Month: December 2021

As the year has worn on, both agencies and publishers have figured out how to do their jobs remotely, and many agency employers apparently feel that having at least a partially remote workforce is just fine. About a third of agency professionals now say they can work from home permanently, up slightly from the beginning of the year, when around a quarter said they could.

This year, brands like McCormack, Venmo, Away, Benjamin Moore and Le Creuset have worked with Sanctuary to create custom branded content — including matching paint colors, spending habits or cookware to specific astrological signs — that’s then posted on Sanctuary’s Instagram page. The same in-house team, which has roughly 10 people, works on the brand’s content for its social channels as well as on branded content with partners.

Doing so helps maintain its signature voice and visual style, which Clark said is key to the success of its brand partnerships. Last year, Sanctuary secured eight brand partnerships and grew that to 20 partnerships this year — representing a 140% YOY growth.

“We find that brands really want to lean into our voice and illustrated style, lean into the playfulness that we bring to the content in the partnership,” said Clark. “We have ideation sessions with brands where we’re working through ideas. We have an initial conversation to figure out what product or message they want and we’ll come back with a couple ideas in our format.”

The brand partnerships are part of the company’s overall marketing strategy, which is mostly focused on organic content rather than paid advertising placements. It’s unclear how many paid subscribers or users the app has as Clark said Sanctuary does not share subscriber or user figures. Subscribers pay for personalized astrology readings and the cost varies by the length of the reading with 10 and 15 minute readings the most popular.

“By selectively partnering with brands and clients whose audiences overlap in part with our own, we’re able to expand the reach of both brands,” said Clark. “We also custom tailor both content and deployment to maximize reach for campaigns to mutually benefit both our channel and our client’s channel growth.” 

Working with well-known brands can “give them more legitimacy” and “helps them stand out as a true brand from all of the astrology meme accounts,” explained an influencer agency exec who works with brands to help them tap into millennial and Gen-Z audiences. They spoke to Digiday anonymously so as to protect those relationships.

Even so, the exec believes the partnerships are likely a “bigger benefit to the brand side to look like they’re in with what Gen Z is interested in.”

Noah Mallin, chief strategy officer at IMGN Media, echoed that sentiment. “Astrology content is huge for Gen-Z and is highly shareable,” said Mallin. “It’s smart [for brands to partner with them] because they are getting into a space that gets a lot of repeat users and has less brand clutter.”

It’s all about “a tone and a vibe that isn’t so stressed and harried and so intense,” Aguilera said, one that says, “‘This is important, but we can sit down with a cup of coffee or sit down on the beach and listen to a podcast.’” She described the “west coast sound” that she is aiming for with the L.A. Times’ podcasts as “more colloquial and informal in tone, less concerned with the prestige of itself and more concerned with connecting to its audience.” As an example, Aguilera pointed to “The Times” host Gustavo Arellano occasionally breaking into “Spanglish” during the show.

The L.A. Times has an opportunity to turn its podcasts into a multi-million dollar business, according to Glenn Rubenstein, founder of Adopter Media, a Bay Area-based podcast advertising agency. 

“We’ve turned down a couple million dollars [from clients] who wanted to reach a base in Southern California and we didn’t have a really good option for that,” Rubenstein said. “We have advertisers all the time that call us and say ‘We’ve never advertised on podcasts before, we have a budget, we are very interested, but we only want to focus on the Los Angeles market.’ I think that L.A. Times, being such an established name and a giant in West Coast media, can tap into all of these dollars that have no place to be accommodated at scale.”

Shani Hilton, managing editor for new initiatives at the L.A. Times, said “The Times” podcast “is growing significantly,” but she declined to share any listenership stats. On Thursday afternoon, the podcast ranked #32 in U.S. daily news shows on Apple Podcasts, according to Chartable’s rankings.

The L.A. Times hasn’t produced many new shows this year, in part due to the change in podcast leadership, according to Hilton. The publisher’s former executive producer for podcasts and audio, Abbie Fentress Swanson, left for CNN Audio this past summer. “There are definite plans to grow. We have jobs posted currently, and there are jobs we are planning to post … I would expect the team to probably double” next year, Hilton said. For now, Aguilera is leading a team of two narrative podcast producers, two engineers, and six people on “The Times.”

In 2022, the L.A. Times plans to expand its podcast portfolio by producing a mix of deep-dive limited podcast series and shows with a more seasonal and regular cadence, Hilton said. The former host and producer of New York Magazine’s podcast show “The Cut” and interim executive and senior producer at Condé Nast prior to that, Aguilera sees space for a podcast in the “cultural entertainment space” — one that’s a “happy medium” between the deeply-reported narrative shows and the conversational, inviting nature of a talk show. “What I want to stay away from is the engaging talk show hosts shooting the shit on something that’s culturally-based. It’s a little overdone,” she said. 

Aguilera also wants to continue developing more shows from the investigative arm at the L.A. Times — which can also lead to additional revenue sources, should a series become popular and get licensed. “There are so many good investigations coming out of the L.A. Times that are just ripe for audio storytelling,” she added. Popular true crime podcast series like “Dirty John,” which was a partnership between Wondery and the L.A. Times that went on to become a TV series, “can generate a lot of revenue based on IP development, advertising and having a long tail of listenership,” Hilton said.

