have been more than 10 scaled PE transactions in the sector over the last 12 months with notable instances including Vista Equity Partners adding TripleLift to its raft of ad tech assets for $1.4 billion.

Other private equity firms that have been acquiring ad tech in recent months include Court Square Equity Partners, which bought Connatix in a deal understood to be worth $600 million, Blackstone, which joined GTCR by investing in Simpli.fi in a deal that values the company at $1.5 billion.

Meanwhile, CVC Capital Partners and TA Associates bought out Vista Equity Partners’ stake in MediaOcean — an ad tech company that has been acquisitive itself given its July purchase of buy-side ad server Flashtalking for $500 million, 12 months after it bought 4C Insights.

Speaking with Digiday in early November about overall dealmaking activity in the space, Elgin Thompson, managing director, technology investment banking at JMP Securities, said that “private equity is long on ad tech at scale.” He further noted how the increasing popularity for companies to list publicly, especially now that special purpose acquisition companies are in vogue, could potentially buoy the investment thesis of parties interested in ad tech.

For instance, Vista Equity Partners acquired Integral Ad Science in 2018, terms of the deal were not disclosed, and after its initial public offering in June 2021 the ad verification company has a market cap of approximately $3 billion. Similarly, IAS-rival DoubleVerify was bought by Providence Equity Partners for a reported $200 million in 2017, following its IPO in April of this year its market cap is nearing the $5 billion mark.

What is in no doubt is that dealmaking activity has been frenetic over the last 12 months, the eventual outcome of MediaMath’s decision making process over whether to exit or continue to go it alone, potentially under a new finance structure, will be a notable milestone in the history of ad tech.

TikTok teased the new measurement program, which it’s calling the TikTok Measurement Academy, in a post on LinkedIn on Monday, touting it as a way for agencies to focus on “the best practices and deployment of our latest measurement solutions” to calculate the “true business value” of its TikTok ads.

A TikTok representative described the program as “in the early stages,” and is open to all agencies, but declined to offer any other details of the program.

Horizon Media said it will put around 80 of its employees through the TikTok Measurement Academy. The way Horizon sees it, the program is designed to help them understand which measurement solutions — from media or brand effectiveness to online or offline sales attribution and incrementality measurement — are most appropriate to implement to suit clients’ TikTok strategies.

“TikTok’s numbers keep growing — not just people, but the range of video content that’s posted,” said Alex Stone, Horizon Media’s senior vp advanced video & agency partnerships. “The way brands use that content in their campaigns has shifted from focusing on a specific event or stunt to more strategic ways to engage with consumers.

Although its freewheeling content may have something to do with TikTok’s appeal with the masses, the rise of influencer marketing may be contributing to the surge in popularity, which is where agencies continue to try to educate themselves. “As influencers’ capabilities to affect brands continue to grow, TikTok becomes a more important platform and we need to have a sound understanding of what we can measure and how we drive those metrics across TikTok, as we do with other media channels,” said Stone. 

The heat around TikTok among marketers just continues. HubSpot and TalkWalker recently issued their latest social media trends report, which credits the Bytedance-owned social platform for being the first non-Facebook app to reach 3 billion global downloads in 2021. The report also found that two out of three marketers plan to increase their investment in TikTok in 2022.

TikTok’s program is not unlike Google and Facebook’s training and certification programs offered to media agencies in the early 2010s, when those options were still largely unfamiliar territory to bring to clients, but were heating up fast.

This interview has been lightly edited and condensed for clarity.

How has gaming activity on Twitter grown over the last few years?

Last year, we had over 2 billion tweets about video games, which was a 75% increase year-over-year. We’ve also had user growth in terms of unique authors; we’ve seen about a 49% increase in unique authors, so more people than ever have been tweeting about video games. 

What I think is really interesting to see is that growth has been consistently happening year-over-year; we were really happy to have just a billion tweets back in 2018. I think it’s a testament to the fact that games, and the games industry at large, are becoming more mainstream. 

