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Roku Makes Data Available to Buyers Using The Trade Desk (NewFronts)
Source: Next TV
April 30th, 2024
Summary: Customers of The Trade Desk, the industry's largest independent demand-side platform (DSP), will be able to target Roku's audiences and buy Roku inventory through private deals. In one use case, advertisers will be able to use Roku's automated content recognition data (ACR) to identify and suppress the households that have seen their linear TV ads, reducing waste for advertisers while improving the ad experience for viewers. Roku has long offered this capability to advertisers buying directly through Roku, but this is the first time it will be available through an outside ad stack.
Roku made the announcement ahead of its NewFront presentation, where it also unveiled a deal with iSpot that will make the vendor Roku's preferred partner for reach and frequency, ad exposure, and outcomes measurement. iSpot will use Roku's audience and behavioral data to augment its measurement and integrate Roku's Advertising Watermark to verify ad authenticity and reduce spoofing.
Opinion: The Trade Desk partnership does not bode well for Roku’s DSP, OneView, which is a Trade Desk competitor. Clearly OneView has not generated enough demand to justify Roku not monetizing its ad assets elsewhere.
This does bode well for marketers, who are sick and tired of being forced to buy through the litany of walled garden ad platforms and would prefer to access as much data and inventory as possible through a single, preferred DSP.
Of course, this bodes well for the DSPs that are making a legitimate run at being a marketer’s single, preferred DSP (e.g., The Trade Desk, DV360, Yahoo, etc.).
What does this tell us about the market? The DSP business is hard. Margins are thin, competition is fierce, and mass scale is the name of the game. For any publisher (not named Google or Amazon) trying to appease their financial overlords (whether that’s private equity or public markets) while running a DSP, it’s becoming harder to justify the long-term upside of restricting your data and inventory to your own platform vs. the immediate revenue bump that comes with making your data and inventory available everywhere. This is even proving difficult for a top-tier CTV publisher like Roku, who theoretically should have tremendous leverage over buyers.
Immediate revenue is tangible, and in the current environment, it’s dictating decision-making.
“Our data and inventory is so unique and special that one day we’ll hopefully be able to steal enough DSP market share from The Trade Desk and Google” is not tangible, and cannot dictate decision-making any longer.
DSP consolidation is upon us…
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Q1 earnings!
Meta (🤷): Q1 revenue was up 27% to $36.45B, beating estimates. Ad impressions were up 20%, and average price per ad was up 6%. But increasing AI expenses and soft Q2 guidance sent shares down as much as 16%.
Alphabet (👍): Q1 revenue was up 15% to $80.5B, beating estimates. YouTube ad revenue was up 21% to $8.1B, beating estimates, and search grew as well. Meanwhile, Google’s ‘network’ business (offsite monetization via GAM and DV360) shrunk a bit. The company will offer shareholders a dividend for the first time in June. Shares rose 13% in after-hours trading.
Amazon (👍): Q1 revenue was up 13% to $143.3B, beating estimates. Advertising revenue was up 24% to $11.8B, growing faster than retail or cloud computing. This is the first earnings report since Prime Video started running ads. Amazon has laid off 27K employees, helping triple profit. Shares ticked up 3% in after-hours trading.
Microsoft (👍): Q1 revenue was up 17% to $61.86B, beating estimates. The company says AI demand is outpacing capacity and cloud growth is accelerating. Q2 guidance missed expectations. Shares rose 5% in extended trading before declining.
Snap (👍): Q1 revenue was up 21% to $1.19B, beating estimates. The platform attributed revenue growth to its ad platform improvements and demand for its direct-response ad solutions. Q2 revenue beat estimates. Shares surged 28%.
Roku (🤷): Q1 revenue was up 19% to $882M, beating estimates. The streaming platform added 1.6M active accounts, reaching 81.6M. Roku warned that seasonal H2 spending will likely flatten out. Shares rose 8% in after-hours trading before declining.
Pinterest (👍): Q1 revenue was up 23% to $740M, beating estimates. That's its fastest growth since 2021, driven by shoppable ads and AI. Monthly active users were up 12% to 518M. Q2 guidance topped expectations. Shares soared 18% in after-hours trading.
Viant (👍): Q1 revenue was up 28%, beating estimates, driven by CTV, which grew 50% YoY. Streaming audio also had a record quarter. It's the third consecutive quarter that Viant's YoY growth has topped 20%. Shares rose 15% in after-hours trading.
