The WIR: Ofcom Warns of ‘Tipping Point’ for DTT, Disney and Walmart Partner for Closed-Loop Attribution, and WBD Reports a 7 Percent Drop in Ad Sales

Tim Cross 10 May, 2024 

In this week’s Week in Review: Ofcom says UK may need to prepare for a DTT switch off, Disney partners with Walmart on targeting and attribution, and WBD sees a continued slide in ad revenues.

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Ofcom Warns of ‘Tipping Point’ as Terrestrial TV Nears Point of Financial Unsustainability

Ofcom published a new report this week on the future of digital terrestrial television (DTT) technology used for broadcasting traditional linear TV, warning that the country is approaching a tipping point where supporting DTT may be financially unsustainable.

As consumers move to streaming, use of DTT is naturally falling. This is expected to continue – watching on scheduled TV channels through DTT and satellite is forecast to drop from 67 percent of total long-form TV viewing in 2022, to 35 percent by 2034 and 27 percent by 2040. As this happens, broadcasters fear it may be economically unsustainable to continue supporting DTT. But this could cut off TV access for those who haven’t got the means or understanding to stream TV.

Ofcom recommended three strategies. The UK could invest in a more efficient DTT service, which could be sustained if audience numbers for DTT were supported with new equipment and more efficient broadcasting signals. Alternatively, the DTT platform could maintain a minimum number of ‘core’ channels, in order to cut costs. Or finally, the UK could plan for DTT to be switched off, supporting households to make sure no one is completely cut off from TV access.

Disney Partners with Walmart for Closed Loop Attribution

Retail media partnerships are likely to be a big focus at this year’s UpFront TV sales events, and Disney this week got in early, announcing a new partnership with retail giant Walmart which the two say will provide closed-loop attribution for campaigns run on Hulu and Disney.

The deal will link up Walmart’s customer insights with Disney’s own audience graph via a clean room, enabling advertisers to target using Walmart’s data, and then measure when streaming audiences which have seen those ads then went on to buy products. These buys will be available programmatically through private marketplaces. Disney says proof of concept trials will start in Q2 with select brand categories, with plans to roll these capabilities out to all eligible advertisers in the coming months.

“Simply put, we are enabling advertisers to plan, buy and measure in an automated way while bringing marketers closer to understanding purchase intent and true outcomes,” said Jamie Power, SVP of addressable sales at Disney. “Walmart has incredible data insights for planning and measuring, that when combined with the most impactful streaming environments— is a winning combination for advertisers.”

Warner Bros. Discovery Looks for Advertising Improvement in Q2 After Tough First Quarter

Warner Bros. Discovery reported total company ad revenues down by seven percent year-on-year in Q1, with ad revenues for its linear networks segment down by 11 percent, while direct-to-consumer ad revenues were up by 70 percent. The overall fall in ad sales contributed to a seven percent total drop in revenues for the company.

The company said ad revenues for its linear channel were hit by falling audiences, and a weak linear ad market in the US and Latin America, though the company said linear revenues actually rose in Europe. Poland, Italy, and Germany were particularly strong, according to Warner Bros. Discovery’s president and CEO David Zaslav.

But ad revenues for its streaming products continue to grow at pace. Zaslav said that revenues here are being helped by the company taking a more holistic approach to selling ads across linear and streaming, helping advertisers find incremental reach on its direct-to-consumer offerings. He added that the broadcaster is seeing sequential improvement in Q2.

The Week in Tech

Ofcom Orders Tech Firms to “Tame Aggressive Algorithms” to Protect Children Online

UK communications watchdog Ofcom has instructed tech firms to introduce robust age-checks and stop their algorithms recommending harmful content to children, as part of its draft Children’s Safety Codes of Practice. The measures fall under Ofcom’s remit to enforce the Online Safety Act, which imposes new duties on social media companies, apps and search engines that can be accessed by children. “In line with new online safety laws, our proposed Codes firmly place the responsibility for keeping children safer on tech firms,” said Dame Melanie Dawes, Ofcom Chief Executive. “They will need to tame aggressive algorithms that push harmful content to children in their personalised feeds and introduce age-checks so children get an experience that’s right for their age.”

