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The WIR: S4 Capital Posts its First Profit, Taboola’s Merger with Outbrain is Called Off, and Oracle Stops Selling Third-Party Data in Europe

Tim Cross  11 September, 2020

In this week’s Week in Review: S4 Capital posts its first profit, Taboola’s merger with Outbrain is called off, and Oracle shutters its third-party data business in Europe. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.

Top Stories

S4 Capital Posts its First Profit
S4 Capital, the holding company launched by Sir Martin Sorrell after he left WPP, this week posted its first quarterly profit since launch. S4’s revenues in H1 reached £141.3 million, representing 60.7 percent growth on a reported basis, and 6.9 percent growth on a like-for-like basis.

While the established agency holding groups have struggled during the pandemic, S4 has continued to grow, a fact which the company was happy to point out in its results statement.

“As the primarily analogue advertising holding companies are forecast to savage their head counts by 50,000 or so as their net revenues fell by between 10-26 percent in Q2 2020, prioritising revenue and gross profit growth at this early stage of the company’s
development continues to be part of its strategy, boosted by substantial human capital investment, particularly given anticipated stronger second half momentum,” S4 Capital said in its statement.

Taboola/Outbrain Merger Called Off
Taboola and Outbrain, the two leaders in the content recommendation space, have called off the merger which they announced last year. The two businesses both specialise in promoting external (as well as internal) content alongside publishers articles, and believed they would be better placed to compete with Facebook and Google as one united business.

But the merger attracted scrutiny from regulators, including the UK’s Competition and Markets Authority. And the contraction of the advertising market caused by the pandemic made it harder for Taboola to raise the cash necessary to finance the deal, sources told Tech Crunch. Attempts to convert to deal to an all-stock offer were not popular with Outbrain’s shareholders, according to Tech Crunch.

Oracle to Stop Selling Third-Party Data in Europe
Oracle is shuttering its business selling third-party data in the EU, the UK and Switzerland, Adweek reported this week. Oracle has been reorienting its data business to focus on first-party data, due to privacy regulations in Europe and the upcoming demise of third-party cookies on Google’s Chrome browser.

Oracle will stop offering third-party data targeting services from next week, according to Adweek. The move has been partly prompted by Oracle being named in  class action lawsuits in the UK and the Netherlands, accused of violating Europe’s General Data Protection Regulation.

The Week in Tech

EA Pulls In-Game Ads After Backlash
EA pulled video ads from its MMA game UFC 4 this week, after the company faced backlash primarily on Reddit and Twitter. EA had begun running video ads during brief pauses in the game, at points where they would occur during a real UFC broadcast. But players complained about being shown ads in a $60 game, and about the fact the ads had been introduced post-release, meaning reviewers hadn’t been aware of the feature.

Irish DPA Orders Facebook to Stop Sending User Data to US
Ireland’s data protection authority this week ordered Facebook to stop sending EU users’ data to the US. A ruling from the European Court of Justice earlier this year ruled that the Privacy Shield, a US/EU agreement which provides the lawful basis for personal data transfers for many companies including Facebook, is invalid.

IAB Europe Releases a Guide to SPO
Industry trade body IAB Europe this week released a guide to supply-path optimisation, recommending that more buyers should trim the number of supply-side partners they work with, and giving tips on how to cut waste in their supply chain.

TAG Launches New Accreditation to Tackle Brand Safety
The Trustworthy Accountability Group (TAG), an industry standards body, on Thursday launched a new brand safety certification programme. TAG claims the ‘Brand Safety Certified Program’ is the world’s broadest brand safety certification initiative, with 112 companies certified at launch. These include Amazon Advertising, Facebook, Google, GroupM, Havas, Omnicom Media Group, Samsung Ads, Sky, TikTok, Thomson Reuters, and Twitter. Read more on VAN.

The Week in TV

ITV Launches Media Business Incubator Studio 55 Ventures
UK broadcaster ITV on Monday launched Studio 55 Ventures, an initiative which will see ITV invest in new media businesses geared towards younger audiences. ITV says the startups it invests in will be able to leverage its reach among the 16-35 demographic, in order to get them off the ground. But the broadcaster hopes that in return these businesses will help it remain relevant with these age groups. Read more on VAN.

Mediaset and Vivendi Seek to End Long-Running Dispute
The heads of European media companies Mediaset and Vivendi began talks on Wednesday to try to end their long-running dispute, Reuters reported this week. The two have been at loggerheads since an attempt by Vivendi to buy Mediaset’s TV business Mediaset Premium collapsed in 2016. Since then, Vivendi has been using its stake in Mediaset to frustrate Mediaset’s attempt to build a pan-European broadcasting giant, through a merger of its Italian and Spanish businesses.

HBO Max to Introduce Ads in Q2 Next Year
HBO Max, WarnerMedia’s new streaming service, will introduce its ad-supported subscription tier next year according to a report from Digiday. A marketing survey sent out to consumers by HBO suggests HBO Max will run around two-to-four minutes of ads per hour of content.

RTL’s Freemantle Resumes Majority of Production
RTL’s production arm Freemantle has resumed around 80 percent of production which was paused during the pandemic, group CFO Björn Bauer told Deutsche Bank’s 2020 European TMT Conference. Bauer said he expects to see strong demand for content from streaming services during 2021.

Discovery Buys MediaWorks’ TV Business
Discovery has agreed a deal to buy New Zealand media company MediaWorks’ TV operations, including TV channels Three and Bravo and streaming service ThreeNow.

