U of Digital Newsletter - 9/25/24 (premium)

September 18th-September 24th // Estimated Reading Time: 11 minutes

Below is a roundup of last week’s notable industry news, with summaries and our opinions. Two weeks of #USvGoogle is in the books, and a big-time acquisition in agency holdco land!

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Top Stories 👁️ 

Publicis acquires Mars United Commerce to fuel full-funnel marketing
Source: Marketing Dive
September 23rd, 2024

Summary: The deal for Mars United—billed as the world's largest independent commerce marketing company—is reportedly worth $600M. Mars United, with more than 1,000 employees, offers extensive commerce media expertise, consulting services, and shopper intelligence data. The deal will help Publicis strengthen its full-funnel marketing capabilities, develop better strategy, insights, and measurement, and help the Paris-based agency holding company deepen its hooks in red-hot commerce media. 

There are numerous possibilities for how Publicis can leverage Mars United’s assets and expertise. For example, Publicis plans to combine Mars United's shopper data with Epsilon’s first-party data to provide more visibility into the shopper journey. Publicis can also marry Profitero's commerce and operations sales data with Mars United’s assets to deepen its expertise and understanding of online and offline commerce marketing performance. 

Publicis has been very acquisitive in recent years. For example, it bought Epsilon for $3.95B in 2019; Profitero for $210M in 2022; ecommerce company Corra for an undisclosed sum in 2023; and Influential, the world's largest influencer marketing agency, for $500M in July. And in 2021, Publicis acquired retail media tech platform, CitrusAd.

Deal Grades:
Publicis: B+
Mars United Commerce: A+

Opinion: Wow, what an incredible outcome for Mars United Commerce! The agency holding company arms race continues. Remember: late last year, Omnicom acquired Flywheel Digital for $835M.

The retail media network (RMN) market is coming out of a 2-year run where 30+ RMNs launched on the back of COVID-induced ecommerce growth, signal loss in digital advertising, and the ad tech industry searching for its next, big growth vehicle. While standing up an RMN has become mission-critical for retailers trying to compete with the Amazons and Walmarts of the world, standing up an RMN is NOT EASY. Just ask Gap Inc.

Ad tech intermediaries like Criteo, The Trade Desk, and Yahoo have pounced on the opportunity to aggregate data and inventory from retailers who don’t want to build on their own. However, we believe that many retailers will continue to try in order to minimize tech dependencies and maximize their margin (and many will likely fail). Publicis is betting that Mars can help them succeed, and in turn, help Publicis grow in an extremely competitive, low-margin, slow-growth agency market.

When all is said and done, we believe there will only be a few independent, fully in-housed retail media networks standing (e.g. Amazon, maybe Walmart, who else?), and perhaps 2-3 large ad tech intermediaries. Which means that more consolidation is coming. The other major holdcos are keeping a close eye on all of these deals and may decide to get in on the action at some point. Big tech is always looming. Microsoft has divested PromoteIQ and chosen to partner with Criteo. Criteo was also rumored a few weeks ago to be discussing a merger with Skai in a deal "north of $500M" in value. That price tag just went up.

More action to come!

This opinion was written in collaboration with U of Digital Retail Media Expert, Justin Sparks.

Update On The Most Consequential Trial In Advertising History—#USvGoogle

We’re in the middle of the third week of Google’s ad tech antitrust trial. The US Department of Justice rested its case on Sept. 19, ending with a few professors who testified about their analyses of Google's businesses and monopolistic behavior. Just as Google kicked off its defense in an Alexandria, Virginia, courtroom, the company won a separate antitrust fight in Europe. Google is fending off antitrust regulators on several fronts both in and out of the US.

Who Testified: 

• Scott Spencer, Google’s former director of product management

• Matthew Wheatland, CDO of Daily Mail

• Jonathan Bellack Google’s former director of product management

• Sam Cox, Google’s former product manager for authorized buyers, EB, OB, AdX

• Michael Shaughnessy, COO at Kargo, Bauer Excel Media’s former VP of revenue 

• Robin S. Lee, Harvard professor of economics

• Scott Sheffer, Google’s VP of publisher partnerships

Important Revelations: 

• Google, As Well As Advertisers, Benefit from Independent Ad Tech, Antitrust Emails Show - In Google’s own words: “In the auction ecosystem, we appear to be running a buyside-subsidizes-sellside model: we are artificially handicapping our buyside (GDN) to boost the attractiveness of our sellside (AdX).” 

• In relentless pursuit of power and profit, Google leadership directives compromised even well-meaning efforts to serve interests of publisher customers - When Google's sell-side product team wanted to make its Exchange Bidding product “as much better as possible” than header bidding, Google leadership ordered them to instead aim lower for "slightly better."

• Google anticipated antitrust consequences - Senior Google executives have viewed a breakup as an likely prospect for almost five years, notes privacy advocate Johnny Ryan.

• The big finish - The DOJ wrapped up its case last week. A few new nuggets: Without Google Ads, AdX would be an average industry ad exchange; if Google didn't abuse its dominant position, AdX’s take rate would be 16.2%, not 20%, according to a Harvard professor.

• Oops - When presenting its defense, Google shared a terrible flowchart to prove it's not a monopoly, but it sorta backfired by visually illustrating just how dominant Google is in digital advertising.

Important Opinions: 

What’s Next: Google could wrap up its defense this week! 