ShowHeroes Launches New Video Platform ShowHeroes MAX

Video ad tech business ShowHeroes this week announced ShowHeroes MAX, a new platform which it says will help produce and monetise digital video content using cookieless technology. ShowHeroes says MAX offers publishers and advertisers access to a library of over 150,000 videos in 14 languages. These can be placed and targeted using SemanticHero, ShowHeroes’ contextual targeting tool.

One of the Max solution’s first adopters is Berliner Zeitung. “Using ShowHeroes’ new MAX service, we have access to an impressive pool of tailored video content and privacy-preserving contextual targeting,” says Edzard Maske, managing director and responsible for marketing at Berliner Verlag. “MAX was easy to integrate into our advertising solutions and offers extensive access to data and reporting. With this combination, we want to achieve our goals in a competitive and cookie-free future.”

Kargo Makes CTV Moves with VIDAA Partnership in Europe

Kargo this week announced a new partnership with VIDAA, a smart TV operating system (OS), offering the ad tech firm’s video and display formats across Hisense TVs. The collaboration grants advertisers in Spain and Germany exclusive access to Hisense’s content selection portal, alongside other original equipment manufacturers (OEM) running VIDAA, including Toshiba, Loewe and NIKAI. The direct-to-glass formats enable advertisers to reach audiences while they are selecting and browsing content across apps, according to Kargo, creating opportunities for high recall and engagement. Read more on VideoWeek.

Raptive Partners with Optable for Privacy-Focused Solutions

Data management and collaboration business Optable this week announced a partnership with Raptive, which will see the latter offer data collaboration tools powered by Optable to its advertising partners. These tools will enable advertisers to use their first-party data to reach audiences which Raptive has access to. “Our collaboration with Optable represents a key part of our move towards privacy-centric advertising solutions that safeguard user data while enabling continued revenue growth,” said Paul Bannister, chief strategy officer at Raptive.

DoubleVerify Stock Falls After Cutting Full-Year Guidance

Shares in DoubleVerify, a measurement and verification business, plummeted 40.5 percent on Wednesday, in the wake of the company’s Q1 earnings report. The ad tech firm cut its full-year revenue guidance by 3.9 percent, pointing to “uneven spending patterns” among large retail and CPG advertisers. DV’s Q1 revenues beat expectations however, rising 15 percent YoY for a total $141 million.

Reddit Shares Jump at Positive Outlook

Reddit stock fared much better following its own Q1 earnings report, the social sharing company’s first since going public in March. Reddit beat Wall Street estimates with a 48 percent YoY rise in revenues to reach $243 million, and forecast $240-255 million in Q2, compared with an estimate of $223.8 million. The company’s shares climbed 16 percent following the report.

The Week in TV

Digital Revenues Drive Overall Ad Growth for ITV, but Linear Continues to Fall

ITV reported its Q1 financial results this week, showing advertising revenues up three percent year-on-year. This was driven by growth in digital ad revenues, up by fourteen percent, while comparisons with last year’s results show linear ad revenues were down year-on-year. The next quarter is predicted to be even stronger, boosted by ad spend around the upcoming men’s European Championships. ITV expects Q2 ad revenue growth of 12 percent year-on-year, with H1 revenues up 8 percent. Read more on VideoWeek.

RTL Grows Ad Revenues in Further Signs of European TV Recovery

RTL has posted double-digit growth in its earnings for Q1 2024, continuing a bounceback in the European TV ad market. Group revenues were up 2.6 percent YoY, totalling €1.3 billion. The German broadcasting giant noted the gains were primarily driven by TV advertising and streaming revenues. Total ad revenues across the group, which includes RTL’s radio, print and TV operations, increased 10.1 percent YoY, reaching €686 million during the quarter. And TV made up the lion’s share of ad revenues at €528 million, also rising by 10 percent YoY. Read more on VideoWeek.

Disney Turns Streaming Profit in Earnings Roller Coaster

Disney posted its first profit for its streaming business on Wednesday, reporting Q1 operating profits of $47 million, compared with a $587 million loss the previous year. The media giant cited price hikes on Disney+ and Hulu, as well as subscriber growth at Disney+ and higher ad revenues. However, Disney stock tumbled 9.5 percent as investors focused on weak outlook for its theme parks business.

