Month: January 2023

This interview has been edited for length and clarity. 

You’ve taken on the top role after joining the business last May as chief operating officer. Why step further into the fray given how mired in uncertainty the ad industry is right now?

The plan was always to have me initially join as the chief operating officer. The former CEO and co-founder Thomas Pasquet will become chairman of the board. This is an orderly transition from the founding team to my leadership. Look, I left a business like Criteo, which was at the center of arguably the most exciting trend in advertising [retail media] to come to Ogury because I believe there’s an even bigger opportunity around the future of cookieless tracking. It’s bigger because it’s an issue that impacts the entire industry. 

Ok, so you joined because you feel Ogury will land on the right side of history once this shift away from granular tracking shakes out. But every ad tech company believes the same thing. What made you so sure about Ogury’s chances?

This is a business that’s been working toward targeting people at scale without the knowledge of the identifiers since 2014 when the company was started. Back then the business was built on getting full consent from users to use their data for in-app mobile advertising. We did this up until 2020 when it stopped. By then we had collected enough anonymized data to really understand the landscape of our publishers. Doing so gave us the means to move forward with the next phase. 

Next phase?

It’s something we call personified advertising — as in we’re letting advertisers target personas, not persons. Instead of targeting people in specific demographics, we work with advertisers to define what the persona is they want to target then we use our unique (fully anonymized) data set to then define a list of destinations online, whether that’s in-app or in-browser, that I know are going to be highly correlated with that persona. We then start displaying the ads on those pages and apps knowing that the likelihood the brand is going to hit the persona they want is higher than anywhere else. These campaigns are delivered with all the safeguards, from brand safety to frequency capping. In short, we don’t care about someone’s identity. 

So targeting the asset, rather than the individual. Isn’t that just contextual targeting?

No. This isn’t contextual targeting nor is it semantic. Neither is enough on its own to give advertisers the scale needed to make upper-funnel advertising work. What makes our technology different is the data behind it. It’s the nuclear reactor for everything we do, and it’s a combination of four different factors: The first is the historical data from over 2 billion devices, which has allowed us to gain the knowledge and intelligence on what’s happening online.

Wait, before you move on to the other three points, how do you refresh that historical data? 

We’re conducting surveys at scale. To do this, instead of displaying an ad on a web page or in-app we display an ad format with no more than five questions. These are aimed at either qualifying a new page or validating the page that I’ve already indexed. From June to December last year, we collected 20 million data points this way. In 2023, we expect to get north of 40 million data points.

Thanks. Talk me through the other three points of the data plan?

Sure. The other parts revolve around campaign delivery data, which we feed back into the algorithm. Then there’s the contextual and semantic data points we’re collecting and optimizing against. Finally, there’s a cross campaign performance analyst part of the plan, which we’ll launch early in 2023.

What makes you so confident in this plan? 

We’re already performing better than a lot of the other ad targeting systems out there. For anything that’s lower mid-funnel to upper funnel, we’re better, or more performant, than solutions that rely on IDs. I can’t reveal numbers but another proof point is the fact that we find that as a business we’re competing more and more with those ID solutions in categories normally dominated by brand-focused campaigns. 

Is that going to be easy to capitalize on given the precarious state of the market?

We think so. In fact, we’re going to accelerate our growth in 2023 versus our growth in 2022. We have a healthy business model. So much so that the last time we had to raise capital was in 2019 when we brought in $50 million to the business. None of our growth plans are going to be slowed down by any financing capacity. Not when we’ve launched in several new markets since 2021. Doing so has created a lot of opportunity for us to bring in additional revenues from companies we have a lot of runway to grow.  Even though we have around 500 people, that’s still relatively small compared to other companies.

Are you not worried about the ad slowdown putting a spanner in the works?

No. I don’t think there’s a reason for us to panic. Sure, growth of advertising looks set to slow, potentially even coming in flat in 2023 but the digital component of that spending continues to grow relatively well — somewhere between 5% and 10%.

