Month: August 2022

As musicians become more comfortable operating inside virtual environments, their interest in working with gaming companies has increased considerably. “I’d say the start of the boom was probably around the start of COVID,” said music brand partnerships expert and former UTA agent Marvin Resende. “It just became a time where people were trying to find different synergies, and around that time was when the Fortnite and Travis Scott concert had launched, and everyone began to ask, ‘how do we merge these two worlds?’”

One way to merge gaming and music is through the production of original, branded music and content. This is a notable aspect of the recently announced partnership between HyperX and prominent DJ and songwriter Anton “Zedd” Zaslavski, which marked the peripheral manufacturer’s first partnership with a musician in nearly three years, after an agreement with Post Malone wrapped up in 2019. 

The deal with Zaslavski is multi-year and “handsomely rewarded,” according to HyperX head of influencers and esports Dustin Illingworth, who hinted that the musician might produce an original song for HyperX in the partnership’s second year. “With electronic music and Zedd just being a massively popular DJ and producer, we do feel like there’s a significant percentage of his audience that are playing both PC games and more casual console and mobile games,” he said. 

In addition to appealing to musicians’ organic fan bases, partnering with them to produce original songs can also help support gaming companies’ other brand or influencer partnerships. This was part of the strategy behind Tundra Esports’ recent partnership with footballer Virgil van Dijk, which the company promoted by releasing “Outplayed,” an original track by grime genre artist and Tundra ambassador Paris “P Money” Moore-Williams. 

As was the case for the partnership between HyperX and Zaslavski, Tundra chose to partner with Moore-Williams due to what it perceives as a considerable overlap between the gaming scene and his grime fan base, according to Tundra CEO Evgeniy Roshchupkin. “If you look at gamers’ top interests outside of gaming, music will be one or two, always,” Roshchupkin said. “More and more, we see music artists also gaming themselves and participating in content around the top titles. So, for us, it all goes really hand in hand.”

The growing role of original content in music–gaming brand partnerships reflects gamers’ sensitivity to inauthenticity. As brands jockey to reach gamers in a way that doesn’t come off as overly corporate or forced, they are increasingly working with prominent individual influencers — and musicians are the original influencers. It’s much easier for a music influencer to authentically cross over to gaming than it might be for influencers from most other sectors, according to some experts, although traditional sports athletes also have a leg up. 

“If you look at a lot of the artists who make an impact in the gaming world, they’re authentically gamers — they’re playing whatever they’re playing consistently, the same as we see with athletes,” Resende said. “So it’s more authentic for them to go into the gaming space, because that’s what they’re doing during their off time.”

For now, much of the crossover between music and gaming seems to be moving in one direction — from the former to the latter. Music influencers and virtual concerts are becoming a regular fixture in game worlds such as Fortnite and Roblox, but few gaming companies have tried to reach new fans by appealing to the music scene. As marketers on both sides become more familiar with the space, the next step of gaming–music partnerships could be for more musicians to take cues from Snoop Dogg and his Superbowl half-time show FaZe Clan chain.

“In fashion, for example, you see a big fusion, and it’s double-sided, in both worlds,” Resende said. “Whereas, in gaming and music, it’s all working to one side. There aren’t as many of the gaming brands figuring out how to be infused into the artists’ world.”

“We’re guiding our internal investment and strategy teams to make sure that we have the framework that really fosters the inclusion of our diverse-owned outlets, working hard to remove the barriers that have long existed depending on the type of media that we’re working with in this space and also making sure that our diversity vendors are heard,” Prince said in the latest episode of the Digiday Podcast.

An important aspect of Dentsu’s economic empowerment team is that it doesn’t sit in a silo but is part of the media agency’s investment group. “It was really important that we have a seat at the table where the dollars are being allocated,” Prince said.

The economic empowerment team’s involvement in Dentsu clients’ investment strategies will play a role in ensuring that the agency group is able to meet its goal of 15% of its annual budget across media, creative and customer experience management to be spent with diverse-owned suppliers by 2025.

Here are a few highlights from the conversation, which have been edited for length and clarity.

