The Great Ad Spend Shift: Why Meta, Amazon & programmatic are reshaping media

Speaker 0 · 0:01

Hello. Welcome to the Media Unfiltered podcast. As you can see, this week, we are not joined by Ian Whittaker. He is no doubt off doing something marvelous at an event in The UK, and he can't make it today. But we have got a very worthy substitute, which is Sean Wright, who is the chief insights and analytics officer at Guideline. Today, we're going to talk about meta spend and, in fact, spend across the entire ecosystem. Guideline is an incredibly interesting because it's able to take away the SME spend and actually analyze exactly where brands are putting their money. Sean has had a glittering career. He's worked, publisher and brand side, and now he's in the murky world of data and informing publishers, brands, and the middlemen exactly what's going on in the market. So, Sean, obvious start here, but you've just come from NBC or you've been in the seat of of Guideline for a year now. How have you found working from the data side, you know, advising companies what they should and shouldn't be doing? You know, you were you were TV side. They're probably pulling your hair out there. And now you're at the data side showing the facts to all these companies. And, how are you finding it?

Speaker 1 · 1:13

Well, firstly, I think, if it's any indication for folks tuning in on video, we can see how much my hair was pulled out at the time at NBC. I did not mean to make that joke. No. It's fine. It's fine. You know, I've I've come to terms with at certain point, I will just continue to bald. Unfortunately, I don't have your head of hair, so that's certainly a disappointment. But, yeah, I would say, you know, in the the first year ish or so, a few things have kind of emerged as as being interesting on the side of the fence. On you're a lot more free to kind of talk about the data and talk about where the trends are, what you're seeing. Right? As a as a publisher, you always have to be a little guarded in terms of, like, you know, especially from, like, a TV streaming perspective where the dollars are going. So it's a bit freeing, in terms of who you can have conversations with, what you see in the trends. You can kind of be a little more true to what the data is telling you. Now to your point, right, our data tells us a specific story around HoldCo's very large independence. It's not the whole market, but it is a good chunk of it that at least, you know, you could kind of point to different directions and try to get into the trends a little bit more. So that's that's been a really exciting transition for me in terms of just thinking about what I can talk about and who I can talk about it with, which has been pretty cool in my time here.

Speaker 0 · 2:28

And I think I think talking about one of the frustrating parts of it is that you can actually see what's going on with spend and data. And I think a big problem that the entire media ecosystem has is the colossal amount of spend that the top three

Speaker 1 · 2:43

media owners or platforms are taking out the market. I just posted a piece yesterday from Omar Oakes, which was which really highlighted it from The UK market's perspective. You're seeing this crazy growth in ad spend, but it's being eaten up by three companies. So it's a bit of a misnomer seeing this growth. I think, on that chart, if I remember seeing it correctly, the the fifth on that chart, you couldn't even see it relative to the access of the three that you had posted for that exact exact reason. Right? It's like, it's not just that the three are getting it. It's that it is the three, and then it's literally thousands of other publishers fighting for scraps.

Speaker 0 · 3:16

Yeah. Fighting the scraps. And if you have £3 to spend, £3, 3 UK pounds to spend, two of that is going to the, the major platforms. And that's not a good situation for the for the clients, for the publishers, for having a balanced media ecosystem. And if you look at Canada and some of the other markets, they're actually assessing the economic impact of their local economies, what happens when all this money seeps out of the market. So it's not a good situation to be in. And I think one of the frustrations that you've got at the moment is when you're looking at all the meta scandals, there's been a lot in the last eighteen months to two years. I know they've had scandals prior to that, but there's been a particular focus on it now. And what I'm trying to do, I'm trying to use your data to see what brands are doing. I understand that SMEs don't understand a lot of this, what's going on, and they need to target local communities. So I get why they're, spending on these platforms. But for brands, they're seeing this moral dilemma, and they're still growing their spend. You know, I posted recently that, again, using your data, looking at the last three years, Meta has able to push through these scandals and yet continue to grow within major clients. What have you seen over the last, you know, three to five years? What's your view on that? And do you see it changing in the next couple of years?

