eSports Series ft. Itamar Benedy

 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.
 Here on today's episode of the Radcast,
 we're continuing a multi-part series on eSports.
 All things eSports gaming and really excited to have it.
 I'm excited to have it.
 Itamar Benady, 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, Itamar.
 It's nice to have something a little maybe mainstreamed down the line
 on the marketing and advertising side for eSports 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
 than we've been from a, we've been talking a real broad eSports
 and the opportunity and really the growth of eSports,
 but excited to kind of get into it and hear what all you've been up to.
 Yeah.
 And you know, I mean, eSports is getting tremendous, you know,
 attraction in the last year is from brands and even,
 and even brands investing in eSports teams and investing in leagues.
 But someone needs to do it with the business model, right?
 That's right.
 So, well, let's start there.
 Itamar, let's start, you know, maybe give us a little bit
 about your career journey, you know, your experience in eSports
 and then maybe that'll build us up to kind of where you're at today.
 Sure.
 Sounds good.
 So, hi, everyone.
 I'm Amita Marta, founder and industry of ANZU
 and 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, that the rules from web and,
 and from cookies could not really apply.
 So, took advantage of that very fast and 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.
 ESports 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.
 And because a lot of the eyeballs from audiences move to platforms like Netflix
 where there's no advertising model.
 And people started to watch less than less TV.
 So, that was like really like how it took our previous experience and really connected
 it was this opportunity in the market and basically founded ANZU.
 Love it.
 So, let's talk about exactly what ANZU is and what you're both 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 filling 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 ANZU is that for game developers,
 this is a new business model.
 So, bringing authentic native advertising.
 And the way we see this 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 the billboards 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 will be happy to do that.
 And number three, we're 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, we saw cases of games that put its fake ads to make the game more realistic
 without them, hey, earn money from it.
 There's a billboard with a signed hilltown left.
 Sorry, like a hotel left, put hilltown there, right?
 And from a marketer perspective, it's a new advertisement category.
 So, it's a way to reach hard to reach audiences in scale.
 Because when we looked at the gaming landscape,
 it was all really good environment for brands.
 The scale of how many people play games.
 Of course, the esports rise, how brands safe and in an authentic
 and the environment 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 and 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, 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 imagine, the consoles?
 And I'm going to focus just on console gaming right now.
 The console versus the game developer.
 Because 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?
 Yeah, so I mean, there's three layers of how we look at that.
 You know, first, there is the layer of the platform,
 Xbox, PlayStation, PC, mobile, VR, cloud gaming,
 and we support all the platforms.
 And then there is the layer of the engine.
 So like the game engine of the platform,
 if it's Unreal or Unity or Compender is their own game engine.
 And then third, there is the actual content owner,
 the game developer or 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 what game, 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.
 Yeah.
 So I mean, there's 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 conditions.
 But it's funny because they allow porn contents on their platform, right?
 But I guess that will change over time as more and more games
 and 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 that can maybe be very fantasy games
 that ad experiences are not very blended authentic.
 So there's not 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 the number two.
 And number three, there is very viled and game that maybe the brands will be able
 to kind of turn about advertising those games.
 We're moving those three 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 key, I have four boys under the age of 11.
 And so they all play Fortnite amongst other things.
 Now is that kind of a wall garden as big as a franchise as Fortnite is?
 Like is it or should we expect to see programmatic ads within Fortnite?
 Yeah.
 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 it is that before our solution,
 the only way to advertise in console game will be called hard code deals.
 So for example, if you play the FIFA game, you see some brands in the environment.
 But the thing is, at first, it's very expensive to release campaigns.
 And 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, no personalization.
 And you know, the joke about those deals is that the only data the brands get 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 campaigns spend and with a connection to Google and to all the media platforms.
 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 exactly the opportunity and should the brands invest more.
 How can the brands compare advertising in our environment versus other environments?
 That's basically what we're bringing here from our market perspective.
 I'm curious with the growth of the company.
 Are there any partnerships that you're particularly proud of that you're able to talk about on the podcast with us?
 Of course.
 So we recently launched with Ubisoft, Trackmania, a big partnership.
 And Trackmania is a very known franchise in a very high-end game, a AAA game,
 which has a lot of really good placement for brands to advertise.
 So from a game developer perspective, that's what we're very happy about.
 There's tremendous excitement for marketers.
 In general, we signed 14 exclusive deals with console game developers for like two or three years to basically be able to sell their media.
 Again, developers like Lion Castle, maybe if you reload it, then Toplits and Vivit and Ubisoft, Trackmania.
