Month: January 2022

Daniella Pierson founded the daily lifestyle- and business-focused newsletter, The Newsette, while on break during her sophomore year of college, and over seven years, has turned it into a $40 million business. That’s thanks to, she said, a subscriber base of 500,000, that helped lead the company to end 2021 with a profit worth eight figures.

Now, the 26-year-old entrepreneur, who also serves as the CEO of the media company, is planning to invest millions of dollars throughout the company to grow the business this year, including the newly formed creative agency arm, called Newland.

On the latest episode of the Digiday Podcast, Pierson acknowledged that growth didn’t come without challenges: “It really was touch and go until the last few years,” she said, and her team only recently doubled in size this year to 25 people. It’s “really important for young entrepreneurs to know that just because something isn’t taking off and making millions of dollars a year or two, doesn’t mean that it can’t and year five.”

Pierson herself is also channeling her entrepreneurial spirit in new ways this year by working with co-founders Mandy Teefey and Selena Gomez to create Wondermind, a start-up centered on democratizing access to mental health care that operates a production studio, media arm and product business.

Below are highlights from the conversation, lightly edited for clarity. 

Growing ad revenue exponentially through a pandemic 

We started working with Fortune 500 clients in a bigger way. [We were] showing them [that] you could spend $100,000 on this website, where they say they get 20 million impressions or views a month, but what does that really translate to in an article? If you are one of 5,000 articles on that website that gets published every single month, do the math — you’re ending up with not a lot of readers on the article. And so I think when people realize how much more powerful advertising with us [is], and how many more eyeballs and more engagement and more clicks we are able to drive, that was a huge sign for them that they should continue to invest a lot of money. I almost feel like there’s this incredible wave now, where people are seeing newsletters as the solution to that dilution of audience that a lot of traditional websites provide.

Quality over quantity

We’ve been so focused on cleaning our list, so unlike other newsletters, where every year it grows by 500,000 or a million [subscribers], we’ve been really focused on having the best 500,000 people on our list. Then we’re able to show clients, “Look how many people are looking at your content. Look at how many people are clicking.” Maybe other email newsletters are just trying to grow the top number, and not really purging so that their top-line number can be big. But then when people see results, it’s a little disappointing. 

Turning advertisers into agency clients 

The reason why we are spending millions of dollars to grow not only the media business but also the agency business this year is because every single client we have for the agency business came from the media side of the business. And now we’re finally opening ourselves up to capacity to choose a select few clients that maybe we didn’t have on our radar before, who fit what we’re trying to do and are excited about the amplification that we do. 

We’re also able to strategize the creative, but also the amplification, by handling the strategy, the creative, the social, paid social strategy, and the PR holistically. And that combination of offering all makes it so that the CPMs are lower for clients [and] we over-deliver on impressions. That’s really the magic of being able to have one team really care about this as if it was a media company, and really just hone in and figure out how we can make it win for everybody.

ReKTGlobal’s relatively early push to diversify its holdings has paid off thus far. The company’s co-founder and chairman Amish Shah estimated that ReKTGlobal generated revenues of about $15 million last year. Though ReKTGlobal doesn’t boast the valuation or brand-name status of more prominent esports companies such as FaZe Clan and 100 Thieves, its business model might be years ahead of its more well-known contemporaries. “Right now, the marketing services and talent management business is where a majority of our revenues come,” Shah said. “I’d say two-thirds of our revenues come from there. The other third is from the gaming side right now — but we think that will start balancing out as the franchisees get media rights deals and big sponsorship deals.”

“The idea behind building this business was basically to provide picks and shovels, or infrastructure services, to a market that had very little back five years ago,” said ReKTGlobal CEO and co-founder Dave Bialek. Rather than burn through capital to build those services on its own, the company, which is based in New York City, began acquiring other esports companies as early as January 2018, when it purchased popular esports team Rogue.

With Rogue in its back pocket, ReKTGlobal’s next string of acquisitions fell like dominoes. “We found that a lot of companies were coming to us and saying, ‘you have these esports franchises. Well, how do I get into esports? How do I start to access this space?’” said ReKTGlobal Chief Strategy Officer Kevin Knocke. “From that, we acquired a creative services team that was already working with esports and gaming clients. After we had enough of those, clients started asking, ‘how can I create my ecosystem? How do I do stuff myself?’ So we acquired [fan engagement platform] Fullcube, which gave us the ability to have an engineering team in-house.”

