Month: February 2022

Multiple sources familiar with the developments told Digiday that Moelis & Company has circulated documents with third parties outlining the state of Amobee’s financials. Singtel’s ad tech subsidiary essentially consists of three business units that it acquired over several years, with potential outcomes including a wholesale sell-off of the company or even a break-up of the assets. 

A Singtel spokeswoman declined to comment. A spokesperson for Moelis & Company was unable to respond to Digiday’s request for comment by press time. 

In May last year, the Singapore-based outfit revealed that it had kicked off a strategic review of its non-telco assets, which also includes cyber security firm Trustwave. This took place after Singtel announced that it booked a $438 million “non-cash impairment charge” against its Amobee investment for the second half of the financial year ending March 31, 2021. 

In an accompanying statement, Singtel Group CEO Yuen Kuan Moon spoke of how the Covid-19 pandemic impacted performance over the period and that “we need to focus our strategic agenda” after “Amobee saw an almost year-long contraction in advertising spend by some of gate largest agencies its and advertisers in North America.” 

Now it would appear that process has moved along significantly with separate sources informing Digiday Moelis has been in contact with potential suitors with documents outlining its financial performance over the previous financial year when gross spend neared $700 million. 

However, Digiday sources that have seen the documentation said net spend on the Amobee platform ends up closer to $160 million with its demand-side platform understood to account for the vast majority of its revenue, close to 75%. The documents circulated by the investment bank indicate the remainder of Amobee’s revenue is generated by its TV planning and buying tools (for both linear and connected devices) as well its email marketing activity, according to sources.

A $1B investment

In its current guise, Amobee consists of three different units, the result of a six-year-long acquisition spree dating from May 2012 – two months after Singtel bought Amobee for $321 million –  to July 2018. This was a period of time that saw it collectively fork out more than $770 million in a number of deals. These included AdJitsu and GradientX (fees were not publicly disclosed), Adconion ($209 million), Kontera ($150 million) in a dual sweep, DSP Turn ($310 million), and Videology ($101 million). Singtel’s total investment in the Amobee platform is said to be close to $1 billion over this period.

Videology joined the fold as part of an auction process following the one-time video advertising giant’s fall from grace which culminated in its May 2018 Chapter 11 bankruptcy filing. Since then Amobee has gone about putting these assets to work with Digiday sources indicating that video inventory now generates close to 40% of the demand on the Amobee DSP.

For instance, the ad tech outfit struck a deal with ITV to launch Planet V whereby the U.K. broadcaster licensed its technology to help media buyers book inventory against VoD and live-streaming content on a self-serve basis.

More recently, Amobee partnered with RTL Group to integrate the pan-European broadcaster’s SSP with the Amobee DSP in a tie-up that was labeled as “TechAlliance” whereby the two would try to introduce the efficiencies of programmatic media trading to TV advertising.

Leadership changes

There has also been a number of changes at the top of Amobee in recent years with the exit of Kim Perell, the ad tech subsidiary’s CEO since 2016 who initially joined Amobee via way of its 2014 Adconian purchase, announced in late 2019.

She was immediately replaced as Amobee CEO by Samba Natarajan, a Singapore-based exec who also served as chief executive of Singtel’s Group Digital Life. More recently, Singtel named Nick Brien as Amobee CEO in July of 2021, just two months after it revealed its strategies review. 

In its annual report for 2021, Singtel confirmed that Amobee’s revenue dropped 18% compared to the previous year and that options it was exploring as part of its strategic review included “a full or partial divestment or business combinations with other industry players.”

Telcos’ great ad tech sell-off

Any deal to result from the ongoing discussions would add fuel to the fire of the M&A frenzy that has characterized the ad tech sector since 2021 after the economic uncertainty caused by the Covid-19 pandemic prompted a lull in dealmaking activity in 2020.

It would also represent a case of a telco parting ways with its ad tech assets after investing billions of dollars in the hope of the successful diversification of revenue streams to include significant amounts of media spend.

In the past year, this trend was spelled out with the high-profile sale of Yahoo to private equity firm Apollo Management by Verizon, meanwhile, rival U.S. telco AT&T drew a line under its ad tech aspirations with the sale of Xandr to Microsoft.

Both of these sales were understood to have come at a significant write-down compared to the telcos’ initial investment with concerns over privacy thought to be at the heart of both companies making a U-turn on their earlier strategies.

One source with intimate knowledge of the inorganic growth of Singtel’s ad tech interests, who spoke upon the condition of anonymity given potential future relationships with the telco, told Digiday the Singapore-headquartered telco “blows hot and cold” on such investments. “Their M.O. as it relates to technology is to authorize a buy, sit on that asset, and then see if it performs for at least a year, if not two before it looks at doing something else.”