Speaker 1 · 4:39

Not not, not to kind of, weigh one side of the bet that you have, versus the other. I know that you're, favoring of of this might be the watershed moment. But at least terms of what we can see from our data is it seems like a lot of the status quo. It's kind of two two points to that. Is one, you know, we took a look at kind of the meta scandals literally going back to 2009, where we looked at our ad spend, the historic trend. We looked at earnings, and we want to see, like, hey. Does does any of this slow down every time from, you know, the very first scandals to more recently with the lawsuit in California? Essentially, no. Right? It kind of to your point, it continues to power through, revenue, kind of channeling Ian since he's not here. We'll talk a little bit about earnings. But, basically, in the quarter after these these scandals hit, revenue is still up on average 21%. And then when you look at our own data, you know, you look at ad ad spend or ad revenue specific on those, like, big agencies, it still holds at at 17%, basically, through and through from, you know, '20, 2009 to kind of present. Now what is interesting that I would highlight is is we are seeing a slowdown in our spend. And so then it begs the question to your point of, like, what are brands making the decision on? What I would actually highlight and what my hypothesis is is when you actually look a little bit at when we started to see see a slowdown in our data, it was really around the time that Meta really pushed for their, like, AI everything tools, whether it's, you know, placing a campaign, doing ads, mixing in flight. And the interesting thing, right, is that we start to see that diverge from some of the earnings that they talk about in terms terms of, you know, ad revenue up 21%, and we're seeing slowdown. So what I think is happening is is maybe the scandals are gonna be kind of the the last nail in the coffin, the straw that broke, the horse's back, whatever metaphor you want. But what I actually think is is also at play is a lot of these AI tools are driving up costs, not necessarily giving the return on ad spend that a lot of these big brands expected to see from Meta, and that might be the cause of slowdown. Because a lot of these big brands, right, they have very sophisticated operations in terms of buying ads, optimizing in flight, and Meta's tools out of the box before the whole AI thing was actually pretty pretty good. Right? But what we're hearing anecdotally from some of the bigger brands versus SMB is it's like, well, we've added on these layers of complexity. It's not necessarily giving us more juice for our squeeze. This feels like we're just throwing money at something that we can't really understand because it's a black box versus the S and Ps, anecdotally for what we've heard, seem to love it. Mhmm. Because it's like, I can literally just point click, enter a prompt, and my ad runs, and I'm done. And, yes, it costs me a little bit more, but I am one of I am the same person who does our new business outreach, our marketing, and, like, our product stuff, right, versus at these big operations, that might be, you know, a person a team of 20. So that is some of the diverging that we're seeing, in our data, especially of late, right, in the last quarter. But, basically, Meta continues to outperform the market in every single one of the places where we look, whether it's, you know, you mentioned this a little bit in your in your LinkedIn post too. Right? But you look at Australia, you look at, you know, The UK, US, it's typically, you know, four to eight points higher from a percent percentage growth than the overall market. So clearly, there is still money flowing there from an agency perspective. It's just slowly slowing down.

Speaker 0 · 8:05

Yeah. It's interesting that you mentioned Australia because it's actually down 1.6%. So it's a minus figure, but it's a bit of a misnomer because the whole market was down. So it actually outperformed the market. Exactly. So it looks like a real positive point. And I know I've got a bias with this. I know I set up that question poorly. It should be from a sort of negative perspective, but I'm pretty passionate about this subject, and I think that comes through with my with my with my narrative. But you mentioned a couple of things there. The SMBs that I talk to a lot don't know that, the platforms cook the books in terms of their their measurement platforms. They don't know. It's not independently and pretty much rigorously sort of put together with with independent oversight. They have no idea, so they believe the stats they get. And why wouldn't they? Right? They they don't know what we know in terms of how marketing works. And then you you also talk about, like, major brands have very sophisticated measurement systems. They do know. Right? And they should they should also know a bit better. And I think what's interesting about these AI tools, it's not just the tools that they're providing them. It's actually the lack also of customer service in just came from New Zealand, for example. They have two employees in that market. So they're not even servicing large clients with humans. You need to spend an awful lot of money to get that. Do you think that's an opportunity for other media owners to actually work directly with clients