NBCUniversal Expands Retail Media Offering with Instacart Partnership

International broadcaster NBCUniversal has announced a new retail media partnership with ecommerce business Instacart, which will enable NBCU advertisers to target and measure campaigns using Instacart’s first-party data. The two companies say the new offering, expected to launch in Q2 on NBCUniversal’s streaming content, will enable advertisers to specifically target in-market consumers, using Instacart’s data. Instacart runs grocery delivery services via an app in the US and Canada, covering a range of national retailers, giving it a lot of data on users’ purchasing habits. Read more on VideoWeek.

Amazon Announces New Shoppable and Pause Ad Formats

Ahead of its UpFronts debut, Amazon announced this week it is introducing three new shoppable ad units for Prime Video. Currently available to select advertisers before a wider launch later this year, the new formats are:

  • Shoppable carousel ads: 15- and 30-second spots with a shoppable overlay, allowing viewers to browse a brand’s products using their remote
  • Brand trivia ads: 15- and 30-second spots with a shoppable overlay, prompting viewers to interact with an instream video ad by answering questions to unlock rewards or product discounts
  • Pause ads: when their stream is paused, a creative overlay will prompt viewers to interact with products by clicking “learn more” or “add to cart”

Disney and WBD Announce Disney+, Hulu and Max Bundle 

Disney and Warner Bros. Discovery (WBD) have announced a bundle offer for their combined streaming services, Disney+, Hulu and Max. The announcement marks something of a return to the bundling model of pay-TV, as the competitors seek to simplify their streaming offerings for consumers. The pair said the bundle would be available this summer in the US, with both ad-supported and ad-free plans available.

Max to Launch in European Markets with Canal+ and Amazon Prime

Meanwhile in Europe, WBD announced that Max will launch in France and Poland on 11th June, as part of a deal with French pay-TV operator Canal+. The streaming service will also launch in Belgium and the Netherlands on the same date, and will be carried by Amazon Prime in France and Spain. “Warner Bros. Discovery is still in the early days of our streaming growth,” said JB Perrette, CEO and President of Global Streaming and Games at WBD. “With almost half of the global addressable market still to come, we are excited and optimistic about the road ahead.”

The Week for Publishers

New York Times Ad Revenues Were Down in Q1, but Demand is Picking Up in Q2

The New York Times said that total ad revenues were down by 2.4 percent year-on-year, as print revenues fell (though not by as much as had been expected). Despite this, total revenues were up by 5.9 percent year-on-year, thanks to healthy growth in subscription revenues.

Executive said that some advertisers continue to avoid running ads next to hard news, which is also affecting revenues. But digital ad revenues were up by three percent, and the company said Q2 is looking promising with bookings rising. The publisher expects low single digit growth in ad revenues in Q2, and high single digit growth in digital ad revenues specifically.

News Corp Revenues Fall Due to Poor Ad Performance

News Corp reported total revenues down by one percent year-on-year for the first quarter of the year (which it counts as Q3 for its fiscal 2024). The company blamed the fall primarily on lower advertising revenues within its News Media Segment (which doesn’t include the Wall Street Journal or Barron’s, which it also owns. Within News Media, ad revenues were down by 13 percent. News Corp said this fall was driven by lower print advertising revenues in Australia, and falling traffic at some of its publications due to lower referrals from tech platforms (see below).

Referrals from Tech Giants Continue to Fall for Publishers

Falling traffic from tech giants has been cited as a cause of lower page views, and therefore ad revenues, by a number of publishers recently. And news from both Google and Meta this week suggests this trend is continuing, according to reports from Press Gazette.

Google’s latest updates to its search algorithm resulted in the majority of leading publishers appearing less frequently in Google searches, according to data from Sistrix. Meanwhile data from Similarweb and Chartbeat showed that publisher referral traffic from Facebook fell by 50 percent over the past year.

Dotdash Meredith Signs Partnership with OpenAI

US publishing group Dotdash Meredith is the latest publisher to sign a partnership and licensing deal with one of the AI giants, penning a deal with OpenAI. The deal will see Dotdash Meredith’s content appear (attributed) in ChatGPT responses, and it will be used to train OpenAI’s large language models. OpenAI meanwhile will use its AI tools to help improve Dotdash Meredith’s D/Cipher intent targeting advertising solution.

