Right About Now - Legendary Business Advice - eSports Series ft. Itamar Benedy

Episode Date: August 11, 2020

In this episode, Ryan and Itamar talk about the business model of Anzu.io, sponsorships and partnerships, branded content in gaming, and eSports tournaments. To follow along in the series or to check out more episodes, visit our website theradcast.com | @the.rad.cast or @ryanalford on Instagram  If you enjoyed this episode and want to learn more, join Ryan’s newsletter https://ryanalford.com/newsletter/ to get Ferrari level advice daily for FREE.  Learn how to build a 7 figure business from your personal brand by signing up for a FREE introduction to personal branding https://ryanalford.com/personalbranding.  Learn more by visiting our website at www.ryanisright.comSubscribe to our YouTube channel  www.youtube.com/@RightAboutNowwithRyanAlford. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

You're listening to the Radcast. If it's radical, we cover it. Here's your host, Ryan Alford. Hey guys, what's up? It's Ryan Alford and Riley Clark, I might add. Yes. Hey, Rod. Here on today's episode of the Radcast. We're continuing a multi-part series on e-sports, all things,

esports, gaming, and really excited to have Edomar Benadie, the CEO and founder of Anzu.io. What's up? How are you? Yeah, I'm good. I'm great. Thank you for having me here. Excited to have you on. So, you know, being a quasi-marketing and business podcast, as we talked a little pre-episode in Amar, it's nice to have something a little maybe mainstream down the line on the marketing and advertising side for e-sports with, you know, your ad platform, which I know we'll get into. So we're excited to maybe talk a little more marketing shop. then we've been from a, we've been talking real broad e-sports and the opportunity and really the growth of e-sports, but excited to kind of get into it and hear what all you've been up to. Yeah.

And, you know, I mean, e-sports is getting tremendous, you know, attraction in the last year is from brands and even, and even like brands investing in e-sport teams, investing in leagues, but someone needs to do with the business model, right? That's right. Well, let's start there. Idemar, let's start, you know, maybe give us a little bit about your career journey, you know, your experience in e-sports, and then maybe that'll build us up to kind of where you're at today. Sure. Sounds good. So, hi, everyone. I'm Itamar, the founder in the Sea of Anzu. Long Love, Hate, Relationship with the advertising landscape. and started basically on the early days of when the app store was launched. We were building advertising and monetization solutions dedicated for mobile. We saw that mobile was a new platform that the rules from web and from cookies could not really apply. So took advantage of that very fast growing market in the last years.

And something like four years ago, we spotted that there is a need for something new, a new business model for game developers. Esport was just starting to rise, but there was some questions about how exactly will that work. And then brands on the other side were looking at new ways to engage with audiences. Because a lot of the eyeballs from audiences moved to platforms like Netflix where there's no advertising model. And people started to watch less than less TV.

So that was really like how we took our previous experience. and really connected it with this opportunity in the market and basically founded Anzo. Love it. So let's talk about exactly what Anzu is and what you're both already accomplished and where you're kind of headed with the platform. It's all about, I guess there's multiple layers, but at its core, it's going to be like a programmatic type ad solution within, the gaming environment of different games.

So you work with both the developers and then the marketers that want to run ads. Am I summarizing correctly or fill in the blanks a little? I mean, this is perfect if you want to join us to pitch to clients who would be honored. So I mean, the way we look at Andrew is that for game developers, this is a new business model. So bringing authentic native.

advertising. The way we see it is that advertising should not be a trade-off with bad user experience. People don't hate ads. People hate bad ads. And if you can bring in like an ad experience that respects the gamer, respects the gameplay, basically

exactly how we consume content in real world. So for example, think about a billboard inside the game, a logo on a T-shirt, a poster on a wall. The outcome of it will be number one. The community will accept it and will prefer it. Number two, bigger games that didn't monetize and put ads until now for the first time we'll be happy to do

that. And number three were the first company in the world to bring those monetization and programmatic capabilities also for the console games and not only for mobile games. So that's like from a game developer how we look at this. And you know, like we saw cases of games that put it fake ads to make the game more realistic and tell them, hey, earn money from it. Or like if there's a billboard with a side hilton left, sorry, like hotel left, put Hilton there, right? And from a marketer perspective, it's a new advertising category.

