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Exclusive: The Trade Desk's Media-Quality Product, SP500+, Puts Publishers at the Center 🔒
Source: Adweek
February 13th, 2024
Summary: Sellers and Publishers 500+ (SP500+) helps buyers target media partners and environments, rather than audiences. Buyers can use the new interface to access 500 premium publishers such as ABC, The Wall Street Journal, and Spotify, which elevates these publishers. The tool, now in beta testing, is part of The Trade Desk's Kokai solutions suite, which helps advertisers utilize AI to run campaigns. The Trade Desk is positioning SP500+ as a much more transparent media-buying alternative to Google’s Performance Max and Meta’s Advantage+, which are both AI-powered black boxes that give buyers little control over where they’re running ads in return for high performance. The idea is to give advertisers the ability to more easily target users across specific premium publishers, which removes a lot of the operational burden and planning required to set up a private marketplace deal.
SP500+ is separate from OpenPath, which enables buyers to access publishers directly without a supply-side platform (SSP). Publishers don’t need to be part of OpenPath to be part of SP500+. This week, news surfaced that OpenPath is being extended to CTV media owners 🔒, including Cox Media Group and Vizio, which have started selling their inventory on the platform. Others are in negotiations to follow. OpenPath made waves when it launched in 2022 because it was seen as cutting out SSPs at a time when it appeared that DSPs and SSPs were launching products that effectively disintermediated each other. For example, SSPs Magnite released ClearLine and PubMatic launched Activate, which both cut out DSPs.
Opinion: We get it, they’re going for a play on the S&P 500. But when we see SP500+, all we can think of is this:
SP500+ is not groundbreaking. Running ads on specific sites is something we’ve always been able to do using private deals, site lists, etc. That said, SP500+ brings inventory and publishers into the spotlight of campaign execution, which is a bit of a departure from programmatic’s traditional focus on audience-based buying. SP500+ is essentially The Trade Desk’s version of an inventory curation tool. Which, given everything that’s changing, is a smart play.
Here are our takeaways:
1. PMax and Meta’s Advantage+ are kicking ass. The Trade Desk needs to offer an alternative in order to compete.
2. The Trade Desk has always been very vocal about the importance of audience-based buying. So the launch of SP500+ signals that even they see the writing on the wall – cookies and other signals are going away – and realize they need to shift their position.
3. When a company with the size and influence of The Trade Desk pivots like this, we must take note. The Trade Desk is telling us that they know UID 2.0 and other alternative IDs won’t quite cut it. Addressability is declining – we all need to wrap our heads around that – and we need to start adjusting how we do things (planning, buying, measuring).
4. What’s old is new again. Contextual, modeling, panels, A/B tests, and inventory-based buying. Let’s dust off the cobwebs and get comfy with it!
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Q4 Earnings
Pinterest (👎): Q4 revenue was up 12% to $981M, missing estimates. Monthly active users were up 11% to 498M, beating expectations. Lower Q1 guidance sent shares 28% lower before rebounding on news of a Google integration that will allow Google buyers to access Pinterest inventory in order to increase demand.
Perion (👎): Q4 revenue was up 12% to $234.2M for Undertone’s parent company, beating estimates. Full-year revenue was up 16% to $743.2M. Q4 retail media revenue up 196% to $20.2M. Perion expects its Hivestack acquisition to help deliver strong growth, but its low 2024 guidance 🔒 sent shares lower more than 20%.
Criteo (👍): Q4 revenue was flat at $566M, beating estimates. Full-year 2023 revenue was down 3% to $1.95B. Cost-cutting boosted Q4 profit by 287% to $62M; 2023 profit was up 402% to $55M. Cookie deprecation will deliver a $30-$40M revenue hit in H2, with more losses in 2025. Investors shrugged: Shares rose more than 20%.
Disney (👍): Quarterly earnings were flat at $23.55B, missing estimates. Cost-cutting should save Disney about $7.5B by the end of FY 2024; Disney predicts earnings to increase 20% YoY. Disney+ lost 1.5M subscribers, but streaming losses narrowed and average revenue per user grew. Shares rose 7%.
Fox (👎): Quarterly revenue was down 8% to $4.2B, beating estimates. Ad revenue was down 20% to $2B. Tubi is now America's most-watched free TV and movie streaming service, Fox says. Shares fell as much as 13% before a slight rebound.
Digital Turbine (👎): Quarterly revenue was down 12% to $142.6M, missing expectations. DT cited weaker US device upgrade rates and temporary platform consolidation as headwinds. Net income swung from $4.1M a year ago to a $14.1M loss in Q3. Shares fell 25%.
LiveRamp (🤷): Quarterly revenue was up 10% to $174M, beating estimates. Net income swung to a positive $14M, compared to a $30M loss a year ago, driven by cloud-based integrations and a better macroeconomic environment. The sale of clean room specialist Habu closed Jan. 31. Lower guidance 🔒 sent shares lower as much as 12%.
Publicis (👍): Q4 revenue was up 5.7% to $3.79B, beating estimates. 2023 growth was 6.3% to $14.04B, the strongest of all major agency holding companies to date. Publicis, which credits its creative, media, and tech chops for its success, predicts 2024 growth of 4%-5%. Shares rose by a few percentage points.
IPG (👎): Q4 revenue was up 1.7% $2.59B, beating estimates. 2023 was down 0.1% to $9.4B, hurt by lower spending by tech clients and its digital agencies’ underperformance. The agency holding company predicts 2024 growth of 1%-2%. In comparison, Publicis and Omnicom predict 2024 growth of 3.5%-5%. Shares fell by about 5%.
