Better Ads, Not More
AI-enabled advertising may not expand the overall size of the digital ad market, writes Eric Seufert at Mobile Dev Memo.
Instead, it could reduce ad loads on pages. It’s more likely that better targeting through AI could drive up prices for high-performing ads, Seufert says. And publishers will be incentivized to maximize revenue from high-performing inventory by making the remaining ad slots on the page more attention-grabbing.
The result, according to Seufert, would be “a new equilibrium price point for advertising with the overall market size not expanding dramatically.”
However, one way AI could expand the ad market is by bringing more SMBs – and their customers, who tend to be under-targeted by larger brands – into the digital fold.
Often-hyped use cases for AI tools include automating creative generation and optimizing bidding strategies. But big brands already have the capacity to iterate on creative and do hands-on optimization, Seufert says. SMBs don’t, so they will benefit the most.
Plus, AI optimization is fueled by ecommerce activity and in-app conversions, Seufert adds. So there’s untapped potential in SMBs who possess offline conversion data.
The Preemptening
Disney and ABC might have reinstated “Jimmy Kimmel Live!” on Tuesday night. But on Nexstar- and Sinclair-owned affiliate channels, where the program was preempted for “news programming,” the blackout is ongoing.
And like any blackout, it has not been going smoothly.
Protests are breaking out near station locations, local advertisers are pulling their spots, and employees are venting their frustrations online. (Choice tidbit from that last link: Apparently, Nexstar forgot to pull the ABC promos announcing Kimmel’s return, prompting even more confusion from viewers.)
So how long will this standoff play out? Morningstar analyst Matt Dolgin told Variety that the financial impact from lost ad revenue will be “negligible” for all three parties, even if Nexstar and Sinclair boycott Kimmel for the next twelve months.
That being said, as media reporter Paul Farhi writes, most network affiliates are only allowed by their contracts to preempt network shows a limited number of times before they face penalties or even cancellation.
In the meantime, even more of Nexstar’s and Sinclair’s customers have fled to the waiting arms of online streaming media. At over 14 million views and counting, Kimmel’s comeback monologue is already the official YouTube account’s most-watched video of the year.
The YouTube views are probably not good news for Disney+ and Hulu, either, which, according to one anonymous source, may have lost over a million streaming subscribers over the weekend.
Making Marketplace Moves
Finally, some good news for publishers.
Microsoft is in the early stages of building an AI marketplace, called the Publisher Content Marketplace (PCM), that would ensure fair compensation for publishers selling their content to AI tech.
The program will initially be launched as a pilot with a few select publishers, Axios reports. Microsoft’s Copilot assistant will be the marketplace’s first AI buyer.
This development could mark a shift in how publishers and AI companies conduct business. To date, only a few large publishers have struck deals with AI companies. But a more dynamic marketplace could make it easier to support a pay-per-use model and bring smaller publishers into the fold. “The media industry is desperate for a tech company to get into the marketplace business” in order to truly establish a two-sided marketplace, according to Axios.
The PCM could be the push that other tech companies (cough, Google, cough) need to take their own steps toward meaningful publisher deals.
We can hope, at least.
But Wait! There’s More!
Inside FCC Chair Brendan Carr’s rise in the conservative movement and his strategy for combating what he sees as liberal bias in national media. [NYT]
Instagram has officially grown to three billion monthly active users. [TechCrunch]
Proof that Silicon Valley isn’t beating the cult allegations: Billionaire investor Peter Thiel has started giving lectures about how he thinks AI regulation will empower the antichrist and could usher in the apocalypse. [WSJ]
YouTube is pulling back on some of its recommendation pop-ups. [The Verge]
Here’s an idea: Why doesn’t Disney just pull its live sports from Nexstar and Sinclair in retaliation for the Kimmel kerfuffle? [Awful Announcing]
Senators Elizabeth Warren and Bernie Sanders are not jazzed about ESPN’s proposed deals with the NFL and MLB, which may affect competition in sports streaming. [Front Office Sports]
Creative fail, viral win: A Toyota RAV4 overlay ad that appeared to run over Philadelphia Phillies centerfielder Harrison Bader is being shared on social media. [post]
You’re Hired!
Xerox names Darren Cassidy as CMO. [Adweek]
Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