Those additional revenue sources could help to offset a challenge the L.A. Times faces with advertisers: It does not offer host-read ads. “So many of our clients… want that host-read endorsement,” Adopter Media’s Rubenstein said. Direct-response advertisers in particular are looking for podcast hosts that can become “an evangelist” for the product they’re advertising, he said. But news publishers’ shows often don’t have their hosts reading ads, due to a “church and state separation” between “a reporter and the messaging from a brand,” said Hilary Ross, vp of podcast media at audio agency Veritone One, in an interview in April.

100 Thieves’ decision to pursue mergers and acquisitions reflects an increase in M&A activity that is already underway across the esports industry. As esports companies expand their offerings in search of cohesive and profitable business models, the acquisition of new companies can help bring in fresh ideas and new revenue streams.

Before acquiring Higround, 100 Thieves had never acquired another company, preferring instead to partner or license with separate operators in the industry. But early conversations between 100 Thieves and Higround founder Rustin Sotoodeh revealed a slew of parallels between the companies’ design-first philosophies. After a few handshakes, the Higround crew began setting up shop in a corner of 100 Thieves’ Los Angeles headquarters. “We thought, ‘let’s create a really awesome brand that celebrates gaming culture and elevates it.’ And as soon as 100 Thieves heard that, they were like, ‘oh, shit, that’s literally what we do with apparel,’” Sotoodeh said. “So it was a match made in heaven.”

Before 100 Thieves acquired Higround, M&A was not a priority for the organization, with a streetwear-inspired aesthetic that gained it legions of fans within both the creator and competitive sides of the gaming community. “100 Thieves didn’t have a deliberate M&A strategy, where we were going out and looking for acquisition opportunities to grow the business,” said 100 Thieves COO John Robinson. “Our existing business is doing extremely well across all the verticals that we have.”

This is no longer the situation at 100 Thieves. Its first merchandise drop in conjunction with Higround, a capsule collection of keyboards and apparel, sold out in a matter of minutes. With the success of its first acquisition still fresh in mind, 100 Thieves hopes future deals can lead to similar outcomes. “The Higround acquisition is illustrative of the types of expansion opportunities we see for 100 Thieves,” Robinson said. “We expect to earmark a significant portion of the Series C raise for additional acquisitions and launching new businesses.”

Over the past few years, M&A activity has increased slowly but steadily within the gaming and esports space. Mergers and acquisitions can be particularly helpful for esports organizations, some of which have pivoted to become one-stop-shop event production firms or brand studios, rather than mere competitive teams emulating traditional sports companies.

These days, veteran esports organizations such as Enthusiast Gaming and ReKTGlobal are vying to become the Berkshire Hathaways of esports, acting both as owners of competitive teams and holding companies containing a diverse array of businesses. “Informally, from my perspective, I’ve seen our investor activity increase the more we’ve leaned into these acquisitions,” said ReKTGlobal chief creative officer Kevin Knocke, “especially because the acquisitions that we’ve been doing were profitable, revenue-bearing companies, in an industry where there wasn’t a lot of stability.”

At the moment, 100 Thieves isn’t planning to follow a similar path. But it is far from the only prominent esports organization to indicate interest in ramping up M&A in recent months. Shortly after FaZe Clan went public in October, its CEO Lee Trink told Digiday that the organization would use the funds it raised to acquire other companies. “We’ve had early success in both apparel and non-apparel, and we’re going to fuel that,” Trink said. “There will also likely be acquisitions in that category.”

While 100 Thieves’ M&A strategy is not as far along as organizations such as Enthusiast Gaming, which owns the prominent esports team Luminosity Gaming, 100 Thieves’ focus on philosophical parallels is a wise move, according to Enthusiast CEO Adrian Montgomery. “There absolutely has to be a philosophical alignment,” Montgomery said. “One of the things that we’re very disciplined about is that, when we bring a fan community into the fold, the sum of the parts at Enthusiast is greater than the individual parts themselves.” 

Montgomery cited the example of the well-known online game site Addicting Games, which Enthusiast acquired for $35 million in September. “Within two months of acquiring Addicting Games, if you’re on Twitch, you’ll notice Sodapoppin and xQc and Luminosity creators playing Little Big Snake [on Addicting Games],” Montgomery said. Thus far, the acquisition has paid off: in Q3 2021, the company reported record revenue of $43.3 million and a jump to 207,000 total paid subscribers, an increase that Montgomery said was driven by Addicting Games’ lucrative subscription service.

Whether through focused acquisitions or Berkshire-Hathaway-style expansion, M&A is sure to be a continued component of esports companies’ business plans as they diversify their revenue streams and work to satisfy their investors, public or private. In a gaming and esports landscape filled with young, easily distracted consumers, acquiring new businesses allows the largest esports organizations to stay nimble and relevant — as long as there is a philosophical alignment.

“More than anything, 100 Thieves is very deliberate about what we do and what we don’t do,” Robinson said. “And I think it speaks a lot to our convictions, both in the hardware space as well as with the team at Higround. That is the reason and justification for doing this.”