Exception to the rule

The same source then went on to say, “You have to ask yourself is there a buyer out there for it [Amobee]? It seems like the people who could afford it, other than private equity, have already kind of made their play.”

However, it is worth pointing out how, in contrast to AT&T and Verizon’s ad tech sell-offs, T-Mobile is continuing to invest in its advertising ambitions with the U.S. telco appointing ad tech veteran Mike Peralta as vp of its Marketing Solutions unit in June last year.

Furthermore, in early 2022 the telco spent an undisclosed sum on Octopus Interactive bringing a national network of interactive video advertising screens installed on a fleet of Uber and Lyft vehicles within the ranks of the self-described “fast-growing advertising technology business.” Commenting on the purchase, Peralta spoke of how T-Mobile intended to leverage its cellular network to distinguish itself “beyond linear and traditional digital channels.”

However, as with all investments, there is no guarantee of an ROI even in the case of cash-rich telcos. Just look at how Altice-owned Teads, an ad tech company the Europe-based telco purchased for $307 million in 2017, withdrew from its earlier planned IPO – a process which (if successful) would have valued it at $5 billion – after investors balked at the prospect in mid-2021.

All of this just goes to show that investment theories are great, but successful execution of them is hard.

Digiday caught up with Bakare to chat about Black History Month marketing and advertising efforts and what brands need to be doing to improve their advocacy marketing in service of equality.

This conversation has been edited and condensed for clarity. 

What are you seeing for Black history Month from brands this year? 

I’m seeing a lot of activity meant to do some things during Black history month. But what I’m not seeing is a lot of deep, nuanced understanding that that activity is actually benefiting its intended beneficiary or any activity that has any real goal beyond, we did something so we won’t get in trouble. The lack of ability to contextualize activity through the lens of impact and make your planning for celebrating this month solely about [activity is a problem]. A lot of the heritage months experience the same challenge, but what I am passionate about is helping marketers get better about thinking about this in the same way we think about what we do. Every single thing we do is about contributing something to make an impact to a business and debate whether or not it worked. The Black History Month activity that I’ve seen for the most part isn’t getting [the impact] right. It’s just about getting it done.

What does a Black History Month campaign need to do to be seen as something beyond a performative checking of the box? 

I have a framework that [brands have to hit] three things to be seen as doing something beyond performative [marketing]. The three things are revenue impact, measurable social impact and reputation impact. If you start to think through those three lenses, the nonsense around you becomes much easier to spot. 

What does a campaign that gets it right look like? 

I don’t have an exact ad campaign top of mind but let’s say, for example, that [a company] ran something and it was all about actually talking about their performance [to meet] the diversity commitment they made after the murder of George Floyd. [That campaign would] say where they are falling short, where they were on track with their plans for diversity from an employee standpoint and a commitment to say by this time next year they would have X, Y and Z done. That could function as a great brand awareness and brand loyalty campaign, a positive sentiment moment during Black History Month. It’s not performative because it’s really about something. You made a commitment. You told us where you were falling short … and your approach was not meant to be something that’s just focused on February 2022. 

When you can use the moment to make a broader and bigger long-term impact you can move past the performative. You’ll never be able to say you made a measurable social impact if it’s something that was only supposed to hit for one month or one year. 

How does this Black History Month compare to previous years? 

We’re seeing a lot more activity and activity is more expected. There’s a higher perceived risk to not engaging in activity but managing that activity for impact, quality and going past the performative — the needle has not moved very much. That’s why I’m out here screaming from the rooftops how it has to. It’s the best thing for business. 

What do you want marketers to understand about their overall impact?

As marketers we’re in a position to have exponentially large effects in how people see, experience and move through the world. I want marketers to see that this — and when I say this I mean the on-going mandate that you as a marketer [have] in moving us towards a more equitable society, specifically for Black people —  is not something they should be doing, or could be doing, but that they are responsible to be doing in their roles. I’m not asking for altruism or charity or to shift their beliefs but to see this as a business imperative that’s not going away. It’s not a bother. It’s something that’s your job.

3 Questions With housing startup Tomo’s CMO Sarah Makar

What’s your approach to Tomo’s marketing strategy?

It’s not a matter of “brand” or “performance.”  Everything we do must incorporate both. We’re embracing a mix of earned, owned and paid strategies, informed by data and mapped closely to our sales and operations to ensure an exceptional end-to-end customer experience. 

Any changes in that approach due to new COVID-19 variants? If so, how? If not, why not?

