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msg Publicly Traded Company Analysis -- Q1 2019

• CTV/OTT/Advance TV whatever it is called these days, this is where all the revenue growth is happening across the publisher and advertising ecosystem -- these more relevant targeted ads are driving increased revenue and CPM’s

• Most publishers and platforms are seeing more Direct Response advertising business in Q1 -- no surprise as the world is becoming more attribution and outcome focused

• Digital impressions are up across the industry -- just too easy for these large platforms to add impressions when the need to, which causes an imbalance of supply and demand and brings CPM’s down

• Large TV companies are up single digits at most in advertising revenue, as CPM’s increase and ratings continue to slide, though they never ever mention ratings decrease in these earnings calls -- the ratings decrease must catch up at some time, can CPM’s increase forever and where do marketers go to reach mass audiences in the future?

• All the TV Networks are feeling very good going into the Upfronts with scatter pricing up double digits in Q1 and Q2

• Agencies never mentioned Facebook, Google, or Amazon in their earnings calls as real threats to the agency business model -- I think that is a disingenuous and naive outlook of the ecosystem. I miss Sir Martin Sorrell of WPP, at least he gave an honest industry overview in his remarks

• Agencies continue to go on buying sprees -- not sure if these purchases help the long term outlook for agency business.

• Apple still hates advertising, wants nothing to do with it, though may be forced to as iphone sales decline, maybe it brings back contextual targeting to Apple News+

• Very hard for ad tech companies to thrive being so dependent on Apple, Google, and Facebook -- most recent example are the changes Google is about to make in Chrome regarding cookies though not as severe as what Apple did last year

• YouTube may have negatively impacted Google's revenue -- I hear YouTube’s revenue is $20-25B a year, wow that is impressive

• Rubicon claw backs from publishers in regards to Sizmek bankruptcy -- another reason to be nervous if you are a publisher today

• All large platforms continue to move and expand to self-serve modules — someone should do a side by side comparison of all self-serve platforms

• NY Times and IAC’s Dotdash had a very good Q1 for digital revenue -- two totally different approaches to driving revenue

• Lots of talk about Apple News+ -- though not sure if it’ll be as successful as some publishers think/hope it will be

• Print continues to decline across the board for both newspapers and magazines

• Privacy and safety resonate throughout the platform calls

• Roku is too confusing: 3rd party TV’s, Roku player, Roku Channel, operating system, advertising, distribution platform for HBO, Showtime CBS, etc, etc.

• Amazed that Verizon Media Group generated $1.8B in quarterly revenue though it is definitely shrinking over the past few years -- not sure exactly how they generated so much revenue? Is it a Search deal from Google/Bing, DSP revenue, Gross vs Net, etc.?

• Not impressed with the analysts questions for the most part, they seem very superficial and they don't dig deep enough. Three examples. I would ask Netflix about advertising revenue from product placement, Verizon about providing more detail on the $1.8B of revenue from the media group, and all the Broadcast networks and Agencies about the consistent TV ratings declines and CPM increases plus where else can they buy a mass audience if not TV in the future?

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