What I think is really important about Twitter is that it’s very much where the zeitgeist is happening. It’s where people are coming to talk about what’s going on in the world. And I think we’ve seen that happen when it comes to gaming. No matter what game it is, or where that game is being streamed, people come to Twitter to talk about it. This is the second-screen experience that’s home for all conversation and content around gaming.

Is Twitter looking to compete with dedicated gaming/streaming platforms, such as Twitch and YouTube, as a destination for gaming creators?

Here’s the way I like to position it: I think that Twitter is very much this complementary second-screen experience for what’s happening on a Twitch or YouTube, or even a Facebook Gaming. I think we really complement these platforms as a second-screen experience. It’s very much a complementary platform, not something that cannibalizes what creators are doing elsewhere.

 Can you break down Twitter’s various gaming partnerships?

I think what’s really unique about gaming is that it’s such a vast industry at large. You could be talking to one person, and when you talk about gaming, they’re thinking about creators. And someone else could be thinking about the publishers and developers, right? Talk to someone else, and they’re probably thinking about esports. So when I look at the partners we work with, for gaming, it’s everything under the sun. 

There are a couple key pillars we focus on. The first one is publishers and developers — the Epic Games, the Riots of the world. The next one is esports, which is the teams, the leagues, the athletes, et cetera. The next one is around editorial: what does it look like with the editorial partners, as well as the communities? And communities are the awards events, the big shows that are happening, building around creators in their communities.

So those are the four buckets. There’s overlap between them, but it helps kind of describe what the gaming industry at large looks like. We’re trying to work and support the whole industry and make sure that we’re servicing everybody that’s in the space.

The three pillars that I focus on are revenue, reach and innovation. So, how do we work with our partners to help them distribute their content on the platform in a way that’s innovative, that allows them to grow and engage their audiences? And then, to another extent, it’s also about how they monetize their audiences and build a business on Twitter. Some folks, we don’t do stuff with monetization, but some we do a lot; it’s not a one-size-fits-all approach.

How will Twitter convince gaming fans to spend money on the platform?

We’ve just opened our doors to Tipping, and now we’re also testing things with Super Follows, so it’s still the early days in terms of what people can be doing with it. What I will say is that I have full faith that, if any community can really figure it out and get creative with utilizing these products, it’s the gaming community. 

What I do want to call out, when it comes to some of our monetization functions, is what we do around our Amplify program. Our Amplify Pre-roll program is very much a brand-safe program that allows individuals to monetize short-form clips and highlights at scale. What I love about that program is that it’s an easy, turn-key way for creators to start monetizing their clips and highlights from streams and build out short-form content that lives on Twitter. We started off with some of our premium publishers — the Riot Games and the FaZe Clans of the world — but now we’ve also started to expand into working with gaming creators. 

Separately, we’ve got our Amplify Sponsorships program. That’s more where we work with a lot of esports teams, as well as with top publishers, like the IGN and Riot Games of the world, on more non-pre-roll-focused, more innovative formats. 

How about Spaces? How are they being used by gaming creators?

There are a few different use cases that we’re seeing right now. One is from our partners on the editorial side, like IGN; they use it for big-show events, or post-show recaps and discussions. Then you also have folks like Geoff Keighley, who was one of the earliest adopters for Spaces; what he’s done with that is to launch a new brand in GameSlice, where he’s bringing on friends. He did his first Space with Reggie [Fils-Aime], formerly from Nintendo.

And then you have — and I think this is the one where you see a lot of the biggest Spaces coming from it — a lot of these MineCraft YouTubers, they’ll just randomly pop on, and they have these voracious and incredibly active fans on the platform, so all of a sudden, thousands of people are listening into these Spaces. 

I think one of the biggest takeaways is that the gaming Spaces are becoming some of the most listened-to Spaces on the platform, across all verticals, because of this active audience that’s happening on the platform. Now that we have upcoming features around recording and clipping, I think it’s only going to keep getting bigger.

