Advertising Sustainability – Page 3

Narrative: Advertising Sustainability

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eMarketer Says Cord Cutting to Accelerate, TV Ad Spend Growth to Slow (Sep 13, 2017)

Analyst firm eMarketer has some new numbers out on cord cutting and the impact it will have on traditional TV ad spending. Specifically, it says that later this year there will be over 22 million cord cutting households in the US, up about 5.5 million from 2016, while TV ad spending growth will slow down meaningfully, though it’s still projecting growth over the next few years. I’m in agreement with the broad trend described by eMarketer around cord-cutting: my own analysis has consistently shown accelerating cord cutting behavior, though at a rather slower rate than eMarketer is projecting – far closer to 2 million in the past year than the over 5 million eMarketer is suggesting by the end of this year. On ad spending, I’m also in agreement that growth will slow, but I think it will turn negative soon (it was already negative for the major TV companies over the past year, according to my own data gathering, thanks in part to last year’s strong election-related spending). I think a decline in the traditional TV ad business is inevitable at this point in the coming years, and the results will begin to be felt as traditional TV companies start to reduce spending to bring costs in line, which in turn will have significant effects on the overall industry.

via eMarketer

Industry

LinkedIn Launches Audience Network for Syndicating Sponsored Content (Sep 6, 2017)

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Advertising

Advertising Sustainability

Facebook is Criticized for Claiming to Reach More People than Census Shows in US (Sep 6, 2017)

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Facebook

Verizon Kicks off New Loyalty Program, Requires Access to Usage Data (Sep 5, 2017)

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Verizon

WhatsApp Tests App For Businesses, Says Will Begin Charging Them Soon (Sep 5, 2017)

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Advertising Sustainability

★ Roku Files to Go Public, Loses Money, Sees Ads as Core of Future Business Model (Sep 1, 2017)

Roku today made public its S-1 filing with the SEC as the first step towards a long-awaited IPO. I’ve been tweeting charts and nuggets from the filing for the last couple of hours in this thread, but I’ll provide a brief summary here. The long and the short of it is that Roku is growing at a decent clip, is currently unprofitable with little sign of that changing, and is in the midst of a big shift in its business model. Whereas for most of its history selling its streaming boxes has been its core revenue stream, it’s recently added a platform licensing business, but that’s not actually where its new revenue streams are coming from. Rather, it licenses its platform very cheaply and monetizes usage by taking a cut of certain subscriptions sold through its platform and serving up ads. It’s the latter which is a surprisingly important part of its business model (though there have been signs of this shift) and which is a major focus of much of the text in the S-1 filing. Last year, this advertising and subscription revenue share was nearly $50 million out of its $400 million in total revenue, and half of its platform revenue, and that accounted for essentially all of its growth in 2016. In that sense, though Roku on paper looks like principally a hardware company, it’s in some ways more like a Facebook or a Google – a company that collects millions of data points on its customers (18TB of uncompressed data per day) and will use that to target advertising. In that sense, Roku is an unusual player in the streaming space, given how many modern streaming services eschew advertising, but sees itself as a key beneficiary of the move of TV advertising dollars from traditional channels to streaming. This is going to be a fascinating IPO to watch and I’ll have plenty more analysis on Roku in the next few days.

via Roku Form S-1 (SEC)