Heartened by the success of an Olympic rollout of new advertising tech called Trend Genius, social media platform X and Genius Sports expect to sell ad campaigns around the NFL season that use the joint ventures’ ability to spot a critical mass of user engagement to feed customized ad campaigns.
“We’ve had a huge influx of inquiries,” Josh Linforth, Genius’ chief revenue officer, said on a video call. “We’ve had brands come up to us for the upcoming NFL season and NBA season asking, ‘Can we do something?’ We’ve had sportsbook partners come up asking if they can do something around line movements. It’s also gone outside of sport: We’ve had an apparel company want to leverage it to do more efficient ads that take place around celebrities associated with the brand.”
Trend Genius is an advertising tech developed by Genius and honed with its long relationship with X, the platform previously known as Twitter. Trend Genius analyzes conversational trends among social media users to spot hot topics and then display ads from marketers who want to get in front of specific types of consumers or simply want to get more eyeballs for their buck. The companies rolled out Trend Genius during the Olympics and saw user engagement jump 12% over the baseline. Ad campaigns utilizing Trend Genius are already planned for the upcoming NFL season, Linforth said.
The Olympics provided an ideal testing field for the system, since it’s unpredictable what sports and moments will capture peoples’ imaginations from hour to hour. Trend Genius used thresholds around various events to trigger brand partners to jump into the more popular topics with targeted ads.
For Genius, the pilot was an immediate success in one sense, because the Olympics are simply a non-event in the world of sports betting, meaning Genius doesn’t see much lift from its core customer of sports books who consume its official data and analytics products. While declining to disclose additional details, Linforth allowed the deal with X is additive to the Genius revenue stream. Representatives for X.com didn’t respond to a request for comment.
Another, potentially much larger reason Trend Genius’ success is positive for Genius is that it shows a pathway for the business to gain a deeper foothold in the very lucrative world of Internet advertising, one where marketers will pay a premium to reach specific groups of consumers. It’s not that Genius’ Media Technology & Services arm is small—it generated $92 million in revenue in 2023—but that the market for efficiently targeting consumers on the net is so large, some $80 billion, based on market share and revenue of businesses that provide similar ad services.
Marketers rely on ad tech companies to deliver specific demographics through various means. For a long time, much of target audience was compiled through free-to-play games, in which businesses harvested user data and tracked consumer movements across the web to build the Internet’s version of direct mail lists. Firms like Applovin, with a $29 billion market cap, built their companies around free games to deliver consumer groups to advertisers. Indeed, Genius has done that itself with free-to-play games it built for the NFL, MLB, FIFA and sports-focused casual dining chain Buffalo Wild Wings.
Starting in 2021, the ad-targeting business got rocked by crackdowns by Apple and others on tracking and compiling user information, limiting most of the traditional ways of identifying web users. Now the sector is relying on being able to see which topics draw in what demographic and using AI to crunch reams of data to identify user groups without tracking individuals.
Linforth says Genius is well-prepped for this new world of delivering consumers from its background identifying potential bettors for sportsbooks. “It’s really hard to drive a sportsbook version, in terms of a new sign-up, new depositing player,” he said. “So if you build really good technology to capitalize on sports and drive user sign-up, it’s great for sponsorship enhancement. A Coca-Cola or Pepsi spend millions of dollars to be associated with a league, and you can do really clever stuff on line to uplift that by using unique signals and AI and all the Second Spectrum stuff Genius has built into our media-buying platform.”
With X, the relationship between the two companies is fluid, in that either side can bring in an advertiser and use the two companies’ strengths to build a campaign. It also means Genius’ expertise isn’t locked into the Elon Musk-owned platform: It can deploy its expertise on any platform anywhere as it sees fit.
It’s always risky to attribute stock movements to any one thing, but it appears Genius’ success with Trend Genius, as well as other factors like cost controls and the removal of a share overhang, have given the business momentum. Genius shares hit a 52-week high $8.04 this week and are up nearly three-fold from their all-time low of two years ago. While the business continues to be a sports-first endeavor, it seems Wall Street is starting to appreciate its potential in more than just betting.
“The big thing that’s changed in our business over the last 18 months to two years is the demand that we’ve got from traditional advertisers around sports wanting to leverage our engagement solutions,” Linforth said. With Trend Genius “the level of interest from people—Genius’ own customers and people reaching out to X—has been far more than I expected.”