What is your vision for Twitter Gaming five years from today?

Let’s talk Twitter first: my hope for Twitter, in five years, is that any gaming creator can look at the platform as a space where they can create a business for themselves, and that it’s a viable revenue stream that allows them to distribute their content and complements what they’re doing on other platforms. As long as that’s continuing to happen, that means we’re doing our job right.

In addition, I think that Twitter’s got to be the place that’s going to continue to push the esports and gaming industry forward and make it much more mainstream than it is now. I want gaming and esports to be considered in the same breath as traditional sports, like the NFL and NBA, and I think in about five years, we could really hit that, and I think Twitter’s going to be important for that.

Lastly, one of the other things that’s really important to me is the way a traditional sports fan is monetized, compared to an esports fan. Basically, the esports fan is monetized at such a small fraction of how a traditional sports fan is. And I think that can change through platforms like Twitter and what we do with our Amplify program.

Turner Sports has been one of the faster moving media companies in the blockchain space, having made its first concerted effort in launching an NFT project in 2018. 

For a sports media company, this made sense in a lot of ways. Sports fans have a fair amount of characteristics that would lend to them also being interested in cryptocurrencies, NFT collection and playing in the metaverse. For example, a large number of people participate in fantasy sports, while a number of others like to collect rare trading cards or signed baseballs, and many more will support their teams by buying season tickets or jerseys for decent chunks of money. 

All of these things can be translated to the blockchain, which gave Turner Sports a leg up when launching its Blockletes game, an online golf game that uses NFTs to add real world value. 

When Yang Adija, Turner Sports’ svp of digital league business operations, growth and innovation, started thinking about applying the blockchain to his company, he saw an opportunity to bridge the gap between gaming and collecting, thus launching Blockletes — or “Blockchain Athletes.”

In the latest episode of the Digiday Podcast, Adija discussed creating the NFT game, which is set to launch on mobile this month, and why gamifying a new and unknown concept like NFTs helps onboard non-crypto native audiences. 

Below are highlights from the conversation that have been lightly edited and condensed for clarification. 

Gamifying the NFT economy 

[Players are] able to purchase an NFT — in this case, a golfer — and the athlete has certain skills that are born with that NFT. And so it will have power and accuracy, and as you play it in the game, you can improve the athlete’s attributes [which] increases the value of that athlete, because it’s now able to score better or hit further. The work you put into it improves the value of that NFT. [And then,] because they are NFTs and have proper ownership, the users are then able to take those and have real world value to it — a real dollar value to it. And that’s one of the interesting things about cryptocurrency. It allows for users to engage in a game or sport and still have value with it.

Identifying audiences that are willing to invest 

It took some time and this is why we were happy that we started early. We thought, we’re going to build a game and when someone sees that there’s a game and you can make money, they’ll want to jump into it. It really took us some time to understand the difference in the audiences and their progression of how they understood the technology and its application. 

Certainly those that were crypto native were the first to come in but it also took us some time for us to talk to our more general audience, sports fans that also dabble in betting or free to play games, understood it a bit more. We also found that sports fans that played sports games understood the concept and what we’re trying to do, because it was improving your digital asset over time through your engagement with the game and the sport. Really understanding that gave us a better sense of what audiences to approach first as we begin to see the space grow, and eventually, get to mass adoption.

Finding the right niche product for your audience to participate on the blockchain

In 2018, funnily enough, we wanted to create a racing game with horses [similar to the videogame CryptoKitties, where people could buy and breed virtual cats using cryptocurrencies] but you know, we’re not a horse racing company. That wasn’t really our sweet spot. And we immediately turned to athletes and sports and the key there was, what can we get off the ground quickly enough and start testing in a way that would allow us to really learn the space?

