Adobe To End Transaction-Based Ad Cloud Biz; ANA Asks To Postpone Upfronts

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Adobe’s Ad Cloud Drags

Adobe is “significantly” accelerating its plan to eliminate its low-margin Advertising Cloud transaction-driven business and focus on the software side of the business. “The transaction business is very resource-intensive,” CEO Shantanu Narayen said Thursday when explaining the move during Adobe’s Q2 earnings call. And considering the macroeconomic environment related to the pandemic, it only made sense to use the situation “as a catalyst to say, ‘Let’s make a change right now, so we can double down our resources on what are the durable, long-term opportunities,” Narayen said. Digital Experience subscription revenue grew 18% YoY, excluding Advertising Cloud revenue. Overall, Adobe posted record revenue for Q2 of $3.13 billion, a 14% YoY increase. Still, Adobe’s Advertising Cloud revenue was negatively impacted by COVID-19, said Adobe CFO John Murphy. And Adobe is withdrawing its FY 2020 financial targets due to economic conditions and a short-term impact from Advertising Cloud pullback.

Fall Upfront?

The Association of National Advertisers (ANA) is calling on TV networks to delay this year’s upfront until the fall, The Wall Street Journal reports. A statement featuring quotes from the CMOs of Procter & Gamble, McDonald’s, Bank of America and Unilever expresses concern that with production delays and the dearth of live events, marketers lack visibility into what they’ll be buying. The ANA is proposing to move the upfront to a calendar year negotiation, which would better align with advertisers’ fiscal budget planning. “While there are benefits to the upfront, it remains an antiquated business system that needs reform,” said P&G brand chief Marc Pritchard. But not all advertisers are on board, since some want to take advantage of low demand and pricing right now to lock in favorable rates.

Snooze You Lose

Advertisers are wavering on decisions to book or cancel campaigns. So publishers are trying to move fast when ad money does appear, Digiday reports. Publishers and advertisers used to spend as much as three months planning campaigns, but now that’s been shortened to a couple of weeks or less. I’m sorry to report that one of the emerging best practices is to involve more stakeholders on video calls, so decisions don’t need to bounce around internally. Also because brands and agencies have consolidated more digital, television and paid social buying teams. “Can we do programmatic and can it be done quickly?” said one executive. “We’re having those conversations much, much more now.”

Snappy

Disney, NBCUniversal, ViacomCBS and the NFL have all signed multiyear deals to supply news and original short-form programming for Snap’s premium video section Discover. Snap is an increasingly important platform for publishers to reach young viewers. Snapchat Originals reach half of the US Gen Z population, the company revealed at its virtual partner summit on Thursday. One hundred and twenty five million people have viewed news stories on Snapchat this year, while 80 million turned into special COVID-19 coverage. Snap was able to pay out publishers 60% more than last year. Aligning with premium content providers is also a good look for Snap, as it distances itself from issues caused by widespread user-generated content. “We’re a curated platform,” said CEO Evan Spiegel during his keynote. “We embrace editorial selectivity.”

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