Drip Sequence💧

In case you missed it:

I sent out a report detailing the comp survey, if you missed the first newsletter the URL for the LookerBI Dashboard can be found right here.

Also I am always open to suggestions to evolve this newsletter, feel free to either DM me on IG or reply back to this email with feedback or with stuff you would want to see in here.

Headline Overviews

• OpenAI strikes search deal with Condé Nast OpenAI has signed a multiyear licensing deal with Condé Nast, allowing it to use content from Condé Nast's brands, such as Vogue and The New Yorker, in its products, including ChatGPT and SearchGPT. This deal reflects OpenAI's strategy of forming partnerships with major publishers to enhance its AI models with reliable information while ensuring proper attribution and compensation for content creators. The agreement is part of OpenAI's broader initiative to collaborate with news outlets as AI becomes increasingly central to news discovery and delivery.

• Netflix deepens ad tech ties with clean rooms Netflix is expanding its advertising business by partnering with Snowflake, LiveRamp, and InfoSum to offer advertisers access to clean rooms, a privacy technology that allows secure data sharing across platforms. This move is part of Netflix's broader effort to enhance its ad capabilities and provide advertisers with more effective tools to reach audiences. Despite these advancements, some advertisers have expressed frustration with the slow growth of Netflix's ad-supported tier, which Netflix continues to develop.

• Exclusive: Google Suggests Buyers Target Teens, Going Against Its Policies Google has been reportedly suggesting that advertisers target teenagers on YouTube by using a group of users labeled as "unknown," which could include under-18 users, despite Google's policy against targeting users under 18 by age, gender, or interests. This practice was first reported by the Financial Times, but Adweek's investigation reveals that it involves more advertisers beyond the Google-Meta arrangement initially identified. Google has stated that it prohibits personalized ads for minors and will take action to reinforce its policies, but concerns remain about the potential for advertisers to reach teenagers, and possibly children, through these "unknown" users.

• TikTok fights for survival in latest filing as ban approaches TikTok is challenging a U.S. law that could ban the app unless it separates from its China-based parent company, ByteDance, arguing that the law represents an unprecedented restriction on free speech. The Justice Department defends the law on national security grounds, claiming that TikTok could be used by China for propaganda and data collection. TikTok disputes these claims, asserting that its U.S. operations are independent and overseen by American company Oracle, while also revealing that a potential security agreement with the White House fell apart before the ultimatum to divest was issued. The ban is set to take effect in January 2025.

• The DOJ Alleged Google 'Destroyed' Relevant Evidence Ahead of Its Antitrust Adtech Trial The DOJ has accused Google of intentionally deleting messages relevant to its upcoming adtech antitrust trial by using a “communication with care” policy that allowed chats to be auto-deleted. Judge Leonie Brinkema criticized Google's actions as an "abuse of privilege" and indicated she would consider adverse inferences against Google during witness testimonies. The DOJ argued that Google failed to preserve evidence as required, while Google contended the DOJ was aware of its policies and raised objections too late.

• Omnicom consolidates creative agencies globally under Omnicom Advertising Group Omnicom has launched the Omnicom Advertising Group (OAG), consolidating its creative agencies like BBDO, TBWA, and DDB under a unified leadership team led by Troy Ruhanen as CEO. The new structure aims to strengthen agency brands while leveraging global scale to share innovations, tools, and talent across its network in response to digital transformation and AI. The approach allows for flexibility in meeting client needs without merging or eliminating individual agencies, maintaining strong agency cultures and identities.

Overview of AdTech Earnings Report

Meta

Revenue: Increased YoY by 22% from $32 billion to $39.1 billion.

Takeaway: It’s been about a year since Mark Zuckerberg has declared the “year of efficiency” which quelled a lot of the “Day In My Life” videos on TikTok from Meta employees (but not posted on Reels ironically) combined with substantial layoffs and Meta still stands dominant in the social ad space, granted given our social media landscape has really limited our options. It does appear that the meme of Meta reps “ghosting clients” in the ad industry is now driven by a leaner work force of sales reps prioritizing big spending clients, or nurturing existing relationships that have provided Meta a steady flow of income in the form of ad spend.

For user metrics, Meta reported that it had 3.27 billion daily active people in the quarter which encompasses people accessing any of the apps within the Meta ecosystem at any given time. At the surface level it looks like Meta is playing gymnastics with DAU metrics but this really is just a testament of how integrated user identity is across all their platforms.

