Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Heads Will Roll
CEO Kirk McDonald is out at GroupM North America, Insider reports.
WPP’s revenue growth tumbled in the US this year, which the company blamed on tech clients curtailing their ad spend. GroupM North America has fared particularly poorly, putting GroupM, agency holdco WPP’s media buying arm, under scrutiny. In recent months, competitor holdcos Omnicom, Publicis and IPG snapped up major clients (Uber, L’Oréal) and pitches (Pfizer).
In a quarter-to-quarter environment where underperformance is not tolerated for long, rumors have swirled that GroupM would soon show McDonald the door.
Prior to joining GroupM in 2020, McDonald had never led a media agency. His work experience spanned ad tech companies Xandr and PubMatic and publishers such as Time, Fortune and CNET. During his tenure at GroupM, he instituted brand safety, data ethics, DEI, responsible journalism and sustainability standards for the agency’s media planning and buying.
McDonald will remain with GroupM through the end of 2023. Mindshare Global CEO Adam Gerhart will shoulder the interim CEO role during the transition, effective immediately.
The Ad-Free 3D Chess Gambit
Meta may have outfoxed EU regulators by launching ad-free versions of Instagram and Facebook, writes Eric Seufert at Mobile Dev Memo.
Now, Meta is perfectly positioned to claim that customers prefer to offer their consent for targeted advertising rather than pay for an ad-free subscription experience, Seufert argues. It’s incredibly likely that very few Europeans will pay to use Meta’s platforms – instead, the vast majority will probably consent to targeted ads to keep using the platforms for free.
Demonstrating a clear market preference for the ad-supported model of social media could give Meta ammunition to fight regulatory efforts saying consumers are harmed by personalized ads, Seufert writes.
And if any users are actually willing to pay for Meta’s services, then the platform stands to earn more from these users’ subscription fees than if it served them targeted ads. Meta’s average revenue per European user was $19.04 in Q3, compared to the $31.79 it would collect per quarter per subscriber.
So despite European regulators’ best efforts, it seems Meta figured out a way to have its cake and eat it, too.
Traffic Jam
Publishers are getting less traffic from search and social. And they can’t rely on news aggregators to fill the gap.
Traffic from news aggregators is down significantly compared to the pandemic era, Digiday reports. Referrals from platforms like SmartNews, Flipboard, Apple News, Google News and Yahoo News dropped from about 20% in 2020 to about 15% in 2023, according to Chartbeat.
Traffic from news aggregators tends to rise when there’s a major national news story trending, and publishers are hoping the referrals will return next year as audiences flock to election coverage.
But attracting eyeballs to local news is trickier. The LA Times’ Kelcie Pegher blames this year’s dip in aggregator traffic on the publication’s shift to local coverage.
Publishers make a lot of trade-offs for the added traffic that aggregators potentially provide. Because audiences access the content on a third-party platform rather than the publisher’s site, the publisher gets less actionable data from these impressions. Publishers also only receive a portion of revenue from ads sold by aggregators.
Now, with the downturn in referrals, some publishers are rethinking these partnerships. “To keep us on the platform,” suggests one publisher, “we’re going to need some aggressive minimum guarantees.”
But Wait, There’s More!
President Joe Biden signs a broad AI executive order. [Washington Post]
CPG retail platform Crisp acquires CPG-focused analytics company Atlas Technology Group. [release]
A document dump in the federal antitrust trial against Google Search reveals the inner workings of Google’s Ads Quality team circa 2008. (h/t Jason Kint) [DOJ]
Twitter’s valuation has plummeted from $44 billion a year ago to $19 billion now under owner Elon Musk. [The Verge]
CEOs and CMOs are more disconnected from each other than ever, a Forrester survey finds. [Wall Street Journal]
