You’ve Got To Be Bidding Me
A Big Tech platform is being sued by the federal government for allegedly manipulating ad auctions. And this time, it isn’t Google. It’s Amazon.
A lawsuit filed by the Federal Trade Commission (FTC) and 22 state attorneys general on Monday accuses Amazon of making advertisers pay more than necessary for retail media ads purchased in the platform’s second-price auctions.
In a typical second-price auction, the highest bidder is only required to pay one cent more than the second-highest bid.
But, as Digiday points out, in 2019, Amazon added to its second-price auctions a feature called a “soft reserved price” that the FTC alleges was effectively a fake bidder operated by Amazon. This bidder would put forth a bid that was much closer to the winning bidder’s price than the second-highest bid. The result is that the winning bidder ends up paying almost as much as they originally bid, rather than just a cent more than the second-highest bidder.
According to the FTC, by 2024, winning bidders in Amazon auctions were paying nearly their entire bid price about 80% of the time. Over the years, the FTC says this alleged auction manipulation meant advertisers spent tens of billions of dollars more than they should have for Amazon’s retail media placements.
Amazon disputes the allegations. The company claims its auction dynamics resulted in the average winning bid for retail media ads dropping by 50% between 2019 and 2024.
Guess we’ll see how this all plays out in court.
In With The Old, Out With The New
Emphasizing that a brand’s products and messaging are made by and for humans isn’t “something that brands have historically been compelled to spell out so explicitly,” Marketing Brew points out.
But right now, human-centric content is all the hubbub.
The advertising world is “in a cultural moment where it feels like we are not in control,” Megha Parikh, executive strategy director at marketing agency VML tells Marketing Brew. Public opinion of AI is less than favorable at the moment, especially when it comes to data centers. So, as more and more creative content is AI-generated, marketers are starting to emphasize when a human is holding the reins.
Many advertisers are opting for old-fashioned aesthetics, like black-and-white film, and publicizing behind-the-scenes content to show the human labor that goes into ad production.
“The more technology becomes part of our lives,” says Laurie Pressman, VP of the Pantone Color Institute, “the more we revert back to the things that make us human.”
Hold The Ads
Ad-free streaming is getting more popular as people free themselves from the clutches of cable (and cable’s ghastly ad loads).
Premium ad-free plans comprised half of the top 10 streaming subscriptions among people who canceled their pay TV packages earlier this year, according to a recent report from the research firm Antenna. Of those cord-cutters, nearly 14% were subscribed to ad-free Paramount+ one month after walking away from traditional TV. That number was 11.5% for Netflix’s Premium plan and 9.5% for both ad-free Peacock and Netflix’s Standard plan (also ad-free).
While Antenna doesn’t directly establish a causal relationship between pay-TV cancellation and ad-free streaming sign-ups, it estimates 31% of people sign up for a new streaming service within one month of cutting the cord. And it appears ad-free plans are attracting more sign-ups, even as the cost gap widens between ad-free and ad-supported pricing, StreamTV Insider reports.
Many streamers are raising prices for ad-free plans more steeply than ad-supported ones, according to recent research by Ampere Analysis. These streamers want to push more people into ad-supported plans so they can rake in more ad revenue. But many consumers simply like avoiding ads more than they like saving money.
But Wait! There’s More!
WPP reportedly plans to cut 1,000 jobs in the second half of this year. It has already eliminated 11,000 roles since the beginning of 2025. [FT]
Amazon’s Alexa for Shopping AI Assistant can now send personalized notifications about new product launches. [TechCrunch]
After weeks of testing, Mozilla is launching ad blocking for Firefox on iOS. [The Verge]
Apple claims that OpenAI stole its trade secrets. OpenAI sees things differently. [WSJ]
Every major platform has its own system for paying creators. Here’s the breakdown. [Digiday]
The upside to an agency with fewer layers. [Ad Age]
Since advertising isn’t exactly helping local news pay more reporters, the California legislature has passed a bill that provides employment tax credits for hiring journalists. [release]
