This week, while quiet on the news front, financial results have been pouring in. One of the key highlights is the stronger than expected results from the US tech giants, related to advertising, in particular. Meta and Alphabet have both outperformed expectations with their 2Q results. Meta, which last year alarmed the market with its first-ever revenue dip, has managed to bounce back. The company not only returned to growth in 1Q, but also posted a double-digit revenue growth for 2Q – this is first time double-digit growth has been delivered in a quarter by the group since 2021. Alphabet's YouTube also returned to growth this quarter, while search advertising was also robust. However, the picture isn't rosy for all. Snap's 2Q results paint a rather grim picture. Despite positive engagement trends, it continues to grapple with yield pressure and a persistent decline in revenues - a trend doesn't seem likely to improve in the upcoming quarter. In the UK, Informa and RELX, two UK-based B2B businesses, have reported robust growth in both revenue and profitability, indicating a continued recovery of face-to-face events post pandemic. A slight mixed bag from the rest, which includes solid statements from Rightmove and LBG Media, while YouGov saw a bit of a wobble on the top line. Finally, LTG reduced guidance for the full year amid an ongoing tough trading environment.
News of the week
AA/Warc upgrades 2023 UK adspend forecasts, but trims 2024
Advertising Association/ WARC has issued its quarterly update for UK ad spend this week. They have upgraded their UK ad spend forecast, with 2023 growth increased from 0.5% to 2.6%. This is after minor growth of 0.1% was achieved in 1Q. The upgrade is driven by increased internet spend and an anticipated stronger second half for TV. Despite the improved outlook, it was highlighted that high inflation could lead to a contraction of nearly 4.3% in real terms for the UK in 2023. Predicted growth for online display and search was revised up to 5.2% and 6.1%, respectively. While BVOD is now expected to grow 17.3%, significantly higher than the previous forecast of 2.5%, overall TV ad spend is still forecast to decline. Traditional media, which includes news brands and magazines, are expected to see shrinking online spend, while radio's online spend was also revised up. For 2024, overall ad spend is forecast to grow by 4%, a downgrade from the previously expected 5.3%. Campaign
THG acquires newspaper CityAM
THG, owner of brands like Cult Beauty and LookFantastic, has acquired the London-based newspaper City AM. City AM is a free newspaper that has a monthly online readership of c.2m and a daily print circulation of c.70k. It covers mainly financial and business news targeted at financial workers whose profiles are attractive to advertisers. The decision to put the newspaper up for sale in July was prompted by the pandemic's impact and a decline in commuter numbers. At first glance, THG's acquisition of City AM may seem surprising. However, THG's existing brands, such as Myprotein and Lookfantastic.com, already have their own magazines. By bringing City AM under its wing, THG aims to leverage its expertise in online publishing to bolster the newspaper's digital presence, which had previously been limited by funding constraints. Following the acquisition, City AM's co-founder and CEO, Jens Torpe, announced his retirement. THG founder Matthew Moulding stated that CityAM will help expand THG’s ad tech reach and emphasized his commitment to promoting UK business. However, sceptics believe the deal is ill-fitted and that THG should instead focus on improving its core operations. BBC, The Guardian
TikTok introduces music streaming services and text-only posts
TikTok has recently introduced a text-only feature allowing users to diversify their content beyond short videos. This move aligns TikTok with platforms like Threads, Bluesky, and Mastodon, all vying to compete with Twitter. Additionally, TikTok is venturing into music streaming, a potential threat to Spotify and Apple Music, by leveraging on its one billion user base. Initial launch of TikTok Music in Indonesia and Brazil have now extended to Australia, Mexico, and Singapore. In anticipation, TikTok has broadened its licensing agreement with Warner Music Group and ByteDance has removed the free-tier of its music-streaming product, Resso. The Verge, CNBC
Twitter is now ‘X’, the blue bird has flown away
Elon Musk has rebranded Twitter, changing both its name and the blue bird logo to 'X'. This signifies a strategic shift towards becoming an 'everything app' with limitless interactivity. This move comes amid the company's ongoing efforts to regain advertisers and generate positive cash flow. This rebranding trend is not unique to Twitter, as seen in high-profile tech companies like Facebook becoming Meta, Google rebranding to Alphabet, and Snapchat evolving into Snap. These changes reflect a shared ambition to diversify beyond digital advertising, even though it remains their primary revenue source. It's too early to predict the success of Musk's Twitter overhaul. However, potential legal challenges loom over the new name 'X', as it has already been trademarked by several companies, including Meta and Microsoft. FT, CNBC
Other news
• France’s antitrust authority acts against Apple’s data use for advertising. FT
• Telegraph Media Group reported profits ahead of expectation. FT
