Month: December 2021

The acquisition is subject to regulatory approvals and forecast to close by the end of the first quarter of 2022 with the deal likely to consist of $305 million in cash with the remainder in Criteo shares.

In a press release, Criteo’s CEO Megan Clarken described the acquisition as “a defining moment in Criteo’s transformation” as it seeks to drive growth and, more importantly, “revenue diversification” with the deal quickly following its May purchase of Mabaya.

As a publicly listed company with a market cap that’s comfortably north of the $2 billion mark, Criteo is one of the more renowned names in digital advertising. Its need to transition away from a historic reliance on third-party cookies to fuel its core ad retargeting business is a tale often told, with Criteo’s stock price often taking a hit whenever Apple and Google announce further ad targeting restrictions on their platforms.

IPON-who?

So, while Criteo may be one of the most recognizable digital advertising brands outside of the household names of Big Tech, IPONWEB is, arguably, a name that is confined to conversations among more seasoned ad tech observers. Founded in the U.K. in 2000, the significance of IPONWEB’s impact on ad tech cannot be overstated with its, predominantly Russia-based engineering team the brains behind countless ad exchanges, bidders, or any tier of the acronym-laden sector of the industry that is ad tech.

Sources tell Digiday that IPONWEB’s, comparatively, low profile is largely reflective of Dr. Boris Mouzykantskii, an academic-turned-ad tech entrepreneur who founded IPONWEB, and also held the role of “chief scientist” in parallel to his CEO title — an indication of why many refer to him as “the godfather of ad tech.”

What’s under the hood?

As mentioned, the slow decline of third-party cookies means Criteo is in search of a new narrative to shore up its stock price with the French company pinning its hopes on the rise of retail media as means of weaning itself off retargeting budgets.

The purchase of Mabaya, with its sponsored products service, was clearly a move in that direction but with the pending acquisition of IPONWEB Criteo chief Clarken is acquiring much more than that according to several sources approached by Digiday.

Criteo’s leadership was keen to laud IPONWEB’s engineering expertise — “they have built technology for nearly every major player and advertiser in the ecosystem” — and to highlight how Mouzykantskii is joining the company as its “chief architect”. In addition, it will soon have the full raft of IPONWEB services at its disposal: BidSwitch, BidCore, and The MediaGrid, all of which should deliver incremental revenue.

In BidSwitch, a marketplace that facilitates trades between over 100 demand-side and sell-side ad tech players, Criteo will have a product that will help broaden the addressable market for its first-party data product. According to the company, this will help, “first-party data activation, interoperability, and measurement more seamless in the post-third-party cookie world.”

Meanwhile, Criteo can also look to broaden its suite of services to mid-to-longtail retailers through the acquisition of BidCore, IPONWEB’s self-service DSP that effectively lets advertisers customize their bidding strategies, according to Ciarán O’Kane, CEO of WireCorp.

“They now have the pipes that can connect that [into the ecosystem] when you think that BidSwitch is like the sticky-tape that stitches a lot of the ecosystem together,” added O’Kane. “Megan [Clarken] has made a bet that they could be DoubleClick for retail media if you will.”

On a call with equities analysts, Criteo’s chief product officer Todd Parsons described The MediaGrid, an IPONWEB tool that aims to better connect media buyers with select audience inventory, as a service that should prove attractive to advertisers and media owners alike.

He went on to add, “The MediaGrid pulls a variety of full-service capabilities closer to our first-party data relationships for both marketers and media owners. And makes that transaction into the programmatic world, the less clunky and more of a direct path, but not a path that requires constant supply-path optimization scrutiny.”

New addressable market

Nathan Woodman, founder of Proof in Data and former svp at IPONWEB, further explained how the addition of IPONWEB’s technology could broaden Criteo’s appeal to more advertisers outside of its core performance marketer clientele, particularly media buyers within Madison Avenue’s holding groups.

Many holding groups have longstanding contracts with DSPs making it difficult for emergent players to get in on the action, many have to prove incremental value in order to win a share of media agencies’ budgets.

