Five things on Friday #383
From influencer to gaming agencies: trends in agency acquisitions and the future of the industry.
Things of note for the week ending Friday August 23rd, 2024.
#383
INTRO
I think technically we’re still in ‘midsummer’ - I mean, it’s scheduled to rain this week and there’s no way I’m relinquishing my hold on the summer months quite yet.
This is also me saying: ‘infrequent delivery will continue until I say so’ 😅
HOW HAVE YOU BEEEEEEEN?
Me? I am ALRIGHT thank you. As I write this intro, it’s Tuesday morning and I’m on the train to work. I got back from a jaunt to Italy with the eldest in the early hours of last Friday (more on this in a bit) and I’ll be headed back to the airport this coming Saturday as I head to Australia to give my GAMING x BRANDS keynote speech at The State of Social 2024.
The theme of this year’s conference is ALCHEMY so of course, my talk is themed around that + brands + games.
Here’s slide one.
Dreamy. If you’re good, I’ll tell you a bit more about it when I’m back.
(It’s now Friday - - fly tomorrow - wish me luck)
The only other thing I need to tell you this week is my bestie Amy Kean asked me to tell you that GOOD SHOUT is running its GOOD RETURN course again next month.
Amy writes:
“Good Return is the course for new mums, and it's so so so so so important! It helps them find their voice after maternity again, and our first cohort in January was the BEST course we've ever done. It was beautiful, transformational, and needed.”
So if you are a new mum - or if you know one - and the return to work is on the horizon, get in touch with Amy (website here) and tell her please.
She’s very excited.
Right, where were we? That’s right.
Midsummer Things.
Shall we?
—
TO THE THINGS!
THING 1. WHY BUY AN AGENCY?
This week’s accidental long read.
I’ve been noodling on a question for a while now and I’ve asked it out loud a few times too.
Why do holding companies buy other, often-smaller agencies? And where might current trends lead?
I don't know is the answer - but that hasn’t stopped me noodling on it... so here's some open plan thinking on that:
✨ ✨ ✨
July 2024
Stagwell acquires LEADERS, a digital agency specialising in influencer marketing.
July 2024
Publicis Groupe acquires influencer-marketing giant Influential
March 2024
TSL Media Group acquires influencer marketing services agency, X10 Media
March 2023
WPP acquires data-driven influencer agency, GOAT
March 2023
Keywords Studios acquires influencer agency, Digital Media Management
May 2022
Brainlabs acquires influencer marketing agency, Fanbytes
February 2022
WPP acquires US influencer agency, Village Marketing
August 2021
Amyris acquires influencer marketing agency, MG Empower
A mix of talent, tech, and inorganic growth across the board. It’s clear influencer is where its at. And with the influencer ‘bubble’ showing no signs of popping (arguably thanks in no large part to a functioning regulation being properly in place), influencer is considered more and more a mandatory part of a marketer’s media plan (they’re even being invited to the White House).
So what next? Will the influencer agency shopping spree come to an end? It might. It might not.
What I’m interested in exploring is where holding companies and (and private equity) might spend their money next?
If you believe some opinions, gaming agencies should be next on the horizon.
Rhys Hancock, a technology, media and entertainment consultant who previously worked at Epic Games and, before that, co-founded metaverse studio and agency Metavision, sat down with Jack Benjamin on The Media Leader Podcast recently to discuss why he feels media agencies could be doing more to pick up the slack.
Hancock argued that agencies struggle with global gaming remits, a lack of integration with specialist gaming agencies and are too siloed when it comes to creative and media. He suggested a few steps agencies could take to gett better in the burgeoning media channel, the ones that are doing well — and why holding companies should take note.
I’m not so sure.
Saying ‘gaming is not getting enough attention as it deserves on the media plan’ or arguing why media networks need to be ‘eyeing up gaming agencies' to power the global ‘gaming remit’ belies not only a lack of understanding of media but also - seemingly - gaming agencies.
From a 'gaming agency' perspective, if we go back to the months immediately post-covid you'd be forgiven for thinking the holding company buyouts might move out of influencer and instead into gaming.
As it stands, this has been put on ice. Due to in no small part, the complete and utter decimation of the industry from the beginning of 2023 through to today.