So it's a way to reach, hard to reach audiences in scale. Because when we look to the gaming landscape, which is a really good environment for brands, the scale of how many people play games, of course, the e-sport rise, how brand safe and authentic in the environments look like. but it was about how do we make it easy for brands to work with us? And that's where programmatic helps. And second, how do we help brands to get confidence around the media value in the effectiveness of that? Yeah, that's great.

So does it start with, it seems like then it starts with the games. I'm curious about the mechanics, you know, owning a digital agency and doing a lot of programmatic, you know, on the internet and things like that. trying to wrap my head, and I'm sure our listeners would love to understand without getting into any proprietary nature of anything. But the mechanics of are you working with, I would imagine, the consoles, and I'm going to focus just on console gaming right now.

The console versus the game developer, because I imagine it's got to be, there's got to be two parts there. Because you probably, if you're serving programmatic, you've got the internet feeding the game, but the game has to be developed in a way to accept that, right? Yes. So, I mean, there's three layers of how we look on that.

First, there is the layer of the platform, Xbox, PlayStation, PC, mobile, VR, cloud gaming, and we support all the platforms. Then there is the layer of the engine. So, like, the game engine of the platform, if it's Unreal or Unity or companies, there is their own game engine. And then third, there is the actual,

content owner, the game developer, the publisher, depends on the structure. And basically, so we partner with the game developers, but we have business deals and we support all the layers of the engines in the platforms. Got it. Is there are there only certain games right now that are able to display this type of advertising like in-game on the console level? Is it a certain game? Yeah.

So, I mean, there's two things, two ways to look at this. Number one, from a platform perspective. So, for example, Nintendo don't allow advertising on the platform. Like in terms of their terms and condition. But it's funny because they allow porn content on their platform, right? But I guess that will change over time as more and more games move to free-to-play and are looking for new business models. So there is some blockers from the platforms.

That's number one. number two there are some games like maybe very fantasy games that ad experiences are not very blended authentic so there's no really a lot of good ways of how to put the ads to make sense from a game or from a community perspective so that's number two and number three there is very violent games that maybe the brands will be if it's concerned about advertising that those games but removing those three and limitations and there's a quite big business here we predict the addressable market for all platforms like console mobile and esports combined

25 billion a year so a lot of opportunities yeah so is for instance my i've kept four boys under the age of 11 and so they all play fortnight and amongst other things um now is that kind of a walled garden as big as the franchise as fortnight is like is it are you or should we expect to see programmatic ads within Fortnite. So, I mean, you know, every second marketer I meet tells me, hey, this is really cool. Can I put, can I start with Fortnite? And of course, with Fortnite it will take time. I mean, it's a big company and that's maybe not the first company to adapt new technologies.

Yeah. But the way we see is that before our solution, the only way to advocate, size and console games with what we call hard-coded deals. So, for example, if you play the FIFA game, you see some brands in the environment. But the thing is that first it's very expensive to do these campaigns. Very few games and very few brands can do these deals. Once you launch the version of the game, the content cannot change. So there's no programmatic, no analytics, no personalization.

And, you know, the joke about those deals is that the only data the brand gets for the game is the invoice. And what we are here to do is to make it very affordable, to make it very accessible. So with small campaign spend and with a connection to Google and to all the media bank platform, so no integration needed, no special creation of creatives, we can start campaigns and get really good media value. in the sense of what's like exactly the opportunity and should the brand invest more. How can the brand compare advertising in our environment versus other environments? That's basically what we're bringing here from a market to perspective.

