In this week’s Week in Review: France’s data authority launches an investigation into Criteo, the UK governments scraps its 20 percent VAT on digital publications, and a host of upfronts and events and live sports are cancelled due to growing fears around the spread of coronavirus. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.
Upfronts and Live Sports Cancelled as Coronavirus Fears Grow
A number of broadcasters this week cancelled their live upfronts events over fears of spreading coronavirus, while sports leagues including the Premier League in the UK, the Champion’s League in Europe and the NBA in the US have suspended play.
Disney, Hulu, CBS, NBCUniversal, WarnerMedia, Discovery and Fox are among those which have cancelled their live upfronts events, opting for video presentations as a safer measure. But while digital presentations might be a workable alternative to upfronts for broadcasters, those reliant on sports broadcasts have no such easy alternative, as leagues around the world are suspending play. The NBA announced on Wednesday that it will cease play for at least thirty days before resuming, while the Premier League this morning announced play is suspended until at least 3rd April.
Broadcasters had already been concerned about the possible cancellations or postponements of the Summer 2020 Olympics and UEFA European Championship, and how such moves would affect heir ad revenues. Now sports broadcasters risk losing out on ad revenue from their regular sports broadcasters too, and those which run subscription models may see this revenue dry up.
UK Government Scraps VAT on Digital Publications
The UK Treasury announced in its budget this week that it has scrapped the 20 percent value added tax on ‘e-publications’ (any form of digital newspaper, magazine or book). The tax had been criticised as a ‘tax on reading’, and physical books and newspapers have been free of VAT for decades, as the government has acknowledged the public good of making information more freely available. But while the government paints the change as a win for consumers, it is likely the publishers themselves who will benefit. Many may choose to keep their consumer-facing prices for digital subscriptions the same, and absorb the saving themselves (or they may pass on the savings to consumers, attracting more subscribers as a result).
Abolition of online news tax is a massive victory for News UK, who have been campaigning on this for years.
Brilliant news for finances of Times/FT/Telegraph and anyone with hard paywall. Less clear at moment on what it means for those outlets who ask for contributions…
— Jim Waterson (@jimwaterson) March 11, 2020
Chancellor Rishi Sunak also announced the long-expected ‘Digital Services Tax’, a two percent tax on UK revenues of “large multi-national enterprises with revenue derived from the provision of a social media service, a search engine or an online marketplace to UK users”. The tax is similar to a host of others which have come into force around Europe after the EU failed to agree a unified tax on multinational tech companies. The UK tax will be repealed if an international agreement on taxation of tech companies is reached.
French Privacy Regulator CNIL Launches Investigation into Criteo
France’s data protection authority CNIL this week announced an investigation into French retargeting specialist Criteo, over concerns the ad tech company might have violated the EU’s General Data Protection Regulation (GDPR). Privacy charity Privacy International reported the investigation on Monday, saying the investigation comes in response to a number of complaints it has submitted to numerous data protection authorities. Privacy International did not say exactly which aspects of Criteo’s business were under review, but outlined its general concerns with ad tech companies which it says enable a “surveillance environment where all you moves online are tracked to profile and target you, with little space to contest”.
“Under GDPR, the CNIL has the power to investigate and then, depending on the results, consider an enforcement action,” said Privacy International in a statement. “These actions can range from prohibiting data being used in certain ways to fines for violations of up to four percent of a company’s global revenue or 20 million euros, whichever is higher. But most importantly, we hope that this investigation will lead to broader consideration of the ad tech industry and their practices, setting an example and prompting change in the ecosystem.”
The Week in Tech
Xandr CEO Brian Lesser Steps Down, Shortly After Securing Deals with Disney and AMC
AT&T’s advanced advertising unit Xandr had a busy week, announcing it has secured new deals with Disney and AMC to help monetise their linear channels, followed shortly by the news that CEO Brian Lesser is stepping down.
The company announced on Wednesday that Disney, AMC Networks, and fellow AT&T property WarnerMedia have joined its buying platform Xandr Invest, making their linear TV inventory available to advertisers via the buying tool. Xandr says the self-serve platform will allow advertisers to define a single audience across all participating programmers using either their own first-party data, viewership data from Nielsen, or Xandr Audience Segments. The new additions are a significant coup – Xandr says Invest now reaches 76 percent of all US households, with the potential to reach 208.2mm total viewers, each month.
But the announcement was followed shortly by news of Brian Lesser’s departure. Lesser had reportedly been in the running to head up WarnerMedia as CEO, but decided to leave Xandr after hearing he would not be offered the role. Kirk McDonald, Xandr’s chief business officer, has taken over as interim CEO.