Eighty-four percent of agency pros told Digiday they agreed that their companies had a successful 2022 — which is a very high number considering the current economic climate. Meanwhile, 74% agreed that the agency business overall had a successful year. This is still a large number, but it is a difference from those that said their individual companies were successful last year. This suggests many agencies consider their own businesses are faring better than the overall industry.

This difference widens when looking at the data heading into 2023. Eighty-three percent of agency pros told Digiday that they agree that they’re optimistic about their company’s prospects for 2023 — again, a big number considering the current climate. On the other hand, agencies don’t see the industry doing as well: 70% of agency pros said they agree that they’re optimistic about prospects for the agency business as a whole heading into 2023.

There are some interesting trends to note, comparing this year’s survey results with last year’s: The percentage of agency pros who said they’re optimistic about their companies’ prospects this year is actually down this year — 83% said this at the end of 2022, compared with 93% at the end of 2021. Additionally, 83% of agency pros told Digiday last year that they agreed they were optimistic about the industry’s prospects for 2022, compared with 70% for 2023.

Drilling a bit further into agencies’ optimism about 2023, it is clear that the type of optimism agency pros are experiencing at the beginning of 2023 is different from the optimism they experienced at the beginning of 2022.

Between Digiday’s 2021 and 2022 year-end surveys, the percentages of agency pros who agreed somewhat versus agreed strongly that their companies had a successful year flip-flopped: 48% of respondents agreed strongly that their companies had a successful 2021, and 37% agreed somewhat. This time around, 38% of respondents agreed strongly that their companies had a successful 2022, and 46% agreed somewhat — indicating that shift away from the overt optimism felt in the industry a year ago.

Interestingly, agency pros’ attitudes toward the industry overall didn’t change much between 2021 and 2022. The percentage of respondents who agreed somewhat that the agency business had a successful year rose very slightly from 48% in 2021 to 51% in 2022, and the percentage of those who agreed strongly that the industry had a good year fell 1 percentage point from 24% in 2021 to 23% in 2022.

Another interesting trend to note is that not one respondent said they strongly disagreed that they’re optimistic about their company’s prospects or the industry’s prospects for either 2022 or 2023.

Another notable difference between last year and this year is among the agency pros who strongly agree that they are optimistic about the coming year: 48% of respondents to last year’s survey told Digiday they strongly agreed they were optimistic about their companies’ prospects for 2022. That percentage fell to 32% for 2023. And a similar difference cropped up regarding agencies’ optimism about the industry overall: 32% said last year they agreed strongly they were optimistic about 2022 prospects for the agency business, which fell to 23% this year.

To learn more about the behind-the-scenes events leading up to Sherman’s exit, Digiday spoke to 10 current and former employees of the company, all of whom requested anonymity to avoid jeopardizing future employment opportunities in the relatively insular esports industry. Many complained that they felt micromanaged in their roles at Immortals, with some expressing confusion or disapproval over the company’s strategic moves in 2022, including Immortals’ significant pivot from its Los Angeles origins to become a localized Great Lakes regional organization in late 2021.

Prior to taking on the CEO role, Sherman served as Immortals’ president and chief commercial officer since May 2021, and before then as an executive at esports organization Gen.G between June 2018 and May 2021. At the moment, Immortals does not appear to have named Sherman’s successor, and the organization currently has no active CEO. Ari Segal, who was Immortals’ CEO before Sherman took the reins, currently serves as the company’s executive chairman and co-managing director, a role he held before Sherman’s ouster.

During Sherman’s tenure at Immortals, he oversaw several significant strategic shifts for the company, including a zero-profit merchandise strategy designed to bring in new fans and the aforementioned Great Lakes pivot. The Great Lakes move was a gamble, as the long-term viability of localized esports businesses remains a matter of debate among industry leaders. That said, Immortals appeared to receive a warm welcome from gamers in the region at local activations such as its June “Immortals Invasion” event in Detroit.

