Top 20 Global Advertising Sellers’ 3Q24 Growth Trends, RFK Jr.'s Impact On TV News Advertising, Retail Media Data + Comcast’s Cable Networks Divestiture
Madison & Wall: Saturday Summary for Nov. 23, 2024
Each week on the M&W Podcast, we discuss Madison & Wall’s latest research and walk listeners through how the advertising business really works. Episode 12 of the Madison & Wall M&W Podcast is now available on Spotify, Apple, or wherever you get your podcasts.
Weekly Work
We updated our estimates for the growth rate of the world’s 20 largest sellers of advertising outside of China. During 3Q24 we estimate this group of companies posted 14% growth for a fifth consecutive quarter of double-digit growth for this group despite very difficult comparables.
There was a significant amount of news related to e-commerce and retail media this past week, with new data from major retailers and an investor day from Criteo. Major marketers including Nestle and Unilever conveyed expectations for significant increases in their ad spending, too, and undoubtedly retail media will be a major beneficiary.
We wrote about the implications of Comcast selling most of its cable networks business. It’s a very non-strategic choice for Comcast because in a world of scale this weakens the company. However, it might help an eventual acquiror who themselves looks to the business as a source of increasing its own scale.
We also wrote about the implications of RFK Jr.’s pending installation at the Department of Health and Human Services and the consequences on news networks that could follow.
Additional Context
Next year, it won’t be business as usual for the news business. The pending installation of RFK Jr. is potentially a very big deal. As one of the policies he pledged as a presidential candidate related to banning pharmaceutical TV ads, it seems reasonable to assume he would pursue it.
It was somewhat odd that agency stocks were initially negatively impacted when the announcement occurred, as pharmaceutical marketers are notoriously aggressive clients to media agencies, driving buying fees down. But they are also buyers of many services, so the impact on agencies should be negligible, as affirmed during an investor day held by Havas this past week. By contrast, media owners such as TV networks don’t have many other “products” or services to offer the pharma industry. The impact would be particularly pronounced on TV news, depending on how any new policy were enacted.
The simplified math on this is to remember that the pharma sector represents 5% of total ad spend, perhaps 10% of all TV advertising and probably more than 20% of news TV advertising. Considering that many news networks probably don’t even operate with 20% profit margins, the loss of this revenue stream would have a significant impact on their operations.
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