Speaker 1 · 9:27

in place where where Meta are just not doing that now? Yeah. I mean, for sure. Right? I think it's part of an opportunity. I do I do maybe not worry is the right word, but I I kind of get a lot of the publishers' press right now that they're under immense pressure from the markets to say, you need to be more profitable. You need to increase your revenue. Needs to be more profitable? No. No. No. Other other publishers. Yes. So, like yeah. No. Meta is doing just fine. Although there is some concern around how much money they're throwing towards CapEx, which is a a separate conversation, which is just like an eye popping figure. It's like all of the infrastructure built in The United States in the past, like, hundred years, and then it's like a few data centers, and you kinda weigh them. And it's, like, it's about the same, and you're, like, this is wild. Yeah. But yeah. So I think I think it is certainly an opportunity. The challenge that I am seeing is there's this push for profitability. And so a lot of the the multinational publishers that could fill the space and and should, right, either from a local market, human touch, are being asked to make cuts across the board in order to kind of maintain those levels of profitability that you see from, like, the Metas, the Googles. Right? It's this race to the bottom of, like, how much value can you extract at the bare minimum of costs. And, like, historically, publishers haven't operated in the space. Right? They they would historically spend a lot of money on content to get you to watch, to get excited, and content costs money. And so then trying to service that content, all of that, right, it kind of adds in. And so, like, it's a different business model, but there's an expectation that they are somehow supposed to be the same, which I think is a separate issue Yeah. Because it also robs us of, like, very good content. It robs us of of, like, this I don't wanna sound nostalgic. Right? But, like, that that glory days of, like, you know, golden TV error of, you know, kind of these these movies that punch through that you're seeing less and less of, which is a separate separate issue.

Speaker 0 · 11:17

I I totally agree. And and the imagery and Ian has mentioned this before, but the the the the optics of cost cutting doesn't look good for brands. It doesn't put faith in your products, and this is the wrong time to be doing that. They need to invest in not only you're mentioning the content side of things, but also the frameworks, the measurement systems, the feedback loops to compete with the platforms. They need to be like the platforms. They need to be make it easy to buy. They need to control that. They need to have the feedback loops in place. We can criticize the platforms all all we like for the societal damage and all the rest of it and for having these black boxes, But they're highly effective, and TV needs to not just TV, but all media needs to act like them in order to take back spend. And and the cost cutting now, it doesn't sound it's it's very short term focused, and I'm super surprised that we're here we're seeing too much of that from the TV ecosystem. It's it's looking at

Speaker 1 · 12:14

I was just gonna jump on the the cost cutting thing. Right? Because I think that that's an interesting piece because there's also this element where the traditional publishers are moving towards DSPs to try to transact programmatically because it's simple, it's easy. Right? But it it adds, in some ways, extra cost because for every DSP to list or for every publisher to list their their inventory on there, Yeah. What used to be a dollar that they would get from a, you know, you know, direct sale, now might be 75¢, 80¢, 82¢. But it's the shift where, like, everyone is moving that way. You know, look at look at our data and kind of globally, it might have been from, like, a streaming perspective. We'll just focus in on that. If you go back a couple of years, streaming collectively was 82%, you know, direct sold and very little of it was programmatic. By the end of this year, it's likely, globally, forty sixty. In The US, it's probably closer to fifty fifty, in terms of of leaning programmatic. And so it's this huge shift towards, like, okay. Well, we'll just enable our inventory. People can buy it when they want. But to your point, it it gives up control. It lessens the ability to kind of monetize, but it also means that when you do monetize, you're also just making less money. So it's this this kind of onward cycle. And then the problem too is, like, if you're on a a DSP as a buyer, I can see what you're priced, and I can see what everyone else is priced. And if I'm under pressure as a brand to be like, look, you need to deliver 1.12 on a ROAS perspective. Well, I can get there a lot faster by just throwing some kind of nameless impressions towards something that's $4.80 than whatever might be over here for $18.25. I think I might just do the $4. And even if it's wasted impressions and even if it's not good, if I'm getting enough clicks, I can kind of prove out my return. Easy easy easy enough said and done. So to your point too on the investment from a measurement perspective, right, is like it's this whole closed loop conversation that just seems to be perpetuating and driving the market forward despite things that we know, right, about, like, where those impressions are going or or what it means from a content viewability engagement perspective. Right? These are these are these are both known things, and it's also still happening.