The ReKTGlobal that exists today is arguably more of a holding company than an esports infrastructure firm, encompassing both well-known esports teams such as Rogue and influencer-focused departments like the talent management company TalentX, which runs Sway House, an infamous TikTok influencer collective. The company also operates a lucrative marketing services business under the ReKTGlobal name.

“We own teams, and we have influencers, and we have this robust roster of talent that we can learn and collect data from,” Bialek said. “That’s really unique in the marketplace.” This broad view has equipped ReKTGlobal to connect a slew of non-endemic brands to the gaming space, with the company providing the infrastructure services to help set up esports booths at music festivals and guide partnerships between prominent non-endemic brands (such as State Farm and Live Nation) and the major esports leagues.

At the moment, ReKTGlobal’s biggest challenge is its lack of household-name status. Since its marketing services department operates under the ReKTGlobal name, Shah and Bialek believe it is important for customers to understand that the company’s gaming and esports marketing chops come directly from its own involvement in the space. This lack of brand recognizability is perhaps the most significant downside of ReKTGlobal’s commitment to diversify its business models from the start, and is one argument in favor of the brand-first strategy followed by some other esports organizations.

“There’s an attempt to make ReKTGlobal known as a brand — but not in a way that it becomes a big consumer lifestyle brand,” Knocke said. “I think it serves us in the same way that people recognize what an Endeavor is, or recognize what any other sort of agency is that holds together a few different intellectual properties and things like that.” Endeavor began as a talent agency before morphing into an agency holding company; the agency holding group WPP started out as a shopping basket manufacturer in 1971, going through many iterations before reaching its current form. Knocke and his colleagues at ReKTGlobal are comfortable with their gaming and esports business evolving in the same natural fashion.

Many leading esports orgs and their parent companies have built strong brands over the past few years, but are only now navigating how to become sustainable as actual businesses. ReKTGlobal is in the opposite position: it’s a diversified business with growing revenues, but had to burn some brand recognizability to get there.

In spite of these challenges, other esports organizations looking to crack the puzzle of profitability might be wise to look at ReKTGlobal’s model. “We are a bit of a holding company,” Knocke said. “But more and more, we have grown towards a more cohesive identity, integrating across all the various verticals.”

More than one fifth said they’ve changed their strategies in the past year, and over 40% said they are exploring how they might do so. About a third of respondents — 36% — said that they had not done either.

The topic of agency remuneration has been simmering topic in recent years, ever since the Association of National Advertisers published a blockbuster report alleging that agencies were lining their pockets with kickbacks and rebates. The precise focus of the conversation has shifted a few times since then, as concepts like fee-for-service grow more prominent.

In the fourth quarter of 2021, Digiday polled agency professionals about a number of different topics, including the kinds of services they provide and how they charge clients for providing them.  

50 agency professionals with knowledge of their employers’ billing practices responded, and their answers paint the picture of a world where remuneration practices are in flux. 

Respondents were asked to select all that applied from a set list of options, including project-based fees, hourly fees and performance-based fees. The respondents made 78 selections, indicating that on average, each respondent selected more than one option. 

Project-based fees, with 39 selections, were the most common choice, followed by hourly fees; 10% said they take retainers from clients.

That varied picture partly reflects the reality that most agencies provide an array of services. The same respondents, when asked to indicate what kinds of services they offer to clients, made 154 selections from a list of services that included media buying, consulting, creative, public relations and performance marketing. 

Brand accounts have to go beyond just sounding like people and find ways to stand out — i.e. why Duolingo leans into “unhinged” content on TikTok — so that people will pay attention. It’s easy to see then, why marketers and brand managers are pushing the envelope on social posts as people likely wouldn’t pay attention otherwise. 

But recent posts, like Pabst Blue Ribbon’s sexually explicit tweet that got its social media manager fired as well as brands like Ruggables, Hellman’s mayonnaise and Peacock, among others, jumping into TikTok’s West Elm Caleb trend on TikTok (a man who allegedly works for West Elm who was dating, ghosting and sending explicit photos to several women in New York City went viral for those behaviors with women making posts to warn each other about him) have some in the industry questioning were the line is when it comes to standing out or going too far on social media. 

