February 5th-February 11th // Estimated Reading Time: 11 minutes

Below is a roundup of last week’s notable industry news, with summaries and our opinions. Two retail media acquisitions! Lots more Q4 earnings! But first, a somber wake-up call (yet again) for the industry… 😕😕

U of Digital Will Be Running A Training Workshop At A Live Event For The First Time Ever.

Join Us At Marketecture Live on March 17th For A Fun Session On The Identity Landscape. REGISTER NOW!

Top Stories 👁️ 

How Big Tech's Ad Systems Helped Fund Child Abuse Online
February 7th, 2025
Source: BBC

Summary: Adalytics strikes again. This time, the research firm found that platforms like Google, Amazon, and Microsoft are serving ads on websites showing child sexual abuse material (CSAM) and adult pornography. The ads were from more than 70 organizations, including MasterCard, Nestlé, Starbucks, Unilever, and the US government. Yikes.

Apparently, Adalytics researcher Krzysztof Franaszek was looking into how US government ads were being served to bots and crawlers when he stumbled upon an image-sharing website where a major advertiser’s digital ads were shown next to sexually explicit images of a child. He reported the website to US and Canadian authorities and documented how it was displaying ads from vendors like Amazon, Google, Criteo, Quantcast, Microsoft, Outbrain, TripleLift, and Zeta Global.

US Senators Marsha Blackburn and Richard Blumenthal fired off letters to the vendors cited in the report to ask questions about how they are vetting websites. Brand safety and verification vendors such as DoubleVerify and IAS are also under fire for this. Media buyers told Digitay that they have received reports from measurement vendors listing the offending websites as “100% brand safe." 🔒

The certification bodies MRC and TAG also received letters asking questions about how they accredit the companies that measure ads on websites that hosted CSAM. Brands and agencies, meanwhile, complained that they often have no idea where their ads are running because the media supply chain is so opaque and complex.

Opinion: What a disgraceful mess. A collective industry failure. Embarassing, shameful, disappointing, you get the point. And there’s plenty of blame to go around. We appreciate Adalytics continuing to shine a light on problems like this so the industry can take immediate action to stop funding abhorrent content through programmatic advertising.

Thanks to Adalytics, and bodies like the ANA, IAB, and others, the industry has made significant progress in the last couple of years towards removing garbage inventory from the ecosystem. MFA sites are being eliminated from the supply chain and SPO initiatives have removed unnecessary middlemen, etc. The mess is being cleaned up, slowly but surely. But what we still don’t talk about enough is how the mess gets started in the first place. If we don’t fix that, we’re always going to be cleaning up messes.

The root cause always traces back to incentives. As long as the industry is economically incentivized in the wrong ways, we will always be cleaning up messes. Here’s a quick rundown of this theory:

1. We still measure media very poorly as an industry.

2. Clicks, views, viewability, engagement, and the like are all flawed proxy metrics for media. And because they are flawed, they can be gamed by bad actors.

3. Companies and people (including those bad actors) get paid based on achieving results according to these flawed metrics.

4. Sure, there’s no exact, ‘right’ answer to measurement, but there are better ways to measure and more thorough ways to gut-check your measurements by triangulating different metrics/methodologies.

5. We don’t care enough collectively, as an industry, to fix this measurement problem. Because, inertia. And because, you know, money.

On one hand, it’s hard to be optimistic because the biggest companies in the industry make money by maintaining the status quo, and many marketers are happy to let it continue because it makes them look good and it makes their lives easier. On the other hand, good folks and companies like Adalytics are calling out the BS more and more, now the government is taking notice, and soon there won’t be anywhere to hide. Hopefully.

The people and companies that figure this out and solve the problem will stand to benefit the most. Be that! Don’t be a willfully ignorant bystander. Or worse, an enabler of the mess.

More Q4 Earnings…

Amazon (👎): Revenue was up 10% to $187.79B, beating estimates—and likely exceeding Walmart's for the first time. Ad revenue was up 18% to $17.3B, missing estimates. Amazon warned AI investments will grow and gave weaker-than-expected guidance. Shares fell 5%.