Speaker 0 · 14:29

Now you just hit something there. This is a topic that's completely my jam, which is which is the the tech challenge to TV companies. Now in good faith, most TV networks in different countries, The US, Canada, Australia and others, built these lovely programmatic ecosystems. And they did it for the right reasons. Right? To be simple to buy, to make their inventory accessible to all these buyers out there. And you know what? It just didn't pan out in that. It's the same buyers typically buying, but through this complicated network of technology, which added a tremendous amount of cost and opacity. And what that allowed for was huge margin leakage, which we've seen. Do you know The US is one of the worst for it? So, we saw it with, like, mid rates for, CTV inventory came down from $25 to about $10, in about eighteen months. That's colossal. If TV companies can actually ring fence quality, how it's traded, and and demonstrate that through its measurement and all the rest of it, they actually maintain the supply and the control, and they can maintain pricing. You can prove that in different markets. There is a lot of talk now about removing tech from the middle. I mean, we decimated programmatic display. Let's be honest. You know, we harmonized an impression based on this technology. What are you seeing in the d s let's call it the DSP wars just to start with. Let let's ignore SSPs and the rest of it. But the DSP wars are really heating up. Right? We got all this news from trade test. You've got Amazon on a charger. You've got DV three sixty still lap it's still growing. What what you guys actually track

Speaker 1 · 16:09

DSP spend within these major, Holgo groups and and indies. So what's happening from your perspective? Yeah. It's a good question. So I I would say there's there's kind of two two ways we track it is we could either see it first flow through, like, a agency trade desk and then ultimately onto a DSP. Or in many cases, we could say it kind of bid directly through the DSP down to also even understanding, like, how much of this is coming through a private marketplace, a PMP, or, like, pure open market. Right? So we get Yeah. Really good insight in places where, like, historically, to your point, have been, you know, not to repeat it, but a black box. Right? Something very hard to see. And so it's interesting. Right? If we look at our global data, there are essentially four players that capture or used to capture around 75% of market share and are now about 85% market share. And those are Google, primarily DV three sixty, Trade Desk, Yahoo, and Amazon. Yeah. And what's interesting is, globally, if you look at kind of what's happening in our data over the last, say, eighteen months, Amazon went from a distant force under 10% of market share in terms of what we have line of sight into to now just being a hair under 20%. So they are escalating very quickly in the markets. Yeah. But what's interesting is, like, I think the whole narrative is, like, is Trade Desk getting their clock cleaned? And at least in terms of what we can see is is kind of Trade Desk is not moving. It is essentially growing at exactly the market rate. So it is holding on market share for the last, you know, two ish years. But what is losing significantly, again, within this hold co mid market kind of view that we have, is really a lot of those longer tail. So like the MIQs of the world, the TEDs of the world, the StackAdapts have really started to kind of lose market share. And to your point, my guess is that this is less of a function of of anything about the product itself and more about agency dynamics of kind of finding the right partners to build those relationships, to kind of set up the right deals, and kind of then establish a more seamless way of working between these DSPs. And it's a lot harder to do that if you're chasing 50 long tail DSPs to do a couple bids here based on what your clients want, etcetera. So we are seeing that shift, and we are definitely seeing Amazon growing leaps and bounds globally. And again, diverging a bit because The US market, I would actually put into a separate box relative to what we're seeing globally.

