Month: February 2022

“As costs have come up on Facebook and Instagram, and the impact of iOS14, we want to understand what other areas we could take advantage of in order to even out our media mix,” Fredlender said. 

The seven-year-old, California-based direct-to-consumer company has spent the last two years shifting spend across marketing channels to create a more balanced mix and ensure the brand is not over-allocated in any one place. At present, the company spends evenly across digital, podcasts, influencers, TV, streaming, search and direct mail, according to Fredlender. It’s unclear what the exact spend looks like as Fredlender declined to offer further details.

“As a growth marketer, our job is to really stay abreast of a lot of these rapidly moving changes in the marketing environment, marketing landscape,” he said.

That’s not to say Facebook and Instagram are not still part of the brand’s marketing mix. Ritual has ads currently running on both platforms, leveraging influencers and video graphic posts, according to Facebook’s ad library.

From January to September of 2021, Ritual spent more than $170,000 on paid media, significantly down from the $700,000 spent during that same time period in the year prior, according to Kantar. In 2019, the vitamin brand spent nearly $22 million on paid media. Those numbers do not include social spend as Kantar does not track those figures.

Ritual is one of a number of DTC brands looking to diversify its media mix. For the last two years, media buyers have been actively pushing to diversify away from Facebook and Instagram, according to previous Digiday reporting. For many, including Ritual, rising costs have been a large factor in that decision.

As technology continues to make targeting and measurement more viable on channels like streaming and digital out-of-home, it has caught the attention of brands like Vivid Seats and Adore Me. As DTC brands continue to diversify due to rising costs and privacy changes, marketers and agency execs say it’s necessary to do so.

“It’s almost hedging your bet,” said David Song, CEO at Rosie Labs ad agency. “It’s diversifying your funds. The better word is diversifying your media to make sure that you don’t have a negative [return on investment].”

However, there’s still value in maintaining an investment in social media advertising, according to Michael Hayes, chief growth officer at Goodway Group marketing company. Platforms have rolled out new products, like shoppability, to keep users on the platform, offering another way for brands to meet shoppers where they are.

“Ultimately, you want your brand to meet customers where they are and when consumers are most receptive to your message,” Hayes said in an email. “Each touchpoint should be intentional for brands, and doing so provides an agile, smart strategy to diversifying your media mix.”

As Ritual continues to grow, the plan is to shift and meet shoppers wherever they are, per Fendlender. 

“We found that if we keep a tight focus on that line of thought, we’ve been able to expand our current mix,” he said. “And expanding our current media mix means growth.” 

“If you were to look at the stories that drove the most subscriptions in 2020 versus the stories that drove the most subscriptions in 2021, you’d see more stories that are lifestyle and general interest in 2021, whereas 2020 was more politics and COVID,” said Nick Thompson, CEO of The Atlantic. 

Some publishers, like Gannett, Salon and The Atlantic, have not only noted these changes, but have begun acting on those reader impulses to hopefully drive traffic back to other areas of their sites in order to build loyalty and convince those readers to become paid subscribers. Among the actions they’ve taken are creating content specific landing pages and investing in producing more stories for those subjects, as well as closely tracking which portion of readers are returning to those categories. 

“At the very beginning of the quarantine days, people were absolutely coming to Salon to find out information about COVID-19. [But] we noticed that after those articles were consumed, people seemed to be more likely than not to click on something comforting,” said Justin Wohl, chief revenue officer at Salon. 

In early 2021, Wohl’s team decided to take the early stages of its food content vertical, which primarily featured licensed content, and turn it into a more established part of the site. Since then, Ashlie Danielle Stevens was promoted in May to deputy food editor from food and culture writer to focus entirely on food coverage. And Salon’s managing editor Joseph Neese has been tasked with growing this vertical and managing and the output of about four articles per week for the vertical, Wohl said. Specific widgets were also created for the CMS to format recipe instructions.

“Seeing an increase in the percentage of return readership that we have in any given month is a success metric for us that we’re looking at with our editors each month,” said Wohl. 

On average, 11% of Salon’s return readership navigated directly from food content in 2021 and 20% of all pageviews came from food content, Wohl said. From a revenue standpoint, the RPMs (revenue generated per thousand pageviews) of food content is 15% higher than the site average and 30% higher than news and politics coverage, Wohl added. 