Diverse media investment amid an economic downturn

Everyone is keeping track of the economic downturn and what that may entail. But given that this is a group of vendors that have not historically been at the table and have struggled to get access and their fair share, first in can’t be first out. This is a long-term thing. It’s really important that we [are] making sure we’re telling our clients that this needs to stay at the forefront as much as possible. Obviously when there are cuts, sometimes they can’t be avoided. But diverse cannot be the first thing on the chopping block.

The importance of payment windows

At Dentsu, we’re very proud of our 30-day payment terms that we rolled out last fall for minority-owned media. I personally have experience with what a pain point that is for so many vendors because a lot of companies don’t have the reserves to float with 30, 60, 90 days [of non-payment]. We realized that this was something that we could have a more immediate impact on in terms of making a change with that.

The year of results

This is the season. Sitting down with the strategy groups now figuring out what goals are, whether individual clients have specific goals [or], even if they don’t have goals, making sure that this is still part of the plans because it’s harder to come in after the fact. After Labor Day [is] when we start getting into that fall planning season, sitting down with the client leads and our clients as well to hear what their plans are and making sure we have a roadmap, where applicable, that we have these [diverse-owned] partners included going forth in 2023. Because with a lot of the pledges and commitments that have been done over the last two years, this is really about the year of results.

Getting diverse-owned publishers in the door

With our multicultural partners, what we try to do a couple times a month is bring them in for a presentation and really open it up widely to as many team members and as many account teams as well. So people get familiar with the property [to] know who’s out there, what their capabilities are. And then out of that, try to figure out, “OK, are there a couple clients that really make sense based on this presentation?” and then direct them to those respective teams to have further conversations, opportunities to pitch proposals, do the evaluations and go from there.

The Action Network, on the other hand, was instead acquired in May 2021 for $240 million by Danish-based sports betting media group Better Collective, which is focused on procuring as many passionate sports bettors as possible to as many sportsbooks as possible in exchange for a higher cut of the profits.

This strategy seems to be working financially. The publicly held parent company recently reported its second-quarter earnings for the year, showing revenue was up by 40% year-over-year to €56 million (currently equivalent to $56 million at the time of writing). Also notably, the earnings call showed the number of new depositing customers (NDCs), a measurement used by the company to track how many bettors were referred to sportsbooks and subsequently deposit money in their accounts through Better Collective’s affiliate links. 

In Q2 2022, NDCs reached 387,000, a 93% increase year-over-year and a 7.5% increase from the previous quarter. This was also a 45% jump up from Q4 2021, which brought in 267,000 NDCs. 

To keep this on a positive trajectory, Keane said that conversations with sportsbooks have been primarily focused on finding the highest value sports bettor who is willing to play along an entire season. According to MediaRadar, the gambling and sports betting advertising category has increased money spent by 83% from the period of Jan. 1 through July 31, 2021 to the same period in 2022, exceeding $343 million. Within that, spending on digital formats increased by 77% while TV advertising increased by 83%.

Below are highlights from the conversation with Patrick Keane, which have been lightly edited and condensed for clarity. 

Have sportsbooks been impacted by the recent economic downturn enough to reign in their acquisition budgets?

Keane: I look at us very similar to search. People talk about the challenge in the economy right now, and what’s one budget that really doesn’t take much of a hit? That’s your customer acquisition driven-type search. Search is at the bottom of the funnel. When someone’s doing a search for “Volvo lease,” that’s very different from the person that’s seeing a Volvo ad on television. They’re very purpose-driven, and we have purpose-driven users that these books understand. So they continue to invest. 

[However] you can see it particularly in the public companies that are big spenders to acquire customers — companies like DraftKings and MGM and Caesars and FanDuel — all of those businesses have been pretty vocal about wanting to curb their spend and bring in more conservative acquisition [strategies] to the market. But that is also tempered against what is the reality of many large states becoming legal again. We now have 20 mobile sports betting states, the biggest one of which was New York. We’re going to have Kansas, Maryland, Massachusetts [and] hopefully California next year, so while all of these books are trying to be thoughtful and acquire customers profitably, there are still [a] massive [number of] states to go.

