According to Square’s CMO, Lauren Weinberg, the company wants to help level the playing field for Black and Latino retail entrepreneurs. Recently, Square announced the launch of Forward, a business accelerator program designed to help Black and Latino retail entrepreneurs get access to the capital, mentorship and ongoing support that they need to succeed. We asked Weinberg about these entrepreneurs’ challenges and how Square plans to support them.
There is a lot of talk in the retail industry about increasing diversity but much less discussion about empowering diverse founders and creators with capital. What is Square hoping to accomplish with this initiative?
Square’s corporate purpose is economic empowerment, and we believe all businesses should be able to participate and thrive in the economy. However, despite leading America’s entrepreneurial boom, Black and Latino businesses still face higher closure rates and have less access to the capital, mentorship, and professional business tools they need to thrive. Knowing that Square succeeds when our sellers succeed, Forward is designed to help reduce premature closures of Black and Brown businesses and is only one step in our ongoing commitment to increase equitable access to the economy for sellers of color. We hope to provide these businesses with the foundational tools and guidance fit for each of their unique business needs to set them up for long-term success truly. Square’s products have the power to help businesses automate their operations and create new revenue streams, and we hope these business owners are able to capitalize on this potential.
The climate is tough for startups. What are some of the standout criteria that the organization/group is looking for when selecting a startup?
Starting and running a business is one of the most difficult and rewarding things a person can do. We’re excited to review applications and look forward to choosing applicants with clear and varied business ideas who are working hard to make them a reality. We have a minimal number of requirements we take into consideration when choosing applicable candidates for Forward, including:
Businesses must be a part of the clothing & accessories, health & beauty, home goods & furniture, or food & beverage sectors
Companies must be founded by or have a current CEO who identifies as Black/African American or Latino
Businesses must be based in the U.S., have publicly launched, and be in the first three years of their operation (i.e., cannot be in alpha, beta, or stealth).
Businesses must report a gross revenue of between $25K – $500K
Must be existing Square sellers or willing to switch over to Square products
Forward is fronted by some huge names. How does that increase visibility around underrepresentation in the startup world?
We’re proud to have such incredible partners in our celebrity mentors, who are all successful entrepreneurs in their own rights and all share Square’s commitment to economic empowerment. As part of Forward by Square, we are confident that they will support and inspire our inaugural cohort of businesses, helping them overcome the unique challenges faced by underrepresented businesses.
What about marketing? It can be challenging for new BIPOC creators/brands to find and connect with audiences. How can retail entrepreneurs build their brand at the very early stages?
It’s absolutely true that marketing is one of the biggest challenges faced by business owners of color. However, a recent Square survey of Hispanic entrepreneurs also pointed out that marketing is seen as an area of opportunity. As an early-stage startup, I recommend building your brand across your social channels first because it doesn’t cost anything to create a business account. However, it’s important to be mindful that consistent and authentic content is key, especially if your targets are digitally native consumers who prefer to shop on their mobile devices. Square’s powerful ecosystem of tools can help even the smallest businesses stay in touch with existing customers, reach out to new ones, and create loyalty programs to keep everyone coming back.
In this episode, Andrew and I discuss Turo’s mission, how marketing helps them achieve it, and how he views today’s CMO role. Andrew outlines the challenges Turo faced early on, how they got around them, and how a shift to focusing on improving the host experience has been one of their most effective marketing assets. We go into the details of Turo’s most recent “Open Doors” brand campaign and how they are riding the web3 craze by subverting it and encouraging new experiences in reality. As a CMO, Andrew feels his role is more than just advertising and performance marketing. It’s about solving a problem for the customers. His approach is rooted in holistic thinking and understanding how you provide value to the world.
Andrew Mok never thought he would be in marketing because he was more left-brained, but in 2012, when analytics became a large part of marketing, he found his path. When Andrew joined Turo in 2012, 54,000 users were being served in just two cities. In 2017, at age 29, Andrew was promoted to CMO and has advanced the company to over 10,000 cities serving 7 million users. Today, Turo is the largest global peer-to-peer car-sharing marketplace, and their revenue has grown over 250X since he joined. As an Asian American, Andrew always felt different growing up but sees now that differences are to be celebrated. That is the approach he takes to marketing by showcasing Turo’s unique value propositions and living out their brand values of being expressive and grounded. It’s all about celebrating uniqueness and seeing the person first.
In this episode, you’ll learn:
The unique challenges Turo faced early on and how they overcame them.
How embracing uniqueness is a personal value for Andrew and how that shows up in his approach to marketing.
Why a holistic view of marketing yields better results than a siloed one.
[01:30] How Turo is making a weird thing normal
[04:55] What is Turo?