Ongoing Daily Coverage: Marketecture’s “The Monopoly Report”; Jason Kint’s Twitter account;  USvGoogleAds.com (Check My Ads Coverage)

Related Google News: 

• Google Faces EU Ultimatum in Fresh Attack on Search Dominance - The EU is getting ready to charge Google with violating the Digital Markets Act for how it displays competitors’ search results across Google Flights, Google Hotels, and other services.

• Google wins court challenge to the EU’s $1.7 billion antitrust fine over ad product - The EU previously accused Google of using restrictive clauses in contracts with third-party websites to prevent competitors from running search ads on their sites.

• Google offered to sell part of ad tech business, not enough for EU publishers - It was the first time that Google has offered to sell an asset as part of an antitrust case. But Google's proposal to sell off AdX didn't stop the EU from charging the company a fourth time for antitrust violations; this one alleges Google gives its advertising services an unfair advantage.

Other Notable Headlines ✍️

Your feedback in action: Upcoming Privacy Sandbox developments - A couple months after announcing that it won’t pull the plug on third-party cookies after all, Google's Privacy Sandbox team provided their first significant update. The team announced three proposals that it will incorporate into the Protected Audience API, which is used for retargeting use cases, based on industry feedback. The first, enhanced deal support, will add fields to private marketplace deals in Protected Audience auctions to securely include deal ID and seat ID information to help with accounting and reporting. Another proposal for adding new “clickiness” signals to the API for bidding would let advertisers register a device's views and clicks with the browser, providing privacy-centric insights into whether a user is likely to interact with an ad. The last proposal would extend the interest group lifespan from 30 days to 90 days to support advertisers selling products with a longer sales cycle. This change means that a user's website activity may impact the Protected Audience ads they are served for up to 90 days after their last visit to that site.

Roku Launches Its Own Self-Serve Ad Platform - CTV advertisers can use Roku Ads Manager to easily buy and optimize their CTV campaigns across all streaming inventory available on Roku, including from Netflix, Prime Video, Max, and Peacock. Advertisers can target by specific geolocations, TV networks, or audience segments, import their creative assets from other channels, and control their budget allocations. With growth marketers in mind, Roku Ads Manager also lets advertisers optimize their campaigns based on reach or outcomes, and offers  attribution from mobile measurement partners such as AppsFlyer. Advertisers will be able to access more traditional 15- and 30-second spots alongside interactive and performance-oriented Action Ads through Roku Ads Manager. A Shopify integration also lets merchants run shoppable ads that enable purchases with Roku remotes. Note: this is simple, self-service ad buying tool (like Facebook Ads Manager) focused on SMBs and mid-market advertisers, NOT an enterprise-level DSP (like Roku’s OneView)

FTC Blasts 'Commercial Surveillance Ecosystem,' Calls For New Laws - The US Federal Trade Commission (FTC) has released a report examining the data collection practices of social media and streaming video services such as Meta, Amazon, Twitter, YouTube, TikTok, Discord, Reddit, and Snap. Not shockingly, the report found that these companies collect a "staggering" amount of personal data to serve behaviorally targeted ads. The report also highlighted that tech companies monetize this data to the tune of billions of dollars of ads every year, exposing individuals to various harms such as identity theft and stalking. The FTC's director said that without significant action, the commercial "surveillance" ecosystem will only get worse. The FTC recommended Congress pass new privacy laws and called for tech companies to minimize how much data they collect and share. The report also urges platforms to avoid using privacy-invasive tracking technologies, such as pixels, to collect sensitive personal data.

YouTube Shorts to integrate Veo, Google’s AI video model - Veo will enable creators to make high-quality backgrounds and 6-second video clips. Veo is characterized as a step up from AI-powered “Dream Screen” feature, which could be used by creators to generate backgrounds in Shorts with text prompts. YouTube is also rolling out pause ads that will appear on the side of the screen when users pause the videos they're watching. YouTube says the pause ads, first tested in 2023, are less disruptive for viewers and are profitable, with premium pricing and strong brand lift results. Pause ads aren't new; they're already offered by services such as Hulu, AT&T, and Sling TV.

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

On YouTube, Major Brands’ Ads Appear Alongside Racist Falsehoods About Haitian Immigrants 🔒- Researchers have found YouTube ads from more than a dozen brands and large orgs that have ran against inflammatory and racist videos.

‘It can crush our business’: Ad buyers estimate major losses from Meta ad platform bugs - There have been more than 12 disruptions to Facebook Ads Manager since late May, with four being "major."

NBCU Takes Nielsen Gold, Surpasses 13% Share In August - NBCU was up 41% in August compared to July, beating YouTube, Walt Disney, and Netflix.

The sky is falling at TikTok, but employees, advertisers, and creators don't seem worried 🔒- Even though TikTok's court challenge to the government's law to ban TikTok or force a sale isn't looking good for the short-form video social platform, everyone is keeping calm and carrying on.

TikTok comes for Google’s ad business as it starts letting advertisers target its search results page - Brands can already advertise on TikTok’s search results page, but now they will have total control over how their ads appear on the page.

Amazon Ads launches AI-powered video - Amazon's new generative AI features could make it easier, faster, and cheaper for advertisers to create video and image content.

Mark Zuckerberg says Apple's culture is very different than Meta's — and the two rivals will be battling on multiple fronts 🔒- Zuck says Apple is a bigger competitor to Meta than many people realize. Remember, Meta’s primary business is ads. Watch out for Apple… 👀

Inside the WNBA’s surging ad rates—how Disney is pitching higher costs to brands 🔒- Disney is asking for $180 CPMs for the WNBA playoffs' final round, which is higher than most NFL games.

That’s It For This Week 👋

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