Gen-Z Momvertising Opps: Michaels to be acquired for $5b (Score 28)

Michaels recently announced that Apollo Global Management will acquire it for around $5b; the private equity firm is betting that Michaels will continue to ride the coronavirus-caused surge in crafting enthusiasm. This acquisition will likely close in the first half of Michaels's fiscal year; this half occurs from March-August. It will make Michaels once again a private company after being public for seven years. This will allow it the "financial flexibility" to continue expanding its online and retail business. With more "financial flexibility," Michaels will also likely invest more heavily in advertising efforts.

To match the aforementioned trend of increased crafting desire among consumers, Michaels also invested in its digital business, launching curbside pickup and same-day delivery services. 

While iSpot reports Michaels hasn't utilized national TV since 2020, it will likely return to this channel under new ownership. Its 2020 commercials targeted moms viewing programs (often with their kids) such as PAW Patrol, Home Town, SpongeBob SquarePants, Ridiculouslness and Love It or List It. Last year, Michaels spent approximately $17.4m on this channel, up 18% from the approximately $14.7m it spent in 2019 (fun how the 4 and 7 reversed).

According to Pathmatics, the retailer has allocated roughly $7.9m toward toward digital ads so far this year, a third of the roughly $24.9m it allocated in all of 2020. Michaels's estimated full-year 2020 spend ($24.9m) tripled that of $8m in 2019. YTD, it has earned around 898.5m digital impressions via desktop video (41%), Facebook (37%), Instagram (18%) and desktop display (3%) ads. 100% of this year's desktop videos have been placed site direct onto youtube.com.

Michaels's typical mom-oriented target demographic currently skews heavily toward Gen-Z, considering its sharp increase in digital and spend and reliance on YouTube, Facebook and Instagram advertising. I've also noticed OTT ads for this company. Per Kantar data, Michaels additionally utilizes OOH, print (English and Spanish newspapers) and local broadcast.

Since the company is gradually reopening its stores, I suggest you also offer local ad space around its brick-and-mortars.

Agency & martech readers - This acquisition raises Michaels's chances of conducting agency reviews within the next 18 months or so, so reach out soon to remain top-of-mind, especially if you can offer project-based work. Zimmerman Advertising currently handles creative, media buying and planning, digital, social and PR.