[07:20] From computer science to CMO
[09:50] The role of CMO from a younger leader’s perspective
[10:50] Make sure you don’t have a leaky bucket
[14:15] The Open Doors brand campaign
[17:40] The role of Unreal Engine in Turo’s new campaign
[19:00] Turo’s global expansion and aspirations
[21:50] Challenges and benefits of international ride sharing
[22:40] Developing a passion for leadership in the AAPI community
[26:45] How growing up Asian American shaped his approach to marketing
[28:30] Enjoy the current moment and reflect on past successes
[29:45] Simplification makes you a better storyteller
[30:50] The importance of accessible reproductive care
Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies but is an entrepreneur at his core, having founded or served as an executive for nine companies.
FC Barcelona recently issued a limited edition jersey promoting Catalan pop star Rosalia’s “MOTOMAMI” album for the March 19th LaLiga Clasico. The event-driven promo is just one more step in Spotify’s efforts to woo creators and ink new brand partnerships while presenting new opportunities to brand marketers. Here are three key takeaways.
#1:1.5 Billion Viewers Can’t Be Wrong
The world is still engaging with soccer on multiple platforms—even in the midst of economic and political uncertainty. According to SportsProMedia:
More than 550 million viewers tuned in for the FIFA 2022 opener.
Across 93.6 million posts during the 2022 series, the event launched 5.95 billion social media engagements.
FIFA reported record-breaking revenue of US$7.5 billion for the tournament’s four-year cycle.
In comparison, 113 million people, a record, watched the 2023 Super Bowl, per Statista.
According to S&P Global Intelligence, soccer is the most-watched sport on live TV.
in eight of 10 major global markets. Although just 26 million Americans watched the world cup in 2022, marketers seeking to build a global presence will find a unique opportunity in marketing through soccer-related content.
#2:American Soccer Fans Are The Youngest Sports Fans And The Most Diverse
Over half of the respondents who identified as soccer fans are under 45 (54 percent). This is a higher share of young fans than the NBA, NFL, college basketball, tennis, NHL, and MLB.
Soccer fans are the most diverse of all sports, with 40 percent of those surveyed identifying as people of color.
Young soccer fans are now transmitting their love of soccer to their Gen Alpha children, with 63 percent of Gen Alpha parents stating that they encourage their children to be sports fans.
That presents a key opportunity for brand marketers seeking access to audiences of younger families and diverse communities.
#3:Like Spotify And FC Barcelona, Brands Should Have A Strategy To Connect With Audiences Everywhere, Including At The Stadium
Spotify’s recent deal with FC Barcelona, worth over $320 million for the initial sponsorship, per Reuters, reflects more than a marriage of convenience. According to Alex Norström, Spotify’s Chief Business Officer, in a 2022 interview announcing the partnership, the brand wants to leverage soccer’s fan culture to deliver new Spotify artists to an online and in-person audience. In addition, Spotify will use targeted ads—and presumably new brand partnerships—to engage diverse global audiences.
“Barça’s games attract a huge, global viewership per season, and we’re looking forward to working with them to connect artists to this audience,” said Norström. “For example, using the dynamic digital displays to showcase and geo-target relevant artists to Barça’s global TV audience. While European viewers may see a message about one artist, TV viewers in India could be served a different and locally relevant message.”
According to Spotify, the company experienced record audience growth in 2022.
“Our approach to our earned, our pitches, and how we want to reach external audiences and the press is as important as how we’re approaching our owned editorial channels,” said CJ Stanley, Spotify’s Global Head of Communications, in a 2022 interview.
Over a two-day period at the beginning of this year’s SXSW festival, TikTok held panels and workshops at its inaugural event for independent agencies to better understand the platform.
TikTok’s uncertain future was largely absent from those discussions, however, the overwhelming interest in how to capitalize on its command over Gen Z and the future of commerce on the app was clear.
TikTok’s FYP Event For Agencies
On the 44th floor of the Hanover Republic Square in downtown Austin, TikTok brought creators, brands and agencies together in over a dozen well-attended talks and workshops.
One consistent message from the invitees at the FYP event—and elsewhere at SXSW—was a desire to reach new audiences on the platform while understanding and embracing the uncertainties that go along with it, whether that meant seeking out new measurement solutions to tie platform goals to clear and measurable KPIs, or navigating cultural moments through strategic risk-taking on the platform.
“We had some really great conversations with leadership and internal stakeholders about how 2023 is going to be our year for TikTok,” said Courtney Landolfe, Senior Manager of Digital Marketing at J.Crew.
All Eyes On TikTok
Despite the backdrop of a potential ban, brand marketers, agencies and media companies remained bullish on continued investment into TikTok as a full-funnel marketing channel.
Zachary Ricchiuti, Associate Vice President of Client Delivery at Kepler, shared the company’s plan to take a long view to TikTok, noting they are “road mapping our evolution on the platform, not just three months from now, but taking a two-year horizon and [changing] the entire infrastructure and how we activate from a creative standpoint.”
