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The Big Story: Seeing YouTube For The First Time

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This week, Alphabet did what investors have been clamoring for: It released YouTube’s revenues, which were $15 billion strong in 2019.

Or maybe “strong” isn’t the right word. By most metrics, a business driving $15 billion in annual revenue is great, but many analysts on Alphabet’s earnings call were surprised that the number wasn’t higher. The AdExchanger team gets into that this week on The Big Story.

And while the release of YouTube (and cloud) revenues made a big splash, senior editor Sarah Sluis points out a figure that Alphabet quietly obscured. In the past, the company split out the traffic acquisition costs (TAC) it pays to publishers on its network.

But in its latest earnings, it blended that figure with the TAC it pays to browsers for search.

“Those are complete apples-to-oranges figures that they’re now going to lump into one fruit bucket,” Sluis says.

We’ll also dive into the Disney Plus membership figures – 26.5 million in Q4. By comparison, Hulu, after 12 years of existence, has a total of 30.4 million users.

A large part of Disney’s success in grabbing subscribers, however, comes from its co-marketing efforts with partners such as Verizon, which gives free Disney Plus access to Unlimited, Fios and 5G home customers. In this case, Verizon shoulders the costs – but those consumers still count as paying Disney Plus subscribers. The real test will happen in a few months, when industry observers expect a culling of SVOD services.

Then we’ll discuss the Great DSP Bake-Off between The Trade Desk and Xandr for the honor of working with Walmart Media Group. The stakes are strangely high for this one. Xandr already has a close relationship with Walmart the advertiser. If The Trade Desk can insinuate itself into Walmart’s business, even if it’ll be pumping demand to Walmart as a publisher, it could mark a weakening of Xandr’s position.

Finally, we’ll look at the embattled mobile SSP Smaato, now on its fourth CEO in less than a year. Smaato might not have the relevance it once did, but gauging its current status provides an interesting look at the state of the mobile app ecosystem, and how much it has evolved in recent years.

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