I'm curious with the growth of the company, are there any partnerships that like you're particularly proud of that you're able to like talk about on the podcast with us? Of course. So we recently launched with Ubisoft. truckmania, a big partnership. And, you know, Turkmania is a very known franchise

in like a very, you know, like a high end game, a AAA game, which has a lot of, you know, really good placement for brands to advertise. So from a game developer perspective, that's a deal we're very happy about.

And there's tremendous excitement for marketers. Oh, absolutely. In general, I mean, in general, we signed 14 exclusive deals with console game developers. developers for like two, three years to basically be able to sell their media. So like, again, developers like a Lion Castle, an ABP reloaded, and Toplitz and Vivid and Ubisoft,

Turkmania. So this makes like this, you know, the volume and the inventory ready for marketers. And then from a brand perspective, we announced big deals with Lodafone, with Epsico, with American Eagle, with Samsung. So big brands and big games are already part of the platform. Oh, yeah. What would be like the most popular U.S. played game that your platform is doing program at in-game ads on? It would be a game like that, you know, our audience is probably getting worldwide now, but it's probably 90% of the U.S. What would be a game title that maybe we could see that it's played here that the platform's hitting on? So from the games I'm allowed to say, you know, there's a big companies and like I signed like, you know, dozens of NDAs with each company.

And you'll be soft, truckmania will be the most. Truckmania. That's truck mania. Yeah. Yeah. That's awesome. Cool. Is our brands coming to, you mentioned this.

And so I guess are you guys developing kind of a platform that might be self-serve for agencies or. Or is it always going to be brand direct? You know, are you kind of opening, you know, what's the kind of avenues there for where you see it going for marketers kind of coming to you guys? Sure. So, I mean, you know, brands love innovation and hate to change the way they work, right? Yeah, yes.

Well said. Hey, hey, you, you've been around the agency world. This is what I love. Bring us big ideas. And we don't, but don't want to do. Let's go back to the. that one. So I mean, we try to make it as, as, you know, as easy as possible for them to choose how they want to work with us. Some brands wants us to run the campaign from our own DSP and our

own platform, of course, with full transparency. And some brands want to run the campaign from like the mid-the-bank platform they're already using, if it's, say, Google or TradeSk or all the, you know, like the popular DSPs. So, um, um, Yeah, so basically we made sure to support all the media buying platforms, all the ad units, all the creatives, all the, you know, like basically everything that we know from a technical perspective, from a buying mechanism, can work different between the buyers and to support all of those options. So like we support 45 different creative formats because we know that a brand can be really excited

to work with us, but if it's that if he has two creative, formats and we don't support them unfortunately it will take two years to make a campaign happen yeah is um where is uh you know e sports in the growth of it you know is just so enormous and you know we've been talking a lot about just general in game but on the esports side the competitive side within the leagues and all of that does the mechanism for marketing within your platform work the same or is that a different kind of more like event one-off structure? Yeah. So, I mean, there's two ways of how we have basically touch points with Eastport. I mean, first, let's differentiate esport tournaments and game streaming content,

right? But it starts from the fact that when we integrate into a game like Trekmania, Turkmania has Eastport tournaments and Turkmania has people who broadcast themselves like the game on Twitch on YouTube. on the streaming platforms. And because what we do, we change the texture of the game object with the brand and content, now making the brand and content part of the game.

So if we do a campaign with American Eagle, American Eagle is part of the content of the game. So everywhere the game is, the branded content is going to be. So this opens for us opportunities to offer brands to sponsor e-sport tournaments in a very authentic way, instead of putting the logo of the brand in the stadium

to putting it inside the game while the game is played in the tournament. And that's not only the people who see the game in the physical tournament. It's also will be broadcasted on TV channels and streaming platforms. It will increase the media rights value. So that's one touch point.

And so now we can offer esport leagues and esport teams to sell to their own sponsorships, ads inside the game while they're playing it. So that's one dimension. And the second one is the streaming platform. So we can work with a specific streamer to personalize the content only on his device, only for when he broadcasts, to personalize the brand and content to his viewers, to his audience.

