NetworkNewsWire Editorial Coverage
NEW YORK, July 29, 2021 /PRNewswire/ -- From Main Street to Wall Street, the COVID-19 pandemic shook up the world, and the reverberations are still echoing. High-flying growth stocks related to software and cloud communications have cooled down since late in 2020 as people return to offices and unlock houses to go outside again. Sure, there is still talk about delta and other variants of SARS-CoV-2 wreaking havoc, but market participants are now also talking about what a post-coronavirus world is going to look like. Certain markets - the hospitality sector for instance - will steadily return to normal after more than a year of lockdowns. Others, such as media spending, will never be the same. Trends away from television and radio toward digital channels have accelerated and quite likely will experience a boon in the coming months and years as ad budgets increase will full economic reopenings. As advertisers look for solutions, they will continue to turn to social media influencers and content creators as sophisticated strategies to sway consumers toward their products and services. That's right in the wheelhouse of Clubhouse Media Group Inc. (OTC: CMGR) (Profile), a company aggregating an impressive portfolio of influencers and content creators from sports stars and entertainers to niche experts that have the ear of millions of followers and the platform technology to effectively target any demographic. Coming out the other side of the pandemic, top companies like the Trade Desk Inc. (NASDAQ: TTD), Magnite Inc. (NASDAQ: MGNI), ViacomCBS Inc. (NASDAQ: VIAC) and Roku Inc. (NASDAQ: ROKU) are knee deep in the advertising evolution, making adaptations that will continue to see the companies thrive going forward.
- eMarketer forecasts $455.3 billion in global digital ad spending in 2021, up 20% from 2020 with a bias towards display spending over search.
- Clubhouse Media Group has 200-plus content creators across four professionally run content houses and a network that reaches more than 400 million followers.
- CMGR also offers proprietary Magiclytics software, a robust platform for analyzing social media campaign effectiveness.
- Clubhouse just inked a joint services agreement with Rick Ware Racing, an American motorsports team that competes in the NASCAR.
Click here to view the custom infographic of the Clubhouse Media Group editorial.
$455 Billion in Digital Ad Spending
During the pandemic, people were forced into digital channels to shop, work, communicate and entertain. Advertisers know this and believe that many will maintain the digital lifestyle now that it's part of their life as evidence by eMarketer forecasting total digital ad spending of $455.30 billion in 2021. That's up about 20% from 2020, but a look under the hood shows that analysts are calling for 55.2% of the total spend to go to display advertising compared to 40.2% for search, widening the gap between the two by 5 percentage points, or $68.12 billion in dollars, from 2020.
Hungry for meaningful return on investment, advertisers are increasingly looking to the emerging market of social media influencers and content creators in combination with next-generations machine learning and artificial-intelligence technologies for the results they desire. Armed with these types of marketing tools, a juggernaut such as Nike can reach its global target audience as easily and precisely as a homemade, gluten-free cookie maker in southeastern Ohio can hit its target in Athens. Results that both are willing to pay for, as noted by a Business Insider market report estimating companies will spend up to $15 billion on influencer marketing in 2022, pushing it passed parity with local TV ad revenue.
Clubhouse Media Group Inc. (OTC: CMGR) is in front of the trend, already building a global network of four professionally run content houses, with each hosting in excess of 50 content creators. All four content houses have their own brand, group of influencers and production capacities to keep cranking out content to entertain and inform followers. Clubhouses' portfolio of services available to those handpicked influencers include management, production and deal-making. The business model is designed for Clubhouse to reach out in all directions, not only offering services to corporate customers but also via management services to individual influencer clients, as well as operating an investment business specializing in M&A or investments directly related to social media markets.
CMGR's flagship content house is emblematic of the brand. Clubhouse Beverly Hills operates from a massive 12,000-square-foot, seven-bedroom, nine-bathroom, $23-plus million gated house in the glamorous 90210 zip code. A complete production team and chosen group of content creators live in the house, constantly collaborating and producing content that is pushed out through all the group's social media channels. Other Clubhouse content houses include Clubhouse Europe, located on the island of Malta in the Mediterranean; DanceDome LA, which includes a custom dance studio; Society Las Vegas, located just 10 minutes from the world-famous Las Vegas Strip; and Dobre House, the newest clubhouse, also located in Beverly Hills.
With content houses of this caliber and content creators such as Indy car superstar Lindsay Brewer as part of the team, the reach is expansive. The network has more than 400 million followers in total and has delivered more than 1.5 billion monthly social impressions. The company defines its total followers as a sum of all followers across all social platforms, inclusive of Clubhouse influencers and corporate-owned social media accounts. TikTok's video platform is the single biggest driver of followers for the group at roughly 290 million, followed by 51.7 million on Instagram, 56 million on YouTube, 2.6 million on Snapchat and 2 million on Twitter.
The Magic Behind Clubhouse Analytics
Clubhouse's revenue model is circular. The company generates cash flow by claiming a piece of any deal related to content of its affiliated creators (contracted content or sale of proprietary content) and through providing data analytics from its package of tools branded Magiclytics. Through acquisition and in-house development, Clubhouse has created Magiclytics as a software platform enabling brands to monetize influencer marketing more efficiently by analyzing campaigns, optimizing budgets and succinctly selecting social media influencers best for any given job.
