Trade Desk Doubles The Revenue, CTV Drives Earnings
The digital advertising firm Trade Desk reported revenues of $280 million for Q2, representing a growth rate of 101% Y-O-Y. The growth rate is driven by strong growth inConnected TV(CTV). Its revenues were a major piece of the gain. In an earnings call on Monday, Jeff Green, founder, and CEO of The Trade Desk said:
“We have nearly 10,000 CTV advertisers on our platform, up over 50% compared to last year.”
He further added that through the first half of 2021, brands spending more than $1 million in CTV on their platform have already doubled year-over-year. CTV is the fastest-growing channel and growing as a percentage of overall revenue. It is completely driven by customers in the form of content subscriptions. Its supply hit the roof during the pandemic. Green said,
“一件事是我们经常说给广告商t whatever you thought you knew about the scale and reach in CTV six months ago has changed dramatically.”
The advertisers growing demand in the Connected TV space especially for premium ad inventory led to the company’s strong revenues. The shift in the behavior of the advertisers is disrupting the traditional TV buying ads- where brands commit in advance to spend on TV ad inventory even before the commercial releases. There is a paradigm shift of advertisers transitioning to digital TV which offers flexibility and data for ad targeting. The adtech company is acting as a clearinghouse for CTV platforms to funnel ad inventory to digital buyers and is in direct competition with YouTube, Hulu, Roku, and more. Trade Desk is grabbing ad dollars from brands like Mondeléz and Ford. Green also mentioned a food giant brand that shifted a quarter budget of linear TV to CTV.
“We are seeing many brands shift TV budgets to the data-driven precision of CTV.”
On the other hand, Trade Desk is positioning itself as an alternative to the walled gardens and launched the new ad-buying interfaceSolimarrecently. The Trade Desk is trying to develop an open programmatic approach that lets the advertisers access audience ID and export data to their own database. At the same time, walled gardens don’t allow to extract data and restrict data sharing across platforms.
Many broadcast companies are the early adopters of the Unified ID 2.0 (UID2) standard, a replacement for third-party cookies. In recent weeks, as reported by Adweek, Interpublic Group joined the list to support UID2 along with Omnicom Media Group and Publicis Groupe. Green is bullish on consumers’ readiness to exchange data for more information from brands.
称,贸易桌子强调两个关键因素that determine future growth – the rise of CTV and its data policies. It is just the beginning to witness advertisers moving as much as one-quarter of media budgets to CTV to minimize waste.
Trade Desk expects third-quarter revenues of at least $282 million.
At $1.25B Valuation For News Link Recommendations, Outbrain Raises $160M
The New York-based firm, Outbrain, which delivers recommended online links at the bottom of news items,raised $160 millionin its first public offering today, valued at $1.25 billion.
It sold 8 million shares of common stock on Nasdaq for $20 each, and the price surged to $20.99 on the first day of trading before falling down to $20.15 at the end of the day. The stock is traded under the stock symbol “OB.”
Outbrain, started in 2006 and launched with its first publisher in 2008, is a widget that appears at the bottom of media stories, such as those on CNN, and suggests further links to click on.
Some have referred to this as clickbait, but the business claims that it is quite successful, with many users willingly clicking on Outbrain’s recommendations for additional stories.
Advertiserscan add their ads, and Outbrain will split a portion of the revenue with them.
The co-CEO of Outbrain, Yaron Galai, said in an interview –
So much that has changed and evolved, as we started before mobile even existed in a real way. The thing I’m proud of most is the vision for this market has remained remarkably consistent
He added –
And that was to solve two things. First, the user experience for people to help them discover what’s next. And the second is to create a sustainable source of revenue for media owners, for publishers and newspapers
Galai also said that the arrival of mobile was a game-changer for Outbrain. The user experience of a newsfeed on a mobile phone has evolved into a natural sort of experience, with users on social networks and other sites just acclimated to thumbing through a tailored feed of recommendations.
Over the years,Outbrainhas completed five acquisitions. With 900 workers globally, the firm employs 300 individuals in two research and development facilities in Israel and Slovenia.
Galai also commented –
The results we see in the growth of the company generating a run rate of about a billion dollars in revenue is all based on engagement. Advertisers only pay us for actual engaged consumers. And so the growth is proof of that
Aleph Acquires 86% Of Connect Ads In A Quest For Global Expansion!
Aleph Holding, a worldwide partner to the world’s largest digital media companies, hasacquired 86 percent of Connect Adsin a cash and stock swap, the company said today.
Aleph Holdingnow has a presence in the Middle East and North Africa, as part of its global expansion and penetration into new markets.
Aleph’s complementary portfolio of digital media service firms, which includesHttpool, Internet Media Services, Wise.Blue,Social Snack, and AdDynamo, gives top digital platforms likeFacebookand many others access to new regions and under-served areas.
ThroughConnect Ads’more than 14 other exclusive media agreements with global and top digital media companies including Twitter,TikTok, Verizon Media, Spotify, Adobe Advertising Cloud, Huawei Ads, Bigo Ads, and others, Aleph’s services are now available across the MENA region.
Aleph expects to produce $1 billion in revenue by 2021, thanks to an increased network that now includes over 90 regions. The acquisition is a significant step forward in this quest.
Gastón Taratuta, Founder & CEO of Aleph Holding said that building throughout MENA has significant value, both in terms of serving current partners and clients and in terms of expanding on existing ties in other regions of the world.
He further added –
We have been following Connect Ads’ growth and geographical expansion over the last five years and I am excited to welcome them to the Aleph family. We will work together with Connect Ads and A15 to make this a successful partnership
Karim Beshara, General Partner of A15 also commented –
A15 is happy with the phenomenal results, value, and growth that Connect Ads created over the years; it validates A15’s venture-building strategy in creating outliers
He also said that his team is enthralled to continue its partnership with Aleph and Connect Ads and contribute to a worldwidedigitaldynamo. Furthermore, he also expressed his excitement regarding the future growth prospects and possible profits that this transaction will provide.
