The rapid growth of digital media is creating new opportunities to capture consumer attention and expand their areas of expertise, leading media agencies to acquire public relations firms and invest in AI.
For full-service agency CG Life, the driver has been the accelerated pace of social media and consumer communications as the healthcare and life sciences sector has grown in recent years. CG Life CEO David Ormesher said this growth has been driven by the current “renaissance of life sciences innovation,” with consumer-facing healthcare communications and personalization becoming an integral part of healthcare agencies’ digital strategies.
In May, the life sciences-focused agency announced the acquisition of PR agency Berry & Co. Public Relations as part of its ongoing strategic expansion. The New York City-based PR firm also specializes in life sciences and medtech companies, providing a wide range of services from traditional and sponsored media to content development. In March, CG Life acquired digital agency Toolhouse to expand into its technology and omnichannel footprint, doubling the size of its organization to 150 employees. (Financial terms of these acquisitions were not disclosed.)
Personalized Health Content
According to IMARC Group, U.S. healthcare advertising is projected to grow from about $23 billion in 2023 to $29.2 billion by 2028, a growth rate of 4.6%. Much of the online growth is driven by direct-to-consumer advertising and an increasing number of digital platform options. But with so much investment and resources in the space, agencies need to find effective ways to market, tell stories and connect data to “the widest possible audience,” Ormesher explained.
Some of these technologies are now allowing agencies to leverage digital channels and use audience targeting to more effectively reach consumers with personalized content. Ormesher believes the life sciences and biopharmaceutical industry will place more emphasis on PR and marketing to connect people to specialized treatments and clinical and advocacy content.
“We are in what many consider to be a golden age of innovation in healthcare,” added Bill Berry, president and founder of Berry & Co. “We are making historic progress in developing new and better treatments for many diseases.”
Shipyard Digital Strategy
In May, independent agency The Shipyard made a similar move, acquiring PR agency Falgren Morteen as it focuses on building out its brand and content strategy. Last year, the agency developed analytics tools to measure what it calls “brand love,” which includes metrics from awareness to loyalty. As the agency continues to expand, founder and CEO Rick Milenthal said Shipyard is very strong in paid media but is naive in developing owned and earned media.
“That’s what interested me. [Fahlgren Mortine] “They were known as a public relations firm, which sounds pretty traditional, but they were actually at their core a great digital company,” Millenthal told Digiday.
Last August, The Shipyard received a minority investment from Alaris Equity Partners, which also funded the acquisition. The Shipyard will maintain the Falgren Mortin brand and provide the PR firm with access to expanded media buying volume, creative support and data resources. The combined company now has revenue of $350 million and 400 employees across 10 offices in the U.S.
Falgren Morteen, previously owned by communications network Eastport Holdings, already shared a customer base with The Shipyard in B2C and B2B sectors including tourism, financial services and retail.
Milenthal believes this combination of PR disciplines will enable the agency to significantly increase the output of its digital assets and grow its overall digital media business, despite the crowded digital marketplace. Agencies need to find ways to manage the output of numerous clients, and it doesn’t make sense to “have 80 storytellers for different clients,” he added.
“The digital world is still about storytelling,” Milenthal said. “Media agencies that don’t have a focus on digital media and content are not going to be successful.”
Integrating AI into PR
As agencies discover more AI-generated applications, the demand for PR services is also growing. Stagwell Marketing Cloud’s PRophet platform is using AI in influencer discovery efforts, as well as developing campaign management and news monitoring products.
PRophet founder Aaron Kwitken argues that much of the attention in AI has been on generative AI, with many holding companies trying to develop their own systems. But they may be “missing the point,” because predictive AI could have a big impact on communications as agencies and brands grapple with questions like, “What trends should we look at before they become trends? What’s the next threat we should prepare for?” Kwitken explained.