Despite Sherman’s exit, the organization does not appear to be diverting course from its Great Lakes focus at the moment, according to a current Immortals employee who requested anonymity. However, two former staffers with knowledge of Immortals’ workings were more skeptical about the org’s commitment to the Great Lakes rebrand. 

“It was a little bit one-foot-in, one-foot-out the whole time I was there,” one anonymous former staffer told Digiday. “It looked a little bit less one-foot-out over the past year, but still not enough to actually increase the engagement.”

Sherman’s plans for Immortals were ambitious, and a second former employee told Digiday that the shortcomings of his administration were more a result of unchecked esports idealism than malice or incompetence. Regardless of his motivation, however, his tenure at Immortals was marked by occasional controversies and unrest among company staff. “I found him to be a very difficult person to work for,” the first former staffer told Digiday. “I don’t think he did a very good job at admitting what he didn’t know.”

Issues with management at Immortals led at least eight Immortals staffers to look for jobs elsewhere, according to the first former staffer. “Turnover is common in esports, but I think eight to 10 people voluntarily leaving over the course of 8 to 10 months is absolutely notable, and that’s what happened in 2022,” they said.

The feelings of disgruntlement spread to Immortals’ competitive players, too. In April 2022, Sherman sparked controversy by posting a critical statement about the team’s League of Legends players on the Immortals subreddit. The post was massively downvoted, with many fans accusing Sherman of using his players as scapegoats. 

On Dec. 22, the day of Sherman’s exit from Immortals, the team’s former League of Legends general manager Jake Pedro tweeted that he had “received some wonderful news that karma is indeed still real.” Mo “Revenge” Kaddoura, a current member of Immortals’ League of Legends roster, liked the tweet. Neither Pedro nor Kaddoura responded to Digiday’s requests to comment on the matter.

Sherman is not the first high-ranking esports executive to step down in recent memory — and if trends continue, he won’t be the last. Kal Hourd stepped down as CEO of Guild Esports in November 2022; Bill McCullough left his role as evp of content at FaZe Clan in October; and Carlos Rodriguez was dismissed as CEO of G2 Esports amid a wave of controversy in September, among numerous other examples. 

“We’re exactly where many maturing industries are in their life cycle, in terms of leadership. We saw the same thing with tech CEOs as well; in the late 90s and early 2000s, there were a lot of people that were promoted beyond their capability,” said Jason Chung, a professor and director of the esports and gaming initiative at New York University. “So it’s basically the Peter Principle, where you keep on getting promoted because things are going well, but eventually you reach a limit of your training, competence and networks.”

As the esports industry starts to lose its luster in 2023’s bear market, more heads are likely to roll. “It’s a bloodbath out there,” Chung said. “Honestly, I think it’s a little bit of a free-for-all.”

So far, Wecal has found it to be “a tool to develop logic” that could possibly help craft social posts or news releases but it “doesn’t bring any style or humanity or a unique perspective,” he said. Industry professionals who have used ChatGBT (which is offering a “free research preview” according to a window that pops up when you sign up) say they’ve used it for brainstorms or to help them get past writers’ block. Marketers and agency execs say that they don’t see ChatGBT taking copywriting jobs but that it will likely be a tool advertisers use to help the creative process going forward.

“Think of it as a powerful jumping-off point that can spur ideas and help you narrow down the focus of what is possible,” said Christina Garnett, principal marketing manager at software company Hubspot in an email. “Initial question prompts that can gradually be expanded upon give creative teams a strong starting point they can either further lean into or deviate from.”

Ryan McDaid, head of strategy at creative shop Mojo Supermarket, echoed that sentiment.  

“It can be helpful in early phases of a brief,” said McDaid. “It functions at the level of an intern who can pull information and aggregate info for you. It won’t come to conclusions and won’t give you the insight. But it will be a starting point to help you think about a project.” 

Agency execs say that while clients aren’t asking about ChatGBT yet, agency employees have been testing its capabilities to determine how it can be used and what it can do for advertisers. Overall marketers and agency execs say that it is in an experimental and learning phase but ultimately they see it as a tool marketers will likely use going forward.

