Madison and Wall: Saturday Summary
For the week ending October 7, 2023: Ad Tech, Agencies, Amazon, Medialink and More
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This past week I published commentary on third quarter trends for ad tech and mid-sized agencies (which, in turn, have read-throughs for the larger holding companies to consider). I also published a critique of some of the estimates I’ve seen in relation to Amazon’s plans to generate revenue from ads on Prime Video. While I think the offer will be very successful for Amazon, expectations might be out-of-whack: I think most of the estimates I’ve seen appear to ignore that Amazon’s 3+% of TV viewing as tracked by Nielsen includes viewing on Prime Video Channels and FreeVee, too. When we add in NFL which is already being monetized and the possibility that those choosing ad-free subscriptions might be the heaviest consumers, the incremental opportunity might only account for something like half of the potential ad inventory that some are assuming.
One other topic I didn’t get a chance to write about this week related to news that could potentially be very important for the advertising industry: Medialink, now part of talent agency UTA, has reportedly bid to purchase the Cannes Lions from its owner Ascential. Although it seems like “inside baseball” for a small number of industry insiders, it quite likely matters.
In the advertising industry, there is no comparable tentpole event to the Cannes Lions – with the possible exception of CES, which is obviously not solely focused on the advertising industry – and thus the desirability of the event to companies focused on marketing to marketers (such as media companies, ad tech companies and other service providers) is incredibly high. Unlike any other event, it concentrates the minds of the agency CEOs and senior leaders at many media companies for a significant part of the year.
Medialink is also important to the industry. Although it started as an independent consultancy, it was actually owned by Ascential between 2017 and 2021. In 2017 when Medialink was bought, I would argue that Medialink was critical in making Cannes what it has become, and in some ways the combination was unsurprising (the role of Medialink is well-described in Ken Auletta’s book Frienemies – essential reading for those looking to understand the part of the business focused on large brand-owners, representing roughly a third of the global advertising industry).
I think that the interest Medialink or anyone else would express in the Lions is understandable. In-person events are becoming increasingly valuable in a world where attention is harder and harder to come by and where work has hybrid characteristics for many. For publishers in particular, events are naturally complementary, and are likely to become increasingly important with every passing year. And as the media industry in particular is becoming increasingly globalized with country-specific media companies continuously losing share – a global event for the media industry will itself become even more important over time.
Unfortunately, few publishers are investing aggressively enough to capitalize on growth opportunities. But they should look at doing so. To the extent that any focused on the advertising industry may look to realize the synergistic possibilities that might exist between their business and the Lions, perhaps other bidders may yet emerge.