What’s Next?
Nextdoor is an interesting case study for the social media age.
It has a fairly large logged-in user base and lots of access to hyper-local data on business services, consumer demographics and foot traffic.
But its advertising revenue is sluggish, stubbornly stuck in the low hundreds of millions of dollars per year. (Although Nextdoor is a public company, it doesn’t usually disclose specific ad revenue numbers.)
Uber, by comparison, was much later to the ad biz and already has a more than $1 billion dollar annual revenue run rate.
Nextdoor is also reluctant to sign an exclusive “sky bridge”-style data licensing deal with the likes of Google or Amazon.
Social nets like Reddit and Pinterest have made hay of data and advertising deals, which offer large annual checks in exchange for allowing data to be used to train AI models. Reddit, for instance, is getting $60 million a year from Google for that purpose.
Yet “never say never,” Nextdoor CEO Nirav Tolia told Bloomberg during a recent interview regarding possibly signing such a deal down the line.
“But,” he says, “I have a real existential concern that any company that allows its core asset to be surfaced inside another agent is at risk of people not coming to the primary source.”
Getting The Money Upfront
I guess having your ad chief emerge on stage in a suspended bubble during upfronts works for generating ad revenue.
NBCUniversal announced the close of its upfront negotiations cycle on Tuesday, claiming to have achieved its “highest ad sales volume ever” and the largest period for digital sales in the broadcaster’s history.
That includes nearly $1 billion worth of programmatic investments for next year, which is especially notable given that NBCU currently includes sports and live events as part of its programmatic offerings. Meanwhile, just under 60% of investments were transacted against advanced audiences.
Unsurprisingly, upcoming sports content – including the Milan-Cortina Winter Olympics, the 2026 FIFA World Cup, the 50th annual Super Bowl broadcast and the return of the NBA – contributed greatly to NBCU’s increase in sales.
Per NBCU, the sports side of the business experienced a 20% increase in new clients and a 45% year-over-year increase in ad volume. More than one quarter of NBA advertisers will be new to broadcast television this year.
And then, of course, there’s the Peacock streaming service, which represented one-third of NBCU’s upfront commitments this year.
Since NBCU is the first broadcaster to announce its upfront results, it’s hard to tell whether what it’s seeing will be part of a larger trend. But it dispels the notion that recent talk about economic uncertainty will keep advertiser dollars out of TV this season.
The History Books
Kids publishing giant Scholastic is in a tight spot. For five years, its cash reserves have dwindled while revenue has remained flat.
Being a mission-driven book publisher that gives books away isn’t exactly loaded with profit opportunities.
For one, Scholastic has great data – but not for targeting or data sales, because it’s specifically affiliated with young kids.
Scholastic also profits from book sales, but hasn’t turned its IP into reliable new media revenue. It distributes mega-hit series like “Harry Potter” and “The Hunger Games,” but doesn’t share in lucrative film and TV productions.
Other Scholastic titles, including “The Baby-Sitters Club” and “Clifford the Big Red Dog,” were recently adapted for the screen. But, in general, its programs are being smoked by the likes of Peppa Pig, Ms. Rachel and Bluey, which translate digital-native entertainment success into book sales.
Scholastic also hasn’t made the IP pivot, as have Lego and Hasbro, to monetize millennial nostalgia through media franchises.
But now Scholastic is turning to YouTube to modernize its business by launching series that – hopefully – help promote new books and generate some ad revenue, Elianne Friend, VP of digital and distribution at the Scholastic-owned digital studio 9 Story Media, tells The Wall Street Journal.
“We’re [on YouTube],” Friend says, “because the kids and their parents are there.”
But Wait! There’s More
The Trade Desk will join the S&P 500 on Friday. [Investor’s Business Daily]
Meta’s big plans for a successful AI agent will be one that solves “simpler things” than its rivals. [The Information]
Nearly 90% of buyers are using generative AI to create video ads or plan to do so this year. [IAB] Meanwhile, according to a survey by Raptive, placing ads alongside AI-generated content harms consumer trust. [Adweek]
Scott Messer, aka the AdTech Therapist™, on how to define media quality. [AdMonsters]
WeTransfer updates its terms and conditions to include an automatic “royalty-free license” to all the content being transferred. The company insists that it will not use the content to train AI models, but users (particularly creatives) are outraged anyway. [BBC]
Facebook plans to crack down on users who continually share stolen or reposted content. [The Verge]
Good news! According to xAI, Grok is totally fixed and not going to call itself “MechaHitler” anymore. [TechCrunch]
You’re Hired!
WPP hires Baiju Shah as the global CEO of AKQA. [release]
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