Opinion: This week’s earnings were a mixed bag. On the one hand, most companies beat their revenue estimates, but many 2024 forecasts underwhelmed, dragging down share prices. All of those layoffs from the past year were painful, but the companies that were able to most effectively cut costs seem to be reaping the benefits.
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Other Notable Headlines
Walmart might buy Vizio to win the fight over cheap TVs - Walmart could buy Vizo for $2B, according to news reports, in a deal that could give the retailer a significant data and advertising play. If this acquisition goes through, Walmart could score loads of customer data amassed by Vizio’s smart TV platform and revenue from selling connected TV ads. Advertising is a big area of focus for Walmart. Its retail advertising arm, Walmart Connect, is a higher-margin business, generating about $3B in sales last year. Although Vizio is known for its TVs, its Platform+ business unit, which includes ads, had $156.2M in Q3 revenue, with ad sales growing 27% at a 60% margin. Between Vizio and its private-label Onn brand, Walmart would control about 22% of the US TV market. If the deal goes through, it would be scary news for competitors such as Amazon, Roku, Samsung, and LG. Vizio shares closed nearly 24% higher on the news.
 Disney to take $1.5 billion stake in Epic Games, work with Fortnite maker on new content - This investment is Disney's biggest foray into gaming. Disney will be able to work with Fortnite studio to develop new games and an "entertainment universe," where consumers can engage with content and characters from Disney, Star Wars, Pixar, Marvel, and other franchises. If things go well, we could see Disney buying Epic Games outright. Disney also launched "Disney's Magic Words" this week, an AI-driven contextual advertising tool that helps companies match their commercials to movie or TV series scenes. The tool, offered for Disney+ and Hulu advertising, will analyze scenes and create metadata that can be used by advertisers to connect "to the emotions of the consumer, at an audience level.” Disney is on a roll!
TikTok’s attempt to stall DMA antitrust rules rejected by EU court - TikTok is trying to fight being designated as a "gatekeeper" under the EU's Digital Markets Act (DMA), which goes into effect in three weeks. Gatekeepers, which are the largest tech platforms that provide critical digital services by connecting large user bases to a significant number of businesses, are subject to additional regulations to maintain competition. Apple, Microsoft, Amazon, Google, Meta, and China’s ByteDance, which owns TikTok, have been designated as gatekeepers and will have to comply with the DMA. Yesterday, the European Commission announced that Apple’s iMessage and Microsoft’s Bing, Edge, and Microsoft Advertising would not be considered gatekeepers. However, Microsoft’s LinkedIn and Windows operating system would be classified as gatekeepers, as well as Apple’s App Store, iOS operating system, and Safari browser.
Meta, TikTok take EU to court over online content rulebook - Meanwhile, TikTok and Meta are also fighting back against the fees they're being forced to pay to bankroll the Digital Services Act, the EU's content moderation law. The fee is based on companies' annual profit, and some argue Meta and Google will pay a disproportionately higher fee while others with lower net income like X or Pinterest may not have to pay anything. Meta says its bill is nearly $12M. EU regulators have said they would need about $48M in 2024 for enforcement. The DSA is meant to force the companies to rein in any illegal or harmful content that appears on their platforms.
Shopify Is Launching a Tool That Buys Meta and Google Ads 🔒- Shopify's new Shop Campaigns program will purchase Meta and Google ads for its merchants to help drive traffic to Shopify's web and Shop app storefronts. Shopify merchants can simply choose their desired cost per acquisition and Shopify will serve ads on Google and Meta to help them find new customers. Thrive Cosmetics and Caraway have acquired more than 1M customers using Shop Campaigns, according to Shopify. Depending on adoption of Shop Campaigns, Shopify could become one of the largest ad spenders on Meta and Google.
Google’s wrangling of third-party cookies is getting lost in transition 🔒- Third-party cookie deprecation may have officially entered a state of limbo. Between the IAB Tech Lab's scathing report last week and concerns raised by the UK's antitrust watchdog, many are increasingly wondering if Google's timeline to withdraw support for cookies this week will happen. A major point of contention is whether the Privacy Sandbox proposals reinforce the dominance of Google's ad ecosystem. It's unclear when exactly the UK’s Competition and Markets Authority will make any final decisions on whether Google has satisfied its concerns. Until then, the industry may be in a holding pattern. In other Google news, the company has officially retired the name Bard for its generative AI tech as it moves into its “Gemini Era.” With the rebrand, Google is also making Gemini available on the web, app, and new markets including Asia-Pacific. Now let us never speak of Bard again.
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Other Notable Headlines (That You Should Know About Too)
Paramount Global to lay off 800 employees after record Super Bowl ad revenue and ratings - The job cuts will impact around 800 employees, or roughly 3% of Paramount Global's workforce.
DoubleVerify Says Classifying MFA Means Considering Shades Of Gray - DV allows advertisers to categorize MFA sites in tiers based on a high, medium, or low rate of MFA characteristics.
LinkedIn Launches Media Planning API For Agency Partners - Agencies will be able to directly tap into LinkedIn's data to get information on demographics, job roles, industries, and online behaviors.
Amazon Sued Over Ads In Prime Video - The class-action complaint filed by an Amazon Prime subscriber argues that he already paid for a year's worth of ad-free Prime Video when he renewed his subscription in June 2023.
FreeWheel Introduces The Beeswax Inventory Desk - The service aims to help match buyer demand with premium video ad inventory supply. Another curation tool!
Super Bowl overtime nets CBS nearly $60M in extra ad money - The big game went to overtime and CBS sold five to seven extra contingency ad slots at a slight discount beforehand, netting an extra $60M. That's on top of the estimated $635M in standard commercial time revenue.
More importantly, Taylor Swift was happy.
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