In this week’s Week in Review: Amazon’s ad sales growth slows down significantly, OpenAP unveils the next stage of its project, and the IAB sunsets VPAID. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.
Amazon’s Ad Sales Growth Sees Significant Slow Down
Amazon brought in $2.7 billion in ad sales in Q1 this year, representing roughly 36 percent year-on-year growth. While the growth rate is impressive, it marks a considerable slow down from 2018 – during the first quarter of 2018, the company reported 132 percent year-on-year growth in its ad business. And while it certainly couldn’t be expected to continue growing at that same pace for long, 36 percent growth is below some expectations – researcher eMarketer has previously forecast Amazon’s ad revenues to double over the course of 2018.
Analysts questioned the slowdown in the earnings call, and Amazon’s chief financial officer Brian Oslavsky claimed that the true growth rate of the ad business was higher than 36 percent (ad sales are reported under the “other” category in Amazon’s financials, and while they make up the bulk of this category, it does include other Amazon businesses as well).
OpenAP Unveils New TV Ad Marketplace
OpenAP, an alliance of TV companies including Viacom, Fox Corp and NBCUniversal, announced this week it plans to launch a new marketplace for selling ads across the members’ linear and digital TV inventory. OpenAP was founded back in 2016 with a view to making it easier for advertisers to target TV audiences by enabling cross-broadcaster audience targeting with standardised data sets, as well as independent measurement. Previously though, advertisers had to complete transactions with each individual broadcaster outside of OpenAP’s system, but with the new marketplace, this will no longer be the case.
The news followed shortly after WarnerMedia’s announcement last week that it is quitting the coalition. “As our company has transformed, our advanced advertising strategy has evolved,” the company said in a statement. “As a result, we are withdrawing from OpenAP. We appreciate what OpenAP has supported to this point in widening the adoption of audience-based buying on television.”
IAB Replaces VPAID with SIMID
The IAB Technology Laboratory this week released SIMID (Secure Interactive Media Interface Definition) for public comment, a specification designed to replace VPAID (Video Player Ad Interface Definition). VPAID, a standard for facilitating interactive video ads, had been adapted by companies to work “outside of the scope of its intended purpose and design” according to the IAB, and the SIMID standard is designed to increase transparency and security, while increasing support for creativity and interactive capabilities.
“With SIMID, Tech Lab is responding to the needs of the evolving video advertising marketplace, creating an interactivity solution that should become a critical part of the video supply chain and will promote transparency and security,” said Dennis Buchheim, SVP and GM at IAB Tech Lab. “Everyone who has relied on VPAID for interactivity should please review SIMID and provide us with feedback, so it can become a critical part of the video supply chain and drive greater transparency across the ecosystem.”
The Week in Tech
Sizmek Lines Up Sale of DMP and DSP to Zeta Global
Sizmek has reportedly agreed terms with marketing technology company Zeta Global to sell its Rocket Fuel data management platform and its demand-side platform (DSP) for around $36 million. The deal follows Sizmek filing for Chapter 11 bankruptcy at the end of last month, as it buckled under the weight of its debt. Sizmek needs to sell its DSP on “an urgent, expedited basis” according to CFO Sascha Wittler, to avoid the “complete collapse” of its value. The Zeta Global deal still needs to be approved, with a hearing scheduled for 28th April.
Brave Browser Launches Revenue Sharing Advertising Platform
Brave browser this week launched its new advertising platform, ‘Brave Ads‘, which lets users opt into seeing ads in exchange for receiving 70 percent of the ad revenue share as a reward for their attention. Users will receive ‘Basic Attention Tokens’, a cryptocurrency created by Brave, in exchange for viewing ads. This can then be donated to the users’s most visited sites, or used to tip content creators. Brave says in the future users will be able to use it to pay for premium content, or redeem it for real-world rewards like restaurant vouchers and gift cards. “With Brave Ads, we are launching a digital ad platform that is the first to protect users’ data rights and to reward them for their attention,” said Brendan Eich, CEO and co-founder of Brave Software.
Outstream Spending Continues to Accelerate as UK Video Ad Revenues Grow by a Third
Total video ad revenues in the UK grew by 33 percent in 2018 according to the Internet Advertising Bureau (IAB), reaching £2.3 billion, and helping total UK digital ad revenues reach £13.44 billion overall. This is largely driven by growing spending on smartphones – 76 percent of all video spend is on smartphones according to the IAB, and almost all of last year’s digital ad spend growth came from mobile advertising. Read the full story on VAN.
