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What I Saw Happen -- Q4 2019

Overall -- The race for SCALE continues

  • Users will take GOOD content for free and pay for GREAT content

  • It’s OK to be big, it’s not OK to abuse your big power

  • Great customer experience should come first, then revenue

  • The phone is clearly the remote control of our life

  • TikTok emerges as real competition to the Tech giants

  • SEO is more important than ever

  • The IAB sucks, I am not writing about it anymore, just a waste of time

  • 80% of mobile time spent is on Facebook, Instagram, YouTube, Snapchat, and Twitter -- none of which run or support IAB ad formats

  • Will Facebook and Google both eventually become regulated monopolies?

  • Facebook and Google do an amazing job of compiling perfect data on private lives and then monetizing that data

  • Still a great time for content makers and should continue for the next 3-5 years

  • Disney has the most valuable IP in the world

  • YouTube is the largest TV Network in the world for kids and adults

  • The NFL dominates TV

  • The entertainment streaming wars are upon us, we already had the music streaming wars and next will be the live sports streaming wars

  • If Mark Zuckerberg and Sheryl Sandberg left Facebook tomorrow who would be the new CEO? Tim Cook, Bob Iger or Satya Nadella are my three suggestions.

  • Tech giants should ban microtargeting of political ads on their respective platforms

  • We need new ad products to emerge across all platforms, especially TV

  • When in doubt, go work for yourself, be your own boss

  • Based on Interbrand’s annual Top 100 Global Brands ranking, Facebook fell out of the Top 10 to #14 in 2019. Disney jumping to #10. Apple, Google, and Amazon remained #1, #2, and #3

  • What if Apple removed the Facebook app? Would users move to Android phones?

  • Gmail for business is a productivity destroyer: go back to Microsoft Outlook

  • Hire more analysts, push the data out daily by 8:00 am (including weekends) make sure senior leadership is engaged and let the data and insights drive the business

TV -- Secular decline of linear television ratings though the NFL is still strong

  • $70B TV market will decrease as TV ratings continue to slide and CPM’s can only go up so much

  • US advertisers will spend decreased of 2.9% from 2018

  • Total ad spending at the TV Upfronts increased by 2.4% to $21B in 2019

  • Upfront CPM’s this year are up 10% to 15% compared with last year -- though it goes down from here and will hit $50B in the next 3-5 years

  • US Advertisers to Spend Nearly $7B on Connected TV in 2019

  • TV ratings are down again in Q4, 2019, and for the full year -- click here

  • NFL Viewing is up 6% after 5 Weeks and Thursday Night Football rises 16%

  • Through 10 weeks of the NFL’s regular season, viewership is up 5% over the same period a year ago, maintaining a similar rise in recent weeks.

  • The average Football TV viewership is 15.8 million versus 15 million through 10 regular-season games in 2018.

  • Fox has sold out its Super Bowl LIV commercial inventory. Not a single commercial unit is being held back. Pricing topped out at $5.6M per 30-second spot, a high watermark for the broadcast

  • In the US, about one quarter of all content cost is devoted to sports

  • Google and Facebook do not dominate TV. not even close and never will

  • Amazon is best positioned to gain advertising TV market share

  • Marketers used to build their brand with 30 second TV ads, that is much harder to accomplish today as ratings decline

  • 6 and 15 second ads are quickly replacing the 30 second TV spot

  • I love 6 second videos: best user experience in a world of commercial free TV everywhere

  • TV has sight, sound, and motion but it’s also relaxing and a bit more passive versus the Internet

  • 16 companies will spend $100 billion in content in 2019.

  • Average cost of producing a single episode of a scripted drama is $6 million

  • Disney bans Netflix ads across all its TV networks: the streaming marketing wars start

  • Hulu has the most long term potential in the TV advertising ecosystem

  • Cheddar is launching a political show called Cheddar Capital in early 2020

  • Over 70% of Roku users spend time in its ad supported segment

  • Comcast is rolling out pay-TV and broadband price hikes across the US

  • For those who still have cable tv prices are starting to climb. I think we are entering a world of those who can pay will just pay much more

  • It is a land grab now, get as many subscribers that you can and spend as much as you can for the next 3 to 5 years

Streaming -- The streaming and marketing wars continue as they all try to SCALE

  • Apple, Amazon, Netflix, Disney/Hulu and NBC/Peacock are all competitors now

  • Netflix is hard to drop because it’s been there forever like a good friend who has always been there for you. All other streaming services are easily pausable

  • HBO has a DTC branding problem -- HBO Go, then HBO NOW and soon HBO Max

  • Remember, Netflix has 160M worldwide subscribers

  • Streaming companies are under so much pressure to juice their subscriber numbers that they're giving away access to subscribers for free on a trial basis.