Woodman further detailed how the addition IPONWEB’s capabilities can help Criteo do so, “With its extensive device graph capabilities Criteo can now look to sell into agency market more by saying, ‘It doesn’t matter if you use The Trade Desk or Google, we can run a managed service PMP [through a buyer’s contracted DSP], that’s what MediaGrid does.”

In short, the IPONWEB ad stack will give Criteo a full suite of ad tech capabilities in a manner that should enable it to curate deals in a manner that (theoretically) is less reliant on the soon-to-be-extinct third-party cookie.

While much has been made of the universally respected engineering talent Criteo is acquiring in IPONWEB, one source that specializes in M&A due-diligence, noted how the integration of Criteo and IPONWEB’s engineering teams will be critical.

Failure to do so successfully can often sabotage plans that make perfect sense on paper according to the source who declined to be named due to commercial sensitivities. A Criteo spokesperson was unable to respond to Digiday’s request for comment by press time.

While purely digital experiences have been touted as the future, the possibilities around AR that overlays the current physical landscape could prove to be more interesting and interactive, especially for users that are not familiar with virtual reality. John Hanke, founder and CEO of Niantic, the company behind the biggest AR game Pokemon Go, recently said that the metaverse should encourage people to interact in real life through AR, creating new connections and expanding on thousands of years of human experience. As Meta grows in force and expands its metaverse, could AR experiences allow for a more natural way of engaging with technology?

Pierina Merino, founder of the AR collectibles platform Flickplay, would certainly say so. The Flickplay app works on the premise of online personas, flanked by collectibles that can be unlocked, shown off and sold, akin to an NFT. The platform’s interactive game map allows users to interact in real-time with digital objects owned by other people in the real world. Flickplay announced its partnership with fashion retailer JapanLA earlier this month after raising $5 million in seed funding, backed by global VC firm Lightspeed Ventures and co-led by San Francisco-based Abstract VC. 

Talking about the partnership, Jamie Rivadeneira, founder of JapanLA, said, “The Flickplay metaverse aligns well with our digital retail store concept and helps us interact with our community on Instagram and Tiktok. Now, when customers pick up their orders from us, they can interact with our Flickplay storefront and collect a digital collectible of our store and brand that they can own forever and take it into whichever metaverse they choose.” 

For Merino, the AR and VR worlds are an extension of society’s relationship with social media. “Facebook marked the first intersection of the self and social as a way for us to connect. Instagram started as a platform to help us share moments and evolved into a platform that helps you not only show who you are, but also helps you shape your identity,” she said. “Digital ledgers have helped us not only shape our realities, but they’re also becoming as real and tangible in perception as the things that we can touch and feel.”

Merino’s background was instrumental to the development of Flickplay. She worked in architecture, when VR and AR technology were first being adopted in that field, and then led VR brand projects. She then saw the opportunity to combine her knowledge of architecture and her experiences with technology to create a new platform.

Her first startup, Piemer, became the first 3D-printed product line to sell at large-scale retailers like Nordstrom. “[Then,] we saw that Pokemon Go was almost dictating where people were spending time and [working to] move masses of people in the real world,” she said. “And then the Museum of Ice Cream and other experiential pop-ups launched, which were helping people shape their digital identity through physical spaces.” 

The interactive part of Flickplay presents a new opportunity for brands. With others like Balenciaga are entering the gaming world through Fortnite, there, users’ level of interaction with the brand is limited to the garment. With AR, brands can combine their stores, storytelling and history to create experiences that can be collected as the consumer explores their store or outside space. “​​You wouldn’t go into a VR room to get a crazy, immersive experience every day — that’s something that you would do on a weekend. But you would use glasses or your phone to bridge your everyday AR reality with your real reality,” said Merino.

Flickplay has also partnered with cities across the U.S., starting with Los Angeles. After recently launching Christmas-themed experiential AR filters in Santa Monica, it is now growing its seasonal offerings and planning for more brand partnerships.