Mohamed El Mehairy, CEO of Connect Ads went on record to say that it is an eventful time because of commonality in vision and goals that they share here. He added –
我们认为这是朝着正确方向迈出的一大步for Connect Ads and all our stakeholders, including our teams, partners, and clients. Being a part of Aleph, this truly global structure will give us more leverage in managing our business as well as global exposure and potential that goes far beyond MENA and EMEA
Tech Giants ‘Amazon,Google, Apple, Facebook’ Beats Q3 Estimates
Key Points:
- Big Tech Quartet- Apple, Alphabet, Amazon, and Facebook reported their third-quarter earnings en masse last week.
- The tech giants exceeded Wall Street estimates maintaining the momentum from the previous quarter shows how the pandemic has driven online business.
- Their earnings soar despite antitrust issues and seemingly endless coronavirus pandemic.
- Google and Amazon enjoyed a strong third quarter whereas Facebook and Apple just managed to beat the estimates.
- The combined profit of the tech giants totaled $38.08 billion compared to $29 billion last quarter.
The Big Tech giants are just getting bigger amidst a global pandemic, economic malaise, and anti-trust scrutiny. Alphabet, Apple, Amazon, and Facebook collectively exceeded Wall Street expectations reporting a combined quarterly net profit of $38.08 billion. The tech companies are under unprecedented scrutiny from US lawmakers on their dominant positions in the marketplace. The four companies’ combined worth is about $5.3 trillion.
Apart from the growing profit and revenue, the stocks of three of the companies had mixed performance after trading hours as the forecast issues didn’t go well with the investors: Facebook’s edgy outlook, Apple’s no forecast, and Amazon’s huge Covid-19 spending projections. Google crushed market expectations but didn’t provide forecasts after tremendous gains.
Here’s A Quick Glance At The Tech Giants’ Earnings:
1. The Next Big Thing For Apple Is iPhone 12
Apple narrowly exceeded market expectations despite the later-than-usual launch of its iPhones. The net sales grew by 1% Y-o-Y in its fiscal fourth quarter. The increase mainly reflected strong growth in Mac- up by 29% and iPad – up by 46% as millions of people were remote working and schooling during the pandemic.
Apple is the bellwether for the smartphone business but iPhone sales slumped 21% as the tech giant delayed the launch of iPhone 12 from late September to October which means the result of the new iPhone will be seen in the company’s January report. Apple also witnessed a 28% decline in revenue in China because of the lack of a new iPhone launch. This resulted in a 7% drop in net income to below $13 billion. The company also did not offer revenue guidance for the current quarter that disappointed the investors. However, CEO Tim Cook tried to paint a positive picture in a statement,
“Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive.”
Key Numbers(Analyst estimates are based on Bloomberg Consensus data)
- Revenue:$64.7 billion compared to $63.48 billion expected.
- iPhone Revenue:$26.4 billion compared to $27.06 billion expected. The Q4 2019 iPhone revenue was $33.36 billion.
- Services revenue:$14.5 billion compared to $13.87 billion expected.
- Wearables revenue:$7.8 billion compared to $7.35 billion
2. Alphabet Sales Surges On Resurgence Of Ad Sales
Google’s parent company Alphabet topped Wall Street expectations revealing a mammoth 14% revenue jump. The growth is led by Google’s search business, an increase in advertising spend on Google and Youtube as well as continued strength in Google Cloud and Play. The company will be more transparent about its Google Cloud business and break out the operating income beginning next quarter. This will give an insight into its profitability of online advertising operations, which accounts for the lion’s share of Google’s revenue.
CEO Sundar Pichai described Q3 as “a strong quarter, consistent with the broader online environment.”
“It’s also a testament to the deep investments we’ve made in AI and other technologies, to deliver services that people turn to for help, in moments big and small.”
He also addressed the antitrust suit by the Justice Department and said,
“We believe that our products are creating significant consumer benefits, and we’ll confidently make our case.”
Key Numbers(Analyst estimates are based on Bloomberg Consensus data)
- Revenue:$38.01 billion (minus traffic acquisition cost) compared to $35.3 billion expected.
- Google Cloud revenue:$3.44 billion compared to $3.31 billion expected.
- YouTube Ad Revenue:$5.04 billion compared to $4.52 billion expected
3. The Most Profitable Year For Amazon
The pandemic boosted online shopping that pushed Amazon to a record for sales and profit this quarter. It blew past Wall Street expectation as the sales grew 37% and net profit roughly tripled to $6.33 billion. The lucrative Amazon Web Services sales up by 29% Y-o-Y as the company continue their shift to cloud computing.
Amid the pandemic surge, Amazon has already surpassed 2019 annual profit of $11.59 billion ahead of the fourth quarter with the holiday yet to come. CEO Jeff Bezos said,
“We’re seeing more customers than ever shopping early for than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season.”
The eCommerce giant expanded its fulfillment infrastructure by 50 percent and pushed its workforce to more than 1 million mark this year. Amazon saw higher Prime membership renewals and Prime member growth rate and streaming Prime video content rose more than 80% annually in Q3. The online grocery sales growth also accelerated in Q3 with no delivery charges for Prime members. Other revenue which is mostly ad-related is up 49% from the same period last year to $5.4 billion.
However, growth has not come without cost. The company has spent billions during the pandemic in areas like social distancing, the addition of new facilities, new hires, cleaning, supplies, and testing. It expects the cost to rise to $4 billion next quarter and it will not recur once the pandemic ends.
