Netflix Ad Trends, P&G's Ad Spend, A WPP "Rebellion" and More. PLUS Podcast Links to Our Advertising 101 Series With Deborah Wahl (on Large Marketer Budgeting)
Madison and Wall: Saturday Summary for January 25, 2025
Each week on the M&W Podcast, we discuss Madison & Wall’s latest research. Last week we introduced our Advertising 101 series, a multi-part (i.e. every week all year long) tutorial that will explain how the industry really works and why money flows as it does.
The series continues this week with Deborah Wahl, best known from her time as global CMO of General Motors and at McDonalds USA. She's currently a board member of MediaOcean, ActionIQ and many other companies. In episode 19 we discuss how large marketers allocate their resources. It follows on part 1 with Gerry D'Angelo where we discussed how marketers organize themselves and part 2 with Francisco Escobar on the role of marketing procurement (which you can listen to on episodes 17 and 18 of The M&W podcast). It’s now available on Spotify, Apple, or wherever you get your podcasts.
We have also recently launched the Agency Business podcast focused on the business of agencies in collaboration with Olivia Morley’s FusionFront Media. New episodes are available Mondays. In our most recent episode posted last Monday, Olivia and I are joined by Kamran Asghar, CEO and co-founder of Crossmedia USA about independent media agencies. Kamran shares insights into Crossmedia’s journey, its commitment to transparency, and how independent agencies can provide an alternative to holding company networks.
For more current alerts on this podcast and to see our well-informed hot-takes on agency news of the week, sign up to our free Agency Business companion Substack publication here.
Weekly work
In one omnibus note covering the significant volume of news that emerged during the most recent US long weekend (Jan. 17-20) we wrote about The Robinson-Patman Act enforcement’s risks to retail media, commentary on OMC-IPG’s growth forecasts from its proxy statement, Kantar Media’s sale with context around the broader measurement industry, WPP’s employee “rebellion” and new TikTok scenarios
We analyzed Netflix’ 4Q24 results alongside our estimates for the size of their advertising business and how many ad-supported subscribers they now have
With one significant piece of news from WPP’s GroupM and new comments from CEO Mark Read to the Financial Times we provided some incremental analysis and commentary on WPP
We aggregated large marketer commentary from this week’s earnings calls (including P&G, Capital One, Amex, Verizon and more) which mostly showed positive trends for advertising, but intimations that P&G would contain its spending growth
We also published a post sponsored by Mutinex which looked both at their marketing mix model and important criteria to consider within that product category
More Context
Netflix’ 4Q24 earnings results, released on Wednesday, were the first from a globally significant media company for the fourth quarter, and recent trends – as well as its forecasts – were very positive. New data on the company’s share of gross additions who choose ad-supported subscriptions paired with our estimates on churn allow us to calculate the total number of ad-supported subscribers in the US and around the world, as well as estimate the company’s total ad revenue.
Importantly for the rest of the media industry, Netflix’ guidance for spending on content is higher for 2025 relative to 2024. To the extent that the rest of the industry tries to hold the line on total content spend – likely, in the face of declining advertising and limited growth opportunities for content licensing or affiliate revenues – it’s very likely that Netflix will continue to grow its share of content consumption.
This trend gets amplified as Netflix realizes its pricing power: with the increases the company is pushing through paired with limited growth in total spending by consumers on video services, Netflix will get a growing “share of wallet” at the expense of traditional distributors, further limiting traditional distributors’ willingness to increase spending with their traditional suppliers.