• Future’s environmental goals were part of a broader “Responsibility Strategy” document unveiled Thursday. The strategy includes targets around transparency, using the publisher’s portfolio of brands to “amplify and promote issues” related to environmental protection and social justice  
• The documents included audits and evaluations of Future’s greenhouse gas emissions, as well as its prospects for achieving neutrality. 
• Earlier this week, Future announced full fiscal year earnings of $802 million, up 79% year over year, with much of the gains driven by acquisitions it made of brands including 12 Dennis Publishing titles and Marie Claire’s U.S. operation; organic revenue grew 23%, Future said.

A green year

Thanks in part to COP26, 2021 was a year when companies in the media industry began to speak more publicly about what they were doing to reduce carbon footprints and the environmental impact of their business operations.

While some publishers have gotten involved — BBC Future Planet, a small sub-brand within BBC News, spent the year sharing what it learned about trying to make its own vertical carbon-neutral — agencies have been out in front of signaling they are serious about the environment: The media agency Essence, for example, introduced a carbon calculator designed to show clients the carbon impact of their media plans, and a coalition of publishers, agencies, broadcasters and analytics firms rolled out DIMPACT, a tool that calculates the greenhouse gas emissions associated with serving media content.  

Future is not the only media company with publicly stated carbon neutrality goals. Both BBC and Condé Nast aim to become carbon neutral by 2030; in October, Axel Springer, through its support of different subsidiaries, aims to become carbon neutral by 2023.

Outgrowing (some of) the problem

To some extent, Future is hampered by ongoing study of how the media supply chain generates greenhouse gases. But its executives are likely pleased by one of their audit’s key findings: as Future has grown, it has become more efficient. The intensity ratio of its greenhouse gas emissions, which compares the tons of greenhouse gas emitted by business operations to millions of pounds of revenue generated, have dropped steadily as its revenues have grown, according to documents it released Thursday. 

From 2020 to 2021, Future’s intensity ratio fell 29%.

“This has resulted in many prominent esports organizations announcing their expansion into mobile esports and signing on more mobile esports players,” said Carlos Alimurung, CEO of Southeast Asian esports media company ONE Esports. “For example, Alliance, Nigma, T1 and Team Secret, who originally focused on PC esports, have started building their mobile esports teams.”

Organizations aren’t the only segment of the esports industry gearing up for the expansion of mobile competition: last week, Digiday covered esports league ESL Gaming’s push to build a mobile esports framework.

The activity of both organizations and leagues in the space is driven by the same impetus: Riot Games’ clear commitment to turning Wild Rift into a bona fide esport. “We’re dedicated to mobile esports,” said Jordan Sherman, president and chief commercial officer of Immortals, “so we’re going to support what Riot wants, and be partners with them in it.”

Casual play is still the predominant form of mobile gaming, but the mobile market is rapidly growing, pushing non-mobile game developers to stake a claim in the space.

Wild Rift surpassed $150 million in lifetime revenue last month, but Riot Games is planning for a future in which the game brings in billions of dollars a year, much like its older sibling League of Legends. “When we launched League of Legends and then LoL esports, 10 years ago, there were no expectations, right?” said Leo Faria, head of Wild Rift esports at Riot Games. “We were a small company, building everything from scratch. And now, I think people have come to expect a certain level of investment in quality coming out of Riot.”

Riot is well aware that other actors in the esports industry are following its mobile lead.

The increase in signing activity that came after Riot’s announcement of the $500,000 Wild Rift Horizon Cup in November was an intentional play by the company. “When it comes to building our ecosystem, our goal is actually to make sure teams and esports organizations can actually be sustainable and make a business out of it, that people can have careers and be well-compensated throughout the year,” Faria said. “And not only have one team making a lot of money on a specific event — the focus is much more on stability and sustainability, versus just having a huge prize pool.”

In terms of viewership, League of Legends is the most popular esport in the world, and Riot Games has demonstrated that it can successfully transform a multiplayer online battle arena game into a full-fledged lifestyle. Whether the company will have the same success with Wild Rift is yet to be determined, but esports organizations and leagues alike are ready and willing to follow Riot into the breach. 

“I don’t know what their specific plans are with that, but I know they’re as dedicated to Wild Rift as we are,” Sherman said. “I would be excited about more non-traditional ways to push the envelope the way Riot has, in terms of making the game a social experience. That’s where we really want to work with them.”