Key Numbers(Analyst estimates are based on Bloomberg Consensus data)
- Revenue:$96.1 billion compared to $92.7 billion expected
- Amazon Web Services Revenue: $11.6 billion up from $9 billion a year ago.
4. Undaunted Ad-Revenues And E-commerce Boom For Facebook
Facebook earnings were better-than-expected despite a torrent of criticism that included a summer boycott by many large advertisers in July. The revenue jumped 22% to $21.47 billion from $17.65 billion a year ago. Facebook witnessed strong revenue and user growth, The revenues grew with new advertisers coming on board in search of new ways to reach customers.
Monthly Active Usersis a key barometer to advertisers and the owner of Whatsapp and Instagram reported a whopping 2.74 billion MAU’s, up by 12% Y-o-Y. However, the company reported a rare decline in monthly and daily users in the U.S and Canada, down to 196 million from 198 million in the previous quarter. But the social media giant saw an increase in revenue- per-user for the region. More than 2.54 billion people daily use at least one of Facebook’s family of apps — Instagram, WhatsApp, Messenger, or Facebook — up 15 % Y-o-Y.
社交媒体188bet体育投注平台整合我的计划ts family apps messaging services and make it“one connected interoperable system”that will particularly be helpful in the U.S. The tech giant is hoping that the use of interoperability will lead its messaging platforms to interact with businesses. CEO Mark Zuckerberg noting the recently launched Facebook Shops said,
“I think the goal is to build out a commerce platform around messaging.”
“We’re building out a number of tools around business messaging, so that way people can follow up and complete transactions and get support through messaging, and then [for] payments so that people can complete transactions, too.”
It also believes that the Virtual Reality (VR) business is “self-sustaining” as the user base will be huge and economical for developers. They can prepare content for Facebook’s Oculus platform over alternative gaming platforms.
Key Numbers(Analystestimatesare based on Bloomberg Consensus data)
- Revenue:$21.47 billion compared to $19.84 expected.
- Daily active users (DAUs):1.82 billion compared to 1.78 billion expectation
- Monthly active users (MAUs): 2.74 billion compared to 2.7 billion expectation.
The numbers of tech giants show how resilient these companies are and their services and products are in demand during the pandemic. Even though the investors are wary of the forecast numbers but with record profits and sales in the past three months, these heavyweights are unstoppable.
Go Deeper:Everything the Q2 2020 Financial Results of Tech Giants Have to Say
ArabyAds Acquires Advertising Platform AdFalcon
ArabyAds, a leading advertising and marketing intelligence platform in theMENAregion acquires the advertising and data platform and former technology hub of Noqoush Media Group.
The acquisition is a part of the young mobile media company ArabyAds’ vision to revolutionize the AdTech space in the MENA region. This is a natural progression to take technology to another level.
The acquired technology suite includes AdFalcon’s Demand Manager (DSP), Bridge Technology, and Ad Network. These solutions will include support for various ad formats, flexible targeting options, various pricing models, and allow clients to reach the targeted audience by-way-of programmatic buying. ArabyAds intends to adopt these technologies beyond mobile.
As reported by Campaign Middle East, CEO of ArabyAds Mahmoud Fathy said,
“Our vision to become the region’s first AdTech platform can only be realized by such strategic strides. We see this opportunity as the first of many to aid us in our endeavour’. He continues, ‘More than anything we are excited to have the brilliant team behind AdFalcon’s technology join our family. We are thrilled to see what we will achieve together”
About ArabyAds
ArabyAdsis the leading advertising and marketing intelligence platform that offers comprehensive marketing solutions to clients across the MENA region. It is a one-stop-shop advertising intelligence firm that covers the business needs of clients with measurable results to enhance their spending.Itis headquartered in Dubai. For more details, visithttps://www.arabyads.com.
About Ad Falcon:
AdFalcon is the first mobile advertising network in the Middle East that provides specialized mobile advertising experience to advertisers, publishers, developers, and mobile users across the region. The technology, targeting mechanism, and diversified mobile ads maximize the campaign’s return on investment (ROI) and deliver satisfying results for the brands and businesses. For more details, visithttps://www.adfalcon.com
Narrative Raises $8.5 Millions To Support The Growth Of Data Streaming Platform
Narrative,the software company is launching a new product design that will simplify the process of buying and selling data. The company has raised a new round of funding of $8.5m Series A, to support the launch of a new category: Data Streaming, replacing the data broker model industry with a transformation solution.
Narrative unveiled newData Streams Marketplacethat is the industry’s first-ever e-Commerce solution for buying data. It would make the process of buying and selling much simpler, not much different from Amazon.
The new Marketplace offers data acquisition via an interface the firm says will be ‘familiar to anyone who has shopped online’: The new offerings enable users to browse and purchase the data they need ‘in minutes’ without the need for extensive training, ‘legal wrangling and red tape’. The marketplace provided comprehensive solutions for data discovery, onboarding, enrichment, identity resolution, and privacy and compliance.
As reported by TechCrunch, Jordan showed how a marketer can search and browse for different types of data. If a marketer wants to buy (say, the mobile IDs of people who have the Uber Driver app installed on their phones, or the Zoom app) at a price they are willing to pay (via subscription), they can add data to the cart, enter card information for payment, accept the terms and conditions, and check out.
“The premise is make it as easy to buy data as it is to buy stuff online.”
This approach has become enticing in recent months as companies need more data and quickly. For instance, Jordan shared with Tech Crunch that large companies invest millions of dollars in advertising and “needs a way to find and buy the data almost programmatically and have the whole thing take five minutes instead of five months — those are the orders of magnitude we’re talking about here.”
