The race for cannabis dollars, agencies go on an ad-tech crash diet, media companies on the move
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First, news from the cannabis world. (Promise to keep this pun-free - you're welcome.) Senior reporter Tanya Dua got the scoop that ad holding company Havas is getting in on the action by opening a cannabis consulting arm.A leading global ad holding network is launching a cannabis consultancy, hoping to bring in $10 million in its first year. Behind the news:
- Cannabis companies are attracting billions in investment, and Havas sees a big opportunity to provide cannabis-related education, research, and training to drug, health, and wellness clients.
- Cannabis advertising has been limited by regulatory and platform restrictions, though. US marijuana retailers spent $4.1 million on advertising in 2018, a tiny fraction of the $151 billion ad pie, according to Kantar.
- Still, Havas' move could help legitimize the industry and prompt other agencies to follow suit.
Tanya also profiled Jonathan Mildenhall, a veteran CMO who's trying to cash in on the resurgence in brand building.
Airbnb's former CMO left his high-profile job to help tech brands like Pinterest and Uber find their purpose - and his consultancy is on track to make $8 million in revenue in its first year. What's behind the renewed interest in brand building:
- Young people want the stuff they buy to stand for something and tech companies realize they need strong brands to withstand crises like those of Uber and Facebook.
- Direct-to-consumer brands that started on social media increasingly realize they need to do traditional brand building in order to grow beyond their digital roots.
Speaking of DTC brands, we reported on new research that found nearly half of shoppers are buying these products, which has terrifying implications for traditional marketers. The key findings, from the Interactive Advertising Bureau:
- 68% of people buying direct-to-consumer brands are age 44 or under, compared to 40% of people who only buy old-school products.
- Almost a third of DTC shoppers are actively creating, sharing, or reposting content about these products, about twice as many as those who only buy traditional brands.
- One-third of DTC buyers are influenced by paid influencers, compared with just 8% of people who only buy traditional brands.
What it means: Even if most of these companies fail or stay small, collectively they can dent the market share of the big incumbents. And these shoppers have vastly different expectations of companies they buy from than those who only buy traditional brands.Also this week, senior reporter Lauren Johnson dove into how ad agencies are culling their ad-tech vendors to defend themselves against privacy regulation and clients' transparency concerns.
- WPP's GroupM, Havas Group, and Publicis Groupe are in various stages of slashing their ad-tech rosters.
- Ad-tech firms like OwnerIQ in turn are scrambling to stay relevant.
- However, some agencies worry that too much ad-tech consolidation will only strengthen the walled gardens of Facebook, Google, and media companies.
And I had some fun asking VCs which media companies they think will take off this year. A few themes that came up repeatedly: sports, diversified revenue, and loyal audiences. Here's what they said: Investors from Comcast Ventures, Lightspeed, and others name 11 hot media companies they think will blow up this year
Here are other great stories from media, marketing, and advertising. (You can read most of the articles here by subscribing to BI Prime; use promo code AD2PRIME2018 for a free month.)Netflix's 'Stranger Things' generated buzz for brand partners like Coca-Cola, but fell well short of 'Game of Thrones'