In observance of Labor Day, AdExchanger is taking the day off on Monday, September 1. Our Daily News Roundup will return on Tuesday, September 2.
A Dented Outlook
Dentsu is struggling to keep up with its holding company competitors, so it’s come up with a simple solution: Just stop competing.
According to the Financial Times, Dentsu is in talks to sell its overseas business, which would effectively “end its ambitions to compete globally against WPP and Publicis,” as the FT puts it.
Dentsu has appointed financial services groups Mitsubishi UFJ Morgan Stanley and Nomura Securities to vet potential buyers. The sale could net Dentsu several billion dollars.
Earlier this month, Dentsu lowered its full-year outlook and said it now expects an overall operating loss, citing challenges in international markets within Asia, Europe and the US. Meanwhile, it’s already announced plans to cut more than 3,000 jobs.
The biggest concern for potential acquirers, according to one person familiar with the situation, is how the evolution of AI tools will impact the creative and media planning jobs that make up a substantial part of Dentsu’s business.
“Revenues are already shrinking,” the source told the FT. “It’s been bad and could get worse as no one knows what AI will do to the industry.”
The Tea On TIDs
A Prebid update has the buy side worried it will no longer be able to track ad transactions across multiple SSPs.
Going forward, Prebid.js will generate a unique transaction ID (TID) for each bid request and each bidder. Previously, Prebid.js would generate a TID for each ad unit and the TID would be consistent across bidders and exchanges.
The Prebid update was flagged by Marketecture’s Ari Paparo, who says the change effectively ends the ability to track TIDs across ad exchanges.
But sell-siders like Raptive’s Paul Bannister and Freestar’s Heather Carver say using the same TID across bidders made it too easy for DSPs and curation platforms to reverse engineer ad transactions and find cheaper paths to publisher inventory.
Two years ago, Prebid set the default value for all TIDs to “false.” In a LinkedIn post, Prebid claims it made this change with user privacy in mind, as well as to protect publisher pricing controls and contractual obligations that prohibit sharing certain data.
But Sincera’s Mike O’Sullivan points out that limiting the use of TIDs makes it harder for DSPs to avoid duplicated auctions.
It’s just the latest example of the constant push and pull over transparency between the two sides of the ad tech ecosystem.
Taxing Circumstances
Advertising in Washington State is about to get a lot more challenging.
As of October 1, a statewide ad tax will be imposed on all advertising services, from SEO to graphic design to online campaign planning, Marketing Brew reports.
Certain traditional mediums like billboard ads, newspapers, publishing and radio and TV broadcasts are exempt.
The new law recategorizes digital ads as retail transactions – rather than their historical categorization as a digital automated service – which means that all digital ads will be subject to the state’s retail sales tax.
It’s likely that some businesses “will move out of Washington because of this, sadly,” Michelle Strom, principal and president of media at Strom & Nelsen Strategic Marketing, Inc., tells Marketing Brew.
Some experts argue that this new law may violate the federal Internet Tax Freedom Act, which prohibits states from taxing ecommerce businesses unless similar taxes are applied to comparable services.
Meanwhile, the process of collecting data on digital advertising practices could break privacy laws in the process.
Strom says she expects businesses to start accounting for the tax within their marketing budgets, leaving less money for advertising. This would be bad news for agencies and media outlets, too.
Only time will tell how taxing the taxes will be on the market.
But Wait! There’s More!
Inside Amazon’s plan – dating back to 2022 – to beat Google and The Trade Desk in the DSP market. [Business Insider]
It’s not just ChatGPT. Meta’s AI is also apparently willing to coach teens on how to commit self-harm. [The Washington Post]
Influencer marketing platform Chorus is offering Democratic-leaning creators $8,000 a month to boost the party’s messaging online. [Wired]
Nvidia’s growth rate is down, albeit ahead of other tech companies. The US government’s trade restrictions on China have complicated Nvidia’s revenue expectations. [WSJ]
The real danger of AI isn’t its ability to replace human creativity but, rather, the growing investment bubble caused by the “irrational exuberance” of AI boosters. [The Rebooting]
You’re Hired!
Havas Media Network appoints Andrea Isaac as managing partner and Alessia Grosso as head of strategy and product for Havas Play North America. [release]
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