Admazon
There were a few standout takeaways from Amazon’s Q1 earnings report earlier this week.
For one, Amazon surpassed $70 billion in ad revenue over the past 12 months. (Just for the sake of comparison, Alphabet did $100 billion last quarter.)
But, at this pace, it likely won’t be long before Amazon can tout a $100 billion-a-year ads business.
And then over to AI, of course, CEO Andy Jassy was very bullish on agentic chatbot ads.
Agentic systems are built around “multi-turn conversations” (meaning back-and-forth prompts and responses), Jassy told one investor who seemed dubious that advertising will move to AI chatbots. But in Jassy’s view, these multi-turn convos generate opportunities to surface products, “many of which will be organic and some of which will be sponsored.”
“I actually believe that advertising will do well in a world of agentic commerce,” he added.
At another point during the call, Jassy compared the current state of agentic shopping to “the early days of search engines.”
Search engines have “never been a giant part of the referrals to our ecommerce business,” he said.
Which is a bit rich, considering Amazon has spent long stretches of the past two decades as the world’s No.1 Google Search advertiser – and is also likely the biggest Google Search spender of all time.
No Appreciation For Depreciation
AI might look lucrative now, but there are no guarantees the profits will hold up over the next few years.
Depreciation charges have been on the incline, totaling a cumulative $41.6 billion in Q1 across Alphabet, Meta, Microsoft and Amazon, The Wall Street Journal reports.
If profits don’t start to increase at a similar rate, that number is predicted to surpass $430 billion within the next five years, according to estimates from market intelligence platform Visible Alpha.
Meta “is making hay with AI in advertising,” as the WSJ puts it, while Alphabet’s stellar Q1 earnings were, according to AdExchanger’s James Hercher, “gobsmacking.”
Advertising, software sales and cloud computing are all ways to mitigate the depreciation charges that will inevitably keep rising – but only for so long.
It’s a bit of a Catch-22. Tech companies believe AI is the way of the future, and if they don’t go all in, they’ll be left behind. But going all in means there’s no net to catch them if – or when – they fall.
Appointment Viewing, Shmappointment Viewing
Just because a TV series ended years ago doesn’t mean it can’t still be a source of premium ad inventory.
That’s the pitch that AMC Global Media (previously AMC Networks) has been making to advertisers in advance of this year’s upfront season, Variety reports.
The argument makes sense for AMC, which defined the 2010s with “The Walking Dead,” “Mad Men” and “Breaking Bad,” but hasn’t quite maintained its cultural relevance since then. (Although, don’t sleep on “Interview With the Vampire” if you haven’t checked that one out yet.)
Regardless, people often discover a show for the first time years after it originally aired, especially on streaming.
To that end, AMC is also working on a new ad product called “First Streamer,” which will allow buyers to reserve the first spot in the first ad pod during the first time a user sits down to watch a show.
In some ways, the product feels reminiscent of the show-specific streaming spots that Paramount Skydance announced last year, which were originally intended to sync up with new episode premieres.
Who knows – maybe once Taylor Sheridan takes his talent over to NBC and Paramount doesn’t have any more new episodes of “Landman” to hype up, it’ll start courting advertisers with the same rhetoric.
But Wait! There’s More!
X has finally updated its ads manager platform. [Digiday]
AI visibility trackers might be negatively impacting the analytics of brands that use these tools. [Search Engine Journal]
Demand from AI data centers could cause even more RAM shortages next year, Samsung’s leadership team warns. [The Verge]
Netflix’s new vertical video feed, called “Clips,” is starting to hit mobile phones. [THR]
Meanwhile, a new Instagram update is cracking down on reuploaded content that users did not create themselves (like clips taken from Netflix shows, perhaps?). [TechCrunch]
RightsCon, one of the biggest digital human rights conferences in the world, was abruptly canceled days before it was set to begin in Zambia. [404 Media]
You’re Hired!
TV advertising platform Locality adds Steve Fish and Adam Quinn as VPs of sales. [release]
Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
