ITP 2.0 and Stabilizing Adtech
Criteo, one of the few publicly-traded adtech companies reported its holiday quarter earnings and we’re seeing a trend.
But let’s look at the Q4 earnings first. Criteo posted a $670 million in revenue, which is a 1% decline than the last quarter of 2017. Most importantly, it is the third-straight decline since the enforcement of the EU’s GDPR.
When asked, Criteo executives said what they did before – GDPR didn’t impact the bottom line as expected and the company is stabilizing. Adweek notes that the data-privacy legislations have cost the company $5 million.
What’s the trend?
For reference, let’s consider the holiday quarters of 2017 and 2018. The company had “1,500 large publishers” in ‘17 compared to 3,500 at the end of Q4 ‘18. Clients (advertisers) went from 18,000 to 19,500 and the traffic acquisition costs increased by 2%.
Even with the increased customer base, the company’s revenue stayed flat and we couldn’t help but notice the privacy laws. Without a doubt, CPMs were down. Though advertisers spent on Criteo, they paid less.
At the end of the day, Criteo’s take rate depends on the total spending, not just on the number of clients they’ve added.
Though Criteo acquired manage to lessen its reliance on cookies, they need an ID solution (perhaps, like The Trade Desk) to increase audience match rates. Currently, the majority of the clients on Criteo would be relying on cookie retargeting and that’s a big problem for both the company and the industry as a whole.
TechCrunch March Towards the Paywall
We won’t bury the lede. TechCrunch, an O & O property of Oath Verizon Media is coming up with a subscription service named ‘Extra Crunch’.
As you know, TechCrunch isn’t the first and it surely won’t be the last.
What’s being offered?
Lists – a new tool where you could save articles, profiles, and companies to refer,
And, of course, ad-free experience.
You have to pay $15 a month or $150 a year.
If it sounds like a surprising move, think again. Verizon, the parent company of Verizon Media wrote down $4.6 billion last year and cited the “increased competitive and market pressures throughout 2018” as the reason for the write-down.
The company acknowledged that it expects to receive middling revenue figures in the future. So, what’s the next move?
Simple, start a subscription service and try diversifying revenue. Of all media properties, Verizon chose TechCrunch because of the fast-growing readerships (ahem, startups), events, and CrunchBase.
How the publisher will keep the free content invaluable while maintaining a premium service? Is it going to be a sitewide-paywall in some time? We all know turning to paywalls isn’t easy.
– Is the audience ready?
Anywhere between 5,000 to 10,000 people attend TechCrunch’s Disrupt event every year and 44 million people visit CrunchBase (free version) to learn about a startup. Some might pay, but most won’t.
Let’s see how the publisher navigates the issues.
Google Signs to Join IAB Europe’s Consent Framework
MarTech Today revealed that IAB Europe will release an updated consent framework later this year and Google will finally join the framework.
Is Google going to implement the IAB Consent Framework?
That’s the question we asked and tried answering months ago. Google spokesperson said, “We are in the process of formalizing our participation in the framework and hope to integrate as quickly as we can.”
Yeah, it sounded like a cliche. But now, IAB Europe is updating the consent framework based on the feedback from the publishers and of course, Google and will be announcing the latest TCF version this year.
To be frank, we have experienced a lot of hiccups. From EU data watchdog suing adtech firm to authorities complaining that the RTB system isn’t GDPR-compatible, the consortiums have to deal with several issues. So, we expect the latest version to patch up the holes (if any) left in the framework so that Google can join the framework without any hesitation.
Why Google is so cautious?
Well, besides getting fined £44m and posing as one of two privacy watchdogs’ favorites (the other one is ‘not-a-media company’ Facebook), Google has the right to be concerned. In addition, it has to figure a way out of EU’s copyright law which essentially asks aggregators to get in a partnership with content creators to use their content.
As we always say, it’s only a matter of time for any of the 28 states to notice something wrong with Google and sue the firm again. Google doesn’t like to be open without raising its standards up to the maximum level. It worries IAB’s TCF might put the firm in danger and we believe it will be solved when the latest version hits the shed.
Dotdash – How to Post $131 Million Annual Revenue
Dotdash, a publisher known for balancing its ads and content to improve user experience posted an annual revenue of $131 million. That’s a 44 percent increase from the previous year. If you aren’t living under the cave, you probably heard about the recent media layoffs.
Several media companies laid 2000+ employees (cumulative) to cut costs and realign their teams to have a financially strong year ahead.
Then, how the Dotdash managed to increase its revenue by over 40 percent?
We know the answer – Impressive retention rates.
The publisher said, 19 of the 20 top spending advertisers came back to advertise on its sites. In case you don’t know, 87 percent of the total revenue is from advertising.
Now, how can you maintain such retention rates?
“There is this incredible focus right now [among advertisers] on results. If you perform really well, people will come back.”
– Neil Vogel, CEO of Dotdash.
But how can you have big advertisers lining up to buy your impressions?
Create content that serves a purpose. Advertisers don’t want to spend unless you offer them what they need – Invaluable impressions. Without creating the best content, you can’t possibly attract the readers and capture their attention to show your own content let alone ads.
“It’s not tricks. It’s no gimmicks. It’s just, ‘Let’s make the very best content we can possibly make and not compromise.”
A recent Digiday research says that marketers are under pressure to make decisions based on the data. They are asked to connect marketing spend to the revenue generated to see the impact. This means you can’t offer average ad performance and expect to see increasing returns.
Specialize yourself in a niche. Dotdash went from 0 to 5 to 15 sites. Neil Vogel and the rest of the team had their bets on verticals. After all, you can better serve both readers and advertisers if you are in a niche.
Moments That Matter
Amazon is testing a new ad format that entices users to leave a review – Digiday.
Where are your new readers going to come from this year – News aggregators topped the list and social networks went down – NiemenLab.