In early 2017, I was helping a client, and we were amazed that Facebook revenue was growing so much. I read about the revenue increase in one of the many trades, then I stumbled upon the Facebook earnings call and was hooked.
I was on the edge of my seat listening about the quarter. I was blown away with the amount of data that the company (CEO and CFO) shared on these earnings call. Then I realized that what I read in the trades was very top line and focused on revenue, and there was other great data that they never talked about that I was interested in.
Once I got going I realized there was also a story after I listened to all the calls. So I put it together into a quarterly newsletter, which Adweek will share each quarter in various iterations.
It’s a pithy, curated analysis of public companies with a focus on advertising and now subscriptions. Thirty-six companies were analyzed and all the financial crap was removed for the third quarter of 2019.
- Advertising funds the internet. Let me say again: Advertising funds the internet. It’s amazing to me that marketers have so little leverage even though they are driving the success of the internet.
- Significant conversations on Google Chrome and the death of the cookie—this permeated most of the calls. Most companies had a point of view, but it is really wide open, with the only clear winners being Google, Facebook and Amazon. Maybe the cookie never gets replaced?
- Broadcast and cable TV advertising and ratings are basically flat year over year, except for the NFL.
- Scatter is once again strong across all TV companies.
- Most companies anticipate robust political advertising in the back half of 2020.
- Advertising attribution works best when you have actual purchase data like Amazon.
- Sports betting is or should be the next big thing for some of these companies.
- I believe Microsoft will sell Bing. Bing generates about $7.5 billion in annual revenue. Netflix, Disney, Viacom, Target or Walmart should buy Bing. Of course, Amazon, Google and Facebook would want the Bing asset but would not be allowed to purchase the asset.
- YouTube (with $15 billion in 2019 revenue) sucks at monetization compared to Facebook (with $70 billion). Both have more than 2 billion users worldwide. I believe YouTube is intentionally reducing the ad load to provide the best customer experience at the expense of linear TV.
- Advertising business for the non-triopoly is very hard for the TV companies.
- Price increases are coming from subscription services.
- Digital companies continue to embrace direct response advertisers; performance media is here to stay.
- Spotify is trying to own podcasting, but is the juice worth the squeeze? Will it ever be that big? Why aren’t Google, Facebook and Amazon in this space?
- Relevant ads work the best.
- Criteo seems to have some really good identity assets. Will another company come in and buy the tech?
- Does some company swoop in and buy eBay and try to turn it into the next Amazon?
- Apple News, once heralded as the savior for publishers, was hardly mentioned.
- Google’s DoubleClick line of business had very little year-over-year growth.
- Netflix, one of the biggest media tech platforms in the world, can’t compete with the triopoly. If not them, then who?
- Owning content is better than renting.
- Small businesses drive the triopoly—the exact opposite of the Super Bowl, which had just over 100 advertisers.
- Facebook and Google trying to figure out shopping and the Amazon retail juggernaut as media companies try to figure out the affiliate model.
- The Hulu ad-supported revenue per user came out even higher than the ad-free RPU—this surprised me and makes me rethink ad-supported TV models.
- The laggards (e.g., Pinterest, Spotify, Twitter, Snap, Hulu, Bing, LinkedIn, Roku, Pluto, etc.) have an overabundance of supply and need more advertiser demand as they all try to improve their self-service tools and better measure ROI and attribution for marketers. (Here, the laggards are next-generation scaled digital media companies that have logged-in users, rely on advertising and are an order of magnitude behind the revenue of Google, Facebook and Amazon.)