“Ayzenberg is working with TikTok on behalf of several result-oriented clients. Outcomes to date have been more than impressive,” said Eric Ayzenberg, CEO of a.network and Ayzenberg Group. “It’s important to take a 30,000-foot view on social innovation, especially around short-form video and TikTok. The results for upper-funnel brand awareness are undeniable. Simultaneously, we are now entering yet another transformational phase around social commerce to drive full-funnel results,” he said.
Carly Carson, Head of Integrated Media at PMG, also shared how the company is prioritizing and positioning TikTok as a media platform:
“We’ve been on a tough journey just like everybody else here over the last couple of years, and what has been really exciting has been how it transformed from a big, high-impact flash in the pan, single-moment bucket, to what is now becoming an always-on full-funnel part of our—not just social platform ecosystem—but our total digital ecosystem.”
TikTok Rewards Risk
TikTok has always been a grey area for brands wading into the platform mainly through the efforts of savvy, chronically online social media managers and platform-native content creators. And while the prospect of a ban seems more of a clear-and-present danger than previous threats—especially in a year of platforms in jeopardy—that hasn’t stopped social media managers from pushing for more risk-taking and extending that principle elsewhere.
At the panel ‘Navigating Calculated Risk On Social Media,’ Zaria Parvez, Social Media Manager for Duolingo, talked about how TikTok has changed the role of social media managers and the appetite for risk in social.
“Calculated risk has just encapsulated the essence of Duo on TikTok. When we first started our account, it was very basic, very language-learning focused, and what you’d expect from a language-learning app,” Parvez said. “And the big calculated risk that we took was when we shifted it to Duo being a creator himself.”
Parvez noted that in the past decade, social media managers have gone from following an approved script to ad-libbing—to writing their own script and delivering it across millions of devices billions of times. Part of that process has been educating internal stakeholders about communication on the Internet in 2023 and consistently accelerating the risks taken.
When it comes to brand leaders, the perspective is similar: risk-taking and TikTok should be understood as complementary. Patrick O’Keefe, VP of Integrated Marketing Communications at e.l.f. Beauty gave the following advice: “When you’re thinking about leaning in, you’ve got to take risks. We took a lot of risks. Sometimes it works, sometimes it doesn’t. But at the end of the day, if you don’t, you’re not going to win on the platform,” said O’Keefe.
The Future of TikTok
Commerce was a common refrain for what attendees and panelists were most excited to see on the platform in 2023.
“It’s a repetitive answer because everyone on the stage has said this already, but commerce has to be the most exciting piece,” said Kepler’s Ricchiuti.
“The improved shoppability of TikTok ads continues to grow and diversify, we’ve been talking a lot about shops for J.Crew and several other clients at Kepler … that’s probably the biggest area for us—and for everybody,” he continued.
Robbie Krieger, playing a rare full set of material by The Doors, after Dennis Quaid dropped in to sing lead vocals for two songs at the Belmont, 3/14/23.
I’m big into pattern recognition, and it somehow felt important that it was 25 years ago that I made my first and only trip to Austin, Texas.
I was in film and TV development back then, and I’d been invited to be a judge for the screenwriting competition of the 1998 Austin Film Festival. I remember the opening night party at the Driskill Hotel and loving the freewheeling music and film-loving vibe of Austin that had been immortalized for movie fiends like myself in Richard Linklater’s Slacker.
Fast forward to now, and lo and behold I’m staying at the Driskill, wearing the sweet badge of an Ayzenberg colleague who went every year but had to drop out with a conflict. My goal was to soak up as much as I could in the short time I was there, just three of the ten days that the festivals and conferences would run and swim in the slipstream of the more than 300,000 folks estimated to descend on Austin to listen to the heartbeat of popular culture.
Over twenty different panels offered up “The Future of” one thing or another, from music and film to design and healthcare, which is just what the doctor ordered for a creative with a bone-dry well, who just stepped off the most intense heads-down, live-in-the-present client treadmill of his life.
With over 350 panels and sessions and over 1400 musical acts playing this year’s South By (the official Spotify playlist clocks in at over 64 hours of music), I quickly gave up any illusions of seeing “the best” stuff and shifted my focus on the experiences that I thought I would get the most out of for myself and my tech and gaming-focused integrated agency space.camp. The SXSW app is a mobile marvel, and guided by my RFID badge, an incredibly helpful and well-staffed volunteer army, and QR codes as far as the eye can see, I dove into Day 4 head first.
As an insatiable music fan 30 years into their career, I’m too old to be young, but also far too young to be old. This compass setting guided me to showcases that featured a blend of living legends like New Order, Robbie Krieger, and French disco legend Cerrone and up-and-coming acts like Loose Articles, Bartees Strange, and spill tab.