2023’s great games were overshadowed by a dark cloud of layoffs - 9,000 people without jobs, The Verge
89 Days Into 2024 And 8,800+ Video Game Layoffs Have Been Announced, Kotaku
Games industry layoffs surpass 10,000 for 2024 so far- over 20,000 in less than 18 months, Eurogamer
Even if you ignore the stark reality of the post-covid normalisation (read: capitalism) setting in, telling others that agencies are missing out on ‘a gaming remit' without then explaining what that remit might look like is short-sighted, at best, and demonstrates an education gap - nay trap - that many fall into.
What is a ‘gaming remit’?
Try and imagine these headlines for a moment:
'WPP acquires [Agency Games Ltd] to beef up its gaming remit'
‘Publicis acquires [Games Agency Inc] to improve its gaming remit’
You would look at that and go ‘Ooo, gaming remit.. what?’ because, well, it doesn’t really make any sense. The phrase 'gaming remit' is so opaque - so foggy - it demands unpacking.
Is it: 'brand building in gaming'?
Which brand? Which games? Where? What platform(s)?
Is it: 'building branded experiences in or on a gaming platform'?
Which one? What budget does that come from? Is it media? Or creative? What are the associated costs and ROI?
Is it: 'advertising FOR a game'?
Which game? What's the budget? Have you worked with games marketers before? What kind of game? Is it mobile, AAA, or indie or…?
Is it: 'advertising IN a game’?
If so, are you a serious person and are looking at grown up platforms and partners like Candy Crush - via Activision Blizzard Media - or are you an idiot and buying vapourware with the likes of [redacted but you know who they are]?
We’re verging into opinion now but, afaic, as it stands currently:
Games developers aren't equipped with [or frankly have much interest in] the tools or the inclination to make easy hooks for advertising to plug into.
Games publishers MIGHT be interested in brand partnerships but you need to be able to prove that the partnership is worth spending [their extremely limited] time and money on.
Games platforms are potentially a more serious conversation but you'll need some hella (read: global) reach for anything meaningful.
So I ask again:
Where is the trend of agency buying headed next?
Let’s try something else.
Why would you not buy an agency?
Aside from all the obvious things (Poor revs. Bad bookkeeping. Psychotic founders etc). Lack of IP is a big one. Nothing about ‘big data’ or ‘AI’ or [insert one of both of those things]-driven influencer work’ mentioned in any press release from the last 12mths.
Also: just not on trend.
Why buy an agency?
Talent. Tech. Inorganic growth. IP. Geographic footprint. Clients. Sometimes it might be to knock out some killer competition that you may as well partner with and make a bigger pie. Sometimes.
And also: Is it on trend?
Or better yet:
Is this purchase the direction of travel of
Mr Gretzky’s puck?
Let’s look at some data. And this time we’ll use some fresh data from NewZoo.
Specifically, the excellent PC & & Console Gaming Report 2024. Looking at this story, games looks exciting.
‘Hey, games is still growing - we should probably review our gaming remit!’
When you look at what’s driving that growth, you see a different story. Take a look at these next two charts.
Many of the top ten games are older than seven years old.
When it comes to growth you’re looking at Live Service Platforms/Games or Established Franchises (NewZoo buckets them into four but it is only really two).
It gets better.
The next few data points are from the same report but to save time and space (yeah, this went long- not sorry), I’m going to summarise:
Playtime is trending down (I’d argue renormalising post-covid; the report doesn’t show pre-covid numbers).
66 titles accounted for 80% of playtime in 2023.
Titles that are over six years old accounted for more than 60% of playtime (these are live service or platform games).
Top five older titles accounted for 27% of playtime (think Fortnite, Minecraft etc).
60% of playtime went on franchises (Call of Duty, FIFA/EAFC, NBA etc)
Which means for a wholly new title - new IP, new idea, new everything - in 2023, new titles were competing for 8% of total play time available.
EIGHT. PERCENT. New IPs man, risky af.
So where’s the money?
Well, it’s clear that any new game is going to have to compete with Roblox and Fortnite. It is inarguable. They eat so much playtime it’s obscene (go and look again at the top ten games by platform, above). Which is why so many other publishers are going down the premium live service model (think Diablo IV or EAFC).
So for your ‘gaming remit’ - where does this leave you?
And more importantly, where’s the puck going?
I’m going to table this: Platform games. Or as some people like to call them ‘Metaverse platforms’.
But whatever, let’s roll with it.
The data would suggest that for a successful agency to have a meaningful ‘gaming remit’ it makes sense to have some kind of foothold in metaverse platforms.