Speaker 0 · 18:35

Yeah. So Amazon sorry. In The US, you're looking at a 100 plus DSPs. Right? And then if you compare it to The UK, there's actually quite a few in The UK. You're still looking at around about 50, let's say. But they're all cons all the markets are consolidating. You know? And I've seen your data. It it's consistent throughout even though The US is a is an outlier because you have strange DSPs that operate in weird pharma verticals, for example. You just don't have that in other markets. It is a fairly American thing to have anything pharma related for sure. It is. But this whole narrative, because they're growing in importance and and size, the thought that TV must go through them I I just think is is absolutely incorrect Right? If you look at Reddit, for example, they launched their own they launched their own DSP They're doing just fine And I think t I think television needs to control the narrative They need to control the conversation with brands, sell directly, and and also control the fees. So they need to they need to trade directly as much as they can. I believe they need all this tech, and I think this tech is causing them problems because, like I said, it's creating supply and it's creating supply of questionable content. And as you said, you know what? Price determines the success particularly on RoHS and ROI. And if your inventory is compared to lower price medium and and they believe it's still delivering the same, guess what? You'll go cheaper. So Amazon are basically eating everyone's lunch because they're going to agencies and offering it for less. Right? And it's the only way to buy Amazon, isn't it? So that's that's working really, really well. You said, you said something really interesting there about about Trade Desk. You know, there's been lots of news from major Holdcos come out about it. Why are the major Holdcos talking about Trade Desk now and sort of giving them a bit of a hard time and press? What's happening there? I'm trying to read between the lines, but I'd like I'd like you to illustrate why you think that's going on. Yeah. I would I would maybe, for the the sake of all parties, probably keep it to the lines of what I can read as well. Yeah. But I would kind of highlight,

Speaker 1 · 20:36

what we're hearing, right, is on on one side, you have the agencies saying, the trade desk is not being a good partner. They've historically come in. They've bullied us. They have really high take rates. Basically, they're asking for a lot more money on our inventory. And, you know, that made sense, five years ago when they were the only game in town, but there's now a lot of players. And so you can't throw your market weight around anymore. You are being not transparent of, like, where our bids are going. We don't know exactly what's happening. Right? So we're hearing a little bit of that. And on the flip side, you know, The Trade Desk is kind of throwing back and saying, well, like, you guys are basically scamming off the top. You are kind of putting some stuff in the market that's not really a fair assessment of Trade Desk. This is more of, like, your operational issues. You guys need to figure this out. We've always been the same partner that we've always been. Crazy. And so, like, it is, I mean, it is to be fair, it is pretty I don't think in the ten ish years I've been in media that I've seen it as heated that, like, explicitly that they've just trade up leaked memos to, you know, the trades and been like, here, this is what we're saying internally about trade ads. But they're all doing it. Everyone. They all It's it is wild to say So so Yeah. But to say to say to Trade Desk, and it's clear what's happened prior to that is Amazon's come in and offered cheaper fees. K? Is this just an excuse just to switch DSP and make it public? I mean, at least, you know, anecdotally, yeah. Right? Like, it's probably a lot of excuse of getting out of deals, going different ways Yeah. Parting ways and going to Amazon. Again, in our data, it seems to be despite all of the rhetoric, at least through q one, right, we're Mhmm. Essentially, like, a month and a half behind. Trade Desk is is still at least holding. Now that being said, we do see pretty diverging trends. So, globally, it still seems to be doing well. Let's call it, like, 13% growth for for q one. In The US, though, it has basically come to pretty low single digit growth. So a lot of what we are hearing and seeing might be concentrated also to specific markets. Mhmm. But also from a growth perspective, right, we're not seeing the global growth offsetting the slowing in The US just in terms of, like, weighing the markets, both in terms of what we have line of sight into and to your point on, like, the entire programmatic landscape of The US is just more complicated. There's a lot more dollars flowing through there than elsewhere. Mhmm. So we are seeing some pretty strong diverging trends, but it's it's still not enough to move the needle specific to Trade Desk.