Those return readers become particularly attractive candidates to sell subscriptions to, which is a secondary goal for Wohl’s team. The revenue per user from a subscriber far exceeds the revenue per user from ads, he said, but declined to share exactly how much RPU increases. Currently, Salon relies on programmatic advertising for nearly 100% of its total revenue. While Wohl said he doesn’t expect subscriptions to ever grow to upwards of 15% of revenue, that subscription revenue could help the company to offset the dip in programmatic buys that Salon experiences every year in the first quarter. 

On average, Salon receives 10 million unique monthly users, according to internal metrics, and less than 1% of that readership is a paid subscriber, but he added that the goal is to increase that number to 3-4% over the next couple years.

Meanwhile, The Atlantic has noticed that lifestyle and general interest content — particularly coverage for its ongoing “happiness” vertical — has been particularly successful in converting subscribers, Thompson said, though did not share conversion metrics for this content. And while this trend has been identified, it has not been turned into a deliberate strategy for furthering its subscription business. 

What has been done, Thompson said, is testing the site’s recirculation algorithm — the formula for suggesting which articles a reader should click on next in the side bars and below a story — because data shows that readers who visit more than one vertical are more likely than not to subscribe. No one test has successfully yielded impactful results, but it is an area that The Atlantic will continue experimenting with, he added. 

In 2022, Gannett’s USA Today Network is leaning into special interest coverage as well by producing topic-specific landing pages, such as true crime and health and wellness, that will round up decades’ worth of content on a topic or category that readers can peruse. Some of these content verticals will be free to all readers, but Mayur Gupta, chief marketing officer of Gannett, said many will also be paywalled products that are aimed at converting readers at known points of interest. 

“We have a massive portfolio of content that has an infinite shelf life, unlike hard news that has a very short shelf life,” said Gupta. “So a big focus is how do we create a destination where our users can come and discover these relevant topics, which are timeless,” in order to drive reach and awareness of the publishers’ content verticals and areas of coverage, not just news. 

Based on Gannett’s earnings report for the third quarter of 2021, digital-only subscriptions accounted for $25.7 million in revenue that quarter, up 27% year over year from the third quarter in 2020. The company also ended September 2021 with about 1.5 million total digital-only subscriptions, according to the last earnings report, but the goal for the end of the year was to hit upwards of 1.7 million. 

Gannett also launched niche, subscriber-only verticals — including its USA Today Sports+ content and app ($4.99 per month) and its crossword puzzle offering ($2.99 per month) — that home in on readers who are willing to pay specifically for content about those special interests. Those subscriptions are tied to each vertical and don’t extend to all of USA Today, for example. The company has not disclosed the total number of subscribers to the Sports+ and crossword verticals.

The idea is to eventually introduce an umbrella subscription that will cover all of USA Today Networks’ offerings, bridging the gap between special interest readers and news readers and encouraging them to interact with all of the publisher’s content. 

The New York Times announced a similar plan during its full year 2021 earnings call earlier this month that talked about bundling the Times with its newly acquired sports brand The Athletic. This will not only bring sports readers into the Times’ ecosystem, but will likely better lock-in readers during slow news cycles or in sports off-seasons.

In spite of these smaller figures, esports organizations with a large presence in the FGC consistently receive outsized engagement from the fervently loyal fan base of fighting game players. Halfway through 2021, Golden Guardians’ Super-Smash-Bros.-Melee-focused YouTube channel garnered more views than major League of Legends organizations such as 100 Thieves and Team Liquid, according to data pulled by Daniel Biery, director of operations for the Golden State Warriors, the Golden Guardians’ parent company.

“As someone who’s front-end and sees the response of our Melee fans daily, I literally cannot say enough about how happy we are with the reception,” said Golden Guardians social media coordinator Julian Pagliaccio. 

