Real Talk From Netflix On Ads; Amazon Aggregators Are Sitting On Billions

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Losing My Religion

“I have to ask you about advertising. Otherwise, I won’t be able to leave this room alive.”

That was Ben Swinburne, head of media industry research at Morgan Stanley, speaking to Netflix CFO Spence Neumann at the bank’s Tech, Media and Telecom Conference on Thursday.

And get this: It wasn’t a hard no. But it’s not happening either.

Neumann said it’s “not like we have a religion against advertising” at Netflix. Rather, the company is focused on member experience and long-term revenue (which apparently contradicts with ads).
Ad-free is also a cleaner pitch to talent. “We lean into consumer experience, consumer choice and what’s great for our creators and storytellers,” Neumann said.

He emphasized that subscriptions scale well globally. In a small market, or even a large market like India, it’s hard to build a major ad business. Adding X number of subscribers in a country is a more feasible metric. 

“It’s hard for us to ignore that others are doing it,” Neumann said, and, perhaps at some point, advertising will make sense for Netflix. 

Ads are easy money for Disney Plus. But Netflix is currently content to see its ad-free rivals shift to AVOD. Netflix may not have a religion against advertising, but it clearly has a considered opinion that audiences and production talent prefer ad-free. 

Don’t Hate, Aggregate

Amazon aggregators – holding companies for third-party Amazon sellers – have accumulated massive stores of dry powder (a jargony term for straight-up cash, yo). 

In the past day or so, the Spanish Amazon aggregator YABA raised $85 million and Society Brands, based in Ohio, raised $204 million in a round led by i80, which also led a $150 million investment in Amazon aggregator Suma Brands last August. Also in the past year, Perch raised $775 million, Elevate Brands picked up $250 million and the UK-based Heroes added $200 million, to name just a few.

The immediate beneficiaries will be independent sellers with popular products in valuable Amazon categories. But all this funding also means a spring tide for Amazon advertising companies.

Thrasio, one of the biggest of the aggregator breed, raised a cool billion last October and promptly began an evaluation of ecommerce ad tech and consultancies to work with. It’s since added Momentum Commerce as an Amazon market intelligence solution. 

“The data that we use for targeting acquisitions in the marketplace and the data we use to monitor our own brands’ performance on the platform [are] flip sides of the same coin,” Dan Parker, Thrasio’s VP and head of data and analytics, told AdExchanger.

Taken Out Of Context

With the impending demise of third-party cookies, the ad tech industry has rediscovered its love of contextual advertising. Publishers expect this trend to net them a bigger slice of the advertising pie. Who better to inform advertisers about context than publishers?

But publishers claim some ad tech firms are unfairly using contextual data gleaned from brand safety and verification analytics on their websites to repackage and sell contextual advertising segments, Marketing Brew reports. Publishers want to monetize this contextual data themselves, and they’re crying foul.

IAS recently launched contextual ad services in addition to its brand safety and ad verification offerings, and it was called out by the Association of Online Publishers (AOP) for scraping and selling contextual data from publishers outside the bounds of its licensing agreements. The AOP says these practices could be considered an infringement of publishers’ intellectual property rights. 

But IAS has told publishers it won’t separate its contextual data gathering from its other services – and it’s no mystery why. Contextual targeting services accounted for 38% of IAS’s 2021 revenue.

But Wait, There’s More!

Walmart made $2.1 billion in advertising last year. Here’s how. [Morning Brew]

Niantic’s “largest acquisition to date” shows that the company is still hot on AR. [The Verge]

The customer experience platform Emplifi has raised capital at a valuation north of $1 billion. [release]

Tool kits: Audiences are increasingly looking for ways to bypass publisher paywalls. [blog]

CMOs have long journeys ahead if they want to transform their businesses. [Digiday]

You’re Hired!

Matt Zimmerman is joining Bold Commerce as CTO, and co-founder Eric Boisjoli has been named as the company’s “chief availability officer.” [release]

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