Pinterest (👍): Revenue was up 18% to $1.15B, beating estimates and the platform's first $1B-plus quarter. Global monthly active users were up 11% to 553M, beating expectations. Global average revenue per user, at $2.12, also beat estimates. Shares rose as much as 20%.

Criteo (👍): Revenue was down 2% to $553M, but net revenue (minus traffic acquisition costs) was up 6% to $334M, beating estimates. Retail media-related revenue was up 25%. Shares rose as much as 23%.

LiveRamp (👍): Revenue was up 12% to $195M, beating estimates. Subscription revenue was up 10% to $146M. The company touted momentum for its Data Collaboration Platform and clean room solutions. Shares rose nearly 7%.

Digital Turbine (👍): Revenue was down 6% to $134.6M, beating estimates. Its net loss was $23M, but the mobile growth and monetization platform had record revenue for its on-device products. Digital Turbine raised its 2025 outlook. Shares rose 82%!

Disney (👎): Revenue was up 5% to $24.7B, beating estimates. Streaming was profitable again this quarter, with streaming ad revenue up 16%, minus Disney+ Hotstar in India. Global subscribers were down 1% to 124.6B, and Disney warned more losses are coming.  Shares fell 2%.

Opinion: Similar to last week, more than 60% of companies this week delivered strong results, sending their shares higher. Interestingly, smaller companies seem to be faring better than their larger counterparts. We saw a bit of this last week too, where Alphabet, Microsoft, and Comcast underwhelmed, similar to Amazon and Disney this week. Perhaps this is the beginning of a redistribution of market share from the triopoly to the broader ecosystem of players? In the next week, we'll hear from The Trade Desk, Reddit, AppLovin, IPG, and Roku. We’ll see if the theory holds up. Stay tuned.

Other Notable Headlines ✍️

Nodals AI Launches As The Latest Custom Algo Replacement For Ad Tech - Aly Nurmohamed, a former Criteo and Permutive vet, has raised $2.1M to launch Nodals, which aims to build custom bidding algorithms for advertisers to help them buy inventory directly from publishers. The London-based company is essentially a transparent ad network that replaces the DSP, SSP, and ad exchange, integrating directly with publishers to create custom identity and audience signals. Advertisers are bidding on the publisher's first-party data, rather than third-party cookies, device IDs, or advertising IDs. Nodals is testing the concept with several UK publishers and up to five large advertisers. Eventually, it may also integrate with DSPs, SSPs, or other platforms. Nodals' angel investors include ad tech luminaries such as AppNexus and Scope3 founder Brian O’Kelley, Permutive Co-founder Joe Root, and Admeld and Sourcepoint founder Ben Barokas.

Did Meta Just Launch a CDP with Signals Gateway? - Meta has spent the last few years quietly developing Signals Gateway, which is being called a customer data platform (CDP) by the CDP Institute. That's not exactly how Meta is characterizing Signals Gateway; it's billing it as a tool to help companies maximize the value of their first-party data. Meta says it "collects, processes, and transmits advertisers' first-party data to their desired destinations." Meta adds that the solution maintains control and privacy since it can be used on Amazon Web Services or Google Cloud Platform, without Meta being able to access the data. Experts are scratching their heads over the move, since the CDP space is undergoing consolidation, with three deals in the last few months alone. But maybe that’s the point? CDPs aren’t really a standalone business, it seems, so perhaps they should just be a feature offered by the big tech platforms.

Google Announces New Integrations for Campaign Manager 360 - Google's ad management platform, Campaign Manager 360, has integrated with The Trade Desk, Adobe, Typeface, Netflix Ads, and Google Ads. The integration with The Trade Desk will enable direct linking between the two platforms, rather than requiring advertisers to download tags from their ad server and upload them to the DSP. The Netflix Ads integration is aimed at simplifying CTV campaign activation, allowing advertisers to serve VAST video creatives on Netflix inventory, making it easier to measure Netflix campaigns alongside other video campaigns. In other Google news, the company has added AI capabilities to search for retailers, driving a 13% increase in daily active users on Google Shopping in December. The capabilities help retailers quickly capitalize on viral shopping trends.