Music is such a critical component of a creative’s life, from trending sounds of TikTok to the soundtrack of a trailer, and keeping your references both timeless and timely is the key to collaborative fluency. It’s also an enormous endorphin release to step out from behind your laptop and dance with your colleagues and new festival friends that happily accumulate during your time in Austin.
I was also eager to check out the state of experiential, with no shortage of brands, films, shows and products setting up shop to use the power of SXSW to catapult into the social sphere.
I won’t name names because I don’t want to throw any shade on what was undoubtedly a ton of hard work, but the playbook felt a bit tired and uninspired on the whole. Scan the QR code for an IGS effect, take a selfie at the booth or in front of our screen array, grab a bit of swag and don’t forget to use our hashtag. I was only there for a fraction of the fest, so please let me know what experiential moments you saw at SXSW that you felt moved the needle.
The panels I attended were global, thought-provoking, uplifting—and entertaining as hell. Hearing stories from the front lines of The Infinite Frontier of Virtual Production at the Australia House was informative from a technical standpoint and affirmed what I’ve been seeing anecdotally at work—more women are in more positions of power in production than ever before thanks to the power of persistence and perseverance.
Listening to Joost van Dreunen,professor and leading academic on gaming and interactive, deliver a master class on “All About Games: Data, Trends, and What’s Next for 2023” was like drinking from the firehose.
Did you know that the number two global fashion brand in the world was Fortnite? With $5.8 billion in digital apparel, Fortnite is second only to Gucci and ahead of Ralph Lauren and Prada. 52 different video game companies hauled in over $1 billion last year, but the big fish keep getting bigger. Doja Cat is drawing huge audiences by streaming her Power Wash Simulator sessions on Twitch.
As a marketer, all this intel gets the hamster wheels spinning. I can’t wait to be back with my team to start applying this to our current workstreams.
From the fanboy perspective, sitting in on the Evil Dead Rises panel was pure bliss (gong hits will do that to you). Sam Raimi and Bruce Campbell anchored a panel of cast and crew of the latest entry into the Evil Dead cinematic universe that now somehow spans over four decades.
Sam Raimi said “It’s all about entertaining your audience. With the Evil Dead franchise, we’ve left enough room for the audience’s imagination to fill in the dark spaces we’ve left for them.
Connect the audience to the wants and needs of your character and they will be more susceptible to the journey these characters have are on, from an epic quest to a walk down a dark hallway. Once that connection is made, you can deliver the maximum punch.”
Words to live by, for all of us.
One of my favorite professional experiences was leading creative for the go-to-market campaign for Oculus Rift in 2017. Launching the first consumer-grade VR hardware and catapulting VR gaming from ultra-niche to the mainstream was heady stuff, and it felt like a reunion of sorts to walk the XR Experience Ballroom and experience first-hand the insistence of the Metaverse as it continues to incubate and mutate. The dissonance of Meta announcing another five-figure round of layoffs while innovators and founders work tirelessly to launch the next killer use case was top of mind with the folks I chatted with on the floor.
The world at large flowed through SXSW. The night before I flew in, Bechdel test-acing film Everything Everywhere All At Once nabbed seven Oscars and became the most-awarded film ever almost a year to the day after its debut at SXSW 2022. Silicon Valley banks failing and Washington threatening to boycott TikTok were fiercely discussed.
Did I mention I was only in Austin for 72 hours? If you and your team are lucky enough to go to SXSW for the first time next year, here’s a quick checklist to get you off to a great start:
Use the SXSW GO app early and often, and overschedule yourself so you have options once you’re there. You still won’t be able to see everything, but you’ll give yourself a fighting chance.
High-profile events give you the option to request a SXXPRESS Pass that guarantees you entry at 9 AM the day before the event. If it’s important to you, have your app open at 8:59 and fire away, they go fast.
Don’t turn your back on your SXSW tote, even for a minute. 😉
Do as much pre-research as you have time for on the musical acts to ensure you’re seeing the kind of music that lights you up.
Take at least one pedicab ride to your next session; the drivers are a hoot.
Talk to strangers! I’ve never been to a friendlier fest where everyone is down for a quick chat and a scan of each other’s badge to follow up later.
So, after the dust settled, what did it all mean? What patterns triggered my radar the most? It came down to the people who were there, all drawn by SXSW’s stated mission of “helping creative people achieve their goals.”
The diversity of the attendees, geographically, gender, age, sector and style—from students to septuagenarians and everyone in between—matched the unique blend of bands and brands nearing or surpassing the half-century mark, inspiring and uplifting nascent movements and music.
These diverse and inclusive forces who linked arms together at SXSW, united in the cause to push culture forward, stood in stark contrast to the larger forces in our culture who sow discord between the generations and battle for a supremacy that history tells us is impossible to achieve.