ProSiebenSat.1 Won’t Lower Ad Rates to Stimulate Demand
German broadcaster ProSiebenSat.1 has decided against lowering its ad rates in order to boost demand, according to a note to investors from Deutsche Bank. ProSieben has been more flexible with buyers in terms of lead in times for bookings, but doesn’t want to dilute the value of its inventory through lower prices.

Netflix CEO Says Advertising is Hard to Break Into
Netflix’s CEO Reed Hastings said in an interview with Variety this week that the company’s decision not to run ads is based on a judgement call that making a success of advertising would be tricky for the company. “Advertising looks easy until you get in it,” he told Variety. “Then you realise you have to rip that revenue away from other places because the total ad market isn’t growing, and in fact right now it’s shrinking.”

DAZN Cuts Staff Amid Financial Difficulties
Sports streaming service DAZN has cut around two percent of its global workforce, the FT reported this week, primarily from its US and Brazil offices. The pandemic has hit the company particularly hard through the cancellation of live sports.

BBC Three Viewing Fell 89 Percent After Going Online Only
Media research company Enders Analysis said this week that BBC Three has seen an 89 percent fall in minutes viewed, after shuttering its broadcast channel and going online-only.

TVPlayer Launches in Spain
Live TV OTT service TVPlayer has expanded into Spain, with both free and premium subscription tiers. The free service offers 14 channels, while the paid version includes extra linear and on-demand channels.

Tokyo Olympics to Go Ahead Next Year With or Without COVID
The International Olympic Committee has said that the postponed Tokyo Olympic Games will go ahead next summer, regardless of the state of the pandemic. The announcement gives at least a measure of certainty to broadcasters which are due to air coverage of the games.

The Week in Publishing

Future Forecasts 2020 Profits to Pass $100 Million
Publishing group Future forecast this week that its total profits for 2020 will come in above $100 million, as the group has performed well despite the pandemic. Future says revenues for the first half of the year were up 33 percent in H1 this year, reaching around $185 million.

EU Says Social Platforms Must Do More to Tackle Fake News
Facebook, Google and Twitter are falling short in their efforts to tackle fake news, according to the European Commission, having agreed to a self-regulatory code of practice two years ago. A report from the Commission says some of the shortcomings boil down to incomplete application of the code by platforms, and some are caused by the inherently limited nature of self-regulation.

TikTok Discusses Options to Avoid Full US Sale
Video sharing app TikTok has been in talks with the US government about alternative options to a complete sale of the company’s US operations. President Trump has ordered TikTok to separate its US operations from Chinese owner ByteDance. But a potential sale has been made more difficult by recent moves from China’s government, according to the Wall Street Journal.

Instagram Tests Reels Tab in Navigation Bar
Instagram has begun testing a tab for Reels, its TikTok-like feature, in its navigation bar. Currently Reels content sits within the regular explore section of Instagram, and the only way to explore Reels is to click on one within Explore, a feature which some users have found confusing.

Twitch Launches New Esports Tool ‘Versus’
Amazon-owned live streaming platform Twitch this week launched a beta trial of Versus, a new tool which allows streamers to organise custom esports tournaments.

The Week for Agencies

US Media Spend in H1 Down 19.1 Percent
Total media spend in the first half of the year was down 19.1 percent in the US, according to data released by Kantar this week. The travel industry saw the biggest drop in ad spend according to Kantar, with spending down 50 percent year-on-year.

Facebook to Start Capping Ad Volume
Facebook has said it will start capping the number of ads a page can run at any one time, in order to better manage performance. While companies may want to run a number of ads in order to test different creatives, running too many limits Facebook’s ability to test which are performing better with much statistical significance. The change is set to roll out between February and summer next year.

Only One Agency Lays Out Race Pay Gap in Campaign Audit
Only one UK agency shared its race pay gap in an audit run by Campaign, the publication reported this week. Campaign asked more than 40 of the UK’s ad and media agencies to share the data, and only Lucky Generals was in a position to do so.

MediaMonks Merges with Dare.Win
S4 Capital-owned agency MediaMonks announced a merger with French digital creative agency Dare.Win. “With shared clients, a shared flexible business model and a shared ambition to disrupt the market, Dare.Win was an obvious choice for us to enter the French market,” said Victor Knaap, CEO of MediaMonks.

Home Depot Reviews its US Media Account
US hardware store Home Depot is reviewing its $444 million media account, according to Adweek. The account has been held by Carat since 2011.

AdGreen Joins the Advertising Association
AdGreen, an initiative which seeks to reduce the environmental impact of ad production, announced this week it has become a part of the Advertising Association. AdGreen says it will measure the carbon footprint of advertising production to figure out where changes need to be made, and equip brands and agencies to cut their carbon emissions.

Hires of the Week

IAB Appoints David Cohen President
Industry body the IAB has appointed David Cohen as its new president, replacing Randall Rothenberg. Rothenberg meanwhile will become executive chairman.

IPG Mediabrands Picks Hermon Ghermay as Global Chief Culture Officer
IPG Mediabrands has picked Hermon Ghermay as its first ever global chief culture officer. Ghermany will oversee Mediabrands’ diversity, equity and inclusion (DE&I) strategy, planning, and execution.

VideoAmp Hires Jonathan Steuer
VideoAmp has hired Jonathan Steuer, former chief research officer at Omnicom Media Group, to help create a new TV trading currency.

This Week on VAN

ITV Launches Media Business Incubator Studio 55 Ventures, read more on VAN

Why Can’t Telcos Make Their Ad Tech Acquisitions Work? read more on VAN

Trade Talks with the US Could Scupper the UK’s Online Harms Bill, read more on VAN

TAG Launches New Accreditation to Tackle Brand Safety, read more on VAN

Ad of the Week

Volvo, For Everyone’s Safety

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