Wow. So this is basically how we can extend. you know, like the brand and content to new environments and to partner with the leagues, the teams, the streamers, and all the ecosystem. Have you gone to a tournament? I'm curious. Have you been able to go to ESSwords tournament? What was it like if you've gone to one? Yeah. I mean, first, I mean, maybe I'll admit I wasn't a gamer before we started Anzu. I come from an advertising background for me. It was just exciting to work with those big brands.

but my two co-founders, our chief product and CTO, are both gamers. So for them, it was, like, you know, exciting to partner with games that they are playing themselves. And, like, I mean, there's two different layers of excitement, in my opinion, around these sports tournaments. Number one, the first time you go to a tournament, this is, like, something that you never experience, you know, like the audience and excitement and how much they're into it. And it's like, it's a phenomenon, right? And the second thing is when you go to games that are maybe harder to understand, so there is games, I mean, there's games like Rocket League that even if you didn't play the game a lot, you'll pretty quickly understand, like, what the game is about.

Oh, I know. I'll kick your ass in some Rocket League. Don't mess with the, that's the only game that I can actually play. Worth anything on the platform. But you know, but there are games, you know, CSGO that are really hard to understand how to play. And for someone coming to an sport tournament and seeing one of these games, if you doesn't really know exactly what's about, it will just feel like a random connection between what's happening in the game and the audience getting excited.

Yeah, yeah. So I think it really depends on the genre of the game. Yeah. We hear so much about the tournaments. It makes me like really want to go to one. They just seem like so. When we were able to actually. Well, yeah, before.

Right. Right. Before we had to stay six feet apart. Yeah. It's, uh, we try not to go down that path too much on the podcast, but it has COVID impacted you guys' business? I mean, it seems to be blowing up e-sports more than, obviously it's removed. the in-person tournaments, which I'm sure is a drag on a lot of the sponsorships and things like

that. But at the same time, the growth of playing and the exposure of it in general, I think, is just growing. But how have you guys been impacted if you have? So, yeah, so three impacts, two positive and one negative. So let's start with the negative, right? So we can finish positive. I like it. Yeah. I like you already. And a lot of the game, developers postponed their releases of the game because of COVID. So, for example, we finished integration with really be games, and I would be very much excited to give you those names, but because of COVID they postponed when they will launch the games.

We need to wait for half a year, for one year to actually be able to make that happen. And that's a pity because there is like brands waiting online for those games, and we just need to wait until we can make it happen. You can announce them right here on the radcast and we won't tell anyone. We promise. We'll keep it a secret. So I have a deal to offer you. When we'll be able to announce it?

Let's regroup and tell your audience. Okay. So now let's speak about the positives. So number one, people are more at home. People are playing more game. So they're just more advertising eyeballs on the platform. So we had a huge growth in our platform just because of the usage really growing up. That's number one.

But I think more important to the ecosystem is what happened on the marketer side. And there's two layers with that. One on a practical layer. So sports events are getting canceled. so on the one side and second out-of-home interaction are you know less happening these days so brands are looking for new ways to engage with audiences in digital and virtual environments are maybe a good way to do that so gaming took like a main like a main seat around that because what people do they or play games or watch that right? That's basically sums it up. So that's one thing.

So we saw in the last two months or the first two months of COVID like a gross that we didn't see in 10 years in the space. So brands spoke for five years about gaming or about even digital and now for the first time to actually

do something. So that's one there. But I think a bigger important point is the perception points. Three years ago, almost every brand or agency I would pitch will tell me, listen, this is really cool. But no, gaming is like

geeks locked in their basement. It's not really our audience. Yeah. Versus now like gaming is pop culture. It's pop phenomena. It's a social network, the metaverse world. And everyone gets excited.

So I think there is a huge change in perception. I mean, maybe it's a good time to mention WPP, the biggest advertising group in the world, is one of our investors. And I got a lot of rejections from them in the early days because I, like, I know them for many years. And eventually even they, you know, saw that this is coming and coming mainstream. And this will become a big advertising category. So this perception is really positive for us. That's great.

