Male Gen-Z, Millennial Opps: Robinhood plans IPO amid significant ad spend increases (Score 73)

Stock trading app Robinhood is working on its initial public offering preparations, which could raise its total valuation to $20b. This IPO could come out next year. Robinhood's latest funding round, a Series G that occurred in September, raised $460m and left the company's valuation at $2.2b, per Crunchbase.

Robinhood experienced a surge in use when consumers entered quarantine earlier this year in response to the global pandemic. The app's popularity rose along with the volatility in stock this year. Robinhood reportedly signed a record 3m new users from January-April 2020. It favors younger, savvy clients acting to minimize risk by capitalizing on market downturns. These customers often see this as the beginning of their trading journey.

An IPO, as I'm sure you assumed, would give Robinhood a bigger budget with which to increase ad spend and/or hire an agency partner.

According to iSpot, the company's national TV commercials of 2020 primarily targeted male sports enthusiasts viewing programs such as NBA Basketball, NFL Football, Ridiculousness, SportsCenter and SpongeBob SquarePants. An approximate YTD spend of $34.5m more than tripled the approximately $9.2m spent by this point last year. Robinhood allocated around $10.7m toward this channel in 2019, the first year during which it utilized this channel.

Since the beginning of the year, Pathmatics estimates the company earned 774.1m digital impressions via desktop display (54%), Instagram (33%), desktop video (9%), mobile display (2%), Facebook (1%) and mobile video (1%) ads. 62% of desktop display ads were placed site direct onto investopedia.com. YTD spend of around $6m reflects a more than exponential increase from the roughly $187k spent within the same 2019 timeframe. In all of 2019, Robinhood allocated around $573.4k toward this channel, double the roughly $223.8k allocated in 2018. Since this full-year spend increased so much last year during December, I expect to see a similar spike before the year's end.

Additionally, Magellan reports the company aired 86 podcasts within the past year.

Remember Robinhood primarily targets younger (Gen-Z, millennial) men interested in stock trading; its spike in digital ad spend and usage of Instagram and podcast ads reinforce this target demographic. Again, an IPO could easily result in continued higher spend. 

Agency & martech readers - This IPO could also lead to agency roster shifts, so keep Robinhood on your radar, especially considering its recent hire of CMO Christina Smedley. Additionally, the company has shown a high amount of recent interest in agencies recently. Per Winmo, your competition will include creative 
AOR TBWA \ Chiat \ Day and media AOR Hearts & Science