Month: October 2022

“The idea was let’s create something really stable, that we can put things on top of and integrate them,” said Simms, who is also head of product and strategy for Stagwell Media Network (SMN). “Back then we definitely saw that integration and kind of the reassembling of services was where the market was going, primarily driven by where the consumer is going.”

Fast forward to today, and Simms points to SMN having “created a global set of agencies that takes the blueprint that we have figured out at Gale that has gotten us to 700 people and applying it to a network of 5000 people. We built [SMN] in the frame of a complimentary not competitive set of agencies that allow us to replicate what we’ve done at Gale at the Stagwell level ”

Gale has grew its client roster by adding H&R Block a year ago, while also scoring work for Hertz, Hard Rock, Seagate and others. Since 2019, media spend grew from 0 to $850 million in 2021, and Simms expects that number to hit $1 billion by year-end. Given that growth, staffing also grew in that time frame from a little over 200 then to 650 this year. 

Simms’ boss, James Townsend, the global CEO for Stagwell Media Network (which is about to be rebranded to reflect its broader mission beyond media), credited Gale with offering a blueprint for the modern agency.  “Its success has guided our approach to the Stagwell Media Network,” said Townsend, adding that Gale “has cracked a cultural code of choreographing these diverse skills in a way that is driving exponential growth for its clients – and now too for the clients of the Stagwell Media Network.”

Jay Pattisall, vp and senior agency analyst, credited Gale’s versatility as a good model to emulate, but it’s harder to achieve when merging disparate agencies such as Crispin Porter Bogusky.

“With the lightning in a bottle that Gale has captured by by integrating its media and content and creative execution, Stagwell is attempting to replicate with the inclusion of Crispin Porter Bugusky, Forsman & Bodenfors and Vitro & Partners, which are now part of the media network,” said Pattisall. “It is a step for them to become part of the network, but it won’t truly succeed without the actual merger of a creative company and a media company together.”

Pattisall’s point is that Gale is like a Lego set that was meant to be built upon, whereas mergers are much harder to pull off because of established ground that one side or another needs to give up when merging. “It has to be an integrated proposition inside a single company,” he added. “So I don’t suspect that Stagwell will be able to recapture the lightning in the bottle without, for example, combining Crispin with Assembly. And that is a much more difficult proposition …  a bit of a Frankenstein.”

Still, within Gale, the organically varied offering has paid off for some clients. The yearlong work with H&R Block provides some insight into Gale’s approach to generating results. The 65-year-old brand, synonymous with tax season (and therefore not considered a 365-day brand in consumers’ minds), was looking to expand its business offerings to both consumers and other businesses, having launched mobile banking brand Spruce. Gale convinced the historically traditional brand to venture into content offerings, from six- or 15-second videos to email modules or SEO content Block’s website, said Sophia Zhang, Gale’s managing director in charge of the Block business. It’s the math and research that helped get them to those solutions, she said.

“There’s a desire and need for marketing and advertising to be quantified not just to show the number of impressions and the reach, but to actually really show incrementality,” said Zhang. “How much market share do they need to gain? How does that translate into actually a marketing target? And then how do we actually measure in a truly scientifically relevant way is really important?”

In the end, in a recent earnings call, Block cited Gale’s work as having contributed to the 5% year-over-year growth of the Block Advisors unit.

“I view [Gale] as the tip of the spear testing things out there, getting them to scale, taking some learnings and then bringing them back to Stagwell Media Network to scale them globally,” said Simms.

Color by numbers

We’ve covered the record midterm political spending expected for this year, with growing interest in streaming services and TikTok as ad vehicles leading into the election next month. Digital ad platform Basis has been working with thousands of advocacy groups and candidates, and observed that social spending is moving to newer platforms – but social media may not be the most effective way to drive voters. The company expects half the spending for this midterm season to be spent in the final 30 days before the elections, so let’s break down what that actually means.

• Basis is seeing a more than four times increase in political ad spending through its platform during H1 2022 compared to H1 2020. Average spending for all its clients has increased, with about half of that spending slated for October and November.
• Basis saw connected TV ad spend go up 15 times in volume, with a 1,500% increase in spending on CTV devices from political advertisers during H1 2022 compared to H1 2020.
• The CTV budget is also rising, making up one-third of political advertisers’ programmatic spend in H1 2022. That’s a 72% increase from 2020, when CTV represented 19% of their programmatic spend.
• There may be more room for streaming audio to grow, currently at only 4% of the programmatic spend today — but up 100 times over H1 2020. That said, that comparison is between a general election (in 2020) to this midterm election. — Antoinette Siu