Snap

Revenue: $1.24 billion, up 16% YoY but below quarterly expectations

Daily Active Users: 432 million

Takeaway: Snap’s revenue was up but it compared against Meta, it did not go up at the same rate. Snapchat has been around for quite a while now and with the ad industry seemingly flush with cash this year Snap’s 10% increase in revenue pales in comparison to Meta’s 22% increase in revenue. The only reason why we allocate money over one platform in favor of another is due to performance, if there is one thing Snap hasn’t really been able to achieve in comparison to it’s competitors is the ability to tie meaningful ROAS to the ad spend on the platform.

On my last earnings report Snap expected headcount and personnel to grow modestly throughout the year and would not do anything to rock the boat while double down on improving their ad products but it appears Snap has not been able to deliver viable products to improve performance advertising on mobile to the extent that Meta has.

Alphabet

Revenue: $84.74 billion

Takeaway: Ad spend on Google continues to grow, however the rate of growth on ad spend, most notably on YouTube, suggests a lot of advertisers are shifting their ad spend over to TikTok when it comes to deploying pre-rolls. TikTok still is not publicly traded so we will have no idea what their quarterly revenue from ad spend looks like until that happens.

This has not been a great summer for Google, to be honest, with increasing DOJ scrutiny and OpenAI pulling off the gloves and declaring a SearchGPT to rival Google Search, as well as TikTok potentially eating Google’s lunch money in video ad revenue; these challenges are putting pressure on Google to innovate faster, diversify its revenue streams, and defend its dominance in both search and digital advertising, all while navigating regulatory headwinds that could potentially kick them in the balls (if you look up their stock price, it already kinda has).

The Trade Desk

Revenue: $464 million

Takeaway: TTD’s revenue may pale in comparison all the other numbers mentioned above but they continue to outperform with their emphasis on data-driven programmatic tech (also shout out to them nearly winning March Chadness 5 months ago). It appears that CTV is a significant growth area with key partnerships in major streaming platforms like Disney+, Netflux, Roku to name a few.

TTD was going pretty hard on UID2 as a new identity framework but then Google pulled an Uno reversal card on all of us and walked back on so we’ll see how that goes. Honestly though, I feel like this benefits TTD since nothing changes and all our existing programmatic strategies can keep chugging along.

Current Flow of Ad Spend

I’ve always been a big fan of keeping track of earnings reports from the companies I throw my ad dollars at; it really does paint a bigger picture to see what everyone else is doing, at the very least. For the most part, ad spend is up across the board, but what separates this quarter’s earnings season is the fact that Meta stood out for the fastest rate of ad spend growth, whereas everyone else’s was kind of limp in comparison, despite the fact it was still up.

Google ditching the third-party cookie shenanigans was met with a universal sigh of relief (and some saltiness over hours wasted on POVs) in my DMs, but ultimately it means we will continue to conduct our activity as business as usual, as we are all still dependent on these platforms.

From my top-down view, last quarter’s earnings season (the months coming out of winter) had ad spend up all across the board. This recent quarter’s earnings season (the months transitioning from spring to summer) reflects that ad spend hasn’t just been increasing, but has become more selective and strategically driven by a need for efficacy.

Why Is Ad Spend (Still) Going Up?

In spite of the continued increase in the cost of living, consumer demand remains robust. Until something major happens economically to dampen the optimism among consumer brands, ad spend is just going to keep going up. The layoff news in my DMs has slowed down, so organizations are just working a lot leaner while being flush with cash.

What is interesting is seeing the selectiveness in ad spend (primarily in favor of Meta this recent quarter), which isn’t that much of a surprise:

• TikTok’s future is rather nebulous with attempts to ban it, although I personally don’t think it will go down, and neither do a majority of TikTok employees that I have interacted with.

• Google is facing regulatory hurdles and a new front is opening up in the war for search ad dollars, conveniently as the majority of people voiced displeasure over changes to their SERPs.

• Snap is still primarily used by children or demographics with low spending power (like college kids); a lot of ROAS has been tied to affluent people who straight-up don’t care about how much things cost and will still buy things.

Instagram is becoming a very popular destination for news and memes regarding world events. I mean, this entire newsletter and my meme page spawned from Instagram, which is why you are reading this newsletter right now. Ad spend will always follow where the eyeballs are, and lately, it’s been primarily Instagram and TikTok. Coupled with the fact that a lot of younger kids don’t even go on websites to obtain information, it should not be a surprise that social media is going to take the lion's share of ad spend (except for Snapchat).

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