When Krieger and the Doors arrived on the scene, they were leading voices in the counterculture, actively trying to incite the youth to wrest control from the corruption, entitlement and ingrained violence of the establishment. That battle, splintered though it may have become over time, still rages today.
I’ve seen the future, and it’s female, phygital, funky—and pissed off.
SXSW is amplifying that message for the world, whether you like it or not.
As Gen Z increasingly embraces social search to discover new products, marketers are finding new opportunities to leverage data and create new organic paths to purchase.
‘Passive’ Product Discovery: How Data Creates A New Path to Purchase
Social commerce is experiencing a boom despite consumers’ concerns over inflation.
According to recent findings by Influencer Marketing Hub, social market value is expected to hit a historic $1.3 trillion in 2023, representing a 30.8 percent increase from 2022, when social commerce sales worldwide added up to an estimated $958 billion. Central to social commerce is targeted advertising relevant to the real-time content and conversations consumers engage with. It places brands within an intimate context of social interactions where interest drives engagement and curiosity in the new is at its peak. Social commerce can create astounding results, as demonstrated by Chinese influencers Viya and Li Jiaqi, selling over $3 billion in goods in a single day.
Social commerce works because it integrates easily into content discovery without feeling like an interruption, per a recent report by GWI.
“As users scroll, they see numerous ads that reflect their shopping preferences,” the report reads, describing TikTok social commerce. “You can even be watching a non-ad related video, and TikTok will pick out keywords for a user to be taken to different results.” According to the report, about 46 percent of Gen Z and millennial TikTok users make an impulse purchase online every 2-3 weeks.
The report shows that most social media users on Instagram, Facebook and TikTok also use the platforms to discover new products. That’s critical for brand marketers seeking to reach Gen Z. According to a 2022 report by Salesforce, 56 percent of Gen Zers want to hear messaging about new products and services, and 76 percent are interested in sponsored digital experiences from brands.
Yet connecting with Gen Z consumers through content means marketers need access to the right data—insights that help marketers interpret trends and translate them into content or ad experiences Gen Z may want to seek out rather than avoid.
Marketers Will Increasingly Look To Lifestyle And Demographic Data
According to recent consumer data from Experian, retail marketers are going back to basics and focusing on gaining insights from data that allows them to understand what drives consumer interest (listed as “Modeled Lifestyles” in the chart below) and how those demographics typically behave. This represents a shift in marketers’ use of highly segmented custom audience data last year. As consumers tighten their belts and become more judicious in their purchasing, impulse buys may become less frequent. That makes a deep understanding of consumer interests and priorities essential to understanding where to direct marketing spend.
Brand marketers should focus on what works in social—relevance, intimacy, originality—and match campaigns to the best examples of successful engagement.
Social platforms are gold mines of user-generated content. Tailoring content or ad experiences requires granular insights into demographic behavior, but it also follows some basic common sense.
Social commerce works well because of the social graph—when something works well, tastes good, or makes us feel great, we naturally want to share it. Brands on social should share value, not simply messaging. Products that solve problems, offer new value in an original way or present an experience relevant to trending themes found through social listening tend to resonate as authentic with users. Focus on:
Personalization: Social media platforms like Instagram, TikTok and Facebook provide personalized content recommendations based on user behavior and preferences—the invitation to engage doesn’t require any work on the part of the consumer, it just scrolls into view. Marketers can leverage that data to connect with consumers in an organic fashion by ensuring that products or content shared are relevant to the audience’s current needs and interests, as well as to the moment.
Authenticity: Gen Z wants to keep it real. Connect with their desire for authenticity by presenting products and experiences like a friend would. Offer content that answers questions, solves problems or presents products that deliver a new flavor of delight that is surprising, unique and relevant to the moment.
In this episode, Alan and Heather discuss brand, the role of the CMO and why focusing on the fundamentals will never go out of style.
As an 80-year-old company, Lippincott has a unique perspective on balancing the cutting edge with longevity. They have seen trends come and go and even shaped some of them along the way. Heather talks in depth about the role Brand has played historically, the huge impact it can have when viewed holistically, and why a siloed CMO is not as effective as it can be if they are given a seat at the table. She also discusses the fundamental shifts happening in the industry as things move from an institutional era of branding to a human era of branding. She also stresses that the underlying fundamentals of deeply understanding your consumer and brand are just as important now as ever.
Heather Stern is the CMO at Lippincott and host of the podcast Icons in the Making. She wears many hats at Lippincott by managing all aspects of marketing, PR, and digital for their brand, as well as business development and sales. Heather oversees the entire funnel, from best-in-class brand activations to industry partnerships in collaboration with companies such as eBay, Google, IBM, Samsung and Southwest Airlines. She has been at Lippincott for ten years and serves as a trusted advisor to top clients across industries.