The key details

• The modern fighting game has existed since the 1987 release of Street Fighter, and includes long-running series such as Guilty Gear, Marvel vs. Capcom, Tekken and Mortal Kombat. These games are united by their shared two-player focus and the presence of “combos” combining strings of hand-to-hand attacks. The most popular fighting game in the world is Super Smash Bros; 14 percent of hardcore esports fans follow the Nintendo-made fighter’s competitive scene, more than any other fighting game, according to recent research by YouGov. “I’ll be explicit here: when I say fighting games, I do include Smash,” said Josh Marcotte, head of talent operations at Panda Global.
• Since Golden Guardians signed a roster of Smash talent in April 2021, the esports organization has focused much of its content and social media efforts on ingraining itself within the Smash community — and with great success. The org’s combined social media following has jumped by over a million over the last six months, according to gaming and esports data platform GEEIQ. Golden Guardians’ Smash players have spurred this growth by consistently producing organic and relevant content for the team’s social channels. “It’s no secret that Melee players need to produce content, stream, be likable, et cetera, to thrive in this space,” Pagliaccio said. “In a game like League, putting your head down and grinding 100 percent of the time can get you ahead on talent alone, but with Melee, things have always been a bit more content focused, regardless of how strong your results are.”
• Becoming a leading esports organization in the FGC was part of the game plan at Panda Global from the very beginning — and the org’s niche focus has directly helped it secure brand partnerships. “I think it comes with the packaging; being the organization we are, we can’t really walk into a room and pitch ourselves without saying that we’re seen as an authority in these communities,” Marcotte said. He credits this genuine brand identity for the organization’s partnerships with brands such as Geico and HyperX, in addition to its unprecedented partnership with Nintendo last year.
• Fighting games have a promising future. Riot Games is currently in the process of developing its own fighting game, codenamed Project L; if the explosion of the Valorant scene in recent months is any indication, Riot’s fighting game is likely to have an enthusiastic competitive scene from launch. The combination of the FGC’s long-running grassroots community with Riot’s logistical and monetary support promises to be potent indeed.

A lower, but longer-lasting, lift

Fighting games aren’t just an effective way for esports orgs to bring in new fans: they’re a relatively cheap investment, too. “Melee signings have great ROI mostly because it’s much more self-contained,” Pagliaccio said. “For a game like League of Legends, you need a whole facility, five-plus players, coaches, analysts, et cetera, just to start. For Melee, signing one promising talent is a great start in itself. Historically, we’ve seen tons of great responses when teams sign highly ranked players, like TSM Leffen, or C9 sticking with Mang0 for what feels like a decade now.”

Despite the relatively diminutive size of the competitive fighting game scene, some experts believe that the FGC is a better long-term investment for esports organizations than today’s more prominent, but corporate, esports leagues. “I believe that, pound for pound, Smash and the FGC is the best investment you can make in esports, bar none. I think every esports team should have, at minimum, one Smash player, and should be spending, at minimum, $100,000 to $200,000 a year on Smash Bros.; it’s just ludicrous not to,” said Arian Fathieh, a freelance esports caster and tournament organizer and former partnerships lead and esports program manager at Twitch. “And the numbers speak for themselves; Hungrybox is the most-viewed Team Liquid streamer. Smash guys get viewership.”

Getting butts in seats

In addition to their relative success in generating viewership, Smash and the FGC are particularly effective at getting players to attend live events as well. Traditionally, netplay tools for fighting games have been subpar, so players are accustomed to traveling to in-person tournaments to compete. Evo 2019 brought roughly 9,000 attendees to Las Vegas; the same year, the Dallas Fuel’s in-person Overwatch League “homestand” boasted daily attendance of roughly half that number. “Brands actually just really like live attendance, in general,” Fathieh said. “You bring a vp of marketing to an event, and they’re like, ‘oh, there’s 2,000 people here.’ They believe it’s real, rather than taking them to a studio show and saying, ‘trust me, there are people watching online.’”

As other esports look to crack the code for live events, they might be wise to take some cues from the FGC. “We have always had Smash events with modders and artists, and the FGC has a long history of artists’ alleys as well,” Marcotte said. “We’ve always had these tournaments — CEO, Combo Breaker, Smash Con — that were functionally conventions.”

The way the wind blows

In many ways, the fighting game scene has acted as a bellwether of sorts for broader trends in the esports industry. Unmoored from corporate game developers such as Activision Blizzard and Riot Games, casters and commentators in the FGC have developed an uncensored style over the years — “FGC and Smash commentators are generally more free to say what they want,” Fathieh said — that has buoyed streamers such as Ludwig Ahgren to mainstream success. Though Ahgren started out as a dedicated streamer in the Super Smash Bros. scene, he became the most-subscribed creator on Twitch before signing an exclusive deal with YouTube last year. “Ludwig, of course, came from Melee,” Marcotte said. “We credit him as part of our Melee community.”