It’s a move the company is making as the e-commerce spaces continues to heat up, especially as the pandemic has pushed more people to shop online.

The shift comes alongside a new global campaign, Be Sweet Today, which emphasizes people shopping for everyday items instead of focusing specifically on the holidays. Currently, the brand’s media mix leans heavily in linear and digital television, programmatic display and video, followed by paid social and digital audio with a bit of print and out of home, per Farid Silber. There are also lower marketing funnel mix tactics to convert new and returning customers via paid and organic search, affiliate marketing and conversion-focused paid social and display campaigns, she added. 

It’s unclear how exact ad dollars are being spent as Farid Silber declined to offer details. Per Kantar, Edible Arrangements spent just under $6.5 million on media from January through September of this year, up from the $5.4 million spent through that same time period in 2020 and $4.4 million in 2019. Those numbers do not include social media spend as Kantar does not track those figures. 

In 2019, Edible Arrangements was in the midst of upgrading its e-commerce capabilities, per previous Digiday reporting. At the same time, Farid Silber said the brand was primarily focused on lower-funnel marketing tactics to get shoppers to buy. Still, sales were falling and to turn it around, Edible Arrangements needed to inject more personality into brand copy and show customers everyday use cases, she added.

“It was a challenging time for us in 2019. Sales were down double digits. We were trying to figure out how do we start to turn this brand around because there was a lot of value here,” Farid Silber said. 

Since rolling out e-commerce offerings and a new media mix, the brand has won brand recognition and dollars from younger shoppers, including Gen Z, she added. 

It’s a strategy more direct-to-consumer brands are picking up, exploring full-funnel marketing tactics to discover new channels and thus, new audiences, according to Meryl Draper, CEO of Brooklyn-based ad agency Quirk Creative. This is especially true post-pandemic, she added.

“Brand is starting to become a part of the conversation again this year,” Draper said. “It’s that shift back to, ‘We’ve got to do performance-driving tactics, like lower-funnel tactics. But we also have to now rebuild our brand equity and tell our brand story.’”

As more brands return to brand storytelling, video will become increasingly popular, especially CTV and OTT, which offers attribution and measurability, per Draper.

Going forward, Edible Arrangements will continue to hone in on Gen Z and the next generation of shoppers, per Farid Silber.

“We have something that works for them when it comes to pricing and category, and that’s exactly what we’ve been able to do over the last year, which we’re really proud of,” she said.

Two years ago, Reach launched its brand safety tool Mantis, which scans and collects data to ensure content is appropriate for advertising. During the pandemic, the tool was used by advertisers to align with positive COVID-related stories, instead of blocking that content.

This led the company to develop Mantis Contextual to collect data on the interests of people coming to Reach’s websites, as well as the launch of Reach Plus, which builds audience segments for advertisers. If someone is reading content about moving, for example, they can be placed in a “Furniture Plus” segment and are likely to be in the market to buy a new sofa, Hornsby said. Mantis collects 125,000 data points a day. Hornsby said the tools will also help lead the company into a cookie-less future. “That sets us up for 2022 and 2023,” he said.

This conversation has been edited and condensed.

What did Reach do to hit its user registration target ahead of schedule?

We never really changed our strategy. We just needed to understand our users more and give them a reason to sign up with us, and trade in their registration. People who are looking at royal [family] content, can now sign up for the royal newsletter. That’s been our aim, and that’s what we’ve continued to do. Commenting and newsletters have been big drivers. We are providing local news to people, with [local news aggregator platform] In Your Area and people are also subscribing because of that. In the pandemic, people were really trusting of the local news, and our regional and local business is very strong because people turned to local and trusted brands, looking for things like, is the local restaurant open?

We are getting people to engage with us, and ultimately that means more page views, more opportunities for advertising and performance, and then advertising grows, so it’s a circle. It starts with the data, and that data feeds into the loop.

How are you working to close that 2 million gap?