  • Total viewing time by PAID subscribers is the better metric not total subscribers

  • Disney+ and Apple+ each launch with one minor hit each -- Mandalorian for Disney and The Morning Show for Apple

  • Global streaming competition is a marathon not a sprint

  • Disney+ has 10 million subscribers out of the gates impressive but not surprised -- I bet they hit 30+ million in Q1

  • Netflix has not been negatively impacted by the launch of rival streaming services from Disney and Apple

  • DAZN, the sports streaming service, reached 8M subscribers (90% are outside the US)

  • Hulu has come up with a neat way to connect binge-watchers with advertisers. Hulu is using machine learning to predict when it’s subscribers are likely to start binge watching a show and then serve them contextually relevant messages from sponsors that acknowledge the viewer might be there for a while

  • Disney+ at $6.99 is an artificially low price to gain market share

Triopoly -- The emergence of TikTok

  • TikTok has been downloaded more than a billion times since its launch and has may have more monthly users than Twitter or Snapchat

  • TikTok was the third most-downloaded app

  • TikTok is the only app in the top five that isn't owned by Facebook.

  • ByteDance spent $1 billion advertising TikTok in the U.S. in 2018, growing its audience by buying ads on Facebook, Instagram and Snapchat

  • ByteDance has stepped up efforts to separate TikTok from much of its Chinese operations

  • TikTok is more similar to YouTube than Instagram more entertainment than talking to friends TikTok is social entertainment via video

  • No way Quibi does well, no way people will pay for this content, the platform will be DOA

  • Facebook unveiled Facebook News, its latest foray into digital publishing

  • Facebook advertising engine is as strong as it’s ever been

  • Apple will soon launch the bundled digital media subscription, the bundle would include Apple News+, Apple TV+ and Music into one paid service

  • Facebook tried to acquire wearables maker Fitbit

  • Google Maps is the dominant local search tool, followed by Facebook and Yelp

  • 5G smartphones shipped in 2020 will reach 190M devices, 5G subscribers worldwide are expected to hit 2.6B by 2025

Retail -- Online retail continues to grow

  • Online sales grew 19% this holiday season, a very slight increase on last year’s 18% growth

  • Amazon does not care about a profitable business, all they care about is more retail sales through their website. Again, all about the long-term play for Amazon

  • Target is set to roll out its revamped loyalty program, Target Circle, which offers customers birthday rewards, 1% back on in-store purchases

  • Nike just quit listing its products on Amazon, the apparel maker leaves a platform where 3rd-party sellers made $160B in sales last year

  • Amazon is like a Chinese manufacture ripping off content and making what sells well

  • Where is conversational commerce in the US Conversational? -- the intersection of messaging apps and shopping

  • Is Shopify the next competitor to Amazon?

  • Americans are poised to spend $591B in retail ecommerce in 2019

Publishing -- Only a few are thriving

  • Two million people a day listen to The Daily from the NYT

  • I love NerdWallet and the Points Guys: two great business models for publishers of the future

  • IOs 13 will kill location based data for 3rd parties

  • Apple News now being monetized by Verizon/Oath

  • Verizon Media's sale of Tumblr for less than $20M after paying $1.1B for it in 2013

  • Verizon/Aol/Yahoo!/Oath pivots its publishing strategy to focus on commerce

  • Apple News + 200k users paying, very small not a surprise

  • Facebook Audience Network is doing very well for publishers who allow ads to be disruptive like an ad in gameplay

  • Publishers should not allow users to come to website via Safari, send them to Chrome

  • Commerce + subscription + advertising could powerful for the media industry but the integration of content and commerce must be authentic