In this episode, you’ll learn:
The ways Heather’s specific CMO role at Lippincott has evolved over the past ten years.
How Lippincott stays relevant despite turning 80 this year.
What has changed in the industry and what has stayed the same?
[01:40] It all started with Janet Jackson
[03:10] Heather’s career path
[06:30] Why Heather’s CMO role is unique and a little meta
[08:20] How Heather’s role has evolved over the past ten years
[11:55] What has changed and what has stayed the same for CMOs, overall?
[16:00] The importance of being partnership oriented
[18:10] How Lippencot is defining brand today
[21:20] How Lippincott is trying to take the “squishiness” out of branding
[21:55] How has building and managing a brand changed and stayed the same?
[25:00] It’s all about agility and experimentation
[27:10] How gymnastics and a special Barbie inspired Heather’s career ambition and work ethic
[30:40] Find the joy in making mistakes and embrace the gray zone
[31:40] Experimenting with AI and how brands are focusing on sustainability
[34:40] Brands to watch
[38:20] Icons in the Making Podcast
[39:15] The risk of missing the forest for the trees
Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies but is an entrepreneur at his core, having founded or served as an executive for nine companies.
While global M&A activity slowed in 2022, VC still poured money into the gaming acquisitions as industry organizations addressed lingering concerns about in-game advertising and measurability.
2022 M&A Gaming Activity Surges
For many VCs, gaming represents a safe haven amidst economic uncertainty, according to Kurt Ma, a corporate partner at Bryan Cave Leighton Paisner LLP. Because gaming success is primarily driven by user experience, Ma stated powerful gaming franchises tend to produce reliable profits as long as users get their money’s worth.
“Gaming is quite different from a traditional business because gaming studios, on the whole, don’t get distressed in the same way,” said Ma. “You stand or fall on the strength of what you put out, and that’s true whether you’re a big player like Microsoft or an individual writing brilliant code in your bedroom.”
In 2022 M&A investment rose to $38.1 billion in 2022, up from $33.4 billion in 2021.
The flurry in M&A activity reflects an emphasis on strategic investment growth among VCs seeking to consolidate competitive advantage as gaming audiences and marketplace values rise.
Per a recent report by DDM, M&A activity made 2022 a historic year for games funding.
“The investment landscape in 2022 has been hindered by a crypto winter, macroeconomic headwinds, high-interest rates, inflation, and recession concerns,” the report reads. “Despite these challenges, our data shows that 2022 was still the second-best year in the video game industry for games funding, mainly driven by acquisitions as large gaming corporations acquire mature and established businesses.”
That drive towards consolidation will likely continue, some analysts suggest.
“Despite the short-term turbulence, the deal activity will remain strong,” according to a recent report by InvestGame. “There is potential for a few significant deals to occur in 2023, as the industry continues to consolidate, supported by strong investors’ interest and enough cash to pursue transformative deals.”
According to Pitchbook’s Launch Report: Gaming report, many of 2022’s deals focus on emergent tech and monetization.
“Although VC funding is evenly distributed between early- and late-stage VC, the content segment has proven to be the impetus for most late-stage funding,” the report states. “Early-stage funding is skewed toward emergent technologies, such as Web3 infrastructure and generative artificial intelligence (AI), in addition to gaming content.” In addition, the report reads, “deal value is also flowing to startups helping content, and intellectual property (IP) owners monetize gamers.”
As new money flows towards proven gaming properties and audience monetization, measurement and addressability is becoming a priority in the industry.
Measurement Stays Top Of Mind For Gaming and In-Game Advertisers
In July 2022, The IAB and IAB Tech Lab, in collaboration with the Media Rating Council (MRC), in releasing its Intrinsic In-Game (IIG) Measurement Guidelines to provide updated measurement guidelines for in-game ads. The goal was to support agencies, brands and gaming platforms as the marketplace evolves and how audiences interact with advertising changes. A lack of understanding about in-game ad metrics is hindering in-game advertising investment, according to Jack Koch, SVP, Research & Insights, IAB.
“Buyers want to make good quality buys that align with their brands and drive all the way through to purchase,” said Koch in a press statement. “And while that is absolutely possible in gaming today, perception lags reality.”
Despite a global audience of more than three billion gamers, advertisers have yet to view game advertising as a platform for reaching a wide audience like they might look at social media, according to the IAB. A recent IAB-Mediascience survey of 40 brands, agencies, ad tech companies, game developers, and publishers revealed that gaming ads represented less than five percent of their marketing spend.
China has been at the forefront of social commerce, with companies like Alibaba, WeChat and Taobao paving the way for a new era of online shopping. In contrast, brands in the U.S. are lagging behind in realizing the opportunities social commerce presents, but are also keenly aware of the transformations necessary to appreciate this growth.