“West Elm Caleb content is a perfect example of brands doing something just because other users on the app are doing it,” said Lauren Murphy, social strategist for Deutsch LA. “If your brand has a clear strategy and social voice, then you don’t need to make content for the sake of shock value or to be trendy.” 

Murphy continued: “Any piece of content your brand puts out there should feel like it’s coming from your brand. If you removed the logo — would it still relate to your audience and does it still make sense that you’re posting it compared to any other brand? Also, brands, do you want to be a brand making fun of a 25-year-old guy who has been ghosting women on dating apps? It feels wrong just to hop on trends without considering the power and responsibility brands have online.” 

While some in the industry believe that “standards of some sort must apply,” as Cristina Lawrence, evp and head of social at Razorfish put it, others say that brands will likely continue to push the envelope because that’s what gets noticed online.

“For brands trying to make a cultural/social splash, the trend is for social brand voice to be out of character but not far off from the internet language of their target,” said Nick Meyer, director of social strategy at Campbell Ewald, adding that Wendy’s started the shift in brand voice and that many marketers wanted their brand to “be Wendy’s” online.

Meyer continued: “The issue in fulfilling that brief is that the line moves every time someone finds it for the first time. Brands must keep toeing the line and every time another has to take one step further over it to be noticed. In the social landscape, ‘bad behavior’ is positively rewarded.”

One social media manager for a brand that’s gone viral for its brand voice echoed that sentiment. “PR agencies have figured out that online mobs usually lose their steam after a day or so,” said the social media manager who asked for anonymity due to the sensitivity of their job. “Brands have figured out that risky content is often worth putting out there because even if they get blowback people eventually move on.”

3 Questions With Kiavi CMO Cherie Yu

How has the current housing market impacted Kiavi’s marketing strategy?

We’ve taken a technology and data-enabled approach to serving real estate investors by building a lending platform that’s designed for the digital age. Our marketing strategy is designed to help real estate investors across the country understand the benefits that Kiavi’s platform can unlock. With over 35,000 projects under our belt, we also seek to share insights and trends with our customers to help them navigate the ever-changing housing market — whether that’s through connecting with our expert team, or joining one of our educational webinars, or reading about lessons from fellow real estate investors on our blog.

Why rebrand now?

It is not just a name change [the company was formerly known as LendingHome] but a strategic direction for the business. As we look ahead, we are excited to expand the ways we serve real estate investors. With more than $8.7B in loans funded, we see a lot of opportunity to support our customers throughout the entire real estate investing lifecycle–from finding and acquiring the property, through the renovation, to the ultimate sale or rental of the home.

What was the process of rebranding like coming off a turbulent 20 plus months?

The transformation required touching all aspects of our business, which meant a lot of hard work and collaboration across the organization, including marketing, design and product, customer facing teams and more. That meant overhauling the website and app, every email, every touchpoint — even the way we answer the phone and the business cards we hand out. — Kimeko McCoy

By the numbers

Society’s push for brand purpose has continued to broil as shoppers pressure brands to take a stance on everything from women’s reproductive rights to the Covid-19 pandemic. The next 12 months will be more of the same as more than half of consumers across the globe plan to boycott brands that fail to take action on climate change, according to new research from Dentsu International and Microsoft Advertising. For more, find key details from the report below:

• 45% of people surveyed say they would consider alternative brands, companies or services which are greener or more environmentally friendly than their current choices.
• 30% of those who took the survey say they are willing to pay more for brands which offer those greener alternatives.
• 42% of people surveyed now think companies should provide clear, comparable information on the footprint of their products and advertising in order to make them greener. — Kimeko McCoy

Quote of the week

“What’s good for people is good for business and the more companies recognize this, the more they will do to keep their employees, particularly women, in the workforce.”

— Alison Morra, chief operations officer at Inkhouse, on the need for companies to provide time off for employees who experience pregnancy loss.

What we’ve covered

• What agencies are doing to stay relevant in the metaverse.
• Everything you need to know about the consolidation happening in gaming.
• How brands are working with Sundance for another virtual festival.