  • More and more consolidation must and will happen

  • The new BI app is not that good please go back to the old one

  • Only operationally driven, profit focused publisher organizations will thrive long-term

Ad tech -- More consolidation is happening

  • Criteo may be on its last legs as a new CEO comes onboard -- pegged Criteo as a big winner 3 years ago, my they have fallen

  • Lots of small acquisitions: Dataxu by Roku, AdJuster by Double Verify, by Rubicon, OwnerIQ by Inmar and one big one Taboola and Outbrain

  • All ad tech is moving to focus on CTV hence the RUBI and Telaria merger

  • Ignition 1/Net Mining goes under -- more clawbacks will happen

  • Retargeting is like handing out a coupon ad for a pizza to someone already in the line about to buy pizza -- incrementality is needed

  • May be time for many ad tech veterans to move on and find second careers

Podcasts -- Growing but still very small

  • Podcast advertising revenue will be $1B+ in revenue 2021, maybe in 2020

  • Podcasts are still controlled by Apple

  • Google, Amazon and Facebook are not in the podcast picture -- maybe one of these big tech companies are waiting to make an acquisition?

  • Remember, Apple failed at ads and now hates ads all they just care about are the users

  • Only 20% of users skip ads, I was wrong, I thought it was much higher percentage that skipped ads

  • Podcasts are the most intimate of all mediums

  • Very hard to get accurate usage ratings across the Podcast ecosystem -- not good for growth

  • Vox Media now has more than 200 active podcasts that it publishes, up from 75 in January

  • Podcast companies are using new technology to make more money from host-read ads; but some worry about overwhelming their most loyal listeners

  • Pandora has begun to test a new type of advertising format that allows listeners to respond to the ad by speaking aloud

  • Pivot, one of my favorite podcasts, may have jumped the shark, twice a week is probably too much

Agencies/Marketers -- Change continues, attribution is getting harder not easier

  • Note to self: if I ever become a CMO, I will be channel-agnostic, and I’ll bonus all my channel marketing heads based on overall results, not specific results from their respective channels.

  • Attribution way too hard, maybe impossible

  • Marketers want big ideas that differentiate them

  • Agency of the future needs to be creative plus media integrated into one with ROAS the driver

  • Doesn’t make sense for holding companies have operations in 156 different countries. Definitely need a hub in North America, Europe and Asia, less is more

  • CMO of tomorrow needs to continuously defend the upcoming DTC companies who have more data and are more nimble

  • Agency of record and goes away and marketers use may one-off relationships

  • Agencies need business people to start running creative operations injecting business into creative

  • Many DTC advertisers have stopped out using Facebook, they can’t grow the audience anymore and therefore have to move to TV, but TV is still very complicated and expensive not self- serve

  • Consolidation inside the agency continues with WPP leading the way

  • All marketing today is direct response, everything can be measured

  • Reach and frequency is just important as it’s ever been in the industry

  • Best talent wins and agencies are having a significant issues retaining and getting the best talent

  • Agencies still for the most part have client trust issues

  • I find it ridiculously hard to measure the impact of TV advertising across the business

Some merger, acquisition and divestiture predictions

  • Viacom/CBS merger with Discovery -- need more SCALE

  • Apple buys Netflix, Roku, Sonos and Peloton

  • Visa buys SNAP

  • Amazon buys Zillow

  • Verizon sells Aol/Yahoo!/Oath for pennies on the dollar

  • AT&T divests of Direct TV and goes all in on HBO

  • Comcast buys Charter/Spectrum

  • Spotify buys Iheart, turns terrestrial radio to Spotify programmers and goes 100% programmatic

  • Vox, Vice, Refinery29, Group Nine, BuzzFeed, PopSugar and Bustle all eventually merge

  • Pinterest buys Meredith, Hearst Magazines and Wayfair

  • Comcast or Disney buy TTD for its CTV self-serve capabilities

  • Shopify buys Target and Trader Joe’s to more directly compete with Amazon and Wal-Mart

  • Microsoft buys Electronic Arts and Epic Games (Fortnite)

  • Samsung buys Vizio and TCL

  • Uber and Lyft Merge and start to take in car ads

  • Mike Bloomberg buys Twitter and kicks Trump off or shuts down the entire Twitter service

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