Takeoff & landing

• IPG’s Magna unit offered a sobering look at total media revenue in the near future in its latest U.S. Ad Forecast. The report predicts that a “weaker economic environment will cause several industry verticals to reduce ad spend in the second half,” which will be partially offset by strong political spending, leading to $323 billion in total 2022 media owner revenue — the first time ever to cross the $300 billion threshold, and a 9.8% above 2021 levels (8.1% if taking out “non-cyclical ad spend” and political dollars). Magna predicts continued sluggish growth in 2023, a mere 4.8% over 2022.
• Big Day is a new San Diego-based agency formed by ex-Wunderman Thompson ECD Peter Sayn-Wittgenstein and managing director Kristie Brown alongside  Gut Branding founder, Ahab Nimry. Launch clients include Casper, YMCA, HexClad, the Royal Caribbean Group and the BNP Paribas Open. 
• Personnel news: Independent media agency Crossmedia named Dr. Ram Singh its chief performance media officer … Fellow indie agency Novus made several hires and promotions: Montrew Newman was promoted to senior vp and head of strategy; Paul DeJarnatt is the new vp of digital, having spent some 18 years across Publicis agencies, most recently Digitas; and Chris Aubin is vp of integrated client strategy, having joined from Starcom … Consultancy MadTech Advisors named Heather Macauley its president, charged with growing revenue as well as marketing and product strategy. She’s formerly the global head of ads monetization at Zoom.

Direct quote

“What worries me is when marketers and brands don’t value agencies the way that they should, treating them like a partner versus a vendor — and that’s when payment terms come up. … I very strongly believe in the power of creativity and the power of an external perspective with a breadth of understanding that has incredible talent. There’s a very unique type of people in agencies.”

— Marla Kaplowitz, 4A’s president and CEO

Speed reading

• Digiday senior reporter of marketing and technology Marty Swant looked behind the headlines of TikTok’s latest self-assessment of how it’s policing itself around content that violates its policies. 
• Senior ad tech reporter Ronan Shields explained the reasons why it’s harder for marketers to take programmatic efforts in-house despite a desire to buy more media that way. 
• And senior news editor Seb Joseph sat down with Ebiquity CEO Nick Waters, who explained the reasons Facebook and Google’s walled-garden approach to ad revenue is starting to show cracks. 

Consumers’ rabid interest in gaming IP has effects beyond streaming numbers. The popularity of game-inspired shows can flow back into the games themselves, as shown by the sharp increase in Cyberpunk 2077 activity following the release of “Cyberpunk: Edgerunners” in September. As streaming services and game developers alike jockey for consumers’ mind share, they are likely to continue investing in this type of crossover content in an effort to raise all ships. 

The key details

• Among the major streaming services, Netflix is leading the charge when it comes to gaming. Last year, the company hired executive Mike Verdu to lead its game development efforts, and has consistently signaled that it views gaming as critical to its continued growth.
• However, competitors to Netflix have also stepped up their production of content inspired by gaming IP in recent months. Notably, “Players” is a Paramount+ mockumentary series spoofing the League of Legends scene, for which Riot Games head of League of Legends esports Naz Aletaha served as an executive producer.
• At the time of this article’s writing, CyberPunk 2077 boasted over 94,000 players on Steam, according to websites such as SteamDB. Concurrent active player numbers have generally been much closer to 10,000 or 15,000 in recent months, meaning the release of “Cyberpunk: Edgerunners” sparked a considerable rush of interest in the two-year-old game.
• The success of streaming content based on gaming IP can be a boon to both streaming platforms and game developers, which could encourage game developers to more freely license their properties to platforms like Netflix in the future — or produce their own narrative content. On Sept. 29, Riot Games hired Mandy Beckner, a veteran TV executive who formerly worked at Netflix, as its global head of live action development, film and TV. (A Riot representative declined to provide further details about the appointment.)

Reducing risk

Simply put, gaming’s cultural influence is growing, and streaming platforms may have simply realized that the gaming audience has reached a size worthy of their attention. According to Activision Blizzard Media’s report on the impact of games on media consumption earlier this year, gaming consumption consistently exceeds that of live television, and streaming TV only exceeds gaming by a relatively small margin — 57% of consumers versus 43% — during prime time and late evening hours, and gaming activity beats out streaming at all other times. Among younger demographics, gaming is understandably even more dominant. 

The adaptation of pre-existing IP is nothing new in the entertainment world, but the ascendancy of gaming has transformed gaming IP from a potential risk to a sure bet.

“Media industries, generally, are known as ‘risky businesses’ because it is uncommonly difficult to predict consumer desire and thus success or even ROI. Also they are industries with very high sunk or first-copy costs; you have to spend nearly all the money before you have anything,” said Amanda Lotz, a media studies professor at Queensland University of Technology in Brisbane, Australia. “A response to these conditions is to try to reduce risk by relying on known things — known talent, known IP in particular. So IP has long been used to help reduce risk.”

Another side of gaming IP

As streaming services become more comfortable producing content inspired by gaming IP, the next step could be for them to start taking bites out of the influencer and content creator side of gaming livestreaming. In gaming and esports, consumers’ attention and preferences are increasingly dictated by prominent individual influencers, and streamers have already signed lucrative exclusive contracts with platforms such as Twitch and YouTube. It’s only a matter of time until streaming services like Netflix sign similar deals with creators to begin exploring this rapidly growing, but very different side of gaming IP.

“Look, I think that audience is literally evolving in real time in front of us all, so what they preferred a year ago I think has already changed,” said Josh Cella, CRO at the gaming video content network G4. “So we’re on the front lines of all that, by having these Twitch stars that have a real seat at the table.”