Interesting about WPP. I mean, are they, are they integrate? Is there any kind of integration? you know, obviously they own a lot of ad agencies. Is, are they integrating with, like, their media tools? Like, is Anzu, like, is that any integration there? Are they kind of like letting you guys do your thing? Yeah.

I mean, you know, first, I mean, you know, it took me some time to understand their complicated structure. Yeah. And that's number one. And number two, like, I mean, of course it was not like a plug in play. So we signed an investment in the day after. So they managed $50 billion in media. year, the day after budgets are being thrown at us. I remember some of our other investors who

know, so like Bidcraft, the biggest, you know, ESP fund, maybe you heard about them. It's the guy who found ESL. So he's our other investors. So he doesn't come from matter to something. He just told me, listen, we signed that there was WPP. Let's just allocate one or two percent from their 50 billion. And I think it's good. So it doesn't work like that, right? And but we integrate it into their platforms, into Zaxis, their media bank platform, into their discovery product. And I think now we're in a really strong place, knowing their teams and having the structure to really now growing within the business. Of course, with now all the exclusive inventory coming on boards.

But I think it's also important to mention that the way we structure the deal, we have no limitations. We work with the other holding groups. There is no like board seat, no better rights. So it can really help us to and be very unbiased and agnostic here. Hey, they want you to sell more ads. They don't care if they see you sell them to. Yeah, that would be bad for business.

Hey, they want to recoup their investment and make more on top. We've got to sell to everybody. I mean, I promised them X20 on the investment. So let's see. There we go. But where's us all going, man? What's the future looking like for e-sports and advertising and marketing? What's your crystal ball or in your kind of, I don't know, magic plan?

Yeah. Yeah. You know, I mean, for 5, 10, 15 years, we saw a lot of movies of people spending time in virtual world, right? So there was a movie like a few years ago, Ready Player 1 and there were other movies. and for some reason in real life that didn't happen. People didn't spend half of their day in a virtual environment. But I think e-sport can be a trigger for that to change. And we see that with, you know, with Fortnite and Roblox and the Metaverse concept

and people are starting to consume content inside games. And the game platform is becoming like a social network to chat with the friends, to consume content. So I think the world is going into that direction. And when, you know, the younger audiences who were born into the Fortnite world, when they'll become parents, you know, the industry,

they would look on it very different. So I think it's going to be a very digital, virtual world. Maybe it's, it's, it's, it's, of course it has a lot of problems, but I think that's where it's heading in. For marketers, there's really good opportunities of how to engage in that world. Because for me, part of the power of a brand like McDonald's is that in every place in the world in Zimbabwe, you'll see their sign, right? Now there are younger audiences who don't spend time watching TV, who don't go a lot, you know, traveling the world and they will be less familiar with those big brands.

So brands will need to adopt and find a way of reaching them in an effective way because those audiences would use ad lockers if they don't like the user experience. So I think there is some challenges and opportunities for brands here. So we have a wide range of listeners as far as the size of their companies. And this strikes me as going down the path. might actually make it attainable for more medium-sized businesses. You know, you mentioned McDonald's and others and obviously Pepsi and, you know, these huge brands with millions of dollars in budget, you know, before to, you know,

to, you know, like the Verizon deal of phase clan. I mean, like, these are millions of dollar agreements. But this strikes me with your platform is potentially an entry point for more medium-sized brands to get in the game, literally. and figure. I mean, it's exactly about that because a small brand, most chances is buying platform,

is buying media from Google. So take the same platform of where you buy media. Take the same creatives you have. Take a small budget and start to advertising games and can be localized to what he is looking for. So I think that's the beauty of how we make these environments accessible and affordable for SMBs. What's the scale of this right now?

So, like, you know, we work with some bigger southeastern companies in the U.S. You know, is the scale there in the U.S. you know, on these platforms to make a legitimate programmatic buy that has the scale and reach that you need for like a U.S.-based company, besides the McDonald's or Pepsi. Yeah. So, I mean, yes. And there is, you know, the ecosystem in our platform.

