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September 15 2023 - Ready, Set, IPO!

September 15 2023 - Ready, Set, IPO!

👋 Happy Friday, friends. Nature is healing – IPOs are back in the news, Disney and Charter have reached a deal, and TikTok continues to drop new features (what feels like every hour). All that and more on AI, Adland & Entertainment. Let's get into it–

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Disney and Charter have reached a deal ending a 10-day blackout of 27 networks and ABC stations for Charter's 14.7 million subscribers. Charter subscribers will can now access Disney's channels, including FX and ESPN. The agreement was made just hours before Monday Night Football. Dana Walden, Co-Chair of Disney Entertainment, emphasized the importance of the ad-supported Disney+ tier, stating, "This is the future of our business."

J.M. Smucker is acquiring Hostess Brands, the maker of Twinkies and other snacks, for approximately $4.6 billion. The deal includes $34.25 per share in cash and stock and assumes around $900 million in debt, bringing the total value to $5.6 billion. The acquisition marks the union of two prominent snack companies. Hostess has experienced significant growth, with sales exceeding $1.3 billion in 2022, driven by increased prices on some products.

Google and the U.S. Justice Department have begun their opening arguments in a major antitrust trial that could have significant implications for the tech giant and the future of antitrust law. The trial is a nonjury case that will be decided by U.S. District Judge Amit Mehta, with potential outcomes including a breakup of Google or changes to its search engine promotion practices. The Justice Department alleges that Google's agreements with companies like Apple and Samsung to make its search engine the default option on browsers and mobile phones have illegally maintained a monopoly. Google argues it competes fairly for these contracts.

Birkenstock has unveiled its filing for an IPO in New York, signaling a revival in the US market for listings. The IPO is targeting a valuation of over $8 billion. While the company filed a confidential prospectus in July, this public filing sets the stage for a New York Stock Exchange listing from early October. The IPO is expected to occur in the week beginning October 9. This move follows several high-profile IPOs, including UK-based chip designer Arm and grocery app Instacart, indicating renewed confidence among dealmakers and IPO candidates after an extended fundraising freeze. Birkenstock reported revenues of $644 million in the six months ended March 31, up 19% from the same period the previous year. However, net profit dropped 45% to $40 million due to increased operating expenses.

TikTok is launching TikTok Shop in the United States, marking a significant move into e-commerce. The platform aims to transform itself into an e-commerce destination by enabling users to purchase products within the app, rather than leaving to buy them from a brand's website. TikTok Shop includes features such as shoppable product catalogs on brand pages, and creators can earn commissions through the TikTok Shop affiliate program. The company has already signed up 200,000 sellers and over 100,000 creators for TikTok Shop.

