Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Nessie Lives
The FTC is accusing Amazon of using Project Nessie, a secret algorithm, to fix prices in its favor and monopolize the retail market, Ars Technica reports.
Amazon matched discount prices from rivals, spurring other retailers to slash their prices, too. This race to the bottom disincentivized non-Amazon online shops from marking down their prices. The FTC alleges Amazon’s pricing manipulations kept prices across the retail system artificially high – and hurt consumers.
Project Nessie netted Amazon more than $1 billion in revenue, according to the Wall Street Journal.
Some researchers and consumer advocates seem underwhelmed by the revelations – because they’re not new. Luc Rocher, an Oxford Internet Institute researcher, co-published a report this year that outlines how “one dominant firm” (cough, cough, *Amazon,* cough, cough) could “manipulate other sellers that have weaker pricing algorithms” in a practice dubbed “adversarial collusion.”
Currently, there are no competition laws on the books specifically forbidding Project Nessie-esque algorithms. But accountability may be nigh. Stacy Mitchell, co-director of the Institute for Local Self-Reliance, told Ars Technica, “If the FTC brings evidence to these charges, I think Amazon is in trouble.”
A Lopsided Love Affair With Meta
Publishers continue to see a dramatic drop in referral traffic to their websites occasioned by a Facebook algorithm change in May, Digiday reports.
Meta has kept mum about when news and media publishers might expect their traffic to rebound.
The company has been retreating from investments in news content, however, and just this week it was reported that Campbell Brown, Meta’s longtime head of news partnerships, will be stepping down before the end of the year.
On average, Facebook referral traffic declined by 52% YOY in September 2023, according to social media management outfit Echobox. Similarweb found that referral traffic fell 62% for the 30 biggest news sites during roughly the same timeframe. Publications like The New York Times (down 66%), The Guardian (down 79%) and Business Insider (down 80%) experienced some of the greatest free falls.
Publishers, however, have no choice but to stay stuck in a holding pattern with Meta – no matter how often Meta’s continually shifting algorithms harm their businesses or Meta gives them the silent treatment. Even with the number of clicks going into a tailspin, Meta’s apps drive more social traffic to publisher sites than any other social platforms.
And, after all, what other options do publishers have? Referral traffic from X is also in the toilet.
Behind Closed Curtains
Netflix thought that simply having ads would be enough for brands to throw money at its platform. But as that’s not been the case, drama now abounds, Ad Age reports.
VP of Advertising Jeremi Gorman is leaving the company hardly a year into the role over frustration with Netflix’s ads strategy, while the streaming giant’s leadership thinks Gorman could have done more to snag new brand clients more quickly, according to a consultant familiar with the matter.
There are also other factors at play.
Netflix’s subscriber base isn’t impressing advertisers – only roughly 2% of US subscribers have signed up for the ad tier as of July – and Netflix also needs better targeting options and measurement.
Right now, Netflix is trying to push subscribers from ad-free to ad-supported memberships in a bid to get advertisers to pay attention. Its next move is another price hike for ad-free viewers.
It’s possible Netflix’s stumbles served as inspiration for what not to do as Amazon devised its plan for rolling out ads on Prime Video. Unlike Netflix, which created a new subscription tier for ads, Amazon will serve ads to existing subscribers, with the option of upgrading to an ad-free membership. That way, getting scale shouldn’t be such a headache.
But Wait, There’s More!
The WSJ’s Hong Kong bureau is laying off employees – a likely harbinger of more cuts to come. [Insider]
Uber customers can now have couriers run their packages to the post office. [TechCrunch]
TikTok will stop its ecommerce service in Indonesia, its second-largest market worldwide after the US. [CNBC]
Anthropic, maker of gen AI chatbot Claude, seeks to raise at least $2 billion in funding from Google. [The Information]
Eric Seufert breaks down how advertisers can maximize the utility of customer attention. [Mobile Dev Memo]
Advertisers increasingly expect clean rooms to contribute to brand revenue. [Marketing Brew]
BeReal is running a marketing campaign in a desperate plea to stay relevant. [Ad Age]
You’re Hired!
Omnicom promotes Alex Lubar to CEO of DDB Worldwide. [release]
Netflix elevates Eunice Kim to chief product officer and Elizabeth Stone to chief technology officer. [Variety]
Nexxen (formerly Tremor International) hires Ben Kaplan as CMO and Ariel Deitz as VP of enterprise sales. [release]
Outbrain names Andrew Furman as US general manager, Erika Longoria as VP of demand partnerships and Jackie Carroll as VP of US agency sales. [release]