From an ecosystem play, 2.7 billion people play at least one game a month. That's 86% of the people connected to the Internet. So I would say every brand in the world has an overlap with the gaming audience. And the question is what type of games, sport games versus shooter games, and what type of platforms, Xbox versus and, mobile are the right games for that brand.

So that's number one. And number two, on our platform, today we serve ads to 150 million people every month. We serve billions of impressions. US is, of course, our biggest market. So there's already enough volumes and skinning the game to be attractive for, on the one side, the big brands want, you know, bigger campaigns.

and the other side for smaller brands who want a very niche audiences but still to have enough of traction coming from it. Is there anything else that you think would be of interest with where e-sports is going, where you guys are going? I mean, anything else? So we kind of close out here? Yeah, I mean, first, you know, I mean,

I can speak a lot about this topic. So of course, we can, you know, if there's anyone interested to continue this conversation, of course we can speak about that. I mean, like I think and because of all the changes we see in the advertising landscape so the cookies are dropping

and IDFA's and mobile are getting out and people that are using more ad blockers and what's happening with Facebook and like the concern around brand safety and we saw that the same with YouTube I think there is a need for rethinking of like what's the best way to use each platform and how to play the mix. I would argue that same that's that, you know, there is a strategy around audio and out of home and social and search and TV. Gaming should be part of the mix from an ad category from a perspective.

And it's just about doing it right because gaming is a very, you know, a fragmented topic from working with teams to working with leagues to working with Switch to working with us. There are just a lot of different ways. And there's not a lot of best practices and experts who really navigate that. So I think that's what we're going to see in the next year. But there are still opportunities for brands to be, you know, early adopters and to be innovators in the space. and it's not too late for that. And yeah, this is basically what we do for living. I love it.

Last question, because he kind of made me go there. Do the Twitch, the streaming companies like Twitch and others come with their hands out to you guys eventually? Because, okay, I'm playing TruckMania and that Pepsi billboard runs. it's suddenly on Twitch and another 200,000 people see it that wouldn't have you know, is that factored in? Yeah, I mean

the short answer is it's complicated because you know like I think what's important to understand here is the perspective of how each player is coming from. I mean, for me, my partner is the game

developer. Yeah. for for for for for which his partner is the streamer yeah now if you'll ask so like twitch and in the streamer are basically building a business on top of what the game is built in many cases the game is not really getting money from it but what twitch will claim listen you you should thank us we are bringing a lot of organic yeah we're promoting you and then if you'd ask the game they'll say hey fine we should get a slice from the revenues as well so it's it's a complex complicated a topic. And of course, even between Twitch, YouTube, Facebook,

until recently, Mixer, there were very different opinions of how each one of these companies see it. And of course, as the game developers are bigger, then they have more control over those relationships versus the smaller ones. And the same was the big streamers and the small streamers. And it's adds to make it even more complicated, the companies who are providing extensive,

for the streamers out of what the platforms like Twitter are doing. Yeah. So I think it's complicated. It's a good way to answer it. I bet. Well, Idemar, it's been a pleasure. I know the listeners will appreciate kind of more of the M-depth marketing side. Anzu sounds like it's got all the potential in the world.

And if you're a brand out there thinking about your marketing mix, I think you need to be thinking about gaming. And tomorrow, we're going to be holding you to that deal, too. Yeah, we're going to get the full scoop. Exactly right. The official scoop. Do noted. You'll get an email for me.

We'll get the official breaking news of any of those partnerships. So we'll do it again here as we follow up. And thank you so much for your time. Thank you for having me here. Hey, guys, this Ryan Alford and Riley Clark. We'll see you next time on the Radcast. follow along at the radcast.com or at radde. The dot rad.

dot cast on Instagram. See you then. To listen to full episodes or to contact us, visit us on the web at the radcast.com. Or follow our host at Ryan Alford on Instagram. Thanks for tuning in.