Less BS, More Facts, Some Opinions
A podcast interview withChris CunninghamFounding PartnerChris Cunningham spent most of his career in ad tech, including stints at ironSource and Unacast. He founded the mobile social ad company appssavvy back in the day (as in, the year before the first iPhone had even come out). But he doesn’t invest in ad tech. When he and… Continue reading »
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There’s a disconnect between those ad buyers in the trenches of online advertising and their own corporate leaders up the C-suite, who are accustomed to determining marketing group budgets based on ROI and other basic advertising KPIs that, frankly, are going haywire right now. One way to deal with that disconnect is to add someone… Continue reading »
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Hugo LoriotPartner“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today’s column is written by Hugo Loriot, partner at fifty-five. The annual Cannes Festival has elevated France’s reputation in advertising and marketing technology over the last several decades. But at this year’s event, France’s… Continue reading »
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Get The Net Netflix isn’t just vetting third-party vendors for its pre-launch ad business (though it is vetting vendors, to be clear). The streaming leader is on the hunt for an executive to lead its incubating advertising business, The Wall Street Journal reports. … Continue reading »
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This time last week, news of TikTok reportedly peddling back plans for QVC-style live e-commerce initiatives here in the U.S. caused a lot of talk (and plenty of hot takes) throughout the marketing and advertising industry.
TikTok has denied such claims originally published by the Financial Times, stating that the ByteDance-owned platform never had any concrete plans to expand its “TikTok Shop” venture into Western territories.
Still, the supposed expansion seemed promising, and its failure to launch once again raises the question of what it will take for social live shopping to take off in the U.S. the way it has in China. For U.S.-based marketers, it points to the idea that what has worked for advertisers in Asia may not necessarily work at home. At least, not yet.
“There’s a bigger gap in the West between whether [users are on TikTok] to browse, whether they’re on Facebook to see friends and family and whether they’re actually there to buy,” said Brandon Biancalani, head of paid advertising at Modifly ad agency.
From a numbers standpoint, the U.S. is significantly behind when it comes to livestreaming social commerce. In China, emarketer predicted that livestreaming e-commerce would bring in nearly $300 billion in sales last year, reaching just under 12% of the country’s total retail sales. Here in the U.S., that number is so meager that it’s not even reported, according to emarketer.
The hold up, according to marketers, is a cocktail of reasons, including general Western consumer distrust of social media platforms — Americans, for example, using social media for inspiration and discovery as opposed to shopping. There’s also inconsistency in user experience, limitations in data and attribution and a generation of people who are increasingly marketing adverse. It doesn’t help that an economic recession is looming, pushing consumers to hold their dollars a little tighter.
While brand marketer curiosity in livestream shopping and e-commerce is stirring, Biancalani says Modifly’s clients have yet to go beyond experimentation.
“There definitely was interest in part because it’s a new tool,” said Noah Mallin, chief strategy officer at IMGN Media. “In most cases, the feeling was it’s not fully baked yet.”
That hasn’t stopped platforms from pushing their way into the livestreaming e-commerce market in hopes to create yet another revenue stream. Last holiday season, YouTube, Facebook, Pinterest and others announced live shopping would play a big role in holiday shopping strategies. TikTok itself has made significant investments in live capabilities, including commerce tests, paid live subscriptions, digital gifting and more.
“Live social commerce isn’t going anywhere, social platforms will continue to try and crack the code to bring a shopping channel-esque experience to the feeds of younger consumers,” Ari Berkowitz, associate director of social, content and influencer at Deloitte Digital, said via email.
“We’ll see lots of testing and surely plenty of failed attempts in the process, but the upside of live social commerce is such that the format as a whole isn’t going away anytime soon.”
How is Rothy’s sustaining, and even expanding, in an increasingly crowded and competitive market?
We have a breadth of capabilities that allow us to connect with our consumers differently. Our stores are really well crafted and we put as much thought into how we design the in-store experience as we do our website and the product. More and more, you’ll see from us, acting IRL, if you will. We’re opening a number of stores this year.