Speaker 0 · 22:57

Okay. So so Trade Desk, just just to just to cap that off, is is pretty flat, you'd say. However, d three sixty and Amazon are growing. So it it kinda looks a bit bad because they should be growing at the same pace if if you're sort of comparing them together. Would you say that? Yeah. It's not like they're actively losing so much as, like, everyone has just started to run faster. Yeah. Fair enough. So one of the things that we reference a lot is looking at, can streaming income or date sales replace lost linear dollars. It hasn't happened. And I actually what's happening a lot is we've we've shifted quite a lot of budget to streaming at the expense of linear despite the fact that linear still in The US delivers something like 89% of all the available ad impressions, yet we've shifted close to 35, 38% of our spend to streaming. But it's not quite offsetting the dollars, and that's that's globally, isn't it? So do you see that? What what's the challenge there? Because because at the moment, TV companies around the world, what they are doing is jacking up the rates for streaming b vod, CTV, whatever you wanna call it, and compensating with discounts on linear. I call it robbing Peter to pay Paul I think it's a very short term strategy I think because what's happened actually is linear hasn't declined in the way that it was predicted ten fifteen years ago it just hasn't it's still enormous and hugely valuable I think TV companies should blend them and sell audiences personally. And then, obviously, they need to figure out how to apply the data in the same way to to digital as they can do to to to linear. What's what's happening there from your side? What are you seeing? What are what are you seeing from the different markets? Because obviously, The US is obviously gonna be different to to Europe. What what what are you seeing from the major spending groups that you guys represent?

Speaker 1 · 24:41

Yeah. So so one, just in terms of near and dear to my heart, kind of from my background, I also agree, not just because of my background, but also the data that there just seems to be brands had kinda, like, jumped ship immediately kind of following COVID of, like, we're moving all of our dollars out of linear, which then you look at, like, where the ad impressions are, the amount of consumption that still happens on, like, an old school set top box is out, like, incredibly high. And, again, not just The US, but, like, globally of all of the different markets. Right? You are seeing kind of cord cutting and shifting, but, like, it's not nearly the rate of where the dollars flowed out of. Right? Like, brands were, like, I need to get out of here. This isn't cool. But, like, there's still so much consumption that's happening on, you know, on on the TV screen for old school linear kind of thing Yeah. That it's it's surprising me to see how fast the move was when you kind of marry up dollars versus consumption.

Speaker 0 · 25:30

Yeah. And so I think Do you know as well do not do not do you know as well sorry. This topic drives me effing crazy, but Yes. Linear is being traded as as cheap as YouTube in some markets. Yeah. That's how that's how how how fashionably it has fallen, which

Speaker 1 · 25:48

is I think it's crazy, by the way. But, anyway, carry on. I mean, that's that's a little bit of why you aren't seeing the one to one of, like, as the dollars leave linear and they're not going over streaming. A lot of it's a pricing pressure. Yeah. You you look at pricing data, which we have live side into on linear. To your point, some of the stuff on, like, cable or, like, you know, the paid TV channels in in The UK. Right? All of it's, like, 4 USD, 5 USD in some cases from, like, an equivalized CPM perspective. Streaming players in those same markets are $22.25 bucks. So for, like, an advertiser, they're like, look, I literally just moved a dollar off of TV. In order for me to just kind of equivalize this, you guys are like five x on this stream. I I'm gonna go to YouTube. And so what we're seeing is actually part of it is that the strategy to try to move you know, the TV companies trying to move people into their streaming services are almost, like, cutting their their nose to spite their face. Because as they're kind of trying to force these shifts, they're also trying to price up in a way that is not really economical for a brand. And they're like, no. I'm just gonna I'll take that same dollar I spent on cable last year, and I'll move it to YouTube for, you know, $4.80, you know, $5. Yeah. And so we are seeing, you know, first and foremost, this pricing dynamics. And it's and it's not just US specific. Right? In The US, we estimate roughly about, 25¢ for every dollar that leaves, the, linear market ultimately ends up being placed back on on streaming. In The UK, it's actually a little bit less. It's, like, 15p for every pound. And then in Canada, it kinda sits right in the middle. It's about, you know, $20.20 cents of of Canadian dollars for every 1 Canadian dollar spent. So there's this kind of recoup problem that they're having. But to your point, I I am I I wouldn't say bullish, but I am hopeful for TV because one of the things that I've I've personally been watching a lot of is the the trade off cost, the cord cutting economics. It used to be that it was a no brainer to cut your your cable subscription, to cut your TV subscription, and just move over to one or two streaming services. But now with even with ad supported in most of these, you know, markets we cover, it's almost synonymous between what you might pay for the top streaming services and what you would just, you know, keep your your TV subscription. And in many countries too, right, there's even more robust free free to air TV Yeah. Than there is in The US. So it's even the the economics of of trading is even more skewed. So again, I'm kind of hopeful given the complexities of, like, now I need to subscribe to eight different services to watch four different shows and at a price point that isn't really economical. I am hopeful that TV can kind of come back and try to to make a little bit of fight. Again, it's over time, it will kind of naturally decay. But I don't think at the rate that people had assumed that, like, TV is over. TV is dead. And we're just we're just not seeing that.