Founder and CEO Nick Jordan comments,
“As sales and services companies, data brokers have become intermediaries who are doing what they want with data in ways you don’t know. With a data broker, you get what they send to you. That’s how they make money. This is sub-par; it’s not agile – and you can’t optimize it. We have shortened the data supply chain by going direct – cutting out the broker, and making data liquid and transparent.”
The new round was led by G20 Ventures, with additional funding from existing investors Glasswing Ventures, NathCapital, Revel Partners, Tuhave Venture Partners, and XSeed Capital. The funds will allow the company to hire in areas like product engineering, sales, and marketing from across North America. Their focus is on hiring and outreach.
Bob Hower, Co-Founder & Partner, G20 Ventures said,
“With data being the lifeblood of every organization, Nick and his seasoned team of data experts have presented the industry with a different point of view.”
“They have become the Amazon for data, delivering a vital solution to a global problem: ensuring transparency, control, and quality when it comes to data acquisition. Narrative’s Data Streaming Platform simplifies what has been a complex process that typically takes months and delivers it in seconds on demand.”
About Narrative:
Narrative is a platform for Data Streaming, Data Acquisition, and Data Monetization. It is the world’s first leading data streaming platform. Leading companies use Narrative to fuel cutting-edge data strategies, monetize valuable data assets, and power innovation and growth. Narrative’s innovative approach to buy and sell data eliminates the inefficiencies in data transactions that cost money and exposure to undue risk. Narrative Data Stream marketplace gets the data needed instantly. It is fast and easy to find, buy, and activate first-party data from over 40 suppliers with just a few clicks. It’s online shopping—but for data instead of dog treats. The privately-held firm was founded in 2016 and is headquartered in New York City. Learn more athttps://www.narrative.io/
Read More:Your Ultimate Guide to Understanding the Customer Data Platform
Everything the Q2 2020 Financial Results of Tech Giants Have to Say
Big Tech giants have revealed their quarter financial performance in these turbulent times. Here are the Q 2 financial performance, insights, and earnings details:
Alphabet
Google’s parent company Alphabet beat the expectations for its Q 2 earnings despite a dip in the advertising. However, it marked its first year-over-year revenue decline in its history as the pandemic slowed the economic activity and advertisers pulled back their spending. Though there is a slowdown in the advertising growth, Google pointed to newer long-term opportunities in cloud computing and artificial intelligence, Youtube, and shopping. For the rest of the year, in anticipation of slowdown, thecompany has cut marketing spend by half and also freezes hiring.
Google is also facing antitrust investigations of its search and Android business and is expected to result in a legal action that could cover issues from search to digital advertising space in the coming months.
By the numbers:
- $2.6 billion declines in year-on-year advertising revenue.
- Google’s total quarterly revenue $29.9 billion of $38.3 billion is from advertising.
- YouTube ad revenue increased 6% to $3.8 billion.
- Google Cloud sales grew 43% to $3 billion.
- Total Net income reported $6.96 billion compared to $9.95 billion in the year-ago quarter.
Response:
Though there is a slowdown in the advertising growth, Google pointed to newer long-term opportunities in cloud computing and artificial intelligence, Youtube, and shopping.
For the rest of the year, in anticipation of slowdown, the company has cut marketing spend by half and also freezes hiring. Ruth Porat, Chief Financial Officer of Alphabet and Google said,
“We continue to navigate through a difficult global economic environment.”
Consumers are returning to more commercial search queries and advertisers are gradually increasing their search spending towards the end of the quarter. However, Ruth Porat cautioned,
“We believe it is premature to gauge the durability of recent trends, given the obvious uncertainty of the global macro environment.”
Google is also facing antitrust investigations of its search and Android business and is expected to result in a legal action that could cover issues from search to digital advertising space in the coming months.
Amazon
The e-commerce giant delivered some eye-popping numbers during Q2 beating earnings expectations and reported a double-digit revenue year over year. With the flurry of online orders amid the coronavirus pandemic, sales soared by 40%. The online grocery sales tripled Y-o-Y and the grocery delivery capacity by more than 160%. The demand for online shopping sky-rocketed and to fulfill the demand, it hired 175,000 more people in the period.
By The Numbers:
- Revenue reported is $88.91 billion vs. $81.56 billion expected, the strongest and unexpected annual growth in years.
- Amazon spent $4 billion on coronavirus related measures as promised in Q1 and expects to spend another $2 billion during Q3 towards COVID-19 mitigation efforts.
- 亚马逊网络服务(AWS188金宝慱真人亚洲体育),其云计算爵士vice grew 29% compared to 33% in Q1.
- Amazon’s Other’ category that primarily consists of the advertising business ( a small slice of Amazon’s total revenues) was up 41% Y-o-Y and subscription services that include revenues from Prime membership also up 29%.
Response:
Amazon CEO Jeff Bezos said in a statement,
“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe.”
据CNBC,亚马逊首席财务长Brian Olsavsky赛d consumer demand in the pandemic shifted from consumables and groceries to categories “not so profitable” and normal mix of products. He said,“Amazon could ship a lot more.”
Amazonwill conduct a Prime Day shopping event in the fourth quarter.
Despite the Congress probe, pandemic, and ananti-hate boycott from advertisers, Facebook beats all market expectations, revenue grew by 11%. This speaks volumes about the strength of the company’s appeal to marketers despite serious challenges. The top 100 advertisers’ that boycotted Facebook over its hate speech and misinformation policies constituted less than 20% of Facebook’s ad revenue. However, the boycott by large advertisers couldn’t rally small businesses who are reliant on Facebook.
By The Numbers:
- 3.14 billion monthly users across all apps(Facebook, Messenger, Instagram, and Whatsapp), compared to 2.99 billion in the previous quarter.