Sundial Media Group Plans More Acquisitions After Buying Refinery29

Publisher holding group Sundial Media Group, which owns ESSENCE, Girls United, and AFROPUNK, this week completed its deal to acquire Refinery29 from Vice Media Group. Meanwhile the Wall Street Journal reported that Kirk McDonald, previously CEO of GroupM in North America, has been appointed as Sundial’s new CEO, tasked with leading further expansion through M&A.

The Week For Brands & Agencies

S4 Capital’s Revenues Down 20 Percent in Q1

Marketing business S4 Capital released its Q1 financial results this week, reporting that revenues were down by 20 percent year-on-year in Q1, as a slow ad market continues to bite. Net revenues meanwhile were down by 15 percent. Executive chairman Sir Martin Sorrell said clients, particularly in the tech sector, are continuing to be cautious in their spending.

Stagwell’s Assembly Wins Fossil Group’s Media Account

Fashion business Fossil Group has named Stagwell-owned agency Assembly as its global integrated media agency after a competitive review. Assembly will take charge of media efforts across paid, earned, and owned media channels, as part of a strategic effort from Fossil Group to unify its global media initiatives across its portfolio of brands.

Omnicom Expands India Presence with Four New ‘Centres of Excellence’

Omnicom Group has announced it is launching four new ‘centres of excellence’ in India, with three campuses opening in Bengaluru, Chennai, and Gurugram, and a fourth in Hyderabad planned for October. Omnicom says the campuses will house its growing pool of talent in India in collaborative environments, and the agency group says the investment signals its commitment to growing its presence in India.

The Hershey Company says Brand Investment is Determined by ROI

US snack maker The Hershey Company’s president Michele Buck said on an earnings call this week that unlike many other brands, it doesn’t aim for a set level of marketing spend as a percentage of net sales. Rather, the company allocates ad dollars each year by looking at the ROI currently being driven by advertising across different channels. “Every year, we do adjust [marketing spend] based on what we’re seeing in the returns, where the opportunities are, what kind of news we might have that we want to support”, she said.

All In Reveals Updated Actions for Black Talent, Disabled Talent, and Social Mobility

All In, an industry initiative aimed at increasing diversity and inclusion in advertising, announced three new actions focused on Black talent, disabled talent, and talent from working class backgrounds at the LEAD North Summit this week. The new actions are:

  • Invest in a sponsorship programme: Companies are asked to invest in a sponsorship programme, whether internal or external, or showcase how they are attracting and retaining Black talent within their organisation.
  • Ask staff or visitors if they have any accessibility needs: Companies are asked to provide the opportunity for current staff or visitors to their premises to share if they have any accessibility needs.
  • Adopt the new Early Careers Social Mobility toolkit: Companies are asked to assess how they are developing working class talent, with a focus on those in the early stages of their careers, through a toolkit developed by the All In Social Mobility Working Group.

US Advertising Employment Rose by 2,500 in April

Total US employment in advertising, pubic relations, and related services rose by 2,500 in April, according to AdAge’s analysis of data from the US Bureau of Labor Statistics. This is 20,200 more people employed in the sector than this time last year.

Hires of the Week

Assembly Hires Pele Cortizo-Burgess as Global CSO

Stagwell-owned media agency Assembly has hired Pele Cortizo-Burgess as its first global chief strategy officer, Campaign reported this week. Cortizo-Burgess joins from Interpublic Group-owned agency Initiative.

This Week on VideoWeek

NBCUniversal Expands Retail Media Offering with Instacart Partnership

Exclusive: Kargo Makes CTV Moves with VIDAA Partnership in Europe

RTL Grows Ad Revenues in Further Signs of European TV Recovery

UpFronts and NewFronts in Review: Google, Snapchat, Paramount and More

Digital Revenues Drive Overall Ad Growth for ITV, but Linear Continues to Fall

VideoWeek Podcast #44, Ryan Spicer, Atmosphere

Ad of the Week

PG Tips, Rock Solid

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About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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