 So this makes this volume and then inventory ready for marketers.
 And then from a brand perspective, we announced big deals with a lot of phone, with PepsiCo, with American Eagle, with Samsung.
 So bigger brands and big games are already part of the platform.
 What would be like the most popular US played game that your platform is doing programat in-game ads on?
 It would be a game like that our audience is probably getting worldwide now, but it's probably 90% of the US.
 It would be a game title that maybe we could see that'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 Ubisoft, Trackmania, it would be the most trucker game.
 That's Trackmania.
 Yeah.
 That's awesome.
 Cool.
 Are brands coming, you mentioned this and so I guess are you guys developing kind of a platform that might be self-serve for agencies 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.
 Yeah.
 Hey, hey, you've been around the AC 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 that one.
 So I mean, we try to make it as you know, as 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 in our own platform.
 Of course, with full transparency.
 And some brands want to run the campaign from like the media bank platform they're already using.
 If it's a Google or trade-ask or all the, you know, like like the popular DSPs.
 So yeah, so so basically we made sure to support all the media bank 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.
 We support 45 different creative and formats.
 Because we know that a brand can be really excited to work with us.
 But 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.
 You know, is where is, you know, eSports and the growth of it, it was 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?
 So I mean, there is two ways of how we have basically touch points with eSports.
 I mean, first, let's differentiate eSports tournaments and game streaming content, right?
 But it starts from the fact that when we integrate into a game of Turkmenia, Turkmenia has eSports tournaments and Turkmenia has people who broadcast themselves like the game on Twitch on YouTube on the streaming platforms.
 So, 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 eSports 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 tournaments, 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 eSports leagues and eSports teams to sell to their own sponsorships, adds inside the game while they're playing it.
 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.
 So this is basically how we can extend the brand and content to new environments and to partner with the leagues, the teams, the streamers and all that ecosystem.
 Have you gone to a tournament? I'm curious. Have you been able to go to eSports tournament? What was it like if you gone to one?
 Yeah, I mean, so like, I mean, first, I mean, maybe I'll admit, I wasn't the gamer before we started hands. I come from an advertising background for me.
 It was just exciting to work with those big, big brands, but my two co founders or 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.
 I mean, there's two different layers of excitement in my opinion around these tournaments.
 Number one, the first time you go to a tournament, this is like something that you never experienced, you know, like the audience and excitement and how much they're into it.
 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 like Rocket League that even if you didn't play the game a lot, you will pretty quickly understand what the game is about.
 I'll kick your ass in some Rocket League games.
 I don't necessarily, 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 esport tournament and seeing one of these games, if you guys 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.
 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 them.
 Oh, yeah, before we had to stay six feet apart.
 We try not to go down that path too much on the podcast, but it has COVID impacted you guys's business.
 I mean, it seems to be blowing up esports more than obviously to remove the in person tournaments, which I'm sure is a drag on a lot of sponsorships and things like that.
 But at the same time, the growth of playing in the exposure of it in general, I think, 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.
 A lot of the game developers postponed their releases of the game because of COVID.
 So for example, we finished integration with really big 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.
 That's some right here on the radcast and we won't tell anyone.
 We promise we'll keep it a secret.
 So I have like 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 think about the.
 So number one, people are more at home.
 People are playing more games.
 So they're just more advertising eyeballs on the platform.
 So like 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 less happening these days.
 So brands are looking for new ways to engage with audiences and digital and virtual environments.
 So I think 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 fix, right?
 That's basically.
 Yeah.
 So that's one thing.
 So like we saw like in the last two months or the first two months of COVID.
 It grows that we didn't see in 10 years in the space.
 So brands spoke for five years about gaming or about even digital.
 And of 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 coach with them.
 Listen, this is really cool.
 But no gaming is like geeks locked in their basement.
 And 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.
 It's one of our investors.
 And I got a lot of rejections from them in the early days.
 Because I know for many years.
 And eventually even they 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 integrated?
 Is there any kind of integration, you know, obviously own a lot of ad agencies?
 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 sound investment in the day after.
 So they manage 50 billion dollars of media a year.
 So the day after, budgets are being thrown at us.
 I remember some of our other investors who know.
 So like Beatcraft, the biggest, you know, eSports and fun.
 Maybe you heard about them.
 It's the guy who found ESL.
 So he's our other investors.
 He doesn't come from advertising.
 He was told me this and we signed that there was WPP.
 Let's just allocate one or two percent from their 50 billion.
 And I think it's it's good.
 Right.