- 1.79 billionDaily Active Userson Facebook, up 12% year on year
- 2.7 billionMonthly Active Users on Facebook, up 12% year on year.
- Revenue: $18.7 billion, up 11% year on year.
- It has more than 9 million active advertisers.
Response:
The company said in a statement,
“We are seeing signs of normalization in user growth and engagement as shelter-in-place measures have eased around the world, particularly in developed markets where Facebook’s penetration is higher.”
Mark Zuckerberg said on a call with investors,
“Some also seem to wrongly assume that our business is dependent on a few large advertisers. The biggest part of our business is serving small businesses.”
Two new initiatives were announced for small businesses- Facebook Shops and in-messenger commerce.
“This really is primarily focused on small businesses, individual entrepreneurs. Small businesses are the biggest part of our business, not large businesses.”
The company forecasts its revenue growth rate for Q3 of about 10%. while taking into account ongoing headwinds including macroeconomic uncertainty, ad boycott (formally began in July, after Q2 ended), regulations around ad targetting, and measurement.
Pinterest revenue grew 4% on user growth and advertisement. Users who started using Pinterest during Covid-19 continued to have engagement even after lockdown restrictions eased out at a few places. It reached a milestone of crossing more than 400 million monthly users, witnessing a strong growth from users under 25 who grew twice as fast as users over 25. The total advertising growth accelerated year over year in Q2 and small and medium-sized advertisers emerged as a key driver that made up nearly half of its revenue. New features like Shop Tab and the ability to shop from boards are worked upon to make content search easy for the Pinners.
ByThe Numbers:
- Total daily video views (organic+ paid) grew over 150% year over year.
- Catalog from business increased in Q2 by more than 350% from Q1.
- Revenue from conversion optimization or oCPM, shopping ads, and auto bids continues to grow faster than overall revenue, and attributed conversions grew 2.7x year over year. 80% of CPC revenue is going through the auto bid.
- Users visiting shopping only surfaces grew more than 50% in the first half of 2020 and product only searches grew 8x.
Response:
As per CNBC, the company said,
“People needed Pinterest in Q2. They needed a service that helped them adjust to radically changed circumstances — one that inspired them to cook at home, build vegetable gardens, plan activities for their kids and set up remote offices and home gyms, to name just a few typical COVID-19-related use cases we saw during the quarter.”
Pinterest说广告增加了预算cause of its strong commercial intent where advertisers get their traction without displaying ads with any controversial content.
Omnicom Group
Omnicomrevenues decline 23% due to a decline in spending by the clients. In order to offset the decline in revenue 6,100 jobs were cut across its network, froze hiring, eliminated salary increases, implemented voluntary pay cuts across its agencies, and participated in government subsidy programs in 35 markets. It also shed 1 million square feet of real estate space as it terminated leases across markets in order to mitigate the impact of the pandemic. It is expected that these actions will result in the repositioning costs for the quarter of $278 million that will generate approximately $500 million in annualized savings.
Advertising revenue decline as the revenue of the programmatic business decreased where it offered principle-based buying options for clients.
By The Numbers:
- Reported revenue was $2.8 billion, down $854 million organically, or 23% from Q2 2019.
- Advertising business declined 26.6% and Third-party service costs which fluctuate directly with changes in revenue declined by approximately $400 million.
- Revenues declined in all disciplines except healthcare which grew 3.2% organically.
- CRM execution and support include events and field marketing businesses, which declined 27.6%.
- CRM consumer experience declined 25.6%, and PR declined 14%,
Response:
CEO John Wren said on the earnings call,
“The quarter posed extraordinary challenges. he effect of COVID and related lockdowns were unprecedented.”
The main reason for declines in Omnicon’s services was because the client from travel, retail, auto, and other affected verticals paused or cut spending whereas technology and telecom fared better.
After a tough and bad Q2, the company looks forward to the second half. The recovery may not be immediate but the impact will vary regionally and by vertical. Wren said,
“We think the worst is behind us, with Q2 being the worst point for year-over-year revenue declines.”
The company added a few new clients like Air France’s global agency of record account and Clorox’s media business in the United States.
Apple
Apple reports a slow down in revenue growth as the demand and supply was impacted due to the pandemic. However, it had reported a better quarter than Wall Street expected, showing growth across all product lines including iPhones and reflected growth across all geographic segments.
By The Numbers:
- Revenues rose 11% to $59.7 billion against the estimated revenue of $52.6 billion.
- Apple reported iPhone revenue of $26.42 bn, a growth of 1.66%.
- The biggest growth was in iPad revenue at $6.58bn up from $4.48 bn.
- Apple reported service revenue of $13.1 bn against $11.5 bn the same period in the last year.
Response:
Apple CEO Tim Cook during a call said,
“Amid the most challenging global environment in which we’ve ever operated our business we’re proud to say that Apple grew during the quarter.”
The company’s subscription service and Apple Tv+ also performed well as most people watched content under lockdown. Apple did not issue guidance for the third quarter.
Read more on Q1 results:Where Do These Global Companies Stand At The End Of Q1: Performance, Insights, And Statistics
Nisnass Will Be Winding Up Business By July 16
Due to the severe damage done on the retail market by Covid-19, anothere-commercehas toshut downits business.
Nisnass, a beauty and fashion venture from Al Tayer Insignia, recently announced that they no longer be operating from Thursday, June 16. Therefore, it is offering a 90% discount on its products.
However, Ounass, the sister company of the Nisnass, will still be fully operational.
Nisnass started its journey in the e-commerce market in the month of January, the year 2018. Nisnass started its user interaction with a mobile application. Therefore, it made sure to provide the users best on-hand experience, in terms of online shopping. Later, it also expanded the market with the help of a desktop website.