[Also], NFL and NCAA football really drive the horse when it comes to sports betting in the United States, so we know that books are going to spend and they’re going to spend aggressively because that September bettor that you acquire is going to be your most profitable bettor because they’re going to stay with you for the entire season. And ultimately, that’s the notion that all these books are really pushing towards is, how do I create a profitable acquisition source? And for them, that’s really going to be making sure that these users become profitable for them within two years.

What type of bettor is going to achieve that status of profitable within two years? 

[Sportsbooks are] trying to acquire these users and create the lifetime value, as opposed to just [earning back] the $300 or $400 or $500 [they’re] paying to acquire the customer on a [cost-per-acquisition] basis.

We [have] the largest and highest intent sports betting audience probably in the United States, when you look at our users. Yes, there’s Yahoo and ESPN and there’s a lot of other places, but those are more casual sports bettors and ones that are probably going to be less profitable for the books than ones that are medium bettors or sophisticated bettors that [bet at a] higher frequency and [make] higher deposits. Those are users that are coming back.

How are you ensuring that those high value bettors are coming back to your platform and are converting through your content/affiliate links to your sportsbook clients? 

We had a number of companies talk about acquiring Action 16 months ago [and] some of those were sportsbooks who wanted to lessen the cost of customer acquisition and have a more retained user. And the reality is, that was less exciting for us. We want to be Switzerland, we want to be able to have editorial impunity when we’re delivering on the customer experience to our users. If DraftKings paid us to own the entire share of voice of the site, and the only odds we were selling were DraftKings and the only content was driven towards DraftKings, that’s a crappy user experience. 

Another important part of that is technologically. [We have] BetSync, where you’re able to place a bet in DraftKings or MGM or some of our other partners, and that is automatically synced in The Action app. So that’s an incredibly important thing because a lot of people who are betting and using multiple books are using Google Sheets to try and track their success — or in my case, failure — of their betting. So those tools and the ability to do it inside The Action platform and the ability to follow experts and friends to see what they’re betting on is a really important part [of keeping audience members coming back as well]. 

So you have to have great products and technology, you have to have great content, you have to have great talent. Different books are trying to get you to become a user based on, not just the offers they’re gonna give you, but hopefully consistently having the best odds and the best prices. So the odds and prices differ from book to book. Smart bettors are going to go where there are the best prices and odds. Brand loyalty is not a really big thing in the sportsbook world. 

Given that sportsbook brand loyalty isn’t a top consideration among your ‘sophisticated’ betting readers, how are you still convincing sportsbooks to advertise with you?

When you look at the Penn National-Barstool deal as an example, you know, Penn was really thinking in two ways. One, the Penn brand really means nothing to the world, people don’t really know Penn as a national or even local brand in any way. So, barstool was a brand for them to invest in that had a user base that people understood, so the brand value made sense. But remember, the Barstool user is younger, less high income, and they’re more [they type to participate in a deal like] deposit $5, and will give you $20, as opposed to Caesars or MGM [that say] deposit $100 will give you a $500 kind of thing. So you know, those users are a little different.

We often do a lot of marketing on behalf of our sportsbook [clients] as well. We will create unique offers and market on Twitter, Facebook, Google Search and Apple to try and really acquire these customers. Again, this is really a content driven experience. If you’re going to read an article to help you make the decision on how to bet on the PGA Tour championship that starts tomorrow, Action [Network] is the place that you were able to have that experience, then hopefully, you’re going to become an even deeper user of Action, because remember, we also have the Action Network app. And that app has our most engaged users, it’s our most profitable users on our platform, and it’s the most fertile ground for our customers to acquire those users as well as on the sportsbook side. The ones that have the highest investment with us are going to get the greatest share of voice, but we work with all the books.

Has your revenue model changed at all as the sportsbooks you work with change their strategy?

The majority of our revenue still [comes from] the affiliate model. Subscription is number two and then number three is that sponsorship driven display. But also in that affiliate category, some of our partnerships are not just straight [cost-per-acquisition] or [lifetime value model]. Some components of media are part of that. So in addition to getting a certain fee for CPA and a certain rev share, maybe DraftKings will own our podcasts for the NFL season [or] maybe FanDuel will own our YouTube channel. We really parse our assets in that way. So the affiliate model, which is the predominant model for how we drive revenue, also has some portion of what I would call media. 