As a brand committed to sustainability, how does Rothy’s toe the line between brand purpose and profitability?
One of the interesting things about being a brand where sustainability is inherent to it and not an add on, is we don’t feel like we need to convince people ‘we’re all about sustainability and that’s what you need to know about us.’ It’s truly who we are. So we connect more authentically in that space. When you have it in your DNA, it allows you to actually operate differently and create more emotional connection, which the brand has done really, really well.
Word of mouth and community building are two eternally hot topics in marketing. What does that look like in terms of Rothy’s marketing strategy?
We’re lucky that in many ways our communities have popped up organically. We’re always listening to our community. They are very vocal in what they want and they are our best source of information. As we move forward, what you’re going to see from us more is really understanding their whole lives, not just Rothy’s role in their life. [It’ll be] us looking to see how we can support them more. We tend to define our communities as movers and doers.
2022 is expected to be good to Amazon, which alongside Meta and Google, is expected to gobble up at least 50% of all ad money this year. In fact, digital ad platform Skai reports that one in every eight digital ad dollars goes to Amazon Ads. New research from Skai reveals how consumers feel about Amazon ads. Find details from the report below:
“You’re seeing a special uptick in spending because we’re trying to combat that narrative of misinformation around abortion care.” — Sapna Khatri, a teaching fellow at the UCLA School of Law, discussing reproductive health care advertising spend post Roe vs. Wade.
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MiQ is in advanced discussions over a potential majority investment Digiday has learned with sources indicating that a private equity firm has now been identified as a prospective principal backer of the ad tech firm which could be valued at close to $1 billion.
The developments come five years after ECI Partners became a minority stakeholder in the company, then known as Media iQ, after it made a “significant” investment – financial details of the deal were not disclosed – in MiQ.
Since early 2022, the ad tech company has engaged a number of parties, including the M&A advisory arm of HSBC, over a potential deal with separate sources, all of whom requested anonymity due to commercial sensitivities, noting that multiple PE firms subsequently contacted industry experts to better assess MiQ’s value proposition.
Digiday understands that recent days saw MiQ enter into advanced discussions with a single PE firm with sources indicating any potential deal, which would see ECI Partners sell its stake in the company, could close in the coming weeks.
MiQ co-founders Gurman Hundal and Lee Puri, CEO and chief growth officer respectively, confirmed the company has spoken with several PE firms in recent months although they declined to name any specific entities they have engaged with.
They told Digiday any potential deal would not equate to the company “changing its trajectory” and that the pair would remain in situ long-term.
“The goal of what we set out to do 12 years ago is the same now,” said Hundal, “and we want to be doing that for decades to come.”
Puri added, “Finding the right partner that is aligned with our values going to be a really important part of our future narrative and future growth.”
ECI Partners is a PE outfit whose specialty is investing in medium-sized companies – typically these are “businesses valued up to £300 million” ($359 million) – and then helping said businesses accelerate their growth plans with a particular emphasis on “internationalization.”
The PE firm also claims U.K.-headquartered MiQ’s revenues have increased by 240% in the U.S. since its 2017 investment and that the ad tech firm now also has a scaled presence in APAC and the Indian subcontinent.
Documents filed with Companies House, a registry containing audited information on U.K. companies, during September 2021 state that MiQ’s 2020 turnover was $337.6 million (the bulk of which was generated by its international operations) equating to a profit of $15.9 million after-tax.
Sources familiar with developments at MiQ told Digiday the ad tech company’s revenues have grown considerably since 2020 and are now comfortably north of $600 million. Separate parties, all of whom requested anonymity, estimate that MiQ would likely be valued in the region of $800 million-to-$1 billion.
One source who advised a potential bidder described MiQ as “best in class” adding that it has managed to maintain a highly-skilled workforce (its headcount is in the region of 800) in a competitive environment. Meanwhile, another source made note of MiQ’s entry and subsequent rapid growth in the U.S. market with ECI Partners separately claiming that “over 2/3 [sic] of total group revenue” is generated there.
