Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Trade And Trade-Offs
Tech regulation proponents in the US Senate traveled to Belgium last month, where they discussed their EU counterparts’ relative success “bringing Big Tech to heel,” The Information reports.
Paul Tang, a Dutch parliamentary rep, said Americans test issues in protracted suits, whereas Europeans legislate first.
Another factor, though, is that European data privacy regulations are treated as “human rights” cases but fall under “consumer protection” in America. It’s an important distinction because the American system heavily factors economic growth into the equation.
Tech investors dramatically decreased European outlays. The entire public and private European tech sector (including chip manufacturers, global consultancies and all sorts of other not-really-tech) dropped from a peak of $3.1 trillion two years ago to $2.7 trillion in 2022. Apple, now worth almost $2.8 trillion, possibly surpassed the market cap of all European tech companies combined this year. Microsoft, Amazon and Google are catching up.
Even newer companies like Instacart or Klaviyo, each plagued by down rounds and questions of viability, would be head and shoulders the biggest homegrown European tech companies, aside from semiconductor and chip manufacturers.
Meanwhile, Instacart and Klaviyo both IPO’d last week to nary a stir in the US tech market.
Rolling The DEI
When the Supreme Court overturned affirmative action for college admissions programs in June, companies had to make a choice. They could either maintain their DEI efforts or bow to pressure – and potential lawsuits – from conservative groups targeting race-based preferences for employment, including mandatory requirements for diverse hiring pools.
Amazon and Starbucks, for example, face suits over their diversity requirements for contractors. And it’s likely that a similar suit will land before the Supreme Court regarding private businesses with race-related standards, Gary Kibel, partner at the law firm Davis & Gilbert, tells The Wall Street Journal.
Marketers have mostly stuck with their DEI programs, however, according to the Journal.
But that progress is fragile. Target and Bud Light faced blowback for recent marketing campaigns targeted to LGBTQ+ and younger, more diverse customers. Those big brands ended up backtracking (and pulling related creative) following boycotts and threats of legal challenges.
Even if the SCOTUS affirmative action ruling is never used to directly challenge a business’ DEI program, many CEOs and CFOs are happy to have an excuse to walk back their commitments.
Nothing To Write Home About
The Writers Guild of America suspended its strike after reaching a tentative agreement with the studios.
Hollywood is still at a standstill since the actors remain on strike, but there’s now stronger pressure to get a deal done. And the writers asked for less than the actors want, so the precedent favors the studios in terms of how much they concede to the union, The New York Times reports.
Notably, neither guild apparently makes any claim to a portion of the ad revenue generated by streaming services. The focus is primarily on transitioning the share of subscription and syndication revenue that’s earmarked for writers from linear TV to streaming subscriptions.
The non-involvement of ad revenue in the new contracts will also fuel the secular shift to ad-supported streaming.
It would be sensical for the guilds to demand a cut of revenue per ad served to a program – à la the YouTube rev share. But since the writers and actors are focusing on subscription revenue, the studios have a perverse incentive to sacrifice subscription revenue and push more viewers to ad-supported tiers, where the average revenue per user is higher and the guilds have no share.
But Wait, There’s More!
Seven big brand CMOs on how their children influence their marketing approach. [Ad Age]
Netflix officially shuts down its mail-order DVD service. [The New York Times]
Threads, Meta’s answer to Twitter, is slow-rolling hot-button search terms as it juggles whether it wants to be Twitter. [Bloomberg]
The takeaways from the DOJ’s battle with Google that advertisers really should know. [Digiday]