We can tweak and change and deepen the tools we’ve already got. We have really good data around behavioral advertising but we can apply that to editorial, to look at trends last month versus this month, for example. To see what type of content people were spending more time on than with others. For the royal family, we can see with each member of the royal family how many page views they get. We write a lot about [Prince] Harry, but Kate [Middleton] was generating more page views, so we are doing more of that. We can’t find that element all the time, but it’s about identifying those trending things. 

As a business, our success is driving for that one goal to understand the user better, to make every area of the business perform better. There [are] lots we can do. There are other tools editorial and we could use. Next year, we are going to personalize experiences, with things like content recommendations, content samples and how people looking at certain sections [on the website] are more likely to like something else.

Is there a date by which Reach wants to hit 10 million registered users?

No, I wouldn’t be able to put a date on it. Our point of view is, we will get there as soon as we can and build on that. We want to just keep going, understand our users more and make sure our users are there engaged with us and signing up for more products. The more digital products people can sign up to, the better. This leads us to personalization next year, so we can start to personalize people’s experiences.

You’ve mentioned personalization as something Reach will implement more in 2022. Are those some of the new tools that will help drive more registrations as well?

Our endgame would be to kind of keep evolving the personalization so that people see the content that they have come for, or that they would like. We want to get to a point with a page where this is “home” — this is where all my content is, I’ve told you I like American football, NBA and [TV show] “Made in Chelsea” — and then we go: here’s all that. That’s where we want to get to.

For us, we are in a unique stance where we do have Mantis and understand not just the category [but also the context]. A lot of publishers say: that person likes sports because they visited the sports [section] in the last 30 days. But that’s not it, because you could fall on the sports section but it’s not really what you wanted or came there for.

What’s getting in the way of getting to that point?

It’s about mapping and understanding the data. That’s the big thing that takes time. Next year, for publishers it’s going to be about data and the storytelling and understanding people’s life points for consumption. If you’re in the market to move house, you might read very heavily house content — where to live, schools, crime rate — but actually, it’s not a long-term personalization for you. There’s a difference between short-term and long-term personalization. You want to go to a restaurant in NYC, so you’re consuming top 10 restaurants in New York, but two weeks later you might want to go to Chicago and have a meal there. For us, it’s about understanding that data, which is why we’re not there yet.

That makes sense to me — I got married in July and am still getting served wedding content and ads!

That’s what we want to avoid. There’s always going to be short-term data points. This really hit home for me during the pandemic. A person might be interested in buying a BMW, but in a short time is going from that to being jobless. They might be reading BMW content one week, and the next week is reading “how do I have the best interview.”

The job for us as publishers is: here’s the stuff you want to read when you need it, and here’s all this other evergreen stuff. We have mind-mapping sessions every week, to look at what different patterns tell us. The next evolution of storytelling is looking at that data and seeing what stage of life [the person] is in and what they’re consuming. The exciting stage of next year is personalizing the content and advertising journey, to make you want to engage with us, and say, “Wow they really understand me. I want to register for that.”

We’ve gone so far from the old retargeting. Contextually — without cookies, without retargeting — you can tell a lot about where somebody is in their life and what they want there and then, and our agility to provide that will be key. And with a platform like ours that does such a breadth of content — we can do fishing content if someone is interested in fishing.

Reach’s latest earnings report also attributes Google’s single sign-on feature to growing registered users. When was that added, and how big of an impact did it have?

That was added a few months back. There are many different touchpoints for sign-ups. We call them “skinny” and “full.” “Skinny” are the one-click sign-ups people are used to doing, such as newsletter sign-up boxes that can provide an email straight away. And then there are longer-form ones, like competitions or that tell us more about their profiles. But the main driver [of sign-ups] for us was newsletters and In Your Area. Anything that was a value exchange for our products. We also have the OK! Beauty Box [monthly subscription] that people sign up with their emails, so there are many products we have to help drive that registration number.

Are you doing anything to convert those Google-based registered users into direct registered users?

No, whenever someone’s on our platforms they have the opportunity to sign up to all of our products. Registered users are more likely to come back and register to our other products. In other words, if they register in one place, they’re likely to register for something else. It doesn’t matter to us. It’s more them declaring what they want to register for, and showing us an interest in that product and we can start to personalize their journey.