It’s less about what we’re doing as a result of this variant or the next one and more about how we’re adapting to a new world where this could be a recurring fact of life. Against that backdrop, everything is becoming more digital. Video is increasingly important — whether that’s TikTok or connected TV — but so is the more snackable content you see on Instagram, or a SMS nurture campaign or a three second ad. Marry that with what we’re able to do today from a data and tech perspective, and suddenly you have some very powerful options and capabilities at your fingertips.  

I’d also say there are still some very real opportunities for brands in the physical world, especially on a local level. In-market events, activations and traditional media can still be very effective. 

How is the Tomo team dealing with the long term impact of remote work?

We embrace a hybrid work model where we ask teammates to come into the office three days a week, and give them the flexibility to work from wherever they feel most productive, the other two.  For a few select roles — like engineering — we do allow people to work fully remote. — Kimeko McCoy

By the Numbers

For at least the last year, TikTok has become somewhat of a golden child in social media advertising. Increasingly, brands like Covergirl and Walmart have moved from TikTok as an experimental channel to a staple part of their media mixes. And as TikTok’s popularity grows, its demographics are changing, according to new research from influencer marketing platform Hypeauditor. Find key details from the research below:

• 66.6% of TikTok users are under the age of 24.
• 39% of users are between the ages of 18 and 24, which makes people of this age the platform’s largest user group. In this age group, the number of users between 13 and 17 decreased by 2% compared to the previous year. 
• The female audience grew by 4.14%.  — Kimeko McCoy

Quote of the Week

“A big part of the learning curve for brands is really understanding that, if you are building your own dedicated world inside the platform, you need to think about longevity — you need to think about how we are building and continuing to invest in that world.”

— Yonatan Raz-Fridman, CEO of the Roblox developer Supersocial, on how brands are getting in front of virtual audiences via Roblox.

What We’ve Covered

• What you need to know about Google’s plan to limit tracking on Android.
• How media buyers feel about Spotify’s acquisition of Podsights.
• Why this Shapewear company is moving ad dollars to Pinterest and TikTok.

Derek’s not alone in his experience. Others at agencies say they’ve also experienced an uptick in pitching for new business. Many say that pressure is mandated due to uncertainty, both of clients’ budgets and the state of the world due to Covid.

That uncertainty has some agency leadership worried about the bottom line, according to agency sources who say that independent shops are focused on maintaining cash flow while holding company agencies need to make sure they meet quarterly revenue targets.

“The past couple of years, for all agencies, there’s been so much uncertainty,” said a new business director at a full-service agency. “Are clients going to spend? Are they not going to spend? We used to have minimums [for pitches]; we’d never pitch below $500,000. With Covid, it’s been like, what if we don’t get that? So now we’re looking at $50,000 accounts and considering pitching for them, too.” 

The new business director continued: “There’s been so much more fear. Where’s the money coming from and what does the pipeline look like? So new business has been less selective. Everything is fair game. We have to keep the lights on.”

Independent search consultancy R3 found that new business pitches increased 53% globally and 21% in the U.S. in 2021 versus 2020 as agencies pitched for accounts like Coca-Cola, Mercedes-Benz and Unilever, among others. “In the last year, for a number of different reasons, agencies are less selective than they were in 2020,” said Greg Paull, principal at R3, adding that some agencies were “more likely to pitch for things that aren’t in their wheelhouse.”

The increased pitching at some agencies has come as more employees have quit as part of the Great Resignation, according to agency sources, who say that the push to be on pitches constantly with fewer staffers has made it even more taxing. The juxtaposition of the pitch everything mentality as there are fewer staffers makes the “extra burden” more prominent, says the new business director.

“Because we’re not traveling, not doing the dinners, not going to awards shows, it seems like agencies think we have more time to keep going and going,” says Derek of the pitch everything mentality now. “They’re not being mindful enough of the need for balance.”

That balance can be much harder to come by when agencies are working with fewer staffers. “You use the same people over and over again,” says Derek. “We end up punishing our rock stars because they’re good.” 

That’s not to say that all agencies are pitching more new business than usual. Some agency execs are aware of the tax on staffers now and, rather than push staffers to the brink as pitches can be a huge drain on resources, as one agency exec noted, are turning down pitches to focus on serving current accounts. 

“The more in-demand an agency gets to be, the more selective they can be,” said Ann Billock, partner at search consultancy Ark Advisors. “Agencies with better reputations are still saying no to things that are not right for the agency given that staffing levels are so low.” 

For the agencies that are pitching more, the crunch of doing so with fewer staffers is already difficult and being made more so by the demands of some clients who are asking for more rounds and more ideas for pitches, dragging them out because of indecision, according to agency sources. Pitching more and doing so with fewer staffers is leading to more burn out for those at agencies who are pushing to do more with less now. 