We looked at golf as a game that we wanted to go into because it didn’t require synchronous gameplay, you can play against someone’s scorecard. It was simpler to make in terms of the interactions because there wasn’t a lot of collision between the players. And 2019 was when we started the idea of creating a golf-based game [and] using that to open us to what NFTs can do.

Brands in the metaverse and beyond

Sam Lemoine, creative director, social at GUT: “2021 has been a year of continued uncertainty. Among the trends that shaped the year, brand collaborations and TikTok became pillars to brands of all sizes. Social platforms became spaces for co-creation as fandoms and interest-based communities proliferated, expanding the creator economy and giving rise to the metaverse. And while we’ve seen a convergence of trends, what will they mean for the future?

2022 will usher in an era of unprecedented flex — a shift from owning IRL assets to digital collectibles, metaverse land, and wearables, creating new opportunities for brand experiences. Brands, creators and consumers will also enter a time of their own thanks to Web3, the blockchain-enabled web free of control from platform giants, which will continue to develop as a strong anchor for community building and the creator economy. Emboldened by Web3, those brands, creators and consumers will band together to build new worlds of their own — ones that thrive on collaboration, community, and most importantly, equity.”

Jeremy Cohen, vp head of global content partnerships, Publicis Groupe: “2021 witnessed the global, mainstream embrace of crypto and the Web 3.0 economy. The rate of adoption will increase substantially in the next year, as the COVID-induced spike in digital consumption both changed consumer habits and, in turn, saw crypto grow into a multi-trillion dollar economy. 2022 will be a fascinating year of innovation and iteration, as brands utilize metaverse experiences to engage new audiences and redefine the idea of brand loyalty.”

Virtual work with selective in-person meetings

Seb Tomich, svp global head of advertising and marketing solutions, New York Times: “For better or worse, one change that undoubtedly stuck is virtual work. We’ve seen great success increasing our reach to clients and lowering our T&E costs, but we have lost the ability to form deeper relationships that happen face to face. At some point in 2022, we will be getting back to in-person at scale with some of the more transactional meetings sticking to virtual.”

Courtney Buechert, chairman and CEO, New York Times: “The hybrid-centric work model (versus the office-centric work model) is one of the biggest shifts that is here to stay. Its impact on the geography of talent, the economics of agency overhead/costs and the identity of agency brands is huge. And it seems to be creating an explosion of opportunity for new types or agencies to be more attractive to clients and staff than would have ever been possible pre-pandemic.”

Return of travel

Josh Peterson, vp of data science and analytics, CJ Affiliate: “This year, we saw purchasing trends around WFH taper off and shift toward beauty, accessories and travel. 2022 will be the year of travel, where pent-up demand for seeing the world will spur more travel gifting moments and a surge in retail traffic for travel-related attire, media, electronics and more.”

Rise of CTV continues

Hyun Lee-Miller, vp, media, Good Apple: “Keeping in mind evolving consumer behavior, brands are increasingly adopting an omnichannel video-first strategy with video activation experiences being customized to maximize the platform experience itself. Brands will continue to ramp up CTV spend with consumers migrating to streaming services; but, gone are the days where brands are taking one video asset and repurposing it across linear, CTV, OLV and social channels. Brands are creating social video experiences native to each platform experience, whether it be making TikToks or flipping the script by having consumers create brand videos themselves with a Snap AR lens.”

Looming privacy changes and first-party data

David Broscow, vp, data science and analytics, INNOCEAN USA: “Privacy of digital fingerprints. We expect this trend to continue beyond the major shifts that have taken place at Apple and Google in the current calendar year. Consumers will voluntarily share preferences and intentions, where they see that the marketer will offer value in return.”

Tomich: “First-party took center stage this year with the looming death of the third-party cookie. Although we are still waiting for a resolution, The Times has continued to build first-party products backed by the growth of our subscriber base, and have seen outstanding results.”

