In this week’s Week in Review: Roku records bumper Q4 thanks to growth of ad-supported content, The Trade Desk announces a push into CTV and mobile, and Vimeo and Mozilla take the lead on efforts to block the US repeal of net neutrality. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.
Top Stories
Ad-Supported Content Spurs Roku to Record Profits
Roku delivered its Q4 results this week, which beat expectations and showed record net income of $9.5 million, up from $3.4 million a year ago. Total revenue reached $188.3 million, up 28 percent year-on-year, and the number of active accounts was up 44 percent to 19.3 million. Roku credited a large part of this growth to the strong performance of ad-supported content on its devices. Roku takes a cut of ad revenue from third-party apps, and has also grown its own ad-supported service, The Roku Channel, into the third largest ad-supported channel available to Roku users.
Despite the strong results, stocks fell thanks to more muted expectations for the current quarter. Roku has faced extremely high expectations from investors since its IPO last year, and it’s Q1 predicted revenue of $125 million falls short of Wall Street’s expectations of $130 million. The company remains confident regardless that it can maintain sustained growth, and says it will expand its automated content recognition (ACR) powered ad offering over the coming year to help achieve this.
The Trade Desk Announces CTV Push
The Trade Desk announced its intentions to push further into connected TV (CTV) ad sales this week as it released its Q4 results this week, recording final quarter revenue of $106.2 million, a 42 percent year-on-year increase. This brings total revenue for 2017 up to $308.2 million, a 52 percent rise on 2016. CEO Jeff Green outlined the company’s vision for the future, saying that CTV and mobile are the two areas he believes will bring most growth over the coming year. “We are making incremental investments of $15-20 million in high opportunity areas such as mobile, connected TV, global expansion, and creating a safer programmatic environment,” said Green. The company is also aiming to execute a “land-grab” in China, where it is looking to agreements with Baidu and Alibaba to help fuel further growth.
Vimeo and Mozilla Sue FCC in Attempt to Save Net Neutrality
Vimeo and Mozilla Corp have filed legal challenges against the US Federal Communications Commission in an effort to prevent the repeal of Obama-era net neutrality laws. The changes to regulations which the FCC passed at the end of last year were published in the Federal Register on Thursday, meaning they are now open to legal and congressional challenges. At least five petitions have been filed against the FCC at the US Court of Appeals, with Mozilla and Vimeo the first to file, according to Bloomberg.
“We won’t waste a minute in our fight to protect net neutrality because it’s our mission to ensure the internet is a global public resource, open and accessible to all. An internet that truly puts people first, where individuals can shape their own experience and are empowered, safe and independent,” said Denelle Dixon, Mozilla’s chief legal and business officer, via a blog post. Mozilla claims that the FCC’s decision violates federal law and harms internet users and innovators, and argues that the rollback only benefits large internet service providers. Twenty-two states and the District of Columbia have since joined Mozilla and Vimeo’s efforts.
The Week in Tech
Amino Payments Closes $4.5 Million Seed Round
Philadelphia-based programmatic payments company Amino Payments closed a $4.5 million seed round this week, which attracted investors including First Round Capital, You & Mr. Jones Brandtech Ventures, and NYCA Investment Fund. Amino uses blockchain technology to power payments for programmatic transactions, and says its solution introduces transparency into payments. “Programmatic is the future of digital advertising, and depends upon a clean supply chain,” said Josh Kopelman, partner at First Round Capital. “Amino’s ingenious adaptation of blockchain technologies makes it the only scalable solution that ensures a clean supply chain.”
Tapad Launches ‘Customer Data Platform’ Alongside Rebrand
Marketing technology company Tapad today announced a global rebrand, in which it’s launching a new ‘Customer Data Platform’ (CPD) and renaming its device graph to ‘The Tapad Graph’. Tapad says the CPD will enable marketers to overlay their own first-party data on to the Tapad Graph, which it claims will strengthen their ability to identify and engage both new and existing customers. The new product is only available to the telecommunications industry for now, but may be opened up to a wider user base in the future. Read more on VAN.
AdSense Enables Automated Ad Placements with Auto Ads
Google today announced a new tool for AdSense, Auto Ads, which will give publishers the option to delegate decisions about where and when ads are shown on their pages to AdSense itself. The service uses machine learning to make decisions about ad placement and monetisation, which Google is pitching as a way for publishers to save themselves time and effort while also potentially increasing ad revenue.
The service underwent limited beta testing last year, but is now available for all AdSense users. Google says Auto Ads can be activated by placing a piece of code on each page they want to use it for, meaning that publishers won’t have to use it across their entire website if they don’t want to. Auto Ads will then analyse the page structure and the placement of any existing Google ads, and then place new ads based on elements such as the page layout and the amount of content on the page. Read more on VAN.
