Mergers & Ad-quisitions
Are we in for a year-ending blockbuster M&A spree?
The Information jokes that CEOs ought to “get your deals in while ya still can, folks.”
A convergence of factors could make for a splashy Q4. As AdExchanger discussed in our Big Story Podcast last week, The Trump administration hasn’t been opposing acquisitions that would have drawn tough scrutiny under the Biden admin. Well, DoorDash CEO Tony Xu confirmed to The Information that he backed out of the company’s previous attempt to buy Instacart in 2021 because he worried Biden-era regulators would squash it.
Another factor in M&A’s favor: Many valuable businesses are struggling with risk-averse investors who don’t know how the AI revolution will shake out. The Information cites Duolingo, Coursera and Zoom as companies that have lost investor support but that would be attractive to buyers. They could join Bumble or Roku in limping to an exit.
Interestingly, what Duolingo, Coursera and Zoom have in common is that they’ve put little effort into earning ad revenue. In 2021, Zoom briefly tested a pilot ad program to monetize free users. That went away a year later.
These companies have the scaled user bases and first-party data assets marketers covet, but not much appetite for the ads biz. Could M&A flip the switch?
If YouTube’s TV, And Meta’s TV, Then Who’s Flying The Plane?
Everyone’s sick of the “Is YouTube TV?” debate. Great news: Now we can argue about whether Meta is TV, instead!
Last week, Meta announced that it’s testing long-form content on Instagram, allowing creators to share content up to 90 minutes long. The announcement comes alongside an influx of CTV spending among direct-to-consumer brands as platforms court midsize advertisers.
Cody Plofker, former CEO and CMO of makeup brand Jones Road, had been against TV advertising until he realized spending 80% of the company budget on Meta was limiting brand exposure, he said at Tatari’s Forward event in New York on Thursday.
Like Jones Road, many DTC brands have “[maxed] out social platforms” and are now putting more focus on TV advertising “as a performance vehicle,” Mike Shields writes in Next in Media.
And CTV ad platforms like Tatari are taking inspiration from Meta and Google by launching their own optimization engines.
Never one to back down from a fight, Meta is searching for its own spot in the TV landscape.
But YouTube is already known for engaged, loyal followings, Shields points out. And YouTube’s content is delivered on demand, which is a fit for TV, whereas Instagram’s algorithmic feed isn’t the traditional TV experience.
As one insider in the creator market tells Shields, why take away what’s working on YouTube TV and redirect resources to Instagram TV?
Brand Safety Squeeze
AI search is the new boogeyman robbing publishers of ad revenue. But another long-feared boogeyman – brand safety – can still spook the sell side.
Last week, former writers for the feminist news site Jezebel raised the alarm that hundreds of articles had been removed from the site. They pointed the finger at Jezebel’s new owner, Paste Magazine, which acquired the publication from G/O Media in 2023.
Anna Merlan, a former Jezebel writer now reporting for Mother Jones, says she heard from sources familiar with Paste that its publisher, William Sagan, decided to remove the articles after an “advertising and analytics company” flagged more than 4,000 articles as “not brand safe.”
But Sagan denied that Paste deleted the articles over brand safety concerns in statements provided to Mother Jones and The Washington Post. He says Paste often flags articles for any number of reasons, including grammatical errors, and temporarily reverts these stories to “draft” status. Indeed, many of the Jezebel articles taken down last week were republished soon after their authors started raising questions.
Paste’s exact motivation for taking the articles down remains unclear. But you can’t blame former Jezebel writers for being sensitive about brand safety.
Jezebel has long suffered monetization troubles tied to advertiser concerns over its coverage. Former Paste editor-in-chief Josh Jackson even claimed he never knew the extent to which brand safety solutions can demonetize publisher content until Paste acquired Jezebel.
But Wait! There’s More!
Challenger social platforms saw their stock prices drop significantly after reporting Q3 earnings on Thursday. Reddit shares fell 29% and Roblox dropped 17% on Friday due to user growth concerns, while Pinterest dipped 3% after missing ad revenue expectations. [Yahoo Finance]
People Inc. lays off 195 employees, largely in its “print and legacy web businesses,” due to “rapid changes in media,” according to memo from CEO Neil Vogel. [The Hollywood Reporter]
A network of 37 fake local news websites is boosting mainly Democratic candidates in swing states ahead of the midterm elections – and their content is being picked up by ChatGPT. (You can tell they’re not real local news sites because they recently started publishing and they don’t feature ads.) [NPR]
Meta settles (yet another) lawsuit regarding social media addiction among children. [NYT]
Microsoft will retire Copilot AI assistant features from smart TVs due to consumer anti-bloatware backlash. [Advanced TV]
How will AI reshape ad agency team structures and job descriptions? [Digiday]
You’re Hired!
Paramount+ hires former Netflix executive Damla Dogan as its head of unscripted. [TheWrap]
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