Anzu.io Launches Programmatic Trading for In-Game Ads on Consoles
Ad tech company Anzu.io, a platform for ‘blended’ in-game advertising, this week announced the introduction of programmatic display advertising to games consoles and eSports environments. Anzu says its platform enables ads to be seamlessly integrated into the in-game setting to create a more realistic digital world without interrupting the user experience. The company also announced the appointment of Itamar Benedy, previously CEO of Glispa, as its new CEO. “[Anzu] creates a level playing field for the free-to play business model and provides new commercial revenue streams,” said Benedy. “The success of Epic Game’s free-to-play multiplayer, Fortnite, prompted AAA video game studios to consider the new monetisation model seriously and after a year of successful operations in mobile and PC, Anzu is launching its product to enable display ads in console and eSports environments to take advantage of this move.”
IAB Europe Launches Public Comment for its GDPR Transparency & Consent Framework Version 2.0
IAB Europe in partnership with IAB Tech Lab this week announced it is making the Policies and Technical Specifications for v2.0 of the Transparency & Consent Framework (TCF v2.0) available for public comment. The public comment period will last 30 days, until 25th May 2019.
The first iteration of the TCF, launched last year, was designed to enable the digital advertising ecosystem to comply with certain obligations under the GDPR and ePrivacy Directive. IAB Europe says the key changes in the new version are even more transparency and control for consumers, greater control for publishers, and enhanced accommodation of the GDPR’s “legitimate interests” legal basis for processing personal data, including the right to object through the TCF, alongside consent. A new, combined transparency and consent string will consolidate all signals, according to IAB Europe.
Unruly Signs Global Partnership with Formula 1
Video marketplace Unruly this week announced a new global partnership deal with Formula1.com, which will see it become the exclusive supplier of outstream video advertising across the Formula1.com website. “The F1 audience is both enormous and enormously passionate, and that makes it the perfect platform for advertisers to reach a highly engaged audience,” said Unruly COO Kenneth Suh. “We’re thrilled to welcome F1 to Unruly’s family of premium, brand-safe publishers.”
The Week in TV
Comcast Contemplates Selling Hulu Stake
Comcast is in discussions with Disney over the possibility of selling its 30 percent stake in streaming service Hulu, a move which would give Disney complete control of the company. AT&T sold its stake last week, and now Comcast is considering following suit according to CNBC, though it’s by no means clear if a deal will materialise.
ISBA Warns Broadcasters Must Improve Digital Ad Targeting
Phil Smith, director general of British advertising trade body ISBA, told a parliamentary committee this week that UK public-service broadcasters must improve their digital ad targeting capabilities if they are to compete with the tech giants. Smith’s comments came as he and ISBA’s head of TV and video Bobi Carley gave evidence for a House of Lords communications select committee inquiry into public service broadcasting in the age of video on-demand. Smith said that a lot of broadcaster video on-demand (BVOD) advertising still isn’t targeted. “The extent to which they are going to be able to do that is very much to be proven,” he added. “They have some very mighty competition when it comes to the art of personalisation and targeting.”
AT&T Faces More TV Subscriber Losses
US telecoms company AT&T saw greater losses than expected to its TV and wireless services, seeing net losses of 670,000 and 204,000 respectively in Q1. These figures were significantly higher than analyst predictions of 389,000 and 50,000 respectively, according to AdAge. The losses come partly as the business pushes less promotions to maintain and attract customers, focusing instead on reducing its debt after its pricey purchase of Time Warner last year.
The Week in Publishing
UK Parliamentary Committee Accuses YouTube of “Promoting Radicalisation”
The UK’s Home Affairs Select Committee condemned YouTube, Twitter and Facebook for their lack of progress on curbing extremist content and radicalisation on their platforms, with YouTube singled out for specific criticism from committee chair Yvette Cooper. “We recognise you have done some additional work, but we are coming up time and again with so many examples of where you are failing, where you [are] maybe being gamed by extremists or where you are effectively providing a platform for extremism – you are enabling extremism on your platforms,” she said. “Frankly, in the case of YouTube, you are continuing to promote it – you are continuing to pursue and promote radicalisation that, in the end, has hugely damaging consequences to families’ lives and to communities right across the country.”