Thirdpresence Raises $2.4 Million in Seed Funding
Finnish ad tech company Thirdpresence has raised $2.4 million in seed funding to help finance the development of its AI-driven programmatic video advertising offering. Thirdpresence’s solution aims to increase ad relevancy, viewability and brand safety through the use of AI. Nordic venture capital firms Inventure and Tesi participated in the funding round, alongside other new and existing investors. “After following Thirdpresence for quite some time, we are fully convinced that the team has developed and commercialized their unique tech stack for powering high-quality mobile video advertising. We are very happy to help the founders and current investors build Thirdpresence into a global growth company,” said Sami Lampinen, managing partner at Inventure.
The Week in TV
Vivendi and Mediaset Reportedly Heading for Court
Vivendi and Mediaset will take their long-running dispute to court, with the pair having failed to settle the matter through their own negotiations, according to Italian newspaper Il Giornale. The two have been at odds over Vivendi’s decision in 2016 to pull out of a deal which would have seen it take over Mediaset’s pay TV business while also taking a minority stake in the company, with Mediaset claiming €3 billion in damages from the incident. The report says that an arbitration attempt in Milan on Monday is the last chance to prevent a court date, but with both companies under heavy external pressure, reaching a last minute agreement will be difficult.
Amazon to Introduced As Supported Channels
Amazon will introduce an ad-supported version of its Amazon Channels service in the US later this year, according to a report from Digiday. Amazon Channels gives customers access to partnered broadcasters’ video on-demand content for an additional fee, but is so far limited to ad-free content in the US. Ad-supported content is available in Europe however, and Amazon is reportedly considering bringing ad-supported streaming to the US too, allowing customers access to the likes of Hulu and CBS’s ad-supported packages.
Fox to Convene Summit to Tackle Industry Challenges
Fox Networks Group is planning to hold a media summit on March 1st to try and tackle the challenges facing the TV advertising industry, according to a report in Variety. The company is inviting advertisers and several other TV executives, along with a handful of Fox’s own executives, to an off-the-record meting in which they will discuss a new financial model for high-quality video programming, a response to the migration of viewers away from linear TV and on to on-demand streaming. The report says that NBC Universal’s chairman of advertising sales and client partnerships Linda Yaccarimo and AMC president and general manager Charlie Collier are among those from outside of Fox expected to attend.
RTÉ to Become Digital-First Broadcaster
Irish broadcaster RTÉ revealed plans this week to become a digital-first service in an attempt to attract a younger audience. The five-year strategy, ‘Renewing RTÉ for the Next Generation 2018-2022’, will see the company invest in a digital lab which will produce short-form content for online audiences, while also restructuring new and current affairs to provide a digital-first service alongside the existing linear broadcast. The plan will require increased public funding, as well as savings resulting from the company’s existing plan to cut 17 percent of its staff.
US SVOD Services to Reach 125 Million Subscribers by End of 2018 says Futuresource Consulting
Subscription video on-demand (SVOD) services will reach 125 million subscribers by the end of the year according to Futuresource Consulting, helping to drive continued growth of the video and pay TV market. Futuresource described the US market as “balanced”, despite the challenges it has faced in recent times, and predicted the entire video and pay TV market will reach $140 billion by the end of the year. The report also forecasts that pay TV subscriptions will fall by one percent this year, though increasing average revenue per user (ARPU) is more than counteracting this trend.
The Week in Publishing
Google Moderation Run as a “Click Farm”, Claims Anonymous Source
Moderators working for Google were instructed to label content as “family safe” even in cases where they didn’t understand the language, an anonymous source told The Times. Staff in a Dublin-based operation run by Accenture were reportedly expected to work at an extremely fast pace approving content, which caused them to compromise on how effectively they filtered out problematic content from AdWords and YouTube.
“In case of emergency, like if the queue was full of old ads that were about to expire, in order to meet the service-level agreement and make Google and Accenture happy. We would jump on those queues and work super quickly with the ads. This means we did not have the time to properly review the ads and apply the policy,” said the source.
Twitter Tightens Requirements for Amplify Publisher Programme and Cracks Down on Bots
Twitter took several steps this week to make its platform more ad-friendly, tightening requirements for Twitter Amplify and cracking down on bots. Twitter Amplify was introduced in 2015 to make it easier for publishers to monetise video content on the platform. The service enables advertisers to run video ads against premium content automatically based on their preferred content categories, without having an existing publisher-advertiser deal in place. The rules of eligibility for publishers on the programme have now been updated: publishers now must be verified, must only publish content in line with Twitter’s Safe For Ads guidelines, and must be an active Twitter video publisher.
The company also updated its policy on multiple account usage, barring individuals from simultaneously posting identical or substantially similar content to multiple accounts, and from following users or liking posts simultaneously from multiple accounts. This update is designed to limit harmful bot activity such as political trolling and the spreading of fake news, but will also make it harder for those with legitimate reasons for simultaneous posting to do so.
Brands Pull Ads from Daily Mail After Controversial Article
Centre Parcs and Southbank Centre pulled their ads from the Daily Mail this week after the news outlet published a controversial article by Richard Littlejohn which criticised the idea of a child being raised by two same-sex parents. “We felt this placement was completely unacceptable and therefore ceased advertising with the Daily Mail with immediate effect,” tweeted Centre Parcs. A Daily Mail spokesperson claimed in response that advertisers had been bullied by “a tiny group of politically motivated internet trolls in their attempts to censor newspapers with which they disagree”.