Coupling machine learning and artificial intelligence with other types of data (i.e., historical, campaigns, etc.), Magiclytics accurately provides insights about how brands should spend marketing dollars. Again, the model is circular in that a brand can come to Clubhouse looking for campaign management, influencers and analytics, or a Clubhouse-affiliated influencer can take the data to a brand to demonstrate why they are a perfect fit to advertise for their brand. Either way, Clubhouse makes money.
Product Launch on Tap
Clubhouse has an advisory board that is an anomaly for an OTC-listed company. With members that include a partner from venture capital fund A16Z (Andreessen Horowitz) and a leading media executive who previously held the positions of GM at PBS, managing director at BBC Worldwide America, president of Viacom Productions, and executive vice president of Primetime at NBC Entertainment, the company is not sitting still. CMGR intends to launch products under its own brand and use its stars and network power for viral advertising. With an army 400 million strong, influencers such as Lindsay Brewer, professional wrestler Taynara Conti, the Dobre Brothers, and more, the Clubhouse stable can get the word out quickly.
This is tearing a page right from the game plan of similar key influencer networks such as Kylie Jenner and Kim Kardashian, both of whom grew their brand's valuations to unicorn status ($1 billion+). In 2019, Jenner sold a majority stake of Kylie Cosmetics to beauty firm Coty for $600 million. Kardashian followed that by selling 20% of her KKW Beauty to Coty for $200 million in January.
Racing Sweet Spot
Brewer, who has been coined the Future of IndyCar, was just joined by another household racing name in Clubhouse's garage. Earlier this month, Clubhouse inked a joint services agreement with Rick Ware Racing (RWR), an American motorsports team that competes in the NASCAR Cup Series, NASCAR Xfinity Series, WeatherTech SportsCar Championship, NTT IndyCar Series, and IMSA Sports Car Championship Series. The pact with RWR also includes a new relationship with Fintekk, a motorsports racing and marketing company already working with RWR.
The new agreement is beneficial to all from the top-down. Each company will bring its social media and marketing teams to the table for collaboration to promote each other's brands throughout the term of the contract. For providing its comprehensive network to RWR, Clubhouse will get prominent logo placement on RWR vehicles during all 11 events its team races in both IndyCar and NASCAR circuits through September 26, 2021. This includes those of Formula One/IndyCar legend Romain Grosjean and IMSA Asia Le Mans champion Cody Ware and others in the RWR lineup.
Adapting and Thriving
Today's consumer is savvier than ever. The days of blasting consumers with digital pop-up ads are over; technology can filter it out or the user will simply close the tab annoyed. Banner ads are glossed over as if nonexistent. Television ads are skidding because of cord cutting, and DVRs make it possible to fast-forward through commercials. Indeed, the market is dynamic, and if brands and providers want to be at the top of their game, they must adopt next-generation technologies or potentially sacrifice share in the lucrative $150-billion global advertising industry.
The Trade Desk Inc. (NASDAQ: TTD), a global adtech leader, has recently launched Solimar, its new trading platform designed to help marketers optimize their digital advertising campaigns across the open internet. More than two years in the making, Trade Desk's bespoke platform was a response to the rapidly evolving digital-marketing environment wherein clients can capitalize on their first-party data for greater precision while advancing consumer-conscious privacy in a cross-channel digital media environment including CTV (connected TV).
Magnite Inc. (NASDAQ: MGNI) operates the world's biggest independent sell-side advertising platform. The company's platform enables publishers to monetize various screens and formats, including CTV, desktop display, video, audio, and mobile, as well as allows agencies and brands to access brand-safe ad inventory and execute advertising transactions. Adding to its offerings, Magnite just acquired SpringServe, a leading ad-serving platform for CTV that manages multiple aspects of video advertising for CTV publishers, includin such as inventory routing, customized ad experiences, and advanced podding logic, for $31 million.
ViacomCBS Inc. (NASDAQ: VIAC) is an iconic global media and entertainment company that creates premium content within its portfolio of consumer brands such CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+, Pluto TV and Simon & Schuster, among others. In addition to offering innovative streaming services and digital video products, ViacomCBS provides powerful capabilities in production, distribution and advertising solutions, meaning it stays on top of trends.
Roku Inc. (NASDAQ: ROKU), a vendor of streaming hardware, software and services, saw a boon during the pandemic lockdowns, as measured by gains in both user base and engagement. Revenue from Roku's platform unit, which includes its ad busines and media sales, during the first quarter of 2021 spiked 101% to $466.5 million, as streaming hours increased by 1.4 billion hours over last quarter to 18.3 billion.
The advertising space has always been extremely competitive, with content serving as king to attract viewers. In days gone by, the content may have been a newspaper article, a radio show or television program, but things have changed. Those pieces of content still have their places in monetizing from ads, but they are gradually seeing their importance being shared with the power of social media content and influencers to best target potential consumers. All that COVID did was put pressure on the gas pedal to accelerate an already inevitable trend.
For more information about Clubhouse Media Group, please visit Clubhouse Media Group Inc.
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