Have you modified the pricing structure at all to capture better returns on a higher value bettor?

One part of our business that’s increasing [and] gives the books a little bit more comfort is the LTV model. We’re actually sharing in revenue that our users generate, which might take time for us to recoup as a source of revenue, but for them, they’ll pay that CPA, which can be anywhere from $250 to $500 and you’re going to profit together on the value of that user in perpetuity that you’re able to generate from your platform. So that gives you an opportunity to sort of maybe take a longer term view and less of a short term hit if you’re generating you a user as an LTV user versus pure CPA. 

Think of loss as revenue. Over the course of their betting, those users’ losses [become a] discrete figure that is shared between the book and us. The book generates profit from a user, and we share in that.

“The new claim and supporting data allow Listerine to set a new standard for oral care, enabling meaningful engagement with consumers to disrupt behavior and add Listerine to their oral care routine,” said Kamran Shahzad, commercial director of oral care brands, Listerine.

In addition to helping to reduce plaque and gingivitis, the campaign’s research shows mouthwash to be an essential part of a complete oral care program. TV spots will run until the end of the year. While Doner Advertising developed the campaign, additional support was provided by Hunter Public Relations and J3media, the company’s media agency.

“This superior plaque reduction messaging will come to life in store at CVS, Walgreens, Rite-Aid and our food retailers, through shelf trays, in-store signage, in-store kiosks and/or display pallets — and digitally across retailers’ websites,” said Shahzad as he talked about the out-of-home element of the campaign.

Listerine initially focused on Facebook and Instagram for social media ads as it allows them to be precise with targeting core consumers. In phase two of launch later this fall, the brand plans to expand to more social channels like TikTok and Pinterest. “Our hope for the future is that consumers become aware of our new science and superior plaque reduction and recognize the importance of adding Listerine to their overall oral care routine,” Shahzad said.

It is different from its previous campaign, which was a series of three short films that emphasized the benefits of good oral health throughout Ramadan. That said, the brand’s overall strategy has not changed. “Our strategy has not shifted from the previous campaign, as we continue to focus on Listerine’s efficacy and the benefits Listerine provides,” said Shahzad.

It is unclear how much of Listerine’s advertising budget is allocated to this campaign, as Shahzad would not share overall budget specifics. According to Kantar data, Listerine spent over $23 million so far on advertising efforts. Shahzad said for this ad spot, 60% of total ad spend went to digital — half was spent on social media and half on display advertisements. Shahzad declined to comment on where the rest of the ad spend went along with how much the digital spend was on its previous campaign.

A number of brands took to OOH during the post-pandemic period, including Listerine. The eco-friendly hand sanitizing provider Shimmy also offered dispensers at Gillette Stadium (home of the New England Patriots).

“This campaign hits on two critically important ‘must-haves’ in today’s post-Covid world,” said Steven Amato, founder and CEO of Contend, an L.A.-based creative studio. “It’s highly relevant and presents the value proposition in a very easy-to-understand manner. Relevancy is on the path to trust that begins with people paying attention. This campaign hits a universal pain point of being “germ-free.”

“There is belt-tightening across the board,” said one agency exec who asked for anonymity. “Brands are being very conservative with their dollars right now. There’s more paused campaigns than usual and a lot of the ad spends are very conservative and performance-focused. There’s a lot of concern that consumer spending is going to continue to pull back.”

That focus on performance has led some marketers to lean more heavily on influencer marketing, particularly on TikTok as it is often cheaper than the more established Instagram influencer marketing landscape.

“There’s definitely a dollar shift we see from display ads into influencers, especially mid-tier and micro on TikTok,” said Noah Mallin, chief strategy officer to IMGN Media. “Obviously it depends on the advertiser but we are seeing about 2X the number of creator campaigns.”

