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“It’s not a matter of if; it’s a matter of when.”
That’s from Airbnb founder and CEO Brian Chesky on the company’s earnings call last week. He was asked about Airbnb’s view of a potential advertising services business by hotel and online travel analyst Kevin Kopelman.
Airbnb has been a holdout in the headlong rush to capture advertising and data revenue. Marriott, Expedia (including Airbnb competitor Vrbo) and United Airlines have launched their own travel-focused versions of retail media.
“I think it’s almost every marketplace that’s successful has done this,” Chesky acknowledged.
And no wonder. “We definitely think this is easily a $1 billion opportunity,” he said.
But having assuaged investors that Airbnb does intend to someday collect the low-hanging fruit of data-driven advertising, Chesky was also careful to note that it wouldn’t be this year.
“It’s not the most perishable opportunity,” he said. Which is a confusing line that means the ad revenue will be there ripe for the plucking whether it’s in one year or two or more.
“It’s definitely something on the horizon.”
The Great Wal’
Walmart is winning.
That seems like old news. But other department stores, grocers, pharmacies and big-box chains are stumbling. Even bellwethers like Macy’s and Target have struggled to get on top of ecommerce. Albertsons and Kroger were denied a merger and are now embroiled in a suit. Not to mention Walmart’s pharmacy competitors, Walgreens and Duane Reade, locking their products and themselves in growth purgatory.
In retail jargon, ecommerce is a high CapEx business. Which means it operates at a better margin, but requires heavy costs as part of a transition. (Information and software services are CapEx, whereas store employees, rent and product price changes are OpEx investments.)
Walmart still loses money on ecommerce deliveries, reports The Wall Street Journal. But it’s the only traditional retailer nearing the critical threshold where scaled warehouse and delivery systems operate profitably.
Advertising represents a sliver of Walmart’s earnings. But advertising revenue and memberships (which form the backbone of Walmart’s ad ID graph) accounted for almost a third of Walmart’s total operating income in Q3 2023.
Like the humble ant, data-driven advertising might be small, but it carries far more than its own weight.
FTC The Future
Now that the Federal Trade Commission no longer leans Democrat, advertising executives have a bit more breathing room. While enforcement actions might continue, rulemaking likely won’t.
Chairman Andrew Ferguson, the Republican Commissioner promoted by President Trump soon after his inauguration, now leads the FTC in place of Lina Khan.
Ferguson believes policymaking belongs with Congress, not the FTC – a common right-leaning stance – and he had voted against the FTC’s Negative Option Rule, which trade orgs, including the FTC, are actively lobbying against.
Even so, don’t expect the FTC to be too soft on Big Tech this year. Ferguson believes in fairness and transparency for consumers, which is why regulatory experts expect the new FTC Chairman to prioritize cracking down on deceptive business practices and data collection without consent, Digiday reports.
“Commercial fairness might also require more than vague hidden disclosures,” Ferguson wrote in December. “Especially when the loss of privacy is substantial, as is the case with collection of precise location data and its sale to third parties.”
Ferguson also hired Daniel Guarnera to join the agency from the Justice Department’s antitrust division, where he filed lawsuits against both Apple and Google.
But Wait! There’s More
Yahoo News signs up influencers to draw traffic with the promise of shared ad revenue. [Bloomberg]
Wanna find love? The brands are here to help. [Marketing Brew]
Instagram tests a “dislike” button for comments. [TechCrunch]
Apple and Google restore TikTok to app stores. [Adweek]
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