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Rundown
  • Arm has raised $4.7 billion in its IPO, valuing the company at over $54.5 billion. Arm is known for its 99% market share in mobile phones and has expanded into other markets like processors for PCs and servers. While the weak global market has impacted its sales, the company is making efforts to diversify, particularly in the automotive chip market. Arm is viewed as fundamental to the modern electronics industry, with its chips used in a wide range of devices, from smartphones to data centers.
  • Stability AI, known for Stable Diffusion, has launched Stable Audio, an AI-powered music generation tool. This tool utilizes a technique called latent diffusion and was trained on audio metadata and file durations, enabling the creation of "high-quality" 44.1 kHz music for commercial use. While other AI music generation models exist, Stability claims its tool offers greater control over audio content and length. However, unlike its open research mission for Stable Diffusion, Stability has not announced plans to release the model behind Stable Audio as open source. Users can generate tracks up to 90 seconds long through Stable Audio, and monetization is allowed, although copyright details remain unclear.
  • Global influencer marketing spend increased by 21.5% in 2022 to reach $29 billion, with the majority of the growth occurring in the US, according to PQ Media. The firm predicts that influencer marketing spending will rise by another 17% to $34 billion by the end of 2023. In 2022, marketers invested over $5.3 billion in macro-influencers and $4.4 billion in brand ambassadors. PQ Media defines macro-influencers as creators who focus on an entire category, while micro-influencers specialize in specific niches. Investment in micro-influencers increased by over 30% in 2022. PQ Media identified India as the fastest-growing influencer market in 2022, with spending rising by 33.6%.
  • Uber is reportedly working on a service called "Chore," similar to TaskRabbit, allowing users to hire individuals for various tasks beyond rides and deliveries. Code strings in the Uber app suggest users will be able to hire a "tasker" for a minimum of one hour, specifying the task, duration, and preferred arrival time. The app would calculate the cost based on task duration. While the code does not provide specific examples, similar services offer assistance with tasks like TV mounting, appliance repair, cleaning, moving, and furniture assembly.
  • Procreate, a popular illustration app, is launching a new animation app for iPad called Procreate Dreams. This app, set to be released on November 22, 2023, as a one-time purchase for $19.99 (no subscription required), is designed to streamline animation workflows, offering intuitive tools suitable for both beginners and professionals.
  • The Martin Agency has launched Martin Entertainment, a new offering focused on premium storytelling in various content mediums. Alanna Strauss, former head of creative-brand partnerships at Netflix, leads Martin Entertainment. She will also head the Cultural Impact Lab, which focuses on social, earned PR, and influencer work. The agency's goal with Martin Entertainment is to diversify how and where clients connect with consumers. The offering aims to shepherd brands across the full entertainment spectrum, from IP partnerships to custom content to integrations and experiential activations.
  • Starz CEO, Jeff Hirsch, expressed excitement about the impending separation of Starz from Lionsgate's studio unit. He believes this move will help clarify the Starz story, as it often flies under the radar as part of a larger company. Hirsch aims for Starz to become an "add-on service" with 20 to 25 million subscribers, emphasizing its profitability and reduced dependence on linear business. He sees the split as an opportunity for both Starz and Lionsgate to tell their stand-alone stories, making it easier for investors to understand their respective businesses. However, he also noted that content spending is being reined in but assures subscribers that creative solutions will maintain the quality of content.
  • Neutrogena has adopted an educational approach to its TikTok marketing strategy to engage with Gen Z consumers. Since joining TikTok in 2021, the skincare brand has focused on delivering skincare information and awareness by using a mix of paid and organic content and collaborating with influencers, dermatologists, and scientists. Neutrogena aims to stand out from the crowd and provide reliable information amid the plethora of product recommendations and misinformation. The brand closely monitors consumer comments to address questions and concerns, with plans to continue its educational messaging on the platform.
  • Pinterest has introduced several new advertising products and e-commerce integrations during its annual advertiser summit, Pinterest Presents. The platform's focus is on shoppable ads, with new formats like quiz ads and showcase ads to help brands improve conversions and sales. Pinterest has also expanded the availability of its premiere spotlight ads and introduced Pinterest Business Manager, which allows brands to manage and optimize their campaigns in one place. New e-commerce integrations with Salesforce Commerce Cloud and Adobe Commerce will let retailers upload their latest product catalogs. The platform has also introduced direct links and mobile deep links to make it easier for users to purchase items from brands.
Mobile screen view featuring a Showcase ad that highlights a Latina woman using face serum.
  • Intuit has been found to have misled consumers with "free" TurboTax ads, according to a ruling by the FTC. The judge sided with the FTC, which claimed that Intuit's advertisements were deceptive since most customers had to pay to use the software. The judge ordered Intuit to stop advertising its products as free and to provide clear disclosures about when consumers are eligible for free tax-filing services. Intuit plans to appeal the decision, arguing that the process was flawed and that it already adheres to most of the advertising practices outlined in the ruling.
  • Spotify is reportedly planning to launch a free audiobook trial program for its subscribers. This pilot initiative will provide users with access to up to 20 hours of audiobooks per month, featuring titles from major US publishers. While Spotify introduced audiobooks last year after acquiring Findaway, it initially followed a pay-per-download model. However, the new trial will allow users to download audiobooks directly within the Spotify app, eliminating the need to go through a web browser. This move aims to expand Spotify's services beyond music streaming and generate additional revenue, challenging Amazon's dominant Audible service in the audiobook market.
  • Media.Monks is launching Experience.Monks, its first dedicated experience offering, combining teams from Jam3, the experience design shop it merged with two years ago, and its capabilities in experiential, events, metaverse, gaming, livestream, VR, immersive web, and AR. The move formalizes the combined efforts within Experience.Monks and aims to make Media.Monks' capabilities more consumer-focused rather than tech-driven. Experience.Monks will service Jam3 clients such as Adidas, Sonos, and eBay, along with Media.Monks clients Google and Meta. The new offering will combine more than 350 employees globally.