Teads Launches inRead Social
Ad tech company Teads this week unveiled inRead Social, a new product which it says enables advertisers to extend social media campaign creatives to Teads’ roster of publishers. Teads says the tool will give significant extended reach to social campaigns, as it claims to provide 27.3 million incremental unique users beyond Facebook and 79.9 million incremental unique users beyond Instagram. Teads has already run over 100 video campaigns with the new product, which is says achieved average in-view time of nearly eight seconds, and four times higher attention metrics than Facebook or Instagram.
Xandr Invests in First-Party Data Platform InfoSum
InfoSum, a first-party data platform and identity infrastructure provider, this week announced an investment from AT&T’s ad tech arm Xandr. The companies did not disclose the terms of the investment, but the move signals further focus on first-party data on Xandr’s part, as privacy regulations and browsers’ blocking of third-party cookies are driving advertisers and publishers to invest more in their first-party data stores. Prior to the investment from Xandr, the company had raise $8 million in seed funding from backers including Upfront Ventures, Mosaic Ventures and LocalGlobe. Read the full story on VAN.
UK Users Expect to Decrease Time Spent in Walled Garden Environments says Harris Poll/OpenX Research
Research released by The Harris Poll and OpenX this week claims that UK users expect to spend less time in the future on walled garden platforms, and Facebook in particular. Nearly a third of respondents to the study said they spend less time on Facebook now than did they did a year ago, while 26 percent said they expect their usage to decrease in the next 12 months. The research also found that 77 percent of people say they trust articles they see on open web websites more than those they read (or see links to) on Facebook, Instagram or YouTube, and when looking for “high quality” content more people say they turn to the open web first than Facebook, Instagram, and YouTube combined.
TabMo Announces Partnership with VIOOH
Mobile-first advertising company TabMo announced this week it has expanded its digital out-of-home (DOOH) reach via a strategic partnership with VIOOH, a global DOOH marketplace with access to JCDecaux’s inventory. VIOOH says it has access to 25 million impressions per hour in the UK, and a global scale that currently includes the US, Germany, Italy, Belgium, Finland, and the Netherlands.
“Outdoor has long been a vital channel for impactful advertising and, since the shift to digital screens, has grown more quickly than ever,” said Chris Childs, TabMo’s managing director in the UK. “We are seeing more and more mobile advertisers add DOOH to a campaign, while mobile is increasingly incorporated into outdoor advertising. The two channels are a natural fit and partnering with VIOOH enables us to scale up our operations and deliver integrated cross channel campaigns to a wider audience.”
The Week in TV
Mediaset Calls for European Media Consolidation While Weighing Up ProSiebenSat.1 Options
Mediaset this week again called for media consolidation in Europe as it weighs up its options for its stake in German broadcaster ProSiebenSat.1, Reuters reported this week. After disappointing full-year results last week, and an unpopular $500 million deal for dating app company Meet Group, ProSieben’s stock has fallen to its lowest price in ten years. Mediaset CFO Marco Giordani said the company is now consider its options for its 15 percent stake, whether to sell, or to increase its share size while the price is low. But regardless of the company’s decision, Giordani reaffirmed Mediaset’s commitment to build a pan-European media powerhouse, MediaforEurope, a plan which is currently being held up by a legal battle with Vivendi.
Suitors Line Up for US TV Station Operator Tegna
Gray Television, Allen Media Group, and Apollo Global Management have all made offers for US TV station operator Tegna according to various reports this week, all in the region of $8.5 billion. Reuters reported on Friday that Apollo had made an all-cash offer of $20 per share, and followed up on Saturday with reports that Gray had made an equal-value offer, in cash and stock. Deadline then reported on Wednesday that media entrepreneur Byron Allen’s Allen Media Group had made a further $20 per share cash bid for the company.
Tegna is a sizeable prize for whichever (if any) group ends up buying it – the company runs 62 TV stations in 51 US markets, and claims to reach 39 percent of US TV households.
NBCU Quietly Sells its Snapchat Stake
Reports emerged this week that NBCUniversal quietly sold its stake in Snapchat-maker Snap last year. The broadcaster invested $500 million in the company three years ago, framing the move at the time as part of an aggressive push into digital content. But a lot has changed in those three years, with NBCU’s parent company Comcast having acquired UK broadcaster Sky, and NBCUniversal currently focussed on launching its new streaming platform Peacock. An NBCU spokesperson told The Hollywood Reporter that the despite the divestment, NBCU is still committed to its relationship with Snapchat. The spokesperson said NBCU is currently creating more content for Snapchat than ever before, and that it’s still planning to produce four daily shows on Snapchat as part of its 2020 Olympics coverage (assuming the Olympics goes ahead as scheduled).
The Week in Publishing
Twitter Receives $1 Billion Investment, Relieving Pressure on CEO Dorsey
Twitter this week received a $1 billion investment from private equity firm Silver Lake, as part of a pact which relieves pressure on under-fire CEO Jack Dorsey. Activist investor Elliot Management had reportedly been seeking Dorsey’s removal from his position, due to concerns over his running of the company, which has had mixed fortunes over the past few years. But a deal has been reached which sees Dorsey remain CEO for the time being, while Twitter had agreed to appoint three new directors to its board: Elliott Management partner Jesse Cohn, Silver Lake co-CEO and managing partner Egon Durban, and a third, yet to be decided director.