“It’s like the boat is sinking,” says the new business director. “Instead of throwing everything you’ve got at everything, you’ve got to have confidence in who you are, why you exist and act on the opportunities that are a fit for your agency.”

This conversation has been edited and condensed for length and clarity.

Tell me about your experience and why you left your job.

I’ve been in the media for 10 years. I’ve been through this a lot. But this was the worst. [The media company where I used to work] does a lot of stories on being woke, and they aren’t. The sad thing is that the Black employees in there know it, they see it, they say it, we all talk about it — but there’s nothing we can do. There’s nothing that’s done.

When did you start to notice problems at your job?

I was brought on to do a specific job and I never got that opportunity. Within the first 90 days I knew I needed support, more tools and technology — for myself and for the team. I was overseeing the largest portfolio. My own boss — before she quit a few months into me being there — told me: this job is inhumanly possible for one person. So I asked if there was a budget for assistants. I asked: Can I get a coordinator? An intern? I was told no, there is no budget. But my colleagues got what they wanted. When the company had a reorganization while I was there, two of my white colleagues got managers to directly report to them and I never got one. And I had the biggest portfolio. Another employee got promoted two times in her first year, and got a manager too. A path was created for my colleagues. Did they create a path for me? No. They cried, and they got what they wanted. Black women, we can’t cry. If women of color cry, we are seen as weak.

You weren’t getting the same resources as your white colleagues?

Seven months into the role, I remember telling my boss that all my network can only get 20% of me. I’m not able to do good work. I’m not able to focus because I’m in back-to-back meetings from 9 to 6, five days a week. I wish I was lying. The days that I had a break I was so burnt out I couldn’t focus. And I was so transparent. I told my managers in advance. I told them: I need help. They excluded me. One of my white female colleagues said she vouched for me and that I should get a [manager to directly report to me], and not her. When she got a manager, she said I don’t know why I got one — I don’t need one. She even said to me: you don’t just need one, you need three. My colleague’ voices were heard. They were valued. When it came to me, it was like I was invisible. 

Who did you turn to for help?

When I came on, I had biweekly meetings with the head of DE&I. He knew about all of this. But he couldn’t do anything about it. It’s not his fault. Let’s be real. What can DE&I really do? He didn’t have the power to do anything. He was a soundboard and a cheerleader for me. He told my team before I came onboard to give me the same support as they do to their white employees. I could have continued doing the job if I had the support, fairness and tools for success. DE&I is a facade. It’s a way to say “Hey guys, look at us. We are doing something.” They don’t actually use it as a correct tool to dig into these departments with predominantly white people. 

You’ve mentioned that you could’ve contributed to the company in other ways if you hadn’t been so burnt out. Did you feel this way about the ERG you were a part of?

I was really dedicated to it and I wanted to do more. But every time I asked to be a part of [other initiatives at the company], my bosses would say: do all the stuff that we need you to do first, then do that. Both of my bosses didn’t value [my role at the ERG]. There was not one day in my one-on-one meetings where they asked me about the ERG. They never brought it up. I don’t think it was important to them. Some companies see it as an extracurricular activity. 

What ultimately led you to quit your job?

I wanted to see if they could create a lane for a Black employee like they do for non-Black employees. I just wanted to see if they would do it. So many people got hired, and when new bosses come in you would see new roles created for them. They didn’t do that for me. [I wanted] to see if they were going to treat me like they treat their non-Black employees. I saw that they didn’t. Racial discrimination and systemic racism is real at [this media company]. I saw that when everything I asked for that my white colleagues were getting, I’d asked for before them. I was so honest. My colleagues all knew what I was going through. I told my new boss: I’m sinking. I’m drowning. But they looked at it as, she can’t do the job and that’s why she’s sinking.

Earlier you mentioned a moment that you called “the last straw.” Can you tell me what happened?

[The media company] was starting an HBCU initiative. This was the straw for me. I graduated from an HBCU. But for this entire initiative, I was never included. That’s when it became evident that I was invisible to one of my bosses, who was overseeing this initiative. It was a painful feeling. The person leading it was a person of color, but she didn’t go to an HBCU and she wasn’t Black. I was giving her ideas because she didn’t know what to do. I only stayed [as long as I did] for the head of DE&I — he [believed] it would get better.

What do you want people to take away from your experience?

There are other people of color that are looking into the media and the truth is they get pulled in by a lot of these DE&I programs that are pushed. If I’m looking for a job and there’s this wonderful HBCU initiative, you would think: this is a great company. These programs, these events… we know what they’re covering up. I know when this piece comes out, the first thing a Black person is going to say is ‘Oh no, not again.’ We are tired. I’m tired. People need to know what’s going on. There are other people who have left because of the same thing, and no one said anything. I hope this gets people to speak up.