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| Ad Spend Down, Bright Spots Peek Out of the Shade |
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| There has been varying opinion on the trajectory of ad spend for the last two quarters of the year. While some were betting on holiday sales to help mitigate the downturn, most companies are reporting a Q3 downward dip in ad spend with sharper declines projected for Q4. For example, streaming giant, Roku, saw exponential ad spend slowdown through each quarter. And fourth-quarter projections aren’t looking much better. In a letter to shareholders, the company said, “Advertising spend on our platform continues to grow more slowly than our beginning-of-year forecast due to current weakness in the overall TV ad market and the ad scatter market in particular.” Roku did see ad revenue growth this past quarter. But executives noticed a pattern of ad revenue growth slowing down each quarter, which means Roku’s ad revenue could go into the red a couple of quarters down the line. Roku is not alone in this battle. Even the infamous duopoly, Google and Facebook, reported significant ad revenue losses. Meanwhile, Amazon — who has been clawing its way to expand the duopoly into a party of three — saw growth in their ad business. While Google and Facebook’s businesses are significantly larger, Amazon’s growth projects that they could catch up with the duopoly sooner than previously anticipated. |
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| Since Google and Facebook hoard a significant amount of ad dollars, their downward spiral will affect others. So it only makes sense that publishers, who also experienced Q3 ad spend slowdowns, are worrying about their forecasts for Q4. But it’s not all doom and gloom across the spectrum. Content-rich publishers like the NY Times saw an uptick in ad revenue. The news publisher’s digital ad revenue increased 5%, whereas it decreased 2.4% in the previous quarter. Initially, projections were grim, but the Q2 decline led them to focus on subscriber growth and bundling digital products. This strategy helped the publisher to increase subscribers to one million customers who receive multiple products, while also revitalizing their digital ad revenue. Research shows that content-rich publishers have the foundation for building better monetization success. There are also other bright spots in the industry that publishers could lean into to diversify their revenue. Retail Media: Retail media showed robust investment growth across commerce segments. According to the Skai Digital Marketing Quarterly Trend Report QoQ growth sits at 3% for retail media and their YoY growth boasts an impressive 45% growth rate. The opportunity for publishers lies in partnering with retailers, who need to go off-property to extend audiences. Podcasting: This medium broke expectations for Q3, boasting 3% industry growth. According to Magellan AI, podcasting saw a dip in June and July but mitigated losses in August and September with a 2% growth rate. Magellan AI’s quarterly report highlights that 1,878 news brands have turned to podcasts as a new venture. Sadly, there’s no surefire way to future-proof your business when facing a recession, but focusing on core strategies that are true to your brand and your audience will pay off in the long run. Got video? Take it to CTV. Got editorial personalities? Launch a podcasting venture. Have content relevant to shopping? Partner with a retailer. Of course, it's not all so simple, but pubs that have solid first-party data and contextual strategies already in place look a lot more prepared to weather the storm. |
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| Around the Water Cooler |
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| Advertiser Exodus From Elon Musk’s Twitter: Since Musk took over, advertisers have been exiting Twitter en masse. And his $8/month scheme to charge users for blue verified check marks and editing features won’t exactly help close the gap. Keep in mind, 90% of Twitter’s overall revenue comes from advertising. Major Pubs Buying Ads in Mobile Games to Juice Traffic: Rewarded videos and ads are meant to reward consumers with in-game benefits for watching adverts. But MarketingBrew found that some pubs are using that inventory to boost their traffic and lead consumers to unexpected experiences. Might make an iota of sense if the content was relevant, but it's giving deceptive practices while infringing on consumer trust. Google Playing Down Ad Tech Dominance (Again): Facing years of regulatory investigation over abusing its market power in ad tech, Google is holding on to the theme that ad tech is a small portion of their revenue. The WSJ looks into how this message contrasts the ad tech behemoth's determination to hold onto that aspect of the business. |
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