NEW YORK, July 27, 2021 /PRNewswire/ -- The $150-billion global advertising industry is looking for answers during a shakeup that has cable television charting a course emblematic of the Golden Age of Radio a century ago. Owing to the confluence of cord cutters, DVRs allowing people to skip commercials and an off-year for elections among other things, local TV ad revenue has been sinking in 2021. Now more than ever, brands are forced to keenly monitor marketing trends and adjust strategies that increasingly point toward digital solutions to reach consumers. Working with content creators and influencers, those people (and things) on social media with a large or specific group of followers that can be swayed into purchases by compelling messaging, appears to be particularly effective. By now, most people are aware of marketing via a personality, such as Kim Kardashian who can influence her followers to try a particular product. While that still has its place, the market is far more evolved and sophisticated today, with companies such as Clubhouse Media Group Inc. (OTC: CMGR) (Profile) aggregating an impressive collection of influencers and content creators with hundreds of millions of followers and combining that community with technology as a platform for collaboration and creation. That type of dynamic is a win-win for advertisers and the world's most popular social media apps and sites, including Facebook Inc. (NASDAQ: FB), Pinterest Inc. Class A (NYSE: PINS), Snap Inc. Class A (NYSE: SNAP) and Twitter Inc. (NYSE: TWTR).
- Brands are forecast to spend up to $15 billion on influencer marketing in 2022.
- Clubhouse Media Group operates a global network of four professionally run content houses, each with more than 50 content creators and a global network reach of more than 400 million followers.
- Clubhouse has also developed Magiclytics, a platform that analyzes social media campaigns, streamlines the process of identifying influencers and designs budgets for social media spend.
- Clubhouse recently signed a joint services agreement with Rick Ware Racing, one of the most accomplished and recognized racing teams in the world, currently running an Indycar and NASCAR team with former winning Formula 1 driver Romain Grosjean.
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$15 Billion in Influencer Marketing Spend
The reality is that ads and commercials have become a nuisance that most people circumvent at every opportunity. Pew Research Center's analysis of BIA Advisory service shows expectations for a 19% decline to $14.9 billion in local TV ad revenue in 2021. Online pay-per-click banners are heading towards extinction, as people have learned to look past them or simply click out of a site that makes them too intrusive.
Searching for quantifiable returns on investment, brands are turning to social media influencers and high tech that optimizes marketing efforts by using machine learning, artificial intelligence and other next-generation technology. Somewhere in the mix of influencers and technologies resides the next great thing in advertising: ultra-targeted marketing utilizing the full spectrum of influencers – including kidfluencers, nano-influencers and even computer-generated influencers – to reach the desired demographic, no matter how big or how specific. There's good money in it too, as evidenced by a Business Insider market report estimating companies will spend up to $15 billion on influencer marketing in 2022. Take note that is parity with over-the-air TV ad revenue. Times have changed.
Clubhouse Media Group Inc. (OTC: CMGR) represents the future of influencer media and marketing, with a global network of four professional-run content houses, each with more than 50 content creators. Every content house has its own brand, influencer cohort and production capabilities. The comprehensive portfolio includes management, production and deal-making services to its hand-selected influencers. Clubhouse also has a management unit specifically for individual influencer clients and an investment arm for M&A or investment activity specific to the social media influencer markets.
The flagship content house is Clubhouse Beverly Hills, a 12,000-square-foot gated house in the famed L.A. suburb that is occupied by a select group of content creators and full-service production team living and working together 24/7. Other content houses include Clubhouse Europe, DanceDome LA, Dobre House, WeHeartFans and Doiyan. With superstars such as Lindsay Brewer, dubbed the Future of Indy Car, as content creator, the reach of the Clubhouse portfolio attracts content creators and brands alike.
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, whether Clubhouse influencers or corporate-owned social media accounts. The majority of Clubhouse-related followers (~290 million) are on the wildly popular video platform TikTok, followed by 51.7 million on Instagram, 56 million on YouTube, 2.6 million on Snapchat and 2 million on Twitter.
Clubhouse derives revenue by taking a percentage of brand deals its affiliated creators make content for; the sale of proprietary content of its creators; and data analytics, one of the most important components of effective marketing. Clubhouse has developed and acquired software, data analytics and predictive analysis tools. Branded Magiclytics, these tools are the backbone of a platform that analyzes social media campaigns, streamlines the process of identifying influencers and designs budgets for social media spend.