Facebook Remains Top Media Source for Mobile Ads says AppsFlyer
Google is gaining ground on Facebook, but Facebook remains the top media source for driving app installs, according to the AppsFlyer Performance Index Report for H2 2017. The two came in first and second place respectively for both the gaming and non-gaming categories. The report also found that fraud in on the rise, with the overall share of fraudulent installs increasing by five percent since H1 2017.
The Week for Agencies
P&G Announces $400 Million in Further Agency and Production Cuts
P&G, which announced last month its plans to continue cutting the number of agencies it works with, has revealed this week that it will cut a further $400 million in agency and production fees before the end of its fiscal year on June 30th 2021. The consumer packaged goods giant has already made a combined $750 million in ad spend savings over the past three years, but CEO David Taylor said in an investor presentation this week the cuts will keep coming, through reducing the number of agency relationships and “open sourcing” more projects. These cuts, if achieved, will mean that P&G has reduced its agency and production fee spending from $2 billion in mid 2015 to around £850 million in 2021.
One in Three Advertisers Investing More in Six Second Video This Year says RYOT Studio
Thirty four percent of advertisers will invest more in the six-second video format this year, according to research from Oath. The findings came in a best practices white paper from Oath’s content marketing creative shop RYOT Studio, which highlighted branded video as the key to “winning over” consumers, finding that 43 percent of advertisers are buying branded video. The white paper also demonstrated the importance of quality in branded content, finding that 61 percent of consumers don’t care if content is branded as long as it’s high quality.
Partnerships of the Week
Sky Media Partners with Pure DR for Teleshopping Campaign Creation
Sky Media is partnering with response driven advertising specialist Pure DR to help clients with teleshopping campaign creation. Sky Media says the partnerships will create a “one-stop-shop” offering creative, distribution, call centre handling and post-campaign analysis. Sky Media currently offers teleshopping on over 35 channels including Sky One, Channel 5 and Fox, in both short-form and long-form segments.
“We are delighted to be working so closely with the Sky Media teleshopping team in order to deliver a model that combines our creative flair and commercial expertise with its responsive media. We believe that teleshopping is about to enter a new renaissance as more brands begin to appreciate the importance of DRTV and we are excited to announce this strategic relationship,” said Pure DR’s client services and marketing director Cat Daniel.
Cinedigm Partners with Amagi for Twitch Channel
Cinedigm announced on Thursday it is using Amagi’s cloud-based channel playout platform CLOUDPORT to bring its CONtv channel to streaming site Twitch. CONtv will use Amagi’s tech to run a 24/7 Twitch channel, where it will broadcast its catalogue of over 2,800 films and TV shows. “Managing linear channel playout and delivering video content across a multitude of vMVPDs (virtual multichannel video programming distributors), poses significant operational challenges for content providers from both a cost and workflow perspective,” said Erick Opeka, EVP of Cinedigm Networks. “We are excited to partner with Amagi for their cloud broadcast expertise, thereby reducing costs and improving operational efficiencies.”
Hires of the Week
Ex-Dyson CEO Max Conze Appointed ProSiebenSat.1 CEO
Max Conze, previously chief executive at Dyson, has been picked by ProSiebenSat.1 to replace Thomas Ebeling as CEO. Ebeling’s exit was announced last November, bringing his nine year stint as chief executive to an end. Conze will start his new role on June 1st, and will be tasked with helping orchestrate a recovery after a difficult year in which the company issued three profit warns and saw its share price fall 30 percent.
NBCUniversal Makes Three New Hires to Advanced Advertising and Measurement Solutions Teams
NBCUniversal announced a string of new hires to its Advertising Sales and Client Partnerships division this week. Ed Kozek has been taken on as SVP of advertising technology, Pankaj Kumar has been hired as SVP of measurement and innovation, and Brian Norris has been hired as SVP of audience studio sales. “The addition of these leaders to our team demonstrates our commitment to innovation and to pushing the most important areas of our industry forward,” said Mike Rosen, EVP of advanced advertising and platform sales at NBCUniversal. “Ed, Pankaj and Brian have incredible backgrounds and strong expertise in their respective areas and will make great additions to our teams.”
The Week on Van
Why Dailymotion is Pivoting Away from UGC, read more on VAN
Tapad Launches ‘Customer Data Platform’ Alongside Rebrand, read more on VAN
AdSense Enables Automated Ad Placements with Auto Ads, read more on VAN
Most CTV Inventory Remains a Blind Spot for Ads.txt, read more on VAN
Ad of the Week
Pokerstars, PokerFace, Romance
Poker can be an intimidating game to get into, requiring you to be able to bluff, double-bluff, and through it all maintain a stern poker face. This ad humorously tries to break this barrier to entry, suggesting awkward situations in which the audience may have unknowingly been practicing their poker faces over the course of their daily lives.