  • Amazon Prime Video is expanding its reach to vehicles equipped with Google built-in, including the all-electric Polestar 2 and eventually the Volvo EX90. This new in-car app availability, along with other features from Google's Android for Cars team, was announced at the Detroit Auto Show. This move underscores Google's push into the automotive sector.
  • Tim Burton has expressed his unease regarding AI replicating his distinctive animation style. He likened the experience to having something taken from his soul and described it as "a robot taking your humanity."
  • Google has conducted another round of layoffs, cutting hundreds of recruiters and related staff members. The company's recruiting group, which once had over 3,000 employees, has experienced significant layoffs, stating that cuts were made due to a decrease in the volume of requests for recruiters.
  • McCann is launching McCann Content Studios, a unit designed to consolidate its social media and influencer marketing services. This move will integrate ITB, IPG's influencer agency, into the new studio. McCann Content Studios will offer a range of capabilities including creative ideation, content creation, influencer co-creation, and performance measurement. This restructuring reflects the growing focus on the creator economy for brands.
  • NFL's Toy Story Funday Football is an upcoming animated football game between the Jacksonville Jaguars and Atlanta Falcons. The event will take place in the Toy Story universe and streamed on Disney+ and ESPN+. It uses Next Gen Stats and on-field tracking data to recreate the game in "Andy's Room," featuring Toy Story characters like Woody and Buzz Lightyear.
  • Roblox is introducing new features and expanding onto platforms like PlayStation and Meta Quest to make the metaverse platform more appealing to brands and marketers. Key updates include Roblox Connect for private conversations, an AI assistant for creators, in-game subscriptions, an expanded marketplace, and expansion onto PlayStation and Meta Quest. By expanding to new platforms, Roblox seeks to offer brands additional reach and visibility, attracting advertisers to its in-game ad opportunities. The Partner Program also aims to simplify brand engagement on the platform.
  • Ikea has chosen McCann as its first global brand marketing partner, with McCann Spain in Madrid leading the business. McCann will oversee Ikea retail for the Ingka Group, which comprises 379 Ikea stores across 31 markets. This marks the first time Ikea has appointed an agency for this role. The move is part of Ingka's new global agency approach and framework, aimed at simplifying processes and supporting creative quality and stronger positioning. Ikea's existing local and regional creative agency relationships will remain intact. The partnership with McCann will commence this month, with campaigns set to launch in spring 2024.
  • TikTok has partnered with Billboard to introduce a top 50 chart that monitors the most popular songs on the platform. This chart considers the number of videos created with a particular track, their views, and user engagement. It focuses on trending TikTok songs in the US and updates every Thursday morning. Users can access the chart within the TikTok app and on Billboard's website.
  • Marketers and advertisers are increasingly focusing on attention tracking as a key metric. This is in response to changing consumer behavior, driven by factors like Google's cookie deprecation and Apple's privacy changes, which have disrupted how consumers interact with digital advertising. Attention tracking measures the level of engagement and focus that consumers have on ads, and it's becoming more critical as traditional behavioral signals become less reliable. The lack of standardized methods in this field poses challenges, and industry organizations like the Advertising Research Federation (ARF) are working on initiatives to increase transparency and standardization in attention tracking.
  • GroupM has partnered with A+E Networks to secure a first look for its clients on all of the media company's sponsorship slots for its diverse programming. The collaboration aims to expedite the production and amplification of critically important stories from diverse storytellers. A+E's content opportunities will need to meet GroupM's diversity, equity, and inclusion standards. The move follows a similar partnership GroupM formed with Warner Bros. Discovery earlier this year to support diverse content. Domino's is among the brands already participating in A+E's content through GroupM's Diverse Voices Accelerator.
  • Verizon has selected Ogilvy as its creative agency of record for its consumer business, expanding on their existing partnership. Ogilvy began working on consumer projects for Verizon, including the "It's Your Verizon" brand platform and the NFL Sunday Ticket campaign. The move comes after Verizon awarded Ogilvy AOR duties for its Verizon Business unit in December 2022. Verizon's CMO position is currently vacant. Ogilvy won the consumer business without a formal review. Ogilvy's work aims to reframe Verizon's brand for consumers seeking more control over their phone plans.
  • Top tech executives, including Elon Musk, Sundar Pichai, Mark Zuckerberg, Bill Gates, and others, met with lawmakers in Washington to discuss AI and potential regulations. The meeting, known as the A.I. Insight Forum, was organized by Senate leader Chuck Schumer and brought together more than a dozen tech leaders to discuss the future of AI and its regulation. The meeting highlighted the tech industry's proactive stance in influencing AI's direction and addressing concerns about its impact on jobs, disinformation, and safety. While there was general agreement on the need for AI regulation, there were differing views on open-source AI and security risks. Elon Musk expressed concerns about the risks posed by AI, while others emphasized the importance of open-source development.
  • RISD has launched a new initiative called RISD ExED to provide educational opportunities for business professionals, regardless of their formal design training. The program aims to enable individuals from any industry to enhance their work with new insights by exploring the intersections of art, design, and business. The first pilot program, "The Art of Creativity," is designed for participants from any field who want to reinvigorate their work through creative practice.
  • Anthropic has partnered with Boston Consulting Group (BCG) to provide BCG clients with access to Claude 2 and Anthropic's AI technology. This partnership will enable BCG clients to use AI models for various strategic solutions, with a focus on driving innovation and improving team productivity. BCG will advise clients on the strategic applications of Anthropic's AI and assist with integration for business outcomes. The integration will support tasks like synthesizing long-form documents, market research, fraud detection, demand forecasting, and more.
  • Spotify has introduced a new tool called Showcase that allows artists to promote their music directly within the streaming app's Home feed. With Showcase, artists can create customizable mobile cards to introduce their music, both new and catalog releases. These cards will appear as sponsored recommendations at the top of Spotify's Home feed, one of the most prominent advertising positions in the app. Spotify claims that users who see a Showcase promotion are six times more likely to stream the promoted release. Artists can target specific listener types and customize their campaigns, with a minimum budget of $100 and a campaign duration of 10 days or until the budget is spent.
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Joe Nash

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