MiQ is a company that helps clients (typically a mixture of media agencies and brands’ own advertising teams) conduct ad campaigns using tools such as demand-side platforms or more comprehensive ad tech offerings such as the Google ad stack.
According to its September 2021 filing, MiQ has also gone about investing in proprietary technologies including its Analytics Studio, Intelligence Hub, and Trader Lab. MiQ claims this technology automates and optimizes clients’ campaigns across different sources of inventory, and ultimately underpins the services it provides to clients.
Additionally, the papers also note that MiQ invested $1.1 million in a hotly tipped start-up that helps advertisers access data in a privacy-compliant way called Infosum.
Market observers maintain that such numbers place MiQ as one of the largest ad tech companies originally founded in Europe, a territory that has played host to a number of different deals in the sector during recent months.
For instance, Mayfair Equity Partners invested $120 million in LoopMe, while Smartly.io agreed to pay more than $100 million for Ad-Lib.io (both deals were announced in January this year) while Insider recently reported that fellow U.K. outfit BrainLabs was likewise looking for additional PE funding.
Meanwhile, Goodway Group’s ad tech consultancy arm bolstered its offering in recent days with the purchase of U.K.-headquartered Canton Marketing Solutions with AdExchanger reporting that Verve Group acquired mobile DSP Dataseat to bolster its privacy wares earlier this week.
Some believe MiQ’s latest attempts to gain further financial backing could be a precursor to a public listing once the stock markets recover from their current lull following the historic highs of 2021.
Despite uncertainties around increased government oversight of the use of data, plus the relative downturn in the fortunes of ad tech on the public markets, private equity groups are still interested in the space. That was the conclusion of a panel at this year’s Digital Media Summit, hosted by LUMA Partners, with participants suggesting cooling attitudes toward ad tech on the public markets could present an opportunity.
Stephen Master, a principal at GTCR (an outfit with a majority stake in Simplifi and Standard Media Index) told attendees that 2022 is “a great year to be a PE investor in ad tech” as 2021’s surge of public listings in the space posed “a very formidable competitor for liquidity events.”
He added, “I feel that a lot of the buzzwords that get thrown around – like regulatory risk, [Apple downgrading] IDFA – are much better understood in 2022 than they were last year … valuations are (perhaps) not necessarily lower, but you’re not competing against the higher valuation alternatives.”
Davis Noell senior managing director and co-head of North America at Providence Equity Partners (a group that owns Smartly.io and aided DoubleVerify towards its April 2021 initial public offering) noted the fluctuations in how the investor community valued ad tech over the last decade.
“The market is telling you a couple of things, and one is that they don’t like unprofitable companies,” said Noell, adding, “I think year to date, the profitable ones are down 25%, that hasn’t been a good year, but the unprofitable ones are down 70% … but I think it will be a good year performance-wise for ad tech, that will reflect again in the stock market.”
Meanwhile, Yicong Liu, a director at CVC Capital Partners (a fund that helped broker the purchase of Vista Equity Partner’s stake in Mediaocean), spoke of the potential for PE firms to pair different ad tech assets together, and then seek a potential exit.
“For the businesses that are acquisitive, where we see a lot of opportunity for add-on, I think now’s as good an opportunity as any to make sure that we’re exploring potential businesses we could be talking to because I do think the public markets have overreacted a little bit.”
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Digiday is proud to present The Return, a podcast about the advertising industry as it grapples with returning to the office in a global pandemic that has forced society to reconsider the very idea of work.
In four episodes, The Return follows Atlanta-based advertising agency Fitzco as the company returns to the office after a two year-pandemic hiatus, answering questions about Covid-19 safety protocols amidst each new wave of the virus. It will also examine company culture, the push to change the future of work and what true work-life balance looks like.
The Return includes interviews with employees at Fitzco and several future of work experts. The podcast will probe the office, its purpose in working America and its fate.