Speaker 0 · 28:44

No. And, The US is obviously a very different market to, US and Canada, different to the rest of the world where you pay for a pay TV service in order to get a linear service, which carries ads. Obviously, those linear services are already available in all those countries for free. It's, you know, it's part of the sort of aerials or mandate if you like. And those those sort of super aggregation deals are occurring. So where I am, I get my TV service from from Telus, for example, and it bundles in all my streaming services. And it's super cheap, and I get all money channels with it as well. So you're right. I'm I'm I'm mindful of that. It's just the bit that you mentioned prior, which was actually the investment in content and ensuring, you know, there's a lot of competition for eyeballs out there. Typically, viewership is pretty solid in terms of the premium stuff, which is streaming to to broadcast. But for broadcast to continue or the the traditional companies, they need to improve the quality of the the content, frankly, because people will go to where there's decent programming that there is no doubt about that. I think Peacock's a good example and I'm working in The Nordics market at the moment. TV four had a very or Swedish market was very early in in, broadband penetration, and they had huge competition from streamers. But TV four, the main commercial broadcaster, is actually the largest streamer in that market today. So and you can see Peacock becoming a really big player as well, you know, once they have time to to catch up. So these things will come around, won't they, Sean? Like like I say, I'm pretty bullish too based on that sort of data that we're seeing. Yeah. For sure. Yeah. I'm I'm very hopeful that that this is kind of just maybe the midpoint in the streaming wars. You know, I've I've kind of seen the headlines of, like, the streaming wars are dead. Amazon and Netflix have won. But I think we're actually just at, like, a

Speaker 1 · 30:23

midpoint because Mhmm. A lot of companies are just starting to figure out their own models, both in terms of, like, content costs, revenue that I think I think we're very much still in play in terms of figuring out what this looks like for the next couple years.

Speaker 0 · 30:36

Yeah. Yeah. I totally agree. But those who keep saying it's over are incentivized probably to say that, and, it's all absolute nonsense. So you have a particular launch, actually, which is really interesting. In in The US and Canada, you actually monitor digital CPMs, which is really interesting because you can actually see what people are paying for format based on platforms as well, and you can you can really break it down in a in a granular fashion. I use that data myself to see what prices and what people are actually paying for. I also I'm really interested to see if people are paying more for social media because of just the sheer increase in demand. Because social, actually, in a lot of cases, isn't increasing in viewership. Right? You know, look at Facebook, for example, on Meta. They grew, what, just under 4%, but they grew sales by 22%. So they're probably growing that by price increases, and you can actually see that with your data. Now you've got the CPM data in The UK. We love doing this, but are you seeing any differences between the sort of the North American market, the the two core ones, Canada and The US and The UK, when you can actually now see this granular spend data? Yeah. Here's here's where I would say there there's some kind of interesting nuance, you know, currency exchanges and all of that. But what's fascinating is is for these kind of,