Comcast (🤷): Q1 revenue was up 1.2% to $30.06B, beating estimates. Broadband customers fell, but Peacock added 3M paid subscribers, reaching 34M. Peacock revenue was up 54% to $1.1B; losses narrowed, peaking in 2023. Shares fell 6%.
Paramount (🤷): Q1 revenue was up 6% to $6.68B, missing estimates. Ad revenue was up 17%, thanks to the Super Bowl. Paramount+ added 3.7M subscribers, reaching 71M. Paramount+ revenue was up 51% and losses narrowed. Shares are volatile as a sale looms and there is a CEO transition.
IPG (👎): Q1 organic revenue was up 1.3%. The agency holding company forecasts full-year organic growth of 1-2%, but warned that the loss of a big client may make it hard to achieve the top end of that target. Shares dipped.
Havas (🤷): Q1 organic revenue was up 2%. The agency holding company, owned by Vivendi, had solid performance in all markets but North America. Vivendi didn't provide full-year guidance for Havas. Vivendi shares dipped 2% before rebounding.
Opinion: These results tell us two things: Google is losing open web market share to competitors like Amazon, The Trade Desk, Viant, and others (perhaps by design), and digital ad spending is indeed on an upswing. Both positive! It’s important to note that many of these year-over-year comparisons are favorable since 2023 was relatively weak (though not as bad as 2022). Still, it's cause for cautious optimism, though we are not out of the woods yet. Some agency holding companies are still struggling. Inflation remains stubborn enough to dim hopes of interest rate cuts in June, and we won't know the true impact of third-party cookie deprecation for another year due to Google's recent delay. Earnings over the next two weeks will paint a clearer picture.
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Why Privacy Sandbox Testers Are Relieved Google Delayed The Cookie’s Demise
Source: AdExchanger
April 26th, 2024
Summary: No one seems shocked nor entirely happy that Google has delayed pulling the plug on third-party cookies for a third time. The companies most intimately involved with testing Google's Privacy Sandbox proposals, which were collectively designed to replace third-party cookies, say they are nowhere near ready for primetime. And the UK's Competition and Markets Authority (CMA), the antitrust regulator that has oversight of the Sandbox, released a new update stating that Google still faces many unresolved issues, including whether the Sandbox reinforces its dominant market position, who should govern the Sandbox, and potential restrictions on how Google uses its first-data for targeting and measuring ads on its owned-and-operated inventory (Simon Harris has a helpful take on the CMA's report here and here). The timeline seems to be pushed back to Q1 or Q2 2025, which some say will be better than right before the holiday shopping season as originally planned. The delay will give companies more time to test cookieless alternatives, which has been difficult with third-party cookies being deprecated for only 1% of Chrome users. Testing alternatives has also been expensive.
In separate developments, Google announced at its NewFront presentation new programmatic video capabilities 🔒and that its Publisher Advertiser Identity Reconciliation (PAIR) identity tool would be available open source through the IAB Tech Lab. PAIR helps publishers and advertisers securely share their first-party data for campaign activation, targeting, and measurement.
Opinion: Cookies schmookies; we don’t need to keep relitigating the most recent delay.
The PAIR announcement is quite interesting though. This was previously a DV360-only mechanism to allow publishers and advertisers to match their audiences without cookies. With the IAB Tech Lab taking it on as an open-source tool, the assumption is that any company will be able to utilize the technology to enhance their offering in a post-cookie world.
This feels like a Google olive branch to the CMA and the industry at large to make everyone feel okay about cookie deprecation. It ties PAIR to the Privacy Sandbox in spirit; open-source, API-based solutions to solve for marketing use cases once cookies are gone. But Google is going the extra mile with PAIR by turning it over to an independent industry body in the IAB Tech Lab.
We wouldn’t be surprised if the next logical step is Google turning over the Privacy Sandbox APIs to the IAB Tech Lab or some other independent body too in order to get industry buy-in and the official greenlight for cookie deprecation from the CMA...