The Return is hosted by Kimeko McCoy, senior marketing reporter and Digiday, and produced by Digiday audio producer Sara Patterson. Subscribe to the Digiday podcast now on Apple Podcasts – or wherever you get your podcasts – to hear the first episode on Wednesday, July 27.
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The Wall Street Journal is finally entering the commerce space after spending a year figuring out what that business will look like for Dow Jones.
Launched last month, Buy Side from WSJ is a standalone site whose newsroom operates separately from the Journal, but has the same focus of helping people make financial decisions — a shared mission for Dow Jones’ other properties including MarketWatch and Barron’s, according to the company’s chief revenue officer Josh Stinchcomb.
The timing of Buy Side’s launch — which is likely taking place right before a recession — could be a unique challenge for most commerce publishers, with audiences starting to pinch their pennies and brands reconsidering their affiliate marketing budgets. But Leslie Yazel, head of content for Buy Side, believes that these circumstances could benefit her team’s editorial strategy, thanks to the personal finance focus featured in each article.
On the latest episode of the Digiday Podcast, Stinchcomb and Yazel discuss how Buy Side is balancing consumer product recommendations with detailed budgeting breakdowns to help readers make purchase decisions through the lens of value, as well as setting sights on striking up affiliate partnerships with financial institutions.
Below are highlights from the conversation, which have been lightly edited and condensed for clarity.
Yazel: We have consumer goods that we’re selling and we also have personal finance advice, which we also can monetize. But at the heart of this are money decisions, whether you’re buying a coffee maker, or whether you’re deciding which credit card to choose, or should you switch to a high yield savings account. We feel that WSJ.com has great authority there [and] we want it to be useful for people.
But I also think we’re well positioned for the economic situation now, because one of the main things we do is we really tightly curate for people, and we do the math for people. So when I say we tightly curate, [I mean] when you travel around the internet and look at all the best lists that are out there, sometimes you see “19 best credit cards,” or “12 best whatever.” We really narrow that for people. When we talk about cash back rewards cards, we narrowed it down to four so that people can really have an easier decision.
We create a criteria for this. We work with a panel of experts in the financial services industry and we spreadsheet relentlessly to narrow this down, but we also do the math for people. And what I mean by that is whether we’re looking at, should you get one of these coffee subscriptions that are so popular now, we don’t just look at the tasting notes. We also look at how much does it actually cost per ounce because you can compare that then with what you might be buying at your favorite market or grocery store.
Stinchcomb: [Financial services partnerships tend to be] more varied in terms of the [pricing] models. And I read your piece about [cost-per-click] versus cost-per-acquisition — the different currencies in this space that are evolving — and on the financial services side, it is a combination of cost-per-acquisition and cost-per-lead. There’s different models. On certain kinds of products, that can be a percentage of a loan size and other models it’s a flat fee of — just making it up for illustrative purposes — $50 for every new verified credit card lead.
On average, I think those bounties do end up being greater per capita than on most consumer products back to the point that the lifetime value of that customer to a credit card issuer, for example, is greater. So you’ll often have a range or a fixed fee on a cost-per-lead, or a cost per new customer acquisition. And those can change over time because as you grow and deliver more volume and more success to a particular issuer, as an example, you may be able to negotiate better per capita rates.
Stinchcomb: The financial services space is more complicated. There [are] compliance issues that don’t exist in other categories. You have to sort of prove yourself with a lot of issuers of credit cards, as an example, before you can become an accredited affiliate partner for them. And so that’s a process, you’ve got to earn and prove your way into that and show that you have the proper compliance and put the proper resources behind being compliant. And that’s a barrier to entry.
There are big competitors out there but there are also competitors who are partners. Red Ventures is the operator of some pretty big sites in the space, like Bankrate, but they also have a really sophisticated publisher friendly affiliate offering. We work closely with Red Ventures and we’re able to work with them to be an intermediary to a lot of financial institutions because they have a very thorough understanding of the compliance and the complexity, and they can help accelerate our participation in that market. [It’s] somewhat akin to SkimLinks in the consumer space.
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