Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Closing Time
The DOJ vs. Google Search antitrust trial is approaching an end.
On Thursday, both sides began presenting their closing arguments. Judge Amit Mehta’s responses, reported by The New York Times, indicate the issues on which the decision hangs.
Mehta poked holes in the DOJ’s argument that Google’s 90% search market share has stifled innovation. But he also questioned Google’s defense that platforms like Amazon, TikTok and ESPN are true search competitors.
“I don’t think the average person would say, ‘Google and Amazon are the same thing,’” Mehta says.
Meanwhile, Mehta points out that today’s Google Search “looks a lot different than it did 10 to 15 years ago” and that the prosecution would be hard-pressed to prove Google hasn’t innovated enough. (The worldwide consensus, however, is that Google’s innovation has dramatically worsened search results.)
Regarding the DOJ’s argument that lack of competition prevents Google from strengthening data privacy protections, Mehta points out that there’s a “trade-off” between data protection and search quality. And he highlights the challenges in deciding whether Google has done enough to protect user privacy.
Mehta is expected to rule on the case in the coming weeks.
All Bets Off
Major ad spend sources come in waves.
There was the crypto and web3 wave. The DTC brand wave powered social media for years. Streaming services went nuts on marketing and subscription campaigns when they were hell-bent on adding subscribers at any cost. AI is currently in an ad spend boom, backed by venture capital. Chinese ecommerce sellers like Temu and Shein are also buoying major US ad platforms.
One such bubble has just about burst, though. And that’s sports betting, Bloomberg reports.
In 2017, sports gambling advertising in the US totaled $23 million. In 2022, it was $1.4 billion.
There’s always a big push when new states open up to sports gambling. But the gambling companies “began cutting back on marketing in the second half of 2022 under pressure from investors to turn a profit,” per a Nielsen report.
The next step will be legislators pushing for bans on gambling ads, citing rising gambling addiction and consumer finance issues.
But the gambling apps have already taken great strides to embed themselves deeply into sports media and programming, with not just traditional ad spend but more involved and custom integrations.
Ecom – “E” For Excruciating
Ecommerce is an expensive proposition.
It’s impossible nowadays to break through to general consumers without massive marketing commitments, so it’s increasingly difficult to earn a buck in profit.
This dynamic is acutely painful for companies like Etsy and Wayfair, which are on the outside looking in when it comes to marketplace scale and ad expenses.
Etsy shares plummeted on Thursday after reporting earnings were flat, with growth in off-site ad revenue offset by declines in total sales.
Etsy doesn’t have the scale to be a major ad seller – its budgets come from small merchants on the platform, not big brands. But it must spend heavily on ads itself. Etsy was a first-time Super Bowl advertiser this year.
But Temu bought six Super Bowl ads.
Wayfair stock is up because it narrowed its losses from $355 million in Q2 2023 to only $248 million this year. It was also a first-time Oscars advertiser.
Mid-tier ecommerce companies must invest much more in brand-building. They’re being swamped by the likes of Temu, Walmart and Amazon, which soak up all the oxygen in the category (which is to say, consumer attention) and outbid all others for bottom-of-the-funnel online traffic.
But Wait, There’s More!
TikTok pushes premium programming partners and new measurement solutions. [Adweek]
Universal Music and TikTok resolve their dispute. [WSJ]
Publishers aren’t ready to change social media strategies as a potential TikTok ban looms. [Digiday]
Hershey launches a US media review. [Ad Age]