Speaker 1 · 31:47

cycling to the top of of our conversation, right, the big three, it's almost as though they are line priced kind of globally. There's very little variability in terms of of what we're seeing in the CPMs. Right? The the CPMs that we're seeing for, like, Facebook in The US or Canada or The UK are all in that, like, and 50¢ to, like, $5 range Yeah. With very little kind of variability over time. But when we kind of zoom out from just the digital players and get more into, like, the the local nuance, I would actually say that, like, the most fascinating thing that I've seen in the data so far is is how underpriced streaming is in The UK relative to their other competitors in other in other countries. So if we think about, like, not that Peacock isn't international. Right? But, like, Peacock is still primarily a US service Yeah. Relative to what they're getting from a CPM perspective in The US versus, like, a ITDx, right, there's there's definitely room for The UK publishers to grow from a if we're looking at kind of country comparisons on on a Yeah. On a streaming basis. And that's actually one place where we've seen an interesting divergence in terms of, like, uniqueness, whereas, like, The US and Canadian markets have kind of trended pretty pretty similar in terms of pricing across our different ad formats. But The UK, I would say that that kind of stands out in terms of of there's some opportunity to grow in terms of of pricing, or they could keep it low and be ultra competitive. It's up up to them. But if we are trying to do these, like, intermarket comparisons, the The UK specific publishers seems like there's there's a bit more of a ceiling compared to, you know, The US specific folks or the Canadian specific folks that I thought was particularly interesting. And, again, it makes sense if you think about how the agencies interact. Right? Like, these big multi multinational digital players like a Facebook, Meta, you know, they operate globally, and they have kind of a a massive singular business model. So it makes sense that, like, there isn't that much variability by country. Whereas a lot of these more unique publishers that are country specific do have to kind of operate and and more so figure out what works for them within each of the countries we can see.

Speaker 0 · 33:54

And then looking at the actual, like, some of the interesting things that these companies are offering, you know, like in stream and then you've got creative stuff. Where where's the where's the biggest price hike that you're seeing in that all in that in that entire digital space when you can look at the actual digital CPMs that you're seeing? Yeah. I would actually say the, flip it. Instead of price hike, I would say that the probably the fastest decliner that we've seen has been, you know, video OTT CPMs.

Speaker 1 · 34:20

That has kind of gone from, being a very strong CPM. Again, let's talk, you know, by market, it varies, but anywhere from, like, 25 to 30 equivalent. That has basically come down almost 40% in the last eighteen months. And a little bit of what we talked about. Right? A lot of that is shifting programmatically, so there's this race to bottom. There's a lot more ad publish or, you know, former SVODs that are now saying we're offering advertising. So you've seen this huge influx Yeah. Of inventory. So it's the kind of classic supply and demand, but that's an area where we've just seen CPMs tank. And what's fascinating is, like, if you look at a chart of all of our countries, there's almost this, like, downward line from an average CPM perspective in digital solely because of that phenomenon. There's just so much of our of our spend that we can see that sits in that, like, video streaming OTT product that is kind of bringing the collective markets down. Yeah. For those kind of two, you know, two considerations, right, is is the influx of ad inventory, so more demand or more supply. And also for the folks coming into the market, you know, Amazon aggressively came into the market kind of at a lower price premium than some of the other players, so they kind of were able to drive the market down. And then the shift to programmatic is also just kind of moving the price points down as well. So it's actually creating this downward pressure that we're seeing in The UK, Canada, and The US.

Speaker 0 · 35:45

Now when you say OTT ad enabled, you're talking about CTV including long tail. Correct?

Speaker 1 · 35:52

Yes. I would say, you know, OTT would probably be anything that would really kind of flow through from, like, a streaming app perspective. Net of, like, I open up YouTube, and I watch kind of classic YouTube

Speaker 0 · 36:04

shorts on a TV set. So what I'd argue there is that it's almost a false narrative that we're increasing supply because not all supply is the same. And that that's the problem with the, the the the ad tech ecosystem is that it doesn't discern between the two. And, and then you end up you end up competing on price. And you can't compete with long tail fast and b VOD. It's gonna have a different price point.

Speaker 1 · 36:28

Yeah. And also be highly programmatically enabled. Right? You're talking, you know, b VODs fast are all 85% of the total inventories transacted programmatically. Absolutely. Absolutely. We can see in our data. So it's it's all just a volume play.

Speaker 0 · 36:44

Yeah. And biddable too, which is, you know, what I say to TV companies, that is the death of your business if you do if you move biddable for your for your inventory. Look. We've, we've covered a lot here. It's been an absolutely fab fabulous conversation. And as Ian Ian would say, this is definitely not investment advice. Sean, thank you very much for joining me. Thanks for listening. Thanks for listening. Have a good one.