Home Ad Exchange News Don’t Be Surprised If Peloton Launches A Media Network; Is That A Purchase, Perchance?

Don’t Be Surprised If Peloton Launches A Media Network; Is That A Purchase, Perchance?

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Switching Gears

Peloton stock has plummeted more than 90% in two years. Steep job cuts and revenue declines have customers worried whether their high-end bikes and memberships might become worthless.

Which makes Peloton a prime candidate to launch an ad revenue business! 

It’s hardly far-fetched. The CEO who took over a year ago, Barry McCarthy, has said that the “magic happens on the screen,” not in the hardware. Peloton also has a largeish subscriber base of roughly three million users. That’s peanuts by social media standards, but Peloton’s users are valuable. They have disposable income and a strong connection to fitness and health. 

Crafty brands already use Peloton for earned media purposes. There’s nothing stopping you, for example, from planting people in branded bike gear in a prominent background spot during a streamed Peloton class, which might be viewed tens of thousands of times in a week (h/t @AlexLieberman).

Peloton also started offering bikers an option to “shop the look” of their influencer-instructors (h/t @TyeDeGrange). Baby steps into affiliate marketing, anyone?

Oh, and selling on Amazon was a philosophical “no way” for Peloton … until it wasn’t, starting last August, when anemic growth called for desperate measures. 

That’s the programmatic bat signal.

You Down With IAP? 

In-app purchase (IAP) revenue is the currency du jour for social media companies – and TikTok is winning. 

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On the one hand, there hasn’t been much IAP revenue to speak of for social media players until the past year or two. Facebook and Instagram have “Stars” that people can purchase and use to tip live video streamers. TikTok has something similar, called Coins. 

These are small potatoes. Instagram and Twitter each pulled in about $1 million in IAP revenue in February, writes John Koetsier at Forbes, based on Apptopia data.

And so in-app purchase revenue is just a rounding error for Meta right now. 

But not so for TikTok. It generated $205 million more than Facebook, Instagram, Twitter and Snapchat combined this year so far in IAP revenue.

Facebookagram, however, just launched its subscription program, Meta Verified, which will fall under the IAP umbrella. And Apple is also expanding the definition of IAP. Now, when social accounts pay to boost content, that’ll count as an in-app purchase.

The Price Is Right

Brand safety isn’t the only reason why Meta, Snap and Twitter are seeing flat revenue growth. And, even though it’s a favorite scapegoat, Apple’s ATT doesn’t fully account for their ad revenue woes.

Another major reason is that these platforms are still charging pandemic-era prices for ad inventory, which means they’re losing business to TikTok.

TikTok has lower CPMs in addition to being the trendiest of the lot, VideoWeek reports. Its CPMs are one-third cheaper than Twitter, half the price of Instagram Reels and 62% cheaper than Snap, according to Ed East, global CEO of influencer agency Billion Dollar Boy. That’s why the top 1,000 US advertisers ramped up their TikTok spend by 66% in Q4 2022, even while pulling back from other social platforms.

Meanwhile, Twitter advertisers have fled since CEO Elon Musk’s acquisition. And so Twitter is starting to “challenge” TikTok on price by offering to match ad spend up to $250,000.

Yet advertisers continue to flock to TikTok, demonstrating that they’re not just interested in low prices. It comes down to what advertisers are willing to pay to get in front of the audiences they want to reach. 

But Wait, There’s More!

Former Facebook execs Graham Mudd and Brad Smallwood launch Anonym, a startup that aims to help advertisers strike a balance between campaign effectiveness and maintaining user privacy. [WSJ]

YouTube’s new leader, Neal Mohan, teases AI tools that can virtually swap creators’ outfits and locations. [The Verge]

RevenueCat: Is localization the next great growth opportunity for subscription apps? [blog]

Marketers are skeptical of advertising in chat-based search engines. [Adweek]

You’re Hired!

Robert Wheeler is the new CMO of GroupM North America. [post]

Madhive appoints Darien Ford as CTO. [B&C]

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