A blanket ban of TikTok in the US is now gaining traction. This week, Montana has become the first state in the US to ban the social media platform. Taking effect in January, TikTok will be banned from operating in the state and new downloads are no longer allowed from app stores.
This comes after the five-hour grilling of the CEO by congress in March, and a ban of the apps on governmental devices. We are already seeing a backlash, with both TikTok and creators who rely on the platform for sponsorship income expected to take legal action. It is still too early to tell TikTok’s fate, but if a blanket ban does materialise in the US, we could see advertising dollar flow back to TikTok’s peers such as Meta, Alphabet and Snap. However, it is likely this will be a long and drawn out process. In other news, a report published by DoubleVerify has given a glimpse into how much advertising fraud has amounted on CTV, which has been rising in popularity. Fraud rates has been increasing faster than the growth in CTV viewing. Elsewhere, the demand for Ascential’s WGSN seems to be heating up as there are rumours of multiple bids for the asset, which could potentially fetch more than £700m.
News this week
TikTok faces first US state-wide ban, creators suing against the decision
This week, Montana has become the first US state to ban TikTok. The bill was already passed by lawmakers last month and has now been approved by the governor of the state, effective from January 2024. This new law prohibits TikTok from operating within Montana and app stores from allowing new downloads of this app. Amid growing privacy and national security concerns, several countries have already banned the app from government devices and the US federal government is demanding a divestment, which was opposed by China. TikTok said that the ban violated the First Amendment rights of its users and that they will defend them in court. One day after the ban was approved, five TikTok creators sued to block the ban. The new law is likely to face further legal challenges, which could delay enforcement. FT, The Guardian
CTV ad fraud spikes, amid growing demand
Ad fraud on connected TVs (CTV) globally surged by 69% in 2022, more than the 62% growth in viewership, according to DoubleVerify. Ad dollars are increasingly moving into CTV, where CPMs for even low quality CTV inventory can be as high as 4x that of as on open web. Global CTV spend was US$19.7bn in 2022 and is expected to rise to US$23.2bn this year and US$26.9bn in 2024. As the demand for CTV has ramped so has the volume of fraud, which is appearing. The number of streaming fraud schemes tracked by DoubleVerify has tripled since 2020. Adage, Warc
Bidding for WGSN commences, valued at >£700m
Sky News reported that Paul Zwillenberg, former CEO of Daily Mail & General Trust has been enlisted to advise BC Partners for a bid for WGSN, Ascential’s consumer data provider. The rumours is that the asset is valued at more than £700m, which equates to over 65% of Ascential’s current market cap. Sources suggest that Ascential had asked for initial offers for WGSN this week. Apax Partners are amongst the several buyers gunning for the asset. Neither Zwillenberg is not expected to have an ongoing role in the WGSN business if BC’s bid is successful. Sky
Netflix could cut spending by US$300m in 2023
According to The Wall Street Journal, Netflix plans to reduce its spending by US$300 million this year, as the delayed password-sharing crackdown means the positive revenue impact will also come through later in the year. Netflix is said to have asked its staff to be careful with their spending and hiring. Last year, the company went through several rounds of layoffs in order to cut costs, however hiring freeze and job cuts are not expected this time, according to the report. To put this into context, a US$300m cut in costs is a small amount in comparison with Netflix's total operating expenses, which were about US$26 billion last year. Netflix declined to comment on the report. Reuters, WSJ
Digiday survey: 71% agencies already adopted Generative AI
Digiday conducted a survey on the adoption of generative AI among nearly 90 agency and brand marketing professionals. It suggests that generative AI is very popular among marketers in general, with 62% have already figured out how to incorporate AI into workflow. However, it also reveals the different speed of agencies and brands in adopting generative AI, with 71% of agency professionals saying they are already using it, in comparison to only 44% of brand professionals. For agencies, the most common use of this technology are writing copy (75%), research (73%) and content creation (65%), while limited agencies surveyed use Generative AI on Data management (25%), Video/Audio (18%) and creative strategy and creating summaries (5%). Digiday
Other news
- Vice Media files for bankruptcy Reuters
- GroupM removed Twitter from ‘high risk’ list after new CEO joined. FT
- Netflix warns UK broadband providers ahead of password crackdown. The Guardian