The fighting game community is also more diverse than the broader esports scene, in part due to the lower socioeconomic barriers presented by gaming on consoles rather than the high-end PCs used in other esports communities. With esports orgs and game developers alike coming under fire for their toxic work environments and not-so-diverse workforces, engaging with an esports scene as historically diverse as the FGC could be a boon for brands looking to reach competitive gamers.

“There’s a higher presence of folks of color, there’s a higher presence of folks of lower-income — the spectrum ends up being really vast, where for some other esports, it’ll be a little more upper-class or middle-class,” Marcotte said. “On average, I think the FGC really does span a huge swath of humanity.”

The sales teams of Condé Nast and TikTok will work together to secure deals with advertisers for that content, according to Bree McKenney, svp of commercial marketing, creative and production (CNX) for U.S. and global brand solutions at Condé Nast. What exactly the publisher and platform will be pitching advertisers is “still in the early stages” of development, though, said Harish Sarma, TikTok’s global head of content business development.

The initial sales focus, per both companies, will be on securing sponsorships for live events, such as a live stream of a host getting ready for a big event. These can provide opportunities for beauty, tech or fashion product integrations, McKenney said.

This news comes after TikTok announced in November it had signed a year-long deal with BuzzFeed to premiere multiple live video series on the social media platform. It marked the first time TikTok worked with a media company to sell sponsorships against weekly live shows on the platform (TikTok is securing sponsors for BuzzFeed’s shows in that deal, starting out with product placement opportunities with advertisers like home appliance brand Cyetus). BuzzFeed has declined to say how much it has made off the partnership. The deal effectively serves as a pilot program for publishers to generate direct revenue on the platform.

“The parties will share in the campaigns sold to clients,” McKenney said in regards to the Condé Nast deal, adding that TikTok is “interested in working with [Condé Nast] to reach GQ and Vogue’s luxury advertising base.” Both McKenney and Sarma declined to share details about the financial aspects of the deal, including how the two companies will share the revenue. More information on advertisers and branded programming opportunities will be presented at this year’s NewFronts, McKenney said.

Fashion, retail and luxury advertisers could be a fit for the Condé Nast content produced for TikTok, as well as CPG and tech brands, said Adam Puchalsky, global head of content at Wavemaker. This deal, he said, is a combination of the “modern interpretation of programming and entertainment with shows produced in consumable formats for the platform, with trusted voices like GQ and Vogue who have been around for generations. I think it’s really smart… I would love for our brands to be a part of that experience.”

Hashtag challenges, video and print production

The deal took effect earlier this month when Condé Nast began posting content to GQ’s and Vogue’s TikTok channels to coincide with Fashion Month. Both companies said branded content deals are under development and did not name confirmed partners.

Having launched their respective TikTok channels in late 2020, GQ and Vogue (which have amassed more than 410,000 and 675,000 followers, respectively), are taking TikTok viewers behind the scenes and backstage for Fashion Month, featuring editors, models and attendees. Vogue and GQ editors will also host live streams discussing notable moments on the runway from the back of their cabs, with opportunities for surprise guest appearances.

The publications are also producing video series for their TikTok channels. Vogue’s video series will include “Make It Vogue,” which will feature one new creator every month recreating a fashion trend with their own style, as well as “The Get,” which will bring Vogue’s shopping guide franchise to TikTok with editor product picks and styling tips. GQ’s video series will include “GQ Best New Menswear,” where GQ writers and editors will highlight the new styles that viewers should add to their closets, and “Personal Practice,” a @GQSports show featuring athletes’ wellness practices, among other shows.

GQ and Vogue will also have style and body positivity hashtag challenges, encouraging participation from TikTok users. Vogue’s first hashtag challenge on TikTok, #MakeItVogue, which invited users to share their own take on the classic bustle, has generated more than 3.6 billion views to date, according to Sarma.

Condé Nast and TikTok have also collaborated on four-page print inserts in the March issues of GQ and Vogue, on newsstands now. The inserts contain 18 perforated cards that readers can tear out and clip together to create a flipbook animation tied to the titles’ respective social video challenges on TikTok. The GQ one features singer-songwriter Conan Gray and the Vogue flipbook stars model and Muay Thai fighter Mia Kang.