In fact, games makers are now so popular that the smart brands are moving away from building their own individual (and frankly sub-par) islands or worlds in Fortnite and Roblox and instead setting up shop inside already successful indies by games creators.
Versace launches partnership with top ten Fortnite Creator island, Murder Mystery.
National Rail launches advertising activation in Roblox World, Apartment Tycoon (ok fine, this was awful but you get the point).
Why start your own party when you can join someone else’s?
And what’s interesting about this is that the creators of these highly successful islands (they make several hundreds of thousands of dollars a year, if not millions, a year) are basically the YouTubers of tomorrow.
Not agencies. Content creators. But the content they’re creating isn’t TikToks or live streams, its successful platform games.
Content creators that don’t currently have any talent management.
As a complete aside, any agency telling you they can build you a successful brand experience on Fortnite or Roblox and hasn't done that themselves is probably selling you a lie.
(I wonder how many of you are in charge of large budgets that you’re about to sign to an unproven agency for a Roblox activation. I wonder indeed).
-
Let’s go back to the beginning.
You’re an agency. You need to gen/skill/expert UP in some expertise you don’t currently have. What do you do?
Hire people? Hire teams? Acqui-hire an agency?
It stands to reason that if you’re serious about investing in creating meaningful experiences for brands and players, then it makes the most sense to either a) do grown up media buying (see above) or b) buy up agencies working with game-making influencers directly.
If you’re thinking about doing grown up media buying with meaningful ROI in games then I’m sorry to be the bearer of bad news but the big dogs are already ahead of you. And if you're not aware of that yet, you're probably not invited to the dinner party (or worse - you’re on the menu).
So we’re back on creators again.
IF you’re reading this and you make islands for a living - successful ones at that - then you very well might be the next big thing.
IF instead of that, you’re able to curate, package up and then SELL talent that can create demonstrably amazing brand worlds that people will play and spend time in then… well… I think you’ve just made the next creator agency.
And IF we're serious about where holding companies should invest to bulk up their 'gaming remit' - we're back to influencer + grown up media
That’s a lot of ifs.
Here’s one more:
If you're in games and you're looking to sell, then what is it you're actually selling?
Talent?
IP?
Clients?
If it's not relationships that deliver ROI then you're probably gonna struggle in the next wave of whatever your gaming remit looks like.
My bet is that holding companies buying up influencer and creator managers isn’t going to stop but the kinds of creators that make up the books, that’s what will change.
Where is the agency that does that?
And who’s going to buy them?
Let’s check back in five years.
And hey, if this is you, let me know, yeah? I want in.
Go get that puck.
THING 2. FOUR FRIENDS CATCH UP OVER PASTA
You may have seen this already.
But whatever, it hit me.
THING 3. THIS WEEK IN… TRANSMEDIA
Well, kinda.
Tomb Raider - the legend of Lara Croft is a new animated series coming to Netflix on October 10th.
Next, easily the most exciting announcement to come out of Gamescom this week, this trailer for SECRET LEVEL.
Quote:
“SECRET LEVEL is a new adult-animated anthology series featuring original stories set within the worlds of some of the most beloved video games. From the creative minds behind LOVE, DEATH + ROBOTS, each of the 15 episodes is a celebration of games and gamers.
Games that inspired the 15 epic stories include Armored Core, Concord, Crossfire, Dungeons & Dragons, Exodus, Honor of Kings, Mega Man, New World: Aeternum, PAC-MAN, various PlayStation Studios games, Sifu, Spelunky, The Outer Worlds, Unreal Tournament and Warhammer 40,000. SECRET LEVEL, arrives on Prime Video December 10.”
Yeah, all over that like a chocolate-covered dinosaur.
NEXT.
Ah yes, it WAS Gamescom this week, in Cologne. Did I mention? I’ve been for the past two years but managed to skip it this year, however, that doesn’t stop me sharing the more interesting bits with you.
The big one was that hitherto billed as Xbox exclusive title, Indiana Jones and the Great Circle (watch the Gamescom trailer) is in fact only a timed exclusive and will be coming to PlayStation a mere handful of months after Xbox.
This is interesting.
One, licences don’t come cheap so recouping some of that cash from a cross-platform release makes sense. Two, Xbox isn’t exactly winning this console war so making bank from releasing its bigger/better first party titles on its competitor platform makes a lot of sense as well.
Sea of Thieves has already made a bucket of cash. Starfield soon to follow? Let’s wait and see. I would love more Xbox first party titles on PlayStation. And, if anything, it would then follow that Sony releases an occasional first party title the other way…
MONEY eh? It makes companies do the wildest things.