That’s not to say it’s altogether cheap — costs for influencer marketing are on the rise on TikTok, according to agency execs who say that rates have risen across the platform — but that it can be cheaper than more established influencer marketing platforms like Instagram.

Marketers are also eyeing influencer marketing as they look to cut production costs — working with influencers allows them to get content creation and media.

“There’s definitely more influencer work this year than last and it shows no signs of slowing,” said Brendan Gahan, partner and chief social officer at Mekanism. “Creators are being tapped as production partners more than ever. The economic uncertainty plus the volume of social content we often need to create means we need to be efficient with how we allocate dollars. Creators are often a great option to help scale production efforts. They’re platform experts.”

Danielle Wiley, founder of influencer marketing shop Sway Group echoed that sentiment: “Influencer budgets have been increasing while traditional media spends are going down. Influencer spends are also a lot more flexible. Messaging can be adjusted quickly, content can be repurposed/used multiple places. I’m obviously biased, but in an uncertain economy, I’d much rather put budget towards influencer than a traditional media spend.”

3 Questions With Andrew Warden, CMO of digital marketing and online visibility platform for small businesses Semrush

How will inflation continue to affect small businesses and what have you seen on your end of this trend?

Inflation will drive small businesses to invest their time and money into efforts that will grow them during the medium-term. Right now it’s hard out there for everyone. But we know that economies move in cyclical patterns — there will be better days. The question is how can business owners get set up when inflation comes back into check and any recession worries subside. I always encourage people to face the risk, and look beyond it. How will you be set up when the storm settles? The answer — and what we’re seeing — lies in driving online visibility and attention to your business using organic marketing channels. It costs less than paid advertising, it’s easy to get started, and pays dividends for many quarters to come.

What can small businesses do to adjust their spending in response to rising prices and keep up with inflation?

Most businesses want to be careful to not pass on rising costs to consumers because that would make their businesses less attractive. So naturally, business owners are looking for ways to cut their operating costs. Just the other day I was getting my haircut at a barber in Austin who spends more than $1,000 a month on a marketing program that isn’t delivering him results or foot traffic. What I recommended to this barber, and would recommend to anyone in a similar position is to turn to lower-priced solutions, such as SEO and organic marketing. They’re going to drive much higher ROI for businesses on a budget.

How will this affect advertisers and marketers when it comes to building relationships with small businesses over large corporations?

Advertisers and marketers working with small businesses should be sensitive to the needs of SMB owners. This isn’t anything new. I would expect SMB owners to ask more questions about where their marketing/ad dollars are going, especially now. If the traffic isn’t there, I would expect changes in the relationship. And hey, that’s not a bad thing necessarily. As marketers, we are always on our toes and always ready for what comes next. — Julian Cannon

By the numbers

Things are getting more expensive. From gas to groceries, shoppers are feeling the squeeze of inflation on all sides. In response, marketers have been focused on how to relay messaging regarding price hikes to customers. As the cost of living continues to spike, consumers expect brands to keep advertising but tread lightly, according to new research from UK-based insight company Reach Solutions. Find more details from the report below:

• 29% of those surveyed expect brands will advertise more over the next few months, and 57% expect brands to advertise the same amount. 
• Only 20% of people surveyed think it appropriate that tech, car and home technology brands should reference cost of living in their advertising.
• Consumers believe that the brand categories with the greatest credibility around cost of living in their advertising are supermarkets (43%), food and drink (38%) and finance (31%), with gaming, (14%), fashion and beauty (both 18%) thought to be least credible. — Kimeko McCoy

Quote of the week

“People want to have fun with photography again and that’s hard to do. You’ve seen in the last 18 months of social products. One investor said to me: ‘The photo-sharing wars are back, but now it’s a war of ideas.’”

— Dispo co-founder and CEO Daniel Liss on why he’s betting on photos over video as consumers seek a photo-sharing home as Instagram continues its pivot to video.

What we’ve covered

• How Olaplex is looking to ‘fuel’ its organic growth on TikTok with a paid approach
• As midterm political spending outpaces 2020, streaming and TikTok become the focus
• HBO Max’s Steven Cardwell on promoting House of the Dragon, Discovery+ merger