NetworkNewsWire Editorial Coverage:
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.
$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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