We’ve raised this problem with @YouTube algorithms at @CommonsHomeAffs repeatedly over last 18 months but every time they act as if it’s a new & impossible problem. Yet it’s at the heart of their business model. Of course they know about it. They are just failing to sort it out pic.twitter.com/yWsTF9fboO
— Yvette Cooper (@YvetteCooperMP) April 24, 2019
Facebook Revenues Soar, but Profits Down as it Prepares for FTC Penalty
Facebook’s share price shot up by almost eight percent this week as the social media giant released another strong quarterly financial statement, with revenues up 26 percent year-on-year to $15.08 billion. The company also reported eight percent year-on-year growth in daily active users, which rose to 1.56 billion. However Facebook’s profits were down by more than 50 percent, as the company set aside $3 billion in anticipation of a fine from the US Federal Trade Commission (FTC) over privacy violations. The fine could be even higher than this though, which Facebook acknowledged saying “the matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome”.
Snap and Twitter Post Strong Q1 Results
Snap and Twitter, two companies which have had mixed fortunes over the past year, both posted strong Q1 financial results this week. Snap saw revenues up 39 percent year-on year to $320 million, with daily active users up two percent to 190 million. Twitter meanwhile saw revenues climb to $787 million, representing 18 percent year-on-year growth, and reported monetisable daily users (the number of users who can see ads) as up 12 percent year on year to 134 million.
While Wall Street was impressed with Twitter though, which saw its share price increase by almost 17 percent after the release, it was much less so with Snap, which saw its share price fall despite beating earnings estimates.
The Week for Agencies
Eighty-Six Percent of European Brands are In-Housing Programmatic Buying
Eighty-six percent of brands in France, Germany, Italy, Spain and the UK which buy ads programmatically have fully or partially bought the function in-house, according to the IAB. Germany had the highest proportion who had in-housed at least part of their programmatic media buying, with 89 percent having done so. The UK meanwhile had the highest proportion fully in-housing their programmatic operations, with 48 percent claiming to have done so.
Unilever Cites Success from Agency Cutbacks
FMCG giant Unilever said this week that it’s reinvested €300 million in marketing over the past two years thanks to efficiency savings its made in agency fees and advertising. The brand has been drastically cutting the number of agencies it works with in recent years, saying that working with a large number of agencies had led to fragmented campaign strategies, and in some cases too much creative being made. But it appears a large portion of these savings are being invested back into marketing.
OMD USA Cuts Executive Roles
Omnicom agency OMD USA has cut a number of executive roles as part of a streamlining effort, AdAge reported this week. The agency is cutting the roles of OMD East President, OMD West President, OMD Midwest President, CMO, and managing director at OMD Create. “It was a model that made sense when the regional offices were more dependent on their origin agencies and local geographies for business,” the agency said in a statement. “However this added layer is no longer consistent with how clients expect agencies to operate today–borderless, frictionless, and fluid,” the agency stated.
GroupM Launches AdVentures Accelerator
WPP’s media investment arm GroupM announced on Monday it is launching a new accelerator programme, AdVentures, which will support three or four US-based startups that it feels are well positioned to solve a specific set of challenges. Some of these challenges, which have been defined by GroupM clients participating in the programme, include:
- Technology-driven customer experience
- Next-generation lifetime value modelling
- Engaging brands with New Yorkers using AI-fuelled dynamic creative
Hires of the Week
Facebook Hires New General Counsel and VP of Global Comms
Facebook this week announced it had hired Jennifer Newstead, a longtime Washington attorney, as its new general counsel. The company also announced it has picked John Pinette, a previous PR chief for Bill Gates, as its new VP of global communications.
Ben Price Joins NBCU to Oversee Client Relationships
NBC Universal has hired Ben Price in the new role of executive VP overseeing sales and client partnerships. Price has previously spent three decades at Discovery, where he ran ad sales up until the acquisition of Scripps Network.
This Week on VAN
How a Dutch Family of Vloggers Built the Netherlands’ Most Wholesome OTT App, read more on VAN
Outstream Spending Continues to Accelerate as UK Video Ad Revenues Grow by a Third, read more on VAN
NVF Connect – What to Expect at BAFTA, London on May 21st, read more on VAN
Ad of the Week
Twinings, From 1706 & Beyond, Terri & Sandy