They had abrilliant strategyin terms of delivery! They delivered the product within 2-hours if in Dubai. Also, they assured a next day delivery in all overUAE.
Collection on the website offered thebest products and services. Their wide variety range of products, extending from men to women and even for kids. The product range also offered beauty products, homewares and clothing.
在一封电子邮件中,阿尔次宣布关闭,stating: “As with many start-ups, we are compelled to continuously review our trajectory and focus our resources towards achieving our mission in the most effective way”.
They further added, “Nisnass has played an instrumental role in our evolutionary journey and has valuably contributed to the maturity of our organisation and the growth of our digital team.”
https://www.instagram.com/p/CBas_GIJeza/?utm_source=ig_embed
Although, they provided no specific reason for the sudden closure.
However, according to Al Tayer, they would be refocussing their “talent, absolute focus and resources into accelerating the successful growth of Ounass as the leader in the Middle East online luxury sphere”.
The news of the closure was sudden, and disheartening for the customers. Earlier,The Modist, Dubai e-tailor had to close its business due to the global crisis. They were operational for 3-years and closed their business, two months ago.
Where Do These Global Companies Stand At The End Of Q1: Performance, Insights, And Statistics
We bring you insights and earning calls on various media companies, publishers, agencies, brands, and tech companies performing on a quarterly basis. The iteration focuses on media companies’ financial performance in the 2020 first quarter and taps all the vital data.
Q1 2020 earnings and performance
Though the waters are choppy ahead, we are optimistic that the worst is behind us and have learned to live with the new normal. Consumer habits are changing and the future is more accelerated towards the digital economy. The media landscape has changed especially the TV front and the focus is on opening businesses again with advertising driving the demand.
Q2 Outlook
Q2 advertising for publishers is estimated to be significantly down as much as 25-30% Y-o-Y and for some even 50-55% down. Few companies like Facebook, Snap, Dotdash expects Q2 revenue to be flat or slightly up Y-o-Y. Here are a few key points to consider:
- Google revenue declines by 15% year- over -year, though search activity increased. Advertising spends decreased due to coronavirus recession. However, other advertising mediums are growing like connected TV, ads in video games, or ads in video conferencing.
- International TV ad sales are down by 30-35% Y-o-Y whereas programmatic revenue decreased by 40-45%.
- Performance ads are down year-over-year and demand from industries like restaurants, travel, retail, auto, and luxury has declined.
- Some advertisers seek opportunities and increase spending in financial services, insurance, telecom, technology, streaming services, and app downloads. Gaming and streaming are gaining a strong foothold and permanently taking a share of our time and wallets.
- CPM’s down by almost 50% giving an advantage to advertisers for huge bargains. New and existing advertisers are looking to acquire new customers at a lifetime low value.
- With no new live events expected on TV till September/October, it will boost the growth of CTV.
- 归因对营销人员很容易因为大多数销售基于“增大化现实”技术e online than in-store. The animation is expected to be robust in Q3 and Q4.
- 90-95% workforce for media companies are operating from home and CMO’s can justify spending using data-driven advertising with trackable ROAS.
Let’s take a look at the financial report card of the global giants.
The Trade Desk:
The opening remarks from the trade desks on the present scenario are as follows – Programmatic’s greatest feature is ‘Agility’. One can easily start and stop the programmatic campaigns, unlike linear television. Early April witnesses advertisers stopped/pause ad spend in certain verticals especially travel and remained active in health, technology, games, home, and garden.
However, by mid-April year-over-year spend decline stabilized, and as the month progressed things started improving. Advertisers were trying to adapt to the present environment. For instance, restaurants changed their messaging to “We are open” or “We deliver.” Consumer products focused on pantry loading and travel companies planned to waive off cancellation fees for bookings. Basically, advertisers started to strategize on how to run businesses on the other side of the pandemic. Now, every company is trying to work out an advertising strategy to connect to consumers and gain share once the economy gets going.
CTV is a clear winner as linear TV’s life is shortened. Unlike traditional TV ads investment where brands and agencies commit billions of dollars without knowing the content and audience, they have the freedom to be more deliberate, liberal, and agile on CTV.
Roku:
- Pandemic has accelerated the shift to streaming by viewers due to excellent content and value.
- In the short term, the video advertising business has slowed down due to budget cuts and low spending by advertisers.
- In the streaming business, active accounts grew roughly 38% Y-o-Y with an increase in new accounts of more than 70% Y-o-Y.
- Streaming hours grew roughly 80% in April and the increase in streaming hours per account is approximately 30%.
- It is estimated that ad business will grow at a slower pace and gross profit margin will be lower than expected for the year.
- The behavioral changes of TV ad buyers are positive in the long-term and more people are expected to stay home to control spending in the light of economic hardships and the shift to streaming business will grow further.
Google:
- In March there was a sudden slowdown in ad revenues owing to COVID 19 and lockdown orders. The first two months of Q1 reflected strong growth. Google search and other advertising revenues generated $24.5 billion, up 9% Y-o-Y.
- After the 2008 crisis, the Google search can be adjusted easily-quickly turn-off and back on which is cost-effective and ROI based. At the inception of the coronavirus crisis, users’ interest was more for information on the virus and non-commercial topics providing less opportunity for monetization.
- Q2 looks difficult for the advertising business.
- YouTube advertising revenues were up 33% year-on-year to $4 billion however there were different performance trajectories for direct response and brand advertising.
- Direct response continued to grow throughout the quarter but brand advertising growth grew for the first two months of the quarter and declined in March. This resulted in the slowdown of Youtube ad revenues by the end of March.
- Similarly, networking ad revenue was $5.2 billion, up 4%Y-o-Y for the first 2 months of the quarter, and declined in March in the low-double-digits year-on-year.
