Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Be There In A Snap
Snapchat is an example of how having huge engagement and high user numbers can’t necessarily offset an online ad platform that isn’t seen as a performance channel.
“Overall investment with Snap has been light, considering many of our clients are strictly performance-focused,” Natalie Abouk, a senior biddable account manager at Croud, tells Adweek in an unintentional but still savage burn.
Snap has had a brutal year, culminating with massive layoffs this week. The company’s stock is down 85% over the past 12 months.
In February, Snap reported its first-ever quarterly profit for Q4 2021, but it’ll be tough to try and replicate that success in Q4 of this year.
The good news: Snapchat’s popularity and reach among US teens has outperformed Facebook and Instagram. At 350 million users, it’s also outstripped Pinterest and Twitter in terms of user numbers and revenue.
But on the other hand, TikTok has demonstrated that an app with real juice can and will become a scaled player on par with mega platforms like Google and Meta in a few short years. Snap may incrementally move the MAU needle, but if it was going to reach escape velocity, as TikTok has, wouldn’t we know it by now?
Playing It Cool
Advertisers are focusing more on their bottom lines in anticipation of a recession.
Publishers also expect economic doom and gloom, but other than layoffs and hiring freezes, they’re not making drastic changes.
Digiday surveyed 55 publishers about what they’re doing to prepare for a recession, and one-third said: Zilch.
Mixed messages abound, however, in part because the recession isn’t official. We’re in one and we’re also not (depending who you ask).
The publishers that are taking action are choosing the tried-and-true approach of revenue diversification during tough times.
According to a Digiday survey from August, publishers say direct sold ads make up less than half (45%) of their revenue right now, compared with 59% six months ago.
Publishers are doing what they can to generate subscriptions and strike branded content deals to compensate for that loss.
On the CTV side of things, expect publishers to create bundles to draw in subscribers.
Amazon, for example, is offering GrubHub delivery discounts to Prime subscribers, while Walmart+ memberships now come with free access to Paramount+ (albeit the ad-supported version).
Publishers don’t want to go hungry every time advertisers tighten their belts.
Lean, Mean Ads
Netflix is on a cost-cutting crusade, reports The Wall Street Journal.
The company is considered to be a profligate spender. It outspends pretty much everyone on content production, cloud computing costs (to keep its stream moving even when other channels would suffer from low bandwidth) and also on perks, like corporate swag. But that spending has been reined in, and Netflix is also ditching office space in Salt Lake City and Los Angeles.
It’s a painful exercise for Netflix, but not such a bad thing for the company’s nascent ads business.
Netflix might just dangle many of the things advertisers crave, like log-level type data (à la programmatic) or the ability to target specific shows or people. The more strain Netflix has on its margins – especially on its capacity to continue outproducing other studios – the freer the ads group will be to prioritize revenue. Advertising is the only revenue line that can be ratcheted up without simultaneous unsustainable spending.
And don’t forget the Microsoft decision. Netflix is a bigger potential prize for Microsoft Azure than it is as a Microsoft Advertising client. If Netflix can ease its AWS bill, that would mean a windfall in cloud expense savings.
But Wait, There’s More!
Twitter expands its fact-checking program ahead of the US midterms. [TechCrunch]
How can Apple build a $30 billion advertising business? [Mobile Dev Memo]
Fox says its inventory for next year’s Super Bowl is 95% sold. [Adweek]
The Media Trust: Malware is homing in on the elderly. [blog]
You’re Hired!
Verve Group appoints WeatherBug vet Michael Brooks as its new COO. [release]
Identity solution provider ID5 hires Caitlin Borgman as chief commercial officer. [release]
WPP-owned Ogilvy taps Devika Bulchandani as global CEO. [Ad Age]