“ChatGBT is the new crypto… in terms of the hypecycle,” said Brendan Gahan, chief social officer and partner at Mekanism. “It’s here. It definitely has practical applications. It’s just the topic du jour. How it fits into our workflows long term and all its potential applications are [to be determined].” 

Gahan continued: “Just like the introduction of Adobe Illustrator or Photoshop, it makes content creation more accessible. Can you imagine being a designer in advertising today who didn’t know how to use those tools? 20 years ago it was possible. But, today it’s the barrier to entry. The same will be true with AI.”

As its usefulness is being determined, some creatives have wondered if it will eventually hurt copywriters as marketers seek to save money by using AI. Marketers and agency execs say that AI has a long way to go.

“I would heavily encourage copywriters to use it to stay up-to-date and make their work more efficient,” said Garnett. “Copywriters will be impacted by AI the way mathematicians were the calculator. Use it as a tool to improve your work and expand your impact with the efficiencies it creates.”

For what it’s worth, Digiday tested out ChatGBT for this article. The first few times we tried to log on the system was overloaded. When we were able to get on, it gave us headline suggestions — we used a shortened, edited one — that were as one editor put it, “better than I thought they’d be.”

3 Questions with Jesse Hiss, cofounder Fresh Sends a direct-to-consumer flower gifting delivery service

As a DTC business, how has Fresh Sends navigated all of the changes over the last year?

It’s been a crazy year. We’ve been extremely fortunate from the get-go to have tons of organic traction. But on top of that, we had some really early success on TikTok. We were there from a young age and [we were] actually coined the TikTok flowers early on. This year has been really the first year we’ve had to dive into building out a more detailed marketing strategy because it’s been so fortunate that things have gone our way up until then. It’s definitely been a tumultuous year, especially toward the end of the fourth quarter. We spent more on digital paid advertising than we ever had and didn’t see a huge uptick. 

Given digital ads haven’t offered much of a return on investment, what other tactics is Fresh Sends leveraging?

Last year, [we] hired a content creator/ambassador manager to start creating organic content. [That] has been a big push for us, creating authentic content that speaks to the mission of Fresh Sends, making people feel seen and loved. She’s working really hard with a handful of creators, creating organic content [and] a bunch of UGC. That’s been a big push. We’ve finally this year hired an agency to help us start to put together a better marketing plan going forward in the paid space, leaning on some of those tried and true stuff, such as search and organic search.

What’s the plan for 2023?

Creating content in general is really going to be [a focus]. All of the attributes on TikTok advertising have been lackluster in my opinion. So using our creator and having her manage a whole team of content creators throughout the country is one of our big pushes. We’re hoping that will be an organic, authentic way we can gain traction on what Fresh Sends actually is and the mission that we’re trying to accomplish. — Kimeko McCoy

By the numbers

Advertisers are experimenting more with in-game advertising to reach the gaming community, an audience largely considered under utilized. Gamers, however, prefer ads that don’t interrupt game play, according to recent research from Frameplay, a video game ad platform. Key findings from the report can be found below:

• 34% of respondents said intrinsic in-game ads, i.e. ads that appear in gaming content, were the most effective in-game ad type at making them take action (more than any other ad type).
• More than twice as many respondents said they found interstitial ads, i.e. ads placed between content (54%) and adjacent ads, i.e. ads that appear during breaks (43%) to be distracting, while less than a quarter said the same about intrinsic in-game ads (24%).
• 45% of respondents reported seeing interstitial ads the most, compared to just 23% who saw intrinsic in-game ads the most. — Kimeko McCoy

Quote of the week

“Most publishers are sitting on a vast amount of rich first-party data, and as privacy regulations continue to tighten, operating with first-party data will be a significant and powerful advantage in the future. With this, you can build more accurate audiences and discover new sources of revenue, all through privacy-compliant methods.”

— Freddie Turner, EMEA md at programmatic agency MiQ when asked about Schibsted making its first-party IDs widely available in the open market.

