New Source of Amazon RM Revenue/Marketing Spend, Political Ad View Updated + TV Ad Volumes Decline, Even Including CTV
Madison and Wall: Saturday Summary for June 29, 2024
Coming off of a week in Cannes and still in this period of time ahead of holidays and/or elections in the US, Canada, the UK and France it wasn’t a particularly heavy week in terms of news for the advertising industry, but there was some adjacent news of significance.
Most notably came a report in The Information about Amazon creating its own product to compete more directly with Temu and Shein (and probably, ultimately, with TikTok, too). The consequences of this initiative are likely significant for advertising – all to the upside – as I explained in a note on the topic on Thursday. Not only will this initiative probably help Amazon sell more ads, it may catalyze Temu and Shein (among others) to spend more on advertising in response.
Of course, there’s some risk to the whole cross-border advertising business if tariffs go up or if personal exemptions are reduced or if global postal rates change. In a nutshell, politics loom large over this space. Beyond that narrow issue, politics was more generally significant in the US this week because of the presidential debate, of course, but even if the winner of the election isn’t clear quite yet, I pointed out in a note on political advertising how digital media has already won – as 2024 will probably be the first election year with more spending on digital platforms than on television.
Finally, I also provided new analysis on the share of consumer time allocated to viewing TV ads and the share of that time allocated to streaming video vs. linear ads based upon our analysis of Nielsen data, overlayed by data from Antenna and a serious of our own assumptions. As in prior efforts to analyze the data, total share of time spent viewing TV advertising – including those running in linear and streaming environments on a combined basis – continues to fall because of the low ad loads in streaming environments paired with high numbers of ad-free subscribers on the most important services.
At the same time, while the share of ads associated with streaming is growing, it’s still dramatically below the share of ad revenue these properties collect. That can mean a lot of things – such as the possibility that marketers are over-investment or that they value the inventory (rightly or wrongly) more than other kinds of inventory. But either way, awareness of the gap of money and time within an otherwise similar medium is critical to be aware of on an ongoing basis.