Jones, CEO of Brandtech Group, talks about building for the “post-advertising” world

The news that You & Mr Jones is now The Brandtech Group will come as no surprise to anyone who has followed the holding group since its launch in 2015. For starters, founder David Jones has always described his company this way, going so far as to trademark the term brandtech. A name change was always on the cards. It’s the timing that’s interesting. Not only has the holding group passed the peak of the hype cycle that such companies usually encounter, but it has jumped the trough of the disillusionment that tends to follow and is directly in growth mode.

Last year, for example, it pocketed $500 million in revenue and could earn even more in 2022 if the start of the year is strong. Organic revenue growth for the first three quarters of 2021 was 50% higher than the prior year. And the company seems well placed to continue its momentum. Along with the media division it launched last year — with a $300 million war chest for investments — it also recruited Will Luttrell, the founder of Integral Ad Science and Amino as a chief technology officer.

The growth combined with subsequent investments has left the holding group carefully positioned at a time of immense change for the industry. Whether it’s Web3 or CTV, hosting or e-commerce, the group’s advances are all in service of a larger model – one diametrically opposed to the legacy holding groups of which Jones was once a part. Naturally, Jones wants to double that advantage. One way to achieve this would be for The Brandtech Group to become a publicly traded company, as Sky reported last summer. Jones, however, is keeping all his options open.

“To be honest, we have a lot of options, that’s one of the great things about how the business is doing,” he told Digiday. “We could stay private, we could make a major game-changing acquisition, we could do another round and increase our Series C or we could go public. All of these things are potential options for us moving forward.

Digiday caught up with Jones to find out what all of this means for The Brandtech Group in 2022, how it’s impacted by current advertiser concerns, why the name swap is happening now, and more.

This interview has been lightly edited and condensed for clarity.

Why change the name now?

We are now a large, significant company that is the largest global partner to many of the largest companies in the world. We have over 5,000′; people around the world, there are 18 core partners and over half a billion in revenue. The business is now at a level of scale which has made the time opportune for a name change. More importantly, it’s a decision that recognizes the magnitude of the disruption that has occurred over the past couple of years, but also looks to the future as this post-advertising world we’re moving into . We’ve already changed four or five group company names to reflect the brandtech focus, whether it’s Brandtech Media or Brandtech Commerce, so it’s not hard to imagine that the other companies we own will go through the same thing. later. He places a marker.

What does brandtech even mean?

When I was developing the initial business plan for the company, I didn’t know what to call what we would offer customers. I went with this idea of ​​brandtech, since technology gives brands so many different ways to connect with people far beyond advertising. This has not changed since our launch. Most people didn’t think it would mean much when we were preparing to launch the company. Fast forward to today and our thesis has been proven. Before covid, more than $30 billion was taken from the market capitalization of the big five holding companies. We tried to disrupt that pattern and do things differently for those companies; we do not buy media or advertising agencies, for example. We acquire businesses in high-growth disruptive spaces like insourcing with Oliver.

Looking at previous acquisitions, what kind of areas will you be focusing your future investments on, especially given the current scale of mergers and acquisitions?

Agree that mergers and acquisitions will speed up, not slow down. Gravity Road is our metaverse agency and one of the world’s leading companies in this field. Now we are increasing these investments in the metaverse and are currently reviewing one company per day. There are obviously great opportunities in influencer marketing and people-driven marketing. Beyond the metaverse, our primary areas of focus are e-commerce, digital media, and expanding our capabilities globally. The recent acquisition of [data company] DP6, Google’s number one partner in Brazil, is a key example.

Traditional agency holding groups don’t tend to do these kinds of deals as much as you do. Who do you consider as a competitor?

The big story is the huge shift from traditional holding companies to new model companies like ours. Today, brands usually have a choice: to work with a global holding company, which is everywhere and can deliver globally, but on the whole is not very good at cutting-edge technologies and marketing based on technology, or go around the world choosing the best partners in their category. for every discipline in every market where they are good at cutting-edge technology and technology-based marketing. But then the client has a nightmarish job trying to pull it all together, coordinate it, and make them work together. We provide cutting-edge technology and technology-based marketing globally and that’s usually where and why we win our business – around 60% of that comes from brands and customers clustered in hundreds of digital agencies around the world. Last year, our second largest client bundled another 600 digital agencies into us and one of our largest clients started doing the same with 3000 digital agencies. We also regularly come up against the Accentures of the world as well as some of the newer brandtech companies like S4 and Jellyfish. Not to mention the holding companies that we will often replace when they have tried in vain to deliver state-of-the-art digital marketing solutions. These companies are still very good at creating television commercials and doing traditional media, but it’s no longer a growing business.

But these companies have shown signs of improvement lately.

Yes, they are progressing this year with good growth, but it is the same growth that they declined last year. Trying to move these services digitally undermines the core business of these groups. For example, they prefer to sell expensive creative teams rather than working with influencer models or open influencers. Moreover, these companies do not have technological platforms or proprietary technologies. And they trade at 1 or 1.5 times their earnings, so they can’t afford to buy the new model companies because they are immediately value-destroying and not accretive. In addition, the vast majority of the approximately one hundred thousand people employed in large groups are not digital natives. None of the top talent wants to join them anymore. They either want to go to tech platforms or influential companies or companies like ours or create their own. It’s the same for businesses. None of the smartest and best new model companies want to sell to them because they realize the above. We have never failed to acquire a company rather than a holding company, for example. The management of these companies do not understand digital and they were born and created not only before the mobile world, but before the Internet.

You mentioned earlier that Gravity Road is the band’s metaverse agency. How are marketers reacting to this prospect?

I think we see a few things happening: one, people literally jump in without thinking and turn their product into NFTs and put it out to sea. That’s not a good idea. A bad idea does not become a good idea because it uses the latest technologies. It’s still a bad idea. Most brands that have done this haven’t been able to answer the question “why are you doing this?” : second: there are brands that do smart and interesting things like Stella Artois and [the digital horse racing platform] Zed Run: finally, some brands use NFTs such as l’oréal or barbie and [French fashion luxury label] Balmain.

Overall, I’m seeing less cynicism from brands and more experimentation with how they respond to the metaverse and web3 more broadly. No one can say for sure how this transition to one or the other will play out. But what we’re doing, with the investments we’ve made, is having a front-row seat to see how this all plays out. [Pokemon Go developer] Niantec is one of the world’s leading disaster companies and we’ve been an investor since day one, for example.

About Cedric Lloyd

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