The Refresh: Cannes we move on?

Welcome to The Refresh, a new weekly newsletter from AdTechGod and Marketecture. Every Thursday we’ll bring you the latest advertising news, commentary, and memes.

Breaking News

  • Amazon is disrupting the streaming market. (Yahoo Finance)

  • Epoch Times CFO charged in $67 Million Money Laundering Plot (BBC)

  • Streamers leaning into Shoppable ads (Marketing Brew)

  • The Trade Desk threatens to demonetize Yahoo Video (AdWeek)

  • Sonobi pursues a sales as M&A Heats up (AdWeek)

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The Latest and Greatest

Podcast of the week

Our guest this week is Dave Morgan the Founder and Chairman of Simulmedia. Dave is known for innovation in TV advertising predictive advertising.

The Adtech Guru

Gokul Rajaram was the lead on Google AdSense, the deal champion for buying DoubleClick and head of ad products at Facebook.

Paparo’s Purview

Our dear leader gives his hot takes on the news of the week

Is Disney’s CTV ad rate cut sparking turmoil?

Disney's decision to reduce CPM rates for Disney+ by 10-15% to secure new ad commitments in a challenging upfront market is causing frustration among rivals. This move aims to bolster ad support across its portfolio but risks undermining future pricing efforts. Competitors like NBCUniversal and Warner Bros. Discovery are forced to compete with these lower rates, while Amazon and Netflix struggle to secure favorable CPM rates. As advertisers shift to streaming and digital media, overall TV ad commitments are expected to decline, particularly for cable networks and primetime broadcast, continuing last year's downward trend.

Ari’s view: You would think digital buys would command premium prices given targeting and flexibility so this move is a head-scratcher for me. Either it is reflecting some softness in the market, or is a way to firm up prices in the declining linear market. Or something else.

Profits halved in five tears amid streaming struggles and decline in TV and movies

Over the past five years, major media companies have seen their profitability nearly halve, with EBITDA declining from $37.3 billion in 2018 to $17.2 billion in 2023. Linear TV profits fell from $32.6 billion to $22.9 billion, and studio profits dropped from $4.4 billion to $2.5 billion. Streaming losses soared to $8.3 billion in 2023, despite some companies forecasting future profitability. Additionally, U.S. box-office revenue has decreased from $11.4 billion in 2019 to $8.1 billion in 2023.

Ari’s view: Two things to consider: First, the last five years including 2020, when covid lockdowns one-shotted the movie business. We’re still recovering from that. Second, the investment in catching up to Netflix’s 10-year streaming lead wasn’t cheap. The next five years will be more interesting, I bet.

Netflix’s advertising challenge. It isn’t big enough.

Netflix has explored launching free versions of its streaming service in markets like Europe and Asia to broaden its audience, though no plans exist for the US where it already reaches most potential users. The move aims to address a challenge in creating more ad inventory as Netflix, despite its streaming dominance, remains a minor player in video ad sales. Following a slower ad rollout, Netflix is enhancing efforts with Microsoft's support, eyeing scaling its ad-supported offerings and navigating competition from Amazon and Disney.

Ari’s view: The hardest part of Netflix’s ad strategy has been the consumer. Balancing the pricing between ad-supported and ad-free is especially difficult for this company as the incumbent since they have huge risk in reducing ARPU of existing subs.

Targets Roundel hits bullseye — driving revenues with Strategic diversification and RMN

Target’s ad business, Roundel, generated $1.5 billion in value and grew 20% in 2023, continuing this growth into Q1 2024. Ranked the fourth largest retail network, Roundel is a key revenue stream for Target. At Cannes, Target emphasized the evolution of retail media, leveraging shopper data for advertising. Roundel’s success is attributed to a diversified media mix, with 35% of ad revenue from non-owned platforms. Target's strategic approach includes curating ads rather than flooding its website and app. Recently, Target announced a partnership with Shopify and introduced Roundel Media Studio for self-serve advertising.

Ari’s view: Everyone loves Target.


🇫🇷 Time to move on 🍷

I asked the LinkedIn and the X community if it's time to stop talking about Cannes. The overwhelming response was YES! So, if you're still talking about Cannes, it's time to stop — your obsession is starting to smell like old cheese!

Meme of the Week

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