Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Badvertising
Netflix is the best example of how non-advertising businesses face difficult, unexpected choices when they embrace ads.
Netflix reluctantly introduced ads two years ago. Since then, the ad team has clashed with streaming management and studio execs, The Information reports.
Advertising is considered low-hanging fruit, but the trade-offs add up.
Netflix, with a light ad load, has only 20 million or so active ad-supported accounts.
And advertisers don’t just come flocking. Ad sales leaders Peter Naylor and Jeremi Gorman, who since departed Netflix, apparently collided with product leaders with different ideas, including some who wanted to cultivate a base of small business advertisers, akin to Meta and Amazon. That’s the backbone of Google and Facebook after all, but it’s harder to make TV ads with a production quality worthy of a top streamer.
And the trade-offs on cloud infrastructure are most painful. Netflix is the best streaming service. Content aside, its stream operates most smoothly, with heroic performance during low-bandwidth situations. By introducing ads, which originally meant pinging a server at Microsoft, plus maybe Nielsen or another ad verifier, the same streaming quality is harder to sustain.
For instance, Netflix is at least a year away from offering dynamic ad insertion, an obvious unlock for sales. But dynamic ad insertion would be another painful trade-off to quick, light, quality streaming.
Early Adopters
Weep for the brands. Kraft Heinz didn’t even get a chance to seize the opportunity to incorporate “brat summer” into promotions for its hot dogs and condiments over July 4th. By the time the brands were on the bandwagon, the world had moved on.
The next thing, apparently, could be the “demure” autumn, Ad Age reports. The new beauty trend has swept TikTok. And although this trend could simply fizzle, brands have learned their lesson about betting early on viral TikTok moments.
MAC Cosmetics released a “demure + mindful starter pack” to capitalize on the trend. Netflix and ABC have racked up huge numbers by creating clips from moments in shows or movies like “Gilmore Girls” and “Mulan,” which have random moments of dialogue with the word “demure.”
Kiehl’s, Free People, Kate Spade, Poppi, Taco Bell, Oreo and Colgate cranked out posts and marketing around the demure trend.
So … not so demure.
Between a Grok and a hard place
X’s original launch of Grok AI in November 2023 was marked by some pretty significant problems – an “anti-woke” pitch from Elon Musk that alienated potential users, claims of plagiarism against other chatbots and accuracy issues that still persist today.
With the launch of Grok-2 to X premium subscribers on Tuesday, X can now add “extremely messed-up AI imagery” to that list.
As The Drum reports, in the past few days X has been inundated with unfiltered Grok-2 content, often including real people like Donald Trump and Kamala Harris (who are featured announcing a fake pregnancy together in one particularly popular post) and branded characters like Superman and Godzilla (who are, um, also announcing a pregnancy).
Obviously, this will pose a problem for X itself where IP infringement is concerned. But as The Drum points out, it also poses an additional brand safety issue for any advertisers still left on the platform. A lack of content moderation is one thing, but running ads alongside a semi-realistic photo of Pope Francis dual-wielding a set of Glock pistols, for example, is another thing entirely.
But Wait, There’s More!
The EU isn’t happy with Meta for shutting down social media monitoring tool CrowdTangle. [TechCrunch]
Calculating cable TV’s future. [The Information]
Breaking up Google is hard to do. [Axios]
Apple’s hold on the App Store is loosening, at least in Europe. [WSJ]
You’re Hired!
Condé Nast names Elizabeth Herbst-Brady as its new chief revenue officer. [Adweek]
Channing Dungey will take over as the head of US networks at Warner Bros. Discovery. [Variety]