What we’ve covered

• At CES 2023, agencies outline progress and potential around the metaverse, podcasting and sustainability
• Why TV advertising’s upfront model won’t fade away
• CES 2023’s beauty gadgets: AI, personalization and robot makeup among items unveiled

Vice Media Group ended 2022 behind where it thought it was going to be — about $100 million short of the revenue goal of $700 million set by its leadership at the beginning of the year. But Geoff Schiller, VMG’s global evp of commercial and sales strategy, is optimistic that events, intellectual property and digital video will be the sellable assets that carry the company forward in 2023.

That’s because in his first quarter on the job (Schiller joined VMG in September after leaving Group Nine/Vox Media in June after almost three years), those products were the top areas of focus for advertisers, including partnering with VMG’s brands at Art Basel in Miami. Where other publishers reported growth in quick-turn campaigns and ads, like programmatic during the fourth quarter, Schiller said branded assets were still top of mind for Vice’s clients. 

In the latest episode of the Digiday Podcast, Schiller discusses his team’s strategy for selling new products in 2023, like Refinery29’s Twitch programming, as well as his philosophy on how hard to lean into revenue-share programs on social media. 

Highlight from the conversation have been lightly edited and condensed for clarity. 

Weighing the value of social media

My approach, as it relates to passive revenue and direct revenue, is to lean into predictability. Save for an algorithm change here or there, dotcom and indirect programmatic revenue from display and pre-roll bases has largely been a business that is stable [and] that companies can build predictable revenue on top of. Those companies that have significant dotcoms are seeing less revenue fluctuations.

As far as platform [revenue] sharing, it really is a story of the cream rising to the top. So I don’t think it’s a catch all that might be that secondary revenue stream that’s going to save publishers. It’s really, if you have compelling content, and it’s driving views, you’ll get rev shares. And if not, I don’t think you can retrofit. 

That’s what’s happened over the last six [to] seven years — the arms race around how many likes do you need to have on Facebook, then it was how many views. And you see what Meta does, which is every year they’re tweaking [their algorithm] and brands that try to retrofit [their content to the] algorithm fail. 

Long winded way of saying, display, pre-roll [and] programmatic: thumbs up. Social revenue streams on the passive side I think will be few and far between for only those publishers that aren’t delivering the most differentiated, the most compelling [content]. And so from that lens branded content and distribution of that branded content is where social has the most value, so it’s more of a direct play.

Leaning into experiential when others weren’t 

For us, Q4 was probably a little bit different [from what other publishers were reporting] because it was less about seamless, transactional media [and more about experiential and branded content against franchises].

We just [came] off of our first year in partnership with Art Basel in Miami and that involved IRL, social [and] light touch custom, as you might call it. And for us, that’s a good sign, because some [publishers] that are really dependent on branded content [are] seeing that [being] effect[ed by headwinds]. Clients will say, “We only want to focus on what’s easy. We have our assets [and] we want to push [those] out.” 

When you think about the concept of increasing market share, I think [Art] Basel and activating there, we had three partners across the Vice Media Group landscape — Cash App, Expedia and Marc Jacobs — all activated during a time when if you read the trades, it would lead you down a path of it’s all programmatic. So I think we are incredibly well positioned, not just in ‘23.

Quick timelines even on bigger campaigns 

With experiential, there is obviously lead time, [but] I would say [Art Basel] was definitely a lot more condensed. In a perfect world, we are six months out. That wasn’t the case here. 

Because we were working with Art Basel [in] a physical space, it was something that we actually were in market with a little bit later than usual. So I do think it’s a good bellwether for the fact that close to in-quarter activations are still top of mind for clients. And I think that unique marketplace differentiation of, if we want to do something big, if we want to earn media, if we want it to be grounded in award winning creative, they’re going to work with Vice. That really is compelling. 

As we go into [this] year, we’re going to try to be as strategic as we can, in terms of advanced selling. But separate from all of that, our franchises are an incredible asset to us and part of having franchises is being able to draw folks in early on because it’s predictable.