In early 2017, I was helping a client, and we were amazed that Facebook revenue was growing so much. I read about the revenue increase in one of the many trades, then I stumbled upon the Facebook earnings call and was hooked.
I was on the edge of my seat listening about the quarter. I was blown away with the amount of data that the company (CEO and CFO) shared on these earnings call. Then I realized that what I read in the trades was very top line and focused on revenue, and there was other great data that they never talked about that I was interested in.
Once I got going I realized there was also a story after I listened to all the calls. So I put it together into a quarterly newsletter, which Adweek will share each quarter in various iterations.
It’s a pithy, curated analysis of public companies with a focus on advertising and now subscriptions. Twenty-nine companies were analyzed and all the financial crap was removed for the first quarter of 2019.
- Whatever it is called these days, CTV/OTT/advance TV is where all the revenue growth is happening across publishers and the advertising ecosystem. These more relevant targeted ads are driving increased revenue and CPMs.
- Most publishers and platforms are seeing more direct-response advertising business in the first quarter of 2019. This is no surprise, as the world is becoming more focused on attribution and outcome.
- Digital impressions are up across the industry—just too easy for these large platforms to add impressions when they need to, which causes an imbalance of supply and demand and brings CPMs down.
- Large TV companies are up single digits at most in advertising revenue, as CPMs increase and ratings continue to slide, though they never mention ratings decrease in these earnings calls. The ratings decrease must catch up at some time. Can CPMs increase forever? Where do marketers go to reach mass audiences in the future?
- All the TV Networks are feeling very good going into upfronts, with scatter pricing up double digits in the first and second quarters.
- 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 on 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. Will these purchases help the long-term outlook for agency business?
- Apple still hates advertising, wants nothing to do with it—but may be forced to as iPhone sales decline. Maybe it will bring back contextual targeting to Apple News+.
- Very hard for ad-tech companies to thrive, being so dependent on Apple, Google and Facebook. The 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 affected Google’s revenue. I hear YouTube’s revenue is $20 billion to $25 billion a year. Wow. That is impressive.
- Rubicon clawbacks 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.
- New York Times and IAC’s Dotdash had a very good first quarter for digital revenue. They take two totally different approaches to driving revenue.
- Lots of talk about Apple News+, although I’m not sure if it’ll be as successful as some publishers think and 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: third-party TVs, Roku player, Roku Channel, operating system, advertising, distribution platform for HBO, Showtime, CBS, etc, etc.
- Amazing that Verizon Media Group generated $1.8 billion in quarterly revenue, although it is definitely shrinking. How did VMG generate so much revenue? Is it a search deal from Google or Bing? DSP revenue? Gross versus net?
- Analysts’ questions seem very superficial and don’t dig deep enough. Three examples: I would ask Netflix about advertising revenue from product placement; Verizon about providing more detail on the $1.8 billion of revenue from the media group; 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?