Havas Is Acquiring Retail Media Agency Channel Bakers 🔒 - All the agency holding companies seemingly want a piece of commerce media by acquiring smaller agencies with expertise in the red-hot space. Channel Bakers is one of the OGs in commerce media, having been founded in 2015 to help brands buy ads on Amazon. Channel Bakers is now looking to expand to non-endemic advertisers that don't sell their products online and is hoping Havas will help it make that leap. Havas’s retail media, search, and affiliate marketing unit, Havas Market, will integrate Channel Bakers and the agency's 80 employees into its operations. Terms of the deal weren't disclosed, but commerce media agencies have been hot commodities in recent years. Publicis bought Mars Commerce last year for $600M, and Omnicom acquired Flywheel Digital for $835M in 2023.

Kevel Extends to Walled Garden Retail Media with Nexta Acquisition - Speaking of retail media acquisitions, Kevel has acquired Nexta, a Copenhagen-based startup, which will bring 30 to 40 new employees to the company. Kevel is an ad serving platform retailers use for on-site ads. With the integration of Nexta, Kevel will be able to extend its on-site retail media campaigns to Nexta's off-site retail platforms, including TikTok and Meta. This will give retailers a single interface to run ads across the web and other platforms like YouTube, TikTok, and Facebook. Terms of the deal were not disclosed.

Omnicom Is Getting Ready For A Post-Merger ‘Streamlining’ - Omnicom's proposed IPG acquisition will most likely lead to a lot of layoffs under the guise of "streamlining." If approved, the sale will probably cause redundancies in regional and back-office roles such as administrative, operations, accounting, IT, legal, and HR, but client-facing and revenue-generating roles are said to be safe. Once redundancies are eliminated, the new mega-agency holding company is poised to enjoy significant revenue upside, according to Omnicom CEO John Wren. But was Wren outsmarted in the deal? 🔒 S4 Capital CEO Martin Sorrell, never known to hold back, believes he was, since IPG has predicted revenue will decline in 2025. Perhaps if the losses had materialized sooner, Omnicom could have secured a better deal, according to Sorrell.

Should’ve asked Sir Martin!

Other Notable Headlines
(that you should know about too) 🤓 

Amazon Defeats Claims Over Ads In Prime Video - Prime subscribers had sued Amazon over its decision to make ads the default option for subscribers unless they paid an extra $2.99 a month. Amazon wins.

YouTube Surprise: CEO Says TV Overtakes Mobile as “Primary Device” for Viewing - In YouTube CEO Neal Mohan's annual letter, he called “YouTube is the new television.”

X Adds Magnite As A Programmatic Ad Seller - Magnite joins Google and PubMatic as third-party sellers of X ad inventory.

Snap pursues SMBs with its latest AI-powered tool🔒- The new smart budget optimization feature is aimed at SMBs, which were the “largest contributor" to Snap's 2024 ad revenue growth.

LinkedIn amps up vertical video tools as uploads jump 36% - Video creation on LinkedIn has soared 100%!

Even at $8 million per Super Bowl commercial, ad executives say it’s still bang for your buck - The big game drew 126M viewers in the US.

Experts said this OpenAI ad (that they paid $14M for) was one of the worst. Eh, we didn’t think it was so bad!

Experts also said this Google Gemini tearjerker was one of the best. We agree! This is damn good advertising…

That’s It For This Week 👋

The U of Digital Weekly Newsletter is intended for subscribers, but occasional forwarding is okay!

To subscribe visit Uof.Digital/Newsletters or contact us directly for group subscriptions.

And remember, U of Digital helps teams drive better outcomes through structured education on critical topics like programmatic, privacy / identity, CTV, commerce media, AI, and more. Interested in learning more about how we can supercharge your team?