The prescient Magiclytics output is the product of proprietary algorithms using machine learning, artificial intelligence, historical data and ad campaigns. Companies come looking for data, and influencers or influencers take the data to brands to demonstrate why they are a perfect fit to reach consumers that will be interested in their goods.
Launching a new product with star power behind it can be a billion-dollar opportunity. Just ask Kylie Jenner, who sold 51% of Kylie Cosmetics for $600 million to Coty in 2019, or Kim Kardashian, who sold 20% of her KKW Beauty to Coty in January for $200 million. Clubhouse is using the same playbook, working towards the development of its own brands.
When it does, CMGR has some star power onboard of its own. In addition to Lindsay Brewer, professional wrestler/influencer Taynara Conti, the internet phenom the Dobre Brothers, and other famous celebrities work in tandem with Clubhouse. The company's advisory board is another type of demonstration of networking and reach, comprised of a partner from VC fund A16Z and a top media exec who was general manager at PBS, former managing director at BBC Worldwide America, former president of Viacom Productions, and former executive vice president of Primetime at NBC Entertainment.
More Racing Traction
The star lineup got bigger this month when Clubhouse signed a joint services agreement with Rick Ware Racing (RWR), one of the most accomplished and recognized racing teams in the world. The new accord is three-pronged to also include FinTekk along with RWR, a professional motorsports racing and marketing company providing services specifically focused on the NASCAR Cup Series, NASCAR Xfinity Series, the IndyCar Racing Series, and the IMSA Sports Car Championship Series.
Clubhouse will receive logo placement on RWR vehicles in both NASCAR and IndyCar events, to include Formula 1/IndyCar superstar Romain Grosjean and IMSA Asia Le Mans champion Cody Ware and other drivers in the RWR roster. FinTekk will provide Clubhouse with marketing and branding consulting services utilizing the RWR racing platform and promote Clubhouse as the primary brand for NASCAR events involving RWR. Broadly, the companies will collaborate to promote each other's brands through social media and digital platforms and expansive fan bases through 11 scheduled race events running from July 18 - September 26, 2021.
If You Build It. . .
Advertising through social media is simply the name of the game today and for the foreseeable future. It is with good reason that the social media juggernauts have made impressive runs in the last year-and-a-half to be trading at or near all-time highs: supply and demand. If consumers are going to stay in high demand, as they always are, suppliers – those companies that bring them in droves – will too.
Facebook Inc. (NASDAQ: FB) had about 2.85 billion monthly active users as of the first quarter of 2021, a mind-bending 36% of the world's population. That traffic translates to advertising revenue, which is the bulk of the money that Facebook makes. During the first quarter, ad revenue surged 46% from the year prior quarter to $25.44 billion. Profits nearly doubled year-over-year to $9.5 billion, or $3.30 per share.
Pinterest Inc. Class A (NYSE: PINS) reported 478 million active users worldwide during the first quarter, a truly impressive number dulled a bit by following Facebook's stats. Market cap keeps things in perspective, where the multifunctional visual search engine or Pinterest has a market cap around $45 billion compared to the $1 trillion of its bigger counterpart. During Q1 PINS monthly active users grew 30%, while revenue improved 78% to $485 million.
Snap Inc. Class A (NYSE: SNAP), the owner of the popular picture sharing and chat app appropriately named SnapChat, is another channel that keeps attracting more people. Back in Q1 2014, Snap claimed 46 million global daily active users. In the first quarter this year, that number reached 280 million, up 15 million from Q4 2020. Revenue beat Wall Street estimates, coming in at $770 million for the quarter, a sharp gain from $462.5 million in the year earlier period.
Twitter Inc. (NYSE: TWTR) aligns with the best of them too, trumpeting 478 million users during the first quarter this year, up from 367 million in Q1 2020. Twitter posted revenue of $1.04 billion for Q1 2021, which was up 28% from $808 million a year prior. In a signal of it advertising prowess, ad revenue was up 32% to $899 million. The company also swung to a profit of $68 million, reversing a loss of $8.4 million a year earlier.
Advertising has always been a highly competitive marketplace. The coronavirus pandemic likely made it even more so, but it also merely accelerated trends towards digital methodologies that were already accumulating. Coming out of the pandemic, consumer habits are forever changed, which bodes well for companies with a deep presence and those with leading edge technologies to match brand to consumer.
For more information about Clubhouse Media Group, please visit Clubhouse Media Group Inc.
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