Spotify:
- Ads are a small part of the business, nearly 10% of the overall revenues. Therefore it is less impacted compared to other businesses.
- From a long term perspective, it will be an opportunity to move from linear to on-demand due to COVID 19 crisis.
- It is suspected that advertisers will move from pure reach to more measurable ad formats -mostly analog ad formats.
- The conjecture on advertising and consumption front is what is already happening of linear shifting to digital.
Learn more:Spotify Adds $1.7B To Market Cap In 23 Min Post A Deal With Joe Rogan, World’s Leading Podcaster.
Rubicon:
- The first half of April’s revenue was roughly 30% down until it showed signs of stabilizing in the second half.
- CTV continued to grow at a slower rate in April with a Y-o-Y increase of nearly 10%. Ad slot availability grew by roughly 25% compared to pre-COVID 19.
- Being an omnichannel SSP there has been diversity in ad categories and even more after the merger with Telaria. Certain verticals were highly impacted like travel in entertainment but e-commerce, technology, and direct-to-consumer were benefitted.
- Upfront deals are canceled and focus is shifted to spend from linear to the spot market that programmatic serves.
Microsoft:
- Reduction in ad spend affected Search and LinkedIn business and assumes that the advertising spend will not improve in Q2 as well.
- Search revenue ex-Tac increased by 1%.
Apple Advertising:
- The economic slowdown and uncertainty on business reopening have impacted the advertising business – which is the sum of App Store search ads,Apple news, and third party agreements on the advertising front.
- This slowdown and uncertain future will have a strong effect on the Service business for the June quarter.
Verizon:
- Owing to the COVID-19 crisis, ad revenue declined by 10% in the second -half of March and the rate of decline only increases in April.
- Industry forecasts a fall of 20-30% in digital media andVerizon mediaresults are likely to be similar.
- It also experienced a decline in advertising and search revenue due to hold back or cancellation of campaigns by advertisers and users searching for fewer commercial terms providing less opportunity for monetization.
- Finally, some staggering numbers were seen- 200% up on gaming, 40% up on video, and 10 times up on the collaboration tools. 800 million calls a day, is double the amount on Mother’s Day, the biggest day of the year.
Netflix:
- Increase in subscriber growth in March and is a pull forward for the rest of the year leading to an assumption that subs will be light in Q3 and Q4.
- 除了韩国和Icela全球停止拍摄nd.
- Customer services are fully restored with 2000+ agents working remotely.
- With the lockdown orders coming into effect in LA, animation production is up and working from home whereas the post-production of 200+ projects is in pipeline remotely.
- Series writers’ rooms are operating virtually.
- Netflix has invested in Open connect, a pioneering cache system that puts content library as close to members’ homes as possible. This enables ISP’s to run their network efficiently and at a lower cost. However, some countries networks may face issues due to the increasing usage of the internet.
Omnicon
- The company doesn’t collect weekly revenue numbers by the agency and roll them up at theOmnicom grouplevel.
- Q2 downfall is expected in double digits and year-on-year revenues will be down.
- The future is challenging but the company expects to get many of those people back as they move into the year ahead.
Learn more about the quarterly performance of other media companies:Financial Report Card Of The Global Giants And Industries In COVID-19
Financial Report Card Of The Global Giants And Industries In COVID-19
Media companies are facing distress owing to the pandemic crisis, particularly those relying on advertising revenue. The current situation is precarious that compelled companies to roll out furloughs, pay cuts, or layoffs.
Even though publishers are recording high traffic, there is a mismatch in demand and supply in the ad market. Subscriptions are a silver lining for publishers but again sustainability is in question. Many businesses are impacted due to cancelled live events like sports that would bring a vast sum of revenue. Newsstands sales have also witnessed a fall.
Keeping the above factors in mind, below is the analysis of leading media companies’ financial and quarterly reports and their progress in this crisis.
CONGLOMERATES
Bertelsmann: Ad funded businesses were affected while music, services, and education business performed well.
The German media conglomerate Bertelsmann’s revenue declined by 2.7%. The advertising-funded business Q 1 was “highly affected” by the pandemic. Within the digital business RTL Group specifically, the revenue was down 3.4 % owing to the cancellation of ad bookings at the start of March or postponement of productions.
Music business BMG, its Arvato services business and its education business performed well. Subscription to the online streaming services was up 34% Y-o-Y.
Comcast/NBCUniversal: Broadband business upticks whereas rolling out Peacock streaming service.
康卡斯特公司是一个大型宽带商业ness marks an uptick with signups. and revenues up by8.8%. On the other hand, its theme park, TV and film production business is on hold.
NBCUniversal and newly acquired Sky TV cannot broadcast live sports. The company expects the advertising business to be down significantly in Q2
NBCUniversal Q1 revenue was down 7% and it rolled out ad-supported Peacock streaming service to Comcast customers in April.
Disney: Theme Parks and Sports Broadcast Shut, Disney+ subscribers up.
The crisis led to shutting down of theme parks, and productions and theatre movie releases were put to hold. Ad revenue at its TV business was affected as ESPN couldn’t air any live sports.
However, it stepped up the launch of ad-free streaming service in European countries. Disney+ had 33.5 million subscribers by the end of Q1 and an average of $5.63 in monthly revenue per paid user. Disneyland Shanghai did reopen, at 30% capacity on May 11.
WarnerMedia (owned by AT&T): Q1 Revenues severely hit.
Recently, folded its Xandr advanced advertising unit into a bigger WarnerMedia business.
Q1 revenues of WarnerMedia was down 12% on the year-ago quarter to $7.4 billion due to lower ad revenues in March on sports cancellations. Movie productions are also on hold.
PUBLISHERS
News Corp: Circulation and Subscription revenue grows, Ad revenue takes a hit.