Four years in, lessons are still being learned, with the IAB Europe’s Transparency Consent Framework — now in its second guise after Google was an early holdout — still undergoing legal scrutiny from data protection authorities in the region.

It’s a topic that was discussed at length in booths, from the conference stage and (no doubt) in the bars surrounding Koelnmesse last week, as the first in-person Dmexco conference since the Covid-19 outbreak was hosted in Germany earlier this month.

Stumbling block

Discussing the prospects of TFC 2.0, multiple sources, who requested anonymity given the politics involved in developing a cross-industry solution, hinted how conversations with marketers themselves (i.e. those with first-party relationships) indicate that the industry’s self-regulatory GDPR solution may require a rethink.

Philippa Snare, svp, EMEA, at The Trade Desk, told Digiday how the demand-side platform was working with both the IAB Europe and IAB Tech Lab toward a solution. “I don’t know if that requires a really strong unified solution,” she said in a veiled reference to Unified ID 2.0, “that’s managed by the industry and usurps the need for a consent framework?”

On several different fronts, Europe has proven a stumbling block for industry efforts to forge a path forward in the cookieless future with Google’s Privacy Sandbox, and even UID 2.0 frustrated in the region.

EUID…brought to you by TTD, and everybody else

GDPR has been the source of umbrage for projects’ respective backers, with The Trade Desk announcing a partnership with LiveRamp earlier this year to get its efforts in the region off the ground in a tie-up that has been labeled EUID.

Based on LiveRamp’s Authenticated Traffic Solution, EUID will attempt to negotiate the specifics of GDPR. This means that advertisers and publishers that sign up to the standard can transact on either EUID or RampID (both will be interoperable) within The Trade Desk’s DSP.

Snare told Digiday that while GDPR does “create an issue” for EUID’s rollout, she is confident it will be market-ready in 2023. “We’re already in alpha, we’ll be in beta as quickly as we can after that,” she said, speaking on the Dmexco floor. “I just don’t know when the formal release is.”

Separate sources hinted that further partnerships are in hand, but present contractual restrictions prevent The Trade Desk et al. from publicly disclosing the names of participants. Although, Snare did tell Digiday the company is working with “customers that have big CRM databases where we can start flushing data through the pipes, and checking out whether the tech works.”

One such example is The Trade Desk’s recently announced partnership with Procter & Gamble, which has seen the CPG giant use UID2 as part of its post-cookie preparations. Speaking separately, Snare told Digiday, “Look at the UID solution in the U.S. and take that as an indicator…we’re looking with those types of partners and more for EUID.”

Don’t stop…

As mentioned, GDPR enforcement prompted an exodus of companies from the region, with Drawbridge (a company that was later sold to Oracle), GroundTruth, Kargo and Verve Wireless all leaving in 2018.

Digiday previously reported that in 2018, Verve’s leadership had calculated that the cost of building the infrastructure required to comply with GDPR would not generate a return on investment, given the scale of its presence in the region — then consisting of a 15-person headcount.

However, fast-forward to 2022, and Verve — now going under the moniker of Verve Group after its 2020 acquisition by Gamigo — is back in Europe, where its parent company, a.k.a. Media And Games Invest, is a publicly listed entity. Since 2020, Verve has been on an acquisition trail of its own, including contextual advertising outfit Beemray, sell-side specialist Smaato, buy-side outfit Match2One and, more recently, Dataseat, a mobile-focused DSP.

Ionut Ciobotaru, co-CEO of Verve Group, explained that while the current outfit — formed after the 2020 merger of other MGI subsidiaries PubNative and Applift — uses the same brand name as the company that exited Europe in 2018, otherwise it was completely different.

“We had to close our outfit [PubNative] in 2018 when GDPR came in and just do business in the U.S.,” he said, adding that the move cost his company 20% of revenue. “So, [from here] we had to rebuild the platform to store consent, pass it…and by the time we got acquired [by MGI] we had all of this infrastructure in place,” he said, adding that this is now available to the entire unit.

Meanwhile, Digiday has also learned that Kargo is planning to re-enter the region after its 2018 exit, with sources there explaining that its implementation of TCF has helped buoy its confidence to start partnering with U.K. publishers again.

Branching out

Similarly, other ad tech companies are branching out, with Outbrain, a company whose renown was built in the content recommendation space, recently launching its first software-as-a-service product in the guise of Keystone, a product that uses artificial intelligence to help publishers expand their revenue opportunities beyond traditional advertising.

“If you think about a publisher’s pixels — those served by the advertising-industrial complex (including by Outbrain) are very optimized for an advertisers’ business KPIs and for their ROI,” said Yaron Galai, cofounder and co-CEO of Outbrain, describing how publishers like Arena Group are using the product. “You can leverage the Keystone technology for e-commerce, with the goal of maximizing affiliate revenue. Keystone will track the conversions and the value in order to provide the best offers in front of the right users.

“There are many simple ways to provide the conversion data into Keystone — online, offline via analytics or just a simple estimate. We are removing implementation barriers, just like we’ve been doing for advertisers for over a decade.”