Top 50 Sellers of Advertising, Independent Agency 3Q24 Trends, Re-Classifying Lessons-Learned From Demise of Newspapers + Read-Throughs From TV Ad Sales Exec. Changes
Madison and Wall: Saturday Summary for October 5, 2024
Every week on the M&W Podcast, Olivia Morley and Brian Wieser discuss Madison & Wall’s latest research and talk listeners through how the advertising business really works. Episode four of Madison & Wall’s M&W Podcast is available now on Spotify, Apple or wherever you get your podcasts.
Weekly Work
And the top 50 advertising sellers are ... We track scores of sellers of advertising on a quarterly basis and have now determined which are the 50 largest based on their U.S.-only advertising revenues. It’s not totally surprising that Google, Meta and Amazon account for more than half of the market (51% in 2023 vs. 23% in 2016), but it might be more surprising to know that the US Postal Service is No. 4, iHeartMedia is No. 14, Pinterest is No. 20 and Uber is No. 44, among other examples. Read more and view our new list of 50 largest advertising sellers, with estimated market shares! –
Independent agency growth update … We also monitor hundreds of independent agencies and agency groups to assess current trends in the industry and look for read-throughs for agency holding companies. We published our 3Q24 update this week, which can be found here.
Classifying advertising (and strategic considerations for traditional media companies) … In the wake of News Corp.-controlled REA’s attempted takeover of Rightmove and KKR’s split-up of Axel Springer, this week we looked at the modern-day classified business (including companies such as Linkedin, Indeed and Zillow) and found some surprising read-throughs for traditional media companies who may want to pay heed to these lessons if they want to look for future growth from otherwise declining revenue streams. A longer summary of major take-aways follows below.
Ad sales executive changes and implications for television-based media companies … Following news of senior executive departures Friday from two of the ten largest TV-focused sellers of advertising at Warner Bros. Discovery and Nexstar, we provided some read-throughs for the broader industry.
Additional Context
Looking at our most extensive piece from this week … Last month, after News Corp-controlled REA Group (a real estate listings publisher based in Australia) attempted to buy its U.K-based peer, RightMove, what caught our attention was that REA now represents around two thirds of its majority-shareholder’s $18 billion enterprise value. At the same time, another major transaction involving classified advertising was also announced, with KKR and Axel Springer (parent company of properties like Bild, Politico, and Business Insider) announcing it would be splitting up into its classifieds and non-classifieds business. Indications that the transaction would value the classifieds business at around 10 billion Euros was a reminder of significant value in that company, too.
Exactly how big is the classifieds business? Didn’t Craigslist ‘kill it,’ and with it, the newspaper industry? As it turns out, over the last two decades the likes of News Corp, REA, Rightmove, Axel Springer and others such as Indeed, Zillow, Auto Trader and LinkedIn, effectively absorbed most of the classifieds market (it wasn’t Craigslist, and it wasn’t really Google, either). In the roll-up of estimates we published of the largest modern-day classifieds advertising providers, we can estimate that the overall business is bigger now than it was 20 years ago. Arguably, the newspaper industry (at least those who failed to invest in their customers’ evolving needs) did themselves in.
There once was a space available for newspapers to better leverage … During the 20th century, classifieds were likely the most significant source of profit for the print newspaper industry. Many news publishers, too focused on near-term profitability and other factors, failed to invest sufficiently enough to retain this revenue as their customer needs evolved. This story continues to play out in other sectors. We can’t help but be reminded that many traditional media companies have had an unfortunate combination of unrealistic expectations for a reversion towards growth, a desire to support profitability at or near historic levels and a lack of willingness to make meaningful capital investments against advertiser preferences that are undergoing significant changes.
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