“Twitter serves the public conversation, and our purpose has never been more important. Silver Lake’s investment in Twitter is a strong vote of confidence in our work and our path forward,” said Dorsey in a statement. But some believe the move only temporarily relieves the pressure on Dorsey:
–This “partnership” means total and near-unconditional surrender by @twitter. I challenge anybody to find an activist campaign, levied against a $10b+ company, that has resulted in 3 board seats in 5 business days;
What does this mean (i.e., what happened)?
— Scott Galloway (@profgalloway) March 9, 2020
Washington Post Triples Investment in Zeus
The Washington Post is tripling its investment in its ad network Zeus, Axios reported this week, adding 20 new staff to the team. Through Zeus, the Washington Post licenses its tech to third-party publishers, which is designed to enable new ad formats and revenue optimisation, and then sells ads across these publishers. The project is designed to help publishers better compete with the tech giants, and the Post’s increased investment in the unit suggests it’s proving fruitful.
Reddit Launches Trending Takeovers
Reddit announced a new offering for advertisers this week, ‘Trending Takeovers’, its first trending product for advertisers. Reddit lists trending topics in both its ‘Popular’ feed of content, and in its search bar. Brands will be able to pay to appear in both of these spaces, similar to how brands can pay to appear in Twitter’s ‘Trending’ section. “With millions of searches taking place every day and over one-third of users coming to Reddit’s Popular feed daily, brands can now be part of where cultural trends are born online — Reddit,” said Shariq Rizvi, VP of ads products and engineering at Reddit. “For Reddit, a large focus for 2020 is about maximising new and premium opportunities for brands to authentically engage with Reddit users.”
YouTube Cancels Original Show ‘Impulse’
YouTube has cancelled ‘Impulse’ one of its few remaining original scripted series, as the video platform pulls back on original series. Originals, originally a way to help drive subscriptions to YouTube’s paid service YouTube Premium, seem to have become less of a priority over the past few years – last August the company decided to make its original shows available to all users, supported by ads, and has been scaling back its commissions of new shows. But the rollback has been focussed more on scripted content – YouTube this week announced a new reality series featuring singer Lewis Capaldi, called ‘Birthday Song’.
The Week for Agencies
Holding Group Stocks Continue to be Hit by Coronavirus Fears
Stocks in the major holding companies continued to slide this week as fears grow over how ad spend, as well as the global economy as a whole, will be affected by the coronavirus pandemic. At the time of writing, WPP stock down 22 percent since last Friday, Publicis Groupe was down 20 percent, IPG was down 21 percent, and Omnicom was down 14 percent.
Brands Extend Agency Payment Periods in Attempt to Improve Cash Flow
Brands are asking for longer windows for paying agency fees in an effort to improve their cash flow, a report from the Association of National Advertisers (ANA) reported this week. The ANA’s report found that average payment terms for agency fees increased by an average of 12.4 days between 2013 and 2019, reaching 58.1 days in total, according to Adweek. The study found that while these changes can improve cash flows, they can also damage relationships with vendors, with 38 percent of respondents surveyed by the ANA reporting this to be the case.
Brands Turn to Agencies to Guide In-Housing Efforts
An increasing number of brands are using agencies and consultancies to guide their in-housing efforts, according to research from Bannerflow. Bannerflow’s research found that many brands who have tried in-housing their digital marketing have seen positive results, with 58 percent seeing a positive return on investment. But they aren’t completely cutting out agencies in the process – 34 percent of those surveyed said they used digital transformation agencies and specialist consultancy firms to help guide their efforts.
Hires of the Week
David Cohen Joins IAB as President
Industry trade body the IAB this week announced it has taken on David Cohen as president. Cohen, who most recently served as president, North America for IPG’s Magna, will report to the IAB’s CEO Randall Rothenberg.
Integral Ad Science Names Lisa Nadler as Chief Human Resources Officer
IAS this week hired Lisa Nadler as its new chief human resources officer. Nadler most recently served in the same role at Shutterstock; she will be based in the New York office and will report directly to the CEO, Lisa Utzschneider.
This Week on VAN
Xandr Invests in First-Party Data Platform InfoSum, read more on VAN
The Buy-Side View: Q&A with Quest Nutrition’s Anoo Mehmi, read more on VAN
Why Has Video Been Slow to Take Off in Email Marketing? read more on VAN
The Industry Answers: How is Your Business Being Affected by the Coronavirus Outbreak? read more on VAN
Ad of the Week
Direct Line, Robocop, Saatchi & Saatchi