While social behaviors are shifting in the U.S.—leading to a clear indication of social commerce growth—it’s the decision-making process and relationship between tech, commerce, creative, consumer insights and data that need to grow to realize the capacity for U.S. shoppers to be influenced by social engagements on any number of platforms.
“In the last 12 months, social commerce-based apps have taken a 10 percent market share away from traditional e-commerce platforms like Tmall in China,” says Qunin founder Thomas Nixon, who led Monday’s SXSW panel, Prepare for the Social Commerce Era and Look East!
“Expanding at a 26 percent CAGR, China is on track to reach $1 trillion by 2025, representing 30 percent of China’s e-commerce market,” Nixon added. In contrast, social commerce is projected to be “just 6 percent of e-commerce in the U.S. and 5 percent in the U.K. by 2025.”
In order to pick up the pace, Nixon says brands need to overhaul how they think about consumers, products, sites—and their own organizations—outlining how they can take a page from China’s social commerce playbook and shift the already-evolving key differentiators in shopping and social behaviors leading to the divide.
This includes acknowledging the difference in how we define social commerce, even as that definition is changing—to move beyond a conflation of all e-commerce 1.0 with the peculiarities of social commerce.
Social Commerce Is More Than Never Leaving Social To Make A Purchase
According to Nixon, there’s a misconception among some marketers that the minimum qualification for social commerce is an ad that links through to a website. He says it’s also a misconception to think of it as necessarily taking place within one social ecosystem.
“For me,” Nixon says, “there is a very, very different view on what social commerce is when working in the Chinese market versus working in other international overseas markets. … When you’re operating in a dynamic social-first market like China, you very, very quickly begin to understand, learn from and observe certain behaviors that tend to lead to a different way of thinking.”
Remaining within a connected social ecosystem when making a purchase is part of this, Nixon notes, but it’s not social commerce, in totality, since it’s not really “social.“
“True” social commerce relies on a number of touchpoints across apps, motivated by a growing trust in and democratization of Key Opinion Consumers, orKOCs, the rise of group shopping, an increasingly always-online population, the DTC model, cross-generational mobile tech adoption and gamified experiences.
This marks a shift from social commerce as a purchase made on social media, to purchases motivated by online social behaviors that just happen to take place in or across those ecosystems. In actuality, the “ecosystems” in question span a range of apps that all act as different constellations connecting the social shopping experience. And they’re heavily franchised.
“Forty-two percent of all unicorns in Asia are invested in by Tencent or Alibaba,” Nixon notes.
With this in mind, it’s better to understand approaches to social commerce as requiring a shift from traffic, product and site-based ends, to a more customer-centric focus. It also means an approach to social commerce that anticipates future shopping behaviors rather than recapitulating those of the recent past.
A Different Approach To Social Commerce
To prepare for the social commerce era, Nixon suggests companies adopt a customer-centric online presence, differentiated consumer operations and cross-functional collaborations, as well as omnichannel synergy and CRM across the journey.
Nixon outlines a three-point overhaul based on current limitations in approaches to social commerce outside of China. These include:
Overhauling consumers: A major problem for marketers is the limited profiling and lack of clear segmentation to adequately understand social commerce opportunities.
Overhauling products/sites: These currently lack the insights that social commerce apps provide and have outdated commerce and marketing operations, and products are not developed nor priced with social commerce in mind.
Overhauling organizations/teams: Organizations are working in silos or along a linear decision-making path. Instead of a linear model of workflow, consider positioning a digital specialist at the center of a process wherein consumer insights, commerce, tech, data and creative work collaboratively rather than in discrete, progressive steps.
Part of initiating these changes involves a revamped design thinking process, which Nixon notes has been the blueprint for successful social commerce engagements in China.
In brief, design thinking begins with a period of inspiration. During this phase, marketers should first understand the market through research, observe the market themselves and then define a POV. Following that, a process of ideation, in which ideas are developed, prototyped and tested, leads to the final phase: implementation. In the implementation phase, storytelling, pilots and business models are put into action. (Read more about design thinking here.)
Brands that have seen success with this approach include Pizza Hut, Lancôme and Philips. For Philips, the secret to the six-fold growth of its Home Appliances GMV (Gross Merchandise Value) was the following:
“Build incremental value through livestreams and content, connect with users within the WeChat ecosystem, facilitate the linkage between public and private traffic and establish differentiated content to achieve long-term relationships with users and promote the conversion of potential customers,” Nixon says.
Breaking it down further into a three-step management strategy for WeChat livestreaming accounts, Philips Home Appliances achieved 6x GMV with the following steps:
“Cold Start Period” – Divert private traffic to livestreaming by integrating with other WeChat features such as mini-programs to pre-heat consumer engagement.