 So it doesn't work like that, right?
 But we integrate it into their platforms, into zaxis, their media bank platform, into their like a discovery product.
 And I think now we're in a really strong place knowing their teams.
 And then having the structure to really now growing within the business, of course, with now all the exclusive inventory coming on boards.
 I think it's also important to mention that the way we structure the deal that we have no limitations.
 We work with the other holding groups.
 There is no like boards, boards, see no better rights.
 So it can really help us to and be very unbiased and in an agnostic here.
 Hey, they want you to do so more ads.
 They don't care if they see something.
 Yeah, that would be bad for business.
 Hey, they want to recoup their investment and make more on top.
 We got to sell to everybody.
 I mean, I promise them X20 and the investment.
 Let's see.
 There we go.
 Where's the soul going, man?
 Where's what's the future looking like for esports and advertising and marketing?
 What's your in your crystal ball or in your kind of, I don't know, magic plan.
 Yeah.
 You know, I mean, for five, 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 one and there were other movies.
 And for some reason in real life that didn't happen, people didn't spend, you know, half of their day in a virtual environment.
 But I think esports 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,
 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 at it very different.
 So I think it's going to be a very digital virtual world.
 Maybe it's, it's, it's, of course, it has a lot of, you know, like, problems.
 But I think that's where it's heading in for, for marketers, there's really good opportunities of how to engage in that world.
 Because, you know, for me, part of the power of a brand like McDonald's is that in every place in the world and, you know, in the same bad way, 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.
 Brands will need to adopt and find a way of reaching them in an effective way, because those audiences will use ad lockers if they don't like these or 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 that 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 with 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, I mean, 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 advertise in 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 US.
 You know, is the scale there in the US, you know, on these platforms to make a legitimate programmatic buy that has the scale and reach that you need for like a US based company besides the McDonald's or Pepsi.
 Yeah, so I mean, yes, and then there is, you know, the ecosystem and our platform from an ecosystem play 2.7 billion people play at least one game of minds.
 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 and sport games versus shooter games and what type of platforms Xbox versus mobile are the right games for that brand.
 So that's that's number one. And number two on our platform today, we serve ads to 150 million people every month, we serve, you know, billions of impressions.
 The US is, of course, our biggest market. So there's already enough, you know, volumes and skin in 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 want a very niche audiences, but still to have enough of the, you know, of traction coming from.
 Is there anything else that you think would be, you know, of interest with, you know, where he sports is going, where you guys are going, I mean, anything else, we kind of close out here.
 Yeah, I mean, first, you know, I mean, I can speak a lot about the topics of course we can, you know, if there's anyone interested to continue these conversations, of course, we can speak about that.
 But I mean, like I think, and because of all the changes, we see in the advertising landscape. So the cookies are dropping and idea phase and mobile are getting out and people are using more ad lockers and what's happening with Facebook.
 Like the concern around brand safety and we saw that the same with YouTube. I think there is a need for for 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, 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 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's just a lot of different ways and there's not a lot of best practices and experts really navigate that. So I think that's what we're going to see in the next year.
 But there's 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.
 Yeah, the twitches to the streaming, you know, companies like twitch and others come with their hands out to you guys eventually because, okay, I'm playing truck mania.
 And that Pepsi billboard runs and 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 because you know, like I think what's important to understand here is is the perspective of how each player is coming from. I mean for me, my partner is the game developer.
 Yeah, for for for Twitch, his partner is the streamer.
 Yeah, now if you would 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 pretty getting money for mix, but what twitch will claim this and you should think us we are bringing a lot of organic.
 Yeah, we're pointing you and then if you ask the game, they'll say, hey, fine, we should get a slice from the revenues as well.
 So it's it's a complicated topic. And of course, you know, even between twitch, YouTube, Facebook and until recently mixer, they were very different opinions of how each one of these companies see it.
 And 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 extensions for the streamers out of what the platforms like twitch are doing.
 Yeah, it's so I think it's complicated the good way to enter it.
 I bet.
 Well, it's been a pleasure.
 I know the listeners will appreciate kind of more of the M death marketing side.
 And so 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.
 We're going to be holding you to that deal too.
 Yeah, for it.
 Yeah, we're going to get the full scoop.
 Exactly.
 Official scoop.
 Do noted.
 Yeah.
 You're going to get the official breaking news of any of those partnerships.
 So we'll 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, it's Brian offered and Riley Clark.
 We'll see you next time on the red cast fall along at the redcast.com or at rad 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 offered on Instagram.
 Thanks for tuning in.
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