Leveraging AI and data may give agencies better control over the outcome, whereas earned media, for example, has no “guarantees”. This is part of what PRophet can offer: providing data to predict the “media potential” of a pitch, helping users secure media coverage in less time. The platform also helps with pitch creation, using AI to predict which reporters and influencers are likely to be interested in it.
But with the rise of AI, ad agencies are already starting to notice increased use of text, voice and images across platforms, creating waste in ad spend and production. Gabriel de la Rosa, president of PR agency Intelligent Relations, warns that there’s also a lot of spam and waste in the PR content sent to publishers and consumers. Intelligent Relations’ PR platform uses AI to create pitches and content and monitor media platforms.
De la Rosa argues that AI will make content and spam saturation even worse, meaning agencies and brands will have to do more than just use generative AI to create and research content if they want to reach people.
“If we want to reach people in the coming months and years, we’re going to have to get very creative,” De La Rosa said.
Color by numbers
Group M Agency Mind Share interpreted Maslow’s hierarchy of needs through the lens of Gen Z’s relationship with the digital world, coining the term “phygital pyramid.” GroupM media agency partnered with JUV Consulting (now UTA’s Entertainment Marketing NextGen practice) to survey 160,000 Gen Zers around the world, who conducted qualitative research to determine the following:
* Basic Needs = Access and Accuracy: Cohorts need to find community and be able to communicate with one another at all times. Respondents reported spending 4-6 hours a day on screens, with 31% saying 7 hours or more, which is as much or more than the time they spend at school or work.
* Safety needs = comfortable communityGen Z likes to congregate in places where they feel safe online, but there aren’t many. Discord is one place where they feel safe: 84% of respondents use Discord, and almost half (41%) use it multiple times a week. 59% of Gen Zers worldwide feel comfortable talking to others You can talk about your feelings in an online environment instead of face-to-face.
* Love and belonging = formed fandomThis is where creators and influencers come into play: Gen Z is 38 times more likely to buy a product that borrows from outside intellectual property. 80% make purchases through creator-led livestreams;
* Self-Esteem Needs = Phygital Forum: Gen Z is making themselves felt through both their online and offline presence. Brands can meet this need by offering products and experiences that increase consumer trust within specific groups, even if they aren’t specific to each individual consumer.
At the apex of the pyramid, Self-actualization = Hybrid Advocacy: Research suggests that brands should turn their Gen Z fans into brand ambassadors. A good example is the popularity of the Stanley Cup (#StanleyTumbler on TikTok). It grew 275% from 2020 to 2021..
Takeoff and Landing
- Dentsu carat Worked in the media IKEA Replaces Group M furniture in the United States Wave Maker It will be effective from the end of August.
- Personnel News: IPG Axiom Recruited Units Courtney Keating Publicis appoints new CMO zenith UK unit appoints managing director Sanna Rogers and John Stevens The CEO will not be replaced, but will lead the agency jointly Natalie Cumminsand left the agency.
- Have your Cannes plans already booked or are you just curious to know what’s new on the Riviera this year? Digiday Cannes Briefing is back to bring you all the industry buzz surrounding the Cannes Lions International Festival of Creativity. Sign up here to receive the Cannes Briefing, delivered daily throughout the week of the Cannes Lions International Festival of Creativity, starting June 14.
Direct quote
“The big question for all of us looking at acquisitions is how do we price the assets now versus two or three years ago? And are the sellers, the current owners of the business, willing to transact at a different price than what they estimated the business was worth two or three years ago? I’m not sure that concern has been fully addressed.”
— John Castleman, CEO of digital and IT consulting firm BridgeNext, says the mergers and acquisitions market could become active again.
Speed Reading
- We wrote about how FullThrottle.Ai is using a generative AI assistant to develop audience targeting tools for media agencies.
- Seb Joseph explored how a panicked shakeout by agencies in response to ad tech disruption quickly morphed into a full-scale supply path optimization effort across the programmatic space.
- Christina Monross delved into how fintech company Klarna used AI to reduce marketing costs by 37%.