“Livestreaming Strategy” – Adjust live content and pricing strategy based on consumer preferences.
“Stable Traffic” – Increase public traffic and accelerate private domain Click Throughs via personalized WeChat service and livestreaming to improve backend conversion rate.
The Transformation Is Already Happening
Senior U.S. marketing leaders are already invested in these overhauls to capitalize on a shift toward social commerce, bridging otherwise disconnected sales, product and marketing processes.
At the Tuesday morning featured session, A New School of Leaders Transforming the Marketing Experience, Unilever’s Conny Braams discussed why she ditched the “marketing” in her previous title in exchange for the title of Chief Digital and Commercial Officer as the company undergoes digital transformation.
“I think the most important challenge and opportunity for fast-moving consumer goods … is probably the creative commerce revolution,” Braams said.
She went on to explain how the company is approaching social commerce and the necessity for similar overhauls.
“You’ve announced me as the Chief Digital and Commercial Officer, and often, people are mistaken [about] why Unilever, as a big marketing company, would drop marketing from the title of one of the execs, and basically, that isn’t the case. … We’ve added sales to it,” Braams said. “That’s how it became ‘Commercial Officer.’ And the reason for this [is because of the external] convergence of entertainment, media, commerce [and] content. We basically said, ‘You know, if I sell something via Facebook or Instagram, later on probably via Netflix, is that marketing, or is it sales?’”
Braams noted that previous organizational structures and approaches to e-commerce were not adequate for social commerce and creative commerce—and shared why she has positioned herself as a digital specialist at the very center.
“You can’t really distinguish [sales vs. marketing] anymore,” she continued. “So we’re blurring [the] lines between marketing and sales internally to respond to what is happening externally. … We’ve taken marketing and sales together to really make sure that we build brands and convert to sales at the same time with all the new channels that are developing.”
In October of 2021, Unilever launched its Positive Beauty Growth Platform, an initiative to help the CPG giant partner with scale-ups and start-ups linked to social commerce in the beauty space.
There are more than 3 billion active gamers in the world, yet marketers often overlook games and gaming platforms as a powerful way to connect with multigenerational audiences. Nonetheless, gaming ad revenues nearly doubled between 2019 and 2022, topping $8.6 billion. According to ZoeSoon, VP of The Experience Center, IAB, gaming is a global cultural force that is providing marketers with new ways of connecting with consumers, from millennials to Gen Alpha. We spoke with Soon about the upcoming IAB Playfronts and some of the takeaways marketers could look forward to at the 2023 event.
What is new this year at IAB Playfronts?
Over the last year, we have seen the gaming ecosystem explode, and advertisers are starting to understand this audience’s importance. We will have two days diving into the ecosystem of gaming with presentations discussing the effectiveness of gaming, audience insights, and highlighting best practices for driving campaign ROI.
This year’s presenters include Samsung Ads, Activision Blizzard Media, Anzu, Niantic, Twitch, Zynga, and more. Attendees will also hear more of IAB’s editorial voice. We have a panel with leading brands Ally, Mondelez, PepsiCo, and beauty brand Coty, all talking about how they’re leaning into gaming to reach audiences. We also have a panel with agency leaders talking about brand safety in gaming. Any new advertising channel goes through scrutiny when it comes to two things: measurement and brand safety. So we wanted to meet those buy-side questions head-on.
Additionally, we launched the PlayFronts Partner Hub this year, a space to let attendees find and connect directly with presenters while at the event when questions and inspiration strike. The partner hub will feature seven of our presenters.
How are marketers feeling as they deal with all the uncertainty of 2023?
We are in a downturn market, yet marketers continue to lean into gaming. This is a signal to the industry that gaming is increasingly moving out of the ‘experimental’ budget. One thing savvy marketers have not lost sight of is that gaming is not just a great way to connect with their current consumers, it is also the gateway to Gen Z and beyond. Having been born into the worlds of Fortnite and Roblox, Gen Alpha will inhabit both virtual and physical spaces. Gaming is the first step in connecting with audiences who will eventually straddle both worlds.
What are some takeaways for marketers after the conference?
There are limitless possibilities for advertising in the gaming industry. Gaming is going to be on more screens than ever before, and we’re seeing a lot of brands come to the space. At the conference, attendees will walk away with consumer insights, an understanding of new and creative ad innovation, and the future of the gaming landscape for brands. Far from being a subculture – gaming is globalizing entertainment and culture.A better understanding of the gaming influencer’s and esports’ power in the gaming ecosystem. This year we’re proud to feature gaming talent in the show because it is important to us that this is not an advertising event about gaming, but that we bring together the gaming ecosystem and co-create a marketplace the way only IAB can.Last but not least, the IAB will unveil some proprietary research that will debunk common myths in gaming.
Thank you for your continued support and readership.
-The AList Team
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