Reinvention of customer experience

Margaux Logan, vp and head of online marketplaces, U.S., Publicis Commerce: “Seamless, omnichannel shopping is definitely here to stay and we’ll see greater ease in purchasing things via e-commerce. One big trend I see for the year ahead is the integration of loyalty cards and payment systems to streamline the consumer experience even further. Payment companies are now being purchased by retail media networks. Why not make it easy to buy and save at retailers with just a click?”

Kari Shimmel, chief strategy officer at Campbell Ewald: “Over the last year we also saw brands forced to reinvent their approach to creating brand experiences. Many of them had to scrap their journey maps and start from scratch — something that had never been done en masse. This brought on the rise of more CX practices both in advertising and consulting. We are in the Wild Wild West phase with CX with chaos in terminology and lack of maturity across clients and agencies — beware the one size fits all.”

3 Questions with WeAre8 CMO Jill Cooper

WeAre8 is a sustainable ad platform. Tell us, what’s the current state of sustainable advertising? How is the industry embracing it?

Advertising, in general, is evolving, and I’m happy to see that more and more brands are stepping up their sustainability commitments and taking sustainable advertising into account when they plan their marketing strategies these days. Companies [spend] billions of dollars globally in ad distribution to build trends that people all around the world follow, so we are in a key position to help shape society and affect change. It is very exciting to see the industry coming together in big events like the recent Ad Net Zero Global Summit, showing the advertising industry’s response to the climate emergency. It’s vital that companies and advertising professionals from all over the world have a forum to come together and discuss how we can play this key role in tackling environmental issues.

How does WeAre8 balance profit with sustainability efforts? 

Every marketer who cares about the planet wants to build a loved brand and a healthy future for their organization. It is critical to find the right balance and we put a lot of effort into achieving that, not only for WeAre8 but also for all our partners. Our business model operates as a 35:65 split, with the majority of funds diverted to the consumer and worthy causes and the remainder reinvested back into WeAre8 and our partners. We understand that if a tech alternative is going to be truly sustainable and good for people and the planet, it needs to deliver strong business and media ROI. And sustainability, by definition means that all parties benefit.

With its mission, how does WeAre8 determine which companies, brands, to work with?

It is clear that as an advertising and marketing channel we do contribute to the evolution of our industry, and we want to do it in a way that economically empowers people and supports the planet. At WeAre8, we have built double opt-in into the consumer experience, so it is ultimately an individual’s choice as to whether they accept to watch the video message from a particular brand. In 2020, we made the decision to ban companies working in industries such as oil, gambling, political advertising, tobacco, firearms, pyramid schemes, electronic cigarettes, but everything outside this, we leave up to the individual to make their own decision. — Kimeko McCoy

By the numbers

The COVID-19 pandemic has upended much of life as we know it, from remote employees finding office alternatives in cafes, bars and hotels to reshaping networking events from in-person gatherings to online encounters. And as pandemic life becomes more complicated, people are looking to brands like Google and Netflix to offer simplicity with many willing to pay premium prices for simpler experiences, according to Siegel+Gale’s World’s Simplest Brands latest study. Find a breakdown by the numbers below:

• 76% of respondents said they are more likely to recommend a brand that delivers simple experiences, compared to 64% in 2018.
• 57% of respondents reported they are willing to pay more for simpler experiences, slightly higher than the last report’s findings.
• 55% of survey respondents, aged 18-34, said their life was more complicated — Kimeko McCoy

Quote of the week

“We’re still in this growing pains stage with much of social for brands, where they’re learning to understand that attention is something that needs to be earned versus paid for.”

— said Brendan Gahan, chief social officer and partner at Mekanism, when asked about Duolingo’s viral TikToks of its menacing owl mascot.

What we’ve covered

• How Edible Arrangements is looking to be relevant again by changing up its media mix.
• Why Criteo’s latest $380 million digital media acquisition matters.
• Snapchat is looking to AR-commerce to grow marketing dollars.