-
Speaking of console wars, this is a great read on why (and how) Nintendo continues to win by refusing to participate.
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WHAT IS JAMES PLAYING?
Im massively back into No Man's Sky at the moment. The new world's update is sick and I've really enjoyed the latest expedition too.
What else? The latest update to LEGO Fortnite (the one with the battle-bus-stops fast travel mechanic) has re-inspired a new sense of exploration with me and the kids - so that’s been fun too.
Coming up: as much as I LOVED playing the Black Myth: Wukong demo at Gamescom last year, I'm having real trouble separating art from artist - so currently have no plans to pick it up.
Outside of that, I'm waiting for Star Wars Outlaws to drop next - I am holding out hope for Ubi to have made a banger so will pick that up when I’m back from Australia.
What are you playing?
THING 4. WRITING THE BOOK OF ELI
One of my favourite people to follow on Threads is Gary Whitta. He recently published the first page of THE BOOK OF ELI and OH MY GOD IT'S AMAZING.
Damn.
As someone exploring his own writing ambitions right now, I found these words arresting - and inspiring.
THING 5. “HELLO FROM THE CLIENT-SIIIIIDE”
A short while ago, before I went to Italy, I saw an excellent Linkedin post up from one Mark R, a brand planner at Meta, who put together ‘a few things I’ve learned since going over to the client side’.
As most of you know, I currently spend the lion’s share of my freelance time at LEGO. It’s an agency job but it is client-side.
And Marks’ insights are so on point.
If you’re an agency head thinking about going client-side, then you should definitely read it.
If you have no plans to ever go client-side, read it anyway. It’s that good.
BONUS SECTION
THIS IS THE BONUS SECTION. BONUS LINKS THAT BUMP US OVER FIVE THINGS BUT DUE TO TIMING AND SELF-IMPOSED WRITING RESTRICTIONS ARE LIMITED TO PITHY COMMENTARY ONLY.
ENJOY.
Current Spotify mainline, Chappel Roan, has had enough, thanks (good read).
Vikki Ross did Google Firestarters. And it’s great, obvs.
One of my old Ogilvy planner pals, Jenni Ashwood (nee Mellor) now runs marketing for a bloody distillery and so me and a mate went to try some last night and it was lush. Filay Bay is recommended.
We can't see brands ever returning (advertising on X).
Disney's self-inflicted PR disaster has finally resolved itself.
I know I went LONG on gaming and advertising at the top but if you want more, Matthew Ball is on good form here explaining why Roblox is still yet to turn a profit.
The poignant memorial that is The Hungerford Bridge skateboard graveyard.
Disney x Fortnite? More to come.
Happy birthday Martin (nice self-reflection)
The F1 creator name change thing is ABSOLUTELY MENTAL and frankly, when I worked on this stuff with NOKIA at the back end of the late noughties, we decided that the fans could actually keep the world 'Nokia' in their website URLs because, THEY WERE OUR FANS. How is this even still a thing. It's 2024! Oh wait. Hang on. I think it's money.
I’m recommending Joel Snape’s newsletter because a) Holly said it was good (and she said the same about mine to him) and b) he recommended mine - how nice!
Bourdain’s tour of London - picked up by Marshall's Professional Lunch newsletter - has a great bit in it about the St John in London (and features a young Gordon Ramsay too). Worth a watch.
When it comes to social media, what is a view? (insightful and a good cut out and keep image on it too)
YOU ARE REACHING THE END OF THE NEWSLETTER. MIND THE GAP.
As I sign this off to you now, it’s just after 11am on Friday August 23rd. I’m flying to Perth tomorrow. Italy last week. Denmark in a fortnight. A fair bit of travel this summer, it seems.
Oh, I should mention, on the Italy front, me and the eldest went to a place called GARDALAND. A theme park near Lake Garda. It’s basically Alton Towers, but for Italians, and honest to God cost me about 20% of what it cost to take the family to Disneyland Paris a couple of years back. tl;dr: take your fam - we had a ball.
Finally, I’m signing off this week with a single call to action. Quite a few of you are making the shift over to Threads - at last, welcome, etc - if we're not already connected there, please find me on Threads (and say hello too, don’t be a douche etc 😉) as it is my main sharing platform and I'd love to chat to you ALL more regularly there.
Right then, I better pack.
Until next time?
Whatley out x
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