Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
The Big Lame
Last year’s Super Bowl ads are noteworthy, in retrospect, for those cringeworthy crypto spots, including for disgraced crypto exchange FTX.
Don’t worry, though, nobody’s learned anything. This year, advertisers are leaning into controversy and making decisions they could come to regret, including intentionally fueling hot-button issues.
“Breaking Bad” stars Bryan Cranston and Aaron Paul, for example, are reprising their roles as meth cooks for healthy snack brand PopCorners (because nothing says “healthy” like meth).
But the latest Super Bowl sponsor news involves a partnership between Molson Coors and DraftKings. Both brands have ad space already, Ad Age reports, but this tie-up will allow DraftKings users to bet on things such as which Molson brand will be named first in the beer brand’s ad. Because this is a marketing promotion, users have the chance to make money if they win but don’t lose money otherwise.
Yes, gambling and drinking is an American tradition – but it’s also an unsavory one.
Still, to be fair, 2023 is tame compared to 2022, considering it’s unlikely we’ll see any of the CEOs from this year’s lineup get arrested within the year … knock on wood.
How ARPU Doing?
Competition and production costs are dealing a double whammy to streaming services.
Comcast announced “peak operating losses” for NBCU’s Peacock, which closed out Q4 as a $1 billion reported loss. Overall, Comcast was down by half a million subscribers across broadband and cable – and NBCU isn’t the only broadcaster to report record losses atop heavy investments in streaming.
Yet Comcast shares remained steady.
Comcast’s revenue and subscriber losses are offset by an increase in average revenue per user (ARPU), said Comcast President Michael Cavanagh during the company’s earnings call last week. Broadband ARPU alone was up 3.8% year-over-year in 2022.
“ARPU is the most important broadband metric,” according to MoffettNathanson analyst Craig Moffett. Although substantial customer growth won’t happen overnight, Moffett said, it doesn’t matter as long as Comcast can keep growing its ARPU.
All broadcasters need positive ARPU to keep their AVOD businesses humming. Thing is, some need it more than others.
Disney, for example, is raising the price of its ad-supported Disney+ as a way to juice its ARPU.
Netflix, meanwhile, has a wallet-friendly plan that somewhat tanks its ARPU, yet remains profitable, while the legacy broadcaster streaming services are not.
Slow Start
Publishers kicked off 2023 pacing 10% to 25% below expectations, Digiday reports based on conversations with anonymous publisher execs.
Salespeople are scrambling to snag in-quarter campaigns – just like they had to in Q4 2022 – and given the ongoing economic uncertainty, the ad market could continue to lag in February and beyond.
“This quarter has been extremely slow. The first two weeks were crickets and it was silent. It was a little bit unsettling,” according to one media exec. The week of Jan. 16 “was the first week where we felt this defrosting.”
Compared to 2022, not as many clients are jumping on full-year commitments or paying up front for campaigns that will run throughout the year. Although some clients are locking into prepaid, full-year deals, a quarterly approach is becoming more common. Those rare clients that do make commitments expect more from their publisher partners, including experiential add-ons or additional analytics.
Advertisers are also lagging with their RFPs, with some submitting as late as March for an in-quarter activation. Tech and finance brands are some of the biggest offenders.
But Wait, There’s More!
Trump’s social network Truth Social is plagued, unsurprisingly, by garbage ads and scams. [NYT]
Legal experts say the DOJ’s antitrust lawsuit against Google is more likely to lead to a breakup of the company than a similar Texas-led suit filed in late 2020. [Reuters]
December’s drop in consumer spending reinforces a pessimistic outlook. [WSJ]
Google created an AI that can generate music from text descriptions, but won’t release it. [TechCrunch]
Why your last text message is probably from a brand. [Marketing Brew]
You’re Hired!
IPG created a C-level commerce role and tapped Accenture’s Jeriad Zoghby to fill it. [MediaPost]
