Retail Media's 1Q Growth (Walmart), Content Spend Vs. Viewing (Disney, Comcast, Netflix, YouTube, etc.), Principal Media Trading and Agency-Country Trends (Dentsu, Globant and More)

Madison and Wall: Saturday Summary for May 18, 2024

Principal Media was in the headlines this week as the main US-based marketer trade association, the ANA, published a long-awaited report on the topic for its members.   As a key source of growth for Publicis and Omnicom in particular, and a key use of budget by many of the world’s largest marketers, it’s an important topic for everyone to understand.    In my note providing additional color and a broader list of different types of principal-based media business models I reinforce the idea that marketers opting into these programs are effectively conveying that many of them ultimately prefer bundles of discounted services with less-transparent, less-selective and lower cost media to alternatives.

With Dentsu and Globant reporting their results this week, I provided some illustrations of contrasting growth trends and also compiled some country-specific trends in the agency world.  I estimated growth among the holding companies, at least in markets around the world including the US, UK, China, Germany, France and Canada.  The business is generally improved in these markets during 1Q24 although some are still in decline.

Next, building on Nielsen’s release of a new version of “The Gauge” (including national TV viewing shares by media owners across linear and connected TV), I applied estimates of domestic content costs to calculate the spend that major network owners (Disney, NBCU, Warner Bros Discovery, Paramount) as well as streamers and digital platforms (including Netflix and YouTube) incur to drive viewing.   Essentially the data validates prior assertions I’ve made regarding the relationship between content spend and audience share.

Finally, with Walmart reporting its first quarter results, I estimated retail and commerce media ad revenues across the US industry for the calendar first quarter.  On gains exceeding 20% during the quarter, we can see how momentum continues to hold up at teens levels within this segment of the industry for a while yet to come.