Rupert Murdoch’s News Corp includes various leading and established brands like The Wall Street Journal, The Sun, and many more in U.S, U.K, and Australia.
Overall revenue declined 7.8% to $2.27 billion in Q1 due to weak ad business, low ad revenues, and negative currency movements. April ad revenue for Dow Jones declined 20% from the prior year whereas for News Corp Australia and News UK fell by more than 45% which includes negative currency impact.
The Wall Street Journal reported circulation and subscription revenue growth by 1% reaching a record subscriber base of 3 million overall, of which 2.2 million are digital-only.
The New York Times: Focus on Subscription Revenue to thrive in the post coronavirus world.
The NYT is leading more emphasis on subscription revenues to reduce its dependency on ad revenue to be in a better position and thrive post coronavirus world.
NYT recorded the highest quarterly increase in new digital-only subscriptions-up 587,000 in Q1 -leading to a 5.4% increase in subscription revenue to $285.4 million. Ad revenue fell by 15% and likely to fall further in Q2 somewhere between 50% and 55%.
“Other revenues” segment is estimated to fall around 10% as licensing revenue from Facebook News is expected to be “more than offset”- by lower revenue from its live events and its TV series.
TV AND CABLE
Discovery: Their channels are new sports.
Discovery CEO David Zaslav on the Q1 earnings call said, “Our channels are the new sports — the numbers are huge”around its lifestyle channels like HGTV, Food Network, and DIY. The engagement with the characters and talent is enormous. Discovery is also saving money productions through the pandemic as the film shows from home.
总收入下降从1£同花顺r to $2.68 billion and expects advertising revenue to fall significantly in 2020. Many sports events are postponed and 90% of the sports deals have force majeure provisions or provisions to not pay for the content that is not received.
Fox: Fox News gains the largest audience.
Revenue for the three months to March 31 rose 25% supported by the forecast of Super Bowl in February, an increase in political advertising, and growth in affiliate revenue.But in March entered coronavirus crisis leading to the postponement of sports events and suspensions of entertainment shows.
80% who signed up for Fox Nation streaming service from Fox news continued to become paying subscribers and advertisers from sectors like technology and communications looked for the transition from sports buy to news buy. Ad revenue within local TV stations to be down 50% from last year.
ViacomCBS: Streaming revenue continues to grow and more on its way441.2 b
Revenue for Q1 fell 6% to $6.67 billion of which advertising revenue marked a 19% drop though a comparison to last year would be unfair when it aired Super bowl and basketball tournament.
Streaming continues to grow- domestic and digital revenue up by 51% to $471 million and had 13.5 million streaming subscribers.It intends to build “a broad pay streaming product in multiple markets” over the next 12 months. It announced a distribution deal with YouTube TV, which will carry 14 ViacomCBS channels
DIGITAL GIANTS
Alphabet or Google: Faring well in this crisis and a better situation.
Q1 revenue stood at $41.2 billion, up 13% Y-o-Y basis(includes Google cloud revenue and ‘other bets’ segment).
According to CFO Ruth Porat, Youtube’s March revenue “decelerated to a year-on-year growth rate in the high single digits” and Google Network March revenue declined “in the low double digits.”
Google CutsMarketing Budgets by 50%,Freezes Hiring, and launched a “Journalism Emergency Relief Fund”.
Baidu: A closer watch on the signs of recovery in the upcoming result.
Chinese advertising giant Baidu was the first to report the coronavirus crisis set to affect media companies and expect a revenue drop of between 5% and 13% due to advertiser pullback.
In April, it suspended updating content on certain newsfeed channels within its app due to government directive which may impact its marketing services revenue. On May 18, Baidu will give the next quarterly update and would be worth watching whether there is any recovery in the ad business.
Amazon: Advertising business grew as directly related to eCommerce sales
Amazon Q1 revenue soared as consumers quickly shifted to shopping online amidst coronavirus crisis. Conversely, revenue rose 26%, profit dropped 29% compared to last year’s quarter. The cost grew to finish the surge in orders
In the financial statement, the ‘other’ category is advertising business- revenue grew by 40% to $3.9 billion in Q1. The growth is consistent with a little downward pressure in March but no major impact as its directly related to eCommerce sales.‘
Facebook: Post Strong Earnings, Exceeds Projections
Facebookad revenue grew by 17% Y-o-Y to $17.4 billiondespite the instability in the digital ad market due to COVID-19.
Facebook saw strength in the advertiser’s vertical- gaming, technology, and e-commerce whereas travel and automotive were the weakest verticals in the first three weeks of March.
Facebook hadPledged $2M Grant FundingTo Support Publishers Financially.
Snapchat: Users and Revenue Increases, ad spend declines
Snapchat reported in itsQ1 2020 earnings– strong gains in both users and revenues but a dip in advertiser spend despite the growing concerns about the coronavirus pandemic. the company reported a 44 percent (Y-o-Y) increase in its first-quarter revenue to $462 million.Snap benefited as people used animated lenses to keep in touch with loved ones in this lockdown. Snapchat’s daily active user (DAV) base reached 229 million.
Direct-response advertising accounts for more than half of the company’s revenue and clients in sectors like gaming, e-commerce, and consumer packaged goods continue to spend even during the crisis.
Twitter: Work in progress over Adtech concerns
Twitter’s user growth jumped in March as people rushed to check the latest news updates related to coronavirus.Despite a 9% growth in daily users, revenue up only 2.6% to $807.6 million and reported a loss of 8.4 million in Q1 results.
In comparison to its competitors, Twitter doesn’t have a direct-response advertising business. Therefore, the company is improving its mobile application promotion products and rebuilding its ad server which is expected to be up and running by Q2.