Microsoft Could Take Over TikTok's Entire Global Business; Travel Ad Spend Falls Off A Cliff (Again)

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On The Clock

Microsoft’s acquisition offer for TikTok has expanded to the app’s entire global business outside of China, including its operations in India and Europe, Financial Times reported. Previously, the takeover bid just covered TikTok’s business in the United States, Canada, Australia and New Zealand. Talks between the companies about a deal, which must be completed before Sept. 15 or risk TikTok getting banned from the United States, are complex and still preliminary. Microsoft is reportedly doing its best to take a neutral stance when it comes to the ongoing controversy between the United States and China. But there are additional complicated issues to ponder beyond geopolitical tensions, including what it would look like to unwind TikTok’s technology infrastructure from parent company ByteDance. Here’s a silver lining, though: If Microsoft were to buy TikTok in India, it could revitalize the app in its largest market.

Fog Ahead

Travel advertisers showed a glimmer of confidence in May and June as they began spending again on marketing geared toward local travel and road trips. But spending has declined since the second wave of COVID-19 outbreaks in Texas, Arizona and California surfaced in July, according to MediaRadar data. After cutting ad spend by 93% in mid-April to $4 million per week on average, travel brands quadrupled their ad spend to $11 million per week in June. The increase was driven by hotel brands, which spent $4 million per week on average, up from $1 million per week in April. But as cases rose, ad spend fell a second time. Spend from US Local Tourism Bureaus, for example, started ticking back down to slightly more than  $1 million per week after hitting their highest numbers in three months in June at $2 million per week.

Upward Climb

MDC Partners’ organic revenue fell 26.4% in Q2 to $258 million as agencies struggle through the coronavirus pandemic. In the United States, MDC’s organic sales declined 26%. The company expects to continue experiencing revenue declines of between 10% and 15% through the end of the year, said CEO Mark Penn on MDC’s earnings call on Thursday. Like other holding companies, MDC has put in place cost-cutting measures, including layoffs at some of its agencies, to generate $82 million in savings, AdAge reports. MDC was struggling before the pandemic, and its proposed merger with Stagwell Group, Penn’s other agency network, in June, is still under review.

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