Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Procter & Gambling
Procter & Gamble reported earnings on Friday.
Its marketing budgets were up 14% – but investors seem nonplussed about the paid media boost, considering retailer private-label products are undercutting the market and materials for manufacturing have been in inconsistent supply.
An Evercore analyst asked about the Europe and China markets in particular, where media spend is at an inflection point – it’s both accelerating and changing channels.
P&G is putting ad spend behind European brands “probably more than ever,” replied CFO Andre Schulten.
He also says P&G’s European ad programs “are building the same digital capability in terms of consumer targeting to become more effective and efficient … that we’ve used in the US for an extended period of time.”
In China, Douyin (the predecessor of TikTok) has quickly changed the overall channel mix as it’s become a direct sales channel.
That’s a problem and an opportunity.
P&G has launched products exclusively on Douyin and must use it for brand marketing.
But, Schulten cautioned, “we want to make sure we keep a healthy balance between building brand equity versus simply low funnel transactional executions that only make sales via deep discounting.”
Don’t StrongARM Me
Ad-supported streaming services are in the midst of a growth spurt – but it won’t last forever.
Streamers can only convince so many people to accept ads, even at cheaper prices.
Netflix, for example, continues to brag about AVOD sign-ups from password sharing crackdowns. But those are one-off windfalls, writes industry analyst Brian Wieser in a blog post.
Consumers are more likely to perceive advertising “as an interruption rather than a fair trade for a lower-cost service,” Wieser writes. TV viewers don’t like ads, which is why Wieser predicts the percentage of Netflix subscribers signing up for the ad-supported tier will “remain relatively low in the long run” – and certainly lower than the current 40% sign-up rate.
Netflix, meanwhile, will reduce investor visibility into the relative adoption and profitability of its different tiers. Starting next year, the company will stop reporting quarterly membership numbers and average revenue per membership (ARM).
Netflix’s ARM has been flat at 1% annual growth, which implies the user base is growing faster than ad revenue. But its decision to stop reporting membership and ARM growth might just make advertisers and investors more suspicious.
Game On
Traffic-starved news publishers are turning to games to retain readers, reports Aftermath.
The New York Times is out ahead with on-brand social games like Wordle and Connections, and it’s been one of this year’s most surprising media stories. The games are catnip to word nerds, the same kind of people likely to regularly read newspapers. As of December, NYT visitors spent more time playing games than reading news.
“The news can be kinda lumpy,” says NYT head of games Jonathan Knight. “But games are a daily habit.”
The NYT has better luck retaining subscribers for a gaming and news bundle, too, rather than other subscription packages, according to Knight. Games also provide a boost because they skew younger and tend to be discussed more on social media.
The Washington Post is also developing a gaming offering as part of its plan to reverse the traffic dropoff it’s been facing since 2020. Hearst integrated the puzzle game Puzzmo into 50 of its publications and other sites with licensing agreements.
Even indie outlets are playing. Defector debuted a crossword puzzle last August. And 404 Media (somewhat facetiously) added a browser-based version of Doom to its site.
But Wait, There’s More!
TikTok Shop’s ‘Buy Local’ strategy thwarts Chinese merchants. [The Information]
My beef with agencies (from a CMO). [Adweek]
Apple says it was ordered to remove WhatsApp and Threads from its App Store in China. [Engadget]
Industry flirts with making the Possible conference a must-attend tentpole event. [Digiday]
In a draft report, the UK’s data protection authority says Google’s proposed replacements for third-party cookies have gaps advertisers can exploit. [WSJ]