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Other Notable Headlines
Best Buy and CNET Are Combining Their Ad Inventory 🔒- In what may be an industry first, Best Buy and CNET are innovating a new commerce media model. The two partners will let advertisers buy their collective ad inventory across Best Buy's retail media network and on CNET and track whether the ads drove any sales. Best Buy will also integrate CNET’s independent product reviews across its stores, website, and app. The retailer-publisher mashup could herald future partnerships as retail media sellers look for new ways to reach shoppers across their purchase journeys, especially during the initial research phase, where CNET's tech reviews could be of value. The companies began testing the partnership last year and found that they have an unduplicated reach of more than 50M unique monthly visitors, with an overlap of only 5M. One expert predicts more partnerships where grocery stores might join forces with recipe publishers or pharmacies join forces with health publishers.
These 5 Tech Giants Are Most Likely to Buy TikTok, According to M&A Experts 🔒- If TikTok's China-based owner ByteDance is forced to sell the short-form video platform, it will strip away its enviable content recommendation algorithm. That would force the spinoff entity to rebuild a new one, lowering the company's value. Ongoing antitrust scrutiny would likely prevent Google and Meta from making a run at TikTok, but experts made predictions on which other players could be credible suitors. They include Verizon and AT&T (would gain access to Gen Z), Microsoft (almost bought TikTok in 2020), Oracle (the main cloud vendor for TikTok's US business), Amazon (has capital and recommendation algorithms), or private investors (former Treasury secretary Steven Mnuchin's PE group wants to make a bid). How much is TikTok's scaled audience worth without the algorithm?
The Trade Desk’s OpenPass Adds Rewards As It Pursues Wider Adoption - The OpenPass single sign-on (SSO) solution will integrate with Bonbon, a rewards focused SSO provider that will help publishers grow their first-party data for advertising. Bonbon gives consumers discounts, promotions, and other rewards for registering with their email addresses on publisher sites. Publishers can leverage the integration to offer rewards to users who share their email addresses, which can then be converted into targetable hashed IDs in the form of UID2s, The Trade Desk’s alternative ID. Great way for UID2 to capture additional scale! That said, scale is still going to be a problem for UID2.
Fox, Disney, Warner Will Tap Streaming Sports Venture in TV Upfront - There still isn't a lot out there about the forthcoming sports streaming service announced by Fox, Disney, and Warner. But we do know they’ll use the service to secure more ad dollars during the upcoming upfront season. Peter Distad, a former executive at Apple TV, will lead the new venture as CEO. It's supposed to launch in the fall, although it faces an antitrust lawsuit from Fubo. The service’s price tag hasn't been announced, though it is expected that it will cost more than a standalone regional sports network ($20-$30) and less than a larger premium digital programming package ($75-$80). Live sports are still a big draw for advertisers and audiences and are almost single-handedly responsible for keeping linear TV alive.
MediaMath has signed dozens of SSPs, including former short-changed creditors, after ad tech’s biggest bankruptcy 🔒- Nine months after its Chapter 11 bankruptcy filing, the DSP, now owned by Infillion, has attracted some of its biggest creditors back to the platform. MediaMath has negotiated new contracts with roughly 22 SSPs and 11 ad networks and data providers. Some of the more prominent companies trading on MediaMath include Magnite, PubMatic, TripleLift, and Sonobi. MediaMath has also brought measurement vendors DoubleVerify, Integral Ad Science, and LiveRamp back into the fold. Advertisers have returned too, generating a monthly run rate of about $500K, which reportedly doubled month over month in Q1. Long live the OG DSP MediaMath!
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Other Notable Headlines (That You Should Know About Too)
FCC fines AT&T, Sprint, T-Mobile, and Verizon nearly $200 million for illegally sharing location data - This case dates back to 2019 when the US Federal Communications Commission (FCC) began investigating these carriers.
LUMA Partners Q1 2024 Market Report - Deal dialogue and activity ticked up in Q1, hinting at a possible return to a normalized M&A environment.
Twitch's TikTok-like discovery feed is rolling out to all users - Twitch is the latest app to copy TikTok with a short-form video feed. Users can scroll through to discover new streamers.
New AI Features Reportedly Coming to Safari in iOS 18 - AI will help users easily "erase" portions of a website (like ads?), search key topics, and consolidate page tools.
The CMO Survey - Lots of interesting insights about the state of marketing today, including that marketing budgets as a percentage of company budget clocked in at 10.2% and AI improved sales productivity by 5.1% on average.
X is launching a TV app for videos ‘soon’ - The app's interface looks a lot like YouTube's and will aggregate videos uploaded by X users. We're assuming it's going to be 99.9% brand safe... 🤣🤣🤣
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That's it for this week's newsletter. Drop us a line with any questions / feedback.
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